G.R. No.

159288             October 19, 2004

JOHNSON LEE, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and NEUGENE MARKETING, INC., respondents.

Facts:

NEUGENE Marketing, Inc. (NMI) was incorporated in 1978 with funds provided by the Uy Family. One
of the original incorporators, Eugenio Flores, Jr. assigned/divested himself of his shares in favor of Sonny
Moreno, 1,050 shares; Arsenio Yang, Jr., 700 shares and Charles O. Sy, 700 shares.
In 1987, the NMI sold and delivered to the Victorias Milling Company, Inc. (VMCI), in Victorias,
Negros Occidental, 77,500 pieces of empty white bags for the price of 565,750.00. NMI issued Charge
Invoice No. 0809 dated June 11, 1987 to VMCI covering said sale. VMCI again purchased 100,000
pieces of empty white bags from NMI for 730,000.00 for which NMI issued Charge Invoice No. 0810. In
payment of said purchases from NMI, VMCI drew and issued two Bank of the Philippine Islands (BPI)
Checks: Check No. 068706 dated August 3, 1987 in the amount of 565,750.00 and Check No. 068993
dated August 19, 1987 in the amount of 934,400.00. Both checks were payable to the order of NMI.
On March 22, 1988, Johnson Lee, Sonny Moreno, Leoncio Tan and Nicanor Martin filed a petition with
the Securities and Investigation Clearing Department (SICD) of the Commission praying, among other
things, for the annulment or nullification of the Certification of Filing of Resolution of Voluntary
Dissolution of NMI for being contrary to law and its by-laws.
In the meantime, the trustee wrote the petitioner, Johnson Lee, being the president of the company, on
March 8, 1988 requesting him to turn over to it the P1,500,150.00 he received in payment of the empty
bags sold by NMI to VCMI. However, he failed to do so.
Due to nonpayment, a verified complaint for three (3) counts of estafa was filed against the petitioner and
Sonny Moreno with the City Prosecutor’s Office. Appended to the complaint were photocopies of Charge
Invoices, issued by NMI to VMCI.
To prove the loss due to destruction of the original copies of the charge invoices and checks, as well as
the authenticity and due execution thereof, the prosecution presented Ban Hua Flores, who testified that
she saw the two checks in the office of the petitioner at the Singson Building, Plaza Moraga, Sta. Cruz,
Manila. Sometime in 1987, she went to the office of the VMCI and inquired if it still had copies of the
two checks and the clerk thereat informed her that it would be difficult to locate the checks as they were
stored in the bodega, where many other checks were kept. Flores also testified that the signatures at the
dorsal portion of the checks were those of the petitioner, the President of NMI, with whom she had been
working, and that he indorsed and deposited the same on September 4, 1987 with the Solidbank, instead
of the BPI Plaza Cervantes branch in Manila, the official depository bank of NMI. According to Flores,
she was able to secure microfilm copies of the checks from Solidbank, and was sure that the copies of the
checks and invoices were faithful reproductions of the original copies thereof.
Testifying for the prosecution in obedience to a subpoena issued by the court, Merlita Bayaban, Manager
for Corporate Affairs of VMCI, declared that the records section of VMCI, which had custody of all
checks and other corporate records, was near her office. She testified that the checks, including their other
records, were lost during the flood in 1985. She also testified on the Certification issued by Carolina Diaz,
the Comptroller of VMCI, confirming the loss of the two checks. She, however, admitted that she did not
see the original copies of the checks and that she was not a signatory thereto.
The RTC ruled in favor of the prosecution. The accused filed a motion for reconsideration of the order,
claiming that the prosecution failed to prove the authenticity and due execution of the offered documents,
a prerequisite to the admission thereof as secondary evidence. They also filed a Motion for Leave to File a
Demurrer to Evidence. The trial court denied both motions.
The Court of Appeals affirmed the RTC Decision.

Issue:
Can the photocopies of invoices offered as secondary evidence be admitted without proof of its loss or
unavailability and execution of the original?

Held:

The rule applicable for this case is 130, Section 5 of the Revised Rules of Court:
When the original document is unavailable. – When the original document has been lost or
destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence
and the cause of its unavailability without bad faith on his part, may prove its contents by a copy,
or by a recital of its contents in some authentic document, or by the testimony of witnesses in the
order stated.
The court agreed with the petitioner that the Certification signed by Carolina Diaz was inadmissible in
evidence against him because of the failure of the prosecution to present her as witness and to testify on
said certification.
However, the records show that, in obedience to the subpoena duces tecum and ad testificandum issued
by the trial court directing the VMCI to produce the originals of the checks and the charge invoices,
Bayaban, the Manager for Corporate Affairs of VMCI, testified that all its records, including the charge
invoices and checks, were destroyed seven years ago in a flash flood which occurred on November 28,
1995, and that such loss/destruction was known to all the employees of VMCI, including herself.
Contrary to the claim of the petitioner, the prosecution adduced preponderant evidence to prove the
existence, the due execution and the authenticity of the said checks and charge invoices consisting of the
admission of no less than the petitioner in his counter-affidavit. The petitioner admitted therein that he
received the total amount of P1,500,150.00 from VMCI in full payment of the delivery and sale of the
empty bags by NMI to VMCI and that the said amount was in the custody of the said corporation. The
decision of the Court of Appeals is affirmed.

BPI v. MENDOZA
Bank of the Philippine Islands Vs. Amado M. Mendoza and Maria Marcos Vda. De Mendoza
G.R. No. 198799
March 20, 2017

FACTS:

On April 8, 1997, respondents: (a) opened a foreign currency savings (US savings account) at BPI-Gapan
Branch and deposited therein the total amount of US$ 16,264.00, in US Treasury Check payable to "Ma.
Marcos Vda. de Mendoza" (subject check); and (b) placed the amount of US$2,000.00 in a time deposit
account. After the lapse of the thirty (30) day clearing period on May 9 and 13, 1997, respondents
withdrew the amount of US$16,244.00 from the US savings account, leaving only US$20.00 for bank
charges.
On June 26, 1997, BPI received a notice from its correspondent bank, Bankers Trust Company New York
(Bankers Trust), that the subject check was dishonored due to "amount altered", as evidenced by (1) an
electronic mail (e-mail) advice from Bankers Trust, and (2) a photocopy of the subject check with a
notation "endorsement cancelled" by Bankers Trust as the original copy of the subject check was
allegedly confiscated by the government of the United States of America (US government).

This prompted BPI to inform respondents of such dishonor and to demand reimbursement. BPI then
claimed that: (a) on July 18, 1997, respondents allowed BPI to apply the proceeds of their time deposit
account in the amount of US$2,015.00 to their outstanding obligation; (b) upon the exhaustion of the said
time deposit account, Amado gave BPI a promissory note dated September 8, 1997 containing his
promise to pay BPI-Gapan Branch the amount of P1,000.00 monthly; and (c) when respondents failed to
fulfill their obligation despite repeated demands, BPI was constrained to give a final demand letter to
respondents on November 27, 1997.

In a Decision dated May 9, 2007, the RTC ruled in BPI's favor. Aggrieved, respondents appealed to the
CA. In a Decision dated February 4, 2011, the CA reversed and set aside the RTC's ruling, and
consequently, dismissed BPI's complaint for lack of merit. It held that BPI failed to prove the dishonor of
the subject check, since: (a) the presentation of a mere photocopy of the subject check is in violation of
the Best Evidence Rule; and (b) the e-mail advice from Bankers Trust was not properly authenticated in
accordance with the Rules on Electronic Evidence as the person who sent the e-mail advice was neither
identified nor presented in court.

ISSUE:

Whether or not the BPI had proven its cause of action by preponderance of evidence.

FACTS:

Yes. The Supreme Court finds the petition meritorious. Section 3, Rule 130 of the Rules of Court reads:
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; In order to fall under the aforesaid exception, it is crucial that the
offeror proves: (a) the existence or due execution of the original; (b) the loss and destruction of the
original, or the reason for its non-production in court; and (c) the absence of bad faith on the part of the
offeror to which the unavailability of the original can be attributed. In this case, BPI sufficiently complied
with the foregoing requisites.

First, the existence or due execution of the subject check was admitted by both parties. Second, the reason
for the non-presentation of the original copy of the subject check was justifiable as it was confiscated by
the US government for being an altered check. The subject check, being a US Treasury Warrant, is not an
ordinary check, and practically speaking, the same could not be easily obtained. Lastly, absent any proof
to the contrary and for the reasons already stated, no bad faith can be attributed to BPI for its failure to
present the original of the subject check. Thus, applying the exception to the Best Evidence Rule, the
presentation of the photocopy of the subject check as secondary evidence was permissible.

WHEREFORE, the petition is GRANTED. The Decision dated February 4, 2011 and the Resolution
dated August 26, 2011 of the Court of Appeals in CA-G.R. CV No. 91704 is hereby REVERSED and
SET ASIDE. The Decision dated May 9, 2007 of the Regional Trial Court of Gapan City, Nueva Ecija,
Branch 87 in Civil Case No. 1913 is REINSTATED with MODIFICATION, adjusting the interest
imposed on the amount ordered to be returned, i.e., P369, 600.51, to six percent (6%) per annum
reckoned from the date of extrajudicial demand on June 27, 1997, until fully paid.

THERESITA, JUAN, ASUNCION, PATROCINIA, RICARDO, and GLORIA, all surnamed

DIMAGUILA vs. JOSE and SONIA A. MONTEIRO
G.R. No. 201011 January 27, 2014

Facts:
On July 5, 1993, respondent spouses, Jose and Sonia Monteiro, along with Jose, Gerasmo, Elisa and
Clarita Nobleza filed a complaint for Partition and Damages before the RTC against the Dimaguilas,
together with the Borlazas, alleging that the parties were co-owners and prayed for the partition of a
residential house and lot in Laguna covered by Tax Declaration No. 1453.

The Monteiros anchored their claim on a Deed of Sale executed in their favor by the heirs of Pedro
Dimaguila. The Dimaguilas argued that there was no co-ownership at all since the property had long been
partitioned to Perfecto and Vitaliano Dimaguila, with Perfecto becoming owner of the southern half and
Vitaliano owning the northern half. The defendants claim that they are Vitaliano’s heirs and further
averred that the Monteiro’s claim to the property is null for they were not heirs of either Perfecto or
Vitaliano.

Petitioners filed a Petition for Certiorari before the CA assailing the RTC’s orders which denied several
of their motions and the proceedings were suspended while such petition was pending. The CA upheld the
RTC’s orders and, upon resumption of the proceedings, the spouses Monteiro filed their Motion for Leave
to Amend and/or Admit Amended Complaint which was granted by the RTC. The Monteiros admitted in
the amended complaint the defendant’s allegation of a partition and aver that a third of Perfecto’s share
was sold to them through Bilihan; and that, upon their attempt to take possession of that portion, they
found that the Dimaguilas were occupying it.

The Dimaguilas, in their answer to the amended complaint now contravened their original answer that the
subject property was actually divided into northern and southern halves, replacing it with a division into
two and share and share alike. This resulted to an admission of a co-ownership, contrary to their original
position. According to the Dimaguilas, the Bilihan€ also violated Article 1485 of the Civil Code for not
specifying the metes and bounds of the property sold and that, even if it was specified, the sale was still
void since a co-owner can only sell his undivided share in the property.

The RTC ruled in favor of Spouses Monteiro after perusing evidence aliunde of a cadastral map of Liliw,
Laguna and a corresponding list of claimant as to show that the property had indeed been partitioned into
southern and northern portions. The RTC concluded that the Dimaguilas were stopped from denying this
partition and the Bilihan document was regular and authentic absent any evidence to the contrary.

The Dimaguilas appealed their case to the CA which affirmed the trial court’s decision. A motion for
reconsideration was subsequently filed by the petitioners but it was denied, hence, this appeal under Rule
45.

Issues:
1) Whether there was a partition of the subject property; and
2) Whether the 1/3 portion of the southern half of the subject property was sold to the
respondent spouses.

Ruling:
The petition is DENIED. Both aforementioned issues are answered in the affirmative. The Supreme Court
points out that to determine whether there was a partition and a sale of the 1/3 portion of the property
requires an evaluation of the evidence. This entails a question of fact which is beyond the ambit of Rule
45 upon which this petition is based. On this ground alone, the petition could be denied.

However, the Supreme Court delved into the concepts of evidence to put the case to rest. Preponderance
of evidence; definition Spouses Monteiro, as plaintiffs in the original case, had the burden of proof to
establish their case by a preponderance of evidence, which is the weight, credit, and value of the
aggregate evidence on either side, synonymous with the term greater weight of the evidence.

Preponderance of evidence is evidence, which is more convincing to the court as worthy of belief than
that which is offered in opposition thereto. Admissions; contradiction Section 4 of Rule 129 of the Rules
of Court provides that an admission made by a party in the course of the proceedings in the same case
does not require proof, and may be contradicted only by showing that it was made through palpable
mistake.

The petitioners argue that such admission was the palpable mistake of their former counsel in his rush to
file the answer, a copy of which was not provided to them. This contention is unacceptable. It is a purely
self-serving claim unsupported by any iota of evidence.

Bare allegations, unsubstantiated by evidence, are not equivalent to proof. Admissions; rendered
conclusive through estoppels Article 1431 of the Civil Code provides that through estoppel, an admission
is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person
relying thereon. The respondent spouses had clearly relied on the petitioners admission and so amended
their original complaint for partition to one for recovery of possession of a portion of the subject property.

Thus, the petitioners are now estopped from denying or attempting to prove that there was no partition of
the property.

Considering that an admission does not require proof, the admission of the petitioners would actually be
sufficient to prove the partition even without the documents presented by the respondent spouses. If
anything, the additional evidence they presented only served to corroborate the petitioners admission.
Best Evidence Rule Section 3(d) of Rule 130 of the Rules of Court provides that when the subject of
inquiry is the contents of a document, no evidence shall be admissible other than the original document
itself, except when the original is a public record in the custody of a public officer or is recorded in a
public office. Section 7 of the same Rule provides that when the original of a document is in the custody
of a public officer or is recorded in a public office, its contents may be proved by a certified copy issued
by the public officer in custody thereof.

Section 24 of Rule 132 provides that the record of public documents may be evidenced by a copy attested
by the officer having the legal custody or the record.

Hearsay Rule Section 44 of Rule 130 of the Rules of Court similarly provides that entries in official
records are an exception to the rule. The rule provides that entries in official records made in the
performance of the duty of a public officer of the Philippines, or by a person in the performance of a duty
specially enjoined by law, are prima facie evidence of the facts therein stated. The necessity of this rule
consists in the inconvenience and difficulty of requiring the official’s attendance as a witness to testify to
the innumerable transactions in the course of his duty. The document’s trustworthiness consists in the
presumption of regularity of the performance of official duty. Cadastral maps are the output of cadastral
surveys. The DENR is the department tasked to execute, supervise and manage the conduct of cadastral
surveys. It is, therefore, clear that the cadastral map and the corresponding list of claimants qualify as
entries in official records as they were prepared by the DENR, as mandated by law. As such, they are
exceptions to the hearsay rule and are prima facie evidence of the facts stated therein.
MARINA LLEMOS, PEDRO LLEMOS, FELISA LLEMOS and VIRGINIA M.
JIMENEZ, Petitioners,
vs.
ROMEO LLEMOS, et al

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court questioning
the Decision1 dated September 19, 2001 promulgated by the Court of Appeals (CA) in CA-G.R. CV No.
53112, which reversed the Decision dated February 29, 1996 of the Regional Trial Court, Branch 41, of
Dagupan City (RTC).

The case originated from a Complaint filed by the respondents, the compulsory heirs of the late Saturnina
Salvatin (Saturnina). The Complaint sought to declare the nullity of the transfer certificate of title of the
petitioners on the ground that their predecessor-in-interest, the late Felipe Llemos (Felipe), acquired the
property described therein through a forged deed of sale.

The facts of the case, as summarized by the CA, are as follows:

[Respondents] and [petitioners] are the heirs of the late Saturnina Salvatin Llemos, being their
grandmother. The late Saturnina Salvatin Llemos had four (4) children, namely: Adriano Llemos,
Santiago Llemos, Domingo Llemos, who were the predecessors-in-interest of [respondents], and Felipe
Llemos, who was the predecessor-in-interest of herein [petitioners].

During her lifetime, the late Saturnina Salvatin Llemos acquired a parcel of land described as Lot No.
2059, covered by Original Certificate of Title No. 38564, which all the parties presently occupy.

xxxx

On November 5, 1964, the Register of Deeds of Dagupan, Pangasinan, cancelled Original Certificate of
Title No. 38564 (Exhibit "B") and issued a new one, Transfer Certificate of Title No. 15632 (Exhibit "D")
in the name of Felipe Llemos, by virtue of a Deed of Absolute Sale thumb marked by Saturnina Salvatin
Llemos conveying said property to Felipe Llemos, herein [petitioners’] predecessor-in-interest, for a
consideration of P200.00 (Exhibit "C").

Sometime in 1991, Jovita Llemos Laca, one of the [respondents], decided to improve her residential
house on said parcel of land. Hence, she borrowed the title of the property from one of the [petitioners],
Felisa Llemos, for purposes of securing a building permit. It was on such instance that [respondents]
discovered that the title of the property was already in the name of herein [petitioners].

On August 10, 1992, [respondents] filed the instant action for Declaration of Nullity of said Transfer
Certificate [of] Title No. 15632 and for damages. The complaint, was amended on October 24, 1995 to
include additional plaintiffs who are likewise heirs of Saturnina Salvatin Llemos.

In their Answer, [petitioners] alleged that the late Saturnina Salvatin Llemos conveyed to their father, the
late Felipe Llemos, the subject parcel of land, thus, said property is their inheritance from their father.

During the pre-trial conference, the parties failed to settle their differences. Hence, trial proceeded.

x x x x2
On February 29, 1996, the RTC ruled in favor of the petitioners, then the defendants. The dispositive
portion of the Decision states:

WHEREFORE, judgment is hereby rendered dismissing the complaint with costs against plaintiffs.

There is no pronouncement as to damages and attorney’s fees.

SO ORDERED.3

The RTC held that although respondent Eusebia Ll. Fernandez (Eusebia) testified that Saturnina was her
grandmother and that she died in 1938, Eusebia did not testify on the fact of death of Saturnina from
personal knowledge; that the respondents’ cause of action heavily rests on the Certificate of Death 4 only
and no other evidence; that since at the time Saturnina died, there was already an existing public registry
by virtue of Act 3753, hence, no other entity, not even the Catholic Church, had the authority to issue a
certificate regarding the fact of death which can qualify as a public document; that, for these reasons, the
Certificate of Death is a private document and must be authenticated to be admissible as evidence; that
respondents failed to notarize or otherwise authenticate the same and, hence, the facts stated therein are
hearsay; and finally, since the deed in question was registered as early as 1964, more than 20 years had
already lapsed, hence, the respondents’ cause of action had already prescribed at the time of the filing of
their Complaint on August 10, 1992.

On appeal, the CA reversed the RTC in its Decision dated September 19, 2001, the dispositive portion of
which reads:

WHEREFORE, premises considered, the Decision dated February 29, 1996 rendered by the Regional
Trial Court of Dagupan City, Branch 41, is hereby REVERSED and SET ASIDE, and a new one is
entered as follows:

1. The Deed of Absolute Sale (Exhibit "3") is hereby declared NULL and VOID;

2. The parties are declared co-owners of the subject parcel of land owned by the late Saturnina
Salvatin Llemos, as previously covered by Original Certificate of Title No. 38564;

3. Transfer Certificate of Title No. 15632 is ordered cancelled;

No pronouncement as to costs.

SO ORDERED.5

The CA held that the entries in the Registry Book of St. John Metropolitan Cathedral in Dagupan City
may be considered as entries made in the course of business under then Section 37 of Rule 130, 6 which is
an exception to the hearsay rule; that Saturnina passed away on March 12, 1938 as stated by the Book of
the Dead of the Catholic Church; that, for this reason, the Deed of Absolute Sale purportedly executed on
November 5, 1964 is invalid, as there could not possibly be a meeting of the minds between a dead person
and a living one; that all the parties in the instant suit are presently occupying the property in question;
and finally, that the petitioners cannot invoke the indefeasibility of title since it may still be attacked even
beyond the one year period reckoned from the date of its issuance on the ground of fraud.

On appeal to this Court, the petitioners raise the following issues:

WHETHER THE CAUSE OF ACTION HAD PRESCRIBED OR THAT THE RESPONDENTS ARE
GUILTY OF LACHES.7

THE HONORABLE COURT OF APPEALS ERRED IN GIVING UNDUE WEIGHT TO THE

CERTIFICATE OF DEATH ISSUED BY THE CHURCH WHEN THE REGISTER WAS NEVER
PRESENTED NOR THE CLERK WHO PREPARED THE SAME WAS PRESENTED FOR ITS
AUTHENTICATION.8

The issue on prescription deserves scant consideration. The Court has recently affirmed the rule that an
action for annulment of title or reconveyance based on fraud is imprescriptible where the plaintiff is in
possession of the property subject of the acts. 9 It is not disputed that respondents (plaintiffs), including
petitioners (defendants), presently occupy the property in question.

Nor can laches be invoked against respondents. In Agra v. Philippine National Bank,10 the Court held that
prescription is different from laches, as the latter is principally a question of equity and each case is to be
determined according to its particular circumstances.

In the present case, evidence shows that the Deed of Absolute Sale (Exhibit "C") dated November 5,
1964, conveying the subject property to Felipe, petitioners’ predecessor-in-interest, was thumbmarked by
Saturnina, by virtue of which, the Register of Deeds of Dagupan, Pangasinan cancelled Original
Certificate of Title No. 38564 (Exhibit "B") and issued Transfer Certificate of Title (TCT) No. 15632
(Exhibit "D") on November 5, 1964 in the name of Felipe.

Petitioners insist that respondents are guilty of laches considering that the latter filed the complaint for
declaration of nullity of the TCT only on August 10, 1992 or almost 28 years after the TCT was issued to
the former on November 5, 1964. On the other hand, respondents claim that when the Deed of Absolute
Sale, on which basis the TCT was issued, was purportedly thumbmarked by Saturnina on November 5,
1964, the latter had been dead since 1938; that therefore fraud attended the execution of the Deed of
Absolute Sale; that the TCTs in the names of petitioners are null and void; and that they discovered the
fact of fraud only in 1991.

It is a well-settled doctrine that laches cannot be used to defeat justice or perpetuate fraud and injustice.
Neither should its application be used to prevent the rightful owners of a property from recovering what
has been fraudulently registered in the name of another. 11

However, in order that respondents’ complaint may prosper, the burden of proof is on them to show by
preponderance of evidence that the execution of the Deed of Absolute Sale was fraudulent and,
consequently, the issuance of the TCT, a nullity.

Respondents rely principally on the Certificate of Death 12 issued by Rev. Fr. Camilo V. Natividad on
January 29, 1991, attesting that "Salvatin Salvatin", widow of Andres Llemos died on the 12th day of
March 1938 and was buried in the Roman Catholic Cemetery of the parish of St. John Metropolitan
Cathedral, Dagupan City. The Certificate further attests that it is a true copy of the original records as it
appears in the Register of Dead of said Parish, Book No. 20, Folio No. 91.

It is well-settled that Church registries of births, marriages, and deaths made subsequent to the
promulgation of General Orders No. 68 13 and the passage of Act No. 190 14 are no longer public writings,
nor are they kept by duly authorized public officials. 15 They are private writings and their authenticity
must therefore be proved as are all other private writings in accordance with the rules of evidence. 16
Respondents failed to establish the due execution and authenticity of the Certificate of Death in
accordance with Section 20, Rule 132 of the Rules of Court which provides:

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

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

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

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

As aptly pointed out by the RTC, respondents failed to present a witness to prove the due execution and
authenticity of the Certificate of Death.

Nonetheless, the CA considered the entry in the Registry Book of St. John Metropolitan Cathedral as to
the date of death as admissible in evidence on the ground that it is an entry in the course of official
business which is an exception to the hearsay rule, citing Section 37, Rule 130 of the Rules of Court, viz:

SEC. 37. Entries in the course of business. - Entries made at, or near the time of the transactions to which
they refer, by a person deceased, outside of the Philippines or unable to testify, who was in a position to
know the facts therein stated, may be received as prima facie evidence, if such person made the entries in
his professional capacity or in the performance of duty and in the ordinary or regular course of business
or duty.17

The CA committed a reversible error in considering said evidence.

Unfortunately, respondents did not submit as evidence the Register of Dead, Book No. 20 of St. John
Metropolitan Cathedral and they failed to comply with the provisions of Section 5, Rule 130, to wit:

SEC. 5. When original document is unavailable. – When the original document has been lost or
destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the
cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital
of its contents in some authentic document, or by the testimony of witnesses in the order stated. 18

Under Section 3, Rule 130, Rules of Court, the original document must be produced and no evidence
shall be admissible other than the original document itself, except in the following cases:

xxxx

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.

None of the exceptions are attendant in the present case. The Register of Dead is in the custody of St.
John Metropolitan Cathedral but respondents failed to show that it presented the Certificate of Death
because the Register of Dead cannot be produced in court. There is no showing that the Register of Dead
consists of numerous documents which cannot be examined in court without great loss of time and the
fact sought to be established from it is only the general result of the whole. Further, respondents failed to
present an authentic document that recites the contents of the Register of Dead. As earlier held, the
Certificate of Death is a private document and not a public document; and respondents failed to prove its
authenticity by their failure to present any witness to testify on the due execution and genuineness of the
signature of Fr. Natividad, pursuant to Section 20, Rule 132.

Moreover, the Court notes the absence of evidence showing that "Salvatin Salvatin" mentioned in the
Certificate of Death is the same "Saturnina Salvatin" referred to by them as their predecessor-in-interest;
and that Father Natividad has personal knowledge of the date of death of "Salvatin Salvatin". The CA
merely relied on the Register of Dead of the parish which, as earlier pointed out, was not presented in
court.

On the other hand, petitioners presented the questioned Deed of Absolute Sale dated November 5, 1964,
marked as Exhibit "3". It is a notarized document which, as correctly found by the RTC, had been

[E]xecuted with all the formalities of law and ratified by a notary public who attested that the vendor
Saturnina Salvatin appeared before him and acknowledged her deed to be her free act and deed. It was
executed in the presence of two witnesses. Maria Llemos Jimenez likewise testified that the deed was
properly executed for valuable consideration at the time. 19

A notarized document is executed to lend truth to the statements contained therein and to the authenticity
of the signatures. Notarized documents enjoy the presumption of regularity which can be overturned only
by clear and convincing evidence.20

As found earlier, respondents failed to establish the date of death of their predecessor-in-interest which
could have proven that the thumbmark of Saturnina in the Deed of Absolute Sale was fraudulently affixed
because she had died before the deed of sale was purportedly executed by her.

In fine, respondents failed to establish by preponderance of evidence their claim that petitioners’
predecessor-in-interest obtained his title through fraud.

WHEREFORE, the petition is GRANTED. The challenged Decision of the Court of Appeals is
hereby REVERSED and SET ASIDE. The complaint of respondents is DISMISSED.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 98695 January 27, 1993

JUAN J. SYQUIA, CORAZON C. SYQUIA, CARLOTA C. SYQUIA, CARLOS C. SYQUIA and

ANTHONY C. SYQUIA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, and THE MANILA MEMORIAL PARK
CEMETERY, INC., respondents.

Pacis & Reyes Law Offices for petitioners.

Augusto S. San Pedro & Ari-Ben C. Sebastian for private respondents.

CAMPOS, JR., J.:

Herein petitioners, Juan J. Syquia and Corazon C. Syquia, Carlota C. Syquia, Carlos C. Syquia, and
Anthony Syquia, were the parents and siblings, respectively, of the deceased Vicente Juan Syquia. On
March 5, 1979, they filed a complaint 1 in the then Court of First Instance against herein private
respondent, Manila Memorial Park Cemetery, Inc. for recovery of damages arising from breach of
contract and/or quasi-delict. The trial court dismissed the complaint.

The antecedent facts, as gathered by the respondent Court, are as follows:

On March 5, 1979, Juan, Corazon, Carlota and Anthony all surnamed Syquia, plaintiff-
appellants herein, filed a complaint for damages against defendant-appellee, Manila
Memorial Park Cemetery, Inc.

The complaint alleged among others, that pursuant to a Deed of Sale (Contract No. 6885)
dated August 27, 1969 and Interment Order No. 7106 dated July 21, 1978 executed
between plaintiff-appellant Juan J. Syquia and defendant-appellee, the former, father of
deceased Vicente Juan J. Syquia authorized and instructed defendant-appellee to inter the
remains of deceased in the Manila Memorial Park Cemetery in the morning of July 25,
1978 conformably and in accordance with defendant-appellant's (sic) interment
procedures; that on September 4, 1978, preparatory to transferring the said remains to a
newly purchased family plot also at the Manila Memorial Park Cemetery, the concrete
vault encasing the coffin of the deceased was removed from its niche underground with
the assistance of certain employees of defendant-appellant (sic); that as the concrete vault
was being raised to the surface, plaintiffs-appellants discovered that the concrete vault
had a hole approximately three (3) inches in diameter near the bottom of one of the walls
closing out the width of the vault on one end and that for a certain length of time (one
 hour, more or less), water drained out of the hole; that because of the aforesaid discovery,
plaintiffs-appellants became agitated and upset with concern that the water which had
collected inside the vault might have risen as it in fact did rise, to the level of the coffin
and flooded the same as well as the remains of the deceased with ill effects thereto; that
pursuant to an authority granted by the Municipal Court of Parañaque, Metro Manila on
September 14, 1978, plaintiffs-appellants with the assistance of licensed morticians and
certain personnel of defendant-appellant (sic) caused the opening of the concrete vault on
September 15, 1978; that upon opening the vault, the following became apparent to the
plaintiffs-appellants: (a) the interior walls of the concrete vault showed evidence of total
flooding; (b) the coffin was entirely damaged by water, filth and silt causing the wooden
parts to warp and separate and to crack the viewing glass panel located directly above the
head and torso of the deceased; (c) the entire lining of the coffin, the clothing of the
deceased, and the exposed parts of the deceased's remains were damaged and soiled by
the action of the water and silt and were also coated with filth.

Due to the alleged unlawful and malicious breach by the defendant-appellee of its
obligation to deliver a defect-free concrete vault designed to protect the remains of the
deceased and the coffin against the elements which resulted in the desecration of
deceased's grave and in the alternative, because of defendant-appellee's gross negligence
conformably to Article 2176 of the New Civil Code in failing to seal the concrete vault,
the complaint prayed that judgment be rendered ordering defendant-appellee to pay
plaintiffs-appellants P30,000.00 for actual damages, P500,000.00 for moral damages,
exemplary damages in the amount determined by the court, 20% of defendant-appellee's
total liability as attorney's fees, and expenses of litigation and costs of suit. 2

In dismissing the complaint, the trial court held that the contract between the parties did not guarantee
that the cement vault would be waterproof; that there could be no quasi-delict because the defendant was
not guilty of any fault or negligence, and because there was a pre-existing contractual relation between
the Syquias and defendant Manila Memorial Park Cemetery, Inc.. The trial court also noted that the father
himself, Juan Syquia, chose the gravesite despite knowing that said area had to be constantly sprinkled
with water to keep the grass green and that water would eventually seep through the vault. The trial court
also accepted the explanation given by defendant for boring a hole at the bottom side of the vault: "The
hole had to be bored through the concrete vault because if it has no hole the vault will (sic) float and the
grave would be filled with water and the digging would caved (sic) in the earth, the earth would caved
(sic) in the (sic) fill up the grave."3

From this judgment, the Syquias appealed. They alleged that the trial court erred in holding that the
contract allowed the flooding of the vault; that there was no desecration; that the boring of the hole was
justifiable; and in not awarding damages.

The Court of Appeals in the Decision4 dated December 7, 1990 however, affirmed the judgment of
dismissal. Petitioner's motion for reconsideration was denied in a Resolution dated April 25, 1991. 5

Unsatisfied with the respondent Court's decision, the Syquias filed the instant petition. They allege herein
that the Court of Appeals committed the following errors when it:

1. held that the contract and the Rules and Resolutions of private respondent allowed the
flooding of the vault and the entrance thereto of filth and silt;
 2. held that the act of boring a hole was justifiable and corollarily, when it held that no act
of desecration was committed;

3. overlooked and refused to consider relevant, undisputed facts, such as those which
have been stipulated upon by the parties, testified to by private respondent's witnesses,
and admitted in the answer, which could have justified a different conclusion;

4. held that there was no tort because of a pre-existing contract and the absence of
fault/negligence; and

5. did not award the P25,000.00 actual damages which was agreed upon by the parties,
moral and exemplary damages, and attorney's fees.

At the bottom of the entire proceedings is the act of boring a hole by private respondent on the vault of
the deceased kin of the bereaved petitioners. The latter allege that such act was either a breach of private
respondent's contractual obligation to provide a sealed vault, or, in the alternative, a negligent act which
constituted a quasi-delict. Nonetheless, petitioners claim that whatever kind of negligence private
respondent has committed, the latter is liable for desecrating the grave of petitioners' dead.

In the instant case, We are called upon to determine whether the Manila Memorial Park Cemetery, Inc.,
breached its contract with petitioners; or, alternatively, whether private respondent was guilty of a tort.

We understand the feelings of petitioners and empathize with them. Unfortunately, however, We are more
inclined to answer the foregoing questions in the negative. There is not enough ground, both in fact and in
law, to justify a reversal of the decision of the respondent Court and to uphold the pleas of the petitioners.

With respect to herein petitioners' averment that private respondent has committed culpa aquiliana, the
Court of Appeals found no negligent act on the part of private respondent to justify an award of damages
against it. Although a pre-existing contractual relation between the parties does not preclude the existence
of a culpa aquiliana, We find no reason to disregard the respondent's Court finding that there was no
negligence.

Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict . . . .
(Emphasis supplied).

In this case, it has been established that the Syquias and the Manila Memorial Park Cemetery,
Inc., entered into a contract entitled "Deed of Sale and Certificate of Perpetual Care" 6 on August
27, 1969. That agreement governed the relations of the parties and defined their respective rights
and obligations. Hence, had there been actual negligence on the part of the Manila Memorial Park
Cemetery, Inc., it would be held liable not for a quasi-delict or culpa aquiliana, but
for culpa contractual as provided by Article 1170 of the Civil Code, to wit:

Those who in the performance of their obligations are guilty of fraud, negligence, or
delay, and those who in any manner contravene the tenor thereof, are liable for damages.

The Manila Memorial Park Cemetery, Inc. bound itself to provide the concrete box to be send in the
interment. Rule 17 of the Rules and Regulations of private respondent provides that:
 Rule 17. Every earth interment shall be made enclosed in a concrete box, or in an outer
wall of stone, brick or concrete, the actual installment of which shall be made by the
employees of the Association.7

Pursuant to this above-mentioned Rule, a concrete vault was provided on July 27, 1978, the day before
the interment, and was, on the same day, installed by private respondent's employees in the grave which
was dug earlier. After the burial, the vault was covered by a cement lid.

Petitioners however claim that private respondent breached its contract with them as the latter held out in
the brochure it distributed that the . . . lot may hold single or double internment (sic) underground
in sealed concrete vault."8 Petitioners claim that the vault provided by private respondent was not sealed,
that is, not waterproof. Consequently, water seeped through the cement enclosure and damaged
everything inside it.

We do not agree. There was no stipulation in the Deed of Sale and Certificate of Perpetual Care and in the
Rules and Regulations of the Manila Memorial Park Cemetery, Inc. that the vault would be waterproof.
Private respondent's witness, Mr. Dexter Heuschkel, explained that the term "sealed" meant "closed." 9 On
the other hand, the word "seal" is defined as . . . any of various closures or fastenings . . . that cannot be
opened without rupture and that serve as a check against tampering or unauthorized opening."  10 The
meaning that has been given by private respondent to the word conforms with the cited dictionary
definition. Moreover, it is also quite clear that "sealed" cannot be equated with "waterproof". Well settled
is the rule that when the terms of the contract are clear and leave no doubt as to the intention of the
contracting parties, then the literal meaning of the stipulation shall control. 11 Contracts should be
interpreted according to their literal meaning and should not be interpreted beyond their obvious
intendment. 12 As ruled by the respondent Court:

When plaintiff-appellant Juan J. Syquia affixed his signature to the Deed of Sale (Exhibit
"A") and the attached Rules and Regulations (Exhibit "1"), it can be assumed that he has
accepted defendant-appellee's undertaking to merely provide a concrete vault. He can not
now claim that said concrete vault must in addition, also be waterproofed (sic). It is basic
that the parties are bound by the terms of their contract, which is the law between them
(Rizal Commercial Banking Corporation vs. Court of Appeals, et al. 178 SCRA 739).
Where there is nothing in the contract which is contrary to law, morals, good customs,
public order, or public policy, the validity of the contract must be sustained (Phil.
American Insurance Co. vs. Judge Pineda, 175 SCRA 416). Consonant with this ruling, a
contracting party cannot incur a liability more than what is expressly specified in his
undertaking. It cannot be extended by implication, beyond the terms of the contract
(Rizal Commercial Banking Corporation vs. Court of Appeals, supra). And as a rule of
evidence, where the terms of an agreement are reduced to writing, the document itself,
being constituted by the parties as the expositor of their intentions, is the only instrument
of evidence in respect of that agreement which the law will recognize, so long as its (sic)
exists for the purpose of evidence (Starkie, Ev., pp. 648, 655, Kasheenath vs. Chundy, 5
W.R. 68 cited in Francisco, Revised Rules of Court in the Phil. p. 153, 1973 Ed.). And if
the terms of the contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control (Santos vs. CA, et
al., G. R. No. 83664, Nov. 13, 1989; Prudential Bank & Trust Co. vs. Community
Builders Co., Inc., 165 SCRA 285; Balatero vs. IAC, 154 SCRA 530). 13

We hold, therefore, that private respondent did not breach the tenor of its obligation to the Syquias. While
this may be so, can private respondent be liable for culpa aquiliana for boring the hole on the vault? It
cannot be denied that the hole made possible the entry of more water and soil than was natural had there
been no hole.

The law defines negligence as the "omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of the time and of the place." 14 In the
absence of stipulation or legal provision providing the contrary, the diligence to be observed in the
performance of the obligation is that which is expected of a good father of a family.

The circumstances surrounding the commission of the assailed act — boring of the hole — negate the
allegation of negligence. The reason for the act was explained by Henry Flores, Interment Foreman, who
said that:

Q It has been established in this particular case that a certain Vicente

Juan Syquia was interred on July 25, 1978 at the Parañaque Cemetery of
the Manila Memorial Park Cemetery, Inc., will you please tell the Hon.
Court what or whether you have participation in connection with said
internment (sic)?

A A day before Juan (sic) Syquia was buried our personnel dug a grave.
After digging the next morning a vault was taken and placed in the grave
and when the vault was placed on the grave a hole was placed on the
vault so that water could come into the vault because it was raining
heavily then because the vault has no hole the vault will float and the
grave would be filled with water and the digging would caved (sic) in
and the earth, the earth would (sic) caved in and fill up the
grave. 15 (Emphasis ours)

Except for the foreman's opinion that the concrete vault may float should there be a heavy rainfall, from
the above-mentioned explanation, private respondent has exercised the diligence of a good father of a
family in preventing the accumulation of water inside the vault which would have resulted in the caving
in of earth around the grave filling the same with earth.

Thus, finding no evidence of negligence on the part of private respondent, We find no reason to award
damages in favor of petitioners.

In the light of the foregoing facts, and construed in the language of the applicable laws and jurisprudence,
We are constrained to AFFIRM in toto the decision of the respondent Court of Appeals dated December
7, 1990. No costs.

SO ORDERED.
G.R. No. 55691 May 21, 1992

ESPERANZA BORILLO, in her behalf and in behalf of her children, petitioner,

vs.
HONORABLE COURT OF APPEALS and CATALINA BORILLO, respondents.

Crisostomo F. Pariñas for petitioner.

DAVIDE, JR., J.:

In this petition for review on certiorari under Rule 45 of the Rules of Court filed on 24 November 1980,
petitioner urges this Court to review and reverse the decision 1 of the Court of Appeals (Third Division)
in C.A.-G.R. No. 64536-R, promulgated on 3 September 1980, which reversed and set aside the 3 June
1978 decision of Branch II of the then Court of First Instance (now Regional Trial Court) of Abra in Civil
Case No. 1043.

On 10 February 1977, petitioner, for herself and on behalf of her children, filed before the
abovementioned trial court a complaint against private respondent and Marcos Borillo for the recovery of
several parcels of land located at Bugbuguis, Quillat, Langiden, Abra particularly described in said
complaint, under the first cause of action, as follows:

(a) A parcel of land (Riceland unirr. and pastureland) . . . with an area of 1231 sq. m.;
with assessed value in the sum of P40.00; under Tax Declaration No. 6319 in the name of
Esperanza Borillo, et al.;

(b) A parcel of land (Riceland unirr.) . . . with an area of 980 sq. m.; with an assessed
value in the sum of P40.00; under Tax Declaration No. 6320 in the name of Esperanza
Borillo, et al.;

(c) A parcel of land (Riceland unirr.) . . . with an area of 698 sq. m.; with assessed value
in the sum of P20.00; under Tax Declaration No. 6321 in the name of Esperanza
Borillo, et al.;

(d) A parcel of land (Cornland) . . . with an area of 570 sq. m.; with an assessed value of
P20.00; under Tax Declaration No. 6322 in the name of Esperanza Borillo, et al. 2

and one-fifth (1/5) undivided portion of two (2) parcels of land, also located in the same place as
the above four (4) parcels, particularly described under the second cause of action, thus:
 (e) A parcel of land (Riceland unirr.) . . . with an area of 1440 sq. m.; with an assessed
value of P60.00; under Tax Declaration No. 1745 in the name of Venancio Borillo;

(f) A parcel of land (Cornland) . . . with an area of 684 sq. m.; with an assessed value of
P20.00; under Tax Declaration No. 0746 in the name of Venancio Borillo.3

The complaint was docketed as Civil Case No. 1043.

In the complaint, petitioner alleges that the abovementioned parcels (a), (b), (c) and (d) were originally
owned by her late husband, Elpidio Borillo, with whom she had four (4) children, namely: Patricia,
Melecio, Bonifacia and Quirino. Although said parcels of land were unregistered, they were declared in
1948 in the name of Elpidio under Tax Declaration Nos. 0731, 0732, 0733 and 0734,
respectively. 4 Elpidio had been in peaceful, public, continuous and uninterrupted possession thereof in
concept of owner even before his marriage to petitioner and until his death in 1970. After his death,
petitioner continued to possess and cultivate said parcels of land and enjoy the fruits thereof until
sometime in 1971-1972 when private respondent and Marcos Borillo, Elpidio's siblings, forcibly and
unlawfully dispossessed her of the property. Despite repeated demands, Marcos and the private
respondent refused to return the property to the petitioner and her children. In 1974, new Tax
Declarations, namely Nos. 6319, 6320, 6321 and 6322 5 for parcels (a), (b), (c) and (d), respectively,
were issued in her name. Upon the other hand, parcels (e) and (f), also unregistered, were inherited by
Elpidio, his brother Marcos and sisters Catalina, Aurelia and Rosita, from their father, Venancio Borillo.
Elpidio's 1/5 pro-indiviso share therein was unlawfully taken by private respondent sometime in 1971;
the latter refused to return it to petitioner and her children, who are Elpidio's heirs, despite repeated
demands.

Petitioner then prays that judgment be rendered declaring her and her children owners of parcels (a), (b),
(c) and (d), as well as the 1/5 pro-indiviso portion of parcels (e) and (f), and ordering the private
respondent and Marcos Borillo to pay actual and moral damages plus costs.

In their Answer filed on 14 March 1977, private respondent claims that parcels (a), (c) and (d) were sold
to her by her late brother Elpidio in 1935, while Marcos Borillo claims that parcel (b) was sold to him by
Elpidio sometime in 1937, long before Elpidio's marriage to petitioner. Although they did not declare
these parcels for taxation purposes in their respective names, they immediately took possession and
occupied the same as owners thereof. Private respondent had been paying the realty taxes on parcels (a),
(c) and (d) since 1948 6 and explains her failure to secure in her name tax declarations for said parcels
during Elpidio's lifetime by alleging that she trusted him because he was her brother and he had assured
her that she could transfer in her favor the title thereto anytime. After the Second World War, Elpidio and
Rosita, another sibling, sold to her their respective undivided shares in parcels (e) and (f).

On 15 March 1977, private respondent alone filed an Amended Answer. On the other hand, on 5 April
1977, Patricia and Melencio Borillo filed a motion to withdraw as co-plaintiffs on the ground that they
did not authorize their inclusion as such and that the private respondent is the true and lawful owner of the
land in question. 7

At the trial, private respondent relied heavily on Exhibit "3", a private document purportedly showing that
Elpidio sold to her all his property for P40.00, and Exhibit "4", which she claims to be a deed of sale of
parcels (a), (c) and (d) allegedly executed by Elpidio Borillo in 1935. Upon the other hand, Marcos
Borillo claimed that the deed of sale evidencing the sale to him of parcel (b) was lost during the Second
World War. Both parties claim actual possession of the property. Private respondent and Marcos Borillo
even claimed possession for more than thirty (30) years.
After trial on the merits, the lower court rendered on 3 June 1978 a decision in favor of herein petitioner,
the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered declaring the

plaintiffs as the true owners of parcels A, B, C and D described in par. 4 of the complaint
and as co-owners of parcels E and F described in par. 6 of the complaint with Rosita
Borillo, Aurelia Borillo and the defendants Catalina Borillo and Marcos Borillo. With
costs against the defendants. 8

The trial court arrived at this decision on the basis of the following findings of fact:

The claim of ownership by the plaintiffs with respect to the four parcels of land described
in par. 4 of the complaint is preponderantly established by Tax Declaration Nos. 731,
732, 733 and 734, Exhibits, "A, A-1, A-2 and A-3" for the plaintiffs. These tax
declarations covering the four parcels of land in question are tax declarations issued in
1948 and is (sic) in the name of Elpidio Borillo, husband of plaintiff Esperanza Borillo.
Defendants never declared it (sic) in their name (sic) and no action or attempt whatsoever
was made by the defendants to declare it (sic) in their name (sic) during the lifetime of
Elpidio Borillo. It was only after the death of Elpidio Borillo and the institution of this
action by the plaintiffs that defendants took action and strangely declared it (sic) in their
names.

Obviously, the bulk of evidence for the plaintiffs are (sic) the tax declarations in the name
of Elpidio Borillo which do not absolutely prove their ownership. But the circumstances
obtaining in this case renders (sic) the tax declarations — Exhibits "A, A-1, A-2 and A-
3", reliable and predominantly point that plaintiffs are owners of the four parcels of land
described in par. 4 of the complaint as against the plaintiffs (sic). First, it will be noted
that Exhibits A, A-1, A-2 and A-3 were prepared and issued long before the death of
Elpidio Borillo. He was then a bachelor having married the plaintiff Esperanza Borillo in
1950. Defendant Catalina Borillo married long before the 2nd World War. Defendant
Marcos Borillo likewise married before World War II. Defendants have properties
declared in their names. Marcos Borillo accompanied the Assessors who measured the
four parcels of land according to him (sic). Despite the status of the parties and the
Assessors having been accompanied by defendant Marcos Borillo, still the four parcels of
land were declared in the name of Elpidio Borillo. It is unconceivable (sic) why it was
(sic) declared in the name of Elpidio Borillo, if it does (sic) not belong to him. True, that
tax declarations are not conclusive proof of ownership, but it cannot be gainsaid
especially in rural areas like Langiden, Abra where lands are not surveyed and titled, that
tax declarations are strong evidence of possession and ownership.

Secondly, the four parcels of land described in par. 4 of the complaint were declared in
the name of Elpidio Borillo for 29 years and no action whatsoever was taken by the
defendants to have the tax declarations (Exhibits A, A-1, A-2 and A-3) be (sic) cancelled
and declared the lands (sic) in their names during the lifetime of the declared owner
Elpidio Borillo and immediately after his death. It was only in 1977 after the filing of the
complaint and after the plaintiffs caused the cancellation of Exhibits A, A-1, A-2 and A-3
and declared the lands in their names when defendants attempted to declare it (sic) also in
their names. The unfathomable tolerance of the defendants of having the four (4) parcels
of land be (sic) declared in the name of their deceased brother, Elpidio Borillo in 1948
and remained (sic) in his name after his marriage with (sic) the plaintiff Esperanza
 Borillo in 1950 even (sic) after his death in 1971, is fatal and strongly negate their (sic)
defendants' claim of ownership. No person like the defendants will ever allow his/her
property be (sic) declared in the name of another for twenty-nine (29) years. The fact that
the lands were declared in the name of Elpidio Borillo for twenty-nine (29) years coupled
by (sic) his actual possession during his lifetime until his death in 1971 as testified to by
Esperanza Borillo and Clemente Llaneza who is an uninterested witness strongly
outweighed the evidence for the defendants and convincingly indicate that the four
parcels of land described in par. 4 of the complaint really belong to Elpidio Borillo. The
claim of defendants that they are (sic) in actual possession before World War II up to the
present is persuasively belied by Exhibits A, A-1, A-2 and A-3 and the testimony of
Clemente Llaneza.

The claim of defendant Catalina Borillo that she purchased parcels A, C and D described
in par. 4 of the complaint from her deceased brother Elpidio Borillo before World War II
as evidence (sic) by Exhibits "3" and "4" appears unreliable and incredible. Exhibit "3"
which is an acknowledgment receipt dated May 12, 1946 made no mention of what
property has been sold. There is no evidence of any transfer of ownership. In fact, there is
nothing clear from the evidence as to what land of Elpidio Borillo is referred to in Exhibit
"3". From the terms of Exhibit "3" and the alleged consideration thereof, it thus becomes
obvious that it is only a receipt evidencing a loan of P40.00.

Exhibit "4" (receipt) which is the main basis of the claim of ownership by defendant
Catalina Borillo with respect to parcels A, C and D in par. 4 of the complaint, appears
unreliable and cannot prevail against the evidence for the plaintiffs. This Exhibit "4" for
defendant Catalina Borillo is undated and unsigned. Defendant Catalina Borillo testified
that she does not know the contends of Exhibit "4". Elpidio Borillo as shown by Exhibit
"3" for defendant Catalina Borillo and Exhibits E and F for the plaintiffs knows how to
write his name. Yet, Exhibit "4" was not signed by him. Aside from the patent defects of
Exhibit "4" on its face which renders it unreliable, it will be noted that during the pre-trial
proceedings, defendant Catalina Borillo presented Exhibit "4" to support her claim as
alleged in her answer of having purchased parcels A, C and D from Elpidio Borillo in
1935. Clearly embodied, however, in Exhibit "4" are tax declarations Nos. 0732, 0731
and 0734 which are indeed tax declarations in 1948 in the name of Elpidio Borillo.
Considering that Exhibit "4" is a document executed in 1935 according to the defendant
Catalina Borillo, why are Tax Declarations Nos. 731, 732 and 734 which were issued
only in 1948 incorporated? The inclusion of non-existent document (sic) in Exhibit "4" at
the time of its alleged execution absolutely renders Exhibit "4" wholly unworthy and
undeserving of any credence. 9

Private respondent appealed from the adverse decision to the respondent Court. Her co-defendant, Marcos
Borillo, did not.

The appeal was docketed as C.A.-G.R. No. 64536-R. In her Appellant's Brief, private respondent assigns
the following errors:

THAT THE FACTS RELIED UPON IS (sic) NOT SUPPORTED BY EVIDENCE.

II
 THAT THE DECISION IS NOT IN ACCORDANCE WITH LAW.

On 3 September 1980, the respondent Court promulgated its decision 10 reversing the decision of the trial
court, thus:

WHEREFORE, the judgment appealed from is hereby set aside and another judgment is
hereby rendered declaring defendant Catalina Borillo as the owner of parcels (a), (c) and
(d) and of the one-fifth portion of Elpidio Borillo in parcels (e) and (f); that defendant
Marcos Borillo is the owner of parcel (b); with costs against the plaintiffs.

SO ORDERED.

The respondent Court made the following disquisitions to support its decision:

We are convinced that the preponderance of the evidence tilt (sic) heavily in favor of
defendant. Defendant established she has been in possession in the concept of owner of
said three parcels of land (a), (c) and (d) since her purchase of the same long before the
war and she cultivated the same in the concept of owner, paying the real estate taxes and
thereafter declaring it in her name while Marcos Borillo acquired parcel (b) from Elpidio
since 1938 of which he took possession in the concept of owner, and declared the same in
his name paying the real estate taxes. No less than Melecio Borillo, son of plaintiff
Esperanza, not only withdrew as party plaintiff with his sister Patricia but he even
testified that he knew from the very mouth of his father Elpidio while he was still alive
that he sold the property in question to defendant Catalina Borillo. It has also been shown
that Elpidio Borillo sold his 1/5 portion of parcels (e) and (f) also before the war to
defendant and she had been in continuous possession since then in the concept of owner.

Under Article 1137 of the Civil Code, such uninterrupted, adverse, open possession for
thirty (30) years by defendants regardless of their title or good faith upholds said
defendants' right over the property. (Parcotillo vs. Parcotillo, 12 SCRA 435, 440).

In finding for the plaintiffs the trial court relied on the tax declarations in the name of
Elpidio as proof that plaintiffs are the owners of the questioned property since the
property is untitled; that for 29 years no action was taken by defendants to declare the
property in their name (sic) and it was only in 1977 after the filing of the complaint that
defendants so declared the properties in their name (sic); that Exhibit 4 is unreliable being
unsigned by Elpidio when there is evidence that he could sign his name; that Exhibit 3
did not mention the property sold; that Exhibit 4 was made in 1935 as alleged in the
answer but surprisingly it embodied Tax Declarations 731, 732 and 734 which were
issued only in 1948; and that the alleged sale of the right of Elpidio over parcels (e) and
(f) are without receipts.

We disagree. Declaration of ownership for taxation purposes, or assessment declaration

and tax receipts do not constitute evidence of ownership. They are only prima
facie evidence of possession. (Evangelista vs. Tabayuyong, 7 Phil. 607; Casimiro vs.
Fernandez, 9 Phil. 562) However, if the holder of a (sic) land presents a deed of
conveyance in his favor from the former owner thereof to support his claim of ownership,
the declaration of ownership and tax receipts relative to the property may be used to
prove good faith on his part in occupying and possessing the same. (Elumbaring vs.
Elumbaring, 12 Phi. 384) And while it is true that tax receipts do not prove titled (sic) to
 a land, nevertheless when considered with the actual possession of the property by the
applicant, they constitute evidence of great weight in support of the claim of title of
ownership by prescription. (Viernes vs. Agpaoa, 41 Phil. 286; Land Registration and
Mortgages by Ventura, pp. 125-126)

Plaintiffs admitted that defendants are in possession of the lands in question and the
records show that even during the lifetime of Elpidio, the defendant had been paying the
real property taxes of the property (Exhs. 1 to 1-I). The sale of parcels (a), (c) and (d) to
defendant is evidenced by Exhibits 3 and 4. Although Exhibit 3 does not indicate the
property subject of the sale, such deficiency can be attributed to the fact that this was a
document executed between brother and sister without the assistance of a lawyer but
testimonial evidence has been adduced that cured this defect. True it is that Exhibit 4
appears not to have been signed by Elpidio and he merely imprinted a cross over his
name when it appears that he knew how to sign. However, defendants Catalina and
Marcos Borillo categorically testified that Elpidio signed his name only by copying a
sample. Hence, it is understandable if Elpidio did not sign Exhibit 4 for he must not have
been furnished a (sic) guide to be copied. No evidence was adduced that Exhibit 4 was
actually executed in 1935. What was established is that Elpidio sold said three parcels to
defendant Catalina before the war. In confirmation of said sale, Exhibit 4 must have been
executed on or before 1948 that is why it reflects the Tax Declarations of said property to
be effective in the same year.

On the other hand, outside of the fact that the property remained to be declared in the
name of Elpidio plaintiffs have not adduced any other evidence to buttress their claim of
ownership. Plaintiff Esperanza paid for the real property taxes of the property only on
June 22, 1977 after the complaint was filed in court. (Exhibit C) It is not improbable that
the reason why the properties remained in the name of Elpidio inspite of the fact that it
has long been sold to defendants is because this is a sale between brother and sister where
mutual trust and confidence is to be expected. Indeed, during the lifetime of Elpidio he
never questioned the acts of ownership exercised by the defendants over the property and
even after his death in 1970, plaintiff Esperanza only remembered to assert their alleged
right in 1976 when she attempted to talk to defendant who told her it was already sold to
them and yet it was only in 1977 that the complaint was filed.

Petitioner took this present recourse asking Us to review the respondent Court's findings of facts and
reverse its decision on the ground that the same is based solely on "speculation, surmise and conjecture,"
and that it committed a "misapprehension of facts."

After private respondent filed her Comment and the petitioner submitted a Reply, this Court gave due
course to the petition 11 and required the petitioner to submit her Brief within thirty (30) days from
notice, 12 which she complied with. 13 Private respondent subsequently filed her Brief. 14

The petition is meritorious.

To begin with, the respondent Court committed a grave error in reversing the trial court's judgment
insofar as it concerns defendant Marcos Borillo. As earlier stated, the latter did not appeal from the trial
court's decision. As against him, and more particularly with respect to parcel (b), the decision has long
become final and the respondent Court is without jurisdiction to review the same.  15 Otherwise stated,
beyond the period to appeal, a judgment is no longer within the scope of the power of review of any
court. 16 The appeal interposed by private respondent did not benefit Marcos Borillo because the former
does not have anything to do with parcel (b) and the defense in respect thereto is exclusive to the latter.

The respondent Court likewise erred in reversing the trial court and ruling that private respondent is the
owner of parcels (a), (c) and (d) and Elpidio Borillo's 1/5 pro-indiviso share in parcels (e) and (f).

It is of course settled that the appellate court's findings of fact are binding and must be respected by this
Court. 17 There are, however, recognized exceptions thereto, 18 among which are when the factual
findings of the trial court and the appellate court are conflicting, 19 when they are totally devoid of
support in the record or are so glaringly erroneous as to constitute serious abuse of discretion. 20

These exceptions obtain in the present case.

The fact that parcels (a), (c) and (d) were originally owned by Elpidio Borillo is not disputed by private
respondent. In fact, she claims to have derived her title over the same from the former through a sale in
1935. Thus, the question to be resolved is whether or not Elpidio Borillo did in fact sell the said parcels of
land to the private respondent.

To substantiate her claim, private respondent presented two (2) documents, Exhibits "3" and "4". The trial
court in its judgment described Exhibit "3", dated 12 May 1946, as a mere acknowledgment receipt of a
loan of P40.00 and not a sale for it does not mention any property sold and is not acknowledged before a
notary public. It then concluded that said instrument is a mere receipt evidencing a loan. On the other
hand, Exhibit ''4'' is an undated and unsigned document written in lead pencil on simple grade paper. The
instrument has no witnesses, is not acknowledged before a notary public and has a mere cross over the
written name of Elpidio Borillo. It was duly proven that Elpidio knew how to write and sign his name.
Although Exhibit "4" was purportedly executed in 1935, the same mentions Tax Declaration Nos. 0731,
0732, 0733 and 0734 issued in 1948 in the name of Elpidio Borillo. Private respondent herself testified
that she had no knowledge of the contents of said instrument. The trial court ruled Exhibit "4" as "wholly
unworthy and undeserving of any credence."

In reversing the foregoing findings, the respondent Court tried to justify the deficiencies and
discrepancies in Exhibit "3" by saying that the absence of specifications as to what property was sold is
understandable because the transaction was between brother and sister. It added that this defect was cured
by testimonial evidence. It made no attempt, however, to explain the variance in the date of the alleged
sale (1935) and the date of the instrument (1946).

As to Exhibit "4", the respondent Court accepted private respondent's explanation for the absence of the
signature of Elpidio Borillo on the purported deed of sale saying that contrary to petitioner's assertion,
Elpidio did not really know how to write his name. Private respondent and Marcos Borillo testified that
Elpidio's signature appeared on his voter's registration record and voter's ID card  21 only because he was
given a sample to copy. They declared that unlike those occasions, at the time of the sale, Elpidio was not
given any sample to copy; this explains why he just printed a cross over his name. As to why it mentions
tax declarations issued in 1948, although it is claimed to have been executed in 1935, the respondent
Court theorizes and speculates that:

. . . In confirmation of said sale, Exhibit 4 must have been executed on or before 1948
that is why it reflects the Tax Declarations of said property to be effective in the same
year. 22
It is thus clear that what was originally submitted by private respondent as the original deed of sale was
later accepted by the respondent Court as a deed of confirmation of sale.

Both Exhibits "3" and "4" are private documents. Hence, before they may be received in evidence, their
due execution and authenticity must first be proven by the party presenting them. 23 At the hearing of this
case before the trial court, the controlling rule on this point was Section 21, Rule 132 of the Rules of
Court which provided:

Sec. 21. Private writing, its execution and authenticity, how proved. — Before any
private writing may be received in evidence, its due execution and authenticity must be
proved either:

(a) By anyone who saw the writing executed;

(b) By evidence of the genuineness of the handwriting of the maker; or

(c) By a subscribing witness. 24

Private respondent did not present anyone who actually saw the execution of Exhibits "3" and "4",
witnessed Elpidio affix his signature on Exhibit "3" or make the cross over his written name in Exhibit
"4". There are no subscribing witnesses. The due execution then of Exhibits "3" and "4", as the alleged
deeds of sale transferring title over said parcels of land to private respondent, was not satisfactorily
proven; thus, the same can not be received in evidence.

Even if We are to assume that Exhibits "3" and "4" are admissible in evidence, they still do not
satisfactorily prove the transfers of titles over the subject parcels to the private respondent. As earlier
pointed out, Exhibit "3" makes no mention of any property sold. Hence, it hardly qualifies as a deed of
sale. It suffers from a patent and not just an intrinsic ambiguity. The respondent Court then committed an
error by giving credence to the testimonies offered to cure such ambiguity. It disregarded the parol
evidence rule then applicable, namely, Section 7, Rule 130 of the Rules of Court, which provided as
follows:

Sec. 7. Evidence of written agreement. — When the terms of an agreement have been

reduced to writing, it is to be considered as containing all such terms, and, therefore,
there can be, between the parties and their successors in interest, no evidence of the terms
of the agreement other than the contents of the writing, except in the following cases:

(a) Where a mistake or imperfection of the writing, or its failure to

express the true intent and agreement of the parties, or the validity of the
agreement is put in issue by the pleadings;

(b) When there is an intrinsic ambiguity in the writing.

The term "agreement" includes wills. 25

Before parol evidence may be admitted in order to identify, explain or define the subject matter of a
writing, it must first be shown that the writing itself already contains a description sufficient to serve as a
foundation for the admission of such parol evidence; the evidence should also be consistent with the
writing. Otherwise stated, in order to admit parol evidence to aid in the description of the subject matter
of a deed or other writing, there must be a description that will serve as a foundation for such evidence;
the writing must at least give some data from which the description may be found and made certain. Parol
evidence is not admissible to identify the property where the description thereof is so vague as to amount
to no description at all. In other words, parol evidence is not permitted to supply a description, but only to
apply it. 26

In his Commentary on the Rules of Court, 27 former Chief Justice Manuel V. Moran explains the rule in
the evident of patent ambiguity, as is the case in Exhibit "3":

. . . The rule is that "if the words of a document are so defective or ambiguous as to be
unmeaning, no evidence can be given to show what the author of the document intended
to say." (Steph, Evidence, Art. 91) The reason for the rule, in the language of Mr. Justice
Story, is that "if the language be too doubtful for any settled construction, by the
admission of parol evidence you create and do not merely construe the contract. You
attempt to do that for the party which he has not chosen to do for himself; and the law
very property denies such an authority to courts of Justice." (Peisch v. Dickson, Fed. Cas.
No. 10, 911, 1 Mason, 9.) As Lord Bacon said, "Ambiguitas patens cannot be holpen by
averment." (Bacon, Max., 23) A case of patent ambiguity is that of a deed wherein "a
parcel of land" without description is donated. The donation is void. The uncertainty
cannot be explained by parol evidence. (Wigmore on Evidence, 2d. ed., p. 414.) The
following appears to be the most accurate and most comprehensive statement of the rule
regarding patent ambiguity: "In other words and more generally, if the court, placing
itself in the situation in which the testator or contracting party stood at the time of
executing the instrument, and with a full understanding of the force and import of the
words, cannot ascertain his meaning and intention from the language of the instrument,
then it is a case of incurable, hopeless uncertainty and the instrument is, therefore, so far
inoperative and void." (Palmer v. Albee, 50 Ia., 429, 432, quoting 1 Greenleaf on
Evidence, par. 300.)

As to Exhibit "4", We agree with the trial court that it could not have been prepared in 1935, as contended
by private respondent, because it makes reference to Tax Declarations issued in 1948, thirteen (13) years
later. Common sense and logic reject such contention. Unfortunately, the respondent Court belabored the
explanation that Exhibit "4" must have been executed on or before 1948 to confirm the prior sale. This is
unacceptable as it is purely conjectural. Absent any evidence that it was signed by Elpidio Borillo, it is
not difficult to conclude that this document does not proceed from any legitimate source. It is one which
could easily be fabricated. The trial court did not then err when it considered Exhibit "4" as "wholly
unworthy and undeserving of any credence."

It is not also true, as was held by the respondent Court, that the conclusion of the trial court that Elpidio
Borillo was in possession of the property in concept of owner until his death, is based solely on the tax
declarations in his name. As shown earlier, the court considered the testimonies of the petitioner and one
Clemente Llaneza whom the trial court described as "an uninterested witness." Thus:

. . . The fact that the lands were declared in the name of Elpidio Borillo for twenty-nine
(29) years coupled by his actual possession during his lifetime until his death in 1971 as
testified to by Esperanza Borillo and Clemente Llaneza who is an uninterested witness
strongly outweighed the evidence for the defendants and convincingly indicate that the
four parcels of land described in paragraph 4 of the complaint really belong to Elpidio
Borillo. . . .
It is thus clear that the authorities cited by the respondent Court on the probative value of the tax
declarations favor the herein petitioner and not the private respondent. For indeed, while tax declarations
and tax receipts do not constitute evidence of ownership, they are prima facie evidence of possession.
Accordingly, since Elpidio Borillo, during his lifetime, and then the petitioner, after his death, secured
and were issued tax declarations for the parcels of land in question, and were in fact in possession thereof,
the excuse offered by private respondent as to her failure to obtain the tax declarations deserves no
consideration at all. The flimsiness or implausibility of the excuse becomes more apparent when We
consider the findings of the trial court that private respondent has other properties declared in her name
for taxation purposes and that neither she nor Marcos objected to the measurement by the assessors of the
four (4) parcels for Elpidio Borillo.

The conclusion then is inevitable that the late Elpidio Borillo did not sell and alienate parcels (a), (c) and
(d) to private respondent.

As to parcels (e) (f), private respondent presented no deed of sale in her favor.

Private respondent can not likewise seek refuge under a claim of ownership by virtue of acquisitive
prescription.

Acquisitive prescription of dominion requires that there be public, peaceful and uninterrupted possession
in the concept of owner 28 for a period of ten (10) years, in case of ordinary prescription, 29 and thirty
(30) years, in case of extraordinary prescription. 30

After reviewing the evidence presented before it, the trial court concluded that Elpidio Borillo had actual,
peaceful and continuous possession of the subject parcels of land during his lifetime and until his death in
1970. The respondent Court reversed this finding and ruled that it was private respondent who had the
possession since her purchase thereof in 1935.

It is a matter of judicial policy to accord the trial court's findings of facts with the highest respect and not
to disturb the same on appeal unless there are strong and impelling reasons to do so.  31 The reason for
this is that trial courts have more opportunity and facilities to examine factual matters than appellate
courts. 32 They are in a better position to assess the credibility of witnesses, not only by the nature of
their testimonies, but also by their demeanor on the
stand. 33

In Shauf vs. Court of Appeals, 34 We ruled:

Elementary is the rule that the conclusions and findings of fact of the trial court are
entitled to great weight on appeal and should not be disturbed unless for strong and
cogent reasons. (Vda. de Alberto, et al. vs. CA, et al., 173 SCRA 436 [1989]) Absent any
substantial proof, therefore, that the trial court's decision was grounded entirely on
speculations, surmises or conjectures, the same must be accorded full consideration and
respect. This should be so because the trial court is, after all, in a much better position to
observe and correctly appreciate the respective parties' evidence as they were presented.
(Matabuena vs. CA, et al., 173 SCRA 170 [1989])

We find no impelling, compelling or cogent reason to overturn the findings of fact of the trial court.
WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court of Appeals is
hereby REVERSED and SET ASIDE and the judgment of the Regional Trial Court of Abra dated 3 June
1978 in Civil Case No. 1043 is hereby AFFIRMED and REINSTATED.

SO ORDERED.

G.R. No. 74851 December 9, 1999

RIZAL COMMERCIAL BANKING CORPORATION, petitioner,

vs.
INTERMEDIATE APPELLATE COURT AND BF HOMES, INC., respondents.

RESOLUTION

MELO, J.:

On September 14, 1992, the Court passed upon the case at bar and rendered its decision, dismissing the
petition of Rizal Commercial Banking Corporation (RCBC), thereby affirming the decision of the Court
of Appeals which canceled the transfer certificate of title issued in favor of RCBC, and reinstating that of
respondent BF Homes.

This will now resolve petitioner's motion for reconsideration which, although filed in 1992 was not
deemed submitted for resolution until in late 1998. The delay was occasioned by exchange of pleadings,
the submission of supplemental papers, withdrawal and change of lawyers, not to speak of the case
having been passed from one departing to another retiring justice. It was not until May 3, 1999, when the
case was re-raffled to herein ponente, but the record was given to him only sometime in the late October
1999.

By way of review, the pertinent facts as stated in our decision are reproduced herein, to wit:

On September 28, 1984, BF Homes filed a "Petition for Rehabilitation and for
Declaration of Suspension of Payments" (SEC Case No. 002693) with the Securities and
Exchange Commission (SEC).

One of the creditors listed in its inventory of creditors and liabilities was RCBC.

On October 26, 1984, RCBC requested the Provincial Sheriff of Rizal to extra-judicially
foreclose its real estate mortgage on some properties of BF Homes. A notice of extra-
judicial foreclosure sale was issued by the Sheriff on October 29, 1984, scheduled on
November 29, 1984, copies furnished both BF Homes (mortgagor) and RCBC
(mortgagee).

On motion of BF Homes, the SEC issued on November 28, 1984 in SEC Case No.
002693 a temporary restraining order (TRO), effective for 20 days, enjoining RCBC and
the sheriff from proceeding with the public auction sale. The sale was rescheduled to
January 29, 1985.

On January 25, 1985, the SEC ordered the issuance of a writ of preliminary injunction
upon petitioner's filing of a bond. However, petitioner did not file a bond until January
29, 1985, the very day of the auction sale, so no writ of preliminary injunction was issued
by the SEC. Presumably, unaware of the filing of the bond, the sheriffs proceeded with
the public auction sale on January 29, 1985, in which RCBC was the highest bidder for
the properties auctioned.

On February 5, 1985, BF Homes filed in the SEC a consolidated motion to annul the
auction sale and to cite RCBC and the sheriff for contempt. RCBC opposed the motion

Because of the proceedings in the SEC, the sheriff withheld the delivery to RCBC of a
certificate of sale covering the auctioned properties.

On February 13, 1985, the SEC in Case No. 002693 belatedly issued a writ of
preliminary injunction stopping the auction sale which had been conducted by the sheriff
two weeks earlier.

On March 13, 1985, despite SEC Case No. 002693, RCBC filed with the Regional Trial
Court, Br. 140, Rizal (CC 10042) an action for mandamus against the provincial sheriff
of Rizal and his deputy to compel them to execute in its favor a certificate of sale of the
auctioned properties.

In answer, the sheriffs alleged that they proceeded with the auction sale on January 29,
1985 because no writ of preliminary injunction had been issued by SEC as of that date,
but they informed the SEC that they would suspend the issuance of a certificate of sale to
RCBC.

On March 18, 1985, the SEC appointed a Management Committee for BF Homes.

On RCBC's motion in the mandamus case, the trial court issued on May 8, 1985 a

judgment on the pleadings, the dispositive portion of which states:

WHEREFORE, petitioner's Motion for Judgment on the pleadings is

granted and judgment is hereby rendered ordering respondents to execute
and deliver to petitioner the Certificate of the Auction Sale of January
29, 1985, involving the properties sold therein, more particularly those
described in Annex "C" of their Answer." (p. 87, Rollo.)

On June 4, 1985, B.F. Homes filed an original complaint with the IAC pursuant to
Section 9 of B.P. 129 praying for the annulment of the judgment, premised on the
following:
 . . .: (1) even before RCBC asked the sheriff to extra-judicially foreclose
its mortgage on petitioner's properties, the SEC had already assumed
exclusive jurisdiction over those assets, and (2) that there was extrinsic
fraud in procuring the judgment because the petitioner was not
impleaded as a party in the mandamus case, respondent court did not
acquire jurisdiction over it, and it was deprived of its right to be heard.
(CA Decision, p. 88, Rollo).

On April 8, 1986, the IAC rendered a decision, setting aside the decision of the trial
court, dismissing the mandamus case and suspending issuance to RCBC of new land
titles, "until the resolution of case by SEC in Case No. 002693," disposing as follows:

WHEREFORE, the judgment dated May 8, 1985 in Civil Case No.

10042 is hereby annulled and set aside and the case is hereby dismissed.
In view of the admission of respondent Rizal Commercial Banking
Corporation that the sheriff's certificate of sale has been registered on BF
Homes' TCT's . . . (here the TCTs were enumerated) the Register of
Deeds for Pasay City is hereby ordered to suspend the issuance to the
mortgagee-purchaser, Rizal Commercial Banking Corporation, of the
owner's copies of the new land titles replacing them until the matter shall
have been resolved by the Securities and Exchange Commission in SEC
Case No. 002693.

(p.257-260, Rollo; also pp. 832-834, 213

SCRA 830 [1992]; Emphasis in the original.)

On June 18, 1986, RCBC appealed the decision of the then Intermediate Appellate Court (now, back to its
old revered name, the Court of Appeals) to this Court, arguing that:

1. Petitioner did not commit extrinsic fraud in excluding private

respondent as party defendant in Special Civil Case No. 10042 as private
respondent was not indispensable party thereto, its participation not
being necessary for the full resolution of the issues raised in said case.

2. SEC Case No. 2693 cannot be invoked to suspend Special Civil Case
No. 10042, and for that matter, the extra-judicial foreclosure of the real
estate mortgage in petitioner's favor, as these do not constitute actions
against private respondent contemplated under Section 6(c) of
Presidential Decree No. 902-A.

3. Even assuming arguendo that the extra-judicial sale constitute an

action that may be suspended under Section 6(c) of Presidential Decree
No. 902-A, the basis for the suspension thereof did not exist so as to
adversely affect the validity and regularity thereof.

4. The Regional Trial court had jurisdiction to take cognizable of Special

Civil Case No. 10042.

5. The Regional Trial court had jurisdiction over Special Civil Case No.
10042.
 (p. 5, Rollo.)

On November 12, 1986, the Court gave due course to the petition. During the pendency of the case,
RCBC brought to the attention of the Court an order issued by the SEC on October 16, 1986 in Case No.
002693, denying the consolidated Motion to Annul the Auction Sale and to cite RCBC and the Sheriff for
Contempt, and ruling as follows:

WHEREFORE, the petitioner's "Consolidated Motion to Cite Sheriff and

Rizal Commercial Banking Corporation for Contempt and to Annul
Proceedings and Sale," dated February 5, 1985, should be as is, hereby
DENIED.

While we cannot direct the Register of Deeds to allow the consolidation

of the titles subject of the Omnibus Motion dated September 18, 1986
filed by the Rizal Commercial Banking Corporation, and therefore,
denies said Motion, neither can this Commission restrain the said bank
and the Register of Deeds from effecting the said consolidation.

SO ORDERED.

By virtue of the aforesaid order, the Register of Deeds of Pasay City effected the transfer of title over
subject pieces of property to petitioner RCBC, and the issuance of new titles in its name. Thereafter,
RCBC presented a motion for the dismissal of the petition, theorizing that the issuance of said new
transfer certificates of title in its name rendered the petition moot and academic.

In the decision sought to be reconsidered, a greatly divided Court (Justices Gutierrez, Nocon, and Melo
concurred with the ponente, Justice Medialdea; Chief Justice Narvasa, Justices Bidin, Regalado, and
Bellosillo concurred only in the result; while Justice Feliciano dissented and was joined by Justice
Padilla, then Justice, now Chief Justice Davide, and Justice Romero; Justices Griño-Aquino and Campos
took no part) denied petitioner's motion to dismiss, finding basis for nullifying and setting aside the TCTs
in the name of RCBC. Ruling on the merits, the Court upheld the decision of the Intermediate Appellate
Court which dismissed the mandamus case filed by RCBC and suspended the issuance of new titles to
RCBC. Setting aside RCBC's acquisition of title and nullifying the TCTs issued to it, the Court held that:

. . . whenever a distressed corporation asks the SEC for rehabilitation and

suspension of payments, preferred creditors may no longer assert such
preference, but . . . stand on equal footing with other creditors.
Foreclosure shall be disallowed so as not to prejudice other creditors, or
cause discrimination among them. If foreclosure is undertaken despite
the fact that a petition, for rehabilitation has been filed, the certificate of
sale shall not be delivered pending rehabilitation. Likewise, if this has
also been done, no transfer of title shall be effected also, within the
period of rehabilitation. The rationale behind PD 902-A, as amended to
effect a feasible and viable rehabilitation. This cannot be achieved if one
creditor is preferred over the others.

In this connection, the prohibition against foreclosure attaches as soon as

a petition for rehabilitation is filed. Were it otherwise, what is to prevent
the petitioner from delaying the creation of a Management Committee
 and in the meantime dissipate all its assets. The sooner the SEC takes
over and imposes a freeze on all the assets, the better for all concerned.

(pp. 265-266, Rollo; also p. 838, 213 SCRA

830 [1992].)

Then Justice Feliciano (joined by three other Justices), dissented and voted to grant the petition. He
opined that the SEC acted prematurely and without jurisdiction or legal authority in enjoining RCBC and
the sheriff from proceeding with the public auction sale. The dissent maintain that Section 6 (c) of
Presidential Decree 902-A is clear and unequivocal that, claims against the corporations, partnerships, or
associations shall be suspended only upon the appointment of a management committee, rehabilitation
receiver, board or body. Thus, in the case under consideration, only upon the appointment of the
Management Committee for BF Homes on March 18, 1985, should the suspension of actions for claims
against BF Homes have taken effect and not earlier.

In support of its motion for reconsideration, RCBC contends:

The restraining order and the writ of preliminary injunction issued by the Securities and
Exchange Commission enjoining the foreclosure sale of the properties of respondent BF
Homes were issued without or in excess of its jurisdiction because it was violative of the
clear provision of Presidential Decree No. 902-A, and are therefore null and void; and

Petitioner, being a mortgage creditor, is entitled to rely solely on its security and to
refrain from joining the unsecured creditors in SEC Case No. 002693, the petition for
rehabilitation filed by private respondent.

We find the motion for reconsideration meritorious.

The issue of whether or not preferred creditors of distressed corporations stand on equal footing with all
other creditors gains relevance and materiality only upon the appointment of a management committee,
rehabilitation receiver, board, or body. Insofar as petitioner RCBC is concerned, the provisions of
Presidential Decree No. 902-A are not yet applicable and it may still be allowed to assert its preferred
status because it foreclosed on the mortgage prior to the appointment of the management committee on
March 18, 1985. The Court, therefore, grants the motion for reconsideration on this score.

The law on the matter, Paragraph (c), Section 6 of Presidential Decree 902-A, provides:

Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall posses the
following powers:

c) To appoint one or more receivers of the property, real and personal, which is the
subject of the action pending before the Commission in accordance with the pertinent
provisions of the Rules of Court in such other cases whenever necessary to preserve the
rights of the parties litigants to and/or protect the interest of the investing public and
creditors; Provided, however, that the Commission may, in appropriate cases, appoint a
rehabilitation receiver of corporations, partnerships or other associations not supervised
or regulated by other government agencies who shall have, in addition to the powers of a
regular receiver under the provisions of the Rules of Court, such functions and powers as
are provided for in the succeeding paragraph (d) hereof: Provided, finally, That upon
appointment of a management committee rehabilitation receiver, board or body,
 pursuant to this Decree, all actions for claims against corporations, partnerships or
associations under management or receivership, pending before any court, tribunal, board
or body shall be suspended accordingly. (As amended by PDs No. 1673, 1758 and by PD
No. 1799. Emphasis supplied.)

It is thus adequately clear that suspension of claims against a corporation under rehabilitation is counted
or figured up only upon the appointment of a management committee or a rehabilitation receiver. The
holding that suspension of actions for claims against a corporation under rehabilitation takes effect as
soon as the application or a petition for rehabilitation is filed with the SEC — may, to some, be more
logical and wise but unfortunately, such is incongruent with the clear language of the law. To insist on
such ruling, no matter how practical and noble, would be to encroach upon legislative prerogative to
define the wisdom of the law — plainly judicial legislation.

It bears stressing that the first and fundamental duty of the Court is to apply the law. When the law is
clear and free from any doubt or ambiguity, there is no room for construction or interpretation. As has
been our consistent ruling, where the law speaks in clear and categorical language, there is no occasion
for interpretation; there is only room for application (Cebu Portland Cement Co. vs. Municipality of
Naga, 24 SCRA-708 [1968]).

Where the law is clear and unambiguous, it must be taken to mean exactly what it says
and the court has no choice but to see to it that its mandate is obeyed (Chartered Bank
Employees Association vs. Ople, 138 SCRA 273 [1985]; Luzon Surety Co., Inc. vs. De
Garcia, 30 SCRA 111 [1969]; Quijano vs. Development Bank of the Philippines, 35
SCRA 270 [1970]).

Only when the law is ambiguous or of doubtful meaning may the court interpret or construe its true intent.
Ambiguity is a condition of admitting two or more meanings, of being understood in more than one way,
or of referring to two or more things at the same time. A statute is ambiguous if it is admissible of two or
more possible meanings, in which case, the Court is called upon to exercise one of its judicial functions,
which is to interpret the law according to its true intent.

Furthermore, as relevantly pointed out in the dissenting opinion, a petition for rehabilitation does nor
always result in the appointment of a receiver or the creation of a management committee. The SEC has
to initially determine whether such appointment is appropriate and necessary under the circumstances.
Under Paragraph (d), Section 6 of Presidential Decree No. 902-A, certain situations must be shown to
exist before a management committee may be created or appointed, such as;

1. when there is imminent danger of dissipation, loss, wastage or

destruction of assets or other properties; or

2. when there is paralization of business operations of such corporations

or entities which may be prejudicial to the interest of minority
stockholders, parties-litigants or to the general public.

On the other hand, receivers may be appointed whenever:

1. necessary in order to preserve the rights of the parties-litigants; and/or

2. protect the interest of the investing public and creditors. (Section 6 (c),
P.D. 902-A.)
These situations are rather serious in nature, requiring the appointment of a management committee or a
receiver to preserve the existing assets and property of the corporation in order to protect the interests of
its investors and creditors. Thus, in such situations, suspension of actions for claims against a corporation
as provided in Paragraph (c) of Section 6, of Presidential Decree No. 902-A is necessary, and here we
borrow the words of the late Justice Medialdea, "so as not to render the SEC management Committee
irrelevant and inutile and to give it unhampered "rescue efforts" over the distressed firm" (Rollo, p. 265).

Otherwise, when such circumstances are not obtaining or when the SEC finds no such imminent danger
of losing the corporate assets, a management committee or rehabilitation receiver need not be appointed
and suspension of actions for claims may not be ordered by the SEC. When the SEC does not deem it
necessary to appoint a receiver or to create a management committee, it may be assumed, that there are
sufficient assets to sustain the rehabilitation plan and, that the creditors and investors are amply protected.

Petitioner additionally argues in its motion for reconsideration that, being a mortgage creditor, it is
entitled to rely on its security and that it need not join the unsecured creditors in filing their claims before
the SEC appointed receiver. To support its position, petitioner cites the Court's ruling in the case
of Philippine Commercial International Bank vs. Court of Appeals, (172 SCRA 436 [1989]) that an order
of suspension of payments as well as actions for claims applies only to claims of unsecured creditors and
cannot extend to creditors holding a mortgage, pledge, or any lien on the property.

Ordinarily, the Court would refrain from discussing additional matters such as that presented in RCBC's
second ground, and would rather limit itself only to the relevant issues by which the controversy may be
settled with finality.

In view, however, of the significance of such issue, and the conflicting decisions of this Court on the
matter, coupled with the fact that our decision of September 14, 1992, if not clarified, might mislead the
Bench and the Bar, the Court resolved to discuss further.

It may be recalled that in the herein en banc majority opinion (pp. 256-275, Rollo, also published
as RCBC vs. IAC, 213 SCRA 830 [1992]), we held that:

. . . whenever a distressed corporation asks the SEC for rehabilitation and suspension of
payments, preferred creditors may no longer assert such preference, but . . . stand on
equal footing with other creditors. Foreclosure shall be disallowed so as not to prejudice
other creditors, or cause discrimination among them. If foreclosure is undertaken despite
the fact that a petition for rehabilitation has been filed, the certificate of sale shall not be
delivered pending rehabilitation. Likewise, if this has also, been done, no transfer of title
shall be effected also, within the period of rehabilitation. The rationale behind PD 902-A,
as amended, is to effect a feasible and viable rehabilitation. This cannot be achieved if
one creditor is preferred over the others.

In this connection, the prohibition against foreclosure attaches as soon as a petition for
rehabilitation is filed. Were it otherwise, what is to prevent the petitioner from delaying
the creation of a Management Committee and in the meantime dissipate all its assets. The
sooner the SEC takes over and imposes a freeze on all the assets, the better for all
concerned.

(pp. 265-266, Rollo;
also p. 838, 213 SCRA 830
[1992] Emphasis supplied)
The foregoing majority opinion relied upon BF Homes, Inc. vs. Court of Appeals (190 SCRA 262 [1990]
— per Cruz, J.: First Division) where it held that "when a corporation threatened by bankruptcy is taken
over by a receiver, all the creditors should stand on an equal footing. Not anyone of them should be given
preference by paying one or some of them ahead of the others. This is precisely the reason for the
suspension of all pending claims against the corporation under receivership. Instead of creditors vexing
the courts with suits against the distressed firm, they are directed to file their claims with the receiver
who is a duly appointed officer of the SEC (pp. 269-270; emphasis in the original). This ruling is a
reiteration of Alemar's Sibal & Sons, Inc. vs. Hon. Jesus M. Elbinias (pp. 99-100; 186 SCRA 94 [1991]
— per Fernan, C.J.: Third Division).

Taking the lead from Alemar's Sibal & Sons, the Court also applied this same ruling in Araneta vs. Court
of Appeals (211 SCRA 390 [1992] — per Nocon, J.: Second Division).

All the foregoing cases departed from the ruling of the Court in the much earlier case of PCIB vs. Court
of Appeals (172 SCRA 436 [1989] — per Medialdea, J.: First Division) where the Court categorically
ruled that:

SEC's order for suspension of payments of Philfinance as well as for all actions of claims
against Philfinance could only be applied to claims of unsecured creditors. Such
order can not extend to creditors holding a mortgage, pledge or any lien on the
property unless they give up the property, security or lien in favor of all the creditors of
Philfinance . . .

(p. 440. Emphasis supplied)

Thus, in BPI vs. Court of Appeals (229 SCRA 223 [1994] — per Bellosilio, J.: First Division) the Court
explicitly stared that ". . . the doctrine in the PCIB Case has since been abrogated. In  Alemar's Sibal &
Sons v. Elbinias, BF Homes, Inc. v. Court of Appeals, Araneta v. Court of Appeals and RCBC v. Court of
Appeals, we already ruled that whenever a distressed corporation asks SEC for rehabilitation and
suspension of payments, preferred creditors may no longer assert such preference, but shall stand on
equal footing with other creditors . . ." (pp. 227-228).

It may be stressed, however, that of all the cases cited by Justice Bellosillo in BPI, which abandoned the
Court's ruling in PCIB, only the present case satisfies the constitutional requirement that "no doctrine or
principle of law laid down by the court in a decision rendered en banc or in division may be modified or
reversed except by the court sitting en banc" (Sec 4, Article VIII, 1987 Constitution). The rest were
division decisions.

It behooves the Court, therefore, to settle the issue in this present resolution once and for all, and for the
guidance of the Bench and the Bar, the following rules of thumb shall are laid down:

1. All claims against corporations, partnerships, or associations that are pending before any court,
tribunal, or board, without distinction as to whether or not a creditor is secured or unsecured, shall be
suspended effective upon the appointment of a management committee, rehabilitation receiver, board, or
body in accordance which the provisions of Presidential Decree No. 902-A.

2. Secured creditors retain their preference over unsecured creditors, but enforcement of such preference
is equally suspended upon the appointment of a management committee, rehabilitation receiver, board, or
body. In the event that the assets of the corporation, partnership, or association are finally liquidated,
however, secured and preferred credits under the applicable provisions of the Civil Code will definitely
have preference over unsecured ones.

In other words, once a management committee, rehabilitation receiver, board or body is appointed
pursuant to P.D. 902-A, all actions for claims against a distressed corporation pending before any court,
tribunal, board or body shall be suspended accordingly.

This suspension shall not prejudice or render ineffective the status of a secured creditor as compared
totally unsecured creditor P.D. 902-A does not state anything to this effect. What it merely provides is
that all actions for claims against the corporation, partnership or association shall be suspended. This
should give the receiver a chance to rehabilitate the corporation if there should still be a possibility of
doing so. (This will be in consonance with Alemar's BF Homes, Araneta, and RCBC insofar as enforcing
liens by preferred creditors are concerned.)

However, in the event that rehabilitation is no longer feasible and claims against the distressed
corporation would eventually have to be settled, the secured creditors shall enjoy preference over the
unsecured creditors (still maintaining PCIB ruling), subject only to the provisions of the Civil Code on
Concurrence and Preferences of Credit (our ruling in State Investment House, Inc. vs. Court of Appeals,
277 SCRA 209 [1997]).

The Majority ruling in our 1992 decision that preferred creditors of distressed corporations shall, in a
way, stand an equal footing with all other creditors, must be read and understood in the light of the
foregoing rulings. All claims of both a secured or unsecured creditors, without distinction on this score,
are suspended once a management committee is appointed. Secured creditors, in the meantime, shall not
be allowed to assert such preference before the Securities and Exchange Commission. It may be stressed,
however, that this shall only take effect upon the appointment of a management committee, rehabilitation
receiver, board, or body, as opined in the dissent.

In fine, the Court grants the motion for reconsideration for the cogent reason that suspension of actions
for claims commences only from the time a management committee or receiver is appointed by the SEC.
Petitioner RCBC, therefore, could have rightfully, as it did, move for the extrajudicial foreclosure of its
mortgage on October 26, 1984 because a management committee was not appointed by the SEC until
March 18, 1985.

WHEREFORE, petitioner's motion for reconsideration is hereby GRANTED. The decision, dated
September 14, 1992 is vacated, the decision of Intermediate Appellate Court in AC-G.R. No. SP-06313
REVERSED and SET ASIDE, and the judgment of the Regional Trial Court National Capital Judicial
Region, Branch 140, in Civil Case No. 10042 REINSTATED.

SO ORDERED.
G.R. No. 103959 August 21, 1997

SPOUSES REGALADO SANTIAGO and ROSITA PALABYAB, JOSEFINA

ARCEGA, petitioners,
vs.
THE HON. COURT OF APPEALS; THE HON. CAMILO C. MONTESA, JR., Presiding Judge of
the RTC of Malolos, Bulacan, Branch 19, and QUIRICO ARCEGA, respondents.

HERMOSISIMA, JR., J.:

Assailed in this petition for review under Rule 45 is the November 8, 1991 Decision of respondent Court
of Appeals in CA-G.R. CV No. 25069. It affirmed in toto the judgment of Branch 19, Regional Trial
Court of Malolos, Bulacan, in Civil Case No. 8470-M. The action therein sought to declare null and void
the "Kasulatan Ng Bilihang Tuluyan Ng Lupa" executed on July 18, 1971 by the late Paula Arcega, sister
of private respondent, in favor of herein petitioners over a parcel of land consisting of 927 square meters,
situated in Barangay Tabing Ilog, Marilao, Bulacan.
Paula Arcega was the registered owner of that certain parcel of land covered by Transfer Certificate of
Title No. T-115510. Her residential house stood there until 1970 when it was destroyed by a strong
typhoon.

On December 9, 1970, Paula Arcega executed what purported to be a deed of conditional sale over the
land in favor of Josefina Arcega and the spouses Regalado Santiago and Rosita Palabyab, the petitioners
herein, for and in consideration of P20,000.00. The vendees were supposed to pay P7,000.00 as
downpayment. It was expressly provided that the vendor would execute and deliver to the vendees an
absolute deed of sale upon full payment by the vendees of the unpaid balance of the purchase price of
P13,000.00.

Subsequently, on July 18, 1971, supposedly upon payment of the remaining balance, Paula Arcega
executed a deed of absolute sale of the same parcel of land in favor of petitioners. Thereupon, on July 20,
1971, TCT No. T-115510, in the name of Paula Arcega, was cancelled and a new title, TCT No. T-
148989 was issued in the name of petitioners.

On April 10, 1985, Paula Arcega died single and without issue, leaving as heirs his two brothers, Narciso
Arcega1 and private respondent Quirico Arcega.

Incidentally, before Paula Arcega died, a house of four bedrooms with a total floor area of 225 square
meters was built over the parcel of land in question. Significantly, the master's bedroom, with toilet and
bath, was occupied by Paula Arcega until her death despite the execution of the alleged deed of absolute
sale. The three other bedrooms, smaller than the master's bedroom, were occupied by the petitioners who
were the supposed vendees in the sale.

Private respondent Quirico Arcega, as heir of his deceased sister, filed on October 24, 1985 Civil Case
No. 8470-M before the RTC of Malolos, Bulacan, seeing to declare null ad void the deed of sale executed
by his sister during her lifetime in favor of the petitioners on the ground that said deed was fictitious since
the purported consideration therefor of P20,000.00 was not actually paid by the vendees to his sister.

Answering the complaint before the RTC, petitioner spouses averred that private respondent's cause of
action was already barred by the statute of limitations considering that the disputed deed of absolute sale
was executed in their favor on July 18, 1971, by which TCT No. 148989 was issued on July 20, 1971,
while private respondent's complaint was filed in court only on October 24, 1985 or more than fourteen
(14) years from the time the cause of action accrued. Petitioners also deny that the sale was fictitious.
They maintain that the purchase price was actually paid to Paula Arcega and that said amount was spent
by the deceased in the construction of her three-door apartment on the parcel of land in question.

Josefina Arcega, the other petitioner, was declared in default for failure to file her answer within the
reglementary period.

After trial, the RTC rendered judgment in favor of private respondent Quirico Arcega, viz.:

(a) Declaring as null and void and without legal force and effect the "Kasulatan Ng
Bilihang Tuluyan Ng Lupa" dated July 18, 1971 executed by the deceased Paula Arcega
covering a parcel of land embraced under TCT No. T-115510 in favor of the defendants;

(b) Declaring TCT No. T-148989 issued and registered in the names of defendants
Josefina Arcega and spouses Regalado Santiago and Rosita Palabyab as null and void;
 (c) Ordering the reconveyance of the property including all improvements thereon
covered by TCT No. T-115510 now TCT No. T-148989, to the plaintiff, subject to real
estate mortgage with the Social Security System; and

(d) To pay jointly and severally the amount of P10,000.00 as attorney's fees.

On the counterclaim, the same is hereby dismissed for lack of legal and/or factual basis
(p. 6, decision, pp. 295-300, rec.).2

In ruling for private respondent, the trial court, as affirmed in toto by the public respondent Court of
Appeals, found that:

On the basis of the evidence adduced, it appears that plaintiff Quirico Arcega and his
brother Narciso Arcega are the only surviving heirs of the deceased Paula Arcega who on
April 10, 1985 died single and without issue. Sometime in 1970, a strong typhoon
destroyed the house of Paula Arcega and the latter together with the defendants decided
to construct a new house. All the defendants 3 being members of the SSS, Paula Arcega
deemed it wise to lend her title to them for purposes of loan with the SSS. She executed a
deed of sale to effect the transfer of the property in the name of defendants and thereafter
the later mortgaged the same for P30,000.00 but the amount actually released was only
P25,000.00. Paula Arcega spent the initial amount of P30,000.000 out of her savings for
the construction of the house sometime in 1971 and after the same and the proceeds of
the loan were exhausted, the same was not as yet completed. Paula Arcega and her
brothers sold the property which they inherited for P45,000.00 and the same all went to
the additional construction of the house, however, the said amount is not sufficient.
Thereafter, Paula Arcega and her brothers sold another property which they inherited for
P805,950.00 and one third (1/3) thereof went to Paula Arcega which she spent a portion
of which for the finishing touches of the house. The house as finally finished in 1983 is
worth more than P100,000.00 with a floor area of 225 square meters consisting of four
bedrooms. A big master's bedroom complete with a bath and toilet was occupied by
Paula Arcega up to the time of her death on April 10, 1985 and the other three smaller
bedrooms are occupied by spouses, defendants Regalado Santiago and Rosita Palabyab,
and Josefina Arcega. After the death of Paula Arcega defendant Josefina Arcega and
Narciso Arcega constructed their own house at back portion of the lot in question.

There is a clear indication that the deed of sale which is unconscionably low for 937
square meters in favor of the defendants sometime on July 18, 1971 who are all members
of the SSS, is merely designed as an accommodation for purposes of loan with the SSS.
Paula Arcega cognizant of the shortage of funds in her possession in the amount of
P30,000.00, deemed it wise to augment her funds for construction purposes by way of a
mortgage with the SSS which only defendants could possibly effect they being members
of the SSS. Since the SSS requires the collateral to be in the name of the mortgagors,
Paula Arcega executed a simulated deed of sale (Kasulatan ng Bilihang Tuluyan ng
Lupa) for P20,000.00 dated July 18, 1971 in favor of the defendants and the same was
notarized by Atty. Luis Cuvin who emphatically claimed that no money was involved in
the transaction as the parties have other agreement. The allegations of the defendants
that the property was given to them (Kaloob) by the deceased has no evidentiary value.
While it is true that Rosita Palabyab stayed with the deceased since childhood, the same
cannot be said with respect to defendant Josefina Arcega, distant relative and a niece of
the wife of Narciso Arcega, who stayed with the deceased sometime in 1966 at the age of
 19 years and already working as a saleslady in Manila. Did the deceased indeed give
defendant Josefina Arcega half of her property out of love and gratitude? Such
circumstance appears illogical if not highly improbable. As a matter of fact defendant
Josefna Arcega in her unguarded moment unwittingly told the truth that the couple
(Regalado Santiago and Rosita Palabyab) had indeed borrowed the title and then
mortgaged the same with the SSS as shown in her direct testimony which reads:

Atty. Villanueva:

Q Why did you say that the house is owned by the spouses Santiago but
the lot is bought by you and Rosita?

A Because at that time, the couple4 borrowed the title and then

mortgaged the property with the SSS. There is only one title but both of
us owned it. (TSN dtd. 19 Oct '88, p. 5)5

On appeal, the public respondent Court of Appeals dismissed the same, affirming in all respects the RTC
judgment.

Hence, this petition.

The petition is unmeritorious.

Verily, this case is on all fours with Suntay v. Court of Appeals. 6 There, a certain Federico Suntay was
the registered owner of a parcel of land in Sto. Niño, Hagonoy, Bulacan. A rice miller, Federico applied
on September 30, 1960 as a miller-contractor of the then National Rice and Corn Corporation (NARIC),
but his application was disapproved because he was tied up with several unpaid loans. For purposes of
circumvention, he thought of allowing his nephew-lawyer, Rafael Suntay, to make the application for
him. To achieve this, Rafael prepared a notarized Absolute Deed of Sale whereby Federico, for and in
consideration of P20,000.00, conveyed to Rafael said parcel of land with all its existing structures. Upon
the execution and registration of said deed, Certificate of Title No. 0-2015 in the name of Federico was
cancelled and, in lieu thereof, TCT No. T-36714 was issued in the name of Rafael. Sometime in the
months of June to August, 1969, 7 Federico requested Rafael to deliver back to him the owner's duplicate
of the transfer certificate of title over the properties in question for he intended to use the property as
collateral in securing a bank loan to finance the expansion of his rice mill. Rafael, however, without just
cause, refused to deliver the title insisting that said property was "absolutely sold and conveyed [to
him] . . . for a consideration of P20,000.00, Philippine currency, and for other valuable consideration."
We therein ruled in favor of Federico Suntay and found that the deed of sale in question was merely an
absolutely simulated contract for the purpose of accommodation and therefore void. In retrospect, we
observed in that case:

Indeed the most protuberant index of simulation is the complete absence of an attempt in
any manner on the part of the late Rafael to assert his rights of ownership over the land
and rice mill in question. After the sale, he should have entered the land and occupied the
premises thereof. He did not even attempt to. If he stood as owner, he would have
collected rentals from Federico for the use and occupation of the land and its
improvements. All that the late Rafael had was a title in his name.

xxx xxx xxx

 . . . The fact that, notwithstanding the title transfer, Federico remained in actual
possession, cultivation and occupation of the disputed lot from the time the deed of sale
was executed until the present, is a circumstance which is unmistakably added proof of
the fictitiousness of the said transfer, the same being contrary to the principle of
ownership.8

In the case before us, while petitioners were able to occupy the property in question, they were relegated
to a small bedroom without bath and toilet, 9 while Paula Arcega remained virtually in full possession of
the completed house and lot using the big master's bedroom with bath and toilet up to the time of her
death on April 10, 1985. 10 If, indeed, the transaction entered into by the petitioners and the late Paula
Arcega on July 18, 1971 was a veritable deed of absolute sale, as it was purported to be, then Ms. Arcega
had no business whatsoever remaining in the property and, worse, to still occupy the big master's
bedroom with all its amenities until her death on April 10, 1985. Definitely, and legitimate vendee of real
property who paid for the property with good money will not accede to an arrangement whereby the
vendor continues occupying the most favored room in the house while he or she, as new owner, endures
the disgrace and absurdity of having to sleep in a small bedroom without bath and toilet as if he or she is a
guest or a tenant in the house. In any case, if petitioners really stood as legitimate owners of the property,
they would have collected rentals from Paula Arcega for the use and occupation of the master's bedroom
as she would then be a mere lessee of the property in question. However, not a single piece of evidence
was presented to show that this was the case. All told, the failure of petitioners to take exclusive
possession of the property allegedly sold to them, or in the alternative, to collect rentals from the alleged
vendee Paula Arcega, is contrary to the principle of ownership and a clear badge of simulation that
renders the whole transaction void and without force and effect, pursuant to Article 1409 of the New Civil
Code:

The following contracts are inexistent and void from the beginning:

xxx xxx xxx

(2) Those which are absolutely simulated or fictitious;

x x x           x x x          x x x

The conceded fact that subject deed of absolute sale executed by Paula Arcega in favor of petitioners is a
notarized document does not justify the petitioners' desired conclusion that said sale is undoubtedly a true
conveyance to which the parties thereto are irrevocably and undeniably bound. To be considered with
great significance is the fact that Atty. Luis Cuvin who notarized the deed disclaimed the truthfulness of
the document when he testified that "NO MONEY WAS INVOLVED IN THE
TRANSACTION." 11 Furthermore, though the notarization of the deed of sale in question vests in its
favor the presumption of regularity, it is not the intention nor the function of the notary public to validate
and make binding an instrument never, in the first place, intended to have any binding legal effect upon
the parties thereto. The intention of the parties still is and always will be the primary consideration in
determining the true nature of a contract. Here, the parties to the "Kasulatan ng Bilihang Tuluyan ng
Lupa," as shown by the evidence and accompanying circumstances, never intended to convey the
property thereto from one party to the other for valuable consideration. Rather, the transaction was merely
used to facilitate a loan with the SSS with petitioners-mortgagors using the property in question, the title
to which they were able to register in their names through the simulated sale, as collateral.

The fact that petitioners were able to secure a title in their names, TCT No. 148989, did not operate to
vest upon petitioners ownership over Paula Arcega's property. That act has never been recognized as a
mode of acquiring ownership. As a matter of fact, even the original registration of immovable property
does not vest title thereto. 12 The Torrens system does not create or vest title. It only confirms and records
title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield
for the commission of fraud. It does not permit one to enrich himself at the expense of another.  13 Where
one does not have any rightful claim over a real property, the Torrens system of registration can confirm
or record nothing.

Petitioners, nevertheless, insist that both the trial court and the respondent court should have followed the
Parole Evidence Rule and prevented evidence, like the testimony of Notary Public, Atty. Luis Cuvin,
private respondent Quirico Arcega, among others, which impugned the two notarized deeds of sale.

The rule on parole evidence under Section 9, Rule 130 is qualified by the following exceptions:

However, a party may present evidence to modify, explain or add to the terms of the
written agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the
parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest
after the execution of the written agreement.

The term "agreement" includes wills."

In this case, private respondent Quirico Arcega was able to put in issue in his complaint before the
Regional Trial Court the validity of the subject deeds of sale for being a simulated transaction:

6. That in 1971, the defendants, who by then were already employed in private firms and
had become members of the Social Security System by virtue of their respective
employments, decided among themselves to build a new house on the property of
PAULA ARCEGA above described and to borrow money from the Social Security
System to finance the proposed construction.

7. That in order to secure the loan from the Social Security System it was necessary that
the lot on which the proposed house would be erected should be registered and titled in
the names of the defendants.

xxx xxx xxx

9. That in conformity with the above plans and schemes of the defendants, they made
PAULA ARCEGA execute and sign a fictitious, hence null and void "KASULATAN NG
BILIHANG TULUYAN NG LUPA" on July 18, 1971, before Notary Public LUIS
CUVIN, of Bulacan and entered in his register as Doc. No. 253, Page No. 52, Book No.
XIX, Series of 1971, by which PAULA ARCEGA purportedly conveyed(sic) in favor of
the defendants JOSEFINA ARCEGA and the spouse REGALADO SANTIAGO and
 ROSITA PALABYAB, the whole parcel of land above described for the sum of
TWENTY THOUSAND (P20,000.00), as consideration which was not actually, then or
thereafter paid either wholly or partially. A copy of said document is hereto attached as
Annex "B" and made integral part hereof.

10. That defendants pursuing their unlawful scheme registered the said void and
inexistent "KASULATAN NG BILIHANG TULUYAN NG LUPA" with the office of
the Register of Deeds of Bulacan, procured the cancellation of Transfer Certificate of
Title No. 115510, in the name of PAULA ARCEGA and the issuance of Transfer
Certificate of Title No. 148989, in their names, a xeroxed copy of which is hereto
attached as Annex "C" and made integral part hereof.

11. That still in furtherance of their unjust and unlawful schemes, defendants secured a
loan from the Social Security System in the amount of P30,000.00, securing the payment
thereof with a Real Estate Mortgage on the above-described property then already titled
in their names as aforestated (pp. 2-3, complaint, pp. 1-5, rec.). 14

Moreover, the parol evidence rule may be waived by failure to invoke it, as by failure to object to the
introduction of parol evidence. And, where a party who is entitled to the benefit of the rule waives the
benefit thereof by allowing such evidence to be received without objection and without any effort to have
it stricken from the minutes or disregarded by the trial court, he cannot, after the trial has closed and the
case has been decided against him, invoke the rule in order to secure a reversal of the judgment by an
appellate court. 15 Here, the records are devoid of any indication that petitioners ever objected to the
admissibility of parole evidence introduced by the private respondent in open court. The court cannot
disregard evidence which would ordinarily be incompetent under the rules but has been rendered
admissible by the failure of a party to object thereto. 16 Petitioners have no one to blame but themselves in
this regard.

Finally, petitioners argue that private respondent's complaint filed before the trial court on October 24,
1985 is already barred by the statute of limitations and laches considering that the deed of absolute sale
was executed in their favor by the deceased Paula Arcega on July 20, 1971. Indeed, more than fourteen
(14) years had elapsed from the time his cause of action accrued to the time that the complaint was filed.
Articles 1144 and 1391 of the New Civil Code provide:

Art. 1141. The following actions must be brought within ten years from the time the right
of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

Art. 1391. The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of the
consent ceases.
 In cases of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other incapacitated
persons, from the time the guardianship ceases.

This submission is utterly without merit, the pertinent provision being Article 1410 of the New Civil
Code which provides unequivocably that "[T]he action or defense for the declaration of the inexistence of
a contract does not prescribe." 17

As for laches, its essence is the failure or neglect, for an unreasonable and unexplained length of time to
do that which, by exercising due diligence, could or should have been done earlier; it is the negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it. 18 But there is, to be sure, no absolute rule as to
what constitutes laches or staleness of demand; each case is to be determined according to its particular
circumstances. The question of laches is addressed to the sound discretion of the court, and since laches is
an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to
defeat justice or to perpetrate fraud and injustice. 19 In the case under consideration, it would not only be
impractical but well-nigh unjust and patently inequitous to apply laches against private respondent and
vest ownership over a valuable piece of real property in favor of petitioners by virtue of an absolutely
simulated deed of sale never, in the first place, meant to convey any right over the subject property. It is
the better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute
of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result. 20

WHEREFORE, premises considered, the petition is hereby DENIED with costs against petitioners.

SO ORDERED.
[G.R. No. 120654. September 11, 1996.]

MARIA LOURDES PAREDES-GARCIA, Petitioner, v. COURT OF APPEALS and HON.

ESCOLASTICO M. CRUZ, JR., Respondents.

DECISION

DAVIDE, JR., J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court to set aside the decision of
19 June 1995 1 of the Court of Appeals in CA-G.R. SP No. 37081 dismissing the petitioner’s special civil
action for certiorari to annul the order of respondent Judge Escolastico M. Cruz, Jr., which cited the
petitioner for contempt and ordered her to pay a fine of P100.00.

The pleadings and the annexes thereto disclose the following uncontroverted facts:chanrob1es virtual 1aw
library

The petitioner, an Assistant Provincial Prosecutor of Rizal, was deputized at the Office of the City
Prosecutor of Makati City and assigned at the Regional Trial Court (RTC), Branch 58, Makati City. The
respondent is the presiding judge of the said branch.

At 8:30 a.m. of 11 April 1995, the respondent Judge commenced the session of his court. When Criminal
Cases Nos. 93-7434 to 39 (People of the Philippines v. Ofelia Baja) was called the petitioner, who was
the prosecutor assigned to the said case, was not yet around. She arrived ten minutes later just when the
second case in the calendar was on its first call. The respondent Judge forthwith ordered the petitioner to
explain within seventy-two hours her failure to come to court on time.

Before the "finalization of the aforesaid open court order," the petitioner filed her Explanation. 2 She
alleged therein that she actually reported to her office at 8:00 a.m., as shown by a copy of a page of the
Prosecutor’s logbook, and that she went to the respondent Judge’s court. However, she returned to her
office to attend to some matters prior to the hearing. She thereafter proceeded back to the respondent
Judge’s court for the hearings, but was late for ten minutes. At the time, the second case was just on its
first call. She asserted further that she had never been late in any of the hearings of the court nor
previously fined or ordered to explain for tardiness in any hearing, which is the respondent Judge’s usual
practice for lawyers and litigants who come late.

On 12 April 1996, the respondent Judge issued the following order, 3 which cited the petitioner in
contempt of court and directed her to pay within seventy-two hours from receipt of the order a penalty in
the amount of P100.00.

In an open court order dated April 11, 1995, the Public Prosecutor and the Public Attorney were ordered
to explain their failure to come to court at 8:30 in the morning.

On even date and before the finalization of the aforesaid open court order, Public Prosecutor Maria
Lourdes P. Garcia submitted an ‘Explanation’ alleging, among other things, that on April 11, 1995, she
reported for work at around 8:00 a.m. as shown by the logbook, a photocopy of which she appended to
her ‘Explanation.’

In paragraph 5 of her ‘Explanation,’ she contends that she had never been late in any of the court hearings
as in fact she had never been ordered to explain nor imposed a fine, a usual practice as a matter of course.

The time has come for the Court to advice [sic] Asst. Prosecutor Garcia of the need to disabuse her mind
with the thought that the xerox copy of the logbook she attached to her ‘Explanation’ has evidentiary
value insofar as coming to court on time is concerned. She maybe [sic] in her office at 8:00 a.m. or even
earlier, but it does not follow that she is also in the court room before sessions begin. Under the law on
physics, no creature can occupy two different spaces at the same time. Coming to her office on time is
certainly different from coming to court on time.

On the argument that she had never been ordered to explain nor imposed a fine, Asst. Prosecutor Garcia is
well aware that her allegation of ‘for the record, undersigned had never been late in any of the hearings of
this Court . . .’ is a downright lie. If only she will examine her conscience, she would know that paragraph
5 of her ‘Explanation’ is a falsity. The only reason why the court never ordered her to explain her
tardiness is because of PAKIKISAMA (’companionship’ as translated into the English language by Mr.
Leo James English).

Asst. Prosecutor Garcia’s verbal clash with the branch clerk of court yesterday, April 11, 1995 is the
proverbial ‘last straw that broke the camel’s back.’ The branch clerk’s refusals to let her enter the
undersigned’s chambers are all orders of the undersigned out of propriety. Propriety dictates that no
lawyer with a pending case — government or private — should be allowed to talk with the undersigned.
Asst. Prosecutor Garcia has not only been improper in her several attempts to enter the undersigned’s
chambers — she has also been improper in asking the staff of this court to carry her travelling
bags/paraphernalias [sic] for her, to buy food, to deposit her pay checks, to run errands for her — all
reaching the knowledge of the branch clerk of court and the undersigned. Worse, if the Asst. Prosecutor
would perhaps ‘get down to brass tacks’ and remain in the court room while criminal proceedings are
going on, no case on technicality could have been lost (re: People v. Cawili).

In defiance of Memorandum # 1-95 dated March 28, 1995 conspicuously posted right at the court room
door, she still attempted several times to talk to the undersigned in chambers, prompting the branch clerk
of court to exercise her ‘administrative powers’ to rightfully prevent as she did, the Asst. Prosecutor from
doing so.

WHEREFORE, with all these and more, finding the ‘Explanation’ a downright lie, Asst. Prosecutor
MARIA LOURDES P. GARCIA is hereby cited in CONTEMPT of Court. Consequently, she is hereby
ordered to pay within seventy-two (72) hours from receipt of this order, a penalty in the amount of
P100.00 to the branch clerk, this court, who in turn is directed to turn over the fine to the Office of the
Clerk of Court after issuing the corresponding receipt therefor.

The petitioner filed a motion for a reconsideration of the order, which was, however, denied by the
respondent Judge. Pertinent portion of the order of denial reads:chanrob1es virtual 1aw library

Paragraph 9 of Asst. Prosecutor Maria Lourdes P. Garcia’s Motion for Reconsideration alleging that." . . .
this being the first incident at that, she does not deserve such cruel and harsh treatment from this
Honorable Court;’ is false, for the truth is what is stated in page 2 of the contempt order reproduced
hereunder, thus:chanrob1es virtual 1aw library

On the argument that she had never been ordered to explain nor imposed a fine, Asst. Prosecutor Garcia is
well aware that her allegation of ‘for the record, undersigned had never been late in any of the hearings of
this court . . . .’ is a downright lie. If only she will examine her conscience, she would know that
paragraph 5 of her "Explanation" is a falsity. The only reason why the court never asked her to explain
her tardiness is because of PAKIKISAMA (’companionship’ as translated in the English language by Mr.
Leo James English). 4

Aggrieved by the aforementioned orders, the petitioner instituted with the Court of Appeals a special civil
action for certiorari, which was docketed as CA-G.R. SP No. 37081, wherein she challenged the orders in
this manner:chanrob1es virtual 1aw library

FIRST: BEING UNINTENTIONALLY LATE FOR TEN (10) MINUTES DUE TO THE
PERFORMANCE OF OTHER OFFICIAL FUNCTIONS BY THE PETITIONER WHO IS AN
ASSISTANT PUBLIC PROSECUTOR ASSIGNED IN MAKATI CITY IS NOT A CALLOUS
DISREGARD TO THE ORDERS OF THE COURT NOR A CONTUMACIOUS ACT AGAINST THE
DIGNITY OF THE COURT AND AGAINST THE SOLEMNITY OF ITS PROCEEDINGS.

SECOND: THE CONTEMPT ORDER AND THE SUBSEQUENT ORDER OF THE HONORABLE
PUBLIC RESPONDENT DENYING PETITIONER’S MOTION FOR RECONSIDERATION ARE
HARSH AND CRUEL AND THAT THEY WERE DONE AND ISSUED WITH GRAVE ABUSE OF
DISCRETION.

THIRD: THE ISSUANCE OF A WARRANT OF ARREST IS A MISAPPLICATION AND A CLEAR

MISAPPRECIATION ON THE PART OF THE HONORABLE PUBLIC RESPONDENT OF SECTION
1, RULE 70 OF THE RULES OF COURT.

FOURTH: THE ASSAILED ORDERS AND THE PENALTIES IMPOSED BY THE HONORABLE
PUBLIC RESPONDENT WILL WORK GREAT INJUSTICE TO THE PETITIONER.

FIFTH: THERE IS NO OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY
COURSE AND LAW AVAILABLE TO THE HEREIN PETITIONER. 5

In his comment on the petition in CA-G.R. SP No. 37081, the respondent Judge defended the correctness
of his orders and attached thereto, among other things, (a) his Office Memorandum 1-95 of 28 March
1995 outlining his policy on those who wish to see him in his chambers; (b) his own affidavit narrating
his policies on how to conduct sessions in relation to tardiness and imposition of fines in particular, the
instances when the petitioner personally apologized to him for her tardiness, and the reason why he cited
the petitioner for contempt; (c) copies of eight of his orders imposing fines on government and private
prosecuting lawyers and litigants who arrived late in court; (d) separate affidavits of the personnel of his
sala (branch clerk of court, Criminal Cases in-charge, legal researcher, two court stenographers, branch
sheriff, process server, court aide, two casual employees), a prosecution witness, and a private
complainant, attesting to instances of tardiness of the petitioner.

The Court of Appeals limited the issues to whether the petitioner was tardy and whether she committed
falsehood in her explanation. 6

In its decision of 19 June 1995, 7 the Court of Appeals dismissed CA-G.R. SP No. 37081. As to the first
issue, it held that the petitioner herself admitted the fact of her tardiness. As to the second issue, it found
that the petitioner was not honest about her punctual attendance in court, which if considered together
with her tardiness, may be punished with contempt. Thus:chanrob1es virtual 1aw library

The possibility is, the petitioner was penalized for contempt not only because she was late or tardy, but
also because of falsehood in her April 11, [1995] "explanation." Precisely, the respondent said, despite
her tardiness, she offered no apology and worst she allegedly lied. Her "temerity" in alleging a falsehood
is a "callous disregard" of the dignity of the court and a "manifestation of disregard" of the virtue of
honesty. Besides, petitioner’s "blatant allegation of an obvious falsehood" is a wrongful act. 8

The Court of Appeals gave credence to the affidavits of the respondent Judge and several court
employees attesting to the tardiness of the petitioner on certain occasions. It concluded that although "a
late appearance by only about 10 minutes does not per se amount to a stubborn or perverse disobedience,"
that "tardiness coupled with statements less than truthful should certainly be castigated." It went on to
state that:chanrob1es virtual 1aw library

The respondent Judge should not be faulted for being strict in the matter of time attendance during trials.
He has . . . consistently penalized private as well as government lawyers, litigants, witnesses and court
personnel who are remiss in their duties to come to court on time, a policy he adopted without
exemptions, since 1989 when he was still a Presiding Judge of the Metropolitan Trial Court of Manila. 9

The petitioner then came to this Court through the instant petition for review contending that the decision
of the Court of Appeals is based on a mere possibility, thereby depriving her of her constitutional right to
be presumed innocent. She would never have the nerve or temerity to violate the court’s rules, indulge in
any falsehood, or commit any act which would taint her record and jeopardize her burning ambition to
join the judiciary in the future. She argues that if indeed she had been late, the best evidence would have
been a reprimand or admonition in an order issued by the respondent Judge; no such order exists. The fact
that she immediately submitted her explanation indicated her unfailing respect to the court. She also
attacks the value of the affidavits submitted by the respondent Judge before the Court of Appeals for
having been executed through the respondent Judge’s influence, who exercises moral ascendancy over the
affiants. She attached to her petition machine copies of several pages of the Prosecutor’s Logbook
showing her daily attendance from 16 August 1994 to 11 April 1995. 10

The petitioner also alleges that the contempt order was a retaliatory act because she had spurned the
respondent Judge’s amorous advances to her. Describing herself as a young woman, who is, by standards
of physical beauty, "well-endowed and physically attractive," she claims that the respondent Judge had
been extending unusual courtesies to her. There were numerous occasions when he would visit her in her
office or invite her for lunch at his chambers or elsewhere; he also allowed her frequent access to his
chambers and provided her an electric fan and a cellular phone. These were discreet ministrations for her
to give in to his offers for cocktails or a date at karaoke clubs. But prior to the issuance of the contempt
order, she earned the ire of the respondent Judge, because on a trip to Cagayan de Oro City, she failed to
call him despite his numerous requests to do so. She explained to him that she had lost the phone. At
another time, he sought her for the jurat in his affidavit; but when she requested him to personally appear
before her and take his oath, the respondent Judge was apparently insulted and had the affidavit retrieved
and referred to another prosecutor instead. She was, in fact, the prime target of Memorandum No. 1-95, to
sever whatever free access she had previously enjoyed.

Finally, the petitioner asserts that the respondent Judge acted with unusual haste in dismissing her
explanation and motion for reconsideration. If she were indeed guilty of anything, it would only be an
indirect contempt.

In his Comment, the respondent Judge questions the viability of this petition for its failure to raise
questions of law and to show that it falls within the exceptions to the rule on conclusiveness of the
findings of fact of the Court of Appeals. He underscores the fact that the petitioner admitted her tardiness.
The affidavits he submitted cannot be taken lightly, for they have been obtained from various affiants
whose positive assertions cannot prevail over the petitioner’s self-serving denial. He also observes that
some annexes 11 of the petition readily show that the petitioner had been late seven times when she
logged her time of arrival at her office at 8:30 a.m., 8:35 a.m., and 8:45 a.m. Evidently, if she arrived at
her office at 8:30 a.m., she could not have been in court at the same time. He claims that he has
consistently fined public and private lawyers and litigants who arrived late in court.

The respondent Judge further alleges that the electric fan was lent to the petitioner by the officer-in-
charge of the court, not by him, and that the cellular phone was just borrowed from him by the petitioner.
He denies the alleged amorous advances and claims that the petitioner is suffering from some delusions of
beauty. 12

Finally, the respondent Judge avers that all these years his record as a trial court judge remains unsullied.
He had been the recipient of several awards, such as the (1) Jose Abad Santos Award for Most
Outstanding Metropolitan Trial Court Judge of the Philippines [1991] given by the Foundation for
Judicial Excellence; (2) Presidential Lingkod Bayan Award [1991] given by the Office of the President;
and the (3) Outstanding Pillar of Justice Award [1994] given by the city government of Manila. On the
other hand, he bemoans the petitioner’s competence as a prosecutor and cites an instance where her
neglect in requesting the complainant to identify the signature of the drawee of bounced checks caused
the acquittal of the accused in a case 13 involving a violation of B.P. Blg. 22 (Bouncing Checks Law). In
another case, 14 she deliberately attempted to mislead the court by offering exhibits different from that
presented and marked in court.

In its Comment, the Office of the Solicitor General prays for the dismissal of the petition, as (a) it raises
pure questions of fact; and (b) contrary to the petitioner’s assertion, the challenged decision is supported
by the evidence on record notwithstanding the Court of Appeals’ use of the word "possibility." In any
event, the error thus raised refers to the application of evidence. As regards the petitioner’s contention
that the Court of Appeals disregarded certain relevant facts showing the "oppressive and vindictive
attitude" of the respondent Judge, the Office of the Solicitor General avers that the same cannot be
entertained for having been raised for the first time on appeal.

In her Reply to the Comments, the petitioner brings into focus the Court of Appeals’ alleged error in
upholding the nature of the contempt as direct contempt; in sustaining the legality of the contempt order,
although it was issued without due process; and in failing to consider the ulterior motive of the respondent
Judge in issuing the contempt order and to correct "the patent cruelty, the latent vindictiveness,
oppressiveness, and the retaliatory nature" of the said order. She attached thereto a copy of her
performance rating sheet and the affidavit of Ma. Enrina Talag-Pascual. The former shows that her
performance score for 1995 was 90%, earning for her a "very satisfactory" rating. She was, as well,
evaluated to possess good public relations and an integrity that is beyond reproach. In the latter, affiant
Enrina, a former acting branch clerk of court and interpreter of Branch 13, Metropolitan Trial Court of
Manila, declared that when the respondent Judge was the presiding judge of the said branch, he did
certain acts leading toward a special personal relationship with her. When he later notice her frequent
male visitor and her preference for that visitor, the respondent Judge would no longer talk to her nor give
her anything to do. Eventually, another person got the appointment to the position she was aspiring for.
Feeling cheated and taken advantage of, she resigned.

We resolved to give due course to this petition, and the parties submitted the required memoranda.

We find for the petitioner.

The power to punish for contempt is inherent in all courts. It is indispensable to their right of self-
preservation, to the execution of their powers, and to the maintenance of their authority, and consequently
to the due administration of justice. 15 It is an essential element, or is possessed as part, of judicial
authority vested by the Constitution in the courts. 16 Put a little differently, the power is an "implied
constitutional power." 17

The power, however, is not limitless. It must be used sparingly with caution, restraint, judiciousness,
deliberation, and due regard to the provisions of the law and the constitutional rights of the individual. It
should be exercised on the preservative and not on the vindictive principle. Being drastic and
extraordinary in its nature, it should not be resorted to unless necessary in the interest of justice. 18 For,
as observed in People v. Estenzo: 19

There is a compelling and exigent need therefore for judges to take utmost care lest prejudice, innate or
covert hostility to personality of counsel, or previous incidents lead them to characterize conduct
susceptible of innocent explanation as slights on the dignity of the court. It is ever timely to remember
how easy it is to overstep the dividing line that should separate the prosecutor from the judge, when both
roles are merged in the same person. The infusion of personal element may go unnoticed. Even if such
were not the case, objectively viewed, such an impression may be difficult to avoid by laymen. That is a
consideration that cannot be overlooked.

Indeed, the contempt power could easily tempt a judge to make its exercise nothing more than a
camouflage for a wounded pride, a burning prejudice, revenge, a misplaced passion, or selfish motives.

We do not hesitate to rule that the respondent Judge failed to observe the rule of conduct in the exercise
of the power to punish the petitioner for contempt of court. In our considered opinion, he acted without or
in excess of jurisdiction or with grave abuse of discretion in holding the petitioner guilty of contempt
without complying with the requirements of due process.

It must be underscored that in open court on 11 April 1995, the respondent Judge merely ordered the
petitioner to explain her failure to come to court on time or at 8:30 a.m. of that day. That order did not yet
amount to a show-cause order or a citation directing an explanation why she should not be held in
contempt of court for tardiness. Tardiness could be a valid ground for contempt. Justice Malcolm
remarked:chanrob1es virtual 1aw library

All too frequently, a Court of First Instance finds it necessary to impose a small fine on attorneys for
failure to be present at the session of the court at the hour and on the day named and for unseemly
behavior in the presence of the court. 20

Failure of counsel to appear in court for trial despite due notice was held to constitute indirect contempt,
21 for it is a misbehavior committed not in the presence of or so near a court or judge as to interrupt the
administration of justice. 22
The Explanation of the petitioner which was forthwith submitted was an explanation of her failure to
come on time, as was, in fact, called for in the order.

The respondent Judge issued the challenged order of 12 April 1995 mainly because of his perception that
the explanation was a "downright lie," and for the other grounds enumerated in the order, viz., the
petitioner’s (a) verbal clash with the branch clerk of court on 11 April 1995 when the latter prevented the
former from entering the Judge’s chamber; (b) previous improper attempts to enter the said chambers; (c)
improper conduct in asking the staff of the court to carry her travelling bags or paraphernalia, buy food,
deposit her pay checks, or run errands for her (d) defiance of the respondent Judge’s Memorandum No. 1-
95, dated 28 March 1995; and (e) failure to remain in court while criminal proceedings were going on
resulting in the dismissal of a case due to technicality.

Clearly then, the petitioner was cited and punished for contempt not only because of her "failure to come
to court on time" in the morning of 11 April 1995, but also because of the foregoing acts or omissions.
Her tardiness as a ground for contempt was, however, relegated to the background, for the respondent
Judge had found other grounds for contempt.

The grounds or reasons enumerated by the respondent Judge could constitute grounds for indirect
contempt under Section 3, Rule 71 of the Rules of Court, probably under paragraphs (a) and (d) thereof.
23 He cannot, therefore, immediately impose a penalty, but must faithfully comply with the due process
requirements prescribed in the said Section 3, namely, the filing of a charge in writing and giving the
accused an opportunity to be heard by himself or by counsel. The charge under this section may be made
by the judge himself. 24 And considering that the latter seemed to have personal knowledge of such
alleged grounds, it was even his duty if he were honestly convinced of the viability of such grounds to
institute the proceedings. 25 If the answer to the charge is satisfactory, the contempt proceedings ends.
Otherwise, it shall proceed in accordance with the Rules. 26 On the day set for the hearing, the court shall
proceed to investigate the charges and consider such answer or testimony as the respondent may make or
offer. 27 Since contempt of court proceedings are commonly treated as criminal in their nature, the mode
of procedure and rules of evidence therein are assimilated to criminal prosecutions. 28 Accordingly, if
reasonable doubt in fact or in law exists as to the alleged contemner’s guilt, the doubt shall be resolved in
favor of the alleged contemner. 29 The penalty, if warranted, can only be imposed after the alleged
contemner shall have been heard. 30

In finding the petitioner guilty of the aforementioned acts and imposing upon her the penalty of a fine
without granting her an opportunity to answer the imputed falsehood and improprieties and an
opportunity to be heard, the respondent Judge disregarded the requirements of due process in contempt
proceedings and, therefore, acted without or in excess of jurisdiction or with grave abuse of discretion. 31

Even assuming arguendo that the respondent Judge’s order of 12 April 1995 was meant to be a resolution
on the issue of the petitioner’s tardiness in the morning of 11 April 1995, and that it could be summarily
dealt with as a direct contempt and forthwith punished, the penalty of P100.00 is unreasonable. The
petitioner admitted that she was late by ten minutes and that she arrived when the second case in the
calendar was on its first call. This reference to a first call, which is not denied by the respondent Judge,
presupposes the existence of a practice where at the commencement of the sessions at 8:30 a.m. the cases
are called to determine which are ready and to call the second time those which were not ready on the
first call. Of course, it cannot be expected that two cases ready on the first call would be tried at the same
time. The delay then of ten minutes was of de minimis importance, especially considering the fact that
there is no showing at all that another case was ready for trial at 8:30 a.m.

As to the alleged "lie" which the respondent Judge characterized as "downright," no evidence supports it
except his appeal to the petitioner to examine her conscience because she knew that if the court never
ordered her to explain her tardiness it was due to "pakikisama." This appeal to the petitioner’s conscience
was itself an admission that there was no evidence to prove the petitioner’s prior tardiness or of any order
calling her attention to it or admonishing her for that. If it was the respondent Judge’s practice or policy to
impose a fine on lawyers and litigants — and he was able to attach to his Comment in CA-G.R. SP No.
37081 copies of eight orders imposing such fines — then he should have done so against the petitioner if
she were tardy in the past. Yet, he could not produce any order intended for the petitioner; he was then
unfair or discriminatory in the implementation of his policy or practice. If the petitioner had in fact been
tardy to a point of habituality, no "pakikisama" can warrant the respondent Judge’s tolerance, unless we
are to believe the petitioner’s version that she had been the object of the respondent Judge’s special
attention or grant of privileges in the past.

Moreover, since what was filed was a special civil action for certiorari under Rule 65 of the Rules of
Court, which is an available remedy in appropriate cases of judgments in contempt proceedings, 32 the
only issue which the respondent Court had to resolve was whether the respondent Judge has acted without
or in excess of jurisdiction or with grave abuse of discretion in issuing the challenged orders. 33 It should
not have taken into account in resolving the merits of the case the affidavits and other documents
submitted by the respondent Judge to prove the alleged falsehood in the petitioner’s Explanation and the
correctness of his orders. These pieces of evidence, obtained when this case was already before the Court
of Appeals, were not available to or considered by the respondent Judge when he issued the orders.

The above pronouncements should not be understood as absolving the petitioner from any liability for her
tardiness or from her solemn duty as an officer of the court. As a lawyer, she is bound by her oath to
conduct herself as a lawyer according to the best of her knowledge and discretion with all good fidelity as
well to the courts as to her client. She should never forget that punctuality is not only a practice mandated
by the Code of Professional Responsibility 34 and Canons of Professional Ethics, 35 it is a virtue which
must be faithfully maintained as part of her contribution in the task of ensuring a speedy, efficient, and
effective administration of justice. If the petitioner then had committed a breach of her duty to the court
she should accordingly be dealt with but in accordance with established procedure. The right to do so is
hereby reserved to the respondent Judge.

We close with the sad observation that both the petitioner and the respondent Judge have resorted to
personal attacks against each other in this case. They failed to limit themselves to the issues and even
exchanged tirades on their competence and physical being. They did not observe the proper decorum of
civility and refinement even in times of disagreement. Such is not expected of them as officers of the
court. What happened in this case may not easily be forgotten by them. If the petitioner would thus
remain detailed at the branch of the Regional Trial Court of Makati City presided over by the respondent
Judge the soured relationship may affect the administration of justice. The petitioner then must be re-
assigned somewhere else.

WHEREFORE, the instant petition is GRANTED. The challenged decision of 19 June 1995 of the Court
of Appeals in CA-G.R. SP No. 37081 and the challenged orders of respondent Judge Escolastico M. Cruz,
Jr., of 12 April 1995 and 20 April 1995 in Criminal Cases Nos. 93-7434 to 39 are SET ASIDE.

The Department of Justice and the Office of the Provincial Prosecutor of Rizal are requested to recall the
designation of the petitioner to Branch 58 of the Regional Trial Court of Makati City and to detail her to
other courts if these have not been done yet.

No pronouncement as to costs.

SO ORDERED.
RAFAEL S. ORTAÑEZ, Petitioner, v. THE COURT OF APPEALS, OSCAR INOCENTES, and
ASUNCION LLANES INOCENTES, Respondents.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; PAROL EVIDENCE RULE; WHEN THE TERMS OF A

CONTRACT WERE REDUCED TO WRITING, IT IS DEEMED TO CONTAIN ALL THE TERMS
AGREED UPON. — Private respondents’ oral testimony on the alleged conditions, coming from a party
who has an interest in the outcome of the case, depending exclusively on human memory, is not as
reliable as written or documentary evidence. Spoken words could be notoriously unreliable unlike a
written contract which speaks of a uniform language. Thus, under the general rule in Section 9 of Rule
130 of the Rules of Court, when the terms of an agreement were reduced to writing, as in this case, it is
deemed to contain all the terms agreed upon and no evidence of such terms can be admitted other than the
contents thereof. Considering that the written deeds of sale were the only repository of the truth, whatever
is not found in said instruments must have been waived and abandoned by the parties. Examining the
deeds of sale, we cannot even make an inference that the sale was subject to any condition. As a contract,
it is the law between the parties.

2. ID.; ID.; ID.; LAND SETTLEMENT AND DEVELOPMENT CORP. CASE (117 PHIL. [1963], NOT
APPLICABLE TO CASE AT BAR. — To buttress their argument, private respondents rely on the case
of Land Settlement and Development Corp. v. Garcia Plantation where the Court ruled that a condition
precedent to a contract may be established by parol evidence. However, the material facts of the case are
different from this case. In the former, the contract sought to be enforced expressly stated that it is subject
to an agreement containing the conditions-precedent which were proven through parol evidence.
Whereas, the deeds of sale in this case, made no reference to any preconditions or other agreement. In
fact, the sale is denominated as absolute in its own terms.

3. ID.; ID.; ID.; CANNOT VARY, CONTRADICT OR DEFEAT THE OPERATION OF A VALID
INSTRUMENT. — The parol evidence herein sought to be introduced would vary, contradict or defeat
the operation of a valid instrument, hence, contrary to the rule that: "The parol evidence rule forbids any
addition . . . the terms of a written instrument by testimony purporting to show that, at or before the
signing of the document, other or different terms were orally agreed upon by the parties."cralaw
virtua1aw library

4. ID.; ID.; ID.; CANNOT INCORPORATE ADDITIONAL CONTEMPORANEOUS CONDITIONS.

— Although parol evidence is admissible to explain the meaning of a contract, "it cannot serve the
purpose of incorporating into the contract additional contemporaneous conditions which are not
mentioned at all in the writing unless there has been fraud or mistake." No such fraud or mistake exists in
this case.

5. ID.; ID.; ID.; INADMISSIBLE WHERE THE CONTRACTS ARE CLEAR AND UNAMBIGUOUS.
— We disagree with private respondents’ argument that their parol evidence is admissible under the
exceptions provided by the Rules, specifically, the alleged failure of the agreement to express the true
intent of the parties. In this case, the deeds of sale are clear, without any ambiguity, mistake or
imperfection, much less obscurity or doubt in the terms thereof.

6. ID.; ID.; ID.; GROUND THEREFOR MUST BE EXPRESSLY PLEADED. — We are not persuaded
by private respondents’ contention that they "put in issue by the pleadings" the failure of the written
agreement to express the true intent of the parties. Record shows that private respondents did not
expressly plead that the deeds of sale were incomplete or that it did not reflect the intention of the buyer
(petitioner) and the seller (private respondents). Such issue must be "squarely presented." Private
respondents merely alleged that the sale was subject to four (4) conditions which they tried to prove
during trial by parol evidence. Obviously, this cannot be done, because they did not plead any of the
exceptions mentioned in the parol evidence rule. Their case is covered by the general rule that the
contents of the writing are the only repository of the terms of the agreement. Considering that private
respondent Oscar Inocentes is a lawyer (and former Judge) he was "supposed to be steeped in legal
knowledge and practices" and was "expected to know the consequences" of his signing a deed of absolute
sale. Had he given an iota’s attention to scrutinize the deeds, he would have incorporated important
stipulations that the transfer of title to said lots were conditional.

RESOLUTION
FRANCISCO, J.:

On September 30, 1982, private respondents sold to petitioner two (2) parcels of registered land in
Quezon City for a consideration of P35,000.00 and P20,000.00, respectively. The first deed of absolute
sale covering Transfer Certificate of Title (TCT) No. 258628 provides in part:jgc:chanrobles.com.ph

"That for and in consideration of the sum of THIRTY FIVE THOUSAND (P35,000.00) PESOS, receipt
of which in full is hereby acknowledged, we have sold, transferred and conveyed, as we hereby sell,
transfer and convey, that subdivided portion of the property covered by TCT No. 258628 known as Lot
No. 684-G-1-B-2 in favor of RAFAEL S. ORTANEZ, of legal age, Filipino, whose marriage is under a
regime of complete separation of property, and a resident of 942 Aurora Blvd., Quezon City, his heirs or
assigns." 1

while the second deed of absolute sale covering TCT No. 243273 provides:chanrob1es virtual 1aw library

That for and in consideration of the sum of TWENTY THOUSAND (P20,000.00) PESOS receipt of
which in full is hereby acknowledged, we have sold, transferred and conveyed, as we hereby sell, transfer
and convey, that consolidated-subdivided portion of the property covered by TCT No. 243273 known as
Lot No. 5 in favor of RAFAEL S. ORTAÑEZ, of legal age, Filipino, whose marriage is under a regime of
complete separation of property, and a resident of 942 Aurora Blvd., Cubao, Quezon City his heirs or
assigns. 2

Private respondents received the payments for the above-mentioned lots, but failed to deliver the titles to
petitioner. On April 9, 1990 the latter demanded from the former the delivery of said titles. 3 Private
respondents, however, refused on the ground that the title of the first lot is in the possession of another
person, 4 and petitioner’s acquisition of the title of the other lot is subject to certain conditions.

Offshoot, petitioner sued private respondents for specific performance before the RTC. In their answer
with counterclaim private respondents merely alleged the existence of the following oral conditions 5
which were never reflected in the deeds of sale: 6

"3.3.2 Title to the other property (TCT No. 243273) remains with the defendants (private respondents)
until plaintiff (petitioner) shows proof that all the following requirements have been met:chanrob1es
virtual 1aw library

(i) Plaintiff will cause the segregation of his right of way amounting to 398 sq. m.;

(ii) Plaintiff will submit to the defendants the approved plan for the segregation;

(iii) Plaintiff will put up a strong wall between his property and that of defendants’ lot to segregate his
right of way;

(iv) Plaintiff will pay the capital gains tax and all other expenses that may be incurred by reason of
sale. . . .

During trial, private respondent Oscar Inocentes, a former judge, orally testified that the sale was subject
to the above conditions, 7 although such conditions were not incorporated in the deeds of sale. Despite
petitioner’s timely objections on the ground that the introduction of said oral conditions was barred by the
parol evidence rule, the lower court nonetheless, admitted them and eventually dismissed the complaint as
well as the counterclaim. On appeal, the Court of Appeals (CA) affirmed the court a quo. Hence, this
petition.

We are tasked to resolve the issue on the admissibility of parol evidence to establish the alleged oral
conditions-precedent to a contract of sale, when the deeds of sale are silent on such conditions.

The parol evidence herein introduced is inadmissible. First, private respondents’ oral testimony on the
alleged conditions, coming from a party who has an interest in the outcome of the case, depending
exclusively on human memory, is not as reliable as written or documentary evidence. 8 Spoken words
could be notoriously unreliable unlike a written contract which speaks of a uniform language. 9 Thus,
under the general rule in Section 9 of Rule 130 10 of the Rules of Court, when the terms of an agreement
were reduced to writing, as in this case, it is deemed to contain all the terms agreed upon and no evidence
of such terms can be admitted other than the contents thereof. 11 Considering that the written deeds of
sale were the only repository of the truth, whatever is not found in said instruments must have been
waived and abandoned by the parties. 12 Examining the deeds of sale, we cannot even make an inference
that the sale was subject to any condition. As a contract, it is the law between the parties. 13

Secondly, to buttress their argument, private respondents rely on the case of Land Settlement
Development, Co. v. Garcia Plantation 14 where the Court ruled that a condition precedent to a contract
may be established by parol evidence. However, the material facts of that case are different from this
case. In the former, the contract sought to be enforced 15 expressly stated that it is subject to an
agreement containing the conditions-precedent which were proven through parol evidence. Whereas, the
deeds of sale in this case, made no reference to any pre-conditions or other agreement. In fact, the sale is
denominated as absolute in its own terms. chanroblesvirtuallawlibrary

Third, the parol evidence herein sought to be introduced would vary, contradict or defeat the operation of
a valid instrument, 16 hence, contrary to the rule that:chanrob1es virtual 1aw library

The parol evidence rule forbids any addition to . . . the terms of a written instrument by testimony
purporting to show that, at or before the signing of the document, other or different terms were orally
agreed upon by the parties. 17

Although parol evidence is admissible to explain the meaning of a contract, "it cannot serve the purpose
of incorporating into the contract additional contemporaneous conditions which are not mentioned at all
in the writing unless there has been fraud or mistake." 18 No such fraud or mistake exists in this case.

Fourth, we disagree with private respondents’ argument that their parol evidence is admissible under the
exceptions provided by the Rules, specifically, the alleged failure of the agreement to express the true
intent of the parties. Such exception obtains only in the following instance:chanrob1es virtual 1aw library

[W]here the written contract is so ambiguous or obscure in terms that the contractual intention of the
parties cannot be understood from a mere reading of the instrument. In such a case, extrinsic evidence of
the subject matter of the contract, of the relations of the parties to each other, and of the facts and
circumstances surrounding them when they entered into the contract may be received to enable the court
to make a proper interpretation of the instrument. 19

In this case, the deeds of sale are clear, without any ambiguity, mistake or imperfection, much less
obscurity or doubt in the terms thereof.

Fifth, we are not persuaded by private respondents contention that they "put in issue by the pleadings" the
failure of the written agreement to express the true intent of the parties. Record shows 20 that private
respondents did not expressly plead that the deeds of sale were incomplete or that it did not reflect the
intention 21 of the buyer (petitioner) and the seller (private respondents). Such issue must be "squarely
presented." 22 Private respondents merely alleged that the sale was subject to four (4) conditions which
they tried to prove during trial by parol evidence. 23 Obviously, this cannot be done, because they did not
plead any of the exceptions mentioned in the parol evidence rule. 24 Their case is covered by the general
rule that the contents of the writing are the only repository of the terms of the agreement. Considering that
private respondent Oscar Inocentes is a lawyer (and former judge) he was "supposed to be steeped in legal
knowledge and practices" and was expected to know the consequences" 25 of his signing a deed of
absolute sale. Had he given an iota’s attention to scrutinize the deeds, he would have incorporated
important stipulations that the transfer of title to said lots were conditional. 26

One last thing, assuming arguendo that the parol evidence is admissible, it should nonetheless be
disbelieved as no other evidence appears from the record to sustain the existence of the alleged
conditions. Not even the other seller, Asuncion Inocentes, was presented to testify on such conditions.

ACCORDINGLY, the appealed decision is REVERSED and the records of this case REMANDED to the
trial court for proper disposition in accordance with this ruling.

SO ORDERED.