ROSARIO TEXTILE MILLS CORPORATION v. HOME BANKERS SAVINGS, GR NO.

137232, 2005-06-
29

Facts:

Rosario Textile Mills Corporation (RTMC) applied from Home Bankers Savings & Trust Co.

for a

Credit Line... bank approved RTMC's credit line but for only P8 million.

RTMC availed of the credit line by making numerous drawdowns, each drawdown being covered by a separate
promissory note and trust receipt.

RTMC failed to pay its loans.

bank filed a complaint for sum of money against RTMC and Yujuico before the Regional Trial

Court

They argue that the importation of raw materials under the credit line was with a grant of option to them to turn-
over to the bank the imported raw materials should these fail to meet their... manufacturing requirements.

RTMC offered to make such turn-over since the imported materials did not conform to the required specifications.
However, the bank refused to accept the same, until the materials were destroyed by a fire which gutted down
RTMC's... premises.

judgment is hereby rendered in favor of plaintiff... petitioners, appealed to the Court of Appeals, contending that
under the trust receipt contracts between the parties, they merely held the goods described therein in trust for
respondent Home Bankers Savings and Trust Company (the... bank) which owns the same.

Since the ownership of the goods remains with the bank, then it should bear the loss... petitioners theorize that
when petitioner RTMC imported the raw materials needed for its manufacture, using the credit line, it was merely
acting on behalf of the bank, the true owner of the goods by virtue of the trust receipts.

under the doctrine of res perit domino, the bank took the risk of the loss of said raw materials.

RTMC's role in the transaction was that of end user of the raw materials and when it did not accept those materials
as they did not meet the manufacturing... requirements, RTMC made a valid and effective tender of the goods to
the bank. Since the bank refused to accept the raw materials, RTMC stored them in its warehouse. When the
warehouse and its contents were gutted by fire, petitioners' obligation to the bank was... accordingly extinguished.

RTMC filed with the bank an application for a credit line in the amount of P10 million, but only P8 million was
approved.

RTMC then made withdrawals... from this credit line and issued several promissory notes in favor of the bank.

Issues:

THE ACTS OF THE PETITIONERS-DEFENDANTS WERE TANTAMOUNT TO A VALID AND EFFECTIVE TENDER OF THE
GOODS

COURT OF APPEALS ERRED IN NOT APPLYING THE DOCTRINE OF 'RES PERIT DOMINO' IN THE CASE AT BAR
CONSIDERING THE VALID AND EFFECTIVE TENDER OF THE DEFECTIVE RAW MATERIALS BY THE PETITIONERS-
DEFENDANTS TO THE RESPONDENT-PLAINTIFF AND THE EXPRESS STIPULATION

IN THEIR CONTRACT THAT OWNERSHIP OF THE GOODS REMAINS WITH THE RESPONDENT-PLAINTIFF.

COURT OF APPEALS VIOLATED THE PURPOSE OF TRUST RECEIPT LAW IN HOLDING THE PETITIONERS LIABLE TO THE
RESPONDENT."
Court of Appeals erred in holding that petitioners are not relieved of their obligation to pay their loan after they
tried to tender the goods to the bank which refused to accept the same, and... which goods were subsequently lost
in a fire

Court of Appeals erred when it ruled that petitioners are solidarily liable for the payment of their obligations to the
bank

Court of Appeals violated the Trust Receipts Law.

Ruling:

the bank is merely the holder of the security for its advance payments to petitioners; and that the goods they
purchased, through the credit line extended by the bank, belong to them and hold said... goods at their own risk.

It is thus clear that the principal transaction between petitioner RTMC and the bank is a contract of loan.

RTMC used the proceeds of this loan to purchase raw materials from a supplier abroad.

In order to secure the payment of the loan, RTMC delivered the raw... materials to the bank as collateral. Trust
receipts were executed by the parties to evidence this security arrangement. Simply stated, the trust receipts
were mere securities.

Petitioners' insistence that the ownership of the raw materials remained with the bank is untenable... petitioners
cannot be relieved of their obligation to pay their loan in favor of the bank.

the contract between the parties is a loan. What respondent bank sought to collect as creditor was the loan it
granted to petitioners. Petitioners' recourse is to sue their supplier, if... indeed the materials were defective.

Principles:

trust receipt as "a security transaction intended to aid in financing importers and retail dealers who do not have
sufficient funds or resources to finance the importation or purchase of merchandise, and who may not be... able to
acquire credit except through utilization, as collateral, of the merchandise imported or purchased."... a trust
receipt, therefore, is a security agreement, pursuant to which a bank acquires a 'security interest' in the goods.

Security Interest means a property interest in goods, documents, or instruments to secure performance of some
obligation of the entrustee or of some third persons to the entruster and includes title, whether or not expressed
to be absolute, whenever such title... is in substance taken or retained for security only."

If under the trust receipt, the bank is made to appear as the owner, it was but an artificial expedient, more of legal
fiction than fact, for if it were really so, it could dispose of the goods in any manner it wants, which it cannot do,
just to give consistency... with purpose of the trust receipt of giving a stronger security for the loan obtained by the
importer. To consider the bank as the true owner from the inception of the transaction would be to disregard the
loan feature thereof..."[1

. It secures an indebtedness and... there can be no such thing as security interest that secures no obligation
[G.R. No. 123546. July 2, 1998]
PEOPLE OF THE PHILIPPINES vs. JOERAL GALLENO,
Facts:
The victim Evelyn Obligar Garganera a 5-year old together with her younger brother, 3-year old
Eleazar, live under the care and custody of their uncle, Emetario Obligar, and aunt, Penicola Obligar.The
accused-appellant, is 19-year old Joeral Galleno. On August 16, 1994, Emetario and Penicola left their
residence to work at sugarcane plantation and the only persons left in the house were Evelyn and
Eleazar.
At around 4 o'clock in the afternoon, Galleno passed by the Obligars' residence and found the two
children left to themselves. The prosecution and the defense presented conflicting versions on what
occurred at said residence. However, the result is undisputed. Evelyn sustained a laceration in her vagina
which result in profuse, life-threatening bleeding due to her tender age.
For the prosecution, the victim herself testified that Galleno took advantage of the situation by sexually
molesting her. After lowering her shorts, he made Evelyn sit on his lap, facing him. The penetration
caused the child's vagina to bleed, making her cry in pain. Emeterio and Penicola also testified that when
they came home from work, they arrived to find Evelyn crying. Emetario noticed that there was blood in
Evelyn's dress and she was pressing a rug against her genital organ. Dr. Alfonso D. Orosco, the Rural
Health Physician reported, upon examining Evelyn, that he found (1) clotted blood, and (2) a vaginal
laceration.
On August 18, 1994, Emeterio brought Evelyn to the Roxas Memorial General Hospital were she was
examined by resident physician Dr. Ma. Lourdes Lañada. Dr. Lañada, testified that she found that "there
was a 3 cm. lacerated wound at the left anterior one-third of the vagina" and "the pressence of about 10-
15cc of blood" at the vaginal vault. Dr. Lañada recommended that evelyn be admitted for confinement in
the hospital because the wound in her vagina, which was bleeding, had to be repaired. The following
day, Evelyn was examined at Roxas Memorial General Hospital again where she was attended to by Dr.
Machael Toledo, the resident physician on duty, who found blood clots and minimal bleeding in the genital
area. Dr. Toledo " … pack(ed) the area to prevent further bleeding and (he) … admitted the patient for
possible repair of the laceration and blood transfusion because she has anaemia 2ndary to bleeding."
The trial deemed the following circumstances significant in finding accused-appellant culpable for the
crime of Statutory Rape.
Hence, the instant appeal and review.

Issue:
The Trial Court erred in giving full weight and credence to the testimonies of the medical doctors.

Ruling:
As a general rule, witnesses must state facts and not draw conclusions or give opinions. It is the court's
duty to draw conclusions from the evidence and form opinions upon the facts proved. However,
conclusions and opinions of witnesses are received in many cases, and are not confined to expert
testimony, based on the principle that either because of the special skill or expert knowledge of the
witness, or because of the nature of the subject matter under observation, of for other reasons, the
testimony will aid the court in reaching a judgment.
In the case at bar, the trial court arrived at its conclusions not only with the aid of the expert testimony
of doctors who gave their opinions as to the possible cause of the victim's laceration, but also the
testimony the victim herself. In other words, the trial court did not rely solely on the testimony of the
expert witnesses. Such expert testimony merely aided the trial court in the exercise of its judgment on the
facts. Hence, the fact that the experts enumerated various possible causes of the victim's laceration does
not mean the trial court's interference is wrong.
As regards the inconsistencies in Evelyn's declaration, particularly as to what really caused the
laceration, we are convinced that the child, due to her tender age, was just confused.
As regards accused-appellant's argument that the victim's testimony is just a concocted story of what
really happened, we apply the rule that the revelation of an innocent child whose chastity was abused
deserves full credence (People vs. Cagto, 253 SCRA 455 [1996]). We likewise consider the fact that her
uncle and aunt, virtually her foster parents, themselves support her story of rape. It is unnatural for a
parent to use her offspring as an engine of malice, especially if it will subject a daughter to
embarrassment and even stigma (People vs. Dones,supra.)

WHEREFORE, finding the conviction of accused-appellant justified by the evidence on record, the
assailed decision is hereby AFFIRMED in toto. SO ORDERED.
FIRST DIVISION

G.R. No. 223155, July 23, 2018

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. DANILO JAPAG AND ALVIN

LIPORADA, Accused,

DANILO JAPAG, Accused-Appellant.

DECISION

DEL CASTILLO, J.:

Assailed in this appeal is the May 21, 2015 Decision1 of the Court of Appeals (CA) in CA-G.R.
CR-HC. No. 01807 which affirmed with modification the October 29, 2013 Decision 2 of the
Regional Trial Court (RTC), Branch 13, Carigara, Leyte, finding appellant Danilo Japag guilty
beyond reasonable doubt of the crime of murder.

The Antecedent Facts

Appellant, together with his co-accused, Alvin Liporada (Liporada), was charged with the,
crime of murder in an Information3 dated May 11, 2009 which reads:

That on or about the 16th day of March, 2009[,] in the Municipality of Tunga, Province of
Leyte, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and helping one another, with deliberate intent to kill, with treachery
and taking advantage of superior strength, did then and there willfully, unlawfully and
feloniously attack and stab RODEL PARROCHO y MONTE, with the use of a bladed weapon,
which accused Danilo Japag provided himself for the purpose, thereby inflicting upon the
victim an incised wound at the back left, medial to the inferior portion of the left scapula,
penetrating the thoracic cavity, which was the direct and immediate cause of death of said
Rodel Parrocho y Monte.

CONTRARY TO LAW.

During his arraignment on July 7, 2009, appellant entered a plea of not guilty.4 Trial
thereafter ensued.

Version of the Prosecution

The prosecution's version of the incident is as follows:

On March 16, 2009, at around 3:00 p.m., Ramil Parrocho (Ramil), the victim's twin brother,
was at a sari-sari store in front of Gregorio Catenza National High School when he saw
appellant, Liporada, and Eman Macalalag (Macalalag) blocking the way of the victim who
was then about to the enter the school gate.5

Ramil thereafter saw Liporada punch his brother at the left cheek while being held in place
by Macalalag. Suddenly, appellant, who was positioned behind the victim, drew a bladed
weapon from his pocket and stabbed the latter at the back. Upon receiving the stabbing
blow, the victim fell on the ground. The attack on the victim was so unexpected that Ramil
and even the security guards at the school outposts were not able to come to his rescue.
Appellant, Liporada and Macalalag immediately fled towards the direction of the highway.6

The victim was rushed to the EVRMC Hospital in Tacloban City, but he was pronounced dead
on arrival. He died while the ambulance was en route to the hospital from the Municipality
of Jaro.7
Based on the post-mortem examination conducted on the victim's body by Dr. Crescento A.
Uribe (Dr. Uribe), the Municipal Health Officer, the cause of death was Intrathoracic
Hemorrhage Secondary to a Penetrating Stab Wound. The victim sustained an incised
wound about 2 centimeters in length below the scapular bone of his back. The wound was
fatal because it penetrated the victim's thoracic (chest) cavity.8

Version of the Defense

Appellant raised the justifying circumstance of self-defense in order to exculpate himself

from criminal liability, viz.:

x x x x On the mentioned date[,] at 2:00 o'clock in the afternoon, he was practicing

together with his classmates a song for their MSEP subject. Alvin Liporada and Eman
Macalalag were also there. While they were practicing, Rodel Parrocho came in and
threatened to kill him if he goes outside the school. Later that day, while he was on his way
home, Rodel Parrocho attacked him and hit him on his face with a fist blow causing him to
fall. When he was about to get up, Rodel Parrocho stabbed him with the use of [a] short
bladed weapon locally known as sipol. Fortunately, he was able to parry it and wrestled for
the knife. The next thing he knew was Rodel Parrocho fell to the ground with a stab wound.
This gave him an opportunity to run home. The following day, March 17, 2009[,] at about
7:00 o'clock in the evening, he went to [the] Tunga Police Station to surrender. His father
accompanied him.9

Ruling of the Regional Trial Court

In its Decision dated October 29, 2013, the RTC found appellant guilty beyond reasonable
doubt of the crime of murder under Article 248 of the Revised Penal Code.

The RTC found no merit in appellant's contention that he had acted in self-defense which
resulted in the victim's killing. Aside of the absence of proof showing that he had sustained
any injury as a result of the supposed hard punch thrown at him by the victim, 10 the RTC
also explained that:

Verily, the self-defense invoked by the accused cannot be appreciated, as it is unworthy of

belief. The wound sustained by the victim at his back, would belie the claim of the accused
that the stabbing was not deliberate. In fact, accused['s] intent to kill the victim was proven
through the deadly weapon used by him, his fatal stab thrust, and the location where the
fatal blow was directed, which stab wound resulted in the severe blood loss of the victim
leading to the latter's immediate death. x x x11

Moreover, the RTC ruled that the victim's killing was attended by the qualifying
circumstance of treachery, as the suddenness of appellant's attack on the victim from
behind rendered the latter defenseless and unable to flee or escape. The RTC held that
appellant had consciously adopted the manner by which he mounted the attack on the
victim in order to ensure his safety from any retaliatory attack and to deny the victim an
opportunity to defend himself or repel the attack.12

Accordingly, the RTC sentenced appellant to suffer the penalty of reclusion perpetua. It
likewise ordered appellant to pay the heirs of the victim: P75,000.00 as civil indemnity,
P75,000.00 as moral damages, P30,000.00 as exemplary damages, and P17,500.00 as
actual damages.13

The RTC also issued an alias warrant of arrest against Liporada "to be served in his
residence or anywhere where he could be found within the territory of the Philippines."14

Appellant thereafter appealed the RTC Decision before the CA.

Ruling of the Court of Appeals

In its Decision dated May 21, 2015, the CA affirmed the assailed RTC Decision with
modification as regards the imposition of interest at 6% per annum on all damages awarded
from date of finality of the judgment until fully paid.15

Like the RTC, the CA also rejected appellant's claim of self-defense in the absence of proof
of unlawful aggression on the part of the victim.16 It noted that Ramil's "clear and detailed
account of the incident negate[d] any hint that the unlawful aggression originated from the
victim,"17 as did the nature and location of the wound sustained by the latter. 18

The CA further ruled that the elements of the qualifying circumstance of treachery were
present in the case, since "[t]he victim had no chance to avoid the attack when he was
boxed by Alvin first and then suddenly stabbed from behind by [appellant], while being held
by Eman."19 It thus concluded that under those dire circumstances, the victim could not
have had the chance to defend himself.20

Aggrieved, appellant filed the present appeal.

The Issues

Appellant raises the following issues for the Court's resolution:

First, whether appellant was able to sufficiently prove the justifying circumstance of self-
defense;21

And second, whether the victim's stabbing was attended by treachery.22

The Court's Ruling

The appeal is unmeritorious.

It is settled that when an accused invokes self-defense, the burden of proof is shifted from
the prosecution to the defense,23 and it becomes incumbent upon the accused to prove, by
clear and convincing evidence, the existence of the following requisites of self-
defense: first, unlawful aggression on the part of the victim; second, reasonable necessity
of the means employed to prevent or repel such aggression; and third, lack of sufficient
provocation on the part of the person defending himself.24

As the burden of proof is shifted to the defense, the accused must rely on the strength of
his evidence and not on the weakness of the prosecution's evidence. After all, by invoking
self-defense, the accused, in effect, admits having killed or injured the victim, and he can
no longer be exonerated of the crime charged if he fails to prove the requisites of self-
defense.25

The most important requisite of self-defense is unlawful aggression which is the

condition sine qua nonfor upholding self-defense as a justifying circumstance.26 In other
words, unless it is shown by clear and convincing evidence that the victim had committed
unlawful aggression against the accused, "self-defense, whether complete or
incomplete, cannot be appreciated, for the two other essential elements [thereof] would
have no factual and legal bases without any unlawful aggression to prevent or repel."27

Unlawful aggression "contemplates an actual, sudden and unexpected attack, or imminent

danger thereof, and not merely a threatening or intimidating attitude. The person defending
himself must have been attacked with actual physical force or with actual use of [a]
weapon."28

After a thorough review of the records, we find that appellant failed to discharge the burden
of proving that the unlawful aggression had originated from the victim.

First, it is undisputed that appellant boarded a motorcycle and fled the situs
criminis immediately after stabbing the victim at the back.29 "Flight is a veritable badge of
guilt and negates the plea of self-defense."30

Second, the location, nature and seriousness of the wound sustained by the victim is
inconsistent with self-defense;31 rather, these factors indicate a determined effort to kill.

On this point, Dr. Uribe testified that the stabbing wound sustained by the victim at the
back portion of his body can be characterized as fatal, as it penetrated the latter's chest
cavity, viz.:

[PROS. CONSTANTINO F. ESBER]

Q: Going now straight [to] your external findings, will you please explain your finding
Number 4[?] [W]hat is meant by that?

A: 'Incised wound about 2 centimeters in length located at the back left, medial to inferior
portion of the left scapula, penetrating the thoracic cavity.'

Q: Since there is no sketch attached to your post mortem report[,] will you indicate using
the [interpreter as medium where that wound [was] exactly located?

A: This is the inferior portion of the scapula, so medial portion, [i]t is located here.

Witness indicated at the left side of the back portion below the scapular bone.

Q: In your examination[,] [d]octor, were you able to determine the entry?

A: At the back.

Q: Considering that it was at the back, was it probable that the assailant was at the back
of the victim?

A: Yes.

Q: How many incise[d] wound[s] have you found on the said victim?

A: Only one incised wound.

Q: Considering that [sic] its location and nature, how would you classify the wound[?]
[W]as it fatal?

A: It was fatal because it penetrated the thoracic cavity.

Q: What is meant, [d]octor, by thoracic cavity?

A: Chest cavity.32 (Emphasis supplied)

And third, both the RTC and the CA found the testimony of Ramil (the victim's twin brother)
to be clear and convincing in its vital points, i.e., on his detailed narration of the stabbing
incident and his positive identification of appellant as one of his brother's assailants.33 The
pertinent portion of Ramil's testimony is quoted below:

[PROS. CONSTANTINO F. ESBER]

Q: What did [Danilo Japag, Alvin Liporada, and Eman Macalalag] do next[,] if any[,] aside
from being at the gate of the school?

A: A: I saw them x x x x obstructing the passing on that gate of my brother Rodel and
Danilo Japag stabbed Rodel.34

xxxx

Q: Of the three, who boxed [the victim]?

A: Alvin Liporada.

Q: And was your brother hit?

A: Yes[,] sir.

Q: Where?

A: On his face[.] ([W]itness indicated the left cheek.)

Q: How many times did Alvin Liporada [delivered the] boxing blow [on the victim]?

A: Only once[,] sir[,] and immediately thereafter[,] Danilo Japag delivered [a]
stab thrust.35
xxxx

Q: Is Danilo Japag around in the court room today?

A: Yes[,] sir.

Q: Will you point him out?

A: There[.] ([W]itness pointed to a person inside the court room [who], when
asked of his name[,] identified himself as Danilo Japag.) 36

We, too, see no reason to disbelieve Ramil's testimony, as it was not shown that the lower
courts had overlooked, misunderstood or misappreciated facts or circumstances of weight
and substance which, if properly considered, would have altered the result of the case. 37

Simply stated, appellant's self-serving and unsubstantiated allegations that the victim was
the unlawful aggressor must necessarily fail when weighed against the positive,
straightforward and overwhelming evidence of the prosecution. Where unlawful
aggression on the part of the victim is not proven, there can be no self-defense.

We likewise agree with the CA's conclusion that the victim's killing was qualified by
treachery.38

"There is treachery when the offender employs means, methods or forms in the execution of
any of the crimes against persons that tend directly and especially to ensure its execution
without risk to himself arising from the defense which the offended party might make." 39

In this case, the records clearly show that the victim's killing was attended by treachery,
considering that: (a) the victim was fatally stabbed40 by appellant from
behind41 immediately after receiving a punch in the face from Liporada; 42 (b) the victim
was held in place by Macalalag when the stabbing blow was delivered by appellant;43 and
(c) the attack was so sudden and unexpected that the victim's brother and even the nearby
security guards were unable to prevent it.44

The totality of these circumstances clearly shows that the means of execution of the attack
gave the victim no opportunity to defend himself or to retaliate, and said means of
execution was deliberately adopted by appellant.45

In light of these, we find no reason to overturn the factual findings and conclusions of the
lower courts as they are supported by the evidence on record and applicable laws. However,
we deem it appropriate to increase the amount of exemplary damages from P30,000.00 to
P75,000.00 in conformity with prevailing jurisprudence. 46 In addition, and in lieu of actual
damages, appellant is ordered to pay temperate damages in the amount of P50,000.00. 47

WHEREFORE, the appeal is DISMISSED. The May 21, 2015 Decision of the Court of
Appeals in CA-G.R. CR-HC. No. 01807 is hereby AFFIRMED with MODIFICATION in that
the award of exemplary damages is increased to P75,000.00; and in lieu of actual damages,
temperate damages in the amount of P50,000.00 is awarded.

SO ORDERED.
WESTMONT INVESTMENT CORPORATION v. AMOS P. FRANCIA, GR No. 194128, 2011-12-07

Facts:

On March 27, 2001, respondents Amos P. Francia, Jr., Cecilia Zamora and Benjamin Francia (the Francias) filed a
Complaint for Collection of Sum of Money and Damages[4] arising from their investments against petitioner
Westmont Investment Corporation

(Wincorp) and respondent Pearlbank Securities Inc. (Pearlbank) before the RTC.

The pre-trial conference was later conducted after the parties had filed their respective pre-trial briefs. The parties
agreed on the following stipulation of facts, as contained in the Pre-Trial Order[12] issued by the RTC on April 17,
2002:

The personal and juridical circumstances of the parties meaning, the plaintiffs and both corporate defendants;

That plaintiffs caused the service of a demand letter on Pearl Bank on February 13, 2001 marked as Exhibit E;

Plaintiffs do not have personal knowledge as to whether or not Pearl Bank indeed borrowed the funds allegedly
invested by the plaintiff from Wincorp; and

That the alleged confirmation advices which indicate Pearl Bank as alleged borrower of the funds allegedly
invested by the plaintiffs in Wincorp do not bear the signature or acknowledgment of Pearl Bank. (Emphases
supplied)

The gist of the testimony of Amos Francia, Jr. (Amos) is as follows:... in 1999, he was enticed by Ms. Lalaine Alcaraz,
the bank manager of Westmont Bank, Meycauayan, Bulacan Branch, to make an investment with Wincorp, the
bank's financial investment arm, as it was offering interest rates that were 3% to 5% higher than... regular bank
interest rates.

they placed their investment in the amounts of P1,420,352.72... and P2,522,745.34 with Wincorp in consideration
of a net interest rate of 11% over a 43-day spread.

When the 43-day placement matured, the Francias wanted to retire their investments but they were told that
Wincorp had no funds.

Wincorp "rolled-over" their placements and issued Confirmation Advices[16] extending their placements for...
another 34 days. The said confirmation advices indicated the name of the borrower as Pearlbank.

they again tried to get back the principal amount they invested plus interest but, again, they were frustrated.

they demanded from Pearlbank[18] their investments.

RTC rendered a decision[25] in favor of the Francias and held Wincorp solely liable to them.

The CA affirmed with modification the ruling of the RTC

Issues:

whether or not the CA is correct in finding Wincorp solely liable to pay the Francias the amount of P3,984,062.47
plus interest of 11% per annum.

Ruling:

the contract of agency and the fact that defendant-appellee PearlBank actually received their money were never
proven. The records are bereft of any showing that defendant-appellee PearlBank is the actual borrower of the
money invested by plaintiffs-appellees as... defendant-appellant Wincorp never presented any evidence to prove
the same.

The fact that the name of defendant-appellee PearlBank was printed in the Confirmation Advices as the actual
borrower does not automatically makes defendant-appellee PearlBank liable to the... plaintiffs-appellees as
nothing therein shows that defendant-appellee PearlBank adhered or acknowledged that it is the actual borrower
of the amount specified therein.

In a contract of agency, a person binds himself to render some service or to do something in representation or on
behalf of another with the latter's consent.

It is said that the underlying principle of the contract of agency is to accomplish... results by using the services of
others to do a great variety of things. Its aim is to extend the personality of the principal or the party for whom
another acts and from whom he or she derives the authority to act. Its basis is representation.

Significantly, the elements of the contract of agency are: (1) consent, express or implied, of the parties to establish
the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for himself;

(4) the agent acts within the scope of his authority.

In this case, the principal-agent relationship between the Francias and Wincorp was not duly established by
evidence. The records are bereft of any showing that Wincorp merely brokered the loan transactions between the
Francias and Pearlbank and the latter was the actual... recipient of the money invested by the former. Pearlbank
did not authorize Wincorp to borrow money for it. Neither was there a ratification, expressly or impliedly, that it
had authorized or consented to said transaction.

As to Pearlbank, records bear out that the Francias anchor their cause of action against it merely on the strength of
the subject Confirmation Advices bearing the name "PearlBank" as the supposed borrower of their investments.

The Francias were consistent in saying that they only dealt with Wincorp and not with Pearlbank.

Although the subject Confirmation Advices indicate the name of Pearlbank as the purported borrower of the said
investments, said documents do not bear the signature or acknowledgment of Pearlbank or any of its officers. This
cannot prove the position of Wincorp that it was

Pearlbank which received and benefited from the investments made by the Francias. There was not even a
promissory note validly and duly executed by Pearlbank which would in any way serve as evidence of the said
borrowing.

Another significant point which would support the stand of Pearlbank that it was not the borrower of whatever
funds supposedly invested by the Francias was the fact that it initiated, filed and pursued several cases against
Wincorp, questioning, among others, the latter's acts... of naming it as borrower of funds from investors.

the petition is DENIED

Principles:

the findings of fact of the CA are final and conclusive and this Court will not review them on appeal.

While it goes without saying that only questions of law can be raised in a petition for review on certiorari under
Rule 45, the same admits of exceptions, namely: (1) when the findings are grounded entirely on speculations,
surmises, or conjectures; (2) when the inference made... is manifestly mistaken, absurd, or impossible; (3) when
there is a grave abuse of discretion; (4) when the judgment is based on misappreciation of facts; (5) when the
findings of fact are conflicting; (6) when in making its findings, the same are contrary to the admissions of... both
appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the
petition as well as in the petitioner's main and... reply briefs are not disputed by the respondent; and (10) when
the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on
record.
G.R. No. 155619 August 14, 2007

LEODEGARIO BAYANI, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Leodegario Bayani (petitioner) was charged with Violation of Batas Pambansa Blg. 22 in an Information,
to wit:

That on or about the 20th day of August 1992, in the Municipality of Candelaria, Province of Quezon,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused did then and
there willfully, unlawfully and feloniously issue and make out Check No. 054924 dated August 26, 1992, in
the amount of TEN THOUSAND PESOS (₱10,000.00) Philippine Currency, drawn against the PS Bank,
Candelaria Branch, Candelaria, Quezon, payable to "Cash" and give the said check to one Dolores
Evangelista in exchange for cash although the said accused knew fully well at the time of issuance of said
check that he did not have sufficient funds in or credit with the drawee bank for payment, the same was
dishonored and refused payment for the reason that the drawer thereof, the herein accused, had no
sufficient funds therein, and that despite due notice said accused failed to deposit the necessary amount
to cover said check, or to pay in full the amount of said check, to the damage and prejudice of said
Dolores Evangelista in the aforesaid amount.

Contrary to law.1

After trial, petitioner was convicted by the Regional Trial Court (RTC) of Lucena City, Branch 55, in a
Decision rendered on November 20, 1995, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing considerations, this Court finds the accused Leodegario S.
Bayani, GUILTY beyond reasonable doubt of violating Section 1, Batas Pambansa Blg. 22, and hereby
sentences him to suffer one (1) year imprisonment and a fine of Five Thousand (₱5,000.00) Pesos, with
subsidiary imprisonment in case of insolvency. He shall likewise pay the complaining witness, Dolores
Evangelista, the sum of ₱10,000.00, the value of Check No. 054924 he issued and drew against PS
Bank, Candelaria Branch, which was subsequently dishonored by the said drawee bank for insufficiency
of funds.

The accused Leodegario Bayani is further ordered to pay Dolores Evangelista the amount of ₱5,000.00
representing attorney's fees. He shall also pay double the cost of this suit.
SO ORDERED.2

In convicting petitioner, the trial court made the following findings of facts:

1. That the Philippine Savings Bank, Candelaria Branch, has issued to the accused check booklet (Exh.
"C") on December 12, 1991, with the Check No. 054924 as one of those included in said booklet of
checks;

2. That the said Check No. 054924 dated August 26, 1992, was drawn and issued payable to Cash in the
amount of ₱10,000.00; said drawn check was made to apply to the account of the accused, Leodegario
S. Bayani whose name appears therein in bold print at the upper portion of the said check;

3. That said Check No. 054924, is a post-dated check, was subsequently dishonored by the drawee bank,
PS Bank, Candelaria Branch, for insufficiency of funds;

4. That the checking account of the accused Leodegario S. Bayani with PS Bank, Candelaria Branch, was
closed on September 1, 1992 (Exh. "B-3"), which at the time had only remaining deposit in the amount of
₱2,414.96 (Exh. "B-4").3

The trial court also made the following findings:

The check in question is postdated, issued and drawn on August 20, 1992, and dated August 26, 1992. It
was presented to complaining witness, Dolores Evangelista, for encashment by Alicia Rubia whom the
former knows. After the check was deposited with the bank, it was returned to Evangelista for
insufficiency of funds (Exh. "A-5"). Thereafter, she pursued the following events to demand payment of
the value of the check:

xxxx

After the confrontation at the office of Atty. Emmanuel Velasco, Evangelista has had another
confrontation with the accused Bayani and Alicia Rubia at Candelaria municipal building before Brgy.
Captain Nestor Baera, but again the accused and Rubia pointed to each other for the settlement of the
amount involved in the check in question.

Of these two (2) confrontations Evangelista had with the accused Bayani and Alicia Rubia, including the
chances to have met or known the complaining witness Evangelista since 1977 up to the filing of the
instant case in the Municipal Trial Court of Candelaria, all what the accused Leodegario Bayani could say
were flat denials of having talked with, or otherwise met Evangelista, regarding the latter’s claim of
payment of the value of Check No. 054924, admittedly from the check booklet of the said accused Bayani
issued by PS Bank, Candelaria Branch.4

On appeal, the Court of Appeals (CA)5 affirmed in toto the trial court’s decision. The CA’s Decision dated
January 30, 2002 provides for the following dispositive portion:

WHEREFORE, and it appearing from the circumstances of both the offense and the offender which does
not indicate good faith or a clear mistake of fact in accordance with the Administrative Circular No. 13-
2001, the judgment appealed from is AFFIRMED in toto, with costs.

SO ORDERED.6

Thus, herein petition for review on certiorari under Rule 45, Rules of Court, with the following assignment
of errors:

THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN REFUSING TO ACQUIT THE ACCUSED
DESPITE THE CONVICTION OF THE TRIAL COURT IS UTTERLY BASED ON HEARSAY EVIDENCE;

THE COURT OF APPEALS ERRED IN CONVICTING THE ACCUSED DESPITE THE

CONSIDERATION FOR THE ISSUANCE OF THE CHECK WAS NOT DULY ESTABLISHED;

THE TRIAL COURT AND THE COURT OF APPEALS ERRED WHEN THEY CONVICTED THE
ACCUSED BASED ON THE WEAKNESS OF THE LATTER'S EVIDENCE AND NOT ON THE
STRENGTH OF PROSECUTION'S EVIDENCE;
THE TRIAL COURT AND THE COURT OF APPEALED (sic) ERRED IN CONVICTING THE ACCUSED
SOLELY ON THE BASES OF PRESUMPTIONS.7

On the other hand, the Office of the Solicitor General (OSG), representing respondent, argues that: (1)
petitioner’s denial of his liability for Check No. 05492 cannot overcome the primordial fact that his
signature appears on the face of such check; (2) want of consideration is a personal defense and is not
available against a holder in due course; and (3) the constitutional presumption of innocence was
overcome by the requisite quantum of proof.8

Well-settled is the rule that the factual findings and conclusions of the trial court and the CA are entitled to
great weight and respect, and will not be disturbed on appeal in the absence of any clear showing that the
trial court overlooked certain facts or circumstances which would substantially affect the disposition of the
case. Jurisdiction of this Court over cases elevated from the CA is limited to reviewing or revising errors of
law ascribed to the CA, whose factual findings are conclusive and carry even more weight when said
court affirms the findings of the trial court, absent any showing that the findings are totally devoid of
support in the record or that they are so glaringly erroneous as to constitute serious abuse of discretion. 9

The Court sustains the CA in affirming petitioner’s conviction by the RTC.

Petitioner denies having issued the check subject of this case. He argues that the evidence pinpointing
him as the signatory on the check is merely hearsay.

Section 36 of Rule 130 of the Rules of Court provides for the rule on hearsay evidence, to wit:

Sec. 36. Testimony generally confined to personal knowledge; hearsay excluded. - A witness can testify
only to those facts which he knows of his personal knowledge; that is, which are derived from his own
perception, except as otherwise provided in these rules.

Under the above rule, any evidence — whether oral or documentary — is hearsay if its probative value is
not based on the personal knowledge of the witness, but on that of some other person who is not on the
witness stand. Hence, information that is relayed to the former by the latter before it reaches the court is
considered hearsay.10

In the present case, complainant Evangelista testified that she was approached by Alicia Rubia who told
her that she was requested by petitioner to have the check exchanged for cash, as he needed money
badly.11 Obviously, Evangelista’s testimony is hearsay since she had no personal knowledge of the fact
that petitioner indeed requested Rubia to have the check exchanged for cash, as she was not personally
present when petitioner supposedly made this request. What she testified to, therefore, was a matter that
was not derived from her own perception but from Rubia’s.

However, petitioner is barred from questioning the admission of Evangelista’s testimony even if the same
is hearsay. Section 34, Rule 132 of the Rules of Court requires that the trial court shall not consider any
evidence which has not been finally offered. Section 35 of the same Rule provides that as regards the
testimony of a witness, the offer must be made at the time the witness is asked to testify. And under
Section 36 of the same Rule, objection to a question propounded in the course of the oral examination of
a witness shall be made as soon as the ground therefor becomes reasonably apparent.

Thus, it has been held that "in failing to object to the testimony on the ground that it was hearsay, the
evidence offered may be admitted."12 Since no objection to the admissibility of Evangelista’s testimony
was timely made – from the time her testimony was offered13 and up to the time her direct examination
was conducted14 – then petitioner has effectively waived15 any objection to the admissibility thereof and
his belated attempts to have her testimony excluded for being hearsay has no ground to stand on.

While Evangelista’s statement may be admitted in evidence, it does not necessarily follow that the same
should be given evidentiary weight. Admissibility of evidence should not be equated with weight of
evidence.16 In this regard, it has been held that although hearsay evidence may be admitted because of
lack of objection by the adverse party’s counsel, it is nonetheless without probative value, 17 unless the
proponent can show that the evidence falls within the exception to the hearsay evidence rule. 18

In this case, Evangelista’s testimony may be considered as an independently relevant statement, an

exception to the hearsay rule, the purpose of which is merely to establish the fact that the statement was
made or the tenor of such statement. Independent of the truth or the falsity of the statement, the fact that
it has been made is relevant.19When Evangelista said that Rubia told her that it was petitioner who
requested that the check be exchanged for cash, Evangelista was only testifying that Rubia told her of
such request. It does not establish the truth or veracity of Rubia’s statement since it is merely hearsay, as
Rubia was not presented in court to attest to such utterance. On this score, evidence regarding the
making of such independently relevant statement is not secondary but primary, because the statement
itself may (a) constitute a fact in issue or (2) be circumstantially relevant as to the existence of that
fact.20 Indeed, independent of its truth or falsehood, Evangelista’s statement is relevant to the issues of
petitioner’s falsehood, his authorship of the check in question and consequently, his culpability of the
offense charged.

In any event, petitioner’s conviction did not rest solely on Evangelista’s testimony. There are other pieces
of evidence on record that established his guilt, to wit: the subject check was included in the booklet of
checks issued by the PSBank to petitioner; the subject check was made to apply to the account of
petitioner whose name appears on the upper portion of the said check; and most telling is that petitioner
never categorically denied that the signature appearing on the check was his. What petitioner claimed
was that the signature on the check was similar to his signature, although there were "differences," viz.:

Q: I am showing to you a certain document purpurting (sic) to be PSB Check No. 054924, will you please
look at this particular document and tell this Honorable Court if this particular check is one of those issued
to you by the Philippine Saving’s Bank?

A: Yes, sir.

Q: Now, there appears a signature above a line located at the bottom of the said check which appears to
be Leodegario Bayani, please tell this Honorable Court if you know this particular signature?

A: Although it is similar to my signature I could not tell if this is my signature, sir.

Q: Please explain to this Honorable Court why is it so?

A: Because there are some differences, sir.

Q: Please tell this Honorable Court the particular differences you are referring to?

A: At the middle of the signature I usually put my middle initial and also the beginning of my family name
is almost connected with each other, sir.21

Neither did petitioner claim that the signature was a forgery. Had he done so, then a forensic examination
of the signature in appearing on the check and his signature would have been made in order to determine
the genuineness or authenticity of the signature appearing on the check.

All these pieces of evidence, taken together, inevitably support the finding of petitioner’s guilt beyond
reasonable doubt of the offense charged.

Petitioner also argues that he cannot be convicted due to the prosecution’s failure to prove that the
subject check was issued to apply on account or for value.

The elements of the offense penalized by Batas Pambansa Blg. 22 are:

(1) the making, drawing, and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no sufficient funds in
or credit with the drawee bank for the payment of such check in full upon its presentment; and

(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or
dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop
payment.22

As regards the first element, it is presumed, upon issuance of the checks and in the absence of evidence
to the contrary, that the same was issued for valuable consideration. 23 Under the Negotiable Instruments
Law, it is presumed that every party to an instrument acquired the same for a consideration or for
value.24 In alleging that there was no consideration for the subject check, it devolved upon petitioner to
present convincing evidence to overthrow the
presumption and prove that the check was issued without consideration.

Valuable consideration may consist either of some right, interest, profit or benefit accruing to the party
who makes the contract; or some forbearance, detriment, loss of some responsibility to act; or labor or
service given, suffered or undertaken by the other side. It is an obligation to do or not to do, in favor of the
party who makes the contract, such as the maker or indorser.25 It was shown in this case that the check
was issued and exchanged for cash. This was the valuable consideration for which the check was issued.

At any rate, what the law punishes is the mere act of issuing a bouncing check, not the purpose for which
it was issued or the terms and conditions relating to its issuance. The law does not make any distinction
on whether the checks within its contemplation are issued in payment of an obligation or to merely
guarantee the obligation. The thrust of the law is to prohibit the making of worthless checks and putting
them in circulation.26

Thus, the Court cannot sustain petitioner’s stance that the prosecution failed to prove his guilt. As ruled
in Lee v. Court of Appeals:

Proof beyond reasonable doubt does not mean absolute certainty.1awphi1 Suffice it to say the law
requires only moral certainty or that degree of proof which produces conviction in a prejudiced mind. 27

After going over the evidence presented by the prosecution and the defense in this case, the Court finds
no reason to overturn the judgment of conviction rendered by the RTC, as affirmed by the CA, as the
prosecution sufficiently proved petitioner's guilt beyond reasonable doubt.

WHEREFORE, the petition is DENIED.

SO ORDERED.
G.R. No. 149576 August 8, 2006

REPUBLIC OF THE PHILIPPINES, represented by the Land Registration Authority, Petitioner,

vs.
KENRICK DEVELOPMENT CORPORATION, Respondent.

DECISION

CORONA, J.:

The Republic of the Philippines assails the May 31, 2001 decision 1 and August 20, 2001 resolution of the
Court of Appeals in CA-G.R. SP No. 52948 in this petition for review under Rule 45 of the Rules of Court.

This case stemmed from the construction by respondent Kenrick Development Corporation of a concrete
perimeter fence around some parcels of land located behind the Civil Aviation Training Center of the Air
Transportation Office (ATO) in 1996. As a result, the ATO was dispossessed of some 30,228 square
meters of prime land. Respondent justified its action with a claim of ownership over the property. It
presented Transfer Certificate of Title (TCT) Nos. 135604, 135605 and 135606 issued in its name and
which allegedly originated from TCT No. 17508 registered in the name of one Alfonso Concepcion.

ATO verified the authenticity of respondent’s titles with the Land Registration Authority (LRA). On May 17,
1996, Atty. Jose Loriega, head of the Land Title Verification Task Force of the LRA, submitted his report.
The Registrar of Deeds of Pasay City had no record of TCT No. 17508 and its ascendant title, TCT No.
5450. The land allegedly covered by respondent’s titles was also found to be within Villamor Air Base
(headquarters of the Philippine Air Force) in Pasay City.

By virtue of the report, the Office of the Solicitor General (OSG), on September 3, 1996, filed a complaint
for revocation, annulment and cancellation of certificates of title in behalf of the Republic of the Philippines
(as represented by the LRA) against respondent and Alfonso Concepcion. It was raffled to Branch 114 of
the Regional Trial Court of Pasay City where it was docketed as Civil Case No. 96-1144.

On December 5, 1996, respondent filed its answer which was purportedly signed by Atty. Onofre Garlitos,
Jr. as counsel for respondent.

Since Alfonso Concepcion could not be located and served with summons, the trial court ordered the
issuance of an alias summons by publication against him on February 19, 1997.

The case was thereafter punctuated by various incidents relative to modes of discovery, pre-trial,
postponements or continuances, motions to dismiss, motions to declare defendants in default and other
procedural matters.

During the pendency of the case, the Senate Blue Ribbon Committee and Committee on Justice and
Human Rights conducted a hearing in aid of legislation on the matter of land registration and titling. In
particular, the legislative investigation looked into the issuance of fake titles and focused on how
respondent was able to acquire TCT Nos. 135604, 135605 and 135606.

During the congressional hearing held on November 26, 1998, one of those summoned was Atty.
Garlitos, respondent’s former counsel. He testified that he prepared respondent’s answer and transmitted
an unsigned draft to respondent’s president, Mr. Victor Ong. The signature appearing above his name
was not his. He authorized no one to sign in his behalf either. And he did not know who finally signed it.

With Atty. Garlitos’ revelation, the Republic promptly filed an urgent motion on December 3, 1998 to
declare respondent in default, 2 predicated on its failure to file a valid answer. The Republic argued that,
since the person who signed the answer was neither authorized by Atty. Garlitos nor even known to him,
the answer was effectively an unsigned pleading. Pursuant to Section 3, Rule 7 of the Rules of Court, 3 it
was a mere scrap of paper and produced no legal effect.

On February 19, 1999, the trial court issued a resolution granting the Republic’s motion. 4 It found
respondent’s answer to be sham and false and intended to defeat the purpose of the rules. The trial court
ordered the answer stricken from the records, declared respondent in default and allowed the Republic to
present its evidence ex parte.
The Republic presented its evidence ex parte, after which it rested its case and formally offered its
evidence.

Meanwhile, respondent sought reconsideration of the February 19, 1999 resolution but the trial court
denied it.

Aggrieved, respondent elevated the matter to the Court of Appeals via a petition for certiorari 5 seeking to
set aside the February 19, 1999 resolution of the trial court. Respondent contended that the trial court
erred in declaring it in default for failure to file a valid and timely answer.

On May 31, 2001, the Court of Appeals rendered the assailed decision. It found Atty. Garlitos’ statements
in the legislative hearing to be unreliable since they were not subjected to cross-examination. The
appellate court also scrutinized Atty. Garlitos’ acts after the filing of the answer 6 and concluded that he
assented to the signing of the answer by somebody in his stead. This supposedly cured whatever defect
the answer may have had. Hence, the appellate court granted respondent’s petition for certiorari. It
directed the lifting of the order of default against respondent and ordered the trial court to proceed to trial
with dispatch. The Republic moved for reconsideration but it was denied. Thus, this petition.

Did the Court of Appeals err in reversing the trial court’s order which declared respondent in default for its
failure to file a valid answer? Yes, it did.

A party may, by his words or conduct, voluntarily adopt or ratify another’s statement. 7 Where it appears
that a party clearly and unambiguously assented to or adopted the statements of another, evidence of
those statements is admissible against him. 8 This is the essence of the principle of adoptive admission.

An adoptive admission is a party’s reaction to a statement or action by another person when it is

reasonable to treat the party’s reaction as an admission of something stated or implied by the other
person. 9 By adoptive admission, a third person’s statement becomes the admission of the party
embracing or espousing it. Adoptive admission may occur when a party:

(a) expressly agrees to or concurs in an oral statement made by another; 10

(b) hears a statement and later on essentially repeats it; 11

(c) utters an acceptance or builds upon the assertion of another; 12

(d) replies by way of rebuttal to some specific points raised by another but ignores further points which he
or she has heard the other make 13 or

(e) reads and signs a written statement made by another. 14

Here, respondent accepted the pronouncements of Atty. Garlitos and built its case on them. At no
instance did it ever deny or contradict its former counsel’s statements. It went to great lengths to explain
Atty. Garlitos’ testimony as well as its implications, as follows:

1. While Atty. Garlitos denied signing the answer, the fact was that the answer was signed. Hence, the
pleading could not be considered invalid for being an unsigned pleading. The fact that the person who
signed it was neither known to Atty. Garlitos nor specifically authorized by him was immaterial. The
important thing was that the answer bore a signature.

2. While the Rules of Court requires that a pleading must be signed by the party or his counsel, it does
not prohibit a counsel from giving a general authority for any person to sign the answer for him which was
what Atty. Garlitos did. The person who actually signed the pleading was of no moment as long as
counsel knew that it would be signed by another. This was similar to addressing an authorization letter "to
whom it may concern" such that any person could act on it even if he or she was not known beforehand.

3. Atty. Garlitos testified that he prepared the answer; he never disowned its contents and he resumed
acting as counsel for respondent subsequent to its filing. These circumstances show that Atty. Garlitos
conformed to or ratified the signing of the answer by another.

Respondent repeated these statements of Atty. Garlitos in its motion for reconsideration of the trial court’s
February 19, 1999 resolution. And again in the petition it filed in the Court of Appeals as well as in the
comment 15 and memorandum it submitted to this Court.
Evidently, respondent completely adopted Atty. Garlitos’ statements as its own. Respondent’s adoptive
admission constituted a judicial admission which was conclusive on it.

Contrary to respondent’s position, a signed pleading is one that is signed either by the party himself or his
counsel. Section 3, Rule 7 is clear on this matter. It requires that a pleading must be signed by the party
or counsel representing him.

Therefore, only the signature of either the party himself or his counsel operates to validly convert a
pleading from one that is unsigned to one that is signed.

Counsel’s authority and duty to sign a pleading are personal to him. He may not delegate it to just any
person.

The signature of counsel constitutes an assurance by him that he has read the pleading; that, to the best
of his knowledge, information and belief, there is a good ground to support it; and that it is not interposed
for delay. 16Under the Rules of Court, it is counsel alone, by affixing his signature, who can certify to these
matters.

The preparation and signing of a pleading constitute legal work involving practice of law which is reserved
exclusively for the members of the legal profession. Counsel may delegate the signing of a pleading to
another lawyer 17 but cannot do so

in favor of one who is not. The Code of Professional Responsibility provides:

Rule 9.01 ― A lawyer shall not delegate to any unqualified person the performance of any task which by
law may only be performed by a member of the Bar in good standing.

Moreover, a signature by agents of a lawyer amounts to signing by unqualified persons, 18 something the
law strongly proscribes.

Therefore, the blanket authority respondent claims Atty. Garlitos entrusted to just anyone was void. Any
act taken pursuant to that authority was likewise void. There was no way it could have been cured or
ratified by Atty. Garlitos’ subsequent acts.

Moreover, the transcript of the November 26, 1998 Senate hearing shows that Atty. Garlitos consented to
the signing of the answer by another "as long as it conformed to his draft." We give no value whatsoever
to such self-serving statement.

No doubt, Atty. Garlitos could not have validly given blanket authority for just anyone to sign the answer.
The trial court correctly ruled that respondent’s answer was invalid and of no legal effect as it was an
unsigned pleading. Respondent was properly declared in default and the Republic was rightly allowed to
present evidence ex parte.

Respondent insists on the liberal application of the rules. It maintains that even if it were true that its
answer was supposedly an unsigned pleading, the defect was a mere technicality that could be set aside.

Procedural requirements which have often been disparagingly labeled as mere technicalities have their
own valid raison d’ etre in the orderly administration of justice. To summarily brush them aside may result
in arbitrariness and injustice. 19

The Court’s pronouncement in Garbo v. Court of Appeals 20 is relevant:

Procedural rules are [tools] designed to facilitate the adjudication of cases. Courts and litigants alike are
thus [enjoined] to abide strictly by the rules. And while the Court, in some instances, allows a relaxation in
the application of the rules, this, we stress, was never intended to forge a bastion for erring litigants to
violate the rules with impunity. The liberality in the interpretation and application of the rules applies only
in proper cases and under justifiable causes and circumstances. While it is true that litigation is not a
game of technicalities, it is equally true that every case must be prosecuted in accordance with the
prescribed procedure to insure an orderly and speedy administration of justice.

Like all rules, procedural rules should be followed except only when, for the most persuasive of reasons,
they may be relaxed to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the prescribed procedure. 21 In this case, respondent failed to show
any persuasive reason why it should be exempted from strictly abiding by the rules.

As a final note, the Court cannot close its eyes to the acts committed by Atty. Garlitos in violation of the
ethics of the legal profession. Thus, he should be made to account for his possible misconduct.

WHEREFORE, the petition is hereby GRANTED. The May 31, 2001 decision and August 20, 2001
resolution of the Court of Appeals in CA-G.R. SP No. 52948 are REVERSED and SET ASIDE and the
February 19, 1999 resolution of the Regional Trial Court of Pasay City, Branch 114 declaring respondent
in default is hereby REINSTATED.

Let a copy of this decision be furnished the Commission on Bar Discipline of the Integrated Bar of the
Philippines for the commencement of disbarment proceedings against Atty. Onofre Garlitos, Jr. for his
possible unprofessional conduct not befitting his position as an officer of the court.

SO ORDERED.
G.R. No. 144621 May 9, 2003

PEOPLE OF THE PHILIPPINES, appellee,

vs.
ISAGANI GUITTAP y PENGSON (Acquitted), WILFREDO MORELOS y CRUZ (Acquitted), CESAR
OSABEL @ DANILO MURILLO @ DANNY @ SONNY VISAYA @ BENJIE CANETE, ARIEL DADOR y
DE CHAVEZ (Discharge), DECENA MASINAG VDA. DE RAMOS, LUISITO GUILLING @ LUISITO
(Acquitted), and JOHN DOE @ PURCINO, accused.
DECENA MASINAG VDA. DE RAMOS, appellant.

YNARES-SANTIAGO, J.:

Appellant Decena Masinag Vda. de Ramos assails the decision1 of the Regional Trial Court of Lucena
City, Branch 60, in Criminal Case No. 92-387, finding her and accused Cesar Osabel guilty beyond
reasonable doubt of the crime of Robbery with Homicide and sentencing each of them to suffer the
penalty of reclusion perpetua, with all the accessory penalties provided by law, and to indemnify the heirs
of the victims the amounts of P100,000.00 as civil indemnity and P67,800.00 as actual damages.

On September 1, 1992, an Amended Information for Robbery with Double Homicide was filed against
appellant Masinag, Isagani Guittap y Pengson, Wilfredo Morelos y Cruz, Cesar Osabel, 2 Ariel Dador y De
Chavez, Luisito Guilling and John Doe @ "Purcino". The accusatory portion of the information reads:

That on or about the 17th day of July 1992, in the City of Lucena, Province of Quezon, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, conspiring and confederating with one
another, armed with bladed weapons, by means of violence, and with intent to gain, did then and there
willfully, unlawfully and feloniously take, steal and carry away certain personal items, to wit:

one (1) solid gold ring valued at P8,000.00

one (1) diamond ring valued at P40,000.00

one (1) necklace with pendant valued at P2,000.00

cash money in the amount of P4,500.00

one (1) samsonite bag valued at P650.00

one (1) .22 Cal. Squibbman with SN 64130 valued at

P5,000.00

one (1) pair of sandal valued at P650.00

one (1) music mate (karaoke) valued at P5,000.00

one (1) jacket (adidas) valued at P1,000.00; and

one (1) pair of shoes valued at P1,000.00

with a total value of P67,800.00, owned by and belonging to spouses Romualdo Jael and
Lionela3 Caringal, without the consent and against the will of the latter, to the damage and prejudice of
the aforementioned offended parties in the aforestated sum of P67,800.00, Philippine Currency, and, on
the same occasion of such robbery, the said accused, conspiring and confederating with one another,
armed with the same bladed weapons, taking advantage of superior strength, and employing means to
weaken the defense or of means or persons to insure or afford impunity, and with intent to kill, did then
and there willfully, unlawfully and feloniously stab both of said spouses Romualdo Jael and Lionela
Caringal thereby inflicting upon the latter several fatal wounds which directly caused the death of the
aforenamed spouses.

Contrary to law.4
Upon arraignment, appellant Masinag pleaded "not guilty." Trial on the merits thereafter ensued. Accused
Ariel Dador was discharged as a state witness while accused Purcino remained at large.

On February 15, 2000, the trial court rendered its decision, the dispositive portion of which states:

WHEREFORE, premises considered, this court finds Cesar Osabel and Decena Masinag GUILTY
beyond reasonable doubt of the crime of robbery with homicide and they are sentenced to RECLUSION
PERPETUAwith all the accessory penalties provided by law. For insufficiency of evidence, the accused
Isagani Guittap, Wilfrido Morelos and Luisito Guilling are hereby ACQUITTED.

The accused Cesar Osabel and Decena Masinag are also ordered to indemnify the heirs of the deceased
Romualdo Jael and Leonila Caringal Jael in the amount of (P100,000.00) One Hundred Thousand Pesos
plus actual damages of (P67,800.00) Sixty Thousand and Eight Hundred Pesos, Philippine Currency.

SO ORDERED.5

During the trial, state witness Ariel Dador testified that in the evening of July 15, 1992, Cesar Osabel
asked him and a certain Purcino to go with him to see appellant Masinag at her house in Isabang, Lucena
City. When they got there, Osabel and Masinag entered a room while Dador and Purcino waited outside
the house. On their way home, Osabel explained to Dador and Purcino that he and Masinag planned to
rob the spouses Romualdo and Leonila Jael. He further told them that according to Masinag, the spouses
were old and rich, and they were easy to rob because only their daughter lived with them in their house.

The following day, at 7:00 p.m., Dador, Osabel, and Purcino went to the house of the Jael spouses to
execute the plan. Osabel and Purcino went inside while Dador stayed outside and positioned himself
approximately 30 meters away from the house. Moments later, he heard a woman shouting for help from
inside the house. After two hours, Osabel and Purcino came out, carrying with them one karaoke machine
and one rifle. Osabel's hands were bloodied. He explained that he had to tie both the victims' hands with
the power cord of a television set before he repeatedly stabbed them, He killed the spouses so they can
not report the robbery to the authorities.

Osabel ordered Dador to hire a tricycle while he and Purcino waited inside the garage of a bus line.
However, when Dador returned with the tricycle, the two were no longer there. He proceeded to the
house of Osabel and found him there with Purcino. They were counting the money they got from the
victims. They gave him P300.00. Later, when Dador accompanied the two to Sta. Cruz, Manila to dispose
of the karaoke machine, he received another P500.00. Osabel had the rifle repaired in Gulang-Gulang,
Lucena City.

Dador and Osabel were subsequently arrested for the killing of a certain Cesar M. Sante. During the
investigation, Dador executed an extrajudicial confession admitting complicity in the robbery and killing of
the Jael spouses and implicating appellant and Osabel in said crime. The confession was given with the
assistance of Atty. Rey Oliver Alejandrino, a former Regional Director of the Human Rights Commission
Office. Thereafter, Osabel likewise executed an extrajudicial confession of his and appellant's
involvement in the robbery and killing of the Jaels, also with the assistance of Atty. Alejandrino.

Simeon Tabor, a neighbor of the Jaels, testified that at 8:00 in the morning of July 17, 1992, he noticed
that the victims, who were known to be early risers, had not come out of their house. He started calling
them but there was no response. He instructed his son to fetch the victims' son, SPO1 Lamberto Jael.
When the latter arrived, they all went inside the house and found bloodstains on the floor leading to the
bathroom. Tabor opened the bathroom door and found the lifeless bodies of the victims.

Dr. Vicente F. Martinez performed the post-mortem examination on the bodies of the victims and testified
that since rigor mortis had set in at the back of the neck of the victims, Romualdo Jael died between six to
eight hours before the examination while Leonila Jael died before midnight of July 16, 1992. The cause of
death of the victims was massive shock secondary to massive hemorrhage and multiple stab wounds.

Appellant Masinag, for her part, denied involvement in the robbery and homicide. She testified that she
knew the victims because their houses were about a kilometer apart. She and Osabel were friends
because he courted her, but they never had a romantic relationship. She further claimed that the last time
she saw Osabel was six months prior to the incident. She did not know Dador and Guilling at the time of
the incident. According to her, it is not true that she harbored resentment against the victims because they
berated her son for stealing their daughter's handbag. On the whole, she denied any participation in a
conspiracy to rob and kill the victims.

From the decision convicting appellant Masinag and Osabel, only the former appealed, based on the lone
assigned error:

THE TRIAL COURT COMMITTED REVERSIBLE ERROR IN FINDING ACCUSED-APPELLANT GUILTY

BEYOND REASONABLE DOUBT OF CONSPIRING WITH HER CO-ACCUSED TO COMMIT THE
CRIME OF ROBBERY WITH HOMICIDE DESPITE THE ABSENCE OF HER ACTUAL PARTICIPATION
IN THE COMMISSION OF THE SAID CRIME.

The appeal is meritorious.

While it is our policy to accord proper deference to the factual findings of the trial court, 6 owing to their
unique opportunity to observe the witnesses firsthand and note their demeanor, conduct, and attitude
under grueling examination,7 where there exist facts or circumstances of weight and influence which have
been ignored or misconstrued, or where the trial court acted arbitrarily in its appreciation of facts, 8 we may
disregard its findings.

Appellant contends that the extrajudicial confessions of Osabel and Dador were insufficient to establish
with moral certainty her participation in the conspiracy. Firstly, Dador was not present to hear appellant
instigate the group to rob the Jael spouses. He only came to know about the plan when Osabel told him
on their way home. Thus, Dador had no personal knowledge of how the plan to rob was actually made
and of appellant's participation thereof. Secondly, while Osabel initially implicated her in his extrajudicial
confession as one of the conspirators, he repudiated this later in open court when he testified that he was
forced to execute his statements by means of violence.

On direct examination, Dador narrated what transpired in the house of appellant on July 15, 1992, to wit:

PROSECUTOR GARCIA:

Q. And do you remember the subject or subjects of that conversation that transpired among you?

A. Yes, sir.

Q. Please tell us what was the subject or subjects of the conversation that transpired among you on
July 15, 1992 at the house of Decena Masinag?

A. The subject of our conversation there was the robbing of Sps. Jael, sir.

Q. How did that conversation begin with respect to the proposed robbery of Sps. Jael?

A. It was only the two (2) who planned that supposed robbery, Daniel Murillo and Decena Masinag,
sir.

Q. And why were you able to say that it was Danilo Murillo and Decena Masinag who planned the
robbery?

A. Because they were the only ones who were inside the house and far from us and they were
inside the room, sir.

xxx xxx xxx

Q. On that night, July 15, 1992 did you ever have any occasion to talk with Decena Masinag
together with your companions Danilo Murillo and Purcino?

A. No, sir.

Q. Was there any occasion on the same date that Decena Masinag talk to you?

ATTY. FLORES:

Already answered, your Honor.

COURT:
Witness, may answer.

WITNESS:

None, sir. (emphasis ours)9

We find that the foregoing testimony of Dador was not based on his own personal knowledge but from
what Osabel told him. He admitted that he was never near appellant and that he did not talk to her about
the plan when they were at her house on July 15, 1992. Thus, his statements are hearsay and does not
prove appellant's participation in the conspiracy.

Under Rule 130, Section 36 of the Rules of Court, a witness can testify only to those facts which he
knows of his own personal knowledge, i.e., which are derived from his own perception; otherwise, such
testimony would be hearsay. Hearsay evidence is defined as "evidence not of what the witness knows
himself but of what he has heard from others."10 The hearsay rule bars the testimony of a witness who
merely recites what someone else has told him, whether orally or in writing. 11 In Sanvicente v.
People,"12 we held that when evidence is based on what was supposedly told the witness, the same is
without any evidentiary weight for being patently hearsay. Familiar and fundamental is the rule that
hearsay testimony is inadmissible as evidence.13

Osabel's extrajudicial confession is likewise inadmissible against appellant. The res inter allos acta rule
provides that the rights of a party cannot be prejudiced by an act, declaration, or omission of
another.14 Consequently, an extrajudicial confession is binding only upon the confessant and is not
admissible against his co-accused. The reason for the rule is that, on a principle of good faith and mutual
convenience, a man's own acts are binding upon himself, and are evidence against him. So are his
conduct and declarations. Yet it would not only be rightly inconvenient, but also manifestly unjust, that a
man should be bound by the acts of mere unauthorized strangers; and if a party ought not to be bound by
the acts of strangers, neither ought their acts or conduct be used as evidence against him. 15

The rule on admissions made by a conspirator, while an exception to the foregoing, does not apply in this
case. In order for such admission to be admissible against a co-accused, Section 30, Rule 130 of the
Rules of Court requires that there must be independent evidence aside from the extrajudicial confession
to prove conspiracy. In the case at bar, apart from Osabel's extrajudicial confession, no other evidence of
appellant's alleged participation in the conspiracy was presented by the prosecution. There being no
independent evidence to prove it, her culpability was not sufficiently established.

Unavailing also is rule that an extrajudicial confession may be admissible when it is used as a
corroborative evidence of other facts that tend to establish the guilt of his co-accused. The implication of
this rule is that there must be a finding of other circumstantial evidence which, when taken together with
the confession, establishes the guilt of a co-accused beyond reasonable doubt.16 As earlier stated, there
is no other prosecution evidence, direct or circumstantial, which the extrajudicial confession may
corroborate.

In People v. Berroya,17 we held that to hold an accused liable as co-principal by reason of conspiracy, he
must be shown to have performed an overt act in pursuance or furtherance of the conspiracy. That overt
act may consist of active participation in the actual commission of the crime itself, or it may consist of
moral assistance to his co-conspirators by being present at the time of the commission of the crime, or by
exerting moral ascendancy over the other co-conspirators by moving them to execute or implement the
conspiracy.

In the case at bar, no overt act was established to prove that appellant shared with and concurred in the
criminal design of Osabel, Dador and Purcino. Assuming that she had knowledge of the conspiracy or she
acquiesced in or agreed to it, still, absent any active participation in the commission of the crime in
furtherance of the conspiracy, mere knowledge, acquiescence in or agreement to cooperate is not
sufficient to constitute one as a party to a conspiracy.18 Conspiracy transcends mere companionship.19

Conspiracy must be proved as convincingly as the criminal act itself. Like any element of the offense
charged, conspiracy must be established by proof beyond reasonable doubt. 20 Direct proof of a previous
agreement need not be established, for conspiracy may be deduced from the acts of appellant pointing to
a joint purpose, concerted action and community of interest. Nevertheless, except in the case of the
mastermind of a crime, it must also be shown that appellant performed an overt act in furtherance of the
conspiracy.21
All told, the prosecution failed to establish the guilt of appellant with moral certainty. Its evidence falls
short of the quantum of proof required for conviction. Accordingly, the constitutional presumption of
appellant's innocence must be upheld and she must be acquitted.

WHEREFORE, in view of the foregoing, the appealed decision of the Regional Trial Court of Lucena City,
Branch 60 in Criminal Case No. 92-487, insofar only as it finds appellant guilty beyond reasonable doubt
of the crime of Robbery with Homicide, is REVERSED and SET ASIDE. Appellant Decena Masinag Vda.
De Ramos is ACQUITTED of the crime of Robbery with Homicide. She is ORDERED RELEASED unless
there are other lawful causes for her continued detention. The Director of Prisons is DIRECTED to inform
this Court, within five (5) days from notice, of the date and time when appellant is released pursuant to
this Decision.

SO ORDERED.
R. No. 126713 July 27, 1998

ADORACION E. CRUZ, THELMA DEBBIE E. CRUZ and GERRY E. CRUZ, petitioners,

vs.

COURT OF APPEALS and SPOUSES ELISEO and VIRGINIA MALOLOS, respondents.

PANGANIBAN, J.:

Contracts Continue the law between the parties. They must be read together and interpreted in a manner
that reconciles and gives life to all them. The intent of the parties, as shown by the clear language used,
prevails overpost facto explanations that find no support from the words employed by the parties or from
their contemporary and subsequent acts showing their understanding of such contracts. Furthermore,
subsequent agreement cannot novate or change by implication a previous one, unless the old and the
new contracts are, on every point, incompatible with each other. Finally, collateral facts may be admitted
in evidence when a rational similarity exists between the conditions giving rise to the fact offered and the
circumstances surrounding the issue or fact to be proved.

The Case

Before us is a petition for review on certiorari seeking to nullify the Court of Appeals (CA) Decision 1 in
CA-GR CV 33566, promulgated July 15, 1996, which reversed the Regional Trial Court (RTC) of
Antipolo, Rizal; and the CA Resolution 2 of October 1, 1996, which denied petitioners' Motion for
Reconsideration.

Petitioners Adoracion, Thelma Debbie, Gerry and Arnel (all surnamed Cruz) filed an action for
partition against the private respondents, Spouses Eliseo and Virginia Malolos. On January 28,
1991, the trial court rendered a Decision which disposed as follows: 3

WHEREFORE, judgment is hereby rendered for the plaintiffs and against the defendants-spouses
—

1. Ordering the partition of the seven parcels of land totaling 1,912 sq. m. among the four (4)
plaintiffs and the defendants-spouses as follows:

a. Adoracion E. Cruz (1/5) 382 sq. m.

b. Thelma Debbie Cruz (1/5) 382 sq. m.

c. Gerry E. Cruz (1/5) 382 sq. m.

d. Arnel E. Cruz (1/5) 382 sq. m.

e. Spouses Eliseo and

Virginia Malolos (1/5) 382 sq. m.

to whom Lot No. 1-C-2-B-2-B-4-L-1-A with an area of 276 sq. m. covered by TCT No. 502603 and a
portion of Lot No. 1-C-2-B-2-B-4-L-1-B covered by TCT No. 502604 to the extent of 106 sq. m.
adjoining TCT No. 502603.

2. Ordering the parties herein to execute a project of partition in accordance [with] this decision
indicating the partition of the seven (7) parcels of land within fifteen (15) days upon receipt of this
judgment.

3. Ordering defendants-spouses to pay plaintiffs herein P5,000.00 as and for attorney's fees;

4 Costs of suit.
4
On appeal, Respondent Court reversed the trial court thus:
WHEREFORE, finding the appeal to be meritorious, We REVERSE the appealed decision and
render judgment DISMISSING the complaint without prejudice however to the claim of plaintiff-
appellees for their shares in the proceeds of the auction sale of the seven (7) parcels of land in
question against Nerissa Cruz Tamayo pursuant to the Memorandum Agreement.

Cost against the plaintiff-appellees.

As earlier stated, reconsideration was denied through the appellate court's challenged
Resolution: 5

WHEREFORE, for lack of merit, the Motion for Reconsideration is DENIED.

The Antecedent Facts

6
The facts of this case are undisputed. The assailed Decision relates them as follows:

Delfin I. Cruz and Adoracion Cruz were spouses and their children were Thelma, Nerissa, Arnel
and Gerry Cruz. Upon the death of Delfin I. Cruz, [his] surviving spouse and children executed on
August 22, 1977 a notarized Deed of Partial Partition (Exhibit 2) by virtue of which each one of
them was given a share of several parcels of registered lands all situated in Taytay, Rizal.

The following day, August 23, 1977, the same mother and children executed a Memorandum
Agreement (Exhibit H) which provided;

That the parties hereto are common co-owners pro-indiviso in equal shares of the following
registered real properties, all situated at Taytay, Rizal, Philippines, . . . .

xxx xxx xxx

That sometime on August 22, 1977, a Deed of Partial Partition was executed among us before Atty.
Virgilio J. Tamayo, Notary Public on and for the Province of Rizal, per Doc. No. 1776; Page No. 14;
of his Notarial Register No. XLIX, Series of 1977;

xxx xxx xxx

That as a result of said partial partition, the properties affected were actually partitioned and the
respective shares of each party, adjudicated to him/her;

That despite the execution of this Deed of Partial Partition and the eventual disposal or sale of
their respective shares, the contracting parties herein covenanted and agreed among themselves
and by these presents do hereby bind themselves to one another that they shall share alike and
receive equal shares from the proceeds of the sale of any lot or lots allotted to and adjudicated in
their individual names by virtue of this deed of partial partition."

That this Agreement shall continue to be valid and enforceable among the contracting parties
herein up to and until the last lot covered by the Deed of [P]artial [P]artition above adverted to
shall have been disposed of or sold and the proceeds thereof equally divided and their respective
shares received by each of them.

This Memorandum Agreement was registered and annotated in the titles of the lands covered by
the Deed of Partial Partition.

Subsequently, the same parties caused the consolidations and subdivisions of the lands they
respectively inherited from the late Delfin I. Cruz per Deed of Partial Partition After that they
registered the Deed of Partial Partition and subdivision plans and titles were issued in their
names. In the case of Nerissa Cruz Tamayo, the following titles were issued to her in her name:
TCT No. 502603 (Exhibit A), TCT No. 502604 (Exhibit B), TCT No. 502605 (Exhibit C), TCT No.
502606 (Exhibit D), TCT No. 502608 (Exhibit E), TCT No. 502609 (Exhibit F), TCT No. 502610
(Exhibit G), hereinafter called the lands in question. Naturally, the annotation pertaining to the
Memorandum Agreement was carried in each of said seven (7) titles and annotated in each of
them.

Meanwhile, the spouses Eliseo and Virginia Malolos filed Civil Case No. 31231 against the
spouses Nerissa Cruz-Tamayo and Nelson Tamayo for a sum of money. The Court of First
Instance of Rizal, Branch XVI (Quezon City) rendered a decision on June 1, 1981 in favor of Eliseo
and Virginia condemning the spouses Nerissa and Nelson Tamayo to pay them P126,529.00 with
12% interest per annum from the filing of the complaint plus P5,000.00 attorney's fee. After the
finality of that decision, a writ of execution (Exhibit J) was issued on November 20, 1981.

Enforcing said writ, the sheriff of the court levied upon the lands in question. On June 29, 1983,
these properties were sold in an execution sale to the highest bidders, the spouses Eliseo and
Virginia Malolos. Accordingly, the sheriff executed a Certificate of Sale (Exhibit K) over —

. . . all the rights, claims, interests, titles, shares, and participations of defendant spouses Nerissa
Tamayo and Nelson Tamayo. . .

Nerissa Cruz Tamayo failed to exercise her right of redemption within the statutory period and so
the final deed of sale was executed by the sheriff conveying the lands in question to spouses
Eliseo and Virginia Malolos. The Malolos couple asked Nerissa Cruz Tamayo to give them the
owner's duplicate copy of the seven (7) titles of the lands in question but she refused. The couple
moved the court to compel her to surrender said titles to the Register of Deeds of Rizal for
cancellation. This was granted on September 7, 1984. But Nerissa was adamant. She did not
comply with the Order of the court and so the Malolos couple asked the court to declare said titles
as null and void.

At this point, Adoracion Cruz, Thelma Cruz, Gerry Cruz and Arnel Cruz entered the picture by
filing in said lower court a motion for leave to intervene and oppose [the] Maloloses' motion. The
Cruzes alleged that they were co-owners of Nerissa Cruz Tamayo over the lands in question.

On January 18, 1985, said court issued an Order modifying the Order of September 7, 1984 by
directing the surrender of the owner's duplicate copies of the titles of the lands in question to the
Register of Deeds not for cancellation but for the annotation of the rights, and interest acquired by
the Maloloses over said lands.

On February 17, 1987, Adoracion, Thelma, Gerry and Arnel Cruz filed Civil Case No. 961-A for
Partition of Real Estate against spouses Eliseo and Virginia Malolos over the lands in question.

As already stated in the first paragraph of this Decision, the court a quo rendered a decision in
favor of the plaintiffs from which the defendants appealed to this court. . . . .

Ruling of the Court of Appeals

For Respondent Court, the central issue was: "Did the Memorandum of Agreement [MOA] (Exhibit
H) 7revoke, cancel or supersede the Deed of Partial Partition [DPP] (Exhibit 2)?" 8 If so, then
petitioners and Spouses Tamayo were co-owners of the land in issue, and partition should ensue
upon motion of the former; if not, then the latter are its absolute owners and no partition should
be made.

Respondent Court resolved the above question in the negative for the following reasons:

First, the DPP was not materially and substantially incompatible with the MOA. The DPP conferred
absolute ownership of the parcels of land in issue on Nerissa Cruz Tamayo, while the MOA merely
created an obligation on her part to share with the petitioners the proceeds of the sale of said
properties.

Second, the fact that private respondents registered the DPP was inconsistent with the allegation
that they intended to abandon it. Indeed, had they meant to abandon it, they would have simply
gathered the copies of said document and then torn or burned them.

Third, petitioners were estopped from claiming co-ownership over the disputed properties
because, as absolute owners, they either mortgaged or sold the other properties adjudicated to
them by virtue of the DPP.

Hence, this petition. 9

Assignment of Errors
In their Memorandum, 10 petitioners submit the following assignment of errors;

A. Respondent Court erred in ruling that the Memorandum of Agreement (Exhibit "H") does not
prevail over the Deed of Partial Partition (Exhibit 2).

B. Respondent Court erred in ruling that petitioners can only claim their right to the proceeds of
[the] auction sale.

C. Respondent Court erred in ruling that petitioners are in estoppel by deed.

D. Respondent Court erred in ruling that the registration of the deed of partial partition precluded
the petitioners from abrogating it.

E. Respondent Court erred when it completely ignored the finality of the order of the Regional
Trial Court of Quezon City, Branch LXXXVI as embodied in the decision of the Regional Trial Court
of Antipolo, Rizal, Branch 71.

In fine, the resolution of this petition hinges on the following issues: (1) whether the DPP was
cancelled or novated by the MOA; (2) whether the MOA established, between petitioners and the
judgment debtor, a co-ownership of the lots in question; (3) whether petitioners are barred by
estoppel from claiming co-ownership of the seven parcels of land; and (4) whether res
judicata has set in.

The Court's Ruling

The petition is bereft of merit. It fails to demonstrate any reversible error on the part of the Court
of Appeals.

First Issue: No Novation or Cancellation

In their Memorandum, petitioners insist that the MOA categorically and unmistakably named and
covenanted them as co-owners of the parcels in issue and novated their earlier agreement, the
Deed of Partial Partition.

Petitioners claim that the MOA clearly manifested their intention to create a co-ownership. This is
particularly evident in Exhibit 1-B, which provides:

That despite the execution of this Deed of Partial Partition and eventual disposal or sale of their
respective shares, the contracting parties herein covenanted and agreed among themselves and
by these presents do hereby bind themselves to one another that they shall share and receive
equal shares from the proceeds of the Sale of any lot or lots allotted to and adjudicated in their
individual names by virtue of this deed of partial partition.

The Court disagrees. The foregoing provision in the MOA does not novate, much less cancel, the
earlier DPP. Novation, one of the modes of extinguishing an obligation, requires the concurrence
of the following: (1) there is a previous valid obligation; (2) the parties concerned agree to a new
contract; (3) the old contract is extinguished; and (4) there is a valid new contract. 11 Novation may
be express or implied. Article 1292 of the Code provides: "In order that an obligation may be
extinguished by another which substitutes the same, it is imperative that it be so declared in
unequivocal terms [express novation], 12 or that the old and the new obligations be on every point
incompatible with each other [implied novation].

Tested against foregoing standards, petitioners' stance is shattered to pieces. The stipulation that
the petitioners and Spouses Tamayo were co-owners was merely the introductory part of the
MOA, and it reads: 13

That the parties are common co-owners pro-indiviso in equal shares of the following registered
real properties, all situated at Taytay, Rizal, Philippines. . . .

xxx xxx xxx

That sometime on August 22, 1977, a Deed of Partial Partition was executed among us before Atty.
Virgilio J. Tamayo, Notary Public in and for the Province of Rizal, per. Doc. No. 1796; Page No. 14;
of his Notarial Register No. XLIX, Series of 1977;
Following the above-quoted stipulation is a statement that the subject parcels of land had in fact
been partitioned, but that the former co-owner intended to share with petitioners the proceeds of
any sale of said land, 14 viz.:

That [as] a result of said partial partition, the properties affected were actually partitioned and the
respective shares of each party, adjudicated to him/her;

That despite the execution of this Deed of Partial Partition and the eventual disposal or sale of
their respective shares, the contracting parties herein covenanted and agreed among themselves
[and] to one another that they shall do [sic] hereby bind themselves to one another that they shall
share alike and receive equal shares from the proceeds of the sale of any lot or lots allotted to and
adjudicated in their individual names by virtue of this deed of partial partition;

That this Agreement shall continue to be valid and enforceable among the contracting parties
herein up to and until the last lot covered by the deed of partial partition above adverted to shall
have been disposed of or sold and the proceeds thereof equally divided and their respective
shares received by each of them.

xxx xxx xxx

The MOA falls short of producing a novation, because it does not express a clear intent to
dissolve the old obligation as a consideration for the emergence of the new one. 15 Likewise,
petitioners fail to show that the DPP and the MOA are materially; and substantially incompatible
with each other. Petitioners admit that, under the MOA, they and the Tamayo spouses agreed to
equally share in the proceeds of the sale of the lots. 16 Indeed, the DPP granted title to the lots in
question to the co-owner to whom they were assigned, and the MOA created an obligation on the
part of such co-owner to share with the others the proceeds of the sale of such parcels. There is
no incompatibility between these two contracts.

Verily, the MOA cannot be construed as a repudiation of the earlier DPP. Both documents can
exist together and must be so interpreted as to give life to both. Respondent Court aptly
explained: 17

The Deed of Partial Partition conferred upon Nerissa Cruz Tamayo absolute ownership over the
lands in question. The Memorandum of Agreement merely created an obligation on the part of
absolute owner Nerissa Cruz Tamayo to share [with] the appellees with [sic] the proceeds of the
sale of said properties.

The obligation of the owner of a piece of land to share [with] somebody with [sic] its fruits or the
proceeds of its sale does not necessarily impair his dominion over the property much less make
the beneficiary his co-owner thereof.

All in all, the basic principle underlying this ruling is simple: when the text of a contract is explicit
and leaves no doubt as to its intention, the court may not read into it any other intention that
would contradict its plain import. 18 The hornbook rule on interpretation of contracts gives
primacy to the intention of the parties, which is the law among them. Ultimately, their intention is
to be deciphered not from the unilateralpost facto assertions of one of the parties, but from the
language used in the contract. And when the terms of the agreement, as expressed in such
language, are clear, they are to be understood literally, just as they appear on the face of the
contract.

Indeed, the legal effects of a contract are determined by extracting the intention of the parties
from the language they used and from their contemporaneous and subsequent acts. 19 This
principle gains more force when third parties are concerned. To require such persons to go
beyond what is clearly written in the document is unfair and unjust. They cannot possibly delve
into the contracting parties' minds and suspect that something is amiss, when the language of the
instrument appears clear and unequivocal.

Second Issue: No Co-ownership in the MOA

Petitioners contend that they converted their separate and individual ownership over the lands in
dispute into a co-ownership by their execution of the MOA and the annotation thereof on the
separate titles.

The Court is not convinced. The very provisions of the MOA belie the existence of a co-
ownership. First, it retains the partition of the properties, which petitioners supposedly placed in
co-ownership; and, second, it vests in the registered owner the power to dispose of the land
adjudicated to him or her under the DPP. These are antithetical to the petitioners' contention. In a
co-ownership, an undivided thing or right belongs to two or more persons. 20 Put differently,
several persons hold common dominion over a spiritual (or idea) part of a thing, which is not
physically divided. 21 In the present case, however, the parcels of land in the MOA have all been
partitioned and titled under separate and individual names. More important, the MOA stipulated
that the registered owner could sell the land without the consent of the other parties to the
MOA. Jus disponendi is an attribute of ownership, and only the owner can dispose of a
property. 22

Contrary to petitioner's claim, the annotation of the MOA in the certificate of title did not engender
any co-ownership. Well-settled is the doctrine that registration merely confirms, but does not
confer, title. 23 It does not give the holder any better title than what he actually has. As earlier
observed, the MOA did not make petitioners co-owners of the disputed parcels of land. Hence, the
annotation of this document in the separate certificates of title did nor grant them a greater right
over the same property.

Third Issue: Estoppel by Deed

Respondent Court found that several deeds of sale and real estate mortgage, which petitioners
executed when they sold or mortgaged some parcels adjudicated to them under the DPP,
contained the statement that the vendor/mortgagor was the absolute owner of the parcel of
residential land and that he or she represented it as free from liens and encumbrances. On the
basis of these pieces of evidence, Respondent Court held that petitioners were estopped from
claiming that there was a co-ownership over the disputed parcels of land which were also covered
by the DPP. Petitioners contend that Respondent Court, in so ruling, violated the res inter alios
acta rule.

Petitioners' contention is untenable. Res inter alios acta, as a general rule, prohibits the
admission of evidence that tends to show that what a person has done at one time is probative of
the contention that he has done a similar acts at another time. 24 Evidence of similar acts or
occurrences compels the defendant to meet allegations that are not mentioned in the complaint,
confuses him in his defense, raises a variety of irrelevant issues, and diverts the attention of the
court from the issues immediately before it. Hence, this evidentiary rule guards against the
practical inconvenience of trying collateral issues and protracting the trial and prevents surprise
or other mischief prejudicial to litigants. 25

The rule, however, is not without exception. While in admissible in general, collateral facts may be
received as evidence under exceptional circumstances, as when there is a rational similarity or
resemblance between the conditions giving rise to the fact offered and the circumstances
surrounding the issue or fact to be proved. 26 Evidence of similar acts may frequently become
relevant, especially in actions based on fraud and deceit, because it sheds light on the state of
mind or knowledge of a person; it provides insight into such person's motive or intent; it
uncovers a scheme, design or plan; or it reveals a mistake. 27

In this case, petitioners argue that transactions relating to the other parcels of land they entered
into, in the concept of absolute owners, are inadmissible as evidence to show that the parcels in
issue are not co-owned. The Court is not persuaded. Evidence of such transactions falls under the
exception to the rule on res inter alios acta. Such evidence is admissible because it is relevant to
an issue in the case and corroborative of evidence already received. 28 The relevancy of such
transactions is readily apparent. The nature of ownership of said property should be the same as
that of the lots in question since they are all subject to the MOA. If the parcels of land were held
and disposed by petitioners in fee simple, in the concept of absolute owners, then the lots in
question should similarly be treated as absolutely owned in fee simple by the Tamayo spouses.
Unmistakably, the evidence in dispute manifests petitioners' common purpose and design to treat
all the parcels of land covered by the DPP as absolutely owned and not subject to co-
ownership. 29

Under the principle of estoppel, petitioners are barred from claiming co-ownership of the lands in
issue. In estoppel, a person, who by his deed or conduct has induced another to act in a particular
manner, is barred from adopting an inconsistent position, attitude or course of conduct that
thereby causes loss or injury to another. 30 It further bars him from denying the truth of a fact
which has, in the contemplation of law, become settled by the acts and proceeding of judicial or
legislative officers or by the act of the party himself, either by conventional writing or by
representations, express or implied or in pais. 31

In their transactions with others, petitioners have declared that the other lands covered by the
same MOA are absolutely owned, without indicating the existence of a co-ownership over such
properties. Thus, they are estopped from claiming otherwise because, by their very own acts and
representations as evidenced by the deeds of mortgage and of sale, they have denied such co-
ownership. 32

Fourth Issue: No Res Judicata On Co-ownership

Petitioners argue that the Order (Exhibit J) 33 dated January 18, 1985, issued by the RTC of
Quezon City, Branch 86, which had long become final and executory, confirmed their co-
ownership. Thus, they claim that Respondent Court's reversal of the ruling of the RTC of Antipolo,
Rizal, is a violation of the rule on res judicata.

This contention is equally untenable. The elements of res judicata are: (1) the former judgment
was final; (2) the court which rendered it had jurisdiction over the subject matter and the parties;
(3) the judgment was on the merits; and (4) the parties, subject matters and causes of action in the
first and second actions are identical. 34

The RTC of Quezon City had no jurisdiction to decide on the merits of the present case or to
entertain questions regarding the existence of co-ownership over the parcels in dispute, because
the suit pending before it was only for the collection of a sum of money. Its disquisition on co-
ownership was merely for the levy and the execution of the properties of the Tamayo spouses, in
satisfaction of their judgment debt to the private respondents.

Perhaps more glaring is the lack of identity between the two actions. The first action before the
RTC of Quezon City was for the collection of money, while the second before the RTC of Antipolo,
Rizal, was for partition. There being no concurrence of the elements of res judicata in this case,
the Court finds no error in Respondent Court's ruling. No further discussion is needed to show
the glaring difference between the two controversies.

WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED. Cost against
petitioners.

SO ORDERED.
G.R. No. 164457 April 11, 2012

ANNA LERIMA PATULA, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

BERSAMIN, J.:

In the trial of everycriminal case, a judge must rigidlytest the State’s evidence of guilt in order to ensure
that such evidenceadheres to the basic rules of admissibility before pronouncing an accused guilty of the
crime charged upon such evidence. Nothing less is demanded of the judge; otherwise, the guarantee of
due process of law is nullified.The accused need notadduceanythingto rebut evidence that is discredited
for failing the test.Acquittal should then follow.

Antecedents

Petitioner was charged withestafaunder an informationfiled in the Regional Trial Court (RTC) in
DumagueteCitythat averred:

That on or about and during the period from March 16 to 20, 1997 and for sometime prior thereto, in the
City of Dumaguete, Philippines, and within the jurisdiction of this Honorable Court, the said accused,
being then a saleswoman of Footlucker’s Chain of Stores, Inc., Dumaguete City, having collected and
received the total sum of ₱131,286.97 from several customers of said company under the express
obligation to account for the proceeds of the sales and deliver the collection to the said company, but far
from complying with her obligation and after a reasonable period of time despite repeated demands
therefore, and with intent to defraud the said company, did, then and there willfully, unlawfully and
feloniously fail to deliver the said collection to the said company but instead, did, then and there willfully
unlawfully and feloniously misappropriate, misapply and convert the proceeds of the sale to her own use
and benefit, to the damage and prejudice of the said company in the aforesaid amount of ₱131,286.97.

Contrary to Art. 315, par 1 (b) of the Revised Penal Code.1

Petitioner pled not guiltyto the offense charged in the information. At pre-trial, no stipulation of factswas
had, and petitioner did not avail herself of plea bargaining. Thereafter, trial on the merits ensued.

The Prosecution’s first witness was Lamberto Go, who testified that he was the branch manager of
Footlucker’s Chain of Stores, Inc. (Footlucker’s) in Dumaguete City since October 8, 1994; that petitioner
was an employee of Footlucker’s, starting as a saleslady in 1996 until she became a sales representative;
that as a sales representative she was authorized to take orders from wholesale customers coming from
different towns (like Bacong, Zamboanguita, Valencia, Lumbangan and Mabinay in Negros Oriental, and
Siquijor), and to collect payments from them; that she could issue and sign official receipts of Footlucker’s
for the payments, which she would then remit; that she would then submit the receipts for the payments
for tallying and reconciliation; that at first her volume of sales was quite high, but later on dropped, leading
him to confront her; that she responded that business was slow; that he summoned the accounting clerk
to verify; that the accounting clerk discovered erasures on some collection receipts; that he decided to
subject her to an audit by company auditor Karen Guivencan; that he learned from a customer of
petitioner’s that the customer’s outstanding balance had already been fully paid although that balance
appeared unpaid in Footlucker’s records; and that one night later on, petitioner and her parents went to
his house to deny having misappropriated any money of Footlucker’s and to plead for him not to push
through with a case against her, promising to settle her account on a monthly basis; and that she did not
settle after that, but stopped reporting to work.2

On March 7, 2002, Go’s cross examination, re-direct examination and re-crossexamination were
completed.

The only other witness for the Prosecution was Karen Guivencan, whomFootlucker’s employed as its
store auditor since November 16, 1995 until her resignation on March 31, 2001. She declared that Go had
requested her to audit petitioner after some customers had told him that they had already paid their
accounts but the office ledger had still reflected outstandingbalances for them; that she first conducted
her audit by going to the customers in places from Mabinay to Zamboanguitain Negros Oriental, and then
in Siquijor; thatshe discovered in the course of her audit that the amounts appearing on the original copies
of receipts in the possession of around 50 customers varied from the amounts written on the duplicate
copies of the receipts petitioner submitted to the office; that upon completing her audit, she submittedto
Go a written report denominated as "List of Customers Covered by Saleswoman LERIMA PATULA w/
Differences in Records as per Audit Duly Verified March 16-20, 1997" marked as Exhibit A; and that
based on the report, petitioner had misappropriated the total amount of₱131,286.92.3

During Guivencan’s stint as a witness, the Prosecution marked the ledgers of petitioner’s various
customers allegedly with discrepancies as Exhibits B to YYand their derivatives, inclusive. Each of the
ledgers had a first column that contained the dates of the entries, a second that identified the invoices by
the number, a third that statedthe debit, a fourth that noted the credit (or the amounts paid), and a fifth
that summed the balances (debit minus credit).Only 49 of theledgerswere formally offered and admitted
by the RTC because the 50thledger could no longer be found.

In the course of Guivencan’sdirect-examination,petitioner’s counsel interposed a continuing objection on

the ground that the figuresentered in Exhibits B to YYand their derivatives, inclusive, were hearsay
because the persons who had made the entries were not themselves presented in court.4 With that,
petitioner’s counsel did not anymore cross-examine Guivencan, apparently regarding her testimony to be
irrelevant because she thereby tended to prove falsification, an offense not alleged in the information.

TheProsecution thenformally offered its documentary exhibits, including Exhibits B to YYand their
derivatives (like the originals and duplicates of the receipts supposedly executed and issued by
petitioner), inclusive, the confirmation sheets used by Guivencan in auditing the accounts served by
petitioner, and Guivencan’s so-called Summary (Final Report) of Discrepancies.5

After the Prosecution rested its case, the Defense decided not to file a demurrer to evidence although it
had manifested the intention to do so, and instead rested itscase.The Prosecution and Defense submitted
their respective memoranda, and submitted the case for decision.6

On January 28, 2004, the RTC, stating that inasmuch as petitioner had opted "not to present evidence for
her defense" the Prosecution’s evidence remained "unrefuted and uncontroverted," 7 rendered its decision
finding petitioner guilty of estafa, to wit:

Wherefore, in the light of the foregoing facts and circumstances, the Court finds ANNA LERIMA PATULA
guilty beyond reasonable doubt of the crime of Estafa under Art. 315 par (1b) of the Revised Penal Code
and accordingly, she is hereby sentenced to suffer an INDETERMINATE PENALTY of imprisonment of 8
years and 1 day of prision mayor as minimum to 18 years and 4 months of reclusion temporal as
maximum with all the accessory penalties provided by law and to indemnify private complainant the
amount of ₱131,286.92 with interest at 12% per annum until fully paid and to pay the costs.

Pursuant to Sec. 2, Rule 114 of the Revised Rules of Criminal Procedure, the cash bail put up by the
accused shall be effective only until the promulgation of this judgment.

SO ORDERED.8

Petitioner filed a motion for reconsideration, butthe RTC denied the motion on May 7, 2004. 9

Issues

Insisting that the RTC’s judgment "grossly violated [her] Constitutional and statutory right to be informed
of the nature and cause of the accusation against her because, while the charge against her is estafa
under Art. 315, par. 1 (b) of the Revised Penal Code, the evidence presented against her and upon which
her conviction was based, was falsification, an offense not alleged or included in the Information under
which she was arraigned and pleaded not guilty," and that said judgment likewise "blatantly ignored and
manifestly disregarded the rules on admission of evidence in that the documentary evidence admitted by
the trial court were all private documents, the due execution and authenticity of which were not proved in
accordance with Sec. 20 of Rule 132 of the Revised Rules on Evidence," petitioner has directly appealed
to the Court via petition for review on certiorari, positing the following issues, to wit:

1. WHETHER THE ACCUSED OR ANY ACCUSED FOR THAT MATTER , CHARGED

OF ESTAFA UNDER ART. 315, PAR. 1 (B) OF THE REVISED PENAL CODE CAN BE CONVICTED
UPON OR BY EVIDENCE OF FALSIFICATION WHICH IS EVEN (SIC) NOT ALLEGED IN THE
INFORMATION.

2. WHETHER THE ACCUSED’S CONSTITUTIONAL AND STATUTORY RIGHT TO BE INFORMED OF

THE NATURE AND CAUSE OF THE ACCUSATION AGAINST HER WAS VIOLATED WHEN SHE WAS
CONVICTED UPON OR BY EVIDENCE OF FALSIFICATION CONSIDERING THAT THE CHARGE
AGAINST HER IS ESTAFA THROUGH MISAPPROPRIATION UNDER ART. 315, PAR. 1 (B) OF THE
REVISED PENAL CODE.

3. WHETHER OR NOT THE TRIAL COURT ERRED IN ADMITTING IN EVIDENCE, EXHIBITS "B" TO
"YY"-"YY-2", ALL PRIVATE DOCUMENTS, THE DUE EXECUTION AND AUTHENTICITY OF WHICH
WERE NOT PROVED IN ACCORDANCE WITH SEC. 20, RULE 132 OF THE SAID REVISED RULES
ON EVIDENCE ASIDE FROM THE FACT THAT SAID EXHIBITS TEND TO PROVE FALSIFICATION BY
THE ACCUSED, A CRIME NEITHER CHARGED NOR ALLEGED IN THE INFORMATION.

4. WHETHER OR NOT THE TRIAL COURT ERRED IN ADMITTING THE TESTIMONY OF KAREN
GUIVENCAN DESPITE THE OBJECTION THAT SAID TESTIMONY WHICH TRIED TO PROVE THAT
THE ACCUSED FALSIFIED EXHIBITS "B" TO "YY"-"YY-2"INCLUSIVE VIOLATED THE ACCUSED’S
CONSTITUTIONAL RIGHT TO BE INFORMED OF THE NATURE AND CAUSE OF THE ACCUSATION
AGAINST HER, FOR BEING IRRELEVANT AND IMMATERIAL SINCE THE CHARGE AGAINST THE
ACCUSED IS ESTAFA UNDER ART. 315, PAR. 1 (B) OF THE REVISED PENAL CODE.

5. WHETHER OR NOT THE TRIAL COURT ERRED IN CONCLUDING THAT THE EVIDENCE OF THE
PROSECUTION "REMAINS UNREFUTED AND UNCONTROVERTED" DESPITE ACCUSED’S
OBJECTION THAT SAID EVIDENCE IS IMMATERIAL AND IRRELEVANT TO THE CRIME CHARGED.

6. WHETHER OR NOT THE DEFENSE’S NOT CROSS-EXAMINING KAREN GUIVENCAN FOR THE
REASON THAT HER TESTIMONY IS IMMATERIAL AND IRRELEVANT AS IT TENDED TO PROVE AN
OFFENSE NOT CHARGED IN INFORMATION RESULTED IN THE ADMISSION OF SAID TESTIMONY
AS BEING "UNREFUTED AND UNCONTROVERTED", AND WHETHER OR NOT THE DEFENSE’S
OBJECTION WOULD NOT BE CONSIDERED WAIVED IF THE DEFENSE CROSS-EXAMINED SAID
WITNESS.

7. WHETHER OR NOT THE TRIAL COURT ERRED IN RULING THAT EXHIBIT "A", WHICH IS THE
LIST OF CUSTOMERS COVERED BY SALESWOMAN LERIMA PATULA WITH DIFFERENCE IN
RECORD IS NOT HEARSAY AND SELF-SERVING.10

The foregoing issues are now restatedas follows:

1. Whether or not the failure of the information for estafa to allege the falsification of the duplicate receipts
issued by petitioner to her customersviolated petitioner’s right to be informed of the nature and cause of
the accusation;

2. Whether or not the RTC gravely erred in admitting evidence of the falsification of the duplicate
receiptsdespite the information not alleging the falsification;

3. Whether or not the ledgers and receipts (Exhibits B to YY, and their derivatives, inclusive) were
admissible as evidence of petitioner’s guilt for estafaas charged despite their not being duly
authenticated;and

4. Whether or not Guivencan’stestimony onthe ledgers and receipts (Exhibits B to YY, and their
derivatives, inclusive) to prove petitioner’s misappropriation or conversion wasinadmissible for being
hearsay.

Ruling

The petition is meritorious.

Failure of information to allege falsification

did not violate petitioner’s right to be informed
of thenatureand cause of the accusation
Petitioner contends that the RTC grossly violated her Constitutional right to be informed of the nature and
cause of the accusation when: (a) it held that the information did not have to allege her falsification of the
duplicate receipts, and (b) when it convicted her of estafa under Article 315, paragraph 1(b) of the
Revised Penal Codeby relying on the evidence on falsification.

The contentionof petitioner cannot be sustained.

The Bill of Rights guaranteessome rightsto every person accused of a crime, among them the right to be
informed of the nature and cause of the accusation, viz:

Section 14. (1) No person shall be held to answer for a criminal offense without due process of law.

(2) In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved, and
shall enjoy the right to be heard by himself and counsel, to be informed of the nature and cause of the
accusation against him, to have a speedy, impartial, and public trial, to meet the witnesses face to face,
and to have compulsory process to secure the attendance of witnesses and the production of evidence in
his behalf. However, after arraignment, trial may proceed notwithstanding the absence of the accused
provided that he has been duly notified and his failure to appear is unjustifiable.

Rule 110 of the Revised Rules of Court, the rule then in effect when the information was filed in the RTC,
contained the following provisions on the proper manner of alleging the nature and cause of the
accusation in the information, to wit:

Section 8.Designation of the offense.– Whenever possible, a complaint or information should state the
designation given to the offense by the statute, besides the statement of the acts or omissions
constituting the same, and if there is no such designation, reference should be made to the section or
subsection of the statute punishing it. (7)

Section 9.Cause of accusation. – The acts or omissions complained of as constituting the offense must
be stated in ordinary and concise language without repetition, not necessarily in the terms of the statute
defining the offense, but in such form as is sufficient to enable a person of common understanding to
know what offense is intended to be charged, and enable the court to pronounce proper judgment. (8)

The importance of the proper manner of alleging the nature and cause of the accusation in the
informationshould never be taken for granted by the State. An accused cannot be convicted of an offense
that is not clearly charged in the complaint or information. To convict him of an offense other than that
charged in the complaint or information would be violative of the Constitutional right to be informed of the
nature and cause of the accusation.11 Indeed, the accused cannot be convicted of a crime, even if duly
proven, unless the crime is alleged or necessarily included in the information filed against him.

The crime of estafacharged against petitioner was defined and penalized by Article 315, paragraph 1 (b),
Revised Penal Code, viz:

Article 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned
hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if
the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount
exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period,
adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not
exceed twenty years. In such cases, and in connection with the accessory penalties which may be
imposed under the provisions of this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

2nd. The penalty of prision correccional in its minimum and medium periods, if the amount of the fraud is
over 6,000 pesos but does not exceed 12,000 pesos;

3rd. The penalty of arresto mayor in its maximum period to prision correccional in its minimum period if
such amount is over 200 pesos but does not exceed 6,000 pesos; and

4th. By arresto mayor in its maximum period, if such amount does not exceed 200 pesos, provided that in
the four cases mentioned, the fraud be committed by any of the following means:
xxx

1. With unfaithfulness or abuse of confidence, namely:

xxx

(b) By misappropriating or converting, to the prejudice of another, money, goods, or any other personal
property received by the offender in trust or on commission, or for administration, or under any other
obligation involving the duty to make delivery of or to return the same, even though such obligation be
totally or partially guaranteed by a bond; or by denying having received such money, goods, or other
property.

xxx

The elements of the offense charged were as follows:

(a) That the offender received money, goods or other personal property in trust, or on commission, or for
administration, or under any other obligation involving the duty to make delivery of, or to return, the same;

(b) That the offender misappropriated or converted such money, goods or other personal property, or
denied his part in its receipt;

(c) That the misappropriation or conversion or denial was to the prejudice of another; and

(d) That the offended party made a demand on the offender for the delivery or return of such money,
goods or other personal property.12

According to the theory and proof of the Prosecution, petitioner misappropriated or converted the sums
paid by her customers, and later falsified the duplicates of the receipts before turning such duplicates to
her employer to show that the customers had paid less than the amounts actually reflected on the original
receipts. Obviously, she committed the falsification in order to conceal her misappropriation or
conversion. Considering that the falsificationwas not an offense separate and distinct from the
estafacharged against her, the Prosecution could legitimately prove her acts of falsification as its means
of establishing her misappropriation or conversion as an essential ingredient of the crime duly alleged in
the information. In that manner, her right to be informed of the nature and cause of the accusation against
her was not infringed or denied to her.

We consider it inevitable to conclude that the information herein completely pleaded the estafa defined
and penalized under Article 315, paragraph 1 (b), Revised Penal Codewithin the context of the
substantive lawand the rules. Verily, there was no necessity for the information to allege the acts of
falsification by petitioner because falsification was not an element of the estafacharged.

Not surprisingly,the RTC correctly dealt in its decision with petitioner’s concern thuswise:

In her Memorandum, it is the contention of [the] accused that [the] prosecution’s evidence utterly fails to
prove the crime charged. According to the defense, the essence of Karen Guivencan’s testimony is that
the accused falsified the receipts issued to the customers served by her by changing or altering the
amounts in the duplicates of the receipts and therefore, her testimony is immaterial and irrelevant as the
charge is misappropriation under Art. 315, paragraph (1b) of the Revised Penal Code and there is no
allegation whatsoever of any falsification or alteration of amounts in the [i]nformation under which the
accused was arraigned and pleaded NOT GUILTY. Accused, thus, maintains that the testimony of Karen
Guivencan should therefore not be considered at all as it tended to prove an offense not charged or
included in the [i]nformation and would violate [the] accused’s constitutional and statutory right to be
informed of the nature and cause of the accusation against her. The Court is not in accord with such
posture of the accused.

It would seem that the accused is of the idea that because the crime charged in the [i]nformation is merely
[e]stafa and not [e]stafa [t]hru [f]alsification of documents, the prosecution could not prove falsification.
Such argumentation is not correct. Since the information charges accused only of misappropriation
pursuant to Art. 315, par. (1b) of the Revised [P]enal Code, the Court holds that there is no necessity of
alleging the falsification in the Information as it is not an element of the crime charged.
Distinction should be made as to when the crimes of Estafa and Falsification will constitute as one
complex crime and when they are considered as two separate offenses. The complex crime of Estafa
Through Falsification of Documents is committed when one has to falsify certain documents to be able to
obtain money or goods from another person. In other words, the falsification is a necessary means of
committing estafa. However, if the falsification is committed to conceal the misappropriation, two separate
offenses of estafa and falsification are committed. In the instant case, when accused collected payments
from the customers, said collection which was in her possession was at her disposal. The falsified or
erroneous entries which she made on the duplicate copies of the receipts were contrived to conceal some
amount of her collection which she did not remit to the company xxx.13

II

Testimonial and documentary evidence,being hearsay,

did not prove petitioner’s guilt beyond reasonable doubt

Nonetheless, in all criminal prosecutions, the Prosecution bears the burden to establish the guilt of the
accused beyond reasonable doubt. In discharging this burden, the Prosecution’s duty is to prove each
and every element of the crime charged in the information to warrant a finding of guilt for that crime or for
any other crime necessarily included therein.14 The Prosecution must further prove the participation of the
accused in the commission of the offense.15 In doing all these, the Prosecution must rely on the strength
of its own evidence, and not anchor its success upon the weakness of the evidence of the accused. The
burden of proof placed on the Prosecution arises from the presumption of innocence in favor of the
accused that no less than the Constitution has guaranteed.16Conversely, as to his innocence, the
accused has no burden of proof,17 that he must then be acquitted and set free should the Prosecution not
overcome the presumption of innocence in his favor.In other words, the weakness of the defense put up
by the accused is inconsequential in the proceedings for as long as the Prosecution has not discharged
its burden of proof in establishing the commission of the crime charged and in identifying the accused as
the malefactor responsible for it.

Did the Prosecution adduce evidence that proved beyond reasonable doubt the guilt of petitioner for the
estafa charged in the information?

To establish the elements of estafaearlier mentioned, the Prosecution presented the testimonies of Go
and Guivencan, and various documentsconsisting of: (a) the receipts allegedly issued by petitioner to
each of her customers upon their payment, (b) the ledgers listing the accounts pertaining to each
customer with the corresponding notations of the receipt numbers for each of the payments, and (c) the
confirmation sheets accomplished by Guivencan herself.18 The ledgers and receipts were marked and
formally offered as Exhibits B to YY, and their derivatives, inclusive.

On his part, Go essentially described for the trial court the various duties of petitioner as Footlucker’s
sales representative. On her part, Guivencan conceded having no personal knowledge of the amounts
actually received by petitioner from the customersor remitted by petitioner to Footlucker’s.This means that
persons other than Guivencan prepared Exhibits B to YY and their derivatives, inclusive,and that
Guivencan based her testimony on the entries found in the receipts supposedly issued by petitioner and
in the ledgers held by Footlucker’s corresponding to each customer, as well as on the unsworn
statements of some of the customers. Accordingly, her being the only witness who testified on the entries
effectively deprived the RTC of the reasonable opportunity to validate and test the veracity and reliability
of the entries as evidence of petitioner’s misappropriation or conversion through cross-examination by
petitioner. The denial of that opportunity rendered theentire proof of misappropriation or conversion
hearsay, and thus unreliable and untrustworthy for purposes of determining the guilt or innocence of the
accused.

To elucidate why the Prosecution’s hearsay evidence was unreliable and untrustworthy, and thus devoid
of probative value, reference is made toSection 36 of Rule 130, Rules of Court, a rule that states that a
witness can testify only to those facts that she knows of her personal knowledge; that is, which are
derived from her own perception, except as otherwise provided in the Rules of Court. The personal
knowledge of a witness is a substantive prerequisite for accepting testimonial evidence that establishes
the truth of a disputed fact. A witness bereft ofpersonal knowledge of the disputed fact cannot be called
upon for that purpose because her testimony derives its value not from the credit accorded to her as a
witness presently testifying but from the veracity and competency of the extrajudicial source of her
information.
In case a witness is permitted to testify based on what she has heard another person say about the facts
in dispute, the person from whom the witness derived the information on the facts in dispute is not in court
and under oath to be examined and cross-examined. The weight of such testimony thendepends not
upon theveracity of the witness but upon the veracity of the other person giving the information to the
witness without oath. The information cannot be tested because the declarant is not standing in court as a
witness andcannot, therefore, be cross-examined.

It is apparent, too, that a person who relates a hearsay is not obliged to enter into any particular, to
answer any question, to solve any difficulties, to reconcile any contradictions, to explain any obscurities,
to remove any ambiguities; and that she entrenches herself in the simple assertion that she was told so,
and leaves the burden entirely upon the dead or absent author.19 Thus, the rule against hearsay
testimony rests mainly on the ground that there was no opportunity to cross-examine the declarant.20 The
testimony may have been given under oath and before a court of justice, but if it is offered against a party
who is afforded no opportunity to cross-examine the witness, it is hearsay just the same.21

Moreover, the theory of the hearsay rule is that when a human utterance is offered as evidence of the
truth of the fact asserted, the credit of the assertor becomes the basis of inference, and, therefore, the
assertion can be received as evidence only when made on the witness stand, subject to the test of cross-
examination. However, if an extrajudicial utterance is offered, not as an assertion to prove the matter
asserted but without reference to the truth of the matter asserted, the hearsay rule does not apply. For
example, in a slander case, if a prosecution witness testifies that he heard the accused say that the
complainant was a thief, this testimony is admissible not to prove that the complainant was really a thief,
but merely to show that the accused uttered those words.22 This kind of utterance ishearsay in character
but is not legal hearsay.23 The distinction is, therefore, between (a) the fact that the statement was made,
to which the hearsay rule does not apply, and (b) the truth of the facts asserted in the statement, to which
the hearsay rule applies.24

Section 36, Rule 130 of the Rules of Court is understandably not the only rule that explains why testimony
that is hearsay should be excluded from consideration. Excluding hearsay also aims to preserve the right
of the opposing party to cross-examine the originaldeclarant claiming to have a direct knowledge of the
transaction or occurrence.25If hearsay is allowed, the right stands to be denied because the declarant is
not in court.26 It is then to be stressed that the right to cross-examine the adverse party’s witness,

being the only means of testing the credibility of witnesses and their testimonies, is essential to the
administration of justice.

To address the problem of controlling inadmissible hearsay as evidence to establish the truth in a dispute
while also safeguardinga party’s right to cross-examine her adversary’s witness,the Rules of Court offers
two solutions. The firstsolution is to require that allthe witnesses in a judicial trial or hearing be examined
only in courtunder oath or affirmation. Section 1, Rule 132 of the Rules of Court formalizes this
solution,viz:

Section 1. Examination to be done in open court. - The examination of witnesses presented in a trial or
hearing shall be done in open court, and under oath or affirmation. Unless the witness is incapacitated to
speak, or the question calls for a different mode of answer, the answers of the witness shall be given
orally. (1a)

The secondsolution is to require that all witnesses besubject to the cross-examination by the adverse
party. Section 6, Rule 132 of the Rules of Courtensuresthis solutionthusly:

Section 6. Cross-examination; its purpose and extent. – Upon the termination of the direct examination,
the witness may be cross-examined by the adverse party as to any matters stated in the direct
examination, or connected therewith, with sufficient fullness and freedom to test his accuracy and
truthfulness and freedom from interest or bias, or the reverse, and to elicit all important facts bearing upon
the issue. (8a)

Although the second solution traces its existence to a Constitutional precept relevant to criminal cases,
i.e., Section 14, (2), Article III, of the 1987 Constitution,which guarantees that: "In all criminal
prosecutions, the accused shall xxx enjoy the right xxx to meet the witnesses face to face xxx," the rule
requiring the cross-examination by the adverse party equally applies to non-criminal proceedings.
We thus stress that the rule excluding hearsay as evidence is based upon serious concerns about the
trustworthiness and reliability of hearsay evidence due to its not being given under oath or solemn
affirmation and due to its not being subjected to cross-examination by the opposing counsel to test the
perception, memory, veracity and articulateness of the out-of-court declarant or actor upon whose
reliability the worth of the out-of-court statement depends.27

Based on the foregoing considerations, Guivencan’s testimony as well as Exhibits B to YY, and their
derivatives, inclusive, must be entirely rejected as proof of petitioner’s misappropriation or conversion.

III

Lack of their proper authentication rendered

Exhibits B to YY and their derivatives
inadmissible as judicial evidence

Petitioner also contends that the RTC grossly erred in admitting as evidence Exhibits B to YY, and their
derivatives, inclusive, despite their being private documents that were not duly authenticated as required
by Section 20, Rule 132 of the Rules of Court.

Section 19, Rule 132 of the Rules of Courtdistinguishes between a public document and a private
document for the purpose of their presentation in evidence, viz:

Section 19. Classes of documents. – For the purpose of their presentation in evidence, documents
are either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the sovereign authority, official bodies and
tribunals, and public officers, whether of the Philippines, or of a foreign country;

(b) Documents acknowledged before a notary public except last wills and testaments, and

(c) Public records, kept in the Philippines, of private documents required by law to be entered therein.

All other writings are private.

The nature of documents as either public or private determines how the documents may be presented as
evidence in court. A public document, by virtue of its official or sovereign character, or because it has
been acknowledged before a notary public (except a notarial will) or a competent public official with the
formalities required by law, or because it is a public record of a private writing authorized by law, is self-
authenticating and requires no further authentication in order to be presented as evidence in court.In
contrast, a private document is any other writing, deed, or instrument executed by a private person
without the intervention of a notary or other person legally authorized by which some disposition or
agreement is proved or set forth. Lacking the official or sovereign character of a public document, or the
solemnities prescribed by law, a private document requires authentication in the manner allowed by law
or the Rules of Court before its acceptance as evidence in court. The requirement of authentication of a
private document is excused only in four instances, specifically: (a) when the document is an ancient one
within the context of Section 21,28 Rule 132 of the Rules of Court; (b) when the genuineness and
authenticity of an actionable document have not been specifically denied under oath by the adverse
party;29 (c) when thegenuineness and authenticity of the document

have been admitted;30 or (d) when the document is not being offered as genuine.31

There is no question that Exhibits B to YY and their derivatives were private documents because private
individuals executed or generated them for private or business purposes or uses. Considering that none
of the exhibits came under any of the four exceptions, they could not be presented and admitted as
evidence against petitioner without the Prosecution dutifully seeing to their authentication in the manner
provided in Section20 of Rule 132 of the Rules of Court,viz:

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

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

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

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

The Prosecutionattempted to have Go authenticate the signature of petitioner in various receipts, to wit:

ATTY. ABIERA:

Q. Now, these receipts which you mentioned which do not tally with the original receipts, do you have
copies of these receipts?

A. Yes, I have a copy of these receipts, but it’s not now in my possession.

Q. But when asked to present those receipts before this Honorable Court, can you assure this

(Next Page)

ATTY ABIERA (continuing):

Honorable Court that you will be able to present those receipts?

A. Yes.

Q. You are also familiar with the signature of the accused in this case, Anna Lerima Patula?

A. Yes.

Q. Why are you familiar with the signature of the accused in this case?

A. I used to see her signatures in the payroll and in the receipts also.

Q. Okay, I have here a machine copy of a receipt which we would present this,or offer the same as
soon as the original receipts can be presented, but for purposes only of your testimony, I’m going to
point to you a certain signature over this receipt number FLDT96 20441, a receipt from Cirila
Askin, kindly go over the signature and tell the Honorable Court whether you are familiar with the
signature?

A. Yes, that is her signature.

INTERPRETER:

Witness is pointing to a signature above the printed word "collector".

(Next Page)

ATTY. ABIERA:

Q. Is this the only receipt wherein the name, the signature rather, of the accused in this case
appears?

A. That is not the only one, there are many receipts.

ATTY. ABIERA:

In order to save time, Your Honor, we will just be presenting the original receipts Your Honor,
because it’s quite voluminous, so we will just forego with the testimony of the witness but we will just
present the same using the testimony of another witness, for purposes of identifying the signature
of the accused. We will request that this signature which has been identified to by the witness in this
case be marked, Your Honor, with the reservation to present the original copy and present the same to
offer as our exhibits but for the meantime, this is only for the purposes of recording, Your Honor, which we
request the same, the receipt which has just been identified awhile ago be marked as our Exhibit "A" You
Honor.

COURT:

Mark the receipt as Exhibit "A".

ATTY. ABIERA:

And the signature be bracketed and be marked as Exhibit "A-1".

(Next Page)

COURT:

Bracket the signature &mark it as Exh. "A-1". What is the number of that receipt?

ATTY. ABIERA:

Receipt No. 20441 dated August 4, 1996 the statement that: received from Cirila Askin.32

xxx

As the excerpts indicate, Go’s attempt at authentication of the signature of petitioner on the receipt with
serial number FLDT96 No. 20441 (a document that was marked as Exhibit A, while the purported
signature of petitioner thereon was marked as Exhibit A-1) immediately fizzled out after the Prosecution
admitted that the document was a meremachinecopy, not the original. Thereafter, as if to soften its failed
attempt, the Prosecution expressly promised to produce at a later date the originalsof the receipt with
serial number FLDT96 No. 20441 and other receipts. But that promise was not even true, because almost
in the same breath the Prosecution offered to authenticate the signature of petitioner on the
receiptsthrougha different witness (though then still unnamed). As matters turned out in the end, the effort
to have Go authenticate both themachinecopy of the receiptwith serial number FLDT96 No. 20441 and
the signature of petitioner on that receipt was wasteful because the machine copy was
inexplicablyforgotten and was no longer evenincluded in the Prosecution’s Offer of Documentary
Evidence.

It is true that the original of the receipt bearing serial number FLDT96 No. 20441was
subsequentlypresented as Exhibit Bthrough Guivencan. However,the Prosecution did not establishthat
the signature appearing on Exhibit B was the same signature that Go had earliersought to identify to be
the signature of petitioner (Exhibit A-1) on the machine copy (Exhibit A). This is borne out by the fact that
the Prosecution abandoned Exhibit A as the marking nomenclature for the machine copyof the receipt
bearing serial number FLDT96 No. 20441 for all intents and purposes of this case, and used the same
nomenclature to referinstead toan entirely differentdocument entitled "List of Customers covered by ANA
LERIMA PATULA w/difference in Records as per Audit duly verified March 16-20, 1997."

In her case, Guivencan’s identification of petitioner’s signature on two receipts based alone on the fact
that the signatures contained the legible family name of Patula was ineffectual, and exposed yet another
deep flaw infecting the documentary evidence against petitioner. Apparently, Guivencan could not
honestly identify petitioner’s signature on the receipts either because she lacked familiarity with such
signature, or because she had not seen petitioner affix her signature on the receipts, as the following
excerpts from her testimony bear out:

ATTY. ZERNA to witness:

Q. There are two (2) receipts attached here in the confirmation sheet, will you go over these Miss
witness?

A. This was the last payment which is fully paid by the customer. The other receipt is the one showing her
payment prior to the last payment.

COURT:

Q. Where did you get those two (2) receipts?

A. From the customer.

Q. And who issued those receipts?

A. The saleswoman, Miss Patula.

ATTY. ZERNA:
We pray, Your Honor, that this receipt identified be marked as Exhibit "B-3", receipt number 20441.

(Next Page)

COURT:

Mark it.

ATTY. ZERNA:

The signature of the collector be marked as –

Q. By the way, there is a signature above the name of the collector, are your familiar with that
signature?(shown to witness)

A. Yes.

Q. Whose signature is that?

A. Miss Patula.

Q. How do you know?

A. It can be recognized because of the word Patula.

Q. Are you familiar with her signature?

A. Yes.

ATTY. ZERNA:

We pray that the signature be bracketed and marked as Exhibit "B-3-a"

COURT:

Mark it.

ATTY. ZERNA:

The other receipt number 20045 be marked as Exhibit "B-4" and the signature as Exhibit "B-4-a".

COURT:

Mark it.33

xxx

ATTY. ZERNA:

Q. Ms. Witness, here is a receipt colored white, number 26603 issued to one Divina Cadilig. Will you
please identify this receipt if this is the receipt of your office?

A.Yes.

Q.There is a signature over the portion for the collector. Whose signature is this?

A.Ms. Patula.

Q.How do you know that this is her signature?

A.Because we can read the Patula.34

We also have similar impressions of lack of proper authentication as to the ledgers the Prosecution
presented to prove the discrepancies between the amountspetitioner hadallegedly received from the
customers and the amounts she had actually remitted to Footlucker’s. Guivencanexclusively relied on the
entries of the unauthenticated ledgersto support her audit report on petitioner’s supposed
misappropriation or conversion, revealing her lack of independent knowledge of the veracity of the
entries, as the following excerpts of her testimony show:

ATTY. ZERNA to witness:

Q. What is your basis of saying that your office records showed that this Cecilia Askin has an
account of ₱10,791.75?

ATTY. DIEZ:

The question answers itself, You Honor, what is the basis, office record.

COURT:

Let the witness answer.

WITNESS:

A. I made the basis on our ledger in the office. I just copied that and showed it to the customers for
confirmation.

ATTY. ZERNA to witness:

Q. What about the receipts?

COURT:

Make a follow-up question and what was the result when you copied that amount in the ledger and you
had it confirmed by the customers, what was the result when you had it confirmed by the customers?

WITNESS:

A. She has no more balance but in our office she has still a balance of ₱10,971.75.

ATTY. ZERNA to witness:

Q. Do you have a-what’s the basis of saying that the balance of this customer is still ₱10,971.75

(Next Page)

ATTY. ZERNA (continuing):

[i]n your office?

COURT:

That was already answered pañero, the office has a ledger.

Q. Now, did you bring the ledger with you?

A. No, Ma’am.35

(Continuation of the Direct Examination of

Karen Guivencan on August 13, 2002)

ATTY. ZERNA to witness:

Q. Okay, You said there are discrepancies between the original and the duplicate, will you please
enlighten the Honorable Court on that discrepancy which you said?

A. Like in this case of Cirila Askin, she has already fully paid. Her ledger shows a zero balance she
has fully paid while in the original

(Next page)

WITNESS (continuing):
[r]eceipt she has a balance of Ten Thousand Seven hundred Ninety-one Pesos and Seventy-five
Centavos (10,791.75).

COURT:

Q. What about the duplicate receipt, how much is indicated there?

A. The customer has no duplicate copy because it was already forwarded to the Manila Office.

Q. What then is your basis in the entries in the ledger showing that it has already a zero balance?

A. This is the copy of the customer while in the office, in the original receipt she has still a balance.

xxx

ATTY. ZERNA:

The confirmation sheet ---

COURT:

The confirmation sheet was the one you referred to as the receipt in your earlier testimony? Is that what
you referred to as the receipts, the original receipts?

A. This is what I copied from the ledger.

Q. So where was that(sic) original receipt which you said showed that that particular customer still has a
balance of Ten Thousand something?

A. The receipt is no longer here.

Q. You mean the entry of that receipt was already entered in the ledger?

A. Yes.36

In the face of the palpable flaws infecting the Prosecution’s evidence, it should come as no surprise that
petitioner’s counsel interposed timely objections. Yet, the RTC mysteriously overruled the objections and
allowedthe Prosecutionto present the unauthenticated ledgers, as follows:

(Continuation of the Direct Examination of

Witness Karen Guivencan on September 11, 2002)

ATTY. ZERNA:

CONTINUATION OF DIRECT-EXAMINATION

Q – Ms. Witness, last time around you were showing us several ledgers. Where is it now?

A – It is here.

Q – Here is a ledger of one Divina Cadilig. This Divina Cadilig, how much is her account in your office?

ATTY. DIEZ:

Your Honor please before the witness will proceed to answer the question, let me interpose our
objection on the ground that this ledger has not been duly identified to by the person who made
the same. This witness will be testifying on hearsay matters because the supposed ledger was not
identified to by the person who made the same.

COURT:

Those ledgers were already presented in the last hearing. I think they were already duly identified by this
witness. As a matter of fact, it was she who brought them to court

(Next Page)
COURT (cont.):

because these were the ledgers on file in their office.

ATTY. DIEZ

That is correct, Your Honor, but the person who made the entries is not this witness, Your Honor.
How do we know that the entries there is (sic) correct on the receipts submitted to their office.

COURT:

Precisely, she brought along the receipts also to support that. Let the witness answer.

WITNESS:

A – It’s the office clerk in-charge.

COURT:

The one who prepared the ledger is the office clerk.

ATTY. ZERNA:

She is an auditor, Your Honor. She has been qualified and she is the auditor of Footluckers.

COURT:

I think, I remember in the last setting also, she testified where those entries were taken. So, you answer
the query of counsel.

xxx

ATTY. DIEZ:

Your Honor please, to avoid delay, may I interpose a continuing objection to the questions
profounded(sic) on those ledgers on the ground that, as I have said, it is hearsay.

COURT:

Okey(sic). Let the continuing objection be noted.

Q – (To Witness) The clerk who allegedly was the one who prepared the entries on those ledgers, is she
still connected with Footluckers?

A – She is no longer connected now, Your Honor,

COURT:

Alright proceed.

(Next Page)

ATTY. ZERNA:

Your Honor, these are entries in the normal course of business. So, exempt from the hearsay rule.

COURT:

Okey(sic), proceed.37

The mystery shrouding the RTC’s soft treatment of the Prosecution’s flawed presentation was avoidable
simply by the RTC adhering to the instructions of the rules earlier quoted, as well as withSection 22 of
Rule 132 of the Rules of Court,which contains instructions on how to prove the genuineness of a
handwriting in a judicial proceeding, as follows:

Section 22. How genuineness of handwriting proved. – The handwriting of a person may be proved by
any witness who believes it to be the handwriting of such person because he has seen the person write,
or has seen writing purporting to be his upon which the witness has acted or been charged, and
has thus acquired knowledge of the handwriting of such person. Evidence respecting the handwriting may
also be given by a comparison, made by the witness or the court, with writings admitted or treated
as genuine by the party against whom the evidence is offered, or proved to be genuine to the
satisfaction of the judge. (Emphases supplied)

If it is already clear that Go and Guivencan had not themselves seen the execution or signing of the
documents,the Prosecution surely did not authenticate Exhibits B to YY and their derivatives conformably
with the aforequoted rules. Hence, Exhibits B to YY, and their derivatives, inclusive, were inescapably
bereft of probative value as evidence. That was the onlyfair and just result, as the Court held in Malayan
Insurance Co., Inc. v. Philippine Nails and Wires Corporation:38

On the first issue, petitioner Malayan Insurance Co., Inc., contends that Jeanne King’s testimony
was hearsay because she had no personal knowledge of the execution of the documents
supporting respondent’s cause of action, such as the sales contract, invoice, packing list, bill of lading,
SGS Report, and the Marine Cargo Policy. Petitioner avers that even though King was personally
assigned to handle and monitor the importation of Philippine Nails and Wires Corporation, herein
respondent, this cannot be equated with personal knowledge of the facts which gave rise to respondent’s
cause of action. Further, petitioner asserts, even though she personally prepared the summary of weight
of steel billets received by respondent, she did not have personal knowledge of the weight of steel billets
actually shipped and delivered.

At the outset, we must stress that respondent’s cause of action is founded on breach of insurance
contract covering cargo consisting of imported steel billets. To hold petitioner liable, respondent has to
prove, first, its importation of 10,053.400 metric tons of steel billets valued at ₱67,156,300.00, and
second, the actual steel billets delivered to and received by the importer, namely the respondent. Witness
Jeanne King, who was assigned to handle respondent’s importations, including their insurance coverage,
has personal knowledge of the volume of steel billets being imported, and therefore competent to testify
thereon. Her testimony is not hearsay, as this doctrine is defined in Section 36, Rule 130 of the Rules of
Court.However, she is not qualified to testify on the shortage in the delivery of the imported steel
billets. She did not have personal knowledge of the actual steel billets received. Even though she
prepared the summary of the received steel billets, she based the summary only on the receipts
prepared by other persons. Her testimony on steel billets received was hearsay. It has no
probative value even if not objected to at the trial.

On the second issue, petitioner avers that King failed to properly authenticate respondent’s documentary
evidence. Under Section 20, Rule 132, Rules of Court, before a private document is admitted in
evidence, it must be authenticated either by the person who executed it, the person before whom
its execution was acknowledged, any person who was present and saw it executed, or who after
its execution, saw it and recognized the signatures, or the person to whom the parties to the
instruments had previously confessed execution thereof. In this case, respondent admits that King
was none of the aforementioned persons. She merely made the summary of the weight of steel
billets based on the unauthenticated bill of lading and the SGS report. Thus, the summary of steel
billets actually received had no proven real basis, and King’s testimony on this point could not be
taken at face value.

xxx Under the rules on evidence, documents are either public or private. Private documents are those that
do not fall under any of the enumerations in Section 19, Rule 132 of the Rules of Court.Section 20of the
same law, in turn, provides that before any private document is received in evidence, its due execution
and authenticity must be proved either by anyone who saw the document executed or written, or by
evidence of the genuineness of the signature or handwriting of the maker. Here, respondent’s
documentary exhibits are private documents. They are not among those enumerated in Section
19, thus, their due execution and authenticity need to be proved before they can be admitted in
evidence.With the exception concerning the summary of the weight of the steel billets imported,
respondent presented no supporting evidence concerning their authenticity. Consequently, they
cannot be utilized to prove less of the insured cargo and/or the short delivery of the imported
steel billets. In sum, we find no sufficient competent evidence to prove petitioner’s liability.

That the Prosecution’s evidence was left uncontested because petitioner decided not to subject
Guivencan to cross-examination, and did not tender her contrary evidencewas inconsequential. Although
the trial court had overruled the seasonable objections to Guivencan’s testimony bypetitioner’s counsel
due to the hearsay character, it could not be denied thathearsay evidence, whether objected to or not,
had no probative value.39 Verily, the flaws of the Prosecution’s evidence were fundamental and
substantive, not merely technical and procedural, and were defects that the adverse party’s waiver of her
cross-examination or failure to rebutcould not set right or cure. Nor did the trial court’s overruling of
petitioner’s objections imbue the flawed evidence with any virtue and value.

Curiously, the RTC excepted the entries in the ledgers from the application of the hearsay rule by also
terselystating that the ledgers "were prepared in the regular course of business."40 Seemingly, the RTC
applied Section 43, Rule 130 of the Rules of Court, to wit:

Section 43. Entries in the course of business. – Entries made at, or near the time of the transactions to
which they refer, by a person deceased, or unable to testify, who was in a position to know the facts
therein stated, may be received as prima facie evidence, if such person made the entries in his
professional capacity or in the performance of duty and in the ordinary or regular course of business or
duty.

This was another grave error of the RTC.The terse yet sweeping mannerof justifying the application of
Section 43 was unacceptable due to the need to show the concurrence of the several requisites before
entries in the course of business could be excepted from the hearsay rule. The requisites are as follows:

(a) The person who made the entry must be dead or unable to testify;

(b) The entries were made at or near the time of the transactions to which they refer;

(c) The entrant was in a position to know the facts stated in the entries;

(d) The entries were made in his professional capacity or in the performance of a duty, whether legal,
contractual, moral, or religious;

(e) The entries were made in the ordinary or regular course of business or duty.41

The Court has to acquit petitioner for failure of the State to establish her guilt beyond reasonable doubt.
The Court reiterates that in the trial of every criminal case, a judge must rigidly test the State’s evidence
of guilt in order to ensure that such evidence adhered to the basic rules of admissibility before
pronouncing an accused guilty of the crime charged upon such evidence. The failure of the judge to do so
herein nullified the guarantee of due of process of law in favor of the accused, who had no obligation to
prove her innocence. Heracquittal should follow.

IV

No reliable evidence on damage

Conformably with finding the evidence of guilt unreliable, the Court declares that the disposition by the
RTC ordering petitioner to indemnify Footlucker’s in the amount of ₱131,286.92 with interest of 12% per
annum until fully paid was not yet shown to be factually founded. Yet, she cannot now be absolved of civil
liability on that basis. Heracquittal has to bedeclared as without prejudice to the filing of a civil action
against her for the recovery of any amount that she may still owe to Footlucker’s.1âwphi1

WHEREFORE, the Court SETS ASIDE ANDREVERSESthe decision convicting ANNA LERIMA
PATULAof estafa as charged, and ACQUITS her for failure of the Prosecution to prove her guilt beyond
reasonable doubt, without prejudice to a civil action brought against her for

the recoveryof any amount still owing in favor of Footlucker’s Chain of Stores, Inc.

No pronouncement on costs of suit.

SO ORDERED.
Herrera v. Alba

G.R. No. 148220, 15 June 2005

FACTS:

On 14 May 1998, then thirteen-year-old Rosendo Alba (respondent), represented by his mother Armi
Alba, filed before the trial court a petition for compulsory recognition, support and damages against
petitioner. On 7 August 1998, petitioner filed his answer with counterclaim where he denied that he is the
biological father of respondent. Petitioner also denied physical contact with respondent’s mother.

Respondent filed a motion to direct the taking of DNA paternity testing to abbreviate the proceedings. To
support the motion, respondent presented the testimony of Saturnina C. Halos, Ph.D. When she testified,
Dr. Halos was an Associate Professor at De La Salle University where she taught Cell Biology. She was
also head of the University of the Philippines Natural Sciences Research Institute (UP-NSRI), a DNA
analysis laboratory. She was a former professor at the University of the Philippines in Diliman, Quezon
City, where she developed the Molecular Biology Program and taught Molecular Biology. In her
testimony, Dr. Halos described the process for DNA paternity testing and asserted that the test had an
accuracy rate of 99.9999% in establishing paternity. Petitioner opposed DNA paternity testing and
contended that it has not gained acceptability. Petitioner further argued that DNA paternity testing violates
his right against self-incrimination.

ISSUE:

Whether or not DNA Paternity testing violates Herrera’s right against self-incrimination.

RULING:

No. It is true that in 1997, the Supreme Court ruled in Pe Lim vs CA that DNA testing is not yet recognized
in the Philippines and at the time when he questioned the order of the trial court, the prevailing doctrine
was the Pe Lim case; however, in 2002 there is already no question as to the acceptability of DNA test
results as admissible object evidence in Philippine courts. This was the decisive ruling in the case of
People vs Vallejo (2002).

It is also considered that the Vallejo Guidelines be considered by the courts. The Vallejo Guidelines
determines weight and probative value of DNA test results.

The Vallejo Guidelines:

1. how the samples were collected;

2. how they were handled;

3. the possibility of contamination of the samples;

4. the procedure followed in analyzing the samples;

5. whether the proper standards and procedures were followed in conducting the tests; and

6. the qualification of the analyst who conducted the tests.

512 Phil. 802

TINGA, J.:

This treats of the petition for review on certiorari of the Court of Appeals' Decision and Resolution in CA
G.R. SP No. 66252 dated 30 April 2002[1] and 27 June 2002,[2] respectively, which set aside the Order of
the Regional Trial Court (RTC) of Pasig City[3] dated 10 May 2001, declaring an application for insurance
and an insurance policy as inadmissible evidence.

The facts of the case are undisputed.

On 15 March 1994, Viveca Lim Yu (private respondent) brought against her husband, Philip Sy Yu
(petitioner), an action for legal separation and dissolution of conjugal partnership on the grounds of
marital infidelity and physical abuse. The case was filed before the RTC of Pasig and raffled to Branch 158,
presided by Judge Jose R. Hernandez.

During trial, private respondent moved for the issuance of a subpoena duces tecum and ad
testificandum[4] to certain officers of Insular Life Assurance Co. Ltd. to compel production of the
insurance policy and application of a person suspected to be petitioner's illegitimate child. [5] The trial
court denied the motion.[6] It ruled that the insurance contract is inadmissible evidence in view of Circular
Letter No. 11-2000, issued by the Insurance Commission which presumably prevents insurance
companies/agents from divulging confidential and privileged information pertaining to insurance
policies.[7] It added that the production of the application and insurance contract would violate Article
280[8] of the Civil Code and Section 5 of the Civil Registry Law, [9] both of which prohibit the unauthorized
identification of the parents of an illegitimate child.[10] Private respondent sought reconsideration of
the Order, but the motion was denied by the trial court.[11]

Aggrieved, private respondent filed a petition for certiorari before the Court of Appeals, imputing grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of Judge Hernandez in issuing
the 10 May 2001 Order.[12] The Court of Appeals summarized the issues as follows: (i) whether or not an
insurance policy and its corresponding application form can be admitted as evidence to prove a party's
extra-marital affairs in an action for legal separation; and (ii) whether or not a trial court has the
discretion to deny a party's motion to attach excluded evidence to the record under Section 40, Rule 132
of the Rules of Court.[13]

According to the Court of Appeals, private respondent was merely seeking the production of the
insurance application and contract, and was not yet offering the same as part of her evidence. Thus, it
declared that petitioner's objection to the admission of the documents was premature, and the trial court's
pronouncement that the documents are inadmissible, precipitate.[14] The contents of the insurance
application and insurance documents cannot be considered as privileged information, the Court of
Appeals added, in view of the opinion of the Insurance Commissioner dated 4 April 2001 to the effect that
Circular Letter No.11-2000 "was never intended to be a legal impediment in complying with lawful
orders".[15] Lastly, the Court of Appeals ruled that a trial court does not have the discretion to deny a
party's privilege to tender excluded evidence, as this privilege allows said party to raise on appeal the
exclusion of such evidence.[16] Petitioner filed a motion for reconsideration but to no avail.

In the present petition, petitioner argues that the Court of Appeals blundered in delving into errors of
judgment supposedly committed by the trial court as if the petition filed therein was an ordinary appeal
and not a special civil action. Further, he claims that the Court of Appeals failed to show any specific
instance of grave abuse of discretion on the part of the trial court in issuing the assailed Order.
Additionally, he posits that private respondent had already mooted her petition before the Court of
Appeals when she filed her formal offer of rebuttal exhibits, with tender of excluded evidence before the
trial court.[17]

For her part, private respondent maintains that the details surrounding the insurance policy are crucial to
the issue of petitioner's infidelity and his financial capacity to provide support to her and their children.
Further, she argues that she had no choice but to make a tender of excluded evidence considering that she
was left to speculate on what the insurance application and policy ruled out by the trial court would
contain.[18]

A petition for certiorari under Rule 65 is the proper remedy to correct errors of jurisdiction and grave
abuse of discretion tantamount to lack or excess of jurisdiction committed by a lower court. [19] Where a
respondent does not have the legal power to determine the case and yet he does so, he acts without
jurisdiction; where, "being clothed with power to determine the case, oversteps his authority as
determined by law, he is performing a function in excess of jurisdiction." [20]

Petitioner claims that the Court of Appeals passed upon errors of judgment, not errors of jurisdiction,
since it delved into the propriety of the denial of the subpoena duces tecum and subpoena ad
testificandum. The argument must fail.

While trial courts have the discretion to admit or exclude evidence, such power is exercised only when the
evidence has been formally offered.[21] For a long time, the Court has recognized that during the early
stages of the development of proof, it is impossible for a trial court judge to know with certainty whether
evidence is relevant or not, and thus the practice of excluding evidence on doubtful objections to its
materiality should be avoided.[22] As well elucidated in the case of Prats & Co. v. Phoenix Insurance
Co.:[23]

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.

In the instant case, the insurance application and the insurance policy were yet to be presented in court,
much less formally offered before it. In fact, private respondent was merely asking for the issuance
of subpoena duces tecum and subpoena ad testificandum when the trial court issued the assailed Order.
Even assuming that the documents would eventually be declared inadmissible, the trial court was not then
in a position to make a declaration to that effect at that point. Thus, it barred the production of the
subject documents prior to the assessment of its probable worth. As observed by petitioners, the
assailed Order was not a mere ruling on the admissibility of evidence; it was, more importantly, a ruling
affecting the proper conduct of trial.[24]

Excess of jurisdiction refers to any act which although falling within the general powers of the judge is not
authorized and is consequently void with respect to the particular case because the conditions under
which he was only authorized to exercise his general power in that case did not exist and therefore, the
judicial power was not legally exercised.[25] Thus, in declaring that the documents are irrelevant and
inadmissible even before they were formally offered, much less presented before it, the trial court acted in
excess of its discretion.

Anent the issue of whether the information contained in the documents is privileged in nature, the same
was clarified and settled by the Insurance Commissioner's opinion that the circular on which the trial
court based its ruling was not designed to obstruct lawful court orders. [26] Hence, there is no more
impediment to presenting the insurance application and policy.

Petitioner additionally claims that by virtue of private respondent's tender of excluded evidence, she has
rendered moot her petition before the Court of Appeals since the move evinced that she had another
speedy and adequate remedy under the law. The Court holds otherwise.

Section 40, Rule 132 provides:

Sec.40. Tender of excluded evidence. If documents or things offered in evidence are excluded by the court,
the offeror may have the same attached to or made part of the record. If the evidence excluded is oral, the
offeror may state for the record the name and other personal circumstances of the witness and the
substance of the proposed testimony.

It is thus apparent that before tender of excluded evidence is made, the evidence must have been formally
offered before the court. And before formal offer of evidence is made, the evidence must have been
identified and presented before the court. While private respondent made a "Tender of Excluded
Evidence," such is not the tender contemplated by the above-quoted rule, for obviously, the insurance
policy and application were not formally offered much less presented before the trial court. At most, said
"Tender of Excluded Evidence" was a manifestation of an undisputed fact that the subject documents
were declared inadmissible by the trial court even before these were presented during trial. It was not the
kind of plain, speedy and adequate remedy which private respondent could have resorted to instead of the
petition for certiorari she filed before the Court of Appeals. It did not in any way render the said petition
moot.

WHEREFORE, premises considered, the petition is DENIED. The Decision dated 30 April 2002
and Resolution dated 27 June 2002 are AFFIRMED. Costs against petitioner.

SO ORDERED.
G. R. No. 160858 February 28, 2006

ROLITO RABANAL, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES and HON. COURT OF APPEALS, Respondents.

DECISION

TINGA, J.:

Before us is a petition for certiorari under Rule 45 of the Rules of Court filed by Rolito Rabanal (petitioner)
impugning the (1) Decision1 of the Court of Appeals dated 31 March 2003 in CA-G.R. CR No. 14772,
affirming the Decision2 of the Regional Trial Court (RTC) of Quezon City, Branch 97 convicting petitioner
of homicide and (2) its Resolution3 dated 11 November 2003 denying his motion for reconsideration.

In Criminal Case No. Q-48913, petitioner, along with Salvador Impistan alias "Ador" and Eloy Labatique
(Eloy) were charged with homicide in an Information which reads:

That on or about the 16th day of November, [sic] 1986, in Quezon City, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused conspiring together, confederating with
[and] mutually helping each other, with intent to kill, with evident premeditation and treachery, and without
any justifiable cause, did then and there willfully, unlawfully and feloniously attack, assault and employ
personal violence upon the person of FELIPE SALES Y NACHOR by then and there stab[b]ing him with a
bladed weapon hitting the victim on different parts of his body thereby inflicting upon him serious and
mortal wou[n]ds which were the direct and immediate cause of his death, to the damage and prejudice of
the [heirs] of the said FELIPE SALES Y NACHOR in such amount as may be awarded under the
provisions of the Civil Code.

CONTRARY TO LAW.4

Eloy remained at large. On arraignment, Ador and petitioner pleaded not guilty. Trial on the merits
ensued.

As culled from the testimony of the lone eyewitness Dionisio Javier (Javier) and the medico-legal report,
the evidence of the prosecution established the following facts:

In the evening of 16 November 1986, Javier was watching a card game of pusoy inside the chapel in
Seminary Road, Sitio Maligaya, Quezon City when Ador and Eloy arrived. Ador reportedly uttered, "Kung
sino ang matapang dito, ako lang ang harapin, kung sino ang manggugulo, ako lang ang harapin."
Thereafter, the duo left. Johnny Sibayan (Mang Johnny), the Barangay Tanod, came and asked the
children to leave, after which he followed suit.

Ador and Eloy returned to the chapel. Ador suddenly boxed Javier on the right side of his head, causing
the latter to move backward. When Javier asked "Bakit?" Eloy collared him and dragged him to a corner
of the chapel’s room. Eloy punched him again on the head and at the back while Javier was cowering to
cover his face. At that instance, Mang Johnny came back and tried to pacify the assailant by saying,
"Tama na yan, tama na yan." Mang Johnny subsequently ordered Javier to leave.

Instead of leaving, Javier went out to look for a stone to hurl back at Ador. However, Javier failed to find
one; he instead stood beside the door. Peeping through a window, Javier saw the victim Felipe Sales
putting his right foot over a chair while holding on to iron railings.

Suddenly, Javier saw petitioner appear from the back of the chapel. Petitioner leaned against the wall and
pulled out a knife measuring seven (7) inches in length. He stabbed the victim with an upward thrust at his
right armpit. Javier also saw Ador stab the victim near the chest, after which the latter groaned, "Aray."
The victim retaliated with a blow to Ador, who simultaneously stabbed him at the front side of his body
near the chest. Eloy entered the scene and likewise stabbed the victim. Javier saw Ador stab the victim
several times until he fell down. Ador continued stabbing the victim several times at the back while he was
lying flat on the floor.

At this moment, Javier ran away. On his way home, he met one of his friends and told him about the
incident.
Dr. Florante Mendoza was on duty at the Quezon City General Hospital on 16 November 1986. He
examined a patient named Felipe Sales who was declared dead on arrival. He testified that the victim
suffered several stab wounds on the left upper arm, in the forearm, and at the back, which "possibly"
caused his death.5

Dr. Desiderio Moraleda, on the other hand, testified that as per autopsy result, the cause of the victim’s
death was "cardio arrest due to respiratory shock and hemorrhage secondary to multiple stab wounds."
The wounds totaled twenty-six (26), twenty-three (23) of which were located in the dorsal side, chest,
forearm and back. He said that there was no wound at the right armpit. Based on his examination of the
wounds, he opined that the assailants had been in motion, although he also said that it was possible that
there could have been only one assailant.6

The evidence for the defense consists of the testimonies of Raymundo Buenaventura (Raymundo) and
petitioner himself.

Raymundo was inside the chapel when he saw Ador and Eloy stab the victim several times. After the
assailants left, the victim was brought to the hospital in a tricycle. He belied the testimony of witness
Javier that petitioner was the first to stab the victim. According to Raymundo, petitioner was not present at
the scene of the crime.

Petitioner testified on his behalf. He claimed that he was then working at the Quezon City General
Hospital on 16 November 1986 from 7:00 a.m. to 4:00 p.m. He went to the wake in the chapel after work.
After being informed by Mang Johnny and Raymundo of the stabbing incident, he went home to avoid
trouble. He denied stabbing the victim and further denied having known the victim prior to 16 November
1986.

The case against Ador was dismissed on demurrer to evidence. However, petitioner was eventually
convicted of homicide in a Decision7 dated 12 January 1993.

The trial court gave credence to the testimony of the prosecution witness, despite some apparent
inconsistencies on his part. The RTC opined that the prosecution was able to overcome the presumption
of innocence of petitioner. The trial court sentenced petitioner to a penalty of imprisonment with a
minimum term of ten (10) years and four (4) months and one (1) day to fifteen (15) years and ordered him
to indemnity the heirs of the victim in the amount of ₱30,000.00.8

Petitioner appealed his conviction to the Court of Appeals. In his Brief, he capitalized on the inconsistency
of Javier’s testimony relative to the physical evidence as shown by the medical and autopsy findings to
exculpate himself from criminal liability. Petitioner claimed that he could not be faulted for the death of the
victim in the absence of credible proof of injury he caused to the victim. 9

The appellate court dismissed petitioner’s contention by holding that "[t]he location of the stab wounds at
the cadaver is inconsequential in a homicidal attack. As long as the intent to kill is present, the
requirement of the law for conviction is satisfied."10 The Court of Appeals gave full faith to the positive
identification by the lone witness Javier of petitioner as the assailant in sustaining the latter’s conviction. 11

In a Decision dated 31 March 2003, the appellate court affirmed the trial court’s judgment of conviction
with a clarification of the nomenclature of the penalty pertaining to the minimum and maximum terms of
the indeterminate sentence, thus: ten (10) years and four (4) months and one (1) day of prision mayor, as
minimum, to fifteen (15) years of reclusion temporal, as maximum.12

Petitioner moved for reconsideration, but his motion was denied in a Resolution dated 11 November
2003. The Court of Appeals remained steadfast in its original action for conviction, thus:

Even assuming, ex argumenti, that the witness’ account of the location of the stab wound is disputatious,
it will not warrant a reversal of Our ruling in light of the positive, categorical and consistent identification of
appellant as the assailant.13

Aggrieved, petitioner interposed the instant petition anchored on the primordial issue of whether or not the
guilt of petitioner was proven beyond reasonable doubt for the crime charged. 14

It is a well-entrenched rule that the findings of fact of the trial court and its conclusions based on the said
findings are accorded by this Court high respect, if not conclusive effect, especially when affirmed by the
Court of Appeals. This is because of the unique advantage of the trial court of having been able to
observe, at close range, the demeanor and behavior of the witnesses as they testify. 15

Our jurisdiction in cases brought to us from the Court of Appeals is limited to the review and revision of
errors of law allegedly committed by the appellate court, as its findings of fact are deemed conclusive. We
are not duty-bound to analyze and weigh all over again the evidence already considered in the
proceedings below. However, such rule is not without

exceptions.16 Such findings may be reviewed if there appears in the record some fact or circumstance of
weight which the lower court may have overlooked, misunderstood or misappreciated, and which, if
properly considered, would alter the result of the case.17 Where, as in this case, the weight and
sufficiency of evidence is crucial to the question of innocence or guilt of petitioner, a thorough
reevaluation of the evidentiary basis for conviction is imperative.

The prosecution relied heavily on the testimony of its lone eyewitness to establish the participation of
petitioner in the crime. Javier positively identified petitioner as one of those who stabbed the victim inside
the chapel. In fact, the rulings of the lower courts rest primarily on his testimony to warrant petitioner’s
conviction. Thus, it becomes evident that Javier’s testimony is pivotal in the determination of the guilt of
petitioner.

Although the well-entrenched rule is that the testimony of a single witness is sufficient on which to anchor
a judgment of conviction, it is required that such testimony must be credible and reliable.18

We shall now examine Javier’s version of the stabbing incident. In his earlier statement made before the
police taken on 17 November 1986, he made the following declaration:

T: Isalaysay mo nga ang buong pangyayari?

S: Ganito po iyon, ng gabing [sic] ay nagpunta ako sa kapilya dahil nga may na aburol [sic] na patay,
inabutan ko doon sina FELIPE, DELFIN at maraming tao na nanood din ng sugal. Habang magkakatabi
[sic] kami nina FELIPE at DIONISIO ay dumating si ADOR na kasama si BOY BUWING at isa pa na hindi
ko kilala. Bigla akong sinuntok ni ADOR sa mukha tapos niyan ay hinila ako sa aking t-s[h]irt ng kasama
nila at nilayo, buti na lang at naawat ni JOHNNY kaya hindi na ako nasaktan. Lalabas sana ako ng
kapilya pero nakita ko na sinaksak ni BOY BUWING si FELIPE, tapos niyon ay sinaksak din siya ni
ADOR, hinawakan pa ni ADOR si FELIPE sa damit at pinagsasaksak [sic] sa katawan. Ang ginawa
naman nina BOY BUWING at ng kasama nila ay pinagsasaksak din si FELIPE. Tumakbong palabas ng
kapilya si FELIPE pero sinundan nina ADOR, BOY BUWING at ng kasama xxx nila. Nakahiga na sa lupa
si FELIPE at sinusaksak [sic] pa nila. Nagtakbuhan na sina ADOR, BOY BUWING at kasama niya, si
FELIPE naman ay dinala na sa hospital.19

Javier made these statements while the events were still fresh on his mind. It can thus be inferred that
there were three people who allegedly attacked the victim, namely, Boy Buwing (petitioner), Ador, and
one other person whose identity was not known to the witness at that time. Javier also stated that the trio
arrived together at the chapel.

On direct examination, or two months after the incident, Javier gave the following answers to the
questions propounded by the private prosecutor:

Q- Now do you recall of [sic] any unusual incident that happened on that précised [sic] date and time?

A- There was.

Q- And will you please relate to this Court what that incident was all about?

A- Yes sir.

Q- Kindly relate please?

A- Yes sir.

xxxx

A- Then, Ador and Roy Labatique arrived.

Q- And what happened after [sic] arrival of these two?

A- Ador told everyone present that if there is someone who will make trouble.

xxxx

A- "Sabi po nila, kung sino ang matapang dito ako lang ang harapin, kung sino ang manggugulo, ako lang
ang harapin."

xxxx

Q- And after those words being uttered at by Ador, what happened next, if you remember?

A- After they uttered those words, they left.

Q- And after having left the place if they left as you said, what happened next?

A- The Barangay Tanod, Mang Johnny came.

xxxx

A- Mang Johnny told the children to get out.

xxxx

A- After he asked the children to leave, he also left.

xxxx

Q- After that, what happened?

A- Then, Ador and Elloy suddenly arrived.

Q- Where were you positioned at when these Ador and Elloy arrived at the chapel?

A- I was inside the chapel near the place where we were playing pusoy.20

Based on the foregoing testimony, Javier clearly stated that Ador and Eloy arrived together at the chapel
and left abruptly after issuing a vague threat. The Barangay Tanod came and asked the children to leave.
When Ador and Eloy came back, they chanced upon Javier.

Upon seeing Javier, Ador boxed him. Eloy, on the other hand, dragged him to a corner of the chapel and
continuously hit him at the back and head. This mauling went on until he was pacified by the Barangay
Tanod. Standing by the door of the chapel, Javier witnessed the killing. He positively declared that
petitioner then stabbed victim once:

xxxx

Q- You said that this Rolito Rabanal arrived, where did you see him when he arrived?

A- He came from behind the chapel.

Q- Why do you know that he came from behind the chapel?

xxxx

A- It is because I saw him.

Q- And what happened next after you saw him came from behind the chapel?

A- Dumikit siya sa pader at bumunot ng patalim. (witness demonstrating)

xxxx

Q- After having seen [sic] the petitioner with that knife, what happened next?

A- Then he stabbed Felipe by an upward thrust while Felipe was holding on to the grill.
(witness demonstrating the sudden upward thrust towards the left armpit)

Q- Left armpit of who?

A- While Felipe was holding on to the grill, Rolito Rabanal stabbed him upwards near the right armpit. The
thrust of the knife was upwards. (witness demonstrating an upward thrust on his right armpit under the
armpit side of the right body just under the left armpit)

Q- And where was the petitioner positioned at in relation to the deceased Felipe Sales when Felipe Sales
as you said was stabbed on the right armpit?

A- Boy Buwing was on the right side of the Felipe Sales and the latter did not know that he was there
because he just came from behind the chapel.21

According to Javier, the first stab wound was inflicted by petitioner, who came from behind the chapel.
While the victim was holding on to the grill and unaware of the presence of petitioner, the latter allegedly
stabbed him near his right armpit.

Then, Javier recounted the participation of Ador in the stabbing of Sales.

xxxx

Q- Now after you said Felipe Sales was stabbed by the petitioner, what happened next?

A- Then I looked at Felipe Sales, Ador hit him near the chest with a knife, and then, after Felipe Sales
was stabbed, he said, "aray," after that, he boxed Ador who was in front of him and then he
simultaneously Ador stabbed him also near the front side of his body near the chest. I do not know the
exact location.

Q- And this Ador you are referring to, would you be able to describe him?

A- He is a small man but he has a robust body.

xxxx

Q- Now after Ador whom you stated gave a thrust at the chest of the victim, what happened next?

A- After a simultaneous boxing by Felipe Sales and Ador was also stabbing him, then, this Ador stabbed
him, when he was about to ran [sic] a little backward, Ador held him by the collar (witness indicating with
his left hand the holding of the collar) and then stabbed him again, and then, Ador held him [by] the collar
of his neck. After Felipe Sales boxed Ador, Ador stabbed him and when he moved a little backward, Ador
followed him and held him by the collar on his neck, and then, Boy Buwing arrived and also stabbed
Felipe Sales, and then Felipe Sales fell down to the ground, and then simultaneously, Elloy Labatique and
Ador entered.22

Upon his cross-examination, however, Javier made a surprising turnaround.

Q- How about Salvador Impistan, did he stab Felipe Sales?

A- After boxing me, a Barangay Tanod pacified us and I was sent out of the chapel by the Barangay
Tanod.

Q- So, in short, you did not see whether or not Salvador Impistan stab Felipe Sales?

A- Because I was sent out by the Barangay Tanod.

Q- I will repeat my question for the last time. Did you see Salvador Impistan stab Felipe Sales?

A- No sir. I did not see. I only saw Rolito Rabanal.23

While Javier was very explicit in recounting Ador’s participation in the crime in his sworn statement and
during the direct examination, he retracted during the cross-examination when he expressly denied
seeing Ador stab the victim. Presumably, the dismissal of the case against Ador on demurrer was
grounded on this inconsistent, yet categorical statement of Javier.
The trial court disregarded these apparent inconsistencies and upheld the general credibility of the
witness who appeared to be sincere.24 We are well aware of the rule that minor inconsistencies and
contradictions do not destroy the credibility of the witness. In fact, they even tend to strengthen rather
than weaken one’s credibility by erasing any suspicion of a rehearsed testimony. 25

However, these inconsistencies and contradictions in Javier’s testimony cannot be characterized as minor
or be dismissed as trivial. If at all, these inconsistencies reflect his uncertainty as to the identity of the
malefactors. He was categorical in describing Ador’s participation in stabbing the victim during the direct
examination and even earlier in his sworn statement, only to retract during the cross-examination and
deny having seen Ador stab the victim. This turnaround bears relevance to the identification of the
assailants so as to create a reasonable doubt as to their culpability.

It is a well-established principle that when the identification is doubtful, inconclusive, or unreliable, an

acquittal is called for. The doubtful identification of petitioner herein, when taken with the absence of any
other evidence showing his guilt, justifies his acquittal.26

Corroborative evidence may be resorted to when there are reasons to warrant the suspicion that the
witness falsified the truth or that his observations had been inaccurate.27

Javier had unequivocally testified that petitioner stabbed victim on the right armpit. 28 This does not
correspond with the autopsy report. Of the twenty-six (26) stab wounds, not a single wound was found at
the right armpit.

Physical evidence is a mute but eloquent manifestation of truth and rates highly in the hierarchy of
trustworthy evidence. It enjoys a far more superior probative weight than corroborative testimonies. 29 In
the instant case, the autopsy report negates the lone witness’s account of the participation of petitioner in
the stabbing of the victim.

The inconsistency between the positive testimony of Javier and the physical evidence, particularly the
autopsy report, further diminishes the credibility of the lone eyewitness.

The Court has ruled that when serious and inexplicable discrepancies in important details are found in a
witness's testimony, his/her testimony may be disregarded. Also, when discrepancies pervade the
testimonies of prosecution witnesses such that the totality of the prosecution evidence fails to constitute a
coherent account, the conviction of petitioner cannot be justified. In this case, where the testimony of the
lone witness may be the sole basis for conviction, the serious discrepancies in his testimony hardly lend
credence to his supposed positive testimony and cast a serious doubt as to the credibility of his charge. 30

There are other circumstances extant from the record that likewise support reasonable doubt in favor of
petitioner. His own witness, Raymundo, asserted that petitioner was not present at all at the scene of the
crime. The medico-legal officer conceded that it was possible that only one person inflicted all the stab
wounds on the victim, thus it is also possible that any one of the several people mentioned by Javier
could have, on his own, perpetrated the crime. The gaps and inconsistencies in Javier’s tale give rise to a
plausible alternative version, supported by petitioner’s witness and unrebutted by the physical evidence,
that petitioner was not present at the scene of the crime, or otherwise did not participate in the stabbing of
the victim. When confronted with variant though equally plausible version of events, the version that is in
accord with the acquittal or the least liability of the accused should be favored. 31

Law and jurisprudence demand proof beyond reasonable doubt before any person may be deprived of his
life, liberty, or even property. Enshrined in the Bill of Rights is the right of the petitioner to be presumed
innocent until the contrary is proved, and to overcome the presumption, nothing but proof beyond
reasonable doubt must be established by the prosecution. The constitutional presumption of innocence
requires courts to take "a more than casual consideration" of every circumstance or doubt proving the
innocence of petitioner.32

The lower courts committed reversible error in ruling that the positive identification of petitioner-appellant
by the complainant as the lone eyewitness presented by the prosecution established his guilt to a moral
certainty. In this case, the testimony of Javier is dubious; hence, stark of probative weight.

A conviction in a criminal case must be supported by proof beyond reasonable doubt, which means a
moral certainty that petitioner is guilty.33 The prosecution failed to establish the identity of the assailant
beyond reasonable doubt. Hence, we cannot sustain petitioner’s conviction.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR No. 14772 is REVERSED and SET
ASIDE. Petitioner is on reasonable doubt, and is ordered immediately released unless he is being held for
some other valid or lawful cause. The Director of Prisons is DIRECTED to inform this Court of the action
taken hereon within five (5) days from receipt hereof.

SO ORDERED.
G.R. No. 175021 June 15, 2011

REPUBLIC OF THE PHILIPPINES, represented by the Chief of the Philippine National

Police, Petitioner,
vs.
THI THU THUY T. DE GUZMAN, Respondent.

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari1 filed by Republic of the Philippines, as represented by the
Chief of the Philippine National Police (PNP), of the September 27, 2006 Decision2 of the Court of
Appeals in CA-G.R. CV No. 80623, which affirmed with modification the September 8, 2003
Decision3 of the Regional Trial Court (RTC), Branch 222, of Quezon City in Civil Case No. Q99-
37717.

Respondent is the proprietress of Montaguz General Merchandise (MGM),4 a contractor accredited

by the PNP for the supply of office and construction materials and equipment, and for the delivery of
various services such as printing and rental, repair of various equipment, and renovation of
buildings, facilities, vehicles, tires, and spare parts.5

On December 8, 1995, the PNP Engineering Services (PNPES), released a Requisition and Issue
Voucher6 for the acquisition of various building materials amounting to Two Million Two Hundred
Eighty-Eight Thousand Five Hundred Sixty-Two Pesos and Sixty Centavos (₱2,288,562.60) for the
construction of a four-storey condominium building with roof deck at Camp Crame, Quezon City.7

Respondent averred that on December 11, 1995, MGM and petitioner, represented by the PNP,
through its chief, executed a Contract of Agreement8 (the Contract) wherein MGM, for the price of
₱2,288,562.60, undertook to procure and deliver to the PNP the construction materials itemized in
the purchase order9 attached to the Contract. Respondent claimed that after the PNP Chief
approved the Contract and purchase order,10 MGM, on March 1, 1996, proceeded with the delivery
of the construction materials, as evidenced by Delivery Receipt Nos. 151-153,11Sales Invoice Nos.
038 and 041,12 and the "Report of Public Property Purchase"13 issued by the PNP’s Receiving and
Accounting Officers to their Internal Auditor Chief. Respondent asseverated that following the PNP’s
inspection of the delivered materials on March 4, 1996,14 the PNP issued two Disbursement
Vouchers; one in the amount of ₱2,226,147.26 in favor of MGM,15 and the other, 16 in the amount of
₱62,415.34, representing the three percent (3%) withholding tax, in favor of the Bureau of Internal
Revenue (BIR).17

On November 5, 1997, the respondent, through counsel, sent a letter dated October 20, 199718 to
the PNP, demanding the payment of ₱2,288,562.60 for the construction materials MGM procured for
the PNP under their December 1995 Contract.

On November 17, 1997, the PNP, through its Officer-in-Charge, replied19 to respondent’s counsel,
informing her of the payment made to MGM via Land Bank of the Philippines (LBP) Check No.
0000530631, 20 as evidenced by Receipt No. 001, 21 issued by the respondent to the PNP on April
23, 1996.22

On November 26, 1997, respondent, through counsel, responded by reiterating her demand23 and
denying having ever received the LBP check, personally or through an authorized person. She also
claimed that Receipt No. 001, a copy of which was attached to the PNP’s November 17, 1997 letter,
could not support the PNP’s claim of payment as the aforesaid receipt belonged to Montaguz
Builders, her other company, which was also doing business with the PNP, and not to MGM, with
which the contract was made.

On May 5, 1999, respondent filed a Complaint for Sum of Money against the petitioner, represented
by the Chief of the PNP, before the RTC, Branch 222 of Quezon City.24 This was docketed as Civil
Case No. Q99-37717.

The petitioner filed a Motion to Dismiss25 on July 5, 1999, on the ground that the claim or demand set
forth in respondent’s complaint had already been paid or extinguished,26 as evidenced by LBP Check
No. 0000530631 dated April 18, 1996, issued by the PNP to MGM, and Receipt No. 001, which the
respondent correspondingly issued to the PNP. The petitioner also argued that aside from the fact
that the respondent, in her October 20, 1997 letter, demanded the incorrect amount since it included
the withholding tax paid to the BIR, her delay in making such demand "[did] not speak well of the
worthiness of the cause she espouse[d]."27

Respondent opposed petitioner’s motion to dismiss in her July 12, 1999 Opposition28and September
10, 1999 Supplemental Opposition to Motion to Dismiss.29 Respondent posited that Receipt No. 001,
which the petitioner claimed was issued by MGM upon respondent’s receipt of the LBP check, was,
first, under the business name "Montaguz Builders," an entity separate from MGM. Next, petitioner’s
allegation that she received the LBP check on April 19, 1996 was belied by the fact that Receipt No.
001, which was supposedly issued for the check, was dated four days later, or April 23, 1996.
Moreover, respondent averred, the PNP’s own Checking Account Section Logbook or the Warrant
Register, showed that it was one Edgardo Cruz (Cruz) who signed for the check due to
MGM, 30contrary to her usual practice of personally receiving and signing for checks payable to her
companies.

After conducting hearings on the Motion to Dismiss, the RTC issued an Order31 on May 4, 2001,
denying the petitioner’s motion for lack of merit. The petitioner thereafter filed its Answer,32 wherein it
restated the same allegations in its Motion to Dismiss.

Trial on the merits followed the pre-trial conference, which was terminated on June 25, 2002 when
the parties failed to arrive at an amicable settlement.33

On September 3, 2002, shortly after respondent was sworn in as a witness, and after her counsel
formally offered her testimony in evidence, Atty. Norman Bueno, petitioner’s counsel at that time,
made the following stipulations in open court:

Atty. Bueno (To Court)

Your Honor, in order to expedite the trial, we will admit that this witness was contracted to deliver the
construction supplies or materials. We will admit that she complied, that she actually delivered the
materials. We will admit that Land Bank Corporation check was issued although we will not admit
that the check was not released to her, as [a] matter of fact, we have the copy of the check. We will
admit that Warrant Register indicated that the check was released although we will not admit that the
check was not received by the [respondent].

Court (To Atty. Albano)

So, the issues here are whether or not the [respondent] received the check for the payment of the
construction materials or supplies and who received the same. That is all.

Atty. Albano (To Court)

Yes, your Honor.

Court (To Atty. Albano)

I think we have an abbreviated testimony here. Proceed.34 (Emphasis ours.)

The stipulations made by the petitioner through Atty. Bueno were in consonance with the admissions
it had previously made, also through Atty. Bueno, in its Answer,35 and pre-trial brief36:

Answer:

IX

It ADMITS the allegation in paragraph 9 of the Complaint that [respondent] delivered to the PNP
Engineering Service the construction materials. It also ADMITS the existence of Receipt Nos. 151,
152 and 153 alleged in the same paragraph, copies of which are attached to the Complaint as
Annexes "G," "G-1" and "G-2."37 (Emphasis ours.)

Pre-trial Brief:
 III

ADMISSIONS

3.1. Facts and/or documents admitted

For brevity, [petitioner] admit[s] only the allegations in [respondent’s] Complaint and the annexes
thereto that were admitted in the Answer.38 (Emphases ours.)

With the issue then confined to whether respondent was paid or not, the RTC proceeded with the
trial.

Respondent, in her testimony, narrated that on April 18, 1996, she went to the PNP Finance Center
to claim a check due to one of her companies, Montaguz Builders. As the PNP required the issuance
of an official receipt upon claiming its checks, respondent, in preparation for the PNP check she
expected, already signed Montaguz Builders Official Receipt No. 001, albeit the details were still
blank. However, upon arriving at the PNP Finance Center, respondent was told that the check was
still with the LBP, which could not yet release it. Respondent then left for the Engineering Services
Office to see Captain Rama, along with Receipt No. 001, which she had not yet issued.39Respondent
claimed that after some time, she left her belongings, including her receipt booklet, at a bench in
Captain Rama’s office when she went around the Engineering Office to talk to some other
people.40 She reasoned that since she was already familiar and comfortable with the people in the
PNPES Office, she felt no need to ask anyone to look after her belongings, as it was her "normal
practice"41 to leave her belongings in one of the offices there. The next day, respondent alleged that
when she returned for the check due to Montaguz Builders that she was not able to claim the day
before, she discovered for the first time that Receipt No. 001, which was meant for that check, was
missing. Since she would not be able to claim her check without issuing a receipt, she just informed
the releaser of the missing receipt and issued Receipt No. 002 in its place.42 After a few months,
respondent inquired with the PNP Finance Center about the payment due to MGM under the
Contract of December 1995 and was surprised to find out that the check payable to MGM had
already been released. Upon making some inquiries, respondent learned that the check, payable to
MGM, in the amount of ₱2,226,147.26, was received by Cruz, who signed the PNP’s Warrant
Register. Respondent admitted to knowing Cruz, as he was connected with Highland Enterprises, a
fellow PNP-accredited contractor. However, she denied ever having authorized Cruz or Highland
Enterprises to receive or claim any of the checks due to MGM or Montaguz Builders.43 When asked
why she had not filed a case against Cruz or Herminio Reyes, the owner of Highland Enterprises,
considering the admitted fact that Cruz claimed the check due to her, respondent declared that there
was no reason for her to confront them as it was the PNP’s fault that the check was released to the
wrong person. Thus, it was the PNP’s problem to find out where the money had gone, while her
course of action was to go after the PNP, as the party involved in the Contract.44

On April 29, 2003, petitioner presented Ms. Jesusa Magtira, who was then the "check releaser"45 of
the PNP, to prove that the respondent received the LBP check due to MGM, and that respondent
herself gave the check to Cruz.46 Ms. Magtira testified that on April 23, 1996, she released the LBP
check payable to the order of MGM, in the amount of ₱2,226,147.26, to the respondent herein,
whom she identified in open court. She claimed that when she released the check to respondent,
she also handed her a voucher, and a logbook also known as the Warrant Register, for
signing.47 When asked why Cruz was allowed to sign for the check, Ms. Magtira explained that this
was allowed since the respondent already gave her the official receipt for the check, and it was
respondent herself who gave the logbook to Cruz for signing.48

The petitioner next presented Edgardo Cruz for the purpose of proving that the payment respondent
was claiming rightfully belonged to Highland Enterprises. Cruz testified that Highland Enterprises
had been an accredited contractor of the PNP since 1975. In 1995, Cruz claimed that the PNPES
was tasked to construct "by administration" a condominium building. This meant that the PNPES had
to do all the work, from the canvassing of the materials to the construction of the building. The
PNPES allegedly lacked the funds to do this and so asked for Highland Enterprises’s help.49 In a
meeting with its accredited contractors, the PNPES asked if the other contractors would agree to the
use of their business name50 for a two percent (2%) commission of the purchase order price to avoid
the impression that Highland Enterprises was monopolizing the supply of labor and materials to the
PNP.51Cruz alleged that on April 23, 1996, he and the respondent went to the PNP Finance Center
to claim the LBP check due to MGM. Cruz said that the respondent handed him the already signed
Receipt No. 001, which he filled up. He claimed that the respondent knew that the LBP check was
really meant for Highland Enterprises as she had already been paid her 2% commission for the use
of her business name in the concerned transaction.52

On September 8, 2003, the RTC rendered its Decision, the dispositive of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of [respondent] and

against [petitioner] ordering the latter to pay [respondent] the following sums:

(1) ₱2,226,147.26 representing the principal sum plus interest at 14% per annum from April
18, 1996 until the same shall have been fully paid;

(2) 20% of the sum to be collected as attorney’s fees; and,

(3) Costs of suit.53

The RTC declared that while Cruz’s testimony seemed to offer a plausible explanation on how and
why the LBP check ended up with him, the petitioner, already admitted in its Answer, and Pre-trial
Brief, that MGM, did in fact deliver the construction materials worth ₱2,288,562.60 to the PNP. The
RTC also pointed out the fact that the petitioner made the same admissions in open court to
expedite the trial, leaving only one issue to be resolved: whether the respondent had been paid or
not. Since this was the only issue, the RTC said that it had no choice but to go back to the
documents and the "documentary evidence clearly indicates that the check subject of this case was
never received by [respondent]."54 In addition, the PNP’s own Warrant Register showed that it was
Edgardo Cruz who received the LBP check, and Receipt No. 001 submitted by the petitioner to
support its claim was not issued by MGM, but by Montaguz Builders, a different entity. Finally, the
RTC held that Cruz’s testimony, which appeared to be an afterthought to cover up the PNP’s
blunder, were irreconcilable with the petitioner’s earlier declarations and admissions, hence, not
credit-worthy.

The petitioner appealed this decision to the Court of Appeals, which affirmed with modification the
RTC’s ruling on September 27, 2006:

WHEREFORE, the decision appealed from is AFFIRMED with the MODIFICATION that the 14%
interest per annum imposed on the principal amount is ordered reduced to 12%, computed from
November 16, 1997 until fully paid. The order for the payment of attorney’s fees and costs of the suit
is DELETED.55

The Court of Appeals, in deciding against the petitioner, held that the petitioner’s admissions and
declarations, made in various stages of the proceedings are express admissions, which cannot be
overcome by allegations of respondent’s implied admissions. Moreover, petitioner cannot controvert
its own admissions and it is estopped from denying that it had a contract with MGM, which MGM
duly complied with. The Court of Appeals agreed with the RTC that the real issue for determination
was whether the petitioner was able to discharge its contractual obligation with the respondent. The
Court of Appeals held that while the PNP’s own Warrant Register disclosed that the payment due to
MGM was received by Cruz, on behalf of Highland Enterprises, the PNP’s contract was clearly with
MGM, and not with Highland Enterprises. Thus, in order to extinguish its obligation, the petitioner
should have directed its payment to MGM unless MGM authorized a third person to accept payment
on its behalf.

The petitioner is now before this Court, praying for the reversal of the lower courts’ decisions on the
ground that "the Court of Appeals committed a serious error in law by affirming the decision of the
trial court."56

THE COURT’S RULING:

This case stemmed from a contract executed between the respondent and the petitioner. While the
petitioner, in proclaiming that the respondent’s claim had already been extinguished, initially insisted
on having fulfilled its contractual obligation, it now contends that the contract it executed with the
respondent is actually a fictitious contract to conceal the fact that only one contractor will be
supplying all the materials and labor for the PNP condominium project.
Both the RTC and the Court of Appeals upheld the validity of the contract between the petitioner and
the respondent on the strength of the documentary evidence presented and offered in Court and on
petitioner’s own stipulations and admissions during various stages of the proceedings.

It is worthy to note that while this petition was filed under Rule 45 of the Rules of Court, the
assertions and arguments advanced herein are those that will necessarily require this Court to re-
evaluate the evidence on record.

It is a well-settled rule that in a petition for review under Rule 45, only questions of law may be raised
by the parties and passed upon by this Court.57

This Court has, on many occasions, distinguished between a question of law and a question of fact.
We held that when there is doubt as to what the law is on a certain state of facts, then it is a question
of law; but when the doubt arises as to the truth or falsity of the alleged facts, then it is a question of
fact.58 "Simply put, when there is no dispute as to fact, the question of whether or not the conclusion
drawn therefrom is correct, is a question of law."59To elucidate further, this Court, in Hko Ah Pao v.
Ting60 said:

One test to determine if there exists a question of fact or law in a given case is whether the Court
can resolve the issue that was raised without having to review or evaluate the evidence, in which
case, it is a question of law; otherwise, it will be a question of fact. Thus, the petition must not involve
the calibration of the probative value of the evidence presented. In addition, the facts of the case
must be undisputed, and the only issue that should be left for the Court to decide is whether or not
the conclusion drawn by the CA from a certain set of facts was appropriate.61(Emphases ours.)

In this case, the circumstances surrounding the controversial LBP check are central to the issue
before us, the resolution of which, will require a perusal of the entire records of the case including
the transcribed testimonies of the witnesses. Since this is an appeal via certiorari, questions of fact
are not reviewable. As a rule, the findings of fact of the Court of Appeals are final and
conclusive62 and this Court will only review them under the following recognized exceptions: (1)
when the inference made is manifestly mistaken, absurd or impossible; (2) when there is a grave
abuse of discretion; (3) when the finding is grounded entirely on speculations, surmises or
conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of facts;
(5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same is contrary to the admissions of both appellant and
appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8)
when the findings of fact are conclusions without citation of specific evidence on which they are
based; (9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by
the parties and which, if properly considered, would justify a different conclusion; and (10) when the
findings of fact of the Court of Appeals are premised on the absence of evidence and are
contradicted by the evidence on record.63

Although petitioner’s sole ground to support this petition was stated in such a manner as to impress
upon this Court that the Court of Appeals committed an error in law, what the petitioner actually
wants us to do is to review and re-examine the factual findings of both the RTC and the Court of
Appeals.

Since the petitioner has not shown this Court that this case falls under any of the enumerated
exceptions to the rule, we are constrained to uphold the facts as established by both the RTC and
the Court of Appeals, and, consequently, the conclusions reached in the appealed decision.

Nonetheless, even if we were to exercise utmost liberality and veer away from the rule, the records
will show that the petitioner had failed to establish its case by a preponderance of
evidence.64 Section 1, Rule 133 of the Revised Rules of Court provides the guidelines in determining
preponderance of evidence:

SECTION 1. Preponderance of evidence, how determined.— In civil cases, the party having the
burden of proof must establish his case by a preponderance of evidence. In determining where the
preponderance or superior weight of evidence on the issues involved lies, the court may consider all
the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their
means and opportunity of knowing the facts to which they are testifying, the nature of the facts to
which they testify, the probability or improbability of their testimony, their interest or want of interest,
and also their personal credibility so far as the same may legitimately appear upon the trial. The
court may also consider the number of witnesses, though the preponderance is not necessarily with
the greater number.

Expounding on the concept of preponderance of evidence, this Court in Encinas v. National

Bookstore, Inc.,65 held:

"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either
side and is usually considered to be synonymous with the term "greater weight of the evidence" or
"greater weight of the credible evidence." Preponderance of evidence is a phrase which, in the last
analysis, means probability of the truth. It is evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.66

The petitioner avers that the Court of Appeals should not have relied "heavily, if not solely"67 on the
admissions made by petitioner’s former counsel, thereby losing sight of the "secret agreement"
between the respondent and Highland Enterprises, which explains why all the documentary
evidence were in respondent’s name.68

The petitioner relies mainly on Cruz’s testimony to support its allegations. Not only did it not present
any other witness to corroborate Cruz, but it also failed to present any documentation to confirm its
story. It is doubtful that the petitioner or the contractors would enter into any "secret agreement"
involving millions of pesos based purely on verbal affirmations. Meanwhile, the respondent not only
presented all the documentary evidence to prove her claims, even the petitioner repeatedly admitted
that respondent had fully complied with her contractual obligations.

The petitioner argued that the Court of Appeals should have appreciated the clear and adequate
testimony of Cruz, and should have given it utmost weight and credit especially since his testimony
was a "judicial admission against interest – a primary evidence which should have been accorded
full evidentiary value."69

The trial court’s appreciation of the witnesses’ testimonies is entitled to the highest respect since it
was in a better position to assess their credibility.70 The RTC held Cruz’s testimony to be "not credit
worthy"71 for being irreconcilable with petitioner’s earlier admissions. Contrary to petitioner’s
contentions, Cruz’s testimony cannot be considered as a judicial admission against his interest as he
is neither a party to the case nor was his admission against his own interest, but actually against
either the petitioner’s or the respondent’s interest. Petitioner’s statements on the other hand, were
deliberate, clear, and unequivocal and were made in the course of judicial proceedings; thus, they
qualify as judicial admissions.72 In Alfelor v. Halasan,73 this Court held that:

A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a
waiver of proof; production of evidence is dispensed with. A judicial admission also removes an
admitted fact from the field of controversy. Consequently, an admission made in the pleadings
cannot be controverted by the party making such admission and are conclusive as to such party, and
all proofs to the contrary or inconsistent therewith should be ignored, whether objection is interposed
by the party or not. The allegations, statements or admissions contained in a pleading are conclusive
as against the pleader. A party cannot subsequently take a position contrary of or inconsistent with
what was pleaded.74

The petitioner admitted to the existence and validity of the Contract of Agreement executed between
the PNP and MGM, as represented by the respondent, on December 11, 1995. It likewise admitted
that respondent delivered the construction materials subject of the Contract, not once, but several
times during the course of the proceedings. The only matter petitioner assailed was respondent’s
allegation that she had not yet been paid. If Cruz’s testimony were true, the petitioner should have
put respondent in her place the moment she sent a letter to the PNP, demanding payment for the
construction materials she had allegedly delivered. Instead, the petitioner replied that it had already
paid respondent as evidenced by the LBP check and the receipt she supposedly issued. This line of
defense continued on, with the petitioner assailing only the respondent’s claim of nonpayment, and
not the rest of respondent’s claims, in its motion to dismiss, its answer, its pre-trial brief, and even in
open court during the respondent’s testimony. Section 4, Rule 129 of the Rules of Court states:

SECTION 4. Judicial Admissions.–An admission, verbal or written, made by a party in the course of
the proceedings in the same case, does not require proof. The admission may be contradicted only
by showing that it was made through palpable mistake or that no such admission was made.
Petitioner’s admissions were proven to have been made in various stages of the proceedings, and
since the petitioner has not shown us that they were made through palpable mistake, they are
conclusive as to the petitioner. Hence, the only question to be resolved is whether the respondent
was paid under the December 1995 Contract of Agreement.

The RTC and the Court of Appeals correctly ruled that the petitioner’s obligation has not been
extinguished. The petitioner’s obligation consists of payment of a sum of money. In order for
petitioner’s payment to be effective in extinguishing its obligation, it must be made to the proper
person. Article 1240 of the Civil Code states:

Art. 1240. Payment shall be made to the person in whose favor the obligation has been constituted,
or his successor in interest, or any person authorized to receive it.

In Cembrano v. City of Butuan,75 this Court elucidated on how payment will effectively extinguish an
obligation, to wit:

Payment made by the debtor to the person of the creditor or to one authorized by him or by the law
to receive it extinguishes the obligation. When payment is made to the wrong party, however, the
obligation is not extinguished as to the creditor who is without fault or negligence even if the debtor
acted in utmost good faith and by mistake as to the person of the creditor or through error induced
by fraud of a third person.

In general, a payment in order to be effective to discharge an obligation, must be made to the proper
person. Thus, payment must be made to the obligee himself or to an agent having authority, express
or implied, to receive the particular payment. Payment made to one having apparent authority to
receive the money will, as a rule, be treated as though actual authority had been given for its receipt.
Likewise, if payment is made to one who by law is authorized to act for the creditor, it will work a
discharge. The receipt of money due on a judgment by an officer authorized by law to accept it will,
therefore, satisfy the debt.76

The respondent was able to establish that the LBP check was not received by her or by her
authorized personnel. The PNP’s own records show that it was claimed and signed for by Cruz, who
is openly known as being connected to Highland Enterprises, another contractor. Hence, absent any
showing that the respondent agreed to the payment of the contract price to another person, or that
she authorized Cruz to claim the check on her behalf, the payment, to be effective must be made to
her.77

The petitioner also challenged the RTC’s findings, on the ground that it "overlooked material fact and
circumstance of significant weight and substance."78 Invoking the doctrine of adoptive admission, the
petitioner pointed out that the respondent’s inaction towards Cruz, whom she has known to have
claimed her check as early as 1996, should be taken against her. Finally, the petitioner contends
that Cruz’s testimony should be taken against respondent as well, under Rule 130, Sec. 32 of the
Revised Rules on Evidence, since she has not presented any "controverting evidence x x x
notwithstanding that she personally heard it."79

The respondent has explained her inaction towards Cruz and Highland Enterprises. Both the RTC
and the Court of Appeals have found her explanation sufficient and this Court finds no cogent reason
to overturn the assessment by the trial court and the Court of Appeals of the respondent’s testimony.
It may be recalled that the respondent argued that since it was the PNP who owed her money, her
actions should be directed towards the PNP and not Cruz or Highland Enterprises, against whom
she has no adequate proof.80 Respondent has also adequately explained her delay in filing an action
against the petitioner, particularly that she did not want to prejudice her other pending transactions
with the PNP.81

The petitioner claims that the RTC "overlooked material fact and circumstance of significant weight
and substance,"82 but it ignores all the documentary evidence, and even its own admissions, which
are evidence of the greater weight and substance, that support the conclusions reached by both the
RTC and the Court of Appeals.

We agree with the Court of Appeals that the RTC erred in the interest rate and other monetary sums
awarded to respondent as baseless. However, we must further modify the interest rate imposed by
the Court of Appeals pursuant to the rule laid down in Eastern Shipping Lines, Inc. v. Court of
Appeals83:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-
delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII
on "Damages" of the Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time
it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per
annum to be computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an

interest on the amount of damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or
damages except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code)
but when such certainty cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on
the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above,
shall be 12% per annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit.84

Since the obligation herein is for the payment of a sum of money, the legal interest rate to be
imposed, under Article 2209 of the Civil Code is six percent (6%) per annum:

Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in
delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of
the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent
per annum.

Following the guidelines above, the legal interest of 6% per annum is to be imposed from November
16, 1997, the date of the last demand, and 12% in lieu of 6% from the date this decision becomes
final until fully paid.
lawphi 1

Petitioner’s allegations of sham dealings involving our own government agencies are potentially
disturbing and alarming. If Cruz’s testimony were true, this should be a lesson to the PNP not to
dabble in spurious transactions. Obviously, if it can afford to give a 2% commission to other
contractors for the mere use of their business names, then the petitioner is disbursing more money
than it normally would in a legitimate transaction. It is recommended that the proper agency
investigate this matter and hold the involved personnel accountable to avoid any similar occurrence
in the future.

WHEREFORE, the Petition is hereby DENIED and the Decision of the Court of Appeals in C.A. G.R.
CV No. 80623 dated September 27, 2006 is AFFIRMED with the MODIFICATION that the legal
interest to be paid is SIX PERCENT (6%) per annum on the amount of ₱2,226,147.26, computed
from the date of the last demand or on November 16, 1997. A TWELVE PERCENT (12%) per
annum interest in lieu of SIX PERCENT (6%) shall be imposed on such amount upon finality of this
decision until the payment thereof.

SO ORDERED.
CITIBANK v. EFREN S. TEODORO, GR No. 150905, 2003-09-23
Facts:
Petitioner operates a credit card system... through which it extends credit accommodations
to its cardholders
Respondent Efren S. Teodoro was one such cardholder.
Respondent made various purchases through his credit card.
he was billed by petitioner for those purchases,... tendered various payments.
the obligations of respondent stood at P191,693.25
Several times it demanded payment from him, but he refused to pay, claiming that the
amount demanded did not correspond to his... actual obligations.
petitioner to file a Complaint for collection
During the trial, petitioner presented several sales invoices or charge slips... mere
photocopies of the originals, the invoices were marked in evidence as Exhibits... trial court
deemed them sufficient proof of his purchases with the use of the credit card
Ordering [respondent] to pay [petitioner]... respondent appealed the MTC judgment to the
RTC of Makati City
RTC affirmed the MTC Decision in toto.
Issues:
issue of the case according to the CA was whether the photocopies of the sales invoices or
charge slips, marked as Exhibits "F" to "F-4," were competent proofs of the obligations of
respondent.
Ruling:
Before secondary evidence may be admitted to prove the contents of original documents,
the offeror must prove the due execution and the subsequent loss or unavailability of the
original.
The original copies of the sales invoices are the best evidence to prove the alleged
obligation. Photocopies thereof are mere secondary evidence. As such, they are
inadmissible because petitioner, as the offeror, failed to prove any of the exceptions
provided under Section
3[13] of Rule 130 of the Rules of Court, as well s th... conditions of their admissibility.
Because of the inadmissibility of the photocopies in the absence of the originals,
respondent's obligation was not established.
In the present case, the existence of the original sales invoices was established by the
photocopies and the testimony of Hernandez. Petitioner, however, failed to prove that the
originals had been lost or could not be produced in court after reasonable diligence... and
good faith in searching for them.
G.R. No. 148893 July 12, 2006

SKIPPERS UNITED PACIFIC, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, GERVACIO ROSAROSO, and COURT OF
APPEALS,respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Respondent Gervacio Rosaroso* was signed up as a Third Engineer with Nicolakis Shipping, S.A., a
foreign firm, through its recruitment and manning agency, herein petitioner Skippers United Pacific,
Inc. The term of the contract was for one year, starting July 10, 1997 to July 8, 1998, and with a
salary of US$800.00 and other benefits. Barely a month after boarding the vessel M/V Naval Gent
on July 15, 1997, respondent was ordered to disembark in Varna, Bulgaria, on August 7, 1997, and
repatriated to the Philippines. Immediately after arriving in the Philippines, respondent filed a
complaint for illegal dismissal and monetary claims on August 18, 1997.1

In a Decision dated August 11, 1998, the Labor Arbiter found that respondent was illegally
dismissed:

WHEREFORE, in the light of the foregoing, judgment is rendered finding the dismissal of
complainant illegal. An order is issued directing the respondents to pay complainant the
amount of US$2,400.00 or its Philippine peso equivalent of P100,000.00 as separation pay
plus the amount of US$186.69 representing complainant’s unpaid salary for seven (7) days
or in the Philippine peso equivalent of P7,840.98 or the total amount of P108,640.98. On top
of said amount, attorney’s fees of P5,000.00 is also awarded.

SO ORDERED.2

On appeal, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s Decision
and dismissed petitioner’s appeal per its Decision dated February 26, 1999.3 Petitioner sought
reconsideration thereof but its motion was denied by the NLRC in its Resolution dated May 27,
1999.4

Thus, petitioner filed with the Court of Appeals (CA) a special civil action for certiorari under Rule 65
of the Rules of Court, docketed as CA-G.R. SP No. 53490.

On May 7, 2001, the CA5 dismissed the petition and affirmed in toto the NLRC Decision dated
February 26, 1999.6Petitioner filed a motion for reconsideration which was denied by the CA in its
Resolution dated July 3, 2001.7

Hence, the present petition for review under Rule 45 of the Rules of Court with the following
assignment of errors:

FIRST ASSIGNMENT OF ERROR

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT PETITIONER

ILLEGALLY DISMISSED THE PRIVATE RESPONDENT.

SECOND ASSIGNMENT OF ERROR

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN AWARDING PRIVATE

RESPONDENT BACKWAGES EQUIVALENT TO HIS THREE (3) MONTHS SALARY.8

Petitioner’s main contention is that the CA, the NLRC and the Labor Arbiter erred in not giving "full
evidentiary value" to the telexed Chief Engineer’s Report dated September 10, 1997, which specified
the causes of respondent’s dismissal, quoted as follows:

TO: SKIPPERS MNL

CC: SKIPPERS PIRAEUS
 FM: MV NAVAL GENT
DT: SEPT. 10, 1997

DURING SHIP REPAIR AT PERAMA DD. 18/07-31/07/97 OUR ATTENDING SUPT.

ENGINEERS CONSTANTLY OBSERVING ALL PERSONNELS ABILITY AND ATTITUDE
WITH REGARDS TO OUR TECHNICAL CAPABILITY AND BEHAVIOURS WITH
EMPHASY [SIC] ON DISCIPLINE. IT IS ONLY UNFORTUNATE THAT THEY NOTICED 3/E
G. ROSAROSO AS BEING SLACK AND NOT CARING OF HIS JOB AND DUTIES BEING
HIRED AS THIRD ENGR OFFICER, TO THE FULLEST BEYOND THEIR EXPECTATION.
AFTER TOO MUCH OF CONSIDERATION AND DELIBERATION HAVING HIM
CONSTANTLY ADVISED BY 2/E F. DIAMOS ASKING FOR HIS COOPERATION TO
WORK AND HELP IN THE ONGOING ENORMOUS REPAIRS. BUT FAILED TO HEED
AND REFUSED TO BE MOTIVATED. WE HAVE SEEKED [SIC] ADVISE FROM YOUR
OFFICE VIA PHONE, SKIPPERS PIRAEUS THRU CAPT. KAMPANIS AND THE PORT
CAPT OF NICOLAKIS SHIPPING CAPT. PAPASTILIANOS, OF WHAT TO BE DONE. THE
OWNERS RECOMMENDATION WAS TO REPLACED [SIC] HIM ON THE FOLLOWING
REASONS:

1) LACK OF DISCIPLINE – HE RESENTED DISCIPLINE. HE IS SEEN BY SUPT. ENGRS.

ON SEVERAL OCCASION DURING WORKING HOURS STAYING ON PORTSIDE DECK
SMOKING AND HAVING SNACKS. MANY TIMES HE IS INSIDE THE GALLEY CHATTING
WITH CHIEF COOK DURING WORKING HOURS AND HAVING SNACKS. HE TENDS TO
BE FREQUENTLY LATE FOR DUTY/WORK AND IS GENERALLY UNRELIABLE.

2) IRRESPONSIBLE - HE HAS NOT SHOWN A HIGH SENSE OF RESPONSIBILITY AS

3/ENGR. HE IS CAREFREE IN DISCHARGING HIS DUTIES IN MAINTAINING THE
ASSIGNED MACHINERIES, SUCH AS BOILER, DIESEL GENERATORS, STARTING AIR
COMPRESSORS AND VARIOUS PUMPS. HE CANNOT BE TRUSTED TO DO HIS JOB
UNLESS SUPERVISED PERPETUALLY.

3) LACK OF DILIGENCE - HE REQUIRES CONSTANT PUSHING AND HAS TO BE

WATCHED MOST OF THE TIME. LACK OF INITIATIVE REGARDLESS OF CONSTANT
MOTIVATION.

SGD. JEROME A. RETARDO

CHIEF ENGR9

According to petitioner, the foregoing Report established that respondent was dismissed for just
cause. The CA, the NLRC, and the Labor Arbiter, however, refused to give credence to the Report.
They are one in ruling that the Report cannot be given any probative value as it is uncorroborated by
other evidence and that it is merely hearsay, having come from a source, the Chief Engineer, who
did not have any personal knowledge of the events reported therein.

The Labor Arbiter ruled that the charges against respondent are bare allegations, unsupported by
corroborating evidence. The Labor Arbiter stated that if respondent indeed committed the alleged
infractions, then these should have, at the very least, been entered into the seaman’s book, or that a
copy of the vessel’s logbook presented to prove the same.10 The Labor Arbiter’s findings were
sustained by the NLRC.11

The CA upheld these findings, succinctly stating as follows:

Verily, the report of Chief Engineer Retardo is utterly bereft of probative value. It is not
verified by an oath and, therefore, lacks any guarantee of trustworthiness. It is furthermore –
and this is crucial – not sourced from the personal knowledge of Chief Engineer Retardo. It is
rather based on the perception of "ATTENDING SUPT. ENGINEERS CONSTANTLY
OBSERVING ALL PERSONNELS ABILITY AND ATTITUDE WITH REGARDS TO OUR
TECHNICAL CAPABILITY AND BEHAVIOURS WITH EMPHASY (sic) ON DISCIPLINE"
who "NOTICED 3/E ROSAROSO AS BEING SLACK AND NOT CARING OF HIS JOB AND
DUTIES X X X ." Accordingly, the report is plain hearsay. It is not backed up by the affidavit
of any of the "Supt." Engineers who purportedly had first-hand knowledge of private
respondent’s supposed "lack of discipline," "irresponsibility" and "lack of diligence" which
caused him to lose his job. x x x 12
The Court finds no reason to reverse the foregoing findings.

To begin with, the question of whether respondent was dismissed for just cause is a question of fact
which is beyond the province of a petition for review on certiorari. It is fundamental that the scope of
the Supreme Court’s judicial review under Rule 45 of the Rules of Court is confined only to errors of
law. It does not extend to questions of fact. More so in labor cases where the doctrine applies with
greater force.13

The Labor Arbiter and the NLRC have already determined the factual issues, and these were
affirmed by the CA. Thus, they are accorded not only great respect but also finality,14 and are
deemed binding upon this Court so long as they are supported by substantial evidence.15 A heavy
burden rests upon petitioner to convince the Court that it should take exception from such a settled
rule.16

More importantly, the finding that respondent was illegally dismissed is supported, not only by the
evidence on record, but by jurisprudence as well.

The rule in labor cases is that the employer has the burden of proving that the dismissal was for a
just cause; failure to show this would necessarily mean that the dismissal was unjustified and,
therefore, illegal.17 The two-fold requirements for a valid dismissal are as follows: (1) dismissal must
be for a cause provided for in the Labor Code, which is substantive; and (2) the observance of notice
and hearing prior to the employee’s dismissal, which is procedural.18

The only evidence relied upon by petitioner in justifying respondent’s dismissal is the Chief
Engineer’s Report dated September 10, 1997. The question that arises, therefore, is whether the
Report constitutes substantial evidence proving that respondent’s dismissal was for cause.

Substantial evidence is defined as that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion.19 As all three tribunals found, the Report cannot be given
any weight or credibility because it is uncorroborated, based purely on hearsay, and obviously
merely an afterthought. While rules of evidence are not strictly observed in proceedings before
administrative bodies,20 petitioner should have offered additional proof to corroborate the statements
described therein. Thus, in Ranises v. National Labor Relations Commission,21 involving a seafarer
who was repatriated to the Philippines for allegedly committing illegal acts amounting to a breach of
trust, as based on a telex dispatch by the Master of the M/V Southern Laurel, the Court rejected the
weight given by the NLRC on the telex, to wit:

Unfortunately, the veracity of the allegations contained in the aforecited telex was never
proven by respondent employer. Neither was it shown that respondent employer exerted any
effort to even verify the truthfulness of Capt. Sonoda’s report and establish petitioner’s
culpability for his alleged illegal acts. Worse, no other evidence was submitted to corroborate
the charges against petitioner.

Similarly in this case, petitioner should have presented other evidence to corroborate its claim that
respondent’s acts or omissions aboard the vessel M/V Naval Gent warrant his immediate
repatriation. Moreover, the fact that the Report was accomplished on September 10, 1999, or more
than a month after respondent was repatriated, makes it all the more suspect, and was obviously
made to make it appear that there were valid reasons for respondent’s dismissal.

Another analogous case worth citing is Pacific Maritime Services, Inc. v. Ranay.22 This case involved
two seafarers repatriated to the Philippines for committing acts on board the vessel M/V Star
Princess, which acts amounted to serious misconduct, insubordination, non-observance of proper
hours of work and damage to the laundry of the vessel’s crew and passengers. In support of its claim
that the respondents were validly dismissed, the petitioners presented its lone evidence, a telefax
transmission purportedly executed and signed by a certain Armando Villegas, detailing the incidents
which prompted the termination of private respondents’ services. The Court, however, ruled that the
telefax transmission is not sufficient evidence, viz.:

Petitioners’ reliance on the telefax transmission signed by Armando Villegas is woefully

inadequate in meeting the required quantum of proof which is substantial evidence. For one
thing, the same is uncorroborated. Although substantial evidence is not a function of quantity
but rather of quality, the peculiar environmental circumstances of the instant case demand
that something more should have been proffered. According to the account of Villegas, it
appears that the incidents he was referring to transpired with the knowledge of some crew
 members. The alleged assault by Gerardo Ranay on Villegas, for instance, was supposedly
witnessed by at least four other crew members. Surprisingly, none of them was called upon
to testify, either in person or through sworn statements. Worse, Villegas himself who omitted
some vital details in his report, such as the time and date of the incidents referred to, was not
even presented as witness so that private respondents and the POEA hearing officer could
have been given an opportunity to cross-examine and propound clarificatory questions
regarding matters averred by him in the telefax transmission. Moreover, although signed, the
same was not under oath and, therefore, of dubious veracity and reliability although
admissible. Likewise, the motive is suspect and the account of the incidents dangerously
susceptible to bias since it came from a person with whom private respondents were at odds.
All told, petitioners failed to make up for the weakness of the evidence upon which they
confidently anchored the merits of their case.

Likewise, the belated submission of the report by Villegas, long after the incidents referred to
had taken place and after the complaint had been lodged by private respondents, weighs
heavily against its credibility. Petitioners did not show any convincing reason why said report
was only accomplished on September 22, 1989. They merely argued that as in criminal
cases, the witness is usually reluctant to report an incident. At any rate, with present
technology, a ship out at sea is not so isolated that its captain cannot instantly communicate
with its office. It would appear that the report, filed several months later, is but an
afterthought.

Therefore, the CA was correct in affirming the findings and conclusions of both the Labor Arbiter and
the NLRC.

Petitioner maintains that it complied with the requisites of procedural due process. According to
petitioner, respondent was constantly reprimanded and rebuked for his acts. Petitioner also
contends that the ship’s Master is allowed to dismiss an erring seafarer without hearing under
Section 17, paragraph D of the Philippine Overseas Employment Administration (POEA) Standard
Employment Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going
Vessels. Paragraph D, Section 17, however, is not applicable in respondent’s case.

Section 17 sets forth the disciplinary procedures against erring seafarers, to wit:

Section 17. DISCIPLINARY PROCEDURES

The Master shall comply with the following disciplinary procedures against an erring
seafarer:

A. The Master shall furnish the seafarer with a written notice containing the following:

1. Grounds for the charges as listed in Section 31 of this Contract.

2. Date, time and place for a formal investigation of the charges against the seafarer
concerned.

B. The Master or his authorized representative shall conduct the investigation or hearing,
giving the seafarer the opportunity to explain or defend himself against the charges. An entry
on the investigation shall be entered into the ship’s logbook.

C. If, after the investigation or hearing, the Master is convinced that imposition of a penalty is
justified, the Master shall issue a written notice of penalty and the reasons for it to the
seafarer, with copies furnished to the Philippine agent.

D. Dismissal for just cause may be effected by the Master without furnishing the seafarer
with a notice of dismissal if doing so will prejudice the safety of the crew or the vessel. This
information shall be entered in the ship’s logbook. The Master shall send a complete report
to the manning agency substantiated by witnesses, testimonies and any other documents in
support thereof.

The foregoing provision was explained in Skippers Pacific, Inc. v. Mira,23 as follows:
 Note that under Section 17 of what is termed the Standard Format, the "two - notice rule" is
indicated. An erring seaman is given a written notice of the charge against him and is
afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a
written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is
only in the exceptional case of clear and existing danger to the safety of the crew or
vessel that the required notices are dispensed with; but just the same, a complete
report should be sent to the manning agency, supported by substantial evidence of
the findings. (Emphasis supplied)

There is nothing on record that shows that furnishing respondent with a notice of dismissal will pose
a clear and present danger to the vessel and its crew. And even if the Master was justified in
dispensing with the required notice, still, it was essential that a complete report, substantiated by
witnesses, testimonies and any other documents in support thereof, was sent to the manning
agency. The record of this case is bereft of any such report and supporting documents. Instead,
respondent was verbally ordered to disembark the vessel and repatriated to the Philippines without
being told of the reasons why.24 Clearly, respondent was not accorded due process.

Finally, petitioner laments the award of backwages equivalent to three months salary in favor of
respondent. Petitioner argues that there is no basis for such award. The Court is not persuaded.

A seafarer is not a regular employee as defined in Article 280 of the Labor Code. Hence, he is not
entitled to full backwages and separation pay in lieu of reinstatement as provided in Article 279 of
the Labor Code.25 Seafarers are contractual employees whose rights and obligations are governed
primarily by the POEA Standard Employment Contract for Filipino Seamen, the Rules and
Regulations Governing Overseas Employment, and, more importantly, by Republic Act (R.A.) No.
8042, or the Migrant Workers and Overseas Filipinos Act of 1995.26 While the POEA Standard
Employment Contract for Filipino Seamen and the Rules and Regulations Governing Overseas
Employment do not provide for the award of separation or termination pay,27 Section 10 of R.A. 8042
provides for the award of money claims in cases of illegal dismissals, thus:

Section 10. Money Claims. – x x x

xxx

In case of termination of overseas employment without just, valid or authorized cause as

defined by law or contract, the worker shall be entitled to the full reimbursement of his
placement fee with interest at twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.

xxx

The award of salaries for the unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less, is not an award of backwages or separation pay,
but a form of indemnity for the worker who was illegally dismissed. The Labor Arbiter may have
mislabeled it as separation pay, nonetheless, the award was made in conformity with law.

However, in the interest of substantial justice and to avoid further litigation on the matter,28 it must be
stressed that the peso amounts equivalent to the dollar awards of the Labor Arbiter can not be
enforced for being contrary to law. The peso equivalent of the monetary award should be computed
at the peso to dollar exchange rate prevailing at the time of payment,29 as provided in Republic Act
No. 8183, entitled "An Act Repealing Republic Act Numbered Five Hundred Twenty-Nine, As
Amended, Entitled ‘An Act to Assure the Uniform Value of Philippine Coin and Currency’," which
provides:

SECTION 1. All monetary obligations shall be settled in the Philippine currency which is legal
tender in the Philippines. However, the parties may agree that the obligation or transaction
shall be settled in any other currency at the time of payment.

Except for the foregoing clarification, the Court finds no cogent reason to grant this petition.

WHEREFORE, the petition is DENIED. The Decision dated May 7, 2001 and Resolution dated July
3, 2001 rendered by the Court of Appeals in CA-G.R. SP No. 53490 are AFFIRMED with
the MODIFICATION that the monetary awards of US$2,400.00 and US$186.69 made by the Labor
Arbiter in its Decision dated August 11, 1998, should be payable in its equivalent in Philippine
currency computed at the prevailing rate of exchange at the time of payment.

Let the heirs of deceased respondent represented by his surviving wife, Carmen M. Rosaroso,
residing at Hills View, Mohon II, Tisa, Cebu City, who are hereby deemed substituted as
respondents, be sent a copy of herein Decision.

SO ORDERED.
OMBUDSMAN SIMEON V. MARCELO v. LEOPOLDO F. BUNGUBUNG, GR No. 175201,
2008-04-23
Facts:
The Ombudsman found respondent
Leopoldo F. Bungubung (Bungubung) administratively liable for grave misconduct,
dismissing him from the service and imposing the accessory penalties of cancellation of
eligibility, forfeiture of retirement benefits, and his perpetual disqualification from
reemployment in... government service.
Bungubung is the Manager of the Port District Office (PDO) of Manila, Philippine Ports
Authority (PPA), South Harbor, Port Area, Manila. He is also the Chairman of the Ports
District Security Bids and Awards Committee (PDSBAC) of the PPA.
Roberto C. Doromal (Doromal), the President of Combat Security & Executive Protection
Agency (CSEPA), a security agency that participated in the bidding for security services for
the PPA, filed a Complaint-Affidavit[3] dated 7
September 2001 against Bungubung before PPA Resident Ombudsman... my aforesaid
wife was instrumental in negotiating and concluding a contract for Security Services with the
Philippine Ports Authority (PPA),... a service contract was signed by PPA
Bungubung and other PPA officials asked for certain amounts from my said wife as "balato"
for winning the award... when my late wife died on May 3, 2000, the same arrangement was
pursued and carried over through the period that I was already the one dealing with PPA,...
espondent LEOPOLDO F. BUNGUBUNG, Port District Manager, Manila Port District,
Philippine Ports Authority, is hereby found liable for Grave Misconduct and, as such, is
DISMISSED from the service. The penalty of dismissal shall carry with it the accessory
penalties of... cancellation of eligibility, forfeiture of retirement benefits, and [Bungubung's]
perpetual disqualification from reemployment in the government service.
On 30 June 2006, the Court of Appeals issued a Decision in CA-G.R. SP No. 89689 ruling
in Bungubung's favor, and reversing and setting aside the Orders dated 11 January 2005
and 28 April 2005 of the Ombudsman. It further absolved Bungubung from liability for the
charge of... grave misconduct, finding no substantial evidence that Bungubung committed
the same.
There is merit in the petition.
there is absence of substantial evidence to hold [Bungubung] liable for grave misconduct.
[Doromal] and his witness failed to appear at the preliminary conference on February 21,
2005 to attest to the truth of the contents of their affidavits. For such failure, their affidavits
are inadmissible as they are hearsay evidence.
While rules of procedure do not strictly apply to administrative cases as long as defendant's
right to due process is not violated, its liberal application in administrative cases does not
allow admission of hearsay evidence, i.e. affidavits not identified by affiants, as this... would
violate the constitutional right of petitioner to due process and his substantive right not to be
adjudged guilty on the basis of hearsay evidence.
fallo of the Court of Appeals' 30 June 2006 Decision reads:
WHEREFORE, the petition for review is GRANTED and GIVEN DUE COURSE. The
Orders[17] of the Ombudsman dated January 11, 200[5] and April 28, 200[5] are reversed
and set aside and a new one issued absolving petitioner from... liability for the charge of
grave misconduct.[18
Issues:
ADMINISTRATIVE
THE RELIANCE BY THE OMBUDSMAN ON THE AFFIDAVITS OF ROBERTO DOROMAL
AND HIS WITNESS IN DETERMINING [BUNGUBUNG]'S ADMINISTRATIVE LIABILITY
WAS PROPER. IT DID NOT DEPRIVE [BUNGUBUNG] OF DUE PROCESS;
II.
THE FINDING OF ADMINISTRATIVE OFFENSE FOR GRAVE MISCONDUCT AGAINST
[BUNGUBUNG] IS SUPPORTED BY SUBSTANTIAL EVIDENCE;
III.
AS CONSEQUENTLY HELD BY THE SUPREME COURT, THE FINDINGS OF THE
OMBUDSMAN DESERVE GREAT WEIGHT, AND MUST BE ACCORDED FULL
RESPECT AND CREDIT.
Ruling:
The present Petition must fail.
the fundamental rule in administrative proceedings is that the complainant has the burden of
proving, by substantial evidence, the allegations in his complaint.
Substantial evidence,... Being guided accordingly by the aforementioned evidentiary rules
and jurisprudence, this Court finds that the evidence on record in the present case does not
constitute substantial evidence of Bungubung's administrative culpability for grave
misconduct.
Within the field of administrative law, while strict rules of evidence are not applicable to
quasi-judicial proceedings, nevertheless, in adducing evidence constitutive of substantial
evidence, the basic rule that mere allegation is not evidence cannot be disregarded.[37]
The Ombudsman chose to give more credence to Doromal's allegations and evidence when
it found that Bungubung took advantage of his position as Chairman of the PSBAC and
used it as leverage in soliciting cash and a Mitsubishi Pajero van from the bidders as a
consideration for the... award of the PPA security service contract. However, Doromal's
evidence is hardly substantive
The Ombudsman chose to give more credence to Doromal's allegations and evidence when
it found that Bungubung took advantage of his position as Chairman of the PSBAC and
used it as leverage in soliciting cash and a Mitsubishi Pajero van from the bidders as a
consideration for the... award of the PPA security service contract. However, Doromal's
evidence is hardly substantive.
The Court of Appeals therefore took proper notice of Doromal's Ex-Parte Motion to
Withdraw the Affidavit-Complaint and Affidavit of Desistance since they cast a different light
on the evidence previously considered by the Ombudsman.
R. No. 172873 March 19, 2010

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
ROLDAN MORALES y MIDARASA, Appellant.

DECISION

DEL CASTILLO, J.:

The requirement of proof beyond a reasonable doubt has this vital role in our criminal procedure for
cogent reasons. The accused during a criminal prosecution has at stake interest of immense
importance, both because of the possibility that he may lose his liberty upon conviction and because
of the certainty that he would be stigmatized by the conviction. Accordingly, a society that values the
good name and freedom of every individual should not condemn a man for commission of a crime
when there is reasonable doubt about his guilt.1 Due process commands that no man shall lose his
liberty unless the Government has borne the burden of convincing the factfinder of his guilt. To this
end, the reasonable-doubt standard is indispensable, for it ‘impresses on the trier of fact the
necessity of reaching certitude of the facts in issue.2

Moreover, use of the reasonable-doubt standard is indispensable to command the respect and
confidence of the community in applications of criminal law. It is critical that the moral force of
criminal law not be diluted by a standard of proof that leaves people in doubt whether innocent men
are being condemned. It is also important in our free society that every individual going about his
ordinary affairs has confidence that his government cannot adjudge him guilty of a criminal offense
without convincing a proper factfinder of his guilt with utmost certainty.3

Lest there remain any doubt about the constitutional stature of the reasonable-doubt standard, we
explicitly hold that the Due Process Clause protects the accused against conviction except upon
proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is
charged.4

On appeal is the Decision5 of the Court of Appeals (CA) promulgated on April 24, 2006 affirming in
toto the Decision6 of the Regional Trial Court (RTC) of Quezon City, Branch 103 finding appellant
Roldan Morales y Midarasa guilty of the crimes of possession and sale of dangerous drugs.

Factual Antecedents

Appellant was charged in two separate Informations before the RTC with possession and sale of
methylamphetamine hydrochloride (shabu), to wit:

Criminal Case No. Q-03-114256

That on or about the 2nd day of January, 2003 in Quezon City, Philippines, the said accused not
being authorized by law to possess or use any dangerous drug, did then and there, willfully,
unlawfully and knowingly have in her/his/their possession and control, zero point zero three (0.03)
grams of methylamphetamine hydrochloride, a dangerous drug.

CONTRARY TO LAW.7

Criminal Case No. Q-03-114257

That on or about the 2nd day of January, 2003, in Quezon City, Philippines, the said accused, not
being authorized by law to sell, dispense, deliver, transport or distribute any dangerous drug, did,
then and there, willfully and unlawfully sell, dispense, deliver, transport, distribute or act as broker in
the said transaction, zero point zero three (0.03) gram of methylamphetamine hydrochloride, a
dangerous drug.

CONTRARY TO LAW.8

Upon arraignment, appellant, assisted by counsel, pleaded not guilty to both charges read in Filipino,
a language known and understood by him.9 On motion of the City Prosecutor, the cases were
consolidated for joint trial.10 Trial on the merits ensued thereafter.
The testimonies of PO1 Eduardo Roy (PO1 Roy) and PO3 Armando Rivera (PO3 Rivera) were
presented by the prosecution:

PO1 Roy testified that on January 2, 2003, at about 2:00 p.m., he was on duty at Police Station 9
where he made a pre-operation report on the buy-bust operation to be conducted on the herein
appellant that same afternoon.11 He then proceeded to Brgy. San Vicente, Quezon City with PO3
Rivera for the operation.12 At a point near Jollibee, they met the informant who, upon seeing the
subject appellant, went with him to meet PO1 Roy.13 After being introduced to the appellant as a
buyer of "piso" worth of "shabu", appellant immediately produced a sachet containing the alleged
drug. When appellant received the marked money amounting to ₱100.00,14 PO1 Roy raised his left
hand, at which point his back-up officer, PO3 Rivera appeared and immediately arrested the
appellant.15 The appellant was immediately brought to the Police Station for investigation, while the
two sachets of "shabu" and aluminum foil discovered on the said appellant were brought to the
Crime Laboratory for examination.16

PO3 Rivera testified that he was the back-up officer of PO1 Roy, the poseur-buyer in the buy-bust
operation conducted against the appellant in the afternoon of January 2, 2003.17 In preparation for
the said operation, he conducted a short briefing and recorded the particulars of the operation they
were about to carry out: the place of the operation which is at the parking lot of Jollibee Philcoa; the
identification of the suspect as the appellant; and the preparation of the buy-bust money to be
used.18 With respect to the buy-bust money, he prepared one ₱50.00 bill, two ₱20.00 bills and one
₱10.00 bill, by making the appropriate marking on the top portion of each bill and recording their
respective serial numbers.19 Later that afternoon, police officers proceeded to the meeting place.
PO3 Rivera positioned himself in a parked vehicle20 about 20 meters from the situs of the
transaction.21 He thus had a clear view of the appellant with the informant and PO1 Roy.22 Shortly
thereafter, he saw PO1 Roy make the pre-arranged signal at which point he approached the
appellant to arrest him.23 He recovered the marked money from the appellant and proceeded to frisk
the latter.24 Upon conducting the body search, he found another sachet which he suspected to be
"shabu" and two aluminum foils. Appellant was brought to the Police Station for detention, while the
items seized from him were brought to the Crime Laboratory for examination.25 The two sachets
tested positive for Methylamphetamine Hydrochloride (shabu) while the aluminum foil sheets tested
negative of the aforementioned substance.26

Both PO1 Roy and PO3 Rivera identified a Joint Affidavit dated January 3, 2003 during their
respective testimonies, which they acknowledged to have executed subsequent to the buy-bust
operation.27

The defense presented the testimonies of Joaquin Artemio Marfori, Arsenia Morales and the
appellant:

Appellant denied the charges against him.28 He testified that he is a resident of Dolores, Quezon
where he worked in a fertilizer store.29 He was in Manila at that time to bring money for his parents
who live at Cruz na Ligas.30 As his mother did not give him enough money for his fare back to
Quezon, he sidelined as a parking attendant at Philcoa in order to earn the balance of his bus
fare.31 However, sometime that afternoon, two male persons in civilian clothes suddenly approached
him and his co-attendant, identified themselves as policemen and poked their guns at them.32 The
said policemen handcuffed them and proceeded to frisk them.33 He averred that nothing was found
on him and yet the policemen still brought him to the police station.34 He denied the allegation made
against him that he sold, much less possessed, the "shabu" subject of this action.35 He further
testified that in the tricycle on the way to the police station, PO1 Roy took out a plastic of "shabu"
from his (PO1 Roy’s) pocket and once at the station, the said policeman showed it to the desk officer
and claimed that the plastic sachet was found on the appellant.36

He likewise denied having received the buy-bust money and claimed that the ₱50.00 bill and the two
₱20.00 bills, totaling ₱90.00, were given to him by his mother for his bus fare to Quezon.37 He
disclaimed any knowledge of the ₱10.00 bill.38 He further testified that he personally knew PO3
Rivera prior to the arrest, since his first cousin and PO3 Rivera had a quarrel which he had no
involvement whatsoever.39 He noted the fact that it was PO3 Rivera who arrested him.40

Witness Joaquin Artemio Marfori testified that he is the employer of the appellant in his agricultural
and poultry supply store in Babayan, Calamba, Laguna.41 He further stated that he allowed the
appellant to go on vacation on December 12, 2003 to celebrate the New Year with his family in
Manila.42 However, the appellant failed to report back for work at the start of the New Year.43
Finally, witness Arsenia Morales (Arsenia) corroborated the testimony of her son that she gave him
₱90.00, consisting of one ₱50.00 bill and two ₱20.00 bills as bus fare back to Laguna where he
worked.44 Thinking that her son was already on his way home, she was surprised to receive a call
from her daughter informing her that her son, the appellant, was arrested for possession and sale of
"shabu".45

Ruling of the Regional Trial Court

On April 29, 2004, the trial court rendered a Decision finding the appellant guilty beyond reasonable
doubt of illegal possession and illegal sale of dangerous drugs. The dispositive portion of the said
Decision reads:

WHEREFORE, in view of the foregoing disquisition, judgment is hereby rendered finding the
accused ROLDAN MORALES y Midarasa, GUILTY beyond reasonable doubt in Criminal Case No.
Q-03-114257 for violation of Section 5, Article II, R.A. [No.] 9165 for drug pushing [of] zero point zero
three (0.03) gram of white crystalline substance containing Methylamphetamine hydrochloride and is
hereby sentenced to suffer Life Imprisonment and to pay a fine of Five Hundred Thousand
(₱500,000.00) pesos.

The Court likewise finds the accused ROLDAN MORALES y Midarasa GUILTY beyond reasonable
doubt in Criminal Case No. Q-03-114256 for violation of Section 11, Article II, R.A. [No.] 9165 for
drug possession x x x of zero point zero three (0.03) gram of white crystalline substance containing
Methylamphetamine hydrochloride and is hereby sentenced to suffer an imprisonment term of
Twelve (12) Years and One (1) Month to Thirteen (13) Years and to pay a fine of Three Hundred
Fifty Thousand (₱350,000.00) Pesos.

The sachets of shabu subject of these cases are ordered transmitted to the PDEA thru Dangerous
Drugs Board for proper disposition after this decision becomes final.

SO ORDERED.46

The trial court held that the prosecution witnesses positively identified the appellant as the person
who possessed and sold to the poseur-buyer the "shabu" subject of this case, during the buy-bust
operation conducted in the afternoon of January 2, 2003.47 The trial court found that from the
evidence presented, the prosecution was able to sufficiently establish the following: (1) the fact of
the buy-bust operation conducted in the afternoon of January 2, 2003 at the parking lot of Jollibee
Philcoa which led to the arrest of the appellant; and (2) the corpus delicti, through the presentation in
court of the two sachets of white substance which was confirmed by the Chemistry Report to be
methylamphetamine hydrochloride ("shabu"), found in the possession of and sold by the appellant.48

Ruling of the Court of Appeals

The CA affirmed the Decision of the trial court in toto. It found that contrary to the allegations of the
appellant, there was no instigation that took place.49 Rather, a buy-bust operation was employed by
the police officers to apprehend the appellant while in the act of unlawfully selling drugs.50 The
appellate court further held that what is material in a prosecution for illegal sale of prohibited drugs is
the proof that the transaction or sale actually took place, coupled with the presentation in court of the
corpus delicti.51 Stripped of non-essentials, the CA summarized the antecedent facts of the case as
follows:

PO1 Eduardo Roy prepared a pre-arranged report on the buy-bust operation to be conducted
against appellant at Barangay San Vicente, Quezon City upon an informant’s tip that appellant was
selling "shabu" in the said area. On the other hand, PO3 Armando Ragundiaz Rivera recorded the
briefing, summary, identification of appellant and the buy-bust money to be used in the operation
consisting of one (1) fifty peso bill, two (2) twenty peso bill[s] and one (1) ten peso bill. PO1 Roy who
acted as the poseur-buyer and PO3 Rivera as his back-up proceeded to University Avenue corner
Commonwealth Avenue, Barangay San Vicente, Quezon City together with the informant.

PO1 Roy and the informant met appellant at the parking lot of Jollibee restaurant while PO3 Rivera
positioned himself at the side of a parked car where he can easily have a clear view of the three.
After PO1 Roy was introduced by the informant to the appellant as a buyer of "shabu", the latter
immediately produced a sachet containing the said prohibited drugs and handed the same to him.
PO1 Roy raised his left hand as the pre-arranged signal that the transaction was consummated.
Thereafter, PO3 Rivera went to the area, introduced himself as a police officer and frisked appellant
from whom he recovered the marked money and a matchbox, where the suspected "shabu" was
placed, and two (2) aluminum foils. They informed appellant of his constitutional rights and brought
him to the police station while the two (2) small transparent heat sealed sachets containing the
suspected prohibited drugs and paraphernalia were turned over to the crime laboratory for
examination, and which [was] later, found to be positive for methylamphetamine hydrochloride
(commonly known as "shabu").52

Thence, the CA rendered judgment to wit:

WHEREFORE, premises considered, the assailed decision of the Regional Trial Court of Quezon
City, Branch 103 dated April 29, 2004 is hereby AFFIRMED IN TOTO.

SO ORDERED.53

Appellant elevated the case to this Court via Notice of Appeal.54 In our Resolution dated July 12,
2006, we resolved to accept the case and required the parties to submit their respective
supplemental briefs simultaneously, if they so desire, within 30 days from notice.55 Both parties
adopted their respective appellant’s and appellee’s briefs, instead of filing supplemental briefs.56

Our Ruling

Appellant claims that he should not be convicted of the offenses charged since his guilt has not been
proven by the prosecution beyond reasonable doubt.57 In support of his contention, appellant alleges
that the arresting officers did not even place the proper markings on the alleged shabu and
paraphernalia at the time and place of the alleged buy-bust operation.58 Appellant hence posits that
this created serious doubt as to the items and actual quantity of shabu recovered, if at all.59

The Office of the Solicitor General, on the other hand, insists that the direct testimony of the two
arresting officers sufficiently established the elements of illegal sale and possession of shabu.60

At the outset, we draw attention to the unique nature of an appeal in a criminal case: the appeal
throws the whole case open for review and it is the duty of the appellate court to correct, cite and
appreciate errors in the appealed judgment whether they are assigned or unassigned.61 On the basis
of such review, we find the present appeal meritorious.

Prevailing jurisprudence uniformly hold that the trial court’s findings of fact, especially when affirmed
by the CA, are, as a general rule, entitled to great weight and will not be disturbed on
appeal.62 However, this rule admits of exceptions and does not apply where facts of weight and
substance with direct and material bearing on the final outcome of the case have been overlooked,
misapprehended or misapplied.63 After due consideration of the records of this case, evidence
presented and relevant law and jurisprudence, we hold that this case falls under the exception.

In actions involving the illegal sale of dangerous drugs, the following elements must first be
established: (1) proof that the transaction or sale took place and (2) the presentation in court of the
corpus delicti or the illicit drug as evidence.64

On the other hand, in prosecutions for illegal possession of a dangerous drug, it must be shown that
(1) the accused was in possession of an item or an object identified to be a prohibited or regulated
drug, (2) such possession is not authorized by law, and (3) the accused was freely and consciously
aware of being in possession of the drug.65Similarly, in this case, the evidence of the corpus delicti
must be established beyond reasonable doubt.66

With respect to corpus delicti, Section 21 of Republic Act (RA) No. 9165 provides:

Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources or dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and or surrendered, for proper disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the persons/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ),
and any elected public official who shall be required to sign the copies of the inventory and be given
a copy thereof; x x x (Emphasis supplied)

In People v. Partoza,67 we held that the identity of the corpus delicti was not proven beyond
reasonable doubt. In the said case, the apprehending policeman did not mark the seized drugs after
he arrested the appellant in the latter’s presence. Neither did he make an inventory and take a
photograph of the confiscated items in the presence of the appellant. There was no representative
from the media and the Department of Justice, or any elected public official who participated in the
operation and who were supposed to sign an inventory of seized items and be given copies thereof.
Hence, we held in the afore-cited case that there was no compliance with the statutory safeguards.
In addition, while the apprehending policeman admitted to have in his possession the shabu from the
time the appellant was apprehended at the crime scene to the police station, records are bereft of
proof on how the seized items were handled from the time they left the hands of the said police
officer.

We declared in People v. Orteza,68 that the failure to comply with Paragraph 1, Section 21, Article II
of RA 9165 implied a concomitant failure on the part of the prosecution to establish the identity of
the corpus delicti:

In People v. Laxa, where the buy-bust team failed to mark the confiscated marijuana immediately
after the apprehension of the accused, the Court held that the deviation from the standard procedure
in anti-narcotics operations produced doubts as to the origins of the marijuana. Consequently, the
Court concluded that the prosecution failed to establish the identity of the corpus delicti.

The Court made a similar ruling in People v. Kimura, where the Narcom operatives failed to place
markings on the seized marijuana at the time the accused was arrested and to observe the
procedure and take custody of the drug.

More recently, in Zarraga v. People, the Court held that the material inconsistencies with regard to
when and where the markings on the shabu were made and the lack of inventory on the seized
drugs created reasonable doubt as to the identity of the corpus delicti. The Court thus acquitted the
accused due to the prosecution's failure to indubitably show the identity of the shabu.

Likewise, in People v. Obmiranis,69 we acquitted the appellant due to flaws in the conduct of the
post-seizure custody of the dangerous drug allegedly recovered from the appellant, together with the
failure of the key persons who handled the same to testify on the whereabouts of the exhibit before it
was offered in evidence in court.

In the instant case, it is indisputable that the procedures for the custody and disposition of
confiscated dangerous drugs, as mandated in Section 21 of RA 9165, were not observed. The
records utterly failed to show that the buy-bust team complied with these procedures despite their
mandatory nature as indicated by the use of "shall" in the directives of the law. The procedural lapse
is plainly evident from the testimonies of the two police officers presented by the prosecution,
namely: PO1 Roy and PO3 Rivera.

PO1 Roy, in his testimony, failed to concretely identify the items seized from the appellant.
Moreover, he confirmed that they did not make a list of the items seized. The patent lack of
adherence to the procedural mandate of RA 9165 is manifest in his testimony, to wit:

Fiscal Jurado

x x x You mentioned that you gave the pre-arranged signal, what is that?

Witness

A- Raising my left hand.

Q- And what happened next?

A- My back up PO3 Rivera came.

Q- What [did] your back up do when you raised your hand?

A- He arrested Morales.

Q- What were you doing when he arrested Morales?

A- I put the informant away from the scene.

Q- And what happened next after that?

A- We brought him to the police station.

Q- How about the shabu, what did you do with it?

A- We brought it to the crime lab.

Q- How did you send it to crime lab?

A- Shabu and paraphernalia recovered by my companion from the suspect.

Q- How many items were sent to the crime lab?

A- 2 shabu and paraphernalia.

Q- What are the paraphernalia?

A- Foil, sir.

Q- How many foil?

A- I cannot recall.

Q- What happened to the accused in the police station?

A- He was investigated.

Q- Do you know the accused?

A- Yes, sir.

Q- What is his name?

A- Roldan Morales.

xxxx

Fiscal Jurado

Q- If the said sachet and paraphernalia will be shown to you, how would you be able to
identify the said items?

Witness

A- I could not recall "pare-pareho yung shabu"

Atty. Mosing
I will object because that would be leading on the part of the prosecution because he could
not identify on what shabu.

Court

That question is overruled.

Fiscal Jurado

I am showing to you an item, would you be able to identify?

Court

Fiscal showing several shabu.

WITNESS

A- This one.

Fiscal Jurado

Q- There is another plastic sachet?

Witness

A- Recovered.

Q- How about these two?

A- I was not the one who confiscated that.

Q- What happened to the said item submitted to the crime lab?

A- Positive, sir.

xxxx

Fiscal Jurado

xxxx

Q- How about the specimen forwarded to the crime lab?

Witness

A- My companion brought that.

Q- What was your participation in the case?

A- Poseur buyer.

xxxx

Atty. Mosing

xxxx

Q- After the arrest you brought the suspect and the items to the station?

A- Yes, sir.
Q- Did you not make a list of items you have confiscated in this case?

A- No, we turned it over to the investigator.

Q- You have presented the buy bust money a while ago, was that buy bust money suppose
to be turned over to the investigator?

A- No, inquest. Upon request, I was the one who received it.70 (Emphasis supplied)

The testimony of the other arresting officer, PO3 Rivera further confirms the failure of the
buy-bust team to observe the procedure mandated under Section 21 of RA 9165:

Court

Q- Where did you position yourself?

Witness

A- Parked vehicle.

Fiscal Jurado

Q- What did you notice?

Witness

A- The confidential informant introduced our poseur buyer to the suspect and after a few
conversation I waited and I saw the pre-arranged signal. And when he raised his left hand
that is the signal that the transaction is consummated.

Q- After he made that signal, what did you do?

A- I rushed to the area and arrest[ed] the suspect.

Q- Who was the person you took x x x custody [of]?

A- Roldan Morales

Q- And what did you do with him?

A- Because he ha[d] a marked money I got hold of it and arrest[ed] him.

Q- And what did you do with him?

A- I frisked him.

Q- And what was the result of your frisking?

A- A box of match which I was able to recover [containing] another suspected shabu.

Q- Where did you find that on his body?

A- Front [pocket of] pants.

Q- How about the match?

A- The same.

Q- What else did you find?

A- Aluminum foil.
 Q- And after you recovered that evidence, what did you do with the accused?

A- We informed him of his constitutional rights and brought him to the station.

Q- How about the items you recovered?

A- Delivered it to the crime lab for examination.

Q- What else did you deliver [to] the crime lab?

A- Request, sir.71 (Emphasis supplied)

Other than PO1 Roy and PO3 Rivera, the prosecution did not present any other witnesses.
Hence, the investigator, referred to by PO1 Roy in his testimony as the one who took
delivery of the seized items, was not identified nor was he presented in court. More
importantly, the testifying police officers did not state that they marked the seized drugs
immediately after they arrested the appellant and in the latter’s presence. Neither did they
make an inventory and take a photograph of the confiscated items in the presence of the
appellant. There was likewise no mention of any representative from the media and the
Department of Justice, or any elected public official who participated in the operation and
who were supposed to sign an inventory of seized items and be given copies thereof. None
of these statutory safeguards were observed.

Even PO1 Roy, the poseur-buyer, was not certain as to the identity of the confiscated shabu,
to wit:

Fiscal Jurado:

Q- If the said sachet and paraphernalia will be shown to you, how would you be able to
identify the said items?

Witness

A- I could not recall "pare-pareho yung shabu".72

The procedural lapses in the handling and identification of the seized items

collectively raise doubts as to whether the items presented in court were the exact same items that
were confiscated from appellant when he was apprehended.

While this Court recognizes that non-compliance by the buy-bust team with Section 21 of RA 9165 is
not fatal as long as there is a justifiable ground therefor, for and as long as the integrity and the
evidentiary value of the siezed items are properly preserved by the apprehending team,73 these
conditions were not met in the case at bar. No explanation was offered by the testifying police
officers for their failure to observe the rule. In this respect, we cannot fault the apprehending
policemen either, as PO1 Roy admitted that he was not a PDEA operative74 and the other witness,
PO3 Rivera, testified that he was not aware of the procedure involved in the conduct of anti-drug
operations by the PNP.75 In fine, there is serious doubt whether the drug presented in court was the
same drug recovered from the appellant. Consequently, the prosecution failed to prove beyond
reasonable doubt the identity of the corpus delicti. 1avv phi 1

Furthermore, the evidence presented by the prosecution failed to reveal the identity of the person
who had custody and safekeeping of the drugs after its examination and pending presentation in
court. Thus, the prosecution likewise failed to establish the chain of custody which is fatal to its
cause.1avvphi1

In fine, the identity of the corpus delicti in this case was not proven beyond reasonable doubt. There
was likewise a break in the chain of custody which proves fatal to the prosecution’s case. Thus,
since the prosecution has failed to establish the element of corpus delicti with the prescribed degree
of proof required for successful prosecution of both possession and sale of prohibited drugs, we
resolve to ACQUIT Roldan Morales y Midarasa.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated April 24, 2006 in
CA-G.R. CR-H.C. No. 00037 affirming the judgment of conviction of the Regional Trial Court of
Quezon City, Branch 103 dated April 29, 2004 is hereby REVERSED and SET ASIDE. Appellant
Roldan Morales y Midarasa is ACQUITTED based on reasonable doubt, and is ordered to be
immediately RELEASED from detention, unless he is confined for any other lawful cause.

The Director of the Bureau of Corrections is DIRECTED to IMPLEMENT this Decision and to report
to this Court the action taken hereon within five days from receipt.

SO ORDERED.
R. No. 172873 March 19, 2010

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
ROLDAN MORALES y MIDARASA, Appellant.

DECISION

DEL CASTILLO, J.:

The requirement of proof beyond a reasonable doubt has this vital role in our criminal procedure for
cogent reasons. The accused during a criminal prosecution has at stake interest of immense
importance, both because of the possibility that he may lose his liberty upon conviction and because
of the certainty that he would be stigmatized by the conviction. Accordingly, a society that values the
good name and freedom of every individual should not condemn a man for commission of a crime
when there is reasonable doubt about his guilt.1 Due process commands that no man shall lose his
liberty unless the Government has borne the burden of convincing the factfinder of his guilt. To this
end, the reasonable-doubt standard is indispensable, for it ‘impresses on the trier of fact the
necessity of reaching certitude of the facts in issue.2

Moreover, use of the reasonable-doubt standard is indispensable to command the respect and
confidence of the community in applications of criminal law. It is critical that the moral force of
criminal law not be diluted by a standard of proof that leaves people in doubt whether innocent men
are being condemned. It is also important in our free society that every individual going about his
ordinary affairs has confidence that his government cannot adjudge him guilty of a criminal offense
without convincing a proper factfinder of his guilt with utmost certainty.3

Lest there remain any doubt about the constitutional stature of the reasonable-doubt standard, we
explicitly hold that the Due Process Clause protects the accused against conviction except upon
proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is
charged.4

On appeal is the Decision5 of the Court of Appeals (CA) promulgated on April 24, 2006 affirming in
toto the Decision6 of the Regional Trial Court (RTC) of Quezon City, Branch 103 finding appellant
Roldan Morales y Midarasa guilty of the crimes of possession and sale of dangerous drugs.

Factual Antecedents

Appellant was charged in two separate Informations before the RTC with possession and sale of
methylamphetamine hydrochloride (shabu), to wit:

Criminal Case No. Q-03-114256

That on or about the 2nd day of January, 2003 in Quezon City, Philippines, the said accused not
being authorized by law to possess or use any dangerous drug, did then and there, willfully,
unlawfully and knowingly have in her/his/their possession and control, zero point zero three (0.03)
grams of methylamphetamine hydrochloride, a dangerous drug.

CONTRARY TO LAW.7

Criminal Case No. Q-03-114257

That on or about the 2nd day of January, 2003, in Quezon City, Philippines, the said accused, not
being authorized by law to sell, dispense, deliver, transport or distribute any dangerous drug, did,
then and there, willfully and unlawfully sell, dispense, deliver, transport, distribute or act as broker in
the said transaction, zero point zero three (0.03) gram of methylamphetamine hydrochloride, a
dangerous drug.

CONTRARY TO LAW.8

Upon arraignment, appellant, assisted by counsel, pleaded not guilty to both charges read in Filipino,
a language known and understood by him.9 On motion of the City Prosecutor, the cases were
consolidated for joint trial.10 Trial on the merits ensued thereafter.
The testimonies of PO1 Eduardo Roy (PO1 Roy) and PO3 Armando Rivera (PO3 Rivera) were
presented by the prosecution:

PO1 Roy testified that on January 2, 2003, at about 2:00 p.m., he was on duty at Police Station 9
where he made a pre-operation report on the buy-bust operation to be conducted on the herein
appellant that same afternoon.11 He then proceeded to Brgy. San Vicente, Quezon City with PO3
Rivera for the operation.12 At a point near Jollibee, they met the informant who, upon seeing the
subject appellant, went with him to meet PO1 Roy.13 After being introduced to the appellant as a
buyer of "piso" worth of "shabu", appellant immediately produced a sachet containing the alleged
drug. When appellant received the marked money amounting to ₱100.00,14 PO1 Roy raised his left
hand, at which point his back-up officer, PO3 Rivera appeared and immediately arrested the
appellant.15 The appellant was immediately brought to the Police Station for investigation, while the
two sachets of "shabu" and aluminum foil discovered on the said appellant were brought to the
Crime Laboratory for examination.16

PO3 Rivera testified that he was the back-up officer of PO1 Roy, the poseur-buyer in the buy-bust
operation conducted against the appellant in the afternoon of January 2, 2003.17 In preparation for
the said operation, he conducted a short briefing and recorded the particulars of the operation they
were about to carry out: the place of the operation which is at the parking lot of Jollibee Philcoa; the
identification of the suspect as the appellant; and the preparation of the buy-bust money to be
used.18 With respect to the buy-bust money, he prepared one ₱50.00 bill, two ₱20.00 bills and one
₱10.00 bill, by making the appropriate marking on the top portion of each bill and recording their
respective serial numbers.19 Later that afternoon, police officers proceeded to the meeting place.
PO3 Rivera positioned himself in a parked vehicle20 about 20 meters from the situs of the
transaction.21 He thus had a clear view of the appellant with the informant and PO1 Roy.22 Shortly
thereafter, he saw PO1 Roy make the pre-arranged signal at which point he approached the
appellant to arrest him.23 He recovered the marked money from the appellant and proceeded to frisk
the latter.24 Upon conducting the body search, he found another sachet which he suspected to be
"shabu" and two aluminum foils. Appellant was brought to the Police Station for detention, while the
items seized from him were brought to the Crime Laboratory for examination.25 The two sachets
tested positive for Methylamphetamine Hydrochloride (shabu) while the aluminum foil sheets tested
negative of the aforementioned substance.26

Both PO1 Roy and PO3 Rivera identified a Joint Affidavit dated January 3, 2003 during their
respective testimonies, which they acknowledged to have executed subsequent to the buy-bust
operation.27

The defense presented the testimonies of Joaquin Artemio Marfori, Arsenia Morales and the
appellant:

Appellant denied the charges against him.28 He testified that he is a resident of Dolores, Quezon
where he worked in a fertilizer store.29 He was in Manila at that time to bring money for his parents
who live at Cruz na Ligas.30 As his mother did not give him enough money for his fare back to
Quezon, he sidelined as a parking attendant at Philcoa in order to earn the balance of his bus
fare.31 However, sometime that afternoon, two male persons in civilian clothes suddenly approached
him and his co-attendant, identified themselves as policemen and poked their guns at them.32 The
said policemen handcuffed them and proceeded to frisk them.33 He averred that nothing was found
on him and yet the policemen still brought him to the police station.34 He denied the allegation made
against him that he sold, much less possessed, the "shabu" subject of this action.35 He further
testified that in the tricycle on the way to the police station, PO1 Roy took out a plastic of "shabu"
from his (PO1 Roy’s) pocket and once at the station, the said policeman showed it to the desk officer
and claimed that the plastic sachet was found on the appellant.36

He likewise denied having received the buy-bust money and claimed that the ₱50.00 bill and the two
₱20.00 bills, totaling ₱90.00, were given to him by his mother for his bus fare to Quezon.37 He
disclaimed any knowledge of the ₱10.00 bill.38 He further testified that he personally knew PO3
Rivera prior to the arrest, since his first cousin and PO3 Rivera had a quarrel which he had no
involvement whatsoever.39 He noted the fact that it was PO3 Rivera who arrested him.40

Witness Joaquin Artemio Marfori testified that he is the employer of the appellant in his agricultural
and poultry supply store in Babayan, Calamba, Laguna.41 He further stated that he allowed the
appellant to go on vacation on December 12, 2003 to celebrate the New Year with his family in
Manila.42 However, the appellant failed to report back for work at the start of the New Year.43
Finally, witness Arsenia Morales (Arsenia) corroborated the testimony of her son that she gave him
₱90.00, consisting of one ₱50.00 bill and two ₱20.00 bills as bus fare back to Laguna where he
worked.44 Thinking that her son was already on his way home, she was surprised to receive a call
from her daughter informing her that her son, the appellant, was arrested for possession and sale of
"shabu".45

Ruling of the Regional Trial Court

On April 29, 2004, the trial court rendered a Decision finding the appellant guilty beyond reasonable
doubt of illegal possession and illegal sale of dangerous drugs. The dispositive portion of the said
Decision reads:

WHEREFORE, in view of the foregoing disquisition, judgment is hereby rendered finding the
accused ROLDAN MORALES y Midarasa, GUILTY beyond reasonable doubt in Criminal Case No.
Q-03-114257 for violation of Section 5, Article II, R.A. [No.] 9165 for drug pushing [of] zero point zero
three (0.03) gram of white crystalline substance containing Methylamphetamine hydrochloride and is
hereby sentenced to suffer Life Imprisonment and to pay a fine of Five Hundred Thousand
(₱500,000.00) pesos.

The Court likewise finds the accused ROLDAN MORALES y Midarasa GUILTY beyond reasonable
doubt in Criminal Case No. Q-03-114256 for violation of Section 11, Article II, R.A. [No.] 9165 for
drug possession x x x of zero point zero three (0.03) gram of white crystalline substance containing
Methylamphetamine hydrochloride and is hereby sentenced to suffer an imprisonment term of
Twelve (12) Years and One (1) Month to Thirteen (13) Years and to pay a fine of Three Hundred
Fifty Thousand (₱350,000.00) Pesos.

The sachets of shabu subject of these cases are ordered transmitted to the PDEA thru Dangerous
Drugs Board for proper disposition after this decision becomes final.

SO ORDERED.46

The trial court held that the prosecution witnesses positively identified the appellant as the person
who possessed and sold to the poseur-buyer the "shabu" subject of this case, during the buy-bust
operation conducted in the afternoon of January 2, 2003.47 The trial court found that from the
evidence presented, the prosecution was able to sufficiently establish the following: (1) the fact of
the buy-bust operation conducted in the afternoon of January 2, 2003 at the parking lot of Jollibee
Philcoa which led to the arrest of the appellant; and (2) the corpus delicti, through the presentation in
court of the two sachets of white substance which was confirmed by the Chemistry Report to be
methylamphetamine hydrochloride ("shabu"), found in the possession of and sold by the appellant.48

Ruling of the Court of Appeals

The CA affirmed the Decision of the trial court in toto. It found that contrary to the allegations of the
appellant, there was no instigation that took place.49 Rather, a buy-bust operation was employed by
the police officers to apprehend the appellant while in the act of unlawfully selling drugs.50 The
appellate court further held that what is material in a prosecution for illegal sale of prohibited drugs is
the proof that the transaction or sale actually took place, coupled with the presentation in court of the
corpus delicti.51 Stripped of non-essentials, the CA summarized the antecedent facts of the case as
follows:

PO1 Eduardo Roy prepared a pre-arranged report on the buy-bust operation to be conducted
against appellant at Barangay San Vicente, Quezon City upon an informant’s tip that appellant was
selling "shabu" in the said area. On the other hand, PO3 Armando Ragundiaz Rivera recorded the
briefing, summary, identification of appellant and the buy-bust money to be used in the operation
consisting of one (1) fifty peso bill, two (2) twenty peso bill[s] and one (1) ten peso bill. PO1 Roy who
acted as the poseur-buyer and PO3 Rivera as his back-up proceeded to University Avenue corner
Commonwealth Avenue, Barangay San Vicente, Quezon City together with the informant.

PO1 Roy and the informant met appellant at the parking lot of Jollibee restaurant while PO3 Rivera
positioned himself at the side of a parked car where he can easily have a clear view of the three.
After PO1 Roy was introduced by the informant to the appellant as a buyer of "shabu", the latter
immediately produced a sachet containing the said prohibited drugs and handed the same to him.
PO1 Roy raised his left hand as the pre-arranged signal that the transaction was consummated.
Thereafter, PO3 Rivera went to the area, introduced himself as a police officer and frisked appellant
from whom he recovered the marked money and a matchbox, where the suspected "shabu" was
placed, and two (2) aluminum foils. They informed appellant of his constitutional rights and brought
him to the police station while the two (2) small transparent heat sealed sachets containing the
suspected prohibited drugs and paraphernalia were turned over to the crime laboratory for
examination, and which [was] later, found to be positive for methylamphetamine hydrochloride
(commonly known as "shabu").52

Thence, the CA rendered judgment to wit:

WHEREFORE, premises considered, the assailed decision of the Regional Trial Court of Quezon
City, Branch 103 dated April 29, 2004 is hereby AFFIRMED IN TOTO.

SO ORDERED.53

Appellant elevated the case to this Court via Notice of Appeal.54 In our Resolution dated July 12,
2006, we resolved to accept the case and required the parties to submit their respective
supplemental briefs simultaneously, if they so desire, within 30 days from notice.55 Both parties
adopted their respective appellant’s and appellee’s briefs, instead of filing supplemental briefs.56

Our Ruling

Appellant claims that he should not be convicted of the offenses charged since his guilt has not been
proven by the prosecution beyond reasonable doubt.57 In support of his contention, appellant alleges
that the arresting officers did not even place the proper markings on the alleged shabu and
paraphernalia at the time and place of the alleged buy-bust operation.58 Appellant hence posits that
this created serious doubt as to the items and actual quantity of shabu recovered, if at all.59

The Office of the Solicitor General, on the other hand, insists that the direct testimony of the two
arresting officers sufficiently established the elements of illegal sale and possession of shabu.60

At the outset, we draw attention to the unique nature of an appeal in a criminal case: the appeal
throws the whole case open for review and it is the duty of the appellate court to correct, cite and
appreciate errors in the appealed judgment whether they are assigned or unassigned.61 On the basis
of such review, we find the present appeal meritorious.

Prevailing jurisprudence uniformly hold that the trial court’s findings of fact, especially when affirmed
by the CA, are, as a general rule, entitled to great weight and will not be disturbed on
appeal.62 However, this rule admits of exceptions and does not apply where facts of weight and
substance with direct and material bearing on the final outcome of the case have been overlooked,
misapprehended or misapplied.63 After due consideration of the records of this case, evidence
presented and relevant law and jurisprudence, we hold that this case falls under the exception.

In actions involving the illegal sale of dangerous drugs, the following elements must first be
established: (1) proof that the transaction or sale took place and (2) the presentation in court of the
corpus delicti or the illicit drug as evidence.64

On the other hand, in prosecutions for illegal possession of a dangerous drug, it must be shown that
(1) the accused was in possession of an item or an object identified to be a prohibited or regulated
drug, (2) such possession is not authorized by law, and (3) the accused was freely and consciously
aware of being in possession of the drug.65Similarly, in this case, the evidence of the corpus delicti
must be established beyond reasonable doubt.66

With respect to corpus delicti, Section 21 of Republic Act (RA) No. 9165 provides:

Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources or dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and or surrendered, for proper disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the persons/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ),
and any elected public official who shall be required to sign the copies of the inventory and be given
a copy thereof; x x x (Emphasis supplied)

In People v. Partoza,67 we held that the identity of the corpus delicti was not proven beyond
reasonable doubt. In the said case, the apprehending policeman did not mark the seized drugs after
he arrested the appellant in the latter’s presence. Neither did he make an inventory and take a
photograph of the confiscated items in the presence of the appellant. There was no representative
from the media and the Department of Justice, or any elected public official who participated in the
operation and who were supposed to sign an inventory of seized items and be given copies thereof.
Hence, we held in the afore-cited case that there was no compliance with the statutory safeguards.
In addition, while the apprehending policeman admitted to have in his possession the shabu from the
time the appellant was apprehended at the crime scene to the police station, records are bereft of
proof on how the seized items were handled from the time they left the hands of the said police
officer.

We declared in People v. Orteza,68 that the failure to comply with Paragraph 1, Section 21, Article II
of RA 9165 implied a concomitant failure on the part of the prosecution to establish the identity of
the corpus delicti:

In People v. Laxa, where the buy-bust team failed to mark the confiscated marijuana immediately
after the apprehension of the accused, the Court held that the deviation from the standard procedure
in anti-narcotics operations produced doubts as to the origins of the marijuana. Consequently, the
Court concluded that the prosecution failed to establish the identity of the corpus delicti.

The Court made a similar ruling in People v. Kimura, where the Narcom operatives failed to place
markings on the seized marijuana at the time the accused was arrested and to observe the
procedure and take custody of the drug.

More recently, in Zarraga v. People, the Court held that the material inconsistencies with regard to
when and where the markings on the shabu were made and the lack of inventory on the seized
drugs created reasonable doubt as to the identity of the corpus delicti. The Court thus acquitted the
accused due to the prosecution's failure to indubitably show the identity of the shabu.

Likewise, in People v. Obmiranis,69 we acquitted the appellant due to flaws in the conduct of the
post-seizure custody of the dangerous drug allegedly recovered from the appellant, together with the
failure of the key persons who handled the same to testify on the whereabouts of the exhibit before it
was offered in evidence in court.

In the instant case, it is indisputable that the procedures for the custody and disposition of
confiscated dangerous drugs, as mandated in Section 21 of RA 9165, were not observed. The
records utterly failed to show that the buy-bust team complied with these procedures despite their
mandatory nature as indicated by the use of "shall" in the directives of the law. The procedural lapse
is plainly evident from the testimonies of the two police officers presented by the prosecution,
namely: PO1 Roy and PO3 Rivera.

PO1 Roy, in his testimony, failed to concretely identify the items seized from the appellant.
Moreover, he confirmed that they did not make a list of the items seized. The patent lack of
adherence to the procedural mandate of RA 9165 is manifest in his testimony, to wit:

Fiscal Jurado

x x x You mentioned that you gave the pre-arranged signal, what is that?

Witness

A- Raising my left hand.

Q- And what happened next?

A- My back up PO3 Rivera came.

Q- What [did] your back up do when you raised your hand?

A- He arrested Morales.

Q- What were you doing when he arrested Morales?

A- I put the informant away from the scene.

Q- And what happened next after that?

A- We brought him to the police station.

Q- How about the shabu, what did you do with it?

A- We brought it to the crime lab.

Q- How did you send it to crime lab?

A- Shabu and paraphernalia recovered by my companion from the suspect.

Q- How many items were sent to the crime lab?

A- 2 shabu and paraphernalia.

Q- What are the paraphernalia?

A- Foil, sir.

Q- How many foil?

A- I cannot recall.

Q- What happened to the accused in the police station?

A- He was investigated.

Q- Do you know the accused?

A- Yes, sir.

Q- What is his name?

A- Roldan Morales.

xxxx

Fiscal Jurado

Q- If the said sachet and paraphernalia will be shown to you, how would you be able to
identify the said items?

Witness

A- I could not recall "pare-pareho yung shabu"

Atty. Mosing
I will object because that would be leading on the part of the prosecution because he could
not identify on what shabu.

Court

That question is overruled.

Fiscal Jurado

I am showing to you an item, would you be able to identify?

Court

Fiscal showing several shabu.

WITNESS

A- This one.

Fiscal Jurado

Q- There is another plastic sachet?

Witness

A- Recovered.

Q- How about these two?

A- I was not the one who confiscated that.

Q- What happened to the said item submitted to the crime lab?

A- Positive, sir.

xxxx

Fiscal Jurado

xxxx

Q- How about the specimen forwarded to the crime lab?

Witness

A- My companion brought that.

Q- What was your participation in the case?

A- Poseur buyer.

xxxx

Atty. Mosing

xxxx

Q- After the arrest you brought the suspect and the items to the station?

A- Yes, sir.
Q- Did you not make a list of items you have confiscated in this case?

A- No, we turned it over to the investigator.

Q- You have presented the buy bust money a while ago, was that buy bust money suppose
to be turned over to the investigator?

A- No, inquest. Upon request, I was the one who received it.70 (Emphasis supplied)

The testimony of the other arresting officer, PO3 Rivera further confirms the failure of the
buy-bust team to observe the procedure mandated under Section 21 of RA 9165:

Court

Q- Where did you position yourself?

Witness

A- Parked vehicle.

Fiscal Jurado

Q- What did you notice?

Witness

A- The confidential informant introduced our poseur buyer to the suspect and after a few
conversation I waited and I saw the pre-arranged signal. And when he raised his left hand
that is the signal that the transaction is consummated.

Q- After he made that signal, what did you do?

A- I rushed to the area and arrest[ed] the suspect.

Q- Who was the person you took x x x custody [of]?

A- Roldan Morales

Q- And what did you do with him?

A- Because he ha[d] a marked money I got hold of it and arrest[ed] him.

Q- And what did you do with him?

A- I frisked him.

Q- And what was the result of your frisking?

A- A box of match which I was able to recover [containing] another suspected shabu.

Q- Where did you find that on his body?

A- Front [pocket of] pants.

Q- How about the match?

A- The same.

Q- What else did you find?

A- Aluminum foil.
 Q- And after you recovered that evidence, what did you do with the accused?

A- We informed him of his constitutional rights and brought him to the station.

Q- How about the items you recovered?

A- Delivered it to the crime lab for examination.

Q- What else did you deliver [to] the crime lab?

A- Request, sir.71 (Emphasis supplied)

Other than PO1 Roy and PO3 Rivera, the prosecution did not present any other witnesses.
Hence, the investigator, referred to by PO1 Roy in his testimony as the one who took
delivery of the seized items, was not identified nor was he presented in court. More
importantly, the testifying police officers did not state that they marked the seized drugs
immediately after they arrested the appellant and in the latter’s presence. Neither did they
make an inventory and take a photograph of the confiscated items in the presence of the
appellant. There was likewise no mention of any representative from the media and the
Department of Justice, or any elected public official who participated in the operation and
who were supposed to sign an inventory of seized items and be given copies thereof. None
of these statutory safeguards were observed.

Even PO1 Roy, the poseur-buyer, was not certain as to the identity of the confiscated shabu,
to wit:

Fiscal Jurado:

Q- If the said sachet and paraphernalia will be shown to you, how would you be able to
identify the said items?

Witness

A- I could not recall "pare-pareho yung shabu".72

The procedural lapses in the handling and identification of the seized items

collectively raise doubts as to whether the items presented in court were the exact same items that
were confiscated from appellant when he was apprehended.

While this Court recognizes that non-compliance by the buy-bust team with Section 21 of RA 9165 is
not fatal as long as there is a justifiable ground therefor, for and as long as the integrity and the
evidentiary value of the siezed items are properly preserved by the apprehending team,73 these
conditions were not met in the case at bar. No explanation was offered by the testifying police
officers for their failure to observe the rule. In this respect, we cannot fault the apprehending
policemen either, as PO1 Roy admitted that he was not a PDEA operative74 and the other witness,
PO3 Rivera, testified that he was not aware of the procedure involved in the conduct of anti-drug
operations by the PNP.75 In fine, there is serious doubt whether the drug presented in court was the
same drug recovered from the appellant. Consequently, the prosecution failed to prove beyond
reasonable doubt the identity of the corpus delicti. 1avv phi 1

Furthermore, the evidence presented by the prosecution failed to reveal the identity of the person
who had custody and safekeeping of the drugs after its examination and pending presentation in
court. Thus, the prosecution likewise failed to establish the chain of custody which is fatal to its
cause.1avvphi1

In fine, the identity of the corpus delicti in this case was not proven beyond reasonable doubt. There
was likewise a break in the chain of custody which proves fatal to the prosecution’s case. Thus,
since the prosecution has failed to establish the element of corpus delicti with the prescribed degree
of proof required for successful prosecution of both possession and sale of prohibited drugs, we
resolve to ACQUIT Roldan Morales y Midarasa.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated April 24, 2006 in
CA-G.R. CR-H.C. No. 00037 affirming the judgment of conviction of the Regional Trial Court of
Quezon City, Branch 103 dated April 29, 2004 is hereby REVERSED and SET ASIDE. Appellant
Roldan Morales y Midarasa is ACQUITTED based on reasonable doubt, and is ordered to be
immediately RELEASED from detention, unless he is confined for any other lawful cause.

The Director of the Bureau of Corrections is DIRECTED to IMPLEMENT this Decision and to report
to this Court the action taken hereon within five days from receipt.

SO ORDERED.
DAATAYA v. PEOPLE

Capistrano Daataya, Dexter Salisi, and Bregido Malacat, Jr., (Petitioners) Vs. People of the Philippines,
(Respondents)

G.R. No. 205745

March 08, 2017

Facts:

On December 17, 1995, Rolando O. Bahian alleged that Capistano Daataya et al, conspiring mutually, unlawfully
and feloniously with intent to kill, assaulted, box, kick and struck Bahian. This incident happen a day after a
commotion incident between the parties in the basketball court. Bahian Farther alleged that a stone was thrown
to his head by petitioners that causes depress frontal fracture, open frontal bone, left, and advice for surgery. The
petitioners pleaded not guilty.

The defense, apart from the three petitioners, offered the testimonies of Delfin Yafiez (Delfin), Rodolfo Yafiez
(Rodolfo), Danzon Daayata (Danzon) and Rosemarie Daayata (Rosemarie ). Petitioners Salisi and Malacat claimed
that they were having coffee at the house of Vicente Daayata (Vicente), in the morning of December 17, 1995.
Bahian arrived with Kagawad Abalde, and called for Salisi to come out. When Salisi acceded, Bahian challenged him
to a fight and threw the first punch that started a scuffle. In the course of the melee, Bahian took a swing for Salisi,
who ducked, causing Bahian to lose his balance. Bahian then fell on the pavement and hit his head. Kagawad
Abalde then drew a gun, poked it at Salisi, and threatened to kill him. For his part, petitioner Daayata claimed that
he was in his house, some 50 meters away from Vicente's house when the incident recalled by petitioners Salisi
and Malacat transpired. He rushed to Vicente's house upon hearing a commotion. Farther said the Barangay
Captain Yafiez arrived after an hour. They added however, that in the evening of December 16, while they were on
their way home, Bahian waited for them to pass by his house, where he challenged them to a fight. Defense
witness Rodolfo allegedly pacified Bahian.

Frustrated murder case was file against petitioners, the petitioners ordered guilty by Regional Trial Court (RTC),
Branch 37, Misamis Oriental, Cagayan de Oro City. The petitioners appealed in the court of appeals but affirmed
guilty. However, Bahian Medical Certificates showed no injury other than that on fore head. Bahian during the
questioning admitted that the injury on the forehead was cause by accidentally he hit the edge of the concrete
pavement.

Issue:

Whether or not the failure of the prosecution to prove the guilt of petitioners beyond reasonable doubt, a ground
for acquittal of the petitioners?

Held:
Yes, the failure of the prosecution to prove the guilt of petitioners beyond reasonable doubt, a ground for acquittal
of the petitioners.

The right of the accused to be presumed innocent until proven guilty is guaranteed under Section 14(2), Article III
(Bill of Rights) of the 1987 Philippine Constitution. This fundamental right of the accused is also embodied under
Section 2, Rule 133 of the Rules of Court, which specifically states that "in a criminal case, the accused is entitled to
an acquittal, unless his guilt is proved beyond reasonable doubt. Proof beyond reasonable doubt does not mean
such a degree of proof, excluding possibility of error, produces absolute certainty. Only moral certainty is required,
or that degree of proof which produces conviction in an unprejudiced mind."

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals in CA G.R. CR No. 27951 is REVERSED
and SET ASIDE. Petitioners Capistrano Daayata, Dexter Salisi, and Bregido Malacat, Jr. are hereby ACQUITTED for
failure of the prosecution to prove their guilt beyond reasonable doubt. Any amount they each paid by way of a
bail bond is ordered RETURNED. SO ORDERED
BANKARD, INC. v. ALARTE

BANKARD, INC., Petitioner, vs. LUZ P. ALARTE, Respondent.

G.R. No. 202573

April 19, 2017

Facts:

Petitioner Bankard, Inc. (Bankard, now RCBC Bankard Services Corporation) is a duly constituted domestic
corporation doing business as a credit card provider, extending credit accommodations to its member-cardholders
for the purchase of goods and services obtained from Bankard-accredited business establishments, to be paid later
on by the member-cardholders following billing.

In 2007, petitioner filed a collection case against respondent Luz P. Alarte before the Metropolitan Trial Court of
Pasig City (MeTC). In its Complaint, petitioner alleged that respondent applied for and was granted credit
accommodations under Bankard myDream JCB Card.No. 3562-8688-5155-1006; that respondent, using the said
Bankard myDream JCB credit card, availed herself of credit acconunodations by "purchasing various products";
that per Statement of Account dated July 9, 2006, respondent's credit availments amounted to a total of
₱67,944.82, inclusive of unbilled monthly installments, charges and penalties or at least the minimum amount due
under the credit card; and that respondent failed and refuses to pay her obligations despite her receipt of a
written demand.

Thus, it prayed that respondent be ordered to pay the amount of ₱67,944.82, with interest, attorney's fees
equivalent to 25% of the sum due, and costs of suit. On July 15, 2009, the MeTC issued its Decision dismissing the
case for lack of preponderance of evidence or lack or "greater weight of the credible evidence. Petitioner appealed
before the Regional Trial Court (RTC) which, in a May 6, 2010 Decision, affirmed the MeTC based on the same
ground.

Petitioner filed a Petition for Review before the Court of Appeals, but the same was denied and dismissed for lack
of preponderance of evidence. Petitioner moved to reconsider, but in a July 4, 2012 Resolution, the CA held its
ground.

Issue:

Whether or not the petitioner, Bankard Inc. presented sufficient evidence to support its pecuniary claim against
respondent Luz P. Alarte.

Ruling:
No, the petitioner, Bankard Inc. did not present sufficient evidence to support its pecuniary claim against
respondent Luz P. Alarte. Upon perusal of the July 9, 2006 Statement of Account sent to respondent would indeed
show that it does not contain the particulars of purchase transactions into by the latter; it merely contains the
information of the previous statement balance, late and interest charges, amounting to ₱67,944.82

However, the Court held that the manner in which the statement of account is worded indicates that it is a running
balance, a continuing and mounting bill of charges consisting of a combined principal amount with finance and
penalty charges imposed, which respondent appears to have failed to pay in the past. This is shown by the fact that
respondent has failed to pay a past bill amounting to ₱64,615.64 - the "previous statement balance" in the very
first line of the above-quoted statement of account.

This could mean that there really were no immediate purchase transactions made by respondent for the month
that needed to be specified in the July 9, 2006 Statement of Account; that instead, she simply repeatedly failed and
continues to fail to pay her credit card debt arising out of past credit card purchase transactions to petitioner,
which thus resulted in a mounting pile of charges imposed upon her outstanding account as reflected in a
statement or bill of charges or accounts regularly sent to her.

Moreover, the fault of Petitioner appears to lie in the fact that its Complaint was not well-prepared, and its cause
is not well-argued; for this reason, the courts below misunderstood both. The Court cannot completely blame the
MeTC, RTC, and CA for their failure to understand or realize the fact that a monthly credit card statement of
account does not always necessarily involve purchases or transactions made immediately prior to the issuance of
such statement.

While the Court believes that petitioner's claim may be well-founded, it is not enough as to allow judgment in its
favor on the basis of extant evidence. It must prove the validity of its claim; this it may do by amending its
Complaint and adducing additional evidence of respondent's credit history and proving the loan transactions
between them.

Therefore, the Petition is PARTIALLY GRANTED. The September 28, 2011 Decision and July 4, 2012 Resolution of
the Court of Appeals are REVERSED and SET ASIDE. Further, Metropolitan Trial Court of Pasig City, Branch 72 is
ORDERED to conduct further proceedings in accordance with the foregoing disquisition of the Court and allow
petitioner Bankard, Inc. to amend its Complaint and/or present additional evidence to prove its case.
G.R. No. 204544

MARLON BACERRA y TABONES, Petitioner

vs.
PEOPLE OF THE PHILIPPINES, Respondent

DECISION

LEONEN, J.:

The identity of the perpetrator of a crime and a finding of guilt may rest solely on the strength of
circumstantial evidence.

This resolves the Petition for Review1 assailing the Decision2 dated August 30, 2012 and the
Resolution3 dated October 22, 2012 of the Court of Appeals in CA-G.R. CR No. 32923, which upheld
the conviction of Marlon Bacerra y Tabones (Bacerra) for the crime of simple arson punished
underSection 1 of Presidential Decree No. 1613.4

In the Information dated January 12, 2006, Bacerra was charged with violation of Section 1 of
Presidential Decree No. 1613:

That on or about 4:00 o'clock in the morning of November 15, 2005, at Brgy. San Pedro Ili, Alcala,
Pangasinan and within the jurisdiction of this Honorable Court, the above-named accused, with
intent to cause damage to another, did then and theres [sic], willfully, unlawfully and feloniously set
fire to the rest house of Alfredo Melegrito y Galamay, to his damage and prejudice in the amount of
Php70,000.00, more or less.

Contrary to Sec. 1, 1st par. Of P.D. 1613.5

Bacerra pleaded not guilty to the charge.6

During trial, the prosecution presented private complainant Alfredo Melegrito (Alfredo), Edgar
Melegrito (Edgar), Toni Rose dela Cruz, and P03 Marcos Bautista, Jr. to testify on the alleged
incident.7 Their collective testimonies produced the following facts for the prosecution:

Alfredo and his family8 were sound asleep in their home on

November 15, 2005.9 At about 1:00 a.m., he was roused from sleep by the

sound of stones hitting his house. Alfredo went to the living room10 and

peered through the jalousie window. The terrace light allowed him to recognize his neighbor and co-
worker,11Bacerra.12

Bacerra threw stones at Alfredo's house while saying, "Vulva of your mother."13 Just as he was about
to leave, Bacerra exclaimed, "[V]ulva of your mother, Old Fred, I'll bum you now."14 Bacerra then
left.15 Alfredo's son, Edgar, also witnessed the incident through a window in his room.16

Troubled by Bacerra's threat, Alfredo waited for him to return. Alfredo sat down beside the
window.17 At around 4:00a.m.,18 he heard dogs barking outside.19 Alfredo looked out the window and
saw Bacerra walking towards their nipa hut,20 which was located around 10 meters from their house.21

Bacerra paced in front of the nipa hut and shook it.22 Moments later, Alfredo saw the nipa hut
burning.23

Alfredo sought help from his neighbors to smother the fire.24 Edgar contacted the authorities for
assistance25 but it was too late. The nipa hut and its contents were completely destroyed.26 The local
authorities conducted an investigation on the incident.27

The defense presented Bacerra, Alex Dacanay (Dacanay), and Jocelyn Fernandez (Fernandez) as
witnesses. Their collective testimonies yielded the defense's version of the incident:
At around 11:00 p.m. of November 14, 2005, Bacerra was at the house of his friend, Ronald
Valencia. The two (2) engaged in a drinking session with Dacanay and a certain Reyson until 1:00
a.m. of November 15, 2005.28

Bacerra asked Dacanay to take him to his grandmother's house. Dacanay conceded but they found
the gate closed.29 Embarrassed to disturb his grandmother,30 Bacerra asked Dacanay to bring him to
Fernandez's house instead.31 However, Dacanay was already sleepy at that time.32 Hence, Bacerra
requested his brother-in-law, Francisco Sadora (Sadora), to acconwany him to Fernandez's house,
which was located one (1) kilometer away.33

Bacerra and Sadora arrived at Fernandez's house at around 1:30 a.m. Fernandez told Bacerra to
sleep in the living room. She checked on Bacerra every hour.34 At around 7:00 a.m., police officers
who were looking for Bacerra arrived at Fernandez's house.35 Knowing that he did not do anything
wrong,36 Bacerra voluntarily went to the police station with the authorities.37

In the Decision dated October 6, 2009, Branch 50 of the Regional Trial Court in Villasis,
Pangasinan38 found Bacerra guilty beyond reasonable doubt of arson:

WHEREFORE, judgment is hereby rendered finding accused Marlon Bacerra y

Tabones GUILTY beyond reasonable doubt of the crime of Simple Arson defined and penalized in
Section 1 of Presidential Decree No. 1613 and, there being no modifying circumstance, is sentenced
to suffer an indeterminate penalty of six (6) years of prision correccional, as minimum, to ten (10)
years of prision mayor, as maximum, together with all the accessory penalties provided by law.

The accused is likewise ordered to pay the private complainant ₱50,000.00 as temperate damages.

SO ORDERED.39 (Emphasis in the original)

Bacerra appealed the Decision of the Regional Trial Court.40 He argued that none of the
prosecution's witnesses had positively identjfied him as the person who burned the nipa hut.41

In the Decision42 dated August 30, 2012, the Court of Appeals affirmed the Decision dated October 6,
2009 of the Regional Trial Court in toto.43

Bacerra moved for reconsideration44 but the Motion was denied in the Resolution45 dated October 22,
2012.

On January 15, 2013, Bacerra filed a Petition for Review on Certiorari46 assailing the Decision dated
August 30, 2012 and Resolution dated October 22, 2012 of the Court of Appeals.

In the Resolution dated January 30, 2013, this Court required the People of the Philippines to
comment on the petition for review.47

On June 18, 2013, the People of the Philippines, through the Office of the Solicitor General, filed a
Comment on the Petition48 to which petitioner filed a Reply49 on January 27, 2014.

Petitioner argues that the Court of Appeals erred in upholding his conviction based on circumstantial
evidence, which, being merely based on conjecture, falls short of proving his guilt beyond
reasonable doubt.50 No direct evidence was presented to prove that petitioner actually set fire to
private complainant's nipa hut.51 Moreover, there were two (2) incidents that occurred, which should
be taken and analyzed separately.52

Petitioner adds that there were material inconsistencies in the testimonies of the prosecution's
witnesses.53Petitioner also points out that private complainant acted contrary to normal human
behavior, placing great doubt on his credibility.54 Persons whose properties are being destroyed
should immediately confront the perpetrator.55Private complainant and his family, however, merely
stayed inside their house throughout the entire incident.56

Petitioner argues in the alternative that the mitigating circumstances of intoxication and voluntary
surrender should have been appreciated by the lower tribunals in computing the imposable
penalty.57 Petitioner was drunk at the time of the alleged incident.58 In addition, he voluntarily
surrendered to the authorities despite the absence of an arrest warrant.59 Lastly, petitioner asserts
that temperate damages should not have been awarded because private complainant could have
proven actual damages during trial.60

In its Comment, respondent asserts that direct evidence is not the only means to establish criminal
liability.61 An accused may be convicted based on circumstantial evidence as long as the combination
of circumstances leads to the conclusion that the accused is guilty beyond reasonable doubt.62

Respondent argues that the Court of Appeals correctly affirmed the trial court's decision. For
intoxication to be considered as a mitigating circumstance, it must be shown that it is not
habitual.63 The state of drunkenness of the accused must be of such nature as to affect his or her
mental faculties.64 Voluntary surrender cannot likewise be considered as a mitigating circumstance
because there is no showing of spontaneity on the part of the accused.65

Lastly, respondent argues that temperate damages amounting to ₱50,000.00 was properly awarded
because the burning of private complainant's nipa hut brought some pecuniary loss.66

This case presents the following issues for this Court's resolution:

First, whether petitioner's guilt was proven beyond reasonable doubt based on the circumstantial
evidence adduced during trial;67

Second, whether the mitigating circumstances of intoxication and voluntary surrender may properly
be appreciated in this case to reduce the imposable penalty;68 and

Finally, whether the award of temperate damages amounting to ₱50,000.00 was proper.69

This Court affirms petitioner's conviction for the crime of simple arson.

Direct evidence and circumstantial evidence are classifications of evidence with legal consequences.

The difference between direct evidence and circumstantial evidence involves the relationship of the
fact inferred to the facts that constitute the offense. Their difference does not relate to the probative
value of the evidence.

Direct evidence proves a challenged fact without drawing any inference.70 Circumstantial evidence,
on the other hand, "indirectly proves a fact in issue, such that the factfinder must draw an inference
or reason from circumstantial evidence."71

The probative value of direct evidence is generally neither greater than nor superior to circumstantial
evidence.72The Rules of Court do not distinguish between "direct evidence of fact and evidence of
circumstances from which the existence of a fact may be inferred."73 The same quantum of evidence
is still required. Courts must be convinced that the accused is guilty beyond reasonable doubt.74

A number of circumstantial evidence may be so credible to establish a fact from which it may be
inferred, beyond reasonable doubt, that the elements of a crime exist and that the accused is its
perpetrator.75 There is no requirement in our jurisdiction that only direct evidence may convict.76 After
all, evidence is always a matter of reasonable inference from any fact that may be proven by the
prosecution provided the inference is logical and beyond reasonable doubt.

Rule 113, Section 4 of the Rules on Evidence provides three (3) requisites that should be
established to sustain a conviction based on circumstantial evidence:

Section 4. Circumstantial evidence, when sufficient. - Circumstantial evidence is sufficient for

conviction if:

(a) There is more than one circumstance;

(b) The facts from which the inferences are derived are proven; and
(c) The combination of all the circumstances is such as to produce a conviction beyond reasonable
doubt.77

The commission of a crime, the identity of the perpetrator,78 and the finding of guilt may all be
established by circumstantial evidence.79 The circumstances must be considered as a whole and
should create an unbroken chain leading to the conclusion that the accused authored the crime.80

The determination of whether circumstantial evidence is sufficient to support a finding of guilt is a

qualitative test not a quantitative one.81 The proven circumstances must be "consistent with each
other, consistent with the hypothesis that the accused is guilty, and at the same time inconsistent
with the hypothesis that he is innocent, and with every other rational hypothesis except that of guilt."82

The crime of simple arson was proven solely through circumstantial evidence in People v.
Abayon.83 None of the prosecution's witnesses actually saw the accused start the fire.84 Nevertheless,
the circumstantial evidence adduced by the prosecution, taken in its entirety, all pointed to the
accused's guilt.85

In People v. Acosta,86 there was also no direct evidence linking the accused to the burning of the
house.87 However, the circumstantial evidence was substantial enough to convict the accused.88 The
accused had motive and previously attempted to set a portion of the victim's house on
fire.89 Moreover, he was present at the scene of the crime before and after the incident.90

Similarly, in this case, no one saw petitioner actually set fire to the nipa hut. Nevertheless, the
prosecution has established multiple circumstances, which, after being considered in their entirety,
support the conclusion that petitioner is guilty beyond reasonable doubt of simple arson.

First, the evidence was credible and sufficient to prove that petitioner stoned private complainant's
house and threatened to bum him.91 Private complainant testified that he saw petitioner throwing
stones at his house and heard petitioner say, "okinam nga Lakay Fred, puuran kayo tad ta!"92 (Vulva
of your mother, Old Fred, I'll bum you now.)93Petitioner's threats were also heard by private
complainant's son94 and grandchildren.95

Second, the evidence was credible and sufficient to prove that petitioner returned a few hours later
and made his way to private complainant's nipa hut.96 Private complainant testified that at 4:00
a.m.,97 he saw petitioner pass by their house and walk towards their nipa hut.98 This was corroborated
by private complainant's son who testified that he saw petitioner standing in front of the nipa hut
moments before it was burned.99

Third, the evidence was also credible and sufficient to prove that

petitioner was in close proximity to the nipa hut before it caught fire.100

Private complainant testified that he saw petitioner walk to and fro in front

of the nipa hut and shake its posts just before it caught fire.101 Private

complainant's son likewise saw petitioner standing at the side of the nipa hut

before it was burned.102

The stoning incident and the burning incident cannot be taken and analyzed separately. Instead,
they must be viewed and considered as a whole. Circumstantial evidence is like a "tapestry made
1âwphi1

up of strands which create a pattern when interwoven."103 Each strand cannot be plucked out and
scrutinized individually because it only forms part of the entire picture.104 The events that transpired
prior to the burning incident cannot be disregarded. Petitioner's threat to bum occurred when he
stoned private complainant's house.

Also, there is no other reasonable version of the events which can be held with reasonable certainty.

Private complainant could have actually seen petitioner bum the nipa hut by stepping outside of his
house. However, behavioral responses of individuals confronted with strange, startling, or frightful
experiences vary.105 Where there is a perceived threat or danger to survival, some may fight, others
might escape.106 Private complainant's act of remaining inside his house during the incident is not
contrary to human behavior. It cannot affect his credibility as a witness.

Furthermore, "the assessment of the credibility of witnesses is a function ... of the trial courts."107 It is
a factual matter that generally cannot be reviewed in a Rule 45 petition.108 Petitioner failed to prove,
much less allege, any of the exceptions to the general rule that only questions of law may be raised
in a petition for review brought under Rule 45 of the Rules of Court.109 Hence, this Court will not
disturb the trial court's findings on the matter.

II

For intoxication to be appreciated as a mitigating circumstance, the intoxication of the accused must
neither be "habitual [n]or subsequent to the plan to commit [a] felony."110

Moreover, it must be shown that the mental faculties and willpower of the accused were impaired in
such a way that would diminish the accused's capacity to understand the wrongful nature of his or
her acts.111 The bare assertion that one is inebriated at the time of the commission of the crime is
insufficient.112 There must be proof of the fact of intoxication and the effect of intoxication on the
accused.113

There is no sufficient evidence in this case that would show that petitioner was intoxicated at the
time of the commission of the crime. A considerable amount of time had lapsed from petitioner's
drinking spree up to the burning of the nipa hut within which he could have regained control of his
actions. Hence, intoxication cannot be appreciated as a mitigating circumstance in this case.

Neither can voluntary surrender be appreciated as a mitigating circumstance.

Voluntary surrender, as a mitigating circumstance, requires an element of spontaneity. The

accused's act of surrendering to the authorities must have been impelled by the acknowledgment of
guilt or a desire to "save the authorities the trouble and expense that may be incurred for his [or her]
search and capture."114

Based on the evidence on record, there is no showing that petitioner's act of submitting his person to
the authorities was motivated by an acknowledgement of his guilt.

Considering that no mitigating circumstances attended the commission of the crime, the
indeterminate sentence of six (6) years of prision correccional, as minimum, to ten (10) years
of prision mayor, as maximum, imposed by the trial court, stands.

III

Under Article 2224 of the Civil Code, temperate damages may be awarded when there is a finding
that "some pecuniary loss has been suffered but its amount [cannot], from the nature of the case, be
proved with certainty." The amount of temperate damages to be awarded in each case is
discretionary upon the courts115 as long as it is "reasonable under the circumstances."116

Private complainant clearly suffered some pecuniary loss as a result of the burning of his nipa hut.
However, private complainant failed to substantiate the actual damages that he suffered.
Nevertheless, he is entitled to be indemnified for his loss. The award of temperate damages
amounting to ₱50,000.00 is proper and reasonable under the circumstances.

WHEREFORE, the Petition for Review is DENIED. The Decision dated August 30, 2012 and the
Resolution dated October 22, 2012 of theCourt of Appeals in CA-G.R. CR No. 32923, finding
petitioner Marlon Bacerra y Tabones guilty beyond reasonable doubt for the crime of arson
is AFFIRMED.

SO ORDERED.
G.R. No. 102358 November 19, 1992

SPOUSES VICENTE and GLORIA MANALO, petitioners,

vs.
HON. NIEVES ROLDAN-CONFESOR, in her capacity as Undersecretary of Labor and
Employment, JOSE SARMIENTO as POEA Administrator, CAREERS PLANNERS
SPECIALISTS INTERNATIONAL, INC., and SPOUSES VICTOR and ELNORA
FERNANDEZ, respondents.

BELLOSILLO, J.:

The Court views with grave concern the alarming incidents of illegal recruitment which demonstrate
all too clearly that overseas employment has fast developed into a major source not only of much-
needed foreign exchanged but also, for the cunning and the crafty, of easy money.

In response to a newspaper advertisement looking for a couple to work as driver and tutor cum baby
sitter, petitioners Vicente and Gloria Manalo went to Career Planners Specialists International, Inc.
(CPSI), a licensed service contracting firm owned by private respondents, the spouses Victor and
Elnora Fernandez. After the requisite interview and testing, they were hired to work for a family in
Saudi Arabia for a monthly salary of US$350.00 each. According to petitioners, a placement fee of
P40,000.00 was imposed as a precondition for the processing of their papers. They paid only
P30,000.00 in cash and executed a promissory note for the balance. Then they were allowed by
respondent Elnora Fernandez to sign their contract papers but did not issue a receipt for the
placement fee despite demand.

Shortly before boarding their flight to Saudi Arabia, petitioners were handed their contracts.
According to Gloria, she was surprised to discover that her position had been changed to that of
domestic help. However, a CPSI employee assured her that the change was only for the purpose of
facilitating her departure and did not in any way alter her employment as tutor. Incidentally, CPSI
provided petitioners with the Travel Exit Pass (TEP) of Filipino Manpower Services, Inc. (FILMAN), a
duly licensed recruitment agency.

Contrary to the representation of her recruiter, Gloria was actually hired as a domestic help and not
as a tutor, so that after working for only twenty-five (25) days in Jeddah, she returned to Manila.
Soon after, Vicente also resigned from his work and followed her home. He could not stand the
unbearable working conditions of his employment. However, before leaving, he had to execute a
promissory note to cover his plane fare which respondent Victor Fernandez advanced. Vicente also
had to sign a quitclaim in favor of CPSI and his employer.

On 29 February 1988, petitioners sued private respondents before the Philippines Overseas
Employment Administration (POEA) charging them with illegal exaction, 1 false adverstisement, 2 and
violation of other pertinents laws, rules and regulations. They demanded the refund of the amount
exacted from them, plus payment of moral damages and the imposition of administrative sanctions. 3

Private respondents countered: (1) that Gloria applied as domestic help fully aware that she could
not be a tutor since she did not speak Arabic; (2) that the promissory note for P10,000.00 was
required of petitioners because they were hired without paying placement fees; (3) that it was
unlikely for petitioners, who were mature, educated and experienced in overseas work, to part with
P30,000.00 without securing a receipt; (4) that Vicente executed a quitclaim in favor of CPSI duly
authenticated by embassy officials in Saudi Arabia; (5) that there was no impropriety in having the
employment papers of petitioners processed by FILMAN because it was a sister company of CPSI,
and private respondents Victor and Elnora were officers in both agencies.

Private respondents prayed for the disqualification of petitioners from overseas employment, and
sought to recover from them the SR 1,150 plane fare advanced by Victor for Vicente, P10,000.00 as
placement fee evidenced by a promissory note, and attorney's fees.

Mainly, on the basis of the transcripts of petitioners' testimonies in the clarificatory questioning
before the Rizal Provincial Prosecutor in a related criminal case,4 the POEA issued its Order of 7
May 1990 giving more weight and credence to petitioners' version thus —
 After a careful evaluation of the facts and the evidence presented, we are more
inclined to give weight to complainants' posture. Complainants' version of the case
spontaneously presented in their pleadings is, to our mind, more convincing than
respondent's stand. Moreover, the manner by which complainants narrated the whole
incident inspired belief in the allegation that respondent Career is indeed guilty of
illegal exaction. Thus, the actual expenses incurred by herein complainants
computed hereinbelow less the allowable fees of P3,000.00 (P1,500.00 per worker,
respondent being a service contractor) should be returned to them.

Actual Expenses —

P30,000.00 — placement fees

14.00 — application form
300.00 — psychological test
1,400.00 — medical exam
P31,000.00 — total

less 3,000.00 — processing fees at

P1,500.00 per applicant

P28,714.00 — amount to be refunded

It appearing, however, that only respondent Career Planners Specialist(s) Int'l. Inc.,
took part in the collection of the aforesaid amount, the same should be solely held
liable.

We cannot likewise give credence to the Final Quitclaim signed by complainant

Vicente Manalo before he left for the Philippines and presented by respondent as
defense. While its genuineness may not be in question, we believe that it has no
bearing on the issue at bar. The aforesaid Quitclaim deals more with matters
concerning complainants' employment abroad. However, the subject of the instant
claim is the refund of complainants' expenses prior to their deployment to Saudi
Arabia.

On the other hand, we hold FILMAN liable for allowing its document such as the TEP
to be used by other agency. Respondent's defense that there is nothing wrong in this
because FILMAN is a sister company of CAREER does not merit consideration
because such practice is not allowed under the POEA Rules and Regulations. A
check with our records, however, showed that respondent FILMAN had been put in
the list of forever banned agencies effective April 5, 1989.

Anent the claim for moral damages, this Office has no jurisdiction to entertain the
same.

WHEREFORE, . . . the Authority of Career Planners Specialist(s) International is

hereby suspended for four (4) months or in lieu thereof, a fine of P40,000.00 is
hereby imposed for illegal exaction on two counts plus restitution of the amount of
P28,714.00 to herein complainants in both instances.

Filipino Manpower Services, Inc. is hereby meted a fine of P40,000.00 for two counts
of misrepresentation. Its perpetual disqualification from recruitment activities is
hereby reiterated.

The claim for moral damages is dismissed for lack of jurisdiction.

Respondent Career's counterclaim is likewise dismissed or lack of merit. 5

Private respondents filed a motion for reconsideration and on 4 February 1991, POEA issued a
resolution setting arise its earlier order stating that —

It is worth mentioning at this point that our sole basis for holding respondent Career
liable for illegal exaction was the uncorroborated testimony of the complainants.
 As we have consistently held, (the) charge of illegal exaction is a serious charge
which may cause the suspension or cancellation of the authority or license of the
offending agency. Hence, it should be proven and substantiated by a clear and
convincing evidence. Mere allegation of complainant that the agency charged more
than the authorized fee will not suffice to indict the agency for illegal exaction unless
the allegation is supported by other corroborative circumstantial evidence.

Thus, for lack of concrete evidence or proof to support our initial findings, we are
inclined to reconsider the penalty imposed upon respondent.

Foregoing premises, the penalty of suspension imposed upon respondent Career

Planners Specialist(s) International, Inc. pursuant to our Order dated May 7, 1990 is
hereby LIFTED.

Accordingly, the alternative fine of P40,000.00 which was paid under protest by
respondent is hereby ordered refunded to them. 6

Petitioners appealed to the Secretary of Labor. On 5 July 1991, then Undersecretary of Labor Ma.
Nieves Roldan-Confesor (now Secretary of Labor) sustained the reconsideration of POEA. Her
Order reads in part —

We find . . . no cogent reason or sufficient justification to reverse or modify the

assailed Order.

Records reveal that the only basis for holding respondent Career Planners
Specialist(s) International, Inc., liable for illegal exaction, as held in the previous
POEA Order dated May 7, 1990 was the uncorroborated testimony of the
complainants. There was no concrete evidence or proof to support the POEA
Administrator's initial findings.

We take this opportunity to inform the complainants that the charge of illegal exaction
is a serious charge which may cause the suspension or cancellation of the authority
or license of a recruitment agency. Therefore, said charge must be proven and
substantiated by clear and convincing evidence. A mere allegation will not suffice to
find an agency liable for illegal exaction unless said allegation is supported by other
corroborative circumstantial evidence. In this connection, records show that
complainants could not narrate the specific circumstances surrounding their alleged
payment of the amount of P30,000.00. They could not even remember the specific
date when said amount was paid to respondent agency. In addition, when
complainants were separately questioned as to how the money was kept bundled
together prior to being handed to respondent agency for payment, Gloria Manalo
said it was wrapped in a piece of paper while Vicente Manalo said it was placed
inside an envelope. 7

On the charge of petitioners that they were given jobs (driver/domestic help) different from those
advertised by private respondents, the Undersecretary ruled that there was no misrepresentation by
way of false advertisement because it was established that private respondents also caused to be
printed in the same newspaper page a second box looking for a couple driver/domestic help.

In her Order of 9 October 1991, then Undersecretary Ma. Nieves Roldan-Confesor denied
petitioners' motion for reconsideration. 8

In the present recourse, petitioners claim that public respondent POEA committed a fatal jurisdictional error when it resolved private
respondents' motion for reconsideration in violation of Rule V, Book VI of the 1985 POEA Rules and Regulations directing the transmittal of
motions for reconsideration to the National Labor Relations Commission (NLRC) for determination. Consequently, for want of legal
competence to act on said motion, the Order of 4 February 1991, as well as the subsequent orders of public respondent Undersecretary of
Labor dated 5 July 1991 and 9 October 1991, is null and void.

In Aguinaldo Industries Corporation v. Commissioner of Internal Revenue 9 We ruled —

To allow a litigant to assume a different posture when he comes before the court and
challenge the position he had accepted at the administrative level, would be to
sanction a procedure whereby the court — which is supposed
to review administrative determinations — would not review, but determine and
decide for the first time, a question not raised at the administrative forum. This
 cannot be permitted, for the same reason that underlies the requirement of prior
exhaustion of administrative remedies to give administrative authorities the prior
opportunity to decide controversies within its competence, and in much the same
way that, on the judicial level, issues not raised in the lower court cannot be raised
for the first time on appeal.

The alleged procedural lapse by respondent POEA was raised by petitioners only before Us,
notwithstanding that such ground was already existing when they appealed to the Secretary of
Labor. Ironically, petitioners now question the jurisdiction of the Secretary of Labor over the appeal
which they themselves elevated to that office. When petitioners filed their motion for reconsideration
with the Undersecretary of Labor, this procedural issue was not even mentioned. Clearly, it would be
the height of unfairness and inequity if We now allow petitioners to backtrack after getting an
unfavorable verdict from public respondents whose authority they themselves involved. In Tijam
v.Sibonghanoy 10 We said: ". . . we frown upon the "undesirable practice" of a party submitting his
case for decision and then accepting the judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse . . . ."

In this regard, however, We find no procedural infirmity constituting reversible error.

The 1985 POEA Rules and Regulations 11 is divided into eight (8) Books. Book VI, cited by
petitioners, is entitled "Adjudication Rules". The procedure outlined therein relates to the original and
exclusive jurisdiction exercised by POEA through its Adjudication Department "to hear and decide all
cases involving employer-employee relations arising out of or by virtue of a law or contact involving
Filipino workers for overseas employment," involving "[v]iolation of the terms and conditions of
employment . . . . [d]isputes relating to the implementation and interpretation of employment
contracts . . . [m]oney claims of workers against their employers and/or their duly authorized agents
in the Philippines or vice versa . . . . [c]laims for death, disability and other benefits arising out of
employment . . . . and . . . . [v]iolations of our non-compliance with any compromise agreement
entered into by and between the parties in an overseas employment contract."

On the other hand, Book II entitled "Licensing and Regulations" of the 1985 POEA Rules and
Regulations, notably Rule VI cited by private respondents, refers particularly to the procedure for
suspension, cancellation and revocation of Authority or License 12 through the POEA Licensing and
Regulation Office (LRO).

The controversy in the present case centers on the liability of private respondents for illegal exaction,
false advertisement and violation of pertinent laws and rules on recruitment of overseas workers and
the resulting imposition of penalty of suspension of the Authority of respondent CPSI. Quite plainly,
We are not concerned here with employer-employee relations, the procedure of which is outlined in
Book VI; rather, with the suspension or revocation of Authority embodied in Book II.

Evidently, no jurisdictional error was accordingly committed because in cases affecting suspension,
revocation or cancellation of Authority, the POEA has authority under Sec. 18, Rule VI, Book II, to
resolve motions for reconsideration which may thereafter be appealed to the Secretary of Labor.
Section 18, provides: "A motion for reconsideration of an order o suspension (issued by POEA) or an
appeal to the Minister (now Secretary of Labor) from an order cancelling a license or authority may
be entertained only when filed with the LRO within ten (10) working days from the service of the
order or decision" (parenthesis supplied).

Petitioners also argue that public respondents gravely abused their discretion when they violated
petitioners' right to administrative due process by requiring clear and convincing evidence to
establish the charge illegal exaction. This point is well taken. There was grave abuse of discretion.

In the administrative proceedings for cancellation, revocation or suspension of Authority or License,

no rule requires that testimonies of complainants be corroborated by documentary evidence, if the
charge of unlawful exaction is substantially proven. All administrative determinations require only
substantial proof and not clear and convincing evidence as erroneously contended by pubic
respondents.

Clear and convincing proof is ". . . more than mere preponderance, but not to extent of such certainty
as is required beyond reasonable doubt as in criminal cases . . ." 13 while substantial evidence ". . .
consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance .
. . ." 14 Consequently, in the hierarchy of evidentiary values, We find proof beyond reasonable doubt
at the highest level, followed by clear and convincing evidence, preponderance of evidence, and
substantial evidence, in that order.

That the administrative determination of facts may result in the suspension or revocation of the
authority of CPSI does not require a higher degree of proof. The proceedings are administrative, and
the consequent imposition of suspension/revocation of Authority/License does not make the
proceedings criminal. Moreover, the sanctions are administrative and, accordingly, their infliction
does not give rise to double jeopardy when a criminal action is instituted for the same act.

Thus We held in Atlas Consolidated Mining and Development Corporation v. Factoran, Jr. 15 —

. . . it is sufficient that administrative findings of fact are supported by evidence, or

negatively stated, it is sufficient that findings of fact are not shown to be unsupported
by evidence. Substantial evidence is all that is needed to support an administrative
finding of fact, and substantial evidence is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion (Ang Tibay v. Court of
Industrial Relations, 69 Phil. 635, 642; Police Commission v. Lood, 127 SCRA 762
[1984].

The POEA, after assessing the evidence of both parties, found that private respondents collected
from petitioners P30,000.00 as placement fees; consequently, it ruled that there was illegal exaction.
Surprisingly, without altering its findings of fact, POEA reconsidered its order. It held that
uncorroborated testimonies were not enough to conclude that illegal exaction was committed,
particularly so that this might result in the suspension or revocation of respondents' authority to
engage in recruitment activities. The premise that testimonies of petitioners should be supported by
some other form of evidence is, to say the least, fallacious. In Castillo v. Court of Appeals, 16 where
the appellate court reversed the findings of fact of the trial court by requiring a higher degree of
proof, We held —

. . . we find no strong and cogent reason which justifies the appellate court's
deviation from the findings and conclusions of the trial court. As pointed out in
Hernandez v. Intermediate Appellate Court (189 SCRA 758 [1990]), in agrarian
cases, all that is required is mere substantial evidence. Hence, the agrarian court's
findings of fact which went beyond the minimum evidentiary support demanded by
law, that is, supported by substantial evidence, are final and conclusive and cannot
be reversed by the appellate tribunal.

The seeming discrepancy in the statements of the witnesses (one saying the money was wrapped in
paper, the other, that the money was in an envelope; neither testified on the specific date of the
exaction), refers only to minor details. Perhaps it would be different if the variance refers to essential
points, e.g., whether the amount of P30,000.00 was actually paid by petitioners to private
respondents. Consequently, whether the money was wrapped in paper, or placed in an envelope, or
unwrapped or whether the parties could not recall when there payment was effected is unimportant.
After all, the money could have been wrapped in paper and placed in the envelope, or placed in the
envelope without being wrapped, or wrapped with use of an unpasted envelope that appeared to be
the envelope itself. In either case, petitioners, could have viewed them differently; but the difference
is ultimately inconsequential. The crucial point to consider is that the petitioners categorically and
unequivocally testified that respondents collected from them the amount of P30,000.00 as their
placement fees and that they paid the amount demanded. In this regard, it may be worth to
emphasize that only substantial evidence, not necessarily clear and convincing evidence, is
required. Moreover, when confronted with conflicting assertions, the rule that "as between a positive
and categorical testimony which has a ring of truth on one hand, and a bare denial on the other, the
former is generally held to prevail . . . ." 17 applies.

But even on the supposition that there was no payment of P30,000.00, it cannot be denied that
private respondents required petitioners to execute a promissory note for P10,000.00 purportedly
because petitioners were hired without paying placement fees. The mere charging of P10,000.00,
standing alone, is enough to hold private respondents answerable for illegal exaction because the
allowable amount to be collected per contract worker according to respondent POEA was only
P1,500.00, or P3,000.00 for both petitioners.

WHEREFORE, the petition is GRANTED. The challenged Orders of respondent Undersecretary of

Labor dated 5 July 1991 and 9 October 1991, as well as the Resolution of respondent POEA dated 4
February 1991, having been issued with grave abuse of discretion amounting to lack or excess of
jurisdiction are SET ASIDE, and the original Order of respondent POEA dated 7 May 1990 is
ordered REINSTATED and AFFIRMED.

SO ORDERED.
G.R. No. 170598 October 9, 2013

FAR EAST BANK TRUST COMPANY, Petitioner,

vs.
ROBERTO MAR CHANTE, a.k.a. ROBERT MAR G. CHAN, Respondents.

DECISION

BERSAMIN, J.:

In this dispute between a. bank and its depositor over liability for several supposedly fraudulent
withdrawals from the latter s account through an automated tellering machine (ATM), we hereby
resolve the issue of liability against the bank because of the intervention of a system bug that
facilitated the purported withdrawals.

The Case

Under review on certiorari is the decision promulgated on August l, 2005,1 whereby the Court of
Appeals (CA) reversed the judgment the Regional Trial Court, Branch 51, in Manila (RTC) rendered
in favor of the petitioner on May 14, 1998 in Civil Case No. 92-61706.2 Thereby, the CA relieved the
depositor of any liability for the supposedly fraudulent withdrawals.

Antecedents

Robert Mar Chante, also known as Robert Mar G. Chan (Chan), was a current account depositor of
petitioner Far East Bank & Trust Co. (FEBTC) at its Ongpin Branch (Current Account No. 5012-
00340-3). FEBTC issued to him Far East Card No. 05-01120-5-0 with July 1993 as the expiry date.
The card, known as a "Do-It-All" card to handle credit card and ATM transactions, was tagged in his
current account. As a security feature, a personal identification number (PIN), known only to Chan as
the depositor, was required in order to gain access to the account. Upon the card’s issuance, FEBTC
required him as the depositor to key in the six-digit PIN. Thus, with the use of his card and the PIN,
he could then deposit and withdraw funds from his current account from any FEBTC ATM facility,
including the MEGALINK facilities of other member banks that included the Philippine National Bank
(PNB).

Civil Case No. 92-61706 sprang from the complaint brought by petitioner Far East Bank & Trust Co.
(FEBTC) on July 1, 1992 in the RTC,3 to recover from Chan the principal sum of ₱770,488.30
representing the unpaid balance of the amount fraudulently withdrawn from Chan’s Current Account
No. 5012-00340-3 with the use of Far East Card No. 05-01120-5-0.

FEBTC alleged that between 8:52 p.m. of May 4, 1992 and 4:06 a.m. of May 5, 1992, Chan had
used Far East Card No. 05-01120-5-0 to withdraw funds totaling ₱967,000.00 from the PNB-
MEGALINK ATM facility at the Manila Pavilion Hotel in Manila; that the withdrawals were done in a
series of 242 transactions with the use of the same machine, at ₱4,000.00/withdrawal, except for
transaction No. 108 at 3:51 a.m. of May 5, 1992, when the machine dispensed only ₱3,000.00; that
MEGALINK’S journal tapes showed that Far East Card No. 05-01120-5-0 had been used in all the
242 transactions; and that the transactions were processed and recorded by the respective
computer systems of PNB and MEGALINK despite the following circumstances, namely: (a) the
offline status of the branch of account (FEBTC Ongpin Branch); (b) Chan’s account balance being
only ₱198,511.70 at the time, as shown in the bank statement; (c) the maximum withdrawal limit of
the ATM facility being ₱50,000.00/day; and (d) his withdrawal transactions not being reflected in his
account, and no debits or deductions from his current account with the FEBTC Ongpin Branch being
recorded.

FEBTC added that at the time of the ATM withdrawal transactions, there was an error in its computer
system known as "system bug" whose nature had allowed Chan to successfully withdraw funds in
excess of his current credit balance of ₱198,511.70; and that Chan had taken advantage of the
system bug to do the withdrawal transactions.

On his part, Chan denied liability. Although admitting his physical possession of Far East Card No.
05-01120-5-0 on May 4 and May 5, 1992, he denied making the ATM withdrawals totaling
₱967,000.00, and instead insisted that he had been actually home at the time of the withdrawals. He
alluded to a possible "inside job" as the cause of the supposed withdrawals, citing a newspaper
report to the effect that an employee of FEBTC’s had admitted having debited accounts of its
depositors by using his knowledge of computers as well as information available to him. Chan
claimed that it would be physically impossible for any human being like him to stand long hours in
front of the ATM facility just to withdraw funds. He contested the debiting of his account, stating that
the debiting had affected his business and had caused him to suffer great humiliation after the
dishonor of his sufficiently-funded checks by FEBTC.

The records show that FEBTC discovered the system bug only after its routine reconciliation of the
ATM-MEGALINK transactions on May 7, 1992; that it immediately adopted remedial and corrective
measures to protect its interest in order to avoid incurring further damage as well as to prevent a
recurrence of the incident; that one of the measures it adopted pursuant to its ATM Service
Agreement with Chan was to program its computer system to repossess his ATM card; that his ATM
card was repossessed at the Ermita Branch of FEBTC when he again attempted to withdraw at the
ATM facility there; that the ATM facility retained his ATM card until its recovery by the bank; and that
FEBTC conducted an in-depth investigation and a time-and-motion study of the withdrawals in
question.

On May 14, 1992, FEBTC debited his current account in the amount of ₱192,517.20 pursuant to
Chan’s ATM Service Agreement. It debited the further sum of ₱3,000.00 on May 18, 1992, leaving
the unrecovered portion of the funds allegedly withdrawn by him at ₱770,488.30. Thus, on May 14
and May 18, 1992, FEBTC sent to Chan letters demanding the reimbursement of the unrecovered
balance of ₱770,488.30, but he turned a deaf ear to the demands, impelling it to bring this case on
July 1, 1992.4

Ruling of the RTC

As reflected in the pre-trial order of October 19, 1992, the issues to be resolved were, firstly, whether
or not Chan had himself withdrawn the total sum of ₱967,000.00 with the use of his Far East Card
No. 05-01120-5-0 at the PNB-MEGALINK ATM facility; and, secondly, if the answer to the first issue
was that he did, whether or not he was liable to reimburse to FEBTC the amount of ₱770,488.30 as
actual damages, plus interest.5

On May 14, 1998, the RTC rendered judgment in favor of FEBTC, pertinently holding and ruling as
follows:6

In the instant case, what happened was that the defendant who was at the U.N. Branch of the PNB
used his card. He entered his PIN to have access to a withdrawal transaction from his account in Far
East Bank, Ongpin Branch. However, after recognizing the card and went to the path of his account
it could not get a signal to proceed with the transaction so it proceeded to the other path who gave
the signal to go on and dispense money. But there was a computer error as it did not only dispense
the money limit for the day buty it continued to dispense a lot more until it reached the amount of
₱967,000.00 which took the defendant till the hours of the morning to obtain. But defendant says he
did not use his card. He alleges that it could be an inside job just like what happened to the said
bank which was published in the newspaper wherein the bank employee admitted having done the
theft through his knowledge of the computer. Could this be true?

The Court opines that it is not far-fetched. However why did this Court state that plaintiff’s cause of
action will survive? The action of the defendant after the incident gave him away. Merely two days
after the heavy withdrawal, the defendant returned not at the exact scene of the incident but at a
nearby branch which is also in Ermita and tried again to withdraw. But at this time the bank already
knew what happened so it blocked the card and retained it being a hot card. The defendant was not
successful this time so what he did was to issue a check almost for the whole amount of his balance
in his account leaving only a minimal amount. This incident puzzles the Court. Maybe the defendant
was hoping that the machine nearby may likewise dispense so much amount without being detected.
He will not definitely go back to the U.N. branch as he may think that it is being watched and so he
went to a nearby branch. Unfortunately, luck was not with him this time and his card was taken by
the bank. The fact that he hastily withdrew the balance of his account after his card was retained by
the bank only showed his knowledge that the bank may debit his account. It also showed his intent
to do something further other than first inquire why his card was considered a hot card if he is really
innocent. When he went to the Ermita branch to withdraw from the ATM booth he was intending to
withdraw not more than ₱50,000.00 as it is the bank’s limit for the day and if ever he needed a
bigger amount than ₱50,000.00 immediately he should have gone to the branch for an over the
counter transaction but he did not do so and instead issued a check for ₱190,000.00 dated May 7,
1992 and another check for ₱5,000.00 dated May 13, 1992. To the mind of the Court, to take
advantage of a computer error, to gain sudden and undeserved amount of money should be
condemned in the strongest terms.

There are no available precedents in this case regarding computer errors, but the Court feels that
defendant should be held liable for the mistaken amount he was able to get from the machine based
on the following provisions of the law.

Articles 19, 21, 22 and 23 of the Civil Code x x x.

xxxx

There is likewise one point that the Court would like to discuss about the allegation of the defendant
that it was impossible for him to withdraw the money in such long period and almost minute after
minute. This Court believes that money is the least of all, a person may give priority in life. There are
many who would sacrifice a lot just to have lots of it, so it would not be impossible for one to take
time, stand for several hours and just enter some items in the computer if the return would be
something like a million or close to a million. In fact, the effort exerted was just peanuts compared to
other legitimate ways of earning a living as the only capital or means used to obtain it was the
defendant’s loss of sleep and the time spent in withdrawing the same. Moreover, though the cause
of action in this case may be the erroneous dispensation of money due to computer bug which is not
of defendant’s wrong doing, the Court sees that what was wrong was the failure to return the amount
in excess of what was legally his. There is such a thing as JUSTICE. Justice means rendering to
others their due. A person is just when he is careful about respecting the rights of others, and who
knows too, how to claim what he rightfully deserves as a consequence of fulfilling his duties.

From the foregoing, the conclusion is manifest that plaintiff is within its right in initiating the instant
suit, as defendant’s refusal to pay the claim constitutes the cause of action for sum of money.

xxxx

WHEREFORE, judgment is hereby rendered in favor of the plaintiff Far East Bank and Trust
Company and against the defendant Robert Mar Chante a.k.a. Robert Mar G. Chan ordering the
latter to pay the former the following:

1. the amount of ₱770,488.30 as actual damages representing the unrecovered balance of

the amounts withdrawn by defendant;

2. interest of 24% per annum on the actual damages from July 1, 1992, the date of the filing
of the complaint until fully paid;

3. the amount of ₱100,000.00 as exemplary damages;

4. the sum of ₱30,000.00 as and for attorney’s fees; and

5. the costs of the suit. Defendant’s counterclaim is hereby dismissed for lack of merit.

SO ORDERED.

Ruling of the CA

Chan appealed,7 assigning the following errors to the RTC, to wit:

1. THE TRIAL COURT ERRED IN HOLDING DEFENDANT-APPELLANT LIABLE FOR THE

ALLEGED WITHDRAWAL OF THE AMOUNT OF ₱967,000.00 WITH INTEREST AT THE
RATE OF 24% PER ANNUM BASED MERELY ON CONJECTURES AND SUSPICIONS
NOT ESTABLISHED BY SOLID EVIDENCE;

2. THE TRIAL COURT ERRED IN AWARDING IN FAVOR OF APPELLEE EXEMPLARY

DAMAGES IN THE AMOUNT OF ₱100,000.00 AND ATTORNEY’S FEES IN THE AMOUNT
OF ₱30,000.00;
 3. THE TRIAL COURT ERRED IN NOT ORDERING THE RESTITUTION OF THE AMOUNT
OF ₱196,521.30 ILLEGALLY DEBITED BY APPELLEE FROM APPELLANT’S ACCOUNT.

On August 1, 2005, the CA promulgated the assailed decision, reversing the RTC’s judgment, to wit:

x x x. The issues really before us are issues of contract application and issues of fact that would
require an examination and appreciation of the evidence presented. The first order therefore in our
review of the trial court’s decision is to take stock of the established and undisputed facts, and of the
evidence the parties have presented. We say this at the outset as we believe that it was in this
respect that the lower court failed in its consideration and appreciation of the case.

xxxx

An evidentiary dilemma we face in this case is the fact that there is no direct evidence on the issue
of who made the actual withdrawals. Chan correctly claims that the bank failed to present any
witness testifying that he (Chan) made the actual withdrawals. At the same time, Chan can only rely
on his own uncorroborated testimony that he was at home on the night that withdrawals were made.
We recognize that the bank can claim that no other evidence of actual withdrawal is necessary
because the PIN unique to Chan is already evidence that only Chan or his authorized representative
– and none other – could have accessed his account. But at the same time, we cannot close our
eyes to the fact that computers and the ATM system is not perfect as shown by an incident cited by
Chan involving the FEBTC itself. Aside from the vulnerability to inside staff members, we take
judicial notice that no less than our own Central Bank has publicly warned banks about other
nefarious schemes involving ATM machines. In a March 7, 2003 letter, the Central Bank stated:

March 7, 2003

BSP CIRCULAR LETTER

TO : All Banks

SUBJECT : Technology Fraud on ATM Systems

Please be advised that there were incidents in other countries regarding technology fraud in ATM
systems perpetrated by unscrupulous individuals and/ or syndicates.

These acts are carried out by:

1. A specialized scanner attached to the ATM card slot, and;

2. A pinhole camera

xxxx

In light of the absence of conclusive direct evidence of actual withdrawal that we can rely upon, we
have to depend on evidence "other than direct" to reach verdict in this case.

xxxx

WHEREFORE , premises considered, we hereby GRANT the appeal and accordingly REVERSE
and SET ASIDE the Decision dated May 14, 1998 of the Regional Trial Court of Manila, Branch 51,
in Civil Case No. 92-61706. We accordingly ORDER plaintiff-appellee Far East Bank and Trust
Company (FEBTC) to return to Chan the amount of Php196,571.30 plus 12% interest per annum
computed from August 7, 1992 – the time Chan filed his counterclaim – until the obligation is
satisfied. Costs against the plaintiff-appellee FEBTC.

SO ORDERED.8

FEBTC moved for reconsideration, but the CA denied its motion on November 24, 2005.9

Issues
Hence, FEBTC has appealed, urging the reversal of the CA’s adverse decision, and praying that
Chan be held liable for the withdrawals made from his account on May 4 and May 5, 1992; and that
it should not be held liable to return to Chan the sum of ₱196,571.30 debited from his account.

Ruling

The appeal lacks merit.

FEBTC would want us to hold that Chan had authored the May 4 and May 5, 1992 ATM withdrawals
based on the following attendant factors, namely: (a) ATM transactions were processed and
identified by the PIN, among others; (b) the PIN was exclusive and known only to the account holder;
(c) the ATM was tagged in the cardholder’s account where the ATM transactions were debited or
credited; (d) the account number tagged in the ATM card identified the cardholder; (e) the ATM
withdrawals were documented transactions; and (f) the transactions were strictly monitored and
recorded not only by FEBTC as the bank of account but also by the ATM machine and MEGALINK.
In other words, the ATM transactions in question would not be processed unless the PIN, which was
known only to Chan as the cardholder, had been correctly entered, an indication both that it was his
ATM card that had been used, and that all the transactions had been processed successfully by the
PNB-MEGALINK ATM facility at the Manila Pavilion Hotel with the use of the correct PIN.

We disagree with FEBTC.

Although there was no question that Chan had the physical possession of Far East Card No. 05-
01120-5-0 at the time of the withdrawals, the exclusive possession of the card alone did not suffice
to preponderantly establish that he had himself made the withdrawals, or that he had caused the
withdrawals to be made. In his answer, he denied using the card to withdraw funds from his account
on the dates in question, and averred that the withdrawals had been an "inside job." His denial
effectively traversed FEBTC’s claim of his direct and personal liability for the withdrawals, that it
would lose the case unless it competently and sufficiently established that he had personally made
the withdrawals himself, or that he had caused the withdrawals. In other words, it carried the burden
of proof.

Burden of proof is a term that refers to two separate and quite different concepts, namely: (a) the risk
of non-persuasion, or the burden of persuasion, or simply persuasion burden; and (b) the duty of
producing evidence, or the burden of going forward with the evidence, or simply the production
burden or the burden of evidence.10 In its first concept, it is the duty to establish the truth of a given
proposition or issue by such a quantum of evidence as the law demands in the case at which the
issue arises.11 In its other concept, it is the duty of producing evidence at the beginning or at any
subsequent stage of trial in order to make or meet a prima facie case. Generally speaking, burden of
proof in its second concept passes from party to party as the case progresses, while in its first
concept it rests throughout upon the party asserting the affirmative of the issue.12

The party who alleges an affirmative fact has the burden of proving it because mere allegation of the
fact is not evidence of it.13 Verily, the party who asserts, not he who denies, must prove.14

In civil cases, the burden of proof is on the party who would be defeated if no evidence is given on
either side.15This is because our system frees the trier of facts from the responsibility of investigating
and presenting the facts and arguments, placing that responsibility entirely upon the respective
parties.16 The burden of proof, which may either be on the plaintiff or the defendant, is on the plaintiff
if the defendant denies the factual allegations of the complaint in the manner required by the Rules
of Court; or on the defendant if he admits expressly or impliedly the essential allegations but raises
an affirmative defense or defenses, that, if proved, would exculpate him from liability.17

Section 1, Rule 133 of the Rules of Court sets the quantum of evidence for civil actions, and
delineates how preponderance of evidence is determined, viz :

Section 1. In civil cases, the party having the burden of proof must establish his case by a
preponderance of evidence. In determining where the preponderance or superior weight of evidence
on the issues involved lies, the court may consider all the facts and circumstances of the case, the
witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to
which they are testifying, the nature of the facts to which they testify, the probability or improbability
of their testimony, their interest or want of interest, and also their personal credibility so far as the
same may legitimately appear upon the trial. The court may also consider the number of witnesses,
though the preponderance is not necessarily with the greater number. (Emphasis supplied)
As the rule indicates, preponderant evidence refers to evidence that is of greater weight, or more
convincing, than the evidence offered in opposition to it.18 It is proof that leads the trier of facts to find
that the existence of the contested fact is more probable than its nonexistence.19

Being the plaintiff, FEBTC must rely on the strength of its own evidence instead of upon the
weakness of Chan’s evidence. Its burden of proof thus required it to preponderantly demonstrate
that his ATM card had been used to make the withdrawals, and that he had used the ATM card and
PIN by himself or by another person to make the fraudulent withdrawals. Otherwise, it could not
recover from him any funds supposedly improperly withdrawn from the ATM account. We remind
that as a banking institution, FEBTC had the duty and responsibility to ensure the safety of the funds
it held in trust for its depositors. It could not avoid the duty or evade the responsibility because it
alone should bear the price for the fraud resulting from the system bug on account of its exclusive
control of its computer system.

Did FEBTC discharge its burden of proof?

The CA ruled that FEBTC did not because –

After a review of the records of this case, we find the totality of evidence submitted by FEBTC
insufficient to establish the crucial facts that would justify a judgment in its favor.

To our mind, the fact that Chan’s account number and ATM card number were the ones used for the
withdrawals, by itself, is not sufficient to support the conclusion that he should be deemed to have
made the withdrawals.

FEBTC offers in this regard the PNB ATM’s journal tapes to prove the withdrawals and their details –
the time of the transactions; the account number used; the ATM card number; and the amount
withdrawn – and at the same time declared that these tapes are authentic and genuine. These
tapes, however, are not as reliable as FEBTC represented them to be as they are not even internally
consistent. A disturbing internal discrepancy we note relates to the amounts reflected as "ledger
balance" and "available balance". We find it strange that for every 4,000.00 pesos allegedly
withdrawn by Chan, the available balance increased rather than diminished. Worse, the amount of
available balance as reflected in the tapes was way above the actual available balance of less than
Php200,000.00 that Chan’s current account had at that time. These discrepancies must inevitably
reflect on the integrity of the journal tapes; the proven inconsistencies in some aspects of these
tapes leave the other aspects suspect and uncertain.

But more than this, we are not convinced that the tapes lead us to the inevitable conclusion that
Chan’s card, rather than a replacement card containing Chan’s PIN and card number or some other
equivalent scheme, was used. To our mind, we cannot discount this possibility given the available
technology making computer fraud a possibility, the cited instances of computer security breaches,
the admitted system bug, and – most notably – the fact that the withdrawals were made under
circumstances that took advantage of the system bug. System errors of this kind, when taken
advantage of to the extent that had happened in this case, are planned for. Indeed, prior preparation
must take place to avoid suspicion and attention where the withdrawal was made for seven (7) long
hours in a place frequented by hundreds of guests, over 242 transactions where the physical volume
of the money withdrawn was not insignificant. To say that this was done by the owner of the account
based solely on the records of the transactions, is a convenient but not a convincing explanation.20

In our view, the CA’s ruling was correct.

To start with, Edgar Munarriz, FEBTC’s very own Systems Analyst, admitted that the bug infecting
the bank’s computer system had facilitated the fraudulent withdrawals.21 This admission impelled the
CA to thoroughly dissect the situation in order to determine the consequences of the intervention of
the system bug in FEBTC’s computer system. It ultimately determined thusly:

Significantly, FEBTC made the admission that there was a program bug in its computer system. To
digress, computers are run based on specific pre-arranged instructions or "programs" that act on
data or information that computer users input. Computers can only process these inputted data or
information according to the installed programs. Thus, computers are as efficient, as accurate and as
convenient to use as the instructions in their installed programs. They can count, sort, compute and
arrive at decisions but they do so only and strictly in accordance with the programs that make them
work. To cite an easy example, a computer can be programmed to sort a stack of cards prepared by
male and female clients, into male and female stacks, respectively. To do this, the computer will first
scan a card and look at the place ("a field") where the male/female information can be found. This
information may be in an appropriate box which the bank client checks or shades to indicate if
he/she is male or female. The computer will check if the box beside the word "Female" is shaded. If
it is, it will send the card to the "Female" bin. If the box beside the "male" is shaded, it will send the
card to the "Male" bin. If both the squares are shaded or none is shaded or the card cannot be read,
it will send the card to the "Unknown" bin. This way, the female cards and the male cards can be
sorted efficiently. However, the program instructions can be written in such a way that the computer
can only make two decisions, that is, if the Female box is shaded, then the card goes to the
"Female" bin; otherwise, the card goes to the "Male" bin. In this program, all the Female cards will be
sorted correctly but the Male bin will contain all the other cards, that is, the Male cards, the cards
with no shading at all, and all the other cards that cannot be classified.

The imperfect results arose from the imperfect program instructions or from a program "bug".
Something very close to this example happened in the present case.

According to the testimony of the FEBTC’s systems analyst, there were two computer programs that
were involved in the transactions: CAPDROTH and SCPUP 900. CAPDROTH is the program that
validates if the account exists in the FEBTC files, if the transaction is valid, and if the branch where
the account is maintained is ON-LINE (i.e. continuously sending data). When the Chan transaction
entered the system, it was validated by CAPDROTH which, on seeing that the FEBTC-Ongpin
branch was off-line, returned a decision code passing on the decision to authorize the transaction to
the SCPUP 900, another module. However, SCPUP 900 was not expecting this type of response or
decision code. As the SCPUP 900 program was originally written, it will send back an error message
and abort a requested transaction if it receives an error message from any other module; otherwise,
it will send a message authorizing the transaction. In other words, SCPUP 900 had only two
decisions to make: check if the message is an error message, if not then, authorize. Since what it
received in the disputed transactions were not error messages and were not also authorizations, it
sent back authorization messages allowing the cash withdrawals. It kept on sending authorization
messages for the 242 cash withdrawal transactions made from Chan’s account between the evening
of May 4 and early morning of May 5, 1992. This program bug was the reason the 242 cash
withdrawals were allowed by the PNB ATM-Megalink machine.

The program bug occurred because of the simultaneous presence of three conditions that allowed it
to happen: (1) the withdrawal transactions involved a current account; (2) the current account was
with a branch that at that time was off-line; and (3) the transaction originated from MEGALINK (i.e.,
through MEGALINK through a member bank other than FEBTC). Because of the bug, Chan’s
account was not accessed at the time of the transactions so that withdrawals in excess of what the
account contained were allowed. Additionally, FEBTC’s rule that only a maximum withdrawable
amount per day (in the present case ₱50,000.00 per day) can be made from an ATM account, was
by-passed. Thus, 242 withdrawals were made over an eight hour period, in the total amount of
₱967,000.00.22

Secondly, the RTC’s deductions on the cause of the withdrawals were faulty. In holding against
Chan, the RTC chiefly relied on inferences drawn from his acts subsequent to the series of
withdrawals, specifically his attempt to withdraw funds from his account at an FEBTC ATM facility in
Ermita, Manila barely two days after the questioned withdrawals; his issuance of a check for
₱190,000.00 immediately after the capture of his ATM card by the ATM facility; his failure to
immediately report the capture of his ATM card to FEBTC; and his going to FEBTC only after the
dishonor of the check he had issued following the freezing of his account. The inferences were not
warranted, however, because the subsequent acts would not persuasively establish his actual
participation in the withdrawals due to their being actually susceptible of other interpretations
consistent with his innocence.

We join the CA’s observation that Chan’s subsequent acts "could have been impelled by so many
reasons and motivations, and cannot simply be given the meaning that the lower court attributed to
them," and, instead, were even consistent with the purpose and nature of his maintaining the current
account deposit with FEBTC, rendering the acts "not unusual nor … illegal."23 Although he was
expected to forthwith bring his card’s capture to FEBTC’s attention, that he did not do so could have
other plausible explanations consistent with good faith, among them his being constantly occupied
as a businessman to attend to the multifarious activities of his business. He might have also honestly
believed that he still had the sufficient funds in his current account, as borne out by his issuance of a
check instead after the capture of the card so as not for him to undermine any financial obligation
then becoming due. Nor should his opting to withdraw funds from his account at the ATM facility in
Ermita in less than two days after the questioned withdrawals manifest responsibility on his part, for
he could also be properly presumed to be then still unaware of the situation involving his account.
We note that his letters24 written in response to FEBTC’s written demands to him disclosed honest
intentions rather than malice.

Thirdly, the RTC ignored the likelihood that somebody other than Chan familiar with the bug infection
of FEBTC’s computer system at the time of the withdrawals and adept with the workings of the
computer system had committed the fraud. This likelihood was not far-fetched considering that
FEBTC had immediately adopted corrective measures upon its discovery of the system bug, by
which FEBTC admitted its negligence in ensuring an error-free computer system; and that the
system bug had affected only the account of Chan.25 Truly, the trial court misapprehended the extent
to which the system bug had made the computer system of FEBTC stumble in serious error.

Fourthly, and perhaps the most damaging lapse, was that FEBTC failed to establish that the PNB-
MEGALINK’s ATM facility at the Manila Pavilion Hotel had actually dispensed cash in the very
significantly large amount alleged during the series of questioned withdrawals. For sure, FEBTC
should have proved the actual dispensing of funds from the ATM facility as the factual basis for its
claim against Chan. It did require PNB to furnish a validated showing of the exact level of cash then
carried by the latter’s ATM facility in the Manila Pavilion Hotel on May 4, 1992.26 Yet, when PNB
employee Erwin Arellano stood as a witness for FEBTC, he confirmed the authenticity of the journal
tapes that had recorded Chan’s May 4 and May 5, 1992 supposed ATM transactions but did not
categorically state how much funds PNB-MEGALINK’s ATM facility at the Manila Pavilion Hotel had
exactly carried at the time of the withdrawals, particularly the amounts immediately preceding and
immediately following the series of withdrawals. The omission left a yawning gap in the evidence
against Chan.

And lastly, Chan’s allegation of an "inside job" accounting for the anomalous withdrawals should not
be quickly dismissed as unworthy of credence or weight. FEBTC employee Manuel Del Castillo,
another witness for FEBTC, revealed that FEBTC had previously encountered problems of bank
accounts being debited despite the absence of any withdrawal transactions by their owners. He
attributed the problems to the erroneous tagging of the affected accounts as somebody else’s
account, allowing the latter to withdraw from the affected accounts with the use of the latter’s own
ATM card, and to the former’s account being debited.27 The revelation of Del Castillo tended to
support Chan’s denial of liability, as it showed the possibility of withdrawals being made by another
person despite the PIN being an exclusive access number known only to the cardholder.28

It is true that Del Castillo also declared that FEBTC did not store the PINs of its clients’ ATM
cards. However, he mentioned that FEBTC had stored the opposite numbers corresponding to the
1âwphi1

PINs, which meant that the PINs did not remain entirely irretrievable at all times and in all cases by
any of its officers or employees with access to the bank’s computer system. Accordingly, Del
Castillo’s assertion that the PINs were rendered useless upon being entered in the bank’s computer
system did not entirely disclose how the information on the PINs of the depositors was stored or
discarded as to become useless for any purpose.

In view of the foregoing, FEBTC did not present preponderant evidence proving Chan’s liability for
the supposedly fraudulent withdrawals. It thus failed in discharging its burden of persuasion.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and DIRECTS the
petitioner to pay the costs of suit.

SO ORDERED.