Represented by His Estate/Heirs and Imelda R. Marcos, Pursuant To RA 1379

1. Republic vs. SB GR No.
152154, July 15, 2003
G.R. No. 152154 July 15, 2003
REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION), FERDINAND E. MARCOS
(REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA [IMEE]
MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND IRENE MARCOS-ARANETA) AND
IMELDA ROMUALDEZ MARCOS, respondents.
CORONA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set aside the Resolution dated
January 31, 2002 issued by the Special First Division of the Sandiganbayan in Civil Case No. 0141
entitled Republic of the Philippines vs. Ferdinand E. Marcos, et. al., and (2) reinstate its earlier decision dated
September 19, 2000 which forfeited in favor of petitioner Republic of the Philippines (Republic) the amount
held in escrow in the Philippine National Bank (PNB) in the aggregate amount of US$658,175,373.60 as of
January 31, 2002.
BACKGROUND OF THE CASE
On December 17, 1991, petitioner Republic, through the Presidential Commission on Good Government
(PCGG), represented by the Office of the Solicitor General (OSG), filed a petition for forfeiture before the
Sandiganbayan, docketed as Civil Case No. 0141 entitled Republic of the Philippines vs. Ferdinand E. Marcos,
represented by his Estate/Heirs and Imelda R. Marcos, pursuant to RA 13791 in relation to Executive Order
Nos. 1,2 2,3 144 and 14-A.5
In said case, petitioner sought the declaration of the aggregate amount of US$356 million (now estimated to be
more than US$658 million inclusive of interest) deposited in escrow in the PNB, as ill-gotten wealth. The funds
were previously held by the following five account groups, using various foreign foundations in certain Swiss
banks:
(1) Azio-Verso-Vibur Foundation accounts;
(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina Foundation accounts;
(3) Trinidad-Rayby-Palmy Foundation accounts;
(4) Rosalys-Aguamina Foundation accounts and
(5) Maler Foundation accounts.
In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which
exceeded the Marcos couple's salaries, other lawful income as well as income from legitimately acquired
property. The treasury notes are frozen at the Central Bank of the Philippines, now Bangko Sentral ng Pilipinas,
by virtue of the freeze order issued by the PCGG.
On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and
Ferdinand R. Marcos, Jr. filed their answer.
Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements 6 dated December
28, 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global
settlement of the assets of the Marcos family. Subsequently, respondent Marcos children filed a motion dated
December 7, 1995 for the approval of said agreements and for the enforcement thereof.
The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of and
distribute all assets presumed to be owned by the Marcos family under the conditions contained therein. The
aforementioned General Agreement specified in one of its premises or "whereas clauses" the fact that petitioner
"obtained a judgment from the Swiss Federal Tribunal on December 21, 1990, that the Three Hundred Fifty-six
Million U.S. dollars (US$356 million) belongs in principle to the Republic of the Philippines provided certain
conditionalities are met x x x." The said decision of the Swiss Federal Supreme Court affirmed the decision of
Zurich District Attorney Peter Consandey, granting petitioner's request for legal assistance. 7 Consandey
declared the various deposits in the name of the enumerated foundations to be of illegal provenance and ordered
that they be frozen to await the final verdict in favor of the parties entitled to restitution.
Hearings were conducted by the Sandiganbayan on the motion to approve the General/Supplemental
Agreements. Respondent Ferdinand, Jr. was presented as witness for the purpose of establishing the partial
implementation of said agreements.
On October 18, 1996, petitioner filed a motion for summary judgment and/or judgment on the pleadings.
Respondent Mrs. Marcos filed her opposition thereto which was later adopted by respondents Mrs. Manotoc,
Mrs. Araneta and Ferdinand, Jr.
In its resolution dated November 20, 1997, the Sandiganbayan denied petitioner's motion for summary
judgment and/or judgment on the pleadings on the ground that the motion to approve the compromise
agreement "(took) precedence over the motion for summary judgment."
Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was not a party to the motion for
approval of the Compromise Agreement and that she owned 90% of the funds with the remaining 10%
belonging to the Marcos estate.
Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich, Switzerland, an additional
request for the immediate transfer of the deposits to an escrow account in the PNB. The request was granted. On
appeal by the Marcoses, the Swiss Federal Supreme Court, in a decision dated December 10, 1997, upheld the
ruling of the District Attorney of Zurich granting the request for the transfer of the funds. In 1998, the funds
were remitted to the Philippines in escrow. Subsequently, respondent Marcos children moved that the funds be
placed in custodia legis because the deposit in escrow in the PNB was allegedly in danger of dissipation by
petitioner. The Sandiganbayan, in its resolution dated September 8, 1998, granted the motion.
After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial order dated October 28, 1999
and January 21, 2000, respectively, the case was set for trial. After several resettings, petitioner, on March 10,
2000, filed another motion for summary judgment pertaining to the forfeiture of the US$356 million, based on
the following grounds:
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS SUBJECT OF
THE PETITION UNDER R.A. NO. 1379 ARE ADMITTED BY RESPONDENTS IN THEIR
PLEADINGS AND OTHER SUBMISSIONS MADE IN THE COURSE OF THE PROCEEDING.
II
RESPONDENTS' ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT HAVE
ANY INTEREST OR OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION FOR
FORFEITURE TENDERS NO GENUINE ISSUE OR CONTROVERSY AS TO ANY MATERIAL
FACT IN THE PRESENT ACTION, THUS WARRANTING THE RENDITION OF SUMMARY
JUDGMENT.8
Petitioner contended that, after the pre-trial conference, certain facts were established, warranting a summary
judgment on the funds sought to be forfeited.
Respondent Mrs. Marcos filed her opposition to the petitioner's motion for summary judgment, which
opposition was later adopted by her co-respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.
On March 24, 2000, a hearing on the motion for summary judgment was conducted.
In a decision9 dated September 19, 2000, the Sandiganbayan granted petitioner's motion for summary judgment:
CONCLUSION
There is no issue of fact which calls for the presentation of evidence.
The Motion for Summary Judgment is hereby granted.
The Swiss deposits which were transmitted to and now held in escrow at the PNB are deemed
unlawfully acquired as ill-gotten wealth.
DISPOSITION
WHEREFORE, judgment is hereby rendered in favor of the Republic of the Philippines and against the
respondents, declaring the Swiss deposits which were transferred to and now deposited in escrow at the
Philippine National Bank in the total aggregate value equivalent to US$627,608,544.95 as of August 31,
2000 together with the increments thereof forfeited in favor of the State.10
Respondent Mrs. Marcos filed a motion for reconsideration dated September 26, 2000. Likewise, Mrs. Manotoc
and Ferdinand, Jr. filed their own motion for reconsideration dated October 5, 2000. Mrs. Araneta filed a
manifestation dated October 4, 2000 adopting the motion for reconsideration of Mrs. Marcos, Mrs. Manotoc
and Ferdinand, Jr.
Subsequently, petitioner filed its opposition thereto.
In a resolution11 dated January 31, 2002, the Sandiganbayan reversed its September 19, 2000 decision, thus
denying petitioner's motion for summary judgment:
CONCLUSION
In sum, the evidence offered for summary judgment of the case did not prove that the money in the
Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record as to the
ownership by the Marcoses of the funds in escrow from the Swiss Banks.
The basis for the forfeiture in favor of the government cannot be deemed to have been established and
our judgment thereon, perforce, must also have been without basis.
WHEREFORE, the decision of this Court dated September 19, 2000 is reconsidered and set aside, and
this case is now being set for further proceedings.12
Hence, the instant petition. In filing the same, petitioner argues that the Sandiganbayan, in reversing its
September 19, 2000 decision, committed grave abuse of discretion amounting to lack or excess of jurisdiction
considering that --
PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE REQUISITES OF
SECTIONS 2 AND 3 OF R.A. NO. 1379:
A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE

PERSONAL CIRCUMSTANCES OF FERDINAND E. MARCOS AND IMELDA R.
MARCOS AS PUBLIC OFFICIALS BUT ALSO THE EXTENT OF THEIR SALARIES AS
SUCH PUBLIC OFFICIALS, WHO UNDER THE CONSTITUTION, WERE PROHIBITED
FROM ENGAGING IN THE MANAGEMENT OF FOUNDATIONS.
B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS

DEPOSITS AND THEIR OWNERSHIP THEREOF:
1. ADMISSIONS IN PRIVATE RESPONDENTS' ANSWER;
2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY

SIGNED AND SOUGHT TO IMPLEMENT;
3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R.

MARCOS AND IN THE MOTION TO PLACE THE RES IN CUSTODIA LEGIS;
AND
4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS

VICTIMS.
C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF

FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC OFFICIALS.
D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF

UNLAWFULLY ACQUIRED WEALTH.
II
SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED

ANY GENUINE ISSUE OF FACT CONSIDERING THAT:
A. PRIVATE RESPONDENTS' DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY

ACQUIRED DOES NOT ONLY FAIL TO TENDER AN ISSUE BUT IS CLEARLY A SHAM;
AND
B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS,

PRIVATE RESPONDENTS ABANDONED THEIR SHAM DEFENSE OF LEGITIMATE
ACQUISITION, AND THIS FURTHER JUSTIFIED THE RENDITION OF A SUMMARY
JUDGMENT.
III
THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.
IV
THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF DISCRETION IN

REVERSING HIMSELF ON THE GROUND THAT ORIGINAL COPIES OF THE
AUTHENTICATED SWISS DECISIONS AND THEIR "AUTHENTICATED TRANSLATIONS"
HAVE NOT BEEN SUBMITTED TO THE COURT, WHEN EARLIER THE SANDIGANBAYAN
HAS QUOTED EXTENSIVELY A PORTION OF THE TRANSLATION OF ONE OF THESE SWISS
DECISIONS IN HIS "PONENCIA" DATED JULY 29, 1999 WHEN IT DENIED THE MOTION TO
RELEASE ONE HUNDRED FIFTY MILLION US DOLLARS ($150,000,000.00) TO THE HUMAN
RIGHTS VICTIMS.
PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE

AUTHENTICITY OF THE SWISS FEDERAL SUPREME COURT DECISIONS. 13
Petitioner, in the main, asserts that nowhere in the respondents' motions for reconsideration and supplemental
motion for reconsideration were the authenticity, accuracy and admissibility of the Swiss decisions ever
challenged. Otherwise stated, it was incorrect for the Sandiganbayan to use the issue of lack of authenticated
translations of the decisions of the Swiss Federal Supreme Court as the basis for reversing itself because
respondents themselves never raised this issue in their motions for reconsideration and supplemental motion for
reconsideration. Furthermore, this particular issue relating to the translation of the Swiss court decisions could
not be resurrected anymore because said decisions had been previously utilized by the Sandiganbayan itself in
resolving a "decisive issue" before it.
Petitioner faults the Sandiganbayan for questioning the non-production of the authenticated translations of the
Swiss Federal Supreme Court decisions as this was a marginal and technical matter that did not diminish by any
measure the conclusiveness and strength of what had been proven and admitted before the Sandiganbayan, that
is, that the funds deposited by the Marcoses constituted ill-gotten wealth and thus belonged to the Filipino
people.
In compliance with the order of this Court, Mrs. Marcos filed her comment to the petition on May 22, 2002.
After several motions for extension which were all granted, the comment of Mrs. Manotoc and Ferdinand, Jr.
and the separate comment of Mrs. Araneta were filed on May 27, 2002.
Mrs. Marcos asserts that the petition should be denied on the following grounds:
A.
PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE

SANDIGANBAYAN.
B.
THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR
FURTHER PROCEEDINGS.14
Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in the ordinary course of law in
view of the resolution of the Sandiganbayan dated January 31, 2000 directing petitioner to submit the
authenticated translations of the Swiss decisions. Instead of availing of said remedy, petitioner now elevates the
matter to this Court. According to Mrs. Marcos, a petition for certiorari which does not comply with the
requirements of the rules may be dismissed. Since petitioner has a plain, speedy and adequate remedy, that is, to
proceed to trial and submit authenticated translations of the Swiss decisions, its petition before this Court must
be dismissed. Corollarily, the Sandiganbayan's ruling to set the case for further proceedings cannot and should
not be considered a capricious and whimsical exercise of judgment.
Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the dismissal of the petition on the
grounds that:
(A)
BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 MARCH
2000, IT WAS ALREADY BARRED FROM DOING SO.
(1) The Motion for Summary Judgment was based on private respondents' Answer and other documents
that had long been in the records of the case. Thus, by the time the Motion was filed on 10 March 2000,
estoppel by laches had already set in against petitioner.
(2) By its positive acts and express admissions prior to filing the Motion for Summary Judgment on 10
March 1990, petitioner had legally bound itself to go to trial on the basis of existing issues. Thus, it
clearly waived whatever right it had to move for summary judgment.
(B)
EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING THE
MOTION FOR SUMMARY JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN RULING
THAT PETITIONER HAS NOT YET ESTABLISHED A PRIMA FACIE CASE FOR THE
FORFEITURE OF THE SWISS FUNDS.
(1) Republic Act No. 1379, the applicable law, is a penal statute. As such, its provisions, particularly the
essential elements stated in section 3 thereof, are mandatory in nature. These should be strictly construed
against petitioner and liberally in favor of private respondents.
(2) Petitioner has failed to establish the third and fourth essential elements in Section 3 of R.A. 1379
with respect to the identification, ownership, and approximate amount of the property which the Marcos
couple allegedly "acquired during their incumbency".
(a) Petitioner has failed to prove that the Marcos couple "acquired" or own the Swiss funds.
(b) Even assuming, for the sake of argument, that the fact of acquisition has been proven,
petitioner has categorically admitted that it has no evidence showing how much of the Swiss
funds was acquired "during the incumbency" of the Marcos couple from 31 December 1965 to
25 February 1986.
(3) In contravention of the essential element stated in Section 3 (e) of R.A. 1379, petitioner has
failed to establish the other proper earnings and income from legitimately acquired property of
the Marcos couple over and above their government salaries.
(4) Since petitioner failed to prove the three essential elements provided in paragraphs (c) 15 (d),16 and
(e)17 of Section 3, R.A. 1379, the inescapable conclusion is that the prima facie presumption of unlawful
acquisition of the Swiss funds has not yet attached. There can, therefore, be no premature forfeiture of
the funds.
(C)
IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS

MADE BY PRIVATE RESPONDENTS OUT OF CONTEXT THAT PETITIONER WAS ABLE TO
TREAT THESE AS "JUDICIAL ADMISSIONS" SUFFICIENT TO ESTABLISH A PRIMA FACIE
AND THEREAFTER A CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE OF THE SWISS
FUNDS.
(1) Under Section 27, Rule 130 of the Rules of Court, the General and Supplemental Agreements, as
well as the other written and testimonial statements submitted in relation thereto, are expressly barred
from being admissible in evidence against private respondents.
(2) Had petitioner bothered to weigh the alleged admissions together with the other statements on
record, there would be a demonstrable showing that no such "judicial admissions" were made by private
respondents.
(D)
SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS TO
ESTABLISH A PRIMA FACIE CASE FOR FORFEITURE, AND PRIVATE RESPONDENTS HAVE
NOT MADE ANY JUDICIAL ADMISSION THAT WOULD HAVE FREED IT FROM ITS BURDEN
OF PROOF, THE SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE OF DISCRETION IN
DENYING THE MOTION FOR SUMMARY JUDGMENT. CERTIORARI, THEREFORE, DOES
NOT LIE, ESPECIALLY AS THIS COURT IS NOT A TRIER OF FACTS. 18
For her part, Mrs. Araneta, in her comment to the petition, claims that obviously petitioner is unable to comply
with a very plain requirement of respondent Sandiganbayan. The instant petition is allegedly an attempt to
elevate to this Court matters, issues and incidents which should be properly threshed out at the Sandiganbayan.
To respondent Mrs. Araneta, all other matters, save that pertaining to the authentication of the translated Swiss
Court decisions, are irrelevant and impertinent as far as this Court is concerned. Respondent Mrs. Araneta
manifests that she is as eager as respondent Sandiganbayan or any interested person to have the Swiss Court
decisions officially translated in our known language. She says the authenticated official English version of the
Swiss Court decisions should be presented. This should stop all speculations on what indeed is contained
therein. Thus, respondent Mrs. Araneta prays that the petition be denied for lack of merit and for raising matters
which, in elaborated fashion, are impertinent and improper before this Court.
PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI
But before this Court discusses the more relevant issues, the question regarding the propriety of petitioner
Republic's action for certiorari under Rule 65 19 of the 1997 Rules of Civil Procedure assailing the
Sandiganbayan Resolution dated January 21, 2002 should be threshed out.
At the outset, we would like to stress that we are treating this case as an exception to the general rule governing
petitions for certiorari. Normally, decisions of the Sandiganbayan are brought before this Court under Rule 45,
not Rule 65.20 But where the case is undeniably ingrained with immense public interest, public policy and deep
historical repercussions, certiorari is allowed notwithstanding the existence and availability of the remedy of
appeal.21
One of the foremost concerns of the Aquino Government in February 1986 was the recovery of the unexplained
or ill-gotten wealth reputedly amassed by former President and Mrs. Ferdinand E. Marcos, their relatives,
friends and business associates. Thus, the very first Executive Order (EO) issued by then President Corazon
Aquino upon her assumption to office after the ouster of the Marcoses was EO No. 1, issued on February 28,
1986. It created the Presidential Commission on Good Government (PCGG) and charged it with the task of
assisting the President in the "recovery of all ill-gotten wealth accumulated by former President Ferdinand E.
Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or
abroad, including the takeover or sequestration of all business enterprises and entities owned or controlled by
them during his administration, directly or through nominees, by taking undue advantage of their public office
and/or using their powers, authority, influence, connections or relationship." The urgency of this undertaking
was tersely described by this Court in Republic vs. Lobregat22:
surely x x x an enterprise "of great pith and moment"; it was attended by "great expectations"; it was
initiated not only out of considerations of simple justice but also out of sheer necessity - the national
coffers were empty, or nearly so.
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside
technicalities and formalities that merely serve to delay or impede judicious resolution. This Court
prefers to have such cases resolved on the merits at the Sandiganbayan. But substantial justice to the
Filipino people and to all parties concerned, not mere legalisms or perfection of form, should now be
relentlessly and firmly pursued. Almost two decades have passed since the government initiated its
search for and reversion of such ill-gotten wealth. The definitive resolution of such cases on the merits is
thus long overdue. If there is proof of illegal acquisition, accumulation, misappropriation, fraud or illicit
conduct, let it be brought out now. Let the ownership of these funds and other assets be finally
determined and resolved with dispatch, free from all the delaying technicalities and annoying procedural
sidetracks.23
We thus take cognizance of this case and settle with finality all the issues therein.
ISSUES BEFORE THIS COURT
The crucial issues which this Court must resolve are: (1) whether or not respondents raised any genuine issue of
fact which would either justify or negate summary judgment; and (2) whether or not petitioner Republic was
able to prove its case for forfeiture in accordance with Sections 2 and 3 of RA 1379.
(1) THE PROPRIETY OF SUMMARY JUDGMENT
We hold that respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on motion
of petitioner Republic, summary judgment should take place as a matter of right.
In the early case of Auman vs. Estenzo24, summary judgment was described as a judgment which a court may
render before trial but after both parties have pleaded. It is ordered by the court upon application by one party,
supported by affidavits, depositions or other documents, with notice upon the adverse party who may in turn file
an opposition supported also by affidavits, depositions or other documents. This is after the court summarily
hears both parties with their respective proofs and finds that there is no genuine issue between them. Summary
judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Procedure:
SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim,
or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has
been served, move with supporting affidavits, depositions or admissions for a summary judgment in his
favor upon all or any part thereof.25
Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action. 26 The
theory of summary judgment is that, although an answer may on its face appear to tender issues requiring trial,
if it is demonstrated by affidavits, depositions or admissions that those issues are not genuine but sham or
fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for petitioner
Republic.
The Solicitor General made a very thorough presentation of its case for forfeiture:
xxx
4. Respondent Ferdinand E. Marcos (now deceased and represented by his Estate/Heirs) was a public
officer for several decades continuously and without interruption as Congressman, Senator, Senate
President and President of the Republic of the Philippines from December 31, 1965 up to his ouster by
direct action of the people of EDSA on February 22-25, 1986.
5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady who ruled with FM
during the 14-year martial law regime, occupied the position of Minister of Human Settlements from
June 1976 up to the peaceful revolution in February 22-25, 1986. She likewise served once as a member
of the Interim Batasang Pambansa during the early years of martial law from 1978 to 1984 and as Metro
Manila Governor in concurrent capacity as Minister of Human Settlements. x x x
xxx xxx xxx
11. At the outset, however, it must be pointed out that based on the Official Report of the Minister of
Budget, the total salaries of former President Marcos as President form 1966 to 1976 was P60,000 a year
and from 1977 to 1985, P100,000 a year; while that of the former First Lady, Imelda R. Marcos, as
Minister of Human Settlements from June 1976 to February 22-25, 1986 was P75,000 a year xxx.
ANALYSIS OF RESPONDENTS LEGITIMATE INCOME
xxx
12. Based on available documents, the ITRs of the Marcoses for the years 1965-1975 were filed under
Tax Identification No. 1365-055-1. For the years 1976 until 1984, the returns were filed under Tax
Identification No. M 6221-J 1117-A-9.
13. The data contained in the ITRs and Balance Sheet filed by the "Marcoses are summarized and
attached to the reports in the following schedules:
Schedule A:
Schedule of Income (Annex "T" hereof);
Schedule B:
Schedule of Income Tax Paid (Annex "T-1" hereof);

Schedule C:
Schedule of Net Disposable Income (Annex "T-2" hereof);
Schedule D:
Schedule of Networth Analysis (Annex "T-3" hereof).
14. As summarized in Schedule A (Annex "T" hereof), the Marcoses reported P16,408,442.00 or
US$2,414,484.91 in total income over a period of 20 years from 1965 to 1984. The sources of income
are as follows:
Official - P 2,627,581.00 - 16.01%

Salaries
Legal - 11,109,836.00 - 67.71%
Practice
Farm Income - 149,700.00 - .91%
Others - 2,521,325.00 - 15.37%
Total P16,408,442.00 - 100.00%
15. FM's official salary pertains to his compensation as Senate President in 1965 in the amount of
P15,935.00 and P1,420,000.00 as President of the Philippines during the period 1966 until 1984. On the
other hand, Imelda reported salaries and allowances only for the years 1979 to 1984 in the amount of
P1,191,646.00. The records indicate that the reported income came from her salary from the Ministry of
Human Settlements and allowances from Food Terminal, Inc., National Home Mortgage Finance
Corporation, National Food Authority Council, Light Rail Transit Authority and Home Development
Mutual Fund.
16. Of the P11,109,836.00 in reported income from legal practice, the amount of P10,649,836.00 or 96%
represents "receivables from prior years" during the period 1967 up to 1984.
17. In the guise of reporting income using the cash method under Section 38 of the National Internal
Revenue Code, FM made it appear that he had an extremely profitable legal practice before he became a
President (FM being barred by law from practicing his law profession during his entire presidency) and
that, incredibly, he was still receiving payments almost 20 years after. The only problem is that in his
Balance Sheet attached to his 1965 ITR immediately preceeding his ascendancy to the presidency he did
not show any Receivables from client at all, much less the P10,65-M that he decided to later recognize
as income. There are no documents showing any withholding tax certificates. Likewise, there is nothing
on record that will show any known Marcos client as he has no known law office. As previously stated,
his networth was a mere P120,000.00 in December, 1965. The joint income tax returns of FM and
Imelda cannot, therefore, conceal the skeletons of their kleptocracy.
18. FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to 1976 which he
referred to in his return as "Miscellaneous Items" and "Various Corporations." There is no indication of
any payor of the dividends or earnings.
19. Spouses Ferdinand and Imelda did not declare any income from any deposits and placements which
are subject to a 5% withholding tax. The Bureau of Internal Revenue attested that after a diligent search
of pertinent records on file with the Records Division, they did not find any records involving the tax
transactions of spouses Ferdinand and Imelda in Revenue Region No. 1, Baguio City, Revenue Region
No.4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No. 8, Tacloban, Leyte. Likewise,
the Office of the Revenue Collector of Batac. Further, BIR attested that no records were found on any
filing of capital gains tax return involving spouses FM and Imelda covering the years 1960 to 1965.
20. In Schedule B, the taxable reported income over the twenty-year period was P14,463,595.00 which
represents 88% of the gross income. The Marcoses paid income taxes totaling P8,233,296.00 or
US$1,220,667.59. The business expenses in the amount of P861,748.00 represent expenses incurred for
subscription, postage, stationeries and contributions while the other deductions in the amount of
P567,097.00 represents interest charges, medicare fees, taxes and licenses. The total deductions in the
amount of P1,994,845.00 represents 12% of the total gross income.
21. In Schedule C, the net cumulative disposable income amounts to P6,756,301.00 or US$980,709.77.
This is the amount that represents that portion of the Marcoses income that is free for consumption,
savings and investments. The amount is arrived at by adding back to the net income after tax the
personal and additional exemptions for the years 1965-1984, as well as the tax-exempt salary of the
President for the years 1966 until 1972.
22. Finally, the networth analysis in Schedule D, represents the total accumulated networth of spouses,
Ferdinand and Imelda. Respondent's Balance Sheet attached to their 1965 ITR, covering the year
immediately preceding their ascendancy to the presidency, indicates an ending networth of P120,000.00
which FM declared as Library and Miscellaneous assets. In computing for the networth, the income
approach was utilized. Under this approach, the beginning capital is increased or decreased, as the case
may be, depending upon the income earned or loss incurred. Computations establish the total networth
of spouses Ferdinand and Imelda, for the years 1965 until 1984 in the total amount of US$957,487.75,
assuming the income from legal practice is real and valid x x x.
G. THE SECRET MARCOS DEPOSITS IN SWISS BANKS
23. The following presentation very clearly and overwhelmingly show in detail how both respondents
clandestinely stashed away the country's wealth to Switzerland and hid the same under layers upon
layers of foundations and other corporate entities to prevent its detection. Through their
dummies/nominees, fronts or agents who formed those foundations or corporate entities, they opened
and maintained numerous bank accounts. But due to the difficulty if not the impossibility of detecting
and documenting all those secret accounts as well as the enormity of the deposits therein hidden, the
following presentation is confined to five identified accounts groups, with balances amounting to about
$356-M with a reservation for the filing of a supplemental or separate forfeiture complaint should the
need arise.
H. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS
24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo Bertheau, legal counsel of
Schweizeresche Kreditanstalt or SKA, also known as Swiss Credit Bank, for him to establish the AZIO
Foundation. On the same date, Marcos executed a power of attorney in favor of Roberto S. Benedicto
empowering him to transact business in behalf of the said foundation. Pursuant to the said Marcos
mandate, AZIO Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler and Ernst Scheller,
also of SKA Legal Service, and Dr. Helmuth Merling from Schaan were designated as members of the
Board of Trustees of the said foundation. Ferdinand Marcos was named first beneficiary and the Marcos
Foundation, Inc. was second beneficiary. On November 12, 1971, FM again issued another written order
naming Austrahil PTY Ltd. In Sydney, Australia, as the foundation's first and sole beneficiary. This was
recorded on December 14, 1971.
25. In an undated instrument, Marcos changed the first and sole beneficiary to CHARIS
FOUNDATION. This change was recorded on December 4, 1972.
26. On August 29, 1978, the AZIO FOUNDATION was renamed to VERSO FOUNDATION. The
Board of Trustees remained the same. On March 11, 1981, Marcos issued a written directive to
liquidated VERSO FOUNDATION and to transfer all its assets to account of FIDES TRUST
COMPANY at Bank Hofman in Zurich under the account "Reference OSER." The Board of Trustees
decided to dissolve the foundation on June 25, 1981.
27. In an apparent maneuver to bury further the secret deposits beneath the thick layers of corporate
entities, FM effected the establishment of VIBUR FOUNDATION on May 13, 1981 in Vaduz. Atty. Ivo
Beck and Limag Management, a wholly-owned subsidiary of Fides Trust, were designated as members
of the Board of Trustees. The account was officially opened with SKA on September 10, 1981. The
beneficial owner was not made known to the bank since Fides Trust Company acted as fiduciary.
However, comparison of the listing of the securities in the safe deposit register of the VERSO
FOUNDATION as of February 27, 1981 with that of VIBUR FOUNDATION as of December 31, 1981
readily reveals that exactly the same securities were listed.
28. Under the foregoing circumstances, it is certain that the VIBUR FOUNDATION is the beneficial
successor of VERSO FOUNDATION.
29. On March 18, 1986, the Marcos-designated Board of Trustees decided to liquidate VIBUR
FOUNDATION. A notice of such liquidation was sent to the Office of the Public Register on March 21,
1986. However, the bank accounts and respective balances of the said VIBUR FOUNDATION
remained with SKA. Apparently, the liquidation was an attempt by the Marcoses to transfer the
foundation's funds to another account or bank but this was prevented by the timely freeze order issued
by the Swiss authorities. One of the latest documents obtained by the PCGG from the Swiss authorities
is a declaration signed by Dr. Ivo Beck (the trustee) stating that the beneficial owner of VIBUR
FOUNDATION is Ferdinand E. Marcos. Another document signed by G. Raber of SKA shows that
VIBUR FOUNDATION is owned by the "Marcos Familie"
30. As of December 31, 1989, the balance of the bank accounts of VIBUR FOUNDATION with SKA,
Zurich, under the General Account No. 469857 totaled $3,597,544.00
I. XANDY-WINTROP: CHARIS-SCOLARI-
VALAMO-SPINUS-AVERTINA FOUNDATION ACCOUNTS
31. This is the most intricate and complicated account group. As the Flow Chart hereof shows, two (2)
groups under the foundation organized by Marcos dummies/nominees for FM's benefit, eventually
joined together and became one (1) account group under the AVERTINA FOUNDATION for the
benefit of both FM and Imelda. This is the biggest group from where the $50-M investment fund of the
Marcoses was drawn when they bought the Central Bank's dollar-denominated treasury notes with high-
yielding interests.
32. On March 20, 1968, after his second year in the presidency, Marcos opened bank accounts with
SKA using an alias or pseudonym WILLIAM SAUNDERS, apparently to hide his true identity. The
next day, March 21, 1968, his First Lady, Mrs. Imelda Marcos also opened her own bank accounts with
the same bank using an American-sounding alias, JANE RYAN. Found among the voluminous
documents in Malacañang shortly after they fled to Hawaii in haste that fateful night of February 25,
1986, were accomplished forms for "Declaration/Specimen Signatures" submitted by the Marcos couple.
Under the caption "signature(s)" Ferdinand and Imelda signed their real names as well as their respective
aliases underneath. These accounts were actively operated and maintained by the Marcoses for about
two (2) years until their closure sometime in February, 1970 and the balances transferred to XANDY
FOUNDATION.
33. The XANDY FOUNDATION was established on March 3, 1970 in Vaduz. C.W. Fessler, C.
Souviron and E. Scheller were named as members of the Board of Trustees.
34. FM and Imelda issued the written mandate to establish the foundation to Markus Geel of SKA on
March 3, 1970. In the handwritten Regulations signed by the Marcos couple as well as in the type-
written Regulations signed by Markus Geel both dated February 13, 1970, the Marcos spouses were
named the first beneficiaries, the surviving spouse as the second beneficiary and the Marcos children –
Imee, Ferdinand, Jr. (Bongbong) and Irene – as equal third beneficiaries.
35. The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August 29, 1978. The
Board of Trustees remained the same at the outset. However, on March 27, 1980, Souviron was replaced
by Dr. Peter Ritter. On March 10. 1981, Ferdinand and Imelda Marcos issued a written order to the
Board of Wintrop to liquidate the foundation and transfer all its assets to Bank Hofmann in Zurich in
favor of FIDES TRUST COMPANY. Later, WINTROP FOUNDATION was dissolved.
36. The AVERTINA FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck
and Limag Management, a wholly-owned subsidiary of FIDES TRUST CO., as members of the Board
of Trustees. Two (2) account categories, namely: CAR and NES, were opened on September 10, 1981.
The beneficial owner of AVERTINA was not made known to the bank since the FIDES TRUST CO.
acted as fiduciary. However, the securities listed in the safe deposit register of WINTROP
FOUNDATION Category R as of December 31, 1980 were the same as those listed in the register of
AVERTINA FOUNDATION Category CAR as of December 31, 1981. Likewise, the securities listed in
the safe deposit register of WINTROP FOUNDATION Category S as of December 31, 1980 were the
same as those listed in the register of Avertina Category NES as of December 31, 1981.Under the
circumstances, it is certain that the beneficial successor of WINTROP FOUNDATION is AVERTINA
FOUNDATION. The balance of Category CAR as of December 31, 1989 amounted to
US$231,366,894.00 while that of Category NES as of 12-31-83 was US$8,647,190.00. Latest
documents received from Swiss authorities included a declaration signed by IVO Beck stating that the
beneficial owners of AVERTINA FOUNDATION are FM and Imelda. Another document signed by G.
Raber of SKA indicates that Avertina Foundation is owned by the "Marcos Families."
37. The other groups of foundations that eventually joined AVERTINA were also established by FM
through his dummies, which started with the CHARIS FOUNDATION.
38. The CHARIS FOUNDATION was established in VADUZ on December 27, 1971. Walter Fessler
and Ernst Scheller of SKA and Dr. Peter Ritter were named as directors. Dr. Theo Bertheau, SKA legal
counsel, acted as founding director in behalf of FM by virtue of the mandate and agreement dated
November 12, 1971. FM himself was named the first beneficiary and Xandy Foundation as second
beneficiary in accordance with the handwritten instructions of FM on November 12, 1971 and the
Regulations. FM gave a power of attorney to Roberto S. Benedicto on February 15, 1972 to act in his
behalf with regard to Charis Foundation.
39. On December 13, 1974, Charis Foundation was renamed Scolari Foundation but the directors
remained the same. On March 11, 1981 FM ordered in writing that the Valamo Foundation be liquidated
and all its assets be transferred to Bank Hofmann, AG in favor of Fides Trust Company under the
account "Reference OMAL". The Board of Directors decided on the immediate dissolution of Valamo
Foundation on June 25, 1981.
40 The SPINUS FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and
Limag Management, a wholly-owned subsidiary of Fides Trust Co., as members of the Foundation's
Board of Directors. The account was officially opened with SKA on September 10, 1981. The beneficial
owner of the foundation was not made known to the bank since Fides Trust Co. acted as fiduciary.
However, the list of securities in the safe deposit register of Valamo Foundation as of December 31,
1980 are practically the same with those listed in the safe deposit register of Spinus Foundation as of
December 31, 1981. Under the circumstances, it is certain that the Spinus Foundation is the beneficial
successor of the Valamo Foundation.
41. On September 6, 1982, there was a written instruction from Spinus Foundation to SKA to close its
Swiss Franc account and transfer the balance to Avertina Foundation. In July/August, 1982, several
transfers from the foundation's German marks and US dollar accounts were made to Avertina Category
CAR totaling DM 29.5-M and $58-M, respectively. Moreover, a comparison of the list of securities of
the Spinus Foundation as of February 3, 1982 with the safe deposit slips of the Avertina Foundation
Category CAR as of August 19, 1982 shows that all the securities of Spinus were transferred to
Avertina.
J. TRINIDAD-RAYBY-PALMY FOUNDATION ACCOUNTS
42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W. Fessler and E.
Scheller of SKA and Dr. Otto Tondury as the foundation's directors. Imelda issued a written mandate to
establish the foundation to Markus Geel on August 26, 1970. The regulations as well as the agreement,
both dated August 28, 1970 were likewise signed by Imelda. Imelda was named the first beneficiary and
her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene were named as equal second
beneficiaries.
43. Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler, Scheller and Ritter as
members of the board of directors. Imelda issued a written mandate to Dr. Theo Bertheau to establish
the foundation with a note that the foundation's capitalization as well as the cost of establishing it be
debited against the account of Trinidad Foundation. Imelda was named the first and only beneficiary of
Rayby foundation. According to written information from SKA dated November 28, 1988, Imelda
apparently had the intention in 1973 to transfer part of the assets of Trinidad Foundation to another
foundation, thus the establishment of Rayby Foundation. However, transfer of assets never took place.
On March 10, 1981, Imelda issued a written order to transfer all the assets of Rayby Foundation to
Trinidad Foundation and to subsequently liquidate Rayby. On the same date, she issued a written order
to the board of Trinidad to dissolve the foundation and transfer all its assets to Bank Hofmann in favor
of Fides Trust Co. Under the account "Reference Dido," Rayby was dissolved on April 6, 1981 and
Trinidad was liquidated on August 3, 1981.
44. The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr. Ivo Beck and
Limag Management, a wholly-owned subsidiary of Fides Trust Co, as members of the Foundation's
Board of Directors. The account was officially opened with the SKA on September 10, 1981. The
beneficial owner was not made known to the bank since Fides Trust Co. acted as fiduciary. However,
when one compares the listing of securities in the safe deposit register of Trinidad Foundation as of
December 31,1980 with that of the Palmy Foundation as of December 31, 1980, one can clearly see that
practically the same securities were listed. Under the circumstances, it is certain that the Palmy
Foundation is the beneficial successor of the Trinidad Foundation.
45. As of December 31, 1989, the ending balance of the bank accounts of Palmy Foundation under
General Account No. 391528 is $17,214,432.00.
46. Latest documents received from Swiss Authorities included a declaration signed by Dr. Ivo Beck
stating that the beneficial owner of Palmy Foundation is Imelda. Another document signed by Raber
shows that the said Palmy Foundation is owned by "Marcos Familie".
K. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS
47. Rosalys Foundation was established in 1971 with FM as the beneficiary. Its Articles of Incorporation
was executed on September 24, 1971 and its By-Laws on October 3, 1971. This foundation maintained
several accounts with Swiss Bank Corporation (SBC) under the general account 51960 where most of
the bribe monies from Japanese suppliers were hidden.
48. On December 19, 1985, Rosalys Foundation was liquidated and all its assets were transferred to
Aguamina Corporation's (Panama) Account No. 53300 with SBC. The ownership by Aguamina
Corporation of Account No. 53300 is evidenced by an opening account documents from the bank. J.
Christinaz and R.L. Rossier, First Vice-President and Senior Vice President, respectively, of SBC,
Geneva issued a declaration dated September 3, 1991 stating that the by-laws dated October 3, 1971
governing Rosalys Foundation was the same by-law applied to Aguamina Corporation Account No.
53300. They further confirmed that no change of beneficial owner was involved while transferring the
assets of Rosalys to Aguamina. Hence, FM remains the beneficiary of Aguamina Corporation Account
No. 53300.
As of August 30, 1991, the ending balance of Account No. 53300 amounted to $80,566,483.00.
L. MALER FOUNDATION ACCOUNTS
49. Maler was first created as an establishment. A statement of its rules and regulations was found
among Malacañang documents. It stated, among others, that 50% of the Company's assets will be for
sole and full right disposal of FM and Imelda during their lifetime, which the remaining 50% will be
divided in equal parts among their children. Another Malacañang document dated October 19,1968 and
signed by Ferdinand and Imelda pertains to the appointment of Dr. Andre Barbey and Jean Louis Sunier
as attorneys of the company and as administrator and manager of all assets held by the company. The
Marcos couple, also mentioned in the said document that they bought the Maler Establishment from
SBC, Geneva. On the same date, FM and Imelda issued a letter addressed to Maler Establishment,
stating that all instructions to be transmitted with regard to Maler will be signed with the word "JOHN
LEWIS". This word will have the same value as the couple's own personal signature. The letter was
signed by FM and Imelda in their signatures and as John Lewis.
50. Maler Establishment opened and maintained bank accounts with SBC, Geneva. The opening bank
documents were signed by Dr. Barbey and Mr. Sunnier as authorized signatories.
51. On November 17, 1981, it became necessary to transform Maler Establishment into a foundation.
Likewise, the attorneys were changed to Michael Amaudruz, et. al. However, administration of the
assets was left to SBC. The articles of incorporation of Maler Foundation registered on November 17,
1981 appear to be the same articles applied to Maler Establishment. On February 28, 1984, Maler
Foundation cancelled the power of attorney for the management of its assets in favor of SBC and
transferred such power to Sustrust Investment Co., S.A.
52. As of June 6, 1991, the ending balance of Maler Foundation's Account Nos. 254,508 BT and 98,929
NY amount SF 9,083,567 and SG 16,195,258, respectively, for a total of SF 25,278,825.00. GM only
until December 31, 1980. This account was opened by Maler when it was still an establishment which
was subsequently transformed into a foundation.
53. All the five (5) group accounts in the over-all flow chart have a total balance of about Three
Hundred Fifty Six Million Dollars ($356,000,000.00) as shown by Annex "R-5" hereto attached as
integral part hereof.
x x x x x x.27
Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and Ferdinand Marcos, Jr., in
their answer, stated the following:
xxx xxx xxx
4. Respondents ADMIT paragraphs 3 and 4 of the Petition.
5. Respondents specifically deny paragraph 5 of the Petition in so far as it states that summons and other
court processes may be served on Respondent Imelda R. Marcos at the stated address the truth of the
matter being that Respondent Imelda R. Marcos may be served with summons and other processes at
No. 10-B Bel Air Condominium 5022 P. Burgos Street, Makati, Metro Manila, and ADMIT the rest.
xxx xxx xxx
10. Respondents ADMIT paragraph 11 of the Petition.
11. Respondents specifically DENY paragraph 12 of the Petition for lack of knowledge sufficient to
form a belief as to the truth of the allegation since Respondents were not privy to the transactions and
that they cannot remember exactly the truth as to the matters alleged.
12. Respondents specifically DENY paragraph 13 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs and Balance Sheet.
exactitude the contents of the alleged ITRs.
16. Respondents specifically DENY paragraph 17 of the Petition insofar as it attributes willful duplicity
on the part of the late President Marcos, for being false, the same being pure conclusions based on pure
assumption and not allegations of fact; and specifically DENY the rest for lack of knowledge or
information sufficient to form a belief as to the truth of the allegation since Respondents cannot
remember with exactitude the contents of the alleged ITRs or the attachments thereto.
exactitude the contents of the alleged ITRs and that they are not privy to the activities of the BIR.
22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely
stashed the country's wealth in Switzerland and hid the same under layers and layers of foundation and
corporate entities for being false, the truth being that Respondents aforesaid properties were lawfully
acquired.
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents
were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation accounts, except
that as to Respondent Imelda R. Marcos she specifically remembers that the funds involved were
lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36,37, 38, 39, 40, and 41 of the
Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegations
since Respondents are not privy to the transactions and as to such transaction they were privy to they
cannot remember with exactitude the same having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully
acquired.
25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since Respondents
were not privy to the transactions and as to such transaction they were privy to they cannot remember
with exactitude the same having occurred a long time ago, except that as to Respondent Imelda R.
Marcos she specifically remembers that the funds involved were lawfully acquired.
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegations since Respondents were not
privy to the transactions and as to such transaction they were privy to they cannot remember with
exactitude the same having occurred a long time ago, except that as to Respondent Imelda R. Marcos
she specifically remembers that the funds involved were lawfully acquired.
Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos and the Marcos children
indubitably failed to tender genuine issues in their answer to the petition for forfeiture. A genuine issue is an
issue of fact which calls for the presentation of evidence as distinguished from an issue which is fictitious and
contrived, set up in bad faith or patently lacking in substance so as not to constitute a genuine issue for trial.
Respondents' defenses of "lack of knowledge for lack of privity" or "(inability to) recall because it happened a
long time ago" or, on the part of Mrs. Marcos, that "the funds were lawfully acquired" are fully insufficient to
tender genuine issues. Respondent Marcoses' defenses were a sham and evidently calibrated to compound and
confuse the issues.
The following pleadings filed by respondent Marcoses are replete with indications of a spurious defense:
(a) Respondents' Answer dated October 18, 1993;
(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial Brief dated October 19,
1999 of Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting the pre-trial brief of Mrs. Marcos, and
Manifestation dated October 19, 1999 of Irene Marcos-Araneta adopting the pre-trial briefs of her co-
respondents;
(c) Opposition to Motion for Summary Judgment dated March 21, 2000, filed by Mrs. Marcos which the
other respondents (Marcos children) adopted;
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by the Marcos children;
(e) Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos; Motion for
Reconsideration dated October 5, 2000 jointly filed by Mrs. Manotoc and Ferdinand, Jr., and
Supplemental Motion for Reconsideration dated October 9, 2000 likewise jointly filed by Mrs. Manotoc
and Ferdinand, Jr.;
(f) Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum dated December 17,
2000 of the Marcos children;
(g) Manifestation dated May 26, 1998; and
(h) General/Supplemental Agreement dated December 23, 1993.
An examination of the foregoing pleadings is in order.
• Respondents' Answer dated October 18, 1993.
In their answer, respondents failed to specifically deny each and every allegation contained in the petition for
forfeiture in the manner required by the rules. All they gave were stock answers like "they have no sufficient
knowledge" or "they could not recall because it happened a long time ago," and, as to Mrs. Marcos, "the funds
were lawfully acquired," without stating the basis of such assertions.
Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:
A defendant must specify each material allegation of fact the truth of which he does not admit and,
whenever practicable, shall set forth the substance of the matters upon which he relies to support his
denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as is
true and material and shall deny the remainder. Where a defendant is without knowledge or information
sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state,
and this shall have the effect of a denial.28
The purpose of requiring respondents to make a specific denial is to make them disclose facts which will
disprove the allegations of petitioner at the trial, together with the matters they rely upon in support of such
denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary expenses and waste of time by
compelling both parties to lay their cards on the table, thus reducing the controversy to its true terms. As
explained in Alonso vs. Villamor,29
A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle
art of movement and position, entraps and destroys the other. It is rather a contest in which each
contending party fully and fairly lays before the court the facts in issue and then, brushing aside as
wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice
be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust.
On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired. However, she failed to
particularly state the ultimate facts surrounding the lawful manner or mode of acquisition of the subject funds.
Simply put, she merely stated in her answer with the other respondents that the funds were "lawfully acquired"
without detailing how exactly these funds were supposedly acquired legally by them. Even in this case before
us, her assertion that the funds were lawfully acquired remains bare and unaccompanied by any factual support
which can prove, by the presentation of evidence at a hearing, that indeed the funds were acquired legitimately
by the Marcos family.
Respondents' denials in their answer at the Sandiganbayan were based on their alleged lack of knowledge or
information sufficient to form a belief as to the truth of the allegations of the petition.
It is true that one of the modes of specific denial under the rules is a denial through a statement that the
defendant is without knowledge or information sufficient to form a belief as to the truth of the material
averment in the complaint. The question, however, is whether the kind of denial in respondents' answer
qualifies as the specific denial called for by the rules. We do not think so. In Morales vs. Court of
Appeals,30 this Court ruled that if an allegation directly and specifically charges a party with having done,
performed or committed a particular act which the latter did not in fact do, perform or commit, a categorical and
express denial must be made.
Here, despite the serious and specific allegations against them, the Marcoses responded by simply saying that
they had no knowledge or information sufficient to form a belief as to the truth of such allegations. Such a
general, self-serving claim of ignorance of the facts alleged in the petition for forfeiture was insufficient to raise
an issue. Respondent Marcoses should have positively stated how it was that they were supposedly ignorant of
the facts alleged.31
To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for forfeiture stated:
23. The following presentation very clearly and overwhelmingly show in detail how both respondents
clandestinely stashed away the country's wealth to Switzerland and hid the same under layers upon
layers of foundations and other corporate entities to prevent its detection. Through their
dummies/nominees, fronts or agents who formed those foundations or corporate entities, they opened
and maintained numerous bank accounts. But due to the difficulty if not the impossibility of detecting
and documenting all those secret accounts as well as the enormity of the deposits therein hidden, the
following presentation is confined to five identified accounts groups, with balances amounting to about
$356-M with a reservation for the filing of a supplemental or separate forfeiture complaint should the
need arise.32
Respondents' lame denial of the aforesaid allegation was:
22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely
stashed the country's wealth in Switzerland and hid the same under layers and layers of foundations and
corporate entities for being false, the truth being that Respondents' aforesaid properties were lawfully
acquired.33
Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative
pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to
which are not squarely denied. It was in effect an admission of the averments it was directed at. 34 Stated
otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least an
implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the
substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the
words of the allegation as so qualified or modified are literally denied, has been held that the qualifying
circumstances alone are denied while the fact itself is admitted.35
In the instant case, the material allegations in paragraph 23 of the said petition were not specifically denied by
respondents in paragraph 22 of their answer. The denial contained in paragraph 22 of the answer was focused
on the averment in paragraph 23 of the petition for forfeiture that "Respondents clandestinely stashed the
country's wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities."
Paragraph 22 of the respondents' answer was thus a denial pregnant with admissions of the following substantial
facts:
(1) the Swiss bank deposits existed and
(2) that the estimated sum thereof was US$356 million as of December, 1990.
Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the sum of
about US$356 million, not having been specifically denied by respondents in their answer, were deemed
admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure:
Material averment in the complaint, xxx shall be deemed admitted when not specifically denied. xxx.36
By the same token, the following unsupported denials of respondents in their answer were pregnant with
admissions of the substantial facts alleged in the Republic's petition for forfeiture:
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegation since respondents
were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation accounts, except
that, as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were
lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 of the Petition
for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since
respondents were not privy to the transactions and as to such transactions they were privy to, they cannot
remember with exactitude the same having occurred a long time ago, except as to respondent Imelda R.
Marcos, she specifically remembers that the funds involved were lawfully acquired.
25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for lack of knowledge
or information sufficient to from a belief as to the truth of the allegations since respondents were not
privy to the transactions and as to such transaction they were privy to, they cannot remember with
exactitude, the same having occurred a long time ago, except that as to respondent Imelda R. Marcos,
she specifically remembers that the funds involved were lawfully acquired.
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for lack of knowledge
and information sufficient to form a belief as to the truth of the allegations since respondents were not
privy to the transactions and as to such transaction they were privy to they cannot remember with
exactitude the same having occurred a long time ago, except that as to respondent Imelda R. Marcos, she
specifically remembers that the funds involved were lawfully acquired.
The matters referred to in paragraphs 23 to 26 of the respondents' answer pertained to the creation of five
groups of accounts as well as their respective ending balances and attached documents alleged in paragraphs 24
to 52 of the Republic's petition for forfeiture. Respondent Imelda R. Marcos never specifically denied the
existence of the Swiss funds. Her claim that "the funds involved were lawfully acquired" was an
acknowledgment on her part of the existence of said deposits. This only reinforced her earlier admission of the
allegation in paragraph 23 of the petition for forfeiture regarding the existence of the US$356 million Swiss
bank deposits.
The allegations in paragraphs 4737 and 4838 of the petition for forfeiture referring to the creation and amount of
the deposits of the Rosalys-Aguamina Foundation as well as the averment in paragraph 52-a 39 of the said
petition with respect to the sum of the Swiss bank deposits estimated to be US$356 million were again not
specifically denied by respondents in their answer. The respondents did not at all respond to the issues raised in
these paragraphs and the existence, nature and amount of the Swiss funds were therefore deemed admitted by
them. As held in Galofa vs. Nee Bon Sing,40 if a defendant's denial is a negative pregnant, it is equivalent to an
admission.
Moreover, respondents' denial of the allegations in the petition for forfeiture "for lack of knowledge or
information sufficient to form a belief as to the truth of the allegations since respondents were not privy to the
transactions" was just a pretense. Mrs. Marcos' privity to the transactions was in fact evident from her signatures
on some of the vital documents41 attached to the petition for forfeiture which Mrs. Marcos failed to specifically
deny as required by the rules.42
It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed
personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said
documents were within their knowledge. As correctly pointed out by Sandiganbayan Justice Francisco Villaruz,
Jr. in his dissenting opinion:
The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving regulations of
the Foundations for the distribution of capital and income of the Foundations to the First and Second
beneficiary (who are no other than FM and his family), 4) opening of bank accounts for the Foundations,
5) changing the names of the Foundations, 6) transferring funds and assets of the Foundations to other
Foundations or Fides Trust, 7) liquidation of the Foundations as substantiated by the Annexes U to U-
168, Petition [for forfeiture] strongly indicate that FM and/or Imelda were the real owners of the assets
deposited in the Swiss banks, using the Foundations as dummies.43
How could respondents therefore claim lack of sufficient knowledge or information regarding the existence of
the Swiss bank deposits and the creation of five groups of accounts when Mrs. Marcos and her late husband
personally masterminded and participated in the formation and control of said foundations? This is a fact
respondent Marcoses were never able to explain.
Not only that. Respondents' answer also technically admitted the genuineness and due execution of the Income
Tax Returns (ITRs) and the balance sheets of the late Ferdinand E. Marcos and Imelda R. Marcos attached to
the petition for forfeiture, as well as the veracity of the contents thereof.
The answer again premised its denials of said ITRs and balance sheets on the ground of lack of knowledge or
information sufficient to form a belief as to the truth of the contents thereof. Petitioner correctly points out that
respondents' denial was not really grounded on lack of knowledge or information sufficient to form a belief but
was based on lack of recollection. By reviewing their own records, respondent Marcoses could have easily
determined the genuineness and due execution of the ITRs and the balance sheets. They also had the means and
opportunity of verifying the same from the records of the BIR and the Office of the President. They did not.
When matters regarding which respondents claim to have no knowledge or information sufficient to form a
belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of information will not
be considered a specific denial.44 An unexplained denial of information within the control of the pleader, or is
readily accessible to him, is evasive and is insufficient to constitute an effective denial.45
The form of denial adopted by respondents must be availed of with sincerity and in good faith, and certainly
not for the purpose of confusing the adverse party as to what allegations of the petition are really being
challenged; nor should it be made for the purpose of delay.46 In the instant case, the Marcoses did not only
present unsubstantiated assertions but in truth attempted to mislead and deceive this Court by presenting an
obviously contrived defense.
Simply put, a profession of ignorance about a fact which is patently and necessarily within the pleader's
knowledge or means of knowing is as ineffective as no denial at all.47 Respondents' ineffective denial thus failed
to properly tender an issue and the averments contained in the petition for forfeiture were deemed judicially
admitted by them.
As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:
Its "specific denial" of the material allegation of the petition without setting forth the substance of the
matters relied upon to support its general denial, when such matters were plainly within its knowledge
and it could not logically pretend ignorance as to the same, therefore, failed to properly tender on issue.48
Thus, the general denial of the Marcos children of the allegations in the petition for forfeiture "for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since they were not privy
to the transactions" cannot rightfully be accepted as a defense because they are the legal heirs and successors-in-
interest of Ferdinand E. Marcos and are therefore bound by the acts of their father vis-a-vis the Swiss funds.
• PRE-TRIAL BRIEF DATED OCTOBER 18, 1993
The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said brief, Mrs. Marcos stressed
that the funds involved were lawfully acquired. But, as in their answer, they failed to state and substantiate how
these funds were acquired lawfully. They failed to present and attach even a single document that would show
and prove the truth of their allegations. Section 6, Rule 18 of the 1997 Rules of Civil Procedure provides:
The parties shall file with the court and serve on the adverse party, x x x their respective pre-trial briefs which
shall contain, among others:
xxx
(d) the documents or exhibits to be presented, stating the purpose thereof;
xxx
(f) the number and names of the witnesses, and the substance of their respective testimonies.49
It is unquestionably within the court's power to require the parties to submit their pre-trial briefs and to state the
number of witnesses intended to be called to the stand, and a brief summary of the evidence each of them is
expected to give as well as to disclose the number of documents to be submitted with a description of the nature
of each. The tenor and character of the testimony of the witnesses and of the documents to be deduced at the
trial thus made known, in addition to the particular issues of fact and law, it becomes apparent if genuine issues
are being put forward necessitating the holding of a trial. Likewise, the parties are obliged not only to make a
formal identification and specification of the issues and their proofs, and to put these matters in writing and
submit them to the court within the specified period for the prompt disposition of the action.50
The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos children, merely stated:
xxx
WITNESSES
4.1 Respondent Imelda will present herself as a witness and reserves the right to present additional
witnesses as may be necessary in the course of the trial.
xxx
DOCUMENTARY EVIDENCE
5.1 Respondent Imelda reserves the right to present and introduce in evidence documents as may be
necessary in the course of the trial.
Mrs. Marcos did not enumerate and describe the documents constituting her evidence. Neither the names of
witnesses nor the nature of their testimony was stated. What alone appeared certain was the testimony of Mrs.
Marcos only who in fact had previously claimed ignorance and lack of knowledge. And even then, the
substance of her testimony, as required by the rules, was not made known either. Such cunning tactics of
respondents are totally unacceptable to this Court. We hold that, since no genuine issue was raised, the case
became ripe for summary judgment.
• OPPOSITION TO MOTION FOR SUMMARY JUDGMENT

DATED MARCH 21, 2000
The opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000 of petitioner
Republic was merely adopted by the Marcos children as their own opposition to the said motion. However, it
was again not accompanied by affidavits, depositions or admissions as required by Section 3, Rule 35 of the
1997 Rules on Civil Procedure:
x x x The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days
before hearing. After hearing, the judgment sought shall be rendered forthwith if the pleadings,
supporting affidavits, depositions, and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.51
The absence of opposing affidavits, depositions and admissions to contradict the sworn declarations in the
Republic's motion only demonstrated that the averments of such opposition were not genuine and therefore
unworthy of belief.
• Demurrer to Evidence dated May 2, 2000;52

Motions for Reconsideration;53 and Memoranda
of Mrs. Marcos and the Marcos children54
All these pleadings again contained no allegations of facts showing their lawful acquisition of the funds. Once
more, respondents merely made general denials without alleging facts which would have been admissible in
evidence at the hearing, thereby failing to raise genuine issues of fact.
Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the pre-trial, her counsel stated
that his client was just a beneficiary of the funds, contrary to petitioner Republic's allegation that Mrs. Marcos
disclaimed ownership of or interest in the funds.
This is yet another indication that respondents presented a fictitious defense because, during the pre-trial, Mrs.
Marcos and the Marcos children denied ownership of or interest in the Swiss funds:
PJ Garchitorena:
Make of record that as far as Imelda Marcos is concerned through the statement of Atty.
Armando M. Marcelo that the US$360 million more or less subject matter of the instant lawsuit
as allegedly obtained from the various Swiss Foundations do not belong to the estate of Marcos
or to Imelda Marcos herself. That's your statement of facts?
Atty. MARCELO:
Yes, Your Honor.
PJ Garchitorena:
That's it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your point here? Does the estate
of Marcos own anything of the $360 million subject of this case.
Atty. TECSON:
We joined the Manifestation of Counsel.
PJ Garchitorena:
You do not own anything?
Atty. TECSON:
Yes, Your Honor.
PJ Garchitorena:
Counsel for Irene Araneta?
Atty. SISON:
I join the position taken by my other compañeros here, Your Honor.
xxx
Atty. SISON:
Irene Araneta as heir do (sic) not own any of the amount, Your Honor.55
We are convinced that the strategy of respondent Marcoses was to confuse petitioner Republic as to what facts
they would prove or what issues they intended to pose for the court's resolution. There is no doubt in our mind
that they were leading petitioner Republic, and now this Court, to perplexity, if not trying to drag this forfeiture
case to eternity.
• Manifestation dated May 26, 1998 filed by MRS.

Marcos; General/Supplemental Compromise
Agreement dated December 28, 1993
These pleadings of respondent Marcoses presented nothing but feigned defenses. In their earlier pleadings,
respondents alleged either that they had no knowledge of the existence of the Swiss deposits or that they could
no longer remember anything as it happened a long time ago. As to Mrs. Marcos, she remembered that it was
lawfully acquired.
In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this Honorable Court,
most respectfully manifests:
That respondent Imelda R, Marcos owns 90% of the subject matter of the above-entitled case, being the
sole beneficiary of the dollar deposits in the name of the various foundations alleged in the case;
That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late
President Ferdinand E. Marcos.
In the Compromise/Supplemental Agreements, respondent Marcoses sought to implement the agreed

distribution of the Marcos assets, including the Swiss deposits. This was, to us, an unequivocal admission of
ownership by the Marcoses of the said deposits.
But, as already pointed out, during the pre-trial conference, respondent Marcoses denied knowledge as well as
ownership of the Swiss funds.
Anyway we look at it, respondent Marcoses have put forth no real defense. The "facts" pleaded by respondents,
while ostensibly raising important questions or issues of fact, in reality comprised mere verbiage that was
evidently wanting in substance and constituted no genuine issues for trial.
We therefore rule that, under the circumstances, summary judgment is proper.
In fact, it is the law itself which determines when summary judgment is called for. Under the rules, summary
judgment is appropriate when there are no genuine issues of fact requiring the presentation of evidence in a full-
blown trial. Even if on their face the pleadings appear to raise issue, if the affidavits, depositions and admissions
show that such issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter
of law.56
In sum, mere denials, if unaccompanied by any fact which will be admissible in evidence at a hearing, are not
sufficient to raise genuine issues of fact and will not defeat a motion for summary judgment. 57 A summary
judgment is one granted upon motion of a party for an expeditious settlement of the case, it appearing from the
pleadings, depositions, admissions and affidavits that there are no important questions or issues of fact posed
and, therefore, the movant is entitled to a judgment as a matter of law. A motion for summary judgment is
premised on the assumption that the issues presented need not be tried either because these are patently devoid
of substance or that there is no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of
Court for the prompt disposition of a civil action where there exists no serious controversy. 58 Summary
judgment is a procedural device for the prompt disposition of actions in which the pleadings raise only a legal
issue, not a genuine issue as to any material fact. The theory of summary judgment is that, although an answer
may on its face appear to tender issues requiring trial, if it is established by affidavits, depositions or admissions
that those issues are not genuine but fictitious, the Court is justified in dispensing with the trial and rendering
summary judgment for petitioner.59
In the various annexes to the petition for forfeiture, petitioner Republic attached sworn statements of witnesses
who had personal knowledge of the Marcoses' participation in the illegal acquisition of funds deposited in the
Swiss accounts under the names of five groups or foundations. These sworn statements substantiated the ill-
gotten nature of the Swiss bank deposits. In their answer and other subsequent pleadings, however, the
Marcoses merely made general denials of the allegations against them without stating facts admissible in
evidence at the hearing, thereby failing to raise any genuine issues of fact.
Under these circumstances, a trial would have served no purpose at all and would have been totally
unnecessary, thus justifying a summary judgment on the petition for forfeiture. There were no opposing
affidavits to contradict the sworn declarations of the witnesses of petitioner Republic, leading to the inescapable
conclusion that the matters raised in the Marcoses' answer were false.
Time and again, this Court has encountered cases like this which are either only half-heartedly defended or, if
the semblance of a defense is interposed at all, it is only to delay disposition and gain time. It is certainly not in
the interest of justice to allow respondent Marcoses to avail of the appellate remedies accorded by the Rules of
Court to litigants in good faith, to the prejudice of the Republic and ultimately of the Filipino people. From the
beginning, a candid demonstration of respondents' good faith should have been made to the court below.
Without the deceptive reasoning and argumentation, this protracted litigation could have ended a long time ago.
Since 1991, when the petition for forfeiture was first filed, up to the present, all respondents have offered are
foxy responses like "lack of sufficient knowledge or lack of privity" or "they cannot recall because it happened
a long time ago" or, as to Mrs. Marcos, "the funds were lawfully acquired." But, whenever it suits them, they
also claim ownership of 90% of the funds and allege that only 10% belongs to the Marcos estate. It has been an
incredible charade from beginning to end.
In the hope of convincing this Court to rule otherwise, respondents Maria Imelda Marcos-Manotoc and
Ferdinand R. Marcos Jr. contend that "by its positive acts and express admissions prior to filing the motion for
summary judgment on March 10, 2000, petitioner Republic had bound itself to go to trial on the basis of
existing issues. Thus, it had legally waived whatever right it had to move for summary judgment."60
We do not think so. The alleged positive acts and express admissions of the petitioner did not preclude it from
filing a motion for summary judgment.
Rule 35 of the 1997 Rules of Civil Procedure provides:
Rule 35
Summary Judgment
Section 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has
been served, move with supporting affidavits, depositions or admissions for a summary judgment in his
favor upon all or any part thereof.
Section 2. Summary judgment for defending party. - A party against whom a claim, counterclaim, or
cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof.
(Emphasis ours)61
Under the rule, the plaintiff can move for summary judgment "at any time after the pleading in answer thereto
(i.e., in answer to the claim, counterclaim or cross-claim) has been served." No fixed reglementary period is
provided by the Rules. How else does one construe the phrase "any time after the answer has been served?"
This issue is actually one of first impression. No local jurisprudence or authoritative work has touched upon this
matter. This being so, an examination of foreign laws and jurisprudence, particularly those of the United States
where many of our laws and rules were copied, is in order.
Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to recover upon a claim,
counterclaim or cross-claim may move for summary judgment at any time after the expiration of 20 days from
the commencement of the action or after service of a motion for summary judgment by the adverse party, and
that a party against whom a claim, counterclaim or cross-claim is asserted may move for summary judgment at
any time.
However, some rules, particularly Rule 113 of the Rules of Civil Practice of New York, specifically provide
that a motion for summary judgment may not be made until issues have been joined, that is, only after an
answer has been served.62 Under said rule, after issues have been joined, the motion for summary judgment may
be made at any stage of the litigation.63 No fixed prescriptive period is provided.
Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide that a motion for summary
judgment may not be made until issues have been joined, meaning, the plaintiff has to wait for the answer
before he can move for summary judgment.64 And like the New York rules, ours do not provide for a fixed
reglementary period within which to move for summary judgment.
This being so, the New York Supreme Court's interpretation of Rule 113 of the Rules of Civil Practice can be
applied by analogy to the interpretation of Section 1, Rule 35, of our 1997 Rules of Civil Procedure.
Under the New York rule, after the issues have been joined, the motion for summary judgment may be made at
any stage of the litigation. And what exactly does the phrase "at any stage of the litigation" mean? In Ecker vs.
Muzysh,65 the New York Supreme Court ruled:
"PER CURIAM.
Plaintiff introduced her evidence and the defendants rested on the case made by the plaintiff. The case
was submitted. Owing to the serious illness of the trial justice, a decision was not rendered within sixty
days after the final adjournment of the term at which the case was tried. With the approval of the trial
justice, the plaintiff moved for a new trial under Section 442 of the Civil Practice Act. The plaintiff also
moved for summary judgment under Rule 113 of the Rules of Civil Practice. The motion was opposed
mainly on the ground that, by proceeding to trial, the plaintiff had waived her right to summary
judgment and that the answer and the opposing affidavits raised triable issues. The amount due and
unpaid under the contract is not in dispute. The Special Term granted both motions and the defendants
have appealed.
The Special Term properly held that the answer and the opposing affidavits raised no triable issue. Rule
113 of the Rules of Civil Practice and the Civil Practice Act prescribe no limitation as to the time
when a motion for summary judgment must be made. The object of Rule 113 is to empower the court
to summarily determine whether or not a bona fide issue exists between the parties, and there is no
limitation on the power of the court to make such a determination at any stage of the litigation. "
(emphasis ours)
On the basis of the aforequoted disquisition, "any stage of the litigation" means that "even if the plaintiff has
proceeded to trial, this does not preclude him from thereafter moving for summary judgment."66
In the case at bar, petitioner moved for summary judgment after pre-trial and before its scheduled date for
presentation of evidence. Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-trial
conference, petitioner "waived" its right to summary judgment.
This argument must fail in the light of the New York Supreme Court ruling which we apply by analogy to this
case. In Ecker,67 the defendant opposed the motion for summary judgment on a ground similar to that raised by
the Marcoses, that is, "that plaintiff had waived her right to summary judgment" by her act of proceeding to
trial. If, as correctly ruled by the New York court, plaintiff was allowed to move for summary judgment
even after trial and submission of the case for resolution, more so should we permit it in the present case where
petitioner moved for summary judgment before trial.
Therefore, the phrase "anytime after the pleading in answer thereto has been served" in Section 1, Rule 35 of
our Rules of Civil Procedure means "at any stage of the litigation." Whenever it becomes evident at any stage of
the litigation that no triable issue exists, or that the defenses raised by the defendant(s) are sham or frivolous,
plaintiff may move for summary judgment. A contrary interpretation would go against the very objective of the
Rule on Summary Judgment which is to "weed out sham claims or defenses thereby avoiding the expense and
loss of time involved in a trial."68
In cases with political undertones like the one at bar, adverse parties will often do almost anything to delay the
proceedings in the hope that a future administration sympathetic to them might be able to influence the outcome
of the case in their favor. This is rank injustice we cannot tolerate.
The law looks with disfavor on long, protracted and expensive litigation and encourages the speedy and prompt
disposition of cases. That is why the law and the rules provide for a number of devices to ensure the speedy
disposition of cases. Summary judgment is one of them.
Faithful therefore to the spirit of the law on summary judgment which seeks to avoid unnecessary expense and
loss of time in a trial, we hereby rule that petitioner Republic could validly move for summary judgment any
time after the respondents' answer was filed or, for that matter, at any subsequent stage of the litigation. The fact
that petitioner agreed to proceed to trial did not in any way prevent it from moving for summary judgment, as
indeed no genuine issue of fact was ever validly raised by respondent Marcoses.
This interpretation conforms with the guiding principle enshrined in Section 6, Rule 1 of the 1997 Rules of
Civil Procedure that the "[r]ules should be liberally construed in order to promote their objective of securing a
just, speedy and inexpensive disposition of every action and proceeding."69
Respondents further allege that the motion for summary judgment was based on respondents' answer and other
documents that had long been in the records of the case. Thus, by the time the motion was filed on March 10,
2000, estoppel by laches had already set in against petitioner.
We disagree. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do
that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that
the person has abandoned his right or declined to assert it. 70 In effect, therefore, the principle of laches is one of
estoppel because "it prevents people who have slept on their rights from prejudicing the rights of third parties
who have placed reliance on the inaction of the original parties and their successors-in-interest".71
A careful examination of the records, however, reveals that petitioner was in fact never remiss in pursuing its
case against respondent Marcoses through every remedy available to it, including the motion for summary
judgment.
Petitioner Republic initially filed its motion for summary judgment on October 18, 1996. The motion was
denied because of the pending compromise agreement between the Marcoses and petitioner. But during the pre-
trial conference, the Marcoses denied ownership of the Swiss funds, prompting petitioner to file another motion
for summary judgment now under consideration by this Court. It was the subsequent events that transpired after
the answer was filed, therefore, which prevented petitioner from filing the questioned motion. It was definitely
not because of neglect or inaction that petitioner filed the (second) motion for summary judgment years after
respondents' answer to the petition for forfeiture.
In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but also that
some unfair injury to them might result unless the action is barred.72
This, respondents failed to bear out. In fact, during the pre-trial conference, the Marcoses disclaimed ownership
of the Swiss deposits. Not being the owners, as they claimed, respondents did not have any vested right or
interest which could be adversely affected by petitioner's alleged inaction.
But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or laches
does not apply when the government sues as a sovereign or asserts governmental rights. 73 Nor can estoppel
validate an act that contravenes law or public policy.74
As a final point, it must be emphasized that laches is not a mere question of time but is principally a question of
the inequity or unfairness of permitting a right or claim to be enforced or asserted. 75 Equity demands that
petitioner Republic should not be barred from pursuing the people's case against the Marcoses.
(2) The Propriety of Forfeiture
The matter of summary judgment having been thus settled, the issue of whether or not petitioner Republic was
able to prove its case for forfeiture in accordance with the requisites of Sections 2 and 3 of RA 1379 now takes
center stage.
The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to forfeiture, if
its amount or value is manifestly disproportionate to the official salary and other lawful income of the public
officer who owns it. Hence, Sections 2 and 6 of RA 137976 provide:
x x x x x x
Section 2. Filing of petition. – Whenever any public officer or employee has acquired during his
incumbency an amount or property which is manifestly out of proportion to his salary as such public
officer or employee and to his other lawful income and the income from legitimately acquired property,
said property shall be presumed prima facie to have been unlawfully acquired.
x x x x x x
Sec. 6. Judgment – If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property in question,
forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become the
property of the State. Provided, That no judgment shall be rendered within six months before any
general election or within three months before any special election. The Court may, in addition, refer
this case to the corresponding Executive Department for administrative or criminal action, or both.
From the above-quoted provisions of the law, the following facts must be established in order that forfeiture or
seizure of the Swiss deposits may be effected:
(1) ownership by the public officer of money or property acquired during his incumbency, whether it be
in his name or otherwise, and
(2) the extent to which the amount of that money or property exceeds, i. e., is grossly disproportionate
to, the legitimate income of the public officer.
That spouses Ferdinand and Imelda Marcos were public officials during the time material to the instant case
was never in dispute. Paragraph 4 of respondent Marcoses' answer categorically admitted the allegations in
paragraph 4 of the petition for forfeiture as to the personal circumstances of Ferdinand E. Marcos as a public
official who served without interruption as Congressman, Senator, Senate President and President of the
Republic of the Philippines from December 1, 1965 to February 25, 1986. 77 Likewise, respondents admitted in
their answer the contents of paragraph 5 of the petition as to the personal circumstances of Imelda R. Marcos
who once served as a member of the Interim Batasang Pambansa from 1978 to 1984 and as Metro Manila
Governor, concurrently Minister of Human Settlements, from June 1976 to February 1986.78
Respondent Mrs. Marcos also admitted in paragraph 10 of her answer the allegations of paragraph 11 of the
petition for forfeiture which referred to the accumulated salaries of respondents Ferdinand E. Marcos and
Imelda R. Marcos.79 The combined accumulated salaries of the Marcos couple were reflected in the
Certification dated May 27, 1986 issued by then Minister of Budget and Management Alberto Romulo. 80 The
Certification showed that, from 1966 to 1985, Ferdinand E. Marcos and Imelda R. Marcos had accumulated
salaries in the amount of P1,570,000 and P718,750, respectively, or a total of P2,288,750:
Ferdinand E. Marcos, as President
1966-1976 at P60,000/year P660,000

1977-1984 at 800,000
P100,000/year
1985 at 110,000
P110,000/year
P1,570,00
Imelda R. Marcos, as Minister
June 1976-1985 at P75,000/year P718,000
In addition to their accumulated salaries from 1966 to 1985 are the Marcos couple's combined salaries from
January to February 1986 in the amount of P30,833.33. Hence, their total accumulated salaries amounted to
P2,319,583.33. Converted to U.S. dollars on the basis of the corresponding peso-dollar exchange rates
prevailing during the applicable period when said salaries were received, the total amount had an equivalent
value of $304,372.43.
The dollar equivalent was arrived at by using the official annual rates of exchange of the Philippine peso and
the US dollar from 1965 to 1985 as well as the official monthly rates of exchange in January and February 1986
issued by the Center for Statistical Information of the Bangko Sentral ng Pilipinas.
Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of Court provides that:
Section 4. – Judicial admissions – An admission, verbal or written, made by a party in the course of the
proceedings in the same case does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.81
It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in the course of
the trial either by verbal or written manifestations or stipulations; or (c) in other stages of judicial proceedings,
as in the pre-trial of the case.82 Thus, facts pleaded in the petition and answer, as in the case at bar, are deemed
admissions of petitioner and respondents, respectively, who are not permitted to contradict them or
subsequently take a position contrary to or inconsistent with such admissions.83
The sum of $304,372.43 should be held as the only known lawful income of respondents since they did not file
any Statement of Assets and Liabilities (SAL), as required by law, from which their net worth could be
determined. Besides, under the 1935 Constitution, Ferdinand E. Marcos as President could not receive "any
other emolument from the Government or any of its subdivisions and instrumentalities". 84 Likewise, under the
1973 Constitution, Ferdinand E. Marcos as President could "not receive during his tenure any other emolument
from the Government or any other source." 85 In fact, his management of businesses, like the administration of
foundations to accumulate funds, was expressly prohibited under the 1973 Constitution:
Article VII, Sec. 4(2) – The President and the Vice-President shall not, during their tenure, hold any
other office except when otherwise provided in this Constitution, nor may they practice any profession,
participate directly or indirectly in the management of any business, or be financially interested directly
or indirectly in any contract with, or in any franchise or special privilege granted by the Government or
any other subdivision, agency, or instrumentality thereof, including any government owned or controlled
corporation.
Article VII, Sec. 11 – No Member of the National Assembly shall appear as counsel before any court
inferior to a court with appellate jurisdiction, x x x. Neither shall he, directly or indirectly, be interested
financially in any contract with, or in any franchise or special privilege granted by the Government, or
any subdivision, agency, or instrumentality thereof including any government owned or controlled
corporation during his term of office. He shall not intervene in any matter before any office of the
government for his pecuniary benefit.
Article IX, Sec. 7 – The Prime Minister and Members of the Cabinet shall be subject to the provision of
Section 11, Article VIII hereof and may not appear as counsel before any court or administrative body,
or manage any business, or practice any profession, and shall also be subject to such other
disqualification as may be provided by law.
Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for determining
the existence of a prima facie case of forfeiture of the Swiss funds.
Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture of the Swiss
funds since it failed to prove the essential elements under Section 3, paragraphs (c), (d) and (e) of RA 1379. As
the Act is a penal statute, its provisions are mandatory and should thus be construed strictly against the
petitioner and liberally in favor of respondent Marcoses.
We hold that it was not for petitioner to establish the Marcoses' other lawful income or income from
legitimately acquired property for the presumption to apply because, as between petitioner and respondents, the
latter were in a better position to know if there were such other sources of lawful income. And if indeed there
was such other lawful income, respondents should have specifically stated the same in their answer. Insofar as
petitioner Republic was concerned, it was enough to specify the known lawful income of respondents.
Section 9 of the PCGG Rules and Regulations provides that, in determining prima facie evidence of ill-gotten
wealth, the value of the accumulated assets, properties and other material possessions of those covered by
Executive Order Nos. 1 and 2 must be out of proportion to the known lawful income of such persons. The
respondent Marcos couple did not file any Statement of Assets and Liabilities (SAL) from which their net worth
could be determined. Their failure to file their SAL was in itself a violation of law and to allow them to
successfully assail the Republic for not presenting their SAL would reward them for their violation of the law.
Further, contrary to the claim of respondents, the admissions made by them in their various pleadings and
documents were valid. It is of record that respondents judicially admitted that the money deposited with the
Swiss banks belonged to them.
We agree with petitioner that respondent Marcoses made judicial admissions of their ownership of the subject
Swiss bank deposits in their answer, the General/Supplemental Agreements, Mrs. Marcos' Manifestation and
Constancia dated May 5, 1999, and the Undertaking dated February 10, 1999. We take note of the fact that the
Associate Justices of the Sandiganbayan were unanimous in holding that respondents had made judicial
admissions of their ownership of the Swiss funds.
In their answer, aside from admitting the existence of the subject funds, respondents likewise
admitted ownership thereof. Paragraph 22 of respondents' answer stated:
22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that respondents

clandestinely stashed the country's wealth in Switzerland and hid the same under layers and layers of
foundations and corporate entities for being false, the truth being that respondents' aforesaid
properties were lawfully acquired. (emphasis supplied)
By qualifying their acquisition of the Swiss bank deposits as lawful, respondents unwittingly admitted their
ownership thereof.
Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by failing to deny under oath the
genuineness and due execution of certain actionable documents bearing her signature attached to the petition.
As discussed earlier, Section 11, Rule 8 86 of the 1997 Rules of Civil Procedure provides that material averments
in the complaint shall be deemed admitted when not specifically denied.
The General87 and Supplemental88 Agreements executed by petitioner and respondents on December 28, 1993
further bolstered the claim of petitioner Republic that its case for forfeiture was proven in accordance with the
requisites of Sections 2 and 3 of RA 1379. The whereas clause in the General Agreement declared that:
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal on December
21, 1990, that the $356 million belongs in principle to the Republic of the Philippines provided certain
conditionalities are met, but even after 7 years, the FIRST PARTY has not been able to procure a final
judgment of conviction against the PRIVATE PARTY.
While the Supplemental Agreement warranted, inter alia, that:
In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall be entitled
to the equivalent of 25% of the amount that may be eventually withdrawn from said $356 million Swiss
deposits.
The stipulations set forth in the General and Supplemental Agreements undeniably indicated the manifest intent
of respondents to enter into a compromise with petitioner. Corollarily, respondents' willingness to agree to an
amicable settlement with the Republic only affirmed their ownership of the Swiss deposits for the simple reason
that no person would acquiesce to any concession over such huge dollar deposits if he did not in fact own them.
Respondents make much capital of the pronouncement by this Court that the General and Supplemental
Agreements were null and void.89 They insist that nothing in those agreements could thus be admitted in
evidence against them because they stood on the same ground as an accepted offer which, under Section 27,
Rule 13090 of the 1997 Rules of Civil Procedure, provides that "in civil cases, an offer of compromise is not an
admission of any liability and is not admissible in evidence against the offeror."
We find no merit in this contention. The declaration of nullity of said agreements was premised on the
following constitutional and statutory infirmities: (1) the grant of criminal immunity to the Marcos heirs was
against the law; (2) the PCGG's commitment to exempt from all forms of taxes the properties to be retained by
the Marcos heirs was against the Constitution; and (3) the government's undertaking to cause the dismissal of all
cases filed against the Marcoses pending before the Sandiganbayan and other courts encroached on the powers
of the judiciary. The reasons relied upon by the Court never in the least bit even touched on the veracity and
truthfulness of respondents' admission with respect to their ownership of the Swiss funds. Besides, having made
certain admissions in those agreements, respondents cannot now deny that they voluntarily admitted owning the
subject Swiss funds, notwithstanding the fact that the agreements themselves were later declared null and void.
The following observation of Sandiganbayan Justice Catalino Castañeda, Jr. in the decision dated September
19, 2000 could not have been better said:
x x x The declaration of nullity of the two agreements rendered the same without legal effects but it did
not detract from the admissions of the respondents contained therein. Otherwise stated, the admissions
made in said agreements, as quoted above, remain binding on the respondents.91
A written statement is nonetheless competent as an admission even if it is contained in a document which is not
itself effective for the purpose for which it is made, either by reason of illegality, or incompetency of a party
thereto, or by reason of not being signed, executed or delivered. Accordingly, contracts have been held as
competent evidence of admissions, although they may be unenforceable.92
The testimony of respondent Ferdinand Marcos, Jr. during the hearing on the motion for the approval of the
Compromise Agreement on April 29, 1998 also lent credence to the allegations of petitioner Republic that
respondents admitted ownership of the Swiss bank accounts. We quote the salient portions of Ferdinand Jr.'s
formal declarations in open court:
ATTY. FERNANDO:
Mr. Marcos, did you ever have any meetings with PCGG Chairman Magtanggol C. Gunigundo?
F. MARCOS, JR.:
Yes. I have had very many meetings in fact with Chairman.
ATTY. FERNANDO:
Would you recall when the first meeting occurred?
PJ GARCHITORENA:
In connection with what?
ATTY. FERNANDO:
In connection with the ongoing talks to compromise the various cases initiated by PCGG against
your family?
F. MARCOS, JR.:
The nature of our meetings was solely concerned with negotiations towards achieving some kind
of agreement between the Philippine government and the Marcos family. The discussions that
led up to the compromise agreement were initiated by our then counsel Atty. Simeon Mesina x x
x.93
xxx xxx xxx
ATTY. FERNANDO:
What was your reaction when Atty. Mesina informed you of this possibility?
F. MARCOS, JR.:
My reaction to all of these approaches is that I am always open, we are always open, we are very
much always in search of resolution to the problem of the family and any approach that has been
made us, we have entertained. And so my reaction was the same as what I have always … why
not? Maybe this is the one that will finally put an end to this problem.94
xxx xxx xxx
ATTY. FERNANDO:
Basically, what were the true amounts of the assets in the bank?
PJ GARCHITORENA:
So, we are talking about liquid assets here? Just Cash?
F. MARCOS, JR.:
Well, basically, any assets. Anything that was under the Marcos name in any of the banks in
Switzerland which may necessarily be not cash.95
xxx xxx xxx
PJ GARCHITORENA:
x x x What did you do in other words, after being apprised of this contract in connection
herewith?
F. MARCOS, JR.:
I assumed that we are beginning to implement the agreement because this was forwarded through
the Philippine government lawyers through our lawyers and then, subsequently, to me. I was a
little surprised because we hadn't really discussed the details of the transfer of the funds, what the
bank accounts, what the mechanism would be. But nevertheless, I was happy to see that as far as
the PCGG is concerned, that the agreement was perfected and that we were beginning to
implement it and that was a source of satisfaction to me because I thought that finally it will be
the end.96
Ferdinand Jr.'s pronouncements, taken in context and in their entirety, were a confirmation of respondents'
recognition of their ownership of the Swiss bank deposits. Admissions of a party in his testimony are receivable
against him. If a party, as a witness, deliberately concedes a fact, such concession has the force of a judicial
admission.97 It is apparent from Ferdinand Jr.'s testimony that the Marcos family agreed to negotiate with the
Philippine government in the hope of finally putting an end to the problems besetting the Marcos family
regarding the Swiss accounts. This was doubtlessly an acknowledgment of ownership on their part. The rule is
that the testimony on the witness stand partakes of the nature of a formal judicial admission when a party
testifies clearly and unequivocally to a fact which is peculiarly within his own knowledge.98
In her Manifestation99 dated May 26, 1998, respondent Imelda Marcos furthermore revealed the following:
That respondent Imelda R. Marcos owns 90% of the subject matter of the above-entitled case, being the
sole beneficiary of the dollar deposits in the name of the various foundations alleged in the case;
That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late
President Ferdinand E. Marcos;
xxx xxx xxx
Respondents' ownership of the Swiss bank accounts as borne out by Mrs. Marcos' manifestation is as bright as
sunlight. And her claim that she is merely a beneficiary of the Swiss deposits is belied by her own signatures on
the appended copies of the documents substantiating her ownership of the funds in the name of the foundations.
As already mentioned, she failed to specifically deny under oath the authenticity of such documents, especially
those involving "William Saunders" and "Jane Ryan" which actually referred to Ferdinand Marcos and Imelda
Marcos, respectively. That failure of Imelda Marcos to specifically deny the existence, much less the
genuineness and due execution, of the instruments bearing her signature, was tantamount to a judicial admission
of the genuineness and due execution of said instruments, in accordance with Section 8, Rule 8 100 of the 1997
Rules of Civil Procedure.
Likewise, in her Constancia101 dated May 6, 1999, Imelda Marcos prayed for the approval of the Compromise
Agreement and the subsequent release and transfer of the $150 million to the rightful owner. She further made
the following manifestations:
xxx xxx xxx
2. The Republic's cause of action over the full amount is its forfeiture in favor of the government if
found to be ill-gotten. On the other hand, the Marcoses defend that it is a legitimate asset. Therefore,
both parties have an inchoate right of ownership over the account. If it turns out that the account is of
lawful origin, the Republic may yield to the Marcoses. Conversely, the Marcoses must yield to the
Republic. (underscoring supplied)
xxx xxx xxx
3. Consistent with the foregoing, and the Marcoses having committed themselves to helping the less
fortunate, in the interest of peace, reconciliation and unity, defendant MADAM IMELDA
ROMUALDEZ MARCOS, in firm abidance thereby, hereby affirms her agreement with the Republic
for the release and transfer of the US Dollar 150 million for proper disposition, without prejudice to the
final outcome of the litigation respecting the ownership of the remainder.
Again, the above statements were indicative of Imelda's admission of the Marcoses' ownership of the Swiss
deposits as in fact "the Marcoses defend that it (Swiss deposits) is a legitimate (Marcos) asset."
On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand Marcos, Jr. and Maria Irene Marcos-
Araneta filed a motion102 on May 4, 1998 asking the Sandiganbayan to place the res (Swiss deposits) in custodia
legis:
7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits are placed
in custodia legis or within the Court's protective mantle, its dissipation or misappropriation by the
petitioner looms as a distinct possibility.
Such display of deep, personal interest can only come from someone who believes that he has a marked and
intimate right over the considerable dollar deposits. Truly, by filing said motion, the Marcos children revealed
their ownership of the said deposits.
Lastly, the Undertaking103 entered into by the PCGG, the PNB and the Marcos foundations on February 10,
1999, confirmed the Marcoses' ownership of the Swiss bank deposits. The subject Undertaking brought to light
their readiness to pay the human rights victims out of the funds held in escrow in the PNB. It stated:
WHEREAS, the Republic of the Philippines sympathizes with the plight of the human rights victims-
plaintiffs in the aforementioned litigation through the Second Party, desires to assist in the satisfaction of
the judgment awards of said human rights victims-plaintiffs, by releasing, assigning and or waiving
US$150 million of the funds held in escrow under the Escrow Agreements dated August 14, 1995,
although the Republic is not obligated to do so under final judgments of the Swiss courts dated
December 10 and 19, 1997, and January 8, 1998;
WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its rights and interests
over said US$150 million to the aforementioned human rights victims-plaintiffs.
All told, the foregoing disquisition negates the claim of respondents that "petitioner failed to prove that they
acquired or own the Swiss funds" and that "it was only by arbitrarily isolating and taking certain statements
made by private respondents out of context that petitioner was able to treat these as judicial admissions." The
Court is fully aware of the relevance, materiality and implications of every pleading and document submitted in
this case. This Court carefully scrutinized the proofs presented by the parties. We analyzed, assessed and
weighed them to ascertain if each piece of evidence rightfully qualified as an admission. Owing to the far-
reaching historical and political implications of this case, we considered and examined, individually and totally,
the evidence of the parties, even if it might have bordered on factual adjudication which, by authority of the
rules and jurisprudence, is not usually done by this Court. There is no doubt in our mind that respondent
Marcoses admitted ownership of the Swiss bank deposits.
We have always adhered to the familiar doctrine that an admission made in the pleadings cannot be
controverted by the party making such admission and becomes conclusive on him, and that all proofs submitted
by him contrary thereto or inconsistent therewith should be ignored, whether an objection is interposed by the
adverse party or not.104 This doctrine is embodied in Section 4, Rule 129 of the Rules of Court:
SEC. 4. Judicial admissions. ─ An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.105
In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of the Swiss
deposits is definitely binding on them.
The individual and separate admissions of each respondent bind all of them pursuant to Sections 29 and 31,
Rule 130 of the Rules of Court:
SEC. 29. Admission by co-partner or agent. ─ The act or declaration of a partner or agent of the party
within the scope of his authority and during the existence of the partnership or agency, may be given in
evidence against such party after the partnership or agency is shown by evidence other than such act or
declaration. The same rule applies to the act or declaration of a joint owner, joint debtor, or other person
jointly interested with the party.106
SEC. 31. Admission by privies. ─ Where one derives title to property from another, the act, declaration,
or omission of the latter, while holding the title, in relation to the property, is evidence against the
former.107
The declarations of a person are admissible against a party whenever a "privity of estate" exists between the
declarant and the party, the term "privity of estate" generally denoting a succession in rights.108 Consequently,
an admission of one in privity with a party to the record is competent. 109 Without doubt, privity exists among the
respondents in this case. And where several co-parties to the record are jointly interested in the subject matter of
the controversy, the admission of one is competent against all.110
Respondents insist that the Sandiganbayan is correct in ruling that petitioner Republic has failed to establish
a prima facie case for the forfeiture of the Swiss deposits.
We disagree. The sudden turn-around of the Sandiganbayan was really strange, to say the least, as its findings
and conclusions were not borne out by the voluminous records of this case.
Section 2 of RA 1379 explicitly states that "whenever any public officer or employee has acquired during his
incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or
employee and to his other lawful income and the income from legitimately acquired property, said property
shall be presumed prima facie to have been unlawfully acquired. x x x"
The elements which must concur for this prima facie presumption to apply are:
(1) the offender is a public officer or employee;
(2) he must have acquired a considerable amount of money or property during his incumbency; and
(3) said amount is manifestly out of proportion to his salary as such public officer or employee and to
his other lawful income and the income from legitimately acquired property.
It is undisputed that spouses Ferdinand and Imelda Marcos were former public officers. Hence, the first element
is clearly extant.
The second element deals with the amount of money or property acquired by the public officer during his
incumbency. The Marcos couple indubitably acquired and owned properties during their term of office. In fact,
the five groups of Swiss accounts were admittedly owned by them. There is proof of the existence and
ownership of these assets and properties and it suffices to comply with the second element.
The third requirement is met if it can be shown that such assets, money or property is manifestly out of
proportion to the public officer's salary and his other lawful income. It is the proof of this third element that is
crucial in determining whether a prima facie presumption has been established in this case.
Petitioner Republic presented not only a schedule indicating the lawful income of the Marcos spouses during
their incumbency but also evidence that they had huge deposits beyond such lawful income in Swiss banks
under the names of five different foundations. We believe petitioner was able to establish the prima
facie presumption that the assets and properties acquired by the Marcoses were manifestly and patently
disproportionate to their aggregate salaries as public officials. Otherwise stated, petitioner presented enough
evidence to convince us that the Marcoses had dollar deposits amounting to US $356 million representing the
balance of the Swiss accounts of the five foundations, an amount way, way beyond their aggregate legitimate
income of only US$304,372.43 during their incumbency as government officials.
Considering, therefore, that the total amount of the Swiss deposits was considerably out of proportion to the
known lawful income of the Marcoses, the presumption that said dollar deposits were unlawfully acquired was
duly established. It was sufficient for the petition for forfeiture to state the approximate amount of money and
property acquired by the respondents, and their total government salaries. Section 9 of the PCGG Rules and
Regulations states:
Prima Facie Evidence. – Any accumulation of assets, properties, and other material possessions of those
persons covered by Executive Orders No. 1 and No. 2, whose value is out of proportion to their known
lawful income is prima facie deemed ill-gotten wealth.
Indeed, the burden of proof was on the respondents to dispute this presumption and show by clear and
convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources
of income. A presumption is prima facie proof of the fact presumed and, unless the fact thus prima
facie established by legal presumption is disproved, it must stand as proved.111
Respondent Mrs. Marcos argues that the foreign foundations should have been impleaded as they were
indispensable parties without whom no complete determination of the issues could be made. She asserts that the
failure of petitioner Republic to implead the foundations rendered the judgment void as the joinder of
indispensable parties was a sine qua non exercise of judicial power. Furthermore, the non-inclusion of the
foreign foundations violated the conditions prescribed by the Swiss government regarding the deposit of the
funds in escrow, deprived them of their day in court and denied them their rights under the Swiss constitution
and international law.112
The Court finds that petitioner Republic did not err in not impleading the foreign foundations. Section 7, Rule 3
of the 1997 Rules of Civil Procedure, 113 taken from Rule 19b of the American Federal Rules of Civil Procedure,
provides for the compulsory joinder of indispensable parties. Generally, an indispensable party must be
impleaded for the complete determination of the suit. However, failure to join an indispensable party does not
divest the court of jurisdiction since the rule regarding indispensable parties is founded on equitable
considerations and is not jurisdictional. Thus, the court is not divested of its power to render a decision even in
the absence of indispensable parties, though such judgment is not binding on the non-joined party.114
An indispensable party115 has been defined as one:
[who] must have a direct interest in the litigation; and if this interest is such that it cannot be separated
from that of the parties to the suit, if the court cannot render justice between the parties in his absence, if
the decree will have an injurious effect upon his interest, or if the final determination of the controversy
in his absence will be inconsistent with equity and good conscience.
There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the
presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of the
other party?116 There is, however, no fixed formula for determining who is an indispensable party; this can only
be determined in the context and by the facts of the particular suit or litigation.
In the present case, there was an admission by respondent Imelda Marcos in her May 26, 1998 Manifestation
before the Sandiganbayan that she was the sole beneficiary of 90% of the subject matter in controversy with the
remaining 10% belonging to the estate of Ferdinand Marcos. 117 Viewed against this admission, the foreign
foundations were not indispensable parties. Their non-participation in the proceedings did not prevent the court
from deciding the case on its merits and according full relief to petitioner Republic. The judgment ordering the
return of the $356 million was neither inimical to the foundations' interests nor inconsistent with equity and
good conscience. The admission of respondent Imelda Marcos only confirmed what was already generally
known: that the foundations were established precisely to hide the money stolen by the Marcos spouses from
petitioner Republic. It negated whatever illusion there was, if any, that the foreign foundations owned even a
nominal part of the assets in question.
The rulings of the Swiss court that the foundations, as formal owners, must be given an opportunity to
participate in the proceedings hinged on the assumption that they owned a nominal share of the assets. 118 But
this was already refuted by no less than Mrs. Marcos herself. Thus, she cannot now argue that the ruling of the
Sandiganbayan violated the conditions set by the Swiss court. The directive given by the Swiss court for the
foundations to participate in the proceedings was for the purpose of protecting whatever nominal interest they
might have had in the assets as formal owners. But inasmuch as their ownership was subsequently repudiated by
Imelda Marcos, they could no longer be considered as indispensable parties and their participation in the
proceedings became unnecessary.
In Republic vs. Sandiganbayan,119 this Court ruled that impleading the firms which are the res of the action was
unnecessary:
"And as to corporations organized with ill-gotten wealth, but are not themselves guilty of
misappropriation, fraud or other illicit conduct – in other words, the companies themselves are not the
object or thing involved in the action, the res thereof – there is no need to implead them either. Indeed,
their impleading is not proper on the strength alone of their having been formed with ill-gotten funds,
absent any other particular wrongdoing on their part…
Such showing of having been formed with, or having received ill-gotten funds, however strong or
convincing, does not, without more, warrant identifying the corporations in question with the person
who formed or made use of them to give the color or appearance of lawful, innocent acquisition to
illegally amassed wealth – at the least, not so as place on the Government the onus of impleading the
former with the latter in actions to recover such wealth. Distinguished in terms of juridical personality
and legal culpability from their erring members or stockholders, said corporations are not themselves
guilty of the sins of the latter, of the embezzlement, asportation, etc., that gave rise to the Government's
cause of action for recovery; their creation or organization was merely the result of their members' (or
stockholders') manipulations and maneuvers to conceal the illegal origins of the assets or monies
invested therein. In this light, they are simply the res in the actions for the recovery of illegally acquired
wealth, and there is, in principle, no cause of action against them and no ground to implead them as
defendants in said actions."
Just like the corporations in the aforementioned case, the foreign foundations here were set up to conceal the
illegally acquired funds of the Marcos spouses. Thus, they were simply the res in the action for recovery of ill-
gotten wealth and did not have to be impleaded for lack of cause of action or ground to implead them.
Assuming arguendo, however, that the foundations were indispensable parties, the failure of petitioner to
implead them was a curable error, as held in the previously cited case of Republic vs. Sandiganbayan:120
"Even in those cases where it might reasonably be argued that the failure of the Government to implead
the sequestered corporations as defendants is indeed a procedural abberation, as where said firms were
allegedly used, and actively cooperated with the defendants, as instruments or conduits for conversion of
public funds and property or illicit or fraudulent obtention of favored government contracts, etc., slight
reflection would nevertheless lead to the conclusion that the defect is not fatal, but one correctible under
applicable adjective rules – e.g., Section 10, Rule 5 of the Rules of Court [specifying the remedy of
amendment during trial to authorize or to conform to the evidence]; Section 1, Rule 20 [governing
amendments before trial], in relation to the rule respecting omission of so-called necessary or
indispensable parties, set out in Section 11, Rule 3 of the Rules of Court. It is relevant in this context to
advert to the old familiar doctrines that the omission to implead such parties "is a mere technical defect
which can be cured at any stage of the proceedings even after judgment"; and that, particularly in the
case of indispensable parties, since their presence and participation is essential to the very life of the
action, for without them no judgment may be rendered, amendments of the complaint in order to
implead them should be freely allowed, even on appeal, in fact even after rendition of judgment by this
Court, where it appears that the complaint otherwise indicates their identity and character as such
indispensable parties."121
Although there are decided cases wherein the non-joinder of indispensable parties in fact led to the dismissal of
the suit or the annulment of judgment, such cases do not jibe with the matter at hand. The better view is that
non-joinder is not a ground to dismiss the suit or annul the judgment. The rule on joinder of indispensable
parties is founded on equity. And the spirit of the law is reflected in Section 11, Rule 3 122 of the 1997 Rules of
Civil Procedure. It prohibits the dismissal of a suit on the ground of non-joinder or misjoinder of parties and
allows the amendment of the complaint at any stage of the proceedings, through motion or on order of the court
on its own initiative.123
Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section 7, Rule 3 124 on
indispensable parties was copied, allows the joinder of indispensable parties even after judgment has been
entered if such is needed to afford the moving party full relief. 125 Mere delay in filing the joinder motion does
not necessarily result in the waiver of the right as long as the delay is excusable. 126 Thus, respondent Mrs.
Marcos cannot correctly argue that the judgment rendered by the Sandiganbayan was void due to the non-
joinder of the foreign foundations. The court had jurisdiction to render judgment which, even in the absence of
indispensable parties, was binding on all the parties before it though not on the absent party. 127 If she really felt
that she could not be granted full relief due to the absence of the foreign foundations, she should have moved
for their inclusion, which was allowable at any stage of the proceedings. She never did. Instead she assailed the
judgment rendered.
In the face of undeniable circumstances and the avalanche of documentary evidence against them, respondent
Marcoses failed to justify the lawful nature of their acquisition of the said assets. Hence, the Swiss deposits
should be considered ill-gotten wealth and forfeited in favor of the State in accordance with Section 6 of RA
1379:
SEC. 6. Judgment.─ If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property forfeited in favor of
the State, and by virtue of such judgment the property aforesaid shall become property of the State x x x.
THE FAILURE TO PRESENT AUTHENTICATED TRANSLATIONS OF THE SWISS DECISIONS
Finally, petitioner Republic contends that the Honorable Sandiganbayan Presiding Justice Francis Garchitorena
committed grave abuse of discretion in reversing himself on the ground that the original copies of the
authenticated Swiss decisions and their authenticated translations were not submitted to the court a quo. Earlier
PJ Garchitorena had quoted extensively from the unofficial translation of one of these Swiss decisions in
his ponencia dated July 29, 1999 when he denied the motion to release US$150 Million to the human rights
victims.
While we are in reality perplexed by such an incomprehensible change of heart, there might nevertheless not be
any real need to belabor the issue. The presentation of the authenticated translations of the original copies of the
Swiss decision was not de rigueur for the public respondent to make findings of fact and reach its conclusions.
In short, the Sandiganbayan's decision was not dependent on the determination of the Swiss courts. For that
matter, neither is this Court's.
The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this jurisdiction
that said funds belong to the petitioner Republic. What is important is our own assessment of the sufficiency of
the evidence to rule in favor of either petitioner Republic or respondent Marcoses. In this instance, despite the
absence of the authenticated translations of the Swiss decisions, the evidence on hand tilts convincingly in favor
of petitioner Republic.
WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the Sandiganbayan dated January
31, 2002 is SET ASIDE. The Swiss deposits which were transferred to and are now deposited in escrow at the
Philippine National Bank in the estimated aggregate amount of US$658,175,373.60 as of January 31, 2002, plus
interest, are hereby forfeited in favor of petitioner Republic of the Philippines.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Panganiban, Ynares-Santiago, Austria-Martinez, Carpio-Morales, Callejo, Sr.,
Azcuna, and Tinga, JJ., concur.
Puno, and Vitug, JJ., in the result
Quisumbing, Sandoval-Gutierrez, J., on official leave.
Carpio, J., no part.
2. Phil Business Bank vs. Chua Nov. 15, 2010
G.R. No. 178899 November 15, 2010
PHILIPPINE BUSINESS BANK, Petitioner,

vs.
FELIPE CHUA, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by Philippine Business Bank (PBB) challenging the
decision of the Court of Appeals (CA) in CA-G.R. SP No. 94883 dated February 8, 2007, 2 insofar as it
overturned the Regional Trial Court’s (RTC’s) order dated December 16, 2005 declaring the finality of its
Partial Summary Judgment and granting the issuance of a writ of execution against respondent Felipe Chua
(respondent Chua). PBB also seeks to overturn the resolution of the CA dated July 18, 2007, which denied its
motion for reconsideration.
FACTUAL ANTECEDENTS
From the records, the following facts are not in dispute.
On March 22, 2002, Tomas Tan (Tan), a stockholder and director/Treasurer of CST Enterprises, Inc. (CST),
filed a derivative suit for the Declaration of Unenforceability of Promissory Notes and Mortgage, Nullity of
Secretary’s Certificate, Injunction, Damages with Prayer for the Issuance of Temporary Restraining Order/Writ
of Preliminary Injunction against PBB, Francis Lee, Alfredo Yao, Rodulfo Besinga, Stephen Taala, Rose
Robles, Henry Ramos, Yu Heng, Mabuhay Sugar Central, Inc., Nancy Chan, Henry Chan, John Dennis Chua,
Jaime Soriano, Voltaire Uychutin, Peter Salud, Edgar Lo, respondent Felipe Chua, and John Does before the
Makati City Regional Trial Court.3
In Tan’s amended complaint dated January 9, 2003, he alleged that sometime in February 2001, before he went
abroad for medical treatment, he turned over to respondent Chua, a director and the President of CST, the
original copies of Transfer Certificate of Title Nos. 124275 and 157581, titles to lands owned by, and registered
in the name of, CST. In January 2002, the respondent informed him that CST’s properties had been fraudulently
used as collateral for loans allegedly taken out in CST’s name, but without proper authority from CST
stockholders and/or the Board of Directors.4
From his investigation, Tan discovered that a certain Atty. Jaime Soriano had issued a Secretary’s certificate,
which stated that John Dennis Chua was authorized during a duly constituted CST board meeting to open a
bank account and obtain credit facilities under the name of CST with PBB. This Secretary’s Certificate also
authorized John Dennis Chua to use CST’s properties as security for these loans.5 Using this Secretary’s
Certificate, John Dennis Chua took out loans with PBB in the total amount of Ninety-One Million One Hundred
Thousand Pesos (₱91,100,000.00),6 and used CST properties as collateral.7 Respondent Chua signed as co-
maker with John Dennis Chua, who signed both as the representative of CST, as well as in his personal
capacity, on six promissory notes to PBB to evidence parts of this loan.8
When PBB threatened to foreclose the mortgage on these properties after CST defaulted, 9 Tan filed the present
complaint, essentially arguing that the loans/promissory notes and mortgage made out in CST’s name are
unenforceable against it, since they were entered into by persons who were unauthorized to bind the company.10
In its Amended Answer,11 PBB claimed that the loans to CST, as well as the corresponding mortgage over CST
properties, were all valid and binding since the loan applications and documents accomplished by John Dennis
Chua were supported by the duly accomplished secretary’s certificate, which authorized him to obtain credit
facilities in behalf of CST. In addition, the original copies of the titles to the properties were offered to PBB as
collaterals.
PBB’s Amended Answer also included a cross-claim against respondent Chua, demanding payment of the
promissory notes he signed as co-maker with John Dennis Chua.12
In respondent Chua’s Answer to the Cross-Claim of PBB, 13 he claimed that he never applied for a loan with the
PBB. He further denied authorizing John Dennis Chua to apply for any loans in CST’s name, or to use CST
properties as security for any loans.14 Nevertheless, he admitted that he signed, as co-maker, six promissory
notes covering the loans obtained by John Dennis Chua with PBB. According to respondent Chua, he executed
these promissory notes after the loans had already been consummated, "in a sincere effort to persuade John
Dennis Chua to pay off the unauthorized loan and retrieve from cross-claimant PBB the CST titles."15
PBB subsequently filed a Motion for Partial Summary Judgment based on Section 1, Rule 35 of the 1997 Rules
of Civil Procedure (Rules), claiming that since respondent Chua already admitted the execution of the
promissory notes in favor of PBB amounting to Seventy Five Million Pesos (₱75,000,000.00), 16 insofar as its
cross-claim against him was concerned, there was no genuine issue on any material fact on the issue of his
liability to PBB. PBB argued that although respondent Chua claimed that he signed the promissory notes merely
to persuade John Dennis Chua to pay off his loan to PBB, he was still liable as an accommodation party under
Section 29 of the Negotiable Instruments Law.17
THE RTC’S PARTIAL SUMMARY JUDGMENT
Acting on PBB’s motion, the RTC issued a partial summary judgment on PBB’s cross-claim on July 27, 2005,
finding respondent Chua liable as a signatory to the promissory notes amounting to Seventy-Five Million Pesos
(₱75,000,000.00). The RTC reasoned that by signing as a co-maker, he obligated himself to pay the amount
indicated in the promissory notes, even if he received no consideration in return. Thus, the RTC ordered him to
pay PBB the amount of ₱75,000,000.00, plus interests and costs.18
In its order dated December 16, 2005, the RTC resolved respondent Chua’s Notice of Appeal, as well as PBB’s
Motion to Disallow Appeal and to Issue Execution. Citing Section 1, Rule 41 of the Rules, the RTC ruled that
respondent Chua could not file a notice of appeal. Instead, he should have filed a special civil action
for certiorari under Rule 65 of the Rules. However, since the period for filing a certiorari petition had already
lapsed without respondent filing any petition, the partial summary judgment had become final and executory.
Thus, it ordered the issuance of a writ of execution for the satisfaction of the partial summary judgment in favor
of PBB.19
On December 21, 2005, the RTC issued an order appointing Renato Flora as the special sheriff to implement the
writ of execution. In line with this order, Renato Flora, on December 23, 2005, issued a Notice of Levy and Sale
on Execution of Personal Properties, addressed to respondent Chua. He proceeded with the execution sale, and
on December 28, 2005, he issued a certificate of sale over respondent Chua’s 900 shares of stock in CST in
favor of PBB. He also posted a notice of sheriff’s sale on January 10, 2006 over respondent Chua’s five parcels
of land located in Las Pinas, Pasay City, and Muntinlupa.20
THE COURT OF APPEALS DECISION
Respondent Chua filed a petition for certiorari and mandamus with the CA to challenge: (a) the December 16,
2005 order, granting PBB’s motion to disallow his appeal; (b) the December 21, 2005 order, granting PBB’s
motion to appoint Renato Flora as special sheriff to implement the writ of execution; and (c) the February 16,
2006 order denying his motion for reconsideration and to suspend execution. In essence, respondent Chua
alleged that the RTC acted with grave abuse of discretion in disallowing his appeal of the partial summary
judgment, and in issuing a writ of execution. Significantly, respondent Chua did not question the propriety of
the partial summary judgment.
On February 8, 2007, the CA issued the assailed decision, partly affirming the RTC order dated December 16,
2005 on the matter of the disallowance of respondent Chua’s appeal. The CA held that respondent Chua could
not appeal the partial summary judgment while the main case remained pending, in keeping with Section 1(g),
Rule 41 of the Rules.
However, the CA held that the RTC committed grave abuse of discretion when it issued the writ of execution
against respondent Chua. As found by the CA, the RTC grievously erred when it held that the partial judgment
had become final and executory when respondent Chua failed to avail of the proper remedy of certiorari within
the 60 day reglementary period under Rule 65. Since a partial summary judgment does not finally dispose of the
action, it is merely an interlocutory, not a final, order. Thus, it could not attain finality.
The CA further noted that certiorari is an independent action and not part of the appeal proceedings, and failure
to file a certiorari petition would not result in the finality of the judgment or final order. The RTC, thus,
committed grave abuse of discretion amounting to lack of jurisdiction when it granted the issuance of a writ of
execution, and the corresponding writ of execution issued by the court a quo, as well as the subsequent
implementing proceedings, were void.
THE PETITION
PBB submits two issues for our resolution:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN
APPLYING JURISPRUDENCE NOT ON ALL FOURS [WITH] THE FACTUAL BACKDROP OF
THE CASE.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN

RECALLING AND SETTING ASIDE THE WRIT OF EXECUTION AND ALL THE
PROCEEDINGS TAKEN FOR ITS IMPLEMENTATION ON THE WRONG NOTION THAT THE
PARTIAL SUMMARY JUDGMENT HAS NOT BECOME FINAL AND EXECUTORY.
THE RULING
We DENY the petition for being unmeritorious.
Nature of Partial Summary Judgment
PBB’s motion for partial summary judgment against respondent Chua was based on Section 1, Rule 35 of the
Rules, which provides:
Section 1. Summary Judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-
claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served,
move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any
part thereof.
A summary judgment, or accelerated judgment, is a procedural technique to promptly dispose of cases where
the facts appear undisputed and certain from the pleadings, depositions, admissions and affidavits on record, or
for weeding out sham claims or defenses at an early stage of the litigation to avoid the expense and loss of time
involved in a trial.21 When the pleadings on file show that there are no genuine issues of fact to be tried, the
Rules allow a party to obtain immediate relief by way of summary judgment, that is, when the facts are not in
dispute, the court is allowed to decide the case summarily by applying the law to the material facts.22
The rendition by the court of a summary judgment does not always result in the full adjudication of all the
issues raised in a case. For these instances, Section 4, Rule 35 of the Rules provides:
Section 4. Case not fully adjudicated on motion. – If on motion under this Rule, judgment is not rendered upon
the whole case or for all the reliefs sought and a trial is necessary, the court at the hearing of the motion, by
examining the pleadings and the evidence before it and by interrogating counsel shall ascertain what material
facts exist without substantial controversy and what are actually and in good faith controverted. It shall
thereupon make an order specifying the facts that appear without substantial controversy, including the extent to
which the amount of damages or other relief is not in controversy, and directing such further proceedings in the
action as are just. The facts so specified shall be deemed established, and the trial shall be conducted on the
controverted facts accordingly.
This is what is referred to as a partial summary judgment. A careful reading of this section reveals that a partial
summary judgment was never intended to be considered a "final judgment," as it does not "[put] an end to an
action at law by declaring that the plaintiff either has or has not entitled himself to recover the remedy he sues
for."23 The Rules provide for a partial summary judgment as a means to simplify the trial process by allowing
the court to focus the trial only on the assailed facts, considering as established those facts which are not in
dispute.
After this sifting process, the court is instructed to issue an order, the partial summary judgment, which
specifies the disputed facts that have to be settled in the course of trial. In this way, the partial summary
judgment is more akin to a record of pre-trial,24 an interlocutory order, rather than a final judgment.
The differences between a "final judgment" and an "interlocutory order" are well-established. We said in Denso
(Phils.) Inc. v. Intermediate Appellate Court25 that:
[A] final judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court
in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at the trial,
declares categorically what the rights and obligations of the parties are and which party is in the right; or a
judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once
rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and
liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the
parties' next move . . . and ultimately, of course, to cause the execution of the judgment once it becomes " final"
or, to use the established and more distinctive term, "final and executory."
xxxx
Conversely, an order that does not finally dispose of the case, and does not end the Court's task of adjudicating
the parties' contentions and determining their rights and liabilities as regards each other, but obviously indicates
that other things remain to be done by the Court, is "interlocutory", e.g., an order denying a motion to dismiss
under Rule 16 of the Rules x x x Unlike a 'final judgment or order, which is appealable, as above pointed out, an
'interlocutory order may not be questioned on appeal except only as part of an appeal that may eventually be
taken from the final judgment rendered in the case.26
Bearing in mind these differences, there can be no doubt that the partial summary judgment envisioned by the
Rules is an interlocutory order that was never meant to be treated separately from the main case. As we
explained in Guevarra v. Court of Appeals:27
It will be noted that the judgment in question is a "partial summary judgment." It was rendered only with
respect to the private respondents’ first and second causes of action alleged in their complaint. It was not
intended to cover the other prayers in the said complaint, nor the supplementary counterclaim filed by the
petitioners against the private respondents, nor the third-party complaint filed by the petitioners against the
Security Bank and Trust Company. A partial summary judgment "is not a final or appealable judgment."
(Moran, Vol. 2, 1970 Edition, p. 189, citing several cases.) "It is merely a pre-trial adjudication that said issues
in the case shall be deemed established for the trial of the case." (Francisco, Rules of Court, Vol. II, p. 429.)
xxxx
The partial summary judgment rendered by the trial court being merely interlocutory and not ‘a final judgment’,
it is puerile to discuss whether the same became final and executory due to the alleged failure to appeal said
judgment within the supposed period of appeal. What the rules contemplate is that the appeal from the partial
summary judgment shall be taken together with the judgment that may be rendered in the entire case after a trial
is conducted on the material facts on which a substantial controversy exists. This is on the assumption that the
partial summary judgment was validly rendered, which, as shown above, is not true in the case at bar.28
We reiterated this ruling in the cases of Province of Pangasinan v. Court of Appeals 29 and Government Service
Insurance System v. Philippine Village Hotel, Inc.30
Applicability of Guevarra
PBB asserts that our pronouncement in the cases of Guevarra, Province of Pangasinan, and Government Service
Insurance System cannot be applied to the present case because these cases involve factual circumstances that
are completely different from the facts before us. While the partial summary judgments in the cited cases
decided only some of the causes of action presented, leaving other issues unresolved, PBB insists that as far as
its cross-claim against respondent Chua is concerned, the court a quo’s partial summary judgment is a full and
complete adjudication because the award is for the whole claim. 31 According to PBB, whatever the court
decides as regards the main case, this will not affect the liability of respondent Chua as a solidary debtor in the
promissory notes, since the creditor can proceed against any of the solidary debtors. In other words, no
substantial controversy exists between PBB and respondent Chua, and there is nothing more to be done on this
particular issue.
We do not agree with PBB’s submission.
In the Guevarra case, the Court held that the summary judgment rendered by the lower court was in truth a
partial summary judgment because it failed to resolve the other causes of action in the complaint, as well as the
counterclaim and the third party complaint raised by the defendants.
Contrary to PBB’s assertions, the same could be said for the case presently before us. The partial summary
judgment in question resolved only the cross-claim made by PBB against its co-defendant, respondent Chua,
based on the latter’s admission that he signed promissory notes as a co-maker in favor of PBB. This is obvious
from the dispositive portion of the partial summary judgment, quoted below for convenient reference:
WHEREFORE, a partial summary judgment is hereby rendered on the cross-claim of cross-defendant

Philippine Business Bank against cross-defendant Felipe Chua, ordering the latter to pay the former as follows:
1. The amount of Ten Million (₱10,000,000.00) Pesos, representing the value of the Promissory Note
dated April 17, 2001, plus interest thereof at the rate of 16% from April 12, 2002, until fully paid;
2. The amount of Twelve Million (₱12,000,000.00) Pesos, representing the value of the Promissory
Note dated April 5, 2001, plus interest thereon at the rate of 17% from April 1, 2002, until fully paid;
3. The amount of Twenty Three Million (₱23,000,000.00) Pesos, representing the value of the
Promissory Note dated April 25, 2001, plus interest thereon at the rate of 16% from April 19, 2002, until
fully paid;
4. The amount of Eight Million (₱8,000,000.00) Pesos, representing the value of the Promissory Note
dated June 20, 2001, plus interest thereon at the rate of 17% from June 20, 2001, until fully paid;
5. The amount of Seven Million (₱7,000,000.00) Pesos, representing the value of the Promissory Note
6. The amount of Fifteen Million (₱15,000,000.00) Pesos, representing the value of the Promissory Note
7. Plus cost of suit.
SO ORDERED. 32
Clearly, this partial summary judgment did not dispose of the case as the main issues raised in plaintiff Tomas
Tan’s complaint, i.e., the validity of the secretary’s certificate which authorized John Dennis Chua to take out
loans, and execute promissory notes and mortgages for and on behalf of CST, as well as the validity of the
resultant promissory notes and mortgage executed for and on behalf of CST, remained unresolved.
Chua shares common interest with co-defendant- debtors
Still, PBB insists that the partial summary judgment is a final judgment as regards PBB’s cross-claim against
respondent Chua since respondent Chua’s liability will not be affected by the resolution of the issues of the
main case.
On its face, the promissory notes were executed by John Dennis Chua in two capacities – as the alleged
representative of CST, and in his personal capacity. Thus, while there can be no question as to respondent
Chua’s liability to PBB (since he already admitted to executing these promissory notes as a co-maker), still, the
court a quo’s findings on: (a) whether John Dennis Chua was properly authorized to sign these promissory notes
on behalf of CST, and (b) whether John Dennis Chua actually signed these promissory notes in his personal
capacity, would certainly have the effect of determining whether respondent Chua has the right to go after CST
and/or John Dennis Chua for reimbursement on any payment he makes on these promissory notes, pursuant to
Article 1217 of the Civil Code, which states:
Article 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors only the share which corresponds to each, with the
interest for the payment already made. If the payment is made before the debt is due, no interest for the
intervening period may be demanded.
When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each.
In other words, PBB has a common cause of action against respondent Chua with his alleged co-debtors, John
Dennis Chua and CST, it would simply not be proper to treat respondent Chua separately from his co-debtors.
Moreover, we cannot turn a blind eye to the clear intention of the trial court in rendering a partial summary
judgment. Had the trial court truly intended to treat PBB’s cross-claim against respondent Chua separately, it
could easily have ordered a separate trial via Section 2, Rule 31 of the Rules, which states:
Section 2. Separate trials. – The court, in furtherance of convenience or to avoid prejudice, may order a separate
trial of any claim, cross-claim, counterclaim, or third-party complaint, or of any separate issue or of any number
of claims, cross-claims, counterclaims, third-party complaints or issues.
That the trial court did not do so belies PBB’s contention.
It has also not escaped our attention that PBB, in its Motion to Disallow Appeal and to Issue Execution Against
Cross-Defendant Felipe Chua,33 already admitted that the partial summary judgment is not a judgment or final
order that completely disposes of the case. In its own words:
xxxx
3. However, the remedy availed of by [respondent Chua] is patently erroneous because under Rule 41
Section 1 of the Rules of Court, an appeal may be taken only from a judgment or final order that
completely disposes the case;
4. The judgment rendered by [the RTC] dated July 27, 2005 is only a partial summary judgment against
[respondent Chua], on the crossclaim of cross-claimant Philippine Business Bank. The main case which
involves the claim of plaintiffs against the principal defendants is still pending and has not yet been
adjudged by [the RTC].34
Thus, PBB cannot now be allowed to deny the interlocutory nature of the partial summary judgment.
Certiorari not the proper remedy
PBB also maintains that the partial summary judgment attained finality when respondent Chua failed to file a
certiorari petition, citing the last paragraph of Section 1, Rule 41 of the Rules as basis. We quote:
Section 1. Subject of appeal. – An appeal maybe taken from a judgment or final order that completely disposes
of the case, or of a particular matter therein when declared by these Rules to be appealable.
No appeal may be taken from:
xxxx
(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims,
cross-claims and third party complaints, while the main case is pending, unless the court allows an appeal
therefrom;
xxxx
In all the above instances where the judgment, or final order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65.
Contrary to PBB’s contention, however, certiorari was not the proper recourse for respondent Chua. The
propriety of the summary judgment may be corrected only on appeal or other direct review, not a petition for
certiorari,35 since it imputes error on the lower court’s judgment. It is well-settled that certiorari is not available
to correct errors of procedure or mistakes in the judge’s findings and conclusions of law and fact. 36 As we
explained in Apostol v. Court of Appeals:37
As a legal recourse, the special civil action of certiorari is a limited form of review. The jurisdiction of this
Court is narrow in scope; it is restricted to resolving errors of jurisdiction, not errors of judgment. Indeed, as
long as the courts below act within their jurisdiction, alleged errors committed in the exercise of their discretion
will amount to mere errors of judgment correctable by an appeal or a petition for review.38
In light of these findings, we affirm the CA’s ruling that the partial summary judgment is an interlocutory order
which could not become a final and executory judgment, notwithstanding respondent Chua’s failure to file a
certiorari petition to challenge the judgment. Accordingly, the RTC grievously erred when it issued the writ of
execution against respondent Chua.
In view of this conclusion, we find it unnecessary to resolve the issue raised by respondent Chua on the validity
of the RTC’s appointment of a special sheriff for the implementation of the execution writ.
Propriety of Summary Judgment Reserved for Appeal
As a final point, we note that respondent Chua has raised with this Court the issue of the propriety of the partial
summary judgment issued by the RTC. Notably, respondent Chua never raised this issue in his petition for
certiorari before the CA. It is well settled that no question will be entertained on appeal unless it has been raised
in the proceedings below.39 Basic considerations of due process impel the adoption of this rule.40
Furthermore, this issue would be better resolved in the proper appeal, to be taken by the parties once the court a
quo has completely resolved all the issues involved in the present case in a final judgment.1avvphi1 If we were
to resolve this issue now, we would be preempting the CA, which has primary jurisdiction over this issue.
Lastly, taking jurisdiction over this issue now would only result in multiple appeals from a single case which
concerns the same, or integrated, causes of action. As we said in Santos v. People:41
Another recognized reason of the law in permitting appeal only from a final order or judgment, and not from an
interlocutory or incidental one, is to avoid multiplicity of appeals in a single action, which must necessarily
suspend the hearing and decision on the merits of the case during the pendency of the appeal. If such appeal
were allowed, the trial on the merits of the case would necessarily be delayed for a considerable length of time,
and compel the adverse party to incur unnecessary expenses, for one of the parties may interpose as many
appeals as incidental questions may be raised by him, and interlocutory orders rendered or issued by the lower
court.
WHEREFORE, premises considered, we DENY the petition for lack of merit and AFFIRM the Decision of the
Court of Appeals in CA-G.R. SP No. 94883 dated February 8, 2007, as well as its Resolution dated July 18,
2007. Costs against the petitioner, Philippine Business Bank.
3. Province of Pangasinan vs. CA March 31, 1993, GR No. 104266
SECOND DIVISION
[G.R. No. 104266. March 31, 1993.]
PROVINCE OF PANGASINAN and RAFAEL M. COLET, Petitioners, v. THE COURT OF APPEALS,

THE REGIONAL TRIAL COURT, QUEZON CITY, BRANCH 80, ROGELlO R. COQUIAL and THE
SHERIFF AND/OR DEPUTY SHERIFF OF RESPONDENT REGIONAL TRIAL
COURT, Respondents.
Manuel F. Manuel and Armando Mislang, for Petitioners.
Flarante A. Miano for Respondents.
SYLLABUS
1. REMEDIAL LAW; PARTIAL SUMMARY JUDGMENT; NATURE; MERELY INTERLOCUTORY. —

We were categorical in the case of Guevarra, Et Al., v. Court of Appeals, Et Al., 124 SCRA 297 (1983), that a
partial summary judgment is merely interlocutory and not a final judgment. Its nature is specifically provided
for in Section 4 of Rule 34 of the Rules of Court, which read: "SEC. 4. Case not fully adjudicated on motion. —
If on motion under this rule, judgment is not rendered upon the whole case or for all the relief asked and a trial
is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and
by interrogating counsel shall ascertain what material facts exist without substantial controversy and what
material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts
that appear without substantial controversy, including the extent to which the amount of damages or other relief
is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action
the facts so specified shall be deemed established, and the trial shall be conducted accordingly."cralaw
virtua1aw library
2. ID.; ID.; APPEAL THEREFROM TAKEN UP TOGETHER WITH JUDGMENT RENDERED AFTER
TRIAL ON THE MERITS. — What Rule 34 contemplates is that the appeal from the partial summary
judgment shall be taken together with the judgment that may be rendered in the entire case after a trial is
conducted on the material facts on which a substantial controversy exists. The trial court and the respondent
court erroneously relied on Section 5 of Rule 36 of the Rules of Court, which pertains to judgments in general.
In addition, inasmuch as a partial summary judgment does not finally dispose of the action, execution thereof
shall not issue, conformably with Section 1 of Rule 39 of the Rules of Court.
DECISION
NOCON, J.:
This is a petition for review on certiorari seeking reversal of the decision of public respondent Court of Appeals
1 dated December 6, 1991 in CA-G.R. SP Case No. 26149; and its resolution dated February 15, 1992.
We shall narrate only the relevant antecedent facts:chanrob1es virtual 1aw library
On April 27,1990, private respondent Rogelio R. Coquial filed a complaint 2 against petitioners Province of
Pangasinan and Provincial Governor Rafael M. Colet before the Regional Trial Court of Quezon City, docketed
as Civil Case No. 0-90-5337. He alleged therein the following: 1) they entered into a contract for the
improvement of 6.492 kilometers of the Urdaneta-Mapandan Road, Phase I and Phase 11, for a total
consideration of P5,169,932.10; 2) upon 100% completion of Phase I, it was accepted by petitioners and in
accordance with the report of the auditors, private respondent should be paid P3,174,053.20; 3) petitioners had
paid only P1,320,000.00 leaving a balance of P1,854,083.20, which petitioners refused to pay; and 4) he has
also completed 60% of Phase II which costs P1,000,000.00 but petitioners, who have decided not to pursue the
project, refused to pay. He, therefore, prayed for the payment of said amounts, including monetary awards for
damages and attorney’s fees.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
On December 19, 1990, private respondent filed a motion for partial summary judgment on the balance of
P1,854,083.20.
On April 24,1991, the trial court granted the motion filed by private Respondent. The dispositive portion of its
resolution reads:jgc:chanrobles.com.ph
"WHEREFORE, summary partial judgment of Phase I is hereby rendered in favor of the plaintiff as against the
defendants, ordering the defendants to pay plaintiff the sum of P1,854,083.20 representing the unpaid remaining
balance of the Contract of Cost of Phase I.
SO ORDERED." 3
At the hearing on April 26, 1991, the counsel of petitioners received a copy of the resolution. He asked the trial
court for a ten (10) day extension from April 26, 1991, within which to file a motion for reconsideration. Instead
of ten (10) days, the trial court granted him twenty (20) days, or until May 16, 1991.
On May 16,1991, the counsel of petitioners filed an urgent ex parte motion for extension of time to file the
motion for reconsideration, for an additional ten (10) days, or until May 26, 1991. The motion was granted by
the trial court.
On May 27, 1991, petitioners filed the motion for reconsideration, contending that since May 26, 1991 was a
Sunday, the filing of the motion on the following day was still on time.
On July 15, 1991, the trial court issued an order denying the motion, a copy of which was received by
petitioners on August 5, 1991. On July 26, 1991, private respondent filed a motion for execution of the partial
summary judgment. On August 28, 1991, petitioners filed a notice of appeal.
In the trial court’s order dated September 3, 1991, it denied due course to the notice of appeal on the ground that
it should have been filed not later than May 11, 1991 and pursuant to Section 5, Rule 36 of the Rules of Court, 4
its resolution dated April 24, 1991 has become final and executory. In the same order, it granted the motion for
execution. 5
On September 10, 1991, the trial court issued the writ of execution. 6 On September 30, 1991, it ordered the
garnishment of petitioners’ bank account. 7
Petitioners then filed a petition for certiorari before public respondent Court of Appeals to nullify the trial
court’s order dated September 3, 1991 and the writ of execution; and mandamus to compel the trial court to give
due course to the appeal interposed by them.
On December 6, 1991, the respondent court denied the petition for certiorari and mandamus rationalizing, as
follows:jgc:chanrobles.com.ph
"The petition cannot prosper. In the first place, the rule enunciated in the en banc resolution of the Supreme
Court, promulgated on May 30, 1986, proscribes the filing of a motion for extension of time to file a motion for
reconsideration either with the Metropolitan or Municipal Trial Courts, Regional Trial Courts, or this Court.
[See Bayaca v. Intermediate Appellate Court, No. L-74824, 144 SCRA 161, 163 (1986) citing Habaluyas
Enterprises, Inc. v. Japson, No. L-70895, 138 SCRA 46, 48 (1985). In the case at bar the filing of such a (sic)
motion for extension by Pangasinan did not interrupt the period of appeal. Thus, as of May 16 (sic), 1991, i.e.,
the last day within which Pangasinan should have filed its motion for reconsideration, the summary partial
judgment in question became final and executory. The fact that Pangasinan filed its motion for extension of
time to file a motion for reconsideration on that day was of no moment since, for the reason already stated
above, such motion for extension was void.
Furthermore, even on the assumption that the final resolution sought to be appealed from or, to be enforced, is a
partial judgment where multiple appeals are allowed and the period of appeal is 30 days as provided for in Sec.
19(b) of the Interim Rules promulgated on January 11, 1983 by the Supreme Court, still the partial judgment in
question had also become final and executory at the time the notice of appeal was filed for failure of Pangasinan
to file its record on appeal as required by the aforesaid provisions of the Interim Rules. Thus, without a record
on appeal, it is as though no appeal had been taken from such judgment at all." 8
On December 19, 1991, petitioners filed an urgent motion for reconsideration based on the ground that the trial
court’s resolution dated April 24, 1991 is merely interlocutory, citing the case of Guevarra, Et. Al. v. Court of
Appeals, Et. Al. 9 They elucidated that this ground was the subject of their addendum dated December 11,
1991, which unknown to them, was prepared and filed after the decision of the respondent court was rendered.
They, therefore prayed, inter alia, that the respondent court reconsider its decision and render another
confirming that the April 24, 1991 resolution of the trial court is interlocutory and declaring void the writ of
execution and order of garnishment.
On February 18, 1992, the motion for reconsideration was denied after the respondent court found "no cogent
reason to change, modify and/or otherwise reverse the decision considering that not only does the motion
reiterate the same arguments advanced before and does not present any matter not already considered and
resolved in the decision, but also the private respondent’s opposition has successfully refuted petitioners’
arguments in said motion." 10
Hence, the present petition, wherein petitioners again invoke Our ruling in Guevarra, Et. Al. v. Court of
Appeals, Et Al., supra.
Petitioners are correct.
We were categorical in the case of Guevarra, Et. Al. v. Court of Appeals, Et Al., supra, that a partial summary
judgment is merely interlocutory and not a final judgment. Its nature is specifically provided for in Section 4 of
Rule 34 of the Rules of Court, which reads:jgc:chanrobles.com.ph
"SEC. 4. Case not fully adjudicated on motion. — If on motion under this rule, judgment is not rendered upon
the whole case or for all the relief asked and a trial is necessary, the court at the hearing of the motion, by
facts exist without substantial controversy and what material facts are actually and in good faith controverted. It
shall thereupon make an order specifying the facts that appear without substantial controversy, including the
extent to which the amount of damages or other relief is not in controversy, and directing such further
proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed
established, and the trial shall be conducted accordingly."cralaw virtua1aw library
What Rule 34 contemplates is that the appeal from the partial summary judgment shall be taken together with
the judgment that may be rendered in the entire case after a trial is conducted on the material facts on which a
substantial controversy exists. The trial court and the respondent court erroneously relied on Section 5 of Rule
36 of the Rules of Court, which pertains to judgments in general.chanrobles law library : red
shall not issue, conformably with Section 1 of Rule 39 of the Rules of Court.
WHEREFORE, the petition is hereby GRANTED. The questioned decision and resolution of the Court of
Appeals are SET ASIDE. The trial court’s orders dated September 3, 10 and 30, 1991 are likewise SET ASIDE.
SO ORDERED.
4. Shimizu Phil Contractors vs. Magsalin GR No. 170026, June 20, 2012
G.R. No. 170026 June 20, 2012
SHIMIZU PHILIPPINES CONTRACTORS, INC., Petitioner,

vs.
MRS. LETICIA B. MAGSALIN, doing business under the trade name "KAREN'S TRADING," FGU
INSURANCE CORPORATION, GODOFREDO GARCIA, CONCORDIA GARCIA, and REYNALDO
BAETIONG, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by Shimizu Philippines Contractors, Inc. (petitioner) to
challenge the twin resolutions of the Court of Appeals (CA)2 in CA-G.R. CV No. 83096 which dismissed the
appeal of the petitioner on the ground of lack of jurisdiction 3 and denied the petitioner’s subsequent motion for
reconsideration.4 The appeal in CA-G.R. CV No. 83096 had sought to nullify the December 16, 2003 order 5 of
the Regional Trial Court (RTC) dismissing the petitioner’s complaint for sum of money and damages on the
ground of non prosequitur.
The Antecedents
The antecedent facts of the petition before us are not disputed.
An alleged breach of contract was the initial event that led to the present petition. The petitioner claims that one
Leticia Magsalin, doing business as "Karen’s Trading," had breached their subcontract agreement for the
supply, delivery, installation, and finishing of parquet tiles for certain floors in the petitioner’s Makati City
condominium project called "The Regency at Salcedo." The breach triggered the agreement’s termination.
When Magsalin also refused to return the petitioner’s unliquidated advance payment and to account for other
monetary liabilities despite demand, the petitioner sent a notice to respondent FGU Insurance Corporation
(FGU Insurance) demanding damages pursuant to the surety and performance bonds the former had issued for
the subcontract.
On April 30, 2002, the petitioner filed a complaint docketed as Civil Case No. 02-488 against both Magsalin
and FGU Insurance. It was raffled to Branch 61 of the RTC of Makati City. The complaint sought Two Million
Three Hundred Twenty-Nine Thousand One Hundred Twenty Four Pesos and Sixty Centavos (₱2,329,124.60)
as actual damages for the breach of contract.
FGU Insurance was duly served with summons. With respect to Magsalin, however, the corresponding officer’s
return declared that both she and "Karen’s Trading" could not be located at their given addresses, and that
despite further efforts, their new addresses could not be determined.
In August 2002, FGU Insurance filed a motion to dismiss the complaint. The petitioner filed its opposition to
the motion. The motion to dismiss was denied as well as the ensuing motion for reconsideration, and FGU
Insurance was obliged to file an answer.
In October 2002, in an effort to assist the RTC in acquiring jurisdiction over Magsalin, the petitioner filed a
motion for leave to serve summons on respondent Magsalin by way of publication. In January 2003, the
petitioner filed its reply to FGU Insurance’s answer.
In February 2003, FGU Insurance filed a motion for leave of court to file a third-party complaint. Attached to
the motion was the subject complaint,6 with Reynaldo Baetiong, Godofredo Garcia and Concordia Garcia
named as third-party defendants. FGU Insurance claims that the three had executed counter-guaranties over the
surety and performance bonds it executed for the subcontract with Magsalin and, hence, should be held jointly
and severally liable in the event it is held liable in Civil Case No. 02-488.
The RTC admitted the third-party complaint and denied the motion to serve summons by publication on the
ground that the action against respondent Magsalin was in personam.
In May 2003, the RTC issued a notice setting the case for hearing on June 20, 2003. FGU Insurance filed a
motion to cancel the hearing on the ground that the third-party defendants had not yet filed their answer. The
motion was granted.
In June 2003, Baetiong filed his answer to the third-party complaint. He denied any personal knowledge about
the surety and performance bonds for the subcontract with Magsalin. 7 Of the three (3) persons named as third-
party defendants, only Baetiong filed an answer to the third-party complaint; the officer’s returns on the
summons to the Garcias state that both could not be located at their given addresses. Incidentally, the petitioner
claims, and Baetiong does not dispute, that it was not served with a copy of Baetiong’s answer. The petitioner
now argues before us that FGU Insurance, which is the plaintiff in the third-party complaint, had failed to exert
efforts to serve summons on the Garcias. It suggests that a motion to serve summons by publication should have
been filed for this purpose. The petitioner also asserts that the RTC should have scheduled a hearing to
determine the status of the summons to the third-party defendants.8
The Order Of Dismissal
With the above procedural events presented by both parties as the only backdrop, on December 16, 2003 the
RTC issued a tersely worded order9 dismissing Civil Case No. 02-488. For clarity, we quote the dismissal order
in full:
ORDER
For failure of [petitioner] to prosecute, the case is hereby DISMISSED.
SO ORDERED.
The RTC denied the petitioner’s motion for reconsideration, 10 prompting the latter to elevate its case to the CA
via a Rule 41 petition for review.11
The Ruling of the Appellate Court
FGU Insurance moved for the dismissal of the appeal on the ground of lack of jurisdiction. It argued that the
appeal raised a pure question of law as it did not dispute the proceedings before the issuance of the December
16, 2003 dismissal order.
The petitioner, on the other hand, insisted that it had raised questions of fact in the appeal.12 Thus -
While, the instant appeal does not involve the merits of the case, the same involves questions of fact based on
the records of the case. It must be emphasized that the lower court’s dismissal of the case based on alleged
failure to prosecute on the part of plaintiff-appellant was too sudden and precipitate. This being the case, the
facts [sic] to be determined is whether based on the records of the case, was there a definite inaction on the part
of plaintiff-appellant? A careful examination of all pleadings filed as well as the orders of the lower court vis-à-
vis the rules should now be made in order to determine whether there was indeed a "failure to prosecute" on the
part of plaintiff-appellant[.]13 (emphases supplied)
The CA agreed with FGU Insurance and dismissed the appeal, and denied as well the subsequent motion for
reconsideration.14 The petitioner thus filed the present petition for review on certiorari.
The Present Petition
The petitioner pleads five (5) grounds to reverse the CA’s resolutions and to reinstate Civil Case No. 02-488. In
an effort perhaps to make sense of the dismissal of the case (considering that the trial court had not stated the
facts that justify it), the petitioner draws this Court’s attention to certain facts and issues that we find to be of
little materiality to the disposition of this petition:
Grounds/ Statement of Matters Involved
I. The Appellate Court has jurisdiction to determine the merits of the Appeal as the matters therein
involve both questions of law and fact.
II. The lower court erred in declaring that petitioner failed to prosecute the case despite the fact that
petitioner never received a copy of the Answer of Third-party defendant-respondent Reynaldo Baetiong.
III. The lower court erred in declaring that petitioner failed to prosecute the case despite the fact that
there is no joinder of indispensable parties and issues yet because defendant-respondent Leticia B.
Magsalin as well as third-party defendant-respondents Godofredo and Concordia Garcia’s whereabouts
were unknown, hence no service yet on them of the copy of the summons and complaint with annexes[.]
IV. The lower court erred in declaring that Petitioner failed to prosecute the case despite the fact that it
was party respondent FGU which caused the cancellation of the hearing.
V. It is evident that the lower court’s dismissal of the case is a clear denial of due process.15
In our Resolution dated February 13, 2006,16 we required the respondents to comment. FGU Insurance’s
comment17 alleges that the present petition is "fatally defective" for being unaccompanied by material portions
of the record. It reiterates that the appeal in CA-G.R. CV No. 83096 was improperly filed under Rule 41 and
should have been filed directly with this Court under Rule 45 of the Rules of Court. Baetiong, in his
comment,18 asserts that the dismissal of the appeal was in accord with existing laws and applicable
jurisprudence.
The Ruling Of The Court
Preliminarily, we resolve the claim that the petition violates Rule 45 of the Rules of Court on the attachment of
material portions of the record. We note that FGU Insurance fails to discharge its burden of proving this claim
by not specifying the material portions of the record the petitioner should have attached to the petition. At any
rate, after a careful perusal of the petition and its attachments, the Court finds the petition to be sufficient. In
other words, we can judiciously assess and resolve the present petition on the basis of its allegations and
attachments.
After due consideration, we resolve to grant the petition on the ground that the December 16, 2003
dismissal order is null and void for violation of due process. We are also convinced that the appeal to challenge
the dismissal order was properly filed under Rule 41 of the Rules of Court. We further find that the dismissal of
Civil Case No. 02-488 for failure to prosecute is not supported by facts, as shown by the records of the case.
The Dismissal Order is Void
The nullity of the dismissal order is patent on its face. It simply states its conclusion that the case should be
dismissed for non prosequitur, a legal conclusion, but does not state the facts on which this conclusion is based.
Dismissals of actions for failure of the plaintiff to prosecute is authorized under Section 3, Rule 17 of the Rules
of Court. A plain examination of the December 16, 2003 dismissal order shows that it is an unqualified order
and, as such, is deemed to be a dismissal with prejudice. "Dismissals of actions (under Section 3) which do not
expressly state whether they are with or without prejudice are held to be with prejudice[.]" 19 As a prejudicial
dismissal, the December 16, 2003 dismissal order is also deemed to be a judgment on the merits so that the
petitioner’s complaint in Civil Case No. 02-488 can no longer be refiled on the principle of res judicata.
Procedurally, when a complaint is dismissed for failure to prosecute and the dismissal is unqualified, the
dismissal has the effect of an adjudication on the merits.20
As an adjudication on the merits, it is imperative that the dismissal order conform with Section 1, Rule 36 of the
Rules of Court on the writing of valid judgments and final orders. The rule states:
RULE 36
Judgments, Final Orders and Entry Thereof
Section 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of the
case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and
the law on which it is based, signed by him, and filed with the clerk of the court.
The December 16, 2003 dismissal order clearly violates this rule for its failure to disclose how and why the
petitioner failed to prosecute its complaint. Thus, neither the petitioner nor the reviewing court is able to know
the particular facts that had prompted the prejudicial dismissal. Had the petitioner perhaps failed to appear at a
scheduled trial date? Had it failed to take appropriate actions for the active prosecution of its complaint for an
unreasonable length of time? Had it failed to comply with the rules or any order of the trial court? The
December 16, 2003 dismissal order does not say.
We have in the past admonished trial courts against issuing dismissal orders similar to that appealed in CA-G.R.
CV No. 83096. A trial court should always specify the reasons for a complaint’s dismissal so that on appeal, the
reviewing court can readily determine the prima facie justification for the dismissal.21 A decision that does not
clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark and is
especially prejudicial to the losing party who is unable to point the assigned error in seeking a review by a
higher tribunal.22
We thus agree with the petitioner that the dismissal of Civil Case No. 02-488 constituted a denial of due
process. Elementary due process demands that the parties to a litigation be given information on how the case
was decided, as well as an explanation of the factual and legal reasons that led to the conclusions of the
court.23 Where the reasons are absent, a decision (such as the December 16, 2003 dismissal order) has absolutely
nothing to support it and is thus a nullity.24
For this same reason, we are not moved by respondent FGU Insurance’s statement that the disposition of the
present petition must be limited to the issue of whether the CA had correctly dismissed the appeal in CA-G.R.
CV No. 83096.25 This statement implies that we cannot properly look into the validity of the December 16, 2003
dismissal order in this Rule 45 petition. A void decision, however, is open to collateral attack. While we note
that the validity of the dismissal order with respect to Section 1, Rule 36 of the Rules of Court was never raised
by the petitioner as an issue in the present petition, the Supreme Court is vested with ample authority to review
an unassigned error if it finds that consideration and resolution are indispensable or necessary in arriving at a
just decision in an appeal.26 In this case, the interests of substantial justice warrant the review of an obviously
void dismissal order.
The appeal was properly filed

under Rule 41 of the Rules of Court
While the nullity of the December 16, 2003 dismissal order constitutes the ratio decidendi for this petition, we
nevertheless rule on the contention that the appeal was erroneously filed.27
In dismissing the appeal, the CA relied on the premise that since the facts presented in the petitioner’s appeal
were admitted and not disputed, the appeal must thereby raise a pure question of law proscribed in an ordinary
appeal. This premise was effectively the legal principle articulated in the case of Joaquin v. Navarro,28 cited by
the CA in its April 8, 2005 resolution. Respondent FGU Insurance thus contends that the proper remedy to
assail the dismissal of Civil Case No. 02-488 was an appeal filed under Rule 45 of the Rules of Court.
The reliance on Joaquin is misplaced as it is based on the conclusion the appellate court made in its April 8,
2005 resolution — i.e., that the pleading of undisputed facts is equivalent to a prohibited appeal. The reliance is
inattentive to both the averments of the subject appeal and to the text of the cited case. The operative legal
principle in Joaquin is this: "[W]here a case is submitted upon an agreement of facts, or where all the facts are
stated in the judgment and the issue is the correctness of the conclusions drawn therefrom, the question is one
of law which [is properly subject to the review of this Court.]" 29 In this case, as already pointed out above, the
facts supposedly supporting the trial court’s conclusion of non prosequitur were not stated in the judgment.
This defeats the application of Joaquin.
At any rate, we believe that the filing of the appeal in CA-G.R. CV No. 83096 under Rule 41 of the Rules of
Court was proper as it necessarily involved questions of fact.
An authority material to this case is the case of Olave v. Mistas.30 Directly addressed in Olave was the CA’s
jurisdiction over an ordinary appeal supported by undisputed facts and seeking the review of a prejudicial order
of dismissal. In this case, a complaint was filed before the RTC in Lipa City to nullify an instrument titled
"Affidavit of Adjudication By The Heirs of the Estate of Deceased Persons With Sale." The RTC dismissed the
complaint, with prejudice, after the plaintiffs had moved to set the case for pre-trial only after more than three
(3) months had lapsed from the service and filing of the last pleading in the case. The plaintiffs thereafter went
to the CA on a Rule 41 petition, contending, among others, that the trial court had erred and abused its
discretion. As in the present case, the defendants moved to dismiss the appeal on the ground that the issues
therein were legal; they pointed out that the circumstances on record were admitted. 31 They argued that the
proper remedy was a petition for review on certiorari under Rule 45 of the Rules of Court.
The CA denied the motion and entertained the appeal. It rendered a decision reinstating the complaint on the
ground that there was no evidence on record that the plaintiffs had deliberately failed to prosecute their
complaint.
When the case was elevated to this court on a Rule 45 petition, we squarely addressed the propriety of the
plaintiffs’ appeal. Though mindful that the circumstances pleaded in the appeal were all admitted, we
categorically held in Olave that the appeal was correctly filed. We observed that despite undisputed records, the
CA, in its review, still had to respond to factual questions such as the length of time between the plaintiffs’
receipt of the last pleading filed up to the time they moved to set the case for pre-trial, whether there had been
any manifest intention on the plaintiffs’ part not to comply with the Rules of Court, and whether the plaintiffs’
counsel was negligent.
Significantly, in Olave, we agreed with the plaintiffs that among the critical factual questions was whether,
based on the records, there had been factual basis for the dismissal of the subject complaint. This same question
is particularly significant in the present case given that the order appealed from in CA-G.R. CV No. 83096 does
not even indicate the factual basis for the dismissal of Civil Case No. 02-488. Due to the absence of any stated
factual basis, and despite the admissions of the parties, the CA, in CA-G.R. CV No. 83096, still had to delve
into the records to check whether facts to justify the prejudicial dismissal even exist. Since the dismissal of
Civil Case No. 02-488 appears to have been rendered motu proprio (as the December 16, 2003 dismissal order
does not state if it was issued upon the respondents’ or the trial court’s motion), the facts to be determined by
the CA should include the grounds specified under Section 3, Rule 17 of the Rules of Court. A court could only
issue a motu proprio dismissal pursuant to the grounds mentioned in this rule and for lack of jurisdiction over
the subject matter.32 These grounds are matters of facts. Thus, given that the dismissal order does not disclose its
factual basis, we are thus persuaded that the petitioner had properly filed its appeal from the dismissal order
under Rule 41 of the Rules of Court.
The Dismissal of Civil Case No. 02-488 is not Supported by the Facts of the Case
We also find that the dismissal of Civil Case No. 02-488 is not warranted. Based on available records and on the
averments of the parties, the following events were chronologically proximate to the dismissal of Civil Case No.
02-488: (a) on March 24, 2003, the court admitted FGU Insurance’s third-party complaint; (b) the trial court
cancelled the June 20, 2003 hearing upon FGU Insurance’s motion; and (c) on June 16, 2003, Baetiong filed
his Answer to the third-party complaint but did not serve it upon the petitioner.
None of these events square with the grounds specified by Section 3, Rule 17 of the Rules of Court for the motu
proprio dismissal of a case for failure to prosecute. These grounds are as follows:
(a) Failure of the plaintiff, without justifiable reasons, to appear on the date of the presentation of his
evidence in chief;
(b) Failure of the plaintiff to prosecute his action for an unreasonable length of time;
(c) Failure of the plaintiff to comply with the Rules of Court; or
(d) Failure of the plaintiff to obey any order of the court.
In our view, the developments in the present case do not satisfy the stringent standards set in law and
jurisprudence for a non prosequitur.33 The fundamental test for non prosequitur is whether, under the
circumstances, the plaintiff is chargeable with want of due diligence in failing to proceed with reasonable
promptitude.34 There must be unwillingness on the part of the plaintiff to prosecute.35
In this case, the parties’ own narrations of facts demonstrate the petitioner’s willingness to prosecute its
complaint.1âwphi1 Indeed, neither respondents FGU Insurance nor Baetiong was able to point to any specific
act committed by the petitioner to justify the dismissal of their case.
While it is discretionary on the trial court to dismiss cases, dismissals of actions should be made with care. The
repressive or restraining effect of the rule amounting to adjudication upon the merits may cut short a case even
before it is fully litigated; a ruling of dismissal may forever bar a litigant from pursuing judicial relief under the
same cause of action. Hence, sound discretion demands vigilance in duly recognizing the circumstances
surrounding the case to the end that technicality shall not prevail over substantial justice.36
This court is thus of the opinion that the dismissal of Civil Case No. 02-488 is not warranted. Neither facts, law
or jurisprudence supports the RTC’s finding of failure to prosecute on the part of the petitioner.
Wherefore, premises considered, the instant petition is Granted. The resolutions of the Court of Appeals dated
April 8, 2005 and October 4, 2005 are REVERSED and SET ASIDE. The order dated December 16, 2003 of
the Regional Trial Court, Branch 61, Makati City, in Civil Case No. 02-488 is declared NULL and VOID, and
the petitioner’s complaint therein is ordered REINSTATED for further proceedings. No costs.
SO ORDERED.
5. PNB vs. Entapa; G.R. No. 215072, September 07, 2016
G.R. No. 215072, September 07, 2016
PHILIPPINE NATIONAL BANK, Petitioner, v. HEIRS OF THE LATE IRENEO AND CARIDAD

ENTAPA, NAMELY: ROSARIO ENTAPA-ORPEZA, JULIANNE E. HAMM, 1 CERINA G. ENTAPA,
WINSTON G. ENTAPA (DECEASED) REPRESENTED BY HIS SPOUSE, NINFA LAMISTOZA-
ENTAPA, FRANKLIN G. ENTAPA, MARINA E. SCHACHT, AND ELVIRA G. ENTAPA, Respondents.
DECISION
LEONEN, J.:
The Constitution requires that a court must state the factual and legal grounds on which its decisions are based.
Any decision that fails to adhere to this mandate is void.
The Philippine National Bank, through a Petition for Review on Certiorari, 2 assails the Decision3 dated June 4,
2013 and Resolution4 dated October 2, 2014 of the Court of Appeals, which nullified the Decision 5 of Branch
54 of the Regional Trial Court of Bacolod City. The Court of Appeals nullified the Regional Trial Court
Decision for failing to state the facts and law on which it was based. 6chanrobleslaw
On December 5, 1973, Caridad Entapa (Entapa) and her children, Julianna E. Hamm and Winston Entapa,
executed a Special Power of Attorney authorizing Joseph Gonzaga (Gonzaga) to enter into legal transactions on
their behalf.7chanrobleslaw
Entapa owned Lot No. 2665 with an area of 16.067 hectares and covered by Original Certificate of Title No. P-
6497.8 On January 3, 1974,9 Gonzaga executed a real estate mortgage over Lot No. 2665 in favor of the
Philippine National Bank to guarantee his loan of P30,600.00. 10chanrobleslaw
Gonzaga failed to pay the loan.11 The property was foreclosed and was sold at a public auction. The Philippine
National Bank emerged as the winning bidder.12 A Certificate of Sale was issued in the bank's favor on
December 29, 1983.13chanrobleslaw
Entapa's other heirs had no knowledge of Gonzaga's Special Power of Attorney. They learned of the foreclosure
sale only after the public auction.14chanrobleslaw
Rosario Entapa Orpeza (Orpeza), representing Entapa's other heirs, went to the Philippine National Bank at
Lacson Street, Bacolod City to ask about the repurchase of the property. 15 Despite knowledge that the property
had already been foreclosed, she wrote a letter dated March 15, 1995 to Raul Topacio, Assistant Vice President
and Branch Manager, requesting a restructuring and recomputation of Gonzaga's loan in accordance with the
guidelines of Republic Act No. 7202.16chanrobleslaw
On May 2, 1996, the Philippine National Bank informed Orpeza that its Branch Credit Committee approved her
request and stated the terms and conditions of the Thirteen-Year Plan of Payment. 17 Two (2) of the seven (7)
conditions were to deposit 20% of the total recomputed amount and to pay the arrears of the realty taxes on the
property.18chanrobleslaw
In compliance, Orpeza sent a bank transfer of 9,797 German Deutschmark equivalent to P178,336.19, 20% of
the recomputed amount.19 She also paid the realty taxes on the property. 20chanrobleslaw
Orpeza alleged that after she deposited the amount, she discovered that five (5) families were already residing
and planting crops on Lot No. 2665, by virtue of Certificates of Land Ownership (CLOA) issued by the
Department of Agrarian Reform.21 She went to the Philippine National Bank to ask for an explanation and to
request the bank to file a case to annul the CLOAs. 22 The bank did not offer an explanation but only issued a
certification declaring that according to their records, there had been no transfer of Lot No. 2665 to the
Department of Agrarian Reform.23chanrobleslaw
Orpeza went to the Department of Agrarian Reform, where she was able to secure copies of the Deed of Sale,
Deed of Transfer, and Voluntary Offer of Sale of Lot No. 2665 by the Philippine National Bank to the
Department of Agrarian Reform.24 Moreover, she was informed by Assistant Regional Director Homer Tobias
that Lot No. 2665 was already covered by the Comprehensive Agrarian Reform Program, and CLOAs had been
issued according to the law.25cralawred He also explained that the lot was voluntarily offered for
Comprehensive Agrarian Reform Program coverage by Philippine National Bank on September 30,
1989.26chanrobleslaw
As a result, Orpeza demanded the return of the downpayment she made with the Philippine National Bank and
asked for the annulment of the CLOAs.27 "[The Philippine National Bank] did not take any action." 28 As the
bank still refused to refund the amount despite demand, Orpeza and her siblings instituted a complaint for
collection of sum of money against the Philippine National Bank on October 5, 1998. 29chanrobleslaw
In its defense, the Philippine National Bank insisted that before it approved Orpeza's request for restructuring
and recomputation, it verified that Lot No. 2665 was not included in the transfer of properties to the Department
of Agrarian Reform.30 It also alleged that when Lot No. 2665 was offered to the Department of Agrarian
Reform on September 30, 1989, it had no knowledge nor information as to the status of its application as it had
not received any payment from the Land Bank of the Philippines.31chanrobleslaw
The Philippine National Bank alleged that while there was a Voluntary Offer to Sell Lot No. 2665, it did not
acquire a record of the Voluntary Offer to Sell until 1998 and only came to know of the existence of the CLOAs
when Orpeza informed its officers.32chanrobleslaw
On April 31, 2006, the Regional Trial Court of Bacolod City ordered the Philippine National Bank to return the
initial downpayment of P178,336.10, realty taxes of P56,421.30, exemplary damages at P50,000.00, moral
damages at P50,000.00, and attorney's fees of 15% of the amount due, with legal interest. 33chanrobleslaw
The Regional Trial Court Decision reads:ChanRoblesVirtualawlibrary
This is a case for collection of sum of money with claims for damages, instituted by the heirs of Ireneo and
Caridad Entapa, namely: Rosario Entapa-Oropeza [sic], Julianna E. Warn, Cerina G. Entapa, Winston G.
Entapa represented . . . by his Spouse Ninfa Lamistoza-Entapa, Franklin G. Entapa, Marina E. Schacht and
Elvira Entapa.
Ireneo Entapa, deceased, died on December 7, 1967 in the city of Bago, survived by his widow, Caridad Entapa
and legitimate children herein before named. Ireneo Entapa was the registered owner of two parcels of lands
located in Barangay Ilijan, City of Bago, denominated as Lot No. 2664 covered by TCT No. T- and Lot No.
2666 covered by TCT No. T-[sic]. The wife and widow, Caridad Entapa, now deceased was also a registered
owner of Lot No. 2665, covered by TCT OCT No. R-6497.
When Ireneo Entapa died, the lands devolved upon his heirs, the surviving wife, Caridad Entapa, and their
children.
During the lifetime of the wife, Caridad Entapa, together with the children: namely, Juliana E. Ham and
Winston Entapa as heirs-owners of the aforementioned lots, executed a Special Power of Attorney in favor of
Joseph Gonzaga, to mortgage the lot to banking institutions.
Joseph Gonzaga mortgaged the properties to the Philippine National Bank-Bacolod Branch.
The other children except the two who signed the Special Power of Attorney were working abroad and they
were unaware of the execution of the Special Power of Attorney in favor of Joseph Gonzaga.
The loan was not paid by Joseph Gonzaga and the Philippine National Bank sold the lands in a public auction.
The bid was awarded to the mortgagee-bank, the Philippine National Bank. A certificate of Sale issued to the
Philippine National Bank marked in evidence as Exhibit [sic].
When the children heirs learned of the foreclosure of the properties while they were abroad, the heirs headed by
Rosario Entapa Orpeza, made representation with the Philippine National Bank to purchase back the properties
via restructuring of the loan under Republic Act No. 7202 otherwise known as the Sugar Restitution Law.
Pursuant to the Sugar Restitution Law, the Philippine National Bank through its Vice President[,] Mr.
Topaciof,] accepted in principle the restructuring of the loan and for the heirs to purchase back the properties
with 20% percent [sic] down payment of the recomputed value which amounted to Php 178,336.50. In addition,
the heirs were also required to update the realty taxes of the lots. The heirs obliged by paying the realty taxes.
The heirs through Rosario Entapa Orpeza paid the required deposit of Php 178,336.50. It was paid in German
Currency converted to Philippine peso prevailing at the time. The heirs were happy that they could get back
their ancestral lots where they grew up.
Rosario Entapa Orpeza who spearheaded the repurchase of the properties was based in the United States of
America working as an accountant. She stayed in the country abandoning meanwhile her work in the USA just
to consummate the repurchase of the properties and she lost income while staying in the Philippines.
When Rosario Entapa Orpeza had paid for the realty taxes and the 20% downpayment for the repurchase, she
wanted to visit the lands located on the mountainside in Upper Maao, Bago City. She discovered that the
properties are occupied by several families who are CARP beneficiaries and are holding CLOA[s] issued by the
Department of Agrarian Reform.
She confronted the PNB official, Mr. Raul Topacio on the alleged CARP coverage of the lots but she was
reassured that the PNB shall take care of it.
It was sometime on March 15, 1995 when Rosario Entapa Orpeza formally applied for restructuring under the
Sugar Restitution Law. On May 22, 1995, the Assistant Vice President Raul G. Topacio informed Rosario
Entapa Orpeza of the total obligations which required twenty (20%) percent down payment and the account
shall be payable in[ ] 13 years.
The restructuring of the loan was officially approved by the Branch Committee on April 16, 1996.
Before approving the restructuring of the Entapa loan, the PNB verified if the properties have been turned over
to the Department of Agrarian Reform as required by[ ] law on acquired agricultural assets of the bank. There
was a list of properties transferred to the DAR (Exhibit 7) and the properties of Caridad Entapa were not in the
list indicating that the subject properties have not been transferred for CARP coverage. The owner's duplicate of
the title is still with the PNB.
Rosario Entapa Orpeza signed "ACCEPTANCE" in the May 1996 letter of the PNB on the terms of
restructuring of the loan.
When the alleged CARP coverage was verified with the Department of Agrarian Reform, documents cropped
up indicating that the lot was sold by the PNB to the Department of Agrarian Reform way back on September
30, 1989. The DAR sent a notice of Land Valuation (Exhibit 0) dated March 6, 1992. The Department of
Agrarian Reform processed the awards of the land and CLOA[s] were issued and given to the beneficiaries.
From the evidence adduced, it appears that the Philippine National Bank was not meticulous in allowing the
Entapa Heirs to avail of the Sugar Restitution Law to repurchase their property. The PNB agreed to grant the
restitution because from the record they looked into, the Entapa property was not among those transferred to the
Department of Agrarian Reform, actually the property had been offered to the DAR under the Voluntary Offer
to Sell (VOS), and the valuation [had] been determined and communicated to the Philippine National Bank as
shown by subsequent check of record.
The Certificate of Land Ownership Award (CLOA) have [sic] been issued and distributed to the awardees; thus,
it became legally impossible to go on with the repurchase of the property by the Entapa Heirs under the Sugar
Restitution Law or plain repurchase of the property.
With the situation that the Entapa Heirs could no longer work and hope to reacquire their property, the
plaintiffs-heirs formally demanded for the return of the 20% initial deposit paid to the PNB and also the real
property taxes paid when the property had already been divided and awarded to the beneficiaries covered by
CLOA[s].
The Philippine National Bank did not return the amount paid by the Entapa Heirs which led to the filing of the
instant case. Likewise, the Entapa Heirs suffered for the vain hope that they could get back the properties with
so much attachment or sentimental value.
The repurchase had not materialized; thus, the demand to return the amounts paid.
In a nutshell, the Entapa Heirs, who were working abroad in the United States and Germany, came to know that
the lot of the mother had been foreclosed and the redemption period had lapsed. The heirs wanted to recover the
property and one option was to repurchase the property under the Sugar Restitution Law. The heirs were
allowed in principle to repurchase the property under the Restitution Law. The Philippine National Bank was
under the impression that the subject property still belonged to the PNB because the owner's duplicate of the
title was still on file and a check on the list of properties transferred to the Department of Agrarian Reform, the
Entapa property was not among them — the acquired agricultural lands shall be turned over to the DAR for
purposes of the Land Reform program. The Philippine National Bank formally communicated to the Entapa
Heirs of the approval of the repurchase and the valuation wherein the former owners were required initially the
20% of the valuation and the Entapa heirs did pay. The heirs were likewise required to update the real property
taxes which they complied.
When the Entapa heirs came to know that the subject lot had been earlier offered to the Department of Agrarian
Reform under the Voluntary Offer to Sell (VOS) scheme of the CARP, they were aghast and their hope to be
able to get back the property came to naught. The PNB tried to reassure the heirs that the Certificate of Title is
still in the name of the PNB and it would push through the repurchase under the Sugar Restitution Law.
With the granting of the CLOA[s] to the beneficiaries who had been in actual occupation and cultivation, there
was no more possibility for the heirs to get back the land.
The Entapa heirs demanded for the return of the money they had paid for the value of the land and the real
property taxes they paid, for they could not repurchase the land. The PNB refused to timely return the amounts
paid by the heirs which finally led to the instant suit. Rosario Entapa Orpeza had to delay her return to her work
to the United States of America in order to consummate the repurchase and getting back of the property. In the
USA, she had a work which earned regularly for her in dollars. Rosario claims moral and actual damages for the
failure to get back the property which has sentimental value to the children.
With the repurchase not carried, there is the duty to return the amounts paid by the Entapa heirs.
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant:
1. The defendant is ordered to return to the plaintiff the following amounts:
a. Php 178,336.10 - representing initial downpayment for the repurchase of the lot plus
legal interests until paid;
b. Php 56,421.30 representing realty taxes paid on the lot plus legal interests until paid;
c. Php 50,000.00 as exemplary damages;
d. Php 50,000.00 as moral damages; and cralawlawlibrary
e. Attorney's fees of 15% of the amount due; and cralawlawlibrary
f. To pay the costs of suit.
SO ORDERED.34chanroblesvirtuallawlibrary
The Philippine National Bank appealed to the Court of Appeals and argued that (1) the trial court's Decision
violated the Constitution and the Rules of Civil Procedure when it failed to state the facts and law on which its
ruling was based, and (2) the trial court erred in ordering it to return the payments. 35chanrobleslaw
On June 4, 2013, the Court of Appeals nullified the Regional Trial Court Decision and remanded the case to it
for the rendition of judgment under the Constitution and Rules of Court.36chanrobleslaw
The Court of Appeals found that after a careful reading of the trial court's Decision, the Decision did not contain
analysis of the evidence of the parties or reference to any legal basis to reach its conclusions, contrary to the
requirements of Article VIII, Section 14 37 of the Constitution and Rule 36, Section 1 38 of the Rules of
Court.39chanrobleslaw
However, the Court of Appeals also pointed out that the Philippine National Bank could not raise new
arguments on appeal as its argument that it was entitled to apply Orpeza's downpayment to Gonzaga's
outstanding loan constituted a change of theory, which should be disallowed on appeal. 40 The dispositive
portion of the Court of Appeals Decision reads:ChanRoblesVirtualawlibrary
WHEREFORE, in view of all the foregoing, the appeal is GRANTED. The assailed 31 August 2006 Decision
of the Regional Trial Court Branch 54 of Bacolod City in Civil Case No. 98-10510 is NULLIFIED as it does
not conform with Section 14 Article VII [sic] of the 1987 Constitution and Section 1 Rule 36 of the Rules of
Court.
The records of the case are hereby remanded to the said Regional Trial Court for the rendition of judgment in
accordance with the mandate of the Constitution and the Rules of Court, with dispatch.
SO ORDERED.41 (Emphasis in the original)

The Philippine National Bank moved for reconsideration, but the Motion was denied in the Resolution dated
October 2, 2014.42chanrobleslaw
Aggrieved, petitioner Philippine National Bank filed before this Court a Petition for Review on Certiorari
arguing that the Court of Appeals erred in rendering judgment on the merits despite nullifying the Regional
Trial Court Decision and remanding the case.43 It also argues that the Court of Appeals should not have held
them liable to pay respondents Heirs of Ireneo and Caridad Entapa:ChanRoblesVirtualawlibrary
II. The Court of Appeals seriously erred when it held petitioner PNB liable to return the amount of
Phpl78,336.10 representing initial downpayment of respondents plus legal interest effective 14 October 1998
until paid.
III. The Court of Appeals seriously erred when it held petitioner PNB liable to return the amount of
Php56,421.30 representing the realty taxes paid by respondents plus legal interest until paid.
. . . .
IV. The Court of Appeals seriously erred when it held the Bank liable to pay moral damages, exemplary
damages, attorney's fees and cost of suit to respondents.44chanroblesvirtuallawlibrary
In their Comment,45 respondents argue that the Court of Appeals did not make any adjudication on the merits of
the case since the dispositive portion of the Decision did not actually state that petitioner was liable to
respondents for the stated amounts.46 Respondents further assert that the Court of Appeals discussed the other
issues because petitioner raised these issues before the Court of Appeals, and if petitioner did not want the
Court of Appeals to discuss these issues, then it should not have raised them. 47 Respondents argue that even
assuming that there was an adjudication on the merits, the Court of Appeals would not have erred in finding
petitioner liable since its bad faith was clear from the facts and the evidence. 48chanrobleslaw
The issues before this Court are:
chanRoblesvirtualLawlibraryFirst, whether the Court of Appeals erred in nullifying the Regional Trial Court
Decision; and cralawlawlibrary
Second, whether the Court of Appeals adjudicated on the merits of the case despite ordering its remand to the
trial court.
The Petition is denied.
A court must state the factual and legal basis for its decisions; otherwise, its decisions are void.
Article VIII, Section 14 of the Constitution provides:
chanRoblesvirtualLawlibrary
ARTICLE VIII
Judicial Department
. . . .
SECTION 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the
facts and the law on which it is based.
No petition for review or motion for reconsideration of a decision of the court shall be refused due course or
denied without stating the legal basis therefor.
Rule 36, Section 1 of the Rules of Court provides:ChanRoblesVirtualawlibrary
RULE 36
Judgments, Final Orders and Entry Thereof
SECTION 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of
the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts
and the law on which it is based, signed by him, and filed with the clerk of the court.
The Court of Appeals, in nullifying the Decision of the trial court, stated that it "contained no reference to any
legal basis in reaching its conclusions"49 nor did it "cite any legal authority or principle to support its conclusion
that [the] bank is liable." 50 The Court of Appeals found that the "trial court merely narrated the factual
circumstances of the case and directly declared the liability of the [bank] to pay [respondents] the amount she
paid as downpayment for the re-purchase of the subject land." 51chanrobleslaw
The Regional Trial Court Decision52 dated August 31, 2006 is four (4) pages long. Its first three (3) pages state
the facts of the case. The fourth page states:ChanRoblesVirtualawlibrary
The Entapa heirs demanded for the return of the money they had paid for the value of the land and the real
property taxes they paid, for they could not repurchase the land. The PNB refused to timely return the amounts
paid by the heirs which finally led to the instant suit. Rosario Entapa Orpeza had to delay her return to her work
to the United States of America in order to consummate the repurchase and getting back of the property. In the
USA, she had a work which earned regularly for her in dollars. Rosario claims moral and actual damages for the
failure to get back the property which has sentimental value to the children.
With the repurchase not carried, there is the duty to return the amounts paid by the Entapa heirs.
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant:
1. The defendant is ordered to return to the plaintiff the following amounts:
a. Php 178,336.10 — representing initial downpayment for the repurchase of the lot plus
legal interests until paid;
b. Php 56,421.30 representing realty taxes paid on the lot plus legal interests until paid;
c. Php 50,000.00 as exemplary damages;
d. Php 50,000.00 as moral damages; and cralawlawlibrary
e. Attorney's fees of 15% of the amount due; and cralawlawlibrary
f. To pay the costs of suit.
SO ORDERED.53chanroblesvirtuallawlibrary
The trial court failed to cite any legal basis for declaration of petitioner's liability. The Decision merely
contained a recitation of facts and a dispositive portion. Yao v. Court of Appeals54 nullified a similar decision for
failure of the court to state the legal basis for its ruling:ChanRoblesVirtualawlibrary
Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is indisputably a
paramount component of due process and fair play. It is likewise demanded by the due process clause of the
Constitution. The parties to a litigation should be informed of how it was decided, with an explanation of the
factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is
rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action.
The losing party is entitled to know why he lost, so he may appeal to the higher court, if permitted, should he
believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and
the law on which it is based leaves the parties in the dark as to how it was reached and is precisely prejudicial to
the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. More
than that, the requirement is an assurance to the parties that, in reaching judgment, the judge did so through the
processes of legal reasoning. It is, thus, a safeguard against the impetuosity of the judge, preventing him from
deciding ipse dixit. Vouchsafed neither. the sword nor the purse by the Constitution but nonetheless vested with
the sovereign prerogative of passing judgment on the life, liberty or property of his fellowmen, the judge must
ultimately depend on the power of reason for sustained public confidence in the justness of his decision.
Thus the Court has struck down as void, decisions of lower courts and even of the Court of Appeals whose
careless disregard of the constitutional behest exposed their sometimes cavalier attitude not only to their
magisterial responsibilities but likewise to their avowed fealty to the Constitution. 55 (Emphasis supplied,
citations omitted)
In Yao, the assailed decision was nullified and the records of the case were remanded to the trial court. The
Court of Appeals in this case did the same.
The constitutional requirement that the basis of the decision of our courts should be clearly articulated and made
legible to the parties does not merely assure fairness . . . . It is likewise crucial to assure the public that the
judiciary arrives at its conclusions on the basis of reasonable inference from credible and admissible evidence
and the text of law and our jurisprudence. Decisions of all courts should not be based on any other
considerations. Not only will fully coherent and cogent reasons have greater chances to convince the litigants of
their chances on appeal; they also make appeals possible. After all, appellate courts cannot be assumed to have
so much omniscience that they can read what the trial judge has not written.
Petitioner likewise argues that the Court of Appeals should not have ruled that it was liable to respondents.
This is erroneous.
Nothing in the Court of Appeals Decision ordered petitioner to return to respondents their downpayment and
pay: them damages. Petitioner brought the appeal before the Court of Appeals, arguing, among others, that it
should not have been held liable since it already applied Orpeza's downpayment to Gonzaga's outstanding
loan.56 The Court of Appeals, in addressing petitioner's arguments, explained that it could not rule on these
arguments since it was brought for the first time on appeal:ChanRoblesVirtualawlibrary
While it is true that [petitioner] has the right to recover the deficiency of Gonzaga's loan obligation under the
well-entrenched rule that a creditor is not precluded from recovering any unpaid balance on the principal
obligation if the extrajudicial foreclosure sale of the property subject of the real estate mortgage results in a
deficiency, still, such defenses could not be countenanced because it was belatedly raised only on appeal, not
during the trial before the court a quo.
Added to that, [petitioner] did not present any proof to substantiate its allegations. Their factual allegations
clearly required the presentation of additional evidence in order to properly address the issues raised in the new
theory. This, [petitioner] failed to do. Hence, this Court cannot give due course to the new issues raised in the
appeal for lack of evidence. Justice and fair play dictate that [petitioner's] change of theory of their case on
appeal be disallowed.57 (Emphasis supplied)
Strangely, petitioner now comes before this Court and argues that the Court of Appeals should not have
adjudicated on the arguments that it had raised before it.
Even if the Court of Appeals had adjudicated upon the merits of the case, any discussion would have been
considered obiter dictum since the entire case was remanded to the trial court.
Obiter dictum is "an opinion expressed by a court upon some question of law which is not necessary to the
decision of the case before it."58 It is a "a remark made, or opinion expressed . . . upon a point not necessarily
involved in the determination of the cause, or introduced by way of illustration, or analogy or argument." 59 It
"lacks the force of an adjudication and should not ordinarily be regarded as such." 60chanrobleslaw
It was not necessary for the Court of Appeals to discuss the other issues that petitioner raised in order to
determine that the case must be remanded to the trial court. In any case, petitioner is not precluded from
presenting the same arguments before the trial court.
We take this opportunity to remind judges and justices of their solemn duty to uphold and defend the
Constitution and the principles it embodies. This duty is so basic that it appears in the Oath of Office of every
public officer and employee61 and is stated only in the third whereas clause of the New Code of Judicial
Conduct.62 When the law is basic and the rules are elementary, the duty of a judge is simply to apply it. 63 Failure
to do so constitutes gross ignorance of the law. 64 It entails additional expenses on the part of the party-litigants
and creates an undeserved public impression of the lack of competence of the entire judiciary.
WHEREFORE, the Petition is DENIED. The Decision dated June 4, 2013 and the Resolution dated October 2,
2014 of the Court of Appeals in CA-G.R. CV No. 01895 are AFFIRMED.
A copy of this Decision shall be served on the Office of the Court Administrator, who is DIRECTED to initiate
proceedings against Presiding Judge Demosthenes L. Magallanes of Branch 54 of the Regional Trial Court of
Bacolod City for gross ignorance of the law and any other violation of our Rules.
SO ORDERED.chanRoblesvirtualLawlibrary
6. Magno vs. Magno, 17 August 2016
G.R. No. 206451, August 17, 2016
ELPIDIO MAGNO, HEIRS OF ISIDRO M. CABATIC, NAMELY: JOSE CABATIC, RODRIGO

CABATIC, AND MELBA CABATIC; AND ODELITO M. BUGAYONG, AS HEIR OF THE LATE
AURORA MAGNO, Petitioners, v. LORENZO MAGNO, NICOLAS MAGNO, PETRA MAGNO,
MARCIANO MAGNO, ISIDRO MAGNO, TEODISTA MAGNO, ESTRELLA MAGNO, BIENVENIDO
M. DE GUZMAN, CONCHITA M. DE GUZMAN, SILARY M. DE GUZMAN, MANUEL M. DE
GUZMAN AND MANOLO M. DE GUZMAN, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari, assailing the Decision1 dated July 23, 2012 of the Court of Appeals in
CA-G.R. CV- No. 90846, which reversed and set aside the Decision 2 dated November 15,2007 of the Regional
Trial Court of Alaminos City, Pangasinan, Branch 54, in Civil Case No. A-1850, and dismissed the complaint
for partition on the ground of res judicata.
The facts are as follows:
chanRoblesvirtualLawlibraryPetitioners Elpidio Magno, heirs of Isidro M. Cabatic, namely: Jose Cabatic,

Rodrigo Cabatic, and Melba Cabatic, and Odelito M. Bugayong, as heir of the late Aurora Magno, (Elpidio
Magno, et al. ) are the successors-in-interest of Doroteo Magno, who is the legitimate child of Nicolas Magno
by his first wife, Eugenia Recaido. On the other hand, respondents Lorenzo, Nicolas, Petra, Marciano, Isidro,
Teodista, Estrella, all surnamed Magno, and Bienvenido M., Conchita M., Silary M., Manuel M. and Manolo,
all surnamed De Guzman, are the successors-in-interest of Nicetas Magno, Gavino Magno and Nazaria Magno,
(Lorenzo Magno, et al. ), who are the legitimate children of Nicolas by her second wife, Camila Asinger.
For easy reference, the following are the successors-in-interest of the late Nicolas Magno:3
I. Children of the First Marriage with Eugenia Recaido (+)

A. Doroteo Magno, survived by:
1. Teofilo Magno, survived by Jacinta Magno (wife)
2. Jose Magno, survived by Nicanor and Lolita Magno
3. Angela Magno, survived by:
a. Isidro M. Cabatic, survived by
i. Jose Cabatic
ii. Rodrigo Cabatic
iii. Melba Cabatic
b. Felicitas Cabatic
c. Milagros Cabatic
d. Herminio Cabatic.
4. Espiridion Magno, survived by:
a. Tomas Magno
b. Elpidio Magno
c. Aurora Magno, survived by:
i. Odelito M. Bugayong
B. Eduardo Magno (died without issue)
II. Children of the Second Marriage with Camila Asinger (+)
A. Nicetas Magno, survived by Lorenzo Magno, who was in turn survived by:

1. Antonia Magno (widow)
2. Sheila Magno-Arandia (daughter)
3. Lorelyn Magno-Benas (daughter)
4. Arvin Ray M. delos Santos (grandson)
B. Gavino Magno, survived by:
1. Nicolas Magno, survived by:
a. Teresita M. Magno (widow)
b. Joselito Magno (son)
2. Petra Magno
3. Marciano Magno, survived by:
a. Rolando Magno (son)
b. Rosita M. Fernandez (daughter)
c. George Magno (son)
d. Gloria M. Ocampo (daughter)
e. Josefa M. Garcia (daughter)
f. Perlita M. Abarra (daughter)
g. Nenita Magno (daughter)
4. Leonido Magno
5. Isidro Magno
6. Teodista Magno
7. Estrella Magno
C. Nazaria Magno, survived by:
1. Bienvenido M. de Guzman
2. Conchita M. de Guzman-Lopez, survived by:
a. Benjamin Lopez (widower)
b. Leila Lopez Tamina (daughter)
c. Edgar Lopez (son)
d. Joshua Lopez (son)
e. Daisy Lopez (daughter)
f. Bernardino Lopez (son)
g. Abes Lopez (son)
h. Dejobe Lopez (son)
3. Silary M. de Guzman
4. Manuel M. de Guzman
5. Manolo M. de Guzman
Gavino Magno, Nicetas, and Nazaria,4 all surnamed Magno, (Gavino Magno, et al.), who are the predecessors-
in-interest of Lorenzo Magno, et al, filed an Amended Complaint dated January 30, 1964 before the Court of
First Instance (CFI) of Alaminos, Pangasinan, which was docketed as Civil Case No. A-413. In their complaint
for partition with damages, Gavino Magno, et al. sought the partition of the following properties left by Nicolas
Magno who died intestate in 1907:
(a) A parcel of land (unirrigated riceland) located at Lucap, Cayucay, Alaminos, Pangasinan, bounded by the
properties of the following: x x x; consisting of Two Hundred Seventy-Seven Thousand Twenty-Six (277,026)
Square Meters, more or less, and declared for taxation purposes under Tax Declaration No. 4236 in 1951 in the
Office of the Provincial Assessor of Pangasinan, in the name of Doroteo Magno;
(b) A parcel of land (unirrigated riceland) located at Lucap, Alaminos, Pangasinan, bounded by the properties
of the following: x x x; consisting of Four Thousand Four Hundred Seventeen (4,417) Square Meters, more or
less, and declared for taxation purposes under Tax Declaration No. 4235 in 1951 in the Office of the Provincial
Assessor of Pangasinan, in the name of Doroteo Magno;
(c) A parcel of land (residential lot) located at Poblacion, Alaminos, Pangasinan, bounded by the properties of
the following: x x x; consisting of Two Thousand Seven Hundred Five (2,705) Square Meters, more or less, and
declared for taxation purposes under Tax Declaration No. 4238, in 1951 in the Office of the Provincial
(d) A parcel of land (unirrigated riceland) located at San Jose Dive, Poblacion, Pangasinan, bounded by the
properties of the following: x x x; consisting of Five Thousand Four Hundred (5,400) Square Meters, more or
(e) A parcel of land (unirrigated rice, sugar, and forest lands), located at Lucap, Alaminos, Pangasinan, bounded
by the properties of the following: x x x; consisting of One Hundred Fifty-Six Thousand Five Hundred Forty
(156,540) Square Meters, more or less, and declared for taxation purposes under Tax Declaration No. 4233 in
1951 in the Office of the Provincial Assessor of Pangasinan, in the name of Doroteo Magno;
(f) A parcel of land (coconut land) located at Lucap, Cayucay, Alaminos, Pangasinan, bounded by the properties
of the following: x x x; consisting of Three Thousand Two Hundred Forty-Five (3,245) Square Meters, more or
(g) A parcel of land (unirrigated Riceland) located at Balangobong, Alaminos, Pangasinan, bounded by the
properties of the following: x x x; consisting of Eleven Thousand One Hundred Thirty-Two (11,132) Square
Meters, more or less, and declared for taxation purposes under Tax Declaration No. 4241 in 1951 in the Office
of the Provincial Assessor ofPangasinan, in the name of Espiridion Magno; 5
In their Amended Answer to the Amended Complaint with a Counter-claim 6 dated March 4, 1964, Teofilo
Magno, Isidro, Herminio and Felicidad, all surnamed Cabatic, Aurora, Elpidio, Tomas, Nicanor and Lolita, all
surnamed Magno (Teofilo Magno, et al. ), who are the predecessors-in-interest of Elpidio Magno, et al, denied
the material allegations of the amended complaint. By way of counterclaim, Teofilo Magno, et al. also sought
the partition of three (3) parcels of land originally owned by Nicolas Magno, as shown by Original Tax
Declaration No. 2221 in his name, and described as follows:ChanRoblesVirtualawlibrary
Tax Declaration No. 4246 in the name of GAVINO MAGNO and is actually in the possession of Gavino
Magno, plaintiff:
chanRoblesvirtualLawlibraryA parcel of land containing an area of 84,988 square meters in area situated in the
Barrio Lucap, Municipality of Alaminos, Pangasinan, Philippines, x x x.
Tax Declaration No. 13385 assessed at P390.00 in the name of plaintiff, Necitas Magno described as follows:
chanRoblesvirtualLawlibraryA parcel of land situated in the Barrio of Lucap, Municipality of Alaminos,

Pangasinan, containing an area of about 38,385 sq. m. x x x.
Tax Declaration No. 4249 in the name of plaintiff NAZARIA MAGNO and also under her actual possession,
to wit:
chanRoblesvirtualLawlibraryA parcel of land situated in the Barrio of Lucap, Mun. of Alaminos, Pangasinan
containing an area of 41,023 sq. m. more or less, x x x.7
On October 5, 1972, CFI of Pangasinan, Branch VII,8 granted the amended complaint of Gavino Magno, et
al., but failed to include in the dispositive portion of its Decision 9 three (3) real properties covered by Tax
Declaration Nos. 4246, 4249, and 13385 subject of the counterclaim of Teofilo Magno, et al. The fallo of the
Decision reads:ChanRoblesVirtualawlibrary
WHEREFORE, in view of all the foregoing considerations, judgment is hereby declared as follows:
chanRoblesvirtualLawlibrary
a) Declaring the plaintiffs [Gavino Magno, et al. ] and the defendants [Teofilo Magno, et al. ]
as legal heirs of the deceased Nicolas Magno and consequently, the absolute and exclusive
owners of the properties described in the amended complaint, except the parcel of land
described in paragraph (3), sub-paragraph (e) of said amended complaint.

b) Ordering the partition of said properties in four (4) equal parts as follows: one share each of the
plaintiffs, Gavino, Nicetas and Nazaria, all surnamed Magno, and the fourth share to
thedefendants who represent the deceased Doroteo Magno;

c) Declaring the property described in paragraph (3), sub-paragraph (e) as the exclusive property of
the heirs of the deceased spouses, Doroteo Magno and Monica Romero;

d) Ordering the defendants to account for the annual income or produce of the above-mentioned
properties with the exception of the property described in the preceding paragraph, and to divide
the same into four (4) equal parts in the manner above-described, commencing from 1957 until
the accounting is made and the shares corresponding to the plaintiffs delivered;

e) Ordering the defendants to pay, jointly and severally, the plaintiffs in the sum of P3,000.00 as
attorney's fees. And the costs.

SO ORDERED.10
On June 30, 1981, the Court of Appeals (CA), 9th Division, rendered a Decision11 affirming the decision of the
CFI. The CA ruled, among other matters, that the lands covered by Tax Declaration Nos. 4246, 4249, and
13385 were owned by the late Nicolas Magno and must be brought into the mass of his estate. But, the CA also
failed to order their partition in the dispositive portion of its decision which reads:ChanRoblesVirtualawlibrary
WHEREFORE, the Decision appealed from, being in accord with evidence and law, is hereby affirmed in all
parts. With costs against the defendants-appellants.
SO ORDERED.12
In an Entry of Judgment13 dated September 25, 1981, the Clerk of Court certified that the CA Decision has
become final and executory on September 22, 1981.
Meanwhile, on October 14, 1981, Gavino Magno, et al. filed a Motion for Execution, which the CFI granted.
Teofilo Magno, et al. filed a motion for reconsideration which the CFI denied on October 19, 1981.
Aggrieved, Teofilo Magno, et al. filed a petition for certiorari with preliminary injunction before the Supreme
Court which issued a temporary restraining order against the CA and Gavino Magno, et al. on January 6, 1982.
In a Decision14 dated July 31, 1987, the Court dismissed the petition for lack of merit and lifted its restraining
order. The Court ruled that the CA committed no error in ordering the issuance of the entry of judgment, and
that the CA decision has become final and executory, there being no appeal taken therefrom. On November 2,
1987, it issued an Entry of Judgment in G.R. No. 58781 entitled Teofilo Magno, et al. v. Court of Appeals, et al.
On December 8,1987, Gavino Magno, et al. filed a Motion for Issuance of Alias Writ of Execution. On
December 15, 1987, the Regional Trial Court (RTC) of Pangasinan, Branch 54,15 ordered the issuance of an
alias writ of execution.
On January 27, 1988, Gavino Magno, et al. filed an Urgent Motion for Partition and Accounting. On May 4,
1989, the RTC ordered the setting of the case for hearing on the urgent motion for partition and accounting, and
for purposes of appointing commissioners which shall make the necessary partition of the lands.
On August 23, 1989, Teofilo Magno, et al. filed a Motion to Reopen, alleging that there are real properties of
Nicolas Magno in the possession of Gavino Magno, et al. that have not been reported to the court, and should
be collated so that the whole inheritance can be partitioned by the heirs. On February 8, 1990, Teofilo Magno,
et al. filed an Urgent Motion for Reconsideration with respect to the true nature of the inventory of the
properties left by Nicolas Magno, and for them to be allowed to submit an inventory thereof.
On June 8, 1990, the RTC issued an Order which, among other matters, ruled that the only portion of the
decision that becomes the subject of execution, is that ordained in the dispositive portion of the decision; thus,
he denied the motion for reconsideration filed by Teofilo Magno, et al. On June 11, 1990, the RTC also denied
for lack of merit the motion to reopen filed by them.
Meanwhile, Elpidio Magno, et al. ,16 the successors-in-interest of Teofilo Magno, et al, filed before the RTC of
Alaminos, Pangasinan, a Complaint 17 dated May 24, 1990 for partition, accounting and damages. In their
complaint docketed as Civil Case No. A-1850, Elpidio Magno, et al. alleged that aside from the real properties
subject of Civil Case No. A-413, Nicolas Magno also left three (3) real properties covered by Tax Declaration
Nos. 4246, 4249 and 13385, which were in the possession of Gavino, Nazaria and Necitas, all surnamed
Magno, and now in possession of their respective successors-in-interest, Lorenzo Magno, et al. 18 Claiming to
be among the coheirs of Nicolas Magno, Elpidio Magno, et al. averred that Lorenzo Magno, et al. refused to
partition the said three (3) properties, and to account for their fruits since 1957 up to present, despite repeated
demands.
In their Motion to Dismiss19 dated August 4, 1990, Lorenzo Magno, et al. contended that the cause of action of
Elpidio Magno, et al. is barred by a prior final judgment in Civil Case No. A-413, prescription and laches. In an
Order20 dated April 3, 1991, the RTC denied the motion for lack of merit.
In their Answer with Counterclaim21 dated September 3, 1991, Lorenzo Magno, et al. averred that their refusal
to partition the properties is founded on the open, continuous, exclusive and adverse possession in the concept
of owner by their predecessor-in-interest, Gavino, Nazaria and Necitas, all surnamed Magno. By way of special
defense, Lorenzo Magno, etal. reiterated that the cause of action of Elpidio Magno, et al. is barred by res
judicata, prescription and laches.
In the Amended Complaint22 dated July 1, 1992, Elpidio Magno, et al. stressed that the three (3) real properties
described in their complaint were all acquired during the first marriage of Nicolas with Eugenia Recaido.
In their Motion to Dismiss23 dated December 7, 1995, Lorenzo Magno, et al. argued that the trial court has no
jurisdiction to correct or amend the decision in Civil Case No. A-413 which had already become final and
executory, pursuant to the doctrine of res judicata.
On November 15, 2007, the RTC of Alaminos City, Pangasinan, Branch 54, granted the amended complaint of
Elpidio Magno, et al. The fallo of its Decision reads:ChanRoblesVirtualawlibrary
WHEREFORE, in consideration of the foregoing premises, considering that these three parcels of land were
acquired by the deceased Nicolas Magno and his first wife, Eugenia Recaido, the plaintiffs, therefore, are
entitled to one-half of each of the three parcels of land as the share of his first wife, Eugenia Recaido, or her
heirs while the other half owned by Nicolas Magno be divided into four shares, three shares to the defendants
and one share to the plaintiffs.
Further, the Court finally orders the accounting of all the total value of fruits and produce of the three described
parcels of land from 1957 up to the present time and to deliver to the plaintiffs their respective shares pertaining
to them.
Finally, the court orders the defendants to pay severally and jointly the plaintiffs actual damages and attorney's
fees in the total sum of ONE HUNDRED THOUSAND (Php100,000.00) PESOS.
IT IS SO ORDERED.24
On July 23, 2012, the CA Sixth Division rendered a Decision in CA-G.R. CV No. 90846, the dispositive portion
of which states:ChanRoblesVirtualawlibrary
WHEREFORE, the instant appeal is GRANTED and the appealed Decision is REVERSED and SET

ASIDE. A new one is entered DISMISSING the complaint.
SO ORDERED.25cralawred
Aggrieved, Elpidio Magno, et al. filed this petition for review on certiorari.
Elpidio Magno, et al. submit that the CA committed grave and serious reversible errors,
thus:ChanRoblesVirtualawlibrary
a- in holding that the finality of the decision in Civil Case No. A-413 operates as res judicata in the
second case (Civil Case No. A-1850), despite that there is no identity of the subject matter between the
two cases.

b- in concluding that the decision in the first case, which has become final and executory, should have
been executed to effect the partition of the subject properties, notwithstanding that only the dispositive
portion, of the fallo is its decisive resolution, and is thus the subject of execution.

c- in dismissing Civil Case No. A-1850, without regard to the right to demand partition of the thing owned
in common, as mandated in Art. 494 of the New Civil Code.26
Elpidio Magno, et al. admit that the subject three (3) properties covered by Tax Declaration Nos. 13385, 4246
and 4249 were among those stipulated as properties of Nicolas Magno, and lengthily discussed in the body of
the CFI Decision in Civil Case No. A-413, but were not included in the dispositive portion of its decision. They
stress that while the said decision was affirmed by the CA in G.R. CV No. 52655-R when it ruled inter alia that
such properties ought to be brought into the mass of Nicolas Magno's estate, the CA likewise failed to include
the said properties in the dispositive portion of its decision. Thus, Elpidio Magno, et al. submit that res
judicata cannot be applied because there is no identity of subject matter between Civil Case No. A-413 where
their predecessors-in-interest, Teofilo Magno, et al. had sought by way of counterclaim for partition of the said
properties, and Civil Case No. 1850 where they prayed for partition of the same properties, which were omitted
in the dispositive portion of the decisions of the CFI and the CA.
Elpidio Magno, et al. further argue that to deny their right to demand partition of properties which remain co-
owned by them and Lorenzo Magno, et al. on the ground of res judicata would sacrifice justice to technicality.
Citing Article 49427 of the New Civil Code, they also claim to have the right to demand partition of said
properties at any time. They likewise invoke Article 1103 28 of the same Code in support of their claim that a
decision or order of partition does not really become final in the sense that it leaves something more to be done
for the complete disposition of the case. They insist that Lorenzo Magno, et al. should not be allowed to
exclusively appropriate the properties owned in common for they hold the same in trust for the other co-owners;
otherwise, there would be unjust enrichment at the expense of their co-owners. Finally, they submit that the
finding of the CA to the effect that the subject properties were owned by the late Nicolas Magno and must be
brought to the mass of his estate, becomes the law of the present case which must not be disturbed as a matter of
judicial comity.
On the other hand, respondents argue that the filing of another complaint for partition [Civil Case No. A-1850]
cannot be sanctioned without doing violence to the doctrine of res judicata, but also to the rule on immutability
of judgments.
The petition lacks merit.
The Court has explained29 the doctrine of res judicata and its two (2) concepts, thus:
Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment." It lays the rule that an existing final judgment or decree rendered on the merits, without fraud or
collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the
rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of
concurrent jurisdiction on the points and matters in issue in the first suit.
It must be remembered that it is to the interest of the public that there should be an end to litigation by the
parties over a subject fully and fairly adjudicated. The doctrine of res judicata is a rule that pervades every well-
regulated system of jurisprudence and is founded upon two grounds embodied in various maxims of the
common law, namely: (1) public policy and necessity, which dictates that it would be in the interest of the State
that there should be an end to litigation — republicae ut sit litium; and (2) the hardship on the individual that he
should be vexed twice for the same cause — nemo debet bis vexari pro una et eadem causa. A contrary
doctrine would subject public peace and quiet to the will and neglect of individuals and prefer the gratification
of the litigious disposition on the part of suitors to the preservation of public tranquility and happiness.
Res judicata has two concepts. The first is bar by prior judgment under Rule 39, Section 47(b), and the second
is conclusiveness of judgment under Rule 39, Section 47(c). These concepts differ as to the extent of the effect
of a judgment or final order as follows:ChanRoblesVirtualawlibrary
SEC. 47. Effect of judgments or final orders. – The effect of a judgment or final order rendered by a court of the
Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
chanRoblesvirtualLawlibraryx x x x
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other
matter that could have been raised in relation thereto, conclusive between the parties and their successors-in-
interest by title subsequent to the commencement of the action or special proceeding, litigating for the same
thing andunder the same title and in the same capacity; and cralawlawlibrary
(c) In any other litigation between the same parties or their successors-in-interest, that only is deemed to have
been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or
which was actually and necessarily included therein or necessarythereto.
Jurisprudence taught us well that res judicata under the first concept or as a bar against the prosecution of a
second action exists when there is identity of parties, subject matter and cause of action in the first and second
actions. The judgment in the first action is final as to the claim or demand in controversy, including the parties
and those in privity with them, not only as to every matter which was offered and received to sustain or defeat
the claim or demand, but as to any other admissible matter which might have been offered for that purpose and
of all matters that could have been adjudged in that case. In contrast, res judicata under the second concept or
estoppel by judgment exists when there is identity of parties and subject matter but the causes of action are
completely distinct. The first judgment is conclusive only as to those matters actually and directly controverted
and determined and not as to matters merely involved herein.30
In order for res judicata to bar the institution of a subsequent action, the following requisites must concur: (1)
the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court
having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on
the merits; and (4) there must be, as between the first and second actions, identity of parties, subject matter,
causes of action as are present in the civil cases below. 31 All four requisites of res judicata under the concept of
bar by prior judgment are present in this case.
As correctly noted by the CA, the presence of the first two requisites of res judicata, as well as the requisite
identity of parties in the first action (Civil Case No. A-413) and the second action (Civil Case No. A-1850), are
undisputed:
xxx [R]ecords show that herein parties do not dispute the fact that the trial court has jurisdiction over the
first case (Civil Case No. A-413) and that such decision in the first case has long become final and
executory on September 22, 1981 by virtue of the Entry of Judgment dated September 25, 1981. There is also
no question with respect to the identity of parties in both civil cases. Obviously there is also a community of
interest between the parties in both the first and the present case [Civil Case No. A-1850], being the
legitimate heirs of Nicolas Magno, although, the parties in the present case, by right of representation, merely
substituted some of the original parties in the first case who already died, x x x.32
With respect to the third requisite of res judicata, there is no question that the Decision33 of the CFI, dated
October 5, 1972, granting the amended complaint for partition docketed as Civil Case No. A-413, is a judgment
on the merits, because it was rendered based on the evidence and stipulations submitted by the parties and the
witnesses they presented at the trial of the case.
Anent the fourth requisite of res judicata, there is also no doubt as to the identity of the subject matter and
causes of action between the first action and the second action. Contrary to the contention of Elpidio Magno, et
al., the subject matters of partition in both actions are the same three (3) real properties originally owned by the
late Nicolas Magno, and later declared for taxation purposes under Tax Declaration Nos. 4246, 4249 and 13385.
In their Amended Answer to the Amended Complaint with a Counterclaim in Civil Case No. A-413, Teofilo
Magno, etal., the predecessors-in-interest of Elpidio Magno, et al., alleged by way of counterclaim as follows:
2. That the deceased NICOLAS MAGNO was the original owner of the following parcels of land as shown by
Original Tax Declaration No. 2221 in his name, and which parcels of lands are hereby described as follows:
Tax Declaration No. 4246 in the name of GAVINO MAGNO and is actually in the possession of Gavino
Magno, plaintiff:
chanRoblesvirtualLawlibraryA parcel of land containing an area of 84,988 square meters in area situated in the
Barrio of Lucap, Municipality of Alaminos, Pangasinan, Philippines, x x x.
Tax Declaration No. 13385 assessed at P390.00 in the name of plaintiff, Necitas Magno described as follows:
chanRoblesvirtualLawlibraryA parcel of land situated in the Barrio of Lucap, Municipality of Alaminos,

Pangasinan, containing an area of about 38,385 sq. m. x x x.
Tax Declaration No. 4249 in the name of plaintiff NAZARIA MAGNO and also under her actual possession,
to wit:
chanRoblesvirtualLawlibraryA parcel of land situated in the Barrio of Lucap, Mun. of Alaminos, Pangasinan
containing an area of 41,023 sq. m. more or less, x x x.34
3. That the three parcels of land of about 16 hectares total area being the original property of the deceased
NICOLAS MAGNO common ancestor of both parties in this case, under law, should be divided into four equal
parts, and all the defendants, being descendants by the first wedlock, and therefore should be considered full
blood and entitled to double that of the descendants of the second wedlock, it being now difficult to determine
under which wedlock, the said properties were acquired, the partition therefrom which would equitative (sic) to
the parties would be that 3/4 pro-indiviso to the defendants; and 1/4 pro-indiviso thereof to the plaintiffs.35
On the other hand, in their Amended Complaint in Civil Case No. A-1850, Elpidio Magno, et al, as successors-
in-interest of Teofilo Magno, et al., prayed, among other matters, that judgment be rendered "[o]rdering the
partition of the above-described parcels of land among the plaintiffs and the defendants, taking into
consideration that these parcels of land were acquired during the first marriage; x x x."36 Indeed, the subject
matters of the first and second actions for partition, accounting and damages, docketed as Civil Case Nos. A-
413 and A-1850, respectively, are the three (3) real properties originally owned by the late Nicolas Magno,
which were later declared for taxation purposes under Tax Declaration Nos. 4246, 4249 and 13385. Since all the
requisites of res judicata under the concept of bar by prior judgment are present, the CA correctly dismissed the
amended complaint for partition docketed as Civil Case No. A-1850.
However, while the CA correctly ruled that res judicata has already set in, it erred in stating that what Elpidio
Magno, et al. should have done is to file a writ of execution in the trial court to enforce its final and executory
decision in Civil Case No. A-413. It is well settled that a writ of execution must substantially conform to the
dispositive portion of the promulgated decision, and cannot vary or go beyond the terms of the judgment;
otherwise, it becomes null and void.37 Here, it is undisputed that both the bodies of the CFI Decision in Civil
Case No. A-413 and the CA Decision upholding the CFI, confirmed that the three (3) undivided properties
belong to the late Nicolas Magno, but they were not included in the dispositive portions of said decisions as part
of the properties that were ordered to be partitioned among his heirs. Thus, it would be pointless to require
Elpidio Magno, et al. to file a motion for execution, because the trial court will simply deny it for the reason
that the only portion of its final decision that becomes the subject of execution, is that ordained in the
dispositive portion.
Needless to state, when a final judgment becomes executory, it thereby becomes immutable and unalterable.
The judgment may no longer be modified in any respect, even if the modification is meant to correct what is
perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted
to be made by the court rendering it or by the highest Court of the land. 38 The underlying reason for the rule is
two-fold: (1) to avoid delay in the administration of justice and thus make orderly the discharge of judicial
business, and (2) to put judicial controversies to an end, at the risk of occasional errors, inasmuch as
controversies cannot be allowed to drag on indefinitely and the rights and obligations of every litigant must not
hang in suspense for an indefinite period of time. 39 Be that as it may, there are three (3) recognized exceptions
to the rule on the immutability of final and executory judgments, namely, (a) the correction of clerical error; (b)
the making of so-called nunc pro tunc entries which cause no prejudice to any party; and (c) where the
judgment is void.40chanrobleslaw
The Court explained the concept of nunc pro tunc judgment in this wise:
The office of a judgment nunc pro tunc is to record some act of the court done at a former time which was not
then carried into the record, and the power of a court to make such entries is restricted to placing upon the
record evidence of judicial action which has been actually taken. It may be used to make the record speak the
truth, but not to make it speak what it did not speak but ought to have spoken. If the court has not rendered a
judgment that it might or should have rendered, or if it has rendered an imperfect or improper judgment, it has
no power to remedy these errors or omissions by ordering the entry nunc pro tune of a proper judgment. Hence
a court in entering a judgment nunc pro tune has no power to construe what the judgment means, but only to
enter of record such judgment as had been formerly rendered, but which had not been entered of record as
rendered. In all cases the exercise of the power to enter judgments nunc pro tunc presupposes the actual
rendition of a judgment, and a mere right to a judgment will not furnish the basis for such an entry. (15 R. C. L.,
pp. 622-623.)
xxx xxx xxx
The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and
determination of new rights, but is one placing in proper form on the record, the judgment that had been
previously rendered, to make it speak the truth, so as to make it show what the judicial action really was, not to
correct judicial errors, such as to render a judgment which the court ought to have rendered, in place of the
one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment may have
been. (Wilmerding vs. Corbin Banking Co., 28 South., 640, 641; 126 Ala., 268.)
A nunc pro tunc entry in practice is an entry made now of something which was actually previously done, to
have effect as of the former date. Its office is not to supply omitted action by the court, but to supply an
omission in the record of action really had, but omitted through inadvertence or mistake. (Perkins vs.
Haywood, 31 N. E., 670, 672.)
xxx xxx xxx
It is competent for the court to make an entry nunc pro tunc after the term at which the transaction occurred,
even though the rights of third persons may be affected. But entries nunc pro tunc will not be ordered except
where this can be done without injustice to either party, and as a nunc pro tuncorder is to supply on the record
something which has actually occurred, it cannot supply omitted action by the court. . . (15 C.J., pp. 972-
973 .)41]
Guided by the foregoing principles, the Court finds that the interest of justice would be best served if a nunc pro
tunc judgment would be entered in Civil Case No. A-413 by ordering the partition and accounting of income
and produce of the three (3) properties covered by Tax Declaration Nos. 4246, 4249 and 13385, under the same
terms as those indicated in the dispositive portion the CFI Decision dated October 5, 1972. It is undisputed that
the said properties are still undivided and considered as part of the estate of Nicolas Magno, pursuant to the
final decision in Civil Case No. A-413. There is also no doubt that the CFI failed to include in the dispositive
portion of its Decision dated October 5, 1972 in Civil Case No. A-413 its ruling that the said three (3) properties
remain undivided and should be partitioned among the heirs of Nicolas Magno. Pertinent portions of the CFI
Decision state:
The following facts are undisputed: that Nicolas Magno, common ancestor of the parties died in 1907; that
he died intestate, leaving properties one of which is described under Tax Declaration No. 2221; that
Nicolas Magno married twice; that during his first marriage with one Eugenia Recaido, he had two sons,
Doroteo Magno and Eduardo Magno but the latter died without issue; that Doroteo Magno died in 1937; that he
had four children, namely: Teofllo, Jose, Angela and Esperidion, all surnamed Magno; that of the four, only
Teofilo is still living. While Jose was survived by one daughter Lolita and one son, Nicolas Magno. Angela was
survived by three children, Isidro, Herminio, and Felicidad, all surnamed Cabatic; Espiridion Magno who is
also deceased was survived by his three children Tomas, Elpidio and Aurora, all surnamed Magno. While in his
second marriage with Camila Asinger, said Nicolas Magno had three children, Gavino, Nicetas and Nazaria, all
surnamed Magno.
The principal issue in this case is whether the properties of the deceased Nicolas Magno have been partitioned.
From the evidence thus adduced, the Court is convinced that said properties of the deceased Nicolas
Magno, common ancestor of the parties remain undivided up to present. This view is supported by the
testimonies of the plaintiffs and their witnesses, as well as that of the defendants and their
witnesses. Custodio Rabina, a witness for the plaintiffs testified that after the death of Nicolas Magno, his son,
Doroteo Magno took possession of the twenty-seven hectare Lucap property on condition that he would give
three "baars" to the plaintiffs in the form of rentals; that Rabina used to see Doroteo deliver the shares of the
plaintiffs; that after the death of Doroteo Magno in 1937, his son Teofilo continued in the possession of the
same under the same condition as his father until 1957; that on the said date, Teofilo failed to deliver the shares
of the plaintiffs, hence, the latter demanded the return of the land. That in view, thereof, plaintiffs went to Atty.
Tomas Rapatalo who advised them to divide the properties in question instead of fighting each other. However,
no partition was effected.
Nicolas Magno, another witness for the plaintiffs declared that in 1957, he went to Atty. Rapatalo together with
Teofilo Magno, purposely to effect the partition of the properties in question, but no partition was effected due
to the refusal of Teofilo's nephews and nieces.
Isidro Cabatic, one of the defendants testified that the properties of Nicolas Magno have not been partitioned
and that is the reason why the heirs have no titles in their respective names. He further declared that while they
agreed to divide the properties in 1946, nevertheless, since some of them were in Mindanao and others in
Quezon City, the partition was not effected, that instead an oral partition was made, but as the witness himself
said, it was not approved. Cabatic also declared that subsequently, the heirs from Mindanao came but insisted
on the partition according to the Certeza Survey. It is to be noted that in their proposed partition, the heirs hires
the services of Surveyor de Asis.
The mere fact that the Lucap property is covered by four tax declarations (Exhibits G, F, E and D) is not
evidence to show that it has been partitioned. Mere tax declarations are not evidence of ownership.
Likewise, the fact that the plaintiffs possessed certain portions of the Lucap property does not prove that said
property had been partitioned because, as satisfactorily explained by Nicetas Magno, it was the practice of the
heirs to occupy portions of the hereditary estate and harvest the corresponding produce thereof. This has not
been contradicted or rebutted by the defendants.
The inequality of the areas possessed by the plaintiffs and Doroteo Magno involving the Lucap property which
was not explained by the defendants is another irrefutable sign of non-partition. Defendants failed to explain
satisfactorily why twenty-seven (27) hectares would belong to Doroteo Magno while the plaintiffs should have
only sixteen (16) hectares among themselves from the Lucap property.
Another evidence to show that the properties of Nicolas Magno are still undivided is the testimony of the
defendant Teofilo Magno that in 1957, he went to see Atty. Rapatalo for the purpose of asking him to register
the properties in Lucap and Kiskis in the name of Doroteo Magno, however, Atty. Rapatalo was not able to file
the supposed application for land registration because of the objections of the plaintiffs who were also present
when he (Teofilo) approached Atty. Rapatalo. Teofilo also declared that the plaintiffs objected because they
claimed they are co-owners of the same; that due to the same objections of the plaintiffs, Teofilo was not able to
get the tax declaration in his name covering the Lucap property.
Defendants claimed and they tried to prove that the properties in litigation are the exclusive properties of
Doroteo Magno and therefore, they are entitled to inherit the same to the exclusion of the plaintiffs. This
contention of the defendants is untenable. Defendants in the course of the trial, have failed to present any
document or writing to show that Nicolas Magno conveyed the properties in question solely to Doroteo.
No partition having been effected among the heirs, it follows that the pro-indiviso character of the lands
in question continue. It is a familiar doctrine that when an inheritance is undivided, possession by one of the
co-heirs, and prescription, however long may be the lapse, do not run against the latter's right of action to
demand the partition of the pro-indiviso property, for the simple reason that the possessor thereof is not a third
person, nor does he hold it by such adverse possession as will become legalized by prescription. (Dimagiba vs,
Dimagiba, 34 Phil. 357). Such possession is always understood to be exercised by the heir himself and in the
name of his co-heirs (Lampitoc vs. Lampitoc, CA-G.R. No. 9200-R, April 30, 1953).
The only exception to the rule that prescription does not run against the co-heirs is when the co-heirs or co-
owners, having possession of the hereditary community property, hold the same in his own name, that is, under
claim of exclusive ownership. In such case, he may acquire the property by prescription if his possession meets
the other requirements of the law (De los Santos vs. Sta. Teresa, 44 Phil. 811). However, this exception does not
apply in this case. In the first place, neither the defendant Teofilo Magno nor his father Doroteo Magno could
be considered to have possessed the lands in question in the concept of an owner to the exclusion of his co-
heirs. The evidence to the effect is insufficient and inconclusive. As can be clearly gleaned from the evidence,
the defendants were all the while aware of the plaintiffs' claim of ownership over said properties.
In view of the foregoing, there is nothing more left for the Court to resolve than to order the partition of
the properties in question except the parcel of land described in par. 3, sub-par, (e) of the amended
complaint, otherwise, denominated as Kiskis property, the same having been satisfactorily shown by the
defendants to be the paraphernal property of Monica Romero, wife of Doroteo Magno (Exhibit 6). Clearly
therefore, plaintiffs have no right to inherit any portion thereof.
In effecting the partition among the heirs of the decedent, Article 2263 of the New Civil Code should be
applied. Under the said provision, rights to an inheritance of a person who dies, with or without a will, before
the effectivity of this code, shall be [governed] by the Civil Code of Spain of 1889, by other [previous] laws,
and by the Rules of Court. In other words, Nicolas Magno, having died in 1907, the distribution of his estate
shall be [governed] by the Civil Code of Spain of 1889.
To properly distribute his estate, the important consideration should be to determine the date of the acquisition
of the properties subject of partition in order to be able to [pinpoint] which properties belong to his first
marriage and which properties pertain to his second marriage. In this case, however, evidence is clear that all
the properties subject of partition belong to both marriages of the decedent, Nicolas Magno, with the
exception of that parcel described in paragraph (3), sub-paragraph (e) of the amended complaint as
previously stated. Therefore, applying Article 931 of the Civil Code of Spain of 1889, the law [in force] at the
time of the decedent's death, his children, Doroteo, Gavino, Nicetas and Nazaria should inherit in equal shares.
Accordingly, the children of the late Doroteo Magno, namely: Teofilo, Angela, Jose and Espiridion should
succeed to the estate of Nicolas Magno by right of representation and pursuant to law, they cannot inherit more
than what their father would inherit if alive.
As regards the disposition made by Doroteo Magno during his lifetime, the same are valid to the extent of his
share and insofar as the same are not inofficious.
In brief, the properties in question which by agreed preponderance of evidence were shown to be owned by
the decedent, Nicolas Magno, except parcel (e) under par. 3 of the amended complaint as previously
mentioned, should be partitioned as follows: one fourth (1/4) share each child shall be for the three-plaintiffs,
and the fourth share shall pertain to the defendant to represent the deceased, Doroteo
Magno.42chanroblesvirtuallawlibrary
In affirming in toto the CFI Decision, the CA likewise failed to indicate in the dispositive portion of its Decision
dated June 30, 1981 in CA-G.R. No. 52655-R, its definitive ruling that the said three (3) real properties were
owned by Nicolas Magno and must be brought into the mass of his estate for partition, thus:
What are the lands inherited by the parties from the common ancestor, the late Nicolas Magno, and what are the
lands, if any, not owned by Nicolas Magno but inherited by the defendants-appellants [Teofilo Magno, et al. ]
from their respective parents, as alleged in their answer? Were some of these lands including those described in
the counterclaim, acquired by either party through acquisitive prescription or adverse possession after the
required number of years? We decide.
Land subject-matter of defendants' [Teofilo Magno, et al. ] counterclaim. - As admitted by the defendants in

their answer, there existed a property used to be covered by Tax Declaration No. 2221 in the name of Nicolas
Magno. In the pre-trial conference of October 8, 1964, the parties stipulated that the land covered by Tax
Declaration No. 2221 was one of the properties left by Nicolas Magno (pp. 14-15,20-21, R.A.). In the
stipulation of the parties, dated November 16, 1965, the parties admitted that Tax No. 2221 was revised in 1917
and four tax declarations were issued in lieu of Tax No. 2221 to wit: Tax No. 7819, in the name of Doroteo
Magno; Tax No. 7820 in the name of Nicetas Magno; Tax No. 7821 in the name of Gavino Magno, and Tax
No. 7822 in the name of Nazaria Magno (see also Exh. A.) In their counterclaim, defendants disclosed that the
same land originally declared under Tax No. 2221 are now covered by Tax No. 4246 in the name of Gavino
Magno, No. 13385, in the name of Nicetas Magno, and No. 4249, in the name of Nazario Magno (pp. 15-16
Record on Appeal).
The lands covered by Tax Declaration Nos. 4246, 4249 and 13385 were owned by the late Nicolas Magno
and must be brought into the mass of his estate.
xxxx
After a careful analysis of the evidence, We uphold the lower court's findings. We repeat, in 1946, according to
defendant Isidro Cabatic, all the heirs have demanded the division of their common properties; and in 1957
another defendant, Teofilo Magno, disclosed that plaintiffs [Gavino Magno, et al. ] have asked for partition of
the lands in question. There is no evidence to show that between 1946 and 1957, defendants have categorically
apprised the plaintiffs of their repudiation of the co-ownership because they have found out that the late
Doroteo Magno was the exclusive owner of all the properties by valuable or other considerations from Nicolas
Magno and/or they and their predecessors have acquired ownership over the lands in question through adverse
possession to the exclusion of plaintiffs and their mother. The complaint for partition was filed on January 23,
1963 or before the lapse often (10) years from 1957 when a chance confrontation between Teofilo Magno and
plaintiffs took place in the office of Atty. Tomas Rapatalo and when defendants refused to share with the
plaintiffs the harvest of the properties.43
Concededly, Elpidio Magno, et al. failed to raise the issue of nunc pro tunc entry at any stage of the proceeding,
in order to include the subject three (3) properties among the other real properties of Nicolas Magno subject to
partition, pursuant to the CFFs final decision in Civil Case No. A-413. The interest of justice, however, impels
the Court to consider and resolve an issue even though not particularly raised, because it is necessary for the
complete adjudication of the rights and obligations of the parties and it falls within the issues already found by
them.44 Such omission on the part of Elpidio Magno, et al. does not preclude the Court from appreciating the
said issue, because to ignore the same would result in a situation where the said three (3) properties would
remain under co-ownership, despite the clear intention of the successors-in-interest of Nicolas Magno to
partition them among themselves.
Elpidio Magno, et al. and Lorenzo Magno, et al, as successors-in-interest of Teofilo Magno, et al. and Gavino
Magno, et al., respectively, cannot be compelled to remain in the co-ownership, pursuant to Article 494 45 of the
New Civil Code. There being neither an agreement or condition to keep the three (3) real properties undivided,
nor a law prohibiting partition of the said properties, much less a showing that any of the co-owners has
acquired them by prescription, each co-owner may demand at any time the partition of the things owned in
common, insofar as her share is concerned. No prejudice to any party would be caused by a nunc pro tunc entry
in this case inasmuch as Article 494 of the same Code explicitly states that no co-owner shall be obliged to
remain in the co-ownership, and each co-owner may demand at any time the partition of the thing owned in
common, insofar as his share is concerned. Having in mind the concept of a nunc pro tunc entry, it bears
stressing that the said properties should be subject to partition and accounting of fruits and income, strictly
under the same terms as those applied to the other real properties of Nicolas Magno, as stated in the dispositive
portion of the CFI Decision in Civil Case No. A-413, namely:
b) Ordering the partition of said properties in four (4) equal parts as follows: one share each of the plaintiffs,
Gavino, Nicetas and Nazaria, all surnamed Magno, and the fourth share to the defendants who represent the
deceased Doroteo Magno;
x x x x
d) Ordering the defendants to account for the annual income or produce of the above-mentioned properties with
the exception of the property described in the preceding paragraph, and to divide the same into four (4) equal
parts in the manner above-described, commencing from 1957 until the accounting is made and the shares
corresponding to the plaintiffs delivered;46
On a final note, partition is a right much favored, because it not only secures peace, but also promotes industry
and enterprise.47 The rule of the civil as of the common law that no one should be compelled to hold property in
common with another grew out of a purpose to prevent strife and disagreement, to facilitate transmission of
titles and avoid the inconvenience of joint holding.48 The reason of the law in recognizing in favor of a co-
owner the right to ask under certain limitations the partition of the property held in common is that the good
faith and harmony which the law regards as necessary to exist among co-owners may sometimes be broken by
one who, against the wish of others, is opposed to the further continuance of the co-ownership. 49 By reason
thereof, the law allows, as a general rule, the pro-indiviso condition to cease and to proceed with the partition of
the party, adjudicating as a result thereof to each of the co-owners their respective interest in the community
property.50chanrobleslaw
WHEREFORE, premises considered, the petition for review on certiorari is DENIED for lack of merit, and
the Decision dated July 23, 2012 of the Court of Appeals in CA-G.R. CV No. 90846 is AFFIRMED. In the
interest of justice, however, the Decision of the Regional Trial Court of Alaminos City, Pangasinan, Branch 54,
in Civil Case No. A-1850, is MODIFIED in the sense that a nunc pro tunc judgment is hereby entered as
follows:
chanRoblesvirtualLawlibrarya) Declaring petitioners Elpidio Magno, et al. 51 and respondents Lorenzo Magno,
et al.52 as the respective successors-in-interest of Teofilo Magno, et al. and Gavino Magno, et al., who are the
legal heirs of Nicolas Magno and, thus, the absolute and exclusive owners of the three (3) real properties
covered by Tax Declaration Nos. 4246, 4249 and 13385; and cralawlawlibrary
b) Ordering the said three (3) properties to be subject of partition and accounting of annual income and produce,
in accordance with the terms of the dispositive portion of the Decision dated October 5, 1972 of the Court of
First Instance of Pangasinan in Civil Case No. A-413.
SO ORDERED.chanRoblesvirtualLawlibrary
7. Province of Pangasinan vs. CA, 2020 SCRA 726
G.R. No. 104266 March 31, 1993
PROVINCE OF PANGASINAN and RAFAEL M. COLET, Petitioners, vs. THE COURT OF APPEALS,

THE REGIONAL TRIAL COURT, QUEZON CITY, BRANCH 80, ROGELIO R. COQUIAL and THE
SHERIFF AND/OR DEPUTY SHERIFF OF RESPONDENT REGIONAL TRIAL COURT, Respondents.
Manuel F. Manuel and Armando Mislang for petitioners.chanrobles virtual law library
Florante A. Miano for respondents.
NOCON, J.:
This is a petition for review on certiorari seeking reversal of the decision of public respondent Court of
Appeals 1dated December 6, 1991 in CA-G.R. SP Case No. 26149; and its resolution dated February 18,
1992.chanroblesvirtualawlibrarychanrobles virtual law library
We shall narrate only the relevant antecedent facts:chanrobles virtual law library
On April 27, 1990, private respondent Rogelio R. Coquial filed a complaint 2against petitioners Province of
Pangasinan and Provincial Governor Rafael M. Colet before the Regional Trial Court of Quezon City, docketed
as Civil Case No. 0-90-5337. He alleged therein the following: 1) they entered into a contract for the
improvement of 6.492 kilometers of the Urdaneta-Mapandan Road, Phase I and Phase II, for a total
consideration of P5,169,932.10; 2) upon 100% completion of Phase I, it was accepted by petitioners and in
accordance with the report of the auditors, private respondent should be paid P3,174,083.20; 3) petitioners had
paid only P1,320,000.00, leaving a balance of P1,854,083.20, which petitioners refused to pay; and 4) he has
also completed 60% of Phase II which costs P1,000,000.00 but petitioners, who have decided not to pursue the
project, refused to pay. He, therefore, prayed for the payment of said amounts; including monetary awards for
damages and attorney's fees.chanroblesvirtualawlibrarychanrobles virtual law library
On December 19, 1990, private respondent filed a motion for partial summary judgment on the balance of
P1,854,083.20.chanroblesvirtualawlibrarychanrobles virtual law library
On April 24, 1991, the trial court granted the motion filed by private respondent. The dispositive portion of its
resolution reads:
WHEREFORE, summary partial judgment of Phase I is hereby rendered in favor of the plaintiff as against the
defendants, ordering the defendants to pay plaintiff the sum of P1,854,083.20 representing the unpaid remaining
balance of the Contract of Cost of Phase I.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED. 3chanrobles virtual law library
At the hearing on April 26, 1991, the counsel of petitioners received a copy of the resolution. He asked the trial
court for a ten (10) day extension from April 26, 1991, within which to file a motion for reconsideration. Instead
of ten (10) days, the trial court granted him twenty (20) days, or until May 16,
1991.chanroblesvirtualawlibrarychanrobles virtual law library
On May 16, 1991, the counsel of petitioners filed an urgent ex-parte motion for extension of time to file the
motion for reconsideration, for an additional ten (10) days, or until May 26, 1991. The motion was granted by
the trial court.chanroblesvirtualawlibrarychanrobles virtual law library
On May 27, 1991, petitioners filed the motion for reconsideration, contending that since May 26, 1991 was a
Sunday, the filing of the motion on the following day was still on time.chanroblesvirtualawlibrarychanrobles
virtual law library
On July 15, 1991, the trial court issued an order denying the motion, a copy of which was received by
petitioners on August 5, 1991. On July 26, 1991, private respondent filed a motion for execution of the partial
summary judgment. On August 28, 1991, petitioners filed a notice of
appeal.chanroblesvirtualawlibrarychanrobles virtual law library
In the trial court's order dated September 3, 1991, it denied due course to the notice of appeal on the ground that
it should have been filed not later than May 11, 1991 and pursuant to Section 5, Rule 36 of the Rules of
Court, 4its resolution dated April 24, 1991 has become final and executory. In the same order, it granted the
motion for execution. 5chanrobles virtual law library
On September 10, 1991, the trial court issued the writ of execution. 6On September 30, 1991, it ordered the
garnishment of petitioners' bank account. 7chanrobles virtual law library
Petitioners then filed a petition for certiorari before public respondent Court of Appeals to nullify the trial
court's order dated September 3, 1991 and the writ of execution; and mandamus to compel the trial court to give
due course to the appeal interposed by them.chanroblesvirtualawlibrarychanrobles virtual law library
On December 6, 1991, the respondent court denied the petition for certiorari and mandamus rationalizing, as

follows:
The petition cannot prosper. In the first place, the rule enunciated in the en banc resolution of the Supreme
Court, promulgated on May 30, 1986, proscribes the filing of a motion for extension of time to file a motion for
reconsideration either with the Metropolitan or Municipal Trial Courts, Regional Trial Courts, or this Court.
[See Bayaca vs. Intermediate Appellate Court, No. L-74824, 144 SCRA 161, 163 (1986) citing Habaluyas
Enterprises, Inc. vs. Japzon, No. L-70895, 138 SCRA 46, 48 (1985)]. In the case at bar the filing of such a (sic)
motion for extension by Pangasinan did not interrupt the period of appeal. Thus, as of May 16 (sic), 1991, i.e.,
the last day within which Pangasinan should have filed its motion for reconsideration, the summary partial
judgment in question became final and executory. The fact that Pangasinan filed its motion for extension of
time to file a motion for reconsideration on that day was of no moment since, for the reason already stated
above, such motion for extension was void.chanroblesvirtualawlibrarychanrobles virtual law library
Furthermore, even on the assumption that the final resolution sought to be appealed from or, to be enforced, is a
partial judgment where multiple appeals are allowed and the period of appeal is 30 days as provided for in Sec.
19(b) of the Interim Rules promulgated on January 11, 1983 by the Supreme Court, still the partial judgment in
question had also become final and executory at the time the notice of appeal was filed for failure of Pangasinan
to file its record on appeal as required by the aforesaid provisions of the Interim Rules. Thus, without a record
on appeal, it is as though no appeal had been taken from such judgment at all. 8chanrobles virtual law library
On December 19, 1991, petitioners filed an urgent motion for reconsideration based on the ground that the trial
court's resolution dated April 24, 1991 is merely interlocutory, citing the case of Guevarra, et al. v. Court of
Appeals, et al. 9They elucidated that this ground was the subject of their addendum dated December 11, 1991,
which unknown to them, was prepared and filed after the decision of the respondent court was rendered. They,
therefore prayed, inter alia, that the respondent court reconsider its decision and render another confirming that
the April 24, 1991 resolution of the trial court is interlocutory and declaring void the writ of execution and order
of garnishment.chanroblesvirtualawlibrarychanrobles virtual law library
On February 18, 1992, the motion for reconsideration was denied after the respondent court found "no cogent
reason to change, modify and/or otherwise reverse the decision considering that not only does the motion
reiterate the same arguments advanced before and does not present any matter not already considered and
resolved in the decision, but also the private respondent's opposition has successfully refuted petitioners'
arguments in said motion." 10chanrobles virtual law library
Hence, the present petition, wherein petitioners again invoke Our ruling in Guevarra, et al. v. Court of Appeals,
at el., supra.chanroblesvirtualawlibrarychanrobles virtual law library
Petitioners are correct.chanroblesvirtualawlibrarychanrobles virtual law library
We were categorical in the case of Guevarra, et al. v. Court of Appeals, et al., supra, that a partial summary
judgment is merely interlocutory and not a final judgment. Its nature is specifically provided for in Section 4 of
Rule 34 of the Rules of Court, which reads:
Sec. 4. Case not fully adjudicated on motion. - If on motion under this rule, judgment is not rendered upon the
whole case or for all the relief asked and a trial is necessary, the court at the hearing of the motion, by
facts exist without substantial controversy and what material facts are actually and in good faith controverted. It
shall thereupon make an order specifying the facts that appear without substantial controversy, including the
extent to which the amount of damages or other relief is not in controversy, and directing such further
proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed
established, and the trial shall be conducted accordingly.
What Rule 34 contemplates is that the appeal from the partial summary judgment shall be taken together with
the judgment that may be rendered in the entire case after a trial is conducted on the material facts on which a
substantial controversy exists. The trial court and the respondent court erroneously relied on Section 5 of Rule
36 of the Rules of Court, which pertains to judgments in general.chanroblesvirtualawlibrarychanrobles virtual
law library
shall not issue, conformably with Section 1 of Rule 39 of the Rules of
Court.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the petition is hereby GRANTED. The questioned decision and resolution of the Court of
Appeals are SET ASIDE. The trial court's orders dated September 3, 10 and 30, 1991 are likewise SET
ASIDE.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED.
8. Custodio vs. SB March 8, 2015
G.R. Nos. 96027-28. March 08, 2005
BRIG. GEN. LUTHER A. CUSTODIO*, CAPT. ROMEO M. BAUTISTA, 2nd LT. JESUS D. CASTRO,
SGT. CLARO L. LAT, SGT. ARNULFO B. DE MESA, C1C ROGELIO B. MORENO, C1C MARIO E.
LAZAGA, SGT. FILOMENO D. MIRANDA, SGT. ROLANDO C. DE GUZMAN, SGT. ERNESTO M.
MATEO, SGT. RODOLFO M. DESOLONG, A1C CORDOVA G. ESTELO, MSGT. PABLO S.
MARTINEZ, SGT. RUBEN AQUINO, SGT. ARNULFO ARTATES, A1C FELIZARDO
TARAN, Petitioners, vs. SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, Respondents.
RESOLUTION
Puno, J.:
Before us is a Motion To Re-Open Case With Leave Of Court filed by petitioners who were convicted and
sentenced to reclusion perpetua by the Sandiganbayan in Criminal Cases Nos. 10010 and 10011 for the double
murder of Senator Benigno Aquino, Jr. and Rolando Galman on August 21, 1983.[1]
Petitioners were members of the military who acted as Senator Aquino's security detail upon his arrival in
Manila from his three-year sojourn in the United States. They were charged, together with several other
members of the military, before the Sandiganbayan for the killing of Senator Aquino who was fatally shot as he
was coming down from the aircraft of China Airlines at the Manila International Airport. Petitioners were also
indicted for the killing of Rolando Galman who was also gunned down at the airport tarmac.
On December 2, 1985, the Sandiganbayan rendered a Decision in Criminal Cases Nos. 10010-10011 acquitting
all the accused, which include the petitioners. However, the proceedings before the Sandiganbayan were later
found by this Court to be a sham trial. The Court thus nullified said proceedings, as well as the judgment of
acquittal, and ordered a re-trial of the cases.[2]
A re-trial ensued before the Sandiganbayan.
In its decision dated September 28, 1990, the Sandiganbayan, while acquitting the other accused, found the
petitioners guilty as principals of the crime of murder in both Criminal Cases Nos. 10010 and 10011. It
sentenced them to reclusion perpetua in each case.[3] The judgment became final after this Court denied
petitioners' petition for review of the Sandiganbayan decision for failure to show reversible error in the
questioned decision,[4] as well as their subsequent motion for reconsideration.[5]
In August 2004, petitioners sought legal assistance from the Chief Public Attorney who, in turn, requested the
Independent Forensic Group of the University of the Philippines to make a thorough review of the forensic
evidence in the double murder case. The petitioners, assisted by the Public Attorney's Office, now want to
present the findings of the forensic group to this Court and ask the Court to allow the re-opening of the cases
and the holding of a third trial to determine the circumstances surrounding the death of Senator Benigno
Aquino, Jr. and Rolando Galman.
Petitioners invoke the following grounds for the re-opening of the case:
I
Existence of newly discovered pieces of evidence that were not available during the second trial of the above-
entitled cases which could have altered the judgment of the Sandiganbayan, specifically:
A) Independent forensic evidence uncovering the false forensic claims that led to the unjust conviction of
the petitioners-movants.
B) A key defense eyewitness to the actual killing of Senator Benigno Aquino, Jr.
II
There was a grave violation of due process by reason of:
A) Insufficient legal assistance of counsel;
B) Deprivation of right to counsel of choice;
C) Testimonies of defense witnesses were under duress;
D) Willful suppression of evidence;
E) Use of false forensic evidence that led to the unjust conviction of the petitioners-movants.
III
There was serious misapprehension of facts on the part of the Sandiganbayan based on false forensic evidence,
which entitles petitioners-movants to a re-trial.[6]
Petitioners seek to present as new evidence the findings of the forensic group composed of Prof. Jerome B.
Bailen, a forensic anthropologist from the University of the Philippines, Atty. Erwin P. Erfe, M.D., a medico-
legal practitioner, Benito E. Molino, M.D., a forensic consultant and Human Rights and Peace Advocate, and
Anastacio N. Rosete, Jr., D.M.D., a forensic dentistry consultant. Their report essentially concludes that it was
not possible, based on the forensic study of the evidence in the double murder case, that C1C Rogelio Moreno
fired at Senator Aquino as they descended the service stairway from the aircraft. They posit that Senator Aquino
was shot while he was walking on the airport tarmac toward the waiting AVSECOM van which was supposed
to transport him from the airport to Fort Bonifacio. This is contrary to the finding of the Sandiganbayan in the
second trial that it was C1C Moreno, the security escort positioned behind Senator Aquino, who shot the latter.
The report also suggests that the physical evidence in these cases may have been misinterpreted and
manipulated to mislead the court. Thus, petitioners assert that the September 28, 1990 decision of the
Sandiganbayan should be voided as it was based on false forensic evidence. Petitioners submit that the review
by the forensic group of the physical evidence in the double murder case constitutes newly discovered
evidence which would entitle them to a new trial under Rule 121 of the 2000 Rules of Criminal Procedure. In
addition to the report of the forensic group, petitioners seek to present the testimony of an alleged eyewitness,
the driver of the waiting AVSECOM van, SPO4 Ruben M. Cantimbuhan. In his affidavit submitted to this
Court, SPO4 Cantimbuhan states that he saw a man in blue uniform similar to that of the Philippine Airlines
maintenance crew, suddenly fire at Senator Aquino as the latter was about to board the van. The man in blue
was later identified as Rolando Galman.
Petitioners pray that the Court issue a resolution:

1. [a]nnulling and setting aside this Honorable Court's Resolutions dated July 23, 1991 and September 10, 1991;
2. [a]nnulling and setting aside the Decision of the Sandiganbayan (3rd Division) dated September 28, 1990 in
People vs. Custodio, et al., Case No. 10010-10011[;]
3. [o]rdering the re-opening of this case; [and]
4. [o]rdering the Sandiganbayan to allow the reception of additional defense evidence/re-trial in the above
entitled cases.[7] '
The issue now is whether petitioners are entitled to a third trial under Rule 121 of the 2000 Rules of Criminal
Procedure.
The pertinent sections of Rule 121 of the 2000 Rules of Criminal Procedure provide:
Section 1. New Trial or reconsideration. ' At any time before a judgment of conviction becomes final, the court
may, on motion of the accused or at its own instance but with the consent of the accused, grant a new trial or
reconsideration.
Sec. 2. Grounds for a new trial. ' The court shall grant a new trial on any of the following grounds:
(a) That errors of law or irregularities prejudicial to the substantial rights of the accused have been committed
during the trial;
(b) That new and material evidence has been discovered which the accused could not with reasonable
diligence have discovered and produced at the trial and which if introduced and admitted would
probably change the judgment.
xxx
Sec. 6. Effects of granting a new trial or reconsideration. ' The effects of granting a new trial or
reconsideration are the following:
(a) When a new trial is granted on the ground of errors of law or irregularities committed during the trial, all the
proceedings and evidence affected thereby shall be set aside and taken anew. The court may, in the interest of
justice, allow the introduction of additional evidence.
(b) When a new trial is granted on the ground of newly discovered evidence, the evidence already adduced shall
stand and the newly-discovered and such other evidence as the court may, in the interest of justice, allow to be
introduced shall be taken and considered together with the evidence already in the record.
(c) In all cases, when the court grants new trial or reconsideration, the original judgment shall be set aside or
vacated and a new judgment rendered accordingly. (emphasis supplied)
In line with the objective of the Rules of Court to set guidelines in the dispensation of justice, but without
shackling the hands that dispense it, the remedy of new trial has been described as 'a new invention to temper
the severity of a judgment or prevent the failure of justice.[8] Thus, the Rules allow the courts to grant a new
trial when there are errors of law or irregularities prejudicial to the substantial rights of the accused committed
during the trial, or when there exists newly discovered evidence. In the proceedings for new trial, the errors of
law or irregularities are expunged from the record or new evidence is introduced. Thereafter, the original
judgment is vacated and a new one is rendered.[9]
Under the Rules, a person convicted of a crime may avail of the remedy of new trial before the judgment of
conviction becomes final. Petitioners admit that the decision of the Sandiganbayan in Criminal Cases Nos.
10010 and 10011 became final and executory upon denial of their petition for review filed before this Court and
their motion for reconsideration. Entry of judgment has in fact been made on September 30, 1991.
[10] Nonetheless, they maintain that equitable considerations exist in this case to justify the relaxation of the
Rules and re-open the case to accord petitioners the opportunity to present evidence that will exonerate them
from the charges against them. We do not find merit in their submission.
Petitioners anchor their motion on the ground of newly discovered evidence. Courts are generally reluctant in
granting motions for new trial on the ground of newly discovered evidence for it is presumed that the moving
party has had ample opportunity to prepare his case carefully and to secure all the necessary evidence before the
trial. Such motions are treated with great caution due to the danger of perjury and the manifest injustice of
allowing a party to allege that which may be the consequence of his own neglect to defeat an adverse judgment.
Hence, the moving party is often required to rebut a presumption that the judgment is correct and that there has
been a lack of due diligence, and to establish other facts essential to warrant the granting of a new trial on the
ground of newly discovered evidence.[11] This Court has repeatedly held that before a new trial may be granted
on the ground of newly discovered evidence, it must be shown (1) that the evidence was discovered after trial;
(2) that such evidence could not have been discovered and produced at the trial even with the exercise of
reasonable diligence; (3) that it is material, not merely cumulative, corroborative, or impeaching; and (4) the
evidence is of such weight that it would probably change the judgment if admitted. If the alleged newly
discovered evidence could have been very well presented during the trial with the exercise of reasonable
diligence, the same cannot be considered newly discovered.[12]
These standards, also known as the 'Berry rule, trace their origin to the 1851 case of Berry vs. State of
Georgia [13] where the Supreme Court of Georgia held:
Applications for new trial on account of newly discovered evidence, are not favored by the Courts. x x x Upon
the following points there seems to be a pretty general concurrence of authority, viz; that it is incumbent on a
party who asks for a new trial, on the ground of newly discovered evidence, to satisfy the Court, 1 st. That the
evidence has come to his knowledge since the trial. 2d. That it was not owing to the want of due diligence that it
did not come sooner. 3d. That it is so material that it would produce a different verdict, if the new trial were
granted. 4th. That it is not cumulative only ' viz; speaking to facts, in relation to which there was evidence on the
trial. 5th. That the affidavit of the witness himself should be produced, or its absence accounted for. And 6 th, a
new trial will not be granted, if the only object of the testimony is to impeach the character or credit of a
witness. (citations omitted)
These guidelines have since been followed by our courts in determining the propriety of motions for new trial
based on newly discovered evidence.
It should be emphasized that the applicant for new trial has the burden of showing that the new evidence he
seeks to present has complied with the requisites to justify the holding of a new trial.
The threshold question in resolving a motion for new trial based on newly discovered evidence is whether the
proferred evidence is in fact a 'newly discovered evidence which could not have been discovered by due
diligence. The question of whether evidence is newly discovered has two aspects: a temporal one, i.e.,
when was the evidence discovered, and a predictive one, i.e., when should or could it have been discovered. It
is to the latter that the requirement of due diligence has relevance.[14] We have held that in order that a
particular piece of evidence may be properly regarded as newly discovered to justify new trial, what is essential
is not so much the time when the evidence offered first sprang into existence nor the time when it first came to
the knowledge of the party now submitting it; what is essential is that the offering party had
exercised reasonable diligence in seeking to locate such evidence before or during trial but had nonetheless
failed to secure it.[15]
The Rules do not give an exact definition of due diligence, and whether the movant has exercised due diligence
depends upon the particular circumstances of each case.[16] Nonetheless, it has been observed that the phrase is
often equated with reasonable promptness to avoid prejudice to the defendant. In other words, the concept of
due diligence has both a time component and a good faith component. The movant for a new trial must not
only act in a timely fashion in gathering evidence in support of the motion; he must act reasonably and in good
faith as well. Due diligence contemplates that the defendant acts reasonably and in good faith to obtain the
evidence, in light of the totality of the circumstances and the facts known to him.[17]
Applying the foregoing tests, we find that petitioners' purported evidence does not qualify as newly discovered
evidence that would justify the re-opening of the case and the holding of a third trial.
The report of the forensic group may not be considered as newly discovered evidence as petitioners failed to
show that it was impossible for them to secure an independent forensic study of the physical evidence during
the trial of the double murder case. It appears from their report that the forensic group used the same
physical and testimonial evidence proferred during the trial, but made their own analysis and
interpretation of said evidence. They cited the materials and methods that they used for their study, viz:
MATERIALS AND METHODS
MATERIALS:
a. Court records of the case, especially photographs of: a) the stairway where the late Sen. Aquino and his
escorts descended; b) the part of the tarmac where the lifeless bodies of the late Sen. Aquino and
Galman fell; and c) the autopsy conducted by the NBI Medico-legal team headed by Dr. Mu[]oz; and
the autopsy report of the late Sen. Benigno Aquino[,] Jr. signed by Dr. Mu[]oz and Dr. Solis;
b. The gun and live ammunitions collected at the crime scene;
c. A reference human skull photos and X-rays of the same to demonstrate wound location and bullet
trajectory;
d. The reports of interviews and statements by the convicted military escorts, and other witnesses;
e. Re-enactment of the killing of Aquino based on the military escorts[] version, by the military escorts
themselves in the Bilibid Prison and by volunteers at the NAIA Tarmac;
f. Various books and articles on forensic and the medico-legal field[;]
g. Results of Forensic experiments conducted in relation to the case.
METHODS:
a. Review of the forensic exhibits presented in the court;
b. Review of TSNs relevant to the forensic review;
c. Study of and research on the guns, slugs and ammunitions allegedly involved in the crime;
d. Interviews/re-enactment of the crime based on the military's accounts, both in the Bilibid Prison where
the convicts are confined and the MIA (now NAIA) stairway and tarmac;
e. Conduct of ocular inspection and measurements on the actual crime scene (stairway and tarmac) at the
old Manila International Airport (now NAIA);
f. Retracing the slug's trajectory based on the autopsy reports and experts' testimonies using an actual
human skull;
g. X-rays of the skull with the retraced trajectory based on the autopsy report and experts' testimonies;
h. Evaluation of the presented facts and opinions of local experts in relation to accepted forensic findings
in international publications on forensic science, particularly on guns and [gunshot] wound injuries;
i. Forensic experiments and simulations of events in relation to this case.[18]
These materials were available to the parties during the trial and there was nothing that prevented the petitioners
from using them at the time to support their theory that it was not the military, but Rolando Galman, who killed
Senator Aquino. Petitioners, in their present motion, failed to present any new forensic evidence that could not
have been obtained by the defense at the time of the trial even with the exercise of due diligence. If they really
wanted to seek and offer the opinion of other forensic experts at the time regarding the physical evidence
gathered at the scene of the crime, there was ample opportunity for them to do so before the case was finally
submitted and decided.[19]
A reading of the Sandiganbayan decision dated September 28, 1990 shows a thorough study by the court of the
forensic evidence presented during the trial, viz:
COURT FINDINGS
As to the physical
evidence
Great significance has to be accorded the trajectory of the single bullet that penetrated the head and caused the
death of Sen. Benigno Aquino, Jr. Basic to the question as to trajectory ought to be the findings during the
autopsy. The prosector in the autopsy, Dr. Bienvenido Muoz, NBI Medico-Legal Officer, reported in his
Autopsy Report No. N-83-22-36, that the trajectory of the gunshot, the wound of entrance having been located
at the mastoid region, left, below the external auditory meatus, and the exit wound having been at the anterior
portion of the mandible, was 'forward, downward and medially. (Autopsy Report No. N-83-22-36, Exhibit
'NNNN-2-t-2')
A controversy as to this trajectory came about when, upon being cross-examined by counsel for the defense, Dr.
Bienvenido Muoz made a significant turn-about by stating that the correct trajectory of the fatal bullet was
'upward, downward, and medially. The present position of Dr. Muoz is premised upon the alleged fact that he
found the petrous bone fractured, obviously hit by the fatal bullet. He concluded, in view of this finding, that the
fatal bullet must have gone upward from the wound of entrance. Since the fatal bullet exited at the mandible, it
is his belief that the petrous bone deflected the trajectory of the bullet and, thus, the bullet proceeded
downwards from the petrous bone to the mandible.
This opinion of Dr. Bienvenido Muoz in this regard notwithstanding, We hold that the trajectory of the fatal
bullet which killed Sen. Benigno Aquino, Jr. was, indeed, 'forward, downward and medially. For the reason that
the wound of entrance was at a higher elevation than the wound of exit, there can be no other conclusion but
that the trajectory was downward. The bullet when traveling at a fast rate of speed takes a straight path from the
wound of entrance to the wound of exit. It is unthinkable that the bullet, while projected upwards, would,
instead of exiting to the roof of the head, go down to the mandible because it was allegedly deflected by a
petrous bone which though hard is in fact a mere spongy protuberance, akin to a cartilage.
Clear is proof of the downward trajectory of the fatal bullet; First, as Dr. Pedro Solis and Dr. Ceferino Cunanan,
the immediate superiors of Dr. Bienvenido Muoz, manifested before the Court, that, since the wound of
entrance appeared ovaloid and there is what is known as a contusion collar which was widest at the superior
portion, indicating an acute angle of approach, a downward trajectory of the bullet is indicated. This
phenomenon indicates that the muzzle of the fatal gun was at a level higher than that of the point of entry of the
fatal bullet.
There was no showing as to whether a probe could have been made from the wound of entrance to the petrous
bone. Out of curiosity, Dr. Juanito Billote tried to insert a probe from the wound of exit into the petrous bone.
He was unsuccessful notwithstanding four or five attempts. If at all, this disproves the theory of Dr. Muoz that
the trajectory was upward, downward and medially. On the other hand, Dr. Juanito Billote and photographer
Alexander Loinaz witnessed the fact that Dr. Muoz[s] understudy, Alejandrino Javier, had successfully made a
probe from the wound of entrance directly towards the wound of exit. Alejandrino Javier shouted with
excitement upon his success and Alexander Loinaz promptly photographed this event with Alejandrino Javier
holding the protruding end of the probe at the mandible. (Exhibit XXXXX-39-A')
To be sure, had the main bullet hit the petrous bone, this spongy mash of cartilage would have been decimated
or obliterated. The fact that the main bullet was of such force, power and speed that it was able to bore a hole
into the mandible and crack it, is an indication that it could not have been stopped or deflected by a mere
petrous bone. By its power and force, it must have been propelled by a powerful gun. It would have been
impossible for the main bullet to have been deflected form an upward course by a mere spongy protuberance.
Granting that it was so deflected, however, it could not have maintained the same power and force as when it
entered the skull at the mastoid region so as to crack the mandible and make its exit there.
But what caused the fracture of the petrous bone? Was there a cause of the fracture, other than that the bullet
had hit it? Dr. Pedro Solis, maintaining the conclusion that the trajectory of the bullet was downward, gave the
following alternative explanations for the fracture of the petrous bone:
First, the petrous bone could have been hit by a splinter of the main bullet, particularly, that which was found at
the temporal region; and,
Second, the fracture must have been caused by the kinetic force applied to the point of entrance at the mastoid
region which had the tendency of being radiated towards the petrous bone.
Thus, the fracture in the occipital bone, of the temporal bone, and of the parietal bone, Dr. Pedro Solis pointed
out, had been caused by the aforesaid kinetic force. When a force is applied to the mastoid region of the head,
Dr. Pedro Solis emphasized, a radiation of forces is distributed all over the cranial back, including, although not
limited to, the parietal bone. The skull, Dr. Solis explains, is a box-like structure. The moment you apply
pressure on the portion, a distortion, tension or some other mechanical defect is caused. This radiation of forces
produces what is known as the 'spider web linear fracture which goes to different parts of the body. The so-
called fracturing of the petrous portion of the left temporal bone is one of the consequences of the kinetic force
forcefully applied to the mastoid region.
The fact that there was found a fracture of the petrous bone is not necessarily indicative of the theory that the
main bullet passed through the petrous bone.
Doubt was expressed by Dr. Pedro Solis as to whether the metal fragments alleged by Dr. Bienvenido Muoz to
have been found by him inside the skull or at the wound of exit were really parts of the main bullet which killed
the Senator. When Dr. Pedro Solis examined these fragments, he found that two (2) of the fragments were
larger in size, and were of such shapes, that they could not have gone out of the wound of exit considering the
size and shape of the exit wound.
Finding of a downward
trajectory of the
fatal bullet fatal
to the credibility
of defense witnesses.
The finding that the fatal bullet which killed Sen. Benigno Aquino, Jr. was directed downwards sustains the
allegation of prosecution eyewitnesses to the effect that Sen. Benigno Aquino, Jr. was shot by a military soldier
at the bridge stairs while he was being brought down from the plane. Rebecca Quijano saw that the senator was
shot by the military man who was directly behind the Senator while the Senator and he were descending the
stairs. Rebecca Quijano's testimony in this regard is echoed by Jessie Barcelona, Ramon Balang, Olivia
Antimano, and Mario Laher, whose testimonies this Court finds likewise as credible.
The downward trajectory of the bullet having been established, it stands to reason that the gun used in shooting
the Senator was fired from an elevation higher than that of the wound of entrance at the back of the head of the
Senator. This is consistent with the testimony of prosecution witnesses to the effect that the actual killer of the
Senator shot as he stood at the upper step of the stairs, the second or third behind Senator Aquino, while Senator
Aquino and the military soldiers bringing him were at the bridge stairs. This is likewise consistent with the
statement of Sandra Jean Burton that the shooting of Senator Aquino occurred while the Senator was still on the
bridge stairs, a conclusion derived from the fact that the fatal shot was fired ten (10) seconds after Senator
Aquino crossed the service door and was led down the bridge stairs.
It was the expert finding of Dr. Matsumi Suzuki that, as was gauged from the sounds of the footsteps of Senator
Aquino, as the Senator went down the bridge stairs, the shooting of the Senator occurred while the Senator had
stepped on the 11th step from the top.
At the ocular inspection conducted by this Court, with the prosecution and the defense in attendance, it should
be noted that the following facts were established as regards the bridge stairs:
Observations:
The length of one block covering the ' tarmac ' 196;
The width of one block covering the tarmac ' 10;
The distance from the base of the staircase leading to the emergency tube to the Ninoy marker at
the tarmac ' 126;
There are 20 steps in the staircase including the landing;
The distance from the first rung of the stairway up to the 20 th rung which is the landing of stairs '
208;
Distance from the first rung of the stairway up to the 20th rung until the edge of the exit door '
2311;
Distance from the 4th rung up to the exit door ' 21;
Distance from the 5th rung up to the exit door ' 1911;
Length of one rung including railpost ' 34;
Space between two rungs of stairway ' 9;
Width of each rung ' 11-1/2;
Length of each rung (end to end) ' 29:
Height of railpost from edge of rung to railing ' 25.
(underlining supplied)[20]
The Sandiganbayan again exhaustively analyzed and discussed the forensic evidence in its resolution dated
November 15, 1990 denying the motion for reconsideration filed by the convicted accused. The court held:
The Autopsy Report No. N-83-2236, Exhibit 'NNNN-2-t-2 indicated a downward trajectory of the fatal bullet
when it stated that the fatal bullet was 'forward, downward, and medially . . .
xxx
II
The wound of entrance having been at a higher elevation than the wound of exit, there can be no other
conclusion but that the trajectory was downward. The fatal bullet, whether it be a Smith and Wesson
Caliber .357 magnum revolver or a .45 caliber, must have traveled at a fast rate of speed and it stands to reason
that it took a straight path from the wound of entrance to the wound of exit. A hole indicating this straight path
was proven to have existed. If, as contended on cross-examination by Dr. Bienvenido Muoz, that the bullet was
projected upwards, it ought to have exited at the roof of the head. The theory that the fatal bullet was deflected
by a mere petrous bone is inconceivable.
III
Since the wound of entrance appeared ovaloid and there is what is known as a contusion collar which was
widest at the superior portion, indicating an acute angle of approach, a downward trajectory of the fatal bullet is
conclusively indicated. This phenomenon indicates that the muzzle of the fatal gun was at a level higher than
that of the point of entry of the fatal bullet.
IV
There was no hole from the petrous bone to the mandible where the fatal bullet had exited and, thus, there is no
support to the theory of Dr. Bienvenido Muoz that the fatal bullet had hit the petrous bone on an upward
trajectory and had been deflected by the petrous bone towards the mandible. Dr. Juanito Billote's testimony in
this regard had amplified the matter with clarity.
xxx
These physical facts, notwithstanding the arguments and protestations of counsel for the defense as now and
heretofore avowed, compel the Court to maintain the holding: (1) that the trajectory of the fatal bullet which hit
and killed Senator Benigno Aquino, Jr. was 'forward, downward and medially; (2) that the Senator was shot by
a person who stood at a higher elevation than he; and (3) that the Senator was shot and killed by CIC Rogelio
Moreno on the bridge stairs and not on the tarmac, in conspiracy with the rest of the accused convicted herein.
[21]
This Court affirmed said findings of the Sandiganbayan when it denied the petition for review in its resolution
of July 25, 1991. The Court ruled:
The Court has carefully considered and deliberated upon all the contentions of the petitioners but finds no basis
for the allegation that the respondent Sandiganbayan has gravely erred in resolving the factual issues.
The attempt to place a constitutional dimension in the petition is a labor in vain. Basically, only questions of
fact are raised. Not only is it axiomatic that the factual findings of the Sandiganbayan are final unless they fall
within specifically recognized exceptions to the rule but from the petition and its annexes alone, it is readily
apparent that the respondent Court correctly resolved the factual issues.
xxx
The trajectory of the fatal bullet, whether or not the victim was descending the stairway or was on the tarmac
when shot, the circumstances showing conspiracy, the participants in the conspiracy, the individual roles of the
accused and their respective parts in the conspiracy, the absence of evidence against thirteen accused and their
co-accused Col. Vicente B. Tigas, Jr., the lack of credibility of the witnesses against former Minister Jose D.
Aspiras, Director Jesus Z. Singson, Col. Arturo A. Custodio, Hermilo Gosuico, Major General Prospero Olivas,
and the shooting of Rolando Galman are all factual matters w[h]ich the respondent court discussed with fairness
and at length. The petitioners' insistence that a few witnesses in their favor should be believed while that of
some witnesses against them should be discredited goes into the question of credibility of witnesses, a matter
which under the records of this petition is best left to the judgment of the Sandiganbayan.[22]
The report of the forensic group essentially reiterates the theory presented by the defense during the trial
of the double murder case. Clearly, the report is not newly discovered, but rather recently sought, which is not
allowed by the Rules.[23] If at all, it only serves to discredit the version of the prosecution which had already
been weighed and assessed, and thereafter upheld by the Sandiganbayan.
The same is true with the statement of the alleged eyewitness, SPO4 Cantimbuhan. His narration merely
corroborates the testimonies of other defense witnesses during the trial that they saw Senator Aquino already
walking on the airport tarmac toward the AVSECOM van when a man in blue-gray uniform darted from behind
and fired at the back of the Senator's head.[24] The Sandiganbayan, however, did not give weight to their
account as it found the testimonies of prosecution eyewitnesses Rebecca Quijano and Jessie Barcelona more
credible. Quijano and Barcelona testified that they saw the soldier behind Senator Aquino on the stairway aim
and fire a gun on the latter's nape. As earlier quoted, the Sandiganbayan found their testimonies to be more
consistent with the physical evidence. SPO4 Cantimbuhan's testimony will not in any way alter the court's
decision in view of the eyewitness account of Quijano and Barcelona, taken together with the physical evidence
presented during the trial. Certainly, a new trial will only be allowed if the new evidence is of such weight
that it would probably change the judgment if admitted. [25] Also, new trial will not be granted if the
new evidence is merely cumulative, corroborative or impeaching.
As additional support to their motion for new trial, petitioners also claim that they were denied due process
because they were deprived of adequate legal assistance by counsel. 'We are not persuaded. The records will
bear out that petitioners were ably represented by Atty. Rodolfo U. Jimenez during the trial and when the case
was elevated to this Court. An experienced lawyer in criminal cases, Atty. Jimenez vigorously defended the
petitioners' cause throughout the entire proceedings. The records show that the defense presented a substantial
number of witnesses and exhibits during the trial. After the Sandiganbayan rendered its decision, Atty. Jimenez
filed a petition for review with this Court, invoking all conceivable grounds to acquit the petitioners. When the
Court denied the petition for review, he again filed a motion for reconsideration exhausting his deep reservoir of
legal talent. We therefore find petitioners' claim to be unblushingly unsubstantiated. We note that they did not
allege any specific facts in their present motion to show that Atty. Jimenez had been remiss in his duties as
counsel. Petitioners are therefore bound by the acts and decisions of their counsel as regards the conduct of the
case. The general rule is that the client is bound by the action of his counsel in the conduct of his case and
cannot be heard to complain that the result of the litigation might have been different had his counsel proceeded
differently.[26] We held in People vs. Umali:[27]
In criminal as well as civil cases, it has frequently been held that the fact that blunders and mistakes may have
been made in the conduct of the proceedings in the trial court, as a result of the ignorance, inexperience, or
incompetence of counsel, does not furnish a ground for a new trial.
If such grounds were to be admitted as reasons for reopening cases, there would never be an end to a suit so
long as new counsel could be employed who could allege and show that prior counsel had not been sufficiently
diligent, or experienced, or learned.
So it has been held that mistakes of attorneys as to the competency of a witness, the sufficiency, relevancy,
materiality, or immateriality of a certain evidence, the proper defense, or the burden of proof are not proper
grounds for a new trial; and in general the client is bound by the action of his counsel in the conduct of his case,
and can not be heard to complain that the result of the litigation might have been different had counsel
proceeded differently. (citations omitted)
Finally, we are not moved by petitioners' assertion that the forensic evidence may have been manipulated and
misinterpreted during the trial of the case. Again, petitioners did not allege concrete facts to support their crass
claim. Hence, we find the same to be unfounded and purely speculative.
IN VIEW WHEREOF, the motion is DENIED.
SO ORDERED.
9. Fernandez vs. CA, May 16, 2005
G.R. No. 131094 May 16, 2005
ATTY. JESUS F. FERNANDEZ, petitioner,

vs.
HON. COURT OF APPEALS and CONCEPCION OLIVARES, respondents.
DECISION
CHICO-NAZARIO, J.:
The undisputed facts of this case show that a Complaint dated 23 January 1993 for unlawful detainer docketed
as Civil Case No. 140953 was filed by private respondent Concepcion Olivares against the herein petitioner
Jesus Fernandez.1 The Metropolitan Trial Court of Manila (MeTC), Branch XV, dismissed the Complaint for
lack of sufficient cause of action.2
Olivares appealed to the Regional Trial Court (RTC) of Manila, Branch 46, and the latter reversed the MeTC,
ordering Fernandez to pay rental arrearages, attorney's fees, litigation expenses and costs 3 in a decision dated 02
May 1994.4
On 28 June 1994, Fernandez received a copy of the decision. On 12 July 1994 or 14 days after receipt of the
decision, he filed a Motion for Reconsideration. 5 On 29 November 1994, Fernandez received an order denying
his motion for reconsideration.6 On 01 December 1994, Fernandez filed with the Court of Appeals a Motion for
Extension of Time to File Petition for Review which was granted. 7 Said resolution was received by Fernandez
on 12 December 1994.
In the meantime, on 09 December 1994, Fernandez filed a Motion for New Trial, 8 docketed as Civil Case No.
93-67034, before the RTC of Manila, Branch 46, citing newly discovered evidence of receipts proving his rental
payments. In view of his Motion for New Trial, Fernandez, thru counsel, filed on 29 December 1994 in the
Court of Appeals a Motion to Withdraw his Petition For Review 9 which the court duly noted in its resolution
dated 19 January 1995.10
In an Order11 dated 06 February 1995, the RTC denied the Motion for New Trial. It explained that when
Fernandez went to the Court of Appeals and filed a Motion for Extension of Time to File Petition for Review,
and the Court of Appeals accordingly acted on the same by granting the extension sought, jurisdiction of the
Court of Appeals over the parties and the subject matter had already attached.
Fernandez filed a motion for reconsideration which the trial court denied in its Order dated 14 December
1995.12 Fernandez filed a Motion to Reconsider the Order, while Olivares moved for the execution of the
judgment of the RTC citing Section 21 of the Revised Rules on Summary Procedure. 13 In an Order dated 30
January 1996, the RTC granted the Motion for Execution and denied the Motion for Reconsideration. 14 A writ
of execution was in fact issued by the RTC on 31 January 1996.15
This prompted Fernandez to file a Petition for Certiorari, Prohibition and Mandamus with prayer for the
issuance of a writ of preliminary injunction and temporary restraining order, docketed as CA-G.R. SP No.
39655, before the Court of Appeals.16
The Court of Appeals, in a resolution dated 14 February 1996 temporarily restrained the respondents from
proceeding with the enforcement of the writ of execution, "so as not to render the petition moot and ineffectual
pending fuller consideration thereof, as well as for the preservation of the rights of the parties." 17 In a
decision18 dated 16 May 1997, the Court of Appeals denied the Petition and affirmed the stance of the RTC. It
ruled:
When petitioner herein elected to file before this Court a motion for extension of time to file petition for
review, he in effect opted to appeal the adverse decision of the Regional Trial Court of Manila to the
Court of Appeals. This is so because appeal to this Court is perfected by petition for review, where
judgment was rendered by the Regional Trial Court in the exercise of appellate jurisdiction. This Court's
assumption of appellate jurisdiction resulted initially in the issuance of the resolution granting petitioner
an extension of fifteen (15) days within which to file the petition for review. Since this Court acquired
appellate jurisdiction, the only proper thing for the court below to do was to deny the motion for new
trial.19
Fernandez filed a Motion for Reconsideration which the Court of Appeals denied in a resolution dated 13
October 1997.20
Hence, this petition.
In a resolution of this Court dated 26 January 1998, 21 respondents were required to file their Comment on the
Petition. Private respondent Olivares submitted her Comment on 26 February 1998. 22 Fernandez, in turn, was
directed to file his Reply.23 After the submission of Fernandez's reply,24 the parties were then required by this
Court, in a resolution25 dated 02 December 1998, to submit their respective memoranda.
The only issue26 submitted for resolution in this case is:
WHETHER OR NOT THE MERE FILING BY PETITIONER OF A MOTION FOR EXTENSION OF

TIME TO FILE PETITION FOR REVIEW (WHICH INTENTION [sic] WAS LATER
WITHDRAWN), AUTOMATICALLY DIVESTED THE REGIONAL TRIAL COURT (RTC) OF ITS
JURISDICTION OVER THE CASE, AS TO ENTERTAIN A MOTION FOR NEW TRIAL.
In general, in order for a Court to have authority to dispose of the case on the merits, it must acquire jurisdiction
over the subject matter and over the parties. 27 Jurisdiction over the subject matter, or the jurisdiction to hear and
decide a case, is conferred by law.28 Jurisdiction over the person, on the other hand, is acquired by service of
summons or by voluntary appearance.29
At first glance and mindful of the rule that the filing of motions seeking affirmative relief, such as the motion
for extension of time to file petition for review filed by Fernandez in this case, is considered voluntary
submission to the jurisdiction of the court30 it may seem at once apparent that the Court of Appeals had in fact
acquired jurisdiction over his person. It has been repeatedly held that an appearance in whatever form, without
expressly objecting to the jurisdiction of the court over the person, is a submission to the jurisdiction of the
court over the person. He may appear by presenting a motion, for example, and unless by such appearance he
specifically objects to the jurisdiction of the court, he thereby gives his assent to the jurisdiction of the court
over his person.31
As we are dealing here with the jurisdiction of an appellate court, additional rules are required for jurisdiction to
attach therein, to wit: (1) the petitioner must have invoked the jurisdiction of the Court of Appeals within the
time for doing so;32 (2) he must have filed his petition for review likewise within the time for doing so;33 (3) he
must have paid the necessary docket fees;34 and (4) the other parties must have perfected their appeals in due
time.35
The Rule requires that in an appeal by way of Petition For Review, the appeal is deemed perfected as to the
petitioner upon the timely filing of the petition and the payment of docket and other lawful fees. 36 In the
discussion of the Committee on the revision of the Rules of Court, it was emphasized that to perfect the appeal,
the party has to file the petition for review and to pay the docket fees within the prescribed period. The law and
its intent are clear and unequivocal that the petition is perfected upon its filing and the payment of the docket
fees.
Thus, it may be argued, and rightly so, that the Court of Appeals has not yet acquired jurisdiction over the case
because Fernandez merely filed a motion for extension of time to file petition but not the petition itself. Withal,
sans the petition, it cannot be said that the Court of Appeals has acquired jurisdiction over the case as to say that
the trial court is without authority to act on a motion for new trial. It is axiomatic that if a statute is clear, plain
and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation.37 Indeed, when the law speaks in clear and categorical language, there is no room for
interpretation, vacillation or construction, but only for application. 38 On this point we fully agree in the position
taken by Fernandez that when he filed the motion for extension of time to file petition for review, jurisdiction of
the Court of Appeals had not yet attached, such that his failure to file the petition itself would normally have the
effect of rendering the decision of the lower court final and executory.39
The consequential question is: what is the legal effect of the filing by Fernandez of a motion for new trial before
the trial court?
Assuming that Fernandez filed his motion for new trial on time, we hold that the trial court still had jurisdiction
to rule on the matter as the jurisdiction it originally acquired had not yet been lost.
The appellate jurisdiction of the trial court is to be juxtaposed with its residual jurisdiction as set forth in Rule
42, Section 8(a), 3rd paragraph of the Rules of Court. Before the Court of Appeals gives due course to a Petition
for Review, the RTC retains jurisdiction for specified instances enumerated therein, to wit:
(1) To issue orders for the protection and preservation of the rights of the parties which do not involve
any matter litigated by the appeal, such as, the appointment of a receiver, and the issuance of writs of
preliminary attachment or preliminary injunction.
(2) To approve compromises.
(3) To permit appeals of indigent litigants.
(4) To order execution pending appeal in accordance with section 2 of Rule 39.
(5) To allow withdrawal of the appeal.40

The residual jurisdiction of the trial court is available at a stage in which the court is normally deemed to have
lost jurisdiction over the case or the subject matter involved in the appeal. This stage is reached upon the
perfection of the appeals by the parties or upon the approval of the records on appeal, but prior to the transmittal
of the original records or the records on appeal.41 Considering that no appeal was perfected in this case and the
records of the case have not yet been transmitted to the Court of Appeals, the case has not as yet attained the
residual jurisdiction stage so as to say that the trial court already lost the jurisdiction it first acquired and that it
is left with only its residual powers.
The foregoing considered, the inevitable recourse would have been to remand this case to the trial court for
hearing on his motion for new trial. Such is not to be, however.
So much has been said by the parties over the issue of whether or not jurisdiction attaches to the Court of
Appeals upon the filing of a motion for extension of time to file petition for review thereby divesting the court
of origin the power to rule on a motion for new trial. As shall be hereunder shown, however, it turns out that the
unraveling of this issue is quite peripheral and that the resolution of this case hinges on another matter totally
different from that raised by the parties.
From the records of the case, the ultimate issue to be tackled concerns the proper computation of the period to
file a motion for new trial.
Rule 37, Section 1 of the Revised Rules of Court providing for the period to file a motion for new trial in
relation to Rule 41, Section 3 is in point.
Rule 37. . . .
Section 1. Grounds of and period for filing motion for new trial or reconsideration. – Within the period
for taking an appeal, the aggrieved party may move the trial court to set aside the judgment or final order
and grant a new trial for one or more of the following causes materially affecting the substantial rights of
said party.
Rule 41 . . . .
Sec. 3. Period of ordinary appeal. – The appeal shall be taken within fifteen (15) days from notice of the
judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a
notice of appeal and a record on appeal within thirty (30) days from notice of the judgment or final
order.
The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion
for extension of time to file a motion for new trial or reconsideration shall be allowed.
It is without question that Fernandez received a copy of the RTC Decision on 28 June 1994. Fourteen (14) days
after the receipt of the decision or specifically on 12 July 1994, he filed a motion for reconsideration. This
motion was denied by the RTC and the Order of denial was received by Fernandez on 29 November 1994.
Applying Rule 37, Section 1 of the Revised Rules of Court, he had only one (1) day left to file a motion for new
trial since a motion for new trial should be filed within the period to appeal, that is, within fifteen (15) days
from notice of the judgment. 42 The motion for new trial suspends the running of the period to appeal but does
not extend the time within which an appeal must be perfected. 43 Hence if denied, a movant, like Fernandez in
this case has only the balance of the reglementary period within which to appeal. 44 It bears repeating that
Fernandez received a copy of the RTC decision on 28 June 1994. Applying Rule 41, Section 3 of the Revised
Rules of Court, he had fifteen (15) days from receipt of the RTC decision to file a motion for new trial or
reconsideration. He filed a motion for reconsideration fourteen (14) days after receipt of the decision. The
motion was denied and he had only the remaining one (1) day to file a motion for new trial which day fell on 01
December 1994. Since 30 November 1994 was a holiday, Fernandez had up to 01 December 1994 to file the
motion for new trial. Extant from the records, instead of a motion for new trial, he filed before the Court of
Appeals on 01 December 1994 the motion for extension of time to file petition for review. Thereafter, and
pending the resolution of his motion before the Court of Appeals, Fernandez went back to the RTC and filed on
09 December 1994 a motion for new trial.
Applying the foregoing, Fernandez's motion for new trial was filed out of time. The fifteen (15)-day period for
filing a motion for new trial cannot be extended. As early as the case of Habaluyas v. Japzon,45 cited in Naguiat
v. Intermediate Appellate Court,46 and reiterated in Tung Chin Hui v. Rodriguez,47 motions for extension of time
to file a motion for new trial or reconsideration may no longer be filed before all courts, lower than the Supreme
Court. The rule in Habaluyas applies even if the motion is filed before the expiration of the period sought to be
extended because the fifteen (15) days period for filing a motion for new trial or reconsideration with said court
is non-extendible. Thus, motions for extension of time to file a motion for new trial or reconsideration may be
filed only in connection with cases pending before the Supreme Court, which may in its sound discretion either
grant or deny the extension requested. No such motion may be filed before any lower courts.48
IN SUM, considering that a motion for new trial must be filed during the period for filing an appeal and that
such period cannot be extended, Fernandez, by filing his motion for new trial beyond the period to appeal, had
unwittingly sealed his fate and stripped himself of any further relief.
WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The Regional Trial
Court of Manila, Branch 46, is ordered to execute the decision dated 02 May 1994 in Civil Case No. 93-67034.
SO ORDERED.
10. Republic vs. Cote March 14, 2018
G.R. No. 212860, March 14, 2018
REPUBLIC OF THE PHILIPPINES, Petitioner, v. FLORIE GRACE M. COTE, Respondent.
DECISION
REYES, JR., J.:
This is a Petition for Review under Rule 45 of the Rules of Court which seeks to reverse and set aside the
Decision1 dated January 21, 2014 and Resolution 2 dated June 11, 2014 of the Court of Appeals (CA) in CA-
G.R. SP No. 122313.
The Facts
As culled from the records, the antecedent facts are as follows:
On July 31, 1995, Rhomel Gagarin Cote (Rhomel) and respondent Florie Grace Manongdo-Cote (Florie) were
married in Quezon City. At the time of their marriage, the spouses were both Filipinos and were already blessed
with a son, Christian Gabriel Manongdo who was born in Honolulu, Hawaii, United States of America (USA). 3
On August 23, 2002, Rhomel filed a Petition for Divorce before the Family Court of the First Circuit of Hawaii
on the ground that their marriage was irretrievably broken. This was granted on August 23, 2002 by the
issuance of a decree that states among others:
A decree of absolute divorce is hereby granted to [Rhomel], the bonds of matrimony between [Rhomel] and
[Florie] are hereby dissolved and the parties hereto are restored to the status of single persons, and either party
is permitted to marry from and after the effective date of this decree.4
Seven years later, Florie commenced a petition for recognition of foreign judgment granting the divorce before
the Regional Trial Court (RTC). Florie also prayed for the cancellation of her marriage contract, hence, she also
impleaded the Civil Registry of Quezon City and the National Statistics Office (NSO). The Office of the
Solicitor General, representing Republic of the Philippines (petitioner), deputized the Office of the City
Prosecutor to appear on behalf of the State during the trial. 5
On April 7, 2011, the RTC granted the petition and declared Florie to be capacitated to remarry after the RTC's
decision attained finality and a decree of absolute nullity has been issued. The RTC ruled, inter alia, that
Rhomel was already an American citizen when he obtained the divorce decree, 6viz.:
[Florie] has sufficiently established that she is a Filipino citizen and married to an American citizen. Her
husband obtained a Divorce Decree on 22 August 2002 and was authenticated and registered by the Consulate
General to the Philippines in Honolulu, Hawaii, U.S.A. [Florie] being a Filipino citizen and is governed by
Philippine laws, she is placed in an absurd, if not awkward situation where she is married to somebody who is
no longer married to her. This is precisely the circumstances contemplated under Article 26, paragraph 2 of the
Family Code which provides a remedy for Filipino spouses like [Florie].
Under the above-cited provision, [Florie] is allowed to contract a subsequent marriage since the divorce had
been validly obtained abroad by her American husband, capacitating her to remarry. In this line, the court holds
that this petition be, as it is, hereby GRANTED.
WHEREFORE, in view of the foregoing, judgment is hereby rendered declaring [Florie] capacitated to remarry
pursuant to Article 26 paragraph 2 of the Family Code, in view of the Divorce Decree which had been validly
obtained abroad by her American spouse, dissolving their marriage solemnized on 31 July 1995 in Quezon City,
Philippines.7
Petitioner filed a Notice of Appeal on May 17, 2011. However, the RTC, believing that the petition was covered
by A.M. No. 02-11-10-SC or the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages, applied Section 20 of said Rule and denied the appeal because the notice was not preceded
by a motion for reconsideration.8
Petitioner then filed a petition for certiorari with the CA claiming that the RTC committed grave abuse of
discretion.
In a Decision9 dated January 21, 2014, the CA denied the petition. The pertinent portions read as follows:
The fact that even the Solicitor General and private respondent were confused as to the true nature of the
petition and the procedure that must be followed only shows that We cannot attribute a whimsical and
capricious exercise of judgment to the RTC.
x x x x
Besides, petitioner's omission, by itself, is a ground for dismissing the petition. The last paragraph of Section 3,
Rule 46 of the Rules of Court allows the dismissal of a petition for certiorari if the material parts of the records
were not attached to the petition. "Certiorari, being an extraordinary remedy, the party seeking it must strictly
observe the requirements for its issuance." Although it has been ruled that the better policy is for petitioner to be
accorded, in the interest of substantial justice, "a chance to submit the same instead of dismissing the petition"
We cannot allow petitioner to benefit from this rule because the need to submit the transcript of stenographic
notes and all other pieces of evidence is quite obvious for petitioner which is questioning the sufficiency of the
evidence presented. Hence, it would be bending the rules too far if We still allow petitioner to be excused from
this lapse.10
Hence, this present petition.
The Issues
I. THE CA ERRED IN FINDING THAT THE TRIAL COURT JUDGE DID NOT COMMIT
GRAVE ABUSE OF DISCRETION IN APPLYING THE PROCEDURAL RULES FOR
NULLITY OF MARRIAGE PROCEEDINGS UNDER A.M. NO. 02-11-10-SC IN A
PROCEEDING FOR RECOGNITION OF FOREIGN DECREE OF DIVORCE;
II. THE CA GRAVELY ERRED IN RULING THAT THE STATE HAS NO PERSONALITY TO
INTERVENE IN PROCEEDINGS FOR RECOGNITION OF FOREIGN DECREE OF
DIVORCE;
III. THE CA ERRED IN FINDING THAT THE FAILURE OF THE PETITIONER TO APPEND
COPIES OF THE TRANSCRIPT OF STENOGRAPHIC NOTES OF FLORIE'S DIRECT
EXAMINATION AND HER JUDICIAL AFFIDAVIT IS FATAL, NOTWITHSTANDING
THAT THE VERY SAME DOCUMENTS WERE INCORPORATED AND QUOTED BY
FLORIE IN HER COMMENT; and
IV. THE CA ERRED IN AFFIRMING THE TRIAL COURT'S DECISION DATED APRIL 7, 2011
GRANTING FLORIE'S PETITION FOR RECOGNITION OF FOREIGN DECREE OF
DIVORCE DESPITE LACK OF SHOWING THAT HER FORMER FILIPINO HUSBAND
WAS ALREADY AN AMERICAN CITIZEN AT THE TIME HE PROCURED THE DECREE
OF DIVORCE.11
Ruling of the Court
The core issue for the Court's resolution is whether or not the provisions of A.M. No. 02-11-10-SC12 applies in a
case involving recognition of a foreign decree of divorce.
It bears stressing that as of present, our family laws do not recognize absolute divorce between Filipino
husbands and wives. Such fact, however, do not prevent our family courts from recognizing divorce decrees
procured abroad by an alien spouse who is married to a Filipino citizen.
Article 26 of the Family Code states:
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country
where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited
under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall likewise have capacity to remarry under Philippine law.
The wordings of the second paragraph of Article 26 initially spawned confusion as to whether or not it covers
even those marriages wherein both of the spouses were Filipinos at the time of marriage and then one of them
eventually becomes a naturalized citizen of another country.
In the landmark case of Republic v. Orbecido III,13 the Court ruled that the reckoning point is not the citizenship
of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is
obtained abroad by the alien spouse capacitating the latter to remarry. 14
Although the Court has already laid down the rule regarding foreign divorce involving Filipino citizens, the
Filipino spouse who likewise benefits from the effects of the divorce cannot automatically remarry. Before the
divorced Filipino spouse can remarry, he or she must file a petition for judicial recognition of the foreign
divorce.
The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our courts do
not take judicial notice of foreign judgments and laws. Justice Herrera explained that, as a rule, "no sovereign is
bound to give effect within its dominion to a judgment rendered by a tribunal of another country." This means
that the foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with
the alien's applicable national law to show the effect of the judgment on the alien himself or herself. The
recognition may be made in an action instituted specifically for the purpose or in another action where a party
invokes the foreign decree as an integral aspect of his claim or defense.15
To clarify, respondent filed with the RTC a petition to recognize the foreign divorce decree procured by her
naturalized (originally Filipino) husband in Hawaii, USA. By impleading the Civil Registry of Quezon City and
the NSO, the end sought to be achieved was the cancellation and or correction of entries involving her marriage
status.
In Corpuz v. Sto. Tomas, et al.,16 the Court briefly explained the nature of recognition proceedings vis-a-
vis cancellation of entries under Rule 108 of the Rules of Court, viz.:
Article 412 of the Civil Code declares that no entry in a civil register shall be changed or corrected, without
judicial order. The Rules of Court supplements Article 412 of the Civil Code by specifically providing for a
special remedial proceeding by which entries in the civil registry may be judicially cancelled or corrected. Rule
108 of the Rules of Court sets in detail the jurisdictional and procedural requirements that must be complied
with before a judgment, authorizing the cancellation or correction, may be annotated in the civil registry. It also
requires, among others, that the verified petition must be filed with the RTC of the province where the
corresponding civil registry is located; that the civil registrar and all persons who have or claim any interest
must be made parties to the proceedings; and that the time and place for hearing must be published in a
newspaper of general circulation. x x x.
We hasten to point out, however, that this ruling should not be construed as requiring two separate proceedings
for the registration of a foreign divorce decree in the civil registry one for recognition of the foreign decree and
another specifically for cancellation of the entry under Rule 108 of the Rules of Court. The recognition of the
foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special proceedings (such
as that in Rule 108 of the Rules of Court) is precisely to establish the status or right of a party or a particular
fact. Moreover, Rule 108 of the Rules of Court can serve as the appropriate adversarial proceeding by which the
applicability of the foreign judgment can be measured and tested in terms of jurisdictional infirmities, want of
notice to the party, collusion, fraud, or clear mistake of law or fact.17
The RTC, in its Decision18 dated January 21, 2014 ruled that Florie had sufficiently established that she is
married to an American citizen and having proven compliance with the legal requirements, is declared
capacitated to remarry.
The confusion arose when the RTC denied petitioner's appeal on the ground that no prior motion for
reconsideration was filed as required under Section 20 of A.M. No. 02-11-10-SC. Petitioner posits that A.M.
No. 02-11-10-SC do not cover cases involving recognition of foreign divorce because the wording of Section 1
thereof clearly states that it shall only apply to petitions for declaration of absolute nullity of void marriages and
annulment of voidable marriages, viz.:
Section 1. Scope - This Rule shall govern petitions for declaration of absolute nullity of void
marriages and annulment of voidable marriages under the Family Code of the Philippines. [Underscoring Ours]
Rule 41 of the Rules of Court applies; Motion for Reconsideration not a condition precedent to the filing
of an appeal
The CA is correct when it ruled that the trial court misapplied Section 20 of A.M. No. 02-11-10-SC.
A decree of absolute divorce procured abroad is different from annulment as defined by our family laws. A.M.
No. 02-11-10-SC only covers void19and voidable20marriages that are specifically cited and enumerated in the
Family Code of the Philippines. Void and voidable mmTiages contemplate a situation wherein the basis for the
judicial declaration of absolute nullity or annulment of the marriage exists before or at the time of the marriage.
It treats the marriage as if it never existed. Divorce, on the other hand, ends a legally valid marriage and is
usually due to circumstances arising after the marriage.
It was error for the RTC to use as basis for denial of petitioner's appeal Section 20 of A.M. No. 02-11-10-SC.
Since Florie followed the procedure for cancellation of entry in the civil registry, a special proceeding governed
by Rule 108 of the Rules of Court, an appeal from the RTC decision should be governed by Section 3 21 of Rule
41 of the Rules of Court and not A.M. No. 02-11-10-SC.
As culled from the records, petitioner received a copy of the RTC Decision on May 5, 2011. It filed a Notice of
Appeal22 on May 17, 2011, thus complying with the 15-day reglementary period for filing an appeal.
An appeal is a statutory right that must be exercised only in the manner and in accordance with the provisions of
law. Having satisfactorily shown that they have complied with the rules on appeal, petitioners are entitled to the
proper and just disposition of their cause.23
This now brings the Court to the issue whether or not the RTC's denial of petitioner's appeal is tantamount to
grave abuse of discretion. The Court rules in the negative.
No grave abuse of discretion
Although the Court agrees with petitioner that the RTC erroneously misapplied A.M. No. 02-11-10-SC, such
error does not automatically equate to grave abuse of discretion. The Court has ruled time and again that not all
errors attributed to a lower court or tribunal fall under the scope of a Rule 65 petition for certiorari.
Jurisprudence has defined grave abuse of discretion amounting to lack or excess of jurisdiction in this wise:
Grave abuse of discretion is defined as capricious or whimsical exercise of judgment as is equivalent to lack of
jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is
exercised in an arbitrary and despotic manner by reason of passion and hostility.24
After a careful consideration of the evidence presented and Florie having sufficiently complied with the
jurisdictional requirements, judgment was rendered by the lower court recognizing the decree of foreign
divorce. It likewise declared Florie legally capacitated to remarry citing the second paragraph of Article 26 of
the Family Code. Thus, the CA is correct in denying the Rule 65 petition for certiorari, notwithstanding the
RTC's dismissal of petitioner's appeaL The dismissal, albeit erroneous, is not tainted with grave abuse of
discretion.
The Court finds no indication from the records that the RTC acted arbitrarily, capriciously and whimsically in
arriving at its decision. A petition for certiorari will prosper only if grave abuse of discretion is alleged and
proved to exist. The burden is on the part of the petitioner to prove not merely reversible error on the part of
private respondent, but grave abuse of discretion amounting to lack or excess of jurisdiction.
WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated January 21, 2014
and Resolution dated June 11, 2014 of the Court of Appeals in CA-G.R. SP No. 122313 are
hereby AFFIRMED.
11. Monterey Foods Corp et al ba Eserjose GR 165300 April 23, 2010

[G.R. No. 153126. September 11, 2003.]
MONTEREY FOODS CORP. and RAMON F. LLANOS, Petitioners, v. VICTORINO E. ESERJOSE,

and the Branch Sheriff assigned to the Regional Trial Court of Quezon City, Branch 224, National
Capital Judicial Region, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review seeking to reverse and set aside the decision 1 of the Court of Appeals dated
November 21, 2001, which upheld the Orders of the Regional Trial Court of Quezon City, Branch 224 in Civil
Case No. Q-98-36421. 2
It is alleged in the petition that for a period of twelve years, respondent bought from petitioner Monterey Foods
Corporation live cattle and hogs which he in turn sold and distributed to his customers. The transactions were
covered by invoices and delivery receipts and were payable within ten days from invoice date. Due to
respondent’s inability to pay for his purchases, his overdue account amounted to P87,434,689.37, and as a
consequence, petitioner corporation ceased its transactions with Respondent.chanrob1es virtua1 1aw 1ibrary
Sometime in 1998, during the existence of the contractual relations between the parties, they entered into a
contract growing agreement whereby petitioner corporation supplied livestock for respondent to grow, care for
and nurture in his farm located in San Jose, Batangas. After five months of operation, petitioner corporation
withdrew from the contract without paying respondent for his services, alleging that respondent failed to post
the requisite bond under the contract and poorly performed his farm management functions to the detriment of
the animals.
Respondent repeatedly demanded that petitioner corporation pay him for his services under the contract,
amounting to P1,280,000.00. His demands went unheeded; thus, he filed with the Regional Trial Court of
Quezon City, Branch 224, an action for sum of money and damages against petitioner corporation and its
President, petitioner Ramon F. Llanes, which was docketed as Civil Case No. Q-98-36421. 3 After petitioners
filed their Joint Answer, the case was scheduled for pre-trial conference on May 14, 1999.
At the pre-trial conference, petitioners and their counsel failed to appear, and an Order was issued declaring
them as in default and allowing respondent to present evidence ex parte. 4 On May 24, 1999, the trial court
rendered judgment, the dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the
defendants ordering the latter to pay the former the following:chanrob1es virtual 1aw library
1. P1,280,000.00 representing the principal obligation;
2. P100,000.00, jointly and severally, as damages; and
3. P50,000.00 as attorney’s fees.
IT IS SO ORDERED. 5
Petitioners filed a motion for new trial, 6 which the trial court granted. 7 Hence, the case was again set for pre-
trial conference and both parties submitted their respective pre-trial briefs. 8
After the pre-trial, respondent submitted a manifestation and motion alleging that petitioners have admitted their
liability under the contract growing agreement at least to the extent of P482,766.88 when they alleged in their
Joint Answer: "In accordance with the standard contract growing fee provision plaintiff [respondent herein] was
entitled to a compensation of net P482,766.88." 9 Respondent thus prayed that reverse trial be conducted. 10
Petitioners opposed the manifestation and motion, stating that the reverse trial order has no basis since the
amount allegedly admitted was dramatically less than the total of P1,280,000.00 claimed by Respondent. 11
At the initial hearing of the case, petitioners confirmed in open court that they indeed entered into a contract
growing agreement with respondent and that the latter was entitled to a net compensation of P482,766.88 under
the said contract. 12 The trial court, acting on petitioners’ judicial admission, rendered partial summary
judgment insofar as the amount of P482,766.88 was concerned, and set the case for trial for the presentation of
evidence on petitioners’ claim for damages. 13 Respondent moved for the execution of the partial summary
judgment, which the trial court granted.
Petitioners filed a motion for reconsideration, which was denied for lack of merit. 14 Accordingly, on
December 15, 1999, the trial court issued a writ of execution directing the sheriff to cause the execution of the
partial summary decision. 15
On December 17, 1999, petitioners filed a petition for certiorari before the Court of Appeals, docketed as CA-
G.R. SP No. 56305. 16 On November 21, 2001, the Court of Appeals dismissed the petition. 17 Petitioners’
motion for reconsideration was likewise denied for lack of merit. 18
Petitioners are now before us assigning the following errors:chanrob1es virtual 1aw library
A.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR
WHEN IT SANCTIONED THE WRIT OF EXECUTION ISSUED BY THE TRIAL COURT OF A PARTIAL
SUMMARY JUDGMENT WHICH WAS NOT YET FINAL IN CHARACTER.
B.
WHEN IT UPHELD THE WRIT OF EXECUTION OF THE PARTIAL SUMMARY JUDGMENT ISSUED
ON AN EX-PARTE MOTION THAT DENIED PETITIONER AN OPPORTUNITY TO BE HEARD.
C.
WHEN IT UPHELD THE WRIT OF EXECUTION OF THE PARTIAL SUMMARY JUDGMENT ISSUED
ON THE BASIS THAT A BOND IS SUFFICIENT REASON FOR DISCRETIONARY EXECUTION TO
ISSUE.
D.
WHEN IT UPHELD THE WRIT OF EXECUTION ON THE BASIS OF A PARTIAL SUMMARY
JUDGMENT THAT IS PATENTLY INVALID.
E.
WHEN IT UPHELD THE PARTIAL SUMMARY JUDGMENT THAT WAS RENDERED IN
DISPARAGEMENT OF DUE PROCESS.
F.
WHEN IT UPHELD THE TRIAL COURT’S PARTIAL SUMMARY JUDGMENT ISSUED ON THE BASIS
THAT THERE ARE NO GENUINE TRIABLE ISSUES OF FACT.
G.
WHEN IT SANCTIONED THE DEPARTURE OF THE TRIAL COURT FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDINGS. 19
Simply put, the primordial question to be resolved hinges on whether summary judgment is proper in the case at
bar.chanrob1es virtua1 1aw 1ibrary
A summary judgment or accelerated judgment is a procedural technique to promptly dispose of cases where the
facts appear undisputed and certain from the pleadings, depositions, admissions and affidavits on record, or for
weeding out sham claims or defenses at an early stage of the litigation to avoid the expense and loss of time
involved in a trial. Its object is to separate what is formal or pretended in denial or averment from what is
genuine and substantial so that only the latter may subject a party in interest to the burden of trial. 20 Moreover,
said summary judgment must be premised on the absence of any other triable genuine issues of fact. 21
Otherwise, the movant cannot be allowed to obtain immediate relief. A "genuine issue" is such issue of fact
which requires presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. 22
Rule 35, Section 3 of the Rules of Court provides two (2) requisites for summary judgment to be proper: (1)
there must be no genuine issue as to any material fact, except for the amount of damages; and (2) the party
presenting the motion for summary judgment must be entitled to a judgment as a matter of law. 23
Applying these principles to the case at bar, we find that the Court of Appeals did not commit any reversible
error in affirming the assailed orders of the trial court. Hence, the instant petition must be denied.
The record shows that at the hearing on November 25, 1999, petitioners admitted liability under the contract
growing agreement in the amount of P482,766.88. 24 As a result, respondent agreed to waive all his other
claims in the complaint, including his claim for consequential damages. 25 Correspondingly, insofar as the
complaint was concerned, there was no other genuine issue left for which the complaint for sum of money and
damages may be prosecuted. Also by reason of such admission, Petitioners, in effect, likewise waived whatever
defenses they may have to deter recovery by respondent under the said contract. Thus, respondent became
entitled, as a matter of law, to the execution of the partial summary judgment. When there are no genuine issues
of fact to be tried, the Rules of Court allows a party to obtain immediate relief by way of summary judgment. In
short, since the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to
the material facts. 26
Clearly, the judgment finally disposed of all the reliefs sought in the complaint. The order granting summary
judgment was akin to a judgment on the merits made after a full-blown trial. Its consequent execution,
therefore, may issue as a matter of right in favor of respondent unless appeal was seasonably made therein,
which petitioners failed to do. Instead of filing a notice of appeal with the trial court, petitioners elevated the
matter to the Court of Appeals via petition for certiorari under Rule 65 of the Rules of Court, which is not a
substitute for the lost remedy of appeal.
Petitioners maintain that the order granting partial summary judgment was merely interlocutory in nature and
did not dispose of the action in its entirety. They cite the doctrines laid down in Province of Pangasinan v. Court
of Appeals 27 and Guevarra v. Court of Appeals, 28 where the Court categorically stated that a partial summary
judgment is not a final or appealable judgment.chanrob1es virtua1 1aw 1ibrary
Petitioners’ position is untenable.
The rulings in Province of Pangasinan and Guevarra is not applicable in the case at bar. The said cases
specifically delved on the appeal of a partial summary judgment, which did not dispose of all the reliefs sought
in the complaint. In the case at bar, other than the admitted liability of petitioners to respondents under the
contract growing agreement, all other reliefs sought under the complaint had already been expressly waived by
respondent before the trial court. Accordingly, the assailed November 25, 1999 Order of the trial court which
granted partial summary judgment in favor of respondent was in the nature of a final order which leaves nothing
more for the court to adjudicate in respect to the complaint. In Santo Tomas University Hospital v. Surla, 29 the
Court distinguished a final judgment or order from an interlocutory issuance in this wise:chanrob1es virtual 1aw
library
The concept of a final judgment or order, distinguished from an interlocutory issuance, is that the former
decisively puts to a close, or disposes of a case or a disputed issue leaving nothing else to be done by the court
in respect thereto. Once that judgment or order is rendered, the adjudicative task of the court is likewise ended
on the particular matter involved. An order is interlocutory, upon the other hand, if its effects would only be
provisional in character and would still leave substantial proceedings to be further had by the issuing court in
order to put the controversy to rest.
We are not unmindful of petitioners’ counterclaim. However, our cursory evaluation of the same fails to
convince us that the issues raised therein are closely related to or intertwined with the growing contract
agreement. The issues raised therein clearly involved transactions distinct and separate from the growing
contract agreement; they refer to the alleged obligations of respondent under their separate contract for the sale
and distribution of cattle and hogs. As such, these are in the nature of permissive counterclaims which can be
litigated independently of the main complaint.
Petitioners also argue that they were denied an opportunity to be heard on the motion to execute the summary
judgment; and that the summary judgment was rendered in disregard of due process.
The argument is not well-taken.
A party cannot successfully invoke deprivation of due process if he was accorded the opportunity of a hearing,
through either oral arguments or pleadings. 30 Contrary to petitioners’ claims, the record shows that petitioners
were duly represented by counsel when the motion for summary judgment as well as the execution of the same
were heard by the trial court. Petitioners’ counsel did not register any opposition to respondent’s oral motion for
summary judgment, saying that under the Rules of Court it should be furnished a written motion for summary
judgment at least 10 days before it is heard. We find, however, that the absence of the written notice did not
divest the trial court of authority to pass on the merits of the motion made in open court. The order of the court
granting the motion for summary judgment and its execution thereof despite absence of a notice of hearing, or
proof of service thereof, is merely an irregularity in the proceedings. It cannot deprive the court of its authority
to pass on the merits of the motion. The remedy of the aggrieved party in such cases is either to have the order
set aside or the irregularity otherwise cured by the court, or to appeal from the final judgment, and not
thru certiorari. 31
In fact, the counsel for petitioners actively participated in disposing of the reliefs prayed for in the complaint
when he sought the reduction in respondent’s claim to P482,766.88. Besides, we find from the records that
petitioners expressly agreed to the summary judgment 32 and to the execution of the same after respondent
posts a bond in an amount fixed by the court. 33 In short, petitioners were never deprived of their day in court.
Thus, they cannot now be allowed to claim that they were denied due process. The Rules of Court should be
liberally construed in order to promote their objective of securing a just, speedy and inexpensive disposition of
every action and proceeding. 34
Thus, in Ley Construction and Development Corporation v. Union Bank of the Philippines, 35 it was
held:chanrob1es virtual 1aw library
Admittedly, there is nothing in the records which indicates that Judge Arcangel conducted a hearing before he
resolved respondent’s motion for summary judgment. Nevertheless, as explained in Carcon Development
Corporation v. Court of Appeals, in proceedings for summary judgment, the court is merely expected to act
chiefly on the basis of what is in the records of the case and that the hearing contemplated in the Rules is not de
riguer as its purpose is merely to determine whether the issues are genuine or not, and not to receive evidence
on the issues set up in the pleadings.
. . . . In view of the fact that they admitted having incurred the obligation which is the basis of the complaint, a
hearing would have served no pertinent purpose. The records already provide sufficient basis for the court to
resolve respondent’s motion. Thus, we find that even if the trial court did not conduct a hearing, this fact would
not affect the validity of the summary judgment rendered by Judge Arcangel.
Neither does the fact that respondent’s motion to resolve its motion for summary judgment was filed ex parte
affect the validity of Judge Arcangel’s resolution. The requirement in Rule 35, §3 that the opposing party be
furnished a copy of the motion 10 days before the time specified for the hearing applies to the motion for
summary judgment itself and not to the motion to resolve such motion. . . . . Thus, it could not be said that they
were deprived of the opportunity to question the motion.
WHEREFORE, in view of all the foregoing, the instant petition for review is DENIED for lack of merit. The
assailed decision of the Court of Appeals dated November 21, 2001 in CA-G.R. SP No. 56305, which affirmed
the Orders of the Regional Trial Court of Quezon City, Branch 224, directing the execution of partial summary
judgment in Civil Case No. Q-98-36421, is AFFIRMED.chanrob1es virtua1 law library
SO ORDERED.
Davide, Jr., C.J., Vitug and Carpio, JJ., concur.
Azcuna, J., on official leave.
12. Kalilid wood industries vs IAC GR 75502, November 12, 1987
G.R. No. 75502 November 12, 1987
KALILID WOOD INDUSTRIES CORPORATION, ALFREDO SALONGA and JOAQUIN MIGUEL

DE JESUS, petitioners,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT and PHILIPPINE BANKING
CORPORATION.
FELICIANO, J.:
On 17 November 1976, Joaquin Miguel de Jesus and Alfredo T. Salonga, President-General Manager and
Comptroller, respectively, of P.B. De Jesus and Company, Inc., executed a promissory note (PBC No. 1202-76)
in favor of respondent Philippine Banking Corporation in the amount of P600,000.00, the obligation maturing
on 29 December 1976. Similarly, on 2 December 1976, a second promissory note (PBC No. 1255-76) was
executed this time in the amount of P300,000.00, payable on or before 3 January 1977. These two instruments
were executed to document or reflect loans secured from respondent Bank and were signed by Messrs. de Jesus
and Salonga in the following manner:
A. Promissory Note PBC No. 1202-76-for P600,000.00:
Due December 29,1976 No. 1202-76
For value received, I/we jointly and severally promise to pay to the Philippine Banking
Corporation at its office at Ayala Avenue, Makati, Metro Manila the sum of SIX HUNDRED
THOUSAND ONLY ... pesos (P600,000.00) with interest at the rate of FOURTEEN percent
14% per annum, from TODAY until paid. In case this note is not paid at maturity the interest rate
shall automatically be increased to per annum.
xxx xxx xxx
Executed at Makati, Philippines on November 17,1976.
P.B. DE JESUS & CO., INC.
(Sgd.) Alfredo Salonga (Sgd.) Miguel de Jesus

IN OUR PERSONAL CAPACITY
B. Promissory Note PBC No. 1255-76-for P300,000.00:
Due January 3, 1977 No. 1255-76
For valued received, I/we jointly and severally promise to pay to the Philippine Banking
Corporation at its office at Ayala Avenue, Makati, Metro Manila the sum of THREE HUNDRED
THOUSAND ONLY ... pesos (P300,000.00), with interest at the rate of FOURTEEN per cent
(14%) per annum, from TODAY until paid. In case this note is not paid at maturity the interest
rate shall automatically be increased to _______ (______%) per annum.
xxx xxx xxx
Executed at Makati, Philippines on December 2,1976.
P.B. DE JESUS & CO., INC.
IN OUR PERSONAL CAPACITIES
(Sgd,) Alfredo Salonga (Sgd.) Miguel de Jesus
On 5 March 1978, P.D. De Jesus and Company, Inc., by vote of its stockholders, changed its corporate name to
Kalilid Wood Industries Corporation (hereafter "Kalilid"), an act subsequently validated by the Securities and
Exchange Commission. Thereafter, respondent Bank served several letters of demand upon petitioner Kalilid
for payment by the latter of the obligations contracted under promissory notes PBC No. 1202-76 and PBC No.
1255-76 which had apparently remained unsettled. Petitioner Kalilid, however, disowned its alleged
indebtedness under both promissory notes.
On 15 May 1981, respondent Bank filed a Complaint for collection (docketed as Civil Case No. 41268) against
petitioner Kalilid and Messrs. de Jesus and Salonga with Branch 23 of the then Court of First Instance of Rizal
(Seventh Judicial District). 1 In its complaint, respondent Bank alleged that petitioner Kalilid, as principal,
should be held solidarily liable under promissory notes PBC No. 1202-76 and PBC No. 125576 together with
Messrs. de Jesus and Salonga, both of whom had signed said promissory notes for and in behalf of the
petitioners company, as well as in their own personal capacities. Respondent Bank further alleged that, as of 30
April 1981, the total amount of the indebtedness of the obligors under the two promissory notes had risen to
Pl,780,253.08—i.e., PI 18649696 with respect to promissory note PBC No. 120276, and P593,756.12 with
respect to promissory note PBC No. 125176 The Bank submitted in substantiation of these claimed amounts
two separate Statements of Account (one for each promissory note), which had been prepared by respondent
Bank and attached to the complaint as Annexes "C" and "D" thereof. 2 Promissory notes PBC No. 1202-76 and
IBC No. 1255-76 were likewise attached to the complaint as its Annexes "A" and "B", respectively. 3
In its Answer dated 10 July 198l, 4 petitioner Kalilid alleged that it "ha[d] no knowledge or information
sufficient to form a belief as to the truth of [the material allegations in the complaint]. 5 As its affirmative
defense, petitioner Kalilid asserted that the authority to borrow money or contract loans on its behalf had not
been granted to Messrs. de Jesus and Salonga who, it was further asserted, should be held solely liable under the
two promissory notes. The answer of petitioner Kalilid, however, was not verified.
The complaint was dismissed, though without prejudice, with respect to Messrs. de Jesus and Salonga whose
whereabouts could not then be ascertained.
The parties were unable to arrive at an amicable settlement between themselves at the pre-trial stage of the
litigation. Subsequently, a motion for summary judgment was filed by respondent Bank to which petitioner
Kalilid raised neither objection nor opposition.
In a three-page Decision dated 12 October 1983, the trial court found petitioner Kalilid liable to respondent
Bank for the obligations contracted under promissory notes PBC No. 1202-76 and PBC No. 1255-76 . the
dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff Philippine Banking

Corporation and against defendant Kalilid Wood Industries Corporation who is ordered to pay
plaintiff:
1. The amount of P1,780,253.08 plus legal interest from April 9, 1981 until the amount is fully
paid;
2. the amount equivalent to 10% of the total amount due as attorney's fees; and
3. the costs of suit.
SO ORDERED.
The trial Judge based his decision primarily on two factors: (1) the failure of petitioner Kalilid to verify its
answer, which failure the trial Judge considered as amounting to an admission by petitioner Kalilid of the
genuineness and due execution of promissory notes PBC No. 1202-76 and PBC No. 1255-76, which were
annexed to respondent Bank's complaint; and (2) the fact that the two disputed promissory notes were signed by
Messrs. de Jesus and Salonga both for and in behalf of the former P.B. de Jesus and Company, Inc. (now
petitioner Kalilid) and in their own personal capacities.
The judgment of the lower court was affirmed in toto on appeal. In its disputed Decision dated 8 November
1985, the then Intermediate Appellate Court (Third Civil Cases Division) held:
Defendant-appellant faults the lower court in holding it liable to pay the amount of Pl,780,253.08
inasmuch as the promissory notes covered only P900,000.00 claiming that plaintiff-appellee
failed to adduce evidence as to how said amounts increased to the amount of Pl,780,253.08.
Defendant-appellant argument is really flimsy, because it overlooked the fact that the promissory
notes in question which were due and demandable since December 29, 1976 and January 3, 1977
bear interest at the rate of 14% and further stipulates for the payment of attorney's fees of 10% of
the amount due including interest in case of collection of the promissory notes is done through a
lawyer.
Moreover, the statements of account Annexes A and B are also attached to the same complaint as
integral part thereof. Annex A pertains to the promissory note No. 1202-76 with the principal of
P600,000.00 while Annex B pertains to the promissory note No. 125576 with the principal of
P300,000.00. Explained in said statements of account are the charges for past due interest and
penalty charges and the total of said obligation as of April 30, 1981 showed a total of principal,
interest and penalty charges of P1,780,253.08. The genuineness and due execution of said
promissory notes and statements of account are deemed admitted by the failure to deny under
oath said documents. ... 6
Petitioner Kalilid's Motion for Reconsideration was denied by the Third Civil Cases Division on 29 July 1986.
In the present Petition for Review, petitioner Kalilid no longer denies its liabilities and obligations under the
two promissory notes executed in favor of respondent Bank. It would, however, contest the correctness of the
aggregate amount of its indebtedness, as claimed by respondent Bank. In this respect, petitioner Kalilid
contends that although it may have impliedly admitted the genuineness and due execution of promissory notes
PBC No. 1202-76 and PBC No. 125576—Annexes "A" and "B" of the Complaint—as a result of its failure to
deny specifically and under oath the material allegations in respondent Bank's complaint, such admission cannot
be made to extend and apply to the two aforementioned Statements of Account—Annexes "C" and "D" of the
Complaint-since none of petitioner Kalilid's duly authorized representatives had participated in the preparation
thereof. Furthermore, in the computations appearing therein, amounts corresponding to service charges, penalty
charges, and interest charges on past due interest were included which, petitioner Kalilid claims, are not part of
its undertakings under either promissory note.
We agree with the ruling of the trial Judge and the respondent appellate court that petitioner Kalilid, due to its
failure to verify its answer, is deemed to have admitted by implication the authenticity and due execution of
promissory notes PBC No. 1202-76 and PBC No. 1255-76, which were both annexed to and made the basis for
respondent Bank's complaint. 7 Consequently, defenses relating to the genuineness and due execution of the
notes, such as that the instruments are spurious counterfeit, or of different import on their faces from the ones
executed by the parties; or that the signatures appearing therein are forgeries; or that said signatures were
unauthorized as in the case of an agent signing for his principal or one signing in behalf of a partnership or
corporation; or that the corporation was not authorized under its charter to sign the instruments; or that the party
charged signed the instruments in some capacity other than that set out in the instruments; or that the
instruments were never delivered, are effectively cut off, 8 placing petitioner Kalilid in estoppel from
disclaiming liability under those promissory notes. No genuine issue having been raised in the trial court by
petitioner Kalilid regarding the existence and validity of its liabilities under promissory notes PBC No. 1202-76
and PBC No. 1255-76, summary judgment was properly and appropriately rendered in the case at bar. 9
In respect, however, of the amount of petitioner Kalilid's total indebtedness to respondent Bank under the two
promissory notes, it was error for the appellate court (as for the trial Judge) to have expanded the scope of
petitioner Kalilid's implied admission of genuineness and due execution so as to include the two Statements of
Account annexed to the complaint. On this point, Rule 8, Section 8 of the Revised Rules of Court is quite
specific.
Section 8. How to contest genuineness of such documents.—When an action or defense is

founded upon a written instrument, copied in or attached to the corresponding pleading as
provided in the preceding section, the genuineness and due execution of the instrument shall be
deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth
what he claims to be the facts; but this provision does not apply when the adverse party does not
appear to be a party to the instrument or when compliance with an order for an inspection of the
original instrument is refused. (Emphasis supplied.)
An examination of the two disputed Statements of Account reveals that both documents (1) were printed under
the official letterhead of respondent Bank, (2) were prepared by the Loans and Discounting Department of
respondent Bank, and (3) bore the signature of approval of respondent Bank's authorized officer. No other
signature appears on the face of either document. In other words, both Statements of Account were
prepared exclusively by respondent Bank. It follows that petitioner Kalilid, not having been privy thereto, did
not admit the genuineness and due execution of the Statements in spite of its failure to verify its answer to the
complaint, and that petitioner is not conclusively bound by the charges nor by the computations of amounts set
out therein. 10
The aggregate amount of petitioner Kalilid's monetary obligations to respondent Bank is determinable from the
common stipulations and conditions contained in promissory notes PBC No. 1202-76 and PBC No. 1255-76,
under which petitioner Kalilid bound itself to pay respondent Bank, aside from the principal loan totalling
P900,000.00: (1) interest at the rate of fourteen percent (14%) per annum, payable monthly and compounded
monthly if unpaid, 11 and (2) attorney's fees equivalent to ten percent (10%) of the entire amount due, including
interest. 12 it does not, however, appear from the face of either promissory note that petitioner Kalilid agreed to
pay service charges and penalty charges in case of late payment of its obligations to respondent Bank. Since an
undertaking to pay service charges and penalty charges on top of interest and interest on past due interest cannot
be presumed, it is necessary that evidence be adduced by both parties to prove or disprove their respective
claims regarding the basis and propriety of including such charges and in such amounts as part of petitioner
Kalilid's liabilities under the two promissory notes. Evidence relating to the computation of interest on past due
interest, that is due and payable may also be submitted.
WHEREFORE, the decision of Branch 23 of the then Court of First Instance of Rizal (Seventh Judicial District)
in Civil Case No. 41268 and the decision of the then Intermediate Appellate Court dated 8 November 1985 are
AFFIRMED to the extent that they refer to the principal amounts and stipulated interest due under Promissory
Notes PBC No. 1202-76 and PBC No. 1255-76 and to attorney's fees equivalent to ten percent (10%) of the
entire amount due. This case is REMANDED to the trial court for determination of whether or not service
charges and penalty charges in case of late payment are due from petitioner Kalilid to respondent Bank, and if
so, the amount thereof, as well as for determination of the amount of interest on past due interest, due and
payable by petitioner Kalilid to respondent Bank. No pronouncement as to costs.
SO ORDERED.
Fernan (Chairman), Gutierrez, Jr., Bidin and Cortes, JJ., concur.
13. PNB vs Leather Co March 3, 1959
PHILIPPINE NATIONAL BANK, Plaintiff-Appellee, v. PHILIPPINE LEATHER CO. INC., ET

AL., Defendants-Appellants.
Castano & Ampil for Appellants.
Ramon B. De los Reyes for Appellee.
SYLLABUS
1. PLEADING AND PRACTICE; SUMMARY JUDGMENT; WHEN MOVING PARTY ENTERED TO

JUDGMENT; CASE AT BAR. — In their answer, the defendants admit the plaintiff’s averments excepts as to
the correctness of the amounts due, the correctness of which they were still checking, and for that reason
lacking sufficient knowledge or information to form a belief as to the truth and veracity of the amounts due,
they deny the amounts claimed by the plaintiff to be due them. Hence, plaintiff is entitled to summary
judgment.
DECISION
PADILLA, J.:
In its complaint filed in the Court of First Instance of Manila, the plaintiff alleges that on 1 September 1952 the
defendant Philippine Leather Co., Inc. applied for a commercial letter of credit in the sum of $14,814.80, U. S.
currency, under the terms and conditions set forth in an application filed by the defendants in favor of the
Turner Tanning Machinery Co. of Peabody, Massachusetts, U. S. A. to cover the full invoice value of certain
machineries and their accessories; that on 3 October 1952 the plaintiff approved the application "subject to 30%
deposit and the joint and several signatures of Mr. Isidoro Tinoco and Mrs. Soledad L. Basa" which conditions
were complied with; that on 8 October 1952, the plaintiff issued Letter of credit No. 51469 in favor of the
Turner Tanning Machinery Company; that on 15 November 1952 the Turner Tanning Machinery Co., drew
upon the letter of credit the sum of $14,549.17, U.s. currency; that upon arrival in the Philippines of the
machineries and their accessories imported by the defendants, the plaintiff released them to the defendants
under a trust receipt, that on 23 January 1953 the plaintiff presented to the defendants for payment the draft
drawn by the Turner Tanning Machinery Co., upon Letter of Credit No. 51469 which was accepted by them;
that after the draft had matured on 23 April 1953 the plaintiff made numerous demands upon the defendants to
pay the amount of the draft and the charges due thereon but the defendants failed and refused to pay; and that as
of 15 October 1953, the outstanding balance of the defendants on the draft is P22,787.79, Philippine currency,
plus interest thereon at the rate of P4,89135 daily until fully paid. It alleges further that on 30 January 1953 the
defendant Philippine Leather Co., Inc., applied for a commercial letter of credit in the sum of $2,587.50, U.S.
currency, under the terms and conditions set forth in an application filed by the defendants in favor of Bay State
Chemical Co., of Boston, Massachusetts, U.S.A., to pay for the importation of color dye; that the plaintiff
approved the application "subject to 30% deposit and the joint and several signatures of Mr. Isidoro Tinoco and
Mrs. Soledad L. Basa," which conditions were complied with; that there after the plaintiff issued Letter of
Credit No. 53753 in favor of the Bay State Chemical Co., that on 12 March 1953 the Bay State Chemical Co.,
drew upon the letter of credit the sum of $2,482.40, U.S. currency; that the draft drawn by the Bay State
Chemical Co., was presented by the plaintiff to the defendants for payment; that the defendants failed and
refused to pay the amount of the draft and the charges due thereon; that because of the failure and refusal of the
defendants to pay their obligation, the plaintiff delivered the documents of the shipment to the Luzon Brokerage
Co., and requested it to claim and store the shipment in its bonded warehouse, for which service and storage the
defendants are liable to the Luzon Brokerage Co.; that as of 15 October 1953; the outstanding balance of the of
the defendants on the draft is P4,503.05, Philippine currency, plus interest thereon at the rate of P.083569 daily
until fully paid.
The plaintiff prays that after hearing judgment be rendered ordering the defendants to pay it the same of
P22,787.79, with daily interest thereon at the rate of P4.89135 from 15 October 1953 until fully paid; 10% of
the said amount as attorney’s fee; P4,503.05, with daily interest thereon at the rate of P0.83569 from 15 October
1953 until fully paid; the amount of storage and other charges that the Luzon Brokerage Co., would charge the
plaintiff for the handling and storage of the merchandise imported by the defendants under Letter of Credit No.
53753; and the costs of the suit. The plaintiff further prays that pending hearing and final judgment, a writ of
attachment be issued commanding the Sheriff of the City of Manila to levy upon attachment on the properties of
the defendants as security for the satisfaction of any judgment that it may secure against them.
In their answer filed on 28 December 1953 the defendants admit the plaintiff’s averments except as to the
correctness of the amounts due on the two drafts, the correctness of which they were still checking, and for that
reason lacking sufficient knowledge or information to form a belief as to the truth and veracity of the amounts
due on the two drafts, they deny the amounts claimed by the plaintiff to be due from them.
On 25 June 1954 the plaintiff filed a motion for summary judgment on the ground that since the defendants has
admitted the material averments of its complaint except as to the correctness of the amounts due, the
defendants’ answer did not tender a genuine issue. The plaintiff attached to its motion an affidavit subscribed
and sworn to by Ceferino Saavedra, Manager of the Special Assets Department of the plaintiff, in charge of all
outstanding accounts of its debtors, stating the payments made by the defendants on their account and the exact
total amount due from them.
On 7 October 1954 the Court granted the plaintiff’s motion and rendered judgment ordering the defendants,
jointly and severally, to pay-
. . . the plaintiff in the first cause of action, the amount of P22,787.79, with a daily interest of P4.89135 from
October 15, 1953 up to full payment thereof; and 10% of the amount due for attorney’s fees. On the second
cause of action, defendants shall pay, jointly and severally, the sum of P4,503.05, with a daily interest of
P0.83569 from October 15, 1953 until full payment thereof.
Defendants shall also pay the costs.
The defendants appealed to the Court of Appeals. The latter certified the case to this Court for the reason that
only questions of law are raised.
Rule 36 provides:chanrob1es virtual 1aw library
Section 1. Summary judgment for claimant. — A party seeking to recover upon a claim, counterclaim, or
crossclaim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been
served, move with affidavits for a summary judgment in his favor upon all or any part thereof.
SEC. 3. Motion and proceedings thereon. --The motion shall be served at least ten days before the time
specified for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits. The
judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions or file, together with
the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any of the material
fact and that the moving party is entitled to a judgment as a matter of law.
SEC. 5. Form of affidavits. — Supporting and opposing affidavits shall be made on personal knowledge, shall
set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated therein. Sworn or certified copies of all papers of parts thereof referred
to in an affidavit shall be attached thereto or served therewith.
The defendants’ answer that as to the first cause of action they —
. . . are still checking on the correctness of the alleged balance outstanding against them and in favor of the
plaintiff; consequently, for lack of knowledge or information sufficient to form a belief as to the truth and
veracity of the averments embodied in paragraph 7 thereof, they hereby specifically deny the allegations therein
stated;
and that as to the second cause of action they--
. . . are checking on the veracity and correctness of the balance allegedly outstanding in favor of the plaintiff
manifested in paragraph 6 of the same, they, by virtue thereof, specifically deny it for lack of knowledge and
belief as to the truth of the allegations embodied in the aforestated paragraph.
does not tender a genuine issue. In fact they admit that they are indebted to the plaintiff. As the affidavit
subscribed and sworn to by the Manager of the Special Assets Department of the plaintiff, in charge of all
outstanding accounts of its debtors, attached to the motion for summary judgment, furnishes the Court with the
payments made by the defendants on their account and the amount due from them, which they failed to oppose
by counter affidavits, the plaintiff is entitled to summary judgment. (1)
The judgment appealed from is affirmed, with costs against the appellants.
Paras, C.J., Bengzon, Montemayor, Reyes A., Bautista Angelo, Labrador, Concepcion, Reyes J.B.L. and
Endencia, JJ., concur.
14. Gatchalian vs Parilin et al 6 SCRA 508
[G.R. No. 45425. April 29, 1939.]
JOSE GATCHALIAN, ET AL., Plaintiffs-Appellants, v. THE COLLECTOR OF INTERNAL

REVENUE, Defendant-Appellee.
Guillermo B. Reyes for Appellants.
Solicitor-General Tuason for Appellee.
SYLLABUS
1. PARTNERSHIP OF A CIVIL NATURE; COMMUNITY OF PROPERTY; SWEEPSTAKES; INCOME

TAX. — According to the stipulated facts the plaintiffs organized a partnership of a civil nature because each of
them put up money to buy a sweepstakes ticket for the sole purpose of dividing equally the prize which they
may win, as they did in fact in the amount of P60,000 (article 166C, Civil Code). The partnership was not only
formed, but upon the organization thereon and the winning of the prize, J. G. personally appeared in the office
of the Philippine Charity Sweepstakes, in his capacity as co-partner, as such collected the prize, the office
issued the check for P60,000 in favor of J. G. and company, and the said partner, in the same capacity, collected
the check. All these circumstances repel the idea that the plaintiffs organized and formed a community of
property only.
2. ID.; ID.; ID.; ID. — Having organized and constituted a partnership of a civil nature, the said entity is the one
bound to pay the income tax which the defendant collected under the aforesaid section 10 (a) of Act No. 2833,
as amended by section 2 of Act No. 3761. There is no merit in plaintiffs’ contention that the tax should be
prorated among them and paid individually, resulting in their exemption from the tax.
DECISION
IMPERIAL, J.:
The plaintiff brought this action to recover from the defendant Collector of Internal Revenue the sum of
P1,863.44, with legal interest thereon, which they paid under protest by way of income tax. They appealed from
the decision rendered in the case on October 23, 1936 by the Court of First Instance of the City of Manila,
which dismissed the action with the costs against them.
The case was submitted for decision upon the following stipulation of facts:jgc:chanrobles.com.ph
"Come now the parties to the above-mentioned case, through their respective undersigned attorneys, and hereby
agree to respectfully submit to this Honorable Court the case upon the following statement of
facts:jgc:chanrobles.com.ph
"1. That plaintiffs are all residents of the municipality of Pulilan, Bulacan, and that defendant is the Collector of
Internal Revenue of the Philippines;
"2. That prior to December 15, 1934 plaintiffs, in order to enable them to purchase one sweepstakes ticket
valued at two pesos (P2), subscribed and paid therefor the amounts as follows:
1. Jose Gatchalian P0.18
2. Gregoria Cristobal .18
3. Saturnina Silva .08
4. Guillermo Tapia .13
5. Jesus Legaspi .15
6. Jose Silva .07
7. Tomasa Mercado .08
8. Julio Gatchalian .18
9. Emiliana Santiago .18
10. Maria C. Legaspi .16
11. Francisco Cabral .13
12. Gonzalo Javier .14
13. Maria Santiago .17
14. Buenaventura Guzman .13
15. Mariano Santos .14
——
Total 2.00
"3. That immediately thereafter but prior to December 16, 1934, plaintiffs purchased, in the ordinary course of
business, from one of the duly authorized agents of the National Charity Sweepstakes Office one ticket bearing
No. 178637 for the sum of two pesos (P2) and that the said ticket was registered in the name of Jose Gatchalian
and Company;
"4. That as a result of the drawing of the sweepstakes on December 15, 1934, the above-mentioned ticket
bearing No. 178637 won one of the third prizes in the amount of P50,000 and that the corresponding check
covering the above-mentioned prize of P50,000 was drawn by the National Charity Sweepstakes Office in favor
of Jose Gatchalian & Company against the Philippine National Bank, which check was cashed during the latter
part of December, 1934 by Jose Gatchalian & Company;
"5 That on December 29, 1934, Jose Gatchalian was required by income tax examiner Alfredo David to file the
corresponding income tax return covering the prize won by Jose Gatchalian & Company and that on December
29, 1934, the said return was signed by Jose Gatchalian, a copy of which return is enclosed as Exhibit A and
made a part hereof;
"6. That on January 8, 1935, the defendant made an assessment against Jose Gatchalian & Company requesting
the payment of the sum of P1,499.94 to the deputy provincial treasurer of Pulilan, Bulacan, giving to said Jose
Gatchalian & Company until January 20, 1935 within which to pay the said amount of P1,499.94, a copy of
which letter marked Exhibit B is inclosed and made a part hereof;
"7. That on January 20, 1935, the plaintiffs, through their attorney, sent to defendant a reply, a copy of which
marked Exhibit C is attached and made a part hereof, requesting exemption from the payment of the income tax
to which reply there were enclosed fifteen (15) separate individual income tax returns filed separately by each
one of the plaintiffs, copies of which returns are attached and marked Exhibits D-1 to D-15, respectively, in
order of their names listed in the caption of this case and made parts hereof; a statement of sale signed by Jose
Gatchalian showing the amounts put up by each of the plaintiffs to cover up the cost price of P2 of said ticket,
copy of which statement is attached and marked as Exhibit E and made a part hereof; and a copy of the affidavit
signed by Jose Gatchalian dated December 29, 1934 is attached and marked Exhibit F and made part hereof;
"8. That the defendant in his letter dated January 28, 1935, a copy of which marked Exhibit G is enclosed,
denied plaintiffs’ request of January 20, 1935, for exemption from the payment of tax and reiterated his demand
for the payment of the sum of P1,499.94 as income tax and gave plaintiffs until February 10, 1935 within which
to pay the said tax;
"9. That in view of the failure of the plaintiffs to pay the amount of tax demanded by the defendant,
notwithstanding subsequent demand made by defendant upon the plaintiffs through their attorney on March 23,
1935, a copy of which marked Exhibit H is enclosed, defendant on May 13, 1935 issued a warrant of distraint
and levy against the property of the plaintiffs, a copy of which warrant marked Exhibit I is enclosed and made a
part hereof;
"10. That to avoid embarrassment arising from the embargo of the property of the plaintiffs, the said plaintiffs
on June 15, 1935, through Gregoria Cristobal, Maria C. Legaspi and Jesus Legaspi, paid under protest the sum
of P601.51 as part of the tax and penalties to the municipal treasurer of Pulilan, Bulacan, as evidenced by
official receipt No. 7454879 which is attached and marked Exhibit J and made a part hereof, and requested
defendant that plaintiffs be allowed to pay under protest the balance of the tax and penalties by monthly
installments;
"11. That plaintiffs’ request to pay the balance of the tax and penalties was granted by defendant subject to the
condition that plaintiffs file the usual bond secured by two solvent persons to guarantee prompt payment of each
installments as it becomes due;
"12. That on July 16, 1935, plaintiff filed a bond, a copy of which marked Exhibit K is inclosed and made a part
hereof, to guarantee the payment of the balance of the alleged tax liability by monthly installments at the rate of
P118.70 a month, the first payment under protest to be effected on or before July 31, 1935;
"13. That on July 16, 1935 the said plaintiffs formally protested against the payment of the sum of P602.51, a
copy of which protest is attached and marked Exhibit L but that defendant in his letter dated August 1, 1936
overruled the protest and denied the request for refund of the plaintiffs;
"14. That, in view of the failure of the plaintiffs to pay the monthly installments in accordance with the terms
and conditions of the bond filed by them, the defendant in his letter dated July 23, 1935, copy of which is
attached and marked Exhibit M, ordered the municipal treasurer of Pulilan, Bulacan to execute within five days
the warrant of distraint and levy issued against the plaintiffs on March 13, 1935;
"15. That in order to avoid annoyance and embarrassment arising from the levy of their property, the plaintiffs
on August 28, 1936, through Jose Gatchalian, Guillermo Tapia, Maria Santiago and Emiliano Santiago, paid
under protest to the municipal treasurer of Pulilan, Bulacan. the sum of P1,260.93 representing the unpaid
balance of the income tax and penalties demanded by defendant as evidenced by income tax receipt No. 35811
which is attached and marked Exhibit N and made a part hereof; and that on September 3, 1936, the plaintiffs
formally protested to the defendant against the payment of said amount and requested the refund thereof, copy
of which is attached and marked Exhibit O and made part hereof; but that on September 4, 1936, the defendant
overruled the protest and denied the refund thereof; copy of which is attached and marked Exhibit P and made a
part hereof; and
"16. That plaintiffs demanded upon defendant the refund of the total sum of one thousand eight hundred and
sixty-three pesos and forty-four centavos (P1,863.44) paid under protest by them but that defendant refused and
still refuses to refund ,the said amount notwithstanding the plaintiffs’ demands.
"17. The parties hereto reserve the right to present other and additional evidence if necessary."cralaw virtua1aw
library
Exhibit E referred to in the stipulation is of the following tenor:jgc:chanrobles.com.ph
"To whom it my concern:jgc:chanrobles.com.ph
"I, Jose Gatchalian, a resident of Pulilan, Bulacan, married, of age, hereby certify, that on the 11th day of
August, 1934, I sold parts of my share on ticket No. 178637 to the persons and for the amount indicated below
and the part of my share remaining is also shown to wit:
Purchaser Amount Address
1. Mariano Santos P0.14 Pulilan, Bulacan.
2. Buenaventura Guzman .13 Do.
3. Maria Santiago .17 Do.
4. Gonzalo Javier .14 Do.
5. Francisco Cabral .13 Do.
6. Maria C. Legaspi .16 Do.
7. Emiliana Santiago .13 Do.
8. Julio Gatchalian .13 Do.
9. Jose Silva .07 Do.
10. Tomasa Mercado .08 Do.

11. Jesus Legaspi .16 Do.
12. Guillermo Tapia .18 Do.
13. Saturnina Silva .08 Do.
14. Gregoria Cristobal .18 Do.
15. Jose Gatchalian .18 Do.
——
2.00 Total cost of said ticket; and that, therefore, the persons named above are entitled to the parts of whatever
prize that might be won by said ticket.
"Pulilan, Bulacan, P. I.
(Sgd.) "JOSE GATCHALIAN"
And a summary of Exhibits D-1 to D-15 inserted in the bill of exceptions as follows:jgc:chanrobles.com.ph
"RECAPITULATIONS OF 15 INDIVIDUAL INCOME TAX RETURNS FOR 1934 ALL DATED

JANUARY 19, 1935 SUBMITTED TO THE COLLECTOR OF INTERNAL REVENUE.
Exhibit Purchase Price Net
Name No. Price won Expenses prize
1. Jose Gatchalian D-1 P0.18 P4,425 P480 3,945
2. Gregoria Cristobal D-2 .18 4,575 2,000 2,575
3. Saturnina Silva D-3 .08 1,875 360 1,515
4. Guillermo Tapia D-4 .13 3,325 360 2,965
5. Jesus Legaspi by Maria
Cristobal D-5 .15 3,825 720 3,105
6. Jose Silva D-6 .08 1,875 360 1,615
7. Tomasa Mercado D-7 .07 1,875 360 1,515
8. Julio Gatchalian by Bea
triz Guzman D-8 .13 3,150 240 2,910
9. Emiliana Santiago D-9 .13 3,325 360 2,966
10. Maria C. Legaspi D-10 .16 4,100 960 3,140

11. Francisco Cabral D-11 .13 3,325 360 2965
12. Gonzalo Javier D-12 .14 3,325 360 2,965
13. Maria Santiago D-13 .17 4,350 360 3,990
14. Buenaventura Guzman D-14 .13 3,325 360 2,965
15. Mariano Santos D-15 .14 3,325 360 2,965
—— ——— —— ——
2.00 50,000"
The legal questions raised in plaintiffs-appellants’ five assigned errors may properly be reduced to the two
following: (1) Whether the plaintiffs formed a partnership, or merely a community of property without a
personality of its own; in the first case it is admitted that the partnership thus formed is liable for the payment of
income tax, whereas if there was merely a community of property, they are exempt from such payment; and (2)
whether they should pay the tax collectively or whether the latter should be prorated among them and paid
individually.
The Collector of Internal Revenue collected the tax under section 10 of Act No. 2833, as last amended by
section 2 of Act No. 3761, reading as follows:jgc:chanrobles.com.ph
"SEC. 10. (a) There shall be levied, assessed, collected, and paid annually upon the total net income received in
the preceding calendar year from all sources by every corporation, joint-stock company, partnership, joint
account (cuenta en participacion), association or insurance company, organized in the Philippine Islands, no
matter how created or organized, but not including duly registered general co-partnerships (compañias
colectivas), a tax of three per centum upon such income; and a like tax shall be levied, assessed, collected, and
paid annually upon the total net income received in the preceding calendar year from all sources within the
Philippine Islands by every corporation, joint-stock company, partnership, joint account (cuenta en
participacion), association, or insurance company organized, authorized, or existing under the laws of any
foreign country, including interest on bonds, notes, or other interest-bearing obligations of residents, corporate
or otherwise: Provided, however, That nothing in this section shall be construed as permitting the taxation of the
income derived from dividends or net profits on which the normal tax has been paid.
"The gain derived or loss sustained from the sale or other disposition by a corporation, joint-stock company,
partnership, joint account (cuenta en participacion), association, or insurance company, or property, real,
personal, or mixed, shall be ascertained in accordance with subsections (c) and (d) of section two of Act
Numbered Two thousand eight hundred and thirty-three, as amended by Act Numbered Twenty-nine hundred
and twenty-six.
"The foregoing tax rate shall apply to the net income received by every taxable corporation, joint-stock
company, partnership, joint account (cuenta en participacion), associations or insurance company in the
calendar year nineteen hundred and twenty and in each year thereafter."cralaw virtua1aw library
There is no doubt that if the plaintiffs merely formed a community of property the latter is exempt from the
payment of income tax under the law. But according to the stipulated facts the plaintiffs organized a partnership
of a civil nature because each of them put up money to buy a sweepstakes ticket for the sole purpose of dividing
equally the prize which they may win, as they did in fact in the amount of P50,000 (article 1665, Civil Code).
The partnership was not only formed, but upon the organization thereof and the winning of the prize, Jose
Gatchalian personally appeared in the office of the Philippine Charity Sweepstakes, in his capacity as co-
partner, as such collected the prize, the office issued the check for P50,000 in favor of Jose Gatchalian and
company, and the said partner. in the same capacity, collected the said check. All these circumstances repel the
idea that the plaintiffs organized and formed a community of property only.
Having organized and constituted a partnership of a civil nature, the said entity is the one bound to pay the
income tax which the defendant collected under the aforesaid section 10 (a) of Act No. 2833, as amended by
section 2 of Act No. 3761. There is no merit in plaintiffs’ contention that the tax should be prorated among them
and paid individually, resulting in their exemption from the tax.
In view of the foregoing, the appealed decision is affirmed, with the costs of this instance to the plaintiff.
appellants. So ordered.
Avanceña, C.J., Villa-Real, Diaz, Laurel, Concepcion and Moran, JJ., concur.
15. PNB vs Utility Assurance and Surety Co 177 SCRA 208
G.R. No. L-39215 September 1, 1989
PHILIPPINE NATIONAL BANK, plaintiff-appellee,

vs.
UTILITY ASSURANCE & SURETY CO., INC., defendant- appellant.
The Chief and Asst. Chief Legal Counsel for plaintiff appellee.
Ceferino M. Carpio, Jr. for defendant-appellant.
RESOLUTION
FELICIANO, J.:
The Kangyo Bank Ltd., Tokyo, Japan, issued Letter of Credit No. 14-10272 in the amount of US$ 28,150.00 in
favor of the Pedro Bartolome Enterprises of Manila to cover an export shipment of logs to Japan. The
beneficiary of the Letter of Credit assigned its rights to Lanuza Lumber. On 29 March 1960, Procopio Caderao,
doing business under the trade name "Lanuza Lumber," obtained a loan of P 25,000.00 from plaintiff-appellee
Philippine National Bank (PNB) as evidenced by a promissory note on the security, among other things, of the
proceeds of the Letter of Credit. The PNB in addition required Lanuza Lumber to submit a surety bond.
Defendant- Appellant Utility Assurance & Surety Co., Inc. ("Utassco"), accordingly, executed Surety Bond No.
B-123 in favor of PNB. It is useful to quote the terms of the Surety Bond in their entirety:
SURETY BOND
Know All Men By These Presents:

That we, LANUZA LUMBER of Surigao, Surigao (532 Rosario St., Manila) as Principal, and the UTILITY
ASSURANCE & SURETY CO., INC., a corporation duly organized and existing under and by virtue of the
laws of the Philippines, with Head Office in the City of Manila, as Surety, are held and firmly bound unto
PHILIPPINE NATIONAL BANK in the penal sum of TWENTY FIVE THOUSAND ONLY-PESOS (P
25,000.00) Philippine Currency, for the payment of which, well and truly to be made, we bind ourselves, our
heirs, executors, administrators and successors and assigns, jointly and severally, firmly by these presents:
The conditions of this obligation are as follows:
Whereas, the Kangyo Bank, Ltd., Tokyo, Japan has granted a letter of credit No. 14-10272 in the amount of $
28,150.00 in favor of Pedro Bartolome Enterprises of 302 Salvacion Apt. 2504 Pennsylvania, Manila, to cover
shipment of 500,000 board feet of logs to Shin Asshigawa Co., Ltd., Tokyo, Japan;
Whereas, on January 21, 1960 the beneficiary, Pedro Bartolome Enterprises assigned the aforementioned letter
of credit to Lanuza Lumber of Surigao per attached Deed of Assignment;
Whereas, the correspondent Bank, Philippine National Bank requires the Lanuza Lumber to post a surety bond
in the sum of Twenty Five Thousand (P 25,000.00) Pesos, Philippine Currency, to guarantee full and faithful
compliance by the beneficiary of the terms and conditions of the said letter of credit.
It is a special provision of this undertaking to guarantee the full payment of a loan not to exceed TWENTY
FIVE THOUSAND PESOS (P 25,000.00) that may be granted by the Philippine National Bank to Lanuza
Lumber.
Whereas, said contract requires said Principal to give a good and sufficient bond in the above-stated sum to
secure the full and faithful performance on his part of said contract;
Now Therefore, if the Principal shall well and truly perform and fulfill all the undertakings, covenants, terms,
conditions and agreements stipulated in said contract, then this obligation shall be null and void otherwise to
remain in full force and effect.
The liability of the UTILITY ASSURANCE & SURETY CO., INC., on this bond will expire on March 17,
1961 and said bond will be cancelled TEN DAYS after its expiration, unless Surety is notified of any existing
obligations thereunder.
In Witness Whereof, we have set our hands and signed our names at Manila on March 17, 1960.
Utility Assurance & Surety Co., Inc.
S/ Dalmacio Urtula, Jr.
DALMACIO URTULA, JR.
AUTHORIZED SIGNATURE
LANUZA LUMBER
S/ Procopio 0. Caderao
General Manager

SIGNED IN THE PRESENCE OF:
(Sgd) ILLEGIBLE
(Sgd) ILLEGIBLE. (Emphasis supplied)
The surety bond was accompanied by an Endorsement No. B-60-3 which provided as follows:
In lieu of the last paragraph of this bond, it is hereby declared and agreed that the following
condition be incorporated in said bond and made an integral part thereof :
That, if the above bounden principal and surety shall, in all respects, duly and fully observe and
perform all and singular terms and conditions of the aforementioned Letter of Credit, then this
obligation shall be and become null and of no further force nor effect; in the contrary case, the
same shall continue in full effect and be enforceable, as a joint and several obligation of the
parties hereto in the manner provided by law so long as the account remains unpaid and
outstanding in the books of the Bank either thru non-collection, extension, renewals or plans of
payment with or without consent of the surety.
It is a special condition of this bond that the liability of the surety thereon shall, at all times, be
enforceable simultaneously with that of the principal without the necessity of having the assets of
the principal resorted to, or exhausted by, the creditor; Provided, however, that the liability of the
surety shall he limited to the sum of TWENTY-FIVE THOUSAND PESOS (P 25,000),
Philippine Currency. Nothing herein contained shall be held to vary, alter, waive or change any
of the terms, limits or conditions of the bond, except as herein-above set forth. (Emphasis
supplied)
The promissory note executed by Lanuza Lumber became due and payable. Neither Lanuza Lumber nor
Utassco paid the loan despite repeated demands by PNB for payment. Accordingly, PNB filed in the then Court
of First Instance of Manila an action to recover the amount of the promissory note with interest as provided
thereon plus attorney's fees. 1
In its Answer to PNB's complaint, Utassco stated that it had "no knowledge or information sufficient to form a
belief as to the truth of the allegations contained in [paragraphs 2, 3, 4 and 5] of the amended complaint and
perforce [denied] the same." 2 At the same time, however, in setting out its affirmative defense, Utassco
admitted that it had executed the surety bond and simultaneously pointed to the provisions of Endorsement No.
B- 60-3. In particular, Utassco contended that its obligation under the Surety Bond was to secure the
performance of all the terms and conditions of the US$ 28,150.00 Letter of Credit issued by Kangyo Bank Ltd.
and had not guaranteed the performance of Lanuza Lumber's obligation under its P 25,000.00 loan from PNB.
On 14 January 1971, upon motion of PNB, the trial court rendered judgment on the pleadings. The dispositive
part of the judgment reads as follows:
WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered

ordering the defendant to pay the plaintiff the sum of P 25,000.00 plus 6 % interest per annum
counted from May 19, 1962, the date of the filing of the original complaint until fully paid, plus
attorney's fees equivalent to 10 % of the principal obligation and the costs of the suit.
Its Motion for Reconsideration of the trial court's judgment on the pleadings having been denied, Utassco
appealed that judgment to the Court of Appeals.
The Court of Appeals, by a Resolution dated 31 July 1974, certified the appeal to us as involving only questions
of law.Both before the Court of Appeals and this Court, Utassco claims that the trial court fell into error:
(1) in granting the plaintiff-appellee's (PNB's) motion for judgment on the pleadings;
(2) assuming the trial court could render judgment on the pleadings, in doing so prematurely; and
(3) in awarding interest and attorney's fees in favor of plaintiff-appellee PNB.
We turn to the first alleged error. As noted earlier, Utassco had alleged in its answer that it had no knowledge or
information sufficient to form a belief as to the truth of the allegations made by PNB in its complaint. Utassco,
in other words, purported to deny those allegations and hence now contends that it had generated an issue of
fact which the trial court should have first passed upon. Utassco, however, cannot be deemed to have denied the
allegations of the amended complaint, considering that the truth of those allegations relating to the execution of
the surety bond and the contents thereof was peculiarly within the knowledge of Utassco being the issuer of the
bond and Endorsement No. B-60-3 itself. In Equitable Banking Corporation v. Liwanag, 3 the Supreme Court
rejected out of hand the same argument which Utassco now seeks to make:
This pretense is manifestly devoid of merit Although the Rules of Court permit a litigant to file
an answer alleging lack of knowledge to form a belief as to the truth of certain allegations in the
complaint, this form of denial 'must be availed of with sincerity and in good faith, -certainly
neither for the purpose of delay.' Indeed, it has been held that said mode of denial is unavailing
'where the fact as to which want of knowledge is asserted is to the knowledge of the court so
plainly and necessarily within the defendant's knowledge that his averment of ignorance must be
palpably untrue.' Thus, under conditions almost Identical to those obtaining in the case at bar,
this Court, speaking through Mr. Justice Villamor, upheld a judgment on the pleadings in Capitol
Motors vs. Nemesio L. Yabut (G.R. No. L-28140, March 19, 1970) from which we quote:
We agree with the defendant-appellant that one of the modes of specific denial contemplated in
Section 10, Rule 8, is a denial by stating that the defendant is without knowledge or information
sufficient to form a belief as to the truth of a material averment in the complaint. The question,
however, is whether paragraph 2 of defendant-appellant's answer constitutes a specific denial
under the said rule. We do not think so. In Warner Barnes & Co. Ltd. vs. Reyes, et al. G.R. No.
L-9531, May 14,1958 (103 Phil. 662), this Court said that the rule authorizing an answer to the
effect that the defendant has no knowledge or information sufficient to form a belief as to the
truth of an averment and giving such answer the effect of a denial, does not apply where the fact
as to which want of knowledge is asserted, is so plainly and necessarily within the defendant's
knowledge that his averment of ignorance must be palpably untrue.
In said case the suit was one for foreclosure of mortgage, and a copy of the deed of mortgage
was attached to the complaint: thus, according to this Court, it would have been easy for the
defendants to specifically allege in their answer whether or not they had executed the alleged
mortgage. The same thing can be said in the present case, where a copy of the promissory note
sued upon was attached to the complaint. The doctrine in Warner Barnes & Co. Ltd. was
reiterated in J.P. Juan & Sons, Inc. v. Lianga Industries, Inc., G.R. No. L-25137, July 28, 1969
(28 SCRA 807) . . . . (Emphasis supplied)
At the same time that Utassco pretended to have denied the allegations of PNB's amended complaint, it
admitted in the affirmative defense section of its answer that it had indeed executed the Surety Bond and
Endorsement No. B-60-3 in favor of PNB; Utassco must be deemed thereby to have admitted the due execution
of the Bond and the Endorsement. Its affirmative defense in fact consisted of pleading the very provisions of the
Surety Bond upon which PNB based its cause of action. Thus, the issues raised by the amended complaint and
the answer were not genuine issues of fact on which evidence would have had to be submitted. Those pleadings
raised, rather, questions concerning the proper interpretation of the provisions of the Surety Bond and
Endorsement No. B-60-3, i.e., the determination of whether the surety bond and the endorsement had, as
contended by the PNB, guaranteed the payment by Lanuza Lumber of its P 25,000.00 loan from PNB; or
whether, as maintained by Utassco, the surety bond and its endorsement served merely to secure the
performance of the terms and conditions of the Letter of Credit No. 14-10272. We hold, therefore, that under
these circumstances, the trial court correctly rendered judgment on the pleadings.
We turn to the second error imputed by Utassco to the trial court: that the judgment on the pleadings, while it
may have been within the jurisdiction of the trial court, was prematurely issued. This argument appears to us
even more tenuous than the first assigned error. Utassco claims that the trial court should have withheld
judgment on the pleadings until after the third party action brought by Utassco against the owner of Lanuza
Lumber on the indemnity agreement executed between them, had gone forward to judgment. The third party
complaint could, of course, have been prosecuted quite separately from the principal action between PNB and
Utassco. Indeed, there was no reason at all why the trial court should have deferred rendering judgment on the
pleadings in the principal action, considering that the PNB was not interested at all in the outcome of the third
party complaint. Under Section 12, Rule 6 of the Revised Rules of Court, the purpose of a third party complaint
is to enable a defending party to obtain contribution, indemnity, subrogation or other relief from a person not a
party to the action, Thus, notwithstanding the judgment on the pleadings, Utassco could still proceed with the
prosecution of its third party complaint.
Before passing on to the third error assigned by Utassco, it is important to note that Utassco did not really
dispute the correctness of the conclusion reached by the trial court in respect of the substantive issue raised
before it: whether the bond issued by Utassco secured the obligations of Lanuza Lumber to repay the P
25,000.00 loan obtained from PNB, or whether the bond had secured the Letter of Credit. The trial court held
that the surety bond was intended to secure the repayment of Lanuza Lumber's loan from PNB. We believe and
so hold that the trial court was correct in so holding. In the first place, the surety bond explicitly stated that the P
25,000.00 loan was being secured by the bond:
It is a special provision of this undertaking to guarantee the full payment of a loan not to exceed
TWENTY FIVE THOUSAND PESOS (P 25,000.00) that may be granted by the Philippine
National Bank to Lanuza Lumber.
In the second place, while the bond and the endorsement had referred to the Letter of Credit, Lanuza Lumber
had no obligations under the Letter of Credit. As noted earlier, Lanuza Lumber was beneficiary-assignee of the
Letter of Credit. Thus, Utassco's view would reduce the terms and conditions of the Surety Bond to nonsense.
Such view would also mean that Utassco, in its own reading of the bond, was never at risk since there were no
obligations to secure and that Utassco was in fact collecting premiums for issuing the bond under which it had
no liabilities. The principle of effectiveness is basic in contract interpretation: where two (2) interpretations of
the same contract language are possible, one interpretation having the effect of rendering the contract
meaningless (and one of the parties merely dishonest for receiving consideration thereunder without parting
with any), while the other interpretation would give effect to the contract as a whole, the latter interpretation
must be adopted . 4
In the instant case, the reference to the Letter of Credit in the surety bond and the endorsement was either
merely inadvertent surplusage or, alternatively, merely indication of ineptness on the part of the draftsman of
the bond and the endorsement. It is not disputed by Utassco that the endorsement was intended to replace the
final paragraph of the original bond, which paragraph limited the life of the bond to one year from issuance. The
endorsement had the important effect of giving the bond continuing life so long as "the account" remained
unpaid and outstanding on the books of PNB. The term "account" here could only refer to the account of the
principal debtor, Lanuza Lumber, with PNB. The endorsement also made it clear that the liability of Lanuza
Lumber and Utassco was joint and several in nature, and that Utassco had waived any benefit of excussion that
it might otherwise have had. Finally, on a very practical level, it is difficult to understand how Utassco could
have reasonably supposed that its bond in the amount of RP P 25,000.00 was intended only (or even principally)
to secure performance of the obligations of the issuer-Kangyo Bank-under the Letter of Credit which had a face
value of US$ 28,150.00, many times the face value of the bond.
We come to the final error assigned by Utassco: that the trial court should not have granted interest and
attorney's fees in favor of PNB, considering the clause in the endorsement limiting the liability of Utassco to P
25,000.00. The issue here presented is not a new one. It was extensively discussed and Utassco's submission
decisively rejected by this Court in Plaridel Surety and Insurance Co., Inc. 5 v. P.L. Galang Machinery Co., Inc.
There, the Court held:
Petitioner objects to the payment of interest and attorney's fees because: (1) they were not
mentioned in the bond; and (2) the surety would become liable for more than the amount stated
in the contract of suretyship.
In support of its objection petitioner dwells on the proposition that a surety's liability can not be
extended beyond the terms of his undertaking, citing articles 1956 and 2208 of the New Civil
Code which provide as follows:
ART. 1956. No interest shall be due unless it has been expressly stipulated in writing.
ART. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than
judicial costs, cannot be recovered, except: . . . .
The objection has to be overruled, because as far back as the year 1922 this Court held in
Tagawa vs. Aldanese, 43 Phil. 852, that creditors suing on a suretyship bond may recover from
the surety as part of their damages, interest at the legal rate even if the surety would thereby
become liable to pay more than the total amount stipulated in the bond. 'The theory is that
interest is allowed only by way of damages for delay upon the part of the sureties in making
payment after they should have done. In some states, the interest has been charged from the date
of the judgment of the appellate court. In this jurisdiction, we rather prefer to follow the general
practice which is to order that interest begin to run from the date when the complaint was filed in
court, . . . . '
Such theory aligned with Sec. 510 of the Code of Civil Procedure which was subsequently
recognized in the Rules of Court (Rule 53, Section 6) and with Article 11- 08 of the Civil Code
(now Art. 2209 of the New Civil Code).
In other words the surety is made to pay interest, not by reason of the contract, but by reason of
its failure to pay when demanded and for having compelled the plaintiff to resort to the courts to
obtain payment. It should be observed that interest does not run from the time the obligation
became due, but from the filing of the complaint.
As to attorney's fees. Before the enactment of the New Civil Code, successful litigants could not
recover attorney's fees as part of the damages they suffered by reason of the litigation. Even if
the party paid thousands of pesos to his lawyers, he could not charge the amount to his opponent.
However, the New Civil Code permits recovery of attorney's fees in eleven cases enumerated in
Article 2208, among them 'where the court deem it just and equitable that attorney's fees and
expenses of litigation should be recovered' or 'when the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim.' This gives the
courts discretion in apportioning attorney's fees.
Now, considering, in this case, that the principal debtor had openly and expressly admitted his
liability under the bond, and the surety knew it (p.123 R.A.) we can not say there was abuse of
lower court's discretion in the way of awarding fees, specially when the indemnity agreement . . .
afforded the surety adequate protection. (100 Phil. 681-682. (Emphasis supplied)
WHEREFORE, the Court Resolved to DISMISS the appeal by defendant-appellant Utility Assurance & Surety
Co., Inc. for lack of merit, and to AFFIRM the judgment of the trial court dated 14 January 1971. No
pronouncement as to costs. This Resolution is immediately executory. SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.
16. Gatus vs CA 95 SCRA 531
G.R. No. 174725 January 26, 2011
ALEXANDER B. GATUS, Petitioner,
vs.
SOCIAL SECURITY SYSTEM, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari of the Decision1 of the Court of Appeals dated May 24, 2006 in CA-
G.R. SP No. 88691 (the assailed Decision) and the Resolution 2 dated August 7, 2006 issued by the same court
in said case.
The facts, as summarized by the Court of Appeals, are as follows:
[Petitioner Alexander B.] Gatus worked at the Central Azucarera de Tarlac beginning on January 1, 1972. He
was a covered member of the SSS (SS No. 02-0055015-6). He optionally retired from Central Azucarera de
Tarlac upon reaching 30 years of service on January 31, 2002, at the age of 62 years. By the time of his
retirement, he held the position of Tender assigned at the Distillery Cooling Tower.
In the course of his employment in Central Azucarera de Tarlac, he was certified fit to work on October 21,
1975 and was accordingly promoted to a year-round regular employment.
He suffered chest pains and was confined at the Central Luzon Doctor’s Hospital in Tarlac City on August 12,
1995. Upon discharge on August 17, 1995, he was diagnosed to be suffering from Coronary Artery Disease
(CAD): Triple Vessel and Unstable Angina. His medical records showed him to be hypertensive for 10 years
and a smoker.
On account of his CAD, he was given by the SSS the following EC/SSS Permanent Partial Disability (PPD)
benefits: (a) 8 monthly pensions effective September 1, 1994 and (b) 4 monthly pensions effective January 3,
1997. He became an SSS retirement pensioner on February 1, 2002.
Sometime in 2003, an SSS audit revealed the need to recover the EC benefits already paid to him on the ground
that his CAD, being attributed to his chronic smoking, was not work-related. He was notified thereof through a
letter dated July 31, 2003.
Convinced that he was entitled to the benefits, he assailed the decision but the SSS maintained its position. The
SSS also denied his motion for reconsideration.
He elevated the matter to the ECC, which denied his appeal on December 10, 2004, essentially ruling that
although his CAD was a cardiovascular disease listed as an occupational disease under Annex A of the
Implementing Rules on Employees’ Compensation, nothing on record established the presence of the qualifying
circumstances for responsibility; that it was incumbent upon him to prove that the nature of his previous
employment and the conditions prevailing therein had increased the risk of contracting his CAD; and that he
had failed to prove this requisite. The ECC concluded:
As explained medically, the development of IHD or otherwise termed as Coronary Artery Disease (CAD) is
caused by atherosclerosis, the hardening of the inner lining of arteries. One of the risk factors considered by
medical science for the development of atherosclerosis is smoking. Appellant had been documented to be a
chronic smoker and such factor which is not in any way related to any form of employment increased his risk of
contracting heart disease.
Hence, this recourse, wherein he contends that he had contracted the disease due to the presence of harmful fuel
smoke emission of methane gas from a nearby biological waste digester and a railway terminal where diesel-fed
locomotive engines had "spew(ed) black smoke;" and that he had been exposed for 30 years to various smoke
emissions that had contained carbon monoxide, carbon dioxide, sulfur, oxide of nitrogen and unburned
carbon.3 (Emphases added.)
In the assailed Decision, the Court of Appeals held that petitioner is not entitled to compensation benefits under
Presidential Decree No. 626, as amended, affirming the Decision of the Employees’ Compensation Commission
(ECC), which was likewise a confirmation of the audit conducted by the Social Security System (SSS).
Thus, this petition wherein, even without assistance of counsel, petitioner comes to this Court contending that
"the appellate court’s decision is flawed [and] if not reversed will result in irreparable damage to the interest of
the petitioner."4
Petitioner lists the following as errors in the questioned Decision:
I. The appellate court’s decision is against existing jurisprudence on increased risk theory of rebook
condition and progression and deterioration of illness that supervened during employment and persisted
after optional retirement.
II. Violation of due process.5
The Court of Appeals agreed with the ECC’s findings that based on his medical records, petitioner has been
hypertensive for ten (10) years and smokes 20 packs of cigarettes a year. 6 His medical condition was explained
in the following manner by the ECC:
Ischemic Heart Disease (IHD) is the generic designation for a group of closely related syndromes resulting from
ischemia – an imbalance between the supply and demand of the heart for oxygenated blood. Because coronary
artery narrowing or obstruction owing to atherosclerosis underlies MI, it is often termed coronary artery disease
(CAD). Atherosclerosis which is primarily due to smoking, diet, hypertension and diabetes is the main culprit in
the development of CAD. (Pathologic Basis of Disease by Robbins, 5th edition.)7 (Emphasis supplied.)
Petitioner claims that he was in good health when he first entered the Central Azucarera de Tarlac as a factory
worker at the Alcohol Distillery Plant in 1972.8 He alleges that in the course of his employment he suffered
"essential hypertension" starting 1995, when he experienced chest pains and was confined at the Central Luzon
Doctor’s Hospital in Tarlac City; that he was diagnosed as having "Coronary Artery Disease (CAD) [Triple]
Vessel and Angina Pectoris" and hypertension; that he was initially granted disability benefits by the SSS but
his request for additional benefits was denied; and that the ECC denied his appeal due to allegations of
smoking. He asserts that he has cited "technical, scientific and medical authorities to bolster his claim"
including the exposure he experienced for thirty (30) years from the alcohol distillery to "hydrocarbons and
[locomotives]," carbon monoxide, carbon dioxide, sulfur, phosphorous, nitrogen oxides and soot (particulate
matter). 9
Petitioner uses various references, including encyclopedia and medical books, to discuss the general effects of
pollution, mostly caused by the burning of fossil fuels, to people with cardiovascular diseases; and the
aggravation of coronary artery diseases brought about by exposure to carbon monoxide. 10 Petitioner claims that
"air pollution (carbon monoxide and lead from gasoline) contributed to the development of essential
hypertension and its complications: [c]oronary artery disease, hypertensive cardiovascular disease and stroke."11
Petitioner insists that the allegation of cigarette smoking was not proven and that the ECC did not present a
document signed by competent medical authority to back such claim. Petitioner claims that there is no showing
that the ECC records were elevated to the Court of Appeals, and that the latter had completely ignored his
evidence.
In its Comment12 dated December 11, 2006, respondent SSS alleges that the Decision of the Court of Appeals
affirming the Decision of the ECC was in accordance with law and existing jurisprudence. Respondent SSS
further alleges that as viewed from the records of the case, the petitioner failed to show proof by mere
substantial evidence that the development of his disease was work-related; 13 that petitioner’s heart ailment had
no causal relation with his employment; and that "[as] viewed from by his lifestyle, he was a chain smoker, a
habit [which had] contributed to the development of his heart ailment."14
Respondent further alleges that medical findings have revealed that nicotine in cigarette smoke damages the
blood vessels of the heart, making them susceptible to the hardening of the inner lining of the arteries. As to
petitioner’s contention that there were harmful fuel and smoke emissions due to the presence of methane gas
from a nearby biological waste as well as a railway terminal where diesel-fed locomotive engines spewed black
smoke, respondent counters that these were mere allegations that were not backed by scientific and factual
evidence and that petitioner had failed to show which harmful emissions or substances were present in his
working environment and how much exposure thereto had contributed to the development of his illness.
Respondent points out that petitioner’s "bare allegations do not constitute such evidence that a reasonable mind
might accept as adequate to support the conclusion that there is a causal relationship between his working
conditions" and his sickness and that "the law is clear that award of compensation cannot rest on speculations or
presumptions."15
The sole issue to be determined is whether the Court of Appeals committed grave abuse of discretion in
affirming the finding of the ECC that petitioner’s ailment is not compensable under Presidential Decree No.
626, as amended.
The grounds for compensability are set forth in Section 1, Rule III of the Amended Rules on Employees’
Compensation (the "Amended Rules"), the pertinent portion of which states:
RULE III
Compensability
Sec. 1. Grounds — x x x
(b) For the sickness and the resulting disability or death to be compensable, the sickness must be the result of an
occupational disease listed under Annex "A" of these Rules with the conditions set therein satisfied; otherwise,
proof must be shown that the risk of contracting the disease is increased by the working conditions.
Further, under Annex "A" of the Amended Rules,
For an occupational disease and the resulting disability or death to be compensable, all of the following
conditions must be satisfied:
1. The employee's work must involve the risks described herein;
2. The disease was contracted as a result of the employee's exposure to the described risks;
3. The disease was contracted within a period of exposure and under such other factors necessary to
contract it;
4. There was no notorious negligence on the part of the employee.
Cardiovascular diseases are considered as occupational when contracted under any of the following conditions:
(a) If the heart disease was known to have been present during employment there must be proof that an
acute exacerbation clearly precipitated by the unusual strain by reason of the nature of his work.
(b) The strain of work that brings about an acute attack must be of sufficient severity and must be
followed within twenty-four (24) hours by the clinical signs of a cardiac insult to constitute causal
relationship.
(c) If a person who was apparently asymptomatic before subjecting himself to strain at work showed
signs and symptoms of cardiac injury during the performance of his work and such symptoms and signs
persisted, it is reasonable to claim a causal relationship.16
The burden of proof is thus on petitioner to show that any of the above conditions have been met in his case.
The required proof is further discussed in Ortega v. Social Security Commission17 :
The requisite quantum of proof in cases filed before administrative or quasi-judicial bodies is neither proof
beyond reasonable doubt nor preponderance of evidence. In this type of cases, a fact may be deemed established
if it is supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion. In this case, substantial evidence abounds.18
As found by the Court of Appeals, petitioner failed to submit substantial evidence that might have shown that
he was entitled to the benefits he had applied for. We thus affirm in toto the findings and conclusions of the
Court of Appeals in the questioned Decision and quote with approval the following pronouncements of the
appellate court:
The degree of proof required under P.D. 626 is merely substantial evidence, which means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion. Accordingly, the claimant
must show, at least by substantial evidence, that the development of the disease was brought about largely by
the conditions present in the nature of the job. What the law requires is a reasonable work connection, not a
direct causal relation.
Gatus was diagnosed to have suffered from CAD; Triple Vessel and Unstable Angina, diseases or conditions
falling under the category of Cardiovascular Diseases which are not considered occupational diseases under the
Amended Rules on Employees Compensation. His disease not being listed as an occupational disease, he was
expected to show that the illness or the fatal disease was caused by his employment and the risk of contracting
the disease was increased or aggravated by the working conditions. His proof would constitute a reasonable
basis for arriving at a conclusion that the conditions of his employment had caused the disease or that such
working conditions had aggravated the risk of contracting the illness or the fatal disease.
Under ECC Resolution No. 432 dated July 20, 1977, cardiovascular disease is deemed compensable under any
of the following conditions, viz:
(a) If the heart disease was known to have been present during employment, there must be proof that an
acute exacerbation was clearly precipitated by the unusual strain by reasons of the nature of his work.
(b) The strain of work that brings about an acute attack must be of sufficient severity and must be
followed within 28 hours of the clinical signs of cardiac insult to constitute causal relationship.
xxxx
Gatus did not discharge the burden of proof imposed under the Labor Code to show that his ailment was work-
related. While he might have been exposed to various smoke emissions at work for 30 years, he did not submit
satisfactory evidence proving that the exposure had contributed to the development of his disease or had
increased the risk of contracting the illness. Neither did he show that the disease had progressed due to
conditions in his job as a factory worker. In fact, he did not present any physician’s report in order to
substantiate his allegation that the working conditions had increased the risk of acquiring the cardiovascular
disease.
Verily, his mere contention of exposure to various smoke emissions in the working environment for a period of
time does not ipso facto make the resulting disability compensable. Awards of compensation cannot rest on
speculations or presumptions, for the claimant must prove a positive proposition. As pronounced in Sante v.
Employees’ Compensation Commission:
x x x What kind and quantum of evidence would constitute an adequate basis for a reasonable man (not
necessarily a medical scientist) to reach one or the other conclusion, can obviously be determined only on a
case-to-case basis. That evidence must, however, be real and substantial, and not merely apparent; for the duty
to prove work-causation or work-aggravation imposed by existing law is real… not merely apparent…
Moreover, he failed to show the presence of any of the conditions imposed for cardio-vascular diseases by Sec.
18. Hence, the affirmance of the SSS decision was properly made.
The petitioner’s plight might call for sympathy, particularly in the light of his 30 years of service to the
company, but his petition cannot be granted on that basis alone. The policy of extending the applicability of
P.D. 626 as many qualified employees as possible should be balanced by the equally vital interest of denying
undeserving claims for compensation.
In fine, Gatus was not qualified for the disability benefits under the employees compensation law.
WHEREFORE, the Decision of the Employees Compensation Commission is AFFIRMED.19
Petitioner filed a Motion for Reconsideration but this was denied by the Court of Appeals in its Resolution
dated August 7, 2006, which states:
Finding nothing cogent and persuasive in the petitioner’s Motion for Reconsideration dated June 20, 2006, we
DENY the motion.
We point out that our decision of May 24, 2006 has fully explained the bases for the ruling we have made,
including the matters being discussed by the petitioner in his Motion for Reconsideration. We consider it
repetitious and redundant to discuss them herein again.20
The questioned Decision deemed as established fact that petitioner is a cigarette smoker; but petitioner
vehemently denies this, saying there is no competent evidence to prove he had that habit. What petitioner would
like this Court to do is to pass upon a question of fact, which the ECC, the SSS, and the Court of Appeals have
used to deny his claim for compensation. This is not allowed under Section 1 of Rule 45, which states that
"[t]he petition shall raise only questions of law which must be distinctly set forth."21 Hence, questions of fact
may not be taken up in a petition for review on certiorari such as this case now before us. As we have held
previously:
A question of fact exists when the doubt centers on the truth or falsity of the alleged facts while a question of
law exists if the doubt centers on what the law is on a certain set of facts. There is a question of fact if the issue
requires a review of the evidence presented or requires the re-evaluation of the credibility of witnesses.
However, if the issue raised is capable of being resolved without need of reviewing the probative value of the
evidence, the question is one of law.22
This was emphasized in La Union Cement Workers Union v. National Labor Relations Commission,23 thus:
As an overture, clear and unmistakable is the rule that the Supreme Court is not a trier of facts. Just as well
entrenched is the doctrine that pure issues of fact may not be the proper subject of appeal by certiorari under
Rule 45 of the Revised Rules of Court as this mode of appeal is generally confined to questions of law. We
therefore take this opportunity again to reiterate that only questions of law, not questions of fact, may be raised
before the Supreme Court in a petition for review under Rule 45 of the Rules of Court. This Court cannot be
tasked to go over the proofs presented by the petitioners in the lower courts and analyze, assess and weigh them
to ascertain if the court a quo and the appellate court were correct in their appreciation of the evidence.24
The matter of petitioner’s cigarette smoking, established by two competent government agencies and the
appellate court, is thus a matter that cannot be questioned before us via petition for review.
There is no doubt that petitioner deserves sympathy because even the benefits already given to him were
questioned after the SSS found that he was a chronic cigarette smoker. For humanitarian reasons, as he pursued
his claim all the way to the Court as an indigent litigant, and due to his advancing age, we would like to clarify
that what had already been given him should no longer be taken away from him. But he is not entitled to further
compensation for his condition.
We have once more put great weight to the factual findings of administrative agencies and quasi-judicial bodies,
namely the SSS and the ECC, as they have acquired expertise in all matters relating to employee compensation
and disability benefits. As we have held in Ortega v. Social Security Commission25 :
It is settled that the Court is not a trier of facts and accords great weight to the factual findings of lower courts
or agencies whose function is to resolve factual matters. It is not for the Court to weigh evidence all over again.
Moreover, findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise
because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality
when affirmed by the Court of Appeals.26
WHEREFORE, premises considered, the petition is hereby DENIED.
SO ORDERED.
17. Seavan Carrier vs GTI Sportswear Corp 137 SCRA 580
G.R. No. L-65953 July 16, 1985
SEAVAN CARRIER, INC. and RENATO GACHO y ABAD, Petitioners, vs. GTI SPORTSWEAR

CORPORATION (formerly GTI Garments International Corp.) and THE HON. ABELARDO M.
DAYRIT, in his capacity as Judge of the Court of First Instance of Manila, Branch
XXXIX, Respondents.chanrobles virtual law library
GUTIERREZ, JR., J.:
At what point in the execution proceedings of a final judgment does a court lose its jurisdiction over the case?
This is the crucial issue in the instant petition. The background facts of the petition are as follows: chanrobles
virtual law library
Petitioners and private respondents were parties in Civil Case No. R-83-3585 entitled GTI Sportswear
Corporation, plaintiff v. Seavan Carrier, Inc., et al., defendants for recovery of a sum of money and damages in
the defunct Court of First Instance of Manila.chanroblesvirtualawlibrarychanrobles virtual law library
On September 14, 1981, the trial court rendered a decision in favor of the plaintiffs, the private respondents
herein. The defendants below, now petitioners herein were ordered to pay to the plaintiff:
a) P182,053.92 representing the value of 100 cartons of denim jeans lost plus legal rate of interest; chanrobles
virtual law library
b) P160,755.00 representing tariff and customs duties paid by the private respondent on the lost
items;chanrobles virtual law library
c) P2,400,000.00 representing losses in the goodwill of plaintiff; chanrobles virtual law library
d) 20% of said amount as attorney's fees; and chanrobles virtual law library
e) Costs of the proceedings.
This decision, among others, was sought to be reconsidered in an earlier case filed by the petitioners before this
Court in connection with Civil Case No. R-83-3585. In that petition (G.R. No. 62130), this Court, on January
12, 1983, issued the following resolution, to wit:
After deliberating on the petition, the comment filed by the respondents, and the petitioners' reply to the
respondents' comment, the Court Resolved to GIVE LIMITED DUE COURSE to the petitioner only insofar as
the allegedly excessive damages awarded by the respondent court in the amount of P2,400,000.00 representing
purported losses in the goodwill of the private respondent are concerned and to REQUIRE the parties to submit
simultaneously their respective memoranda on the above specific issue within fifteen (15) days from notice
hereof. Except for the above issue, the petition is DENIED due course and, therefore, execution may issue upon
finality hereof as to the judgment award of P182,053.92 representing the value of 100 cartons of denim jeans
lost plus legal rate of interest; the P160,755.00 representing tariff and customs duties paid by the private
respondent on the lost items; 20% of the said amount as attorney's fees; and costs of proceedings.
Pursuant to this resolution, the trial curt issued an order of partial execution of judgment. Consequently, after
the clerk of court issued the correspondent writ of execution, the deputy sheriff issued a "notice of sale on the
execution of personal property." The sale at public auction of the personal properties enumerated in an attached
list of inventories of the petitioners' personal properties was set on March 21,
1983.chanroblesvirtualawlibrary chanrobles virtual law library
The auction sale was actually conducted by the deputy sheriff on April 11, 1983 with the respondents as the
highest bidder offering the sum of P462,000.00 for eleven (I 1) units of trucks and accessories. On this same
day, the parties entered into a collateral agreement, to wit:
GTI Sportswear Corporation, Inc. and Seavan Carrier, Inc. hereby agree to the following:
(1) GTI purchases in the auction sale today, April 11, 1983, all the eleven (11) units advertised for auction sale,
particularly described as follows:
One Unit-Cummins Truck Plate No. TH-162-GB '80-Body No. 57- Engine No. RD450-249802-Chassis No.
G314558.chanrobles virtual law library
(2) One Unit-Man Diesel Truck-Plate No. TH-NVB 471 '83 Chassis No. 391-0020.chanrobles virtual law
library
(3) One Unit Man Diesel Truck-Plate No. TH-NVB 473 Body No. 62 Motor No. 2413144-0361111-Serial No.
2530400440.chanrobles virtual law library
(4) One Unit TH Truck-Plate No. TH -NVZ-928 '82-Body No. 34-Motor No. RD450-24040-Serial No.
(5) One Unit-TH Truck-Plate No. TH-142-GB '80-Body No. 38 Motor No. LTC-18260 RIZ Serial No.
(6) One Unit -IH Truck-Plate No. NVB-474-Body No. 65 Motor No. 108759-66-Serial No. KGB-
(7) One Unit-IH Truck-Plate No. JB-147-Body No. 43 Motor No. RD450-234271-Serial No. G-
(8) One Unit-IH Truck-Plate No. GB-1240-Body No. 36-Motor No. RD-406-A-17172-Chassis No. G-261450.
11
(9) One Unit-IH Truck-Plate No. 151 GB '80-Body No. 47 Motor No. RD450-234381-Serial No. G-
(10) One Unit-IH Truck-Plate No. NVB-461 '83-Body No. 61 Motor No. DV-550836352-Serial No.
DO5316.chanrobles virtual law library
(11) OneUnit-TH Truck-PlateNo.475, Body No. 60, Motor

No. -- -Serial No. --.
for the bid price of Four Hundred Sixty-Two Thousand Pesos

(P462,000.00).chanroblesvirtualawlibrary chanrobles virtual law library
(2) However, Seavan Carrier, Inc. is hereby given forty-five (45) days to come up with the entire obligation to
GTI Inc. in the amount of six hundred ninety-seven thousand one hundred forty- two & 58/100 (P697,142.58)
including interest (P21,896.48 per month) and expenses at the time of payment shall reconvey to Seavan
Carrier, Inc. the aforesaid eleven (11) units in full satisfaction of the judgment.chanrobles virtual law library
GTI SPORTSWEAR CORPORATION

By:
H.R. HIPOLITO
Executive Vice-President
Seavan Carrier, Inc.

By:
TEOFILO C. LAGO
President
On the next day, April 12, 1983, the deputy sheriff issued a certificate of sale in favor of the
respondents.chanroblesvirtualawlibrary chanrobles virtual law library
On April 25, 1983, the petitioners filed an urgent motion for protective order. The motion alleged that on April
18, 1983, the defendant-company through its president tried to tender the sum of P697,142.58 to secure release
of the eleven (11) units of trucks and accessories per agreement but instead, the plaintiffs through counsel were
demanding P1,014,585.84; that this amount contained in a "bill of expenses" was more than the satisfaction of
the judgment which was only P608,449.62 as computed by the deputy sheriff; that the plaintiff is charging
16.517(,, interest against the legal rate of 6% as provided for by law and the judgment and that no evidence of
the payment of the customs duties of P160,155.00 was presented. The petitioners prayed that the respondents be
made to comply with the collateral agreement and that the deputy sheriff be required to make his return
itemizing the amounts due and lawful charges incident to the sale, chanrobles virtual law library
On May 30, 1983, the trial court issued an order denying the aforesaid motion. A motion for reconsideration
was denied in an order dated August 12, 1983. This denial prompted the petitioners to file a notice of appeal
which was likewise denied in an order dated October 26, 1983.chanroblesvirtualawlibrary chanrobles virtual
law library
On September 28, 1984, this Court promulgated a decision in G.R. No. 62130 modifying the trial court's
decision insofar as the P2,400,000.00 award representing losses in the goodwill of respondents was concerned.
Except for this award, which was deleted, all the other money awards in Civil Case No. R-8335185 were
affirmed.chanroblesvirtualawlibrary chanrobles virtual law library
The petitioners maintain that there was an irregular execution of the judgment and, therefore, in accordance
with the accepted principle that the court has control over the execution of a judgment, there is reason to issue
the corresponding protective order to prevent injustice to them. They cite Rule 135 of the Rules of Court. The
petitioners contend that - (1) the total amount of the awards under the judgment is much less than the total bid
of the private respondents in the sheriff's sale iii the amount of P462,000.00 and (2) "petitioners had always
demanded for the production of the receipt of payment to the Bureau of Customs of the sum of P160,155.00
representing duties and taxes; and this is material because the ratio decidendi of the decision of the court a quo
that held that there was no exportation of the stolen materials. (sic) Why should duties and taxes be paid without
exportation?" Based on these grounds the petitioners prayed that the petition be
granted.chanroblesvirtualawlibrary chanrobles virtual law library
The trial court denied the urgent motion for protective order and notice of appeal on the ground that under the
circumstances it had no more jurisdiction over the case, the execution proceedings therein having been
terminated. In its order dated October 26, 1983, disapproving the appeal, the Court said:
Before the Court for Resolution is the propriety of defendant Seavan Carrier, Inc's Appeal. Defendant seeks to
Appeal the Orders of the Court dated May 30, 1983 and August 12, 1983. As was stated in the Order of this
Court dated May 30, 1983, there had already been a sale at public auction of the properties of defendant in this
case and in accordance therewith, a Certificate of Sale was prepared by the Sheriff. In fact, defendant had
indicated its conformity, through its President Teofilo C. Lago, in writing to the bid price of plaintiff
(P462,000.00) to the properties subject of the execution. (Notice of Sale dated March 10,
1983).chanroblesvirtualawlibrary chanrobles virtual law library
True enough, the Court had lost its jurisdiction over the case since the proceedings therein had long been
terminated. The Decision of September 14, 1981, which was received on September 22, 1981 by defendant, had
long become final and executory. And which decision (of September 14, 1981) was affirmed by the Supreme
Court on certiorari in its Resolution of January 17, 1983. Rightly so, this Court was constrained to rule that in
view of the present status of the case it had lost jurisdiction to issue such Protective Order prayed for by
defendant, thus, giving rise to the Orders of May 30, 1983 and August 12, 1983. Thereafter defendant filed a
Notice of Appeal on the said Orders of May 30, 1983 and August 12, 1983 which orders denied the (a) Urgent
Motion for Issuance of Protective Order and the (b) Motion for Reconsideration of the Order of May 30, 1983,
respectively. Plaintiff filed an Opposition and/or Motion to Dismiss Appeal as well as a Reply to the Opposition
(to Dismiss Appeal) of defendant. It is basic as well as fundamental that incidental orders cannot be the subject
of an Appeal ...
The general rule is "A case in which an execution has been issued is regarded as still pending so that an
proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the
judgment has a general supervisory control over its process of execution, and this power carries with it the right
to determine very question of fact and law which may be involved in the execution." (Vda. de Paman v. Seneris
115 SCRA 709). Moreover, it has been stated that it is "when the judgment has been satisfied that the same
passes beyond review, for satisfaction thereof is the last act and end of the proceedings. Payment produces
permanent and irrevocable discharge." (Moran, Comments on the Rules of Court, 1979 ed. Vol. 11, p.
405).chanroblesvirtualawlibrary chanrobles virtual law library
Applying the foregoing principles to the case at bar, we rule that contrary to the trial court's findings, the
execution proceedings of the subject judgment had not yet been terminated when the petitioners filed their
urgent motion for protective order. The certificate of sale issued by the deputy sheriff in favor of the private
respondents was only for the satisfaction of P462,000.00 which obviously is not a full satisfaction of the
judgment. This can be gleaned from the fact that a total amount of P608,000.00 to be recovered from the
petitioners by the private respondents pursuant to the judgment was arrived at by the deputy sheriff as
evidenced by the "notice of sale of personal property." (Annex 2, Memorandum for private respondents)
Moreover, the parties' collateral agreement itself shows that the P462,000.00 was but a partial satisfaction of the
judgment.chanroblesvirtualawlibrarychanrobles virtual law library
Hence, the trial court, pursuant to its supervisory control over the execution of the judgment should have
ordered a hearing on the motion to determine the actual amount to be recovered by the private respondents for
the full satisfaction of the judgment. The determination of the exact liability of the petitioners in faithful
compliance with the judgment of the court is vital considering that the judgment itself did not fix the exact
liability due to the private respondents and that the petitioners in the motion alleged that the private respondents
were asking for more than the legal rate of interest. Obviously, these are questions of fact and law which are
directly involved in the execution of the judgment.chanroblesvirtualawlibrary chanrobles virtual law library
It is to be emphasized, however, that the petitioners at this stage of the proceedings may no longer question the
propriety of the P462,000.00 bid of the private respondents in relation to the properties sold at public auction.
At no instance did the petitioners raise an objection to the P462,000.00 bid of the private respondents on the
levied properties. In fact, as observed by the court, the president of the petitioner company signified his
conformity with the bid as evidenced by the "notice of sale on execution of personal property." (Annex 2-A,
Memorandum for private respondents).chanroblesvirtualawlibrary chanrobles virtual law library
Moreover, a certificate of sale on these properties in favor of the private respondents had already been issued on
April 12, 1983 for a partial satisfaction of the judgment. In effect, this part of the judgment, having been
satisfied, has passed beyond review. It is this part of the execution proceedings involving the auction sale of the
levied properties in the amount of P462,000.00 over which the trial court has lost its jurisdiction but not the
entire proceedings.chanroblesvirtualawlibrary chanrobles virtual law library
Anent the petitioners' objections to their paying the sum of P160,155.00, representing duties and taxes, unless
the private respondents present the receipts of payment from the Bureau of Customs, suffice it to say that this
amount was awarded to the private respondents by virtue of the dispositive portion of the judgment, subject of
the execution proceedings. In the case of Fabular v. Court of Appeals (119 SCRA 3 29) citing the earlier case
of Robles v. Timorio (107 Phil. 809), we ruled:
xxx xxx xxx chanrobles virtual law library
... It is settled that the only portion of a decision that becomes the subject of execution is that ordained or
decreed in the dispositive part. Whatever may be found in the body of the decision can only be considered as
part of the reasons or conclusions of the court and while they may serve as guide or enlightenment to determine
the ratio decidendi, what is controlling is what appears in the dispositive part of the
decision.chanroblesvirtualawlibrarychanrobles virtual law library
xxx xxx xxx
Hence, the petitioners can not escape their liability to pay the award of P160,155.00 representing duties and
taxes.chanroblesvirtualawlibrary chanrobles virtual law library
CONSIDERING THE FOREGOING, the petition is hereby GRANTED. The questioned orders are SET
ASIDE.chanroblesvirtualawlibrary chanrobles virtual law library
The regional trial court which succeeded the respondent court of first instance is directed to conduct a hearing
guided by our findings to determine the, exact amount of the petitioners' liability to the private
respondents.chanroblesvirtualawlibrary chanrobles virtual law library
SO ORDERED.
18. Baguio et al bs CA 101 SCAD 1108 GR 126442 December 29, 1998

[G.R. No. 126442. December 29, 1998.]
FELICITO BAGUIO and NEOFITA SIMBAJON, Petitioners, v. HONORABLE ACTING PRESIDING

JUDGE ROSENDO B. BANDAL, JR., SEVENTH JUDICIAL REGION, REGIONAL TRIAL COURT,
NEGROS ORIENTAL, BRANCH 30, DUMAGUETE CITY, and ANDRES, MACARIO, PABLO,
SERGIO, ALBINO, AMADOR, DEMETRIO, PONSIANO, ROMULA, RUFINA, LEONILA, ANGEL,
WILSON, SHERLY, CLARITA, ELIZABETH, JEPET, IYALIN, EMERGENCITA, JESSIE,
FELENICITA, VILLASILIA, JUAN, TENNESSON, FELENICITA, TRINIDAD, REYNALDO,
DULCE, NATIVIDAD, PURITA PERCILIANO, ROMAN, EPIFANIA, CRESTITA, SOTERO ABSIN,
JR., REBECCA, SOTERO, SAMUEL, ROMULO, JOEL, GRENOL, SONIA, MARILOU, OLIVIA,
ALAN, MERCY, NENIE, CORSINA, PIO, FELICIANO, ALICIA, MARIA, PROSPERO, all surnamed
ABSIN, CORNELIA, THELMA, ROSA, ESCOLASTICA, BEVERLY, ELIAS, FELICISIMO,
ILLUMINADA, EUFEMIA, NARCISO, EMILIANO, ENRIQUE, MAXIMO, ERLINDO, OSCAR,
PEPITO, ANECITA, OLIVER PHILIP, MARILYN, all surnamed DOMEN; SEGUNDINO,
LOPERIANO, PEDRO, ROSITA, TELESFORO, all surnamed DIRAY; RAFAELA VENERACION as
guardian ad litem of ERLINDA ALFUERTO, EDGARDO, JOCELYN, LORETA, ROSARIO,
PELAGIO, MARIA vda. de ALFUERTO, as guardian of ERNESTO ALFUERTO, DANILO, MOISES,
TEOFILO, all surnamed ALFUERTO; ESPERANZA CATACUTAN, RUFINA CATACUTAN, for
herself and as guardian ad litem of SIXTO, SEAT, JR., EDWIN, TERESITA, TOMAS, EULOGIO,
JOSE PEDRO, all surnamed SEAT and LOURDES TIMTIM, Respondents.
DECISION
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, seeking to annul the Order 1 of
the Regional Trial Court of Negros Oriental, Branch 30, amending its final and executory judgment, and the
subsequent Order, 2 dated August 22, 1996, denying petitioner’s Motion for Reconsideration in Civil Case No.
4622, an action for Annulment of Documents, Partition, Accounting, and Damages.chanroblesvirtuallawlibrary
The then Presiding Judge Enrique C. Garrovillo handed down a Decision 3 , dated October 12, 1987; disposing,
among other things, thus:jgc:chanrobles.com.ph
"8. Ordering Defendants Felicito Baguio and Neofita Simbajon to deliver the possession of Lot 1868, PLS-321
and the improvements thereon to Plaintiffs within 15 days after this decision has become final;
9. Ordering the partition of Lot 1868, PLS-321 and the value of the fruits and products thereof from February
12, 1965 to the present enumerated in item "7" of this dispositive portion, inequal (sic) shares among the 10
groups of heirs respectively of Andres Absin, Juan Absin, Felipe Absin, Ana Absin, Narciso Absin, Salvador
Absin, Potenciano Absin, Crisanta Absin, Molecia Absin, and Lorenzo Absin mentioned in the Fourth
Amended Complaint and to submit the corresponding Partition Agreement to this Court within 5 days thereafter
for confirmation;" 4
The aforesaid judgment became final and executory on December 20, 1994.
On September 12, 1995, upon motion of plaintiffs (now private respondents), the respondent court ordered 5
issuance of a writ of execution. However, on September 22, 1995 the defendants (now petitioners) moved to
quash such writ of execution 6 , invoking therefor their inability to comply therewith for the given reason that
Lot No. 1868 is presently owned and possessed by the heirs of a certain Flavia Factoran.
Acting on the motion of private respondents, the respondent court 7 came out with its assailed Order, amending
paragraphs eight (8) and nine (9) of the dispositive portion of its Decision dated October 12, 1987, which Order,
reads:jgc:chanrobles.com.ph
"Treated by the Court is the Motion, dated February 25, 1996, filed by plaintiffs, through counsel, praying that
the lot number, i.e. Lot No. 1868, appearing in paragraphs 8 and 9 of the Judgment of this Court, dated October
12, 1987, be amended to read as Lot No. 1898, to conform to the evidence. Plaintiffs contend, in effect, that the
lot under litigation is Lot No. 1898, and that Lot No. 1868 is an erroneous number of the subject
property.chanroblesvirtuallawlibrary:red
It appearing from paragraph 4 of the Amended Complaint, dated October 16, 1967, filed by plaintiffs, (see page
70 of the expediente), and in paragraph 4 of the Third Amended Complaint, dated September 23, 1971, (see
page 210 of the expediente) and in the prayer of said Third Amended Complaint, (see page 219 of the
expediente), as well as in the recital of the facts of the Decision of this Court, dated October 12, 1987 (page 254
of the expediente), that the lot in controversy is Lot No. 1898, Pls.-321, situated in the barangay of Bagacayon,
La Libertad, Negros Oriental, the instant motion is granted. Well settled is the rule in our jurisdiction that a final
and executory judgment of the Court may yet be amended on harmless clerical or typographical errors (Vda. de
Reyes v. Court of Appeals, 1609 SCRA 524). Furthermore, the Honorable Supreme Court has held that where
there is an ambiguity caused by an omission or mistake in the dispositive portion of a decision, the court may
clarify such ambiguity by an amendment even after the judgment had become final (Reinsurance Company of
the Orient, Inc. v. Court of Appeals, 198 SCRA 19; Hiyas Savings and Loan Bank v. Court of Appeals, 202
SCRA 543).
WHEREFORE, as prayed for, paragraphs 8 and 9 of the Decision of this Court, dated October 12, 1987, is
hereby amended to read in the sense that Lot No. 1868, should be written and read as Lot No. 1898.
SO ORDERED." 8
On June 3, 1996, petitioners presented a Motion for Reconsideration of the said Order but to no avail. Their
motion was denied on August 22, 1996. Hence, the petition under scrutiny.
The pivot of inquiry here is: whether or not the respondent court acted with grave abuse of discretion in
amending the dispositive portion of its subject final and executory judgment?
The petition is not impressed with merit.
We discern nothing whimsical or capricious in the assailed action of the respondent court in amending the
dispositive portion of its final and executory decision under attack. Respondent court did the right thing under
the premises. The Order dated August 22, 1996, reads:jgc:chanrobles.com.ph
"As earlier pointed out by plaintiffs, and latter by this Court in its assailed resolution, the lot in controversy is
Lot No. 1898. This can be clearly seen in the pleadings of the parties, as well as in the evidence presented. Lot
no. 1868 simply suddenly cropped up in the Judgment of this Court, dated October 12, 1987. Thus, being not
the subject of the legal controversy, it is very evident that Lot no. 1868 has no bearing in this case, and was
simply a product of a harmless clerical and typographical error. It is unfortunate that defendants and their
counsels failed to understand a simple situation . . ." 9
Precisely, Civil Case No. 4622 refers to no other lot than Lot No. 1898.
In light of the foregoing, we find the error addressed by the Orders in question merely clerical and
typographical. Well settled is the rule "that a final and executory judgment of the Court may yet be amended on
harmless clerical or typographical errors." 10 Undoubtedly, a court may still amend a final and executory
judgment to clarify an ambiguity caused by an omission or mistake in the disposition of the Decision. 11
WHEREFORE, the Petition is hereby DISMISSED for lack of merit. No pronouncements as to costs.
SO ORDERED.chanroblesvirtualawlibrary

Represented by His Estate/Heirs and Imelda R. Marcos, Pursuant To RA 1379

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Represented by His Estate/Heirs and Imelda R. Marcos, Pursuant To RA 1379

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1. Republic vs. SB GR No.

152154, July 15, 2003

G.R. No. 152154 July 15, 2003

REPUBLIC OF THE PHILIPPINES, petitioner,

BACKGROUND OF THE CASE

(1) Azio-Verso-Vibur Foundation accounts;

(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina Foundation accounts;

(3) Trinidad-Rayby-Palmy Foundation accounts;

(4) Rosalys-Aguamina Foundation accounts and

(5) Maler Foundation accounts.

There is no issue of fact which calls for the presentation of evidence.

The Motion for Summary Judgment is hereby granted.

Subsequently, petitioner filed its opposition thereto.

A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE

B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS

1. ADMISSIONS IN PRIVATE RESPONDENTS' ANSWER;

2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY

3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R.

4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS

C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF

D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF

SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED

A. PRIVATE RESPONDENTS' DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY

B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS,

THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.

THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF DISCRETION IN

PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE

PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE

IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS

PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI

ISSUES BEFORE THIS COURT

(1) THE PROPRIETY OF SUMMARY JUDGMENT

xxx xxx xxx

ANALYSIS OF RESPONDENTS LEGITIMATE INCOME

Schedule of Income (Annex "T" hereof);

Schedule of Income Tax Paid (Annex "T-1" hereof);

Schedule of Net Disposable Income (Annex "T-2" hereof);

Schedule of Networth Analysis (Annex "T-3" hereof).

Official - P 2,627,581.00 - 16.01%

G. THE SECRET MARCOS DEPOSITS IN SWISS BANKS

H. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS

J. TRINIDAD-RAYBY-PALMY FOUNDATION ACCOUNTS

K. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS

L. MALER FOUNDATION ACCOUNTS

xxx xxx xxx

4. Respondents ADMIT paragraphs 3 and 4 of the Petition.

xxx xxx xxx

10. Respondents ADMIT paragraph 11 of the Petition.

(a) Respondents' Answer dated October 18, 1993;

(g) Manifestation dated May 26, 1998; and

(h) General/Supplemental Agreement dated December 23, 1993.

An examination of the foregoing pleadings is in order.

• Respondents' Answer dated October 18, 1993.

Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:

Respondents' lame denial of the aforesaid allegation was:

(1) the Swiss bank deposits existed and

• PRE-TRIAL BRIEF DATED OCTOBER 18, 1993

(d) the documents or exhibits to be presented, stating the purpose thereof;

• OPPOSITION TO MOTION FOR SUMMARY JUDGMENT

• Demurrer to Evidence dated May 2, 2000;52

Yes, Your Honor.

We joined the Manifestation of Counsel.

You do not own anything?