Contents

Tanada vs Tuvera.................................................................1
De Roy vs CA.......................................................................4
Villafuerte vs Cordial.............................................................6
Caranto vs Caranto...............................................................9
Carlos vs Sandoval..............................................................14
Cheng vs Sy.......................................................................25
Carolino vs Senga...............................................................28
William Kwong vs Diamond Homeowners.............................33
Atienza vs Brillantes............................................................47
Abalos vs People................................................................48
Famanila vs CA...................................................................53
Guy vs CA..........................................................................56
Otamias vs Republic...........................................................60
Silverio vs Republic.............................................................67
Anaban vs Anaban Alfiler....................................................73
Del Socorro vs Van Wilsem..................................................73
Van Dorn vs Romillo...........................................................78
Pilapil vs Ibay Somera.........................................................80
Recio vs Recio....................................................................84
Quita vs CA........................................................................89
Elmar Perez vs CA..............................................................91
San Luis vs San Luis...........................................................93
Lav Adia vs Heirs of Luna....................................................99
Noveras vs Noveras..........................................................107
Orion Savings Bank vs Suzuki............................................114
Simundac Keppel vs Keppel...............................................121
Suzuki vs OSG..................................................................127
Cayetano vs Leonidas.......................................................127
Ancheta vs Guersey-Dalaygon...........................................130
Far East Bank vs Pacilan....................................................137
Uypitching vs Quiamco......................................................142
Cebu Country Club vs Elizagaque.......................................144
Calatagan Golf Club vs Clemente.......................................148
Ardiente vs Javier.............................................................152
Sesbreno vs CA and VECO.................................................157
Saladaga vs Astorga..........................................................163
Coca Cola Bottlers vs SPS Bernardo...................................168

Page 1 of 304
St. Martin Polycliinic vs LWV Construction...........................174
Lomarda vs Fudalan..........................................................180
Banaria vs Banaria............................................................186
Buenaventura vs CA..........................................................189
Filinvest vs Ngilay.............................................................196
Gonzalo vs Tarnate...........................................................199
Bliss Development vs Diaz.................................................203
Yon Mitori vs Union Bank..................................................208
Castro vs People...............................................................216
Ledesma vs CA and Delmo................................................219
Campugan vs Tolentino.....................................................222
People vs Bayotas.............................................................226
Daluraya vs Oliva..............................................................231
People vs Dionaldo...........................................................234
Dy vs People....................................................................238
People vs Calomia.............................................................245
Kane vs. Roggenkamp.......................................................247
Tuanda vs Sandiganbayan.................................................257
Beltran vs People..............................................................260
Pasi vs Lichuaco...............................................................263
Yap vs Caballes................................................................271
Dreamwork vs Janiola.......................................................274
Pimentel vs Pimentel and People.......................................278
Consing JR vs People........................................................280
Caterpillar vs Samson........................................................285
Quimiguing vs Icao...........................................................288
Continental Steel vs Montano............................................289
Mayor vs Tiu.....................................................................295

CRUZ, J:

Tanada vs Tuvera
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,
INTEGRITY AND NATIONALISM, INC. (MABINI),
petitioners, vs. HON. JUAN C. TUVERA. in his capacity
as Executive Assistant to the President, HON. JOAQUIN
VENUS, in his capacity as Deputy Executive Assistant to
the President, MELQUIADES P. DE LA CRUZ, ETC., ET
AL., respondents.
Due process was invoked by the petitioners in demanding the
disclosure or a number of presidential decrees which they
claimed had not been published as required by law. The
government argued that while publication was necessary as a
rule, it was not so when it was "otherwise provided," as when
the decrees themselves declared that they were to become
effective immediately upon their approval. In the decision of
this case on April 24, 1985, the Court affirmed the necessity

Page 2 of 304
for the publication of some of these decrees, declaring in the file a Rejoinder in view of the supervening events, under Rule
dispositive portion as follows:  3, Section 18, of the Rules of Court. Responding, he submitted
that issuances intended only for the interval administration of a
  government agency or for particular persons did not have to
be published; that publication when necessary must be in full
"WHEREFORE, the Court hereby orders respondents to publish
and in the Official Gazette; and that, however, the decision
to the Official Gazette all unpublished presidential issuances
under reconsideration was not binding because it was not
which are of general application, and unless so published, they
supported by eight members of this Court. 5 
shall have no binding force and effect." 
 
 
The subject of contention is Article 2 of the Civil Code
The petitioners are now before us again, this time to move for
providing as follows: 
reconsideration/clarification of that decision. 1 Specifically, they
ask the following questions:   

 WHETHER OR NOT
1. What is meant by "law of public nature" or "general
applicability"?
2. Must a distinction be made between laws of general
applicability and laws which are not?
3. What is meant by "publication"?
 
4. Where is the publication to be made?
"ART. 2. Laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it
is otherwise provided. This Code shall take effect one year
after such publication."
 RULING
After a careful study of this provision and of the arguments of
the parties, both on the original petition and on the instant
motion, we have come to the conclusion, and so hold, that the
clause "unless it is otherwise provided" refers to the date of
effectivity and not to the requirement of publication itself,
which cannot in any event be omitted. This clause does not
mean that the legislature may make the law effective
immediately upon approval, or on any other date, without its
previous publication. 

   

5. When is the publication to be made?  

  Publication is indispensable in every case, but the legislature

may in its discretion provide that the usual fifteen-day period
Resolving their own doubts, the petitioners suggest that there
shall be shortened or extended. An example, as pointed out by
should be no distinction between laws of general applicability
the present Chief Justice in his separate concurrence in the
and those which are not; that publication means complete
original decision, 6 is the Civil Code which did not become
publication; and that the publication must be made forthwith in
effective after fifteen days from its publication in the Official
the Official Gazette. 2
Gazette but "one year after such publication." The general rule
did not apply because it was "otherwise provided." 
 
 
In the Comment 3 required of the then Solicitor General, he
claimed first that the motion was a request for an advisory
It is not correct to say that under the disputed clause
opinion and should therefore be dismissed, and, on the merits,
publication may be dispensed with altogether. The reason is
that the clause "unless it is otherwise provided" in Article 2 of
that such omission would offend due process insofar as it
the Civil Code meant that the publication required therein was
would deny the public knowledge of the laws that are
not always imperative; that publication, when necessary, did
supposed to govern it. Surely, if the legislature could validly
not have to be made in the Official Gazette; and that in any
provide that a law shall become effective immediately upon its
case the subject decision was concurred in only by three
approval notwithstanding the lack of publication (or after an
justices and consequently not binding. This elicited a
unreasonably short period after publication), it is not unlikely
Reply 4 refuting these arguments. Came next the February
that persons not aware of it would be prejudiced as a result;
Revolution and the Court required the new Solicitor General to
and they would be so not because of a failure to comply with it
Page 3 of 304
but simply because they did not know of its existence.
Significantly, this is not true only of penal laws as is commonly
supposed. One can think of many non-penal measures, like a
law on prescription, which must also be communicated to the
persons they may affect before they can begin to operate.  agency and not the public, need not be published. Neither is
 
We note at this point the conclusive presumption that every
person knows the law, which of course presupposes that the
law has been published if the presumption is to have any legal
justification at all. It is no less important to remember that
Section 6 of the Bill of Rights recognizes "the right of the
people to information on matters of public concern," and this
certainly applies to, among others, and indeed especially, the
legislative enactments of the government.  All presidential decrees must be published, including even, say,
 
The term "laws" should refer to all laws and not only to those
of general application, for strictly speaking all laws relate to the
people in general albeit there are some that do not apply to
them directly. An example is a law granting citizenship to a
particular individual, like a relative of President Marcos who
was decreed instant naturalization. It surely cannot be said
that such a law does not affect the public although it
unquestionably does not apply directly to all the people. The
subject of such law is a matter of public interest which any
member of the body politic may question in the political forums
or, if he is a proper party, even in the courts of justice. In fact,
a law without any bearing on the public would be invalid as an
intrusion of privacy or as class legislation or as an ultra vires
act of the legislature. To be valid, the law must invariably
affect the public interest even if it might be directly applicable
only to one individual, or some of the people only, and not to
the public as a whole. 
We hold therefore that all statutes, including those of local
application and private laws, shall be published as a condition
for their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the
legislature.  compliance. This was the manner, incidentally, in which the
 
 
Covered by this rule are presidential decrees and executive
orders promulgated by the President in the exercise of
legislative powers whenever the same are validly delegated by
the legislature or, at present, directly conferred by the
Constitution. Administrative rules and regulations must also be
published if their purpose is to enforce or implement existing
law pursuant also to a valid delegation.  justices were categorically for publication in the Official
 
Interpretative regulations and those merely internal in nature,
that is, regulating only the personnel of the administrative
publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the
performance of their duties. 
 
Accordingly, even the charter of a city must be published
notwithstanding that it applies to only a portion of the national
territory and directly affects only the inhabitants of that place.
those naming a public place after a favored individual or
exempting him from certain prohibitions or requirements. The
circulars issued by the Monetary Board must be published if
they are meant not merely to interpret but to "fill in the
details" of the Central Bank Act which that body is supposed to
enforce. 
 
However, no publication is required of the instructions issued
by, say, the Minister of Social Welfare on the case studies to
be made in petitions for adoption or the rules laid down by the
head of a government agency on the assignments or workload
of his personnel or the wearing of office uniforms.
Parenthetically, municipal ordinances are not covered by this
rule but by the Local Government Code. 
We agree that the publication must be in full or it is no
publication at all since its purpose is to inform the public of the
contents of the laws. As correctly pointed out by the
petitioners, the mere mention of the number of the presidential
decree, the title of such decree, its whereabouts (e.g., "with
Secretary Tuvera"), the supposed date of effectivity, and in a
mere supplement of the Official Gazette cannot satisfy the
publication requirement. This is not even substantial
General Appropriations Act for FY 1975, a presidential decree
undeniably of general applicability and interest, was
"published" by the Marcos administration. 7 The evident
purpose was to withhold rather than disclose information on
this vital law. 
 
 
Coming now to the original decision, it is true that only four
Gazette 8 and that six others felt that publication could be
Page 4 of 304
made elsewhere as long as the people were sufficiently
informed. 9 One reserved his vote 10 and another merely
acknowledged the need for due publication without indicating
where it should be made, 11 It is therefore necessary for the
present membership of this Court to arrive at a clear
consensus on this matter and to lay down a binding decision
supported by the necessary vote. 
There is much to be said of the view that the publication need
not be made in the Official Gazette, considering its erratic
releases and limited readership. Undoubtedly, newspapers of
general circulation could better perform the function of
communicating the laws to the people as such periodicals are
more easily available, have a wider readership, and come out
regularly. The trouble, though, is that this kind of publication is
not the one required or authorized by existing law. As far as
we know, no amendment has been made of Article 2 of the
Civil Code. The Solicitor General has not pointed to such a law,
and we have no information that it exists. If it does, it
obviously has not yet been published. 
 
At any rate, this Court is not called upon to rule upon the
wisdom of a law or to repeal or modify it if we find it
impractical. That is not our function. That function belongs to
the legislature. Our task is merely to interpret and apply the
law as conceived and approved by the political departments of
the government in accordance with the prescribed procedure.
Consequently, we have no choice but to pronounce that under
Article 2 of the Civil Code, the publication of laws must be
made in the Official Gazette, and not elsewhere, as a
requirement for their effectivity after fifteen days from such
publication or after a different period provided by the
legislature.  SO ORDERED.
We also hold that the publication must be made forthwith, or
at least as soon as possible, to give effect to the law pursuant
to the said Article 2. There is that possibility, of course,
although not suggested by the parties that a law could be
rendered unenforceable by a mere refusal of the executive, for
whatever reason, to cause its publication as required. This is a
matter, however, that we do not need to examine at this time. 
 
Finally, the claim of the former Solicitor General that the
instant motion is a request for an advisory opinion is
untenable, to say the least, and deserves no further comment.  Appeals in the Luis Bernal, Sr., et al. v. Felisa Perdosa De Roy,
 
The days of the secret laws and the unpublished decrees are
over. This is once again an open society, with all the acts of
the government subject to public scrutiny and available always
to public cognizance. This has to be so if our country is to
remain democratic, with sovereignty residing in the people and
all government authority emanating from them. 
Although they have delegated the power of legislation, they
retain the authority to review the work of their delegates and
to ratify or reject it according to their lights, through their
freedom of expression and their right of suffrage. This they
cannot do if the acts of the legislature are concealed. 
 
Laws must come out in the open in the clear light of the sun
instead of skulking in the shadows with their dark, deep
secrets. Mysterious pronouncements and rumored rules cannot
be recognized as binding unless their existence and contents
are confirmed by a valid publication intended to make full
disclosure and give proper notice to the people. The furtive law
is like a scabbarded saber that cannot feint, parry or cut unless
the naked blade is drawn. 
 
WHEREFORE, it is hereby declared that all laws as above
defined shall immediately upon their approval, or as soon
thereafter as possible, be published in full in the Official
Gazette, to become effective only after fifteen days from their
publication, or on another date specified by the legislature, in
accordance with Article 2 of the Civil Code. 
 
De Roy vs CA
FELISA P. DE ROY and VIRGILIO RAMOS, petitioners,
vs. COURT OF APPEALS and LUIS BERNAL, SR., GLENIA
BERNAL, LUIS BERNAL, JR., HEIRS OF MARISSA
BERNAL, namely, GLICERIA DELA CRUZ BERNAL and
LUIS BERNAL, SR., respondents.
CORTES, J.:
This special civil action for certiorari seeks to declare null and
void two (2) resolutions of the Special Division of the Court of
et al., CA-G.R. CV No. 07286. The first resolution promulgated
on 30 September 1987 denied petitioner's motion for extension
of time to file a motion for reconsideration and directed entry
of judgment since the decision in said case had become final;
Page 5 of 304
and the second Resolution dated 27 October 1987 denied
petitioners' motion for reconsideration for having been filed out
of time.
At the outset, this Court could have denied the petition
outright for not being verified as required by Rule 65 section 1
of the Rules of Court. However, even if the instant petition did
not suffer from this defect, this Court, on procedural and
substantive grounds, would still resolve to deny it.
The facts of the case are undisputed. The firewall of a burned-
out building owned by petitioners collapsed and destroyed the
tailoring shop occupied by the family of private respondents,
resulting in injuries to private respondents and the death of
Marissa Bernal, a daughter. Private respondents had been
warned by petitioners to vacate their shop in view of its
proximity to the weakened wall but the former failed to do so.
On the basis of the foregoing facts, the Regional Trial Court.
First Judicial Region, Branch XXXVIII, presided by the Hon.
Antonio M. Belen, rendered judgment finding petitioners guilty
of gross negligence and awarding damages to private
respondents. On appeal, the decision of the trial court was
affirmed in toto by the Court of Appeals in a decision
promulgated on August 17, 1987, a copy of which was
received by petitioners on August 25, 1987. On September 9,
1987, the last day of the fifteen-day period to file an appeal,
petitioners filed a motion for extension of time to file a motion
for reconsideration, which was eventually denied by the
appellate court in the Resolution of September 30, 1987.
Petitioners filed their motion for reconsideration on September
24, 1987 but this was denied in the Resolution of October 27,
1987.
This Court finds that the Court of Appeals did not commit a
grave abuse of discretion when it denied petitioners' motion for
extension of time to file a motion for reconsideration, directed
entry of judgment and denied their motion for reconsideration.
It correctly applied the rule laid down in Habaluyas Enterprises,
Inc. v. Japzon, [G.R. No. 70895, August 5, 1985, 138 SCRA
46], that the fifteen-day period for appealing or for filing a
motion for reconsideration cannot be extended. In its
Resolution denying the motion for reconsideration,
promulgated on May 30, 1986 (142 SCRA 208), this Court en
banc restated and clarified the rule, to wit:
Beginning one month after the promulgation of this Resolution,
the rule shall be strictly enforced that no motion for extension
of time to file a motion for reconsideration may be filed with
the Metropolitan or Municipal Trial Courts, the Regional Trial
Courts, and the Intermediate Appellate Court. Such a motion
may be filed only in cases pending with the Supreme Court as
the court of last resort, which may in its sound discretion either
grant or deny the extension requested. (at p. 212)
Lacsamana v. Second Special Cases Division of the
Intermediate Appellate Court, [G.R. No. 73146-53, August 26,
1986, 143 SCRA 643], reiterated the rule and went further to
restate and clarify the modes and periods of appeal.
Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept.
16, 1985, 144 SCRA 161], stressed the prospective application
of said rule, and explained the operation of the grace period,
to wit:
In other words, there is one-month grace period from the
promulgation on May 30, 1986 of the Court's Resolution in the
clarificatory Habaluyas case, or up to June 30, 1986, within
which the rule barring extensions of time to file motions for
new trial or reconsideration is, as yet, not strictly enforceable.
Since petitioners herein filed their motion for extension on
February 27, 1986, it is still within the grace period, which
expired on June 30, 1986, and may still be allowed.
This grace period was also applied in Mission v. Intermediate
Appellate Court [G.R. No. 73669, October 28, 1986, 145 SCRA
306].
In the instant case, however, petitioners' motion for extension
of time was filed on September 9, 1987, more than a year
after the expiration of the grace period on June 30, 1986.
Hence, it is no longer within the coverage of the grace period.
Considering the length of time from the expiration of the grace
period to the promulgation of the decision of the Court of
Appeals on August 25, 1987, petitioners cannot seek refuge in
the ignorance of their counsel regarding said rule for their
failure to file a motion for reconsideration within the
reglementary period.
Petitioners contend that the rule enunciated in the Habaluyas
case should not be made to apply to the case at bar owing to
the non-publication of the Habaluyas decision in the Official
Gazette as of the time the subject decision of the Court of
Appeals was promulgated. Contrary to petitioners' view, there
is no law requiring the publication of Supreme Court decisions
in the Official Gazette before they can be binding and as a
condition to their becoming effective. It is the bounden duty of
counsel as lawyer in active law practice to keep abreast of
decisions of the Supreme Court particularly where issues have
been clarified, consistently reiterated, and published in the
advance reports of Supreme Court decisions (G.R.s) and in
such publications as the Supreme Court Reports Annotated
(SCRA) and law journals.
This Court likewise finds that the Court of Appeals committed
no grave abuse of discretion in affirming the trial court's
decision holding petitioner liable under Article 2190 of the Civil
Code, which provides that "the proprietor of a building or
structure is responsible for the damage resulting from its total
or partial collapse, if it should be due to the lack of necessary
Page 6 of 304
repairs."
Nor was there error in rejecting petitioners argument that
private respondents had the "last clear chance" to avoid the
accident if only they heeded the warning to vacate the tailoring
shop and, therefore, petitioners prior negligence should be
disregarded, since the doctrine of "last clear chance," which
has been applied to vehicular accidents, is inapplicable to this
case.
WHEREFORE, in view of the foregoing, the Court Resolved to
DENY the instant petition for lack of merit.
Villafuerte vs Cordial
MIGUEL LUIS R. VILLAFUERTE, GOVERNOR OF THE
PROVINCE OF CAMARINES SUR, FORTUNATO PENA,
VICE-GOVERNOR OF THE PROVINCE OF CAMARINES
SUR, ATTY. AMADOR L. SIMANDO, WARREN SEÑAR,
GILMAR S. PACAMARRA, EMMANUEL H. NOBLE,
GIOVANNI SEÑAR, RUDITO ESPIRITU, JR., JORGE
BENGUA, FABIO FIGURACION, NELSON JULIA,
MEMBERS OF THE SANGGUANING PANLALAWIGAN OF
CAMARINES SUR, PETITIONERS, V. CONSTANTINO H.
CORDIAL, JR., MAYOR OF CARAMOAN, CAMARINES
SUR AND IRENE R. BREIS, VICE-MAYOR OF
CARAMOAN, CAMARINES SUR, RESPONDENTS.
REYES, J. JR., J.:
Before the Court is a Petition for Review
on certiorari,1 assailing the Decision2 dated January 13, 2015
and the Order3 dated December 15, 2015 of the Regional Trial
Court (RTC) of San Jose, Camarines Sur, Branch 30 which
annulled the Orders dated October 28,  20144 and December
12, 2014,5 and the Resolution6 dated December 16, 2014 of
the Sangguaning Panlalawigan of Camarines Sur which denied
the Motion to Dismiss filed by Mayor Constantino H. Cordial, Jr.
and Vice-Mayor Irene R. Breis (respondents) on the ground of
lack of jurisdiction.
The Relevant Antecedents
On July 18, 2014, respondents, as incumbent officials of
Caramoan, Camarines Sur, were administratively charged with
Grave Misconduct, Dishonesty, and Conduct Prejudicial to the
Best Interest of Service docketed as Administrative Case No.
003-2014 by Chief of Task Force Sagip Kalikasan Fermin M.
Mabulo (Mabulo), Municipal Councilors Eduardo B. Bonita and
Lydia Obias, and former Municipal Councilor Romeo Marto. The
complaint was lodged before the Sangguaning Panlalawigan of
Camarines Sur, through its Special Committee on
Administrative Cases (Special Committee) headed by Atty.
Amador Simando.7
In said Complaint,8 it was alleged that the respondents,
through the Sangguniang Bayan of Caramoan, Camarines Sur,
passed Resolution No. 48 which requested for the removal of
Task Force Sagip Kalikasan in the entire Municipality of
Caramoan, Camarines Sur without the conduct of deliberation.
Prior to said incident, the Task Force Sagip
Kalikasan conducted an inspection in Barangay Gata,
Caramoan, Camarines Sur because of reported mining
activities. Upon inspection, the team found 30 people engaged
in illegal mining activities, holes where minerals were being
extracted, and machinery and equipment for mining and
extraction. The Chief of the Task Force, Mabulo, asked those
involved if they had the necessary permits; and as they failed
to show him any, he asked them to cease from operating.
However, days after the inspection, the aforementioned
Resolution was passed by the Sangguniang Bayan of
Caramoan, Camarines Sur.9
In response to the Complaint, respondents filed a Motion for
Extension to File Answer.10 However, instead of filing their
Answer, respondents filed a Motion to Dismiss, 11 assailing the
jurisdiction of the Special Committee, as well as its Rules of
Procedure on the Investigation of Administrative and
Disciplinary Cases against Elected Municipal Officials as
embodied in Resolution No. 13, Series of 2013 (Resolution No.
13-2013) for lack of publication.
In an Order12 dated October 28, 2014, the Sangguaning
Panlalawigan dismissed the motion for lack of merit.
The Sangguaning Panlalawigan maintained that the publication
was duly complied with as Resolution No. 151, Series of 2013,
which incorporated Resolution No. 13-2013, was duly
published.
Respondents filed a Motion for Reconsideration (MR) asserting
that with the publication of the Rules of Procedure only on
October 9, 16 and 23, 2014, it became effective only on
November 8, 2014, the 16th day following its publication as
held in the case of Tañada v. Tuvera,13 interpreting the Article
2 of the Civil Code of the Philippines.14
Said MR was denied in an Order15 dated December 12, 2014.
The Sangguaning Panlalawigan of Camarines Sur maintained
that the publication requirement anent ordinances and
resolutions of local government units was governed by the
Local Government Code, and not by the Civil Code as
pronounced in Tañada.
Corollary, the Sangguaning Panlalawigan of Camarines Sur
issued a Resolution16 dated December 16, 2014,
recommending that respondents be placed under preventive
suspension for a period of 60 days.
Page 7 of 304
Aggrieved by the turn of events, respondents filed a petition
for certiorari and prohibition with prayer for the issuance of
Temporary Restraining Order, Preliminary Injunction, and
Prohibitory Injunction before the RTC.
In their Petition,17 respondents insisted, among others, that the
Rules of Procedure as embodied in Resolution No. 13-2013
must be published; and failure to observe such requirement
not only rendered said Resolution ineffective, but likewise
removed the jurisdiction of the Sangguaning Panlalawigan of
Camarines Sur over the proceedings.
In a Decision18 dated January 13, 2015, the RTC construed that
the lack of publication of the Rules of Procedure embodied in
Resolution No. 13-2013 stripped off the Sangguaning
Panlalawigan of Camarines Sur of jurisdiction over the conduct
of the administrative hearing against respondents.
The Issue
Essentially, the issue in this case is whether or not the non-
publication of Resolution No. 13-2013 divested
the Sangguaning Panlalawigan of Camarines Sur of jurisdiction
over the proceedings of the case.
The Court's Ruling
Notably, petitioners resorted to the Court via a Petition for
Review on certiorari in assailing the ruling of the RTC.
In the issuances of the extraordinary writs of certiorari,
prohibition, mandamus, quo warranto,  and habeas corpus, the
Court, the CA, and the RTC share original and concurrent
jurisdiction. However, in accordance with the doctrine of
hierarchy of courts, the parties are mandated to initially file
their petitions before lower rank courts. As imprinted in the
case of Gios-Samar, Inc. v. Department of Transportation and
Communications,19 the Court expounded on this constitutional
imperative by emphasizing the structure of our judicial system
— the trial courts decide on questions of fact and law in the
first instance; the intermediate courts resolve both questions of
fact and law; and the Court generally decides only questions of
law.
As a constitutional mechanism, the doctrine of hierarchy of
courts is established to enable the Court to concentrate on its
constitutional tasks, guided by the judicial compass in
disposing of matters without need for factual determination.
In a rare instance, the Constitution itself mandates the
exercise of judicial power over a case even with the existence
of factual issues. Such sole exception is stated in Section 18,
Article VII of the Constitution, that is, when the matter
involved is the review of sufficiency of factual basis of the
President's proclamation of martial law and the suspension of
the privilege of the writ of habeas corpus.
Although several exceptions were carved out from the general
rule of the observance of hierarchy of courts, the nature of the
question raised by the parties shall be one of law. In other
words, resort to the Court is permitted only when the issues
are purely legal.
Likewise relevant is Section 4, Rule 41 of the Rules of Court,
which allows direct resort to the Court from the RTC via a
petition for review on certiorari under Rule 45 of said Rules
when the issues raised are questions of law.
In this case, petitioners assail the ruling of the RTC in
maintaining that Resolution No. 13-2013 requires publication;
and that the absence of such publication stripped off
the Sangguaning Panlalawigan of jurisdiction over the case.
Clearly, the determination of the publication requirement is a
question of law.
On this note, the Court likewise deems it proper to discuss the
rule on the exhaustion of administrative remedies.
It is notable that respondents sought relief from the RTC to
nullify the action of the Sangguaning Panlalawigan of
Camarines Sur. Instead of filing an appeal before the Office of
the President,20 which is the available remedy to respondents
under Republic Act No. 7160 or the Local Government Code of
1991 (LGC), they filed a petition for certiorari and prohibition.
As raised by the petitioners in their Memoranda/Comments
before the RTC,21 respondents failed to exhaust administrative
remedies.
The thrust of the rule on exhaustion of administrative remedies
is that the courts must allow administrative agencies to carry
out their functions and discharge their responsibilities within
the specialized areas of their respective
competence.22 Generally, relief to the courts of justice is not
sanctioned when the law provides for remedies against the
action of an administrative board, body, or officer. 23 The
availability of such remedy prevents the petitioners from
resorting to a petition for certiorari and prohibition, being
extraordinary remedies.
However, exceptions to this rule allow the deviation from such
procedural rule. Among which is when the question raised is
purely legal in nature, as in this case.
The Court now resolves.
Ignorantia juris non excusat. That every person is presumed to
know the law is a conclusive presumption. However, before
Page 8 of 304
one may be bound by a law, he must be fully and categorically province, posting of such ordinances shall be made in all
informed of its contents.24 For this purpose, the Civil Code municipalities and cities of the province where the Sanggunian
clearly mandates the publication of "laws": of origin is situated.

ART. 2. Laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it
is otherwise provided. This Code shall take effect one year
after such publication.
(d) In the case of highly urbanized cities, the main features of
the ordinance or resolution duly enacted or adopted shall, in
addition to being posted, be published once in a local
newspaper of general circulation within the city: Provided, That
in the absence thereof the ordinance or resolution shall be
published in any newspaper of general circulation.

This is fundamentally the essence of due process.

xxxx

The significance of publication is illuminated in the 1985

SEC. 188. Publication of Tax ordinances and Revenue
landmark case of Tañada v. Tuvera.25 The Court, speaking
Measures. – Within ten (10) days after their approval,
through Justice Escolin, emphasized that laws of "public
certified true copies of all provincial, city, and municipal tax
nature" or of "general applicability" must be published. In the
ordinances or revenue shall be published in full for three (3)
1986 Tañada26 case, the Court resolved petitioners' MR,
consecutive days in a newspaper of local circulation: Provided,
seeking clarification as to the scope of "law of public nature" or
however, That in provinces, cities and municipalities where
"general applicability," among others. The Court, thus,
there are no newspapers of local circulation, the same may be
definitively expounded that "laws" should refer to all laws.
posted in at least two (2) conspicuous and publicly accessible
After all, a law which has no impact on the public is considered
places.
invalid for several reasons, e.g., intrusion of privacy or ultra
vires act of the legislature.27 Thus, an indirect effect of a
xxxx
particular law to the public does not necessarily call for the
dispensability of the publication requirement.
SEC. 511. Posting and Publication of Ordinances with
Penal Sanctions. – (a) ordinances with penal sanctions shall
Therefore, the Court was forthright in stating that "all statutes,
be posted at prominent places in the provincial capitol, city,
including those of local application and private laws, shall be
municipal or Barangay hall, as the case may be, for a minimum
published as a condition for their effectivity."28
period of three (3) consecutive weeks. Such ordinances shall
also be published in a newspaper of general circulation, where
However, the Court clarified that "interpretative regulations
available, within the territorial jurisdiction of the local
and those merely internal in nature, that is, regulating only the
government unit concerned, except in the case of Barangay
personnel of the administrative agency and not the public" and
ordinances. Unless otherwise provided therein, said ordinances
"letters of instruction issued by administrative superiors
shall take effect on the day following its publication, or at the
relative to guidelines to be followed by their subordinates in
end of the period of posting, whichever occurs later.
the performance of their duties" need not be published.
Interpretative regulations are merely annotative; and internal
(b) Any public officer or employee who violates an ordinance
rules are directly related to the conduct of government
may be meted administrative disciplinary action, without
personnel, and not the public in general.
prejudice to the filing of the appropriate civil or criminal action.

On a different plane, however, are municipal ordinances which

(c) The secretary to the Sanggunian concerned shall transmit
are not covered by the Civil Code, but by the LGC.
official copies of such ordinances to the chief executive officer
of the Official Gazette within seven (7) days following the
On this note, the nature of municipal ordinances or resolutions
approval of the said ordinance for publication purposes. The
which require publication is embodied in Sections 59, 188, and
Official Gazette may publish ordinances with penal sanctions
511 of the LGC:
for archival and reference purposes.
SEC. 59. Effectivity of Ordinances or Resolutions.

xxxx
In the instant case, what was being assailed is Resolution No.
13-2013, which provides for the rules of procedure concerning
(c) The gist of all ordinances with penal sanctions shall be
the conduct of investigation against municipal officials in said
published in a newspaper of general circulation within the
province, issued by the Sangguniang Panlalawigan of
province where the local legislative body concerned belongs. In
Camarines Sur. Clearly, it is neither penal in nature as it does
the absence of any newspaper of general circulation within the
not provide for any sanction or punishment nor a tax measure.
Page 9 of 304
It is merely interpretative of Title II, Chapter 4 of the LGC,
which outlines the procedure when a disciplinary action is
instituted against an elective local official. Based on the
foregoing, Resolution No. 13-2013 need not be published.
Also, it bears stressing that the RTC erroneously concluded
that the element of publication is an essential element of
the Sangguniang Panlalawigan of Camarines Sur's jurisdiction
over the proceedings of the case.
The publication requirement on laws accomplishes the
constitutional mandate of due process. In the 1985 and
1986 Tañada cases, the Court explained that the object of
Article 2 of the Civil Code is to give notice to the public of the
laws to allow them to properly conduct themselves as citizens.
That omission of publication of laws is tantamount to denying
the public of knowledge and information of the laws that
govern it; hence, a violation of due process. Effectivity of laws,
thus, depends on their publication. Without such notice and
publication, the conclusive presumption cannot apply.
Jurisdiction over the subject matter, on the other hand, is
conferred by law and is determined by the allegations in the
complaint.29
Sections 61 and 6230 of the LGC, as well as Sections 125 and
12631 of its Implementing Rules and Regulations or
Administrative Order No. 270, provide that the Sangguaning
Panlalawigan of Camarines Sur has jurisdiction over complaints
filed against any erring municipal official within its jurisdiction.
Upon the filing of said complaint, the Sangguaning
Panlalawigan shall require the filing of the respondent's verified
answer. Investigation shall ensue accordingly.
In this case, the allegations in the Complaint32 filed by
Mabulo, et al. against the respondents, as local municipal
officials of Caramoan, Camarines Sur, vested the Sangguaning
Panlalawigan of Camarines Sur of jurisdiction over the case.
As it is, the RTC failed to discern the import of the publication
requirement. Publication or lack of it is relevant in determining
the observance of due process.
WHEREFORE, premises considered, the instant petition is
hereby GRANTED. Accordingly, the Decision dated January
13, 2015 and the Order dated December 15, 2015 of the
Regional Trial Court of San Jose, Camarines Sur, Branch 30
are REVERSED and SET ASIDE.
The Orders dated October 28, 2014 and December 12, 2014,
and the Resolution dated December 16, 2014 issued by
the Sangguaning Panlalawigan of Camarines Sur are
hereby REINSTATED.
SO ORDERED.
Caranto vs Caranto
Rodolfo Caranto vs. Anita Agra Caranto
HERNANDO, J.:
 
Before this Court is a Petition for Review
on Certiorari1  assailing the April 18, 2012 Decision2 of the
Court of Appeals (CA) in CA-G.R. CV No. 90285 and its July 31,
2012 Resolution3 which partly affirmed the October 22, 2007 
Decision4  of the  Regional  Trial  Court (RTC),  Branch 212  of
Mandaluyong City in Civil Case No. MC01-1454, and denied
petitioner Rodolfo Caranto's (Rodolfo) Motion for
Reconsideration,5 respectively.
 
The Factual Antecedents
 
Respondent Anita Agra Caranto (Anita) is the registered owner
of a 347-square-meter parcel of land situated in  Barangay 
Hagdang  Bato, Mandaluyong City which is covered by Transfer
Certificate of Title (TCT) No. 7884.6 Sometime in 2001, Rodolfo
filed a Complaint7 for cancellation of title and reconveyance
against Anita seeking to (a) cancel the title of the subject land;
(b) reconvey one-half of the same to him; and (c) pay the sum
equal to 25% of the value of the recoverable property as
attorney's fees as well as costs of suit.
Rodolfo alleged that he is the son of Juan C. Caranto, Sr. and
Guillerma Lopez-Caranto. He has a sister named Rizalina
Caranto (Rizalina), and a brother named Juan Caranto (Juan)
who was Anita's husband.
 
On May 12, 1972, Juan executed a Special Power of
Attorneys8 in favor of Rizalina authorizing her to execute a
deed of extrajudicial settlement involving the subject property
that was previously covered by TCT No. 277297. A few months
later or on September 18, 1972, the siblings executed an
Extrajudicial Settlement of the Estate of the Deceased
Guillerma O. Lopez-
Caranto9 which stated, among others, the following:
8. That the parties herein have therefor agreed, as they do
hereby agree, to divide and settle the aforementioned estate
between and among them in the following manner, to wit:
Page 10 of 304
(a) Property to be adjudicated to Juan L.
Caranto: The parcel of land specified and described in
paragraph 5(a) hereinabove (TCT No. 277297- Rizal);
[subject property]
 
(b) Property to be adjudicated to Rizalina Caranto
Balaoeg: The parcel of land specified and described in
paragraph 5(b) hereinabove (TCT No. 23542 — Rizal);
 
(c) Property to be adjudicated to Rodolfo L. Caranto: The
parcel of land specified and described in paragraph 5(c) and
the three (3) door residential apartment described in
paragraph 5 (d) hereinabove. (TCT No. 59009 — Rizal)
(d) Properties to be adjudicated to Juan L. Caranto,
Rizalina Caranto Balaoeg and Rodolfo L. Caranto,  in equal one-
third undivided interest each:
 
The parcels of land specified and described in paragraph 5(e) -
TCT 23453 (Rizal); 5(f)-OCT 0-304 (La Union) and 5(g)-Tax
Dec. No. 27418 (La Union).10
Juan died intestate on May 22, 1983. Afterwards, on August
14, 1993, Anita executed an Affidavit of Self-
Adjudication11 adjudicating upon herself the subject property.
As a result, TCT No. 277297 (later referred to as TCT No.
391576)12 was cancelled and TCT No. 7884 was issued in the
name of Anita.
When Rodolfo learned about Anita's Affidavit of Self-
Adjudication, he filed a Notice of Adverse Claim to protect his
share in the subject property. He also filed a criminal complaint
for falsification of public documents against Anita before the
Office of the City Prosecutor of Mandaluyong City. In his
September 3, 1998 Resolution,13 the city prosecutor
recommended the filing of an Information for falsification
against Anita.
Rodolfo alleged that the Affidavit of Self-Adjudication was a
total falsity because at the time of his demise, Juan was
survived not only by his wife Anita, but also by him and their
sister Rizalina, as collateral relatives. Considering that Rizalina
executed a Deed of Waiver of Rights' on January 16, 1990
whereby she relinquished all her rights and participation over
the subject property in his favor, Rodolfo alleged that he is
now entitled to one-half thereof.
 
For her part, Anita sought the dismissal of the complaint for
lack of cause of action and that Rodolfo is barred by laches or
prescription. Further, Anita claimed that the subject property is
her exclusive property since she purchased the same with her
own money. She denied that Rodolfo is a legitimate brother of
her husband, Juan. Anita further denied committing any
falsehood or misrepresentation in the execution of the Affidavit
of Self-Adjudication. Lastly, she belied Rodolfo's allegation that
he exerted earnest efforts to settle the dispute between them
prior to the filing of the complaint considering that she was
already residing in the United States.
Anita, in turn, filed a compulsory claim for damages against
Rodolfo for filing a baseless and malicious suit against her.
 
During the trial, Dante Agra, the brother of Anita and her
attorney-in-fact,15 testified that Juan disclosed to him that
Rodolfo was his illegitimate brother and that he also has an
illegitimate sister. Further, Dante narrated that Juan informed
him that he was the only son of Dolores Lopez who was the
latter's mother as stated in the Marriage Certificate of Juan and
Anita. Anita presented a Certification17 from the National
Archives that it has no file of the Makati City Register of Births
for the year 1935; hence, there was no available record about
the birth of Juan on April 4, 1935 to Juan Caranto, Sr., as his
father, and Dolores Lopez, as his mother. On the other hand,
the Office of the Local Civil Registrar of Bacnotan, La Union,'
stated that Rodolfo was born on May 21, 1945, to Juan
Caranto as his father and Guillerma Lopez, as his mother.
Ruling of the Regional Trial Court
In its October 22, 2007 Decision,19 the RTC ruled that the
Extrajudicial Settlement of the Estate of the Deceased
Guillerma Lopez-Caranto does not suffice to support Rodolfo's
claim that he is the brother of Juan. Moreover, the Deed of
Waiver of Rights executed by Rizalina in his favor, and the
Special Power of Attorney executed by Juan designating
Rizalina as his attorney-in-fact, were inadmissible for being
mere photocopies of the originals. Besides, even if admitted,
these also did not serve as proofs of Rodolfo's filiation with
Juan.
Page 11 of 304
The trial court further observed that Rodolfo did not present
the birth certificate of Juan showing that his mother was also
Guillerma Lopez-Caranto. It could have disproved Dante's
testimony that Juan's mother was Dolores Lopez with said
evidence.
Anent the compulsory claim of Anita, the trial court awarded
exemplary damages in her favor for failure of Rodolfo to prove
his cause of action. Anita was also adjudged entitled to
attorney's fees, litigation expenses and costs of suit.
The fallo  of the Decision reads in this wise:
WHEREFORE, premises considered, the court hereby renders
judgment in favor of defendant Anita Agra Caranto and against
plaintiff Rodolfo Caranto, ordering said plaintiff—
 
1) to pay the amount of Php20,000.00 as exemplary damages;
 
2) to pay the amount of Php20,000.00 as attorney's fees;
3) to pay the amount of Php10,000.00 as litigation expenses
and cost of suit.
 
SO ORDERED.20
 
Undeterred, Rodolfo appealed to the CA21 averring that the trial
court erred: (a) in not declaring Anita in estoppel in impugning
his relationship with her husband; (b) in ruling that he failed to
sufficiently prove that he is the brother of Juan; (c) in not
giving credence to the Extrajudicial Settlement of Estate of the
Late Guillerma O. Lopez-Caranto even in the absence of Juan's
signature; (d) in not ordering the reversion of the property to
him considering that the property was originally owned by his
mother, Guillerma Lopez-Caranto; and (e) in awarding
exemplary damages and attorney's fees to Anita despite lack of
bases thereof.22
Ruling of the Court of Appeals
In its April 18, 2012 Decision,23 the CA partly granted Rodolfo's
appeal. It agreed with the trial court's findings that Rodolfo
failed to prove that he is the brother of Anita's husband, Juan,
so as to have the right to inherit a portion of the subject
property. Likewise, there was insufficient evidence to prove his
title over the same to warrant an action for reconveyance as
well as the cancellation of the title of the subject property.
Nonetheless, the appellate court held that the award of
exemplary damages was improper for lack of basis. Further,
there was no factual finding as to whether Rodolfo acted in a
wanton, oppressive or malevolent manner in filing the
complaint against Anita.
The dispositive portion of the appellate court's Decision reads:
 
WHEREFORE, premises considered, this Court
partially AFFIRMS in part the October 22, 2007 Decision of
the Regional Trial Court, Branch 212 of Mandaluyong City. This
Court partially DISMISSES the instant appeal without
prejudice to the filing before the appropriate court of an
intestate proceeding for the purpose of determining the heirs
who may be entitled to inherit to the estate, including the
property covered by Transfer Certificate of Title No. 7884,
previously under Transfer Certificate of Title No. 391576, of
deceased Juan L. Caranto. Additionally, the award of
exemplary damages is DELETED but the awards of
P20,000.00 as attorney's fees and P10,000.00 litigation
expenses and cost of suit are AFFIRMED.
 
SO ORDERED. 24
 
Aggrieved, Rodolfo filed a Motion for Reconsideration,' but the
appellate court denied the same in its July 31, 2012
Resolution26 for lack of merit.
Hence, the instant Petition for Review on Certiorari.27
The Issues
The core issues for resolution are:
(1) whether Anita is estopped from impugning the relationship
between her late husband, Juan, and Rodolfo;
Page 12 of 304
 
(2) whether the evidence of Rodolfo, particularly the
Extrajudicial Settlement of the Estate of the Late Guillermo O.
Lopez-Caranto, sufficed to prove that he is entitled to one-half
of the subject property of Juan by way of inheritance and by
virtue of the waiver of rights executed by Rizalina in his favor;
and
 
(3) assuming that Juan's mother was named Dolores Lopez,
whether Rodolfo is entitled to the whole subject property by
reason that it was previously owned by his mother Guillermo.
 
The Court's Ruling
The Petition must be denied. The allegations of Rodolfo are a
mere rehash of his arguments before the CA and essentially
raise questions of fact as to be beyond the ambit of a petition
for review on certiorari  under Rule 45 of the Rules of Court.
 
Rule 45 of the Rules of Court lays down the rule that only
questions of law should be raised in petitions filed under the
said rule since factual questions are not the proper subject of
an appeal by certiorari.  The Court will thus not entertain
questions of fact as the factual findings of the appellate court
are considered final, binding, or conclusive on the parties and
upon this Court especially when supported by substantial
evidence.28
 
In Century Iron Works, Inc. v. Bañas, 29  the Court differentiated
a question of law from a question of fact in this manner:
A question of law arises when there is doubt as to what the
law is on a certain state of facts, while there is a question of
fact when the doubt arises as to the truth or falsity of the
alleged facts. For a question to be one of law, the question
must not involve an examination of the probative value of the
evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is clear
that the issue invites a review of the evidence presented, the
question posed is one of fact.
Thus, the test of whether a question is one of law or of fact is
not the appellation given to such question by the party raising
the same; rather, it is whether the appellate court can
determine the issue raised without reviewing or evaluating the
evidence, in which case, it is a question of law; otherwise it is
a question of fact. (Citations omitted)
 
However, there are 10 recognized exceptional circumstances
wherein the Court admits and reviews questions of fact. These
are enumerated in Medina v. Mayor Asistio, Jr.30  as follows:
 
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures; (2) When the inference
made is manifestly mistaken, absurd or impossible; (3) Where
there is a grave abuse of discretion; (4) When the judgment is
based on a misapprehension of facts; (5) When the findings of
fact are conflicting; (6) When the Court of Appeals, in making
its findings, went beyond the issues of the case and the same
is contrary to the admissions of both appellant and appellee;
(7) The findings of the Court of Appeals are contrary to those
of the trial court; (8) When the findings of fact are conclusions
without citation of specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondents; and (10) The finding of fact of the Court of
Appeals is premised on the supposed absence of evidence and
is contradicted by the evidence on record. (Citations omitted)
 
The allegations asseverated by Rodolfo such as: (a) that Anita
is estopped from impugning that he and Juan are siblings; and
(b) he is entitled to one-half or the whole of the subject
property, hinge on his claim that he has sufficiently proven by
preponderance of evidence his cause of action in the complaint
for annulment of title and reconveyance of the subject
property that he filed against Anita.
In civil cases, the burden of proof rests upon the plaintiff, who
is required to establish his/her case by a preponderance of
evidence.31 Preponderance of evidence is defined as the
weight, credit, and value of the aggregate evidence on either
side and is usually considered to be synonymous with the term
"greater weight of the evidence" or "greater weight of the
credible evidence."32 It is a phrase that, in the last analysis,
means probability of the truth. It is evidence that is more
convincing to the court as it is worthier of belief than that
which is offered in opposition thereto. 33
Page 13 of 304
Preponderance of evidence refers to the probability to truth of
the matters intended to be proven as facts. As such, it
concerns a determination of the truth or falsity of the alleged
facts based on the evidence presented by a party, who in this
case is Rodolfo.34
Unfortunately, he failed to demonstrate any compelling reason
that would warrant the reversal of the findings and conclusions
of the appellate court that Rodolfo failed to sufficiently prove
that he is the brother of Juan and therefore he had no share in
the latter's estate.

   

Rodolfo's arguments are essentially questions of fact. Rodolfo
argues that he is the brother of Juan although his birth
certificate stated that his mother was Guillerma Lopez-Caranto
while the marriage contract between Juan and Anita indicated
that Juan's mother was Dolores Lopez, and both documents
stated that Juan Caranto, Sr. was their father. Rodolfo stresses
that, assuming that he and Juan have different mothers, he is
therefore entitled to the ownership of the entire property being
the legitimate heir of Guillerma Lopez-Caranto and because of
Rizalina's relinquishment of her rights over the same in his
favor.
It is thus clear that if the Court has to entertain the above-
mentioned contentions assailing the findings of the appellate
court, it has to review the probative value and evaluate once
again the evidence presented by the contending parties. This is
evidently beyond the purview of a petition for review under
Rule 45.
 
Indubitably, the Court will not review the factual findings of
the appellate court as there is not even a scintilla of evidence
that the instant petition falls under any of the exceptions laid
down in Medina.  To stress, the burden of proof lies upon
Rodolfo who failed to convince the Court that a review of the
factual findings is necessary.35 His mere assertion and claim
that the case falls under the exceptions is not enough.
 
At this juncture, we quote with approval the findings of the
Court of Appeals:
Thus, it is incumbent upon Rodolfo to prove that he is the
brother of the decedent. Unfortunately, Rodolfo failed to
overcome this burden. The record is bereft of any evidence
submitted by Rodolfo to prove his relationship with the
decedent. Indeed, Rodolfo could have submitted documents,
such as birth certificates, duly showing that he and Juan have
the same mother, father or both.

In his vain attempt to prove that his petition should be given  

due course despite raising factual issues, Rodolfo interposes
From the foregoing discussions, it is without a doubt that
that the following six exceptions wherein the Court may review
Rodolfo failed to prove his title to the 347-square meter lot
factual issues exist: (a) the findings of the appellate court are
covered by TCT No. 7884, previously under TCT No. 391576,
grounded entirely on speculation, surmises and conjectures;
in order to successfully maintain an action for reconveyance. In
(b)  its inference from the findings of fact is manifestly
addition thereto, he failed to prove by preponderance of
mistaken/absurd; (c) it went beyond the issues of the case and
evidence that he is the brother of deceased Juan. In the
the same are contrary to the admissions of both parties; (d) its
absence of evidence to support his cause, the right to
judgment is premised on misapprehension of facts; (e) it failed
inheritance sought by Rodolfo is untenable for lack of ground
to notice certain relevant facts which, if properly considered,
or basis therefor. 36
will justify a different conclusion; and (f) its findings of fact are
based on the absence of evidence but contradicted by the
 
evidence on record.
All told, considering that the issues were factual in nature as it
 
involved the determination of whether Rodolfo sufficiently
proved his claim by preponderance of evidence, the Court sees
None of these exceptions is present in the case.
no reason to warrant the exercise of its judicial discretion to
  review the same. Hence, there is no need to discuss the other
issues raised by Rodolfo.
A close perusal of Rodolfo's arguments in the petition shows
that these are simply a mere rehash of his claims in his appeal  
before the appellate court which it already thoroughly passed
WHEREFORE, the Petition for Review on Certiorari
upon. Coming before this Court, Rodolfo alleges that the
is  DENIED. The April 18, 2012 Decision of the Court of
appellate court gravely erred in its findings resulting in the
Appeals in CA-G.R. CV No. 92085 is AFFIRMED.
presence of the exceptional circumstances aforementioned.

Page 14 of 304
 
SO ORDERED.
Carlos vs Sandoval
JUAN DE DIOS CARLOS, Petitioner, versus FELICIDAD
SANDOVAL, also known as FELICIDAD S. VDA. DE
CARLOS or FELICIDAD S. CARLOS or FELICIDAD
SANDOVAL DE CARLOS, and TEOFILO CARLOS II,
Respondents
TINGA, J.:
These consolidated petitions emanated from a civil case filed
by Juan de Dios Carlos ("Carlos") against  respondents
Felicidad Sandoval ("Sandoval") and Teofilo Carlos II (Teofilo
II) docketed with the Regional Trial Court (RTC) of Muntinlupa
City as Civil Case No. 95-135.
In his Complaint before the RTC, Carlos asserted that he was
the sole surviving compulsory heir of his parents, Felix B.
Carlos and Felipa Elemia,[1] who had acquired during their
marriage, six parcels of land (subject properties). His brother,
Teofilo ("Teofilo"), died intestate in 1992. At the time of his
death, Teofilo was apparently married to Sandoval, and
cohabiting with her and their child, respondent Teofilo II.
Nonetheless, Carlos alleged in his Complaintthat Teofilo and
Sandoval were not validly married as they had not obtained
any marriage license.[2] Furthermore, Carlos also asserted that  averments in order to support his prayer.[8] Carlos elevated the
Teofilo II could not be considered as Teofilo's child. As a result,
Carlos concluded that he was also the sole heir of his brother
Teofilo, since the latter had died without leaving any heirs.
Carlos also claimed that Teofilo, prior to their father Felix's  Appeals'Decision ordering the dissolution of the Writ of
death in 1963, developed a scheme to save the elder Carlos's
estate from inheritance taxes. Under the scheme, the
properties of the father would be transferred to Teofilo who
would, in turn, see to it that the shares of the legal heirs are
protected and delivered to them. Felix assented to the plan,
and the subject properties were transferred in the name of
Teofilo. After Teofilo's death, Carlos entered into certain
agreements with Sandoval in connection with the subject
properties. Carlos did so, believing that the latter was the
lawful wife of his brother Teofilo. Subsequently though, Carlos
discovered that Sandoval and his brother were never validly
married, as their marriage was contracted without a marriage
license.[3]
Carlos now sought to nullify these agreements with Sandoval
for want of consideration, the premise for these contracts
being non-existent. Thus, Carlos prayed of the RTC to declare
the alleged marriage between Teofilo and Sandoval void ab
initio, provided that Teofilo died without issue, order that new
titles covering the subject properties be issued in the name of
Carlos, and require Sandoval to restitute Carlos in the amount
of P18,924,800.00.[4]
Carlos likewise prayed for the issuance of the provisional relief
of preliminary attachment. The RTC issued an Orderdated 7
September 1995 granting the prayer for preliminary
attachment, and on 15 September 1995, a writ of preliminary
attachment. Carlos posted a bond  for  P20,000,000.00  issued 
by   herein   petitioner SIDDCOR Insurance Corporation
(SIDDCOR).[5] Shortly thereafter, a Notice of Garnishment was
served upon the Philippine National Bank (PNB) over the
deposit accounts maintained by respondents.
Respondents filed an Urgent Motion to Discharge the Writ of
Attachment, which was opposed by Carlos. On 4 December
1995, the RTC rendered an order denying the  motion. This
caused respondents to file a Petition for Certiorari with the
Court of Appeals, seeking to set aside the RTC order granting
the writ of preliminary attachment denying the motion for the
discharge of the writ. This case was docketed as CA-G.R. SP
No. 39267.[6] 
On 27 February 1996, the Court of Appeals Second Division
promulgated its Decision in CA-G.R. SP No. 39267, wherein it
granted the Petition for Certiorari and ordered the discharge
and dissolution of the Writ of Attachment and Notice of
Garnishment.[7] The Court of Appeals found that there was no
sufficient cause of action to warrant the preliminary
attachment, since Carlos had merely alleged general
said Decision to this Court by way of Petition for Review on
Certiorari, which was docketed as G.R. No. L-125717. In
a Resolution dated 21 October 1996, the Court denied
Carlos's Petition, and thus the Court of
Attachment and Notice of Garnishment became final.
In the meantime, the hearing on Carlos's Complaint ensued
before the RTC. Respondents duly filed their Answer and
thereafter filed a Motion for Summary Judgment. Carlos
opposed the motion and countered with his own Motion for
Summary Judgment.   On 8 April 1996, the RTC rendered a
summary judgment in favor of Carlos. Carlos's victory was
wholesale, with the RTC making the following
pronouncements:
1.   Declaring the marriage between defendant Felicidad
Sandoval and Teofilo Carlos solemnized at Silang, Cavite, on
May 14, 1962, evidenced by the Marriage Contract submitted
in this case, null and void ab initio for lack of the requisite
marriage license;
Page 15 of 304
2.   Declaring that the defendant minor, Teofilo S. Carlos II, is
not the natural, illegitimate, or legally adopted child of the late
Teofilo E. Carlos;
3.   Ordering defendant Sandoval to pay and restitute to
plaintiff the sum of P18,924,800.00, together with the interest
thereon at the legal rate from date of filing of the instant
complaint until fully paid;
4.   Declaring plaintiff as the sole and exclusive owner of the
parcel of land, less the portion adjudicated to the plaintiffs in
Civil Case No. 11975, covered by TCT No. 139061 of the
Register of Deeds of Makati City, and ordering said Register of
Deeds to cancel said title and to issue another title in the sole
name of plaintiff herein;
5.   Declaring the Contract, Annex K of the Complaint, between
plaintiff and defendant Sandoval null and void, and ordering
the Register of Deeds of Makati City to cancel TCT No. 139058
in the name of Teofilo Carlos, and to issue another title in the
sole name of the plaintiff herein;
6.    Declaring the Contract, Annex M of the Complaint,
between plaintiff and defendant Sandoval null and void;
7.    Ordering the cancellation of TCT No. 210877 in the names
of defendant Sandoval and defendant minor Teofilo S. Carlos II
and ordering the Register of Deeds of Manila to issue another
title in the exclusive name of plaintiff herein.
8.    Ordering the cancellation of TCT No. 210878 in the names
of defendant Sandoval and defendant minor Teofilo S. Carlos II
and ordering the Register of Deeds of Manila to issue another
title in the sole name of plaintiff herein. [9]
Upon promulgation of the Summary Judgment, Carlos moved
before the RTC for execution pending appeal. The RTC granted
the motion for execution pending appeal upon the filing of a
bond.[10] On 27 May 1996, the RTC issued a Writ of Execution.
Meanwhile, respondents filed a Motion for Reconsideration of
the Summary Judgment, which was denied in an Orderdated
20 May 1996. Respondents then appealed the RTC Decision to
the Court of Appeals, wherein such appeal was docketed as
CA-G.R. CV No. 53229. The case was raffled to the appellate
courts' Fourteenth Division for completion of records. 
Sandoval and Carlos also filed a Petition for Certiorari with
Temporary Restraining Order dated 2 June 1996. This special
civil action primarily attacked the allowance of execution
pending appeal, and prayed for the annulment of
the Order granting execution pending appeal, and of the Writ
of Execution 
On 10 December 1996, in CA-G.R. CV No. 53229, respondents
filed a Motion for Judgment On the Attachment Bond.  They
noted that the Court of Appeals had already ruled that the Writ
of Preliminary Attachment issued by the RTC was improperly
granted and that its Decision, as affirmed by the Supreme
Court, had attained finality. Accordingly, they were entitled to
damages under Section 20, Rule 57 of the then Rules of Civil
Procedure, which governed claims for damages on account of
unlawful attachment. In support of their allegation of
damages, they cite the Notice of Garnishment served on PNB 
Malolos Branch, where Felicidad Carlos maintained deposits
amounting to P15,546,121.98.[11] Also presented in support of
the motion was a Notice of Delivery/Payment by the RTC
Sheriff, directing the PNB Malolos Branch to deliver the
amounts previously garnished by virtue of the Writ of
Execution dated 27 May 1996;[12] a Manifestation filed by PNB
dated 19 July 1996 in CA-G.R. SP No. 40819, stating that PNB
had already delivered to the RTC Sheriff on 27 June 1996 the
amount of P15,384,509.98 drawn against the accounts of
Carlos; and a Certification to the same effect issued by the
PNB Malolos Branch. In an Addendum to Motion for Judgment
on the Attachment Bond, respondents additionally prayed for
moral and exemplary damages.[13]
After various pleadings were duly filed by the parties, the Court
of Appeals Special Fourth Division issued a Resolutiondated 23
March 1998, certifying that all the necessary pleadings have
been filed, and that the case may already be referred to the
Raffle Committee for assignment to a ponente for study and
report. The same Resolution likewise denied without
elaboration a Motion to Dismiss on the ground of forum-
shopping filed earlier by Carlos.[14]
On such denial, Carlos filed a Motion for Reconsideration.
Respondents likewise filed a Motion for Partial
Reconsideration dated 17 April 1998, arguing that under the
Revised Internal Rules of the Court of Appeals (RIRCA), the
case may be re-raffled for assignment for study and report
only after there is a resolution that the case is deemed
submitted for decision.[15] They pointed out that re-raffle could
not yet be effected, as there were still pending incidents,
particularly the motions for reconsideration of Carlos and
themselves, as well as the Motion for Judgment on Attachment
Bond.
On 26 June 1998, the Court of Appeals Former Special Fourth
Division promulgated two resolutions.[16] The first, in response
to Carlos's Motion for Reconsideration, again denied
Carlos's Motion to Dismiss the Appeal and Motion for
Suspension, but explained the reasons for such denial.
The second resolution is at the center of the present petitions.
The assailed Resolution agreed with respondents that it was
first necessary to resolve the pending incidents before the case
could be re-raffled for study  and  report.  Accordingly,  the  
Court   of  Appeals proceeded to rule on these pending
incidents. While the first resolution dwelt on the pending
Page 16 of 304
motions filed by Carlos, this Resolution tackled the other
matter left unresolved, the Motion for Judgment on
Attachment Bond. The Court of Appeals found the claim for
damages meritorious, citing the earlier decisions ruling that
Carlos was not entitled to the preliminary attachment. Invoking
Section 20, Rule 57 of the Rules of Court, as well as
jurisprudence,[17] the Court of Appeals ruled that it was not
necessary for the determination of damages on the injunction
bond to await the decision on appeal.
The Court of Appeals then proceeded to determine to what
damages respondents were entitled to. In ruling that the
award of actual damages was warranted, the court noted:
It is also not disputed that the PNB, on June 27, 1996, issued
two manager's checks: MC No. 938541 for P4,932,621.09 and
MC 938542 for P10,451,888.89 payable to the order of "Luis C.
Bucayon II, Sheriff IV, RTC, Branch 256, Muntinlupa", duly
received by the latter in the total amount of PESOS FIFTEEN
MILLION THREE HUNDRED EIGHTY FOUR THOUSAND FIVE
HUNDRED NINE & 98/100 (P15,384,509.98), drawn against
the accounts of Ms. Felicidad Sandoval Vda. de Carlos which
were earlier garnished for the satisfaction of the above-
mentioned writ of attachment (Annex "E", Motion for Judgment
on the Attachment Bond, pp. 7-8)[18]
 
. . .  .
The contention of [Carlos] that the writ of attachment was not
implemented falls flat on the face of the manifestation of PNB
that the delivery of the garnished P15,384,509.98 to him was
effected through the sheriff.[19]
The Court of Appeals found that moral and exemplary
damages were not warranted, there being no malice in
pursuing the attachment. The appellate court also found the
claim of P2,000,000.00 for attorney's fees as excessive, and
reduced the sum by half. Correspondingly, the dispositive
portion of the assailed Resolution reads:
 
WHEREFORE, premises considered, judgment is hereby
rendered against the attachment bond, ordering SIDDCOR
INSURANCE CORPORATION and plaintiff-appellee to pay
defendants-appellants, jointly and severally, the sum of
P15,384,509.98 and 12% interest per annum from June 27,
1996 when the unlawful garnishment was effected until fully
paid and P1,000,000.00 as attorney's fees with 6% interest
thereon from the trial court's decision on April 8, 1986 until
fully paid.
SO ORDERED.[20]
 
Both Carlos and SIDDCOR filed their respective motions for
reconsideration of the Resolution. For their part, respondents
filed a Motion for Immediate Execution dated 7 August 1998 in
regard to the Resolution of 26 June 1998 awarding them
damages.
In the Resolution dated 10 October 1998,[21] the Court of
Appeals denied the motions for reconsideration and granted
the Motion for Immediate Execution. In granting the Motion for
Immediate Execution, the Court of Appeals cited the reasons
that the appeal to be undertaken from the 26 June
1998 Resolution was patently dilatory; that there were no
material and substantial defenses against the motion for
judgment on the attachment bond, rendering the appeal pro-
forma and dilatory; that Sandoval was of advanced age and
might not enjoy the fruits of the judgment on the attachment
bond; and that immediate execution would end her suffering
due to the arbitrary garnishment of her account pursuant to an
improper attachment.[22]
In its Motion for Reconsideration, SIDDCOR explicitly assailed
the allowance of the Motion for Immediate Execution.[23] This
was denied by the Court of Appeals in a Resolution dated 22
December 1998.[24]
From these antecedents, the following petitions were filed
before this Court:     
G.R. No. 135830
This Appeal by Certiorari with Prayer for Temporary
Restraining Order/Preliminary Injunction dated 26 October
1998 filed by Carlos assailed the two resolutions of the Court
of Appeals both dated 26 June 1998, as well as
the Resolutionof 10 October 1998, which denied Carlos's
motion for reconsideration. Carlos argues that the Court of
Appeals, through the Former Special Fourth Division, could not
have resolved the Motion for Judgment on the Attachment
Bond since the case had not yet been re-raffled under the two-
raffle system for study and report; that the Court of Appeals
erred in resolving the motion without conducting any hearing;
that the Court of Appeals had no jurisdiction over the motion
as the docketing fees had not yet been filed; that the motion
for judgment, which did not contain any certification against
forum-shopping, was an application subject to the
requirements of certification against forum-shopping; that
there was no supporting evidence to support the award of
damages; and that the Court of Appeals committed grave
Page 17 of 304
abuse of discretion in denying the Motion for v. Court of Appeals[27] wherein it was ruled that such indeed
Reconsideration without adverting to specific reasons constitutes a final and appealable order.
mentioned for the denial of each issue.[25]
SIDDCOR points out that no hearing was conducted on
Carlos likewise ascribes grave abuse of discretion to the Court the Motion for Immediate Execution despite the requirement in
of Appeals in its other Resolution dated 26 June 1998 for its Section 2, Rule 39 that "discretionary execution may only issue
refusal to dismiss CA-G.R. CV No. 53229 on the ground of upon good reasons to be stated in a special order after due
forum-shopping, adding that the appellate court should have hearing." SIDDCOR likewise notes that the motion granting
deferred resolution of the Motion for Judgment on the immediate execution was granted in the very same resolution
Attachment Bond  considering the prejudicial question raised in which had denied the motion for reconsideration of the
Carlos's motion to dismiss the main case on the ground of resolution sought to be immediately executed. For SIDDCOR,
forum-shopping. such constituted a denial of procedural due process insofar as
its statutory right to appeal was concerned, as the resolution
G.R. No. 136035 that it intended to appeal from was already the subject of
immediate execution.
This concerns a Petition for Review filed by SIDDCOR, likewise
challenging the Resolution of 26 June 1998 of the Court of Finally, SIDDCOR contests the special reasons cited by the
Appeals and the 10 October 1998 Resolution wherein Court of Appeals in granting the Motion for Immediate
Siddcor's Motion for Reconsideration, among others, was Execution.
denied. Siddcor argues therein that the Court of Appeals erred  
in ruling on the motion for damages without awaiting judgment
in the main case; granting that damages may be awarded, Facts Arising Subsequent to the Filing of Instant
these should encompass only such damages incurred during Petitions
the pendency of the appeal; and that a hearing was necessary  
to prove the claim for damages and the appellate court erred
On 7 May 1999, the Court of Appeals issued a Writ of
in granting the award for damages despite lack of hearing.
Execution directing the enforcement of the judgment on the
attachment bond.[28] However, in a Resolution dated 9 June
G.R. No. 137743
1999, this Court through the First Division issued a Temporary
Restraining Order, enjoining the enforcement of the said Writ
The third petition for adjudication, a Petition for Certiorari
of Execution.
under Rule 65 with Prayer for Temporary Restraining Order or
Preliminary Injunction, was also filed by SIDDCOR. This
On 15 October 2002, the Court of Appeals First Division
petition, dated 8 March 1999, specifically assails the allowance
rendered a Decision[29] on the merits of CA-G.R. CV No. 53229,
by the Court of Appeals of the immediate execution of the
setting aside the Summary Judgment and ordering the remand
award of damages, made through the resolutions dated 10
of the case for further proceedings.[30] Both parties filed their
October 1998 and 22 December 1998.
respective motions for reconsideration.[31]  In addition, Carlos
filed a motion to inhibit the author of the assailed decision,
SIDDCOR hereunder argues that Section 2, Rule 39 of the
Justice Rebecca de Guia-Salvador,[32]  who thereafter agreed to
Rules of Civil Procedure requires that execution of a judgment
inhibit herself.[33] Then on 7 August 2003, the Court of Appeals
or final order pending appeal may be made only on motion of
Former First Division issued a Resolution deferring action on
the prevailing party and may be made "even before the
the motions for reconsideration in light of the temporary
expiration of the period to appeal."[26]  Respondents had
restraining order issued by this Court until the resolution of the
argued in their Motion for Immediate Executionthat the
present petitions.
judgment sought to be executed (that on the attachment
bond) was interlocutory and not appealable, yet cited rulings
The factual background may be complicated, but the court
on execution pending appeal under Section 2, Rule 39 in
need only concern itself with the propriety of the judgment on
support of their position. SIDDCOR cites this inconsistency as
the attachment bond and the subsequent moves to secure
proof of a change of theory on the part of respondents which
immediate execution of such judgment. Should this Court be
could not be done for the theories are incompatible. Such
called upon to tackle the merits of the original action, Carlos's
being the case, SIDDCOR argues, the Court of Appeals gravely
complaint, it shall be in the review of the final resolution of the
abused its discretion in granting immediate execution since
Court of Appeals in CA-G.R. CV No. 53229.
respondents had filed its motion on the premise that the award
 
on the judgment bond was interlocutory and not appealable.
SIDDCOR also claims that the judgment on the attachment
bond is not interlocutory, citing Stronghold Insurance Co., Inc.

Page 18 of 304
Consolidation of Issues in
G.R. Nos. 135830 and 136035
 
The petitions in G.R. Nos. 135830 and 136035 are concerned
with the award of damages on the attachment bond. They may
be treated separately from the petition in G.R. No. 137743,
which relates to the immediate execution of the said award.
We consolidate the main issues in G.R. Nos. 135830 and
136035, as follows: (1) whether the assailed judgment on the
attachment bond could have been rendered, as it was, prior to
the adjudication of the main case; (2) whether the Court of
Appeals properly complied with the hearing requirement under
Section 20, Rule 57 prior to its judgment on the attachment
bond; and (3) whether the Court of Appeals properly
ascertained the amount of damages it awarded in the
judgment on the attachment bond.
Resolving these issues requires the determination of  the
proper scope and import of Section 20, Rule 57 of the 1997
Rules of Civil Procedure. The provision governs the disposal of
claims for damages on account of improper, irregular or
excessive attachment.
 
SECTION 20. Claim for damages on account of improper,
irregular or excessive attachment.—An application for damages
on account of improper, irregular or excessive attachment
must be filed before the trial or before appeal is perfected or
before the judgment becomes executory, with due notice to
the attaching obligee or his surety or sureties, setting forth the
facts showing his right to damages and the amount
thereof. Such damages may be awarded only after
proper hearing and shall be included in the judgment
on the main case.
If the judgment of the appellate court be favorable to the party
against whom the attachment was issued, he must claim
damages sustained during the pendency of the appeal by filing
an application in the appellate court with notice to the party in
whose favor the attachment was issued or his surety or
sureties, before the judgment of the appellate court becomes
executory. The appellate court may allow the application to be
heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom
the attachment was issued from recovering in the same action
the damages awarded to him from any property of the
attaching obligee not exempt from execution should the bond
or deposit given by the latter be insufficient or fail to fully
satisfy the award. (Emphasis supplied.)
Section 20 essentially allows the application to be filed at any
time before the judgment becomes executory. It should be
filed in the same case that is the main action, and cannot be
instituted separately.[34] It should be filed with the court having
jurisdiction over the case at the time of the application.[35] The
remedy provided by law is exclusive and by failing to file a
motion for the determination of the damages on time and
while the judgment is still under the control of the court, the
claimant loses his right to damages.[36]
There is no question in this case that the Motion for Judgment
on the Attachment Bond filed by respondents on 10 December
1996 was properly filed since it was filed with the Court of
Appeals during the pendency of the appeal in the main case
and also as an incident thereto. The core questions though lie
in the proper interpretation of the condition under Section 20,
Rule 57 that reads: "Such damages may be awarded only after
proper hearing and shall be included in the judgment on the
main case." Petitioners assert that there was no proper hearing
on the application for damages and that the Court of Appeals
had wrongfully acted on the application in that it resolved it
prior to the rendition of the main judgment.
 
"Such Damages May Be Awarded
Only After Proper Hearing...."
We first discuss whether the "proper hearing" requirement
under Section 20, Rule 57 had been satisfied prior to the
award by the Court of Appeals of damages on the attachment
bond.
Section 20 of Rule 57 requires that there be a "proper hearing"
before the application for damages on the attachment bond
may be granted. The hearing requirement ties with the
indispensable demand of procedural due process.  Due notice
to the adverse party and its surety setting forth the facts
supporting the applicant's right to damages and the amount
thereof under the bond is essential. No judgment for damages
may be entered and executed against the surety without 
giving  it  an   opportunity   to be heard as to the reality or
reasonableness of the damages resulting from the wrongful
issuance of the writ.[37]
In Paramount Insurance v. Court of Appeals,[38] the Court held
that under the rule, it was neither mandatory nor fatal that
there should be a separate hearing in order that damages
upon the bond can be claimed, ascertained and awarded.
[39]
 What is necessary only is for the attaching party and his
surety or sureties to be duly notified and given the opportunity
to be heard.[40]
In this case, both Carlos and SIDDCOR were duly notified by
the appellate court of the Motion for Judgment on the
Attachment Bond and were required to file their respective 
Page 19 of 304
comments  thereto.[41]  Carlos  and SIDDCOR filed  their  attachment was then already conclusive and beyond review,
respective  comments  in opposition to private respondents'
motion.[42] Clearly, all the relevant parties had been afforded
the bare right to be heard on the matter.
Concededly, the facts of this case differ from that
in Paramount, wherein the award of damages was predicated
under Section 8, Rule 58, and the trial on the merits included
the claim for damages on the attachment bond. The Court did
note therein that the counsel of the surety was present during
the hearings.[43] In this case, unlike in Paramount, there were
no open court hearings conducted by the Court of Appeals,
and it is precisely this absence that the petitioners assert as
fatal.
Plainly, there is no express requirement under the rule that the
hearing be done in open court, or that the parties be allowed
to confront adverse witnesses to the claim of damages on the
bond. The proper scope of the hearing requirement was
explained before Paramount in Peroxide Philippines Corp. v.
Court of Appeals,[44] thus:
 
. . . [It] is undeniable that when the attachment is challenged
for having been illegally or improperly issued, there must be a
hearing with the burden of proof to sustain the writ being on
the attaching creditor. That hearing embraces not only the
right to present evidence but also a reasonable opportunity to
know the claims of the opposing parties and meet them. The
right to submit arguments implies that opportunity, otherwise
the right would be a barren one. It means a fair and open
hearing.
From this pronouncement, we can discern that the "proper
hearing" contemplated would not merely encompass the right
of the parties to submit their respective positions, but also to
present evidence in support of their claims, and to rebut the
submissions and evidence of the adverse party. This is
especially crucial considering that the necessary elements to be
established in an application for damages are essentially
factual: namely, the fact of damage or injury, and the
quantifiable amount of damages sustained. Such matters
cannot be established on the mere say-so of the applicant, but
require evidentiary support. At the same time, there was no
equivocal statement from the Court inPeroxide that the hearing
required under the rule should be a full-blown hearing on the
merits
In this case, we rule that the demands of a "proper hearing"
were satisfied as of the time the Court of Appeals rendered its
assailed judgment on the attachment bond. The circumstances
in this case that we consider particularly telling are the settled
premises that the judicial finding on the wrongfulness of the
and that the amount of actual damages sustained  was
likewise indubitable as it  indeed could be found in the official
case record in CA-G.R. CV No. 53229. As a result, petitioners
would have been precluded from either raising the defenses
that the preliminary attachment was valid or disputing the
amount of actual damages sustained by reason of the
garnishment. The only matter of controversy that could be
litigable through the traditional hearing would be the matter of
moral and exemplary damages, but the Court of Appeals
appropriately chose not to award such damages.
Moreover, petitioners were afforded the opportunity to counter
the arguments extended by the respondents. They fully availed
of that right by submitting their respective
comments/oppositions. In fine, the due process guarantee has
been satisfied in this case.
It should be noted that this case poses a situation different
from what is normally contemplated under Section 20, Rule 57
—wherein the very wrongfulness of the attachment remains
one of the issues in contention in the main case. In such a
case, there would be a greater demand for a more extensive
hearing on the application of damages. The modality of
hearing should remain within the discretion of the court having
jurisdiction to hear the application for damages.  The only
demand, concordant to due process, would be the satisfaction
of the right to be heard, to present evidence, and to rebut the
evidence and arguments of the opposing party.
Some disquisition is necessary on whether or not, as
petitioners submit, a full-blown hearing in open court is
compulsory under Section 20, Rule 57. To impose this as a
mandatory requirement would ultimately prove too onerous to
our judicial system. Perhaps such a demand would be less
burdensome on the regional trial courts, which, as a matter of
routine, receive testimonial or documentary evidence
offered de novo, and to formulate conclusions on the
admissibility and credibility of the same.
However, a different situation applies if it is the Court of
Appeals or the Supreme Court before which the application for
damages is filed. Both these courts, which are capacitated to
receive and act on such actions, are generally not triers of
facts, and do not, in the course of daily routine, conduct
hearings. It is partly for such reason that Section 20, Rule 57
authorizes these appellate courts to refer the application for
damages to the trial court for hearing and decision. The trial
courts are functionally attuned to ascertain and evaluate at the
first instance the necessary factual premises that would
establish the right to damages. Still, reference of the
application for damages to the trial court is discretionary on
the part of the appellate courts. The latter, despite their
traditional appellate jurisdiction and review function, are still
empowered under Section 20 to rule on the application for
Page 20 of 304
damages, notwithstanding the factual dimension such question
presents.
To impose as mandatory on the Court of Appeals or the
Supreme Court to hear the application for damages through
full-blown hearings in open court is supremely unwise and
beyond the demands of Section 20, Rule 57. The effect would
be unduly disruptive on the daily workflow of appellate courts
such as the Court of Appeals and the Supreme Court, which
rarely conduct open court hearings. Neither could the Court
see what is so markedly special about an application for
damages, fact-oriented as it may be, that would require it to
be heard by the appellate courts in open court when no such
mandatory rule applies to other judicial matters for resolution
that are also factual in nature.
For example, the review of death penalty convictions by the
Court of Appeals and the Supreme Court necessitates a
thorough evaluation of the evidence presented,
notwithstanding the prior factual appreciation made by the trial
court.[45] Notwithstanding the factual nature of the questions
involved, there is no rule requiring the Court of Appeals or the
Supreme Court to call death penalty cases for hearing or oral
argument. If no such mandatory rule for hearing is imposed on
the appellate courts when the supreme penalty of death is
involved, why then should an exceptional rule be imposed in
the case for the relatively insignificant application for damages
on the attachment bond?
If open court hearings are ever resorted to by appellate courts,
such result from the exercise of discretion rather than by
imposition by statute or procedural rule. Indeed, there is no
existing statute, procedural rule, or jurisprudential fiat that
makes it mandatory on the Court of Appeals or the Supreme
Court to conduct an open-court hearing on any matter for
resolution. There is nothing demonstrably urgent with an
application for damages under Section 20, Rule 57 that would
necessitate this Court to adopt an unprecedented rule
mandating itself or the Court of Appeals to conduct full-blown
open court hearings on a particular type of action.
This pronouncement does not contradict our ruling in Hanil
Development v. IAC,[46] which Carlos interprets as requiring the
Court of Appeals to conduct a proper hearing on an application
for damages on the attachment bond.Hanil concerned the
refusal by the Intermediate Appellate Court (now Court of
Appeals) to take cognizance of the application for damages on
the attachment bond, such refusal being reversed by the
Court, which ruled that the Intermediate Appellate Court (IAC)
had jurisdiction to accept and rule on such application. While
the Court therein recognized that the IAC was empowered to
try cases and conduct hearings, or otherwise perform acts
necessary to resolve factual issues in cases,[47] it did not
require the appellate court to conduct a hearing in open court,
but merely to reinstate the application for damages.
Admittedly, the dispositive portion of Hanil required the Court
of Appeals to conduct hearings on the application for damages,
[48]
 but nowhere in the decision was a general rule laid down
mandating the appellate court to conduct such hearings in
open court. The ascertainment of the need to conduct full-
blown hearings is best left to the discretion of the appellate
court which chooses to hear the application. At the same time,
the Court cautions the appellate courts to carefully exercise
their discretion in determining the need for open-court
hearings on the application for damages on the attachment
bond. The Court does not sanction the indolent award of
damages on the attachment bond by the appellate court
without affording the adverse party and the bonding company
concerned the opportunity to present their sides and adduce
evidence in their behalf, or on the basis of unsubstantiated
evidence.
 
"...And Shall be Included in the
Judgment on the Main Case"
 
Section 20, Rule 57 does state that the award of damages shall
be included in the judgment on the main case, and seemingly
indicates that it should not be rendered prior to the
adjudication of the main case.
The rule, which guarantees a right to damages incurred by
reason of wrongful attachment, has long been recognized in
this jurisdiction.[49] Under Section 20, Rule 57 of the 1964 Rules
of Court, it was provided that there must be first a judgment
on the action in favor of the party against whom attachment
was issued before damages can be claimed by such party.
[50]
 The Court however subsequently clarified that under the
rule, "recovery for damages may be had by the party thus
prejudiced by the wrongful attachment, even if the judgment
be adverse to him."[51]
The language used in the 1997 revision of the Rules of Civil
Procedure leaves no doubt that there is no longer need for a
favorable judgment in favor of the party against whom
attachment was issued in order that damages may be
awarded. It is indubitable that even a party who loses the
action in main but is able to establish a right to damages by
reason of improper, irregular, or excessive attachment may be
entitled to damages. This bolsters the notion that the claim for
damages arising from such wrongful attachment may arise and
be decided separately from the merits of the main action. As
noted by the Court in Philippine Charter Insurance Corp. v.
Court of Appeals:[52]
The surety does not, to be sure, become liable on its bond
simply because judgment is subsequently rendered against the
Page 21 of 304
party who obtained the preliminary attachment. The surety
becomes liable only when and if "the court shall finally
adjudge that the applicant was not entitled to the
attachment." This is so regardless of the nature and
character of the judgment on the merits of the
principal claims, counterclaims or cross-claims, etc.
asserted by the parties against each other. Indeed,
since an applicant's cause of action may be entirely
different from the ground relied upon by him for a
preliminary attachment, it may well be that although
the evidence warrants judgment in favor of said
applicant, the proofs may nevertheless also establish
that said applicant's proferred ground for attachment
was inexistent or specious and hence, the writ should
not have issued at all; i.e., he was not entitled thereto in
the first place. In that event, the final verdict should logically
award to the applicant the relief sought in his basic pleading,
but at the same time sentence him—usually on the basis of a
counterclaim—to pay damages caused to his adversary by the
wrongful attachment. [Emphasis supplied.]
Moreover, a separate rule—Section 8, Rule 58— covers
instances when it is the trial court that awards damages upon
the bond for preliminary injunction of the adverse party.
Tellingly, it requires that the amount of damages to be
awarded be claimed, ascertained, and awarded under the
same procedure prescribed in Section 20 of Rule 57.
In this case, we are confronted with a situation wherein the
determination that the attachment was wrongful did not come
from the trial court, or any court having jurisdiction over the
main action. It was rendered by the Court of Appeals in the
exercise of its certiorari jurisdiction in the original action
reviewing the propriety of the issuance of theWrit of
Preliminary Attachment against the private respondents. Said
ruling attained finality when it was affirmed by this Court.
The courts are thus bound to respect the conclusiveness of this
final judgment, deeming as it does the allowance by the RTC
of preliminary attachment as improper. This conclusion is no
longer subject to review, even by the court called upon to
resolve the application for damages on the attachment bond.
The only matter left for adjudication is the proper amount of
damages.
Nevertheless, Section 20, Rule 57 explicitly provides that the
award for damages be included in the judgment on the main
case. This point was apparently not lost on the Court of
Appeals when it rendered its Resolution dated 23 March 1998,
certifying that the case may now be referred to the Raffle
Committee for assignment to a ponente. The appellate court
stated therein: "The Resolution of defendants-appellants'
motion for judgment on the attachment may be incorporated
in the decision by the ponente for study and report,"[53] and
such observation is in conformity with Section 20.
However, this reasoning was assailed by respondents, who
argued that the motion for judgment on the attachment bond
was a pending incident that should be decided before the case
can be re-raffled to a ponente for decision. Respondents may
be generally correct on the point that a case can only be
deemed submitted for decision only after all pending incidents
are resolved. Yet since Section 20, Rule 57 provides that their
application for damages on the attachment bond "shall be
included in the judgment on the main case," it is clear that the
award for damages need not be resolved before the case is
submitted for decision, but should instead be resolved and
included in the judgment on the main case, or the decision on
the Appeal by Certiorari filed by the respondents.
Thus, the action of the Court of Appeals in resolving the
application for damages even before the main judgment was
issued does not conform to Section 20, Rule 57. However, the
special particular circumstances of this case lead us to rule that
such error is not mortal to the award of damages.
As noted earlier, the award of damages was made after a
proper hearing had occurred wherein all the concerned parties
had been given the opportunity to present their arguments and
evidence in support and in rebuttal of the application for
damages. The premature award of damages does not negate
the fact that the parties were accorded due process, and
indeed availed of their right to be heard.
Moreover, we are compelled to appreciate the particular
circumstance in this case that the right of private respondents
to acquire relief through the award of damages on account of
the wrongful preliminary attachment has been conclusively
affirmed by the highest court of the land. This differs from the
normal situation under Section 20, Rule 57 wherein the court
having jurisdiction over the main action is still required to
ascertain whether the applicant actually has a right to
damages. To mandatorily require that the award of damages
be included in the judgment in the main case makes all the
sense if the right to damages would be ascertained at the
same time the main judgment is made. However, when the
said right is already made viable by reason of a final judgment
which is no longer subject to review, there should be no
unnecessary impediments to its immediate implementation.
And finally, any ruling on our part voiding the award of
damages solely for the reason that it was not included in the
judgment on the main case, and remanding the motion to the
Court of Appeals for proper adjudication together with the
main case may exhibit fealty to the letter of the procedural
rule, but not its avowed aims of promoting a just and speedy
disposition of every action and proceeding. After all, if we were
to compel the Court of Appeals to decide again on the
application for damages and incorporate its ruling in the
Page 22 of 304
judgment on the main action, the appellate court will be rule, but would only cause the delay of the resolution of this
examining exactly the same evidence and applying exactly the long-pending case. Procedural rules are designed, and must
same rules as it already did when it issued the assailed therefore be so interpreted as, to give effect to lawful and valid
resolution awarding damages on the bond. This would be claims and not to frustrate them.[58]
unnecessarily redundant especially considering that the
Supreme Court had already affirmed that there was wrongful Even SIDDCOR acknowledges that there are recognized
attachment in this case. instances where the award of damages or judgment on the
attachment bond may not be included in the decision on the
There is also the fact that remanding the question of damages, main case, such as if the main case was dismissed for lack of
singly for the purpose of adhering to the letter of the jurisdiction and no claim for damages could have been
procedural rule, would further prolong the resolution of the presented in the main case.[59]
main case, which has been with the Court of Appeals for more  
than nine years now.[54] Our Rules of Court precisely requires
liberal construction of the procedural rules to promote the Scope of Damages
objective of securing a just, speedy and inexpensive disposition Properly Awardable
of every action and proceeding.[55] With this precept, all the  
more justification is supplied for allowing the award for
Next, we examine the particular award of damages made in
damages despite its apparent prematurity, if it is in all other
this case, consisting of P15,384,509.98, plus interest, as well
respects proper.
as P1,000,000.00 as attorney's fees. There seems to be no
dispute that the former amount constituted the amount drawn
The same reasons apply in resolving the question of whether
against the account of Sandoval by reason of the writ of
the Court of Appeals could have decided the Motion for
execution issued by the trial court on 27 May 1996. This fact
Judgment on the Attachment Bond considering that the case
was confirmed by the PNB, in its Manifestation dated 19 July
had not yet been re-raffled under the two-raffle system for
1996, confirming the garnishment.
study and report. Under Section 5, Rule 3 of the RIRCA, a case
filed with the Court of Appeals undergoes two raffles for
Respondents' burden in proving damages in this case was
assignment to a particular Justice. The first raffle is made for
considerably lessened by the fact that there was already a final
completion of records.[56] Afterwards, "all raffled appealed
judgment, no longer subject to review, that the preliminary
cases, the records of which have been completed and
attachment allowed by the trial court was indeed wrongful.
submitted for decision, shall be re-raffled for assignment to a
Hence, all that was necessary to be proved was the amount of
Justice for study and report." [57]
damage actually sustained by respondents by reason of the
wrongful attachment. It is unquestioned that by virtue of the
The fact that Section 20, Rule 57 provides that the award of
writ of preliminary attachment, a Notice of Garnishment was
damages on the attachment bond "shall be included in the
served upon the PNB over deposit accounts maintained by
judgment on the main case" necessarily implies that it is to be
respondents. Said Notice of Garnishment placed under the
made only after the case has been re-raffled for study and
control of the RTC all the accounts maintained by respondents,
report, and concurrently decided with the judgment of
and prevented the transfer or disposition of these accounts.
the ponente in the main case. Again, the Court of Appeals [60]
 Then the subsequent Writ of Execution dated 27 May 1996
failed to consider Section 20, Rule 57 when it acted upon the
ordered the delivery to Carlos of these accounts earlier
application even before the second raffle was made.
subjected to garnishment.[61]
Had Section 20, Rule 57 been faithfully complied with, a
Clearly, the amount of actual pecuniary loss sustained by
different Justice of the Court of Appeals would have penned
respondents has been well established.
the ruling on the application for damages, in accordance with
The Manifestationsubmitted by the PNB further affirmed the
the RIRCA. Yet this circumstance does not outweigh the other
actual amount seized by Carlos, an amount which could not
considerations earlier mentioned that would warrant a liberal
have been acquired had it not been for the writ of preliminary
interpretation of the procedural rules in favor of respondents.
attachment which was wrongfully issued.
The parties had adduced all their arguments and evidence
before the Court of Appeals, and indeed, these were
Carlos lamely argues in his petition that there was no concrete
appreciated on first instance by Justice Demetria, who
or supporting evidence to justify the amount of actual
eventually penned the assailed resolutions. There was already
damages, a claim that is belied by the official case records.
a final determination that the attachment was wrongful. And
The more substantive argument is presented by SIDDCOR,
any delay brought about by requiring that it be the ponencia,
which submits that any damages that may be awarded to
determined after the second raffle, who decides the application
respondents can include only those that were incurred, if any,
for damages may bear pro formaadherence to the letter of the
during the pendency of the appeal.  But this contention is

Page 23 of 304
belied by Section 4, Rule 57 of the 1997 Rules of Civil
Procedure, which provides that the bond issued for preliminary
attachment is conditioned that the applicant "will pay all the
costs which may be adjudged to the adverse party and all
damages which he may sustain by reason of the
attachment, if the court shall finally adjudge that the
applicant was not entitled thereto."[62]
The case Paramount Insurance Corp. v. Court of Appeals[63] is
instructive. It discusses the scope of the bond executed by
upon an application for preliminary injunction,[64] which
similarly covers "all damages which [may be] sustain[ed] by
reason of the injunction or temporary restraining order if the
court should finally decide that the applicant was not entitled
thereto."[65] The surety in that case claimed that it could be
liable "only to the amount of damages accruing from the time
the injunction bond was issued until the termination of the
case, and not from the time the suit was commenced."[66] In
rebutting this claim, the Court ruled:
 
. . . . Rule 58, Section 4(b), provides that a bond is executed in
favor of the party enjoined to answer for all damages which he
may sustain by reason of the injunction. This Court already
had occasion to rule on this matter in Mendoza v. Cruz, where
it held that "(t)he injunction bond is intended as a security for
damages in case it is finally decided that the injunction ought
not to have been granted. It is designed to cover all
damages which the party enjoined can possibly suffer.
Its principal purpose is to protect the enjoined party
against loss or damage by reason of an injunction." No
distinction was made as to when the damages should
have been incurred.[67]
 
Our ruling in Philippine Charter Insurance Corp. v. Court of
Appeals, relied upon by the Court of Appeals, squarely applies
to this case:
Under the circumstances, too, there can be no gainsaying the
surety's full awareness of its undertakings under its bond: that,
as the law puts it: "the plaintiff will pay all costs which may be
adjudged to the defendant(s), and all damages which may be
sustained by reason of the attachment, if the same shall finally
be adjudged to have been wrongful and without cause," and
that those damages plainly comprehended not only those
sustained during the trial of the action but also those during
the pendency of the appeal. This is the law, and this is how
the surety's liability should be understood. The surety's liability
may be enforced whether the application for damages for
wrongful attachment be submitted in the original proceedings
before the Trial Court, or on appeal, so long as the judgment
has not become executory. The surety's liability is not and
cannot be limited to the damages caused by the
improper attachment only during the pendency of the
appeal. That would be absurd. The plain and patent
intendment of the law is that the surety shall answer
for all damages that the party may suffer as a result of
the illicit attachment, for all the time that the
attachment was in force; from levy to dissolution. . . .
The fact that the second paragraph of the rule speaks
only of "damages sustained during the pendency of the
appeal" is of no moment; it obviously proceeds from
the assumption in the first paragraph that the award
for the damages suffered during the pendency of the
case in the trial court was in fact "included in the final
judgment" (or applied for therein before the appeal was
perfected or the judgment became executory); hence, it states
that the damages additionally suffered thereafter, i.e., during
the pendency of the appeal, should be claimed before the
judgment of the appellate tribunal becomes executory. It
however bears repeating that where. as in the case at
bar, the judgment of the Trial Court has expressly or
impliedly sustained the attachment and thus has given
rise to no occasion to speak of, much less, file an
application for damages for wrongful attachment, and
it is only in the decision of the Court of Appeals that the
attachment is declared wrongful and that the applicant
"was not entitled thereto," the rule is, as it should be,
that it is entirely proper at this time for the application
for damages for such wrongful attachment to be filed—
i.e., for all the damages sustained thereby, during all
the time that it was in force, not only during the
pendency of the appeal. . . .[68]
 
The rule is thus well-settled that the bond issued upon an
application for preliminary attachment answers for all
damages, incurred at whatever stage, which are sustained by
reason of the attachment. The award of actual damages by the
Court of Appeals is thus proper in amount. However, we
disagree that the rate of legal interest be counted from the
date of the "unlawful garnishment," or on 27 June 1996.
Properly, interest should start to accrue only from the moment
it had been finally determined that the attachment was
unlawful, since it is on that basis that the right to damages
comes to existence. In this case, legal interest commences
from the date the Court of Appeals decision in CA-G.R. SP No.
39267 became final, by reason of its affirmation by this Court.
The award of attorney's fees in the amount of P1,000,000.00 is
also questioned before this Court, considering that the Court of
Appeals did not award moral or exemplary damages. The
general rule may be that an award of attorney's fees should be
deleted where the award of moral and exemplary damages are
eliminated.[69] Nonetheless, attorney's fees may be awarded
under the Civil Code where the court deems it just and
Page 24 of 304
equitable that attorney's fees and expenses of litigation should
be recovered,[70] even if moral and exemplary damages are
unavailing.[71]
Particularly, the Court has recognized as just and equitable
that attorney's fees be awarded when a party is compelled to
incur expenses to lift a wrongfully issued writ of attachment.
[72]
 The amount of money garnished, and the length of time
respondents have been deprived from use of their money by
reason of the wrongful attachment, all militate towards a
finding that attorney's fees are just and equitable under the
circumstances. However, we deem the amount of
P1,000,000.00 as excessive, and modify the award of
attorney's fees to P500,000.00 which represents merely
approximately three percent of the actual damages suffered by
and awarded to respondents. We also delete the imposition of
legal interest made by the Court of Appeals on the awarded
attorney's fees. 
Other Issues Raised in G.R. No. 135830
 
The issues raised in G.R. No. 136035 have been dispensed
with, and the remaining issues in G.R. No. 135830 are
relatively minor. There is no need to dwell at length on them.
Carlos insists that respondents were liable to have paid docket
fees upon filing of their Motion for Judgment on Attachment
Bond, on the theory that they claimed therein for the first time
the alleged damages resulting from the dissolved attachment.
The said motion is characterized as an initiatory proceeding
because it is claimed therein for the first time, the damages
arising from the attachment. In the same vein, Carlos argues
that the absence of a certification against forum-shopping
attached to the motion renders the said motion as fatal. Again,
it is pointed out that initiatory pleadings must contain the said
certification against forum-shopping.
Our ruling in Santo Tomas University Hospital v. Surla[73] is
instructive. It was argued therein that the requirement of the
certification against forum-shopping, as contained in
Administrative Circular No. 04-94,[74] covered compulsory
counterclaims. The Court ruled otherwise:
 
It bears stressing, once again, that the real office of
Administrative Circular No. 04-94, made effective on 01 April
1994, is to curb the malpractice commonly referred to also as
forum-shopping. . . . The language of the circular distinctly
suggests that it is primarily intended to cover an initiatory
pleading or an incipient application of a party asserting a claim
for relief.
It should not be too difficult, the foregoing rationale of
the circular aptly taken, to sustain the view that the
circular in question has not, in fact, been contemplated
to include a kind of claim which, by its very nature as
being auxiliary to the proceeding in the suit and as
deriving its substantive and jurisdictional support
therefrom, can only be appropriately pleaded in the
answer and not remain outstanding for independent
resolution except by the court where the main case
pends. Prescinding from the foregoing, the proviso in the
second paragraph of Section 5, Rule 8, of the 1997 Rules of
Civil Procedure, i.e., that the violation of the anti-forum
shopping rule "shall not be curable by mere amendment . . .
but shall be cause for the dismissal of the case without
prejudice," being predicated on the applicability of the need for
a certification against forum shopping,obviously does not
include a claim which cannot be independently set up.
[75]
 (Emphasis supplied.)
It is clear that under Section 20, Rule 57, the application for
damages on the attachment bond cannot be independently set
up, but must be filed in the main case, before the judgment
therein becomes final and executory.Santo Tomas squarely
applies in determining that no certification against forum-
shopping was required in the Motion for Judgment on the
Attachment Bond. The same reasoning also sustains a ruling
that neither legal fees were required for the filing of the said
motion. Section 1, Rule 141 of the Rules of Court provides that
legal fees are prescribed upon the filing of the pleading or
other application which initiates an action or proceeding.
[76]
 Since the said application for judgment on the attachment
bond cannot be considered as an initiatory pleading, as it
cannot be independently set up from the main action, it is not
likewise chargeable with legal fees.
As to the issue relating to the other Resolution dated 26 June
1998 denying the motion to dismiss appeal on the ground of
forum-shopping, we find Carlos's arguments as unmeritorious.
Forum-shopping allegedly existed because petitioners had filed
two cases before the Court of Appeals, CA-G.R. CV No. 53229,
and the Petition for Certiorari with Temporary Restraining
Order dated 2 June 1996 attacking the allowance of execution
pending appeal. Evidently, the two causes of action in these
two petitions are different, CA-G.R. CV No. 53229 being an
appeal from theSummary Judgment rendered by the RTC, and
the second petition assailing the subsequent allowance by the
RTC of execution pending appeal. There is no identity between
these two causes of action that would warrant a finding of
forum-shopping.
Issues Raised in G.R. No. 137743
 
Page 25 of 304
To recount, respondents, having obtained a favorable decision
on their Motion for Judgment on the Attachment Bond, filed
a Motion for Immediate Execution of the award of damages.
This was granted by the Court of Appeals in
itsResolution dated 16 October 1998, said resolution now
specifically assailed by SIDDCOR in G.R. No. 137743.
In their Motion for Immediate Execution, respondents' theory
in seeking the immediate execution of the award of damages
was that said award was not subject to appeal, the ruling
thereupon being an interlocutory order.[77] This position was
not adopted by the Court of Appeals in its 16 October
1998 Resolution, which was otherwise favorably disposed to
respondents. Instead, the Court of Appeals predicated the
immediate execution on the following grounds: (1) that the
judicial finding that the writ of preliminary attachment was
wrongful was already final and beyond review; (2) there were
no material and substantial defenses against the motion for the
issuance of the judgment bond; (3) Sandoval was elderly and
sickly, without means of livelihood and may not be able to
enjoy the fruits of the judgment on the attachment bond; (4)
that immediate execution would end her suffering caused by
the arbitrary garnishment of her PNB account.
There is no doubt that a judgment on the attachment bond is a
final and appealable order. As stated earlier, it is, under normal
course, included in the main judgment, which in turn is final
and appealable. Respondents admit that they had erred in
earlier characterizing the said judgment as an interlocutory
order. Still, SIDDCOR argues that such earlier error is fatal,
and that the Court of Appeals abused its discretion in ruling on
the motion on a theory different from that urged on by
respondents.
By no means could respondents be deemed as estopped from
changing their legal theory, since the rule on estoppel applies
to questions of fact and not questions of law. [78] Moreover,
courts are empowered to decide cases even if the parties raise
legal rationales other than that which would actually apply in
the case. The basis of whether respondents are entitled to
immediate execution arises from law, particularly Section 2(a),
Rule 39 of the Rules of Court, and not solely on whatever
allegations may be raised by the movant.
Thus, we find no grave abuse of discretion on the part of the
Court of Appeals, even though it allowed execution pending
appeal on a legal basis different from that originally adduced
by respondents. After all, the reasoning ultimately employed by
the appellate court is correct, and it hardly would be judicious
to require the lower court to adhere to the movant's erroneous
ratiocination and preclude the proper application of the law.
We need not review in length the justification of the Court of
Appeals in allowing execution pending appeal. The standard
set under Section 2(a), Rule 39 merely requires "good
reasons," a "special order," and "due hearing." Due hearing
would not require a hearing in open court, but simply the right
to be heard, which SIDDCOR availed of when it filed its
opposition to the motion for immediate execution.
The Resolution dated 16 October 1998 satisfies the "special
order" requirement, and it does enumerate at length the "good
reasons" for allowing execution pending appeal. As to the
appreciation of "good reasons," we simply note that the
advanced age alone of Sandoval would have sufficiently
justified execution pending appeal, pursuant to the well-settled
jurisprudential rule.[79] The wrongfulness of the attachment,
and the length of time respondents have been deprived of
their money by reason of the wrongful attachment further
justifies execution pending appeal under these circumstances.
WHEREFORE, the petitions are DISMISSED. The Temporary
Restraining Order issued in the Resolution dated 9 June 1999
is hereby LIFTED. The assailed Resolution of the Court of
Appeals Special Fourth Division dated 26 June 1998
is AFFIRMED with the MODIFICATIONS that the legal
interest on the award of actual damages should commence
from the date of the finality of the Decision of the Court of
Appeals in CA G.R. SP No. 39267 and that the award of
attorney's fees is in the amount of P500,000. Costs against
petitioners.
SO ORDERED.
Cheng vs Sy
ANITA CHENG, Petitioner, versus SPOUSES WILLIAM
SY and TESSIE SY, Respondents.
NACHURA, J.:
This is a petition[1] for review on certiorari under Rule 45 of
the Rules of Court of the Order dated January 2, 2006[2] of
the Regional Trial Court (RTC), Branch 18, Manila in Civil Case
No. 05-112452 entitled Anita Cheng v. Spouses William Sy and
Tessie Sy.
The antecedents are as follows-
Petitioner Anita Cheng filed two (2) estafa cases before the
RTC, Branch 7, Manila against respondent spouses William and
Tessie Sy (Criminal Case No. 98-969952 against Tessie Sy and
Criminal Case No. 98-969953 against William Sy) for issuing to
her Philippine Bank of Commerce (PBC) Check Nos. 171762
and 71860 for P300,000.00 each, in payment of their loan,
both of which were dishonored upon presentment for having
been drawn against a closed account.
Meanwhile, based on the same facts, petitioner, on January
20, 1999, filed against respondents two (2) cases for violation
of Batas Pambansa Bilang (BP Blg.) 22 before the Metropolitan
Trial Court (MeTC), Branch 25, Manila (Criminal Case Nos.
Page 26 of 304
341458-59).
On March 16, 2004, the RTC, Branch 7, Manila dismissed the
estafa cases for failure of the prosecution to prove the
elements of the crime. The Order dismissing Criminal Case No.
98-969952 contained no declaration as to the civil liability of
Tessie Sy.[3] On the other hand, the Order in Criminal Case
No. 98-969953 contained a statement, "Hence, if there is any
liability of the accused, the same is purely 'civil,' not criminal in
nature."[4]
Later, the MeTC, Branch 25, Manila, dismissed, on demurrer,
the BP Blg. 22 cases in its Order[5] dated February 7, 2005 on
account of the failure of petitioner to identify the accused
respondents in open court. The Order also did not make any
pronouncement as to the civil liability of accused respondents.
On April 26, 2005, petitioner lodged against respondents
before the RTC, Branch 18, Manila, a complaint[6] for
collection of a sum of money with damages (Civil Case No. 05-
112452) based on the same loaned amount of P600,000.00
covered by the two PBC checks previously subject of the estafa
and BP Blg. 22 cases.
In the assailed Order[7] dated January 2, 2006, the RTC,
Branch 18, Manila, dismissed the complaint for lack of
jurisdiction, ratiocinating that the civil action to collect the
amount of P600,000.00 with damages was already impliedly
instituted in the BP Blg. 22 cases in light of Section 1,
paragraph (b) of Rule 111 of the Revised Rules of Court.
Petitioner filed a motion for reconsideration[8] which the court
denied in its Order[9] dated June 5, 2006. Hence, this petition,
raising the sole legal issue -
Whether or not Section 1 of Rule 111 of the 2000 Rules of
Criminal Procedure and Supreme Court Circular No. 57-97 on
the Rules and Guidelines in the filing and prosecution of
criminal cases under BP Blg. 22 are applicable to the present
case where the nature of the order dismissing the cases for
bouncing checks against the respondents was [based] on the
failure of the prosecution to identify both the accused
(respondents herein)?[10]
Essentially, petitioner argues that since the BP Blg. 22 cases
were filed on January 20, 1999, the 2000 Revised Rules on
Criminal Procedure promulgated on December 1, 2000 should
not apply, as it must be given only prospective application. She
further contends that that her case falls within the following
exceptions to the rule that the civil action correspondent to the
criminal action is deemed instituted with the latter-
(1) additional evidence as to the identities of the accused is
necessary for the resolution of the civil aspect of the case;
(2) a separate complaint would be just as efficacious as or
even more expedient than a timely remand to the trial court
where the criminal action was decided for further hearings on
the civil aspect of the case;
(3) the trial court failed to make any pronouncement as to the
civil liability of the accused amounting to a reservation of the
right to have the civil liability litigated in a separate action;
(4) the trial court did not declare that the facts from which the
civil liability might arise did not exist;
(5) the civil complaint is based on an obligation ex-contractu
and not ex-delicto pursuant to Article 31[11] of the Civil Code;
and
(6) the claim for civil liability for damages may be had under
Article 29[12] of the Civil Code.
Petitioner also points out that she was not assisted by any
private prosecutor in the BP Blg. 22 proceedings.
The rule is that upon the filing of the estafa and BP Blg. 22
cases against respondents, where the petitioner has not made
any waiver, express reservation to litigate separately, or has
not instituted the corresponding civil action to collect the
amount of P600,000.00 and damages prior to the criminal
action, the civil action is deemed instituted with the criminal
cases.[13]
This rule applies especially with the advent of the 2000
Revised Rules on Criminal Procedure. Thus, during the
pendency of both the estafa and the BP Blg. 22 cases, the
action to recover the civil liability was impliedly instituted and
remained pending before the respective trial courts. This is
consonant with our ruling in Rodriguez v. Ponferrada[14] that
the possible single civil liability arising from the act of issuing a
bouncing check can be the subject of both civil actions deemed
instituted with the estafa case and the prosecution for violation
of BP Blg. 22, simultaneously available to the complaining
party, without traversing the prohibition against forum
shopping.[15] Prior to the judgment in either the estafa case
or the BP Blg. 22 case, petitioner, as the complainant, cannot
be deemed to have elected either of the civil actions both
impliedly instituted in the said criminal proceedings to the
exclusion of the other.[16]
The dismissal of the estafa cases for failure of the prosecution
to prove the elements of the crime beyond reasonable doubt-
where in Criminal Case No. 98-969952 there was no
pronouncement as regards the civil liability of the accused and
in Criminal Case No. 98-969953 where the trial court declared
that the liability of the accused was only civil in nature-
produced the legal effect of a reservation by the petitioner of
her right to litigate separately the civil action impliedly
instituted with the estafa cases, following Article 29 of the Civil
Page 27 of 304
Code.[17]
However, although this civil action could have been litigated
separately on account of the dismissal of the estafa cases on
reasonable doubt, the petitioner was deemed to have also
elected that such civil action be prosecuted together with the
BP Blg. 22 cases in light of the Rodriguez v. Ponferrada ruling.
With the dismissal of the BP Blg. 22 cases for failure to
establish the identity of the accused, the question that arises is
whether such dismissal would have the same legal effect as
the dismissed estafa cases. Put differently, may petitioner's
action to recover respondents' civil liability be also allowed to
prosper separately after the BP Blg. 22 cases were dismissed?
Section 1 (b), Rule 111 of the 2000 Revised Rules on Criminal
Procedure states -
Section 1. Institution of criminal and civil actions. -
xxx
(b) The criminal action for violation of Batas Pambansa Blg. 22
shall be deemed to include the corresponding civil action. No
reservation to file such civil action separately shall be allowed.
Upon filing of the joint criminal and civil actions, the offended
party shall pay in full the filing fees based on the amount of
the check involved, which shall be considered as the actual
damages claimed. Where the complaint or information also
seeks to recover liquidated, moral, nominal, temperate or
exemplary damages, the offended party shall pay the filing
fees based on the amounts alleged therein. If the amounts are
not so alleged but any of these damages [is] subsequently
awarded by the court, the filing fees based on the amount
awarded shall constitute a first lien on the judgment.
Where the civil action has been filed separately and trial
thereof has not yet commenced, it may be consolidated with
the criminal action upon application with the court trying the
latter case. If the application is granted, the trial of both
actions shall proceed in accordance with section 2 of this Rule
governing consolidation of the civil and criminal actions.
Petitioner is in error when she insists that the 2000 Rules on
Criminal Procedure should not apply because she filed her BP
Blg. 22 complaints in 1999. It is now settled that rules of
procedure apply even to cases already pending at the time of
their promulgation. The fact that procedural statutes may
somehow affect the litigants' rights does not preclude their
retroactive application to pending actions. It is axiomatic that
the retroactive application of procedural laws does not violate
any right of a person who may feel that he is adversely
affected, nor is it constitutionally objectionable. The reason for
this is that, as a general rule, no vested right may attach to,
nor arise from, procedural laws.[18]
Indeed, under the present revised Rules, the criminal action for
violation of BP Blg. 22 includes the corresponding civil action to
recover the amount of the checks. It should be stressed, this
policy is intended to discourage the separate filing of the civil
action. In fact, the Rules even prohibits the reservation of a
separate civil action, i.e., one can no longer file a separate civil
case after the criminal complaint is filed in court. The only
instance when separate proceedings are allowed is when the
civil action is filed ahead of the criminal case. Even then, the
Rules encourages the consolidation of the civil and criminal
cases. Thus, where petitioner's rights may be fully adjudicated
in the proceedings before the court trying the BP Blg. 22 cases,
resort to a separate action to recover civil liability is clearly
unwarranted on account of res judicata, for failure of petitioner
to appeal the civil aspect of the cases. In view of this special
rule governing actions for violation of BP Blg. 22, Article 31 of
the Civil Code is not applicable.[19]
Be it remembered that rules governing procedure before the
courts, while not cast in stone, are for the speedy, efficient,
and orderly dispensation of justice and should therefore be
adhered to in order to attain this objective.[20]
However, in applying the procedure discussed above, it
appears that petitioner would be left without a remedy to
recover from respondents the P600,000.00 allegedly loaned
from her. This could prejudice even the petitioner's Notice of
Claim involving the same amount filed in Special Proceedings
No. 98-88390 (Petition for Voluntary Insolvency by Kolin
Enterprises, William Sy and Tessie Sy), which case was
reportedly archived for failure to prosecute the petition for an
unreasonable length of time.[21] Expectedly, respondents
would raise the same defense that petitioner had already
elected to litigate the civil action to recover the amount of the
checks along with the BP Blg. 22 cases.
It is in this light that we find petitioner's contention that she
was not assisted by a private prosecutor during the BP Blg. 22
proceedings critical. Petitioner indirectly protests that the
public prosecutor failed to protect and prosecute her cause
when he failed to have her establish the identities of the
accused during the trial and when he failed to appeal the civil
action deemed impliedly instituted with the BP Blg. 22 cases.
On this ground, we agree with petitioner.
Faced with the dismissal of the BP Blg. 22 cases, petitioner's
recourse pursuant to the prevailing rules of procedure would
have been to appeal the civil action to recover the amount
loaned to respondents corresponding to the bounced checks.
Hence, the said civil action may proceed requiring only a
preponderance of evidence on the part of petitioner. Her
failure to appeal within the reglementary period was
tantamount to a waiver altogether of the remedy to recover
Page 28 of 304
the civil liability of respondents. However, due to the gross
mistake of the prosecutor in the BP Blg. 22 cases, we are
constrained to digress from this rule.
It is true that clients are bound by the mistakes, negligence
and omission of their counsel.[22] But this rule admits of
exceptions - (1) where the counsel's mistake is so great and
serious that the client is prejudiced and denied his day in
court, or (2) where the counsel is guilty of gross negligence
resulting in the client's deprivation of liberty or property
without due process of law.[23] Tested against these
guidelines, we hold that petitioner's lot falls within the
exceptions.
It is an oft-repeated exhortation to counsels to be well-
informed of existing laws and rules and to keep abreast with
legal developments, recent enactments and jurisprudence.
Unless they faithfully comply with such duty, they may not be
able to discharge competently and diligently their obligations
as members of the Bar.[24] Further, lawyers in the
government service are expected to be more conscientious in
the performance of their duties as they are subject to public
scrutiny. They are not only members of the Bar but are also
public servants who owe utmost fidelity to public service.[25]
Apparently, the public prosecutor neglected to equip himself
with the knowledge of the proper procedure for BP Blg. 22
cases under the 2000 Rules on Criminal Procedure such that he
failed to appeal the civil action impliedly instituted with the BP
Blg. 22 cases, the only remaining remedy available to
petitioner to be able to recover the money she loaned to
respondents, upon the dismissal of the criminal cases on
demurrer. By this failure, petitioner was denied her day in
court to prosecute the respondents for their obligation to pay
their loan.
Moreover, we take into consideration the trial court's
observation when it dismissed the estafa charge in Criminal
Case No. 98-969953 that if there was any liability on the part
of respondents, it was civil in nature. Hence, if the loan be
proven true, the inability of petitioner to recover the loaned
amount would be tantamount to unjust enrichment of
respondents, as they may now conveniently evade payment of
their obligation merely on account of a technicality applied
against petitioner.
There is unjust enrichment when (1) a person is unjustly
benefited, and (2) such benefit is derived at the expense of or
with damages to another. This doctrine simply means that a
person shall not be allowed to profit or enrich himself
inequitably at another's expense. One condition for invoking
this principle of unjust enrichment is that the aggrieved party
has no other recourse based on contract, quasi-contract,
crime, quasi-delict or any other provision of law.[26]
Court litigations are primarily designed to search for the truth,
and a liberal interpretation and application of the rules which
will give the parties the fullest opportunity to adduce proof is
the best way to ferret out the truth. The dispensation of justice
and vindication of legitimate grievances should not be barred
by technicalities.[27] For reasons of substantial justice and
equity, as the complement of the legal jurisdiction that seeks
to dispense justice where courts of law, through the inflexibility
of their rules and want of power to adapt their judgments to
the special circumstances of cases, are incompetent to do so,
[28] we thus rule, pro hac vice, in favor of petitioner.
WHEREFORE, the petition is GRANTED. Civil Case No. 05-
112452 entitled Anita Cheng v. Spouses William Sy and Tessie
Sy is hereby ordered REINSTATED. No pronouncement as to
costs.
SO ORDERED.
Carolino vs Senga
ADORACION CAROLINO (SPOUSE AND IN
SUBSTITUTION OF THE DECEASED JEREMIAS A.
CAROLINO), PETITIONER, VS. GEN. GENEROSO SENGA,
AS CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES (AFP); BRIG. GEN. FERNANDO ZABAT, AS
CHIEF OF THE AFP FINANCE CENTER; COMMO.
REYNALDO BASILIO, AS CHIEF OF THE AFP-GHQ
MANAGEMENT AND FISCAL OFFICE; AND COMMO.
EMILIO MARAYAG, PENSION AND GRATUITY OFFICER,
PENSION AND GRATUITY MANAGEMENT CENTER, AFP
FINANCE CENTER, RESPONDENTS.
PERALTA, J.:
Before us is a petition for review under Rule 45 seeking to
reverse and set aside the Decision[1] dated May 25, 2009 of the
Court of Appeals (CA) in CA-G.R. SP No. 103502 and the
Resolution[2] dated September 10, 2009 denying
reconsideration thereof.
The factual and legal antecedents are as follows:
On December 1, 1976, Jeremias A. Carolino, petitioner's
husband, retired[3] from the Armed Forces of the Philippines
(AFP) with the rank of Colonel under General Order No. 1208
dated November 29, 1976, pursuant to the provisions of
Sections 1(A) and 10 of Republic Act (RA) No. 340,[4] as
amended. He started receiving his monthly retirement pay in
the amount of P18,315.00 in December 1976 until the same
was withheld by respondents in March 2005. On June 3, 2005,
Jeremias wrote a letter[5] addressed to the AFP Chief of Staff
asking for the reasons of the withholding of his retirement pay.
Page 29 of 304
In a letter reply,[6] Myrna F. Villaruz, LTC (FS) PA, Pension and
Gratuity Officer of the AFP Finance Center, informed Jeremias
that his loss of Filipino citizenship caused the deletion of his
name in the alpha list of the AFP Pensioners' Payroll effective
March 5, 2005; and that he could avail of re-entitlement to his
retirement benefits and the restoration of his name in the AFP
Pensioners' Masterlist Payroll by complying with the
requirements prescribed under RA No. 9225, or the Dual
Citizenship Act.
 
It appeared that the termination of Jeremias' pension was
done pursuant to Disposition Form[7] dated October 29, 2004,
which was approved by the Chief of Staff and made effective in
January 2005. In the said Disposition Form, the AFP Judge
Advocate General opined that under the provisions of Sections
4, 5, and 6 of RA No. 340, retired military personnel are
disqualified from receiving pension benefits once incapable to
render military service as a result of his having sworn
allegiance to a foreign country. It was also mentioned that
termination of retirement benefits of pensioner of the AFP
could be done pursuant to the provisions of Presidential Decree
(PD) No. 1638[8]which provides that the name of a retiree
who loses his Filipino citizenship shall be removed from the
retired list and his retirement benefits terminated upon such
loss. It being in consonance with the policy consideration that
all retirement laws inconsistent with the provisions of PD No.
1638 are repealed and modified accordingly.
 
On August 24, 2006, Jeremias filed with the Regional Trial
Court (RTC) of Quezon City, a Petition for Mandamus [9] against
Gen. Generoso Senga, as Chief of Staff of the AFP, Brig. Gen.
Fernando Zabat, as Chief of the AFP Finance Center, Comm.
Reynaldo Basilio, as Chief of the AFP-GHQ Management and
Fiscal Office, and Comm. Emilio Marayag, Pension and Gratuity
Management Officer, Pension and Gratuity Management
Center, AFP Finance Center, seeking reinstatement of his name
in the list of the AFP retired officers, resumption of payment of
his retirement benefits under RA No. 340, and the
reimbursement of all his retirement pay and benefits which
accrued from March 5, 2005 up to the time his name is
reinstated and, thereafter, with claim for damages and
attorney's fees. The case was docketed as Civil Case No. Q-06-
58686, and raffled off to Branch 220.
On February 26, 2007, the RTC rendered its
Decision[10] granting the petition for mandamus, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered ordering General
Hermogenes Esperon, Jr., as Chief of Staff of the AFP,
Brigadier General Fernando Zabat, as the Commanding Officer
of the AFP Finance Center, Commodore Reynaldo Basilio, as
Chief of the AFP-GFIQ Management and Fiscal Office, and
Captain Theresa M. Nicdao, as Pension and Gratuity Officer of
the Pension and Gratuity Management Center, or any of their
respective successors and those taking instructions from them
as agents or subordinates, to:
a. immediately reinstate the name of petitioner in the list of
retired AFP Officers, and to resume payment of his retirement
benefits under RA 340; and
b. release to [petitioner] all retirement benefits due him under
RA 340 which accrued to him from March 2005 continuously up
to the time his name is reinstated in the list of AFP retired
officers.[11]
The RTC found that the issue for resolution is the applicability
of RA No. 340 and PD No. 1638 upon Jeremias' retirement
benefits. It found that he retired as a commissioned officer of
the AFP in 1976; thus, RA No. 340 is the law applicable in
determining his entitlement to his retirement benefits and not
PD No. 1638 which was issued only in 1979. Article 4 of the
Civil Code provides that "laws shall have no retroactive effect
unless the contrary is provided." PD No. 1638 does not provide
for such retroactive application. Also, it could not have been
the intendment of PD No. 1638 to deprive its loyal soldiers of a
monthly pension during their old age especially where, as here,
the right had been vested to them through time. RA No. 340
does not provide that the loss of Filipino citizenship would
terminate one's retirement benefits; and that PD No. 1638
does not reduce whatever benefits that any person has already
been receiving under existing law.
 
Respondents sought reconsideration,[12]  but the RTC denied
the same in an Order[13] dated May 25, 2007, the decretal
portion of which reads:
WHEREFORE, premises considered, the instant Motion for
Reconsideration is hereby DENIED, considering that the
questioned decision has not yet attained. Its finality. The
Motion for Execution in the meantime is hereby DENIED.[14]
Aggrieved, respondents elevated the case to the CA. After the
submission of the parties' respective memoranda, the case was
submitted for decision.
Page 30 of 304
Jeremias died on September 30, 2007[15] and was substituted
by his wife, herein petitioner.
On May 25, 2009, the CA granted respondents' appeal. The
dispositive portion of the CA decision reads:
WHEREFORE, premises considered, the instant appeal
is GRANTED. The appealed decision
is REVOKED and SET ASIDE.[16]
In so ruling, the CA found that while it is true that Jeremias
retired in 1976 under the provisions of RA No. 340, as
amended, which does not contain any provision anent
cessation or loss of retirement benefits upon acquiring another
citizenship, PD No. 1638, which was signed in 1979, effectively
repealed RA No. 340, as amended. Section 27 of PD No. 1638,
which provides that the name of a retiree who loses his Filipino
citizenship shall be removed from the retired list and his
retirement benefits terminated upon such loss, was correctly
made applicable to Jeremias' retirement benefits. Logic
dictates that since Jeremias had already renounced his
allegiance to the Philippines, he cannot now be compelled by
the State to render active service and to render compulsory
military service when the need arises. The CA found that for
the writ of mandamus to lie, it is essential that Jeremias should
have a clear legal right to the thing demanded and it must be
the imperative duty of respondents to perform the act required
which petitioner failed to show; thus, mandamus will not lie.
Petitioner's motion for reconsideration was denied in a
Resolution dated September 10, 2009.
Hence, this petition raising the following:
RESPONDENT COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN RENDERING THE ASSAILED DECISION
AND RESOLUTION WHICH SET ASIDE AND REVERSED THE 26
FEBRUARY 2007 DECISION OF THE QC RTC BECAUSE:
PD 1638 should not have been applied and cannot be used
against petitioner as her husband's retirement and pension
were granted to him by the AFP under RA 340 which was not
superseded by PD 1638, a later statute.
 
Petitioner correctly availed of the remedy of mandamus to
compel the reinstatement of his pension and benefits from the
AFP under RA 340 as PD 1638 was not applicable to him.
Petitioner contends that her husband's retirement from the
active service in 1976 was pursuant to the provisions of RA No.
No. 340 as PD No. 1638 was not yet in existence then, and
there was nothing in RA No. 340 that disqualifies a retired
military personnel from receiving retirement benefits after
acquiring foreign citizenship. The concept of retirement
benefits is such that one is entitled to them for services already
rendered and not for those to be made at a future time.
Retirement benefits due petitioner's husband under RA No.
340, is an acquired right which cannot be taken away by a
subsequent law. PD No. 1638 does not expressly provide for its
retroactive application. Respondents, being officers of the AFP
tasked to implement the provisions of RA No. 340 have
neglected their function thereunder by delisting petitioner's
husband as a retiree, thus, mandamus is proper.
In his Comment, the Solicitor General argues that PD No. 1638
applies to all military personnel in the service of the AFP
whether active or retired; hence, it applies retroactively to
petitioner's husband. Even when a retiree is no longer in the
active service, his being a Filipino still makes him a part of the
Citizen Armed Forces; that whether a military personnel retires
under the provisions of RA No. 340 or under PD No. 1638, he
is still in the service of the military and/or the State only that
he is retired, thus, they should not be treated differently upon
the loss of Filipino citizenship. He argues when there is an
irreconcilable conflict between the two laws of different
vintages, i.e., RA No. 340 and PD No. 1638, the latter
enactment prevails.
The Solicitor General argues that mandamus will not issue to
enforce a right to compel compliance with a duty which is
questionable or over which a substantial doubt exists. In this
case, petitioner's husband does not have a well-defined, clear
and certain legal right to continuously receive retirement
benefits after becoming an American citizen. Likewise, the AFP
does not have a clear and imperative duty to grant the said
benefits considering that Section 27 of PD No. 1638 provides
that the name of a retiree who loses his Filipino citizenship
shall be removed from the retired list and his retirement
benefits terminated upon such loss.
 
Petitioner filed her reply thereto. We find merit in the petition.
Page 31 of 304
Petitioner's husband retired in 1976 under RA No. 340. He was
already receiving his monthly retirement benefit in the amount
of P18,315.00 since December 1976 until it was terminated in
March 2005. Section 5, RA No. 340 provides:
Sec. 5. Officers and enlisted men placed in the retired list shall
be subject to the rules and articles of war and to trial by court-
martial for any breach thereof. At any time said officers and
enlisted men may be called to active service by the President.
Refusal on the part of any officer or enlisted man to perform
such services shall terminate his right to further participation in
the benefits of this Act provided he resides in the Philippines
and is physically fit for service. Such fitness for service shall be
determined by applicable regulations.
The afore-quoted provision clearly shows how a retiree's
retirement benefits may be terminated, i.e., when the retiree
refuses to perform active service when called to do so provided
that (1) the retiree resides in the Philippines and (2) is
physically fit for service. There is no other requirement found
in the law which would be the reason for the termination of a
retiree's retirement benefits. Petitioner's husband was never
called to perform active service and refused to do so, however,
his retirement benefit was terminated. The reason for such
termination was his loss of Filipino citizenship based on Section
27 of PD No. 1638, to wit:
Section 27. Military personnel retired under Sections 4,
5, 10, 11 and 12 shall be carried in the retired list of the
Armed Forces of the Philippines. The name of a retiree who
loses his Filipino citizenship shall be removed from the retired
list and his retirement benefits terminated upon such loss.
We find that the CA erred in applying PD No. 1638 to the
retirement benefits of petitioner's husband.
 
Firstly, PD No. 1638 was signed by then President Ferdinand
Marcos on September 10, 1979. Under Article 4 of the Civil
Code, it is provided that laws shall have no retroactive effect,
unless the contrary is provided. It is said that the law looks to
the future only and has no retroactive effect unless the
legislator may have formally given that effect to some legal
provisions;[17] that all statutes are to be construed as having
only prospective operation, unless the purpose and intention of
the legislature to give them a retrospective effect is expressly
declared or is necessarily implied from the language used; and
that every case of doubt must be resolved against
retrospective effect.[18] These principles also apply to
amendments of statutes.
PD No. 1638 does not contain any provision regarding its
retroactive application, nor the same may be implied from its
language. In fact, Section 36 of PD No. 1638 clearly provides
that the decree shall take effect upon its approval. As held in
Parreno v. COA,[19] there is no question that PD No. 1638, as
amended, applies prospectively. Since PD No. 1638, as
amended, is about the new system of retirement and
separation from service of military personnel, it should apply to
those who were in the service at the time of its approval.
[20]
 Conversely, PD No. 1638 is not applicable to those who
retired before its effectivity in 1979. The rule is familiar that
after an act is amended, the original act continues to be in
force with regard to all rights that had accrued prior to such
amendment.[21]
Moreover, Section 27 of PD No. 1638 specifically provides for
the retirees to whom the law shall be applied, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10,
11 and 12 shall be carried in the retired list of the Armed
Forces of the Philippines. The name of a retiree who loses his
Filipino citizenship shall be removed from the retired list and
his retirement benefits terminated upon such loss, (emphasis
supplied)
Notably, petitioner's husband did not retire under those above-
enumerated Sections of PD No. 1638 as he retired under RA
No. 340.
Secondly, it has been held that before a right to retirement
benefits or pension vests in an employee, he must have met
the stated conditions of eligibility with respect to the nature of
employment, age, and length of service.[22] Undeniably,
petitioner's husband had complied with the conditions of
eligibility to retirement benefits as he was then receiving his
retirement benefits on a monthly basis until it was terminated.
Where the employee retires and meets the eligibility
requirements, he acquires a vested right to the benefits that is
protected by the due process clause.[23] It is only upon
retirement that military personnel acquire a vested right to
retirement benefits.[24] Retirees enjoy a protected property
interest whenever they acquire a right to immediate payment
under pre-existing law.[25]
 
In Ayog v. Cusi,[26] we expounded the nature of a vested right,
thus:
"A right is vested when the right to enjoyment has become the
Page 32 of 304
property of some particular person or persons as a present
interest" (16 C.J.S. 1173). It is "the privilege to enjoy property
legally vested, to enforce contracts, and enjoy the rights of
property conferred by the existing law" (12 C.J.S. 955, Note
46, No. 6) or "some right or interest in property which has
become fixed and established and is no longer open to doubt
or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in
Balboa vs. Farrales, 51 Phil. 498, 502).
 
The due process clause prohibits the annihilation of vested
rights. "A state may not impair vested rights by legislative
enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the
State, except in a legitimate exercise of the police power" (16
C.J.S. 1177-78).
It has been observed that, generally, the term "vested right"
expresses the concept of present fixed interest, which in right
reason and natural justice should be protected against
arbitrary State action, or an innately just and imperative right
which an enlightened free society, sensitive to inherent and
irrefragable individual rights, cannot deny (16 C.J.S. 1174,
Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs.
Rosenthal, 192 Atl. 2nd 587).[27]
Petitioner's husband acquired vested right to the payment of
his retirement benefits which must be respected and cannot be
affected by the subsequent enactment of PD No. 1638 which
provides that loss of Filipino citizenship terminates retirement
benefits. Vested rights include not only legal or equitable title
to the enforcement of a demand, but also an exemption from
new obligations after the right has vested.[28]
 
In fact, Sections 33 and 35 of PD No. 1638 recognize such
vested right, to wit:
Section 33. Nothing in this Decree shall be construed in any
manner to reduce whatever retirement and separation pay or
gratuity or other monetary benefits which any person is
heretofore receiving or is entitled to receive under the
provisions of existing law.
xxxx
Section. 35. Except those necessary to give effect to the
provisions of this Decree and to preserve the rights granted to
retired or separated military personnel, all laws, rules and
regulations inconsistent with the provisions of this Decree are
hereby repealed or modified accordingly.
Section 33 of PD No. 1638 is clear that the law has no
intention to reduce or to revoke whatever retirement benefits
being enjoyed by a retiree at the time of its passage. Hence,
Section 35 provides for an exception to what the decree
repealed or modified, i.e., except those necessary to preserve
the rights granted to retired or separated military personnel.
 
We also find that the CA erred in finding that mandamus will
not lie.
Section 3, Rule 65 of the Rules of Court lay down under what
circumstances petition for mandamus may be filed, to wit:
SEC. 3. Petition for mandamus. - When any tribunal,
corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station, or unlawfully
excludes another from the use and enjoyment of a right or
office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of
law, the person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying
that judgment be rendered commanding the respondent,
immediately or at some other time to be specified by the court,
to do the act required to be done to protect the rights of the
petitioner, and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the respondent.
A writ of mandamus can be issued only when petitioner's legal
right to the performance of a particular act which is sought to
be compelled is clear and complete. A clear legal right is a
right which is indubitably granted by law or is inferable as a
matter of law.[29] A doctrine well-embedded in our
jurisprudence is that mandamus will issue only when the
petitioner has a clear legal right to the performance of the act
sought to be compelled and the respondent has an imperative
duty to perform the same.[30] The remedy of mandamus lies to
compel the performance of a ministerial duty.[31] A purely
ministerial act or duty is one that an officer or tribunal
performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard
to or the exercise of its own judgment upon the propriety or
impropriety of the act done.[32] If the law imposes a duty upon
a public officer, and gives him the right to decide how or when
the duty shall be performed, such duty is discretionary and not
ministerial.[33]
Page 33 of 304
 
The petition for mandamus filed by petitioner's husband with
the RTC was for the payment of his terminated retirement
benefits, which has become vested, and being a ministerial
duty on the part of the respondents to pay such claim,
mandamus is the proper remedy to compel such payment.
The doctrine of exhaustion of administrative remedies calls for
resort first to the appropriate administrative authorities in the
resolution of a controversy falling under their jurisdiction
before the same may be elevated to the courts of justice for
review.[34] However, the principle of exhaustion of
administrative remedies need not be adhered to when the
question is purely legal.[35] This is because issues of law cannot
be resolved with finality by the administrative officer. [36] Appeal
to the administrative officer would only be an exercise in
futility.[37] Here, the question raised is purely legal, i.e., what
law should be applied in the payment of retirement benefits of
petitioner's husband. Thus, there was no need to exhaust all
administrative remedies before a judicial relief can be sought.
 
WHEREFORE, the petition is GRANTED. The Decision dated
May 25, 2009 and the Resolution dated September 10, 2009 of
the Court of Appeals are hereby REVERSED and SET ASIDE.
The Decision dated February 26, 2007 of the Regional Trial
Court of Quezon City, Branch 220, is AFFIRMED.
 
SO ORDERED.
William Kwong vs Diamond Homeowners
LEONEN, J.:
A homeowners' association may regulate passage into a
subdivision for the safety and security of its residents, even if
its roads have already been donated to the local government.
It has the right to set goals for the promotion of safety and
security, peace, comfort, and the general welfare of its
residents.[1]
This Court resolves the Petition for Review on
Certiorari[2] assailing the Court of Appeals' July 5, 2013
Decision[3] and February 12, 2014 Resolution[4] in CA-G.R. SP
No. 115198. The Court of Appeals set aside the Office of the
President's March 24, 2010 Decision[5] and found the "No
Sticker, No ID, No Entry" Policy valid and issued within the
authority of the homeowners' association.
Diamond Subdivision is a residential subdivision in Balibago,
Angeles City, Pampanga with several commercial
establishments operating within it. These establishments
include beer houses, karaoke bars, night clubs, and other
drinking joints.[6]
Because of these, patrons, customers, and many other people
freely come in and out of Diamond Subdivision. Such
unrestricted access to the subdivision, however, also exposed
its residents to incidents of robbery, akyat-bahay, prostitution,
rape, loud music, and noise that would last until the wee hours
of the morning.[7]
Diamond Homeowners & Resident Association (Diamond
Homeowners), the legitimate homeowners' association of
Diamond Subdivision, sought to address the residents' peace
and security issues by raising their concerns to the City Council
of Angeles City (Angeles City Council).[8]
On February 24, 2003, the Angeles City Council issued
Ordinance No. 132,[9] series of 2003, reclassifying Diamond
Subdivision as exclusively residential and prohibited the further
establishment and operation of any business except for those
already existing.[10] The Ordinance states:
 
Whereas, legitimate homeowners of the Diamond Subdivision
have presented to the City Council their serious concern on
what is presently occurring in their subdivision;
Whereas, with the present classification of Diamond
Subdivision constant problems of peace and order have
confronted the homeowners and residents affecting their lives,
property and security;
Whereas, the introduction of business establishments in an
uncontrolled manner have likewise proliferated due to the
current classification of the subdivision;
Whereas, due to the R-2 classification of Diamond Subdivision
the value of property have not increase[d], despite its strategic
location;
Whereas, there is an urgent need to address all the concern[s]
of the homeowners and residents of Diamond Subdivision;
Whereas, the appropriate and immediate solution to the
present concerns is the reclassification of Diamond Subdivision
from Residential 2 to Residential 1 Classification.
Now therefore foregoing considered, the City Council of
Angeles City in session assembled hereby resolved to ordain:
Section 1. An Ordinance reclassifying Diamond Subdivision
Page 34 of 304
located in Balibago, Angeles City from Residential 2 to
Residential 1 Classification status, be as it is hereby, approved.
Section 2. Arayat and S.L. Orosa Streets and the service road
of Diamond Subdivision are exempted from this new
classification.
Section 3. That existing and legitimate business establishments
operating within the territorial boundaries of the said Diamond
Subdivision as of approval of the ordinance shall remain and
continue to operate and no commercial establishment of any
kind shall be allowed thereafter.
Section 4. Unless by hereditary succession no business
establishment rights shall be transferred to any individual or
entity after approval of this ordinance.
Section 5. This Ordinance shall take effect upon its approval. [11]
 
However, this Ordinance was not complied with as more beer
gardens and nightclubs were still put up. The peace, order,
and security situation in the subdivision did not improve.[12]
Among those affected was William G. Kwong (Kwong). A
resident of Diamond Subdivision for more than 38 years, he
runs three (3) motels[13] in the subdivision under his company,
William G. Kwong Management, Inc.[14]
Seeking to address his security concerns, Kwong proposed to
his neighbors that guard posts with telephone lines be set up
at the entry and exit points on the street where he resides to
screen all incoming and outgoing visitors. [15] In an August 3,
2006 Letter, Kwong wrote:
TO THE RESIDENTS OF EMMANUEL STREET
Diamond Subdivision, Balibago
Angeles City
Dear MR/MS _______,
In direct response to a sharp increase in criminal activities in
our subdivision, a number of which have remained unreported,
I would like to ask your approval and cooperation on a number
of proposals, which I outlined below, for our own protection
and safety:
1. To put up security gates on both entry/exit points of
Emmanuel Street.
2. To permanently seal off the proposed gate at Emmanuel
Street corner V.Y. Orosa Street.
3. To engage the services of two security guards to man the
gate 24 hours a day at Emmanuel Street comer Marlim
Avenue.
4. To install a telephone line at the guard's booth to screen all
incoming and outgoing visitors and outsiders. The guard will
have to call the residents for approval before he lets anyone in.
 
With regard to the costs of this project, I am willing to
shoulder the cost of the two security gates and one-half (1/2)
of the monthly security and telephone fees, which amounts to
approximately Nine Thousand Pesos (PhP9,000.00). In support
of this project, I would like to request the residents to shoulder
the remaining one-half (1/2) of the monthly costs of security
and telephone fees, which also amounts to approximately Nine
Thousand Pesos (PhP9,000.0[0]) for 15 household or Six
Hundred Pesos (PhP600.00) a month per household.
It is with the sense of cooperation and solidarity that I ask you
to consider this project for the security and safety of our
family.
Thank you for most (sic) kind attention and understanding.[16]
However, the other residents of Diamond Subdivision also
wanted their security concerns addressed. Thus, to safeguard
the whole subdivision, Diamond Homeowners proposed the
"No Sticker, No ID, No Entry" Policy (the Policy).[17]
Under the Policy, visitors on vehicles who sought to enter the
premises must leave with the subdivision guards their
identification cards, which they may reclaim upon leaving the
subdivision. Visitors on foot were not required to surrender
theirs. Meanwhile, residents with vehicles may obtain stickers
to identify themselves so that they did not need to surrender
any identification card.[18]
After consultations and meetings, the Policy was approved in
December 2006. Diamond Homeowners later issued a
Memorandum to inform residents that the Policy would be
implemented by March 15, 2007.[19]
Kwong, however, contested the Policy.
When Diamond Homeowners did not heed his objection,
Kwong filed before the Housing and Land Use Regulatory
Board Regional Office a Complaint for the issuance of a cease
and desist order with application for a temporary restraining
order. He argued that the Policy was invalid because the
subdivision roads have been donated to the City of Angeles in
1974 and were, thus, public roads that must be open for public
use. Likewise, he contended that the screening of visitors
Page 35 of 304
would be cumbersome for his customers, affecting his
businesses.[20]
Ruling in Kwong's favor, the Housing and Land Use Regulatory
Board Regional Office issued a Cease and Desist Order and a
Temporary Restraining Order. The records were later
forwarded to the Housing and Land Use Regulatory Board
Arbiter for final disposition.[21]
In his August 10, 2007 Decision,[22] the Housing and Land Use
Regulatory Board Arbiter lifted the Cease and Desist Order and
dismissed Kwong's Complaint. He ruled that the Policy's alleged
damage to Kwong's business was "imaginary,
unsubstantiated[,] and hypothetical[.]"[23]
The Arbiter further held that the protection and security of
Diamond Subdivision's residents were the primary and utmost
concern, and must be prioritized over the convenience of motel
patrons.[24] He ruled that the Policy's objective to protect the
community at large was far greater than Kwong's business
concerns.[25]
Upholding the Policy's validity, the Arbiter found that it neither
prohibited nor impaired the use of the roads. Neither did it
change the classification of the roads nor usurp the
government's authority. Moreover, the roads were still for
public use, and the public was still allowed to pass as long as
they presented identification cards. The Arbiter noted that
there was no evidence showing that persons were being
refused access or asked to pay for its use.[26]
On appeal before the Board of Commissioners of the Housing
and Land Use Regulatory Board, the Arbiter's ruling was
reversed. In its September 12, 2008 Decision,[27] the Board of
Commissioners found merit in Kwong's appeal and declared
the Policy void for being "unjustifiable and without legal
basis."[28]
In subjecting the subdivision roads to the Policy, the Board of
Commissioners found that they were turned into private roads-
inaccessible, not open to the public, and under the control of
Diamond Homeowners. It also ruled that Kwong and William G.
Kwong Management, Inc. have already acquired a vested right
to unrestricted passage through the subdivision roads since
1974 because they owned the subdivision lots and because the
public use of the roads is guaranteed by law. It found that to
limit or impose pecuniary conditions for their enjoyment over
the roads violates the roads' public character.[29]
The Board of Commissioners also ruled that the Policy must be
justified by an issue so serious and overwhelming that it is
prioritized over the lot owners' rights. Diamond Homeowners, it
fmmd, failed to present evidence of peace and security issues
within the subdivision.[30]
The Office of the President, in its March 24, 2010 Decision,
[31]
 affirmed the Board of Commissioners' Decision in toto. It
noted that the factual findings of the Housing and Land Use
Regulatory Board, as the administrative agency with the
technical expertise on the matter, were entitled to great
respect.[32]
Hence, Diamond Homeowners elevated the case to the Court
of Appeals via a Petition for Review. [33]
In its July 5, 2013 Decision,[34] the Court of Appeals granted
Diamond Homeowners' Petition and set aside the Office of the
President's Decision.[35] It found that Diamond Homeowners
was authorized in enacting the Policy.[36]
The Court of Appeals ruled that while the local government
acquires ownership rights, these rights should be harmonized
with the interests of homeowners who invested life savings in
exchange for special amenities, comfort, and tighter security,
which non-subdivisions did not offer.[37]
The Court of Appeals found that the State recognized this
interest in Presidential Decree No. 957, as amended by
Presidential Decree No. 1216, and recently in Republic Act No.
9904, or the Magna Carta for Homeowners and Homeowners'
Associations.[38]
The Court of Appeals noted that Presidential Decree No. 957,
as amended by Presidential Decree No. 1216, required the
donation of subdivision roads to the local government. While
the issuance was silent on regulating access to subdivision
roads, it found that the requirement was imposed to benefit
homeowners, amid subdivision developers who tended to fail
in maintaining the upkeep of subdivision roads, alleys, and
sidewalks.[39] It cited Albon. v. Fernando,[40] which explained
that subdivision owners or developers were relieved of
maintaining roads and open spaces once they have been
donated to the local government.[41]
Likewise, the Court of Appeals noted the Magna Carta for
Homeowners and Homeowners' Associations, under which
homeowners were given the: right to organize to protect and
promote their mutual benefits and the power to create rules
necessary to regulate and operate the subdivision facilities.
[42]
 Section 10(d) provided homeowners' associations the right
to regulate access to and passage through the subdivision
roads to preserve privacy, tranquility, internal security, safety,
and traffic order.[43]
The Court of Appeals further noted that the law did not
distinguish between roads donated to the local government
and those retained by the subdivision owners or developers.
This showed that while the local government had ownership of
subdivision roads, homeowners' associations maintained their
enjoyment, possession, and management.[44]
Page 36 of 304

Likewise, the Court of Appeals held that the Policy was
reasonably exercised.[45] It ruled that Ordinance No. 132 was
sufficient to show that Diamond Subdivision was encountering
peace, order, and security problems, as it explicitly stated that
the subdivision was confronted with such issues affecting the
residents and homeowners. As a public document, it is prima
facie evidence of facts stated in it.[46] The Court of Appeals
further found that the City of Angeles would not have
approved Ordinance No. 132 had it not been substantiated by
these facts.[47]
Moreover, the Court of Appeals held the Policy reasonable
because its purpose was to secure and ensure the peace,
safety, and security of homeowners and residents. It found
that not only was the Policy supported by 314 Diamond
Homeowners members, but that only Kwong opposed it, and
he himself recognized the security concerns when he had
proposed to set up gates at the entry and exit points on the
street where he resides.[48]
The Court of Appeals further found that even if Kwong's
proprietary rights may be affected, it is still his duty as a
Diamond Homeowners member to support and participate in
the association's projects. Likewise, it held that his personal
interests may be limited for the promotion of the association's
goals for the community at large.[49]
The dispositive portion of the Decision read:
WHEREFORE, premises considered, the instant petition
is GRANTED. The Decision of the Office of the President
dated March 24, 2010 and its Order dated June 10, 2010 are
hereby SET ASIDE. Accordingly, the complaint for the
issuance of a cease and desist order plus damages with
application for temporary restraining order filed before the
House (sic) and Land Use Regulatory Board Region III is
hereby DISMISSED.
SO ORDERED.[50] (Emphasis in the original)
The Court of Appeals denied Kwong's Motion for
Reconsideration in its February 12, 2014 Resolution. [51]
Hence, Kwong and William G. Kwong Management, Inc. filed
this Petition.[52]
Diamond Homeowners filed a Comment[53] and, in turn,
petitioners filed their Reply.[54]
The parties later submitted their respective Memoranda. [55]
Petitioners insist that the Policy is invalid.
They assert that the subdivision roads are public roads for
public use, and outside the commerce of man, having been
donated to the Angeles City government since 1974. [56] They
maintain that access to and use of Diamond Subdivision roads
should be open to the general public, not limited to privileged
individuals.[57] They point out that these roads cannot be
alienated, leased, be the subject of contracts, be acquired by
prescription, be subjected to attachment and execution, be
burdened by any voluntary easement, or be under the control
of private persons or entities, including homeowners'
associations.[58]
Petitioners further argue that the Policy is an unauthorized
restriction on the use of public roads as it unduly converts
them to private roads, hinders their accessibility from the
public, and subjects them under the exclusive control of
Diamond Homeowners.[59]
Petitioners insist that it is the City of Angeles that has the
power to control and regulate the use of roads. [60] As such,
they argue that Diamond Homeowners should have had the
city government address its concerns.[61]
Petitioners contend that the Local Government Code has
conferred local government units with the authority to regulate
the use of public roads and ensure protection and promotion of
public welfare,[62] well before the Magna Carta for Homeowners
and Homeowners' Associations was enacted. [63]
Petitioners claim that the local governments' power to regulate
roads cannot be exercised by a private entity. To do so would
be a usurpation of the local government's authority, and an
illegal abdication of power on the part of the latter. Thus, they
posit that, to their and the public's prejudice, the Policy
disregards the primary right, power, and authority of the City
of Angeles to regulate the use of the public roads. [64]
Petitioners further insist that nothing in Presidential Decree
Nos. 957 and 1216 or in Albon, which the Court of Appeals
relied on, gives homeowners' associations the authority to
regulate the use of subdivision roads that have already been
donated to the local government.[65]
Petitioners also contend that since the Policy was issued before
the Magna Carta for Homeowners and Homeowners'
Associations, it should not apply retroactively. [66] In any case,
they assert that the law did not give homeowners' associations
absolute and unbridled power to regulate the use of
subdivision roads. They cite Section 10(d), which lists the
requisites that limit a homeowners' association's rights and
powers,[67] showing that its power is merely delegated and
conditional. A homeowners' association cannot arrogate unto
itself the power to issue the Policy or limit or prevent the free
Page 37 of 304
use of public roads without complying with the law's requisites,
as it would be ultra vires.[68]
Petitioners point out that because respondent failed to comply
with the requisites under Section 10(d), [69] it violated the law.
[70]
 They claim that the required public consultations must
include the general public who use the public road, and should
not be limited to the subdivision residents or the homeowners'
association members. They argue that it should be done the
same way public hearings are conducted by the Sangguniang
Panlungsod before the enactment of an ordinance or
resolution.[71]
Petitioners further allege that no authority from or
memorandum of agreement with the City of Angeles was
obtained. They maintain that Ordinance No. 132 cannot be
treated as the required memorandum of agreement because it
made no mention of the Policy. They argue that a separate
ordinance is necessary to comply with the requirements. [72]
Petitioners further allege that while Ordinance No. 132
reclassified Diamond Subdivision as exclusively residential, it
still expressly exempted Arayat and S.L. Orosa Streets and the
service road from the classification. The ordinance, they point
out, also recognized that the existing businesses have acquired
a vested right to operate within the subdivision as it allowed
them to continue their operations.[73]
Petitioners also cite Sections 2 and 18 of the Magna Carta for
Homeowners and Homeowners' Associations, which provide
that homeowners' associations are encouraged to actively
cooperate with the local government unit to pursue common
goals and provide vital and basic services. They claim that to
perform this mandate, the homeowners' association should not
disregard the law that gives them the power to regulate roads.
[74]
Petitioners contend that if the provisions of the Local
Government Code and the Magna Carta for Homeowners and
Homeowners' Associations were to be harmonized, it is the
local government unit that has the primary right and power to
regulate the use of the public roads. Homeowners' associations
only have limited, delegated power, which may only be
exercised upon compliance with the conditions in the law.[75]
Moreover, petitioners deny that there are security concerns
within the subdivision. They claim that the Policy was enacted
based on a speculative, conjectural, and negative exaggeration
of the actual situation, as there is no single evidence of an
actual crime committed.[76] Likewise, they submit that
Ordinance No. 132 cannot be considered as competent
evidence of the alleged criminality in the subdivision.[77]
Finally, petitioners argue that the Housing and Land Use
Regulatory Board has the technical expertise and special
competence on matters involving the business of developing
subdivisions and condominiums. Thus, its factual findings
should be respected.[78]
On the other hand, respondent insists that the Policy is valid.
In its Memorandum, respondent asserts it has the right and
authority to issue the Policy under Section 10(d) of the Magna
Carta for Homeowners and Homeowners' Associations. It
insists that it issued the Policy to preserve "privacy,
tranqui[l]ity, internal security[,] safety[,] and traffic order." [79]
Respondent further cites Section 30 of Presidential Decree No.
957, which mandates subdivision associations to promote and
protect the mutual interests of homeowners, and Section 5 of
the Rules on Registration and Supervision of Homeowners
Association, which empowers homeowners' associations to
adopt rules and regulations, and to exercise other powers
necessary to govern and operate the association. It argues
that this right and authority applies even if the subdivision
roads have been donated to the local government.[80]
Respondent points out that it issued the Policy to only regulate
the use of roads and streets inside Diamond Subdivision. It
neither recategorized them as private property nor exercised
acts of private ownership over them. It emphasizes that the
roads are still public roads, open for public use. [81]
Respondent claims that subdivision owners were required to
donate their roads to the local government primarily to protect
and benefit the residents themselves, as some developers
would lose interest in maintaining the subdivision's upkeep.
[82]
 They claim that no law puts the exclusive authority to
control, dispose, and enjoy the roads to local government
units, to the exclusion of the homeowners, especially since the
donation was intended for the latter's benefit. Moreover, no
law denies associations their right to regulate open spaces and
roads within their subdivisions.[83]
Respondent argues that the Court of Appeals correctly ruled
that while the local government units own the lots, their
enjoyment, possession, and management are retained by the
homeowners and their association.[84]
Respondent further asserts that there was a valid reason for
the Policy's adoption.[85] It was not a whimsical exercise of
authority to exclude the public from using the roads, but an
effort to attain peace and order within the subdivision. [86]
Respondent emphasizes that the Policy was applied because
the public's uncontrolled and unrestricted passage into the
subdivision has made crimes rampant within it. It asserts that
the situation has caused its residents fear, discomfort, and
disquiet.[87]
Page 38 of 304
Respondent argues that while the Angeles City Council
recognized issues of peace and order in Ordinance No. 132,
[88]
 its intervention was not sufficient to abate the recurring
crimes.[89]
Respondent narrates that after the residents of the subdivision
clamored for action, it studied and sought advice from other
subdivisions in Angeles City that implemented the same Policy,
as they had minimal security problems within their subdivision.
Respondent alleges that when the Policy was approved by 314
legitimate residents[90] and implemented, the crimes decreased
as it was able to deter lawless elements.[91] Thus, the Policy
has improved the peace and order of the subdivision. [92]
Respondent points out that only petitioner Kwong questioned
the policy, even if he recognized the crime and disorder issue
himself. It points out that prior to the Policy, he was willing to
shoulder the cost of putting up security gates on both the
entry and exit points of the street where he resides to prohibit
by-passers.[93] He even sought to block those who do not live
on his street, whether or not the person was a Diamond
Subdivision resident.[94] It is, therefore, contradictory for him to
oppose the more reasonable solution of implementing the
Policy in the entire subdivision.[95]
Respondent, thus, claims that it is actually working hand in
hand with the City of Angeles in protecting the lives, property,
and security of its residents from lawless elements. [102]
Lastly, respondent denies that the Court of Appeals
disregarded the special competence of the lower administrative
bodies. It points out that the Housing and Land Use Regulatory
Board Arbiter even ruled in its favor and found the Policy to be
justified.[103]
This Court resolves the following issues:
First, whether or not the factual findings of the Housing and
Land Use Regulatory Board are entitled to respect;
Second, whether or not the security concerns within Diamond
Subdivision were established; and
Finally, whether or not respondent Diamond Homeowners &
Residents Association was authorized in issuing the "No
Sticker, No ID, No Entry" Policy despite the roads having been
donated to the local government.
This Court denies the Petition.

Respondent further argues that under the Magna Carta for  

Homeowners and Homeowners' Associations, subdivision
I
residents are duty bound to support and participate in the
association's projects and activities, especially if the project is
supported by 314 members, with petitioner Kwong as the only
Petitioners argue that the factual findings of the Housing and
opposition.[96]
Land Use Regulatory Board should be respected as it is the
agency with the technical know-how on matters involving the
Respondent further maintains that every person's right to life,
development of subdivisions.[104] Respondent, however, denies
property, and security is constitutionally protected. The Policy,
that the agency's special competence was disregarded,
thus, is a reasonable means to ensure that these rights are
pointing out that even the Housing and Land Use Regulatory
guarded, especially since the local police were unable to stop
Board Regional Office found that the Policy was justified. [105]
the threats to it.[97]
Petitioners are correct that the factual findings of
Respondent further posits that petitioner Kwong's ownership
administrative agencies with special competence should be
and personal or business interests may be limited for the
respected if supported by substantial evidence.[106] However,
interests of the community at large. Such interests cannot
this Court finds that the Housing and Land Use Regulatory
defeat the association's right to regulate and administer the
Board's findings were not disregarded.
use of the roads inside the subdivision, in accordance with
existing laws and regulations, and for the welfare of the
To begin with, the proper procedure was followed. The matter
homeowners and residents of Diamond Subdivision.[98]
was brought before the Housing and Land Use Regulatory
Board, which exercised jurisdiction and ruled on the merits of
Respondent asserts that entry to the subdivision was not
the case. The appellate process then took place from the
confined to privileged individuals, and that it exercised no
Housing and Land Use Regulatory Board Arbiter to the Board
discrimination in the Policy's implementation. [99] The
of Commissioners, to the Office of the President, to the Court
regulations, it alleges, were not so rigid as to make it difficult
of Appeals, and now, to this Court.
for the riding public to comply with.[100] It further points out
that the roads within Diamond Subdivision are not the main
However, because the factual findings of the Housing and Land
entry and exit points to the highway or main roads of Angeles
Use Regulatory Board Arbiter and the Board of Commissioners
City.[101]
are conflicting, they cannot be deemed conclusive as to
preclude any examination on appeal.

Page 39 of 304

On one hand, the Arbiter found that the Policy did not prohibit
or impair the use of the roads.[107] He noted that there was no
evidence showing that persons were being refused access or
asked to pay for its use.[108] He also found no evidence of any
damage to petitioners' business. He lent credence to
respondent's allegation that there was a need for the
protection and security of its residents, which must be
prioritized over the convenience of motel patrons. [109] These
findings were affirmed by the Court of Appeals.
petitioner's main and reply briefs are not disputed by the
respondents; and (10) The finding of fact of the Court of
Appeals is premised on the supposed absence of evidence and
is contradicted by the evidence on record.
 
These exceptions similarly apply in petitions for review filed
before this Court involving civil, labor, tax, or criminal cases.
[112]
 (Emphasis supplied, citations omitted)

On the other hand, the Board of Commissioners and the Office

Since the findings of the lower tribunals are cont1icting as to
of the President ruled that there was no evidence of peace and
whether there were security concerns within Diamond
security issues within Diamond Subdivision. It held that
Subdivision that would warrant the issuance of the Policy, this
subjecting the subdivision roads to the Policy converts them to
Court may exercise its discretion to resolve this factual issue.
private roads, which are inaccessible, not open to the public,
and under respondent's control.[110]  

Since the factual findings are conflicting, they cannot be II

deemed conclusive as to preclude any examination on appeal
and, therefore, cannot bind this Court. As such, this Court may
determine what is more consistent with the evidence on The case records reveal that Diamond Subdivision was
record. While only questions of law may be raised in Rule 45 experiencing security concerns.
petitions, this rule is not without exceptions. In Spouses Miano
v. Manila Electric Company:[111] In Ordinance No. 132, the Angeles City Council acknowledged
that Diamond Subdivision had been having security problems
that seriously affected the homeowners and residents. The
The Rules of Court states that a review of appeals filed before whereas clauses state:
this Court is "not a matter of right, but of sound judicial
discretion." The Rules of Court further requires that only  
questions of law should be raised in petitions filed under Rule
Whereas, legitimate homeowners of the Diamond Subdivision
45 since factual questions are not the proper subject of an
have presented to the City Council their serious concern on
appeal by certiorari. It is not this Court's function to once again
what is presently occurring in their subdivision;
analyze or weigh evidence that has already been considered in
the lower courts.
Whereas, with the present classification of Diamond
Subdivision constant problems of peace and order have
....
confronted the homeowners and residents affecting their lives,
property and security;
However, the general rule for petitions filed under Rule 45
admits exceptions. Medina v. Mayor Asistio, Jr. lists down the
Whereas, the introduction of business establishments in an
recognized exceptions:
uncontrolled manner have likewise proliferated due to the
  current classification of the subdivision;

(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures; (2) When the inference
made is manifestly mistaken, absurd or impossible; (3) Where
there is a grave abuse of discretion; (4) When the judgment is
based on a misapprehension of facts; (5) When the findings of
fact are conflicting; (6) When the Court of Appeals, in making
its findings, went beyond the issues of the case and the same
is contrary to the admissions of both appellant and appellee:,
(7) The findings of the Court of Appeals are contrary to those
of the trial court; (8) When the findings of fact are conclusions
without citation of specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the
Whereas, due to the R-2 classification of Diamond Subdivision
the value of property have not increase[d], despite its strategic
location;
Whereas, there is an urgent need to address all the concern[s]
of the homeowners and residents of Diamond Subdivision[.]
[113]
 (Emphasis supplied)
 
Ordinance No. 132 explicitly states that "with the present
classification of Diamond Subdivision[,] constant problems of

Page 40 of 304
peace and order have confronted the homeowners and
residents affecting their lives, property[,] and security." [114]
Ordinan4e No. 132 is a public document. Under Rule 132,
Section 19(a) of the Rules of Court, written official acts of the
sovereign authority, official bodies and tribunals, and public
officers of the Philippines are public documents. The provision
states:
SECTION 19. Classes of documents. - For the purpose of
their presentation in evidence, documents are either public or
private.
Public documents are:
(a) The written official acts, or records of the official acts of
the sovereign authority, official bodies and tribunals, and
public officers, whether of the Philippines, or of a foreign
country;
(b) Documents acknowledged before a notary public except
last wills and testaments; and
(c) Public records, kept in the Philippines, of private documents
required by law to be entered therein.
All other writings are private.
Public documents are prima facie evidence of the facts stated
m them.[115] Rule 132, Section 23 of the Rules of Court
provides:
 
SECTION 23. Public documents as
evidence. - Documents consisting of entries in public records
made in the performance of a duty by a public officer
are prima facie evidence of the facts therein stated. All other
public documents are evidence, even against a third person, of
the fact which gave rise to their execution and of the date of
the latter.
 
Thus, there is prima facie evidence of the security and safety
issues within Diamond Subdivision.
Besides, these security concerns were affirmed by petitioner
Kwong himself. In his August 3, 2006 Letter, he acknowledged
that there was a "sharp increase in criminal activities" in
Diamond Subdivision, "a number of which remain[ed]
unreported."[116] He also proposed to shoulder the costs of
putting up security gates on both entry and exit points of the
street where he resides, and the hiring of security guards to
screen incoming and outgoing visitors.[117] These constitute
admissions, or declarations "as to a relevant fact that may be
given in evidence against him."[118]
Petitioner Kwong presented no evidence to counter these
documents. Thus, this Court affirms that Diamond Subdivision
was experiencing security concerns.
III
Diamond Subdivision was, likewise, authorized m enacting the
Policy.
There is no question that the subdivision roads have been
donated to the City of Angeles.[119] Therefore, they are public
property, for public use.
According to the Deed of Donation,[120] the donation was done
in compliance with Resolution No. 162, series of 1974, of the
Municipal Board of Angeles City.[121]
This donation is consistent with Section 31 of Presidential
Decree No. 957, or the Subdivision and Condominium Buyers'
Protection Decree. The provision states:
SECTION 31. Donation of Roads and Open Spaces to
Local Government. -The registered owner or developer of
the subdivision or condominium project, upon completion of
the development of said project may, at his option, convey by
way of donation the roads and open spaces found within the
project to the city or municipality wherein the project is
located. Upon acceptance of the donation by the city or
municipality concerned, no portion of the area donated shall
thereafter be converted to any other purpose or purposes
unless after hearing, the proposed conversion is approved by
the Authority.
 
On October 14, 1977, Presidential Decree No. 957 was
amended by Presidential Decree No. 1216, which made the
donation to the local government unit mandatory:
SECTION 2. Section 31 of Presidential Decree No. 957 is
hereby amended to read as follows:
 
SEC. 31. Roads, Alleys, Sidewalks and Open Spaces. -
The owner as developer of a subdivision shall provide
Page 41 of 304
adequate roads, alleys and sidewalks. For subdivision projects and traffic order: Provided, That: (1) public consultations are h
one (1) hectare or more, the owner or developer shall reserve concerned government agencies or units are obtained; and (4)
thirty percent (30%) of the gross area for open space. . . . the concerned parties[.]

....  

Section 10(d) gives homeowners' associations the right to

Upon their completion as certified to by the Authority, the
"[r]egulate access to, or passage through the
roads, alleys, sidewalks and playgrounds shall be donated by
subdivision/village roads for purposes of preserving privacy,
the owner or developer to the city or municipality and it shall
tranquility, internal security, safety[,] and traffic order" as long
be mandatory for the local governments to accept; provided,
as they complied with the requisites. The law does not
however, that the parks and playgrounds may be donated to
distinguish whether the roads have been donated to the local
the Homeowners Association of the project with the consent of
government or not.[122]
the city or municipality concerned. No portion of the parks and
playgrounds donated thereafter shall be converted to any
Petitioners argue that the Magna Carta for Homeowners and
other purpose or purposes. (Emphasis supplied)
Homeowners' Associations does not apply because it was not
  yet in effect when the Policy was issued. Assuming that it
applies, they assert that respondent failed to comply with the
The whereas clauses of Presidential Decree No. 1216 explicitly stated requisites.[123]
state that roads, alleys, and sidewalks in subdivisions are for
public use, and are beyond the commerce of men: Petitioners are correct. The Policy was approved in 2006, way
before the law was enacted in 2010. Diamond Homeowners,
  then, could not have yet complied with the conditions
provided. It would, thus, be unjustified if the Policy were to be
WHEREAS, there is a compelling need to create and maintain a
invalidated on the ground that these conditions were not
healthy environment in human settlements by providing open
followed.
spaces, roads, alleys and sidewalks as may be deemed suitable
to enhance the quality of life of the residents therein;
Laws are not retroactive. Article 4 of the Civil Code states that
"laws shall have no retroactive effect, unless the contrary is
WHEREAS, such open spaces, roads, alleys and sidewalks in
provided." Lex prospicit, non respicit; the law looks forward,
residential subdivision are for public use and are, therefore,
not backward. This is due to the unconstitutional result of
beyond the commerce of men[.] (Emphasis supplied)
retroacting a law's application: it divests rights that have
already become vested or impairs obligations of contract.
  [124]
 In Espiritu v. Cipriano:[125]
Moreover, both parties admit that the subdivision roads are
 
public. Thus, there is no issue on the roads' ownership: it
belongs to the Angeles City government.
Likewise the claim of private respondent that the act is
remedial and may, therefore, be given retroactive effect is
However, both Presidential Decree Nos. 957 and 1216 are
untenable. A close study of the provisions discloses that far
silent on the right of homeowners' associations to issue
from being remedial, the statute affects substantive rights and
regulations on using the roads to ensure the residents' safety
hence a strict and prospective construction thereof is in order.
and security.
Article 4 of the New Civil Code ordains that laws shall have no
retroactive effect unless the contrary is provided and that
This silence was addressed in 2010 when Republic Act No.
where the law is clear, Our duty is equally plain. We must
9904, or the Magna Carta for Homeowners and Homeowners'
apply it to the facts as found. . . . The said law did not, by its
Associations, was enacted. Section 10(d) states:
express terms, purport to give a retroactive operation. It is a
well-established rule of statutory construction that " Expressium
facit cessare tacitum" and, therefore, no reasonable implication
SECTION 10. Rights and Powers of the Association. - An
that the Legislature ever intended to give the law in question a
association shall have the following rights and shall exercise
retroactive effect may be accorded to the same. . . .
the following powers:

....
. . . . 
 
. . . Well-settled is the principle that while the Legislature has
(d) Regulate access to, or passage through the subdivision/villagethe
roadspower to pass retroactive
for purposes lawsprivacy,
of preserving which do not impairinternal
tranquility, the security, sa

Page 42 of 304
obligation of contracts, or affect injuriously vested rights, it is
equally true that statutes are not to be construed as intended
to have a retroactive effect so as to affect pending
proceedings, unless such intent is expressly declared or clearly
and necessarily implied from the language of the enactment.
[126]
 (Citations. omitted)
 
The Magna Carta for Homeowners and Homeowners'
Associations does not state that it has a retroactive effect.
Thus, it cannot be applied to the Policy. This Court must rule
on the Policy's validity based on the laws, rules, and court
doctrines in force at the time of its issuance.
Under Section 16 of the Local Government Code, local
governments have the power to govern the welfare of those
within its territorial jurisdiction:
SECTION 16. General Welfare. - Every local government
unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of
the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of
culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the
development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full
employment among their residents, maintain peace and order,
and preserve the comfort and convenience of their inhabitants.
This includes the power to close and open roads, whether
permanently or temporarily:
 
SECTION 21. Closure and Opening of Roads. - (a) A local
government unit may, pursuant to an ordinance, permanently
or temporarily close or open any local road, alley, park, or
square falling within its jurisdiction: Provided, however, That in
case of permanent closure, such ordinance must be approved
by at least two-thirds (2/3) of all the members of the
sanggunian, and when necessary, an adequate substitute for
the public facility that is subject to closure is provided.
(b) No such way or place or any part thereof shall be
permanently closed without making provisions for the
maintenance of public safety therein. A property thus
permanently withdrawn from public use may be used or
conveyed for any purpose for which other real property
belonging to the local government unit concerned may be
lawfully used or conveyed: Provided, however, That no
freedom park shall be closed permanently without provision for
its transfer or relocation to a new site.
(c) Any national or local road, alley, park, or square may be
temporarily closed during an actual emergency, or fiesta
celebrations, public rallies, agricultural or industrial fairs, or an
undertaking of public works and highways,
telecommunications, and waterworks projects, the duration of
which shall be specified by the local chief executive concerned
in a written order: Provided, however, That no national or local
road, alley, park, or square shall be temporarily closed for
athletic, cultural, or civic activities not officially sponsored,
recognized, or approved by the local government unit
concerned.
(d) Any city, municipality, or barangay may, by a duly enacted
ordinance, temporarily close and regulate the use of any local
street, road, thoroughfare, or any other public place where
shopping malls, Sunday, flea or night markets, or shopping
areas may be established and where goods, merchandise,
foodstuffs, commodities, or articles of commerce may be sold
and dispensed to the general public.
More relevantly, local governments may also enact ordinances
to regulate and control the use of the roads:
SECTION 458. Powers, Duties, Functions and
Compensation. - (a) The sangguniang panlungsod, as the
legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of
the city and its inhabitants pursuant to Section 16 of this Code
and in the proper exercise of the corporate powers of the city
as provided for under Section 22 of this Code, and shall:
....
(5) Approve ordinances which shall ensure the efficient and
effective delivery of the basic services and facilities as provided
for under Section 17 of this Code, and in addition to said
services and facilities, shall:
 
....
(v) Regulate the use of streets, avenues, alleys, sidewalks,
bridges, parks and other public places and approve the
construction, improvement, repair and maintenance of the
same[.]
Page 43 of 304
In Albon, this Court upheld the City of Marikina's right to enact
an ordinance to widen, clear, and repair the existing sidewalks
of Marikina Greenheights Subdivision that have been donated
to it:
 
Like all LGUs, the City of Marikina is empowered to enact
ordinances for the purposes set forth in the Local Government
Code (RA 7160). It is expressly vested with police powers
delegated to LGUs under the general welfare clause of R.A.
7160. With this power, LGUs may prescribe reasonable
regulations to protect the lives, health, and property of their
constituents and maintain peace and order within their
respective territorial jurisdictions.
Cities and municipalities also have the power to exercise such
powers and discharge such functions and responsibilities as
may be necessary, appropriate or incidental to efficient and
effective provisions of the basic services and facilities, including
infrastructure facilities intended primarily to service the needs
of their residents and which are financed by their own funds.
These infrastructure facilities include municipal or city roads
and bridges and similar facilities.
There is no question about the public nature and use of the
sidewalks in the Marikina Greenheights Subdivision. One of the
"whereas clauses" of P.D. 1216 (which amended P.D. 957)
declares that open spaces, roads, alleys and sidewalks in a
residential subdivision are for public use and beyond the
commerce of man. In conjunction herewith, P.D. 957, as
amended by P.D. 1216, mandates subdivision owners to set
aside open spaces which shall be devoted exclusively for the
use of the general public.
....
Moreover, the implementing rules of P.D. 957, as amended by
P.D. 1216, provide that it is the registered owner or developer
of a subdivision who has the responsibility for the
maintenance, repair and improvement of road lots and open
spaces of the subdivision prior to their donation to the
concerned LGU. The owner or developer shall be deemed
relieved of the responsibility of maintaining the road lots and
open space only upon securing a certificate of completion and
executing a deed of donation of these road lots and open
spaces to the LGU.[127] (Citations omitted)
Nonetheless, homeowners' associations are not entirely
powerless in protecting the interests of homeowners and
residents. Section 31 of Presidential Decree No. 957 recognizes
the need for a homeowners' association to promote and
protect their mutual interest and assist in community
development:
 
SECTION 30. Organization of Homeowners Association. - The
owner or developer of a subdivision project or condominium
project shall initiate the organization of a homeowners
association among the buyers and residents of the projects for
the purpose of promoting and protecting their mutual interest
and assist in their community development.
 
Moreover, the Housing and Land Use Regulatory Board issued
Resolutions that provided the powers and rights of
homeowners' associations. Its Resolution No. R-771-04, or the
Rules on the Registration and Supervision of Homeowners
Associations, states:
SECTION 5. Powers and Attributes of a Homeowners
Association. - The powers and attributes of the Homeowners
Association are those stated in its by-laws, which shall include
the following:
a. To adopt and amend by-laws, rules and regulations;
b. To adopt an annual program of activities and the
corresponding budget therefor, subject to the limitations and
conditions imposed under the by-laws;
c. To impose and collect reasonable fees on members and non-
member residents who avail of or benefit from the facilities
and services of the association, to defray necessary operational
expenses, subject to the limitations and conditions imposed
under e law, regulations of the Board and the association by-
laws;
d. To sue and be sued in its name;
e. To enter into contracts for basic and necessary services for
the general welfare of the association and its members;
f. To acquire, hold, encumber and convey in its own name any
right, title or interest to any property;
g. To impose reasonable sanctions upon its members for
violations and/or non-compliance with the association by laws;
and upon non-member residents by reason of any act and/or
omission prejudicial to the interest of the association or its
members; and
h. To exercise other powers necessary for the governance and
operation of the association.
Page 44 of 304
Housing and Land Use Regulatory Board Resolution No. 770-
04, or the Framework for Governance of Homeowners
Associations, states that associations are expected to promote
the security of residents in their living environment:
 
WHEREAS, there is a need to highlight the basic roles, powers
and responsibilities of a homeowners association and its
officers and members under existing laws and regulations;
WHEREAS, there is also a need to promote and operationalize
the best practices and norms of good governance in the
management of a homeowners association:
WHEREAS, the active and enlightened management of the
affairs of a homeowners association will enhance the delivery
of basic services to and promote the general welfare of its
members;
....
SECTION 3. General Principles. - An Association should-
a. endeavor to serve the interest of its members  through
equity of access in the decision-making process, transparency
and accountability, and the promotion of security in their living
environment;
b. establish its vision, define and periodically assess its
mission, policies, and objectives and the means to attain the
same; and
c. without abandoning its non-partisan character:
i. actively cooperate with local government units and national
government agencies, in furtherance of its common goals and
activities for the benefit of the residents inside and outside of
the subdivision; and
ii. complement, support and strengthen local government units
and national government agencies in providing vital services to
its members and in helping implement local government
policies, programs, ordinances, and rules.
This Court has also acknowledged the right of homeowners'
associations to set goals for the promotion of safety and
security, peace, comfort, and the general welfare of their
residents.[128] In Bel Air Village Association, Inc. v. Dionisio:[129]
The petitioner also objects to the assessment on the ground
that it is unreasonable, arbitrary, discriminatory, oppressive
and confiscatory. According to him the assessment is
oppressive because the amount assessed is not based on
benefits but on the size of the area of the lot, discriminatory
and unreasonable because only the owners of the lots are
required to pay the questioned assessment and not the
residents who are only renting inside the village; and
confiscatory because under the by-laws of the respondent
association, the latter holds a lien on the property assessed if
the amount is not paid.
We agree with the lower court's findings, to wit:
 
....
The second question has reference to the reasonableness of
the resolution assessing the monthly dues in question upon the
defendant. The exhibits annexed to the stipulation of facts
describe the purpose or goals for which these monthly dues
assessed upon the members of the plaintiff including the
defendant are to be disbursed. They are intended for garbage
collection, salary of security guards, cleaning and maintenance
of streets, establishment of parks, etc. Living in this modern,
complex society has raised complex problems of security,
sanitation, communitarian comfort and convenience and it is
now a recognized necessity that members of the community
must organize themselves for the successful solution of these
problems. Goals intended for the promotion of their safety and
security, peace, comfort, and general welfare cannot be
categorized as unreasonable. Indeed, the essence of
community life is association and cooperation for without these
such broader welfare goals cannot be attained. It is for these
reasons that modern subdivisions are imposing encumbrance
upon titles of prospective lot buyers a limitation upon
ownership of the said buyers that they automatically become
members of homeowners' association living within the
community of the subdivision.[130] (Emphasis supplied)
 
In Spouses Anonuevo v. Court of Appeals,[131] this Court,
quoting the Court of Appeals Decision, affirmed that ownership
of public spaces is with the local government, while enjoyment,
possession, and control are with the residents and
homeowners:
It appears that reliance was placed by the lower court upon
the fact that TCT No. 37527 covering Lot II, Block 6 did not
contain an annotation as to the open space character of said
piece of land. But the argument does not find justification with
applicable jurisprudence. When the lot in question had been
allotted as an open space by Carmel Corporation, it had
become the property of the Quezon City government and/or
the Republic of the Philippines held under the management,
control and enjoyment of the residents and homeowners of
Page 45 of 304
Carmel II-A Subdivision. . . .
....
Therefore, with the approval of the subdivision plan of Carmel
II A followed with it the exclusion of the land from the
commerce of man. It would not be too presumptuous to
conclude that the sale by Carmel Corporation which resulted in
the subsequent private dealings involving this public property
is void ab initio. And the mere fact that Carmel Corporation did
not consider Lot II, Block 6 as the designated open space
would not give it licentious freedom to sell such public property
"under the nose"! so to speak, of the Quezon City government,
the Republic of the Philippines, and the homeowners who are
the direct beneficiaries thereof. While the afore-enumerated
entities do not hold the owners' duplicate title over the open
space, hence, could not properly forewarned of any prejudicial
act of conveyance or encumbrance perpetrated by the
subdivision owner/developer, they should not be faulted for
taking a belated attempt to question these conveyances
affecting the open space which are made manifest only during
the actual disruptions accompanying the exercise of ownership
and possession by the ultimate vendee.[132] (Emphasis in the
original, citation omitted)
 
From all these, we hold that the Policy is valid. In De Guzman
v. Commission on Audit:[133]
 
It is a basic principle in statutory construction that when faced
with apparently irreconcilable inconsistencies between two
laws, the first step is to attempt to harmonize the seemingly
inconsistent laws. In other words, courts must first exhaust all
efforts to harmonize seemingly conflicting laws and only resort
to choosing which law to apply when harmonization is
impossible.[134] (Citations omitted)
The Policy maintains the public nature of the subdivision roads.
It neither prohibits nor impairs the use of the roads. It does
not prevent the public from using the roads, as all are entitled
to enter, exit, and pass through them. One must only
surrender an identification card to ensure the security of the
residents. As stated, the residents and homeowners, including
petitioner Kwong, have valid security concerns amid a sharp
increase in criminal activities within the subdivision.
The Policy, likewise, neither denies nor impairs any of the local
government's rights of ownership. Respondent does not assert
that it owns the subdivision roads or claims any private right
over them. Even with the Policy, the State still has the jus
possidendi (right to possess), jus utendi (right to use), just
fruendi (right to its fruits), jus abutendi (right to consume),
and jus disponendi (right to dispose) of the subdivision roads.
It still has the power to temporarily close, permanently open,
or generally regulate the subdivision roads.
It must be pointed out that this case is not even between a
homeowners' association and the local government, but a
homeowners' association and a resident who disagrees with
the Policy. Respondent, therefore, is not asserting any right
against any local government act on the subdivision roads.
Neither is the local government claiming that its right to
regulate the roads is being impinged upon.
Furthe1more, Section 31 of Presidential Decree No. 957, as
amended, on the donation of subdivision roads to the local
government, "was [enacted] to remedy the situation prevalent
at that time where owners/developers fail to keep up with their
obligation of providing and maintaining the subdivision roads,
alleys[,] and sidewalks."[135] The whereas clauses of
Presidential Decree No. 957 reveal the legislative intent:
 
WHEREAS, it is the policy of the State to afford its inhabitants
the requirements of decent human settlement and to provide
them with ample opportunities for improving their quality of
life;
WHEREAS, numerous reports reveal that many real estate
subdivision owners, developers, operators, and/or sellers have
reneged on their representations and obligations to provide
and maintain properly subdivision roads, drainage, sewerage,
water systems, lighting systems, and other similar basic
requirements, thus endangering the health and safety of home
and lot buyers;
WHEREAS, reports of alarming magnitude also show cases of
swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and
operators, such as failure to deliver titles to the buyers or titles
free from liens and encumbrances, and to pay real estate
taxes, and fraudulent sales of the same subdivision lots to
different innocent purchasers for value;
WHEREAS, these acts not only undermine the land and
housing program of the government but also defeat the
objectives of the New Society, particularly the promotion of
peace and order and the enhancement of the economic, social
and moral condition of the Filipino people;
WHEREAS, this state of affairs has rendered it imperative that
the real estate subdivision and condominium businesses be
closely supervised and regulated, and that penalties be
imposed on fraudulent practices and manipulations committed
in connection therewith. (Emphasis supplied)
Page 46 of 304
Evidently, here, the donation was for the benefit of the
subdivision's homeowners, lot buyers, and residents. This must
be taken into consideration in interpreting the provision for the
donation:
 
In the construction or interpretation of a legislative measure a
presidential decree in these cases - the primary rule is to
search for and determine the intent and spirit of the
law. Legislative intent is the controlling factor, for in the words
of this Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio
Teehankee, whatever is within the spirit of a statute is within
the statute, and this has to be so if strict adherence to the
letter would result in absurdity, injustice and contradictions.
[136]
 (Emphasis in the original, citation omitted)
In Spouses Belo v. Philippine National Bank:[137]
It is well settled that courts are not to give a statute a meaning
that would lead to absurdities. If the words of a statute are
susceptible of more than one meaning, the absurdity of the
result of one construction is a strong argument against its
adoption, and in favor of such sensible interpretation. We test
a law by its result. A law should not be interpreted so as not to
cause an injustice. There are laws which are generally valid but
may seem arbitrary when applied in a particular case because
of its peculiar circumstances. We are not bound to apply them
in slavish obedience to their language.[138] (Citations omitted)
Thus, the donation of the roads to the local government should
not be interpreted in a way contrary to the legislative intent of
benefiting the residents. Conversely, residents should not be
disempowered from taking measures for the proper
maintenance of their residential area. Under Section 30 of
Presidential Decree No. 957, they may protect their mutual
interests. Here, the Policy was not inconsistent with this
purpose. To rule against it would be contrary to the intention
of the law to protect their rights.
This Court further notes that the Deed of Donation recognizes
the Diamond Subdivision's power to monitor the security within
the subdivision. The Deed of Donation between the developer
of Diamond Subdivision and the City of Angeles states:
That it is a condition of this donation, that the Severina Realty
Corporation will have the exclusive right to appoint and to
enter into a contract with any duly licensed security guard
agency for the security guard services of the Diamond
Subdivision, Angeles City.[139]
 
Thus, the subdivision is still empowered to determine how best
to maintain the security and safety within the subdivision.
Moreover, it is common knowledge that when homeowners
purchase their properties from subdivisions, they pay a more
valuable consideration in exchange for better facilities, safer
security, and a higher degree of peace, order, and privacy.
Some may also have purchased their properties in
contemplation of their right to organize and to take measures
to protect these interests. It would be an injustice if these
were not taken into consideration in determining the validity of
the Policy.
Here, the Policy was enacted to ensure the safety and security
of Diamond Subdivision residents who have found themselves
exposed to heightened crimes and lawlessness. The Policy was
approved by 314 members of the homeowners' association,
with only petitioner Kwong protesting the solution. His protest
is ultimately rooted in the damage that the Policy has allegedly
caused to his businesses. However, he failed to present any
evidence of this damage.
It is established that he who alleges a fact has the burden of
proving it. In Republic v. Estate of Hans Menzi:[140]
It is procedurally required for each party in a case to prove his
own affirmative allegations by the degree of evidence required
by law. In civil cases such as this one, the degree of evidence
required of a party in order to support his claim is
preponderance of evidence, or that evidence adduced by one
party which is more conclusive and credible than that of the
other party. It is therefore incumbent upon the plaintiff who is
claiming a right to prove his case. Corollarily, the defendant
must likewise prove its own allegations to buttress its claim
that it is not liable.
The party who alleges a fact has the burden of proving it. The
burden of proof may be on the plaintiff or the defendant. It is
on the defendant if he alleges an affirmative defense which is
not a denial of an essential ingredient in the plaintiff's cause of
action, but is one which, if established, will be a good defense
- i.e., an "avoidance" of the claim.[141] (Citations omitted)
Since petitioner Kwong presented no evidence of the damage
caused to him, this Court cannot rule in his favor.
In any case, the community's welfare should prevail over the
convenience of subdivision visitors who seek to patronize
Page 47 of 304
petitioners' businesses. Article XII, Section 6 of the
Constitution provides that the use of property bears a social
function, and economic enterprises of persons are still subject
to the promotion of distributive justice and state intervention
for the common good:
 
SECTION 6. The use of property bears a social function, and all
economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have
the right to own, establish, and operate economic enterprises,
subject to the duty of the State to promote distributive justice
and to intervene when the common good so demands.
 
Article XIII, Section 1 of the Constitution states that the State
may regulate the use of property and its increments for the
common good:
SECTION 1. The Congress shall give highest priority to the
enactment of measures that protect and enhance the right of
all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the common
good.
To this end, the State shall regulate the acquisition, ownership,
use, and disposition of property and its increments.
These provisions reveal that the property ownership and the
rights that come with it are not without restrictions, but rather
come with the consideration and mindfulness for the welfare of
others in society. The Constitution still emphasizes and
prioritizes the people's needs as a whole. Such is the case
here: even if petitioner Kwong's rights are subordinated to the
rights of the many, the Policy improves his own wellbeing and
quality of life. In Bel Air Village Association, Inc.:
Even assuming that defendant's ownership and enjoyment of
the lot covered by TCT No. 81136 is limited because of the
burden of being a member of plaintiff association the goals
and objectives of the association are far greater because they
apply to and affect the community at large. It can be justified
on legal grounds that a person's enjoyment of ownership may
be restricted and limited if to do so the welfare of the
community of which he is a member is promoted and attained.
These benefits in which the defendant participates more than
offset the burden and inconvenience that he may suffer.
[142]
 (Emphasis supplied)
 
WHEREFORE, this Court AFFIRMS the Court of Appeals' July
5, 2013 Decision and February 12, 2014 Resolution in CA-G.R.
SP No. 115198. This Court finds that Diamond Homeowners &
Residents Association's "No Sticker, No ID, No Entry" Policy is
valid and consistent with law and jurisprudence.
SO ORDERED.
Atienza vs Brillantes
LUPO ALMODIEL ATIENZA, complainant, vs. JUDGE
FRANCISCO F. BRILLANTES, JR., Metropolitan Trial
Court, Branch 20, Manila, respondent.
QUIASON, J.:
This is a complaint by Lupo A. Atienza for Gross Immorality
and Appearance of Impropriety against Judge Francisco
Brillantes, Jr., Presiding Judge of the Metropolitan Trial Court,
Branch 20, Manila.
 
Complainant alleges that he has two children with Yolanda De
Castro, who are living together at No. 34 Galaxy Street, Bel-Air
Subdivision, Makati, Metro Manila. He stays in said house,
which he purchased in 1987, whenever he is in Manila.
In December 1991, upon opening the door to his bedroom, he
saw respondent sleeping on his (complainant's) bed. Upon
inquiry, he was told by the houseboy that respondent had
been cohabiting with De Castro. Complainant did not bother to
wake up respondent and instead left the house after giving
instructions to his houseboy to take care of his children.
Thereafter, respondent prevented him from visiting his children
and even alienated the affection of his children for him.
 
Complainant claims that respondent is married to one Zenaida
Ongkiko with whom he has five children, as appearing in his
1986 and 1991 sworn statements of assets and liabilities.
Furthermore, he alleges that respondent caused his arrest on
January 13, 1992, after he had a heated argument with De
Castro inside the latter's office.
Page 48 of 304
 
For his part, respondent alleges that complainant was not
married to De Castro and that the filing of the administrative
action was related to complainant's claim on the Bel-Air
residence, which was disputed by De Castro.
Respondent denies that he caused complainant's arrest and
claims that he was even a witness to the withdrawal of the
complaint for Grave Slander filed by De Castro against
complainant. According to him, it was the sister of De Castro
who called the police to arrest complainant.
Respondent also denies having been married to Ongkiko,
although he admits having five children with her. He alleges
that while he and Ongkiko went through a marriage ceremony
before a Nueva Ecija town mayor on April 25, 1965, the same
was not a valid marriage for lack of a marriage license. Upon
the request of the parents of Ongkiko, respondent went
through another marriage ceremony with her in Manila on June
5, 1965. Again, neither party applied for a marriage license.
Ongkiko abandoned respondent 17 years ago, leaving their
children to his care and custody as a single parent.
Respondent claims that when he married De Castro in civil rites
in Los Angeles, California on December 4, 1991, he believed, in
all good faith and for all legal intents and purposes, that he
was single because his first marriage was solemnized without a
license.
Under the Family Code, there must be a judicial declaration of
the nullity of a previous marriage before a party thereto can
enter into a second marriage. Article 40 of said Code provides:
The absolute nullity of a previous marriage may be invoked for
the purposes of remarriage on the basis solely of a final
judgment declaring such previous marriage void.
Respondent argues that the provision of Article 40 of the
Family Code does not apply to him considering that his first
marriage took place in 1965 and was governed by the Civil
Code of the Philippines; while the second marriage took place
in 1991 and governed by the Family Code.
Article 40 is applicable to remarriages entered into after the
effectivity of the Family Code on August 3, 1988 regardless of
the date of the first marriage. Besides, under Article 256 of the
Family Code, said Article is given "retroactive effect insofar as
it does not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other laws." This is
particularly true with Article 40, which is a rule of procedure.
Respondent has not shown any vested right that was impaired
by the application of Article 40 to his case.
The fact that procedural statutes may somehow affect the
litigants' rights may not preclude their retroactive application to
pending actions. The retroactive application of procedural laws
is not violative of any right of a person who may feel that he is
adversely affected (Gregorio v. Court of Appeals, 26 SCRA 229
[1968]). The reason is that as a general rule no vested right
may attach to, nor arise from, procedural laws (Billones v.
Court of Industrial Relations, 14 SCRA 674 [1965]).
Respondent is the last person allowed to invoke good faith. He
made a mockery of the institution of marriage and employed
deceit to be able to cohabit with a woman, who beget him five
children.
Respondent passed the Bar examinations in 1962 and was
admitted to the practice of law in 1963. At the time he went
through the two marriage ceremonies with Ongkiko, he was
already a lawyer. Yet, he never secured any marriage license.
Any law student would know that a marriage license is
necessary before one can get married. Respondent was given
an opportunity to correct the flaw in his first marriage when he
and Ongkiko were married for the second time. His failure to
secure a marriage license on these two occasions betrays his
sinister motives and bad faith.
It is evident that respondent failed to meet the standard of
moral fitness for membership in the legal profession.
While the deceit employed by respondent existed prior to his
appointment as a Metropolitan Trial Judge, his immoral and
illegal act of cohabiting with De Castro began and continued
when he was already in the judiciary.
The Code of Judicial Ethics mandates that the conduct of a
judge must be free of a whiff of impropriety, not only with
respect to his performance of his judicial duties but also as to
his behavior as a private individual. There is no duality of
morality. A public figure is also judged by his private life. A
Page 49 of 304
judge, in order to promote public confidence in the integrity
and impartiality of the judiciary, must behave with propriety at
all times, in the performance of his judicial duties and in his
everyday life. These are judicial guideposts too self-evident to
be overlooked. No position exacts a greater demand on moral
righteousness and uprightness of an individual than a seat in
the judiciary (Imbing v. Tiongzon, 229 SCRA 690 [1994]).
 
WHEREFORE, respondent is DISMISSED from the service with
forfeiture of all leave and retirement benefits and with
prejudice to reappointment in any branch, instrumentality, or
agency of the government, including government-owned and
controlled corporations. This decision is immediately executory.
SO ORDERED.
Abalos vs People
REYES, J. JR., J.:
The Case
Petitioner Esther P. Abalos (petitioner) comes to this Court
appealing[1] her conviction for the crime of Estafa rendered by
the Court of Appeals (CA) in its Decision dated May 20, 2015,
[2]
 in CA-G.R. CR No. 35633, which affirmed the indeterminate
penalty of four years and two months of prision correccional  as
minimum to 20 years of reclusion temporal  as maximum and
actual damages of P232,500.00 imposed by the Regional Trial
Court (RTC), but modified the legal interest at 6% per annum
from finality of the decision until fully paid.
 
The Version of the Prosecution
In April 2011, petitioner, who introduced herself as "Vicenta
Abalos," accompanied by Christine Molina (Molina), went to the
office of private complainant Elaine D. Sembrano (Sembrano)
at Manulife, Baguio City and offered to her two EastWest Bank
checks for rediscounting.[3] The checks were signed by
petitioner in Sembrano's office, as follows:
Dated  Amount  On November 29, 2012, the RTC rendered a Decision[18] finding
May 3, 2011    P    17,500.00    
June 1, 2011     250,000.00    
   P 267,500.00[4]
Sembrano agreed to rediscount the checks upon assurance of
petitioner and her companion, Molina, that they were good
checks.[5] Sembrano gave the amount of P250,000.00 less 7%
as interest. Sometime later, she learned from friends that
petitioner's name was Esther and not "Vicenta."[6] When
Sembrano presented the checks for payment on due dates, the
checks were dishonored.[7] Sembrano then engaged the
services of Benguet Credit Collectors to collect from petitioner.
Petitioner failed to make good the checks such that a demand
letter was sent to petitioner which she received on October 23,
2011.[8] Despite the said demand, petitioner made a promise to
pay, but up to this date, nothing was received by Sembrano.
[9]
 For failure to pay her loans, a complaint for estafa under
Article 315 of the Revised Penal Code (RPC) was filed against
petitioner.
The Version of the Defense
Petitioner denied the accusations. She claimed that the checks
were issued only as a collateral for a loan together with the
title to a property in the name of "Vicenta Abalos." [10] She
stated that she did not personally transact with
Sembrano[11] and that it was Molina who transacted with her
and she merely accompanied Molina to Sembrano's office in
April 2011.[12] As a requirement for the release of the loan,
petitioner was asked to present as collateral an original
certificate of title and a check, which she agreed. [13] When she
was informed that the loan was ready, she together with
Molina proceeded to the office of Sembrano purposely to
receive the money.[14] Before taking the money from
Sembrano, petitioner was asked to sign a real estate mortgage
offering the title as a collateral to the loan.[15] After she and
Molina received the money from Sembrano, they went to a
convenience store where Molina gave petitioner P100,000.00
and petitioner handed back to Molina P20,000.00 as
commission.[16] Petitioner insists that the checks she issued
were merely to serve as collateral for the loan and not for the
purpose of rediscounting the same.[17]
 
The Ruling of the RTC
petitioner guilty, viz.:
Page 50 of 304
WHEREFORE, all premises duly considered, the [c]ourt finds
the accused, GUILTY as charged. Applying the provisions of
the Indeterminate Sentence Law, there being no aggravating
and mitigating circumstance, the accused is hereby sentenced
to suffer the penalty of imprisonment of four (4) years and two
(2) months of prision correctional  as minimum to twenty (20)
years of reclusion temporal  as maximum.
The accused is likewise found to be civilly liable to pay the
private complainant the amount of Php232,500.00 as and by
way of actual damages, with legal interest thereon to be
computed from the date of the filing of this case, until the
same is fully paid.
SO ORDERED.[19]
The Ruling of the CA
On appeal, the CA affirmed the conviction, but fixed the rate of
interest at 6% per annum, thus:
 
WHEREFORE, premises considered, the appeal
is DISMISSED. The Decision dated November 29, 2012 of the
Regional Trial Court, Branch 60, Baguio City, in Criminal Case
No. 32571-R, finding [appellant] guilty of [Estafa]
is AFFIRMED with MODIFICATION that appellant is
directed to pay private complainant the amount of
P232,500.00 as and by way of actual damages, with legal
interest at six percent (6%) per annum from finality of
this Decision until fully paid.
SO ORDERED.[20]
The CA is convinced that the false pretense of petitioner is
apparent when she, together with her companion knowingly
and intelligently misrepresented herself as "Vicenta Abalos" by
showing to Sembrano a Transfer Certificate of Title in the
name of Vicenta Abalos, a BIR ID Card, a Community Tax
Certificate all bearing the name of Vicenta Abalos, and by
signing the subject checks as "Vicenta Abalos." These pieces of
evidence assured Sembrano that petitioner can make good the
checks she issued as she has the means to do so prompting
her to part with her money. The CA likewise ruled that mere
issuance of a check and its subsequent non-payment is
a prima facie  evidence of deceit.
Dissatisfied, petitioner filed the instant appeal.
The Issue
Petitioner submits for the Court's consideration the lone issue
that —
 
THE [CA] ERRED IN FINDING THAT PETITIONER IS
GUILTY OF ESTAFA CONSIDERING THAT THE REAL
TRANSACTION BETWEEN THE PARTIES, AS DEFINED
BY LAW, IS NOT CRIMINAL IN NATURE, BUT CIVIL
ONLY.[21]
Petitioner insists that not all elements of estafa were
established. The element of deceit and/or false pretenses are
lacking because the issuance of the checks was not the factor
that induced private complainant to grant the loan, but the
intercession made by Molina and the interest to be earned on
the money lent.[22] It was Molina who maneuvered the
transaction with private complainant by assuring the latter that
petitioner will pay the loan.[23]
Petitioner also zeroed-in on the irreconcilable conflict between
Sembrano's affidavit and her testimony in open court. In her
affidavit, Sembrano stated that the checks were offered to her
for rediscounting, while her testimony in open court, she
admitted that the checks were used for collaterals. [24] This
inconsistency put doubt on the testimony of Sembrano, but
strengthened petitioner's claim that the checks were meant to
be collaterals of the loan which are supposed to be encashed
only upon non-payment.[25]
 
The Ruling of the Court
As can be inferred from the records, petitioner was convicted
of estafa under Article 315, paragraph 2(d) of the RPC,
[26]
 which provides:
ART. 315. Swindling (estafa).  — Any person who shall
defraud another by any of the means mentioned hereinbelow
shall be punished by:
xxxx
2. By means of any of the following false pretenses or
fraudulent acts executed prior to or simultaneously with the
commission of the fraud:
xxxx
(d) By [postdating] a check, or issuing a check in payment
Page 51 of 304
 deposited therein were not sufficient to cover the amount
necessary to cover his check within three (3) days from that
been dishonored for lack or insufficiency of funds shallcertificate
(As amended by R.A. [No.] 4885, approved June 17, 1967.)"Vicenta Abalos" presumably guaranteeing her capability to
This kind of estafa is committed by any person who shall
defraud another by false pretenses or fraudulent acts executed
prior to or simultaneously with the commission of the fraud.
The elements are: (1) postdating or issuing a check in
payment of an obligation contracted at the time the check was
issued; (2) lack of sufficient funds to cover the check; (3)
knowledge on the part of the offender of such circumstances;
and (4) damage to the complainant.[27]
The prosecution was able to establish beyond reasonable
doubt all the aforesaid elements of estafa.
There is no question that petitioner issued two checks in the
total amount of P267,500.00 in payment for an obligation. The
issued checks have insufficient funds as proven by the fact that
they were dishonored for the reason "account closed." Because
petitioner knew too well that she was not the owner of the
check, petitioner had no knowledge whether the checks were
sufficiently funded to cover the amount drawn against the
checks. Petitioner did not inform Sembrano about the
insufficiency/lack of funds of the checks. Thus, upon
presentment for payment, the checks were eventually
dishonored causing damages to Sembrano in the total amount
of P267,500.00,[28] as what was reflected in the issued checks.
What sets apart the crime of estafa from the other offense of
this nature (i.e.,  Batas Pambansa Bilang 22) is the element of
deceit. Deceit has been defined as "the false representation of
a matter of fact, whether by words or conduct by false or
misleading allegations or by concealment of that which should
have been disclosed which deceives or is intended to deceive
another so that he shall act upon it to his legal injury." [29]
In Juaquico v.People[30] the Court reiterated that in the crime of
estafa by postdating or issuing a bad check, deceit and
damage are essential elements of the offense and have to be
established with satisfactory proof to warrant conviction. To
constitute estafa, deceit must be the efficient cause of the
defraudation, such that the issuance of the check should be
the means to obtain money or property from the
payer[31] resulting to the latter's damage. In other words, the
issuance of the check must have been the inducement for the
surrender by the party deceived of his money or property. [32]
The element of deceit was established from the very beginning
when petitioner misrepresented herself as Vicenta Abalos, the
owner of the check. To fortify the misrepresentation, petitioner
issued and signed the checks in front of
Sembrano[33] presumably to show good faith on her part.
Petitioner also showed Sembrano documents such as an
Identification
of the check.
CardThe
andfailure
Community
of the Tax
drawer
Certificate
of the check
to prove
to deposit the am
receipt
she isofVicenta
notice from
Abalos.
theAnd
banklastly,
and/orshethe
showed
payeeaortransfer
holder that said ch
be of title of a land registered under the name of
pay. As observed by the RTC, at the outset, petitioner's
fraudulent scheme was already evident.
The misrepresentation of petitioner assured Sembrano that she
is indeed dealing with Vicenta Abalos who has sufficient means
and property, and the capacity to make good the issued
checks. It is safe to say that Sembrano was induced to release
the money to petitioner relying on the latter's false pretense
and fraudulent act. Evidently, petitioner's act of issuing a
worthless check belonging to another who appears to have
sufficient means is the efficient cause of the deceit and
defraudation. Were it not for the said circumstance, Sembrano
would not have parted with her money. At any rate a  prima
facie  presumption of deceit arises when the drawer of the
dishonored check is unable to pay the amount of the check
within three days from receipt of the notice of dishonor.[34]
In its last ditch effort to enfeeble the case against her,
petitioner pointed out the inconsistency in the evidence of the
prosecution specifically with the testimonies of Sembrano
herself. In her affidavit, Sembrano stated that the checks were
offered to her for rediscounting, while her testimony in open
court, she admitted that the checks were used for collaterals.
[35]
 For a discrepancy to serve as basis for acquittal, it must
refer to significant facts vital to the guilt or innocence of the
accused. An inconsistency, which has nothing to do with the
elements of the crime, cannot be a ground to reverse a
conviction.[36] The inconsistency referred to in this case does
not attach upon the very element of the crime of estafa.
While it was indeed admitted by Sembrano that the checks
were collaterals, this only lends credence to the fact that the
said checks were the reason why Sembrano parted with her
money. Sembrano was assured that the loan contracted was
secured by the checks issued. Notwithstanding that the said
checks were merely used to guarantee a loan, the fact remains
that petitioner committed deceit when she failed to make
known to Sembrano that the checks she issued were not hers
and they were not sufficiently funded. Sembrano will not
accede to an arrangement of issuing unfunded checks to
secure the loan. It is against ordinary human behavior and
experience for a person to accept a check, even as a mere
guaranty for a supposed loan or obligation, if one knew
beforehand that the account against which the check was
drawn was already closed.[37] The check would not even serve
its purpose of guaranty because it can no longer be encashed.
[38]
While it is true that no criminal liability under the RPC arises
from the mere issuance of postdated checks as a guarantee of
repayment,[39] this is not true in the instant case where the
Page 52 of 304
element of deceit is attendant in the issuance of the said
checks. The liability therefore is not merely civil, but criminal.
As to the penalty imposed, we take into consideration the
amendment embodied in R.A. No. 10951[40] which modifies the
penalty in swindling and estafa cases. Section 100 of the said
law, however, provides that it shall have retroactive effect only
insofar as it is favorable to the accused. This necessitates a
comparison of the corresponding penalties imposable under
the RPC and R.A. No. 10951.
The penalty imposed by the RPC in estafa committed under
Section 315, paragraph 2(d) are as follows:
 
ART. 315. Swindling (estafa).  — Any person who shall
defraud another by any of the means mentioned herein below
shall be punished by:
1st. The penalty of prision correccional  in its maximum period
to prision mayor  in its minimum period, if the amount of the
fraud is over 12,000 but does not exceed 22,000 pesos, and if
such amount exceeds the latter sum, the penalty provided in
this paragraph shall be imposed in its maximum period, adding
one year for each additional 10,000 pesos; but the total
penalty which may be imposed shall not exceed twenty years.
In such cases, and in connection with the accessory penalties
which may be imposed and for the purpose of the other
provisions of this Code, the penalty shall be termed prision
mayor  or reclusion temporal,  as the case may be.
Considering that the penalty prescribed by law is composed
only of two periods, pursuant to Article 65 of the RPC, the
same must be divided into three equal portions of time
included in the penalty prescribed, forming one period for each
of the three portions,[41] to wit:
Maximum — 6 years, 8 months, 21 days to 8 years;
Medium — 5 years, 5 months, 11 days to 6 years, 8 months,
20 days; and
Minimum — 4 years, 2 months, 1 day to 5 years, 5 months, 10
days.[42]
Since the amount involved in this case is P232,500.00 [43] which
is beyond the P22,000.00 ceiling set by law, the penalty to be
imposed upon the petitioner should be taken within the
maximum period of the penalty prescribed which is eight
years; and from there should be added the incremental penalty
of 21 years (P232,500.00 less P22,000.00 divided by 10).
However, the law only provides the highest allowable duration
which is 20 years. Therefore, the maximum period of
indeterminate penalty is 20 years.
Applying the Indeterminate Sentence Law, the minimum term
should be within the penalty next lower in degree of the
penalty prescribed, which is, prision correccional  in its
minimum and medium periods or anywhere from six months
and one day to four years and two months. If only to be
beneficial to the accused, the lowest term possible that can be
imposed is six months and one day.
Hence, under the RPC, the penalty of estafa (of the amount of
P232,500.00) ranged from six months and one day as
minimum to 20 years as maximum.
On the other hand, R.A. No. 10951 provides:
SEC. 85. Article 315 of the same Act, as amended by Republic
Act No. 4885, Presidential Decree No. 1689, and Presidential
Decree No. 818, is hereby further amended to read as follows:
ART. 315. Swindling (estafa).  — x x x
xxxx
Any person who shall defraud another by means of false
pretenses or fraudulent acts as defined in paragraph 2(d)
hereof shall be punished by:
4th. The penalty of prision mayor  in its medium period,
if such amount is over Forty thousand pesos (P40,000)
but does not exceed One million two hundred thousand
pesos (P1,200,000).
Considering that the actual amount involved in this case is
P232,500.00, the proper imposable penalty is prision mayor  in
its medium period. Since the penalty prescribed by law is a
penalty composed of only one period, Article 65 of the RPC
requires the division of the time included in the penalty into
three portions, thus:
 
Maximum: 9 years, 4 months and 1 day to 10 years
Medium: 8 years, 8 months and 1 day to 9 years and 4 months
Minimum: 8 years and 1 day to 8 years and 8 months[44]
Under Article 64 of the RPC, the penalty prescribed shall be
imposed in its medium period when there are neither
aggravating nor mitigating circumstances. Considering the
absence of any modifying circumstance in this case, the
maximum penalty should be anywhere within the medium
period of eight years, eight months and one day to nine years
and four months.
Page 53 of 304
Applying the Indeterminate Sentence Law (ISL), the minimum
term, which is left to the sound discretion of the court, should
be within the range of the penalty next lower than the
aforementioned penalty, which is left to the sound discretion of
the court.[45] Thus, the minimum penalty should be one degree
lower from the prescribed penalty of prision mayor  in its
medium period, or prision mayor  in its minimum period.[46] The
minimum term of the indeterminate sentence should be
anywhere from six years and one day to 10 years.
Under R.A. No. 10951, therefore, the petitioner is liable to
suffer the indeterminate penalty of imprisonment ranging from
six years and one day of prision mayor,  as minimum, to eight
years, eight months and one day of prision mayor,  as
maximum.[47]
It appears, however, that the imposable penalty under the
RPC, which is six months and one day to 20 years, presents a
lower minimum period, but a higher maximum period of
imprisonment compared to that imposable under R.A. No.
10951, which is six years and one day to eight years, eight
months and one day. In the case of Hisoler v. People,[48] the
Court has ruled that since the penalty under the RPC is more
beneficial to the accused, thus, it is the proper penalty to be
imposed. It ratiocinated as follows:
 
At any rate, even if the maximum period imposable upon the
petitioner under the RPC in this case is higher than that under
R.A. No. 10951, the Court finds that the benefits that would
accrue to the petitioner with the imposition of a lower
minimum sentence outweighs the longer prison sentence and
is more in keeping with the spirit of the Indeterminate
Sentence Law.
In fixing the indeterminate penalty imposable upon the
accused, the Court should be mindful that the basic purpose of
the Indeterminate Sentence Law is to "uplift and redeem
valuable human material, and prevent unnecessary and
excessive deprivation of personal liberty and economic
usefulness." Simply, an indeterminate sentence is imposed to
give the accused the opportunity to shorten the term of
imprisonment depending upon his or her demeanor, and
physical, mental, and moral record as a prisoner. The goal of
the law is to encourage reformation and good behavior, and
reduce the incidence of recidivism. While the grant of parole
after service of the minimum sentence is still conditional, the
flexibility granted upon the petitioner to immediately avail of
the benefits of parole considering the much shorter minimum
sentence under the RPC should inspire the petitioner into
achieving the underlying purpose behind the Indeterminate
Sentence Law.[49]
It is clear, therefore, that if R.A. No. 10951 would be given
retroactive effect, the same will prejudice petitioner. The
penalty under the RPC, insofar as it benefits the petitioner
must prevail. Hence, the penalty imposed by the RTC and the
CA, which is four years and two months of prision
correccional  as minimum to 20 years of reclusion temporal  as
maximum, is correct as it is within the proper penalty imposed
by law.
The legal rate of interest of 6% per annum on the monetary
award of P232,500.00 (the actual damage sustained by
Sembrano), from the date of finality of this Decision until fully
paid, as imposed by the CA, is modified as follows: the
monetary award shall earn interest at the rate of 12% per
annum from the filing of the Information until June 30, 2013
and 6 % per annum from July 1, 2013 until the finality of the
decision. The total amount of the foregoing shall, in turn, earn
interest at the rate of 6% per annum from the finality of the
decision until full payment of the same.[50]
WHEREFORE, the Decision dated May 20, 2015 of the Court
of Appeals in CA-G.R. CR No. 35633 sentencing petitioner to
four (4) years and two (2) months of prision correccional  as
minimum to twenty (20) years of reclusion temporal  as
maximum is AFFIRMED with MODIFICATION in that the
monetary award of P232,500.00 shall be subject to interest
rate of 12% per annum from the filing of the Information until
June 30, 2013 and 6% per annum from July 1, 2013 until the
finality of the decision, and the total amount of the foregoing
shall, in turn, earn interest at the rate of 6% per annum from
the finality of the decision until full payment thereof.
SO ORDERED.
Famanila vs CA
ROBERTO G. FAMANILA, Petitioner, versus THE COURT
OF APPEALS (Spc. Fmr. Seventh Division) and
BARBERSHIP MANAGEMENT LIMITED and NFD
INTERNATIONAL MANNING AGENTS, INC.
Respondents.
YNARES-SANTIAGO, J.: 
 
Before us is a petition for review on certiorari assailing the
Decision[1] of the Court of Appeals in CA-G.R. SP No. 50615
dated March 30, 2001 which affirmed the Decision[2] of the
National Labor Relations Commission (NLRC) dated March 31,
1998 dismissing petitioner's complaint for payment of disability
and other benefits for lack of merit and the Resolution[3]
dated October 5, 2001 of the Court of Appeals denying
petitioner's motion for reconsideration. 
Page 54 of 304
The antecedent facts are as follows:  resolved to refer the case to the Court of Appeals pursuant to
our ruling in St. Martin Funeral Home v. National Labor
  Relations Commission.[13] 

In 1989, respondent NFD International Manning Agents, Inc.  

hired the services of petitioner Roberto G. Famanila as
Messman[4] for Hansa Riga, a vessel registered and owned by On March 30, 2001, the Court of Appeals promulgated the
its principal and co-respondent, Barbership Management assailed decision which dismissed the petition for lack of merit.
Limited.  Petitioner's motion for reconsideration was denied, hence, the
present petition for review raising the following issues: 
 
 
On June 21, 1990, while Hansa Riga was docked at the port of
Eureka, California, U.S.A. and while petitioner was assisting in I. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
the loading operations, the latter complained of a headache. DISCRETION AMOUNTING TO LACK OR EXCESS OF
Petitioner experienced dizziness and he subsequently JURISDICTION IN UPHOLDING THE VALIDITY OF THE
collapsed. Upon examination, it was determined that he had a RECEIPT AND RELEASE SINCE PETITIONER'S CONSENT
sudden attack of left cerebral hemorrhage from a ruptured THERETO WAS VITIATED THEREBY MAKING THE SAME VOID
cerebral aneurysm.[5] Petitioner underwent a brain operation AND UNENFORCEABLE. 
and he was confined at the Emmanuel Hospital in Portland,
Oregon, U.S.A. On July 19, 1990, he underwent a second brain  
operation. 
II. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
  DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT THE PRESCRIPTION
Owing to petitioner's physical and mental condition, he was PERIOD APPLICABLE TO THE CLAIM OF THE PETITIONER IS
repatriated to the Philippines. On August 21, 1990, he was THE 3-YEAR PERIOD PROVIDED FOR UNDER THE LABOR
examined at the American Hospital in Intramuros, Manila CODE OF THE PHILIPPINES AND NOT THE 10-YEAR PERIOD
where the examining physician, Dr. Patricia Abesamis declared PROVIDED FOR UNDER THE CIVIL CODE. 
that he "cannot go back to sea duty and has been observed for
120 days, he is being declared permanently, totally  
disabled."[6] 
Petitioner claims that he did not sign the Receipt and Release
  voluntarily or freely because he was permanently disabled and
in financial constraints. These factors allegedly vitiated his
Thereafter, authorized representatives of the respondents consent which makes the Receipt and Release void and
convinced him to settle his claim amicably by accepting the unenforceable. 
amount of US$13,200.[7] Petitioner accepted the offer as
evidenced by his signature in the Receipt and Release dated  
February 28, 1991.[8] His wife, Gloria Famanila and one
The petition lacks merit. 
Richard Famanila, acted as witnesses in the signing of the
release. 
 
 
It is fundamental that the scope of the Supreme Court's
judicial review under Rule 45 of the Rules of Court is confined
On June 11, 1997, petitioner filed a complaint[9] with the
only to errors of law. It does not extend to questions of fact.
NLRC which was docketed as NLRC OCW Case No. 6-838-97-L
More so in labor cases where the doctrine applies with greater
praying for an award of disability benefits, share in the
force.[14] The Labor Arbiter and the NLRC have already
insurance proceeds, moral damages and attorney's fees. On
determined the factual issues, and these were affirmed by the
September 29, 1997, Acting Executive Labor Arbiter Voltaire A.
Court of Appeals. Thus, they are accorded not only great
Balitaan dismissed the complaint on the ground of prescription.
respect but also finality and are deemed binding upon this
Petitioner appealed the decision with the NLRC. On March 31,
Court so long as they are supported by substantial evidence.
1998, the NLRC promulgated its decision[10] finding the
[15] We reviewed the records of the case and we find no
appeal to be without merit and ordered its dismissal. When the
reason to deviate from the findings of the labor arbiter, NLRC
motion for reconsideration[11] was denied by the NLRC in its
and the Court of Appeals. 
resolution dated June 29, 1998,[12] petitioner filed a petition
for certiorari with this Court. On December 2, 1998, we
 

Page 55 of 304
A vitiated consent does not make a contract void and
unenforceable. A vitiated consent only gives rise to a voidable
agreement. Under the Civil Code, the vices of consent are
mistake, violence, intimidation, undue influence or fraud.[16] If
consent is given through any of the aforementioned vices of
consent, the contract is voidable.[17] A voidable contract is
binding unless annulled by a proper action in court.[18] 
 
Petitioner contends that his permanent and total disability
vitiated his consent to the Receipt and Release thereby
rendering it void and unenforceable. However, disability is not
among the factors that may vitiate consent. Besides, save for
petitioner's self-serving allegations, there is no proof on record
that his consent was vitiated on account of his disability. In the
absence of such proof of vitiated consent, the validity of the
Receipt and Release must be upheld. We agree with the
findings of the Court of Appeals that: 
 
In the case at bar, there is nothing in the records to show that
petitioner's consent was vitiated when he signed the
agreement. Granting that petitioner has not fully recovered his
health at the time he signed the subject document, the same
cannot still lead to the conclusion that he did not voluntar[il]y
accept the agreement, for his wife and another relative
witnessed his signing.  or not named, including but not limited to BARBER SHIP
 
Moreover, the document entitled receipt and release which was
attached by petitioner in his appeal does not show on its face
any violation of law or public policy. In fact, petitioner did not
present any proof to show that the consideration for the same
is not reasonable and acceptable. Absent any evidence to
support the same, the Court cannot, on its own accord, decide
against the unreasonableness of the consideration.[19] 
It is true that quitclaims and waivers are oftentimes frowned
upon and are considered as ineffective in barring recovery for
the full measure of the worker's right and that acceptance of
the benefits therefrom does not amount to estoppel.[20] The
reason is plain. Employer and employee, obviously do not
stand on the same footing.[21] However, not all waivers and
quitclaims are invalid as against public policy. If the agreement
was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be
disowned simply because of change of mind. It is only where
there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of the settlement
are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that
the person making the waiver did so voluntarily, with full
understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must
be recognized as a valid and binding undertaking,[22] as in
this case. 
 
To be valid and effective, waivers must be couched in clear
and unequivocal terms, leaving no doubt as to the intention of
those giving up a right or a benefit that legally pertains to
them.[23] We have reviewed the terms and conditions
contained in the Receipt and Release and we find the same to
be clear and unambiguous. The signing was even witnessed by
petitioner's wife, Gloria T. Famanila and one Richard T.
Famanila. The Receipt and Release provides in part: 
 
That for and in consideration of the sum of THIRTEEN
THOUSAND TWO HUNDRED DOLLARS (US$13,200.00) or its
equivalent in Philippine currency THREE HUNDRED SIXTY FIVE
THOUSAND NINE HUNDRED FOUR PESOS (365,904.00), the
receipt of which is hereby acknowledged to my full and
complete satisfaction x x x I, ROBERTO G. FAMANILA, x x x
hereby remise, release and forever discharge said vessel
"HANSA RIGA", her Owners, operators, managers, charterers,
agents, underwriters, P and I Club, master, officers, and crew
and all parties at interest therein or thereon, whether named
MANAGEMENT LIMITED, NFD INTERNATIONAL MANNING
AGENTS, INC. and ASSURANCEFORENIGEN GARD from any
and all claims, demands, debts, dues, liens, actions or causes
of action, at law or in equity, in common law or in admiralty,
statutory or contractual, arising from and under the laws of the
United States of America, Norway, Hongkong or the Republic
of the Philippines and/or any other foreign country now held,
owned or possessed by me or by any person or persons,
arising from or related to or concerning whether directly or
indirectly, proximately or remotely, without being limited to but
including the said illness suffered by me on board the vessel
"HANSA RIGA" on or about 21st June 1990 at Portland, Oregon
and disability compensation in connection therewith. 
This instrument is a GENERAL RELEASE intended to release all
liabilities of any character and/or claims or damages and/or
losses and/or any other liabilities whatsoever, whether
contractual or statutory, at common law or in equity, tortious
or in admiralty, now or henceforth in any way related to or
occurring as a consequence of the illness suffered by me as
Messman of the vessel "HANSA RIGA", including but not
limited to all damages and/or losses consisting of loss of
support, loss of earning capacity, loss of all benefits of
whatsoever nature and extent incurred, physical pain and
suffering and/or all damages and/or indemnities claimable in
law, tort, contract, common law, equity and/or admiralty by
Page 56 of 304
me or by any person or persons pursuant to the laws of the
United States of America, Norway, Hongkong or the Republic
of the Philippines and of all other countries whatsoever.  50615 which affirmed the Decision of the National Labor
 
I hereby certify that I am of legal age and that I fully
understand this instrument which was read to me in the local
dialect and I agree that this is a FULL AND FINAL RELEASE
AND DISCHARGE of all parties and things referred to herein,
and I further agree that this release may be pleaded as an
absolute and final bar to any suit or suits or legal proceedings
that may hereafter be prosecuted by me or by any one
claiming by, through, or under me, against any of the persons
or things referred to or related herein, for any matter or thing
referred to or related herein.[24]  APPEALS, HON. SIXTO MARELLA, JR., Presiding Judge,
 
It is elementary that a contract is perfected by mere consent
and from that moment the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be in
keeping with good faith, usage and law.[25] Further, dire
necessity is not an acceptable ground for annulling the Receipt
and Release since it has not been shown that petitioner was
forced to sign it.[26]  79742, which affirmed the Orders dated July 21, 2000 [2] and
 
Regarding prescription, the applicable prescriptive period for
the money claims against the respondents is the three year
period pursuant to Article 291 of the Labor Code which
provides that: 
ART. 291. Money Claims. - All money claims arising from
employer-employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the
cause of action accrued; otherwise they shall be forever
barred.  administration[5] before the Regional Trial Court of Makati City,
 
x x x x 
Since petitioner's demand for an award of disability benefits is
a money claim arising from his employment, Article 291 of the
Labor Code applies. From the time petitioner was declared
permanently and totally disabled on August 21, 1990 which
gave rise to his entitlement to disability benefits up to the time
that he filed the complaint on June 11, 1997, more than three
years have elapsed thereby effectively barring his claim.  appointment of a regular administrator for the orderly
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals dated March 30, 2001 in CA-G.R. SP No.
Relations Commission dismissing petitioner's complaint for
disability and other benefits for lack of merit, and the
Resolution dated October 5, 2001 denying the motion for
reconsideration, are AFFIRMED. 
 
SO ORDERED. 
Guy vs CA
MICHAEL C. GUY, Petitioner, versus HON. COURT OF
RTC, Branch 138, Makati City and minors, KAREN
DANES WEI and KAMILLE DANES WEI, represented by
their mother, REMEDIOS OANES, Respondents.
YNARES-SANTIAGO, J.: 
 
This petition for review on certiorari assails the January 22,
2004 Decision[1] of the Court of Appeals in CA-G.R. SP No.
July 17, 2003[3] of the Regional Trial Court of Makati City,
Branch 138 in SP Proc. Case No. 4549 denying petitioner's
motion to dismiss; and its May 25, 2004 Resolution[4] denying
petitioner's motion for reconsideration. 
 
The facts are as follows: 
On June 13, 1997, private respondent-minors Karen Oanes Wei
and Kamille Oanes Wei, represented by their mother Remedios
Oanes (Remedios), filed a petition for letters of
Branch 138. The case was docketed as Sp. Proc. No. 4549 and
entitled Intestate Estate of Sima Wei (a.k.a. Rufino Guy
Susim). 
Private respondents alleged that they are the duly
acknowledged illegitimate children of Sima Wei, who died
intestate in Makati City on October 29, 1992, leaving an estate
valued at P10,000,000.00 consisting of real and personal
properties. His known heirs are his surviving spouse Shirley
Guy and children, Emy, Jeanne, Cristina, George and Michael,
all surnamed Guy. Private respondents prayed for the
settlement of Sima Wei's estate. They likewise prayed that, in
the meantime, petitioner Michael C. Guy, son of the decedent,
Page 57 of 304
be appointed as Special Administrator of the estate. Attached WHEREFORE, premises considered, the present petition is
to private respondents' petition was a Certification Against hereby DENIED DUE COURSE and accordingly DISMISSED, for
Forum Shopping[6] signed by their counsel, Atty. Sedfrey A. lack of merit. Consequently, the assailed Orders dated July 21,
Ordoñez.  2000 and July 17, 2003 are hereby both AFFIRMED.
Respondent Judge is hereby DIRECTED to resolve the
  controversy over the illegitimate filiation of the private
respondents (sic) minors [-] Karen Oanes Wei and Kamille
In his Comment/Opposition,[7] petitioner prayed for the
Oanes Wei who are claiming successional rights in the intestate
dismissal of the petition. He asserted that his deceased father
estate of the deceased Sima Wei, a.k.a. Rufino Guy Susim. 
left no debts and that his estate can be settled without
securing letters of administration pursuant to Section 1, Rule  
74 of the Rules of Court. He further argued that private
respondents should have established their status as illegitimate SO ORDERED.[10] 
children during the lifetime of Sima Wei pursuant to Article 175
of the Family Code.   

  The Court of Appeals denied petitioner's motion for

reconsideration, hence, this petition. 
The other heirs of Sima Wei filed a Joint Motion to Dismiss[8] on
the ground that the certification against forum shopping should  
have been signed by private respondents and not their
Petitioner argues that the Court of Appeals disregarded
counsel. They contended that Remedios should have executed
existing rules on certification against forum shopping; that the
the certification on behalf of her minor daughters as mandated
Release and Waiver of Claim executed by Remedios released
by Section 5, Rule 7 of the Rules of Court. 
and discharged the Guy family and the estate of Sima Wei
  from any claims or liabilities; and that private respondents do
not have the legal personality to institute the petition for
In a Manifestation/Motion as Supplement to the Joint Motion to letters of administration as they failed to prove their filiation
Dismiss,[9] petitioner and his co-heirs alleged that private during the lifetime of Sima Wei in accordance with Article 175
respondents' claim had been paid, waived, abandoned or of the Family Code. 
otherwise extinguished by reason of Remedios' June 7, 1993
Release and Waiver of Claim stating that in exchange for the  
financial and educational assistance received from petitioner,
Private respondents contend that their counsel's certification
Remedios and her minor children discharge the estate of Sima
can be considered substantial compliance with the rules on
Wei from any and all liabilities. 
certification of non-forum shopping, and that the petition
  raises no new issues to warrant the reversal of the decisions of
the Regional Trial Court and the Court of Appeals. 
The Regional Trial Court denied the Joint Motion to Dismiss as
well as the Supplemental Motion to Dismiss. It ruled that while  
the Release and Waiver of Claim was signed by Remedios, it
The issues for resolution are: 1) whether private respondents'
had not been established that she was the duly constituted
petition should be dismissed for failure to comply with the rules
guardian of her minor daughters. Thus, no renunciation of
on certification of non-forum shopping; 2) whether the Release
right occurred. Applying a liberal application of the rules, the
and Waiver of Claim precludes private respondents from
trial court also rejected petitioner's objections on the
claiming their successional rights; and 3) whether private
certification against forum shopping. 
respondents are barred by prescription from proving their
  filiation. 

Petitioner moved for reconsideration but was denied. He filed a  

petition for certiorari before the Court of Appeals which
The petition lacks merit. 
affirmed the orders of the Regional Trial Court in its assailed
Decision dated January 22, 2004, the dispositive portion of
 
which states: 
Rule 7, Section 5 of the Rules of Court provides that the
 
certification of non-forum shopping should be executed by the
plaintiff or the principal party. Failure to comply with the

Page 58 of 304
requirement shall be cause for dismissal of the case. However, The right to accept an inheritance left to the poor shall belong
a liberal application of the rules is proper where the higher to the persons designated by the testator to determine the
interest of justice would be served. In Sy Chin v. Court of beneficiaries and distribute the property, or in their default, to
Appeals,[11] we ruled that while a petition may have been those mentioned in Article 1030. (Emphasis supplied) 
flawed where the certificate of non-forum shopping was signed
only by counsel and not by the party, this procedural lapse  
may be overlooked in the interest of substantial justice. [12] So it
Parents and guardians may not therefore repudiate the
is in the present controversy where the merits[13] of the case
inheritance of their wards without judicial approval. This is
and the absence of an intention to violate the rules with
because repudiation amounts to an alienation of
impunity should be considered as compelling reasons to
property[16] which must pass the court's scrutiny in order to
temper the strict application of the rules. 
protect the interest of the ward. Not having been judicially
  authorized, the Release and Waiver of Claim in the instant case
is void and will not bar private respondents from asserting
As regards Remedios' Release and Waiver of Claim, the same their rights as heirs of the deceased. 
does not bar private respondents from claiming successional
rights. To be valid and effective, a waiver must be couched in  
clear and unequivocal terms which leave no doubt as to the
Furthermore, it must be emphasized that waiver is the
intention of a party to give up a right or benefit which legally
intentional relinquishment of a known right. Where one lacks
pertains to him. A waiver may not be attributed to a person
knowledge of a right, there is no basis upon which waiver of it
when its terms do not explicitly and clearly evince an intent to
can rest. Ignorance of a material fact negates waiver, and
abandon a right.[14] 
waiver cannot be established by a consent given under a
  mistake or misapprehension of fact.[17] 

In this case, we find that there was no waiver of hereditary  

rights. The Release and Waiver of Claim does not state with
In the present case, private respondents could not have
clarity the purpose of its execution. It merely states that
possibly waived their successional rights because they are yet
Remedios received P300,000.00 and an educational plan for
to prove their status as acknowledged illegitimate children of
her minor daughters "by way of financial assistance and in full
the deceased. Petitioner himself has consistently denied that
settlement of any and all claims of whatsoever nature and kind
private respondents are his co-heirs. It would thus be
x x x against the estate of the late Rufino Guy
inconsistent to rule that they waived their hereditary rights
Susim."[15] Considering that the document did not specifically
when petitioner claims that they do not have such right.
mention private respondents' hereditary share in the estate of
Hence, petitioner's invocation of waiver on the part of private
Sima Wei, it cannot be construed as a waiver of successional
respondents must fail. 
rights. 
 
 
Anent the issue on private respondents' filiation, we agree with
Moreover, even assuming that Remedios truly waived the
the Court of Appeals that a ruling on the same would be
hereditary rights of private respondents, such waiver will not
premature considering that private respondents have yet to
bar the latter's claim. Article 1044 of the Civil Code, provides: 
present evidence. Before the Family Code took effect, the
  governing law on actions for recognition of illegitimate children
was Article 285 of the Civil Code, to wit: 
ART. 1044. Any person having the free disposal of his property
may accept or repudiate an inheritance.   

  ART. 285. The action for the recognition of natural children

Any inheritance left to minors or incapacitated persons
may be accepted by their parents or guardians. Parents
or guardians may repudiate the inheritance left to their
wards only by judicial authorization. 
 
may be brought only during the lifetime of the presumed
parents, except in the following cases: 
 
(1) If the father or mother died during the minority of
the child, in which case the latter may file the action
before the expiration of four years from the attainment
of his majority; 

Page 59 of 304
 
(2) If after the death of the father or of the mother a
document should appear of which nothing had been heard and
in which either or both parents recognize the child. 
 
In this case, the action must be commenced within four years
from the finding of the document. (Emphasis supplied) 
 
We ruled in Bernabe v. Alejo[18] that illegitimate children who
were still minors at the time the Family Code took effect and
whose putative parent died during their minority are given the
right to seek recognition for a period of up to four years from
attaining majority age. This vested right was not impaired or
taken away by the passage of the Family Code.[19]  Article 173, except when the action is based on the second
 
On the other hand, Articles 172, 173 and 175 of the Family
Code, which superseded Article 285 of the Civil Code, provide: 
 
ART. 172. The filiation of legitimate children is established by
any of the following:  parent concerned, the action for recognition may be brought
(1) The record of birth appearing in the civil register or a final
judgment; or 
(2) An admission of legitimate filiation in a public document or
a private handwritten instrument and signed by the parent
concerned. 
 
In the absence of the foregoing evidence, the legitimate
filiation shall be proved by:  Court after a full-blown trial.
(1) The open and continuous possession of the status of a
legitimate child; or  petition for letters of administration, the trial court is not
 
(2) Any other means allowed by the Rules of Court and special
laws. 
ART. 173. The action to claim legitimacy may be brought by
the child during his or her lifetime and shall be transmitted to
the heirs should the child die during minority or in a state of
insanity. In these cases, the heirs shall have a period of five
years within which to institute the action. 
 
The action already commenced by the child shall survive
notwithstanding the death of either or both of the parties. 
 
ART. 175. Illegitimate children may establish their illegitimate
filiation in the same way and on the same, evidence as
legitimate children. 
 
The action must be brought within the same period specified in
paragraph of Article 172, in which case the action may be
brought during the lifetime of the alleged parent. 
 
Under the Family Code, when filiation of an illegitimate child is
established by a record of birth appearing in the civil register
or a final judgment, or an admission of filiation in a public
document or a private handwritten instrument signed by the
by the child during his or her lifetime. However, if the action is
based upon open and continuous possession of the status of
an illegitimate child, or any other means allowed by the rules
or special laws, it may only be brought during the lifetime of
the alleged parent. 
It is clear therefore that the resolution of the issue of
prescription depends on the type of evidence to be adduced by
private respondents in proving their filiation. However, it would
be impossible to determine the same in this case as there has
been no reception of evidence yet. This Court is not a trier of
facts. Such matters may be resolved only by the Regional Trial
 
While the original action filed by private respondents was a
precluded from receiving evidence on private respondents'
filiation. Its jurisdiction extends to matters incidental and
collateral to the exercise of its recognized powers in handling
the settlement of the estate, including the determination of the
status of each heir.[20] That the two causes of action, one to
compel recognition and the other to claim inheritance, may be
joined in one complaint is not new in our jurisprudence. [21] As
held in Briz v. Briz:[22] 
Page 60 of 304
 
The question whether a person in the position of the present
plaintiff can in any event maintain a complex action to compel
recognition as a natural child and at the same time to obtain
ulterior relief in the character of heir, is one which in the
opinion of this court must be answered in the affirmative,
provided always that the conditions justifying the joinder of the
two distinct causes of action are present in the particular case.
In other words, there is no absolute necessity requiring that
the action to compel acknowledgment should have been
instituted and prosecuted to a successful conclusion prior to
the action in which that same plaintiff seeks additional relief in
the character of heir. Certainly, there is nothing so peculiar to
the action to compel acknowledgment as to require that a rule
should be here applied different from that generally applicable
in other cases. x x x 
 
The conclusion above stated, though not heretofore explicitly
formulated by this court, is undoubtedly to some extent
supported by our prior decisions. Thus, we have held in
numerous cases, and the doctrine must be considered well
settled, that a natural child having a right to compel
acknowledgment, but who has not been in fact acknowledged,
may maintain partition proceedings for the division of the
inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil.,
5; Tiamson vs. Tiamson, 32 Phil., 62); and the same person
may intervene in proceedings for the distribution of the estate
of his deceased natural father, or mother (Capistrano vs.
Fabella, 8 Phil., 135; Conde vs. Abaya, 13 Phil., 249; Ramirez
vs. Gmur, 42 Phil., 855). In neither of these situations has it
been thought necessary for the plaintiff to show a prior decree
compelling acknowledgment. The obvious reason is that in
partition suits and distribution proceedings the other persons
who might take by inheritance are before the court; and the
declaration of heirship is appropriate to such proceedings. 
 
WHEREFORE, the instant petition is DENIED. The Decision
dated January 22, 2004 of the Court of Appeals in CA-G.R. SP
No. 79742 affirming the denial of petitioner's motion to
dismiss; and its Resolution dated May 25, 2004 denying
petitioner's motion for reconsideration, are AFFIRMED. Let
the records be REMANDED to the Regional Trial Court of
Makati City, Branch 138 for further proceedings.  That I am executing this affidavit to attest to the truth of the
SO ORDERED. 
Otamias vs Republic
EDNA MABUGAY-OTAMIAS, JEFFREN M. OTAMIAS AND
MINOR JEMWEL M. OTAMIAS, REPRESENTED BY THEIR
MOTHER EDNA MABUGAY-OTAMIAS, PETITIONERS, VS.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY
COL. VIRGILIO O. DOMINGO, IN HIS CAPACITY AS THE
COMMANDING OFFICER OF THE PENSION AND
GRATUITY MANAGEMENT CENTER (PGMC) OF THE
ARMED FORCES OF THE PHILIPPINES, RESPONDENT.
LEONEN, J.:
 
A writ of execution lies against the pension benefits of a retired
officer of the Armed Forces of the Philippines, which is the
subject of a deed of assignment drawn by him granting
support to his wife and five (5) children. The benefit of
exemption from execution of pension benefits is a statutory
right that may be waived, especially in order to comply with a
husband's duty to provide support under Article XV of the 1987
Constitution and the Family Code.
Petitioner Edna Mabugay-Otamias (Edna) and retired Colonel
Francisco B. Otamias (Colonel Otamias) were married on June
16, 1978 and had five (5) children.[1]
On September 2000, Edna and Colonel Otamias separated due
to his alleged infidelity.[2] Their children remained with Edna.[3]
On August 2002, Edna filed a Complaint-Affidavit against
Colonel Otamias before the Provost Marshall Division of the
Armed Forces of the Philippines.[4] Edna demanded monthly
support equivalent to 75% of Colonel Otamias' retirement
benefits.[5] Colonel Otamias executed an Affidavit, stating:
 
That sometime in August or September 2002, I was
summoned at the Office of the Provost Marshal, Philippine
Army, in connection with a complaint affidavit submitted to
said Office by my wife Mrs. Edna M. Otamias signifying her
intention 75% of my retirement benefits from the AFP;
That at this point, I can only commit 50% of my retirement
benefits to be pro-rated among my wife and five (5) children;
That in order to implement this compromise, I am willing to
enter into Agreement with my wife covering the same;
foregoing facts and whatever legal purpose it may serve. [6]
On February 26, 2003, Colonel Otamias executed a Deed of
Assignment where he waived 50% of his salary and pension
benefits in favor of Edna and their children.[7] The Deed of
Assignment was considered by the parties as a compromise
agreement.[8] It stated:
Page 61 of 304
 appropriate court."[16]
th
This Assignment, made and executed unto this 26  day of
February 2003 at Fort Bonifacio, Makati City, by the Heeding the advice of the AFP PGMC, Edna, on behalf of
undersigned LTC Francisco B. Otamias, 0-0-111045 (INP) PA, herself and Jeffren M. Otamias and Jemwel M. Otamias (Edna,
of legal age, married and presently residing at Dama De Noche et al.), filed before the Regional Trial Court of Cagayan de Oro,
St., Pembo, Makati City. Misamis Oriental an action for support, docketed as F.C. Civil
Case No. 2006-039.[17]
 
The trial court's Sheriff tried to serve summons on Colonel
WITNESSETH
Otamias several times, to no avail.[18] Substituted service was
resorted to.[19] Colonel Otamias was subsequently declared in
default for failure to file a responsive pleading despite order of
WHEREAS, the undersigned affiant is the legal husband of
the trial court.[20]
EDNA M. OTAMIAS and the father of Julie Ann, Jonathan,
Jennifer, Jeffren and Jemwel all residing at Patag, Cagayan de
The trial court ruled in favor of Edna, et al. and ordered the
Oro City;
automatic deduction of the amount of support from the
monthly pension of Colonel Otamias.[21]
WHEREAS, the undersigned will be retiring from the military
service and expects to receive retirement benefits from the
The dispositive portion of the trial court's Decision stated:
Armed Forces of the Philippines;
 
WHEREAS, the undersigned had expressed his willingness to
give a share in his retirement benefits to my wife and five (5) ALL THE FOREGOING CONSIDERED, and in consonance with
abovenamed children, the legal obligation of the defendant to the plaintiffs, the
Armed Forces of the Philippines, through its Finance Center
NOW, THEREFORE, for and in consideration of the foregoing and/or appropriate Finance Officer thereof, is thereby ordered
premises, the undersigned hereby stipulated the following: to release to Edna Mabugay Otamias and minor Jemwel M.
  Otamias, herein represented by his mother Edna, their fifty
(50%) per cent share of each of the monthly pension due to
1. That the undersigned will give to my legal wife and five (5)
Colonel Francisco B. Otamias, AFP PA (Retired).
children FIFTY PERCENT (50%) of my retirement benefits to
be pro rated among them.
Defendant Francisco Otamias is also ordered to pay plaintiff
Edna M. Otamias, fifty (50%) per cent of whatever retirement
2. That a separate check(s) be issued and to be drawn and
benefits he has already received from the Armed Forces of the
encash [sic] in the name of the legal wife and five (5) children
Philippines AND the arrears in support, effective January 2006
pro-rating the fifty (50%) percent of my retirement benefits.
up to the time plaintiff receives her share direct from the
Finance Center of the Armed Forces of the Philippines.
IN WITNESS WHEREOF, I have hereunto set my hand this
IT IS SO ORDERED.[22]
26th day of February 2003 at Fort Bonifacio, Makati City.[9]
 
Colonel Otamias retired on April 1, 2003. [10]
The Armed Forces of the Philippines, through the Office of the
Judge Advocate General, filed a Manifestation/Opposition[23] to
The agreement was honored until January 6, 2006.[11] Edna
the Decision of the trial court, but it was not given due course
alleged that "the A[rmed] F[orces] [of the] Philippines]
due to its late filing.[24]
suddenly decided not to honor the agreement"[12] between
Colonel Otamias and his legitimate family.
Edna, et al., through counsel, filed a Motion for Issuance of
Writ of Execution[25] dated February 22, 2008. The trial court
In a letter[13] dated April 3, 2006, the Armed Forces of the
granted the Motion, and a writ of execution was issued by the
Philippines Pension and Gratuity Management Center (AFP
trial court on April 10, 2008.[26]
PGMC) informed Edna that a court order was required for the
AFP PGMC to recognize the Deed of Assignment.[14]
The Armed Forces of the Philippines Finance Center (AFP
Finance Center), tlirough the Office of the Judge Advocate
In another letter[15] dated April 17, 2006, the AFP PGMC
General, filed a Motion to Quash[27] the writ of execution and
reiterated that it could not act on Edna's request to receive a
argued that the AFP Finance Center's duty to disburse benefits
portion of Colonel Otamias' pension "unless ordered by [the]
Page 62 of 304
is ministerial. It releases benefits only upon the AFP PGMC's
approval.[28]
The trial court denied the Motion to Quash and held that:
 
Under the law and existing jurisprudence, the "right to
support" is practically equivalent to the "right to life." The
"right to life" always takes precedence over "property rights."
The "right to support/life" is also a substantive right which
always takes precedence over technicalities/procedural rules. It
being so, technical rules must yield to substantive justice.
Besides, this Court's Decision dated February 27, 2007 has
long acquired finality, and as such, is ripe for
enforcement/execution.
THE FOREGOING CONSIDERED, the instant Motion is hereby
DENIED.[29]
The AFP PGMC moved for reconsideration of the order denying
the Motion to Quash,[30] but the Motion was also denied by the
trial court in the Order[31] dated August 6, 2008.
A Notice of Garnishment was issued by the trial court on July
15, 2008 and was received by the AFP PGMC on September 9,
2008.[32]
The AFP PGMC filed before the Court of Appeals a Petition for
Certiorari and Prohibition.[33]
The Court of Appeals granted[34] the Petition for Certiorari and
Prohibition and partially nullified the trial court's Decision
insofar as it directed the automatic deduction of support from
the pension benefits of Colonel Otamias.
The Court of Appeals discussed that Section 31 [35] of
Presidential Decree No. 1638, otherwise known as the AFP
Military Personnel Retirement and Separation Decree of 1979,
"provides for the exemption of the monthly pension of retired
military personnel from execution and attachment[,]" [36] while
Rule 39, Section 13 of the Rules of Court provides:
 
SEC. 13. Property exempt from execution. Except as
otherwise expressly provided by law, the following property,
and no other, shall be exempt from execution:
 
....
(1) The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from the
Government[.]
 
The Court of Appeals also cited Pacific Products, Inc. vs. Ong:
[37]
 
[M]oneys sought to be garnished, as long as they remain in
the hands of the disbursing officer of the Government, belong
to the latter, although the defendant in garnishment may be
entitled to a specific portion thereof. And still another reason
which covers both of the foregoing is that every consideration
of public policy forbids it.[38]
In addition, the AFP PGMC was not impleaded as a party in the
action for support; thus, it is not bound by the Decision. [39]
The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, the petition is GRANTED. The assailed
Decision of the Regional Trial Court, Branch 19, Cagayan de
Oro City dated February 27, 2007 in Civil Case No. 2006-039
is PARTIALLY NULLIFIED in so far as it directs the Armed
Forces of the Philippines Finance Center to automatically
deduct the financial support in favor of private respondents,
Edna Otamias and her children Jeffren and Jemwel Otamias,
from the pension benefits of Francisco Otamias, a retired
military officer. The Order dated June 10, 2008, Order dated
August 6, 2008 and Writ of Execution dated April 10, 2008, all
issued by the court a quo are likewise SET ASIDE. Perforce,
let a writ of permanent injunction issue enjoining the
implementation of the assailed Writ of Execution dated April
10, 2008 and the corresponding Notice of Garnishment dated
July 15, 2008. No pronouncement as to costs.
SO ORDERED.[40] (Emphasis in the original)
 
Edna, et al. moved for reconsideration, but the Motion was
denied by the Court of Appeals.[41]
Edna, et al. filed before this Court a Petition for Review on
Certiorari[42] on November 11, 2009. In the Resolution[43] dated
January 20, 2010, this Court required respondent to comment.
In the Resolution[44] dated August 4, 2010, this Court noted the
Comment filed by the Office of the Solicitor General and
required Edna, et al. to file a reply.[45]
Page 63 of 304
A Reply[46] was filed on September 27, 2010.
Edna, et al. argue that the Deed of Assignment Colonel
Otamias executed Is valid and legal.[47]
They claim that Section 31 of Presidential Decree No.
1638[48] "does not include support";[49] hence, the retirement
benefits of Colonel Otamias can be executed upon.
Edna, et al. also argue that the Court of Appeals erred in
granting respondent's Petition because it effectively rendered
the Deed of Assignment of no force and effect.[50] On the other
hand, the trial court's Decision implements the Deed of
Assignment and Edna, et al.'s right to support.[51]
Further, the AFP PGMC had already recognized the validity of
the agreement and had made payments to them until it
suddenly stopped payment.[52] After Edna, et al. obtained a
court order, the AFP PGMC still refused to honor the Deed of
Assignment.[53]
The Armed Forces of the Philippines, through the Office of the
Solicitor General, argues that it was not a party to the case
filed by Edna, et al.[54] Thus, "it cannot be compelled to release
part of the monthly pension benefits of retired Colonel Otamias
in favor of [Edna, et al]."[55]
The Office of the Solicitor General avers that the AFP PGMC
never submitted itself to the jurisdiction of the trial court. [56] It
was not a party to the case as the trial court never acquired
jurisdiction over the AFP PGMC.[57]
The Office of the Solicitor General also argues that Section 31
of Presidential Decree No. 1638 and Rule 39, Section 13(1) of
the Rules of Court support the Court of Appeals Decision that
Colonel Otamias' pension benefits are exempt from execution.
[58]
Section 31 of Presidential Decree No. 1638 "does not deprive
the survivor/s of a retired or separated officer or enlisted man
of their right to support."[59] Rather, "[w]hat is prohibited is for
respondent [AFP PGMC] to segregate a portion of the pension
benefit in favor of the retiree's family while still in the hands of
the A[rmed] F[orces] [of the] Philippines]." [60]
Thus, the AFP PGMC "cannot be compelled to directly give or
issue a check in favor of [Edna, et al.] out of the pension
gratuity of Col. Otamias."[61]
In their Reply,[62] Edna, et al. argue that the Armed Forces of
the Philippines should not be allowed to question the legal
recourse they took because it was an officer of the Armed
Forces of the Philippines who had advised them to file an
action for support.[63]
They argue that the phrase "while in the active service" in
Section 31 of Presidential Decree No. 1638 refers to the "time
when the retired officer incurred his accountabilities in favor of
a private creditor[,]"[64] who is a third person. The phrase also
"serves as a timeline designed to separate the debts incurred
by the retired officer after his retirement from those which he
incurred prior thereto."[65]
Further, the accountabilities referred to in Section 31 of
Presidential Decree No. 1638 refer to debts or loans, not to
support.[66]
The issues for resolution are:
First, whether the Court of Appeals erred in ruling that the AFP
Finance Center cannot be directed to automatically deduct the
amount of support needed by the legitimate family of Colonel
Otamias; and
Second, whether Colonel Otamias' pension benefits can be
executed upon for the financial support of his legitimate family.
The Petition is granted.
 
I
Article 6 of the Civil Code provides:
 
Article 6. Rights may be waived, unless the waiver is contrary
to law, public order, public policy, morals or good customs, or
prejudicial to a third person with a right recognized by law.
 
The concept of waiver has been defined by this Court as:
a voluntary and intentional relinquishment or abandonment of
a known existing legal right, advantage, benefit, claim or
privilege, which except for such waiver the party would have
enjoyed; the voluntary abandonment or surrender, by a
capable person, of a right known by him to exist, with the
intent that such right shall be surrendered and such person
forever deprived of its benefit; or such conduct as warrants an
inference of the relinquishment of such right; or the intentional
doing of an act inconsistent with claiming it. [67]
 
In determining whether a statutory right can be waived, this
Court is guided by the following pronouncement:
Page 64 of 304
 
[T]he doctrine of waiver extends to rights and privileges of any
character, and, since the word 'waiver' covers every
conceivable right, it is the general rule that a person may
waive any matter which affects his property, and any alienable
right or privilege of which he is the owner or which belongs to
him or to which he is legally entitled, whether secured by
contract, conferred with statute, or guaranteed by
constitution, provided such rights and privileges rest in
the individual, are intended for his sole benefit, do not
infringe on the rights of others, and further provided
the waiver of the right or privilege is not forbidden by
law, and does not contravene public policy; and the
principle is recognized that everyone has a right to waive, and
agree to waive, the advantage of a law or rule made solely for
the benefit and protection of the individual in his private
capacity, if it can be dispensed with and relinquished without
infringing on any public right, and without detriment to the
community at large[.][68] (Emphasis in the original)
When Colonel Otamias executed the Deed of Assignment, he
effectively waived his right to claim that his retirement benefits
are exempt from execution. The right to receive retirement
benefits belongs to Colonel Otamias. His decision to waive a
portion of his retirement benefits does not infringe on the right
of third persons, but even protects the right of his family to
receive support.
In addition, the Deed of Assignment should be considered as
the law between the parties, and its provisions should be
respected in the absence of allegations that Colonel Otamias
was coerced or defrauded in executing it. The general rule is
that a contract is the law between parties and parties are free
to stipulate terms and conditions that are not contrary to law,
morals, good customs, public order, or public policy. [69]
The Deed of Assignment executed by Colonel Otamias was not
contrary to law; it was in accordance with the provisions on
support in the Family Code. Hence, there was no reason for
the AFP PGMC not to recognize its validity.
Further, this Court notes that the AFP PGMC granted the
request for support of the wives of other retired military
personnel in a similar situation as that of petitioner in this
case. Attached to the Petition are the affidavits of the wives of
retired members of the military, who have received a portion
of their husbands' pensions.[70]
One affidavit stated:
4. That when I consulted and appeared before the Office of
PGMC, I was instructed to submit a Special Power of Authority
from my husband so they can release part of his pension to
me;
 
5. That my husband signed the Special Power of Attorney at
the PGMC ceding 50% of his pension to me; the SPA form was
given to us by the PGMC and the same was signed by my
husband at the PGMC;. . .
....
 
7. That the amount was deposited directly to my account by
the PGMC- Finance Center AFP out of the pension of my
husband;
8. That only the Special Power of Attorney was required by the
PGMC in order for them to segregate my share of my
husband's pension and deposit the same to my account[.] [71]
 
The other affidavit stated:
8. That my husband signed the Special Power of Attorney at
the PGMC ceding 50% of his pension to me; the SPA form was
given to us by the PGMC and the same was signed by my
husband at the PGMC[.][72]
 
In addition, the AFP PGMC's website informs the public of the
following procedure:
Tanong: My husband-retiree cut-off my allotment. How can I
have it restored?
Sagot: Pension benefits are separate properties of the retiree
and can not [sic] be subject of a Ocurt [sic] Order for
execution nor can they be assigned to any third party (Sec 31,
PD 1638, as amended). However, a valid Special Power of
Attorney (SPA) by the retiree himself empowering the AFP
Finance Center to deduct certain amount from his lumpsum
[sic] or pension pay as the case maybe, as a rule, is a valid
waiver of rights which can be effectively implemented by the
AFP F[inance] C[enter].[73]
Page 65 of 304
 
Clearly, the AFP PGMC allows deductions from a retiree's
pension for as long as the retiree executes a Special Power of
Attorney authorizing the AFP PGMC to deduct a certain amount
for the benefit of the retiree's beneficiary.
It is curious why Colonel Otamias was allowed to execute a
Deed of Assignment by the administering officer when, in the
first place, the AFP PGMC's recognized procedure was to
execute a Special Power of Attorney, which would have been
the easier remedy for Colonel Otamias' family.
Instead, Colonel Otamias' family was forced to incur litigation
expenses just to be able to receive the financial support that
Colonel Otamias was willing to give to Edna, et al.
II
Section 31 of Presidential Decree No. 1638 provides:
 
Section 31. The benefits authorized under this Decree, except
as provided herein, shall not be subject to attachment,
garnishment, levy, execution or any tax whatsoever; neither
shall they be assigned, ceded, or conveyed to any third
person: Provided, That if a retired or separated officer or
enlisted man who is entitled to any benefit under this Decree
has unsettled money and/or property accountabilities incurred
while in the active service, not more than fifty per centum of
the pension gratuity or other payment due such officer or
enlisted man or his survivors under this Decree may be
withheld and be applied to settle such accountabilities.
 
Under Section 31, Colonel Otamias' retirement benefits are
exempt from execution. Retirement benefits are exempt from
execution so as to ensure that the retiree has enough funds to
support himself and his family.
On the other hand, the right to receive support is provided
under the Family Code. Article 194 of the Family Code defines
support as follows:
Art. 194. Support comprises everything indispensable for
sustenance, dwelling, clothing, medical attendance, education
and transportation, in keeping with the financial capacity of the
family.
The education of the person entitled to be supported referred
to in the preceding paragraph shall include his schooling or
training for some profession, trade or vocation, even beyond
the age of majority. Transportation shall include expenses in
going to and from school, or to and from place of work.
 
The provisions of the Family Code also state who are obliged
to give support, thus:
Art. 195. Subject to the provisions of the succeeding articles,
the following are obliged to support each other to the whole
extent set forth in the preceding article:
(1) The spouses;
(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and
illegitimate children of the latter;
(4) Parents and their illegitimate children and the legitimate
and illegitimate children of the latter; and
(5) Legitimate brothers and sisters, whether of the full or half-
blood.
Art. 196. Brothers and sisters not legitimately related,
whether of the full or half-blood, are likewise bound to support
each other to the full extent set forth in Article 194 except only
when the need for support of the brother or sister, being of
age, is due to a cause imputable to the claimant's fault or
negligence.
Art. 197. For the support of legitimate ascendants;
descendants, whether legitimate or illegitimate; and brothers
and sisters, whether legitimately or illegitimately related, only
the separate property of the person obliged to give support
shall be answerable provided that in case the obligor has no
separate property, the absolute community or the conjugal
partnership, if financially capable, shall advance the support,
which shall be deducted from the share of the spouses obliged
upon the liquidation of the absolute community or of the
conjugal partnership[.]
The provisions of Rule 39 of the Rules of Court that are
applicable to this case are in apparent conflict with each other.
Section 4 provides that judgments in actions for support are
immediately executory. On the other hand, Section 13(1)
provides that the right to receive pension from government is
exempt from execution, thus:
Page 66 of 304

RULE 39
EXECUTION, SATISFACTION, AND EFFECT OF JUDGMENTS
....
SEC. 4. Judgments not stayed by appeal. — Judgments in
actions for injunction, receivership, accounting and support,
and such other judgments as are now or may hereafter be
declared to be immediately executory, shall be enforceable
after their rendition and shall not, be stayed by an appeal
taken therefrom, unless otherwise ordered by the trial court .
On appeal therefrom, the appellate court in its discretion may
make an order suspending, modifying, restoring or granting
the injunction, receivership, accounting, or award of support.
The stay of execution shall be upon such terms as to bond or
otherwise as may be considered proper for the security or
protection of the rights of the adverse party.
....
SEC. 13. Property exempt from execution. — Except as
otherwise expressly provided by law, the following property,
and no other, shall be exempt from execution:
....
(1) The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from the
Government;
....
But no article or species of property mentioned in this section
shall be exempt from execution issued upon a judgment
recovered for its price or upon a judgment of foreclosure of a
mortgage thereon. (Emphasis supplied)
Based on the Family Code, Colonel Otamias is obliged to give
support to his family, petitioners in this case. However, he
retired in 2003, and his sole source of income is his pension.
Judgments in actions for support are immediately executory,
yet under Section 31 of Presidential Decree No. 1638, his
pension cannot be executed upon.
However, considering that Colonel Otamias has waived a
portion of his retirement benefits through his Deed of
Assignment, resolution on the conflict between the civil code
provisions on support and Section 31 of Presidential Decree
No. 1638 should be resolved in a more appropriate case.
III
Republic v. Yahon[74] is an analogous case because it involved
the grant of support to the spouse of a retired member of the
Armed Forces of the Philippines.
In Republic v. Yahon, Daisy R. Yahon filed a Petition for the
Issuance of Protection Order under Republic Act No. 9262.
[75]
 She alleged that she did not have any source of income
because her husband made her resign from her job.[76] The
trial court issued a temporary restraining order, a portion of
which stated:
To insure that petitioner [Daisy R. Yahon] can receive a
fair share of respondent's retirement and other
benefits, the following agencies thru their heads are
directed to WITHHOLD any retirement, pension [,] and
other benefits of respondent, S/SGT. CHARLES A.
YAHON, a member of the Armed Forces of the Philippines
assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro
City until further orders from the court:
1. Commanding General/Officer of the Finance Center of the
Armed Forces of the Philippines, Camp Emilio Aguinaldo,
Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon
City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de
Oro City.[77] (Emphasis in the original)
 
The trial court subsequently granted Daisy's Petition and issued
a permanent protection order[78] and held:
Pursuant to the order of the court dated February 6, 2007,
respondent, S/Sgt. Charles A. Yahon is directed to give it to
petitioner 50% of whatever retirement benefits and other
claims that may be due or released to him from the
government and the said share of petitioner shall be
automatically deducted from respondent's benefits and claims
and be given directly to the petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding
General/Officer of Finance Center of the Armed Forces of the
Philippines, Camp Emilio Aguinaldo, Quezon City; the
Management of RSBS, Camp Emilio Aguinaldo, Quezon City
Page 67 of 304
and the Regional Manager of PAG-IBIG, Mortola St., Cagayan
de Oro City for their guidance and strict compliance. [79]
 
In that case, the AFP Finance Center filed before the trial court
a Manifestation and Motion stating that "it was making a
limited and special appearance" [80] and argued that the trial
court did not acquire jurisdiction over the Armed Forces of the
Philippines. Hence, the Armed Forces of the Philippines is not
bound by the trial court's ruling.[81]
The Armed Forces of the Philippines also cited Pacific Products,
where this Court ruled that:
A rule, which has never been seriously questioned, is that
money in the hands of public officers, although it may be due
government employees, is not liable to the creditors of these
employees in the process of garnishment. One reason is, that
the State, by virtue of its sovereignty may not be sued in its
own courts except by express authorization by the Legislature,
and to subject its officers to garnishment would be to permit
indirectly what is prohibited directly. Another reason is that
moneys sought to be garnished, as long as they remain in the
hands of the disbursing officer of the Government, belong to
the latter, although the defendant in garnishment may be
entitled to a specific portion thereof. And still another reason
which covers both of the foregoing is that every consideration
of public policy forbids it.[82] (Citations omitted)
 
This Court in Republic v. Yahon denied the Petition and
discussed that because Republic Act No. 9262 is the later
enactment, its provisions should prevail,[83] thus:
We hold that Section 8(g) of R.A. No. 9262, being a later
enactment, should be construed as laying down an exception
to the general rule above stated that retirement benefits are
exempt from execution. The law itself declares that the court
shall order the withholding of a percentage of the income or
salary of the respondent by the employer, which shall be
automatically remitted directly to the woman
"[n]otwithstanding other laws to the contrary"[84] (Emphasis in
the original)
 
IV
The 1987 Constitution gives much importance to the family as
the basic unit of society, such that Article XV[85] is devoted to it.
The passage of the Family Code further implemented Article
XV of the Constitution. This Court has recognized the
importance of granting support to minor children, provided
that the filiation of the child is proven. In this case, the filiation
of Jeffren M. Otamias and Jemwel M. Otamias was admitted by
Colonel Otamias in the Deed of Assignment. [86]
Even before the passage of the Family Code, this Court has
given primary consideration to the right of a child to receive
support. In Samson v. Yatco,[87] a petition for support was
dismissed with prejudice by the trial court on the ground that
the minor asking for support was not present in court during
trial. An appeal was filed, but it was dismissed for having been
filed out of time. This Court relaxed the rules of procedure and
held that "[i]f the order of dismissal with prejudice of the
petition for support were to stand, the petitioners would be
deprived of their right to present and nature support."[88]
In Gan v. Reyes,[89] Augustus Caezar R. Gan (Gan) questioned
the trial court's decision requiring him to give support and
claimed that that he was not the father of the minor seeking
support. He also argued that he was not given his day in court.
This Court held that Gan's arguments were meant to delay the
execution of the judgment, and that in any case, Gan himself
filed a Motion for Leave to Deposit in Court Support Pendente
Lite:
In all cases involving a child, his interest and welfare are
always the paramount concerns. There may be instances
where, in view of the poverty of the child, it would be a
travesty of justice to refuse him support until the decision of
the trial court attains finality while time continues to slip away.
An excerpt from the early case of De Leon v. Soriano is
relevant, thus:
The money and property adjudged for support and education
should and must be given presently and without delay because
if it had to wait the final judgment, the children may in the
meantime have suffered because of lack of food or have
missed and lost years in school because of lack of funds. One
cannot delay the payment of such funds for support and
education for the reason that if paid long afterwards, however
much the accumulated amount, its payment cannot cure the
evil and repair the damage caused. The children with such
belated payment for support and education cannot act as
gluttons and eat voraciously and unwisely, afterwards, to make
up for the years of hunger and starvation. Neither may they
enrol in several classes and schools and take up numerous
subjects all at once to make up for the years they missed in
school, due to non-payment of the funds when needed.[90]
Page 68 of 304
V Branch 8. The petition, docketed as SP Case No. 02-105207,
impleaded the civil registrar of Manila as respondent. 

The non-inclusion of the AFP PGMC or the AFP Finance Center  

in the action for support was proper, considering that both the
AFP PGMC and the AFP Finance Center are not the persons
obliged to give support to Edna, et al. Thus, it was not a real
party-in-interest.[91] Nor was the AFP PGMC a necessary party
because complete relief could be obtained even without
impleading the AFP PGMC.[92]
Petitioner alleged in his petition that he was born in the City of
Manila to the spouses Melecio Petines Silverio and Anita Aquino
Dantes on April 4, 1962. His name was registered as "Rommel
Jacinto Dantes Silverio" in his certificate of live birth (birth
certificate). His sex was registered as "male." 

WHEREFORE, the Petition is GRANTED. The Court of
Appeals Decision dated May 22, 2009 and Resolution dated
August 11, 2009 in CA-G.R. SP No. 02555-MIN
are REVERSED and SET ASIDE. The Regional Trial Court
Decision dated February 27, 2007 in F.C. Civil Case No. 2006-
039 is REINSTATED.
SO ORDERED.
Silverio vs Republic
ROMMEL JACINTO DANTES SILVERIO, Petitioner,
versus REPUBLIC OF THE PHILIPPINES, Respondent.
CORONA, J.: 
When God created man, He made him in the likeness of God;
He created them male and female. (Genesis 5:1-2) 
 
He further alleged that he is a male transsexual, that is,
"anatomically male but feels, thinks and acts as a female" and
that he had always identified himself with girls since childhood.
[1] Feeling trapped in a man's body, he consulted several
doctors in the United States. He underwent psychological
examination, hormone treatment and breast augmentation. His
attempts to transform himself to a "woman" culminated on
January 27, 2001 when he underwent sex reassignment
surgery[2] in Bangkok, Thailand. He was thereafter examined
by Dr. Marcelino Reysio-Cruz, Jr., a plastic and reconstruction
surgeon in the Philippines, who issued a medical certificate
attesting that he (petitioner) had in fact undergone the
procedure. 
From then on, petitioner lived as a female and was in fact
engaged to be married. He then sought to have his name in
his birth certificate changed from "Rommel Jacinto" to "Mely,"
and his sex from "male" to "female." 

Amihan gazed upon the bamboo reed planted by Bathala and  

she heard voices coming from inside the bamboo. "Oh North
An order setting the case for initial hearing was published in
Wind! North Wind! Please let us out!," the voices said. She
the People's Journal Tonight, a newspaper of general
pecked the reed once, then twice. All of a sudden, the bamboo
circulation in Metro Manila, for three consecutive weeks.[3]
cracked and slit open. Out came two human beings; one was a
Copies of the order were sent to the Office of the Solicitor
male and the other was a female. Amihan named the man
General (OSG) and the civil registrar of Manila. 
"Malakas" (Strong) and the woman "Maganda" (Beautiful).
(The Legend of Malakas and Maganda)   
  On the scheduled initial hearing, jurisdictional requirements
were established. No opposition to the petition was made. 
When is a man a man and when is a woman a woman? In
particular, does the law recognize the changes made by a  
physician using scalpel, drugs and counseling with regard to a
person's sex? May a person successfully petition for a change During trial, petitioner testified for himself. He also presented
of name and sex appearing in the birth certificate to reflect the Dr. Reysio-Cruz, Jr. and his American fiance Richard P. Edel, as
result of a sex reassignment surgery?  witnesses. 

   

On November 26, 2002, petitioner Rommel Jacinto Dantes On June 4, 2003, the trial court rendered a decision[4] in favor
Silverio filed a petition for the change of his first name and sex of petitioner. Its relevant portions read: 
in his birth certificate in the Regional Trial Court of Manila,

Page 69 of 304
 
Petitioner filed the present petition not to evade any law or
judgment or any infraction thereof or for any unlawful motive
but solely for the purpose of making his birth records
compatible with his present sex.  of Appeals granted the Republic's petition, set aside the
The sole issue here is whether or not petitioner is entitled to
the relief asked for. 
The [c]ourt rules in the affirmative. 
 
On February 23, 2006, the Court of Appeals[7] rendered a
decision[8] in favor of the Republic. It ruled that the trial
court's decision lacked legal basis. There is no law allowing the
change of either name or sex in the certificate of birth on the
ground of sex reassignment through surgery. Thus, the Court
decision of the trial court and ordered the dismissal of SP Case
No. 02-105207. Petitioner moved for reconsideration but it was
denied.[9] Hence, this petition. 
Petitioner essentially claims that the change of his name and
sex in his birth certificate is allowed under Articles 407 to 413
of the Civil Code, Rules 103 and 108 of the Rules of Court and
RA 9048.[10] 

Firstly, the [c]ourt is of the opinion that granting the petition  

would be more in consonance with the principles of justice and
The petition lacks merit. 
equity. With his sexual [re-assignment], petitioner, who has
always felt, thought and acted like a woman, now possesses
 
the physique of a female. Petitioner's misfortune to be trapped
in a man's body is not his own doing and should not be in any A Person's First Name Cannot Be Changed On the
way taken against him.  Ground of Sex Reassignment 

   

Likewise, the [c]ourt believes that no harm, injury [or]
prejudice will be caused to anybody or the community in
granting the petition. On the contrary, granting the petition
would bring the much-awaited happiness on the part of the
petitioner and her [fiance] and the realization of their dreams. 
Petitioner invoked his sex reassignment as the ground for his
petition for change of name and sex. As found by the trial
court: 
 

  Petitioner filed the present petition not to evade any law or

Finally, no evidence was presented to show any cause or
ground to deny the present petition despite due notice and
publication thereof. Even the State, through the [OSG] has not
seen fit to interpose any [o]pposition. 
judgment or any infraction thereof or for any unlawful motive
but solely for the purpose of making his birth records
compatible with his present sex. (emphasis supplied) 
 

  Petitioner believes that after having acquired the physical

features of a female, he became entitled to the civil registry
WHEREFORE, judgment is hereby rendered GRANTING the changes sought. We disagree. 
petition and ordering the Civil Registrar of Manila to change
the entries appearing in the Certificate of Birth of [p]etitioner,  
specifically for petitioner's first name from "Rommel Jacinto"
to MELY and petitioner's gender from "Male" to FEMALE. [5]  The State has an interest in the names borne by individuals
and entities for purposes of identification.[11] A change of
  name is a privilege, not a right.[12] Petitions for change of
name are controlled by statutes.[13] In this connection, Article
On August 18, 2003, the Republic of the Philippines (Republic), 376 of the Civil Code provides: 
thru the OSG, filed a petition for certiorari in the Court of
Appeals.[6] It alleged that there is no law allowing the change  
of entries in the birth certificate by reason of sex alteration. 
ART. 376. No person can change his name or surname without
  judicial authority. 

 
Page 70 of 304
This Civil Code provision was amended by RA 9048 (Clerical
Error Law). In particular, Section 1 of RA 9048 provides: 
 
SECTION 1. Authority to Correct Clerical or Typographical Error
and Change of First Name or Nickname. - No entry in a civil
register shall be changed or corrected without a judicial order,
except for clerical or typographical errors and change of first
name or nickname which can be corrected or changed by the
concerned city or municipal civil registrar or consul general in
accordance with the provisions of this Act and its implementing
rules and regulations. 
 
RA 9048 now governs the change of first name.[14] It vests
the power and authority to entertain petitions for change of
first name to the city or municipal civil registrar or consul
general concerned. Under the law, therefore, jurisdiction over
applications for change of first name is now primarily lodged
with the aforementioned administrative officers. The intent and
effect of the law is to exclude the change of first name from
the coverage of Rules 103 (Change of Name) and 108
(Cancellation or Correction of Entries in the Civil Registry) of
the Rules of Court, until and unless an administrative petition
for change of name is first filed and subsequently denied.[15]
It likewise lays down the corresponding venue,[16] form[17]
and procedure. In sum, the remedy and the proceedings
regulating change of first name are primarily administrative in
nature, not judicial.  was also filed in the wrong venue as the proper venue was in
 
RA 9048 likewise provides the grounds for which change of
first name may be allowed:  petitioner's petition in so far as the change of his first name
SECTION 4. Grounds for Change of First Name or Nickname. -
The petition for change of first name or nickname may be
allowed in any of the following cases:  Certificate As To Sex On the Ground of Sex
(1) The petitioner finds the first name or nickname to be
ridiculous, tainted with dishonor or extremely difficult to write
or pronounce;  certificate is a legal issue and the court must look to the
(2) The new first name or nickname has been habitually and
continuously used by the petitioner and he has been publicly
known by that first name or nickname in the community; or  ART. 412. No entry in the civil register shall be changed or
(3) The change will avoid confusion. 
 
Petitioner's basis in praying for the change of his first name
was his sex reassignment. He intended to make his first name
compatible with the sex he thought he transformed himself
into through surgery. However, a change of name does not
alter one's legal capacity or civil status.[18] RA 9048 does not
sanction a change of first name on the ground of sex
reassignment. Rather than avoiding confusion, changing
petitioner's first name for his declared purpose may only create
grave complications in the civil registry and the public interest. 
 
Before a person can legally change his given name, he must
present proper or reasonable cause or any compelling reason
justifying such change.[19] In addition, he must show that he
will be prejudiced by the use of his true and official name.[20]
In this case, he failed to show, or even allege, any prejudice
that he might suffer as a result of using his true and official
name. 
 
In sum, the petition in the trial court in so far as it prayed for
the change of petitioner's first name was not within that court's
primary jurisdiction as the petition should have been filed with
the local civil registrar concerned, assuming it could be legally
done. It was an improper remedy because the proper remedy
was administrative, that is, that provided under RA 9048. It
the Office of the Civil Registrar of Manila where his birth
certificate is kept. More importantly, it had no merit since the
use of his true and official name does not prejudice him at all.
For all these reasons, the Court of Appeals correctly dismissed
was concerned. 
No Law Allows The Change of Entry In The Birth
Reassignment 
The determination of a person's sex appearing in his birth
statutes.[21] In this connection, Article 412 of the Civil Code
provides: 
corrected without a judicial order. 
Page 71 of 304
Together with Article 376 of the Civil Code, this provision was
amended by RA 9048 in so far as clerical or typographical
errors are involved. The correction or change of such matters
can now be made through administrative proceedings and
without the need for a judicial order. In effect, RA 9048
removed from the ambit of Rule 108 of the Rules of Court the
correction of such errors.[22] Rule 108 now applies only to
substantial changes and corrections in entries in the civil
register.[23]  of a minor; and (16) changes of name.
Section 2(c) of RA 9048 defines what a "clerical or
typographical error" is:  407 of the Civil Code include even those that occur after birth.
 
SECTION 2. Definition of Terms. - As used in this Act, the
following terms shall mean: 
 
xxx xxx xxx  something with something else of the same kind or with
(3) "Clerical or typographical error" refers to a mistake
committed in the performance of clerical work in writing,
copying, transcribing or typing an entry in the civil register that
is harmless and innocuous, such as misspelled name or
misspelled place of birth or the like, which is visible to the eyes
or obvious to the understanding, and can be corrected or
changed only by reference to other existing record or
records: Provided, however, That no correction must
involve the change of nationality, age, status or sex of the
petitioner. (emphasis supplied)  marriage, declarations of nullity of marriages, adoptions,
Under RA 9048, a correction in the civil registry involving the
change of sex is not a mere clerical or typographical error. It is
a substantial change for which the applicable procedure is Rule
108 of the Rules of Court. 
 
The entries envisaged in Article 412 of the Civil Code and
correctable under Rule 108 of the Rules of Court are those
provided in Articles 407 and 408 of the Civil Code:[24] 
 
ART. 407. Acts, events and judicial decrees concerning the civil
status of persons shall be recorded in the civil register. 
 
ART. 408. The following shall be entered in the civil register:  ordinarily terminable at his own will, such as his being
 
(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5)
annulments of marriage; (6) judgments declaring marriages
void from the beginning; (7) legitimations; (8) adoptions; (9)
acknowledgments of natural children; (10) naturalization; (11)
loss, or (12) recovery of citizenship; (13) civil interdiction; (14)
judicial determination of filiation; (15) voluntary emancipation
 
The acts, events or factual errors contemplated under Article
[25] However, no reasonable interpretation of the provision
can justify the conclusion that it covers the correction on the
ground of sex reassignment. 
 
To correct simply means "to make or set aright; to remove the
faults or error from" while to change means "to replace
something that serves as a substitute."[26] The birth certificate
of petitioner contained no error. All entries therein, including
those corresponding to his first name and sex, were all correct.
No correction is necessary. 
Article 407 of the Civil Code authorizes the entry in the civil
registry of certain acts (such as legitimations,
acknowledgments of illegitimate children and naturalization),
events (such as births, marriages, naturalization and deaths)
and judicial decrees  (such as legal separations, annulments of
naturalization, loss or recovery of citizenship, civil interdiction,
judicial determination of filiation and changes of name). These
acts, events and judicial decrees produce legal consequences
that touch upon the legal capacity, status and nationality of a
person. Their effects are expressly sanctioned by the laws. In
contrast, sex reassignment is not among those acts or events
mentioned in Article 407. Neither is it recognized nor even
mentioned by any law, expressly or impliedly. 
 
"Status" refers to the circumstances affecting the legal
situation (that is, the sum total of capacities and incapacities)
of a person in view of his age, nationality and his family
membership.[27] 
 
The status of a person in law includes all his personal qualities
and relations, more or less permanent in nature, not
legitimate or illegitimate, or his being married or not. The
Page 72 of 304
comprehensive term status... include such matters as the Thus, the sex of a person is determined at birth, visually done
beginning and end of legal personality, capacity to have rights by the birth attendant (the physician or midwife) by examining
in general, family relations, and its various aspects, such as the genitals of the infant. Considering that there is no law
birth, legitimation, adoption, emancipation, marriage, divorce, legally recognizing sex reassignment, the determination of a
and sometimes even succession.[28] (emphasis supplied)  person's sex made at the time of his or her birth, if not
attended by error,[30] is immutable.[31] 
 
 
A person's sex is an essential factor in marriage and family
relations. It is a part of a person's legal capacity and civil When words are not defined in a statute they are to be given
status. In this connection, Article 413 of the Civil Code their common and ordinary meaning in the absence of a
provides:  contrary legislative intent. The words "sex," "male" and
"female" as used in the Civil Register Law and laws concerning
  the civil registry (and even all other laws) should therefore be
understood in their common and ordinary usage, there being
ART. 413. All other matters pertaining to the registration of
no legislative intent to the contrary. In this connection, sex is
civil status shall be governed by special laws. 
defined as "the sum of peculiarities of structure and function
that distinguish a male from a female"[32] or "the distinction
 
between male and female."[33] Female is "the sex that
But there is no such special law in the Philippines governing produces ova or bears young"[34] and male is "the sex that
sex reassignment and its effects. This is fatal to petitioner's has organs to produce spermatozoa for fertilizing ova."[35]
cause.  Thus, the words "male" and "female" in everyday
understanding do not include persons who have undergone
  sex reassignment. Furthermore, "words that are employed in a
statute which had at the time a well-known meaning are
Moreover, Section 5 of Act 3753 (the Civil Register Law) presumed to have been used in that sense unless the context
provides:  compels to the contrary."[36] Since the statutory language of
the Civil Register Law was enacted in the early 1900s and
 
remains unchanged, it cannot be argued that the term "sex" as
used then is something alterable through surgery or something
SEC. 5. Registration and certification of births. - The
that allows a post-operative male-to-female transsexual to be
declaration of the physician or midwife in attendance at the
included in the category "female." 
birth or, in default thereof, the declaration of either parent of
the newborn child, shall be sufficient for the registration of a
 
birth in the civil register. Such declaration shall be exempt from
documentary stamp tax and shall be sent to the local civil For these reasons, while petitioner may have succeeded in
registrar not later than thirty days after the birth, by the altering his body and appearance through the intervention of
physician or midwife in attendance at the birth or by either modern surgery, no law authorizes the change of entry as to
parent of the newborn child.  sex in the civil registry for that reason. Thus, there is no legal
basis for his petition for the correction or change of the entries
 
in his birth certificate. 
In such declaration, the person above mentioned shall certify
 
to the following facts: (a) date and hour of birth; (b) sex and
nationality of infant; (c) names, citizenship and religion of Neither May Entries in the Birth Certificate As to First
parents or, in case the father is not known, of the mother Name or Sex Be Changed on the Ground of Equity 
alone; (d) civil status of parents; (e) place where the infant
was born; and (f) such other data as may be required in the  
regulations to be issued. 
The trial court opined that its grant of the petition was in
  consonance with the principles of justice and equity. It
believed that allowing the petition would cause no harm, injury
xxx xxx xxx (emphasis supplied)  or prejudice to anyone. This is wrong. 

   

Under the Civil Register Law, a birth certificate is a historical

record of the facts as they existed at the time of birth.[29]
Page 73 of 304
The changes sought by petitioner will have serious and wide- The Court cannot enact a law where no law exists. It can only
ranging legal and public policy consequences. First, even the apply or interpret the written word of its co-equal branch of
trial court itself found that the petition was but petitioner's first government, Congress. 
step towards his eventual marriage to his male fiancé.
However, marriage, one of the most sacred social institutions,  
is a special contract of permanent union between a man and a
Petitioner pleads that "[t]he unfortunates are also entitled to a
woman.[37] One of its essential requisites is the legal capacity
life of happiness, contentment and [the] realization of their
of the contracting parties who must be a male and a female.
dreams." No argument about that. The Court recognizes that
[38] To grant the changes sought by petitioner will
there are people whose preferences and orientation do not fit
substantially reconfigure and greatly alter the laws on marriage
neatly into the commonly recognized parameters of social
and family relations. It will allow the union of a man with
convention and that, at least for them, life is indeed an ordeal.
another man who has undergone sex reassignment (a male-to-
However, the remedies petitioner seeks involve questions of
female post-operative transsexual). Second, there are various
public policy to be addressed solely by the legislature, not by
laws which apply particularly to women such as the provisions
the courts. 
of the Labor Code on employment of women,[39] certain
felonies under the Revised Penal Code[40] and the
 
presumption of survivorship in case of calamities under Rule
131 of the Rules of Court,[41] among others. These laws WHEREFORE, the petition is hereby DENIED. 
underscore the public policy in relation to women which could
be substantially affected if petitioner's petition were to be  
granted. 
Costs against petitioner. 
 
 
It is true that Article 9 of the Civil Code mandates that "[n]o
judge or court shall decline to render judgment by reason of SO ORDERED. 
the silence, obscurity or insufficiency of the law." However, it is
not a license for courts to engage in judicial legislation. The
duty of the courts is to apply or interpret the law, not to make Anaban vs Anaban Alfiler
or amend it.  Cristita Anaban, et al. Vs. Betty Anaban-Alfiler, et al.

  https://sc.judiciary.gov.ph/19029/

In our system of government, it is for the legislature, should it

choose to do so, to determine what guidelines should govern Del Socorro vs Van Wilsem
the recognition of the effects of sex reassignment. The need NORMA A. DEL SOCORRO, FOR AND IN BEHALF OF HER
for legislative guidelines becomes particularly important in this MINOR CHILD RODERIGO NORJO VAN WILSEM,
case where the claims asserted are statute-based.  PETITIONER, VS. ERNST JOHAN BRINKMAN VAN
WILSEM, RESPONDENT.
 
PERALTA, J.:
To reiterate, the statutes define who may file petitions for
change of first name and for correction or change of entries in
the civil registry, where they may be filed, what grounds may Before the Court is a petition for review on certiorari under
be invoked, what proof must be presented and what Rule 45 of the Rules of Court seeking to reverse and set aside
procedures shall be observed. If the legislature intends to the Orders1 dated February 19, 2010 and September 1, 2010,
confer on a person who has undergone sex reassignment the respectively, of the Regional Trial Court of Cebu City (RTC-
privilege to change his name and sex to conform with his Cebu), which dismissed the criminal case entitled People of the
reassigned sex, it has to enact legislation laying down the Philippines v. Ernst Johan Brinkman Van Wilsem, docketed as
guidelines in turn governing the conferment of that privilege.  Criminal Case No. CBU-85503, for violation of Republic Act
(R.A.) No. 9262, otherwise known as the Anti-Violence Against
  Women and Their Children Act of 2004.

It might be theoretically possible for this Court to write a  

protocol on when a person may be recognized as having
successfully changed his sex. However, this Court has no The following facts are culled from the records:
authority to fashion a law on that matter, or on anything else.

Page 74 of 304

Petitioner Norma A. Del Socorro and respondent Ernst Johan
Brinkman Van Wilsem contracted marriage in Holland on
September 25, 1990.2 On January 19, 1994, they were blessed
with a son named Roderigo Norjo Van Wilsem, who at the time
of the filing of the instant petition was sixteen (16) years of
age.3
Unfortunately, their marriage bond ended on July 19, 1995 by
virtue of a Divorce Decree issued by the appropriate Court of
Holland.4 At that time, their son was only eighteen (18) months
old.5 Thereafter, petitioner and her son came home to the
Philippines.6
 
According to petitioner, respondent made a promise to provide
monthly support to their son in the amount of Two Hundred
Fifty (250) Guildene (which is equivalent to Php17,500.00 more
or less).7  However, since the arrival of petitioner and her son
in the Philippines, respondent never gave support to the son,
Roderigo.8
 
Not long thereafter, respondent came to the Philippines and
remarried in Pinamungahan, Cebu, and since then, have been
residing thereat.9 Respondent and his new wife established a
business known as Paree Catering, located at Barangay Tajao,
Municipality of Pinamungahan, Cebu City.10 To date, all the
parties, including their son, Roderigo, are presently living in
Cebu City.11
On August 28, 2009, petitioner, through her counsel, sent a
letter demanding for support from respondent. However,
respondent refused to receive the letter.12
 
Because of the foregoing circumstances, petitioner filed a
complaint-affidavit with the Provincial Prosecutor of Cebu City
against respondent for violation of Section 5, paragraph E(2) of
R.A. No. 9262 for the latter’s unjust refusal to support his
minor child with petitioner.13 Respondent submitted his
counter-affidavit thereto, to which petitioner also submitted
her reply-affidavit.14 Thereafter, the Provincial Prosecutor of
Cebu City issued a Resolution recommending the filing of an
information for the crime charged against herein respondent.
 
The information, which was filed with the RTC-Cebu and
raffled to Branch 20 thereof, states that:
That sometime in the year 1995 and up to the present, more
or less, in the Municipality of Minglanilla, Province of Cebu,
Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, did then and there wilfully,
unlawfully and deliberately deprive, refuse and still continue to
deprive his son RODERIGO NORJO VAN WILSEM, a fourteen
(14) year old minor, of financial support legally due him,
resulting in economic abuse to the victim.
CONTRARY TO LAW.15
 
Upon motion and after notice and hearing, the RTC-Cebu
issued a Hold Departure Order against
respondent.16 Consequently, respondent was arrested and,
subsequently, posted bail.17
 
Petitioner also filed a Motion/Application of Permanent
Protection Order to which respondent filed his
Opposition.18 Pending the resolution thereof, respondent was
arraigned.19
 
Subsequently, without the RTC-Cebu having resolved the
application of the protection order, respondent filed a Motion
to Dismiss on the ground of: (1) lack of jurisdiction over the
offense charged; and (2) prescription of the crime charged.20
On February 19, 2010, the RTC-Cebu issued the herein
assailed Order,21 dismissing the instant criminal case against
respondent on the ground that the facts charged in the
information do not constitute an offense with respect to the
respondent who is an alien, the dispositive part of which
states:
WHEREFORE, the Court finds that the facts charged in the
information do not constitute an offense with respect to the
accused, he being an alien, and accordingly, orders this
case DISMISSED.
 
The bail bond posted by accused Ernst Johan Brinkman Van
Wilsem for his provisional liberty is hereby cancelled (sic) and
ordered released.
 
Page 75 of 304
SO ORDERED.
2.    Whether or not a foreign national can be held criminally
  liable under R.A. No. 9262 for his unjustified failure to support
his minor child.27
Cebu City, Philippines, February 19, 2010.22
 
 
At the outset, let it be emphasized that We are taking
Thereafter, petitioner filed her Motion for Reconsideration
cognizance of the instant petition despite the fact that the
thereto reiterating respondent’s obligation to support their
same was directly lodged with the Supreme Court, consistent
child under Article 19523 of the Family Code, thus, failure to do
with the ruling in Republic v. Sunvar Realty Development
so makes him liable under R.A. No. 9262 which “equally
Corporation,28 which lays down the instances when a ruling of
applies to all persons in the Philippines who are obliged to
the trial court may be brought on appeal directly to the
support their minor children regardless of the obligor’s
Supreme Court without violating the doctrine of hierarchy of
nationality.”24
courts, to wit:
 
x x x Nevertheless, the Rules do not prohibit any of the parties
On September 1, 2010, the lower court issued an
from filing a Rule 45 Petition with this Court, in case only
Order25 denying petitioner’s Motion for Reconsideration and
questions of law are raised or involved. This latter
reiterating its previous ruling. Thus:
situation was one that petitioners found themselves in when
they filed the instant Petition to raise only questions of law.
x x x The arguments therein presented are basically a rehash
 
of those advanced earlier in the memorandum of the
prosecution. Thus, the court hereby reiterates its ruling that
In Republic v. Malabanan, the Court clarified the three modes
since the accused is a foreign national he is not subject to our
of appeal from decisions of the RTC, to wit: (1) by ordinary
national law (The Family Code) in regard to a parent’s duty
appeal or appeal by writ of error under Rule 41, whereby
and obligation to give support to his child. Consequently, he
judgment was rendered in a civil or criminal action by the RTC
cannot be charged of violating R.A. 9262 for his alleged failure
in the exercise of its original jurisdiction; (2) by a petition for
to support his child. Unless it is conclusively established that
review under Rule 42, whereby judgment was rendered by the
R.A. 9262 applies to a foreigner who fails to give support to his
RTC in the exercise of its appellate jurisdiction; and (3) by a
child, notwithstanding that he is not bound by our domestic
petition for review on certiorari before the Supreme Court
law which mandates a parent to give such support, it is the
under Rule 45. “The first mode of appeal is taken to the [Court
considered opinion of the court that no prima facie case exists
of Appeals] on questions of fact or mixed questions of fact and
against the accused herein, hence, the case should be
law. The second mode of appeal is brought to the CA on
dismissed.
questions of fact, of law, or mixed questions of fact and
law. The third mode of appeal is elevated to the
 
Supreme Court only on questions of law.” (Emphasis
WHEREFORE, the motion for reconsideration is supplied)
hereby DENIED for lack of merit.
 
 
There is a question of law when the issue does not call for an
SO ORDERED. examination of the probative value of the evidence presented
or of the truth or falsehood of the facts being admitted, and
  the doubt concerns the correct application of law and
jurisprudence on the matter. The resolution of the issue must
Cebu City, Philippines, September 1, 2010.26 rest solely on what the law provides on the given set of
circumstances.29
 
 
Hence, the present Petition for Review on Certiorari raising the
following issues: Indeed, the issues submitted to us for resolution involve
questions of law – the response thereto concerns the correct
application of law and jurisprudence on a given set of facts,
1.    Whether or not a foreign national has an obligation to
i.e., whether or not a foreign national has an obligation to
support his minor child under Philippine law; and
Page 76 of 304
support his minor child under Philippine law; and whether or same only applies to Filipino citizens. By analogy, the same
not he can be held criminally liable under R.A. No. 9262 for his principle applies to foreigners such that they are governed by
unjustified failure to do so. their national law with respect to family rights and duties.36

   

It cannot be negated, moreover, that the instant petition The obligation to give support to a child is a matter that falls
highlights a novel question of law concerning the liability of a under family rights and duties.  Since the respondent is a
foreign national who allegedly commits acts and omissions citizen of Holland or the Netherlands, we agree with the RTC-
punishable under special criminal laws, specifically in relation Cebu that he is subject to the laws of his country, not to
to family rights and duties. The inimitability of the factual Philippine law, as to whether he is obliged to give support to
milieu of the present case, therefore, deserves a definitive his child, as well as the consequences of his failure to do so.37
ruling by this Court, which will eventually serve as a guidepost
for future cases. Furthermore, dismissing the instant petition  
and remanding the same to the CA would only waste the time,
In the case of Vivo v. Cloribel,38 the Court held that –
effort and resources of the courts. Thus, in the present case,
considerations of efficiency and economy in the administration
 
of justice should prevail over the observance of the hierarchy
of courts. Furthermore, being still aliens, they are not in position to
invoke the provisions of the Civil Code of the
 
Philippines, for that Code cleaves to the principle that
family rights and duties are governed by their personal
Now, on the matter of the substantive issues, We find the
law, i.e., the laws of the nation to which they belong even
petition meritorious. Nonetheless, we do not fully agree with
when staying in a foreign country (cf. Civil Code, Article 15). 39
petitioner’s contentions.
 
 
It cannot be gainsaid, therefore, that the respondent is not
To determine whether or not a person is criminally liable under
obliged to support petitioner’s son under Article 195 of the
R.A. No. 9262, it is imperative that the legal obligation to
Family Code as a consequence of the Divorce Covenant
support exists.
obtained in Holland. This does not, however, mean that
  respondent is not obliged to support petitioner’s son
altogether.
Petitioner invokes Article 19530 of the Family Code, which
provides the parent’s obligation to support his child. Petitioner  
contends that notwithstanding the existence of a divorce
In international law, the party who wants to have a foreign law
decree issued in relation to Article 26 of the Family
applied to a dispute or case has the burden of proving the
Code,31 respondent is not excused from complying with his
foreign law.40  In the present case, respondent hastily
obligation to support his minor child with petitioner.
concludes that being a national of the Netherlands, he is
  governed by such laws on the matter of provision of and
capacity to support.41 While respondent pleaded the laws of
On the other hand, respondent contends that there is no the Netherlands in advancing his position that he is not obliged
sufficient and clear basis presented by petitioner that she, as to support his son, he never proved the same.
well as her minor son, are entitled to financial
support.32 Respondent also added that by reason of the  
Divorce Decree, he is not obligated to petitioner for any
It is incumbent upon respondent to plead and prove that the
financial support.33
national law of the Netherlands does not impose upon the
  parents the obligation to support their child (either before,
during or after the issuance of a divorce decree),
On this point, we agree with respondent that petitioner cannot because Llorente v. Court of Appeals,42 has already enunciated
rely on Article 19534 of the New Civil Code in demanding that:
support from respondent, who is a foreign citizen, since Article
1535 of the New Civil Code stresses the principle of nationality.
In other words, insofar as Philippine laws are concerned, True, foreign laws do not prove themselves in our jurisdiction
specifically the provisions of the Family Code on support, the and our courts are not authorized to take judicial notice of

Page 77 of 304
them.  Like any other fact, they must be alleged and
proved.43
In view of respondent’s failure to prove the national law of the
Netherlands in his favor, the doctrine of processual
presumption shall govern. Under this doctrine, if the foreign
law involved is not properly pleaded and proved, our courts will
presume that the foreign law is the same as our local or
domestic or internal law.44 Thus, since the law of the
Netherlands as regards the obligation to support has not been
properly pleaded and proved in the instant case, it is presumed
to be the same with Philippine law, which enforces the
obligation of parents to support their children and penalizing
the non-compliance therewith.
Moreover, while in Pilapil v. Ibay-Somera,45 the Court held that
a divorce obtained in a foreign land as well as its legal effects
may be recognized in the Philippines in view of the nationality
principle on the matter of status of persons, the Divorce
Covenant presented by respondent does not completely show
that he is not liable to give support to his son after the divorce
decree was issued. Emphasis is placed on petitioner’s
allegation that under the second page of the aforesaid
covenant, respondent’s obligation to support his child is
specifically stated,46 which was not disputed by respondent.
We likewise agree with petitioner that notwithstanding that the
national law of respondent states that parents have no
obligation to support their children or that such obligation is
not punishable by law, said law would still not find applicability,
in light of the ruling in Bank of America, NT and SA v.
American Realty Corporation,47 to wit:
In the instant case, assuming arguendo that the English Law
on the matter were properly pleaded and proved in accordance
with Section 24, Rule 132 of the Rules of Court and the
jurisprudence laid down in Yao Kee, et al. vs. Sy-Gonzales, said
foreign law would still not find applicability.
 
Thus, when the foreign law, judgment or contract is
contrary to a sound and established public policy of the
forum, the said foreign law, judgment or order shall
not be applied.
 
Additionally, prohibitive laws concerning persons, their acts or
property, and those which have for their object public order,
public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign
country.
The public policy sought to be protected in the instant case is
the principle imbedded in our jurisdiction proscribing the
splitting up of a single cause of action.
 
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is
pertinent —
If two or more suits are instituted on the basis of the same
cause of action, the filing of one or a judgment upon the
merits in any one is available as a ground for the dismissal of
the others.
Moreover, foreign law should not be applied when its
application would work undeniable injustice to the
citizens or residents of the forum. To give justice is the
most important function of law; hence, a law, or judgment or
contract that is obviously unjust negates the fundamental
principles of Conflict of Laws.48
Applying the foregoing, even if the laws of the Netherlands
neither enforce a parent’s obligation to support his child nor
penalize the non-compliance therewith, such obligation is still
duly enforceable in the Philippines because it would be of great
injustice to the child to be denied of financial support when the
latter is entitled thereto.
We emphasize, however, that as to petitioner herself,
respondent is no longer liable to support his former wife, in
consonance with the ruling in San Luis v. San Luis,49 to wit:
As to the effect of the divorce on the Filipino wife, the Court
ruled that she should no longer be considered married to the
alien spouse. Further, she should not be required to perform
her marital duties and obligations. It held:
 
To maintain, as private respondent does, that, under
our laws, petitioner has to be considered still married
to private respondent and still subject to a wife's
obligations under Article 109, et. seq. of the Civil Code
Page 78 of 304
cannot be just. Petitioner should not be obliged to live
together with, observe respect and fidelity, and render support
to private respondent. The latter should not continue to be one
of her heirs with possible rights to conjugal property.She
should not be discriminated against in her own country if the
ends of justice are to be served. (Emphasis added)50
Based on the foregoing legal precepts, we find that respondent
may be made liable under Section 5(e) and (i) of R.A. No.
9262 for unjustly refusing or failing to give support to
petitioner’s son, to wit:
SECTION 5. Acts of Violence Against Women and Their
Children.- The crime of violence against women and their
children is committed through any of the following acts:
xxxx
(e) Attempting to compel or compelling the woman or her child
to engage in conduct which the woman or her child has the
right to desist from or desist from conduct which the woman or
her child has the right to engage in, or attempting to restrict or
restricting the woman's or her child's freedom of movement or
conduct by force or threat of force, physical or other harm or
threat of physical or other harm, or intimidation directed
against the woman or child. This shall include, but not limited
to, the following acts committed with the purpose or effect of
controlling or restricting the woman's or her child's movement
or conduct:
xxxx
(2) Depriving or threatening to deprive the woman or
her children of financial support legally due her or her
family, or deliberately providing the woman's children
insufficient financial support;
 
xxxx
(i) Causing mental or emotional anguish, public ridicule or
humiliation to the woman or her child, including, but not
limited to, repeated verbal and emotional abuse, and denial
of financial support or custody of minor children of access
to the woman's child/children.51
 
Under the aforesaid special law, the deprivation or denial of
financial support to the child is considered an act of violence
against women and children.
In addition, considering that respondent is currently living in
the Philippines, we find strength in petitioner’s claim that the
Territoriality Principle in criminal law, in relation to Article 14 of
the New Civil Code, applies to the instant case, which provides
that:“[p]enal laws and those of public security and safety shall
be obligatory upon all who live and sojourn in Philippine
territory, subject to the principle of public international law and
to treaty stipulations.”  On this score, it is indisputable that the
alleged continuing acts of respondent in refusing to support his
child with petitioner is committed here in the Philippines as all
of the parties herein are residents of the Province of Cebu City.
As such, our courts have territorial jurisdiction over the offense
charged against respondent. It is likewise irrefutable that
jurisdiction over the respondent was acquired upon his arrest.
Finally, we do not agree with respondent’s argument that
granting, but not admitting, that there is a legal basis for
charging violation of R.A. No. 9262 in the instant case, the
criminal liability has been extinguished on the ground of
prescription of crime52 under Section 24 of R.A. No. 9262,
which provides that:
SECTION 24. Prescriptive Period. – Acts falling under Sections
5(a) to 5(f) shall prescribe in twenty (20) years. Acts falling
under Sections 5(g) to 5(I) shall prescribe in ten (10) years.
The act of denying support to a child under Section 5(e)(2)
and (i) of R.A. No. 9262 is a continuing offense, 53 which started
in 1995 but is still ongoing at present. Accordingly, the crime
charged in the instant case has clearly not prescribed.
 
Given, however, that the issue on whether respondent has
provided support to petitioner’s child calls for an examination
of the probative value of the evidence presented, and the truth
and falsehood of facts being admitted, we hereby remand the
determination of this issue to the RTC-Cebu which has
jurisdiction over the case.
WHEREFORE, the petition is GRANTED. The Orders dated
February 19, 2010 and September 1, 2010, respectively, of the
Regional Trial Court of the City of Cebu are
Page 79 of 304
hereby REVERSED and SET ASIDE. The case
is REMANDED to the same court to conduct further
proceedings based on the merits of the case.
 
SO ORDERED.
Van Dorn vs Romillo
ALICE REYES VAN DORN, petitioner, vs. HON. MANUEL
V. ROMILLO, JR., as Presiding Judge of Branch CX,
Regional Trial Court of the National Capital Region
Pasay City, and RICHARD UPTON, respondents.
MELENCIO-HERRERA, J.: 
In this Petition for Certiorari and Prohibition, petitioner Alice
Reyes Van Dorn seeks to set aside the Orders, dated
September 15, 1983 and August 3, 1984, in Civil Case No.
1075-P, issued by respondent Judge, which denied her Motion
to Dismiss said case, and her Motion for Reconsideration of the
Dismissal Order, respectively.  claim on the alleged conjugal property because of the
 
The basic background facts are that petitioner is a citizen of
the Philippines while private respondent is a citizen of the
United States; that they were married in Hongkong in 1972;
that, after the marriage, they established their residence in the
Philippines; that they begot two children born on April 4, 1973
and December 18, 1975, respectively; that the parties were
divorced in Nevada, United States, in 1982; and that petitioner
has re-married also in Nevada, this time to Theodore Van
Dorn.  same is contrary to public policy, divest Philippine Courts of
Dated June 8, 1983, private respondent filed suit against
petitioner in Civil Case No. 1075-P of the Regional Trial Court,
Branch CXV, in Pasay City, stating that petitioner's business in
Ermita, Manila, (the Galleon Shop, for short), is conjugal
property of the parties, and asking that petitioner be ordered
to render an accounting of that business, and that private
respondent be declared with right to manage the conjugal
property. Petitioner moved to dismiss the case on the ground
that the cause of action is barred by previous judgment in the
divorce proceedings before the Nevada Court wherein
respondent had acknowledged that he and petitioner had "no
community property" as of June 11, 1982. The Court below
denied the Motion to Dismiss in the mentioned case on the
ground that the property involved is located in the Philippines
so that the Divorce Decree has no bearing in the case. The
denial is now the subject of this Certiorari proceeding. 
 
Generally, the denial of a Motion to Dismiss in a civil case is
interlocutory and is not subject to appeal. Certiorari and
Prohibition are neither the remedies to question the propriety
of an interlocutory order of the trial Court. However, when a
grave abuse of discretion was patently committed, or the lower
Court acted capriciously and whimsically, then it devolves upon
this Court in a certiorari proceeding to exercise its supervisory
authority and to correct the error committed which, in such a
case, is equivalent to lack of jurisdiction. 1 Prohibition would
then lie since it would be useless and a waste of time to go
ahead with the proceedings. 2 We consider the petition filed in
this case within the exception, and we have given it due
course. 
For resolution is the effect of the foreign divorce on the parties
and their alleged conjugal property in the Philippines. 
 
Petitioner contends that respondent is estopped from laying
representation he made in the divorce proceedings before the
American Court that they had no community of property; that
the Galleon Shop was not established through conjugal funds;
and that respondent's claim is barred by prior judgment. 
 
For his part, respondent avers that the Divorce Decree issued
by the Nevada Court cannot prevail over the prohibitive laws of
the Philippines and its declared national policy; that the acts
and declaration of a foreign Court cannot, especially if the
jurisdiction to entertain matters within its jurisdiction. 
For the resolution of this case, it is not necessary to determine
whether the property relations between petitioner and private
respondent, after their marriage, were upon absolute or
relative community property, upon complete separation of
property, or upon any other regime. The pivotal fact in this
case is the Nevada divorce of the parties. 
 
The Nevada District Court, which decreed the divorce, had
obtained jurisdiction over petitioner who appeared in person
before the Court during the trial of the case. It also obtained
jurisdiction over private respondent who, giving his address as
No. 381 Bush Street, San Francisco, California, authorized his
attorneys in the divorce case, Karp & Gradt, Ltd., to agree to
the divorce on the ground of incompatibility in the
understanding that there were neither community property nor
Page 80 of 304
community obligations. 3 As explicitly stated in the Power of  
Attorney he executed in favor of the law firm of KARP & GRAD
LTD., 336 W. Liberty, Reno, Nevada, to represent him in the "The purpose and effect of a decree of divorce from the bond
divorce proceedings:  of matrimony by a court of competent jurisdiction are to
change the existing status or domestic relation of husband and
  wife, and to free them both from the bond. The marriage tie,
when thus severed as to one party, ceases to bind either. 
xxx xxx xxx 
 
 
A husband without a wife, or a wife without a husband, is
"You are hereby authorized to accept service of Summons, to unknown to the law. When the law provides, in the nature of a
file an Answer, appear on my behalf and do all things penalty, that the guilty party shall not marry again, that party,
necessary and proper to represent me, without further as well as the other, is still absolutely freed from the bond of
contesting, subject to the following:  the former marriage." 

   

"1. That my spouse seeks a divorce on the ground of
incompatibility.  longer the husband of petitioner. He would have no standing
"2. That there is no community of property to be adjudicated
by the Court. 
 
"3. That there are no community obligations to be adjudicated
by the court. 
Thus, pursuant to his national law, private respondent is no
to sue in the case below as petitioner's husband entitled to
exercise control over conjugal assets. As he is bound by the
Decision of his own country's Court, which validly exercised
jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before
said Court from asserting his right over the alleged conjugal
property. 
 

  To maintain, as private respondent does, that, under our laws,

petitioner has to be considered still married to private
xxx xxx xxx" 4  respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. Petitioner should
  not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter
There can be no question as to the validity of that Nevada
should not continue to be one of her heirs with possible rights
divorce in any of the States of the United States. The decree is
to conjugal property. She should not be discriminated against
binding on private respondent as an American citizen. For
in her own country if the ends of justice are to be served. 
instance, private respondent cannot sue petitioner, as her
husband, in any State of the Union. What he is contending in  
this case is that the divorce is not valid and binding in this
jurisdiction, the same being contrary to local law and public WHEREFORE, the Petition is granted, and respondent Judge
policy.  is hereby ordered to dismiss the Complaint filed in Civil Case
No. 1075-P of his Court. 
 
 
It is true that owing to the nationality principle embodied in
Article 15 of the Civil Code, 5 only Philippine nationals are Without costs. 
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
SO ORDERED. 
may be recognized in the Philippines, provided they are valid
according to their national law. 6 In this case, the divorce in
Nevada released private respondent from the marriage from
Pilapil vs Ibay Somera
the standards of American law, under which divorce dissolves
IMELDA MANALAYSAY PILAPIL, petitioner, vs. HON.
the marriage. As stated by the Federal Supreme Court of the
CORONA IBAY-SOMERA, in her capacity as Presiding
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799: 
Page 81 of 304
Judge of the Regional Trial Court of Manila, Branch
XXVI; HON. LUIS C. VICTOR, in his capacity as the City
Fiscal of Manila; and ERICH EKKEHARD GEILING,
respondents.
REGALADO, J.:  On June 27, 1986, or more than five months after the issuance
 
An ill-starred marriage of a Filipina and a foreigner which
ended in a foreign absolute divorce, only to be followed by a
criminal infidelity suit of the latter against the former, provides
Us the opportunity to lay down a decisional rule on what
hitherto appears to be an unresolved jurisdictional question.  insufficiency of evidence. 5 However, upon review, the
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a
Filipino citizen, and private respondent Erich Ekkehard Geiling,
a German national, were married before the Registrar of
Births, Marriages and Deaths at Friedensweiler in the Federal
Republic of Germany. The marriage started auspiciously
enough, and the couple lived together for some time in Malate,
Manila where their only child, Isabella Pilapil Geiling, was born
on April 20, 1980. 1 
Thereafter, marital discord set in, with mutual recriminations
between the spouses, followed by a separation de facto
between them. 
 
After about three and a half years of marriage, such connubial
disharmony eventuated in private respondent initiating a
divorce proceeding against petitioner in Germany before the
Schoneberg Local Court in January, 1983. He claimed that
there was failure of their marriage and that they had been
living apart since April, 1982. 2  his office for review. 9
Petitioner, on the other hand, filed an action for legal
separation, support and separation of property before the
Regional Trial Court of Manila, Branch XXXII, on January 23,
1983 where the same is still pending as Civil Case No. 83-
15866. 3  other hand, respondent judge merely reset the date of the
 
On January 15, 1986, Division 20 of the Schoneberg Local
Court, Federal Republic of Germany, promulgated a decree of
divorce on the ground of failure of marriage of the spouses.
The custody of the child was granted to petitioner. The records
show that under German law said court was locally and
internationally competent for the divorce proceeding and that
the dissolution of said marriage was legally founded on and
authorized by the applicable law of that foreign jurisdiction. 4 
 
of the divorce decree, private respondent filed two complaints
for adultery before the City Fiscal of Manila alleging that, while
still married to said respondent, petitioner "had an affair with a
certain William Chia as early as 1982 and with yet another man
named Jesus Chua sometime in 1983". Assistant Fiscal Jacinto
A. de los Reyes, Jr., after the corresponding investigation,
recommended the dismissal of the cases on the ground of
respondent city fiscal approved a resolution, dated January 8,
1986, directing the filing of two complaints for adultery against
the petitioner. 6 The complaints were accordingly filed and
were eventually raffled to two branches of the Regional Trial
Court of Manila. The case entitled "People of the Philippines vs.
Imelda Pilapil and William Chia", docketed as Criminal Case No.
87-52435, was assigned to Branch XXVI presided by the
respondent judge; while the other case, "People of the
Philippines vs. Imelda Pilapil and James Chua", docketed as
Criminal Case No. 87-52434 went to the sala of Judge
Leonardo Cruz, Branch XXV, of the same court. 7 
On March 14, 1987, petitioner filed a petition with the
Secretary of Justice asking that the aforesaid resolution of
respondent fiscal be set aside and the cases against her be
dismissed. 8 A similar petition was filed by James Chua, her
co-accused in Criminal Case No. 87-52434. The Secretary of
Justice, through the Chief State Prosecutor, gave due course to
both petitions and directed the respondent city fiscal to inform
the Department of Justice "if the accused have already been
arraigned and if not yet arraigned, to move to defer further
proceedings" and to elevate the entire records of both cases to
 
Petitioner thereafter filed a motion in both criminal cases to
defer her arraignment and to suspend further proceedings
thereon. 10 As a consequence, Judge Leonardo Cruz
suspended proceedings in Criminal Case No. 87-52434. On the
arraignment in Criminal Case No. 87-52435 to April 6, 1987.
Before such scheduled date, petitioner moved for the
cancellation of the arraignment and for the suspension of
proceedings in said Criminal Case No. 87-52435 until after the
resolution of the petition for review then pending before the
Secretary of Justice. 11 A motion to quash was also filed in the
same case on the ground of lack of jurisdiction, 12 which
motion was denied by the respondent judge in an order dated
September 8, 1987. The same order also directed the
arraignment of both accused therein, that is, petitioner and
Page 82 of 304
William Chia. The latter entered a plea of not guilty while the complaint should be the offended spouse, and nobody else.
petitioner refused to be arraigned. Such refusal of the Unlike the offenses of seduction, abduction, rape and acts of
petitioner being considered by respondent judge as direct lasciviousness, no provision is made for the prosecution of the
contempt, she and her counsel were fined and the former was crimes of adultery and concubinage by the parents,
ordered detained until she submitted herself for arraignment. grandparents or guardian of the offended party. The so-called
13 Later, private respondent entered a plea of not guilty. 14  exclusive and successive rule in the prosecution of the first
four offenses above mentioned do not apply to adultery and
  concubinage. It is significant that while the State, as parens
partriae, was added and vested by the 1985 Rules of Criminal
On October 27, 1987, petitioner filed this special civil action for
Procedure with the power to initiate the criminal action for a
certiorari and prohibition, with a prayer for a temporary
deceased or incapacitated victim in the aforesaid offenses of
restraining order, seeking the annulment of the order of the
seduction, abduction, rape and acts of lasciviousness, in
lower court denying her motion to quash. The petition is
default of her parents, grandparents or guardian, such
anchored on the main ground that the court is without
amendment did not include the crimes of adultery and
jurisdiction "to try and decide the charge of adultery, which is
concubinage. In other words, only the offended spouse, and
a private offense that cannot be prosecuted de officio (sic),
no other, is authorized by law to initiate the action therefor. 
since the purported complainant, a foreigner, does not qualify
as an offended spouse having obtained a final divorce decree  
under his national law prior to his filing the criminal complaint."
15  Corollary to such exclusive grant of power to the offended
spouse to institute the action, it necessarily follows that such
  initiator must have the status, capacity or legal representation
to do so at the time of the filing of the criminal action. This is a
On October 21, 1987, this Court issued a temporary restraining
familiar and express rule in civil actions; in fact, lack of legal
order enjoining the respondents from implementing the
capacity to sue, as a ground for a motion to dismiss in civil
aforesaid order of September 8, 1987 and from further
cases, is determined as of the filing of the complaint or
proceeding with Criminal Case No. 87-52435. Subsequently, on
petition. 
March 23, 1988 Secretary of Justice Sedfrey A. Ordoñez acted
on the aforesaid petitions for review and, upholding petitioner's  
ratiocinations, issued a resolution directing the respondent city
fiscal to move for the dismissal of the complaints against the The absence of an equivalent explicit rule in the prosecution of
petitioner. 16  criminal cases does not mean that the same requirement and
rationale would not apply. Understandably, it may not have
  been found necessary since criminal actions are generally and
fundamentally commenced by the State, through the People of
We find this petition meritorious. The writs prayed for shall
the Philippines, the offended party being merely the
accordingly issue. 
complaining witness therein. However, in the so-called "private
crimes", or those which cannot be prosecuted de oficio, and
 
the present prosecution for adultery is of such genre, the
Under Article 344 of the Revised Penal Code, 17 the crime of offended spouse assumes a more predominant role since the
adultery, as well as four other crimes against chastity, cannot right to commence the action, or to refrain therefrom, is a
be prosecuted except upon a sworn written complaint filed by matter exclusively within his power and option. 
the offended spouse. It has long since been established, with
 
unwavering consistency, that compliance with this rule is a
jurisdictional, and not merely a formal, requirement. 18 While
This policy was adopted out of consideration for the aggrieved
in point of strict law the jurisdiction of the court over the
party who might prefer to suffer the outrage in silence rather
offense is vested in it by the Judiciary Law, the requirement for
than go through the scandal of a public trial. 20 Hence, as
a sworn written complaint is just as jurisdictional a mandate
cogently argued by petitioner, Article 344 of the Revised Penal
since it is that complaint which starts the prosecutory
Code thus presupposes that the marital relationship is still
proceeding 19 and without which the court cannot exercise its
subsisting at the time of the institution of the criminal action
jurisdiction to try the case. 
for adultery. This is a logical consequence since the raison
d'etre of said provision of law would be absent where the
 
supposed offended party had ceased to be the spouse of the
Now, the law specifically provides that in prosecutions for alleged offender at the time of the filing of the criminal case.
adultery and concubinage the person who can legally file the 21 

Page 83 of 304
 
In these cases, therefore, it is indispensable that the status
and capacity of the complainant to commence the action be
definitely established and, as already demonstrated, such
status or capacity must indubitably exist as of the time he
initiates the action. It would be absurd if his capacity to bring
the action would be determined by his status before or
subsequent to the commencement thereof, where such
capacity or status existed prior to but ceased before, or was
acquired subsequent to but did not exist at the time of, the
institution of the case. We would thereby have the anomalous
spectacle of a party bringing suit at the very time when he is
without the legal capacity to do so.  time of the filing of the complaint.
To repeat, there does not appear to be any local precedential
jurisprudence on the specific issue as to when precisely the
status of a complainant as an offended spouse must exist
where a criminal prosecution can be commenced only by one
who in law can be categorized as possessed of such status.
Stated differently and with reference to the present case, the
inquiry would be whether it is necessary in the commencement
of a criminal action for adultery that the marital bonds between
the complainant and the accused be unsevered and existing at
the time of the institution of the action by the former against
the latter. 
American jurisprudence, on cases involving statutes in that
jurisdiction which are in pari materia with ours, yields the rule
that after a divorce has been decreed, the innocent spouse no
longer has the right to institute proceedings against the
offenders where the statute provides that the innocent spouse
shall have the exclusive right to institute a prosecution for
adultery. Where, however, proceedings have been properly
commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a
conclusion. 22 
In the cited Loftus case, the Supreme Court of Iowa held that 
" 'No prosecution for adultery can be commenced except on
the complaint of the husband or wife.' Section 4932, Code.
Though Loftus was husband of defendant when the offense is
said to have been committed, he had ceased to be such when
the prosecution was begun; and appellant insists that his
status was not such as to entitle him to make the complaint.
We have repeatedly said that the offense is against the
unoffending spouse, as well as the state, in explaining the
reason for this provision in the statute; and we are of the
opinion that the unoffending spouse must be such when the
prosecution is commenced." 
 
We see no reason why the same doctrinal rule should not
apply in this case and in our jurisdiction, considering our
statutory law and jural policy on the matter. We are convinced
that in cases of such nature, the status of the complainant vis-
a-vis the accused must be determined as of the time the
complaint was filed. Thus, the person who initiates the
adultery case must be an offended spouse, and by this is
meant that he is still married to the accused spouse, at the
 
In the present case, the fact that private respondent obtained
a valid divorce in his country, the Federal Republic of Germany,
is admitted. Said divorce and its legal effects may be
recognized in the Philippines insofar as private respondent is
concerned 23 in view of the nationality principle in our civil law
on the matter of status of persons. 
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24
after a divorce was granted by a United States court between
Alice Van Dorn, a Filipina, and her American husband, the
latter filed a civil case in a trial court here alleging that her
business concern was conjugal property and praying that she
be ordered to render an accounting and that the plaintiff be
granted the right to manage the business. Rejecting his
pretensions, this Court perspicuously demonstrated the error of
such stance, thus: 
"There can be no question as to the validity of that Nevada
divorce in any of the States of the United States. The decree is
binding on private respondent as an American citizen. For
instance, private respondent cannot sue petitioner, as her
husband, in any State of the Union . . . 
"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 . . . 
"Thus, pursuant to his national law, private respondent is no
longer the husband of petitioner. He would have no standing
Page 84 of 304
to sue in the case below as petitioner's husband entitled to Private respondent's invocation of Donio-Teves, et al. vs.
exercise control over conjugal assets . . ." 25  Vamenta, herein before cited, 27 must suffer the same fate of
inapplicability. A cursory reading of said case reveals that the
  offended spouse therein had duly and seasonably filed a
complaint for adultery, although an issue was raised as to its
Under the same considerations and rationale, private
sufficiency but which was resolved in favor of the complainant.
respondent, being no longer the husband of petitioner, had no
Said case did not involve a factual situation akin to the one at
legal standing to commence the adultery case under the
bar or any issue determinative of the controversy herein. 
imposture that he was the offended spouse at the time he filed
suit.   

  WHEREFORE, the questioned order denying petitioner's

motion to quash is SET ASIDE and another one entered
The allegation of private respondent that he could not have
DISMISSING the complaint in Criminal Case No. 87-52435 for
brought this case before the decree of divorce for lack of
lack of jurisdiction. The temporary restraining order issued in
knowledge, even if true, is of no legal significance or
this case on October 21, 1987 is hereby made permanent. 
consequence in this case. When said respondent initiated the
divorce proceeding, he obviously knew that there would no
longer be a family nor marriage vows to protect once a
Recio vs Recio
dissolution of the marriage is decreed. Neither would there be
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO,
a danger of introducing spurious heirs into the family, which is
petitioner, vs. REDERICK A. RECIO, respondent.
said to be one of the reasons for the particular formulation of
our law on adultery, 26 since there would thenceforth be no PANGANIBAN, J.: 
spousal relationship to speak of. The severance of the marital
bond had the effect of dissociating the former spouses from  
each other, hence the actuations of one would not affect or
cast obloquy on the other.  A divorce obtained abroad by an alien may be recognized in
our jurisdiction, provided such decree is valid according to the
  national law of the foreigner. However, the divorce decree and
the governing personal law of the alien spouse who obtained
The aforecited case of United States vs. Mata cannot be the divorce must be proven. Our courts do not take judicial
successfully relied upon by private respondent. In applying notice of foreign laws and judgments; hence, like any other
Article 433 of the old Penal Code, substantially the same as facts, both the divorce decree and the national law of the alien
Article 333 of the Revised Penal Code, which punished adultery must be alleged and proven according to our law on evidence. 
"although the marriage be afterwards declared void", the Court
merely stated that "the lawmakers intended to declare  
adulterous the infidelity of a married woman to her marital
vows, even though it should be made to appear that she is The Case 
entitled to have her marriage contract declared null and void,
until and unless she actually secures a formal judicial  
declaration to that effect". Definitely, it cannot be logically
Before us is a Petition for Review under Rule 45 of the Rules of
inferred therefrom that the complaint can still be filed after the
Court, seeking to nullify the January 7, 1999 Decision[1] and
declaration of nullity because such declaration that the
the March 24, 1999 Order[2] of the Regional Trial Court of
marriage is void ab initio is equivalent to stating that it never
Cabanatuan City, Branch 28, in Civil Case No. 3026-AF. The
existed. There being no marriage from the beginning, any
assailed Decision disposed as follows: 
complaint for adultery filed after said declaration of nullity
would no longer have a leg to stand on. Moreover, what was  
consequently contemplated and within the purview of the
decision in said case is the situation where the criminal action "WHEREFORE, this Court declares the marriage between Grace
for adultery was filed before the termination of the marriage by J. Garcia and Rederick A. Recio solemnized on January 12,
a judicial declaration of its nullity ab initio. The same rule and 1994 at Cabanatuan City as dissolved and both parties can
requisite would necessarily apply where the termination of the now remarry under existing and applicable laws to any and/or
marriage was effected, as in this case, by a valid foreign both parties."[3] 
divorce. 
 
 

Page 85 of 304
The assailed Order denied reconsideration of the above-quoted  
Decision. 
Respondent prayed in his Answer that the Complaint be
  dismissed on the ground that it stated no cause of action.[14]
The Office of the Solicitor General agreed with respondent.[15]
The Facts  The court marked and admitted the documentary evidence of
both parties.[16] After they submitted their respective
 
memoranda, the case was submitted for resolution.[17] 
Rederick A. Recio, a Filipino, was married to Editha Samson, an
 
Australian citizen, in Malabon, Rizal, on March 1, 1987.[4] They
lived together as husband and wife in Australia. On May 18, Thereafter, the trial court rendered the assailed Decision and
1989, [5] a decree of divorce, purportedly dissolving the Order. 
marriage, was issued by an Australian family court. 
 
 
Ruling of the Trial Court 
On June 26, 1992, respondent became an Australian citizen, as
shown by a "Certificate of Australian Citizenship" issued by the  
Australian government.[6] Petitioner -- a Filipina -- and
respondent were married on January 12, 1994 in Our Lady of The trial court declared the marriage dissolved on the ground
Perpetual Help Church in Cabanatuan City.[7] In their that the divorce issued in Australia was valid and recognized in
application for a marriage license, respondent was declared as the Philippines. It deemed the marriage ended, but not on the
"single" and "Filipino."[8]  basis of any defect in an essential element of the marriage;
that is, respondent's alleged lack of legal capacity to remarry.
  Rather, it based its Decision on the divorce decree obtained by
respondent. The Australian divorce had ended the marriage;
Starting October 22, 1995, petitioner and respondent lived thus, there was no more marital union to nullify or annul. 
separately without prior judicial dissolution of their marriage.
While the two were still in Australia, their conjugal assets were  
divided on May 16, 1996, in accordance with their Statutory
Declarations secured in Australia.[9]  Hence, this Petition.[18] 

   

On March 3, 1998, petitioner filed a Complaint for Declaration Issues 

of Nullity of Marriage[10] in the court a quo, on the ground of
 
bigamy -- respondent allegedly had a prior subsisting marriage
at the time he married her on January 12, 1994. She claimed
Petitioner submits the following issues for our consideration: 
that she learned of respondent's marriage to Editha Samson
only in November, 1997.   

  "1 The trial court gravely erred in finding that the divorce
decree obtained in Australia by the respondent ipso facto
In his Answer, respondent averred that, as far back as 1993,
terminated his first marriage to Editha Samson thereby
he had revealed to petitioner his prior marriage and its
capacitating him to contract a second marriage with the
subsequent dissolution.[11] He contended that his first
petitioner. 
marriage to an Australian citizen had been validly dissolved by
a divorce decree obtained in Australia in 1989;[12] thus, he  
was legally capacitated to marry petitioner in 1994. 
"2  The failure of the respondent, who is now a naturalized
  Australian, to present a certificate of legal capacity to marry
constitutes absence of a substantial requisite voiding the
On July 7, 1998 -- or about five years after the couple's
petitioner's marriage to the respondent 
wedding and while the suit for the declaration of nullity was
pending -- respondent was able to secure a divorce decree  
from a family court in Sydney, Australia because the "marriage
ha[d] irretrievably broken down."[13] 

Page 86 of 304
"3  The trial court seriously erred in the application of Art. 26  
of the Family Code in this case. 
At the outset, we lay the following basic legal principles as the
  take-off points for our discussion. Philippine law does not
provide for absolute divorce; hence, our courts cannot grant it.
"4 The trial court patently and grievously erred in disregarding [21] A marriage between two Filipinos cannot be dissolved
Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family Code as the even by a divorce obtained abroad, because of Articles 15[22]
applicable provisions in this case.  and 17[23] of the Civil Code.[24] In mixed marriages involving
a Filipino and a foreigner, Article 26[25] of the Family Code
 
allows the former to contract a subsequent marriage in case
the divorce is "validly obtained abroad by the alien spouse
"5  The trial court gravely erred in pronouncing that the
capacitating him or her to remarry."[26] A divorce obtained
divorce decree obtained by the respondent in Australia ipso
abroad by a couple, who are both aliens, may be recognized in
facto capacitated the parties to remarry, without first securing
the Philippines, provided it is consistent with their respective
a recognition of the judgment granting the divorce decree
national laws.[27] 
before our courts."[19] 
 
 
A comparison between marriage and divorce, as far as
The Petition raises five issues, but for purposes of this
pleading and proof are concerned, can be made. Van Dorn v.
Decision, we shall concentrate on two pivotal ones: (1)
Romillo Jr. decrees that "aliens may obtain divorces abroad,
whether the divorce between respondent and Editha Samson
which may be recognized in the Philippines, provided they are
was proven, and (2) whether respondent was proven to be
valid according to their national law."[28] Therefore, before a
legally capacitated to marry petitioner. Because of our ruling
foreign divorce decree can be recognized by our courts, the
on these two, there is no more necessity to take up the rest. 
party pleading it must prove the divorce as a fact and
  demonstrate its conformity to the foreign law allowing it.[29]
Presentation solely of the divorce decree is insufficient. 
The Court's Ruling 
 
 
Divorce as a Question of Fact 
The Petition is partly meritorious. 
 
 
Petitioner insists that before a divorce decree can be admitted
First Issue:  Proving the Divorce Between Respondent in evidence, it must first comply with the registration
and Editha Samson  requirements under Articles 11, 13 and 52 of the Family Code.
These articles read as follows: 
 
 
Petitioner assails the trial court's recognition of the divorce
between respondent and Editha Samson. Citing Adong v. "ART. 11. Where a marriage license is required, each of the
Cheong Seng Gee,[20] petitioner argues that the divorce contracting parties shall file separately a sworn application for
decree, like any other foreign judgment, may be given such license with the proper local civil registrar which shall
recognition in this jurisdiction only upon proof of the existence specify the following: 
of (1) the foreign law allowing absolute divorce and (2) the
alleged divorce decree itself. She adds that respondent  
miserably failed to establish these elements. 
x x x x x x x x x 
 
 
Petitioner adds that, based on the first paragraph of Article 26
"(5) If previously married, how, when and where the previous
of the Family Code, marriages solemnized abroad are governed
marriage was dissolved or annulled; 
by the law of the place where they were celebrated (the lex
loci celebrationis). In effect, the Code requires the presentation
 
of the foreign law to show the conformity of the marriage in
question to the legal requirements of the place where the x x x x x x x x x" 
marriage was performed. 
Page 87 of 304
 
"ART. 13. In case either of the contracting parties has been
previously married, the applicant shall be required to furnish,
instead of the birth or baptismal certificate required in the last
preceding article, the death certificate of the deceased spouse
or the judicial decree of the absolute divorce, or the judicial
decree of annulment or declaration of nullity of his or her
previous marriage. x x x.  decree admissible as a written act of the Family Court of
"ART. 52. The judgment of annulment or of absolute nullity of
the marriage, the partition and distribution of the properties of
the spouses, and the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil registry and
registries of property; otherwise, the same shall not affect their
persons."  adopting an alien and clothing him with the political and civil
Respondent, on the other hand, argues that the Australian
divorce decree is a public document -- a written official act of
an Australian family court. Therefore, it requires no further
proof of its authenticity and due execution. 
Respondent is getting ahead of himself. Before a foreign
judgment is given presumptive evidentiary value, the
document must first be presented and admitted in evidence.
[30] A divorce obtained abroad is proven by the divorce decree
itself. Indeed the best evidence of a judgment is the judgment
itself.[31] The decree purports to be a written act or record of
an act of an official body or tribunal of a foreign country.[32]  decree and was cognizant of the marital laws of Australia,
Under Sections 24 and 25 of Rule 132, on the other hand, a
writing or document may be proven as a public or official
record of a foreign country by either (1) an official publication
or (2) a copy thereof attested[33] by the officer having legal
custody of the document. If the record is not kept in the
Philippines, such copy must be (a) accompanied by a
certificate issued by the proper diplomatic or consular officer in
the Philippine foreign service stationed in the foreign country in
which the record is kept and (b) authenticated by the seal of
his office. [34]  defendants have the burden of proving the material allegations
The divorce decree between respondent and Editha Samson
appears to be an authentic one issued by an Australian family
court.[35] However, appearance is not sufficient; compliance
with the aforementioned rules on evidence must be
demonstrated.  It is well-settled in our jurisdiction that our courts cannot take
Fortunately for respondent's cause, when the divorce decree of
May 18, 1989 was submitted in evidence, counsel for petitioner
objected, not to its admissibility, but only to the fact that it had
not been registered in the Local Civil Registry of Cabanatuan
City.[36] The trial court ruled that it was admissible, subject to
petitioner's qualification.[37] Hence, it was admitted in
evidence and accorded weight by the judge. Indeed,
petitioner's failure to object properly rendered the divorce
Sydney, Australia.[38] 
Compliance with the quoted articles (11, 13 and 52) of the
Family Code is not necessary; respondent was no longer bound
by Philippine personal laws after he acquired Australian
citizenship in 1992.[39] Naturalization is the legal act of
rights belonging to a citizen.[40] Naturalized citizens, freed
from the protective cloak of their former states, don the attires
of their adoptive countries. By becoming an Australian,
respondent severed his allegiance to the Philippines and the
vinculum juris that had tied him to Philippine personal laws. 
Burden of Proving Australian Law 
Respondent contends that the burden to prove Australian
divorce law falls upon petitioner, because she is the party
challenging the validity of a foreign judgment. He contends
that petitioner was satisfied with the original of the divorce
because she had lived and worked in that country for quite a
long time. Besides, the Australian divorce law is allegedly
known by Philippine courts; thus, judges may take judicial
notice of foreign laws in the exercise of sound discretion. 
We are not persuaded. The burden of proof lies with "the party
who alleges the existence of a fact or thing necessary in the
prosecution or defense of an action."[41] In civil cases,
plaintiffs have the burden of proving the material allegations of
the complaint when those are denied by the answer; and
in their answer when they introduce new matters.[42] Since
the divorce was a defense raised by respondent, the burden of
proving the pertinent Australian law validating it falls squarely
upon him. 
judicial notice of foreign laws.[43] Like any other facts, they
Page 88 of 304
must be alleged and proved. Australian marital laws are not  
among those matters that judges are supposed to know by
reason of their judicial function.[44] The power of judicial "1. A party to a marriage who marries again before this decree
notice must be exercised with caution, and every reasonable becomes absolute (unless the other party has died) commits
doubt upon the subject should be resolved in the negative.  the offence of bigamy."[48] 

   

Second Issue: Respondent's Legal Capacity to Remarry  This quotation bolsters our contention that the divorce
obtained by respondent may have been restricted. It did not
  absolutely establish his legal capacity to remarry according to
his national law. Hence, we find no basis for the ruling of the
Petitioner contends that, in view of the insufficient proof of the trial court, which erroneously assumed that the Australian
divorce, respondent was legally incapacitated to marry her in divorce ipso facto restored respondent's capacity to remarry
1994. Hence, she concludes that their marriage was void ab despite the paucity of evidence on this matter. 
initio. 
 
 
We also reject the claim of respondent that the divorce decree
Respondent replies that the Australian divorce decree, which raises a disputable presumption or presumptive evidence as to
was validly admitted in evidence, adequately established his his civil status based on Section 48, Rule 39[49] of the Rules of
legal capacity to marry under Australian law.  Court, for the simple reason that no proof has been presented
on the legal effects of the divorce decree obtained under
 
Australian laws. 
Respondent's contention is untenable. In its strict legal sense,
 
divorce means the legal dissolution of a lawful union for a
cause arising after marriage. But divorces are of different Significance of the Certificate of Legal Capacity 
types. The two basic ones are (1) absolute divorce or a vinculo
matrimonii and (2) limited divorce or a mensa et thoro. The  
first kind terminates the marriage, while the second suspends
it and leaves the bond in full force.[45] There is no showing in Petitioner argues that the certificate of legal capacity required
the case at bar which type of divorce was procured by by Article 21 of the Family Code was not submitted together
respondent.  with the application for a marriage license. According to her,
its absence is proof that respondent did not have legal capacity
  to remarry. 

Respondent presented a decree nisi or an interlocutory decree  

-- a conditional or provisional judgment of divorce. It is in
effect the same as a separation from bed and board, although We clarify. To repeat, the legal capacity to contract marriage is
an absolute divorce may follow after the lapse of the determined by the national law of the party concerned. The
prescribed period during which no reconciliation is effected. certificate mentioned in Article 21 of the Family Code would
[46]  have been sufficient to establish the legal capacity of
respondent, had he duly presented it in court. A duly
  authenticated and admitted certificate is prima facie evidence
of legal capacity to marry on the part of the alien applicant for
Even after the divorce becomes absolute, the court may under a marriage license.[50] 
some foreign statutes and practices, still restrict remarriage.
Under some other jurisdictions, remarriage may be limited by  
statute; thus, the guilty party in a divorce which was granted
on the ground of adultery may be prohibited from marrying As it is, however, there is absolutely no evidence that proves
again. The court may allow a remarriage only after proof of respondent's legal capacity to marry petitioner. A review of the
good behavior.[47]  records before this Court shows that only the following exhibits
were presented before the lower court: (1) for petitioner: (a)
  Exhibit "A" - Complaint;[51] (b) Exhibit "B" - Certificate of
Marriage Between Rederick A. Recio (Filipino-Australian) and
On its face, the herein Australian divorce decree contains a Grace J. Garcia (Filipino) on January 12, 1994 in Cabanatuan
restriction that reads:  City, Nueva Ecija;[52] (c) Exhibit "C" - Certificate of Marriage

Page 89 of 304
Between Rederick A. Recio (Filipino) and Editha D. Samson
(Australian) on March 1, 1987 in Malabon, Metro Manila;[53]
(d) Exhibit "D" - Office of the City Registrar of Cabanatuan City
Certification that no information of annulment between
Rederick A. Recio and Editha D. Samson was in its records;[54]
and (e) Exhibit "E" - Certificate of Australian Citizenship of
Rederick A. Recio;[55] (2) for respondent: (a) Exhibit "1" --
Amended Answer;[56] (b) Exhibit "2" - Family Law Act 1975
Decree Nisi of Dissolution of Marriage in the Family Court of
Australia;[57] (c) Exhibit "3" - Certificate of Australian
Citizenship of Rederick A. Recio;[58] (d) Exhibit "4" - Decree
Nisi of Dissolution of Marriage in the Family Court of Australia
Certificate;[59] and Exhibit "5" -- Statutory Declaration of the
Legal Separation Between Rederick A. Recio and Grace J.
Garcia Recio since October 22, 1995.[60] 
 
Based on the above records, we cannot conclude that
respondent, who was then a naturalized Australian citizen, was
legally capacitated to marry petitioner on January 12, 1994.
We agree with petitioner's contention that the court a quo
erred in finding that the divorce decree ipso facto clothed
respondent with the legal capacity to remarry without requiring
him to adduce sufficient evidence to show the Australian
personal law governing his status; or at the very least, to
prove his legal capacity to contract the second marriage. 
 
Neither can we grant petitioner's prayer to declare her
marriage to respondent null and void on the ground of bigamy.
After all, it may turn out that under Australian law, he was
really capacitated to marry petitioner as a direct result of the
divorce decree. Hence, we believe that the most judicious
course is to remand this case to the trial court to receive
evidence, if any, which show petitioner's legal capacity to
marry petitioner. Failing in that, then the court a quo may
declare a nullity of the parties' marriage on the ground of
bigamy, there being already in evidence two existing marriage
certificates, which were both obtained in the Philippines, one in
Malabon, Metro Manila dated March 1, 1987 and the other, in
Cabanatuan City dated January 12, 1994. 
WHEREFORE, in the interest of orderly procedure and
substantial justice, we REMAND the case to the court a quo
for the purpose of receiving evidence which conclusively show
respondent's legal capacity to marry petitioner; and failing in
that, of declaring the parties' marriage void on the ground of
bigamy, as above discussed. No costs.  Padlan children within ten (10) days from receipt thereof, after
 
SO ORDERED.  documents being submitted.
Quita vs CA
FE D. QUITA, petitioner, vs. COURT OF APPEALS and
BLANDINA DANDAN,* respondents.
BELLOSILLO, J .: 
 
FE D. QUITA and Arturo T. Padlan, both Filipinos, were married
in the Philippines on 18 May 1941. They were not however
blessed with children. Somewhere along the way their
relationship soured. Eventually Fe sued Arturo for divorce in
San Francisco, California, U.S.A. She submitted in the divorce
proceedings a private writing dated 19 July 1950 evidencing
their agreement to live separately from each other and a
settlement of their conjugal properties. On 23 July 1954 she
obtained a final judgment of divorce. Three (3) weeks
thereafter she married a certain Felix Tupaz in the same
locality but their relationship also ended in a divorce. Still in
the U.S.A., she married for the third time, to a certain
Wernimont. 
 
On 16 April 1972 Arturo died. He left no will. On 31 August
1972 Lino Javier Inciong filed a petition with the Regional Trial
Court of Quezon City for issuance of letters of administration
concerning the estate of Arturo in favor of the Philippine Trust
Company. Respondent Blandina Dandan (also referred to
as Blandina Padlan), claiming to be the surviving spouse of
Arturo Padlan, and Claro, Alexis, Ricardo, Emmanuel, Zenaida
and Yolanda, all surnamed Padlan, named in the petition as
surviving children of Arturo Padlan, opposed the petition and
prayed for the appointment instead of Atty. Leonardo Cabasal,
which was resolved in favor of the latter. Upon motion of the
oppositors themselves, Atty. Cabasal was later replaced by
Higino Castillon. On 30 April 1973 the oppositors (Blandina and
the Padlan children) submitted certified photocopies of the 19
July 1950 private writing and the final judgment of divorce
between petitioner and Arturo. Later Ruperto T. Padlan,
claiming to be the sole surviving brother of the deceased
Arturo, intervened. 
On 7 October 1987 petitioner moved for the immediate
declaration of heirs of the decedent and the distribution of his
estate. At the scheduled hearing on 23 October 1987, private
respondent as well as the six (6) Padlan children and Ruperto
failed to appear despite due notice. On the same day, the trial
court required the submission of the records of birth of the
which, with or without the documents, the issue on the
declaration of heirs would be considered submitted for
resolution. The prescribed period lapsed without the required
 
Page 90 of 304
   

The trial court invoking Tenchavez v. Escaño[1] which held Should this case be remanded to the lower court for further
that "a foreign divorce between Filipino citizens sought and proceedings? Petitioner insists that there is no need because,
decreed after the effectivity of the present Civil Code (Rep. Act first, no legal or factual issue obtains for resolution either as to
386) was not entitled to recognition as valid in this the heirship of the Padlan children or as to their respective
jurisdiction,"[2] disregarded the divorce between petitioner and shares in the intestate estate of the decedent; and, second,
Arturo. Consequently, it expressed the view that their marriage the issue as to who between petitioner and private respondent
subsisted until the death of Arturo in 1972. Neither did it is the proper heir of the decedent is one of law which can be
consider valid their extrajudicial settlement of conjugal resolved in the present petition based on established facts and
properties due to lack of judicial approval.[3] On the other admissions of the parties. 
hand, it opined that there was no showing that marriage
existed between private respondent and Arturo, much less was  
it shown that the alleged Padlan children had been
We cannot sustain petitioner. The provision relied upon by
acknowledged by the deceased as his children with her. As
respondent court is clear: If there is a controversy  before the
regards Ruperto, it found that he was a brother of Arturo. On
court as to who are the lawful heirs of the deceased person or
27 November 1987[4] only petitioner and Ruperto were
as to the distributive shares to which each person is entitled
declared the intestate heirs of Arturo. Accordingly, equal
under the law, the controversy shall be heard and decided as
adjudication of the net hereditary estate was ordered in favor
in ordinary cases. 
of the two intestate heirs.[5] 
 
 
We agree with petitioner that no dispute exists either as to the
On motion for reconsideration, Blandina and the Padlan
right of the six (6) Padlan children to inherit from the decedent
children were allowed to present proofs that the recognition of
because there are proofs that they have been duly
the children by the deceased as his legitimate children, except
acknowledged by him and petitioner herself even recognizes
Alexis who was recognized as his illegitimate child, had been
them as heirs of Arturo Padlan;[10] nor as to their respective
made in their respective records of birth. Thus on 15 February
hereditary shares. But controversy remains as to who is the
1988[6] partial reconsideration was granted declaring the
legitimate surviving spouse of Arturo. The trial court, after the
Padlan children, with the exception of Alexis, entitled to one-
parties other than petitioner failed to appear during the
half of the estate to the exclusion of Ruperto Padlan, and
scheduled hearing on 23 October 1987 of the motion for
petitioner to the other half.[7] Private respondent was not
immediate declaration of heirs and distribution of estate,
declared an heir. Although it was stated in the aforementioned
simply issued an order requiring the submission of the records
records of birth that she and Arturo were married on 22 April
of birth of the Padlan children within ten (10) days from receipt
1947, their marriage was clearly void since it was celebrated
thereof, after which, with or without the documents, the issue
during the existence of his previous marriage to petitioner. 
on declaration of heirs would be deemed submitted for
  resolution. 

In their appeal to the Court of Appeals, Blandina and her  

children assigned as one of the errors allegedly committed by
the trial court the circumstance that the case was decided
without a hearing, in violation of Sec. 1, Rule 90, of the Rules
of Court, which provides that if there is a controversy before
the court as to who are the lawful heirs of the deceased
person or as to the distributive shares to which each person is
entitled under the law, the controversy shall be heard and
decided as in ordinary cases. 
 
Respondent appellate court found this ground alone sufficient
to sustain the appeal; hence, on 11 September 1995 it
declared null and void the 27 November 1987 decision and 15
February 1988 order of the trial court, and directed the remand
of the case to the trial court for further proceedings.[8] On 18
April 1996 it denied reconsideration.[9] 
We note that in her comment to petitioner's motion private
respondent raised, among others, the issue as to whether
petitioner was still entitled to inherit from the decedent
considering that she had secured a divorce in the U.S.A. and in
fact had twice remarried. She also invoked the above quoted
procedural rule.[11] To this, petitioner replied that Arturo was
a Filipino and as such remained legally married to her in spite
of the divorce they obtained.[12] Reading between the lines,
the implication is that petitioner was no longer a Filipino citizen
at the time of her divorce from Arturo. This should have
prompted the trial court to conduct a hearing to establish her
citizenship. The purpose of a hearing is to ascertain the truth
of the matters in issue with the aid of documentary and
testimonial evidence as well as the arguments of the parties
either supporting or opposing the evidence. Instead, the lower

Page 91 of 304
court perfunctorily settled her claim in her favor by merely
applying the ruling in Tenchavez v. Escaño.  prior marriage of petitioner and Arturo was subsisting thereby
 
Then in private respondent's motion to set aside and/or
reconsider the lower court's decision she stressed that the
citizenship of petitioner was relevant in the light of the ruling
in Van Dorn v. Romillo Jr.[13] that aliens may obtain divorces
abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. She prayed
therefore that the case be set for hearing.[14] Petitioner
opposed the motion but failed to squarely address the issue on
her citizenship.[15] The trial court did not grant private
respondent's prayer for a hearing but proceeded to resolve her
motion with the finding that both petitioner and Arturo were
"Filipino citizens and were married in the Philippines."[16] It
maintained that their divorce obtained in 1954 in San
Francisco, California, U.S.A., was not valid in Philippine
jurisdiction. We deduce that the finding on their citizenship
pertained solely to the time of their marriage as the trial court
was not supplied with a basis to determine petitioner's
citizenship at the time of their divorce. The doubt persisted as
to whether she was still  a Filipino citizen when their divorce
was decreed. The trial court must have overlooked the
materiality of this aspect. Once proved that she was no longer
a Filipino citizen at the time of their divorce, Van Dorn would
become applicable and petitioner could very well lose her right
to inherit from Arturo. 
 
Respondent again raised in her appeal the issue on petitioner's
citizenship;[17] it did not merit enlightenment however from
petitioner.[18] In the present proceeding, petitioner's
citizenship is brought anew to the fore by private respondent.
She even furnishes the Court with the transcript of
stenographic notes taken on 5 May 1995 during the hearing for
the reconstitution of the original of a certain transfer certificate
title as well as the issuance of new owner's duplicate copy
thereof before another trial court. When asked whether she
was an American citizen petitioner answered that she was
since 1954.[19] Significantly, the decree of divorce of
petitioner and Arturo was obtained in the same year. Petitioner
however did not bother to file a reply memorandum to erase
the uncertainty about her citizenship at the time of their
divorce, a factual issue requiring hearings to be conducted by
the trial court. Consequently, respondent appellate court did
not err in ordering the case returned to the trial court for
further proceedings. 
We emphasize however that the question to be determined by
the trial court should be limited only to the right of petitioner
to inherit from Arturo as his surviving spouse. Private
respondent's claim to heirship was already resolved by the trial
court. She and Arturo were married on 22 April 1947 while the
resulting in a bigamous marriage considered void from the
beginning under Arts. 80 and 83 of the Civil Code.
Consequently, she is not a surviving spouse that can inherit
from him as this status presupposes a legitimate relationship.
[20] 
 
As regards the motion of private respondent for petitioner and
her counsel to be declared in contempt of court and that the
present petition be dismissed for forum shopping,[21] the
same lacks merit. For forum shopping to exist the actions must
involve the same transactions and same essential facts and
circumstances. There must also be identical causes of action,
subject matter and issue.[22] The present petition deals with
declaration of heirship while the subsequent petitions filed
before the three (3) trial courts concern the issuance of new
owner's duplicate copies of titles of certain properties
belonging to the estate of Arturo. Obviously, there is no reason
to declare the existence of forum shopping. 
 
WHEREFORE, the petition is DENIED. The decision of
respondent Court of Appeals ordering the remand of the case
to the court of origin for further proceedings and declaring null
and void its decision holding petitioner Fe D. Quita and
Ruperto T. Padlan as intestate heirs is AFFIRMED. The order
of the appellate court modifying its previous decision by
granting one-half (1/2) of the net hereditary estate to the
Padlan children, namely, Claro, Ricardo, Emmanuel, Zenaida
and Yolanda, with the exception of Alexis, all surnamed
Padlan, instead of Arturo's brother Ruperto Padlan, is
likewise AFFIRMED. The Court however emphasizes that the
reception of evidence by the trial court should be limited to the
hereditary rights of petitioner as the surviving spouse of Arturo
Padlan. 
 
The motion to declare petitioner and her counsel in contempt
of court and to dismiss the present petition for forum shopping
is DENIED. 
SO ORDERED. 
Elmar Perez vs CA
ELMAR O. PEREZ, Petitioner, vs. COURT OF APPEALS,
Fifth Division, TRISTAN A. CATINDIG and LILY GOMEZ-
CATINDIG, Respondents.
YNARES-SANTIAGO, J.: 
Page 92 of 304

This petition for certiorari and prohibition under Rule 65 of the
Rules of Court assails the July 25, 2003 Decision[1] of the
Court of Appeals in CA-G.R. SP No. 74456 which set aside and
declared as null and void the September 30, 2002 Order[2] of
the Regional Trial Court of Quezon City, Branch 84, granting
petitioner's motion for leave to file intervention and admitting
the Complaint-in-Intervention[3] in Civil Case No. Q-01-44847;
and its January 23, 2004 Resolution[4] denying the motion for
reconsideration. 
Private respondent Tristan A. Catindig married Lily Gomez
Catindig[5] twice on May 16, 1968. The first marriage
ceremony was celebrated at the Central Methodist Church at
T.M. Kalaw Street , Ermita, Manila while the second took place
at the Lourdes Catholic Church in La Loma, Quezon City. The
marriage produced four children.  intervention was also ordered admitted.
Several years later, the couple encountered marital problems
that they decided to separate from each other. Upon advice of
a mutual friend, they decided to obtain a divorce from the
Dominican Republic. Thus, on April 27, 1984, Tristan and Lily
executed a Special Power of Attorney addressed to the Judge
of the First Civil Court of San Cristobal, Dominican Republic,
appointing an attorney-in-fact to institute a divorce action
under its laws.[6] 
Thereafter, on April 30, 1984, the private respondents filed a
joint petition for dissolution of conjugal partnership with the
Regional Trial Court of Makati. On June 12, 1984, the civil
court in the Dominican Republic ratified the divorce by mutual
consent of Tristan and Lily. Subsequently, on June 23, 1984,
the Regional Trial Court of Makati City, Branch 133, ordered
the complete separation of properties between Tristan and
Lily. 
On July 14, 1984, Tristan married petitioner Elmar O. Perez in
the State of Virginia in the United States[7] and both lived as
husband and wife until October 2001. Their union produced
one offspring.[8] 
During their cohabitation, petitioner learned that the divorce
decree issued by the court in the Dominican Republic which
"dissolved" the marriage between Tristan and Lily was not
recognized in the Philippines and that her marriage to Tristan
was deemed void under Philippine law. When she confronted
Tristan about this, the latter assured her that he would legalize
their union after he obtains an annulment of his marriage with
Lily. Tristan further promised the petitioner that he would
adopt their son so that he would be entitled to an equal share
in his estate as that of each of his children with Lily.[9] 
On August 13, 2001, Tristan filed a petition for the declaration
of nullity of his marriage to Lily with the Regional Trial Court of
Quezon City, docketed as Case No. Q-01-44847. 
Subsequently, petitioner filed a Motion for Leave to File
Intervention[10] claiming that she has a legal interest in the
matter in litigation because she knows certain information
which might aid the trial court at a truthful, fair and just
adjudication of the annulment case, which the trial court
granted on September 30, 2002. Petitioner's complaint-in-
 
Tristan filed a petition for certiorari and prohibition with the
Court of Appeals seeking to annul the order dated September
30, 2002 of the trial court. The Court of Appeals granted the
petition and declared as null and void the September 30, 2002
Order of the trial court granting the motion for leave to file
intervention and admitting the complaint-in-intervention. 
Petitioner's motion for reconsideration was denied, hence this
petition for certiorari and prohibition filed under Rule 65 of the
Rules of Court. Petitioner contends that the Court of Appeals
gravely abused its discretion in disregarding her legal interest
in the annulment case between Tristan and Lily. 
The petition lacks merit. 
Ordinarily, the proper recourse of an aggrieved party from a
decision of the Court of Appeals is a petition for review on
certiorari under Rule 45 of the Rules of Court. However, if the
error subject of the recourse is one of jurisdiction, or the act
complained of was granted by a court with grave abuse of
discretion amounting to lack or excess of jurisdiction, as
alleged in this case, the proper remedy is a petition for
certiorari under Rule 65 of the said Rules.[11] This is based on
the premise that in issuing the assailed decision and resolution,
the Court of Appeals acted with grave abuse of discretion,
amounting to excess of lack of jurisdiction and there is no
plain, speedy and adequate remedy in the ordinary course of
law. A remedy is considered plain, speedy, and adequate if it
Page 93 of 304
will promptly relieve the petitioner from the injurious effect of character that the intervenor will either gain or lose by direct
the judgment and the acts of the lower court.[12]  legal operation and effect of the judgment.[17] Such interest
must be actual, direct and material, and not simply contingent
and expectant.[18] 

It is therefore incumbent upon the petitioner to establish that

the Court of Appeals acted with grave abuse of discretion
amounting to excess or lack of jurisdiction when it Petitioner claims that her status as the wife and companion of
promulgated the assailed decision and resolution.  Tristan for 17 years vests her with the requisite legal interest
required of a would-be intervenor under the Rules of Court. 

We have previously ruled that grave abuse of discretion may

arise when a lower court or tribunal violates or contravenes the Petitioner's claim lacks merit. Under the law, petitioner was
Constitution, the law or existing jurisprudence. By grave abuse never the legal wife of Tristan, hence her claim of legal interest
of discretion is meant, such capricious and whimsical exercise has no basis. 
of judgment as is equivalent to lack of jurisdiction. The abuse
of discretion must be grave as where the power is exercised in
an arbitrary or despotic manner by reason of passion or
When petitioner and Tristan married on July 14, 1984, Tristan
personal hostility and must be so patent and gross as to
was still lawfully married to Lily. The divorce decree that
amount to an evasion of positive duty or to a virtual refusal to
Tristan and Lily obtained from the Dominican Republic never
perform the duty enjoined by or to act at all in contemplation
dissolved the marriage bond between them. It is basic that
of law.[13] The word "capricious," usually used in tandem with
laws relating to family rights and duties, or to the status,
the term "arbitrary," conveys the notion of willful and
condition and legal capacity of persons are binding upon
unreasoning action. Thus, when seeking the corrective hand of
citizens of the Philippines, even though living abroad.[19]
certiorari, a clear showing of caprice and arbitrariness in the
Regardless of where a citizen of the Philippines might be, he or
exercise of discretion is imperative.[14] 
she will be governed by Philippine laws with respect to his or
her family rights and duties, or to his or her status, condition
and legal capacity. Hence, if a Filipino regardless of whether he
The Rules of Court laid down the parameters before a person, or she was married here or abroad, initiates a petition abroad
not a party to a case can intervene, thus:  to obtain an absolute divorce from spouse and eventually
becomes successful in getting an absolute divorce decree, the
Philippines will not recognize such absolute divorce.[20] 

Who may intervene. - A person who has a legal interest in the

matter in litigation, or in the success of either of the parties, or
an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the
custody of the court or of an officer thereof may, with leave of
court, be allowed to intervene in the action. The court shall
consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties,
and whether or not the intervenor's rights may be fully
protected in a separate proceeding.[15] 
The requirements for intervention are: [a] legal interest in the
matter in litigation; and [b] consideration must be given as to
whether the adjudication of the original parties may be delayed
or prejudiced, or whether the intervenor's rights may be
protected in a separate proceeding or not.[16] 
When Tristan and Lily married on May 18, 1968, their marriage
was governed by the provisions of the Civil Code[21] which
took effect on August 30, 1950. In the case of Tenchavez v.
Escano[22] we held: 
(1) That a foreign divorce between Filipino citizens, sought and
decreed after the effectivity of the present Civil Code (Rep. Act
No. 386), is not entitled to recognition as valid in this
jurisdiction; and neither is the marriage contracted with
another party by the divorced consort, subsequently to
the foreign decree of divorce, entitled to validity in the
country. (Emphasis added) 

Thus, petitioner's claim that she is the wife of Tristan even if

their marriage was celebrated abroad lacks merit. 
Legal interest, which entitles a person to intervene, must be in
the matter in litigation and of such direct and immediate

Page 94 of 304
Thus, petitioner never acquired the legal interest as a wife Luis, then surnamed Sagalongos, before Rev. Fr. William
upon which her motion for intervention is based.  Meyer, Minister of the United Presbyterian at Wilshire
Boulevard, Los Angeles, California, U.S.A.[7] He had no
children with respondent but lived with her for 18 years from
the time of their marriage up to his death on December 18,
Since petitioner's motion for leave to file intervention was
1992.
bereft of the indispensable requirement of legal interest, the
issuance by the trial court of the order granting the same and
Thereafter, respondent sought the dissolution of their conjugal
admitting the complaint-in-intervention was attended with
partnership assets and the settlement of Felicisimo's estate. On
grave abuse of discretion. Consequently, the Court of Appeals
December 17, 1993, she filed a petition for letters of
correctly set aside and declared as null and void the said
administration[8] before the Regional Trial Court of Makati
order. 
City, docketed as SP. Proc. No. M-3708 which was raffled to
Branch 146 thereof.

WHEREFORE, the petition is DISMISSED. The assailed Respondent alleged that she is the widow of Felicisimo; that,
Decision dated July 25, 2003 and Resolution dated January 23, at the time of his death, the decedent was residing at 100 San
2004 of the Court of Appeals in CA-G.R. SP No. 74456 Juanico Street, New Alabang Village, Alabang, Metro Manila;
are AFFIRMED.  that the decedent's surviving heirs are respondent as legal
spouse, his six children by his first marriage, and son by his
second marriage; that the decedent left real properties, both
conjugal and exclusive, valued at P30,304,178.00 more or less;
No pronouncement as to costs.  that the decedent does not have any unpaid debts.
Respondent prayed that the conjugal partnership assets be
liquidated and that letters of administration be issued to her.
SO ORDERED. 
On February 4, 1994, petitioner Rodolfo San Luis, one of the
children of Felicisimo by his first marriage, filed a motion to
dismiss[9] on the grounds of improper venue and failure to
San Luis vs San Luis
state a cause of action. Rodolfo claimed that the petition for
YNARES-SANTIAGO, J.:
letters of administration should have been filed in the Province
of Laguna because this was Felicisimo's place of residence
Before us are consolidated petitions for review assailing the
prior to his death. He further claimed that respondent has no
February 4, 1998 Decision[1] of the Court of Appeals in CA-
legal personality to file the petition because she was only a
G.R. CV No. 52647, which reversed and set aside the
mistress of Felicisimo since the latter, at the time of his death,
September 12, 1995[2] and January 31, 1996[3] Resolutions of
was still legally married to Merry Lee.
the Regional Trial Court of Makati City, Branch 134 in SP. Proc.
No. M-3708; and its May 15, 1998 Resolution[4] denying
On February 15, 1994, Linda invoked the same grounds and
petitioners' motion for reconsideration.
joined her brother Rodolfo in seeking the dismissal[10] of the
petition. On February 28, 1994, the trial court issued an
The instant case involves the settlement of the estate of
Order[11] denying the two motions to dismiss.
Felicisimo T. San Luis (Felicisimo), who was the former
governor of the Province of Laguna. During his lifetime,
Unaware of the denial of the motions to dismiss, respondent
Felicisimo contracted three marriages. His first marriage was
filed on March 5, 1994 her opposition[12] thereto. She
with Virginia Sulit on March 17, 1942 out of which were born
submitted documentary evidence showing that while Felicisimo
six children, namely: Rodolfo, Mila, Edgar, Linda, Emilita and
exercised the powers of his public office in Laguna, he
Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
regularly went home to their house in New Alabang Village,
Alabang, Metro Manila which they bought sometime in 1982.
Five years later, on May 1, 1968, Felicisimo married Merry Lee
Further, she presented the decree of absolute divorce issued
Corwin, with whom he had a son, Tobias. However, on
by the Family Court of the First Circuit, State of Hawaii to
October 15, 1971, Merry Lee, an American citizen, filed a
prove that the marriage of Felicisimo to Merry Lee had already
Complaint for Divorce[5] before the Family Court of the First
been dissolved. Thus, she claimed that Felicisimo had the legal
Circuit, State of Hawaii, United States of America (U.S.A.),
capacity to marry her by virtue of paragraph 2,[13] Article 26
which issued a Decree Granting Absolute Divorce and Awarding
of the Family Code and the doctrine laid down in Van Dorn v.
Child Custody on December 14, 1973.[6]
Romillo, Jr.[14]
On June 20, 1974, Felicisimo married respondent Felicidad San

Page 95 of 304
Thereafter, Linda, Rodolfo and herein petitioner Edgar San Respondent moved for reconsideration[26] and for the
Luis, separately filed motions for reconsideration from the disqualification[27] of Judge Arcangel but said motions were
Order denying their motions to dismiss.[15] They asserted that denied.[28]
paragraph 2, Article 26 of the Family Code cannot be given
retroactive effect to validate respondent's bigamous marriage Respondent appealed to the Court of Appeals which reversed
with Felicisimo because this would impair vested rights in and set aside the orders of the trial court in its assailed
derogation of Article 256[16] of the Family Code. Decision dated February 4, 1998, the dispositive portion of
which states:
On April 21, 1994, Mila, another daughter of Felicisimo from
his first marriage, filed a motion to disqualify Acting Presiding WHEREFORE, the Orders dated September 12, 1995 and
Judge Anthony E. Santos from hearing the case. January 31, 1996 are hereby REVERSED and SET ASIDE; the
Orders dated February 28 and October 24, 1994 are
On October 24, 1994, the trial court issued an Order[17] REINSTATED; and the records of the case is REMANDED to the
denying the motions for reconsideration. It ruled that trial court for further proceedings.[29]
respondent, as widow of the decedent, possessed the legal
The appellante court ruled that under Section 1, Rule 73 of the
standing to file the petition and that venue was properly laid.
Rules of Court, the term "place of residence" of the decedent,
Meanwhile, the motion for disqualification was deemed moot
for purposes of fixing the venue of the settlement of his estate,
and academic[18] because then Acting Presiding Judge Santos
refers to the personal, actual or physical habitation, or actual
was substituted by Judge Salvador S. Tensuan pending the
residence or place of abode of a person as distinguished from
resolution of said motion.
legal residence or domicile. It noted that although Felicisimo
discharged his functions as governor in Laguna, he actually
Mila filed a motion for inhibition[19] against Judge Tensuan on
resided in Alabang, Muntinlupa. Thus, the petition for letters of
November 16, 1994. On even date, Edgar also filed a motion
administration was properly filed in Makati City.
for reconsideration[20] from the Order denying their motion
for reconsideration arguing that it does not state the facts and
The Court of Appeals also held that Felicisimo had legal
law on which it was based.
capacity to marry respondent by virtue of paragraph 2, Article
26 of the Family Code and the rulings in Van Dorn v. Romillo,
On November 25, 1994, Judge Tensuan issued an Order[21]
Jr.[30] and Pilapil v. Ibay-Somera.[31] It found that the
granting the motion for inhibition. The case was re-raffled to
marriage between Felicisimo and Merry Lee was validly
Branch 134 presided by Judge Paul T. Arcangel.
dissolved by virtue of the decree of absolute divorce issued by
the Family Court of the First Circuit, State of Hawaii. As a
On April 24, 1995,[22] the trial court required the parties to
result, under paragraph 2, Article 26, Felicisimo was
submit their respective position papers on the twin issues of
capacitated to contract a subsequent marriage with
venue and legal capacity of respondent to file the petition. On
respondent. Thus -
May 5, 1995, Edgar manifested[23] that he is adopting the
arguments and evidence set forth in his previous motion for
With the well-known rule - express mandate of paragraph 2,
reconsideration as his position paper. Respondent and Rodolfo
Article 26, of the Family Code of the Philippines, the doctrines
filed their position papers on June 14,[24] and June 20,[25]
in Van Dorn, Pilapil, and the reason and philosophy behind the
1995, respectively.
enactment of E.O. No. 227, - there is no justiciable reason to
sustain the individual view - sweeping statement - of Judge
On September 12, 1995, the trial court dismissed the petition
Arc[h]angel, that "Article 26, par. 2 of the Family Code,
for letters of administration. It held that, at the time of his
contravenes the basic policy of our state against divorce in any
death, Felicisimo was the duly elected governor and a resident
form whatsoever." Indeed, courts cannot deny what the law
of the Province of Laguna. Hence, the petition should have
grants. All that the courts should do is to give force and effect
been filed in Sta. Cruz, Laguna and not in Makati City. It also
to the express mandate of the law. The foreign divorce having
ruled that respondent was without legal capacity to file the
been obtained by the Foreigner on December 14, 1992,[32]
petition for letters of administration because her marriage with
the Filipino divorcee, "shall x x x have capacity to remarry
Felicisimo was bigamous, thus, void ab initio. It found that the
under Philippine laws". For this reason, the marriage between
decree of absolute divorce dissolving Felicisimo's marriage to
the deceased and petitioner should not be denominated as "a
Merry Lee was not valid in the Philippines and did not bind
bigamous marriage.
Felicisimo who was a Filipino citizen. It also ruled that
paragraph 2, Article 26 of the Family Code cannot be
Therefore, under Article 130 of the Family Code, the petitioner
retroactively applied because it would impair the vested rights
as the surviving spouse can institute the judicial proceeding for
of Felicisimo's legitimate children.
the settlement of the estate of the deceased. x x x[33]

Page 96 of 304
Edgar, Linda, and Rodolfo filed separate motions for
reconsideration[34] which were denied by the Court of
Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant
petition for review on certiorari.[35] Rodolfo later filed a
manifestation and motion to adopt the said petition which was
granted.[36]
In the instant consolidated petitions, Edgar and Rodolfo insist
that the venue of the subject petition for letters of
administration was improperly laid because at the time of his
death, Felicisimo was a resident of Sta. Cruz, Laguna. They
contend that pursuant to our rulings in Nuval v. Guray[37]
and Romualdez v. RTC, Br. 7, Tacloban City,[38] "residence" is
synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They
claim that a person can only have one domicile at any given
time. Since Felicisimo never changed his domicile, the petition
for letters of administration should have been filed in Sta. Cruz,
Laguna.
Petitioners also contend that respondent's marriage to
Felicisimo was void and bigamous because it was performed
during the subsistence of the latter's marriage to Merry Lee.
They argue that paragraph 2, Article 26 cannot be retroactively
applied because it would impair vested rights and ratify the
void bigamous marriage. As such, respondent cannot be
considered the surviving wife of Felicisimo; hence, she has no
legal capacity to file the petition for letters of administration.
The issues for resolution: (1) whether venue was properly laid,
and (2) whether respondent has legal capacity to file the
subject petition for letters of administration.
The petition lacks merit.
Under Section 1,[39] Rule 73 of the Rules of Court, the petition
for letters of administration of the estate of Felicisimo should
be filed in the Regional Trial Court of the province "in which
he resides at the time of his death." In the case of Garcia Fule
v. Court of Appeals,[40] we laid down the doctrinal rule for
determining the residence - as contradistinguished from
domicile - of the decedent for purposes of fixing the venue of
the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence"
as distinguished from "legal residence or domicile." This term
"resides," like the terms "residing" and "residence," is elastic
and should be interpreted in the light of the object or purpose
of the statute or rule in which it is employed. In the application
of venue statutes and rules - Section 1, Rule 73 of the Revised
Rules of Court is of such nature - residence rather
than  domicile is the significant factor. Even where the statute
uses the word "domicile" still it is construed as meaning
residence and not domicile in the technical sense. Some cases
make a distinction between the terms "residence" and
"domicile" but as generally used in statutes fixing venue, the
terms are synonymous, and convey the same meaning as the
term "inhabitant." In other words, "resides" should be viewed
or understood in its popular sense, meaning, the personal,
actual or physical habitation of a person, actual
residence or place of abode. It signifies physical presence
in a place and actual stay thereat. In this popular sense, the
term means merely residence, that is, personal residence, not
legal residence or domicile. Residence simply requires
bodily presence as an inhabitant  in a given place, while
domicile requires bodily presence in that place and also an
intention to make it one's domicile. No particular length of time
of residence is required though; however, the residence must
be more than temporary.[41] (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for
purposes of fixing the venue of the settlement of the estate of
Felicisimo, is synonymous with "domicile." The rulings
in Nuval and Romualdez  are inapplicable to the instant case
because they involve election cases. Needless to say, there is a
distinction between "residence" for purposes of election laws
and "residence" for purposes of fixing the venue of actions. In
election cases, "residence" and "domicile" are treated as
synonymous terms, that is, the fixed permanent residence to
which when absent, one has the intention of returning.[42]
However, for purposes of fixing venue under the Rules of
Court, the "residence" of a person is his personal, actual or
physical habitation, or actual residence or place of abode,
which may not necessarily be his legal residence or domicile
provided he resides therein with continuity and consistency.
[43] Hence, it is possible that a person may have his residence
in one place and domicile in another.
In the instant case, while petitioners established that Felicisimo
was domiciled in Sta. Cruz, Laguna, respondent proved that he
also maintained a residence in Alabang, Muntinlupa from 1982
up to the time of his death. Respondent submitted in evidence
the Deed of Absolute Sale[44] dated January 5, 1983 showing
that the deceased purchased the aforesaid property. She also
presented billing statements[45] from the Philippine Heart
Center and Chinese General Hospital for the period August to
December 1992 indicating the address of Felicisimo at "100
San Juanico, Ayala Alabang, Muntinlupa." Respondent also
presented proof of membership of the deceased in the Ayala
Alabang Village Association[46] and Ayala Country Club, Inc.,
[47] letter-envelopes[48] from 1988 to 1990 sent by the
deceased's children to him at his Alabang address, and the
deceased's calling cards[49] stating that his home/city address
is at "100 San Juanico, Ayala Alabang Village, Muntinlupa"
while his office/provincial address is in "Provincial Capitol, Sta.
Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of
Alabang, Muntinlupa for purposes of fixing the venue of the
settlement of his estate. Consequently, the subject petition for
Page 97 of 304
letters of administration was validly filed in the Regional Trial
Court[50] which has territorial jurisdiction over Alabang,
Muntinlupa. The subject petition was filed on December 17,
1993. At that time, Muntinlupa was still a municipality and the
branches of the Regional Trial Court of the National Capital
Judicial Region which had territorial jurisdiction over
Muntinlupa were then seated in Makati City as per Supreme
Court Administrative Order No. 3.[51] Thus, the subject
petition was validly filed before the Regional Trial Court of
Makati City.
Anent the issue of respondent Felicidad's legal personality to
file the petition for letters of administration, we must first
resolve the issue of whether a Filipino who is divorced by his
alien spouse abroad may validly remarry under the Civil Code,
considering that Felicidad's marriage to Felicisimo was
solemnized on June 20, 1974, or before the Family Code took
effect on August 3, 1988. In resolving this issue, we need not
retroactively apply the provisions of the Family Code,
particularly Art. 26, par. (2) considering that there is sufficient
jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr.[52] involved a marriage
between a foreigner and his Filipino wife, which marriage was
subsequently dissolved through a divorce obtained abroad by
the latter. Claiming that the divorce was not valid under
Philippine law, the alien spouse alleged that his interest in the
properties from their conjugal partnership should be protected.
The Court, however, recognized the validity of the divorce and
held that the alien spouse had no interest in the properties
acquired by the Filipino wife after the divorce. Thus:
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. As stated by the Federal
Supreme Court of the United States in Atherton vs. Atherton,
45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond
of matrimony by a competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and
to free them both from the bond. The marriage tie, when thus
severed as to one party, ceases to bind either. A husband
without a wife, or a wife without a husband, is unknown to the
law. When the law provides, in the nature of a penalty, that
the guilty party shall not marry again, that party, as well as the
other, is still absolutely freed from the bond of the former
marriage."
Thus, pursuant to his national law, private respondent is no
longer the husband of petitioner. He would have no standing
to sue in the case below as petitioner's husband entitled to
exercise control over conjugal assets. As he is bound by the
Decision of his own country's Court, which validly exercised
jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before
said Court from asserting his right over the alleged conjugal
property.[53]
As to the effect of the divorce on the Filipino wife, the Court
ruled that she should no longer be considered married to the
alien spouse. Further, she should not be required to perform
her marital duties and obligations. It held:
To maintain, as private respondent does, that, under
our laws, petitioner has to be considered still
married to private respondent and still subject to a
wife's obligations under Article 109,  et. seq. of the Civil
Code cannot be just. Petitioner should not be obliged to live
together with, observe respect and fidelity, and render support
to private respondent. The latter should not continue to be one
of her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country
if the ends of justice are to be served.[54] (Emphasis
added)
This principle was thereafter applied in Pilapil v. Ibay-
Somera[55] where the Court recognized the validity of a
divorce obtained abroad. In the said case, it was held that the
alien spouse is not a proper party in filing the adultery suit
against his Filipino wife. The Court stated that "the severance
of the marital bond had the effect of dissociating the former
spouses from each other, hence the actuations of one would
not affect or cast obloquy on the other."[56]
Likewise, in Quita v. Court of Appeals,[57] the Court stated
that where a Filipino is divorced by his naturalized foreign
spouse, the ruling in Van Dorn applies.[58] Although decided
on December 22, 1998, the divorce in the said case was
obtained in 1954 when the Civil Code provisions were still in
effect.
The significance of the Van Dorn  case to the development of
limited recognition of divorce in the Philippines cannot be
denied. The ruling has long been interpreted as severing
marital ties between parties in a mixed marriage and
capacitating the Filipino spouse to remarry as a necessary
consequence of upholding the validity of a divorce obtained
abroad by the alien spouse. In his treatise, Dr. Arturo M.
Tolentino cited Van Dorn stating that "if the foreigner obtains a
valid foreign divorce, the Filipino spouse shall have capacity to
remarry under Philippine law."[59] In Garcia v. Recio,[60] the
Court likewise cited the aforementioned case in relation to
Article 26.[61]
In the recent case of Republic v. Orbecido III,[62] the
historical background and legislative intent behind paragraph
2, Article 26 of the Family Code were discussed, to wit:
Brief Historical Background
Page 98 of 304
On July 6, 1987, then President Corazon Aquino signed into
law Executive Order No. 209, otherwise known as the "Family
Code," which took effect on August 3, 1988. Article 26 thereof
states:
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, 37, and 38.
On July 17, 1987, shortly after the signing of the original
Family Code, Executive Order No. 227 was likewise signed into
law, amending Articles 26, 36, and 39 of the Family Code. A
second paragraph was added to Article 26. As so amended, it
now provides:
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 have capacity to remarry under
Philippine law.  (Emphasis supplied)
xxxx
Legislative Intent
Records of the proceedings of the Family Code deliberations
showed that the intent of Paragraph 2 of Article 26, according
to Judge Alicia Sempio-Diy, a member of the Civil Code
Revision Committee,  is to avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin
to the 1985 case of Van Dorn v. Romillo, Jr. The Van
Dorn  case involved a marriage between a Filipino
citizen and a foreigner. The Court held therein that a
divorce decree validly obtained by the alien spouse is
valid in the Philippines, and consequently, the Filipino
spouse is capacitated to remarry under Philippine law.
[63] (Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a
situation where a divorce is validly obtained abroad by the
alien spouse. With the enactment of the Family Code and
paragraph 2, Article 26 thereof, our lawmakers codified the law
already established through judicial precedent.
Indeed, when the object of a marriage is defeated by
rendering its continuance intolerable to one of the parties and
productive of no possible good to the community, relief in
some way should be obtainable.[64] Marriage, being a mutual
and shared commitment between two parties, cannot possibly
be productive of any good to the society where one is
considered released from the marital bond while the other
remains bound to it. Such is the state of affairs where the alien
spouse obtains a valid divorce abroad against the Filipino
spouse, as in this case.
Petitioners cite Articles 15[65] and 17[66] of the Civil Code in
stating that the divorce is void under Philippine law insofar as
Filipinos are concerned. However, in light of this Court's rulings
in the cases discussed above, the Filipino spouse should not be
discriminated against in his own country if the ends of justice
are to be served.[67] In Alonzo v. Intermediate Appellate
Court,[68] the Court stated:
But as has also been aptly observed, we test a law by its
results; and likewise, we may add, by its purposes. It is a
cardinal rule that, in seeking the meaning of the law, the first
concern of the judge should be to discover in its provisions the
intent of the lawmaker. Unquestionably, the law should never
be interpreted in such a way as to cause injustice as this is
never within the legislative intent. An indispensable part of that
intent, in fact, for we presume the good motives of the
legislature, is to render justice.
Thus, we interpret and apply the law not independently of but
in consonance with justice. Law and justice are inseparable,
and we must keep them so. To be sure, there are some laws
that, while generally valid, may seem arbitrary when applied in
a particular case because of its peculiar circumstances. In such
a situation, we are not bound, because only of our nature and
functions, to apply them just the same, in slavish obedience to
their language. What we do instead is find a balance between
the word and the will, that justice may be done even as the
law is obeyed.
As judges, we are not automatons. We do not and must not
unfeelingly apply the law as it is worded, yielding like robots to
the literal command without regard to its cause and
consequence. "Courts are apt to err by sticking too closely to
the words of a law," so we are warned, by Justice Holmes
again, "where these words import a policy that goes beyond
them."
xxxx
More than twenty centuries ago, Justinian defined justice "as
the constant and perpetual wish to render every one his due."
That wish continues to motivate this Court when it assesses
the facts and the law in every case brought to it for decision.
Justice is always an essential ingredient of its decisions. Thus
when the facts warrants, we interpret the law in a way that will
render justice, presuming that it was the intention of the
Page 99 of 304
lawmaker, to begin with, that the law be dispensed with
justice.[69]
Applying the above doctrine in the instant case, the divorce
decree allegedly obtained by Merry Lee which absolutely
allowed Felicisimo to remarry, would have vested Felicidad
with the legal personality to file the present petition as
Felicisimo's surviving spouse. However, the records show that
there is insufficient evidence to prove the validity of the
divorce obtained by Merry Lee as well as the marriage of
respondent and Felicisimo under the laws of the U.S.A.
In Garcia v. Recio,[70] the Court laid down the specific
guidelines for pleading and proving foreign law and divorce
judgments. It held that presentation solely of the divorce
decree is insufficient and that proof of its authenticity and due
execution must be presented. Under Sections 24 and 25 of
Rule 132, a writing or document may be proven as a public or
official record of a foreign country by either (1) an official
publication or (2) a copy thereof attested by the officer having
legal custody of the document. If the record is not kept in the
Philippines, such copy must be (a) accompanied by a
certificate issued by the proper diplomatic or consular officer in
the Philippine foreign service stationed in the foreign country in
which the record is kept and (b) authenticated by the seal of
his office.[71]
With regard to respondent's marriage to Felicisimo allegedly
solemnized in California, U.S.A., she submitted photocopies of
the Marriage Certificate and the annotated text[72] of the
Family Law Act of California which purportedly show that their
marriage was done in accordance with the said law. As stated
in Garcia, however, the Court cannot take judicial notice of
foreign laws as they must be alleged and proved.[73]
Therefore, this case should be remanded to the trial court for
further reception of evidence on the divorce decree obtained
by Merry Lee and the marriage of respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry
respondent in 1974, nevertheless, we find that the latter has
the legal personality to file the subject petition for letters of
administration, as she may be considered the co-owner of
Felicisimo as regards the properties that were acquired through
their joint efforts during their cohabitation.
Section 6,[74] Rule 78 of the Rules of Court states that letters
of administration may be granted to the surviving spouse of
the decedent. However, Section 2, Rule 79 thereof also
provides in part:
SEC. 2. Contents of petition for letters of administration.  - A
petition for letters of administration must be filed by
an interested person and must show, as far as known to the
petitioner: x x x.
An "interested person" has been defined as one who would be
benefited by the estate, such as an heir, or one who has a
claim against the estate, such as a creditor. The interest must
be material and direct, and not merely indirect or contingent.
[75]
In the instant case, respondent would qualify as an interested
person who has a direct interest in the estate of Felicisimo by
virtue of their cohabitation, the existence of which was not
denied by petitioners. If she proves the validity of the divorce
and Felicisimo's capacity to remarry, but fails to prove that her
marriage with him was validly performed under the laws of the
U.S.A., then she may be considered as a co-owner under
Article 144[76] of the Civil Code. This provision governs the
property relations between parties who live together as
husband and wife without the benefit of marriage, or their
marriage is void from the beginning. It provides that the
property acquired by either or both of them through their work
or industry or their wages and salaries shall be governed by
the rules on co-ownership. In a co-ownership, it is not
necessary that the property be acquired through their joint
labor, efforts and industry. Any property acquired during the
union is prima facie  presumed to have been obtained through
their joint efforts. Hence, the portions belonging to the co-
owners shall be presumed equal, unless the contrary is proven.
[77]
Meanwhile, if respondent fails to prove the validity of both the
divorce and the marriage, the applicable provision would be
Article 148 of the Family Code which has filled the hiatus in
Article 144 of the Civil Code by expressly regulating the
property relations of couples living together as husband and
wife but are incapacitated to marry.[78] In Saguid v. Court of
Appeals,[79] we held that even if the cohabitation or the
acquisition of property occurred before the Family Code took
effect, Article 148 governs.[80] The Court described the
property regime under this provision as follows:
The regime of limited co-ownership of property governing the
union of parties who are not legally capacitated to marry each
other, but who nonetheless live together as husband and wife,
applies to properties acquired during said cohabitation in
proportion to their respective contributions. Co-ownership will
only be up to the extent of the proven actual contribution of
money, property or industry. Absent proof of the extent
thereof, their contributions and corresponding shares shall be
presumed to be equal.
xxxx
In the cases of Agapay v. Palang, and Tumlos v. Fernandez,
which involved the issue of co-ownership of properties
acquired by the parties to a bigamous marriage and an
adulterous relationship, respectively, we ruled that proof of
actual contribution in the acquisition of the property is
essential. x x x
Page 100 of 304
As in other civil cases, the burden of proof rests upon the party
who, as determined by the pleadings or the nature of the case,
asserts an affirmative issue. Contentions must be proved by
competent evidence and reliance must be had on the strength
of the party's own evidence and not upon the weakness of the
opponent's defense. x x x[81]
In view of the foregoing, we find that respondent's legal
capacity to file the subject petition for letters of administration
may arise from her status as the surviving wife of Felicisimo or
as his co-owner under Article 144 of the Civil Code or Article
148 of the Family Code.
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals reinstating and affirming the February 28,
1994 Order of the Regional Trial Court which denied
petitioners' motion to dismiss and its October 24, 1994 Order
which dismissed petitioners' motion for reconsideration
is AFFIRMED. Let this case be REMANDED to the trial court
for further proceedings.
SO ORDERED.
Lav Adia vs Heirs of Luna
SOLEDAD L. LAV ADIA, Petitioner,
vs.
HEIRS OF JUAN LUCES LUNA, represented by
GREGORIO Z. LUNA and EUGENIA ZABALLERO-LUNA,
Respondents.
BERSAMIN, J.:
 
Divorce between Filipinos is void and ineffectual under
the nationality rule adopted by Philippine law. Hence, any
settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a
divorce obtained in a foreign country lacks competent judicial
approval, and cannot be enforceable against the assets of the
husband who contracts a subsequent marriage.
 
The Case
The petitioner, the second wife of the late Atty. Juan Luces
Luna, appeals the adverse decision promulgated on November
11, 2005, 1 whereby the Court of Appeals (CA) affirmed with
modification the decision rendered on August 27, 2001 by the
Regional Trial Court (RTC), Branch 138, in Makati City.2 The CA
thereby denied her right in the 25/100 pro indiviso share of the
husband in a condominium unit, and in the law books of
the husband acquired during the second marriage.
 
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner
in the prestigious law firm Sycip, Salazar, Luna, Manalo,
Hernandez & Feliciano Law Offices at that time when he was
living with his first wife, herein intervenor-appellant Eugenia
Zaballero-Luna (EUGENIA), whom he initially married in a civil
ceremony conducted by the Justice of the Peace of Parañaque,
Rizal on September 10, 1947 and later solemnized in a church
ceremony at the Pro-Cathedral in San Miguel, Bulacan
on September 12, 1948. In ATTY. LUNA’s marriage to
EUGENIA, they begot seven (7) children, namely: Regina Maria
L. Nadal, Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria
L. Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia,
and Cesar Antonio Luna. After almost two (2) decades of
marriage, ATTY. LUNA and EUGENIA eventually agreed to live
apart from each other in February 1966 and agreed
to separation of property, to which end, they entered into a
written agreement entitled “AGREEMENT FOR SEPARATION
AND PROPERTY SETTLEMENT” dated November 12, 1975,
whereby they agreed to live separately and to dissolve and
liquidate their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree
of his marriage with EUGENIA from the Civil and Commercial
Chamber of the First Circumscription of the Court of First
Instance of Sto. Domingo, Dominican Republic. Also in Sto.
Domingo, Dominican Republic, on the same date, ATTY. LUNA
contracted another marriage, this time with SOLEDAD.
Thereafter, ATTY. LUNA and SOLEDAD returned to
the Philippines and lived together as husband and wife until
1987.
Sometime in 1977, ATTY. LUNA organized a new law
firm named: Luna, Puruganan, Sison and Ongkiko (LUPSICON)
where ATTY. LUNA was the managing partner.
On February 14, 1978, LUPSICON through ATTY.
LUNA purchased from Tandang Sora Development Corporation
the 6th Floor of Kalaw-Ledesma Condominium Project
(condominium unit) at Gamboa St., Makati City, consisting of
517.52 square meters, for P1,449,056.00, to be paid on
installment basis for 36 months starting on April 15, 1978. Said
condominium unit was to be used as law office of LUPSICON.
After full payment, the Deed of Absolute Sale over the
condominium unit was executed on July 15, 1983, and CCT No.
4779 was issued on August 10, 1983, which was registered
bearing the following names:
Page 101 of 304
  to the extent of ¾ pro-indiviso share consisting of her ½ share
in the said properties plus her ½ share in the net estate of
“JUAN LUCES LUNA, married to Soledad L. Luna (46/100); ATTY. LUNA which was bequeathed to her in the latter’s last
MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (25/100); will and testament; and that the heirs of ATTY. LUNA
GREGORIO R. PURUGANAN, married to Paz A. Puruganan through Gregorio Z. Luna excluded SOLEDAD from her share in
(17/100); and TERESITA CRUZ SISON, married to Antonio J.M. the subject properties. The complaint prayed that SOLEDAD be
Sison (12/100) x x x” declared the owner of the ¾ portion of the subject properties;
that the same be partitioned; that an accounting of the rentals
 
on the condominium unit pertaining to the share of SOLEDAD
be conducted; that a receiver be appointed to preserve ad
Subsequently, 8/100 share of ATTY. LUNA and 17/100 share
administer the subject properties; and that the heirs of ATTY.
of Atty. Gregorio R. Puruganan in the condominium unit was
LUNA be ordered to pay attorney’s fees and costs of the suit to
sold to Atty. Mario E. Ongkiko, for which a new CCT No. 21761
SOLEDAD.3
was issued on February 7, 1992 in the following names:
 
 
Ruling of the RTC
“JUAN LUCES LUNA, married to Soledad L. Luna (38/100);
MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (50/100);
TERESITA CRUZ SISON, married to Antonio J.M. Sison
On August 27, 2001, the RTC rendered its decision after trial
(12/100) x x x”
upon the aforementioned facts,4 disposing thusly:
 
 
Sometime in 1992, LUPSICON was dissolved and
WHEREFORE, judgment is rendered as follows:
the condominium unit was partitioned by the partners but the
same was still registered in common under CCT No. 21716.
The parties stipulated that the interest of ATTY. LUNA over the (a) The 24/100 pro-indiviso share in the condominium
condominium unit would be 25/100 share. unit located at the SIXTH FLOOR of the KALAW
LEDESMA CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE HUNDRED
ATTY. LUNA thereafter established and headed another law
SEVENTEEN (517/100) SQUARE METERS is adjudged to have
firm with Atty. Renato G. De la Cruz and used a portion of the
been acquired by Juan Lucas Luna through his sole industry;
office condominium unit as their office. The said law firm
lasted until the death of ATTY. JUAN on July 12, 1997.
(b) Plaintiff has no right as owner or under any other
concept over the condominium unit, hence the entry in
After the death of ATTY. JUAN, his share in the
Condominium Certificate of Title No. 21761 of the Registry of
condominium unit including the lawbooks, office furniture and
Deeds of Makati with respect to the civil status of Juan Luces
equipment found therein were taken over by Gregorio Z. Luna,
Luna should be changed from “JUAN LUCES LUNA married to
ATTY. LUNA’s son of the first marriage. Gregorio Z. Luna then
Soledad L. Luna” to “JUAN LUCES LUNA married to Eugenia
leased out the 25/100 portion of the condominium unit
Zaballero Luna”;
belonging to his father to Atty. Renato G. De la Cruz who
established his own law firm named Renato G. De la Cruz
& Associates. (c) Plaintiff is declared to be the owner of the books
Corpus Juris, Fletcher on Corporation, American Jurisprudence
and Federal Supreme Court Reports found in the condominium
The 25/100 pro-indiviso share of ATTY. Luna in the
unit and defendants are ordered to deliver them to the plaintiff
condominium unit as well as the law books, office furniture and
as soon as appropriate arrangements have been made for
equipment became the subject of the complaint filed by
transport and storage. 
SOLEDAD against the heirs of ATTY. JUAN with the RTC of
Makati City, Branch 138, on September 10, 1999, docketed as  
Civil Case No. 99-1644. The complaint alleged that the subject
properties were acquired during the existence of the No pronouncement as to costs.
marriage between ATTY. LUNA and SOLEDAD through their
joint efforts that since they had no children, SOLEDAD became
co-owner of the said properties upon the death of ATTY. LUNA SO ORDERED.5

Page 102 of 304

  THE CAUSE OF ACTION OF THE INTERVENOR-APPELLANT
HAS BEEN BARRED BY PESCRIPTION AND LACHES; and
Decision of the CA

IX. THE LOWER COURT ERRED IN

Both parties appealed to the CA.6 NOT EXPUNGING/DISMISSING THE INTERVENTION
FOR FAILURE OF INTERVENOR-APPELLANT TO PAY
FILING FEE.7
On her part, the petitioner assigned the following errors to the
RTC, namely:  

  In contrast, the respondents attributed the following errors to

the trial court, to wit:
I. THE LOWER COURT ERRED IN RULING THAT
THE CONDOMINIUM UNIT WAS ACQUIRED THRU THE  
SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA;
I. THE LOWER COURT ERRED IN HOLDING THAT
CERTAIN FOREIGN LAW BOOKS IN THE LAW OFFICE OF
II. THE LOWER COURT ERRED IN RULING THAT ATTY. LUNA WERE BOUGHT WITH THE USE OF PLAINTIFF’S
PLAINTIFFAPPELLANT DID NOT CONTRIBUTE MONEY FOR MONEY;
THE ACQUISITION OF THE CONDOMINIUM UNIT;

II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF

III. THE LOWER COURT ERRED IN GIVING CREDENCE PROVED BY PREPONDERANCE OF EVIDENCE (HER
TO PORTIONS OF THE TESTIMONY OF GREGORIO LUNA, CLAIM OVER) THE SPECIFIED FOREIGN LAW BOOKS FOUND
WHO HAS NO ACTUAL KNOWLEDGE OF THE ACQUISITION IN ATTY. LUNA’S LAW OFFICE; and
OF THE UNIT, BUT IGNORED OTHER PORTIONS OF
HIS TESTIMONY FAVORABLE TO THE PLAINTIFF-APPELLANT;
III. THE LOWER COURT ERRED IN NOT HOLDING
THAT, ASSUMING PLAINTIFF PAID FOR THE SAID FOREIGN
IV. THE LOWER COURT ERRED IN NOT GIVING LAW BOOKS, THE RIGHT TO RECOVER THEM HAD
SIGNIFICANCE TO THE FACT THAT THE CONJUGAL PRESCRIBED AND BARRED BY LACHES AND ESTOPPEL.8
PARTNERSHIP BETWEEN LUNA AND INTERVENOR-APPELLANT
WAS ALREADY DISSOLVED AND LIQUIDATED PRIOR TO  
THE UNION OF PLAINTIFF-APPELLANT AND LUNA;
On November 11, 2005, the CA promulgated its assailed
modified decision,9 holding and ruling:
V. THE LOWER COURT ERRED IN GIVING
UNDUE SIGNIFICANCE TO THE ABSENCE OF THE  
DISPOSITION OF THE CONDOMINIUM UNIT IN THE
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA
HOLOGRAPHIC WILL OF THE PLAINTIFF-APPELLANT;
until the latter’s death on July 12, 1997. The absolute
divorce decree obtained by ATTY. LUNA in the Dominican
VI. THE LOWER COURT ERRED IN GIVING Republic did not terminate his prior marriage with EUGENIA
UNDUE SIGNIFICANCE TO THE FACT THAT THE NAME because foreign divorce between Filipino citizens is not
OF PLAINTIFF-APPELLANT DID NOT APPEAR IN THE DEED recognized in our jurisdiction. x x x10
OF ABSOLUTE SALE EXECUTED BY TANDANG
SORA DEVELOPMENT CORPORATION OVER THE
xxxx
CONDOMINIUM UNIT;

WHEREFORE, premises considered, the assailed August

VII. THE LOWER COURT ERRED IN RULING THAT
27, 2001 Decision of the RTC of Makati City, Branch 138, is
NEITHER ARTICLE 148 OF THE FAMILY CODE NOR ARTICLE
hereby MODIFIED as follows:
144 OF THE CIVIL CODE OF THE PHILIPPINES ARE
APPLICABLE;
 

VIII. THE LOWER COURT ERRED IN NOT RULING THAT

Page 103 of 304

(a) The 25/100 pro-indiviso share in the condominium unit at
the SIXTH FLOOR of the KALAW LEDESMA CONDOMINIUM
PROJECT covered by Condominium Certificate of Title No.
21761 consisting of FIVE HUNDRED SEVENTEEN (517/100)
(sic) SQUARE METERS is hereby adjudged to defendants-
appellants, the heirs of Juan Luces Luna and Eugenia
Zaballero-Luna (first marriage), having been acquired from the
sole funds and sole industry of Juan Luces Luna while marriage
of Juan Luces Luna and Eugenia Zaballero-Luna (first
marriage) was still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as owner or
under any other concept over the condominium unit, hence the
entry in Condominium Certificate of Title No. 21761 of the
Registry of Deeds of Makati with respect to the civil status of
Juan Luces Luna should be changed from “JUAN LUCES LUNA
married to Soledad L. Luna” to “JUAN LUCES LUNA married to
Eugenia Zaballero Luna”;
(c) Defendants-appellants, the heirs of Juan Luces Luna and
Eugenia Zaballero-Luna (first marriage) are hereby declared to
be the owner of the books Corpus Juris, Fletcher
on Corporation, American Jurisprudence and Federal
Supreme Court Reports found in the condominium unit. No
pronouncement as to costs.  Ruling of the Court
SO ORDERED.11
12
On March 13, 2006,  the CA denied the petitioner’s motion
for reconsideration.13
Issues
In this appeal, the petitioner avers in her petition for review
on certiorari that:
 
A. The Honorable Court of Appeals erred in ruling that the
Agreement for Separation and Property Settlement executed
by Luna and Respondent Eugenia was unenforceable; hence,
their conjugal partnership was not dissolved and liquidated;
B. The Honorable Court of Appeals erred in not recognizing
the Dominican Republic court’s approval of the Agreement;
C. The Honorable Court of Appeals erred in ruling that
Petitioner failed to adduce sufficient proof of actual
contribution to the acquisition of purchase of the subject
condominium unit; and
D. The Honorable Court of Appeals erred in ruling that
Petitioner was not entitled to the subject law books.14
The decisive question to be resolved is who among the
contending parties should be entitled to the 25/100 pro
indiviso share in the condominium unit; and to the law books
(i.e., Corpus Juris, Fletcher on Corporation, American
Jurisprudence and Federal Supreme Court Reports).
The resolution of the decisive question requires the Court to
ascertain the law that should determine, firstly, whether the
divorce between Atty. Luna and Eugenia Zaballero-Luna
(Eugenia) had validly dissolved the first marriage; and,
secondly, whether the second marriage entered into by
the late Atty. Luna and the petitioner entitled the latter to any
rights in property.
We affirm the modified decision of the CA.
1.
Atty. Luna’s first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both
Filipinos, was solemnized in the Philippines on September 10,
1947. The law in force at the time of the solemnization was the
Spanish Civil Code, which adopted the nationality rule. The
Civil Code continued to follow the nationality rule, to the effect
that Philippine laws relating to family rights and duties, or to
the status, condition and legal capacity of persons were
binding upon citizens of the Philippines, although living
abroad.15 Pursuant to the nationality rule, Philippine laws
governed this case by virtue of both Atty. Luna and
Eugenio having remained Filipinos until the death of Atty. Luna
on July 12, 1997 terminated their marriage.
From the time of the celebration of the first marriage on
September 10, 1947 until the present, absolute divorce
between Filipino spouses has not been recognized in the
Philippines. The non-recognition of absolute divorce between
Filipinos has remained even under the Family Code, 16 even if
Page 104 of 304
either or both of the spouses are residing abroad.17 Indeed,
the only two types of defective marital unions under our laws
have been the void and the voidable marriages. As such, the
remedies against such defective marriages have been limited
to the declaration of nullity of the marriage and the annulment
of the marriage.
It is true that on January 12, 1976, the Court of First Instance
(CFI) of Sto. Domingo in the Dominican Republic issued the
Divorce Decree dissolving the first marriage of Atty. Luna and
Eugenia.18 Conformably with the nationality rule, however, the
divorce, even if voluntarily obtained abroad, did not dissolve
the marriage between Atty. Luna and Eugenia, which subsisted
up to the time of his death on July 12, 1997. This
finding conforms to the Constitution, which characterizes
marriage as an inviolable social institution,19 and regards it as
a special contract of permanent union between a man and a
woman for the establishment of a conjugal and
family life.20 The non-recognition of absolute divorce in the
Philippines is a manifestation of the respect for the sanctity of
the marital union especially among Filipino citizens. It affirms
that the extinguishment of a valid marriage must be grounded
only upon the death of either spouse, or upon a ground
expressly provided by law. For as long as this public policy
on marriage between Filipinos exists, no divorce decree
dissolving the marriage between them can ever be given legal
or judicial recognition and enforcement in this jurisdiction.
 
Article 119. The future spouses may in the marriage
settlements agree upon absolute or relative community of
property, or upon complete separation of property, or upon
any other regime. In the absence of marriage settlements, or
when the same are void, the system of relative community or
conjugal partnership of gains as established in  this Code, shall
govern the property relations between husband and wife.
 
Article 142 of the Civil Code has defined a conjugal partnership
of gains thusly:
Article 142. By means of the conjugal partnership of gains
the husband and wife place in a common fund the fruits of
their separate property and the income from their work or
industry, and divide equally, upon the dissolution of the
marriage or of the partnership, the net gains or benefits
obtained indiscriminately by either spouse during the
marriage. 
 
The conjugal partnership of gains subsists until terminated for
any of various causes of termination enumerated in Article 175
of the Civil Code, viz:

2.  
The Agreement for Separation and Property Settlement
Article 175. The conjugal partnership of gains terminates:
was void for lack of court approval

(1) Upon the death of either spouse;

The petitioner insists that the Agreement for Separation and
(2) When there is a decree of legal separation;
Property Settlement (Agreement) that the late Atty. Luna and
(3) When the marriage is annulled;
Eugenia had entered into and executed in connection with the
(4) In case of judicial separation of property under Article 191.
divorce proceedings before the CFI of Sto. Domingo in the
Dominican Republic to dissolve and liquidate their conjugal
 
partnership was enforceable against Eugenia. Hence, the
CA committed reversible error in decreeing otherwise. The mere execution of the Agreement by Atty. Luna and
Eugenia did not per se dissolve and liquidate their conjugal
partnership of gains. The approval of the Agreement by a
The insistence of the petitioner was unwarranted.
competent court was still required under Article 190 and Article
191 of the Civil Code, as follows:
 
 
Considering that Atty. Luna and Eugenia had not entered into
any marriage settlement prior to their marriage on September
Article 190. In the absence of an express declaration in
10, 1947, the system of relative community or conjugal
the marriage settlements, the separation of property between
partnership of gains governed their property relations. This is
spouses during the marriage shall not take place save in virtue
because the Spanish Civil Code, the law then in force at the
of a judicial order. (1432a)
time of their marriage, did not specify the property regime
of the spouses in the event that they had not entered into any  
marriage settlement before or at the time of the marriage.
Article 119 of the Civil Code clearly so provides, to wit:
Page 105 of 304
Article 191. The husband or the wife may ask for the
separation of property, and it shall be decreed when the
spouse of the petitioner has been sentenced to a penalty which
carries with it civil interdiction, or has been declared absent, or
when legal separation has been granted.
xxxx
The husband and the wife may agree upon the dissolution of
the conjugal partnership during the marriage, subject to
judicial approval.  All the creditors of the husband and of the
wife, as well as of the conjugal partnership shall be notified of
any petition for judicial approval or the  voluntary dissolution of
the conjugal partnership, so that any such creditors may
appear at the hearing to safeguard his interests.
Upon approval of the petition for dissolution of the conjugal
partnership, the court shall take such measures as may protect
the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions
of articles 214 and 215 shall apply. The provisions of this Code
concerning the effect of partition stated in articles 498 to 501
shall be applicable. (1433a)
But was not the approval of the Agreement by the CFI of Sto.
Domingo in the Dominican Republic sufficient in dissolving and
liquidating the conjugal partnership of gains between the late
Atty. Luna and Eugenia?
The query is answered in the negative. There is no question
that the approval took place only as an incident of the action
for divorce instituted by Atty. Luna and Eugenia, for, indeed,
the justifications for their execution of the Agreement were
identical to the grounds raised in the action for divorce.21 With
the divorce not being itself valid and enforceable
under Philippine law for being contrary to Philippine public
policy and public law, the approval of the Agreement was not
also legally valid and enforceable under Philippine law.
Consequently, the conjugal partnership of gains of Atty. Luna
and Eugenia subsisted in the lifetime of their marriage.
3.
Atty. Luna’s marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the second
marriage between Atty. Luna and Soledad?
The CA expressly declared that Atty. Luna’s subsequent
marriage to Soledad on January 12, 1976 was void for being
bigamous,22 on the ground that the marriage between Atty.
Luna and Eugenia had not been dissolved by the Divorce
Decree rendered by the CFI of Sto. Domingo in the
Dominican Republic but had subsisted until the death of Atty.
Luna on July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous,
or incestuous are void. Article 71 of the Civil Code clearly
states:
 
Article 71. All marriages performed outside the Philippines
in accordance with the laws in force in the country where they
were performed, and valid there as such, shall also be valid in
this country, except bigamous, polygamous, or incestuous
marriages as determined by Philippine law.
Bigamy is an illegal marriage committed by contracting a
second or subsequent marriage before the first marriage has
been legally dissolved, or  before the absent spouse has been
declared presumptively dead by means of a judgment
rendered in the proper proceedings.23 A bigamous marriage
is considered void ab initio.24
Due to the second marriage between Atty. Luna and the
petitioner being void ab initio by virtue of its being bigamous,
the properties acquired during the bigamous marriage were
governed by the rules on co-ownership, conformably with
Article 144 of the Civil Code, viz:
Article 144. When a man and a woman live together as
husband and wife, but they are not married, or their marriage
is void from the beginning, the property acquired by either or
both of them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried the
burden of proof to confirm such fact. To establish co-
ownership, therefore, it became imperative for the petitioner to
offer proof of her actual contributions in the acquisition of
property. Her mere allegation of co-ownership,
without sufficient and competent evidence, would warrant no
Page 106 of 304
relief in her favor. As the Court explained in Saguid v. Court of
Appeals:25
In the cases of Agapay v. Palang, and Tumlos v. Fernandez,
which involved the issue of co-ownership of properties
acquired by the parties to a bigamous marriage and an
adulterous relationship, respectively, we ruled that proof of
actual contribution in the acquisition of the property
is essential. The claim of co-ownership of the petitioners
therein who were parties to the bigamous and adulterous
union is without basis because they failed to substantiate their
allegation that they contributed money in the purchase of the
disputed properties. Also in Adriano v. Court of Appeals, we
ruled that the fact that the controverted property was titled in
the name of the parties to an adulterous relationship is not
sufficient proof of coownership absent evidence of actual
contribution in the acquisition of the property.
As in other civil cases, the burden of proof rests upon the
party who, as determined by the pleadings or the nature of the
case, asserts an affirmative issue. Contentions must be proved
by competent evidence and reliance must be had on the
strength of the party’s own evidence and not upon the
weakness of the opponent’s defense. This applies with
more vigor where, as in the instant case, the plaintiff was
allowed to present evidence ex parte. The plaintiff is not
automatically entitled to the relief prayed for. The law gives
the defendant some measure of protection as the plaintiff must
still prove the allegations in the complaint. Favorable relief can
be granted only after the court is convinced that the facts
proven by the plaintiff warrant such relief. Indeed, the party
alleging a fact has the burden of proving it and a mere
allegation is not evidence.26
 
The petitioner asserts herein that she sufficiently proved her
actual contributions in the purchase of the condominium unit in
the aggregate amount of at least P306,572.00, consisting in
direct contributions of P159,072.00, and in repaying the loans
Atty. Luna had obtained from Premex Financing and Banco
Filipino totaling P146,825.30;27 and that such aggregate
contributions of P306,572.00 corresponded to almost the
entire share of Atty. Luna in the purchase of the condominium
unit amounting to P362,264.00 of the unit’s purchase price of
P1,449,056.00.28
The petitioner further asserts that the lawbooks were paid for
solely out of her personal funds, proof of which Atty. Luna had
even sent her a “thank you” note;29 that she had the financial
capacity to make the contributions and purchases; and that
Atty. Luna could not acquire the properties on his own due to
the meagerness of the income derived from his law practice.
Did the petitioner discharge her burden of proof on the co-
ownership?
In resolving the question, the CA entirely debunked the
petitioner’s assertions on her actual contributions through the
following findings and conclusions, namely:
 
SOLEDAD was not able to prove by preponderance of
evidence that her own independent funds were used to buy
the law office condominium and the law books subject matter
in contention in this case – proof that was required for Article
144 of the New Civil Code and Article 148 of the Family Code
to apply – as to cases where properties were acquired by a
man and a woman living together as husband and wife but not
married, or under a marriage which was void ab initio. Under
Article 144 of the New Civil Code, the rules on co-ownership
would govern. But this was not readily applicable to many
situations and thus it created a void at first because it applied
only if the parties were not in any way incapacitated or were
without impediment to marry each other (for it would be
absurd to create a co-ownership where there still exists a
prior conjugal partnership or absolute community between the
man and his lawful wife). This void was filled upon adoption of
the Family Code. Article 148 provided that: only the property
acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned in
common and in proportion to their respective
contributions. Such contributions and corresponding shares
were prima facie presumed to be equal. However, for this
presumption to arise, proof of actual contribution was required.
The same rule and presumption was to apply to joint deposits
of money and evidence of credit. If one of the parties
was validly married to another, his or her share in the co-
ownership accrued to the absolute community or conjugal
partnership existing in such valid marriage. If the party who
acted in bad faith was not validly married to another, his or her
share shall be forfeited in the manner provided in the last
paragraph of the Article 147. The rules on forfeiture applied
even if both parties were in bad faith.
Co-ownership was the exception while conjugal partnership
of gains was the strict rule whereby marriage was an inviolable
social institution and divorce decrees are not recognized in the
Philippines, as was held by the Supreme Court in the case of
Tenchavez vs. Escaño, G.R. No. L-19671, November 29, 1965,
15 SCRA 355, thus:
xxxx
 
Page 107 of 304
As to the 25/100 pro-indiviso share of ATTY. LUNA in
the condominium unit, SOLEDAD failed to prove that she made
an actual contribution to purchase the said property. She failed
to establish that the four (4) checks that she presented were
indeed used for the acquisition of the share of ATTY. LUNA in
the condominium unit. This was aptly explained in the Decision
of the trial court, viz.:
 
“x x x The first check, Exhibit “M” for P55,000.00 payable to
Atty. Teresita Cruz Sison was issued on January 27, 1977,
which was thirteen (13) months before the Memorandum of
Agreement, Exhibit “7” was signed. Another check issued on
April 29, 1978 in the amount of P97,588.89, Exhibit “P” was
payable to Banco Filipino. According to the plaintiff, this was in
payment of the loan of Atty. Luna. The third check which was
for P49,236.00 payable to PREMEX was dated May 19, 1979,
also for payment of the loan of Atty. Luna. The fourth
check, Exhibit “M”, for P4,072.00 was dated December 17,
1980. None of the foregoing prove that the amounts delivered
by plaintiff to the payees were for the acquisition of
the subject condominium unit. The connection was simply
not established. x x x”
 
SOLEDAD’s claim that she made a cash contribution
of P100,000.00 is unsubstantiated. Clearly, there is no basis for
SOLEDAD’s claim of co-ownership over the 25/100 portion of
the condominium unit and the trial court correctly found that
the same was acquired through the sole industry of ATTY.
LUNA, thus:
 
“The Deed of Absolute Sale, Exhibit “9”, covering the
condominium unit was in the name of Atty. Luna, together
with his partners in the law firm. The name of the plaintiff does
not appear as vendee or as the spouse of Atty. Luna. The
same was acquired for the use of the Law firm of Atty. Luna.
The loans from Allied Banking Corporation and Far East Bank
and Trust Company were loans of Atty. Luna and his partners
and plaintiff does not have evidence to show that she paid for
them fully or partially. x x x”
 
The fact that CCT No. 4779 and subsequently, CCT No.
21761 were in the name of “JUAN LUCES LUNA, married to
Soledad L. Luna” was no proof that SOLEDAD was a co-owner
of the condominium unit. Acquisition of title and registration
thereof are two different acts. It is well settled that registration
does not confer title but merely confirms one already existing.
The phrase “married to” preceding “Soledad L. Luna” is merely
descriptive of the civil status of ATTY. LUNA.
SOLEDAD, the second wife, was not even a lawyer. So it is
but logical that SOLEDAD had no participation in the law firm
or in the purchase of books for the law firm. SOLEDAD failed to
prove that she had anything to contribute and that she actually
purchased or paid for the law office amortization and for the
law books. It is more logical to presume that it was ATTY.
LUNA who bought the law office space and the law books from
his earnings from his practice of law rather
than embarrassingly beg or ask from SOLEDAD money for use
of the law firm that he headed.30
 
The Court upholds the foregoing findings and conclusions by
the CA both because they were substantiated by the records
and because we have not been shown any reason to revisit
and undo them. Indeed, the petitioner, as the party claiming
the co-ownership, did not discharge her burden of proof. Her
mere allegations on her contributions, not being evidence,31
did not serve the purpose. In contrast, given the subsistence of
the first marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of his
own personal funds and effort remained. It should then be
justly concluded that the properties in litis legally pertained to
their conjugal partnership of gains as of the time of his death.
Consequently, the sole ownership of the 25/100 pro indiviso
share of Atty. Luna in the condominium unit, and of the
lawbooks pertained to the respondents as the lawful heirs of
Atty. Luna.
 
WHEREFORE, the Court AFFIRMS the decision promulgated
on November 11, 2005; and ORDERS the petitioner to pay the
costs of suit.
 
SO ORDERED.
Noveras vs Noveras
 PEREZ, J.:
Before the Court is a petition for review assailing the 9 May
2008 Decision1 of the Court of Appeals in CA-G.R. CV No.
88686, which affirmed in part the 8 December 2006
Decision2 of the Regional Trial Court (RTC) of Baler, Aurora,
Branch 96.
 
The factual antecedents are as follow:
Page 108 of 304
 David A. Noveras (David) and Leticia T. Noveras (Leticia) were the couple paid a total of P1.5 Million for the redemption of the
married on 3 December 1988 in Quezon City, Philippines. They same.
resided in California, United States of America (USA) where
they eventually acquired American citizenship. They then begot  
two children, namely: Jerome T. Noveras, who was born on 4
Due to business reverses, David left the USA and returned to
November 1990 and Jena T. Noveras, born on 2 May 1993.
the Philippines in 2001. In December 2002, Leticia executed a
David was engaged in courier service business while Leticia
Special Power of Attorney (SPA) authorizing David to sell the
worked as a nurse in San Francisco, California.
Sampaloc property for P2.2 Million. According to Leticia,
  sometime in September 2003, David abandoned his family and
lived with Estrellita Martinez in Aurora province. Leticia claimed
During the marriage, they acquired the following properties in that David agreed to and executed a Joint Affidavit with Leticia
the Philippines and in the USA: in the presence of David’s father, Atty. Isaias Noveras, on 3
December 2003 stating that: 1) the P1.1Million proceeds from
  the sale of the Sampaloc property shall be paid to and
collected by Leticia; 2) that David shall return and pay to
Leticia P750,000.00, which is equivalent to half of the amount
of the redemption price of the Sampaloc property; and 3) that
 FAIR MARKET VALUE
David shall renounce and forfeit all his rights and interest in
sq. m. located at 1085 Norma Street, Sampaloc, Manila (Sampaloc the conjugal and real properties situated in the
 P1,693,125.00
Philippines.5 David was able to collect P1,790,000.00 from the
sale of the Sampaloc property, leaving an unpaid balance of
742 sq. m. located at Laboy, Dipaculao, Aurora P410,000.00.
 P400,000.00

hectares located at Maria Aurora, Aurora  

 P490,000.00

sq.m. located at Sabang Baler, Aurora Upon learning that David had an extra-marital affair, Leticia
 P175,000.00
filed a petition for divorce with the Superior Court of California,
aquin Maria Aurora, Aurora  P750,000.00
County of San Mateo, USA. The California court granted the
divorce on 24 June 2005 and judgment was duly entered on 29
   June 2005.6 The California court granted to Leticia the custody
of her two children, as well as all the couple’s properties in the
USA.7
FAIR MARKET VALUE
 
$550,000.00 (unpaid debt of
eet, Daly City, California   On 8 August 2005, Leticia filed a petition for Judicial
$285,000.00)
Separation of Conjugal Property before the RTC of Baler,
 $3,000Aurora. She relied on the 3 December 2003 Joint Affidavit and
David’s failure to comply with his obligation under the same.
 $9,000She prayed for: 1) the power to administer all conjugal
properties in the Philippines; 2) David and his partner to cease
ck  $13,770.00
and desist from selling the subject conjugal properties; 3) the
declaration that all conjugal properties be forfeited in favour of
 $8,000her children; 4) David to remit half of the purchase price as
share of Leticia from the sale of the Sampaloc property; and 5)
 $10,000.00
the payment of P50,000.00 and P100,000.00 litigation
expenses.8
 $100,000.00

annuities  
 $56,228.00

  In his Answer, David stated that a judgment for the dissolution

of their marriage was entered on 29 June 2005 by the Superior
The Sampaloc property used to be owned by David’s parents. Court of California, County of San Mateo. He demanded that
The parties herein secured a loan from a bank and mortgaged the conjugal partnership properties, which also include the USA
the property. When said property was about to be foreclosed, properties, be liquidated and that all expenses of liquidation,

Page 109 of 304

including attorney’s fees of both parties be charged against the
conjugal partnership.9
 
The RTC of Baler, Aurora simplified the issues as follow:
1.    Whether or not respondent David A. Noveras committed
acts of abandonment and marital infidelity which can result
into the forfeiture of the parties’ properties in favour of the
petitioner and their two (2) children.
2.    Whether or not the Court has jurisdiction over the
properties in California, U.S.A. and the same can be included in
the judicial separation prayed for.
3.    Whether or not the “Joint Affidavit” x x x executed by
petitioner Leticia T. Noveras and respondent David A. Noveras
will amount to a waiver or forfeiture of the latter’s property
rights over their conjugal properties.
4.    Whether or not Leticia T. Noveras is entitled to
reimbursement of one-half of the P2.2 [M]illion sales proceeds
of their property in Sampaloc, Manila and one-half of the P1.5
[M]illion used to redeem the property of Atty. Isaias Noveras,
including interests and charges.
5.    How the absolute community properties should be
distributed.
6.    Whether or not the attorney’s fees and litigation expenses
of the parties were chargeable against their conjugal
properties.
 
Corollary to the above is the issue of:
Whether or not the two common children of the parties are
entitled to support and presumptive legitimes. 10
 
On 8 December 2006, the RTC rendered judgment as follows:
1.    The absolute community of property of the parties is
hereby declared DISSOLVED;
2.    The net assets of the absolute community of property of
the parties in the Philippines are hereby ordered to be awarded
to respondent David A. Noveras only, with the properties in the
United States of America remaining in the sole ownership of
petitioner Leticia Noveras a.k.a. Leticia Tacbiana pursuant to
the divorce decree issued by the Superior Court of California,
County of San Mateo, United States of America, dissolving the
marriage of the parties as of June 24, 2005. The titles
presently covering said properties shall be cancelled and new
titles be issued in the name of the party to whom said
properties are awarded;
3.    One-half of the properties awarded to respondent David
A. Noveras in the preceding paragraph are hereby given to
Jerome and Jena, his two minor children with petitioner Leticia
Noveras a.k.a. Leticia Tacbiana as their presumptive legitimes
and said legitimes must be annotated on the titles covering the
said properties. Their share in the income from these
properties shall be remitted to them annually by the
respondent within the first half of January of each year,
starting January 2008;
4.    One-half of the properties in the United States of America
awarded to petitioner Leticia Noveras a.k.a. Leticia Tacbiana in
paragraph 2 are hereby given to Jerome and Jena, her two
minor children with respondent David A. Noveras as their
presumptive legitimes and said legitimes must be annotated on
the titles/documents covering the said properties. Their share
in the income from these properties, if any, shall be remitted
to them annually by the petitioner within the first half of
January of each year, starting January 2008;
5.    For the support of their two (2) minor children, Jerome
and Jena, respondent David A. Noveras shall give them
US$100.00 as monthly allowance in addition to their income
from their presumptive legitimes, while petitioner Leticia
Tacbiana shall take care of their food, clothing, education and
other needs while they are in her custody in the USA. The
monthly allowance due from the respondent shall be increased
in the future as the needs of the children require and his
financial capacity can afford;
6.    Of the unpaid amount of P410,000.00 on the purchase
price of the Sampaloc property, the Paringit Spouses are
hereby ordered to pay P5,000.00 to respondent David A.
Noveras and P405,000.00 to the two children. The share of the
respondent may be paid to him directly but the share of the
two children shall be deposited with a local bank in Baler,
Aurora, in a joint account to be taken out in their names,
withdrawal from which shall only be made by them or by their
representative duly authorized with a Special Power of
Attorney. Such payment/deposit shall be made within the
period of thirty (30) days after receipt of a copy of this
Page 110 of 304
Decision, with the passbook of the joint account to be
submitted to the custody of the Clerk of Court of this Court
within the same period. Said passbook can be withdrawn from
the Clerk of Court only by the children or their attorney-in-fact;
and
properties between the spouses. Moreover with respect to the
common children’s presumptive legitime, the appellate court
ordered both spouses to each pay their children the amount of
P520,000.00, thus:

WHEREFORE, the instant appeal is PARTLY GRANTED.

7.    The litigation expenses and attorney’s fees incurred by the Numbers 2, 4 and 6 of the assailed Decision dated December
parties shall be shouldered by them individually.11 8, 2006 of Branch 96, RTC of Baler, Aurora Province, in Civil
Case No. 828 are hereby MODIFIED to read as follows:
 
 
The trial court recognized that since the parties are US citizens,
the laws that cover their legal and personal status are those of 2. The net assets of the absolute community of property of the
the USA. With respect to their marriage, the parties are parties in the Philippines are hereby divided equally between
divorced by virtue of the decree of dissolution of their marriage petitioner Leticia Noveras a.k.a. Leticia Tacbiana (sic) and
issued by the Superior Court of California, County of San Mateo respondent David A. Noveras;
on 24 June 2005. Under their law, the parties’ marriage had
already been dissolved. Thus, the trial court considered the
petition filed by Leticia as one for liquidation of the absolute xxx
community of property regime with the determination of the
 
legitimes, support and custody of the children, instead of an
action for judicial separation of conjugal property.
 
 
4. One-half of the properties awarded to petitioner Leticia
Tacbiana (sic) in paragraph 2 shall pertain to her minor
With respect to their property relations, the trial court first
children, Jerome and Jena, as their presumptive legitimes
classified their property regime as absolute community of
which shall be annotated on the titles/documents covering the
property because they did not execute any marriage
said properties. Their share in the income therefrom, if any,
settlement before the solemnization of their marriage pursuant
shall be remitted to them by petitioner annually within the first
to Article 75 of the Family Code. Then, the trial court ruled that
half of January, starting 2008;
in accordance with the doctrine of processual presumption,
Philippine law should apply because the court cannot take
judicial notice of the US law since the parties did not submit
xxx
any proof of their national law. The trial court held that as the
instant petition does not fall under the provisions of the law for  
the grant of judicial separation of properties, the absolute
community properties cannot be forfeited in favour of Leticia 6. Respondent David A. Noveras and petitioner Leticia
and her children. Moreover, the trial court observed that Leticia Tacbiana (sic) are each ordered to pay the amount of
failed to prove abandonment and infidelity with preponderant P520,000.00 to their two children, Jerome and Jena, as their
evidence. presumptive legitimes from the sale of the Sampaloc property
inclusive of the receivables therefrom, which shall be deposited
  to a local bank of Baler, Aurora, under a joint account in the
latter’s names. The payment/deposit shall be made within a
The trial court however ruled that Leticia is not entitled to the
period of thirty (30) days from receipt of a copy of this
reimbursements she is praying for considering that she already
Decision and the corresponding passbook entrusted to the
acquired all of the properties in the USA. Relying still on the
custody of the Clerk of Court a quo within the same period,
principle of equity, the Court also adjudicated the Philippine
withdrawable only by the children or their attorney-in-fact.
properties to David, subject to the payment of the children’s
presumptive legitimes. The trial court held that under Article  
89 of the Family Code, the waiver or renunciation made by
David of his property rights in the Joint Affidavit is void. A number 8 is hereby added, which shall read as follows:

   

On appeal, the Court of Appeals modified the trial court’s 8. Respondent David A. Noveras is hereby ordered to pay
Decision by directing the equal division of the Philippine petitioner Leticia Tacbiana (sic) the amount of P1,040,000.00

Page 111 of 304

representing her share in the proceeds from the sale of the
Sampaloc property.
 
The last paragraph shall read as follows:
 
Send a copy of this Decision to the local civil registry of Baler,
Aurora; the local civil registry of Quezon City; the Civil
Registrar-General, National Statistics Office, Vibal Building,
Times Street corner EDSA, Quezon City; the Office of the
Registry of Deeds for the Province of Aurora; and to the
children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.12
In the present petition, David insists that the Court of Appeals
should have recognized the California Judgment which
awarded the Philippine properties to him because said
judgment was part of the pleading presented and offered in
evidence before the trial court. David argues that allowing
Leticia to share in the Philippine properties is tantamount to
unjust enrichment in favour of Leticia considering that the
latter was already granted all US properties by the California
court.
In summary and review, the basic facts are: David and Leticia
are US citizens who own properties in the USA and in the
Philippines. Leticia obtained a decree of divorce from the
Superior Court of California in June 2005 wherein the court
awarded all the properties in the USA to Leticia. With respect
to their properties in the Philippines, Leticia filed a petition for
judicial separation of conjugal properties.
At the outset, the trial court erred in recognizing the divorce
decree which severed the bond of marriage between the
parties. In Corpuz v. Sto. Tomas,13 we stated that:
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.14
 
The requirements of presenting the foreign divorce decree and
the national law of the foreigner must comply with our Rules of
Evidence. Specifically, for Philippine courts to recognize a
foreign judgment relating to the status of a marriage, a copy of
the foreign judgment may be admitted in evidence and proven
as a fact under Rule 132, Sections 24 and 25, in relation to
Rule 39, Section 48(b) of the Rules of Court.15
Under Section 24 of Rule 132, the record of public documents
of a sovereign authority or tribunal may be proved by: (1) an
official publication thereof or (2) a copy attested by the officer
having the legal custody thereof. Such official publication or
copy must be accompanied, if the record is not kept in the
Philippines, with a certificate that the attesting officer has the
legal custody thereof. The certificate may be issued by any of
the authorized Philippine embassy or consular officials
stationed in the foreign country in which the record is kept,
and authenticated by the seal of his office. The attestation
must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be, and
must be under the official seal of the attesting officer.
Section 25 of the same Rule states that whenever a copy of a
document or record is attested for the purpose of evidence,
the attestation must state, in substance, that the copy is a
correct copy of the original, or a specific part thereof, as the
case may be. The attestation must be under the official seal of
the attesting officer, if there be any, or if he be the clerk of a
court having a seal, under the seal of such court.
Based on the records, only the divorce decree was presented
in evidence. The required certificates to prove its authenticity,
as well as the pertinent California law on divorce were not
presented.
 
It may be noted that in Bayot v. Court of Appeals,16 we relaxed
the requirement on certification where we held that
“[petitioner therein] was clearly an American citizen when she
secured the divorce and that divorce is recognized and allowed
in any of the States of the Union, the presentation of a copy of
foreign divorce decree duly authenticated by the foreign court
issuing said decree is, as here, sufficient.” In this case
Page 112 of 304
however, it appears that there is no seal from the office where
the divorce decree was obtained.
Even if we apply the doctrine of processual presumption17 as
the lower courts did with respect to the property regime of the
parties, the recognition of divorce is entirely a different matter
because, to begin with, divorce is not recognized between
Filipino citizens in the Philippines.
 
Absent a valid recognition of the divorce decree, it follows that
the parties are still legally married in the Philippines. The trial
court thus erred in proceeding directly to liquidation.
 
As a general rule, any modification in the marriage settlements
must be made before the celebration of marriage. An
exception to this rule is allowed provided that the modification
is judicially approved and refers only to the instances provided
in Articles 66, 67, 128, 135 and 136 of the Family Code. 18
Leticia anchored the filing of the instant petition for judicial
separation of property on paragraphs 4 and 6 of Article 135 of
the Family Code, to wit:
Art. 135. Any of the following shall be considered sufficient
cause for judicial separation of property:
(1)    That the spouse of the petitioner has been sentenced to
a penalty which carries with it civil interdiction;
(2)    That the spouse of the petitioner has been judicially
declared an absentee;
(3)    That loss of parental authority of the spouse of petitioner
has been decreed by the court;
(4)    That the spouse of the petitioner has abandoned the
latter or failed to comply with his or her obligations to the
family as provided for in Article 101;
(5)    That the spouse granted the power of administration in
the marriage settlements has abused that power; and
(6)    That at the time of the petition, the spouses have been
separated in fact for at least one year and reconciliation is
highly improbable.
 
In the cases provided for in Numbers (1), (2), and (3), the
presentation of the final judgment against the guilty or absent
spouse shall be enough basis for the grant of the decree of
judicial separation of property. (Emphasis supplied).
 
The trial court had categorically ruled that there was no
abandonment in this case to necessitate judicial separation of
properties under paragraph 4 of Article 135 of the Family
Code. The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code
quoted above, must be for a valid cause and the spouse is
deemed to have abandoned the other when he/she has left the
conjugal dwelling without intention of returning. The intention
of not returning is prima facie presumed if the allegedly [sic]
abandoning spouse failed to give any information as to his or
her whereabouts within the period of three months from such
abandonment.
In the instant case, the petitioner knows that the respondent
has returned to and stayed at his hometown in Maria Aurora,
Philippines, as she even went several times to visit him there
after the alleged abandonment. Also, the respondent has been
going back to the USA to visit her and their children until the
relations between them worsened. The last visit of said
respondent was in October 2004 when he and the petitioner
discussed the filing by the latter of a petition for dissolution of
marriage with the California court. Such turn for the worse of
their relationship and the filing of the said petition can also be
considered as valid causes for the respondent to stay in the
Philippines.19
Separation in fact for one year as a ground to grant a judicial
separation of property was not tackled in the trial court’s
decision because, the trial court erroneously treated the
petition as liquidation of the absolute community of properties.
The records of this case are replete with evidence that Leticia
and David had indeed separated for more than a year and that
reconciliation is highly improbable. First, while actual
abandonment had not been proven, it is undisputed that the
spouses had been living separately since 2003 when David
decided to go back to the Philippines to set up his own
business. Second, Leticia heard from her friends that David has
been cohabiting with Estrellita Martinez, who represented
herself as Estrellita Noveras. Editha Apolonio, who worked in
Page 113 of 304
the hospital where David was once confined, testified that she
saw the name of Estrellita listed as the wife of David in the
Consent for Operation form.20 Third and more significantly,
they had filed for divorce and it was granted by the California
court in June 2005.
 
Having established that Leticia and David had actually
separated for at least one year, the petition for judicial
separation of absolute community of property should be
granted.
The grant of the judicial separation of the absolute community
property automatically dissolves the absolute community
regime, as stated in the 4th paragraph of Article 99 of the
Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the
marriage under Articles 134 to 138. (Emphasis supplied).
 
Under Article 102 of the same Code, liquidation follows the
dissolution of the absolute community regime and the
following procedure should apply:
Art. 102. Upon dissolution of the absolute community regime,
the following procedure shall apply:
(1)    An inventory shall be prepared, listing separately all the
properties of the absolute community and the exclusive
properties of each spouse.
(2)    The debts and obligations of the absolute community
shall be paid out of its assets. In case of insufficiency of said
assets, the spouses shall be solidarily liable for the unpaid
balance with their separate properties in accordance with the
provisions of the second paragraph of Article 94.
(3)    Whatever remains of the exclusive properties of the
spouses shall thereafter be delivered to each of them.
(4)    The net remainder of the properties of the absolute
community shall constitute its net assets, which shall be
divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage
settlements, or unless there has been a voluntary waiver of
such share provided in this Code. For purposes of computing
the net profits subject to forfeiture in accordance with Articles
43, No. (2) and 63, No. (2), the said profits shall be the
increase in value between the market value of the community
property at the time of the celebration of the marriage and the
market value at the time of its dissolution.
(5)    The presumptive legitimes of the common children shall
be delivered upon partition, in accordance with Article 51.
(6)    Unless otherwise agreed upon by the parties, in the
partition of the properties, the conjugal dwelling and the lot on
which it is situated shall be adjudicated to the spouse with
whom the majority of the common children choose to remain.
Children below the age of seven years are deemed to have
chosen the mother, unless the court has decided otherwise. In
case there is no such majority, the court shall decide, taking
into consideration the best interests of said children.
At the risk of being repetitious, we will not remand the case to
the trial court. Instead, we shall adopt the modifications made
by the Court of Appeals on the trial court’s Decision with
respect to liquidation.
 
We agree with the appellate court that the Philippine courts did
not acquire jurisdiction over the California properties of David
and Leticia. Indeed, Article 16 of the Civil Code clearly states
that real property as well as personal property is subject to the
law of the country where it is situated. Thus, liquidation shall
only be limited to the Philippine properties.
 
We affirm the modification made by the Court of Appeals with
respect to the share of the spouses in the absolute community
properties in the Philippines, as well as the payment of their
children’s presumptive legitimes, which the appellate court
explained in this wise:
Leticia and David shall likewise have an equal share in the
Page 114 of 304
proceeds of the Sampaloc property. While both claimed to
have contributed to the redemption of the Noveras property,
absent a clear showing where their contributions came from,
the same is presumed to have come from the community
property. Thus, Leticia is not entitled to reimbursement of half
of the redemption money.
 
David’s allegation that he used part of the proceeds from the
sale of the Sampaloc property for the benefit of the absolute
community cannot be given full credence. Only the amount of
P120,000.00 incurred in going to and from the U.S.A. may be
charged thereto. Election expenses in the amount of
P300,000.00 when he ran as municipal councilor cannot be
allowed in the absence of receipts or at least the Statement of
Contributions and Expenditures required under Section 14 of
Republic Act No. 7166 duly received by the Commission on
Elections. Likewise, expenses incurred to settle the criminal
case of his personal driver is not deductible as the same had
not benefited the family. In sum, Leticia and David shall share
equally in the proceeds of the sale net of the amount of
P120,000.00 or in the respective amounts of P1,040,000.00.
 
xxxx
Under the first paragraph of Article 888 of the Civil Code,
“(t)he legitime of legitimate children and descendants consists
of one-half of the hereditary estate of the father and of the
mother.” The children are therefore entitled to half of the
share of each spouse in the net assets of the absolute
community, which shall be annotated on the titles/documents
covering the same, as well as to their respective shares in the
net proceeds from the sale of the Sampaloc property including
the receivables from Sps. Paringit in the amount of
P410,000.00. Consequently, David and Leticia should each pay
them the amount of P520,000.00 as their presumptive
legitimes therefrom. 21
WHEREFORE, the petition is DENIED. The assailed Decision
of the Court of Appeals in CA G.R. CV No. 88686
is AFFIRMED.
SO ORDERED.
Orion Savings Bank vs Suzuki
ORION SAVINGS BANK, PETITIONER, VS. SHIGEKANE
SUZUKI, RESPONDENT
BRION, J.:
 
Before us is the Petition for Review on Certiorari [1] filed by
petitioner Orion Savings Bank (Orion) under Rule 45 of the
Rules of Court, assailing the decision[2] dated August 23, 2012
and the resolution[3] dated January 25, 2013 of the Court of
Appeals (CA) in CA-G.R. CV No. 94104.
 
The Factual Antecedents
In the first week of August 2003, respondent Shigekane Suzuki
(Suzuki), a Japanese national, met with Ms. Helen Soneja
(Soneja) to inquire about a condominium unit and a parking
slot at Cityland Pioneer, Mandaluyong City, allegedly owned by
Yung Sam Kang (Kang), a Korean national and a Special
Resident Retiree’s Visa (SRRV) holder.
 
At the meeting, Soneja informed Suzuki that Unit No. 536
[covered by Condominium Certificate of Title (CCT) No. 18186]
[4]
 and Parking Slot No. 42 [covered by CCT No. 9118][5] were
for sale for P3,000,000.00.  Soneja likewise assured Suzuki
that the titles to the unit and the parking slot were clean. 
After a brief negotiation, the parties agreed to reduce the price
to P2,800,000.00.
On August 5, 2003, Suzuki issued Kang a Bank of the
Philippine Island (BPI) Check No. 83349[6] for One Hundred
Thousand Pesos (P100,000.00) as reservation fee.[7]  On
August 21, 2003, Suzuki issued Kang another check, BPI Check
No. 83350,[8] this time for P2,700,000.00 representing the
remaining balance of the purchase price.  Suzuki and Kang
then executed a Deed of Absolute Sale dated August 26,
2003[9] covering Unit No. 536 and Parking Slot No. 42.  Soon
after, Suzuki took possession of the condominium unit and
parking lot, and commenced the renovation of the interior of
the condominium unit.
Kang thereafter made several representations with Suzuki to
deliver the titles to the properties, which were then allegedly in
possession of Alexander Perez (Perez, Orion’s Loans Officer)
for safekeeping.  Despite several verbal demands, Kang failed
to deliver the documents.  Suzuki later on learned that Kang
had left the country, prompting Suzuki to verify the status of
the properties with the Mandaluyong City Registry of Deeds.
 
Page 115 of 304
Before long, Suzuki learned that CCT No. 9118 representing
the title to the Parking Slot No. 42 contained no annotations
although it remained under the name of Cityland Pioneer. This
notwithstanding, Cityland Pioneer, through Assistant Vice
President  Rosario D. Perez, certified that Kang had fully paid
the purchase price of Unit. No. 536[10] and Parking Slot No. 42.
[11]
 
1. That as of August 26, 2003,  Kang was the registered owner
of Unit No. 536 and Parking Slot No. 42;
 
2. That the mortgage in favor of Orion supposedly executed
by  Kang, with Entry No. 66432/C-10186 dated February 2,
1999, was subsequently cancelled by Entry No. 73232/T No.
10186 dated June 16, 2000;

CCT No. 18186 representing the title to the condominium unit  

had no existing encumbrance, except for an annotation under
3. That the alleged Dacion en Pago was never annotated in
Entry No. 73321/C-10186 which provided that any conveyance
CCT Nos. 18186 and 9118;
or encumbrance of CCT No. 18186 shall be subject to approval
by the Philippine Retirement Authority (PRA). Although CCT
 
No. 18186 contained Entry No. 66432/C-10186 dated February
2, 1999 representing a mortgage in favor of Orion for a 4. That Orion only paid the appropriate capital gains tax and
P1,000,000.00 loan, that annotation was subsequently the documentary stamp tax for the alleged Dacion en Pago on
cancelled on June 16, 2000 by Entry No. 73232/T. No. 10186. October 15, 2003;
Despite the cancellation of the mortgage to Orion, the
titles to the properties remained in possession of Perez.  

  5. That Parking Slot No. 42, covered by CCT No. 9118, was
never mortgaged to Orion; and
To protect his interests, Suzuki then executed an Affidavit of
Adverse Claim[12] dated September 8, 2003, with the Registry  
of Deeds of Mandaluyong City, annotated as Entry No. 3292/C-
No. 18186 in CCT No. 18186. Suzuki then demanded the 6. That when Suzuki bought the properties, he went to Orion
delivery of the titles.[13] Orion, (through Perez), however, to obtain possession of the titles.
refused to surrender the titles, and cited the need to consult
 
Orion’s legal counsel as its reason.
The RTC Ruling
 
 
On October 14, 2003, Suzuki received a letter from Orion’s
counsel dated October 9, 2003, stating that Kang obtained
In its decision[14] dated June 29, 2009, the Regional Trial Court
another loan in the amount of  P1,800,000.00. When Kang
(RTC), Branch 213, Mandaluyong City ruled in favor of Suzuki
failed to pay, he executed a Dacion en Pago dated February 2,
and ordered Orion to deliver the CCT Nos. 18186 and 9118 to
2003, in favor of Orion covering Unit No. 536.  Orion, however,
Suzuki.
did not register the Dacion en Pago, until October 15, 2003.
 
 
The court found that Suzuki was an innocent purchaser for
On October 28, 2003, Suzuki executed an Affidavit of Adverse
value whose rights over the properties prevailed over Orion’s.
Claim over Parking Slot No. 42 (covered by CCT No. 9118) and
The RTC further noted that Suzuki exerted efforts to verify the
this was annotated as Entry No. 4712/C-No. 9118 in the
status of the properties but he did not find any existing
parking lot’s title.
encumbrance in the titles.  Although Orion claims to have
purchased the property by way of a Dacion en Pago, Suzuki
 
only learned about it two (2) months after he bought the
On January 27, 2004, Suzuki filed a complaint for specific properties because Orion never bothered to register or
performance and damages against Kang and Orion.  At the annotate the Dacion en Pago in CCT Nos. 18186 and 9116.
pre-trial, the parties made the following admissions and
 
stipulations:
The RTC further ordered Orion and Kang to jointly and
 
severally pay Suzuki moral damages, exemplary damages,
attorney’s fees, appearance fees, expenses for litigation and

Page 116 of 304

cost of suit.  Orion timely appealed the RTC decision with the
CA.
 
The CA Ruling
On August 23, 2012, the CA partially granted Orion’s appeal
and sustained the RTC insofar as it upheld Suzuki’s right over
the properties.  The CA further noted that Entry No. 73321/C-
10186 pertaining to the withdrawal of investment of an SRRV
only serves as a warning to an SRRV holder about the
implications of a conveyance of a property investment. It
deviated from the RTC ruling, however, by deleting the award
for moral damages, exemplary damages, attorney’s fees,
expenses for litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the CA
denied the motion in its January 25, 2013 resolution.  Orion
then filed a petition for review on certiorari under Rule 45 with
this Court.
The Petition and Comment
Orion’s petition is based on the following grounds/arguments:
[15]
 
1. The Deed of Sale executed by Kang in favor of Suzuki is null
and void.  Under Korean law, any conveyance of a conjugal
property should be made with the consent of both spouses;
 
2. Suzuki is not a buyer in good faith for he failed to check the
owner’s duplicate copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No. 73321/C-
10186, which prohibits any conveyance or encumbrance of the
property investment, defeats the alleged claim of good faith by
Suzuki; and
 
4. Orion should not be faulted for exercising due diligence.
In his Comment,[16] Suzuki asserts that the issue on spousal
consent was belatedly raised on appeal. Moreover, proof of
acquisition during the marital coverture is a condition sine qua
non for the operation of the presumption of conjugal
ownership.[17] Suzuki additionally maintains that he is a
purchaser in good faith, and is thus entitled to the protection
of the law.
The Court’s Ruling
 
We deny the petition for lack of merit.
 
The Court may inquire into
conclusions of fact when the
inference made is manifestly
mistaken
In a Rule 45 petition, the latitude of judicial review generally
excludes a factual and evidentiary re-evaluation, and the Court
ordinarily abides by the  uniform  factual  conclusions  of the
trial court and the appellate court.[18] In the present case, while
the courts below both arrived at the same conclusion, there
appears to be an incongruence in their factual findings and the
legal principle they applied to the attendant factual
circumstances. Thus, we are compelled to examine certain
factual issues in the exercise of our sound discretion to correct
any mistaken inference that may have been made.[19]
 
Philippine Law governs the
transfer of real property 
Orion believes that the CA erred in not ruling on the issue of
spousal consent. We cannot uphold this position, however,
because the issue of spousal consent was only raised on
appeal to the CA.  It is a well-settled principle that points of
law, theories, issues, and arguments not brought to the
attention of the trial court cannot be raised for the first time on
appeal and considered by a reviewing court.[20]  To consider
these belated arguments would violate basic principles of fair
play, justice, and due process.
Page 117 of 304
Having said these, we shall nonetheless discuss the issues
Orion belatedly raised, if only to put an end to lingering
doubts on the correctness of the denial of the present
petition.
 
It is a universal principle that real or immovable property is
exclusively subject to the laws of the country or state where it
is located.[21]  The reason is found in the very nature of
immovable property — its immobility. Immovables are part of
the country and so closely connected to it that all rights over
them have their natural center of gravity there.[22]
 
Thus, all matters concerning the title and disposition of real
property are determined by what is known as the lex loci rei
sitae, which can alone prescribe the mode by which a title can
pass from one person to another, or by which an interest
therein can be gained or lost.[23] This general principle includes
all rules governing the descent, alienation and transfer of
immovable property and the validity, effect and construction of
wills and other conveyances.[24]
 
This principle even governs the capacity of the person making
a deed relating to immovable property, no matter what its
nature may be. Thus, an instrument will be ineffective to
transfer title to land if the person making it is incapacitated by
the lex loci rei sitae, even though under the law of his domicile
and by the law of the place where the instrument is actually
made, his capacity is undoubted.[25]
 
On the other hand, property relations between spouses are
governed principally by the national law of the spouses.
[26]
 However, the party invoking the application of a foreign law
has the burden of proving the foreign law. The foreign law is a
question of fact to be properly pleaded and proved as the
judge cannot take judicial notice of a foreign law. [27] He is
presumed to know only domestic or the law of the forum. [28]
To prove a foreign law, the party invoking it must present a
copy thereof and comply with Sections 24 and 25 of Rule 132
of the Revised Rules of Court which reads:
 
SEC. 24. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having
the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a
certificate that such officer has the custody. If the office in
which the record is kept is in a foreign country, the certificate
may be made by a secretary of the embassy or legation,
consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept,
and authenticated by the seal of his office. (Emphasis
supplied)
 
SEC. 25. What attestation of copy must state. — Whenever a
copy of a document or record is attested for the purpose of the
evidence, the attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof,
as the case may be. The attestation must be under the official
seal of the attesting officer, if there be any, or if he be the
clerk of a court having a seal, under the seal of such court.
 
Accordingly, matters concerning the title and disposition of
real property shall be governed by Philippine law while issues
pertaining to the conjugal nature of the property shall be
governed by South Korean law, provided it is proven as a fact.
 
In the present case, Orion, unfortunately failed to prove the
South Korean law on the conjugal ownership of property. It
merely attached a “Certification from the Embassy of the
Republic of Korea”[29] to prove the existence of Korean Law.
This certification, does not qualify as sufficient proof of the
conjugal nature of the property for there is no showing that
it was properly authenticated by the seal of his office,
as required under Section 24 of Rule 132. [30]
 
Accordingly, the International Law doctrine of presumed-
identity approach or processual presumption comes into play,
i.e., where a foreign law is not pleaded or, even if pleaded, is
not proven, the presumption is that foreign law is the same as
Philippine Law.[31]
Under Philippine Law, the phrase "Yung Sam Kang ‘married to'
Hyun Sook Jung” is merely descriptive of the civil status of
Kang.[32]  In other words, the import from the certificates of
title is that Kang is the owner of the properties as they are
registered in his name alone, and that he is married to Hyun
Sook Jung.
 
Page 118 of 304
We are not unmindful that in numerous cases we have held the notarized deed of sale and the actual transfer of
that registration of the property in the name of only one possession amounted to delivery that produced the legal effect
spouse does not negate the possibility of it being conjugal or of transferring ownership to Suzuki.[39]
community property.[33] In those cases, however, there was
proof that the properties, though registered in the name of  
only one spouse, were indeed either conjugal or community
On the other hand, although Orion claims priority in right
properties.[34] Accordingly, we see no reason to declare as
under the principle of prius tempore, potior jure (i.e., first in
invalid Kang’s conveyance in favor of Suzuki for the supposed
time, stronger in right), it failed to prove the existence and
lack of spousal consent.
due execution of the Dacion en Pago in its favor.
 
 
The petitioner failed to adduce sufficient
At the outset, Orion offered the Dacion en Pago as Exhibit “5”
evidence to prove the due execution of the with submarkings “5-a” to “5-c” to prove the existence of the
February 6, 2003 transaction in its Formal Offer dated July 20,
Dacion en Pago 2008. Orion likewise offered in evidence the supposed
promissory note dated September 4, 2002 as Exhibit “12” to
  prove the existence of the additional P800,000.00 loan. The
RTC, however, denied the admission of Exhibits “5” and “12,”
Article 1544 of the New Civil Code of the Philippines provides
among others, in its order dated August 19, 2008 “since the
that:
same [were] not identified in court by any witness.” [40]
 
 
ART. 1544. If the same thing should have been sold to
Despite the exclusion of its most critical documentary
different vendees, the ownership shall be transferred to the
evidence, Orion failed to make a tender of excluded evidence,
person who may have first taken possession thereof in good
as provided under Section 40, Rule 132 of the Rules of Court.
faith, if it should be movable property.
For this reason alone, we are prevented from seriously
considering Exhibit “5” and its submarkings and Exhibit “12” in
 
the present petition.
Should it be immovable property, the ownership shall belong to
 
the person acquiring it who in good faith first recorded it in the
Registry of Property.
Moreover, even if we consider Exhibit “5” and its submarkings
and Exhibit “12” in the present petition, the copious
 
inconsistencies and contradictions in the testimonial and
Should there be no inscription, the ownership shall pertain to documentary evidence of Orion, militate against the conclusion
the person who in good faith was first in the possession; and, that the Dacion en Pago was duly executed.
in the absence thereof, to the person who presents the oldest
 
title, provided there is good faith.
First,  there  appears  to  be  no  due  and  demandable
 
obligation when  the Dacion en Pago was executed, contrary to
The application of Article 1544 of the New Civil Code the allegations of Orion. Orion’s witness Perez tried to impress
presupposes the existence of two or more duly executed upon the RTC that Kang was in default in his P1,800,000.00
contracts of sale. In the present case, the Deed of Sale loan. During his direct examination, he stated:
dated August 26, 2003[35]  between Suzuki and Kang was
 
admitted by Orion[36] and was properly identified by Suzuki’s
witness Ms. Mary Jane Samin (Samin).[37]
ATTY. CRUZAT:
 
 
It is not disputed, too, that the Deed of Sale dated August 26,
Q:Okay, so this loan of P1.8 million, what happened to this
2003 was consummated. In a contract of sale, the seller
loan, Mr. Witness?
obligates himself to transfer the ownership of the determinate
thing sold, and to deliver the same to the buyer, who obligates
himself to pay a price certain to the seller. [38]  The execution of
Page 119 of 304
A:Well it became past due, there has been delayed interest  
payment by Mr. Kang and...
xxxx
 
 
Q:So what did you do after there were defaults[?]
Q: So this 1.8 million pesos is already inclusive of all the
A:We have to secure the money or the investment of the bank penalties, interest and surcharge due from Mr. Yung Sam
through loans and we have executed a dacion en pago Kang?
because Mr. Kang said he has no money. So we just
execute[d] the dacion en pago rather than going A: It’s just the principal, sir.
through the Foreclosure proceedings.
 
 
Q: So you did not state the interest [and] penalties?
xxxx
A: In the [dacion en pago], we do not include interest, sir. We
  may actually include that but....

Q:Can you tell the court when was this executed?  

A:February 6, 2003, your Honor.[41] Q: Can you read the Second Whereas Clause, Mr. Witness?

  A: Whereas the first party failed to pay the said loan to

the second party and as of February 10, 2003, the
A reading of the supposed promissory note, however, shows outstanding obligation which is due and demandable
that there was no default to speak of when the supposed principal and interest and other charges included
Dacion en Pago was executed. amounts to P1,800,000.00 pesos, sir.

   

Based on the promissory note, Kang’s loan obligation xxxx

would mature only on August 27, 2003.  Neither can Orion
claim that Kang had been in default in his installment  
payments because the wordings of the promissory note
Q: You are now changing your answer[.] [I]t now includes
provide that “[t]he principal of this loan and its interest
interest and other charges, based on this document?
and other charges shall be paid  by me/us in
accordance hereunder: SINGLE PAYMENT LOANS.[42]”
A: Yes, based on that document, sir.[43]
There was thus no due and demandable loan obligation
when the alleged Dacion en Pago was executed.  

  Third, the Dacion en Pago, mentioned that the P1,800,000.00

loan was secured by a real estate mortgage. However, no
Second, Perez, the supposed person who prepared the Dacion
document was ever presented to prove this real estate
en Pago, appears to only have a vague idea of the transaction
mortgage aside from it being mentioned in the Dacion en Pago
he supposedly prepared. During his cross-examination, he
itself.
testified:
 
 
ATTY. DE CASTRO:
ATTY. DE CASTRO:
 
 
Q: Would you know if there is any other document like a
Q: And were you the one who prepared this [dacion en pago]
supplement to that Credit Line Agreement referring to this 1.8
Mr. witness?
million peso loan by Mr. Yung Sam Kang which says that there
was a subsequent collateralization or security given by Mr.
A: Yes, sir. I personally prepared this.
Yung [Sam] Kang for the loan?

Page 120 of 304

 
xxxx
 
A:  The [dacion en pago], sir.[44]
Fourth, the Dacion en Pago was first mentioned only two
(2) months after Suzuki and Samin demanded the delivery of
the titles sometime in August 2003, and after Suzuki caused
the annotation of his affidavit of adverse claim.  Records
show that it was only on October 9, 2003, when Orion,
through its counsel, Cristobal Balbin Mapile &
Associates first spoke of the Dacion en Pago.[45]  Not
even Perez mentioned any Dacion en Pago on October 1,
2003, when he personally received a letter demanding the
delivery of the titles. Instead, Perez refused to accept the letter
and opted to first consult with his lawyer. [46]
Notably, even the October 9, 2003 letter contained material
inconsistencies in its recital of facts surrounding the execution
of the Dacion en Pago.  In particular, it mentioned that “on
[September 4, 2002], after paying the original loan, [Kang]
applied and was granted a new Credit Line Facility by [Orion] x
x x for ONE MILLION EIGHT HUNDRED THOUSAND PESOS
(P1,800,000.00).” Perez, however, testified that there was “no
cash movement” in the original P1,000,000.00 loan. In his
testimony, he said:
COURT:
xxxx
Q:  Would you remember what was the subject matter of that
real estate mortgage for that first P1,000,000.00 loan?
A:  It’s a condominium Unit in Cityland, sir.
xxxx
Q:  Would you recall if there was any payment by Mr.
Yung Sam Kang of this P1,000,000.00 loan?
A:  None sir.
 
Q:  No payments?
A:  None sir.
 
Q:  And from 1999 to 2002, there was no payment,
either by way of payment to the principal, by way of
payment of interest, there was no payment by Mr. Yung
Sam Kang of this loan?
A:  Literally, there was no actual cash movement, sir.
 
Q:  There was no actual cash?
A:  Yes, sir.
Q:  And yet despite no payment, the bank Orion Savings Bank
still extended an P800,000.00 additional right?
A:  Yes, sir.[47]
Fifth, it is undisputed that notwithstanding the supposed
execution of the Dacion en Pago on February 2, 2003, Kang
remained in possession of the condominium unit.  In fact,
nothing in the records shows that Orion even bothered to take
possession of the property even six (6) months after the
supposed date of execution of the Dacion en Pago.  Kang was
even able to transfer possession of the condominium unit to
Suzuki, who then made immediate improvements thereon. If
Orion really purchased the condominium unit on February 2,
2003 and claimed to be its true owner, why did it not assert its
ownership immediately after the alleged sale took place? Why
did it have to assert its ownership only after Suzuki demanded
the delivery of the titles?  These gaps have remained
unanswered and unfilled.
In Suntay v. CA,[48] we held that the most prominent index of
simulation is the complete absence of an attempt on the part
of the vendee to assert his rights of ownership over the
property in question. After the sale, the vendee should have
entered the land and occupied the premises. The absence of
any attempt on the part of Orion to assert its right of
dominion over the property allegedly sold to it is a
clear badge of fraud. That notwithstanding the
execution of the Dacion en Pago, Kang remained in
possession of the disputed condominium unit – from
the time of the execution of the Dacion en Pago until
the property’s subsequent transfer to Suzuki –
unmistakably strengthens the fictitious nature of the
Dacion en Pago.
Page 121 of 304
 
These circumstances, aside from the glaring inconsistencies in
the documents and testimony of Orion’s witness, indubitably
prove the spurious nature of the Dacion en Pago.
The fact that the Dacion en Pago is a notarized
document does not support the conclusion that the sale
it embodies is a true conveyance
 
Public instruments are evidence of the facts that gave rise to
their execution and are to be considered as containing all the
terms of the agreement.[49]  While a notarized document enjoys
this presumption, “the fact that a deed is notarized is not a
guarantee of the validity of its contents.” [50] The presumption
of regularity of notarized documents is not absolute and may
be rebutted by clear and convincing evidence to the contrary.
[51]
 
In the present case, the presumption cannot apply because the
regularity in the execution of the Dacion en Pago and the loan
documents was challenged in the proceedings below where
their prima facie validity was overthrown by the highly
questionable circumstances surrounding their execution.[52]
 
Effect of the PRA restriction on
the validity of Suzuki’s title to the
property
Orion argues that the PRA restriction in CCT No. 18186 affects
the conveyance to Suzuki. In particular, Orion assails the
status of Suzuki as a purchaser in good faith in view of the
express PRA restriction contained in CCT No. 18186.[53]
We reject this suggested approach outright because, to our
mind, the PRA restriction cannot affect the conveyance in favor
of Suzuki. On this particular point, we concur with the
following findings of the CA:
x x x the annotation merely serves as a warning to the owner
who holds a Special Resident Retiree’s Visa (SRRV) that he
shall lose his visa if he disposes his property which serves as
his investment in order to qualify for such status. Section 14 of
the Implementing Investment Guidelines under Rule VIII-A of
the Rules and Regulations Implementing Executive Order No.
1037, Creating the Philippine Retirement Park System
Providing Funds Therefor and For Other Purpose ( otherwise
known as the Philippine Retirement Authority) states:
Section 14. Should the retiree-investor withdraw his
investment from the Philippines, or transfer the same to
another domestic enterprise, or sell, convey or transfer his
condominium unit or units to another person, natural or
juridical without the prior approval of the Authority, the Special
Resident Retiree’s Visa issued to him, and/or unmarried minor
child or children[,] may be cancelled or revoked by the
Philippine Government, through the appropriate government
department or agency, upon recommendation of the Authority.
[54]
 
Moreover, Orion should not be allowed to successfully assail
the good faith of Suzuki on the basis of the PRA restriction. 
Orion knew of the PRA restriction when it transacted with
Kang. Incidentally, Orion admitted accommodating
Kang’s request to cancel the mortgage annotation
despite the lack of payment to circumvent the PRA
restriction.  Orion, thus, is estopped from impugning the
validity of the conveyance in favor of Suzuki on the basis of the
PRA restriction that Orion itself ignored and “attempted” to
circumvent.
 
With the conclusion that Orion failed to prove the authenticity
of the Dacion en Pago, we see no reason for the application of
the rules on double sale under Article 1544 of the New Civil
Code. Suzuki, moreover, successfully adduced sufficient
evidence to establish the validity of conveyance in his favor.
WHEREFORE, premises considered, we DENY the petition for
lack of merit.  Costs against petitioner Orion Savings Bank.
SO ORDERED.
Simundac Keppel vs Keppel
BERSAMIN, C.J.:
Page 122 of 304
The courts do not take judicial notice of foreign laws. To have
evidentiary weight in a judicial proceeding, the foreign laws
should be alleged and proved like any other material fact.
 
This Case
By this appeal, the petitioner assails the decision promulgated
on September 26, 20111 by the Court of Appeals (CA) that
reversed the judgment rendered on June 21, 20062 by the
Regional Trial Court (RTC) in Muntinlupa City in Civil Case No.
96-048.
Antecedents
As summarized by the CA, the factual antecedents are as
follows:
 
In November 1972, petitioner Angelita Simundac Keppel
(Angelita) left the Philippines to work in Germany as a nurse.
In the hospital where Angelita worked, she met Reynaldo
Macaraig (Reynaldo), also a nurse and fellow Filipino who had
become a naturalized German citizen. They fell in love and got
married in Germany on 12 June 1976. Angelita and Reynaldo's
union produced a son.
After a few years of marriage, Angelita became attracted to
another German nurse and co-employee, Georg Keppel
(Georg). Like Angelita, Georg was married to a Filipina nurse,
with whom he had two children. Eventually, the attraction
between Angelita and Georg developed into an intimate affair.
Not long after that, Reynaldo discovered Angelita's infidelity
and they separated.
In the meantime, in February 1986, Angelita became a
naturalized German citizen. Angelita and her son left Germany
to go home to the Philippines, where they planned to start
over.
 
While in the Philippines, Angelita continued communicating
with Georg through letters and telephone calls. In July 1987,
Georg's wife divorced him, and so Georg felt free to come to
the Philippines to meet Angelita's family in September 1987.
 
In December 1987, Angelita returned to Germany to file
divorce proceedings against Reynaldo, and she obtained the
divorce decree she sought in June 1988. Shortly thereafter,
Angelita and Georg got married in Germany on 30 August
1988. On 21 November 1989, Angelita gave birth in Germany
to a daughter, whom they named Liselotte.
In 1991, Angelita and Georg entered into an agreement for the
complete separation of their properties. At that time, Georg
resigned from his job. To make matters worse, Georg was
diagnosed with early multiple sclerosis and could not work.
Since Angelita's income was barely enough to support them all,
they decided to return and settle permanently in the
Philippines in 1992.
Angelita bought a lot in Muntinlupa on which they had a house
built in 1993. She also put up a commercial building – which
earned rentals – on another lot in Muntinlupa, which she and
her first husband, Reynaldo, previously bought together. The
rest of Angelita's savings from Germany went into putting up a
school with her other family members and relatives.
 
Angelita earned a considerable income from her business
ventures, which she shared with Georg. However, Angelita
stopped giving Georg money in 1994 when she discovered that
Georg was having extramarital affairs.
Claiming that Georg was beating her up, Angelita and her two
children left their home in March 1996. Being the registered
owner of their family home, Angelita sold the same to her
sister. Despite said sale, Georg refused to vacate the house.
On 26 March 1996, Angelita filed the instant petition for
annulment of marriage on the ground of Georg's alleged
psychological incapacity. Georg opposed the petition, insisting
that the court should only issue a decree of legal separation
with the consequent division of their properties and
determination of Liselotte's custody. Angelita countered that
there were no properties to divide between them because all
the real properties that she acquired in the Philippines belong
solely to her as a consequence of the agreement for complete
separation of property that they previously executed in
Germany in 1991.
 
Page 123 of 304
During trial, Angelita presented evidence of Georg's
psychological incapacity through medical reports and the like,
as well as the contract for separation of property. On the other
hand, Georg presented evidence of the properties that they
acquired during their marriage that he thinks should be divided
equally between them.3
 
Judgment of the RTC
On June 21, 2006, the RTC rendered judgment declaring the
marriage of Angelita and Georg null and void, to wit:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered as follows:
[T]he marriage between spouses ANGELITA
SIMUNDAC and GEORG KEPPEL which was
solemnized on August 30, 1988 in Dulsburg,
a)
Germany, is hereby declared as null and void in
view of the psychological incapacity of defendant to
perform the essential marital obligations;
   
[A]ll the real and personal properties including the
businesses subject of the instant suit is (sic) hereby
b)
declared as forming part of the paraphernal
property of petitioner;
[T]he spouses are directed to equally support their
c)
minor child Lisselotte Angela Keppel;
   
[T]he custody of the minor child is hereby declared
as belonging to herein petitioner, the mother,
d) without prejudice to the visitorial rights accorded
by law to defendant, unless the said minor child
chooses her father's custody, herein defendant.
 
SO ORDERED.4
 
The RTC found both of the parties psychologically
incapacitated but considered Georg's incapacity to be more
severe on the basis of the clinical finding that he had
manifested an anti-social or psychopathic type of personality
that translated to the symptomatic tendency to deceive and
injure Angelita. The RTC declared that as to the properties of
the parties to be distributed after the dissolution of the
marriage, the business and personal properties should be
allocated to Angelita pursuant to the "Matrimony Property
Agreement;" and that the lands should exclusively belong to
Angelita inasmuch as Georg, being a German citizen, was
absolutely prohibited from owning lands pursuant to Section 7,
Article XVII of the Constitution.
Decision of the CA
On September 26, 2011, the CA promulgated its decision on
appeal, reversing the RTC's findings, and thereby dismissing
the complaint, disposing thusly:
 
WHEREFORE, the Decision, dated 21 June 2006, of the
Regional Trial Court, Branch 256, Muntinlupa City in Civil Case
No. 96-048 for Annulment of Marriage and Custody of Minor
Child is REVERSED and SET ASIDE, except for the trial
court's declaration that all properties acquired in the
Philippines by Angelita Simundac Keppel belong to her alone.
The complaint is DISMISSED.
 
SO ORDERED.5
The CA observed that Angelita did not prove the allegations in
her complaint because she did not present the original of her
divorce decree from Reynaldo Macaraig, her first spouse; that
she did not also prove the German law that capacitated her to
marry Georg; that in the eyes of the court, therefore, there
could be no annulment of the marriage between Angelita and
Georg to speak of because under Philippine law, Angelita had
remained married to Reynaldo; that Angelita's evidence was
insufficient to prove that either of the parties herein had been
psychologically incapacitated to comply with essential marital
obligations inasmuch as anti-social behavior did not equate to
psychological incapacity; and that the properties of the couple
exclusively belonged to Angelita because Georg could not own
lands in the Philippines.
 
Issues
Page 124 of 304
 
In this appeal, Angelita posits that the CA erred in not
declaring her marriage with Georg null and void inasmuch as
Georg was suffering from psychological incapacity that
rendered him incapable to fulfill his essential marital
obligations as borne out by the medical findings; that being
then a German citizen, she need not prove the dissolution of
her marriage with Reynaldo, or the validity of her marriage
with Georg because Philippine law did not apply in both
instances; and that as alleged in her petition she had recently
re-acquired her Filipino citizenship.6
Georg counters that the evidence presented was not sufficient
basis to conclude that he was psychologically incapacitated to
perform his essential marital obligations; and that the
prohibition against land ownership by aliens did not apply
because the bulk of the properties of the spouses consisted of
personal properties that were not covered by the Constitutional
prohibition.
 
Did the CA err in sustaining the validity of the marriage of the
parties? Are the lower courts correct in awarding all the
properties of the spouses in favor of Angelita?
Ruling of the Court
 
The appeal fails to impress.
I.
Under the Nationality Principle, the petitioner
cannot invoke Article 36 of the Family Code
unless there is a German law that allows her to do so
 
A fundamental and obvious defect of Angelita's petition for
annulment of marriage is that it seeks a relief improper under
Philippine law in light of both Georg and Angelita being
German citizens, not Filipinos, at the time of the filing thereof.
Based on the Nationality Principle, which is followed in this
jurisdiction, and pursuant to which laws relating to family
rights and duties, or to the status, condition and legal capacity
of persons are binding upon citizens of the Philippines, even
though living abroad,7 it was the pertinent German law that
governed. In short, Philippine law finds no application herein
as far as the family rights and obligations of the parties who
are foreign nationals are concerned
 
In Morisono v. Morisono,8 we summarized the treatment of
foreign divorce judgments in this jurisdiction, thus:
The rules on divorce prevailing in this jurisdiction can be
summed up as follows: first, Philippine laws do not provide for
absolute divorce, and hence, the courts cannot grant the
same; second, consistent with Articles 15 and 17 of the Civil
Code, the marital bond between two (2) Filipino citizens cannot
be dissolved even by an absolute divorce obtained
abroad; third, an absolute divorce obtained abroad by a
couple who are both aliens may be recognized in the
Philippines, provided it is consistent with their
respective national laws; and fourth, in mixed marriages
involving a Filipino and a foreigner, the former is allowed to
contract a subsequent marriage in case the absolute divorce is
validly obtained abroad by the alien spouse capacitating him or
her to remarry. [Bold underscoring supplied for emphasis]
 
Accordingly, the petition for annulment initiated by Angelita
fails scrutiny through the lens of the Nationality Principle.
Firstly, what governs the marriage of the parties is German,
not Philippine, law, and this rendered it incumbent upon
Angelita to allege and prove the applicable German law. We
reiterate that our courts do not take judicial notice of foreign
laws; hence, the existence and contents of such laws are
regarded as questions of fact, and, as such, must be alleged
and proved like any other disputed fact.9 Proof of the relevant
German law may consist of any of the following, namely: (1)
official publications of the law; or (2) copy attested to by the
officer having legal custody of the foreign law. If the official
record is not kept in the Philippines, the copy must be (a)
accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in
the foreign country in which the record is kept; and (b)
authenticated by the seal of his office.10 Angelita did not
comply with the requirements for pleading and proof of the
relevant German law.
 
And, secondly, Angelita overlooked that German and Philippine
laws on annulment of marriage might not be the same. In
other words, the remedy of annulment of the marriage due to
psychological incapacity afforded by Article 36 of the Family
Code might not be available for her. In the absence of a
Page 125 of 304
showing of her right to this remedy in accordance with German
law, therefore, the petition should be dismissed.
II.
Assuming the remedy was proper, the petitioner did
not
prove the respondent's psychological incapacity
 
Even if we were now to adhere to the concept of processual
presumption,11 and assume that the German law was similar to
the Philippine law as to allow the action under Article 36 of
the Family Code to be brought by one against the other party
herein, we would still affirm the CA's dismissal of the petition
brought under Article 36 of the Family Code.
In Republic v. Court of Appeals,14 the Court issued the
following guidelines for the interpretation and application of
Article 36 of the Family Code, to wit:
(1) The burden of proof to show the nullity of the marriage
belongs to the plaintiff. Any doubt should be resolved in favor
of the existence and continuation of the marriage and against
its dissolution and nullity. This is rooted in the fact that both
our Constitution and our laws cherish the validity of marriage
and unity of the family. Thus, our Constitution devotes an
entire Article on the Family, recognizing it "as the foundation of
the nation." It decrees marriage as legally "inviolable," thereby
protecting it from dissolution at the whim of the parties. Both
the family and marriage are to be "protected" by the state.
 

  The Family Code echoes this constitutional edict on marriage

and the family and emphasizes their permanence, inviolability
Notable from the RTC's disquisition is the fact that the
and solidarity.
psychiatrists found that both parties had suffered from anti-
social behavior that became the basis for the trial court's  
conclusion that they had been both psychologically
incapacitated to perform the essential marital obligations. (2) The root cause of the psychological incapacity must be (a)
Therein lay the reason why we must affirm the CA. medically or clinically identified, (b) alleged in the complaint,
(c) sufficiently proven by experts and (d) clearly explained in
  the decision. Article 36 of the Family Code requires that the
incapacity must be psychological — not physical, although its
Jurisprudentially speaking, psychological incapacity under
manifestations and/or symptoms may be physical. The
Article 36 of the Family Code contemplates an incapacity or
evidence must convince the court that the parties, or one of
inability to take cognizance of and to assume basic marital
them, was mentally or psychically ill to such an extent that the
obligations, and is not merely the difficulty, refusal, or neglect
person could not have known the obligations he was assuming,
in the performance of marital obligations or ill will. The
or knowing them, could not have given valid assumption
disorder consists of: (a) a true inability to commit oneself to
thereof. Although no example of such incapacity need be given
the essentials of marriage; (b) the inability must refer to the
here so as not to limit the application of the provision under
essential obligations of marriage, that is, the conjugal act, the
the principle of ejusdem generis, nevertheless such root cause
community of life and love, the rendering of mutual help, and
must be identified as a psychological illness and its
the procreation and education of offspring; and (c) the inability
incapacitating nature fully explained. Expert evidence may be
must be tantamount to a psychological abnormality. Proving
given by qualified psychiatrists and clinical psychologists.
that a spouse did not meet his or her responsibility and duty as
a married person is not enough; it is essential that he or she  
must be shown to be incapable of doing so because of some
psychological illness.12 (3) The incapacity must be proven to be existing at "the time
of the celebration" of the marriage. The evidence must show
  that the illness was existing when the parties exchanged their
"I do's." The manifestation of the illness need not be
Psychological incapacity is unlike any other disorder that would
perceivable at such time, but the illness itself must have
invalidate a marriage. It should refer to a mental incapacity
attached at such moment, or prior thereto.
that causes a party to be incognitive of the basic marital
covenants such as those enumerated in Article 68 of  
the Family Code and must be characterized by gravity, juridical
antecedence and incurability.13 (4) Such incapacity must also be shown to be medically or
clinically permanent or incurable. Such incurability may be
  absolute or even relative only in regard to the other spouse,
not necessarily absolutely against everyone of the same sex.

Page 126 of 304

Furthermore, such incapacity must be relevant to the We next deal with the ownership of lands by aliens.
assumption of marriage obligations, not necessarily to those
not related to marriage, like the exercise of a profession or  
employment in a job. Hence, a pediatrician may be effective in
Properties accumulated by a married couple may either be real
diagnosing illnesses of children and prescribing medicine to
or personal. While the RTC awarded herein all personal
cure them but may not be psychologically capacitated to
properties in favor of Angelita pursuant to the "Matrimonial
procreate, bear and raise his/her own children as an essential
Property Agreement" executed in Germany, it ignored that
obligation of marriage.
such agreement was governed by the national law of the
  contracting parties; and that the forms and solemnities of
contracts, wills, and other public instruments should be
(5) Such illness must be grave enough to bring about the governed by the laws of the country in which they are
disability of the party to assume the essential obligations of executed.15
marriage. Thus, "mild characterological peculiarities, mood
changes, occasional emotional outbursts" cannot be accepted  
as root causes. The illness must be shown as downright
Angelita did not allege and prove the German law that allowed
incapacity or inability, not a refusal, neglect or difficulty, much
her to enter into and adopt the regime of complete separation
less ill will. In other words, there is a natal or supervening
of property through the "Matrimonial Property Agreement." In
disabling factor in the person, an adverse integral element in
the absence of such allegation and proof, the German law was
the personality structure that effectively incapacitates the
presumed to be the same as that of the Philippines.
person from really accepting and thereby complying with the
obligations essential to marriage.
 
 
In this connection, we further point out Article 77 of the Family
Code declares that marriage settlements and any modification
(6) The essential marital obligations must be those embraced
thereof shall be made in writing and signed by the
by Articles 68 up to 71 of the Family Code as regards the
parties prior to the celebration of the marriage. Assuming that
husband and wife as well as Articles 220, 221 and 225 of the
the relevant German law was similar to the Philippine law, the
same Code in regard to parents and their children. Such non-
"Matrimonial Property Agreement," being entered into by the
complied marital obligation(s) must also be stated in the
parties in 1991, or a few years after the celebration of their
petition, proven by evidence and included in the text of the
marriage on August 30, 1988, could not be enforced for being
decision.
in contravention of a mandatory law.16
 
 
Here, however, the petitioner presented no evidence to show
Also, with the parties being married on August 30, 1988, the
that the anti-social behavior manifested by both parties had
provisions of the Family Code should govern. Pursuant to
been grave, and had existed at the time of the celebration of
Article 75 of the Family Code, the property relations between
the marriage as to render the parties incapable of performing
the spouses were governed by the absolute community of
all the essential marital obligations provided by law. As the
property. This would then entitle Georg to half of the personal
records bear out, the medical experts merely concluded that
properties of the community property.
the behavior was grave enough as to incapacitate the parties
from the performance of their essential marital relationship
 
because the parties exhibited symptoms of an anti-social
personality disorder. Also, the incapacity was not established As to the real properties of the parties, several factual
to have existed at the time of the celebration of the marriage. considerations were apparently overlooked, or were not
In short, the conclusion about the parties being psychologically established.
incapacitated was not founded on sufficient evidence.
 
 
Section 7, Article XII of the 1987 Constitution states that:
III. "Save in cases of hereditary succession, no private lands shall
Former Filipinos have the limited right to own be transferred or conveyed except to individuals, corporations,
public agricultural lands in the Philippines or associations qualified to acquire or hold lands of the public
domain." It seems clear, however, that the lower courts were
 
too quick to pronounce that Georg, being a German citizen,
was automatically disqualified from owning lands in the

Page 127 of 304

Philippines. Without disputing the inherent validity of the
pronouncement, we nonetheless opine that the lower courts
missed to take note of the fact that Angelita, in view of her
having admitted that she herself had been a German citizen,
suffered the same disqualification as Georg. Consequently, the
lower courts' pronouncement awarding all real properties in
favor of Angelita could be devoid of legal basis as to her.
 
At best, an alien could have enjoyed a limited right to own
lands. Section 8, Article XII of the Constitution provides:
"Notwithstanding the provisions of Section 7 of this Article, a
natural-born citizen of the Philippines who has lost his
Philippine citizenship may be a transferee of private lands,
subject to limitations provided by law." Section 5 of Republic
Act No. 8179 (An Act Amending the Foreign Investments Act
of 1991) also states:
 
Sec. 10. Other Rights of Natural Born Citizen Pursuant
to the Provisions of Article XII, Section 8 of the
Constitution. — Any natural born citizen who has lost his
Philippine citizenship and who has the legal capacity to enter
into a contract under Philippine laws may be a transferee of a
private land up to a maximum area of five thousand (5,000)
square meters in the case of urban land or three (3) hectares
in the case of rural land to be used by him for business or
other purposes. In the case of married couples, one of them
may avail of the privilege herein granted: Provided, That if
both shall avail of the same, the total area acquired shall not
exceed the maximum herein fixed.
 
In case the transferee already owns urban or rural land for
business or other purposes, he shall still be entitled to be a
transferee of additional urban or rural land for business or
other purposes which when added to those already owned by
him shall not exceed the maximum areas herein authorized.
A transferee under this Act may acquire not more than two (2)
lots which should be situated in different municipalities or cities
anywhere in the Philippines: Provided, That the total land area
thereof shall not exceed five thousand (5,000) square meters
in the case of urban land or three (3) hectares in the case of
rural land for use by him for business or other purposes. A
transferee who has already acquired urban land shall be
disqualified from acquiring rural land area and vice versa.
 
As the foregoing indicates, Angelita did not have any unlimited
right to own lands. On the other hand, the records were not
clear on whether or not she had owned real property as
allowed by law. It was imperative for the lower courts to
determine so. Hence, remand for further proceedings is called
for.
 
It is true that Angelita stated in her petition that she had
meanwhile re-acquired Filipino citizenship.17 This statement
remained unsubstantiated, but the impact thereof would be far
reaching if the statement was true, for there would then be no
need to determine whether or not Angelita had complied with
Section 5 of R.A. No. 8179. Thus, the remand of the case will
enable the parties to adduce evidence on this aspect of the
case, particularly to provide factual basis to determine whether
or not Angelita had validly re-acquired her Filipino citizenship;
and, if she had, to ascertain what would be the extent of her
ownership of the real assets pertaining to the marriage. If the
remand should establish that she had remained a foreigner, it
must next be determined whether or not she complied with the
limits defined or set by R.A. No. 8179 regarding her land
ownership. The trial court shall award her the real property
that complied with the limits of the law, and inform the Office
of the Solicitor General for purposes of a proper disposition of
any excess land whose ownership violated the law.
 
WHEREFORE, the Court DENIES the petition for review
on certiorari; AFFIRMS the decision promulgated on
September 26, 2011 by the Court of Appeals in CA-G.R. CV No.
89297 subject to the MODIFICATION that the personal
properties of the parties are to be equally divided between
them; and REMANDS the case to the court of origin for the
determination of the issues deriving from the petitioner's re-
acquisition of her Filipino citizenship as far as the ownership of
the land pertaining to the parties is concerned consistent with
this decision.
 
No pronouncement on costs of suit.
SO ORDERED.
Suzuki vs OSG
https://sc.judiciary.gov.ph/15309/
Cayetano vs Leonidas
POLLY CAYETANO, petitioner, vs. HON. TOMAS T.
LEONIDAS, in his capacity as the Presiding Judge of
Branch XXXVIII, Court of First Instance of Manila and
NENITA CAMPOS PAGUIA, respondents.
Page 128 of 304
GUTIERREZ, JR., J.:
This is a petition for review on certiorari, seeking to annul the
order of the respondent judge of the Court of First Instance of
Manila, Branch XXXVIII, which admitted to and allowed the
probate of the last will and testament of Adoracion C. Campos,
after an ex-parte presentation of evidence by herein private
respondent.
On January 31, 1977, Adoracion C. Campos died, leaving her
father, petitioner Hermogenes Campos and her sisters, private
respondent Nenita C. Paguia, Remedios C. Lopez and Marieta
C. Medina as the surviving heirs. As Hermogenes Campos was
the only compulsory heir, he executed an Affidavit of
Adjudication under Rule 74, Section I of the Rules of Court
whereby he adjudicated unto himself the ownership of the
entire estate of the deceased Adoracion Campos.
Eleven months after, on November 25, 1977, Nenita C. Paguia
filed a petition for the reprobate of a will of the deceased,
Adoracion Campos, which was allegedly executed in the United
States and for her appointment as administratrix of the estate
of the deceased testatrix.
In her petition, Nenita alleged that the testatrix was an
American citizen at the time of her death and was a permanent
resident of 4633 Ditman Street, Philadelphia, Pennsylvania,
U.S.A.; that the testatrix died in Manila on January 31, 1977
while temporarily residing with her sister at 2167 Leveriza,
Malate, Manila; that during her lifetime, the testatrix made her
last will and testament on July 10, 1975, according to the laws
of Pennsylvania, U.S.A., nominating Wilfredo Barzaga of New
Jersey as executor; that after the testatrix' death, her last will
and testament was presented, probated, allowed, and
registered with the Registry of Wills at the County of
Philadelphia, U.S.A., that Clement L. McLaughlin, the
administrator who was appointed after Dr. Barzaga had
declined and waived his appointment as executor in favor of
the former, is also a resident of Philadelphia, U.S.A., and that
therefore, there is an urgent need for the appointment of an
administratrix to administer and eventually distribute the
properties of the estate located in the Philippines.
On January 11, 1978, an opposition to the reprobate of the will
was filed by herein petitioner alleging among other things, that
he has every reason to believe that the will in question is a
forgery; that the intrinsic provisions of the will are null and
void; and that even if pertinent American laws on intrinsic
provisions are invoked, the same could not apply inasmuch as
they would work injustice and injury to him.
On December 1, 1978, however, the petitioner through his
counsel, Atty. Franco Loyola, filed a Motion to Dismiss
Opposition (With Waiver of Rights or Interests) stating that he
"has been able to verify the veracity thereof (of the will) and
now confirms the same to be truly the probated will of his
daughter Adoracion." Hence, an ex-parte presentation of
evidence for the reprobate of the questioned will was made.
On January 10, 1979, the respondent judge issued an order to
wit:
"At the hearing, it has been satisfactorily established that
Adoracion C. Campos, in her lifetime, was a citizen of the
United States of America with a permanent residence at 4633
Ditman Street, Philadelphia, PA 19124, (Exhibit D); that when
alive, Adoracion C. Campos executed a Last Will and
Testament in the county of Philadelphia, Pennsylvania, U.S.A.,
according to the laws thereat (Exhibits E-3 to E-3-b); that
while in temporary sojourn in the Philippines, Adoracion C.
Campos died in the City of Manila (Exhibit C) leaving property
both in the Philippines and in the United States of America;
that the Last Will and Testament of the late Adoracion C.
Campos was admitted and granted probate by the Orphan's
Court Division of the Court of Common Pleas, the probate
court of the Commonwealth of Pennsylvania, County of
Philadelphia, U.S.A., and letters of administration were issued
in favor of Clement J. McLaughlin, all in accordance with the
laws of the said foreign country on procedure and allowance of
wills (Exhibits E to E-10); and that the petitioner is not
suffering from any disqualification which would render her unfit
as administratrix of the estate in the Philippines of the late
Adoracion C. Campos.
"WHEREFORE, the Last Will and Testament of the late
Adoracion C. Campos is hereby admitted to and allowed
probate in the Philippines, and Nenita Campos Paguia is hereby
appointed Administratrix of the estate of said decedent; let
Letters of Administration with the Will annexed issue in favor
of said Administratrix upon her filing of a bond in the amount
of P5,000.00 conditioned under the provisions of Section I,
Rule 81 of the Rules of Court.
Another manifestation was filed by the petitioner on April 14,
1979, confirming the withdrawal of his opposition,
acknowledging the same to be his voluntary act and deed.
On May 25, 1979, Hermogenes Campos filed a petition for
relief, praying that the order allowing the will be set aside on
the ground that the withdrawal of his opposition to the same
was secured through fraudulent means. According to him, the
"Motion to Dismiss Opposition" was inserted among the papers
which he signed in connection with two Deeds of Conditional
Sales which he executed with the Construction and
Development Corporation of the Philippines (CDCP). He also
alleged that the lawyer who filed the withdrawal of the
opposition was not his counsel-of-record in the special
proceedings case.
Page 129 of 304
The petition for relief was set for hearing but the petitioner
failed to appear. He made several motions for postponement
until the hearing was set on May 29, 1980.
On May 18, 1980, petitioner filed another motion entitled
"Motion to Vacate and/or Set Aside the Order of January 10,
1979, and/or dismiss the case for lack of jurisdiction. In this
motion, the notice of hearing provided:
"Please include this motion in your calendar for hearing on May
29, 1980 at 8:30 in the morning for submission for
reconsideration and resolution of the Honorable Court. Until
this Motion is resolved, may I also request for the future
setting of the case for hearing on the Oppositor's motion to set
aside previously filed."
The hearing of May 29, 1980 was re-set by the court for June
19, 1980. When the case was called for hearing on this date,
the counsel for petitioner tried to argue his motion to vacate
instead of adducing evidence in support of the petition for
relief. Thus, the respondent judge issued an order dismissing
the petition for relief for failure to present evidence in support
thereof. Petitioner filed a motion for reconsideration but the
same was denied. In the same order, respondent judge also
denied the motion to vacate for lack of merit. Hence, this
petition.
Meanwhile, on June 6, 1982, petitioner Hermogenes Campos
died and left a will, which, incidentally has been questioned by
the respondent, his children and forced heirs as, on its face
patently null and void, and a fabrication, appointing Polly
Cayetano as the executrix of his last will and testament.
Cayetano, therefore, filed a motion to substitute herself as
petitioner in the instant case which was granted by the court
on September 13, 1982.
A motion to dismiss the petition on the ground that the rights
of the petitioner Hermogenes Campos merged upon his death
with the rights of the respondent and her sisters, only
remaining children and forced heirs was denied on September
12, 1983.
Petitioner Cayetano persists with the allegations that the
respondent judge acted without or in excess of his jurisdiction
when:
"1) He ruled the petitioner lost his standing in court deprived
the Right to Notice (sic) upon the filing of the Motion to
Dismiss opposition with waiver of rights or interests against the
estate of deceased Adoracion C. Campos, thus, paving the way
for the ex-parte hearing of the petition for the probate of
decedent will.
"2) He rul prior to an order for the distribution of the estate -
the law especially providing that repudiation of an inheritance
must be presented, within 30 days after it has issued an order
for ed that petitioner can waive, renounce or repudiate (not
made in a public or authenticated instrument), or by way of a
petition presented to the court but by way of a motion
presentedthe distribution of the estate in accordance with the
rules of Court.
"3) He ruled that the right of a forced heir to his legitime can
be divested by a decree admitting a will to probate in which no
provision is made for the forced heir in complete disregard of
Law of Succession.
"4) He denied petitioner's petition for Relief on the ground that
no evidence was adduced to support the Petition for Relief
when no Notice nor hearing was set to afford petitioner to
prove the merit of his petition - a denial of the due process
and a grave abuse of discretion amounting to lack of
jurisdiction.
"5) He acquired no jurisdiction over the testate case, the fact
that the Testator at the time of death was a usual resident of
Dasmariñas, Cavite, consequently Cavite Court of First
Instance has exclusive jurisdiction over the case (De Borja vs.
Tan, G.R. No. L-7792, July 1955)."
The first two issues raised by the petitioner are anchored on
the allegation that the respondent judge acted with grave
abuse of discretion when he allowed the withdrawal of the
petitioner's opposition to the reprobate of the will.
We find no grave abuse of discretion on the part of the
respondent judge. No proof was adduced to support
petitioner's contention that the motion to withdraw was
secured through fraudulent means and that Atty. Franco
Loyola was not his counsel of record. The records show that
after the filing of the contested motion, the petitioner at a later
date, filed a manifestation wherein he confirmed that the
Motion to Dismiss Opposition was his voluntary act and deed.
Moreover, at the time the motion was filed, the petitioner's
former counsel, Atty. Jose P. Lagrosa had long withdrawn from
the case and had been substituted by Atty. Franco Loyola who
in turn filed the motion. The present petitioner cannot,
therefore, maintain that the old man's attorney of record was
Atty. Lagrosa at the time of filing the motion. Since the
withdrawal was in order, the respondent judge acted correctly
in hearing the probate of the will ex-parte, there being no
other opposition to the same.
The third issue raised deals with the validity of the provisions
of the will. As a general rule, the probate court's authority is
limited only to the extrinsic validity of the will, the due
execution thereof, the testatrix's testamentary capacity and the
Page 130 of 304
compliance with the requisites or solemnities prescribed by
law. The intrinsic validity of the will normally comes only after
the court has declared that the will has been duly
authenticated. However, where practical considerations
demand that the intrinsic validity of the will be passed upon,
even before it is probated, the court should meet the issue.
(Maninang v. Court of Appeals, 114 SCRA 478).
In the case at bar, the petitioner maintains that since the
respondent judge allowed the reprobate of Adoracion's will,
Hermogenes C. Campos was divested of his legitime which was
reserved by the law for him.
This contention is without merit.
Although on its face, the will appeared to have preterited the
petitioner and thus, the respondent judge should have denied
its reprobate outright, the private respondents have sufficiently
established that Adoracion was, at the time of her death, an
American citizen and a permanent resident of Philadelphia,
Pennsylvania, U.S.A. Therefore, under Article 16 par. (2) and
1039 of the Civil Code which respectively provide:
Art. 16 par. (2).
xxx xxx xxx
"However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the
nature of the property and regardless of the country wherein
said property may be found."
Art. 1039.
"Capacity to succeed is governed by the law of the nation of
the decedent."
the law which governs Adoracion Campo's will is the law of
Pennsylvania, U.S.A., which is the national law of the
decedent. Although the parties admit that the Pennsylvania law
does not provide for legitimes and that all the estate may be
given away by the testatrix to a complete stranger, the
petitioner argues that such law should not apply because it
would be contrary to the sound and established public policy
and would run counter to the specific provisions of Philippine
Law.
It is a settled rule that as regards the intrinsic validity of the
provisions of the will, as provided for by Article 16 (2) and
1039 of the Civil Code, the national law of the decedent must
apply. This was squarely applied in the case of Bellis v. Bellis
(20 SCRA 358) wherein we ruled:
"It is therefore evident that whatever public policy or good
customs may be involved in our system of legitimes, Congress
has not intended to extend the same to the succession of
foreign nationals. For it has specifically chosen to leave, inter
alia, the amount of successional rights, to the decedent's
national law. Specific provisions must prevail over general
ones.
xxx xxx xxx
"The parties admit that the decedent, Amos G. Bellis, was a
citizen of the State of Texas, U.S.A., and under the law of
Texas, there are no forced heirs or legitimes. Accordingly,
since the intrinsic validity of the provision of the will and the
amount of successional rights are to be determined under
Texas law, the Philippine Law on legitimes cannot be applied to
the testacy of Amos G. Bellis."
As regards the alleged absence of notice of hearing for the
petition for relief, the records will bear the fact that what was
repeatedly scheduled for hearing on separate dates until June
19, 1980 was the petitioner's petition for relief and not his
motion to vacate the order of January 10, 1979. There is no
reason why the petitioner should have been led to believe
otherwise. The court even admonished the petitioner's failing
to adduce evidence when his petition for relief was repeatedly
set for hearing. There was no denial of due process. The fact
that he requested "for the future setting of the case for
hearing . . ." did not mean that at the next hearing, the motion
to vacate would be heard and given preference in lieu of the
petition for relief. Furthermore, such request should be
embodied in a motion and not in a mere notice of hearing.
Finally, we find the contention of the petition as to the issue of
jurisdiction utterly devoid of merit. Under Rule 73, Section 1, of
the Rules of Court, it is provided that:
"SECTION 1. Where estate of deceased persons settled. - If
the decedent is an inhabitant of the Philippines at the time of
his death, whether a citizen or an alien, his will shall be
proved, or letters of administration granted, and his estate
settled, in the Court of First Instance in the province in which
he resided at the time of his death, and if he is an inhabitant
of a foreign country, the Court of First Instance of any
province in which he had estate. The court first taking
cognizance of the settlement of the estate of a decedent, shall
exercise jurisdiction to the exclusion of all other courts. The
jurisdiction assumed by a court, so far as it depends on the
place of residence of the decedent, or of the location of his
estate, shall not be contested in a suit or proceeding, except in
an appeal from that court, in the original case, or when the
want of jurisdiction appears on the record."
Page 131 of 304
 Metro Manila, valued at P764,865.00 (Makati property); (2) a
Therefore, the settlement of the estate of Adoracion Campos current account in Audrey's name with a cash balance of
was correctly filed with the Court of First Instance of Manila P12,417.97; and (3) 64,444 shares of stock in A/G Interiors,
where she had an estate since it was alleged and proven the Inc. worth P64,444.00.[5] 
Adoracion at the time of her death was a citizen and
permanent resident of Pennsylvania, United States of America
an not a "usual resident of Cavite" as alleged by the petitioner.
On July 20, 1984, Richard died, leaving a will, wherein he
Moreover, petitioner is now estopped from questioning the
bequeathed his entire estate to respondent, save for his rights
jurisdiction of the probate court in the petition for relief. It is a
and interests over the A/G Interiors, Inc. shares, which he left
settled rule that a party cannot invoke the jurisdiction of a
to Kyle.[6] The will was also admitted to probate by the
court to secure affirmative relief, against his opponent and
Orphan's Court of Ann Arundel, Maryland, U.S.A, and James N.
after failing to obtain such relief, repudiate or question that
Phillips was likewise appointed as executor, who in turn,
same jurisdiction. (See Saulog Transit, Inc. v. Hon. Manuel
designated Atty. William Quasha or any member of the Quasha
Lazaro, et al., G.R. No. 63284, April 4, 1984).
Asperilla Ancheta Pena & Nolasco Law Offices, as ancillary
administrator. 
WHEREFORE, the petition for certiorari and prohibition is
hereby dismissed for lack of merit.

SO ORDERED. Richard's will was then submitted for probate before the
Regional Trial Court of Makati, Branch 138, docketed as Special
Proceeding No. M-888.[7] Atty. Quasha was appointed as
Ancheta vs Guersey-Dalaygon ancillary administrator on July 24, 1986.[8] 
ALONZO Q. ANCHETA, Petitioner, versus CANDELARIA
GUERSEY-DALAYGON, Respondent.

AUSTRIA-MARTINEZ, J.:  On October 19, 1987, petitioner filed in Special Proceeding No.
Spouses Audrey O'Neill (Audrey) and W. Richard Guersey
(Richard) were American citizens who have resided in the
Philippines for 30 years. They have an adopted daughter, Kyle
Guersey Hill (Kyle). On July 29, 1979, Audrey died, leaving a
will. In it, she bequeathed her entire estate to Richard, who
was also designated as executor.[1] The will was admitted to
probate before the Orphan's Court of Baltimore, Maryland,
U.S.A, which named James N. Phillips as executor due to
Richard's renunciation of his appointment.[2] The court also
named Atty. Alonzo Q. Ancheta (petitioner) of the Quasha
Asperilla Ancheta Pena & Nolasco Law Offices as ancillary
administrator.[3]  Register of Deeds of Makati to cancel TCT No. 69792 in the
In 1981, Richard married Candelaria Guersey-Dalaygon
(respondent) with whom he has two children, namely,
Kimberly and Kevin. 
9625, a motion to declare Richard and Kyle as heirs of Audrey.
[9] Petitioner also filed on October 23, 1987, a project of
partition of Audrey's estate, with Richard being apportioned
the ¾ undivided interest in the Makati property, 48.333 shares
in A/G Interiors, Inc., and P9,313.48 from the Citibank current
account; and Kyle, the ¼ undivided interest in the Makati
property, 16,111 shares in A/G Interiors, Inc., and P3,104.49
in cash.[10] 
The motion and project of partition was granted and approved
by the trial court in its Order dated February 12, 1988.[11] The
trial court also issued an Order on April 7, 1988, directing the
name of Richard and to issue a new title in the joint names of
the Estate of W. Richard Guersey (¾ undivided interest) and
Kyle (¼ undivided interest); directing the Secretary of A/G
Interiors, Inc. to transfer 48.333 shares to the Estate of W.
Richard Guersey and 16.111 shares to Kyle; and directing the
Citibank to release the amount of P12,417.97 to the ancillary
administrator for distribution to the heirs.[12] 

On October 12, 1982, Audrey's will was also admitted to

probate by the then Court of First Instance of Rizal, Branch 25, Consequently, the Register of Deeds of Makati issued on June
Seventh Judicial District, Pasig, in Special Proceeding No. 9625.
23, 1988, TCT No. 155823 in the names of the Estate of W.
[4] As administrator of Audrey's estate in the Philippines, Richard Guersey and Kyle.[13] 
petitioner filed an inventory and appraisal of the following
properties: (1) Audrey's conjugal share in real estate with
improvements located at 28 Pili Avenue, Forbes Park, Makati,
Page 132 of 304
Meanwhile, the ancillary administrator in Special Proceeding
No. M-888 also filed a project of partition wherein 2/5 of
Richard's ¾ undivided interest in the Makati property was WHEREFORE, the assailed Orders of February 12, 1998 and
allocated to respondent, while 3/5 thereof were allocated to April 7, 1988 are hereby ANNULLED and, in lieu thereof, a new
Richard's three children. This was opposed by respondent on one is entered ordering: 
the ground that under the law of the State of Maryland, "a
legacy passes to the legatee the entire interest of the
testator in the property subject of the legacy."[14] Since
Richard left his entire estate to respondent, except for his
(a) The adjudication of the entire estate of Audrey O'Neill
rights and interests over the A/G Interiors, Inc, shares, then
Guersey in favor of the estate of W. Richard Guersey; and 
his entire ¾ undivided interest in the Makati property should
be given to respondent. 

(b) The cancellation of Transfer Certificate of Title No. 15583

of the Makati City Registry and the issuance of a new title in
The trial court found merit in respondent's opposition, and in
the name of the estate of W. Richard Guersey. 
its Order dated December 6, 1991, disapproved the project of
partition insofar as it affects the Makati property. The trial
court also adjudicated Richard's entire ¾ undivided interest in
the Makati property to respondent.[15]  SO ORDERED.[18] 

On October 20, 1993, respondent filed with the Court of Petitioner filed a motion for reconsideration, but this was
Appeals (CA) an amended complaint for the annulment of the denied by the CA per Resolution dated August 27, 1999.[19] 
trial court's Orders dated February 12, 1988 and April 7, 1988,
issued in Special Proceeding No. 9625.[16] Respondent
contended that petitioner willfully breached his fiduciary duty
Hence, the herein petition for review on certiorari under Rule
when he disregarded the laws of the State of Maryland on the
45 of the Rules of Court alleging that the CA gravely erred in
distribution of Audrey's estate in accordance with her will.
not holding that: 
Respondent argued that since Audrey devised her entire estate
to Richard, then the Makati property should be wholly
adjudicated to him, and not merely ¾ thereof, and since
Richard left his entire estate, except for his rights and interests A) THE ORDERS OF 12 FEBRUARY 1988 AND 07 APRIL 1988
over the A/G Interiors, Inc., to respondent, then the entire IN SPECIAL PROCEEDINGS NO. 9625 "IN THE MATTER OF
Makati property should now pertain to respondent.  THE PETITION FOR PROBATE OF THE WILL OF THE
DECEASED AUDREY GUERSEY, ALONZO Q. ANCHETA,
ANCILLARY ADMINISTRATOR", ARE VALID AND BINDING AND
HAVE LONG BECOME FINAL AND HAVE BEEN FULLY
Petitioner filed his Answer denying respondent's allegations.
IMPLEMENTED AND EXECUTED AND CAN NO LONGER BE
Petitioner contended that he acted in good faith in submitting
ANNULLED. 
the project of partition before the trial court in Special
Proceeding No. 9625, as he had no knowledge of the State of
Maryland's laws on testate and intestate succession. Petitioner
alleged that he believed that it is to the "best interests of the B) THE ANCILLARY ADMINISTRATOR HAVING ACTED IN
surviving children that Philippine law be applied as they would GOOD FAITH, DID NOT COMMIT FRAUD, EITHER EXTRINSIC
receive their just shares." Petitioner also alleged that the OR INTRINSIC, IN THE PERFORMANCE OF HIS DUTIES AS
orders sought to be annulled are already final and executory, ANCILLARY ADMINISTRATOR OF AUDREY O'NEIL GUERSEY'S
and cannot be set aside.  ESTATE IN THE PHILIPPINES, AND THAT NO FRAUD, EITHER
EXTRINSIC OR INTRINSIC, WAS EMPLOYED BY [HIM] IN
PROCURING SAID ORDERS.[20] 
On March 18, 1999, the CA rendered the assailed Decision
annulling the trial court's Orders dated February 12, 1988 and
April 7, 1988, in Special Proceeding No. 9625.[17] The Petitioner reiterates his arguments before the CA that the
dispositive portion of the assailed Decision provides:  Orders dated February 12, 1988 and April 7, 1988 can no
longer be annulled because it is a final judgment, which is
Page 133 of 304
"conclusive upon the administration as to all matters involved annulment of judgment filed under B.P. 129 may be based on
in such judgment or order, and will determine for all time and the ground that a judgment is void for want of jurisdiction or
in all courts, as far as the parties to the proceedings are that the judgment was obtained by extrinsic fraud.[27] For
concerned, all matters therein determined," and the same has fraud to become a basis for annulment of judgment, it has to
already been executed.[21]  be extrinsic or actual,[28] and must be brought within four
years from the discovery of the fraud.[29] 

Petitioner also contends that that he acted in good faith in

performing his duties as an ancillary administrator. He
maintains that at the time of the filing of the project of
partition, he was not aware of the relevant laws of the State of
Maryland, such that the partition was made in accordance with
Philippine laws. Petitioner also imputes knowledge on the part
of respondent with regard to the terms of Aubrey's will, stating
that as early as 1984, he already apprised respondent of the
contents of the will and how the estate will be divided.[22]  applicable, hence, petitioner should have distributed Aubrey's
Respondent argues that petitioner's breach of his fiduciary
duty as ancillary administrator of Aubrey's estate amounted to
extrinsic fraud. According to respondent, petitioner was duty-
bound to follow the express terms of Aubrey's will, and his
denial of knowledge of the laws of Maryland cannot stand
because petitioner is a senior partner in a prestigious law firm
and it was his duty to know the relevant laws.  already prescribed because as early as 1984, respondent was
Respondent also states that she was not able to file any
opposition to the project of partition because she was not a
party thereto and she learned of the provision of Aubrey's will
bequeathing entirely her estate to Richard only after Atty.
Ancheta filed a project of partition in Special Proceeding No. M-
888 for the settlement of Richard's estate. 
In the present case, respondent alleged extrinsic fraud as basis
for the annulment of the RTC Orders dated February 12, 1988
and April 7, 1988. The CA found merit in respondent's cause
and found that petitioner's failure to follow the terms of
Audrey's will, despite the latter's declaration of good faith,
amounted to extrinsic fraud. The CA ruled that under Article 16
of the Civil Code, it is the national law of the decedent that is
estate in accordance with the terms of her will. The CA also
found that petitioner was prompted to distribute Audrey's
estate in accordance with Philippine laws in order to equally
benefit Audrey and Richard Guersey's adopted daughter, Kyle
Guersey Hill. 
Petitioner contends that respondent's cause of action had
already well aware of the terms of Audrey's will,[30] and the
complaint was filed only in 1993. Respondent, on the other
hand, justified her lack of immediate action by saying that she
had no opportunity to question petitioner's acts since she was
not a party to Special Proceeding No. 9625, and it was only
after Atty. Ancheta filed the project of partition in Special
Proceeding No. M-888, reducing her inheritance in the estate
of Richard that she was prompted to seek another counsel to
protect her interest.[31] 

A decree of distribution of the estate of a deceased person

It should be pointed out that the prescriptive period for
vests the title to the land of the estate in the distributees,
annulment of judgment based on extrinsic fraud commences to
which, if erroneous may be corrected by a timely appeal. Once
run from the discovery of the fraud or fraudulent
it becomes final, its binding effect is like any other judgment in
act/s. Respondent's knowledge of the terms of Audrey's will is
rem.[23] However, in exceptional cases, a final decree of
immaterial in this case since it is not the fraud complained of.
distribution of the estate may be set aside for lack of
Rather, it is petitioner's failure to introduce in evidence the
jurisdiction or fraud.[24] Further, in Ramon v. Ortuzar,[25] the
pertinent law of the State of Maryland that is the fraudulent
Court ruled that a party interested in a probate proceeding
act, or in this case, omission, alleged to have been committed
may have a final liquidation set aside when he is left out by
against respondent, and therefore, the four-year period should
reason of circumstances beyond his control or through mistake
be counted from the time of respondent's discovery thereof. 
or inadvertence not imputable to negligence.[26] 

Records bear the fact that the filing of the project of partition
The petition for annulment was filed before the CA on October
of Richard's estate, the opposition thereto, and the order of
20, 1993, before the issuance of the 1997 Rules of Civil
the trial court disallowing the project of partition in Special
Procedure; hence, the applicable law is Batas Pambansa Blg.
Proceeding No. M-888 were all done in 1991.[32] Respondent
129 (B.P. 129) or the Judiciary Reorganization Act of 1980. An
cannot be faulted for letting the assailed orders to lapse into

Page 134 of 304

finality since it was only through Special Proceeding No. M-888
that she came to comprehend the ramifications of petitioner's
acts. Obviously, respondent had no other recourse under the Petitioner's failure to proficiently manage the distribution of
circumstances but to file the annulment case. Since the action Audrey's estate according to the terms of her will and as
for annulment was filed in 1993, clearly, the same has not yet dictated by the applicable law amounted to extrinsic fraud.
prescribed.  Hence the CA Decision annulling the RTC Orders dated
February 12, 1988 and April 7, 1988, must be upheld. 

Fraud takes on different shapes and faces. In Cosmic Lumber

Corporation v. Court of Appeals,[33] the Court stated that
"man in his ingenuity and fertile imagination will always
contrive new schemes to fool the unwary."  in Special Proceeding No. 9625, it was shown, among others,
There is extrinsic fraud within the meaning of Sec. 9 par. (2),
of B.P. Blg. 129, where it is one the effect of which prevents a
party from hearing a trial, or real contest, or from presenting
all of his case to the court, or where it operates upon matters,
not pertaining to the judgment itself, but to the manner in
which it was procured so that there is not a fair submission of
the controversy. In other words, extrinsic fraud refers to any
fraudulent act of the prevailing party in the litigation which is
committed outside of the trial of the case, whereby the
defeated party has been prevented from exhibiting fully his
side of the case by fraud or deception practiced on him by his
opponent. Fraud is extrinsic where the unsuccessful party has
been prevented from exhibiting fully his case, by fraud or
deception practiced on him by his opponent, as by keeping him
away from court, a false promise of a compromise; or where
the defendant never had any knowledge of the suit, being kept
in ignorance by the acts of the plaintiff; or where an attorney
fraudulently or without authority connives at his defeat; these
and similar cases which show that there has never been a real
contest in the trial or hearing of the case are reasons for which
a new suit may be sustained to set aside and annul the former
judgment and open the case for a new and fair hearing.[34]  However, intestate and testamentary succession, both with
The overriding consideration when extrinsic fraud is alleged is
that the fraudulent scheme of the prevailing litigant prevented
a party from having his day in court.[35] 
It is undisputed that Audrey Guersey was an American citizen
domiciled in Maryland, U.S.A. During the reprobate of her will
that at the time of Audrey's death, she was residing in the
Philippines but is domiciled in Maryland, U.S.A.; her Last Will
and Testament dated August 18, 1972 was executed and
probated before the Orphan's Court in Baltimore, Maryland,
U.S.A., which was duly authenticated and certified by the
Register of Wills of Baltimore City and attested by the Chief
Judge of said court; the will was admitted by the Orphan's
Court of Baltimore City on September 7, 1979; and the will was
authenticated by the Secretary of State of Maryland and the
Vice Consul of the Philippine Embassy. 
Being a foreign national, the intrinsic validity of Audrey's will,
especially with regard as to who are her heirs, is governed by
her national law, i.e., the law of the State of Maryland, as
provided in Article 16 of the Civil Code, to wit: 
Art. 16. Real property as well as personal property is subject to
the law of the country where it is situated. 
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the
national law of the person whose succession is under
consideration, whatever may be the nature of the
property and regardless of the country wherein said
property may be found. (Emphasis supplied) 

Petitioner is the ancillary administrator of Audrey's estate. As

such, he occupies a position of the highest trust and
Article 1039 of the Civil Code further provides that "capacity to
confidence, and he is required to exercise reasonable diligence
succeed is governed by the law of the nation of the
and act in entire good faith in the performance of that trust.
decedent." 
Although he is not a guarantor or insurer of the safety of the
estate nor is he expected to be infallible, yet the same degree
of prudence, care and judgment which a person of a fair
average capacity and ability exercises in similar transactions of As a corollary rule, Section 4, Rule 77 of the Rules of Court on
his own, serves as the standard by which his conduct is to be Allowance of Will Proved Outside the Philippines and
judged.[36]  Administration of Estate Thereunder, states: 

Page 135 of 304


SEC. 4. Estate, how administered.-When a will is thus allowed,
the court shall grant letters testamentary, or letters of
administration with the will annexed, and such letters
testamentary or of administration, shall extend to all the estate
of the testator in the Philippines. Such estate, after the
payment of just debts and expenses of administration,
shall be disposed of according to such will, so far as
such will may operate upon it; and the residue, if any,
shall be disposed of as is provided by law in cases of estates in
the Philippines belonging to persons who are inhabitants of
another state or country. (Emphasis supplied)  to except a particular case from the operation of the rule
While foreign laws do not prove themselves in our jurisdiction
and our courts are not authorized to take judicial notice of
them;[37] however, petitioner, as ancillary administrator of
Audrey's estate, was duty-bound to introduce in evidence the
pertinent law of the State of Maryland.[38]  petitioner was prompted by his concern over Kyle, whom
Petitioner admitted that he failed to introduce in evidence the
law of the State of Maryland on Estates and Trusts, and merely
relied on the presumption that such law is the same as the
Philippine law on wills and succession. Thus, the trial court
peremptorily applied Philippine laws and totally disregarded the
terms of Audrey's will. The obvious result was that there was
no fair submission of the case before the trial court or a
judicious appreciation of the evidence presented.  absence of evidence adduced to prove the latter law ( Slade
Petitioner insists that his application of Philippine laws was
made in good faith. The Court cannot accept petitioner's
protestation. How can petitioner honestly presume that
Philippine laws apply when as early as the reprobate of
Audrey's will before the trial court in 1982, it was already
brought to fore that Audrey was a U.S. citizen, domiciled in the
State of Maryland. As asserted by respondent, petitioner is a
senior partner in a prestigious law firm, with a "big legal staff
and a large library."[39] He had all the legal resources to
determine the applicable law. It was incumbent upon him to
exercise his functions as ancillary administrator with
reasonable diligence, and to discharge the trust reposed on
him faithfully. Unfortunately, petitioner failed to perform his
fiduciary duties.  good faith in distributing the subject estate in accordance with
Moreover, whether his omission was intentional or not, the fact
remains that the trial court failed to consider said law when it
issued the assailed RTC Orders dated February 12, 1988 and
April 7, 1988, declaring Richard and Kyle as Audrey's heirs, and
distributing Audrey's estate according to the project of partition
submitted by petitioner. This eventually prejudiced respondent
and deprived her of her full successional right to the Makati
property. 
In GSIS v. Bengson Commercial Bldgs., Inc.,[40] the Court
held that when the rule that the negligence or mistake of
counsel binds the client deserts its proper office as an aid to
justice and becomes a great hindrance and chief enemy, its
rigors must be relaxed to admit exceptions thereto and to
prevent a miscarriage of justice, and the court has the power
whenever the purposes of justice require it. 
The CA aptly noted that petitioner was remiss in his
responsibilities as ancillary administrator of Audrey's estate.
The CA likewise observed that the distribution made by
petitioner believed should equally benefit from the Makati
property. The CA correctly stated, which the Court adopts,
thus: 
In claiming good faith in the performance of his duties and
responsibilities, defendant Alonzo H. Ancheta invokes the
principle which presumes the law of the forum to be the same
as the foreign law (Beam vs. Yatco, 82 Phil. 30, 38) in the
Perkins vs. Perkins, 57 Phil. 205, 210). In defending his actions
in the light of the foregoing principle, however, it appears that
the defendant lost sight of the fact that his primary
responsibility as ancillary administrator was to distribute the
subject estate in accordance with the will of Audrey O'Neill
Guersey. Considering the principle established under Article 16
of the Civil Code of the Philippines, as well as the citizenship
and the avowed domicile of the decedent, it goes without
saying that the defendant was also duty-bound to prove the
pertinent laws of Maryland on the matter. 
The record reveals, however, that no clear effort was made to
prove the national law of Audrey O'Neill Guersey during the
proceedings before the court a quo. While there is claim of
the Philippine laws, the defendant appears to put his
actuations in a different light as indicated in a portion of his
direct examination, to wit: 
x x x 
Page 136 of 304
It would seem, therefore, that the eventual distribution of the
estate of Audrey O'Neill Guersey was prompted by defendant
Alonzo H. Ancheta's concern that the subject realty equally
benefit the plaintiff's adopted daughter Kyle Guersey.  estate of decedents law as expeditiously and with as little
Well-intentioned though it may be, defendant Alonzo H.
Ancheta's action appears to have breached his duties and
responsibilities as ancillary administrator of the subject
estate. While such breach of duty admittedly cannot be
considered extrinsic fraud under ordinary
circumstances, the fiduciary nature of the said
defendant's position, as well as the resultant
frustration of the decedent's last will, combine to
create a circumstance that is tantamount to extrinsic
fraud. Defendant Alonzo H. Ancheta's omission to prove the
national laws of the decedent and to follow the latter's last will,
in sum, resulted in the procurement of the subject orders
without a fair submission of the real issues involved in the
case.[41] (Emphasis supplied)  "a legacy to pass to the legatee the entire estate of the
This is not a simple case of error of judgment or grave abuse
of discretion, but a total disregard of the law as a result of
petitioner's abject failure to discharge his fiduciary duties. It
does not rest upon petitioner's pleasure as to which law should
be made applicable under the circumstances. His onus is clear.
Respondent was thus excluded from enjoying full rights to the
Makati property through no fault or negligence of her own, as
petitioner's omission was beyond her control. She was in no
position to analyze the legal implications of petitioner's
omission and it was belatedly that she realized the adverse
consequence of the same. The end result was a miscarriage of
justice. In cases like this, the courts have the legal and moral
duty to provide judicial aid to parties who are deprived of their
rights.[42]  Instance). Again said law was presented by the counsel for the
The trial court in its Order dated December 6, 1991 in Special
Proceeding No. M-888 noted the law of the State of Maryland
on Estates and Trusts, as follows: 
Under Section 1-301, Title 3, Sub-Title 3 of the Annotated
Code of the Public General Laws of Maryland on Estates and
Trusts, "all property of a decedent shall be subject to the
estate of decedents law, and upon his death shall pass directly
to the personal representative, who shall hold the legal title for
administration and distribution," while Section 4-408 expressly
provides that "unless a contrary intent is expressly indicated in
the will, a legacy passes to the legatee the entire interest of
the testator in the property which is the subject of the legacy".
Section 7-101, Title 7, Sub-Title 1, on the other hand, declares
that "a personal representative is a fiduciary" and as such he is
"under the general duty to settle and distribute the estate of
the decedent in accordance with the terms of the will and the
sacrifice of value as is reasonable under the circumstances".
[43] 
In her will, Audrey devised to Richard her entire estate,
consisting of the following: (1) Audrey's conjugal share in the
Makati property; (2) the cash amount of P12,417.97; and (3)
64,444 shares of stock in A/G Interiors, Inc. worth P64,444.00.
All these properties passed on to Richard upon Audrey's death.
Meanwhile, Richard, in his will, bequeathed his entire estate to
respondent, except for his rights and interests over the A/G
Interiors, Inc. shares, which he left to Kyle. When Richard
subsequently died, the entire Makati property should have then
passed on to respondent. This, of course, assumes the
proposition that the law of the State of Maryland which allows
testator in the property which is the subject of the legacy,"
was sufficiently proven in Special Proceeding No. 9625.
Nevertheless, the Court may take judicial notice thereof in view
of the ruling in Bohanan v. Bohanan.[44] Therein, the Court
took judicial notice of the law of Nevada despite failure to
prove the same. The Court held, viz.: 
We have, however, consulted the records of the case in the
court below and we have found that during the hearing on
October 4, 1954 of the motion of Magdalena C. Bohanan for
withdrawal of P20,000 as her share, the foreign law, especially
Section 9905, Compiled Nevada Laws, was introduced in
evidence by appellants' (herein) counsel as Exhibit "2" (See pp.
77-79, Vol. II, and t.s.n. pp. 24-44, Records, Court of First
executor and admitted by the Court as Exhibit "B" during the
hearing of the case on January 23, 1950 before Judge Rafael
Amparo (see Records, Court of First Instance, Vol. 1). 
In addition, the other appellants, children of the testator, do
not dispute the above-quoted provision of the laws of the State
of Nevada. Under all the above circumstances, we are
constrained to hold that the pertinent law of Nevada, especially
Section 9905 of the Compiled Nevada Laws of 1925, can be
taken judicial notice of by us, without proof of such law having
been offered at the hearing of the project of partition. 
In this case, given that the pertinent law of the State of
Maryland has been brought to record before the CA, and the
trial court in Special Proceeding No. M-888 appropriately took
Page 137 of 304
note of the same in disapproving the proposed project of
partition of Richard's estate, not to mention that petitioner or
any other interested person for that matter, does not dispute
the existence or validity of said law, then Audrey's and
Richard's estate should be distributed according to their
respective wills, and not according to the project of partition
submitted by petitioner. Consequently, the entire Makati
property belongs to respondent.  and when the transfer was made to a former natural-born
Decades ago, Justice Moreland, in his dissenting opinion
in Santos v. Manarang,[45] wrote: 
in the acquisition of lands of the public domain, the disposition,
exploitation, development and utilization of natural resources
of the Philippines, does not include the acquisition or
exploitation of private agricultural lands. The prohibition
against acquisition of private lands by aliens was carried on to
the 1973 Constitution under Article XIV, Section 14, with the
exception of private lands acquired by hereditary succession
citizen, as provided in Section 15, Article XIV. As it now stands,
Article XII, Sections 7 and 8 of the 1986 Constitution explicitly
prohibits non-Filipinos from acquiring or holding title to private
lands or to lands of the public domain, except only by way of
legal succession or if the acquisition was made by a former
natural-born citizen. 

A will is the testator speaking after death. Its provisions have

substantially the same force and effect in the probate court as
In any case, the Court has also ruled that if land is invalidly
if the testator stood before the court in full life making the
transferred to an alien who subsequently becomes a citizen or
declarations by word of mouth as they appear in the will. That
transfers it to a citizen, the flaw in the original transaction is
was the special purpose of the law in the creation of the
considered cured and the title of the transferee is rendered
instrument known as the last will and testament. Men wished
valid.[49] In this case, since the Makati property had already
to speak after they were dead and the law, by the creation of
passed on to respondent who is a Filipino, then whatever flaw,
that instrument, permitted them to do so x x x All doubts must
if any, that attended the acquisition by the Guerseys of the
be resolved in favor of the testator's having meant just what
Makati property is now inconsequential, as the objective of the
he said. 
constitutional provision to keep our lands in Filipino hands has
been achieved. 

Honorable as it seems, petitioner's motive in equitably

distributing Audrey's estate cannot prevail over Audrey's and
WHEREFORE, the petition is denied. The Decision dated
Richard's wishes. As stated in Bellis v. Bellis:[46] 
March 18, 1999 and the Resolution dated August 27, 1999 of
the Court of Appeals are AFFIRMED. 

x x x whatever public policy or good customs may be involved

in our system of legitimes, Congress has not intended to
Petitioner is ADMONISHED to be more circumspect in the
extend the same to the succession of foreign nationals. For it
performance of his duties as an official of the court. 
has specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national Law. Specific
provisions must prevail over general ones.[47] 
No pronouncement as to costs. 

Before concluding, the Court notes the fact that Audrey and
Richard Guersey were American citizens who owned real SO ORDERED. 
property in the Philippines, although records do not show when
and how the Guerseys acquired the Makati property. 
Far East Bank vs Pacilan
CALLEJO, SR., J.: 

Under Article XIII, Sections 1 and 4 of the 1935 Constitution,

the privilege to acquire and exploit lands of the public domain,
and other natural resources of the Philippines, and to operate
public utilities, were reserved to Filipinos and entities owned or
controlled by them. In Republic v. Quasha,[48] the Court
clarified that the Parity Rights Amendment of 1946, which re-
opened to American citizens and business enterprises the right
Before the Court is the petition for review on certiorari  filed by
Far East Bank and Trust Company (now Bank of the Philippines
Islands) seeking the reversal of the Decision[1] dated August
30, 2002 of the Court of Appeals (CA) in CA-G.R. CV No. 36627
which ordered it, together with its branch accountant, Roger
Page 138 of 304
Villadelgado, to pay respondent Themistocles Pacilan, Jr.[2]
the total sum of P100,000.00 as moral and exemplary
damages. The assailed decision affirmed with modification that
of the Regional Trial Court (RTC) of Negros Occidental,
Bacolod City, Branch 54, in Civil Case No. 4908. Likewise
sought to be reversed and set aside is the Resolution dated
January 17, 2003 of the appellate court, denying petitioner
bank's motion for reconsideration.  that the closure of his current account by petitioner bank was
The case stemmed from the following undisputed facts: 
Respondent Pacilan opened a current account with petitioner
bank's Bacolod Branch on May 23, 1980. His account was
denominated as Current Account No. 53208 (0052-00407-4).
The respondent had since then issued several postdated
checks to different payees drawn against the said account.
Sometime in March 1988, the respondent issued Check No.
2434886 in the amount of P680.00 and the same was
presented for payment to petitioner bank on April 4, 1988. 
Upon its presentment on the said date, Check No. 2434886
was dishonored by petitioner bank. The next day, or on April 5,
1988, the respondent deposited to his current account the
amount of P800.00. The said amount was accepted by
petitioner bank; hence, increasing the balance of the
respondent's deposit to P1,051.43. 
Subsequently, when the respondent verified with petitioner
bank about the dishonor of Check No. 2434866, he discovered
that his current account was closed on the ground that it was
"improperly handled." The records of petitioner bank disclosed
that between the period of March 30, 1988 and April 5, 1988,
the respondent issued four checks, to wit: Check No. 2480416
for P6,000.00; Check No. 2480419 for P50.00; Check No.
2434880 for P680.00 and; Check No. 2434886 for P680.00, or
a total amount of P7,410.00. At the time, however, the
respondent's current account with petitioner bank only had a
deposit of P6,981.43. Thus, the total amount of the checks
presented for payment on April 4, 1988 exceeded the balance
of the respondent's deposit in his account. For this reason,
petitioner bank, through its branch accountant, Villadelgado,
closed the respondent's current account effective the evening
of April 4, 1988 as it then had an overdraft of P428.57. As a
consequence of the overdraft, Check No. 2434886 was
dishonored. 
On April 18, 1988, the respondent wrote to petitioner bank
complaining that the closure of his account was unjustified.
When he did not receive a reply from petitioner bank, the
respondent filed with the RTC of Negros Occidental, Bacolod
City, Branch 54, a complaint for damages against petitioner
bank and Villadelgado. The case was docketed as Civil Case
No. 4908. The respondent, as complainant therein, alleged
unjustified because on the first banking hour of April 5, 1988,
he already deposited an amount sufficient to fund his checks.
The respondent pointed out that Check No. 2434886, in
particular, was delivered to petitioner bank at the close of
banking hours on April 4, 1988 and, following normal banking
procedure, it (petitioner bank) had until the last clearing hour
of the following day, or on April 5, 1988, to honor the check or
return it, if not funded. In disregard of this banking procedure
and practice, however, petitioner bank hastily closed the
respondent's current account and dishonored his Check No.
2434886. 
The respondent further alleged that prior to the closure of his
current account, he had issued several other postdated checks.
The petitioner bank's act of closing his current account
allegedly preempted the deposits that he intended to make to
fund those checks. Further, the petitioner bank's act exposed
him to criminal prosecution for violation of Batas Pambansa
Blg. 22. 
According to the respondent, the indecent haste that attended
the closure of his account was patently malicious and intended
to embarrass him. He claimed that he is a Cashier of Prudential
Bank and Trust Company, whose branch office is located just
across that of petitioner bank, and a prominent and respected
leader both in the civic and banking communities. The alleged
malicious acts of petitioner bank besmirched the respondent's
reputation and caused him "social humiliation, wounded
feelings, insurmountable worries and sleepless nights" entitling
him to an award of damages. 
In their answer, petitioner bank and Villadelgado maintained
that the respondent's current account was subject to petitioner
bank's Rules and Regulations Governing the Establishment and
Operation of Regular Demand Deposits which provide that "the
Bank reserves the right to close an account if the depositor
frequently draws checks against insufficient funds and/or
uncollected deposits" and that "the Bank reserves the right at
any time to return checks of the depositor which are drawn
against insufficient funds or for any reason."[3] 
Page 139 of 304
They showed that the respondent had improperly and
irregularly handled his current account. For example, in 1986,
the respondent's account was overdrawn 156 times, in 1987,
117 times and in 1988, 26 times. In all these instances, the
account was overdrawn due to the issuance of checks against
insufficient funds. The respondent had also signed several
checks with a different signature from the specimen on file for
dubious reasons.  performance of his duties, act with justice, give everyone his
When the respondent made the deposit on April 5, 1988, it
was obviously to cover for issuances made the previous day
against an insufficiently funded account. When his Check No.
2434886 was presented for payment on April 4, 1988, he had
already incurred an overdraft; hence, petitioner bank rightfully
dishonored the same for insufficiency of funds. 
and lost his credit standing in the business community. The
court a quo further ratiocinated that even
granting arguendo that petitioner bank had the right to close
the respondent's account, the manner which attended the
closure constituted an abuse of the said right. Citing Article 19
of the Civil Code of the Philippines which states that "[e]very
person must, in the exercise of his rights and in the
due, and observe honesty and good faith" and Article 20
thereof which states that "[e]very person who, contrary to law,
wilfully or negligently causes damage to another, shall
indemnify the latter for the same," the court a  quo  adjudged
petitioner bank of acting in bad faith. It held that, under the
foregoing circumstances, the respondent is entitled to an
award of moral and exemplary damages. 

The decretal portion of the court a quo's  decision reads: 

After due proceedings, the court a quo rendered judgment in

favor of the respondent as it ordered the petitioner bank and
Villadelgado, jointly and severally, to pay the respondent the WHEREFORE, PREMISES CONSIDERED, judgment is hereby
amounts of P100,000.00 as moral damages and P50,000.00 as rendered: 
exemplary damages and costs of suit. In so ruling, the court
a quo  also cited petitioner bank's rules and regulations which
state that "a charge of P10.00 shall be levied against the
1. Ordering the defendants [petitioner bank and Villadelgado],
depositor for any check that is taken up as a returned item due
jointly and severally, to pay plaintiff [the respondent] the sum
to 'insufficiency of funds' on the date of receipt from the
of P100,000.00 as moral damages; 
clearing office even if said check is honored and/or covered by
sufficient deposit the following banking day." The same rules
and regulations also provide that "a check returned for
insufficiency of funds for any reason of similar import may be 2. Ordering the defendants, jointly and severally, to pay
subsequently recleared for one more time only, subject to the plaintiff the sum of P50,000.00 as exemplary damages plus
same charges."  costs and expenses of the suit; and 

According to the court a quo, following these rules and 3. Dismissing [the] defendants' counterclaim for lack of merit. 
regulations, the respondent, as depositor, had the right to put
up sufficient funds for a check that was taken as a returned
item for insufficient funds the day following the receipt of said
check from the clearing office. In fact, the said check could still SO ORDERED.[4] 
be recleared for one more time. In previous instances,
petitioner bank notified the respondent when he incurred an
overdraft and he would then deposit sufficient funds the
On appeal, the CA rendered the Decision dated August 30,
following day to cover the overdraft. Petitioner bank thus acted
2002, affirming with modification the decision of the court a
unjustifiably when it immediately closed the respondent's
quo. 
account on April 4, 1988 and deprived him of the opportunity
to reclear his check or deposit sufficient funds therefor the
following day. 
The appellate court substantially affirmed the factual findings
of the court a quo as it held that petitioner bank unjustifiably
closed the respondent's account notwithstanding that its own
As a result of the closure of his current account, several of the
rules and regulations allow that a check returned for
respondent's checks were subsequently dishonored and
insufficiency of funds or any reason of similar import, may be
because of this, the respondent was humiliated, embarrassed
subsequently recleared for one more time, subject to standard
Page 140 of 304
charges. Like the court a quo, the appellate court observed
that in several instances in previous years, petitioner bank
would inform the respondent when he incurred an overdraft
and allowed him to make a timely deposit to fund the checks
that were initially dishonored for insufficiency of funds.
However, on April 4, 1988, petitioner bank immediately closed
the respondent's account without even notifying him that he
had incurred an overdraft. Even when they had already closed
his account on April 4, 1988, petitioner bank still accepted the
deposit that the respondent made on April 5, 1988, supposedly
to cover his checks.  Petitioner bank sought the reconsideration of the said decision
Echoing the reasoning of the court a quo, the CA declared that
even as it may be conceded that petitioner bank had reserved
the right to close an account for repeated overdrafts by the
respondent, the exercise of that right must never be despotic
or arbitrary. That petitioner bank chose to close the account
outright and return the check, even after accepting a deposit
sufficient to cover the said check, is contrary to its duty to
handle the respondent's account with utmost fidelity. The
exercise of the right is not absolute and good faith, at least, is
required. The manner by which petitioner bank closed the
account of the respondent runs afoul of Article 19 of the Civil
Code which enjoins every person, in the exercise of his rights,
"to give every one his due, and observe honesty and good
faith."  drawn against insufficient funds or for any reason."
The CA concluded that petitioner bank's precipitate and
imprudent closure of the respondent's account had caused
him, a respected officer of several civic and banking
associations, serious anxiety and humiliation. It had, likewise,
tainted his credit standing. Consequently, the award of
damages is warranted. The CA, however, reduced the amount
of damages awarded by the court a quo as it found the same
to be excessive: 
We, however, find excessive the amount of damages awarded
by the RTC. In our view the reduced amount of P75,000.00 as
moral damages and P25,000.00 as exemplary damages are in
order. Awards for damages are not meant to enrich the
plaintiff-appellee [the respondent] at the expense of
defendants-appellants [the petitioners], but to obviate the
moral suffering he has undergone. The award is aimed at the
restoration, within limits possible, of the status quo ante, and
should be proportionate to the suffering inflicted.[5] 
The dispositive portion of the assailed CA decision reads: 
WHEREFORE, the decision appealed from is hereby AFFIRMED,
subject to the MODIFICATION that the award of moral
damages is reduced to P75,000.00 and the award of exemplary
damages reduced to P25,000.00. 
SO ORDERED.[6] 
but in the assailed Resolution dated January 17, 2003, the
appellate court denied its motion. Hence, the recourse to this
Court. 
Petitioner bank maintains that, in closing the account of the
respondent in the evening of April 4, 1988, it acted in good
faith and in accordance with the rules and regulations
governing the operation of a regular demand deposit which
reserves to the bank "the right to close an account if the
depositor frequently draws checks against insufficient funds
and/or uncollected deposits." The same rules and regulations
also provide that "the depositor is not entitled, as a matter of
right, to overdraw on this deposit and the bank reserves the
right at any time to return checks of the depositor which are
 
It cites the numerous instances that the respondent had
overdrawn his account and those instances where he
deliberately signed checks using a signature different from the
specimen on file. Based on these facts, petitioner bank was
constrained to close the respondent's account for improper and
irregular handling and returned his Check No. 2434886 which
was presented to the bank for payment on April 4, 1988. 
Petitioner bank further posits that there is no law or rule which
gives the respondent a legal right to make good his check or to
deposit the corresponding amount to cover said check within
24 hours after the same is dishonored or returned by the bank
for having been drawn against insufficient funds. It vigorously
denies having violated Article 19 of the Civil Code as it insists
that it acted in good faith and in accordance with the pertinent
banking rules and regulations. 
The petition is impressed with merit. 
Page 141 of 304
A perusal of the respective decisions of the court a quo and depositor which are drawn against insufficient funds or for any
the appellate court show that the award of damages in the other reason. 
respondent's favor was anchored mainly on Article 19 of the
Civil Code which, quoted anew below, reads: 

The facts, as found by the court a quo and the appellate court,

do not establish that, in the exercise of this right, petitioner
Art. 19. Every person must, in the exercise of his rights and in bank committed an abuse thereof. Specifically, the second and
the performance of his duties, act with justice, give everyone third elements for abuse of rights are not attendant in the
his due, and observe honesty and good faith.  present case. The evidence presented by petitioner bank
negates the existence of bad faith or malice on its part in
closing the respondent's account on April 4, 1988 because on
the said date the same was already overdrawn. The
The elements of abuse of rights are the following: (a) the
respondent issued four checks, all due on April 4, 1988,
existence of a legal right or duty; (b) which is exercised in bad
amounting to P7,410.00 when the balance of his current
faith; and (c) for the sole intent of prejudicing or injuring
account deposit was only P6,981.43. Thus, he incurred an
another.[7] Malice or bad faith is at the core of the said
overdraft of P428.57 which resulted in the dishonor of his
provision.[8] The law always presumes good faith and any
Check No. 2434886. Further, petitioner bank showed that in
person who seeks to be awarded damages due to acts of
1986, the current account of the respondent was overdrawn
another has the burden of proving that the latter acted in bad
156 times due to his issuance of checks against insufficient
faith or with ill-motive.[9] Good faith refers to the state of the
funds.[13] In 1987, the said account was overdrawn 117 times
mind which is manifested by the acts of the individual
for the same reason.[14] Again, in 1988, 26 times.[15] There
concerned. It consists of the intention to abstain from taking
were also several instances when the respondent issued
an unconscionable and unscrupulous advantage of another.
checks deliberately using a signature different from his
[10] Bad faith does not simply connote bad judgment or simple
specimen signature on file with petitioner bank.[16] All these
negligence, dishonest purpose or some moral obliquity and
circumstances taken together justified the petitioner bank's
conscious doing of a wrong, a breach of known duty due to
closure of the respondent's account on April 4, 1988 for
some motives or interest or ill-will that partakes of the nature
"improper handling." 
of fraud.[11] Malice connotes ill-will or spite and speaks not in
response to duty. It implies an intention to do ulterior and
unjustifiable harm. Malice is bad faith or bad motive.[12] 
It is observed that nowhere under its rules and regulations is
petitioner bank required to notify the respondent, or any
depositor for that matter, of the closure of the account for
Undoubtedly, petitioner bank has the right to close the account
frequently drawing checks against insufficient funds. No malice
of the respondent based on the following provisions of its
or bad faith could be imputed on petitioner bank for so acting
Rules and Regulations Governing the Establishment and
since the records bear out that the respondent had indeed
Operation of Regular Demand Deposits: 
been improperly and irregularly handling his account not just a
few times but hundreds of times. Under the circumstances,
petitioner bank could not be faulted for exercising its right in
10) The Bank reserves the right to close an account if the accordance with the express rules and regulations governing
depositor frequently draws checks against insufficient funds the current accounts of its depositors. Upon the opening of his
and/or uncollected deposits.  account, the respondent had agreed to be bound by these
terms and conditions. 

... 
Neither the fact that petitioner bank accepted the deposit
made by the respondent the day following the closure of his
account constitutes bad faith or malice on the part of petitioner
12) ...  bank. The same could be characterized as simple negligence
by its personnel. Said act, by itself, is not constitutive of bad
faith. 
However, it is clearly understood that the depositor is not
entitled, as a matter of right, to overdraw on this deposit and
the bank reserves the right at any time to return checks of the

Page 142 of 304

The respondent had thus failed to discharge his burden of
proving bad faith on the part of petitioner bank or that it was
motivated by ill-will or spite in closing his account on April 4,
1988 and in inadvertently accepting his deposit on April 5,
1988. 
Further, it has not been shown that these acts were done by
petitioner bank with the sole intention of prejudicing and
injuring the respondent. It is conceded that the respondent
may have suffered damages as a result of the closure of his
current account. However, there is a material distinction
between damages and injury. The Court had the occasion to
explain the distinction between damages and injury in this
wise:  CORONA, J.:
... Injury is the illegal invasion of a legal right; damage is the
loss, hurt or harm which results from the injury; and damages
are the recompense or compensation awarded for the damage
suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a
violation of a legal duty. In such cases, the consequences must
be borne by the injured person alone, the law affords no
remedy for damages resulting from an act which does not
amount to a legal injury or wrong. These situations are often
called damnum absque injuria. 
In other words, in order that a plaintiff may maintain an action
for the injuries of which he complains, he must establish that
such injuries resulted from a breach of duty which the
defendant owed to the plaintiff - a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. The
underlying basis for the award of tort damages is the premise
that the individual was injured in contemplation of law. Thus,
there must first be a breach of some duty and the imposition
of liability for that breach before damages may be awarded;
and the breach of such duty should be the proximate cause of
the injury.[17] 
Whatever damages the respondent may have suffered as a
consequence, e.g., dishonor of his other insufficiently funded
checks, would have to be borne by him alone. It was the
respondent's repeated improper and irregular handling of his
account which constrained petitioner bank to close the same in
accordance with the rules and regulations governing its
depositors' current accounts. The respondent's case is clearly
one of damnum absque injuria. 
WHEREFORE, the petition is GRANTED. The Decision dated
August 30, 2002 and Resolution dated January 17, 2003 of the
Court of Appeals in CA-G.R. CV No. 36627 are REVERSED
AND SET ASIDE. 
SO ORDERED. 
Uypitching vs Quiamco
ERNESTO RAMAS UYPITCHING and RAMAS
UYPITCHING SONS, INC., Petitioners, versus ERNESTO
QUIAMCO, Respondent.
 
Honeste vivere, non alterum laedere et jus suum cuique
tribuere. To live virtuously, not to injure others and to give
everyone his due. These supreme norms of justice are the
underlying principles of law and order in society. We reaffirm
them in this petition for review on certiorari assailing the July
26, 2000 decision[1] and October 18, 2000 resolution of the
Court of Appeals (CA) in CA-G.R. CV No. 47571. 
 
In 1982, respondent Ernesto C. Quiamco was approached by
Juan Davalan,[2] Josefino Gabutero and Raul Generoso to
amicably settle the civil aspect of a criminal case for robbery[3]
filed by Quiamco against them. They surrendered to him a red
Honda XL-100 motorcycle and a photocopy of its certificate of
registration. Respondent asked for the original certificate of
registration but the three accused never came to see him
again. Meanwhile, the motorcycle was parked in an open space
inside respondent's business establishment, Avesco-AVNE
Enterprises, where it was visible and accessible to the public. 
 
It turned out that, in October 1981, the motorcycle had been
sold on installment basis to Gabutero by petitioner Ramas
Uypitching Sons, Inc., a family-owned corporation managed by
petitioner Atty. Ernesto Ramas Uypitching. To secure its
payment, the motorcycle was mortgaged to petitioner
corporation.[4] 
 
When Gabutero could no longer pay the installments, Davalan
assumed the obligation and continued the payments. In
September 1982, however, Davalan stopped paying the
remaining installments and told petitioner corporation's
collector, Wilfredo Veraño, that the motorcycle had allegedly
been "taken by respondent's men." 
Page 143 of 304
  Petitioners appealed the RTC decision but the CA affirmed the
trial court's decision with modification, reducing the award of
Nine years later, on January 26, 1991, petitioner Uypitching, moral and exemplary damages to P300,000 and P100,000,
accompanied by policemen,[5] went to Avesco-AVNE respectively.[13] Petitioners sought reconsideration but it was
Enterprises to recover the motorcycle. The leader of the police denied. Thus, this petition. 
team, P/Lt. Arturo Vendiola, talked to the clerk in charge and
asked for respondent. While P/Lt. Vendiola and the clerk were  
talking, petitioner Uypitching paced back and forth inside the
establishment uttering "Quiamco is a thief of a motorcycle."  In their petition and memorandum, petitioners submit that the
sole (allegedly) issue to be resolved here is whether the filing
  of a complaint for qualified theft and/or violation of the Anti-
Fencing Law in the Office of the City Prosecutor warranted the
On learning that respondent was not in Avesco-AVNE award of moral damages, exemplary damages, attorney's fees
Enterprises, the policemen left to look for respondent in his and costs in favor of respondent. 
residence while petitioner Uypitching stayed in the
establishment to take photographs of the motorcycle. Unable  
to find respondent, the policemen went back to Avesco-AVNE
Enterprises and, on petitioner Uypitching's instruction and over Petitioners' suggestion is misleading. They were held liable for
the clerk's objection, took the motorcycle.  damages not only for instituting a groundless complaint
against respondent but also for making a slanderous remark
  and for taking the motorcycle from respondent's establishment
in an abusive manner. 
On February 18, 1991, petitioner Uypitching filed a criminal
complaint for qualified theft and/or violation of the Anti-  
Fencing Law[6] against respondent in the Office of the City
Prosecutor of Dumaguete City.[7] Respondent moved for Correctness of the Findings of the RTC and CA 
dismissal because the complaint did not charge an offense as
 
he had neither stolen nor bought the motorcycle. The Office of
the City Prosecutor dismissed the complaint[8] and denied
As they never questioned the findings of the RTC and CA that
petitioner Uypitching's subsequent motion for reconsideration. 
malice and ill will attended not only the public imputation of a
crime to respondent[14] but also the taking of the motorcycle,
 
petitioners were deemed to have accepted the correctness of
Respondent filed an action for damages against petitioners in such findings. This alone was sufficient to hold petitioners
the RTC of Dumaguete City, Negros Oriental, Branch 37.[9] He liable for damages to respondent. 
sought to hold the petitioners liable for the following: (1)
 
unlawful taking of the motorcycle; (2) utterance of a
defamatory remark (that respondent was a thief) and (3)
Nevertheless, to address petitioners' concern, we also find that
precipitate filing of a baseless and malicious complaint. These
the trial and appellate courts correctly ruled that the filing of
acts humiliated and embarrassed the respondent and injured
the complaint was tainted with malice and bad faith.
his reputation and integrity. 
Petitioners themselves in fact described their action as a
"precipitate act."[15] Petitioners were bent on portraying
 
respondent as a thief. In this connection, we quote with
On July 30, 1994, the trial court rendered a decision[10] approval the following findings of the RTC, as adopted by the
finding that petitioner Uypitching was motivated with malice CA: 
and ill will when he called respondent a thief, took the
 
motorcycle in an abusive manner and filed a baseless
complaint for qualified theft and/or violation of the Anti-
x x x There was malice or ill-will [in filing the complaint before
Fencing Law. Petitioners' acts were found to be contrary to
the City Prosecutor's Office] because Atty. Ernesto Ramas
Articles 19[11] and 20[12] of the Civil Code. Hence, the trial
Uypitching knew or ought to have known as he is a lawyer,
court held petitioners liable to respondent for P500,000 moral
that there was no probable cause at all for filing a criminal
damages, P200,000 exemplary damages and P50,000
complaint for qualified theft and fencing activity against
attorney's fees plus costs. 
[respondent]. Atty. Uypitching had no personal knowledge that
[respondent] stole the motorcycle in question. He was merely
 
told by his bill collector ([i.e.] the bill collector of Ramas
Uypitching Sons, Inc.)[,] Wilfredo Veraño[,] that Juan Dabalan

Page 144 of 304

will [no longer] pay the remaining installment(s) for the
motorcycle because the motorcycle was taken by the men of
[respondent]. It must be noted that the term used by Wilfredo
Veraño in informing Atty. Ernesto Ramas Uypitching of the
refusal of Juan Dabalan to pay for the remaining installment
was [']taken['], not [']unlawfully taken['] or 'stolen.' Yet,
despite the double hearsay, Atty. Ernesto Ramas Uypitching
not only executed the [complaint-affidavit] wherein he named
[respondent] as 'the suspect' of the stolen motorcycle but also
charged [respondent] of 'qualified theft and fencing activity'
before the City [Prosecutor's] Office of Dumaguete. The
absence of probable cause necessarily signifies the presence of
malice. What is deplorable in all these is that Juan Dabalan,
the owner of the motorcycle, did not accuse [respondent] or
the latter's men of stealing the motorcycle[,] much less
bother[ed] to file a case for qualified theft before the
authorities. That Atty. Uypitching's act in charging
[respondent] with qualified theft and fencing activity is tainted
with malice is also shown by his answer to the question of
Cupid Gonzaga[16] [during one of their conversations] - "why
should you still file a complaint? You have already recovered
the motorcycle..."[:] "Aron motagam ang kawatan ug motor."
("To teach a lesson to the thief of motorcycle.")[17] 
 
Moreover, the existence of malice, ill will or bad faith is a
factual matter. As a rule, findings of fact of the trial court,
when affirmed by the appellate court, are conclusive on this
Court. We see no compelling reason to reverse the findings of
the RTC and the CA.  prescribes that a person should not use his right unjustly or
 
Petitioners Abused Their Right of Recovery as
Mortgagee(s) 
 
Petitioners claim that they should not be held liable for
petitioner corporation's exercise of its right as seller-mortgagee
to recover the mortgaged vehicle preliminary to the
enforcement of its right to foreclose on the mortgage in case
of default. They are clearly mistaken. 
True, a mortgagee may take steps to recover the mortgaged
property to enable it to enforce or protect its foreclosure right
thereon. There is, however, a well-defined procedure for the
recovery of possession of mortgaged property: if a mortgagee
is unable to obtain possession of a mortgaged property for its
sale on foreclosure, he must bring a civil action either to
recover such possession as a preliminary step to the sale, or to
obtain judicial foreclosure.[18]  the purpose for which the right to prosecute a crime was
Petitioner corporation failed to bring the proper civil action
necessary to acquire legal possession of the motorcycle.
Instead, petitioner Uypitching descended on respondent's
establishment with his policemen and ordered the seizure of
the motorcycle without a search warrant or court order. Worse,
in the course of the illegal seizure of the motorcycle, petitioner
Uypitching even mouthed a slanderous statement. 
 
No doubt, petitioner corporation, acting through its co-
petitioner Uypitching, blatantly disregarded the lawful
procedure for the enforcement of its right, to the prejudice of
respondent. Petitioners' acts violated the law as well as public
morals, and transgressed the proper norms of human
relations. 
The basic principle of human relations, embodied in Article 19
of the Civil Code, provides: 
 
Art. 19. Every person must in the exercise of his rights and in
the performance of his duties, act with justice, give every one
his due, and observe honesty and good faith. 
 
Article 19, also known as the "principle of abuse of right,"
contrary to honesty and good faith, otherwise he opens himself
to liability.[19] It seeks to preclude the use of, or the tendency
to use, a legal right (or duty) as a means to unjust ends. 
 
There is an abuse of right when it is exercised solely to
prejudice or injure another.[20] The exercise of a right must
be in accordance with the purpose for which it was established
and must not be excessive or unduly harsh; there must be no
intention to harm another.[21] Otherwise, liability for damages
to the injured party will attach. 
In this case, the manner by which the motorcycle was taken at
petitioners' instance was not only attended by bad faith but
also contrary to the procedure laid down by law. Considered in
conjunction with the defamatory statement, petitioners'
exercise of the right to recover the mortgaged vehicle was
utterly prejudicial and injurious to respondent. On the other
hand, the precipitate act of filing an unfounded complaint
could not in any way be considered to be in accordance with
established. Thus, the totality of petitioners' actions showed a
calculated design to embarrass, humiliate and publicly ridicule
Page 145 of 304
respondent. Petitioners acted in an excessively harsh fashion
to the prejudice of respondent. Contrary to law, petitioners
willfully caused damage to respondent. Hence, they should
indemnify him.[22]  As the price of a proprietary share was around the P5 million
 
WHEREFORE, the petition is hereby DENIED. The July 26,
2000 decision and October 18, 2000 resolution of the Court of
Appeals in CA-G.R. CV No. 47571 are AFFIRMED. 
Triple costs against petitioners, considering that petitioner
Ernesto Ramas Uypitching is a lawyer and an officer of the
court, for his improper behavior.  voted upon. Subsequently, or on August 1, 1997, respondent
 
SO ORDERED. 
Cebu Country Club vs Elizagaque
CEBU COUNTRY CLUB, INC., SABINO R. DAPAT, RUBEN
D. ALMENDRAS, JULIUS Z. NERI, DOUGLAS L. LUYM,
CESAR T. LIBI, RAMONTITO* E. GARCIA and JOSE B.
SALA, Petitioners, versus RICARDO F. ELIZAGAQUE,
Respondent.
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on
Certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended, assailing the Decision[1] dated January 31, 2003
and Resolution dated October 2, 2003 of the Court of Appeals
in CA-G.R. CV No. 71506.
The facts are:
 
Cebu Country Club, Inc. (CCCI), petitioner, is a domestic
corporation operating as a non-profit and non-stock private
membership club, having its principal place of business in
Banilad, Cebu City. Petitioners herein are members of its Board
of Directors.
Sometime in 1987, San Miguel Corporation, a special company
proprietary member of CCCI, designated respondent Ricardo F.
Elizagaque, its Senior Vice President and Operations Manager
for the Visayas and Mindanao, as a special non-proprietary
member. The designation was thereafter approved by the
CCCI's Board of Directors.
In 1996, respondent filed with CCCI an application for
proprietary membership. The application was indorsed by
CCCI's two (2) proprietary members, namely: Edmundo T.
Misa and Silvano Ludo.
range, Benito Unchuan, then president of CCCI, offered to sell
respondent a share for only P3.5 million. Respondent,
however, purchased the share of a certain Dr. Butalid for only
P3 million. Consequently, on September 6, 1996, CCCI issued
Proprietary Ownership Certificate No. 1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of
the CCCI Board of Directors, action on respondent's application
for proprietary membership was deferred. In another Board
meeting held on July 30, 1997, respondent's application was
received a letter from Julius Z. Neri, CCCI's corporate
secretary, informing him that the Board disapproved his
application for proprietary membership.
On August 6, 1997, Edmundo T. Misa, on behalf of respondent,
wrote CCCI a letter of reconsideration. As CCCI did not answer,
respondent, on October 7, 1997, wrote another letter of
reconsideration. Still, CCCI kept silent. On November 5, 1997,
respondent again sent CCCI a letter inquiring whether any
member of the Board objected to his application. Again, CCCI
did not reply.
Consequently, on December 23, 1998, respondent filed with
the Regional Trial Court (RTC), Branch 71, Pasig City a
complaint for damages against petitioners, docketed as Civil
Case No. 67190.
After trial, the RTC rendered its Decision dated February 14,
2001 in favor of respondent, thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff:
1. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P2,340,000.00 as actual or compensatory
damages.
2. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P5,000,000.00 as moral damages.
3. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P1,000,000.00 as exemplary damages.
4. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P1,000,000.00 as and by way of attorney's fees
and P80,000.00 as litigation expenses.
5. Costs of suit.
Page 146 of 304

Counterclaims are hereby DISMISSED for lack of merit.
SO ORDERED.[2]
On appeal by petitioners, the Court of Appeals, in its Decision
dated January 31, 2003, affirmed the trial court's Decision with
modification, thus:
WHEREFORE, premises considered, the assailed Decision dated
February 14, 2001 of the Regional Trial Court, Branch 71,
Pasig City in Civil Case No. 67190 is hereby AFFIRMED with
MODIFICATION as follows:
1. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the amount of P2,000,000.00 as moral
damages;
2. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the amount of P1,000,000.00 as exemplary
damages;
3. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the mount of P500,000.00 as attorney's fees
and P50,000.00 as litigation expenses; and
4. Costs of the suit.
The counterclaims are DISMISSED for lack of merit.
SO ORDERED.[3]
 
On March 3, 2003, petitioners filed a motion for
reconsideration and motion for leave to set the motion for oral
arguments. In its Resolution[4] dated October 2, 2003, the
appellate court denied the motions for lack of merit.
Hence, the present petition.
The issue for our resolution is whether in disapproving
respondent's application for proprietary membership with
CCCI, petitioners are liable to respondent for damages, and if
so, whether their liability is joint and several.
Petitioners contend, inter alia, that the Court of Appeals erred
in awarding exorbitant damages to respondent despite the lack
of evidence that they acted in bad faith in disapproving the
latter's application; and in disregarding their defense of
damnum absque injuria.
For his part, respondent maintains that the petition lacks merit,
hence, should be denied.
CCCI's Articles of Incorporation provide in part:
SEVENTH: That this is a non-stock corporation and
membership therein as well as the right of participation in its
assets shall be limited to qualified persons who are duly
accredited owners of Proprietary Ownership Certificates issued
by the corporation in accordance with its By-Laws.
Corollary, Section 3, Article 1 of CCCI's Amended By-Laws
provides:
SECTION 3. HOW MEMBERS ARE ELECTED - The procedure for
the admission of new members of the Club shall be as follows:
(a) Any proprietary member, seconded by another voting
proprietary member, shall submit to the Secretary a written
proposal for the admission of a candidate to the "Eligible-for-
Membership List";
(b) Such proposal shall be posted by the Secretary for a period
of thirty (30) days on the Club bulletin board during which time
any member may interpose objections to the admission of the
applicant by communicating the same to the Board of
Directors;
(c) After the expiration of the aforesaid thirty (30) days, if no
objections have been filed or if there are, the Board considers
the objections unmeritorious, the candidate shall be qualified
for inclusion in the "Eligible-for-Membership List";
(d) Once included in the "Eligible-for-Membership List" and
after the candidate shall have acquired in his name a valid POC
duly recorded in the books of the corporation as his own, he
shall become a Proprietary Member, upon a non-refundable
admission fee of P1,000.00, provided that admission fees will
only be collected once from any person.
 
On March 1, 1978, Section 3(c) was amended to read as
follows:
(c) After the expiration of the aforesaid thirty (30) days, the
Board may, by unanimous vote of all directors present at a
regular or special meeting, approve the inclusion of the
candidate in the "Eligible-for-Membership List".
 
Page 147 of 304
 
 
As shown by the records, the Board adopted a secret balloting
known as the "black ball system" of voting wherein each
member will drop a ball in the ballot box. A white ball
represents conformity to the admission of an applicant, while a
black ball means disapproval. Pursuant to Section 3(c), as
amended, cited above, a unanimous vote of the directors is
required. When respondent's application for proprietary
membership was voted upon during the Board meeting on July
30, 1997, the ballot box contained one (1) black ball. Thus, for
lack of unanimity, his application was disapproved.
Obviously, the CCCI Board of Directors, under its Articles of
Incorporation, has the right to approve or disapprove an
application for proprietary membership. But such right should
not be exercised arbitrarily. Articles 19 and 21 of the Civil Code
on the Chapter on Human Relations provide restrictions, thus:
Article 19. Every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
Article 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.
 
In GF Equity, Inc. v. Valenzona,[5] we expounded Article 19
and correlated it with Article 21, thus:
This article, known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights but
also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore,
recognizes a primordial limitation on all rights; that in their
exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined
in Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct
for the government of human relations and for the
maintenance of social order, it does not provide a remedy for
its violation. Generally, an action for damages under either
Article 20 or Article 21 would be proper. (Emphasis in the
original)
In rejecting respondent's application for proprietary
membership, we find that petitioners violated the rules
governing human relations, the basic principles to be observed
for the rightful relationship between human beings and for the
stability of social order. The trial court and the Court of
Appeals aptly held that petitioners committed fraud and
evident bad faith in disapproving respondent's applications.
This is contrary to morals, good custom or public policy.
Hence, petitioners are liable for damages pursuant to Article 19
in relation to Article 21 of the same Code.
It bears stressing that the amendment to Section 3(c) of
CCCI's Amended By-Laws requiring the unanimous vote of the
directors present at a special or regular meeting was not
printed on the application form respondent filled and submitted
to CCCI. What was printed thereon was the original provision
of Section 3(c) which was silent on the required number of
votes needed for admission of an applicant as a proprietary
member.
 
 
Petitioners explained that the amendment was not printed on
the application form due to economic reasons. We find this
excuse flimsy and unconvincing. Such amendment, aside from
being extremely significant, was introduced way back in 1978
or almost twenty (20) years before respondent filed his
application. We cannot fathom why such a prestigious and
exclusive golf country club, like the CCCI, whose members are
all affluent, did not have enough money to cause the printing
of an updated application form.
It is thus clear that respondent was left groping in the dark
wondering why his application was disapproved. He was not
even informed that a unanimous vote of the Board members
was required. When he sent a letter for reconsideration and an
inquiry whether there was an objection to his application,
petitioners apparently ignored him. Certainly, respondent did
not deserve this kind of treatment. Having been designated by
San Miguel Corporation as a special non-proprietary member of
CCCI, he should have been treated by petitioners with courtesy
and civility. At the very least, they should have informed him
why his application was disapproved.
The exercise of a right, though legal by itself, must
nonetheless be in accordance with the proper norm. When the
right is exercised arbitrarily, unjustly or excessively and results
Page 148 of 304
in damage to another, a legal wrong is committed for which
the wrongdoer must be held responsible.[6] It bears reiterating Section 31 of the Corporation Code provides:
that the trial court and the Court of Appeals held that
petitioners' disapproval of respondent's application is  
characterized by bad faith.
SEC. 31. Liability of directors, trustees or officers. - Directors or
trustees who willfully and knowingly vote for or assent to
As to petitioners' reliance on the principle of damnum absque
patently unlawful acts of the corporation or who are guilty of
injuria or damage without injury, suffice it to state that the
gross negligence or bad faith in directing the affairs of the
same is misplaced. In Amonoy v. Gutierrez,[7] we held that
corporation or acquire any personal or pecuniary interest in
this principle does not apply when there is an abuse of a
conflict with their duty as such directors, or trustees shall be
person's right, as in this case.
liable jointly and severally for all damages resulting therefrom
suffered by the corporation, its stockholders or members and
As to the appellate court's award to respondent of moral
other persons. (Emphasis ours)
damages, we find the same in order. Under Article 2219 of the
New Civil Code, moral damages may be recovered, among
 
others, in acts and actions referred to in Article 21. We believe
respondent's testimony that he suffered mental anguish, social WHEREFORE, we DENY the petition. The challenged Decision
humiliation and wounded feelings as a result of the arbitrary and Resolution of the Court of Appeals in CA-G.R. CV No.
denial of his application. However, the amount of 71506 are AFFIRMED with modification in the sense that (a)
P2,000,000.00 is excessive. While there is no hard-and-fast the award of moral damages is reduced from P2,000,000.00 to
rule in determining what would be a fair and reasonable P50,000.00; (b) the award of exemplary damages is reduced
amount of moral damages, the same should not be palpably from P1,000,000.00 to P25,000.00; and (c) the award of
and scandalously excessive. Moral damages are not intended attorney's fees and litigation expenses is reduced from
to impose a penalty to the wrongdoer, neither to enrich the P500,000.00 and P50,000.00 to P50,000.00 and P25,000.00,
claimant at the expense of the defendant.[8] Taking into respectively.
consideration the attending circumstances here, we hold that
an award to respondent of P50,000.00, instead of
P2,000,000.00, as moral damages is reasonable. Costs against petitioners.

  SO ORDERED.

Anent the award of exemplary damages, Article 2229 allows it

Calatagan Golf Club vs Clemente
by way of example or correction for the public good. CALATAGAN GOLF CLUB, INC. Petitioner, versus SIXTO
Nonetheless, since exemplary damages are imposed not to CLEMENTE, JR., Respondent.
enrich one party or impoverish another but to serve as a
Tinga, J.:
deterrent against or as a negative incentive to curb socially
deleterious actions,[9] we reduce the amount from
Seeking the reversal of the Decision[1] dated 1 June 2004 of
P1,000,000.00 to P25,000.00 only.
the Court of Appeals in CA-G.R. SP No. 62331 and the
reinstatement of the Decision dated 15 November 2000 of the
On the matter of attorney's fees and litigation expenses, Article
Securities and Exchange Commission (SEC) in SEC Case No.
2208 of the same Code provides, among others, that attorney's
04-98-5954, petitioner Calatagan Golf Club, Inc. (Calatagan)
fees and expenses of litigation may be recovered in cases
filed this Rule 45 petition against respondent Sixto Clemente,
when exemplary damages are awarded and where the court
Jr. (Clemente).
deems it just and equitable that attorney's fees and expenses
of litigation should be recovered, as in this case. In any event,
The key facts are undisputed.
however, such award must be reasonable, just and equitable.
Thus, we reduce the amount of attorney's fees (P500,000.00)
Clemente applied to purchase one share of stock of Calatagan,
and litigation expenses (P50,000.00) to P50,000.00 and
indicating in his application for membership his mailing address
P25,000.00, respectively.
at "Phimco Industries, Inc. - P.O. Box 240, MCC," complete
residential address, office and residence telephone numbers,
Lastly, petitioners' argument that they could not be held jointly
as well as the company (Phimco) with which he was
and severally liable for damages because only one (1) voted
connected, Calatagan issued to him Certificate of Stock No. A-
for the disapproval of respondent's application lacks merit.
01295 on 2 May 1990 after paying P120,000.00 for the share.
[2]
Page 149 of 304

Calatagan charges monthly dues on its members to meet
expenses for general operations, as well as costs for upkeep
and improvement of the grounds and facilities. The provision
on monthly dues is incorporated in Calatagan's Articles of
Incorporation and By-Laws. It is also reproduced at the back of
each certificate of stock.[3] As reproduced in the dorsal side of
Certificate of Stock No. A-01295, the provision reads:
5. The owners of shares of stock shall be subject to the
payment of monthly dues in an amount as may be prescribed
in the by-laws or by the Board of Directors which shall in no
case be less that [sic] P50.00 to meet the expenses for the
general operations of the club, and the maintenance and
improvement of its premises and facilities, in addition to such
fees as may be charged for the actual use of the facilities x x x
When Clemente became a member the monthly charge stood
at P400.00. He paid P3,000.00 for his monthly dues on 21
March 1991 and another P5,400.00 on 9 December 1991. Then
he ceased paying the dues. At that point, his balance
amounted to P400.00.[4]
Ten (10) months later, Calatagan made the initial step to
collect Clemente's back accounts by sending a demand letter
dated 21 September 1992. It was followed by a second letter
dated 22 October 1992. Both letters were sent to Clemente's
mailing address as indicated in his membership application but
were sent back to sender with the postal note that the address
had been closed.[5]
Calatagan declared Clemente delinquent for having failed to
pay his monthly dues for more than sixty (60) days, specifically
P5,600.00 as of 31 October 1992. Calatagan also included
Clemente's name in the list of delinquent members posted on
the club's bulletin board. On 1 December 1992, Calatagan's
board of directors adopted a resolution authorizing the
foreclosure of shares of delinquent members, including
Clemente's; and the public auction of these shares.
On 7 December 1992, Calatagan sent a third and final letter to
Clemente, this time signed by its Corporate Secretary, Atty.
Benjamin Tanedo, Jr. The letter contains a warning that unless
Clemente settles his outstanding dues, his share would be
included among the delinquent shares to be sold at public
auction on 15 January 1993. Again, this letter was sent to
Clemente's mailing address that had already been closed.[6]
On 5 January 1993, a notice of auction sale was posted on the
Club's bulletin board, as well as on the club's premises. The
auction sale took place as scheduled on 15 January 1993, and
Clemente's share sold for P64,000.[7] According to the
Certificate of Sale issued by Calatagan after the sale,
Clemente's share was purchased by a Nestor A. Virata.[8] At
the time of the sale, Clemente's accrued monthly dues
amounted to P5,200.00.[9] A notice of foreclosure of
Clemente's share was published in the 26 May 1993 issue of
the Business World.[10]
Clemente learned of the sale of his share only in November of
1997.[11] He filed a claim with the Securities and Exchange
Commission (SEC) seeking the restoration of his shareholding
in Calatagan with damages.
On 15 November 2000, the SEC rendered a decision dismissing
Clemente's complaint. Citing Section 69 of the Corporation
Code which provides that the sale of shares at an auction sale
can only be questioned within six (6) months from the date of
sale, the SEC concluded that Clemente's claim, filed four (4)
years after the sale, had already prescribed. The SEC further
held that Calatagan had complied with all the requirements for
a valid sale of the subject share, Clemente having failed to
inform Calatagan that the address he had earlier supplied was
no longer his address. Clemente, the SEC ruled, had acted in
bad faith in assuming as he claimed that his non-payment of
monthly dues would merely render his share "inactive."
Clemente filed a petition for review with the Court of Appeals.
On 1 June 2004, the Court of Appeals promulgated a decision
reversing the SEC. The appellate court restored Clemente's one
share with a directive to Calatagan to issue in his a new share,
and awarded to Clemente a total of P400,000.00 in damages,
less the unpaid monthly dues of P5,200.00.
In rejecting the SEC's finding that the action had prescribed,
the Court of Appeals cited the SEC's own ruling in SEC Case
No. 4160, Caram v. Valley Golf Country Club, Inc., that Section
69 of the Corporation Code specifically refers to unpaid
subscriptions to capital stock, and not to any other debt of
stockholders. With the insinuation that Section 69 does not
apply to unpaid membership dues in non-stock corporations,
the appellate court employed Article 1140 of the Civil Code as
the proper rule of prescription. The provision sets the
prescription period of actions to recover movables at eight (8)
years.
The Court of Appeals also pointed out that since that
Calatagan's first two demand letters had been returned to it as
sender with the notation about the closure of the mailing
address, it very well knew that its third and final demand letter
also sent to the same mailing address would not be received
by Clemente. It noted the by-law requirement that within ten
(10) days after the Board has ordered the sale at auction of a
member's share of stock for indebtedness, the Corporate
Secretary shall notify the owner thereof and advise the
Membership Committee of such fact. Finally, the Court of
Appeals ratiocinated that "a person who is in danger of the
imminent loss of his property has the right to be notified and
be given the chance to prevent the loss."[12]
Page 150 of 304
Hence, the present appeal.
Calatagan maintains that the action of Clemente had
prescribed pursuant to Section 69 of the Corporation Code,
and that the requisite notices under both the law and the by-
laws had been rendered to Clemente.
Section 69 of the Code provides that an action to recover
delinquent stock sold must be commenced by the filing of a
complaint within six (6) months from the date of sale. As
correctly pointed out by the Court of Appeals, Section 69 is
part of Title VIII of the Code entitled "Stocks and
Stockholders" and refers specifically to unpaid subscriptions to
capital stock, the sale of which is governed by the immediately
preceding Section 68.
The Court of Appeals debunked both Calatagan's and the SEC's
reliance on Section 69 by citing another SEC ruling in the case
of Caram v. Valley Golf. In connection with Section 69,
Calatagan raises a peripheral point made in the SEC's Caram
ruling. In Caram, the SEC, using as take-off Section 6 of the
Corporation Code which refers to "such rights, privileges or
restrictions as may be stated in the articles of incorporation,"
pointed out that the Articles of Incorporation of Valley Golf
does not "impose any lien, liability or restriction on the Golf
Share [of Caram]," but only its (Valley Golf's) By-Laws does.
Here, Calatagan stresses that its own Articles of Incorporation
does provide that the monthly dues assessed on owners of
shares of the corporation, along with all other obligations of
the shareholders to the club, "shall constitute a first lien on the
shares... and in the event of delinquency such shares may be
ordered sold by the Board of Directors in the manner provided
in the By-Laws to satisfy said dues or other obligations of the
shareholders."[13] With its illative but incomprehensible logic,
Calatagan concludes that the prescriptive period under Section
69 should also apply to the sale of Clemente's share as the lien
that Calatagan perceives to be a restriction is stated in the
articles of incorporation and not only in the by-laws.
We remain unconvinced.
There are fundamental differences that defy equivalence or
even analogy between the sale of delinquent stock under
Section 68 and the sale that occurred in this case. At the root
of the sale of delinquent stock is the non-payment of the
subscription price for the share of stock itself. The stockholder
or subscriber has yet to fully pay for the value of the share or
shares subscribed. In this case, Clemente had already fully
paid for the share in Calatagan and no longer had any
outstanding obligation to deprive him of full title to his share.
Perhaps the analogy could have been made if Clemente had
not yet fully paid for his share and the non-stock corporation,
pursuant to an article or by-law provision designed to address
that situation, decided to sell such share as a consequence.
But that is not the case here, and there is no purpose for us to
apply Section 69 to the case at bar.
Calatagan argues in the alternative that Clemente's suit is
barred by Article 1146 of the Civil Code which establishes four
(4) years as the prescriptive period for actions based upon
injury to the rights of the plaintiff on the hypothesis that the
suit is purely for damages. As a second alternative still,
Calatagan posits that Clemente's action is governed by Article
1149 of the Civil Code which sets five (5) years as the period
of prescription for all other actions whose prescriptive periods
are not fixed in the Civil Code or in any other law. Neither
article is applicable but Article 1140 of the Civil Code which
provides that an action to recover movables shall prescribe in
eight (8) years. Calatagan's action is for the recovery of a
share of stock, plus damages.
Calatagan's advertence to the fact that the constitution of a
lien on the member's share by virtue of the explicit provisions
in its Articles of Incorporation and By-Laws is relevant but
ultimately of no help to its cause. Calatagan's Articles of
Incorporation states that the "dues, together with all other
obligations of members to the club, shall constitute a first lien
on the shares, second only to any lien in favor of the national
or local government, and in the event of delinquency such
shares may be ordered sold by the Board of Directors in the
manner provided in the By-Laws to satisfy said dues or other
obligations of the stockholders."[14] In turn, there are several
provisions in the By-laws that govern the payment of dues, the
lapse into delinquency of the member, and the constitution
and execution on the lien. We quote these provisions:
ARTICLE XII - MEMBER'S ACCOUNT
SEC. 31. (a) Billing Members, Posting of Delinquent Members -
The Treasurer shall bill al members monthly. As soon as
possible after the end of every month, a statement showing
the account of bill of a member for said month will be prepared
and sent to him. If the bill of any member remains unpaid by
the 20th of the month following that in which the bill was
incurred, the Treasurer shall notify him that if his bill is not
paid in full by the end of the succeeding month his name will
be posted as delinquent the following day at the Clubhouse
bulletin board. While posted, a member, the immediate
members of his family, and his guests, may not avail of the
facilities of the Club.
(b) Members on the delinquent list for more than 60 days shall
be reported to the Board and their shares or the shares of the
juridical entities they represent shall thereafter be ordered sold
by the Board at auction to satisfy the claims of the Club as
provided for in Section 32 hereon. A member may pay his
overdue account at any time before the auction sale.
Sec. 32. Lien on Shares; Sale of Share at Auction- The club
shall have a first lien on every share of stock to secure debts of
Page 151 of 304
the members to the Club. This lien shall be annotated on the
certificates of stock and may be enforced by the Club in the
following manner:
(a) Within ten (10) days after the Board has ordered the sale
at auction of a member's share of stock for indebtedness under
Section 31(b) hereof, the Secretary shall notify the owner
thereof, and shall advise the Membership Committee of such
fact.
(b) The Membership Committee shall then notify all applicants
on the Waiting List and all registered stockholders of the
availability of a share of stock for sale at auction at a specified
date, time and place, and shall post a notice to that effect in
the Club bulletin board for at least ten (10) days prior to the
auction sale.
(c) On the date and hour fixed, the Membership Committee
shall proceed with the auction by viva voce bidding and award
the sale of the share of stock to the highest bidder.
(d) The purchase price shall be paid by the winning bidder to
the Club within twenty-four (24) hours after the bidding. The
winning bidder or the representative in the case of a juridical
entity shall become a Regular Member upon payment of the
purchase price and issuance of a new stock certificate in his
name or in the name of the juridical entity he represents. The
proceeds of the sale shall be paid by the Club to the selling
stockholder after deducting his obligations to the Club.
(e) If no bids be received or if the winning bidder fails to pay
the amount of this bid within twenty-four (24) hours after the
bidding, the auction procedures may be repeated from time to
time at the discretion of the Membership Committee until the
share of stock be sold.
(f) If the proceeds from the sale of the share of stock are not
sufficient to pay in full the indebtedness of the member, the
member shall continue to be obligated to the Club for the
unpaid balance. If the member whose share of stock is sold
fails or refuse to surrender the stock certificate for cancellation,
cancellation shall be effected in the books of the Club based on
a record of the proceedings. Such cancellation shall render the
unsurrendered stock certificate null and void and notice to this
effect shall be duly published.
It is plain that Calatagan had endeavored to install a clear and
comprehensive procedure to govern the payment of monthly
dues, the declaration of a member as delinquent, and the
constitution of a lien on the shares and its eventual public sale
to answer for the member's debts. Under Section 91 of the
Corporation Code, membership in a non-stock corporation
"shall be terminated in the manner and for the causes provided
in the articles of incorporation or the by-laws." The By-law
provisions are elaborate in explaining the manner and the
causes for the termination of membership in Calatagan,
through the execution on the lien of the share. The Court is
satisfied that the By-Laws, as written, affords due protection to
the member by assuring that the member should be notified by
the Secretary of the looming execution sale that would
terminate membership in the club. In addition, the By-Laws
guarantees that after the execution sale, the proceeds of the
sale would be returned to the former member after deducting
the outstanding obligations. If followed to the letter, the
termination of membership under this procedure outlined in
the By-Laws would accord with substantial justice.
Yet, did Calatagan actually comply with the by-law provisions
when it sold Clemente's share? The appellate court's finding on
this point warrants our approving citation, thus:
In accordance with this provision, Calatagan sent the third and
final demand letter to Clemente on December 7, 1992. The
letter states that if the amount of delinquency is not paid, the
share will be included among the delinquent shares to be sold
at public auction. This letter was signed by Atty. Benjamin
Tanedo, Jr., Calatagan Golf's Corporate Secretary. It was again
sent to Clemente's mailing address - Phimco Industries Inc.,
P.O. Box 240, MCC Makati. As expected, it was returned
because the post office box had been closed.
Under the By-Laws, the Corporate Secretary is tasked to "give
or cause to be given, all notices required by law or by these
By-Laws. .. and ... keep a record of the addresses of all
stockholders. As quoted above, Sec. 32 (a) of the By-Laws
further provides that "within ten (10) days after the Board has
ordered the sale at auction of a member's share of stock for
indebtedness under Section 31 (b) hereof, the Secretary shall
notify the owner thereof and shall advise the Membership
Committee of such fact.," The records do not disclose what
report the Corporate Secretary transmitted to the Membership
Committee to comply with Section 32(a). Obviously, the reason
for this mandatory requirement is to give the Membership
Committee the opportunity to find out, before the share is
sold, if proper notice has been made to the shareholder
member.
We presume that the Corporate Secretary, as a lawyer is
knowledgeable on the law and on the standards of good faith
and fairness that the law requires. As custodian of corporate
records, he should also have known that the first two letters
sent to Clemente were returned because the P.O. Box had
been closed. Thus, we are surprised - given his knowledge of
the law and of corporate records - that he would send the third
and final letter - Clemente's last chance before his share is sold
and his membership lost - to the same P.O. Box that had been
closed.
Calatagan argues that it "exercised due diligence before the
foreclosure sale" and "sent several notices to Clemente's
Page 152 of 304
specified mailing address." We do not agree; we cannot label
as due diligence Calatagan's act of sending the December 7,
1992 letter to Clemente's mailing address knowing fully well
that the P.O. Box had been closed. Due diligence or good faith
imposes upon the Corporate Secretary - the chief repository of
all corporate records - the obligation to check Clemente's other
address which, under the By-Laws, have to be kept on file and
are in fact on file. One obvious purpose of giving the Corporate
Secretary the duty to keep the addresses of members on file is
specifically for matters of this kind, when the member cannot
be reached through his or her mailing address. Significantly,
the Corporate Secretary does not have to do the actual
verification of other addressees on record; a mere clerk can do
the very simple task of checking the files as in fact clerks
actually undertake these tasks. In fact, one telephone call to
Clemente's phone numbers on file would have alerted him of
his impending loss.
Ultimately, the petition must fail because Calatagan had failed
to duly observe both the spirit and letter of its own by-laws.
The by-law provisions was clearly conceived to afford due
notice to the delinquent member of the impending sale, and
not just to provide an intricate faá§ade that would facilitate
Calatagan's sale of the share. But then, the bad faith on
Calatagan's part is palpable. As found by the Court of Appeals,
Calatagan very well knew that Clemente's postal box to which
it sent its previous letters had already been closed, yet it
persisted in sending that final letter to the same postal box.
What for? Just for the exercise, it appears, as it had known
very well that the letter would never actually reach Clemente.
It is noteworthy that Clemente in his membership application
had provided his residential address along with his residence
and office telephone numbers. Nothing in Section 32 of
Calatagan's By-Laws requires that the final notice prior to the
sale be made solely through the member's mailing address.
Clemente cites our aphorism-like pronouncement in Rizal
Commercial Banking Corporation v. Court of Appeals[15] that
"[a] simple telephone call and an ounce of good faith x x x
could have prevented this present controversy." That
memorable observation is quite apt in this case.
Calatagan's bad faith and failure to observe its own By-Laws
had resulted not merely in the loss of Clemente's privilege to
play golf at its golf course and avail of its amenities, but also in
significant pecuniary damage to him. For that loss, the only
blame that could be thrown Clemente's way was his failure to
notify Calatagan of the closure of the P.O. Box. That lapse, if
we uphold Calatagan would cost Clemente a lot. But, in the
first place, does he deserve answerability for failing to notify
the club of the closure of the postal box? Indeed, knowing as
he did that Calatagan was in possession of his home address
as well as residence and office telephone numbers, he had
every reason to assume that the club would not be at a loss
should it need to contact him. In addition, according to
Clemente, he was not even aware of the closure of the postal
box, the maintenance of which was not his responsibility but
his employer Phimco's.
The utter bad faith exhibited by Calatagan brings into
operation Articles 19, 20 and 21 of the Civil Code,[16] under
the Chapter on Human Relations. These provisions, which the
Court of Appeals did apply, enunciate a general obligation
under law for every person to act fairly and in good faith
towards one another. A non-stock corporation like Calatagan is
not exempt from that obligation in its treatment of its
members. The obligation of a corporation to treat every person
honestly and in good faith extends even to its shareholders or
members, even if the latter find themselves contractually
bound to perform certain obligations to the corporation. A
certificate of stock cannot be a charter of dehumanization.
We turn to the matter of damages. The award of actual
damages is of course warranted since Clemente has sustained
pecuniary injury by reason of Calatagan's wrongful violation of
its own By-Laws. It would not be feasible to deliver Clemente's
original Certificate of Stock because it had already been
cancelled and a new one issued in its place in the name of the
purchases at the auction who was not impleaded in this case.
However, the Court of Appeals instead directed that Calatagan
to issue to Clemente a new certificate of stock. That sufficiently
redresses the actual damages sustained by Clemente. After all,
the certificate of stock is simply the evidence of the share.
The Court of Appeals also awarded Clemente P200,000.00 as
moral damages, P100,000.00 as exemplary damages, and
P100,000.00 as attorney's fees. We agree that the award of
such damages is warranted.
The Court of Appeals cited Calatagan for violation of Article 32
of the Civil Code, which allows recovery of damages from any
private individual "who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs" the right
"against deprivation of property without due process of laws."
The plain letter of the provision squarely entitles Clemente to
damages from Calatagan. Even without Article 32 itself,
Calatagan will still be bound to pay moral and exemplary
damages to Clemente. The latter was able to duly prove that
he had sustained mental anguish, serious anxiety and
wounded feelings by reason of Calatagan's acts, thereby
entitling him to moral damages under Article 2217 of the Civil
Code. Moreover, it is evident that Calatagan's bad faith as
exhibited in the
course of its corporate actions warrants correction for the
public good, thereby justifying exemplary damages under
Article 2229 of the Civil Code.
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals is AFFIRMED. Costs against petitioner.
Page 153 of 304

SO ORDERED.
Ardiente vs Javier
JOYCE V. ARDIENTE, Petitioner,
- versus-
SPOUSES JAVIER and MA. THERESA PASTORFIDE,
CAGAYAN DE ORO \VATER DISTRICT and GASPAR
GONZALEZ, * JR., Respondents
PERALTA, J.:
Before the Court is a petition for review on certiorari  under
Rule 45 of the Rules of Court seeking to reverse and set aside
the Decision 1 and Resolution 2 of the Court of Appeals (CA),
dated August 28, 2003 and December 17, 2003, respectively,
in CA-G.R. CV No. 73000. The CA Decision affirmed with
modification the August 15, 2001 Decision 3 of the Regional
Trial Court (RTC) of Cagayan de Oro City, Branch 24, while the
CA Resolution denied petitioner's Motion for Reconsideration. 
 
The facts, as summarized by the CA, are as follows:
 
[Herein petitioner] Joyce V. Ardiente and her husband Dr.
Roberto S. Ardiente are owners of a housing unit at Emily
Homes, Balulang, Cagayan de Oro City with a lot area of one
hundred fifty-three (153) square meters and covered by
Transfer Certificate of Title No. 69905.  COWD and its manager Gaspar Gonzalez] (Records, pp. 2-6).
On June 2, 1994, Joyce Ardiente entered into a Memorandum
of Agreement (Exh. “B”, pp. 470-473, Records) selling,
transferring and conveying in favor of [respondent] Ma.
Theresa Pastorfide all their rights and interests in the housing
unit at Emily Homes in consideration of P70,000.00. The
Memorandum of Agreement carries a stipulation: 
 
“4. That the water and power bill of the subject property shall
be for the account of the Second Party (Ma. Theresa
Pastorfide) effective June 1, 1994.” (Records, p. 47)  x x x x
vis-a-vis  Ma. Theresa Pastorfide's assumption of the payment
of the mortgage loan secured by Joyce Ardiente from the
National Home Mortgage (Records, Exh. “A”, pp. 468-469)  and observe honesty and good faith. Before disconnecting the
 
For four (4) years, Ma. Theresa's use of the water connection
in the name of Joyce Ardiente was never questioned nor
perturbed (T.S.N., October 31, 2000, pp. 7-8) until on March
12, 1999, without notice, the water connection of Ma. Theresa
was cut off. Proceeding to the office of the Cagayan de Oro
Water District (COWD) to complain, a certain Mrs. Madjos told
Ma. Theresa that she was delinquent for three (3) months
corresponding to the months of December 1998, January
1999, and February 1999. Ma. Theresa argued that the due
date of her payment was March 18, 1999 yet (T.S.N., October
31, 2000, pp. 11-12). Mrs. Madjos later told her that it was at
the instance of Joyce Ardiente that the water line was cut off
(T.S.N., February 5, 2001, p. 31). 
On March 15, 1999, Ma. Theresa paid the delinquent bills
(T.S.N., October 31, 2000, p. 12). On the same date, through
her lawyer, Ma. Theresa wrote a letter to the COWD to explain
who authorized the cutting of the water line (Records, p.
160). 
 
On March 18, 1999, COWD, through the general manager,
[respondent] Gaspar Gonzalez, Jr., answered the letter dated
March 15, 1999 and reiterated that it was at the instance of
Joyce Ardiente that the water line was cut off (Records, p.
161). 
 
Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide [and her
husband] filed [a] complaint for damages [against petitioner,
 
In the meantime, Ma. Theresa Pastorfide's water line was only
restored and reconnected when the [trial] court issued a writ
of preliminary mandatory injunction on December 14, 1999
(Records, p. 237). 4
 
After trial, the RTC rendered judgment holding as follows: 
 
 
In the exercise of their rights and performance of their duties,
defendants did not act with justice, gave plaintiffs their due
water supply, defendants COWD and Engr. Gaspar Gonzales
did not even send a disconnection notice to plaintiffs as
Page 154 of 304
testified to by Engr. Bienvenido Batar, in-charge of the On August 28, 2003, the CA promulgated its assailed Decision
Commercial Department of defendant COWD. There was one disposing as follows: 
though, but only three (3) days after the actual disconnection
on March 12, 1999. The due date for payment was yet on  
March 15. Clearly, they did not act with justice. Neither did
IN VIEW OF ALL THE FOREGOING, the appealed decision
they observe honesty. 
is AFFIRMED, with the modification that the awarded
  damages is reduced to P100,000.00 each for moral and
exemplary damages, while attorney's fees is lowered to
They should not have been swayed by the prodding of Joyce P25,000.00. Costs against appellants. 
V. Ardiente. They should have investigated first as to the
present ownership of the house. For doing the act because  
Ardiente told them, they were negligent. Defendant Joyce
SO ORDERED. 7
Ardiente should have requested before the cutting off of the
water supply, plaintiffs to pay. While she attempted to tell
 
plaintiffs but she did not have the patience of seeing them.
She knew that it was plaintiffs who had been using the water The CA ruled, with respect to petitioner, that she has a “legal
four (4) years ago and not hers. She should have been very duty to honor the possession and use of water line by Ma.
careful. x x x 5 Theresa Pastorfide pursuant to their Memorandum of
Agreement” and “that when [petitioner] applied for its
 
disconnection, she acted in bad faith causing prejudice and
[injury to] Ma. Theresa Pastorfide.” 8
The dispositive portion of the trial court's Decision reads, thus: 
 
 
As to COWD and Gonzalez, the CA held that they “failed to
WHEREFORE, premises considered, judgment is hereby
give a notice of disconnection and derelicted in reconnecting
rendered ordering defendants [Ardiente, COWD and Gonzalez]
the water line despite payment of the unpaid bills by the
to pay jointly and severally plaintiffs, the following sums: 
[respondent spouses Pastorfide].” 9
 
 
(a) P200,000.00 for moral damages; 
Petitioner, COWD and Gonzalez filed their respective Motions
  for Reconsideration, but these were denied by the CA in its
Resolution dated December 17, 2003. 
(b) 200,000.00 for exemplary damages; and 
 
 
COWD and Gonzalez filed a petition for review
(c) 50,000.00 for attorney's fee.  on certiorari  with this Court, which was docketed as G.R. No.
161802. However, based on technical grounds and on the
  finding that the CA did not commit any reversible error in its
assailed Decision, the petition was denied via a Resolution 10
The cross-claim of Cagayan de Oro Water District and Engr.
issued by this Court on March 24, 2004. COWD and Gonzalez
Gaspar Gonzales is hereby dismissed. The Court is not swayed
filed a motion for reconsideration, but the same was denied
that the cutting off of the water supply of plaintiffs was
with finality through this Court's Resolution 11 dated June 28,
because they were influenced by defendant Joyce Ardiente.
2004. 
They were negligent too for which they should be liable. 
 
 
Petitioner, on the other hand, timely filed the instant petition
SO ORDERED. 6
with the following Assignment of Errors: 
 
 
Petitioner, COWD and Gonzalez filed an appeal with the CA. 
7.1 HONORABLE COURT OF APPEALS (ALTHOUGH IT HAS
REDUCED THE LIABILITY INTO HALF) HAS STILL COMMITTED
 
GRAVE AND SERIOUS ERROR WHEN IT UPHELD THE JOINT
Page 155 of 304
AND SOLIDARY LIABILITY OF PETITIONER JOYCE V.
ARDIENTE WITH CAGAYAN DE ORO WATER DISTRICT
(COWD) AND ENGR. GASPAR D. GONZALES FOR THE
LATTER'S FAILURE TO SERVE NOTICE UPON RESPONDENTS
SPOUSES PASTORFIDE PRIOR TO THE ACTUAL
DISCONNECTION DESPITE EVIDENCE ADDUCED 
DURING TRIAL THAT EVEN WITHOUT PETITIONER'S
REQUEST, COWD WAS ALREADY SET TO EFFECT
DISCONNECTION OF RESPONDENTS' WATER SUPPLY DUE TO
NON-PAYMENT OF ACCOUNT FOR THREE (3) MONTHS.  presently assailed CA Decision final and executory insofar as
 
7.2 THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
AND SERIOUS ERROR WHEN IT RULED TOTALLY AGAINST
PETITIONER AND FAILED TO FIND THAT RESPONDENTS ARE
GUILTY OF CONTRIBUTORY NEGLIGENCE WHEN THEY FAILED
TO PAY THEIR WATER BILLS FOR THREE MONTHS AND TO
MOVE FOR THE TRANSFER OF THE COWD ACCOUNT IN
THEIR NAME, WHICH WAS A VIOLATION OF THEIR
MEMORANDUM OF AGREEMENT WITH PETITIONER JOYCE V.
ARDIENTE. RESPONDENTS LIKEWISE DELIBERATELY FAILED
TO EXERCISE DILIGENCE OF A GOOD FATHER OF THE
FAMILY TO MINIMIZE THE DAMAGE UNDER ART. 2203 OF
THE NEW CIVIL CODE.  Court subject only to certain exceptions, none of which is
 
7.3 THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
WHEN IT DISREGARDED THE FACT THAT RESPONDENT
SPOUSES PASTORFIDE ARE LIKEWISE BOUND TO OBSERVE
ARTICLE 19 OF THE NEW CIVIL CODE, i.e., IN THE EXERCISE
OF THEIR RIGHTS AND IN THE PERFORMANCE OF THEIR
DUTIES TO ACT WITH JUSTICE, GIVE EVERYONE HIS DUE
AND OBSERVE HONESTY AND GOOD FAITH. 
7.4 THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT GRANTED AN AWARD OF MORAL AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES AS AGAINST PETITIONER
ARDIENTE. 12
 
At the outset, the Court noticed that COWD and Gonzalez, who
were petitioner's co-defendants before the RTC and her co-
appellants in the CA, were impleaded as respondents in the
instant petition. This cannot be done. Being her co-parties
before the RTC and the CA, petitioner cannot, in the instant
petition for review on certiorari, make COWD and Gonzalez,
adversary parties. It is a grave mistake on the part of
petitioner's counsel to treat COWD and Gonzalez as
respondents. There is no basis to do so, considering that, in
the first place, there is no showing that petitioner filed a cross-
claim against COWD and Gonzalez. Under Section 2, Rule 9 of
the Rules of Court, a cross-claim which is not set up shall be
barred. Thus, for failing to set up a cross-claim against COWD
and Gonzalez before the RTC, petitioner is already barred from
doing so in the present petition. 
 
More importantly, as shown above, COWD and Gonzalez's
petition for review on certiorari filed with this Court was
already denied with finality on June 28, 2004, making the
COWD and Gonzalez are concerned. Thus, COWD and
Gonzalez are already precluded from participating in the
present petition. They cannot resurrect their lost cause by
filing pleadings this time as respondents but, nonetheless,
reiterating the same prayer in their previous pleadings filed
with the RTC and the CA. 
 
As to the merits of the instant petition, the Court likewise
noticed that the main issues raised by petitioner are factual
and it is settled that the resolution of factual issues is the
function of lower courts, whose findings on these matters are
received with respect and considered binding by the Supreme
present  in this instant petition.13 This is especially true when
the findings of the RTC have been affirmed by the CA as in this
case. 14
 
In any case, a perusal of the records at hand would readily
show that the instant petition lacks merit. 
Petitioner insists that she should not be held liable for the
disconnection of respondent spouses' water supply, because
she had no participation in the actual disconnection. However,
she admitted in the present petition that it was she who
requested COWD to disconnect the Spouses Pastorfide's water
supply. This was confirmed by COWD and Gonzalez in their
cross-claim against petitioner. While it was COWD which
actually discontinued respondent spouses' water supply, it
cannot be denied that it was through the instance of petitioner
that the Spouses Pastorfide's water supply was disconnected in
the first place. 
 
It is true that it is within petitioner's right to ask and even
require the Spouses Pastorfide to cause the transfer of the
former's account with COWD to the latter's name pursuant to
their Memorandum of Agreement. However, the remedy to
enforce such right is not to cause the disconnection of the
Page 156 of 304
respondent spouses' water supply. The exercise of a right must
be in  Article 20 or Article 21 would be proper.” The Court said:
accordance with the purpose for which it was established and
must not be excessive or unduly harsh; there must be no
intention to harm another. 15 Otherwise, liability for damages
to the injured party will attach. 16 In the present case,
intention to harm was evident on the part of petitioner when
she requested for the disconnection of respondent spouses’
water supply without warning or informing the latter of such
request. Petitioner claims that her request for disconnection
was based on the advise of COWD personnel and that her
intention was just to compel the Spouses Pastorfide to comply
with their agreement that petitioner's account with COWD be
transferred in respondent spouses' name. If such was
petitioner's only intention, then she should have advised
respondent spouses before or immediately after submitting her
request for disconnection, telling them that her request was
simply to force them to comply with their obligation under their
Memorandum of Agreement. But she did not. What made
matters worse is the fact that COWD undertook the
disconnection also without prior notice and even failed to
reconnect the Spouses Pastorfide’s water supply despite
payment of their arrears. There was clearly an abuse of right
on the part of petitioner, COWD and Gonzalez. They are guilty
of bad faith. 
 
The principle of abuse of rights as enshrined in Article 19 of
the Civil Code provides that every person must, in the exercise
of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good
faith. 
In this regard, the Court's ruling in Yuchengco v. The Manila
Chronicle Publishing Corporation 17 is instructive, to wit:  When a right is exercised in a manner which does not
 
x x x x  responsible. But while Article 19 lays down a rule of conduct
This provision of law sets standards which must be observed in
the exercise of one’s rights as well as in the performance of its
duties, to wit: to act with justice; give everyone his due; and
observe honesty and good faith. 
In Globe Mackay Cable and Radio Corporation v. Court of
Appeals, it was elucidated that while Article 19 “lays down a
rule of conduct for the government of human relations and for
the maintenance of social order, it does not provide a remedy
for its violation. Generally, an action for damages under either
 
One of the more notable innovations of the New Civil Code is
the codification of "some basic principles that are to be
observed for the rightful relationship between human beings
and for the stability of the social order." [REPORT ON THE
CODE COMMISSION ON THE PROPOSED CIVIL CODE OF THE
PHILIPPINES, p. 39]. The framers of the Code, seeking to
remedy the defect of the old Code which merely stated the
effects of the law, but failed to draw out its spirit, incorporated
certain fundamental precepts which were "designed to indicate
certain norms that spring from the fountain of good
conscience" and which were also meant to serve as "guides for
human conduct [that] should run as golden threads through
society, to the end that law may approach its supreme ideal,
which is the sway and dominance of justice." (Id.)  Foremost
among these principles is that pronounced in Article 19 x x x. 
 x x x x 
 
This article, known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights, but
also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore,
recognizes a primordial limitation on all rights; that in their
exercise, the norms of human conduct set forth in Article 19
must be observed. A right,  though by itself legal because
recognized or granted by law as such, may
nevertheless become the source of some illegality.
conform with the norms enshrined in Article 19 and
results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be held
for the government of human relations and for the
maintenance of social order, it does not provide a remedy for
its violation. Generally, an action for damages under either
Article 20 or Article 21 would be proper. 
Corollarilly, Article 20 provides that “every person who,
contrary to law, willfully or negligently causes damage to
another shall indemnify the latter for the same.” It speaks of
the general sanctions of all other provisions of law which do
not especially provide for its own sanction. When a right is
exercised in a manner which does not conform to the
standards set forth in the said provision and results in damage
Page 157 of 304
to another, a legal wrong is thereby committed for which the
wrongdoer must be responsible. Thus, if the provision does not
provide a remedy for its violation, an action for damages under
either Article 20 or Article 21 of the Civil Code would be
proper. 
The question of whether or not the principle of abuse of rights
has been violated resulting in damages under Article 20 or
other applicable provision of law, depends on the
circumstances of each case. x x x 18
To recapitulate, petitioner's acts which violated the
abovementioned provisions of law is her unjustifiable act of
having the respondent spouses' water supply disconnected,
coupled with her failure to warn or at least notify respondent
spouses of such intention. On the part of COWD and Gonzalez,
it is their failure to give prior notice of the impending
disconnection and their subsequent neglect to reconnect
respondent spouses' water supply despite the latter's
settlement of their delinquent account.  GARCIA, ANGELITA LHULLIER and SAMUEL NUNEZ,
On the basis of the foregoing, the Court finds no cogent
reason to depart from the ruling of both the RTC and the CA
that petitioner, COWD and Gonzalez are solidarily liable. 
 
The Spouses Pastorfide are entitled to moral damages based
on the provisions of Article 2219, 19 in connection with Articles
20 20 and 21 21 of the Civil Code.
As for exemplary damages, Article 2229 provides that
exemplary damages may be imposed by way of example or
correction for the public good. Nonetheless, exemplary
damages are imposed not to enrich one party or impoverish
another, but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions.22 In the instant
case, the Court agrees with the CA in sustaining the award of
exemplary damages, although it reduced the amount granted,
considering that respondent spouses were deprived of their
water supply for more than nine (9) months, and such
deprivation would have continued were it not for the relief
granted by the RTC.  Ronald Arcilla and Demetrio Balicha, to wit:
With respect to the award of attorney's fees, Article 2208 of
the Civil Code provides, among others, that such fees may be
recovered when exemplary damages are awarded, when the
defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his
interest, and where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiffs' plainly valid, just
and demandable claim. 
WHEREFORE, instant petition for review
on certiorari  is DENIED. The Decision and Resolution of the
Court of Appeals, dated August 28, 2003 and December 17,
2003, respectively, in CA-G.R. CV No. 73000 are AFFIRMED. 
SO ORDERED.
Sesbreno vs CA and VECO
RAUL H. SESBRENO, Petitioner, versus HON. COURT OF
APPEALS, HON. SILVESTRE BELLO III, NORBERTO
ABELLANA, RONALD ARCILLA, DEMETRIO BALICHA,
FELIPE CONSTANTINO, JUAN COROMINA, LORETO
DURANO, JESUS GARCIA, JOSE GARCIA, VICENTE
Respondents.
GARCIA, J.:
In this petition for review on certiorari, petitioner Raul H.
Sesbreño urges the Court to annul and set aside
the Decision dated June 27, 1991[1] of the Court of
Appeals in CA-G.R. SP No. 23832, as well as its Resolution
dated August 7, 1991, denying petitioner's motion for
reconsideration. Challenged by the petitioner in CA-G.R. SP No.
23832 were the letter-resolutions dated October 23, 1990 and
December 7, 1990, respectively, of then Justice Undersecretary
Silvestre Bello III and then Justice Secretary Franklin Drilon.
The decision under review[2] recites the factual milieu of the
case, as follows:
On June 5, 1989, petitioner filed criminal complaints before the
Office of the City Prosecutor of Cebu City against respondents
Jose Garcia (Jesus Garcia), Juan Coromina, Felipe Constantino,
I.S. No. 89-2642 for Trespass to Dwelling
I.S. No. 89-2643 for Coercion
Page 158 of 304
I.S. No. 89-2644 for Grave Threats
I.S. No. 89-2645 for Incriminatory Machinations
I.S. No. 89-2646 for Falsification thru use of
Falsified Documents
I.S. No. 89-2647 for Theft/Robbery
On June 21, 1989, petitioner filed against Norberto Abellana,
Juan Coromina, Ronald Arcilla, Felipe Constantino and
Demetrio Balicha a complaint for Attempted Estafa Thru
Falsification filed as I.S. No. 89-2937.
The following other complaints were filed by petitioner:
I.S. No. 89-3283 for Falsification thru the use of Falsified
Document against Samuel Nunez and Loreto Durano, filed on
July 10, 1989.
I.S. No. 89-3472 for Libel or Perjury against Samuel Nunez,
Loreto Durano, and Jesus Garcia filed on July 24, 1989.
I.S. No. 89-3483 for Attempted Estafa thru Falsification or
Reckless Negligence against Samuel Nunez, Loreto Durano and
Jesus Garcia filed on July 25, 1989.
I.S. No. 89-3507 for Incriminatory Machination against Samuel
Nunez, Loreto Durano, and Jesus Garcia filed on July 26, 1989.
I.S. No. 89-3711 for Theft of Electricity or Violation of B.P. Blg.
876 against Samuel Nunez, Loreto Durano, Jesus Garcia, Felipe
Constantino, Ronald Arcilla, Norberto Abellana and Demetrio
Balicha filed on August 7, 1989.
I.S. No. 89-4004 for Falsification against Loreto Durano,
Samuel Nunez, and Jesus Garcia filed on August 22, 1989.
I.S. No. 89-4148 for Theft of Electricity or Violation of B.P. Blg.
876, against Vicente Garcia, Jose Garcia, and Angelita Lhuillier.
On July 19, 1989, a letter-complaint, I.S. No. 89-3427-A for
violation of B.P. Blg. 876, signed by VECO's counsel, Samuel
Nunez, was filed against petitioner.
The criminal complaints I.S. Nos. 89-2642 up to 89-2647 were
dismissed by Asst. City Prosecutor Salvador Solima in a
resolution dated June 15, 1989. Petitioner sought a review by
the Department of Justice of said dismissal.
In a letter-resolution, dated June 5, 1990, Justice
Undersecretary Eduardo Montenegro denied the petition for
review of the resolution dismissing I.S. Nos. 89-2642 to 89-
2647, to wit:
"Summarizing we hold that:
(1) the investigating fiscal has not erred in finding that no
probable cause to warrant the filing of criminal charges against
the respondents for the crimes of Trespass to Dwelling, Unjust
Vexation and/or Coercion, Grave Threats, Incriminatory
Machinations, Falsification and/or Use of Falsified Document
and Theft or Robbery; and
(2) neither has he erred in not conducting a preliminary
investigation.
WHEREFORE, premises considered, the resolution of the 4th
Assistant City Fiscal of Cebu City, Salvador O. Solima,
dismissing your complaint, is hereby AFFIRMED and your
Petition for Review accordingly DENIED."
Justice Undersecretary Montenegro in his letter-resolution of
March 5, 1991, denied the motion for reconsideration of said
resolution of June 5, 1990.
The other criminal complaints, I.S. Nos. 89-2937, 89-3283, 89-
3472, 89-3483, 89-3507, and I.S. No. 89-3427-A were set for
preliminary (clarification) investigation on August 28, 1989,
and subpoenas were issued to bring the witnesses.
Page 159 of 304

Said other cases were initially jointly investigated by a panel
composed of Asst. City Prosecutors Anita de Castro, Bienvenido
Mabanto and Dario Rama. On July 26, 1989, however, Asst.
City Prosecutor Anita de Castro requested to be inhibited from
investigating the criminal complaints. Her request, although
initially denied, was subsequently approved.
During the preliminary (clarificatory) investigation held on
August 28, 1989, petitioner requested for the postponement of
the proceeding on the ground that his witnesses were not
available. Said request for postponement was denied and the
preliminary (clarificatory) investigation proceeded with the
active participation of the petitioner.
Requests for the inhibition of the two-member investigating
panel, Dario Rama and Mabanto Bienvenido, were made by
petitioner. The said requests for inhibition were denied in an
order issued by the City Prosecutor, Jufelinito Pareja.
On March 16, 1990, a joint resolution was issued by Asst. City
Prosecutors Bienvenido Mabanto and Dario Rama, approved by
First Assistant City Prosecutor Pedro Montecillo, dismissing I.S.
Nos. 89-2937, 89-3283, 89-3472, 89-3483, 89-3507, 89-3711,
89-4004 and 89-4148, and recommending the filing of an
information against petitioner for violation of B.P. Blg. 876, in
I.S. No. 89-3427-A, to wit:
"A simple reading of the records of these cases would show
the undeniable fact that Atty. Raul H. Sesbreño filed a volley of
complaints against the herein respondents as a result of the
inspection that was conducted by the personnel of the Visayan
Electric Company on his residence, which lead to the discovery
of a tampered electric meter and for which he as subsequently
charged before this Office. One need not stretch his
imagination to delve into the right reason why the series of
complaints were filed because the reason is very clear. The
Visayan Electric Company has sufficient proof that the electric
meter installed on the residence of Atty. Raul H. Sesbreño was
actually tampered with and since the tampering resulted in the
reduction of the registered power consumption, Raul H.
Sesbreño who is bound to benefit from the aforesaid reduction
is presumed to have done the tampering. With respect to the
charges filed by Atty. Sesbreño against Atty. Loreto M. Durano,
et als., it is the finding of the undersigned that these cases
were purposely filed to obtain leverage.
WHEREFORE, in view of the foregoing and finding a prima
facie case for the crime of Violation of Batas Pambansa Bilang
876, it is hereby most respectfully recommended that the
proper information be filed against Atty. Raul H. Sesbreño.
Finding however lack of prima facie case, I.S. Nos. 89-3927
(2937), 89-3283, 89-3472, 89-3483, 89-3507, 89-3711, 89-
4004 and 89-4148 are hereby ordered DISMISSED."
A petition for review, dated April 16, 1990, of said resolution of
March 16, 1990 was filed by petitioner with the Department of
Justice.
In a letter-resolution, dated October 23, 1990, Justice
Undersecretary Bello dismissed the petition for review, to wit:
"In the light of the foregoing, your contention that the
prosecutors were biased against you becomes untenable. Even
assuming that one of the respondents was the former superior
of some of the prosecutors, such fact alone does not make
them biased. To our mind, the issue of impartiality cannot be
viewed apart from the evidence. Otherwise stated, if it appears
that the findings of the prosecutor are supported by the
evidence, any allegation of partiality becomes stale.
Finally, you contend that I.S. No. 89-3427-A should have been
suspended due to the pendency of Civil Case Nos. CEB-8044
and CEB-7984. Considering that a resolution has in fact been
rendered in the criminal action by the fiscal, your petition for
suspension has become academic. Nevertheless, under the
rules, you may still file said petition 'in the same criminal action
at any time before the prosecution rests.'
WHEREFORE, premises considered, your appeal is hereby
dismissed."
Petitioner sought a reconsideration of said letter-resolution in
letters, dated November 5 and 8, 1990, addressed to Justice
Secretary Franklin Drilon, alleging that Undersecretary Bello
should have inhibited himself from resolving the former's
appeal and that the jurisdiction to investigate the complaints
was vested with the Ombudsman. The reconsideration
sought by petitioner was denied [by then Justice Secretary
Franklin Drilon] on December 7, 1990, to wit:
Page 160 of 304
"xxx                 xxx                 xxx
At any rate, the matter of whether Undersecretary Bello should
have inhibited himself is now academic considering that a
resolution has already been rendered. The important
consideration, at this point, is whether the resolution of your
appeal is in accordance with the law and the evidence. We
have gone over the records of the case and find no sufficient
reason to overturn our findings.
Finally, with respect to the issue of jurisdiction, we can only
quote from the ruling of the Court in Tijam vs. Sibonghanoy,
23 SCRA 29, thus:
'. . . a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or
failing to obtain such relief, repudiate or question that same
jurisdiction (Dean vs. Dean, 136 Or. 694 A.L.R. 79).
'In the case just cited, by way of explaining the rule, it was
further said that the question whether the court had
jurisdiction either of the subject-matter of the action or the
parties was not important in such cases because the party is
barred from such conduct not because the judgment or order
of the Court is valid and conclusive as an adjudication, but for
the reason that such practice cannot be tolerated obviously for
reasons of public policy.
'Furthermore, it has also been held that after voluntarily
submitting a cause and encountering an adverse decision on
the merits, it is too late for the loser to question the
jurisdiction or power of the court and in Littleton vs. Burges,
16 Wyo. 58, the Court said that 'it is not right for a party who
has affirmed and invoked the jurisdiction of the court in a
particular matter to secure an affirmative relief, to afterwards
deny the same jurisdiction to escape a penalty.'
WHEREFORE, premises considered, your motion for
reconsideration is hereby denied."  resolution of March 16, 1990 of the City Prosecutor's Office of
Petitioner elevated the matter to the Court of Appeals via a
petition for certiorari in CA-G.R. SP No. 23832, with prayer for
a temporary restraining order (TRO), which said court issued
on March 15, 1991. 
In the herein assailed Decision dated June 27, 1991, the
Court of Appeals partially granted petitioner's recourse thereto.
More specifically, said decision dispositively reads:
"WHEREFORE, the petition for certiorari of petitioner Raul
Sesbreño is PARTIALLY GRANTED. The letter-resolution of
October 23, 1990 of Justice Undersecretary Silvestre Bello and
the letter-resolution of December 7, 1990 of Justice Secretary
Franklin Drilon, insofar as the same sustained the joint
resolution of March 16, 1990 of the City Prosecutor's Office of
Cebu City, in respect to I.S. No. 89-2937, is SET ASIDE, and
I.S. No. 89-2937 is ordered REFERRED to the Ombudsman for
proper preliminary investigation/disposition, pursuant to law.
The rest of the said resolutions, affirming said joint resolution
in I.S. Nos. 89-3283, 89-3472, 89-3483, 89-3507, 89-3711, 89-
4004, and 89-4148, except I.S. No. 89-3427-A, which has been
ordered by the Secretary of Justice to be reinvestigated, is
UPHELD.
IT IS SO ORDERED". [3]
Petitioner moved for a reconsideration of the aforesaid
decision, which motion was similarly partially granted by the
Court of Appeals in its equally
challenged Resolution[4] dated August 7, 1991, as
follows:
PREMISES CONSIDERED, the motion for reconsideration of
petitioner is PARTIALLY GRANTED, and our decision of June
27, 1991, for reasons stated above, is AMENDED.
Accordingly, the dispositive portion of said decision should read
as follows:
"WHEREFORE, the petition for certiorari  of petitioner Raul
Sesbreño is PARTIALLY GRANTED. The letter-resolution of
October 23, 1990 of Justice Undersecretary Silvestre Bello and
the letter-resolution of December 7, 1990 of Justice Secretary
Franklin Drilon, insofar as the same sustained the joint
Cebu City, in respect to the related cases, I.S. No. 89-2937 and
I.S. No. 89-3483, and I.S. No. 89-3507, are SET ASIDE, and
I.S. No. 89-2937 and I.S. No. 89-3483 are ordered REFERRED
to the Ombudsman for proper preliminary
investigation/disposition, while I.S. 89-3507 is ordered
REFERRED to the City Prosecutor's Office of Cebu City, for the
Page 161 of 304
proper filing of an information with the metropolitan trial court
of Cebu City for preliminary determination.
The rest of the said letters-resolutions, affirming the joint
resolution in I.S. Nos. 89-3283, 89-3472, 89-3711, 89-4004,
89-4148, except I.S. No. 89-3427-A, which has been ordered
by the Secretary of Justice to be reinvestigated, is UPHELD."
IT IS SO ORDERED.
Still unsatisfied, petitioner is now with this Court via the instant
recourse for the purpose already announced at the threshold
hereof.
The petition was given due course and the parties required to
file their respective memoranda, to which they complied. 
After due deliberation, the Court finds no merit in the petition.
It must be noted that the subject matter of the Court of
Appeals' decision now subject of review is the October 23,
1990 Letter-Resolution[5] of the Department of Justice,
through then Undersecretary Silvestre Bello III, which included
only the following cases:
1.   I.S. No. 89-2937    -     Attempted Estafa Thru
Falsification 
     and/or Reckless Imprudence/Negligence
2.   I.S. No. 89-3283    -     Falsification Thru the Use of
Falsified Document
3.   I.S. No. 89-3472    -     Libel/Perjury
4.   I.S. No. 89-3483    -     Attempted Estafa Thru Reckless
Imprudence/Negligence
5.   I.S. No. 89-3507    -     Falsification or Incriminatory
     Machination
6.   I.S. No. 89-3711    -     Theft of Electricity - Batas
Pambansa Blg. 876
7.   I.S. No. 89-4004    -     Falsification or Incriminatory
Machination
8.   I.S. No. 89-4148    -     Theft of Electricity
9.   I.S. No. 89-3427-A  -     Violation of Batas Pambansa Blg.
876
Among the aforelisted nine (9) cases, the first eight (8) were
initiated by petitioner, while the last one, i.e., I.S. No. 89-
3427-A, for theft of electricity or violation of B.P. Blg. 876,
was filed by respondents against the petitioner. In their
Memorandum (at page 32 thereof),[6] respondents manifested
that they are abandoning I.S. No. 89-3427-A because,
according to them, petitioner was already convicted for
murder, which conviction is now pending review before this
Court. In view of such manifestation, all concerns raised by
petitioner pertaining to "unlawful search and seizure" of the
supposed defective electric power meter which was used as
evidence against him in I.S. No. 89-3427-A, had thereby
become moot and academic. The same is true as regards the
issue of "prejudicial question", raised in the same I.S. No. 89-
3427-A.
As we see it, despite the very lengthy discussion of petitioner's
arguments, the only valid and relevant issues left for this Court
to resolve are the following:
1. Disqualification or Inhibition of the handling prosecutors and
Undersecretary Bello III; and
2. Jurisdiction of the Ombudsman to conduct preliminary
investigation in I.S. No. 89-2937 and No. 89-3483, which are
the cases where Sgt. Demetrio Balicha is involved.
Page 162 of 304
All the rest of the arguments/issues raised by the petitioner in I.) Violations of RA 3019 (Anti-graft and Corrupt Practices Law)
his memorandum are irrelevant and have no bearing as amended.
whatsoever in the review of the assailed decision and
resolution of the appellate court.

II.) RA 1379 (Forfeiture of Illegally Acquired Wealth);

On petitioner's contention that the prosecutors were not

impartial and should have been disqualified from conducting
III.) Crimes by public officers or employees embraced in Ch. II,
preliminary investigation, the Court of Appeals found no factual
Sec.2 Title VII, Bk. II of the Revised Penal Code (Crimes
or legal basis to rule that then Undersecretary Bello III or then
committed by Public Officers) namely:
Secretary Drilon committed grave abuse of discretion.

a) Direct Bribery under Art. 210 as amended by BP 871, May

After thoroughly reviewing the entire records of the case vis-a-
29, 1985;
vis petitioner's arguments on the matter of inhibition or
disqualification of the investigating prosecutors, we find no
cogent reason to depart from the findings of then
Undersecretary Bello III and then Secretary Drilon. b) Indirect Bribery under Art. 211 as amended by BP 871, May
29, 1985;

Suffice it to state that in reviewing decisions of the Court of

Appeals in a petition for review on certiorari, the factual c) Qualified Bribery under Art. 211-A as amended by RA 7659,
findings of that court are generally binding upon this Court. Dec. 13, 1993;
When the administrative bodies' factual findings have been
affirmed by the Court of Appeals, said findings are generally
conclusive and binding upon this Court. For it is not the
function of this Court to analyze and weigh the parties' d) Corruption of public officials under Art. 212
evidence all over again except when there is serious ground to
where one or more of the accused are officials occupying the
believe that a possible miscarriage of justice would thereby
following positions in the government whether in a permanent,
result. Our task in an appeal by petition for review on certiorari
acting or interim capacity, at the time of the commission of the
is limited, as a jurisdictional matter, to reviewing errors of law
offense:
that might have been committed by the Court of Appeals[7].

1) Officials of the executive branch occupying the positions of

Petitioner has not convinced this Court that this case falls
regional director and higher, otherwise classified as Grade 27
under any of the exceptions to this settled rule. For instance,
and higher, of the Compensation and Position Classification Act
the denial of a motion for postponement by the investigating
of 1989 Republic Act No. 6758) specifically including:
prosecutor does not constitute partiality in favor of private
respondents which necessitates inhibition from investigating
the case. In like manner, absence, as here, of any clear
showing of impartiality or undue favors, the sole fact that one a) Provincial governors, vice-governors, members of the
of the respondents was the former superior of some of the sangguniang panlalawigan, provincial treasurers, assessors,
prosecutors does not necessarily become a basis for engineers and other provincial department heads;
disqualification.

b) City mayors, vice-mayors, members of the sangguniang

We shall now tackle the issue of jurisdiction of the panglungsod, city treasurers, assessors, engineers and other
Ombudsman to conduct preliminary investigation in cases department heads;
cognizable by the Sandiganbayan,[8] as follows: 

c) Officials of the diplomatic service occupying the position of

consul and higher;
Page 163 of 304

d) Philippine Army and Air force colonels, naval captains and all
officers of higher rank;
e) Officers of the PNP while occupying the position of
Provincial Director and those holding the rank of Senior
Superintendent or higher;
f) City and provincial prosecutors and their assistants; officials
and the prosecutors in the Office of the Ombudsman and
special prosecutor;
g) President, directors or trustees or managers of government
owned or controlled corporations, state universities or
educational institutions or foundations;
2) Members of Congress and Officials thereof classified as
Grade 27 and up under the Compensation and Classification
Act of 1989;
3) Members of the Judiciary without prejudice to the provision
of the Constitution;
4) Chairmen and members of Constitutional Commissions,
without prejudice to the provision of the Constitution;
5) All other national and local officials classified as Grade 27
and higher under the Compensation and Position Classification
Act of 1989.
IV.) Other offenses or felonies whether simple or complexed
with other crimes committed in relation to their office by the
public officials and employees mentioned above;
V.) Civil and Criminal Cases filed pursuant to and in connection
with EO 1, 2, 14 & 14-A issued in 1986
VI.) Petitions for issuance of Writ of mandamus,
prohibition, certiorari, habeas corpus, injunction and other
ancillary writs and processes in aid of its appellate jurisdiction;
Provided, jurisdiction is not exclusive of the Supreme Court
VII.) Petitions for Quo Warranto  arising or that may arise in
cases filed or that may be filed under EO 1, 2, 14 & 14- A
VIII.) OTHERS provided the accused belongs to Salary Grade
27 or higher:
a.) Violation of RA 6713- Code of Conduct and Ethical
Standards
b.) Violation of RA 7080- THE PLUNDER LAW
c.) Violation of RA 7659- The Heinous Crime Law
d.) RA 9160- Violation of The Anti-Money Laundering Law
when committed by a public officer
e.) PD 46 referred to as the gift-giving decree which makes it
punishable for any official or employee to receive directly or
indirectly and for the private person to give or offer to give any
gift, present or other valuable thing on any occasion including
Christmas, when such gift, present or valuable thing is given
by reason of his official position, regardless of whether or not
the same is for past favors or the giver hopes or expects to
receive a favor or better treatment in the future from the
public official or employee concerned in the discharge of his
official functions. Included within the prohibition is the
throwing of parties or entertainment in honor of the official or
employee or his immediate relatives.
f.) PD 749 which grants immunity from prosecution to any
person who voluntarily gives information about any violation of
Art.210, 211 or 212 of the Revised Penal Code, RA 3019,
Sec.345 of the National Internal Revenue Code, Sec. 3604 of
the Customs and Tariff Code and other provisions of the said
Codes penalizing abuse or dishonesty on the part of the public
officials concerned and other laws, rules and regulations
penalizing graft, corruption and other forms of official abuse
and who willingly testifies against the public official or
employee subject to certain conditions.
Page 164 of 304

It should be noted that private individuals can be sued in cases
before the Sandiganbayan if they are alleged to be in
conspiracy with the public officer.
On June 27, 1991, when the Court of Appeals passed upon this
issue of jurisdiction, the prevailing law vested the jurisdiction
to conduct preliminary investigation in I.S. Nos. 89-2937 and
89-3711 involving Sgt. Demetrio Balicha, a public officer with
salary grade below Salary Grade 27, upon the Ombudsman.
However, during the pendency of the case before this Court,
the power to conduct preliminary investigation reverted back
to the Office of the City Prosecutor by virtue an amendatory
law, Republic Act No. 7975 -- "An Act to Strengthen the
Functional and Structural Organization of the Sandiganbayan,
amending for that purpose Presidential Decree No. 1606, as
amended", which took effect on May 6, 1995.  land located at Barangay Bunga, Baybay, Leyte covered by
Because of this supervening legislation, the Court of Appeals
decision, which was then correct, now has to be accordingly
modified, whereby the joint resolution issued by Asst. City
Prosecutor Bienvenido Mabanto and Dario Rama, approved by
First Asst. City Prosecutor Pedro Montecillo, dismissing I.S.
Nos. 89-2937 and 89-3711, and affirmed by then Justice
Undersecretary Silvestre Bello III and then Secretary Franklin
Drilon, are now hereby reinstated and affirmed.
WHEREFORE, the petition is hereby DENIED. However, the
decision appealed from, due to supervening legislative
amendment on the jurisdiction of the Sandiganbayan, is
accordingly MODIFIED in that the joint resolution dismissing
I.S. Nos. 89-2937 and 89-3711 is likewise AFFIRMED. No costs.
SO ORDERED.
Saladaga vs Astorga
FLORENCIO A. SALADAGA, COMPLAINANT, VS. ATTY.
ARTURO B. ASTORGA, RESPONDENT.
[A.C. NO. 4728]
FLORENCIO A. SALADAGA, COMPLAINANT, VS. ATTY.
ARTURO B. ASTORGA, RESPONDENT.
LEONARDO-DE CASTRO, J.:
Membership in the legal profession is a high personal privilege
burdened with conditions,1 including continuing fidelity to the
law and constant possession of moral fitness.  Lawyers, as
guardians of the law, play a vital role in the preservation of
society, and a consequent obligation of lawyers is to maintain
the highest standards of ethical conduct.2 Failure to live by the
standards of the legal profession and to discharge the burden
of the privilege conferred on one as a member of the bar
warrant the suspension or revocation of that privilege.
The Factual Antecedents
 
Complainant Florencio A. Saladaga and respondent Atty. Arturo
B. Astorga entered into a “Deed of Sale with Right to
Repurchase” on December 2, 1981 where respondent sold
(with right of repurchase) to complainant a parcel of coconut
Transfer Certificate of Title (TCT) No. T-662 for P15,000.00.
Under the said deed, respondent represented that he has “the
perfect right to dispose as owner in fee simple” the subject
property and that the said property is “free from all liens and
encumbrances.”3 The deed also provided that respondent, as
vendor a retro, had two years within which to repurchase the
property, and if not repurchased within the said period, “the
parties shall renew [the] instrument/agreement.” 4
 
Respondent failed to exercise his right of repurchase within the
period provided in the deed, and no renewal of the contract
was made even after complainant sent respondent a final
demand dated May 10, 1984 for the latter to repurchase the
property.  Complainant remained in peaceful possession of the
property until December 1989 when he received letters from
the Rural Bank of Albuera (Leyte), Inc. (RBAI) informing him
that the property was mortgaged by respondent to RBAI, that
the bank had subsequently foreclosed on the property, and
that complainant should therefore vacate the property. 5
Complainant was alarmed and made an investigation.  He
learned the following:
(1) TCT No. T-662 was already cancelled by TCT No. T-3211 in
the name of Philippine National Bank (PNB) as early as
November 17, 1972 after foreclosure proceedings;
 
(2) TCT No. T-3211 was cancelled by TCT No. T-7235 in the
names of respondent and his wife on January 4, 1982 pursuant
to a deed of sale dated March 27, 1979 between PNB and
respondent;
Page 165 of 304
 
(3) Respondent mortgaged the subject property to RBAI on
March 14, 1984, RBAI foreclosed on the property, and
subsequently obtained TCT No. TP-10635 on March 27, 1991.6
 
Complainant was subsequently dispossessed of the property by
RBAI.7
Aggrieved, complainant instituted a criminal complaint for
estafa against respondent with the Office of the Provincial
Prosecutor of Leyte, docketed as I.S. No. 95-144.  The
Provincial Prosecutor of Leyte approved the Resolution8 dated
April 21, 1995 in I.S. No. 95-144 finding that “[t]he facts of
[the] case are sufficient to engender a well-founded belief that
Estafa x x x has been committed and that respondent herein is
probably guilty thereof.”9 Accordingly, an Information10 dated
January 8, 1996 was filed before the Municipal Trial Court
(MTC) of Baybay, Leyte, formally charging respondent with the
crime of estafa under Article 316, paragraphs 1 and 2 of the
Revised Penal Code,11 committed as follows:
On March 14, 1984, accused representing himself as the owner
of a parcel of land known as Lot No. 7661 of the Baybay
Cadastre, mortgaged the same to the Rural Bank of Albuera,
Albuera, Leyte, within the jurisdiction of this Honorable Court,
knowing fully well that the possessor and owner at that time
was private complainant Florencio Saladaga by virtue of a
Pacto de Retro Sale which accused executed in favor of private
complainant on 2ndDecember, 1981, without first
redeeming/repurchasing the same. [P]rivate complainant
knowing of accused[’s] unlawful act only on or about the last
week of February, 1991 when the rural bank dispossessed him
of the property, the mortgage having been foreclosed, private
complainant thereby suffered damages and was prejudiced by
accused[’s] unlawful transaction and misrepresentation.
 
The aforementioned estafa case against respondent was
docketed as Criminal Case No. 3112-A.
Complainant likewise instituted the instant administrative cases
against respondent by filing before this Court an Affidavit-
Complaint12 dated January 28, 1997 and Supplemental
Complaint13 dated February 27, 1997, which were docketed as
A.C. No. 4697 and A.C. No. 4728, respectively.  In both
complaints, complainant sought the disbarment of respondent.
The administrative cases were referred to the Integrated Bar of
the Philippines (IBP) for investigation, report and
recommendation.14
 
In his Consolidated Answer15 dated August 16, 2003 filed
before the IBP, respondent denied that his agreement with
complainant was a pacto de retro sale.  He claimed that it was
an equitable mortgage and that, if only complainant rendered
an accounting of his benefits from the produce of the land, the
total amount would have exceeded P15,000.00.
Report and Recommendation of the Investigating
Commissioner and Resolution of the IBP Board of
Governors
 
In a Report and Recommendation16 dated April 29, 2005, the
Investigating Commissioner of the IBP’s Commission on Bar
Discipline found that respondent was in bad faith when he
dealt with complainant and executed the “Deed of Sale with
Right to Repurchase” but later on claimed that the agreement
was one of equitable mortgage.  Respondent was also guilty of
deceit or fraud when he represented in the “Deed of Sale with
Right to Repurchase” dated December 2, 1981 that the
property was covered by TCT No. T-662, even giving
complainant the owner’s copy of the said certificate of title,
when the said TCT had already been cancelled on November
17, 1972 by TCT No. T-3211 in the name of Philippine National
Bank (PNB).  Respondent made matters even worse, when he
had TCT No. T-3211 cancelled with the issuance of TCT No. T-
7235 under his and his wife’s name on January 4, 1982
without informing complainant.  This was compounded by
respondent’s subsequent mortgage of the property to RBAI,
which led to the acquisition of the property by RBAI and the
dispossession thereof of complainant.  Thus, the Investigating
Commissioner recommended that respondent be (1)
suspended from the practice of law for one year, with warning
that a similar misdeed in the future shall be dealt with more
severity, and (2) ordered to return the sum of P15,000.00, the
amount he received as consideration for the pacto de retro
sale, with interest at the legal rate.
Considering respondent’s “commission of unlawful acts,
especially crimes involving moral turpitude, acts of dishonesty,
grossly immoral conduct and deceit,” the IBP Board of
Governors adopted and approved the Investigating
Commissioner’s Report and Recommendation with modification
as follows: respondent is (1) suspended from the practice of
law for two years, with warning that a similar misdeed in the
future shall be dealt with more severity, and (2) ordered to
Page 166 of 304
return the sum of P15,000.00 received in consideration of the
pacto de retro sale, with legal interest.17
 
The Court’s Ruling
The Court agrees with the recommendation of the IBP Board of
Governors to suspend respondent from the practice of law for
two years, but it refrains from ordering respondent to return
the P15,000.00 consideration, plus interest.
Respondent does not deny executing the “Deed of Sale with
Right to Repurchase” dated December 2, 1981 in favor of
complainant.  However, respondent insists that the deed is not
one of sale with pacto de retro, but one of equitable mortgage.
Thus, respondent argues that he still had the legal right to
mortgage the subject property to other persons.  Respondent
additionally asserts that complainant should render an
accounting of the produce the latter had collected from the
said property, which would already exceed the P15,000.00
consideration stated in the deed.
There is no merit in respondent’s defense.
 
Regardless of whether the written contract between
respondent and complainant is actually one of sale with pacto
de retro or of equitable mortgage, respondent’s actuations in
his transaction with complainant, as well as in the present
administrative cases, clearly show a disregard for the highest
standards of legal proficiency, morality, honesty, integrity, and
fair dealing required from lawyers, for which respondent
should be held administratively liable.
When respondent was admitted to the legal profession, he
took an oath where he undertook to “obey the laws,” “do no
falsehood,” and “conduct [him]self as a lawyer according to
the best of [his] knowledge and discretion.” 18 He gravely
violated his oath.
 
The Investigating Commissioner correctly found, and the IBP
Board of Governors rightly agreed, that respondent caused the
ambiguity or vagueness in the “Deed of Sale with Right to
Repurchase” as he was the one who prepared or drafted the
said instrument.  Respondent could have simply denominated
the instrument as a deed of mortgage and referred to himself
and complainant as “mortgagor” and “mortgagee,”
respectively, rather than as “vendor a retro” and “vendee a
retro.” If only respondent had been more circumspect and
careful in the drafting and preparation of the deed, then the
controversy between him and complainant could have been
avoided or, at the very least, easily resolved.  His imprecise
and misleading wording of the said deed on its face betrayed
lack of legal competence on his part.  He thereby fell short of
his oath to “conduct [him]self as a lawyer according to the
best of [his] knowledge and discretion.”
More significantly, respondent transgressed the laws and the
fundamental tenet of human relations as embodied in Article
19 of the Civil Code:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
Respondent, as owner of the property, had the right to
mortgage it to complainant but, as a lawyer, he should have
seen to it that his agreement with complainant is embodied in
an instrument that clearly expresses the intent of the
contracting parties.  A lawyer who drafts a contract must see
to it that the agreement faithfully and clearly reflects the
intention of the contracting parties.  Otherwise, the respective
rights and obligations of the contracting parties will be
uncertain, which opens the door to legal disputes between the
said parties.  Indeed, the uncertainty caused by respondent’s
poor formulation of the “Deed of Sale with Right to
Repurchase” was a significant factor in the legal controversy
between respondent and complainant.  Such poor formulation
reflects at the very least negatively on the legal competence of
respondent.
Under Section 63 of the Land Registration Act,19 the law in
effect at the time the PNB acquired the subject property and
obtained TCT No. T-3211 in its name in 1972, where a decree
in favor of a purchaser who acquires mortgaged property in
foreclosure proceedings becomes final, such purchaser
becomes entitled to the issuance of a new certificate of title in
his name and a memorandum thereof shall be “indorsed upon
the mortgagor’s original certificate.”20 TCT No. T-662, which
respondent gave complainant when they entered into the
“Deed of Sale with Right to Repurchase” dated December 2,
1981, does not bear such memorandum but only a
memorandum on the mortgage of the property to PNB in 1963
and the subsequent amendment of the mortgage.
 
Page 167 of 304
Respondent dealt with complainant with bad faith, falsehood,
and deceit when he entered into the “Deed of Sale with Right
to Repurchase” dated December 2, 1981 with the latter.  He
made it appear that the property was covered by TCT No. T-
662 under his name, even giving complainant the owner’s copy
of the said certificate of title, when the truth is that the said
TCT had already been cancelled some nine years earlier by
TCT No. T-3211 in the name of PNB.  He did not even care to
correct the wrong statement in the deed when he was
subsequently issued a new copy of TCT No. T-7235 on January
4, 1982,21 or barely a month after the execution of the said
deed.  All told, respondent clearly committed an act of gross
dishonesty and deceit against complainant.
 
Canon 1 and Rule 1.01 of the Code of Professional
Responsibility provide:
CANON 1 – A lawyer shall uphold the constitution, obey the
laws of the land and promote respect for law and legal
processes.
 
Rule 1.01 – A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
 
Under Canon 1, a lawyer is not only mandated to personally
obey the laws and the legal processes, he is moreover
expected to inspire respect and obedience thereto.  On the
other hand, Rule 1.01 states the norm of conduct that is
expected of all lawyers.22
Any act or omission that is contrary to, prohibited or
unauthorized by, in defiance of, disobedient to, or disregards
the law is “unlawful.”  “Unlawful” conduct does not necessarily
imply the element of criminality although the concept is broad
enough to include such element.23
To be “dishonest” means the disposition to lie, cheat, deceive,
defraud or betray; be untrustworthy; lacking in integrity,
honesty, probity, integrity in principle, fairness and
straightforwardness.  On the other hand, conduct that is
“deceitful” means as follows:
[Having] the proclivity for fraudulent and deceptive
misrepresentation, artifice or device that is used upon another
who is ignorant of the true facts, to the prejudice and damage
of the party imposed upon. In order to be deceitful, the person
must either have knowledge of the falsity or acted in reckless
and conscious ignorance thereof, especially if the parties are
not on equal terms, and was done with the intent that the
aggrieved party act thereon, and the latter indeed acted in
reliance of the false statement or deed in the manner
contemplated to his injury.24
 
The actions of respondent in connection with the execution of
the “Deed of Sale with Right to Repurchase” clearly fall within
the concept of unlawful, dishonest, and deceitful conduct.
They violate Article 19 of the Civil Code.  They show a
disregard for Section 63 of the Land Registration Act.  They
also reflect bad faith, dishonesty, and deceit on respondent’s
part.  Thus, respondent deserves to be sanctioned.
 
Respondent’s breach of his oath, violation of the laws, lack of
good faith, and dishonesty are compounded by his gross
disregard of this Court’s directives, as well as the orders of the
IBP’s Investigating Commissioner (who was acting as an agent
of this Court pursuant to the Court’s referral of these cases to
the IBP for investigation, report and recommendation), which
caused delay in the resolution of these administrative cases.
 
In particular, the Court required respondent to comment on
complainant’s Affidavit-Complaint in A.C. No. 4697 and
Supplemental Complaint in A.C. No. 4728 on March 12, 1997
and June 25, 1997, respectively.25  While he requested for
several extensions of time within which to submit his
comment, no such comment was submitted prompting the
Court to require him in a Resolution dated February 4, 1998 to
(1) show cause why he should not be disciplinarily dealt with
or held in contempt for such failure, and (2) submit the
consolidated comment.26 Respondent neither showed cause
why he should not be disciplinarily dealt with or held in
contempt for such failure, nor submitted the consolidated
comment.
When these cases were referred to the IBP and during the
proceedings before the IBP’s Investigating Commissioner,
respondent was again required several times to submit his
consolidated answer.  He only complied on August 28, 2003, or
more than six years after this Court originally required him to
do so.  The Investigating Commissioner also directed the
parties to submit their respective position papers.  Despite
having been given several opportunities to submit the same,
respondent did not file any position paper.27
Page 168 of 304
Respondent’s disregard of the directives of this Court and of
the Investigating Commissioner, which caused undue delay in
these administrative cases, contravenes the following
provisions of the Code of Professional Responsibility:
CANON 11 – A lawyer shall observe and maintain the respect
due to the courts and to judicial officers and should insist on
similar conduct by others.
 
xxxx
CANON 12 – A lawyer shall exert every effort and consider it
his duty to assist in the speedy and efficient administration of
justice.
 
xxxx
Rule 12.03 – A lawyer shall not, after obtaining extensions of
time to file pleadings, memoranda or briefs, let the period
lapse without submitting the same or offering an explanation
for his failure to do so.
Rule 12.04 – A lawyer shall not unduly delay a case, impede
the execution of a judgment or misuse court processes.
 
Respondent’s infractions are aggravated by the fact that he
has already been imposed a disciplinary sanction before.  In
Nuñez v. Atty. Astorga,28 respondent was held liable for
conduct unbecoming an attorney for which he was fined
P2,000.00.
 
Given the foregoing, the suspension of respondent from the
practice of law for two years, as recommended by the IBP
Board of Governors, is proper.
 
The Court, however, will not adopt the recommendation of the
IBP to order respondent to return the sum of P15,000.00 he
received from complainant under the “Deed of Sale with Right
to Repurchase.”  This is a civil liability best determined and
awarded in a civil case rather than the present administrative
cases.
 
In Roa v. Moreno,29 the Court pronounced that “[i]n
disciplinary proceedings against lawyers, the only issue is
whether the officer of the court is still fit to be allowed to
continue as a member of the Bar.  Our only concern is the
determination of respondent’s administrative liability.  Our
findings have no material bearing on other judicial action which
the parties may choose to file against each other.”  While the
respondent lawyer’s wrongful actuations may give rise at the
same time to criminal, civil, and administrative liabilities, each
must be determined in the appropriate case; and every case
must be resolved in accordance with the facts and the law
applicable and the quantum of proof required in each.  Section
5,30 in relation to Sections 131 and 2,32 Rule 133 of the Rules of
Court states that in administrative cases, such as the ones at
bar, only substantial evidence is required, not proof beyond
reasonable doubt as in criminal cases, or preponderance of
evidence as in civil cases.  Substantial evidence is that amount
of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.33
The Court notes that based on the same factual antecedents
as the present administrative cases, complainant instituted a
criminal case for estafa against respondent, docketed as
Criminal Case No. 3112-A, before the MTC.  When a criminal
action is instituted, the civil action for the recovery of civil
liability arising from the offense charged shall be deemed
instituted with the criminal action unless the offended party
waives the civil action, reserves the right to institute it
separately or institutes the civil action prior to the criminal
action.34 Unless the complainant waived the civil action,
reserved the right to institute it separately, or instituted the
civil action prior to the criminal action, then his civil action for
the recovery of civil liability arising from the estafa committed
by respondent is deemed instituted with Criminal Case No.
3112-A.  The civil liability that complainant may recover in
Criminal Case No. 3112-A includes restitution; reparation of the
damage caused him; and/or indemnification for consequential
damages,35]which may already cover the P15,000.00
consideration complainant had paid for the subject property.
 
WHEREFORE, respondent is hereby found GUILTY of the
following: breach of the Lawyer’s Oath; unlawful, dishonest,
and deceitful conduct; and disrespect for the Court and
causing undue delay of these cases, for which he
is SUSPENDED from the practice of law for a period of two
(2) years, reckoned from receipt of this Decision,
with WARNING that a similar misconduct in the future shall
be dealt with more severely.
Page 169 of 304
 
Let a copy of this Decision be furnished the Office of the Bar
Confidant and the Integrated Bar of the Philippines for their
information and guidance. The Court Administrator is directed
to circulate this Decision to all courts in the country.
 
SO ORDERED.
Coca Cola Bottlers vs SPS Bernardo
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner,
vs.
SPOUSES JOSE R. BERNARDO AND LILIBETH R.
BERNARDO, DOING BUSINESS UNDER THE NAME AND
STYLE "JOLLY BEVERAGE ENTERPRISES," Respondents.
SERENO,  CJ:
 
This is a Petition for Review1 filed by Coca-Cola Bottlers
Philippines, Inc. (petitioner), from the Court of Appeals (CA)
Decision2 and Resolution3 in CA-G.R. CV No. 91096. The CA
affirmed in toto the Decision4 of Regional Trial Court (RTC)
Branch 88 in Quezon City in Civil Case No. Q-00-42320.
 
This case originated from the claim for damages filed by
respondent spouses Jose and Lilibeth Bernardo (respondents)
against petitioner for violation of Articles 19, 20, 21, and 28 of
the Civil Code. The RTC found petitioner liable to pay
respondents temperate damages in the amount of P500,000
for loss of goodwill, to be offset against the latter's outstanding
balance for deliveries in the amount of P449,154. The trial
court ordered petitioner to pay P50,000 as moral damages,
P20,000 as exemplary damages, and P100,000 as attorney's
fees. 
 
Petitioner asserts that the Complaint had no basis, and that the
trial court had no jurisdiction to award temperate damages in
an amount equivalent to the outstanding obligation of
respondents. It prays not only for the· reversal of the assailed
judgments, but also for an award of moral and exemplary
damages, as well as attorney's fees and litigation expenses. It
also asks that respondents be ordered to pay P449,154 plus
legal interest from the date of demand until full payment. 5
 
We deny the Petition.
 
FACTS
 
Petitioner is a domestic corporation engaged in the large-scale
manufacture, sale, and distribution of beverages around the
country. 6 On the other hand, respondents, doing business
under the name "Jolly Beverage Enterprises," are wholesalers
of softdrinks in Quezon City, particularly in the vicinities of
Bulacan Street, V. Luna Road, Katipunan Avenue, and Timog
Avenue.7
 
The business relationship between the paiiies commenced in
1987 when petitioner designated respondents as its
distributor. 8 On 22 March 1994, the parties formally entered
into an exclusive dealership contract for three years. 9 Under
the Agreement, 10 petitioner would extend developmental
assistance to respondents in the form of cash assistance and
trade discount incentives. For their part, respondents
undertook to sell petitioner's products exclusively, meet the
sales quota of 7,000 cases per month, and assist petitioner in
its marketing efforts. 11
 
On 1 March 1997, the parties executed a similar agreement for
another two years, or until 28 February 1999. 12 This time,
petitioner gave respondents complimentary cases of its
products instead of cash assistance, and increased the latter's
sales quota to 8,000 cases per month.
 
For 13 years, the parties enjoyed a good and harmonious
business partnership.13 While the contracts contained a clause
for breach, it was never enforced. 14  
 
Sometime in late 1998 or early 1999, before the contract
expired, petitioner required respondents to submit a list of
their customers on the pretext that it would formulate a policy
defining its territorial dealership in Quezon City. 15 It assured
respondents that their contract would be renewed for a longer
period, provided that they would submit the list. 16 However,
despite their compliance, the promise did not materialize. 17
 
Respondents discovered that in February 1999, petitioner
started to reach out to the persons whose names were on the
list. 18 Respondents also received reports that their delivery
trucks were being trailed by petitioner's agents; and that as
soon as the trucks left, the latter would approach the former's
customers. 19 Further, respondents found out that petitioner
had employed a different pricing scheme, such that the price
Page 170 of 304
given to distributors was significantly higher than that given to
supermarkets.20 It also enticed direct buyers and sari-sari store
owners in the area with its "Coke Alok"  promo, in which it gave
away one free bottle for every case purchased. 21 It further
engaged a store adjacent to respondents' warehouse to sell
the former's products at a substantially lower price.22  
Respondents claimed that because of these schemes, they lost
not only their major customers - such as Peach Blossoms, May
Flower Restaurant, Saisaki Restaurant, and Kim Hong
Restaurant - but also small stores, such as the canteen in the
hospital where respondent Jose Bernardo worked.23 They
admitted that they were unable to pay deliveries worth
P449,154. 24
 
Respondents filed a Complaint25 for damages, alleging that the
acts of petitioner constituted dishonesty, bad faith, gross
negligence, fraud, and unfair competition in commercial
enterprise.26 The Complaint was later amended27 to implead
petitioner's officers and personnel, include additional factual
allegations, and increase the amount of damages prayed for.
Petitioner denied the allegations.28 It maintained that it had
obtained a list of clients through surveys, and that promotional
activities or developmental strategies were implemented only
after the expiration of the Agreements. 29 It opined that the
filing of the complaint was a mere ploy resorted to by
respondents to evade the payment of the deliveries. 30 
The RTC held petitioner liable for damages for abuse of rights
in violation of Articles 19, 20, and 21 of the Civil Code and for
unfair competition under Article 28. It found that petitioner's
agents solicited the list of clients in order to penetrate the
market and directly supply customers with its
products.31 Moreover, the trial court found that petitioner had
recklessly ignored the rights of respondents to have a fair
chance to engage in business or earn a living when it
deliberately used oppressive methods to deprive them of their
business. 32 Its officers were, however, absolved of liability, as
there was no showing that they had acted in their individual
and personal capacities.33
In the body of its Decision, the RTC stated that petitioner
should pay respondents PS00,000 as temperate damages, and
that it was only just and fair that the latter offset this amount
against their outstanding obligation to petitioner in the amount
of P449, 154. 34 In the fallo, the trial court awarded P50,000 as
moral damages, P20,000 as exemplary damages, and
P100,000 as attorney's fees. 35 It denied petitioner's
counterclaim for damages for lack of factual and legal
basis. 36 Petitioner moved for reconsideration, but the motion
was denied.37
Petitioner then elevated the case to the CA, which affirmed the
RTC Decision in toto. According to the appellate court's ruling,
petitioner had used its sizable resources to railroad the
business of respondents:38
 
[Petitioner] infiltrated certain areas in Quezon City at the
expense of and later, in derogation of its wholesalers,
particularly [respondents]. As admitted by Allan Mercado, the
Integrated Selling and Marketing Manager of appellant, it was
previously dependent on wholesalers to circulate its products
around the country. x x x.
 
xx xx
[T]owards the end of the partnership, appellant employed a
different marketing scheme purportedly to obviate the poor
dealership management from wholesalers in major areas. But
as may be shown by the incidents leading to the filing of this
case, this method was designed strategically to overrun
[respondents'] business and take over the customers of its
wholesalers.
xx xx
One such method was "different pricing schemes" wherein the
prices given to supermarkets and grocery stores were
considerably lower than those imposed on wholesalers. No
prior advice thereof was given to [respondents] or any of the
wholesalers. In fact, they only knew of it when their customers
began complaining about the variation in prices of softdrinks
sold in supermarkets and those that were sold by them. When
in fact [respondent] Bernardo personally inspected the
products in grocery stores, he discovered that a box of Coke-
in-can is sold at P40.00, lower than those offered by them as
wholesalers.
About the same time, [petitioner] also implemented the "Area
Market Cooperatives" (AMC) and the "Coke-Alok"  promo.
Page 171 of 304
Under the AMC, customers of wholesalers can purchase
[petitioner's] products from prominent stores in heavily
crowded areas for P76.00 per case, as opposed to
[respondent's] offering of P112.00. In "Coke-Alok," [petitioner]
directly sold Coke products to wholesale customers with
incentives as free bottle of Coke for every case of softdrinks
purchased. Being of limited resources, [respondents had no]
means to equal the lucrative incentives given by [petitioner] to
their customers.
xx xx
Apart from direct selling and other promotions, [petitioner]
also employed high-handed means that further shrunk
[respondents'] market coverage. In one instance, [petitioner's
sales representative] advised [respondents] and other
wholesalers to keep away from major thoroughfares.
Apparently, [petitionerl was going to supply their products to
these stores themselves. xx x.
 
xx xx
x x x Furthermore, one of[petitioner's] representatives, Nelson
Pabulayan, admitted that he sold products at the canteen in V.
Luna Hospital [which was then being serviced by respondents].
 
As if that was not enough, petitioner engaged other stores, suc
as  Freezel's Bakeshop that was located adjacent to
[respondent's] warehouse, to sell Coke products at a price
substantially lower than [that offered by respondents].
 
ISSUES
 
Petitioner argues that the trial court had no jurisdiction to
award temperate damages that were not prayed for in the
Complaint. It further asserts that it did not violate Articles 19,
20, 21 or 28; hence, the award of damages and attorney's fees
was improper.
OUR RULING
The CA did not err in affirming the finding that petitioner was
liable for temperate, moral and exemplary damages, as well as
attorney's fees, for abuse of rights and unfair competition.
 
The Petition raises questions of fact.
Petitioner ignores the nature of a petition for review as a
remedy against errors of law. Instead, it raises factual matters
that have already been passed upon by the RTC and the CA.  
It insists on the following facts:
1) the "promotional activities" were implemented after the
dealership agreements expired;39
 
2) the "developmental strategies" were implemented
nationwide and were not meant to destroy the business of
respondents; 40
3) its agents did not follow the trucks of Jolly Beverages; 41
 
4) the price difference resulted because respondents could no
longer avail of trade discounts and incentives under the
expired Agreement;42 and
 
5) there is no causal connection between the promotional
activities and the claimed losses of respondents. 43
 
Petitioner contends that since it did not assign any exclusive
territory to respondents, the latter had no exclusive right to
any customer. 44 It supposedly decided to rely on its own sales
personnel to push the sale of its products, because the
distributors had violated the terms of their agreements by
selling competing products, failing to meet the required sales
volume, or failing to pay on time. 45 Petitioner, however, did
not allege that respondents committed any of these actions
during the existence of the agreement.
Page 172 of 304
We have repeatedly held that factual findings of the trial court,
especially when affirmed by the appellate court, are given
great weight, even finality, by this Court.46 Petitioner fails to
make a convincing argument that this case falls under any of
the exceptions to the rule. On the contrary, the Decisions of
the RTC and the CA appear to be supp01ied by the records.
of some legal provision; or an act which, though not
coni;tituting a transgression of positive law, nevertheless
violates certain rudimentary rights of the party
aggrieved. 52 The provisions read:
 

  Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
Petitioner bewails the fact that the RTC and the CA, in his due, and observe honesty and good faith.
establishing the facts, relied heavily on the testimony of
respondent Jose Bernardo.47 Petitioner, however, forgets that  
trial courts are in an ideal position to observe the demeanor of
Art. 20. Every person who, contrary to law, wilfully or
the witnesses and can therefore discern if the latter are telling
negligently causes damage to another, shall indemnify the
the truth or not.48 In this case, both the trial and the appellate
latter for the same.
courts found the testimonies of respondent Jose Bernardo and
his witnesses more credible than those of the witnesses
 
presented by petitioners. We shall not substitute our judgment
for that of the trial court, absent any compelling reason. Art. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs
 
or public policy shall compensate the latter for the damage.
Petitioner is liable for damages for
 
abuse of rights and unfair
In Albenson Enterprises Corp. v. CA, 53 this Court held that
under any of the above provisions of law, an act that causes
competition under the Civil Code.
injury to another may be made the basis for an award of
  damages. As explained by this Court in GF Equity, Inc. v.
Valenzona: 54
Both the RTC and the CA found that petitioner had employed
oppressive and high-handed schemes to unjustly limit the  
market coverage and diminish the investment returns of
The exercise of a right ends when the right disappears, and it
respondents.49 The CA summarized its findings as follows:50
disappears when it is abused, especially to the prejudice of
  others. The mask of a right without the spirit of justice which
gives it life is repugnant to the modern concept of social law. It
This [cut-throat competition] is precisely what appellant did in cannot be said that a person exercises a right when he
order to take over the market: directly sell its products to or unnecessarily prejudices another or offends morals or good
deal them off to competing stores at a price substantially lower customs. Over and above the specific precepts of positive law
than those imposed on its wholesalers. As a result, the are the supreme norms of justice which the law develops and
wholesalers suffered losses, and in [respondents'] case, laid off which are expressed in three principles: haneste vivere,
a number of employees and alienated the patronage of its alterum non laedere andjus suum quique tribuere; and he who
major customers including small-scale stores. .. It must be violates them violates the law. For this reason, it is not
emphasized that petitioner is not only a beverage giant, but permissible to abuse our rights to prejudice others.
also the manufacturer of the products; hence, it sets the price.
In addition, it took advantage of the infonnation provided by  
respondents to facilitate its takeover of the latter's usual
Meanwhile, the use of unjust, oppressive, or high-handed
business area. Distributors like respondents, who had assisted
business methods resulting in unfair competition also gives a
petitioner in its marketing efforts, suddenly found themselves
right of action to the injured party. Article 28 of the Civil Code
with fewer customers. Other distributors were left with no
provides:
choice but to fold. 51
 
 
Art. 28. Unfair competition in agricultural, commercial or
Articles 19, 20, and 21 of the Civil Code provide the legal
industrial enterprises or in labor through the use of force,
bedrock for the award of damages to a party who suffers
intimidation, deceit, machination or any other unjust,
damage whenever another person commits an act in violation

Page 173 of 304

oppressive or highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
 
Petitioner cites Tolentino, who in turn cited Colin and Capitant.
According to the latter, the act of "a merchant [who] puts up a
store near the store of another and in this way attracts some
of the latter's patrons" is not an abuse of a right.ss The
scenario in the present case is vastly different:
the merchant was also the producer who, with the use of a list
provided by its distributor, knocked on the doors of the latter's
customers and offered the products at a substantially lower
price. Unsatisfied, the merchant even sold its products at a
preferential rate to another store within the vicinity.
Jurisprudence bolds that when a person starts an opposing
place of business, not for the sake of profit, but regardless of
loss and for the sole purpose of driving a competitor out of
business, in order to take advantage of the effects of a
malevolent purpose, that person is guilty of a wanton wrong.56
Temperate, moral, and exemplary
damages, as well as attorney's fees,
were properly awarded.
 
Petitioner argues that the trial court did not have jurisdiction to
grant an award of temperate damages, because respondents
did not specifically pray for it in their Amended Complaint:
 
WHEREFORE, premises considered, it is most respectfully
prayed that the Honorable Comi render a judgment directing
defendants to:
1. Pay plaintiffs the amount of P1,000,000.00 representing loss
of goodwill nurtured over the past 13 years as actual damages.
2. Pay plaintiffs the amount of P200,000 representing moral
damages.
3. Pay plaintiffs the amount of P100,000 representing
exemplary damages.
 
4. Pay plaintiffs the amount of P100,000 representing
attorney's fees.
 
Other reliefs which are just and equitable under the premises
are also prayed for. 
Petitioner's argument is flimsy and unsupported even by the
cases it has cited. 57 The CA correctly ruled that the award of
temperate damages was justified, even if it was not specifically
prayed for, because 1) respondents did pray for the grant of
"other reliefs," and 2) the award was clearly warranted under
the circumstances. Indeed, the law permits judges to award a
different kind of damages as an alternative to actual damages:
Civil Code, Art. 2224. Temperate or moderate damages, which
are more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary
loss has been suffered but its amount can not, from the nature
of the case, be provided with certainty. (Emphasis supplied)
 
Compensatory damages may be awarded in the concept of
temperate damages for injury to business reputation or
business standing, loss of goodwill, and loss of customers who
shifted their patronage to competitors. 58
 
It is not extraordinary for courts to award temperate damages
i~ lieu of actual damages. In Canada v. All Commodities
Marketing Corporation,59 this Court awarded temperate
damages in recognition of the pecuniary loss suffered, after
finding that actual damages could not be awarded for lack of
proof. In Public Estates Authority v. Chu, 60 this Court held that
temperate damages should have been awarded by the trial
court considering that the plaintiff therein had suffered some
pecuniary loss.
In this case, both the RTC and the CA found that respondents
had similarly suffered pecuniary loss by reason of petitioner's
high-handed machinations to eliminate competition in the
market.61
We see no grave error on the part of the RTC when it ruled
that the unpaid obligation of respondents shall be offset
Page 174 of 304
against the temperate damages due them from  
petitioner.62 However, the trial court was not accurate in
considering the P500,000 temperate damages as adequate to Petitioner's counterclaims for moral
completely extinguish the obligation of respondents to
and exemplary damages, as well as
petitioner.63 We note that while the principal was P449,154,
this amount earned legal interest from the time of demand.
attorney's fees and litigation
Nonetheless, in view of the established fact that respondents
incurred the losses after their business was systematically expenses, were properly denied.
crippled by petitioner, it is only proper and just that the
obligation, as well as the legal interest that has accrued, be  
deemed totally compensated by the temperate damages.
Therefore, respondents do not need to tender the amount of The counterclaim for the payment of P449,154 plus legal
P449,154 plus legal interest to petitioner, while the latter does intere~t was effectively granted when the trial court offset the
not have to tender any amount as temperate damages to the temperate damages awarded to respondents against the
former. outstanding obligation of the latter to petitioner.

   

With regard to moral damages, petitioner argues that
respondents failed to provide satisfactory proof that the latter
had undergone any suffering or injury.64 This is a factual
question that has been resolved by the trial court in a Decision
affirmed by the CA. The award finds legal basis under Article
2219(10) of the Civil Code, which states that moral damages
may be recovered in acts and actions referred to in Articles 21
and 28.65
Petitioner likewise questions the award of exemplary damages
without "competent proof."66 It cites Spouses Villafuerte v.
CA67 as basis for arguing that the CA should have based its
Decision regarding the fact and the amount of exemplary
damages upon competent proof that respondents have
suffered injury and upon evidence of the actual amount
thereof. We enjoin petitioner's counsel to fully and carefully
read the text of our decisions before citing them as
authority. 68 The excerpt lifted pertains to compensatory
damages, not exemplary damages. We remind counsel that
exemplary damages are awarded under Article 2229 of the
Civil Code by way of example or correction for the public good.
The determination of the amount is left to the discretion of the
judge; its proof is not incumbent upon the claimant.
 
There being no meritorious argument raised by petitioner, the
award of exemplary damages must be sustained to caution
powerful business owners against the use of oppressive and
high-handed commercial strategies to target and trample on
the rights of small business owners, who are striving to make a
decent living.
The counterclaims for moral and exemplary damages, as well
as attorney's fees and litigation expenses, had no basis and
were properly denied. The fact that petitioner was compelled
to engage the services of counsel in order to defend itself
against the suit of respondents did not entitle it to attorney's
fees.
According to petitioner, it is entitled to moral damages,
because "respondents c~early acted in a vexatious manner
when they instituted this suit."70 We see nothing in the record
to sustain this argument.
With respect to the prayer for exemplary damages, neither do
we find any act of respondents that has to be deterred.
 
WHEREFORE, the Petition is DENIED. The Decision dated 23
July 2009 and Resolution dated 19 November 2009 rendered
by the Court of Appeals in CA-G.R. CV No. 91096, which
affirmed in toto the Decision dated 28 September 2007 issued
by Regional Trial Court Branch 88 Quezon City in Civil Case No.
Q-00-42320, are hereby AFFIRMED with
MODIFICATION in that the damages awarded shall earn
legal interest of 6% per annum from the date of finality of this
Decision until its full satisfaction. The total compensation of
respondents' unpaid obligation, including legal interest that has
accrued, and the temperate damages awarded to them, is
hereby upheld. 
 

  SO ORDERED. 

Exemplary damages having been awarded, the grant of

attorney's fees was therefore warranted.69

Page 175 of 304

St. Martin Polycliinic vs LWV Construction
ST. MARTIN POLYCLINIC, INC., PETITIONER, V. LWV
CONSTRUCTION CORPORATION, RESPONDENT.
PERLAS-BERNABE, J.:
 
Assailed in this petition for review on certiorari[1] are the
Decision[2] dated July 11, 2014 and the Resolution[3] dated
February 27, 2015 of the Court of Appeals (CA) in CA-G.R. SP
No. 125451, which affirmed with modification the
Decision[4] dated December 15, 2011 and the Order dated May
25, 2012 of the Regional Trial Court of Mandaluyong City,
Branch 211 (RTC) in SCA Case No. MC11-879 (Civil Case No.
21881), and thereby ordered herein petitioner St. Martin
Polyclinic, Inc. (petitioner) to pay respondent LWV
Construction Corporation (respondent) temperate damages in
the amount of P50,000.00.
 
The Facts
 
Respondent is engaged in the business of recruiting Filipino
workers for deployment to Saudi Arabia.[5] On the other hand,
petitioner is an accredited member of the Gulf Cooperative
Council Approved Medical Centers Association (GAMCA) and as
such, authorized to conduct medical examinations of
prospective applicants for overseas employment. [6]
On January 10, 2008, respondent referred prospective
applicant Jonathan V. Raguindin (Raguindin) to petitioner for a
pre-deployment medical examination in accordance with the
instructions from GAMCA.[7] After undergoing the required
examinations, petitioner cleared Raguindin and found him "fit
for employment," as evidenced by a Medical Report[8] dated
January 11, 2008 (Medical Report).[9]
Based on the foregoing, respondent deployed Raguindin to
Saudi Arabia, allegedly incurring expenses in the amount of
P84,373.41.[10] Unfortunately, when Raguindin underwent
another medical examination with the General Care Dispensary
of Saudi Arabia (General Care Dispensary) on March 24, 2008,
he purportedly tested positive for HCV or the hepatitis C virus.
The Ministry of Health of the Kingdom of Saudi Arabia (Ministry
of Health) required a re-examination of Raguindin, which the
General Care Dispensary conducted on April 28, 2008.
[11]
 However, the results of the re-examination remained the
same, i.e., Raguindin was positive for HCV, which results were
reflected in a Certification[12] dated April 28, 2008
(Certification). An undated HCV Confirmatory Test
Report[13] likewise conducted by the Ministry of Health affirmed
such finding, thereby leading to Raguindin's repatriation to the
Philippines.[14]
 
Claiming that petitioner was reckless in issuing its Medical
Report stating that Raguindin is "fit for employment" when a
subsequent finding in Saudi Arabia revealed that he was
positive for HCV, respondent filed a Complaint[15] for sum of
money and damages against petitioner before the Metropolitan
Trial Court of Mandaluyong City, Branch 60 (MeTC).
Respondent essentially averred that it relied on petitioner's
declaration and incurred expenses as a consequence. Thus,
respondent prayed for the award of damages in the amount of
P84,373.41 representing the expenses it incurred in deploying
Raguindin abroad.[16]
 
In its Answer with compulsory counterclaim,[17] petitioner
denied liability and claimed that: first, respondent was not a
proper party in interest for lack of privity of contract between
them; second, the MeTC had no jurisdiction over the case as it
involves the interpretation and implementation of a contract of
employment; third, the action is premature as Raguindin has
yet to undergo a post-employment medical examination
following his repatriation; and fourth, the complaint failed to
state a cause of action as the Medical Report issued by
petitioner had already expired on April 11, 2008, or three (3)
months after its issuance on January 11, 2008.[18]
The MeTC Ruling
 
In a Decision[19] dated December 17, 2010, the MeTC rendered
judgment in favor of respondent and ordered petitioner to pay
the amount of P84,373.41 as actual damages, P20,000.00 as
attorney's fees, and the costs of suit.[20]
At the onset, the MeTC held that it had jurisdiction over the
case, since respondent was claiming actual damages incurred
in the deployment of Raguindin in the amount of P84,373.41.
[21]
 It further ruled that respondent was a real party in interest,
as it would not have incurred expenses had petitioner not
issued the Medical Report certifying that Raguindin was fit to
work.
 
On the merits, the MeTC found that respondent was entitled to
be informed accurately of the precise condition of Raguindin
before deploying the latter abroad and consequently, had
Page 176 of 304
sustained damage as a result of the erroneous certification.
[22]
 In this relation, it rejected petitioner's contention that
Raguindin may have contracted the disease after his medical
examination in the Philippines up to the time of his
deployment, there being no evidence offered to corroborate
the same.[23]
 
Aggrieved, petitioner appealed to the RTC, contending,
[24]
 among others, that respondent failed to comply with the
requirements on the authentication and proof of documents
under Section 24,[25] Rule 132 of the Rules of Court,
considering that respondent's evidence, particularly the April
28, 2008 Certification issued by the General Care Dispensary
and the HCV Confirmatory Test Report issued by the Ministry
of Health, are foreign documents issued in Saudi Arabia.
 
The RTC Ruling
In a Decision[26] dated December 15, 2011, the RTC dismissed
petitioner's appeal and affirmed the MeTC Decision in its
entirety.[27] Additionally, the RTC pointed out that petitioner
can no longer change the theory of the case or raise new
issues on appeal, referring to the latter's argument on the
authentication of respondent's documentary evidence.[28]
Petitioner's motion for reconsideration[29] was denied in an
Order[30] dated May 25, 2012. Dissatisfied, petitioner elevated
the case to the CA.[31]
 
Moreover, it remarked that petitioner's own Medical Report
does not enjoy the presumption of regularity as petitioner is
merely an accredited clinic.[35] Finally, the CA ruled that
petitioner could not disclaim liability on the ground that
Raguindin tested positive for HCV in Saudi Arabia after the
expiration of the Medical Report on April 11, 2008, noting that
the General Care Dispensary issued its Certification on April 28,
2008, or a mere seventeen (17) days from the expiration of
petitioner's Medical Report.[36] Hence, the CA concluded that "it
is contrary to human experience that a newly-deployed
overseas worker, such as Raguindin, would immediately
contract a serious virus at the very beginning of a
deployment."[37]
 
However, as the records are bereft of evidence to show that
respondent actually incurred the amount of P84,373.41 as
expenses for Raguindin's deployment, the CA deleted the
award of actual damages and instead, awarded temperate
damages in the amount of P50,000.00. [38]
Aggrieved, petitioner filed a motion for partial reconsideration,
[39]
 which the CA denied in a Resolution[40] dated February 27,
2015; hence, this petition.
 
The Issue Before the Court
The essential issue advanced for the Court's resolution is
whether or not petitioner was negligent in issuing the Medical
Report declaring Raguindin "fit for employment" and hence,
should be held liable for damages.

The CA Ruling  

  The Court's Ruling

In a Decision[32] dated July 11, 2014, the CA affirmed the RTC  

Decision, with the modification deleting the award of actual
damages and instead, awarding temperate damages in the The petition is granted.
amount of P50,000.00.[33]
 
 
I.
The CA held that petitioner failed to perform its duty to
accurately diagnose Raguindin when it issued its Medical  
Report declaring the latter "fit for employment", considering
At the outset, it should be pointed out that a re-examination of
that he was subsequently found positive for HCV in Saudi
factual findings cannot be done acting on a petition for review
Arabia.[34] Further, the CA opined that the Certification issued
on certiorari because the Court is not a trier of facts but
by the General Care Dispensary is not a public document and
reviews only questions of law.[41] Thus, in petitions for review
in such regard, rejected petitioner's argument that the same is
on certiorari, only questions of law may generally be put into
inadmissible in evidence for not having been authenticated.
issue. This rule, however, admits of certain exceptions, such as
Page 177 of 304
"when the inference made is manifestly mistaken, absurd or
impossible"; or "when the findings are conclusions without
citation of specific evidence on which they are
based."[42] Finding a confluence of certain exceptions in this
case, the general rule that only legal issues may be raised in a
petition for review on certiorariunder Rule 45 of the Rules of
Court would not apply, and the Court retains the authority to
pass upon the evidence presented and draw conclusions
therefrom.[43]
II.
 
An action for damages due to the negligence of another may
be instituted on the basis of Article 2176 of the Civil Code,
which defines a quasi-delict:
 
Article 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.
The elements of a quasi-delict are: (1) an act or omission;
(2) the presence of fault or negligence in the
performance or non-performance of the act; (3) injury;
(4) a causal connection between the negligent act and
the injury; and (5) no pre-existing contractual relation.
[44]
 
As a general rule, any act or omission coming under the
purview of Article 2176 gives rise to a cause of action under
quasi-delict. This, in turn, gives the basis for a claim of
damages.[45] Notably, quasi-delict is one among several sources
of obligation. Article 1157 of the Civil Code states:
Article 1157. Obligations arise from:
(1) Law;
(2) Contracts;  distinctive applications of Articles 19, 20 and 21, which are
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
However, as explained by Associate Justice Marvic M.V.F.
Leonen (Justice Leonen) in his opinion in Alano v. Magud-
Logmao[46] (Alano), "Article 2176 is not an all-
encompassing enumeration of all actionable wrongs
which can give rise to the liability for damages. Under
the Civil Code, acts done in violation of Articles 19, 20,
and 21 will also give rise to damages."[47] These provisions
- which were cited as bases by the MTC, RTC and CA in their
respective rulings in this case - read as follows:
Article 19. Every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
 
Article 20. Every person who, contrary to law, willfully
or negligently causes damage to another, shall indemnify the
latter for the same.
 
Article 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs,
or public policy shall compensate the latter for the damage.
"[Article 19], known to contain what is commonly referred to
as the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights, but
also in the performance of one's duties."[48]Case law states that
"[w]hen a right is exercised in a manner which does not
conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for
which the wrongdoer must be held responsible. But while
Article 19 lays down a rule of conduct for the government of
human relations and for the maintenance of social order, it
does not provide a remedy for its violation. Generally, an
action for damages under either Article 20 or Article 21 would
[then] be proper."[49] Between these two provisions as worded,
it is Article 20 which applies to both willful and
negligent acts that are done contrary to law. On the other
hand, Article 21 applies only to willful acts done contra
bonos mores.[50]
In the Alano case, Justice Leonen aptly elaborated on the
general provisions on human relations, vis-a-vis Article 2176,
which particularly governs quasi-delicts:
Page 178 of 304
Article 19 is the general rule which governs the conduct of
human relations. By itself, it is not the basis of an actionable
tort. Article 19 describes the degree of care required so that an
actionable tort may arise when it is alleged together with
Article 20 or Article 21.
 
Article 20 concerns violations of existing law as basis
for an injury. It allows recovery should the act have been
willful or negligent. Willful may refer to the intention to do the
act and the desire to achieve the outcome which is considered
by the plaintiff in tort action as injurious. Negligence may refer
to a situation where the act was consciously done but without
intending the result which the plaintiff considers as injurious.
Article 21, on the other hand, concerns injuries that may be
caused by acts which are not necessarily proscribed by law.
This article requires that the act be willful, that is, that there
was an intention to do the act and a desire to achieve the
outcome. In cases under Article 21, the legal issues revolve
around whether such outcome should be considered a legal
injury on the part of the plaintiff or whether the commission of
the act was done in violation of the standards of care required
in Article 19.
 
Article 2176 covers situations where an injury happens
through an act or omission of the defendant. When it involves
a positive act, the intention to commit the outcome is
irrelevant. The act itself must not be a breach of an
existing law or a pre-existing contractual obligation.
What will be considered is whether there is "fault or
negligence” attending the commission of the act which
necessarily leads to the outcome considered as injurious by the
plaintiff. The required degree of diligence will then be assessed
in relation to the circumstances of each and every case.
[51]
 (Emphases and underscoring supplied)
 
Thus, with respect to negligent acts or omissions, it should
therefore be discerned that Article 20 of the Civil Code
concerns "violations of existing law as basis for an
injury", whereas Article 2176 applies when the
negligent act causing damage to another does not
constitute "a breach of an existing law or a pre-existing
contractual obligation."
 
In this case, the courts a quo erroneously anchored their
respective rulings on the provisions of Articles 19, 20, and 21
of the Civil Code. This is because respondent did not proffer
(nor have these courts mentioned) any law as basis for which
damages may be recovered due to petitioner's alleged
negligent act. In its amended complaint, respondent mainly
avers that had petitioner not issue a "fit for employment"
Medical Report to Raguindin, respondent would not have
processed his documents, deployed him to Saudi Arabia, and
later on - in view of the subsequent findings that Raguindin
was positive for HCV and hence, unfit to work - suffered actual
damages in the amount of P84,373.41. [52]Thus, as the claimed
negligent act of petitioner was not premised on the breach of
any law, and not to mention the incontestable fact that no pre-
existing contractual relation was averred to exist between the
parties, Article 2176 - instead of Articles 19, 20 and 21 - of the
Civil Code should govern.
III.
 
Negligence is defined as the failure to observe for the
protection of the interests of another person, that degree of
care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury.[53]
 
As early as the case of Picart v. Smith,[54] the Court elucidated
that "the test by which to determine the existence of
negligence in a particular case is: Did the defendant in
doing the alleged negligent act use that reasonable
care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is
guilty of negligence."[55] Corollary thereto, the Court stated that
"[t]he question as to what would constitute the conduct of a
prudent man in a given situation must of course be always
determined in the light of human experience and in view of the
facts involved in the particular case. Abstract speculation
cannot here be of much value x x x: Reasonable men
govern their conduct by the circumstances which are before
them or known to them. They are not, and are not
supposed to be, omniscient of the future. Hence[,] they
can be expected to take care only when there is
something before them to suggest or warn of
danger."[56]
 
Under our Rules of Evidence, it is disputably presumed that a
person takes ordinary care of his concerns and that private
transactions have been fair and regular.[57] In effect,
negligence cannot be presumed, and thus, must be
proven by him who alleges it.[58] In Huang v. Philippine
Hoteliers, Inc.:[59]
 
Page 179 of 304
[T]he negligence or fault should be clearly established as it is
the basis of her action. The burden of proof is upon [the
plaintiff]. Section 1, Rule 131 of the Rules of Court provides
that "burden of proof is the duty of a party to present evidence
on the facts in issue necessary to establish his claim or defense
by the amount of evidence required by law." It is then up for
the plaintiff to establish his cause of action or the defendant to
establish his defense. Therefore, if the plaintiff alleged in
his complaint that he was damaged because of the
negligent acts of the defendant, he has the burden of
proving such negligence. It is even presumed that a
person takes ordinary care of his concerns. The quantum
of proof required is preponderance of evidence.[60] (Emphasis
and underscoring supplied)
 
The records of this case show that the pieces of evidence
mainly relied upon by respondent to establish petitioner's
negligence are: (a) the Certification[61] dated April 28, 2008;
and (b) the HCV Confirmatory Test Report.[62] However, these
issuances only indicate the results of the General Care
Dispensary and Ministry of Health's own medical examination
of Raguindin finding him to be positive for HCV. Notably, the
examination conducted by the General Care Dispensary, which
was later affirmed by the Ministry of Health, was
conducted only on March 24, 2008, or at least two (2)
months after petitioner issued its Medical Report on
January 11, 2008. Hence, even assuming that Raguindin's
diagnosis for HCV was correct, the fact that he later tested
positive for the same does not convincingly prove that he was
already under the same medical state at the time petitioner
issued the Medical Report on January 11, 2008. In this regard,
it was therefore incumbent upon respondent to show
that there was already negligence at the time the
Medical Report was issued, may it be through evidence
that show that standard medical procedures were not carefully
observed or that there were already palpable signs that
exhibited Raguindin's unfitness for deployment at that time.
This is hardly the case when respondent only proffered
evidence which demonstrate that months after petitioner's
Medical Report was issued, Raguindin, who had already been
deployed to Saudi Arabia, tested positive for HCV and as such,
was no longer "fit for employment".
In fact, there is a reasonable possibility that Raguindin became
exposed to the HCV only  after his medical examination with
petitioner on January 11, 2008. Based on published reports
from the World Health Organization, HCV or the hepatitis C
virus causes both acute and chronic infection. Acute HCV
infection is usually asymptomatic,[63] and is only very rarely
associated with life-threatening diseases. The incubation
period[64] for HCV is two (2) weeks to six (6) months, and
following initial infection, approximately 80% of people do not
exhibit any symptoms.[65] Indisputably, Raguindin was not
deployed to Saudi Arabia immediately after petitioner's medical
examination and hence, could have possibly contracted the
same only when he arrived thereat. In light of the foregoing,
the CA therefore erred in holding that "[h]ad petitioner more
thoroughly and diligently examined Raguindin, it would likely
have discovered the existence of the HCV because it was
contrary to human experience that a newly-deployed overseas
worker, such as Raguindin, would immediately have contracted
the disease at the beginning of his deployment" [66]
 
While petitioner's Medical Report indicates an expiration of
April 11, 2008, the Court finds it fitting to clarify that the same
could not be construed as a certified guarantee coming from
petitioner that Raguindin's medical status at the time the
report was issued on January 11, 2008 (i.e., that he was fit for
employment) would remain the same up until that date ( i.e.,
April 11, 2008). As earlier intimated, the intervening period
could very well account for a number of variables that could
have led to a change in Raguindin's condition, such as his
deployment to a different environment in Saudi Arabia. If at
all, the expiration date only means that the Medical Report is
valid - and as such, could be submitted - as a formal
requirement for overseas employment up until April 11, 2008;
it does not, by any means, create legal basis to hold the issuer
accountable for any intervening change of condition from the
time of issuance up until expiration. Truly, petitioner could not
be reasonably expected to predict, much less assure, that
Raguindin's medical status of being fit for employment would
remain unchanged. Thus, the fact that the Medical Report's
expiration date of April 11, 2008 was only seventeen (17) days
away from the issuance of the General Care Dispensary's April
28, 2008 Certification finding Raguindin positive for HCV
should not - as it does not - establish petitioner's negligence.
 
IV.
At any rate, the fact that Raguindin tested positive for HCV
could not have been properly established since the courts a
quo, in the first place, erred in admitting and giving probative
weight to the Certification of the General Care Dispensary,
which was written in an unofficial language. Section 33, Rule
132 ofthe Rules of Court states that:
Section 33. Documentary evidence in an unofficial language.
- Documents written in an unofficial language shall not be
admitted as evidence, unless accompanied with a
translation into English or Filipino. To avoid interruption of
proceedings, parties or their attorneys are directed to have
such translation prepared before trial.[67]
Page 180 of 304
 
A cursory examination of the subject document would reveal
that while it contains English words, the majority of it is in an
unofficial language. Sans any translation in English or Filipino
provided by respondent, the same should not have been
admitted in evidence; thus their contents could not be given
probative value, and deemed to constitute proof of the facts
stated therein.
Moreover, the due execution and authenticity of the said
certification were not proven in accordance with Section 20,
Rule 132 of the Rules of Court:
Section 20. Proof of private document. - Before any private
document offered as authentic is received in evidence, its due
execution and authenticity must be proved either:
 
(a) By anyone who saw the document executed or written; as or set out in the pleadings remains the theory throughout the
(b) By evidence of the genuineness of the signature or handwriting
(c) Any other private document need only be identified as that which it is claimed to be.
Notably, the foregoing provision applies since the Certification
does not fall within the classes of public documents under
Section 19, Rule 132 of the Rules of Court [68] - and hence, must
be considered as private. It has been settled that
an unverified and unidentified private document cannot
be accorded probative value.[69] In addition, case law states
that "since a medical certificate involves an opinion of
one who must first be established as an expert witness,
it cannot be given weight or credit unless the doctor
who issued it is presented in court to show his
qualifications. It is precluded because the party against
whom it is presented is deprived of the right and opportunity
to cross-examine the person to whom the statements or
writings are attributed. Its executor or author should be
presented as a witness to provide the other party to the
litigation the opportunity to question its contents. Being mere
hearsay evidence, failure to present the author of the medical
certificate renders its contents suspect and of no probative
value,"[70] as in this case.
 
Similarly, the HCV Confirmatory Test Report issued by the
Ministry of Health of Saudi Arabia should have also been
excluded as evidence. Although the same may be considered a
public document, being an alleged written official act of an
official body of a foreign country,[71] the same was not duly
authenticated in accordance with Section 24,[72]Rule 132 of the
Rules of Court. While respondent provided a
translation[73] thereof from the National Commission on Muslim
Filipinos, Bureau of External Relations, Office of the President,
the same was not accompanied by a certificate of the secretary
of the embassy or legation, consul-general, consul, vice-consul,
or consular agent or any officer in the foreign service of the
Philippines stationed in Saudi Arabia, where the record is kept,
and authenticated by the seal of his office.[74]
To be sure, petitioner - contrary to respondent's contention [75] -
has not changed its theory of the case by questioning the
foregoing documents. As petitioner correctly argued, it merely
amplified its defense[76] that it is not liable for negligence when
it further questioned the validity of the issuances of the
General Care Dispensary and Ministry of Health. In Limpangco
Sons v. Yangco[77], the Court explained that "[t]here is a
difference x x x between a change in the theory of the case
and a shifting of the incidence of the emphasis placed during
the trial or in the briefs." "Where x x x the theory of the case
progress of the cause, the change of emphasis from one phase
of the
of the case maker. by one set of facts to another phase
as presented
made prominent by another set of facts x x x does not result in
a change of theory x x x".[78] In any case, petitioner had
already questioned the validity of these documents in its
Position Paper[79] before the MeTC.[80] Hence, there is no
change of theory that would preclude petitioner's arguments
on this score.
All told, there being no negligence proven by respondent
through credible and admissible evidence, petitioner cannot be
held liable for damages under Article 2176 of the Civil Code as
above-discussed.
 
WHEREFORE, the petition is GRANTED. Accordingly, the
Decision dated July 11, 2014 and the Resolution dated
February 27, 2015 of the Court of Appeals in CA-G.R. SP No.
125451 are REVERSED and SET ASIDE, and a NEW ONE is
entered, DISMISSING the complaint of respondent LWV
Construction Corporation for lack of merit.
 
SO ORDERED.
Lomarda vs Fudalan
PERLAS-BERNABE, J.:
Page 181 of 304
 
Assailed in this petition for review on certiorari[1] are the
Decision[2] dated February 9, 2017 and the Resolution[3] dated
May 19, 2017 of the Court of Appeals (CA) in CA-G.R. CV No.
04480, which affirmed the Decision[4] dated May 15, 2012 of
the Regional Trial Court of Tagbilaran City, Bohol, Branch 49
(RTC) in Civil Case No. 7476, granting the complaint for
damages filed by respondent Engr. Elmer T. Fudalan
(respondent) against petitioners Ismael D. Lomarda (Lomarda)
and Crispina Raso (Raso; collectively, petitioners).
The Facts
On September 27, 2006, respondent, through his wife, Alma
Fudalan, applied for electrical service from BOHECO I Electric
Cooperative Inc. (BOHECO I) to illuminate their farmhouse
located in Cambanac, Baclayon, Bohol. At the pre-membership
seminar, respondent paid the amount of P48.12 as
membership fee and was advised to employ the services of an
authorized electrician from BOHECO I.[5] Accordingly, on
October 7, 2006, respondent employed the services of Sabino
Albelda Sr. (Albelda), a BOHECO I authorized electrician, who
informed him that the electrical connection could only be
installed in his farmhouse if he procures a certification from
Raso, the Barangay Power Association (BAPA)[6] Chairperson.
Respondent then instructed his farmhand to get a certification
from Raso but despite efforts to reach Raso, the latter was
unavailable. Thus, respondent consented to the tapping of his
electrical line to that of BAPA upon the assurance of Albelda
that he would not be charged with pilferage of electricity
because his electric usage shall be determined by the check
meter of BOHECO I at the base of the drop line and shall be
billed accordingly.[7]
In the morning of October 8, 2006, respondent still tried again
to obtain Raso's certification. However, during their meeting,
Raso allegedly got mad, vowed to never issue the said
certification, and eventually then reported the matter to
BOHECO I for disconnection.[8]
Feeling aggrieved, respondent and his wife went to BOHECO I
on October 17, 2006 to complain about Raso's malicious
actuations. They were attended to by the receiving clerk,
petitioner Lomarda, who, after reviewing their documents, told
them that he would conduct an ocular inspection of their
farmhouse. The next day, respondent, together with his
farmhand, went looking for Raso and confronted her about the
latter's threat of disconnection. To appease them, Raso
guaranteed not to order the disconnection of respondent's
electricity; nevertheless, she still refused to issue the
certification on the premise that respondent's farmhouse
already had electricity. In the course of their conversation,
Raso uttered, "Sabut sabuton lang ni nato," which translates to
"let us just settle this."[9]
On November 5, 2006, respondent and his wife once more
went to Raso to follow up on the issuance of such certification.
They met at the purok center, where Raso was conducting a
meeting with several purok members. Thereat, Raso asked
why respondent's electricity has not yet been installed.
Respondent took this to be a sarcastic and rhetorical remark
because Raso was, in fact, the one withholding the issuance of
the BAPA certification which was precisely the cause of the
delay of the aforesaid installation.[10]
In another confrontation, Raso explained that she was about to
issue the certification but was prevented by Lomarda, who
allegedly apprised her of a pending complaint for premature
tapping against respondent. To settle the misunderstanding,
Raso directed respondent to discuss the matter with Lomarda
at his house, and again uttered "Sabut sabuton lang ni nato."
During their conversation, Lomarda told respondent that he
earlier received a disconnection order issued a long time ago
but misplaced the document, and that an ocular inspection of
respondent's farmhouse will be conducted on November 6,
2006. When respondent informed Raso of the date of
inspection, the latter once again remarked, "Sabut sabuton
lang ni nato."[11]
On the day of inspection, or on November 6, 2006, respondent
was assured that his electricity will not be disconnected and
that Raso will issue the certification, provided he would pay the
amount of P1,750.00 or sign a promissory note. Respondent,
however, refused to comply with the said conditions, reasoning
that there was no official order from the concerned office.
After respondent refused to pay, Lomarda allegedly posed in
front of a camera and while pointing at the slot provided for
the electric meter, shouted, "This is an illegal tapping."
Thereafter, Lomarda, in the presence of policemen, the
barangay treasurer, and other several passersby, ordered his
linemen to cut off respondent's electricity.[12]
On November 9, 2006, respondent communicated with
BOHECO I, through phone, and inquired about his electric
dues. He was informed that there was no system loss or
excess billed to the cooperative, and that his electric usage
amounted only to P20.00.
Claiming that petitioners' acts tarnished his image, besmirched
his reputation, and defamed his honor and dignity, respondent
filed a complaint for damages before the RTC. Respondent
alleged that petitioners confederated with one another to
purposely delay the approval of his application for electric
connection by: (a) withholding the issuance of the BAPA
certification; (b) falsely accusing him of premature tapping and
pilferage of electricity; and (c) demanding the payment of
P1,750.00, when what was due him was only P20.00. [13]
Page 182 of 304

For their part, petitioners contended that respondent
committed premature tapping of electricity, when the latter
consented to the tapping of his line to the service line of BAPA
without a "turn-on" order from BOHECO I. Moreover, they
claim that they cannot be faulted for the disconnection, since
they gave respondent the option to pay the penalty or sign a
promissory note, which the latter refused.[14]
The RTC Ruling
In a Decision[15] dated May 15, 2012, the RTC found petitioners
liable for damages under Article 21 of the Civil Code, [16] and
accordingly, ordered them to jointly and severally pay
respondent the following amounts:
 
(a) P451.65 as actual damages;
(b) P200,000.00 as moral damages;
(c) P100,000.00 as exemplary damages;
 
(d) P50,000.00 as attorney's fees; and
 
(e) P20,000.00 as litigation expenses. [17]
In so ruling, the RTC held that respondent could not have
committed premature electrical connection or electric pilferage
in violation of the existing rules and regulations of BOHECO I,
considering that the installation of respondent's electrical
connection was only done upon the advice of Albelda, who is
an authorized electrician of BOHECO I. Moreover, the RTC
pointed out that respondent was in good faith and exerted all
his efforts to comply with the requirements of BOHECO I, while
petitioners performed acts that are malicious, dishonest, and in
gross bad faith. In particular, petitioners intentionally withheld
the issuance of the required BAPA certification and worse,
demanded the payment of P1,750.00, when what was due
from respondent was only P20.00. Consequently, the RTC
ruled that petitioners are liable under Article 21 of the Civil
Code.[18]
 
Aggrieved, petitioners appealed to the Court of Appeals (CA).
 
The CA Ruling
In a Decision[19] dated February 9, 2017, the CA affirmed the
RTC Decision.[20]
At the onset, the CA observed that respondent exerted all
efforts to comply with the prescribed requirements in good
faith. Moreover, it pointed out that respondent was not
caught in flagrante delicto of premature tapping because he
was the one who reported to Raso the fact of tapping, which
was only done under the context that the approving authority
was then unavailable to issue the certification despite
respondent's efforts.[21] On the other hand, the CA ruled that
petitioners acted with malice and bad faith, as exhibited by
their conduct before, during, and after the disconnection,
which is contrary to morals, good customs, or public policy.
Undaunted, petitioners moved for reconsideration but was
denied in a Resolution[22] dated May 19, 2017; hence, this
petition.
 
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA
correctly upheld the award of damages under Article 21 of the
Civil Code.
The Court's Ruling
At the outset, it bears stressing that factual findings of the trial
court, especially when affirmed by the CA, deserve great
weight and respect, unless there are facts of weight and
substance that were overlooked or misinterpreted and that
would materially affect the disposition of the case.[23] Hence,
finding no cogent reason to the contrary, their factual findings
in this case are sustained.
Petitioners mainly argue that they should not be held liable for
damages, considering that respondent made a premature and
unauthorized tapping of his electrical connection. In this
regard, they invoke the principle that he who comes to court
must come with clean hands. Moreover, petitioners allege that
respondent is not entitled to moral damages in the absence of
Page 183 of 304
evidence to show that the acts imputed against them caused 21 gives flesh to its provisions. Thus, we agree with private
respondent moral suffering. respondent's assertion that violations of Articles 19 and 21 are
actionable, with judicially enforceable remedies in the
The arguments of petitioners are untenable. municipal
forum.[27]
In this case, petitioners were found liable by both the RTC and
CA for abuse of rights under Article 19, in relation to Article 21,  
of the Civil Code.
In Mata v. Agravante,[28] the Court pointed out that Article 21
of the Civil Code "refers to acts contra bonos mores and has
"Article 19, known to contain what is commonly referred to as
the following elements:
the principle of abuse of rights, sets certain standards which
may be observed not only in the exercise of one's rights but
 
also in the performance of one's duties." In this regard, case
law states that "[a] right, though by itself legal because [it is] (1) an act which is legal;
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised  
in a manner which does not conform with the norms enshrined
in Article 19 and results in damage to another, a legal wrong is (2) but which is contrary to morals, good customs, public order
thereby committed for which the wrongdoer must be held or public policy; and
responsible."[24]
 
"Article 19 is the general rule which governs the conduct of
(3) is done with intent to injure."[29]
human relations. By itself, it is not the basis of an actionable
 
tort. Article 19 describes the degree of care required so that an
actionable tort may arise when it is alleged together with In this case, records show that respondent had consistently
Article 20 or Article 21."[25] In Saudi Arabian Airlines v. CA, pursued all reasonable efforts to comply with the prescribed
[26]
 the Court explained the relation of Article 19 and Article 21 requirements for the installation of electrical connection at his
of the Civil Code: farmhouse. As part of his application for electrical service with
BOHECO I, he attended a premembership seminar wherein he
 
duly paid the amount of P48.12 as membership fee. At the
seminar, he was advised to employ the services of a BOHECO I
On one hand, Article 19 of the New Civil Code provides:
authorized electrician, which he did by employing Albelda. As
 
the CA pointed out, there were certain advantages to this
Art. 19. Every person must, in the exercise of his rights and in course of action, considering that:
the performance of his duties, act with justice, give everyone
 
his due, and observe honesty and good faith.
 
(a) the said electrician is familiar with the rules and regulations
of BOHECO I;
On the other hand, Article 21 of the New Civil Code provides:
 
 
Art. 21. Any person who willfully causes loss or injury to
(b) an inspection fee will not be charged if the wiring is done
another in a manner that is contrary to morals, good customs
by him; and
or public policy shall compensate the latter for damages.
   

Thus, in Philippine National Bank vs. CA, this Court held that:
 
The aforecited provisions on human relations were intended to
expand the concept of torts in this jurisdiction by granting
adequate legal remedy for the untold number of moral wrongs
which is impossible for human foresight to specifically provide
in the statutes.
Although Article 19 merely declares a principle of law, Article
(c) BOHECO I shall provide a 30-meter service drop wire, and
electric meter, free of charge, upon payment of the bill
deposit.[30]
Eventually, Albelda informed respondent that he could only
install the electrical connection in respondent's farmhouse if
the latter becomes a BAPA member and if he can obtain a
certification as such from BAPA Chairperson Raso. Again,
respondent took no time in obtaining this certification by
Page 184 of 304
instructing his farmhand to reach the aforesaid chairperson.
Unfortunately, Raso was unavailable despite the farmhand's A. I did not bother to ask her but in my mind it means money
diligent efforts. Respondent, who was then put into a that Mrs. Raso together with Mr. Lomarda is out to victimize
precarious situation, sought the advice of Albelda, the me to please me (sic) "[pangkwartahan] ko" (sic) because of
cooperative's authorized electrician, on how to deal with the that premature connection.[31]
matter. Albelda then assured him that if he will proceed with
the tapping of his electrical line to that of BAPA, he would not  
be charged with pilferage of electricity and would be billed
In this regard, the CA aptly observed that "[c]onfronted with
accordingly. Relying in good faith on the authorized
the crisis presented by [respondent], it is only proper for
electrician's advice on the matter, respondent then consented
[petitioners] to tell him what corrective or remedial measures
to the tapping but nonetheless, still instructed his farmhand to
must be done to avoid the commission of any further
secure the certification from Raso to ensure compliance with
infraction. Instead of doing so, x x x Raso made herself
the requirements for proper installation. Upon meeting with
unavailable, which delayed the issuance of the certification. For
Raso, respondent, by his own volition, candidly brought to her
his part, x x x Lomarda failed to immediately disclose the
attention the tapping of BAPA's line and duly explained to her
notice of disconnection to [respondent], under the pretext that
the situation. This notwithstanding, Raso was quick to impute
he is yet to conduct an ocular inspection on the subject
malicious actuations against respondent for proceeding with
farmhouse."[32]
the tapping and reported the matter to BOHECO I for
disconnection.
Worse than their inaction and lack of forthrightness, petitioners
even tried to extort from respondent the amount of P1,792.00
Faced with this predicament, respondent and his wife went to
in exchange for the issuance of a certification and for the
the cooperative to report Raso's actions. They were then
continued availment of their electrical services. However,
attended by the receiving clerk, Lomarda, who told them that
respondent refused to accede to this condition since there was
he would conduct an ocular inspection of the farmhouse. In
no official issuance coming from BOHECO I itself. In fact, upon
the course of trying to comply with the requirements, both
reporting the matter to the cooperative, respondent, to his
Raso and Lomarda gave respondent the roundabout by
dismay, discovered that his electric usage amounted to only
consistently assuring him that they were settling the matter
P20.00. Indeed, as the CA ruled, "[b]y setting these conditions,
("Sabut sabuton lang ni nato"). The following excerpt of
it is evident that [petitioners] were induced by an ill motive."
respondent's testimony during trial is instructive on this score:

  To further exacerbate the situation, petitioner Lomarda even

caused a scene in the public's view which made it appear that
Q. Now, did Mrs. Raso tell you while that controversy was respondent was an unscrupulous violator and thereupon,
between you during that time that rather Mrs. Raso told you in proceeded to disconnect his electricity that caused him
visayan vernacular "Sabut saboton lang ni nato"? (sic) embarrassment and humiliation. As the testimony of
respondent during trial shows:
A. Oh! Ye[s] (sic) she mentioned that p[hrase] (sic) which
disturb me so much for 3 three (3) times (sic), 1.) when I went  
together with my farm help I went to her house on October 18
Q. Now, Mr. witness to refresh your memory according to you
her parting words (sic) was don't worry you will not be
on November 6, 2006 Mr. Ismale (sic) Lomarda went to your
disconnected "Sabut sa boton lang ni nato" and the other two
house at Cambanac, Baclayon, Bohol what did Mr. Lomardo do
(2) was on November 5 when I again look (sic) her which I
when he reached at (sic) your house?
found her at the purok center to ask for my certification again
and her parting words is (sic) "Sabut saboton lang ni nato" and
A. It was in the afternoon of November 6 Mr. Lomarda bringing
then she told me to go (sic) Mr. Lomarda because Mr. Lomarda
with him 2 Policemen (sic) they were also bringing with them
has the final say whether she will give me my certification or
camera taking pictures on the post where the electrical line
not. And the 3rd, was again on the same date November 5
was connected and there were many people around.
already night time when Mr. Lomarda told me that he is going
to inspect the house on Monday so that I went back to Mrs.
Q. Then after that what did Mr. Lomarda do?
Raso to inform her that Mr. Lomarda is going to inspect the
house on Monday and again Mrs. Raso told me that "Sabut
A. Mr. Lomarda in hearing the window (sic) with all the
saboton lang ni nato."
people shouted that "kita mo ha" "kita mo ha" in our
vernacular, "kita mo ha" at the same time pointing to
Q. Now, after hearing that statement "Sabut saboton lang ni
the post where the electrical connection is made "kita
nato", what did you ask Mrs. Raso what (sic) was that meaning
mo ha" witness "ka ha" witness "ka ha" at the same
of "Sabut saboton lang ni nato"?

Page 185 of 304

time taking pictures.
Q. So, after that what did Mr. Lomarda do?
A. Mr. Lomarda demanded to (sic) me an amount of One
Thousand Pesos (P1,750.00) (sic) according to him as payment
of an allege penalty so that I will not be disconnected.
Q. Did you give that amount?
A. No.
Q. Then considering that you did not give that amount One
Thousand (P1,750.00) (sic) what did Mr. Lomarda do?
A. Mr. Lomarda demanded or insisting (sic) that he is going to
inspect the house and when I let him in inside the house he
refuse (sic) and told me to sign first his report before he will
enter the house.
Q. Did you sign the report?
A. I did not sign the report.
Q. Now considering that you did not sign the report, what did
Mr. Lomarda do?
A. Mr. Lomarda instructed his line men because he was also
bringing linemen to finally cut (sic). Days after I ask Mrs. Raso
whether she will allow the disconnection which Mrs. Raso
answered in the affirmative and after that Mr. Lomarda
instructed his line man to finally cut (sic).
Q. And that was on November 6, 2006?
A. November 6, in the afternoon.
Q. Will (sic) Mrs. Raso present during the time when the line
man of Mr. Lomarda cut your electrical connection?
A. Yes. Mrs. Raso was also present because she wanted
me to sign a promissory note that if I have no cash to
pay that P1,750.00 allege (sic) penalty then I should sign
her promissory note so that I will not also be disconnected.
[33]
 (Emphases supplied)
Under the foregoing circumstances, it is clear that petitioners
should be held liable for damages under Article 19, in relation
to Article 21, of the Civil Code. While it appears that petitioners
were engaged in a legal act, i.e., exacting compliance with the
requirements for the installation of respondent's electricity in
his farmhouse, the circumstances of this case show that the
same was conducted contrary to morals and good customs,
and were in fact done with the intent to cause injury to
respondent. Petitioners did not only fail to apprise respondent
of the proper procedure to expedite compliance with the
requirements, they also misled him to believe that everything
can be settled, extorted money from him when only a meager
amount was due, and worse, publicly humiliated him in front of
many people which ended up in the disconnection of his
electricity altogether. To be sure, the clean hands doctrine -
which was invoked by petitioners herein - should not apply in
their favor, considering that while respondent may have
technically failed to procure the required BAPA certification and
proceeded with the tapping, the same was not due to his lack
of effort or intention in complying with the rules in good faith.
As exhibited above, it was, in fact, petitioners' own acts which
made compliance with the rules impossible. Hence, respondent
was actually free from fault, negating the application of the
clean hands doctrine, to wit:[34]
 
Parties who do not come to court with clean hands cannot be
allowed to profit from their own wrongdoing. The action (or
inaction) of the party seeking equity must be "free from fault,
and he must have done nothing to lull his adversary into
repose, thereby obstructing and preventing vigilance on the
part of the latter."[35]
That being said, the awards of damages in favor of respondent
are therefore warranted. In this case, both the RTC and the CA
awarded actual, moral, and exemplary damages, including
attorney's fees and litigation expenses.
Actual damages are such compensation or damages for an
injury that will put the injured party in the position in which he
had been before he was injured. They pertain to such injuries
or losses that are actually sustained and susceptible of
measurement. To justify an award of actual damages, there
must be competent proof of the actual amount of loss. [36] In
this case, the award of actual damages in the amount of
P451.65 was based on the evidence presented as found by
both the RTC and CA. Hence, finding no cogent reason to the
contrary, and given that the same was supported by receipts,
[37]
 the said award is sustained.
However, the Court finds otherwise with respect to the awards
of moral and exemplary damages, as well as attorney's fees
and litigation expenses (in the amounts of P200,000.00,
P100,000.00, P50,000.00, and P20,000.00, respectively) which
appear to be excessive considering the circumstances of this
case. Notably, the amounts of moral and exemplary damages
may be discretionary upon the court depending on the
attendant circumstances of the case.[38]
Under Article 2219[39] of the Civil Code, moral damages may be
recovered, among others, in acts and actions referred to in
Page 186 of 304
Article 21 of the same Code. "[A]n award of moral damages  
must be anchored on a clear showing that the party claiming
the same actually experienced mental anguish, besmirched (a) P451.65 as actual damages;
reputation, sleepless nights, wounded feelings, or similar
 
injury."[40] In this case, the aforementioned malicious acts, as
proven through the evidence presented by respondent, clearly
(b) P50,000.00 as moral damages;
caused moral suffering to the latter, for which petitioners
should be made liable. As intimated in one case, [41] although  
mental anguish and emotional sufferings of a person are not
quantifiable with mathematical precision, the Court must (c) P50,000.00 as exemplary damages; and
nonetheless strive to set an amount that would restore
respondent to his moral status quo ante.[42] In this regard, the  
Court finds it reasonable to award the amount of P50,000.00
(d) attorney's fees and litigation expenses in the amount of
as moral damages, considering the meager amount of actual
P25,000.00.
damages awarded despite the public humiliation and distress
 
suffered by respondent throughout his ordeal.
WHEREFORE, the petition is DENIED. The Decision dated
Meanwhile, case law states that "exemplary or corrective
February 9, 2017 and the Resolution dated May 19, 2017 of
damages are imposed by way of example or correction for the
the Court of Appeals in CA-G.R. CV No. 04480 are
public good, in addition to moral, temperate, liquidated, or
hereby AFFIRMED WITH MODIFICATION in that
compensatory damages. The award of exemplary
petitioners Ismael G. Lomarda and Crispina Raso are ordered
damages is allowed by law as a warning to the public
to jointly and severally pay respondent Elmer Fudalan the
and as a deterrent against the repetition of socially
following amounts: (a) P451.65 as actual damages; (b)
deleterious actions." In this case, the Court finds the award
P50,000.00 as moral damages; (c) P50,000.00 as exemplary
of exemplary damages in the amount of P50,000.00
damages; and (d) attorney's fees and litigation expenses in the
reasonable in order to serve as a reminder against
amount of P25,000.00.
unscrupulous persons - as herein petitioners - who take undue
advantage of their positions to the detriment of the consuming
SO ORDERED.
public.

As regards attorney's fees and litigation costs, "Article 2208 of

the New Civil Code of the Philippines states the policy that
should guide the courts when awarding attorney's fees to a
litigant. As a general rule, the parties may stipulate the
recovery of attorney's fees. In the absence of such stipulation,
this article restrictively enumerates the instances when these
fees may be recovered," to wit:
 
Art. 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded; x x x
 
In view of the award of exemplary damages, the Court finds it
proper to award attorney's fees and litigation costs but in the
reduced amount of P25,000.00.
In fine, the Court holds that petitioners, as joint tortfeasors
under Article 21 of the Civil Code, are jointly and severally
liable to pay respondent the following amounts:
Banaria vs Banaria
DIVISION ADELAIDA C. NAVARRO-BANARIA,
PETITIONER, VS. ERNESTO A. BANARIA, PANFILO A.
BANARIA, GRACIA SEVERA BANARIA-ESPIRITU, REINA
CLARA BANARIA- MAGTOTO, MARCELINO S. BANARIA,
PAULINA BANARIA-GELIDO, MARIA LOURDES DIVINE
BANARIA-DURAN, GRACIA ISABELITA BANARIA-
ESPIRITU, GEOFFREY BANARIA-ESPIRITU, ANNE
MARIE ESPIRITU-PAPPANIA, JUSTIN BANARIA-
ESPIRITU, RESPONDENTS.
DECISION
REYES, J. JR., J.:
This resolves the petition for review on certiorari1 filed under
Rule 45 of the Rules of Civil Procedure seeking to review the
Decision2 dated October 15, 2014 of the Honorable Court of
Appeals (Special First Division) in CA-G.R. No. 97264, denying
the appeal of herein petitioner by affirming with modification
the Judgment3 dated May 23, 2011 rendered by the Regional
Trial Court (RTC), Branch 216 (Quezon City) in Civil Case No.
Q-0452212, and its Resolution4 dated April 14, 2015, denying
petitioner's motion for reconsideration.
The Antecedents
Page 187 of 304
The instant petition arose from the Complaint filed by
respondents for Damages with the RTC of Quezon City against
petitioner.
As borne by the records of the case, respondents are brother
(Marcelino S. Banaria), sister (Paulina Banaria-Gelido), sons
(Ernesto A. Banaria and Panfilo A. Banaria), daughters (Gracia
Severa Banaria-Espiritu and Reina Clara Banaria-Magtoto),
granddaughters (Gracia Isabelita Banaria-Espiritu, Anne Marie
Espiritu-Pappania, Maria Lourdes Divine Banaria-Duran), and
grandsons (Geoffrey Banaria-Espiritu and Justin Banaria-
Espiritu) of the late Pasacasio S. Banaria, Sr. (Pascasio), while
petitioner Adelaida C. Navarro-Banaria (Adelaida) is the legal
wife of Pascasio and stepmother of the Banaria siblings.5
Pascasio, the family patriarch, at the time of the filing of the
complaint, was already frail and suffering from physical and
mental infirmity incapacitating him to fully functioning on his
own without any assistance.6
The action for damages of respondents stemmed from the
alleged bad faith, malice, and deliberate failure of Adelaida to
keep her word and honor her promise to bring Pascasio to his
90th birthday celebration held on February 22, 2004. Such
special event was prepared by the respondents and the non-
appearance of Pascasio during the event allegedly caused loss
and injury to the respondents.7
Respondents alleged that the planning of the event started as
early as February 2003 or a year before the planned 90th
birthday celebration to be held on February 22, 2004. Between
November 2003 and January 2004, respondents were in
continuous contact with Adelaida to remind her of the
upcoming event. Adelaida, for her part, confirmed Pascasio's
attendance during the event although it coincides with the
death anniversary of Adelaida's mother. The plan was to bring
Pascasio to the venue in the early morning of February 22,
2004 before proceeding to her hometown in Tarlac. Adelaida
promised respondents that she will try her best to attend the
birthday celebration in the evening after going to Tarlac.8
On February 13, 2004, Reina and Gracia Severa, who are both
residing in the United States, arrived in the country to attend
the birthday celebration of their father. They were able to visit
their father and Adelaida in their home on February 14 and 15,
2004. Adelaida promised them during their visit that Pascasio
would be present in his scheduled 90n birthday celebration.9
However, much to the dismay of the Banaria siblings as well as
their guests, Pascasio was nowhere to be found in his 90th
birthday celebration. Respondents continuously called Adelaida
but they were not able to contact her. Almost 200 guests were
at the venue waiting for Pascasio to come. The siblings
deemed it proper to continue the celebration even without the
birthday celebrant himself. Worried that there might be
something untoward that happened to their father,
respondents went to the nearest police station to report
Pascasio as a missing person. However, they were advised by
the police officers that before a person can be considered
missing, there should be a 24-hour waiting period. Thus,
respondents just entered their concern in the police blotter.
The next day, the missing person report was officially made
after Pascasio and Adelaida have not been seen or heard for
more than 24 hours.10
Respondents called and went to the Securities and Exchange
Commission (SEC), where Adelaida works but they failed to see
her there. Afterwards, respondent Paulina was able to talk to
one of Adelaida's maids named Kit. Kit told Paulina that she
went to Tarlac with Pascasio and Adelaida in the morning of
February 21, 2004 but went their separate ways upon reaching
said province. However, when asked about the whereabouts of
Pascasio and Adelaida, she said that she did not know where
they were.11
In the evening of February 23, 2004, Marcelino, Pascasio's
brother, told the other respondents that Pascasio and Adelaida
were at their residence then at 7-B Sigma Drive, Alpha village,
Quezon City. Respondents went to the said place to ask
Adelaida her reason why Pascasio was not able to attend the
birthday celebration. Adelaida reasoned that Pascasio did not
want to go to the party. When asked why Adelaida broke her
commitment to bring Pascasio to the party, Adelaida uttered
the words, "I am the wife."12
Thus, the Complaint for Damages filed by respondents against
Adelaida.
In response, Adelaida rebutted the allegations of the
respondents by saying that she was not privy to the
respondents' planned birthday celebration for Pascasio. She
also said that she deemed it wise to spare Pascasio of the
embarrassment and humiliation of defecating and urinating
without regard to the people around him brought about by his
advanced age.13
Eventually, the RTC rendered its May 23, 2011 Decision, which
ordered petitioner to pay the respondents' travel expenses,
actual damages, moral damages, exemplary damages, and
attorney's fees. The fallo14 of the decision reads:
WHEREFORE, in view of the foregoing considerations,
judgment is hereby rendered in favor of plaintiffs and against
the defendant Adelaida C. Navarro-Banaria ordering said
defendant to pay unto the plaintiffs the following:
1. the total amount of $3,619.00 (US Dollars) which may be
paid in Philippine Currency computed at the exchange rate at
the time of payment, representing the total sum for their
(plaintiffs) travel expenses;
2. the amount of P61,200.00, Philippine currency, for the food
and refreshments spent during the birthday of Pascasio S.
Banana, Sr., which the latter was not able to attend; the
Page 188 of 304
amount of P3,000.00 for the birthday cake; and the amount of
P3,275.00 for the balloon arrangements;
3. the amount of P60,000.00, Philippine Currency, for each and
every plaintiff, as and by way of moral damages;
4. the amount of P50,000.00, Philippine Currency, for the
herein plaintiffs, as and by way of exemplary damages;
5. the amount of P60,000.00, Philippine Currency, as and by
way of attorney's fees; and the costs of suit.
SO ORDERED.
Aggrieved, petitioner elevated the case to the Court of
Appeals, which, through the assailed October 15, 2014
Decision, affirmed with modification the Decision of the RTC.
The fallo15 of the decision of the appellate court reads:
WHEREFORE, premises considered, the appeal is
hereby DENIED. The Judgment dated 23 May 2011 of the
Regional Trial Court-Branch 216 (Quezon City)
is AFFIRMED with the following MODIFICATIONS: a) the
amount of $3,619.00 (US Dollars) awarded as actual damages
in favor of the plaintiffs-appellees is DELETED for lack of
factual and legal basis; b) the amount of moral damages
awarded for ALL the plaintiffs-appellees is REDUCED to a fixed
amount of Php300,000.00; c) the amount of exemplary
damages awarded in favor of the plaintiffs-appellees is
REDUCED to Php30,000.00; and d) the amount of attorney's
fees awarded to plaintiffs-appellees is likewise REDUCED to
php50,000.00.
The rest of the challenged Judgment stands.
SO ORDERED.
Despite petitioner's motion for reconsideration, the CA affirmed
its October 15, 2014 Decision via the April 14, 2015 Resolution.
Hence, this petition.
The Issues
The petitioner anchors her prayer for the reversal of the
October 15, 2014 Decision and the April 14, 2015 Resolution
based on the following issues:
A. Whether the Hon. Court of Appeals erred in ruling that
petitioner violated Articles 19 and 21 of the Civil Code
regarding Human Relations; and
B. Whether the Hon. Court of Appeals erred in granting
damages to the respondents.
The Court's Ruling
After a careful perusal of the arguments presented and the
evidence submitted, the Court finds no merit in the petition.
Petitioner contends that she did not commit any violation
under Article 19 of the Civil Code by alleging that the
testimonies of the respondents were pure surmises and
conjectures. Aside from that, petitioner avers that respondents
failed to prove bad faith, malice and ill motive on her part.
Because of this, petitioner posits that there can be no award of
actual, moral and exemplary damages under the principle
of damnum absque injuria or damage without injury since her
legal right was not exercised in bad faith and with no intention
to injure another.
Article 19 of the Civil Code provides that every person in the
exercise of his rights and in the performance of his duties must
act with justice, give everyone his due, and observe honesty
and good faith. The principle embodied in this provision is
more commonly known as the "abuse of right principle." The
legal consequence should anyone violate this fundamental
provision is found in Articles 20 and 21 of the Civil Code. The
correlation between the two provisions are showed in the case
of GF EQUITY, Inc. v. Valenzona, to wit:
[Article 19, known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights but
also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore,
recognizes a primordial limitation on all rights; that in their
exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined
in Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct
for the government of human relations and for the
maintenance of social order, it does not provide a remedy for
its violation. Generally, an action for damages under either
Article 20 or Article 21 would be proper.16 (Emphasis supplied)
While Article 19 of the New Civil Code may have been intended
as a mere declaration of principle, the "cardinal law on human
conduct" expressed in said article has given rise to certain
rules, e.g., that where a person exercises his rights but does
so arbitrarily or unjustly or performs his duties in a manner
that is not in keeping with honesty and good faith, he opens
himself to liability. The elements of an abuse of rights under
Article 19 are: (1) there is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of prejudicing or
injuring another.17
Consequently, when Article 19 is violated, an action for
damages is proper under Article 20 and 21 of the New Civil
Code. Article 20 pertains to damages arising from a violation of
law.18
Page 189 of 304
For starters, there is no question that as legal wife and
guardian of Pascasio, who is physically and mentally infirm,
Adelaida has the principal and overriding decision when it
comes to the affairs of her husband including the celebration
of the latter's 90th birthday.
However, it must be noted Adelaida's right, as with any rights,
cannot be exercised without limitation. The exercise of this
right must conform to the exacting standards of conduct
enunciated in Article 19. Adelaida was clearly remiss in this
aspect.
Glaring is the fact that long before the scheduled date of
Pascasio's 90th birthday celebration, Adelaida was already
informed about the event. As early as February 2003 or a year
before the scheduled event, Adelaida was already reminded of
the event by the respondents to which she confirmed
Pascasio's attendance. Even though Adelaida alleges that she
was not privy to any birthday celebration for Pascasio, the fact
remains that she was continuously informed and reminded
about the scheduled event. She even contributed P5,000.00 for
the costs.
Following Adelaida's testimony that Pascasio had already
decided not to attend his birthday celebration a day before
such event, she should have contacted the respondents
immediately for the respondents to be able to take appropriate
action. Adelaida knew fully well that the respondents already
spent a considerable amount of money and earnest efforts
were already made to ensure the success of the event. The
least that Adelaida could have done was to inform the
respondents immediately of any unforeseen circumstance that
would hinder its success and to avert any further damage or
injury to the respondents. Moreover, considering that
numerous guests were invited and have confirmed their
attendance, she placed the respondents in a very embarrassing
situation.
Instead of making good on her prior commitment, Adelaida
allegedly followed Pascasio's wish of going to Tarlac and
arrived thereat in the afternoon of February 21, 2004. At that
time, Adelaida still had the opportunity to contact the
respondents and inform them that they will not be able to
come, but she did not. Her excuse, that Pascasio grabbed her
cellular phone and caused damage to it, is feeble and
unrealistic. We find incredulous that Pascasio, who was
allegedly infirm, would be able to grab the cellphone from
Adelaida and throw it away, when he cannot even move on his
own without any assistance. And even if true, there are
certainly other means of communication aside from her
cellphone if she really wanted to call the respondents.
Adelaida also neglected to contact the respondents
immediately after their return to Manila on February 23, 2004.
If she was sincere in bringing Pascasio to his birthday
celebration, then she would have immediately called the
respondents upon returning to Manila to inform them of their
whereabouts and to state the reason for Pascasio non-
attendance.
We find it dubious that Pascasio would refuse to attend his
birthday celebration. Respondents have sufficiently established
that it was an annual tradition for the family to celebrate the
birthday of their father Pascasio. Besides, the allegation that
Pascasio refused to attend his birthday celebration because of
an alleged misunderstanding with his two sons was not duly
proven. Common sense dictates that he should have conveyed
about the matter to Reina and Gracia Severa when they visited
him on February 14 and 15, 2004, but he did not.
All in all, the foregoing shows that Adelaida intentionally failed
to bring Pascasio to the birthday celebration prepared by the
respondents thus violating Article 19 of the Civil Code on the
principle of abuse of right. Her failure to observe good faith in
the exercise of her right as the wife of Pascasio caused loss
and injury on the part of the respondents, for which they must
be compensated by way of damages pursuant to Article 21 of
the Civil Code.
Actual damages are compensation for an injury that will put
the injured party in the position where he/she was before the
injury. They pertain to such injuries or losses that are actually
sustained and susceptible of measurement. Except as provided
by law or stipulation, a party is entitled to adequate
compensation only for such pecuniary loss as is duly proven.
Basic is the rule that to recover actual damages, not only must
the amount of loss be capable of proof; it must also be actually
proven with a reasonable degree of certainty, premised upon
competent proof or the best evidence obtainable.19
We find proper the modification made by the CA to delete the
award of $3,619.00 (US Dollars) as actual damages for lack of
factual and legal bases. We also agree that actual damages in
the amount of P61,200.00 for the food and refreshments spent
during the birthday of Pascasio, the amount of P3,000.00 for
the birthday cake and the amount of P3,275.00 for the balloon
arrangements should be paid as these expenses were incurred
by respondents for Pascasio's grand birthday celebration.
As for moral damages, the CA is correct in granting a lump
sum of P300,000.00. Moral damages are not punitive in nature
but are designed to compensate and alleviate in some way the
physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury unjustly caused to a
person.20 In the instant case, the respondents clearly suffered
serious anxiety, humiliation and embarrassment in front of all
guests who expected that Pascasio would be present in the
event.
The award of exemplary damages of P30,000.00 is likewise
affirmed. Exemplary damages, which are awarded by way of
example or correction for the public good, may be recovered if
Page 190 of 304
a person acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner towards another party, as in this
case.21 The aim of awarding exemplary damages is to deter
serious wrongdoings.22
By the same token, the CA correctly awarded attorney's fees in
the amount of P50,000.00 in favor of the respondents
considering that they were constrained to file a case because
of petitioner's acts characterized by bad faith, malice and
wanton attitude which were intentional to inflict damage upon
the former.
WHEREFORE, the Petition is DENIED. The October 15, 2014
of the Court of Appeals is AFFIRMED.
SO ORDERED.
Buenaventura vs CA
NOEL BUENAVENTURA, Petitioner, vs. COURT OF
APPEALS and ISABEL LUCIA SINGH BUENAVENTURA,
respondents.
x-------------------x
G.R. No. 127449
NOEL BUENAVENTURA, Petitioner, vs. COURT OF
APPEALS and ISABEL LUCIA SINGH BUENAVENTURA,
Respondents.
AZCUNA, J.:
These cases involve a petition for the declaration of nullity of
marriage, which was filed by petitioner Noel Buenaventura on
July 12, 1992, on the ground of the alleged psychological
incapacity of his wife, Isabel Singh Buenaventura, herein
respondent. After respondent filed her answer, petitioner, with
leave of court, amended his petition by stating that both he
and his wife were psychologically incapacitated to comply with
the essential obligations of marriage. In response, respondent
filed an amended answer denying the allegation that she was
psychologically incapacitated.1
On July 31, 1995, the Regional Trial Court promulgated a
Decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into between
plaintiff Noel A. Buenaventura and defendant Isabel Lucia
Singh Buenaventura on July 4, 1979, null and void ab initio;
2) Ordering the plaintiff to pay defendant moral damages in
the amount of 2.5 million pesos and exemplary damages of 1
million pesos with 6% interest from the date of this decision
plus attorney’s fees of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of
litigation of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal
partnership property[,] particularly the plaintiff’s
separation/retirement benefits received from the Far East Bank
[and] Trust Company[,] by ceding, giving and paying to her
fifty percent (50%) of the net amount of P3,675,335.79
or P1,837,667.89 together with 12% interest per annum from
the date of this decision and one-half (1/2) of his outstanding
shares of stock with Manila Memorial Park and Provident Group
of Companies;
 
5) Ordering him to give a regular support in favor of his son
Javy Singh Buenaventura in the amount of P15,000.00
monthly, subject to modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh
Buenaventura to his mother, the herein defendant; and
 
7) Hereby authorizing the defendant to revert back to the use
of her maiden family name Singh.
Let copies of this decision be furnished the appropriate civil
registry and registries of properties.
SO ORDERED.2
Petitioner appealed the above decision to the Court of Appeals.
While the case was pending in the appellate court, respondent
filed a motion to increase the P15,000 monthly
support pendente lite of their son Javy Singh Buenaventura.
Page 191 of 304
Petitioner filed an opposition thereto, praying that it be denied BANK AND TRUST CO., WITH 12% INTEREST THEREON FROM
or that such incident be set for oral argument.3 THE DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID
RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE
  PROPERTY OF NOEL, AND ALSO TO DELIVER TO DEFENDANT-
APPELLEE ONE-HALF OF HIS SHARES OF STOCK WITH THE
On September 2, 1996, the Court of Appeals issued a
MANILA MEMORIAL PARK AND THE PROVIDENT GROUP OF
Resolution increasing the support pendente
COMPANIES, ALTHOUGH SAID SHARES OF STOCK WERE
lite to P20,000.4 Petitioner filed a motion for reconsideration
ACQUIRED BY NOEL BEFORE HIS MARRIAGE TO RESPONDENT
questioning the said Resolution.5
ISABEL AND ARE, THEREFORE, AGAIN HIS EXCLUSIVE
PROPERTIES; AND
 
 
On October 8, 1996, the appellate court promulgated a
Decision dismissing petitioner’s appeal for lack of merit and
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER
affirming in toto the trial court’s decision.6 Petitioner filed a
THE PARTIES’ MINOR CHILD TO DEFENDANT-APPELLEE
motion for reconsideration which was denied. From the
WITHOUT ASKING THE CHILD (WHO WAS ALREADY 13 YEARS
abovementioned Decision, petitioner filed the instant Petition
OLD AT THAT TIME) HIS CHOICE AS TO WHOM, BETWEEN
for Review on Certiorari.
HIS TWO PARENTS, HE WOULD LIKE TO HAVE CUSTODY
OVER HIS PERSON.11
 
 
On November 13, 1996, through another Resolution, the Court
of Appeals denied petitioner’s motion for reconsideration of the
In the Petition for Certiorari, petitioner advances the following
September 2, 1996 Resolution, which increased the monthly
contentions:
support for the son.7 Petitioner filed a Petition for Certiorari to
question these two Resolutions.  

  THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION

WHEN IT REFUSED TO SET RESPONDENT’S MOTION FOR
On July 9, 1997, the Petition for Review on Certiorari8 and the
INCREASED SUPPORT FOR THE PARTIES’ SON FOR
Petition for Certiorari9 were ordered consolidated by this
HEARING.12
Court.10
 
 
THERE WAS NO NEED FOR THE COURT OF APPEALS TO
In the Petition for Review on Certiorari petitioner claims that
INCREASE JAVY’S MONTHLY SUPPORT OF P15,000.00 BEING
the Court of Appeals decided the case not in accord with law
GIVEN BY PETITIONER EVEN AT PRESENT PRICES.13
and jurisprudence, thus:
 
 
IN RESOLVING RESPONDENT’S MOTION FOR THE INCREASE
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL
OF JAVY’S SUPPORT, THE COURT OF APPEALS SHOULD HAVE
DAMAGES IN THE AMOUNT OF P2.5 MILLION AND
EXAMINED THE LIST OF EXPENSES SUBMITTED BY
EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST
RESPONDENT IN THE LIGHT OF PETITIONER’S OBJECTIONS
FROM THE DATE OF ITS DECISION, WITHOUT ANY LEGAL
THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS
AND MORAL BASIS;
ENTITLED TO A P5,000 INCREASE IN SUPPORT AS SAID
AMOUNT IS "TOO MINIMAL."14
 
 
2. WHEN IT AWARDED P100,000.00 ATTORNEY’S FEES
AND P50,000.00 EXPENSES OF LITIGATION, PLUS COSTS, TO
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN
DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL
PETITIONER AN OPPORTUNITY TO PROVE HIS PRESENT
BASIS;
INCOME TO SHOW THAT HE CANNOT AFFORD TO INCREASE
JAVY’S SUPPORT.15
 
 
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY
DEFENDANT-APPELLEE ONE-HALF OR P1,837,667.89 OUT OF
HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST
Page 192 of 304
With regard to the first issue in the main case, the Court of
Appeals articulated:
 
On Assignment of Error C, the trial court, after findings of fact
ascertained from the testimonies not only of the parties
particularly the defendant-appellee but likewise, those of the
two psychologists, awarded damages on the basis of Articles
21, 2217 and 2229 of the Civil Code of the Philippines.
 
Thus, the lower court found that plaintiff-appellant deceived
the defendant-appellee into marrying him by professing true
love instead of revealing to her that he was under heavy
parental pressure to marry and that because of pride he
married defendant-appellee; that he was not ready to enter
into marriage as in fact his career was and always would be his
first priority; that he was unable to relate not only to
defendant-appellee as a husband but also to his son, Javy, as
a father; that he had no inclination to make the marriage work
such that in times of trouble, he chose the easiest way out,
that of leaving defendant–appellee and their son; that he had
no desire to keep defendant-appellee and their son as proved
by his reluctance and later, refusal to reconcile after their
separation; that the aforementioned caused defendant-
appellee to suffer mental anguish, anxiety, besmirched
reputation, sleepless nights not only in those years the parties
were together but also after and throughout their separation.
 
Plaintiff-appellant assails the trial court’s decision on the
ground that unlike those arising from a breach in ordinary
contracts, damages arising as a consequence of marriage may
not be awarded. While it is correct that there is, as yet, no
decided case by the Supreme Court where damages by reason
of the performance or non-performance of marital obligations
were awarded, it does not follow that no such award for
damages may be made.
Defendant-appellee, in her amended answer, specifically
prayed for moral and exemplary damages in the total amount
of 7 million pesos. The lower court, in the exercise of its
discretion, found full justification of awarding at least half of
what was originally prayed for. We find no reason to disturb
the ruling of the trial court.16
The award by the trial court of moral damages is based on
Articles 2217 and 21 of the Civil Code, which read as follows:
 
ART. 2217. Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of
the defendant’s wrongful act or omission.
 
ART. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.
 
The trial court referred to Article 21 because Article 2219 17 of
the Civil Code enumerates the cases in which moral damages
may be recovered and it mentions Article 21 as one of the
instances. It must be noted that Article 21 states that the
individual must willfully cause loss or injury to another. There
is a need that the act is willful and hence done in complete
freedom. In granting moral damages, therefore, the trial court
and the Court of Appeals could not but have assumed that the
acts on which the moral damages were based were done
willfully and freely, otherwise the grant of moral damages
would have no leg to stand on.
 
On the other hand, the trial court declared the marriage of the
parties null and void based on Article 36 of the Family Code,
due to psychological incapacity of the petitioner, Noel
Buenaventura. Article 36 of the Family Code states:
 
A marriage contracted by any party who, at the time of the
celebration, was psychologically incapacitated to comply with
the essential marital obligations of marriage, shall likewise be
void even if such incapacity becomes manifest only after its
solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that causes
a party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their
mutual obligations to live together, observe love, respect and
fidelity and render help and support. There is hardly any doubt
that the intendment of the law has been to confine the
meaning of "psychological incapacity" to the most serious
cases of personality disorders clearly demonstrative of
Page 193 of 304
an utter insensitivity or inability to give meaning and
significance to the marriage. . . .18
The Court of Appeals and the trial court considered the acts of
the petitioner after the marriage as proof of his psychological
incapacity, and therefore a product of his incapacity or inability
to comply with the essential obligations of marriage.
Nevertheless, said courts considered these acts as willful and
hence as grounds for granting moral damages. It is
contradictory to characterize acts as a product of psychological
incapacity, and hence beyond the control of the party because
of an innate inability, while at the same time considering the
same set of acts as willful. By declaring the petitioner as
psychologically incapacitated, the possibility of awarding moral
damages on the same set of facts was negated. The award of
moral damages should be predicated, not on the mere act of
entering into the marriage, but on specific evidence that it was
done deliberately and with malice by a party who had
knowledge of his or her disability and yet willfully concealed
the same. No such evidence appears to have been adduced in
this case.
For the same reason, since psychological incapacity means that
one is truly incognitive of the basic marital covenants that one
must assume and discharge as a consequence of marriage, it
removes the basis for the contention that the petitioner
purposely deceived the private respondent. If the private
respondent was deceived, it was not due to a willful act on the
part of the petitioner. Therefore, the award of moral damages
was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows
that the grant of exemplary damages cannot stand since the
Civil Code provides that exemplary damages are imposed in
addition to moral, temperate, liquidated or compensatory
damages.19
With respect to the grant of attorney’s fees and expenses of
litigation the trial court explained, thus:
Regarding Attorney’s fees, Art. 2208 of the Civil Code
authorizes an award of attorney’s fees and expenses of
litigation, other than judicial costs, when as in this case the
plaintiff’s act or omission has compelled the defendant to
litigate and to incur expenses of litigation to protect her
interest (par. 2), and where the Court deems it just and
equitable that attorney’s fees and expenses of litigation should
be recovered. (par. 11)20
The Court of Appeals reasoned as follows:
 
On Assignment of Error D, as the award of moral and
exemplary damages is fully justified, the award of attorney’s
fees and costs of litigation by the trial court is likewise fully
justified.21
The acts or omissions of petitioner which led the lower court to
deduce his psychological incapacity, and his act in filing the
complaint for the annulment of his marriage cannot be
considered as unduly compelling the private respondent to
litigate, since both are grounded on petitioner’s psychological
incapacity, which as explained above is a mental incapacity
causing an utter inability to comply with the obligations of
marriage. Hence, neither can be a ground for attorney’s fees
and litigation expenses. Furthermore, since the award of moral
and exemplary damages is no longer justified, the award of
attorney’s fees and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank
and Trust Co. and the shares of stock in the Manila Memorial
Park and the Provident Group of Companies, the trial court
said:
The third issue that must be resolved by the Court is what to
do with the assets of the conjugal partnership in the event of
declaration of annulment of the marriage. The Honorable
Supreme Court has held that the declaration of nullity of
marriage carries ipso facto a judgment for the liquidation of
property (Domingo v. Court of Appeals, et al., G.R. No.
104818, Sept. 17, 1993, 226 SCRA, pp. 572 – 573, 586). Thus,
speaking through Justice Flerida Ruth P. Romero, it was ruled
in this case:
When a marriage is declared void ab initio, the law states that
the final judgment therein shall provide for the liquidation,
partition and distribution of the properties of the spouses, the
custody and support of the common children and the delivery
of their presumptive legitimes, unless such matters had been
adjudicated in the previous proceedings.
Page 194 of 304
The parties here were legally married on July 4, 1979, and
therefore, all property acquired during the marriage, whether
the acquisition appears to have been made, contracted or
registered in the name of one or both spouses, is presumed to
be conjugal unless the contrary is proved (Art. 116, New
Family Code; Art. 160, Civil Code). Art. 117 of the Family Code
enumerates what are conjugal partnership properties. Among
others they are the following:
 
1) Those acquired by onerous title during the marriage at the
expense of the common fund, whether the acquisition be for
the partnership, or for only one of the spouses;
 
2) Those obtained from the labor, industry, work or profession
of either or both of the spouses;
3) The fruits, natural, industrial, or civil, due or received during
the marriage from the common property, as well as the net
fruits from the exclusive property of each spouse. . . .
Applying the foregoing legal provisions, and without prejudice
to requiring an inventory of what are the parties’ conjugal
properties and what are the exclusive properties of each
spouse, it was disclosed during the proceedings in this case
that the plaintiff who worked first as Branch Manager and later
as Vice-President of Far East Bank & Trust Co. received
separation/retirement package from the said bank in the
amount of P3,701,500.00 which after certain deductions
amounting to P26,164.21 gave him a net amount
of P3,675,335.79 and actually paid to him on January 9, 1995
(Exhs. 6, 7, 8, 9, 10, 11). Not having shown debts or
obligations other than those deducted from the said
retirement/separation pay, under Art. 129 of the Family Code
"The net remainder of the conjugal partnership properties shall
constitute the profits, which shall be divided equally between
husband and wife, unless a different proportion or division was
agreed upon in the marriage settlement or unless there has
been a voluntary waiver or forfeiture of such share as provided
in this Code." In this particular case, however, there had been
no marriage settlement between the parties, nor had there
been any voluntary waiver or valid forfeiture of the defendant
wife’s share in the conjugal partnership properties. The
previous cession and transfer by the plaintiff of his one-half
(1/2) share in their residential house and lot covered by T.C.T.
No. S-35680 of the Registry of Deeds of Parañaque, Metro
Manila, in favor of the defendant as stipulated in their
Compromise Agreement dated July 12, 1993, and approved by
the Court in its Partial Decision dated August 6, 1993, was
actually intended to be in full settlement of any and all
demands for past support. In reality, the defendant wife had
allowed some concession in favor of the plaintiff husband, for
were the law strictly to be followed, in the process of
liquidation of the conjugal assets, the conjugal dwelling and
the lot on which it is situated shall, unless otherwise agreed
upon by the parties, be adjudicated to the spouse with whom
their only child has chosen to remain (Art. 129, par. 9). Here,
what was done was one-half (1/2) portion of the house was
ceded to defendant so that she will not claim anymore for past
unpaid support, while the other half was transferred to their
only child as his presumptive legitime.
 
Consequently, nothing yet has been given to the defendant
wife by way of her share in the conjugal properties, and it is
but just, lawful and fair, that she be given one-half (1/2) share
of the separation/retirement benefits received by the plaintiff
the same being part of their conjugal partnership properties
having been obtained or derived from the labor, industry, work
or profession of said defendant husband in accordance with
Art. 117, par. 2 of the Family Code. For the same reason, she
is entitled to one-half (1/2) of the outstanding shares of stock
of the plaintiff husband with the Manila Memorial Park and the
Provident Group of Companies.22
The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the order
of the trial court for him to give one-half of his
separation/retirement benefits from Far East Bank & Trust
Company and half of his outstanding shares in Manila Memorial
Park and Provident Group of Companies to the defendant-
appellee as the latter’s share in the conjugal partnership.
 
On August 6, 1993, the trial court rendered a Partial Decision
approving the Compromise Agreement entered into by the
parties. In the same Compromise Agreement, the parties had
agreed that henceforth, their conjugal partnership is dissolved.
Thereafter, no steps were taken for the liquidation of the
conjugal partnership.
 
Finding that defendant-appellee is entitled to at least half of
the separation/retirement benefits which plaintiff-appellant
received from Far East Bank & Trust Company upon his
retirement as Vice-President of said company for the reason
that the benefits accrued from plaintiff–appellant’s service for
the bank for a number of years, most of which while he was
married to defendant-appellee, the trial court adjudicated the
Page 195 of 304
same. The same is true with the outstanding shares of
plaintiff-appellant in Manila Memorial Park and Provident Group
of Companies. As these were acquired by the plaintiff-appellant
at the time he was married to defendant-appellee, the latter is
entitled to one-half thereof as her share in the conjugal
partnership. We find no reason to disturb the ruling of the trial
court.23
 
Since the present case does not involve the annulment of a
bigamous marriage, the provisions of Article 50 in relation to
Articles 41, 42 and 43 of the Family Code, providing for the
dissolution of the absolute community or conjugal partnership
of gains, as the case may be, do not apply. Rather, the general
rule applies, which is that in case a marriage is declared
void ab initio, the property regime applicable and to be
liquidated, partitioned and distributed is that of equal co-
ownership.
 
In Valdes v. Regional Trial Court, Branch 102, Quezon
City,24 this Court expounded on the consequences of a void
marriage on the property relations of the spouses and specified
the applicable provisions of law:
 
The trial court correctly applied the law. In a void marriage,
regardless of the cause thereof, the property relations of the
parties during the period of cohabitation is governed by the
provisions of Article 147 or Article 148, such as the case may
be, of the Family Code. Article 147 is a remake of Article 144
of the Civil Code as interpreted and so applied in previous
cases; it provides:
 
ART. 147. When a man and a woman who are capacitated to
marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void
marriage, their wages and salaries shall be owned by them in
equal shares and the property acquired by both of them
through their work or industry shall be governed by the rules
on co-ownership.
In the absence of proof to the contrary, properties acquired
while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be
owned by them in equal shares. For purposes of this Article, a
party who did not participate in the acquisition by the other
party of any property shall be deemed to have contributed
jointly in the acquisition thereof if the former's efforts consisted
in the care and maintenance of the family and of the
household.
 
Neither party can encumber or dispose by acts inter vivos of
his or her share in the property acquired during cohabitation
and owned in common, without the consent of the other, until
after the termination of their cohabitation.
 
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case of
default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the
respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In
all cases, the forfeiture shall take place upon termination of the
cohabitation.
 
This peculiar kind of co-ownership applies when a man and a
woman, suffering no legal impediment to marry each other, so
exclusively live together as husband and wife under a void
marriage or without the benefit of marriage. The term
"capacitated" in the provision (in the first paragraph of the
law) refers to the legal capacity of a party to contract
marriage, i.e., any "male or female of the age of eighteen
years or upwards not under any of the impediments mentioned
in Articles 37 and 38" of the Code.
 
Under this property regime, property acquired by both spouses
through their work and industry shall be governed by the rules
on equal co-ownership. Any property acquired during the union
is prima facie presumed to have been obtained through their
joint efforts. A party who did not participate in the acquisition
of the property shall still be considered as having contributed
thereto jointly if said party's "efforts consisted in the care and
maintenance of the family household." Unlike the conjugal
partnership of gains, the fruits of the couple's separate
property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above
extent, has clarified Article 144 of the Civil Code; in addition,
the law now expressly provides that —
 
(a) Neither party can dispose or encumber by act[s] inter vivos
[of] his or her share in co-ownership property, without the
consent of the other, during the period of cohabitation; and
Page 196 of 304
(b) In the case of a void marriage, any party in bad faith shall
forfeit his or her share in the co-ownership in favor of their
common children; in default thereof or waiver by any or all of
the common children, each vacant share shall belong to the
respective surviving descendants, or still in default thereof, to
the innocent party. The forfeiture shall take place upon the
termination of the cohabitation or declaration of nullity of the
marriage.
 
… Appeals, to have been acquired during the union of the parties,
 
In deciding to take further cognizance of the issue on the
settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which had
jurisdiction to declare the marriage a nullity must be deemed
likewise clothed with authority to resolve incidental and
consequential matters. Nor did it commit a reversible error in
ruling that petitioner and private respondent own the "family
home" and all their common property in equal shares, as well
as in concluding that, in the liquidation and partition of the
property owned in common by them, the provisions on co-
ownership under the Civil Code, not Articles 50, 51 and 52, in
relation to Articles 102 and 129, of the Family Code, should
aptly prevail. The rules set up to govern the liquidation of
either the absolute community or the conjugal partnership of
gains, the property regimes recognized for valid and voidable
marriages (in the latter case until the contract is annulled), are
irrelevant to the liquidation of the co-ownership that exists
between common-law spouses. The first paragraph of Article
50 of the Family Code, applying paragraphs (2), (3), (4) and
(5) of Article 43, relates only, by its explicit terms,
to voidable marriages and, exceptionally, to void marriages
under Article 40 of the Code, i.e., the declaration of nullity of a
subsequent marriage contracted by a spouse of a prior void
marriage before the latter is judicially declared void. The latter
is a special rule that somehow recognizes the philosophy and
an old doctrine that void marriages are inexistent from the
very beginning and no judicial decree is necessary to establish
their nullity. In now requiring for purposes of remarriage, the
declaration of nullity by final judgment of the previously
contracted void marriage, the present law aims to do away
with any continuing uncertainty on the status of the second
marriage. It is not then illogical for the provisions of Article 43,
in relation to Articles 41 and 42, of the Family Code, on the
effects of the termination of a subsequent marriage contracted
during the subsistence of a previous marriage to be made
applicable pro hac vice. In all other cases, it is not to be
assumed that the law has also meant to have coincident
property relations, on the one hand, between spouses in valid
and voidable marriages (before annulment) and, on the other,
between common-law spouses or spouses of void marriages,
leaving to ordain, in the latter case, the ordinary rules on co-
ownership subject to the provision of Article 147 and Article
148 of the Family Code. It must be stressed, nevertheless,
even as it may merely state the obvious, that the provisions of
the Family Code on the "family home," i.e., the provisions
found in Title V, Chapter 2, of the Family Code, remain in force
and effect regardless of the property regime of the spouses. 25
 
Since the properties ordered to be distributed by the court a
quo were found, both by the trial court and the Court of
the same would be covered by the co-ownership. No fruits of a
separate property of one of the parties appear to have been
included or involved in said distribution. The liquidation,
partition and distribution of the properties owned in common
by the parties herein as ordered by the court a quo should,
therefore, be sustained, but on the basis of co-ownership and
not of the regime of conjugal partnership of gains.
 
As to the issue on custody of the parties over their only child,
Javy Singh Buenaventura, it is now moot since he is about to
turn twenty-five years of age on May 27, 200526 and has,
therefore, attained the age of majority.
 
With regard to the issues on support raised in the Petition
for Certiorari, these would also now be moot, owing to the fact
that the son, Javy Singh Buenaventura, as previously stated,
has attained the age of majority.
WHEREFORE, the Decision of the Court of Appeals dated
October 8, 1996 and its Resolution dated December 10, 1996
which are contested in the Petition for Review (G.R. No.
127449), are hereby MODIFIED, in that the award of moral
and exemplary damages, attorney’s fees, expenses of litigation
and costs are deleted. The order giving respondent one-half of
the retirement benefits of petitioner from Far East Bank and
Trust Co. and one-half of petitioner’s shares of stock in Manila
Memorial Park and in the Provident Group of Companies
is sustained but on the basis of the liquidation, partition
and distribution of the co-ownership and not of the
regime of conjugal partnership of gains. The rest of said
Decision and Resolution are AFFIRMED.
 
The Petition for Review on Certiorari (G.R. No. 127358)
contesting the Court of Appeals’ Resolutions of September 2,
1996 and November 13, 1996 which increased the
support pendente lite in favor of the parties’ son, Javy Singh
Page 197 of 304
Buenaventura, is now MOOT and ACADEMIC and is, P-5207  44,797               Robayca A. Ngilay          November
accordingly, DISMISSED. 11, 1986 

  P-5209  20,000               Omar Ngilay                  November

11, 1986 
No costs.
P-5211  29,990               Tayba Ngilay                 November
  11, 1986 

SO ORDERED. P-5212  48,055               Kiram Ngilay                  November

11, 1986 

Filinvest vs Ngilay P-5578  20,408               Nadjer Esquevel             November

FILINVEST LAND, INC., EFREN C. GUTIERRE and LINA 24, 1991 
DE GUZMAN-FERRER, Petitioners, versus ABDUL
BACKY, ABHERA, BAIYA, EDRIS, IIADJI GULAM, P-5579  35,093               Unos Bantangan             November
JAMELLA, KIRAM, LUCAYA, MONER, OMAR, RAMIR, 24, 1991 
ROBAYCA, SATAR, TAYBA ALL SURNAMED NGILAY,
P-5580  39,507               Moner Ngilay                  November
EDMER ANDONG, UNOS BANTANGAN and NADJER
24, 1991 
ESQUIVEL, Respondents
P-5582  44,809               Baiya Ngilay                   November
PERALTA, J.:
24, 1991 

P-5583  10,050               Jamela Ngilay                 November

For this Court's  consideration is  the  Petition  for  Review on 24, 1991 
Certioruri under Rule  45,  dated  November  9,  2006,  of
P-5584  49,993               Ramir Ngilay                   November
petitioner Filinvest Land,  Inc., which seeks to set aside the
24, 1991 
Decision1 dated March 30, 2006 and Resolution2dated
September 18, 2006 of the Court of Appeals (CA) partially P-5586  40,703               Satar Ngilay                   November
reversing the Decision3 dated October 1, 2003 of the Regional
24, 1991 
Trial Court, Las Piñas, Branch 253 (RTC). 
P-5590  20,000               Abehara Ngilay               November
24, 1991 
The factual antecedents, as found in the records follow.  P-5592  41,645               Lucaya Ngilay                November
24, 1991 

P-5595  13,168               Edmer Andong                November

Respondents were grantees of agricultural public lands located
24, 1991
in Tambler, General Santos City through Homestead and Fee
patents sometime in 1986 and 1991 which are  covered by and
specifically described in the following Original Certificates of
Title issued by the Register of Deeds of General Santos City: Negotiations were made by petitioner, represented by Lina de
Guzman-Ferrer with the patriarch  of the Ngilays, Hadji Gulam
Ngilay sometime in 1995. Eventually, a Deed of Conditional
Sale of the above- enumerated properties in favor of
OCT No. Area (sq. m.)      Grantee                       Date
petitioner Filinvest Land, Inc. was executed. Upon its
Granted 
execution, respondents were asked to deliver to petitioner the
P-5204  38,328               Abdul Backy Ngilay         November original owner's duplicate copy of  the certificates of title of
11, 1986  their respective properties. Respondents  received the
downpayment for the properties on October 28, 1995.
P-5205  49,996               Hadji Gulam Ngilay          November
11, 1986 

P-5206  49,875               Edris A. Ngilay               November A few days after the execution of the aforestated deeds and
11, 1986  the delivery of the corresponding documents to petitioner,
respondents came to know that the sale of their properties was
Page 198 of 304
null and void, because it was done within the period that they
were not allowed to do so and that the sale did not have the
approval of the Secretary of the Department of Environment No pronouncement as to damages for failure to prove the
and Natural Resources (DENR) prompting them to file a case same. 
for the declaration of nullity of the deeds of  conditional and
absolute sale of the questioned properties and the grant of
right of way with the RTC,  Las Piñas, Branch 253. 
Costs against the petitioners. 

On the other hand, petitioner claims that sometime in 1995,

SO ORDERED.4
the representative of Hadji Ngilay approached petitioner to
propose the sale of a portion of his properties. Thereafter,
representatives of petitioner flew to General Santos City from
Manila to  conduct an ocular inspection of the subject Respondents elevated the case to the CA in which the latter
properties. Petitioner was willing to purchase the properties modified the judgment of the RTC. While the CA upheld the
but seeing that some of the properties were registered as land validity of the sale of the properties the patents of which were
grants through homestead patents, representatives of awarded in 1986, including the corresponding grant of right of
petitioner informed Ngilay that they would return to General way  for the same lots, it nullified the disposition of those
Santos City in a few months to finalize the sale as ten (10) properties granted through patents in 1991 and the right of
certificates of title were issued on November 24, 1991.  way on the same properties. As to the "1991 Patents," the CA
ruled that the contract of sale between the parties was a
perfected contract, hence, the parties entered into a prohibited
conveyance of a homestead within the prohibitive period of
According to petitioner, Ngilay and his children prevailed upon
five years from  the issuance of the patent. The CA Decision
the representatives of petitioner to make an advance payment.
dated March 30, 2006 disposed the case as follows: 
To accommodate the Ngilays, petitioner acceded to making an
advance with the understanding that petitioner could demand
anytime the return of the advance payment  should Ngilay not
be able to comply  with the conditions of the sale. The Ngilays WHEREFORE, the assailed Decision dated October 1, 2003 is
likewise undertook to secure the necessary approvals of the MODIFIED: 
DENR before the consummation of the sale. 

a) The Deed of Conditional Sale and Deed of Absolute Sale for

The RTC ruled in favor of Filinvest Land, Inc. and upheld the the properties covered by the  "1991 Patents", as well as the
sale of all the properties in litigation. It found that the sale of Right of Way Agreement thereto, are declared null and void.
those properties whose original certificates of title were issued The Register of Deeds of General Santos City is consequently
by virtue of the 1986 Patents was valid, considering that the directed to cancel the certificates of title covered by the "1991
prohibitory period ended in 1991, or way before the Patents" issued in favor of appellee Filinvest and to issue new
transaction took place. As to those patents awarded in 1991, titles in favor of herein appellants. 
the same court opined that since those properties were the
subject of a deed of conditional sale, compliance with those
conditions is necessary for there to be a perfected contract
b) The sale of the properties covered by the  "1986 Patents",
between the parties. The RTC also upheld the grant of  right of
including the corresponding grant of way for said lots, are
way as it adjudged that the right of way agreement showed
declared valid.  
that  the right of way was granted to provide access from the
highway to the properties to be purchased. The dispositive
portion of the Decision dated October 1, 2003 reads:
SO ORDERED.5

WHEREFORE, premises considered, the Court upholds the sale

of all the properties in litigation. It likewise upholds the grant Petitioners filed a Motion for Partial Reconsideration, but it was
of right of way in favor of the respondent.  Consequently, the denied by the CA. 
petition is DISMISSED. 

Page 199 of 304

Hence, the present petition.  1991 Homestead Patents were  not conveyed to Filinvest until
The grounds relied upon are: 
1. A CONDITIONAL SALE INVOLVING THE 1991 PATENTS DID
NOT VIOLATE THE PROHIBITION  AGAINST ALIENATION OF
HOMESTEADS UNDER THE PUBLIC LAND ACT SINCE NO
ACTUAL TRANSFER OR DISPOSITION WAS PERFECTED UNTIL
ALL THE CONDITIONS OF THE DEED ARE FULFILLED.
2. REGISTRATION IS THE OPERATIVE ACT THAT CONVEYS OR
DISPOSES RIGHTS IN REAL PROPERTY. BEING
UNREGISTERED, THE DEED OF CONDITIONAL SALE DID NOT
CONVEY OR DISPOSE OF THE 1991 HOMESTEADS OR ANY
RIGHTS THEREIN IN VIOLATION OF THE PUBLIC LAND ACT. 
3. ASSUMING THE NULLITY OF THE SALE OF THE 1991
PATENTS, THE HONORABLE COURT OF APPEALS SHOULD
HAVE ORDERED RESPONDENTS AS A MATTER OF LAW TO
RETURN TO PETITIONERS WHAT THEY HAVE RECEIVED.6
In their Comment7 dated March 5, 2007,  respondents stated
the following counter-arguments:  downpayment of P14,000.000.00 for the properties covered by
(1)  The Honorable Court of Appeals did not err in holding that
the Deed of Conditional Sale and Deed of Absolute Sale for the
properties covered by the 1991 Patents, as well as the Right of
Way Agreement thereto is null and void for the simplest reason
that the said transactions were volatile of the Public Land Act. 
(2) The questions raised by the Petitioner, Filinvest Land Inc.
(FLI) are unsubstantial to require consideration.8
In its Reply9 dated July 30, 2007, petitioner insists that the
prohibition against alienation and disposition of land covered
by Homestead Patents is a prohibition against the actual loss
of the homestead within the five-year prohibitory period, not
against all contracts including those that do not result in such
an actual loss of ownership or possession. It also points out
that  respondents themselves admit that the transfer
certificates of title covering the ten parcels of land are all dated
1998, which confirms its declaration that the lands covered by
after the five-year prohibitory period. 
The petition is unmeritorious.  
The five-year prohibitory period following the issuance of the
homestead patent is provided under Section 118 of
Commonwealth Act No. 141, as amended by Commonwealth
Act No. 456, otherwise known as the Public Land Act.10 It
bears stressing that the law was enacted to give the
homesteader or patentee every chance to preserve for himself
and his family the land that the State had gratuitously given to
him as a reward for his labour in cleaning and cultivating it.11
Its basic objective, as the Court had occasion to stress, is to
promote public policy that is to provide home and decent living
for destitute, aimed at providing a class of independent small
landholders which is the bulwark of peace and order.12 Hence,
any act which would have the effect of removing the property
subject of the patent from the hands of a grantee will be
struck down for being violative of the law.13
In the present case, the negotiations for the purchase of the
properties covered by the patents issued in 1991 were made in
1995 and, eventually, an undated Deed of Conditional Sale was
executed. On October 28, 1995,  respondents received the
the patents issued in 1991. Applying the five-year prohibition,
the properties covered by  the patent issued on  November 24,
1991 could only be alienated after November 24, 1996.
Therefore, the sale, having been consummated on October 28,
1995, or within the five-year prohibition, is as ruled by the CA,
void. 
Petitioner argues that the correct  formulation of the issue is
not whether there was a perfected contract between the
parties during the period of prohibition, but whether by such
deed of conditional sale there was "alienation or encumbrance"
within the  contemplation of the law. This is wrong. The
prohibition does not distinguish between consummated and
executory sale. The conditional sale entered into by the parties
is still a conveyance of the homestead patent. As correctly
ruled by the CA, citing Ortega v. Tan:14
And, even assuming that the disputed sale was not yet
perfected or consummated, still, the transaction cannot be
validated. The prohibition of the law on the sale  or
encumbrance of the homestead within five years after the
Page 200 of 304
grant is MANDATORY. The purpose of the law is to promote a
definite policy,  i.e., "to preserve and keep in the family of the
homesteader that portion of the public land which the State
has gratuitously given to him." Thus,  the law does not
distinguish between executory and consummated
sales. Where the sale of a homestead was perfected
within the prohibitory period of five years, the fact that
the formal deed of sale was executed after the
expiration of the staid period DID NOT and COULD NOT
legalize a contract that was void from its inception. To
hold valid such arrangement would be to throw the door open
to all possible fraudulent subterfuges and schemes which
persons interested in the land given to a homesteader may
devise in circumventing and defeating the legal provisions
prohibiting their alienation within five years from the issuance
of the patent.15
To repeat, the conveyance of a homestead before the
expiration of the five-year prohibitory period following the
issuance of the homestead patent is null and void and cannot
be enforced, for it is not within the competence of any citizen
to barter away what public policy by law seeks to preserve.16
Nevertheless,  petitioner does not err in seeking the return of
the down payment as a consequence of the sale having been
declared void.  The rule is settled that the declaration of nullity
of a contract which is void  ab initiooperates to restore things
to the state and condition in which they were found before the
execution thereof.17 Petitioner is correct in its argument that
allowing respondents to keep the amount received from
petitioner is tantamount to judicial acquiescence to unjust
enrichment. Unjust enrichment exists "when a person unjustly
retains a  benefit to the loss of another, or when a person
retains money or property of another against the fundamental
principles of justice, equity and good conscience."18 There is
unjust enrichment under Article 22 of the Civil Code when (1) a
person is unjustly benefited, and (2) such benefit is derived at
the expense of or with damages to another.19 Thus, the sale
which created the obligation of petitioner to pay the  agreed
amount having been  declared  void,  respondents  have the
duty  to return  the  down  payment  as  they  no  longer  have
the  right  to  keep  it.  The principle of unjust  enrichment
essentially  contemplates  payment  when  there is  no  duty
to  pay,  and  the  person  who  receives  the  payment  has
no  right  to receive it.20 As found  by the CA and undisputed
by the parties, the amount or the  down  payment made  is
P14,000,000.00  which  shall  also  be  the  amount to be
returned by respondents.  was assigning to Tarnate an amount equivalent to 10% of the
WHEREFORE,  the  Petition  for  Review  on  certiorari  dated
November  9,  2006  or petitioner  Filinvest  Land,  Inc.  is
hereby  DENIED. Consequently,  the  Decision  dated  March
30,  2006  and  Resolution  dated September  18,  2006  or the
Court  of Appeals  are  hereby  AFFIRMED  with the
MODIFICATION  that  respondents  return  the  amount  of
P14,000,000.00  given  by  petitioner  as  down  payment  for
the  sale  which  is ruled to be void ab initio. 
SO ORDERED.
Gonzalo vs Tarnate
DOMINGO GONZALO,
Petitioner,
vs.
JOHN TARNATE,JR.,
Respondent.
BERSAMIN, J.:
The doctrine of in pari delicto, which stipulates that the guilty
parties to an illegal contract are not entitled to any relief,
cannot prevent a recovery if doing so violates the public policy
against unjust enrichment.
Antecedents
After the Department of Public Works and Highways (DPWH)
had awarded on July 22, 1997 the contract for the
improvement of the SadsadanMaba- ay Section of the
Mountain Province-Benguet Road in the total amount of
~7,014,963 .33 to his company, Gonzalo Construction, 1
petitioner Domingo Gonzalo (Gonzalo) subcontracted to
respondent John Tarnate, Jr. (Tarnate) on October 15, 1997,
the supply of materials and labor for the project under the
latter's business known as JNT Aggregates. Their agreement
stipulated, among others, that Tarnate would pay to Gonzalo
eight percent and four percent of the contract price,
respectively, upon Tarnate's first and second billing in the
project.2
In furtherance of their agreement, Gonzalo executed on April
6, 1999 a deed of assignment whereby he, as the contractor,
total collection from the DPWH for the project. This 10%
retention fee (equivalent to P233,526.13) was the rent for
Tarnate’s equipment that had been utilized in the project. In
the deed of assignment, Gonzalo further authorized Tarnate to
use the official receipt of Gonzalo Construction in the
Page 201 of 304
processing of the documents relative to the collection of the
10% retention fee and in encashing the check to be issued by
the DPWH for that purpose.3 The deed of assignment was
submitted to the DPWH on April 15, 1999. During the
processing of the documents for the retention fee, however,
Tarnate learned that Gonzalo had unilaterally rescinded the
deed of assignment by means of an affidavit of cancellation of
deed of assignment dated April 19, 1999 filed in the DPWH on
April 22,  1999;4 and that the disbursement voucher for the
10% retention fee had then been issued in the name of
Gonzalo, and the retention fee released to him.5
Tarnate demanded the payment of the retention fee from
Gonzalo, but to no avail. Thus, he brought this suit against
Gonzalo on September 13, 1999 in the Regional Trial Court
(RTC) in Mountain Province to recover the retention fee of
P233,526.13, moral and exemplary damages for breach of
contract, and attorney’s fees.6
1. Defendant Domingo Gonzalo to pay the Plaintiff, John
Tarnate, Jr., the amount of TWO HUNDRED THIRTY THREE
THOUSAND FIVE HUNDRED TWENTY SIX and 13/100 PESOS
(P233,526.13) representing the rental of equipment;
2. Defendant to pay Plaintiff the sum of THIRTY THOUSAND
(P30,000.00) PESOS by way of reasonable Attorney’s Fees for
having forced/compelled the plaintiff to litigate and engage the
services of a lawyer in order to protect his interest and to
enforce his right. The claim of the plaintiff for attorney’s fees in
the amount of FIFTY THOUSAND PESOS (P50,000.00) plus
THREE THOUSAND PESOS (P3,000.00) clearly appears to be
unconscionable and therefore reduced to Thirty Thousand
Pesos (P30,000.00) as aforestated making the same to be
reasonable;
3. Defendant to pay Plaintiff the sum of FIFTEEN THOUSAND
PESOS (P15,000.00) by way of litigation expenses;

In his answer, Gonzalo admitted the deed of assignment and

the authority given therein to Tarnate, but averred that the
4. Defendant to pay Plaintiff the sum of TWENTY THOUSAND
project had not been fully implemented because of its
PESOS (P20,000.00) for moral damages and for the breach of
cancellation by the DPWH, and that he had then revoked the
contract; and
deed of assignment. He insisted that the assignment could not
stand independently due to its being a mere product of the
subcontract that had been based on his contract with the
DPWH; and that Tarnate, having been fully aware of the 5. To pay the cost of this suit.
illegality and ineffectuality of the deed of assignment from the
time of its execution, could not go to court with unclean hands
to invoke any right based on the invalid deed of assignment or
on the product of such deed of assignment.7 Award of exemplary damages in the instant case is not
warranted for there is no showing that the defendant acted in
a wanton, fraudulent, reckless, oppressive or malevolent
manner analogous to the case of Xentrex Automotive, Inc. vs.
Ruling of the RTC Court of Appeals, 291 SCRA 66.8

Gonzalo appealed to the Court of Appeals (CA).

On January 26, 2001, the RTC, opining that the deed of
assignment was a valid and binding contract, and that Gonzalo
must comply with  his obligations under the deed of
assignment, rendered judgment in favor of Tarnate as follows: Decision of the CA

WHEREFORE, premises considered and as prayed for by the
plaintiff, John Tarnate, Jr. in his Complaint for Sum of Money,
Breach of  Contract With Damages is hereby RENDERED in his
favor and against the above-named defendant Domingo
Gonzalo, the Court now hereby orders as follows:
On February 18, 2003, the CA affirmed the RTC.9
Although holding that the subcontract was an illegal agreement
due to its object being specifically prohibited by Section 6 of
Presidential Decree No. 1594; that Gonzalo and Tarnate were
guilty of entering into the illegal contract in violation of Section
6 of Presidential Decree No. 1594; and that the deed of
Page 202 of 304
assignment, being a product of and dependent on the
subcontract, was also illegal and unenforceable, the CA did not
apply the doctrine of in pari delicto, explaining that the
doctrine applied only if the fault of one party was more or less
equivalent to the fault of the other party. It found Gonzalo to
be more guilty than Tarnate, whose guilt had been limited to
the execution of the two illegal contracts while Gonzalo had
gone to the extent of violating the deed of assignment. It
declared that the crediting of the 10% retention fee equivalent
to P233,256.13 to his account had unjustly enriched Gonzalo;
and ruled, accordingly, that Gonzalo should reimburse Tarnate
in that amount because the latter’s equipment had been
utilized in the project.
Upon denial of his motion for reconsideration,10 Gonzalo has
now come to the Court to seek the review and reversal of the
decision of the CA.
Issues
Gonzalo contends that the CA erred in affirming the RTC
because: (1) both parties were in pari delicto; (2) the deed of
assignment was void; and (3) there was no compliance with
the arbitration clause in the subcontract. Gonzalo submits in
support of his contentions that the subcontract and the deed of
assignment, being specifically prohibited by law, had no force
and effect; that upon finding both him and Tarnate guilty of
violating the law for executing the subcontract, the RTC and
the CA should have applied the rule of in pari delicto, to the
effect that the law should not aid either party to enforce the
illegal contract but should leave them where it found them;
and that it was erroneous to accord to the parties relief from
their predicament.11
Ruling
We deny the petition for review, but we delete the grant of
moral damages, attorney’s fees and litigation expenses.
There is no question that every contractor is prohibited from
subcontracting with or assigning to another person any
contract or project that he has with the DPWH unless the
DPWH Secretary has approved the subcontracting or
assignment. This is pursuant to Section 6 of Presidential
Decree No. 1594, which provides:
Section 6. Assignment and Subcontract. – The contractor shall
not assign, transfer, pledge, subcontract or make any other
disposition of the contract or any part or interest therein
except with the approval of the Minister of Public Works,
Transportation and Communications, the Minister of Public
Highways, or the Minister of Energy, as the case may be.
Approval of the subcontract shall not relieve the main
contractor from any liability or obligation under his contract
with the Government nor shall it create any contractual relation
between the subcontractor and the Government.
Gonzalo, who was the sole contractor of the project in
question, subcontracted the implementation of the project to
Tarnate in violation of the statutory prohibition. Their
subcontract was illegal, therefore, because it did not bear the
approval of the DPWH Secretary. Necessarily, the deed of
assignment was also illegal, because it sprung from the
subcontract. As aptly observed by the CA:
x x x. The intention of the parties in executing the Deed of
Assignment was merely to cover up the illegality of the sub-
contract agreement. They knew for a fact that the DPWH will
not allow plaintiffappellee to claim in his own name under the
Sub-Contract Agreement.
Obviously, without the Sub-Contract Agreement there will be
no Deed of Assignment to speak of. The illegality of the Sub-
Contract Agreement necessarily affects the Deed of
Assignment because the rule is that an illegal agreement
cannot give birth to a valid contract. To rule otherwise is to
sanction the act of entering into transaction the object of
which is expressly prohibited by law and thereafter execute an
apparently valid contract to subterfuge the illegality. The legal
proscription in such an instance will be easily rendered
nugatory and meaningless to the prejudice of the general
public.12
Under Article 1409 (1) of the Civil Code, a contract whose
cause, object or purpose is contrary to law is a void or
inexistent contract. As such, a void contract cannot produce a
valid one.13 To the same effect is Article 1422 of the Civil
Code, which declares that “a contract, which is the direct result
of a previous illegal contract, is also void and inexistent.”
We do not concur with the CA’s finding that the guilt of
Tarnate for violation of Section 6 of Presidential Decree No.
Page 203 of 304
1594 was lesser than that of Gonzalo, for, as the CA itself
observed, Tarnate had voluntarily entered into the agreements
with Gonzalo.14 Tarnate also admitted that he did not
participate in the bidding for the project because he knew that
he was not authorized to contract with the DPWH.15 Given
that Tarnate was a businessman who had represented himself
in the subcontract as “being financially and organizationally
sound and established, with the necessary personnel and
equipment for the performance of the project,”16 he justifiably
presumed to be aware of the illegality of his agreements with
Gonzalo. For these reasons, Tarnate was not less guilty than
Gonzalo.
According to Article 1412 (1) of the Civil Code, the guilty
parties to an illegal contract cannot recover from one another
and are not entitled to an affirmative relief because they are in
pari delicto or in equal fault. The doctrine of in pari delicto is a
universal doctrine that holds that no action arises, in equity or
at law, from an illegal contract; no suit can be maintained for
its specific performance, or to recover the property agreed to
be sold or delivered, or the money agreed to be paid, or
damages for its violation; and where the parties are in pari
delicto, no affirmative relief of any kind will be given to one
against the other.17
Nonetheless, the application of the doctrine of in pari delicto is
not always rigid. An accepted exception arises when its
application contravenes well-established public policy.18 In this
jurisdiction, public policy has been defined as “that principle of
the law which holds that no subject or citizen can lawfully do
that which has a tendency to be injurious to the public or
against the public good.”19
Unjust enrichment exists, according to Hulst v. PR Builders,
Inc.,20 “when a person unjustly retains a benefit at the loss of
another, or when a person retains money or property of
another against the fundamental principles of justice, equity
and good conscience.” The prevention of unjust enrichment is
a recognized public policy of the State, for Article 22 of the
Civil Code explicitly provides that “[e]very person who through
an act of performance by another, or any other means,
acquires or comes into possession of something at the expense
of the latter without just or legal ground, shall return the same
to him.” It is well to note that Article 22 “is part of the chapter
of the Civil Code on Human Relations, the provisions of which
were formulated as basic principles to be observed for the
rightful relationship between human beings and for the
stability of the social order; designed to indicate certain norms
that spring from the fountain of good conscience; guides for
human conduct that should run as golden threads through
society to the end that law may approach its supreme ideal
which is the sway and dominance of justice.”21
There is no question that Tarnate provided the equipment,
labor and materials for the project in compliance with his
obligations under the subcontract and the deed of assignment;
and that it was Gonzalo as the contractor who received the
payment for his contract with the DPWH as well as the 10%
retention fee that should have been paid to Tarnate pursuant
to the deed of assignment.22 Considering that Gonzalo refused
despite demands to deliver to Tarnate the stipulated 10%
retention fee that would have compensated the latter for the
use of his equipment in the project, Gonzalo would be unjustly
enriched at the expense of Tarnate if the latter was to be
barred from recovering because of the rigid application of the
doctrine of in pari delicto. The prevention of unjust enrichment
called for the exception to apply in Tarnate’s favor.
Consequently, the RTC and the CA properly adjudged Gonzalo
liable to pay Tarnate the equivalent amount of the 10%
retention fee (i.e., P233,526.13).
Gonzalo sought to justify his refusal to turn over the
P233,526.13 to Tarnate by insisting that he (Gonzalo) had a
debt of P200,000.00 to Congressman Victor Dominguez; that
his payment of the 10% retention fee to Tarnate was
conditioned on Tarnate paying that debt to Congressman
Dominguez; and that he refused to give the 10% retention fee
to Tarnate because Tarnate did not pay to Congressman
Dominguez.23 His justification was unpersuasive, however,
because, firstly, Gonzalo presented no proof of the debt to
Congressman Dominguez; secondly, he did not competently
establish the agreement on the condition that supposedly
bound Tarnate to pay to Congressman Dominguez;24 and,
thirdly, burdening Tarnate with Gonzalo’s personal debt to
Congressman Dominguez to be paid first by Tarnate would
constitute another case of unjust enrichment.
The Court regards the grant of moral damages, attorney’s fees
and litigation expenses to Tarnate to be inappropriate. We
have ruled that no damages may be recovered under a void
contract, which, being nonexistent, produces no juridical tie
between the parties involved.25 It is notable, too, that the RTC
and the CA did not spell out the sufficient factual and legal
justifications for such damages to be granted.
Lastly, the letter and spirit of Article 22 of the Civil Code
command Gonzalo to make a full reparation or compensation
to Tarnate. The illegality of their contract should not be
allowed to deprive Tarnate from being fully compensated
Page 204 of 304
through the imposition of legal interest. Towards that end,
interest of 6% per annum reckoned from September 13, 1999,
the time of the judicial demand by Tarnate, is imposed on the
amount of P233,526.13. Not to afford this relief will make a
travesty of the justice to which Tarnate was entitled for having
suffered too long from Gonzalo’s unjust enrichment.
WHEREFORE, we AFFIRM the decision promulgated on
February 18, 2003, but DELETE the awards of moral damages,
attorney’s fees and litigation expenses; IMPOSE legal interest
of 6% per annum on the principal oLP233,526.13 reckoned
from September 13, 1999; and DIRECT the petitioner to pay
the costs of suit.
SO ORDERED.
Bliss Development vs Diaz
BLISS DEVELOPMENT CORP./HOME GUARANTY
CORPORATION, PETITIONER, VS. MONTANO DIAZ,
DOMINGO TAPAY, AND EDGAR H. ARREZA,
RESPONDENTS.
VELASCO JR., J.:
The Case
This is a Petition for Review on Certiorari assailing the
Decision[1] of the Court of Appeals (CA), promulgated on
January 21, 2014, and its subsequent Resolution dated June
27, 2014, both in CA-G.R. CV No. 99179. The assailed Decision
reversed and set aside the Decision of the Regional Trial Court
(RTC), Makati City, Branch 59, dated November 21, 2011, in
Civil Case No. 96-1372. The assailed Resolution, meanwhile,
denied petitioner’s Motion for Reconsideration.
The Facts
Petitioner Bliss Development Corporation (BDC) (subsequently
reorganized as Home Guaranty Corporation) is the registered
owner of Lot No. 27, Block 30, New Capitol Estates I, Brgy.
Matandang Balara, Diliman, Quezon City, and covered by
Transfer Certificate of Title (TCT) No. 331582. On October 19,
1984, it entered into and executed a Deed of Sale over the
said property in favor of Spouses Emiliano and Leonila Melgazo
(Sps. Melgazo), both of whom are now deceased. [2]
On May 7, 1991, a certain Rodolfo Nacua (Nacua) sent a letter
to BDC, saying that Sps. Melgazo transferred to him their
rights over the property. He further expressed willingness to
pay the outstanding obligations of Sps. Melgazo to BDC. Before
the property was fully paid, however, Nacua sold his rights to
Olivia Garcia (Garcia), through a Deed of Transfer of Rights.
Later, Garcia transferred her rights to Elizabeth Reyes (Reyes).
Reyes then transferred her rights to Domingo Tapay (Tapay),
who then later sold his rights to herein respondent Montano
Diaz (Diaz) for Six Hundred Thousand Pesos (P600,000.00).
Diaz then paid BDC the amortizations due on the property,
amounting to P406,915.15, and BDC issued a permit to occupy
the property in favor of Diaz. Diaz then introduced
improvements on the property, amounting to P700,000.00.
On April 14, 1992, BDC executed a Contract to Sell in favor of
Diaz.[3] On April 15, 1994, however, BDC informed Diaz that
respondent Edgar Arreza (Arreza) was claiming that the heirs
of Sps. Melgazo sold to him the rights over the property. [4] BDC
then placed Diaz’s account in “inactive status.” To resolve the
conflicting claims of Arreza and Diaz, BDC filed a complaint for
Interpleader against them, before the RTC, Makati City, Branch
146. On March 27, 1996, the Makati City RTC Branch 146 ruled
that the signatures of Sps. Melgazo transferring their rights to
Nacua were mere forgeries. Thus, it ruled that Arreza had a
better right over the property. This decision became final and
executory.[5]
On August 27, 1996, Diaz filed the present complaint for sum
of money against BDC before the RTC, Makati City, Branch 59.
[6]
 This was later amended to include Arreza and Tapay as
defendants. Diaz argued that BDC and Tapay’s representations
led him to believe that he had a good title over the property,
but due to the court’s ruling in the interpleader case, he was
constrained to transfer the property to Arreza. Thus, he prayed
for the following:
(1) For BDC and Arreza to pay him P1,106,915.58, plus
interest, representing the amount he paid for the assumption
of Tapay’s rights;
(2) For Tapay to pay him P600,000.00, plus interests,
representing the amount he paid Tapay;
(3) For BDC and Tapay to pay him P500,000.00 as moral
damages;
(4) For BDC to pay him P500,000 as exemplary damages; and
(5) For BDC, Tapay, and Arreza to pay him ?100,000 as
attorney’s fees and costs of suit.[7]
 
Page 205 of 304
Both BDC and Tapay argued that their respective acts were
lawful and done in good faith. Arreza filed a Motion to Dismiss,
citing res judicata, arguing that the claim of Diaz is a
compulsory counterclaim that should have been pleaded in the
Interpleader case. The RTC denied the Motion to Dismiss,
which the CA, on certiorari, affirmed. When the issue reached
this Court in G.R. No. 133113,[8] this Court ruled that the claim
as against Arreza is barred by res judicata. The Court upheld
the argument that the claim is in the nature of a compulsory
counterclaim. Thus, the case against Arreza was dismissed.
The Decision of the RTC
After trial, the RTC rendered its Decision on November 21,
2011, finding that Diaz failed to prove that he is an assignee in
good faith, and thus dismissed the complaint for lack of merit
in this wise:
Plaintiff must show that he inquired not only into the title of
the assignor but also into the assignor’s capacity to convey.
The failure of plaintiff to diligently inquire as such, indicated
that he is not an assignee in good faith. Plaintiff Diaz
downplays the need to extend his examination to intervening
transferor farther than Domingo Tapay from whom he acquired
the subject property. Such attitude, however, is not in accord
with what a reasonably prudent person would do under the
circumstances.
xxxx
WHEREFORE, premises considered, plaintiff’s Complaint is
hereby DISMISSED for lack of merit. Defendant Domingo
Tapay’s [counterclaim] is likewise dismissed. No costs.[9]
Aggrieved, Diaz appealed to the CA.
 
The Decision of the CA
In its presently assailed Decision promulgated on January 21,
2014, the CA reversed the ruling of the RTC and, instead, ruled
that Diaz is entitled to be paid reimbursement and damages.
The CA anchored its ruling on its finding that Diaz is both a
buyer in good faith and a builder in good faith, thus:
A careful examination of the records convinces Us that Diaz is
both a buyer and builder in good faith. We note that while Bliss
executed a Deed of Sale with Mortgage in favor of the spouses
Emiliano and Leonila Melgazo, title over the property was in
Bliss’ name. The title remained in Bliss’ name when Tapay
offered to transfer his rights over the property to Diaz.
Considering that the property involved is registered land, Diaz
need not go beyond the title to be considered a buyer in good
faith. Indeed, after Diaz accepted Tapay’s offer, he dealt
directly with Bliss which received the monthly amortizations
due on the property. For almost three years, from 1991 to
1994, Bliss accepted Diaz’s payment without informing Diaz of
Arreza’s conflicting claim over the property. Bliss even issued
Diaz a permit to occupy the property in 1992; thus, allowing
Diaz to introduce improvements on the property. In other
words, at the time when Diaz purchased the property from
Tapay and when he introduced the improvements, he had no
notice that some other person has a right over the property.
He also had a well-founded belief that the property he was
building on was his. Accordingly, Diaz is a buyer and builder in
good faith.[10]
In ruling that Diaz is a buyer in good faith, the CA noted that
Diaz need not go beyond the title to be considered a buyer in
good faith, because what is involved is a registered land.
With regard to the liability of BDC, the CA ruled that the
provision in the Contract to Sell excusing it from reimbursing
the monthly amortizations to Diaz cannot exempt it from
liability, because it acted in bad faith. The CA said:
Next, Bliss’ argument that the Additional Provision in the
Contract to Sell excuses it from reimbursing the monthly
amortizations paid by Diaz cannot be given credence. Any
stipulation exempting the vendor from the obligation to answer
for eviction shall be void, if he acted in bad faith. The vendor’s
bad faith consists in his knowledge beforehand at the time of
the sale, of the presence of the fact giving rise to eviction, and
its possible consequence. It is undisputed that Bliss knew
about Arreza’s claim in 1991. It even received amortization
payments from Arreza. Yet, Bliss is aware that should Arreza
pursue his claim in court, Diaz may be evicted from the
property. Yet, Bliss only informed Diaz about Arreza’s claim in
1994 when Arreza followed up his claim. Indubitably, Bliss
acted in bad faith in dealing with Diaz and should not be
absolved from liability by the Additional Provision in the
Contract to Sell.[11]
Thus, the CA dispositively held:
Page 206 of 304
FOR THESE REASONS, the November 21, 2011 Decision of UNDER THE CONTRACT, HIS POSSESSION IS IN THE NATURE
the Regional Trial Court of Makati City, Branch 59, is SET OF A LESSOR
ASIDE. The Court hereby DIRECTS: (1) Defendant-appellee
Bliss Development Corporation/Home Guaranty Corporation  
to PAY plaintiff-apellant Montano Diaz P1,106,915.58 for the
V.
amortizations paid and amount spent on improvements on the
property, P100,000.00 as moral damages, P50,000.00 as
exemplary damages, and P25,000.00 as attorney’s fee; and (2)
WHETHER BDC IS LIABLE TO REIMBURSE DIAZ OF THE
defendant-appellee Domingo Tapay to PAY plaintiff-appellant
AMOUNT OF P1,106,915.58
Montano M. Diaz P600,000.00, the amount he paid for the
transfer of rights.  

  In fine, petitioner argues that it is not liable to respondent

Diaz, both for the amortizations that Diaz paid to it, and the
Petitioner BDC moved for reconsideration, insisting that Diaz
value of the improvements that Diaz introduced to the
cannot be declared a buyer in good faith, in light of the March
property.
27, 1996 Decision of the Makati City RTC, Branch 146 in the
Interpleader case, which had long been final and executory.
Meanwhile, Tapay failed to elevate before this Court the CA’s
Tapay also moved for reconsideration, arguing that he was not
ruling against him.
aware of the defect in the title sold to Diaz, and, hence, he
should not be made liable for the P600,000.00 that Diaz paid  
to him. In the CA’s assailed Resolution dated June 27, 2014,
[12]
 the CA denied both motions for reconsideration. The Court’s Ruling

Hence, the present Petition for Review on Certiorari filed by  

BDC, raising the following issues:
The petition is partially granted. The CA committed reversible
  error in ruling that Diaz was a buyer in good faith and for
value. Nevertheless, BDC is liable to Diaz because it acted in
I. bad faith, as discussed below.

The claim is not barred by the

WHETHER THE CA ERREDIN NOT DISMISSING THE APPEAL,
IN VIEW OF THE APPLICATION OF THE DOCTRINE OF
IMMUTABILITY OF JUDGMENT IN THE DECISION OF THE
COURT IN G.R. NO. 133113
II.
WHETHER THE CA ERRED IN DECLARING BDC IN BAD FAITH
 
III.
WHETHER THE CA ERRED IN DECLARING THAT THERE WAS
UNJUST ENRICHMENT ON THE PART OF BDC
doctrine of immutability of judgment
First, We dispose of the issue of the applicability of the
doctrine of immutability of judgment, in view of the ruling of
this Court in G.R. No. 133113. We find that the present claim is
not barred by the court’s ruling in G.R. No. 133113––to the
effect that Diaz can no longer claim reimbursement from
Arrezabecause of res judicata––for his failure to allege the
claim in the interpleader case between them.
In G.R. No. 133113, We ruled that the claim against Arreza is
barred by res judicata, because of a prior Interpleader case
between Arreza and Diaz. We ruled that the claim for
reimbursement should have been alleged and proved in the
prior case, and failure to do so bars any future action on such
claims. We reiterated the rule on res judicata, thus:
 

  In cases involving res adjudicata, the parties and the causes of

action are identical or substantially the same in the prior as
IV.
well as the subsequent action. The judgment in the first action
is conclusive as to every matter offered and received therein
and as to any other matter admissible therein and which might
WHETHER DIAZ CAN STILL CLAIM REIMBURSEMENT EVEN IF
have been offered for that purpose, hence said judgment is an
Page 207 of 304
absolute bar to a subsequent action for the same cause. The indeed, acted in bad faith.
bar extends to questions necessarily involved in an issue, and
necessarily adjudicated, or necessarily implied in the final When Diaz came forward and presented the deeds of transfer,
judgment, although no specific finding may have been made in including the deed of transfer executed by Tapay in his favor,
reference thereto, and although such matters were directly BDC was already well aware of a conflicting claim by Arreza.
referred to in the pleadings and were not actually or formally Instead of waiting for the resolution on the matter, BDC
presented. Said prior judgment is conclusive in a immediately accepted the deed of transfer presented by Diaz,
subsequent suit between the same parties on the same as well as the amortizations he paid over the property. It was
subject matter, and on the same cause of action, not only in 1994 that BDC filed the Interpleader case to resolve the
only as to matters which were decided in the first action, but conflicting case. This is nothing short of evident bad faith.
also as to every other matter which the parties could have
properly set up in the prior suit.[13] (emphasis added) Respondent Diaz is not a purchaser
for value and in good faith
 
We, however, fail to find sufficient basis for the CA’s ruling that
In the case at bar, We find that the essential elements of res
Diaz is a purchaser for value and in good faith. In a long line of
judicata are not present. First, the interpleader case was
cases, this Court had ruled that a purchaser in good faith and
between Arreza and Diaz. While it was BDC that initiated the
for value is one who buys property of another without notice
interpleader case, the opposing parties in that prior case is, in
that some other person has a right to, or interest in, such
fact, Arreza and Diaz. Second, the issues resolved in the
property and pays full and fair price for the same at the time of
interpleader case revolved around the conflicting claims of
such purchase or before he or she has notice of the claim or
Arreza and Diaz, and not whatever claim either of them may
interest of some other person in the property.[17]For one to be
have against BDC. Thus, there is no identity of parties, nor
considered a purchaser in good faith, the following requisites
identity of subject matter, between the interpleader case and
must concur: (1) that the purchaser buys the property of
the one at bar.
another without notice that some other person has a right to
or interest in such property; and (2) that the purchaser pays a
Petitioner BDC acted in bad faith
full and fair price for the property at the time of such purchase
in dealing with respondent Diaz
or before he or she has notice of the claim of another. [18] We
find that in the case at bar, the first element is lacking.
On the second issue, We find that the CA committed no
reversible error in finding that BDC acted in bad faith, when it
The CA, in disposing the issue of Diaz’s good faith, merely said
allowed Diaz to take over the payment of the amortizations
that “considering that the property involved is registered land,
over the subject property. As the CA correctly noted, “It is
Diaz need not go beyond the title to be considered a buyer in
undisputed that Bliss knew about Arreza’s claim in 1991. It
good faith.”[19]We find this to be a serious and reversible error
even received amortization payments from Arreza. Yet, Bliss
on the part of the CA. In the first place, while it is true that the
acknowledged the transfer to Diaz and received the monthly
subject lot is registered lot, the doctrine of not going beyond
amortizations paid by Diaz. Also, Bliss is aware that should
the face of the title does not apply in the case here, because
Arreza pursue his claim in court, Diaz may be evicted from the
what was subjected to a series of sales was not the lot itself
property.”[14]
but the right to purchase the lot from BDC. The CA itself
observed: “while [BDC] executed a Deed of Sale with Mortgage
BDC anchors its claim of good faith on the fact that it did not
in favor of the spouses Emiliano and Leonila Melgazo, title over
act as seller to Diaz. Rather, BDC claims, it was Diaz who came
the property was in [BDC’s] name. The title remained in
forward and presented himself to BDC as the lawful successor-
[BDC’s] name when Tapay offered to transfer his rights over
in-interest of Emiliano and Leonila Melgazo, by virtue of the
the property to Diaz.”[20]Notably, the several transfers
several deeds of transfer of rights, all of which he presented to
themselves did not purport to be Deeds of Absolute Sale, but
BDC. It was on the basis of this claim that BDC allowed Diaz to
merely deeds of assignment of rights. The subject of those
occupy the property and pay amortizations accruing over the
deeds of assignment was never the real right over the subject
property.[15]
property, but merely the personal right to purchase it.
Therefore, the mirror doctrine finds no application in the case
Nevertheless, BDC does not dispute that as early as 1991,
at bar.
even before respondent came forward presenting the deeds of
transfer to BDC, BDC was already aware of the claim of Arreza.
A careful review of the records of this case reveals that Diaz, in
In fact, it even received amortizations from Arreza. Despite
fact, failed to diligently inquire into the title of his predecessor
this, BDC also later acknowledged the transfer to Diaz, and
before entering into the contract of sale. As such, he cannot be
also accepted amortizations from him.[16] This uncontroverted
considered a buyer in good faith. There is no issue that despite
sequence of events led the CA to correctly rule that BDC,

Page 208 of 304

the several transfers of rights from Nacua to Garcia to Reyes to
Tapay to Diaz, title over the property remained in BDC’s name.
When Diaz transacted with Tapay, it was also clear that what
was being transferred was merely rights to purchase the
property, and not title over the lot itself; if it were, the sale
would have been void because Tapay never had ownership
over the subject property. As the buyer in such a transaction, it
was incumbent upon Diaz not only to inquire as to the right of
Tapay to transfer his rights, but also to trace the source of that
right to purchase the property. Had he discharged this duty
diligently, he would have found out that Nacua’s right was
without basis, because it was founded on a forged deed. For
his failure to inquire diligently and trace the source of the right
to purchase the property, Diaz cannot claim to be a purchaser
in good faith and for value.
is not the rightful buyer of the subject property. Allowing BDC
to keep such payments, at the expense of and to the damage
of Diaz, still amounts to unjust enrichment.
Both parties being in bad faith,
BDC is liable to Diaz for the value
of the improvements he introduced 
on the subject property
Next, We resolve the issue of whether BDC is liable to Diaz for
the value of the improvements that Diaz introduced to the
property. Arts. 448, 453, 546, and 548 of the Civil Code are
material in resolving the issue:
 

Art. 448. The owner of the land on which anything has been
Petitioner BDC is liable to return the
built, sown or planted in good faith, shall have the right to
amortizations paid by respondent Diaz,
appropriate as his own the works, sowing or planting, after
under the doctrine of unjust enrichment
payment of the indemnity provided for in Articles 546 and 548,
or to oblige the one who built or planted to pay the price of
Notwithstanding the fact that Diaz is not an innocent purchaser
the land, and the one who sowed, the proper rent. However,
in good faith and for value, BDC is nevertheless liable to return
the builder or planter cannot be obliged to buy the land if its
to him the amortizations which he already paid on the
value is considerably more than that of the building or trees. In
property, applying the rule on unjust enrichment.
such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after
Unjust enrichment exists when a person unjustly retains a
proper indemnity. The parties shall agree upon the terms of
benefit to the loss of another, or when a person retains money
the lease and in case of disagreement, the court shall fix the
or property of another against the fundamental principles of
terms thereof.
justice, equity and good conscience. Under Article 22 of the
Civil Code,[21] there is unjust enrichment when (1) a person is
unjustly benefited and (2) such benefit is derived at the
Art. 453. If there was bad faith, not only on the part of the
expense of or with damages to another. [22]
person who built, planted or sowed on the land of another, but
also on the part of the owner of such land, the rights of one
Allowing BDC to keep the amortizations paid by Diaz is
and the other shall be the same as though both had acted in
tantamount to unjust enrichment. It would result in BDC
good faith.
receiving amortizations twice the amount it should have
received, that is, the amortizations paid by Diaz and Arreza.
It is understood that there is bad faith on the part of the
While BDC claims that it did not receive amortizations from
landowner whenever the act was done with his knowledge and
both Diaz and Arreza covering the same period, such a claim is
without opposition on his part.
self-serving, and is not amply supported by any documentary
evidence.
Art. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
Even if BDC can prove that there was no overlap between the
thing until he has been reimbursed therefor.
payments made by Diaz and those made by Arreza, allowing it
to keep the amortizations paid by Diaz still amounts to unjust
Useful expenses shall be refunded only to the possessor in
enrichment. As a direct result of the final and executory ruling
good faith with the same right of retention, the person who
that Arreza is the rightful buyer of the subject property, the
has defeated him in the possession having the option of
buyer-seller relationship between Diaz and BDC is rendered
refunding the amount of the expenses or of paying the
null and void. Consequently, there remains no valid
increase in value which the thing may have acquired by reason
consideration whatsoever for the payments made by Diaz to
thereof.
BDC. There being no indication of intent to donate, because
such payments were made under the impression that Diaz is
Art. 548. Expenses for pure luxury or mere pleasure shall not
the rightful buyer of the property, it is only but just that Diaz
be refunded to the possessor in good faith; but he may
be allowed to claim back what he has paid. This is only a
remove the ornaments with which he has embellished the
natural consequence of the final and executory ruling that Diaz
principal thing if it suffers no injury thereby, and if his

Page 209 of 304

successor in the possession does not prefer to refund the
amount expended.
The CA may have made the erroneous conclusion that Diaz
acted in good faith, but because BDC equally acted in bad
faith, Art. 453 of the Civil Code commands that the rights of
one and the other shall be the same as though both had acted
in good faith. The CA made the correct observation then, when
it said:
 
Under Article 448, the landowner is given the option, either to
appropriate the improvement as his own upon payment of the
proper amount of indemnity or to sell the land to the possessor
in good faith. Relatedly Article 546 provides that a builder in
good faith is entitled to full reimbursement for all the
necessary and useful expenses incurred. In this case, however,
the option of selling the land to the builder in good faith is no
longer viable in light of the ruling in the interpleader case.
Hence, there is only one thing left for [BDC] to do: indemnify
Diaz for the improvements introduced on the property. [23]
Nevertheless, because the law treats both parties as if they
acted in good faith, the CA committed reversible error in
awarding moral and exemplary damages, there being no basis
therefor. We find it proper to delete the award of P100,000.00
as moral damages, P50,000.00 as exemplary damages, and
P25,000.00 as attorney’s fees.
In sum, the CA correctly reversed the ruling of the RTC, and
ordered BDC to pay Diaz the amount he paid as amortizations,
as well as the value of the improvements that he introduced on
the subject property. However, because both parties acted in
bad faith, there is no basis for the award of moral and
exemplary damages, as well as attorney’s fees.
WHEREFORE, in view of the foregoing, the January 21, 2014
Decision of the Court of Appeals in CA-G.R. CV No. 99179 is
hereby MODIFIED to read as follows: (1) petitioner Bliss
Development Corporation/Home Guaranty Corporation is
ordered topay respondent Montano M. Diaz the amount of
P1,106,915.58 for the amortizations paid and the amount
spent on improvements on the property; and (2) Domingo
Tapay is ordered to pay respondent Montano M. Diaz the
amount of P600,000.00, the amount he paid for the transfer of
rights.
SO ORDERED.
Yon Mitori vs Union Bank
YON MITORI INTERNATIONAL
INDUSTRIES,* PETITIONER, VS. UNION BANK OF THE
PHILIPPINES, RESPONDENT.
CAGUIOA, J:
The Case
This is a Petition for Review on Certiorari1 (Petition) filed under
Rule 45 of the Rules of Court assailing the February 3, 2016
Decision2 (assailed Decision) and July 5, 2016
Resolution3 (assailed Resolution) rendered by the Court of
Appeals (CA), Eleventh Division in CA-G.R. CV No. 102802.
The assailed Decision and Resolution affirmed, with
modification, the February 24, 2014 Decision4 and May 19,
2014 Order5 issued by the Regional Trial Court (RTC) of Pasig
City, Branch 166, in Civil Case No. 71670.
The RTC granted the Complaint for Sum of Money filed by
Union Bank of the Philippines (Union Bank) against Rodriguez
Ong Tan (Tan), the registered owner and operator of Yon
Mitori International Industries (Yon Mitori).6
The Facts
The CA summarized the facts as follows:
[Tan], doing business under the name and style of [Yon
Mitori], is a depositor, maintaining Current Account No. 027-
03-000181-8, [with] the Commonwealth, Quezon City branch
of [Union Bank].
On November 12, 2007, Tan deposited in said Union Bank
account, the amount of P420,000.00 through Bank of the
Philippine Islands (BPI) Check No. 0180724 [(BPI Check)]. x x
x
[The BPI Check was drawn against the account of Angli
Lumber & Hardware, Inc.7 (Angli Lumber), one of Tan's
alleged clients.]8
[The BPI Check was entered in Tan's bank record thereby
increasing his balance to P513,700.60 from his previous
deposit of P93,700.60.9 In the morning of November 14, 2007,
Tan withdrew from the said account the amount of
P480,000.00. Later that day, the BPI Check was returned to
Union Bank as the account against which it was drawn had
been closed. It was then that Union Bank discovered that Tan's
account had been mistakenly credited. Thus, the branch
manager of Union Bank's Commonwealth, Quezon City branch
immediately called Tan to recover the funds mistakenly
released. However, Tan refused to return the funds, claiming
that the BPI Check proceeded from a valid transaction between
Angli Lumber and Yon Mitori.10
Page 210 of 304
During the course of its investigation, Union Bank discovered
that Tan previously deposited five BPI checks drawn by Angli
Lumber against the same BPI account, and that these five
checks were all previously dishonored.11
Thereafter, on November 20, 2007, Union Bank [through the
bank manager of its Commonwealth branch,12 sent Tan a
letter demanding reimbursement of the amount of
P420,000.00, by reason of the fact that [the] "(f)unds against
said deposit was inadvertently allowed due to technical error
on the system prior to actual return of your check deposit
which was not yet clear on withdrawal date," it appearing that
[the BPI Check] was dishonored by BPI for being drawn
against a closed account. Tan refused to return the said
amount. Union Bank then debited the available balance
reflected in [Tan's] account amounting to P34,700.6013 and
thereafter instituted [a Complaint for Sum of Money
(Complaint)] before the RTC, for the recovery of [the
remaining balance amounting to] P385,299.40 plus
consequential damages.14
RTC Proceedings
In its Complaint, Union Bank alleged that the value of the BPI
Check had been inadvertently credited to Tan's account due to
a technical error in its system.15
For his part, Tan alleged that the BPI Check had been given to
him for value in the course of business. Tan claimed that he
should not be faulted for withdrawing the value of said check
from his account since Union Bank made the corresponding
funds available by updating his account to reflect his new
balance. After ascertaining that the value of the BPI Check had
been credited, Tan withdrew P480,000.00 from his account to
pay one of his suppliers.16
Tan further argued that Union Bank wrongfully and unlawfully
deducted the amount of P34,700.60 from his account.17
On February 24, 2014, the RTC ruled in favor of Union Bank.
The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of [Union Bank] and against [Yon Mitori and
Tan] by ordering the latter:
1. To pay [Union Bank] the amount of P385,299.40
representing the withdrawal mistakenly given to x x x Tan;
2. To pay [Union Bank] 12% per annum legal interest
computed from the time judicial demand was made on June
13, 2008 until the same is fully paid;
3. To pay [Union Bank] the amount of P100,000.00 as
attorney's fees; and
4. To pay the duly receipted cost of suit in the amount of
P14,954.20.
SO ORDERED.18
The RTC found all the requisites for the application of solutio
indebiti under Article 2154 of the Civil Code present. It held
that since Union Bank mistakenly released the amount of
P480,000.00 in favor of Tan without being obligated to do so,
Tan must be ordered to return said amount to preclude unjust
enrichment at Union Bank's expense.19
Further, the RTC ruled that under Article 1980 of the Civil
Code, "fixed, savings, and current deposits of money in banks
and similar institutions shall be governed by the provisions
concerning [simple] loan." By reason of the erroneous payment
made in Tan's favor, Tan and Union Bank became mutual
debtors and creditors of each other. This gave rise to Union
Bank's right to set-off the erroneous payment made against
Tan's remaining deposit, consistent with the principle of legal
compensation under the Civil Code.20
Finally, the RTC held that Union Bank should be awarded
attorney's fees and cost of suit since it was compelled to
litigate due to Tan's unjustified refusal to return the funds
mistakenly released to him.21
Aggrieved, Tan filed a motion for reconsideration which the
RTC denied in its Order dated May 19, 2014.22 The RTC held
that "[although [Union Bank may have been] negligent when it
paid to [Tan] the face value of the check as alleged by
[Tan],"23 Tan is still liable to return the funds mistakenly
released to him since Union Bank was under no obligation to
release these funds in his favor.24
CA Proceedings
Tan filed an appeal via Rule 41 and named Yon Mitori as co-
appellant.25 Therein, Tan maintained that the proximate cause
of Union Bank's loss is its own gross negligence.26
Following an exchange of pleadings, the CA issued the assailed
Decision, the dispositive portion of which reads:
WHEREFORE, in light of all the foregoing, the [D]ecision
dated February 24, 2014 of Branch 166 of the [RTC] of Pasig
City in Civil Case No. 71670 is
hereby AFFIRMED with MODIFICATION in that the award
of attorney's fees and cost of suit in favor of [Union Bank] are
hereby deleted, and the rate of legal interest imposed on the
awarded sum, reduced to six percent (6%) per annum.
SO ORDERED. 27
Foremost, the CA stressed that the fact of dishonor of the BPI
Check for the reason "Account Closed" is undisputed. On this
basis, the CA affirmed the RTC's findings and held that Tan
would be unjustly enriched at Union Bank's expense if he were
permitted to derive benefit from the funds erroneously credited
Page 211 of 304
to his account.28 As well, the CA upheld the application of
legal compensation in the case.29
Nevertheless, the CA found the award of attorney's fees and
cost of suit in favor of Union Bank improper. Since the banking
industry is impressed with public interest, all bank personnel
are burdened with a high level of responsibility insofar as care
and diligence in the custody and management of funds are
concerned.30 Here, the evidence shows that the proximate
cause of the unwarranted crediting of the value of the BPI
Check was Union Bank's technical error. Thus, while Union
Bank was compelled to litigate to protect its rights, such fact
alone does not justify an award of attorney's fees and cost of
suit there being no showing that Tan acted in bad faith in
refusing to reimburse the amount so credited.31
Finally, the CA modified the legal interest rate applied on the
awarded sum from 12% to 6% per annum, in accordance with
the Court's ruling in Nacar v. Gallery Frames.32
Subsequently, Tan filed a Motion for Reconsideration,33 still
with Yon Mitori as co-appellant. Tan argued that the uniform
findings of the RTC and CA with respect to Union Bank's
negligence serves as sufficient basis to hold the latter solely
liable for its loss.34 Tan also averred that the principle
of solutio indebiti applies only in cases where the claimant
unduly delivers something because of mistake, and not when
such delivery results from the claimant's negligence, as in this
case.35
On July 5, 2016, the CA issued the assailed Resolution denying
said Motion for Reconsideration for lack of merit.36 Tan
received a copy of the assailed Resolution on July 11, 2016.37
Subsequently, Tan's counsel filed a "Motion for Additional Time
to File Appeal"38 (Motion for Time) before the Court, praying
for an additional period of thirty (30) days from July 26, 2016,
or until August 25, 2016 to file a petition for review.39
On August 25, 2016, Tan's counsel filed this Petition. Notably,
the Petition names Yon Mitori as sole petitioner even as it
describes Yon Mitori as "a single proprietorship duly registered
under Philippine law, owned and operated by [Tan]."40
On November 9, 2016, the Court issued a
Resolution41 granting the Motion for Time and directing Union
Bank to file its comment on the Petition within ten (10) days
from notice.
In compliance with the Court's Resolution, Union Bank filed its
Comment42 on April 17, 2017, to which a Reply43 had been
filed.
The Petition maintains that the proximate cause of Union
Bank's loss is its own gross negligence. Thus, it is barred from
recovering damages under Article 2179 of the Civil Code.44
In addition, the Petition reiterates that Union Bank's gross
negligence also precludes the application of solutio indebiti in
this case45 as there can be no reimbursement under this
principle if payment is made as a result of one's
negligence.46 The Petition relies on the Court's ruling
in Philippine National Bank v. Cheah Chee Chong47 (PNB v.
Cheah) where the Court held that under the principle of solutio
indebiti, no recovery is due "if the mistake done is one of gross
negligence."48
Finally, the Petition contends that as collecting agent, Union
Bank is responsible for losses arising from its own negligence
pursuant to Article 1909 of the Civil Code. Thus, the Petition
argues that Article 1909 should be applied to hold Union Bank
solely liable for its own loss, based on the Court's ruling
in Metropolitan Bank and Trust Company v. Court of
Appeals49 (Metrobank v. CA).50
Issue
The sole issue for the Court's resolution is whether the CA
erred when it affirmed the RTC Decision directing Tan to return
the value of the BPI Check with legal interest.
The Court's Ruling
The Petition is denied for lack of merit.
Yon Mitori has no separate juridical personality.
Before delving into the substantive issues, the Court must
emphasize that as a general rule, every civil action must be
prosecuted, or defended in the name of the real party in
interest, that is, the party who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the
avails of the suit.51
In turn, Section 1, Rule 3 of the 1997 Rules of Court provides
that only natural and juridical persons or entities authorized by
law may be parties in a civil action. A single proprietorship
is not considered a separate juridical person under the Civil
Code.52
The Petition was filed solely in the name of Yon Mitori. As a
single proprietorship, Yon Mitori has no juridical personality
separate and distinct from its owner and operator Tan.
Accordingly, the Petition should have been filed in Tan's name,
the latter being the real party in interest who possesses the
legal standing to file this Petition.
Nevertheless, the Court permits the substitution of Tan as
petitioner herein in the interest of justice, pursuant to Section
4, Rule 10 of the 1997 Rules of Court:
SEC. 4. Formal Amendments. — A defect in the designation of
the parties and other clearly clerical or typographical errors
may be summarily corrected by the court at any stage of the
Page 212 of 304
action, at its initiative or on motion, provided no prejudice is
caused thereby to the adverse party. (Emphasis supplied)
In Juasing Hardware v. Mendoza53 (Juasing), the Court held
that the filing of a civil action in the name of a single
proprietorship is merely a formal, and not a substantial defect.
Substitution of the party in such cases would not constitute a
change in the identity of the parties, and would not cause any
prejudice on the adverse party, thus:
Contrary to the ruling of respondent Judge, the defect of the
complaint in the instant case is merely formal, not substantial.
Substitution of the party plaintiff would not constitute a change
in the identity of the parties. No unfairness or surprise to
private respondent Dolla, defendant in the court a quo, would
result by allowing the amendment, the purpose of which is
merely to conform to procedural rules or to correct a technical
error.54
In Juasing, the Court ruled that the lower court erred in not
allowing the amendment of the complaint filed therein to
correct the designation of the party plaintiff, for while the
complaint named the sole proprietorship "Juasing Hardware"
as plaintiff, the allegations therein show that said complaint
was actually brought by its owner.55
This Petition warrants the same course of action. As in Juasing,
no prejudice will result from Yon Mitori's substitution in this
case. Tan has been consistently named as owner and operator
of Yon Mitori throughout the proceedings below. Moreover, the
fact that this Petition was filed in furtherance of Tan's interests
is apparent from the allegations in the pleadings filed before
the Court and accordingly furnished to Union Bank.
Having settled the foregoing procedural matter, the Court now
proceeds to resolve the substantive issues.
Tan is bound to return the proceeds of the dishonored BPI
Check based on the principle of unjust enrichment.
Jurisprudence defines a collecting bank as "any bank handling
an item for collection except the bank on which the check is
drawn."56 Upon receipt of a check for deposit, the collecting
bank binds itself to "credit the amount in [the depositor's]
account or infuse value thereon only after the drawee bank
shall have paid the amount of the check or [after] the check
[is] cleared for deposit."57
In this case, Tan deposited the BPI Check in his account with
Union Bank for collection. Clearly, Union Bank stands as the
collecting bank in this case. By receiving the BPI Check from
Tan, Union Bank obliged itself, as collecting bank, to credit
Tan's account only after BPI, as drawee, shall have paid the
amount of the said check or after the check is cleared for
deposit.58
As correctly observed by the CA, the dishonor of the BPI Check
is not disputed. Evidently, Union Bank was under no obligation
to effect payment in favor of Tan precisely because the BPI
Check which Tan deposited for collection had been
dishonored. Allowing Tan to retain the proceeds of the
dishonored BPI Check despite not being entitled thereto would
therefore permit unjust enrichment at Union Bank's expense.
The principle of unjust enrichment is codified under Article 22
of the Civil Code. It states:
ART. 22. Every person who through an act of performance by
another, or any other means, acquires or comes into
possession of something at the expense of the latter without
just or legal ground, shall return the same to him.
There is unjust enrichment when a person unjustly retains a
benefit to the loss of another, or when a person retains money
or property of another against the fundamental principles of
justice, equity, and good conscience.59
For the principle to apply, the following requisites must concur:
(i) a person is unjustly benefited; and (ii) such benefit is
derived at the expense of or with damages to
another.60 Expounding on these requisites, the Court,
in University of the Philippines v. Philab Industries,
Inc.,61 held:
Unjust enrichment claims do not lie simply because one party
benefits from the efforts or obligations of others, but instead it
must be shown that a party was unjustly enriched in the sense
that the term unjustly could mean illegally or unlawfully.
Moreover, to substantiate a claim for unjust enrichment, the
claimant must unequivocally prove that another party
knowingly received something of value to which he was not
entitled and that the state of affairs are such that it would be
unjust for the person to keep the benefit. Unjust enrichment is
a term used to depict result or effect of failure to make
remuneration of or for property or benefits received under
circumstances that give rise to legal or equitable obligation to
account for them; to be entitled to remuneration, one must
confer benefit by mistake, fraud, coercion, or request. Unjust
enrichment is not itself a theory of reconvey. Rather, it is a
prerequisite for the enforcement of the doctrine of
restitution.62 (Emphasis and underscoring supplied; italics
omitted)
The requisites for the application of the principle of unjust
enrichment are clearly present in this case. Here, it was
unequivocally established that Tan withdrew and utilized the
proceeds of the BPI Check fully knowing that he was not
entitled thereto.
To note, Tan's transaction records show that prior to the
deposit of the BPI Check subject of the present case, Tan had
deposited five other checks drawn against the same
Page 213 of 304
account.63 During Tan's cross-examination before the RTC,
Tan admitted that Union Bank notified him that all five checks
he had previously deposited had all been dishonored for the
reason "Account Closed" — which notification was made before
he deposited the BPI Check subject of the present case, thus:
"Q: Mr. Witness, it appears that you had previously deposited
BPI Checks also issued or also made by [Angli Lumber]. I think
these x x x BPI Checks were also deposited in your bank,
Union Bank, is that correct Mr. Witness?
A: That is correct, sir.
Q: In fact on five (5) occasions you had deposited BPI Checks
[i]ssued by [Angli Lumber] drawn against its BPI [a]ccount and
you deposited the same to your bank, x x x Union Bank in this
case, is that correct, Mr. Witness?
A: Yes, sir.
Q: In those five (5) occasions, Mr. witness, do you confirm that
all of these checks were returned to you because the account
of [Angli Lumber] was closed, is that correct?
A: Yes, sir. x x x
Q: Mr. Witness, I have here a return Check Advise dated
November 5, 2007. This is before the subject transaction. Can
you please tell this [court] if you recognize this written Check
Advise?
A: Yes, sir.
Q: You also pointed to a signature. Are you confirming that,
that is your signature, Mr. Witness?
A: Yes, sir.
Q: Also, this refers to Check No. 0206925, BPI San Fernando
Highway, drawee bank. It was deposited on October 30, 2007?
A: Yes, sir.
Q: Mr. Witness, I also have here a return check advise dated
November 7, 2007, can you please tell the court if you
recognize this document?
A: Yes, sir.
xxxx
Q: Whose signature is that, Mr. Witness?
A: My signature, sir.
Q: This return check advise refers to Check No. 0206927 and
also Check No. 0206926 and Check No. 0180723. The drawee
bank of these checks are all BPI San Fernando Highway and
the date[s] of the deposits are as follows: November 5, 2007
for Check No. 0206926 and November 3, 2007 for Check No.
0180723 all of these return check advise, Mr. Witness [state]
that the reason for the return is account closed, do you
confirm that, Mr. Witness?
A: Yes, sir.
xxxx
[Q]: So as early as October, Mr. Witness, you have been given
[c]hecks by this [Angli Lumber] and you have been depositing
the same in your bank account and all of these checks were
returned to you because you were informed that the account
had been closed, is that correct?
xxxx
Q: So these checks were all returned to you for being Account
closed?
A: Yes, sir." x x x64 (Emphasis and underscoring supplied)
Tan's testimony confirms that he was fully aware that Angli
Lumber's account with BPI had been closed. So he could not
have expected that the BPI Check in question would be
honored. Stated differently, he was cognizant of the BPI
Check's impending dishonor at the time he withdrew its
proceeds from his Union Bank account. That Tan withdrew the
proceeds of the BPI Check soon after discovering that the
corresponding funds had been credited to his account despite
his knowledge that the account from which the BPI Check was
issued had been closed for some time smacks of bad faith if
not fraud. Tan's refusal to return the funds despite Union
Bank's repeated demands is reprehensible.
On this score, reference to the Court's ruling in Equitable
Banking Corporation v. Special Steel Products,
Inc.65 (Equitable Banking) is proper. In said case, a certain
Jose Isidoro Uy (Uy), purchasing officer of International Copra
Export Corporation (Interco), presented three crossed checks
to Equitable Banking Corporation (Equitable) for collection.
These crossed checks were made payable to the order of
Special Steel Products, Inc. (SSPI), Interco's supplier.
The crossed checks bore the notation "account payee only".
Despite this notation, Equitable deposited the proceeds of the
three checks to Uy's personal account upon the latter's
instructions. Equitable claimed that it did so believing that Uy
was acting upon Interco's instructions. Due to the incident,
SSPI and its President Augusto Pardo (Pardo) filed an action
for damages against Equitable and Uy.
The Court adjudged Equitable and Uy jointly and severally
liable to pay SSPI and Pardo actual, moral, and exemplary
damages, as well as costs of suit. Nevertheless, to preclude
unjust enrichment, the Court directed Uy to reimburse
Page 214 of 304
Equitable whatever amount it may be required to pay SSPI and
Pardo, thus:
Equitable then insists on the allowance of [its] cross-claim
against Uy. The bank argues that it was Uy who was enriched
by the entire scheme and should reimburse Equitable for
whatever amounts the Court might order it to pay in damages
to SSPI.
Equitable is correct. There is unjust enrichment when (1) a
person is unjustly benefited, and (2) such benefit is derived at
the expense of or with damages to another. In the instant
case, the fraudulent scheme concocted by Uy allowed him to
improperly receive the proceeds of the three crossed checks
and enjoy the profits from these proceeds during the entire
time that it was withheld from SSPI. Equitable, through its
gross negligence and mislaid trust on Uy, became an unwitting
instrument in Uy's scheme. Equitable's fault renders it solidarity
liable with Uy, insofar as respondents are
concerned. Nevertheless, as between Equitable and Uy,
Equitable should be allowed to recover from Uy whatever
amounts Equitable may be made to pay under the judgment. It
is clear that Equitable did not profit in Uy's scheme.
Disallowing Equitable's cross-claim against Uy is tantamount to
allowing Uy to unjustly enrich himself at the expense of
Equitable. For this reason, the Court allows Equitable's cross-
claim against Uy.66 (Emphasis supplied)
The circumstances which impelled the Court to apply the
principle of unjust enrichment in Equitable Banking are present
in this case.
As stated, Union Bank's obligation to credit Tan's account is
contingent upon actual receipt of the value of the BPI Check or
notice of its clearance. Due to the dishonor of the BPI Check,
Union Bank's obligation to credit Tan's account with its
proceeds did not attach. Conversely, Tan's right to receive the
proceeds of said check did not arise. Nevertheless, Tan
withdrew the proceeds of the BPI Check with full and
established knowledge that the account against which it was
drawn had been closed. As in Equitable Banking, Tan, the
depositor herein, was unjustly benefited by reason of the
erroneous credit made in his favor. Such benefit, in turn, was
derived at the expense of Union Bank as the collecting bank.
Thus, based on the principle of unjust enrichment, Tan is
bound to return the proceeds of the BPI Check which he had
no right to receive.
PNB v. Cheah is inapplicable.
Tan argues that Union Bank should not be allowed to recover
the amount erroneously deposited in his account, since said
payment was made not because of any mistake of fact or law,
but because of Union Bank's own gross negligence. According
to Tan, such negligence on the part of Union Bank precludes
recovery, pursuant to the Court's ruling in PNB v. Cheah.
The Court disagrees.
In PNB v. Cheah, petitioner Ofelia Cheah (Ofelia) agreed to
accommodate Filipina Tuazon's (Filipina) request to have the
latter's Bank of America (BOA) Check cleared and encashed for
a service fee of 2.5%. Filipina was a mere acquaintance
introduced to Ofelia by her friend Adelina Guarin (Adelina).
Filipina enlisted Ofelia's assistance since she did not have a
dollar account necessary to encash the BOA Check which was
drawn for the amount of $300,000.00.
On November 4, 1992, Ofelia deposited the BOA Check to her
joint PNB dollar savings account (DSA) with her Malaysian
husband Cheah Chee Chong. Five days later, PNB received a
credit advice from Philadelphia National Bank in the United
States, stating that the proceeds of the BOA Check had been
temporarily credited to PNB's account as of November 6, 1992.
On November 16, 1992, PNB Division Chief Alberto Garin called
Ofelia to inform her that the BOA Check had been cleared and
that her joint DSA with Cheah Chee Chong had been credited
the amount of $299,248.37 (representing the face value of the
BOA Check sans bank charges). Hence, the proceeds of the
BOA Check were withdrawn and delivered to Filipina.
On November 20, 1992, PNB received notice that the BOA
Check bounced for being drawn against insufficient funds. PNB
demanded that Ofelia and Cheah Chee Chong return the funds
withdrawn. In turn, Ofelia attempted to retrieve the funds from
Filipina, but Filipina claimed that the funds had already been
distributed to several other individuals. Thus, Ofelia and Cheah
Chee Chong (Spouses Cheah) requested the assistance of the
National Bureau of Investigation (NBI) to apprehend the
beneficiaries of the BOA Check. Meanwhile, Spouses Cheah
and PNB negotiated the terms of reimbursement pending NBI's
investigation.
After negotiations between Spouses Cheah and PNB fell
through, PNB filed a complaint for sum of money before the
RTC. As their main defense, Spouses Cheah claimed that the
proximate cause of PNB's injury was its own negligence in
paying the BOA Check without waiting for the expiration of its
own 15-day clearing period.
The RTC ruled in favor of PNB. However, the CA reversed on
appeal, finding that PNB exhibited negligence in allowing the
premature withdrawal of the proceeds of the BOA Check.
However, the CA also found Ofelia guilty of contributory
negligence. Thus, the CA ruled that Spouses Cheah and PNB
should be made equally responsible for the resulting loss.
Unsatisfied, the parties filed their respective petitions for
review before the Court. Affirming the CA's Decision, the Court
ruled:
Here, while PNB highlights Ofelia's fault in accommodating a
stranger's check and depositing it to the bank, it remains mum
Page 215 of 304
in its release of the proceeds thereof without exhausting the xxxx
15-day clearing period, an act which contravened established
banking rules and practice. "[T]he indispensable requisites of the juridical relation known
as solutio indebiti, are, (a) that he who paid was not under
It is worthy of notice that the 15-day clearing period alluded to obligation to do so; and (b) that the payment was made by
is construed as 15 banking days. As declared by Josephine reason of an essential mistake of fact.
Estella, the Administrative Service Officer who was the bank's
Remittance Examiner, what was unusual in the processing of In the case at bench, PNB cannot recover the proceeds of the
the check was that the "lapse of 15 banking days was not check under the principle it invokes. In the first place, the
observed." Even PNB's agreement with Philadelphia National gross negligence of PNB, as earlier discussed, can never be
Bank regarding the rules on the collection of the proceeds of equated with a mere mistake of fact, which must be something
US dollar checks refers to "business/banking days." Ofelia excusable and which requires the exercise of prudence. No
deposited the subject check on November 4, 1992. Hence, the recovery is due if the mistake done is one of gross negligence.
15th banking day from the date of said deposit should fall on
The [S]pouses Cheah are guilty of contributory negligence and
November 25, 1992. However, what happened was that PNB
are bound to share the loss with the bank
Buendia Branch, upon calling up Ofelia that the check had
been cleared, allowed the proceeds thereof to be withdrawn on
"Contributory negligence is conduct on the part of the injured
November 17 and 18, 1992, a week before the lapse of the
party, contributing as a legal cause to the harm he has
standard 15-day clearing period.
suffered, which falls below the standard to which he is
required to conform for his own protection."
This Court already held that the payment of the amounts of
checks without previously clearing them with the drawee bank
The CA found Ofelia's credulousness blameworthy. We agree.
especially so where the drawee bank is a foreign bank and the
Indeed, Ofelia failed to observe caution in giving her full trust
amounts involved were large is contrary to normal or ordinary
in accommodating a complete stranger and this led her and
banking practice. Also, in Associated Bank v. Tan, wherein the
her husband to be swindled. Considering that Filipina was not
bank allowed the withdrawal of the value of a check prior to its
personally known to her and the amount of the foreign check
clearing, we said that "[b]efore the check shall have been
to be encashed was $300,000.00, a higher degree of care is
cleared for deposit, the collecting bank can only 'assume' at its
expected of Ofelia which she, however, failed to exercise under
own risk x x x that the check would be cleared and paid
the circumstances. Another circumstance which should have
out." The delay in the receipt by PNB Buendia Branch of the
goaded Ofelia to be more circumspect in her dealings was
November 13, 1992 SWIFT message notifying it of the
when a bank officer called her up to inform that the [BOA
dishonor of the subject check is of no moment, because had
C]heck has already been cleared way earlier than the 15-day
PNB Buendia Branch waited for the expiration of the clearing
clearing period. The fact that the check was cleared after only
period and had never released during that time the proceeds
eight banking days from the time it was deposited or contrary
of the check, it would have already been duly notified of its
to what [PNB Division Chief Alfredo Garin] told her that
dishonor. Clearly, PNB's disregard of its preventive and
clearing takes 15 days should have already put Ofelia on
protective measure against the possibility of being victimized
guard. She should have first verified the regularity of such
by bad checks had brought upon itself the injury of losing a
hasty clearance considering that if something goes wrong with
significant amount of money.
the transaction, it is she and her husband who would be put at
risk and not the accommodated party. However, Ofelia chose
It bears stressing that "the diligence required of banks is more
to ignore the same and instead actively participated in
than that of a Roman pater familias or a good father of a
immediately withdrawing the proceeds of the check. Thus, we
family. The highest degree of diligence is expected." PNB
are one with the CA in ruling that Ofelia's prior consultation
miserably failed to do its duty of exercising extraordinary
with PNB officers is not enough to totally absolve her of any
diligence and reasonable business prudence. The disregard of
liability. In the first place, she should have shunned any
its own banking policy amounts to gross negligence, which the
participation in that palpably shady transaction.67 (Emphasis
law defines as "negligence characterized by the want of even
supplied; citations omitted)
slight care, acting or omitting to act in a situation where there
is duty to act, not inadvertently but wilfully and intentionally
In PNB v. Cheah, the Court ruled that PNB was guilty of gross
with a conscious indifference to consequences in so far as
negligence as its own bank officer permitted Ofelia to
other persons may be affected." x x x
prematurely withdraw the proceeds of the BOA Check by
advising her of the funds' availability before the expiration of
Incidentally, PNB obliges the [S]pouses Cheah to return the
the 15-day clearing period mandated by its own internal rules
withdrawn money under the principle of solutio indebiti, which
(i.e., PNB General Circular No. 52-101/88). Despite PNB's gross
is laid down in Article 2154 of the Civil Code[.]
negligence, the Court nevertheless tempered PNB's liability due

Page 216 of 304

to Ofelia's contributory negligence. Thus, in PNB v. Cheah, the
parties were made to suffer the resulting loss equally.
A juxtaposition of the circumstances attendant in PNB v.
Cheah and the present case shows that Tan's reliance on PNB
v. Cheah does not support his cause. In fact, reliance on PNB
v. Cheah actually weakens Tan's claim.
It is well established that whoever alleges a fact has the
burden of proving it because mere allegation is not
evidence.68 The records show that while Tan harped on Union
Bank's alleged gross negligence, he failed to cite the specific
provision of law, banking regulation, or internal rule which had
been violated by Union Bank. What is clear from the evidence
on record is that due to a technical error in Union Bank's
system, the funds corresponding to the value of the BPI Check
were credited to Tan's account before actual return and
clearance. Because of this error, said funds
were inadvertently made available for Tan's withdrawal upon
Union Bank's mistaken belief that the check had already been
cleared. Upon notice of the BPI Check's dishonor, Union Bank's
officer immediately notified Tan of such fact.69 However,
despite repeated demands, Tan refused to return the amount
he had withdrawn insisting that the BPI Check was given to
him for value and in the course of business.70
Clearly, Tan failed to substantiate his imputation of gross
negligence. While Union Bank concedes that a technical error
in its own system allowed Tan to withdraw the proceeds of the
BPI Check before clearance, this error cannot be likened to the
blatant violation of internal procedure committed by PNB's
Division Chief in PNB v. Cheah.
More importantly, in PNB v. Cheah, respondent Ofelia
did not benefit from the proceeds of the dishonored BOA
Check. While Ofelia deposited said check to facilitate
encashment, she subsequently delivered the proceeds to
Filipina. In this case, it is established that the funds in dispute
had been withdrawn by Tan himself. In fact, Tan
acknowledged that he used said funds to pay one of his
suppliers.71 Allowing Tan to benefit from the erroneous
payment would undoubtedly permit unjust enrichment at Union
Bank's expense particularly in light of circumstances which
indicate that Tan withdrew in bad faith the mistakenly released
funds.
Article 1909 does not preclude recovery on the part of Union
Bank.
In an attempt to evade liability, Tan also argues that, as his
collecting agent, Union Bank should be held solely responsible
for losses arising from its own negligence, pursuant to Article
1909 of the Civil Code. Tan invokes the Court's ruling
in Metrobank v. CA as basis.
Tan's reliance on Metrobank v. CA is misplaced.
In said case, a certain Eduardo Gomez (Eduardo) deposited 38
treasury warrants with a total amount of P1,755,228.37 to his
account with Golden Savings and Loan Association (Golden
Savings). Since Golden Savings did not have its own clearing
facilities, its cashier Gloria Castillo endorsed said warrants and
deposited them in Golden Savings' account with petitioner
Metropolitan Bank and Trust Company (Metrobank).
Gloria went to Metrobank several times to confirm whether the
warrants had been cleared. While Gloria was initially told to
wait, Metrobank eventually allowed her to withdraw the
proceeds of the warrants on behalf of Golden Savings due to
"exasperation" over her repeated inquiries, and as a form of
accommodation to Golden Savings as a valued Client.
Thereafter, Eduardo was allowed to withdraw from his deposit
account with Golden Savings.
Five days after Eduardo's last withdrawal, Metrobank informed
Golden Savings that 32 out of the 38 treasury warrants were
dishonored by the Bureau of Treasury. Thus, Metrobank
demanded that Golden Savings refund the proceeds previously
withdrawn to make up for the deficit in its account. Golden
Savings rejected the demand, causing Metrobank to file a
complaint for collection of sum of money with the RTC.
The RTC ruled in favor of Golden Savings. The CA affirmed on
appeal. Aggrieved, Metrobank filed a petition for review before
the Court, alleging, among others, that "[it] cannot be held
liable for its failure to collect on the warrants" since it merely
acted as a collecting agent.72
In its Decision, the Court applied Article 1909 to hold
Metrobank liable for the losses suffered by Golden Savings as a
result of Metrobank's negligence.ℒαwρhi ৷ The Court held:
From the above undisputed facts, it would appear to the Court
that Metrobank was indeed negligent in giving Golden Savings
the impression that the treasury warrants had been cleared
and that, consequently, it was safe to allow [Eduardo] to
withdraw the proceeds thereof from his account with it.
Without such assurance, Golden Savings would not have
allowed the withdrawals; with such assurance, there was no
reason not to allow the withdrawal. Indeed, Golden Savings
might even have incurred liability for its refusal to return the
money that to all appearances belonged to the depositor, who
could therefore withdraw it any time and for any reason he
saw fit.
It was, in fact, to secure the clearance of the treasury warrants
that Golden Savings deposited them to its account with
Metrobank. Golden Savings had no clearing facilities of its own.
It relied on Metrobank to determine the validity of the warrants
through its own services. The proceeds of the warrants were
withheld from [Eduardo] until Metrobank allowed Golden
Savings itself to withdraw them from its own deposit. It was
only when Metrobank gave the go-signal that [Eduardo] was
Page 217 of 304
finally allowed by Golden Savings to withdraw them from his
own account.73 (Emphasis supplied)
By invoking Article 1909 as applied in Metrobank v. CA, Tan
appears to assert that he, as principal-depositor, suffered
losses because of the technical error in Union Bank's system.
This assertion is clearly false.
As stated, Tan had no right to receive the proceeds of the BPI
Check. Evidently, Tan did not suffer any loss as a result of
Union Bank's technical error. On the contrary, Tan
unduly gained from the technical error, as it allowed him to
withdraw and utilize funds which he had no right to receive.
The fact that Tan received the BPI Check for value in the
ordinary course of business does not negate his obligation to
return the funds erroneously credited in his favor. Tan's
remedy, if any, lies not against Union Bank, but against the
drawer of the BPI Check Angli Lumber. All told, Tan's
obligation to return the erroneously credited funds to Union
Bank stands.
Amount due
The records show that Tan had a balance amounting to
P93,700.60 before the value of the BPI Check was erroneously
credited to his Union Bank account.74 Due to Union Bank's
system error, Tan's account was credited with the amount of
P420,000.00, thereby increasing his balance to P513,700.60.
Subsequently, Tan's account was credited an additional
amount of P1,000.00 as a result of a separate encashment.
Later still, Tan withdrew the amount of P480,000.00. This left
Tan's account with the balance of P34,700.60. To illustrate:
Account balance prior to deposit P 93,700.60
Amount credited due to system error 420,000.00
Separate encashment 1,000.00
Account balance prior to withdrawal 514,700.60
Amount withdrawn (480,000.00)
Account balance after withdrawal P 34,700.60
Since Tan refused to return the mistakenly credited amount of
P420,000.00, Union Bank applied Tan's remaining balance of
P34,700.60 to set off his debt before it filed its Complaint
before the RTC.
Thus, the sum due to Union Bank is P385,299.40, as stated in
the RTC Decision. This awarded sum, not being a loan or
forbearance of money, is subject to 6% interest per annum. In
turn, such interest should be computed from the time when
the amount due had been established with reasonable
certainty, which, in this case, was the date of Union
Bank's extrajudicial demand on November 20, 2007.
The deletion of damages, attorney's fees and costs of suit was
not assailed.
Finally, the Court shall not delve into the issue of damages,
attorney's fees, and cost of suit in this Decision considering
that Union Bank no longer assailed the deletion of these
awards before this Court.
WHEREFORE, the Petition is DENIED. The Decision dated
February 3, 2016 and Resolution dated July 5, 2016 rendered
by the Court of Appeals, Eleventh Division in CA-G.R. CV No.
102802 are AFFIRMED.
Petitioner Rodriguez Ong Tan, doing business under the name
and style Yon Mitori International Industries, is ORDERED to
pay respondent Union Bank of the Philippines the amount
of P385,299.40 with legal interest at the rate of 6% per
annum, computed from the time of extrajudicial demand on
November 20, 2007 until full payment.
SO ORDERED.
Castro vs People
JEROME CASTRO, Petitioner, versus, PEOPLE OF THE
PHILIPPINES,Respondent.
CORONA, J.:
This petition for review on certiorari[1] emanated from the
complaint for grave oral defamation[2] filed by Albert P. Tan
against petitioner Jerome Castro.
The facts follow.
On November 11, 2002, Reedley International School (RIS)
dismissed Tan's son, Justin Albert (then a Grade 12 student),
for violating the terms of his disciplinary probation.[3] Upon
Tan's request, RIS reconsidered its decision but imposed "non-
appealable" conditions such as excluding Justin Albert from
participating in the graduation ceremonies.
Aggrieved, Tan filed a complaint in the Department of
Education (Dep-Ed) for violation of the Manual of Regulation of
Private Schools, Education Act of 1982 and Article 19 of the
Civil Code[4] against RIS. He alleged that the dismissal of his
son was undertaken with malice, bad faith and evident
premeditation. After investigation, the Dep-Ed found that RIS'
code violation point system allowed the summary imposition of
unreasonable sanctions (which had no basis in fact and in law).
The system therefore violated due process. Hence, the Dep-Ed
nullified it. [5]
Page 218 of 304

Meanwhile, on November 20, 2002, the Dep-Ed ordered RIS to
readmit Justin Albert without any condition.[6] Thus, he was
able to graduate from RIS and participate in the
commencement ceremonies held on March 30, 2003.
After the graduation ceremonies, Tan met Bernice C. Ching, a
fellow parent at RIS. In the course of their conversation, Tan
intimated that he was contemplating a suit against the officers
of RIS in their personal capacities, including petitioner who was
the assistant headmaster.
Ching telephoned petitioner sometime the first week of April
and told him that Tan was planning to sue the officers of RIS
in their personal capacities. Before they hung up, petitioner
told Ching:
Okay, you too, take care and be careful talking to [Tan], that's
dangerous.
Ching then called Tan and informed him that petitioner said
"talking to him was dangerous."
Insulted, Tan filed a complaint for grave oral defamation in the
Office of the City Prosecutor of Mandaluyong City against
petitioner on August 21, 2003.
On November 3, 2003, petitioner was charged with grave oral
defamation in the Metropolitan Trial Court (MeTC) of
Mandaluyong City, Branch 60[7] under the following
Information:
That on or about the 13th day of March, 2003 in the City of
Mandaluyong, Philippines, a place within the jurisdiction of this
Honorable Court, the above-named [petitioner], with deliberate
intent of bringing ATTY. ALBERT P. TAN, into discredit,
dishonor, disrepute and contempt, did then and there, willfully,
unlawfully and feloniously speak and utter the following words
to Ms. Bernice C. Ching:
"OK, YOU TOO, YOU TAKE CARE AND BE CAREFUL TALKING
TO [TAN], THAT'S DANGEROUS."
and other words of similar import of a serious and insulting
nature.
CONTRARY TO LAW.
Petitioner pleaded not guilty during arraignment.
The prosecution essentially tried to establish that petitioner
depicted Tan as a "dangerous person." Ching testified that
petitioner warned her that talking to Tan was dangerous. Tan,
on the other hand, testified that petitioner's statement shocked
him as it portrayed him as "someone capable of committing
undesirable acts." He added that petitioner probably took
offense because of the complaint he filed against RIS in the
Dep-Ed.
For his defense, petitioner denied harboring ill-feelings against
Tan despite the latter's complaint against RIS in the Dep-Ed.
Although he admitted conversing with Ching (whom he
considered as a close acquaintance) on the telephone a few
days after RIS' 2003 commencement exercises, petitioner
asserted that he never said or insinuated that Tan or talking to
Tan was dangerous. On cross-examination, however, he did
not categorically deny the veracity of Ching's statement.
The MeTC found that Ching's statements in her affidavit and in
open court were consistent and that she did not have any
motive to fabricate a false statement. Petitioner, on the other
hand, harbored personal resentment, aversion and ill-will
against Tan since the Dep-Ed compelled RIS to readmit his
son. Thus, the MeTC was convinced that petitioner told Ching
talking to Tan was dangerous and that he uttered the
statement with the intention to insult Tan and tarnish his social
and professional reputation.
In a decision dated December 27, 2005, the MeTC found
petitioner guilty beyond reasonable doubt of grave oral
defamation:[8]
WHEREFORE, judgment is hereby rendered finding accused,
Jerome Castro GUILTY beyond reasonable doubt of the crime
of Grave Oral Defamation, sentencing him therefore, in
accordance to Article 358(1) of the Revised Penal Code and
applying the Indeterminate Sentence Law to suffer the penalty
of imprisonment of 1 month and 1 day of arresto mayor as
minimum to 4 months and 1 day of arresto mayor as
maximum.
On appeal, the Regional Trial Court (RTC) affirmed the factual
findings of the MeTC. However, in view of the animosity
between the parties, it found petitioner guilty only of slight oral
defamation. But because Tan filed his complaint in the Office
of the City Prosecutor of Mandaluyong City only on August 21,
2003 (or almost five months from discovery), the RTC ruled
that prescription had already set in; it therefore acquitted
petitioner on that ground. [9]
On April 19, 2007, the Office of the Solicitor General (OSG)
filed a petition for certiorari in the Court of Appeals (CA)
assailing the decision of the RTC.[10] It contended that the
RTC acted with grave abuse of discretion when it downgraded
petitioner's offense to slight oral defamation. The RTC
allegedly misappreciated the antecedents which provoked
petitioner to utter the allegedly defamatory statement against
Tan.
The CA found that the RTC committed grave abuse of
Page 219 of 304
discretion when it misapprehended the totality of the
circumstances and found petitioner guilty only of slight oral
defamation. Thus, the CA reinstated the MeTC decision.[11]
Petitioner moved for reconsideration but it was denied.[12]
Hence, this recourse.
Petitioner basically contends that the CA erred in taking
cognizance of the petition for certiorari inasmuch as the OSG
raised errors of judgment (i.e., that the RTC misappreciated
the evidence presented by the parties) but failed to prove that
the RTC committed grave abuse of discretion. Thus, double
jeopardy attached when the RTC acquitted him.
We grant the petition.
No person shall be twice put in jeopardy of punishment for the
same offense.[13] This constitutional mandate is echoed in
Section 7 of Rule 117 of the Rules of Court which provides:
Former conviction or acquittal; double jeopardy. - When an
accused has been convicted or acquitted or the case against
him dismissed or otherwise terminated without his express
consent by a court of competent jurisdiction, upon a valid
complaint or in information or other formal charge sufficient in
form and substance to sustain a conviction and after the
accused had pleaded to the charge, the conviction or acquittal
of the accused or the dismissal of the case shall be a bar to
another prosecution for the offense charged or for any attempt
to commit the same or frustration thereof, or for any offense
which necessarily includes or is necessarily included in the
offense charged in the former complaint or information.
xxxxxxxxx
Under this provision, double jeopardy occurs upon (1) a valid
indictment (2) before a competent court (3) after arraignment
(4) when a valid plea has been entered and (5) when the
accused was acquitted or convicted or the case was dismissed
or otherwise terminated without the express consent of the
accused.[14] Thus, an acquittal, whether ordered by the trial
or appellate court, is final and unappealable on the ground of
double jeopardy.[15]
The only exception is when the trial court acted with grave
abuse of discretion or, as we held in Galman v.
Sandiganbayan,[16] when there was mistrial. In such
instances, the OSG can assail the said judgment in a petition
for certiorari establishing that the State was deprived of a fair
opportunity to prosecute and prove its case.[17]
The rationale behind this exception is that a judgment
rendered by the trial court with grave abuse of discretion was
issued without jurisdiction. It is, for this reason, void.
Consequently, there is no double jeopardy.
In this case, the OSG merely assailed the RTC's finding on the
nature of petitioner's statement, that is, whether it constituted
grave or slight oral defamation. The OSG premised its
allegation of grave abuse of discretion on the RTC's
"erroneous" evaluation and assessment of the evidence
presented by the parties.
What the OSG therefore questioned were errors of judgment
(or those involving misappreciation of evidence or errors of
law). However, a court, in a petition for certiorari, cannot
review the public respondent's evaluation of the evidence and
factual findings.[18] Errors of judgment cannot be raised in a
Rule 65 petition as a writ of certiorari can only correct errors of
jurisdiction (or those involving the commission of grave abuse
of discretion).[19]
Because the OSG did not raise errors of jurisdiction, the CA
erred in taking cognizance of its petition and, worse, in
reviewing the factual findings of the RTC.[20] We therefore
reinstate the RTC decision so as not to offend the
constitutional prohibition against double jeopardy.
At most, petitioner could have been liable for damages under
Article 26 of the Civil Code[21]:
Article 26. Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other persons.
The following and similar acts, though they may not constitute
a criminal offense, shall produce a cause of action for
damages, prevention and other relief:
xxxxxxxxx
(3) Intriguing to cause another to be alienated from his
friends;
xxxxxxxxx
Petitioner is reminded that, as an educator, he is supposed to
be a role model for the youth. As such, he should always act
with justice, give everyone his due and observe honesty and
good faith.[22]
WHEREFORE, the petition is hereby GRANTED. The August 29,
2007 decision and December 5, 2007 resolution of the Court of
Appeals in CA-G.R. SP No. 98649 are REVERSED and SET
ASIDE. The November 20, 2006 decision of the Regional Trial
Court of Mandaluyong City, Branch 212 is REINSTATED.
Petitioner Jerome Castro is ACQUITTED of slight oral
defamation as defined and penalized in Article 358 of the
Revised Penal Code.
No pronouncement as to costs.
Page 220 of 304

SO ORDERED.
Ledesma vs CA and Delmo
OSE B. LEDESMA, petitioner, vs. HON. COURT OF
APPEALS, Spouses PACIFICO DELMO and SANCHA
DELMO (as private respondents), respondents.
GUTIERREZ, JR., J.:
This petition seeks to reverse the decision of the respondent
Court of Appeals which affirmed the decision of the Court of
First Instance of Iloilo, adjudging the petitioner, who was then
the President of the West Visayas College, liable for damages
under Article 27 of the Civil Code of the Philippines for failure
to graduate a student with honors.
The facts are not disputed.
An organization named Student Leadership Club was formed
by some students of the West Visayas College. They elected
the late Violeta Delmo as the treasurer. In that capacity, Delmo
extended loans from the funds of the club to some of the
students of the school. The petitioner claims that the said act
of extending loans was against school rules and regulations.
Thus, the petitioner, as President of the School, sent a letter to
Delmo informing her that she was being dropped from the
membership of the club and that she would not be a candidate
for any award or citation from the school.
Delmo asked for a reconsideration of the decision but the
petitioner denied it. Delmo, thus, appealed to the Office of the
Director of the Bureau of Public Schools.
The Director, after due investigation, rendered a decision on
April 13, 1966 which provided:
"Records of the preliminary investigation conducted by one of
the legal officers of this Office disclosed the following. That
Violeta Delmo was the treasurer of the Student Leadership
Club, an exclusive student organization; that pursuant to
Article IX of the Constitution and By-Laws of the club, it passed
Resolution No. 2, authorizing the treasurer to disburse funds of
the Club to students for financial aid and other humanitarian
purposes; that in compliance with said resolution and as
treasurer of the Club, Violeta Delmo extended loans to some
officers and members of the Club upon proper application duly
approved by the majority of the members of the Executive
Board; and that upon receiving the report from Mr. Jesse
Dagoon, adviser of the funds of the Club, that Office
conducted an investigation on the matter and having been
convinced of the guilt of Violeta Delmo and the other officers
and members of the Club, that Office rendered the order or
decision in question. In justifying that Office's order or
decision, it is contended that approval by that Office of the
Constitution and By-Laws of the Club is necessary for its
effectivity and validity and since it was never submitted to that
Office, the Club had no valid constitution and By-Laws and that
as a consequence, Resolution No. 2 which was passed based
on the Constitution and By-Laws is without any force and
effect and the treasurer, Violeta Delmo, who extended loans to
some officers and members of the Club pursuant thereto are
illegal (sic), hence, she and the other students involved are
deemed guilty of misappropriating the funds of the Club. On
the other hand, Raclito Castaneda, Nestor Golez and Violeta
Delmo, President, Secretary and Treasurer of the Club,
respectively, testified that the Club had adopted its
Constitution and By-Laws in a meeting held last October 3,
1965, and that pursuant to Article I of said Constitution and
By-Laws, the majority of the members of the Executive Board
passed Resolution No. 2, which resolution became the basis for
the extension of loans to some officers and members of the
Club, that the Club honestly believed that its Constitution and
By-Laws has been approved by the superintendent because
the adviser of the Club, Mr. Jesse Dagoon, assured the
President of the Club that he will cause the approval of the
Constitution and By-Laws by the Superintendent; the officers
of the Club have been inducted to office on October 9, 1965 by
the Superintendent and that the Club had been likewise
allowed to co-sponsor the Education Week Celebration.
"After a careful study of the records, this Office sustains the
action taken by the Superintendent in penalizing the adviser of
the Club as well as the officers and members thereof by
dropping them from membership therein. However, this Office
is convinced that Violeta M. Delmo had acted in good faith, in
her capacity as Club Treasurer, in extending loans to the
officers and members of the Student Leadership Club.
Resolution No. 2 authorizing the Club treasurer to discharge
funds to students in need of financial assistance and other
humanitarian purposes had been approved by the Club
adviser, Mr. Jesse Dagoon, with the notation that approval was
given in his capacity as adviser of the Club and extension of
the Superintendent's personality. Aside from misleading the
officers and members of the Club, Mr. Dagoon, had
unsatisfactorily explained why he failed to give the Constitution
and By-Laws of the Club to the Superintendent for approval
despite his assurance to the Club president that he would do
so. With this finding of negligence on the part of the Club
adviser, not to mention laxity in the performance of his duties
as such, this Office considers as too severe and unwarranted
that portion of the questioned order stating that Violeta Delmo
`shall not be a candidate for any award or citation from this
school or any organization in this school.' Violeta Delmo, it is
noted, has been a consistent full scholar of the school and she
alone has maintained her scholarship. The decision in question
would, therefore, set at naught all her sacrifice and frustrate
her dreams of graduating with honors in this year's
commencement exercises.
Page 221 of 304
"In view of all the foregoing, this Office believes and so holds
and hereby directs that appellant Violeta M. Delmo, and for
that matter all other Club members or officers involved in this
case, be not deprived of any award, citation or honor from the
school, if they are otherwise entitled thereto." (Rollo, pp. 28-
30)
On April 27, 1966, the petitioner received by mail the decision
of the Director and all the records of the case. On the same
day, petitioner received a telegram stating the following:
"AIRMAIL RECORDS DELMO CASE MISSENT THAT OFFICE"
The Director asked for the return only of the records but the
petitioner allegedly mistook the telegram as ordering him to
also send the decision back. On the same day, he returned by
mail all the records plus the decision of the Director to the
Bureau of Public Schools.
The next day, the petitioner received another telegram from
the Director ordering him to furnish Delmo with a copy of the
decision. The petitioner, in turn, sent a night letter to the
Director informing the latter that he had sent the decision back
and that he had not retained a copy thereof.
On May 3, 1966, the day of the graduation, the petitioner
received another telegram from the Director ordering him not
to deprive Delmo of any honors due her. As it was impossible
by this time to include Delmo's name in the program as one of
the honor students, the petitioner let her graduate as a plain
student instead of being awarded the Latin honor of Magna
Cum Laude.
To delay the matter further, the petitioner on May 5, 1966,
wrote the Director asking for a reconsideration of the latter's
decision because he believed that Delmo should not be allowed
to graduate with honors. The Director denied the petitioner's
request.
On July 12, 1966, the petitioner finally instructed the Registrar
of the school to enter into the scholastic records of Delmo the
honor, "Magna Cum Laude."
On July 30, 1966, Delmo, then a minor, was joined by her
parents in filing an action for damages against the petitioner.
During the pendency of the action, however, Delmo passed
away, and thus, an Amended and Supplemental Complaint was
filed by her parents as her sole and only heirs.
The trial court after hearing rendered judgment against the
petitioner and in favor of the spouses Delmo. The court said:
"Let us go to specific badges of the defendant's (now
petitioner's) bad faith. Per investigation of Violeta Delmo's
appeal to Director Vitaliano Bernardino of the Bureau of Public
Schools (Exhibit "L"), it was the defendant who inducted the
officers of the Student Leadership Club on October 9, 1965. In
fact the Club was allowed to co-sponsor the Education Week
Celebration. (Exh. "L"). If the defendant did not approve of the
constitution and by-laws of the Club, why did he induct the
officers into office and allow the Club to sponsor the Education
Week Celebration? It was through his own act that the
students were misled to do as they did. Coupled with the
defendant's tacit recognition of the Club was the assurance of
Mr. Jesse Dagoon, Club Adviser, who made the students
believe that he was acting as an extension of Mr. Ledesma's
personality. (Exhibit "L").
"Another badge of the defendant's want of good faith is the
fact that, although, he knew as early as April 27, 1966 that per
decision of Director Bernardino, Exhibit "L," he was directed to
give honors to Miss Delmo, he kept said information to himself.
He told the Court that he knew that the letter of Director
Bernardino directed him not to deprive Miss Delmo the honors
due her, but she (sic) says that he has not finished reading the
letter decision, Exhibit "L," of Director Bernardino, directing
him to give honors to Miss Delmo. (Tsn, Feb. 5, 1974,
testimony of Mr. Ledesma, pp. 33-35). It could not be true that
he has not finished reading the letter-decision, Exh. "L,"
because said letter consisted of only three pages, and the
portion which directed that Miss Delmo `be not deprived of
any award, citation or honor from the school, if otherwise
entitled thereto' is found at the last paragraph of the same.
How did he know the last paragraph if he did not read the
letter.
"Defendant's actuations regarding Miss Delmo's case had been
one of bias and prejudice. When his action would favor him, he
was deliberate and circumspect to the utter prejudice and
detriment of Miss Delmo. Thus, although, as early as April 27,
1966, he knew of the exoneration of Miss Delmo by Director
Bernardino, he withheld the information from Miss Delmo. This
is eloquently dramatized by Exh. "11" and Exh. "13." On April
29, 1966, Director Bernardino cabled him to furnish Violeta
Delmo copy of the Decision, Exh. "L," but instead of informing
Miss Delmo about the decision, since he said he mailed back
the decision on April 28, 1988, he sent a night letter on April
29, 1966, to Director Bernardino, informing the latter that he
had returned the decision (Exh. "13"), together with the
record. Why a night letter when the matter was of utmost
urgency to the parties in the case, because graduation day was
only four days ahead? An examination of the telegrams sent by
the defendant shows that he had been sending ordinary
telegrams and not night letters. (Exh. "5," Exhibit "7"). At
least, if the defendant could not furnish a copy of the decision,
(Exh. "L"), to Miss Delmo, he should have told her about it or
directed that Miss Delmo's honors and citation in the
commencement programs be announced or indicated. But Mr.
Ledesma is one who cannot admit a mistake. Very
ungentlemanly! this is borne out by his own testimony, despite
Page 222 of 304
his knowledge that his decision to deprive Miss Delmo of
honors due to her was overturned by Director Bernardino, he
insisted on his wrong belief. To quote the defendant, I
believed that she did not deserve those honors.' (Tsn. Feb. 5,
1974, p. 43, italics supplied). Despite the telegram of Director
Bernardino which the defendant received hours before the
commencement exercises on May 3-4, 1966, he did not obey
Director Bernardino because he said in his testimony that he
would be embarrassed. Tsn ---- Feb. 5, 1974, p. 46). Evidently,
he knew only his embarrassment and not that of Director
Bernardino whose order was being flagrantly and wantonly
disregarded by him. And certainly, not the least of Miss
Delmo's embarrassment. His acts speak eloquently of his bad
faith and unjust frame of mind ---- warped by his delicate
sensitivity for having been challenged by Miss Delmo, a mere
student.
Xxx xxx xxx
"Finally, the defendant's behaviour relative to Miss Delmo's
case smacks of contemptuous arrogance, oppression and
abuse of power. Come to think of it. He refused to obey the
directive of Director Bernardino and instead, chose to feign
ignorance of it." (Record on Appeal, p. 72-76).
The trial court awarded P20,000.00 to the estate of Violeta
Delmo and P10,000.00 to her parents for moral damages;
P5,000.00 for nominal damages to Violeta's estate; exemplary
damages of P10,000.00 and P2,000.00 attorney's fees.
On appeal, the Court of Appeals affirmed the decision. Hence,
this petition.
The issues raised in this petition can be reduced to the sole
question of whether or not the respondent Court of Appeals
erred in affirming the trial court's finding that petitioner is
liable for damages under Article 27 of the New Civil Code.
We find no reason why the findings of the trial and appellate
courts should be reversed. It cannot be disputed that Violeta
Delmo went through a painful ordeal which was brought about
by the petitioner's neglect of duty and callousness. Thus, moral
damages are but proper. As we have affirmed in the case of
Prudenciado v. Alliance Transport System, Inc., 148 SCRA 440,
448):
"There is no argument that moral damages include physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation,
and similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate
result of defendant's wrongful act or omission." (People v.
Baylon, 129 SCRA 62 (1984)).
The Solicitor-General tries to cover-up the petitioner's
deliberate omission to inform Miss Delmo by stating that it was
not the duty of the petitioner to furnish her a copy of the
Director's decision. Granting this to be true, it was nevertheless
the petitioner's duty to enforce the said decision. He could
have done so considering that he received the decision on April
27, 1966 and even though he sent it back with the records of
the case, he undoubtedly read the whole of it which consisted
of only three pages. Moreover, the petitioner should have had
the decency to meet with Mr. Delmo, the girl's father, and
inform the latter, at the very least of the decision. This, the
petitioner likewise failed to do, and not without the attendant
bad faith which the appellate court correctly pointed out in its
decision, to wit:
"Third, assuming that defendant could not furnish Miss Delmo
of a copy of the decision, he could have used his discretion
and plain common sense by informing her about it or he could
have directed the inclusion of Miss Delmo's honor in the
printed commencement program or announced it during the
commencement exercises.
"Fourth, defendant despite receipt of the telegram of Director
Bernardino hours before the commencement exercises on May
3-4, 1966, disobeyed his superior by refusing to give the
honors due Miss Delmo with a lame excuse that he would be
embarrassed if he did so, to the prejudice of and in complete
disregard of Miss Delmo's rights.
"Fifth, defendant did not even extend the courtesy of meeting
Mr. Pacifico Delmo, father of Miss Delmo, who tried several
times to see defendant in his office thus Mr. Delmo suffered
extreme disappointment and humiliation.
Xxx xxx xxx
"Defendant, being a public officer should have acted with
circumspection and due regard to the rights of Miss Delmo.
Inasmuch as he exceeded the scope of his authority by
defiantly disobeying the lawful directive of his superior,
Director Bernardino, defendant is liable for damages in his
personal capacity. . . . ." (Rollo, pp. 57-58)
Based on the undisputed facts, exemplary damages are also in
order. In the same case of Prudenciado v. Alliance Transport
System, Inc., supra., at p. 450, we ruled:
"The rationale behind exemplary or corrective damages is, as
the name implies, to provide an example or correction for the
public good (Lopez, et al. v. Pan American World Airways, 16
SCRA 431)."
However, we do not deem it appropriate to award the spouses
Delmo damages in the amount of P10,000.00 in their individual
capacity, separately from and in addition to what they are
already entitled to as sole heirs of the deceased Violeta Delmo.
Page 223 of 304
Thus, the decision is modified insofar as moral damages are
awarded to the spouses in their own behalf.
WHEREFORE, the petition is DISMISSED for lack of merit. The
decision of the Court of Appeals is AFFIRMED with the slight
modification as stated in the preceding paragraph. This
decision is immediately executory.
SO ORDERED.
Campugan vs Tolentino
JESSIE T. CAMPUGAN AND ROBERT C. TORRES,
COMPLAINANTS, VS. ATTY. FEDERICO S. TOLENTINO,
JR., ATTY. RENATO G. CUNANAN, ATTY. DANIEL F.
VICTORIO, JR., AND ATTY. ELBERT T. QUILALA,
RESPONDENTS.
[A.C. No. 8725]
JESSIE T. CAMPUGAN AND ROBERT C. TORRES,
COMPLAINANTS, VS. ATTY. CONSTANTE P. CALUYA,
JR., AND ATTY. ELBERT T. QUILALA, RESPONDENTS.
BERSAMIN, J.:
In this consolidated administrative case, complainants Jessie T.
Campugan and Robert C. Torres seek the disbarment of
respondents Atty. Federico S. Tolentino, Jr., Atty. Daniel F.
Victorio, Jr., Atty. Renato G. Cunanan, Atty. Elbert T. Quilala
and Atty. Constante P. Caluya, Jr. for allegedly falsifying a
court order that became the basis for the cancellation of their
annotation of the notice of adverse claim and the notice of lis
pendens in the Registry of Deeds in Quezon City.
Antecedents
 
Atty. Victorio, Jr. had replaced Atty. Edgardo Abad as counsel
of the complainants in a civil action they brought to seek the
annulment of Transfer Certificate of Title (TCT) No. N-290546
of the Registry of Deeds of Quezon City in the first week of
January 2007 in the Regional Trial Court (RTC) in Quezon City
(Civil Case No. Q-07-59598). They impleaded as defendants
Ramon and Josefina Ricafort, Juliet Vargas and the Register of
Deeds of Quezon City. They caused to be annotated on TCT
No. N-290546 their affidavit of adverse claim, as well as the
notice of lis pendens.[1] Atty. Tolentino, Jr. was the counsel of
defendant Ramon and Josefina Ricafort.
 
In their sworn complaint for disbarment dated April 23, 2009
(later docketed as A.C. No. 8261),[2] the complainants narrated
that as the surviving children of the late Spouses Antonio and
Nemesia Torres, they inherited upon the deaths of their
parents a residential lot located at No. 251 Boni Serrano
Street, Murphy, Cubao, Quezon City registered under Transfer
Certificate of Title (TCT) No. RT-64333(35652) of the Register
of Deeds of Quezon City;[3] that on August 24, 2006, they
discovered that TCT No. RT-64333(35652) had been unlawfully
cancelled and replaced by TCT No. N-290546 of the Register of
Deeds of Quezon City under the names of Ramon and Josefina
Ricafort;[4] and that, accordingly, they immediately caused the
annotation of their affidavit of adverse claim on TCT No. N-
290546.
 
It appears that the parties entered into an amicable settlement
during the pendency of Civil Case No. Q-07-59598 in order to
end their dispute,[5] whereby the complainants agreed to sell
the property and the proceeds thereof would be equally
divided between the parties, and the complaint and
counterclaim would be withdrawn respectively by the
complainants (as the plaintiffs) and the defendants. Pursuant
to the terms of the amicable settlement, Atty. Victorio, Jr. filed
a Motion to Withdraw Complaint dated February 26, 2008,
[6]
 which the RTC granted in its order dated May 16, 2008 upon
noting the defendants' lack of objection thereto and the
defendants' willingness to similarly withdraw their
counterclaim.[7]
 
The complainants alleged that from the time of the issuance by
the RTC of the order dated May 16, 2008, they could no longer
locate or contact Atty. Victorio, Jr. despite making several
phone calls and visits to his office; that they found out upon
verification at the Register of Deeds of Quezon City that new
annotations were made on TCT No. N-290546, specifically: (1)
the annotation of the letter-request appearing to be filed by
Atty. Tolentino, Jr.[8] seeking the cancellation of the affidavit of
adverse claim and the notice of lis pendens annotated on TCT
No. N-290546; and (2) the arinotation of the decision dated
May 16, 2008 rendered in Civil Case No. Q-07-59598 by the
RTC, Branch 95, in Quezon City, granting the complainants'
Motion to Withdraw Complaint;[9] and that a copy of the letter-
request dated June 30, 2008 addressed to Atty. Quilala,
Registrar of Deeds of Quezon City, disclosed that it was
defendant Ramon Ricafort who had signed the letter.
 
Feeling aggrieved by their discovery, the complainants filed an
appeal en consulta with the Land Registration Authority (LRA),
docketed as Consulta No. 4707, assailing the unlawful
cancellation of their notice of adverse claim and their notice of
lis pendens under primary entries PE-2742 and PE-3828-9,
respectively. The LRA set Consulta No. 4707 for hearing on
March 30, 2009, and directed the parties to submit their
Page 224 of 304
respective memoranda and/or supporting documents on or
before such scheduled hearing.[10] However, the records do not
disclose whether Consulta No. 4707 was already resolved, or
remained pending at the LRA.
 
Unable to receive any response or assistance from Atty.
Victorio, Jr. despite their having paid him for his professional
services, the complainants felt that said counsel had
abandoned their case. They submitted that the cancellation of
their notice of adverse claim and their notice of lis pendens
without a court order specifically allowing such cancellation
resulted from the connivance and conspiracy between Atty.
Victorio, Jr. and Atty. Tolentino, Jr., and from the taking
advantage of their positions as officials in the Registry of
Deeds by respondents Atty. Quilala, the Chief Registrar, and
Atty. Cunanan, the acting Registrar and signatory of the new
annotations. Thus, they claimed to be thereby prejudiced.
On July 6, 2009, the Court required the respondents to
comment on the verified complaint.[11]
 
Atty. Victorio, Jr. asserted in his Comment dated August 17,
2009[12] that complainant Robert Torres had been actively
involved in the proceedings in Civil Case No. Q-07-59598,
which included the mediation process; that the complainants,
after having aggressively participated in the drafting of the
amicable settlement, could not now claim that they had been
deceived into entering the agreement in the same way that
they could not feign ignorance of the conditions contained
therein; that he did not commit any abandonment as alleged,
but had performed in good faith his duties as the counsel for
the complainants in Civil Case No. Q-07-59598; that he should
not be held responsible for their representation in other
proceedings, such as that before the LRA, which required a
separate engagement; and that the only payment he had
received from the complainants were those for his appearance
fees of P1,000.00 for every hearing in the RTC.
In his Comment dated August 24, 2009,[13] Atty. Tolentino, Jr.
refuted the charge of conspiracy, stressing that he was not
acquainted with the other respondents, except Atty. Victorio,
Jr. whom he had met during the hearings in Civil Case No. Q-
07-59598; that although he had notarized the letter-request
dated June 30, 2008 of Ramon Ricafort to the Register of
Deeds, he had no knowledge about how said letter-request
had been disposed of by the Register of Deeds; and that the
present complaint was the second disbarment case filed by the
complainants against him with no other motive except to
harass and intimidate him.
 
Atty. Quilala stated in his Comment dated September 1,
2009[14] that it was Atty. Caluya, Jr., another Deputy Register
of Deeds, who was the actual signing authority of the
annotations that resulted in the cancellation of the affidavit of
adverse claim and the notice of lis pendens on TCT No. N-
290546; that the cancellation of the annotations was
undertaken in the regular course of official duty and in the
exercise of the ministerial duty of the Register of Deeds; that
no irregularity occurred or was performed in the cancellation of
the annotations; and that the Register of Deeds was impleaded
in Civil Case No. Q-07-59598 only as a nominal party, thereby
discounting any involvement in the proceedings in the case.
 
Atty. Cunanan did not file any comment.[15]
As the result of Atty. Quilala's allegation in his Comment in
A.C. No. 8261 that it had been Atty. Caluya, Jr.'s signature that
appeared below the cancelled entries, the complainants filed
another sworn disbarment complaint dated August 26, 2010
alleging that Atty. Caluya, Jr. had forged the signature of Atty.
Cunanan.[16] This disbarment complaint was docketed as A.C.
No. 8725, and was later on consolidated with A.C. No.
8261[17] because the complaints involved the same parties and
rested on similar allegations against the respondents.
 
Atty. Quilala filed his Comment in A.C. No. 8725 to belie the
allegation of forgery and to reiterate the arguments he had
made in A.C. No. 8261.[18] On his part, Atty. Caluya, Jr.
manifested that he adopted Atty. Quilala's Comment.[19]
Ruling
We dismiss the complaints for disbarment for being bereft of
merit.
Well entrenched in this jurisdiction is the rule that a lawyer
may be disciplined for misconduct committed either in his
professional or private capacity. The test is whether his
conduct shows him to be wanting in moral character, honesty,
probity, and good demeanor, or whether his conduct renders
him unworthy to continue as an officer of the Court. [20] Verily,
Canon 7 of the Code of Professional Responsibility mandates
all lawyers to uphold at all times the dignity and integrity of
the Legal Profession. Lawyers are similarly required under Rule
1.01, Canon 1 of the same Code not to engage in any
Page 225 of 304
unlawful, dishonest and immoral or deceitful conduct. Failure
to observe these tenets of the Code of Professional
Responsibility exposes the lawyer to disciplinary sanctions as
provided in Section 27, Rule 138 of the Rules of Court, as
amended, viz.:
Section 27. Disbarment or suspension of attorneys by Supreme
Court, grounds therefor. — A member of the bar may be
disbarred or suspended from his office as attorney by the
Supreme Court for any deceit, malpractice, or other gross
misconduct in such office, grossly immoral conduct, or by
reason of his conviction of a crime involving moral turpitude, or
for any violation of the oath which he is required to take
before the admission to practice, or for a wilful disobedience
appearing as an attorney for a party to a case without
authority so to do. The practice of soliciting cases at law for
the purpose of gain, either personally or through paid agents
or brokers, constitutes malpractice.
The complainants' allegations of the respondents' acts and
omissions are insufficient to establish any censurable conduct
against them.
 
Section 10 of Presidential Decree No. 1529 (Property
Registration Decree) enumerates the general duties of the
Register of Deeds, as follows:
Section 10. General functions of Registers of Deeds. - x x x
It shall be the duty of the Register of Deeds to immediately
register an instrument presented for registration dealing with
real or personal property which complies with all the requisites
for registration. He shall see to it that said instrument bears
the proper documentary science stamps and that the same are
properly canceled. If the instrument is not registrable, he shall
forthwith deny registration thereof and inform the presenter of
such denial in writing, stating the ground or reason therefor,
and advising him of his right to appeal by consulta in
accordance with Section 117 of this Decree. (Emphasis
supplied)
The aforementioned duty of the Register of Deeds is ministerial
in nature.[21] A purely ministerial act or duty is one that an
officer or tribunal performs in a given state of facts, in a
prescribed manner, in obedience to the mandate of a legal
authority, without regard to or the exercise of his own
judgment upon the propriety or impropriety of the act done. If
the law imposes a duty upon a public officer and gives him the
right to decide how or when the duty shall be performed, such
duty is discretionary, not ministerial. The duty is ministerial
only when its discharge requires neither the exercise of official
discretion nor the exercise of judgment.[22]
 
In Gabriel v. Register of Deeds of Rizal,[23] the Court
underscores that registration is a merely ministerial act of the
Register of Deeds, explaining:
xxx [W]hether the document is invalid, frivolous or intended to
harass, is not the duty of a Register of Deeds to decide, but a
court of competent jurisdiction, and that it is his concern to see
whether the documents sought to be registered conform with
the formal and legal requirements for such documents.
In view of the foregoing, we find no abuse of authority or
irregularity committed by Atty. Quilala, Atty. Cunanan, and
Atty. Caluya, Jr. with respect to the cancellation of the notice
of adverse claim and the notice of lis pendensan notated on
TCT No. N-290546. Whether or not the RTC order dated May
16, 2008 or the letter-request dated June 30, 2008 had been
falsified, fraudulent or invalid was not for them to determine
inasmuch as their duty to examine documents presented for
registration was limited only to what appears on the face of
the documents. If, upon their evaluation of the letter-request
and the RTC order, they found the same to be sufficient in law
and t]o be in conformity with existing requirements, it became
obligatory for them to perform their ministerial duty without
unnecessary delay.[24]
Should they be aggrieved by said respondents' performance of
duty, complainants were not bereft of any remedy because
they could challenge the performance of duty by bringing the
matter by way of consulta with the LRA, as provided by
Section 117[25] of Presidential Decree No. 1529. But, as
enunciated in Gabriel v. Register of Deeds of Rizal,[26] it was
ultimately within the province of a court of competent
jurisdiction to resolve issues concerning the validity or
invalidity of a document registered by the Register of Deeds.
 
The complainants charge Atty. Victorio, Jr. and Atty. Tolentino,
Jr. with having conspired with each other to guarantee that the
parties in Civil Case No. Q-59598 would enter into the amicable
settlement, and then to cause the cancellation of the affidavit
of adverse claim and notice of lis pendens annotated on TCT
No. N-290546. The complainants further fault Atty. Victorio, Jr.
with having abandoned their cause since the issuance of the
RTC of its order dated May 16, 2008.
 
Page 226 of 304
The complainants' charges are devoid of substance.
 
Although it is not necessary to prove a formal agreement in
order to establish conspiracy because conspiracy may be
inferred from the circumstances attending the commission of
an act, it is nonetheless essential that conspiracy be
established by clear and convincing evidence.[27] The
complainants failed in this regard. Outside of their bare
assertions that Atty. Victorio, Jr. and Atty. Tolentino, Jr. had
conspired with each other in order to cause the dismissal of
the complaint and then discharge of the annotations, they
presented no evidence to support their allegation of
conspiracy. On the contrary, the records indicated their own
active participation in arriving at the amicable settlement with
the defendants in Civil Case No. Q-07-59598. Hence, they
could not now turn their backs on the amicable settlement that
they had themselves entered into.
 
Even assuming that Atty. Victorio, Jr. and Atty. Tolentino, Jr.
initiated and participated in the settlement of the case, there
was nothing wrong in their doing so. It was actually their
obligation as lawyers to do so, pursuant to Rule 1.04, Canon 1
of the Code of Professional Responsibility, viz.:
RULE 1.04 - A lawyer shall encourage his clients to avoid, end
or settle a controversy if it will admit of a fair settlement.
In fine, the presumption of the validity of the amicable
settlement of the complainants and the defendants in Civil
Case No. Q-07-59598 subsisted.[28]
Anent the complainants' charge of abandonment against Atty.
Victorio, Jr., Rule 18.03 and Rule 18.04, Canon 18 of the Code
of Professional Responsibility are applicable, to wit:
CANON 18 - A lawyer shall serve his client with competence
and diligence.
 
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted
to him, and his negligence in connection therewith shall render
him liable.
 
Rule 18.04 - A lawyer shall keep the client informed of the
status of his case and shall respond within a reasonable time
to the client's request for information.
There is no issue that the complainants engaged the services
of Atty. Victorio, Jr. as their counsel in Civil Case No. Q-07-
59598. Atty. Victorio, Jr. served as such counsel. With Atty.
Victorio, Jr. assistance, the complainants obtained a fair
settlement consisting in receiving half of the proceeds of the
sale of the property in litis, without any portion of the proceeds
accruing to counsel as his legal fees. The complainants did not
competently and persuasively show any unfaithfulness on the
part of Atty. Victorio, Jr. as far as their interest in the litigation
was concerned. Hence, Atty. Victorio, Jr. was not liable for
abandonment.
 
Atty. Victorio, Jr. could not be faulted for the perceived
inattention to any other matters subsequent to the termination
of Civil Case No. Q-07-59598. Unless otherwise expressly
stipulated between them at any time during the engagement,
the complainants had no right to assume that Atty. Victorio,
Jr.'s legal representation was indefinite as to extend to his
representation of them in the LRA. The Law Profession did not
burden its members with the responsibility of indefinite service
to the clients; hence, the rendition of professional services
depends on the agreement between the attorney and the
client. Atty. Victorio, Jr.'s alleged failure to respond to the
complainants' calls or visits, or to provide them with his
whereabouts to enable them to have access to him despite the
termination of his engagement in Civil Case No. Q-07-59598
did not equate to abandonment without the credible showing
that he continued to come under the professional obligation
towards them after the termination of Civil Case No. Q-07-
59598.
WHEREFORE, the Court DISMISSES the baseless
disbarment complaints against Atty. Federico S. Tolentino, Jr.,
Atty. Renato G. Cunanan, Atty. Daniel F. Victorio, Jr., Atty.
Elbert T. Quilala and Atty. Constante P. Caluya, Jr.
SO ORDERED.
People vs Bayotas
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
ROGELIO BAYOTAS Y CORDOVA, accused-appellant.
ROMERO, J.:
In Criminal Case No. C-3217 filed before Branch 16, RTC Roxas
City, Rogelio Bayotas y Cordova was charged with Rape and
eventually convicted thereof on June 19, 1991 in a decision
penned by Judge Manuel E. Autajay. Pending appeal of his
conviction, Bayotas died on February 4, 1992 at the National
Page 227 of 304
Bilibid Hospital due to cardio respiratory arrest secondary to
hepatic encephalopathy secondary to hipato carcinoma gastric
malingering. Consequently, the Supreme Court in its Resolution
of May 20, 1992 dismissed the criminal aspect of the appeal.
However, it required the Solicitor General to file its comment
with regard to Bayotas' civil liability arising from his
commission of the offense charged.
In his comment, the Solicitor General expressed his view that
the death of accused-appellant did not extinguish his civil
liability as a result of his commission of the offense charged.
The Solicitor General, relying on the case of People v.
Sendaydiego 1 insists that the appeal should still be resolved
for the purpose of reviewing his conviction by the lower court
on which the civil liability is based.
Counsel for the accused-appellant, on the other hand, opposed
the view of the Solicitor General arguing that the death of the
accused while judgment of conviction is pending appeal
extinguishes both his criminal and civil penalties. In support of
his position, said counsel invoked the ruling of the Court of
Appeals in People v. Castillo and Ocfemia 2 which held that the
civil obligation in a criminal case takes root in the criminal
liability and, therefore, civil liability is extinguished if accused
should die before final judgment is rendered.
We are thus confronted with a single issue: Does death of the
accused pending appeal of his conviction extinguish his civil
liability?
In the aforementioned case of People v. Castillo, this issue was
settled in the affirmative. This same issue posed therein was
phrased thus: Does the death of Alfredo Castillo affect both his
criminal responsibility and his civil liability as a consequence of
the alleged crime?
It resolved this issue thru the following disquisition:
"Article 89 of the Revised Penal Code is the controlling statute.
It reads, in part:
'ART. 89. How criminal liability is totally extinguished. ----
Criminal liability is totally extinguished:
1. By the death of the convict, as to the personal penalties;
and as to the pecuniary penalties liability therefor is
extinguished only when the death of the offender occurs
before final judgment;
With reference to Castillo's criminal liability, there is no
question. The law is plain. Statutory construction is
unnecessary. Said liability is extinguished.
The civil liability, however, poses a problem. Such liability is
extinguished only when the death of the offender occurs
before final judgment. Saddled upon us is the task of
ascertaining the legal import of the term 'final judgment.' Is it
final judgment as contradistinguished from an interlocutory
order? Or, is it a judgment which is final and executory?
We go to the genesis of the law. The legal precept contained
in Article 89 of the Revised Penal Code heretofore transcribed
is lifted from Article 132 of the Spanish El Codigo Penal de
1870 which, in part, recites:
'La responsabilidad penal se extingue.
1. Por la muerte del reo en cuanto a las penas personales
siempre, y respecto a las pecuniarias, solo cuando a su
fallecimiento no hubiere recaido sentencia firme.'
xxx xxx xxx
The code of 1870 . . . it will be observed employs the term
'sentencia firme.' What is 'sentencia firme' under the old
statute?
XXVIII Enciclopedia Juridica Española, p. 473, furnishes the
ready answer: It says:
'SENTENCIA FIRME. La sentencia que adquiere la fuerza de las
definitivas por no haberse utilizado por las partes litigates
recurso alguno contra ella dentro de los terminos y plazos
legalles concedidos al efecto.'
'Sentencia firme' really should be understood as one which is
definite. Because, it is only when judgment is such that, as
Medina y Maranon puts it, the crime is confirmed ---- 'en
condena determinada;' or, in the words of Groizard, the guilt of
the accused becomes ---- 'una verdad legal.' Prior thereto,
should the accused die, according to Viada, 'no hay
legalmente, en tal caso, ni reo, ni delito ni responsibilidad
criminal de ninguna clase.' And, as Judge Kapunan well
explained, when a defendant dies before judgment becomes
executory, 'there cannot be any determination by final
judgment whether or not the felony upon which the civil action
might arise exists,' for the simple reason that `there is no
party defendant.' (I Kapunan, Revised Penal Code, Annotated,
p. 421. Senator Francisco holds the same view. Francisco,
Revised Penal Code, Book One, 2nd ed., pp. 859-860).
The legal import of the term 'final judgment' is similarly
reflected in the Revised Penal Code. Articles 72 and 78 of that
legal body mention the term 'final judgment' in the sense that
it is already enforceable. This also brings to mind Section 7,
Rule 116 of the Rules of Court which states that a judgment in
a criminal case becomes final 'after the lapse of the period for
perfecting an appeal or when the sentence has been partially
or totally satisfied or served, or the defendant has expressly
waived in writing his right to appeal.'
Page 228 of 304

By fair intendment, the legal precepts and opinions here
collected funnel down to one positive conclusion: The term
final judgment employed in the Revised Penal Code means
judgment beyond recall. Really, as long as a judgment has not
become executory, it cannot be truthfully said that defendant
is definitely guilty of the felony charged against him.
Not that the meaning thus given to final judgment is without
reason. For where, as in this case, the right to institute a
separate civil action is not reserved, the decision to be
rendered must, of necessity, cover 'both the criminal and the
civil aspects of the case.' People vs. Yusico (November 9,
1942), 2 O.G., No. 100, p. 964. See also: People vs. Moll, 68
Phil., 626, 634; Francisco, Criminal Procedure , 1958 ed., Vol.
I, pp. 234, 236. Correctly, Judge Kapunan observed that as
'the civil action is based solely on the felony committed and of
which the offender might be found guilty, the death of the
offender extinguishes the civil liability.' I Kapunan, Revised
Penal Code, Annotated, supra.
Here is the situation obtaining in the present case: Castillo's
criminal liability is out. His civil liability is sought to be enforced
by reason of that criminal liability. But then, if we dismiss, as
we must, the criminal action and let the civil aspect remain, we
will be faced with the anomalous situation whereby we will be
called upon to clamp civil liability in a case where the source
thereof ---- criminal liability ---- does not exist. And, as was
well stated in Bautista, et al. vs. Estrella, et al., CA-G.R. No.
19226-R, September 1, 1958, 'no party can be found and held
criminally liable in a civil suit,' which solely would remain if we
are to divorce it from the criminal proceeding."
This ruling of the Court of Appeals in the Castillo case 3 was
adopted by the Supreme Court in the cases of People of the
Philippines v. Bonifacio Alison, et al., 4 People of the
Philippines v. Jaime Jose, et al. 5 and People of the Philippines
v. Satorre 6 by dismissing the appeal in view of the death of
the accused pending appeal of said cases.
As held by then Supreme Court Justice Fernando in the Alison
case:
"The death of accused-appellant Bonifacio Alison having been
established, and considering that there is as yet no final
judgment in view of the pendency of the appeal, the criminal
and civil liability of the said accused-appellant Alison was
extinguished by his death (Art. 89, Revised Penal Code; Reyes'
Criminal Law, 1971 Rev. Ed., p. 717, citing People v. Castillo
and Ofemia C.A., 56 O.G. 4045); consequently, the case
against him should be dismissed."
On the other hand, this Court in the subsequent cases of
Buenaventura Belamala v. Marcelino Polinar 7 and Lamberto
Torrijos v. The Honorable Court of Appeals 8 ruled differently.
In the former, the issue decided by this court was: Whether
the civil liability of one accused of physical injuries who died
before final judgment is extinguished by his demise to the
extent of barring any claim therefor against his estate. It was
the contention of the administrator-appellant therein that the
death of the accused prior to the final judgment extinguished
all criminal and civil liabilities resulting from the offense, in
view of Article 89, paragraph 1 of the Revised Penal Code.
However, this court ruled therein:
"We see no merit in the plea that the civil liability has been
extinguished, in view of the provisions of the Civil Code of the
Philippines of 1950 (Rep. Act No. 386) that became operative
eighteen years after the revised Penal Code. As pointed out by
the Court below, Article 33 of the Civil Code establishes a civil
action for damages on account of physical injuries, entirely
separate and distinct from the criminal action.
'ART. 33. In cases of defamation, fraud, and physical injuries,
a civil action for damages, entirely separate and distinct from
the criminal action, may be brought by the injured party. Such
civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of
evidence.'
Assuming that for lack of express reservation, Belamala's civil
action for damages was to be considered instituted together
with the criminal action still, since both proceedings were
terminated without final adjudication, the civil action of the
offended party under Article 33 may yet be enforced
separately."
In Torrijos, the Supreme Court held that:
"xxx xxx xxx
It should be stressed that the extinction of civil liability follows
the extinction of the criminal liability under Article 89, only
when the civil liability arises from the criminal act as its only
basis. Stated differently, where the civil liability does not exist
independently of the criminal responsibility, the extinction of
the latter by death, ipso facto extinguishes the former,
provided, of course, that death supervenes before final
judgment. The said principle does not apply in instant case
wherein the civil liability springs neither solely nor originally
from the crime itself but from a civil contract of purchase and
sale. (Emphasis ours)
xxx xxx xxx"
In the above case, the court was convinced that the civil
Page 229 of 304
liability of the accused who was charged with estafa could
likewise trace its genesis to Articles 19, 20 and 21 of the Civil
Code since said accused had swindled the first and second
vendees of the property subject matter of the contract of sale.
It therefore concluded: "Consequently, while the death of the
accused herein extinguished his criminal liability including fine,
his civil liability based on the laws of human relations remains."
Thus it allowed the appeal to proceed with respect to the civil
liability of the accused, notwithstanding the extinction of his
criminal liability due to his death pending appeal of his
conviction.
To further justify its decision to allow the civil liability to
survive, the court relied on the following ratiocination: Since
Section 21, Rule 3 of the Rules of Court 9 requires the
dismissal of all money claims against the defendant whose
death occurred prior to the final judgment of the Court of First
Instance (CFI), then it can be inferred that actions for recovery
of money may continue to be heard on appeal, when the death
of the defendant supervenes after the CFI had rendered its
judgment. In such case, explained this tribunal, "the name of
the offended party shall be included in the title of the case as
plaintiff-appellee and the legal representative or the heirs of
the deceased-accused should be substituted as defendants-
appellants."
It is, thus, evident that as jurisprudence evolved from Castillo
to Torrijos, the rule established was that the survival of the
civil liability depends on whether the same can be predicated
on sources of obligations other than delict. Stated differently,
the claim for civil liability is also extinguished together with the
criminal action if it were solely based thereon, i.e., civil liability
ex delicto.
However, the Supreme Court in People v. Sendaydiego, et al.
10 departed from this long-established principle of law. In this
case, accused Sendaydiego was charged with and convicted by
the lower court of malversation thru falsification of public
documents. Sendaydiego's death supervened during the
pendency of the appeal of his conviction.
This court in an unprecedented move resolved to dismiss
Sendaydiego's appeal but only to the extent of his criminal
liability. His civil liability was allowed to survive although it was
clear that such claim thereon was exclusively dependent on the
criminal action already extinguished. The legal import of such
decision was for the court to continue exercising appellate
jurisdiction over the entire appeal, passing upon the
correctness of Sendaydiego's conviction despite dismissal of
the criminal action, for the purpose of determining if he is
civilly liable. In doing so, this Court issued a Resolution of July
8, 1977 stating thus:
"The claim of complainant Province of Pangasinan for the civil
liability survived Sendaydiego because his death occurred after
final judgment was rendered by the Court of First Instance of
Pangasinan, which convicted him of three complex crimes of
malversation through falsification and ordered him to
indemnify the Province in the total sum of P61,048.23 (should
be P57,048.23).
The civil action for the civil liability is deemed impliedly
instituted with the criminal action in the absence of express
waiver or its reservation in a separate action (Sec. 1, Rule 111
of the Rules of Court). The civil action for the civil liability is
separate and distinct from the criminal action (People and
Manuel vs. Coloma, 105 Phil. 1287; Roa vs. De la Cruz, 107
Phil. 8).
When the action is for the recovery of money and the
defendant dies before final judgment in the Court of First
Instance, it shall be dismissed to be prosecuted in the manner
especially provided in Rule 87 of the Rules of Court (Sec. 21,
Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money
judgment had been rendered against him by the Court of First
Instance, the action survives him. It may be continued on
appeal (Torrijos vs. Court of Appeals, L-40336, October 24,
1975; 67 SCRA 394).
The accountable public officer may still be civilly liable for the
funds improperly disbursed although he has no criminal liability
(U.S. vs. Elvina, 24 Phil. 230; Philippine National Bank vs.
Tugab, 66 Phil. 583).
In view of the foregoing, notwithstanding the dismissal of the
appeal of the deceased Sendaydiego insofar as his criminal
liability is concerned, the Court Resolved to continue exercising
appellate jurisdiction over his possible civil liability for the
money claims of the Province of Pangasinan arising from the
alleged criminal acts complained of, as if no criminal case had
been instituted against him, thus making applicable, in
determining the civil liability, Article 30 of the Civil Code . . .
and, for that purpose, his counsel is directed to inform this
Court within ten (10) days of the names and addresses of the
decedent's heirs or whether or not his estate is under
administration and has a duly appointed judicial administrator.
Said heirs or administrator will be substituted for the deceased
insofar as the civil action for the civil liability is concerned
(Secs. 16 and 17, Rule 3, Rules of Court)."
Succeeding cases 11 raising the identical issue have
maintained adherence to our ruling in Sendaydiego; in other
words, they were a reaffirmance of our abandonment of the
settled rule that a civil liability solely anchored on the criminal
(civil liability ex delicto) is extinguished upon dismissal of the
entire appeal due to the demise of the accused.
Page 230 of 304
But was it judicious to have abandoned this old ruling? A re-
examination of our decision in Sendaydiego impels us to revert
to the old ruling.
To restate our resolution of July 8, 1977 in Sendaydiego: The
resolution of the civil action impliedly instituted in the criminal
action can proceed irrespective of the latter's extinction due to
death of the accused pending appeal of his conviction,
pursuant to Article 30 of the Civil Code and Section 21, Rule 3
of the Revised Rules of Court.
Article 30 of the Civil Code provides:
"When a separate civil action is brought to demand civil liability
arising from a criminal offense, and no criminal proceedings
are instituted during the pendency of the civil case, a
preponderance of evidence shall likewise be sufficient to prove
the act complained of."
Clearly, the text of Article 30 could not possibly lend support to
the ruling in Sendaydiego. Nowhere in its text is there a grant
of authority to continue exercising appellate jurisdiction over
the accused's civil liability ex delicto when his death
supervenes during appeal. What Article 30 recognizes is an
alternative and separate civil action which may be brought to
demand civil liability arising from a criminal offense
independently of any criminal action. In the event that no
criminal proceedings are instituted during the pendency of said
civil case, the quantum of evidence needed to prove the
criminal act will have to be that which is compatible with civil
liability and that is, preponderance of evidence and not proof
of guilt beyond reasonable doubt. Citing or invoking Article 30
to justify the survival of the civil action despite extinction of the
criminal would in effect merely beg the question of whether
civil liability ex delicto survives upon extinction of the criminal
action due to death of the accused during appeal of his
conviction. This is because whether asserted in the criminal
action or in a separate civil action, civil liability ex delicto is
extinguished by the death of the accused while his conviction
is on appeal. Article 89 of the Revised Penal Code is clear on
this matter:
"Art. 89. How criminal liability is totally extinguished. ----
Criminal liability is totally extinguished:
1. By the death of the convict, as to the personal penalties;
and as to pecuniary penalties, liability therefor is extinguished
only when the death of the offender occurs before final
judgment;
xxx xxx xxx"
However, the ruling in Sendaydiego deviated from the
expressed intent of Article 89. It allowed claims for civil liability
ex delicto to survive by ipso facto treating the civil action
impliedly instituted with the criminal, as one filed under Article
30, as though no criminal proceedings had been filed but
merely a separate civil action. This had the effect of converting
such claims from one which is dependent on the outcome of
the criminal action to an entirely new and separate one, the
prosecution of which does not even necessitate the filing of
criminal proceedings. 12 One would be hard put to pinpoint
the statutory authority for such a transformation. It is to be
borne in mind that in recovering civil liability ex delicto, the
same has perforce to be determined in the criminal action,
rooted as it is in the court's pronouncement of the guilt or
innocence of the accused. This is but to render fealty to the
intendment of Article 100 of the Revised Penal Code which
provides that "every person criminally liable for a felony is also
civilly liable." In such cases, extinction of the criminal action
due to death of the accused pending appeal inevitably signifies
the concomitant extinction of the civil liability. Mors Omnia
Solvi. Death dissolves all things.
In sum, in pursuing recovery of civil liability arising from crime,
the final determination of the criminal liability is a condition
precedent to the prosecution of the civil action, such that when
the criminal action is extinguished by the demise of accused-
appellant pending appeal thereof, said civil action cannot
survive. The claim for civil liability springs out of and is
dependent upon facts which, if true, would constitute a crime.
Such civil liability is an inevitable consequence of the criminal
liability and is to be declared and enforced in the criminal
proceeding. This is to be distinguished from that which is
contemplated under Article 30 of the Civil Code which refers to
the institution of a separate civil action that does not draw its
life from a criminal proceeding. The Sendaydiego resolution of
July 8, 1977, however, failed to take note of this fundamental
distinction when it allowed the survival of the civil action for
the recovery of civil liability ex delicto by treating the same as
a separate civil action referred to under Article 30. Surely, it
will take more than just a summary judicial pronouncement to
authorize the conversion of said civil action to an independent
one such as that contemplated under Article 30.
Ironically however, the main decision in Sendaydiego did not
apply Article 30, the resolution of July 8, 1977 notwithstanding.
Thus, it was held in the main decision:
"Sendaydiego's appeal will be resolved only for the purpose of
showing his criminal liability which is the basis of the civil
liability for which his estate would be liable." 13
In other words, the Court, in resolving the issue of his civil
liability, concomitantly made a determination on whether
Sendaydiego, on the basis of evidenced adduced, was indeed
Page 231 of 304
guilty beyond reasonable doubt of committing the offense
charged. Thus, it upheld Sendaydiego's conviction and
pronounced the same as the source of his civil liability.
Consequently, although Article 30 was not applied in the final
determination of Sendaydiego's civil liability, there was a
reopening of the criminal action already extinguished which
served as basis for Sendaydiego's civil liability. We reiterate:
Upon death of the accused pending appeal of his conviction,
the criminal action is extinguished inasmuch as there is no
longer a defendant to stand as the accused; the civil action
instituted therein for recovery of civil liability ex delicto is ipso
facto extinguished, grounded as it is on the criminal.
Section 21, Rule 3 of the Rules of Court was also invoked to
serve as another basis for the Sendaydiego resolution of July
8, 1977. In citing Sec. 21, Rule 3 of the Rules of Court, the
Court made in the inference that civil actions of the type
involved in Sendaydiego consist of money claims, the recovery
of which may be continued on appeal if defendant dies
pending appeal of his conviction by holding his estate liable
therefor. Hence, the Court's conclusion:
"'When the action is for the recovery of money' 'and the
defendant dies before final judgment in the court of First
Instance, it shall be dismissed to be prosecuted in the manner
especially provided' in Rule 87 of the Rules of Court (Sec. 21,
Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money
judgment had been rendered against him by the Court of First
Instance, the action survives him. It may be continued on
appeal."
Sadly, reliance on this provision of law is misplaced. From the
standpoint of procedural law, this course taken in Sendaydiego
cannot be sanctioned. As correctly observed by Justice
Regalado:
"xxx xxx xxx
I do not, however, agree with the justification advanced in
both Torrijos and Sendaydiego which, relying on the provisions
of Section 21, Rule 3 of the Rules of Court, drew the strained
implication therefrom that where the civil liability instituted
together with the criminal liabilities had already passed beyond
the judgment of the then Court of First Instance (now the
Regional Trial Court), the Court of Appeals can continue to
exercise appellate jurisdiction thereover despite the
extinguishment of the component criminal liability of the
deceased. This pronouncement, which has been followed in
the Court's judgments subsequent and consonant to Torrijos
and Sendaydiego, should be set aside and abandoned as being
clearly erroneous and unjustifiable.
Said Section 21 of Rule 3 is a rule of civil procedure in ordinary
civil actions. There is neither authority nor justification for its
application in criminal procedure to civil actions. Nor is there
any authority in law for the summary conversion from the
latter category of an ordinary civil action upon the death of the
offender. . . ."
Moreover, the civil action impliedly instituted in a criminal
proceeding for recovery of civil liability ex delicto can hardly be
categorized as an ordinary money claim such as that referred
to in Sec. 21, Rule 3 enforceable before the estate of the
deceased accused.
Ordinary money claims referred to in Section 21, Rule 3 must
be viewed in light of the provisions of Section 5, Rule 86
involving claims against the estate, which in Sendaydiego was
held liable for Sendaydiego's civil liability. "What are
contemplated in Section 21 of Rule 3, in relation to Section 5
of Rule 86, 14 are contractual money claims while the claims
involved in civil liability ex delicto may include even the
restitution of personal or real property." 15 Section 5, Rule 86
provides an exclusive enumeration of what claims may be filed
against the estate. These are: funeral expenses, expenses for
the last illness, judgments for money and claim arising from
contracts, expressed or implied. It is clear that money claims
arising from delict do not form part of this exclusive
enumeration. Hence, there could be no legal basis in (1)
treating a civil action ex delicto as an ordinary contractual
money claim referred to in Section 21, Rule 3 of the Rules of
Court and (2) allowing it to survive by filing a claim therefor
before the estate of the deceased accused. Rather, it should
be extinguished upon extinction of the criminal action
engendered by the death of the accused pending finality of his
conviction.
Accordingly, we rule: if the private offended party, upon
extinction of the civil liability ex delicto desires to recover
damages from the same act or omission complained of, he
must subject to Section 1, Rule 111 16 (1985 Rules on Criminal
Procedure as amended) file a separate civil action, this time
predicated not on the felony previously charged but on other
sources of obligation. The source of obligation upon which the
separate action is premised determines against whom the
same shall be enforced.
If the same act or omission complained of also arises from
quasi-delict or may, by provision of law, result in an injury to
person or property (real or personal), the separate civil action
must be filed against the executor or administrator 17 of the
estate of the accused pursuant to Sec. 1, Rule 87 of the Rules
of Court:
"SECTION 1. Actions which may and which may not be brought
Page 232 of 304
against executor or administrator. ---- No action upon a claim
for the recovery of money or debt or interest thereon shall be
commenced against the executor or administrator; but actions
to recover real or personal property, or an interest therein,
from the estate, or to enforce a lien thereon, and actions to
recover damages for an injury to person or property, real or
personal, may be commenced against him."
This is in consonance with our ruling in Belamala 18 where we
held that, in recovering damages for injury to persons thru an
independent civil action based on Article 33 of the Civil Code,
the same must be filed against the executor or administrator of
the estate of deceased accused and not against the estate
under Sec. 5, Rule 86 because this rule explicitly limits the
claim to those for funeral expenses, expenses for the last
sickness of the decedent, judgment for money and claims
arising from contract, express or implied. Contractual money
claims, we stressed, refers only to purely personal obligations
other than those which have their source in delict or tort.
Conversely, if the same act or omission complained of also
arises from contract, the separate civil action must be filed
against the estate of the accused, pursuant to Sec. 5, Rule 86
of the Rules of Court.
From this lengthy disquisition, we summarize our ruling herein:
1. Death of the accused pending appeal of his conviction
extinguishes his criminal liability as well as the civil liability
based solely thereon. As opined by Justice Regalado, in this
regard, "the death of the accused prior to final judgment
terminates his criminal liability and only the civil liability directly
arising from and based solely on the offense committed, i.e.,
civil liability ex delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives
notwithstanding the death of accused, if the same may also be
predicated on a source of obligation other than delict. 19
Article 1157 of the Civil Code enumerates these other sources
of obligation from which the civil liability may arise as a result
of the same act or omission:
a) Law 20
b) Contracts
c) Quasi-contracts
d) . . .
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2
above, an action for recovery therefor may be pursued but
only by way of filing a separate civil action and subject to
Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as
amended. This separate civil action may be enforced either
against the executor/administrator or the estate of the
accused, depending on the source of obligation upon which the
same is based as explained above.
4. Finally, the private offended party need not fear a forfeiture
of his right to file this separate civil action by prescription, in
cases where during the prosecution of the criminal action and
prior to its extinction, the private-offended party instituted
together therewith the civil action. In such case, the statute of
limitations on the civil liability is deemed interrupted during the
pendency of the criminal case, conformably with provisions of
Article 1155 21 of the Civil Code, that should thereby avoid any
apprehension on a possible privation of right by prescription. 22
Applying this set of rules to the case at bench, we hold that
the death of appellant Bayotas extinguished his criminal
liability and the civil liability based solely on the act complained
of, i.e., rape. Consequently, the appeal is hereby dismissed
without qualification.
WHEREFORE, the appeal of the late Rogelio Bayotas
is DISMISSED with costs de oficio.
SO ORDERED.
Daluraya vs Oliva
ANTONIO L. DALURAYA, PETITIONER, VS. MARLA
OLIVA, RESPONDENT.
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari 1 are the
Decision2 dated June 28, 2013 and the Resolution3 dated
November 22, 2013 rendered by the Court of Appeals (CA) in
CA-G.R. SP No. 125113 finding petitioner Antonio L. Daluraya
(Daluraya) civilly liable for the death of Marina Arabit Oliva
(Marina Oliva) despite having been acquitted for Reckless
Imprudence Resulting in Homicide on the ground of
insufficiency of evidence.
The Facts
On January 4, 2006, Daluraya was charged in an
Information4 for Reckless Imprudence Resulting in Homicide in
connection with the death5 of Marina Oliva. Records reveal that
sometime in the afternoon of January 3, 2006, Marina Oliva
was crossing the street when a Nissan Vanette, bearing plate
number UPN-172 and traversing EDSA near the Quezon
Avenue flyover in Quezon City, ran her over.6 While Marina
Oliva was rushed to the hospital to receive medical attention,
Page 233 of 304
she eventually died, prompting her daughter, herein
respondent Marla Oliva (Marla), to file a criminal case for
Reckless Imprudence Resulting in Homicide against Daluraya,
the purported driver of the vehicle.7
 
During the proceedings, the prosecution presented as witness
Shem Serrano (Serrano), an eye-witness to the incident, who
testified that on said date, he saw a woman crossing EDSA
heading towards the island near the flyover and that the latter
was bumped by a Nissan Vanette bearing plate number UPN-
172. The prosecution also offered the testimonies of (a) Marla,
who testified as to the civil damages sustained by her family as
a result of her mother’s death; (b) Dr. Paul Ortiz (Dr. Ortiz),
who presented his findings on the autopsy conducted upon the
body of Marina Oliva; and (c)Police Senior Inspector Lauro
Gomez (PSI Gomez), who conducted the investigation
following the incident and claimed that Marina Olivawas hit by
the vehicle being driven by Daluraya, albeit he did not witness
the incident.8
After the prosecution rested its case, Daluraya filed an Urgent
Motion to Dismiss (demurrer)9 asserting, inter alia, that he was
not positively identified by any of the prosecution witnesses as
the driver of the vehicle that hit the victim, and that there was
no clear and competent evidence of how the incident
transpired.10
The MeTC Ruling
 
Marla moved for reconsideration,14 which the MeTC denied in
an Order15 dated November 4, 2010, clarifying that the grant of
Daluraya’s demurrer had the effect of an acquittal and that
reconsideration of its Order granting Daluraya’s demurrer
would violate the latter’s right against double jeopardy. 16 With
respect to the civil aspect of the case, the MeTC likewise
denied the same, holding that no civil liability can be awarded
absent any evidence proving that Daluraya was the person
responsible for Marina Oliva’s demise.17
 
Aggrieved, Marla appealed18 to the Regional Trial Court of
Quezon City, Branch 76 (RTC), insisting that the MeTC failed to
make any finding as to the civil liability of Daluraya, 19 which
finding was not precluded by the dismissal of the criminal
aspect of the case.
The RTC Ruling
In a Decision20 dated September 8, 2011, the RTC dismissed
the appeal and affirmed the MeTC’s ruling, declaring that “the
act from which the criminal responsibility may spring did not at
all exist.”21
Marla filed a motion for reconsideration 22 which, although filed
beyond the reglementary period, was nonetheless accepted.
However, the RTC found the same without merit and thus,
sustained the factual findings and rulings of the MeTC in its
Order23 dated May 10, 2012.

In an Order11 dated May 24, 2010, the Metropolitan Trial Court  

of Quezon City, Branch 38 (MeTC) granted Daluraya’s
Dissatisfied, Marla elevated the case to the CA via petition for
demurrer and dismissed the case for insufficiency of evidence.
review, maintaining that Daluraya must be held civilly liable.
It found that the testimonies of the prosecution witnesses were
wanting in material details and that they failed to sufficiently
establish that Daluraya committed the crime imputed upon
The CA Ruling
him.12
 
 
In a Decision24 dated June 28, 2013, the CA granted the
Deconstructing the testimonies of the prosecution witnesses
petition and reversed the RTC Decision, ordering Daluraya to
individually, the MeTC found that: (a) Marla merely testified on
pay Marla the amounts of p152,547.00 as actual damages,
the damages sustained by her family but she failed to identify
P50,000.00 as civil indemnity, and P50,000.00 as moral
Daluraya as the driver of the vehicle that hit her mother; (b)
damages.25 In so ruling, the CA held that the MeTC’s Order
Serrano also did not identify Daluraya as the driver of the said
showed that Daluraya’s acquittal was based on the fact that
vehicle; (c) Dr. Ortiz merely testified on the autopsy results;
the prosecution failed to prove his guilt beyond reasonable
and (d) PSI Gomez, while he did investigate the incident,
doubt. As such, Daluraya was not exonerated from civil
likewise declared that he did not witness the same. 13
liability.26
 
 

Page 234 of 304

Moreover, the CA considered the following pieces of evidence
to support its finding that Daluraya must be held civilly liable:
(a) the inadmissible sworn statement executed by Daluraya
where he admitted that he drove the subject vehicle which hit
Marina Oliva; (b) the conclusion derived from Serrano’s
testimony that the woman he saw crossing the street who was
hit by a Nissan Vanette with plate number UPN-172, and the
victim who eventually died, are one and the same; (c) the
Philippine National Police Referral Letter of one Police Chief
Inspector Virgilio Pereda identifying Daluraya as the suspect in
the case of Reckless Imprudence Resulting in Homicide
involving the death of Marina Oliva, and stating that he
brought the victim to the Quezon City General Hospital for
treatment but was declared dead on arrival; and (d) the
subject vehicle was registered in the name of Daluraya’s aunt,
Gloria Zilmar,27 who authorized him to claim the vehicle from
the MeTC.28
Daluraya filed a motion for reconsideration, 29 which the CA
denied in a Resolution30 dated November 22, 2013,hence, this
petition.
The Issue Before the Court
 
The sole issue advanced for the Court’s resolution is whether
or not the CA was correct in finding Daluraya civilly liable for
Marina Oliva’s death despite his acquittal in the criminal case
for Reckless Imprudence Resulting in Homicide on the ground
of insufficiency of evidence.
The Court’s Ruling
The petition is meritorious.
 
Every person criminally liable for a felony is also civilly liable.
The acquittal of an accused of the crime charged, however,
does not necessarily extinguish his civil liability.31 In Manantan
v. CA,32 the Court expounded on the two kinds of acquittal
recognized by our law and their concomitant effects on the civil
liability of the accused, as follows:
Our law recognizes two kinds of acquittal, with different effects
on the civil liability of the accused. First is an acquittal on the
ground that the accused is not the author of the act or
omission complained of. This instance closes the door to civil
liability, for a person who has been found to be not the
perpetrator of any act or omission cannot and can never be
held liable for such act or omission. There being no delict, civil
liability ex delicto is out of the question, and the civil action, if
any, which may be instituted must be based on grounds other
than the delict complained of. This is the situation
contemplated in Rule 111 of the Rules of Court. The second
instance is an acquittal based on reasonable doubt on the guilt
of the accused. In this case, even if the guilt of the accused
has not been satisfactorily established, he is not exempt from
civil liability which may be proved by preponderance of
evidence only.33
 
In Dayap v. Sendiong,34 the Court explained further:
The acquittal of the accused does not automatically preclude a
judgment against him on the civil aspect of the case. The
extinction of the penal action does not carry with it the
extinction of the civil liability where: (a) the acquittal is based
on reasonable doubt as only preponderance of evidence is
required; (b) the court declares that the liability of the accused
is only civil; and (c) the civil liability of the accused does not
arise from or is not based upon the crime of which the accused
is acquitted. However, the civil action based on delict may
be deemed extinguished if there is a finding on the
final judgment in the criminal action that the act or
omission from which the civil liability may arise did not
exist or where the accused did not commit the acts or
omission imputed to him.
 
Thus, if demurrer is granted and the accused is acquitted by
the court, the accused has the right to adduce evidence on the
civil aspect of the case unless the court also declares that
the act or omission from which the civil liability may
arise did not exist. This is because when the accused files a
demurrer to evidence, he has not yet adduced evidence both
on the criminal and civil aspects of the case. The only evidence
on record is the evidence for the prosecution. What the trial
court should do is issue an order or partial judgment granting
the demurrer to evidence and acquitting the accused, and set
the case for continuation of trial for the accused to adduce
evidence on the civil aspect of the case and for the private
complainant to adduce evidence by way of rebuttal.
Thereafter, the court shall render judgment on the civil aspect
of the case.35 (Emphases supplied)
In case of an acquittal, the Rules of Court requires that the
judgment state “whether the evidence of the prosecution
absolutely failed to prove the guilt of the accused or merely
failed to prove his guilt beyond reasonable doubt. In either
case, the judgment shall determine if the act or omission from
which the civil liability might arise did not exist.” 36
Page 235 of 304
 
A punctilious examination of the MeTC’s Order, which the RTC
sustained, will show that Daluraya’s acquittal was based on the
conclusion that the act or omission from which the civil liability
may arise did not exist, given that the prosecution was not
able to establish that he was the author of the crime imputed
against him. Such conclusion is clear and categorical when the
MeTC declared that “the testimonies of the prosecution
witnesses are wanting in material details and they did not
sufficiently establish that the accused precisely committed the
crime charged against him.”37 Furthermore, when Marla sought
reconsideration of the MeTC’s Order acquitting Daluraya, said
court reiterated and firmly clarified that “the prosecution was
not able to establish that the accused was the driver of the
Nissan Vanette which bumped Marina Oliva”38 and that “there
is no competent evidence on hand which proves that the
accused was the person responsible for the death of Marina
Oliva.”39
 
Clearly, therefore, the CA erred in construing the findings of
the MeTC, as affirmed by the RTC, that Daluraya’s acquittal
was anchored on reasonable doubt, which would necessarily
call for a remand of the case to the court a quo for the
reception of Daluraya’s evidence on the civil aspect. Records
disclose that Daluraya’s acquittal was based on the fact that
“the act or omission from which the civil liability may arise did
not exist” in view of the failure of the prosecution to
sufficiently establish that he was the author of the crime
ascribed against him. Consequently, his civil liability should be
deemed as non-existent by the nature of such acquittal.
 
WHEREFORE, the petition is GRANTED. The Decision dated
June 28, 2013 and the Resolution  dated November 22, 2013
of the Court of Appeals in CA-G.R. SP No. 125113 are
hereby REVERSED and SET ASIDE. The Decision dated
September 8, 2011 and the Order dated May 10, 2012 of the
Regional Trial Court of Quezon City, Branch 76
are REINSTATED.
 
SO ORDERED.
People vs Dionaldo
RESOLUTlON
PERLAS-BERNABE, J.:
Before the Court is an appeal assailing the Decision 1 dated
February 15, 2013 of the Court of Appeals (CA) in CA-G.R. CR-
H.C. No. 02888 finding accused-appellants Armando Dionaldo y
Ebron (Armando), Renato Dionaldo y Ebron (Renato), Mariano
Gariguez, Jr. y Ramos (Mariano), and Rodolfo Larido y Ebron
(Rodolfo) guilty beyond reasonable doubt of the crime of
Kidnapping and Serious Illegal Detention.
The Facts
 
At around 8 o'clock in the morning of May 16, 2003,
Roderick Navarro (Roderick) dropped his brother Edwin
Navarro (Edwin) off at the Health Is Wealth Gym in Caloocan
City. Thirty minutes later, he received a text message from
another brother who told him that Edwin had
been kidnapped.2 Records show that three (3) men, later
identified as Armando, Renato, and Mariano, forcibly dragged a
bloodied Edwin down the stairway of the gym and pushed him
inside a dark green Toyota car with plate number UKF
194.3 Upon receiving the message, Roderick immediately
reported the incident to the police. At around 10 o?clock in the
morning of the same day, he received a phone call from
Edwin?s kidnappers who threatened to kill Edwin if he should
report the matter to the police.4
The following day, Roderick received another call from
the kidnappers, who demanded the payment of ransom money
in the amount of ?15,000,000.00. Roderick told them he had
no such money, as he only had ?50,000.00. On May 19, 2003,
after negotiations over the telephone, the kidnappers agreed
to release Edwin in exchange for the amount of ?110,000.00.
Roderick was then instructed to bring the money to
Batangas and wait for their next call.5
At around 7:30 in the evening of the same day, as Roderick
was on his way to Batangas to deliver the ransom money, the
kidnappers called and instructed him to open all the windows
of the car he was driving and to turn  on the hazard light when
he reaches the designated place. After a while, Roderick
received another call directing him to exit in Bicutan instead
and proceed to C-5 until he arrives at the Centennial Village.
He was told to park beside the Libingan ng mga Bayani. After
several hours, an orange Mitsubishi car with plate number DEH
498 pulled up in front of his vehicle where four (4) men
alighted. Roderick saw one of the men take a mobile phone
and upon uttering the word “alat,” the men returned to their
car and drove away.6
Meanwhile, a team had been organized to investigate the
kidnapping of Edwin, headed by SPO3 Romeo Caballero (SPO3
Caballero) and PO3 Nestor Acebuche (PO3 Acebuche) of the
Page 236 of 304
Camp Crame Police Anti-Crime Emergency Response (PACER).
During the course of the investigation, Rodolfo, an employee at
the Health Is Wealth Gym, confessed to PO3 Acebuche that he
was part of the plan to kidnap Edwin, as in fact he was the one
who tipped off Mariano, Renato, Armando and a certain
Virgilio7 Varona8 (Virgilio) on the condition that he will be given
a share in the ransom money. Rodolfo gave information on the
whereabouts of his cohorts, leading to their arrest on June 12,
2003. In the early morning of the following day or on June 13,
2003, the PACER team found the dead body of Edwin at Sitio
Pugpugan Laurel, Batangas, which Roderick identified.9
Thus, accused-appellants as well as Virgilio were charged in
an Information10 which reads:
 
That on or about the 16th day of May, 2003 in Caloocan
City, Metro Manila and within the jurisdiction of this Honorable
Court, the above-named accused, conspiring together and
mutually helping one another, being then private persons, did
then and there by force and intimidation willfully, unlawfully
and feloniously with the use of motor vehicle and superior
strength take, carry and deprive EDWIN NAVARRO Y ONA, of
his liberty against his will, for the purpose of extorting
ransom as in fact a demand of ?15,000,000.00 was made as a
condition of the victim?s release and on the occasion thereof,
the death of the victim resulted.
Contrary to law.
 
During arraignment, accused-appellants pleaded not
guilty 11 and interposed the defenses of denial and alibi. Except
for Rodolfo, they individually claimed that on said date and
time, they were in their respective houses when they were
taken by men in police uniforms, then subsequently brought to
Camp Crame, and there allegedly tortured and detained. On
the other hand, Rodolfo, for himself, averred that at around 8
o?clock in the evening of June 12, 2003, while walking on his
way home, he noticed that a van had been following him.
Suddenly, four (4) persons alighted from the vehicle, boarded
him inside, blindfolded him, and eventually tortured him. He
likewise claimed that he was made to sign an extrajudicial
confession, purporting too that while a certain Atty.
Nepomuceno had been summoned to assist him, the latter
failed to do so.12
During trial, the death of the victim, Edwin, was established
through a Certificate of Death13 with Registry No. 2003-050
(subject certificate of death) showing that he died on May 19,
2003 from a gunshot wound on the head.
 
The RTC Ruling
In a Decision14 dated June 13, 2007, the Regional Trial Court
of Caloocan City, Branch 129 (RTC), in Crim. Case No. C-
68329, convicted accused-appellants of the crime of
Kidnapping and Serious Illegal Detention, sentencing each of
them to suffer the penalty of reclusion perpetua.
It gave credence to the positive and straightforward
testimonies of the prosecution witnesses which clearly
established that it was the accusedappellants who forcibly
dragged a bloodied Edwin into a car and, consequently,
deprived him of his liberty. 15 In light thereof, it
rejected accused-appellants? respective alibis and claims of
torture, which were not substantiated. It also held that the
crime of Kidnapping had been committed for the purpose of
extorting ransom, which is punishable by death. However, in
view of the suspended imposition of the death penalty
pursuant to Republic Act No. (RA) 9346,16 only the penalty of
reclusion perpetua was imposed.17 Further, the RTC found
that conspiracy attended the commission of the crime, as the
accused-appellants? individual participation was geared toward
a joint purpose and criminal design.18
Notably, while the RTC found that the testimonies of the
prosecution witnesses prove that the victim Edwin was
abducted, deprived of liberty, and eventually killed,19 a fact
which is supported by the subject certificate of death, it did not
consider said death in its judgment.
The CA Ruling
In a Decision20 dated February 15, 2013, the CA affirmed in
toto the RTC?s conviction of accused-appellants, finding that
the prosecution was able to clearly establish all the elements of
the crime of Kidnapping and Serious Illegal Detention, namely:
(a) the offender is a private individual; (b) he kidnaps or
detains another, or in any manner deprives the latter of
his liberty; (c) the act of detention or kidnapping must be
illegal; and (d) in the commission of the offense, any of the
following circumstances is present: (1) the kidnapping or
detention lasts for more than three days; (2) it is committed
simulating public authority; (3) any serious physical injuries
are inflicted upon the person kidnapped or detained or threats
to kill him are made; or (4) the person kidnapped or detained
is a minor, except when the accused is any of the parents,
female or a public officer. 21 It likewise sustained the finding
that the kidnapping was committed for the purpose
of extorting ransom, as sufficiently proven by the testimony of
the brother of the victim. 22 Moreover, the CA affirmed that
Page 237 of 304
conspiracy attended the commission of the crime, as the acts
of accused-appellants emanated from the same purpose or
common design, and they were united in its execution.23
Separately, the CA found that accused-appellants? claims of
torture were never supported, and that Rodolfo voluntarily
signed the extrajudicial confession and was afforded
competent and independent counsel in its execution.24
Aggrieved by their conviction, accused-appellants filed the
instant appeal.
The Issue Before the Court
The sole issue to be resolved by the Court is whether or not
accusedappellants are guilty of the crime of Kidnapping and
Serious Illegal Detention.
The Court’s Ruling
The appeal is devoid of merit.
Well-settled is the rule that the question of credibility of
witnesses is primarily for the trial court to determine. Its
assessment of the credibility of a witness is entitled to great
weight, and it is conclusive and binding unless shown to be
tainted with arbitrariness or unless, through oversight, some
fact or circumstance of weight and influence has not been
considered. Absent any showing that the trial judge
overlooked, misunderstood, or misapplied some facts or
circumstances of weight which would affect the result of
the case, or that the judge acted arbitrarily, his assessment of
the credibility of witnesses deserves high respect by the
appellate court.25
In this case, the RTC, as affirmed by the CA, gave weight
and credence to the testimonies of the prosecution witnesses,
which they found to be straightforward and consistent.
Through these testimonies, it was clearly established that
accused-appellants, who were all private individuals, took the
victim Edwin and deprived him of his liberty, which acts were
illegal, and for the purpose of extorting ransom.26 Thus, seeing
no semblance of arbitrariness or misapprehension on the part
of the court a quo, the Court finds no compelling reason to
disturb its factual findings on this score.
Anent the finding that conspiracy attended the commission of
the crime, the Court likewise finds the conclusion of the RTC in
this regard, as affirmed by the CA, to be well-taken.
Conspiracy exists when two or more persons come to an
agreement concerning the commission of a felony and decide
to commit it, and when conspiracy is established, the
responsibility of the conspirators is collective, not individual,
rendering all of them equally liable regardless of the extent of
their respective participations.27 In this relation, direct proof is
not essential to establish conspiracy, as it can be presumed
from and proven by the acts of the accused pointing to a
joint purpose, design, concerted action, and community of
interests.28 Hence, as the factual circumstances in this case
clearly show that accused-appellants acted in concert at the
time of the commission of the crime and that their
acts emanated from the same purpose or common design,
showing unity in its execution,29 the CA, affirming the trial
court, correctly ruled that there was conspiracy among them.
The foregoing notwithstanding, the Court is, however,
constrained to modify the ruling of the RTC and the CA, as the
crime the accusedappellants have committed does not, as the
records obviously bear, merely constitute Kidnapping and
Serious Illegal Detention, but that of the special complex crime
of Kidnapping for Ransom with Homicide. This is in view of the
victim?s (i.e., Edwin?s) death, which was (a) specifically
charged in the Information, 30 and (b) clearly established
during the trial of this case. Notably, while this matter was not
among the issues raised before the Court, the same should
nonetheless be considered in accordance with the settled rule
that in a criminal case, an appeal, as in this case, throws
open the entire case wide open for review, and the
appellate court can correct errors, though unassigned,
that may be found in the appealed judgment.31
After the amendment of the Revised Penal Code on December
31, 1993 by RA 7659, Article 267 of the same Code now
provides:
Art. 267. Kidnapping and serious illegal detention. – Any
private individual who shall kidnap or detain another, or in any
other manner deprive him of his liberty, shall suffer the penalty
of reclusion perpetua to death:
 
1. If the kidnapping or detention shall have lasted more than
three days.
2. If it shall have been committed simulating public authority.
3. If any serious physical injuries shall have been inflicted upon
Page 238 of 304
the person kidnapped or detained; or if threats to kill him shall
have been made.
4. If the person kidnapped or detained shall be a minor,
except when the accused is any of the parents, female or a
public officer;
The penalty shall be death where the kidnapping or
detention was committed for the purpose of extorting ransom
from the victim or any other person, even if none of the
circumstances above-mentioned were present in the
commission of the offense.
When the victim is killed or dies as a consequence of
the detention or is raped, or is subjected to torture or
dehumanizing acts, the maximum penalty shall be imposed.
(Emphases supplied)
The Court further elucidated in People v. Mercado:32
In People v. Ramos, the accused was found guilty of two
separate heinous crimes of kidnapping for ransom and murder
committed on July 13, 1994 and sentenced to death. On
appeal, this Court modified the ruling and found the accused
guilty of the “special complex crime” of kidnapping for ransom
with murder under the last paragraph of Article 267, as
amended by Republic Act No. 7659. This Court said:
 
x x x This amendment introduced in our criminal statutes
the concept of „special complex crime? of kidnapping with
murder or homicide. It effectively eliminated the distinction
drawn by the courts between those cases where the killing of
the kidnapped victim was purposely sought by the accused,
and those where the killing of the victim was not
deliberately resorted to but was merely an afterthought.
Consequently, the rule now is: Where the person kidnapped is
killed in the course of the detention, regardless of whether the
killing was purposely sought or was merely an afterthought,
the kidnapping and murder or homicide can no longer
be complexed under Art. 48, nor be treated as separate
crimes, but shall be punished as a special complex crime under
the last paragraph of Art. 267, as amended by RA No.
7659.33 (Emphases supplied; citations omitted)
Thus, further taking into account the fact that the kidnapping
was committed for the purpose of extorting ransom,
accused-appellants’ conviction must be modified from
Kidnapping and Serious Illegal Detention to the special
complex crime of Kidnapping for Ransom
with Homicide, which carries the penalty of death. As earlier
intimated, the enactment of RA 9346 had suspended the
imposition of the death penalty. This means that the accused-
appellants could, as the CA and trial court properly ruled, only
be sentenced to the penalty of reclusion perpetua. To this, the
Court adds that the accused-appellants are not eligible for
parole.34
On a final note, the Court observes that the RTC and the CA
failed to award civil indemnity as well as damages to the family
of the kidnap victim. In People v. Quiachon,35 the Court
explained that even if the death penalty was not to be imposed
on accused-appellants in view of the prohibition in RA 9346,
the award of civil indemnity was nonetheless proper, not
being dependent on the actual imposition of the death penalty
but on the fact that qualifying circumstances warranting the
imposition of the death penalty attended the commission of
the crime.36 In the present case, considering that both the
qualifying circumstances of ransom and the death of the
victim during captivity were duly alleged in the information and
proven during trial, civil indemnity in the amount of ?
100,000.00 must therefore be awarded to the family of the
victim, to conform with prevailing jurisprudence.37
Similarly, the Court finds that the award of moral damages
is warranted in this case. Under Article 2217 of the Civil Code,
moral damages include physical suffering, mental anguish,
fright, serious anxiety, wounded feelings, moral shock and
similar injury, while Article 2219 of the same Code provides
that moral damages may be recovered in cases of
illegal detention. It cannot be denied, in this case, that the
kidnap victim?s family suffered mental anguish, fright, and
serious anxiety over the detention and eventually, the death of
Edwin. As such, and in accordance with
prevailing jurisprudence,38 moral damages in the amount of ?
100,000.00 must perforce be awarded to the family of the
victim.
Finally, exemplary damages must be awarded in this case, in
view of the confluence of the aforesaid qualifying
circumstances and in order to deter others from committing
the same atrocious acts. In accordance with prevailing
jurisprudence,39 therefore, the Court awards exemplary
damages in the amount of ?100,000.00 to the family of the
kidnap victim.
In addition, interest at the rate of six percent ( 6o/o) per
annum shall be imposed on all damages awarded from the
Page 239 of 304
date of finality of judgment until fully paid, pursuant to
prevailing jurisprudence.40
WHEREFORE, the appeal is DISMISSED. The Decision
dated February 15, 2013 of the Court of Appeals in CA-G.R.
CR-H.C. No. 02888 is hereby AFFIRMED with
the MODIFICATION that all the accusedappellants  herein
are equally found GUILTY of the special complex crime of
Kidnapping for Ransom with Homicide, and are sentenced to
each suffer the penalty of reclusion perpetua, without eligibility
for parole, and to pay, jointly and severally, the family of the
kidnap victim Edwin Navarro the following amounts: (1)
PI00,000.00 as civil indemnity; (2) Pl00,000.00 as moral
damages; and (3) Pl00,000.00 as exemplary damages, all with
interest at the rate of six percent ( 6%) per annum ·from the
date of finality of judgment until fully paid.
SO ORDERED.
*2014 decision followed by a short 2015 decision
PERLAS-BERNABE, J.:
 
On July 23, 2014, the Court rendered its Resolution[1] in this
case finding accused-appellants Armando Dionaldoy Ebron,
Renato Dionaldo y Ebron (Renato), Mariano Gariguez,
Jr. y Ramos, and Rodolfo Larido y Ebron (accused-appellants)
guilty beyond reasonable doubt of the special complex crime of
Kidnapping for Ransom with Homicide, the dispositive portion
of which reads:
WHEREFORE, the appeal is DISMISSED. The Decision dated
February 15, 2013 of the Court of Appeals in CA-G.R. CR-H.C.
No. 02888 is hereby AFFIRMED with the MODIFICATION that
all the accused-appellants herein are equally found GUILTY of
the special complex crime of Kidnapping for Ransom with
Homicide, and are sentenced to each suffer the penalty
of reclusion perpetua, without eligibility for parole, and to pay,
jointly and severally, the family of the kidnap victim Edwin
Navarro the following amounts: (1) P100,00.00 as civil
indemnity; (2) P100,000.00 as moral damages; and (3)
P100,000.00 as exemplary damages, all with interest at the
rate of six percent (61Yo) per annum from the date of finality
of judgment until fully paid.
SO ORDERED.
Accused-appellants collectively moved for
reconsideration[2] thereof, which the Court denied with finality
in its Resolution[3] dated September 24, 2014.
On even date, the Court received a letter[4] from the Bureau of
Corrections dated September 16, 2014 informing Us of the
death of one of the accused-appellants in this case, Renato, on
June 1 0, 2014, as evidenced by the Certificate of
Death[5] attached thereto. As Renato's death transpired before
the promulgation of the Court's July 23, 2014 Resolution in this
case, i.e., when his appeal before the Court was still pending
resolution, his criminal liability is totally extinguished in view of
the provisions of Article 89 of the Revised Penal Code which
states:
Art. 89. How criminal liability is totally extinguished. -Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal
penalties; and as to pecuniary penalties, liability
therefor is extinguished only when the death of the
offender occurs before final judgment;
xxxx
In People v. Amistoso,[6] the Court explained that the death of
the accused pending appeal of his conviction extinguishes his
criminal liability, as well as his civil liability  ex delicto.
[7]
 Consequently, Renato's death on June 10, 2014 renders the
Court's July 23, 2014 Resolution irrelevant and ineffectual as to
him, and is therefore set aside. Accordingly, the criminal case
against Renato is dismissed.
WHEREFORE, the Resolutions dated July 23, 2014 and
September 24, 2014 of the Court are hereby SET ASIDEand
Criminal Case No. C-68329 before the Regional Trial Court of
Caloocan City, Branch 129 is DISMISSEDinsofar as accused-
appellant RENATO DIONALDO y EBRON is concerned, in view
of his demise.
SO ORDERED.
Dy vs People
GLORIA S. DY, PETITIONER, VS. PEOPLE OF THE
PHILIPPINES, MANDY COMMODITIES CO., INC.,
REPRESENTED BY ITS PRESIDENT, WILLIAM MANDY,
RESPONDENTS.
JARDELEZA, J.:
Our law states that every person criminally liable for a felony is
also civilly liable. This civil liability ex delicto may be recovered
through a civil action which, under our Rules of Court, is
deemed instituted with the criminal action. While they are
actions mandatorily fused,[1] they are, in truth, separate actions
whose existences are not dependent on each other. Thus, civil
Page 240 of 304
liability ex delicto survives an acquittal in a criminal case for
failure to prove guilt beyond reasonable doubt. However, the
Rules of Court limits this mandatory fusion to a civil action for
the recovery of civil liability ex delicto. It, by no means,
includes a civil liability arising from a different source of
obligation, as in the case of a contract. Where the civil liability
is ex contractu, the court hearing the criminal case has no
authority to award damages.
 
eventually foreclosed the mortgaged property as MCCI
continued to default in its obligation to pay. Mandy claims that
it was only at this point in time that he discovered that not a
check was paid to ICBC.[9]
Thus, on October 7, 2002, MCCI, represented by Mandy, filed
a Compiamt-Affidavit for Estafa[10] before the Office of the City
Prosecutor of Manila. On March 3, 2004, an Information[11] was
filed against petitioner before the Regional Trial Court (RTC)
Manila.

The Case
After a full-blown trial, the RTC Manila rendered a
decision[12] dated November 11, 2005 (RTC Decision) acquitting
petitioner. The RTC Manila found that while petitioner admitted
This is a Petition for Review on Certiorari under Rule 45 of the
that she received the checks, the prosecution failed to
Rules of Court. Petitioner Gloria S. Dy (petitioner) seeks the
establish that she was under any obligation to deliver them to
reversal of the decision of the Court of Appeals (CA) dated
ICBC in payment of MCCFs loan. The trial court made this
February 25, 2009 (Assailed Decision)[2] ordering her to pay
finding on the strength of Mandy's admission that he gave the
Mandy Commodities Company, Inc. (MCCI) in the amount of
checks to petitioner with the agreement that she would encash
P21,706,281.00.[3]
them. Petitioner would then pay ICBC using her own checks.
  The trial court further made a finding that Mandy and
petitioner entered into a contract of loan.[13] Thus, it held that
The Facts the prosecution failed to establish an important element of the
crime of estafa—misappropriation or conversion. However,
while the RTC Manila acquitted petitioner, it ordered her to pay
Petitioner was the former General Manager of MCCL. In the the amount of the checks. The dispositive portion of the RTC
course of her employment, petitioner assisted MCCI in its Decision states —
business involving several properties. One such business
pertained to the construction of warehouses over a property  
(Numancia Property) that MCCI leased from the Philippine
National Bank (PNB). Sometime in May 1996, in pursuit of WHEREFORE, the prosecution having failed to establish the
MCCI's business, petitioner proposed to William Mandy guilt of the accused beyond reasonable doubt, judgment is
(Mandy), President of MCCI, the purchase of a property owned hereby rendered ACQUITTING the accused of the offense
by Pantranco. As the transaction involved a large amount of charged. With costs de officio.
money, Mandy agreed to obtain a loan from the International
China Bank of Commerce (ICBC). Petitioner represented that The accused is however civilly liable to the complainant for the
she could facilitate the approval of the loan. True enough, amount of P21,706,281.00.
ICBC granted a loan to MCCI in the amount of P20,000,000.00,
evidenced by a promissory note. As security, MCCI also SO ORDERED.[14]
executed a chattel mortgage over the warehouses in the
 
Numancia Property. Mandy entrusted petitioner with the
obligation to manage the payment of the loan. [4]
Petitioner filed an appeal[15] of the civil aspect of the RTC
Decision with the CA. In the Assailed Decision, [16] the CA found
In February 1999, MCCI received a notice of foreclosure over
the appeal without merit. It held that the acquittal of petitioner
the mortgaged property due to its default in paying the loan
does not necessarily absolve her of civil liability. The CA said
obligation.[5] In order to prevent the foreclosure, Mandy
that it is settled that when an accused is acquitted on the basis
instructed petitioner to facilitate the payment of the loan.
of reasonable doubt, courts may still find him or her civilly
MCCI, through Mandy, issued 13 Allied Bank checks and 12
liable if the evidence so warrant. The CA explained that the
Asia Trust Bank checks in varying amounts and in different
evidence on record adequately prove that petitioner received
dates covering the period from May 18, 1999 to April 4, 2000.
[6]
the checks as a loan from MCCI. Thus, preventing the latter
 The total amount of the checks, which were all payable to
from recovering the amount of the checks would constitute
cash, was P21,706,281.00. Mandy delivered the checks to
unjust enrichment. Hence, the Assailed Decision ruled
petitioner. Mandy claims that he delivered the checks with the
instruction that petitioner use the checks to pay the loan.  
[7]
 Petitioner, on the other hand, testified that she encashed
the checks and returned the money to Mandy.[8] ICBC
Page 241 of 304
WHEREFORE, in view of the foregoing, the appeal is DENIED.
The Decision dated November 11, 2005 of the Regional Trial
Court, Manila, Branch 33 in Criminal Case No. 04-224294
which found Gloria Dy civilly liable to William Mandy is
AFFIRMED.
SO ORDERED.[17]
 
The CA also denied petitioner's motion for reconsideration in a
resolution[18] dated August 3, 2009.
Hence, this Petition for Review on Certiorari (Petition).
Petitioner argues that since she was acquitted for failure of the
prosecution to prove all the elements of the crime charged,
there was therefore no crime committed.[19] As there was no
crime, any civil liability ex delicto cannot be awarded.
 
The Issues
The central issue is the propriety of making a finding of civil
liability in a criminal case for estafa when the accused is
acquitted for failure of the prosecution to prove all the
elements of the crime charged.
The Ruling of the Court
We grant the petition.
Civil Liability Arising From Crime
Our laws recognize a bright line distinction between criminal
and civil liabilities. A crime is a liability against the state. It is
prosecuted by and for the state. Acts considered criminal are
penalized by law as a means to protect the society from
dangerous transgressions. As criminal liability involves a
penalty affecting a person's liberty, acts are only treated
criminal when the law clearly says so. On the other hand, civil
liabilities take a less public and more private nature. Civil
liabilities are claimed through civil actions as a means to
enforce or protect a right or prevent or redress a wrong.
[20]
 They do not carry with them the imposition of imprisonment
as a penalty. Instead, civil liabilities are compensated in the
form of damages.
Nevertheless, our jurisdiction recognizes that a crime has a
private civil component. Thus, while an act considered criminal
is a breach of law against the State, our legal system allows for
the recovery of civil damages where there is a private person
injured by a criminal act. It is in recognition of this dual nature
of a criminal act that our Revised Penal Code provides that
every person criminally liable is also civilly liable. [21] This is the
concept of civil liability ex delicto.
This is echoed by the New Civil Code when it recognizes acts
or omissions punished by law as a separate source of
obligation.[22] This is reinforced by Article 30 of the same code
which refers to the filing of a separate civil action to demand
civil liability arising from a criminal offense. [23]
The Revised Penal Code fleshes out this civil liability in Article
104[24] which states that it includes restitution, reparation of
damage caused and indemnification for consequential
damages.
Rules of procedure for criminal
and civil actions involving the
same act or omission
The law and the rules of procedure provide for a precise
mechanism in instituting a civil action pertaining to an act or
omission which is also subject of a criminal case. Our Rules of
Court prescribes a kind of fusion such that, subject to certain
defined qualifications, when a criminal action is instituted, the
civil action for the recovery of the civil liability arising from the
offense is deemed instituted as well.[25]
However, there is an important difference between civil and
criminal proceedings that require a fine distinction as to how
these twin actions shall proceed. These two proceedings
involve two different standards of proof. A criminal action
requires proof of guilt beyond reasonable doubt while a civil
action requires a lesser quantum of proof, that of
preponderance of evidence. This distinction also agrees with
the essential principle in our legal system that while a criminal
liability carries with it a corresponding civil liability, they are
nevertheless separate and distinct. In other words, these two
liabilities may co-exist but their existence is not dependent on
each other.[26]
The Civil Code states that when an accused in a criminal
prosecution is acquitted on the ground that his guilt has not
been proven beyond reasonable doubt, a civil action for
damages for the same act or omission may be filed. In the
latter case, only preponderance of evidence is required. [27] This
is supported by the Rules of Court which provides that the
extinction of the criminal action does not result in the
extinction of the corresponding civil action. [28] The latter may
only be extinguished when there is a "finding in a final
judgment in the criminal action that the act or omission from
which the civil liability may arise did not exist." [29] Consistent
with this, the Rules of Court requires that in judgments of
acquittal the court must state whether "the evidence of the
prosecution absolutely failed to prove the guilt of the accused
Page 242 of 304
or merely failed to prove his guilt beyond reasonable doubt. In  
either case, the judgment shall determine if the act or omission
from which the civil liability might arise did not exist." [30] (b) the court declares that the liability of the accused is only
civil; and
Thus, whether an exoneration from the criminal action should
 
affect the corresponding civil action depends on the varying
kinds of acquittal. In Manantan v. Court of Appeals,[31] we
(c) the civil liability of the accused does not arise from or is not
explained —
based upon the crime of which the accused is acquitted.
However, the civil action based on delict may be deemed
 
extinguished if mere is a finding on the final judgment in the
Our law recognizes two kinds of acquittal, with different effects criminal action that the act or omission from which the civil
on the civil liability of the accused. First is an acquittal on the liability may arise did not exist or where the accused did not
ground that the accused is not the author of the act or commit the acts or omission imputed to him.[34]
omission complained of. This instance closes the door to civil
 
liability, for a person who has been found to be not the
perpetrator of any act or omission cannot and can never be
Hence, a civil action filed for the purpose of enforcing civil
held liable for such act or omission. There being no delict civil
liability ex delicto, even if mandatorily instituted with the
liability ex delicto is out of the question, and the civil action, if
corresponding criminal action, survives an acquittal when it is
any, which may be instituted must be based on grounds other
based on the presence of reasonable doubt. In these
than the delict complained of. This is the situation
instances, while the evidence presented does not establish the
contemplated in Rule 111 of the Rules of Court. The second
fact of the crime with moral certainty, the civil action still
instance is an acquittal based on reasonable doubt on the guilt
prevails for as long as the greater weight of evidence tilts in
of the accused. In this case, even if the guilt of the accused
favor of a finding of liability. This means that while the mind of
has not been satisfactorily established, he is not exempt from
the court cannot rest easy in penalizing the accused for the
civil liability which may be proved by preponderance of
commission of a crime, it nevertheless finds that he or she
evidence only. This is the situation contemplated in Article 29
committed or omitted to perform acts which serve as a
of the Civil Code, where the civil action for damages is "for the
separate source of obligation. There is no sufficient proof that
same act or omission." Although the two actions have different
the act or omission is criminal beyond reasonable doubt, but
purposes, the matters discussed in the civil case are similar to
there is a preponderance of evidence to show that the act or
those discussed in the criminal case. However, the judgment
omission caused injury which demands compensation.
In the criminal proceeding cannot be read in evidence In the
civil action to establish any fact there determined, even though
Civil Liability Ex Delicto in Estafa Cases
both actions involve the same act or omission. The reason for
this rule is that the parties are not the same and secondarily,
Our laws penalize criminal fraud which causes damage capable
different rules of evidence are applicable. Hence,
of pecuniary estimation through estafa under Article 315 of the
notwithstanding herein petitioner's acquittal, the Court of
Revised Penal Code. In general, the elements of estafa are:
Appeals in determining whether Article 29 applied, was not
precluded from looking into the question of petitioner's  
negligence or reckless imprudence.[32]
(1) That the accused defrauded another
 
 
In Dayap v. Sendiong,[33] we further said —
(a) by abuse of confidence, or
 
(b) by means of deceit; and
The acquittal of the accused does not automatically preclude a
judgment against him on the civil aspect of the case. The  
extinction of the penal action does not carry with it the
extinction of the civil liability where: (2) That damage or prejudice capable of pecuniary estimation
is caused to the offended party or third person.
 
 
(a) the acquittal is based on reasonable doubt as only
preponderance of evidence is required; The essence of the crime is the unlawful abuse of confidence
or deceit in order to cause damage. As this Court previously

Page 243 of 304

held, "the element of fraud or bad faith is
indispensable."[35] Our law abhors the act of defrauding
another person by abusing his trust or deceiving him, such
that, it criminalizes this kind of fraud.
Article 315 of the Revised Penal Code identifies the
circumstances which constitute estafa. Article 315, paragraph 1
(b) states that estafa is committed by abuse of confidence —
 
Art. 315. Swindling (estafa)-x x x (b) By misappropriating or
converting, to the prejudice of another, money, goods, or any
other personal property received by the offender in trust or on
commission, or for administration, or under any other
obligation involving the duty to make delivery of or to return
the same, even though such obligation be totally or partially
guaranteed by a bond; or by denying having received such
money, goods, or other property.
 
In this kind of estafa, the fraud which the law considers as
criminal is the act of misappropriation or conversion. When the
element of misappropriation or conversion is missing, there can
be no estafa. In such case, applying the foregoing discussions
on civil liability ex delicto, there can be no civil liability as there
is no act or omission from which any civil liability may be
sourced. However, when an accused is acquitted because a
reasonable doubt exists as to the existence of misappropriation
or conversion, then civil liability may still be awarded. This
means that, while there is evidence to prove fraud, such
evidence does not suffice to convince the court to the point of
moral certainty that the act of fraud amounts to estafa. As the
act was nevertheless proven, albeit without sufficient proof
justifying the imposition of any criminal penalty, civil liability
exists.
In this case, the RTC Manila acquitted petitioner because the
prosecution failed to establish by sufficient evidence the
element of misappropriation or conversion. There was no
adequate evidence to prove that Mandy gave the checks to
petitioner with the instruction that she will use them to pay the
ICBC loan. Citing Mandy's own testimony in open court, the
RTC Manila held that when Mandy delivered the checks to
petitioner, their agreement was that it was a "sort of
loan."[36] In the dispositive portion of the RTC Decision, the
RTC Manila ruled that the prosecution "failed to establish the
guilt of the accused beyond reasonable doubt."[37] It then
proceeded to order petitioner to pay the amount of the loan.
The ruling of the RTC Manila was affirmed by the CA. It said
that "[t]he acquittal of Gloria Dy is anchored on the ground
that her guilt was not proved beyond reasonable doubt - not
because she is not the author of the act or omission
complained of. x x x The trial court found no trickery nor deceit
in obtaining money from the private complainant; instead, it
concluded that the money obtained was undoubtedly a
loan."[38]
Our jurisprudence on this matter diverges.
Earlier cases ordered the dismissal of the civil action for
recovery of civil liability ex delicto whenever there is a finding
that there was no estafa but rather an obligation to pay under
a contract. In People v. Pantig,[39] this Court affirmed the ruling
of the lower court acquitting Pantig, but revoked the portion
sentencing him to pay the offended party the amount of
money alleged to have been obtained through false and
fraudulent representations, thus —
 
The trial court found as a fact that the sum of P1,200, ordered
to be paid in the judgment of acquittal, was received by the
defendant-appellant as loan. This finding is inconsistent with
the existence of the criminal act charged in the
information. The liability of the defendant for the return
of the amount so received arises from a civil contract,
not from a criminal act, and may not be enforced in the
criminal case.
The portion of the judgment appealed from, which orders the
defendant-appellant to pay the sum of Pi ,200 to the offended
party, is hereby revoked, without prejudice to the filing of a
civil action for the recovery of the said amount.[40]
 
This was also the import of the ruling in People v. Singson.
[41]
 In that case, this Court found that "the evidence [was] not
sufficient to establish the existence of fraud or deceit on the
part of the accused. x x x And when there is no proven deceit
or fraud, there is no crime of estafa."[42] While we also said
that the established facts may prove Singson's civil liability
(obligation to pay under a contract of sale), we nevertheless
made no finding of civil liability because "our mind cannot rest
easy on the certainty of guilt"[43] considering the above finding.
The dispositive portion stated that Singson is acquitted
"without prejudice to any civil liability which may be
established in a civil case against her."[44]
However, our jurisprudence on the matter appears to have
changed in later years.
In Eusebio-Calderon v. People,[45] this Court affirmed the
finding of the CA that Calderon "did not employ trickery or
deceit in obtaining money from the private complainants,
instead, it concluded that the money obtained was
undoubtedly loans for which [Calderon] paid interest." [46] Thus,
this Court upheld Calderon's acquittal of estafa, but found her
civilly liable for the principal amount borrowed from the private
Page 244 of 304
complainants.[47]
The ruling was similar in People v. Cuyugan.[48] In that case,
we acquitted Cuyugan of estafa for failure of the prosecution
to prove fraud. We held that the transaction between Cuyugan
and private complainants was a loan to be used by Cuyugan in
her business. Thus, this Court ruled that Cuyugan has the
obligation, which is civil in character, to pay the amount
borrowed.[49]
We hold that the better rule in ascertaining civil liability
in estafa cases is that pronounced in Pantig and Singson. The
rulings in these cases are more in accord with the relevant
provisions of the Civil Code, and the Rules of Court. They are
also logically consistent with this Court's pronouncement
in Manantan.
Under Pantig and Singson, whenever the elements
of estafa are not established, and that the delivery of any
personal property was made pursuant to a contract, any civil
liability arising from the estafa  cannot be awarded in the
criminal case. This is because the civil liability arising from the
contract is not civil liability ex delicto, which arises from the
same act or omission constituting the crime. Civil liability ex
delicto is the liability sought to be recovered in a civil action
deemed instituted with the criminal case.
The situation envisioned in the foregoing cases, as in this case,
is civil liability ex contractu where the civil liability arises from
an entirely different source of obligation. Therefore, it is not
the type of civil action deemed instituted in the criminal case,
and consequently must be filed separately. This is necessarily
so because whenever the court makes a finding that the
elements of estafa do not exist, it effectively says that there is
no crime. There is no act or omission that constitutes criminal
fraud. Civil liability ex delicto cannot be awarded as it cannot
be sourced from something that does not exist.
When the court finds that the source of obligation is in fact, a
contract, as in a contract of loan, it takes a position completely
inconsistent with the presence of estafa. In estafa, a person
parts with his money because of abuse of confidence or deceit.
In a contract, a person willingly binds himself or herself to give
something or to render some service.[50] In estafa, the
accused's failure to account for the property received amounts
to criminal fraud. In a contract, a party's failure to comply with
his obligation is only a contractual breach. Thus, any finding
that the source of obligation is a contract negates estafa. The
finding, in turn, means that there is no civil liability ex delicto.
Thus, the rulings in the foregoing cases are consistent with the
concept of fused civil and criminal actions, and the different
sources of obligations under our laws.
We apply this doctrine to the facts of this case. Petitioner was
acquitted by the RTC Manila because of the absence of the
element of misappropriation or conversion. The RTC Manila, as
affirmed by the CA, found that Mandy delivered the checks to
petitioner pursuant to a loan agreement. Clearly, there is no
crime of estafa. There is no proof of the presence of any act or
omission constituting criminal fraud. Thus, civil liability ex
delicto cannot be awarded because there is no act or omission
punished by law which can serve as the source of obligation.
Any civil liability arising from the loan takes the nature of a civil
liability ex contractu. It does not pertain to the civil action
deemed instituted with the criminal case.
In Manantan, this Court explained the effects of this result on
the civil liability deemed instituted with the criminal case. At
the risk of repetition, Manantan held that when there is no
delict, "civil liability ex delicto is out of the question, and the
civil action, if any, which may be instituted must be based on
grounds other than the delict complained of."[51] In Dy's case,
the civil liability arises out of contract—a different source of
obligation apart from an act or omission punished by law—and
must be claimed in a separate civil action.
Violation of Due Process
We further note that the evidence on record never fully
established the terms of this loan contract. As the trial before
the RTC Manila was focused on proving estafa, the loan
contract was, as a consequence, only tangentially considered.
This provides another compelling reason why the civil liability
arising from the loan should be instituted in a separate civil
case. A civil action for collection of sum of money filed before
the proper court will provide for a better venue where the
terms of the loan and other relevant details may be received.
While this may postpone a warranted recovery of the civil
liability, this Court deems it more important to uphold the
principles underlying the inherent differences in the various
sources of obligations under our law, and the rule that fused
actions only refer to criminal and civil actions involving the
same act or omission. These legal tenets play a central role in
this legal system. A confusion of these principles will ultimately
jeopardize the interests of the parties involved. Actions focused
on proving estafa is not the proper vehicle to thresh out civil
liability arising from a contract.[52] The Due Process Clause of
the Constitution dictates that a civil liability arising from a
contract must be litigated in a separate civil action.
Section 1 of the Bill of Rights states that no person shall be
deprived of property without due process of law. This provision
protects a person's right to both substantive and procedural
due process. Substantive due process looks into the validity of
a law and protects against arbitrariness.[53] Procedural due
process, on the other hand, guarantees procedural fairness.
[54]
 It requires an ascertainment of "what process is due, when
it is due, and the degree of what is due."[55] This aspect of due
process is at the heart of this case.
Page 245 of 304
In general terms, procedural due process means the right to
notice and hearing.[56] More specifically, our Rules of Court
provides for a set of procedures through which a person may
be notified of the claims against him or her as well as methods
through which he or she may be given the adequate
opportunity to be heard.
The Rules of Court requires that any person invoking the
power of the judiciary to protect or enforce a right or prevent
or redress a wrong[57] must file an initiatory pleading which
embodies a cause of action,[58] which is defined as the act or
omission by which a party violates a right of another. [59] The
contents of an initiatory pleading alleging a cause of action will
vary depending on the source of the obligation involved. In the
case of an obligation arising from a contract, as in this case,
the cause of action in an initiatory pleading will involve the
duties of the parties to the contract, and what particular
obligation was breached. On the other hand, when the
obligation arises from an act or omission constituting a crime,
the cause of action must necessarily be different. In such a
case, the initiatory pleading will assert as a cause of action the
act or omission of respondent, and the specific criminal statute
he or she violated. Where the initiatory pleading fails to state a
cause of action, the respondent may file a motion to dismiss
even before trial.[60] These rules embody the fundamental right
to notice under the Due Process Clause of the Constitution.
In a situation where a court (in a fused action for the
enforcement of criminal and civil liability) may validly order an
accused-respondent to pay an obligation arising from a
contract, a person's right to be notified of the complaint, and
the right to have the complaint dismissed if there is no cause
of action, are completely defeated. In this event, the accused-
respondent is completely unaware of the nature of the liability
claimed against him or her at the onset of the case. The
accused-respondent will not have read any complaint stating
the cause of action of an obligation arising from a contract. All
throughout the trial, the accused-respondent is made to
believe that should there be any civil liability awarded against
him or her, this liability is rooted from the act or omission
constituting the crime. The accused-respondent is also
deprived of the remedy of having the complaint dismissed
through a motion to dismiss before trial. In a fused action, the
accused-respondent could not have availed of this remedy
because he or she was not even given an opportunity to
ascertain what cause of action to look for in the initiatory
pleading. In such a case, the accused-respondent is blindsided.
He or she could not even have prepared the appropriate
defenses and evidence to protect his or her interest. This is not
the concept of fair play embodied in the Due Process Clause. It
is a clear violation of a person's right to due process.
The Rules of Court also allows a party to a civil action certain
remedies that enable him or her to effectively present his or
her case. A party may file a cross-claim, a counterclaim or a
third-party complaint.[61] The Rules of Court prohibits these
remedies in a fused civil and criminal case.[62] The Rules of
Court requires that any cross-claim, counterclaim or third-party
complaint must be instituted in a separate civil action.[63] In a
legal regime where a court may order an accused in a fused
action to pay civil liability arising from a contract, the accused-
respondent is completely deprived of the remedy to file a
cross-claim, a counterclaim or a third-party complaint. This—
coupled with an accused-respondent's inability to adequately
prepare his or her defense because of lack of adequate notice
of the claims against him or her—prevents the accused-
respondent from having any right to a meaningful hearing. The
right to be heard under the Due Process Clause requires not
just any kind of an opportunity to be heard. It mandates that a
party to a case must have the chance to be heard in a real and
meaningful sense. It does not require a perfunctory hearing,
but a court proceeding where the party may adequately avail
of the procedural remedies granted to him or her. A court
decision resulting from this falls short of the mandate of the
Due Process Clause.
Indeed, the language of the Constitution is clear. No person
shall be deprived of property without due process of law. Due
Process, in its procedural sense, requires, in essence, the right
to notice and hearing. These rights are further fleshed out in
the Rules of Court. The Rules of Court enforces procedural due
process because, to repeat the words of this Court in Secretary
of Justice v. Lantion, it provides for "what process is due, when
it is due, and the degree of what is due."[64] A court ordering
an accused in a fused action to pay his or her contractual
liability deprives him or her of his or her property without the
right to notice and hearing as expressed in the procedures and
remedies under the Rules of Court. Thus, any court ruling
directing an accused in a fused action to pay civil liability
arising from a contract is one that completely disregards the
Due Process Clause. This ruling must be reversed and the
Constitution upheld.
Conclusion
The lower courts erred when they ordered petitioner to pay her
civil obligation arising from a contract of loan in the same
criminal case where she was acquitted on the ground that
there was no crime. Any contractual obligation she may have
must be litigated in a separate civil action involving the
contract of loan. We clarify that in cases where the accused is
acquitted on the ground that there is no crime, the civil action
deemed instituted with the criminal case cannot prosper
precisely because there is no delict from which any civil
obligation may be sourced. The peculiarity of this case is the
finding that petitioner, in fact, has an obligation arising from a
contract. This civil action arising from the contract is not
necessarily extinguished. It can be instituted in the proper
court through the proper civil action.
Page 246 of 304
We note that while there is no written contract of loan in this
case, there is an oral contract of loan which must be brought
within six years.[65] Under the facts of the case, it appears that
any breach in the obligation to pay the loan may have
happened between 1996 and 1999, or more than six years
since this case has been instituted. This notwithstanding, we
find that the civil action arising from the contract of loan has
not yet prescribed. Article 1150 of the Civil Code states —
Art. 1150. The time for prescription for all kinds of actions,
when there is no special provision which ordains otherwise,
shall be counted from the day they may be brought.
We held in numerous cases that it is the legal possibility of
bringing the action that determines the starting point for the
computation of the period of prescription.[67] We highlight the
unique circumstances surrounding this case. As discussed in
this decision, there has been diverse jurisprudence as to the
propriety of ordering an accused to pay an obligation arising
from a contract in the criminal case where the accused was
acquitted on the ground that there is no crime. Litigants, such
as MCCI, cannot be blamed for relying on prior rulings where
the recovery on a contract of loan in a criminal case
for estafa was allowed. We have found the opportunity to
clarify this matter through this decision. As it is only now that
we delineate the rules governing the fusion of criminal and civil
actions pertaining to estafa, it is only upon the promulgation of
this judgment that litigants have a clear understanding of the
proper recourse in similar cases. We therefore rule that insofar
as MCCI is concerned, the filing of an action, if any (that may
be sourced from the contract of loan), becomes a legal
possibility only upon the finality of this decision which
definitively ruled upon the principles on fused actions.
We add, however, that upon finality of this decision,
prospective litigants should become more circumspect in
ascertaining their course of action in similar cases. Whenever a
litigant erroneously pursues an estafa case, and the accused is
subsequently acquitted because the obligation arose out of a
contract, the prescriptive period will still be counted from the
time the cause of action arose. In this eventuality, it is
probable that the action has already prescribed by the time the
criminal case shall have been completed. This possibility
demands that prospective litigants do not haphazardly pursue
the filing of an estafa case in order to force an obligor to pay
his or her obligation with the threat of criminal conviction. It
compels litigants to be honest and fair in their judgment as to
the proper action to be filed. This ruling should deter litigants
from turning to criminal courts as their collection agents, and
should provide a disincentive to the practice of filing of criminal
cases based on unfounded grounds in order to provide a
litigant a bargaining chip in enforcing contracts.
WHEREFORE, in view of the foregoing, the Petition
is GRANTED. The Decision of the CA dated February 25, 2009
is REVERSED. This is however, without prejudice to any civil
action which may be filed to claim civil liability arising from the
contract.
SO ORDERED.
People vs Calomia
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE,
VS. RUBEN CALOMIA, ACCUSED-APPELLANT.
LEONARDO-DE CASTRO, J.:
In Criminal Case Nos. 1317 and 1318, accused-appellant
Ruben Calomia was charged before the Regional Trial Court
(RTC) of Loay, Bohol, Branch 50, with two counts of qualified
rape of his minor daughter, AAA,[1] which he allegedly
committed sometime in August 2007 and April 2008.[2]
After trial on the merits, the RTC promulgated its Decision on
March 11, 2015 finding accused-appellant guilty beyond
reasonable doubt of both counts of qualified rape and
sentencing him as follows:
 
WHEREFORE, in the light of the foregoing evidence, the court
finds the accused guilty beyond reasonable doubt of (Qualified)
Incestuous Rape in Crim. Case No. 1317 and Statutory
Incestuous Rape in Crim. Case No. 1318.
Accordingly, in both cases, the court has no recourse but to
impose on the accused the penalties mandated by law.
Although the crimes of Qualified Incestuous Rape and
Statutory Incestuous Rape would have been punishable by
death, in view of the passage of R.A. [No.] 9346 (which
prohibits the imposition of the death penalty), the penalty
iinposable for each of the two offenses is only reclusion
perpetua.
Because of the qualifying or aggravating circumstance of
relationship, the victim is entitled to civil indemnity in each
case of P75,000 ex delicto, P75,000 in moral damages (People
v. Lauga, G.R. No. 186228, Mar. 15, 2010), and P30,000 in
exemplary damages (ibid.).[3]
 
Accused-appellant's appeal before the Court of Appeals was
docketed as CA-G.R. CEB-CR-HC No. 02040. In its Decision
dated August 26, 2016, the appellate court upheld accused-
Page 247 of 304
appellant's conviction, but modified the award of damages to
AAA. The Court of Appeals decreed:
 
WHEREFORE, in view of the foregoing, We find no error
committed by the Trial Court and, hence, DENY the appeal.
The Decision dated 11 March 2015 rendered by the Regional
Trial Court of Loay, Bohol 7th Judicial Region, Branch 50, in
Criminal Case Nos. 1317 and 1318,
is AFFIRMED with MODIFICATION.
As modified, [accused-]appellant Ruben Calomia is ordered to
pay the victim AAA the amounts of P100,000.00 as civil
indemnity, P100,000.00, as moral damages, and P100,000.00
as exemplary damages. Interest is imposed on all damages
awarded at the rate of 6% per annum from date of finality of
this Decision until fully paid.[4]
 
On September 21, 2016, accused-appellant filed his Notice of
Appeal expressing his intention to appeal the foregoing
Decision before this Court.
The Court issued a Resolution dated April 25, 2017 requiring
the parties to file their respective supplemental briefs, if they
so desired, within 30 days from notice; ordering the Provincial
Jail Warden, Bohol Detention and Rehabilitation Center,
Tagbilaran City, to transfer accused-appellant to the Bureau of
Corrections, Muntinlupa City and to submit a report of such
transfer; and ordering the Director General of the Bureau of
Corrections to confirm the confinement of accused-appellant to
said prison and submit a report thereon.
However, the Court received on September 4, 2017 a letter
dated August 2, 2017 from Jail Chief Inspector (J/CINSP)
Felipe A. Montejo (Montejo), DDM, Bohol District Jail Warden,
stating thus:
 
Please be informed that the said appellant [has] died while in
the confinement of Bohol District Jail last Sept. 29, 2015 due to
Asphyxia due to Strangulation, Self Inflicted, Hanging and
declared dead by Dr. Calvelo, Medical Officer III, City Health
Office, Tagbilaran City, Bohol per Certificate of Death from
Local Civil Registrar.
Accused Ruben Calomia was due for transfer at BUCOR
Muntinlupa City at that time pending the approval of budget
but unfortunately he died with the aforementioned cause of
death before the scheduled date and time to transfer. [5]
 
Attached to J/CINSP Montejo's letter is a copy of accused-
appellant's Death Certificate issued by the Office of the Civil
Registrar General indicating that accused-appellant died on
September 29, 2015 in Cabawan District, Tagbilaran City,
Bohol, of "Asphyxia due to Strangulation, Self Inflicted,
Hanging."
Paragraph 1 of Article 89 of the Revised Penal Code, as
amended, provides that the death of an accused pending his
appeal extinguishes both his criminal and civil liability ex
delicto, thus:
 
Art. 89. How criminal liability is totally extinguished. -
Criminal liability is totally extinguished:
1. By the death of the convict, as to the personal penalties;
and as to pecuniary penalties, liability therefore is extinguished
only when the death of the offender occurs before final
judgment[.]
 
In People v. Bayotas,[6] the Court construed the above
provision and pronounced these guidelines:
 
1. Death of the accused pending appeal of his conviction
extinguishes his criminal liability as well as the civil liability
based solely thereon. As opined by Justice Regalado, in
this regard, "the death of the accused prior to final
judgment terminates his criminal liability and only the
civil liability directly arising from and based solely on
the offense committed, i.e., civil liability ex delicto in
senso strictiore."
2. Corollarily, the claim for civil liability survives
notwithstanding the death of accused, if the same may
also be predicated on a source of obligation other than
delict. Article 1157 of the Civil Code enumerates these other
sources of obligation from which the civil liability may arise as
a result of the same act or omission:
a) Law
b) Contracts
c) Quasi-contracts
d) x x x
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2
above, an action for recovery therefor may be pursued but
only by way of filing a separate civil action and subject to
Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as
Page 248 of 304
amended. This separate civil action may be enforced either
against the executor/administrator or the estate of the
accused, depending on the source of obligation upon which the
same is based as explained above.
4. Finally, the private offended party need not fear a forfeiture
of his right to file this separate civil action by prescription, in
cases where during the prosecution of the criminal action and
prior to its extinction, the private-offended party instituted
together therewith the civil action. In such case, the statute of
limitations on the civil liability is deemed interrupted during the
pendency of the criminal case, conformably with provisions of
Article 1155 of the Civil Code, that should thereby avoid any
apprehension on a possible privation of right by prescription.
(Emphases supplied.)
 
The death of an accused pending the appeal of his conviction
extinguishes the criminal action, as there is no longer a
defendant to stand as the accused; and the civil action
instituted therein for the recovery of civil liability ex delicto is
likewise ipso facto extinguished, as it is grounded on the
criminal action.[7]
In the instant case, accused-appellant's death occurred prior to
the finality of the judgment of conviction rendered against him.
In fact, accused appellant died way back on September 29,
2015, during the pendency of his appeal before the Court of
Appeals. Unfortunately, the appellate court was not timely
inf9rmed of accused-appellant's death prior to the
promulgation of its Decision in CA-G.R. CEB-CR-HC No. 02040
on August 26, 2016.
Irrefragably, accused-appellant's death extinguished his
criminal liability and his civil liabilities directly arising from and
based solely on the crime/s he committed. Accused-appellant's
conviction by the RTC, as affirmed by the Court of Appeals,
must therefore be set aside as the same had already been
rendered ineffectual.
WHEREFORE, the Court RESOLVES to SET ASIDE the
Decision dated August 26, 2016 of the Court of Appeals in CA-
G.R. CEB-CR-HC No. 02040 and to DISMISS Criminal Case
Nos. 1317 and 1318 before the Regional Trial Court of Loay,
Bohol, Branch 50, by reason of the death of the sole accused
therein, Ruben Calomia, on September 29, 2015.
SO ORDERED.
Kane vs. Roggenkamp
ALASTAIR JOHN KANE, PETITIONER, VS. PATRICIA
ROGGENKAMP, RESPONDENT
LEONEN, J.:
An acquittal from a charge of physical violence against women
and their children is not a bar to the filing of a civil action for
damages for physical injuries under Article 33 of the Civil Code
if an acquittal was due to reasonable doubt, without any
declaration that the facts upon which the offense arises are
nonexistent.
This resolves the Petition for Review on Certiorari1 filed by
Alastair John Kane, assailing the Decision2 and Resolution3 of
the Court of Appeals.    
The Court of Appeals reversed and set aside the Order4 of the
Regional Trial Court, Branch 214, Mandaluyong City, dismissing
Patricia Roggenkamp's Complaint for Damages against Alastair
John Kane. The Complaint, which was based on Article 33 of
the Civil Code, was dismissed on the grounds of res
judicata and lack of jurisdiction.
Alastair John Kane (Alastair John) and Patricia Roggenkamp
(Patricia) are Australian citizens.5 They met in January 2004 in
Brisbane, Australia, and became lovers immediately.6
Patricia decided to put up a business in the Philippines, and
eventually travelled with Alastair John to Manila. They settled
in a condominium unit located in Paranaque City supposedly
owned by Patricia.7
On March 30, 2006, an Information for violation of Republic
Act No. 9262 or the Anti-Violence Against Women and Children
Act of 2004 was filed against Alastair John, with Patricia as the
private complainant. The case, docketed as Criminal Case No.
06-0413, was then raffled to Branch 260 of the Regional Trial
Court of Paranaque City.8
According to Patricia, she and Alastair John attended a party
hosted by her son, Ashley Richard Cayzer (Ashley Richard) on
November 30, 2004. The next day, December 1, 2004, after
they had just arrived at their residence at about 1:00 a.m.,
Patricia confronted Alastair John for allegedly looking at the
underwear of other female guests at the party. Ignoring
Patricia, Alastair John went on to lie down on the bed. Patricia
then sat on a nearby chair.9
Alastair John, angered by Patricia's remarks, allegedly
approached Patricia, lifted her off the chair, and dropped her
on the floor. Patricia further claimed that Alastair John
punched her in the head, dragged her by the hair to the bed,
and pushed her head against the pillow. Patricia fought back
and, when she had the chance, ran to the bathroom and
locked herself inside.10
The next day, on December 2, 2004, Patricia's son, Ashley
Richard, visited his mother and saw her lying in bed in pain.
Alastair John told Ashley Richard that his mother had too much
liquor the night of the party and, when they arrived home,
Alastair John tried to carry her to the bed. Unfortunately, he
Page 249 of 304
accidently dropped her on the floor because the bed, which
allegedly had wheels, moved.11
Ashley Richard then brought Patricia to the San Juan de Dios
Hospital where she was prescribed painkillers for 12 days. After
the trip to the hospital, Patricia went home to Alastair John.
Their situation went back to being peaceful, and they even
went on vacation from December 26, 2004 to January
l,2005.12
On January 6, 2005, or merely five (5) days after, Alastair John
allegedly verbally abused Patricia. He then left the next day,
taking Patricia's car with him, as well as the keys to their
Paranaque residence and another condominium unit in Pasig
City where he stayed. Patricia, accompanied by her driver,
went to the Pasig condominium unit and recovered possession
of her car.13
On February 4, 2005, Patricia finally reported the incidents to
the police. She explained that, prior to the December 1, 2004
incident, there were already prior incidents of abuse committed
against her by Alastair John. After preliminary investigation,
probable cause for violation of Republic Act 9262 or the Anti-
Violence Against Women and their Children Act of 2004 was
found against Alastair John.14
After trial, the Regional Trial Court, Branch 260, Paranaque
City acquitted Alastair John on the ground of reasonable
doubt.15 The Paranaque trial court was of the opinion that
Alastair John's account of the events—that he accidentally
dropped Patricia on the floor while he was carrying her— was
"in accord with human experience[,]”16 while that of Patricia's
was not. It further said that "if [Patricia] was really a victim of
violence or abuse, she should have told the same to her son
[Ashley Richard], especially because the latter, according to
her, is a lawyer."17 The Paranaque trial court more particularly
said:
The Court noted that there was a heated altercation between
the private complainant and the accused after they came from
the birthday party of the former's son on December 1, 2004.   physical abuse of Patricia, a matter already found to be not "in
Kane was accused of looking and peeping at the girls during
the party. The Court is inclined to give credence to the version
of the accused. The same is in accord with human experience.
On the other hand[,] the version of Patricia is not in accord
with human experience. She claimed that she was grabbed by
the hair, hit her head and chest, neck, pelvic area and shoulder
but the clinical abstract does not indicate any signs of physical
violence. This court finds it unnatural why Patricia declared to
the doctor that she accidentally fell on a marble floor. This is
her same declaration to her son, Ashley. If she was really a
victim of violence or abuse, she should have told the same to
her son, especially because the latter, according to her, is a
lawyer. This court is also surprised why she did not leave the
accused if it is true that he manhandled her. She could easily
do those things because her relationship with the accused was
that only of lovers and there was no marriage to protect and
family to save. To reiterate, the version of Mr. Kane is shown
by the parties' actuations after the date alleged in the
information. They even celebrated Christmas in a beach resort
with friends and with the accused playing Santa [Claus].
Noteworthy is the filing of the case almost one year after the
alleged incident and after the parties started to have issues on
property.18
WHEREFORE, due to reasonable doubt, the accused,
ALASTAIR JOHN KANE, is hereby ACQUITTED of the crime
[of] violation of Sec. 5(a) of R.A. 9262, penalized by Sec. 6 (a)
of the said Act.
SO ORDERED.19 (Emphasis in the original)
Thereafter, Patricia filed a Complaint for Damages based on
Article 33 of the Civil Code before the Regional Trial Court of
Mandaluyong City, praying for actual, moral and exemplary
damages, and attorney's fees. Patricia argued that the right of
action provided in Article 33 in cases of physical injuries is
entirely separate and distinct from the criminal action earlier
commenced against Alastair John.20
Further, she added that the civil actions for damages under
Articles 32, 33, 34, and 2176 of the Civil Code, called
independent civil actions, "are not deemed instituted with the
criminal action and may be filed separately by the offended
party even without reservation." Considering that Alastair John
was acquitted on the ground of reasonable doubt, not because
he wasn't the author of the act complained of, Patricia argued
that he may still be held liable under Article 33 of the Civil
Code.21
Opposing the civil action, Alastair John filed a Motion to
Dismiss on the grounds of res judicata and improper
venue.22 Alastair John claimed     that the dismissal of the
criminal case barred the filing of the civil case, because the
cases allegedly involved identical causes of action. He
emphasized that the cases were both based on his alleged
accord with human experience."23 With respect to the venue,
Alastair John argued that it was improperly laid. The action for
damages was a personal action, yet none of the parties resided
in Mandaluyong City where the civil action was filed.24
In an April 20, 2009 Order, the Motion to Dismiss was denied
by the 214th Branch of the Regional Trial Court, Mandaluyong
City, then presided by Judge Edwin D. Sorongon.25
The trial court held that civil liability was not extinguished,
because Alastair John's acquittal was based on reasonable
doubt. Furthermore, the action filed by Patricia was an
independent civil action which, together with the actions
provided in Articles 32, 34, and 2176 of the Civil Code, is
separate and distinct from the criminal action and may be
enforced against an offender, separately or simultaneously,
Page 250 of 304
with his civil liability ex delicto under Article 100 of the Revised
Penal Code. Finally, the trial court held that venue was
properly laid because at the time of the filing of the civil
complaint, Patricia was already residing in Mandaluyong
City.26 In the words of the trial court:
"The motion is unimpressive.
"While it is true that accused's (herein defendant) guilt in the
criminal case had not been proven beyond reasonable doubt
by the trial court in Paraiiaque City, the decision however did
not state in clear and [unjequivocal terms that he did not
commit the offense charged. Hence, impliedly the trial court of
Paraiiaque acquitted him on reasonable doubt. Since civil
liability is not extinguished in criminal cases if the acquittal is
based on reasonable doubt[,] then the instant civil complaint
must proceed. Civil liability arising from criminal and civil
liability arising from Article 32, 33, 34 and 2176 quasi-delict for
contract (Art. 31) are entirely separate and distinct from the
criminal action that may be brought by injured party
(International Flavors and Fragrances, Inc. vs. Argon, 364
SCRA. 792)[.]
"Even if the guilt of the accused has not been [satisfactorily]
established, he is not exempted from civil liability which may
be proved by preponderance of evidence only. This is the
situation contemplated in Article 33 of the Civil Code where the
civil action for damages is "for the same act or omission."
Although the two actions have different purposes, the matters
discussed in the civil case are similar to those discussed in the
criminal case. However, the judgment in the criminal
proceeding cannot be read in evidence in the civil action to
establish any fact there determined, even though both actions
involve the same act or omission.
The  civil   liability   is  not  extinguished  where   acquittal   is  basis, and Patricia effectively committed forum shopping.
based  on reasonable doubt (Manantan vs. Court of
Appeals, 350 SCRA 387).
"An act or omission causing damage to another may give rise
to two separate liabilities on the part of the offender, i.e., (1)
civil liability ex deli[c]to, under Article 100 of the Revised Penal
Code, and (2) independent civil liabilities, such as those (a) not
arising from an act or omission complained of felony, e.g.
culpa contractual or obligations arising from law under Article
32 of the Civil Code, intentional torts under Article 32 and 34,
and culpa aqiiilkma under Article 2176 of the Civil Code, or (b)
where the injured party is granted a right to file an
independent and distinct criminal action (Article 33, Civil
Code). Either of these two possible liabilities may be enforced
against the offender (separately and simultaneously) subject,
however, to the caveat under Article 2177 of the Civil Code
that the offended party cannot recover damages twice for the
same act or omission or under both causes (Cando, Jr. v.
Isip, G.R. No. 133978, November 12, 2002). However, a
separate civil action based on subsidiary liability cannot be
instituted during the pendency of the criminal case (Remedial
Law, Herrera).
"Likewise, the ground of improper venue cannot be sustained.
It was clarified by plaintiff that when she testified on May 22,
2007 and May 13, 2008 she considered herself a resident of
Paraiiaque, however, in November 2008 and subsequently
thereafter[,] she stayed at the condominium unit of her friend
in. . . Mandaluyong City. In other words, at the time of the
filing of the complaint on November 29, 2008 she was already
residing in Mandaluyong City[.| Clearly, plaintiff for purposes of
this instant case is a resident of Mandaluyong
City”27 (Emphasis in the original)
With his Motion for Reconsideration having been denied by the
trial court, Alastair John filed his Answer with Compulsory
Counterclaim and Patricia, her Reply. Issues were joined and
the case was set for pre-trial.28
In the meantime, Judge Sorongon was appointed Associate
Justice of the Court of Appeals. Judge Ofelia Calo then acted
as Presiding Judge of the Mandaluyong trial court29 and, in the
June 8, 2010  Order, dismissed the case motu proprio on the
ground oi res jiidicata and lack of jurisdiction.30
The Mandaluyong trial court said that, after "[taking] a closer
look at the records extant to the instant case[,]"31 any
subsequent proceeding in the civil case would be "a waste of
time"32 since the decision of the Paranaque trial court had the
effect of res judicata. Specifically, the Mandaluyong trial court
declared that the Parafiaque trial court's evaluation of the
parties'     respective evidence meant that "the act from which
the civil liability might arise did not exist."33
Consequently, the action based on Article 33 allegedly had no
Finally, it ruled that the Paranaque trial court's decision in the
criminal case already attained finality, thus depriving the
Mandaluyong trial court of jurisdiction over Patricia's Complaint
for Damages.
A closer look at the records of the instant case filed by plaintiff
would show that this court has no jurisdiction over the instant
case.
The instant case which is for damages was also the subject
matter of Criminal Case No. 06-413 litigated in another court,
the Regional Trial Court of Paranaque City, Branch 260 wherein
a Decision rendered by the said court acquitting the accused,
the herein defendant.
Although the motion to dismiss filed by defendants on the
grounds that the instant complaint is barred by prior judgment
and improper venue was already denied for lack of merit in an
Order dated 20 April 2009, the undersigned acting presiding
judge deemed it proper to take a closer look at the records
extant to the instant case considering that proceeding to the
Page 251 of 304
initial trial will just be a waste of time and any proceedings
taken by the court will only be a nullity if the court has no
jurisdiction because of the principle of res judicata.
Verily, the evaluation made by the RTC, Branch 260,
Paranaque City of the criminal case giving credence to the
version of the accused, which the Court perceived to be in
accord with human experience, and pointing to factual
circumstances and explaining why the version of Patricia is not
in accord with human experience, is a clear showing that the
act from which the civil liability might arise did not exist.
With the decision rendered by the RTC Branch 260, Paranaque
City involving the same cause of action and relief sought, and
identity [of] parties, this court perceives that the filing of the
instant case in this jurisdiction constituted forum shopping. . . .
Considering that the RTC, Branch 260, Paranaque City has
already taken cognizance of the case involving the same cause
of action and identity of parties, and has in fact rendered a
decision which has attained finality, this court therefore has no
jurisdiction to try the same action.34
Patricia filed a Motion for Reconsideration, which was
subsequently denied in a November 19, 2010 Order.35
Alleging error on the part of the Mandaluyong trial court,
Patricia appealed before the Court of Appeals. In the March 25,
2014 Decision,36 the Court of Appeals granted the appeal and
reversed the June 8, 2010 and August 23, 2010 Orders of the
Mandaluyong trial court.
The Court of Appeals first discussed how an act or omission
may give rise to two (2) separate civil liabilities on the part of
an offender. The civil liability ex delicto or that arising from the
crime is provided in Article 100 of the Civil Code. On the other
hand, independent civil liabilities are provided in Articles 32,
33, 34, and 2176 of the Civil Code, which are liabilities
separate and distinct from the criminal action and may be
pursued independently of it. Reservation to file the civil action
is even unnecessary. Thus, an offended party may pursue any
of these civil liabilities, whether ex delicto or not, subject to
Article 2177 of the Civil Code prohibiting double recovery.37
The Court of Appeals then emphasized that the civil case filed
by Patricia was based on Article 33 of the Civil Code, an
independent civil action. Thus, contrary to the Mandaluyong
trial court's ruling, the decision of the Paranaque trial court
acquitting Alastair John did not operate as res judicata so as to
bar the filing of the Complaint for Damages under Article 33. It
was immaterial that the decision of the Paranaque trial court
had already become final and executory, because the causes
of action between the case for violation of Republic Act No.
9262 and the one filed under Article 33 of the Civil Code are
different.38
The Court of Appeals held that Patricia did not commit forum
shopping because the causes of action for the criminal action
and the Complaint for Damages are different. There can also
be no forum shopping, according the Court of Appeals, when
the law expressly allows the filing of an independent civil
action in cases of physical injuries.39
Finally, the Court of Appeals held that the venue was properly
laid. Under the Rules of Court, personal actions, such as an
action for damages, must be filed in the plaintiff or defendant's
residence, at the election of the plaintiff, unless the parties
agree on another venue. Considering that Patricia was already
residing in Mandaluyong City at the time of the filing of the
case, she correctly filed the Complaint for Damages before the
Regional Trial Court of Mandaluyong.40
The dispositive portion of the Court of Appeals' March 25, 2014
Decision read:
WHEREFORE, the appeal is GRANTED. The Orders dated
June 8, 2010 and November 19, 2010 of the Regional Trial
Court of Mandaluyong City, Branch 214 in Civil Case No. MC08-
3871 are REVERSED AND SET ASIDE. The Regional Trial
Court of Mandaluyong City, Branch 214 is DIRECTED to
reinstate Civil Case No. MC08-3871, to continue with the
proceedings and to resolve the same with deliberate dispatch.
SO ORDERED.41 (Emphasis in the original)
Alastair John then filed a Motion for Reconsideration, which
was denied by the Court of Appeals in the September 3, 2014
Resolution.42
On October 9, 2014, Alastair John filed his Petition for Review
on Certiorari.43 Upon the directive of this Court, Patricia filed
her Comment,44 to which Alastair John replied.45
Petitioner mainly argues that he may no longer be made liable
for damages under Article 33 of the Civil Code. According to
petitioner, the Paranaque trial court's decision on the criminal
case for violation of Republic Act No. 9262 clearly established
that "the act or omission from which the civil liability may arise
did not exist."46 Therefore, there is no basis to hold him liable
for damages for the alleged physical injuries sustained by
respondent.47
Further, petitioner maintains that respondent's Complaint for
Damages was already barred by res judicata. He claims that
the Complaint for Damages was based on the alleged
intentional physical injuries sustained by respondent. In the
criminal case, however, the Paranaque trial court already ruled
that the physical injuries resulted from an accident. With the
decision of the Paranaque trial court having attained finality, it
is allegedly binding upon the parties, and the Complaint for
Damages was correctly     dismissed by the Mandaluyong trial
court.48
Page 252 of 304
It follows that in filing the Complaint for Damages, respondent
committed forum shopping. Specifically, respondent allegedly
sought damages after she failed to secure a favorable ruling
with the Paranaque trial court.49
Finally, petitioner contends that the venue for the civil action
was improperly laid. Although the term "residence" merely
refers to a physical habituation or actual residence, the
physical presence and actual stay in that place must be more
than temporary and must be with continuity and consistency.
According to petitioner, respondent failed to establish such
continuity, as she testified under oath in two (2) proceedings
that she was a resident of Paranaque City:50 (1) one in 2007;
and (2) another in 2008, both after the filing of the Complaint
for Damages. These declarations should bind respondent, since
her declarations were given under pain of prosecution for
perjury.51
Respondent counters that the Court of Appeals committed no
error in ruling that petitioner may still be held liable for
damages, regardless of his acquittal in the criminal case.
According to respondent, nowhere in the text of the Paranaque
trial court decision could it be inferred that the fact from which
petitioner's civil liability might arise did not exist.
On the contrary, the Paranaque trial court explicitly stated that
it acquitted petitioner "due to reasonable
doubt[.]"52 Consequently, the Mandaluyong trial court should
have proceeded to trial, and petitioner's liability for physical
injuries, if any, should have been ascertained.53
Respondent further submits that res jiidicata does not apply in
the present case. She maintains that the civil actions under
Articles 32, 33, 34 and 2176 of the Civil Code are independent
civil actions which may be separately filed by the offended
party, even without reservation in the prosecution of the
criminal action. Therefore, respondent is legally "allowed to file
two (2) separate suits for the same act or omission. The first a
criminal suit where the civil action to recover civil liability ex-
delicto is deemed instituted, and the other a civil case for
quasi-delict[,]"54 and the independent civil action may proceed
regardless of the result of the proceedings in the criminal
case.'55
On the issue of forum shopping, respondent contends that the
Court of Appeals correctly ruled on the issue. According to
respondent, the civil liability under Article 33 of the Civil Code
is separate and distinct from the civil liability arising under
Article 100 of the Revised Penal Code. Thus, an offended party
may pursue both kinds of civil liability, even simultaneously,
without offending the rule against forum shopping.56
Lastly, respondent maintains that, as correctly found by the
Court of Appeals, the venue was properly laid. She argues that
"whether [she] lived in other places prior to [the filing of the
complaint] is irrelevant[,]"57 and in this case, she clearly
established that she was a resident of Mandaluyong City when
she filed her Complaint for Damages under Article 3358
The issues for this Court's resolution are:
First, whether or not petitioner Alastair John Kane may still be
held civilly liable because his acquittal was based on
reasonable doubt;
Second, whether or not the Complaint for Damages was
already barred by res judicata;
Third, whether or not respondent Patricia Roggenkamp
committed forum shopping; and,
Fourth, whether or not the venue was properly laid.
This Petition must be denied. The Mandaluyong trial court
seriously erred in motu proprio dismissing respondent's
Complaint for Damages on the grounds of res judicata and lack
of jurisdiction.
I
Respondent based her Complaint for Damages against
petitioner on Article 33 of the Civil Code:
ARTICLE 33. In cases of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate and
distinct from the criminal action, may be brought by the
injured party. Such civil action shall proceed independently of
the criminal prosecution, and shall require only a
preponderance of evidence.
Article 33 is explicit that in cases of defamation, fraud, and
physical injuries., the civil action is "entirely separate and
distinct from the criminal action" and shall "proceed
independently of the criminal prosecution." Accordingly, Article
33 "contemplates a civil action for the recovery of damages
that is entirely unrelated to the purely criminal aspect of the
case."59 Even the quantum of proof required—preponderance
of evidence, as opposed to the proof beyond reasonable doubt
in criminal cases—is different, confirming that the civil action
under Article 33 is independent of the criminal action.
Reservation of the right to separately file a civil action for
damages under Article 33 need not even be made. The civil
action under Article 33 may be pursued before the filing of the
criminal case,60 during the pendency of the criminal case,61 or
even after the criminal case is resolved.62 The only limitation
is that an offended party cannot "recover [damages] twice for
the same act or omission" of the defendant. Rule 111, Section
3 of the 2000 Revised Rules of Criminal Procedure provides:
RULE 111
Prosecution of Civil Action
Page 253 of 304
SECTION 3. When Civil Action May Proceed Independently. —
In the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code of the Philippines, the independent civil action may
be brought by the offended party. It shall proceed
independently of the criminal action and shall require only a
preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or
omission charged in the criminal action.
Further, "defamation," "fraud," and "physical injuries," as used
in Article 33, are to be understood in their ordinary sense.
Specifically, the "physical injuries" contemplated in Article 33 is
bodily injury, not the "physical injuries" referred to in the
Revised Penal Code. As first explained in Carandang v.
Santiago:63
[Article 33 uses the words "defamation", ''fraud" and "physical
injuries." Defamation and fraud are used in their ordinary
sense because there are no specific provisions in the Revised
Penal Code using these terms as means of offenses defined
therein, so that these two terms defamation and fraud must
have been used not to impart to them any technical meaning
in the laws of the Philippines, but in their generic sense. With
this apparent circumstance in mind,  it is evident that the term
"physical injuries" could not have been used in its specific
sense as a crime defined in the Revised Penal Code, for it is
difficult to believe that the Code Commission would have used
terms in the same article — some in their general and another
in its technical sense. In other words, the term "physical
injuries" should be understood to mean bodily injury, not the
crime of physical injuries, because the terms used with the
latter are general terms. In any case the Code Commission
recommended that the civil action for physical injuries be
similar to the civil action for assault and battery in American
Law, and this recommendation must have been accepted by
the Legislature when it approved the article intact as
recommended. If the intent has been to establish a civil action
for the bodily harm received by the complainant similar to the
civil action for assault and battery, as the Code Commission
states, the civil action should lie whether the offense
committed is that of physical injuries, or frustrated homicide,
or attempted homicide, or even death.64
Madeja v.   Caro65 reiterates that "physical injuries" in Article
33 means bodily injury.
Alastair John was charged with violating Section 5(a) of
Republic Act No. 9262, or the Anti-Violence Against Women
and Children Act of 2004:
SECTION 5. Acts of Violence Against Women and Their
Children. — The crime of violence against women and their
children is committed through any of the following acts:
(a)    Causing physical harm to the woman or her child;
(b)    Threatening to cause the woman or her child physical
harm;
(c)    Attempting to cause the woman or her child physical
harm[.]
Section 5 enumerates the various "acts of violence against
women and their children," generally defined as:
SECTION 3. Definition of Terms. — any act or a series of acts
committed by any person against a woman who is his wife,
former wife, or against a woman with whom the person has or
had a sexual or dating relationship, or with whom he has a
common child, or against her child whether legitimate or
illegitimate, within or without the family abode, which result in
or is likely to result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of such acts,
battery, assault, coercion, harassment or arbitrary deprivation
of liberty.66   
Paragraphs (a), (b), and (c) of Section 5 specifically refer to
acts of "physical violence," which, under the law, includes "acts
that include bodily or physical harm[.]"
It is not hard to see that respondent properly availed herself of
a separate action for damages under Article 33 after the
dismissal of the criminal case against petitioner. The criminal
action filed against petitioner was one for physical injuries in
the sense contemplated in Article 33, that is, bodily injury.
Nevertheless, Alastair John claims that his acquittal should
have barred the filing of the Complaint for Damages. He
maintains that, as allegedly held by the Paranaque trial court,
the act or commission from which the civil liability might arise
did not exist; hence, there is no civil liability ex delicto to which
the Article 33 action may be anchored.
The contention is without merit.
Under Rule 120, Section 2 of the 2000 Revised Rules of
Criminal Procedure, a judgment acquitting the accused must
state whether the prosecution absolutely failed to prove the
guilt of the accused or merely failed to prove his guilt beyond
reasonable doubt. Furthermore, the judgment must determine
if the act or omission from which the civil liability might arise
did not exist:
RULE 120
Judgment
....
SECTION 2. Contents of the Judgment. — If the judgment is of
conviction, it shall state (1) the legal qualification of the
offense constituted by the acts committed by the accused and
the aggravating or mitigating circumstances which attended its
commission; (2) the participation of the accused in the offense,
whether as principal, accomplice, or accessory after the fact;
Page 254 of 304
(3) the penalty imposed upon the accused; and (4) the civil
liability or damages caused by his wrongful act or omission to
be recovered from the accused by the offended party, if there
is any, unless the enforcement of the civil liability by a
separate civil action has been reserved or waived.
In case the judgment is of acquittal, it shall state whether the
evidence of the prosecution absolutely failed to prove the guilt
of the     accused or merely failed to prove his guilt beyond
reasonable doubt.  In     either case, the judgment shall
determine if the act or omission from which the civil liability
might arise did not exist. (Emphasis supplied)
It is essential to indicate whether the act or omission from
which the civil liability might arise did not exist. Without such
declaration, it must be presumed that the acquittal was due to
reasonable doubt, and the accused is civilly liable ex
delicto. Thus, the general rule shall apply: every person
criminally liable is also civilly liable.67
In Manantan v. Court of Appeals,68  accused George
Manantan was charged with reckless imprudence resulting in
homicide. The trial court acquitted him of the crime charged,
leading the heirs of the deceased to appeal the civil aspect of
the trial court decision. Despite Manantan's acquittal, the Court
of Appeals granted the appeal, declared Manantan to be the
"proximate cause of the vehicular accident,"69 and held him
civilly liable.
Among Manantan's arguments before this Court was that the
Court of Appeals erred in finding him civilly liable, because the
trial court already found that he was neither imprudent nor
negligent. To this, this Court said that nowhere in the text of
the trial court decision can it be inferred that no negligence or
imprudence existed. All the judgment provided was that
Manantan was "NOT GUILTY of the crime charged[.]"70
Thus, the Court of Appeals "was not precluded from looking
into the question of [Manantan's] negligence or reckless
imprudence[,]"71 for "even if [his guilt] has not been
satisfactorily established, he is not exempt from civil liability
which may be proved by preponderance of evidence
only."72 In other words, Manantan's acquittal was not because
the act or omission from which the civil liability might arise did
not exist. Therefore, Manantan was correctly held civilly liable
by the Court of Appeals. Explained this Court:
Our law recognizes two kinds of acquittal, with different effects
on the civil liability of the accused. First is an acquittal on the
ground that the accused is not the author of the act or
omission complained of. This instance closes the door to civil
liability, for a person who has been found to be not the
perpetrator of any act or omission cannot and can never be
held liable for such act or omission. There being no delict, civil
liability ex delicto is out of the question, and the civil action, if
any, which may be instituted must be based on grounds other
than the delict complained of. This is the situation
contemplated in Rule 111 of the Rules of Court. The second
instance is an acquittal based on reasonable doubt on the guilt
of the accused.   In this case, even if the guilt of the accused
has not been     satisfactorily established, he is not exempt
from civil liability which may be proved by preponderance of
evidence only. This is the situation contemplated in Article 29
of the Civil Code, where the civil action for damages is "for the
same act or omission." Although the two actions have different
purposes, the matters discussed in the civil case are similar to
those discussed in the criminal case. However, the judgment in
the criminal proceeding cannot be read in evidence in the civil
action to establish any fact there determined, even though
both actions involve the same act or omission. The reason for
this rule is that the parties are not the same and secondarily,
different rules of evidence are applicable. Hence,
notwithstanding herein petitioner's acquittal, the Court of
Appeals in determining whether Article 29 applied, was not
precluded from looking into the question of petitioner's
negligence or reckless imprudence.73 (Citations omitted)
Like in Mcmantan, nowhere in the decision of the Parafiaque
trial court in the criminal case does it state that the act or
omission from which civil liability might arise did not exist. On
the contrary, the trial court was unequivocal that petitioner
was acquitted due to reasonable doubt:
WHEREFORE, due to reasonable doubt, the accused,
ALASTAIR JOHN KANE, is hereby ACQUITTED of the crime
[of] violation of Sec[.] 5(a) of R.A. 9262, penalized by Sec[.] 6
(a) of the said Act.
SO ORDERED.74 (Emphasis supplied)
Having been acquitted due to reasonable doubt, petitioner is
not exempt from civil liability. This is true even if his guilt was
not satisfactorily established.
II
Furthermore, contrary to petitioner's argument, the decision of
the Parafiaque trial court acquitting him did not operate as res
judicata so as to bar the filing of the Complaint for Damages
under Article 33 of the Civil Code.
The concept of res judicata was expounded in Club Filipino,
Inc. v. Bautista:75
Res judicata "literally means 'a matter adjudged; a thing
judicially acted upon or decided; [or] a thing or matter settled
by judgment.'" Res jiidicata "lays the rule that an existing final
judgment or decree rendered on the merits, and 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."
Page 255 of 304
Res judicata has two (2) aspects. The first is bar by prior
judgment that precludes the prosecution of a second action
upon the same claim, demand or cause of action. The second
aspect is conclusiveness of judgment, which states that "issues
actually and directly resolved in a former suit cannot again be
raised in any future case between the same parties involving a
different cause of action."
The elements of res judicata are:
(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 action
identity of parties,  subject matter,  and  causes  of
action[.]76 (Citations omitted; emphasis in the original)
It is settled that a decision acquitting the accused is not res
judicata on the independent civil action, even if the latter
action arises from the same act or omission on which the
criminal action was based.
In Cancio v. hip,77 cases for estafa were filed against
Emerenciana Isip for issuing checks with insufficient funds.
After it had failed to present its second witness, the
prosecution moved to dismiss the estafa cases, but reserved
the right to file a separate civil action. The motion was
granted, and the private complainant, Jose Cancio, Jr.,
subsequently filed a case for collection of sum of money to
recover the amount of the checks subject of the estafa cases.
Isip filed a motion to dismiss, arguing that that the collection
case was barred on the ground of res judicata. The trial court
agreed and dismissed the collection case. It held that "the
dismissal of the criminal cases. . . on the ground of lack of
interest or failure to prosecute is an adjudication on the merits
which amounted to res judicata on the civil case for
collection."78
On appeal, this Court set aside the trial court's decision. It
explained that an act or omission causing damage to another
may give rise to two (2) separate civil liabilities: (1) civil
liability ex delicto, or that arising from the crime, and (2)
independent civil liabilities, i.e., those not arising from the
crime, or those where the law expressly grants the injured
party the right to file an independent and distinct civil action
from the criminal action. An action for collection of sum of
money is not an action arising from the crime but from
contract, an independent civil action which, according to this
Court, may be pursued even without reservation.79
This Court rejected the contention that the collection case was
barred by res judicata. Among the elements of res judicata is
that there is an identity of causes of action between the
actions, and between a criminal case based on culpa criminal
and an action based on culpa contractual, there is no such
identity of causes of action. The independent civil action:
. . . remains separate and distinct from any criminal
prosecution based on the same act. Not being deemed
instituted in the criminal action based on culpa criminal, a
ruling on the culpability of the offender will have no bearing on
said independent civil action based on an entirely different
cause of action, i.e., culpa contractual80 (Citation omitted;
emphasis in the original)
The defense of res judicata was likewise raised but
nonetheless rejected in Lim v. Kou Co Ping.81 The case
involved withdrawal authorities issued by a cement
corporation, thereby allowing holders of the instrument to
withdraw cement bags from the corporation's cement plant.
Kou Co Ping had earlier bought withdrawal authorities, which
he subsequently sold to Lily Lim. When Lim failed to withdraw
cement bags covered by the withdrawal authorities, she sued
Kou Co Ping for estafa before the Regional Trial Court of Pasig.
The trial court acquitted Kou Co Ping of estafa for insufficiency
of evidence. However, it set the case for reception of evidence
on Kou Co Ping's civil liability. After trial on the criminal case,
the trial court also absolved Kou Co Ping of civil liability to Lim.
This caused Lim to subsequently file a complaint for specific
performance and damages before the Regional Trial Court of
Manila. Moving to dismiss the complaint, Kou Co Ping argued
that his acquittal in the estafa case was res judicata on the
specific performance and damages case.
The Manila trial court denied the motion to dismiss, which
was    affirmed by this Court.   Citing Cancio, this Court
discussed how an act or omission may give rise to civil liability
arising from different sources. The source of the civil liability
arising from the offense is different from that arising from
contract, and an offended party may pursue either or both,
subject to the prohibition on double recovery under Article
2177 of the Civil Code. Considering that the complaint for
specific performance and damages is premised on a civil
liability, and not arising from crime but from contract, this
Court held that the decision on the civil aspect of
the estafa case had no bearing on the case for specific
performance and damages. In Lim:
A single act or omission that causes damage to an offended
party may give rise to two separate civil liabilities on the part
of the offender — (1) civil liability ex delicto, that is, civil
liability arising from the criminal offense under Article 100 of
the Revised Penal Code, and (2) independent civil liability, that
is, civil liability that may be pursued independently of the
criminal proceedings. The independent civil liability may be
Page 256 of 304
based on "an obligation not arising from the act or omission
complained of as a felony," as provided in Article 31 of the Civil
Code (such as for breach of contract or for tort). It may also
be based on an act or omission that may constitute felony but,
nevertheless, treated independently from the criminal action by
specific provision of Article 33 of the Civil Code ("in cases of
defamation, fraud and physical injuries").
The civil liability arising from the offense or ex delicto is based
on the acts or omissions that constitute the criminal offense;
hence, its trial is inherently intertwined with the criminal
action. For this reason, the civil liability ex delicto is impliedly
instituted with the criminal offense. If the action for the civil
liability ex delicto is instituted prior to or subsequent to the
filing of the criminal action, its proceedings are suspended until
the final outcome of the criminal action. The civil liability based
on delict is extinguished when the court hearing the criminal
action declares that "the act or omission from which the civil
liability may arise did not exist."
On the other hand, the independent civil liabilities are separate
from the criminal action and may be pursued independently, as
provided in Articles 31 and 33 of the Civil Code, which state
that:
ART. 31. When the civil action is based on an obligation not
arising from the act or omission complained of as a
felony, such civil action may proceed independently of the
criminal proceedings and regardless of the result of the latter.
ART. 33. In cases of defamation, fraud, and physical injuries a
civil action for damages, entirely separate and distinct from the
criminal action, may be brought by the injured party. Such civil
action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of
evidence.
Because of the distinct and independent nature of the two
kinds of civil liabilities, jurisprudence holds that the offended
party may pursue the two types of civil liabilities
simultaneously or cumulatively, without offending the rules on
forum shopping, litis pendentia, or res judicala. As explained in
Cancio, Jr. v. Isip:
One of the elements of res judicata is identity of causes of
action.1âшphi1 In the instant case, it must be stressed that the
action filed by petitioner is an independent civil action, which
remains separate and distinct from any criminal prosecution
based on the same act. Not being deemed instituted in the
criminal action based on cirtpa criminal, a ruling on the
culpability of the offender will have no bearing on said
independent civil action based on an entirely different cause of
action, i.e., culpa contractual.
In the same vein, the filing of the collection case after the
dismissal of the estafa cases against [the offender] did not
amount to forum-shopping. The essence of forum shopping is
the filing of multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, to
secure a favorable judgment. Although the cases filed by [the
offended party] arose from the same act or omission of [the
offender], they are, however, based on different causes of
action. The criminal cases for estafa are based on culpa
criminal while the civil action for collection is anchored
on culpa contractual. Moreover, there can be no forum-
shopping in the instant case because the law expressly allows
the filing of a separate civil action which can proceed
independently of the criminal action.82 (Citations omitted;
emphasis in the original)
Applying the foregoing, petitioner's acquittal in the case for
violation of Section 5(a) of Republic Act No. 9262 is not res
judicata on the action for damages under Article 33 of the Civil
Code. One of the elements of res judicata is the identity of
causes of action, with "cause of action" being the "act or
omission by which a party violates a right of another."83
While the criminal action and the action for damages arise
from the same act or omission—the alleged physical violence
committed by petitioner against respondent—these actions
violate two (2) different rights of respondent: (1) her right not
to be physically harmed by an intimate partner under Republic
Act No. 9262; and (2) her right to recover damages for bodily
injury under Article 33 of the Civil Code.
In other words, the criminal case and the civil case do not
have identical causes of action, and respondent had the right
to pursue either petitioner's civil liability arising from the
violation of Republic Act No. 9262, or the independent civil
liability provided for in Article 33 of the Civil Code.
Even the finality of the acquittal is immaterial in the present
case. To reiterate: actions under Article 33 of the Civil Code
are '"separate, distinct, and independent' of any criminal
prosecution based on the same act [or omission]"84 on which
the civil action was filed. As this Court said in Cancio, "a ruling
on the culpability of the offender will have no bearing on [the]
independent civil action based on an entirely different cause of
action[.]"85
All told, the Court of Appeals correctly rejected petitioner's res
judicata argument.
III
Corollarily, this Court affirms the Court of Appeals' ruling that
respondent did not commit forum-shopping when she filed the
Complaint for Damages under Article 33 of the Civil Code.
Forum shopping is committed
by a party who institutes two or more suits in different courts,
either simultaneously or successively, in order to ask the courts
to rule on the same or related causes or to grant the same or
substantially the same reliefs, on the supposition that one or
Page 257 of 304
the other court would make a favorable disposition or increase
a party's chances of obtaining a favorable decision or
action[.]86 (Citation omitted)
To determine whether there is forum shopping, it is necessary
to ascertain "whether the elements of litis pendentia are
present, or whether a final judgment in one case will amount
to res judicata in another[.]"87 The test is "whether in the two
(or more) cases pending, there is identity of parties, rights or
causes of action, and reliefs sought."88
Litis pendentia "refers to that situation wherein another action
is pending between the same parties for the same cause of
action, such that the second action becomes unnecessary and
vexatious."89
The following requisites must concur for litis pendentia to be
present: (1) the identity of parties, or at least such as
representing the same interests in both actions; (2) the
identity of rights asserted and relief prayed for; and (3) the
identity of the two (2) cases such that judgment in one,
regardless of which party is successful, would amount to res
judicata in the other.90
As discussed, the final judgment on the violation for Section
5(a) of Republic Act No. 9262 does not amount to res
judicata in the action for damages under Article 33 of the Civil
Code. Further, Article 33 expressly allows the filing of a
separate civil action for damages arising from physical injuries
that can proceed independently of the criminal action. With
one of the crucial elements of res judicata being absent, there
can be no forum shopping in this case.
IV
The Court of Appeals correctly held that the venue was
properly laid.
Venue is "the place where the case is to be heard or
tried[.]"91 Under our Rules, the venue of an action generally
depends on whether it is a real or personal action.
Real actions are those affecting the title or possession of a real
property, or interest therein, to be commenced and tried in the
proper court which has jurisdiction over the area wherein the
real property involved, or a portion thereof, is situated.92 All
other actions, called personal actions, may be commenced and
tried where the plaintiff or any of the principal plaintiffs reside,
or where the defendant or any of the principal defendants
reside, at the election of the plaintiff.93
The action for damages filed by respondent does not involve
the title or possession of a real property, or interest therein. It
is a personal action, and respondent, as plaintiff, had the
option of either filing it in her place of residence or the
defendant, petitioner's, place of residence. She chose to file
the civil case in her place of residence, that is, Mandaluyong
City.
Petitioner,   however,   maintains   that   Mandaluyong   City  
is   not respondent's place of residence.  While respondent
alleged in her Complaint for Damages that she resides in a
condominium unit in Mandaluyong City, petitioner cites two (2)
instances where respondent testified that she residesat a
condominium unit in Paranaque City. The venue, petitioner
argues, was improperly  laid and the Complaint for Damages 
should be  dismissed accordingly.
Looking into petitioner's allegations, he cites parts of the
proceedings in the criminal case, specifically, the hearing held
on May 22, 200794  and May 13, 200895  where respondent
testified that she resided in a condominium in Paranaque.
The Complaint for Damages, however, was filed on November
28, 2008,96 and it could very well be that, as respondent had
alleged in her civil complaint, she was already a resident of
Mandaluyong City at that time. Absent proof to the contrary,
this Court affirms the findings of the Court of Appeals that
"[a]t the time of the filing of this case, [respondent] was
already residing [at Mandaluyong City]. Thus, venue was
properly laid at the [Regional Trial Court] of Mandaluyong
City."97
As a final note, not only did the Mandaluyong trial court err in
dismissing the action based on Article 33 of the Civil Code by
assuming that the acquittal, by itself, is a declaration that the
facts upon which the civil action can arise did not exist is
already presumed. The court that tried the civil case also
possibly erred in the manner by which it interpreted the facts
on the basis of what it considered as which narrative is "in
accord with human experience."98
The two (2) points articulated in the decision regarding the
criminal case seems to reveal the severe lack of gender
sensitivity and/or practical wisdom on the trial court judge's
part. The first is the assertion that the woman chose to hide
her lover's transgressions against her person before the doctor,
as well as her son. The second is the judge's assertion of his
conclusion that the hesitation of the woman to immediately
leave her lover is an unnatural act and, hence, unbelievable.
These assumptions that provide the filters for a judge to
eventually acquit, demonstrate that there is a possibility that
another civil action may interpret the facts differently. A more
enlightened interpretation of the evidence may involve a less
caricaturized, less patriarchal set of assumptions.   For
instance, the capability of women to sacrifice their own    
welfare in favor of those who they care for and love is known
to many         women.    
Thus, protecting the husband's reputation before a stranger,
even if that stranger be a doctor, or sparing the son from a
premature dilemma that undermines his view of his father, is
Page 258 of 304
possibly a more ordinary and enlightened view of respondent's
motive, assuming the facts as established by the court trying
the criminal case.
Similarly, that someone, usually the woman, would hesitate to
simply leave her family and deprive them of her caring for her
part in maintaining the household, even at peril to herself or
her dignity, is not outlandish, inconceivable or, sadly, even
exceptional. Certainly, it is "in accord with human
experience."99
These motives, often perpetuated by culture, are the precise
targets of our laws which underscore gender equality in every
type of relationship. It is the awareness of the possibility of
abuse that a more gendered perspective of human intentions is
privileged by laws on sexual harassment—including the law
which seeks to prohibit violence against women in intimate
relationships. The rather dismal failure to consider the
complexity of the human psyche in the criminal case may not
be how the judge in the civil case will consider the case given
the same set of evidence. It is in these respects that We see
the wisdom of our current rules.
WHEREFORE, the Petition for Review on Certiorari
is DENIED. The Court of Appeals' March 25, 2014 Decision
and September 13, 2014 Resolution in  CA-G.R. CV No. 
96341   are hereby AFFIRMED.    The
Regional Trial Court of Mandaluyong City, Branch 214, is
hereby DIRECTED to reinstate Civil Case No. MC08-3871,
continue with the proceedings, and to resolve the same with
dispatch.
SO ORDERED.
Tuanda vs Sandiganbayan
REYNALDO V. TUANDA, Mayor of the Municipality of
Jimalalud, Negros Oriental, HERMINIGILDO
FABURADA, (former Vice-Mayor), SANTOS A.
VILLANUEVA, Incumbent Member of the Sanguniang
Bayan, MANUEL LIM NICANOR R. AGOSTO ERENIETA K.
MENDOZA, MAXIMINO A. VIERNES, HACUBINA V.
SERILIO, ILUMINADO D. ESTRELLANES, and FORMER
MEMBERS OF THE SANGGUNIANG BAYAN OF
JIMALALUD, NEGROS ORIENTAL, petitioners, vs. THE
HONORABLE SANDIGANBAYAN (THIRD DIVISION)
BARTOLOME BINAOHAN and DELIA ESTRELLANES,
respondent.
KAPUNAN, J.:
Petitioners institute this special civil action for certiorari and
prohibition under Rule 65 of the Revised Rules of Court to set
aside the resolution of the Sandiganbayan dated 17 February
1992 and its order dated 19 August 1992 and 13 May 1993 in
Criminal Case No. 16936 entitled "People of the Philippines
versus Reynaldo Tuanda, et al. "denying petitioners motion for
suspension of their arraignment.
The present controversy arose from the following antecedents:
On 9 February 1989, private respondents Delia Estrellanes and
Bartolome Binaohan were designated as industrial labor
sectoral representative and agricultural labor sectoral
representative respectively, for the Sangguniang Bayan of
Jimalalud, Province of Negros Oriental by then Secretary Luis
T. Santos of the Department of Local Government. Private
respondents Binaohan and Estrellanes took their oath .of office
on 16 February 1989 and 17 February 1989, respectively.
Subsequently, petitioners filed an undated petition with the
office of the President for review and recall of said
designations. The latter, however, in a letter dated 20 March
1989, denied the petition and enjoined Mayor Reynaldo
Tuanda to recognize private respondents as sectoral
representatives.
On 4 May 1990, private respondents filed a petition for
mandamus with the Regional Trial Court of Negros Oriental,
Branch 35, docketed as Special Civil Action No. 9661, for
recognition as members on the Sangguniang Bayan. It was
dismissed on 23 July 1991.
Thereafter, on 20 June 1991, petitioners filed action with the
Regional Trial Court of Dumaguete City to declare null and void
the designations of private respondents as sectoral
representatives, docketed as Civil Case No. 9955 entitled
"Reynaldo Tuanda. et al. versus Secretary of the Department
of Local Government, et. al."
On 21 July 1991, an information was filed before the
Sandiganbayan, docketed as Criminal Case No. 16936 entitled
"People of the Philippines versus Reynaldo Tuanda, et. al.,"
charging petitioners thus:
INFORMATION
The undersigned Special Prosecution officer of the Special
Prosecutor,. hereby accuses REYNALDO V. TUANDA,
HERMINIGILDO G. FABURADA. MANUEL LIM, NICANOR P.
AGOSTO, ERENIETA K. MENDOZA, MAXIMO VIERNES,
HACUBINA V. SERILLO, and SANTOS. A. VILLANUEVA of
Violation of Section 3(e) of R.A. No. 3019, as amended,
committed as follows:
That during the period from February 1989 to February 1991
and subsequent thereto, in the Municipality of Jimalalud,
Negros Oriental, and within the jurisdiction of this Honorable
Court, accused, all public officers, Mayor REYNALDO V.
TUANDA, Vice-Mayor HERMINIGILDO G. FABURADA,
Sangguniang Members MANUEL LIM, NICANOR P. AGOSTO,
Page 259 of 304
ERENIETA K. MENDOZA, MAXIMO A. VIERNES. HACUBINA V.
SERILLO, ILUMINADO D. ESTRELLANES and SANTOS A.
VILLANUEVA while in the performance of their official functions
and taking advantage of their public positions, with evident
bad faith, manifest partiality, and conspiring and confederating
with each other did, then and there, willfully and unlawfully
cause undue injury to Sectoral Members Bartolome M.
Binaohan and Delia T. Estrellanes by refusing to pay despite
demand the amount of NINETY FIVE THOUSAND THREE
HUNDRED FIFTY PESOS (P95,350.00) and ONE HUNDRED
EIGHT THOUSAND NINE HUNDRED PESOS (P 108,900.00)
representing respectively their per diems, salaries and other
privileges and benefits, and such undue injury continuing to
the present to the prejudice and damage of Bartolome
Binaohan and Delia Estrellanes.
CONTRARY TO LAW. 1
On 9 September 1991, petitioners filed a motion with the
Sandiganbayan for suspension of the proceedings in Criminal
Case No. 16936 on the ground that a prejudicial question
exists in Civil Case No. 9955 pending before the Regional Trial
Court of Dumaguete City. 2
On 16 January 1992, the Regional Trial Court rendered a
decision declaring, null and void ab initio the designations
issued by the Department of Local Government to the private
respondents as sectoral representatives for having been done
in violation of Section 146 (2) of B.P. Blg. 337. otherwise
known as the Local Government Code. 3
The trial court expounded thus:
The Supreme Court in the case of Johnny D. Supangan Jr. v.
Luis T. Santos, et al., G.R. No. 84663, along with 7 companion
cases of similar import, (G. R. Nos. 05012, 87601, 87602,
87792, 87935, 88O72, and 90205) all promulgated on August
24. 1990. ruled that:
B.P. Blg. 337 explicitly required that before the President (or
the Secretary of the Department of Local Government) may
appoint members of the local legislative bodies to represent
the Industrial and Agricultural Labor Sectors, there must be a
determination to be made by the Sangguniang itself that the
said sectors are of sufficient number in the city or municipality
to warrant representation after consultation with associations
and persons belonging to the sector concerned.
The Supreme Court further ruled -
For that matter, the Implementing Rules and Regulations of
the Local Government Code even prescribe the time and
manner by which such. determination is to be conducted by
the Sanggunian.
Consequently, in cases where the Sanggunian concerned has
not yet determined that the Industrial and Agricultural Labor
Sectors in their particular city or municipality are of sufficient
number to warrant representation, there will absolutely be no
basis for the designation/appointments.
In the process of such inquiry as to the sufficiency in number
of the sector concerned to warrant representation, the
Sangguniang is enjoined by law (B.P. Blg. 337) to consult with
associations and persons belonging to the sector concerned.
Consultation with the sector concerned is made a pre-requisite.
This is so considering that those who belong to the said sector
are the ones primarily interested in being represented in the
Sanggunian. In the same aforecited case, the Supreme Court
considers such prior determination by the Sangguniang itself
(not by any other person or body) as a condition sine qua non
to a valid appointment or designation.
Since in the present case, there was total absence of the
required prior determination by the Sangguniang Bayan of
Jimalalud, this Court cannot help but declare the designations
of private defendants as sectoral representatives null and void.
This verdict is not without precedence. In several similar cases,
the Supreme Court invariably nullified the designations where
the requirements of Sec . 146 (2), B. P. Blg. 337 were not
complied with. Just to cite one case. the Supreme Court ruled:
There is no certification from the Sangguniang Bayan of
Valenzuela that the sectors concerned are of sufficient number
to warrant representation and there was no consultation
whatsoever with the associations and persons belonging to the
Industrial and Agricultural Labor Sectors. Therefore, the
appointment of private respondents Romeo F. Bularan and
Rafael Cortez are null and void (Romeo Llanado, et al. v. Hon.
Luis Santos, et al.. G.R. No. 86394, August 24, 1990). 4
Private respondents appealed the aforestated decision to the
Court of Appeals, docketed as CA-G.R. CV No. 36769, where
the same is currently pending resolution.
Meanwhile, on 17 February 1992, respondent Sandiganbayan
issued a resolution denying the motion for suspension of
proceedings filed by petitioners. Said respondent
Sandiganbayan:
Despite the pendency of Civil Case No. 9955 of the Regional
Trial Court of Negros Oriental, it appears, nevertheless, that
the private complainants have been rendering services on the
basis of their respective appointments as sectoral members of
the Sangguniang Bayan of the Municipality of Jimalalud,
Negros Oriental, and that their said appointments enjoy the
presumption of regularity. Having rendered such services, the
private complainants are entitled to the salaries attached to
their office. Even assuming arguendo that the said Regional
Page 260 of 304
Trial Court shall later decide that the said appointments of the
private complainants are null and void, still the private
complainants are entitled to their salaries and compensation
for service they have actually rendered, for the reason that
before such judicial declaration of nullity, the private
complainants are considered at least de facto public officers
acting as such on the basis of apparently valid appointments
issued by competent authorities. In other words, regardless of
the decision that may be rendered in Civil Case No. 9955, the
private complainants are entitled to their withheld salaries for
the services they have actually rendered as sectoral
representatives of the said Sangguniang Bayan. Hence, the
decision that may be rendered by the Regional Trial Court in
Civil Case No. 9955 would not be determinative of the
innocence or guilt of the accused.
WHEREFORE, the subject Petition for the Suspension of
Proceedings in Virtue of Prejudicial Question filed by the
accused through counsel, is hereby DENIED for lack of merit .
SO ORDERED. 5
Petitioners filed a motion for reconsideration of the
aforementioned resolution in view of the decision promulgated
by the trial court nullifying the appointments of private
respondents but it was, likewise, denied in an order issued by
respondent Sandiganbayan on 19 August 1992 on the
justification that the grounds stated in the said motion were a
mere rehash of petitioners' original motion to hold the case in
abeyance. 6 The dispositive portion of its order reads as
follows:
WHEREFORE, in view of the foregoing, the arraignment of the
accused which was scheduled today is cancelled. Mayor
Reynaldo Tuanda. Hermenegildo Faburada. Nicanor P. Agosto,
Erenieta K. Mendoza, Hacubina V. Serillo and Iluminado
Estrellanes are, however, hereby ordered to show cause in
writing within ten (10) days from service hereof why they
should not be cited for contempt of court for their failure to
appear in court today for arraignment.
In case of an adverse resolution on the motion to quash which
is to be filed by the counsel for the defense, set this case for
arraignment, pre-trial and trial on January 4 & 5, 1993, on all
dates the trial to start at 8:30 o'clock in the morning.
SO ORDERED 7
On 19 February 1993, respondent Sandiganbayan issued an
order holding consideration of all incidents pending the
issuance of an extended resolution. 8
No such resolution, however, was issued and in its assailed
order dated 13 May 1992, respondent Sandiganbayan set the
arraignment of petitioners on 30 June 1993. The dispositive
portion of the order reads:
WHEREFORE, considering the absence of the accused from the
scheduled hearing today which We deem to be excusable,
reset this case for arraignment on June 30, 1993 and for trial
on the merits on June 30 and July 1 and 2, 1993, on all dates
the trial to start at 8:30 o'clock in the morning.
Give proper notice to the accused and principal counsel, Atty.
Alfonso Briones. Considering that the accused come all the way
from Himalalud, Negros Oriental, no postponement will be
allowed.
SO ORDERED. 9 Hence, this special civil action for certiorari
and prohibition where petitioners attribute to respondent
Sandiganbayan the following errors.
A. The Respondent Court committed grave abuse of discretion
in denying petitioners' motions for the suspension of the
proceedings in Criminal Case No. 16936 in spite of the
pendency of a prejudicial issue before the Court of Appeals. in
CA-G.R. CV No. 36769;
B. The Respondent Court acted without or in excess of
jurisdiction in refusing to suspend the proceedings that would
entail a retrial and rehearing by it of the basic issue involved,
i.e., the validity of the appointments of private respondents
and their entitlement to compensation which is already
pending resolution by the Court of Appeals in C.A. G.R. CV No.
36769; and
C. The Respondent Court committed grave abuse of discretion
and/or acted without or in excess of jurisdiction in effectively
allowing petitioners to be prosecuted under two alternative
theories that private respondents are de jure and/or de facto
officers in violation of .petitioners' right to due process. 10
In sum, the only issue in the case at bench is whether or not
the legality or validity of private respondents' designation as
sectoral representatives which is pending resolution in CA-G. R.
No. 36769 is a suspension of the prejudicial question justifying
proceedings in the criminal case against petitioners.
A prejudicial question is one that must because prosecution
may be decided before any criminal prosecution may be
instituted or before it may proceed (see Art. 36 Civil Code)
because a decision on that point is vital to the eventual
judgment in the criminal case. Thus, the resolution of the
prejudicial question is a logical antecedent of the issues
involved in said criminal case. 11
A prejudicial question is defined as that which arises in a case
the resolution of which is a logical antecedent of the issue
involved therein, and the cognizance of which pertains to
another tribunal. The prejudicial question must be
Page 261 of 304
determinative of the case before the court but the jurisdiction
to try and resolve the question must be lodged in another
court of tribunal. 12 It is a question based on a fact distinct
and separate from "the crime but so intimately connected with
it that it determines the guilt or innocence of the accused, and
for it to suspend the criminal action, it must appear not only
that said case involves facts intimately related to those upon
which the criminal prosecution would be based but also that in
the resolution of the issue or issues raised in the civil case, the
guilt or innocence of the accused would necessarily be
determined. It comes into play generally in a situation where a
civil action and a criminal action are both pending and there
exists in the former an issue which must be preemptively
resolved before the criminal action may proceed, because
howsoever the issue raised in the civil action is resolved would
be determinative juris et de jure of the guilt or innocence of
the accused in the criminal case." 13
The rationale behind the principle of prejudicial question is to
avoid two conflicting decisions. 14 It has two essential
elements:
(a) the civil action involves an issue similar or intimately
related to the issue raised in the criminal action: and
(b) the resolution of such issue determines whether or not the
criminal action may proceed, 15
Applying the foregoing principles to the case at bench, we find
that the issue in the civil case, CA-G.R. CV No. 36769,
constitutes a valid prejudicial question to warrant suspension
of the arraignment and further proceedings in the criminal case
against petitioners.
All the elements of a prejudicial question are clearly and
unmistakably present in this case. There is no doubt that the
facts and issues involved in the civil action (No. 36769) and the
criminal case (No. 16936) are closely related. The filing of the
criminal case was premised on petitioners' alleged partiality
and evident bad faith is not paying private respondents'
salaries and per diems as sectoral representatives, while the
civil action was instituted precisely to resolve whether or not
the designations of private respondents as sectoral
representatives were made in accordance with law.
More importantly, the resolution of the civil case will certainly
determine if there will still be any reason to proceed with the
criminal action.
Petitioners were criminally charged under the Anti-Graft &
Corrupt Practices Act (RA 3019, sec. 3(e)) due to their refusal,
allegedly in bad faith and with manifest partiality, to pay
private respondents salaries as sectoral representatives. This
refusal, however, was anchored on petitioners' assertion that
said designations were made in violation of the Local
Government Code (B.P. Blg. 337) and thus, were null and void.
Therefore, should the Court of Appeals uphold the trial court's
decision declaring null and void private respondent's
designations as sectoral representatives for failure to comply
with the provisions of the Local Government Code (B.P. Blg.
337, sec. 146(2)), the charges against petitioners would no
longer, so to speak, have a leg to stand on. Petitioners cannot
be accused of bad faith and partiality there being in the first
place no obligation on their part to pay private respondents'
claims. Private respondents do not have any legal right to
demand salaries, per diems and other benefits. In other words,
the Court of Appeals' resolution of the issues raised in the civil
action will ultimately determine whether or not there is basis to
proceed with the criminal case.
Private respondents insist that even if their designations are
nullified, they are entitled to compensation for actual services
rendered. 16 We disagree. As found by the trial court and as
borne out by the records, from the start, private respondents
designations as sectoral representatives have been challenged
by petitioners. They began with a petition filed with the Office
of the President copies of which were received by private
respondents on 26 February 1989, barely eight (8) days after
they took their oath of office. 17 Hence, private respondents'
claim that they have actually rendered services as sectoral
representatives has not been established.
Finally, we find unmeritorious respondent Sandiganbayan 's
thesis that even in the event that private respondents'
designations are finally declared invalid, they may still be
considered de facto public officers entitled to compensation for
services actually rendered.
The conditions and elements of de facto officership are the
following:
1) There must be a de jure office;
2) There must be color of right or general acquiescence by the
public; and
3) There must be actual physical possession of the office in
good faith. 18
One can qualify as a de facto officer only if all the aforestated
elements are presents. There can be no de facto officer where
there is no de jure office although there may be a de facto
officer in a de jure office. 19
WHEREFORE, the resolution dated 17 February 1992 and
orders dated 19 August 1992 and 13 May 1993 of respondent
Sandiganbayan in Criminal Case No. 16936 are hereby SET
ASIDE. Respondent Sandiganbayan is enjoined from
proceeding with the arraignment and trial of petitioners in
Criminal Case No. 16936 pending final resolution of CA-G.R. CV
Page 262 of 304
No. 36769.
SO ORDERED.
Beltran vs People
MEYNARDO L. BELTRAN, petitioner, vs. PEOPLE OF THE
PHILIPPINES, and HON. JUDGE FLORENTINO TUAZON,
JR., being the Judge of the RTC, Brach 139, Makati City,
respondents.
BUENA, J.:
 
This petition for review, filed under Rule 45 of the 1997 Rules
of Civil Procedure, seeks to review and set aside the Order
dated January 28, 1999 issued by Judge Florentino A. Tuazon,
Jr. of the Regional Trial Court of Makati City, Branch 139 in
Special Civil Case No. 98-3056, entitled "Meynardo Beltran vs.
People of the Philippines and Hon. Judge Alden Cervantes of
the Metropolitan Trial Court of Makati City, Branch 61." The
said Order denied petitioner's prayer for the issuance of a writ
of preliminary injunction to enjoin Judge Cervantes from
proceeding with the trial of Criminal Case No. 236176, a
concubinage case against petitioner on the ground that the
pending petition for declaration of nullity of marriage filed by
petitioner against his wife constitutes a prejudicial question.
The antecedent facts of the case are undisputed:
Petitioner Meynardo Beltran and wife Charmaine E. Felix were
married on June 16, 1973 at the Immaculate Concepcion
Parish Church in Cubao, Quezon City.1
 
On February 7, 1997, after twenty-four years of marriage and
four children,2 petitioner filed a petition for nullity of marriage
on the ground of psychological incapacity under Article 36 of
the Family Code before Branch 87 of the Regional Trial Court
of Quezon City. The case was docketed as Civil Case No. Q-97-
30192.3
 
In her Answer to the said petition, petitioner's wife Charmaine
Felix alleged that it was petitioner who abandoned the conjugal
home and lived with a certain woman named Milagros
Salting.4 Charmaine subsequently filed a criminal complaint for
concubinage5 under Article 334 of the Revised Penal Code
against petitioner and his paramour before the City
Prosecutor's Office of Makati who, in a Resolution dated
September 16, 1997, found probable cause and ordered the
filing of an Information6 against them. The case, docketed as
Criminal Case No. 236176, was filed before the Metropolitan
Trial Court of Makati City, Branch 61.
On March 20, 1998, petitioner, in order to forestall the
issuance of a warrant for his arrest, filed a Motion to Defer
Proceedings Including the Issuance of the Warrant of Arrest in
the criminal case. Petitioner argued that the pendency of the
civil case for declaration of nullity of his marriage posed a
prejudicial question to the determination of the criminal case.
Judge Alden Vasquez Cervantes denied the foregoing motion in
the Order7 dated August 31, 1998. Petitioner's motion for
reconsideration of the said Order of denial was likewise denied
in an Order dated December 9, 1998.
 
In view of the denial of his motion to defer the proceedings in
the concubinage case, petitioner went to the Regional Trial
Court of Makati City, Branch 139 on certiorari, questioning the
Orders dated August 31, 1998 and December 9, 1998 issued
by Judge Cervantes and praying for the issuance of a writ of
preliminary injunction.8 In an Order9 dated January 28, 1999,
the Regional Trial Court of Makati denied the petition
for certiorari. Said Court subsequently issued another
Order 10 dated February 23, 1999, denying his motion for
reconsideration of the dismissal of his petition.
Undaunted, petitioner filed the instant petition for review.
Petitioner contends that the pendency of the petition for
declaration of nullity of his marriage based on psychological
incapacity under Article 36 of the Family Code is a prejudicial
question that should merit the suspension of the criminal case
for concubinage filed against him by his wife.
 
Petitioner also contends that there is a possibility that two
conflicting decisions might result from the civil case for
annulment of marriage and the criminal case for concubinage.
In the civil case, the trial court might declare the marriage as
valid by dismissing petitioner's complaint but in the criminal
case, the trial court might acquit petitioner because the
evidence shows that his marriage is void on ground of
psychological incapacity. Petitioner submits that the possible
conflict of the courts' ruling regarding petitioner's marriage can
be avoided, if the criminal case will be suspended, until the
court rules on the validity of marriage; that if petitioner's
marriage is declared void by reason of psychological incapacity
then by reason of the arguments submitted in the subject
Page 263 of 304
petition, his marriage has never existed; and that, accordingly,
petitioner could not be convicted in the criminal case because
he was never before a married man.
 
Petitioner's contentions are untenable.
The rationale behind the principle of prejudicial question is to
avoid two conflicting decisions. It has two essential elements:
(a) the civil action involves an issue similar or intimately
related to the issue raised in the criminal action; and (b) the
resolution of such issue determines whether or not the criminal
action may proceed. 11
 
The pendency of the case for declaration of nullity of
petitioner's marriage is not a prejudicial question to the
concubinage case. For a civil case to be considered prejudicial
to a criminal action as to cause the suspension of the latter
pending the final determination of the civil case, it must appear
not only that the said civil case involves the same facts upon
which the criminal prosecution would be based, but also that in
the resolution of the issue or issues raised in the aforesaid civil
action, the guilt or innocence of the accused would necessarily
be determined.
 
Art. 40 of the Family Code provides:
 
The absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment
declaring such previous marriage void.
In Domingo vs. Court of Appeals, 12 this Court ruled that the
import of said provision is that for purposes of remarriage, the
only legally acceptable basis for declaring a previous marriage
an absolute nullity is a final judgment declaring such previous
marriage void, whereas, for purposes of other than remarriage,
other evidence is acceptable. The pertinent portions of said
Decision read:
. . . Undoubtedly, one can conceive of other instances where a
party might well invoke the absolute nullity of a previous
marriage for purposes other than remarriage, such as in case
of an action for liquidation, partition, distribution and
separation of property between the erstwhile spouses, as well
as an action for the custody and support of their common
children and the delivery of the latter's presumptive legitimes.
In such cases, evidence needs must be adduced, testimonial or
documentary, to prove the existence of grounds rendering
such a previous marriage an absolute nullity. These needs not
be limited solely to an earlier final judgment of a court
declaring such previous marriage void.
So that in a case for concubinage, the accused, like the herein
petitioner need not present a final judgment declaring his
marriage void for he can adduce evidence in the criminal case
of the nullity of his marriage other than proof of a final
judgment declaring his marriage void.
 
With regard to petitioner's argument that he could be acquitted
of the charge of concubinage should his marriage be declared
null and void, suffice it to state that even a subsequent
pronouncement that his marriage is void from the beginning is
not a defense.
 
Analogous to this case is that of Landicho vs. Relova 13 cited
in Donato vs. Luna 14 where this Court held that:
 
. . . Assuming that the first marriage was null and void on the
ground alleged by petitioner, that fact would not be material to
the outcome of the criminal case. Parties to the marriage
should not be permitted to judge for themselves its nullity, for
the same must be submitted to the judgment of the competent
courts and only when the nullity of the marriage is so declared
can it be held as void, and so long as there is no such
declaration the presumption is that the marriage exists.
Therefore, he who contracts a second marriage before the
judicial declaration of nullity of the first marriage assumes the
risk of being prosecuted for bigamy.
Thus, in the case at bar it must also be held that parties to the
marriage should not be permitted to judge for themselves its
nullity, for the same must be submitted to the judgment of the
competent courts and only when the nullity of the marriage is
so declared can it be held as void, and so long as there is no
such declaration the presumption is that the marriage exists
for all intents and purposes. Therefore, he who cohabits with a
woman not his wife before the judicial declaration of nullity of
the marriage assumes the risk of being prosecuted for
concubinage. The lower court therefore, has not erred in
affirming the Orders of the judge of the Metropolitan Trial
Court ruling that pendency of a civil action for nullity of
Page 264 of 304
marriage does not pose a prejudicial question in a criminal
case for concubinage.
 
WHEREFORE, for lack of merit, the instant petition is
DISMISSED.
SO ORDERED.
Pasi vs Lichuaco
PHILIPPINE AGILA SATELLITE INC. and MICHAELC. U.
DE GUZMAN, Complainants, versus JOSEFINA
TRINIDAD-LICHAUCO, Undersecretary for
Communications, Department of Transportation and
Communication (DOTC), Respondents.
Tinga, J.:  launching, operation and management of its satellites,
This Petition for Review on Certiorari seeks the reversal of the
Decision [1] dated 21 February 2000 of the Court of Appeals in
C.A. G.R. No. SP 49422. The assailed Decision authorized the
dismissal of a civil complaint against respondent Josefina
Trinidad-Lichauco (Lichauco), former Undersecretary for
Communications of the Department of Transportation and
Communication (DOTC), on the premise that the complaint
constituted a suit against the State.  the prior assignment to PASI of the said slot. [7] It was later
A brief rundown of the relevant facts is in order. 
Petitioner Philippine Agila Satellite Inc. (PASI) is a duly
organized corporation, whose President and Chief Executive
Officer is co-petitioner Michael C.U. De Guzman. PASI was
established by a consortium of private telecommunications
carriers [2] which in 1994 had entered into a Memorandum of
Understanding (MOU) with the DOTC, through its then
Secretary Jesus Garcia, concerning the planned launch of a
Philippine-owned satellite into outer space. Under the MOU,
the launch of the satellite was to be an endeavor of the private
sector, and the satellite itself to be owned by the Filipino-
owned consortium (subsequently organized as PASI). [3] The
consortium was to grant the Philippine government one (1)
transponder free of charge for the government's exclusive use
for non-commercial purpose, as well as the right of first refusal
to another one (1) transponder in the Philippine satellite, if
available. [4] The Philippine government, through the DOTC,
was tasked under the MOU to secure from the International
Telecommunication Union the required orbital slot(s) and
frequency assignment(s) for the Philippine satellite. 
PASI itself was organized by the consortium in 1996. The
government, together with PASI, coordinated through the
International Telecommunication Union two (2) orbital slots,
designated as 161º East Longitude and 153º East Longitude,
for Philippine satellites. On 28 June 1996, PASI wrote then
DOTC Secretary Amado S. Lagdameo, Jr., seeking for official
Philippine government confirmation on the assignment of the
two aforementioned Philippine orbital slots to PASI for its
satellites, which PASI had designated as the Agila satellites. [5]
Secretary Lagdameo, Jr. replied in a letter dated 3 July 1996,
confirming "the Philippine Government's assignment of
Philippine orbital slots 161E and 153E to [PASI] for its [Agila]
satellites." [6] 
PASI avers that after having secured the confirmation from the
Philippine government, it proceeded with preparations for the
including the availment of loans, the increase in its capital,
negotiation with business partners, and an initial payment of
US$3.5 Million to the French satellite manufacturer. However,
respondent Lichauco, then DOTC Undersecretary for
Communications, allegedly "embarked on a crusade to malign
the name of [Michael de Guzman] and sabotage the business
of PASI." Lichauco's purported efforts against PASI culminated
allegedly in her offering orbital slot 153º East Longitude for
bidding to other parties sometime in December 1997, despite
claimed by PASI that Lichauco subsequently awarded the
orbital slot to an entity whose indentity was unknown to PASI.
[8] 
Aggrieved by Lichauco's actions, PASI and De Guzman
instituted on 23 January 1998 a civil complaint against
Lichauco, by then the Acting Secretary of the DOTC, and the
"Unknown Awardee" who was to be the recipient of orbital slot
153º East Longitude. The complaint, alleging three (3) causes
of action, was for injunction, declaration of nullity of award,
and damages. The first cause of action, for injunction, sought
to establish that the award of orbital slot 153º East Longitude
should be enjoined since the DOTC had previously assigned
the same orbital slot to PASI. The second cause of action, for
declaration of nullity of award, averred that the award to the
unknown bidder is null and void, as it was rendered by
Lichauco beyond her authority. [9] 
The third cause of action, for damages, imputed several acts to
Lichauco as part of her alleged "crusade" to malign the name
of plaintiff [D]e Guzman and sabotage the business of [PASI]: 
Page 265 of 304
12. xxx  (f) In December 1997, defendant Lichauco delivered the coup
de' grace. Again, acting unilaterally, without prior notice to
plaintiff corporation and in gross violation of DOTC's earlier
assignment to plaintiff corporation of orbital slot 153 E,
(a) On 4 December 1996, in a meeting with the members of
defendant Lichauco offered said slot to interested applicants. A
the Board of Directors of plaintiff corporation, defendant
copy of the notice of offer is attached as Annex F. 
Lichauco then uttered disparaging and defamatory comments
against plaintiff de Guzman. These defamatory remarks
triggered efforts from within the plaintiff corporation aimed at
ousting plaintiff de Guzman from his position.  13. Plaintiffs learned of defendant Lichauco's acts after orbital
slot 153 E was offered for bidding. To plaintiff coproration's
knowledge, the orbital slot was eventually awarded to
defendant Unknown Awardee. 
(b) Defendant Lichauco, then an undersecretary of DOTC,
wrote Mr. Jesli Lapuz on 5 December 1996 (barely two days
after plaintiff de Guzman wrote him) to deny that the DOTC
has assigned the two (2) Philippine orbital slots to plaintiff x x x x [10] 
corporation. Defendant Lichauco falsely asserted that only
orbital slot 161 E was assigned to plaintiff, orbital slot 153 E
was not. 
The complaint alleged that since Lichauco's act of offering and
awarding orbital slot 153º East Longitude was patently illegal
and violative of DOTC's prior commitment to PASI, Lichauco
In the same letter, defendant Lichauco branded as FALSE should be enjoined from performing any acts and entering into
plaintiff de Guzman's claim that "Agila" is a registered or executing any agreement or arrangement of whatever
corporate name of plaintiff corporation.  nature in connection with the said orbital slot. The complaint
also averred that the purported award of the orbital slot to the
"Unknown Awardee was illegal, and thus should be declared
null and void. Finally, the complaint alleged a cause of action
A copy of the letter is attached as Annex E. 
for damages against Lichauco, cast in the following manner: 

(c) Not contented, defendant Lichauco, again for reasons

x x x x 
known only to her, and with malice aforethought, made
defamatory remarks against plaintiffs during a
telecommunications forum held in Makati City sometime in
October 1997 in the presence of public officials and business 21. Defendant Lichauco attacked the good name and
executives.  reputation of plaintiffs. 

(d) Defendant Lichauco did not spare plaintiff corporation from 22. She willfully caused damage to plaintiffs by orchestrating
her unprovoked defamation. Defendant Lichauco arrogantly the above-described acts which are contrary to law; morals
said that she had asked President Fidel V. Ramos to sue and basic norms of good faith. 
plaintiff Michael de Guzman. With the same degree of
arrogance she threatened plaintiff corporation not to use the
name "Agila", otherwise she would fight plaintiff corporation
23. She interefered with and violated plaintiff corporation's
and would make sure that the name of Agila would never be
contract with DOTC by offering and awarding orbital slot 153 E
given back to plaintiff corporation. 
to defendant Unknown Awardee. 

(e) To top it all, defendant Lichauco without basis and with

24. Because of defendant Lichauco's reprehensible acts,
evident bad faith, said that plaintiff corporation will never pay
plaintiffs suffered actual damages of at least P10 million each,
its contractors. 

Page 266 of 304

for all of which defendant Lichauco should be held liable to
pay.  award of orbital slot 153 E to defendant Unknown Awardee
25. By reason of defendant Lichauco's illegal and malicious
acts, plaintiff corporation's business name and goodwill was
tarnished, for which plaintiff corporation should be indemnified
by way of moral damages in the amount of at least P10
million. 
26. For the same reasons, plaintiff de Guzman suffered and
continue to suffer extreme mental anguish, serious anxiety,
wounded feelings, moral shock and besmirched reputation, for
all of which plaintiff de Guzman should be indemnified in the
amount of at least P10 million. 
27. Defendant Lichauco should also be sanctioned, as a
deterrent for public good, to pay each plaintiff exemplary
damages in the amount of at least P5 million.  x x x x [12]
28. In order to protect and enforce their rights, plaintiffs were
compelled to institute this suit, engage the services of counsel
and incur litigation expenses, for all of which plaintiffs should
be indemnified in the amount of at least P500 Thousand each.
[11]  with the complaint on 28 January 1998. Lichauco failed to file
x x x x 
In sum, petitioners sought the following reliefs for the three
(3) causes of action:  against the State which may not be sued without its consent;
x x x x 
3. After trial of the issues, render judgment as follows: 
[a] On the first cause of action, making permanent the writ of
preliminary injunction;  accorded enormous (sic) opportunity to argue for the
[b] On the second cause of action, declaring the offer and
null and void. 
[c] On the third cause of action, directing defendant Lichauco
to pay the following sums: 
i. P10 million each to plaintiffs as actual damages; 
ii. P10 million to plaintiff corporation as moral damages; 
iii. P10 million to plaintiff de Guzman as moral damages; 
iv. P5 million each to plaintiffs as exemplary damages; 
v. P500 Thousand each to plaintiffs as attorney's fees and
litigation expenses. 
 
The complaint was filed before the Regional Trial Court (RTC)
of Mandaluyong City, and subsequently raffled to Branch 214.
On 2 February 1998, the RTC issued a temporary restraining
order against Lichauco, who received the summons together
an answer within the reglementary period, but eight (8) days
after the lapse thereof, she filed a Manifestation and Motion
asking for a new five (5)-day period, or until 25 February 1998,
to file a responsive pleading to the complaint. However, she
filed instead a Motion to Admit with attached Motion to Dismiss
on 27 February 1998. She rooted her prayer for the dismissal
of the complaint primarily on the grounds that the suit is a suit
that the complaint stated no cause of action; and that the
petitioners had failed to exhaust administrative remedies by
failing to seek recourse with the Office of the President. 
In an order [13] dated 14 August 1998, the RTC denied the
motion to dismiss. It characterized the defense of state
immunity as "at very least a contentious issue which can not
be resolved by mere allegations in the pleadings but which can
be best threshed out in a litig[i]ous forum where parties are
ascertainment of whether the act complained of are indeed
within the parameters and prerogatives of the authority
exercising the same." [14] The RTC also noted that the
allegations in the complaint regarding the ultimate facts
sufficiently presented an ultra vires  act of Lichauco, and that
Page 267 of 304
she was being sued in her personal capacity. As to the
argument pertaining to the non-exhaustion of administrative
remedies, the RTC noted that the principle is not an inflexible Being an official act, it is also protected by the presumption
rule, and may be dispensed with when its application would that the same was performed in good faith and in the regular
cause great and irreparable damage or when it would not performance of official duty. 
constitute a plain, speedy and adequate remedy. [15] 

"Acts in Line of Duty or under Color of Authority. - As a

Lichauco assailed the RTC order through a Petition for rule, a public officer, whether judicial, quasi-judicial, or
Certiorari under Rule 65 before the Court of Appeals, which executive, is not personally liable to one injured in
subsequently nullified the RTC order in the Decision now consequence of an act performed within the scope of his
assailed before us. The Court of Appeals sustained the official authority, and in the line of his official duty. In order
contention that the complaint is a suit against the State with that acts may be done within the scope of official authority, it
the following ratiocination:  is not necessary that they be prescribed by statute, or even
that they be specifically directed or requested by a superior
officer, but it is sufficient if they are done by an officer in
relation to matters committed by law to his control or
The suit is to the mind of this court a suit against the state.  supervision, or that they have more or less connection with
such matters, or that they are governed by a lawful
requirement of the department under whose authority the
officer is acting. Under this principle, state building
The notice of offer signed by herein petitioner allegedly tainted
commissioners who, in obedience to a stature, discharge one
with bad faith was done in the exercise of and in pursuance of
who has been employed to construct a state building, take
an official duty. Her duties are as follows: 
possession of the work, and place it in the hands of another
contractor, are not liable to the former contractor in damages,
since in so doing they are merely acting in the line of their
SEC. 10. Powers and Duties of the Undersecretary. The duty. An officer is not personally responsible for the necessary
Undersecretary shall:  and unavoidable destruction of goods stored in buildings, when
such buildings were destroyed by him in the lawful
performance of a public duty imposed on him by a valid and
constitutional statute." 
(1) Advise and assist the Secretary in the formulation and
implementation of department objectives and policies; 

x x x x x x x x x 

(2) Oversee all the operational activities of the department for

which he shall be responsible to the Secretary; 
Error or Mistake in Exercise of Authority. - Where an
officer is invested with discretion and is empowered to exercise
his judgment in matters brought before him he is sometimes
(3) Coordinate the programs and projects of the department
called a quasi-judicial officer, and when so acting he is usually
and be responsible for its economical, efficient and effective
given immunity from liability to persons who may be injured as
administration: 
the result of an erroneous or mistaken decision, however,
erroneous judgment may be, provided the acts complained of
are done within the scope of the officer's authority, and
x x x x x x x x x  without willfulness, malice, or corruption." (43 Am. Jur., pp.
85-86). 

It is apparent from the above enumeration that the petitioner

is directly under and answerable to the DOTC Secretary. We In Sanders vs. Veridiano  [[16]], the Supreme Court held: 
can therefore conclude that her official acts such as the said
"notice of offer" was with the blessing and prior approval of
the DOTC Secretary himself. 
"Given the official character of the above-described letters, we
have to conclude that the petitioners were, legally speaking,
Page 268 of 304
being sued as officers of the United States government. As
they have acted on behalf of that government, and within the
scope of their authority, it is that government and not the
petitioners personally, that is responsible for their acts.
Assuming that the trial can proceed and it is proved that the
claimants have a right to the payment of damages, such award
will have to be satisfied not by the petitioners in their personal
capacities but by the United States government as their
principal. This will require that government, viz.: the
appropriation of the necessary amount to cover the damages
awarded, thus making the action a suit against that
government without its consent.  should be remembered that unlike in an ordinary appeal that is
There should be no question by now that such complaint
cannot prosper unless the government sought to be held
ultimately liable has given its consent to be sued. So we have
ruled not only in Baer but in many other decisions where we
upheld the doctrine of state immunity as applicable not only to
our own government but also to foreign States sought to be
subjected to the jurisdiction of our courts. 
x x x x x x x x x 
The Court finds that, even under the law of public officers, the
acts of the petitioners are protected by the presumption of
good faith, which has not been overturned by the private
respondents. Even mistakes concededly committed by such
public officers are not actionable as long as it is not shown that
they were motivated by malice or gross negligence amounting
to bad faith. This too is well-settled." [17]  justifiable under Section 3, Rule 46, and generally such action
Preliminarily, we discuss the procedural grounds cited by
petitioners which they assert are sufficient to have caused the
dismissal of Lichauco's petition before the Court of Appeals.
Petitioners claim that contrary to Section 1, Rule 65 of the
1997 Rules of Civil Procedure, Lichauco failed to attach all
pleadings and documents relevant to her petition, and that
those that were attached were merely "duplicate original
copies." Lichauco counters that for the viability of her petition
for certiorari, all that she needed to attach were her motion to
dismiss, the RTC orders acting on such motion, her motion for
reconsideration of the denial of her motion to dismiss, and
petitioners' opposition to said motion for reconsideration. She
claims that only these motions and submission were relevant
to the resolution of her petition. [18]  Court of Appeals, an oversight sadly ignored by the appellate
In her comment, Lichaucho claims that she did not have to
attach the complaint to the copy of the petition she sent to the
petitioners herein, since the latter obviously retained the
original copy of the complaint they filed. [19] However, her
petition before the appellate court does not indicate that the
same complaint was included as an attachment, and indeed,
there is a curious absence of any averment on Lichuaco's part
that she indeed attached the said complaint to her petition.
[20] Certainly, in a petition for certiorari assailing the denial of
a motion to dismiss a complaint, the very complaint itself is a
document relevant and pertinent to the special civil action. It
given due course, [21] the case record is not automatically
elevated to the court exercising jurisdiction over a special civil
action for certiorari; hence there is an even more impelling
need to attach all pleadings and documents to the special civil
action, as mandated under Section 1, Rule 65 of the 1997
Rules of Civil Procedure. After all, how could the court a
quo  properly ascertain whether or not the motion to dismiss
itself should have been granted if it did not have a copy of the
complaint sought to be dismissed itself. 
Nonetheless, the requirement to attach such relevant pleadings
under Section 1, Rule 65 is read in relation to Section 3, Rule
46, which states that the failure of the petitioner to comply
with any of the documentary requirements, such as the
attachment of such relevant pleadings, "shall be sufficient
ground for the dismissal of the petition." The procedural rule
accords sufficient discretion to the court hearing the special
civil action whether or not to dismiss the petition outright for
failure to comply with said requirement. If the court does
dismiss the petition on that ground, the dismissal would be
of the court cannot be assailed as constituting either grave
abuse of discretion or reversible error of law. If the court, on
the other hand, takes cognizance of the petition despite such
lapses, the phrasing of Section 3, Rule 46 sufficiently justifies
such adjudicative recourse. Indeed, the ultimate logic behind
rules of procedure being the promotion of the objective of
securing a just, speedy and inexpensive disposition of every
action and proceeding, [22] the higher interests of justice may
at times sufficiently warrant the allowance of the petition for
certiorari despite such lapses, especially if they are nonetheless
correctible through subsequent submissions. 
In any event, the Court is willing to overlook Lichauco's failure
to attach the complaint in her petition for certiorari before the
court. There are weighty issues at hand relating to the doctrine
of state immunity from suit and the requisites of a motion to
dismiss. 
Page 269 of 304

There is a connective issue between these two aspects in that
if the State is sued without its consent, the corresponding suit
must be dismissed. At times, it would be teasingly obvious,
even from the moment of the filing of the complaint, that the
suit is one against the State. A cursory examination of the
caption of the complaint can sometimes betray such proscribed
intent, as when the suit is directly initiated against the Republic
of the Philippines, any foreign government, or an
unincorporated government agency as the named
respondents. In such cases, obviously there is need for
immediate caution, although if it is somehow established that
those respondents had given their consent to be sued, the suit
may nonetheless prosper.  legal presumptions are applicable. For example, the
The present action was denominated against Lichauco and the
unknown awardee, Lichauco was identified in the complaint as
"acting Secretary of the [DOTC]." [23] The hornbook rule is
that a suit for acts done in the performance of official functions
against an officer of the government by a private citizen which
would result in a charge against or financial liability to the
government must be regarded as a suit against the State itself,
although it has not been formally impleaded. [24] However,
government immunity from suit will not shield the public
official being sued if the government no longer has an interest
to protect in the outcome of a suit; or if the liability of the
officer is personal because it arises from a tortious act in the
performance of his/her duties.  to secure the outright dismissal of petitioners' complaint
Petitioner insists that Lichauco is being sued for her acts
committed in excess of her authority, ultra vires in nature, and
tortious in character. The Court of Appeals responded that
such acts fell within Lichauco's official duties as DOTC
Undersecretary, thus enjoying the presumption that they were
performed in good faith and in the regular performance of
official duty. This rationale is pure sophistry and must be
rejected outright.  first two causes of action stem from Lichauco's act of offering
We do not doubt the existence of the presumptions of "good
faith" or "regular performance of official duty", yet these
presumptions are disputable [25] and may be contradicted and
overcome by other evidence. [26] Many civil actions are
oriented towards overcoming any number of these
presumptions, and a cause of action can certainly be geared
towards such effect. The very purpose of trial is to allow a
party to present evidence overcome the disputable
presumptions involved. Otherwise, if trial is deemed irrelevant
or unnecessary, owing to the perceived indisputability of the
presumptions, the judicial exercise would be relegated to a
mere ascertainment of what presumptions apply in a given
case, nothing more. Consequently, the entire Rules of Court is
rendered as excess verbiage, save perhaps for the provisions
laying down the legal presumptions. 
If this reasoning of the Court of Appeals were ever adopted as
a jurisprudential rule, no public officer could ever be sued for
acts executed beyond their official functions or authority, or for
tortious conduct or behavior, since such acts would "enjoy the
presumption of good faith and in the regular performance of
official duty". Indeed, few civil actions of any nature would
ever reach the trial stage, if a case can be adjudicated by a
mere determination from the complaint or answer as to which
presumption that a person is innocent of a wrong is a
disputable presumption on the same level as that of the
regular performance of official duty. [27] A civil complaint for
damages necessarily alleges that the defendant committed a
wrongful act or omission that would serve as basis for the
award of damages. With the rationale of the Court of Appeals,
such complaint can be dismissed upon a motion to dismiss
solely on the ground that the presumption is that a person is
innocent of a wrong. 
So obviously, the Decision of the Court of Appeals cannot
receive the imprimatur of this Court. Still, the question of
whether Lichauco may validly invoke state immunity from suit
warrants closer examination. 
As earlier noted, the complaint alleges three (3) causes of
action against Lichauco: one for injunction against her
performing any act in relation to orbital slot 153º East
Longitude; one for declaration of nullity of award, seeking to
nullify the alleged award of orbital slot 153º East Longitude;
and one for damages against Lichauco herself. Evidently, the
orbital slot 153º East Longitude for bidding, through the Notice
of Offer which was attached to the complaint. 
In her Motion to Dismiss, Lichauco asserts that she is being
sued for issuing the aforementioned Notice of Offer, which fell
within her official functions as DOTC Undersecretary for
Communications. She claims that it was Secretary Lagdameo
who authorized her to offer orbital slot 153º East Longitude for
bidding, and she thus acted well within the scope of her
authority to advise and assist the DOTC Secretary in the
formulation and implementation of department objectives and
policies. 
Page 270 of 304

The Notice of Offer cites Department Circular 97-01, signed by
then DOTC Secretary Arturo Enrile, as authority for it. The
Court has examined the aforementioned Department Circular,
issued on 17 October 1997, which establishes the "Guidelines
on the Procurement of Orbital Slots and Frequency Registration
of Philippine Satellites". Therein, the DOTC is mandated "to
conduct a bidding process in case there are competing
applications for any one of the assigned or applied-for-orbital
slots" [28]. Further, the Department Circular states that "the
DOTC shall publish in three newspapers of general circulation a
notice of offer for the government assigned, initiated and
applied for orbital slots." [29]  and that, therefore, must consent to its being sued certainly is
Thus, insofar as the first two causes of action are concerned,
Lichauco may have a point when she asserts that they were
based on acts which she performed in her capacity as DOTC
Undersecretary. But does this necessarily mean that these two
causes of action may thus be dismissed on the basis of state
immunity of suit?  tainted with unconstitutionality." [32]
As stated earlier, it is when the acts done in the performance
of official functions by an officer of the government will result
in a charge against or financial liability to the government that
the complaint must be regarded as a suit against the State
itself. However, the distinction must also be raised between
where the government official concerned performs an act in
his/her official and jurisdictional capacity and where he
performs an act that constitutes grave abuse of discretion
tantamount to lack of jurisdiction. In the latter case, the
Constitution itself assures the availability of judicial review, and
it is the official concerned who should be impleaded as the
proper party- defendant or respondent. 
On this point, our ruling in J.M. Tuazon & Co. v. Land Tenure
Administration  [30] is material. Petitioners therein had filed a
special civil action for prohibition to nullify Republic Act No.
2616, or law that directed the expropriation of the Tatalon
Estate in Quezon City. Impleaded as respondents were the
officials and government agency tasked to undertake such
expropriation. The respondents alleged that the petition for
prohibition was actually a suit against the State without its
consent. The Court, through then Associate Justice (later Chief
Justice) Enrique Fernando, debunked the argument, ruling
instead that the petition was within the ambit of judicial
review:  causes of action cannot be properly considered as suits against
[T]he power of judicial review is granted, if not expressly, at
least by clear implication from the relevant provisions of the
Constitution. This power may be exercised when the party
adversely affected by either a legislative or executive act, or a
municipal ordinance for that matter, files the appropriate suit
to test its validity. The special civil action of prohibition has
been relied upon precisely to restrain the enforcement of what
is alleged to be an unconstitutional statute. As it is a
fundamental postulate that the Constitution as the supreme
law is binding on all governmental agencies, failure to observe
the limitations found therein furnishes a sufficient ground for a
declaration of nullity of the government measure challenged.
The argument then that the government is the adverse party
far from persuasive. x x x x [31] 
The Court further noted that it was well-settled for the purpose
of obtaining a judicial declaration of nullity, "it is enough if the
respondents or defendants named be the government officials
who would give operation and effect to official action allegedly
 
Unlike in J.M. Tuason, the case at bar does not seek to nullify
an unconstitutional law or measure. However, the first two
causes of action do sufficiently impute grave abuse of
discretion against Lichauco in her official capacity. Since
judicial review of acts alleged to have been tainted with grave
abuse of discretion is guaranteed by the Constitution, it
necessarily follows in such instances that it is the official
concerned who should be impleaded as defendant or
respondent in the appropriate suit. 
Moreover, if the suit had been directed against Lichauco alone,
and in her personal capacity, yet it sought, as it now does, the
nullification of the Notice of Offer or the awards thereon, such
remedy could not avail even if granted. Lichauco, in her
personal capacity, cannot be directed to set aside the Notice of
Offer, the award of the bid, or to issue a new award herself. It
is only because Lichauco was sued in her official capacity as
the DOTC Undersecretary that she, or her successors in office,
could be judicially compelled to act in such fashion. 
As to the first two (2) causes of action, the Court rules that the
defense of state immunity from suit do not apply since said
the State in constitutional contemplation. These causes of
action do not seek to impose a charge or financial liability
against the State, but merely the nullification of state action.
The prayers attached to these two causes of action are for the
Page 271 of 304
revocation of the Notice of Bid and the nullification of the
purported award, nothing more. Had it been so that petitioner
additionally sought damages in relation to said causes of
action, the suit would have been considered as one against the
State. Had the petitioner impleaded the DOTC itself, an
unincorporated government agency, and not Lichauco herself,
the suit would have been considered as one against the State.
But neither circumstance obtains in this case. 
Parenthetically, it may be noted that at the time of the filing of
the complaint, Lichauco herself was already the acting head of
the DOTC, owing to the sudden death of then Secretary Enrile
a few days before. At that stage, any suit seeking to nullify the
Notice of Bid and the alleged award to the "Unknown Bidder"
should have properly denominated Lichauco as the respondent,
and not the DOTC. 
Nonetheless, as to the first two causes of action, there was a
viable ground to dismiss the complaint: the non-exhaustion of
administrative remedies. Indeed, such ground was alleged by
Lichauco in her Motion to Dismiss. Yet the principle of non-
exhaustion of administrative remedies admits to several
exceptions. In its Order denying the motion to dismiss the
complaint, the RTC adequately dispensed with the objection,
applying the established exceptions to the rule of non-
exhaustion of administrative remedies. To wit: 
Turning to the matter pertaining to non-exhaustion of
administrative remedies, it is fundamental that this principle is
not an inflexible rule. It yields to many accepted exceptions.
(Rocamora vs. RTC - Cebu, G.R. No. 65307). As in this case,
this principle can be dispensed with when its application would
cause great and irreparable damage and when it does not
provide a plain, speedy and adequate remedy.  rights have been invaded or violated by such acts, for
When the subject orbital slot 153 E was bidded out to other
applicants, the damage and injury plaintiffs stand to suffer was
clear, present, and substantiated that this Court was impelled
to provide urgent needed measure such as the issuance of writ
of injunction against the public defendant. Indeed, under the
circumstances then obtaining it was impractical for the
plaintiffs to first proceed to the administrative official
concerned before taking court action. [33] 
A different set of principles applies to the third cause of action,
anchored as it is on alleged acts that are tortious in character
or otherwise beyond the scope of Lichauco's official duties. The
complaint alleges that Lichauco uttered several disparaging
and defamatory remarks against petitioners and made false
assertions against them in her letter to the Land Bank
President. 
The veracity of those allegations is of course presented at the
trial to be determined on the basis of the evidence. However, if
proven, they would establish liability on the part of Lichauco
that is not shielded by the doctrine of state immunity from suit.
The doctrine, as summarized in Shauf v. Court of Appeals :
[34] 
While the doctrine appears to prohibit only suits against the
state without its consent, it is also applicable to complaints
filed against officials of the state for acts allegedly performed
by them in the discharge of their duties. The rule is that if the
judgment against such officials will require the state itself to
perform an affirmative act to satisfy the same, such as the
appropriation of the amount needed to pay the damages
awarded against them, the suit must be regarded as against
the state itself although it has not been formally impleaded. It
must be noted, however, that the rule is not so all-
encompassing as to be applicable under all circumstances. 
It is a different matter where the public official is made
to account in his capacity as such for acts contrary to
law and injurious to the rights of plaintiff. As was
clearly set forth by Justice Zaldivar in Director of the
Bureau of Telecommunications, et al. vs. Aligaen, etc.,
et al. 'Inasmuch as the State authorizes only legal acts
by its officers, unauthorized acts of government
officials or officers are not acts of the State, and an
action against the officials or officers by one whose
the protection of his rights, is not a suit against the
State within the rule of immunity of the State from
suit. In the same tenor, it has been said that an action at law
or suit in equity against a State officer or the director of a
State department on the ground that, while claiming to act for
the State, he violates or invades the personal and property
rights or the plaintiff, under an unconstitutional act or under an
assumption of authority which he does not have, is not a suit
against the State within the constitutional provision that the
State may not be sued without its consent.' The rationale for
this ruling is that the doctrine of state immunity cannot be
used as an instrument for perpetrating an injustice.[35] 
The doctrine poses no controversy if after trial on the merits, it
is established that the public official concerned had committed
Page 272 of 304
illegal or tortious acts against the plaintiff. How does it apply in
relation to a motion to dismiss on the ground of state immunity
from suit, necessarily lodged before trial on the merits? 
Our ruling in United States of America v. Reyes  [36] warrants
due consideration. The Court therein, through then Associate
Justice (later Chief Justice) Hilario G. Davide, Jr., ruled that a
motion to dismiss averring immunity from suit of a State and
its functionaries was actually grounded on the specific ground
for dismissal of the lack of cause of action, for even assuming
that the defendants had committed the injurious acts
complained of, "no action may be maintained thereon, because
of the principle of state immunity." [37] Pertinently, the Court
noted that "a motion to dismiss on the ground of failure to
state a cause of action hypothetically admits the truth of the
allegations in the complaint."  of preliminary injunction and/or issuance of status quo
Thus, Lichauco, in alleging in her Motion to Dismiss that she is
shielded by the State's immunity from suit, to hypothetically
admitted the truth of the allegations in the complaint. Such
hypothetical admission has to be deemed a concession on her
part that she had performed the tortious or damaging acts
against the petitioners, which if true, would hold her liable for
damages.  Property Group.
Of course, Lichauco could very well raise the defense of state
immunity from suit in regard to the third cause of action with
the assertion that the acts complained of constituting said
cause of action fell within her official functions and were not
tortuous in character. Still, to establish such assertions of fact,
a full-blown trial on the merits would be necessary, as would
the case be if Lichauco raised the defense that she did not
commit these acts complained of. Certainly, these defenses
cannot be accorded merit before trial, factual as they are in
character.  made by Spouses Mirabueno and Spouses Dimalanta to the
All told, contrary to the ruling of the Court of Appeals, we find
no grave abuse of discretion on the part of the RTC in denying
Lichauco's Motion to Dismiss.  for collection of sum of money, damages and attorney's fee
WHEREFORE, the PETITION is GRANTED. The Decision of the
Court of Appeals dated 21 February 2000 is SET ASIDE and the
Order dated 14 August 1998 of the Regional Trial Court of
Mandaluyong City is REINSTATED. The Regional Trial Court is
ordered to try and decide the case on the merits with
deliberate dispatch. No costs. 
SO ORDERED. 
Yap vs Caballes
JESSE Y. YAP, Petitioner,
vs.
HON. MONICO G. CABALES, Presiding Judge, Regional
Trial Court, Branch 35, General Santos City;
MUNICIPAL TRIAL COURT, Branch 1, General Santos
City; COURT OF APPEALS, PEOPLE OF THE
PHILIPPINES, JOVITA DIMALANTA and MERGYL
MIRABUENO, Respondents.
PERALTA,  J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court with prayer for the issuance of a writ
order seeking to annul and set aside the Resolution1 of the
Court of Appeals (CA) dated July 17, 2003 denying petitioner's
motion for reconsideration of the Decision2 dated April 30,
2003 in CA-G.R. SP No. 68250.
The facts of the case are as follows:
Petitioner Jesse Y. Yap and his spouse Bessie Yap are engaged
in the real estate business through their company Primetown
Sometime in 1996, petitioner purchased several real properties
from a certain Evelyn Te (Evelyn). In consideration of said
purchases, petitioner issued several Bank of the Philippine
Islands (BPI) postdated checks to Evelyn. Thereafter, spouses
Orlando and Mergyl Mirabueno and spouses Charlie and Jovita
Dimalanta, rediscounted the checks from Evelyn.
In the beginning, the first few checks were honored by the
bank, but in the early part of 1997, when the remaining checks
were deposited with the drawee bank, they were dishonored
for the reason that the "Account is Closed."  Demands were
petitioner to make good the checks. Despite this, however, the
latter failed to pay the amounts represented by the said
checks.
On December 8, 1997, Spouses Mirabueno filed a civil action
with prayer for the issuance of a writ of preliminary attachment
against petitioner before the Regional Trial Court (RTC) of
General Santos City, docketed as Civil Case No. 6231. 3 On
December 15, 1997, Spouses Dimalanta followed suit and
instituted a similar action, which was docketed as Civil Case
No. 6238.4
Subsequently, on various dates, the Office of the City
Prosecutor of General Santos City filed several informations for
violation of Batas Pambansa Bilang (B.P. Blg.) 22 against the
Page 273 of 304
petitioner with the Municipal Trial Court in Cities (MTCC),
General Santos City. The criminal complaints were docketed as
Criminal Case Nos. 34873, 34874, 34862 to 34869, and
Criminal Case No. 35522-I.5
In the criminal cases, petitioner filed separate motions to
suspend proceedings on account of the existence of a
prejudicial question and motion to exclude the private
prosecutor from participating in the proceedings.6 Petitioner
prayed that the proceedings in the criminal cases be
suspended until the civil cases pending before the RTC were
finally resolved.
The MTCC, in its Orders7 dated June 21, 2000 and July 4,
2000, denied the motions for lack of merit. Petitioner filed a
Partial Motion for Reconsideration8 relative to Criminal Case
Nos. 34873, 34874, 34862 to 34869 and a Motion for
Reconsideration of the Part of the Order Denying the Motion to
Suspend Proceedings on Account of the Existence of a
Prejudicial Question relative to Criminal Case No. 35522-I.9 The
subsequent motions were denied in the Order10 dated October
18, 2000.
Aggrieved, petitioner filed a Petition for Certiorari with a Prayer
for the Issuance of a Writ of Preliminary Injunction11 before the
RTC, docketed as SPL. Civil Case No. 539, imputing grave
abuse of discretion on the part of the MTCC Judge. On July 2,
2001, the RTC issued an Order12 denying the petition.
13
Petitioner then filed a Motion for Reconsideration,  which was
denied in an Order dated October 18, 2001.14
Thereafter, petitioner filed with the CA a Petition for Certiorari
Prohibition and Mandamus with Urgent Prayer for the Issuance
of Status Quo Order and Writ of Preliminary
Injunction,15 docketed as CA-G.R. SP No. 68250.
On April 30, 2003, the CA rendered a Decision16 dismissing the
petition for lack of merit. The CA opined that Civil Case Nos.
6231 and 6238 did not pose a prejudicial question to the
prosecution of the petitioner for violation of B.P. Blg. 22.
The CA ruled:
In the instant case, a careful perusal of Civil Cases Nos. 6231
and 6238 reveals that the issue involved therein is not the
validity of the sale as incorrectly pointed out by the petitioner,
but it is, whether or not the complainants therein are entitled
to collect from the petitioner the sum or the value of the
checks which they have rediscounted from Evelyn Te. It
behooves this Court to state that the sale and the
rediscounting of the checks are two transactions, separate and
distinct from each other. It so happened that in the subject
civil cases it is not the sale that is in question, but rather the
rediscounting of the checks. Therefore, petitioner's contention
that the main issue involved in said civil cases is the validity of
the sale stands on hollow ground. Furthermore, if it is indeed
the validity of the sale that is contested in the subject civil
cases, then, We cannot fathom why the petitioner never
contested such sale by filing an action for the annulment
thereof or at least invoked or prayed in his answer that the
sale be declared null and void. Accordingly, even if Civil Cases
Nos. 6231 and 6238 are tried and the resolution of the issues
therein is had, it cannot be deduced therefrom that the
petitioner cannot be held liable anymore for violation of B.P.
Blg. 22.17
Petitioner filed a Motion for Reconsideration, 18 which was
denied in the Order19 dated July 17, 2003.
Hence, the petition assigning the following errors:
1. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THERE IS NO PREJUDICIAL QUESTION IN THE CIVIL
CASES (FOR COLLECTION OF SUMS OF MONEY INSTITUTED
BY PRIVATE RESPONDENTS OVER CHECKS ISSUED BY THE
PETITIONER, CIVIL CASE NOS. 6238 AND 6231) THAT WOULD
WARRANT SUSPENSION OF THE CRIMINAL CASES (CASE NO.
35522-1, FOR VIOLATION OF B.P. 22, SUBJECT OF WHICH
ARE THE VERY SAME CHECKS).
2. THE HONORABLE COURT OF APPEALS ERRED IN NOT
GRANTING THE PRAYER FOR THE ISSUANCE OF A WRIT OF
PRELIMINARY INJUNCTION AND/OR STATUS QUO ORDER.20
The main contention of the petitioner is that a prejudicial
question, as defined by law and jurisprudence, exists in the
present case. It is the petitioner's assertion that Civil Case Nos.
6231 and 6238 for collection of sum of money and damages
were filed ahead of the criminal cases for violation of B.P. Blg.
22. He further alleged that, in the pending civil cases, the issue
as to whether private respondents are entitled to collect from
the petitioner despite the lack of consideration, is an issue that
is a logical antecedent to the criminal cases for violation of B.P.
Blg. 22. For if the court rules that there is no valid
consideration for the check's issuance, as petitioner contends,
then it necessarily follows that he could not also be held liable
for violation of B.P. Blg. 22.
Petitioner further avers that B.P. Blg. 22 specifically requires,
among other elements, that the check should have been issued
for account or for value. There must be a valid consideration;
otherwise, no violation of the said law could be rightfully
pursued. Petitioner said that the reason for the dishonor of the
checks was his order to the drawee bank to stop payment and
to close his account in order to avoid necessary penalty from
the bank. He made this order due to the failure of Evelyn to
deliver to him the titles to the purchased properties to him.
On the other hand, the Office of the Solicitor General (OSG)
contends that there is no prejudicial question in Civil Case Nos.
6231 and 6238 which would warrant the suspension of the
proceedings in the criminal cases for violation of B.P. Blg. 22
against the petitioner. The issue in the civil cases is not the
Page 274 of 304
validity of the sale between the petitioner and Evelyn, but
whether the complainants therein are entitled to damages
arising from the checks. These checks were issued by the
petitioner in favor of Evelyn, who, thereafter, negotiated the
same checks to private complainants. The checks were
subsequently dishonored due to insufficiency of funds. The
OSG maintains that the resolution of such issue has absolutely
no bearing on the issue of whether petitioner may be held
liable for violation of B.P. Blg. 22. 21
The present case hinges on the determination of whether there
exists a prejudicial question that necessitates the suspension of
the proceedings in the MTCC.
We find that there is none and, thus, we resolve to deny the
petition.
A prejudicial question generally exists in a situation where a
civil action and a criminal action are both pending, and there
exists in the former an issue that must be preemptively
resolved before the latter may proceed, because howsoever
the issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of the
accused in the criminal case. The rationale behind the principle
of prejudicial question is to avoid two conflicting decisions. It
has two essential elements: (i) the civil action involves an issue
similar or intimately related to the issue raised in the criminal
action; and (ii) the resolution of such issue determines whether
or not the criminal action may proceed.22
If both civil and criminal cases have similar issues, or the issue
in one is intimately related to the issues raised in the other,
then a prejudicial question would likely exist, provided the
other element or characteristic is satisfied. It must appear not
only that the civil case involves the same facts upon which the
criminal prosecution would be based, but also that the
resolution of the issues raised in the civil action would be
necessarily determinative of the guilt or innocence of the
accused. If the resolution of the issue in the civil action will not
determine the criminal responsibility of the accused in the
criminal action based on the same facts, or if there is no
necessity that the civil case be determined first before taking
up the criminal case, the civil case does not involve a
prejudicial question.23 Neither is there a prejudicial question if
the civil and the criminal action can, according to law, proceed
independently of each other.24
The issue in the criminal cases is whether the petitioner is
guilty of violating B.P. Blg. 22, while in the civil case, it is
whether the private respondents are entitled to collect from
the petitioner the sum or the value of the checks that they
have rediscounted from Evelyn.lavvphil
The resolution of the issue raised in the civil action is not
determinative of the guilt or innocence of the accused in the
criminal cases against him, and there is no necessity that the
civil case be determined first before taking up the criminal
cases.
In the aforementioned civil actions, even if petitioner is
declared not liable for the payment of the value of the checks
and damages, he cannot be adjudged free from criminal
liability for violation of B.P. Blg. 22. The mere issuance of
worthless checks with knowledge of the insufficiency of funds
to support the checks is in itself an offense. 25
In Jose v. Suarez,26 the prejudicial question under
determination was whether the daily interest rate of 5% was
void, such that the checks issued by respondents to cover said
interest were likewise void for being contra bonos mores, and
thus the cases for B.P. Blg. 22 will no longer prosper. In
resolving the issue, We ruled that "whether or not the interest
rate imposed by petitioners is eventually declared void for
being contra bonos mores will not affect the outcome of the BP
Blg. 22 cases because what will ultimately be penalized is the
mere issuance of bouncing checks. In fact, the primordial
question posed before the court hearing the B.P. Blg. 22 cases
is whether the law has been breached; that is, if a bouncing
check has been issued."
Further, We held in Ricaforte v. Jurado,27 that:
The gravamen of the offense punished by B.P. Blg. 22 is the
act of making and issuing a worthless check; that is, a check
that is dishonored upon its presentation for payment. In
Lozano v. Martinez, we have declared that it is not the non-
payment of an obligation which the law punishes. The law is
not intended or designed to coerce a debtor to pay his debt.
The thrust of the law is to prohibit, under pain of penal
sanctions, the making and circulation of worthless checks.
Because of its deleterious effects on the public interest, the
practice is proscribed by the law. The law punishes the act not
as an offense against property, but an offense against public
order. In People v. Nitafan, we said that a check issued as an
evidence of debt - though not intended to be presented for
payment - has the same effect as an ordinary check and would
fall within the ambit of B.P. Blg. 22.
xxxx
x x x The mere act of issuing a worthless check - whether as a
deposit, as a guarantee or even as evidence of pre-existing
debt - is malum prohibitum.
To determine the reason for which checks are issued, or the
terms and conditions for their issuance, will greatly erode the
faith the public reposes in the stability and commercial value of
checks as currency substitutes, and bring about havoc in trade
and in banking communities. So what the law punishes is the
issuance of a bouncing check and not the purpose for which it
was issued or the terms and conditions relating to its issuance.
The mere act of issuing a worthless check is malum
prohibitum.28
Page 275 of 304
Moreover, petitioner's reliance on Ras v. Rasul29 is misplaced.
The case of Ras  involves a complaint for nullification of a deed
of sale on the ground of an alleged double sale. While the civil
case was pending, an information for estafa was filed against
Ras (the defendant in the civil case) arising from the same
alleged double sale, subject matter of the civil complaint. The
Court ruled that there was a prejudicial question considering
that the defense in the civil case was based on the very same
facts that would be determinative of the guilt or innocence of
the accused in the estafa case.
The instant case is different from Ras, inasmuch as the
determination of whether the petitioner is liable to pay the
private respondents the value of the checks and damages, will
not affect the guilt or innocence of the petitioner because the
material question in the criminal cases is whether petitioner
had issued bad checks, regardless of the purpose or condition
of its issuance.
Guided by the following legal precepts, it is clear that the
determination of the issues involved in Civil Case Nos. 6231
and 6238 for collection of sum of money and damages is
irrelevant to the guilt or innocence of the petitioner in the
criminal cases for violation of B.P. Blg. 22.
In addition, petitioner's claim of lack of consideration may be
raised as a defense during the trial of the criminal cases
against him. The validity and merits of a party’s defense and
accusation, as well as the admissibility and weight of
testimonies and evidence brought before the court, are better
ventilated during trial proper.
Precisely, the reason why a state has courts of law is to
ascertain the respective rights of the parties, to examine and
to put to test all their respective allegations and evidence
through a well designed machinery termed "trial." Thus, all the
defenses available to the accused should be invoked in the trial
of the criminal cases. This court is not the proper forum that
should ascertain the facts and decide the case for violation of
B.P. Blg. 22 filed against the petitioner.
In fine, the CA committed no reversible error in affirming the
decision of the RTC.
WHEREFORE, the petition is DENIED and the Decision dated
April 30, 2003 and the Resolution dated July 17, 2003 of the
Court of Appeals in CA-G.R. SP No. 68250 are AFFIRMED.
SO ORDERED.
Dreamwork vs Janiola
DREAMWORK CONSTRUCTION, INC., Petitioner, versus
CLEOFE S. JANIOLA and HON. ARTHUR A. FAMINI,
Respondents.
VELASCO, JR., J.:
The Case
Petitioner Dreamwork Construction, Inc. seeks the reversal of
the August 26, 2008 Decision[1] in SCA No. 08-0005 of the
Regional Trial Court (RTC), Branch 253 in Las Piñas City. The
Decision affirmed the Orders dated October 16, 2007[2] and
March 12, 2008[3] in Criminal Case Nos. 55554-61 issued by
the Metropolitan Trial Court (MTC), Branch 79 in Las Piñas
City.
The Facts
On October 18, 2004, petitioner, through its President, Roberto
S. Concepcion, and Vice-President for Finance and Marketing,
Normandy P. Amora, filed a Complaint Affidavit dated October
5, 2004[4] for violation of Batas Pambansa Bilang 22 (BP 22)
against private respondent Cleofe S. Janiola with the Office of
the City Prosecutor of Las Piñas City. The case was docketed
as I.S. No. 04-2526-33. Correspondingly, petitioner filed a
criminal information for violation of BP 22 against private
respondent with the MTC on February 2, 2005 docketed as
Criminal Case Nos. 55554-61, entitled People of the Philippines
v. Cleofe S. Janiola.
On September 20, 2006, private respondent, joined by her
husband, instituted a civil complaint against petitioner by filing
a Complaint dated August 2006[5] for the rescission of an
alleged construction agreement between the parties, as well as
for damages. The case was filed with the RTC, Branch 197 in
Las Piñas City and docketed as Civil Case No. LP-06-0197.
Notably, the checks, subject of the criminal cases before the
MTC, were issued in consideration of the construction
agreement.
Thereafter, on July 25, 2007, private respondent filed a Motion
to Suspend Proceedings dated July 24, 2007[6] in Criminal
Case Nos. 55554-61, alleging that the civil and criminal cases
involved facts and issues similar or intimately related such that
in the resolution of the issues in the civil case, the guilt or
innocence of the accused would necessarily be determined. In
other words, private respondent claimed that the civil case
posed a prejudicial question as against the criminal cases.
Petitioner opposed the suspension of the proceedings in the
criminal cases in an undated Comment/Opposition to Accused's
Motion to Suspend Proceedings based on Prejudicial
Question[7] on the grounds that: (1) there is no prejudicial
question in this case as the rescission of the contract upon
which the bouncing checks were issued is a separate and
distinct issue from the issue of whether private respondent
violated BP 22; and (2) Section 7, Rule 111 of the Rules of
Court states that one of the elements of a prejudicial question
is that "the previously instituted civil action involves an issue
Page 276 of 304
similar or intimately related to the issue raised in the
subsequent criminal action"; thus, this element is missing in
this case, the criminal case having preceded the civil case.
Later, the MTC issued its Order dated October 16, 2007,
granting the Motion to Suspend Proceedings, and reasoned
that:
Should the trial court declare the rescission of contract and the
nullification of the checks issued as the same are without
consideration, then the instant criminal cases for alleged
violation of BP 22 must be dismissed. The belated filing of the
civil case by the herein accused did not detract from the
correctness of her cause, since a motion for suspension of a
criminal action may be filed at any time before the prosecution
rests (Section 6, Rule 111, Revised Rules of Court).[8]
In an Order dated March 12, 2008,[9] the MTC denied
petitioner's Motion for Reconsideration dated November 29,
2007.
Petitioner appealed the Orders to the RTC with a Petition dated
May 13, 2008. Thereafter, the RTC issued the assailed decision
dated August 26, 2008, denying the petition. On the issue of
the existence of a prejudicial question, the RTC ruled:
Additionally, it must be stressed that the requirement of a
"previously" filed civil case is intended merely to obviate delays
in the conduct of the criminal proceedings. Incidentally, no
clear evidence of any intent to delay by private respondent
was shown. The criminal proceedings are still in their initial
stages when the civil action was instituted. And, the fact that
the civil action was filed after the criminal action was instituted
does not render the issues in the civil action any less
prejudicial in character.[10]
Hence, we have this petition under Rule 45.
The Issue
WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN
NOT PERCEIVING GRAVE ABUSE OF DISCRETION ON THE
PART OF THE INFERIOR COURT, WHEN THE LATTER RULED
TO SUSPEND PROCEEDINGS IN CRIM. CASE NOS. 55554-61
ON THE BASIS OF "PREJUDICIAL QUESTION" IN CIVIL CASE
NO. LP-06-0197.[11]
The Court's Ruling
This petition must be granted.
The Civil Action Must Precede the Filing of the Criminal Action
for a Prejudicial Question to Exist
Under the 1985 Rules on Criminal Procedure, as amended by
Supreme Court Resolutions dated June 17, 1988 and July 7,
1988, the elements of a prejudicial question are contained in
Rule 111, Sec. 5, which states:
SEC. 5. Elements of prejudicial question. - The two (2)
essential elements of a prejudicial question are: (a) the civil
action involves an issue similar or intimately related to the
issue raised in the criminal action; and (b) the resolution of
such issue determines whether or not the criminal action may
proceed.
Thus, the Court has held in numerous cases[12] that the
elements of a prejudicial question, as stated in the above-
quoted provision and in Beltran v. People,[13] are:
The rationale behind the principle of prejudicial question is to
avoid two conflicting decisions. It has two essential elements:
(a) the civil action involves an issue similar or intimately
related to the issue raised in the criminal action; and (b) the
resolution of such issue determines whether or not the criminal
action may proceed.
On December 1, 2000, the 2000 Rules on Criminal Procedure,
however, became effective and the above provision was
amended by Sec. 7 of Rule 111, which applies here and now
provides:
SEC. 7. Elements of prejudicial question.-The elements of a
prejudicial question are: (a) the previously instituted civil
action involves an issue similar or intimately related to the
issue raised in the subsequent criminal action, and (b) the
resolution of such issue determines whether or not the criminal
action may proceed. (Emphasis supplied.)
Petitioner interprets Sec. 7(a) to mean that in order for a civil
case to create a prejudicial question and, thus, suspend a
criminal case, it must first be established that the civil case
was filed previous to the filing of the criminal case. This,
petitioner argues, is specifically to guard against the situation
wherein a party would belatedly file a civil action that is related
to a pending criminal action in order to delay the proceedings
in the latter.
On the other hand, private respondent cites Article 36 of the
Civil Code which provides:
Art. 36. Pre-judicial questions which must be decided before
any criminal prosecution may be instituted or may proceed,
shall be governed by rules of court which the Supreme Court
shall promulgate and which shall not be in conflict with the
provisions of this Code. (Emphasis supplied.)
Private respondent argues that the phrase "before any criminal
prosecution may be instituted or may proceed" must be
interpreted to mean that a prejudicial question exists when the
Page 277 of 304
civil action is filed either before the institution of the criminal
action or during the pendency of the criminal action. Private
respondent concludes that there is an apparent conflict in the
provisions of the Rules of Court and the Civil Code in that the
latter considers a civil case to have presented a prejudicial
question even if the criminal case preceded the filing of the
civil case.
We cannot agree with private respondent.
First off, it is a basic precept in statutory construction that a
"change in phraseology by amendment of a provision of law
indicates a legislative intent to change the meaning of the
provision from that it originally had."[14] In the instant case,
the phrase, "previously instituted," was inserted to qualify the
nature of the civil action involved in a prejudicial question in
relation to the criminal action. This interpretation is further
buttressed by the insertion of "subsequent" directly before the
term criminal action. There is no other logical explanation for
the amendments except to qualify the relationship of the civil
and criminal actions, that the civil action must precede the
criminal action.
Thus, this Court ruled in Torres v. Garchitorena[15] that:
Even if we ignored petitioners' procedural lapse and resolved
their petition on the merits, we hold that Sandiganbayan did
not abuse its discretion amounting to excess or lack of
jurisdiction in denying their omnibus motion for the suspension
of the proceedings pending final judgment in Civil Case No.
7160. Section 6, Rule lll of the Rules of Criminal Procedure, as
amended, reads:
Sec. 6. Suspension by reason of prejudicial question. - A
petition for suspension of the criminal action based upon the
pendency of a prejudicial question in a civil action may be filed
in the office of the prosecutor or the court conducting the
preliminary investigation. When the criminal action has been
filed in court for trial, the petition to suspend shall be filed in
the same criminal action at any time before the prosecution
rests.
Sec. 7. Elements of prejudicial question. - The elements of a
prejudicial question are: (a) the previously instituted civil
action involves an issue similar or intimately related to the
issue raised in the subsequent criminal action, and (b) the
resolution of such issue determines whether or not the criminal
action may proceed.
Under the amendment, a prejudicial question is understood in
law as that which must precede the criminal action and which
requires a decision before a final judgment can be rendered in
the criminal action with which said question is closely
connected. The civil action must be instituted prior to the
institution of the criminal action. In this case, the Information
was filed with the Sandiganbayan ahead of the complaint in
Civil Case No. 7160 filed by the State with the RTC in Civil Case
No. 7160. Thus, no prejudicial question exists. (Emphasis
supplied.)
Additionally, it is a principle in statutory construction that "a
statute should be construed not only to be consistent with
itself but also to harmonize with other laws on the same
subject matter, as to form a complete, coherent and intelligible
system."[16] This principle is consistent with the maxim,
interpretare et concordare leges legibus est optimus
interpretandi modus or every statute must be so construed and
harmonized with other statutes as to form a uniform system of
jurisprudence.[17]
In other words, every effort must be made to harmonize
seemingly conflicting laws. It is only when harmonization is
impossible that resort must be made to choosing which law to
apply.
In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule
111 of the Rules of Court are susceptible of an interpretation
that would harmonize both provisions of law. The phrase
"previously instituted civil action" in Sec. 7 of Rule 111 is
plainly worded and is not susceptible of alternative
interpretations. The clause "before any criminal prosecution
may be instituted or may proceed" in Art. 36 of the Civil Code
may, however, be interpreted to mean that the motion to
suspend the criminal action may be filed during the preliminary
investigation with the public prosecutor or court conducting the
investigation, or during the trial with the court hearing the
case.
This interpretation would harmonize Art. 36 of the Civil Code
with Sec. 7 of Rule 111 of the Rules of Court but also with Sec.
6 of Rule 111 of the Civil Code, which provides for the
situations when the motion to suspend the criminal action
during the preliminary investigation or during the trial may be
filed. Sec. 6 provides:
SEC. 6. Suspension by reason of prejudicial question.-A
petition for suspension of the criminal action based upon the
pendency of a prejudicial question in a civil action may be filed
in the office of the prosecutor or the court conducting the
preliminary investigation. When the criminal action has been
filed in court for trial, the petition to suspend shall be filed in
the same criminal action at any time before the prosecution
rests.
Thus, under the principles of statutory construction, it is this
interpretation of Art. 36 of the Civil Code that should govern in
order to give effect to all the relevant provisions of law.
It bears pointing out that the circumstances present in the
instant case indicate that the filing of the civil action and the
Page 278 of 304
subsequent move to suspend the criminal proceedings by
reason of the presence of a prejudicial question were a mere
afterthought and instituted to delay the criminal proceedings.
In Sabandal v. Tongco,[18] we found no prejudicial question
existed involving a civil action for specific performance,
overpayment, and damages, and a criminal complaint for BP
22, as the resolution of the civil action would not determine
the guilt or innocence of the accused in the criminal case. In
resolving the case, we said:
Furthermore, the peculiar circumstances of the case clearly
indicate that the filing of the civil case was a ploy to delay the
resolution of the criminal cases. Petitioner filed the civil case
three years after the institution of the criminal charges against
him. Apparently, the civil action was instituted as an
afterthought to delay the proceedings in the criminal cases.
[19]
Here, the civil case was filed two (2) years after the institution
of the criminal complaint and from the time that private
respondent allegedly withdrew its equipment from the job site.
Also, it is worth noting that the civil case was instituted more
than two and a half (2 ½) years from the time that private
respondent allegedly stopped construction of the proposed
building for no valid reason. More importantly, the civil case
praying for the rescission of the construction agreement for
lack of consideration was filed more than three (3) years from
the execution of the construction agreement.
Evidently, as in Sabandal, the circumstances surrounding the
filing of the cases involved here show that the filing of the civil
action was a mere afterthought on the part of private
respondent and interposed for delay. And as correctly argued
by petitioner, it is this scenario that Sec. 7 of Rule 111 of the
Rules of Court seeks to prevent. Thus, private respondent's
positions cannot be left to stand.
The Resolution of the Civil Case Is Not Determinative of the
Prosecution of the Criminal Action
In any event, even if the civil case here was instituted prior to
the criminal action, there is, still, no prejudicial question to
speak of that would justify the suspension of the proceedings
in the criminal case.
To reiterate, the elements of a prejudicial question under Sec.
7 of Rule 111 of the Rules of Court are: (1) the previously
instituted civil action involves an issue similar or intimately
related to the issue raised in the subsequent criminal action;
and (2) the resolution of such issue determines whether or not
the criminal action may proceed.
Petitioner argues that the second element of a prejudicial
question, as provided in Sec. 7 of Rule 111 of the Rules, is
absent in this case. Thus, such rule cannot apply to the
present controversy.
Private respondent, on the other hand, claims that if the
construction agreement between the parties is declared null
and void for want of consideration, the checks issued in
consideration of such contract would become mere scraps of
paper and cannot be the basis of a criminal prosecution.
We find for petitioner.
It must be remembered that the elements of the crime
punishable under BP 22 are as follows:
(1) the making, drawing, and issuance of any check to apply
for account or for value;
(2) the knowledge of the maker, drawer, or issuer that at the
time of issue there are no sufficient funds in or credit with the
drawee bank for the payment of such check in full upon its
presentment; and
(3) the subsequent dishonor of the check by the drawee bank
for insufficiency of funds or credit, or dishonor for the same
reason had not the drawer, without any valid cause, ordered
the bank to stop payment.[20]
Undeniably, the fact that there exists a valid contract or
agreement to support the issuance of the check/s or that the
checks were issued for valuable consideration does not make
up the elements of the crime. Thus, this Court has held in a
long line of cases[21] that the agreement surrounding the
issuance of dishonored checks is irrelevant to the prosecution
for violation of BP 22. In Mejia v. People,[22] we ruled:
It must be emphasized that the gravamen of the offense
charge is the issuance of a bad check. The purpose for which
the check was issued, the terms and conditions relating to its
issuance, or any agreement surrounding such issuance are
irrelevant to the prosecution and conviction of petitioner. To
determine the reason for which checks are issued, or the terms
and conditions for their issuance, will greatly erode the faith
the public reposes in the stability and commercial value of
checks as currency substitutes, and bring havoc in trade and in
banking communities. The clear intention of the framers of
B.P. 22 is to make the mere act of issuing a worthless check
malum prohibitum.
Lee v. Court of Appeals[23] is even more poignant. In that
case, we ruled that the issue of lack of valuable consideration
for the issuance of checks which were later on dishonored for
insufficient funds is immaterial to the success of a prosecution
for violation of BP 22, to wit:
Third issue. Whether or not the check was issued on account
Page 279 of 304
or for value.
Petitioner's claim is not feasible. We have held that upon
issuance of a check, in the absence of evidence to the
contrary, it is presumed that the same was issued for valuable
consideration. Valuable consideration, in turn, may consist
either in some right, interest, profit or benefit accruing to the
party who makes the contract, or some forbearance,
detriment, loss or some responsibility, to act, or labor, or
service given, suffered or undertaken by the other side. It is an
obligation to do, or not to do in favor of the party who makes
the contract, such as the maker or indorser.
In this case, petitioner himself testified that he signed several
checks in blank, the subject check included, in exchange for
2.5% interest from the proceeds of loans that will be made
from said account. This is a valuable consideration for which
the check was issued. That there was neither a pre-existing
obligation nor an obligation incurred on the part of petitioner
when the subject check was given by Bautista to private
complainant on July 24, 1993 because petitioner was no longer
connected with Unlad or Bautista starting July 1989, cannot be
given merit since, as earlier discussed, petitioner failed to
adequately prove that he has severed his relationship with
Bautista or Unlad.
At any rate, we have held that what the law punishes is the
mere act of issuing a bouncing check, not the purpose for
which it was issued nor the terms and conditions relating to its
issuance. This is because the thrust of the law is to prohibit the
making of worthless checks and putting them into circulation.
[24] (Emphasis supplied.)
Verily, even if the trial court in the civil case declares that the
construction agreement between the parties is void for lack of
consideration, this would not affect the prosecution of private
respondent in the criminal case. The fact of the matter is that
private respondent indeed issued checks which were
subsequently dishonored for insufficient funds. It is this fact
that is subject of prosecution under BP 22.
Therefore, it is clear that the second element required for the
existence of a prejudicial question, that the resolution of the
issue in the civil action would determine whether the criminal
action may proceed, is absent in the instant case. Thus, no
prejudicial question exists and the rules on it are inapplicable
to the case before us.
WHEREFORE, we GRANT this petition. We hereby REVERSE
and SET ASIDE the August 26, 2008 Decision in SCA No. 08-
0005 of the RTC, Branch 253 in Las Piñas City and the Orders
dated October 16, 2007 and March 12, 2008 in Criminal Case
Nos. 55554-61 of the MTC, Branch 79 in Las Piñas City. We
order the MTC to continue with the proceedings in Criminal
Case Nos. 55554-61 with dispatch.
No costs.
SO ORDERED.
Pimentel vs Pimentel and People
JOSELITO R. PIMENTEL, Petitioner, versus MARIA
CHRYSANTINE L. PIMENTEL and PEOPLE OF THE
PHILIPPINES, Respondents
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the
Decision[2] of the Court of Appeals, promulgated on 20 March
2006, in CA-G.R. SP No. 91867.
The Antecedent Facts
The facts are stated in the Court of Appeals' decision:
On 25 October 2004, Maria Chrysantine Pimentel y Lacap
(private respondent) filed an action for frustrated parricide
against Joselito R. Pimentel (petitioner), docketed as Criminal
Case No. Q-04-130415, before the Regional Trial Court of
Quezon City, which was raffled to Branch 223 (RTC Quezon
City).
On 7 February 2005, petitioner received summons to appear
before the Regional Trial Court of Antipolo City, Branch 72
(RTC Antipolo) for the pre-trial and trial of Civil Case No. 04-
7392 (Maria Chrysantine Lorenza L. Pimentel v. Joselito
Pimentel) for Declaration of Nullity of Marriage under Section
36 of the Family Code on the ground of psychological
incapacity.
On 11 February 2005, petitioner filed an urgent motion to
suspend the proceedings before the RTC Quezon City on the
ground of the existence of a prejudicial question. Petitioner
asserted that since the relationship between the offender and
the victim is a key element in parricide, the outcome of Civil
Case No. 04-7392 would have a bearing in the criminal case
filed against him before the RTC Quezon City.
 
The Decision of the Trial Court
The RTC Quezon City issued an Order dated 13 May 2005[3]
holding that the pendency of the case before the RTC Antipolo
Page 280 of 304
is not a prejudicial question that warrants the suspension of
the criminal case before it. The RTC Quezon City held that the
issues in Criminal Case No. Q-04-130415 are the injuries
sustained by respondent and whether the case could be tried
even if the validity of petitioner's marriage with respondent is
in question. The RTC Quezon City ruled:
WHEREFORE, on the basis of the foregoing, the Motion to
Suspend Proceedings On the [Ground] of the Existence of a
Prejudicial Question is, for lack of merit, DENIED.
SO ORDERED.[4]
Petitioner filed a motion for reconsideration. In its 22 August
2005 Order,[5] the RTC Quezon City denied the motion.
Petitioner filed a petition for certiorari with application for a
writ of preliminary injunction and/or temporary restraining
order before the Court of Appeals, assailing the 13 May 2005
and 22 August 2005 Orders of the RTC Quezon City.
The Decision of the Court of Appeals
In its 20 March 2006 Decision, the Court of Appeals dismissed
the petition. The Court of Appeals ruled that in the criminal
case for frustrated parricide, the issue is whether the offender
commenced the commission of the crime of parricide directly
by overt acts and did not perform all the acts of execution by
reason of some cause or accident other than his own
spontaneous desistance. On the other hand, the issue in the
civil action for annulment of marriage is whether petitioner is
psychologically incapacitated to comply with the essential
marital obligations. The Court of Appeals ruled that even if the
marriage between petitioner and respondent would be
declared void, it would be immaterial to the criminal case
because prior to the declaration of nullity, the alleged acts
constituting the crime of frustrated parricide had already been
committed. The Court of Appeals ruled that all that is required
for the charge of frustrated parricide is that at the time of the
commission of the crime, the marriage is still subsisting.
Petitioner filed a petition for review before this Court assailing
the Court of Appeals' decision.
The Issue
The only issue in this case is whether the resolution of the
action for annulment of marriage is a prejudicial question that
warrants the suspension of the criminal case for frustrated
parricide against petitioner.
The Ruling of this Court
The petition has no merit.
Civil Case Must be Instituted
Before the Criminal Case
Section 7, Rule 111 of the 2000 Rules on Criminal Procedure[6]
provides:
Section 7. Elements of Prejudicial Question. - The elements of
a prejudicial question are: (a) the previously instituted civil
action involves an issue similar or intimately related to the
issue raised in the subsequent criminal action and (b) the
resolution of such issue determines whether or not the criminal
action may proceed.
The rule is clear that the civil action must be instituted first
before the filing of the criminal action. In this case, the
Information[7] for Frustrated Parricide was dated 30 August
2004. It was raffled to RTC Quezon City on 25 October 2004 as
per the stamped date of receipt on the Information. The RTC
Quezon City set Criminal Case No. Q-04-130415 for pre-trial
and trial on 14 February 2005. Petitioner was served summons
in Civil Case No. 04-7392 on 7 February 2005.[8] Respondent's
petition[9] in Civil Case No. 04-7392 was dated 4 November
2004 and was filed on 5 November 2004. Clearly, the civil case
for annulment was filed after the filing of the criminal case for
frustrated parricide. As such, the requirement of Section 7,
Rule 111 of the 2000 Rules on Criminal Procedure was not met
since the civil action was filed subsequent to the filing of the
criminal action.
Annulment of Marriage is not a Prejudicial Question in
Criminal Case for Parricide
Further, the resolution of the civil action is not a prejudicial
question that would warrant the suspension of the criminal
action.
There is a prejudicial question when a civil action and a
criminal action are both pending, and there exists in the civil
action an issue which must be preemptively resolved before
the criminal action may proceed because howsoever the issue
raised in the civil action is resolved would be determinative of
the guilt or innocence of the accused in the criminal case.[10]
A prejudicial question is defined as:
x x x one that arises in a case the resolution of which is a
logical antecedent of the issue involved therein, and the
cognizance of which pertains to another tribunal. It is a
question based on a fact distinct and separate from the crime
Page 281 of 304
but so intimately connected with it that it determines the guilt
or innocence of the accused, and for it to suspend the criminal
action, it must appear not only that said case involves facts
intimately related to those upon which the criminal prosecution
would be based but also that in the resolution of the issue or
issues raised in the civil case, the guilt or innocence of the
accused would necessarily be determined.[11]
The relationship between the offender and the victim is a key
element in the crime of parricide,[12] which punishes any
person "who shall kill his father, mother, or child, whether
legitimate or illegitimate, or any of his ascendants or
descendants, or his spouse."[13] The relationship between the
offender and the victim distinguishes the crime of parricide
from murder[14] or homicide.[15] However, the issue in the
annulment of marriage is not similar or intimately related to
the issue in the criminal case for parricide. Further, the
relationship between the offender and the victim is not
determinative of the guilt or innocence of the accused.
The issue in the civil case for annulment of marriage under
Article 36 of the Family Code is whether petitioner is
psychologically incapacitated to comply with the essential
marital obligations. The issue in parricide is whether the
accused killed the victim. In this case, since petitioner was
charged with frustrated parricide, the issue is whether he
performed all the acts of execution which would have killed
respondent as a consequence but which, nevertheless, did not
produce it by reason of causes independent of petitioner's will.
[16] At the time of the commission of the alleged crime,
petitioner and respondent were married. The subsequent
dissolution of their marriage, in case the petition in Civil Case
No. 04-7392 is granted, will have no effect on the alleged
crime that was committed at the time of the subsistence of the
marriage. In short, even if the marriage between petitioner
and respondent is annulled, petitioner could still be held
criminally liable since at the time of the commission of the
alleged crime, he was still married to respondent.
We cannot accept petitioner's reliance on Tenebro v. Court of
Appeals[17] that "the judicial declaration of the nullity of a
marriage on the ground of psychological incapacity retroacts to
the date of the celebration of the marriage insofar as the
vinculum between the spouses is concerned x x x." First, the
issue in Tenebro is the effect of the judicial declaration of
nullity of a second or subsequent marriage on the ground of
psychological incapacity on a criminal liability for bigamy.
There was no issue of prejudicial question in that case.
Second, the Court ruled in Tenebro that "[t]here is x x x a
recognition written into the law itself that such a marriage,
although void ab initio, may still produce legal
consequences."[18] In fact, the Court declared in that case
that "a declaration of the nullity of the second marriage on the
ground of psychological incapacity is of absolutely no moment
insofar as the State's penal laws are concerned."[19]
In view of the foregoing, the Court upholds the decision of the
Court of Appeals. The trial in Criminal Case No. Q-04-130415
may proceed as the resolution of the issue in Civil Case No. 04-
7392 is not determinative of the guilt or innocence of petitioner
in the criminal case.
WHEREFORE, we DENY the petition. We AFFIRM the 20 March
2006 Decision of the Court of Appeals in CA-G.R. SP No.
91867.
SO ORDERED.
Consing JR vs People
RAFAEL JOSE-CONSING, JR., Petitioner, vs. PEOPLE OF
THE PHILIPPINES, Respondent.
BERSAMIN, J.:
 
An independent civil action based on fraud initiated by the
defrauded party does not raise a prejudicial question to stop
the proceedings in a pending criminal prosecution of the
defendant for estafa through falsification. This is because the
result of the independent civil action is irrelevant to the issue
of guilt or innocence of the accused.
 
The Case
 
On appeal is the amended decision promulgated on August 18,
2003,1 whereby the Court of Appeals (CA) granted the writ of
certiorari upon petition by the State in C.A.-G.R. No. 71252
entitled People v. Han. Winlove M Dumayas, Presiding Judge,
Branch 59, Regional Trial Court, Makati City and Rafael
Consing, Jr., and set aside the assailed order issued on
November 26, 2001 by the Regional Trial Court (RTC), Branch
59, in Makati City deferring the arraignment of petitioner in
Criminal Case No. 00-120 entitled People v. Rafael Consing, Jr.
upon his motion on the ground of the existence of a prejudicial
question in the civil cases pending between him and the
complainant in the trial courts in Pasig City and Makati City.
Antecedents
 
Petitioner negotiated with and obtained for himself and his
mother, Cecilia de la Cruz (de la Cruz) various loans totaling
P18,000,000.00 from Unicapital Inc. (Unicapital). The loans
were secured by a real estate mortgage constituted on a parcel
Page 282 of 304
of land (property) covered by Transfer Certificate of Title (TCT)  
No. T-687599 of the Registry of Deeds for the Province of
Cavite registered under the name of de la Cruz.2 In accordance On February 15, 2001, Consing moved to defer his
with its option to purchase the mortgaged property, Unicapital arraignment in the Makati criminal case on the ground of
agreed to purchase one-half of the property for a total existence of a prejudicial question due to the pendency of the
consideration of P21,221,500.00. Payment was effected by off- Pasig and Makati civil cases. On September 25, 2001, Consing
setting the amounts due to Unicapital under the promissory reiterated his motion for deferment of his arraignment, citing
notes of de la Cruz and Consing in the amount of the additional ground of pendency of CA-G.R. SP No. 63712 in
P18,000,000.00 and paying an additional amount of the CA. On November 19, 2001, the Prosecution opposed the
P3,145,946.50. The other half of the property was purchased motion.9
by Plus Builders, Inc. (Plus Builders), a joint venture partner of
 
Unicapital.3
On November 26, 2001, the RTC issued an order suspending
 
the proceedings in the Makati criminal case on the ground of
Before Unicapital and Plus Builders could develop the property, the existence of a prejudicial question, and on March 18, 2001,
they learned that the title to the property was really TCT No. the RTC denied the Prosecution’s motion for reconsideration. 10
114708 in the names of Po Willie Yu and Juanito Tan Teng, the
 
parties from whom the property had been allegedly acquired
by de la Cruz. TCT No. 687599 held by De la Cruz appeared to
The State thus assailed in the CA the last two orders of the
be spurious.4
RTC in the Makati criminal case via petition for certiorari (C.A.-
G.R. SP No. 71252).
 
 
On its part, Unicapital demanded the return of the total
amount of P41,377,851.48 as of April 19, 1999 that had been
On May 20, 2003, the CA promulgated its decision in C.A.-G.R.
paid to and received by de la Cruz and Consing, but the latter
SP No. 71252,11 dismissing the petition for certiorari and
ignored the demands.5
upholding the RTC’s questioned orders, explaining:
 
 
On July 22, 1999, Consing filed Civil Case No. 1759 in the
Is the resolution of the Pasig civil case prejudicial to the Cavite
Pasig City Regional Trial Court (RTC) (Pasig civil case) for
and Makati criminal cases?
injunctive relief, thereby seeking to enjoin Unicapital from
proceeding against him for the collection of the  
P41,377,851.48 on the ground that he had acted as a mere
agent of his mother. We hold that it is. The resolution of the issue in the Pasig case,
i.e. whether or not private respondent may be held liable in the
  questioned transaction, will determine the guilt or innocence of
private respondent Consing in both the Cavite and Makati
On the same date, Unicapital initiated a criminal complaint for
criminal cases.
estafa through falsification of public document against Consing
and de la Cruz in the Makati City Prosecutor’s Office. 6  

  The analysis and comparison of the Pasig civil case, Makati

criminal case, Makati civil case and Cavite criminal case show
On August 6, 1999, Unicapital sued Consing in the RTC in
that: (1) the parties are identical; (2) the transactions in
Makati City (Civil Case No. 99-1418) for the recovery of a sum
controversy are identical; (3) the Transfer Certificate of Titles
of money and damages, with an application for a writ of
(TCT) involved are identical; (4) the questioned Deeds of
preliminary attachment (Makati civil case).7
Sale/Mortgage are identical; (5) the dates in question are
identical; and (6) the issue of private respondent’s culpability
 
for the questioned transactions is identical in all the
On January 27, 2000, the Office of the City Prosecutor of proceedings.
Makati City filed against Consing and De la Cruz an information
 
for estafa through falsification of public document in the RTC
in Makati City (Criminal Case No. 00-120), which was assigned
to Branch 60 (Makati criminal case).8

Page 283 of 304

As discussed earlier, not only was the issue raised in the Pasig
civil case identical to or intimately related to the criminal cases
in Cavite and Makati. The similarities also extend to the parties
in the cases and the TCT and Deed of Sale/ Mortgage involved
in the questioned transactions.
The respondent Judge, in ordering the suspension of the
arraignment of private respondent in the Makati case, in view
of CA-G.R. SP No. 63712, where Unicapital was not a party
thereto, did so pursuant to its mandatory power to take judicial
notice of an official act of another judicial authority. It was also
a better legal tack to prevent multiplicity of action, to which
our legal system abhors.
 
Applying the Tuanda ruling, the pendency of CA-G.R. SP No.
63712 may be validly invoked to suspend private respondent’s
arraignment in the Makati City criminal case, notwithstanding
the fact that CA-G.R. SP No. 63712 was an offshoot, merely, in
the Cavite criminal case.12
In the meanwhile, on October 13, 1999, Plus Builders
commenced its own suit for damages against Consing (Civil
Case No. 99-95381) in the RTC in Manila (Manila civil case). 13
On January 21, 2000, an information for estafa through
falsification of public document was filed against Consing and
De la Cruz in the RTC in Imus, Cavite, docketed as Criminal
Case No. 7668-00 and assigned to Branch 21 (Cavite criminal
case). Consing filed a motion to defer the arraignment on the
ground of the existence of a prejudicial question, i.e., the
pendency of the Pasig and Manila civil cases. On January 27,
2000, however, the RTC handling the Cavite criminal case
denied Consing’s motion. Later on, it also denied his motion for
reconsideration. Thereafter, Consing commenced in the CA a
special civil action for certiorari with prayer for the issuance of
a temporary restraining order (TRO) and/or writ of preliminary
injunction (C.A.-G.R. SP No. 63712), seeking to enjoin his
arraignment and trial in the Cavite criminal case. The CA
granted the TRO on March 19, 2001, and later promulgated its
decision on May 31, 2001, granting Consing’ petition for
certiorari and setting aside the January 27, 2000 order of the
RTC, and permanently enjoining the RTC from proceeding with
the arraignment and trial until the Pasig and Manila civil cases
had been finally decided.
Not satisfied, the State assailed the decision of the CA in this
Court (G.R. No. 148193), praying for the reversal of the May
31, 2001 decision of the CA. On January 16, 2003, the Court
granted the petition for review in G.R. No. 148193, and
reversed and set aside the May 31, 2001 decision of the
CA,14 viz:
In the case at bar, we find no prejudicial question that would
justify the suspension of the proceedings in the criminal case
(the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not
respondent (Consing) merely acted as an agent of his mother,
Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila
civil case), for Damages and Attachment, the question is
whether respondent and his mother are liable to pay damages
and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of
his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal
liability. An agent or any person may be held liable for
conspiring to falsify public documents. Hence, the
determination of the issue involved in Civil Case No. SCA 1759
for Injunctive Relief is irrelevant to the guilt or innocence of
the respondent in the criminal case for estafa through
falsification of public document.
Likewise, the resolution of PBI’s right to be paid damages and
the purchase price of the lot in question will not be
determinative of the culpability of the respondent in the
criminal case for even if PBI is held entitled to the return of the
purchase price plus damages, it does not ipso facto follow that
respondent should be held guilty of estafa through falsification
of public document. Stated differently, a ruling of the court in
the civil case that PBI should not be paid the purchase price
plus damages will not necessarily absolve respondent of
liability in the criminal case where his guilt may still be
established under penal laws as determined by other evidence.
Moreover, neither is there a prejudicial question if the civil and
the criminal action can, according to law, proceed
independently of each other. Under Rule 111, Section 3 of the
Revised Rules on Criminal Procedure, in the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code, the independent
civil action may be brought by the offended party. It shall
proceed independently of the criminal action and shall require
only a preponderance of evidence. In no case, however, may
the offended party recover damages twice for the same act or
omission charged in the criminal action.
Thus, in Rojas v. People, the petitioner was accused in a
criminal case for violation of Article 319 of the Revised Penal
Page 284 of 304
Code, for executing a new chattel mortgage on personal No. 148193, the Pasig and Makati civil cases did not raise a
property in favor of another party without consent of the prejudicial question that would cause the suspension of the
previous mortgagee. Thereafter, the offended party filed a civil Makati criminal case.
case for termination of management contract, one of the
causes of action of which consisted of petitioner having  
executed a chattel mortgage while the previous chattel
In his opposition to the State’s motion for reconsideration,
mortgage was still valid and subsisting. Petitioner moved that
Consing contended that the ruling in G.R. No. 148193 was not
the arraignment and trial of the criminal case be held in
binding because G.R. No. 148193 involved Plus Builders, which
abeyance on the ground that the civil case was a prejudicial
was different from Unicapital, the complainant in the Makati
question, the resolution of which was necessary before the
criminal case. He added that the decision in G.R. No. 148193
criminal proceedings could proceed. The trial court denied the
did not yet become final and executory, and could still be
suspension of the criminal case on the ground that no
reversed at any time, and thus should not control as a
prejudicial question exist. We affirmed the order of the trial
precedent to be relied upon; and that he had acted as an
court and ruled that:
innocent attorney-in-fact for his mother, and should not be
  held personally liable under a contract that had involved
property belonging to his mother as his principal.
… the resolution of the liability of the defendant in the civil
case on the eleventh cause of action based on the fraudulent  
misrepresentation that the chattel mortgage the defendant
On August 18, 2003, the CA amended its decision, reversing
executed in favor of the said CMS Estate, Inc. on February 20,
itself. It relied upon the ruling in G.R. No. 148193, and held
1957, that his D-6 "Caterpillar" Tractor with Serial No. 9-U-
thusly:
6565 was "free from all liens and encumbrances" will not
determine the criminal liability of the accused in the said
 
Criminal Case No. 56042 for violation of paragraph 2 of Article
319 of the Revised Penal Code. . . . (i) That, even granting for CA-G.R. SP No. 63712 is similar with the case at bench. The
the sake of argument, a prejudicial question is involved in this transactions in controversy, the documents involved; the issue
case, the fact remains that both the crime charged in the of the respondent’s culpability for the questioned transactions
information in the criminal case and the eleventh cause of are all identical in all the proceedings; and it deals with the
action in the civil case are based upon fraud, hence both the same parties with the exception of private complainant
civil and criminal cases could proceed independently of the Unicapital.
other pursuant to Article 33 of the new Civil Code which
provides: "In cases of defamation, fraud and physical injuries,  
a civil action for damages, entirely separate and distinct from
the criminal action shall proceed independently of the criminal However, the Supreme Court, upon review of CA-G.R. SP No.
prosecution, and shall require only a preponderance of 63712, People of the Philippines vs. Rafael Jose Consing, Jr.
evidence." (j) That, therefore, the act of respondent judge in (G.R. No. 148193, January 16, 2003) held that "Civil Case No.
issuing the orders referred to in the instant petition was not 99-95381, for Damages and attachment on account of alleged
made with "grave abuse of discretion." fraud committed by respondent and his mother in selling the
disputed lot to Plus Builders, Inc. is an independent civil action
  under Article 33 of the Civil Code. As such, it will not operate
as a prejudicial question that will justify the suspension of the
In the instant case, Civil Case No. 99-95381, for Damages and criminal case at bar." In view of the aforementioned decision
Attachment on account of the alleged fraud committed by of the Supreme Court, We are thus amending Our May 20,
respondent and his mother in selling the disputed lot to PBI is 2003 decision.
an independent civil action under Article 33 of the Civil Code.
As such, it will not operate as a prejudicial question that will  
justify the suspension of the criminal case at bar. 15
WHEREFORE, the petitioner’s motion for reconsideration is
  GRANTED. The Orders dated November 26, 2001 and March
18, 2002 issued by the respondent Judge are hereby
Turning back to the Makati criminal case, the State moved for REVERSED and SET ASIDE. Respondent Judge is hereby
the reconsideration of the adverse decision of the CA, citing ordered to proceed with the hearing of Criminal Case No. 00-
the ruling in G.R. No. 148193, supra, to the effect that the 120 with dispatch.
Pasig and Manila civil cases did not present a prejudicial
question that justified the suspension of the proceedings in the  
Cavite criminal case, and claiming that under the ruling in G.R.
Page 285 of 304
SO ORDERED.16
 
Consing filed a motion for reconsideration, 17 but the CA denied
the motion through the second assailed resolution of
December 11, 2003.18
 
Hence, this appeal by petition for review on certiorari.
 
Issue
 
Petitioner reiterates his contention that the decision in G.R. No.
148193 was not controlling in relation to C.A.-G.R. No. 71252,
which involved Plus Builders, not Unicapital, the complainant in
Criminal Case No. 00-120. He posits that in arriving at its
amended decision, the CA did not consider the pendency of
the Makati civil case (Civil Case No. 99-1418), which raised a
prejudicial question, considering that the resolution of such
civil action would include the issue of whether he had falsified
a certificate of title or had willfully defrauded Unicapital, the
resolution of either of which would determine his guilt or
innocence in Criminal Case No. 00-120.
 
In its comment,19 the Office of the Solicitor General (OSG)
counters that Unicapital brought the Makati civil case as an
independent civil action intended to exact civil liability
separately from Criminal Case No. 00-120 in a manner fully
authorized under Section 1(a) and Section 2, Rule 111 of the
Rules of Court.20 It argues that the CA correctly took
cognizance of the ruling in G.R. No. 148193, holding in its
challenged amended decision that the Makati civil case, just
like the Manila civil case, was an independent civil action
instituted by virtue of Article 33 of the Civil Code; that the
Makati civil case did not raise a prejudicial question that
justified the suspension of Criminal Case No. 00-120; and that
as finally settled in G.R. No. 148193, the Pasig civil case did
not also raise any prejudicial question, because the sole issue
thereat was whether Consing, as the mere agent of his
mother, had any obligation or liability toward Unicapital.
In his reply,21 Consing submits that the Pasig civil case that he
filed and Unicapital’s Makati civil case were not intended to
delay the resolution of Criminal Case No. 00-120, nor to pre-
empt such resolution; and that such civil cases could be validly
considered determinative of whether a prejudicial question
existed to warrant the suspension of Criminal Case No. 00-120.
 
Did the CA err in reversing itself on the issue of the existence
of a prejudicial question that warranted the suspension of the
proceedings in the Makati criminal case?
 
Ruling
 
The petition for review on certiorari is absolutely meritless.
 
Consing has hereby deliberately chosen to ignore the firm
holding in the ruling in G.R. No. 148193 to the effect that the
proceedings in Criminal Case No. 00-120 could not be
suspended because the Makati civil case was an independent
civil action, while the Pasig civil case raised no prejudicial
question. That was wrong for him to do considering that the
ruling fully applied to him due to the similarity between his
case with Plus Builders and his case with Unicapital.
 
A perusal of Unicapital’s complaint in the Makati civil case
reveals that the action was predicated on fraud. This was
apparent from the allegations of Unicapital in its complaint to
the effect that Consing and de la Cruz had acted in a "wanton,
fraudulent, oppressive, or malevolent manner in offering as
security and later object of sale, a property which they do not
own, and foisting to the public a spurious title." 22 As such, the
action was one that could proceed independently of Criminal
Case No. 00-120 pursuant to Article 33 of the Civil Code, which
states as follows:
 
Article 33. In cases of defamation, fraud, and physical injuries
a civil action for damages, entirely separate and distinct from
the criminal action, may be brought by the injured party. Such
civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of
evidence.
It is well settled that a civil action based on defamation, fraud
and physical injuries may be independently instituted pursuant
to Article 33 of the Civil Code, and does not operate as a
prejudicial question that will justify the suspension of a criminal
case.23 This was precisely the Court’s thrust in G.R. No.
148193, thus:
Page 286 of 304
Moreover, neither is there a prejudicial question if the civil and
the criminal action can, according to law, proceed
independently of each other. Under Rule 111, Section 3 of the
Revised Rules on Criminal Procedure, in the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code, the independent
civil action may be brought by the offended party. It shall
proceed independently of the criminal action and shall require
only a preponderance of evidence. In no case, however, may
the offended party recover damages twice for the same act or
omission charged in the criminal action.
xxxx
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by
respondent and his mother in selling the disputed lot to PBI is
an independent civil action under Article 33 of the Civil Code.
As such, it will not operate as a prejudicial question that will
justify the suspension of the criminal case at bar. 24
Contrary to Consing’s stance, it was not improper for the CA to
apply the ruling in G.R. No. 148193 to his case with Unicapital,
for, although the Manila and Makati civil cases involved
different complainants (i.e., Plus Builders and Unicapital), the
civil actions Plus Builders and Unicapital had separately
instituted against him were undeniably of similar mold, i.e.,
they were both based on fraud, and were thus covered by
Article 33 of the Civil Code. Clearly, the Makati criminal case
could not be suspended pending the resolution of the Makati
civil case that Unicapital had filed.
 
As far as the Pasig civil case is concerned, the issue of
Consing’s being a mere agent of his mother who should not be
criminally liable for having so acted due to the property
involved having belonged to his mother as principal has also
been settled in G.R. No. 148193, to wit:
 
In the case at bar, we find no prejudicial question that would
justify the suspension of the proceedings in the criminal case
(the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not
respondent (Consing) merely acted as an agent of his mother,
Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila
civil case), for Damages and Attachment, the question is
whether respondent and his mother are liable to pay damages
and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of
his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal
liability. An agent or any person may be held liable for
conspiring to falsify public documents. Hence, the
determination of the issue involved in Civil Case No. SCA 1759
for Injunctive Relief is irrelevant to the guilt or innocence of
the respondent in the criminal case for estafa through
falsification of public document.25 (Words in parentheses
supplied; bold underscoring supplied for emphasis)
WHEREFORE, the Court AFFIRMS the amended decision
promulgated on August 18, 2003; and ORDERS petitioner to
pay the costs of suit.
SO ORDERED
Caterpillar vs Samson
CATERPILLAR, INC., Petitioner, versus MANOLO P.
SAMSON, Respondent.
CHICO-NAZARIO, J.: 
 
This is a Petition For Review on Certiorari under Rule 45 of the
1997 Rules of Court, as amended, seeking to set aside the
Decision[1] of the Court of Appeals dated 25 May 2004. The
Court of Appeals in its assailed Decision upheld the Order[2] of
the Regional Trial Court (RTC) of Mandaluyong City, Branch
214, dated 16 May 2003, in Search Warrant Cases Nos. 02-044
to 02-048 directing the immediate release of the articles seized
pursuant to the search warrants issued therein; and the
Order[3] dated 10 November 2003 denying the motion for
reconsideration thereof. 
 
Petitioner Caterpillar, Inc. is a foreign corporation engaged in
the business of manufacturing shoes, clothing items, among
others. Upon the request of petitioner, the Regional
Intelligence Investigation Division-National Capital Region
Police Office (RIID- NCRPO) filed on 22 August 2002 search
warrant applications against respondent Manolo P. Samson for
violations of unfair competition, provided under Section
168.3(a) in relation to Sections 131.3, 123(e) and 170 of
Republic Act No. 8293, otherwise known as the Intellectual
Property Code.[4] On the same day, the trial court issued five
search warrants (Search Warrants Nos. 02-044 to 02-048)
against respondent and his business establishments, namely:
Itti Shoes Corporation, Kolm's Manufacturing, and Caterpillar
Boutique and General Merchandise. Pursuant to the
aforementioned search warrants, various merchandise--
Page 287 of 304
garments, footwear, bags, wallets, deodorant sprays, shoe
cleaners and accessories-- all bearing the trademarks "CAT,"
"CAT AND DESIGN," "CATERPILLAR," "CATERPILLAR AND
DESIGN," "WALKING MACHINES" and/or "Track-type Tractor
and Design" were seized on 27 August 2002.[5] 
On 21 October 2002, respondent filed a Consolidated Motion to
Quash Search Warrants Nos. 02-044 to 02-048. Pending the
resolution thereof, RIID-NCRPO filed five complaints against
the respondent and his affiliate entities before the Department
of Justice (DOJ). On 16 May 2003, the trial court issued an
order denying the respondent's motion to quash, but
nevertheless directed the release of the articles seized on the
ground that no criminal action had been commenced against
respondent.[6] The dispositive portion of the said Order[7] is
quoted hereunder: 
WHEREFORE, all the foregoing considered, the consolidated
motions (sic) to quash Search Warrants (SW-02-044 to SW-02-
048) is DENIED. However, since no criminal action has been
commenced yet, private complainant is directed to immediately
return to respondent the seized items, as (sic) per inventory
submitted to this court, and now kept at the Nissan Gallery,
138 Quezon Avenue, Quezon City with the undertaking from
the latter that said seized items be produced when required by
the court. 
The Motion for Partial Reconsideration filed by the petitioner
on 30 May 2003 was denied by the trial court in an Order
dated 10 November 2003.[8]  aside the Joint Resolution issued by the State Prosecutor[12]
 
The petitioner filed an appeal via certiorari under Rule 65 of
the 1997 Rules of Court. In a Decision dated 25 May 2004, the
Court of Appeals denied the Petition for lack of merit ruling
that there was no arbitrariness in the way the trial court
exercised its discretionary power to release the items seized in
the absence of a criminal action filed in court. The Court of
Appeals also noted that the criminal complaints filed before the
DOJ that underwent preliminary investigation were all
dismissed by the investigating prosecutor. It further reasoned
that even if the DOJ's order of dismissal is overturned, the
respondent executed an undertaking to produce the said items
in court, if so ordered. Moreover, the respondent never denied
the existence of the items and raised as his defense his right
as a prior registrant.[9] 
 
Hence, this petition, where petitioner raised the following
issues: 
 
I. 
THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE
ERROR IN UPHOLDING THE IMMEDIATE RETURN OF THE
SEIZED ITEMS ON THE GROUND THAT NO CRIMINAL ACTION
HAD BEEN FILED IN COURT AGAINST THE PRIVATE
RESPONDENT. 
II. 
THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT
THE SUBSEQUENT DISMISSAL BY THE INVESTIGATING STATE
PROSECUTOR OF THE CRIMINAL COMPLAINTS AGAINST
RESPONDENT JUSTIFIES THE RETURN OF THE SEIZED ITEMS.
[10] 
 
This petition must be denied. 
Pending the disposition of this case, the Chief State Prosecutor,
in a Joint Resolution[11] dated 18 June 2004, denied the
motion for reconsideration filed by the petitioner seeking to set
dated 21 August 2003, dismissing the complaints filed against
the respondent. The respondent alleged this in his Comment
dated 30 September 2004[13] and again in his Memorandum,
filed on 4 May 2005.[14] The records, however, show that the
petitioner failed to allege that it filed a petition for review
before the Secretary of Justice to appeal the aforementioned
Joint Resolution, in accordance with the 2000 National
Prosecution Service Rules on Appeal. Thus, it may be
reasonably concluded that the Joint Resolution of the DOJ has
become final, and no criminal case will be filed in connection
with the five search warrants that were issued by the trial
court. Furthermore, no civil case was filed in connection with
the articles seized. Since there is no pending criminal and civil
case in connection with the articles seized, the return of the
said articles to the respondent are, but, a matter of course. 
 
Notwithstanding that the Joint Resolution, dated 18 June 2004,
had rendered moot the issues raised by the petitioner before
this Court, the issue of whether the trial court acted arbitrarily
Page 288 of 304
when it denied the motion to quash the Warrants of Search
and Seizure and yet released the articles seized, would still
need to be resolved. The petitioner asserts that the seized
articles can only be returned when a criminal case can no
longer possibly materialize since the seized articles are crucial
to the eventual prosecution of the respondent.[15]  Decision[19] that:
The petitioner's assertion is incongruent with the peculiar
circumstances of this case. The articles seized - the thousands
of articles of clothing, footwear, and accessories, among others
- had little, if any, evidentiary value for the criminal action for
unfair competition, which the petitioner expected to file.  said items in court if so ordered. If the private respondent
 
An action for unfair competition is based on the proposition
that no dealer in merchandise should be allowed to dress his
goods in simulation of the goods of another dealer, so that
purchasers desiring to buy the goods of the latter would be
induced to buy the goods of the former.[16] The most usual
devices employed in committing this crime are the simulation
of labels and the reproduction of form, color and general
appearance of the package used by the pioneer manufacturer
or dealer.[17]  Should there have been a need to examine the actual
 
In this case, the petitioner specifically identified the device
employed by the respondent in deceiving the public into
believing the goods that the latter sells are those
manufactured by the former - the imitation of the trademarks
allegedly owned by the petitioner, namely, "CAT,"
"CATERPILLAR," "CATERPILLAR AND DESIGN," "WALKING
MACHINES" and/or "Track-type Tractor and Design" and the
depictions of heavy machinery and equipment, which the
petitioner uses to market its products, as well as the
statements "LICENSED MERCHANDISE CATERPILLAR, INC."
and "WE SHAPE THE THINGS WE BUILD, THEREAFTER THEY
SHAPE US" found on the articles themselves or on their
packaging. 
The respondent does not dispute the use of such trademarks
and admitted that he owned the articles seized. He even raises
the defense that he is the registered owner of the
aforementioned trademarks, and that he had prior use of such
trademarks for his line of products in the Philippines, which he
extensively marketed. He also claims that, even at present,
petitioner markets its products only in some Duty Free shops,
therefore has not established any goodwill in the Philippines
that will enable the consumers to confuse the respondent's
products with those of the petitioner's.[18] 
The admissions of the respondent are sufficient to establish
that he used such trademarks in order to sell merchandise at a
commercial scale, and that the actual products manufactured
by the respondent need not be presented to prove such fact.
In addition, the Court of Appeals correctly notes in its assailed
 
Moreover, granting arguendo that the DOJ order of dismissal
would be overturned, to guarantee the return of the seized
items, the public respondent required the execution of an
undertaking that the private respondent would produce the
would not comply with the court order, the petitioner could
avail of legal safeguards and remedies like having the private
respondent be cited in contempt of court. He could also move
that the criminal court take judicial notice of the legal seizure
or consider the list of the seized items as secondary evidence
thereof. Also in his favor is the presumption that the seized
items if (not) produced, would be adverse to the party
withholding them. 
 
merchandise sold by the respondent, sufficient sample has
already been obtained by the prosecution. It is alleged in the
Affidavits that were executed pursuant to the Application for
the Search Warrants Nos. MC-02-044 to MC-02-048,[20] and in
the Motion for Reconsideration (of the 21 August 2003 Joint
Resolution),[21] filed on 19 September 2003 before the DOJ,
attached as Annex "J" of the petitioner's Petitioner for
Certiorari before the Court of Appeals, that as part of the
investigation was conducted by the RIID-NCRPO, sample
purchases were made of leather shoes, shoe conditioner,
jeans, shirts, socks, belt, and a wallet from various branches of
stores owned by the respondent. The samples obtained from
the sample purchases are sufficient to represent the thousands
of articles that were seized, making it doubtful that the
prosecution would have presented each and every article
seized from the respondent's stores. More likely, the court
would not have allowed the presentation of superfluous
evidence. The merchandise was also photographed, and more
detailed photographs were taken of the particular parts of the
merchandise where the trademarks in dispute were attached
or used. These photographs were in fact attached to the
aforementioned affidavits and Motion for Reconsideration, and
respondent had not denied that these were items bought from
his store. Given the availability of actual samples, as well as
their photographs, there is no need for the court to take
custody of the countless articles seized. 
Lastly, it should be noted that there is no law prohibiting the
trial court from returning the articles seized before a case is
Page 289 of 304
actually filed in court and even before the final determination disturbed except in the overriding social need, and then only
of the prosecutor or the DOJ on whether a case should be filed under the stringent procedural rules.[25] 
in court. In most cases, the release of the articles seized would
be unjustified. However, in the particular circumstances of this  
case, the return of the items would better serve the purposes
WHEREFORE, premises considered, this Court DENIES this
of justice and expediency. 
petition, and AFFIRMS the Decision of the Court of Appeals in
  CA-G.R. SP No. 80899, dated 25 May 2004. Costs against
petitioner. 
There exists a constitutional safeguard against unreasonable
searches and seizures,[22] which refers to the immunity of  
one's person from interference by the government, included in
SO ORDERED. 
which is his residence, his papers and other possessions.[23]
The Constitution, however, does not provide a blanket
prohibition against all searches and seizures, rather the
fundamental protection accorded by the search and seizure
Quimiguing vs Icao
clause is that between persons and the police, there must CARMEN QUIMIGUING, Suing through her parents,
stand the protective authority of a magistrate clothed with the ANTONIO QUIMIGUING and JACOBA CABILIN,
power to issue or refuse such search warrant.[24] Yet, the plaintiffs-appellants, vs. FELIX ICAO, defendant-
responsibilities of the magistrate do not end with the granting appellee.
of the warrant, but extends to the custody of the articles
seized. In exercising custody over these articles, the property Torcuato L. Galon for plaintiffs-appellants.
rights of the owner should be balanced with the social need to Godardo Jacinto for defendant-appellee.
preserve evidence, which will be used in the prosecution of a
REYES, J:
case. 

  Appeal on points of law from an order of the Court of First

Instance of Zamboanga del Norte (Judge Onofre Sison Abalos,
In the instant case, no criminal action had been prosecuted for presiding), in its Civil Case No. 1590, dismissing a complaint
almost a year. Thus, the court had been left with the custody for support and damages, and another order denying
of highly depreciable merchandise. More importantly, these amendment of the same pleading.
highly depreciable articles would have been superfluous if
presented as evidence for the following reasons: (1) the The events in the court of origin can be summarized as
respondent had already admitted that he is the owner of the follows:
merchandise seized, which made use of the trademarks in
dispute; (2) the court required the respondent to execute an  
undertaking to produce the articles seized when the court
Appellant, Carmen Quimiguing, assisted by her parents, sued
requires and had already in its possession a complete inventory
Felix Icao in the court below. In her complaint it was averred
of the items seized as secondary evidence; (3) actual samples
that the parties were neighbors in Dapitan City, and had close
of the respondent's merchandise are in the possession of the
and confidential relations; that defendant Icao, although
police officers who had applied for the search warrant, and
married, succeeded in having carnal intercourse with plaintiff
photographs thereof had been made part of the records, and
several times by force and intimidation, and without her
respondent did not dispute that these were obtained from his
consent; that as a result she became pregnant, despite efforts
stores. Where the purpose of presenting as evidence the
and drugs supplied by defendant, and plaintiff had to stop
articles seized is no longer served, there is no justification for
studying. Hence, she claimed support at P120.00 per month,
severely curtailing the rights of a person to his property. 
damages and attorney's fees.
 

In ordering the return of the articles seized, the trial court had
reasonably exercised its discretion in determining from the
circumstances of the case what constitutes a reasonable and
unreasonable search and seizure. The belief that to value the
privacy of home and person and to afford its constitutional
protection against the long reach of the government is no less
than to value human dignity, and that this privacy must not be
Duly summoned, defendant Icao moved to dismiss for lack of
cause of action since the complaint did not allege that the child
had been born; and after hearing arguments, the trial judge
sustained defendant's motion and dismissed the complaint.
Thereafter, plaintiff moved to amend the complaint to allege
that as a result of the intercourse, plaintiff had later given birth
to a baby girl; but the court, sustaining defendant's objection,

Page 290 of 304

ruled that no amendment was allowable, since the original would become entirely useless and ineffective. Manresa, in his
complaint averred no cause of action. Wherefore, the plaintiff Commentaries (5th Ed.) to the corresponding Article 29 of the
appealed directly to this Court. Spanish Civil Code, clearly points this out:

We find the appealed orders of the court below to be  

untenable. A conceived child, although as yet unborn, is given
"Los derechos atribuidos al nasciturus no son simples
by law a provisional personality of its own for all purposes
expectativas, ni aun en el sentido tecnico que la moderna
favorable to it, as explicitly provided in Article 40 of the Civil
doctrina da a esta figura juridica, sino que constituyen un caso
Code of the Philippines. The unborn child, therefore, has a
de los propiamente llamados 'derechos en estado de
right to support from it progenitors, particularly of the
pendencia'; el nacimiento del sujeto en las condiciones
defendant-appellee (whose paternity is deemed admitted for
previstas por el art. 30, no determina el nacimiento de
the purpose of the motion to dismiss), even if the said child is
aquellos derechos (que ya existian de antemano), sino que se
only "en ventre de sa mere;" just as a conceived child, even if
trata de un hecho que tiene efectos declarativos. (1 Manresa,
as yet unborn, may receive donations as prescribed by Article
Op. cit., page 271)
742 of the same Code, and its being ignored by the parent in
his testament may result in preterition of a forced heir that
 
annuls the institution of the testamentary heir, even if such
child should be born after the death of the testator (Article A second reason for reversing the orders appealed from is that
854, Civil Code) for a married man to force a woman not his wife to yield to his
lust (as averred in the original complaint in this case)
 
constitutes a clear violation of the rights of his victim that
entitles her to claim compensation for the damage caused.
"ART. 742. Donations made to conceived and unborn children
Says Article 21 of the Civil Code of the Philippines:
may be accepted by those persons who would legally
 
represent them if they were already born."
"ART. 21. Any person who wilfully causes loss or injury to
 
another in a manner that is contrary to morals, good customs
"ART. 854. The preterition or omission of one, some, or all of or public policy shall compensate the latter for the damage.'
the compulsory heirs in the direct line, whether living at the
time of the execution of the will or born after the death of the
The rule of Article 21 is supported by Article 2219 of the same
testator, shall annul the institution of heir; but the devises and
Code:
legacies shall be valid insofar as they are not inofficious.
 
 
"ART. 2219. Moral damages may be recovered in the
"If the omitted compulsory heirs should die before the
following and analogous cases:
testator, the institution shall be effectual, without prejudice to
the right of representation."
 
 
(3) Seduction, abduction, rape or other lascivious acts:
It is thus clear that the lower court's theory that Article 291 of
xxx xxx xxx
the Civil Code declaring that support is an obligation of parents
and illegitimate children "does not contemplate support to  
children as yet unborn," violates Article 40 aforesaid, besides
imposing a condition that nowhere appears in the text of (10) Acts and actions referred to in Articles 21, 26, 27, 28 . . ."
Article 291.
 

It is true that Article 40 prescribing that "the conceived child
shall be considered born for all purposes that are favorable to
it" adds further "provided it be born later with the conditions
specified in the following article" (i.e., that the foetus be alive
at the time it is completely delivered from the mother's womb).
This proviso, however, is not a condition precedent to the right
of the conceived child; for if it were, the first part of Article 40
Thus, independently of the right to support of the child she
was carrying, plaintiff herself had a cause of action for
damages under the terms of the complaint; and the order
dismissing it for failure to state a cause of action was doubly in
error.
WHEREFORE, the orders under appeal are reversed and set

Page 291 of 304

aside. Let the case be remanded to the court of origin for  
further proceedings conformable to this decision. Costs against
appellee Felix Icao. So ordered. 2.1 Within Metro Manila up to Marilao, Bulacan - 7 days

 
Continental Steel vs Montano 2.2 Provincial/Outside Metro Manila - 11 days
CONTINENTAL STEEL MANUFACTURING
CORPORATION, Petitioner, vs. HON. ACCREDITED  
VOLUNTARY ARBITRATOR ALLAN S. MONTAÑO and
NAGKAKAISANG MANGGAGAWA NG CENTRO STEEL xxxx
CORPORATION-SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS  
(NMCSC-SUPER), Respondents.
ARTICLE XVIII: OTHER BENEFITS
CHICO-NAZARIO, J.:
 
 
xxxx
Before Us is a Petition for Review on Certiorari, under Rule 45
 
of the Rules of Court, assailing the Decision1 dated 27 February
2008 and the Resolution2 dated 9 May 2008 of the Court of
Section 4. DEATH AND ACCIDENT INSURANCE—The Company
Appeals in CA-G.R. SP No. 101697, affirming the
shall grant death and accidental insurance to the employee or
Resolution3 dated 20 November 2007 of respondent Accredited
his family in the following manner:
Voluntary Arbitrator Atty. Allan S. Montaño (Montaño) granting
bereavement leave and other death benefits to Rolando P.  
Hortillano (Hortillano), grounded on the death of his unborn
child. xxxx

   

The antecedent facts of the case are as follows:
 
Hortillano, an employee of petitioner Continental Steel
Manufacturing Corporation (Continental Steel) and a member
of respondent Nagkakaisang Manggagawa ng Centro Steel
Corporation-Solidarity of Trade Unions in the Philippines for
Empowerment and Reforms (Union) filed on 9 January 2006, a
claim for Paternity Leave, Bereavement Leave and Death and
Accident Insurance for dependent, pursuant to the Collective
Bargaining Agreement (CBA) concluded between Continental
and the Union, which reads:
 
4.3 DEPENDENTS—Eleven Thousand Five Hundred Fifty Pesos
(Php11,550.00) in case of death of the employees legitimate
dependents (parents, spouse, and children). In case the
employee is single, this benefit covers the legitimate parents,
brothers and sisters only with proper legal document to be
presented (e.g. death certificate).4
 
The claim was based on the death of Hortillano’s unborn child.
Hortillano’s wife, Marife V. Hortillano, had a premature delivery
on 5 January 2006 while she was in the 38th week of
pregnancy.5 According to the Certificate of Fetal Death dated 7
January 2006, the female fetus died during labor due to fetal
Anoxia secondary to uteroplacental insufficiency.6

ARTICLE X: LEAVE OF ABSENCE  

  Continental Steel immediately granted Hortillano’s claim for

paternity leave but denied his claims for bereavement leave
xxxx
and other death benefits, consisting of the death and accident
insurance.7
 
 
Section 2. BEREAVEMENT LEAVE—The Company agrees to
grant a bereavement leave with pay to any employee in case
Seeking the reversal of the denial by Continental Steel of
of death of the employee’s legitimate dependent (parents,
Hortillano’s claims for bereavement and other death benefits,
spouse, children, brothers and sisters) based on the following:
the Union resorted to the grievance machinery provided in the
Page 292 of 304
CBA. Despite the series of conferences held, the parties still
failed to settle their dispute,8 prompting the Union to file a
Notice to Arbitrate before the National Conciliation and
Mediation Board (NCMB) of the Department of Labor and
Employment (DOLE), National Capital Region (NCR). 9 In a
Submission Agreement dated 9 October 2006, the Union and
Continental Steel submitted for voluntary arbitration the sole
issue of whether Hortillano was entitled to bereavement leave
and other death benefits pursuant to Article X, Section 2 and
Article XVIII, Section 4.3 of the CBA.10 The parties mutually
chose Atty. Montaño, an Accredited Voluntary Arbitrator, to
resolve said issue.11
 
When the preliminary conferences again proved futile in
amicably settling the dispute, the parties proceeded to submit
their respective Position Papers, 12 Replies,13 and
Rejoinders14 to Atty. Montaño.
 
The Union argued that Hortillano was entitled to bereavement
leave and other death benefits pursuant to the CBA. The Union
maintained that Article X, Section 2 and Article XVIII, Section
4.3 of the CBA did not specifically state that the dependent
should have first been born alive or must have acquired
juridical personality so that his/her subsequent death could be
covered by the CBA death benefits. The Union cited cases
wherein employees of MKK Steel Corporation (MKK Steel) and
Mayer Steel Pipe Corporation (Mayer Steel), sister companies
of Continental Steel, in similar situations as Hortillano were
able to receive death benefits under similar provisions of their
CBAs.
The Union mentioned in particular the case of Steve L. Dugan
(Dugan), an employee of Mayer Steel, whose wife also
prematurely delivered a fetus, which had already died prior to
the delivery. Dugan was able to receive paternity leave,
bereavement leave, and voluntary contribution under the CBA
between his union and Mayer Steel.15 Dugan’s child was only
24 weeks in the womb and died before labor, as opposed to
Hortillano’s child who was already 37-38 weeks in the womb
and only died during labor.
The Union called attention to the fact that MKK Steel and
Mayer Steel are located in the same compound as Continental
Steel; and the representatives of MKK Steel and Mayer Steel
who signed the CBA with their respective employees’ unions
were the same as the representatives of Continental Steel who
signed the existing CBA with the Union.
 
Finally, the Union invoked Article 1702 of the Civil Code, which
provides that all doubts in labor legislations and labor contracts
shall be construed in favor of the safety of and decent living
for the laborer.
On the other hand, Continental Steel posited that the express
provision of the CBA did not contemplate the death of an
unborn child, a fetus, without legal personality. It claimed that
there are two elements for the entitlement to the benefits,
namely: (1) death and (2) status as legitimate dependent,
none of which existed in Hortillano’s case. Continental Steel,
relying on Articles 40, 41 and 4216 of the Civil Code, contended
that only one with civil personality could die. Hence, the
unborn child never died because it never acquired juridical
personality. Proceeding from the same line of thought,
Continental Steel reasoned that a fetus that was dead from the
moment of delivery was not a person at all. Hence, the term
dependent could not be applied to a fetus that never acquired
juridical personality. A fetus that was delivered dead could not
be considered a dependent, since it never needed any support,
nor did it ever acquire the right to be supported.
 
Continental Steel maintained that the wording of the CBA was
clear and unambiguous. Since neither of the parties qualified
the terms used in the CBA, the legally accepted definitions
thereof were deemed automatically accepted by both parties.
The failure of the Union to have unborn child included in the
definition of dependent, as used in the CBA – the death of
whom would have qualified the parent-employee for
bereavement leave and other death benefits – bound the
Union to the legally accepted definition of the latter term.
Continental Steel, lastly, averred that similar cases involving
the employees of its sister companies, MKK Steel and Mayer
Steel, referred to by the Union, were irrelevant and
incompetent evidence, given the separate and distinct
personalities of the companies. Neither could the Union sustain
its claim that the grant of bereavement leave and other death
benefits to the parent-employee for the loss of an unborn child
constituted "company practice."
On 20 November 2007, Atty. Montaño, the appointed
Accredited Voluntary Arbitrator, issued a Resolution17 ruling
that Hortillano was entitled to bereavement leave with pay and
death benefits.
 
Page 293 of 304
Atty. Montaño identified the elements for entitlement to said
benefits, thus:
 
This Office declares that for the entitlement of the benefit of
bereavement leave with pay by the covered employees as
provided under Article X, Section 2 of the parties’ CBA, three
(3) indispensable elements must be present: (1) there is
"death"; (2) such death must be of employee’s "dependent";
and (3) such dependent must be "legitimate".
On the otherhand, for the entitlement to benefit for death and
accident insurance as provided under Article XVIII, Section 4,
paragraph (4.3) of the parties’ CBA, four (4) indispensable
elements must be present: (a) there is "death"; (b) such death
must be of employee’s "dependent"; (c) such dependent must
be "legitimate"; and (d) proper legal document to be
presented.18
 
Atty. Montaño found that there was no dispute that the death
of an employee’s legitimate dependent occurred. The fetus had
the right to be supported by the parents from the very
moment he/she was conceived. The fetus had to rely on
another for support; he/she could not have existed or
sustained himself/herself without the power or aid of someone
else, specifically, his/her mother. Therefore, the fetus was
already a dependent, although he/she died during the labor or
delivery. There was also no question that Hortillano and his
wife were lawfully married, making their dependent, unborn
child, legitimate.
In the end, Atty. Montaño decreed:
 
WHEREFORE, premises considered, a resolution is hereby
rendered ORDERING [herein petitioner Continental Steel] to
pay Rolando P. Hortillano the amount of Four Thousand Nine
Hundred Thirty-Nine Pesos (P4,939.00), representing his
bereavement leave pay and the amount of Eleven Thousand
Five Hundred Fifty Pesos (P11,550.00) representing death
benefits, or a total amount of P16,489.00
The complaint against Manuel Sy, however, is ORDERED
DISMISSED for lack of merit.
 
All other claims are DISMISSED for lack of merit.
 
Further, parties are hereby ORDERED to faithfully abide with
the herein dispositions.
 
Aggrieved, Continental Steel filed with the Court of Appeals a
Petition for Review on Certiorari,19 under Section 1, Rule 43 of
the Rules of Court, docketed as CA-G.R. SP No. 101697.
Continental Steel claimed that Atty. Montaño erred in granting
Hortillano’s claims for bereavement leave with pay and other
death benefits because no death of an employee’s dependent
had occurred. The death of a fetus, at whatever stage of
pregnancy, was excluded from the coverage of the CBA since
what was contemplated by the CBA was the death of a legal
person, and not that of a fetus, which did not acquire any
juridical personality. Continental Steel pointed out that its
contention was bolstered by the fact that the term death was
qualified by the phrase legitimate dependent. It asserted that
the status of a child could only be determined upon said child’s
birth, otherwise, no such appellation can be had. Hence, the
conditions sine qua non for Hortillano’s entitlement to
bereavement leave and other death benefits under the CBA
were lacking.
 
The Court of Appeals, in its Decision dated 27 February 2008,
affirmed Atty. Montaño’s Resolution dated 20 November 2007.
The appellate court interpreted death to mean as follows:
[Herein petitioner Continental Steel’s] exposition on the legal
sense in which the term "death" is used in the CBA fails to
impress the Court, and the same is irrelevant for ascertaining
the purpose, which the grant of bereavement leave and death
benefits thereunder, is intended to serve. While there is no
arguing with [Continental Steel] that the acquisition of civil
personality of a child or fetus is conditioned on being born
alive upon delivery, it does not follow that such event of
premature delivery of a fetus could never be contemplated as
a "death" as to be covered by the CBA provision, undoubtedly
an event causing loss and grief to the affected employee, with
whom the dead fetus stands in a legitimate relation.
[Continental Steel] has proposed a narrow and technical
significance to the term "death of a legitimate dependent" as
condition for granting bereavement leave and death benefits
under the CBA. Following [Continental Steel’s] theory, there
can be no experience of "death" to speak of. The Court,
however, does not share this view. A dead fetus simply cannot
be equated with anything less than "loss of human life",
especially for the expectant parents. In this light, bereavement
Page 294 of 304
leave and death benefits are meant to assuage the employee
and the latter’s immediate family, extend to them solace and
support, rather than an act conferring legal status or
personality upon the unborn child. [Continental Steel’s]
insistence that the certificate of fetal death is for statistical
purposes only sadly misses this crucial point. 20
 
Accordingly, the fallo of the 27 February 2008 Decision of the
Court of Appeals reads:
 
WHEREFORE, premises considered, the present petition is
hereby DENIED for lack of merit. The assailed Resolution dated
November 20, 2007 of Accredited Voluntary Arbitrator Atty.
Allan S. Montaño is hereby AFFIRMED and UPHELD.
With costs against [herein petitioner Continental Steel]. 21
In a Resolution22 dated 9 May 2008, the Court of Appeals
denied the Motion for Reconsideration23 of Continental Steel.
Hence, this Petition, in which Continental Steel persistently
argues that the CBA is clear and unambiguous, so that the
literal and legal meaning of death should be applied. Only one
with juridical personality can die and a dead fetus never
acquired a juridical personality.
We are not persuaded.
 
As Atty. Montaño identified, the elements for bereavement
leave under Article X, Section 2 of the CBA are: (1) death; (2)
the death must be of a dependent, i.e., parent, spouse, child,
brother, or sister, of an employee; and (3) legitimate relations
of the dependent to the employee. The requisites for death
and accident insurance under Article XVIII, Section 4(3) of the
CBA are: (1) death; (2) the death must be of a dependent,
who could be a parent, spouse, or child of a married
employee; or a parent, brother, or sister of a single employee;
and (4) presentation of the proper legal document to prove
such death, e.g., death certificate.
It is worthy to note that despite the repeated assertion of
Continental Steel that the provisions of the CBA are clear and
unambiguous, its fundamental argument for denying
Hortillano’s claim for bereavement leave and other death
benefits rests on the purportedly proper interpretation of the
terms "death" and "dependent" as used in the CBA. If the
provisions of the CBA are indeed clear and unambiguous, then
there is no need to resort to the interpretation or construction
of the same. Moreover, Continental Steel itself admitted that
neither management nor the Union sought to define the
pertinent terms for bereavement leave and other death
benefits during the negotiation of the CBA.
 
The reliance of Continental Steel on Articles 40, 41 and 42 of
the Civil Code for the legal definition of death is misplaced.
Article 40 provides that a conceived child acquires personality
only when it is born, and Article 41 defines when a child is
considered born. Article 42 plainly states that civil personality is
extinguished by death.
First, the issue of civil personality is not relevant herein.
Articles 40, 41 and 42 of the Civil Code on natural persons,
must be applied in relation to Article 37 of the same Code, the
very first of the general provisions on civil personality, which
reads:
Art. 37. Juridical capacity, which is the fitness to be the subject
of legal relations, is inherent in every natural person and is lost
only through death. Capacity to act, which is the power to do
acts with legal effect, is acquired and may be lost.
We need not establish civil personality of the unborn child
herein since his/her juridical capacity and capacity to act as a
person are not in issue. It is not a question before us whether
the unborn child acquired any rights or incurred any
obligations prior to his/her death that were passed on to or
assumed by the child’s parents. The rights to bereavement
leave and other death benefits in the instant case pertain
directly to the parents of the unborn child upon the latter’s
death.
 
Second, Sections 40, 41 and 42 of the Civil Code do not
provide at all a definition of death. Moreover, while the Civil
Code expressly provides that civil personality may be
extinguished by death, it does not explicitly state that only
those who have acquired juridical personality could die.
And third, death has been defined as the cessation of
life.24 Life is not synonymous with civil personality. One need
Page 295 of 304
not acquire civil personality first before he/she could die. Even
a child inside the womb already has life. No less than the
Constitution recognizes the life of the unborn from
conception,25 that the State must protect equally with the life
of the mother. If the unborn already has life, then the
cessation thereof even prior to the child being delivered,
qualifies as death.
 
Likewise, the unborn child can be considered a dependent
under the CBA. As Continental Steel itself defines, a dependent
is "one who relies on another for support; one not able to exist
or sustain oneself without the power or aid of someone else."
Under said general definition,26 even an unborn child is a
dependent of its parents. Hortillano’s child could not have
reached 38-39 weeks of its gestational life without depending
upon its mother, Hortillano’s wife, for sustenance. Additionally,
it is explicit in the CBA provisions in question that
the dependent may be the parent, spouse, or child of a
married employee; or the parent, brother, or sister of a single
employee. The CBA did not provide a qualification for the child
dependent, such that the child must have been born or must
have acquired civil personality, as Continental Steel avers.
Without such qualification, then child shall be understood in its
more general sense, which includes the unborn fetus in the
mother’s womb.
The term legitimate merely addresses the dependent child’s
status in relation to his/her parents. In Angeles v.
Maglaya,27 we have expounded on who is a legitimate
child, viz:
A legitimate child is a product of, and, therefore, implies a valid
and lawful marriage. Remove the element of lawful union and
there is strictly no legitimate filiation between parents and
child. Article 164 of the Family Code cannot be more emphatic
on the matter: "Children conceived or born during the
marriage of the parents are legitimate." (Emphasis ours.)
Conversely, in Briones v. Miguel,28 we identified an illegitimate
child to be as follows:
 
The fine distinctions among the various types of illegitimate
children have been eliminated in the Family Code. Now, there
are only two classes of children -- legitimate (and those who,
like the legally adopted, have the rights of legitimate children)
and illegitimate. All children conceived and born outside a
valid marriage are illegitimate, unless the law itself gives them
legitimate status. (Emphasis ours.)
 
It is apparent that according to the Family Code and the afore-
cited jurisprudence, the legitimacy or illegitimacy of a child
attaches upon his/her conception. In the present case, it was
not disputed that Hortillano and his wife were validly married
and that their child was conceived during said marriage, hence,
making said child legitimate upon her conception.1avvphi1
Also incontestable is the fact that Hortillano was able to comply
with the fourth element entitling him to death and accident
insurance under the CBA, i.e., presentation of the death
certificate of his unborn child.
Given the existence of all the requisites for bereavement leave
and other death benefits under the CBA, Hortillano’s claims for
the same should have been granted by Continental Steel.
We emphasize that bereavement leave and other death
benefits are granted to an employee to give aid to, and if
possible, lessen the grief of, the said employee and his family
who suffered the loss of a loved one. It cannot be said that the
parents’ grief and sense of loss arising from the death of their
unborn child, who, in this case, had a gestational life of 38-39
weeks but died during delivery, is any less than that of parents
whose child was born alive but died subsequently.
Being for the benefit of the employee, CBA provisions on
bereavement leave and other death benefits should be
interpreted liberally to give life to the intentions thereof. Time
and again, the Labor Code is specific in enunciating that in
case of doubt in the interpretation of any law or provision
affecting labor, such should be interpreted in favor of
labor.29  In the same way, the CBA and CBA provisions should
be interpreted in favor of labor. In Marcopper Mining v.
National Labor Relations Commission,30 we pronounced:
Finally, petitioner misinterprets the declaration of the Labor
Arbiter in the assailed decision that "when the pendulum of
judgment swings to and fro and the forces are equal on both
sides, the same must be stilled in favor of labor." While
petitioner acknowledges that all doubts in the interpretation of
the Labor Code shall be resolved in favor of labor, it insists that
what is involved-here is the amended CBA which is essentially
a contract between private persons. What petitioner has lost
sight of is the avowed policy of the State, enshrined in our
Constitution, to accord utmost protection and justice to labor,
a policy, we are, likewise, sworn to uphold.
Page 296 of 304
 
In Philippine Telegraph & Telephone Corporation v. NLRC  [183
SCRA 451 (1990)], we categorically stated that:
When conflicting interests of labor and capital are to be
weighed on the scales of social justice, the heavier influence of
the latter should be counter-balanced by sympathy and
compassion the law must accord the underprivileged worker.
 
Likewise, in Terminal Facilities and Services Corporation v.
NLRC  [199 SCRA 265 (1991)], we declared:
 
Any doubt concerning the rights of labor should be resolved in
its favor pursuant to the social justice policy.
IN VIEW WHEREOF, the Petition is DENIED. The Decision
dated 27 February 2008 and Resolution dated 9 May 2008 of
the Court of Appeals in CA-G.R. SP No. 101697, affirming the
Resolution dated 20 November 2007 of Accredited Voluntary
Arbitrator Atty. Allan S. Montaño, which granted to Rolando P.
Hortillano bereavement leave pay and other death benefits in
the amounts of Four Thousand Nine Hundred Thirty-Nine
Pesos (P4,939.00) and Eleven Thousand Five Hundred Fifty
Pesos (P11,550.00), respectively, grounded on the death of his
unborn child, are AFFIRMED. Costs against Continental Steel
Manufacturing Corporation.
 
SO ORDERED.
Mayor vs Tiu
MANUELA AZUCENA MAYOR, PETITIONER, VS. EDWIN
TIU AND DAMIANA CHARITO MARTY, RESPONDENTS.
MENDOZA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court assailing the October 5, 2011[1] and September
24, 2012[2]
Resolutions of the Court of Appeals (CA) in CA-G.R. SP No.
06256, which dismissed the petition filed by Remedios Tiu
(Remedios) and Manuela Azucena Mayor (Manuela) for
procedural infirmities. The said CA petition challenged the
January 20, 2011[3] and June 10, 2011[4] Orders of the Regional
Trial Court, Branch 6, Tacloban City (RTC-Br. 6), in Sp. Proc.
No. 2008-05-30, a case for Probate of Last Will and
Testament and Issuance of Letters of Testamentary.
The Antecedents:
On May 25, 2008, Rosario Guy-Juco Villasin Casilan (Rosario),
the widow of the late Primo Villasin (Primo), passed away and
left a holographic Last Will and Testament,[5] wherein she
named her sister, Remedios Tiu (Remedios), and her niece,
Manuela Azucena Mayor (Manuela), as executors. Immediately
thereafter, Remedios and Manuela filed a petition for the
probate of Rosario's holographic will[6] with prayer for the
issuance of letters testamentary (probate proceedings). The
petition was raffled to the Regional Trial Court, Branch 9,
Tacloban City (RTC-Br. 9) and docketed as Sp. Proc. No.
2008-05-30. They averred that Rosario left properties valued
at approximately P2.5 million.
On May 29, 2008, respondent Damiana Charito Marty (Marty)
claiming to be the adopted daughter of Rosario, filed a petition
for letters of administration before the RTC, Branch 34,
Tacloban City (RTC-Br. 34), docketed as Sp. Proc. No. 2008-
05-32, but it was not given due course because of the
probate proceedings. Per records, this dismissal is subject of a
separate proceeding filed by Marty with the CA Cebu City,
docketed as CA G.R. SP No. 04003.[7]
On June 12, 2008, in its Order,[8] the RTC-Br. 9 found the
petition for probate of will filed by Remedios and Manuela as
sufficient in form and substance and set the case for hearing.
Consequently, Marty filed her Verified Urgent Manifestation
and Motion,[9] dated June 23, 2008, stating that Remedios kept
the decedent Rosario a virtual hostage for the past ten (10)
years and her family was financially dependent on her which
led to the wastage and disposal of the properties owned by her
and her husband, Primo. Marty averred that until the alleged
will of the decedent could be probated and admitted,
Remedios
and her ten (10) children had no standing to either possess or
control the properties comprising the estate of the Villasins.
She prayed for the probate court to:
1) order an immediate inventory of all the properties subject of
the proceedings;
2) direct the tenants of the estate, namely, Mercury Drug and
Chowking, located at Primrose Hotel, to deposit their rentals
with the court;
Page 297 of 304
 
3) direct Metrobank, P. Burgos Branch, to freeze the accounts
in the name of Rosario, Primrose Development Corporation
(Primrose) or Remedios; and
4) lock up the Primrose Hotel in order to preserve the property
until final disposition by the court.
On July 8, 2008, Remedios and Manuela filed their
Comment/Opposition[10] to the urgent manifestation averring
that Marty was not an adopted child of the Villasins based on a
certification issued by the Office of the Clerk of Court of
Tacloban City, attesting that no record of any adoption
proceedings involving Marty existed in their records. They also
argued that the probate court had no jurisdiction over the
properties mistakenly claimed by Marty as part of Rosario's
estate because these properties were actually owned by, and
titled in the name of, Primrose. Anent the prayer to direct the
tenants to deposit the rentals to the probate court, Remedios
and Manuela countered that the probate court had no
jurisdiction over properties owned by third persons, particularly
by Primrose, the latter having a separate and distinct
personality from the decedent's estate.
In her Reply,[11] dated July 15, 2008, Marty cited an order of
the Court of First Instance of Leyte (CFI Leyte) in SP No. 1239,
[12]
 claiming that as early as March 3, 1981, the veil of
corporate entity of Primrose was pierced on the ground that it
was a closed family corporation controlled by Rosario after
Primo's death. Thus, Marty alleged that "piercing" was proper
in the case of Rosario's estate because the incorporation of
Primrose was founded on a fraudulent consideration, having
been done in contemplation of Primo's death.
Further, on July 22, 2008, in her Opposition to the Petition for
the Approval of the Will of the Late Rosario Guy-Juco Villasin
Casilan,[13] Marty impugned the authenticity of her holographic
will.
Meanwhile, Edwin Tiu (Edwin), a son of Remedios, also filed
his Opposition,[14] dated June 13, 2008.
After a protracted exchange of pleadings, the parties submitted
their respective memoranda.
The January 14, 2009 Order
In its January 14, 2009 Order,[15] the RTC-Br. 9 granted the
motion of Marty and appointed the OIC Clerk of Court as
special administrator of the Estate. The Probate Court also
ordered Mercury Drug and Chowking to deposit the rental
income to the court and Metrobank to freeze the bank
accounts mentioned in the motion of Marty. The doctrine of
piercing the corporate veil was applied in the case considering
that Rosario had no other properties that comprised her estate
other than Primrose. According to the probate court, for the
best interest of whoever would be adjudged as the legal heirs
of the Estate, it was best to preserve the properties from
dissipation.
On January 22, 2009, Remedios and Manuela filed their Motion
for Inhibition[16] on the ground of their loss of trust and
confidence in RTC-Br. 9 Presiding Judge Rogelio C. Sescon
(Judge Sescon) to dispense justice. Later, they also filed their
Motion for Reconsideration Ad Cautelam,[17] dated February 3,
2009, arguing that Rosario's estate consisted only of shares of
stock in Primrose and not the corporation itself. Thus, the
probate court could not order the lessees of the corporation to
remit the rentals to the Estate's administrator. With regard to
the appointment of a special administrator, Remedios and
Manuela insisted that it be recalled. They claimed that if ever
there was a need to appoint one, it should be the two of them
because it was the desire of the decedent in the will subject of
the probation proceedings.
In its Order,[18] dated March 27, 2009, the RTC-Br. 9 denied
the motion for reconsideration for lack of merit and affirmed its
January 14, 2009 Order. The presiding judge, Judge Sescon,
also granted the motion for inhibition and ordered that the
records of the case be referred to the RTC Executive Judge for
reraffling. The case was later re-raffled to RTC-Br.6, Judge
Alphinor C. Serrano, presiding judge.
Aggrieved by the denial of their motion for reconsideration,
Remedios and Manuela filed a petition for certiorari with the
CA in Cebu City, docketed as CA-G.R. S.P. No. 04254, assailing
the January 14, 2009 and March 27, 2009 Orders of the RTC-
Br. 9.[19]
Ruling of the CA
In its October 16, 2009 Decision,[20] the CA reversed the
assailed orders of the RTC Br. 9, except as to the appointment
of a special administrator insofar as this relates to properties
specifically belonging to the "Estate." It held that Primrose
had a personality separate and distinct from the estate
of the decedent and that the probate court had no
jurisdiction to apply the doctrine of piercing the
corporate veil.
According to the CA, nowhere in the assailed orders of the
probate court was it stated that its determination of the title of
the questioned properties was only for the purpose of
determining whether such properties ought to be included in
the inventory. When the probate court applied the doctrine of
"piercing," in effect, it adjudicated with finality the ownership
Page 298 of 304
of the properties in favor of the Estate. The CA stated that
RTC-Br. 9 had no jurisdiction to adjudicate ownership of a
property claimed by another based on adverse title; and that
questions like this must be submitted to a court of general
jurisdiction and not to a probate court.
The CA added that assuming that the probate court's
determination on the issue of ownership was merely intended
to be provisional, Marty's contentions still had no merit. The
properties, which she claimed to be part of the estate of
Rosario and over which she claimed co-ownership, comprised
of real properties registered under the Torrens system. As
such, Primrose was considered the owner until the titles to
those properties were nullified in an appropriate ordinary
action. The CA further stated that the RTC erroneously relied
on the order issued by the CFI Leyte in 1981, in the probate
proceedings involving the estate of Primo. Whatever
determination the CFI made at the time regarding the title of
the properties was merely provisional, hence, not conclusive as
to the ownership.
By reason of the favorable decision by the CA, Remedios and
Manuela filed their Motion to Partially Revoke the Writ of
Execution Enforcing the January 14, 2009 Order of the
Honorable Court and Manifestation in Compliance with the
October 21, 2009 Order (Ad Cautelam),[21] dated October 27,
2009.
In its Order,[22] dated November 17, 2009, the RTC-Br.
6 partially granted the motion as it revoked the power of the
special administrator to oversee the day-to-day operations of
Primrose. It also revoked the order with respect to Mercury
Drug and Chowking, reasoning out that the said
establishments dealt with Primrose, which had a personality
distinct and separate from the estate of the decedent. In the
said order, Atty. Blanche A. Sa1ino nominated by oppositors
Marty and Edwin, was appointed special administrator to
oversee the day-to-day operations of the estate. The same
order also upheld the January 14, 2009 Order, as to the
conduct and inventory of all the properties comprising the
estate.
This order was not questioned or appealed by the
parties.
Omnibus Motion
On September 24, 2010, or almost ten (10) months after the
November 17, 2009 Order of the probate court was issued,
Marty, together with her new counsel, filed her Omnibus
Motion,[23] praying for the probate court to: 1) order Remedios
and Manuela to render an accounting of all the properties and
assets comprising the estate of the decedent; 2) deposit or
consign all rental payments or other passive income derived
from the properties comprising the estate; and 3) prohibit the
disbursement of funds comprising the estate of the decedent
without formal motion and approval by the probate court.
Ruling of the RTC-Br. 6
In its January 20, 2011 Order, the RTC-Br. 6 granted Marty's
Omnibus Motion. Although it agreed with the October 16, 2009
CA Decision reversing the January 14, 2009 Order of the RTC-
Br. 9, nonetheless, it acknowledged the urgency and necessity
of appointing a special administrator. According to the probate
court, considering that there was clear evidence of a significant
decrease of Rosario's shares in the outstanding capital stock of
Primrose,[24]prudence dictated that an inquiry into the validity
of the transfers should be made. A final determination of this
matter would be outside the limited jurisdiction of the probate
court, but it was likewise settled that the power to institute an
action for the recovery of a property claimed to be part of the
estate was normally lodged with the executor or administrator.
Thus, the probate court disposed:
WHEREFORE, for the reasons aforestated, and so as not to
render moot any action that the special administrator, or the
regular administrator upon the latter's qualification and
appointment, may deem appropriate to take on the matter (i.e.
Whether or not to institute in the name of the estate the
appropriate action for the recovery of the shares of stock), this
Court hereby GRANTS Oppositor Marty's Omnibus Motion,
dated September 24, 2010, and thus hereby:
1. DIRECTS petitioners, either individually or jointly, to:
(a) RENDER AN ACCOUNTING of all the properties and
assets comprising the estate of the decedent that may have
come into their possession; and, 
 
(b) DEPOSIT OR CONSIGN all the rentals payments or such
other passive incomes from the properties and assets
registered in the name of Primrose Development Corporation,
including all income derived from the Primrose Hotel and the
lease contracts with Mercury Drug and Chowking Restaurant,
both within fifteen (15) days from receipt of this Order;
2. DIRECTS the Special Administrator to take possession and
charge of the properties comprising the decedent's estate,
specially those pertaining to the sharesholding of the decedent
in Primrose Development Corporation, to determine whether or
not action for the recovery of the shares of stock supposedly
transferred from the decedent to petitioners Remedios Tiu,
Manuela Azucena Mayor should be instituted in the name of
the estate against the said transferees and to submit a Report
Page 299 of 304
on the foregoing matters to this Court, within fifteen (15) days OF COURT AND DECLARED THAT THERE WAS NO
from receipt of this Order; and, PROPER PROOF OF SERVICE BY REGISTERED MAIL.

3. ORDERS that no funds comprising the estate of the  

decedent shall be disbursed without formal Motion therefor,
II.
with the conformity of the Special Administrator, duly approved
by this Court.
THE HONORABLE COURT OF APPEALS COMMITTED
SO ORDERED.[25] [Underscoring supplied]
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
 
IT MISAPPLIED JURISPRUDENCE AND RULE 65 AND IT
The partial motion for reconsideration of the above order filed HELD THAT PETITIONER MAYOR DID NOT COMPLY
by Remedios and Manuela was denied in the other assailed WITH THE MATERIAL DATE RULE.
order of the RTC-Br. 6, dated June 10, 2011.[26]
 
Dissatisfied, Remedios and Manuela availed of the special civil
III.
action of certiorari under Rule 65, and filed a petition before
the CA.
THE HONORABLE COURT OF APPEALS COMMITTED
Action by the CA GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
The CA, however, in its October 5, 2011 Resolution, IT DECLARED THAT PETITIONER MAYOR FAILED TO
[27]
 dismissed the same based on the following infirmities: 1) COMPLY WITH THE REQUIREMENT OF SECTION 1,
there was no proper proof of service of a copy of the petition RULE 65 FOR FAILING TO ATTACH CERTIFIED TRUE
on the respondents which was sent by registered mail; 2) COPY OF THE ORDER OF THE TRIAL COURT.
petitioners failed to indicate on the petition the material date
when the motion for reconsideration was filed; 3) the copy of  
the assailed order was not certified true and correct by the
officer having custody of the original copy; and 4) the serial IV.
number of the commission of the notary public, the province-
city where he was commissioned, the office address of the
THE HONORABLE COURT OF APPEALS COMMITTED
notary public and the roll of attorney's number were not
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
properly indicated on the verification and certification of non-
OF LAW AND THE RULES WARRANTING REVIEW WHEN
forum shopping.
IT DECLARED THAT PETITIONER MAYOR DID NOT
COMPLY WITH THE REQUIREMENT OF VERIFICATION
Remedios and Manuela moved for reconsideration of the
AND CERTIFICATION AGAINST FORUM SHOPPING.
assailed CA resolution, but to no avail, as the appellate court
denied the motion in its September 24, 2012 Resolution.
 

Hence, this petition before the Court, filed only by Manuela as V.

Remedios had also passed away, and anchored on the
following:
THE HONORABLE COURT OF APPEALS COMMITTED
  GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
GROUNDS
IT ALLOWED TECHNICALITIES TO BE USED TO DEFEAT
 
SUBSTANTIAL RIGHT OF THE PARTIES.
I.
 

VI.
THE HONORABLE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN PETITIONERS HAVE GOOD CAUSE AND A
IT MISAPPLIED SECTION 13, RULE 13 OF THE RULES MERITORIOUS CASE AGAINST HEREIN RESPONDENTS

Page 300 of 304

AS PARAGRAPH 1(B) OF THE DISPOSITIVE PORTION
OF THE FIRST ASSAILED ORDER SHOULD HAVE BEEN
REVERSED BECAUSE IT OVERTURNS THE DECISION OF
THE COURT OF APPEALS DATED 16 OCTOBER 2009
WHICH HAS LONG BECOME FINAL AND EXECUTORY.
[28]
Petitioner Manuela argued that:
 
1) There was actual compliance with Section 13, Rule 13 of the
Rules of Court. The CA petition was accompanied by a
notarized affidavit of service and filing of registered mail. At
the time the petition was filed, this was the best evidence of
the service. The other registry receipts for the other parties
were also attached to the petition. Further, the available
registry return card was furnished the CA in the motion for
reconsideration.[29]
2) The failure of the petition to comply with the rule on a
statement of material dates could be excused because the
dates were evident from the records.[30]
 
3) The petitioner went to the RTC of Tacloban to secure
certified true copies of the assailed orders. Only the stamped
name of the Clerk of Court, however, appeared thereon,
because the particular branch had no stamp pad which had the
phrase for certification. The branch did not even have a
typewriter in order to affix the phrase on the copies. These
inadequacies could not be attributed to the petitioners. [31]
4) The lack of information pertaining to the notary public in the
verification and certification against forum-shopping should not
invalidate the same because, again, it was not attributable to
the parties.[32]
 
5) Technicalities should never be used to defeat the
substantive rights of a party.[33]
 
 
In its January 23, 2013 Resolution[34] the Court ordered the
respondents to file their respective comments. Marty, in her
Comment, insisted that the petitioner failed to comply with the
procedural requirements as stated by the CA.[35]
In her Reply to Comment,[36] petitioner Manuela clarified that
the affidavit of service was executed on August 31, 2011,
which was after the petition was signed by the lawyers and
after it was verified by the petitioner herself. After contesting
Marty's arguments on the alleged procedural infirmities of the
petitions with the CA and this Court, Manuela asserted that the
final and executory October 16, 2009 Decision of the CA
already held that Primrose had a personality separate and
distinct from the estate of decedent Rosario.
Meanwhile, in his Manifestation,[37] dated May 29, 2013, Edwin
affirmed that he and Manuela decided to patch up their
differences and agreed to settle amicably. Accordingly, he
manifested that he was withdrawing from the case pursuant to
their agreement.
On June 18, 2014, Manuela filed her Motion for Issuance of
Temporary Restraining Order and Writ of Preliminary
Injunction[38] on the ground that a flurry of orders had been
issued by the RTC-Br. 6 in the implementation of the assailed
January 20, 2011 Order, such as the Order,[39] dated May 27,
2013, wherein the probate court vaguely ordered "the
inventory of the exact extent of the 'decedent's estate.'" Then
another order was issued appointing an auditing firm to
conduct an inventory/audit of the Estate including the rentals
and earnings derived from the lease of Mercury Drug and
Chowking Restaurant, as tenants of Primrose.[40] According to
petitioner Manuela, although an inventory of the assets of the
decedent was proper, the probate court ordered an inventory
of the assets of Primrose, a separate and distinct entity.
Manuela asserts that it was clearly in error.
In her Supplement to the Motion for Issuance of Temporary
Restraining Order and Writ of Preliminary Injunction,[41]dated
June 17, 2013, Manuela informed the Court that the inventory
and accounting of Primrose would already commence on June
19, 2013.
Marty filed her Opposition,[42] dated July 3, 2013, stating that
the petition of Manuela had been rendered moot and academic
as the probate court had declared her as the sole heir of
Rosario and appointed her administrator of the estate. She
argued that an injunctive relief would work injustice to the
estate because of the total assimilation by petitioner of the
shareholdings of the decedent in Primrose and her share in the
corporation's income corresponding to her shareholdings.
Finding that the requisites for preliminary injunctive relief were
present,[43] the Court issued the TRO[44] in favor of Manuela on
October 14, 2013. At the outset, the Court was convinced that
the rights of Primrose sought to be protected by the grant of
injunctive relief were material and substantial and the TRO was
issued in order to prevent any irreparable damage to a
corporate entity that could arise from the conduct of an
accounting by the court-appointed inventory.
 
The Court's Ruling
Page 301 of 304
 
The Court now resolves the subject case by the issuance of a
permanent injunction, as prayed for by petitioner Manuela.
This position is supported by law and jurisprudence, as follows:
First. Artificial persons include (1) a collection or succession of
natural persons forming a corporation; and (2) a collection of
property to which the law attributes the capacity of having
rights and duties. This class of artificial persons is recognized
only to a limited extent in our law. Example is the estate of a
bankrupt or deceased person.[45] From this pronouncement, it
can be gleaned that the estate of the deceased person is a
juridical person separate and distinct from the person of the
decedent and any other corporation. This status of an estate
comes about by operation of law. This is in consonance with
the basic tenet under corporation law that a corporation has a
separate personality distinct from its stockholders and from
other corporations to which it may be connected. [46]
Second. The doctrine of piercing the corporate veil has no
relevant application in this case. Under this doctrine, the court
looks at the corporation as a mere collection of individuals or
an aggregation of persons undertaking business as a group,
disregarding the separate juridical personality of the
corporation unifying the group. Another formulation of this
doctrine is that when two business enterprises are owned,
conducted and controlled by the same parties, both law and
equity will, when necessary to protect the rights of third
parties, disregard the legal fiction that two corporations are
distinct entities and treat them as identical or as one and the
same.[47] The purpose behind piercing a corporation's identity is
to remove the barrier between the corporation and the persons
comprising it to thwart the fraudulent and illegal schemes of
those who use the corporate personality as a shield for
undertaking certain proscribed activities.[48]
Here, instead of holding the decedent's interest in the
corporation separately as a stockholder, the situation was
reversed. Instead, the probate court ordered the lessees of the
corporation to remit rentals to the estate's administrator
without taking note of the fact that the decedent was not the
absolute owner of Primrose but only an owner of shares
thereof. Mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stocks of a
corporation is not of itself a sufficient reason for disregarding
the fiction of separate corporate personalities. [49] Moreover, to
disregard the separate juridical personality of a corporation,
the wrongdoing cannot be presumed, but must be clearly and
convincingly established.[50]
Third. A probate court is not without limits in the
determination of the scope of property covered in probate
proceedings. In a litany of cases, the Court had defined the
parameters by which a probate court may extend its probing
arms in the determination of the question of title in probate
proceedings. In Pastor, Jr. vs. Court of Appeals,[51] the Court
explained that, as a rule, the question of ownership was an
extraneous matter which the probate court could not resolve
with finality. Thus, for the purpose of determining whether a
certain property should, or should not, be included in the
inventory of estate properties, the probate court may pass
upon the title thereto, but such determination is provisional,
not conclusive, and is subject to the final decision in a separate
action to resolve title. It is a well-settled rule that a probate
court or one in charge of proceedings, whether testate or
intestate, cannot adjudicate or determine title to properties
claimed to be part of the estate but which are equally claimed
to belong to outside parties. It can only determine whether
they should, or should not, be included in the inventory or list
of properties to be overseen by the administrator. If there is
no dispute, well and good; but if there is, then the parties, the
administrator and the opposing parties have to resort to an
ordinary action for a final determination of the conflicting
claims of title because the probate court cannot do so.[52]
In this case, respondent Marty argues that the subject
properties and the parcel of land on which these were erected
should be included in the inventory of Rosario's estate. More
so, the arrears from the rental of these properties were later
on ordered to be remitted to the administrator of the estate
grounded on the allegation that Rosario had no other
properties other than her interests in Primrose. To the Court's
mind, this holding of the probate court was in utter disregard
of the undisputed fact the subject land is registered under the
Torrens system in the name of Primrose, a third person who
may be prejudiced by the orders of the probate court.
In Valera vs. Inserto:[53] the Court stated:
 
x x x, settled is the rule that a Court of First Instance (now
Regional Trial Court), acting as a probate court, exercises but
limited jurisdiction, and thus has no power to take cognizance
of and determine the issue of title to property claimed by a
third person adversely to the decedent, unless the claimant
and all the other parties having legal interest in the property
consent, expressly or impliedly, to the submission of the
question to the probate court for adjudgment, or the interests
of third persons are not thereby prejudiced, the reason for the
exception being that the question of whether or not a
particular matter should be resolved by the Court in the
exercise of its general jurisdiction or of its limited jurisdiction
as a special court (e.g. probate, land registration, etc.), is in
reality not a jurisdictional but in essence of procedural one,
involving a mode of practice which may be waived.
xxxx
x x x These considerations assume greater cogency
Page 302 of 304
where, as here, the Torrens title to the property is not
in the decedent's names but in others, a situation on
which this Court has already had occasion to rule.[54]
[Emphasis and underscoring supplied]
 
Thus, the probate court should have recognized the
incontestability accorded to the Torrens title of Primrose over
Marty's arguments of possible dissipation of properties. In fact,
in the given setting, even evidence purporting to support a
claim of ownership has to yield to the incontestability of a
Torrens title, until after the same has been set aside in the
manner indicated in the law itself. In other words, the
existence of a Torrens title may not be discounted as a mere
incident in special proceedings for the settlement of the estate
of deceased persons. Put clearly, if a property covered by
Torrens title is involved, "the presumptive conclusiveness of
such title should be given due weight, and in the absence of
strong compelling evidence to the contrary, the holder thereof
should be considered as the owner of the property in
controversy until his title is nullified or modified in an
appropriate ordinary action, particularly, when as in the case at
bar, possession of the property itself is in the persons named
in the title."[55]
Additionally, Presidential Decree (P.D.) No. 1529[56] proscribes
a collateral attack on a Torrens title:
Sec. 48. Certificate not subject to collateral attack. - A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified or cancelled except in a direct
proceeding in accordance with law.
In Cuizon vs. Ramolete,[57] the property subject of the
controversy was duly registered under the Torrens system. To
this, Court categorically stated:
 
Having been apprised of the fact that the property in question
was in the possession of third parties and more important,
covered by a transfer certificate of title issued in the name of
such third parties, the respondent court should have
denied the motion of the respondent administrator and
excluded the property in question from the inventory of
the property of the estate. It had no authority to
deprive such third persons of their possession and
ownership of the property.[58] x x x [Emphasis and
underscoring supplied]
A perusal of the records of this case would show that that no
compelling evidence was ever presented to substantiate the
position of Marty that Rosario and Primrose were one and the
same, justifying the inclusion of the latter's properties in the
inventory of the decedent's properties. This has remained a
vacant assertion. At most, what Rosario owned were shares of
stock in Primrose. In turn, this boldly underscores the fact that
Primrose is a separate and distinct personality from the estate
of the decedent. Inasmuch as the real properties included in
the inventory of the estate of Rosario are in the possession of,
and are registered in the name of, Primrose, Marty's claims are
bereft of any logical reason and conclusion to pierce the veil of
corporate fiction.
Fourth. The probate court in this case has not acquired
jurisdiction over Primrose and its properties. Piercing the veil of
corporate entity applies to determination of liability not of
jurisdiction; it is basically applied only to determine established
liability. It is not available to confer on the court a jurisdiction
it has not acquired, in the first place, over a party not
impleaded in a case.[59] This is so because the doctrine of
piercing the veil of corporate fiction comes to play only during
the trial of the case after the court has already acquired
jurisdiction over the corporation. Hence, before this doctrine
can be even applied, based on the evidence presented, it is
imperative that the court must first have jurisdiction over the
corporation.[60]
Hence, a corporation not impleaded in a suit cannot be subject
to the court's process of piercing the veil of its corporate
fiction. Resultantly, any proceedings taken against the
corporation and its properties would infringe on its right to due
process.
In the case at bench, the probate court applied the doctrine of
piercing the corporate veil ratiocinating that Rosario had no
other properties that comprise her estate other than her shares
in Primrose. Although the probate court's intention to protect
the decedent's shares of stock in Primrose from dissipation is
laudable, it is still.an error to order the corporation's tenants to
remit their rental payments to the estate of Rosario.
Considering the above disquisition, the Court holds that a
permanent and final injunction is in order in accordance with
Section 9, Rule 58 of the Rules of Court which provides that
"[i]f after the trial of the action it appears that the applicant is
entitled to have the act or acts complained of permanently
enjoined, the court shall grant a final injunction perpetually
restraining the party or person enjoined from the commission
or continuance of the act or acts or confirming the preliminary
mandatory injunction." Undoubtedly, Primrose stands to suffer
an irreparable injury from the subject order of the probate
court.
Page 303 of 304
WHEREFORE, the petition is GRANTED. The Temporary
Restraining Order, dated June 14, 2013, is hereby
made PERMANENT, effective immediately. The Regional Trial
Court, Branch 6, Tacloban City, is ENJOINED from enforcing
and implementing its January 20, 2011 and June 10, 2011
Orders, insofar as the corporate properties of Primrose
Development Corporation are concerned, to avert irreparable
damage to a corporate entity, separate and distinct from the
Estate of Rosario Guy-Juco Villasin Casilan.

SO ORDERED.

Page 304 of 304