Page 1 of 78
Republic of the Philippines case.” Likewise, the first requisite was deemed satisfied because one of the parties
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 181829               September 1, 2010
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
SATURNINO VILLANUEVA, Appellant.
Criminal Law; Rape; Evidence; In rape cases, the accused may be convicted solely on
the testimony of the victim, provided the testimony is credible, natural, convincing, and
consistent with human nature and the normal course of things.—We also agree with the
ruling of the appellate court that appellant could be convicted of rape even without the
medical certificate. “In rape cases, the accused may be convicted solely on the testimony
of the victim, provided the testimony is credible, natural, convincing, and consistent with
human nature and the normal course of things.” As stated above, “AAA’s” testimony was
credible and convincing. As such, appellant’s conviction could rest solely on it. The
medical certificate would only serve as corroborative evidence.
Same; Same; Same; The court shall consider no evidence which has not been formally
offered; the purpose for which the evidence is offered must be specified.—We, however,
agree with the appellant that both the medical certificate and “AAA’s” birth certificate,
although marked as exhibits during the pre-trial, should not have been considered by
the trial court and the CA because they were not formally offered in evidence. Section 34,
Rule 132 of the Rules of Court explicitly provides: “The court shall consider no evidence
which has not been formally offered. The purpose for which the evidence is offered must
be specified.”
Same; Same; Same; Formal Offer of Exhibits; Evidence, although not formally offered
in evidence, may be “admitted and considered by the trial court provided the following
requirements are present, viz.: first, the same must have been duly identified by testimony
duly recorded and, second, the same must have been incorporated in the records of the
case.”—In Mato v. Court of Appeals, 250 SCRA 283 (1995), we concretized the above
ruling by holding that evidence, although not formally offered in evidence, may be
“admitted and considered by the trial court provided the following requirements are
present, viz.: first, the same must have been duly identified by testimony duly recorded
and, second, the same must have been incorporated in the records of the case.” In Ramos
v. Dizon, 498 SCRA 17 (2006), we deemed the exhibits to have been incorporated into
the records because they had been “presented and marked during the pre-trial of the
therein explained the contents of the exhibits when interrogated by the respondents’
counsel.
Same; Same; Same; Qualifying Circumstances; Minority Relationship; As a qualifying
circumstance of the crime of rape, the concurrence of the victim’s minority and her
relationship to the accused–appellant must be both alleged and proven beyond reasonable
doubt.—In view of the foregoing, we find that the prosecution did not present any
satisfactory evidence to prove “AAA’s” minority. “In the prosecution of criminal cases,
x x x, nothing but proof beyond reasonable doubt of every fact necessary to constitute
the crime with which an accused is charged must be established. Qualifying
circumstances or special qualifying circumstances must be proved with equal certainty
and clearness as the crime itself; otherwise, there can be no conviction of the crime in its
qualified form. As a qualifying circumstance of the crime of rape, the concurrence of the
victim’s minority and her relationship to the accused-appellant must be both alleged and
proven beyond reasonable doubt.”
DECISION
DEL CASTILLO, J.:
On appeal is the November 5, 2007 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-
H.C. No. 02210 which affirmed with modification the November 28, 2003 Decision 2 of
the Regional Trial Court (RTC) of Tayug, Pangasinan, Branch 51. The CA found appellant
Saturnino Villanueva guilty beyond reasonable doubt of three counts of qualified rape
and sentenced him to suffer the penalty of reclusion perpetua and to pay his victim the
amounts of ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages, and
₱25,000.00 as exemplary damages, for each count.
Factual Antecedents:
On November 6, 2002, three Informations were filed against appellant for the crime of
rape. The accusatory portions of the Informations read:
Crim. Case No. T-3157:
That on or about the 9th day of June, 2002, at dawn, x x x, province of Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused who is the father of complainant, armed with a bladed weapon, by means of
force, threat and intimidation, did then and there willfully, unlawfully and feloniously
have sexual intercourse with one "AAA,"3 a minor 12 years of age, against her will and
consent, to the damage and prejudice of said "AAA."
 Page 2 of 78

CONTRARY to Article 335 of the Revised Penal Code, as amended by Republic Act 8353. 4 PROS. ULANDAY:
Q Will you please state your name, age and other personal circumstances?
Crim. Case No. T-3158: WITNESS:
A I am "AAA," 13 years old, out-of-school youth, presently residing at x x x 11
That on or about the 27th day of September, 1999, in the evening, at x x x, province of xxxx
Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above- PROS. ULANDAY:
named accused who is the father of complainant, armed with a bladed weapon, by Q Madam Witness, do you still remember September 27, 1999?
means of force, threat and intimidation, did then and there willfully, unlawfully and A Yes, sir.
feloniously have sexual intercourse with one "AAA," a minor 9 years of age, against her Q Why do you remember that particular date?
will and consent, to the damage and prejudicie of said "AAA." A That was the birthday of my father and the date when he touched me, sir.
xxxx
Q Who rape[d] you?
CONTRARY to Article 335 of the Revised Penal Code, as amended by Republic Act 8353. 5 A My papa, sir. Witness pointed to the accused.
xxxx
Crim. Case No. T-3159: PROS. ULANDAY:
Q You claimed that your father touched and used you. How did he begin in touching
That on or about the 28th day of September, 1999, at dawn, at x x x, province of you?
Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above- A He tied me, sir.
named accused who is the father of complainant, armed with a bladed weapon, by xxxx
means of force, threat and intimidation, did then and there willfully, unlawfully and Q What part of your body was x x x tied by your father?
feloniously have sexual intercourse with one "AAA," a minor 9 years of age, against her A My mouth, sir.
will and consent, to the damage and prejudice of said "AAA." Q What other parts of your body, if there [are] any?
A My hands and my feet, sir.
CONTRARY to Article 335 of the Revised Penal Code, as amended by Republic Act 8353. 6 PROS. ULANDAY:
My witness is crying, your Honor.12
When arraigned on November 14, 2002, appellant pleaded not guilty to all charges. 7 xxxx
Q Now, after your father tied you on September 27, 1999, what did he do, if there’s
any?
During pre-trial, the parties stipulated that the appellant is the father of "AAA." It was
A He raped me, sir.
likewise agreed that "AAA" was below 12 years of age when the rape incidents
COURT:
happened.8 "AAA’s" birth and medical certificates were likewise marked as Exhibits "A"
Q What do you mean by x x x saying he raped you?
and "C," respectively.9
xxxx
A He undressed me, sir.
Thereafter, the cases were tried jointly.10 xxxx
COURT:
Version of the Prosecution And we make of record that [witness is now] in tears.13
xxxx
The prosecution presented "AAA" as its witness. "AAA" narrated that when she was PROS. ULANDAY:
about 4 years old, her mother left her in the care of her father, herein appellant. Since Q Madam Witness, during the last hearing you uttered the word "incua na." What do
then, she had been living with her father. you mean by that?
A He inserted his penis into my vagina, sir.
"AAA" claimed that appellant sexually abused her on September 27 and 28, 1999 and on Q How long a time did your father [insert] his penis into your vagina?
June 9, 2002. During her testimony, "AAA" narrated that: A About two minutes, sir.
 Page 3 of 78

Q At early dawn of September 28, 1999, what happened if any, between you and your The defense presented appellant as its first witness. In his testimony, appellant admitted
father? that "AAA" is his daughter.15 He also admitted that on September 27 and 28, 1999 and
A The same, sir. June 9, 2002, he was living in the same house as "AAA."16 However, when asked
Q What do you mean by the same? regarding the rape charges filed against him by his daughter, appellant denied the same.
A That he inserted his penis into my vagina, sir. Thus:
Q Before your father inserted his penis into your vagina, what did he do, if there was
any? Q And this daughter of your[s] now charge you [with] rape in Crim. Case Nos. T-
A He first undressed me, sir. 3157/3158/3159 for allegedly having sexual intercourse with her against her
Q While he was undressing you what were you doing, if any? will and consent. What can you say against these charges by your daughter?
A I failed to do any, sir.
Q Why did you fail to do any? A [Those are] not true, sir.17
A Because I was afraid, sir.
Q Why were you afraid at the time?
The defense next presented Marcelino Villanueva (Marcelino) who testified that he is the
A Because he threatened me, sir.
father of the appellant.18 He claimed that "AAA" filed the rape cases against appellant
Q How did he [threaten] you?
because the latter forbade her to entertain suitors. 19 Marcelino also alleged that after
A That if I would report the matter to anyone he would kill the person to whom I will
appellant was incarcerated, "AAA" eloped with her 20-year old boyfriend and that "AAA"
report, sir.
only separated from her boyfriend when she was brought under the care of the
Q Do you remember June 9, 2002 at 3:00 o’clock dawn?
Department of Social Welfare and Development.20 When asked how old "AAA" was when
A Yes, sir.
she allegedly eloped with her boyfriend, Marcelino answered that "AAA" was only 13
Q Why do you remember that particular date?
years old.21
A Because he again raped me, sir.
Q Who raped you?
A My father, sir. Ruling of the Regional Trial Court
Q In what particular place [were] you raped?
A In our house, sir. The trial court lent credence to the testimony of "AAA." However, it noted that although
xxxx it was agreed upon during the pre-trial that "AAA" was a minor below 12 years of age,
Q You claimed that you were raped by your father, how did he rape you? the fact remains that "AAA" was 12 years, six months and 19 days when she was
A He undressed me, sir. ravished by the appellant on June 9, 2002. 22 The court below also observed that "AAA
Q What else did he do aside from undressing you? has always been a pathetic child of oppression, abuse and neglect" and that "[h]er
A He poked a knife at me, sir. innocence, tender age, dependence [on appellant] for survival, and her virtual
Q And after poking a knife at you, what happened next, if any? orphanhood sufficed to qualify every sexual molestation perpetrated by her father as
A Then he touched (kinuti) me, sir. rape x x x."23
Q What part of your body was touched by your father?
A My vagina, sir. The dispositive portion of the Decision reads:
Q How did he touch your vagina?
A He inserted his penis into my vagina, sir. WHEREFORE, finding the accused SATURNINO VILLANUEVA guilty beyond reasonable
Q What happened when he inserted his penis into your vagina? doubt of three counts of rape, defined and penalized by Article 266-A of the Revised
A I cried, sir.14 Penal Code, perpetrated against [his] daughter on September 27, 1999, September 28,
1999 and June 9, 2002, x x x and as mandated by Article 266-B, same Code, the Court
After the presentation of "AAA’s" testimony, the prosecution rested its case. hereby sentences him to suffer the penalty of DEATH for each offense, to indemnify the
complainant "AAA" for damages in the amount of ₱50,000.00 per [count], and to pay the
Version of the Defense costs.

SO ORDERED.24
Ruling of the Court of Appeals
In his brief filed before the appellate court, appellant claimed that the prosecution failed
to present evidence that would overcome the presumption of his innocence. Appellant
also alleged that the trial court erred in lending credence to the unrealistic and
unnatural testimony of "AAA."25 He claimed that it was unusual for "AAA" not to offer
any resistance to the advances allegedly made by him considering that he was unarmed.
According to the appellant, "AAA" should have struggled or at least offered some
resistance because she was not completely helpless. 26 Appellant also suggested that
"AAA" must have been coached because initially, she did not know the acts which
constitute rape. However, during the succeeding hearings, "AAA" allegedly testified in
detail the bestial acts committed against her.27
Moreover, appellant argued that the prosecution failed to formally offer in evidence the
medical certificate and to present the doctor who conducted the medical examination to
testify on his findings.28 Likewise, "AAA’s" birth certificate was not formally offered.
Neither did the Municipal Civil Registrar who allegedly prepared the same take the
witness stand. Thus appellant claimed that assuming he was indeed guilty of the crimes
charged, he should only be held liable for simple rape and not qualified rape because the
minority of the victim was not duly established.29 Further, with the passage of Republic
Act No. 9346, appellant should not be sentenced to death.30
On the other hand, appellee maintained that "AAA’s" credibility was beyond doubt 31 and
that it was unnecessary to offer proof of resistance where the assailant exercised moral
ascendancy against his victim, as in this case. 32 Appellee insisted that the crimes
committed were three counts of qualified, and not simple, rape considering that "AAA"
was a minor and the offender was her father,33 and that the parties had already
stipulated during pre-trial as regards the age of the victim. 34
On November 5, 2007, the appellate court rendered its Decision disposing thus:
WHEREFORE, premises considered, the Decision dated 28 November 2003 of the
Regional Trial Court of Tayug, Pangasinan, Branch 51 in Crim. Case Nos. T-3157, T-3158
and T-3159 finding accused-appellant Saturnino Villanueva guilty beyond reasonable
doubt of three (3) counts of qualified rape under Articles 266-A and 266-B is AFFIRMED
with the MODIFICATION that pursuant to Republic Act No. 9346, the penalty of death
imposed on appellant is reduced to reclusion perpetua for each count of qualified rape,
without eligibility for parole under Act No. 4103, as amended. Further, accused-
appellant is ordered to pay the private complainant/victim ["AAA"], for each count of
Page 4 of 78
qualified rape, the amounts of Php 75,000.00 as civil indemnity, Php 75,000.00 as moral
damages and Php 25,000.00 as exemplary damages.
SO ORDERED.35
The appellate court found no reason to reverse the findings of the trial court on the
credibility of "AAA."36 Although there were occasions when "AAA" would not
immediately answer the questions propounded to her, the CA opined that it was because
she was either distressed in recounting her horrible experiences or in tears. 37 The
appellate court likewise considered the fact that "AAA" was only 13 years old when she
testified on her harrowing experiences.38
The appellate court likewise brushed aside appellant’s contention that "AAA" did not
offer any resistance. According to the CA, appellant’s moral ascendancy over "AAA"
substitutes for violence or intimidation.39
The CA also concluded that even without the medical certificate, appellant could still be
held liable for three counts of rape. His conviction could rest exclusively on the credible
testimony of "AAA" and the medical certificate would only be corroborative
evidence.40 Anent the birth certificate, the CA recalled that during pre-trial, the minority
of the victim and her relationship with the appellant had already been stipulated upon.
Hence, the said elements have been sufficiently alleged in the Informations and proven
during trial.41
Finally, the CA held that appellant’s denial is intrinsically weak and self-serving
especially considering "AAA’s" credible and straightforward testimony. 42
Our Ruling
Both the appellant and the appellee opted not to file their supplemental briefs. 43
The appeal is partly meritorious.
At the outset, we must state that we entertain no doubt that appellant thrice raped his
daughter, "AAA." We examined the records and we find "AAA’s" testimony convincing
and straightforward. We therefore have no reason to reverse or modify the findings of
the trial court on the credibility of the victim’s testimony, more so in this case where the
said findings were affirmed by the CA.
We also agree with the ruling of the appellate court that appellant could be convicted of
rape even without the medical certificate. "In rape cases, the accused may be convicted

solely on the testimony of the victim, provided the testimony is credible, natural,
convincing, and consistent with human nature and the normal course of things." 44 As
stated above, "AAA’s" testimony was credible and convincing. As such, appellant’s
conviction could rest solely on it. The medical certificate would only serve as
corroborative evidence.
We, however, agree with the appellant that both the medical certificate and "AAA’s"
birth certificate, although marked as exhibits during the pre-trial, should not have been
considered by the trial court and the CA because they were not formally offered in
evidence. Section 34, Rule 132 of the Rules of Court explicitly provides: "The court shall
consider no evidence which has not been formally offered. The purpose for which the
evidence is offered must be specified."
In this case, we note that after the marking of the exhibits during pre-trial, the
prosecution did not formally offer the said medical certificate or birth certificate in
evidence. In fact, the prosecution rested its case after presenting the testimony of "AAA"
without formally offering any documentary exhibit at all.
45
Our ruling in Heirs of Pedro Pasag v. Parocha  is instructive, thus:
The rule on formal offer of evidence is not a trivial matter. Failure to make a formal offer
within a considerable period of time shall be deemed a waiver to submit it.
Consequently, as in this case, any evidence that has not been offered shall be excluded
and rejected.
xxxx
The Rules of Court [provide] that ‘the court shall consider no evidence which has not
been formally offered.’ A formal offer is necessary because judges are mandated to rest
their findings of facts and their judgment only and strictly upon the evidence offered by
the parties at the trial. Its function is to enable the trial judge to know the purpose or
purposes for which the proponent is presenting the evidence. On the other hand, this
allows opposing parties to examine the evidence and object to its admissibility.
Moreover, it facilitates review as the appellate court will not be required to review
documents not previously scrutinized by the trial court.
xxxx
Thus, the trial court is bound to consider only the testimonial evidence presented and
exclude the documents not offered. Documents which may have been identified and
marked as exhibits during pre-trial or trial but which were not formally offered in
Page 5 of 78
evidence cannot in any manner be treated as evidence. Neither can such unrecognized
proof be assigned any evidentiary weight and value. It must be stressed that there is a
significant distinction between identification of documentary evidence and its formal
offer. The former is done in the course of the pre-trial, and trial is accompanied by the
marking of the evidence as an exhibit; while the latter is done only when the party rests
its case. The mere fact that a particular document is identified and marked as an exhibit
does not mean that it has already been offered as part of the evidence. It must be
emphasized that any evidence which a party desires to submit for the consideration of
the court must formally be offered by the party; otherwise, it is excluded and
rejected.46ten.lihpwal
We reiterated the above ruling in Dizon v. Court of Tax Appeals47 where one of the issues
presented was whether the Court of Tax Appeals and the CA gravely abused their
discretion "in allowing the admission of the pieces of evidence which were not formally
offered" by the Bureau of Internal Revenue.48 In finding the case impressed with merit,
the Court held that:
Under Section 8 of RA 1125, the CTA is categorically described as a court of record. As
cases filed before it are litigated de novo, party-litigants shall prove every minute aspect
of their cases. Indubitably, no evidentiary value can be given the pieces of evidence
submitted by the BIR, as the rules on documentary evidence require that these
documents must be formally offered before the CTA. x x x
xxxx
x x x [T]he presentation of the BIR’s evidence is not a mere procedural technicality
which may be disregarded considering that it is the only means by which the CTA may
ascertain and verify the truth of BIR’s claims against the Estate. The BIR’s failure to
formally offer these pieces of evidence, despite CTA’s directives, is fatal to its cause. Such
failure is aggravated by the fact that not even a single reason was advanced by the BIR to
justify such fatal omission. This, we take against the BIR. 49
We are not unaware that there is an exception to the above-stated rule. In People v.
Mate,50 Silvestre Mate (Mate) was charged with the crime of "Kidnapping for Ransom
with Murder and Frustrated Murder."51 During arraignment, he entered a plea of
"guilty." The court then propounded clarificatory questions to determine whether the
accused understood the consequences of his plea. Immediately thereafter, the trial court
promulgated its decision finding the accused guilty as charged and sentenced him to
death.52 It was only after the rendition of the judgment that the trial court conducted
hearings for the reception of the prosecution’s evidence. 53

From the prosecution’s evidence, it would appear that during the investigation, Mate
voluntarily made extra-judicial statements as contained in Exhibits "A," "B," and "J." Also,
after his conviction, he appeared as witness for the prosecution against his co-accused
where he affirmed his extra-judicial statements in Exhibits "A," "B," and "J." However,
the state prosecutor failed to formally offer said exhibits.
In debunking the defense’s contentions that the trial court erred in rendering a
judgment of conviction on Mate even before the prosecution could present its evidence,
and in considering the exhibits which were not formally offered, the Court held thus:
The defense contends that the trial court committed a serious error in rendering
judgment of conviction immediately after Mate had pleaded guilty to the crime charged
on the basis of his plea of guilty and before receiving any evidence. While the trial court
committed an error in rendering judgment immediately after the accused had pleaded
guilty, and, thereafter, conducted hearings for the reception of the evidence for the
prosecution, such an irregularity, is insufficient to justify the setting aside of the
judgment of conviction, considering that it is supported by the judicial and extra-judicial
confessions of the accused and by other evidence. x x x
xxxx
The defense questions also the failure of the state prosecutor Cornelio Melendres to
make a formal offer of his exhibits, although they have been marked and identified. Such
an oversight appears trivial because the entire evidence for the prosecution is recorded.
Even without the exhibits which have been incorporated into the records of the case, the
prosecution can still establish the case because the witnesses properly identified those
exhibits and their testimonies are recorded.
Exhibits "A", "B", and "J" are all admissible against Mate because it appears with clarity
that he voluntarily and spontaneously gave those narrations without compulsion from
anybody. In fact, . . . when he testified against Ben Bohol he affirmed those narrations
again.54
In Mato v. Court of Appeals,55 we concretized the above ruling by holding that evidence,
although not formally offered in evidence, may be "admitted and considered by the trial
court provided the following requirements are present, viz: first, the same must have
been duly identified by testimony duly recorded and, second, the same must have been
incorporated in the records of the case."56 In Ramos v. Dizon,57 we deemed the exhibits to
have been incorporated into the records because they had been "presented and marked
during the pre-trial of the case."58 Likewise, the first requisite was deemed satisfied
because one of the parties therein explained the contents of the exhibits when
interrogated by the respondents’ counsel.59
Page 6 of 78
In the instant case, we find the rulings espoused in People v. Mate, 60 Mato v. Court of
Appeals,61 and Ramos v. Dizon62 not applicable. Thus, we find that both the trial court
and the CA erred in allowing the admission of "AAA’s" medical certificate and birth
certificate. The records would show that the lone witness for the prosecution did not
identify the said exhibits or explain their contents. When "AAA" was placed on the
witness stand, she merely stated that she was 13 years old. No reference was ever made
to her birth certificate. The same is true with the medical certificate. After the marking
during the pre-trial, the prosecution did not refer to it in any stage of the proceedings.
Neither did it present the doctor who prepared the same.
Moreover, appellant’s admission during the pre-trial that "AAA" was a minor below 12
years of age63 would not help the prosecution’s case. First, the trial court found this
admission inaccurate as in fact, "AAA" was already above 12 years of age when the rape
incident transpired on June 9, 2002. Second and more important, appellant’s admission
during pre-trial is not admissible as it violates Section 2, Rule 118 of the Rules of Court
which explicitly provides that: "All agreements or admissions made or entered during
the pre-trial conference shall be reduced in writing and signed by the accused and his
counsel, otherwise they cannot be used against the accused. x x x." In People v. Chua
Uy,64 we held that:
Even granting for the sake of argument that RAMON admitted during the pre-trial that
Exhibits "D" to "D-4", inclusive, and Exhibit "E" contained methamphetamine
hydrochloride, the admission cannot be used in evidence against him because the Joint
Order was not signed by RAMON and his counsel. Section 4 of Rule 118 of the Rules of
Court expressly provides:
SEC. 4. Pre-trial agreements must be signed. No agreement or admission made or
entered during the pre-trial conference shall be used in evidence against the accused
unless reduced to writing and signed by his counsel.
Put in another way, to bind the accused the pre-trial order must be signed not only by
him but his counsel as well. The purpose of this requirement is to further safeguard the
rights of the accused against improvident or unauthorized agreements or admissions
which his counsel may have entered into without his knowledge, as he may have waived
his presence at the pre-trial conference; eliminate any doubt on the conformity of the
accused of the facts agreed upon.
In this case, records would show that the Pre-trial Order was not signed by both
appellant and his counsel.
In view of the foregoing, we find that the prosecution did not present any satisfactory
evidence to prove "AAA’s" minority. "In the prosecution of criminal cases, x x x, nothing

but proof beyond reasonable doubt of every fact necessary to constitute the crime with
which an accused is charged must be established. Qualifying circumstances or special
qualifying circumstances must be proved with equal certainty and clearness as the crime
itself; otherwise, there can be no conviction of the crime in its qualified form. As a
qualifying circumstance of the crime of rape, the concurrence of the victim’s minority
and her relationship to the accused-appellant must be both alleged and proven beyond
reasonable doubt."65
In view of the foregoing, we find appellant guilty only of three counts of simple
rape66 the penalty for which is reclusion perpetua for each count. Accordingly, the
awards of civil indemnity must be reduced to ₱50,000.00 and moral damages to
₱50,000.00. Finally, the award of exemplary damages is proper. "Exemplary damages
may be awarded in criminal cases as part of civil liability if the crime was committed
with one or more aggravating circumstances. Relationship as an alternative
circumstance under Article 15 of the Revised Penal Code is considered aggravating in
THIRD DIVISION
G.R. No. 182805               April 22, 2015
HEIRS OF SERAPIO MABBORANG: LAURIANO MABBORANG, DOMINGO
MABBORANG, ENCARNACION MABBORANG, FELIX MABBORANG, FAUSTINA
MABBORANG, ELIAS MABBORANG, ALBERTA MABBORANG; HEIRS OF REGINO
MABBORANG: JOSE MABBORANG, DIONICIA MABBORANG, SOTERA MABBORANG,
MARIANO MABBORANG; HEIRS OF SUSANA MABBORANG: CECILIA UBIÑA-OCAB
and CANDIDA U. TAGUIGA; SEGUNDA MABBORANG; HEIRS OF VICTORINO
MABBORANG: JUAN MABBORANG, JR., SERVANDO MABBORANG; AND HEIRS OF
VICENTE MABBORANG: MARIANO MABBORANG, MARTIN MABBORANG, LUZ
MABBORANG-CARILLO, Petitioners,
vs.
HERMOGENES MABBORANG and BENJAMIN MABBORANG, Respondents.
Remedial Law; Evidence; Offer of Evidence; Section 34, Rule 132 of the Rules of Court
provides that “the court shall consider no evidence which has not been formally offered”; A
formal offer is necessary because judges are mandated to rest their findings of facts and
judgment strictly and only upon the evidence offered by the parties at trial.—Section 34,
Rule 132 of the Rules of Court provides that “the court shall consider no evidence which
has not been formally offered.” This is to enable the trial judge to know the purpose or
purposes for which the proponent is presenting the evidence. Also, it allows opposing
parties to examine the evidence and object to its admissibility. A formal offer is
necessary because judges are mandated to rest their findings of facts and judgment
strictly and only upon the evidence offered by the parties at trial. Consequently, review
Page 7 of 78
the crime of rape."67 In this case, the aggravating circumstance of relationship was duly
established. Appellant himself admitted when he testified in open court that he is
"AAA’s" father. However, the award of ₱25,000.00 as exemplary damages must be
increased to ₱30,000.00 in line with prevailing jurisprudence. 68
WHEREFORE, we find appellant Saturnino Villanueva GUILTY of three counts of simple
rape and accordingly sentence him to suffer the penalty of reclusion perpetua and to
indemnify his victim "AAA" the amounts of ₱50,000.00 as civil indemnity, ₱50,000.00 as
moral damages, and ₱30,000.00 as exemplary damages, for each count.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
by the appellate court is facilitated for it will not be required to review documents not
previously scrutinized by the trial court. Hence, strict adherence to this basic procedural
rule is required, lest evidence cannot be assigned any evidentiary weight or value.
Same; Same; Same; In certain instances, the Supreme Court (SC) has relaxed the
procedural rule and allowed the trial court to consider evidence not formally offered .—In
certain instances, however, this Court has relaxed the procedural rule and allowed the
trial court to consider evidence not formally offered on the condition that the following
requisites are present: (1) the evidence must have been duly identified by testimony
duly recorded; and (2) the same must have been incorporated in the records of the case.
Procedural Rules and Technicalities; 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.—Indeed,
procedural rules are tools designed to facilitate the adjudication of cases. Courts and
litigants alike are enjoined to abide strictly by the rules. 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. Unless substantial justice dictates that procedural rules be
relaxed to arrive at a just disposition of a case, there shall be no liberality in the
interpretation and application of the rules.
DECISION
PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to reverse and set aside the Decision1 and Resolution2 dated November 12, 2007
and March 18, 2008, respectively, of the Court Appeals (CA) in CA-G.R. CV No. 86656
which affirmed the Judgment3 dated December 14, 2005, of the Regional Trial Court
(RTC) in Civil Case No. 4051.
The antecedents are as follows:
Sometime in August 1989, respondents Hermogenes Mabborang and Benjamin
Mabborang filed an action for Judicial Partition of Realty with Damages before the RTC
of Tuguegarao, Cagayan, against petitioners, heirs and children of the late spouses
Severino Mabborang and Maria Magabung.4 Respondents alleged that since they are the
surviving heirs of their deceased father, Rufino Mabborang, one (1) of the nine (9)
children of said spouses, they are entitled to a share in several parcels of land left behind
by the latter, which were already being possessed and cultivated by petitioners.
Petitioners, however, countered that Rufino was not among the children of the spouses,
who only had eight (8) and not nine (9) children as claimed by respondents. According
to petitioners, Rufino was actually a grandson of the spouses, as the son of the spouses’
daughter, Sofronia Mabborang. Petitioners further alleged that respondents can no
longer claim from the estate of the late spouses for Sofronia had already received her
share thereof and, subsequently, sold the same to some of the petitioners and other third
parties.5 After trial, on August 20, 1991, the RTC dismissed the case finding that since
Rufino is not a child of the spouses Severino Mabborang and Maria Magabung,
respondents are not entitled to judicial partition because their shares could have been
inherited by their father, Rufino or their grandmother, Sofronia, to wit:
The issues as embodied in [the] pre-trial order is whether Rufino Mabborang is the child
of the spouses Severino Mabborang and Maria Magabung and whether the plaintiffs
already obtained their shares from the estate of said spouses.
The Court is inclined to believe the version of the defendants that indeed Rufino
Mabborang is the son of Sofronia Mabborang by her common-law husband Marciano
Escobar and not her brother, neither of the son of [the] spouses Severino Mabborang
and Maria Megabong who begot eight (8) children, among them is Sofronia Mabborang.
Exhibit "A," the birth certificate cannot be relied upon citing by analogy the case of
Macadangdang vs. Court of Appeals,100 SCRA 73 where it was ruled that "baptismal and
marriage certificate prove only the administration of the sacraments to the subjects
thereof, not the veracity of the statements made therein with respect to relationship."
The Court takes judicial notice of the belief, superstitious it [may be] of Filipinos that in
order to save the child from dying sice [sic] all its brothers and sisters had died as in this
case, said child shall be registered as having been begotten by another couple. This
Page 8 of 78
happened in the case at bar when Rufino was registered as the son of [the] spouses
Severino Mabborang and Maria Megabong, when in truth and in fact the [sic] was the
illegitimate son of Sofronia and Marciano, and therefore [grandson] of the former
spouses.
Considering further the date of birth of Rufino (1931) and the date of birth of Maria
Megabong (1880) it is unlikely that she could have given birth to Rufino.
In fine, Rufino not being a child of the spouses Severino Mabborang and Megabong his
children the plaintiffs herein, are not entitled to judicial partition as it is evident that
their supposed shares could have been inherited by their father Rufino or
[grandmother] Sofronia.6
On May 31, 1996, the CA reversed the RTC’s decision insofar as it denied respondents’
claim for judicial partition in view of the absence of any kind of documentary or
testimonial evidence supporting petitioners’ allegations that the estate of the spouses
had already been partitioned and that their daughter, Sofronia, had received her share,
which she sold to petitioners and third parties. In the words of the appellate court:
We see no cogent or compelling reason to reverse or disturb the court a quo’s finding
that Rufino Mabborang was not a son of the deceased spouses Severino Mabborang and
Maria [Megabong.] The evidence is preponderant and overwhelming that Rufino was the
son of Sofronia Mabborang by her common-law husband, Marciano Escobar.
xxxx
Nonetheless, We are constrained to reverse and set aside the decision insofar as it
declared that plaintiffs-appellants "are not entitled to judicial partition."
It is undisputed that Severino Mabborang and Maria [Megabong] died in 1938 and 1963,
respectively. Upon their death, their property, or their inheritance as defined in Article
776 of the Civil Code, was transmitted by operation of law to their surviving children
(Articles 774, 777, Civil Code), among them, Sofronia Mabborang who died in 1978
(TSN, August 23, 1999, p. 41). Rufino Mabborang who died in 1962 (TSN, August 23,
1990, pp. 33 and 46), having predeceased Sofronia, his two (2) sons, herein plaintiffs-
appellants inherited the share of Sofronia in accordance with Articles 902 and 990 of the
Civil Code.
As stated by the Supreme Court in Diaz vs. Intermediate Appellate Court, 182 SCRA 427:
"Articles 902, 989, and 990 clearly speak of successional rights of illegitimate children,
which rights are transmitted to their descendants upon their death. The descendants (of

these illegitimate children) who may inherit by virtue of the right of representation may
be legitimate or illegitimate. In whatever manner, one should not overlook the fact that
the persons to be represented are themselves illegitimate (at pp. 431-432). The
determining factor is the legitimacy or illegitimacy of the person to be represented. If the
person to be represented is an illegitimate child, then his descendants, whether
legitimate or illegitimate, may represent him; however, if the person to be represented is
legitimate, his illegitimate descendants cannot represent him because the law provides
that only his legitimate descendants may exercise the right of representation by reason
of the barrier imposed in Article 992 (Diaz vs. IAC, supra, at page 433). While it was
alleged as a defense that the properties left by the couple Severino and Maria had
already been partitioned among the heirs, that each one of them had taken possession of
his or her individual share, that Sofronia during her lifetime had sold part of her share,
and that whatever remained was sold by plaintiffs-appellants (pars. 8 and 9, Answer),
the records show no documentary or testimonial evidence whatsoever presented to
support the allegations. We note that plaintiffs’ documentary evidence, particularly
Exhibits 3, 3-A, 3-B, 3-B-1, 3-B-2, 4, 4-A, 4-A-1, 4-A-2, 4-A-3, 4-A-4, 4-A-5, 4-B, 4-B-1, 5, 5-
A, 5-A-1, and 5-E, the sketches allegedly showing the division of the properties of the
spouses Severino Mabborang and Maria Megabung among the children, were submitted
and offered as part of formal evidence, only on August 27, 1991 after rendition of the
decision on August 20, 1991.
Except for the parcel of land designated as cadastral lot No. 397, described in paragraph
3(c) of the complaint, all the parcels of land involved are covered by original certificates
of title. The first parcel x x x in the name of Heirs of Severino Mabborang represented by
Maria Megabung. The second parcel x x x in the name of Heirs of Severino Mabborang
represented by Maria Megabung. x x x The fourth, fifth, and sixth parcels x x x in the
name of Maria Megabung (sic). No deed of partition was presented to show that the
subject parcels of land have been partitioned and subdivided. No certificate of title in the
names of the heirs was produced to show that the mentioned certificates of title,
Exhibits D, E, and G, have been superseded and cancelled. While it is claimed that
Sofronia during her lifetime had sold part of her share to some of the defendants-
appellees and third persons and that whatever remained was sold by plaintiffs-
appellants, no deeds of sale or instruments of conveyance evidencing such alleged sale
or conveyances had been presented.
We, therefore, rule that the court a quo erred in dismissing plaintiffs-appellants’
complaint. Plaintiffs-appellants are entitled to a partition as heirs of Sofronia
Mabborang.7
However, since the records did not contain the necessary details to determine the exact
shares of the respondents, such as whether there exists an heir who has died without
issue, the appellate court remanded the case to the RTC for purposes of said
Page 9 of 78
determination. Thereafter, on June 27, 1996, the aforequoted decision became final and
executory.8
On January 28, 1998, however, petitioners, through the Public Attorney’s Office,
submitted a Report and Motion reiterating their position that Sofronia had already
disposed of a portion of her share as shown by machine copies of a Deed of Absolute Sale
of Portion of Registered Land, dated November 14, 1976, executed by Sofronia in favor
of Erlinda Ubina, married to petitioner Mariano Mabborang, and that the rest of her
share had passed to respondents, who had already sold the same as shown by machine
copies of an Extrajudicial Settlement/Partition with Sale of Portion of Estate, dated
August 6, 1984, in favor of petitioner Jose Mabborang, as well as an Extrajudicial
Settlement of the Estate of Rufino Mabborang with Adjudication and Sale of
Unregistered Land, dated February 12, 1978, in favor of petitioner Jose Mabborang. 9
Initially, the RTC granted respondents’ motions for the subdivision of the six (6) parcels
of land and for the marking of the same. However, in its subsequent Orders, 10 the trial
court set aside its previous rulings granting the subdivision of the properties, re-opened
the pre-trial of the case, and directed petitioners to present the aforestated Deeds of Sale
and Extrajudicial Settlement. In view of respondents’ contention that the subject
documents are spurious, the RTC, in an Order dated August 31, 2001, further directed
respondents to have the subject documents examined by an expert in order to
determine the authenticity of the thumbprints appearing thereon. 11 Should the
thumbprints be found to be genuine, respondents bound themselves to have the case
dismissed.12 Due to respondents’ failure to subject the documents to expert examination,
the trial court, in an Order dated May 30, 2003, declared that respondents are deemed to
have waived the presentation of their evidence to prove that the transfer made by
Sofronia were forgeries.13
On December 14, 2005, the RTC rendered its Judgment,14 the pertinent portions of which
state:
The only objective of this Court is to determine the share of plaintiffs-appellants in the
estate of the late Severino Mabborang and Maria Magabung, consisting of six (6) parcels
of land.
The properties in question are the intestate estate of the late Severino Mabborang and
Maria Magabung, who died on April 6, 1938 and March 5, 1963, respectively, and is
survived by their eight (8) children, namely: Serapio Mabborang, Victoriano Mabborang,
who is already deceased and survived by his children Basilio, Baldomero, Juan and
Servando, all surnamed Mabborang, Vicente Mabborang, who is already deceased and is
survived by his children Mariano, Martin and Luz Mabborang Carillo, Sofronia
Mabborang who is already deceased and survived by his grandchildren, Hermogenes

and Benjamin Mabborang, Isabel Mabborang, who is already deceased without having
any issue, Susana Mabborang Ubina, Regino Mabborang and Segunda Taquiga.
Of the issues children, one (1) died without any issue, namely Isabel Mabborang.
Pursuant to Art. 980 of the Civil Code, the children of the deceased shall always inherit in
their own right, dividing the inheritance in equal shares.
As Isabel Mabborang died without any issue, her share in the estate of Severino
Mabborang and Maria Magabung shall accrue to the surviving brothers and sisters
(Article 968 of the Civil Code). The estate should then be divided and partitioned into
seven (7) shares, one share for each child of the late Severino Mabborang and Maria
Magabung, namely Serapio Mabborang, Susana Mabborang Ubina, Regino Mabborang,
Segunda Mabborang Taquiga while the share of Victorino Mabborang shall be divided
among his heirs Basilio, Baldomero, Juan and Servando, all surnamed Mabborang, the
share of Vicente Mabborang shall be divided among his heirs Mariano, Martin both
surnamed Mabborang and Luz Mabborang Carillo, and the share of Sofronia Mabborang
shall be divided among her heirs Germogenes and Benjamin Mabborang. WHEREFORE,
in the light of the foregoing, the Court hereby adjudges that plaintiffs, as heirs of the late
Sofronia Mabborang, are entitled to a share in the estate of the late Severino Mabborang
and Maria Magabung, to the extent of 1/7 of the same.
Further, the Court also adjudges that the six (6) parcels of land forming part of the estate
of said spouses, shall be partitioned to seven (7) shares, one share each to the heirs of
Serapio Mabborang, Susana Mabborang, Regino Mabborang, and Segunda Taquiga. The
share of the heir Victorino Mabborang, shall be divided into 4 parts, with Basilio
Mabborang, Baldomero Mabborang, Juan Mabborang and Servando Mabborang entitled
to a share. The share of the heir Vicente Mabborang shall be entitled into three (3) parts,
with Mariano Mabborang, Martin Mabborang and Luz Mabborang Carillo entitled to a
share. The share of the heir Sofronia Mabborang shall be divided into two (2) parts, with
Hermogenes Mabborang and Benjamin Mabborang entitled to a share.
As to the issue that Sofronia Mabborang disposed of her shares to some of the
defendants and third persons during her lifetime, the Court finds no evidence to support
such allegation, so the same could not be considered.15
Petitioners filed a Motion for Reconsideration maintaining that since respondents failed
to prove that the subject documents were forgeries, the same must be considered valid,
and on this score alone, the RTC should have dismissed the case. However, in its
Resolution dated February 6, 2006, the trial court held that while respondents were
indeed ordered to have the documents examined, and upon their failure are deemed to
have waived the presentation of evidence to show that the documents are spurious,
Page 10 of 78
petitioners’ allegations were never proven in court, the subject documents not having
been marked nor presented formally in court, to wit:
Acting on the Motion for Reconsideration filed by the defendants, the Court finds that
the plaintiffs had already presented their evidence before this Court and before the case
was appealed to the Court of Appeals.
In the decision of the Court of Appeals, the said Court found that plaintiffs are the
children of Regino [sic] Rufino Mabborang who is an illegitimate child of Sofronia
Mabborang. Said Court remanded the case back to this Court to determine the share of
Sofronia Mabborang.
The defendants claimed that Sofronia Mabborang had already received her share in the
estate of her parents Severino Mabborang and Magabung and had disposed of the same.
Going over the records of the case, the Court finds that this allegation of the defendants
had never been proven. In fact said alleged transfer made by Sofronia Mabborang was
not even marked or presented formally by the defendants. While it maybe so, that the
Order dated April 4, 2003 ordered the plaintiffs to examine the documents which are in
their possession and which were submitted to the NBI for purposes of evaluation to
determine whether the thumbmark appearing in the alleged document are the genuine
thumbmark of Sofronia Mabborang and in the Order dated May 30, 2003, the Court
declared that the plaintiffs are deemed to have waived the presentation of evidence to
prove the transfer made by Sofronia Mabborang were forgeries as previously stated, the
existence of the document however, has not been proven by the defendants.
According to American jurisprudence, ‘the test for determining which part has the
affirmative, and therefore the burden of establishing a case, is found in the result of an
inquiry as to which party would be successful if no evidence at all were given, the
burden being of course on the party would be unsuccessful in that situation. In other
words, one alleging a fact which is denied has the burden of establishing it. Unless the
party asserting the affirmative of an issue sustains the burden of proving it by the
required degree of proof, he must fail.’ (29 American Jurisprudence, 2d. 160-163 cited in
Francisco’s Revised Rules of Court of the Phils. Vol. 7, part 2, 1997 Edition page 6). 16
On November 12, 2007, the CA affirmed the lower court’s findings in the following
manner: However, insofar as the issue of a subsisting co-ownership over the subject
properties among the heirs of Severino Mabborang and Maria Magabung, the same was
categorically resolved by this Court in its Decision dated May 31, 1996 finding that
Sofronia Mabborang had not yet received her share and neither had she sold it during
her lifetime. No deeds of sale or instruments of the alleged conveyances were presented
in evidence. Upon remand to the trial court for further proceedings, appellant reiterated

their position that Sofronia Mabborang had already been given her share in the estate of
Severino Mabborang and Maria Magabung and that she already sold it to various parties.
The trial court nevertheless ruled, for the second time, on the basis of the entire records,
that appellants failed to substantiate their allegations. In denying appellants’ motion for
reconsideration, the trial court stressed that even if the purported documents of transfer
or sale bearing the thumbmarks of Sofronia Mabborang were supposedly received by
appellees for the purpose of having them examined by the NBI documents examiners for
their authenticity, the existence of said documents, which were not even marked during
the initial presentation of evidence by the parties, have not been proven by the
appellants.
The rule is that a document, or any article for that matter, is not evidence when it is
simply marked for identification; it must be formally offered and the opposing counsel
given an opportunity to object to it or cross-examine the witness called upon to prove or
identify it. The alleged documents of sale or transfer (Exhibits "3" and "5") have not been
identified by any witness nor its existence duly proved, the original of which was not
even presented as only photocopies were attached to the "Report and Motion"
submitted by the Public Attorney’s Office. The subsequent delivery of the copies to the
appellees for the intended examination by the NBI experts is not equivalent to formal
offer. Much less, have the appellees admitted the due execution and authenticity of the
said documents, which as manifested in the Public Attorney’s Office report to the court,
were being questioned by appellees as "spurious."
On the other hand, the formal offer of documentary evidence of appellants appearing in
pages 86 to 93 of the original records actually makes reference not to any deed of sale or
extrajudicial settlement with sale but to "Diagrams showing the divisions of properties
of spouses Severino Mabborang and Maria Magabung among and between their children
including their child Sofronia who is the mother of Rufino Mabborang" and which are
the only evidence marked and offered for the purpose of proving that "Sofronia sold all
her portions in the property to various persons." Significantly, the CA Decision dated
May 31, 1996 has already noted the absence of documentary or testimonial evidence to
support the allegation of appellants that Sofronia was already given her share which she
had disposed of. It also noted that Exhibits "3" to "5-E" being mentioned by appellants
allegedly showing the division of the properties of the spouses Severino Mabborang and
Maria Magabung among the children were "submitted and offered as the formal offer of
evidence, only on August 27, 1991 after rendition of the decision on August 20, 1991.
Page 11 of 78
At any rate, records clearly bear out that the documents of sale or transfer allegedly
thumbmarked by Sofronia were never identified, marked as exhibits or formally offered
by the appellants during the proceedings before the trial court. It was held that during
the trial on the merits, evidence must formally be offered by the parties, otherwise the
trial court will not consider it. Any evidence a party desires to submit for the
consideration of the court must formally be offered by him. Evidence not formally
offered cannot be taken into consideration in disposing of the issues of the case. 17
Upon further denial of their Motion for Reconsideration in a Resolution 18 dated March
18, 2008,petitioners filed the present petition invoking the following arguments:
I.
THE COURT OF APPEALS DECIDED THE MATTER NOT IN ACCORDANCE WITH LAW
FOR THE REASON THAT SAID COURT HAS AFFIRMED THE DECISION OF THE
REGIONAL TRIAL COURT SUBMITTING THE CASE FOR DECISION DESPITE THE FACT
THAT IT WAS ONLY THE PLAINTIFFS WHO WERE DEEMED TO HAVE WAIVED THEIR
PRESENTATION OF EVIDENCE.
II.
THE COURT OF APPEALS DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS BY AFFIRMING THE JUDGMENT OFTHE LOWER COURT
WHICH MERELY DETERMINED THE PROPORTIONAL SHARE OF THE PARTIES IN THE
ESTATE WHENTHE ORIGINAL ACTION AND THE REASON FOR THE REMAND OF THE
CASE WAS FOR THE PARTITION OF THE ESTATE AMONG THE HEIRS, SAID ACTION
CALLS FOR AN EXERCISE OF THE POWER OF SUPERVISION BY THIS HONORABLE
SUPREME COURT.19
Petitioners reiterate their contention that the failure of respondents to prove that the
documents presented by the Public Attorney’s Office, in its Report and Motion, are
forgeries means that the same are genuine, and is tantamount to an acceptance by
respondents of the due execution thereof. Consequently, the trial court should have
dismissed the case. Moreover, according to petitioners, they have, from the very
beginning, already alleged that Sofronia Mabborang had been properly given her share
in the estate of the spouses Severino Mabborang and Maria Megabung and have
subsequently disposed of the same during her lifetime. Since respondents were deemed
to have waived their presentation of evidence, petitioners should have been ordered to
present theirs.
Petitioners’ arguments are misplaced.

Section 34, Rule 132 of the Rules of Court provides that "the court shall consider no
evidence which has not been formally offered." This is to enable the trial judge to know
the purpose or purposes for which the proponent is presenting the evidence. Also, it
allows opposing parties to examine the evidence and object to its admissibility. A formal
offer is necessary because judges are mandated to rest their findings of facts and
judgment strictly and only upon the evidence offered by the parties at trial.
Consequently, review by the appellate court is facilitated for it will not be required to
review documents not previously scrutinized by the trial court. 20 Hence, strict adherence
to this basic procedural rule is required, lest evidence cannot be assigned any
evidentiary weight or value:
Thus, the trial court is bound to consider only the testimonial evidence presented and
exclude the documents not offered. Documents which may have been identified and
marked as exhibits during pre-trial or trial but which were not formally offered in
evidence cannot in any manner be treated as evidence. Neither can such unrecognized
proof be assigned any evidentiary weight and value. It must be stressed that there is a
significant distinction between identification of documentary evidence and its formal
offer. The former is done in the course of the pre-trial, and trial is accompanied by the
marking of the evidence as an exhibit; while the latter is done only when the party rests
its case. The mere fact that a particular document is identified and marked as an exhibit
does not mean that it has already been offered as part of the evidence. It must be
emphasized that any evidence which a party desires to submit for the consideration of
the court must formally be offered by the party; otherwise, it is excluded and rejected. 21
In certain instances, however, this Court has relaxed the procedural rule and allowed the
trial court to consider evidence not formally offered on the condition that the following
requisites are present: (1) the evidence must have been duly identified by testimony
duly recorded; and (2) the same must have been incorporated in the records of the
case.22
None of the conditions are present in this case.
As noted by the courts, the records of the case show no documentary or testimonial
evidence whatsoever to support petitioners’ allegations. While petitioners persistently
claimed that Sofronia had already received her share in the subject properties and
subsequently disposed of the same during her lifetime, they never presented any
evidence during the proceedings before the RTC and even during the appeal before the
CA to substantiate the same. As aptly observed by the CA, there was no deed of partition
presented showing that the subject parcels of land have been partitioned and divided,
deed of sale or instrument of conveyance evidencing any transfer of Sofronia’s share,
nor certificate of title indicating that the titles to the properties have been superseded
and cancelled. On this basis, the appellate court justifiably ruled that respondents are
Page 12 of 78
entitled to their share in the subject properties in the absence of proof that Sofronia had
indeed received and disposed of her share therein.
It bears stressing that only after almost two (2) years from the finality of the CA’s
decision and on remand to the RTC for the determination of respondents’ specific share
was it mentioned that there exists documents which may substantiate petitioners’
allegations. Specifically, the Public Attorney’s Office manifested that Deeds of Sale and
Extrajudicial Settlements were executed in the past transferring Sofronia’s share to
various persons. Yet, as the trial court ruled, even if the purported documents of transfer
or sale were supposedly received by respondents to have their authenticity examined,
petitioners were not able to prove the existence of the same, which were not even
marked during the initial presentation of evidence by the parties. Neither were they
identified by any witness. In fact, the original of said documents were not even
presented as mere photocopies were attached to the Report and Motion submitted by
the Public Attorney’s Office.
Indeed, procedural rules are tools designed to facilitate the adjudication of cases. Courts
and litigants alike are enjoined to abide strictly by the rules. 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. Unless substantial justice dictates that procedural rules
be relaxed to arrive at a just disposition of a case, there shall be no liberality in the
interpretation and application of the rules.23
Here, not only did petitioners fail to formally offer the subject documents in evidence
during the trial on the merits, they also failed to provide any explanation as to the
reason behind such failure. While rules of procedure may be relaxed in the interest of
justice and fair play, this Court shall refrain from doing so if there is not even the
slightest effort to provide the courts with a reason to justify the non-observance of the
same.
Besides, the records of the case do not show any indication that petitioners were denied
their right to present evidence. They had every opportunity to submit the necessary
documentary evidence in order to substantiate their claims, and when they did, the
same were not even originals thereof. In fact, as can be gleaned from the records, it took
them nearly a decade from the filing of the action in August 1989 to even make an
attempt at presenting the subject documents to the courts which they did only on
January 28, 1998, at such time when not only the trial on the merits had concluded, but
also when the May 31, 1996 judgment of the appellate court had already become final
and executory. This undue delay in the presentation of the subject documents casts
doubt as to the authenticity and reliability of the same. If the document sevidencing the

alleged partition and sale of the properties really existed, no impediment could have
prevented its offer as evidence.
We, therefore, find no error in the refusal by the courts below to give any probative
value to the subject documents. To reiterate, petitioners presented the same only after
the decision of the appellate court became final and executory, without any explanation.
In fact, as observed by the CA, the formal offer of documentary evidence made by
petitioners makes reference not to any deed of sale or extrajudicial partition with sale
but to "diagrams showing the divisions of properties of the spouses Severino Mabborang
and Maria Magabung among and between their children, including their child Sofronia
who is the mother of Rufino Mabborang," which are the only evidence marked and
offered for the purpose of proving that "Sofronia sold all her portions in the property to
various persons." For reasons of their own, petitioners did not formally offer in evidence
THIRD DIVISION
G.R. No. 136860            January 20, 2003
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
AGPANGA LIBNAO y KITTEN and ROSITA NUNGA y VALENCIA, accused.
AGPANGA LIBNAO y KITTEN, accused-appellant.
Constitutional Law; Searches and Seizures; The constitutional guarantee embodied
in Article III, Section 2 of the 1987 Constitution is not a blanket prohibition against all
searches and seizures as it operates only against “unreasonable” searches and seizures.—
These arguments fail to impress. The general rule is that a search may be conducted by
law enforcers only on the strength of a search warrant validly issued by a judge as
provided in Article III, Section 2 of the 1987 Constitution, thus: “The right of the people
to be secure in their persons, houses, papers and effects against unreasonable searches
and seizures of whatever nature and for any purpose shall be inviolable, and no search
warrant and warrant of arrest shall issue except upon probable cause to be determined
personally by the judge after examination under oath or affirmation of the complainant
and the witnesses he may produce, and particularly describing the place to be searched
and the persons or things to be seized.” The constitutional guarantee is not a blanket
prohibition against all searches and seizures as it operates only against “unreasonable”
searches and seizures. Searches and seizures are as a rule unreasonable unless
authorized by a validly issued search warrant or warrant of arrest. Thus, the
fundamental protection accorded by the search and seizure clause is that between
persons and police must stand the protective authority of a magistrate clothed with
power to issue or refuse to issue search warrants and warrants of arrest.
Page 13 of 78
the subject documents before the trial court as required by the Rules of Court. To admit
these documents now deprives respondents of the opportunity to examine and
controvert the same, which runs contrary to the fundamental principles of due process.
WHEREFORE, premises considered, the instant petition is DENIED. The Decision and
Resolution, dated November 12, 2007 and March 18, 2008, respectively, of the Court
Appeals in CA-G.R. CV No. 86656, which affirmed the Judgment dated December 14,
2005, of the Regional Trial Court in Civil Case No. 4051, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
Same; Same; Exceptions to Warrant Requirement; Search of Moving Vehicles; Peace
officers in warrantless search of moving vehicles are limited to routine checks where the
examination of the vehicles is limited to visual inspection.—Be that as it may, the
requirement that a judicial warrant must be obtained prior to the carrying out of a
search and seizure is not absolute. There are certain familiar exceptions to the rule, one
of which relates to search of moving vehicles. Warrantless search and seizure of moving
vehicles are allowed in recognition of the impracticability of securing a warrant under
said circumstances as the vehicle can be quickly moved out of the locality or jurisdiction
in which the warrant may be sought. Peace officers in such cases, however, are limited to
routine checks where the examination of the vehicle is limited to visual inspection.
When a vehicle is stopped and subjected to an extensive search, such would be
constitutionally permissible only if the officers made it upon probable cause, i.e., upon a
belief, reasonably arising out of circumstances known to the seizing officer, that an
automobile or other vehicle contains as item, article or object which by law is subject to
seizure and destruction.
Same; Same; Same; Where the police had been conducting surveillance operations
for three months in the area, which surveillance yielded the information that once a
month, the two accused transport drugs in big bulks, and at 10:00 one night, the police
received a tip that the two will be transporting drugs that night riding a tricycle, the two
being intercepted three hours later, riding a tricycle and carrying a suspicious-looking
black bag, and when asked who owned and what its content was, both became uneasy, the
warrantless search and seizure of the bag was not illegal.—The warrantless search in the
case at bench is not bereft of a probable cause. The Tarlac Police Intelligence Division

had been conducting surveillance operation for three months in the area. The
Surveillance yielded the information that once a month, appellant and her co-accused
Rosita Nunga transport drugs in big bulks. At 10:00 pm of October 19, 1996, the police
received a tip that the two will be transporting drugs that night riding a tricycle. Surely,
the two were intercepted three hours later, riding a tricycle and carrying a suspicious-
looking black bag, which possibly contained the drugs in bulk. When they were asked
who owned it and what its content was, both became uneasy. Under these
circumstances, the warrantless search and seizure of appellant’s bag was not illegal.
Same; Same; Warrantless Arrests; In Flagrante Delicto; One of the instances a police
officer is permitted to carry out a warrantless arrest is when the person to be arrested is
caught committing a crime.—It is also clear that at the time she was apprehended, she
was committing a criminal offense. She was making a delivery or transporting
prohibited drugs in violation of Article II, Section 4 of R.A. No. 6425. Under the Rules of
Court, one of the instances a police officer is permitted to carry out a warrantless arrest
is when the person to be arrested is caught committing a crime in flagrante delicto.
Pleadings and Practice; Formal Offer of Evidence; Evidence not formally offered can
be considered by the court as long as they have been properly identified by testimony duly
recorded and they have themselves been incorporated in the records of the case.—
Appellant then faults the trial court for appreciating and taking into account the object
and documentary evidence of the prosecution despite the latter’s failure to formally
offer them. Absent any formal offer, she argues that they again must be deemed
inadmissible. The contention is untenable. Evidence not formally offered can be
considered by the court as long as they have been properly identified by testimony duly
recorded and they have themselves been incorporated in the records of the case. All the
documentary and object evidence in this case were properly identified, presented and
marked as exhibits in court, including the bricks of marijuana. Even without their formal
offer, therefore, the prosecution can still establish the case because witnesses properly
identified those exhibits, and their testimonies are recorded. Furthermore, appellant’s
counsel had cross-examined the prosecution witnesses who testified on the exhibits.
Criminal Law; Witnesses; Testimonies of witnesses need only corroborate each other
on important and relevant details concerning the principal occurrence.—Again,
appellant’s arguments lack merit. The alleged inconsistencies she mentions refer only to
minor details and not to material points regarding the basic elements of the crime. They
are inconsequential that they do not affect the credibility of the witnesses nor detract
from the established fact that appellant and her co-accused were transporting
Page 14 of 78
marijuana. Testimonies of witnesses need only corroborate each other on important and
relevant details concerning the principal occurrence. The identity of the person who
opened the bag is clearly immaterial to the guilt of the appellant. Besides, it is to be
expected that the testimony of witnesses regarding the same incident may be
inconsistent in some aspects because different persons may have different recollections
of the same incident.
Same; Dangerous Drugs Act; Alibis and Denials; The defense of denial and alibi has
been invariably viewed by the courts with disfavor for it can just as easily be concocted and
is a common and standard defense ploy in most cases involving violation of the Dangerous
Drugs Act.—Against the credible positive testimonies of the prosecution witnesses,
appellant’s defense of denial and alibi cannot stand. The defense of denial and alibi has
been invariably viewed by the courts with disfavor for it can just as easily be concocted
and is a common and standard defense ploy in most cases involving violation of the
Dangerous Drugs Act. It has to be substantiated by clear and convincing evidence. The
sole proof presented in the lower court by the appellant to support her claim of denial
and alibi was a sworn statement, which was not even affirmed on the witness stand by
the affiant. Hence, we reject her defense.
PUNO, J.:
Before us is an appeal from the Decision dated November 19, 1998 of the Regional Trial
Court, Branch 65, Tarlac City, finding appellant Agpanga Libnao and her co-accused
Rosita Nunga guilty of violating Article II, Section 4 of R.A. No. 6425, otherwise known as
the Dangerous Drugs Act of 1972.1 For their conviction, each was sentenced to suffer an
imprisonment of reclusion perpetua and to pay a fine of two million pesos.
Appellant and her co-accused were charged under the following Information:
"That on or about October 20, 1996 at around 1:00 o’clock dawn, in the
Municipality of Tarlac, Province of Tarlac, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused conspiring,
confederating and helping with one another, without being lawfully authorized,
did then and there willfully, unlawfully and feloniously make delivery/transport
with intent to sell marijuana leaves wrapped in a transparent plastic weighing
approximately eight (8) kilos, which is in violation of Section 4, Article II of RA
6425, otherwise known as the Dangerous Drugs Act of 1972, as amended.
CONTRARY TO LAW."2

During their arraignment, both entered a plea of Not Guilty. Trial on the merits ensued.
It appears from the evidence adduced by the prosecution that in August of 1996,
intelligence operatives of the Philippine National Police (PNP) stationed in Tarlac, Tarlac
began conducting surveillance operation on suspected drug dealers in the area. They
learned from their asset that a certain woman from Tajiri, Tarlac and a companion from
Baguio City were transporting illegal drugs once a month in big bulks.
On October 19, 1996, at about 10 o’clock in the evening, Chief Inspector Benjamin Arceo,
Tarlac Police Chief, held a briefing in connection with a tip which his office received that
the two drug pushers, riding in a tricycle, would be making a delivery that night. An hour
later, the Police Alert Team installed a checkpoint in Barangay Salapungan to apprehend
the suspects. Witness SPO1 Marlon Gamotea, PO3 Florante Ferrer and SPO3 Roberto
Aquino were assigned to man the checkpoint.
At about 1:00 o’clock in the morning of the following day, SPO1 Gamotea and PO3 Ferrer
flagged down a passing tricycle. It had two female passengers seated inside, who were
later identified as the appellant Agpanga Libnao and her co-accused Rosita Nunga. 3 In
front of them was a black bag. Suspicious of the black bag and the two’s uneasy behavior
when asked about its ownership and content, the officers invited them to Kabayan
Center No.2 located at the same barangay. They brought with them the black bag.
Upon reaching the center, PO3 Ferrer fetched Barangay Captain Roy Pascual to witness
the opening of the black bag. In the meantime, the two women and the bag were turned
over to the investigator on duty, SPO3 Arthur Antonio. As soon as the barangay captain
arrived, the black bag was opened in the presence of the appellant, her co-accused and
personnel of the center. Found inside it were eight bricks of leaves sealed in plastic bags
and covered with newspaper. The leaves were suspected to be marijuana.
To determine who owns the bag and its contents, SPO3 Antonio interrogated the two.
Rosita Nunga stated that it was owned by the appellant. The latter, in turn, disputed this
allegation. Thereafter, they were made to sign a confiscation receipt without the
assistance of any counsel, as they were not informed of their right to have one. During
the course of the investigation, not even close relatives of theirs were present.
The seized articles were later brought to the PNP Crime Laboratory in San Fernando,
Pampanga on October 23, 1996. Forensic Chemist Daisy P. Babu conducted a laboratory
examination on them. She concluded that the articles were marijuana leaves weighing
eight kilos.4
For their part, both accused denied the accusation against them. Rosita Nunga testified
that in the evening of October 19,1996, she went to buy medicine for her ailing child at a
Page 15 of 78
pharmacy near the Tarlac Provincial Hospital. The child was suffering from diarrhea,
occasioned by abdominal pain. To return to their house, she boarded a tricycle bound for
Barangay Tariji, where she resides. Along the way, the tricycle she was riding was
flagged down by a policeman at a checkpoint in Barangay Salapungan. She was taken
aback when the officer invited her to the Kabayan Center. It was there that she was
confronted with the black bag allegedly containing eight bricks of marijuana leaves. She
disputed owning the bag and knowing its contents. She also denied sitting beside the
appellant in the passenger’s seat inside the tricycle, although she admitted noticing a
male passenger behind the driver.
Remarkably, appellant did not appear in court and was only represented by her lawyer.
The latter marked and submitted in evidence an affidavit executed by one Efren Gannod,
a security guard of Philippine Rabbit Bus Lines in Tarlac, Tarlac. The sworn statement
declared that at about 0220H on October 20, 1996, SPO2 Antonio arrived at their
terminal and arrested a certain woman who boarded their Bus No. 983. The incident
was recorded in the company’s logbook. Gannod, however, was not presented in court to
attest that the woman referred in his affidavit was the appellant.
After trial, the court convicted appellant and her co-accused Rosita Nunga, thus:
"WHEREFORE, finding both accused guilty beyond reasonable doubt of the
offense of violation of Article II, Section 4 of RA 6425 in relation to RA 7659,
they are hereby sentenced to suffer an imprisonment of reclusion perpetua and
to pay a fine of two million pesos.
SO ORDERED."5
Aggrieved by the verdict, appellant interposed the present appeal. In her brief, she
assigned the following errors:
"1. The Honorable Regional Trial Court failed to appreciate the contention of the
defense that the right of accused against illegal and unwarranted arrest and
search was violated by the police officers who arrested both accused.
2. The Honorable Court failed to appreciate the contention of the defense that
the right of the accused to custodial investigation was deliberately violated by
the peace officers who apprehended and investigated the accused.
3. The Honorable Court miserably failed to evaluate the material inconsistencies
in the testimonies of the prosecution’s witnesses which inconsistencies cast
doubt and make incredible the contention and version of the prosecution.

4. The Honorable Court gravely abused its discretion when it appreciated and
considered the documentary and object evidence of the prosecution not
formally offered amounting to ignorance of the law."6
We are not persuaded by these contentions; hence, the appeal must be dismissed.
In arguing that her arrest was unlawful, appellant capitalizes on the absence of a
warrant for her arrest. She contends that at the time she was apprehended by the police
officers, she was not committing any offense but was merely riding a tricycle. In the
same manner, she impugns the search made on her belongings as illegal as it was done
without a valid warrant or under circumstances when warrantless search is permissible.
Consequently, any evidence obtained therein is inadmissible against her.
These arguments fail to impress. The general rule is that a search may be conducted by
law enforcers only on the strength of a search warrant validly issued by a judge as
provided in Article III, Section 2 of the 1987 Constitution, thus:
"The right of the people to be secure in their persons, houses, papers and effects
against unreasonable searches and seizures of whatever nature and for any
purpose shall be inviolable, and no search warrant and warrant of arrest shall
issue except upon probable cause to be determined personally by the judge
after examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to be searched
and the persons or things to be seized."7
The constitutional guarantee is not a blanket prohibition against all searches and
seizures as it operates only against "unreasonable" searches and seizures. Searches and
seizures are as a rule unreasonable unless authorized by a validly issued search warrant
or warrant of arrest. Thus, the fundamental protection accorded by the search and
seizure clause is that between persons and police must stand the protective authority of
a magistrate clothed with power to issue or refuse to issue search warrants and
warrants of arrest.8
Be that as it may, the requirement that a judicial warrant must be obtained prior to the
carrying out of a search and seizure is not absolute. There are certain familiar exceptions
to the rule, one of which relates to search of moving vehicles.9 Warrantless search and
seizure of moving vehicles are allowed in recognition of the impracticability of securing
a warrant under said circumstances as the vehicle can be quickly moved out of the
locality or jurisdiction in which the warrant may be sought. 10 Peace officers in such
cases, however, are limited to routine checks where the examination of the vehicle is
limited to visual inspection.11 When a vehicle is stopped and subjected to an extensive
search, such would be constitutionally permissible only if the officers made it upon
Page 16 of 78
probable cause, i.e., upon a belief, reasonably arising out of circumstances known to the
seizing officer, that an automobile or other vehicle contains as item, article or object
which by law is subject to seizure and destruction.12
In earlier decisions, we held that there was probable cause in the following instances: (a)
where the distinctive odor of marijuana emanated from the plastic bag carried by the
accused;13 (b) where an informer positively identified the accused who was observed to
be acting suspiciously;14 (c) where the accused who were riding a jeepney were stopped
and searched by policemen who had earlier received confidential reports that said
accused would transport a quantity of marijuana;15 (d) where Narcom agents had
received information that a Caucasian coming from Sagada, Mountain Province had in
his possession prohibited drugs and when the Narcom agents confronted the accused
Caucasian because of a conspicuous bulge in his waistline, he failed to present his
passport and other identification papers when requested to do so; 16 (f) where the
moving vehicle was stopped and searched on the basis of intelligence information and
clandestine reports by a deep penetration agent or spy -- one who participated in the
drug smuggling activities of the syndicate to which the accused belong -- that said
accused were bringing prohibited drugs into the country; 17 (g) where the arresting
officers had received a confidential information that the accused, whose identity as a
drug distributor was established in a previous test-buy operation, would be boarding
MV Dona Virginia and probably carrying shabu with him; 18 (h) where police officers
received an information that the accused, who was carrying a suspicious-looking gray
luggage bag, would transport marijuana in a bag to Manila;19 and (i) where the
appearance of the accused and the color of the bag he was carrying fitted the description
given by a civilian asset.20
The warrantless search in the case at bench is not bereft of a probable cause. The Tarlac
Police Intelligence Division had been conducting surveillance operation for three
months in the area. The surveillance yielded the information that once a month,
appellant and her co-accused Rosita Nunga transport drugs in big bulks. At 10:00 pm of
October 19, 1996, the police received a tip that the two will be transporting drugs that
night riding a tricycle. Surely, the two were intercepted three hours later, riding a
tricycle and carrying a suspicious-looking black bag, which possibly contained the drugs
in bulk. When they were asked who owned it and what its content was, both became
uneasy. Under these circumstances, the warrantless search and seizure of appellant’s
bag was not illegal.
It is also clear that at the time she was apprehended, she was committing a criminal
offense. She was making a delivery or transporting prohibited drugs in violation of
Article II, Section 4 of R.A. No. 6425. Under the Rules of Court, one of the instances a
police officer is permitted to carry out a warrantless arrest is when the person to be
arrested is caught committing a crime in flagrante delicto, thus:

"Section 5. Arrest without Warrant; when lawful. - A peace officer or a private
person may, without warrant, arrest a person:
(a) When in his presence, the person to be arrested has committed, is
actually committing, or is attempting to commit an offense;
(b) When an offense has in fact just been committed, and he has probable cause
to believe based on personal knowledge of facts or circumstances that the
person to be arrested has committed it; and
(c) When the person to be arrested is a prisoner who has escaped from a penal
establishment or place where he is serving final judgment or temporarily
confined while his case is pending, or has escaped while being transferred from
one confinement to another.
x x x."21 (emphasis supplied)
Appellant also takes issue of the fact that she was not assisted by a lawyer when police
officers interrogated her. She claimed that she was not duly informed of her right to
remain silent and to have competent counsel of her choice. Hence, she argues that the
confession or admission obtained therein should be considered inadmissible in evidence
against her.
These contentions deserve scant attention. Appellant did not make any confession
during her custodial investigation. In determining the guilt of the appellant and her co-
accused, the trial court based its decision on the testimonies of prosecution witnesses
and on the existence of the confiscated marijuana. We quote the relevant portion of its
decision:
"Earlier in the course of the proceedings, the court then presided by Judge Angel
Parazo, granted bail to accused Agpanga Libnao, ruling that the confiscation
receipt signed by both accused (Exhibit "C") is inadmissible because they were
not assisted by a counsel. Confronted with this same issue, this court finds the
postulate to rest on good authority and will therefore reiterate its
inadmissibility.
Page 17 of 78
Since the prosecution had not presented any extrajudicial confession extracted
from both accused as evidence of their guilt, the court finds it needless to
discuss any answer given by both accused as a result of the police interrogation
while in their custody. By force of necessity, therefore, the only issue to be
resolved by the court is whether or not, based on the prosecution’s
evidence, both accused can be convicted."22 (emphasis supplied)
Appellant then faults the trial court for appreciating and taking into account the object
and documentary evidence of the prosecution despite the latter’s failure to formally
offer them. Absent any formal offer, she argues that they again must be deemed
inadmissible.
The contention is untenable. Evidence not formally offered can be considered by the
court as long as they have been properly identified by testimony duly recorded and they
have themselves been incorporated in the records of the case. 23 All the documentary and
object evidence in this case were properly identified, presented and marked as exhibits
in court, including the bricks of marijuana.24 Even without their formal offer, therefore,
the prosecution can still establish the case because witnesses properly identified those
exhibits, and their testimonies are recorded. 25 Furthermore, appellant’s counsel had
cross-examined the prosecution witnesses who testified on the exhibits. 26
Appellant also assails the credibility of the testimonies of the prosecution witnesses. She
first cites the inconsistency between the testimony of SPO1 Marlon Gamotea, who said
that it was SPO2 Antonio who opened the black bag containing the marijuana; and that
of SPO2 Antonio, who declared that the bag was already open when he arrived at the
Kabayan Center. She then focuses on the police officers’ failure to remember the family
name of the driver of the tricycle where she allegedly rode, claiming that this is
improbable and contrary to human experience.
Again, appellant’s arguments lack merit. The alleged inconsistencies she mentions refer
only to minor details and not to material points regarding the basic elements of the
crime. They are inconsequential that they do not affect the credibility of the witnesses
nor detract from the established fact that appellant and her co-accused were
transporting marijuana. Testimonies of witnesses need only corroborate each other on
important and relevant details concerning the principal occurrence. 27 The identity of the
person who opened the bag is clearly immaterial to the guilt of the appellant. Besides, it
is to be expected that the testimony of witnesses regarding the same incident may be
inconsistent in some aspects because different persons may have different recollections
of the same incident.28
Likewise, we find nothing improbable in the failure of the police officers to note and
remember the name of the tricycle driver for the reason that it was unnecessary for

them to do so. It was not shown that the driver was in complicity with the appellant and
her co-accused in the commission of the crime.
To be sure, credence was properly accorded to the testimonies of prosecution witnesses,
who are law enforcers. When police officers have no motive to testify falsely against the
accused, courts are inclined to uphold this presumption.29 In this case, no evidence has
been presented to suggest any improper motive on the part of the police enforcers in
arresting the appellant.
Against the credible positive testimonies of the prosecution witnesses, appellant’s
defense of denial and alibi cannot stand. The defense of denial and alibi has been
invariably viewed by the courts with disfavor for it can just as easily be concocted and is
a common and standard defense ploy in most cases involving violation of the Dangerous
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 117103 January 21, 1999
Spouses RENATO S. ONG and FRANCIA N. ONG, petitioners,
vs.
COURT OF APPEALS, INLAND RAILWAYS, INC. and PHILTRANCO SERVICE
ENTERPRISE, INC., respondents.
Evidence; Pleadings and Practice; Offer of Evidence; A formal offer of evidence is
necessary, since judges are required to base their findings of fact and their judgment solely
and strictly upon the evidence offered by the parties at the trial—to allow parties to attach
any document to their pleadings and then expect the court to consider it as evidence, even
without formal offer and admission, may draw unwarranted consequences.—Section 34,
Rule 132 of the Rules of Court, provides that “[t]he court shall consider no evidence
which has not been formally offered.” A formal offer is necessary, since judges are
required to base their findings of fact and their judgment solely and strictly upon the
evidence offered by the parties at the trial. To allow parties to attach any document to
their pleadings and then expect the court to consider it as evidence, even without formal
offer and admission, may draw unwarranted consequences. Opposing parties will be
deprived of their chance to examine the document and to object to its admissibility. On
the other hand, the appellate court will have difficulty reviewing documents not
previously scrutinized by the court below.
Page 18 of 78
Drugs Act.30 It has to be substantiated by clear and convincing evidence. 31 The sole proof
presented in the lower court by the appellant to support her claim of denial and alibi
was a sworn statement, which was not even affirmed on the witness stand by the affiant.
Hence, we reject her defense.
IN VIEW WHEREOF, the instant appeal is DENIED. The decision of the trial court finding
appellant guilty beyond reasonable doubt of the offense of violation of Article II, Section
4 of R.A. No. 6425 in relation to R.A. No. 7659, and sentencing her to an imprisonment
of reclusion perpetua and to pay a fine of two million pesos is hereby AFFIRMED.
SO ORDERED.
Panganiban, Sandoval-Gutierrez, Corona, and Carpio Morales, JJ., concur.
Same; Same; Same; A document or an article is valueless unless it is formally offered
in evidence, and the opposing counsel is given an opportunity to object to it and to cross-
examine any witness called to present or identify it; Evidence not formally offered before
the trial court cannot be considered on appeal, for to consider them at such stage will deny
the other parties their right to rebut them.—The petitioners’ allegations in their
Complaint did not establish a cause of action against Philtranco. They similarly failed to
make any reference to said Police Report during the presentation of their case. This is
precisely why Respondent Philtranco opted not to present further evidence. A document
or an article is valueless unless it is formally offered in evidence, and the opposing
counsel is given an opportunity to object to it and to cross-examine any witness called to
present or identify it. Evidence not formally offered before the trial court cannot be
considered on appeal, for to consider them at such stage will deny the other parties their
right to rebut them.
Damages;  Quasi-Delicts; Torts; The fundamental principle of the law on damages is
that one injured by a breach of contract or by a wrongful or negligent act or omission shall
have a fair and just compensation, commensurate with the loss sustained as a consequence
of the defendant’s acts.—Granting arguendo that there was an agreement to submit the
case for decision based on the pleadings, this does not necessarily imply that petitioners
are entitled to the award of damages. The fundamental principle of the law on damages
is that one injured by a breach of contract (in this case, the contract of transportation) or
by a wrongful or negligent act or omission shall have a fair and just compensation,
commensurate with the loss sustained as a consequence of the defendant’s acts. Hence,
actual pecuniary compensation is the general rule, except where the circumstances
warrant the allowance of other kinds of damages.

Same; Except as provided by law or by stipulation, a party is entitled to adequate
compensation only for such pecuniary loss as he has duly proven.—Actual damages are
such compensation or damages for an injury that will put the injured party in the
position in which he had been before he was injured. They pertain to such injuries or
losses that are actually sustained and susceptible of measurement. Except as provided
by law or by stipulation, a party is entitled to adequate compensation only for such
pecuniary loss as he has duly proven.
Same; Damages cannot be presumed—the award thereof must be based on the
evidence presented, not on the personal knowledge of the court; and certainly not on
flimsy, remote, speculative and nonsubstantial proof.—To be recoverable, actual damages
must be pleaded and proven in Court. In no instance may the trial judge award more
than those so pleaded and proven. Damages cannot be presumed. The award thereof
must be based on the evidence presented, not on the personal knowledge of the court;
and certainly not on flimsy, remote, speculative and nonsubstantial proof. Article 2199
of the Civil Code expressly mandates that “[e]xcept as provided by law or by stipulation,
one is entitled to an adequate compensation only for such pecuniary loss suffered by
him as he has duly proved.”
Same; Physical Injuries; A person is entitled to the physical integrity of his or her
body, and if that integrity is violated, damages are due and assessable—thus, the usual
practice is to award moral damages for physical injuries sustained.—A person is entitled
to the physical integrity of his or her body, and if that integrity is violated, damages are
due and assessable. However, physical injury, like loss or diminution of use of an arm or
a limb, is not a pecuniary loss. Indeed, it is not susceptible of exact monetary estimation.
Thus, the usual practice is to award moral damages for physical injuries sustained.
In Mayo v. People, the Court held that the permanent scar on the forehead and the loss of
the use of the right eye entitled the victim to moral damages. The victim, in said case,
was devastated by mental anguish, wounded feelings and shock, which she experienced
as a result of her false eye and the scar on her forehead. Furthermore, the loss of vision
in her right eye hampered her professionally for the rest of her life.
Same; Same; Evidence; Witnesses; Expert Testimony;  The award of cost of medical
procedures to restore the injured person to his or her former condition necessitates expert
Page 19 of 78
testimony on the cost of possible restorative medical procedure.—In some instances, the
Court awards the cost of medical procedures to restore the injured person to his or her
former condition. However, this award necessitates expert testimony on the cost of
possible restorative medical procedure. In Gatchalian v. Delim, the Court, reasoning that
a scar resulting from the infliction of injury on the face of a woman gave rise to a
legitimate claim for restoration to her conditio ante, granted P15,000 as actual damages
for plastic surgery. It bears emphasis that the said amount was based on expert
testimony.
Same; Evidence; Although actual damages include indemnification for profits which
the injured party failed to obtain (lucro cesante or lucrum cesans), the rule requires that
said person produce the “best evidence of which his case is susceptible.”—Protesting the
deletion of the award for Francia’s unrealized income, petitioners contend that Francia’s
injuries and her oral testimony adequately support their claim. The Court disagrees.
Although actual damages include indemnification for profits which the injured party
failed to obtain (lucro cesante or lucrum cesans), the rule requires that said person
produce the “best evidence of which his case is susceptible.” The bare and
unsubstantiated assertion of Francia that she usually earned P200 a day from her
market stall is not the best evidence to prove her claim of unrealized income for the
eight-month period that her arm was in plaster cast. Her testimony that it was their
lessor who filed their income tax returns and obtained business licenses for them does
not justify her failure to present more credible evidence of her income.
Same; Attorney’s Fees; Standards in Fixing Attorney’s Fees; The award of attorney’s
fees is payable not to the lawyer but to the client, unless the two have agreed that the
award shall pertain to the lawyer as additional compensation or as part thereof.—Under
the Civil Code, an award of attorney’s fees is an indemnity for damages ordered by a
court to be paid by the losing party to the prevailing party, based on any of the cases
authorized by law. It is payable not to the lawyer but to the client, unless the two have
agreed that the award shall pertain to the lawyer as additional compensation or as part
thereof. The Court has established a set of standards in fixing the amount of attorney’s
fees: “(1) [T]he amount and character of the services rendered; (2) labor, time and
trouble involved; (3) the nature and importance of the litigation or business in which the
services were rendered; (4) the responsibility imposed; (5) the amount of money or the
value of the property affected by the controversy or involved in the employment; (6) the
skill and experience called for in the performance of the services; (7) the professional
character and social standing of the attorney; (8) the results secured, it being a

recognized rule that an attorney may properly charge a much larger fee when it is
contingent than when it is not.”
Same; Same; Attorneys; Legal Ethics;  Pleadings and Practice;  A counsel’s handling
of the case is sorely inadequate where it is shown that he failed to follow elementary norms
of civil procedure and evidence.—Counsel’s performance, however, does not justify the
award of 25 percent attorney’s fees. It is well-settled that such award is addressed to
sound judicial discretion and subject to judicial control. We do not see any abuse thereof
in the case at bar. In fact, the appellate court had been generous to petitioners’ counsel,
considering that the nature of the case was not exceptionally difficult, and he was not
required to exert Herculean efforts. All told, his handling of the case was sorely
inadequate, as shown by his failure to follow elementary norms of civil procedure and
evidence.
PANGANIBAN, J.:
Evidence not formally offered during the trial cannot be used for or against a party
litigant. Neither may it be taken into account on appeal. Furthermore, actual and moral
damages must be proven before any award thereon can be granted.
The Case
Before us is a Petition for Review on Certiorari of the Decision dated May 20, 1993 and
the Resolution dated June 8, 1994, both promulgated by the Court of Appeals 1 in CA-GR
CV No. 33755, modifying the Decision of the trial court in an action for damages filed by
spouses Renato and Francia Ong (petitioners herein) against Philtranco Service
Enterprise, Inc. and Inland Trailways, Inc. (respondents herein, hereafter referred to as
"Philtranco" and "Inland," respectively).
The assailed Decision disposed as follows:2
WHEREFORE, the appealed decision is hereby MODIFIED by ordering
INLAND TRAILWAYS, INC. to pay [petitioners] P3,977.00 for actual
damages, P30,000.00 as moral damages and ten (10) percent as
contingent attorney's fees and to pay the costs of the suit.
Reconsideration was denied in the assailed Resolution:3
Page 20 of 78
WHEREFORE, IN VIEW OF THE FOREGOING, both motions for reconsideration filed
by [petitioners] and . . . Inland Trailways, Inc. are hereby DENIED.
The Facts
On February 9, 1987, petitioners boarded as paying passengers Bus-No. 101 with late
No. EVB-508 ("Inland bus," for convenience), which was owned and operated by Inland
Trailways under a Lease Agreement with Philtranco. It was driven by Calvin
Coronel.4 Around 3:50 in the morning of said date, when the Inland bus slowed down to
avoid a stalled cargo truck in Tiaong, Quezon, it was bumped from the rear by another
bus, owned and operated by Philtranco and driven by Apolinar Miralles. Francia
sustained wounds and fractures in both of her legs and her right arm, while Renato
suffered injuries on his left chest, right knee, right arm and left eye. 5 They were brought
to the San Pablo City District Hospital for treatment and were confined there from
February 9 to 18, 1987. 6
On December 22, 1988, petitioners filed an action for damages against Philtranco and
Inland. 7 In their Complaint, they alleged that they suffered injuries, preventing Francia
from operating a sari-sari store at Las Piñ a's, Metro Manila, where she derived a daily
income of P200; and Renato from continuing his work as an overseas contract worker
(pipe welder) with a monthly salary of $690. Stating that they incurred P10,000 as
medical and miscellaneous expenses, they also claimed moral damages of P500,000
each, exemplary and corrective damages of P500,000 each, and compensatory damages
of P500,000 each plus 35 percent thereof as attorney's fees. In addition to their
testimonies, petitioners also presented the following documentary evidence:
Exhibit A — Philtranco Bus Ticket No. 333398
B — Philtranco Bus Ticket No. 333399
C — Certification dated February 12, 1987
D — Medical Certificate of Francis Ong dated February 18, 1987
E — Medical Certificate of Renato S. Ong dated February 18, 1987
F — Statement of Account of Francia N. Ong in the amount of P1,153.50
G — Statement of Account of Renato S. Ong in the amount of P1,973.50
H — Receipt dated February 9, 1987

I — Receipt dated March 3, 1987
J — Receipt dated February 18, 1987
K — Receipt dated February 24, 1987
L & - L-1 — Picture of face of Renato S. Ong
M & M-1 — Picture of face of Renato S. Ong
N — Payroll Summary for [period ending] November 1986
O — Payroll Summary for [period ending] December, 1986
Philtranco answered that the Inland bus with Plate No. EVB-508 (which had transported
petitioners) was registered and owned by Inland; that its driver, Calvin Coronel, was an
employee of Inland; that Philtranco was merely leasing its support facilities, including
the use of its bus tickets, to Inland; and that under their Agreement, Inland would be
solely liable for all claims and liabilities arising from the operation of said bus.
Philtranco further alleged that, with respect to its own bus (which bumped the Inland
bus), it exercised the diligence of a good father of a family in the selection and
supervision of its drivers, and that the proximate cause of the accident was the
negligence of either the cargo truck or the Inland bus which collided with said cargo
truck.
Inland answered that, according to the Police Report, it was Apolinar Miralles, the driver
of the Philtranco bus, who was at fault, as shown by his flight from the situs of the
accident; that said bus was registered and owned by Philtranco; and that the driver of
the Inland bus exercised extraordinary diligence as testified to by its passengers. Inland
and Philtranco filed cross-claims against each other.
Both respondents moved to submit the case for decision without presenting further
evidence. Consequently, the trial court, in its Order dated July 5, 1989, resolved: 8
When this case was called for continuation of presentation of plaintiffs
evidence, over objections from counsels for defendants, plaintiffs
counsel was allowed to recall his first witness, Renato S. Ong, for some
additional direct questions[;] and after cross-examination by defendant
Inland Trailways, Inc., adopted by defendant Philtranco Service
Enterprise, Inc., plaintiff presented his second witness, [Francia] Ong,
whose testimony on direct, cross and redirect was terminated[;] and as
Page 21 of 78
prayed for, counsel for the plaintiffs shall have five (5) days from today
within which to submit his formal offer of evidence, furnishing copies
thereof to defendants who shall have five (5) days from their receipt
within which to submit comments after which the same shall be
deemed submitted for resolution.
By agreement, considering the stipulations of parties made of record
regarding factual issues except as to whether or not the bus is included
in the lease, counsels for the two (2) defendants are given a period of
ten (10) days from today within which to submit simultaneous offer[s]
of admission and denials not only on the above exception but on any
other relevant matter.
Considering that the documents are admitted, there is no necessity of
any formal written offer of evidence and, therefore, after all the
foregoing, the case shall be deemed submitted for decision upon
simultaneous memoranda of the parties and upon submission of
complete transcripts.
Thereafter, the trial court rendered its May 7, 1991 Decision, which disposed as follows: 9
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in
favor of the [petitioners] absolving Inland Trailways, Inc., from any
liability whatsoever, and against . . . Philtranco Service Enterprise, Inc.,
ordering the latter to pay the [petitioners] —
1) P10,000.00 as actual damages for medical and miscellaneous
expenses;
2) P50,000.00 as compensatory damages for the [diminution] of the use
of the right arm of [petitioner]-wife;
3) P48,000.00 as unrealized profit or income;
4) P50,000.00 as moral damages;
5) 25% of the foregoing as contingent attorney's fees; and
6) the costs.

According to the trial court, the proximate cause of the accident was "the bumping from
behind by the Philtranco bus with Plate No. 259 driven by Apolinar Miralles" based on
the Police Report and the affidavits of passengers, to which Philtranco did not object. As
it failed to prove that it exercised due diligence in the selection and supervision of its
employees under Article 2176 of the Civil Code, Philtranco was held liable based
on culpa aquiliana.
Ruling of the Court of Appeals
On appeal, the Court of Appeals (CA) resolved that Philtranco's liability for damages
could not be predicated upon the Police Report which had not been formally offered in
evidence. The report was merely annexed to the answer of Inland, and petitioner did not
adopt or offer it as evidence. Consequently, it had no probative value and, thus,
Philtranco should be absolved from liability.
Instead, the appellate court found that petitioners sufficiently established a claim against
Inland based on culpa contractual. As a common carrier, Inland was required to observe
extra ordinary diligence under Articles 1735 and 1750 of the Code. Its liability arose
from its failure to transport its passengers and cargo safely, and a finding of fault or
negligence was not necessary to hold it liable for damages. Inland failed to overcome this
presumption of negligence by contrary evidence; thus, it was liable for breach of its
contractual obligation to petitioners under Article 2201 of the Civil Code.
The liability of Inland for medical and miscellaneous expenses was reduced, as the
evidence on record showed that petitioners spent only P3,977. Deemed self-serving was
Francia's testimony that the use of her right arm was diminished and that she lost
income. Thus, the award for unearned income was disallowed and the amount of moral
damages was reduced to P30,000.
Hence, this petition.10
The Issues
In their Memorandum,11 petitioners raise the following issues: 12
[I] Whether or not public respondent committed grave abuse of discretion in
completely reversing the decision of the Regional Trial Court, ordering Philtranco
to indemnify petitioners and in lieu thereof, order[ing] Inland to pay petitioners for
their damages.
Page 22 of 78
[II] Whether or not public respondent committed grave abuse of discretion in
disallowing the P50,000.00 awarded to petitioner, Francia Ong for the diminution
of the use of her right arm and the P48,000.00 representing unrealized income.
[III] Whether or not public respondent committed grave abuse of discretion in
reducing the award for actual and miscellaneous expenses from P10,000.00 to
P3,977.00; the award of P50,000.00 moral damages to P30,000.00; and the 25%
contingent attorney's fees to10% thereof.
Simply stated, the main issues raised are: (1) whether the Police Report, which was not
formally offered in evidence, could be used to establish a claim against Philtranco based
on culpa aquiliana; and (2) whether the reduction in the amounts of damages awarded
was proper.
The Court's Ruling
The petition is devoid of merit.
First Issue:
Retirement of Formal Offer of Evidence
Petitioners take exception to the rule requiring documents to be formally offered in
evidence before they can be given any probative value, arguing that the parties agreed to
submit the case for resolution based on the July 5, 1989 Order of the trial court. Because
of the agreement, petitioners assumed that all the pieces of documentary evidence,
including the Complaint and its Annexes, as well as those in the respective Answers of
the private respondents, were deemed admitted.
We disagree. Section 34, Rule 132 of the Rules of Court, provides that "[t]he court shall
consider no evidence which has not been formally offered." A formal offer is necessary,
since judges are required to base their findings of fact and their judgment solely and
strictly upon the evidence offered by the parties at the trial. To allow parties to attach
any document to their pleadings and then expect the court to consider it as evidence,
even without formal offer and admission, may draw unwarranted consequences.
Opposing parties will be deprived of their chance to examine the document and to object
to its admissibility. On the other hand, the appellate court will have difficulty reviewing
documents not previously scrutinized the court below.13
In adhering to this rule, the appellate court cannot be faulted with reversible error, as it
held: 14

. . . [T]he burden of proof lies with the plaintiff in establishing fault or negligence on
the part of the defendant (Ong vs. Metropolitan Water). This, however, plaintiff-
appellees failed to establish. Albeit, there was a police investigation report finding
the driver of PHILTRANCO negligent which became the basis of the court a qou [for]
holding PHILTRANCO liable, this piece of evidence was merely attached as Annex
"1" of INLAND's answer, nothing more. It was not presented and even offered as
evidence by INLAND nor utilized by plaintiffs-appellees. Thus, even assuming
arguendo that the same had been identified in court, it would have no evidentiary
value. Identification of documentary evidence must be distinguished from its formal
offer as an exhibit. The first is done in the course of the trial and is accompanied by
the marking of the evidence as an exhibit. The second is done only when the party
rests its case and not before. The mere fact that a particular document is identified
and marked as an exhibit does not mean it will be or has been offered as part of the
evidence of the party. The party may decide to offer it if it believes this will advance
the cause, and then again it may decide not to do so at all (People vs. Santito, Jr., 201
SCRA 87).
In the case at bar, the defendant INLAND and plaintiffs-appellees did not identify the
said Annex "1" or the Police Investigation Report as evidence. Thus, under Section
35 of Rule 132 of the Revised Rules on Evidence, the court shall consider no
evidence which has not been formally offered. Corollary, the Police Investigation
Report of Annex "1" cannot be given any evidentiary value.
Absen[t] Annex "1" which was the basis of the trial court in finding PHILTRANCO
liable, the latter is thus exonerated from liability.
Petitioners similarly erred in presuming that said Annex was admitted in evidence by
virtue of the Order of July 5, 1989. Their presumption has no basis. The Order required
counsel for the petitioners to "submit his formal offer of evidence, furnishing copies
thereof to defendants who shall have five (5) days from their receipt within which to
submit comments after which the same shall be deemed submitted for resolution." 15 In
compliance, petitioners filed a written offer of evidence on July 12, 1989. 16 Such offer led
the trial court, in its Order of August 2, 1989, to formally admit in evidence Exhibits
"A"-"O."17 Clearly, the Police Report was neither offered by the petitioners nor admitted
by the trial court.
Moreover, the petitioners' allegations in their Complaint did not establish a cause of
action against Philtranco. They similarly failed to make any reference to said Police
Report during the presentation of their case. This is precisely why Respondent
Philtranco opted not to present further evidence. A document or an article is valueless
unless it is formally offered in evidence, and the opposing counsel is given an
opportunity to object to it and to cross-examine any witness called to present or identify
Page 23 of 78
it.18 Evidence not formally offered before the trial court cannot be considered on appeal,
for to consider them at such stage will deny the other parties their right to rebut them. 19
There is no agreement to submit the case based on the pleading, as contended by the
petitioners. The parties had no such intention, nor did said Order evince such an
agreement.
Second Issue:
Damages Require Evidence
Petitioners aver that there was grave abuse of discretion when the amount of actual
damages awarded was reduced from P10,000 to P3,977, even if the original amount did
not even include the medical expenses that Francia continued to incur; and when the
award of P48,000 as unrealized income was deleted despite her testimony which was
given credence by the trial court.
The Court disagrees. Granting arguendo that there was an agreement to submit the case
for decision based on the pleadings, this does not necessarily imply that petitioners are
entitled to the award of damages. The fundamental principle of the law on damages is
that one injured by a breach of contract (in this case, the contract of transportation) or
by a wrongful or negligent act or omission shall have a fair and just compensation,
commensurate with the loss sustained as a consequence of the defendant's acts. Hence,
actual pecuniary compensation is the general rule, except where the circumstances
warrant the allowance of other kinds of damages.
Actual damages are such compensation or damages for an injury that will put the injured
party in the position in which he had been before he was injured. They pertain to such
injuries or losses that are actually sustained and susceptible of measurement. Except as
provided by law or by stipulation, a party is entitled to adequate compensation only for
such pecuniary loss as he has duly proven.
To be recoverable, actual damages must be pleaded and proven in Court. In no instance
may the trial judge award more than those so pleaded and proven. Damages cannot be
presumed. The award there of must be based on the evidence presented, not on the
personal knowledge of the court; and certainly not on flimsy, remote, speculative and
nonsubstantial proof. Article 2199 of the Civil Code expressly mandates that "[e]xcept as
provided by law or by stipulation, one is entitled to an adequate compensation only for
such pecuniary loss suffered by him as he has duly proved."
The lack of basis for such award was patent in the trial court Decision:

The records will show that from the documentary evidence, [petitioners] have
jointly spent the sum of P3,977.00. [Respondent] Philtranco has not presented any
evidence that it has advanced any amount for medicine, hospitalization and doctor's
fees, but on the contrary, [petitioners] have testified that they paid for their
expenses except at the initial stage wherein a representative of [respondent]
Philtranco went to the hospital to get the receipts of medicines only and paid (t.s.n.
— June 29, 1989, p. 6). Considering the claim of the [petitioners], as alleged in their
complaint they spent P10,000.00 representing medical and miscellaneous
expenses[;] considering that they have gone for consultation to at least two (2)
different doctors, this Court may take judicial notice of the fact that miscellaneous
expenses [are] bound to be incurred to cover transportation and food, and
therefore, finds the amount of P10,000.00 as actual damages to be reasonable.
Damages, after all, are not intended to enrich the complainant at the expense of the
defendant. 20
Moral Damages and Diminution
of Use of Francia's Arm
Petitioners protest the deletion of the amount of P50,000 earlier awarded by the trial
court because of the diminution of the use of Francia's right arm, arguing that she stated
during direct examination that it could no longer perform its normal functions, 21 and
that private respondents impliedly admitted this matter when they failed to present
controverting evidence.
A person is entitled to the physical integrity of his or her body, and if that integrity is
violated, damages are due and assessable. However, physical injury, like loss or
diminution of use of an arm or a limb, is not a pecuniary loss. Indeed, it is nor susceptible
of exact monetary estimation.
Thus, the usual practice is to award moral damages for physical injuries sustained.
In Mayo v. People,22 the Court held that the permanent scar on the forehead and the loss
of the use of the right eye entitled the victim to moral damages. The victim, in said case,
devastated by mental anguish, wounded feelings and shock, which she experienced as a
result of her false eye and the scar on her forehead. Furthermore, the loss of vision in her
right eye hampered her professionally for the rest of her life.
In the case at bar, it was sufficiently shown during the trial that Francia's right arm could
not function in a normal manner and that, as a result, she suffered mental anguish and
anxiety. Thus, an increase in the amount of moral damages awarded, from P30,000 to
P50,000, appears to be reasonable and justified. Renato also suffered mental anxiety and
Page 24 of 78
anguish from the accident. Thus, he should be separately awarded P30,000 as moral
damages.
In some instances, the Court awards the cost of medical procedures to restore the
injured person to his or her former condition. However, this award necessitates expert
testimony on the cost of possible restorative medical procedure. In Gatchalian v.
Delim, 23 the Court, reasoning that a scar resulting from the infliction of injury on the face
of a woman gave rise to a legitimate claim for restoration to her conditio ante, granted
P15,000 as actual damages for plastic surgery. It bears emphasis that the said amount
was based on expert testimony.24
In another case, the Court granted actual or compensatory damages in the sum of
P18,000 for the surgical intervention necessary to arrest the degeneration of the
mandible of a young boy. Again, there was an expert testimony that such medical
procedure would cost P3,000 and would have to be repeated several times to restore
him to nearly normal condition. 25
In the case at bar, petitioner failed to present evidence regarding the feasibility or
practicability and the cost of a restorative medical operation on her arm. Thus, there is
no basis to grant her P48,000 for such expense.
Unrealized Income
Protesting the deletion of the award for Francia's unrealized income, petitioners
contend that Francia's injuries and her oral testimony adequately support their claim.
The Court disagrees. Although actual damages include indemnification for profits which
the injured party failed to obtain (lucro cesante or lucrum cesans),26 the rule requires
that said person produce the "best evidence of which his case is susceptible. 27
The bare and unsubstantiated assertion of Francia that she usually earned P200 a day
from her market stall is not the best evidence to prove her claim of unrealized income
for the eight-month period that her arm was in plaster cast. Her testimony that was their
lessor who filed their income tax returns and obtained business licenses for them does
not justify her failure to present more credible evidence of her income. Furthermore,
after her ten-day confinement at the San Pablo Hospital, 28 she could have returned so
her work at the public market despite the plaster cast on her right arm, since she
claimed to have two nieces as helpers.29 Clearly, the appellate court was correct in
deleting the award for unrealized income, because of petitioner's utter failure to
substantiate her claim.
Attorney's Fees

Counsel for petitioner deeply laments the reduction in the award of attorney's fees. He
alleges that he had to use his own money for transportation, stenographic transcriptions
and other court expenses, and for such reason, avers that the award of 25 percent
attorney's fees made by the trial court was proper.
Under the Civil Code, an award of attorney's fees is an indemnity for damages ordered
by a court to be paid by the losing party to the prevailing party, based on any of the cases
authorized by law. 30 It is payable not to the lawyer but to the client, unless the two have
agreed that the award shall pertain to the lawyer as additional compensation or as part
thereof. The Court has established a set standards in fixing the amount of attorney's
fees: 31
(1) [T]he amount and character of the services rendered; (2) labor, time and trouble
involved; (3) the nature and importance of the litigation or business in which the
services were rendered; (4) the responsibility imposed; (5) the amount of money or
the value of the property affected by the controversy or involved in the
employment; (6) the skill and experience called for in the performance of the
services; (7) the professional character and social standing of the attorney; (8) the
results secured, it being a recognized rule that an attorney may properly charge a
much larger fee when it is contingent than when it is not.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 177797             December 4, 2008
SPS. PEDRO TAN and NENA ACERO TAN, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, respondent.
Land Titles and Deeds; Land Registration; Confirmation of Imperfect Title; Means by
which public lands may be disposed of; Where a person filed his application before the
Regional Trial Court (RTC), then it can be reasonably inferred that he is seeking the
judicial confirmation or legalization of his imperfect or incomplete title over the subject
property.—The Public Land Act, as amended by Presidential Decree No. 1073, governs
lands of the public domain, except timber and mineral lands, friar lands, and privately
owned lands which reverted to the State. It explicitly enumerates the means by which
public lands may be disposed of, to wit: (1) For homestead settlement; (2) By sale; (3)
By lease; and (4) By confirmation of imperfect or incomplete titles; (a) By judicial
Page 25 of 78
Counsel's performance, however, does not justify the award of 25 percent attorney's
fees. It is well-settled that such award is addressed to sound judicial discretion and
subject to judicial control. 32
We do not see any abuse thereof in the case at bar. In fact, the appellate court had been
generous to petitioners' counsel, considering that the nature of the case was not
exceptionally difficult, and he was not required to exert Herculean efforts. All told, his
handling of the case was sorely, inadequate, as shown by his failure to follow elementary
norms of civil procedure and evidence.
WHEREFORE, the assailed Decision is AFFIRMED with the MODIFICATION that Renato
and Francia Ong are separately awarded moral damages in the amount of P30,000 and
P50,000, respectively. The ten percent (10%) attorney's fees shall be based on the total
modified award.1âwphi1.nêt
SO ORDERED.
Romero, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.
legalization. (b) By administrative legalization (free patent). Each mode of disposition is
appropriately covered by separate chapters of the Public Land Act because there are
specific requirements and application procedure for every mode. Since the spouses Tan
filed their application before the RTC, then it can be reasonably inferred that they are
seeking the judicial confirmation or legalization of their imperfect or incomplete
title over the subject property.
Same; Same; Same; Requisites; To prove that the land subject of an application for
registration is alienable, an applicant must conclusively establish the existence of a
positive act of the government such as a presidential proclamation or an executive order
or administrative action, investigation reports of the Bureau of Lands investigator or a
legislative act or statute.—The Court notes that Presidential Decree No. 1073, amending
the Public Land Act, clarified Section 48, paragraph “b” thereof, by specifically declaring
that it applied only to alienable and disposable lands of the public domain. Thus, based
on the said provision of Commonwealth Act No. 141, as amended, the two requisites
which the applicants must comply with for the grant of their Application for Registration
of Title are: (1) the land applied for is alienable and disposable; and (2) the applicants
and their predecessors-in-interest have occupied and possessed the land openly,
continuously, exclusively, and adversely since 12 June 1945. To prove that the land
subject of an application for registration is alienable, an applicant must conclusively
establish the existence of a positive act of the government such as a presidential

proclamation or an executive order or administrative action, investigation reports of the
Bureau of Lands investigator or a legislative act or statute. Until then, the rules on
confirmation of imperfect title do not apply.
Same; Same; Same; A certification from the Department of Environment and Natural
Resources (DENR) that a lot is alienable and disposable is sufficient to establish the true
nature and character of the property and enjoys a presumption of regularity in the
absence of contradictory evidence.—The spouses Tan presented a Certification from the
DENR-CENRO, Cagayan de Oro City, dated 14 August 2000, to prove the alienability and
disposability of the subject property. The said Certification stated that the subject
property became alienable and disposable on 31 December 1925. A certification from
the DENR that a lot is alienable and disposable is sufficient to establish the true nature
and character of the property and enjoys a presumption of regularity in the absence of
contradictory evidence. Considering that no evidence was presented to disprove the
contents of the aforesaid DENR-CENRO Certification, this Court is duty-bound to uphold
the same.
Same; Same; Same; As the law now stands, a mere showing of possession for thirty years or
more is not sufficient. It must be shown, too, that possession and occupation had started on
12 June 1945 or earlier.—As the law now stands, a mere showing of possession for
thirty years or more is not sufficient. It must be shown, too, that possession and
occupation had started on 12 June 1945 or earlier. It is worth mentioning that in this
case, even the spouses Tan do not dispute that the true reckoning period for judicial
confirmation of an imperfect or incomplete title is on or before 1291June 1945. They
also admit that based on the previous evidence on record, their possession and
occupation of the subject property fall short of the period prescribed by law. The earliest
evidence of possession and occupation of the subject property can be traced back to a
tax declaration issued in the name of their predecessors-in-interest only in 1952.
Pleadings and Practice; Evidence; Formal Offer of Evidence; Evidence should be
presented during trial before the Regional Trial Court (RTC), and evidence not formally
offered should not be considered.—Section 34, Rule 132 of the Rules of Court explicitly
provides: SEC. 34. Offer of evidence.—The court shall consider no evidence which has
not been formally offered. The purpose for which the evidence is offered must be
specified. On the basis thereof, it is clear that evidence should have been presented
during trial before the RTC; evidence not formally offered should not be considered. In
this case, it bears stressing that Tax Declaration No. 4627 was only submitted by the
Spouses Tan together with their Motion for Reconsideration of the 28 February 2006
Decision of the Court of Appeals. The reason given by the Spouses Tan why they
belatedly procured such evidence was because at the time of trial the only evidence
available at hand was the 1952 tax declaration. More so, they also believed in good faith
that they had met the 30-year period required by law. They failed to realize that under
Section 48(b) of Commonwealth Act No. 141, as amended, a mere showing of possession
Page 26 of 78
for thirty years or more is not sufficient because what the law requires is possession and
occupation on or before 12 June 1945. This Court, however, finds the reason given by
the Spouses Tan unsatisfactory. The Spouses Tan filed their application for registration
of title to the subject property under the provisions of Section 48(b) of Commonwealth
Act No. 141, as amended. It is incumbent upon them as applicants to carefully know the
requirements of the said law. 
DECISION
CHICO-NAZARIO, J.:
This case is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules
of Civil Procedure seeking to reverse and set aside the Decision 1 dated 28 February 2006
and Resolution2 dated 12 April 2007 of the Court of Appeals in CA-G.R. CV No. 71534. In
its assailed Decision, the appellate court reversed and set aside the Decision 3 dated 9
May 2001 of the Regional Trial Court (RTC) of Misamis Oriental, 10 th Judicial Region,
Branch 39, Cagayan de Oro City, in LRC Case No. N-2000-055, and ordered herein
petitioners, spouses Pedro and Nena Tan (spouses Tan), to return the parcel of land
known as Lot 1794, Ap-10-002707, Pls-923, with an area of 215,698 square meters,
located in Calingagan, Villanueva, Misamis Oriental (subject property) to herein
respondent, Republic of the Philippines (Republic). In its assailed Resolution, the
appellate court denied the spouses Tan’s Motion for Reconsideration.
The factual milieu of this case is as follows:
The spouses Tan were natural-born Filipino citizens, who became Australian citizens on
9 February 1984.4 They seek to have the subject property registered in their names.
The subject property was declared alienable and disposable on 31 December 1925, as
established by a Certification5 dated 14 August 2000 issued by the Department of
Environment and Natural Resources (DENR), Community Environment and Natural
Resources Office (CENRO), Cagayan de Oro City.
Prior to the spouses Tan, the subject property was in the possession of Lucio and Juanito
Neri and their respective spouses. Lucio and Juanito Neri had declared the subject
property for taxation purposes in their names under Tax Declarations No. 8035
(1952),6 No. 15247 and No. 1523 (1955).8
The spouses Tan acquired the subject property from Lucio and Juanito Neri and their
spouses by virtue of a duly notarized Deed of Sale of Unregistered Real Estate
Property9 dated 26 June 1970. The spouses Tan took immediate possession of the

subject property on which they planted rubber, gemelina, and other fruit-bearing trees.
They declared the subject property for taxation purposes in their names, as evidenced
by Tax Declarations No. 501210 (1971); No. 11155,11 No. 10599,12 No. 1059813 (1974);
No. 1170414 (1976); No. 0122415 (1980); No. 0631616 (1983); and No. 94300017 (2000);
and paid realty taxes thereon.
However, a certain Patermateo Casiñ o (Casiñ o) claimed a portion of the subject
property, prompting the spouses Tan to file a Complaint for Quieting of Title against him
before the RTC of Cagayan de Oro City, Branch 24, where it was docketed as Civil Case
No. 88-204. On 29 August 1989, the RTC rendered a Decision18 in Civil Case No. 88-204
favoring the spouses Tan and declaring their title to the subject property thus "quieted."
Casiñ o appealed the said RTC Decision to the Court of Appeals where it was docketed as
CA-G.R. CV No. 26225. In a Resolution19 dated 15 November 1990, the appellate court
dismissed CA-G.R. CV No. 26225 for lack of interest to prosecute. Casiñ o elevated his
case to this Court via a Petition for Review on Certiorari, docketed as UDK-10332. In a
Resolution20 dated 13 March 1991 in UDK-10332, the Court denied Casiñ o’s Petition for
being insufficient in form and substance. The said Resolution became final and
executory on 3 June 1991.21
Refusing to give up, Casiñ o filed an Application for Free Patent on the subject property
before the Bureau of Lands.22 On 8 December 1999, Casiñ o’s application was ordered
cancelled23 by Officer Ruth G. Sabijon of DENR-CENRO, Cagayan de Oro City, upon the
request of herein petitioner Pedro Tan, the declared owner of the subject property
pursuant to the 29 August 1989 Decision of the RTC in Civil Case No. 88-204. Similarly,
survey plan Csd-10-002779 prepared in the name of Casiñ o was also ordered
cancelled24 by the Office of the Regional Executive Director, DENR, Region X, Macabalan,
Cagayan de Oro City.
25
In 2000, the spouses Tan filed their Application for Registration of Title  to the subject
property before the RTC of Cagayan de Oro City, Branch 39, where it was docketed as
LRC Case No. N-2000-055. The application of the spouses Tan invoked the provisions of
Act No. 49626 and/or Section 48 of Commonwealth Act No. 141,27 as amended. In
compliance with the request28 of the Land Registration Authority (LRA) dated 29 August
2000, the spouses Tan filed on 5 October 2000 an Amended Application for Registration
of Title29 to the subject property.
The Office of the Solicitor General (OSG) entered its appearance in LRC Case No. N-2000-
055 on behalf of the Republic, but failed to submit a written opposition to the
application of the spouses Tan.
When no opposition to the application of the spouses Tan was filed by the time of the
initial hearing of LRC Case No. N-2000-055, the RTC issued on 23 April 2001 an order of
Page 27 of 78
general default, except as against the Republic. Thereafter, the spouses Tan were
allowed to present their evidence ex-parte.
After the establishment of the jurisdictional facts, the RTC heard the testimony of John B.
Acero (Acero), nephew and lone witness of the spouses Tan. Acero recounted the facts
already presented above and affirmed that the spouses Tan’s possession of the subject
property had been open, public, adverse and continuous. 30
After Acero’s testimony, the spouses Tan already made a formal offer of evidence, which
was admitted by the court a quo.31
On 9 May 2001, the RTC rendered a Decision in LRC Case No. N-2000-055 granting the
application of the spouses Tan, the dispositive portion of which reads:
WHEREFORE, [Spouses Tan] having conclusively established to the satisfaction
of this Court their ownership of the [subject property], Lot 1794, Pls-923,
situated in Villanueva, Misamis Oriental, should be as it is hereby adjudicated to
the [Spouses Tan] with address at #166 Capistrano Street, Cagayan de Oro City.
Once this judgment becomes final, let the Order for the issuance of decree and
corresponding Certificate of Title issue in accordance with Presidential Decree
No. 1529, as amended.32
In its appeal of the afore-mentioned RTC Decision to the Court of Appeals, docketed as
CA-G.R. CV No. 71534, the Republic made the following assignment of errors:
I. The trial court erred in ruling that [herein petitioners Spouses Tan] and their
predecessors-in-interest have been in open, continuous and notorious
possession of subject property for the period required by law.
II. The trial court erred in granting the application for land registration despite
the fact that there is a disparity between the area as stated in [the Spouses
Tan’s] application and the tax declarations of Juanito Neri, Lucio Neri, and
[herein petitioner Pedro Tan].
III. The trial court erred in granting the application for land registration despite
the fact that [the Spouses Tan] failed to present the original tracing cloth plan.
IV. The trial court erred in relying on the Decision dated [29 August 1989] by
the RTC-Branch 24, Cagayan de Oro City which declared [the Spouses Tan’s]
"title" on the subject [property] "quieted."

V. The trial court erred in not finding that [the Spouses Tan] failed to overcome
the presumption that all lands form part of the public domain. 33
On 28 February 2006, the Court of Appeals rendered a Decision in CA-G.R. CV No. 71534
granting the appeal of the Republic, and reversing and setting aside the 9 May 2001
Decision of the RTC on the ground that the spouses Tan failed to comply with Section
48(b) of Commonwealth Act No. 141, otherwise known as the Public Land Act, as
amended by Presidential Decree No. 1073, which requires possession of the subject
property to start on or prior to 12 June 1945. 34 Hence, the appellate court ordered the
spouses Tan to return the subject property to the Republic.
The spouses Tan filed a Motion for Reconsideration of the foregoing Decision of the
Court of Appeals. To refute the finding of the appellate court that they and their
predecessors-in-interest did not possess the subject property by 12 June 1945 or earlier,
the spouses Tan attached to their Motion a copy of Tax Declaration No. 4627 covering
the subject property issued in 1948 in the name of their predecessor-in-interest, Lucio
Neri. They called attention to the statement in Tax Declaration No. 4627 that it
cancelled Tax Declaration No. 2948. Unfortunately, no copy of Tax Declaration No.
2948 was available even in the Office of the Archive of the Province of Misamis Oriental.
The spouses Tan asserted that judicial notice may be taken of the fact that land
assessment is revised by the government every four years; and since Tax Declaration No.
4627 was issued in the year 1948, it can be presupposed that Tax Declaration No. 2948
was issued in the year 1944.
The Court of Appeals denied the Motion for Reconsideration of the spouses Tan in a
Resolution dated 12 April 2007.
The spouses Tan now come before this Court raising the sole issue of whether or not [the
Spouses Tan] have been in open, continuous, exclusive and notorious possession and
occupation of the subject [property], under a bona fide claim of acquisition or ownership,
since [12 June 1945], or earlier, immediately preceding the filing of the application for
confirmation of title.35
The Court rules in the negative and, thus, finds the present Petition devoid of merit.
To recall, the spouses Tan filed before the RTC their Application for Registration of Title
to the subject property in the year 2000 generally invoking the provisions of Act No. 496
and/or Section 48 of Commonwealth Act No. 141, as amended.
Page 28 of 78
The Public Land Act,36 as amended by Presidential Decree No. 1073, 37 governs lands of
the public domain, except timber and mineral lands, friar lands, and privately owned
lands which reverted to the State.38 It explicitly enumerates the means by which public
lands may be disposed of, to wit:
(1) For homestead settlement;
(2) By sale;
(3) By lease; and
(4) By confirmation of imperfect or incomplete titles;
(a) By judicial legalization.
(b) By administrative legalization (free patent).39
Each mode of disposition is appropriately covered by separate chapters of the Public
Land Act because there are specific requirements and application procedure for every
mode.40 Since the spouses Tan filed their application before the RTC, then it can be
reasonably inferred that they are seeking the judicial confirmation or legalization of
their imperfect or incomplete title over the subject property.
Judicial confirmation or legalization of imperfect or incomplete title to land, not
exceeding 144 hectares, may be availed of by persons identified under Section 48 of the
Public Land Act, as amended by Presidential Decree No. 1073, 41 which reads –
Section 48. The following-described citizens of the Philippines, occupying lands
of the public domain or claiming to own any such lands or an interest therein,
but whose titles have not been perfected or completed, may apply to the Court
of First Instance of the province where the land is located for confirmation of
their claims and the issuance of a certificate of title thereafter, under the Land
Registration Act, to wit:
(a) [Repealed by Presidential Decree No. 1073].
(b) Those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership, since
June 12, 1945, or earlier, immediately preceding the filing of the

application for confirmation of title, except when prevented by war
or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall
be entitled to a certificate of title under the provisions of this chapter.
(c) Members of the national cultural minorities who by themselves or
through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of lands of the
public domain suitable to agriculture whether disposable or not, under
a bona fide claim of ownership since June 12, 1945 shall be entitled to
the rights granted in subsection (b) hereof. (Emphasis supplied.)
Not being members of any national cultural minorities, spouses Tan may only be entitled
to judicial confirmation or legalization of their imperfect or incomplete title under
Section 48(b) of the Public Land Act, as amended.
The Court notes that Presidential Decree No. 1073, amending the Public Land Act,
clarified Section 48, paragraph "b" thereof, by specifically declaring that it applied only
to alienable and disposable lands of the public domain. Thus, based on the said provision
of Commonwealth Act No. 141, as amended, the two requisites which the applicants
must comply with for the grant of their Application for Registration of Title are: (1) the
land applied for is alienable and disposable; and (2) the applicants and their
predecessors-in-interest have occupied and possessed the land openly, continuously,
exclusively, and adversely since 12 June 1945. 42
To prove that the land subject of an application for registration is alienable, an applicant
must conclusively establish the existence of a positive act of the government such as a
presidential proclamation or an executive order or administrative action, investigation
reports of the Bureau of Lands investigator or a legislative act or statute. Until then, the
rules on confirmation of imperfect title do not apply.43
In the case at bar, the spouses Tan presented a Certification from the DENR-CENRO,
Cagayan de Oro City, dated 14 August 2000, to prove the alienability and disposability of
the subject property. The said Certification stated that the subject property became
alienable and disposable on 31 December 1925. A certification from the DENR that a
lot is alienable and disposable is sufficient to establish the true nature and character of
the property and enjoys a presumption of regularity in the absence of contradictory
evidence.44 Considering that no evidence was presented to disprove the contents of the
aforesaid DENR-CENRO Certification, this Court is duty-bound to uphold the same.
Nonetheless, even when the spouses Tan were able to sufficiently prove that the subject
property is part of the alienable and disposable lands of the public domain as early as 31
Page 29 of 78
December 1925, they still failed to satisfactorily establish compliance with the second
requisite for judicial confirmation of imperfect or incomplete title, i.e., open, continuous,
exclusive and notorious possession and occupation of the subject property since 12 June
1945 or earlier.
Through the years, Section 48(b) of the Public Land Act has been amended several
times. Republic v. Doldol45 provides a summary of these amendments:
The original Section 48(b) of C.A. No. 141 provided for possession and
occupation of lands of the public domain since July 26, 1894. This was
superseded by R.A. No. 1942, which provided for a simple thirty-year
prescriptive period of occupation by an applicant for judicial confirmation of
imperfect title. The same, however, has already been amended by Presidential
Decree 1073, approved on January 25, 1977. As amended, Section 48(b) now
reads:
(b) Those who by themselves or through their predecessors-in- interest
have been in open, continuous, exclusive, and notorious possession and
occupation of agricultural lands of the public domain, under a bona fide
claim of acquisition or ownership, since June 12, 1945 or earlier,
immediately preceding the filing of the application for confirmation of
title except when prevented by wars or force majeure. Those shall be
conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under
the provisions of this chapter.
Section 48(b) of the Public Land Act, as amended by PD No. 1073, presently
requires, for judicial confirmation of an imperfect or incomplete title, the
possession and occupation of the piece of land by the applicants, by themselves
or through their predecessors-in-interest, since 12 June 1945 or earlier. This
provision is in total conformity with Section 14(1) of the Property Registration
Decree heretofore cited. (Emphasis ours.)
As the law now stands, a mere showing of possession for thirty years or more is
not sufficient. It must be shown, too, that possession and occupation had started
on 12 June 1945 or earlier.46
It is worth mentioning that in this case, even the spouses Tan do not dispute that the
true reckoning period for judicial confirmation of an imperfect or incomplete title is on
or before 12 June 1945. They also admit that based on the previous evidence on record,
their possession and occupation of the subject property fall short of the period
prescribed by law. The earliest evidence of possession and occupation of the subject

property can be traced back to a tax declaration issued in the name of their
predecessors-in-interest only in 1952. However, the spouses Tan are now asking the
kind indulgence of this Court to take into account Tax Declaration No. 4627 issued in
1948, which they had attached to their Motion for Reconsideration before the Court of
Appeals but which the appellate court refused to consider. Just as they had argued
before the Court of Appeals, the spouses Tan point out that Tax Declaration No. 4627
was not newly issued but cancelled Tax Declaration No. 2948; and should the Court take
judicial notice of the fact that tax assessments are revised every four years, then Tax
Declaration No. 2948 covering the subject property was issued as early as 1944.
Section 34, Rule 132 of the Rules of Court explicitly provides:
SEC. 34. Offer of evidence. – The court shall consider no evidence which has not
been formally offered. The purpose for which the evidence is offered must be
specified.
On the basis thereof, it is clear that evidence should have been presented during trial
before the RTC; evidence not formally offered should not be considered. In this case, it
bears stressing that Tax Declaration No. 4627 was only submitted by the Spouses Tan
together with their Motion for Reconsideration of the 28 February 2006 Decision of the
Court of Appeals. The reason given by the Spouses Tan why they belatedly procured
such evidence was because at the time of trial the only evidence available at hand was
the 1952 tax declaration. More so, they also believed in good faith that they had met the
30-year period required by law. They failed to realize that under Section 48(b) of
Commonwealth Act No. 141, as amended, a mere showing of possession for thirty years
or more is not sufficient because what the law requires is possession and occupation on
or before 12 June 1945. This Court, however, finds the reason given by the spouses Tan
unsatisfactory. The spouses Tan filed their application for registration of title to the
subject property under the provisions of Section 48(b) of Commonwealth Act No. 141, as
amended. It is incumbent upon them as applicants to carefully know the requirements of
the said law.
Thus, following the rule enunciated in Section 34, Rule 132 of the Rules of Court, this
Court cannot take into consideration Tax Declaration No. 4627 as it was only submitted
by the Spouses Tan when they filed their Motion for Reconsideration of the 28 February
2006 Decision of the appellate court.
And even if this Court, in the interest of substantial justice, fairness and equity, admits
and take into consideration Tax Declaration No. 4627, issued in 1948, it would still be
insufficient to establish open, continuous, exclusive and notorious possession and
occupation of the subject property by the Spouses Tan and their predecessors-in-
interest since 12 June 1945 or earlier.
Page 30 of 78
Tax Declaration No. 4627 was only issued in 1948, three years after 12 June 1945, the
cut-off date under the law for acquiring imperfect or incomplete title to public land. For
the Court to conclude from the face of Tax Declaration No. 4627 alone that the subject
property had been declared for tax purposes before 12 June 1945 would already be too
much of a stretch and would require it to rely on mere presuppositions and conjectures.
The Court cannot simply take judicial notice that the government revises tax
assessments every four years. Section 129 of the Revised Rules of Evidence provides
particular rules on which matters are subject to judicial notice and when it is
mandatory47 or discretionary48 upon the courts or when a hearing is necessary.49 It is
unclear under which context this Court must take judicial notice of the supposed four-
year revision of tax assessments on real properties. Moreover, the power to impose
realty taxes, pursuant to which the assessment of real property is made, has long been
devolved to the local government units (LGU) having jurisdiction over the said property.
Hence, the rules pertaining to the same may vary from one LGU to another; and regular
revision of the tax assessments of real property every four years may not be true for all
LGUs, as the spouses Tan would have this Court believe. Given the foregoing, Tax
Declaration No. 4627 is far from the clear, positive, and convincing evidence
required50 to establish open, continuous, exclusive and notorious possession and
occupation of the subject property by the Spouses Tan and their predecessors-in-
interest since 12 June 1945 or earlier.
In addition, tax declarations and receipts are not conclusive evidence of ownership. At
most, they constitute mere prima facie proofs of ownership of the property for which
taxes have been paid. In the absence of actual, public and adverse possession, the
declaration of the land for tax purposes does not prove ownership.51 They may be
good supporting or collaborating evidence together with other acts of possession and
ownership; but by themselves, tax declarations are inadequate to establish possession of
the property in the nature and for the period required by statute for acquiring imperfect
or incomplete title to the land.
As a final observation, the spouses Tan purchased the subject property and came into
possession of the same only in 1970. To justify their application for registration of title,
they had to tack their possession of the subject property to that of their predecessors-in-
interest. While the spouses Tan undoubtedly possessed and occupied the subject
property openly, continuously, exclusively and notoriously, by immediately introducing
improvements on the said property, in addition to declaring the same and paying realty
tax thereon; in contrast, there was a dearth of evidence that their predecessors-in-
interest possessed and occupied the subject property in the same manner. The
possession and occupation of the subject property by the predecessors-in-interest of the
spouses Tan were evidenced only by the tax declarations in the names of the former, the
earliest of which, Tax Declaration No. 4627, having been issued only in 1948. No other
evidence was presented by the spouses Tan to show specific acts of ownership exercised

by their predecessors-in-interest over the subject property which may date back to 12
June 1945 or earlier.
For failure of the Spouses Tan to satisfy the requirements prescribed by Section 48(b) of
the Public Land Act, as amended, this Court has no other option but to deny their
application for judicial confirmation and registration of their title to the subject
property. Much as this Court wants to conform to the State’s policy of encouraging and
promoting the distribution of alienable public lands to spur economic growth and
remain true to the ideal of social justice, our hands are tied by the law’s stringent
safeguards against registering imperfect titles.52
The Court emphasizes, however, that our ruling herein is without prejudice to the
spouses Tan availing themselves of the other modes for acquiring title to alienable and
disposable lands of the public domain for which they may be qualified under the law.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 155619               August 14, 2007
LEODEGARIO BAYANI, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
Criminal Law; Bouncing Checks Law; Jurisdictions; Jurisdiction of the Court over cases
elevated from the Court of Appeals is limited to reviewing or revising errors of law
ascribed to the Court of Appeals, 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.—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.
Page 31 of 78
WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision
dated 28 February 2006 and Resolution dated 12 April 2007 of the Court of Appeals in
CA-G.R. CV No. 71534 are hereby AFFIRMED. No costs.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
Same; Same; Evidence; Hearsay Evidence; Under Section 36 of Rule 130 of the Rules
of Court, 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.—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 ex-cluded.—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.
Same; Same; Same; In failing to object to the testimony on the ground that it was
hearsay, the evidence offered may be admitted.—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.”

Since no objection to the admissibility of Evangelista’s testimony was timely made—
from the time her testimony was offered and up to the time her direct examination was
conducted—then petitioner has effectively waived any objection to the admissibility
thereof and his belated attempts to have her testimony excluded for being hearsay has
no ground to stand on.
Same; Same; Same; Although hearsay evidence may be admitted because of lack of
objection by the adverse party’s counsel, it is nonetheless without probative value, unless
the proponent can show that the evidence falls within the exception to the hearsay
evidence rule.—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. 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, unless the proponent
can show that the evidence falls within the exception to the hearsay evidence rule.
Same; Same; Elements of the Offense Penalized by Batas Pam-bansa Blg. 22; Upon
the issuance of the checks and in the absence of evidence to the contrary, it is presumed
that the same was issued for valuable consideration.—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. 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. Under the Negotiable Instruments Law, it is presumed that every party to
an instrument acquired the same for a consideration or for value. 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.
Same; Same; 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.—
What the law punishes is the mere act of issuing a bouncing check, not the purpose for
Page 32 of 78
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.
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.
Page 33 of 78
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.
Page 34 of 78
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 conducted 14 – 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. 19 When
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
Page 35 of 78
(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.
 Page 36 of 78

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

SECOND DIVISION
Brand Tax Rate
G.R. No. 192024 July 1, 2015

FORTUNE TOBACCO CORPORATION, Petitioner, Champion M 100 P 1.00

vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Camel F King P 1.00
DECISION

MENDOZA, J.: Camel Lights Box 20's P 1.00

This is a petition for review on certiorari  under Rule 45 of the Rules of Court filed by
Camel Filters Box 20's P 1.00
Fortune Tobacco Corporation (petitioner), assailing the March 12, 2010 Decision1 of the
Court of Tax Appeals En Banc (CTA En Banc)  and its April 26, 2010 Resolution2 in CTA
EB Case No. 533, which affirmed in toto the April 30, 2009 Decision3 and the August 18,
Winston F King P 5.00
2009 Resolution4 of the Former First Division of the Court of Tax Appeals (CTA
Division) in CTA Case No. 7367.
Winston Lights P 5.00
The facts of this case are akin to those obtaining in G.R. Nos. 167274-275 and G.R. No.
180006. In G.R. No. 167274-275, the Court eventually sustained petitioner’s claim for
refund of overpaid excise taxes for the period covering January 1, 2002 to December 31, Immediately prior to January 1, 1997, the above-mentioned cigarette brands were
2002. In G.R. No. 180006, the Court likewise sustained petitioner’s claim for refund of subject to ad valorem tax pursuant to then Section 142 of the Tax Code of 1977, as
overpaid excise tax paid during in 2003 and the period covering January 1 to May 31, amended. However, on January 1, 1997, R.A. No. 8240 took effect causing a shift from the
2004. ad valorem tax (AVT) system to the specific tax system. As a result of such shift, the
aforesaid cigarette brands were subjected to specific tax under Section 142 thereof, now
The subject claim for refund involves the amount of excise taxes allegedly overpaid renumbered as Section 145 of the Tax Code of 1997. Section 145 is quoted thus:
during the period beginning June 1, 2004 up to December 31, 2004. For a better
understanding of the controversy, a recapitulation of the factual and procedural 'Section 145. Cigars and Cigarettes- (A) Cigars. – There shall be levied, assessed and
antecedents is in order. Thus, as stated in the following portions of the CTA En collected on cigars a tax of One peso (P 1.00) per cigar.
Banc decision:
(B) Cigarettes Packed by Hand. -There shall be levied, assessed and collected on
Petitioner is the manufacturer/producer of, among others, the following cigarette cigarettes packed by hand a tax of Forty centavos (P0.40) per pack.
brands, with tax rate classification based on net retail price prescribed by Annex "D" to
Republic Act (R.A.) No. 4280, to wit: (C) Cigarettes Packed by Machine. - There shall be levied, assessed and collected on
cigarettes packed by machine a tax at the rates prescribed below:

[1] If the net retail price (excluding the excise tax and the value-added tax) is
above Ten pesos (P 10.00) per pack, the tax shall be Twelve (P12.00) per pack:
[2] If the net retail price (excluding the excise tax and the value added tax)
exceeds Six pesos and Fifty centavos (P6.50) but does not exceed Ten pesos
(P10.00) per pack, the tax shall be Eight Pesos (P8.00) per pack.
[3] If the net retail price (excluding the excise tax and the value-added tax) is
Five pesos (P5.00) but does not exceed Six Pesos and fifty centavos (P6.50) per
pack, the tax shall be Five pesos (P5.00) per pack;
[4] If the net retail price (excluding the excise tax and the value-added tax] is
below Five pesos (P5.00) per pack, the tax shall be One peso (P1.00) per pack;
Variants of existing brands of cigarettes which are introduced in the domestic market
after the effectivity of R.A. No. 8240 shall be taxed under the highest classification of any
variant of that brand.
The excise tax from any brand of cigarettes within the next three (3) years from the
effectivity of R.A. No. 8240 shall not be lower than the tax, which is due from each brand
on October 1, 1996. Provided, however, that in cases where the excise tax rate imposed in
paragraphs (1), (2), (3) and (4) hereinabove will result in an increase in excise tax of
more than seventy percent (70%), for a brand of cigarette, the increase shall take effect
in two tranches: fifty percent (50%) of the increase shall be effective in 1997 and one
hundred percent (100%) of the increase shall be effective in 1998.
Duly registered or existing brands of cigarettes or new brands thereof packed by
machine shall only be packed in twenties.
The rates of excise tax on cigars and cigarettes under paragraphs (1), (2), (3) and (4)
hereof, shall be increased by twelve percent (12%) on January 1, 2000.
New brands shall be classified according to their current net retail price.
For the above purpose, 'net retail price' shall mean the price at which the cigarette is
sold on retail in twenty (20) major supermarkets in Metro Manila (for brands of
cigarettes marketed nationally), excluding the amount intended to cover the applicable
excise tax and value-added tax. For brands which are marketed only outside Metro
Manila, the 'net retail price' shall mean the price at which the cigarette is sold in five (5)
major supermarkets in the region excluding the amount intended to cover the applicable
excise tax and the value-added tax.
Page 37 of 78
The classification of each brand of cigarettes based on its average net retail price as of
October 1, 1996, as set forth in Annex "D," shall remain in force until revised by
Congress.
'Variant of a brand' shall refer to a brand on which a modifier is prefixed and/or suffixed
to the root name of the brand and/or a different brand which carries the same logo or
design of the existing brand.
To implement the provisions for a twelve percent (12%) increase of excise tax on cigars
and cigarettes packed by machines by January 1, 2000, the Secretary of Finance, upon
recommendation of the respondent Commissioner of Internal Revenue, issued Revenue
Regulations No. 17-99, dated December 16, 1999, xxx RR No. 17-99 likewise provides in
the last paragraph of Section 1 thereof, "that the new specific tax rate for any existing
brand of cigars, cigarettes packed by machine, distilled spirits, wines and fermented
liquor shall not be lower than the excise tax that is actually being paid prior to January 1,
2000."
On 31 March 2005, petitioner filed a claim for tax credit or refund under Section 229 of
the National Internal Revenue Code of 1997 (1997 NIRC) for erroneously or illegally
collected specific taxes covering the period June to December 31, 2004 in the total
amount of Php219,566,450.00.
On November 14, 2005, petitioner filed a Petition for Review which was raffled to the
Former First Division of this Court. Respondent in his Answer raised among others, as a
Special and Affirmative Defense, that the amount of TWO HUNDRED NINETEEN
MILLION FIVE HUNDRED SIXTY SIX THOUSAND FOUR HUNDRED FIFTY PESOS
(Php219,566,450.00) being claimed by petitioner as alleged overpaid excise tax for the
period covering 1 June to 31 December 2004, is not properly documented.
After trial on the merits, the Former First Division of this Court rendered the assailed
Decision, dated April 30, 2009, which consistently ruled that RR 17-99 is contrary to law
and that there is insufficiency of evidence on the claim for refund.
Petitioner filed its motion for reconsideration therefrom, and which was denied by the
Former First Division on August 18, 2009. Petitioner elevated its claim to the CTA En
Banc, but was rebuffed after the tax tribunal found no cause to reverse the findings and
conclusions of the CTA Division.
Hence, this petition.

Essentially, petitioner claims that it paid a total amount of P219,566,450.00 in overpaid
excise taxes. For petitioner, considering that the CTA found Revenue Regulation No. 17-
99 (RR 17-99) to be contrary to law, there should be no obstacle to the refund of the
total amount excess excise taxes it had paid.5
In a nutshell, the sole issue for the resolution of the Court is: whether or not there is
sufficient evidence to warrant the grant of petitioner’s claim for tax refund.
The petition lacks merit.
The question of sufficiency of
petitioner’s evidence to support
its claim for tax refund is a
question of fact
Unlike in the proceeding had in G.R. Nos. 167274-275 and G.R. No. 180006, the denial of
petitioner’s claim for tax refund in this case is based on the ground that petitioner failed
to provide sufficient evidence to prove its claim and the amount thereof. As a result,
petitioner seeks that the Court re-examine the probative value of its evidence and
determine whether it should be refunded the amount of excise taxes it allegedly
overpaid.
This cannot be done.
The settled rule is that only questions of law may be raised in a petition under Rule 45 of
the Rules of Court. It is not this Court’s function to analyze or weigh all over again the
evidence already considered in the proceedings below, the Court’s jurisdiction being
limited to reviewing only errors of law that may have been committed by the lower
court. The resolution of factual issues is the function of the lower courts, whose findings
on these matters are received with respect. A question of law which the Court may pass
upon must not involve an examination of the probative value of the evidence presented
by the litigants.6 This is in accordance with Section 1, Rule 45 of the Rules of Court, as
amended, which reads:
Section 1. Filing of petition with Supreme Court. – A party desiring to appeal
by certiorari from a judgment, final order or resolution of the Court of Appeals, the
Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts,
whenever authorized by law, may file with the Supreme Court a verified petition for
review on certiorari. The petition may include an application for a writ of preliminary
injunction or other provisional remedies and shall raise only questions of law, which
must be distinctly set forth. The petitioner may seek the same provisional remedies by
verified motion filed in the same action or proceeding at any time during its pendency.
Page 38 of 78
[Emphasis and Underlining Supplied]
In fact, the rule finds greater significance with respect to the findings of specialized
courts such as the CTA, the conclusions of which are not lightly set aside because of the
very nature of its functions which is dedicated exclusively to the resolution of tax
problems and has accordingly developed an expertise on the subject, unless there has
been an abuse or improvident exercise of authority.7
Moreover, it has been said that the proper interpretation of the provisions on tax refund
that does not call for an examination of the probative value of the evidence presented by
the parties-litigants is a question of law.8 Conversely, it may be said that if the appeal
essentially calls for the re-examination of the probative value of the evidence presented
by the appellant, the same raises a question of fact. Often repeated is the distinction that
there is a question of law in a given case when doubt or difference arises as to what the
law is on a certain state of facts; there is a question of fact when doubt or difference
arises as to the truth or falsehood of alleged facts.9
Verily, the sufficiency of a claimant’s evidence and the determination of the amount of
refund, as called for in this case, are questions of fact,10 which are for the judicious
determination by the CTA of the evidence on record.
Significantly, it bears noting that Section 5, Rule 45 of the Rules of Court provides that
the failure of petitioner to comply with the requirements on the contents of the petition
shall be sufficient ground for its dismissal. While jurisprudence provides exceptions to
these rules, the subject petition does not fall under any of those so excepted. Thus, for
this reason alone, the petition must fail.
The CTA committed no
reversible error in denying
petitioner’s claim for tax refund
for insufficient evidence.
A. Petitioner relied heavily on photocopied documents to prove its claim.
Granting that the Court could take a second look and review petitioner’s evidence, the
result would be the same.
The claim for refund hinges on the admissibility and the probative value of the following
photocopied documents that allegedly contain a recording of petitioner’s excise
payments for the period covering June 1, 2004 up to December 31, 2004:

(1) Production, Removals and Payments for All FTC Brands; 11 and
(2) Excise Tax Refund Computation Summary.12
Although both the CTA Division and the CTA En Banc provisionally admitted petitioner’s
Exhibit "C,"13 the above-mentioned documents, as well as the other documentary
evidence submitted by petitioner were refused admission for being merely
photocopies.14
Section 3 of Administrative Matter (A.M.) No. 05-11-07 CTA, the Revised Rules of the
Court of Tax Appeals, provides that the Rules of Court shall apply suppletorily in the
proceeding before the tax tribunal.
In this connection, Section 3 of Rule 130 of the Rules of Court lays down the Best
Evidence Rule with respect to the presentation of documentary evidence. Thus:
Section 3. Original document must be produced; exceptions. — When the subject of
inquiry is the contents of a document, no evidence shall be admissible other than the
original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced in
court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party against
whom the evidence is offered, and the latter fails to produce it after reasonable
notice;
(c) When the original consists of numerous accounts or other documents which
cannot be examined in court without great loss of time and the fact sought to be
established from them is only the general result of the whole; and
(d) When the original is a public record in the custody of a public officer or is
recorded in a public office. (2a)
In this case, petitioner did not even attempt to provide a plausible reason as to why the
original copies of the documents presented could not be produced before the CTA or any
reason that the application of any of the foregoing exceptions could be justified.
Although petitioner presented one (1) witness to prove its claim, it appears that this
witness was not even a signatory to any of the disputed documentary evidence.
Page 39 of 78
As correctly pointed out by the CTA Division, petitioner knew all along that it had
committed the foregoing procedural lapses when it filed its Formal Offer of Evidence.
Although petitioner orally manifested that it was going to seek reconsideration of the
CTA Division order excluding its evidence, in the end, petitioner did not even bother to
file any such motion for reconsideration at all.
B. Petitioner failed to offer any proof or tender of excluded evidence.
At any rate, even if the Court should find fault in the ruling of the CTA Division in
denying the admission of petitioner’s evidence, the result would be the same because
petitioner failed to offer any proof or tender of excluded evidence. As aptly discussed by
the CTA En Banc:
Petitioner posits that if their exhibits, specifically Exhibits "G", "G-1" to "G-7" and Exhibit
"H", are admitted together with the testimony of their witness, the same would
sufficiently prove their claim. A closer scrutiny of the records shows that petitioner did
not file any offer of proof or tender of excluded evidence.
Section 40, Rule 132 of the Rules of Court 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.
The rule is that evidence formally offered by a party may be admitted or excluded by the
court. If a party's offered documentary or object evidence is excluded, he may move or
request that it be attached to form part of the records of the case. If the excluded
evidence is oral, he may state for the record the name and other personal circumstances
of the witness and the substance of the proposed testimony. These procedures are
known as offer of proof or tender of excluded evidence and are made for purposes of
appeal. If an adverse judgment is eventually rendered against the offeror, he may in his
appeal assign as error the rejection of the excluded evidence.
It is of record that the denial of the excluded evidence was never assigned as an error in
this appeal. Thus, this Court cannot pass upon nor consider the propriety of their denial.
Moreover, this Court cannot and should not consider the documentary and oral evidence
presented which are not considered to be part of the records in the first place. Thus,
Exhibits "G", "G- 1" to "G-7" and Exhibit "H", together with the testimony of petitioner's
witness thereon, cannot be admitted and be given probative value. 15

It has been repeatedly ruled that where documentary evidence was rejected by the
lower court and the offeror did not move that the same be attached to the record, the
same cannot be considered by the appellate court,16 as documents forming no part of
proofs before the appellate court cannot be considered in disposing the case. 17 For the
appellate court to consider as evidence, which was not offered by one party at all during
the proceedings below, would infringe the constitutional right of the adverse party – in
this case, the CIR, to due process of law.
It also bears pointing out that at no point during the proceedings before the CTA En
Banc and before this Court has petitioner offered any plausible explanation as to why it
failed to properly make an offer of proof or tender of excluded evidence. Instead,
petitioner harps on the fact that respondent CIR simply refused its claim for refund on
the ground that RR 17-99 was a valid issuance. Thus, for its failure to seasonably avail of
the proper remedy provided under Section 40, Rule 132 of the Rules of Court, petitioner
is precluded from doing so at this late stage of the case. Clearly, estoppel has already
stepped in.
Although it may be suggested that the CTA should have been more liberal in the
application of technical rules of evidence, it should be stressed that a liberal application,
or suspension of the application of procedural rules, must remain as the exception to the
well-settled principle that rules must be complied with for the orderly administration of
justice. As pointed out in Marohomsalic v. Cole,18
While procedural rules may be relaxed in the interest of justice, it is well-settled that
these are tools designed to facilitate the adjudication of cases. The relaxation of
procedural rules in the interest of justice was never intended to be a license for
erring litigants to violate the rules with impunity. Liberality in the interpretation and
application of the rules can be invoked only in proper cases and under justifiable causes
and circumstances. While litigation is not a game of technicalities, every case must be
prosecuted in accordance with the prescribed procedure to ensure an orderly and
speedy administration of justice.19
[Emphases Supplied]
And, as stressed in the case of Daikoku Electronics Phils., Inc. v. Raza:20
To be sure, the relaxation of procedural rules cannot be made without any valid
reasons proffered for or underpinning it. To merit liberality, petitioner must show
reasonable cause justifying its noncompliance with the rules and must convince the
Court that the outright dismissal of the petition would defeat the administration of
substantive justice. x x x The desired leniency cannot be accorded absent valid and
compelling reasons for such a procedural lapse. x x x
Page 40 of 78
We must stress that the bare invocation of "the interest of substantial justice" line
is not some magic wand that will automatically compel this Court to suspend
procedural rules. Procedural rules are not to be belittled, let alone dismissed simply
because their non-observance may have resulted in prejudice to a party’s substantial
rights. Utter disregard of the rules cannot be justly rationalized by harping on the policy
of liberal construction.21
[Emphases Supplied]
In this case, as explained above, petitioner utterly failed to not only comply with the
basic procedural requirement of presenting only the original copies of its documentary
evidence, but also to adhere to the requirement to properly make its offer of proof or
tender of excluded evidence for the proper consideration of the appellate tribunal.
Indeed, to apply technical rules strictly against the CIR because it simply relied on the
validity of RR 17-99 – but not be strict with respect to petitioner’s shortcomings, would
be unfair. For this would go against the principle that taxation is the rule,
exemption/refund, the exception.
C. Petitioner’s evidence, even if considered, fails to prove that it is entitled to its
claim for refund.
Finally, as correctly held by the CTA En Banc, even if the Court would consider
petitioner’s otherwise excluded evidence, the same would still fail to sufficiently prove
the petitioner’s entitlement to its claim for refund. The disquisition of the CTA Division,
as quoted in the CTA En Banc decision, is hereby reiterated with approval:
xxx, the documentary exhibits are not sufficient to prove the amounts being claimed by
petitioner as refund. Looking at Exhibit ‘G,’ the same is a mere summary of excise taxes
paid by petitioner for ALL of its cigarette brands. This Court cannot verify the amounts
of excise taxes paid for the brands in issue which are Champion M-100s, Camel Filter
Kings, Winston Filter Kings, and Winston Lights.
This Court cannot likewise rely solely on petitioner's Excise Tax Refund Computation
Summary. The figures therein must be verified through other documentary evidence
which this Court must look into and which petitioner failed to properly
provide.22 [Emphases Supplied]

Clearly, it is petitioner’s burden to prove the allegations made in its claim for refund. For
a claim for refund to be granted, the manner in proving it must be in accordance with the
prescribed rules of evidence. It would have been erroneous had the CTA En Banc relied
on petitioner's own Excise Tax Refund Computation Summary or the unsatisfactory
explanation of its lone witness to justify its claim for tax refund.
Indeed, while it is true that litigation is not a game of technicalities – it is equally true,
however, that every case must be established in accordance with the prescribed
procedure to ensure an orderly and speedy administration of justice. In all, the Court
finds that the failure of petitioner to prove its claim in accordance with the settled
evidentiary rules merits its dismissal.
Lest it be misunderstood, this Court is not reversing, directly or indirectly, its
pronouncements in G.R. Nos. 167274-75 and G.R. No. 180006 that RR 17-99 is
invalid.1âwphi1 This Court is simply pointing to the rule that claims for refunds are the
exception, rather than the rule, and that each claim for refund, in order to be granted,
must be clearly set forth and established in accordance with the rules of evidence.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 140944             April 30, 2008
RAFAEL ARSENIO S. DIZON, in his capacity as the Judicial Administrator of the
Estate of the deceased JOSE P. FERNANDEZ, petitioner,
vs.
COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL REVENUE, respondents.
Remedial Law; Evidence; No evidentiary value can be given the pieces of evidence
submitted by the Bureau of Internal Revenue (BIR), as the rules on documentary evidence
require that these documents must be formally offered before the Court of Tax Appeals
(CTA).—Under Section 8 of RA 1125, the CTA is categorically described as a court of
record. As cases filed before it are litigated de novo, party-litigants shall prove every
minute aspect of their cases. Indubitably, no evidentiary value can be given the pieces of
evidence submitted by the BIR, as the rules on documentary evidence require that these
documents must be formally offered before the CTA. Pertinent is Section 34, Rule 132 of
the Revised Rules on Evidence which reads: SEC. 34. Offer of evidence.—The court
Page 41 of 78
As it has been said, time and again, that claims for tax refunds are in the nature of tax
exemptions which result in loss of revenue for the government. Upon the person
claiming an exemption from tax payments rests the burden of justifying the exemption
by words too plain to be mistaken and too categorical to be misinterpreted; it is never
presumed nor be allowed solely on the ground of equity.23 In addition, one who claims
that he is entitled to a tax refund must not only claim that the transaction subject of tax
is clearly and unequivocally not subject to tax - the amount of the claim must still be
proven in the normal course,24 in accordance with the prescribed rules on evidence.
After all, taxes are the lifeblood of the nation.25
WHEREFORE, the petition is DENIED.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
shall consider no evidence which has not been formally offered. The purpose for which
the evidence is offered must be specified.
Same; Same; Courts cannot consider evidence which has not been formally offered;
Doctrine laid down in Vda. de Oñate still subsists in this jurisdiction; Vda. de Oñate is
merely an exception to the general rule; Being an exception, it may be applied only when
there is strict compliance with the requisites mentioned therein.—The CTA and the CA rely
solely on the case of Vda. de Oñate, 250 SCRA 283 (1995), which reiterated this Court’s
previous rulings in People v. Napat-a, 179 SCRA 403 (1989), and People v. Mate, 103
SCRA 484 (1981), on the admission and consideration of exhibits which were not
formally offered during the trial. Although in a long line of cases many of which were
decided after Vda. de Oñate, we held that courts cannot consider evidence which has not
been formally offered, nevertheless, petitioner cannot validly assume that the doctrine
laid down in Vda. de Oñate has already been abandoned. Recently, in Ramos v. Dizon,
498 SCRA 17 (2006), this Court, applying the said doctrine, ruled that the trial court
judge therein committed no error when he admitted and considered the respondents’
exhibits in the resolution of the case, notwithstanding the fact that the same were not
formally offered. Likewise, in Far East Bank & Trust Company v. Commissioner of Internal
Revenue, 502 SCRA 87 (2006), the Court made reference to said doctrine in resolving the
issues therein. Indubitably, the doctrine laid down in Vda. De Oñate still subsists in this
jurisdiction. In Vda. de Oñate, we held that: x x x However, in People v. Napat-a [179
SCRA 403] citing People v. Mate [103 SCRA 484], we relaxed the foregoing rule and

allowed evidence not formally offered to be admitted and considered by the trial
court provided the following requirements are present, viz.: first, the same must
have been duly identified by testimony duly recorded and, second, the same must
have been incorporated in the records of the case.” From the foregoing declaration,
however, it is clear that Vda. de Oñate is merely an exception to the general rule. Being
an exception, it may be applied only when there is strict compliance with the requisites
mentioned therein; otherwise, the general rule in Section 34 of Rule 132 of the Rules of
Court should prevail.
Same; Same; The presentation of the Bureau of Internal Revenue’s (BIR’s) evidence is not a
mere procedural technicality which may be disregarded considering that it is the only
means by which the Court of Tax Appeals (CTA) may ascertain and verify the truth of BIR’s
claims against the Estate.—While the CTA is not governed strictly by technical rules of
evidence, as rules of procedure are not ends in themselves and are primarily intended as
tools in the administration of justice, the presentation of the BIR’s evidence is not a mere
procedural technicality which may be disregarded considering that it is the only means
by which the CTA may ascertain and verify the truth of BIR’s claims against the Estate.
The BIR’s failure to formally offer these pieces of evidence, despite CTA’s directives, is
fatal to its cause. Such failure is aggravated by the fact that not even a single reason was
advanced by the BIR to justify such fatal omission. This, we take against the BIR.
Civil Law; Obligations; Condonation or Remission of Debt; Words and Phrases;
Definition of condonation or remission of debt.—It is admitted that the claims of the
Estate’s aforementioned creditors have been condoned. As a mode of extinguishing an
obligation, condonation or remission of debt is defined as: an act of liberality, by virtue
of which, without receiving any equivalent, the creditor renounces the enforcement of
the obligation, which is extinguished in its entirety or in that part or aspect of the same
to which the remission refers. It is an essential characteristic of remission that it be
gratuitous, that there is no equivalent received for the benefit given; once such
equivalent exists, the nature of the act changes. It may become dation in payment when
the creditor receives a thing different from that stipulated; or novation, when the object
or principal conditions of the obligation should be changed; or compromise, when the
matter renounced is in litigation or dispute and in exchange of some concession which
the creditor receives.
Page 42 of 78
Taxation; Statutory Construction; Court agrees with the date-of-death valuation rule; Tax
burdens are not to be imposed nor presumed to be imposed beyond what the statute
expressly and clearly imports, tax statutes being construed strictissimi juris against the
government.—We express our agreement with the date-of-death valuation rule, made
pursuant to the ruling of the U.S. Supreme Court in Ithaca Trust Co. v. United States, 279
U.S. 151, 49 S. Ct. 291, 73 L.Ed. 647 (1929). First. There is no law, nor do we discern any
legislative intent in our tax laws, which disregards the date-of-death valuation principle
and particularly provides that post-death developments must be considered in
determining the net value of the estate. It bears emphasis that tax burdens are not to be
imposed, nor presumed to be imposed, beyond what the statute expressly and clearly
imports, tax statutes being construed strictissimi juris against the government. Any
doubt on whether a person, article or activity is taxable is generally resolved against
taxation. Second. Such construction finds relevance and consistency in our Rules on
Special Proceedings wherein the term “claims” required to be presented against a
decedent’s estate is generally construed to mean debts or demands of a pecuniary
nature which could have been enforced against the deceased in his lifetime, or liability
contracted by the deceased before his death. Therefore, the claims existing at the time of
death are significant to, and should be made the basis of, the determination of allowable
deductions.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of
Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision 2 dated April
30, 1999 which affirmed the Decision3 of the Court of Tax Appeals (CTA) dated June 17,
1997.4
The Facts
On November 7, 1987, Jose P. Fernandez (Jose) died. Thereafter, a petition for the
probate of his will5 was filed with Branch 51 of the Regional Trial Court (RTC) of Manila
(probate court).[6] The probate court then appointed retired Supreme Court Justice
Arsenio P. Dizon (Justice Dizon) and petitioner, Atty. Rafael Arsenio P. Dizon (petitioner)
as Special and Assistant Special Administrator, respectively, of the Estate of Jose
(Estate). In a letter7 dated October 13, 1988, Justice Dizon informed respondent
Commissioner of the Bureau of Internal Revenue (BIR) of the special proceedings for the
Estate.
Petitioner alleged that several requests for extension of the period to file the required
estate tax return were granted by the BIR since the assets of the estate, as well as the
 Page 43 of 78

claims against it, had yet to be collated, determined and identified. Thus, in a
letter8 dated March 14, 1990, Justice Dizon authorized Atty. Jesus M. Gonzales (Atty.
Gonzales) to sign and file on behalf of the Estate the required estate tax return and to
represent the same in securing a Certificate of Tax Clearance. Eventually, on April 17,
1990, Atty. Gonzales wrote a letter9 addressed to the BIR Regional Director for San Pablo
City and filed the estate tax return10 with the same BIR Regional Office, showing therein
a NIL estate tax liability, computed as follows:
COMPUTATION OF TAX
Conjugal Real Property (Sch. 1) P10,855,020.00
Conjugal Personal Property (Sch.2) 3,460,591.34
Taxable Transfer (Sch. 3)
Petitioner requested the probate court's authority to sell several properties forming part
of the Estate, for the purpose of paying its creditors, namely: Equitable Banking
Corporation (P19,756,428.31), Banque de L'Indochine et. de Suez (US$4,828,905.90 as
of January 31, 1988), Manila Banking Corporation (P84,199,160.46 as of February 28,
1989) and State Investment House, Inc. (P6,280,006.21). Petitioner manifested that
Manila Bank, a major creditor of the Estate was not included, as it did not file a claim
with the probate court since it had security over several real estate properties forming
part of the Estate.16
However, on November 26, 1991, the Assistant Commissioner for Collection of the BIR,
Themistocles Montalban, issued Estate Tax Assessment Notice No. FAS-E-87-91-
003269,17 demanding the payment of P66,973,985.40 as deficiency estate tax, itemized
as follows:

Deficiency Estate Tax- 1987

Gross Conjugal Estate 14,315,611.34
Estate tax P31,868,414.48
Less: Deductions (Sch. 4) 187,822,576.06
25% surcharge- late filing 7,967,103.62
Net Conjugal Estate NIL  
late payment 7,967,103.62
Less: Share of Surviving Spouse NIL.  
Net Share in Conjugal Estate NIL  
Interest 19,121,048.68
xxx

Compromise-non filing 25,000.00

Net Taxable Estate NIL.  
Estate Tax Due NIL.11
non payment 25,000.00

On April 27, 1990, BIR Regional Director for San Pablo City, Osmundo G. Umali issued
Certification Nos. 2052[12] and 2053[13] stating that the taxes due on the transfer of real no notice of death 15.00
and personal properties[14] of Jose had been fully paid and said properties may be
transferred to his heirs. Sometime in August 1990, Justice Dizon passed away. Thus, on no CPA Certificate 300.00
October 22, 1990, the probate court appointed petitioner as the administrator of the
Estate.15
Total amount due & collectible P66,973,985.4018

In his letter19 dated December 12, 1991, Atty. Gonzales moved for the reconsideration of
the said estate tax assessment. However, in her letter20 dated April 12, 1994, the BIR
Commissioner denied the request and reiterated that the estate is liable for the payment
of P66,973,985.40 as deficiency estate tax. On May 3, 1994, petitioner received the letter
of denial. On June 2, 1994, petitioner filed a petition for review 21 before respondent CTA.
Trial on the merits ensued.

As found by the CTA, the respective parties presented the following pieces of evidence,
to wit:
In the hearings conducted, petitioner did not present testimonial evidence but
merely documentary evidence consisting of the following:
Nature of Document (sic) Exhibits
1. Letter dated October 13, 1988 from Arsenio P. "A"
Dizon addressed to the Commissioner of
Internal Revenue informing the latter of the
special proceedings for the settlement of the
estate (p. 126, BIR records);
2. Petition for the probate of the will and issuance "B" & "B-1"
of letter of administration filed with the
Regional Trial Court (RTC) of Manila, docketed
as Sp. Proc. No. 87-42980 (pp. 107-108, BIR
records);
3. Pleading entitled "Compliance" filed with the "C"
probate Court submitting the final inventory of
all the properties of the deceased (p. 106, BIR
records);
4. Attachment to Exh. "C" which is the detailed and "C-1" to "C-17"
complete listing of the properties of the
deceased (pp. 89-105, BIR rec.);
5. Claims against the estate filed by Equitable "D" to "D-24"
Banking Corp. with the probate Court in the
amount of P19,756,428.31 as of March 31,
1988, together with the Annexes to the claim
(pp. 64-88, BIR records);
6. Claim filed by Banque de L' Indochine et de Suez "E" to "E-3"
with the probate Court in the amount of US
$4,828,905.90 as of January 31, 1988 (pp. 262-
265, BIR records);
7. Claim of the Manila Banking Corporation (MBC) "F" to "F-3"
which as of November 7, 1987 amounts
to P65,158,023.54, but recomputed as of
February 28, 1989 at a total amount
of P84,199,160.46; together with the demand
Page 44 of 78
letter from MBC's lawyer (pp. 194-197, BIR
records);
8. Demand letter of Manila Banking Corporation "G" & "G-1"
prepared by Asedillo, Ramos and Associates
Law Offices addressed to Fernandez Hermanos,
Inc., represented by Jose P. Fernandez, as
mortgagors, in the total amount
of P240,479,693.17 as of February 28, 1989 (pp.
186-187, BIR records);
9. Claim of State Investment House, Inc. filed with "H" to "H-16"
the RTC, Branch VII of Manila, docketed as Civil
Case No. 86-38599 entitled "State Investment
House, Inc., Plaintiff, versus Maritime Company
Overseas, Inc. and/or Jose P. Fernandez,
Defendants," (pp. 200-215, BIR records);
10. Letter dated March 14, 1990 of Arsenio P. Dizon "I"
addressed to Atty. Jesus M. Gonzales, (p. 184,
BIR records);
11. Letter dated April 17, 1990 from J.M. Gonzales "J"
addressed to the Regional Director of BIR in San
Pablo City (p. 183, BIR records);
12. Estate Tax Return filed by the estate of the late "K" to "K-5"
Jose P. Fernandez through its authorized
representative, Atty. Jesus M. Gonzales, for
Arsenio P. Dizon, with attachments (pp. 177-
182, BIR records);
13. Certified true copy of the Letter of "L"
Administration issued by RTC Manila, Branch
51, in Sp. Proc. No. 87-42980 appointing Atty.
Rafael S. Dizon as Judicial Administrator of the
estate of Jose P. Fernandez; (p. 102, CTA
records) and
14. Certification of Payment of estate taxes Nos. "M" to "M-5"
2052 and 2053, both dated April 27, 1990,
issued by the Office of the Regional Director,
Revenue Region No. 4-C, San Pablo City, with
attachments (pp. 103-104, CTA records.).
Respondent's [BIR] counsel presented on June 26, 1995 one witness in the
person of Alberto Enriquez, who was one of the revenue examiners who
 Page 45 of 78

conducted the investigation on the estate tax case of the late Jose P. Fernandez. demanding payment of the amount
In the course of the direct examination of the witness, he identified the of P66,973,985.40; and
following:
14. Assessment Notice FAS-E-87-91-00 pp. 169-17022

Documents/Signatures BIR Record

The CTA's Ruling

1. Estate Tax Return prepared by the BIR; p. 138 On June 17, 1997, the CTA denied the said petition for review. Citing this Court's ruling
2. Signatures of Ma. Anabella Abuloc and -do- in Vda. de Oñate v. Court of Appeals,23 the CTA opined that the aforementioned pieces of
Alberto Enriquez, Jr. appearing at the lower evidence introduced by the BIR were admissible in evidence. The CTA ratiocinated:
Portion of Exh. "1";
3. Memorandum for the Commissioner, dated pp. 143-144 Although the above-mentioned documents were not formally offered as evidence for
July 19, 1991, prepared by revenue respondent, considering that respondent has been declared to have waived the
examiners, Ma. Anabella A. Abuloc, Alberto presentation thereof during the hearing on March 20, 1996, still they could be
S. Enriquez and Raymund S. Gallardo; considered as evidence for respondent since they were properly identified during the
Reviewed by Maximino V. Tagle presentation of respondent's witness, whose testimony was duly recorded as part of the
records of this case. Besides, the documents marked as respondent's exhibits formed
4. Signature of Alberto S. Enriquez appearing -do- part of the BIR records of the case.24
at the lower portion on p. 2 of Exh. "2";
5. Signature of Ma. Anabella A. Abuloc -do- Nevertheless, the CTA did not fully adopt the assessment made by the BIR and it came
appearing at the lower portion on p. 2 of up with its own computation of the deficiency estate tax, to wit:
Exh. "2";
6. Signature of Raymund S. Gallardo appearing -do- Conjugal Real Property P 5,062,016.00
at the Lower portion on p. 2 of Exh. "2"; Conjugal Personal Prop. 33,021,999.93
7. Signature of Maximino V. Tagle also -do- Gross Conjugal Estate 38,084,015.93
appearing on p. 2 of Exh. "2";
Less: Deductions 26,250,000.00
8. Summary of revenue Enforcement Officers p. 139
Audit Report, dated July 19, 1991; Net Conjugal Estate P 11,834,015.93
9. Signature of Alberto Enriquez at the lower -do- Less: Share of Surviving Spouse 5,917,007.96
portion of Exh. "3"; Net Share in Conjugal Estate P 5,917,007.96
10. Signature of Ma. Anabella A. Abuloc at the -do- Add: Capital/Paraphernal
lower portion of Exh. "3";
11. Signature of Raymond S. Gallardo at the -do- Properties – P44,652,813.66
lower portion of Exh. "3";
12. Signature of Maximino V. Tagle at the lower -do-
Less: Capital/Paraphernal Deductions 44,652,813.66
portion of Exh. "3";
13. Demand letter (FAS-E-87-91-00), signed by p. 169
the Asst. Commissioner for Collection for Net Taxable Estate P 50,569,821.62
the Commissioner of Internal Revenue, ============
 Page 46 of 78

Estate Tax Due P 29,935,342.97 1. Whether or not the admission of evidence which were not formally offered by the
respondent BIR by the Court of Tax Appeals which was subsequently upheld by the
Court of Appeals is contrary to the Rules of Court and rulings of this Honorable Court;
Add: 25% Surcharge for Late Filing 7,483,835.74
Add: Penalties for-No notice of death 15.00 2. Whether or not the Court of Tax Appeals and the Court of Appeals erred in
No CPA certificate 300.00 recognizing/considering the estate tax return prepared and filed by respondent BIR
knowing that the probate court appointed administrator of the estate of Jose P.
Fernandez had previously filed one as in fact, BIR Certification Clearance Nos. 2052
Total deficiency estate tax P 37,419,493.71 and 2053 had been issued in the estate's favor;
============
3. Whether or not the Court of Tax Appeals and the Court of Appeals erred in
exclusive of 20% interest from due date of its payment until full payment disallowing the valid and enforceable claims of creditors against the estate, as lawful
thereof deductions despite clear and convincing evidence thereof; and

[Sec. 283 (b), Tax Code of 1987].25
Thus, the CTA disposed of the case in this wise:
WHEREFORE, viewed from all the foregoing, the Court finds the petition
unmeritorious and denies the same. Petitioner and/or the heirs of Jose P.
Fernandez are hereby ordered to pay to respondent the amount
of P37,419,493.71 plus 20% interest from the due date of its payment until full
payment thereof as estate tax liability of the estate of Jose P. Fernandez who
died on November 7, 1987.
SO ORDERED.26
Aggrieved, petitioner, on March 2, 1998, went to the CA via a petition for review. 27
The CA's Ruling
On April 30, 1999, the CA affirmed the CTA's ruling. Adopting in full the CTA's findings,
the CA ruled that the petitioner's act of filing an estate tax return with the BIR and the
issuance of BIR Certification Nos. 2052 and 2053 did not deprive the BIR Commissioner
of her authority to re-examine or re-assess the said return filed on behalf of the Estate. 28
On May 31, 1999, petitioner filed a Motion for Reconsideration29 which the CA denied in
its Resolution30 dated November 3, 1999.
Hence, the instant Petition raising the following issues:
4. Whether or not the Court of Tax Appeals and the Court of Appeals erred in
validating erroneous double imputation of values on the very same estate properties
in the estate tax return it prepared and filed which effectively bloated the estate's
assets.31
The petitioner claims that in as much as the valid claims of creditors against the Estate
are in excess of the gross estate, no estate tax was due; that the lack of a formal offer of
evidence is fatal to BIR's cause; that the doctrine laid down in Vda. de Oñate has already
been abandoned in a long line of cases in which the Court held that evidence not
formally offered is without any weight or value; that Section 34 of Rule 132 of the Rules
on Evidence requiring a formal offer of evidence is mandatory in character; that, while
BIR's witness Alberto Enriquez (Alberto) in his testimony before the CTA identified the
pieces of evidence aforementioned such that the same were marked, BIR's failure to
formally offer said pieces of evidence and depriving petitioner the opportunity to cross-
examine Alberto, render the same inadmissible in evidence; that
assuming arguendo that the ruling in Vda. de Oñate is still applicable, BIR failed to
comply with the doctrine's requisites because the documents herein remained simply
part of the BIR records and were not duly incorporated in the court records; that the BIR
failed to consider that although the actual payments made to the Estate creditors were
lower than their respective claims, such were compromise agreements reached long
after the Estate's liability had been settled by the filing of its estate tax return and the
issuance of BIR Certification Nos. 2052 and 2053; and that the reckoning date of the
claims against the Estate and the settlement of the estate tax due should be at the time
the estate tax return was filed by the judicial administrator and the issuance of said BIR
Certifications and not at the time the aforementioned Compromise Agreements were
entered into with the Estate's creditors.32

On the other hand, respondent counters that the documents, being part of the records of
the case and duly identified in a duly recorded testimony are considered evidence even
if the same were not formally offered; that the filing of the estate tax return by the Estate
and the issuance of BIR Certification Nos. 2052 and 2053 did not deprive the BIR of its
authority to examine the return and assess the estate tax; and that the factual findings of
the CTA as affirmed by the CA may no longer be reviewed by this Court via a petition for
review.33
The Issues
There are two ultimate issues which require resolution in this case:
First. Whether or not the CTA and the CA gravely erred in allowing the admission of the
pieces of evidence which were not formally offered by the BIR; and
Second. Whether or not the CA erred in affirming the CTA in the latter's determination of
the deficiency estate tax imposed against the Estate.
The Court’s Ruling
The Petition is impressed with merit.
Under Section 8 of RA 1125, the CTA is categorically described as a court of record. As
cases filed before it are litigated de novo, party-litigants shall prove every minute aspect
of their cases. Indubitably, no evidentiary value can be given the pieces of evidence
submitted by the BIR, as the rules on documentary evidence require that these
documents must be formally offered before the CTA.34 Pertinent is Section 34, Rule 132
of the Revised Rules on Evidence which reads:
SEC. 34. Offer of evidence. — The court shall consider no evidence which has not
been formally offered. The purpose for which the evidence is offered must be
specified.
The CTA and the CA rely solely on the case of Vda. de Oñate, which reiterated this Court's
previous rulings in People v. Napat-a35 and People v. Mate36 on the admission and
consideration of exhibits which were not formally offered during the trial. Although in a
long line of cases many of which were decided after Vda. de Oñ ate, we held that courts
cannot consider evidence which has not been formally offered, 37 nevertheless, petitioner
cannot validly assume that the doctrine laid down in Vda. de Oñate has already been
abandoned. Recently, in Ramos v. Dizon,38 this Court, applying the said doctrine, ruled
that the trial court judge therein committed no error when he admitted and considered
Page 47 of 78
the respondents' exhibits in the resolution of the case, notwithstanding the fact that the
same were not formally offered. Likewise, in Far East Bank & Trust Company v.
Commissioner of Internal Revenue,39 the Court made reference to said doctrine in
resolving the issues therein. Indubitably, the doctrine laid down in Vda. De Oñate still
subsists in this jurisdiction. In Vda. de Oñate, we held that:
From the foregoing provision, it is clear that for evidence to be considered, the same
must be formally offered. Corollarily, the mere fact that a particular document is
identified and marked as an exhibit does not mean that it has already been offered as
part of the evidence of a party. In Interpacific Transit, Inc. v. Aviles [186 SCRA 385], we
had the occasion to make a distinction between identification of documentary
evidence and its formal offer as an exhibit. We said that the first is done in the course
of the trial and is accompanied by the marking of the evidence as an exhibit while the
second is done only when the party rests its case and not before. A party, therefore,
may opt to formally offer his evidence if he believes that it will advance his cause or
not to do so at all. In the event he chooses to do the latter, the trial court is not
authorized by the Rules to consider the same.
However, in People v. Napat-a [179 SCRA 403] citing People v. Mate [103 SCRA
484], we relaxed the foregoing rule and allowed evidence not formally offered to
be admitted and considered by the trial court provided the following
requirements are present, viz.: first, the same must have been duly identified by
testimony duly recorded and, second, the same must have been incorporated in
the records of the case.40
From the foregoing declaration, however, it is clear that Vda. de Oñ ate is merely an
exception to the general rule. Being an exception, it may be applied only when there is
strict compliance with the requisites mentioned therein; otherwise, the general rule in
Section 34 of Rule 132 of the Rules of Court should prevail.
In this case, we find that these requirements have not been satisfied. The assailed pieces
of evidence were presented and marked during the trial particularly when Alberto took
the witness stand. Alberto identified these pieces of evidence in his direct
testimony.41 He was also subjected to cross-examination and re-cross examination by
petitioner.42 But Alberto’s account and the exchanges between Alberto and petitioner did
not sufficiently describe the contents of the said pieces of evidence presented by the BIR.
In fact, petitioner sought that the lead examiner, one Ma. Anabella A. Abuloc, be
summoned to testify, inasmuch as Alberto was incompetent to answer questions relative
to the working papers.43 The lead examiner never testified. Moreover, while Alberto's
testimony identifying the BIR's evidence was duly recorded, the BIR documents
themselves were not incorporated in the records of the case.

A common fact threads through Vda. de Oñate and Ramos that does not exist at all in the
instant case. In the aforementioned cases, the exhibits were marked at the pre-trial
proceedings to warrant the pronouncement that the same were duly incorporated in the
records of the case. Thus, we held in Ramos:
In this case, we find and so rule that these requirements have been satisfied. The
exhibits in question were presented and marked during the pre-trial of the
case thus, they have been incorporated into the records. Further, Elpidio himself
explained the contents of these exhibits when he was interrogated by respondents'
counsel...
xxxx
But what further defeats petitioner's cause on this issue is that respondents' exhibits
were marked and admitted during the pre-trial stage as shown by the Pre-Trial Order
quoted earlier.44
While the CTA is not governed strictly by technical rules of evidence, 45 as rules of
procedure are not ends in themselves and are primarily intended as tools in the
administration of justice, the presentation of the BIR's evidence is not a mere procedural
technicality which may be disregarded considering that it is the only means by which the
CTA may ascertain and verify the truth of BIR's claims against the Estate. 46 The BIR's
failure to formally offer these pieces of evidence, despite CTA's directives, is fatal to its
cause.47 Such failure is aggravated by the fact that not even a single reason was advanced
by the BIR to justify such fatal omission. This, we take against the BIR.
Per the records of this case, the BIR was directed to present its evidence 48 in the hearing
of February 21, 1996, but BIR's counsel failed to appear.49 The CTA denied petitioner's
motion to consider BIR's presentation of evidence as waived, with a warning to BIR that
such presentation would be considered waived if BIR's evidence would not be presented
at the next hearing. Again, in the hearing of March 20, 1996, BIR's counsel failed to
appear.50 Thus, in its Resolution51 dated March 21, 1996, the CTA considered the BIR to
have waived presentation of its evidence. In the same Resolution, the parties were
directed to file their respective memorandum. Petitioner complied but BIR failed to do
so.52 In all of these proceedings, BIR was duly notified. Hence, in this case, we are
constrained to apply our ruling in Heirs of Pedro Pasag v. Parocha:53
A formal offer is necessary because judges are mandated to rest their findings of facts
and their judgment only and strictly upon the evidence offered by the parties at the
trial. Its function is to enable the trial judge to know the purpose or purposes for
which the proponent is presenting the evidence. On the other hand, this allows
opposing parties to examine the evidence and object to its admissibility. Moreover, it
Page 48 of 78
facilitates review as the appellate court will not be required to review documents not
previously scrutinized by the trial court.
Strict adherence to the said rule is not a trivial matter. The Court in Constantino v.
Court of Appeals ruled that the formal offer of one's evidence is deemed waived
after failing to submit it within a considerable period of time. It explained that
the court cannot admit an offer of evidence made after a lapse of three (3)
months because to do so would "condone an inexcusable laxity if not non-
compliance with a court order which, in effect, would encourage needless delays
and derail the speedy administration of justice."
Applying the aforementioned principle in this case, we find that the trial court had
reasonable ground to consider that petitioners had waived their right to make a
formal offer of documentary or object evidence. Despite several extensions of time to
make their formal offer, petitioners failed to comply with their commitment and
allowed almost five months to lapse before finally submitting it. Petitioners' failure
to comply with the rule on admissibility of evidence is anathema to the efficient,
effective, and expeditious dispensation of justice.
Having disposed of the foregoing procedural issue, we proceed to discuss the merits of
the case.
Ordinarily, the CTA's findings, as affirmed by the CA, are entitled to the highest respect
and will not be disturbed on appeal unless it is shown that the lower courts committed
gross error in the appreciation of facts.54 In this case, however, we find the decision of
the CA affirming that of the CTA tainted with palpable error.
It is admitted that the claims of the Estate's aforementioned creditors have been
condoned. As a mode of extinguishing an obligation,55 condonation or remission of
debt56 is defined as:
an act of liberality, by virtue of which, without receiving any equivalent, the
creditor renounces the enforcement of the obligation, which is extinguished in
its entirety or in that part or aspect of the same to which the remission refers. It
is an essential characteristic of remission that it be gratuitous, that there is no
equivalent received for the benefit given; once such equivalent exists, the nature
of the act changes. It may become dation in payment when the creditor receives
a thing different from that stipulated; or novation, when the object or principal
conditions of the obligation should be changed; or compromise, when the
matter renounced is in litigation or dispute and in exchange of some concession
which the creditor receives.57

Verily, the second issue in this case involves the construction of Section 79 58 of the
National Internal Revenue Code59 (Tax Code) which provides for the allowable
deductions from the gross estate of the decedent. The specific question is whether the
actual claims of the aforementioned creditors may be fully allowed as deductions from
the gross estate of Jose despite the fact that the said claims were reduced or condoned
through compromise agreements entered into by the Estate with its creditors.
"Claims against the estate," as allowable deductions from the gross estate under Section
79 of the Tax Code, are basically a reproduction of the deductions allowed under Section
89 (a) (1) (C) and (E) of Commonwealth Act No. 466 (CA 466), otherwise known as the
National Internal Revenue Code of 1939, and which was the first codification of
Philippine tax laws. Philippine tax laws were, in turn, based on the federal tax laws of the
United States. Thus, pursuant to established rules of statutory construction, the
decisions of American courts construing the federal tax code are entitled to great weight
in the interpretation of our own tax laws.60
It is noteworthy that even in the United States, there is some dispute as to whether the
deductible amount for a claim against the estate is fixed as of the decedent's death which
is the general rule, or the same should be adjusted to reflect post-death developments,
such as where a settlement between the parties results in the reduction of the amount
actually paid.61 On one hand, the U.S. court ruled that the appropriate deduction is the
"value" that the claim had at the date of the decedent's death. 62 Also, as held in Propstra
v. U.S., 63 where a lien claimed against the estate was certain and enforceable on the date
of the decedent's death, the fact that the claimant subsequently settled for lesser amount
did not preclude the estate from deducting the entire amount of the claim for estate tax
purposes. These pronouncements essentially confirm the general principle that post-
death developments are not material in determining the amount of the deduction.
On the other hand, the Internal Revenue Service (Service) opines that post-death
settlement should be taken into consideration and the claim should be allowed as a
deduction only to the extent of the amount actually paid.64 Recognizing the dispute, the
Service released Proposed Regulations in 2007 mandating that the deduction would be
limited to the actual amount paid.65
In announcing its agreement with Propstra,66 the U.S. 5th Circuit Court of Appeals held:
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
Page 49 of 78
We are persuaded that the Ninth Circuit's decision...in Propstra correctly apply
the Ithaca Trust date-of-death valuation principle to enforceable claims against the
estate. As we interpret Ithaca Trust, when the Supreme Court announced the date-of-
death valuation principle, it was making a judgment about the nature of the federal
estate tax specifically, that it is a tax imposed on the act of transferring property by
will or intestacy and, because the act on which the tax is levied occurs at a discrete
time, i.e., the instance of death, the net value of the property transferred should be
ascertained, as nearly as possible, as of that time. This analysis supports broad
application of the date-of-death valuation rule.67
We express our agreement with the date-of-death valuation rule, made pursuant to the
ruling of the U.S. Supreme Court in Ithaca Trust Co. v. United States.68 First. There is no
law, nor do we discern any legislative intent in our tax laws, which disregards the date-
of-death valuation principle and particularly provides that post-death developments
must be considered in determining the net value of the estate. It bears emphasis that tax
burdens are not to be imposed, nor presumed to be imposed, beyond what the statute
expressly and clearly imports, tax statutes being construed strictissimi juris against the
government.69 Any doubt on whether a person, article or activity is taxable is generally
resolved against taxation.70 Second. Such construction finds relevance and consistency in
our Rules on Special Proceedings wherein the term "claims" required to be presented
against a decedent's estate is generally construed to mean debts or demands of a
pecuniary nature which could have been enforced against the deceased in his lifetime, or
liability contracted by the deceased before his death.71 Therefore, the claims existing at
the time of death are significant to, and should be made the basis of, the determination
of allowable deductions.
WHEREFORE, the instant Petition is GRANTED. Accordingly, the assailed Decision
dated April 30, 1999 and the Resolution dated November 3, 1999 of the Court of Appeals
in CA-G.R. S.P. No. 46947 are REVERSED and SET ASIDE. The Bureau of Internal
Revenue's deficiency estate tax assessment against the Estate of Jose P. Fernandez is
hereby NULLIFIED. No costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
G.R. No. 85423             May 6, 1991
JOSE TABUENA, petitioner,
vs.
COURT OF APPEALS and EMILIANO TABERNILLA, JR., respondents.

Ramon Dimen for petitioner.
Dionisio A. Hernandez for private respondent.
Evidence; Evidence not formally offered cannot be considered by the Court unless it
has been duly identified by testimony duly recorded and second, it has itself been
incorporated in the records of the case.—The mere fact that a particular document is
marked as an exhibit does not mean it has thereby already been offered as part of the
evidence of a party. It is true that Exhibits “A”, “B” and “C” were marked at the pre-trial
of the case below, but this was only for the purpose of identifying them at that time.
They were not by such marking formally offered as exhibits. As we said in Interpacific
Transit, Inc. vs. Aviles, “At the trial on the merits, the party may decide to formally offer
(the exhibits) if it believes they will advance its cause, and then again it may decide not
to do so at all. In the latter event, such documents cannot be considered evidence, nor
can they be given any evidentiary value.” Chief Justice Moran explained the rationale of
the rule thus: x x x The offer is necessary because it is the duty of a judge to rest his
findings of facts and his judgment only and strictly upon the evidence offered by the
parties at the trial. We did say in People vs. Napat-a that even if there be no formal offer
of an exhibit, it may still be admitted against the adverse party if, first, it has been duly
identified by testimony duly recorded and, second, it has itself been incorporated in the
records of the case. But we do not find that these requirements have been satisfied in the
case before us. The trial court said the said exhibits could be validly considered because,
even if they had not been formally offered, one of the plaintiff’s witnesses, Cunegunda
Hernandez, testified on them at the trial and was even cross-examined by the
defendant’s counsel. We do not agree. Although she did testify, all she did was identify
the documents. Nowhere in her testimony can we find a recital of the contents of the
exhibits.
Same; Courts; Courts are not authorized to take judicial notice in the adjudication of
cases pending before them of the contents of the records of other cases, even when such
cases have been tried or are pending in the same court, and notwithstanding the fact that
both cases may have been heard or actually pending before the same judge; Exceptions.—
The respondent court also held that the trial court committed no reversible error in
taking judicial notice of Tabuena’s testimony in a case it had previously heard which was
closely connected with the case before it. It conceded that as a general rule “courts are
not authorized to take judicial notice, in the adjudication of cases pending before them,
of the contents of the records of other cases, even when such cases have been tried or
are pending in the same court, and notwithstanding the fact that both cases may have
been heard or are actually pending before the same judge.” Nevertheless, it applied the
exception that: x x x in the absence of objection, and as a matter of convenience to all
parties, a court may properly treat all or any part of the original record of a case filed in
Page 50 of 78
its archives as read into the record of a case pending before it, when, with the knowledge
of the opposing party, reference is made to it for that purpose, by name and number or
in some other manner by which it is sufficiently designated; or when the original record
of the former case or any part of it, is actually withdrawn from the archives by the
court’s direction, at the request or with the consent of the parties, and admitted as a part
of the record of the case then pending. It is clear, though, that this exception is applicable
only when, “in the absence of objection,” “with the knowledge of the opposing party,” or
“at the request or with the consent of the parties,” the case is clearly referred to or “the
original or part of the records of the case are actually withdrawn from the archives” and
“admitted as part of the record of the case then pending.” These conditions have not
been established here. On the contrary, the petitioner was completely unaware that his
testimony in Civil Case No. 1327 was being considered by the trial court in the case then
pending before it. As the petitioner puts it, the matter was never taken up at the trial and
was “unfairly sprung” upon him, leaving him no opportunity to counteract. The
respondent court said that even assuming that the trial court improperly took judicial
notice of the other case, striking off all reference thereto would not be fatal to the
plaintiff’s cause because “the said testimony was merely corroborative of other
evidences submitted by the plaintiff.” What “other evidences”? The trouble with this
justification is that the exhibits it intends to corroborate, to wit, Exhibits “A”, “B” and “C”,
have themselves not been formally submitted.
Property; Ownership; Tax receipts and declarations of ownership for taxation
purposes are not incontrovertible evidence of ownership; they become strong evidence of
ownership acquired by prescription when accompanied by proof of actual possession of the
property.—It is true that tax declarations are not conclusive evidence of ownership, as
we have held in many cases. However, that rule is also not absolute and yields to the
accepted and well-known exception. In the case at bar, it is not even disputed that the
petitioner and his predecessors-in-interest have possessed the disputed property since
even before World War II. In light of this uncontroverted fact, the tax declarations in
their name become weighty and compelling evidence of the petitioner’s ownership. As
this Court has held: While it is true that by themselves tax receipts and declarations of
ownership for taxation purposes are not incontrovertible evidence of ownership they
become strong evidence of ownership acquired by prescription when accompanied by
proof of actual possession of the property. It is only where payment of taxes is
accompanied by actual possession of the land covered by the tax declaration that such
circumstance may be material in supporting a claim of ownership.
CRUZ, J.:

The petitioner faults the decision of the trial court, as affirmed by the respondent court,
for lack of basis. It is argued that the lower courts should not have taken into account
evidence not submitted by the private respondent in accordance with the Rules of Court.
The subject of the dispute is a parcel of residential land consisting of about 440 square
meters and situated in Poblacion, Makato, Aklan. In 1973, an action for recovery of
ownership thereof was filed in the Regional Trial Court of Aklan by the estate of Alfredo
Tabernilla against Jose Tabuena, the herein petitioner. After trial, judgment was
rendered in favor of the plaintiff and the defendant was required to vacate the disputed
lot.1
As the trial court found, the lot was sold by Juan Peralta, Jr. sometime in 1926 to Alfredo
Tabernilla while the two were in the United States. Tabernilla returned to the
Philippines in 1934, and Damasa Timtiman, acting upon her son Juan's instruction,
conveyed the subject land to Tabernilla. At the same time, she requested that she be
allowed to stay thereon as she had been living there all her life. Tabernilla agreed
provided she paid the realty taxes on the property, which she promised to do, and did.
She remained on the said land until her death, following which the petitioner, her son
and half-brother of Juan Peralta, Jr., took possession thereof. The complaint was filed
when demand was made upon Tabuena to surrender the property and he refused,
claiming it as his own.
The trial court rejected his defense that he was the absolute owner of the lot, which he
inherited from his parents, who acquired it even before World War II and had been
living thereon since then and until they died. Also disbelieved was his contention that
the subject of the sale between Peralta and Tabernilla was a different piece of land
planted to coconut trees and bounded on three sides by the Makato River.
Tabuena appealed to the respondent court, complaining that, in arriving at its factual
findings, the trial court motu proprio took cognizance of Exhibits "A", "B" and "C", which
had been marked by the plaintiff but never formally submitted in evidence. The trial
court also erred when, to resolve the ownership of the subject lot, it considered the
proceedings in another case involving the same parties but a different parcel of land.
The said exhibits are referred to in the pre-trial order as follows:
Page 51 of 78
Plaintiff proceeded to mark the following exhibits: Exh. "A", letter dated October
4, 1921 addressed in Makato, Capiz, Philippines; Exh. "A-1", paragraph 2 of the
letter indicating that the amount of P600.00—the first P300.00 and then
another P300.00 as interest since October 4, 1921; Exh. "A-2", is paragraph 3 of
the letter; Exh. "B", a Spanish document; Exh. "C", deed of conveyance filed by
Tomasa Timtiman and Alfredo Tabernilla in 1923; and Exh. "C-1", paragraph 4
of Exh. "C".
In sustaining the trial court, the respondent court held that, contrary to the allegations of
the appellant, the said exhibits were in fact formally submitted in evidence as disclosed
by the transcript of stenographic notes, which it quoted at length. 2 The challenged
decision also upheld the use by the trial court of testimony given in an earlier case, to
bolster its findings in the second case.
We have examined the record and find that the exhibits submitted were not the above-
described documents but Exhibits "X" and "T" and their sub-markings, which were the
last will and testament of Alfredo Tabernilla and the order of probate. It is not at all
denied that the list of exhibits does not include Exhibits "A", "B" and "C". In fact, the trial
court categorically declared that "Exhibits "A-1, "A-2", "B", "C" and "C-l," were not among
those documents or exhibits formally offered for admission by plaintiff-administratrix."
This is a clear contradiction of the finding of the appellate court, which seems to have
confused Exhibits "A," "B" and "C" with Exhibits "X" and "Y", the evidence mentioned in
the quoted transcript.
Rule 132 of the Rules of Court provides in Section 35 thereof as follows:
Sec. 35. Offer of evidence.—The court shall consider no evidence which has not
been formally offered. The purpose for which the evidence is offered must be
specified.
The mere fact that a particular document is marked as an exhibit does not mean it has
thereby already been offered as part of the evidence of a party. It is true that Exhibits
"A," "B" and "C" were marked at the pre-trial of the case below, but this was only for the
purpose of identifying them at that time. They were not by such marking formally
offered as exhibits. As we said in Interpacific Transit, Inc. vs. Aviles,3 "At the trial on the
merits, the party may decide to formally offer (the exhibits) if it believes they will
advance its cause, and then again it may decide not to do so at all. In the latter event,
such documents cannot be considered evidence, nor can they be given any evidentiary
value."
Chief Justice Moran explained the rationale of the rule thus:

. . . The offer is necessary because it is the duty of a judge to rest his findings of
facts and his judgment only and strictly upon the evidence offered by the patties
at the trial.4
We did say in People vs. Napat-a5 that even if there be no formal offer of an exhibit, it
may still be admitted against the adverse party if, first, it has been duly identified by
testimony duly recorded and, second, it has itself been incorporated in the records of the
case. But we do not find that these requirements have been satisfied in the case before
us. The trial court said the said exhibits could be validly considered because, even if they
had not been formally offered, one of the plaintiffs witnesses, Cunegunda Hernandez,
testified on them at the trial and was even cross-examined by the defendant's counsel.
We do not agree. Although she did testify, all she did was identify the documents.
Nowhere in her testimony can we find a recital of the contents of the exhibits.
Thus, her interrogation on Exhibit "A" ran:
LEGASPI: That is this Exh. "A" about ?
A The translation of the letter.
Q What is the content of this Exh. "A", the letter of the sister of Juan Peralta to
Alfredo Tabernilla?
Court: The best evidence is the document. Proceed.6
She also did not explain the contents of the other two exhibits.
The respondent court also held that the trial court committed no reversible error in
taking judicial notice of Tabuena's testimony in a case it had previously heard which was
closely connected with the case before it. It conceded that as a general rule "courts are
not authorized to take judicial notice, in the adjudication of cases pending before them,
of the contents of the records of other cases, even when such cases have been tried or
are pending in the same court, and notwithstanding the fact that both cases may have
been heard or are actually pending b before the same judge. 7 Nevertheless, it applied the
exception that:
. . . in the absence of objection, and as a matter of convenience to all parties, a
court may properly treat all or any part of the original record of a case filed in
its archives as read into the record of a case pending before it, when, with the
knowledge of the opposing party, reference is made to it for that purpose, by
name and number or in some other manner by which it is sufficiently
Page 52 of 78
designated; or when the original record of the former case or any part of it, is
actually withdrawn from the archives by the court's direction, at the request or
with the consent of the parties, and admitted as a part of the record of the case
then pending.8
It is clear, though, that this exception is applicable only when, "in the absence of
objection," "with the knowledge of the opposing party," or "at the request or with the
consent of the parties," the case is clearly referred to or "the original or part of the
records of the case are actually withdrawn from the archives" and "admitted as part of
the record of the case then pending." These conditions have not been established here.
On the contrary, the petitioner was completely unaware that his testimony in Civil Case
No. 1327 was being considered by the trial court in the case then pending before it. As
the petitioner puts it, the matter was never taken up at the trial and was "unfairly
sprung" upon him, leaving him no opportunity to counteract.
The respondent court said that even assuming that the trial court improperly took
judicial notice of the other case, striking off all reference thereto would not be fatal to
the plaintiff's cause because "the said testimony was merely corroborative of other
evidences submitted by the plaintiff." What "other evidences"? The trouble with this
justification is that the exhibits it intends to corroborate, to wit, Exhibits "A", "B" and "C",
have themselves not been formally submitted.
Considering the resultant paucity of the evidence for the private respondent, we feel that
the complaint should have been dismissed by the trial court for failure of the plaintiff to
substantiate its allegations. It has failed to prove that the subject lot was the same parcel
of land sold by Juan Peralta, Jr. to Alfredo Tabernilla and not another property, as the
petitioner contends. Even assuming it was the same lot, there is no explanation for the
sale thereof by Juan Peralta, Jr., who was only the son of Damasa Timtiman. According to
the trial court, "there is no question that before 1934 the land in question belonged to
Damasa Timtiman." Juan Peralta, Jr. could not have validly conveyed title to property
that did not belong to him unless he had appropriate authorization from the owner. No
such authorization has been presented.
It is true that tax declarations are not conclusive evidence of ownership, as we have held
in many cases.1âwphi1 However, that rule is also not absolute and yields to the accepted
and well-known exception. In the case at bar, it is not even disputed that the petitioner
and his predecessors-in-interest have possessed the disputed property since even
before World War II. In light of this uncontroverted fact, the tax declarations in their
name become weighty and compelling evidence of the petitioner's ownership. As this
Court has held:

While it is true that by themselves tax receipts and declarations of ownership
for taxation purposes are not incontrovertible evidence of ownership they
become strong evidence of ownership acquired by prescription when
accompanied by proof of actual possession of the property. 9
It is only where payment of taxes is accompanied by actual possession of the
land covered by the tax declaration that such circumstance may be material in
supporting a claim of ownership.10
The tax receipts accompanied by actual and continuous possession of the
subject parcels of land by the respondents and their parents before them for
more than 30 years qualify them to register title to the said subject parcels of
land.11
The Court can only wonder why, if Alfredo Tabernilla did purchase the property and
magnanimously allowed Damasa Timtiman to remain there, he did not at least require
her to pay the realty taxes in his name, not hers. The explanation given by the trial court
is that he was not much concerned with the property, being a bachelor and fond only of
the three dogs he had bought from America. That is specious reasoning. At best, it is
pure conjecture. If he were really that unconcerned, it is curious that he should have
acquired the property in the first place, even as dacion en pago. He would have
demanded another form of payment if he did not have the intention at all of living on the
land. On the other hand, if he were really interested in the property, we do not see why
he did not have it declared in his name when the realty taxes thereon were paid by
Damasa Timtiman or why he did not object when the payments were made in her own
name.
In comparison, all the acts of Damasa Timtiman and Jose Tabuena indicate that they
were the owners of the disputed property. Damasa Timtiman and her forebears had
been in possession thereof for more than fifty years and, indeed, she herself stayed there
until she died.12 She paid the realty taxes thereon in her own name.13 Jose Tabuena built
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 153874             March 1, 2007
Page 53 of 78
a house of strong materials on the lot.14 He even mortgaged the land to the Development
Bank of the Philippines and to two private persons who acknowledged him as the
owner.15 These acts denote ownership and are not consistent with the private
respondent's claim that the petitioner was only an overseer with mere possessory rights
tolerated by Tabernilla.
It is the policy of this Court to accord proper deference to the factual findings of the
courts below and even to regard them as conclusive where there is no showing that they
have been reached arbitrarily. The exception is where such findings do not conform to
the evidence on record and appear indeed to have no valid basis to sustain their
correctness. As in this case.
The conclusions of the trial court were based mainly on Exhibits "A", "B" and "C", which
had not been formally offered as evidence and therefore should have been totally
disregarded, conformably to the Rules of Court. The trial court also erred when it relied
on the evidence submitted in Civil Case No. 1327 and took judicial notice thereof without
the consent or knowledge of the petitioner, in violation of existing doctrine. Thus
vitiated, the factual findings here challenged are as an edifice built upon shifting sands
and should not have been sustained by the respondent court.
Our own finding is that the private respondent, as plaintiff in the lower court, failed to
prove his claim of ownership over the disputed property with evidence properly
cognizable under our adjudicative laws. By contrast, there is substantial evidence
supporting the petitioner's contrary contentions that should have persuaded the trial
judge to rule in s favor and dismiss the complaint.
WHEREFORE, the petition is GRANTED. The appealed decision is REVERSED and SET
ASIDE, with costs against the private respondent. It is so ordered.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
TITAN CONSTRUCTION CORPORATION, Petitioner,
vs.
UNI-FIELD ENTERPRISES, INC., Respondent.
Appeals; Factual findings of the trial court, particularly when affirmed by the Court
of Appeals, are generally binding on the Supreme Court.—As a rule, only questions of law
may be appealed to the Court by petition for review. The Court is not a trier of facts, its
jurisdiction being limited to errors of law. Moreover, factual findings of the trial court,
particularly when affirmed by the Court of Appeals, are generally binding on this Court.
In this case, the factual findings of the trial court and the Court of Appeals were based on

substantial evidence which were not refuted with contrary proof by petitioner. We thus
find no reason to disturb the factual findings of the trial court and the Court of Appeals.
Pleadings and Practice; Formal Offer of Evidence; Even if the delivery receipts and
sales invoices did not form part of a party’s formal offer of evidence but the same formed
part of the other party’s formal offer of evidence, they could be used as basis for the award
of interest, liquidated damages and attorney’s fees.—While the delivery receipts and sales
invoices did not form part of respondent’s formal offer of evidence, records show that
the delivery receipts and sales invoices formed part of petitioner’s formal offer of
evidence. The delivery receipts and sales invoices expressly stipulated the payment of
interest, liquidated damages, and attorney’s fees in case of overdue accounts and
collection suits. Petitioner did not only bind itself to pay the principal amount, it also
promised to pay (1) interest of 24% per annum on overdue accounts, compounded with
the principal obligations as they accrue; (2) 25% liquidated damages based on the
outstanding total obligation; and (3) 25% attorney’s fees based on the total claim
including liquidated damages. Since petitioner freely entered into the contract, the
stipulations in the contract are binding on petitioner. Thus, the trial court and the Court
of Appeals did not err in using the delivery receipts and sales invoices as basis for the
award of interest, liquidated damages, and attorney’s fees.
Contracts; Contracts of Adhesion; Those who adhere to a contract of adhesion are in
reality free to reject it entirely and if they adhere, they give their consent.—On the
allegation that the delivery receipts and sales invoices are in the nature of contracts of
adhesion, the Court has repeatedly held that contracts of adhesion are as binding as
ordinary contracts. Those who adhere to the contract are in reality free to reject it
entirely and if they adhere, they give their consent. It is true that on some occasions the
Court struck down such contract as void when the weaker party is imposed upon in
dealing with the dominant party and is reduced to the alternative of accepting the
contract or leaving it, completely deprived of the opportunity to bargain on equal
footing.
Same; Damages;  Penalty Clauses; A stipulation on liquidated damages is a penalty
clause where the obligor assumes a greater liability in case of breach of an obligation;
Courts are empowered to reduce the penalty if it is iniquitous or unconscionable.—On the
other hand, the law also allows parties to a contract to stipulate on liquidated damages
to be paid in case of breach. A stipulation on liquidated damages is a penalty clause
Page 54 of 78
where the obligor assumes a greater liability in case of breach of an obligation. The
obligor is bound to pay the stipulated amount without need for proof on the existence
and on the measure of damages caused by the breach. Articles 1229 and 2227 of the
Civil Code empower the courts to reduce the penalty if it is iniquitous or unconscionable.
The determination of whether the penalty is iniquitous or unconscionable is addressed
to the sound discretion of the court and depends on several factors such as the type,
extent, and purpose of the penalty, the nature of the obligation, the mode of breach and
its consequences.
Attorney’s Fees; The Court finds the award of attorney’s fees “equivalent to 25% of
whatever amount is due and payable” to be exorbitant because it includes (1) the principal
of P1,404,114.00, (2) the interest charges of P504,114.00 plus accrued interest charges at
24% per annum compounded yearly reckoned from July 1995 up to the time of full
payment, and, (3) liquidated damages of P324,147.94—moreover, the liquidated damages
and attorney’s fees serve the same purpose, that is, as penalty for breach of the contract.—
The Court notes that respondent had more than adequately protected itself from a
possible breach of contract because of the stipulations on the payment of interest,
liquidated damages, and attorney’s fees. The Court finds the award of attorney’s fees
“equivalent to 25% of whatever amount is due and payable” to be exorbitant because it
includes (1) the principal of P1,404,114.00; (2) the interest charges of P504,114.00 plus
accrued interest charges at 24% per annum compounded yearly reckoned from July
1995 up to the time of full payment; and (3) liquidated damages of P324,147.94.
Moreover, the liquidated damages and the attorney’s fees serve the same purpose, that
is, as penalty for breach of the contract. Therefore, we reduce the award of attorney’s
fees to 25% of the principal obligation, or P351,028.50.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the 7 January 2002 Decision2 and 20 May 2002
Resolution of the Court of Appeals in CA-G.R. CV No. 56816. The Court of Appeals
affirmed the 9 September 1997 Decision3 of the Regional Trial Court of Quezon City,
Branch 224 (trial court) in Civil Case No. Q-95-24170.
The Facts

Petitioner Titan Construction Corporation (petitioner) is engaged in the construction
business, while respondent Uni-Field Enterprises, Inc. 4 (respondent) is engaged in the
business of selling various construction materials.
From 1990 to 1993, petitioner purchased on credit various construction supplies and
materials from respondent. Petitioner’s purchases amounted to ₱7,620,433.12 but
petitioner was only able to pay ₱6,215,795.70, leaving a balance of ₱1,404,637.42. On 19
October 1994, respondent sent a demand letter to petitioner. 5 But the balance remained
unpaid.
On 26 June 1995, respondent filed with the trial court a complaint for collection of sum
of money with damages against petitioner.
In its Answer dated 18 August 1995, petitioner admitted the purchases but disputed the
amount claimed by respondent. Petitioner also interposed a counterclaim and sought to
recover ₱204,527.99 from respondent based on damaged vinyl tiles, non-delivery of
materials, and advances for utility expenses, dues, and insurance premiums on the
condominium unit turned over by petitioner to respondent.
On 9 September 1997, the trial court rendered judgment in favor of respondent. The 9
September 1997 Decision provides:
Accordingly, therefore, judgment is hereby rendered for the plaintiff [respondent] as
against the defendant [petitioner] and ordering the latter to pay the plaintiff
[respondent] the following:
1. The principal amount of ₱1,404,114.00;
2. Interest Charges in the amount of ₱504,114.00 plus accrued interest charges
at 24% per annum compounded yearly reckoned from July, 1995 up to the time
of full payment;
3. Liquidated Damages in the amount of ₱324,147.94;
4. Attorney’s Fees equivalent to 25% of whatever amount is due and payable
and accumulated appearance fees at ₱1,000.00 per hearing; and
5. Costs of suits.
IT IS SO ORDERED.6
Page 55 of 78
Petitioner appealed to the Court of Appeals. In its 7 January 2002 Decision, the Court of
Appeals denied the appeal for lack of merit and affirmed the trial court’s 9 September
1997 Decision.
In its 20 May 2002 Resolution, the Court of Appeals denied petitioner’s motion for
reconsideration. Hence, this petition.
The Ruling of the Court of Appeals
The 7 January 2002 Decision of the Court of Appeals reads:
A careful reading of the records of the case shows that in the answer to the complaint,
the existence of the delivery receipts and invoices were not denied by appellant, rather,
it admitted the transactions subject of the instant case. Clearly, if the damages alleged
are liquidated or stipulated, they are deemed admitted when not specifically denied.
xxxx
Further, appellant cannot question the interest rate on overdue accounts as the same
was provided for in the delivery receipts and sales invoices, which have not been denied
by it. Therefore, the terms and conditions therein have become the law between the
parties, and both are bound by said conditions. Failure of a party to contest the terms
and conditions results in his admission thereof.
Appellant asserts that "nowhere is there any stipulation that plaintiff is entitled to a 24%
interest". This is absurd. The Sales Invoices and Delivery Receipts, contained the
provision that:
"This invoice is the written contract between Unifield Enterprises, [I]nc. and the above-
named customer. This is payable on demand unless otherwise indicated hereinabove.
Interest of 24% per annum will be charged on overdue accounts, compounded with the
outstanding principal obligation as they accrue. Claims or corrections hereto or in the
goods must be communicated in writing to Uni-field Enterprises within two (2) days
from receipt of the goods. x x x Should Unifield Enterprises, Inc. be constrained to effect
collection through Court action and proceedings before the Fiscal’s [sic], said customer
agrees to pay the following additional sums: (1) 25% liquidated damages based on the
outstanding total obligation; (2) 25% attorney’s fees based on the total claim including
said liquidated damages; (3) appearance fees of counsel at ₱500.00 per hearing in
addition to all other court costs and expenses. x x x"

It is emphasized that contracts are perfected by mere consent; the stipulations of the
contract being the law between the parties, courts have no alternative but to enforce
them as they are agreed upon and written, there being no law or public policy against
the stipulated provisions.
Verily, this Court finds no reason to go against the findings of the lower court
considering that the assailed decision was arrived at "after a careful review and perusal
of the evidence presented by both parties in their pleadings filed before the" lower
court.7 (Citations omitted)
The Issues
Petitioner raises the following issues:
1. THE COURT OF APPEALS ERRED IN FINDING LEGAL BASIS FOR [AWARDING]
LIQUIDATED DAMAGES, ATTORNEY’S FEES AND INTEREST IN FAVOR OF
RESPONDENT; and
2. THE COURT OF APPEALS ERRED BY OVERLOOKING CERTAIN FACTS OR
CIRCUMSTANCES OF WEIGHT AND INFLUENCE WHICH IF CONSIDERED
WOULD ALTER THE RESULTS OF THE CASE.8
The Ruling of the Court
Factual Findings of the Trial Court and the Court of Appeals
Bind the Court
Petitioner asks the Court to review the records of the case and re-examine the evidence
presented before the trial court and the Court of Appeals.
As a rule, only questions of law may be appealed to the Court by petition for review. The
Court is not a trier of facts, its jurisdiction being limited to errors of law. 9 Moreover,
factual findings of the trial court, particularly when affirmed by the Court of Appeals, are
generally binding on this Court. 10 In this case, the factual findings of the trial court and
the Court of Appeals were based on substantial evidence which were not refuted with
contrary proof by petitioner. We thus find no reason to disturb the factual findings of the
trial court and the Court of Appeals.
On the Award of Interests, Liquidated Damages, and Attorney’s Fees
Page 56 of 78
Petitioner insists that the trial court and the Court of Appeals had no legal basis to award
interest, liquidated damages, and attorney’s fees because the delivery receipts and sales
invoices, which served as the basis for the award, were not formally offered as evidence
by respondent. Petitioner also alleges that the delivery receipts and sales invoices were
in the nature of contracts of adhesion and petitioner had no option but to accept the
conditions imposed by respondent.
While the delivery receipts and sales invoices did not form part of respondent’s formal
offer of evidence,11 records show that the delivery receipts and sales invoices formed
part of petitioner’s formal offer of evidence.12 The delivery receipts and sales invoices
expressly stipulated the payment of interest, liquidated damages, and attorney’s fees in
case of overdue accounts and collection suits. Petitioner did not only bind itself to pay
the principal amount, it also promised to pay (1) interest of 24% per annum on overdue
accounts, compounded with the principal obligations as they accrue; (2) 25% liquidated
damages based on the outstanding total obligation; and (3) 25% attorney’s fees based
on the total claim including liquidated damages. Since petitioner freely entered into the
contract, the stipulations in the contract are binding on petitioner. Thus, the trial court
and the Court of Appeals did not err in using the delivery receipts and sales invoices as
basis for the award of interest, liquidated damages, and attorney’s fees.
On the allegation that the delivery receipts and sales invoices are in the nature of
contracts of adhesion, the Court has repeatedly held that contracts of adhesion are as
binding as ordinary contracts.13 Those who adhere to the contract are in reality free to
reject it entirely and if they adhere, they give their consent. 14 It is true that on some
occasions the Court struck down such contract as void when the weaker party is
imposed upon in dealing with the dominant party and is reduced to the alternative of
accepting the contract or leaving it, completely deprived of the opportunity to bargain
on equal footing.15
Considering that petitioner and respondent have been doing business from 1990 to
1993 and that petitioner is not a small time construction company, petitioner is
"presumed to have full knowledge and to have acted with due care or, at the very least,
to have been aware of the terms and conditions of the contract." 16 Petitioner was free to
contract the services of another supplier if respondent’s terms were not acceptable.
Moreover, petitioner failed to show that in its transactions with respondent it was the
weaker party or that it was compelled to accept the terms imposed by the respondent. In
fact, petitioner only questioned the terms of the contract after the trial court issued its 9
September 1997 Decision. The Court, therefore, upholds the validity of the contract
between petitioner and respondent.
However, the Court will reduce the amount of attorney’s fees awarded by the trial court
and the Court of Appeals. In this case, aside from the award of ₱324,147.94 as liquidated

damages, the trial court and the Court of Appeals also ordered petitioner to pay
respondent attorney’s fees "equivalent to 25% of whatever amount is due and
payable."17
The law allows a party to recover attorney’s fees under a written agreement. 18 In Barons
Marketing Corporation v. Court of Appeals, the Court ruled that:
[T]he attorney’s fees here are in the nature of liquidated damages and the stipulation
therefor is aptly called a penal clause. It has been said that so long as such stipulation
does not contravene law, morals, or public order, it is strictly binding upon defendant.
The attorney’s fees so provided are awarded in favor of the litigant, not his counsel. 19
On the other hand, the law also allows parties to a contract to stipulate on liquidated
damages to be paid in case of breach.20 A stipulation on liquidated damages is a penalty
clause where the obligor assumes a greater liability in case of breach of an
obligation.21 The obligor is bound to pay the stipulated amount without need for proof
on the existence and on the measure of damages caused by the breach. 22
Articles 122923 and 222724 of the Civil Code empower the courts to reduce the penalty if
it is iniquitous or unconscionable. The determination of whether the penalty is
iniquitous or unconscionable is addressed to the sound discretion of the court and
depends on several factors such as the type, extent, and purpose of the penalty, the
nature of the obligation, the mode of breach and its consequences. 25
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 152375               December 16, 2011
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
SANDIGANBAYAN (FOURTH DIVISION), JOSE L. AFRICA (substituted by his heirs),
MANUEL H. NIETO, JR., FERDINAND E. MARCOS (substituted by his heirs), IMELDA
R. MARCOS, FERDINAND R. MARCOS, JR., JUAN PONCE ENRILE, and POTENCIANO
ILUSORIO (substituted by his heirs), Respondents.
Remedial Law; Distinction between a Final Judgment or Order and an Interlocutory
Order.—Case law has conveniently demarcated the line between a final judgment or
Page 57 of 78
The Court notes that respondent had more than adequately protected itself from a
possible breach of contract because of the stipulations on the payment of interest,
liquidated damages, and attorney’s fees. The Court finds the award of attorney’s fees
"equivalent to 25% of whatever amount is due and payable" to be exorbitant because it
includes (1) the principal of ₱1,404,114.00; (2) the interest charges of ₱504,114.00 plus
accrued interest charges at 24% per annum compounded yearly reckoned from July
1995 up to the time of full payment; and (3) liquidated damages of ₱324,147.94.
Moreover, the liquidated damages and the attorney’s fees serve the same purpose, that
is, as penalty for breach of the contract. Therefore, we reduce the award of attorney’s
fees to 25% of the principal obligation, or ₱351,028.50.
WHEREFORE, we AFFIRM the appealed Decision dated 7 January 2002 of the Court of
Appeals in CA-G.R. CV No. 56816 with MODIFICATION as regards the award of
attorney’s fees. Petitioner Titan Construction Corporation is ordered to pay respondent
Uni-Field Enterprises, Inc. attorney’s fees of ₱351,028.50.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
order and an interlocutory one on the basis of the disposition made. A judgment or
order is considered final if the order disposes of the action or proceeding completely, or
terminates a particular stage of the same action; in such case, the remedy available to an
aggrieved party is appeal. If the order or resolution, however, merely resolves incidental
matters and leaves something more to be done to resolve the merits of the case, the
order is interlocutory and the aggrieved party’s remedy is a petition for certiorari under
Rule 65. Jurisprudence pointedly holds that: “As distinguished from a final order which
disposes of the subject matter in its entirety or terminates a particular proceeding or
action, leaving nothing else to be done but to enforce by execution what has been
determined by the court, an interlocutory order does not dispose of a case completely,
but leaves something more to be adjudicated upon. The term “final” judgment or order
signifies a judgment or an order which disposes of the case as to all the parties,
reserving no further questions or directions for future determination. On the other hand,
a court order is merely interlocutory in character if it leaves substantial proceedings yet
to be had in connection with the controversy. It does not end the task of the court in
adjudicating the parties’ contentions and determining their rights and liabilities as
against each other. In this sense, it is basically provisional in its application.”

Same; An interlocutory order remains under the control of the court until the case is
finally resolved on the merits.—We clarify, too, that an interlocutory order remains under
the control of the court until the case is finally resolved on the merits. The court may
therefore modify or rescind the order upon sufficient grounds shown at any time before
final judgment. In this light, the Sandiganbayan’s 1998 resolution—which merely denied
the adoption of the Bane deposition as part of the evidence in Civil Case No. 0009—
could not have attained finality (in the manner that a decision or final order resolving
the case on the merits does) despite the petitioner’s failure to move for its
reconsideration or to appeal.
Same; The proscription against a second motion for reconsideration is directed
against a judgment or final order; Although a second motion for reconsideration of an
interlocutory order can be denied on the ground that it is a mere “rehash” of the
arguments already passed upon and resolved by the court, it cannot be rejected on the
ground that it is forbidden by the law or by the rules as a prohibited motion.—We also
agree with the petitioner that its 3rd motion cannot be considered as a proscribed third
(actually second) motion for reconsideration of the Sandiganbayan’s 1998 resolution. As
Section 5, Rule 37 of the Rules of Court clearly provides, the proscription against a
second motion for reconsideration is directed against “a judgment or final order.”
Although a second motion for reconsideration of an interlocutory order can be denied
on the ground that it is a mere “rehash” of the arguments already passed upon and
resolved by the court, it cannot be rejected on the ground that it is forbidden by the law
or by the rules as a prohibited motion.
Same; Certiorari; While Section 1, Rule 41 of the Rules of Court prohibits an appeal
from an interlocutory order, the aggrieved party is afforded the chance to question an
interlocutory order through a special civil action of certiorari under Rule 65.—Under
Section 1, Rule 41 of the Rules of Court, an aggrieved party may appeal from a judgment
or final order which completely disposes of a case or from an order that the Rules of
Court declares to be appealable. While this provision prohibits an appeal from an
interlocutory order, the aggrieved party is afforded the chance to question an
interlocutory order through a special civil action of certiorari under Rule 65; the petition
must be filed within sixty days from notice of the assailed judgment, order, resolution, or
denial of a motion for reconsideration.
Same; Same; For a petition for certiorari to prosper, Section 1, Rule 65 of the Rules of
Court requires among others that neither an appeal nor any plain, speedy and adequate
remedy in the ordinary course of law is available to the aggrieved party; Exception.—
While the 1998 resolution is an interlocutory order, as correctly argued by the
petitioner and impliedly conceded by the respondents, the claim that the 1998
resolution should have been immediately questioned by the petitioner on certiorari is
not totally correct as a petition for certiorari is not grounded solely on the issuance of a
disputed interlocutory ruling. For a petition for certiorari to prosper, Section 1, Rule 65
Page 58 of 78
of the Rules of Court requires, among others, that neither an appeal nor any plain,
speedy and adequate remedy in the ordinary course of law is available to the aggrieved
party. As a matter of exception, the writ of certiorari may issue notwithstanding the
existence of an available alternative remedy, if such remedy is inadequate or insufficient
in relieving the aggrieved party of the injurious effects of the order complained of.
Same; Same; Without clear showing that its action was a capricious and whimsical
exercise of judgment affecting its exercise of jurisdiction, the Sandiganbayan’s erroneous
legal conclusion was only an error of judgment or at best an abuse of discretion but not a
grave one.—In light of the above discussions and conclusions, the Sandiganbayan
undoubtedly erred on a question of law in its ruling, but this legal error did not
necessarily amount to a grave abuse of discretion in the absence of a clear showing that
its action was a capricious and whimsical exercise of judgment affecting its exercise of
jurisdiction. Without this showing, the Sandiganbayan’s erroneous legal conclusion was
only an error of judgment, or, at best, an abuse of discretion but not a grave one. For
this reason alone, the petition should be dismissed.
Same; Evidence; Under Section 5, Rule 30, after a party has adduced his direct
evidence in the course of discharging the burden of proof, he is considered to have rested
his case, and is thereafter allowed to offer rebutting evidence only.—Although the word
“rested” nowhere appears in the Rules of Court, ordinary court procedure has inferred it
from an overview of trial sequence under Section 5, Rule 30 (which capsulizes the order
of presentation of a party’s evidence during trial), read in relation to Rule 18 on Pre-
Trial, both of the Rules of Court. Under Section 5, Rule 30, after a party has adduced his
direct evidence in the course of discharging the burden of proof, he is considered to have
rested his case, and is thereafter allowed to offer rebutting evidence only. Whether a
party has rested his case in some measure depends on his manifestation in court on
whether he has concluded his presentation of evidence.
Same; Same; The Rules of Court does not prohibit a party from requesting the court
to allow it to present additional evidence even after it has rested its case.—On the other
end, though, there was nothing intrinsically objectionable in the petitioner’s motion to
reopen its case before the court ruled on its formal offer of evidence. The Rules of Court
does not prohibit a party from requesting the court to allow it to present additional
evidence even after it has rested its case. Any such opportunity, however, for the
ultimate purpose of the admission of additional evidence is already addressed to
the sound discretion of the court. It is from the prism of the exercise of this discretion
that the Sandiganbayan’s refusal to reopen the case (for the purpose of introducing,
“marking and offering” additional evidence) should be viewed. We can declare this
Sandiganbayan action invalid if it had acted with grave abuse of discretion.
Same; Same; Under Section 5 Rule 30, a party who has the burden of proof must
introduce, at the first instance, all the evidence he relies upon and such evidence cannot be

given piecemeal.—Under this rule, a party who has the burden of proof must introduce,
at the first instance, all the evidence he relies upon and such evidence cannot be given
piecemeal. The obvious rationale of the requirement is to avoid injurious surprises to
the other party and the consequent delay in the administration of justice.
Same; Where the evidence is rebuttal in character, whose necessity, for instance,
arose from the shifting of the burden of evidence from one party to the other or where the
evidence sought to be presented is in the nature of newly discovered evidence, the party’s
right to introduce further evidence must be recognized.—A party’s declaration of the
completion of the presentation of his evidence prevents him from introducing further
evidence; but where the evidence is rebuttal in character, whose necessity, for instance,
arose from the shifting of the burden of evidence from one party to the other; or where
the evidence sought to be presented is in the nature of newly discovered evidence, the
party’s right to introduce further evidence must be recognized. Otherwise, the aggrieved
party may avail of the remedy of certiorari.
Same; Civil Procedure; Consolidation of Cases; Consolidation is a procedural device
granted to the court as an aid in deciding how cases in its docket are to be tried so that the
business of the court may be dispatched expeditiously and with economy while providing
justice to the parties.—Consolidation is a procedural device granted to the court as an
aid in deciding how cases in its docket are to be tried so that the business of the
court may be dispatched expeditiously and with economy while providing justice to the
parties. To promote this end, the rule permits the consolidation and a single trial of
several cases in the court’s docket, or the consolidation of issues within those cases.
Same; Same; Deposition; Before a party can make use of the deposition taken at the
trial of a pending action, Section 4, Rule 23 of the Rules of Court does not only require due
observance of its sub-paragraphs (a) to (d), it also requires as a condition for admissibility,
compliance with “the rules on evidence.”—Before a party can make use of the deposition
taken at the trial of a pending action, Section 4, Rule 23 of the Rules of Court does not
only require due observance of its sub-paragraphs (a) to (d); it also requires, as a
condition for admissibility, compliance with “the rules on evidence.” Thus, even Section
4, Rule 23 of the Rules of Court makes an implied reference to Section 47, Rule 130 of the
Rules of Court before the deposition may be used in evidence. By reading Rule 23 in
isolation, the petitioner failed to recognize that the principle conceding admissibility to a
deposition under Rule 23 should be consistent with the rules on evidence under Section
47, Rule 130. In determining the admissibility of the Bane deposition, therefore, reliance
cannot be given on one provision to the exclusion of the other; both provisions must
be considered. This is particularly true in this case where the evidence in the prior
proceeding does not simply refer to a witness’ testimony in open court but to a
deposition taken under another and farther jurisdiction.
Page 59 of 78
Same; Same; Same; Depositions are not meant as substitute for the actual testimony
in open court of a party or witness.—A deposition is chiefly a mode of discovery whose
primary function is to supplement the pleadings for the purpose of disclosing the real
points of dispute between the parties and affording an adequate factual basis during the
preparation for trial. Since depositions are principally made available to the parties as a
means of informing themselves of all the relevant facts, depositions are not meant as
substitute for the actual testimony in open court of a party or witness . Generally,
the deponent must be presented for oral examination in open court at the trial or
hearing. This is a requirement of the rules on evidence under Section 1, Rule 132 of the
Rules of Court.
Same; Same; Same; Under certain conditions and for certain limited purposes laid
down in Section 4, Rule 23 of the Rules of Court, the deposition may be used without the
deponent being actually called to the witness stand.—That opportunity for cross-
examination was afforded during the taking of the deposition alone is no
argument, as the opportunity for cross-examination must normally be accorded a
party at the time that the testimonial evidence is actually presented against him
during the trial or hearing of a case. However, under certain conditions and for
certain limited purposes laid down in Section 4, Rule 23 of the Rules of Court, the
deposition may be used without the deponent being actually called to the witness stand.
Same; Same; Same; Section 47, Rule 130 explicitly requires inter alia, for the
admissibility of a former testimony or deposition that the adverse party must have had an
opportunity to cross-examine the witness or the deponent in the prior proceeding.—
Section 47, Rule 130 of the Rules of Court is an entirely different provision. While
a former testimony or deposition appears under the Exceptions to the Hearsay Rule, the
classification of former testimony or deposition as an admissible hearsay is not
universally conceded. A fundamental characteristic of hearsay evidence is the adverse
party’s lack of opportunity to cross-examine the out-of-court declarant. However,
Section 47, Rule 130 explicitly requires, inter alia, for the admissibility of a former
testimony or deposition that the adverse party must have had an opportunity to cross-
examine the witness or the deponent in the prior proceeding.
Same; Same; Same; Requisites for the admission of a testimony or deposition given at
a former case or proceeding.—Section 47, Rule 130 of the Rules of Court lays down the
following requisites for the admission of a testimony or deposition given at a former
case or proceeding. 1. The testimony or deposition of a witness deceased or otherwise
unable to testify; 2. The testimony was given in a former case or proceeding, judicial or
administrative; 3. Involving the same parties; 4. Relating to the same matter; 5. The
adverse party having had the opportunity to cross-examine him.
Same; Same; Same; The phrase “unable to testify” appearing in both Rule 23 and
Rule 130 of the Rules of Court refers to a physical inability to appear at the witness stand

and to give a testimony; Where the deposition is taken not for discovery purposes, but to
accommodate the deponent, then the deposition should be rejected in evidence.—The
phrase “unable to testify” appearing in both Rule 23 and Rule 130 of the Rules of Court
refers to a physical inability to appear at the witness stand and to give a testimony.
Hence notwithstanding the deletion of the phrase “out of the Philippines,” which
previously appeared in Section 47, Rule 130 of the Rules of Court, absence from
jurisdiction—the petitioner’s excuse for the non-presentation of Bane in open court—
may still constitute inability to testify under the same rule. This is not to say, however,
that resort to deposition on this instance of unavailability will always be upheld.  Where
the deposition is taken not for discovery purposes, but to accommodate the
deponent, then the deposition should be rejected in evidence.
Same; Same; Same; The witness himself, if available, must be produced in court as if
he were testifying de novo since his testimony given at the former trial is mere hearsay.—
Although the testimony of a witness has been given in the course of a former proceeding
between the parties to a case on trial, this testimony alone is not a ground for its
admission in evidence. The witness himself, if available, must be produced in court as if
he were testifying de novo since his testimony given at the former trial is mere hearsay.
The deposition of a witness, otherwise available, is also inadmissible for the same
reason.
Same; Witnesses; Cross-Examination; The function of cross-examination is to test the
truthfulness of the statements of a witness made on direct examination; this right is
available of course, at the taking of deposition, as well as on the examination of witnesses
at the trial.—The function of cross-examination is to test the truthfulness of the
statements of a witness made on direct examination. The opportunity of cross-
examination has been regarded as an essential safeguard of the accuracy and
completeness of a testimony. In civil cases, the right of cross-examination is absolute,
and is not a mere privilege of the party against whom a witness may be called.  This right
is available, of course, at the taking of depositions, as well as on the examination of
witnesses at the trial. The principal justification for the general exclusion of hearsay
statements and for the admission, as an exception to the hearsay rule, of reported
testimony taken at a former hearing where the present adversary was afforded the
opportunity to cross-examine, is based on the premise that the opportunity of cross-
examination is an essential safeguard against falsehoods and frauds.
Same; Evidence; Judicial Notice; In adjudicating a case on trial, courts are not
authorized to take a judicial notice of the contents of the records of other cases, even when
such cases have been tried or are pending in the same court and notwithstanding that both
cases may have been tried or are actually pending before the same judge; Rule admits of
exceptions.—In adjudicating a case on trial, generally, courts are not authorized to take
judicial notice of the contents of the records of other cases, even when such cases have
been tried or are pending in the same court, and notwithstanding that both cases may
Page 60 of 78
have been tried or are actually pending before the same judge. This rule though admits
of exceptions. As a matter of convenience to all the parties, a court may properly treat all
or any part of the original record of a case filed in its archives as read into the record of a
case pending before it, when, with the knowledge of, and absent an objection
from, the adverse party, reference is made to it for that purpose, by name and
number or in some other manner by which it is sufficiently designated; or when the
original record of the former case or any part of it, is actually withdrawn from the
archives at the court’s direction, at the request or with the consent of the parties,
and admitted as a part of the record of the case then pending. Courts must also take
judicial notice of the records of another case or cases, where sufficient basis exists in the
records of the case before it, warranting the dismissal of the latter case.
DECISION
BRION, J.:
Before us is the petition for certiorari1 filed by the Republic of the Philippines
(petitioner) to set aside the February 7, 2002 resolution (2002 resolution)2 of the
Sandiganbayan3 denying the petitioner’s Motion to Admit Supplemental Offer of Evidence
(Re: Deposition of Maurice V. Bane) (3rd motion).
THE ANTECEDENTS
On July 22, 1987, the petitioner Republic of the Philippines, through the Presidential
Commission on Good Government (PCGG), filed a complaint (docketed as Civil Case No.
0009) against Jose L. Africa, Manuel H. Nieto, Jr., Ferdinand E. Marcos, Imelda R. Marcos,
Ferdinand R. Marcos, Jr., Juan Ponce Enrile, and Potenciano Ilusorio
(collectively, the respondents) for reconveyance, reversion, accounting, restitution, and
damages before the Sandiganbayan. The petitioner alleged, inter alia, that the
respondents illegally manipulated the purchase of the major shareholdings of Cable and
Wireless Limited in Eastern Telecommunications Philippines, Inc. (ETPI), which
shareholdings respondents Jose Africa and Manuel Nieto, Jr. held for themselves and,
through their holdings and the corporations they organized, beneficially for respondents
Ferdinand E. Marcos and Imelda R. Marcos.4
Civil Case No. 0009 is the main case subject of the present petition. Victor Africa (Africa),
son of the late Jose L. Africa, was not impleaded in and so is plainly not a party to Civil
Case No. 0009.5
Civil Case No. 0009 spawned numerous incidental cases, 6 among them, Civil Case No.
0130.7 The present respondents were not made parties either in Civil Case No. 0130.

I. Civil Case No. 0130
In the August 7, 1991 PCGG-conducted ETPI stockholders meeting, a PCGG-controlled
board of directors was elected. Later, the registered ETPI stockholders convened a
special stockholders meeting wherein another set of board of directors was elected. As a
result, two sets of ETPI board and officers were elected.8
Thereafter, Africa, as an ETPI stockholder, filed a petition for certiorari, with prayer for a
temporary restraining order/preliminary injunction with the Sandiganbayan (docketed
as Civil Case No. 0130), seeking to nullify the August 5, 1991 and August 9, 1991 Orders
of the PCGG. These Orders directed Africa:
[T]o account for his sequestered shares in ETPI and to cease and desist from exercising
voting rights on the sequestered shares in the special stockholders’ meeting to be held
on August 12, 1991, from representing himself as a director, officer, employee or agent
of ETPI, and from participating, directly or indirectly[,] in the management of ETPI. 9
During the pendency of Africa’s petition, Civil Case No. 0130, Africa filed a motion with
the Sandiganbayan, alleging that since January 29, 1988 the PCGG had been "illegally
‘exercising’ the rights of stockholders of ETPI,"10 especially in the election of the
members of the board of directors. Africa prayed for the issuance of an order for the
"calling and holding of [ETPI] annual stockholders meeting for 1992 under the [c]ourt’s
control and supervision and prescribed guidelines." 11
In its November 13, 1992 resolution, the Sandiganbayan favored Africa’s motion in this
wise:
WHEREFORE, it is ordered that an annual stockholders meeting of the [ETPI], for 1992
be held on Friday, November 27, 1992, at 2:00 o’clock in the afternoon, at the ETPI
Board Room, Telecoms Plaza, 7th Floor, 316 Gil J. Puyat Avenue, Makati, Metro Manila. x
x x The stockholders meeting shall be conducted under the supervision and control of
this Court, through Mr. Justice Sabino R. de Leon, Jr. [O]nly the registered owners, their
duly authorized representatives or their proxies may vote their corresponding shares.
The following minimum safeguards must be set in place and carefully maintained until
final judicial resolution of the question of whether or not the sequestered shares of stock
(or in a proper case the underlying assets of the corporation concerned) constitute ill-
gotten wealth[.]12
The PCGG assailed this resolution before this Court via a petition for certiorari docketed
as G.R. No. 10778913 (PCGG’s petition), imputing grave abuse of discretion on the
Page 61 of 78
Sandiganbayan for holding, inter alia, that the registered stockholders of ETPI had the
right to vote.14 In our November 26, 1992 Resolution, we enjoined the Sandiganbayan
from implementing its assailed resolution.
In the meantime, in an April 12, 1993 resolution, the Sandiganbayan ordered the
consolidation of Civil Case No. 0130, among others, with Civil Case No. 0009, with the
latter as the main case and the former merely an incident. 15
During the pendency of PCGG’s petition (G.R. No. 107789), the PCGG filed with this Court
a "Very Urgent Petition for Authority to Hold Special Stockholders’ Meeting for [the] Sole
Purpose of Increasing [ETPI’s] Authorized Capital Stock" (Urgent Petition). In our May 7,
1996 Resolution, we referred this Urgent Petition to the Sandiganbayan for reception of
evidence and immediate resolution.16 The Sandiganbayan included the Urgent Petition in
Civil Case No. 0130.17
In the proceedings to resolve the Urgent Petition, the testimony of Mr. Maurice V. Bane
(former director and treasurer-in-trust of ETPI) was taken– at the petitioner’s instance
and after serving notice of the deposition-taking on the respondents 18 – on October 23
and 24, 1996 by way of deposition upon oral examination (Bane deposition) before
Consul General Ernesto Castro of the Philippine Embassy in London, England.
Invoking Section 1, Rule 24 (of the old Rules of Court), purportedly allowing the
petitioner to depose Bane without leave of court, i.e., as a matter of right after the
defendants have filed their answer, the notice stated that "[t]he purpose of the
deposition is for [Bane] to identify and testify on the facts set forth in his affidavit 19 x x x
so as to prove the ownership issue in favor of [the petitioner] and/or establish the prima
facie factual foundation for sequestration of [ETPI’s] Class A stock in support of the
[Urgent Petition]."20 The notice also states that the petitioner shall use the Bane
deposition "in evidence… in the main case of Civil Case No. 0009." 21 On the scheduled
deposition date, only Africa was present and he cross-examined Bane.
On December 13, 1996, the Sandiganbayan resolved the Urgent Petition by granting
authority to the PCGG (i) "to cause the holding of a special stockholders’ meeting of ETPI
for the sole purpose of increasing ETPI’s authorized capital stock" and (ii) "to vote
therein the sequestered Class ‘A’ shares of stock."22 Thus, a special stockholders meeting
was held, as previously scheduled, on March 17, 1997 and the increase in ETPI’s
authorized capital stock was "unanimously approved." 23 From this ruling, Africa went to
this Court via a petition for certiorari24 docketed as G.R. No. 147214 (Africa’s petition).
We jointly resolved the PCGG’s and Africa’s petitions, and ruled:
 Page 62 of 78

This Court notes that, like in Africa’s motion to hold a stockholders meeting (to elect a (5) Mr. Apolinario K. Medina - x x x
board of directors), the Sandiganbayan, in the PCGG’s petition to hold a stockholders
meeting (to amend the articles of incorporation to increase the authorized capital stock), (6) Mr. Potenciano A. Roque – x x x
again failed to apply the two-tiered test. On such determination hinges the validity of the
votes cast by the PCGG in the stockholders meeting of March 17, 1997. This lapse by the (7) Caesar Parlade - x x x
Sandiganbayan leaves this Court with no other choice but to remand these questions to
it for proper determination.
IIa. Motion to Admit the Bane Deposition
xxxx
At the trial of Civil Case No. 0009, the petitioner filed a Motion27 (1st motion), stating that
–
WHEREFORE, this Court Resolved to REFER the petitions at bar to the Sandiganbayan
for reception of evidence to determine whether there is a prima facie evidence showing
1. In the hearings of the incidents of [Civil Case No. 0009], i.e., Civil Case Nos.
that the sequestered shares in question are ill-gotten and there is an imminent danger of
0048, 0050, 0130, 014628 the following witnesses were presented therein:
dissipation to entitle the PCGG to vote them in a stockholders meeting to elect the ETPI
Board of Directors and to amend the ETPI Articles of Incorporation for the sole purpose
of increasing the authorized capital stock of ETPI. a. Cesar O.V. Parlade

The Sandiganbayan shall render a decision thereon within sixty (60) days from receipt b. Maurice Bane
of this Resolution and in conformity herewith.
c. Evelyn Singson
II. Civil Case No. 0009
d. Leonorio Martinez
Although Civil Case No. 0009 was filed on July 22, 1987, it was only on November 29,
1996 and March 17, 1997 that the first pre-trial conference was scheduled and e. Ricardo Castro; and
concluded.25
f. Rolando Gapud
In its Pre-Trial Brief26 dated August 30, 1996, the petitioner offered to present the
following witnesses: 2. [The petitioner] wishes to adopt in [Civil Case No. 0009] their testimonies and
the documentary exhibits presented and identified by them, since their
WITNESSES TO BE PRESENTED AND A BRIEF DESCRIPTION OF THEIR TESTIMONIES testimonies and the said documentary exhibits are very relevant to prove the
case of the [petitioner] in [Civil Case No. 0009].
(1) Maurice V. Bane – representative of Cable and Wireless Limited (C & W) at
the time ETPI was organized. 3. The adverse parties in the aforementioned incidents had the opportunity to
cross-examine them.
xxxx
The respondents filed their respective Oppositions to the 1st motion; 29 in turn, the
(2) Mr. Manuel H. Nieto – x x x petitioner filed a Common Reply30 to these Oppositions.

(3) Ms. Evelyn Singson – x x x On April 1, 1998, the Sandiganbayan31 promulgated a resolution32 (1998 resolution)
denying the petitioner’s 1st motion, as follows:
(4) Mr. Severino P. Buan, Jr. – x x x

Wherefore, the [petitioner’s] Motion x x x is –
1. partly denied insofar as [the petitioner] prays therein to adopt the
testimonies on oral deposition of Maurice V. Bane and Rolando Gapud as part of
its evidence in Civil Case No. 0009 for the reason that said deponents
according to the [petitioner] are not available for cross-examination in
this Court by the [respondents]. (emphasis added)
2. partly Granted, in the interest of speedy disposition of this long pending case,
insofar as plaintiff prays therein to adopt certain/particular testimonies of
Cesar O. Parlade, Evelyn Singson, Leoncio Martinez, and Ricardo Castro and
documentary exhibits which said witnesses have identified in incident Civil Case
Nos. xxx 0130 xxx, subject to the following conditions :
1. xxx
2. xxx
3. That the said witnesses be presented in this Court so that they can be
cross-examined on their particular testimonies in incident Civil Cases
xxx [by the respondents].
IIb. Urgent Motion and/or Request for Judicial Notice
The petitioner did not in any way question the 1998 resolution, and instead made its
Formal Offer of Evidence on December 14, 1999. 33 Significantly, the Bane deposition was
not included as part of its offered exhibits. Rectifying the omission, the petitioner filed
an Urgent Motion and/or Request for Judicial Notice34 (2nd motion) dated February 21,
2000, with the alternative prayer that:
1. An order forthwith be issued re-opening the plaintiff’s case and setting the
same for trial any day in April 2000 for the sole purpose of introducing
additional evidence and limited only to the marking and offering of the [Bane
deposition] which already forms part of the records and used in Civil Case No.
0130 x x x;
2. In the alternative, x x x the [Sandiganbayan] to take judicial notice of the facts
established by the [Bane deposition], together with the marked exhibits
appended thereto. [emphasis ours]
Page 63 of 78
On August 21, 2000, the Sandiganbayan promulgated a resolution35 (2000 resolution)
denying the petitioner’s 2nd motion:
Judicial notice is found under Rule 129 which is titled "What Need Not Be Proved."
Apparently, this provision refers to the Court’s duty to consider admissions made by the
parties in the pleadings, or in the course of the trial or other proceedings in resolving
cases before it. The duty of the Court is mandatory and in those cases where it is
discretionary, the initiative is upon the Court. Such being the case, the Court finds the
Urgent Motion and/or Request for Judicial Notice as something which need not be acted
upon as the same is considered redundant.
On the matter of the [Bane deposition], [its] admission is done through the ordinary
formal offer of exhibits wherein the defendant is given ample opportunity to raise
objection on grounds provided by law. Definitely, it is not under Article (sic) 129 on
judicial notice. [Emphasis ours]
On November 6, 2000 and on several dates thereafter, the respondents separately filed
their respective demurrers to evidence.36 On the other hand, the petitioner moved for
the reconsideration of the 2000 resolution, but was rebuffed by the Sandiganbayan in its
April 3, 2001 resolution37 (2001 resolution).
IIc. Motion to Admit Supplemental Offer of
Evidence (Re: Deposition of Maurice Bane)
On November 16, 2001, the petitioner filed its 3rd Motion, seeking once more the
admission of the Bane deposition.38 On February 7, 2002 (pending resolution of the
respondents’ demurrers to evidence),39 the Sandiganbayan promulgated the assailed
2002 resolution,40 denying the petitioner’s 3rd motion. The Sandiganbayan ruled:
But in the court’s view, it is not really a question of whether or not plaintiff has already
rested its case as to obviate the further presentation of evidence. It is not even a
question of whether the non-appearing defendants are deemed to have waived their
right to cross-examine Bane as to qualify the admission of the deposition sans such
cross-examination. Indeed, We do not see any need to dwell on these matters in view of
this Court’s Resolution rendered on April 1, 1998 which already denied the introduction
in evidence of Bane’s deposition and which has become final in view of plaintiff’s
failure to file any motion for reconsideration or appeal within the 15-day
reglementary period. Rightly or wrongly, the resolution stands and for this court to
grant plaintiff’s motion at this point in time would in effect sanction plaintiff’s disregard
for the rules of procedure. Plaintiff has slept on its rights for almost two years and it was
only in February of 2000 that it sought to rectify its ineptitude by filing a motion to
reopen its case as to enable it to introduce and offer Bane’s deposition as additional

evidence, or in the alternative for the court to take judicial notice of the allegations of the
deposition. But how can such a motion be granted when it has been resolved as early as
1998 that the deposition is inadmissible. Without plaintiff having moved for
reconsideration within the reglementary period, the resolution has attained
finality and its effect cannot be undone by the simple expedient of filing a motion, which
though purporting to be a novel motion, is in reality a motion for reconsideration of
this court’s 1998 ruling. [emphases ours]
The resolution triggered the filing of the present petition.
THE PETITION
The petitioner filed the present petition claiming that the Sandiganbayan committed
grave abuse of discretion:
I.
x x x IN HOLDING THAT ITS INTERLOCUTORY ORDER IN 1998 HAD
BECOME FINAL.
II.
x x x IN x x x REFUSING TO ADMIT THE BANE DEPOSITION –WHICH WAS
ALREADY ADMITTED AS EVIDENCE IN AN INCIDENT CASE (CIVIL CASE NO.
0130) – AS PART OF PETITIONER’S EVIDENCE IN THE MAIN x x x CASE
(CIVIL CASE NO. 0009).
III.
x x x IN REFUSING TO ADMIT A HIGHLY RELEVANT AND IMPORTANT PIECE
OF EVIDENCE FOR THE PETITIONER ON THE BASIS OF FLIMSY AND
TENUOUS TECHNICAL GROUNDS.
The petitioner41 argues that the 1998 resolution of the Sandiganbayan is merely an
interlocutory order; thus, the petitioner’s failure to question this 1998 resolution could
not have given it a character of "finality" so long as the main case remains pending. 42 On
this basis, the petitioner concludes that the Sandiganbayan’s denial of its 3rd motion was
plainly tainted with grave abuse of discretion.
On the issue of the Sandiganbayan’s refusal (in its 2002 resolution) either to take judicial
notice of or to admit the Bane deposition as part of its evidence, the petitioner asserts
Page 64 of 78
that Civil Case No. 0130 (where the Bane deposition was originally taken, introduced
and admitted in evidence) is but a "child" of the "parent" case, Civil Case No. 0009; under
this relationship, evidence offered and admitted in any of the "children" cases should be
considered as evidence in the "parent" case.
Lastly, the petitioner claims that given the crucial importance of the Bane deposition, the
Sandiganbayan should not have denied its admission on "flimsy grounds," considering
that:
1. It was also already stated in the notice (of the taking of the Bane deposition)
that it would be used as evidence in Civil Case No. 0009. Notices having been
duly served on all the parties concerned, they must accordingly be deemed to
have waived their right to cross-examine the witness when they failed to show
up.
2. The Bane deposition was a very vital cog in the case of the petitioner relative
to its allegation that the respondents’ interest in ETPI and related firms
properly belongs to the government.
3. The non-inclusion of the Bane deposition in the petitioner’s formal offer of
evidence was obviously excusable considering the period that had lapsed from
the time the case was filed and the voluminous records that the present case has
generated.43
THE RESPONDENTS’ COMMENTS
and THE PETITIONER’S REPLY
In the respondents’ Comments44 (filed in compliance with our Resolution of April 10,
200245 ), they claim that the present petition was filed out of time - i.e., beyond the 60-
day reglementary period prescribed under Section 4, Rule 65 of the Rules of
Court.46 This assertion proceeds from the view that the petitioner’s 3rd motion, being a
mere rehash of similar motions earlier filed by the petitioner, likewise simply assails the
Sandiganbayan’s 1998 resolution. Along the same line, they posit that the petitioner’s
3rd motion actually partakes of a proscribed third motion for reconsideration of the
Sandiganbayan’s 1998 resolution.47 They likewise assert, on the assumption that the
1998 resolution is interlocutory in character, that the petitioner’s failure to contest the
resolution by way of certiorari within the proper period gave the 1998 resolution a
character of "finality."
The respondents further claim that after a party has rested its case, the admission of a
supplemental offer of evidence requires the reopening of the case at the discretion of the
trial court; the Sandiganbayan simply exercised its sound discretion in refusing to
 Page 65 of 78

reopen the case since the evidence sought to be admitted was "within the knowledge of On the basis of the pleadings, we summarize the pivotal issues for our resolution, as
the [petitioner] and available to [it] before [it] rested its case." 48 The respondents also follows:
advert to the belated filing of the petitioner’s 3rd motion – i.e., after the respondents had
filed their respective demurrers to evidence. 1. Whether the petition was filed within the required period.

On the petitioner’s claim of waiver, the respondents assert that they have not waived 2. Whether the Sandiganbayan committed grave abuse of discretion –
their right to cross-examine the deponent; the Sandiganbayan recognized this right in its
1998 resolution and the petitioner never questioned this recognition. They also assert i. In holding that the 1998 resolution has already attained finality;
that the allegations in the Bane deposition cannot be a proper subject of judicial notice
under Rule 129 of the Rules of Court. The respondents lastly submit that the Bane
ii. In holding that the petitioner’s 3rd motion partakes of a prohibited
deposition is inadmissible in evidence because the petitioner failed to comply with the
motion for reconsideration;
requisites for admission under Section 47, Rule 130 of the Rules of Court.

iii. In refusing to re-open the case given the critical importance of the
In its Reply,49 the petitioner defends the timeliness of the present petition by arguing
Bane deposition to the petitioner’s cause; and
that a party may opt to wait out and collect a pattern of questionable acts before
resorting to the extraordinary remedy of certiorari. The petitioner stresses that it filed
the 3rd motion precisely because of the Sandiganbayan’s 2000 resolution, which held iv. In refusing to admit the Bane deposition notwithstanding the prior
that the admission of the Bane deposition should be done through the ordinary formal consolidation of Civil Case No. 0009 and Civil Case No. 0130.
offer of evidence. Thus, the Sandiganbayan seriously erred in considering the
petitioner’s 3rd motion as a proscribed motion for reconsideration. The petitioner 3. Whether the Bane deposition is admissible under -
generally submits that the dictates of substantial justice should have guided the
Sandiganbayan to rule otherwise. i. Rule 23, Section 4, par. (c) alone or in relation to Section 47, Rule 130
of the Rules of Court; and
The petitioner also clarifies that it has not yet rested its case although it has filed a
formal offer of evidence. A party normally rests his case only after the admission of the ii. The principle of judicial notice.
pieces of evidence he formally offered; before then, he still has the opportunity to
present further evidence to substantiate his theory of the case should the court reject THE COURT’S RULING
any piece of the offered evidence.50
We deny the petition for lack of merit.
The petitioner further maintains that the mere reasonable opportunity to cross-examine
the deponent is sufficient for the admission of the Bane deposition considering that the
I. Preliminary Considerations
deponent is not an ordinary witness who can be easily summoned by our courts in light
of his foreign residence, his citizenship, and his advanced age. The petitioner asserts that
Rule 24 (now Rule 23), and not Section 47, Rule 130, of the Rules of Court should apply I (a). The interlocutory nature of the Sandiganbayan’s 1998 resolution.
to the present case, as explicitly stated in the notice of the deposition-taking.
In determining the appropriate remedy or remedies available, a party aggrieved by a
To date, respondents Imelda Marcos and the heirs of Potenciano Ilusorio have yet to file court order, resolution or decision must first correctly identify the nature of the order,
their respective comments on the petition. Given the time that had lapsed since we resolution or decision he intends to assail.51 In this case, we must preliminarily
required their comments, we resolve to dispense with the filing of these comments and determine whether the 1998 resolution is "final" or "interlocutory" in nature.
to consider this petition submitted for decision.
Case law has conveniently demarcated the line between a final judgment or order and an
THE ISSUES interlocutory one on the basis of the disposition made. 52 A judgment or order is

considered final if the order disposes of the action or proceeding completely, or
terminates a particular stage of the same action; in such case, the remedy available to an
aggrieved party is appeal. If the order or resolution, however, merely resolves incidental
matters and leaves something more to be done to resolve the merits of the case, the
order is interlocutory53 and the aggrieved party’s remedy is a petition
for certiorari under Rule 65. Jurisprudence pointedly holds that:
As distinguished from a final order which disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving nothing else to be done but to
enforce by execution what has been determined by the court, an interlocutory order
does not dispose of a case completely, but leaves something more to be adjudicated
upon. The term "final" judgment or order signifies a judgment or an order which
disposes of the case as to all the parties, reserving no further questions or directions for
future determination.
On the other hand, a court order is merely interlocutory in character if it leaves
substantial proceedings yet to be had in connection with the controversy. It does not end
the task of the court in adjudicating the parties’ contentions and determining their rights
and liabilities as against each other. In this sense, it is basically provisional in its
application.54 (emphasis supplied)
Under these guidelines, we agree with the petitioner that the 1998 resolution is
interlocutory. The Sandiganbayan’s denial of the petitioner’s 1st motion through the
1998 Resolution came at a time when the petitioner had not even concluded the
presentation of its evidence. Plainly, the denial of the motion did not resolve the merits
of the case, as something still had to be done to achieve this end.
We clarify, too, that an interlocutory order remains under the control of the court until
the case is finally resolved on the merits. The court may therefore modify or rescind the
order upon sufficient grounds shown at any time before final judgment. 55 In this light,
the Sandiganbayan’s 1998 resolution – which merely denied the adoption of the Bane
deposition as part of the evidence in Civil Case No. 0009 – could not have attained
finality (in the manner that a decision or final order resolving the case on the merits
does) despite the petitioner’s failure to move for its reconsideration or to appeal. 56
I (b). The 3rd motion was not prohibited by the Rules.
We also agree with the petitioner that its 3rd motion cannot be considered as a
proscribed third (actually second) motion for reconsideration of the Sandiganbayan’s
1998 resolution. As Section 5, Rule 37 of the Rules of Court clearly provides, the
proscription against a second motion for reconsideration is directed against "a judgment
or final order." Although a second motion for reconsideration of an interlocutory order
Page 66 of 78
can be denied on the ground that it is a mere "rehash" of the arguments already passed
upon and resolved by the court, it cannot be rejected on the ground that it is forbidden
by the law or by the rules as a prohibited motion.57
I (c). The 1998 resolution was not ripe for a petition for certiorari.
Under Section 1, Rule 41 of the Rules of Court, an aggrieved party may appeal from a
judgment or final order which completely disposes of a case or from an order that the
Rules of Court declares to be appealable. While this provision prohibits an appeal from
an interlocutory order, the aggrieved party is afforded the chance to question an
interlocutory order through a special civil action of certiorari under Rule 65; the petition
must be filed within sixty days from notice of the assailed judgment, order, resolution, or
denial of a motion for reconsideration.
On the premise that the 1998 resolution is interlocutory in nature, the respondents
insist that the 60-day period for filing a petition for certiorari should be reckoned from
the petitioner’s notice of the Sandiganbayan’s 1998 resolution. They argue that since
this ruling had long been rendered by the court, the petitioner’s subsequent filing of
similar motions was actually a devious attempt to resuscitate the long-denied admission
of the Bane deposition.
We do not find the respondents’ submission meritorious. While the 1998 resolution is
an interlocutory order, as correctly argued by the petitioner and impliedly conceded by
the respondents, the claim that the 1998 resolution should have been immediately
questioned by the petitioner on certiorari is not totally correct as a petition
for certiorari is not grounded solely on the issuance of a disputed interlocutory
ruling.58 For a petition for certiorari to prosper, Section 1, Rule 65 of the Rules of Court
requires, among others, that neither an appeal nor any plain, speedy and
adequate remedy in the ordinary course of law is available to the aggrieved party. As a
matter of exception, the writ of certiorari may issue notwithstanding the existence of an
available alternative remedy, if such remedy is inadequate or insufficient in relieving the
aggrieved party of the injurious effects of the order complained of. 59
We note that at the time of its 1st motion in Civil Case No. 0009, the petitioner had not
yet concluded the presentation of its evidence, much less made any formal offer of
evidence. At this stage of the case, the prematurity of using the extraordinary remedy
of certiorari to question the admission of the Bane deposition is obvious. After the denial
of the 1st motion, the plain remedy available to the petitioner was to move for a
reconsideration to assert and even clarify its position on the admission of the Bane
deposition. The petitioner could introduce 60 anew the Bane deposition and include this
as evidence in its formal offer61 – as the petitioner presumably did in Civil Case No. 0130.

Thus, at that point, the case was not yet ripe for the filing of a petition for certiorari, and
the denial of the 1st motion could not have been the reckoning point for the period of
filing such a petition.
II. The Sandiganbayan’s ruling on the finality of its 1998 resolution was legally
erroneous but did not constitute grave abuse of discretion
In light of the above discussions and conclusions, the Sandiganbayan undoubtedly erred
on a question of law in its ruling, but this legal error did not necessarily amount to a
grave abuse of discretion in the absence of a clear showing that its action was a
capricious and whimsical exercise of judgment affecting its exercise of
jurisdiction.62 Without this showing, the Sandiganbayan’s erroneous legal conclusion
was only an error of judgment, or, at best, an abuse of discretion but not a grave
one. For this reason alone, the petition should be dismissed.
Despite this conclusion, however, we opt not to immediately dismiss the petition in light
of the unique circumstances of this case where the petitioner cannot entirely be faulted
for not availing of the remedy at the opportune time, and where the case, by its nature, is
undoubtedly endowed with public interest and has become a matter of public
concern.63 In other words, we opt to resolve the petition on the merits to lay the issues
raised to rest and to avoid their recurrence in the course of completely resolving the
merits of Civil Case No. 0009.
Although the word "rested" nowhere appears in the Rules of Court, ordinary court
procedure has inferred it from an overview of trial sequence under Section 5, Rule 30
(which capsulizes the order of presentation of a
party’s evidence during trial), read in relation to Rule 18 on Pre-Trial, 64 both of the Rules
of Court. Under Section 5, Rule 30, after a party has adduced his direct evidence in the
course of discharging the burden of proof,65 he is considered to have rested his case, and
is thereafter allowed to offer rebutting evidence only.66 Whether a party has rested his
case in some measure depends on his manifestation in court on whether he has
concluded his presentation of evidence.67
In its second and third motions, respectively, the petitioner expressly admitted that "due
to oversight, [the petitioner] closed and rested its case";68 and that it "had terminated the
presentation of its evidence in x x x Civil Case No. 0009."69 In the face of these
categorical judicial admissions,70 the petitioner cannot suddenly make an about-face
and insist on the introduction of evidence out of the usual order. Contrary to the
petitioner’s assertion, the resting of its case could not have been conditioned on the
admission of the evidence it formally offered. To begin with, the Bane deposition, which
is the lone piece of evidence subject of this present petition, was not among the pieces of
Page 67 of 78
evidence included in its formal offer of evidence and thus could not have been admitted
or rejected by the trial court.
The Court observes with interest that it was only in this present petition
for certiorari that the petitioner had firmly denied having rested its case. 71 Before then,
the petitioner never found it appropriate to question on certiorari the Sandiganbayan’s
denial of its 2nd motion which prayed, inter alia, for the reopening of the case. This is a
fatal defect in the petitioner’s case.
Although the denial of the petitioner’s first motion did not necessitate an immediate
recourse to the corrective writ of certiorari, the denial of the 2nd motion dictated a
different course of action. The petitioner’s non-observance of the proper procedure for
the admission of the Bane deposition, while seemingly innocuous, carried fatal
implications for its case. Having been rebuffed on its first attempt to have the Bane
deposition adopted in Civil Case No. 0009, and without seeking reconsideration of the
denial, the petitioner presented its other pieces of evidence and eventually rested its
case. This time, the petitioner forgot about the Bane deposition and so failed to include
that piece of evidence in its formal offer of evidence.
More than two years later, the petitioner again tried to squeeze in the Bane deposition
into its case. In resolving the petitioner’s motion for reconsideration of the
Sandiganbayan’s 2000 resolution, the Sandiganbayan held that the Bane deposition has
"become part and parcel" of Civil Case No. 0009. This pronouncement has obscured the
real status of the Bane deposition as evidence (considering that, earlier, the
Sandiganbayan already denied the petitioner’s attempt to adopt the Bane deposition as
evidence in Civil Case No. 0009 for the deponent cannot be cross-examined in court).
Nevertheless, the Sandiganbayan ultimately denied the petitioner’s motion to reopen the
case. Having judicially admitted the resting of its case, the petitioner should have already
questioned the denial of its 2nd motion by way of certiorari, since the denial of its
attempt to reopen the case effectively foreclosed all avenues available to it for the
consideration of the Bane deposition. Instead of doing so, however, the petitioner
allowed the 60-day reglementary period, under Section 4, Rule 65 of the Rules of
Court, to lapse, and proceeded to file its 3rd motion.
Significantly, the petitioner changed its legal position in its 3rd motion by denying
having rested its case and insisting on the introduction of the Bane deposition. Rebuffed
once more, the petitioner filed the present petition, inviting our attention to the
Sandiganbayan’s resolutions,72 which allegedly gave it "mixed signals."73 By pointing to
these resolutions, ironically, even the petitioner impliedly recognized that they were
then already ripe for review on certiorari. What the petitioner should have realized was
that its 2nd motion unequivocally aimed to reopen the case for the introduction of
further evidence consisting of the Bane deposition. Having been ultimately denied by the

court, the petitioner could not have been prevented from taking the proper remedy
notwithstanding any perceived ambiguity in the resolutions.
On the other end, though, there was nothing intrinsically objectionable in the
petitioner’s motion to reopen its case before the court ruled on its formal offer of
evidence. The Rules of Court does not prohibit a party from requesting the court to allow
it to present additional evidence even after it has rested its case. Any such opportunity,
however, for the ultimate purpose of the admission of additional evidence is already
addressed to the sound discretion of the court. It is from the prism of the exercise of this
discretion that the Sandiganbayan’s refusal to reopen the case (for the purpose of
introducing, "marking and offering" additional evidence) should be viewed. We can
declare this Sandiganbayan action invalid if it had acted with grave abuse of discretion.
III. The Sandiganbayan gravely abused its discretion in ultimately refusing to
reopen the case for the purpose of introducing and admitting in evidence the Bane
deposition
The basis for a motion to reopen a case to introduce further evidence is Section 5, Rule
30 of the Rules of Court, which reads:
Sec. 5. Order of trial. – Subject to the provisions of section 2 of Rule 31, and unless the
court for special reasons otherwise directs, the trial shall be limited to the issues stated
in the pre-trial order and shall proceed as follows:
xxxx
(f) The parties may then respectively adduce rebutting evidence only, unless the court,
for good reasons and in the furtherance of justice, permits them to adduce evidence
upon their original case[.] [emphases ours]
Under this rule, a party who has the burden of proof must introduce, at the first instance,
all the evidence he relies upon74 and such evidence cannot be given piecemeal.75 The
obvious rationale of the requirement is to avoid injurious surprises to the other party
and the consequent delay in the administration of justice. 76
A party’s declaration of the completion of the presentation of his evidence prevents him
from introducing further evidence;77 but where the evidence is rebuttal in character,
whose necessity, for instance, arose from the shifting of the burden of evidence from one
party to the other;78 or where the evidence sought to be presented is in the nature
of newly discovered evidence,79 the party’s right to introduce further evidence must be
recognized. Otherwise, the aggrieved party may avail of the remedy of certiorari.
Page 68 of 78
Largely, the exercise of the court’s discretion80 under the exception of Section 5(f), Rule
30 of the Rules of Court depends on the attendant facts – i.e., on whether the evidence
would qualify as a "good reason" and be in furtherance of "the interest of justice." For a
reviewing court to properly interfere with the lower court’s exercise of discretion, the
petitioner must show that the lower court’s action was attended by grave abuse of
discretion. Settled jurisprudence has defined this term as the capricious and whimsical
exercise of judgment, equivalent to lack of jurisdiction; or, the exercise of power in an
arbitrary manner by reason of passion, prejudice, or personal hostility, so patent or so
gross as to amount to an evasion of a positive duty, to a virtual refusal to perform the
mandated duty, or to act at all in contemplation of the law. 81 Grave abuse of discretion
goes beyond the bare and unsupported imputation of caprice, whimsicality or
arbitrariness, and beyond allegations that merely constitute errors of judgment 82 or
mere abuse of discretion.83
In Lopez v. Liboro,84 we had occasion to make the following pronouncement:
After the parties have produced their respective direct proofs, they are allowed to offer
rebutting evidence only, but, it has been held, the court, for good reasons, in the
furtherance of justice, may permit them to offer evidence upon their original case, and
its ruling will not be disturbed in the appellate court where no abuse of discretion
appears. So, generally, additional evidence is allowed when it is newly discovered,
or where it has been omitted through inadvertence or mistake, or where the
purpose of the evidence is to correct evidence previously offered. The omission to
present evidence on the testator's knowledge of Spanish had not been deliberate. It was
due to a misapprehension or oversight. (citations omitted; emphases ours)
Likewise, in Director of Lands v. Roman Archbishop of Manila,85 we ruled:
The strict rule is that the plaintiff must try his case out when he commences.
Nevertheless, a relaxation of the rule is permitted in the sound discretion of the court.
"The proper rule for the exercise of this discretion," it has been said by an eminent
author, "is, that material testimony should not be excluded because offered by the
plaintiff after the defendant has rested, although not in rebuttal, unless it has been
kept back by a trick, and for the purpose of deceiving the defendant and affecting
his case injuriously."
These principles find their echo in Philippine remedial law. While the general rule is
rightly recognized, the Code of Civil Procedure authorizes the judge "for special
reasons," to change the order of the trial, and "for good reason, in the furtherance of
justice," to permit the parties "to offer evidence upon their original case." These
exceptions are made stronger when one considers the character of registration
proceedings and the fact that where so many parties are involved, and action is taken

quickly and abruptly, conformity with precise legal rules should not always be
expected. Even at the risk of violating legal  formulæ, an opportunity should be
given to parties to submit additional corroborative evidence in support of their
claims of title, if the ends of justice so require. (emphases ours)
In his commentaries, Chief Justice Moran had this to say:
However, the court for good reasons, may, in the furtherance of justice, permit the
parties to offer evidence upon their original case, and its ruling will not be disturbed
where no abuse of discretion appears, Generally, additional evidence is allowed when
x x x; but it may be properly disallowed where it was withheld deliberately and
without justification.86
The weight of the exception is also recognized in foreign jurisprudence. 87
Under these guidelines, we hold that the Sandiganbayan gravely abused its discretion in
refusing to reopen the case. Instead of squarely ruling on the petitioner’s 2nd motion to
avoid any uncertainty on the evidentiary status of the Bane deposition, the
Sandiganbayan’s action actually left the petitioner’s concern in limbo by considering the
petitioner’s motion "redundant." This is tantamount to a refusal to undertake a positive
duty as mandated by the circumstances and is equivalent to an act outside the
contemplation of law.
It has not escaped our notice that at the time the petitioner moved to re-open its case,
the respondents had not yet even presented their evidence in chief. The respondents,
therefore, would not have been prejudiced by allowing the petitioner’s introduction of
the Bane deposition, which was concededly omitted "through oversight."88 The higher
interest of substantial justice, of course, is another consideration that cannot be taken
lightly.89
In light of these circumstances, the Sandiganbayan should not have perfunctorily applied
Section 5, Rule 30 of the Rules of Court on the petitioner’s request to reopen the case for
the submission of the Bane deposition.
On the basis of this conclusion, a remand of this case should follow as a matter of course.
The state of the parties’ submissions and the delay that has already attended this aspect
of Civil Case No. 0009, however, dictate against this obvious course of action. At this
point, the parties have more than extensively argued for or against the admission of the
Bane deposition. Civil Case No. 0009 is a 25-year old sequestration case that is now
crying out for complete resolution. Admissibility, too, is an issue that would have again
been raised on remand and would surely stare us in the face after remand. 90 We are thus
Page 69 of 78
left with no choice but to resolve the issue of admissibility of the Bane deposition here
and now.
IV. The admissibility of the Bane deposition
IV (a). The consolidation of Civil Case No. 0009 and Civil Case No. 0130 did not
dispense with the usual requisites of admissibility
In support of its 3rd motion, the petitioner argues that the Bane deposition can be
admitted in evidence without observing the provisions of Section 47, Rule 130 of the
Rules of Court.91 The petitioner claims that in light of the prior consolidation of Civil Case
No. 0009 and Civil Case No. 0130, among others,92 the "former case or proceeding" that
Section 47, Rule 130 speaks of no longer exists.
Rule 31 of the old Rules of Court93 – the rule in effect at the time Civil Case Nos. 0009 and
0130 were consolidated – provided that:
Rule 31
Consolidation or Severance
Section 1. Consolidation. – When actions involving a common question of law or fact are
pending before the court, it may order a joint hearing or trial of any or all the matters in
issue in the actions; it may order all the actions consolidated; and it may make such
orders concerning proceedings therein as may tend to avoid unnecessary costs or
delay.94 (emphases ours)
Consolidation is a procedural device granted to the court as an aid in deciding how cases
in its docket are to be tried so that the business of the court may be dispatched
expeditiously and with economy while providing justice to the parties. To promote this
end, the rule permits the consolidation and a single trial of several cases in the court’s
docket, or the consolidation of issues within those cases. 95
A reading of Rule 31 of the Rules of Court easily lends itself to two observations. First,
Rule 31 is completely silent on the effect/s of consolidation on the cases consolidated;
on the parties and the causes of action involved; and on the evidence presented in the
consolidated cases. Second, while Rule 31 gives the court the discretion either to order a
joint hearing or trial, or to order the actions consolidated, jurisprudence will show that
the term "consolidation" is used generically and even synonymously with joint hearing
or trial of several causes.96 In fact, the title "consolidation" of Rule 31 covers all the
different senses of consolidation, as discussed below.

These observations are not without practical reason. Considering that consolidation is
basically a function given to the court, the latter is in the best position to determine for
itself (given the nature of the cases, the complexity of the issues involved, the parties
affected, and the court’s capability and resources vis-à -vis all the official business
pending before it, among other things) what "consolidation" will bring, bearing in mind
the rights of the parties appearing before it.
To disregard the kind of consolidation effected by the Sandiganbayan on the simple and
convenient premise that the deposition-taking took place after the Sandiganbayan
ordered the consolidation is to beg the question. It is precisely the silence of our Rules of
Procedure and the dearth of applicable case law on the effect of "consolidation" that
strongly compel this Court to determine the kind of "consolidation" effected to directly
resolve the very issue of admissibility in this case.
In the context of legal procedure, the term "consolidation" is used in three different
senses:97
(1) Where all except one of several actions are stayed until one is tried, in which
case the judgment in the one trial is conclusive as to the others. This
is not actually consolidation but is referred to as such. (quasi-consolidation)98
(2) Where several actions are combined into one, lose their separate identity,
and become a single action in which a single judgment is rendered. This is
illustrated by a situation where several actions are pending between the same
parties stating claims which might have been set out originally in one complaint.
(actual consolidation)99
(3) Where several actions are ordered to be tried together but each retains its
separate character and requires the entry of a separate judgment. This type of
consolidation does not merge the suits into a single action, or cause the parties
to one action to be parties to the other. (consolidation for trial)100
Considering that the Sandiganbayan’s order101 to consolidate several incident cases does
not at all provide a hint on the extent of the court’s exercise of its discretion as to the
effects of the consolidation it ordered – in view of the function of this procedural device
to principally aid the court itself in dealing with its official business – we are compelled
to look deeper into the voluminous records of the proceedings conducted below. We
note that there is nothing that would even suggest that the Sandiganbayan in fact
intended a merger of causes of action, parties and evidence. 102 To be sure, there would
have been no need for a motion to adopt (which did not remain unopposed) the
testimonies in the incident cases had a merger actually resulted from the order of
Page 70 of 78
consolidation, for in that case, the Sandiganbayan can already take judicial notice of the
same.
Significantly, even the petitioner itself viewed consolidation, at most, to be merely a
consolidation for trial.103 Accordingly, despite the consolidation in 1993, the petitioner
acceded to the Sandiganbayan’s 1998 Resolution (which denied the petitioner’s 1st
Motion on the ground that the witnesses, whose testimony in the incident cases is
sought to be adopted, "are not available for cross-examination in" the Sandiganbayan)
by presenting these other witnesses again in the main case, so that the respondents can
cross-examine them.
These considerations run counter to the conclusion that the Sandiganbayan’s order of
consolidation had actually resulted in the complete merger of the incident cases with the
main case, in the sense of actual consolidation, and that the parties in these consolidated
cases had (at least constructively) been aware of and had allowed actual consolidation
without objection.104
Considering, too, that the consolidated actions were originally independent of one
another and the fact that in the present case the party respondents to Civil Case No.
0009 (an action for reconveyance, accounting, restitution and damages) are not parties
to Civil Case No. 0130 (a special civil action filed by an ETPI stockholder involving a
corporate squabble within ETPI), the conclusion that the Sandiganbayan in fact intended
an actual consolidation and, together with the parties affected,105 acted towards that end
- where the actions become fused and unidentifiable from one another and where the
evidence appreciated in one action is also appreciated in another action – must find
support in the proceedings held below. This is particularly true in a case with the
magnitude and complexity of the present case. Otherwise, to impose upon the
respondents the effects of an actual consolidation (which find no clear support in the
provisions of the Rules of Court, jurisprudence,106 and even in the proceedings before the
Sandiganbayan itself and despite the aforementioned considerations) results in an
outright deprivation of the petitioner’s right to due process. We reach this conclusion
especially where the evidence sought to be admitted is not simply a testimony taken in
one of the several cases, but a deposition upon oral examination taken in another
jurisdiction and whose admission is governed by specific provisions on our rules on
evidence.
We stress on this point, too, that while the Sandiganbayan ordered the consolidation in
1993 (that is, before the deposition was taken), neither does the Pre-Trial
Order107 issued by the Sandiganbayan in 1997 in Civil Case No. 0009 contain any
reference, formal or substantive, to Civil Case No. 0130. 108 Interestingly, in its Pre-Trial
Brief dated August 30, 1996,109 the petitioner even made a representation to present
Bane as one of its witnesses.

IV (b). Use of deposition under Section 4, Rule 23 and as a former testimony under
Section 47, Rule 130
Since the present consolidation did not affect Civil Case No. 0130 as an original, albeit
incidental, case, the admissibility of the Bane deposition cannot avoid being measured
against the requirements of Section 47, Rule 130 of the Rules of Court – the rule on the
admissibility of testimonies or deposition taken in a different proceeding. In this regard,
the petitioner argues that Section 4, Rule 23 of the Rules of Court (then Rule 24) 110 must,
at any rate, prevail over Section 47, Rule 130111 of the same Rules.
At the outset, we note that when the petitioner’s motion to adopt the testimonies taken
in the incident cases drew individual oppositions from the respondents, the petitioner
represented to the Sandiganbayan its willingness to comply with the provisions of
Section 47, Rule 130 of the Rules of Court,112 and, in fact, again presented some of the
witnesses. The petitioner’s about-face two years thereafter even contributed to the
Sandiganbayan’s own inconsistency on how to treat the Bane deposition, in particular,
as evidence.
Section 4, Rule 23 of the Rules of Court on "Deposition Pending Action" (deposition de
bene esse) provides for the circumstances when depositions may be used in the trial, or
at the hearing of a motion or an interlocutory proceeding.
SEC. 4. Use of depositions. — At the trial or upon the hearing of a motion or an
interlocutory proceeding, any part or all of a deposition, so far as admissible under the
rules of evidence, may be used against any party who was present or represented at
the taking of the deposition or who had due notice thereof, in accordance with any one
of the following provisions:
xxxx
(c) The deposition of a witness, whether or not a party, may be used by any party for
any purpose if the court finds: (1) that the witness is dead; or (2) that the witness
resides at a distance more than one hundred (100) kilometers from the place of trial or
hearing, or is out of the Philippines, unless it appears that his absence was procured by
the party offering the deposition; or (3) that the witness is unable to attend or testify
because of age, sickness, infirmity, or imprisonment; or (4) that the party offering the
deposition has been unable to procure the attendance of the witness by subpoena; or (5)
upon application and notice, that such exceptional circumstances exist as to make it
desirable, in the interest of justice and with due regard to the importance of presenting
the testimony of witnesses orally in open court, to allow the deposition to be used[.]
[emphasis ours]
Page 71 of 78
On the other hand, Section 47, Rule 130 of the Rules of Court provides:
SEC. 47. Testimony or deposition at a former proceeding. – The testimony or
deposition of a witness deceased or unable to testify, given in a former case or
proceeding, judicial or administrative, involving the same parties and subject
matter, may be given in evidence against the adverse party who had the opportunity to
cross-examine him.
A plain reading of Rule 23 of the Rules of Court readily rejects the petitioner’s position
that the Bane deposition can be admitted into evidence without observing the
requirements of Section 47, Rule 130 of the Rules of Court.
Before a party can make use of the deposition taken at the trial of a pending action,
Section 4, Rule 23 of the Rules of Court does not only require due observance of its sub-
paragraphs (a) to (d); it also requires, as a condition for admissibility, compliance with
"the rules on evidence." Thus, even Section 4, Rule 23 of the Rules of Court makes an
implied reference to Section 47, Rule 130 of the Rules of Court before the deposition
may be used in evidence. By reading Rule 23 in isolation, the petitioner failed to
recognize that the principle conceding admissibility to a deposition under Rule 23
should be consistent with the rules on evidence under Section 47, Rule 130. 113 In
determining the admissibility of the Bane deposition, therefore, reliance cannot be given
on one provision to the exclusion of the other; both provisions must be considered.
This is particularly true in this case where the evidence in the prior proceeding does not
simply refer to a witness’ testimony in open court but to a deposition taken under
another and farther jurisdiction.
A common thread that runs from Section 4, Rule 23 of the Rules of Court and Section 47,
Rule 130 of the same Rules is their mutual reference to depositions.
A deposition is chiefly a mode of discovery whose primary function is to supplement the
pleadings for the purpose of disclosing the real points of dispute between the parties
and affording an adequate factual basis during the preparation for trial. 114 Since
depositions are principally made available to the parties as a means of informing
themselves of all the relevant facts, depositions are not meant as substitute for the
actual testimony in open court of a party or witness. Generally, the deponent must be
presented for oral examination in open court at the trial or hearing. This is a
requirement of the rules on evidence under Section 1, Rule 132 of the Rules of Court. 115
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.

Indeed, any deposition offered to prove the facts set forth therein, in lieu of the actual
oral testimony of the deponent in open court, may be opposed by the adverse party and
excluded under the hearsay rule – i.e., that the adverse party had or has no opportunity
to cross-examine the deponent at the time that his testimony is offered. That
opportunity for cross-examination was afforded during the taking of the deposition
alone is no argument, as the opportunity for cross-examination must normally be
accorded a party at the time that the testimonial evidence is actually presented against
him during the trial or hearing of a case.116 However, under certain conditions and for
certain limited purposes laid down in Section 4, Rule 23 of the Rules of Court, the
deposition may be used without the deponent being actually called to the witness
stand.117
Section 47, Rule 130 of the Rules of Court is an entirely different provision. While
a former testimony or deposition appears under the Exceptions to the Hearsay Rule, the
classification of former testimony or deposition as an admissible hearsay is not
universally conceded.118 A fundamental characteristic of hearsay evidence is the adverse
party’s lack of opportunity to cross-examine the out-of-court declarant. However,
Section 47, Rule 130 explicitly requires, inter alia, for the admissibility of a former
testimony or deposition that the adverse party must have had an opportunity to cross-
examine the witness or the deponent in the prior proceeding.
This opportunity to cross-examine though is not the ordinary cross-
examination119 afforded an adverse party in usual trials regarding "matters stated in the
direct examination or connected therewith." Section 47, Rule 130 of the Rules of Court
contemplates a different kind of cross-examination, whether actual or a mere
opportunity, whose adequacy depends on the requisite identity of issues in the former
case or proceeding and in the present case where the former testimony or deposition is
sought to be introduced.
Section 47, Rule 130 requires that the issues involved in both cases must, at least, be
substantially the same; otherwise, there is no basis in saying that the former statement
was - or would have been - sufficiently tested by cross-examination or by an opportunity
to do so.120 (The requirement of similarity though does not mean that all the issues in the
two proceedings should be the same.121 Although some issues may not be the same in
the two actions, the admissibility of a former testimony on an issue which is similar in
both actions cannot be questioned.122 )
These considerations, among others, make Section 47, Rule 130 a distinct rule on
evidence and therefore should not be confused with the general provisions on
deposition under Rule 23 of the Rules of Court. In other words, even if the petitioner
complies with Rule 23 of the Rules of Court on the use of depositions, the observance of
Section 47, Rule 130 of the Rules of Court cannot simply be avoided or disregarded.
Page 72 of 78
Undisputably, the Sandiganbayan relied on the Bane deposition, taken in Civil Case No.
0130, for purposes of this very same case. Thus, what the petitioner established and
what the Sandiganbayan found, for purposes of using the Bane deposition, refer only to
the circumstances laid down under Section 4(c), Rule 23 of the Rules of Court, not
necessarily to those of Section 47, Rule 130 of the Rules of Court, as a distinct rule on
evidence that imposes further requirements in the use of depositions in a different case
or proceeding. In other words, the prior use of the deposition under Section 4(c), Rule
23 cannot be taken as compliance with Section 47, Rule 130 which considers the same
deposition as hearsay, unless the requisites for its admission under this rule are
observed. The aching question is whether the petitioner complied with the latter rule.
Section 47, Rule 130 of the Rules of Court lays down the following requisites for
the admission of a testimony or deposition given at a former case or proceeding.
1. The testimony or deposition of a witness deceased or otherwise unable to
testify;
2. The testimony was given in a former case or proceeding, judicial or
administrative;
3. Involving the same parties;
4. Relating to the same matter;
5. The adverse party having had the opportunity to cross-examine him. 123
The reasons for the admissibility of testimony or deposition taken at a former trial or
proceeding are the necessity for the testimony and its trustworthiness. 124 However,
before the former testimony or deposition can be introduced in evidence, the proponent
must first lay the proper predicate therefor,125 i.e., the party must establish the basis for
the admission of the Bane deposition in the realm of admissible evidence. This basis is
the prior issue that we must now examine and resolve.
IV (c). Unavailability of witness
For the admission of a former testimony or deposition, Section 47, Rule 130 of the Rules
of Court simply requires, inter alia, that the witness or deponent be "deceased or unable
to testify." On the other hand, in using a deposition that was taken during the pendency
of an action, Section 4, Rule 23 of the Rules of Court provides several grounds that will
justify dispensing with the actual testimony of the deponent in open court and

specifies, inter alia, the circumstances of the deponent’s inability to attend or testify, as
follows:
(3) that the witness is unable to attend or testify because of age, sickness, infirmity, or
imprisonment[.] [emphases ours]126
The phrase "unable to testify" appearing in both Rule 23 and Rule 130 of the Rules of
Court refers to a physical inability to appear at the witness stand and to give a
testimony.127 Hence notwithstanding the deletion of the phrase "out of the Philippines,"
which previously appeared in Section 47, Rule 130 of the Rules of Court, absence from
jurisdiction128 - the petitioner’s excuse for the non-presentation of Bane in open court
- may still constitute inability to testify under the same rule. This is not to say, however,
that resort to deposition on this instance of unavailability will always be upheld. Where
the deposition is taken not for discovery purposes, but to accommodate the deponent,
then the deposition should be rejected in evidence. 129
Although the testimony of a witness has been given in the course of a former proceeding
between the parties to a case on trial, this testimony alone is not a ground for its
admission in evidence. The witness himself, if available, must be produced in court as if
he were testifying de novo since his testimony given at the former trial is mere
hearsay.130 The deposition of a witness, otherwise available, is also inadmissible for the
same reason.
Indeed, the Sandiganbayan’s reliance on the Bane deposition in the other case (Civil Case
No. 0130) is an argument in favor of the requisite unavailability of the witness. For
purposes of the present case (Civil Case No. 0009), however, the Sandiganbayan would
have no basis to presume, and neither can or should we, that the previous condition,
which previously allowed the use of the deposition, remains and would thereby justify
the use of the same deposition in another case or proceeding, even if the other case or
proceeding is before the same court. Since the basis for the admission of the Bane
deposition, in principle, being necessity,131 the burden of establishing its existence rests
on the party who seeks the admission of the evidence. This burden cannot be supplanted
by assuming the continuity of the previous condition or conditions in light of the general
rule against the non-presentation of the deponent in court. 132
IV (d). The requirement of opportunity of the adverse party to cross-examine;
identity of parties; and identity of subject matter
The function of cross-examination is to test the truthfulness of the statements of a
witness made on direct examination.133 The opportunity of cross-examination has been
regarded as an essential safeguard of the accuracy and completeness of a testimony. In
civil cases, the right of cross-examination is absolute, and is not a mere privilege of the
Page 73 of 78
party against whom a witness may be called.134 This right is available, of course, at the
taking of depositions, as well as on the examination of witnesses at the trial. The
principal justification for the general exclusion of hearsay statements and for the
admission, as an exception to the hearsay rule, of reported testimony taken at a former
hearing where the present adversary was afforded the opportunity to cross-examine, is
based on the premise that the opportunity of cross-examination is an essential
safeguard135 against falsehoods and frauds.
In resolving the question of whether the requirement of opportunity to cross-examine
has been satisfied, we have to consider first the required identity of parties as the
present opponent to the admission of the Bane deposition to whom the opportunity to
cross-examine the deponent is imputed may not after all be the same "adverse party"
who actually had such opportunity.
To render the testimony of a witness admissible at a later trial or action, the parties to
the first proceeding must be the same as the parties to the later proceeding. Physical
identity, however, is not required; substantial identity 136 or identity of
interests137 suffices, as where the subsequent proceeding is between persons who
represent the parties to the prior proceeding by privity in law, in blood, or in estate. The
term "privity" denotes mutual or successive relationships to the same rights of
property.138
In the present case, the petitioner failed to impute, much less establish, the identity of
interest or privity between the then opponent, Africa, and the present opponents, the
respondents. While Africa is the son of the late respondent Jose Africa, at most, the
deposition should be admissible only against him as an ETPI stockholder who filed the
certiorari petition docketed as Civil Case No. 0130 (and, unavoidably, as successor-in-
interest of the late respondent Jose Africa). While Africa and the respondents are all
ETPI stockholders, this commonality does not establish at all any privity between them
for purposes of binding the latter to the acts or omissions of the former respecting the
cross-examination of the deponent. The sequestration of their shares does not result in
the integration of their rights and obligations as stockholders which remain distinct and
personal to them, vis-a-vis other stockholders.139
IV (d1). The respondents’ notice of taking of Bane deposition is insufficient evidence of
waiver
The petitioner staunchly asserts that the respondents have waived their right to cross-
examine the deponent for their failure to appear at the deposition-taking despite
individual notices previously sent to them.140

In its first Notice to Take Oral Deposition of Mr. Maurice V. Bane dated August 30,
1996,141 the petitioner originally intended to depose Mr. Bane on September 25-26 1996.
Because it failed to specify in the notice the purpose for taking Mr. Bane’s deposition, the
petitioner sent a Second Amended Notice to Take Deposition of Mr. Maurice V. Bane
Upon Oral Examination where it likewise moved the scheduled deposition-taking to
October 23-26, 1996.
The records show that Africa moved several times for protective orders against the
intended deposition of Maurice Bane.142 On the other hand, among the respondents, only
respondent Enrile appears to have filed an Opposition143 to the petitioner’s first notice,
where he squarely raised the issue of reasonability of the petitioner’s nineteen-day first
notice. While the Sandiganbayan denied Africa’s motion for protective orders, 144 it
strikes us that no ruling was ever handed down on respondent Enrile’s Opposition. 145
It must be emphasized that even under Rule 23, the admission of the deposition upon
oral examination is not simply based on the fact of prior notice on the individual sought
to be bound thereby. In Northwest Airlines v. Cruz, 146 we ruled that -
The provision explicitly vesting in the court the power to order that the deposition shall
not be taken connotes the authority to exercise discretion on the matter. However, the
discretion conferred by law is not unlimited. It must be exercised, not arbitrarily or
oppressively, but in a reasonable manner and in consonance with the spirit of he law.
The courts should always see to it that the safeguards for the protection of the parties
and deponents are firmly maintained. As aptly stated by Chief Justice Moran:
. . . . (T)his provision affords the adverse party, as well as the deponent, sufficient
protection against abuses that may be committed by a party in the exercise of his
unlimited right to discovery. As a writer said: "Any discovery involves a prying into
another person's affairs — prying that is quite justified if it is to be a legitimate aid to
litigation, but not justified if it is not to be such an aid." For this reason, courts are given
ample powers to forbid discovery which is intended not as an aid to litigation, but
merely to annoy, embarrass or oppress either the deponent or the adverse party, or
both. (emphasis ours)
In the present case, not only did the Sandiganbayan fail to rule on respondent Enrile’s
Opposition (which is equally applicable to his co-respondents), it also failed to provide
even the bare minimum "safeguards for the protection of," (more so) non-parties, 147 and
to ensure that these safeguards are firmly maintained. Instead, the Sandiganbayan
simply bought the petitioner’s assertion (that the taking of Bane deposition is a matter
of right) and treated the lingering concerns – e.g., reasonability of the notice; and the
non-party status of the respondents in Civil Case No. 0130 - at whose incident (docketed
Page 74 of 78
as G.R. No. 107789) the Bane deposition was taken - rather perfunctorily to the
prejudice of the respondents.
In conjunction with the order of consolidation, the petitioner’s reliance on the prior
notice on the respondents, as adequate opportunity for cross-examination, cannot
override the non-party status of the respondents in Civil Case No. 0130 – the effect of
consolidation being merely for trial. As non-parties, they cannot be bound by
proceedings in that case. Specifically, they cannot be bound by the taking of the Bane
deposition without the consequent impairment of their right of cross-
examination.148 Opportunity for cross-examination, too, even assuming its presence,
cannot be singled out as basis for the admissibility of a former testimony or
deposition since such admissibility is also anchored on the requisite identity of parties.
To reiterate, although the Sandiganbayan considered the Bane deposition in resolving
Civil Case No. 0130, its action was premised on Africa’s status as a party in that case
where the Bane deposition was taken.
Corollarily, the idea of privity also permeates Rule 23 of the Rules of Court through its
Section 5 which provides:
Effect of substitution of parties. — Substitution of parties does not affect the right to
use depositions previously taken; and, when an action has been dismissed and another
action involving the same subject is afterward brought between the same parties or their
representatives or successors in interest, all depositions lawfully taken and duly filed in
the former action may be used in the latter as if originally taken therefor. [italics and
underscoring ours]
In light of these considerations, we reject the petitioner’s claim that the respondents
waived their right to cross-examination when they failed to attend the taking of the Bane
deposition. Incidentally, the respondents’ vigorous insistence on their right to cross-
examine the deponent speaks loudly that they never intended any waiver of this right.
Interestingly, the petitioner’s notice of the deposition-taking relied on Rule 23 of the
Rules of Court. Section 15 of this rule reads:
Deposition upon oral examination; notice; time and place. — A party desiring to take
the deposition of any person upon oral examination shall give reasonable notice in
writing to every other party to the action. The notice shall state the time and place for
taking the deposition and the name and address of each person to be examined, if
known, and if the name is not known, a general description sufficient to identify him or
the particular class or group to which he belongs. On motion of any party upon whom
the notice is served, the court may for cause shown enlarge or shorten the time.

Under this provision, we do not believe that the petitioner could reasonably expect that
the individual notices it sent to the respondents would be sufficient to bind them to the
conduct of the then opponent’s (Africa’s) cross-examination since, to begin with, they
were not even parties to the action. Additionally, we observe that in the notice of the
deposition taking, conspicuously absent was any indication sufficient to forewarn the
notified persons that their inexcusable failure to appear at the deposition taking would
amount to a waiver of their right of cross-examination, without prejudice to the right of
the respondents to raise their objections at the appropriate time. 149 We would be
treading on dangerous grounds indeed were we to hold that one not a party to an
action, and neither in privity nor in substantial identity of interest with any of the
parties in the same action, can be bound by the action or omission of the latter, by
the mere expedient of a notice. Thus, we cannot simply deduce a resultant waiver
from the respondents’ mere failure to attend the deposition-taking despite notice sent
by the petitioner.
Lastly, we see no reason why the Bane deposition could not have been taken earlier in
Civil Case No. 0009 – the principal action where it was sought to be introduced – while
Bane was still here in the Philippines. We note in this regard that the Philippines was no
longer under the Marcos administration and had returned to normal democratic
processes when Civil Case No. 0009 was filed. In fact, the petitioner’s notice itself states
that the "purpose of the deposition is for Mr. Maurice Bane to identify and testify on the
facts set forth in his Affidavit," which Mr. Bane had long executed in 1991 in Makati,
Metro Manila.150 Clearly, a deposition could then have been taken - without
compromising the respondents’ right to cross-examine a witness against them -
considering that the principal purpose of the deposition is chiefly a mode of discovery.
These, to our mind, are avoidable omissions that, when added to the deficient handling
of the present matter, add up to the gross deficiencies of the petitioner in the handling of
Civil Case No. 0009.
After failing to take Bane’s deposition in 1991 and in view of the peculiar circumstances
of this case, the least that the petitioner could have done was to move for the taking of
the Bane deposition and proceed with the deposition immediately upon securing a
favorable ruling thereon. On that occasion, where the respondents would have a chance
to be heard, the respondents cannot avoid a resultant waiver of their right of cross-
examination if they still fail to appear at the deposition-taking. Fundamental fairness
dictates this course of action. It must be stressed that not only were the respondents
non-parties to Civil Case No. 0130, they likewise have no interest in Africa’s certiorari
petition asserting his right as an ETPI stockholder.
Setting aside the petitioner’s flip-flopping on its own representations, 151 this Court can
only express dismay on why the petitioner had to let Bane leave the Philippines before
taking his deposition despite having knowledge already of the substance of what he
Page 75 of 78
would testify on. Considering that the testimony of Bane is allegedly a "vital cog" in the
petitioner’s case against the respondents, the Court is left to wonder why the petitioner
had to take the deposition in an incident case (instead of the main case) at a time when it
became the technical right of the petitioner to do so.
V. The petitioner cannot rely on principle of judicial notice
The petitioner also claims that since the Bane deposition had already been previously
introduced and admitted in Civil Case No. 0130, then the Sandiganbayan should have
taken judicial notice of the Bane deposition as part of its evidence.
Judicial notice is the cognizance of certain facts that judges may properly take and act on
without proof because these facts are already known to them. 152 Put differently, it is the
assumption by a court of a fact without need of further traditional evidentiary support.
The principle is based on convenience and expediency in securing and introducing
evidence on matters which are not ordinarily capable of dispute and are not bona
fide disputed.153
The foundation for judicial notice may be traced to the civil and canon law
maxim, manifesta (or notoria) non indigent probatione.154 The taking of judicial notice
means that the court will dispense with the traditional form of presentation of evidence.
In so doing, the court assumes that the matter is so notorious that it would not be
disputed.
The concept of judicial notice is embodied in Rule 129 of the Revised Rules on Evidence.
Rule 129 either requires the court to take judicial notice, inter alia, of "the official acts of
the x x x judicial departments of the Philippines,"155 or gives the court the discretion to
take judicial notice of matters "ought to be known to judges because of their judicial
functions."156 On the other hand, a party-litigant may ask the court to take judicial notice
of any matter and the court may allow the parties to be heard on the propriety of taking
judicial notice of the matter involved. 157 In the present case, after the petitioner filed
its Urgent Motion and/or Request for Judicial Notice, the respondents were also heard
through their corresponding oppositions.
In adjudicating a case on trial, generally, courts are not authorized to take judicial notice
of the contents of the records of other cases, even when such cases have been tried or
are pending in the same court, and notwithstanding that both cases may have been tried
or are actually pending before the same judge.158 This rule though admits of exceptions.
As a matter of convenience to all the parties, a court may properly treat all or any part of
the original record of a case filed in its archives as read into the record of a case pending
before it, when, with the knowledge of, and absent an objection from, the adverse

party, reference is made to it for that purpose, by name and number or in some other
manner by which it is sufficiently designated; or when the original record of the former
case or any part of it, is actually withdrawn from the archives at the court's direction, at
the request or with the consent of the parties, and admitted as a part of the record of
the case then pending.159
Courts must also take judicial notice of the records of another case or cases, where
sufficient basis exists in the records of the case before it, warranting the dismissal of the
latter case.160
The issue before us does not involve the applicability of the rule on mandatory taking of
judicial notice; neither is the applicability of the rule on discretionary taking of judicial
notice seriously pursued. Rather, the petitioner approaches the concept of judicial notice
from a genealogical perspective of treating whatever evidence offered in any of the
"children" cases – Civil Case 0130 – as evidence in the "parent" case – Civil Case 0009 -
or "of the whole family of cases."161 To the petitioner, the supposed relationship of these
cases warrants the taking of judicial notice.
We strongly disagree. First, the supporting cases162 the petitioner cited are inapplicable
either because these cases involve only a single proceeding or an exception to the rule,
which proscribes the courts from taking judicial notice of the contents of the records of
other cases.163 Second, the petitioner’s proposition is obviously obnoxious to a system of
orderly procedure. The petitioner itself admits that the present case has generated a lot
of cases, which, in all likelihood, involve issues of varying complexity. If we follow the
logic of the petitioner’s argument, we would be espousing judicial confusion by
indiscriminately allowing the admission of evidence in one case, which was presumably
found competent and relevant in another case, simply based on the supposed lineage of
the cases. It is the duty of the petitioner, as a party-litigant, to properly lay before the
court the evidence it relies upon in support of the relief it seeks, instead of imposing that
same duty on the court. We invite the petitioner’s attention to our prefatory
pronouncement in Lopez v. Sandiganbayan:164
Down the oft-trodden path in our judicial system, by common sense, tradition and the
law, the Judge in trying a case sees only with judicial eyes as he ought to know nothing
about the facts of the case, except those which have been adduced judicially in evidence.
Thus, when the case is up for trial, the judicial head is empty as to facts involved and it is
incumbent upon the litigants to the action to establish by evidence the facts upon which
they rely. (emphasis ours)
We therefore refuse, in the strongest terms, to entertain the petitioner’s argument that
we should take judicial notice of the Bane deposition.
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VI. Summation
To recapitulate, we hold that: (1) the Sandiganbayan’s denial of the petitioner’s 3rd
motion – the Motion to Admit Supplemental Offer of Evidence (Re: Deposition of Maurice
Bane) – was a legal error that did not amount to grave abuse of discretion; (2) the
Sandiganbayan’s refusal to reopen the case at the petitioner’s instance was tainted with
grave abuse of discretion; and (3) notwithstanding the grave abuse of discretion, the
petition must ultimately fail as the Bane deposition is not admissible under the rules of
evidence.165
VII. Refutation of Justice Carpio’s Last Minute Modified Dissent
At the last minute, Justice Carpio circulated a modified dissent, quoting the Bane
deposition. His covering note states:
I have revised my dissenting opinion to include the Bane deposition so that the Court
and the public will understand what the Bane deposition is all about. (underlining
added)
In light of this thrust, a discussion refuting the modified dissent is in order.
First: Contents of the Bane deposition not an Issue. The dissent perfectly identified what
is at issue in this case – i.e., the admissibility of the Bane deposition. Admissibility is
concerned with the competence and relevance166 of the evidence, whose admission is
sought. While the dissent quoted at length the Bane deposition, it may not be amiss to
point out that the relevance of the Bane deposition (or, to adopt the dissent’s
characterization, whether "Maurice V. Bane is a vital witness") is not an issue here
unless it can be established first that the Bane deposition is a competent evidence.
Second: Misrepresentation of Cited Authority. The dissent insists that "in Philippine
Jurisprudence, the consolidation of cases merges the different actions into one and the
rights of the parties are adjudicated in a single judgment," citing Vicente J. Francisco. In
our discussion on consolidation, we footnoted the following in response to the dissent’s
position, which we will restate here for emphasis:
In the 1966 edition of Vicente J. Francisco’s Revised Rules of Court, Francisco wrote:
The effect of consolidation of actions is to unite and merge all of the different actions
consolidated into a single action, in the same manner as if the different causes of actions
involved had originally been joined in a single action, and the order of consolidation, if
made by a court of competent jurisdiction, is binding upon all the parties to the different

actions until it is vacated or set aside. After the consolidation there can be no further
proceedings in the separate actions, which are by virtue of the consolidation
discontinued and superseded by a single action, which should be entitled in such
manner as the court may direct, and all subsequent proceedings therein be conducted
and the rights of the parties adjudicated in a single action (1 C.J.S., 113, pp. 1371-1372).
At the very beginning of the discussion on consolidation of actions in the Corpus Juris
Secundum, the following caveat appears:
The term consolidation is used in three different senses. First, where several actions are
combined into one and lose their separate identity and become a single action in which a
single judgment is rendered; second, where all except one of several actions are stayed
until one is tried, in which case the judgment in the one is conclusive as to the others;
third, where several actions are ordered to be tried together but each retains its
separate character and requires the entry of a separate judgment. The failure to
distinguish between these methods of procedure, which are entirely distinct, the two
latter, strictly speaking, not being consolidation, a fact which has not always been noted,
has caused some confusion and conflict in the cases. (1 C.J.S., 107, pp. 1341-1342)
(Emphasis added).
In defining the term "consolidation of actions," Francisco provided a colatilla that the
term "consolidation" is used in three different senses, citing 1 C.J.S. 1341 and 1 Am. Jur.
477 (Francisco, Revised Rules of Court, p. 348).
From the foregoing, it is clear that the dissent appears to have quoted Francisco’s
statement out of context. As it is, the issue of the effect of consolidation on evidence is at
most an unsettled matter that requires the approach we did in the majority’s discussion
on consolidation.167
Third: Misappreciation of the Purpose of Consolidation. The dissent then turns to the
purpose of consolidation – to "expeditiously settle the interwoven issues involved in the
consolidated cases" and "the simplification of the proceedings." It argues that this can
only be achieved if the repetition of the same evidence is dispensed with.
It is unfortunate that the dissent refuses to recognize the fact that since consolidation is
primarily addressed to the court concerned to aid it in dispatching its official business, it
would be in keeping with the orderly trial procedure if the court should have a say on
what consolidation would actually bring168 (especially where several cases are involved
which have become relatively complex). In the present case, there is nothing in the
proceedings below that would suggest that the Sandiganbayan or the parties themselves
(the petitioner and the respondents) had in mind a consolidation beyond joint hearing
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or trial. Why should this Court – which is not a trial court – impose a purported effect
that has no factual or legal grounds?
Fourth: The Due Process Consideration. The dissent argues that even if the consolidation
only resulted in a joint hearing or trial, the "respondents are still bound by the Bane
deposition considering that they were given notice of the deposition-taking." The issue
here boils down to one of due process – the fundamental reason why a hearsay
statement (not subjected to the rigor of cross-examination) is generally excluded in the
realm of admissible evidence – especially when read in light of the general rule that
depositions are not meant as substitute for the actual testimony, in open court, of a party
or witness.
Respondent Enrile had a pending Opposition to the notice of deposition-taking
(questioning the reasonableness thereof – an issue applicable to the rest of the
respondents) which the Sandiganbayan failed to rule on. To make the Sandiganbayan’s
omission worse, the Sandiganbayan blindly relied on the petitioner’s assertion that the
deposition-taking was a matter of right and, thus, failed to address the consequences
and/or issues that may arise from the apparently innocuous statement of the petitioner
(that it intends to use the Bane deposition in Civil Case No. 0009, where only the
respondents, and not Africa, are the parties).169 There is simply the absence of "due" in
due process.
Fifth: Misstatement of the Sandiganbayan’s Action. The dissent repeatedly misstates that
the Sandiganbayan "granted" the request for the deposition-taking. For emphasis, the
Sandiganbayan did not "grant" the request since the petitioner staunchly asserted that
the deposition-taking was a matter of right. No one can deny the complexity of the issues
that these consolidated cases have reached. Considering the consolidation of cases of
this nature, the most minimum of fairness demands upon the petitioner to move for the
taking of the Bane deposition and for the Sandiganbayan to make a ruling thereon
(including the opposition filed by respondent Enrile which equally applies to his co-
respondents). The burgeoning omission and failures that have prevailed in this case
cannot be cured by this Court without itself being guilty of violating the constitutional
guarantee of due process.
Sixth: Issues Posed and Resolved Go Beyond Technicalities. The above conclusions,
contrary to the petitioner’s claim, are not only matters of technicality. Admittedly, rules
of procedure involve technicality, to which we have applied the liberality that technical
rules deserve. But the resolution of the issues raised goes beyond pure or mere
technicalities as the preceding discussions show. They involve issues of due process and
basic unfairness to the respondents, particularly to respondent Enrile, who is portrayed
in the Bane deposition to be acting in behalf of the Marcoses so that these shares should
be deemed to be those of the Marcoses. They involved, too, principles upon which our
 Page 78 of 78

rules of procedure are founded and which we cannot disregard without flirting with the
violation of guaranteed substantive rights and without risking the disorder that these
rules have sought to avert in the course of their evolution.

In the Court En Banc deliberations of December 6, 2011, the Court failed to arrive at a
conclusive decision because of a tie vote (7-7, with one Justice taking no part). The same
vote resulted in the re-voting of December 13, 2011. In this light, the ponencia is deemed
sustained.

WHEREFORE, premises considered, we DISMISS the petition for lack of merit. No costs.

SO ORDERED.

ARTURO D. BRION
Associate Justice