Allegation in the Complaint
29. LAND BANK v. HONEYCOMB
[Judicial Notice]
FACTS:
- Respondent Honeycomb Farms Corporation
(HFC) was the registered owner of a parcel
of agricultural land with an area of 29
hectares, situated in Curvada, Caintagan,
Masbate.
- Through a letter, HFC voluntarily offered its
land to the Department of Agrarian Reform
(DAR) for coverage under RA 6657 - the
Comprehensive Agrarian Reform Law
(CARL), for P581,932.00 or at P20,000.00
per hectare.
- Pursuant to the rules and regulations
governing the CARL, the government,
through the DAR and the LBP, determined
an acquirable and compensable area of 27.5
hectares, while 1.5 hectares were excluded
for being hilly and underdeveloped.
- Subsequently, the LBP, as the agency with
the authority to determine land valuation and
compensation under the CARL, and using
the guidelines set forth in DAR Administrative
Order No. 6, series of 1992, fixed the value
of the land in the amount of P165,739.44 and
sent a Notice of Valuation to HFC.
- The HFC rejected LBP’s valuation and it filed
a petition with the DAR Adjudication Board
(DARAB) for a summary administrative
determination of just compensation.
o In its petition, HFC claimed that the
just compensation for the land should
be in the amount of P25,000.00 per
hectare, considering its location and
productivity, or for an aggregate
amount of P725,000.00.
- While the DARAB proceedings were still
pending, HFC filed a Complaint for
Determination and Payment of Just
Compensation with the RTC, praying for a
just compensation of P725,000.00, plus
attorneys fees of 10% of the just
compensation.
HONEYCOMB (HFC)
» HFC justified the direct filing with the Special
Agrarian Court (SAC) by what it saw as
unreasonable delay or official inaction. HFC
claimed that the DARAB disregarded Section
16 of RA 6657 which mandates that the
"DAR shall decide the case within 30 days
after it is submitted for decision."
LAND BANK (LBP)
» countered that HFC’s petition was
"premature and lacks a cause of action for
failure to exhaust administrative remedies."
DARAB: Meanwhile, the DARAB issued a Decision
affirming LBP’s valuation and denying the petition
filed by the HFC for determination and payment of
Just Compensation.
RTC acting as SAC:
• made its own valuation due to the conflicting
valuations of the parties. It found that:
o the land is not fully developed as coconut
and corn land;
o the land is a fertile grass land and
suitable for agriculture;
o the land is located in the side of the road.
• It also took judicial notice that the subject
land is situated near the commercial
district of Curvada, Cataingan, Masbate.
• Due to the foregoing, the Court held that the
just compensation for the land is P32,000.00
per hectare or P882,787.20 for the area of
27.58571 hectares plus consequential
damages at the same value (P32,000.00) per
hectare for the remaining 1.5095 hectares of
the plaintiff’s property left and rendered
useless by the compulsory coverage or for
the total sum of P931,109.20.
- Both parties appealed to the CA.
Contention of HFC: the RTC erred in its
determination of just compensation; the amount
of P931,109.20 is not supported by the evidence
on record while its presented evidence correctly
shows that the market value of the land at the
time of taking was P113,000.00 per hectare.
Contention of LBP:
• challenged the jurisdiction of SAC to hear
HFC’s complaint because of the pending
 DARAB proceedings, emphasizing that
the completion of the administrative
proceedings before the DARAB is a
condition precedent for the filing of a
complaint for the determination of just
compensation before the SAC.
• the RTC committed a serious error
when it took judicial notice of the
property’s roadside location, its
proximity to a commercial district, its
incomplete development as coconut
and corn land, and its condition as
grassland, to determine just
compensation; thereby, it effectively
eschewed the formula for fixing just
compensation, provided under DAR
Administrative Order No. 6, series of
1992.
• Lastly, the LBP questioned the award of
consequential damages and attorneys
fees for lack of legal and factual basis.
CA: reversed the decision of the RTC and dismissed
HFC’s complaint for failure to exhaust administrative
remedies that Section 16(f) of RA 6657 requires. The
CA ruled that HFC "made a procedural shortcut"
when it filed the complaint with the SAC without
waiting for the DARAB’s decision.
- On HFC’s motion for reconsideration, the CA
reinstated the decision of the RTC and
ruled that:
• In expropriation proceedings, the just
compensation to which the owner of
the condemned property is entitled to
is the market value. It noted that in
order to arrive at the proper market
value, several factors such as the
current value of like properties, their
actual or potential uses and their size,
shape and location must be
considered. The CA thus concluded
that the valuation made by the RTC
was based on the evidence on record
since the latter considered the sketch
plan of the property, the testimonies
of the witnesses and the field reports
of both parties.
- Hence, this petition for review on certiorari.
Allegation before the SC
LAND BANK (LBP)
» The CA erred in reinstating the decision of
the SAC since it had no jurisdiction to hear
HFC’s complaint while the DARAB
proceedings were pending. It stressed that
the SAC could not acquire jurisdiction over
the complaint since the DARAB continued to
retain jurisdiction over the determination of
just compensation.
» the CA failed to dismiss the complaint on the
ground of non-exhaustion of administrative
remedies and forum shopping on the part of
HFC. It notes that the HFC’s complaint was
premature and violative of the forum
shopping prohibition since the complaint was
filed with the SAC despite the pendency of
the DARAB proceedings.
» The CA erred when it failed to apply the
"basic formula" for determining just
compensation prescribed by DAR
Administrative Order No. 6, series of 1992,
as amended by DAR Administrative Order
No. 11, series of 1994. It emphasizes that by
adopting the values fixed by the SAC, the
CA’s determination is contrary to:
o Section 17 of RA 6657; and
o the rulings of the Court bearing on the
determination of just compensation,
particularly LBP v. Sps. Banal, where
the Court categorically held that the
formula prescribed by the DAR in
Administrative Order No. 6, series of
1992, shall be used in the valuation of
the land.
HONEYCOMB (HFC): prays for the dismissal of the
LBP’s petition on the following grounds:
» First, the pendency of the DARAB
proceedings has no bearing on the
jurisdiction of the SAC since Section 57 of
RA 6657 provides that the SAC has original
and exclusive jurisdiction over petitions for
the determination of just compensation.
Conformably with the dictates of Section 57,
litigants can file a case for the determination
of just compensation without the necessity of
a DARAB determination.
» Second, jurisprudence allows resort to
judicial intervention without completing
administrative remedies when there has
been unreasonable delay or official inaction,
as in this case, on the part of the
administrative agency. Hence, for the same
reason, it cannot be charged with forum
shopping.
» Lastly, the strict adherence to the formula
prescribed by DAR Administrative Order No.
6, series of 1992, as amended by DAR
Administrative Order No. 5, series of 1994,
 unduly "ties the hands of the SAC" in the
determination of just compensation.
ISSUE:
Whether the SAC can take judicial notice of the
nature of land in question without the requisite
hearing.
RULING:
• NO. The SAC erred in concluding that the
subject land is commercial in nature, after
taking judicial notice that it is "situated near
the commercial district of Curvada,
Cataingan, Masbate."
• In Land Bank of the Philippines v.
Honeycomb Farms Corporation, a case with
substantially the same factual antecedents
and the same respondent company, the
Court categorically ruled that the parties
must be given the opportunity to present
evidence on the nature of the property before
the court a quo can take judicial notice of the
commercial nature of a portion of the subject
landholding.
While the lower court is not precluded from
taking judicial notice of certain facts, it must exercise
this right within the clear boundary provided by
Section 3, Rule 129 of the Rules of Court, which
provides:
Section 3. Judicial notice, when hearing
necessary.
During the trial, the court, on its own initiative,
or on request of a party, may announce its
intention to take judicial notice of any matter
and allow the parties to be heard thereon.
After the trial, and before judgment or on
appeal, the proper court, on its own initiative,
or on request of a party, may take judicial
notice of any matter and allow the parties to
be heard thereon if such matter is decisive of
a material issue in the case.
In the case at bar, the classification of the
land is obviously essential to the valuation of the
subject property, which is the very issue in the
present case. The parties should thus have been
given the opportunity to present evidence on the
nature of the property before the lower court took
judicial notice of the commercial nature of a portion
of the subject landholdings. As held in LBP v.
Wycoco:
The power to take judicial notice is to be
exercised by courts with caution especially
where the case involves a vast tract of land.
Care must be taken that the requisite
notoriety exists; and every reasonable doubt
on the subject should be promptly resolved
in the negative. To say that a court will take
judicial notice of a fact is merely another way
of saying that the usual form of evidence will
be dispensed with if knowledge of the fact
can be otherwise acquired. This is because
the court assumes that the matter is so
notorious that it will not be disputed. But
judicial notice is not judicial knowledge. The
mere personal knowledge of the judge is not
the judicial knowledge of the court, and he is
not authorized to make his individual
knowledge of a fact, not generally or
professionally known, the basis of his action.
Hence, the petition for review on certiorari
was granted and the present case was remanded to
the SAC for the determination of just compensation
in accordance to Section 17 of RA 6657 and
applicable DAR regulations.
OTHER ISSUES:
1. Whether the SAC properly acquired
jurisdiction over HFC’s complaint despite
the pendency of the DARAB proceedings.
YES. The RTC, sitting as a Special
Agrarian Court, has original and exclusive
jurisdiction in just compensation cases under
RA 6657. This "original and exclusive"
jurisdiction of the RTC would be undermined
if the DAR would vest in administrative
officials original jurisdiction in compensation
cases and make the RTC an appellate court
for the review of administrative decisions.
Moreover, the taking of property
under RA No. 6657 is an exercise of the
power of eminent domain by the State.
Hence, the valuation of the property or
determination of just compensation in
eminent domain proceedings is essentially a
judicial function which is vested with the
courts and not with administrative agencies.
Specifically, "when the parties cannot agree
on the amount of just compensation, only the
exercise of judicial power can settle the
 dispute with binding effect on the winning
and losing parties." Thus, HFC correctly filed
a petition for the determination of just
compensation with the SAC. Consequently,
the SAC properly took cognizance of HFC’s
petition for determination of just
compensation.
2. Whether HFC failed to exhaust
administrative remedies when it directly
filed a petition for the determination of
just compensation with the SAC even
before the DARAB case could be
resolved.
NO. In LBP. v. Wycoco, ll, the Court
held that the doctrine of exhaustion of
administrative remedies does not apply
when the issue has been rendered moot and
academic. In the present case, the issue is
now moot considering that the valuation
made by the LBP had long been affirmed in
toto by the DARAB in its 1998 Decision.
3. Whether HFC is guilty of forum shopping.
NO. Forum shopping exists when the
elements of litis pendentia are present or
where a final judgment in one case will
amount to res judicata in another. Litis
pendentia requires the concurrence of the
following requisites: (1) identity of parties, or
at least such parties as those representing
the same interests in both actions; (2) identity
of rights asserted and reliefs prayed for, the
reliefs being founded on the same facts; and
(3) identity with respect to the two preceding
particulars in the two cases, such that any
judgment that may be rendered in the
pending case, regardless of which party is
successful, would amount to res judicata in
the other case.
In the present case, HFC did not
commit forum shopping because the third
element of litis pendentia is lacking. The
DARAB’s land valuation is only preliminary
and is not, by any means, final and
conclusive upon the landowner or any other
interested party. The courts, in this case, the
SAC, will still have to review with finality the
determination, in the exercise of what is
admittedly a judicial function. Thus, it
becomes clear that there is no identity
between the two cases such that a judgment
by the DARAB, regardless of which party is
successful, would amount to res judicata in
the case before the SAC.
4. Whether the determination of just
compensation by the RTC was contrary to
Section 17 of RA 6657 and the applicable
rulings of the Court.
YES. To determine just
compensation, the SAC is duty bound to take
into consideration the factors fixed by
Section 17 of RA 6657 and apply the basic
formula prescribed and laid down in DAR
Administrative Order No. 6, series of 1992,
as amended by DAR Administrative Order
No. 11, series of 1994.
Section 17 of RA 6657 enumerates
the factors that should be considered to
accurately determine just compensation.
This provision provides that “in determining
just compensation, the cost of acquisition of
the land, the current value of like properties,
its nature, actual use and income, the sworn
valuation by the owner, the tax declarations,
and the assessment made by government
assessors, shall be considered. The social
and economic benefits contributed by the
farmers and the farm workers and by the
Government to the property, as well as the
non-payment of taxes or loans secured from
any government financing institution on the
said land, shall be considered as additional
factors to determine its valuation.”
These factors enumerated in Section
17 have been translated into a basic formula
in DAR Administrative Order No. 6, Series of
1992, as amended by DAR Administrative
Order No. 11, Series of 1994 by DAR
pursuant to its rule-making power under
Section 49 of R.A. No. 6657. As the
government agency principally tasked to
implement the agrarian reform program, it is
the DAR's duty to issue rules and regulations
to carry out the object of the law. The DAR
Administrative Order precisely "filled in the
details" of Section 17, R.A. No. 6657 by
providing a basic formula by which the
factors mentioned therein may be taken into
account.
Due to the foregoing, the RTC cannot
disregard the formula laid down by the DAR,
and choose to come up with its own basis for
the valuation of the land in question. It is
elementary that rules and regulations issued
by administrative bodies to interpret the law
which they are entrusted to enforce, have the
force of law, and are entitled to great respect.
Administrative issuances partake of the
nature of a statute and have in their favor a
presumption of legality. As such, courts
cannot ignore administrative issuances
especially when, as in this case, its validity
was not put in issue. Unless an
administrative order is declared invalid,
courts have no option but to apply the same.

30. Land Bank of the Philippines vs. Wycoco
[Judicial Notice]
FACTS:
- This case involves two consolidated
petitions:
1. Petition for review seeking to modify the
decision of the CA which modified the
decision of the RTC of Cabanatuan City,
acting as a Special Agrarian Court; and
2. Petition for mandamus to compel RTC of
Cabanatuan City to issue a writ of execution
against Judge Caspillo and to inhibit himself
from the Agrarian Case.
- Feliciano Wycoco is the registered owner of
a 94.169 hectare unirrigated and untented
rice land situated in Nueva Ecija.
- In line with the Comprehensive Agrarian
Reform Program (CARP), Wycoco
voluntarily offered to sell the land to DAR for
P14.9 million.
- DAR made an offer but it was rejected by
Wycoco. This prompted DAR to indorse the
case to Department of Agrarian Reform
Adjudication Board (DARAB).
- DARAB requested LBP to open a trust
account in the name of Wycoco and
deposited the compensation offered by DAR.
In the meantime, the property was distributed
to the farmer-beneficiaries.
- DARAB required the parties to submit their
respective memoranda but Wycoco filed a
case for determination of just compensation
with the RTC of Cabanatuan City. DAR and
LBP were impleaded as party-defendants.
- Wycoco filed a manifestation informing the
DARAB of the pendency of the case but the
case was dismissed by DARAB to give way
to the determination of just compensation by
the RTC.
- DAR and LBP filed their respective answers
before the Special Agrarian Court,
property was in accordance with the law and
that Wycoco failed to exhaust administrative
remedies by not participating before the
DARAB.
- The RTC issued a pre-trial order which
stated there was no possibility of amicable
settlement and the issue left is for the
determination of just compensation or correct
valuation of the land owned by the plaintiff
subject of this case.
The evidence presented by Wycoco in support of his
claim were the following:
(1) TCT; (2) Notice of Land Valuation dated June 18,
1992; and (3) letter dated July 10, 1992 rejecting the
counter-offer of LBP and DAR.
On the other hand, DAR and LBP presented the
Land Valuation Worksheets.
RTC: Ruled in favor of Wycoco on the ground that
there is no need to present evidence in support of
the land valuation inasmuch as it is of public
knowledge that the prevailing market value of
agricultural lands sold in Licab, Nueva Ecija is from
P135,000.00 to 150,000.00 per hectare. The court
thus took judicial notice thereof and fixed the
compensation for the entire 94.1690 hectare land at
P142,500.00 per hectare or a total of
P13,428,082.00. It also awarded Wycoco actual
damages for unrealized profits plus legal interest.
CA: DAR and LBP filed separate petitions before
the CA.
The petition filed by DAR was dismissed due to
procedural issues which prompted Wycoco to file a
petition for mandamus praying that the decision
before the RTC be executed.
The petition filed by LBP was dismissed due to
substantive and procedural grounds. However, CA
modified the decision of the RTC by deducting from
the compensation due to Wycoco the amount of the
land that was previously sold by Wycoco to the
Republic.
ISSUE:
1. Whether the RTC acting as Special Agrarian
Court, validly acquire jurisdiction over the instant
case for determination of just compensation? (YES)
2. Assuming that it acquired jurisdiction, was the
compensation arrived at supported by evidence?
[Main issue related to Evidence] (NO)
RULING:
1. YES, under Sec. 57 of RA 6657 (Comprehensive
Agrarian Reform Law of 1988)
Section 57. Special Jurisdiction. The Special
Agrarian Court shall have original and exclusive
jurisdiction over all petitions for the determination of
just compensation to landowners, and the
prosecution of all criminal offenses under this Act.
The DAR, as an administrative agency, cannot be
granted jurisdiction over cases of eminent domain
and over criminal cases. The valuation of property in
eminent domain is essentially a judicial function
which is vested with the Special Agrarian Courts and
cannot be lodged with administrative agencies.
In the case at bar, therefore, the trial court properly
determination of just compensation. It must be
stressed that although no summary administrative
proceeding was held before the DARAB, LBP was
able to perform its legal mandate of initially
. of the case for determination of just compensation is
-trial order
which limited the issue only to the determination of
just compensation estopped them from questioning
the jurisdiction of the special agrarian court. The pre-
trial order limited the issues to those not disposed of
by admission or agreements; and the entry thereof
controlled the subsequent course of action
2. NO
court took judicial notice of the alleged prevailing
market value of agricultural lands in Licab, Nueva
Ecija without apprising the parties of its intention to
take judicial notice thereof. Section 3, Rule 129 of
the Rules on Evidence provides:
Sec. 3. Judicial Notice, When Hearing Necessary.
During the trial, the court, on its own initiative, or
on request of a party, may announce its intention to
take judicial notice of any matter and allow the
parties to be heard thereon.
After trial and before judgment or on appeal, the
proper court, on its own initiative, or on request of a
party, may take judicial notice of any matter and
allow the parties to be heard thereon if such matter
is decisive of a material issue in the case.
2019 AMENDMENT
Section 3. Judicial Notice; when hearing necessary.
During the pre-trial and the trial, the court, motu
proprio or upon motion, shall hear the parties on
the propriety of taking judicial notice of any
matter.
Before judgment or on appeal, the court, motu
proprio or upon motion, may take judicial notice of
any matter and shall hear the parties thereon if such
matter is decisive of a material issue in the case
Inasmuch as the valuation of the property of Wycoco
is the very issue in the case at bar, the trial court
should have allowed the parties to present evidence
thereon instead of practically assuming a valuation
without basis. While market value may be one of the
bases of determining just compensation, the same
cannot be arbitrarily arrived at without considering
the factors to be appreciated in arriving at the fair
market value of the property e.g., the cost of
acquisition, the current value of like properties, its
size, shape, location, as well as the tax declarations
thereon.
Since these factors were not considered, a remand
necessary. The power to take judicial notice is to
be exercised by courts with caution especially
where the case involves a vast tract of land. Care
must be taken that the requisite notoriety exists;
and every reasonable doubt on the subject
should be promptly resolved in the negative. To
say that a court will take judicial notice of a fact is
merely another way of saying that the usual form of
evidence will be dispensed with if knowledge of the
fact can be otherwise acquired. This is because the
court assumes that the matter is so notorious that it
will not be disputed. But judicial notice is not
judicial knowledge. The mere personal
knowledge of the judge is not the judicial
knowledge of the court, and he is not authorized
to make his individual knowledge of a fact, not
generally or professionally known, the basis of
his action.
Other issues resolved by the Court:
DAR cannot be compelled to purchase the entire
property voluntarily offered by Wycoco. The power
to determine whether a parcel of land may come
within the coverage of the Comprehensive Agrarian
Reform Program is essentially lodged with the DAR.
That Wycoco -
acquisition of the approximately 10 hectare portion
of the entire land which was found to be not suitable
for agriculture is no justification to compel DAR to
acquire the whole area.

31. CIR v. Petron
Under Section 4, Rule 129 of the Rules of Court, a
judicial admission requires no proof. The Court cannot
lightly set it aside, especially when the opposing party
relies upon it and accordingly dispenses with further
proof of the fact already admitted. The exception
provided in Rule 129, Section 4 is that an admission may
be contradicted only by a showing that it was made
through a palpable mistake, or that no such admission
was made. In this case, however, exception to the rule
does not exist.
FACTS:
-During the period covering the taxable years
1995 to 1998, petitioner (herein respondent
Petron) had been an assignee of several Tax
Credit Certificates (TCCs) from various BOI-
registered entities for which petitioner utilized in
the payment of its excise tax liabilities for the
taxable years 1995 to 1998.
- Taking ground on a BOI letter issued on 15 May
1998 which states that ‘hydraulic oil, penetrating
oil, diesel fuels and industrial gases are
classified as supplies and considered the
suppliers thereof as qualified transferees of tax
credit,’ petitioner acknowledged and accepted
the transfers of the TCCs from the various BOI-
registered entities. Petitioner’s acceptance and
use of the TCCs as payment of its excise tax
liabilities for the taxable years 1995 to 1998,
had been continuously approved by the DOF as
well as the BIR’s Collection Program Division
- On January 30, 2002, respondent [herein
petitioner CIR] issued the assailed Assessment
against petitioner for deficiency excise taxes for
the taxable years 1995 to 1998, in the total
amount of ₱ 739,003,036.32, inclusive of
surcharges and interests, based on the ground
that the TCCs utilized by petitioner in its
payment of excise taxes have been cancelled
by the DOF for having been fraudulently issued
and transferred. hus, petitioner, through letters
dated August 31, 1999 and September 1, 1999,
was required by the DOF Center to submit
copies of its sales invoices and delivery receipts
showing the consummation of the sale
transaction to certain TCC transferors.
- Instead of submitting the documents required
by the respondent, on February 27, 2002,
petitioner filed its protest letter to the
‘Assessment’ on the grounds, among others,
that:
a. The BIR did not comply with the
requirements of Revenue Regulations 12-99
in issuing the "assessment" letter dated
January 30, 2002, hence, the assessment
made against it is void;
b. The assignment/transfer of the
TCCs to petitioner by the TCC holders was
submitted to, examined and approved by
the concerned government agencies which
processed the assignment in accordance
with law and revenue regulations;
c. There is no basis for the
imposition of the 50% surcharge in the
amount of ₱ 159,460,900.00 and interest
penalties in the amount of ₱ 260,620,335.32
against it;
d. Some of the items included in the
‘assessment’ are already pending litigation
and are subject of the case entitled
‘Commissioner of Internal Revenue vs.
Petron Corporation,’ C.A. GR SP No. 55330
(CTA Case No. 5657) and hence, should no
longer be included in the ‘assessment’; and
e. The assessment and collection of
alleged excise tax deficiencies sought to be
collected by the BIR against petitioner
through the January 30, 2002 letter are
already barred by prescription under
Section 203 of the National Internal
Revenue Code
- On 27 March 2002, respondent, through
Assistant Commissioner Edwin R. Abella
served a Warrant of Distraint and/or Levy on
petitioner to enforce payment of the ₱
739,003,036.32 tax deficiencies. Respondent
allegedly served the Warrant of Distraint and/or
Levy against petitioner without first acting on its
letter-protest. Thus, construing the Warrant of
Distraint and/or Levy as the final adverse
decision of the BIR on its protest of the
assessment, petitioner filed the instant petition
before this Honorable Court [referring to the
CTA Second Division] on April 2, 2002.
- On April 30, 2002, respondent filed his Answer,
raising his Special Affirmative Defenses In a
post-audit conducted by the One-Stop Inter-
Agency Tax Credit and Duty Drawback Center
 (Center) of the Department of Finance (DOF),
pursuant to the Center’s Excom Resolution No.
03-05-99, it was found that TCCs issued were
fraudulently obtained and were fraudulently
transferred to petitioner and The cancellation by
the DOF of the aforesaid TCCs and TDMs has
the presumption of regularity upon which
respondent may validly rely.
- However, on November 12, 2002, respondent
filed a Manifestation informing this Court that on
May 29, 2002, it had reduced the amount of
deficiency excise taxes to ₱ 720,923,224.74 as
a result of its verification that some of the TCCs
which formed part of the original "Assessment"
were already included in a case previously filed
with this Court.
- During the pendency of the case, but after
respondent had already submitted his Formal
Offer of Evidence for this Court’s consideration,
he filed an ‘Urgent Motion to Reopen Case’ on
August 24, 2004 on the ground that additional
evidence consisting of documents presented to
the Center in support of the TCC transferor’s
claims for tax credit as well as document
supporting the applications for approval of the
transfer of the TCCs to petitioner, must be
presented to prove the fraudulent issuance and
transfer of the subject TCCs.
- Respondent submits that it is imperative on his
part to do so considering that, without
necessarily admitting that the evidence
presented in the case of Pilipinas Shell
Petroleum Corporation vs. Commissioner of
Internal Revenue, to prove fraud is not clear
and convincing, he may suffer the same fate
that had befallen upon therein respondent when
this Court held, among others, that ‘there is no
clear and convincing evidence that the Tax
Credit Certificates (TCCs) transferred to Shell
(for brevity) and used by it in the payment of
excise taxes, were fraudulently issued to the
TCC transferors and were fraudulently
transferred to Shell.’
- On October 4, 2004, this Court resolved to grant
respondent’s Motion and allowed respondent to
present additional evidence in support of his
arguments, but deferred the resolution of
respondent’s original Formal Offer of Evidence until
after the respondent has terminated his
presentation of evidence. Subsequent to this
Court’s Resolution, respondent then filed on
October 20, 2004, a Request for the Issuance of
Subpoena Duces Tecum to the Executive Director
of the Center or his duly authorized representative,
and on October 21, 2004, a Subpoena Ad
Testificandum to Ms. Elizabeth R. Cruz, also of the
Center.
- Petitioner filed a ‘Motion for Reconsideration (Re:
Resolution dated October 4, 2004)’ on October 27,
2004 but it is denied. On March 18, 2005, petitioner
filed an ‘Urgent Motion to Revert Case to the First
Division’ with respondent’s ‘Manifestation’ filed on
April 6, 2005 stating that ‘the question of which
Division of this Honorable Court shall hear the
instant case is an internal matter which is better left
to the sound discretion of this Honorable Court
without interference by a party litigant’. On April 28,
2005, this Court denied the Motion of petitioner for
lack of merit.
- On March 18, 2005, petitioner filed an 'Urgent
Motion to Revert Case to the First Division' with
respondent's 'Manifestation' filed on April 6, 2005
stating that 'the question of which Division of this
Honorable Court shall hear the instant case is an
internal matter which is better left to the sound
discretion of this Honorable Court without
interference by a party litigant'.
- On April 28, 2005, this Court denied the Motion of
petitioner for lack of merit.
- On November 22, 2005, respondent filed a
'Motion for Partial Reconsideration' of the Court's
Resolution to admit Exhibits 31 and 31-A on the
ground that he already submitted and offered
certified true copies of said exhibits, which the
Court granted in its Resolution on January 19, 2006.
- However, on February 10, 2006, respondent filed
a 'Motion to Amend Formal Offer of Evidence'
praying that he be allowed to amend his formal
offer since some exhibits although attached thereto
were inadvertently not mentioned in the Formal
Offer of Evidence.
- This Court granted respondent's motion in the
Resolution dated April 24, 2006 and considering
that the parties already filed their respective
Memoranda, this case was then considered
submitted for decision.
CTA 2nd DIV: petitioner is ORDERED TO PAY the
respondent the reduced amount of ₱
600,769,353.95 plus 25% interests and 20%
surcharges. CTA Second Division found that the
circumstances pertaining to the issuance of the
subject TCCs and their transfer to Petron "brim with
fraud."9 Hence, the said court concluded that since
the TCCs used by Petron were found to be
spurious, respondent was deemed to have not paid
its excise taxes and ought to be liable to the CIR
- Aggrieved, Petron appealed the Decision to the
CTA En Banc through a Petition for Review
CTA EN BANC: the CTA En Banc promulgated a
Decision, which reversed and set aside the CTA
Second Division on 04 May 2007. The former
absolved Petron from any deficiency excise tax
liability for taxable years 1995 to 1998. The CTA En
Banc also found that Petron had no participation in
or knowledge of the fraudulent issuance and
transfer of the subject TCCs. Finally, the CTA En
Banc ruled that Petron was considered an innocent
transferee of the subject TCCs and may not be
prejudiced by a re-assessment of excise tax
liabilities that respondent has already settled, when
due, with the use of the TCCs
- The CIR moved for the reconsideration of the CTA
En Banc Decision, but the motion was denied in a
Resolution dated 14 August 2007.
ISSUE:
The court of tax appeals committed reversible error
in holding that respondent petron is not liable for its
excise tax liabilities from 1995 to 1998.. (NO)
RULING:
 ARTICLE 21. "Tax credit" shall mean any of the
credits against taxes and/or duties equal to
those actually paid or would have been paid to
evidence which a tax credit certificate shall be
issued by the Secretary of Finance or his
representative, or the Board, if so delegated by
the Secretary of Finance.
 Tax Credit Certificate — means a certification,
duly issued to the taxpayer named therein, by
the Commissioner or his duly authorized
representative, reduced in a BIR Accountable
Form in accordance with the prescribed
formalities, acknowledging that the grantee-
taxpayer named therein is legally entitled a tax
credit, the money value of which may be used
in payment or in satisfaction of any of his
internal revenue tax liability (except those
excluded), or may be converted as a cash
refund, or may otherwise be disposed of in the
manner and in accordance with the limitations,
if any, as may be prescribed by the provisions
of these Regulations.
 On the other hand, a person is considered to be
in the custody of the law (a) when he is arrested
either by virtue of a warrant of arrest issued
pursuant to Section 6, Rule 112, or by
warrantless arrest under Section 5, Rule 113 in
relation to Section 7, Rule 112 of the revised
Rules on Criminal Procedure, or (b) when he
has voluntarily submitted himself to the
jurisdiction of the court by surrendering to the
proper authorities. Thus, it is apparent that a
TCC undergoes a stringent process of
verification by various specialized government
agencies before it is accepted as payment of an
assignee’s tax liability.
 The affirm the ruling of the CTA En Banc finding
that Petron is a transferee in good faith and for
value of the subject TCCs.
 From the records, we observe that the CIR had
no allegation that there was a deviation from the
process for the approval of the TCCs, which
Petron used as payment to settle its excise tax
liabilities for the years 1995 to 1998.The CIR
quotes the CTA Second Division and urges us
to affirm the latter's Decision, which found
Petron to have participated in the fraudulent
issuance and transfer of the TCCs.
 The CIR quotes the CTA Second Division and
urges us to affirm the latter’s Decision, which
found Petron to have participated in the
fraudulent issuance and transfer of the TCCs.
However, any merit in the position of petitioner
on this issue is negated by the Joint Stipulation
it entered into with Petron in the proceedings
before the said Division. As correctly noted by
the CTA En Banc, herein parties jointly
stipulated before the Second Division in CTA
Case No. 6423 as follows:
o That petitioner (Petron) did not
participate in the procurement and
issuance of the TCCs, which TCCs were
transferred to Petron and later utilized
by Petron in payment of its excise taxes
 This stipulation of fact by the CIR amounts to an
admission and, having been made by the
 parties in a stipulation of facts at pretrial, is the DOF, which declared that the subject TCCs
treated as a judicial admission. Under Section 4, were obtained through fraud. We are not
Rule 129 of the Rules of Court, a judicial persuaded by the CIR’s position on this matter.
admission requires no proof. The Court cannot A transferee in good faith and for value of a
lightly set it aside, especially when the opposing TCC who has relied on the Center's
party relies upon it and accordingly dispenses representation of the genuineness and validity
with further proof of the fact already admitted. of the TCC transferred to it may not be legally
The exception provided in Rule 129, Section 4 required to pay again the tax covered by the
is that an admission may be contradicted only TCC which has been belatedly declared null
by a showing that it was made through a and void, that is, after the TCCs have been fully
palpable mistake, or that no such admission utilized through settlement of internal revenue
was made. In this case, however, exception to tax liabilities.
the rule does not exist.
 On the issue of estoppel, petitioner contends
 We agree with the pronouncement of the CTA that the TCCs, which the Center had continually
En Banc that Petron has not been shown or approved as payment for respondent’s excise
proven to have participated in the alleged tax liabilities, were subsequently found to be
fraudulent acts involved in the transfer and void. Thus, the CIR insists that the government
utilization of the subject TCCs. Petron had the is not estopped from collecting from Petron the
right to rely on the joint stipulation that absolved excise tax liabilities that had accrued to the
it from any participation in the alleged fraud latter as a result of the voidance of these TCCs.
pertaining to the issuance and procurement of We are not persuaded by the CIR’s argument.
the subject TCCs.
-Petron, in this case, was not proven to
 Moreover, a close examination of the have had any participation in or knowledge of the
arguments proffered by the CIR in their Petition CIR’s allegation of the fraudulent transfer and
calls for a reevaluation of the sufficiency of utilization of the subject TCCs. Respondent’s status
evidence in the case. The fundamental rule is as a transferee in good faith and for value of these
that the scope of our judicial review under Rule TCCs has been established and even stipulated
45 of the Rules of Court is confined only to upon by petitioner. Respondent was thereby
errors of law and does not extend to questions provided ample protection from the adverse
of fact. It is basic that where it is the sufficiency findings subsequently made by the Center.
of evidence that is being questioned, there is a
question of fact. Evidently, the CIR does not
point out any specific provision of law that was
wrongly interpreted by the CTA En Banc in the
latter’s assailed Decision. Petitioner anchors it
contention on the alleged existence of the
sufficiency of evidence it had proffered to prove
that Petron was involved in the perpetration of
fraud in the transfer and utilization of the subject
TCCs, an allegation that the CTA En Banc
failed to consider. We have consistently held
that it is not the function of this Court to analyze
or weigh the evidence all over again, unless
there is a showing that the findings of the lower
court are totally devoid of support or are
glaringly erroneous as to constitute palpable
error or grave abuse of discretion. Such an
exception does not obtain in the circumstances
of this case..

 The CIR claims that Petron was not an innocent

transferee for value, because the TCCs
assigned to respondent were void. Petitioner
based its allegations on the post-audit report of

MEROPE ENRIQUEZ VDA. DE CATALAN,
petitioner, vs. LOUELLA A. CATALAN-LEE,
respondent.
[A divorce obtained abroad is proven by the divorce
decree itself. Indeed the best evidence of a judgment
is the judgment itself. The decree purports to be a
written act or record of an act of an official body or
tribunal of a foreign country.]
FACTS:
- Orlando B. Catalan was a naturalized
American citizen. After allegedly obtaining a
divorce in the United States from his first
wife, Felicitas Amor, he contracted a
second marriage with petitioner ( Merope
Enriquez Vda De Catalan)
- On 18 November 2004, Orlando died
intestate in the Philippines.
- on 25 February 2005, petitioner filed with the
RTC of Burgos, Pangasinan a Petition for the
issuance of letters of administration for her
appointment as administratrix of the intestate
estate of Orlando.
- On 3 March 2005, while Spec. Proc. No. 228
was pending, respondent Louella A.
Catalan-Lee, one of the children of Orlando
from his first marriage, filed a similar petition
with the RTC
Allegation in the Complaint
NAME OF PETITIONER
» Merope Enriquez Vda De Catalan
» Petitioner prayed for the dismissal of Spec.
Proc. No. 232 on the ground of litis
pendentia
NAME OF RESPONDENT
» Louella A. Catalan-Lee
» respondent alleged that petitioner was not
considered an interested person qualified to
file a petition
» respondent alleged that a criminal case for
bigamy was filed against petitioner before
Branch 54 of the RTC of Alaminos,
Pangasinan
» Apparently, Felicitas Amor filed a Complaint
for bigamy, alleging that petitioner contracted
a second marriage to Orlando despite having
been married to one Eusebio Bristol
» On 6 August 1998, the RTC had acquitted
petitioner of bigamy
-The trial court ruled that since the
deceased was a divorced American
citizen, and since that divorce was
not recognized under Philippine
jurisdiction, the marriage between
him and petitioner was not valid.
- it took note of the action for
declaration of nullity then pending
action with the trial court in Dagupan
City filed by Felicitas Amor against
the deceased and petitioner (pending
action to be a prejudicial question in
determining the guilt of petitioner for
the crime of bigamy)
- Finally, the trial court found that, in
the first place, petitioner had never
been married to Eusebio Bristol.
RTC of Burgos, Pangasinan:
On 26 June 2006, Branch 70 of the RTC of Burgos,
Pangasinan dismissed the Petition for the issuance
of letters of administration filed by petitioner and
granted that of private respondent
The RTC held that the marriage between
petitioner and Eusebio Bristol was valid and
subsisting when she married Orlando.
It reasoned further that her acquittal in the previous
bigamy case was fatal to her cause.
The trial court held that petitioner was not an
interested party who may file a petition for the
issuance of letters of administration.
CA: Petition for Certiorari
After the subsequent denial of her MR, petitioner
elevated the matter to the Court of Appeals (CA) via
her Petition for Certiorari, alleging grave abuse of
discretion on the part of the RTC in dismissing her
Petition for the issuance of letters of administration.
Contentions:
1. Petitioner reiterated before the CA that the
Petition filed by respondent should have been
dismissed on the ground of litis pendentia.
2. while a petition for letters of administration may
have been filed by an “uninterested person,” the
defect was cured by the appearance of a real party-
in-interest.
3. she insisted that, to determine who has a better
right to administer the decedent’s properties, the
RTC should have first required the parties to present
their evidence before it ruled on the matter.
Ruling:
First, it held that petitioner undertook the wrong
remedy. She should have instead filed a petition for
review rather than a petition for certiorari.
As to the issue of litis pendentia, the court find it not
applicable in the case.
- A petition for letters of administration is a
special proceeding. A special proceeding is
an application or proceeding to establish the
status or right of a party, or a particular fact.
- The only party in this kind of proceeding is
the petitioner of the applicant. Considering its
nature, a subsequent petition for letters of
administration can hardly be barred by a
similar pending petition involving the
estate of the same decedent unless both
petitions are filed by the same person.
WHEREFORE, premises considered, the petition is
DISMISSED for lack of merit. No pronouncement as
to costs.
Petitioner moved for a reconsideration of this
Decision but CA denied her motion. Hence, this
Petition.
SC: PETITION for review on certiorari
Allegation before the SC
NAME OF PETITIONER
» Merope Enriquez Vda De Catalan
NAME OF RESPONDENT
» Louella A. Catalan-Lee
ISSUE:
W/N the petitioner has a preferential right to be
issued the letters of administration over the estate
RULING:
1. RTC in the special proceedings failed to
appreciate the finding of the RTC in Crim. Case No.
2699- A that petitioner was never married to
Eusebio Bristol.
- By failing to take note of the findings of fact
on the nonexistence of the marriage between
petitioner and Bristol, both the RTC and CA
held that petitioner was not an interested
party in the estate of Orlando.
2. It is imperative to note that at the time the bigamy
case in Crim. Case No. 2699-A was dismissed, we
had already ruled that under the principles of comity,
our jurisdiction recognizes a valid divorce obtained
by a spouse of foreign nationality.
This doctrine was established as early as
1985 in Van Dorn v. Romillo, Jr. wherein we
said:
“It is true that owing to the nationality
principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered
by the policy against absolute divorces[,] the
same being considered contrary to our
concept of public policy and morality.
However, aliens may obtain divorces
abroad, which may be recognized in the
Philippines, provided they are valid
according to their national law. In this
case, the divorce in Nevada released
private respondent from the marriage
from the standards of American law,
under which divorce dissolves the
marriage. xxx”
» It appears that the trial court no longer
required petitioner to prove the validity of
Orlando’s divorce under the laws of the
United States and the marriage between
petitioner and the deceased. Thus, there is a
need to remand the proceedings to the
trial court for further reception of
evidence to establish the fact of divorce.
Should petitioner prove the validity of the
divorce and the subsequent marriage, she has
the preferential right to be issued the letters of
administration over the estate. Otherwise, letters
of administration may be issued to respondent, who
is undisputedly the daughter or next of kin of the
deceased, in accordance with Sec. 6 of Rule 78 of
the Revised Rules of Court.
Thus, it is imperative for the trial court to first
determine the validity of the divorce to ascertain the
rightful party to be issued the letters of administration
over the estate of Orlando B. Catalan.
DISPOSITIVE PORTION:
WHEREFORE, premises considered, the Petition
is hereby PARTIALLY GRANTED. The Decision
dated 18 October 2007 and the Resolution dated 20
June 2008 of the Court of Appeals are hereby
REVERSED and SET ASIDE. Let this case be
REMANDED to Branch 70 of the Regional Trial
Court of Burgos, Pangasinan for further proceedings
in accordance with this Decision.
SO ORDERED.

33. PNB vs. REFRIGERATION
INDUSTRIES INC.
[Implied Admissions of Actionable Document]
FACTS:
- This is a petition for review on certiorari
seeking reversal of the Decision of the CA.
- The petitioners:
• Philippine National Bank (PNB) – a
private banking corporation
• Asset Privatization Trust (APT) –
an agency created by Proclamation
No. 50 that takes title or possession,
conserves, provisionally manages,
and disposes assets, which have
been identified for privatization or
disposition, for the benefit of the
National Government.
- The respondent:
• Refrigeration Industries Inc. (RII) –
a manufacturer of refrigerators and
compressors.
- Prior to 1984, RII occupied a portion of the
assembly plant of Delta Motor Corporation.
- RII installed in the plant equipment,
machinery and other chattels RII used in its
business.
- In February 1984, PNB (then a government-
owned and controlled bank) foreclosed
several parcels of real estate and chattels of
DMC located at the DMC Compound.
- PNB was the highest bidder in an auction of
the foreclosed properties.
- Thus, it took possession of all chattels inside
the DMC compound.
• Both as owner and as mortgagee of
the remaining properties.
- On June 18, 1984, RII demanded the release
of its properties still inside the compound
after RII made statements claiming
ownership over them.
- PNB allowed RII to remove some of its
personal properties from the DMC
compound, upon the latter’s showing of proof
of ownership.
- However, RII failed to produce any proof of
ownership, with respect to the contested
properties found in ANNEX “C” of the
complaint.
- The refusal of PNB to release the subject
properties led to the filing of a complaint by
RII for Recovery of Possession with
Damages before the RTC.
Allegation in the Complaint
NAME OF DEFENDANT (PNB & APT)
» PNB consistently manifested in court its
willingness to release the chattels
conditioned upon RII’s showing of evidence
of ownership.
- By virtue of Proclamation No. 50 as
implemented by Administrative Circular No.
14 on February 27, 1989, certain properties
of RII inside DMC’s compound, with some
other acquired assets of PNB covered by the
Circular, were transferred to the APT.
- Thus, APT was impleaded as a party-
defendant.
- Pursuant to RA No. 8758, the corporate
existence of APT expired on December 31,
2000.
- On December 6, 2000, former President
Joseph Estrada signed Executive Order No.
323 creating the Privatization and
Management Office (PMO) which succeeded
the APT.
- At the time, RII had not yet shown
additional evidence to support its claim
over the remaining personal properties in
PNB’s possession.
NAME OF PLAINTIFF (RII)
» 6 years later, RII filed a Motion for Summary
Judgment.
» It averred that there was no genuine issue to
any material fact except the issue on
damages, costs and attorneys’ fees.
» RII alleged that during the pre-trial
conference, PNB manifested to APT, in a
letter dated May 11, 1989, that the
machineries and equipment of RII listed in
Annex “C” of the complaint were
erroneously transferred to APT, and that
in a letter dated May 31, 1989, APT
acknowledged the mistakes and agreed
to release the properties to the authorized
representative of RII.
- Both PNB and APT-(PMO) opposed the
motion on the ground that there still existed a
genuine factual issue, which was the
ownership of the chattels.
RTC:
- Summary Judgment was rendered.
• There is no genuine issue left to be
litigated, the motion for summary
judgment is granted.
- PNB appealed to the CA
CA:
- Affirmed in toto the RTC’s decision.
Thus, this present petition.
Allegation before the SC
NAME OF PETITIONERS (PNB & APT)
» PNB and APT contend that the CA erred in
affirming the summary judgment.
» There was no admission made as to RII’s
ownership of the contested chattels, thus,
there still exists a genuine issue as to a
material fact that precludes the issuance of
summary judgment.
ISSUE:
Whether the failure of PNB and APT to deny the
genuineness and due execution of said documents
amount to judicial admission. (YES)
RULING:
- YES
- The SC agreed with the CA when it correctly
upheld the summary judgment rendered by
the RTC.
• it may be noted that PNB admitted in
its May 11, 1989 letter to APT that the
contested chattels belonged to RII,
but were erroneously taken during
the foreclosure of DMC’s properties;
that these were eventually
transferred to APT.
• It may also be noted that APT
admitted that PNB wrote the letter
dated May 11, 1989; and that APT
wrote a letter dated May 29, 1989 to
PNB. With these admissions, there
is no genuine issue concerning
RII’s ownership of the chattels and
their erroneous delivery to APT
had remained.
- The SC held that a “genuine issue” is an
issue of fact which requires the presentation
of evidence. When the facts as pleaded
appear uncontested or undisputed, then
there is no real or genuine issue or question
as to the facts.
- Summary judgment, as prescribed by the
rules must then ensue as a matter of law, to
weed out sham claims or defenses at an
early stage of the litigation, to avoid the
expense and loss of time involved in a trial,
and 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 suitor to the burden of trial.
- In this case, PNB and APT failed to either
specifically deny or directly assail and raise
as an issue, the validity of the letter dated
May 11, 1989 and the letter dated May 29,
1989. Their failure to deny the
genuineness and due execution of the
said documents amounts to a judicial
admission pursuant to Section 8, Rule 8
of the Rules of Court.
- Judicial admissions do not require proof and
may not be contradicted in the absence of a
prior showing that the admissions had been
made through palpable mistake.
- These letters are deemed admitted as
evidence, and they likewise supersede
the defenses interposed by petitioners in
their respective answers.
- Lastly, PNB consistently manifested its
willingness to release the said properties
upon respondent’s proof of ownership over
them. The correspondence between the
parties shows that PNB actually admitted
that the subject chattels belonged to RII but
were erroneously transferred to petitioner
APT.

34. TORRES v. COURT OF APPEALS
[Extrajudicial admissions in superseded pleadings]
FACTS:
- The facts of this case cover 3 generations.
• The propositus, Margarita Torres
(Margarita), during the Spanish
regime, was married to Claro
Santillan (Claro). Vicente and
Antonina were their children.
• Claro died, leaving Margarita a
widow.
• Antonina married and had 6 children
– Alfredo , Demetria, Adelina, Tomas
and Amado all surnamed Narciso,
who, together with Vicente are the
private respondents.
• Antonina died before the institution of
the cases. Vicente died during the
pendency of the cases in the trial
courts, without progeny.
• After the death of her husband,
Margarita cohabited with Leon
Arvisu Arbole without the benefit of
marriage.
§ Out of their cohabitation,
Petitioner Macaria Torres
(Torres) was born. In her
baptismal certificate, Leon
and Margarita were named as
father and mother. Her name
was listed as “Macaria
Arvisu”.
§ In another baptismal
certificate, her named was
listed as “Macaria Torres”
while her father’s name was
left blank.
§ Margarita died on 1931 and
Leon died on 1922.
- Lot No. 551 had been leased temporarily by
the Government (Lease No. 17) to Margarita
who was the actual occupant. Date of the
lease cannot be determined with exactitude.
- 1910: The government issued to Margarita a
sale certificate over the said lot.
• Testimonial evidence is to the effect
that Leon paid the installments out of
his earnings as a water tender at the
Bureau of Lands. Last installment
was paid 3 years after his death.
- 1933: 20 days before Leon’s death, Leon
sold and transferred in a notarial deed all his
rights and interests to the ½ portion of Lot
No. 551 in favor of Torres.
- Vicente executed an Affidavit claiming
possession of the lot and asking for the
issuance of title in his name.
• The Bureau of Lands issued the
patent in the name of the legal hairs
of Margarita. TCT was issued in the
name of the said heirs.
- Private respondents filed a complaint against
Torres for Forcible Entry, alleging that:
• Torres had entered a portion of Lot.
No. 551 without their consent,
constructed a house, and refused to
vacate upon demand.
• In par. 3 of their original complaint
in this ejectment case, they stated
that:
§ "the plaintiffs and the
defendant Macaria A.
Bautista are the legal heirs
and nearest of kins of
Margarita Torres, who died in
Tanza, Cavite on December
20, 1931."
• In the Amended Complaint filed by
private respondents in the same
Ejectment Case, the underlined
portion was deleted so that the
statement simply read:
§ "That the plaintiffs are the
legal heirs and nearest of kin
of Margarita Torres, who died
at Tanza, Cavite, on
December 20, 1931."
- Torres claimed that:
• She is a co-owner of the lot, being
one of the daughters of Margarita.
JUSTICE OF PEACE COURT:
- Ruled against Torres.
 - Torres appealed to the CFI of Cavite
(Ejectment Case).
- 1954: Torres instituted an action for partition
of Lot No. 551 before the CFI of Cavite
(Partition Case), alleging that:
• Said lot was a conjugal property of
the spouses Margarita and Leon, and
that
• She is their legitimate child.
- Ejectment Case and Partition Case were
jointly tried and decided.
CFI:
- The finding was: Lot No. 551 is a paraphernal
property of Margarita.
- Thus, 2/3 was adjudicated to the private
respondents, and ½ to Torres.
- Torres moved for reconsideration.
- Pending its resolution, the Provincial Capitol
of Cavite was burned, resulting in the
complete destruction of the records of the
two cases, which were later partially
reconstituted.
- CFI of Cavite: granted reconsideration.
• It ruled that Torres is a legitimated
child of Margarita and Leon.
• It ruled that when Tores’ parents were
married in 1909, she became the
legitimated daughter.
- Private respondents appealed.
CA:
- Reversed the CFI of Cavite.
- Torres is not a legitimated daughter. She was
not legally acknowledged before or after the
marriage of her parents.
• Under Article 121 of the old Civil
Code, children shall be considered
legitimated by subsequent marriage
only when they have been
acknowledged by the parents before
or after the celebration.
• Article 131 provides that the
acknowledgment must be in a record
of birth, will, or in some public
document.
- Here, the certificate of baptism of Torres is
not a record of birth referred to in Article 131.
- Torres filed a motion for reconsideration and
for new trial.
• In support of this, she submitted a
typewritten Sworn Statement dated
March 5, 1930 of Spouses Leon and
Margarita.
• In that Sworn Statement:
§ it was stated that Torres is
their legitimized daughter.
She being born out of
wedlock, but she was
legitimized by their
subsequent marriage.
- The reason given for the non-production of
the notarial document during trial was that
the same was only found by Torres’ daughter
Nemensia, among the personal belongings
of private respondent Vicente, after his death
and who may have attempted to suppress it.
- Private respondents argued that it is not
newly discovered evidence which could not
have been produced during the trial by the
exercise of due diligence.
- The Decision of the Appellate Court was
rendered by a Division composed of 3
Justices (J. Perez, J. Leuterio, and J. Reyes).
- When the MR and New Trial was considered,
there was disagreement as to whether new
trial should be granted in respect of the
sworn statement.
- A special division of 5 was formed (J.
Lucerom J. Gatmaitan, J. San Diego, J.
Leuterio, and J. Reyes).
• The division of 5, by the vote of 3 or
2, denied both the MR and new trial.
MACARIA TORRES
- Torres’ two assignments of error were the
following:
- FIRST: Although the CA is correct in
declaring that Torres is not the legitimated
child, it has overlooked to include in its
findings of facts the admission made by
the respondents that Torres and Vicente
and Antonina are brothers and sisters
with common mother Margarita, and they
are the legal heirs and nearest relatives of
Margarita.
• And as a consequence, CA erred in
adjudicating the entire share of
 Margarita in the conjugal solely to
Vicente and heirs of Antonina.
- SECOND: CA has gravely abused its
discretion when it denied the petition for new
trial, knowing as it does that the judgment is
clearly erroneous in view of the evidence
which is offered and no amount of diligence
on the part of the petitioner could it be
produced in court at any time before it was
offered as it was found from the personal
belongings of Vicente Santillan, an adverse
party, after his death.
ISSUES:
1. Whether the statement of the private
respondents in their original complaint is an
admission of Torres’ legitimation and is
controlling in the determination of her
participation in the disputed property (NO, it
has already been abandoned by the
amended complaint)
2. Whether the Sworn Statement can
reasonably qualify as newly discovered
evidence, which could not have been
produced during the trial even with the
exercise of due diligence (YES)
RULING:
1. The statement of the private respondents
in their original complaint is no longer
controlling because it has already been
abandoned by the amended complaint.
The admission adverted to appears in paragraph 3
of private respondents' original complaint in the
Ejectment Case reading:
"the plaintiffs and the defendant Macaria
A. Bautista are the legal heirs and nearest
of kins of Margarita Torres, who died in
Tanza, Cavite on December 20, 1931."
The statement, according to petitioner, is an
admission of her legitimation and is controlling in the
determination of her participation in the disputed
property.
We are not persuaded. In the Amended Complaint
filed by private respondents in the same Ejectment
Case, the underlined portion was deleted so that the
statement simply read:
"That the plaintiffs are the legal heirs and
nearest of kin of Margarita Torres, who died
at Tanza, Cavite, on December 20, 1931."
In virtue thereof, the Amended Complaint takes
the place of the original. The latter is regarded as
abandoned and ceases to perform any further
function as a pleading. The original complaint no
longer forms part of the record.
If petitioner had desired to utilize the original
complaint, she should have offered it in
evidence. Having been amended, the original
complaint lost its character as a judicial
admission, which would have required no proof,
and became merely an extrajudicial admission,
the admissibility of which, as evidence, required
its formal offer. Contrary to petitioner's submission,
therefore, there can be no estoppel by extrajudicial
admission made in the original complaint, for failure
to offer it in evidence.
It should also be noted that in the Partition Case
private respondents, in their Answer (parag. 4),
denied the legitimacy of petitioner.
2. The Sworn Statement can reasonably
qualify as newly discovered evidence,
which could not have been produced
during the trial even with the exercise of
due diligence.
It is our considered opinion that new trial was
warranted to prevent a possible miscarriage of
justice. Assuming that the genuineness and due
execution of the Sworn Statement of March 5, 1930
is established in accordance with procedural due
process, a new trial would resolve such vital
considerations as (1) whether or not said Sworn
Statement qualifies as the public document
prescribed in Article 131 of the old Civil Code; (2)
whether or not it conforms to an act of
acknowledgment by the parents after the celebration
of their marriage as required by Article 121 of the
same code; and (3) whether or not petitioner's
signature as a witness to said document was the
equivalent of the consent necessary for
acknowledgment of an adult person under Article
133 of that Code. Affirmative answers would confer
upon petitioner the status of a legitimated child of her
parents, and would entitle her to enjoy hereditary
rights to her mother's estate.
Private respondents stress that since petitioner
signed as a witness to the document, she should be
chargeable with knowledge of its existence, and,
therefore, the Sworn Statement was not newly
discovered evidence. In our view, the document can
reasonably qualify as newly discovered evidence,
which could not have been produced during the trial
even with the exercise of due diligence; specially if it
really had been in the possession of Vicente
Santillan, an adverse party who, it was alleged, Margarita having given birth to her. Macaria would,
suppressed the document. therefore, be entitled to the full enjoyment of the
status of a legitimated child of Margarita by virtue of
In the interest of judicial expediency, the new trial
Margarita's subsequent marriage with her father
can be conducted by respondent Appellate Court,
Leon Arbole.
now empowered to do so under Section 9 of Batas
Pambansa Blg. 129.
The question of admissibility of the original
complaint for ejectment as a judicial admission
against respondents remains open, in my view,
Additional Note: for proper determination and resolution by the
As we understand it, petitioner has conceded with appellate court with the remand of this case to it
which we concur, that, without taking account of the for further proceedings.
sworn statement of March 5, 1930, she cannot be
considered a legitimated child of her parents.
Continuous possession of the status of a natural
child, fact of delivery by the mother, etc. will not
amount to automatic recognition, but an action for
compulsory recognition is still necessary, which
action may be commenced only during the lifetime
of the putative parents, subject to certain exceptions.

Concurring and Dissenting Opinion of J.

Teehankee:

The majority erred in concluding that the original

complaint cannot be considered a judicial admission
after it was amended.— I do not concur with the
statement in the Court’s main opinion that the
admission by respondents in their original complaint
for ejectment against Macaria that they and Macaria
are the legal heirs of their deceased common mother
Margarita Torres can no longer be invoked by
Macaria as a judicial admission against said
respondents, simply because said respondents had
thereafter filed an amended complaint deleting the
admission. Such admission did not cease to be a
judicial admission simply because respondents
subsequently deleted the same in their amended
complaint. The original complaint, although
replaced by an amended complaint, does not
cease to be a part of the judicial record, not
having been expunged therefrom. The
precedents cited for not considering this admission
against respondents, since Macaria did not formally
offer in evidence the original complaint, do not
appear to be applicable and are based on pure
technicality.

As far as Macaria's mother Margarita Torres is

concerned, there can be no denying their maternity
and filiation. Macaria's being a duly acknowledged
natural child of Margarita is established in the record
of birth, as well as by the very undisputed fact of