Table of Contents

RULE 31: CONSOLIDATION OR SEVERANCE......................................................................................................................................... 2

Teston v. DBP, G.R. No. 144374, November 11, 2005................................................................................................................................. 2
Espinoza v. UOB, G.R. No. 175380, March 22, 2010.................................................................................................................................. 6
Republic vs. Sandiganbayan, G.R. No. 152375. December 13, 2011.........................................................................................................9
People v Sandiganbayan, G.R. No. 149495, August 21, 2003..................................................................................................................27
Palanca v. Querubin, Nos. L-29510-31, November 29, 1969, 30 SCRA 738.............................................................................................30
Naguiat v. Intermediate Appellate Court, G.R. No. 73836, August 18, 1988..............................................................................................33
Producers Bank of the Phils. V. Excelsa Industries, Inx., GR No. 173820, 2012.......................................................................................37
Caños v. Peralta, G.R. No. L-38352 August 19, 1982................................................................................................................................ 40

RULE 33: DEMURRER TO EVIDENCE.................................................................................................................................................... 42

Felipe v MGM Motor Trading, GR No 191849, Sep. 23, 2015................................................................................................................... 42
Republic vs Tuvera G.R No 148246, February 16, 2007........................................................................................................................... 45
Apostolic Vicar of Tavuk vs Sison G R No191132 January 27 2016..........................................................................................................57
Radiowealth Finance vs. Del Rosario, July 6, 2000................................................................................................................................... 60
GMA Network vs. Central CATV July 18, 2014.......................................................................................................................................... 64
Katigbak v. Sandiganbayan, G.R. No. 140183, Jul. 10, 2003....................................................................................................................70
Republic v. De Borja, G.R. No. 187448, Jan. 9, 2017................................................................................................................................ 78
Bangayan, Jr. v. Bangayan, G.R. No. 172777, 172792, [October 19, 2011], 675 PHIL 656-670...............................................................85

RULE 34: JUDGMENT ON THE PLEADINGS......................................................................................................................................... 89

GSIS v. Prudential, G.R. No. 165585, 2013............................................................................................................................................... 89
Asian Construction v. Sanneadle, G.R. No. 181676, June 11, 2014..........................................................................................................94
Fernando Medical Enterprises,Inc vs Wesleyan University Philippines, G.R. No. 207970, January 20, 2016..........................................98

RULE 35: SUMMARY JUDGMENTS...................................................................................................................................................... 105

Republic vs Sandiganbayan, G.R No. 152154, July 15, 2003................................................................................................................. 105
Nocom v Camerino, G.R No. 182984, February 10, 2009.......................................................................................................................135
Adolfo v Adolfo, G.R No. 201427, March 18, 2015.................................................................................................................................. 144
Mandap v. Department of Agrarian Reform, G.R. No. 194348 (Notice), [June 30, 2021]........................................................................150
Solidbank Corp. v. Court of Appeals, G.R. No. 120010, [October 3, 2002], 439 PHIL 23-36...................................................................155
Wood Technology Corp. v. Equitable Banking Corp., G.R. No. 153867, [February 17, 2005], 492 PHIL 106-117..................................159
G.R. No. 153867 February 17, 2005............................................................................................................................................ 159
Calubaquib v. Republic, G.R. No. 170658, [June 22, 2011],....................................................................................................................162
Basbas v. Sayson, G.R. No. 172660, [August 24, 2011].......................................................................................................................... 166
Pepsi-Cola Products Philippines, Inc. v. Isabela Leaf Tobacco Co., Inc., G.R. No. 237840, [June 10, 2019].........................................174

1
RULE 31: CONSOLIDATION OR SEVERANCE

Teston v. DBP, G.R. No. 144374, November 11, 2005

G.R. NO. 144374 November 11, 2005

ROMEO TESTON, represented by Conrado Colarina, Petitioner,

vs.
DEVELOPMENT BANK OF THE PHILIPPINES, LAND BANK OF THE PHILIPPINES, and SECRETARY OF AGRARIAN
REFORM, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision1 of the Court of Appeals (CA)
dated March 9, 2000 in CA-G.R. SP No. 40609 which sustained the Order dated March 13, 1996 of the Regional Trial Court, Branch
48, Masbate, Masbate

(RTC) dismissing Special Civil Case (SCC) No. 4243; and the CA Resolution dated August 4, 2000, denying petitioner’s motion for
reconsideration.

The factual background of the case is as follows:

On November 3, 1993, petitioner Romeo Teston, through his attorney-in-fact, Conrado Colarina (petitioner), filed a complaint against
respondents Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP) and Secretary of the Department of
Agrarian Reform (DAR Secretary) for the determination and payment of just compensation of two parcels of agricultural land, docketed
as SCC No. 4243.

In his complaint, petitioner alleges that: he is the owner of the said two parcels of agricultural land, situated in Barangay Lantangan,
Mandaon, Masbate, covered by Transfer Certificate of Title (TCT) No. T-6176 and TCT No. T-6177, having purchased the same from
DBP by way of Deed of Conditional Sale dated July 15, 1987; on December 1, 1998, he, through Colarina, voluntarily offered to sell the
said parcels of land to the DAR Secretary, under the Comprehensive Agrarian Reform Law or Republic Act (R.A.) No. 6657; the DAR
Secretary accepted the voluntary offer to sell for a total price of ₱12,172,854.63; the DBP, without notifying him and ignoring the
Conditional Sale, transferred the parcels of land to the Government, through the DAR, for the coverage of the Comprehensive Agrarian
Reform Program (CARP) and immediate distribution to farmer beneficiaries; after execution of the Deed of Conditional Sale in his favor,
DBP has no more right to sell and transfer to the DAR the subject properties, which were already previously voluntarily offered for sale
by him and accepted by the DAR.

On the same day, Colarina filed his own personal complaint against the Government Service Insurance System (GSIS), LBP and the
DAR Secretary for the determination and payment of just compensation of fifteen parcels of agricultural land, docketed as SCC No.
4242.

Colarina alleged that: the said fifteen parcels of agricultural land, situated in Barrio Malaran and Lamintao, Municipality of Dimasalong
(now Uson), Masbate, with a total land area of 32,398,264 square meters, were mortgaged by the Associated Agricultural Activities, Inc.
(AAA) to the GSIS as security for the payment of its loan; when AAA failed to pay the loan, GSIS foreclosed the mortgage on the lands,
at public auction, GSIS was the highest bidder; on May 19, 1988, certificates of sale were issued and registered in the name of GSIS;
on December 8, 1988, he bought the lots from AAA; on April 25, 1989, he voluntarily offered to sell said properties to the DAR under
R.A. No. 6657; on May 6, 1989, he informed GSIS of his offer to sell the properties to the DAR; subsequently, GSIS consolidated
ownership over the lots in its name; on November 5, 1990, GSIS executed a Deed of Transfer in favor of the DAR, by virtue of which,
TCT Nos. T-7882 to T-7891 were issued on December 11, 1990 in the name the Republic of the Philippines by the Register of Deeds of
Masbate; on April 16, 1991, TCT Nos. T-94 to T-103 were issued in the names of farmer beneficiaries; despite repeated demands, the
LBP and the DAR refused to determine and pay the just compensation for the lots.

Both cases were raffled to RTC, Masbate, Branch 48.

In separate Answers in SCC No. 4243, respondents DBP, LBP and the DAR Secretary commonly averred that petitioner has no cause
of action since he was never the owner of the properties under TCT Nos. T-6176 and T-6177 because DBP rescinded the Deed of
Conditional Sale for nonpayment of the purchase price.

On the other hand, in separate Answers in SCC No. 4242, respondents GSIS, LBP and DAR Secretary contend that Colarina has no
cause of action since he is not the owner of the lands he voluntarily offered for CARP coverage; he only bought from AAA the right to
redeem the property and he failed to exercise such right on May 19, 1989, within the one-year period allowed by the law.
2
Without any order of the RTC expressly consolidating SCC No. 4242 and No. 4243, a notice of hearing of both cases was sent to the
parties by the clerk of the RTC.2 In an Order dated November 16, 1994, the RTC terminated the pre-trial in both cases. 3

Subsequently, or on September 19, 1995, GSIS filed a motion to dismiss for failure of the complaint to state a cause of action. It argued
that Colarina had no right to sell the lots to the DAR because what it acquired from AAA was only the right to redeem the lots in
question; failing to so redeem, he never became the owner of said lots and therefore was not the real party-in-interest in the case. 4

In an Order dated December 8, 1995, the RTC directed Colarina to file his comment or opposition thereto. 5

In his opposition to the motion to dismiss, Colarina did not dispute the claim of GSIS that he failed to redeem subject property within the
allotted period. He simply declared that GSIS was a necessary party in the case being the mortgagee of the lots. 6

No pleading, manifestation or motion was filed by the petitioner or respondents DBP, LBP and the DAR Secretary concerning the
motion to dismiss.

At the scheduled hearing of the motion to dismiss, the parties and counsels, except respondent DBP, failed to appear despite notice.
Only respondent LBP filed a telegraphic motion for postponement. The RTC thus considered the motion to dismiss submitted for
resolution.7

On March 13, 1996, the RTC issued its Order dismissing the complaints in both cases for failure to state a cause of action. 8 It
ratiocinated thus:

…As admitted in the complaint that the properties in question in Spec. Civil Case No. 4242 has been foreclosed by the defendant
Government Service Insurance System (GSIS). During redemption period the plaintiff acquired the said properties from its original
owner, AAA Inc. However, what the plaintiff had actually acquired then was only the owner’s right of redemption within the reglamentary
(sic) period. … So when the plaintiff made a voluntary offer to sell the properties in question to the Department of Agrarian Reform
(DAR) he had no personality for the same inasmuch as he is not the real party in interest.

While the properties involved in Spec. Civil Case No. 4243 are concerned, T-6176 and T-6177 the same were allegedly acquired by
plaintiff Romeo Teston from defendant DBP by virtue of a deed of conditional sale dated July 15, 1987, with DBP as conditional vendor
and Romeo Teston as conditional vendee. However the said conditional sale was rescinded in 1990 in view of plaintiff’s failure to
update his account, who has been informed of said rescission per letter of DBP dated September 24, 1990. …

The DBP in transferring the properties in question to the DAR was only complying (sic) Executive Order 405 and 407 which provide the
surrender to the DAR of all agricultural landholdings of the Government financial institution including that of defendant DBP. So the
plaintiff, Romeo Teston has no right whatsoever to make any voluntary offer to sell the properties in question to the DAR much more to
ask the Court (sic) determination and payment of just compensation. 9

On March 25, 1996, a motion for reconsideration10 was filed by Pejo Buenviaje & Associates, the common counsel of petitioner and
Colarina, but it was denied by the RTC in its Order dated April 24, 1996. 11

Dissatisfied, petitioner and Colarina filed separate petitions for review with the CA, docketed as CA-G.R. SP Nos. 40609 12 and 40610,
respectively.

On October 28, 1996, the CA rendered its decision on Colarina’s appeal in CA-G.R. SP No. 40610, setting aside the RTC’s Order dated
March 13, 1996, which dismissed SCC No. 4242.13 However, on petition for review on certiorari with this Court by GSIS,
entitled Government Service Insurance System vs. Court of Appeals, docketed as G.R. No. 128118, the Court, on February 15, 2002,
set aside the CA decision and reinstated the RTC’s Order dated March 13, 1996, which dismissed SCC No. 4242. 14

Meanwhile, on March 9, 2000, the CA rendered judgment in CA-G.R. SP No. 40609, affirming in toto the RTC’s order which dismissed
SCC No. 4243.15 The CA held that: the RTC is given the option to have a joint hearing or to order consolidation if the motion involves a
common question of law or fact, pursuant to Section 1, Rule 32 of the 1997 Rules of Civil Procedure; since SCC Nos. 4242 and 4243
have a common question of law and fact, which is the determination and payment of just compensation, the joint hearing conducted by
the RTC is proper and valid; the rule clearly gives the RTC discretion to decide what course of action to take, that is, whether to have
joint hearing/trial or to order the cases consolidated; furthermore, the Court may make such orders concerning proceedings therein to
avoid unnecessary costs or delay and, in this case, to order the dismissal of both cases.

Petitioner filed a motion for reconsideration16 but it was denied by the CA in its Resolution dated August 4, 2000. 17

Hence, the present petition for review on certiorari anchored on a sole error, to wit:

3
THE COURT OF APPEALS ERRED IN UPHOLDING THE DISMISSAL BY THE TRIAL COURT OF THE COMPLAINT IN SPEC. CIVIL
CASE NO. 4243 UPON A MOTION TO DISMISS DIRECTED AGAINST THE COMPLAINT IN SPEC. CIVIL CASE NO. 4242 EVEN ON
ITS JUSTIFICATION THEREOF, NAMELY, THAT THE TRIAL COURT MAY MAKE SUCH ORDER IN VIEW OF CONSOLIDATION OF
THE TWO CASES ALLOWED UNDER SEC. 1, RULE 31 OF THE RULES OF CIVIL PROCEDURE. 18

Petitioner submits that no consolidation in contemplation of the Rules took place since there was no order for consolidation; the RTC
only scheduled both cases for simultaneous hearing. He further argues that the RTC erred in dismissing in one order both cases based
on a motion to dismiss directed against one case only. He maintains that failure to state a cause of action as ground of a motion to
dismiss solely applies to the complaint in SCC No. 4242 and it cannot extend to the complaint in SCC No. 4243, unless the allegations
in both complaints are entirely the same in all respects. Furthermore, he contends that the RTC, in finding that the complaint in SCC
No. 4243 stated no cause of action, went beyond the allegations of the complaint.

On the other hand, respondent DBP submits that petitioner’s argument regarding consolidation deals principally on technicalities and
semantics. It avers that it cannot be denied that the two cases involved are of the same nature and pray for the same relief, i.e., the
determination and payment of just compensation, which petitioner admits in his petition. While admitting that there was no written order
from the RTC expressly consolidating both cases, it maintains that the RTC scheduled both cases for simultaneous trial and hearing
and all the conditions for consolidation are attendant herein. It contends also that the RTC did not abuse its discretion when it dismissed
SCC No. 4243 in order to avoid unnecessary cost and delay since the ground for the dismissal of SCC No. 4242 is perfectly applicable
to the former. Besides, it contends that, in dismissing SCC No. 4243, the RTC did not go beyond the averments of the complaint
therein.

As for respondent LBP, it submits that the RTC did not err, much less abuse its jurisdiction, in dismissing SCC No. 4243 upon a motion
to dismiss directed against the complaint in SCC No. 4242, since the two cases were consolidated and involved common questions of
law and facts. It argues that dismissal of SCC No. 4243 for failure to state a cause of action is proper since petitioner has no right to
voluntarily offer the disputed properties because he was never the owner of said properties.

The Court rules in favor of the petitioner.

Consolidation of actions is expressly authorized under Section 1, Rule 31 of the 1997 Rules of Civil Procedure, which states:

SECTION 1. Consolidation. – When actions involving a common question of law or fact or pending before the court, it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay.

A court may order several actions pending before it to be tried together where they arise from the same act, event or transaction,
involve the same or like issues, and depend largely or substantially on the same evidence, provided that the court has jurisdiction over
the cases to be consolidated and that a joint trial will not give one party an undue advantage or prejudice the substantial rights of any of
the parties.19 The obvious purpose of the rule allowing consolidation is to avoid multiplicity of suits to guard against oppression or
abuse, to prevent delays, to clear congested dockets, to simplify the work of the trial court; in short the attainment of justice with the
least expense and vexation to the parties litigants.20 Consolidation of actions is addressed to the sound discretion of the court and its
action in consolidating will not be disturbed in the absence of manifest abuse of discretion. 21

In the present case, although both cases which were raffled to the same branch of RTC Masbate (Branch 48), involve the prayer for
determination and payment of just compensation, and petitioner and Colarina are represented by the same counsel, Pejo Buenviaje &
Associates, and respondents LBP and DAR Secretary are common defendants, these are not sufficient justifications for joint trial and
joint order dismissing both cases. It cannot be denied that there is no real identity of parties, facts or rights asserted. SCC No. 4242 was
instituted by Colarina in his own name principally against GSIS and concerns fifteen parcels of agricultural land in Barrio Malaran and
Lamintao, Municipality of Dimasalong (now Uson), Masbate, while SCC No. 4243 was instituted by petitioner represented by Colarina
principally against DBP and concerns two parcels of agricultural land in Barangay Lantangan, Mandaon, Masbate. Furthermore, a
perusal of the complaints in SCC Nos. 4242 and 4243 plainly shows that Colarina claims ownership as redemptioner while petitioner
claims ownership as buyer. Clearly, the causes of action in the two cases arose from different events or transactions, involve different
issues, and ultimately will depend on different evidence.

Therefore, the RTC exceeded its jurisdiction in setting the joint trial of the two cases. Consolidation should be denied when prejudice
would result to any of the parties or would cause complications, delay, cut off, or restrict the rights of a party, 22 as in this case.

In view of the improper consolidation, the RTC judge was equally less than judicious in dismissing SCC No. 4243 based on a motion to
dismiss filed by GSIS. Notably, the motion to dismiss was filed by GSIS only with respect to the complaint in SCC No. 4242. The claim
of GSIS that Colarina never became the owner of the fifteen parcels of land, since he failed to exercise his right of redemption, is totally
alien from the claim of respondent DBP against petitioner with respect to two different parcels of land covered by a deed of conditional
sale, which was allegedly rescinded by DBP, an issue not raised by the DBP in said motion to dismiss.

Furthermore, it must be noted that only Colarina was directed by the RTC to file his comment or opposition to the motion to dismiss of
GSIS.23 No pleading, manifestation or motion, was filed by the petitioner or respondents DBP, LBP or the DAR Secretary concerning
4
the motion to dismiss. And, as already stated, at the scheduled hearing on the motion to dismiss, all the parties and counsels, except
herein respondent DBP, failed to appear despite notice. 24 Even at that stage, nothing was heard from respondent DBP; it did not move
for the dismissal of the complaint against it.

Accordingly, the RTC can not, motu proprio or on its own initiative, consider the ground of lack of cause of action on the part of
petitioner when it was not raised by DBP in the motion to dismiss filed by GSIS, without running afoul of petitioner’s constitutionally
protected right to due process. Without any iota of doubt, due process of law lies at the foundation of a civilized society which accords
paramount importance to justice and fairness. It has to be accorded the weight it deserves.

In view of the foregoing, the Court will not delve on the question of whether petitioner’s complaint failed to state a cause of action as it is
primarily within the jurisdiction of the RTC to determine after due hearing.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated March 9, 2000 and Resolution dated August 4, 2000 of
the Court of Appeals in CA-G.R. SP No. 40609 are SET ASIDE. The case is REMANDED to the court of origin for further proceedings
insofar as SCC No. 4243 is concerned.

SO ORDERED.

5
Espinoza v. UOB, G.R. No. 175380, March 22, 2010

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 175380 March 22, 2010

GREGORIO ESPINOZA, in his own personal capacity and as surviving spouse, and JO ANNE G. ESPINOZA, herein
represented by their attorney-in-fact, BEN SANGIL, Petitioners,
vs.
UNITED OVERSEAS BANK Phils. (formerly Westmont Bank), Respondent.

DECISION

CORONA, J.:

This is a petition for review on certiorari1 of the November 9, 2006 decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 62250.

On March 24, 1996, Firematic Philippines was granted a credit line by respondent United Overseas Bank (then known as Westmont
Bank). As security, petitioners Gregorio Espinoza and the late Joji Gador Espinoza (spouses Espinoza) executed a third-party
mortgage in favor of respondent over four parcels of land, one of which was covered by Transfer Certificate of Title (TCT) No. 197553
of the Registry of Deeds of Caloocan City. Through its credit line, Firematic obtained several loans from respondent, as evidenced by
promissory notes and trust receipts.

Due to Firematic’s failure to pay its loans, respondent filed a petition for extrajudicial foreclosure in July 1996 with notary public Eduardo
S. Rodriguez in Caloocan City. After complying with the legal requirements, the property covered by TCT No. 197553 was sold at public
auction. Respondent was awarded the property, being the only bidder in the amount of ₱200,000. 3

The certificate of sale was registered with the Register of Deeds of Caloocan City on September 25, 1996. In July 1998, an affidavit of
consolidation of ownership over the property was also registered with the same office. On July 24, 1998, ownership was consolidated in
the name of respondent as evidenced by the issuance of TCT No. C-328807.

On March 10, 2000, respondent filed an ex parte petition for the issuance of a writ of possession which was docketed as LRC Case No.
C-4233 in the Regional Trial Court (RTC) of Caloocan City, Branch 124. This action was opposed by petitioners who moved for the
consolidation of the proceedings with Civil Case No. C-17913 pending before RTC Branch 120 of the same city. Civil Case No. C-
17913 was an action for the nullification of the extra-judicial foreclosure proceedings and certificate of sale of the property subject of this
case.

In an order dated April 18, 2000, RTC Branch 124 granted petitioners’ motion for consolidation and ordered that LRC Case No. C-4233
be consolidated with Civil Case No. C-17913, provided that the presiding judge of RTC Branch 120 did not object. Respondent’s motion
for reconsideration was denied in an order dated September 7, 2000.

Respondent then filed a petition for certiorari and mandamus 4 in the CA, which was granted. The orders of RTC Branch 124 dated April
18, 2000 and September 7, 2000, respectively, were reversed and set aside. The CA adhered to the long-established doctrine that
purchasers in a foreclosure sale are entitled, as a matter of right, to a writ of possession and that any question regarding the regularity
and validity of the sale is to be determined in a separate proceeding. The CA also held that such questions are not to be raised as a
justification for opposing the issuance of the writ of possession, since such proceedings are ex parte. Hence, the CA directed the
issuance of a writ of possession in favor of respondent.

Aggrieved, petitioners filed this petition.

The core issue for resolution is whether a case for the issuance of a writ of possession may be consolidated with the proceedings for
the nullification of extra-judicial foreclosure.

Petitioners contend that peculiar circumstances in the instant case make it an exception from the general rule on the ministerial duty of
courts to issue writs of possession. Given that the issuance of a writ of possession in this case must be litigated, consolidation with the
pending case on the nullification of extra-judicial foreclosure is mandatory because both proceedings involve the same parties and
subject matter.
6
Respondent, on the other hand, insists that the consolidation of the ex parte petition for the issuance of a writ of possession with the
complaint for nullification of extra-judicial foreclosure of mortgage is highly improper and irregular because there are no common
questions of fact and law between the two cases. Respondent also argues that any question regarding the validity of the mortgage or
foreclosure cannot be a ground for refusing the issuance of the writ of possession and should, instead, be taken up in the proceedings
for the nullification of the foreclosure.

We rule for respondent.

The order for a writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the
corresponding bond if the redemption period has not yet lapsed. 5 If the redemption period has expired, then the filing of the bond is no
longer necessary. Any and all questions regarding the regularity and validity of the sale is left to be determined in a subsequent
proceeding and such questions may not be raised as a justification for opposing the issuance of a writ of possession. 6

In Santiago v. Merchants Rural Bank of Talavera, Inc.,7 we defined the nature of a petition for a writ of possession:

The proceeding in a petition for a writ of possession is ex parte and summary in nature. It is a judicial proceeding brought for the benefit
of one party only and without notice by the court to any person adverse of interest. It is a proceeding wherein relief is granted without
giving the person against whom the relief is sought an opportunity to be heard.

By its very nature, an ex parte petition for issuance of a writ of possession is a non-litigious proceeding. 8 It is a judicial proceeding for
the enforcement of one's right of possession as purchaser in a foreclosure sale. It is not an ordinary suit filed in court, by which one
party sues another for the enforcement of a wrong or protection of a right, or the prevention or redress of a wrong. 9

On the other hand, by its nature, a petition for nullification or annulment of foreclosure proceedings contests the presumed right of
ownership of the buyer in a foreclosure sale and puts in issue such presumed right of ownership. Thus, a party scheming to defeat the
right to a writ of possession of a buyer in a foreclosure sale who had already consolidated his ownership over the property subject of
the foreclosure sale can simply resort to the subterfuge of filing a petition for nullification of foreclosure proceedings with motion for
consolidation of the petition for issuance of a writ of possession. This we cannot allow as it will render nugatory the presumed right of
ownership, as well as the right of possession, of a buyer in a foreclosure sale, rights which are supposed to be implemented in an ex
parte petition for issuance of a writ of possession.

Besides, the mere fact that the "presumed right of ownership is contested and made the basis of another action" does not by itself
mean that the proceedings for issuance of a writ of possession will become groundless. The presumed right of ownership and the right
of possession should be respected until and unless another party successfully rebuts that presumption in an action for nullification of
the foreclosure proceedings. As such, and in connection with the issuance of a writ of possession, the grant of a complaint for
nullification of foreclosure proceedings is a resolutory condition, not a suspensive condition.

Given the foregoing discussion, it is clear that the proceedings for the issuance of a writ of possession should not be consolidated with
the case for the declaration of nullity of a foreclosure sale. The glaring difference in the nature of the two militates against their
consolidation.

The long-standing rule is that proceedings for the issuance of a writ of possession are ex parte and non-litigious in nature.10 The only
exemption from this rule is Active Wood Products Co., Inc. v. Court of Appeals11 where the consolidation of the proceedings for the
issuance of a writ of possession and nullification of foreclosure proceedings was allowed following the provisions on consolidation in the
Rules of Court. However, the circumstances in this case are substantially distinct from that in Active Wood. Therefore, the exception
granted in that case cannot be applied here.1avvphi1

In Active Wood, the petition for writ of possession was filed before the expiration of the one-year redemption period 12 while, in this case,
the petition for writ of possession was filed after the one-year redemption period had lapsed. Moreover, in Active Wood, title to the
litigated property had not been consolidated in the name of the mortgagee. Therefore, in that case, the mortgagee did not yet have an
absolute right over the property. In De Vera v. Agloro,13 we ruled:

The possession of land becomes an absolute right of the purchaser as confirmed owner. The purchaser can demand possession at
any time following the consolidation of ownership in his name and the issuance to him of a new transfer certificate of title. After the
consolidation of title in the buyer’s name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter
of right.14

In another case involving these two parties, Fernandez and United Overseas Bank Phils. v. Espinoza,15 we held:

Upon the expiration of the redemption period, the right of the purchaser to the possession of the foreclosed property becomes absolute.
The basis of this right to possession is the purchaser’s ownership of the property. 16

7
In this case, title to the litigated property had already been consolidated in the name of respondent, making the issuance of a writ of
possession a matter of right. Consequently, the consolidation of the petition for the issuance of a writ of possession with the
proceedings for nullification of foreclosure would be highly improper. Otherwise, not only will the very purpose of consolidation (which is
to avoid unnecessary delay) be defeated but the procedural matter of consolidation will also adversely affect the substantive right of
possession as an incident of ownership.

Finally, petitions for the issuance of writs of possession, a land registration proceeding, do not fall within the ambit of the Rules of
Court.17 Thus, the rules on consolidation should not be applied.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioners.

SO ORDERED.

8
Republic vs. Sandiganbayan, G.R. No. 152375. December 13, 2011

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 152375 December 16, 2011

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
SANDIGANBAYAN (FOURTH DIVISION), JOSE L. AFRICA (substituted by his heirs), MANUEL H. NIETO, JR., FERDINAND E.
MARCOS (substituted by his heirs), IMELDA R. MARCOS, FERDINAND R. MARCOS, JR., JUAN PONCE ENRILE, and
POTENCIANO ILUSORIO (substituted by his heirs), Respondents.

DECISION

BRION, J.:

Before us is the petition for certiorari1 filed by the Republic of the Philippines (petitioner) to set aside the February 7, 2002 resolution
(2002 resolution)2 of the Sandiganbayan3 denying the petitioner’s Motion to Admit Supplemental Offer of Evidence (Re: Deposition of
Maurice V. Bane) (3rd motion).

THE ANTECEDENTS

On July 22, 1987, the petitioner Republic of the Philippines, through the Presidential Commission on Good Government (PCGG), filed a
complaint (docketed as Civil Case No. 0009) against Jose L. Africa, Manuel H. Nieto, Jr., Ferdinand E. Marcos, Imelda R. Marcos,
Ferdinand R. Marcos, Jr., Juan Ponce Enrile, and Potenciano Ilusorio (collectively, the respondents) for reconveyance, reversion,
accounting, restitution, and damages before the Sandiganbayan. The petitioner alleged, inter alia, that the respondents illegally
manipulated the purchase of the major shareholdings of Cable and Wireless Limited in Eastern Telecommunications Philippines, Inc.
(ETPI), which shareholdings respondents Jose Africa and Manuel Nieto, Jr. held for themselves and, through their holdings and the
corporations they organized, beneficially for respondents Ferdinand E. Marcos and Imelda R. Marcos. 4

Civil Case No. 0009 is the main case subject of the present petition. Victor Africa (Africa), son of the late Jose L. Africa, was not
impleaded in and so is plainly not a party to Civil Case No. 0009. 5

Civil Case No. 0009 spawned numerous incidental cases,6 among them, Civil Case No. 0130.7 The present respondents were not made
parties either in Civil Case No. 0130.

I. Civil Case No. 0130

In the August 7, 1991 PCGG-conducted ETPI stockholders meeting, a PCGG-controlled board of directors was elected. Later, the
registered ETPI stockholders convened a special stockholders meeting wherein another set of board of directors was elected. As a
result, two sets of ETPI board and officers were elected.8

Thereafter, Africa, as an ETPI stockholder, filed a petition for certiorari, with prayer for a temporary restraining order/preliminary
injunction with the Sandiganbayan (docketed as Civil Case No. 0130), seeking to nullify the August 5, 1991 and August 9, 1991 Orders
of the PCGG. These Orders directed Africa:

[T]o account for his sequestered shares in ETPI and to cease and desist from exercising voting rights on the sequestered shares in the
special stockholders’ meeting to be held on August 12, 1991, from representing himself as a director, officer, employee or agent of
ETPI, and from participating, directly or indirectly[,] in the management of ETPI. 9

During the pendency of Africa’s petition, Civil Case No. 0130, Africa filed a motion with the Sandiganbayan, alleging that since January
29, 1988 the PCGG had been "illegally ‘exercising’ the rights of stockholders of ETPI," 10 especially in the election of the members of the
board of directors. Africa prayed for the issuance of an order for the "calling and holding of [ETPI] annual stockholders meeting for 1992
under the [c]ourt’s control and supervision and prescribed guidelines."11

9
In its November 13, 1992 resolution, the Sandiganbayan favored Africa’s motion in this wise:

WHEREFORE, it is ordered that an annual stockholders meeting of the [ETPI], for 1992 be held on Friday, November 27, 1992, at 2:00
o’clock in the afternoon, at the ETPI Board Room, Telecoms Plaza, 7th Floor, 316 Gil J. Puyat Avenue, Makati, Metro Manila. x x x The
stockholders meeting shall be conducted under the supervision and control of this Court, through Mr. Justice Sabino R. de Leon, Jr.
[O]nly the registered owners, their duly authorized representatives or their proxies may vote their corresponding shares.

The following minimum safeguards must be set in place and carefully maintained until final judicial resolution of the question of whether
or not the sequestered shares of stock (or in a proper case the underlying assets of the corporation concerned) constitute ill-gotten
wealth[.]12

The PCGG assailed this resolution before this Court via a petition for certiorari docketed as G.R. No. 10778913 (PCGG’s petition),
imputing grave abuse of discretion on the Sandiganbayan for holding, inter alia, that the registered stockholders of ETPI had the right to
vote.14 In our November 26, 1992 Resolution, we enjoined the Sandiganbayan from implementing its assailed resolution.

In the meantime, in an April 12, 1993 resolution, the Sandiganbayan ordered the consolidation of Civil Case No. 0130, among others,
with Civil Case No. 0009, with the latter as the main case and the former merely an incident. 15

During the pendency of PCGG’s petition (G.R. No. 107789), the PCGG filed with this Court a "Very Urgent Petition for Authority to Hold
Special Stockholders’ Meeting for [the] Sole Purpose of Increasing [ETPI’s] Authorized Capital Stock" (Urgent Petition). In our May 7,
1996 Resolution, we referred this Urgent Petition to the Sandiganbayan for reception of evidence and immediate resolution. 16 The
Sandiganbayan included the Urgent Petition in Civil Case No. 0130. 17

In the proceedings to resolve the Urgent Petition, the testimony of Mr. Maurice V. Bane (former director and treasurer-in-trust of ETPI)
was taken– at the petitioner’s instance and after serving notice of the deposition-taking on the respondents 18 – on October 23 and 24,
1996 by way of deposition upon oral examination (Bane deposition) before Consul General Ernesto Castro of the Philippine Embassy in
London, England.

Invoking Section 1, Rule 24 (of the old Rules of Court), purportedly allowing the petitioner to depose Bane without leave of court, i.e., as
a matter of right after the defendants have filed their answer, the notice stated that "[t]he purpose of the deposition is for [Bane] to
identify and testify on the facts set forth in his affidavit19 x x x so as to prove the ownership issue in favor of [the petitioner] and/or
establish the prima facie factual foundation for sequestration of [ETPI’s] Class A stock in support of the [Urgent Petition]." 20 The notice
also states that the petitioner shall use the Bane deposition "in evidence… in the main case of Civil Case No. 0009." 21 On the
scheduled deposition date, only Africa was present and he cross-examined Bane.

On December 13, 1996, the Sandiganbayan resolved the Urgent Petition by granting authority to the PCGG (i) "to cause the holding of
a special stockholders’ meeting of ETPI for the sole purpose of increasing ETPI’s authorized capital stock" and (ii) "to vote therein the
sequestered Class ‘A’ shares of stock."22 Thus, a special stockholders meeting was held, as previously scheduled, on March 17, 1997
and the increase in ETPI’s authorized capital stock was "unanimously approved." 23 From this ruling, Africa went to this Court via a
petition for certiorari24 docketed as G.R. No. 147214 (Africa’s petition).

We jointly resolved the PCGG’s and Africa’s petitions, and ruled:

This Court notes that, like in Africa’s motion to hold a stockholders meeting (to elect a board of directors), the Sandiganbayan, in the
PCGG’s petition to hold a stockholders meeting (to amend the articles of incorporation to increase the authorized capital stock), again
failed to apply the two-tiered test. On such determination hinges the validity of the votes cast by the PCGG in the stockholders meeting
of March 17, 1997. This lapse by the Sandiganbayan leaves this Court with no other choice but to remand these questions to it for
proper determination.

xxxx

WHEREFORE, this Court Resolved to REFER the petitions at bar to the Sandiganbayan for reception of evidence to determine whether
there is a prima facie evidence showing that the sequestered shares in question are ill-gotten and there is an imminent danger of
dissipation to entitle the PCGG to vote them in a stockholders meeting to elect the ETPI Board of Directors and to amend the ETPI
Articles of Incorporation for the sole purpose of increasing the authorized capital stock of ETPI.

The Sandiganbayan shall render a decision thereon within sixty (60) days from receipt of this Resolution and in conformity herewith.

II. Civil Case No. 0009

Although Civil Case No. 0009 was filed on July 22, 1987, it was only on November 29, 1996 and March 17, 1997 that the first pre-trial
conference was scheduled and concluded.25

10
In its Pre-Trial Brief26 dated August 30, 1996, the petitioner offered to present the following witnesses:

WITNESSES TO BE PRESENTED AND A BRIEF DESCRIPTION OF THEIR TESTIMONIES

(1) Maurice V. Bane – representative of Cable and Wireless Limited (C & W) at the time ETPI was organized.

xxxx

(2) Mr. Manuel H. Nieto – x x x

(3) Ms. Evelyn Singson – x x x

(4) Mr. Severino P. Buan, Jr. – x x x

(5) Mr. Apolinario K. Medina - x x x

(6) Mr. Potenciano A. Roque – x x x

(7) Caesar Parlade - x x x

IIa. Motion to Admit the Bane Deposition

At the trial of Civil Case No. 0009, the petitioner filed a Motion27 (1st motion), stating that –

1. In the hearings of the incidents of [Civil Case No. 0009], i.e., Civil Case Nos. 0048, 0050, 0130, 0146 28 the following
witnesses were presented therein:

a. Cesar O.V. Parlade

b. Maurice Bane

c. Evelyn Singson

d. Leonorio Martinez

e. Ricardo Castro; and

f. Rolando Gapud

2. [The petitioner] wishes to adopt in [Civil Case No. 0009] their testimonies and the documentary exhibits presented and
identified by them, since their testimonies and the said documentary exhibits are very relevant to prove the case of the
[petitioner] in [Civil Case No. 0009].

3. The adverse parties in the aforementioned incidents had the opportunity to cross-examine them.

The respondents filed their respective Oppositions to the 1st motion; 29 in turn, the petitioner filed a Common Reply30 to these
Oppositions.

On April 1, 1998, the Sandiganbayan31 promulgated a resolution32 (1998 resolution) denying the petitioner’s 1st motion, as follows:

Wherefore, the [petitioner’s] Motion x x x is –

1. partly denied insofar as [the petitioner] prays therein to adopt the testimonies on oral deposition of Maurice V. Bane and
Rolando Gapud as part of its evidence in Civil Case No. 0009 for the reason that said deponents according to the
[petitioner] are not available for cross-examination in this Court by the [respondents]. (emphasis added)

2. partly Granted, in the interest of speedy disposition of this long pending case, insofar as plaintiff prays therein to adopt
certain/particular testimonies of Cesar O. Parlade, Evelyn Singson, Leoncio Martinez, and Ricardo Castro and documentary
exhibits which said witnesses have identified in incident Civil Case Nos. xxx 0130 xxx, subject to the following conditions :
11
 1. xxx

2. xxx

3. That the said witnesses be presented in this Court so that they can be cross-examined on their particular
testimonies in incident Civil Cases xxx [by the respondents].

IIb. Urgent Motion and/or Request for Judicial Notice

The petitioner did not in any way question the 1998 resolution, and instead made its Formal Offer of Evidence on December 14,
1999.33 Significantly, the Bane deposition was not included as part of its offered exhibits. Rectifying the omission, the petitioner filed
an Urgent Motion and/or Request for Judicial Notice34 (2nd motion) dated February 21, 2000, with the alternative prayer that:

1. An order forthwith be issued re-opening the plaintiff’s case and setting the same for trial any day in April 2000 for the sole
purpose of introducing additional evidence and limited only to the marking and offering of the [Bane deposition] which already
forms part of the records and used in Civil Case No. 0130 x x x;

2. In the alternative, x x x the [Sandiganbayan] to take judicial notice of the facts established by the [Bane deposition], together
with the marked exhibits appended thereto. [emphasis ours]

On August 21, 2000, the Sandiganbayan promulgated a resolution 35 (2000 resolution) denying the petitioner’s 2nd motion:

Judicial notice is found under Rule 129 which is titled "What Need Not Be Proved." Apparently, this provision refers to the Court’s duty
to consider admissions made by the parties in the pleadings, or in the course of the trial or other proceedings in resolving cases before
it. The duty of the Court is mandatory and in those cases where it is discretionary, the initiative is upon the Court. Such being the case,
the Court finds the Urgent Motion and/or Request for Judicial Notice as something which need not be acted upon as the same is
considered redundant.

On the matter of the [Bane deposition], [its] admission is done through the ordinary formal offer of exhibits wherein the defendant is
given ample opportunity to raise objection on grounds provided by law. Definitely, it is not under Article (sic) 129 on judicial notice.
[Emphasis ours]

On November 6, 2000 and on several dates thereafter, the respondents separately filed their respective demurrers to evidence. 36 On
the other hand, the petitioner moved for the reconsideration of the 2000 resolution, but was rebuffed by the Sandiganbayan in its April
3, 2001 resolution37 (2001 resolution).

IIc. Motion to Admit Supplemental Offer of

Evidence (Re: Deposition of Maurice Bane)

On November 16, 2001, the petitioner filed its 3rd Motion, seeking once more the admission of the Bane deposition. 38 On February 7,
2002 (pending resolution of the respondents’ demurrers to evidence), 39 the Sandiganbayan promulgated the assailed 2002
resolution,40 denying the petitioner’s 3rd motion. The Sandiganbayan ruled:

But in the court’s view, it is not really a question of whether or not plaintiff has already rested its case as to obviate the further
presentation of evidence. It is not even a question of whether the non-appearing defendants are deemed to have waived their right to
cross-examine Bane as to qualify the admission of the deposition sans such cross-examination. Indeed, We do not see any need to
dwell on these matters in view of this Court’s Resolution rendered on April 1, 1998 which already denied the introduction in evidence of
Bane’s deposition and which has become final in view of plaintiff’s failure to file any motion for reconsideration or appeal
within the 15-day reglementary period. Rightly or wrongly, the resolution stands and for this court to grant plaintiff’s motion at this
point in time would in effect sanction plaintiff’s disregard for the rules of procedure. Plaintiff has slept on its rights for almost two years
and it was only in February of 2000 that it sought to rectify its ineptitude by filing a motion to reopen its case as to enable it to introduce
and offer Bane’s deposition as additional evidence, or in the alternative for the court to take judicial notice of the allegations of the
deposition. But how can such a motion be granted when it has been resolved as early as 1998 that the deposition is inadmissible.
Without plaintiff having moved for reconsideration within the reglementary period, the resolution has attained finality and its effect
cannot be undone by the simple expedient of filing a motion, which though purporting to be a novel motion, is in reality a motion for
reconsideration of this court’s 1998 ruling. [emphases ours]

The resolution triggered the filing of the present petition.

THE PETITION

The petitioner filed the present petition claiming that the Sandiganbayan committed grave abuse of discretion:

12
 I.

x x x IN HOLDING THAT ITS INTERLOCUTORY ORDER IN 1998 HAD BECOME FINAL.

II.

x x x IN x x x REFUSING TO ADMIT THE BANE DEPOSITION –WHICH WAS ALREADY ADMITTED AS EVIDENCE IN AN
INCIDENT CASE (CIVIL CASE NO. 0130) – AS PART OF PETITIONER’S EVIDENCE IN THE MAIN x x x CASE (CIVIL
CASE NO. 0009).

III.

x x x IN REFUSING TO ADMIT A HIGHLY RELEVANT AND IMPORTANT PIECE OF EVIDENCE FOR THE PETITIONER
ON THE BASIS OF FLIMSY AND TENUOUS TECHNICAL GROUNDS.

The petitioner41 argues that the 1998 resolution of the Sandiganbayan is merely an interlocutory order; thus, the petitioner’s failure to
question this 1998 resolution could not have given it a character of "finality" so long as the main case remains pending. 42 On this basis,
the petitioner concludes that the Sandiganbayan’s denial of its 3rd motion was plainly tainted with grave abuse of discretion.

On the issue of the Sandiganbayan’s refusal (in its 2002 resolution) either to take judicial notice of or to admit the Bane deposition as
part of its evidence, the petitioner asserts that Civil Case No. 0130 (where the Bane deposition was originally taken, introduced and
admitted in evidence) is but a "child" of the "parent" case, Civil Case No. 0009; under this relationship, evidence offered and admitted in
any of the "children" cases should be considered as evidence in the "parent" case.

Lastly, the petitioner claims that given the crucial importance of the Bane deposition, the Sandiganbayan should not have denied its
admission on "flimsy grounds," considering that:

1. It was also already stated in the notice (of the taking of the Bane deposition) that it would be used as evidence in Civil Case
No. 0009. Notices having been duly served on all the parties concerned, they must accordingly be deemed to
have waived their right to cross-examine the witness when they failed to show up.

2. The Bane deposition was a very vital cog in the case of the petitioner relative to its allegation that the respondents’ interest
in ETPI and related firms properly belongs to the government.

3. The non-inclusion of the Bane deposition in the petitioner’s formal offer of evidence was obviously excusable considering
the period that had lapsed from the time the case was filed and the voluminous records that the present case has generated. 43

THE RESPONDENTS’ COMMENTS

and THE PETITIONER’S REPLY

In the respondents’ Comments44 (filed in compliance with our Resolution of April 10, 200245 ), they claim that the present petition was
filed out of time - i.e., beyond the 60-day reglementary period prescribed under Section 4, Rule 65 of the Rules of Court. 46 This
assertion proceeds from the view that the petitioner’s 3rd motion, being a mere rehash of similar motions earlier filed by the petitioner,
likewise simply assails the Sandiganbayan’s 1998 resolution. Along the same line, they posit that the petitioner’s 3rd motion actually
partakes of a proscribed third motion for reconsideration of the Sandiganbayan’s 1998 resolution. 47 They likewise assert, on the
assumption that the 1998 resolution is interlocutory in character, that the petitioner’s failure to contest the resolution by way
of certiorari within the proper period gave the 1998 resolution a character of "finality."

The respondents further claim that after a party has rested its case, the admission of a supplemental offer of evidence requires the
reopening of the case at the discretion of the trial court; the Sandiganbayan simply exercised its sound discretion in refusing to reopen
the case since the evidence sought to be admitted was "within the knowledge of the [petitioner] and available to [it] before [it] rested its
case."48 The respondents also advert to the belated filing of the petitioner’s 3rd motion – i.e., after the respondents had filed their
respective demurrers to evidence.

On the petitioner’s claim of waiver, the respondents assert that they have not waived their right to cross-examine the deponent; the
Sandiganbayan recognized this right in its 1998 resolution and the petitioner never questioned this recognition. They also assert that
the allegations in the Bane deposition cannot be a proper subject of judicial notice under Rule 129 of the Rules of Court. The
respondents lastly submit that the Bane deposition is inadmissible in evidence because the petitioner failed to comply with the
requisites for admission under Section 47, Rule 130 of the Rules of Court.

In its Reply,49 the petitioner defends the timeliness of the present petition by arguing that a party may opt to wait out and collect a
pattern of questionable acts before resorting to the extraordinary remedy of certiorari. The petitioner stresses that it filed the 3rd motion

13
precisely because of the Sandiganbayan’s 2000 resolution, which held that the admission of the Bane deposition should be done
through the ordinary formal offer of evidence. Thus, the Sandiganbayan seriously erred in considering the petitioner’s 3rd motion as a
proscribed motion for reconsideration. The petitioner generally submits that the dictates of substantial justice should have guided the
Sandiganbayan to rule otherwise.

The petitioner also clarifies that it has not yet rested its case although it has filed a formal offer of evidence. A party normally rests his
case only after the admission of the pieces of evidence he formally offered; before then, he still has the opportunity to present further
evidence to substantiate his theory of the case should the court reject any piece of the offered evidence. 50

The petitioner further maintains that the mere reasonable opportunity to cross-examine the deponent is sufficient for the admission of
the Bane deposition considering that the deponent is not an ordinary witness who can be easily summoned by our courts in light of his
foreign residence, his citizenship, and his advanced age. The petitioner asserts that Rule 24 (now Rule 23), and not Section 47, Rule
130, of the Rules of Court should apply to the present case, as explicitly stated in the notice of the deposition-taking.

To date, respondents Imelda Marcos and the heirs of Potenciano Ilusorio have yet to file their respective comments on the petition.
Given the time that had lapsed since we required their comments, we resolve to dispense with the filing of these comments and to
consider this petition submitted for decision.

THE ISSUES

On the basis of the pleadings, we summarize the pivotal issues for our resolution, as follows:

1. Whether the petition was filed within the required period.

2. Whether the Sandiganbayan committed grave abuse of discretion –

i. In holding that the 1998 resolution has already attained finality;

ii. In holding that the petitioner’s 3rd motion partakes of a prohibited motion for reconsideration;

iii. In refusing to re-open the case given the critical importance of the Bane deposition to the petitioner’s cause; and

iv. In refusing to admit the Bane deposition notwithstanding the prior consolidation of Civil Case No. 0009 and Civil
Case No. 0130.

3. Whether the Bane deposition is admissible under -

i. Rule 23, Section 4, par. (c) alone or in relation to Section 47, Rule 130 of the Rules of Court; and

ii. The principle of judicial notice.

THE COURT’S RULING

We deny the petition for lack of merit.

I. Preliminary Considerations

I (a). The interlocutory nature of the Sandiganbayan’s 1998 resolution.

In determining the appropriate remedy or remedies available, a party aggrieved by a court order, resolution or decision must first
correctly identify the nature of the order, resolution or decision he intends to assail. 51 In this case, we must preliminarily determine
whether the 1998 resolution is "final" or "interlocutory" in nature.

Case law has conveniently demarcated the line between a final judgment or order and an interlocutory one on the basis of the
disposition made.52 A judgment or order is considered final if the order disposes of the action or proceeding completely, or terminates a
particular stage of the same action; in such case, the remedy available to an aggrieved party is appeal. If the order or resolution,
however, merely resolves incidental matters and leaves something more to be done to resolve the merits of the case, the order is
interlocutory53 and the aggrieved party’s remedy is a petition for certiorari under Rule 65. Jurisprudence pointedly holds that:

14
As distinguished from a final order which disposes of the subject matter in its entirety or terminates a particular proceeding or action,
leaving nothing else to be done but to enforce by execution what has been determined by the court, an interlocutory order does not
dispose of a case completely, but leaves something more to be adjudicated upon. The term "final" judgment or order signifies a
judgment or an order which disposes of the case as to all the parties, reserving no further questions or directions for future
determination.

On the other hand, a court order is merely interlocutory in character if it leaves substantial proceedings yet to be had in connection with
the controversy. It does not end the task of the court in adjudicating the parties’ contentions and determining their rights and liabilities
as against each other. In this sense, it is basically provisional in its application.54 (emphasis supplied)

Under these guidelines, we agree with the petitioner that the 1998 resolution is interlocutory. The Sandiganbayan’s denial of the
petitioner’s 1st motion through the 1998 Resolution came at a time when the petitioner had not even concluded the presentation of its
evidence. Plainly, the denial of the motion did not resolve the merits of the case, as something still had to be done to achieve this end.

We clarify, too, that an interlocutory order remains under the control of the court until the case is finally resolved on the merits. The
court may therefore modify or rescind the order upon sufficient grounds shown at any time before final judgment. 55 In this light, the
Sandiganbayan’s 1998 resolution – which merely denied the adoption of the Bane deposition as part of the evidence in Civil Case No.
0009 – could not have attained finality (in the manner that a decision or final order resolving the case on the merits does) despite the
petitioner’s failure to move for its reconsideration or to appeal. 56

I (b). The 3rd motion was not prohibited by the Rules.

We also agree with the petitioner that its 3rd motion cannot be considered as a proscribed third (actually second) motion for
reconsideration of the Sandiganbayan’s 1998 resolution. As Section 5, Rule 37 of the Rules of Court clearly provides, the proscription
against a second motion for reconsideration is directed against "a judgment or final order." Although a second motion for
reconsideration of an interlocutory order can be denied on the ground that it is a mere "rehash" of the arguments already passed upon
and resolved by the court, it cannot be rejected on the ground that it is forbidden by the law or by the rules as a prohibited motion. 57

I (c). The 1998 resolution was not ripe for a petition for certiorari.

Under Section 1, Rule 41 of the Rules of Court, an aggrieved party may appeal from a judgment or final order which completely
disposes of a case or from an order that the Rules of Court declares to be appealable. While this provision prohibits an appeal from an
interlocutory order, the aggrieved party is afforded the chance to question an interlocutory order through a special civil action
of certiorari under Rule 65; the petition must be filed within sixty days from notice of the assailed judgment, order, resolution, or denial
of a motion for reconsideration.

On the premise that the 1998 resolution is interlocutory in nature, the respondents insist that the 60-day period for filing a petition
for certiorari should be reckoned from the petitioner’s notice of the Sandiganbayan’s 1998 resolution. They argue that since this ruling
had long been rendered by the court, the petitioner’s subsequent filing of similar motions was actually a devious attempt to resuscitate
the long-denied admission of the Bane deposition.

We do not find the respondents’ submission meritorious. While the 1998 resolution is an interlocutory order, as correctly argued by the
petitioner and impliedly conceded by the respondents, the claim that the 1998 resolution should have been immediately questioned by
the petitioner on certiorari is not totally correct as a petition for certiorari is not grounded solely on the issuance of a disputed
interlocutory ruling.58 For a petition for certiorari to prosper, Section 1, Rule 65 of the Rules of Court requires, among others, that neither
an appeal nor any plain, speedy and adequate remedy in the ordinary course of law is available to the aggrieved party. As a matter of
exception, the writ of certiorari may issue notwithstanding the existence of an available alternative remedy, if such remedy is
inadequate or insufficient in relieving the aggrieved party of the injurious effects of the order complained of. 59

We note that at the time of its 1st motion in Civil Case No. 0009, the petitioner had not yet concluded the presentation of its evidence,
much less made any formal offer of evidence. At this stage of the case, the prematurity of using the extraordinary remedy of certiorari to
question the admission of the Bane deposition is obvious. After the denial of the 1st motion, the plain remedy available to the petitioner
was to move for a reconsideration to assert and even clarify its position on the admission of the Bane deposition. The petitioner could
introduce60 anew the Bane deposition and include this as evidence in its formal offer 61 – as the petitioner presumably did in Civil Case
No. 0130.

Thus, at that point, the case was not yet ripe for the filing of a petition for certiorari, and the denial of the 1st motion could not have been
the reckoning point for the period of filing such a petition.

II. The Sandiganbayan’s ruling on the finality of its 1998 resolution was legally erroneous but did not constitute grave abuse
of discretion

15
In light of the above discussions and conclusions, the Sandiganbayan undoubtedly erred on a question of law in its ruling, but this
legal error did not necessarily amount to a grave abuse of discretion in the absence of a clear showing that its action was a capricious
and whimsical exercise of judgment affecting its exercise of jurisdiction.62 Without this showing, the Sandiganbayan’s erroneous legal
conclusion was only an error of judgment, or, at best, an abuse of discretion but not a grave one. For this reason alone, the petition
should be dismissed.

Despite this conclusion, however, we opt not to immediately dismiss the petition in light of the unique circumstances of this case where
the petitioner cannot entirely be faulted for not availing of the remedy at the opportune time, and where the case, by its nature, is
undoubtedly endowed with public interest and has become a matter of public concern. 63 In other words, we opt to resolve the petition on
the merits to lay the issues raised to rest and to avoid their recurrence in the course of completely resolving the merits of Civil Case No.
0009.

Although the word "rested" nowhere appears in the Rules of Court, ordinary court procedure has inferred it from an overview of trial
sequence under Section 5, Rule 30 (which capsulizes the order of presentation of a

party’s evidence during trial), read in relation to Rule 18 on Pre-Trial, 64 both of the Rules of Court. Under Section 5, Rule 30, after a
party has adduced his direct evidence in the course of discharging the burden of proof, 65 he is considered to have rested his case, and
is thereafter allowed to offer rebutting evidence only.66 Whether a party has rested his case in some measure depends on his
manifestation in court on whether he has concluded his presentation of evidence. 67

In its second and third motions, respectively, the petitioner expressly admitted that "due to oversight, [the petitioner] closed and
rested its case";68 and that it "had terminated the presentation of its evidence in x x x Civil Case No. 0009."69 In the face of these
categorical judicial admissions,70 the petitioner cannot suddenly make an about-face and insist on the introduction of evidence out of
the usual order. Contrary to the petitioner’s assertion, the resting of its case could not have been conditioned on the admission of the
evidence it formally offered. To begin with, the Bane deposition, which is the lone piece of evidence subject of this present petition, was
not among the pieces of evidence included in its formal offer of evidence and thus could not have been admitted or rejected by the trial
court.

The Court observes with interest that it was only in this present petition for certiorari that the petitioner had firmly denied having rested
its case.71 Before then, the petitioner never found it appropriate to question on certiorari the Sandiganbayan’s denial of its 2nd motion
which prayed, inter alia, for the reopening of the case. This is a fatal defect in the petitioner’s case.

Although the denial of the petitioner’s first motion did not necessitate an immediate recourse to the corrective writ of certiorari, the
denial of the 2nd motion dictated a different course of action. The petitioner’s non-observance of the proper procedure for the
admission of the Bane deposition, while seemingly innocuous, carried fatal implications for its case. Having been rebuffed on its first
attempt to have the Bane deposition adopted in Civil Case No. 0009, and without seeking reconsideration of the denial, the petitioner
presented its other pieces of evidence and eventually rested its case. This time, the petitioner forgot about the Bane deposition and so
failed to include that piece of evidence in its formal offer of evidence.

More than two years later, the petitioner again tried to squeeze in the Bane deposition into its case. In resolving the petitioner’s motion
for reconsideration of the Sandiganbayan’s 2000 resolution, the Sandiganbayan held that the Bane deposition has "become part and
parcel" of Civil Case No. 0009. This pronouncement has obscured the real status of the Bane deposition as evidence (considering that,
earlier, the Sandiganbayan already denied the petitioner’s attempt to adopt the Bane deposition as evidence in Civil Case No. 0009 for
the deponent cannot be cross-examined in court). Nevertheless, the Sandiganbayan ultimately denied the petitioner’s motion to reopen
the case. Having judicially admitted the resting of its case, the petitioner should have already questioned the denial of its 2nd motion by
way of certiorari, since the denial of its attempt to reopen the case effectively foreclosed all avenues available to it for the consideration
of the Bane deposition. Instead of doing so, however, the petitioner allowed the 60-day reglementary period, under Section 4,
Rule 65 of the Rules of Court, to lapse, and proceeded to file its 3rd motion.

Significantly, the petitioner changed its legal position in its 3rd motion by denying having rested its case and insisting on the introduction
of the Bane deposition. Rebuffed once more, the petitioner filed the present petition, inviting our attention to the Sandiganbayan’s
resolutions,72 which allegedly gave it "mixed signals."73 By pointing to these resolutions, ironically, even the petitioner impliedly
recognized that they were then already ripe for review on certiorari. What the petitioner should have realized was that its 2nd motion
unequivocally aimed to reopen the case for the introduction of further evidence consisting of the Bane deposition. Having
been ultimately denied by the court, the petitioner could not have been prevented from taking the proper remedy notwithstanding any
perceived ambiguity in the resolutions.

On the other end, though, there was nothing intrinsically objectionable in the petitioner’s motion to reopen its case before the court
ruled on its formal offer of evidence. The Rules of Court does not prohibit a party from requesting the court to allow it to present
additional evidence even after it has rested its case. Any such opportunity, however, for the ultimate purpose of the admission of
additional evidence is already addressed to the sound discretion of the court. It is from the prism of the exercise of this discretion that
the Sandiganbayan’s refusal to reopen the case (for the purpose of introducing, "marking and offering" additional evidence) should be
viewed. We can declare this Sandiganbayan action invalid if it had acted with grave abuse of discretion.

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III. The Sandiganbayan gravely abused its discretion in ultimately refusing to reopen the case for the purpose of introducing
and admitting in evidence the Bane deposition

The basis for a motion to reopen a case to introduce further evidence is Section 5, Rule 30 of the Rules of Court, which reads:

Sec. 5. Order of trial. – Subject to the provisions of section 2 of Rule 31, and unless the court for special reasons otherwise directs, the
trial shall be limited to the issues stated in the pre-trial order and shall proceed as follows:

xxxx

(f) The parties may then respectively adduce rebutting evidence only, unless the court, for good reasons and in the furtherance of
justice, permits them to adduce evidence upon their original case[.] [emphases ours]

Under this rule, a party who has the burden of proof must introduce, at the first instance, all the evidence he relies upon 74 and such
evidence cannot be given piecemeal.75 The obvious rationale of the requirement is to avoid injurious surprises to the other party and the
consequent delay in the administration of justice.76

A party’s declaration of the completion of the presentation of his evidence prevents him from introducing further evidence; 77 but where
the evidence is rebuttal in character, whose necessity, for instance, arose from the shifting of the burden of evidence from one party to
the other;78 or where the evidence sought to be presented is in the nature of newly discovered evidence,79 the party’s right to introduce
further evidence must be recognized. Otherwise, the aggrieved party may avail of the remedy of certiorari.

Largely, the exercise of the court’s discretion80 under the exception of Section 5(f), Rule 30 of the Rules of Court depends on
the attendant facts – i.e., on whether the evidence would qualify as a "good reason" and be in furtherance of "the interest of justice."
For a reviewing court to properly interfere with the lower court’s exercise of discretion, the petitioner must show that the lower court’s
action was attended by grave abuse of discretion. Settled jurisprudence has defined this term as the capricious and whimsical exercise
of judgment, equivalent to lack of jurisdiction; or, the exercise of power in an arbitrary manner by reason of passion, prejudice, or
personal hostility, so patent or so gross as to amount to an evasion of a positive duty, to a virtual refusal to perform the mandated duty,
or to act at all in contemplation of the law.81 Grave abuse of discretion goes beyond the bare and unsupported imputation of caprice,
whimsicality or arbitrariness, and beyond allegations that merely constitute errors of judgment 82 or mere abuse of discretion.83

In Lopez v. Liboro,84 we had occasion to make the following pronouncement:

After the parties have produced their respective direct proofs, they are allowed to offer rebutting evidence only, but, it has been held,
the court, for good reasons, in the furtherance of justice, may permit them to offer evidence upon their original case, and its ruling will
not be disturbed in the appellate court where no abuse of discretion appears. So, generally, additional evidence is allowed when it is
newly discovered, or where it has been omitted through inadvertence or mistake, or where the purpose of the evidence is to correct
evidence previously offered. The omission to present evidence on the testator's knowledge of Spanish had not been deliberate. It was
due to a misapprehension or oversight. (citations omitted; emphases ours)

Likewise, in Director of Lands v. Roman Archbishop of Manila,85 we ruled:

The strict rule is that the plaintiff must try his case out when he commences. Nevertheless, a relaxation of the rule is permitted in the
sound discretion of the court. "The proper rule for the exercise of this discretion," it has been said by an eminent author, "is,
that material testimony should not be excluded because offered by the plaintiff after the defendant has rested, although not in
rebuttal, unless it has been kept back by a trick, and for the purpose of deceiving the defendant and affecting his case
injuriously."

These principles find their echo in Philippine remedial law. While the general rule is rightly recognized, the Code of Civil Procedure
authorizes the judge "for special reasons," to change the order of the trial, and "for good reason, in the furtherance of justice," to permit
the parties "to offer evidence upon their original case." These exceptions are made stronger when one considers the character of
registration proceedings and the fact that where so many parties are involved, and action is taken quickly and abruptly, conformity with
precise legal rules should not always be expected. Even at the risk of violating legal formulæ, an opportunity should be given to
parties to submit additional corroborative evidence in support of their claims of title, if the ends of justice so require.
(emphases ours)

In his commentaries, Chief Justice Moran had this to say:

However, the court for good reasons, may, in the furtherance of justice, permit the parties to offer evidence upon their original case, and
its ruling will not be disturbed where no abuse of discretion appears, Generally, additional evidence is allowed when x x x; but it may
be properly disallowed where it was withheld deliberately and without justification.86

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The weight of the exception is also recognized in foreign jurisprudence. 87

Under these guidelines, we hold that the Sandiganbayan gravely abused its discretion in refusing to reopen the case. Instead of
squarely ruling on the petitioner’s 2nd motion to avoid any uncertainty on the evidentiary status of the Bane deposition, the
Sandiganbayan’s action actually left the petitioner’s concern in limbo by considering the petitioner’s motion "redundant." This is
tantamount to a refusal to undertake a positive duty as mandated by the circumstances and is equivalent to an act outside the
contemplation of law.

It has not escaped our notice that at the time the petitioner moved to re-open its case, the respondents had not yet even presented their
evidence in chief. The respondents, therefore, would not have been prejudiced by allowing the petitioner’s introduction of the Bane
deposition, which was concededly omitted "through oversight."88 The higher interest of substantial justice, of course, is another
consideration that cannot be taken lightly.89

In light of these circumstances, the Sandiganbayan should not have perfunctorily applied Section 5, Rule 30 of the Rules of Court on
the petitioner’s request to reopen the case for the submission of the Bane deposition.

On the basis of this conclusion, a remand of this case should follow as a matter of course. The state of the parties’ submissions and the
delay that has already attended this aspect of Civil Case No. 0009, however, dictate against this obvious course of action. At this point,
the parties have more than extensively argued for or against the admission of the Bane deposition. Civil Case No. 0009 is a 25-year old
sequestration case that is now crying out for complete resolution. Admissibility, too, is an issue that would have again been raised on
remand and would surely stare us in the face after remand.90 We are thus left with no choice but to resolve the issue of admissibility of
the Bane deposition here and now.

IV. The admissibility of the Bane deposition

IV (a). The consolidation of Civil Case No. 0009 and Civil Case No. 0130 did not dispense with the usual requisites of
admissibility

In support of its 3rd motion, the petitioner argues that the Bane deposition can be admitted in evidence without observing the provisions
of Section 47, Rule 130 of the Rules of Court.91 The petitioner claims that in light of the prior consolidation of Civil Case No. 0009 and
Civil Case No. 0130, among others,92 the "former case or proceeding" that Section 47, Rule 130 speaks of no longer exists.

Rule 31 of the old Rules of Court93 – the rule in effect at the time Civil Case Nos. 0009 and 0130 were consolidated – provided that:

Rule 31
Consolidation or Severance

Section 1. Consolidation. – When actions involving a common question of law or fact are pending before the court, it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay. 94 (emphases ours)

Consolidation is a procedural device granted to the court as an aid in deciding how cases in its docket are to be tried so that the
business of the court may be dispatched expeditiously and with economy while providing justice to the parties. To promote this end, the
rule permits the consolidation and a single trial of several cases in the court’s docket, or the consolidation of issues within those
cases.95

A reading of Rule 31 of the Rules of Court easily lends itself to two observations. First, Rule 31 is completely silent on the effect/s of
consolidation on the cases consolidated; on the parties and the causes of action involved; and on the evidence presented in the
consolidated cases. Second, while Rule 31 gives the court the discretion either to order a joint hearing or trial, or to order the actions
consolidated, jurisprudence will show that the term "consolidation" is used generically and even synonymously with joint hearing or trial
of several causes.96 In fact, the title "consolidation" of Rule 31 covers all the different senses of consolidation, as discussed below.

These observations are not without practical reason. Considering that consolidation is basically a function given to the court, the latter is
in the best position to determine for itself (given the nature of the cases, the complexity of the issues involved, the parties affected, and
the court’s capability and resources vis-à-vis all the official business pending before it, among other things) what "consolidation" will
bring, bearing in mind the rights of the parties appearing before it.

To disregard the kind of consolidation effected by the Sandiganbayan on the simple and convenient premise that the deposition-taking
took place after the Sandiganbayan ordered the consolidation is to beg the question. It is precisely the silence of our Rules of
Procedure and the dearth of applicable case law on the effect of "consolidation" that strongly compel this Court to determine the kind of
"consolidation" effected to directly resolve the very issue of admissibility in this case.

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In the context of legal procedure, the term "consolidation" is used in three different senses: 97

(1) Where all except one of several actions are stayed until one is tried, in which case the judgment in the one trial is
conclusive as to the others. This is not actually consolidation but is referred to as such. (quasi-consolidation)98

(2) Where several actions are combined into one, lose their separate identity, and become a single action in which a single
judgment is rendered. This is illustrated by a situation where several actions are pending between the same parties stating
claims which might have been set out originally in one complaint. (actual consolidation)99

(3) Where several actions are ordered to be tried together but each retains its separate character and requires the entry of a
separate judgment. This type of consolidation does not merge the suits into a single action, or cause the parties to one action
to be parties to the other. (consolidation for trial)100

Considering that the Sandiganbayan’s order101 to consolidate several incident cases does not at all provide a hint on the extent of the
court’s exercise of its discretion as to the effects of the consolidation it ordered – in view of the function of this procedural device to
principally aid the court itself in dealing with its official business – we are compelled to look deeper into the voluminous records of the
proceedings conducted below. We note that there is nothing that would even suggest that the Sandiganbayan in fact intended a merger
of causes of action, parties and evidence.102 To be sure, there would have been no need for a motion to adopt (which did not remain
unopposed) the testimonies in the incident cases had a merger actually resulted from the order of consolidation, for in that case, the
Sandiganbayan can already take judicial notice of the same.

Significantly, even the petitioner itself viewed consolidation, at most, to be merely a consolidation for trial. 103 Accordingly, despite the
consolidation in 1993, the petitioner acceded to the Sandiganbayan’s 1998 Resolution (which denied the petitioner’s 1st Motion on the
ground that the witnesses, whose testimony in the incident cases is sought to be adopted, "are not available for cross-examination in"
the Sandiganbayan) by presenting these other witnesses again in the main case, so that the respondents can cross-examine them.

These considerations run counter to the conclusion that the Sandiganbayan’s order of consolidation had actually resulted in the
complete merger of the incident cases with the main case, in the sense of actual consolidation, and that the parties in these
consolidated cases had (at least constructively) been aware of and had allowed actual consolidation without objection. 104

Considering, too, that the consolidated actions were originally independent of one another and the fact that in the present case the
party respondents to Civil Case No. 0009 (an action for reconveyance, accounting, restitution and damages) are not parties to Civil
Case No. 0130 (a special civil action filed by an ETPI stockholder involving a corporate squabble within ETPI), the conclusion that the
Sandiganbayan in fact intended an actual consolidation and, together with the parties affected,105 acted towards that end - where the
actions become fused and unidentifiable from one another and where the evidence appreciated in one action is also appreciated in
another action – must find support in the proceedings held below. This is particularly true in a case with the magnitude and complexity
of the present case. Otherwise, to impose upon the respondents the effects of an actual consolidation (which find no clear support in
the provisions of the Rules of Court, jurisprudence,106 and even in the proceedings before the Sandiganbayan itself and despite the
aforementioned considerations) results in an outright deprivation of the petitioner’s right to due process. We reach this conclusion
especially where the evidence sought to be admitted is not simply a testimony taken in one of the several cases, but a deposition upon
oral examination taken in another jurisdiction and whose admission is governed by specific provisions on our rules on evidence.

We stress on this point, too, that while the Sandiganbayan ordered the consolidation in 1993 (that is, before the deposition was taken),
neither does the Pre-Trial Order107 issued by the Sandiganbayan in 1997 in Civil Case No. 0009 contain any reference, formal or
substantive, to Civil Case No. 0130.108 Interestingly, in its Pre-Trial Brief dated August 30, 1996, 109 the petitioner even made a
representation to present Bane as one of its witnesses.

IV (b). Use of deposition under Section 4, Rule 23 and as a former testimony under Section 47, Rule 130

Since the present consolidation did not affect Civil Case No. 0130 as an original, albeit incidental, case, the admissibility of the Bane
deposition cannot avoid being measured against the requirements of Section 47, Rule 130 of the Rules of Court – the rule on the
admissibility of testimonies or deposition taken in a different proceeding. In this regard, the petitioner argues that Section 4, Rule 23 of
the Rules of Court (then Rule 24)110 must, at any rate, prevail over Section 47, Rule 130111 of the same Rules.

At the outset, we note that when the petitioner’s motion to adopt the testimonies taken in the incident cases drew individual oppositions
from the respondents, the petitioner represented to the Sandiganbayan its willingness to comply with the provisions of Section 47, Rule
130 of the Rules of Court,112 and, in fact, again presented some of the witnesses. The petitioner’s about-face two years thereafter even
contributed to the Sandiganbayan’s own inconsistency on how to treat the Bane deposition, in particular, as evidence.

Section 4, Rule 23 of the Rules of Court on "Deposition Pending Action" (deposition de bene esse) provides for the circumstances
when depositions may be used in the trial, or at the hearing of a motion or an interlocutory proceeding.

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SEC. 4. Use of depositions. — At the trial or upon the hearing of a motion or an interlocutory proceeding, any part or all of a
deposition, so far as admissible under the rules of evidence, may be used against any party who was present or represented at the
taking of the deposition or who had due notice thereof, in accordance with any one of the following provisions:

xxxx

(c) The deposition of a witness, whether or not a party, may be used by any party for any purpose if the court finds: (1) that the
witness is dead; or (2) that the witness resides at a distance more than one hundred (100) kilometers from the place of trial or hearing,
or is out of the Philippines, unless it appears that his absence was procured by the party offering the deposition; or (3) that the witness
is unable to attend or testify because of age, sickness, infirmity, or imprisonment; or (4) that the party offering the deposition has been
unable to procure the attendance of the witness by subpoena; or (5) upon application and notice, that such exceptional circumstances
exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses
orally in open court, to allow the deposition to be used[.] [emphasis ours]

On the other hand, Section 47, Rule 130 of the Rules of Court provides:

SEC. 47. Testimony or deposition at a former proceeding. – The testimony or deposition of a witness deceased or unable to testify,
given in a former case or proceeding, judicial or administrative, involving the same parties and subject matter, may be given in
evidence against the adverse party who had the opportunity to cross-examine him.

A plain reading of Rule 23 of the Rules of Court readily rejects the petitioner’s position that the Bane deposition can be admitted into
evidence without observing the requirements of Section 47, Rule 130 of the Rules of Court.

Before a party can make use of the deposition taken at the trial of a pending action, Section 4, Rule 23 of the Rules of Court does not
only require due observance of its sub-paragraphs (a) to (d); it also requires, as a condition for admissibility, compliance with "the rules
on evidence." Thus, even Section 4, Rule 23 of the Rules of Court makes an implied reference to Section 47, Rule 130 of the Rules of
Court before the deposition may be used in evidence. By reading Rule 23 in isolation, the petitioner failed to recognize that the
principle conceding admissibility to a deposition under Rule 23 should be consistent with the rules on evidence under Section 47, Rule
130.113 In determining the admissibility of the Bane deposition, therefore, reliance cannot be given on one provision to the exclusion of
the other; both provisions must be considered. This is particularly true in this case where the evidence in the prior proceeding does
not simply refer to a witness’ testimony in open court but to a deposition taken under another and farther jurisdiction.

A common thread that runs from Section 4, Rule 23 of the Rules of Court and Section 47, Rule 130 of the same Rules is their mutual
reference to depositions.

A deposition is chiefly a mode of discovery whose primary function is to supplement the pleadings for the purpose of disclosing the real
points of dispute between the parties and affording an adequate factual basis during the preparation for trial. 114 Since depositions are
principally made available to the parties as a means of informing themselves of all the relevant facts, depositions are not meant as
substitute for the actual testimony in open court of a party or witness. Generally, the deponent must be presented for oral examination
in open court at the trial or hearing. This is a requirement of the rules on evidence under Section 1, Rule 132 of the Rules of Court. 115

Examination to be done in open court. — The examination of witnesses presented in a trial or hearing shall be done in open court,
and under oath or affirmation. Unless the witness is incapacitated to speak, or the question calls for a different mode of answer, the
answers of the witness shall be given orally.

Indeed, any deposition offered to prove the facts set forth therein, in lieu of the actual oral testimony of the deponent in open court, may
be opposed by the adverse party and excluded under the hearsay rule – i.e., that the adverse party had or has no opportunity to cross-
examine the deponent at the time that his testimony is offered. That opportunity for cross-examination was afforded during the taking of
the deposition alone is no argument, as the opportunity for cross-examination must normally be accorded a party at the time that the
testimonial evidence is actually presented against him during the trial or hearing of a case.116 However, under certain conditions and for
certain limited purposes laid down in Section 4, Rule 23 of the Rules of Court, the deposition may be used without the deponent being
actually called to the witness stand.117

Section 47, Rule 130 of the Rules of Court is an entirely different provision. While a former testimony or deposition appears under
the Exceptions to the Hearsay Rule, the classification of former testimony or deposition as an admissible hearsay is not universally
conceded.118 A fundamental characteristic of hearsay evidence is the adverse party’s lack of opportunity to cross-examine the out-of-
court declarant. However, Section 47, Rule 130 explicitly requires, inter alia, for the admissibility of a former testimony or deposition that
the adverse party must have had an opportunity to cross-examine the witness or the deponent in the prior proceeding.

This opportunity to cross-examine though is not the ordinary cross-examination 119 afforded an adverse party in usual trials regarding
"matters stated in the direct examination or connected therewith." Section 47, Rule 130 of the Rules of Court contemplates a different
kind of cross-examination, whether actual or a mere opportunity, whose adequacy depends on the requisite identity of issues in the
former case or proceeding and in the present case where the former testimony or deposition is sought to be introduced.

20
Section 47, Rule 130 requires that the issues involved in both cases must, at least, be substantially the same; otherwise, there is no
basis in saying that the former statement was - or would have been - sufficiently tested by cross-examination or by an opportunity to do
so.120 (The requirement of similarity though does not mean that all the issues in the two proceedings should be the same. 121 Although
some issues may not be the same in the two actions, the admissibility of a former testimony on an issue which is similar in both actions
cannot be questioned.122 )

These considerations, among others, make Section 47, Rule 130 a distinct rule on evidence and therefore should not be confused with
the general provisions on deposition under Rule 23 of the Rules of Court. In other words, even if the petitioner complies with Rule 23 of
the Rules of Court on the use of depositions, the observance of Section 47, Rule 130 of the Rules of Court cannot simply be avoided or
disregarded.

Undisputably, the Sandiganbayan relied on the Bane deposition, taken in Civil Case No. 0130, for purposes of this very same case.
Thus, what the petitioner established and what the Sandiganbayan found, for purposes of using the Bane deposition, refer only to the
circumstances laid down under Section 4(c), Rule 23 of the Rules of Court, not necessarily to those of Section 47, Rule 130 of the
Rules of Court, as a distinct rule on evidence that imposes further requirements in the use of depositions in a different case or
proceeding. In other words, the prior use of the deposition under Section 4(c), Rule 23 cannot be taken as compliance with Section 47,
Rule 130 which considers the same deposition as hearsay, unless the requisites for its admission under this rule are observed. The
aching question is whether the petitioner complied with the latter rule.

Section 47, Rule 130 of the Rules of Court lays down the following requisites for the admission of a testimony or deposition given at a
former case or proceeding.

1. The testimony or deposition of a witness deceased or otherwise unable to testify;

2. The testimony was given in a former case or proceeding, judicial or administrative;

3. Involving the same parties;

4. Relating to the same matter;

5. The adverse party having had the opportunity to cross-examine him. 123

The reasons for the admissibility of testimony or deposition taken at a former trial or proceeding are the necessity for the testimony and
its trustworthiness.124 However, before the former testimony or deposition can be introduced in evidence, the proponent must first lay
the proper predicate therefor,125 i.e., the party must establish the basis for the admission of the Bane deposition in the realm of
admissible evidence. This basis is the prior issue that we must now examine and resolve.

IV (c). Unavailability of witness

For the admission of a former testimony or deposition, Section 47, Rule 130 of the Rules of Court simply requires, inter alia, that the
witness or deponent be "deceased or unable to testify." On the other hand, in using a deposition that was taken during the pendency of
an action, Section 4, Rule 23 of the Rules of Court provides several grounds that will justify dispensing with the actual testimony of the
deponent in open court and specifies, inter alia, the circumstances of the deponent’s inability to attend or testify, as follows:

(3) that the witness is unable to attend or testify because of age, sickness, infirmity, or imprisonment[.] [emphases ours] 126

The phrase "unable to testify" appearing in both Rule 23 and Rule 130 of the Rules of Court refers to a physical inability to appear at
the witness stand and to give a testimony.127 Hence notwithstanding the deletion of the phrase "out of the Philippines," which previously
appeared in Section 47, Rule 130 of the Rules of Court, absence from jurisdiction128 - the petitioner’s excuse for the non-presentation of
Bane in open court - may still constitute inability to testify under the same rule. This is not to say, however, that resort to deposition on
this instance of unavailability will always be upheld. Where the deposition is taken not for discovery purposes, but to accommodate the
deponent, then the deposition should be rejected in evidence. 129

Although the testimony of a witness has been given in the course of a former proceeding between the parties to a case on trial, this
testimony alone is not a ground for its admission in evidence. The witness himself, if available, must be produced in court as if he were
testifying de novo since his testimony given at the former trial is mere hearsay. 130 The deposition of a witness, otherwise available, is
also inadmissible for the same reason.

Indeed, the Sandiganbayan’s reliance on the Bane deposition in the other case (Civil Case No. 0130) is an argument in favor of the
requisite unavailability of the witness. For purposes of the present case (Civil Case No. 0009), however, the Sandiganbayan would
have no basis to presume, and neither can or should we, that the previous condition, which previously allowed the use of the
deposition, remains and would thereby justify the use of the same deposition in another case or proceeding, even if the other case or

21
proceeding is before the same court. Since the basis for the admission of the Bane deposition, in principle, being necessity, 131 the
burden of establishing its existence rests on the party who seeks the admission of the evidence. This burden cannot be supplanted by
assuming the continuity of the previous condition or conditions in light of the general rule against the non-presentation of the deponent
in court.132

IV (d). The requirement of opportunity of the adverse party to cross-examine; identity of parties; and identity of subject matter

The function of cross-examination is to test the truthfulness of the statements of a witness made on direct examination. 133 The
opportunity of cross-examination has been regarded as an essential safeguard of the accuracy and completeness of a testimony. In
civil cases, the right of cross-examination is absolute, and is not a mere privilege of the party against whom a witness may be
called.134 This right is available, of course, at the taking of depositions, as well as on the examination of witnesses at the trial. The
principal justification for the general exclusion of hearsay statements and for the admission, as an exception to the hearsay rule, of
reported testimony taken at a former hearing where the present adversary was afforded the opportunity to cross-examine, is based on
the premise that the opportunity of cross-examination is an essential safeguard 135 against falsehoods and frauds.

In resolving the question of whether the requirement of opportunity to cross-examine has been satisfied, we have to consider first the
required identity of parties as the present opponent to the admission of the Bane deposition to whom the opportunity to cross-examine
the deponent is imputed may not after all be the same "adverse party" who actually had such opportunity.

To render the testimony of a witness admissible at a later trial or action, the parties to the first proceeding must be the same as the
parties to the later proceeding. Physical identity, however, is not required; substantial identity 136 or identity of interests137 suffices, as
where the subsequent proceeding is between persons who represent the parties to the prior proceeding by privity in law, in blood, or in
estate. The term "privity" denotes mutual or successive relationships to the same rights of property. 138

In the present case, the petitioner failed to impute, much less establish, the identity of interest or privity between the then opponent,
Africa, and the present opponents, the respondents. While Africa is the son of the late respondent Jose Africa, at most, the deposition
should be admissible only against him as an ETPI stockholder who filed the certiorari petition docketed as Civil Case No. 0130 (and,
unavoidably, as successor-in-interest of the late respondent Jose Africa). While Africa and the respondents are all ETPI stockholders,
this commonality does not establish at all any privity between them for purposes of binding the latter to the acts or omissions of the
former respecting the cross-examination of the deponent. The sequestration of their shares does not result in the integration of their
rights and obligations as stockholders which remain distinct and personal to them, vis-a-vis other stockholders.139

IV (d1). The respondents’ notice of taking of Bane deposition is insufficient evidence of waiver

The petitioner staunchly asserts that the respondents have waived their right to cross-examine the deponent for their failure to appear
at the deposition-taking despite individual notices previously sent to them. 140

In its first Notice to Take Oral Deposition of Mr. Maurice V. Bane dated August 30, 1996, 141 the petitioner originally intended to depose
Mr. Bane on September 25-26 1996. Because it failed to specify in the notice the purpose for taking Mr. Bane’s deposition, the
petitioner sent a Second Amended Notice to Take Deposition of Mr. Maurice V. Bane Upon Oral Examination where it likewise moved
the scheduled deposition-taking to October 23-26, 1996.

The records show that Africa moved several times for protective orders against the intended deposition of Maurice Bane. 142 On the
other hand, among the respondents, only respondent Enrile appears to have filed an Opposition 143 to the petitioner’s first notice, where
he squarely raised the issue of reasonability of the petitioner’s nineteen-day first notice. While the Sandiganbayan denied Africa’s
motion for protective orders,144 it strikes us that no ruling was ever handed down on respondent Enrile’s Opposition. 145

It must be emphasized that even under Rule 23, the admission of the deposition upon oral examination is not simply based on the fact
of prior notice on the individual sought to be bound thereby. In Northwest Airlines v. Cruz, 146 we ruled that -

The provision explicitly vesting in the court the power to order that the deposition shall not be taken connotes the authority to exercise
discretion on the matter. However, the discretion conferred by law is not unlimited. It must be exercised, not arbitrarily or oppressively,
but in a reasonable manner and in consonance with the spirit of he law. The courts should always see to it that the safeguards for the
protection of the parties and deponents are firmly maintained. As aptly stated by Chief Justice Moran:

. . . . (T)his provision affords the adverse party, as well as the deponent, sufficient protection against abuses that may be committed by
a party in the exercise of his unlimited right to discovery. As a writer said: "Any discovery involves a prying into another person's affairs
— prying that is quite justified if it is to be a legitimate aid to litigation, but not justified if it is not to be such an aid." For this reason,
courts are given ample powers to forbid discovery which is intended not as an aid to litigation, but merely to annoy, embarrass or
oppress either the deponent or the adverse party, or both. (emphasis ours)

In the present case, not only did the Sandiganbayan fail to rule on respondent Enrile’s Opposition (which is equally applicable to his co-
respondents), it also failed to provide even the bare minimum "safeguards for the protection of," (more so) non-parties, 147 and to ensure

22
that these safeguards are firmly maintained. Instead, the Sandiganbayan simply bought the petitioner’s assertion (that the taking of
Bane deposition is a matter of right) and treated the lingering concerns – e.g., reasonability of the notice; and the non-party status of
the respondents in Civil Case No. 0130 - at whose incident (docketed as G.R. No. 107789) the Bane deposition was taken - rather
perfunctorily to the prejudice of the respondents.

In conjunction with the order of consolidation, the petitioner’s reliance on the prior notice on the respondents, as adequate opportunity
for cross-examination, cannot override the non-party status of the respondents in Civil Case No. 0130 – the effect of consolidation
being merely for trial. As non-parties, they cannot be bound by proceedings in that case. Specifically, they cannot be bound by the
taking of the Bane deposition without the consequent impairment of their right of cross-examination. 148 Opportunity for cross-
examination, too, even assuming its presence, cannot be singled out as basis for the admissibility of a former testimony or
deposition since such admissibility is also anchored on the requisite identity of parties. To reiterate, although the Sandiganbayan
considered the Bane deposition in resolving Civil Case No. 0130, its action was premised on Africa’s status as a party in that case
where the Bane deposition was taken.

Corollarily, the idea of privity also permeates Rule 23 of the Rules of Court through its Section 5 which provides:

Effect of substitution of parties. — Substitution of parties does not affect the right to use depositions previously taken; and, when an
action has been dismissed and another action involving the same subject is afterward brought between the same parties or their
representatives or successors in interest, all depositions lawfully taken and duly filed in the former action may be used in the latter as if
originally taken therefor. [italics and underscoring ours]

In light of these considerations, we reject the petitioner’s claim that the respondents waived their right to cross-examination when they
failed to attend the taking of the Bane deposition. Incidentally, the respondents’ vigorous insistence on their right to cross-examine the
deponent speaks loudly that they never intended any waiver of this right.

Interestingly, the petitioner’s notice of the deposition-taking relied on Rule 23 of the Rules of Court. Section 15 of this rule reads:

Deposition upon oral examination; notice; time and place. — A party desiring to take the deposition of any person upon oral
examination shall give reasonable notice in writing to every other party to the action. The notice shall state the time and place for
taking the deposition and the name and address of each person to be examined, if known, and if the name is not known, a general
description sufficient to identify him or the particular class or group to which he belongs. On motion of any party upon whom the notice
is served, the court may for cause shown enlarge or shorten the time.

Under this provision, we do not believe that the petitioner could reasonably expect that the individual notices it sent to the respondents
would be sufficient to bind them to the conduct of the then opponent’s (Africa’s) cross-examination since, to begin with, they were not
even parties to the action. Additionally, we observe that in the notice of the deposition taking, conspicuously absent was any indication
sufficient to forewarn the notified persons that their inexcusable failure to appear at the deposition taking would amount to a waiver of
their right of cross-examination, without prejudice to the right of the respondents to raise their objections at the appropriate time. 149 We
would be treading on dangerous grounds indeed were we to hold that one not a party to an action, and neither in privity nor in
substantial identity of interest with any of the parties in the same action, can be bound by the action or omission of the latter,
by the mere expedient of a notice. Thus, we cannot simply deduce a resultant waiver from the respondents’ mere failure to attend the
deposition-taking despite notice sent by the petitioner.

Lastly, we see no reason why the Bane deposition could not have been taken earlier in Civil Case No. 0009 – the principal action where
it was sought to be introduced – while Bane was still here in the Philippines. We note in this regard that the Philippines was no longer
under the Marcos administration and had returned to normal democratic processes when Civil Case No. 0009 was filed. In fact, the
petitioner’s notice itself states that the "purpose of the deposition is for Mr. Maurice Bane to identify and testify on the facts set forth in
his Affidavit," which Mr. Bane had long executed in 1991 in Makati, Metro Manila. 150 Clearly, a deposition could then have been taken -
without compromising the respondents’ right to cross-examine a witness against them - considering that the principal purpose of the
deposition is chiefly a mode of discovery. These, to our mind, are avoidable omissions that, when added to the deficient handling of the
present matter, add up to the gross deficiencies of the petitioner in the handling of Civil Case No. 0009.

After failing to take Bane’s deposition in 1991 and in view of the peculiar circumstances of this case, the least that the petitioner could
have done was to move for the taking of the Bane deposition and proceed with the deposition immediately upon securing a favorable
ruling thereon. On that occasion, where the respondents would have a chance to be heard, the respondents cannot avoid a resultant
waiver of their right of cross-examination if they still fail to appear at the deposition-taking. Fundamental fairness dictates this course of
action. It must be stressed that not only were the respondents non-parties to Civil Case No. 0130, they likewise have no interest in
Africa’s certiorari petition asserting his right as an ETPI stockholder.

Setting aside the petitioner’s flip-flopping on its own representations, 151 this Court can only express dismay on why the petitioner had to
let Bane leave the Philippines before taking his deposition despite having knowledge already of the substance of what he would testify
on. Considering that the testimony of Bane is allegedly a "vital cog" in the petitioner’s case against the respondents, the Court is left to
wonder why the petitioner had to take the deposition in an incident case (instead of the main case) at a time when it became the
technical right of the petitioner to do so.

23
V. The petitioner cannot rely on principle of judicial notice

The petitioner also claims that since the Bane deposition had already been previously introduced and admitted in Civil Case No. 0130,
then the Sandiganbayan should have taken judicial notice of the Bane deposition as part of its evidence.

Judicial notice is the cognizance of certain facts that judges may properly take and act on without proof because these facts are already
known to them.152 Put differently, it is the assumption by a court of a fact without need of further traditional evidentiary support. The
principle is based on convenience and expediency in securing and introducing evidence on matters which are not ordinarily capable of
dispute and are not bona fide disputed.153

The foundation for judicial notice may be traced to the civil and canon law maxim, manifesta (or notoria) non indigent probatione.154 The
taking of judicial notice means that the court will dispense with the traditional form of presentation of evidence. In so doing, the court
assumes that the matter is so notorious that it would not be disputed.

The concept of judicial notice is embodied in Rule 129 of the Revised Rules on Evidence. Rule 129 either requires the court to take
judicial notice, inter alia, of "the official acts of the x x x judicial departments of the Philippines," 155 or gives the court the discretion to
take judicial notice of matters "ought to be known to judges because of their judicial functions." 156 On the other hand, a party-litigant
may ask the court to take judicial notice of any matter and the court may allow the parties to be heard on the propriety of taking judicial
notice of the matter involved.157 In the present case, after the petitioner filed its Urgent Motion and/or Request for Judicial Notice, the
respondents were also heard through their corresponding oppositions.

In adjudicating a case on trial, generally, courts are not authorized to take judicial notice of the contents of the records of other cases,
even when such cases have been tried or are pending in the same court, and notwithstanding that both cases may have been tried or
are actually pending before the same judge.158 This rule though admits of exceptions.

As a matter of convenience to all the parties, a court may properly treat all or any part of the original record of a case filed in its archives
as read into the record of a case pending before it, when, with the knowledge of, and absent an objection from, the adverse
party, reference is made to it for that purpose, by name and number or in some other manner by which it is sufficiently
designated; or when the original record of the former case or any part of it, is actually withdrawn from the archives at the court's
direction, at the request or with the consent of the parties, and admitted as a part of the record of the case then pending.159

Courts must also take judicial notice of the records of another case or cases, where sufficient basis exists in the records of the case
before it, warranting the dismissal of the latter case.160

The issue before us does not involve the applicability of the rule on mandatory taking of judicial notice; neither is the applicability of the
rule on discretionary taking of judicial notice seriously pursued. Rather, the petitioner approaches the concept of judicial notice from a
genealogical perspective of treating whatever evidence offered in any of the "children" cases – Civil Case 0130 – as evidence in the
"parent" case – Civil Case 0009 - or "of the whole family of cases." 161 To the petitioner, the supposed relationship of these cases
warrants the taking of judicial notice.

We strongly disagree. First, the supporting cases162 the petitioner cited are inapplicable either because these cases involve only a
single proceeding or an exception to the rule, which proscribes the courts from taking judicial notice of the contents of the records of
other cases.163 Second, the petitioner’s proposition is obviously obnoxious to a system of orderly procedure. The petitioner itself admits
that the present case has generated a lot of cases, which, in all likelihood, involve issues of varying complexity. If we follow the logic of
the petitioner’s argument, we would be espousing judicial confusion by indiscriminately allowing the admission of evidence in one case,
which was presumably found competent and relevant in another case, simply based on the supposed lineage of the cases. It is the duty
of the petitioner, as a party-litigant, to properly lay before the court the evidence it relies upon in support of the relief it seeks, instead of
imposing that same duty on the court. We invite the petitioner’s attention to our prefatory pronouncement in Lopez v. Sandiganbayan:164

Down the oft-trodden path in our judicial system, by common sense, tradition and the law, the Judge in trying a case sees only with
judicial eyes as he ought to know nothing about the facts of the case, except those which have been adduced judicially in evidence.
Thus, when the case is up for trial, the judicial head is empty as to facts involved and it is incumbent upon the litigants to the action to
establish by evidence the facts upon which they rely. (emphasis ours)

We therefore refuse, in the strongest terms, to entertain the petitioner’s argument that we should take judicial notice of the Bane
deposition.

VI. Summation

To recapitulate, we hold that: (1) the Sandiganbayan’s denial of the petitioner’s 3rd motion – the Motion to Admit Supplemental Offer of
Evidence (Re: Deposition of Maurice Bane) – was a legal error that did not amount to grave abuse of discretion; (2) the
Sandiganbayan’s refusal to reopen the case at the petitioner’s instance was tainted with grave abuse of discretion; and (3)

24
notwithstanding the grave abuse of discretion, the petition must ultimately fail as the Bane deposition is not admissible under the rules
of evidence.165

VII. Refutation of Justice Carpio’s Last Minute Modified Dissent

At the last minute, Justice Carpio circulated a modified dissent, quoting the Bane deposition. His covering note states:

I have revised my dissenting opinion to include the Bane deposition so that the Court and the public will understand what the Bane
deposition is all about. (underlining added)

In light of this thrust, a discussion refuting the modified dissent is in order.

First: Contents of the Bane deposition not an Issue. The dissent perfectly identified what is at issue in this case – i.e., the admissibility
of the Bane deposition. Admissibility is concerned with the competence and relevance166 of the evidence, whose admission is sought.
While the dissent quoted at length the Bane deposition, it may not be amiss to point out that the relevance of the Bane deposition (or, to
adopt the dissent’s characterization, whether "Maurice V. Bane is a vital witness") is not an issue here unless it can be established first
that the Bane deposition is a competent evidence.

Second: Misrepresentation of Cited Authority. The dissent insists that "in Philippine Jurisprudence, the consolidation of cases merges
the different actions into one and the rights of the parties are adjudicated in a single judgment," citing Vicente J. Francisco. In our
discussion on consolidation, we footnoted the following in response to the dissent’s position, which we will restate here for emphasis:

In the 1966 edition of Vicente J. Francisco’s Revised Rules of Court, Francisco wrote:

The effect of consolidation of actions is to unite and merge all of the different actions consolidated into a single action, in the same
manner as if the different causes of actions involved had originally been joined in a single action, and the order of consolidation, if made
by a court of competent jurisdiction, is binding upon all the parties to the different actions until it is vacated or set aside. After the
consolidation there can be no further proceedings in the separate actions, which are by virtue of the consolidation discontinued and
superseded by a single action, which should be entitled in such manner as the court may direct, and all subsequent proceedings
therein be conducted and the rights of the parties adjudicated in a single action (1 C.J.S., 113, pp. 1371-1372).

At the very beginning of the discussion on consolidation of actions in the Corpus Juris Secundum, the following caveat appears:

The term consolidation is used in three different senses. First, where several actions are combined into one and lose their separate
identity and become a single action in which a single judgment is rendered; second, where all except one of several actions are stayed
until one is tried, in which case the judgment in the one is conclusive as to the others; third, where several actions are ordered to be
tried together but each retains its separate character and requires the entry of a separate judgment. The failure to distinguish between
these methods of procedure, which are entirely distinct, the two latter, strictly speaking, not being consolidation, a fact which has not
always been noted, has caused some confusion and conflict in the cases. (1 C.J.S., 107, pp. 1341-1342) (Emphasis added).

In defining the term "consolidation of actions," Francisco provided a colatilla that the term "consolidation" is used in three different
senses, citing 1 C.J.S. 1341 and 1 Am. Jur. 477 (Francisco, Revised Rules of Court, p. 348).

From the foregoing, it is clear that the dissent appears to have quoted Francisco’s statement out of context. As it is, the issue of the
effect of consolidation on evidence is at most an unsettled matter that requires the approach we did in the majority’s discussion on
consolidation.167

Third: Misappreciation of the Purpose of Consolidation. The dissent then turns to the purpose of consolidation – to "expeditiously settle
the interwoven issues involved in the consolidated cases" and "the simplification of the proceedings." It argues that this can only be
achieved if the repetition of the same evidence is dispensed with.

It is unfortunate that the dissent refuses to recognize the fact that since consolidation is primarily addressed to the court concerned to
aid it in dispatching its official business, it would be in keeping with the orderly trial procedure if the court should have a say on what
consolidation would actually bring168 (especially where several cases are involved which have become relatively complex). In the
present case, there is nothing in the proceedings below that would suggest that the Sandiganbayan or the parties themselves (the
petitioner and the respondents) had in mind a consolidation beyond joint hearing or trial. Why should this Court – which is not a trial
court – impose a purported effect that has no factual or legal grounds?

Fourth: The Due Process Consideration. The dissent argues that even if the consolidation only resulted in a joint hearing or trial, the
"respondents are still bound by the Bane deposition considering that they were given notice of the deposition-taking." The issue here
boils down to one of due process – the fundamental reason why a hearsay statement (not subjected to the rigor of cross-examination)

25
is generally excluded in the realm of admissible evidence – especially when read in light of the general rule that depositions are not
meant as substitute for the actual testimony, in open court, of a party or witness.

Respondent Enrile had a pending Opposition to the notice of deposition-taking (questioning the reasonableness thereof – an issue
applicable to the rest of the respondents) which the Sandiganbayan failed to rule on. To make the Sandiganbayan’s omission worse,
the Sandiganbayan blindly relied on the petitioner’s assertion that the deposition-taking was a matter of right and, thus, failed to
address the consequences and/or issues that may arise from the apparently innocuous statement of the petitioner (that it intends to use
the Bane deposition in Civil Case No. 0009, where only the respondents, and not Africa, are the parties). 169 There is simply the absence
of "due" in due process.

Fifth: Misstatement of the Sandiganbayan’s Action. The dissent repeatedly misstates that the Sandiganbayan "granted" the request for
the deposition-taking. For emphasis, the Sandiganbayan did not "grant" the request since the petitioner staunchly asserted that the
deposition-taking was a matter of right. No one can deny the complexity of the issues that these consolidated cases have reached.
Considering the consolidation of cases of this nature, the most minimum of fairness demands upon the petitioner to move for the taking
of the Bane deposition and for the Sandiganbayan to make a ruling thereon (including the opposition filed by respondent Enrile which
equally applies to his co-respondents). The burgeoning omission and failures that have prevailed in this case cannot be cured by this
Court without itself being guilty of violating the constitutional guarantee of due process.

Sixth: Issues Posed and Resolved Go Beyond Technicalities. The above conclusions, contrary to the petitioner’s claim, are not only
matters of technicality. Admittedly, rules of procedure involve technicality, to which we have applied the liberality that technical rules
deserve. But the resolution of the issues raised goes beyond pure or mere technicalities as the preceding discussions show. They
involve issues of due process and basic unfairness to the respondents, particularly to respondent Enrile, who is portrayed in the Bane
deposition to be acting in behalf of the Marcoses so that these shares should be deemed to be those of the Marcoses. They involved,
too, principles upon which our rules of procedure are founded and which we cannot disregard without flirting with the violation of
guaranteed substantive rights and without risking the disorder that these rules have sought to avert in the course of their evolution.

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

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

SO ORDERED.

26
People v Sandiganbayan, G.R. No. 149495, August 21, 2003

G.R. No. 149495 August 21, 2003

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
THE HONORABLE SANDIGANBAYAN (FIRST DIVISION) and JOSE JAIME POLICARPIO JR., Respondents.

DECISION

PANGANIBAN, J.:

The consolidation of cases is addressed to the sound discretion of judges. Unless the exercise of such discretion has been gravely
abused, an appellate court will not disturb their findings and conclusions thereon.

The Case

Before us is a Petition for Certiorari1 under Rule 65 of the Rules of Court, seeking to nullify the Order 2 of the First Division of the
Sandiganbayan (SBN) dated June 28, 2001 in Criminal Case No. 26566. The assailed Order denied petitioner’s Motion to Consolidate
the said criminal case for indirect bribery with Criminal Case No. 26558 for plunder, filed against former President Joseph Ejercito
Estrada. The SBN disposed as follows:

"In view hereof, the Court is constrained to deny, as it hereby denies, the motion to consolidate the instant matter with Crim. Case No.
26558, the plunder case in the Third Division. x x x."3

The Antecedents

On April 4, 2001, the Office of the Ombudsman (OMB) filed three separate cases before the SBN: 1) Criminal Case No. 26558 for
plunder4 against former President Estrada and others; 2) Criminal Case No. 26565 for illegal use of alias 5 against Estrada; and 3)
Criminal Case No. 26566 for indirect bribery6 against herein private respondent. The cases were raffled to the Third, the Fifth and the
First Divisions of the SBN, respectively.

Thereafter, petitioner filed separate Motions to consolidate Criminal Case Nos. 26565 and 26566 with Criminal Case No. 26558, which
bears the lowest docket number among the three cases.

The Fifth Division, in a Resolution7 promulgated on May 25, 2001, granted the Motion to consolidate Criminal Case No. 26565 with
Criminal Case No. 26558. However, in an Order8 dated June 28, 2001, the First Division denied the Motion to consolidate Criminal
Case No. 26566 with Criminal Case No. 26558.

Hence, this Petition.9

Issues

Petitioner submits the following issues for the Court’s consideration:

"I

Respondent Court gravely abused its discretion amounting to lack or excess of jurisdiction when it denied petitioner’s Motion to
Consolidate the trials of Criminal Case No. 26566 (indirect bribery case) and Criminal Case No. 26558 (plunder case) despite clear
showing that the consolidation will promote the public interests of economical and speedy trial.

"II

Respondent Court gravely abused its discretion when it denied petitioner’s Motion for Consolidation despite clear showing that
consolidation will preclude conflicting factual findings on identical factual issues between its First and Third Divisions." 10

Respondent, on the other hand, asks for the dismissal of the Petition, because grave abuse of discretion on the part of the SBN had not
been demonstrated, and because petitioner had resorted to forum shopping.

27
Supervening Events

While this case was pending completion -- the period during which the parties were preparing and filing their respective pleadings
before this Court -- the parties brought to our attention certain events that had transpired in the SBN.

Firstly, petitioner and private respondent filed on November 15, 2001, a Joint Motion for Provisional Dismissal 11 of Criminal Case No.
26566, pursuant to Section 8 of Rule 117 of the Revised Rules on Criminal Procedure. This Motion was, however, denied by the First
Division.

Secondly, petitioner filed before the SBN another Urgent Motion for Consolidation 12 dated July 10, 2002, praying anew for the
consolidation of the indirect bribery case with the plunder case pending before the Special Division of the anti-graft court. 13 The purpose
of this Motion was supposedly to allow the testimony of Luis "Chavit" Singson in the latter case to be taken as testimonial evidence for
the former.

Thirdly, Respondent Policarpio filed on August 6, 2002 a Manifestation with Motion, praying that petitioner be found guilty of willful and
deliberate forum-shopping.14

Lastly, the Special Division trying the plunder case had already heard the testimonies of Carmencita Itchon, Emma Lim and Singson --
the same witnesses the prosecution would have presented in the indirect bribery case. 15

The Court’s Ruling

The Petition has no merit; the SBN did not commit grave abuse of discretion in issuing the assailed Order.

Main Issue:

Consolidation of Trial

The consolidation of criminal cases is a matter of judicial discretion, according to Section 22 of Rule 119 of the Rules of Court, which
we quote:

"Sec. 22. Consolidation of trials of related offenses - Charges of offenses founded on the same facts or forming part of a series of
offenses of similar character may be tried jointly at the discretion of the Court."

Similarly, Section 2 of Rule XII of the SBN Revised Internal Rules 16 reads:

"Section 2. Consolidation of Cases. - Cases arising from the same incident or series of incidents, or involving common questions of fact
and law, may be consolidated in the Division to which the case bearing the lowest docket number is raffled.

xxx xxx x x x."

The counterpart rule for civil cases is found in Section 1 of Rule 31 17 of the Rules of Court.

Similarly, jurisprudence has laid down the requisites for the consolidation of cases. As held in Caños v. Peralta, 18 joint trial is permissible
"x x x where the [actions] arise from the same act, event or transaction, involve the same or like issues, and depend largely or
substantially on the same evidence, provided that the court has jurisdiction over the cases to be consolidated and that a joint trial will
not give one party an undue advantage or prejudice the substantial rights of any of the parties. x x x." 19

Querubin v. Palanca20 has ruled that consolidation is proper in the following instances:

"x x x where the offenses charged are similar, related or connected, or are of the same or similar character or class, or involve or arose
out of the same or related or connected acts, occurrences, transactions, series of events, or chain of circumstances, or are based on
acts or transactions constituting parts of a common scheme or plan, or are of the same pattern and committed in the same manner, or
where there is a common element of substantial importance in their commission, or where the same, or much the same, evidence will
be competent and admissible or required in their reproduction of substantially the same testimony will be required on each trial.’
"21 (Italics supplied)

Expediency was the reason for the consolidation of the criminal cases against the accused in Querubin. As there was only one accused
(who himself moved for consolidation) and one offended party, and the 22 separate cases of estafa were committed in substantially the
same way over the same period of time and with the same witnesses, the Court deemed the consolidation to be proper.

28
Sideco v. Paredes22 allowed a consolidated appeal of 16 cases involving a common question of law. Joint trial was deemed necessary
to minimize therein appellant’s expenses in pursuing his appeal.

Other cases were consolidated, as they had sought the same reliefs 23 or involved the same parties and basically the same
issues.24 Another purpose was to avoid the possibility of conflicting decisions. 25 These reasons are in line with the object of
consolidation, which is to "avoid multiplicity of suits, guard against oppression or abuse, prevent delay, clear congested dockets,
simplify the work of the trial court and save unnecessary costs and expense." 26

On the other side of the spectrum were cases in which consolidation was found to be improper. Republic v. Mangrobang27 struck down
the consolidation of an original action for ejectment with an appealed case for eminent domain, because consolidation would have only
delayed the resolution of the cases, which had raised dissimilar issues. Moreover, one or both cases had already been partially heard.

Meanwhile, we ruled in Dacanay v. People28 -- a case in which separate trial was requested -- that the resulting inconvenience and
expense on the part of the government could not be given preference over the right to a speedy trial; or over the protection of a
person’s life, liberty or property. Indeed, the right to a speedy resolution of cases 29 can also be affected by consolidation.

After a careful review of the records of this case, we hold that the SBN did not commit grave abuse of discretion in denying petitioner’s
Motion to Consolidate the indirect bribery and the plunder cases. As correctly ruled by the anti-graft court, their consolidation would
have unduly exposed herein private respondent to totally unrelated testimonies, delayed the resolution of the indirect bribery case,
muddled the issues therein, and exposed him to the inconveniences of a lengthy and complicated legal battle in the plunder case.
Consolidation has also been rendered inadvisable by supervening events -- in particular, the testimonies sought to be introduced in the
joint trial had already been heard in the plunder case.

Verily, no indiscretion has been shown by the court a quo in refusing to consolidate the cases. There is no showing that it evaded or
refused to perform a positive duty enjoined by law. Neither has it been shown that when the SBN denied the Motion to Consolidate, it
exercised its power in a manner that was arbitrary or despotic by reason of passion, prejudice or personal hostility. 30

Forum-Shopping

Additionally, respondent argues that petitioner is guilty of forum-shopping, which is reason enough to dismiss the Petition. We agree.

As required by the Rules,31 the Petition in this case was accompanied by a Verification/Certification against forum-shopping, in which
petitioner made the following representation:

"4. That there is no other case pending in any tribunal, commission or agency or court involving the same case and that should there
come to our knowledge that there is a case involving the same cause and parties pending before any tribunal, commission, agency or
court, we will inform the Honorable Court of the matter within five (5) days from knowledge thereof." 32

Petitioner did not inform this Court that it had filed an Urgent Motion for Consolidation on July 10, 2002, while the instant Petition was
pending. Undeniably, it failed to fulfill the above-quoted undertaking.1âwphi1

Moreover, a scrutiny of the Urgent Motion reveals that petitioner raised the same issues and prayed for the same remedy therein as it
has in the instant Petition -- to consolidate Criminal Case Nos. 26566 and 265558.

Such move clearly constitutes forum-shopping. As held by Candido v. Camacho,33 forum-shopping exists "when a party repetitively
avails himself of several judicial remedies in different venues, simultaneously or successively, all substantially founded on the same
transactions, essential facts and circumstances, all raising substantially the same issues and involving exactly the same parties." 34

A becoming regard for this Court should have prevailed upon petitioner to await the outcome of the instant Petition. Making petitioner
attend to separate trials is an all too familiar plaint of prosecutors. This fact does not, however, justify a disregard of the rule against
forum-shopping or relieve petitioner from the negative consequences of its act. Violation of the forum-shopping prohibition, by itself, is a
ground for summary dismissal35 of the instant Petition.

WHEREFORE, the Petition is hereby DISMISSED.

SO ORDERED.

29
Palanca v. Querubin, Nos. L-29510-31, November 29, 1969, 30 SCRA 738

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-29510-31 November 29, 1969

SIMPLICIO PALANCA, petitioner,

vs.
HON. JOSE R. QUERUBIN, HON. NESTOR ALAMPAY, HON. CESAR KINTANAR, and HON. JOSE FERNANDEZ, presiding
judges of branches II, III, IV and V, respectively of the Court of First Instance of Negros Occidental, and RAYMUNDO RALLOS,
First Assistant City Fiscal of Bacolod City, respondents.

Jose W. Diokno for petitioner.

Raymundo O. Rallos in his own behalf and for other respondents.

SANCHEZ, J.:

Petitioner Simplicio Palanca is indicted before the Court of First Instance of Negros Occidental in 22 separate criminal cases, all
involving estafa thru falsification of public documents.1 These cases were spread by raffle amongst four district judges of the different
branches of the court, viz:

Branch II — Hon. Judge Jose Querubin:

Criminal Cases Nos. 9245, 9330, 9337, 9341.

Branch III — Hon. Judge Nestor Alampay:

Criminal Cases Nos. 9336, 9338, 9340, 9342, 9343, 9346.

Branch IV — Hon. Judge Cesar Kintanar:

Criminal Cases Nos. 9329, 9331, 9335, 9345.

Branch V — Hon. Judge Jose Fernandez:

Criminal Cases Nos. 9244, 9246, 9328, 9332, 9333, 9344.

Petitioner moved to quash in each of the cases. Ground therefor was that the court did not validly acquire jurisdiction over his person
since the warrants of arrest were issued by the court without the judge personally examining the complainant and his witnesses under
oath or affirmation. Petitioner charges infringement of his constitutional right to due process, particularly citing Section 1 (3), Article III of
the Constitution. In an almost simultaneous move, he asked the different judges to consolidate the different cases. Both the motion to
quash and the motion to consolidate were rejected by respondent judges. There were the familiar motions to reconsider and the equally
usual turndowns.

Hence, the present petition for certiorari to nullify the orders of denial of the motion to quash; prohibition to stop the lower court judges
from proceeding with the cases; and mandamus to compel consolidation, and to direct respondent judges to recall the warrants of
arrest and thereafter to personally conduct the examination of complainants and their witnesses to determine the existence of probable
cause. We issued a cease-and-desist order on October 3, 1968 upon a P5,000-bond.

1. One reason exists why petitioner's cause must fall. Prior to petitioner's questioning the court's jurisdiction over his person, he had
already filed a bond for his provisional liberty in all of the criminal cases in question and had already pleaded to all the informations
therein.

We find a statement by respondents in their return before this Court, to which petitioner does not except, and which statement runs as
follows: "The petitioner in the above-entitled case cannot and does not deny that he has appeared before your respondent Judges (both
in person and thru counsel),2 that he has filed bond for his provisional liberty in all of the criminal cases in question, that he has pleaded
to all the informations therein, that he has asked for postponements, and that he has otherwise submitted himself to other court
proceedings and processes."3 That petitioner had pleaded to the informations before he moved to quash is implicit in his motion to
30
quash of June 27, 1968. He there stressed that his motion to quash was filed under Section 10, Rule 117 of the Rules of Court, which
explicitly allows questions of want of jurisdiction to be raised at any stage of the proceedings. 4

The foregoing facts attain meaning in the context of established precepts in jurisprudence. Recognized by case law is the principle that
the posting of a bail bond constitutes waiver of any irregularity attending the arrest of a person, 5 estops him from discussing the validity
of his arrest.6 Recently, this Court found occasion to pronounce that when petitioner filed an application for bail and waived the
preliminary investigation proper," he had waived his objection to whatever defect, if any, in the preliminary examination conducted . . .
prior to the issuance of the warrant of arrest."7 And then, a rule that has by now acquired deep roots is that an entry of a plea waives
the right to preliminary investigation and any irregularity that surrounds it. 8 Anyway, the absence of a preliminary investigation does not
impair the validity of a criminal information, does not otherwise render it defective. Nor does it affect the jurisdiction of the court over the
case.9 Besides, criminal procedure tells us that if a person does not move to quash a complaint or information until after he has pleaded
thereto, he is deemed to have waived all objections then available which are grounds of a motion to quash except when the complaint
or information does not charge an offense or the court is without jurisdiction of the same. 10 So it is that one of the grounds that must be
deemed waived if defendant does not move to quash the complaint or information before pleading thereto is "that the court trying the
cause has no jurisdiction of the person of the defendant." 11

Here, the fact that petitioner posted bail bonds for his provisional liberty and the other fact that he already entered his not guilty plea to
all the 22 informations, bar him from thereafter questioning the validity of his arrest and bringing up the absence of a proper preliminary
investigation. His failure to move to quash before plea is tantamount to the submission of his person to the jurisdiction of the court.
Petitioner's waiver is patent.

2. One other question: Did the judges below abuse their discretion in denying petitioner's motion to consolidate all the 22 criminal cases
in one branch of the trial court?

In arguing for consolidation, petitioner submits that all the 22 informations filed against him show only one offended party, one accused,
one set of witnesses listed by the prosecution, the identical offense of "estafa thru falsification of public documents", the identical
language of the informations, and the commission of the offenses over the same period of time. Petitioner submits that much will be
gained and nothing will be lost by consolidating these 22 cases. He reasons out thus: (1) considering that the alleged offended party
has its offices and lawyers in Manila, that defendant's counsel is also from Manila, and the witnesses are mostly from Iloilo City, the
requirement that the parties and the witnesses be made to repeat the same evidence, objections and arguments in the four branches of
the court is not only wasteful of time, energy and money, but is patently vexatious and harassing which could be avoided if both
prosecution and defense would present their respective witnesses, offer their documentary evidence, make their objections, and submit
their arguments only once and to one judge at a great saving of time, energy, trouble and expense; (2) the 22 cases will engage the
time of only one judge and the three other judges will be free to attend to other cases; (3) the assignment of all these 22 cases to one
judge will not materially increase the judge's case load, for he would be passing on the credibility of the same witnesses, and the
validity of the same objections and arguments.

For his part, respondent fiscal denies that the informations list the same set of witnesses; that the witnesses will be the same for all
cases because after listing the witnesses, the informations specifically state "and others"; and that the testimony of the witnesses will be
the same in each and every one of the aforesaid 22 cases. He says that the 22 cases are distinct from one another, involve different
subject matters, different manners of commission, different dates of commission, different sets of documents, and different testimony of
different witnesses. He submits that consolidation will only cause confusion.

Section 15, Rule 119 of the Rules of Court, provides that "[c]harges for offenses founded on the same facts, or which form or are a part
of a series of offenses of the same or similar character may, in the discretion of the court, be tried jointly."

The question that projects itself, therefore, is whether the discretion granted respondent judges has been here abused.

We are not to lose sight of the object of consolidation — avoid multiplicity of suits, guard against oppression or abuse, prevent delay,
clear congested dockets, simplify the work of the trial court, save unnecessary costs and expense. In brief, consolidation seeks to attain
justice with the least expense and vexation to the litigants.12 Elsewhere, the present tendency is to permit consolidation whenever
possible and irrespective of the diversity of the issues involved.13

There is no question that separate accusations charging a defendant with disconnected but joinable crimes may be tried together on
condition that no substantive rights of defendant are adversely affected. 14 More elaborately, joint trial is proper "where the offenses
charged are similar, related, or connected, or are of the same or similar character or class, or involve or arose out of the same or
related or connected acts, occurrences, transactions, series of events, or chain of circumstances, or are based on acts or transactions
constituting parts of a common scheme or plan, or are of the same pattern and committed in the same manner, or where there is a
common element of substantial importance in their commission, or where the same, or much the same, evidence will be competent and
admissible or required in their prosecution, and if not joined for trial the repetition or reproduction of substantially the same testimony
will be required on each trial."15

31
Appropriately to be emphasized here is the appellate court's supervisory authority over the lower court, notwithstanding the wide
discretion given the latter, whenever the appellate court is satisfied that the trial court has abused its discretion in denying motions to
consolidate.16

In De Luccy vs. Ferrara, 209 N.Y.S. 2d. 676, 678, the lower court's denial of the motion to consolidate was stricken down because it
appeared that no party would be prejudiced and multiplicity of trials would be avoided. Indeed, in a cluster of American cases, the lower
court's refusal to consolidate was overruled by the appellate court. And this, because no substantial rights were shown to be prejudiced,
the same witnesses were to be presented, and the cases involved common issues save in some cases for the question of damages. 17

In Sideco vs. Paredes, 14 Phil. 6, 7, an action for certiorari and mandamus, we found no valid reason for the lower court's refusal of a
consolidated appeal of sixteen cases involving a common question of law. Instead, we held that consolidation was an imperative
necessity to minimize appellant's expense in prosecuting his appeal. Instructive in this respect is Section 2, Rule 1 of the Rules of
Court, which gives the guideline that the "rules shall be liberally construed in order to promote their object and to assist the parties in
obtaining just, speedy, and inexpensive determination of every action and proceeding."

Let us go back to the cases before us. It cannot be denied that in all these cases there is only one offended party, one accused, an
identical offense committed in substantially the same way over the same period of time, such that the criminal informations were
couched in almost identical language. The witnesses listed are the same except that in some informations, Atty. Romeo H. Mediodia
appears as a witness and in others, Atty. Fernando Mirasol. And this, because these two were the two notaries public that
interchangeably notarized the documents.

There is much to petitioner's claim. The reasons he advances deserve assent. To be achieved by consolidation are simplification, not
confusion, of procedure; economy, not waste, of time, energy and expense. And with one judge to hear the case, shuttling from one
judge to three others at the same time or at different times will be obviated. Defendant will be insulated from unjust vexation. It is,
indeed, correct to say that, all things considered, the administration of justice would be better served if only one trial before one judge is
conducted in these 22 cases. We particularly note the absence of justifiable ground back of respondent judges' respective rulings
against consolidation. All they say is that the cases are well distributed to the four branches of the court and that the denial was the
consensus of all the judges. In the circumstances here presented, no potent reason suggests itself why these cases should not be
lumped together in one branch of the trial court.

A policy statement of note is that "[t]he public interests of economy and speed weigh in favor of trying ... closely related charges
together, especially where ... no prejudice to defendant appears." 18 In the case at bar, we fail to discern any prejudice to defendant in
consolidating trial. In fact, it is precisely defendant himself who requests such consolidation. Consolidation is proper.

The conclusion here reached does not cross paths with our decision in Philippine Air Lines, Inc. vs. Teodoro, 97 Phil. 461, 468, an
original action before this Court for certiorari and mandamus. In that case, a motion was filed below to have one case before one
branch of a court transferred to another branch for joint hearing with a second case involving similar issues. After denial of the motion
for consolidation, the first case was partially heard by the court. We held that no ministerial duty existed to compel the transfer. The
factual background of the Philippine Air Lines case is different. One of the cases was there already partially heard before one judge.
Here, hearing has not yet started in any of the 22 cases concerned.

Consolidation of trial is the clear course of action to take. But the judges below refused to act. We, therefore, do not hesitate to say that
respondent judges gravely abused their discretion in denying petitioner's motion for consolidation. And certiorari lies.

FOR THE REASONS GIVEN

(1) The orders of respondent judges denying petitioner's motion to quash the informations in the 22 criminal cases against petitioner
(Criminal Cases 9244, 9245, 9246, 9328, 9329, 9330, 9331, 9332, 9333, 9334, 9335, 9336, 9337, 9338, 9339, 9340, 9341, 9342, 9343,
9344, 9345, and 9346 of the Court of First Instance of Negros Occidental, all entitled "People of the Philippines, Plaintiff, versus
Simplicio Palanca, Accused") and denying the recall of the warrants of arrest issued in said criminal cases, are hereby affirmed;

(2) Respondent judges, or those who may take their place, are directed to grant petitioner's motion to consolidate the said 22 criminal
cases against him and to have these cases assigned to one of them after due raffle; and

(3) The preliminary injunction we heretofore issued is hereby dissolved.

No costs allowed. So ordered.

32
Naguiat v. Intermediate Appellate Court, G.R. No. 73836, August 18, 1988

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 73836 August 18, 1988

ANTOLIN T. NAGUIAT, petitioner,

vs.
HONORABLE INTERMEDIATE APPELLATE COURT, THIRD SPECIAL CASES DIVISION, TIMOG SILANGAN DEVELOPMENT
CORPORATION RATION AND MANUEL P. LAZATIN, respondents.

Ricardo B. Bermudo for petitioner.

Angara, Abello, Concepcion, Regala & Cruz Law Offices for private respondents.

PADILLA, J.:

Petition to review on certiorari the decision * of the Intermediate Appellate Court, dated 9 October 1985, in AC-G.R. SP No. 06521 and
AC-G.R. SP No. 06522, entitled "Manuel P. Lazatin and Timog Silangan Development Corporation versus The Honorable Lourdes K.
Tayao-Jaguros, in her capacity as Presiding Judge, Branch IX Regional Trial Court, Angeles City, and Antolin T. Naguiat," which set
aside the Orders ** of the Regional Trial Court of Angeles City, Branch LX, dated 20 March 1985 and 29 May 1985, issued in Criminal
Case No. 6727 and Civil Case No. 4224.

Timog Silangan Development Corporation (TSDC, for short) is a domestic corporation engaged in the business of developing and
selling subdivision lots in Timog Park," located in Angeles City, with Manuel P. Lazatin (Lazatin, for short) as its President.

On 7 February 1983, petitioner Antolin T. Naguiat purchased, on installment basis, four (4) lots from TSDC, identified as Lots Nos. 13,
14, 15 and 16, of Block 26 of Timog Park. Each lot consists of 300 square meters. The four (4) lots have a total area of 1,200 square
meters, with a price of P60.00 per square meter, as alledged by petitioner. On the same date above-mentioned, 7 February 1983,
petitioner made a down payment of P7,200.00, representing 10% of the alleged total price of P72,000.00 for the four (4) lots. A
corresponding receipt for the downpayment was issued by TSDC to the petitioner. 1

While the Contract to Sell between TSDC and the petitioner stipulated a two-year period within which to pay the total contract price, the
latter made substantial payments in the months of June to August 1983. Then on 10 August 1983, he paid the sum of P 12,529.30 as
his alleged full payment for Lot. No. 16, after which, TSDC caused to be issued in the name of the petitioner the title to said lot. 2

On 7 November 1983, petitioner paid TSDC the amount of P 36,067.97, which was allegedly his full payment for the remaining three (3)
Lots, namely, Lots Nos. 13, 14 and 15. A corresponding receipt for said amount was also issued by TSDC to the petitioner. 3

Thereafter, from December 1983 up to June 1984, petitioner demanded from TSDC the issuance in his favor of the certificates of title
for the three (3) lots, last paid for, but the private respondents (TSDC and Lazatin) refused on the ground that the petitioner had not
fully paid for said three (3) lots.

According to private respondents, sometime in January, 1983, TSDC's Board of Directors approved the petitioner's contemplated
purchase of the aforesaid lots. To confirm the agreement, respondent Lazatin wrote petitioner a letter reiterating standard conditions of
33
the sale, which the petitioner allegedly accepted by affixing his conformity to said letter. The conditions for the sale of the lots were
among others, "(i) 10% down payment with a commitment to commence construction therefrom (thereon) in one month's time; (ii) said
construction to be finished within a period of six (6) months; and, (iii) the effective price was P 70 per square meter with a rebate of P
10.00 per square meter upon completion of the house in six (6) months." 4

But, as alleged by the private respondents, petitioner commenced the construction of a house on one lot but failed to finish it within the
stipulated period of six (6) months. And as to the other lots, petitioner allegedly failed altogether to construct houses on them. 5

Hence, private respondents contend that since petitioner did not comply with the agreement, he was not entitled to the 10% rebate in
price, and as a consequence, the previous payments made by petitioner did not amount to full payment as required for all the lots and
which would have entitled petitioner to the issuance and delivery of the certificates of title to all the lots.

Thereafter, on 26 July 1984, petitioner, filed a complaint for specific performance with damages, with the Regional Trial Court of
Angeles City, Branch LX docketed as Civil Case No. 4224. In his complaint, petitioner prayed, among others, that judgment be
rendered ordering private respondents to deliver to him the transfer certificates of title covering the three (3) lots which he had allegedly
fully paid for, and which private respondents had refused to do so.

Moreover, the complaint prayed that judgment be rendered ordering the private respondents to jointly and severally pay the petitioner,
actual damages equal to P320,000.00, representing unrealized gross profits; moral damages at the discretion of the court; and,
attorney's fees equal to P15,000.00, plus the costs of the action. 6

Before the civil action was filed, petitioner also filed on 5 June 1984 with the City Fiscal of Angeles City a criminal complaint against
herein respondent Manuel Lazatin, for violation of Presidential Decree No. 957, specifically Section 25 thereof, which provides:

PRESIDENTIAL DECREE NO. 957

REGULATING THE SALE OF SUBDIVISIONS LOTS AND CONDOMINIUMS, PROVIDING PENALTIES FOR
VIOLATIONS THEREOF.

SEC. 25. Issuance of Title. — The owner or developer shall deliver the title of the lot or unit to the buyer upon full
payment of the lot or unit. No fee, except those required for the registration of the deed of sale in the Registry of
Deeds shall be collected for the issuance of such title. In the event a mortgage over the lot or unit is outstanding at
the time of the issuance of the title to the buyer, the owner or developer shall redeem the mortgage or the
corresponding portion thereof within six months such issuance in order that the title over any fully paid lot or unit may
be secured and delivered to the buyer in accordance herewith.

xxx xxx xxx

SEC. 39. Penalties. — Any person who shall violate any of the provisions of this Decree and/or any rule or regulation
that may be issued pursuant to this Decree, shall, upon conviction, be punished by a fine of not more than twenty
thousand (P20,000.00) pesos and/or imprisonment of not more than ten years: Provided, that in the case of
corporations, partnership, cooperatives, or associations, the President, Manager or Administrator or the person who
has charge of the administration of the business shall be criminally responsible for any violation of this Decree andlor
the rules and regulations promulgated pursuant thereto. (Emphasis supplied)

On 13 September 1984, an information was filed against respondent Lazatin, docketed as Criminal Case No. 6727, and was raffled to
Branch LX where Civil Case No. 4224 was docketed earlier.

On the basis of Rule 111, Section 3(a) of the Rules on Criminal Procedure, the petitioner filed on 23 February 1985 a motion to
consolidate Civil Case No. 4224 and Criminal Case No. 6727. Despite the objection and opposition of the private respondents, in an
Order dated 20 March 1985, the trial court granted the motion and ordered consolidation of the two (2) cases.

On 14 May 1985, at the pre-trial hearing of both cases, petitioners's counsel appeared as counsel for the plaintiff in Civil Case No.
4224, and as private prosecutor in Criminal Case No. 6727, Private respondents objected, and filed their Motion and Opposition to
Appearance of Plaintiff as Private Prosecutor with respect to the trial of the Criminal Case; the opposition was overruled by the trial
court, in its Order dated 29 May 1985.

Hence, private respondents filed a petition for certiorari and prohibition with the respondent appellate court, seeking the annulment of
the orders of the trial court, dated 20 March 1985 and 29 May 1985. In due course, the respondent appellate court rendered a decision
favorable to herein private respondents, the dispositive part of which is quoted hereunder:

34
 WHEREFORE, the petition for certiorari and probihition is hereby GRANTED, and the questioned orders dated March
20, 1985 and May 29, 1985 are set aside. The respondent Court is ordered to suspend trial of the civil action until
final determination of the criminal case, in line with the spirit of Section 3, Rule 111 (Rules of Court) and not (to) allow
the intervention of the private-respondent in the active prosecution of Criminal Case No. 6727. No costs. 7

The decision of the respondent appellate court was received by petitioner's counsel on 16 October 1985. On 30 October 1985,
petitioner's counsel filed with the respondent appellate court a Motion for Extension of Time to file a motion for reconsideration of
aforesaid decision, praying for fifteen (15) days from 31 October 1985, within which to file said motion.

On 15 November 1985, petitioner's counsel filed a Second Motion for Extension of Time to file a motion for reconsideration, praying for
another fifteen (15) days from 15 November 1985, within which to file said motion for reconsideration.

On 18 November 1985, petitioner's counsel received the resolution of the respondent appellate court dated 12 November
1985, denying the first motion for extension of time, stating among others that the fifteen (15) day period to file a motion for
reconsideration is non-extendible.

On 2 December 1985, petitioner's counsel still filed his motion for reconsideration.

On 16 December 1985, petitioner's counsel received the resolution of the respondent appellate court, dated 12 December
1985, denying petitioner's second motion for extension of time to file a motion for reconsideration, thus reiterating its Resolution of 12
November 1985.

On 21 February 1986, petitioner's counsel received the resolution of the respondent appellate court dated 14 February
1986, denying the motion for reconsideration filed on 2 December 1985.

Hence, this petition for certiorari.

Before going into the merits of the petition, the procedural aspect should first be threshed out and settled.

As admitted by petitioner himself, he filed with the respondent appellate court two (2) motions for extension of time to file motion for
reconsideration of the latter court's decision, with the justification that the two (2) motions were timely and properly presented, since
they were filed before the expiration of the respective periods sought to be extended. 8

The case of Habaluyas Enterprises, Inc. v. Japzon, 9 has ruled that:

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 new trial or reconsideration may be filed with the Metropolitan or Municipal Trial
Courts, the Regional Trial Courts, and the Intermediate Appellate Court.

Based on the aforequoted ruling of the Habaluyas case, motions for extension of time to file a motion for new trial or reconsideration
may no longer be filed before all courts, lower than the Supreme Court. 10 The rule in Habaluyas applies even if the motion is filed
before the expiration of the period sought to be extended, because the fifteen (15) day period for filing a motion for new trial or
reconsideration with said courts, is non-extendible.

But as resolved also in the Habaluyas case, the rule that no motion for extension of time to file a motion for new trial or reconsideration
may be filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court, shall be
strictly enforced "beginning one month after the promulgation of this Resolution." The Court promulgated the Habaluyas resolution on
30 May 1986. Thus, the Habaluyas ruling became effective, and strictly enforced, only beginning 1 July 1986.

In the case at bar, the petitioner filed his motions for extension of time to file a motion for reconsideration on 30 October 1985 and 15
November 1985, both within the periods sought to be extended. Hence the Habaluyas ruling did not yet apply to bar said motions for
extension.

Coming now to the merits of the case, petitioner prays for the reversal of the decision of the respondent appellate court, and the
reinstatement of the orders of the trial court, allowing the consolidation of the civil and criminal case before said trial court, and the
intervention of the petitioners's counsel as private prosecutor in the criminal case.

As a ground for the consolidation of the criminal and civil cases, petitioner invokes Rule 111, Sec. 3 (a), Rules of Court, which provides:

Sec. 3. Other civil actions arising from offenses. Whenever the offended party shall have instituted the civil action to
enforce the civil liability arising from the offense, as contemplated in the first paragraph of Section 1 hereof, the
following rules shall be observed:
35
 (a) "After a criminal action has been commenced, the pending civil action arising from the same offense shad be
suspended, in whatever stage it may be found until final judgment in the criminal proceeding has been rendered.
However, if no final judgment has been rendered by the trial court in the civil action, the same may be consolidated
with the criminal action upon application with the court trying the criminal action. If the application is granted, the
evidence presented and admitted in the civil action shall be deemed automatically reproduced in the criminal action,
without prejudice to the admission of additional evidence that any party may wish to present. (Emphasis supplied)"

xxx xxx xxx

Under the aforequoted provision, the civil action that may be consolidated with a criminal action, is one for the recovery of civil liability
arising from the criminal offense, or ex delicto. In the case at bar, the civil action filed by the petitioner was for specific performance with
damages. The main relief sought in the latter case, i.e., the delivery of the certificates of title to the lots which petitioner had allegedly
fully paid for, was grounded on the Contract to Sell between the petitioner and the private respondent. Hence the civil action filed by the
petitioner was for the enforcement of an obligation arising from a contract, or ex contractu and not one for the recovery of civil liability
arising from an offense; hence, the law invoked by the petitioner is inapplicable.

But, as held in Canos v. Peralta, 11 the consolidation of a criminal action with a civil action arising not ex delicto, may still be done,
based upon the express authority of Section 1, Rule 31 of the Rules of Court, which provides:

Section 1. Consolidation. When actions involving a common question of law or fact are pending before the court, it
may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions
consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs
or delay.

In Canos v. Peralta, where the Court sustained the order of a trial court to consolidate a civil action (an action for the recovery of wage
differential, overtime and termination pay, plus damages) with a criminal action (for violation of the Minimum Wage Law), it was held
that:

A Court may order several actions pending before it to be tried together where they arise from the same act, event or
transaction, involve the same or like issues, and depend largely or substantially on the same evidence, provided that
the court has jurisdiction over the cases to be consolidated and that a joint trial will not give one party an undue
advantage or prejudice the substantial rights of any of the parties. ...

The obvious purpose of the above rule is to avoid multiplicity of suits to guard against oppression and abuse, to
prevent delays, to clear congested dockets, to simplify the work of the trial court; in short the attainment of justice with
the least expense and vexation to the parties litigants. 12

In the cases at bar, the nature of the issues involved, at least, the factual issues in the civil and criminal actions are almost identical,
i.e., whether or not petitioner had fully paid for the lots he purchased from the private respondents, so as to entitle him to the delivery of
the certificates of title to said lots. The evidence in both cases, likewise would virtually be the same, which are, the Contract to Sell, the
letter which contains the conditions for the purchase of the lots and, to which petitioner allegedly affixed his conformity, the official
receipts for the alleged payments made by the petitioner, and other related documents.

Based on the foregoing, and considering that the criminal action filed is one for violation of a special law where, irrespective of the
motives, mere commission of the act prohibited by said special law, constitutes the offense, then the intervention of the petitioner's
counsel, as private prosecutor in the criminal action, will not prejudice the substantial rights of the accused.

The consolidation of the two (2) cases in question, where petitioner's counsel may act as counsel for the plaintiff in the civil case and
private prosecutor in the criminal case, will instead be conducive to the early termination of the two (2) cases, and will redound to the
benefit and convenience of the parties; as well as to the speedy administration of justice.

WHEREFORE, the petition is GRANTED. The decision of the respondent appellate court, dated 9 October 1985, is SET ASIDE. The
Orders of the trial court, in Civil Case No. 4224 and Criminal Case No. 6727, dated 20 March 1985 and 29 May 1985 are
REINSTATED.

Melencio-Herrera, Paras and Sarmiento, JJ., concur.

36
Producers Bank of the Phils. V. Excelsa Industries, Inx., GR No. 173820, 2012

Republic of the Philippines

SUPREME COURT
Baguio

THIRD DIVISION

G.R. No. 173820 April 16, 2012

PRODUCERS BANK OF THE PHILIPPINES, Petitioner,

vs.
EXCELSA INDUSTRIES, INC., Respondent.

DECISION

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner Producers Bank of the Philippines
against respondent Excelsa Industries, Inc. assailing the Court of Appeals (CA) Decision 1 dated April 4, 2006 and Resolution2 dated July
19, 2006 in CA-G.R. SP No. 46514. The assailed decision reversed the Regional Trial Court (RTC) 3 Decision4 dated December 16,
1997 in the consolidated cases docketed as LR Case No. 90-787 and Civil Case No. 1587-A, while the assailed resolution denied
petitioner’s motion for reconsideration for lack of merit.

The present case stemmed from the same set of facts as in G.R. No. 152071 5 entitled "Producers Bank of the Philippines v. Excelsa
Industries, Inc.," which the Court promulgated on May 8, 2009. The relevant facts, as found by the Court in said case, are as follows:

Respondent obtained a loan from petitioner in the form of a bill discounted and secured credit accommodation in the amount of
₱200,000.00, secured by a real estate mortgage over real estate properties registered in its name. 6 The mortgage secured also loans
that might be extended in the future by petitioner in favor of respondent. 7 Respondent thereafter applied for a packing credit line or a
credit export advance with petitioner supported by a letter of credit issued by Kwang Ju Bank, Ltd. of Seoul, Korea, through Bank of the
Philippine Islands. The application was approved.8 When respondent presented for negotiation to petitioner drafts drawn under the letter
of credit and the corresponding export documents in consideration for its drawings in the amount of US$5,739.76 and US$4,585.79,
petitioner purchased the drafts and export documents by paying respondent the peso equivalent of the drawings. 9 The Korean buyer,
however, refused to pay the export documents prompting petitioner to demand from respondent the payment of the peso equivalent of
said export documents together with its due and unpaid loans.10 For failure of respondent to heed the demand, petitioner moved for the
extrajudicial foreclosure of the real estate mortgage.11 At the public auction, petitioner emerged as the highest bidder. 12 The
corresponding certificate of sale was later issued and eventually registered. For failure of respondent to redeem the properties, the titles
were consolidated in favor of petitioner and new certificates of title were issued in its name. 13

On November 17, 1989, respondent instituted an action for the annulment of extrajudicial foreclosure with prayer for preliminary
injunction and damages against petitioner and the Register of Deeds of Marikina. The case was docketed as Civil Case No. 1587-A
which was raffled to Branch 73 of the RTC of Antipolo, Rizal. 14 On April 5, 1990, petitioner filed a petition for the issuance of a writ of
possession, docketed as LR Case No. 90-787 before the same court. The RTC thereafter ordered the consolidation of the two cases,
Civil Case No. 1587-A and LR Case No. 90-787.

On December 18, 1997, the RTC rendered a decision upholding the validity of the extrajudicial foreclosure and ordering the issuance of
a writ of possession in favor of petitioner.15

Aggrieved, respondent availed of two modes of appeal. Respondent appealed Civil Case No. 1587-A via ordinary appeal16 to the CA
which was docketed as CA-G.R. CV No. 59931 and raffled to the First Division. Respondent likewise filed a special civil action
for certiorari under Rule 65 of the Rules of Court as to LR Case No. 90-787 17 also before the CA which was docketed as CA-G.R. SP.
No. 46514 and was raffled to the Tenth Division. In both cases, respondent assailed the December 18, 1997 Decision of the RTC which
is actually a joint decision on the two consolidated cases subject of the separate actions.

On May 30, 2001, the CA (First Division) rendered a decision in CA-G.R. CV No. 59931 reversing and setting aside the RTC decision
thereby declaring the foreclosure of mortgage invalid and annulling the issuance of the writ of possession in favor of
petitioner.18 Petitioner elevated the case to this Court and was docketed as G.R. No. 152071.

37
On April 4, 2006, the CA (Tenth Division) also rendered the assailed decision in CA-G.R. SP No. 46514, the dispositive portion of which
reads:

WHEREFORE, premises considered, the instant petition is hereby GRANTED. ACCORDINGLY, the Decision dated December 18,
1997 of the Regional Trial Court of Antipolo, Rizal, Branch 73, is hereby REVERSED.

SO ORDERED.19

While declaring that the case had become moot and academic in view of the May 30, 2001 decision of the CA (First Division), the CA
(Tenth Division) decided on the merits of the case and resolved two issues, namely: (1) whether or not petitioner was the agent of
respondent; and (2) whether or not the foreclosure of mortgage was valid. 20 The decision substantially echoed the ruling of the CA (First
Division) in CA-G.R. CV No. 59931.

Aggrieved, petitioner comes before the Court with the following arguments:

I.

The Petition for Certiorari should have been immediately dismissed by the Court of Appeals on the ground of FORUM
SHOPPING.

II.

The Petition for Certiorari should have been immediately dismissed as there was a remedy (i.e., Motion for Reconsideration
and Appeal) available to the Respondent.

III.

The respondent’s Petition, purportedly a Petition for Certiorari under Rule 65 of the Rules of Court, did not allege that any
tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction.

IV.

Even if the respondent’s Petition is decided on the issues enumerated by the Court of Appeals in its questioned Decision, the
Petition for Certiorari must be dismissed for utter lack of merit and for not being supported by the evidence on record. 21

The petition is meritorious.

The case stemmed from two separate cases – one for annulment of foreclosure in Civil Case No. 1587-A and another case for
issuance of the writ of possession in LR Case No. 90-787. The cases were consolidated by the RTC and were eventually disposed of in
one judgment embodied in the December 18, 1997 RTC decision. This notwithstanding, respondent treated the cases separately and
availed of two remedies, an appeal in Civil Case No. 1587-A and a petition for certiorari under Rule 65 in LR Case No. 90-787. The
appeal was decided by the CA (First Division) then eventually settled by the Court in G.R. No. 152071 on May 8, 2009. The petition
for certiorari, on the other hand, was later decided by the CA (Tenth Division), which decision is now the subject of this present petition.

Respondent herein committed a procedural blunder when it filed a separate petition for certiorari before the CA, because when the two
cases were consolidated and a joint decision was rendered, the cases lost their identities; and a petition for certiorari is not the proper
remedy to assail a decision granting the issuance of a writ of possession.

Consolidation is a procedural device granted to the court as an aid in deciding how cases in its docket are to be tried so that the
business of the court may be dispatched expeditiously and with economy while providing justice to the parties. 22 It is governed by Rule
31 of the old Rules of Court23 which states:

Section 1. Consolidation. – When actions involving a common question of law or fact are pending before the court, it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay. 24

As aptly observed by the Court in Republic of the Philippines v. Sandiganbayan, et al., 25 Rule 31 is completely silent on the effect/s of
consolidation on the cases consolidated; on the parties and the causes of action involved; and on the evidence presented in the
consolidated cases.26 In the same case, the Court declared that the effect of consolidation would greatly depend on the sense in which
the consolidation is made. Consolidation of cases may take place in any of the following ways:

38
 (1) Where all except one of several actions are stayed until one is tried, in which case the judgment in the one trial is
conclusive as to the others. This is not actually consolidation but is referred to as such. (quasi-consolidation)

(2) Where several actions are combined into one, lose their separate identity, and become a single action in which a single
judgment is rendered. This is illustrated by a situation where several actions are pending between the same parties stating
claims which might have been set out originally in one complaint. (actual consolidation)

(3) Where several actions are ordered to be tried together but each retains its separate character and requires the entry of a
separate judgment. This type of consolidation does not merge the suits into a single action, or cause the parties to one action
to be parties to the other. (consolidation for trial)27

In this case, there was a joint hearing and the RTC eventually rendered a Joint Decision disposing of the cases both as to the validity of
the foreclosure (subject of Civil Case No. 1587-A) and the propriety of the issuance of a writ of possession (subject of LR Case No. 90-
787). This being so, the two cases ceased to be separate and the parties are left with a single remedy to elevate the issues to the
appellate court. This is bolstered by the fact that when the appeal in CA-G.R. CV No. 59931 was disposed of by the CA (First Division)
by reversing the RTC decision, the appellate court not only declared the foreclosure of mortgage invalid but likewise annulled the
issuance of the writ of possession. Again, when the Court finally settled the issues in G.R. No. 152071, it reversed and set aside the CA
decision and reinstated that of the RTC thereby disposing of the said two issues.

Assuming that respondent could still treat the original cases separately and could avail of separate remedies, the petition for certiorari
under Rule 65 was incorrectly availed of to assail the issuance of the writ of possession.

A special civil action for certiorari could be availed of only if a tribunal, board, or officer exercising judicial or quasi-judicial functions has
acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and if
there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law. 28 It has been repeatedly held in a
number of cases29 that the remedy of a party from the trial court’s order granting the issuance of a writ of possession is to file a petition
to set aside the sale and cancel the writ of possession, and the aggrieved party may then appeal from the order denying or granting
said petition.30 When a writ of possession had already been issued as in this case, 31 the proper remedy is an appeal and not a petition
for certiorari.32 To be sure, the trial court’s order granting the writ of possession is final. 33 The soundness of the order granting the writ of
possession is a matter of judgment, with respect to which the remedy of the party aggrieved is ordinary appeal. 34 As respondent availed
of the wrong remedy, the appellate court erred in not dismissing outright the petition for certiorari.

We would like to stress at this point that when respondent received the unfavorable decision of the RTC dated December 18, 1997, it
appealed the decision to the CA assailing the validity of the foreclosure. The CA (First Division) reversed and set aside the RTC
decision, declared the foreclosure invalid, and annulled the issuance of the writ of possession. 35 When it rendered the assailed decision,
the CA (Tenth Division) addressed the issues raised by respondent which were the very same issues raised by it in its appeal. In short,
the assailed decision was a mere reiteration of the findings and conclusions of the CA (First Division). This emphasizes the error
committed by the CA (Tenth Division) in rendering the assailed decision.1âwphi1

On May 8, 2009, in G.R. No. 152071, we reversed and set aside the CA (First Division) decision in CA-G.R. CV No. 59931 and
reinstated that of the RTC. In other words, we settled once and for all the validity of the foreclosure and the propriety of the issuance of
the writ of possession. This should have put to rest the petitioner’s claim over the properties subject of the foreclosure sale if not for
respondent’s erroneous resort to the court. The rights of the parties should, therefore, be governed by the Court’s decision in G.R. No.
152071.

WHEREFORE, premises considered, the petition is hereby GRANTED. The Court of Appeals Decision dated April 4, 2006 and
Resolution dated July 19, 2006 in CA-G.R. SP No. 46514 are SET ASIDE. The parties are bound by the decision of the Court in G.R.
No. 152071 entitled "Producers Bank of the Philippines v. Excelsa Industries, Inc." promulgated on May 8, 2009.

SO ORDERED.

39
Caños v. Peralta, G.R. No. L-38352 August 19, 1982

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-38352 August 19, 1982

ADELA J. CAÑOS, petitioner,

vs.
HON. E.L. PERALTA, as Judge of the Court of First Instance of Davao del Sur and ROLANDO APAS, respondents.

Hermenegildo Cabreras for petitioner.

Martin V. Delgra, Jr. for respondents.

&

ESCOLIN, J.:1äwphï1.ñët

Petition to annul and set aside the order of the respondent Judge E.L. Peralta, presiding judge of the Court of First Instance of Davao
del Sur, ordering the consolidation and joint trial of Criminal Case No. 326 and Civil Case No. 558.

The facts pertinent to this case are as follows: On December 23, 1971, petitioner Adela C. Caños was charged in the Court of First
Instance of Davao del Sur with violation of Section 3[a] of Rep. Act No. 602, as amended, otherwise known as the Minimum Wage Law,
for alleged non-payment of the minimum wage to her employee, respondent Rolando Apas. The case was docketed as Criminal Case
No. 326.

On August 4, 1972, respondent Apas instituted an action against petitioner for collection of differential, overtime and termination pay,
plus damages, docketed as Civil Case No. 558 of the same court. The complaint averred that respondent Apas had been employed by
petitioner as cashier in her gasoline station since August 1965 up until he was illegally dismissed on January 15, 1971; that during his
employment, he was not paid the minimum wage or the overtime pay prescribed by law, neither was he given termination pay after his
dismissal. Respondent, however, did not pray for reinstatement.

After joinder of issues, the provincial fiscal of Davao del Sur and respondent Apas filed a "motion for consolidated trial" of the criminal
and civil cases, alleging in support thereof – 1äwphï1.ñët

That the defendant in. each of the two cases is one and the same person; that the complaining witness in the criminal
case is also the plaintiff in the civil case; that the nature of the issues, at least, the factual issues, in both cases are
almost Identical; and that the evidence in both cases would virtually be the same, so that a conso-lidated trial of both
cases would be conducive to the early termination of the two cases and would greatly enhance the convenience of
the parties and the speedy administration of justice. 1

Acting on the motion, respondent judge issued the challenged order, directing the joint trial of the two cases, in this wise: 1äwphï1.ñët

Since Rolando Apas, complainant, is not insisting on the trial of this case ahead of his civil case against the accused,
for practical purpose, that is, to save time and effort of the parties and the court, the court is of the view that this case
and the civil case be jointly tried. We shall be shooting two birds with a single shot.

Petitioner moved for reconsideration of the order, but the same was denied.

Hence, this petition.

Petitioner contends that after the institution of Criminal Case No. 326, the proceedings in Civil Case No. 558 should be suspended until
final judgment in the criminal action has been rendered. Petitioner relies on Section 3, pars. [a] and [b], Rule III of the Rules of Court,
which we quote: 1äwphï1.ñët

40
 [a] Criminal and civil actions arising from the same offense may be instituted separately, but after the criminal action
has been commenced the civil action can not be instituted until final judgment has been rendered in the criminal
action;

[b] After a criminal action has been commenced, no civil action arising from the same offense can be prosecuted, and
the same shall be suspended, in whatever stage it may be found, until final judgment in the criminal proceedings has
been rendered;

The argument, fails to consider the provisions of Article 31 of the Civil Code. Civil Case No. 558 is a separate and distinct action from
Criminal Case No. 326. The former is based upon a contract of services entered into by the parties, not upon the civil liability arising
from the offense charged in Criminal Case No. 326, i.e., non-payment of the minimum wage, punishable under Section 3 (a) of Rep. Act
602, as amended, in relation to Section 15 (a) of the same Act. 2 Being essentially an action for enforcement of an obligation ex-
contractu the civil case can proceed independently of the latter, in accordance with Article 31 of the Civil Code: 1äwphï1.ñët

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.

But did respondent judge abuse his discretion in ordering the consolidation and joint trial of the criminal and civil cases? A court may
order several actions pending before it to be tried together where they arise from the same act, event or transaction, involve the same
or like issues, and depend largely or substantially on the same evidence, provided that the court has jurisdiction over the cases to be
consolidated and that a joint trial will not give one party an undue advantage or prejudice the substantial rights of any of the
parties. 3 Consolidation of actions is expressly authorized under Section 1, Rule 31 of the Rules of Court: 1äwphï1.ñët

Section 1. Consolidation. — When actions involving a common question of law or fact are pending before the court, it
may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions
consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs
or delay.

The obvious purpose of the above rule is to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to
clear congested dockets, to simplify the work of the trial court; in short the attainment of justice with the least expense and vexation to
the parties litigants. 4

Consolidation of actions is addressed to the sound discretion of the court, and its action in consolidating will not be disturbed in the
absence of manifest abuse of discretion. In the instant case, respondent judge did not abuse his discretion in ordering the joint trial of
the two cases. There is no showing that such joint trial would prejudice any substantial right of petitioner. Neither does the latter
question the court's jurisdiction to try and decide the two cases.

WHEREFORE, the petition is hereby dismissed with costs against petitioner. The lower court is directed to proceed with the joint trial of
the two cases without unnecessary delay.

SO ORDERED.

41
RULE 33: DEMURRER TO EVIDENCE

Felipe v MGM Motor Trading, GR No 191849, Sep. 23, 2015

September 23, 2015

G.R. No. 191849

FREDERICK F. FELIPE, Petitioners,

vs.
MGM MOTOR TRADING CORPORATION, doing business under the name and style NISSAN GALLERY-ORTIGAS, and AYALA
GENERAL INSURANCE CORPORATION, Respondents.

RESOLUTION

PEREZ, J.:

This Petition for Review on Certiorari assails the 14 January 2010 Decision1 of the Court of Appeals and its 16 March 2010
Resolution2 in CAG. R. CV No. 89665 affirming the 22 February 2005 Order 3 of the Regional Trial Court (RTC) of Quezon City, Branch
80 which dismissed the case for· specific performance and damages on demurrer to evidence.

In his Complaint for Specific Performance and Damages against respondents MGM Motors, Inc. (MGM Motors) and Ayala General
Insurance Corporation (Ayala Insurance), petitioner Frederick Felipe claimed. that he purchased on installment basis a Nissan Terrano
Wagon through MGM Motors' authorized representative Jane Sarmiento (Sarmiento). Petitioner allegedly gave a P200,000.00
downpayment and P5,000.00 reservation fee to Sarmiento. He further issued seven (7) Allied Bank checks, each bearing the amount of
P24,165.00 payable to MGM Motors. On 14 May 1997, MGM Motors delivered the subject vehicle to petitioner. He then insured the
vehicle with Ayala Insurance under Policy No. PC970000440001-00-000 and paid a premium of P40,220.67. On 15 November 1997,
the subject vehicle, while parked along Adriatico Street in Manila, was reportedly lost. He tried to claim from Ayala Insurance but the
latter refused to pay its liability causing damages to petitioner. On the other hand, MGM Motors refused to produce, despite repeated
demands, the document of sale by installment covering the vehicle. Petitioner allegedly paid additional P200,000.00 on 7 May 1998 as
partial payment for the vehicle. The refusal of MGM Motors to produce the document and its renouncement of the existence of the
installment sale; and the subsequent unlawful insistence on a cash transaction agreement, had caused damages to petitioner. 4

In its Answer, MGM Motors denied receiving the down payment of P200,000.00 and P5,000.00 reservation fee paid through Sarmiento.
The following is its version of the controversy:

MGM Motors offered Petitioner a discount of P220,000.00 if the latter would pay in cash. MGM Motors averred that the vehicle was
delivered to petitioner on 14 May 1997 but the latter failed to pay in cash, thus MGM Motors did not give the registration papers to
petitioner. MGM Motors sent two letters to petitioner demanding the payment for the said vehicle but the latter refused or failed to pay.
MGM Motors stated that petitioner was able. to fraudulently register the vehicle with the Land Transportation Office in his name and
insure the same with Ayala Insurance. During a negotiation, the parties agreed that petitioner's obligation amounted to Pl,020,000.00.
In an effort to settle petitioner's obligation, his mother Purificacion issued a postdated check for Pl,020,000.00 as full payment for the
subject vehicle but, upon maturity, the check bounced. Consequently, MGM Motors filed a case for violation of Batas Pambansa Bilang
22 (BP 22) against petitioner's mother. In order to settle the civil aspect of the BP 22 case, petitioner paid P200,00.00 to MGM Motors.
MGM Motors counterclaimed for damages.5

Ayala Insurance, for its part, contended that petitioner had no valid cause of action against it. Ayala Insurance. asserted that petitioner
had no insurable interest because he is not the owner of the vehicle that he had insured with it. Ayala Insurance also counterclaimed for
damages.6

Trial proceeded with petitioner and his father Alberto Felipe (Alberto) testifying on the behalf of the former. Petitioner's testimony was
however stricken off the record because he failed to return, despite numerous opportunities, to the witness stand for cross-examination.
Only two pieces of evidence were admitted by the trial court: (1) the Official Receipt dated 7 May 1998 issued by MGM Motors wherein
it acknowledged receipt of P200,000.00 from petitioner; and (2) the testimony of his father Alberto that he was present when petitioner
paid P200,000.00 to MGM Motors.

MGM Motors and Ayala Insurance filed their respective Motions to Dismiss on demurrer to evidence.

On 22 February 2005, the RTC dismissed the case. The trial court reasoned that the evidence admitted by the trial court do not prove
the material allegations of petitioner's complaint, as well as the alleged liability of Ayala Insurance.

Petitioner filed a motion for reconsideration from said Order but it was denied by the trial court on 23 May 2005. 7

42
Meanwhile, the trial, with respect to MGM Motor's counterclaim, subsisted.

On 6 June 2007, the trial court awarded P25,000.00 in attorney's fees to MGM Motors. 8

Petitioner elevated the matter to the Court of Appeals. On 14 January 2010, the appellate court gave weight to the factual findings of
the trial court and found no reason to reverse its ruling.9 Petitioner filed a motion for reconsideration but it was likewise denied by the
Court of Appeals.

In the instant petition for review on certiorari, petitioner raises a lone argument, to wit:

THE COURT OF APPEALS HAS DISPOSED OF PETITIONER'S (PLAINTIFF-APPELLANT THEREIN) APPEAL IN A WAY NOT IN
ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS HONORABLE TRIBUNAL, THUS COMMITTING ERRORS
THAT WARRANT REVERSAL BY THIS HONORABLE TRIBUNAL THIS HAPPENED WHEN:

THE COURT OF APPEALS AFFIRMED THE RULING OF THE TRIAL COURT THAT FAILED/REFUSED TO GRANT PETITIONER
THE RELIEFS PRAYED FOR IN THE COMPLAINT DESPITE THE FACT THAT WITH THE EVIDENCE THAT HE ADDUCED HE HAS
CLEARLY, CONVINCINGLY AND PREPONDERANTLY PROVEN HIS CAUSES OF ACTION AGAINST THE RESPONDENTS
(DEFENDANTS). THIS IS TRUE EVEN IF A CONSIDERABLE PORTION OF HIS EVIDENCE WAS DENIED ADMISSION BY THE
TRIAL COURT.10

Petitioner insists that the two pieces of evidence admitted by the trial court are sufficient to substantiate the material allegations of the
complaint. Petitioner stresses that Alberto's testimony established that the purchase of the subject vehicle was on installment basis
from MGM Motors; that Petitioner paid additional 1!200,000.00; and that MGM Motors failed and refused to deliver the promised
documents. of sale on installment despite payments having been made. The fact of sale on installment, according to petitioner, was
further proved by the receipt issued by MGM Motors. Petitioner highlights the fact that the vehicle was actually delivered to him,
thus .ownership was transferred to him upon delivery thereof. Proceeding from the same line of argument, petitioner states that with
respect to Ayala Insurance, he is already the owner of the subject vehicle when the insurance on it was taken and when the subject
vehicle was lost. Assuming arguendo that title to the subject vehicle remained with MGM Motors, petitioner addsthat his insurable
interest on the vehicle consisted of the substantial amount that he had paid on the purchase price of the vehicle.

MGM Motors cites the Municipal Trial Court's (MTC) finding in the criminal complaint for BP 22 against petitioner's mother that the
agreement for the purchase of the subject vehicle was on cash basis and not installment MGM Motors echoes the trial court's ruling
that petitioner failed to substantiate the material allegations in his complaint.

On its part, Ayala Insurance puts up the argument that the only evidence submitted by petitioner against it was the receipt of the
P200,000.00 that he paid to MGM Motors.1âwphi1 The evidence does not constitute proof of the insurable interest. Moreover, Ayala
Insurance asserts that petitioner also failed to establish the following proof: (1) premium payment; (2) that the insurable interest existed
at the time of the loss; (3) deed of sale; (4) proximate cause of the loss is one of the perils insured against; (5) existence of the original
insurance policy. Ayala Insurance maintains that Petitioner failed to establish his case by preponderance of evidence.

The basic issue is whether the trial court correctly granted the demurrer to evidence and subsequently dismissed the complaint.

We agree:

A demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence and is presented after the plaintiff rests his
case. It is an objection by one of the parties in an action, to the effect that the evidence which his adversary produced is insufficient in
point of law, whether true or not, to make out a case or sustain the issue. 11

Rule 33, Section 1 of the 1997 Rules of Civil Procedure provides:

Section 1. Demurrer to evidence.-After the plaintiff has completed the presentation of his evidence, the defendant may move for
dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have
the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have
waived the right to present evidence.

The essential question to be resolved in a demurrer to evidence is whether the plaintiff has been able to show that he is entitled to his
claim, and it is incumbent upon the trial court judge to make such a determination. 12

A review of the dismissal of the complaint naturally entails a Calibration of the evidence to determine whether the material allegations of
the complaint were sufficiently backed by evidence. We have repeatedly stressed that the remedy of appeal by certiorari under Rule 45
of the Rules of Court contemplates only questions of law, not of fact.

43
A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts. There is a question of fact
when doubt arises as to the truth or falsity of the statement of facts. The resolution of a question of fact necessarily involves a
calibration of the evidence, the credibility of the witnesses, the existence and the relevance of surrounding circumstances, and the
probability of specific situations. It is for this reason that this Court defers to the factual findings of a trial judge, who has had the distinct
advantage of directly observing the witnesses on the stand and determining from their demeanor whether they· were speaking or
distorting the truth.13

The questions on whether the sale was on cash or installment basis and whether petitioner had insurable interest on the subject car are
evidently questions of fact which are beyond the purview of the instant petition.

In any event, a perusal of the records show that the trial court correctly dismissed petitioner's complaint on demurrer to evidence.

Well-established is the rule that the burden of proof lies on the party who makes the allegations. 14 There is no dispute that the only
pieces of evidence admitted in court are the testimony of Alberto and the receipt showing MGM Motors receiving P200,000.00 from
petitioner as partial payment of the subject car. The allegation that the purchase of the vehicle was on an installment basis was not
supported by any evidence. The receipt of a partial payment does not suffice to prove that the purchase was made on an installment
basis. Petitioner did not present any document to prove said allegation while MGM Motors produced a sales invoice wherein it was
stated that the mode of payment is "COD" or cash on delivery.

In the same vein, petitioner failed to substantiate his allegation against Ayala Insurance. Petitioner has the burden of proof to show that
a loss occurred and said loss was covered by his insurance policy. Considering that the trial court only admitted two pieces of evidence
in petitioner's favor and none of those tend to prove loss of the subject car and coverage thereof under the insurance policy, petitioner
is not entitled to the reliefs he had prayed for.

BASED ON THE FOREGOING, the Petition is DENIED. The 14 January 2010 Decision of the Court of Appeals and its 16 March 2010
Resolution in CA-G.R. CV No. 89665are AFFIRMED.

SO ORDERED.

44
Republic vs Tuvera G.R No 148246, February 16, 2007

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 148246 February 16, 2007

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
JUAN C. TUVERA, VICTOR P. TUVERA and TWIN PEAKS DEVELOPMENT CORPORATION, Respondents.

DECISION

TINGA, J.:

The long-term campaign for the recovery of ill-gotten wealth of former President Ferdinand E. Marcos, his wife Imelda, and their
associates, has been met with many impediments, some of which are featured in this case, that have led to doubts whether there is still
promise in that enterprise. Yet even as the prosecution of those cases have drudged on and on, the era of their final reckoning is just
beginning before this Court. The heavy hammer of the law is just starting to fall.

The instant action originated from a civil complaint for restitution and damages filed by the Republic of the Philippines against Marcos
and his longtime aide Juan Tuvera, as well as Tuvera's son Victor and a corporation the younger Tuvera had controlled. Trial on the
case against the Tuveras proceeded separately before the Sandiganbayan. After the Republic had presented its evidence, the Tuveras
successfully moved for the dismissal of the case on demurrer to evidence. The demurrer was sustained, and it falls upon this Court to
ascertain the absence or existence of sufficient proof to support the relief sought by the Republic against the Tuveras.
I.

We begin with the facts.

Twin Peaks Development Corporation (Twin Peaks) was organized on 5 March 1984 as a corporation with a principal purpose of
engaging in the real estate business. There were five incorporating stockholders, including respondent Victor Tuvera (Victor) 1 who
owned 48% of the shares of the fledgling corporation. Victor was the son of respondent Juan Tuvera, who was then Presidential
Executive Assistant of President Marcos.

Acting on a letter dated 31 May 1984 of Twin Peaks’ Vice-President and Treasurer Evelyn Fontanilla in behalf of the corporation,
President Marcos granted the award of a Timber License Agreement (TLA), more specifically TLA No. 356, in favor of Twin Peaks to
operate on 26,000 hectares of forest land with an annual allowable cut of 60,000 cubic meters of timber and to export 10,000 cubic
meters of mahogany of the narra species.2 As a result, Twin Peaks was able to engage in logging operations.

On 25 February 1986, President Marcos was ousted, and Corazon C. Aquino assumed the presidency. Among her first acts as
President was to establish the Philippine Commission on Good Government (PCGG), tasked with tracking down the ill-gotten wealth
procured by Marcos, his family, and associates during his 20-year rule. Among the powers granted to the PCGG was the power to
issue writs of sequestration.3 On 13 June 1988, the PCGG issued a Writ of Sequestration on all assets, properties, records, documents,
and shares of stock of Twin Peaks on the ground that all the assets of the corporation are ill-gotten wealth for having been acquired
directly or indirectly through fraudulent and illegal means.4 This was followed

two days later by Mission Order No. MER-88 (Mission Order), also issued by the PCGG, implementing the aforementioned Writ of
Sequestration.5

On 9 December 1988, the PCGG, in behalf of the Republic, filed the Complaint now subject of this Petition. 6 Impleaded as defendants
in the Complaint7 were Juan and Victor Tuvera, as well as the then-exiled President Marcos. Through the Complaint, the Republic
sought to recover funds allegedly acquired by said parties in flagrant breach of trust and fiduciary obligations with grave abuse of right
and power in violation of the Constitution and the laws of the Republic of the Philippines. 8

In particular, the Complaint alleged that Juan Tuvera, as Presidential Executive Assistant of President Marcos, took advantage of his
relationship to influence upon and connection with the President by engaging in a scheme to unjustly enrich himself at the expense of
the Republic and of the Filipino people. This was allegedly accomplished on his part by securing TLA No. 356 on behalf of Twin Peaks
despite existing laws expressly prohibiting the exportation of mahogany of the narra species 9 and Twin Peaks’ lack of qualification to be
a grantee thereof for lack of sufficient logging equipment to engage in the logging business. 10 The Complaint further alleged that Twin

45
Peaks exploited the country’s natural resources by engaging in large-scale logging and the export of its produce through its Chinese
operators whereby respondents obtained a revenue of approximately ₱45 million.

The Complaint prayed that (1) TLA No. 356 be reverted to the State or cancelled; (2) respondents be jointly and severally ordered to
pay ₱48 million11 as actual damages; and (3) respondents pay moral, temperate and exemplary damages, litigation expenses, and
treble judicial costs.12 It cited as grounds for relief, gross abuse of official position and authority, breach of public trust and fiduciary
obligations, brazen abuse of right and power, unjust enrichment, and violation of the Constitution. 13

In their Answer,14 respondents Victor Tuvera and Twin Peaks claimed that Twin Peaks was awarded TLA No. 356 only after its articles
of incorporation had been amended enabling it to engage in logging operations, 15 that the Republic’s reference to Chinese operations
and revenue of approximately ₱45 million were merely

imagined,16 and that the PCGG has no statutory authority to institute the action. 17 By way of counterclaim, respondents asked that the
Republic be ordered to pay Victor Tuvera moral damages and to pay both Victor Tuvera and Twin Peaks exemplary damages, and to
reimburse their attorney’s fees.18

Anent the allegation that Twin Peaks sold about ₱3 million worth of lumber despite the Writ of Sequestration issued by the PCGG,
respondents stressed that the Director of Forest Development acted within the scope of his authority and the courts have no
supervising power over the actions of the Director of Forest Development and the Secretary of the Department of Environment and
Natural Resources (DENR) in the performance of their official duties. 19

As an affirmative and special defense, respondents Victor Tuvera and Twin Peaks alleged that after Twin Peaks was granted TLA No.
356 in 24 August 1984, Felipe Ysmael, Jr. and Co., Inc. had filed a motion for the cancellation of the same with the DENR

Secretary. When respondents submitted their Answer, the denial by the DENR of the Ysmael motion was under review before the
Court.20

Juan Tuvera, who was abroad when the case was filed on 9 December 1988, later submitted his own Answer on 6 December
1989.21 He also denied the allegations of the Republic and alleged that as Presidential Executive Assistant of then President Marcos,
he acted within the confines of his duties and had perpetrated no unlawful acts. He merely transmitted communications of approval in
the course of his duties and had nothing to do with the decisions of then President Marcos. 22 He denied having anything to do with Twin
Peaks.

Juan Tuvera filed a compulsory counterclaim on the ground that the instant action had besmirched his reputation and caused serious
anxiety and mental anguish thus entitling him to moral and exemplary damages and litigation expenses. 23

On 3 May 1989, respondents filed an Omnibus Motion to Nullify Writ of Sequestration and/or the Mission Order. 24 The Sandiganbayan
issued a Temporary Restraining Order against the PCGG requiring it to cease, refrain and desist from further implementing the Writ of
Sequestration and the Mission Order.25 Subsequently, on motion of respondents, the Sandiganbayan granted a Writ of Preliminary
Injunction covering the Mission Order. The Sandiganbayan deferred its resolution on the Motion to Lift the Writ of Sequestration. 26

From 1988 to 1993, the proceedings before the Sandiganbayan were delayed owing to the difficulty of acquiring jurisdiction over the
person of President Marcos, who was by then already in exile. Thus, upon motion by respondents, the Sandiganbayan granted them a
separate pre-trial/trial from President Marcos.27

Respondents submitted their documentary evidence in the Pre-Trial Conference while the Republic reserved to present the same
during trial. After the pre-trial conference, the Sandiganbayan issued a Pre-Trial Order 28 dated 3 November 1993, which presented the
issues for litigation as follows:

Whether or not defendant Juan C. Tuvera who was a Presidential Executive Assistant at the time material to this case, by himself and
in concert with his co-defendants Ferdinand E. Marcos and Victor Tuvera, took advantage of his relation and connection with the late
Marcos, secure (sic) a timber concession for Twin Peaks Development Corporation and, engage (sic) in a scheme to unjustly enrich
himself at the expense of the Republic and the Filipino People. 29

The Pre-Trial Order also indicated that the Republic admitted the exhibits by respondents, subject to the presentation of certified true
copies thereof. Respondents’ exhibits were as follows:30

Exhibit Nos. Description

1 Amended Articles of Incorporation dated 31 July 1984
2 TLA No. 356
3 Order, Minister Ernesto M. Maceda, 22 July 1986

46
 3-A Order, Minister Ernesto M. Maceda, 10 October 1986
3-B Order, Minister Ernesto M. Maceda, 26 November 1986, O.P. Case No. 3521
3-C Resolution, Office of the President, 6 July 1987, O.P. Case No. 3521
3-D Order, Office of the President, 14 August 1987, I.S. No. 66
3-E Complaint, PCGG, dated 20 July 1988
3-E-1, 3-E-2, I.S. No. 66 Affidavit, PCGG, Almario F. Mendoza, Ltv. Ramon F. Mendoza and Affidavit, Isidro
3-E-3 Santiago
3-F Counter-Affidavit, Juan C. Tuvera, 17 August 1989
3-F-1 PCGG, Motion to Withdraw, Jose Restituto F. Mendoza, 10 May 1989
3-F-2 Decision, Supreme Court, 18 October 1990
3-G Resolution, Supreme Court, 5 June 1991
4 Complaint, DENR, Almario F, Mendoza, 9 March 1990
4-A Answer/Comment, DENR, Almario F. Mendoza, dated 20 April 1990
4-B Decision, DENR, dated 28 August 1990
5 Complaint, Ombudsman, etc., Case No. 0-90-0708, 9 March 1990
6, 6-A Answer/Counter-Affidavit, etc.
6-B Decision, Ombudsman Case No. 0-90-0708, dated 8 August 1990

The Republic presented three (3) witnesses during the trial. The first witness was Joveniana M. Galicia, Chief of the National Forest
Management Division of the Forest Management Bureau. She identified TLA No. 356 of Twin Peaks dated 20 August 1984 and a
Memorandum dated 18 July 1984. She testified that TLA No. 356 covers 26,000 hectares of forest land located in the Municipality of
Isabela, Province of Quirino.31 The Memorandum dated 18 July 1984 addressed to Director Edmundo Cortez recited then President
Marcos’ grant of the timber concession to Twin Peaks. Identified and marked in the same memorandum were the name and signature
of Juan Tuvera.32 Upon cross-examination, Galicia stated that she was not yet the chief of the Division when the documents she
identified were submitted to the Bureau. She further stated it was her first time to see the aforementioned documents when she was
asked to bring the same before the trial court.33

The next witness was Fortunato S. Arcangel, Regional Technical Director III of the DENR. He testified that he is a Technical Director
under the Forest Management Services of the DENR.34 He identified Forestry Administration Order (FAO) No. 11 dated 1 September
1970. He said he was aware of TLA No. 356 of Twin Peaks35 because at the time it was issued, he was the chief of the Forestry
Second Division and his duties included the evaluation and processing of applications for licenses and permits for the disposition and
distribution of timber and other forest products.36 Consequently,

he was aware of the process by which TLA No. 356 was issued to Twin Peaks. 37 According to him, they processed the application
insofar as they evaluated the location of the area concerned and its present vegetative state, examined the records, and determined
the annual allowable land. After the examination, the license agreement was prepared and submitted for approval. 38 He continued that
under FAO No. 11, a public bidding is required before any license agreement or permit for the utilization of timber within the forestry
land is issued39 but no public bidding was conducted for TLA No. 356.40 He explained that no such bidding was conducted because of a
Presidential Instruction not to accept any application for timber licensing as a consequence of which bidding procedures were
stopped.41 Upon cross-examination, Arcangel said that at the time TLA No. 356 was issued, the Revised Forestry Code of the
Philippines42 was already in effect but there were still provisions in FAO No. 11 that remained applicable such as the terms and
conditions of granting a license. He also stated that the issuance of the license to Twin Peaks emanated from the President of the
Philippines.43

The Republic’s third and last witness was Teresita M. Zuñiga, employee of the Bureau of Internal Revenue. She identified the 1986
Income Tax Returns of Victor P. Tuvera, Evelyn Fontanilla and Feliciano O. Salvana, stockholders of Twin Peaks. 44

On 24 June 1994, the Republic rested its case after its formal offer of evidence, as follows: 45

Exhibits Documents Purpose

A Timber License Agreement No. 356 of To prove that the Timber License Agreement was executed
Twin Peaks Realty Development prior to the amendment of the Articles of Incorporation of Twin
Corp. dated 20 August 1984 Peaks Realty Development Corp.
B Memorandum dated 18 July 1984 of To prove the participation of Juan C. Tuvera in the grant of the
Juan C. Tuvera, Presidential timber concession of Twin Peaks Realty Development Corp.
Executive Secretary

47
 C Forestry Administrative Order No. 11
(Revised)
D Income Tax Return of Victor Tuvera
E Income Tax Return of Evelyn
Fontanilla
F Income Tax Return of Feliciano
Salvana
G Articles of Incorporation of Twin
Peaks Realty Development Corp.
(original)
H Timber Manifestation Report of [Twin
Peaks Realty Development Corp.]
consigned to Scala Sawmill46
I Timber Manifestation Report of Twin
Peaks consigned to La Peña
Sawmill47
To prove that Twin Peaks Realty Development Corp. was
granted a timber license agreement without following the
procedure outlined in the forestry rules and regulation and in
violation of law.
To prove that Victor Tuvera was not a legitimate stockholder
of Twin Peaks Realty Development Corp.
To prove that Evelyn Fontanilla was not a legitimate
stockholder of Twin Peaks Realty Development Corp.
To prove that Feliciano Salvana was not a legitimate
stockholder of Twin Peaks Realty Development Corp.
To prove that Twin Peaks Realty Development Corp. was
organized to engage in the real estate business and not in the
logging industry.
To show that Twin Peaks Realty Development Corp. lacks
equipment to process logs.
To show that Twin Peaks Realty Development Corp. lacks
equipment to process logs.

Respondents subsequently submitted certified true copies of the exhibits they had presented during the pre-trial conference. 48

With leave of court, respondents filed a Demurrer to Evidence. Respondents argued that the Republic failed to present sufficient legal
affirmative evidence to prove its claim. In particular, respondents’ demurrer contends that the memorandum (Exh. B) and TLA No. 356
are not "legal evidence" because "legal evidence" is not meant to raise a mere suspicion or doubt. Respondents also claim that income
tax returns are not sufficient to show one’s holding in a corporation. Respondents also cited the factual antecedents culminating with
the Court’s decision in Felipe Ysmael, Jr. & Corp., Inc. v. Sec. of Environment and Natural Resources. 49

The Republic filed a Manifestation, contending that the demurrer is not based on the insufficiency of its evidence but on the strength of
the evidence of respondents as shown by their own exhibits. The Republic claimed that the Revised Forestry Code of the Philippines
does not dispense with the requirement of public bidding. The Republic added that Sec. 5 of said law clearly provides that all
applications for a timber license agreement must be filed before the Bureau of Forest Development and that respondents still have to
prove compliance with the requirements for service contracts.50

Respondents opposed the Manifestation, maintaining that since the Republic admitted the exhibits of respondents during the pre-trial, it
is bound by its own admission. Further, these same exhibits contain uncontroverted facts and laws that only magnify the conclusion that
the Republic has no right to relief.51

In its Resolution dated 23 May 2001,52 the Sandiganbayan sustained the demurrer to evidence and referred to the decision of this Court
in Ysmael in holding that res judicata applies. The Anti-Graft Court also did not give credence to the Republic’s allegations concerning
respondents’ abuse of power and/or public trust and consequent liability for damages in view of its failure to establish any violation of
Arts. 19, 20 and 21 of the Civil Code.

In essence, the Sandiganbayan held that the validity of TLA No. 356 was already fully adjudicated in a Resolution/Order issued by the
Office of the President on 14 August 1987, which had become final and executory with the failure of the aggrieved party to seek a
review thereof. The Sandiganbayan continued that the above pronouncement is supported by this Court in Ysmael. Consequently, the
Sandiganbayan concluded, the Republic is barred from questioning the validity of TLA No. 356 in consonance with the principle of res
judicata.

The Republic now questions the correctness of the Sandiganbayan’s decision to grant the demurrer to evidence because it was not
based solely on the insufficiency of its evidence but also on the evidence of respondent mentioned during the pre-trial conference. The
Republic also challenges the applicability of res judicata.
II.

Preliminarily, we observe that respondents had filed before the Sandiganbayan a pleading captioned Motion to Dismiss or Demurrer to
Evidence, thus evincing that they were seeking the alternative reliefs of either a motion to dismiss or a demurrer to evidence. However,
the Sandiganbayan, in resolving this motion, referred to it as Motion to Dismiss on Demurrer to Evidence, a pleading of markedly
different character from a Motion to Dismiss or Demurrer to Evidence. Still, a close reading of the Sandiganbayan Resolution reveals
clearly that the Sandiganbayan was treating the motion as a demurrer, following Rule 33, Section 1 of the Rules of Court, rather than a
motion to dismiss under Rule 16, Section 1.

48
This notwithstanding, the Sandiganbayan justified the grant of demurrer with res judicata as rationale. Res judicata is an inappropriate
ground for sustaining a demurrer to evidence, even as it stands as a proper ground for a motion to dismiss. A demurrer may be granted
if, after the presentation of plaintiff’s evidence, it appears upon the facts and the law that the plaintiff has shown no right to relief. In
contrast, the grounds for res judicata present themselves even before the presentation of evidence, and it should be at that stage that
the defense of res judicata should be invoked as a ground for dismissal. Properly speaking, the movants for demurral who wish to rely
on a controlling value of a settled case as a ground for demurrer should invoke the ground of stare decisis in lieu of res judicata.

In Domondon v. Lopez,53 we distinguished a motion to dismiss for failure of the complainant to state a cause of action from a motion to
dismiss based on lack of cause of action. The first is governed by Rule 16, Section 1(g), 54 while the second by Rule 3355 of the Rules of
Court, to wit:

x x x The first [situation where the complaint does not alleged cause of action] is raised in a motion to dismiss under Rule 16 before a
responsive pleading is filed and can be determined only from the allegations in the initiatory pleading and not from evidentiary or other
matter aliunde. The second [situation where the evidence does not sustain the cause of

action alleged] is raised in a demurrer to evidence under Rule 33 after the plaintiff has rested his case and can be resolved only on the
basis of the evidence he has presented in support of his claim. The first does not concern itself with the truth and falsity of the
allegations while the second arises precisely because the judge has determined the truth and falsity of the allegations and has found
the evidence wanting.

Hence, a motion to dismiss based on lack of cause of action is filed by the defendant after the plaintiff has presented his evidence on
the ground that the latter has shown no right to the relief sought. While a motion to dismiss under Rule 16 is based on preliminary
objections which can be ventilated before the beginning of the trial, a motion to dismiss under Rule 33 is in the nature of a demurrer to
evidence on the ground of insufficiency of evidence and is presented only after the plaintiff has rested his case. 56 [Emphasis supplied]
III.

We shall first discuss the question of whether or not a demurrer to evidence may be granted based on the evidence presented by the
opposing parties.

An examination of the Sandiganbayan’s Resolution shows that dismissal of the case on demurrer to evidence was principally anchored
on the Republic’s failure to show its right to relief because of the existence of a prior judgment which consequently barred the
relitigation of the same issue. In other words, the Sandiganbayan did

not dismiss the case on the insufficiency of the Republic’s evidence nor on the strength of respondents’ evidence. Rather, it based its
dismissal on the existence of the Ysmael case which, according to it, would render the case barred by res judicata.

Prescinding from this procedural miscue, was the Sandiganbayan correct in applying res judicata to the case at bar? To determine
whether or not res judicata indeed applies in the instant case, a review of Ysmael is proper.

In brief, Felipe Ysmael, Jr. & Co., Inc. was a grantee of a timber license agreement, TLA No. 87. Sometime in August 1983, the Bureau
of Forest Development cancelled TLA No. 87 despite the company’s letter for the reconsideration of the revocation. Barely one year
thereafter, one-half (or 26,000 hectares) of the area formerly covered by TLA No. 87 was re-awarded to Twin Peaks under TLA No.
356.

In 1986, Felipe Ysmael, Jr. & Co., Inc. sent separate letters to the Office of the President and the Ministry of Natural Resources
primarily seeking the reinstatement of TLA No. 87 and the revocation of TLA No. 356. Both offices denied the relief prayed for.
Consequently, Felipe Ysmael, Jr. & Co., Inc. filed a petition for review before this Court.

The Court, through the late Justice Irene Cortes, held that Ysmael’s letters to the Office of the President and to the Ministry of Natural
Resources in 1986 sought the reconsideration of a memorandum order by the Bureau of Forest Development canceling their timber
license agreement in 1983 and the revocation of TLA No. 356 subsequently issued by the Bureau in 1984. Ysmael did not attack the
administrative actions until after 1986. Since the decision of the Bureau has become final, it has the force and effect of a final judgment
within the purview of the doctrine of res judicata. These decisions and orders, therefore, are conclusive upon the rights of the affected
parties as though the same had been rendered by a court of general jurisdiction. The Court also denied the petition of Ysmael because
it failed to file the special civil action for certiorari under Rule 65 within a reasonable time, as well as in due regard for public policy
considerations and the principle of non-interference by the courts in matters which are addressed to the sound discretion of government
agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.

In Sarabia and Leido v. Secretary of Agriculture and Natural Resources, et al., 57 the Court discussed the underlying principle for res
judicata, to wit:

The fundamental principle upon which the doctrine of res judicata rests is that parties ought not to be permitted to litigate the same
issue more than once; that, when a right or fact has been judicially tried and determined by a court of competent jurisdiction, or an

49
opportunity for such trial has been given, the judgment of the court, so long as it remains unreversed, should be conclusive upon the
parties and those in privity with them in law or estate.

For res judicata to serve as an absolute bar to a subsequent action, the following requisites must concur: (1) the former judgment or
order must be final; (2) the judgment or order must be on the merits; (3) it must have been rendered by a court having jurisdiction over
the subject matter and parties; and (4) there must be between the first and second actions, identity of parties, of subject matter, and of
causes of action.58 When there is only identity of issues with no identity of causes of action, there exists res judicata in the concept of
conclusiveness of judgment.59

In Ysmael, the case was between Felipe Ysmael Jr. & Co., Inc. and the Deputy Executive Secretary, the Secretary of Environment and
Natural Resources, the Director of the Bureau of Forest Development and Twin Peaks Development and Realty Corporation. The
present case, on the other hand, was initiated by the Republic of

the Philippines represented by the Office of the Solicitor General. No amount of imagination could let us believe that there was an
identity of parties between this case and the one formerly filed by Felipe Ysmael Jr. & Co., Inc.

The Sandiganbayan held that despite the difference of parties, res judicata nevertheless applies on the basis of the supposed
sufficiency of the "substantial identity" between the Republic of the Philippines and Felipe Ysmael, Jr. Co., Inc. We disagree. The Court
in a number of cases considered the substantial identity of parties in the application of res judicata in instances where there is privity
between the two parties, as between their successors in interest by title 60 or where an additional party was simply included in the
subsequent case61 or where one of the parties to a previous case was not impleaded in the succeeding case. 62

The Court finds no basis to declare the Republic as having substantial interest as that of Felipe Ysmael, Jr. & Co., Inc. In the first place,
the Republic’s cause of action lies in the alleged abuse of

power on respondents’ part in violation of R.A. No. 301963 and breach of public trust, which in turn warrants its claim for restitution and
damages. Ysmael, on the other hand, sought the revocation of TLA No. 356 and the reinstatement of its own timber license agreement.
Indeed, there is no identity of parties and no identity of causes of action between the two cases.
IV.

What now is the course of action to take since we cannot affirm the Sandiganbayan’s grant of the demurrer to evidence? Rule 33, Sec.
1 reads:

Sec. 1. Effect of judgment on demurrer to evidence. – After the plaintiff has completed the presentation of his evidence, the defendant
may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied,
he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall have be
deemed to have waived the right to present evidence.

The general rule is that upon the dismissal of the demurrer in the appellate court, the defendant loses the right to present his evidence
and the appellate court shall then proceed to render judgment on the

merits on the basis of plaintiff’s evidence. As the Court explained in Generoso Villanueva Transit Co., Inc. v. Javellana: 64

The rationale behind the rule and doctrine is simple and logical. The defendant is permitted, without waiving his right to offer evidence
in the event that his motion is not granted, to move for a dismissal (i.e., demur to the plaintiff’s evidence) on the ground that upon the
facts as thus established and the applicable law, the plaintiff has shown no right to relief. If the trial court denies the dismissal motion,
i.e., finds that plaintiff’s evidence is sufficient for an award of judgment in the absence of contrary evidence, the case still remains
before the trial court which should then proceed to hear and receive the defendant’s evidence so that all the facts and evidence of the
contending parties may be properly placed before it for adjudication as well as before the appellate courts, in case of appeal. Nothing is
lost. The doctrine is but in line with the established procedural precepts in the conduct of trials that the trial court liberally receive all
proffered evidence at the trial to enable it to render its decision with all possibly relevant proofs in the record, thus assuring that the
appellate courts upon appeal have all the material before them necessary to make a correct judgment, and avoiding the need of
remanding the case for retrial or reception of improperly excluded evidence, with the possibility thereafter of still another appeal, with all
the concomitant delays. The rule, however, imposes the condition by the same token that if his demurrer is granted by the trial court,
and the order of dismissal is reversed on appeal, the movant loses his right to present evidence in his behalf and he shall have been
deemed to have elected to stand on the insufficiency of plaintiff’s case and evidence. In such event, the appellate court which reverses
the order of dismissal shall proceed to render judgment on the merits on the basis of plaintiff’s evidence. 65

It thus becomes the Court's duty to rule on the merits of the complaint, duly taking into account the evidence presented by the Republic,
and without need to consider whatever evidence the Tuveras have, they having waived their right to present evidence in their behalf.
V.

50
Executive Order No. 14-A66 establishes that the degree of proof required in cases such as this instant case is preponderance of
evidence. Section 3 thereof reads:

SEC. 3. The civil suits to recover unlawfully acquired property under Republic Act No. 1379 or for restitution, reparation of damages, or
indemnification for consequential and other damages or any other civil actions under the Civil Code or other existing laws filed with the
Sandiganbayan against Ferdinand E. Marcos, Imelda R. Marcos, members of their immediate family, close relatives, subordinates,
close and/or business associates, dummies, agents and nominees, may proceed independently of any criminal proceedings and may
be proved by a preponderance of evidence. [Emphasis supplied.]

Thus, the Court recently held in Yuchengco v. Sandiganbayan,67 that in establishing the quantum of evidence required for civil cases
involving the Marcos wealth held by their immediate family, close relatives, subordinates, close and/or business associates, dummies,

agents and nominees filed before the Sandiganbayan, that "the Sandiganbayan, x x x was not to look for proof beyond reasonable
doubt, but to determine, based on the evidence presented, in light of common human experience, which of the theories proffered by the
parties is more worthy of credence."

In order that restitution may be proper in this case, it must be first established that the grant of the TLA to Twin Peaks was illegal. With
the illegality of the grant established as fact, finding Victor Tuvera, the major stockholder of Twin Peaks, liable in this case should be the
ineluctable course. In order that Juan Tuvera may be held answerable as well, his own participation in the illegal grant should also be
substantiated.

Regarding the first line of inquiry, the Complaint adverted to several provisions of law which ostensibly were violated by the grant of the
TLA in favor of Twin Peaks. These include R.A. No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, and Articles 19,
20 and 21 of the Civil Code.

Still, the most organic laws that determine the validity or invalidity of the TLA are those that governed the issuance of timber license
agreements in 1984. In that regard, the Republic argues that the absence of a bidding process is patent proof of the irregularity of the
issuance of the TLA in favor of Twin Peaks.

A timber license agreement authorizes a person to utilize forest resources within any forest land with the right of possession and
exclusion of others.68 The Forestry Reform Code prohibits any person from utilizing, exploiting, occupying, possessing or conducting
any activity within any forest land unless he had been authorized to do so under a license agreement, lease, license or permit. 69 The
Code also mandates that no timber license agreement shall be issued unless the applicant satisfactorily proves that he has the financial
resources and technical capability not only to minimize utilization, but also to practice forest protection, conservation and development
measures to insure the perpetuation of said forest in productive condition. 70 However, the Code is silent as to the procedure in the
acquisition of such timber license agreement. Such procedure is more particularly defined under FAO No. 11, dated 1 September 1970,
which provides for the "revised forestry license regulations."

FAO No. 11 establishes that it is the Director of Forestry who has the power "to grant timber licenses and permits." 71 It also provides as
a general policy that timber license agreements shall be

granted through no other mode than public bidding.72 However, Section 24 of FAO No. 11 does admit that a timber license agreement
may be granted through "negotiation," as well as through "public bidding."

26. When license may be issued.–A license under this Regulations may be issued or granted only after an application and an award
either through bidding or by negotiation has been made and the Director of Forestry is satisfied that the issuance of such license
shall not be inconsistent with existing laws and regulations or prejudicial to public interest, and that the necessary license fee, bond
deposit and other requirements of the Bureau of Forestry have been paid and complied with. 73 [Emphasis supplied.]

However, even a person who is granted a TLA through "negotiation" is still required to submit the same requirements and supporting
papers as required for public bidding. The pertinent provisions of FAO No. 11 state:

18. Requirements and supporting papers to be submitted.—The following requirements with accompanying supporting papers or
documents shall be submitted in addition to the requirements of Section 12:

a. With bid application:

The applicant shall support his bid application with the required application fee duly paid and proofs of the following:

(1) Capitalization.—Cash deposits and established credit line by applicant in domestic bank certified to by the bank President or any of
its authorized officials, duly attested by depositor as his own to be used exclusively in logging and wood processing operations if

51
awarded the area. The bank certificate shall be accompanied by a written consent by the applicant-depositor for the Director of Forestry
or his authorized representative to verify such cash deposit with bank authorities.

Capitalization and financial statements.— A minimum capitalization of ₱20.00 per cubit meter in cash and an established credit line of
₱150.00 per cubic meter based on the allowable annual cut are required. Financial statements certified by the independent and
reputable certified public accountants must accompany the application as proof of the necessary capitalization.

Additional capitalization, Real Estate.— In the event that the capitalization of the applicant is less than the minimum or less than that set
by the Director of Forestry for the area, the applicant bidder may be asked to submit an affidavit signifying his readiness, should the
area be awarded to him, to convert within a specified time any specified unencumbered and titled real estate into cash for use in
operating and developing the area. Presentation of real estate should show location by municipality and province, hectarage, title
number, latest land tax declaration, assessed value of land and improvements (stating kind of improvements), and encumbrances if
any.

(2) Logging machinery and equipment.—Evidence of ownership or capacity to acquire the requisite machinery or equipment shall
accompany the bid application. The capacity or ability to acquire machineries and equipments shall be determined by the committee on
award. Leased equipment or machineries may be considered in the determination by the Committee if expressly authorized in writing
by the Director of Forestry.

(3) Technical know-how.—To assure efficient operation of the area or concession, the applicant shall submit proof of technical
competence and know-how and/or his ability to provide hired services of competent personnel.

(4) Operation or development plan.— An appropriate plan of operation and development of the forest area applied for shall be
submitted, including phasing plans and the fund requirements therefor, consistent with selective logging methods and the sustained
yield policy of the Bureau of Forestry. This plan must be in general agreement with the working unit plan for the area as contained in
Chapter III, Section 6(a) hereinabove.

(5) Processing plant.—The bidder or applicant shall show evidence of ownership of, or negotiation to acquire, a wood processing plant.
The kind and type of plant, such as plywood, veneer, bandmill, etc. shall be specified. The plant should be capable of processing at
least 60% of the allowable annual cut.

(6) Forestry Department.—The applicant shall submit assurance under oath that he shall put a forestry department composed of trained
or experienced foresters to carry out forest management activities such as selective logging, planting of denuded or logged-over areas
within the concessions as specified by the Director of Forestry and establish a forest nursery for the purpose.

(7) Statement on sustained yield operations, reforestation, and protection under management plans.— The bidder or applicant shall
submit a sworn statement of his agreement and willingness to operate the area under sustained yield to reforest cleared areas and
protect the concession or licensed area and under the approved management plan, and to abide with all existing forestry laws, rules
and regulations and those that may hereafter be promulgated; and of his agreement that any violation of these conditions shall be
sufficient cause for the cancellation of the licenses.

(8) Organization plan.–Other important statement connected with sound management and operation of the area, such as the
submission among others, of the organizational plan and employment of concession guards, shall be submitted. In this connection, the
applicant shall submit a sworn statement to the effect no alien shall be employed without prior approval of proper authorities.

(9) Unauthorized use of heave equipment.—The applicant shall give his assurance that he shall not introduce into his area additional
heave equipment and machinery without approval of the Director of Forestry.

(10) Such other inducements or considerations to the award as will serve public interest may also be required from time to time.

xxxx

d) With applications for areas to be negotiated.—All the foregoing requirements and supporting papers required for bidding under
Section 18(a) hereinabove and of Section 20(b) hereinbelow shall also apply to all areas that may be granted through negotiation. In no
case shall an area exceeding 100,000 hectares be granted thru negotiation. 74

The rationale underlying the very elaborate procedure that entails prior to the grant of a timber license agreement is to avert the
haphazard exploitation of the State's forest resources as it provides that only the most qualified applicants will be allowed to engage in
timber activities within the strict limitations of the grant and that cleared forest areas will have to be renewed through reforestation.
Since timber is not a readily renewable natural resource, it is essential and appropriate that the State serve and act as a jealous and
zealous guardian of our forest lands, with the layers of bureaucracy that encumber the grant of timber license agreements effectively
serving as a defensive wall against the thoughtless ravage of our forest resources.

52
There is no doubt that no public bidding occurred in this case. Certainly, respondents did not raise the defense in their respective
answers. The absence of such bidding was testified on by prosecution witness Arcangel. Yet even if we consider that Twin Peaks could
have acquired the TLA through "negotiation," the prescribed requirements for "negotiation" under the law were still not complied with.

It is evident that Twin Peaks was of the frame of mind that it could simply walk up to President Marcos and ask for a timber license
agreement without having to comply with the elaborate application procedure under the law. This is indicated by the letter dated 31 May
198475 signed by Twin Peaks’ Vice President and Treasurer Evelyn Fontanilla, addressed directly to then President Marcos, wherein
Twin Peaks expressed that "we would like to request a permit to export 20,000 cubic meters of logs and to cut and process 10,000
cubic meters of the narra species in the same area."76 A marginal note therein signed by Marcos indicates an approval thereof. Neither
the Forestry Reform Code nor FAO No. 11 provide for the submission of

an application directly to the Office of the President as a proper mode for the issuance of a TLA. Without discounting the breadth and
scope of the President’s powers as Chief Executive, the authority of the President with respect to timber licenses is, by the express
terms of the Revised Forestry Code, limited to the amendment, modification, replacement or rescission of any contract, concession,
permit, license or any other form of privilege granted by said Code. 77

There are several factors that taint this backdoor application for a timber license agreement by Twin Peaks. The forest area covered by
the TLA was already the subject of a pre-existing TLA in favor of Ysmael. The Articles of Incorporation of Twin Peaks does not even
stipulate that logging was either a principal or secondary purpose of the corporation. Respondents do allege that the Articles was
amended prior to the grant in order to accommodate logging as a corporate purpose, yet since respondents have waived their right to
present evidence by reason of their resort to demurrer, we cannot consider such allegation as proven.

Sec. 18(a)(1) of FAO No. 11 requires that an applicant must have a minimum capitalization of ₱20.00 per cubic meter in cash and an
established credit line of ₱150.00 per cubic meter based on the allowable annual cut. TLA No. 356 allowed Twin Peaks to operate on
26,000 hectares of forest land with an annual allowable cut of 60,000 cubic meters of timber. With such annual allowable cut, Twin

Peaks, therefore, must have at least ₱1,200,000.00 in cash as its minimum capitalization, following FAO No. 11. An examination of
Twin Peaks’ Articles of Incorporation shows that its paid-up capital was only ₱312,500.00. 78 Clearly, Twin Peaks’ paid-up capital is way
below the minimum capitalization requirement.

Moreover, Sec. 18(5) provides that the bidder or applicant shall show evidence of ownership of, or negotiation to acquire, a wood
processing plant. However, although TLA No. 356 was issued to Twin Peaks in 1984, it continued to engage the services of at least two
sawmills79 as late as 1988. Four (4) years from the issuance of the license, Twin Peaks remained incapable of processing logs.

What could have made Twin Peaks feel emboldened to directly request President Marcos for the grant of Timber License Agreement
despite the obvious problems relating to its capacity to engage in timber activities? The reasonable assumption is that the official and
personal proximity of Juan Tuvera to President Marcos was a key factor, considering that he was the father of Twin Peaks' most
substantial stockholder.

The causes of action against respondents allegedly arose from Juan Tuvera’s abuse of his relationship, influence and connection as
Presidential Executive Assistant of then President Marcos. Through Juan Tuvera’s position, the Republic claims that Twin Peaks was
able to secure a Timber License Agreement despite its lack of qualification and the absence of a public bidding. On account of the
unlawful issuance of a timber license agreement, the natural resources of the country were unlawfully exploited at the expense of the
Filipino people. Victor Tuvera, as son of Juan Tuvera and a major stockholder of Twin Peaks, was included as respondent for having
substantially benefited from this breach of trust. The circumstance of kinship alone may not be enough to disqualify Victor Tuvera from
seeking a timber license agreement. Yet the basic ethical principle of delicadeza should have dissuaded Juan Tuvera from any official
or unofficial participation or intervention in behalf of the "request" of Twin Peaks for a timber license.

Did Juan Tuvera do the honorable thing and keep his distance from Twin Peaks' "request"? Apparently not. Instead, he penned a
Memorandum dated 18 July 1984 in his capacity as Presidential Executive Assistant, directed at the Director of Forestry, the official
who, under the law, possessed the legal authority to decide whether to grant the timber license agreements after deliberating on the
application and its supporting documents. The Memorandum reads in full:

Office of the President of the Philippines

Malacanang

18 July 1984

74-84
MEMORANDUM to

Director Edmundo Cortes

Bureau of Forest Development

53
I wish to inform you that the President has granted the award to the Twin Peaks Realty Development Corporation, of the concession to
manage, operate and develop in accordance with existing policies and regulations half of the timber area in the Province of Quirino
covered by TLA No. 87, formerly belonging to the Felipe Ysmael, Jr. & Company and comprising 54,920 hectares, and to export half of
the requested 20,000 cubic meters of logs to be gathered from the area.

Herewith is a copy of the letter concering (sic) this matter of Ms. Evelyn F. Fontanilla, Vice-President and Treasurer of the Twin Peaks
Realty Development Corporation, on which the President indicated such approval in his own hand, which I am furnishing you for your
information and appropriate action.

(signed)
JUAN C. TUVERA
Presidential Executive Assistant80

The Memorandum establishes at the very least that Tuvera knew about the Twin Peaks "request," and of President Marcos's favorable
action on such "request." The Memorandum also indicates that Tuvera was willing to convey those facts to the Director of Forestry, the
ostensible authority in deciding whether the Twin Peaks "request" should have been granted. If Juan Tuvera were truly interested in
preventing any misconception that his own position had nothing to do with the favorable action on the "request" lodged by the company
controlled by his son, he would not have prepared or signed the Memorandum at all. Certainly, there were other officials in Malacañang
who could have performed that role had the intent of the Memorandum been merely to inform the Director of Forestry of such
Presidential action.

Delicadeza is not merely a stentorian term evincing a bygone ethic. It is a legal principle as embodied by certain provisions of the Anti-
Graft and Corrupt Practices Act. Section 3 of R.A. No. 3019 states in part:

Sec. 3. Corrupt practices of public officers.—In addition to acts or omissions of public officers already penalized by existing law, the
following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

(a) Persuading, inducing or influencing another public officer to perform an act constituting a violation of rules and regulations duly
promulgated by competent authority or an offense in connection with the official duties of the latter, or allowing himself to be persuaded,
induced or influenced to commit such violation or offense.

xxxx

(h) Directly or indirectly having financial or pecuniary interest in any business, contract or transaction in connection with which he
intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest.

The Memorandum signed by Juan Tuvera can be taken as proof that he "persuaded, induced or influenced" the Director of Forestry to
accommodate a timber license agreement in favor of Twin Peaks, despite the failure to undergo public bidding, or to comply with the
requisites for the grant of such agreement by negotiation, and in favor of a corporation that did not appear legally capacitated to be
granted such agreement. The fact that the principal stockholder of Twin Peaks was his own son establishes his indirect pecuniary
interest in the transaction he appears to have intervened in. It may have been possible on the part of Juan Tuvera to prove that he did
not persuade, induce or influence the Director of Forestry or any other official in behalf of the timber license agreement of Twin Peaks,
but then again, he waived his right to present evidence to acquit himself of such suspicion. Certainly, the circumstances presented by
the evidence of the prosecution are sufficient to shift the burden of evidence to Tuvera in establishing that he did not violate the
provisions of the Anti-Graft and Corrupt Practices Act in relation to the Twin Peaks "request." Unfortunately, having waived his right to
present evidence, Juan Tuvera failed to disprove that he failed to act in consonance with his obligations under the Anti-Graft and
Corrupt Practices Act.

In sum, the backdoor recourse for a hugely priced favor from the government by itself, and more in tandem with other brazen relevant
damning circumstances, indicates the impudent abuse of power and the detestable misuse of influence that homologously made the
acquisition of ill-gotten wealth a reality. Upon the facts borne out by the evidence for the Republic and guideposts supplied by the
governing laws, the Republic has a clear right to the reliefs it seeks.
VI.

If only the Court's outrage were quantifiable in sums of money, respondents are due for significant pecuniary hurt. Instead, the Court is
forced to explain in the next few paragraphs why respondents could not be forced to recompensate the Filipino people in appropriate
financial terms. The fault lies with those engaged by the government to litigate this case in behalf of the State.

It bears to the most primitive of reasons that an action for recovery of sum of money must prove the amount sought to be recovered. In
the case at bar, the Republic rested its case without presenting any evidence, documentary or testimonial, to establish the amount that
should be restituted to the State by reason of the illegal acts committed by the respondents. There is the bare allegation in the
complaint that the State is entitled to ₱48 million by way of actual damages, but no single proof presented as to why the State is entitled
to such amount.

54
Actual damages must be proven, not presumed.81 The Republic failed to prove damages. It is not enough for the Republic to have
established, as it did, the legal travesty that led to the wrongful obtention by Twin Peaks of the TLA. It should have established the
degree of injury sustained by the State by reason of such wrongful act.

We fail to comprehend why the Republic failed to present any proof of actual damages. Was it the inability to obtain the necessary
financial documents that would establish the income earned by Twin Peaks during the period it utilized the TLA, despite the presence of
the discovery processes? Was it mere indolence or sheer incompetence? Whatever the reason, the lapse is inexcusable, and the injury
ultimately conduces to the pain of the Filipino people. If the litigation of this case is indicative of the mindset in the prosecution of ill-
gotten wealth cases, it is guaranteed to ensure that those who stole from the people will be laughing on their way to the bank.

The claim for moral damages deserves short shrift. The claimant in this case is the Republic of the Philippines, a juridical person. We
explained in Filipinas Broadcasting v. Ago Medical & Educational Center-Bicol Christian College of Medicine (AMEC-BCCM):82

A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or
such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. The Court of Appeals cites Mambulao Lumber
Co. v. PNB, et al. to justify the award of moral damages. However, the Court's statement in Mambulao that "a corporation may have a
good reputation which, if besmirched, may also be a ground for the award of moral damages" is an obiter dictum.

Nevertheless, AMEC's claim for moral damages falls under item 7 of Article 2219 of the Civil Code. This provision expressly authorizes
the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does not qualify whether the
plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form
of defamation and claim for moral damages.83

As explained, a juridical person is not entitled to moral damages under Article 2217 of the Civil Code. It may avail of moral damages
under the analogous cases listed in Article 2219, such as for libel, slander or any other form of defamation. Suffice it to say that the
action at bar does not involve any of the analogous cases under Article 2219, and indeed upon an intelligent reading of Article 2219, it
is difficult to see how the Republic could sustain any of the injuries contemplated therein. Any lawyer for the Republic who poses a
claim for moral damages in behalf of the State stands in risk of serious ridicule.

However, there is sufficient basis for an award of temperate damages, also sought by the Republic notwithstanding the fact that a claim
for both actual and temperate damages is internally inconsistent. Temperate or moderate damages avail when "the court finds that
some pecuniary loss has been suffered but its amount can not from the nature of the case, be proved with certainty." 84 The textual
language might betray an intent that temperate damages do not avail when the case, by its nature, is susceptible to proof of pecuniary
loss; and certainly the Republic could have proved pecuniary loss herein. 85 Still, jurisprudence applying Article 2224 is clear that
temperate damages may be awarded even in instances where pecuniary loss could theoretically have been proved with
certainty.1awphi1.net

In a host of criminal cases, the Court has awarded temperate damages to the heirs of the victim in cases where the amount of actual
damages was not proven due to the inadequacy of the evidence presented by the prosecution. These cases include People v.
Oliano,86 People v. Suplito,87 People v. De la Tongga,[88] People v. Briones,89 and People v. Plazo.90 In Viron Transportation Co., Inc.
v. Delos Santos,91 a civil action for damages involving a vehicular collision, temperate damages were awarded for the resulting damage
sustained by a cargo truck, after the plaintiff had failed to submit competent proof of actual damages.

We cannot discount the heavy influence of common law, and its reliance on judicial precedents, in our law on tort and damages.
Notwithstanding the language of Article 2224, a line of jurisprudence has emerged authorizing the award of temperate damages even in
cases where the amount of pecuniary loss could have been proven with certainty, if no such adequate proof was presented. The
allowance of temperate damages when actual damages were not adequately proven is ultimately a rule drawn from equity, the principle
affording relief to those definitely injured who are unable to prove how definite the injury. There is no impediment to apply this doctrine
to the case at bar, which involves one of the most daunting and noble undertakings of our young democracy–the recovery of ill-gotten
wealth salted away during the Marcos years. If the doctrine can be justified to answer for the unlawful damage to a cargo truck, it is a

compounded wrath if it cannot answer for the unlawful exploitation of our forests, to the injury of the Filipino people. The amount of
₱1,000,000.00 as temperate damages is proper.

The allowance of temperate damages also paves the way for the award of exemplary damages. Under Article 2234 of the Civil Code, a
showing that the plaintiff is entitled to temperate damages allows for the award of exemplary damages. Even as exemplary damages
cannot be recovered as a matter of right, the courts are empowered to decide whether or not they should be adjudicated. Ill-gotten
wealth cases are hornbook demonstrations where damages by way of example or correction for the public good should be awarded.
Fewer causes of action deserve the stigma left by exemplary damages, which "serve as a deterrent against or as a negative incentive
to curb socially deleterious actions."92 The obtention of the timber license agreement by Twin Peaks through fraudulent and illegal
means was highlighted by Juan Tuvera’s abuse of his position as Presidential Executive Assistant. The consequent exploitation of 26
hectares of forest land benefiting all respondents is a grave case of unjust enrichment at the expense of the Filipino people and of the
environment which should never be countenanced. Considering the expanse of forest land exploited by respondents, the volume of

55
timber that was necessarily cut by virtue of their abuse and the estimated wealth acquired by respondents through grave abuse of trust
and public office, it is only reasonable that petitioner be granted the amount of ₱1,000,000.00 as exemplary damages.

The imposition of exemplary damages is a means by which the State, through its judicial arm, can send the clear and unequivocal
signal best expressed in the pithy but immutable phrase, "never again." It is severely unfortunate that the Republic did not exert its best
efforts in the full recovery of the actual damages caused by the illegal grant of the Twin Peaks TLA. To the best of our ability, through
the appropriate vehicle of exemplary damages, the Court will try to fill in that deficiency. For if there is a lesson that should be

learned from the national trauma of the rule of Marcos, it is that kleptocracy cannot pay. As those dark years fade into the backburner of
the collective memory, and a new generation emerges without proximate knowledge of how bad it was then, it is useful that the Court
serves a reminder here and now.

WHEREFORE, the petition is GRANTED. The Resolution of the Sandiganbayan dated 23 May 2001 is REVERSED. Respondents Juan
C. Tuvera, Victor P. Tuvera and Twin Peaks Development Corporation are hereby ordered to jointly and severally pay to the Republic
of the Philippines One Million (₱1,000,000.00) Pesos, as and for temperate damages, and One Million (₱1,000,000.00) Pesos, as and
for exemplary damages, plus costs of suit.

SO ORDERED.

56
Apostolic Vicar of Tavuk vs Sison G R No191132 January 27 2016

G.R. No. 191132, January 27, 2016

APOSTOLIC VICAR OF TABUK, INC. REPRESENTED BY BISHOP PRUDENCIO ANDAYA, JR., Petitioner, v. SPOUSES
ERNESTO AND ELIZABETH SISON AND VENANCIO WADAS, Respondents.

DECISION

BRION, J.:

This petition for review on certiorari seeks to reverse the 23 November 2009 and 26 January 2010 orders of the Regional Trial Court of
Luna, Apayao, Branch 26 (RTC) in Civil Case No. 2-2009.1 The RTC dismissed the petitioner's Rule 47 petition for annulment of
judgment addressing the decision of the 6th Municipal Circuit Trial Court of Kabugao-Conner (MCTC) in SPL. Civil Case No. 32-05-
Cr.2

ANTECEDENTS

On 16 February 2005, the respondent spouses Ernesto and Elizabeth Sison and respondent Venancio Wadas filed a forcible entry
complaint against the Vicar Apostolic of Mountain Province represented by Fr. Gerry Gudmalin. The complaint was filed with the MCTC
and docketed as Spl. Civil Case No. 32-2005-Cr.

The respondents alleged that on 29 August 2004, Fr. Gerry Gudmalin, a priest of the St. Anthony Church of the Vicar Apostolic of
Mountain Province, ordered the forcible demolition of their respective perimeter fences in order to expand the area of the Church. The
priest dispossessed them of their lands and began constructing a building that encroached on portions of their respective lots.

On 11 March 2005, MCTC Junior Process Server Raul T. Abad executed an officer's return. The return states:
Respectfully informed the Hon. Court regarding the "SUMMON[s]" in Civil Case No. 32-2005-Cr., with the information that it was duly
served, but the person/defendant cited therein went to Manila for an official business as per verbal information related by her [sic]
secretary Mariphee B. Polio, who received and signed said summon[s], she promised the undersigned that said summon[s] will be
handed to the defendant upon his arrival from Manila.
On 13 July 2005, the case was submitted for decision because the defendant failed to file its answer despite service of summons.

On 12 August 2005, the MCTC rendered a decision in favor of the respondents. It ordered Fr. Gerry Gudmalin and the Vicar Apostolic
of Mountain Province to: (1) refrain from any further construction within the respondents' properties; (2) remove their constructions; (3)
vacate and return the respondents' properties; and (4) pay damages.

On 7 September 2005, the MCTC decision became final and executory.3

On 19 September 2005, petitioner Apostolic Vicar of Tabuk, Inc. (the Vicariate of Tabuk) filed an urgent manifestation and motion
before the MCTC.4 It manifested: (1) that the land subject of Spl. Civil Case No. 32-05-Cr. is owned and possessed by the Vicariate of
Tabuk represented by Reverend Monsignor Prudencio P. Andaya, Jr., not by the Vicariate Apostolic of Mt. Province represented by Fr.
Gerry Gudmalin as alleged in the complaint; and (2) that it had been denied due process because it was neither impleaded nor served
summons. It moved for the court to set aside its 12 August 2005 decision and to summon and implead the Vicariate of Tabuk.

On 28 August 2006, the MCTC denied the petitioner's urgent motion and manifestation. 5 It treated the motion as a motion for
reconsideration - a prohibited pleading under Section 19 of the Rules on Summary Procedure. It also stressed that in ejectment cases,
the basic issue is possession de facto, not ownership; the proper defendant is the person who actually disturbed the complainant's
possession over the property. Thus, the respondents correctly impleaded the Vicariate of Mt. Province (represented by Fr. Gerry
Gudmalin) which ordered the demolition of the perimeter fences and the expansion of the Church's occupied area.

On 7 September 2007, the petitioner filed a notice of appeal from the 28 August 2006 decision. The appeal was raffled to the Regional
Trial Court (RTC) of Luna, Apayao, Branch 26 and docketed as Civil Case No. 1-2008.6

On 3 June 2008, the RTC dismissed the appeal because the petitioner failed to file its appellant's memorandum within the reglementary
period.

On 10 June 2009, the Vicariate of Tabuk filed a Rule 47 petition for annulment of the MCTC judgment in Special Civil Case No. 32-
2005-Cr.7 It argued that the MCTC rendered the decision without acquiring jurisdiction over its person. It also alleged that the Vicariate
of Mt. Province no longer exists because it was dissolved in 1990. The petition was filed before the RTC of Luna, Apayao, Branch 26
and docketed as Civil Case No. 2-2009.

The respondents filed a motion to dismiss8 dated 14 July 2009 because: (1) the petition had no cause of action and (2) the Vicariate of
Tabuk had no juridical personality or legal capacity to sue. The respondents reasoned that the Vicariate of Mt. Province, through Fr.
Gerry Gudmalin was properly impleaded because the sole issue was prior possession. They posited that since the Vicariate of Tabuk

57
and Bishop Prudencio Andaya were not impleaded in Spl. Civil Case No. 32-2005-Cr, then they have no personality to file the petition
for the annulment of judgment.

On 28 August 2009, the Vicariate of Tabuk filed its opposition 9 arguing that: (1) it is a corporation sole duly registered with the
Securities and Exchange Commission; and (2) it is the proper party to file the petition for annulment because Fr. Gerry Gudmalin had
no authority to represent the corporation sole in Spl. Civil Case No. 32-2005-Cr.

On 17 September 2009, the RTC denied the motion to dismiss because the petition stated a cause of action. 10 It held that if the
allegations in the petition were hypothetically admitted, then a judgment can be rendered in accordance with the prayer. It brushed
aside the contention that the Vicariate of Tabuk had no legal personality because its articles of incorporation were attached to the
opposition.

On 22 September 2009, the respondents moved for reconsideration of the RTC's denial of their motion to dismiss.

On 23 November 2009, the RTC reconsidered its denial and dismissed the petition for failure to state a cause of action. The RTC
reasoned that the petitioner's filing of a notice of appeal and subsequent failure to file its appeal memorandum precluded its resort to
annulment of judgment; the remedy is not available to a party who lost his right to appeal due to his own fault. The RTC concluded that
since the petitioner claimed ownership over the property, then it should file an appropriate case of ownership with the proper court
instead.

The petitioner moved for reconsideration which the RTC denied on 26 January 2010.

On 19 February 2010, the petitioner elevated the case directly to this court by filing the present petition for review on certiorari.

THE PETITION

The petitioner prays that the Court set aside the RTC's dismissal of its petition for annulment of judgment and to issue a mandatory
injunction restoring its possession of the subject lot.

It argues: (1) that its petition for annnulment sufficiently stated a cause of action; (2) that it is the real party-in-interest that should have
been impleaded in the ejectment suit; (3) that it had legal standing to question the MCTC's failure to serve summons; and (4) that its
filing of a notice of appeal did not amount to voluntary submission to the MCTC's jurisdiction because the void judgment was already
"final and executory" when the petitioner discovered it.

In their comment, the respondents maintain: (1) that the MCTC acquired jurisdiction over the named defendant in the case; (2) that as
the actual occupant of the subject property, the named defendant is the real party-in-interest; and (3) that the petitioner cannot resort to
an action for annulment of judgment (an equitable remedy) because it lost its opportunity to appeal after it failed to file its appellant's
brief.

OUR RULING

The RTC dismissed the Vicariate of Tabuk's petition for annulment of judgment because it allegedly failed to state a cause of action.
However, upon reviewing the RTC's 23 November 2009 order and examining the petition for annulment, we conclude that the dismissal
was actually due to lack of a cause of action.

Failure to state a cause of action and lack of a cause of action are not the same. Failure to state a cause of action refers to
an insufficiency of the allegations in the petition/complaint. It is a ground for dismissal under Rule 16 of the Rules of Court before
the defendant or respondent files a responsive pleading. Notably, the dismissal is without prejudice to the re�filing of an amended
complaint.

On the other hand, the lack of a cause of action refers to an insufficiency of factual or legal basis to grant the complaint. It
applies to a situation where the evidence failed to prove the cause of action alleged in the pleading. It is a ground for dismissal using a
demurrer to evidence under Rule 33 after the plaintiff has completed presenting his evidence. The dismissal constitutes res judicata on
the issue and will bar future suits based on the same cause of action.

In the present case, the petition for annulment of judgment actually stated a cause of action: that the MCTC rendered a judgment
against the petitioner without acquiring jurisdiction over its person. If the RTC hypothetically admitted this allegation, the petitioner
becomes entitled to the relief prayed for: the annulment of the MCTC judgment. Thus, the RTC erred when it stated that the dismissal
was for "failure to state a cause of action."

Nevertheless, Rule 47 authorizes the RTC to dismiss a petition for annulment of judgment outright if it has no substantial merit:
Section 5. Action by the court. � Should the court find no substantial merit in the petition, the same may be dismissed outright
with specific reasons for such dismissal. x x x
We affirm the RTC's dismissal of the petition.

First, in an ejectment suit (action interdictal), the sole issue is the right of physical or material possession over the subject real property
independent of any claim of ownership by the parties involved. Ownership over the property is immaterial and is only passed
58
upon provisionally for the limited purpose of determining which party has the better right to possession. 11

The only purpose of an ejectment suit for Forcible Entry (detentacion) is to protect the person who had prior physical possession
against another who unlawfully entered the property and usurped his possession. The suit is only filed against the possessor(s) of the
property at the commencement of action, and not against one who does not in fact occupy the land. 12 To determine who should be
made a party-defendant, we simply look at who committed the acts amounting to forcible entry and remains in possession of the subject
property.13

In the present case, it was alleged that it was Fr. Gerry Gudmalin, acting for the Vicar Apostolic of Mountain Province, who forcibly
entered the property previously held by the respondents and who remains in possession. Hence, the Vicariate of Mt. Province was
correctly impleaded as the defendant. While the petitioner denies the existence of the Vicariate of Mt. Province, this Court cannot pass
upon this peripheral issue because we are not a trier of facts.

Second, ejectment suits are actions in personam wherein judgment only binds parties who had been properly impleaded and were
given an opportunity to be heard.14 The MCTC judgment was only rendered against Fr. Gudmalin and the Vicar Apostolic of Mountain
Province, not against the petitioner Vicariate of Tabuk. Hence, the petitioner can only be bound by the MCTC judgment if it is shown to
be: (a) a trespasser, squatter, or agent of the defendants fraudulently occupying the property to frustrate the judgment; (b) a guest or
other occupant of the premises with the permission of the defendants; (c) a transferee pendente lite; (d) sub-lessee; (e) co-lessee; or (f)
a member of the family, a relative, or other privy of the defendants. 15

In such a case, a court hearing is required to determine the character of such possession. If the executing court finds that the petitioner
is a mere successor-in-interest, guest, or agent of the defendants, the order of execution shall be enforced against it.

Since the judgment was not rendered against the petitioner, it has no legal personality to ask for annulment of the judgment.
Understandably, the petitioner feels aggrieved because it claims ownership over the subject lot that the MCTC ordered Fr. Gudmalin to
turn over to the respondents. However, from a purely legal perspective, the MCTC judgment did not prejudice the petitioner.

This is not to say that the petitioner is left without a remedy in law. The petitioner may still avail of the plenary action of accion
reinvindicatoria wherein the issue of its ownership may be thoroughly threshed out in a full�blown trial after which complete reliefs
may be granted to the proper parties.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. Costs against the petitioners.

SO ORDERED.ch

59
Radiowealth Finance vs. Del Rosario, July 6, 2000

G.R. No. 138739 July 6, 2000

RADIOWEALTH FINANCE COMPANY, petitioner,

vs.
Spouses VICENTE and MA. SUMILANG DEL ROSARIO, respondents.

DECISION

PANGANIBAN, J.:

When a demurrer to evidence granted by a trial court is reversed on appeal, the reviewing court cannot remand the case for further
proceedings. Rather, it should render judgment on the basis of the evidence proffered by the plaintiff. Inasmuch as defendants in the
present case admitted the due execution of the Promissory Note both in their Answer and during the pretrial, the appellate court should
have rendered judgment on the bases of that Note and on the other pieces of evidence adduced during the trial.

The Case

Before us is a Petition for Review on Certiorari of the December 9, 1997 Decision 1 and the May 3, 1999 Resolution2 of the Court of
Appeals in CA-GR CV No. 47737. The assailed Decision disposed as follows:

"WHEREFORE, premises considered, the appealed order (dated November 4, 1994) of the Regional Trial Court (Branch XIV) in the
City of Manila in Civil Case No. 93-66507 is hereby REVERSED and SET ASIDE. Let the records of this case be remanded to the
court a quo for further proceedings. No pronouncement as to costs."3

The assailed Resolution denied the petitioner’s Partial Motion for Reconsideration. 4

The Facts

The facts of this case are undisputed. On March 2, 1991, Spouses Vicente and Maria Sumilang del Rosario (herein respondents),
jointly and severally executed, signed and delivered in favor of Radiowealth Finance Company (herein petitioner), a Promissory
Note5 for ₱138,948. Pertinent provisions of the Promissory Note read:

"FOR VALUE RECEIVED, on or before the date listed below, I/We promise to pay jointly and severally Radiowealth Finance Co. or
order the sum of ONE HUNDRED THIRTY EIGHT THOUSAND NINE HUNDRED FORTY EIGHT Pesos (₱138,948.00) without need of
notice or demand, in installments as follows:

₱11,579.00 payable for 12 consecutive months starting on ________ 19__ until the amount of ₱11,579.00 is fully paid. Each
installment shall be due every ____ day of each month. A late payment penalty charge of two and a half (2.5%) percent per month shall
be added to each unpaid installment from due date thereof until fully paid.

xxx xxx xxx

It is hereby agreed that if default be made in the payment of any of the installments or late payment charges thereon as and when the
same becomes due and payable as specified above, the total principal sum then remaining unpaid, together with the agreed late
payment charges thereon, shall at once become due and payable without need of notice or demand.

xxx xxx xxx

If any amount due on this Note is not paid at its maturity and this Note is placed in the hands of an attorney or collection agency for
collection, I/We jointly and severally agree to pay, in addition to the aggregate of the principal amount and interest due, a sum
equivalent to ten (10%) per cent thereof as attorney’s and/or collection fees, in case no legal action is filed, otherwise, the sum will be
equivalent to twenty-five (25%) percent of the amount due which shall not in any case be less than FIVE HUNDRED PESOS (P500.00)
plus the cost of suit and other litigation expenses and, in addition, a further sum of ten per cent (10%) of said amount which in no case
shall be less than FIVE HUNDRED PESOS (P500.00), as and for liquidated damages." 6

Thereafter, respondents defaulted on the monthly installments. Despite repeated demands, they failed to pay their obligations under
their Promissory Note.

60
On June 7, 1993, petitioner filed a Complaint7 for the collection of a sum of money before the Regional Trial Court of Manila, Branch
14.8 During the trial, Jasmer Famatico, the credit and collection officer of petitioner, presented in evidence the respondents’ check
payments, the demand letter dated July 12, 1991, the customer’s ledger card for the respondents, another demand letter and
Metropolitan Bank dishonor slips. Famatico admitted that he did not have personal knowledge of the transaction or the execution of any
of these pieces of documentary evidence, which had merely been endorsed to him.

On July 4, 1994, the trial court issued an Order terminating the presentation of evidence for the petitioner. 9 Thus, the latter formally
offered its evidence and exhibits and rested its case on July 5, 1994.

Respondents filed on July 29, 1994 a Demurrer to Evidence10 for alleged lack of cause of action. On November 4, 1994, the trial court
dismissed11 the complaint for failure of petitioner to substantiate its claims, the evidence it had presented being merely hearsay.

On appeal, the Court of Appeals (CA) reversed the trial court and remanded the case for further proceedings.

Hence, this recourse.12

Ruling of the Court of Appeals

According to the appellate court, the judicial admissions of respondents established their indebtedness to the petitioner, on the grounds
that they admitted the due execution of the Promissory Note, and that their only defense was the absence of an agreement on when
the installment payments were to begin. Indeed, during the pretrial, they admitted the genuineness not only of the Promissory Note, but
also of the demand letter dated July 12, 1991. Even if the petitioner’s witness had no personal knowledge of these documents, they
would still be admissible "if the purpose for which [they are] produced is merely to establish the fact that the statement or document was
in fact made or to show its tenor[,] and such fact or tenor is of independent relevance."

Besides, Articles 19 and 22 of the Civil Code require that every person must -- in the exercise of rights and in the performance of duties
-- act with justice, give all else their due, and observe honesty and good faith. Further, the rules on evidence are to be liberally
construed in order to promote their objective and to assist the parties in obtaining just, speedy and inexpensive determination of an
action.

Issue

The petitioner raises this lone issue:

"The Honorable Court of Appeals patently erred in ordering the remand of this case to the trial court instead of rendering judgment on
the basis of petitioner’s evidence."13

For an orderly discussion, we shall divide the issue into two parts: (a) legal effect of the Demurrer to Evidence, and (b) the date when
the obligation became due and demandable.

The Court’s Ruling

The Petition has merit. While the CA correctly reversed the trial court, it erred in remanding the case "for further proceedings."

Consequences of a Reversal, on Appeal, of a Demurrer to Evidence

Petitioner contends that if a demurrer to evidence is reversed on appeal, the defendant should be deemed to have waived the right to
present evidence, and the appellate court should render judgment on the basis of the evidence submitted by the plaintiff. A remand to
the trial court "for further proceedings" would be an outright defiance of Rule 33, Section 1 of the 1997 Rules of Court.

On the other hand, respondents argue that the petitioner was not necessarily entitled to its claim, simply on the ground that they lost
their right to present evidence in support of their defense when the Demurrer to Evidence was reversed on appeal. They stress that the
CA merely found them indebted to petitioner, but was silent on when their obligation became due and demandable.

The old Rule 35 of the Rules of Court was reworded under Rule 33 of the 1997 Rules, but the consequence on appeal of a demurrer to
evidence was not changed. As amended, the pertinent provision of Rule 33 reads as follows:

"SECTION 1. Demurrer to evidence.—After the plaintiff has completed the presentation of his evidence, the defendant may move for
dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have
the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have
waived the right to present evidence."14

61
Explaining the consequence of a demurrer to evidence, the Court in Villanueva Transit v. Javellana 15 pronounced:

"The rationale behind the rule and doctrine is simple and logical. The defendant is permitted, without waiving his right to offer evidence
in the event that his motion is not granted, to move for a dismissal (i.e., demur to the plaintiff’s evidence) on the ground that upon the
facts as thus established and the applicable law, the plaintiff has shown no right to relief. If the trial court denies the dismissal motion,
i.e., finds that plaintiff’s evidence is sufficient for an award of judgment in the absence of contrary evidence, the case still remains
before the trial court which should then proceed to hear and receive the defendant’s evidence so that all the facts and evidence of the
contending parties may be properly placed before it for adjudication as well as before the appellate courts, in case of appeal. Nothing is
lost. The doctrine is but in line with the established procedural precepts in the conduct of trials that the trial court liberally receive all
proffered evidence at the trial to enable it to render its decision with all possibly relevant proofs in the record, thus assuring that the
appellate courts upon appeal have all the material before them necessary to make a correct judgment, and avoiding the need of
remanding the case for retrial or reception of improperly excluded evidence, with the possibility thereafter of still another appeal, with all
the concomitant delays. The rule, however, imposes the condition by the same token that if his demurrer is granted by the trial court,
and the order of dismissal is reversed on appeal, the movant losses his right to present evidence in his behalf and he shall have been
deemed to have elected to stand on the insufficiency of plaintiff’s case and evidence. In such event, the appellate court which reverses
the order of dismissal shall proceed to render judgment on the merits on the basis of plaintiff’s evidence." (Underscoring supplied)

In other words, defendants who present a demurrer to the plaintiff’s evidence retain the right to present their own evidence, if the trial
court disagrees with them; if the trial court agrees with them, but on appeal, the appellate court disagrees with both of them and
reverses the dismissal order, the defendants lose the right to present their own evidence. 16 The appellate court shall, in addition, resolve
the case and render judgment on the merits, inasmuch as a demurrer aims to discourage prolonged litigations. 17

In the case at bar, the trial court, acting on respondents’ demurrer to evidence, dismissed the Complaint on the ground that the plaintiff
had adduced mere hearsay evidence. However, on appeal, the appellate court reversed the trial court because the genuineness and
the due execution of the disputed pieces of evidence had in fact been admitted by defendants.

Applying Rule 33, Section 1 of the 1997 Rules of Court, the CA should have rendered judgment on the basis of the evidence submitted
by the petitioner. While the appellate court correctly ruled that "the documentary evidence submitted by the [petitioner] should have
been allowed and appreciated xxx," and that "the petitioner presented quite a number of documentary exhibits xxx enumerated in the
appealed order,"18 we agree with petitioner that the CA had sufficient evidence on record to decide the collection suit. A remand is not
only frowned upon by the Rules, it is also logically unnecessary on the basis of the facts on record.

Due and Demandable Obligation

Petitioner claims that respondents are liable for the whole amount of their debt and the interest thereon, after they defaulted on the
monthly installments.

Respondents, on the other hand, counter that the installments were not yet due and demandable. Petitioner had allegedly allowed them
to apply their promotion services for its financing business as payment of the Promissory Note. This was supposedly evidenced by the
blank space left for the date on which the installments should have commenced. 19 In other words, respondents theorize that the action
for immediate enforcement of their obligation is premature because its fulfillment is dependent on the sole will of the debtor. Hence,
they consider that the proper court should first fix a period for payment, pursuant to Articles 1180 and 1197 of the Civil Code.

This contention is untenable. The act of leaving blank the due date of the first installment did not necessarily mean that the debtors
were allowed to pay as and when they could. If this was the intention of the parties, they should have so indicated in the Promissory
Note. However, it did not reflect any such intention.

On the contrary, the Note expressly stipulated that the debt should be amortized monthly in installments of ₱11,579 for twelve
consecutive months. While the specific date on which each installment would be due was left blank, the Note clearly provided that each
installment should be payable each month.

Furthermore, it also provided for an acceleration clause and a late payment penalty, both of which showed the intention of the parties
that the installments should be paid at a definite date. Had they intended that the debtors could pay as and when they could, there
would have been no need for these two clauses.

Verily, the contemporaneous and subsequent acts of the parties manifest their intention and knowledge that the monthly installments
would be due and demandable each month.20 In this case, the conclusion that the installments had already became due and
demandable is bolstered by the fact that respondents started paying installments on the Promissory Note, even if the checks were
dishonored by their drawee bank. We are convinced neither by their avowals that the obligation had not yet matured nor by their claim
that a period for payment should be fixed by a court.

Convincingly, petitioner has established not only a cause of action against the respondents, but also a due and demandable obligation.
The obligation of the respondents had matured and they clearly defaulted when their checks bounced. Per the acceleration clause, the

62
whole debt became due one month (April 2, 1991) after the date of the Note because the check representing their first installment
bounced.

As for the disputed documents submitted by the petitioner, the CA ruling in favor of their admissibility, which was not challenged by the
respondents, stands. A party who did not appeal cannot obtain affirmative relief other than that granted in the appealed decision. 21

It should be stressed that respondents do not contest the amount of the principal obligation.1âwphi1 Their liability as expressly stated in
the Promissory Note and found by the CA is "₱13[8],948.00 22 which is payable in twelve (12) installments at ₱11,579.00 a month for
twelve (12) consecutive months." As correctly found by the CA, the "ambiguity" in the Promissory Note is clearly attributable to human
error.23

Petitioner, in its Complaint, prayed for "14% interest per annum from May 6, 1993 until fully paid." We disagree.1âwphi1 The Note
already stipulated a late payment penalty of 2.5 percent monthly to be added to each unpaid installment until fully paid. Payment of
interest was not expressly stipulated in the Note. Thus, it should be deemed included in such penalty.

In addition, the Note also provided that the debtors would be liable for attorney’s fees equivalent to 25 percent of the amount due in
case a legal action was instituted and 10 percent of the same amount as liquidated damages. Liquidated damages, however, should no
longer be imposed for being unconscionable.24 Such damages should also be deemed included in the 2.5 percent monthly penalty.
Furthermore, we hold that petitioner is entitled to attorney’s fees, but only in a sum equal to 10 percent of the amount due which we
deem reasonable under the proven facts.25

The Court deems it improper to discuss respondents' claim for moral and other damages. Not having appealed the CA Decision, they
are not entitled to affirmative relief, as already explained earlier. 26

WHEREFORE, the Petition is GRANTED. The appealed Decision is MODIFIED in that the remand is SET ASIDE and respondents are
ordered TO PAY ₱138,948, plus 2.5 percent penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent of the
amount due as attorney’s fees. No costs.

SO ORDERED.

63
GMA Network vs. Central CATV July 18, 2014

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 176694 July 18, 2014

GMA NETWORK, INC., Petitioner,

vs.
CENTRAL CATV, INC., Respondent.

DECISION

BRION, J.:

We resolve the challenge, under the standards of a Rule 45 petition for review, to the decision 1 dated November 14, 2006 and the
resolution2 dated February 15, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 93439 affirming the order 3 dated December 10,
2004 of the National Telecommunications Commission (NTC)4 that dismissed the complaint of petitioner GMA Network, Inc. based on
the motion to dismiss by way of demurrer to evidence of respondent Central CATV, Inc.

THE FACTUAL ANTECEDENTS

Sometime in February 2000, the petitioner, together with the Kapisanan ng mga Brodkaster ng Pilipinas, Audiovisual Communicators,
Incorporated, Filipinas Broadcasting Network and Rajah Broadcasting Network, Inc. (complainants), filed with the NTC a complaint
against the respondent to stop it from soliciting and showing advertisements in its cable television (CATV)system, pursuant to Section 2
of Executive Order (EO) No. 205.5 Under this provision, a grantee’s authority to operate a CATV system shall not infringe on the
television and broadcast markets. The petitioner alleged that the phrase "television and broadcast markets" includes the commercial or
advertising market.

In its answer, the respondent admitted the airing of commercial advertisement on its CATV network but alleged that Section 3 of EO
No. 436, which was issued by former President Fidel V. Ramos on September 9, 1997, expressly allowed CATVproviders to carry
advertisements and other similar paid segments provided there is consent from their program providers. 6

After the petitioner presented and offered its evidence, the respondent filed a motion to dismiss by demurrer toevidence claiming that
the evidence presented by the complainants failed toshow how the respondent’s acts of soliciting and/or showing advertisements
infringed upon the television and broadcast market.7

THE NTC RULING

The NTC granted the respondent’s demurrer to evidence and dismissed the complaint. It ruled that since EO No. 205 does not define
"infringement," EO No. 436 merely clarified or filled-in the details of the term to mean that the CATV operatorsmay show
advertisements, provided that they secure the consent of their program providers. In the present case, the documents attached to the
respondent’s demurrer to evidence showed that its program providers have given such consent. Although the respondent did not
formally offer these documents as evidence, the NTC could still consider them since they formed part of the records and the NTC is not
bound by the strict application of technical rules.8

The NTC added that since the insertion of advertisements under EO No. 436 would result in the alteration ordeletion of the broadcast
signals of the consenting television broadcast station, its ruling necessarily results in the amendment of these provisions.The second
paragraph9 of Section 3 of EO No. 436 is deemed to amend the previous provisional authority issued to the respondent, as well as
Sections 6.2.1 and 6.4 of the NTC’s Memorandum Circular (MC) 4-08-88. Sections 6.2.1 and 6.4 require the CATV operators within the
Grade A or B contours of a television broadcast station to carry the latter’s television broadcast signals in full, without alteration or
deletion. This is known as the "must-carry-rule."10

With the denial of its motion for reconsideration,11 the petitioner went to the CA, alleging that the NTC committed grave procedural and
substantive errors in dismissing the complaint.

THE CA RULING

64
The CA upheld the NTC ruling. The NTC did not err in considering the respondent’s pieces of evidence thatwere attached to its
demurrer to evidence since administrative agencies are not bound by the technical rules of procedure. 12

Due to the failure of EO No. 205 to define what constitutes "infringement," EO No. 436 merely filled-in the details without expanding,
modifying and/or repealing EO No. 205.13 The NTC was also correct in modifying or amending the must-carryrule under MC 4-08-88 as
the NTC merely implemented the directive of EO No. 436.14

Hence, this present petition for review on certiorari.

THE PARTIES’ ARGUMENTS

On the procedural issues, the petitioner argues that the NTC erred in: (i) granting the demurrer to evidence based only on the
insufficiency of the complaint and not on the insufficiency of evidence; and (ii) considering the evidence of the respondent in its
demurrer to evidence on top of the petitioner’s evidence. 15

On the substantive issue,the petitioner alleges that the NTC gravely erred in failing to differentiate between EO No. 205, which is a law,
and EO No. 436 which is merely an executive issuance. An executive issuance cannot make a qualification on the clearprohibition in
the law, EO No. 205.16 In allowing infringement under certain conditions, EO No. 436 overturned EO No. 205 which prohibits, without
qualification, the infringement on the markets of free TV networks, such as the petitioner. In doing so, the Executive arrogated upon
itself the power of subordinate legislation that Congress has explicitly reserved to the NTC. 17

Too, in granting the demurrer toevidence, the NTC effectively revised EO No. 205, contrary to the basic rule that in the exercise of
quasilegislative power, the delegate cannot supplant and modify its enabling statute. 18

On the other hand, the respondent agrees with the CA that the NTC properly considered the certifications attached to the respondent’s
demurrer to evidence19 since the petitioner had the chance to peruse these certifications in the course of the presentation of its
evidence.

EO No. 205 does not expressly prohibit CATV operators from soliciting and showing advertisements. The non-infringement limitation
under Section 2 thereof, although couched in general terms, should not be interpreted in such a way as to deprive CATV operatorsof
legitimate business opportunities.20 Also, EO No. 436, being an executive issuance and a valid administrative legislation, has the force
and effect of a law and cannot be subject to collateral attack. 21

THE ISSUES

1) Whether the CA erred in affirming the order of the NTC which granted the respondent’s motion to dismiss by demurrer to
evidence.

2) Whether the respondent is prohibited from showing advertisements under Section 2 of EO No. 205, in relation toparagraph
2, Section 3 of EO No. 436.

THE COURT’S RULING

We deny the petition for lack of merit.

Procedural Issues

The remedy of a demurrer to evidence is applicable in the proceedings before the NTC, pursuant to Section 1, Rule 9, Part 9 of its
Rules of Practice and Procedure which provides for the suppletory application of the Rules of Court.

Rule 3322 of the Rules of Court provides for the rule on demurrer to evidence:

Section 1. Demurrer to evidence. — After the plaintiff has completed the presentation of his evidence, the defendant may move for
dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied he shall have the
right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have
waivedthe right to present evidence.

In other words, the issue to be resolved in a motion to dismiss based on a demurrer to evidence is whether the plaintiff is entitled to the
relief prayed for based on the facts and the law.23 In Casent Realty Development Corp. v. Philbanking Corp.,24 the Court explained that
these facts and law do not include the defendant’s evidence:

65
What should be resolved in a motion to dismiss based on a demurrer to evidence is whether the plaintiff is entitled to the relief based on
the facts and the law. The evidence contemplated by the rule on demurrer is that which pertains to the merits of the case, excluding
technical aspects such as capacity to sue. However, the plaintiff’s evidence should not be the only basis in resolving a demurrer to
evidence. The "facts" referred toin Section 8 should include all the means sanctioned by the Rules of Court in ascertaining matters in
judicial proceedings. These include judicial admissions, mattersof judicial notice, stipulations made during the pre-trial and trial,
admissions, and presumptions, the only exclusion being the defendant’s evidence.

In granting the demurrer to evidence in the present case, the NTC considered both the insufficiency of the allegations in the complaint
and the insufficiency of the complainants’ evidence in light of its interpretation of the provisions of EO No. 205 and EO No. 436. The
NTC ruled that the complainants, including the petitioner, failed to proveby substantial evidence that the respondent aired the subject
advertisements without the consent of its program providers, asrequired under EO No. 436. The NTC, therefore, has issued the
assailed order upon a consideration of the applicable laws and the evidence of the petitioner. On this score, the grant of the demurrer
suffers no infirmity.

However, the NTC further extended itsconsideration of the issue to the respondent’s pieces of evidence thatwere attached to its
demurrer to evidence. On this score,we agree with the petitioner that the NTC erred.

Rule 33 of the Rules of Court, as explained in our ruling in Casent, proscribes the court or the tribunal from considering the defendant’s
evidence in the resolution of a motion to dismiss based on a demurrer to evidence.

While an administrative agency is not strictly bound by technical rules of procedure in the conduct of its administrative proceedings, the
relaxation of the rules should not result in violating fundamental evidentiary rules, including due process. 25 In the present case, the NTC
proceeded against the very nature of the remedy of demurrer to evidence when it considered the respondent’s evidence, specifically
the certifications attached to the respondent’s demurrer to evidence. Despite the petitioner’s objections, 26 the NTC disregarded the rule
on demurrer by allowing the submission of the respondent’s evidence while depriving the petitioner of the opportunity to question,
examine or refute the submitted documents.27

That the petitioner had the chance to peruse these documents is of no moment. In a demurrer to evidence, the respondent’s evidence
should not have been considered in the first place.As the NTC optedto consider the respondent’s evidence, it should not have resolved
the case through the remedy of demurrer but instead allowed the respondent to formally present its evidence where the petitioner could
properly raise its objections. Clearly, there was a violation of the petitioner’s due process right.

Substantive Issues

The primary issue in the present case is whether the respondent, as a CATV operator, could show commercial advertisements in its
CATV networks. The petitioner anchors its claim on Section 2 28 of EO No. 205 while the respondent supports its defense from
paragraph 2, Section 329 of EO No. 436. The Court finds, however, that both the NTC and the CA failed to correctly appreciate EO No.
205 and EO No. 436 in resolving the present case.

1. EO No. 205 is a law while EONo. 436 is an executive issuance

For one, we agree with the petitioner that the NTC and the CA proceeded from the wrong premise that both EO No. 205 and EO No.
436 are statutes. This is a critical point to consider since the NTC and the CA rulings on the merits would have no leg to stand on had
they properly appreciated the nature of these two executive issuances.

EO No. 205 was issued by President Corazon Aquino on June 30, 1987. Under Section 6, Article 18 ofthe 1987 Constitution, the
incumbent President shall continue to exerciselegislative powers until the first Congress is convened. The Congress was convened only
on July 27, 1987.30 Therefore, at the time of the issuance of EO No. 205, President Aquino was still exercising legislative powers. In
fact, the intent to regard EO No. 205 as a law is clear under Section 7 thereof which provides for the repeal or modification of all
inconsistent laws,orders, issuances and rules and regulations, or parts thereof.

EO No. 436, on the other hand, is an executive order which was issued by President Ramos in the exercise purely of his executive
power. In short, it is not a law.

The NTC and the CA, however, failed to consider the distinction between the two executive orders. In considering EO No. 436 as a law,
the NTC and the CA hastily concluded thatit has validly qualified Section 2 of EO No. 205 and has amended the provisionsof MC 4-08-
88. Following this wrong premise, the NTC and the CA ruled that the respondent has a right to show advertisements under Section 3 of
EO No. 436.

The incorrect interpretation by the NTC and the CA led to the erroneous resolution of the petitioner’s complaint and appeal. While the
respondent indeed has the right to solicit and show advertisements, as will be discussed below, the NTC and the CA incorrectly
interpreted and appreciated the relevant provisions of the law and rules. We seek to correct this error in the present case by ruling that

66
MC 4-08-88 alone sufficiently resolves the issue on whether the respondent could show advertisements in its CATV networks. In other
words, EONo. 436 is not material in resolving the substantive issue before us.

2. The CATV operators are not prohibited from showing advertisements under EO No. 205 and its implementing rules and regulations,
MC 4-08-88

Section 631 of EO No. 205 expressly and unequivocally vests with the NTC the delegated legislative authority to issue its implementing
rules and regulations.32

Following this authority, the NTC has issued the implementing rules and regulations of EO No. 205 through MC 4-08-88. Its whereas
clause provides that it was issued pursuant to Act No. 384633 and EO No. 205 which granted the NTC the authority to set down rules
and regulations on CATV systems.

MC 4-08-88 has sufficiently filled-inthe details of Section 2 of EO No. 205, specifically the contentious provisothat "the authority to
operate [CATV] shall not infringe on the television and broadcast markets."

First,Section 6.1 of MC 04-08-88 clarifies what the phrase "television and broadcast markets" covers, when it identified the major
television markets as follows:

SECTION 6 CARRIAGE OF TELEVISION

BROADCAST SIGNALS

6.1 Major Television Markets

For purposes of the cable television rules, the following is a list of the major television markets:

a. Naga

b. Legaspi

c. Metro Manila

d. Metro Cebu

e. Bacolod

f. Iloilo

g. Davao

h. Cagayan de Oro

i. Zamboanga34

It is clear from this provision that the phrase "television market" connotes "audience" or "viewers" in geographic areas and not
the commercial or advertising marketas what the petitioner claims. Second, the kind of infringement prohibited by Section 2 of
EO No. 205 was particularly clarified under Sections 6.2, 6.2.1, 6.4(a)(1) and 6.4(b) of MC 04-08-88, which embody the "must-
carry rule." This rule mandates that the local TV broadcast signals of an authorized TV broadcast station, such as the
petitioner, should be carried in fullby the CATV operator, without alteration or deletion. These sections provide as follows:

6.2 Mandatory Coverage

6.2.1 A cable TV system operating in a community which is within the Grade A or Grade B contours of an authorized TV
broadcast station or stations mustcarry the TV signals of these stations.

6.4 Manner of Carriage

a. Where a television broadcast signal is required to be carried by a community unit, pursuant tothe rules in this sub-part:

67
 1. The signal shall be carried without material degradation in quality(within the limitations imposed by the technical state of the
art), and where applicable, in accordance with the technical standards[.]

xxxx

b. Where a television broadcast signal is carried by a community unit, pursuant to the rules in the CATV standards the
program broadcast shall be carried in full, without deletion or alternation of anyexcept as required by this part. 35

An understanding of the "must-carryrule" would show how it carries out the directive of Section 2 of EONo. 205 that the CATV operation
must not infringe upon the broadcast television markets, specifically the audience market. In ABS-CBN Broadcasting Corporation v.
Philippine Multi-Media System, Inc.,36 the Court clarified the "must-carry rule" and its interplay in the free-signal TV, such as the
petitioner, and the CATV operators, such as the respondent, and to quote:

Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for free. Other broadcasting
organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can likewise be accessed for free. No payment is
required to view the said channels because these broadcasting networks do not generate revenue from subscription from their viewers
but from airtime revenue from contracts with commercial advertisers and producers, as well as from direct sales.

In contrast, cable and DTH television earn revenues from viewer subscription.In the case of PMSI, it offers its customers premium paid
channels from content providers like Star Movies, Star World, Jack TV, and AXN, among others, thus allowing its customers to go
beyond the limits of "Free TV and Cable TV." It does not advertise itself as a local channel carrier because these local channels can be
viewed with or without DTH television.

Relevantly, PMSI’s carriage of Channels 2 and 23 is material in arriving at the ratings and audience share of ABS-CBN and its
programs. These ratings help commercial advertisers and producers decide whether to buy airtime from the network. Thus, the must-
carry rule is actually advantageous to the broadcasting networks because it provides them with increased viewership which attracts
commercial advertisers and producers.

On the other hand, the carriage of free-to-air signals imposes a burden to cable and DTH television providerssuch as PMSI. PMSI uses
none of ABS-CBN’s resourcesor equipment and carries the signals and shoulders the costs without any recourse of charging.
Moreover, such carriage of signals takes up channel space which can otherwise be utilized for other premium paid channels.

Contrary to the petitioner’s claim,EO No. 205 was not issued solely for the benefit of the free-signal TV networks. In fact, it was issued
to end the monopoly of Sining Makulay, Inc. which was granted by then President Ferdinand Marcos an exclusive franchise, through
Presidential Decree (PD) No. 1512, to operate CATV system anywhere within the Philippines. 37 EO No. 205 encouraged the growth of
CATV operation when it expressly repealed PD No. 151238 thus encouraging competition in the CATV industry. As stated in the
whereas clause of EO No. 205, the primary purpose of the law in regulating the CATV operations was for the protection of the public
and the promotion of the general welfare.

MC 4-08-88 mirrored the legislative intent of EO No. 205 and acknowledged the importance of the CATV operations in the promotion of
the general welfare. The circular provides in its whereas clause that the CATV has the ability to offer additional programming and to
carry much improved broadcast signals in the remote areas, thereby enriching the lives of the rest of the population through the
dissemination of social, economic and educational information,and cultural programs.

Unavoidably, however, the improved broadcast signals that CATV offers may infringe or encroach upon the audience or viewer market
of the free-signal TV. This is so because the latter’s signal may not reach the remote areas or reach them with poorsignal quality. To
foreclose this possibility and protect the free-TV market (audience market), the must-carry rule was adopted to level the playing field.
With the must-carry rule in place, the CATV networks are required to carry and show in fullthe freelocal TV’s programs, including
advertisements, without alteration or deletion. This, in turn, benefits the public who would have a wide-range of choices of programs or
broadcast to watch. This also benefits the free-TV signal as their broadcasts are carried under the CATV’s much-improved broadcast
signals thus expanding their viewer’s share.

In view of the discussion above, the Court finds that the quoted sections of MC 4-08-88, i.e., 6.2, 6.2.1, 6.4(a)(1) and 6.4(b) which
embody the "must-carry rule," are the governing rules in the present case. These provisions sufficiently and fairly implement the intent
of Section 2 of EO No. 205 to protect the broadcast television market vis-à-visthe CATV system. For emphasis, under these rules, the
phrase "television and broadcast markets" means viewers oraudience market and not commercial advertisement market as claimed
bythe petitioner. Therefore, the respondent’s act of showing advertisements does not constitute an infringement of the "television and
broadcast markets" under Section 2 of EO No. 205.

The implementing rules and regulations embodied in this circular, whose validity is undisputed by the parties, "partake of the nature of a
statute and are just as binding as if they have been written in the statute itself. As such, they have the force and effect of law and enjoy
the presumption of constitutionality and legality until they are set aside with finality in an appropriate case by a competent court." 39

68
The Court further finds that the NTC also erred in ruling that EO No. 436 has deemed to amend Sections 6.2.1 and 6.4 of MC4-08-88.
In arriving at this ruling, the NTC proceeded from the wrong interpretation of EO No. 436 as a law, resulting in the consequenterroneous
conclusion that EO No. 436 could amend MC 4-08-88. The Court cannot uphold these patently incorrect findings of the NTC even
though it is a specialized implementing agency.

Since the right of the respondent to show advertisements is clearly supported by EO No. 205 and MC 4-08-88, the Court finds no
necessity to pass upon the issue on the validity of EO No. 436, specifically Section 3 thereof.

WHEREFORE, we DENY the petition and, accordingly, AFFIRM the decision and resolution of the Court of Appeals dated November
14, 2006 and February 15, 2007, respectively. Costs against petitioner GMA Network, Inc.

SO ORDERED.

69
Katigbak v. Sandiganbayan, G.R. No. 140183, Jul. 10, 2003

G.R. No. 140183 July 10, 2003

TEODORO K. KATIGBAK and BIENVENIDO E. MERELOS, petitioners,

vs.
THE SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.

CORONA, J.:

The instant petition for certiorari and prohibition under Rule 65 of the Rules of Court seeks to annul and set aside the Resolution 1 dated
April 7, 1999 of the Sandiganbayan's Second Division, in Criminal Case No. 22647 denying petitioners' motion to dismiss the case
against them on demurrer to evidence and the Resolution2 dated August 9, 1999 which denied their motion for reconsideration.

The antecedent facts show that, on July 18, 1990, the National Housing Authority (NHA) entered into a contract for the land
development of the Pahanocoy Sites and Services, Phase I, in Bacolod City with Arceo Cruz of A.C. Cruz Construction. After the
contract was confirmed by the NHA Board of Directors, the work commenced on August 1, 1990. Before the project could be
completed, however, the NHA rescinded the contract on August 29, 1991 and engaged the services of Jose Cruz of Triad Construction
and Development Corporation for the unfinished portion thereof.

Consequently, Arceo Cruz lodged a complaint with the Office of the Ombudsman. After preliminary investigation, an information 3 was
filed with the Sandiganbayan on May 3, 1995, docketed as Criminal Case No. 22647, charging the petitioners and their co-accused with
the crime of violation of Section 3, paragraph (e) of RA 3019, 4 as amended. Specifically, the petitioners and their co-accused were
indicted for having allegedly conspired, through evident bad faith and manifest partiality, in unilaterally rescinding the contract for land
development with the private complainant, Arceo Cruz, and subsequently awarding the same, without public bidding and at an
exorbitant rate, to private respondent, Jose Cruz, thereby granting unwarranted benefits to said private respondent while causing
damage and undue injury to the government and the private respondent.

On March 20, 1996, the information in Criminal Case No. 22647 was amended to read as follows:

The undersigned Special Prosecution Officers, Office of the Special Prosecutor, hereby accuses ROBERT ANTHONY P.
BALAO, TEODORO K. KATIGBAK, BIENVENIDO MERELOS, HARRY PASIMIO, JOEL LUSTRIA and JOSE CRUZ, of
violation of Section 3 (e), R.A. 3019 as amended, committed as follows:

That on or about March 16, 1992, and for sometime prior or subsequent thereto, in Bacolod City, Philippines, and within the
jurisdiction of this Honorable Court, above-named accused ROBERT ANTHONY P. BALAO, General Manager and Member of
the Board of Directors; TEODORO K. KATIGBAK, Chairman, Board of Directors and the following members of the Board of
Directors, namely: BIENVENIDO MERELOS, HARRY PASIMIO, and JOEL LUSTRIA, all of the National Housing Authority
(NHA) all public officers, while in the performance of their official functions, committing the offense in relation to their office,
and conspiring and confederating with each other and with accused JOSE CRUZ, General Manager of the Triad Construction
and Development Corporation, did then and there wilfully, unlawfully, criminally and through evident bad faith and manifest
partiality, unilaterally rescind the contract for the land development of Pahanocoy Sites and Services Project, Phase I of (sic)
Bacolod City, an Infrastructure Development Project of the National Housing Authority which was awarded to A.C. CRUZ
CONSTRUCTION and thereafter awarded the contract for the completion of the remaining civil works in the said NHA project
to TRIAD CONSTRUCTION AND DEVELOPMENT CORPORATION represented by JOSE CRUZ, without public bidding and
at a contract price of P10,027,970.97 which is much more than the estimated cost of the remaining project work of
P4,963,511.99 to which A.C. CRUZ would have been entitled if the original contract was not rescinded, thereby causing undue
injury to A.C. CRUZ and to the Government.

Contrary to law."5

Upon arraignment, the petitioners and their co-accused, assisted by their counsels, entered the plea of "not guilty" to the charge in the
amended information. Pre-trial was waived by the parties per Order dated March 18, 1997. Thereafter, trial on the merits ensued during
which the prosecution presented four witnesses, namely: Adelino M. Amurillo, Principal Engineer, stationed at the NHA Management
Office on Elliptical Road, Diliman, Quezon City; Felicisimo F. Lazarte, Jr., Department Manager, NHA Regional Projects Department;
Virgilio V. Dacalos, Division Manager, NHA Regional Projects Department; and private complainant Arceo C. Cruz. The prosecution
rested its case after the admission of its Exhibits "A," "B," "C," "D," "E," "F," "G," "H," "H-1," "J," "K," "L," "M," "N," "O," "Q," "R" and "S"
with submarkings. The descriptions and the purposes for which each of the said prosecution exhibits were offered in evidence were
specifically stated in the written Formal Offer of Exhibits6 dated September 22, 1997 quoted hereunder in full:

1) Exhibits "A," "B" and "C" are the Notice of Award dated July 5, 1990, the Contract For Infrastructure Development of
Pahanocoy Sites and Services Project, Phase I, Bacolod City and the Notice to Proceed dated July 18, 1990, respectively,
signed by Arceo C. Cruz as contractor and Monico V. Jacob as General Manager of National Housing Authority (NHA),

70
Quezon City. The purposes for which these exhibits are offered is to prove that the private offended party and the NHA have
entered into a contract whereby the latter shall pay the former the amount of P7,686,507.55 to develop road works, drainage,
and water works for a project of NHA located at (sic) Bacolod City and known as Pahanocoy Sites and Services Project,
Phase I, Bacolod City.

2) Exhibit "D" is a Memorandum dated August 1, 1989 addressed to All Concerned Departments/Projects, issued by Monico V.
Jacob, the subject matter of which was the establishment of an "express lane" to expedite the payment to contractors' claims
for accomplished work at the regional projects area as in this case. That the salient factor in this memorandum is found in
paragraph 2 of page 2 thereof which clearly limited the period for approving and signing by the (NHA) General Manager of
claims for payment to only one (1) working day from the time the claims of a contractor is submitted for approval and
signature.

The attached Department Order No. 99 Series of 1991 dated April 19, 1991 issued by the Secretary of Department of Public
Works and Highways, JOSE P. DE JESUS to Exh. D (page 576 of Volume II the record of the case) is also offered to show
that contractors were vested with the right to suspend their work operations if their claim for payment is not made within the
period. Said Department Order declares in essence that, and we quote for the easy reference of the Honorable Court:

'the contractor will have an option to suspend the work if there is no Government response within fifteen (15) calendar
days from the date of the written notice from the contractor.'

In addition, the purpose of this exhibit and its annex is to show that accused ROBERT ANTHONY P. BALAO grossly violated
the guideline set up by his predecessor Monico V. Jacob. On the other hand this exhibit is offered to show the good faith and
sincerity of the private offended party. Mr. Arceo Cruz, instead of availing of his right to suspend his work because he was not
paid for what he had accomplished went on to complete his work on the project until illegally stopped and forcibly ejected by
the accused.

That lastly, the said exhibit and its annex are also offered to show that inspite of compliance of the private offended party of
the conditions put up by the NHA and the Department of Public Works and Services the approval and signing of payment was
illegally, fraudulently and immorally withheld by the accused Balao. This illegal act of accused Balao continued even after his
own field officers had already signed and recommended the payment of the private offended party's claim for payment as
specified by the NHA's own guideline.

3) Exhibit "E" is the memorandum addressed to accused Balao as General Manager of NHA dated February 19, 1992 by field
officers. The subject of this memorandum is the recommendation for the approval and payment of the private offended party(s)
claim for the latter's accomplished work described in his fourth billing in the amount of P1,554,379.55 (NET) which was also
again recommended by accused(s) own field officer in the person of FELICISIMO E. LAZARTE, JR., Manager, Regional
Projects Department.

Exhibit "F" is the Abstract Of the Physical Accomplishment which evidences the work accomplished by the private offended
party worth P2,888,918.29 (GROSS) as of January 20, 1992 as confirmed to (sic) by all field officers of the NHA namely:
NOEL A. LOBRIDO, NHA Supervising Engineer, VIRGILIO V. DACALOS, Division Manager Visayas, and FELICISIMO E.
LAZARTE, JR., Regional Project Department Manager.

Exhibit "G" is the Summary Of Payment Estimate accomplished by the NHA itself, through its Division Manager, Visayas
Division and Manager of the Regional Project Department.

These exhibits are all offered to show that the amount of P2,888,918.30 (GROSS) being claimed by the private offended party
of (sic) his accomplished work from October 1, 1991 to January 20, 1992 was due, justified, and complete in all the necessary
papers needed for its processing and payment.

As it will be later shown in 2nd paragraph, page one of EXHIBIT "E" the NHA field officers in their memorandum to accused
Balao clearly and specifically declared, state and are quote(d) for this Honorable Court's ready reference:

'Attached as support are pertinent documents and including detailed analysis.'

4) Exhibit "H" is the Voucher of the NHA dated January 27, 1992 which was already processed by the NHA own personnel in
the person (of) Ofelia A. Capistrano upon request of Virgilio Dacalos (Division Manager-Visayas Division) and certified by
Felicisimo E. Lazarte, Jr., Manager RPD setting aside for (sic) the gross amount of P2,888,918.29, from which the private
offended party is claiming as payment the NET amount of P1,108,288.10 and Exhibit "I" is another Disbursement Voucher by
the same NHA field officers showing a billing of the same gross amount of P2,888,918.29 for which the private offended party
has a net claim of P466,091.49 or a total NET claim of P1,674,379.59 for the two (2) vouchers, the purpose of which is to
show that the claim of Mr. Arceo C. Cruz the private complainant of this case had already been prepared by all the
departments of the NHA concerned but for reasons only known to him was illegally, immorally and maliciously withheld by the
accused Balao.
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5) Exhibit "H-1" is a letter dated August 29, 1991 of accused Balao addressed to the private offended party informing the latter
that his contract with the NHA is being rescinded for the reasons that:

a) private offended party had allegedly unilaterally suspended his work on the project.

b) that the work have suffered negative slippage or unaccomplished work of 59.11 %.

c) That the contract has expired as of July 1, 1991.

That the said exhibit is being offered to show the malice and bad faith of accused Balao whose reasons for rescinding the
contract between the private offended party and the NHA are completely contradictory to the finding of his own field personnel.

a) As above mentioned private offended party never suspended his work operation.

b) The work of the private offended party never have (sic) a negative slippage of 59.11%. But even if granting, though
not admitting that there was slippage the same could not be attributable to the private offended party and could easily
be corrected as Exhibits "E," "F," "G," "H" and "H-1" show remedies were already being taken.

This baseless conclusion is aggravated by the fact that accused Balao never actually personally conducted his own survey at
the project job sites and therefore has no basis to form his own personal conclusion and ought to have rel(ied) on the written
report of his field officers above-mentioned.

c) That the expiry date of the contract was changed by way of extending the same.

6) Exhibit "J" is the private offended party's letter dated October 17, 1991 to accused Balao as General Manager of NHA
requesting the latter to lift his rescission order of the contract for the reasons stated in the letter. The last paragraph of the last
page of this letter stated that and we quote for the easy reference of the Honorable Court:

'Furthermore in consideration of the actual findings/result of the Inventory Acceptance Committee with a substantial
accomplishment from 01 October 1991 to date, we are requesting for payment so as it will help our cash flow on the
completions of the remaining portion of the project.'

This exhibit is offered for the purpose of showing that the rescission order of accused Balao has no legal nor moral basis and
his continued refusal to release the payment due to the private offended party caused and is causing the government and the
private offended party more damage and prejudice.

7) Exhibit "K" is a letter dated January 29, 1992 sent by the private offended party to the Board of Directors of the NHA
through its Chairman. The purpose of this exhibit is to show that accused Balao(s) act of rescinding the NHA contract with the
private offended party is illegal and therefore cannot be justifiably enforced. As testified to by the private offended party, the
Board Secretary informed him that his letter to the Board cannot be calendared and cannot be taken up by the Board in its
meeting because the Board never rescinded the contract between the private offended party and the NHA. That the act of
rescission of the contract according to the Board Secretary, a certain Mr. De las Alas, was the personal act of accused Balao.

8) Exhibit "L" is a memorandum dated July 14, 1992 by the Management Committee (MANCOM) of the NHA to its General
Manager, accused Balao, recommending for the lifting and the reconsideration of the latter's rescission order of the contract of
the private offended party with the NHA.

We quote the pertinent portion of the memorandum found in the last page thereof for the easy reference of this Honorable
Court:

'Considering the above facts, RPD is recommending that the decision of management rescinding the contract of A.C.
Cruz be reconsidered and he be allowed to bill subject to (sic) the condition that said contractor will complete the
project on or before March 20, 1992 as reflected in the attached revised PERT/CPM.'

Exhibit "M" is the PERT/CPM of the Estimate For The Remaining Works of Barangay Pahanocoy, Bacolod City, Pahanocoy
Sites and Services Project, Phase I, Bacolod City.

Exhibit "N" is the memorandum to accused Balao as Manager from the Executive Services Group.

Exhibit "O" is the Deed of Assignment executed by the private offended party to US Commercial Incorporated, a store selling
construction materials, etc.

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The purpose of (sic) these exhibits (Exhibit "L," "M," "N" and "O") are offered to show that the private offended party had
submitted documents and papers in compliance to the demand of accused Balao and that inspite of this compliance accused
Balao's capricious whims could not be satisfied.

These exhibits are also offered to show the premeditated and malicious scheme of accused Balao to terminate the contract of
the private offended party and to withhold or refuse the latter's claim for payment for reason to be showed (sic) below.7

(10) Exhibit "Q" is the letter of the private offended party to accused Balao, which is offered to show that accused Balao
continuously refused to reconsider his illegal and immoral acts above-described inspite of the acts of good faith of the private
offended party just to satisfy accused Balao(s) whimsical demands and even after the unanimous favorable recommendation
of his own field officers and inspectors. We quote the 2nd paragraph of the letter for the easy referral of this Honorable Court:

'Relative to our letter to the Chairman of the NHA-Board of Directors dated 29 January 1992, we are requesting for a
reconsideration and or lifting of the rescission order issued by your office dated 20 January 1992, however up to this
writing we are informed nothing from your office.'

And also to prove that the private offended party never discontinued nor abandoned the project which is emphasized in his 3rd
paragraph and we quote for the ready reference of the Honorable Court:

'In as much as to (sic) the illegal take over of the project inspite of our continuous operation, we are entitled for (sic)
payment of our physical accomplishment as of 20 January 1992 duly evaluated, signed, concurred and
recommended for payment by the Regional Projects Department.'

And lastly, also to prove that all the required documents demanded from the private offended party had been satisfied and
submitted. We quote the 4th paragraph of the said letter again for the ready reference of the Honorable Court:

'Hereunder are the following annexes for ready references:

Annex "A" — Letter to the Board dated 29 January 1992.

Annex "B" — Abstract of Physical Accomplishment dated 20 January 1992.

Annex "C" — Recommendation by RPD for Fourth (4th) Partial Payment dated 19 February 1992.

Annex "D" — Vouchers Signed by RPD.'

(11) Exhibit "R" which is the letter of accused Balao to the private offended party Arceo C. Cruz dated July 6, 1992 informing
the latter that the NHA Board of Directors had approved the alleged request of the latter for mutual termination of his contract
with the NHA and that the latter has as of date of the termination of his contract 'has still an acceptable accomplishment work
of P573,107.16.'

The above exhibit is respectfully offer(ed) to show the capacity of accused Balao to resort to a blatant distortion of facts in
order to achieve his malicious designs for the reason that the private offended party could never had (sic) agreed to any form
of mutual agreement to have his contract terminated. On the contrary, this Honorable Court will note that the private offended
party was fighting all the way to have the rescission or termination of his contract reconsidered or lifted.

This exhibit is also offered to show accused Balao(s) capacity to fabricate fictitious facts just to succeed in his illegal purpose
as shown in this case, that he was able to secure the approval of the NHA Board of his a (sic) action of terminating the private
offended party's contract by misrepresenting to the Board that the termination was with the consent of the private offended
party when in fact he knew this assertion to be a complete blatant misrepresentation.

The last paragraph of Exh. "R" is also offered to show the damage and prejudice accused Balao had inflicted on the
government and the private offended party as he paid to his co-accused, the late Jose M. Cruz, his selected and preferred
contractor over the offended party the amount of P573,170.16 which he himself have (sic) already acknowledged is due and
payable to the private offended party.

(12) Exhibit "S" is the letter of (sic) Notice To Proceed addressed to the late Jose M. Cruz, as the contractor appointed by
accused Balao to take over the completion of the remaining works of (sic) the Development of Pahanocoy Sites and Services
Project, including that which had already been accomplished by the private offended party, as sent by accused Balao together
with its annex which is a summary of work description which Jose M. Cruz submitted as the new contractor of the remaining
work to be done in the project for the amount of P9,554.837.22.

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 The purpose of this exhibit is to show the reason why accused Balao had the contract of Mr. Arceo C. Cruz illegally
rescinded/terminated . . . and that is to favor another contractor in the person of the late Jose Cruz.

This exhibit and its annex is also offered to prove that accused Balao was able to surreptitiously and illegally enter into a
contract with another contractor, Jose Cruz, to have the remaining work on the Pahanocoy Sites and Services Project, Phase
I, Bacolod City paying the latter P4,591,325.30 more than the original contractor, herein private offended party, Arceo C. Cruz,
would have been paid had he been allowed to finish the project for the amount of P4,963,511.99, causing damage to the
private offended party by refusing to pay him for the work which he had already accomplished in the amount of P2,022.242.80
and deprived him of the opportunity to finish his work with the NHA for which he should have been paid for two (2) million
pesos making a total damage of P4,963,511.99 and in addition causing also the government to pay P5,064,459 more than
what it could (sic) have paid to the private offended party if his contract with the NHA have (sic) not been cancelled and
rescinded by accused Balao.

That in the above mentioned exhibits together with the testimony of the private offended party Arceo C. Cruz and with his
witnesses, Virgilio V. Dacalos, Felicisimo F. Lazarte, Jr., and Adelino Amurillo the prosecution respectfully submit this case for
the resolution of the Honorable Court.

On January 12, 1998, the petitioners, through their respective counsels and with prior leave of court, jointly filed a Demurrer to
Evidence8 dated January 9, 1998. Petitioners' demurrer to evidence was adopted by their co-accused Joel Lustria. For their part,
accused Harry Pasimio and Robert Anthony Balao filed their own separate Demurrer to Evidence dated January 12, 1998 and March 5,
1998, respectively.

The prosecution filed a consolidated Opposition to the Demurrer to Evidence 9 dated December 9, 1998.

On April 13, 1999, the Sandiganbayan promulgated the questioned Resolution 10 dated April 7, 1999 denying the demurrer to evidence
of all the accused.

On May 10, 1999, herein petitioners filed a joint motion for reconsideration 11 which was denied by the Sandiganbayan in its
Resolution12 dated August 9, 1999.

Undaunted, petitioners Teodoro Katigbak and Bienvenido Merelos filed the instant petition for certiorari and prohibition 13 assailing the
questioned resolutions of the Sandiganbayan on the following grounds:

THE SANDIGANBAYAN GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR WANT OF JURISDICTION WHEN IT
DENIED PETITIONERS' DEMURRER TO EVIDENCE AND THEIR MOTION FOR RECONSIDERATION, CONSIDERING THAT
NONE OF THE PROSECUTION'S EVIDENCE, BOTH DOCUMENTARY AND TESTIMONIAL, INCRIMINATES PETITIONERS AS
DEMONSTRATED IN THEIR SAID DEMURRER TO EVIDENCE AND SAID RESOLUTIONS DO NOT CITE ANY INCRIMINATING
EVIDENCE AGAINST THEM AND EVEN HOLD THEM CRIMINALLY LIABLE ON MERE BELIEF AND FOR AN OFFENSE NOT
CHARGED IN THE INFORMATION.

II

SAID RESOLUTIONS DEPRIVED HEREIN PETITIONERS OF DUE PROCESS OF LAW, CONSIDERING THAT THE FINDINGS
THEREIN ARE NOT SUPPORTED BY EVIDENCE AND CONTAIN NO EXPLANATIONS OR REASONS THEREFOR.

Petitioners claim, in essence, that respondent court gravely abused its discretion when it denied their motion to dismiss the case
against them on demurrer to evidence despite the fact that the prosecution failed to establish, either by testimonial or documentary
evidence, their participation in the alleged conspiracy to unilaterally rescind the NHA contract for land development with private
complainant Arceo Cruz. The letter14 dated August 29, 1991 rescinding the contract with the private complainant did not show the
participation or concurrence of the petitioners inasmuch as the same was signed by accused Robert P. Balao alone, in his capacity as
general manager of the NHA. The subsequent letter15 of accused Balao dated July 6, 1992 informing private complainant Cruz of the
"approval" by the NHA Board of Directors of his alleged "request for mutual termination" of the subject contract, among other things,
only showed that the petitioners could not have earlier approved the rescission of the said contract which was entered into by the
parties as early as August 29, 1991. In fact, the purported appeal 16 filed by the private complainant never reached the NHA Board for its
cognizance for the reason that, as testified to by the private complainant himself, the NHA Board Secretary, a certain Mr. de las Alas,
did not include the same in its (Board) agenda. Being actually in the nature of a motion for reconsideration, the same should have been
filed with the office of the NHA General Manager, herein accused Robert Balao. Private complainant even admitted during the
trial17 that he did not include the petitioners, and the other members of the NHA Board of Directors for that matter, in his complaint
lodged with the Office of the Ombudsman against accused Balao.

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The subsequent award of the contract for the completion of the unfinished portion of the land development project to Triad Construction
and Development Corporation, Exhibit "S" of the prosecution or the Notice to Proceed dated March 16, 1992, did not disclose in any
way petitioners' participation therein. On the contrary, the testimony of the private complainant revealed that it was accused Robert
Balao, general manager of the NHA, who awarded the subject contract to the Triad Construction and Development Corporation without
public bidding. In the absence of any evidence to establish petitioners' participation in or concurrence with not only the rescission of the
subject NHA contract but also the eventual award thereof to private respondent Jose Cruz/Triad Construction, the charge of conspiracy
between the petitioners and their co-accused cannot be sustained.

Furthermore, petitioners assail as violative of due process the ruling of the Sandiganbayan's Resolution dated August 9, 1999 denying
their motion for reconsideration. The court a quo ruled that, even if they did not actively participate in the commission of the crime, the
petitioners could still be held liable therefor through gross inexcusable negligence. Petitioners emphasize that the information averred
that the crime was allegedly committed by the accused through manifest partiality or evident bad faith and not through gross
inexcusable negligence.

In its Comment,18 respondent People of the Philippines contends that the evidence presented by the prosecution established the guilt of
the petitioners and their co-accused beyond reasonable doubt. In order to show the existence of conspiracy involving the petitioners
and their co-accused, public respondent states that, on August 29, 1991, accused Robert Balao sent a letter to private complainant,
Arceo Cruz, informing the latter that he (Balao) was rescinding the subject contract for abandonment of the project with negative
slippage (unfinished portion) of 59.11% as of the stipulated date of completion thereof. The NHA Board of Directors of which petitioners
Katigbak and Merelos were chairman and member respectively, later approved the termination of the contract through Board
Resolution No. 2453 dated March 12, 1992, using as a ground therefor the "mutual agreement of the parties." However, the private
complainant neither suspended work on nor abandoned the project, as he continuously worked thereon until he was forced to vacate
the premises by the private respondent Jose Cruz/Triad Construction on January 20, 1992. This fact is evident from the Abstract of
Physical Accomplishment19 which was signed by all concerned field officers of the NHA, namely: Supervising Engineer Noel Lubrido
and prosecution witnesses Virgilio Dacalos and Felicisimo Lazarte, Jr. both of the NHA Regional Projects Department. Moreover, there
is no evidence that private complainant ever requested the "mutual termination" of the contract. On the contrary, he even wrote
accused Balao on October 17, 1991 and asked him to reconsider the rescission of the contract but the latter instructed him to file an
appeal with the NHA Board which later approved the termination of the contract allegedly upon mutual agreement of the parties.

Anent the subsequent award to private respondent Jose Cruz/Triad Construction of the contract for the unfinished portion of the project
without public bidding, the evidence shows that accused Balao was the one who entered into such contract in his capacity as general
manager of the NHA. The said contract was approved by his co-accused members of the NHA Board of Directors in the same Board
Resolution No. 2453 dated March 12, 1992 for a contract price of P9,554,837.22. 20 The value of the subsequent contract was
P4,591,325.3021 more than what private complainant would have been paid had he been allowed to finish the project.

Even on the assumption that respondent Sandiganbayan misappreciated the evidence presented, the error was one of law that could
only be reviewed through an appeal; it did not constitute grave abuse of discretion correctable by certiorari.

By way of reply,22 petitioners insist that there was no proof that they participated in nor conspired with their co-accused in the rescission
of the subject contract and the award thereof to the private respondent. Under the circumstances, the remedy of certiorari is proper
because the assailed resolutions of the respondent court were not supported by evidence, thus constituting a whimsical and capricious
exercise of judgment.

A demurrer to evidence is an objection by one of the parties in an action to the effect that the evidence his adversary produced is
insufficient in point of law, whether true or not, to make out a case or sustain the issue. The party demurring challenges the sufficiency
of the whole evidence to sustain a verdict. For its part, the court, in passing upon the sufficiency of the evidence raised in a demurrer, is
merely required to ascertain whether there is competent or sufficient evidence to sustain the indictment or to support a verdict of guilt. 23

A judicial action on a motion to dismiss on demurrer to evidence rests within the sound discretion of the court. 24 In addition, an order
denying a demurrer to evidence is interlocutory. It is not appealable. Neither can it be the subject of a petition for certiorari in the
absence of grave abuse of discretion or excess of jurisdiction, or an oppressive exercise of judicial authority. 25 And, as correctly
stressed by the public respondent, unless there is grave abuse of discretion amounting to lack of jurisdiction, respondent
Sandiganbayan's denial of petitioners' motion to dismiss on demurrer to evidence may not be disturbed and may only be reviewed in
the ordinary courts of law by an appeal after trial.26

Hence, the issue to be resolved is whether or not respondent Sandiganbayan committed grave abuse of discretion when it denied
petitioners' motion to dismiss on demurrer to evidence.

Section 3 paragraph e of RA. 3019, as amended, provides:

Section 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by
existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

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 (e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident
bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other concessions.

In order to be held liable for violation of Section 3 paragraph (e) of RA 3019, as amended, the following elements must concur: (1) the
accused is a public officer discharging administrative, judicial or official functions; (2) he must have acted with manifest partiality,
evident bad faith or inexcusable negligence; and (3) his action has caused undue injury to any party, including the Government, or has
given any party any unwarranted benefit, advantage or preference in the discharge of his functions. 27

Private complainant Arceo Cruz28 testified that he entered into a contract with the NHA for the land development of Pahanocoy Sites
and Services, Phase I, in Bacolod City. Before he could finish the project, the NHA, through its general manager, accused Robert
Balao, unilaterally rescinded the contract for the reason that he was allegedly behind schedule, which private complainant denied.
Consequently, private complainant was not paid his fourth billing in the amount of P2,888,918.29. His subsequent motion for
reconsideration was not acted upon by accused Balao who instead advised private complainant to appeal to the NHA Board. Private
complainant's appeal, however, was not even considered since the NHA Board Secretary, a certain Mr. de las Alas, did not include the
matter in the agenda. According to de las Alas,29 the rescission of the contract was the decision of accused Balao alone. With this
information, private complainant returned to accused Balao who recommended, this time, that he bring his appeal to the management
committee of the NHA. Private complainant did, again to no avail. Realizing the futility of his efforts, private complainant engaged the
legal services of a lawyer to file a formal complaint with the Office of the Ombudsman, for which he agreed to pay 30% of any recovery.

Meanwhile, in July 1992, private complainant received a letter from accused Balao stating falsely that his "request for mutual
termination" of the contract was "approved" by the NHA Board. The truth was, up to that point, private complainant was earnestly
seeking a reconsideration of the rescission of the contract.

Private complainant admits that the sum of P573,107.60 was the monetary value of his work accomplishment as of July 1992.
However, his total collectible from the NHA as of said date amounted to P2,888,918.29 for the reason that he continued working on the
project pending his motion for reconsideration upon the suggestion of Engineers Lazarte, Jr. and Dacalos, 30 the latter being directly in
charge of the project. These NHA officials believed that the government could economize if the NHA had to pay P2,888,918.29 only,
representing the balance due the private complainant, compared to the contract price of P9,554,837.22 for the unfinished portion of the
project awarded, without public bidding, to private respondent Jose Cruz/Triad Construction.

Due to the unilateral rescission of the contract by accused Balao, private complainant was blacklisted and unable to secure any project
for at least two years until he was awarded a project in Lanao del Sur worth P50 million. While in Mindanao, private complainant was
kidnapped for 56 days. His frightful experience affected him and his family so much that he claimed moral damages of P5 million in
addition to the amount of P2,888,918.29 representing the unpaid balance from the NHA plus interest, and actual damages of P15,000.

On cross-examination, the private complainant admitted that he did not include the petitioners and the other members of the NHA
Board of Directors in his complaint at the Office of the Ombudsman. The contract which was supposed to be completed in 120 days
was commenced on July 18, 1990 and hence, the same was already terminated when it was rescinded on August 29, 1991. Private
complainant explained that an extension was being worked out before the rescission but he could not work on the project until after the
contractor in the neighboring NHA project completed the excavation and gathering of filling materials from his project site in Phase I
Pahanocoy Sites and Services, Bacolod City. He reiterated that he was not behind schedule, much less that he abandoned the project.

Prosecution witness Adelino M. Amurillo,31 Principal Engineer assigned at the NHA head office along Elliptical Road, Diliman, Quezon
City, testified that he was instructed by his superior to locate the official documents sought. in a subpoena issued by the
Sandiganbayan. He coordinated with the NHA office in Bacolod City and searched the steel cabinets in his office, after which he was
instructed by his superior to present the official documents in court. He disclosed that there was no official custodian of the official
records in their office and that anybody who needed the files simply had to look for them in the proper cabinet where they were stored.
With respect to perfected NHA contracts, for instance, the Finance Section had custody of the relevant documents. The official
documents he presented in court consisted of prosecution Exhibits "A," "B," "C," "E," "F," "H," "H-1," "I," "J", "K," "M," "Q" and "R."

Prosecution witness Felicisimo F. Lazarte, Jr.32 identified his signatures appearing on Exhibits "E," "F," "G," and "H" in his capacity as
Department Manager, NHA Regional Projects Department. However, he denied having affixed the signatures above his typewritten
names in. Exhibits "L" and "P" of the prosecution. He identified the same as that of his subordinate, Virgilio Dacalos, whose signature
was very familiar to him.

For his part, prosecution witness Virgilio Dacalos,33 Division Manager, NHA Regional Projects Department, testified that his basic
responsibility was to conduct overall supervision of the NHA operations in the Visayas region. In the absence of his superior,
prosecution witness Lazarte, Jr., he ensured the continuity of operations by affixing his signature over the typewritten name of Lazarte
on official documents. He identified his signatures appearing above his typewritten name in Exhibits "E," "F," "G," "H" and "H-1." He
also recognized his signatures over the typewritten name of Felicisimo Lazarte, Jr. in Exhibits "L" and "P." This prosecution witness
stated that petitioners Katigbak and Merelos had no participation in the preparation of all the documents he identified in court.

76
The foregoing testimonies of the prosecution witnesses did not disclose any role played by the petitioners in the so-called "conspiracy
loop" alleged by the public respondent in its Comment. The testimony of private complainant Arceo Cruz dwelt principally on the acts of
accused Robert Balao in unilaterally rescinding the contract for land development with the private complainant and then awarding the
contract for the unfinished portion of the project, without public bidding and at an exorbitant rate, to private respondent Jose Cruz/Triad
Construction. The same testimony also told of the damage suffered by the private complainant because of the acts of accused Balao.
Nowhere, however, in his said testimony did it appear that petitioners participated in the decision to rescind the subject contract and to
award the unfinished portion of the project to the private respondent. On the contrary, private complainant even absolved the petitioners
of any participation in the complained acts of their co-accused Balao by admitting that he never accused any member of the NHA Board
of Directors of anything in his complaint filed with the Office of the Ombudsman. 34

The testimony of prosecution witness Adelino M. Amurillo was presented only for the purpose of identifying the official documents which
were the subject of the subpoena sent to the NHA central office on Elliptical Road, Diliman, Quezon City, specifically Exhibits "A," "B,"
"C," "E," "F," "H," "H-1," "I," "J," "K," "M," "Q" and "R" of the prosecution.

Prosecution witness Felicisimo Lazarte, Jr. identified his signatures appearing in Exhibits "E" (Memorandum dated February 19, 1992 of
Virgilio V. Dacalos); "F" (Abstract of Physical Accomplishments); "G" (Summary of Payment Estimates); and "H" (Disbursement
Voucher dated January 27, 1992) as well as his participation in the preparation of the said documents. On the other hand, prosecution
witness Virgilio Dacalos identified his signatures appearing in the same Exhibits "E," "F," "G," "H" and "H-1" of the prosecution,
including those appearing in Exhibits "L" and "P" which he affixed in behalf of his superior Felicisimo Lazarte, Jr. In addition, Dacalos
affirmed that petitioners Katigbak and Merelos had no participation in any of the official documents he identified in court.

A careful scrutiny of the documentary evidence adduced by the prosecution does not support the charge of violation of Section 3,
paragraph (e) of RA 3019, as amended, in the instant information against the petitioners. Significantly, the said pieces of documentary
evidence were offered only for the purpose of establishing the participation and liability of their co-accused, Robert Balao, as noted in
the written Formal Offer of Exhibits35 of the prosecution dated September 22, 1997. The same was prepared and signed by Atty.
Nicanor V. Villarosa, counsel of the private complainant, with the written approval of Prosecutor Manuel M. Corpuz of the Office of the
Special Prosecutor. In this connection, the rule is explicit that courts should consider the evidence only for the purpose for which it is
offered.36

The prosecution relies heavily on NHA Board Resolution No. 2453 dated March 12, 1992 to establish the alleged conspiracy between
the petitioners and their co-accused. This resolution purportedly approved the cancellation of the NHA contract for land development
with the private complainant on the ground of "mutual termination" and the award of the contract for the unfinished portion of the project
to the private respondent Jose Cruz/Triad Construction. However, the Court is bothered by the unexplained failure of the prosecution to
include in its formal offer of exhibits such a very vital piece of evidence in proving the existence of the alleged conspiracy among the
petitioners.

We emphasize that any evidence a party desires to submit for the consideration of the court must formally be offered by him. Such a
formal offer is necessary because it is the duty of the judge to rest his findings of fact and his judgment strictly on the evidence offered
by the parties at the trial; and no finding of fact can be sustained if not supported by such evidence. Documents not regularly received
in evidence during the trial will not be considered in disposing of the issues in an action. Hence, we have held that:

When a party offers a particular documentary instrument as evidence during trial, he must specify the purpose for which the document
or instrument is offered. He must also describe and identify the document, and offer the same as an exhibit so that the other party may
have an opportunity of objecting to it. The offer of evidence is necessary because it is the duty of the judge to rest his findings of facts
and his judgment only and strictly upon the evidence offered by the parties at the trial. Such offer may be made orally or in writing
sufficient to show that the party is ready and willing to submit the evidence to the court. 37

In view of the complete absence of evidence, both testimonial and documentary, to prove the liability of the petitioners for the crime
charged in the information, we find no basis for respondent Sandiganbayan's conclusion in its assailed Resolution dated April 7, 1999
"that the prosecution has sufficiently proven the allegations in the Amended Information and the elements of the offense" as against
herein petitioners. Since the petitioners satisfactorily demonstrated that the prosecution had failed to prove the crime charged against
them, respondent Sandiganbayan's denial of their motion to dismiss the instant criminal case on demurrer to evidence constituted
grave abuse of discretion. The denial was a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. 38

Indeed, there remains no further reason to hold the petitioners for trial. They have the right to be protected against hasty, malicious and
oppressive prosecution; to be secure from an open and public accusation of a crime and from the trouble, expense and anxiety of a
public trial. Similarly situated is the State, which must be shielded at all times from useless and expensive litigations that only contribute
to the clogging of court dockets and take a heavy toll on its limited time and meager resources. 39

WHEREFORE, in view of the foregoing, the instant petition for certiorari and prohibition is hereby GRANTED. The assailed resolutions
of the Sandiganbayan in Criminal Case No. 22647 denying petitioners' demurrer to evidence are REVERSED and SET ASIDE. No
pronouncement as to costs.

SO ORDERED.

77
Republic v. De Borja, G.R. No. 187448, Jan. 9, 2017

G.R. No. 187448

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
ALFREDO R. DE BORJA, Respondent.

DECISION

CAGUIOA, J.:

Before this Court is an Appeal by Certiorari1 filed under Rule 45 of the Rules of Court (Petition), seeking review of the Resolutions dated
July 31, 20082 and March 25, 20093 issued by the Sandiganbayan (SB) – First Division in Civil Case No. 0003. 4 The Resolution dated
July 31, 2008 granted respondent Alfredo De Borja's (De Borja) Demurrer to Evidence dated April 15, 2005 5 (Demurrer to Evidence),
while the Resolution dated March 25, 2009 denied petitioner Republic of the Philippines' (Republic) Motion for Reconsideration dated
August 15, 20086 of the Resolution dated July 31, 2008.

The Factual Antecedents

The case stems from a Complaint 7 filed by petitioner Republic, represented by the Presidential Commission on Good Government, for
"Accounting, Reconveyance, Forfeiture, Restitution, and Damages" (Complaint) before the SB (Civil Case No. 0003) for the recovery of
ill-gotten assets allegedly amassed by the individual respondents therein, singly or collectively, during the administration of the late
President Ferdinand E. Marcos.8 Geronimo Z. Velasco (Velasco), one of the defendants in Civil Case No. 0003, was the President and
Chairman of the Board of Directors of the Philippine National Oil Company (PNOC). 9 Herein respondent De Borja is Velasco' s
nephew. 10

It appears from the records that PNOC, in the exercise of its functions, would regularly enter into charter agreements with vessels and,
pursuant to industry practice, vessel owners would pay "address commissions" to PNOC as charterer, amounting to five percent (5%)
of the total freight. 11 Allegedly, during the tenure of Velasco, no address commissions were remitted to PNOC. 12

Instead, starting 1979, the percentage of the address commission no longer appeared in the charter contracts and the words "as
agreed upon" were substituted therefor, per instructions of Velasco. 13 As a result, the supposed address commissions were remitted to
the account of Decision Research Management Company (DRMC), one of the defendant corporations in Civil Case No. 0003 and the
alleged conduit for address commissions. 14 Velasco was likewise alleged to have diverted government funds by entering into several
transactions involving the purchase of crude oil tankers and by reason of which he received bribes, kickbacks, or commissions in
exchange for the granting of permits, licenses, and/or charters to oil tankers to service PNOC. 15

Given the foregoing, petitioner Republic claimed that it was De Borja who collected these address commissions in behalf of Velasco,
basing its allegation on the testimony of Epifanio F. Verano16 (Verano), a witness for petitioner Republic. De Borja was further alleged to
have acted as Velasco's dummy, nominee, and/or agent for corporations he owned and/or controlled, such as DRMC. 17

After the filing of the parties' responsive pleadings, trial on the merits ensued. Subsequently, upon the conclusion of its presentation of
evidence, petitioner Republic submitted its Formal Offer of Evidence dated March 6, 1995. 18

On April 15, 2005, respondent De Borja filed his Demurrer to Evidence of even date, stating therein, among others: (i) that Verano, on
two (2) occasions, testified that he delivered an envelope to Velasco who, in turn, instructed him to deliver the same to De Borja; (ii) that
Verano admitted that the envelope was sealed; (iii) that Verano did not open the envelope and therefore had no knowledge of the
contents thereof; (iv) that Verano did not deliver the envelope personally to De Borja; and (v) that Verano did not confirm whether De
Borja in fact received the said envelope.19

In turn, petitioner Republic filed a Comment/Opposition dated May 9, 2005, 20 to which respondent De Borja filed a Reply dated June 2,
2005.21

Ruling of the SB

In its Resolution dated July 31, 2008, the SB found that the evidence presented was insufficient to support a claim for damages against
De Borja, thereby granting respondent De Borja's Demurrer to Evidence. In the said Resolution, the SB ratiocinated:

After an assessment of the arguments raised by defendant De Borja and the comments thereto of plaintiff, this Court finds that the
plaintiff has failed to present sufficient evidence to prove that defendant De Borja is liable for damages as averred in the
complaint.

78
Among the witnesses presented by plaintiff, the Court focused on the testimony of the witness for plaintiff Epifanio F. Verano, who was
presented to prove that on two occasions, defendant Velasco instructed Verano to deliver to defendant De Borja envelopes containing
money which constituted commissions given by ship brokers.

Upon cross-examination, however, witness Verano admitted that although he was instructed to deliver two envelopes to the
office of De Borja, he did not know for a fact that De Borja actually received them. Moreover, witness Verano testified that
after he delivered the envelopes, he did not receive any word that they did reach De Borja, nor did Verano confirm De Borja's
receipt of them.

xxxx

Plaintiff also sought to prove defendant De Borja's participation in the alleged utilization of public funds by the affidavit executed by
Jose M. Reyes. However, the affiant Jose M. Reyes never testified in open court, as he had a heart attack two days before he was
scheduled to take the witness stand. x x x

x x x In this case, where the plaintiff's evidence against defendant De Borja consists only of Verano's testimony and Reyes'
affidavit, no preponderance of evidence has been satisfactorily established. 22 (Emphasis supplied)

Petitioner Republic then filed its Motion for Reconsideration dated August 15, 2008, 23 which was denied by the SB in the Resolution
March 25, 2009.

Hence, petitioner Republic filed the instant Petition solely with respect to the liability of respondent De Borja, claiming that the SB erred
in granting the Demurrer to Evidence and in denying its Motion for Reconsideration dated August 15, 2008.

In a Resolution dated July 15, 2009,24 the Court required respondent De Borja to file a Comment. In compliance with the Court's
directive, respondent De Borja filed his Comment dated September 11, 2009, 25 reiterating the insufficiency of the evidence adduced
before the SB (e.g., testimony of Verano, affidavit of deceased Jose M. Reyes).

Petitioner Republic then filed its Reply dated June 10, 2010 26 in due course. A Motion for Early Resolution dated June 7, 2011 27 was
thereafter filed by respondent De Borja, which was noted by the Court in its Resolution dated August 10, 2011. 28

Parenthetically, on June 16, 2011, the SB rendered a Decision dismissing Civil Case No. 0003 with respect to the remaining
respondents therein.1avvphi1 This, in turn, was subject of an appeal before this Court29 and

docketed as G.R. No. 199323, entitled "Republic of the Philippines vs. Geronimo Z. Velasco, et al". On July 28, 2014, the Court
rendered a Resolution, denying the appeal. Thereafter, an Entry of Judgment was made with respect to G.R. No. 199323.
Subsequently, on December 6, 2016, respondent De Borja filed a Motion to Dismiss dated December 2, 2016, 30 on the ground that the
Petition had been rendered moot and academic by reason of the said Entry of Judgment, which affirmed the June 16, 2011 Decision
and November 15, 2011 Resolution of the SB that dismissed Civil Case No. 0003.

Issue

The issue presented for the Court's resolution is whether or not the SB committed reversible error in granting respondent De Borja's
Demurrer to Evidence.

The Court's Ruling

Before proceeding to the substantive issue in this case, and for the guidance of the bench and bar, the Court finds it proper to first
discuss procedural matters.

A demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence. It is a remedy available to the defendant, to
the effect that the evidence produced by the plaintiff is insufficient in point of law, whether true or not, to make out a case or sustain an
issue. 31 The question in a demurrer to evidence is whether the plaintiff, by his evidence in chief, had been able to establish a prima
facie case. 32

In Felipe v. MGM Motor Trading Corp.,33wherein the propriety of the trial court's granting of a demurrer to evidence was the crux of the
controversy, we held that a review of the dismissal of the complaint naturally entailed a calibration of the evidence on record to properly
determine whether the material allegations of the complaint were amply supported by evidence. This being so, where the resolution of a
question requires an examination of the evidence, the credibility of the witnesses, the existence and the relevance of surrounding
circumstances, and the probability of specific situations, the same involves a question of fact. 34

79
In this regard, the Court emphasizes that factual questions are not the proper subject of a petition for review under Rule 45, the same
being limited only to questions of law.35 Not being a trier of facts, the Court is not duty-bound to analyze and weigh again the evidence
already considered in the proceedings below.36 For such reasons, the Court has consistently deferred to the factual findings of the trial
court, in light of the unique opportunity afforded them to observe the demeanor and spontaneity of the witness in assessing the
credibility of their testimony. 37

Further, in his Comment dated September 11, 2009, respondent De Borja points out the inadvertence of petitioner Republic, through
the Office of the Solicitor General, to submit proof of service on the Sandiganbayan of a copy of the instant Petition and the preceding
Motion for Extension of Time to File Petition for Review dated April 29, 2009. 38 In this regard, the failure of petitioner Republic to strictly
comply with Section 5(d), Rule 56 of the Rules of Court already renders its Petition dismissible. 39

Nevertheless, considering that rules of procedure are subservient to substantive rights, and in order to finally write finis to this
prolonged litigation, the Court hereby dispenses with the foregoing lapses in the broader interest of justice. The Court has repeatedly
favored the resolution of disputes on the merits, rather than on procedural defects.

Further, anent the claim of respondent De Borja that the Petition had already been rendered moot and academic due to the dismissal of
Civil Case No. 0003 by the SB, the Court finds the same lacking in merit. It is axiomatic that a dismissal on the basis of a demurrer to
evidence is similar to a judgment; it is a final order ruling on the merits of a case. 40 Hence, when petitioner Republic brought the instant
appeal before this Court, the same was limited to respondent De Borja's liability alone. In this regard, the propriety of the SB's granting
of respondent De Borja's Demurrer to Evidence, which is the subject matter of this case, is separate and distinct from the subject matter
of the appeal in G.R. No. 199323, i.e., liability of Velasco, et al.

Thus, respondent De Borja's claim in his Motion to Dismiss that "the complaint against [him] was dismissed not only once - but twice" is
inaccurate and legally flawed. Perforce, it is of no moment that the SB dismissed Civil Case No. 0003 as the same was merely with
respect to the respondents other than respondent De Borja who, by then, was already confronted with the instant appeal brought by
petitioner Republic.

The singular question for the Court now is this: whether petitioner Republic was able to adduce sufficient evidence to prove the alleged
complicity of respondent De Borja with the required quantum of evidence. After a judicious review of the records and the submissions of
the parties, the Court rules in the negative.

Case law has defined "burden of proof' as the duty to establish the truth of a given proposition or issue by such quantum of evidence as
the law demands in the case at which the issue arises.41 In civil cases, the burden of proof is on the plaintiff to establish his case by
preponderance of evidence, i.e., superior weight of evidence on the issues involved. 42 "Preponderance of evidence" means evidence
which is of greater weight, or more convincing than that which is offered in opposition to it. 43

In a demurrer to evidence, however, it is premature to speak of "preponderance of evidence" because it is filed prior to the defendant's
presentation of evidence; it is precisely the office of a demurrer to evidence to expeditiously terminate the case without the need of the
defendant's evidence. 44 Hence, what is crucial is the determination as to whether the plaintiffs evidence entitles it to the relief sought.

Specifically, the inquiry in this case is confined to resolving whether petitioner Republic is entitled to "Accounting, Reconveyance,
Forfeiture, Restitution, and Damages" based on the evidence it has presented.

As repeatedly stressed by respondent De Borja, the only evidence presented with respect to his liability is the testimony of Verano and
the affidavit of one Jose M. Reyes, as summarized below:

(i) Affidavit of Jose M. Reyes

With respect to the affidavit of Jose M. Reyes, his non-appearance before the SB due to his untimely demise rendered the same
inadmissible in evidence for being hearsay, as correctly observed by the SB. 45

(ii) Testimony of Verano

Verano was presented to prove that on two (2) occasions, Velasco had instructed him to deliver to De Borja envelopes allegedly
containing the "address commissions". 46

SOL URETA

Q: Could you tell us about, if you know, any particular instance any payment by address commission to PNOC?

A: I begly (sic) recall. A broker coming to the house handing me a brown envelope for delivery to the Minister.

80
Q: Who is the Minister?

A: Minister Velasco.

xxxx

Q: Do you know the contents of that envelope, Mr. witness?

A: It was sealed. Since it is for somebody else I did not open it.

Q: What did he say at that time he handed to you that envelope?

A: He said that is from "X-C".

xxxx

Q: Would you tell us what was your understanding as to the contents of that particular envelope?

ATTY. MENDOZA

Objection, your Honor please, it calls for an opinion.

PJ GA[R]CHITORENA

Lay the basis...

SOL URETA

Q: Mr. witness, according to you the envelope was given to you and for what purpose again?

ATTY. MENDOZA

Already answered. He said it was to be delivered.

PJ GA[R]CHITORENA

Q: And he did not know the contents because it was a sealed envelope.

SOL URETA

Q: Were there any indication from Mr. Heger at that time as to what that particular envelope contained?

A: No, he did not say so.

Q: But then could you tell us what was your impression...

PJ GA[R]CHITORENA

Impression as to what?

SOL URETA

As to the nature of delivery.

ATTY. MENDOZA

Objection, that calls for an opinion.

81
 xxxx

PJ GA[R]CHITORENA

It could contain shirt, it could contain pieces of paper, it could contain clippings. You must show that you have basis for that
question. But in fact he said, he do (sic) not know. He did (sic) know what contents was (sic). Any question along that line will
be a guess. He is not expert at feelings (sic) things in coming out with a result... We know which was you want (sic) to go and for that
very reason Mr. Mendoza is objecting because you give us the false.

Q: What did you do with that envelope for heaven's sake?

A: I brought it to him. What will I do with it it's not mine. I was told to give it to the Minister.

SOL URETA

Q: What happened when you weren't (sic) to the Minister?

A: To bring it to the office of Mr. de Borja.

xxxx

Q: What did Mr. Velasco say with respect to that envelope.

A: He told me to bring it to Mr. de Borja.

Q: Who is Mr. de Borja?

A: At that time he was connected with Gerver.

Q: What happened when you brought it to the office of Mr. de Borja?

A: I brought it to the office of Mr. de Borja and he wasn't there, so I just left it.

xxxx

SOL URETA

Q: Were there other occasions when envelope (sic) was given to you by a broker?

A: I recall once in early 80's.

Q: Who was the particular broker that brought to you the envelope?

A: Mr. David Reynolds.

Q: Will you tell us the circumstance of that delivery?

A: Well, he just came to the office I thought he was going there for a cup of coffee and then he said give this to Mr. Velasco, that's it.

Q: Did you know where that envelope that (sic) particular time?

A: I brought it over to Makati because I was holding office along Roxas Blvd.

Q: To whom did you bring that envelope?

A: To the office of Mr. Velasco.

Q: What happened afterwards when you brought the envelope to Mr. Velasco?

82
A: Again he told me to bring it over to Gerver.

Q: Did you bring it to Gerver?

A: I left it there.

PJ GA[R]CHITORENA

Q: To whom did you left (sic) it?

A: Supposed to be for Mr. de Borja, but Mr. de Borja was not around.

xxxx

Q: The first one, when was it more or less, when somebody called, Mr. Heger?

A: Late '70's, your Honor. [t.s.n. pp. 114-123, March 1995-Verano on Direct.] 47 (Additional emphasis supplied)

Moreover, during Verano' s cross-examination, it was revealed that he was not knowledgeable of the contents of the envelopes and
that he also never confirmed whether respondent De Borja had actually received them:

Q: Referring to this envelope which you mentioned in your direct testimony, both the envelopes delivered by Mr. Hagar to you and Mr.
Reynolds. They were sealed?

A: Right.

Q: You did not open them?

A: No, sir.

Q: When you brought to the Office of Mr. Velasco they remained sealed?

A: They remained sealed.

Q: And when you brought them to the Office of Mr. De Borja...

A: They remained sealed [t.s.n., p. 162 March 1995-Verano on Cross].

PJ GA[R]CHITORENA

Q: Regarding these two envelopes, you said that you delivered these envelopes in the Office of Mr. de Borja?

A: Yes, your Honor.

Q: But de Borja was not around at that time?

A: That is right.

PJ GA[R]CHITORENA

Q: After delivery did you receive any word that the envelopes did not reach Mr. de Borja?

WITNESS

A: I did not receive any report.

Q: From anybody?

83
A: From anybody.

Q: Did you meet Mr. de Borja anytime before the delivery?

A: No, sir.

Q: Subsequently did you meet Mr. de Borja?

A: Yes.

Q: Did you bring the matter of the envelope?

A: No, sir.

Q: Did he bring the matter with you?

A: No, sir. [t.s.n., pp. 21-22, 2 March 1995 - Verano, Questions from the Court]. 48

In the face of the foregoing testimony, the insinuations of petitioner Republic in the instant Petition can best be described as
speculative, conjectural, and inconclusive at best. Nothing in the testimony of Verano reasonably points, or even alludes, to the
conclusion that De Borja acted as a dummy or conduit of Velasco in receiving address commissions from vessel owners.

The Court joins and concurs in the SB's observations pertaining to Verano's want of knowledge with respect to the contents of the
envelopes allegedly delivered to respondent De Borja's office, which remained sealed the entire time it was in Verano' s possession. As
admitted by Verano himself, he did not and could not have known what was inside the envelopes when they were purportedly entrusted
to him for delivery. In the same vein, Verano did not even confirm respondent De Borja's receipt of the envelopes, despite numerous
opportunities to do so. Relatedly, it was further revealed during the cross-examination of Verano that in the first place, Velasco did not
even deal directly with brokers.49

All told, the Court finds that the evidence adduced is wholly insufficient to support the allegations of the Complaint before the SB. Thus,
for failure of petitioner Republic to show any right to the relief sought, the Court affirms the SB in granting the Demurrer to Evidence.

WHEREFORE, premises considered, the Petition is DENIED and the Resolutions dated July 31, 2008 and March 25, 2009 of the
Sandiganbayan - First Division in Civil Case No. 0003 are hereby AFFIRMED.

SO ORDERED.

84
Bangayan, Jr. v. Bangayan, G.R. No. 172777, 172792, [October 19, 2011], 675 PHIL 656-670

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 172777 October 19, 2011

BENJAMIN B. BANGAYAN, JR., Petitioner,

vs.
SALLY GO BANGAYAN, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 172792

RESALLY DE ASIS DELFIN, Petitioner,

vs.
SALLY GO BANGAYAN, Respondent.

DECISION

MENDOZA, J.:

These are consolidated petitions for review on certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure assailing the
March 14, 2006 Decision1 and the May 22, 2006 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 83704 entitled "Sally Go-
Bangayan v. Hon. Luisito C. Sardillo, in his capacity as Presiding Judge of RTC-Caloocan City, Branch 126, Benjamin B. Bangayan, Jr.
and Resally de Asis Delfin."

The Facts

This case stemmed from a complaint-affidavit filed by respondent Sally Go-Bangayan (Sally Go) accusing petitioners Benjamin
Bangayan, Jr. (Benjamin, Jr.) and Resally de Asis Delfin (Resally) of having committed the crime of bigamy. 3

On March 7, 1982, Benjamin, Jr. married Sally Go in Pasig City and they had two children. 4 Later, Sally Go learned that Benjamin, Jr.
had taken Resally as his concubine whom he subsequently married on January 5, 2001 under the false name, "Benjamin Z.
Sojayco."5 Benjamin, Jr. fathered two children with Resally. Furthermore, Sally Go discovered that on September 10, 1973, Benjamin,
Jr. also married a certain Azucena Alegre (Azucena) in Caloocan City.

The City Prosecutor of Caloocan City conducted a preliminary investigation and thereafter issued a Resolution dated June 5, 2002
recommending the filing of an information for bigamy against Benjamin, Jr. and Resally for having contracted a marriage despite
knowing fully well that he was still legally married to Sally Go.6 The information was duly filed on November 15, 2002 and was raffled to
the Regional Trial Court of Caloocan City, Branch 126 (RTC) where it was docketed as Criminal Case No. C-66783.7

After the arraignment, during which petitioners both pleaded not guilty to the charge against them, the prosecution presented and
offered its evidence.8 On September 8, 2003, Benjamin, Jr. and Resally separately filed their respective motions for leave to file a
demurrer to evidence.9 This was granted by the RTC in its Order dated September 29, 2003. 10

On October 20, 2003, Benjamin, Jr. filed his Demurrer to Evidence, praying that the criminal case for bigamy against him be dismissed
for failure of the prosecution to present sufficient evidence of his guilt. 11 His plea was anchored on two main arguments: (1) he was not
legally married to Sally Go because of the existence of his prior marriage to Azucena; and (2) the prosecution was unable to show that
he and the "Benjamin Z. Sojayco Jr.," who married Resally, were one and the same person. 12

In its December 3, 2003 Order,13 the RTC dismissed the criminal case against Benjamin, Jr. and Resally for insufficiency of
evidence.14 It reasoned out that the prosecution failed to prove beyond reasonable doubt that Benjamin, Jr. used the fictitious name,
Benjamin Z. Sojayco Jr., in contracting his marriage with Resally. 15 Corollarily, Resally cannot be convicted of bigamy because the
prosecution failed to establish that Resally married Benjamin, Jr.16

85
Aggrieved, Sally Go elevated the case to the CA via a petition for certiorari. On March 14, 2006, the CA promulgated its
Decision17 granting her petition and ordering the remand of the case to the RTC for further proceedings. The CA held that the following
pieces of evidence presented by the prosecution were sufficient to deny the demurrer to evidence: (1) the existence of three marriages
of Benjamin, Jr. to Azucena, Sally Go and Resally; (2) the letters and love notes from Resally to Benjamin, Jr.; (3) the admission of
Benjamin, Jr. as regards his marriage to Sally Go and Azucena; and (4) Benjamin, Jr.’s admission that he and Resally were in some
kind of a relationship.18 The CA further stated that Benjamin, Jr. was mistaken in claiming that he could not be guilty of bigamy because
his marriage to Sally Go was null and void in light of the fact that he was already married to Azucena. A judicial declaration of nullity
was required in order for him to be able to use the nullity of his marriage as a defense in a bigamy charge. 19

Petitioners’ motions for reconsideration were both denied by the CA in a Resolution dated May 22, 2006. 20

Hence, these petitions.

The Issues

Petitioner Benjamin, Jr. raises the following issues:

1. Whether or not the Honorable Court of Appeals in a certiorari proceedings may inquire into the factual matters presented by
the parties in the lower court, without violating the constitutional right of herein petitioner (as accused in the lower court)
against double jeopardy as enshrined in Section 21, Article III of the 1987 Constitution.

2. Whether or not the order of the trial court that granted the Demurrer to Evidence filed by the petitioners as accused therein
was issued with grave abuse of discretion that is tantamount to lack of jurisdiction or excess of jurisdiction as to warrant the
grant of the relief as prayed for in the Petition for Certiorari filed by respondent Sally [Go-Bangayan].

3. Whether or not the prosecution was indeed denied due process when the trial court allegedly ignored the existence [of the]
pieces of evidence presented by the prosecution.21

On the other hand, petitioner Resally poses the following questions:

1. Whether or not the Honorable Court of Appeals committed serious errors of law in giving due course to the petition for
certiorari notwithstanding the lack of legal standing of the herein respondent (petitioner therein) as the said petition was filed
without the prior conformity and/or imprimatur of the Office of the Solicitor General, or even the City Prosecutor’s Office of
Caloocan City

2. Whether or not the Honorable Court of Appeals committed serious errors of law in ordering the further proceedings of the
case as it would violate the right of the accused against double jeopardy. 22

Essentially, the issues which must be resolved by this Court are:

1. Whether Sally Go had the legal standing to file a petition for certiorari before the CA despite the lack of consent of either the
Office of the Solicitor General or the Office of the City Prosecutor (OCP) of Caloocan.

2. Whether petitioners’ right against double jeopardy was violated by the CA when it reversed the December 3, 2003 RTC
Order dismissing the criminal case against them.

The Court’s Ruling

The Court finds merit in the petitions.

Only the OSG, and not the private offended party, has the authority to question the order granting the demurrer to evidence in a
criminal case.

Petitioner Resally argues that Sally Go had no personality to file the petition for certiorari before the CA because the case against them
(Resally and Benjamin, Jr.) is criminal in nature. It being so, only the OSG or the OCP of Caloocan may question the RTC Order
dismissing the case against them.23 Respondent’s intervention as the offended party in the prosecution of the criminal case is only
limited to the enforcement of the civil liability.24

Sally Go counters that as the offended party, she has an interest in the maintenance of the criminal prosecution against petitioners and
quotes Merciales v. Court of Appeals25 to support her position: "The right of offended parties to appeal an order of the trial court which
deprives them of due process has always been recognized, the only limitation being that they cannot appeal any adverse ruling if to do

86
so would place the accused in double jeopardy." Moreover, the OSG and the OCP had impliedly consented to the filing of the petition
before the CA because they did not interpose any objection.26

This Court leans toward Resally’s contention that Sally Go had no personality to file the petition for certiorari before the CA. It has been
consistently held that in criminal cases, the acquittal of the accused or the dismissal of the case against him can only be appealed by
the Solicitor General, acting on behalf of the State. 27 The private complainant or the offended party may question such acquittal or
dismissal only insofar as the civil liability of the accused is concerned.28 As explained in the case of People v. Santiago:291awphil

It is well-settled that in criminal cases where the offended party is the State, the interest of the private complainant or the
private offended party is limited to the civil liability. Thus, in the prosecution of the offense, the complainant's role is limited to that
of a witness for the prosecution. If a criminal case is dismissed by the trial court or if there is an acquittal, an appeal therefrom
on the criminal aspect may be undertaken only by the State through the Solicitor General. Only the Solicitor General may
represent the People of the Philippines on appeal. The private offended party or complainant may not take such appeal. However,
the said offended party or complainant may appeal the civil aspect despite the acquittal of the accused.

In a special civil action for certiorari filed under Section 1, Rule 65 of the Rules of Court wherein it is alleged that the trial court
committed a grave abuse of discretion amounting to lack of jurisdiction or on other jurisdictional grounds, the rules state that the petition
may be filed by the person aggrieved. In such case, the aggrieved parties are the State and the private offended party or complainant.
The complainant has an interest in the civil aspect of the case so he may file such special civil action questioning the decision or action
of the respondent court on jurisdictional grounds. In so doing, complainant should not bring the action in the name of the People of the
Philippines. The action may be prosecuted in name of said complainant. [Emphases Supplied]

A perusal of the petition for certiorari filed by Sally Go before the CA discloses that she sought reconsideration of the criminal aspect of
the case. Specifically, she prayed for the reversal of the trial court’s order granting petitioners’ demurrer to evidence and the conduct of
a full blown trial of the criminal case. Nowhere in her petition did she even briefly discuss the civil liability of petitioners. It is apparent
that her only desire was to appeal the dismissal of the criminal case against the petitioners. Because bigamy is a criminal offense, only
the OSG is authorized to prosecute the case on appeal. Thus, Sally Go did not have the requisite legal standing to appeal the acquittal
of the petitioners.

Sally Go was mistaken in her reading of the ruling in Merciales. First, in the said case, the OSG joined the cause of the petitioner,
thereby meeting the requirement that criminal actions be prosecuted under the direction and control of the public prosecutor. 30 Second,
the acquittal of the accused was done without due process and was declared null and void because of the nonfeasance on the part of
the public prosecutor and the trial court.31 There being no valid acquittal, the accused therein could not invoke the protection of double
jeopardy.

In this case, however, neither the Solicitor General nor the City Prosecutor of Caloocan City joined the cause of Sally Go, much less
consented to the filing of a petition for certiorari with the appellate court. Furthermore, she cannot claim to have been denied due
process because the records show that the trial court heard all the evidence against the accused and that the prosecution had formally
offered the evidence before the court granted the demurrer to evidence. Thus, the petitioners’ acquittal was valid, entitling them to
invoke their right against double jeopardy.

Double jeopardy had already set-in

Petitioners contend that the December 3, 2003 Order of dismissal issued by the RTC on the ground of insufficiency of evidence is a
judgment of acquittal. The prosecution is, thus, barred from appealing the RTC Order because to allow such an appeal would violate
petitioners’ right against double jeopardy.32 They insist that the CA erred in ordering the remand of the case to the lower court for further
proceedings because it disregarded the constitutional proscription on the prosecution of the accused for the same offense. 33

On the other hand, Sally Go counters that the petitioners cannot invoke their right against double jeopardy because the RTC decision
acquitting them was issued with grave abuse of discretion, rendering the same null and void. 34

A demurrer to evidence is filed after the prosecution has rested its case and the trial court is required to evaluate whether the evidence
presented by the prosecution is sufficient enough to warrant the conviction of the accused beyond reasonable doubt. If the court finds
that the evidence is not sufficient and grants the demurrer to evidence, such dismissal of the case is one on the merits, which is
equivalent to the acquittal of the accused.35 Well-established is the rule that the Court cannot review an order granting the demurrer to
evidence and acquitting the accused on the ground of insufficiency of evidence because to do so will place the accused in double
jeopardy.36

The right of the accused against double jeopardy is protected by no less than the Bill of Rights (Article III) contained in the 1987
Constitution, to wit:

Section 21. No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an
ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act.

87
Double jeopardy attaches if the following elements are present: (1) a valid complaint or information; (2) a court of competent jurisdiction;
(3) the defendant had pleaded to the charge; and (4) the defendant was acquitted, or convicted or the case against him was dismissed
or otherwise terminated without his express consent.37 However, jurisprudence allows for certain exceptions when the dismissal is
considered final even if it was made on motion of the accused, to wit:

(1) Where the dismissal is based on a demurrer to evidence filed by the accused after the prosecution has rested, which has
the effect of a judgment on the merits and operates as an acquittal.

(2) Where the dismissal is made, also on motion of the accused, because of the denial of his right to a speedy trial which is in
effect a failure to prosecute.38

The only instance when the accused can be barred from invoking his right against double jeopardy is when it can be demonstrated that
the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction, such as where the prosecution was not
allowed the opportunity to make its case against the accused or where the trial was a sham. 39 For instance, there is no double jeopardy
(1) where the trial court prematurely terminated the presentation of the prosecution's evidence and forthwith dismissed the information
for insufficiency of evidence;40 and (2) where the case was dismissed at a time when the case was not ready for trial and adjudication. 41

In this case, all four elements of double jeopardy are doubtless present. A valid information for the crime of bigamy was filed against the
petitioners, resulting in the institution of a criminal case against them before the proper court. They pleaded not guilty to the charges
against them and subsequently, the case was dismissed after the prosecution had rested its case. Therefore, the CA erred in reversing
the trial court’s order dismissing the case against the petitioners because it placed them in double jeopardy.

As previously discussed, an acquittal by virtue of a demurrer to evidence is not appealable because it will place the accused in double
jeopardy. However, it may be subject to review only by a petition for certiorari under Rule 65 of the Rules of Court showing that the trial
court committed grave abuse of discretion amounting to lack or excess of jurisdiction or a denial of due process. 42

Grave abuse of discretion has been defined as that capricious or whimsical exercise of judgment which is tantamount to lack of
jurisdiction. "The abuse of discretion must be patent and gross as to amount to an evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion and hostility."43 The party questioning the acquittal of an accused should be able to clearly establish that
the trial court blatantly abused its discretion such that it was deprived of its authority to dispense justice. 44

The CA determined that the trial court committed grave abuse of discretion in ignoring the evidence presented by the prosecution and
granting petitioners’ demurrer to evidence on the ground that the prosecution failed to establish by sufficient evidence the existence of
the crime.45 An examination of the decision of the trial court, however, yields the conclusion that there was no grave abuse of discretion
on its part. Even if the trial court had incorrectly overlooked the evidence against the petitioners, it only committed an error of judgment,
and not one of jurisdiction, which could not be rectified by a petition for certiorari because double jeopardy had already set in. 46

As regards Sally Go’s assertion that she had been denied due process, an evaluation of the records of the case proves that nothing
can be further from the truth. Jurisprudence dictates that in order for a decision of the trial court to be declared null and void for lack of
due process, it must be shown that a party was deprived of his opportunity to be heard. 47 Sally Go cannot deny that she was given
ample opportunity to present her witnesses and her evidence against petitioners. Thus, her claim that she was denied due process is
unavailing.

WHEREFORE, the petitions are GRANTED. The March 14, 2006 Decision and the May 22, 2006 Resolution of the Court of Appeals
are REVERSED and SET ASIDE. The December 3, 2003 Order of the Regional Trial Court, Branch 126, Caloocan City, in Criminal
Case No. C-66783, granting the Demurrer to Evidence of petitioners Benjamin B. Bangayan, Jr. and Resally de Asis Delfin and
dismissing the case against them is hereby REINSTATED.

SO ORDERED.

88
RULE 34: JUDGMENT ON THE PLEADINGS

GSIS v. Prudential, G.R. No. 165585, 2013

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 165585 November 20, 2013

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,

vs.
PRUDENTIAL GUARANTEE AND ASSURANCE, INC., DEVELOPMENT BANK OF THE PHILIPPINES and LAND BANK OF THE
PHILIPPINES, Respondents.

x-----------------------x

G.R. No. 176982

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,

vs.
PRUDENTIAL GUARANTEE AND ASSURANCE, INC., Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in these consolidated petitions for review on Certiorari1 are separate issuances of the Court of Appeals (CA) in relation to the
complaint for sum of money filed by Prudential Guarantee and Assurance, Inc. (PGAI) against the Government Service Insurance
System (GSIS) before the Regional Trial Court of Makati City, Branch 149 (RTC), docketed as Civil Case No. 01-1634.

In particular, the petition in G.R. No. 165585 assails the Decision 2 dated May 26, 2004 and Resolution3 dated October 6, 2004 of the
CA in CA-G.R. SP No. 69289 which affirmed the Order4 dated February 14, 2002, as well as the Order,5 Notices of Garnishment,6 and
Writ of Execution,7 all dated February 19, 2002, issued by the RTC authorizing execution pending appeal.

On the other hand, the petition in G.R. No. 176982 assails the Decision 8 dated October 30, 2006 and Resolution9 dated March 12, 2007
of the CA in CA-G.R. CV No. 73965 which dismissed the appeal filed by GSIS, affirming with modification the Order 10 dated January 11,
2002 of the RTC rendering judgment on the pleadings.

The Facts

Sometime in March 1999, the National Electrification Administration (NEA) entered into a Memorandum of Agreement 11 (MOA) with
GSIS insuring all real and personal properties mortgaged to it by electrical cooperatives under an Industrial All Risks Policy (IAR
policy).12 The total sum insured under the IAR policy was ₱16,731,141,166.80, out of which, 95% or ₱15,894,584,108.40 was reinsured
by GSIS with PGAI for a period of one year or from March 5, 1999 to March 5, 2000. 13 As reflected in Reinsurance Request Note No.
99-15014 (reinsurance cover) and the Reinsurance Binder15 dated April 21, 1999 (reinsurance binder), GSIS agreed to pay PGAI
reinsurance premiums in the amount of ₱32,885,894.52 per quarter or a total of ₱131,543,578.08. 16 While GSIS remitted to PGAI the
reinsurance premiums for the first three quarters, it, however, failed to pay the fourth and last reinsurance premium due on December
5, 1999 despite demands. This prompted PGAI to file, on November 15, 2001, a Complaint 17 for sum of money (complaint) against
GSIS before the RTC, docketed as Civil Case No. 01-1634.

In its complaint, PGAI alleged, among others, that: (a) after it had issued the IAR policy, it further reinsured the risks covered under the
said reinsurance with reputable reinsurers worldwide such as Lloyds of London, Copenhagen Re, Cigna Singapore, CCR, Generali,
and Arig;18 (b) the first three reinsurance premiums were paid to PGAI by GSIS and, in the same vein, NEA paid the first three
reinsurance premiums due to GSIS;19 (c) GSIS failed to pay PGAI the fourth and last reinsurance premium due on December 5,
1999;20 (d) the IAR policy remained in full force and effect for the entire insurable period and, in fact, the losses/damages on various
risks reinsured by PGAI were paid and accordingly settled by it;21 (e) PGAI is under continuous pressure from its reinsurers in the
international market to settle the matter;22 and (f) GSIS acknowledged its obligation to pay the last reinsurance premium as it, in turn,
demanded from NEA the fourth and last reinsurance premium.23

89
In its Answer,24 GSIS admitted, among others, that: (a) its request for reinsurance cover was accepted by PGAI in a reinsurance
binder;25 (b) it remitted to PGAI the first three reinsurance premiums which were paid by NEA; 26 and (c) it failed to remit the fourth and
last reinsurance premium to PGAI.27 It, however, denied, inter alia, that: (a) it had acknowledged its obligation to pay the last quarter’s
reinsurance premium to PGAI;28 and (b) the IAR policy remained in full force and effect for the entire insurable period of March 5, 1999
to March 5, 2000.29 GSIS also proffered the following affirmative defenses: (a) the complaint states no cause of action against GSIS
because the non-payment of the last reinsurance premium only renders the reinsurance contract ineffective, and does not give PGAI a
right of action to collect;30 (b) pursuant to the regulations issued by the Commission on Audit, GSIS is prohibited from advancing
payments to PGAI occasioned by the failure of the principal insured, NEA, to pay the insurance premium; 31 and (c) PGAI’s cause of
action lies against NEA since GSIS merely acted as a conduit. 32 By way of counterclaim, GSIS prayed that PGAI be ordered to pay
exemplary damages, including litigation expenses, and costs of suit. 33

On December 18, 2001, PGAI filed a Motion for Judgment on the Pleadings 34 averring that GSIS essentially admitted the material
allegations of the complaint, such as: (a) the existence of the MOA between NEA and GSIS; (b) the existence of the reinsurance binder
between GSIS and PGAI; (c) the remittance by GSIS to PGAI of the first three quarterly reinsurance premiums; and (d) the
failure/refusal of GSIS to remit the fourth and last reinsurance premium. 35 Hence, PGAI prayed that the RTC render a judgment on the
pleadings pursuant to Section 1, Rule 34 of the Rules of Court (Rules). GSIS opposed 36 the foregoing motion by reiterating the
allegations and defenses in its Answer.

On January 11, 2002, the RTC issued an Order37 (January 11, 2002 Order) granting PGAI’s Motion for Judgment on the Pleadings. It
observed that the admissions of GSIS that it paid the first three quarterly reinsurance premiums to PGAI affirmed the validity of the
contract of reinsurance between them. As such, GSIS cannot now renege on its obligation to remit the last and remaining quarterly
reinsurance premium.38 It further pointed out that while it is true that the payment of the premium is a requisite for the validity of an
insurance contract as provided under Section 77 of Presidential Decree No. (PD) 612, 39 otherwise known as "The Insurance Code," it
was held in Makati Tuscany Condominium Corp. v. CA40 (Makati Tuscany) that insurance policies are valid even if the premiums were
paid in installments, as in this case.41 Thus, in view of the foregoing, the RTC ordered GSIS to pay PGAI the last quarter reinsurance
premium in the sum of ₱32,885,894.52, including interests amounting to ₱6,519,515.91 as of July 31, 2000 until full payment,
attorney’s fees, and costs of suit.42 Dissatisfied, GSIS filed a notice of appeal.43

Meanwhile, PGAI filed a Motion for Execution Pending Appeal44 based on the following reasons: (a) GSIS’ appeal was patently dilatory
since it already acknowledged the validity of PGAI’s claim;45 (b) GSIS posted no valid defense as its Answer raised no genuine
issues;46 and (c) PGAI would suffer serious and irreparable injury as it may be blacklisted as a consequence of the non-payment of
premiums due.47 PGAI also manifested its willingness to post a sufficient surety bond to answer for any resulting damage to
GSIS.48 The latter opposed49 the motion asserting that there lies no sufficient ground or urgency to justify execution pending appeal. It
also claimed that all its funds and properties are exempted from execution citing Section 39 of Republic Act No. (RA) 8291, 50 otherwise
known as "The Government Service Insurance System Act of 1997." 51

On February 14, 2002, the RTC issued an Order52 (February 14, 2002 Order) granting PGAI’s Motion for Execution Pending Appeal,
conditioned on the posting of a bond. It further held that only the GSIS Social Insurance Fund is exempt from execution. Accordingly,
PGAI duly posted a surety bond which the RTC approved through an Order 53 dated February 19, 2002, resulting to the issuance of a
writ of execution54 and notices of garnishment55 (February 19, 2002 issuances), all of even date, against GSIS.

The CA Proceedings Antecedent to G.R. No. 165585

Aggrieved by the RTC’s February 14, 2002 Order, as well as the February 19, 2002 issuances, GSIS – without first filing a motion for
reconsideration (from the said order of execution) or a sufficient supersedeas bond 56 – filed on February 26, 2002 a petition for
certiorari57 before the CA, docketed as CA-G.R. SP No. 69289, against the RTC and PGAI. It also impleaded in the said petition the
Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) as nominal parties so as to render them
subject to the writs and processes of the CA.58

In its petition, GSIS argued that: (a) none of the grounds proffered by PGAI justifies the issuance of a writ of execution pending
appeal;59 and (b) all funds and assets of GSIS are exempt from execution and levy in accordance with RA 8291. 60

On April 4, 2002, the CA issued a temporary restraining order (TRO) 61 enjoining the garnishment of GSIS’ funds with LBP and DBP.
Nevertheless, since the TRO’s effectivity lapsed, GSIS’ funds with the LBP were eventually garnished. 62

On May 26, 2004, the CA rendered a Decision63 dismissing GSIS’ petition, upholding, among others, the validity of the execution
pending appeal pursuant to the RTC’s February 14, 2002 Order as well as the February 19, 2002 issuances. It found that the
impending blacklisting of PGAI constitutes a good reason for allowing the execution pending appeal (also known as "discretionary
execution") considering that the imposition of international sanctions on any single local insurance company puts in grave and
immediate jeopardy not only the viability of that company but also the integrity of the entire local insurance system including that of the
state insurance agency. It pointed out that the insurance business thrives on credibility which is maintained by honoring financial
commitments.

90
On the claimed exemption of GSIS funds from execution, the CA held that such exemption only covers funds under the Social
Insurance Fund which remains liable for the payment of benefits like retirement, disability and death compensation and not those
covered under the General Insurance Fund, as in this case, which are meant for investment in the business of insurance and
reinsurance.64

GSIS’ motion for reconsideration65 was denied by the CA in a Resolution66 dated October 6, 2004. Hence, the petition for review on
certiorari in G.R. No. 165585.67

The CA Proceedings Antecedent to G.R. No. 176982

Separately, GSIS also assailed the RTC’s January 11, 2002 Order which granted PGAI’s Motion for Judgment on the Pleadings
through an appeal68 filed on October 7, 2002, docketed as CA G.R. CV No. 73965.

GSIS averred that the RTC gravely erred in: (a) rendering judgment on the pleadings since it specifically denied the material allegations
in PGAI’s complaint; (b) ordering execution pending appeal since there are no justifiable reasons for the same; and (c) effecting
execution against funds and assets of GSIS given that RA 8291 exempts the same from levy, execution and garnishment. 69

For its part, PGAI maintained that: (a) the judgment on the pleadings was in order given that GSIS never disputed the facts as alleged
in its complaint; (b) the discretionary execution was proper in view of the dilatory methods employed by GSIS in order to evade the
payment of a valid obligation; and (c) the general insurance fund of GSIS, which was attached and garnished by the RTC, is not exempt
from execution.70

In a Decision71 dated October 30, 2006, the CA sustained the RTC’s January 11, 2002 Order but deleted the awards of interest and
attorney’s fees for lack of factual and legal basis.72

The CA ruled that judgment on the pleadings was proper since GSIS did not specifically deny the genuineness, due execution, and
perfection of its reinsurance contract with PGAI.73 In fact, PGAI even settled reinsurance claims during the covering period rendering
the reinsurance contract not only perfected but partially executed as well. 74

Passing on the issue of the exemption from execution of GSIS funds, the CA, citing Rubia v. GSIS 75 (Rubia), held that the exemption
provided for by RA 8291 is not absolute since it only pertains to the social security benefits of its members; thus, funds used by the
GSIS for business investments and commercial ventures, as in this case, may be attached and garnished. 76

GSIS’ motion for reconsideration77 was denied by the CA in a Resolution78 dated March 12, 2007. Hence, the present petition for review
on certiorari in G.R. No. 176982.79

The Issues Before the Court

In these consolidated petitions, the essential issues are the following: (a) in G.R. No. 165585, whether the CA erred in (1) upholding the
RTC’s February 14, 2002 Order authorizing execution pending appeal, and (2) ruling that only the Social Insurance Fund and not the
General Fund of the GSIS is exempt from garnishment; and (b) in G.R. No. 176982, whether the CA erred in sustaining the RTC’s
January 11, 2002 Order rendering judgment on the pleadings.

The Court’s Ruling

The petitions are partly meritorious.

A. Good reasons to allow execution pending appeal and the nature of the exemption under Section 39 of RA 8291.

The execution of a judgment pending appeal is an exception to the general rule that only a final judgment may be executed. 80 In order
to grant the same pursuant to Section 2,81 Rule 39 of the Rules, the following requisites must concur: (a) there must be a motion by the
prevailing party with notice to the adverse party; (b) there must be a good reason for execution pending appeal; and (c) the good
reason must be stated in a special order.82

Good reasons call for the attendance of compelling circumstances warranting immediate execution for fear that favorable judgment may
yield to an empty victory. In this regard, the Rules do not categorically and strictly define what constitutes "good reason," and hence, its
presence or absence must be determined in view of the peculiar circumstances of each case. As a guide, jurisprudence dictates that
the "good reason" yardstick imports a superior circumstance that will outweigh injury or damage to the adverse party. 83 Corollarily, the
requirement of "good reason" does not necessarily entail unassailable and flawless basis but at the very least, an invocation thereof
must be premised on solid footing.84

91
In the case at bar, the RTC, as affirmed by the CA, granted PGAI’s motion for execution pending appeal on the ground that the
impending sanctions against it by foreign underwriters/reinsurers constitute good reasons therefor. It must, however, be observed that
PGAI has not proffered any evidence to substantiate its claim, as it merely presented bare allegations thereon. It is hornbook doctrine
that mere allegations do not constitute proof. As held in Real v. Belo, 85 "it is basic in the rule of evidence that bare allegations,
unsubstantiated by evidence, are not equivalent to proof. In short, mere allegations are not evidence." 86 Hence, without any sufficient
basis to support the existence of its alleged "good reasons," it cannot be said that the second requisite to allow an execution pending
appeal exists. To reiterate, the requirement of "good reasons" must be premised on solid footing so as to ensure that the "superior
circumstance" which would impel immediate execution is not merely contrived or based on speculation. This, however, PGAI failed to
demonstrate in the present case. In fine, the Court therefore holds that the CA’s affirmance of the RTC’s February 14, 2002 Order
authorizing execution pending appeal, as well as the February 19, 2002 issuances related thereto, was improper.

Nevertheless, while an execution pending appeal should not lie in view of the above-discussed reasons, it must be noted that the funds
and assets of GSIS may – after the resolution of the appeal and barring any provisional injunction thereto – be subject to execution,
attachment, garnishment or levy since the exemption under Section 39 of RA 8291 87 does not operate to deny private entities from
properly enforcing their contractual claims against GSIS.88 This has been established in the case of Rubia wherein the Court held as
follows:

The declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from tax, lien, attachment, levy,
execution, and other legal processes should be read together with the grant of power to the GSIS to invest its "excess funds" under
Section 36 of the same Act. Under Section 36, the GSIS is granted the ancillary power to invest in business and other ventures for the
benefit of the employees, by using its excess funds for investment purposes. In the exercise of such function and power, the GSIS is
allowed to assume a character similar to a private corporation. Thus, it may sue and be sued, as also explicitly granted by its charter.

Needless to say, where proper, under Section 36, the GSIS may be held liable for the contracts it has entered into in the course of its
business investments. For GSIS cannot claim a special immunity from liability in regard to its business ventures under said Section.

Nor can it deny contracting parties, in our view, the right of redress and the enforcement of a claim, particularly as it arises from a purely
contractual relationship of a private character between an individual and the GSIS. 89 (Emphases supplied and citations omitted)

Thus, the petition in G.R. No. 165585 is partly granted.

B. Propriety of judgment on the pleadings.

Judgment on the pleadings is appropriate when an answer fails to tender an issue, or otherwise admits the material allegations of the
adverse party’s pleading. The rule is stated in Section 1, Rule 34 of the Rules which reads as follows:

Sec. 1. Judgment on the pleadings. – Where an answer fails to tender an issue, or otherwise admits the material allegations of the
adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. x x x.

In this relation, jurisprudence dictates that an answer fails to tender an issue if it does not comply with the requirements of a specific
denial as set out in Sections 890 and 10,91 Rule 8 of the Rules, resulting in the admission of the material allegations of the adverse
party’s pleadings.92

As such, it is a form of judgment that is exclusively based on the submitted pleadings without the introduction of evidence as the factual
issues remain uncontroverted.93

In this case, records disclose that in its Answer, GSIS admitted the material allegations of PGAI’s complaint warranting the grant of the
relief prayed for. In particular, GSIS admitted that: (a) it made a request for reinsurance cover which PGAI accepted in a reinsurance
binder effective for one year;94 (b) it remitted only the first three reinsurance premium payments to PGAI; 95 (c) it failed to pay PGAI the
fourth and final reinsurance premium installment;96 and (d) it received demand letters from PGAI.97 It also did not refute the allegation of
PGAI that it settled reinsurance claims during the reinsured period. On the basis of these admissions, the Court finds that the CA did
not err in affirming the propriety of a judgment on the pleadings.

GSIS’ affirmative defense that the non-payment of the last reinsurance premium merely rendered the contract ineffective pursuant to
Section 7798 of PD 612 no longer involves any factual issue, but stands solely as a mere question of law in the light of the foregoing
admissions hence allowing for a judgment on the pleadings. Besides, in the case of Makati Tuscany, the Court already ruled that the
non-payment of subsequent installment premiums would not prevent the insurance contract from taking effect; that the parties intended
to make the insurance contract valid and binding is evinced from the fact that the insured paid – and the insurer received – several
reinsurance premiums due thereon, although the former refused to pay the remaining balance, viz:

We hold that the subject policies are valid even if the premiums were paid on installments. The records clearly show that petitioner and
private respondent intended subject insurance policies to be binding and effective notwithstanding the staggered payment of the
premiums. The initial insurance contract entered into in 1982 was renewed in 1983, then in 1984. In those three (3) years, the insurer

92
accepted all the installment payments. Such acceptance of payments speaks loudly of the insurer’s intention to honor the policies it
issued to petitioner. Certainly, basic principles of equity and fairness would not allow the insurer to continue collecting and accepting the
premiums, although paid on installments, and later deny liability on the lame excuse that the premiums were not prepaid in full.

We therefore sustain the Court of Appeals. We quote with approval the well-reasoned findings and conclusion of the appellate court
contained in its Resolution denying the motion to reconsider its Decision —

While the import of Section 77 is that prepayment of premiums is strictly required as a condition to the validity of the contract, We are
not prepared to rule that the request to make installment payments duly approved by the insurer, would prevent the entire contract of
insurance from going into effect despite payment and acceptance of the initial premium or first installment . Section 78 of the Insurance
Code in effect allows waiver by the insurer of the condition of prepayment by making an acknowledgment in the insurance policy of
receipt of premium as conclusive evidence of payment so far as to make the policy binding despite the fact that premium is actually
unpaid. Section 77 merely precludes the parties from stipulating that the policy is valid even if premiums are not paid, but does not
expressly prohibit an agreement granting credit extension, and such an agreement is not contrary to morals, good customs, public order
or public policy (De Leon, the Insurance Code, at p. 175). So is an understanding to allow insured to pay premiums in installments not
so proscribed. At the very least, both parties should be deemed in estoppel to question the arrangement they have voluntarily accepted.

[I]n the case before Us, petitioner paid the initial installment and thereafter made staggered payments resulting in full payment of the
1982 and 1983 insurance policies.1âwphi1 For the 1984 policy, petitioner paid two (2) installments although it refused to pay the
balance.

It appearing from the peculiar circumstances that the parties actually intended to make three (3) insurance contracts valid, effective and
binding, petitioner may not be allowed to renege on its obligation to pay the balance of the premium after the expiration of the whole
term of the third policy (No. AH-CPP-9210651) in March 1985. Moreover, as correctly observed by the appellate court, where the risk is
entire and the contract is indivisible, the insured is not entitled to a refund of the premiums paid if the insurer was exposed to the risk
insured for any period, however brief or momentary.99 (Emphases supplied and citation omitted)

Thus, owing to the identical complexion of Makati Tuscany with the present case, the Court upholds PGAI’s right to be paid by GSIS the
amount of the fourth and last reinsurance premium pursuant to the reinsurance contract between them. All told, the petition in G.R. No.
176982 is denied.

WHEREFORE, the petition in G.R. No. 165585 is PARTLY GRANTED. The Decision dated May 26, 2004 and Resolution dated
October 6, 2004 of the Court of Appeals in CA-G.R. SP No. 69289 are MODIFIED only insofar as it upheld the validity of Prudential
Guarantee and Assurance, Inc.’s execution pending appeal. In this respect, the Order dated February 14, 2002 of the Regional Trial
Court of Makati, Branch 149 as well as all other issuances related thereto are set aside.

On the other hand, the petition in G.R. No. 176982 is DENIED. The Decision dated October 30, 2006 and Resolution dated March 12,
2007 in CA-G.R. CV No. 73965 are hereby AFFIRMED.

SO ORDERED.

93
Asian Construction v. Sanneadle, G.R. No. 181676, June 11, 2014

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 181676 June 11, 2014

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,

vs.
SANNAEDLE CO., LTD., Respondent.

DECISION

PERALTA, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision 1 and
Resolution,2 dated April 25, 2006 and February 6, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 71916.

The facts follow.

This case stemmed from a Complaint3 for Sum of Money filed by respondent against petitioner. The complaint alleged that petitioner
and respondent executed a Memorandum of Agreement wherein respondent was engaged to supply and erect insulated panel systems
at various pavilions at the Philippine Centennial Exposition Theme Park, specifically for the Phase I Project, for an agreed amount of
US$3,745,287.94.

Pursuant to the Memorandum of Agreement, petitioner made various payments amounting to US$3,129,667.32 leaving a balance of
US$615,620.33. Respondent claims that it made several written demands for petitioner to pay the said balance, but the latter
continuously refused to heed its plea.

Thereafter, petitioner filed its Answer with Counterclaim.4

Respondent then moved for judgment on the pleadings on the ground that the Answer admitted all material allegations of the Complaint
and, therefore, failed to tender an issue. Thus, respondent deems that petitioner’s Answer, in effect, admitted the existence of the
Memorandum of Agreement and its failure to pay the balance despite repeated demands.

In a Judgment5 dated October 6, 2000, the Regional Trial Court (RTC) of Makati City rendered judgment in favor of respondent.
Pertinent portions of said decision read:

In claiming that the Answer of the [petitioner] failed to tender an issue, [respondent] argued that the present action is for collection of
the amount of US$615,620.33 with interest at the rate of 12% per annum, which amount represents the balance of the payment under
the Memorandum of Agreement, Annex B of the Complaint entered into between [respondent] and [petitioner] which was not denied in
the Answer. [Respondent] further claimed that in a letter dated February 2, 2000, Annex C of the Complaint, it demanded payment of
the said amount of US$615,620.33 and in reply thereto, [petitioner] stated in part –

"We refer to your letter dated February 2, 2000 regarding the US$2,635,333.00 balance unpaid claim of SANNAEDLE.

xxx xxx xxx

2. Phase I Contract

While we recognize being obligated to this amount, we do not have at the moment the capability to pay it. This is because our financial
position has been severely affected by the freezing of the government of all our collectibles on EXPO projects including the ₱80M
(approx. US$2.0M) from DPWH intended to pay the cost increment of reverting back the use of Sannaedle in Phase I.

xxx xxx xxx

94
The partial amount of about US$1.4M paid by ASIAKONSTRUKT to Sannaedle in excess of its allocated budget of US$1.745M actually
came from its own source and initiatives. This effort made by ASIAKONSTRUKT significantly reduced the balance due Sannaedle to
only US$615,620.33.

xxx xxx xxx

The Court notes that in the Answer with Counterclaim of the [petitioner], the execution of the Memorandum of Agreement, Annex B of
the Complaint was admitted (paragraph 13, Answer). Further, it did not deny specifically the claim of the [respondent] of being entitled
to collect the said amount of US$615,620.33.6

xxxx

WHEREFORE, judgment is rendered in favor [of] the [respondent] and [petitioner] is ordered to pay [respondent] the amount of US
$615,620.33 with interest thereon at the rate of 12% per annum from February 2, 2000 until fully paid.

No pronouncement as to costs.

SO ORDERED.7

Petitioner filed a motion for reconsideration against said decision. However, the same was denied in an Order 8 dated December 13,
2000.

Thus, petitioner filed an appeal before the CA.

On April 25, 2006, the CA rendered its assailed Decision which disposed as follows:

WHEREFORE, the instant appeal is DISMISSED. The judgment of the Regional Trial Court of Makati City, Branch 138, dated October
6, 2000, is hereby AFFIRMED.

Costs against the [petitioner].

SO ORDERED.9

Petitioner filed a motion for reconsideration, but the CA denied it in a Resolution dated February 6, 2008.

Hence, the present petition wherein petitioner raises this sole issue for our resolution: whether or not judgment on the pleadings is
proper.

Petitioner contends that the judgment on the pleadings is not proper, because it raised special and affirmative defenses in its Answer. It
asserts that with this specific denial, a genuine issue of fact had been joined to the extent that a judgment on the pleadings could not be
made.

For its part, respondent counters that petitioner’s Answer admitted the material allegations of its complaint regarding the cause of
action, which is collection of sum of money. Respondent emphasizes that assuming petitioner’s defense of respondent’s lack of
capacity to sue has a leg to stand on, still, the same cannot prevent respondent from seeking the collection of petitioner’s unpaid
balance.

The Court finds the petition bereft of merit.

Judgment on the pleadings is governed by Section 1, Rule 34 of the 1997 Rules of Civil Procedure which reads:

Sec. 1. Judgment on the pleadings. – Where an answer fails to tender an issue, or otherwise admits the material allegations of the
adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. However, in actions for declaration
of nullity or annulment of marriage or for legal separation, the material facts alleged in the complaint shall always be proved. 10

Judgment on the pleadings is proper when an answer fails to tender an issue, or otherwise admits the material allegations of the
adverse party’s pleading. An answer fails to tender an issue if it does not comply with the requirements of a specific denial as set out in
Sections 811 and 10,12 Rule 8 of the 1997 Rules of Civil Procedure, resulting in the admission of the material allegations of the adverse
party’s pleadings.13

95
This rule is supported by the Court’s ruling in Mongao v. Pryce Properties Corporation 14 wherein it was held that "judgment on the
pleadings is governed by Section 1,Rule 34 of the 1997 Rules of Civil Procedure, essentially a restatement of Section 1, Rule 19 of the
1964 Rules of Court then applicable to the proceedings before the trial court. Section 1, Rule 19 of the Rules of Court provides that
where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading, the court may, on
motion of that party, direct judgment on such pleading. The answer would fail to tender an issue, of course, if it does not comply with
the requirements for a specific denial set out in Section 10 (or Section 8) of Rule 8; and it would admit the material allegations of the
adverse party’s pleadings not only where it expressly confesses the truthfulness thereof but also if it omits to deal with them at all." 15

Further, in First Leverage and Services Group, Inc. v. Solid Builders, Inc., 16 this Court held that where a motion for judgment on the
pleadings is filed, the essential question is whether there are issues generated by the pleadings. In a proper case for judgment on the
pleadings, there is no ostensible issue at all because of the failure of the defending party’s answer to raise an issue. The answer would
fail to tender an issue, of course, if it does not deny the material allegations in the complaint or admits said material allegations of the
adverse party’s pleadings by confessing the truthfulness thereof and/or omitting to deal with them at all. 17

Here, it is irrefutable that petitioner acknowledged having entered into a Memorandum of Agreement with respondent and that it still has
an unpaid balance of US$615,620.33.

We note that respondent’s complaint for a sum of money is based mainly on the alleged failure of petitioner to pay the balance of
US$615,620.33 under the Memorandum of Agreement. Quoting petitioner’s Answer, it is obvious that it admitted the foregoing material
allegations in paragraphs 3, 4 and 5 of the complaint, which states as follows:

3. The [Petitioner] ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION ("ASIAKONSTRUKT" for brevity), is a
corporation duly incorporated under the laws of the Philippines, with capacity to sue and be sued, and with business address
at the Second Floor, Union Ajinomoto Building, Sen. Gil Puyat Avenue, Makati City, and within the jurisdiction of this
Honorable Court; and where it may be served with summons and other court processes of this Honorable Court,

4. That the [respondent] and the [petitioner] entered into a Memorandum of Agreement in Makati City, within the jurisdiction of
this Honorable Court, dated February 17, 1998, wherein the [Petitioner] corporation agreed with and ordered the herein
[Respondent], as Contractor, to design and install INSUPANEL SYSTEMS at various pavilions, etc. at expo projects site; and
specifically for the Phase I project at an agreed amount of US$3,745,287.94(Par. 2.1). A xerox copy of this Memorandum of
Agreement dated February 17, 1998 between [Respondent] and [Petitioner] consisting of six (6) pages, is attached hereto as
Annex B and made an integral part hereof.

5. That pursuant to this Memorandum of Agreement (Exhibit B)and contract price of US$3,745,287.94, various payments have
been made by [Petitioner] Corporation on this Phase I project totaling US$3,129,667.32, thus leaving a balance of
US$615,620.33.18

While petitioner allegedly raised affirmative defenses, i.e., defect in the certification of non-forum shopping, no legal capacity to sue and
fortuitous event, the same cannot still bar respondent from seeking the collection of the unpaid balance. Other than these affirmative
defenses, petitioner’s denial neither made a specific denial that a Memorandum of Agreement was perfected nor did it contest the
genuineness and due execution of said agreement.

We, therefore, sustain the CA and quote with approval the well-reasoned findings and conclusions of the appellate court contained in its
Decision, to wit:

The [respondent’s] cause of action for collection of Sum of Money is founded mainly on the Memorandum of Agreement validly
executed by both parties.

First, the allegations in the [petitioner’s] Answer do not make out a specific denial that a Memorandum of Agreement was perfected
between the parties. Second, the [respondent] does not contest the due execution and/or genuineness of said Memorandum of
Agreement. In fact, paragraph 13 of the Answer categorically admits paragraphs 4 and 5 of the Complaint.

In its Answer, the [petitioner] offered the following defenses, to wit:

19. The complaint should be dismissed on the ground that [respondent's J certification of non-forum shopping is
defective.1âwphi1 Rule 7, Section 5 of the 1997 Revised Rules of Civil Procedure ... xxx xxx xxx

22. [Respondent] has no legal capacity to sue, as it is a foreign corporation doing business in the Philippines without a valid
license. xxx xxx xxx

27. The unexpected default of FCCC on its obligations to [petitioner} on account of the Senate Blue Ribbon Committee
investigation was a fortuitous event which suspended, if not extinguished [petitioner's} obligation to FCCC.

96
In essence, the [petitioner] justifies its refusal to tender payment of the balance of US$615,620.33 to the [respondent], to the failure of
the First Centennial Clark Corporation (FCCC) to comply with its obligations to ASIAKONSTRUKT which [it] characterizes as a
fortuitous event.

The defenses raised by [petitioner] cannot prevent the [respondent] from seeking the collection of the amount of US$615,620.33. The
express terms of the Memorandum of Agreement, the genuineness and due execution of which are not denied by the [petitioner]. It
cannot assert the said defenses in order to resist the [respondent's] claim for the aforesaid sum of money, especially where it has been
sufficiently shown by the allegations of the Complaint and the Answer that the [petitioner] is clearly liable for the payment thereof. 19

WHEREFORE, the instant petition is DENIED. The Decision dated April 25, 2006 and Resolution dated February 6, 2008 of the Court
of Appeals are hereby AFFIRMED.

SO ORDERED.

97
Fernando Medical Enterprises,Inc vs Wesleyan University Philippines, G.R. No. 207970, January 20, 2016

G.R. NO. 207970

FERNANDO MEDICAL ENTERPRISES, INC., Petitioner,

vs.
WESLEYAN UNIVERSITY PHILIPPINES, INC., Respondent.

DECISION

BERSAMIN, J.:

The trial court may render a judgment on the pleadings upon motion of the claiming party when the defending
party's answer fails to tender an issue, or otherwise admits the material allegations of the adverse party's pleading.
For that purpose, only the pleadings of the parties in the action are considered. It is error for the trial court to deny
the motion for judgment on the pleadings because the defending party's pleading in another case supposedly
tendered an issue of fact.

The Case

The petitioner appeals the decision promulgated on July 2, 2013, whereby the Court of Appeals (CA) affirmed the
1

order issued on November 23, 2011 by the Regional Trial Court (RTC), Branch 1, in Manila, denying its motion for
judgment on the pleadings in Civil Case No. 09-122116 entitled Fernando Medical Enterprises, Inc. v. Wesleyan
University-Philippines.2

Antecedents

From January 9, 2006 until February 2, 2007, the petitioner, a domestic corporation dealing with medical equipment
and supplies, delivered to and installed medical equipment and supplies at the respondent’s hospital under the
following contracts:

a. Memorandum of Agreement dated January 9, 2006 for the supply of medical equipment in the total
amount of P18,625,000.00; 3

b. Deed of Undertaking dated July 5, 2006 for the installation of medical gas pipeline system valued at
P8,500,000.00; 4

c. Deed of Undertaking dated July 27, 2006 for the supply of one unit of Diamond Select Slice CT and one
unit of Diamond Select CV-P costing P65,000,000.00; and 5

d. Deed of Undertaking dated February 2, 2007 for the supply of furnishings and equipment worth
P32,926,650.00. 6

According to the petitioner, the respondent paid only P67,357,683.23 of its total obligation of P123,901,650.00,
leaving unpaid the sum of P54,654,195.54. However, on February 11, 2009, the petitioner and the respondent,
7

respectively represented by Rafael P. Fernando and Guillermo T. Maglaya, Sr., entered into an
agreement, whereby the former agreed to reduce its claim to only P50,400,000.00, and allowed the latter to pay the
8

adjusted obligation on installment basis within 36 months. 9

In the letter dated May 27, 2009, the respondent notified the petitioner that its new administration had reviewed
10

their contracts and had found the contracts defective and rescissible due to economic prejudice or lesion; and that it
was consequently declining to recognize the February 11, 2009 agreement because of the lack of approval by its
Board of Trustees and for having been signed by Maglaya whose term of office had expired.

On June 24, 2009, the petitioner sent a demand letter to the respondent. 11

98
Due to the respondent’s failure to pay as demanded, the petitioner filed its complaint for sum of money in the
RTC, averring as follows:
12

xxxx

2. On January 9, 2006, plaintiff supplied defendant with hospital medical equipment for an in consideration
of P18,625,000.00 payable in the following manner: (2.1) For nos. 1 to 9 of items to be sourced from
Fernando Medical Equipment, Inc. (FMEI) – 30% down payment of P17,475,000 or P5,242,500 with the
balance of P12,232,500 or 70% payable in 24 equal monthly instalments of P509,687.50 and (2.2.) cash
transaction amounting to P1,150,000.00 (2.3) or an initial cash payment of P6,392,500.00 with the remaining
balance payable in 24 equal monthly installments every 20th day of each month until paid, as stated in the
Memorandum of Agreement, copy of which is hereto attached as Annex "A";

3. On July 5, 2006, plaintiff installed defendants medical gas pipeline system in the latter’s hospital building
complex for and in consideration of P8,500,000.00 payable upon installation thereof under a Deed of
Undertaking, copy of which is hereto attached as Annex "B";

4. On July 27, 2006, plaintiff supplied defendant one (1) unit Diamond Select Slice CT and one (1) unit
Diamond Select CV-9 for and in consideration of P65,000,000.00 thirty percent (30%) of which shall be paid
as down payment and the balance in 30 equal monthly instalments as provided in that Deed of Undertaking,
copy of which is hereto attached as Annex "C";

5. On February 2, 2007, plaintiff supplied defendants hospital furnishings and equipment for an in
consideration of P32,926,650.00 twenty percent (20%) of which was to be paid as downpayment and the
balance in 30 months under a Deed of Undertaking, copy of which is hereto attached as Annex "D";

6. Defendant’s total obligation to plaintiff was P123,901,650.00 as of February 15, 2009, but defendant was
able to pay plaintiff the sum of P67,357,683.23 thus leaving a balance P54,654,195.54 which has become
overdue and demandable;

7. On February 11, 2009, plaintiff agreed to reduce its claim to only P50,400,000.00 and extended its
payment for 36 months provided defendants shall pay the same within 36 months and to issue 36 postdated
checks therefor in the amount of P1,400,000.00 each to which defendant agreed under an Agreement, copy
of which is hereto attached as Annex "E";

8. Accordingly, defendant issued in favor of plaintiff 36 postdated checks each in the [a]mount of
P1,400,000.00 but after four (4) of the said checks in the sum of P5,600,000.00 were honored defendant
stopped their payment thus making the entire obligation of defendant due and demandable under the
February 11, 2009 agreement;

9. In a letter dated May 27, 2009, defendant claimed that all of the first four (4) agreements may be
rescissible and one of them is unenforceable while the Agreement dated February 11, 2009 was without the
requisite board approval as it was signed by an agent whose term of office already expired, copy of which
letter is hereto attached as Annex "F";

10. Consequently, plaintiff told defendant that if it does not want to honor the February 11, 2009 contract
then plaintiff will insists [sic] on its original claim which is P54,654,195.54 and made a demand for the
payment thereof within 10 days from receipt of its letter copy of which is hereto attached as Annex "G";

11. Defendant received the aforesaid letter on July 6, 2009 but to date it has not paid plaintiff any amount,
either in the first four contracts nor in the February 11, 2009 agreement, hence, the latter was constrained to
institute the instant suit and thus incurred attorney’s fee equivalent to 10% of the overdue account but only
after endeavouring to resolve the dispute amicable and in a spirit of friendship[;]

99
 12. Under the February 11, 2009 agreement the parties agreed to bring all actions or proceedings
thereunder or characterized therewith in the City of Manila to the exclusion of other courts and for defendant
to pay plaintiff 3% per months of delay without need of demand; 13

xxxx

The respondent moved to dismiss the complaint upon the following grounds, namely: (a) lack of jurisdiction over
14

the person of the defendant; (b) improper venue; (c) litis pendentia; and (d) forum shopping. In support of the
ground of litis pendentia, it stated that it had earlier filed a complaint for the rescission of the four contracts and of
the February 11, 2009 agreement in the RTC in Cabanatuan City; and that the resolution of that case would be
determinative of the petitioner’s action for collection.15

After the RTC denied the motion to dismiss on July 19, 2009, the respondent filed its answer (ad
16

cautelam), averring thusly:

17

xxxx

2. The allegations in Paragraphs Nos. 2, 3, 4, and 5 of the complaint are ADMITTED subject to the special
and affirmative defenses hereafter pleaded;

3. The allegations in Paragraphs Nos. 6, 7 and 8 of the complaint are DENIED for lack of knowledge or
information sufficient to form a belief as to the truth or falsity thereof, inasmuch as the alleged transactions
were undertaken during the term of office of the past officers of defendant Wesleyan University-Philippines.
At any rate, these allegations are subject to the special and affirmative defenses hereafter pleaded;

4. The allegations in Paragraphs Nos. 9 and 10 of the complaint are ADMITTED subject to the special and
affirmative defenses hereafter pleaded;

5. The allegations in Paragraphs Nos. 11 and 12 of the complaint are DENIED for being conclusions of law. 18

xxxx

The petitioner filed its reply to the answer. 19

On September 28, 2011, the petitioner filed its Motion for Judgment Based on the Pleadings, stating that the
20

respondent had admitted the material allegations of its complaint and thus did not tender any issue as to such
allegations.

The respondent opposed the Motion for Judgment Based on the Pleadings, arguing that it had specifically denied
the material allegations in the complaint, particularly paragraphs 6, 7, 8, 11 and 12. 21

On November 23, 2011, the RTC issued the order denying the Motion for Judgment Based on the Pleadings of the
petitioner, to wit:

At the hearing of the "Motion for Judgment Based on the Pleadings" filed by the plaintiff thru counsel, Atty. Jose
Mañacop on September 28, 2011, the court issued an Order dated October 27, 2011 which read in part as follows:

xxxx

Considering that the allegations stated on the Motion for Judgment Based on the Pleadings, are evidentiary in
nature, the Court, instead of acting on the same, hereby sets this case for pre-trial, considering that with the Answer
and the Reply, issues have been joined.

xxxx

100
In view therefore of the Order of the Court dated October 27, 2011, let the Motion for Judgment Based on the
Pleadings be hereby ordered DENIED on reasons as abovestated and hereto reiterated.

xxxx

SO ORDERED. 22

The petitioner moved for reconsideration, but its motion was denied on December 29, 2011.
23 24

The petitioner assailed the denial in the CA on certiorari. 25

Judgment of the CA

On July 2, 2013, the CA promulgated its decision. Although observing that the respondent had admitted the
contracts as well as the February 11, 2009 agreement, viz.:

It must be remembered that Private Respondent admitted the existence of the subject contracts, including
Petitioner’s fulfilment of its obligations under the same, but subjected the said admission to the "special and
affirmative defenses" earlier raised in its Motion to Dismiss.

xxxx

Obviously, Private Respondent’s special and affirmative defenses are not of such character as to avoid Petitioner’s
claim. The same special and affirmative defenses have been passed upon by the RTC in its Order dated July 19,
2010 when it denied Private Respondent’s Motion to Dismiss. As correctly found by the RTC, Private Respondent’s
special and affirmative defences of lack of jurisdiction over its person, improper venue, litis pendentia and wilful and
deliberate forum shopping are not meritorious and cannot operate to dismiss Petitioner’s Complaint. Hence, when
Private Respondent subjected its admission to the said defenses, it is as though it raised no defense at all.

Not even is Private Respondent’s contention that the rescission case must take precedence over Petitioner’s
Complaint for Sum of Money tenable. To begin with, Private Respondent had not yet proven that the subject
1avvphi1

contracts are rescissible. And even if the subject contracts are indeed rescissible, it is well-settled that rescissible
contracts are valid contracts until they are rescinded. Since the subject contracts have not yet been rescinded, they
are deemed valid contracts which may be enforced in legal contemplation.

In effect, Private Respondent admitted that it entered into the subject contracts and that Petitioner had performed its
obligations under the same.

As regards Private Respondent’s denial by disavowal of knowledge of the Agreement dated February 11, 2009, We
agree with Petitioner that such denial was made in bad faith because such allegations are plainly and necessarily
within its knowledge.

In its letter dated May 27, 2009, Private Respondent made reference to the Agreement dated February 11,
2009, viz.:

"The Agreement dated 11 February 2009, in particular, was entered into by an Agent of the University without the
requisite authority from the Board of Trustees, and executed when said agent’s term of office had already expired.
Consequently, such contract is, being an unenforceable contract."

Also, Private Respondent averred in page 5 of its Complaint for Rescission, which it attached to its Motion to
Dismiss, that:

"13. On 6 February 2009, when the terms of office of plaintiff’s Board of Trustess chaired by Dominador Cabasal, as
well as of Atty. Guillermo C. Maglaya as President, had already expired, thereby rendering them on a hold-over
capacity, the said Board once again authorized Atty. Maglaya to enter into another contract with defendant FMEI,

101
whereby the plaintiff was obligated to pay and deliver to defendant FMEI the amount of Fifty Million Four Hundred
Thousand Pesos (Php50,400,000.00) in thirty five (35) monthly instalments of One Million Four Hundred Thousand
Pesos (Php1,400,000.00), representing the balance of the payment for the medical equipment supplied under the
afore-cited rescissible contracts. This side agreement, executed five (5) days later, or on 11 February 2009, and
denominated as "AGREEMENT", had no object as a contract, but was entered into solely for the purpose of getting
the plaintiff locked-in to the payment of the balance price under the rescissible contracts; x x x"

From the above averments, Private Respondent cannot deny knowledge of the Agreement dated February 11,
2009. In one case, it was held that when a respondent makes a "specific denial" of a material allegation of the
petition without setting forth the substance of the matters relied upon to support its general denial, when such
matters where plainly within its knowledge and the defendant could not logically pretend ignorance as to the
same, said defendant fails to properly tender an issue. 26

the CA ruled that a judgment on the pleadings would be improper because the outstanding balance due to the
petitioner remained to be an issue in the face of the allegations of the respondent in its complaint for rescission in
the RTC in Cabanatuan City, to wit:

However, Private Respondent’s disavowal of knowledge of its outstanding balance is well-taken. Paragraph 6 of
Petitioner’s Complaint states that Private Respondent was able to pay only the amount of P67,357,683.23. Taken
together with paragraph 8, which states that Private Respondent was only able to make good four (4) check
payments worth P1,400,000.00 or a total of P5,600,000.00, Private Respondent’s total payments would be, in
Petitioner’s view, P72,957,683.23. However, in its Complaint for Rescission, attached to its Motion to Dismiss
Petitioner’s Complaint for Sum of Money, Private Respondent alleged that:

"16. To date, plaintiff had already paid defendant the amount of Seventy Eight Million Four Hundred One Thousand
Six Hundred Fifty Pesos (P78,401,650.00)"

It is apparent that Private Respondent’s computation and Petitioner’s computation of the total payments made by
Private Respondent are different. Thus, Private Respondent tendered an issue as to the amount of the balance due
to Petitioner under the subject contracts.27

Hence, this appeal.

Issue

The petitioner posits that the CA erred in going outside of the respondent’s answer by relying on the allegations
contained in the latter’s complaint for rescission; and insists that the CA should have confined itself to the
respondent’s answer in the action in order to resolve the petitioner’s motion for judgment based on the pleadings. 1âwphi1

In contrast, the respondent contends that it had specifically denied the material allegations of the petitioner’s
complaint, including the amount claimed; and that the CA only affirmed the previous ruling of the RTC that the
pleadings submitted by the parties tendered an issue as to the balance owing to the petitioner.

Did the CA commit reversible error in affirming the RTC’s denial of the petitioner’s motion for judgment on the
pleadings?

Ruling of the Court

The appeal is meritorious.

The rule on judgment based on the pleadings is Section 1, Rule 34 of the Rules of Court, which provides thus:

Section 1. Judgment on the pleadings. – Where an answer fails to tender an issue, or otherwise admits the material
allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading.
xxx

102
The essential query in resolving a motion for judgment on the pleadings is whether or not there are issues of fact
generated by the pleadings. Whether issues of fact exist in a case or not depends on how the defending party’s
28

answer has dealt with the ultimate facts alleged in the complaint. The defending party’s answer either admits or
denies the allegations of ultimate facts in the complaint or other initiatory pleading. The allegations of ultimate facts
the answer admit, being undisputed, will not require evidence to establish the truth of such facts, but the allegations
of ultimate facts the answer properly denies, being disputed, will require evidence.

The answer admits the material allegations of ultimate facts of the adverse party’s pleadings not only when it
expressly confesses the truth of such allegations but also when it omits to deal with them at all. The controversion
29

of the ultimate facts must only be by specific denial. Section 10, Rule 8 of the Rules of Court recognizes only three
modes by which the denial in the answer raises an issue of fact. The first is by the defending party specifying each
material allegation of fact the truth of which he does not admit and, whenever practicable, setting forth the
substance of the matters upon which he relies to support his denial. The second applies to the defending party who
desires to deny only a part of an averment, and the denial is done by the defending party specifying so much of the
material allegation of ultimate facts as is true and material and denying only the remainder. The third is done by the
defending party who is without knowledge or information sufficient to form a belief as to the truth of a material
averment made in the complaint by stating so in the answer. Any material averment in the complaint not so
specifically denied are deemed admitted except an averment of the amount of unliquidated damages. 30

In the case of a written instrument or document upon which an action or defense is based, which is also known as
the actionable document, the pleader of such document is required either to set forth the substance of such
instrument or document in the pleading, and to attach the original or a copy thereof to the pleading as an exhibit,
which shall then be deemed to be a part of the pleading, or to set forth a copy in the pleading. The adverse party is
31

deemed to admit the genuineness and due execution of the actionable document unless he specifically denies them
under oath, and sets forth what he claims to be the facts, but the requirement of an oath does not apply when the
adverse party does not appear to be a party to the instrument or when compliance with an order for an inspection of
the original instrument is refused.32

In Civil Case No. 09-122116, the respondent expressly admitted paragraphs no. 2, 3, 4, 5, 9 and 10 of the
complaint. The admission related to the petitioner’s allegations on: (a) the four transactions for the delivery and
installation of various hospital equipment; (b) the total liability of the respondent; (c) the payments made by the
respondents; (d) the balance still due to the petitioner; and (e) the execution of the February 11, 2009 agreement.
The admission of the various agreements, especially the February 11, 2009 agreement, significantly admitted the
petitioner’s complaint. To recall, the petitioner’s cause of action was based on the February 11, 2009 agreement,
which was the actionable document in the case. The complaint properly alleged the substance of the February 11,
2009 agreement, and contained a copy thereof as an annex. Upon the express admission of the genuineness and
due execution of the February 11, 2009 agreement, judgment on the pleadings became proper. As held in Santos
33

v. Alcazar:34

There is no need for proof of execution and authenticity with respect to documents the genuineness and due
execution of which are admitted by the adverse party. With the consequent admission engendered by petitioners’
failure to properly deny the Acknowledgment in their Answer, coupled with its proper authentication, identification
and offer by the respondent, not to mention petitioners’ admissions in paragraphs 4 to 6 of their Answer that they
are indeed indebted to respondent, the Court believes that judgment may be had solely on the document, and there
is no need to present receipts and other documents to prove the claimed indebtedness. The Acknowledgment, just
as an ordinary acknowledgment receipt, is valid and binding between the parties who executed it, as a document
evidencing the loan agreement they had entered into. The absence of rebutting evidence occasioned by petitioners’
waiver of their right to present evidence renders the Acknowledgment as the best evidence of the transactions
between the parties and the consequential indebtedness incurred. Indeed, the effect of the admission is such that
a prima facie case is made for the plaintiff which dispenses with the necessity of evidence on his part and entitled
him to a judgment on the pleadings unless a special defense of new matter, such as payment, is interposed by the
defendant. (citations omitted)
35

The respondent denied paragraphs no. 6, 7 and 8 of the complaint "for lack of knowledge or information sufficient to
form a belief as to the truth or falsity thereof, inasmuch as the alleged transactions were undertaken during the term
of office of the past officers of defendant Wesleyan University-Philippines." Was the manner of denial effective as a
specific denial?
103
We answer the query in the negative. Paragraph no. 6 alleged that the respondent’s total obligation as of February
15, 2009 was P123,901,650.00, but its balance thereafter became only P54,654,195.54 because it had since then
paid P67,357,683.23 to the petitioner. Paragraph no. 7 stated that the petitioner had agreed with the respondent on
February 11, 2009 to reduce the balance to only P50,400,000.00, which the respondent would pay in 36 months
through 36 postdated checks of P1,400,000.00 each, which the respondent then issued for the purpose. Paragraph
no. 8 averred that after four of the checks totalling P5,600,000.00 were paid the respondent stopped payment of the
rest, rendering the entire obligation due and demandable pursuant to the February 11, 2009 agreement.
Considering that paragraphs no. 6, 7 and 8 of the complaint averred matters that the respondent ought to know or
could have easily known, the answer did not specifically deny such material averments. It is settled that denials
based on lack of knowledge or information of matters clearly known to the pleader, or ought to be known to it, or
could have easily been known by it are insufficient, and constitute ineffective or sham denials.
36 37

That the respondent qualified its admissions and denials by subjecting them to its special and affirmative defenses
of lack of jurisdiction over its person, improper venue, litis pendentia and forum shopping was of no consequence
because the affirmative defenses, by their nature, involved matters extrinsic to the merits of the petitioner’s claim,
and thus did not negate the material averments of the complaint.

Lastly, we should emphasize that in order to resolve the petitioner’s Motion for Judgment Based on the Pleadings,
the trial court could rely only on the answer of the respondent filed in Civil Case No. 09-122116. Under Section 1,
Rule 34 of the Rules of Court, the answer was the sole basis for ascertaining whether the complaint’s material
allegations were admitted or properly denied. As such, the respondent’s averment of payment of the total of
P78,401,650.00 to the petitioner made in its complaint for rescission had no relevance to the resolution of
the Motion for Judgment Based on the Pleadings. The CA thus wrongly held that a factual issue on the total liability
of the respondent remained to be settled through trial on the merits. It should have openly wondered why the
respondent's answer in Civil Case No. 09-122116 did not allege the supposed payment of the P78,401,650.00, if the
payment was true, if only to buttress the specific denial of its alleged liability. The omission exposed the
respondent's denial of liability as insincere.

WHEREFORE, the Court REVERSES and SETS ASIDE the decision promulgated on July 2, 2013; DIRECTS the
Regional Trial Court, Branch 1, in Manila to resume its proceedings in Civil Case No. 09-122116 entitled Fernando
Medical Enterprises, Inc. v. Wesleyan University-Philippines, and to forthwith act on and grant the Motion for
Judgment Based on the Pleadings by rendering the proper judgment on the pleadings; and ORDERS the
respondent to pay the costs of suit.

SO ORDERED.

104
RULE 35: SUMMARY JUDGMENTS

Republic vs Sandiganbayan, G.R No. 152154, July 15, 2003

G.R. No. 152154 July 15, 2003

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION), FERDINAND E. MARCOS (REPRESENTED BY HIS
ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA [IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND IRENE
MARCOS-ARANETA) AND IMELDA ROMUALDEZ MARCOS, respondents.

CORONA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set aside the Resolution dated January 31, 2002
issued by the Special First Division of the Sandiganbayan in Civil Case No. 0141 entitled Republic of the Philippines vs. Ferdinand E.
Marcos, et. al., and (2) reinstate its earlier decision dated September 19, 2000 which forfeited in favor of petitioner Republic of the
Philippines (Republic) the amount held in escrow in the Philippine National Bank (PNB) in the aggregate amount of US$658,175,373.60
as of January 31, 2002.

BACKGROUND OF THE CASE

On December 17, 1991, petitioner Republic, through the Presidential Commission on Good Government (PCGG), represented by the
Office of the Solicitor General (OSG), filed a petition for forfeiture before the Sandiganbayan, docketed as Civil Case No. 0141
entitled Republic of the Philippines vs. Ferdinand E. Marcos, represented by his Estate/Heirs and Imelda R. Marcos, pursuant to RA
13791 in relation to Executive Order Nos. 1,2 2,3 144 and 14-A.5

In said case, petitioner sought the declaration of the aggregate amount of US$356 million (now estimated to be more than US$658
million inclusive of interest) deposited in escrow in the PNB, as ill-gotten wealth. The funds were previously held by the following five
account groups, using various foreign foundations in certain Swiss banks:

(1) Azio-Verso-Vibur Foundation accounts;

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

(3) Trinidad-Rayby-Palmy Foundation accounts;

(4) Rosalys-Aguamina Foundation accounts and

(5) Maler Foundation accounts.

In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple's
salaries, other lawful income as well as income from legitimately acquired property. The treasury notes are frozen at the Central Bank
of the Philippines, now Bangko Sentral ng Pilipinas, by virtue of the freeze order issued by the PCGG.

On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and Ferdinand R. Marcos, Jr. filed
their answer.

Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements 6 dated December 28, 1993 were
executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos
family. Subsequently, respondent Marcos children filed a motion dated December 7, 1995 for the approval of said agreements and for
the enforcement thereof.

The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of and distribute all assets presumed
to be owned by the Marcos family under the conditions contained therein. The aforementioned General Agreement specified in one of
its premises or "whereas clauses" the fact that petitioner "obtained a judgment from the Swiss Federal Tribunal on December 21, 1990,
that the Three Hundred Fifty-six Million U.S. dollars (US$356 million) belongs in principle to the Republic of the Philippines provided
certain conditionalities are met x x x." The said decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District
Attorney Peter Consandey, granting petitioner's request for legal assistance. 7 Consandey declared the various deposits in the name of
the enumerated foundations to be of illegal provenance and ordered that they be frozen to await the final verdict in favor of the parties
entitled to restitution.

105
Hearings were conducted by the Sandiganbayan on the motion to approve the General/Supplemental Agreements. Respondent
Ferdinand, Jr. was presented as witness for the purpose of establishing the partial implementation of said agreements.

On October 18, 1996, petitioner filed a motion for summary judgment and/or judgment on the pleadings. Respondent Mrs. Marcos filed
her opposition thereto which was later adopted by respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.

In its resolution dated November 20, 1997, the Sandiganbayan denied petitioner's motion for summary judgment and/or judgment on
the pleadings on the ground that the motion to approve the compromise agreement "(took) precedence over the motion for summary
judgment."

Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was not a party to the motion for approval of the
Compromise Agreement and that she owned 90% of the funds with the remaining 10% belonging to the Marcos estate.

Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich, Switzerland, an additional request for the immediate
transfer of the deposits to an escrow account in the PNB. The request was granted. On appeal by the Marcoses, the Swiss Federal
Supreme Court, in a decision dated December 10, 1997, upheld the ruling of the District Attorney of Zurich granting the request for the
transfer of the funds. In 1998, the funds were remitted to the Philippines in escrow. Subsequently, respondent Marcos children moved
that the funds be placed in custodia legis because the deposit in escrow in the PNB was allegedly in danger of dissipation by petitioner.
The Sandiganbayan, in its resolution dated September 8, 1998, granted the motion.

After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial order dated October 28, 1999 and January 21, 2000,
respectively, the case was set for trial. After several resettings, petitioner, on March 10, 2000, filed another motion for summary
judgment pertaining to the forfeiture of the US$356 million, based on the following grounds:

THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS SUBJECT OF THE PETITION UNDER
R.A. NO. 1379 ARE ADMITTED BY RESPONDENTS IN THEIR PLEADINGS AND OTHER SUBMISSIONS MADE IN THE
COURSE OF THE PROCEEDING.

II

RESPONDENTS' ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT HAVE ANY INTEREST OR
OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION FOR FORFEITURE TENDERS NO GENUINE ISSUE OR
CONTROVERSY AS TO ANY MATERIAL FACT IN THE PRESENT ACTION, THUS WARRANTING THE RENDITION OF
SUMMARY JUDGMENT.8

Petitioner contended that, after the pre-trial conference, certain facts were established, warranting a summary judgment on the funds
sought to be forfeited.

Respondent Mrs. Marcos filed her opposition to the petitioner's motion for summary judgment, which opposition was later adopted by
her co-respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.

On March 24, 2000, a hearing on the motion for summary judgment was conducted.

In a decision9 dated September 19, 2000, the Sandiganbayan granted petitioner's motion for summary judgment:

CONCLUSION

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

The Motion for Summary Judgment is hereby granted.

The Swiss deposits which were transmitted to and now held in escrow at the PNB are deemed unlawfully acquired as ill-gotten
wealth.

DISPOSITION

WHEREFORE, judgment is hereby rendered in favor of the Republic of the Philippines and against the respondents, declaring
the Swiss deposits which were transferred to and now deposited in escrow at the Philippine National Bank in the total

106
 aggregate value equivalent to US$627,608,544.95 as of August 31, 2000 together with the increments thereof forfeited in
favor of the State.10

Respondent Mrs. Marcos filed a motion for reconsideration dated September 26, 2000. Likewise, Mrs. Manotoc and Ferdinand, Jr. filed
their own motion for reconsideration dated October 5, 2000. Mrs. Araneta filed a manifestation dated October 4, 2000 adopting the
motion for reconsideration of Mrs. Marcos, Mrs. Manotoc and Ferdinand, Jr.

Subsequently, petitioner filed its opposition thereto.

In a resolution11 dated January 31, 2002, the Sandiganbayan reversed its September 19, 2000 decision, thus denying petitioner's
motion for summary judgment:

CONCLUSION

In sum, the evidence offered for summary judgment of the case did not prove that the money in the Swiss Banks belonged to
the Marcos spouses because no legal proof exists in the record as to the ownership by the Marcoses of the funds in escrow
from the Swiss Banks.

The basis for the forfeiture in favor of the government cannot be deemed to have been established and our judgment thereon,
perforce, must also have been without basis.

WHEREFORE, the decision of this Court dated September 19, 2000 is reconsidered and set aside, and this case is now being
set for further proceedings.12

Hence, the instant petition. In filing the same, petitioner argues that the Sandiganbayan, in reversing its September 19, 2000 decision,
committed grave abuse of discretion amounting to lack or excess of jurisdiction considering that --

PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE REQUISITES OF SECTIONS 2 AND 3 OF
R.A. NO. 1379:

A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE PERSONAL CIRCUMSTANCES OF

FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC OFFICIALS BUT ALSO THE EXTENT OF THEIR
SALARIES AS SUCH PUBLIC OFFICIALS, WHO UNDER THE CONSTITUTION, WERE PROHIBITED FROM
ENGAGING IN THE MANAGEMENT OF FOUNDATIONS.

B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS DEPOSITS AND THEIR
OWNERSHIP THEREOF:

1. ADMISSIONS IN PRIVATE RESPONDENTS' ANSWER;

2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY SIGNED AND SOUGHT TO

IMPLEMENT;

3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R. MARCOS AND IN THE

MOTION TO PLACE THE RES IN CUSTODIA LEGIS; AND

4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS VICTIMS.

C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF FERDINAND E. MARCOS AND
IMELDA R. MARCOS AS PUBLIC OFFICIALS.

D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF UNLAWFULLY ACQUIRED WEALTH.

II

SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED ANY GENUINE ISSUE OF
FACT CONSIDERING THAT:

107
 A. PRIVATE RESPONDENTS' DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY ACQUIRED DOES NOT
ONLY FAIL TO TENDER AN ISSUE BUT IS CLEARLY A SHAM; AND

B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS, PRIVATE RESPONDENTS

ABANDONED THEIR SHAM DEFENSE OF LEGITIMATE ACQUISITION, AND THIS FURTHER JUSTIFIED THE
RENDITION OF A SUMMARY JUDGMENT.

III

THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.

IV

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

PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE AUTHENTICITY OF THE
SWISS FEDERAL SUPREME COURT DECISIONS.13

Petitioner, in the main, asserts that nowhere in the respondents' motions for reconsideration and supplemental motion for
reconsideration were the authenticity, accuracy and admissibility of the Swiss decisions ever challenged. Otherwise stated, it was
incorrect for the Sandiganbayan to use the issue of lack of authenticated translations of the decisions of the Swiss Federal Supreme
Court as the basis for reversing itself because respondents themselves never raised this issue in their motions for reconsideration and
supplemental motion for reconsideration. Furthermore, this particular issue relating to the translation of the Swiss court decisions could
not be resurrected anymore because said decisions had been previously utilized by the Sandiganbayan itself in resolving a "decisive
issue" before it.

Petitioner faults the Sandiganbayan for questioning the non-production of the authenticated translations of the Swiss Federal Supreme
Court decisions as this was a marginal and technical matter that did not diminish by any measure the conclusiveness and strength of
what had been proven and admitted before the Sandiganbayan, that is, that the funds deposited by the Marcoses constituted ill-gotten
wealth and thus belonged to the Filipino people.

In compliance with the order of this Court, Mrs. Marcos filed her comment to the petition on May 22, 2002. After several motions for
extension which were all granted, the comment of Mrs. Manotoc and Ferdinand, Jr. and the separate comment of Mrs. Araneta were
filed on May 27, 2002.

Mrs. Marcos asserts that the petition should be denied on the following grounds:

A.

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

B.

THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR FURTHER PROCEEDINGS. 14

Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in the ordinary course of law in view of the resolution of
the Sandiganbayan dated January 31, 2000 directing petitioner to submit the authenticated translations of the Swiss decisions. Instead
of availing of said remedy, petitioner now elevates the matter to this Court. According to Mrs. Marcos, a petition for certiorari which does
not comply with the requirements of the rules may be dismissed. Since petitioner has a plain, speedy and adequate remedy, that is, to
proceed to trial and submit authenticated translations of the Swiss decisions, its petition before this Court must be dismissed.
Corollarily, the Sandiganbayan's ruling to set the case for further proceedings cannot and should not be considered a capricious and
whimsical exercise of judgment.

Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the dismissal of the petition on the grounds that:

108
 (A)

BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 MARCH 2000, IT WAS ALREADY
BARRED FROM DOING SO.

(1) The Motion for Summary Judgment was based on private respondents' Answer and other documents that had long been in
the records of the case. Thus, by the time the Motion was filed on 10 March 2000, estoppel by laches had already set in
against petitioner.

(2) By its positive acts and express admissions prior to filing the Motion for Summary Judgment on 10 March 1990, petitioner
had legally bound itself to go to trial on the basis of existing issues. Thus, it clearly waived whatever right it had to move for
summary judgment.

(B)

EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING THE MOTION FOR SUMMARY
JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN RULING THAT PETITIONER HAS NOT YET ESTABLISHED A
PRIMA FACIE CASE FOR THE FORFEITURE OF THE SWISS FUNDS.

(1) Republic Act No. 1379, the applicable law, is a penal statute. As such, its provisions, particularly the essential elements
stated in section 3 thereof, are mandatory in nature. These should be strictly construed against petitioner and liberally in favor
of private respondents.

(2) Petitioner has failed to establish the third and fourth essential elements in Section 3 of R.A. 1379 with respect to the
identification, ownership, and approximate amount of the property which the Marcos couple allegedly "acquired during their
incumbency".

(a) Petitioner has failed to prove that the Marcos couple "acquired" or own the Swiss funds.

(b) Even assuming, for the sake of argument, that the fact of acquisition has been proven, petitioner has categorically
admitted that it has no evidence showing how much of the Swiss funds was acquired "during the incumbency" of the
Marcos couple from 31 December 1965 to 25 February 1986.

(3) In contravention of the essential element stated in Section 3 (e) of R.A. 1379, petitioner has failed to establish the
other proper earnings and income from legitimately acquired property of the Marcos couple over and above their
government salaries.

(4) Since petitioner failed to prove the three essential elements provided in paragraphs (c) 15 (d),16 and (e)17 of Section 3, R.A.
1379, the inescapable conclusion is that the prima facie presumption of unlawful acquisition of the Swiss funds has not yet
attached. There can, therefore, be no premature forfeiture of the funds.

(C)

IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS MADE BY PRIVATE
RESPONDENTS OUT OF CONTEXT THAT PETITIONER WAS ABLE TO TREAT THESE AS "JUDICIAL ADMISSIONS"
SUFFICIENT TO ESTABLISH A PRIMA FACIE AND THEREAFTER A CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE
OF THE SWISS FUNDS.

(1) Under Section 27, Rule 130 of the Rules of Court, the General and Supplemental Agreements, as well as the other written
and testimonial statements submitted in relation thereto, are expressly barred from being admissible in evidence against
private respondents.

(2) Had petitioner bothered to weigh the alleged admissions together with the other statements on record, there would be a
demonstrable showing that no such "judicial admissions" were made by private respondents.

(D)

SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS TO ESTABLISH A PRIMA FACIE CASE
FOR FORFEITURE, AND PRIVATE RESPONDENTS HAVE NOT MADE ANY JUDICIAL ADMISSION THAT WOULD HAVE
FREED IT FROM ITS BURDEN OF PROOF, THE SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE OF DISCRETION
IN DENYING THE MOTION FOR SUMMARY JUDGMENT. CERTIORARI, THEREFORE, DOES NOT LIE, ESPECIALLY AS
THIS COURT IS NOT A TRIER OF FACTS.18
109
For her part, Mrs. Araneta, in her comment to the petition, claims that obviously petitioner is unable to comply with a very plain
requirement of respondent Sandiganbayan. The instant petition is allegedly an attempt to elevate to this Court matters, issues and
incidents which should be properly threshed out at the Sandiganbayan. To respondent Mrs. Araneta, all other matters, save that
pertaining to the authentication of the translated Swiss Court decisions, are irrelevant and impertinent as far as this Court is concerned.
Respondent Mrs. Araneta manifests that she is as eager as respondent Sandiganbayan or any interested person to have the Swiss
Court decisions officially translated in our known language. She says the authenticated official English version of the Swiss Court
decisions should be presented. This should stop all speculations on what indeed is contained therein. Thus, respondent Mrs. Araneta
prays that the petition be denied for lack of merit and for raising matters which, in elaborated fashion, are impertinent and improper
before this Court.

PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI

But before this Court discusses the more relevant issues, the question regarding the propriety of petitioner Republic's action for
certiorari under Rule 6519 of the 1997 Rules of Civil Procedure assailing the Sandiganbayan Resolution dated January 21, 2002 should
be threshed out.

At the outset, we would like to stress that we are treating this case as an exception to the general rule governing petitions for certiorari.
Normally, decisions of the Sandiganbayan are brought before this Court under Rule 45, not Rule 65. 20 But where the case is undeniably
ingrained with immense public interest, public policy and deep historical repercussions, certiorari is allowed notwithstanding the
existence and availability of the remedy of appeal.21

One of the foremost concerns of the Aquino Government in February 1986 was the recovery of the unexplained or ill-gotten wealth
reputedly amassed by former President and Mrs. Ferdinand E. Marcos, their relatives, friends and business associates. Thus, the very
first Executive Order (EO) issued by then President Corazon Aquino upon her assumption to office after the ouster of the Marcoses was
EO No. 1, issued on February 28, 1986. It created the Presidential Commission on Good Government (PCGG) and charged it with the
task of assisting the President in the "recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the takeover or
sequestration of all business enterprises and entities owned or controlled by them during his administration, directly or through
nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship."
The urgency of this undertaking was tersely described by this Court in Republic vs. Lobregat22:

surely x x x an enterprise "of great pith and moment"; it was attended by "great expectations"; it was initiated not only out of
considerations of simple justice but also out of sheer necessity - the national coffers were empty, or nearly so.

In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside technicalities and formalities
that merely serve to delay or impede judicious resolution. This Court prefers to have such cases resolved on the merits at the
Sandiganbayan. But substantial justice to the Filipino people and to all parties concerned, not mere legalisms or perfection of
form, should now be relentlessly and firmly pursued. Almost two decades have passed since the government initiated its
search for and reversion of such ill-gotten wealth. The definitive resolution of such cases on the merits is thus long overdue. If
there is proof of illegal acquisition, accumulation, misappropriation, fraud or illicit conduct, let it be brought out now. Let the
ownership of these funds and other assets be finally determined and resolved with dispatch, free from all the delaying
technicalities and annoying procedural sidetracks.23

We thus take cognizance of this case and settle with finality all the issues therein.

ISSUES BEFORE THIS COURT

The crucial issues which this Court must resolve are: (1) whether or not respondents raised any genuine issue of fact which would
either justify or negate summary judgment; and (2) whether or not petitioner Republic was able to prove its case for forfeiture in
accordance with Sections 2 and 3 of RA 1379.

(1) THE PROPRIETY OF SUMMARY JUDGMENT

We hold that respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on motion of petitioner Republic,
summary judgment should take place as a matter of right.

In the early case of Auman vs. Estenzo24, summary judgment was described as a judgment which a court may render before trial but
after both parties have pleaded. It is ordered by the court upon application by one party, supported by affidavits, depositions or other
documents, with notice upon the adverse party who may in turn file an opposition supported also by affidavits, depositions or other
documents. This is after the court summarily hears both parties with their respective proofs and finds that there is no genuine issue
between them. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Procedure:

110
 SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or cross-claim or to
obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof. 25

Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action. 26 The theory of summary
judgment is that, although an answer may on its face appear to tender issues requiring trial, if it is demonstrated by affidavits,
depositions or admissions that those issues are not genuine but sham or fictitious, the Court is justified in dispensing with the trial and
rendering summary judgment for petitioner Republic.

The Solicitor General made a very thorough presentation of its case for forfeiture:

xxx

4. Respondent Ferdinand E. Marcos (now deceased and represented by his Estate/Heirs) was a public officer for several
decades continuously and without interruption as Congressman, Senator, Senate President and President of the Republic of
the Philippines from December 31, 1965 up to his ouster by direct action of the people of EDSA on February 22-25, 1986.

5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady who ruled with FM during the 14-year
martial law regime, occupied the position of Minister of Human Settlements from June 1976 up to the peaceful revolution in
February 22-25, 1986. She likewise served once as a member of the Interim Batasang Pambansa during the early years of
martial law from 1978 to 1984 and as Metro Manila Governor in concurrent capacity as Minister of Human Settlements. x x x

xxx xxx xxx

11. At the outset, however, it must be pointed out that based on the Official Report of the Minister of Budget, the total salaries
of former President Marcos as President form 1966 to 1976 was P60,000 a year and from 1977 to 1985, P100,000 a year;
while that of the former First Lady, Imelda R. Marcos, as Minister of Human Settlements from June 1976 to February 22-25,
1986 was P75,000 a year xxx.

ANALYSIS OF RESPONDENTS LEGITIMATE INCOME

xxx

12. Based on available documents, the ITRs of the Marcoses for the years 1965-1975 were filed under Tax Identification No.
1365-055-1. For the years 1976 until 1984, the returns were filed under Tax Identification No. M 6221-J 1117-A-9.

13. The data contained in the ITRs and Balance Sheet filed by the "Marcoses are summarized and attached to the reports in
the following schedules:

Schedule A:

Schedule of Income (Annex "T" hereof);

Schedule B:

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

Schedule C:

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

Schedule D:

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

14. As summarized in Schedule A (Annex "T" hereof), the Marcoses reported P16,408,442.00 or US$2,414,484.91 in total
income over a period of 20 years from 1965 to 1984. The sources of income are as follows:

Official Salaries - P 2,627,581.00 - 16.01%

Legal Practice - 11,109,836.00 - 67.71%
111
 Farm Income - 149,700.00 - .91%
Others - 2,521,325.00 - 15.37%
Total P16,408,442.00 - 100.00%

15. FM's official salary pertains to his compensation as Senate President in 1965 in the amount of P15,935.00 and
P1,420,000.00 as President of the Philippines during the period 1966 until 1984. On the other hand, Imelda reported salaries
and allowances only for the years 1979 to 1984 in the amount of P1,191,646.00. The records indicate that the reported income
came from her salary from the Ministry of Human Settlements and allowances from Food Terminal, Inc., National Home
Mortgage Finance Corporation, National Food Authority Council, Light Rail Transit Authority and Home Development Mutual
Fund.

16. Of the P11,109,836.00 in reported income from legal practice, the amount of P10,649,836.00 or 96% represents
"receivables from prior years" during the period 1967 up to 1984.

17. In the guise of reporting income using the cash method under Section 38 of the National Internal Revenue Code, FM made
it appear that he had an extremely profitable legal practice before he became a President (FM being barred by law from
practicing his law profession during his entire presidency) and that, incredibly, he was still receiving payments almost 20 years
after. The only problem is that in his Balance Sheet attached to his 1965 ITR immediately preceeding his ascendancy to the
presidency he did not show any Receivables from client at all, much less the P10,65-M that he decided to later recognize as
income. There are no documents showing any withholding tax certificates. Likewise, there is nothing on record that will show
any known Marcos client as he has no known law office. As previously stated, his networth was a mere P120,000.00 in
December, 1965. The joint income tax returns of FM and Imelda cannot, therefore, conceal the skeletons of their kleptocracy.

18. FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to 1976 which he referred to in his return as
"Miscellaneous Items" and "Various Corporations." There is no indication of any payor of the dividends or earnings.

19. Spouses Ferdinand and Imelda did not declare any income from any deposits and placements which are subject to a 5%
withholding tax. The Bureau of Internal Revenue attested that after a diligent search of pertinent records on file with the
Records Division, they did not find any records involving the tax transactions of spouses Ferdinand and Imelda in Revenue
Region No. 1, Baguio City, Revenue Region No.4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No. 8,
Tacloban, Leyte. Likewise, the Office of the Revenue Collector of Batac. Further, BIR attested that no records were found on
any filing of capital gains tax return involving spouses FM and Imelda covering the years 1960 to 1965.

20. In Schedule B, the taxable reported income over the twenty-year period was P14,463,595.00 which represents 88% of the
gross income. The Marcoses paid income taxes totaling P8,233,296.00 or US$1,220,667.59. The business expenses in the
amount of P861,748.00 represent expenses incurred for subscription, postage, stationeries and contributions while the other
deductions in the amount of P567,097.00 represents interest charges, medicare fees, taxes and licenses. The total deductions
in the amount of P1,994,845.00 represents 12% of the total gross income.

21. In Schedule C, the net cumulative disposable income amounts to P6,756,301.00 or US$980,709.77. This is the amount
that represents that portion of the Marcoses income that is free for consumption, savings and investments. The amount is
arrived at by adding back to the net income after tax the personal and additional exemptions for the years 1965-1984, as well
as the tax-exempt salary of the President for the years 1966 until 1972.

22. Finally, the networth analysis in Schedule D, represents the total accumulated networth of spouses, Ferdinand and Imelda.
Respondent's Balance Sheet attached to their 1965 ITR, covering the year immediately preceding their ascendancy to the
presidency, indicates an ending networth of P120,000.00 which FM declared as Library and Miscellaneous assets. In
computing for the networth, the income approach was utilized. Under this approach, the beginning capital is increased or
decreased, as the case may be, depending upon the income earned or loss incurred. Computations establish the total
networth of spouses Ferdinand and Imelda, for the years 1965 until 1984 in the total amount of US$957,487.75, assuming the
income from legal practice is real and valid x x x.

G. THE SECRET MARCOS DEPOSITS IN SWISS BANKS

23. The following presentation very clearly and overwhelmingly show in detail how both respondents clandestinely stashed
away the country's wealth to Switzerland and hid the same under layers upon layers of foundations and other corporate
entities to prevent its detection. Through their dummies/nominees, fronts or agents who formed those foundations or corporate
entities, they opened and maintained numerous bank accounts. But due to the difficulty if not the impossibility of detecting and
documenting all those secret accounts as well as the enormity of the deposits therein hidden, the following presentation is
confined to five identified accounts groups, with balances amounting to about $356-M with a reservation for the filing of a
supplemental or separate forfeiture complaint should the need arise.

H. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS

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24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo Bertheau, legal counsel of Schweizeresche
Kreditanstalt or SKA, also known as Swiss Credit Bank, for him to establish the AZIO Foundation. On the same date, Marcos
executed a power of attorney in favor of Roberto S. Benedicto empowering him to transact business in behalf of the said
foundation. Pursuant to the said Marcos mandate, AZIO Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler
and Ernst Scheller, also of SKA Legal Service, and Dr. Helmuth Merling from Schaan were designated as members of the
Board of Trustees of the said foundation. Ferdinand Marcos was named first beneficiary and the Marcos Foundation, Inc. was
second beneficiary. On November 12, 1971, FM again issued another written order naming Austrahil PTY Ltd. In Sydney,
Australia, as the foundation's first and sole beneficiary. This was recorded on December 14, 1971.

25. In an undated instrument, Marcos changed the first and sole beneficiary to CHARIS FOUNDATION. This change was
recorded on December 4, 1972.

26. On August 29, 1978, the AZIO FOUNDATION was renamed to VERSO FOUNDATION. The Board of Trustees remained
the same. On March 11, 1981, Marcos issued a written directive to liquidated VERSO FOUNDATION and to transfer all its
assets to account of FIDES TRUST COMPANY at Bank Hofman in Zurich under the account "Reference OSER." The Board of
Trustees decided to dissolve the foundation on June 25, 1981.

27. In an apparent maneuver to bury further the secret deposits beneath the thick layers of corporate entities, FM effected the
establishment of VIBUR FOUNDATION on May 13, 1981 in Vaduz. Atty. Ivo Beck and Limag Management, a wholly-owned
subsidiary of Fides Trust, were designated as members of the Board of Trustees. The account was officially opened with SKA
on September 10, 1981. The beneficial owner was not made known to the bank since Fides Trust Company acted as fiduciary.
However, comparison of the listing of the securities in the safe deposit register of the VERSO FOUNDATION as of February
27, 1981 with that of VIBUR FOUNDATION as of December 31, 1981 readily reveals that exactly the same securities were
listed.

28. Under the foregoing circumstances, it is certain that the VIBUR FOUNDATION is the beneficial successor of VERSO
FOUNDATION.

29. On March 18, 1986, the Marcos-designated Board of Trustees decided to liquidate VIBUR FOUNDATION. A notice of such
liquidation was sent to the Office of the Public Register on March 21, 1986. However, the bank accounts and respective
balances of the said VIBUR FOUNDATION remained with SKA. Apparently, the liquidation was an attempt by the Marcoses to
transfer the foundation's funds to another account or bank but this was prevented by the timely freeze order issued by the
Swiss authorities. One of the latest documents obtained by the PCGG from the Swiss authorities is a declaration signed by Dr.
Ivo Beck (the trustee) stating that the beneficial owner of VIBUR FOUNDATION is Ferdinand E. Marcos. Another document
signed by G. Raber of SKA shows that VIBUR FOUNDATION is owned by the "Marcos Familie"

30. As of December 31, 1989, the balance of the bank accounts of VIBUR FOUNDATION with SKA, Zurich, under the General
Account No. 469857 totaled $3,597,544.00

I. XANDY-WINTROP: CHARIS-SCOLARI-
VALAMO-SPINUS-AVERTINA FOUNDATION ACCOUNTS

31. This is the most intricate and complicated account group. As the Flow Chart hereof shows, two (2) groups under the
foundation organized by Marcos dummies/nominees for FM's benefit, eventually joined together and became one (1) account
group under the AVERTINA FOUNDATION for the benefit of both FM and Imelda. This is the biggest group from where the
$50-M investment fund of the Marcoses was drawn when they bought the Central Bank's dollar-denominated treasury notes
with high-yielding interests.

32. On March 20, 1968, after his second year in the presidency, Marcos opened bank accounts with SKA using an alias or
pseudonym WILLIAM SAUNDERS, apparently to hide his true identity. The next day, March 21, 1968, his First Lady, Mrs.
Imelda Marcos also opened her own bank accounts with the same bank using an American-sounding alias, JANE RYAN.
Found among the voluminous documents in Malacañang shortly after they fled to Hawaii in haste that fateful night of February
25, 1986, were accomplished forms for "Declaration/Specimen Signatures" submitted by the Marcos couple. Under the caption
"signature(s)" Ferdinand and Imelda signed their real names as well as their respective aliases underneath. These accounts
were actively operated and maintained by the Marcoses for about two (2) years until their closure sometime in February, 1970
and the balances transferred to XANDY FOUNDATION.

33. The XANDY FOUNDATION was established on March 3, 1970 in Vaduz. C.W. Fessler, C. Souviron and E. Scheller were
named as members of the Board of Trustees.

34. FM and Imelda issued the written mandate to establish the foundation to Markus Geel of SKA on March 3, 1970. In the
handwritten Regulations signed by the Marcos couple as well as in the type-written Regulations signed by Markus Geel both
dated February 13, 1970, the Marcos spouses were named the first beneficiaries, the surviving spouse as the second
beneficiary and the Marcos children – Imee, Ferdinand, Jr. (Bongbong) and Irene – as equal third beneficiaries.
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35. The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August 29, 1978. The Board of Trustees
remained the same at the outset. However, on March 27, 1980, Souviron was replaced by Dr. Peter Ritter. On March 10.
1981, Ferdinand and Imelda Marcos issued a written order to the Board of Wintrop to liquidate the foundation and transfer all
its assets to Bank Hofmann in Zurich in favor of FIDES TRUST COMPANY. Later, WINTROP FOUNDATION was dissolved.

36. The AVERTINA FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and Limag Management, a
wholly-owned subsidiary of FIDES TRUST CO., as members of the Board of Trustees. Two (2) account categories, namely:
CAR and NES, were opened on September 10, 1981. The beneficial owner of AVERTINA was not made known to the bank
since the FIDES TRUST CO. acted as fiduciary. However, the securities listed in the safe deposit register of WINTROP
FOUNDATION Category R as of December 31, 1980 were the same as those listed in the register of AVERTINA
FOUNDATION Category CAR as of December 31, 1981. Likewise, the securities listed in the safe deposit register of
WINTROP FOUNDATION Category S as of December 31, 1980 were the same as those listed in the register of Avertina
Category NES as of December 31, 1981.Under the circumstances, it is certain that the beneficial successor of WINTROP
FOUNDATION is AVERTINA FOUNDATION. The balance of Category CAR as of December 31, 1989 amounted to
US$231,366,894.00 while that of Category NES as of 12-31-83 was US$8,647,190.00. Latest documents received from Swiss
authorities included a declaration signed by IVO Beck stating that the beneficial owners of AVERTINA FOUNDATION are FM
and Imelda. Another document signed by G. Raber of SKA indicates that Avertina Foundation is owned by the "Marcos
Families."

37. The other groups of foundations that eventually joined AVERTINA were also established by FM through his dummies,
which started with the CHARIS FOUNDATION.

38. The CHARIS FOUNDATION was established in VADUZ on December 27, 1971. Walter Fessler and Ernst Scheller of SKA
and Dr. Peter Ritter were named as directors. Dr. Theo Bertheau, SKA legal counsel, acted as founding director in behalf of
FM by virtue of the mandate and agreement dated November 12, 1971. FM himself was named the first beneficiary and Xandy
Foundation as second beneficiary in accordance with the handwritten instructions of FM on November 12, 1971 and the
Regulations. FM gave a power of attorney to Roberto S. Benedicto on February 15, 1972 to act in his behalf with regard to
Charis Foundation.

39. On December 13, 1974, Charis Foundation was renamed Scolari Foundation but the directors remained the same. On
March 11, 1981 FM ordered in writing that the Valamo Foundation be liquidated and all its assets be transferred to Bank
Hofmann, AG in favor of Fides Trust Company under the account "Reference OMAL". The Board of Directors decided on the
immediate dissolution of Valamo Foundation on June 25, 1981.

40 The SPINUS FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and Limag Management, a
wholly-owned subsidiary of Fides Trust Co., as members of the Foundation's Board of Directors. The account was officially
opened with SKA on September 10, 1981. The beneficial owner of the foundation was not made known to the bank since
Fides Trust Co. acted as fiduciary. However, the list of securities in the safe deposit register of Valamo Foundation as of
December 31, 1980 are practically the same with those listed in the safe deposit register of Spinus Foundation as of
December 31, 1981. Under the circumstances, it is certain that the Spinus Foundation is the beneficial successor of the
Valamo Foundation.

41. On September 6, 1982, there was a written instruction from Spinus Foundation to SKA to close its Swiss Franc account
and transfer the balance to Avertina Foundation. In July/August, 1982, several transfers from the foundation's German marks
and US dollar accounts were made to Avertina Category CAR totaling DM 29.5-M and $58-M, respectively. Moreover, a
comparison of the list of securities of the Spinus Foundation as of February 3, 1982 with the safe deposit slips of the Avertina
Foundation Category CAR as of August 19, 1982 shows that all the securities of Spinus were transferred to Avertina.

J. TRINIDAD-RAYBY-PALMY FOUNDATION ACCOUNTS

42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W. Fessler and E. Scheller of SKA and Dr.
Otto Tondury as the foundation's directors. Imelda issued a written mandate to establish the foundation to Markus Geel on
August 26, 1970. The regulations as well as the agreement, both dated August 28, 1970 were likewise signed by Imelda.
Imelda was named the first beneficiary and her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene were named as
equal second beneficiaries.

43. Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler, Scheller and Ritter as members of the board
of directors. Imelda issued a written mandate to Dr. Theo Bertheau to establish the foundation with a note that the foundation's
capitalization as well as the cost of establishing it be debited against the account of Trinidad Foundation. Imelda was named
the first and only beneficiary of Rayby foundation. According to written information from SKA dated November 28, 1988,
Imelda apparently had the intention in 1973 to transfer part of the assets of Trinidad Foundation to another foundation, thus
the establishment of Rayby Foundation. However, transfer of assets never took place. On March 10, 1981, Imelda issued a
written order to transfer all the assets of Rayby Foundation to Trinidad Foundation and to subsequently liquidate Rayby. On
the same date, she issued a written order to the board of Trinidad to dissolve the foundation and transfer all its assets to Bank

114
Hofmann in favor of Fides Trust Co. Under the account "Reference Dido," Rayby was dissolved on April 6, 1981 and Trinidad
was liquidated on August 3, 1981.

44. The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr. Ivo Beck and Limag Management, a
wholly-owned subsidiary of Fides Trust Co, as members of the Foundation's Board of Directors. The account was officially
opened with the SKA on September 10, 1981. The beneficial owner was not made known to the bank since Fides Trust Co.
acted as fiduciary. However, when one compares the listing of securities in the safe deposit register of Trinidad Foundation as
of December 31,1980 with that of the Palmy Foundation as of December 31, 1980, one can clearly see that practically the
same securities were listed. Under the circumstances, it is certain that the Palmy Foundation is the beneficial successor of the
Trinidad Foundation.

45. As of December 31, 1989, the ending balance of the bank accounts of Palmy Foundation under General Account No.
391528 is $17,214,432.00.

46. Latest documents received from Swiss Authorities included a declaration signed by Dr. Ivo Beck stating that the beneficial
owner of Palmy Foundation is Imelda. Another document signed by Raber shows that the said Palmy Foundation is owned by
"Marcos Familie".

K. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS

47. Rosalys Foundation was established in 1971 with FM as the beneficiary. Its Articles of Incorporation was executed on
September 24, 1971 and its By-Laws on October 3, 1971. This foundation maintained several accounts with Swiss Bank
Corporation (SBC) under the general account 51960 where most of the bribe monies from Japanese suppliers were hidden.

48. On December 19, 1985, Rosalys Foundation was liquidated and all its assets were transferred to Aguamina Corporation's
(Panama) Account No. 53300 with SBC. The ownership by Aguamina Corporation of Account No. 53300 is evidenced by an
opening account documents from the bank. J. Christinaz and R.L. Rossier, First Vice-President and Senior Vice President,
respectively, of SBC, Geneva issued a declaration dated September 3, 1991 stating that the by-laws dated October 3, 1971
governing Rosalys Foundation was the same by-law applied to Aguamina Corporation Account No. 53300. They further
confirmed that no change of beneficial owner was involved while transferring the assets of Rosalys to Aguamina. Hence, FM
remains the beneficiary of Aguamina Corporation Account No. 53300.

As of August 30, 1991, the ending balance of Account No. 53300 amounted to $80,566,483.00.

L. MALER FOUNDATION ACCOUNTS

49. Maler was first created as an establishment. A statement of its rules and regulations was found among Malacañang
documents. It stated, among others, that 50% of the Company's assets will be for sole and full right disposal of FM and Imelda
during their lifetime, which the remaining 50% will be divided in equal parts among their children. Another Malacañang
document dated October 19,1968 and signed by Ferdinand and Imelda pertains to the appointment of Dr. Andre Barbey and
Jean Louis Sunier as attorneys of the company and as administrator and manager of all assets held by the company. The
Marcos couple, also mentioned in the said document that they bought the Maler Establishment from SBC, Geneva. On the
same date, FM and Imelda issued a letter addressed to Maler Establishment, stating that all instructions to be transmitted with
regard to Maler will be signed with the word "JOHN LEWIS". This word will have the same value as the couple's own personal
signature. The letter was signed by FM and Imelda in their signatures and as John Lewis.

50. Maler Establishment opened and maintained bank accounts with SBC, Geneva. The opening bank documents were
signed by Dr. Barbey and Mr. Sunnier as authorized signatories.

51. On November 17, 1981, it became necessary to transform Maler Establishment into a foundation. Likewise, the attorneys
were changed to Michael Amaudruz, et. al. However, administration of the assets was left to SBC. The articles of incorporation
of Maler Foundation registered on November 17, 1981 appear to be the same articles applied to Maler Establishment. On
February 28, 1984, Maler Foundation cancelled the power of attorney for the management of its assets in favor of SBC and
transferred such power to Sustrust Investment Co., S.A.

52. As of June 6, 1991, the ending balance of Maler Foundation's Account Nos. 254,508 BT and 98,929 NY amount SF
9,083,567 and SG 16,195,258, respectively, for a total of SF 25,278,825.00. GM only until December 31, 1980. This account
was opened by Maler when it was still an establishment which was subsequently transformed into a foundation.

53. All the five (5) group accounts in the over-all flow chart have a total balance of about Three Hundred Fifty Six Million
Dollars ($356,000,000.00) as shown by Annex "R-5" hereto attached as integral part hereof.

xxx x x x.27
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Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and Ferdinand Marcos, Jr., in their answer, stated the
following:

xxx xxx xxx

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

5. Respondents specifically deny paragraph 5 of the Petition in so far as it states that summons and other court processes
may be served on Respondent Imelda R. Marcos at the stated address the truth of the matter being that Respondent Imelda
R. Marcos may be served with summons and other processes at No. 10-B Bel Air Condominium 5022 P. Burgos Street,
Makati, Metro Manila, and ADMIT the rest.

xxx xxx xxx

10. Respondents ADMIT paragraph 11 of the Petition.

11. Respondents specifically DENY paragraph 12 of the Petition for lack of knowledge sufficient to form a belief as to the truth
of the allegation since Respondents were not privy to the transactions and that they cannot remember exactly the truth as to
the matters alleged.

12. Respondents specifically DENY paragraph 13 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs and
Balance Sheet.

13. Respondents specifically DENY paragraph 14 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

14. Respondents specifically DENY paragraph 15 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

15. Respondents specifically DENY paragraph 16 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

16. Respondents specifically DENY paragraph 17 of the Petition insofar as it attributes willful duplicity on the part of the late
President Marcos, for being false, the same being pure conclusions based on pure assumption and not allegations of fact; and
specifically DENY the rest for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs or the attachments thereto.

17. Respondents specifically DENY paragraph 18 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

18. Respondents specifically DENY paragraph 19 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs and that
they are not privy to the activities of the BIR.

19. Respondents specifically DENY paragraph 20 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

20. Respondents specifically DENY paragraph 21 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

21. Respondents specifically DENY paragraph 22 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.

22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country's
wealth in Switzerland and hid the same under layers and layers of foundation and corporate entities for being false, the truth
being that Respondents aforesaid properties were lawfully acquired.

23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of knowledge or
information sufficient to form a belief as to the truth of the allegation since Respondents were not privy to the transactions

116
 regarding the alleged Azio-Verso-Vibur Foundation accounts, except that as to Respondent Imelda R. Marcos she specifically
remembers that the funds involved were lawfully acquired.

24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36,37, 38, 39, 40, and 41 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since Respondents are not privy to the
transactions and as to such transaction they were privy to they cannot remember with exactitude the same having occurred a
long time ago, except that as to Respondent Imelda R. Marcos she specifically remembers that the funds involved were
lawfully acquired.

25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegations since Respondents were not privy to the transactions and as to such
transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago, except that as
to Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully acquired.

26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegations since Respondents were not privy to the transactions and as to such
transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago, except that as
to Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully acquired.

Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos and the Marcos children indubitably failed to tender
genuine issues in their answer to the petition for forfeiture. A genuine issue is an issue of fact which calls for the presentation of
evidence as distinguished from an issue which is fictitious and contrived, set up in bad faith or patently lacking in substance so as not to
constitute a genuine issue for trial. Respondents' defenses of "lack of knowledge for lack of privity" or "(inability to) recall because it
happened a long time ago" or, on the part of Mrs. Marcos, that "the funds were lawfully acquired" are fully insufficient to tender genuine
issues. Respondent Marcoses' defenses were a sham and evidently calibrated to compound and confuse the issues.

The following pleadings filed by respondent Marcoses are replete with indications of a spurious defense:

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

(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial Brief dated October 19, 1999 of Ferdinand, Jr.
and Mrs. Imee Marcos-Manotoc adopting the pre-trial brief of Mrs. Marcos, and Manifestation dated October 19, 1999 of Irene
Marcos-Araneta adopting the pre-trial briefs of her co- respondents;

(c) Opposition to Motion for Summary Judgment dated March 21, 2000, filed by Mrs. Marcos which the other respondents
(Marcos children) adopted;

(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by the Marcos children;

(e) Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos; Motion for Reconsideration dated October 5,
2000 jointly filed by Mrs. Manotoc and Ferdinand, Jr., and Supplemental Motion for Reconsideration dated October 9, 2000
likewise jointly filed by Mrs. Manotoc and Ferdinand, Jr.;

(f) Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum dated December 17, 2000 of the Marcos
children;

(g) Manifestation dated May 26, 1998; and

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

An examination of the foregoing pleadings is in order.

• Respondents' Answer dated October 18, 1993.

In their answer, respondents failed to specifically deny each and every allegation contained in the petition for forfeiture in the manner
required by the rules. All they gave were stock answers like "they have no sufficient knowledge" or "they could not recall because it
happened a long time ago," and, as to Mrs. Marcos, "the funds were lawfully acquired," without stating the basis of such assertions.

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

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 A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall
set forth the substance of the matters upon which he relies to support his denial. Where a defendant desires to deny only a
part of an averment, he shall specify so much of it as is true and material and shall deny the remainder. Where a defendant is
without knowledge or information sufficient to form a belief as to the truth of a material averment made in the complaint, he
shall so state, and this shall have the effect of a denial.28

The purpose of requiring respondents to make a specific denial is to make them disclose facts which will disprove the allegations of
petitioner at the trial, together with the matters they rely upon in support of such denial. Our jurisdiction adheres to this rule to avoid and
prevent unnecessary expenses and waste of time by compelling both parties to lay their cards on the table, thus reducing the
controversy to its true terms. As explained in Alonso vs. Villamor,29

A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and
position, entraps and destroys the other. It is rather a contest in which each contending party fully and fairly lays before the
court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of
procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust.

On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired. However, she failed to particularly state the ultimate
facts surrounding the lawful manner or mode of acquisition of the subject funds. Simply put, she merely stated in her answer with the
other respondents that the funds were "lawfully acquired" without detailing how exactly these funds were supposedly acquired legally by
them. Even in this case before us, her assertion that the funds were lawfully acquired remains bare and unaccompanied by any factual
support which can prove, by the presentation of evidence at a hearing, that indeed the funds were acquired legitimately by the Marcos
family.

Respondents' denials in their answer at the Sandiganbayan were based on their alleged lack of knowledge or information sufficient to
form a belief as to the truth of the allegations of the petition.

It is true that one of the modes of specific denial under the rules is a denial through a statement that the defendant is without knowledge
or information sufficient to form a belief as to the truth of the material averment in the complaint. The question, however, is whether the
kind of denial in respondents' answer qualifies as the specific denial called for by the rules. We do not think so. In Morales vs. Court of
Appeals,30 this Court ruled that if an allegation directly and specifically charges a party with having done, performed or committed a
particular act which the latter did not in fact do, perform or commit, a categorical and express denial must be made.

Here, despite the serious and specific allegations against them, the Marcoses responded by simply saying that they had no knowledge
or information sufficient to form a belief as to the truth of such allegations. Such a general, self-serving claim of ignorance of the facts
alleged in the petition for forfeiture was insufficient to raise an issue. Respondent Marcoses should have positively stated how it was
that they were supposedly ignorant of the facts alleged.31

To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for forfeiture stated:

23. The following presentation very clearly and overwhelmingly show in detail how both respondents clandestinely stashed
away the country's wealth to Switzerland and hid the same under layers upon layers of foundations and other corporate
entities to prevent its detection. Through their dummies/nominees, fronts or agents who formed those foundations or corporate
entities, they opened and maintained numerous bank accounts. But due to the difficulty if not the impossibility of detecting and
documenting all those secret accounts as well as the enormity of the deposits therein hidden, the following presentation is
confined to five identified accounts groups, with balances amounting to about $356-M with a reservation for the filing of a
supplemental or separate forfeiture complaint should the need arise. 32

Respondents' lame denial of the aforesaid allegation was:

22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country's
wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for being false, the truth
being that Respondents' aforesaid properties were lawfully acquired. 33

Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative pregnant, that is, a denial
pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an
admission of the averments it was directed at.34 Stated otherwise, a negative pregnant is a form of negative expression which carries
with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of
the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the
allegation as so qualified or modified are literally denied, has been held that the qualifying circumstances alone are denied while the
fact itself is admitted.35

In the instant case, the material allegations in paragraph 23 of the said petition were not specifically denied by respondents in
paragraph 22 of their answer. The denial contained in paragraph 22 of the answer was focused on the averment in paragraph 23 of the
petition for forfeiture that "Respondents clandestinely stashed the country's wealth in Switzerland and hid the same under layers and
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layers of foundations and corporate entities." Paragraph 22 of the respondents' answer was thus a denial pregnant with admissions of
the following substantial facts:

(1) the Swiss bank deposits existed and

(2) that the estimated sum thereof was US$356 million as of December, 1990.

Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the sum of about US$356 million,
not having been specifically denied by respondents in their answer, were deemed admitted by them pursuant to Section 11, Rule 8 of
the 1997 Revised Rules on Civil Procedure:

Material averment in the complaint, xxx shall be deemed admitted when not specifically denied. xxx. 36

By the same token, the following unsupported denials of respondents in their answer were pregnant with admissions of the substantial
facts alleged in the Republic's petition for forfeiture:

23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of knowledge or
information sufficient to form a belief as to the truth of the allegation since respondents were not privy to the transactions
regarding the alleged Azio-Verso-Vibur Foundation accounts, except that, as to respondent Imelda R. Marcos, she specifically
remembers that the funds involved were lawfully acquired.

24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegations since respondents were not privy to the transactions
and as to such transactions they were privy to, they cannot remember with exactitude the same having occurred a long time
ago, except as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired.

25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for lack of knowledge or information sufficient
to from a belief as to the truth of the allegations since respondents were not privy to the transactions and as to such
transaction they were privy to, they cannot remember with exactitude, the same having occurred a long time ago, except that
as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired.

26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for lack of knowledge and information
sufficient to form a belief as to the truth of the allegations since respondents were not privy to the transactions and as to such
transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago, except that as
to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired.

The matters referred to in paragraphs 23 to 26 of the respondents' answer pertained to the creation of five groups of accounts as well
as their respective ending balances and attached documents alleged in paragraphs 24 to 52 of the Republic's petition for forfeiture.
Respondent Imelda R. Marcos never specifically denied the existence of the Swiss funds. Her claim that "the funds involved were
lawfully acquired" was an acknowledgment on her part of the existence of said deposits. This only reinforced her earlier admission of
the allegation in paragraph 23 of the petition for forfeiture regarding the existence of the US$356 million Swiss bank deposits.

The allegations in paragraphs 4737 and 4838 of the petition for forfeiture referring to the creation and amount of the deposits of the
Rosalys-Aguamina Foundation as well as the averment in paragraph 52-a 39 of the said petition with respect to the sum of the Swiss
bank deposits estimated to be US$356 million were again not specifically denied by respondents in their answer. The respondents did
not at all respond to the issues raised in these paragraphs and the existence, nature and amount of the Swiss funds were therefore
deemed admitted by them. As held in Galofa vs. Nee Bon Sing,40 if a defendant's denial is a negative pregnant, it is equivalent to an
admission.

Moreover, respondents' denial of the allegations in the petition for forfeiture "for lack of knowledge or information sufficient to form a
belief as to the truth of the allegations since respondents were not privy to the transactions" was just a pretense. Mrs. Marcos' privity to
the transactions was in fact evident from her signatures on some of the vital documents 41 attached to the petition for forfeiture which
Mrs. Marcos failed to specifically deny as required by the rules.42

It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed personally by respondent Mrs.
Marcos and her late husband, Ferdinand E. Marcos, indicating that said documents were within their knowledge. As correctly pointed
out by Sandiganbayan Justice Francisco Villaruz, Jr. in his dissenting opinion:

The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving regulations of the Foundations for
the distribution of capital and income of the Foundations to the First and Second beneficiary (who are no other than FM and
his family), 4) opening of bank accounts for the Foundations, 5) changing the names of the Foundations, 6) transferring funds
and assets of the Foundations to other Foundations or Fides Trust, 7) liquidation of the Foundations as substantiated by the

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 Annexes U to U-168, Petition [for forfeiture] strongly indicate that FM and/or Imelda were the real owners of the assets
deposited in the Swiss banks, using the Foundations as dummies. 43

How could respondents therefore claim lack of sufficient knowledge or information regarding the existence of the Swiss bank deposits
and the creation of five groups of accounts when Mrs. Marcos and her late husband personally masterminded and participated in the
formation and control of said foundations? This is a fact respondent Marcoses were never able to explain.

Not only that. Respondents' answer also technically admitted the genuineness and due execution of the Income Tax Returns (ITRs)
and the balance sheets of the late Ferdinand E. Marcos and Imelda R. Marcos attached to the petition for forfeiture, as well as the
veracity of the contents thereof.

The answer again premised its denials of said ITRs and balance sheets on the ground of lack of knowledge or information sufficient to
form a belief as to the truth of the contents thereof. Petitioner correctly points out that respondents' denial was not really grounded on
lack of knowledge or information sufficient to form a belief but was based on lack of recollection. By reviewing their own records,
respondent Marcoses could have easily determined the genuineness and due execution of the ITRs and the balance sheets. They also
had the means and opportunity of verifying the same from the records of the BIR and the Office of the President. They did not.

When matters regarding which respondents claim to have no knowledge or information sufficient to form a belief are plainly and
necessarily within their knowledge, their alleged ignorance or lack of information will not be considered a specific denial. 44 An
unexplained denial of information within the control of the pleader, or is readily accessible to him, is evasive and is insufficient to
constitute an effective denial.45

The form of denial adopted by respondents must be availed of with sincerity and in good faith, and certainly not for the purpose of
confusing the adverse party as to what allegations of the petition are really being challenged; nor should it be made for the purpose of
delay.46 In the instant case, the Marcoses did not only present unsubstantiated assertions but in truth attempted to mislead and deceive
this Court by presenting an obviously contrived defense.

Simply put, a profession of ignorance about a fact which is patently and necessarily within the pleader's knowledge or means of
knowing is as ineffective as no denial at all.47 Respondents' ineffective denial thus failed to properly tender an issue and the averments
contained in the petition for forfeiture were deemed judicially admitted by them.

As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:

Its "specific denial" of the material allegation of the petition without setting forth the substance of the matters relied upon to
support its general denial, when such matters were plainly within its knowledge and it could not logically pretend ignorance as
to the same, therefore, failed to properly tender on issue.48

Thus, the general denial of the Marcos children of the allegations in the petition for forfeiture "for lack of knowledge or information
sufficient to form a belief as to the truth of the allegations since they were not privy to the transactions" cannot rightfully be accepted as
a defense because they are the legal heirs and successors-in-interest of Ferdinand E. Marcos and are therefore bound by the acts of
their father vis-a-vis the Swiss funds.

• PRE-TRIAL BRIEF DATED OCTOBER 18, 1993

The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said brief, Mrs. Marcos stressed that the funds involved
were lawfully acquired. But, as in their answer, they failed to state and substantiate how these funds were acquired lawfully. They failed
to present and attach even a single document that would show and prove the truth of their allegations. Section 6, Rule 18 of the 1997
Rules of Civil Procedure provides:

The parties shall file with the court and serve on the adverse party, x x x their respective pre-trial briefs which shall contain, among
others:

xxx

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

xxx

(f) the number and names of the witnesses, and the substance of their respective testimonies. 49

It is unquestionably within the court's power to require the parties to submit their pre-trial briefs and to state the number of witnesses
intended to be called to the stand, and a brief summary of the evidence each of them is expected to give as well as to disclose the
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number of documents to be submitted with a description of the nature of each. The tenor and character of the testimony of the
witnesses and of the documents to be deduced at the trial thus made known, in addition to the particular issues of fact and law, it
becomes apparent if genuine issues are being put forward necessitating the holding of a trial. Likewise, the parties are obliged not only
to make a formal identification and specification of the issues and their proofs, and to put these matters in writing and submit them to
the court within the specified period for the prompt disposition of the action. 50

The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos children, merely stated:

xxx

WITNESSES

4.1 Respondent Imelda will present herself as a witness and reserves the right to present additional witnesses as may be
necessary in the course of the trial.

xxx

DOCUMENTARY EVIDENCE

5.1 Respondent Imelda reserves the right to present and introduce in evidence documents as may be necessary in the course
of the trial.

Mrs. Marcos did not enumerate and describe the documents constituting her evidence. Neither the names of witnesses nor the nature
of their testimony was stated. What alone appeared certain was the testimony of Mrs. Marcos only who in fact had previously claimed
ignorance and lack of knowledge. And even then, the substance of her testimony, as required by the rules, was not made known either.
Such cunning tactics of respondents are totally unacceptable to this Court. We hold that, since no genuine issue was raised, the case
became ripe for summary judgment.

• OPPOSITION TO MOTION FOR SUMMARY JUDGMENT

DATED MARCH 21, 2000

The opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000 of petitioner Republic was merely
adopted by the Marcos children as their own opposition to the said motion. However, it was again not accompanied by affidavits,
depositions or admissions as required by Section 3, Rule 35 of the 1997 Rules on Civil Procedure:

x x x The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before hearing. After
hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits, depositions, and admissions
on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.51

The absence of opposing affidavits, depositions and admissions to contradict the sworn declarations in the Republic's motion only
demonstrated that the averments of such opposition were not genuine and therefore unworthy of belief.

• Demurrer to Evidence dated May 2, 2000;52

Motions for Reconsideration;53 and Memoranda
of Mrs. Marcos and the Marcos children54

All these pleadings again contained no allegations of facts showing their lawful acquisition of the funds. Once more, respondents
merely made general denials without alleging facts which would have been admissible in evidence at the hearing, thereby failing to
raise genuine issues of fact.

Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the pre-trial, her counsel stated that his client was just a
beneficiary of the funds, contrary to petitioner Republic's allegation that Mrs. Marcos disclaimed ownership of or interest in the funds.

This is yet another indication that respondents presented a fictitious defense because, during the pre-trial, Mrs. Marcos and the Marcos
children denied ownership of or interest in the Swiss funds:

PJ Garchitorena:

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 Make of record that as far as Imelda Marcos is concerned through the statement of Atty. Armando M. Marcelo that
the US$360 million more or less subject matter of the instant lawsuit as allegedly obtained from the various Swiss
Foundations do not belong to the estate of Marcos or to Imelda Marcos herself. That's your statement of facts?

Atty. MARCELO:

Yes, Your Honor.

PJ Garchitorena:

That's it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your point here? Does the estate of Marcos own
anything of the $360 million subject of this case.

Atty. TECSON:

We joined the Manifestation of Counsel.

PJ Garchitorena:

You do not own anything?

Atty. TECSON:

Yes, Your Honor.

PJ Garchitorena:

Counsel for Irene Araneta?

Atty. SISON:

I join the position taken by my other compañeros here, Your Honor.

xxx

Atty. SISON:

Irene Araneta as heir do (sic) not own any of the amount, Your Honor. 55

We are convinced that the strategy of respondent Marcoses was to confuse petitioner Republic as to what facts they would prove or
what issues they intended to pose for the court's resolution. There is no doubt in our mind that they were leading petitioner Republic,
and now this Court, to perplexity, if not trying to drag this forfeiture case to eternity.

• Manifestation dated May 26, 1998 filed by MRS.

Marcos; General/Supplemental Compromise
Agreement dated December 28, 1993

These pleadings of respondent Marcoses presented nothing but feigned defenses. In their earlier pleadings, respondents alleged either
that they had no knowledge of the existence of the Swiss deposits or that they could no longer remember anything as it happened a
long time ago. As to Mrs. Marcos, she remembered that it was lawfully acquired.

In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:

COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this Honorable Court, most respectfully
manifests:

That respondent Imelda R, Marcos owns 90% of the subject matter of the above-entitled case, being the sole beneficiary of
the dollar deposits in the name of the various foundations alleged in the case;

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 That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late President Ferdinand E.
Marcos.

In the Compromise/Supplemental Agreements, respondent Marcoses sought to implement the agreed distribution of the Marcos
assets, including the Swiss deposits. This was, to us, an unequivocal admission of ownership by the Marcoses of the said deposits.

But, as already pointed out, during the pre-trial conference, respondent Marcoses denied knowledge as well as ownership of the Swiss
funds.

Anyway we look at it, respondent Marcoses have put forth no real defense. The "facts" pleaded by respondents, while ostensibly raising
important questions or issues of fact, in reality comprised mere verbiage that was evidently wanting in substance and constituted no
genuine issues for trial.

We therefore rule that, under the circumstances, summary judgment is proper.

In fact, it is the law itself which determines when summary judgment is called for. Under the rules, summary judgment is appropriate
when there are no genuine issues of fact requiring the presentation of evidence in a full-blown trial. Even if on their face the pleadings
appear to raise issue, if the affidavits, depositions and admissions show that such issues are not genuine, then summary judgment as
prescribed by the rules must ensue as a matter of law.56

In sum, mere denials, if unaccompanied by any fact which will be admissible in evidence at a hearing, are not sufficient to raise genuine
issues of fact and will not defeat a motion for summary judgment. 57 A summary judgment is one granted upon motion of a party for an
expeditious settlement of the case, it appearing from the pleadings, depositions, admissions and affidavits that there are no important
questions or issues of fact posed and, therefore, the movant is entitled to a judgment as a matter of law. A motion for summary
judgment is premised on the assumption that the issues presented need not be tried either because these are patently devoid of
substance or that there is no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the prompt
disposition of a civil action where there exists no serious controversy.58 Summary judgment is a procedural device for the prompt
disposition of actions in which the pleadings raise only a legal issue, not a genuine issue as to any material fact. The theory of summary
judgment is that, although an answer may on its face appear to tender issues requiring trial, if it is established by affidavits, depositions
or admissions that those issues are not genuine but fictitious, the Court is justified in dispensing with the trial and rendering summary
judgment for petitioner.59

In the various annexes to the petition for forfeiture, petitioner Republic attached sworn statements of witnesses who had personal
knowledge of the Marcoses' participation in the illegal acquisition of funds deposited in the Swiss accounts under the names of five
groups or foundations. These sworn statements substantiated the ill-gotten nature of the Swiss bank deposits. In their answer and other
subsequent pleadings, however, the Marcoses merely made general denials of the allegations against them without stating facts
admissible in evidence at the hearing, thereby failing to raise any genuine issues of fact.

Under these circumstances, a trial would have served no purpose at all and would have been totally unnecessary, thus justifying a
summary judgment on the petition for forfeiture. There were no opposing affidavits to contradict the sworn declarations of the witnesses
of petitioner Republic, leading to the inescapable conclusion that the matters raised in the Marcoses' answer were false.

Time and again, this Court has encountered cases like this which are either only half-heartedly defended or, if the semblance of a
defense is interposed at all, it is only to delay disposition and gain time. It is certainly not in the interest of justice to allow respondent
Marcoses to avail of the appellate remedies accorded by the Rules of Court to litigants in good faith, to the prejudice of the Republic
and ultimately of the Filipino people. From the beginning, a candid demonstration of respondents' good faith should have been made to
the court below. Without the deceptive reasoning and argumentation, this protracted litigation could have ended a long time ago.

Since 1991, when the petition for forfeiture was first filed, up to the present, all respondents have offered are foxy responses like "lack
of sufficient knowledge or lack of privity" or "they cannot recall because it happened a long time ago" or, as to Mrs. Marcos, "the funds
were lawfully acquired." But, whenever it suits them, they also claim ownership of 90% of the funds and allege that only 10% belongs to
the Marcos estate. It has been an incredible charade from beginning to end.

In the hope of convincing this Court to rule otherwise, respondents Maria Imelda Marcos-Manotoc and Ferdinand R. Marcos Jr. contend
that "by its positive acts and express admissions prior to filing the motion for summary judgment on March 10, 2000, petitioner Republic
had bound itself to go to trial on the basis of existing issues. Thus, it had legally waived whatever right it had to move for summary
judgment."60

We do not think so. The alleged positive acts and express admissions of the petitioner did not preclude it from filing a motion for
summary judgment.

Rule 35 of the 1997 Rules of Civil Procedure provides:

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 Rule 35

Summary Judgment

Section 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain
a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor upon all or any part thereof.

Section 2. Summary judgment for defending party. - A party against whom a claim, counterclaim, or cross-claim is asserted or
a declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a summary
judgment in his favor as to all or any part thereof. (Emphasis ours) 61

Under the rule, the plaintiff can move for summary judgment "at any time after the pleading in answer thereto (i.e., in answer to the
claim, counterclaim or cross-claim) has been served." No fixed reglementary period is provided by the Rules. How else does one
construe the phrase "any time after the answer has been served?"

This issue is actually one of first impression. No local jurisprudence or authoritative work has touched upon this matter. This being so,
an examination of foreign laws and jurisprudence, particularly those of the United States where many of our laws and rules were
copied, is in order.

Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to recover upon a claim, counterclaim or cross-claim may
move for summary judgment at any time after the expiration of 20 days from the commencement of the action or after service of a
motion for summary judgment by the adverse party, and that a party against whom a claim, counterclaim or cross-claim is asserted may
move for summary judgment at any time.

However, some rules, particularly Rule 113 of the Rules of Civil Practice of New York, specifically provide that a motion for summary
judgment may not be made until issues have been joined, that is, only after an answer has been served. 62 Under said rule, after issues
have been joined, the motion for summary judgment may be made at any stage of the litigation.63 No fixed prescriptive period is
provided.

Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide that a motion for summary judgment may not be made
until issues have been joined, meaning, the plaintiff has to wait for the answer before he can move for summary judgment. 64 And like
the New York rules, ours do not provide for a fixed reglementary period within which to move for summary judgment.

This being so, the New York Supreme Court's interpretation of Rule 113 of the Rules of Civil Practice can be applied by analogy to the
interpretation of Section 1, Rule 35, of our 1997 Rules of Civil Procedure.

Under the New York rule, after the issues have been joined, the motion for summary judgment may be made at any stage of the
litigation. And what exactly does the phrase "at any stage of the litigation" mean? In Ecker vs. Muzysh, 65 the New York Supreme Court
ruled:

"PER CURIAM.

Plaintiff introduced her evidence and the defendants rested on the case made by the plaintiff. The case was submitted. Owing
to the serious illness of the trial justice, a decision was not rendered within sixty days after the final adjournment of the term at
which the case was tried. With the approval of the trial justice, the plaintiff moved for a new trial under Section 442 of the Civil
Practice Act. The plaintiff also moved for summary judgment under Rule 113 of the Rules of Civil Practice. The motion was
opposed mainly on the ground that, by proceeding to trial, the plaintiff had waived her right to summary
judgment and that the answer and the opposing affidavits raised triable issues. The amount due and unpaid under the
contract is not in dispute. The Special Term granted both motions and the defendants have appealed.

The Special Term properly held that the answer and the opposing affidavits raised no triable issue. Rule 113 of the Rules of
Civil Practice and the Civil Practice Act prescribe no limitation as to the time when a motion for summary judgment
must be made. The object of Rule 113 is to empower the court to summarily determine whether or not a bona fide
issue exists between the parties, and there is no limitation on the power of the court to make such a determination at
any stage of the litigation." (emphasis ours)

On the basis of the aforequoted disquisition, "any stage of the litigation" means that "even if the plaintiff has proceeded to trial, this does
not preclude him from thereafter moving for summary judgment." 66

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In the case at bar, petitioner moved for summary judgment after pre-trial and before its scheduled date for presentation of evidence.
Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-trial conference, petitioner "waived" its right to summary
judgment.

This argument must fail in the light of the New York Supreme Court ruling which we apply by analogy to this case. In Ecker,67 the
defendant opposed the motion for summary judgment on a ground similar to that raised by the Marcoses, that is, "that plaintiff had
waived her right to summary judgment" by her act of proceeding to trial. If, as correctly ruled by the New York court, plaintiff was
allowed to move for summary judgment even after trial and submission of the case for resolution, more so should we permit it in the
present case where petitioner moved for summary judgment before trial.

Therefore, the phrase "anytime after the pleading in answer thereto has been served" in Section 1, Rule 35 of our Rules of Civil
Procedure means "at any stage of the litigation." Whenever it becomes evident at any stage of the litigation that no triable issue exists,
or that the defenses raised by the defendant(s) are sham or frivolous, plaintiff may move for summary judgment. A contrary
interpretation would go against the very objective of the Rule on Summary Judgment which is to "weed out sham claims or defenses
thereby avoiding the expense and loss of time involved in a trial." 68

In cases with political undertones like the one at bar, adverse parties will often do almost anything to delay the proceedings in the hope
that a future administration sympathetic to them might be able to influence the outcome of the case in their favor. This is rank injustice
we cannot tolerate.

The law looks with disfavor on long, protracted and expensive litigation and encourages the speedy and prompt disposition of cases.
That is why the law and the rules provide for a number of devices to ensure the speedy disposition of cases. Summary judgment is one
of them.

Faithful therefore to the spirit of the law on summary judgment which seeks to avoid unnecessary expense and loss of time in a trial, we
hereby rule that petitioner Republic could validly move for summary judgment any time after the respondents' answer was filed or, for
that matter, at any subsequent stage of the litigation. The fact that petitioner agreed to proceed to trial did not in any way prevent it from
moving for summary judgment, as indeed no genuine issue of fact was ever validly raised by respondent Marcoses.

This interpretation conforms with the guiding principle enshrined in Section 6, Rule 1 of the 1997 Rules of Civil Procedure that the
"[r]ules should be liberally construed in order to promote their objective of securing a just, speedy and inexpensive disposition of every
action and proceeding."69

Respondents further allege that the motion for summary judgment was based on respondents' answer and other documents that had
long been in the records of the case. Thus, by the time the motion was filed on March 10, 2000, estoppel by laches had already set in
against petitioner.

We disagree. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by
exercising due diligence, could or should have been done earlier, warranting a presumption that the person has abandoned his right or
declined to assert it.70 In effect, therefore, the principle of laches is one of estoppel because "it prevents people who have slept on their
rights from prejudicing the rights of third parties who have placed reliance on the inaction of the original parties and their successors-in-
interest".71

A careful examination of the records, however, reveals that petitioner was in fact never remiss in pursuing its case against respondent
Marcoses through every remedy available to it, including the motion for summary judgment.

Petitioner Republic initially filed its motion for summary judgment on October 18, 1996. The motion was denied because of the pending
compromise agreement between the Marcoses and petitioner. But during the pre-trial conference, the Marcoses denied ownership of
the Swiss funds, prompting petitioner to file another motion for summary judgment now under consideration by this Court. It was the
subsequent events that transpired after the answer was filed, therefore, which prevented petitioner from filing the questioned motion. It
was definitely not because of neglect or inaction that petitioner filed the (second) motion for summary judgment years after
respondents' answer to the petition for forfeiture.

In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but also that some unfair injury to
them might result unless the action is barred.72

This, respondents failed to bear out. In fact, during the pre-trial conference, the Marcoses disclaimed ownership of the Swiss deposits.
Not being the owners, as they claimed, respondents did not have any vested right or interest which could be adversely affected by
petitioner's alleged inaction.

But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or laches does not apply when the
government sues as a sovereign or asserts governmental rights.73 Nor can estoppel validate an act that contravenes law or public
policy.74

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As a final point, it must be emphasized that laches is not a mere question of time but is principally a question of the inequity or
unfairness of permitting a right or claim to be enforced or asserted. 75 Equity demands that petitioner Republic should not be barred from
pursuing the people's case against the Marcoses.

(2) The Propriety of Forfeiture

The matter of summary judgment having been thus settled, the issue of whether or not petitioner Republic was able to prove its case for
forfeiture in accordance with the requisites of Sections 2 and 3 of RA 1379 now takes center stage.

The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to forfeiture, if its amount or value is
manifestly disproportionate to the official salary and other lawful income of the public officer who owns it. Hence, Sections 2 and 6 of
RA 137976 provide:

xxx xxx

Section 2. Filing of petition. – Whenever any public officer or employee has acquired during his incumbency an amount or
property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income
and the income from legitimately acquired property, said property shall be presumed prima facie to have been unlawfully
acquired.

xxx xxx

Sec. 6. Judgment – If the respondent is unable to show to the satisfaction of the court that he has lawfully acquired the
property in question, then the court shall declare such property in question, forfeited in favor of the State, and by virtue of such
judgment the property aforesaid shall become the property of the State. Provided, That no judgment shall be rendered within
six months before any general election or within three months before any special election. The Court may, in addition, refer
this case to the corresponding Executive Department for administrative or criminal action, or both.

From the above-quoted provisions of the law, the following facts must be established in order that forfeiture or seizure of the Swiss
deposits may be effected:

(1) ownership by the public officer of money or property acquired during his incumbency, whether it be in his name or
otherwise, and

(2) the extent to which the amount of that money or property exceeds, i. e., is grossly disproportionate to, the legitimate
income of the public officer.

That spouses Ferdinand and Imelda Marcos were public officials during the time material to the instant case was never in dispute.
Paragraph 4 of respondent Marcoses' answer categorically admitted the allegations in paragraph 4 of the petition for forfeiture as to the
personal circumstances of Ferdinand E. Marcos as a public official who served without interruption as Congressman, Senator, Senate
President and President of the Republic of the Philippines from December 1, 1965 to February 25, 1986. 77 Likewise, respondents
admitted in their answer the contents of paragraph 5 of the petition as to the personal circumstances of Imelda R. Marcos who once
served as a member of the Interim Batasang Pambansa from 1978 to 1984 and as Metro Manila Governor, concurrently Minister of
Human Settlements, from June 1976 to February 1986.78

Respondent Mrs. Marcos also admitted in paragraph 10 of her answer the allegations of paragraph 11 of the petition for forfeiture which
referred to the accumulated salaries of respondents Ferdinand E. Marcos and Imelda R. Marcos. 79 The combined accumulated salaries
of the Marcos couple were reflected in the Certification dated May 27, 1986 issued by then Minister of Budget and Management Alberto
Romulo.80 The Certification showed that, from 1966 to 1985, Ferdinand E. Marcos and Imelda R. Marcos had accumulated salaries in
the amount of P1,570,000 and P718,750, respectively, or a total of P2,288,750:

Ferdinand E. Marcos, as President

1966-1976 at P60,000/year P660,000

1977-1984 at P100,000/year 800,000
1985 at P110,000/year 110,000
P1,570,00

Imelda R. Marcos, as Minister

June 1976-1985 at P75,000/year P718,000

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In addition to their accumulated salaries from 1966 to 1985 are the Marcos couple's combined salaries from January to February 1986
in the amount of P30,833.33. Hence, their total accumulated salaries amounted to P2,319,583.33. Converted to U.S. dollars on the
basis of the corresponding peso-dollar exchange rates prevailing during the applicable period when said salaries were received, the
total amount had an equivalent value of $304,372.43.

The dollar equivalent was arrived at by using the official annual rates of exchange of the Philippine peso and the US dollar from 1965 to
1985 as well as the official monthly rates of exchange in January and February 1986 issued by the Center for Statistical Information of
the Bangko Sentral ng Pilipinas.

Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of Court provides that:

Section 4. – Judicial admissions – An admission, verbal or written, made by a party in the course of the proceedings in the
same case does not require proof. The admission may be contradicted only by showing that it was made through palpable
mistake or that no such admission was made.81

It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in the course of the trial either by verbal or
written manifestations or stipulations; or (c) in other stages of judicial proceedings, as in the pre-trial of the case. 82 Thus, facts pleaded
in the petition and answer, as in the case at bar, are deemed admissions of petitioner and respondents, respectively, who are not
permitted to contradict them or subsequently take a position contrary to or inconsistent with such admissions. 83

The sum of $304,372.43 should be held as the only known lawful income of respondents since they did not file any Statement of Assets
and Liabilities (SAL), as required by law, from which their net worth could be determined. Besides, under the 1935 Constitution,
Ferdinand E. Marcos as President could not receive "any other emolument from the Government or any of its subdivisions and
instrumentalities".84 Likewise, under the 1973 Constitution, Ferdinand E. Marcos as President could "not receive during his tenure any
other emolument from the Government or any other source."85 In fact, his management of businesses, like the administration of
foundations to accumulate funds, was expressly prohibited under the 1973 Constitution:

Article VII, Sec. 4(2) – The President and the Vice-President shall not, during their tenure, hold any other office except when
otherwise provided in this Constitution, nor may they practice any profession, participate directly or indirectly in the
management of any business, or be financially interested directly or indirectly in any contract with, or in any franchise or
special privilege granted by the Government or any other subdivision, agency, or instrumentality thereof, including any
government owned or controlled corporation.

Article VII, Sec. 11 – No Member of the National Assembly shall appear as counsel before any court inferior to a court with
appellate jurisdiction, x x x. Neither shall he, directly or indirectly, be interested financially in any contract with, or in any
franchise or special privilege granted by the Government, or any subdivision, agency, or instrumentality thereof including any
government owned or controlled corporation during his term of office. He shall not intervene in any matter before any office of
the government for his pecuniary benefit.

Article IX, Sec. 7 – The Prime Minister and Members of the Cabinet shall be subject to the provision of Section 11, Article VIII
hereof and may not appear as counsel before any court or administrative body, or manage any business, or practice any
profession, and shall also be subject to such other disqualification as may be provided by law.

Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for determining the existence of a prima
facie case of forfeiture of the Swiss funds.

Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture of the Swiss funds since it failed to
prove the essential elements under Section 3, paragraphs (c), (d) and (e) of RA 1379. As the Act is a penal statute, its provisions are
mandatory and should thus be construed strictly against the petitioner and liberally in favor of respondent Marcoses.

We hold that it was not for petitioner to establish the Marcoses' other lawful income or income from legitimately acquired property for
the presumption to apply because, as between petitioner and respondents, the latter were in a better position to know if there were
such other sources of lawful income. And if indeed there was such other lawful income, respondents should have specifically stated the
same in their answer. Insofar as petitioner Republic was concerned, it was enough to specify the known lawful income of respondents.

Section 9 of the PCGG Rules and Regulations provides that, in determining prima facie evidence of ill-gotten wealth, the value of the
accumulated assets, properties and other material possessions of those covered by Executive Order Nos. 1 and 2 must be out of
proportion to the known lawful income of such persons. The respondent Marcos couple did not file any Statement of Assets and
Liabilities (SAL) from which their net worth could be determined. Their failure to file their SAL was in itself a violation of law and to allow
them to successfully assail the Republic for not presenting their SAL would reward them for their violation of the law.

Further, contrary to the claim of respondents, the admissions made by them in their various pleadings and documents were valid. It is of
record that respondents judicially admitted that the money deposited with the Swiss banks belonged to them.

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We agree with petitioner that respondent Marcoses made judicial admissions of their ownership of the subject Swiss bank deposits in
their answer, the General/Supplemental Agreements, Mrs. Marcos' Manifestation and Constancia dated May 5, 1999, and the
Undertaking dated February 10, 1999. We take note of the fact that the Associate Justices of the Sandiganbayan were unanimous in
holding that respondents had made judicial admissions of their ownership of the Swiss funds.

In their answer, aside from admitting the existence of the subject funds, respondents likewise admitted ownership thereof. Paragraph
22 of respondents' answer stated:

22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that respondents clandestinely stashed the
country's wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for being false,
the truth being that respondents' aforesaid properties were lawfully acquired. (emphasis supplied)

By qualifying their acquisition of the Swiss bank deposits as lawful, respondents unwittingly admitted their ownership thereof.

Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by failing to deny under oath the genuineness and due
execution of certain actionable documents bearing her signature attached to the petition. As discussed earlier, Section 11, Rule 8 86 of
the 1997 Rules of Civil Procedure provides that material averments in the complaint shall be deemed admitted when not specifically
denied.

The General87 and Supplemental88 Agreements executed by petitioner and respondents on December 28, 1993 further bolstered the
claim of petitioner Republic that its case for forfeiture was proven in accordance with the requisites of Sections 2 and 3 of RA 1379. The
whereas clause in the General Agreement declared that:

WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal on December 21, 1990, that the
$356 million belongs in principle to the Republic of the Philippines provided certain conditionalities are met, but even after 7
years, the FIRST PARTY has not been able to procure a final judgment of conviction against the PRIVATE PARTY.

While the Supplemental Agreement warranted, inter alia, that:

In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall be entitled to the equivalent of 25%
of the amount that may be eventually withdrawn from said $356 million Swiss deposits.

The stipulations set forth in the General and Supplemental Agreements undeniably indicated the manifest intent of respondents to enter
into a compromise with petitioner. Corollarily, respondents' willingness to agree to an amicable settlement with the Republic only
affirmed their ownership of the Swiss deposits for the simple reason that no person would acquiesce to any concession over such huge
dollar deposits if he did not in fact own them.

Respondents make much capital of the pronouncement by this Court that the General and Supplemental Agreements were null and
void.89 They insist that nothing in those agreements could thus be admitted in evidence against them because they stood on the same
ground as an accepted offer which, under Section 27, Rule 13090 of the 1997 Rules of Civil Procedure, provides that "in civil cases, an
offer of compromise is not an admission of any liability and is not admissible in evidence against the offeror."

We find no merit in this contention. The declaration of nullity of said agreements was premised on the following constitutional and
statutory infirmities: (1) the grant of criminal immunity to the Marcos heirs was against the law; (2) the PCGG's commitment to exempt
from all forms of taxes the properties to be retained by the Marcos heirs was against the Constitution; and (3) the government's
undertaking to cause the dismissal of all cases filed against the Marcoses pending before the Sandiganbayan and other courts
encroached on the powers of the judiciary. The reasons relied upon by the Court never in the least bit even touched on the veracity and
truthfulness of respondents' admission with respect to their ownership of the Swiss funds. Besides, having made certain admissions in
those agreements, respondents cannot now deny that they voluntarily admitted owning the subject Swiss funds, notwithstanding the
fact that the agreements themselves were later declared null and void.

The following observation of Sandiganbayan Justice Catalino Castañeda, Jr. in the decision dated September 19, 2000 could not have
been better said:

x x x The declaration of nullity of the two agreements rendered the same without legal effects but it did not detract from the
admissions of the respondents contained therein. Otherwise stated, the admissions made in said agreements, as quoted
above, remain binding on the respondents.91

A written statement is nonetheless competent as an admission even if it is contained in a document which is not itself effective for the
purpose for which it is made, either by reason of illegality, or incompetency of a party thereto, or by reason of not being signed,
executed or delivered. Accordingly, contracts have been held as competent evidence of admissions, although they may be
unenforceable.92

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The testimony of respondent Ferdinand Marcos, Jr. during the hearing on the motion for the approval of the Compromise Agreement on
April 29, 1998 also lent credence to the allegations of petitioner Republic that respondents admitted ownership of the Swiss bank
accounts. We quote the salient portions of Ferdinand Jr.'s formal declarations in open court:

ATTY. FERNANDO:

Mr. Marcos, did you ever have any meetings with PCGG Chairman Magtanggol C. Gunigundo?

F. MARCOS, JR.:

Yes. I have had very many meetings in fact with Chairman.

ATTY. FERNANDO:

Would you recall when the first meeting occurred?

PJ GARCHITORENA:

In connection with what?

ATTY. FERNANDO:

In connection with the ongoing talks to compromise the various cases initiated by PCGG against your family?

F. MARCOS, JR.:

The nature of our meetings was solely concerned with negotiations towards achieving some kind of agreement
between the Philippine government and the Marcos family. The discussions that led up to the compromise agreement
were initiated by our then counsel Atty. Simeon Mesina x x x. 93

xxx xxx xxx

ATTY. FERNANDO:

What was your reaction when Atty. Mesina informed you of this possibility?

F. MARCOS, JR.:

My reaction to all of these approaches is that I am always open, we are always open, we are very much always in
search of resolution to the problem of the family and any approach that has been made us, we have entertained. And
so my reaction was the same as what I have always … why not? Maybe this is the one that will finally put an end to
this problem.94

xxx xxx xxx

ATTY. FERNANDO:

Basically, what were the true amounts of the assets in the bank?

PJ GARCHITORENA:

So, we are talking about liquid assets here? Just Cash?

F. MARCOS, JR.:

Well, basically, any assets. Anything that was under the Marcos name in any of the banks in Switzerland which may
necessarily be not cash.95

xxx xxx xxx

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 PJ GARCHITORENA:

x x x What did you do in other words, after being apprised of this contract in connection herewith?

F. MARCOS, JR.:

I assumed that we are beginning to implement the agreement because this was forwarded through the Philippine
government lawyers through our lawyers and then, subsequently, to me. I was a little surprised because we hadn't
really discussed the details of the transfer of the funds, what the bank accounts, what the mechanism would be. But
nevertheless, I was happy to see that as far as the PCGG is concerned, that the agreement was perfected and that
we were beginning to implement it and that was a source of satisfaction to me because I thought that finally it will be
the end.96

Ferdinand Jr.'s pronouncements, taken in context and in their entirety, were a confirmation of respondents' recognition of their
ownership of the Swiss bank deposits. Admissions of a party in his testimony are receivable against him. If a party, as a witness,
deliberately concedes a fact, such concession has the force of a judicial admission. 97 It is apparent from Ferdinand Jr.'s testimony that
the Marcos family agreed to negotiate with the Philippine government in the hope of finally putting an end to the problems besetting the
Marcos family regarding the Swiss accounts. This was doubtlessly an acknowledgment of ownership on their part. The rule is that the
testimony on the witness stand partakes of the nature of a formal judicial admission when a party testifies clearly and unequivocally to a
fact which is peculiarly within his own knowledge.98

In her Manifestation99 dated May 26, 1998, respondent Imelda Marcos furthermore revealed the following:

That respondent Imelda R. Marcos owns 90% of the subject matter of the above-entitled case, being the sole beneficiary of
the dollar deposits in the name of the various foundations alleged in the case;

That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late President Ferdinand E.
Marcos;

xxx xxx xxx

Respondents' ownership of the Swiss bank accounts as borne out by Mrs. Marcos' manifestation is as bright as sunlight. And her claim
that she is merely a beneficiary of the Swiss deposits is belied by her own signatures on the appended copies of the documents
substantiating her ownership of the funds in the name of the foundations. As already mentioned, she failed to specifically deny under
oath the authenticity of such documents, especially those involving "William Saunders" and "Jane Ryan" which actually referred to
Ferdinand Marcos and Imelda Marcos, respectively. That failure of Imelda Marcos to specifically deny the existence, much less the
genuineness and due execution, of the instruments bearing her signature, was tantamount to a judicial admission of the genuineness
and due execution of said instruments, in accordance with Section 8, Rule 8 100 of the 1997 Rules of Civil Procedure.

Likewise, in her Constancia101 dated May 6, 1999, Imelda Marcos prayed for the approval of the Compromise Agreement and the
subsequent release and transfer of the $150 million to the rightful owner. She further made the following manifestations:

xxx xxx xxx

2. The Republic's cause of action over the full amount is its forfeiture in favor of the government if found to be ill-gotten. On the
other hand, the Marcoses defend that it is a legitimate asset. Therefore, both parties have an inchoate right of ownership over
the account. If it turns out that the account is of lawful origin, the Republic may yield to the Marcoses. Conversely, the
Marcoses must yield to the Republic. (underscoring supplied)

xxx xxx xxx

3. Consistent with the foregoing, and the Marcoses having committed themselves to helping the less fortunate, in the interest
of peace, reconciliation and unity, defendant MADAM IMELDA ROMUALDEZ MARCOS, in firm abidance thereby, hereby
affirms her agreement with the Republic for the release and transfer of the US Dollar 150 million for proper disposition, without
prejudice to the final outcome of the litigation respecting the ownership of the remainder.

Again, the above statements were indicative of Imelda's admission of the Marcoses' ownership of the Swiss deposits as in fact "the
Marcoses defend that it (Swiss deposits) is a legitimate (Marcos) asset."

On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand Marcos, Jr. and Maria Irene Marcos-Araneta filed a
motion102 on May 4, 1998 asking the Sandiganbayan to place the res (Swiss deposits) in custodia legis:

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 7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits are placed in custodia legis or
within the Court's protective mantle, its dissipation or misappropriation by the petitioner looms as a distinct possibility.

Such display of deep, personal interest can only come from someone who believes that he has a marked and intimate right over the
considerable dollar deposits. Truly, by filing said motion, the Marcos children revealed their ownership of the said deposits.

Lastly, the Undertaking103 entered into by the PCGG, the PNB and the Marcos foundations on February 10, 1999, confirmed the
Marcoses' ownership of the Swiss bank deposits. The subject Undertaking brought to light their readiness to pay the human rights
victims out of the funds held in escrow in the PNB. It stated:

WHEREAS, the Republic of the Philippines sympathizes with the plight of the human rights victims-plaintiffs in the
aforementioned litigation through the Second Party, desires to assist in the satisfaction of the judgment awards of said human
rights victims-plaintiffs, by releasing, assigning and or waiving US$150 million of the funds held in escrow under the Escrow
Agreements dated August 14, 1995, although the Republic is not obligated to do so under final judgments of the Swiss courts
dated December 10 and 19, 1997, and January 8, 1998;

WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its rights and interests over said US$150
million to the aforementioned human rights victims-plaintiffs.

All told, the foregoing disquisition negates the claim of respondents that "petitioner failed to prove that they acquired or own the Swiss
funds" and that "it was only by arbitrarily isolating and taking certain statements made by private respondents out of context that
petitioner was able to treat these as judicial admissions." The Court is fully aware of the relevance, materiality and implications of every
pleading and document submitted in this case. This Court carefully scrutinized the proofs presented by the parties. We analyzed,
assessed and weighed them to ascertain if each piece of evidence rightfully qualified as an admission. Owing to the far-reaching
historical and political implications of this case, we considered and examined, individually and totally, the evidence of the parties, even if
it might have bordered on factual adjudication which, by authority of the rules and jurisprudence, is not usually done by this Court.
There is no doubt in our mind that respondent Marcoses admitted ownership of the Swiss bank deposits.

We have always adhered to the familiar doctrine that an admission made in the pleadings cannot be controverted by the party making
such admission and becomes conclusive on him, and that all proofs submitted by him contrary thereto or inconsistent therewith should
be ignored, whether an objection is interposed by the adverse party or not. 104 This doctrine is embodied in Section 4, Rule 129 of the
Rules of Court:

SEC. 4. Judicial admissions. ─ An admission, verbal or written, made by a party in the course of the proceedings in the same
case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake
or that no such admission was made.105

In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of the Swiss deposits is definitely
binding on them.

The individual and separate admissions of each respondent bind all of them pursuant to Sections 29 and 31, Rule 130 of the Rules of
Court:

SEC. 29. Admission by co-partner or agent. ─ The act or declaration of a partner or agent of the party within the scope of his
authority and during the existence of the partnership or agency, may be given in evidence against such party after the
partnership or agency is shown by evidence other than such act or declaration. The same rule applies to the act or declaration
of a joint owner, joint debtor, or other person jointly interested with the party. 106

SEC. 31. Admission by privies. ─ Where one derives title to property from another, the act, declaration, or omission of the
latter, while holding the title, in relation to the property, is evidence against the former. 107

The declarations of a person are admissible against a party whenever a "privity of estate" exists between the declarant and the party,
the term "privity of estate" generally denoting a succession in rights. 108 Consequently, an admission of one in privity with a party to the
record is competent.109 Without doubt, privity exists among the respondents in this case. And where several co-parties to the record are
jointly interested in the subject matter of the controversy, the admission of one is competent against all. 110

Respondents insist that the Sandiganbayan is correct in ruling that petitioner Republic has failed to establish a prima facie case for the
forfeiture of the Swiss deposits.

We disagree. The sudden turn-around of the Sandiganbayan was really strange, to say the least, as its findings and conclusions were
not borne out by the voluminous records of this case.

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Section 2 of RA 1379 explicitly states that "whenever any public officer or employee has acquired during his incumbency an amount of
property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the
income from legitimately acquired property, said property shall be presumed prima facie to have been unlawfully acquired. x x x"

The elements which must concur for this prima facie presumption to apply are:

(1) the offender is a public officer or employee;

(2) he must have acquired a considerable amount of money or property during his incumbency; and

(3) said amount is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income
and the income from legitimately acquired property.

It is undisputed that spouses Ferdinand and Imelda Marcos were former public officers. Hence, the first element is clearly extant.

The second element deals with the amount of money or property acquired by the public officer during his incumbency. The Marcos
couple indubitably acquired and owned properties during their term of office. In fact, the five groups of Swiss accounts were admittedly
owned by them. There is proof of the existence and ownership of these assets and properties and it suffices to comply with the second
element.

The third requirement is met if it can be shown that such assets, money or property is manifestly out of proportion to the public officer's
salary and his other lawful income. It is the proof of this third element that is crucial in determining whether a prima facie presumption
has been established in this case.

Petitioner Republic presented not only a schedule indicating the lawful income of the Marcos spouses during their incumbency but also
evidence that they had huge deposits beyond such lawful income in Swiss banks under the names of five different foundations. We
believe petitioner was able to establish the prima facie presumption that the assets and properties acquired by the Marcoses
were manifestly and patently disproportionate to their aggregate salaries as public officials. Otherwise stated, petitioner presented
enough evidence to convince us that the Marcoses had dollar deposits amounting to US $356 million representing the balance of the
Swiss accounts of the five foundations, an amount way, way beyond their aggregate legitimate income of only US$304,372.43 during
their incumbency as government officials.

Considering, therefore, that the total amount of the Swiss deposits was considerably out of proportion to the known lawful income of the
Marcoses, the presumption that said dollar deposits were unlawfully acquired was duly established. It was sufficient for the petition for
forfeiture to state the approximate amount of money and property acquired by the respondents, and their total government salaries.
Section 9 of the PCGG Rules and Regulations states:

Prima Facie Evidence. – Any accumulation of assets, properties, and other material possessions of those persons covered by
Executive Orders No. 1 and No. 2, whose value is out of proportion to their known lawful income is prima facie deemed ill-
gotten wealth.

Indeed, the burden of proof was on the respondents to dispute this presumption and show by clear and convincing evidence that the
Swiss deposits were lawfully acquired and that they had other legitimate sources of income. A presumption is prima facie proof of the
fact presumed and, unless the fact thus prima facie established by legal presumption is disproved, it must stand as proved. 111

Respondent Mrs. Marcos argues that the foreign foundations should have been impleaded as they were indispensable parties without
whom no complete determination of the issues could be made. She asserts that the failure of petitioner Republic to implead the
foundations rendered the judgment void as the joinder of indispensable parties was a sine qua non exercise of judicial power.
Furthermore, the non-inclusion of the foreign foundations violated the conditions prescribed by the Swiss government regarding the
deposit of the funds in escrow, deprived them of their day in court and denied them their rights under the Swiss constitution and
international law.112

The Court finds that petitioner Republic did not err in not impleading the foreign foundations. Section 7, Rule 3 of the 1997 Rules of
Civil Procedure,113 taken from Rule 19b of the American Federal Rules of Civil Procedure, provides for the compulsory joinder of
indispensable parties. Generally, an indispensable party must be impleaded for the complete determination of the suit. However, failure
to join an indispensable party does not divest the court of jurisdiction since the rule regarding indispensable parties is founded on
equitable considerations and is not jurisdictional. Thus, the court is not divested of its power to render a decision even in the absence of
indispensable parties, though such judgment is not binding on the non-joined party. 114

An indispensable party115 has been defined as one:

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 [who] must have a direct interest in the litigation; and if this interest is such that it cannot be separated from that of the parties
to the suit, if the court cannot render justice between the parties in his absence, if the decree will have an injurious effect upon
his interest, or if the final determination of the controversy in his absence will be inconsistent with equity and good conscience.

There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the presence of the other party?
and (2) can the case be decided on its merits without prejudicing the rights of the other party? 116 There is, however, no fixed formula for
determining who is an indispensable party; this can only be determined in the context and by the facts of the particular suit or litigation.

In the present case, there was an admission by respondent Imelda Marcos in her May 26, 1998 Manifestation before the
Sandiganbayan that she was the sole beneficiary of 90% of the subject matter in controversy with the remaining 10% belonging to the
estate of Ferdinand Marcos.117 Viewed against this admission, the foreign foundations were not indispensable parties. Their non-
participation in the proceedings did not prevent the court from deciding the case on its merits and according full relief to petitioner
Republic. The judgment ordering the return of the $356 million was neither inimical to the foundations' interests nor inconsistent with
equity and good conscience. The admission of respondent Imelda Marcos only confirmed what was already generally known: that the
foundations were established precisely to hide the money stolen by the Marcos spouses from petitioner Republic. It negated whatever
illusion there was, if any, that the foreign foundations owned even a nominal part of the assets in question.

The rulings of the Swiss court that the foundations, as formal owners, must be given an opportunity to participate in the proceedings
hinged on the assumption that they owned a nominal share of the assets. 118 But this was already refuted by no less than Mrs. Marcos
herself. Thus, she cannot now argue that the ruling of the Sandiganbayan violated the conditions set by the Swiss court. The directive
given by the Swiss court for the foundations to participate in the proceedings was for the purpose of protecting whatever nominal
interest they might have had in the assets as formal owners. But inasmuch as their ownership was subsequently repudiated by Imelda
Marcos, they could no longer be considered as indispensable parties and their participation in the proceedings became unnecessary.

In Republic vs. Sandiganbayan,119 this Court ruled that impleading the firms which are the res of the action was unnecessary:

"And as to corporations organized with ill-gotten wealth, but are not themselves guilty of misappropriation, fraud or other illicit
conduct – in other words, the companies themselves are not the object or thing involved in the action, the res thereof – there is
no need to implead them either. Indeed, their impleading is not proper on the strength alone of their having been formed with
ill-gotten funds, absent any other particular wrongdoing on their part…

Such showing of having been formed with, or having received ill-gotten funds, however strong or convincing, does not, without
more, warrant identifying the corporations in question with the person who formed or made use of them to give the color or
appearance of lawful, innocent acquisition to illegally amassed wealth – at the least, not so as place on the Government the
onus of impleading the former with the latter in actions to recover such wealth. Distinguished in terms of juridical personality
and legal culpability from their erring members or stockholders, said corporations are not themselves guilty of the sins of the
latter, of the embezzlement, asportation, etc., that gave rise to the Government's cause of action for recovery; their creation or
organization was merely the result of their members' (or stockholders') manipulations and maneuvers to conceal the illegal
origins of the assets or monies invested therein. In this light, they are simply the res in the actions for the recovery of illegally
acquired wealth, and there is, in principle, no cause of action against them and no ground to implead them as defendants in
said actions."

Just like the corporations in the aforementioned case, the foreign foundations here were set up to conceal the illegally acquired funds of
the Marcos spouses. Thus, they were simply the res in the action for recovery of ill-gotten wealth and did not have to be impleaded for
lack of cause of action or ground to implead them.

Assuming arguendo, however, that the foundations were indispensable parties, the failure of petitioner to implead them was a curable
error, as held in the previously cited case of Republic vs. Sandiganbayan:120

"Even in those cases where it might reasonably be argued that the failure of the Government to implead the sequestered
corporations as defendants is indeed a procedural abberation, as where said firms were allegedly used, and actively
cooperated with the defendants, as instruments or conduits for conversion of public funds and property or illicit or fraudulent
obtention of favored government contracts, etc., slight reflection would nevertheless lead to the conclusion that the defect is
not fatal, but one correctible under applicable adjective rules – e.g., Section 10, Rule 5 of the Rules of Court [specifying the
remedy of amendment during trial to authorize or to conform to the evidence]; Section 1, Rule 20 [governing amendments
before trial], in relation to the rule respecting omission of so-called necessary or indispensable parties, set out in Section 11,
Rule 3 of the Rules of Court. It is relevant in this context to advert to the old familiar doctrines that the omission to implead
such parties "is a mere technical defect which can be cured at any stage of the proceedings even after judgment"; and that,
particularly in the case of indispensable parties, since their presence and participation is essential to the very life of the action,
for without them no judgment may be rendered, amendments of the complaint in order to implead them should be freely
allowed, even on appeal, in fact even after rendition of judgment by this Court, where it appears that the complaint otherwise
indicates their identity and character as such indispensable parties." 121

133
Although there are decided cases wherein the non-joinder of indispensable parties in fact led to the dismissal of the suit or the
annulment of judgment, such cases do not jibe with the matter at hand. The better view is that non-joinder is not a ground to dismiss the
suit or annul the judgment. The rule on joinder of indispensable parties is founded on equity. And the spirit of the law is reflected in
Section 11, Rule 3122 of the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the ground of non-joinder or misjoinder
of parties and allows the amendment of the complaint at any stage of the proceedings, through motion or on order of the court on its
own initiative.123

Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section 7, Rule 3 124 on indispensable parties was copied,
allows the joinder of indispensable parties even after judgment has been entered if such is needed to afford the moving party full
relief.125 Mere delay in filing the joinder motion does not necessarily result in the waiver of the right as long as the delay is
excusable.126 Thus, respondent Mrs. Marcos cannot correctly argue that the judgment rendered by the Sandiganbayan was void due to
the non-joinder of the foreign foundations. The court had jurisdiction to render judgment which, even in the absence of indispensable
parties, was binding on all the parties before it though not on the absent party. 127 If she really felt that she could not be granted full relief
due to the absence of the foreign foundations, she should have moved for their inclusion, which was allowable at any stage of the
proceedings. She never did. Instead she assailed the judgment rendered.

In the face of undeniable circumstances and the avalanche of documentary evidence against them, respondent Marcoses failed to
justify the lawful nature of their acquisition of the said assets. Hence, the Swiss deposits should be considered ill-gotten wealth and
forfeited in favor of the State in accordance with Section 6 of RA 1379:

SEC. 6. Judgment.─ If the respondent is unable to show to the satisfaction of the court that he has lawfully acquired the
property in question, then the court shall declare such property forfeited in favor of the State, and by virtue of such judgment
the property aforesaid shall become property of the State x x x.

THE FAILURE TO PRESENT AUTHENTICATED TRANSLATIONS OF THE SWISS DECISIONS

Finally, petitioner Republic contends that the Honorable Sandiganbayan Presiding Justice Francis Garchitorena committed grave abuse
of discretion in reversing himself on the ground that the original copies of the authenticated Swiss decisions and their authenticated
translations were not submitted to the court a quo. Earlier PJ Garchitorena had quoted extensively from the unofficial translation of one
of these Swiss decisions in his ponencia dated July 29, 1999 when he denied the motion to release US$150 Million to the human rights
victims.

While we are in reality perplexed by such an incomprehensible change of heart, there might nevertheless not be any real need to
belabor the issue. The presentation of the authenticated translations of the original copies of the Swiss decision was not de rigueur for
the public respondent to make findings of fact and reach its conclusions. In short, the Sandiganbayan's decision was not dependent on
the determination of the Swiss courts. For that matter, neither is this Court's.

The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this jurisdiction that said funds belong
to the petitioner Republic. What is important is our own assessment of the sufficiency of the evidence to rule in favor of either petitioner
Republic or respondent Marcoses. In this instance, despite the absence of the authenticated translations of the Swiss decisions, the
evidence on hand tilts convincingly in favor of petitioner Republic.

WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the Sandiganbayan dated January 31, 2002 is SET
ASIDE. The Swiss deposits which were transferred to and are now deposited in escrow at the Philippine National Bank in the estimated
aggregate amount of US$658,175,373.60 as of January 31, 2002, plus interest, are hereby forfeited in favor of petitioner Republic of
the Philippines.

SO ORDERED.

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Nocom v Camerino, G.R No. 182984, February 10, 2009

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 182984 February 10, 2009

MARIANO NOCOM Petitioner,

vs.
OSCAR CAMERINO, EFREN CAMERINO, CORNELIO MANTILE and MILDRED DEL ROSARIO, in her capacity as legal heir and
representative of NOLASCO DEL ROSARIO, Respondents.

DECISION

AZCUNA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the Decision dated February 14, 2008 of the Court of Appeals
(CA) which affirmed the Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the Regional Trial Court
(RTC) of Muntinlupa City, Branch 203 and dismissed petitioner’s appeal under Rule 41 of the Rules of Court for lack of jurisdiction and
its Resolution dated May 23, 2008 which denied petitioner’s motion for reconsideration.

The present case is an offshoot of the prior case, G.R. No. 161029, entitled "Springsun Management Systems Corporation v. Oscar
Camerino, Efren Camerino, Cornelio Mantile, Nolasco Del Rosario, and Domingo Enriquez," which was promulgated on January 19,
2005 (449 SCRA 65) and became final and executory on May 4, 2005 as recorded in the Book of Entries of Judgment.

The factual antecedents are as follows:

G.R. No. 161029:

Respondent Oscar Camerino and respondents-intervenors Efren Camerino, Cornelio Mantile, the deceased Nolasco Del Rosario,
represented by Mildred Del Rosario, and Domingo Enriquez were the tenants who were tilling on the parcels of land planted to rice and
corn previously owned by Victoria Homes, Inc. covered by Transfer Certificate of Title (TCT) Nos. 289237, now S-6135 (109,451
square meters); S-72244 (73,849 square meters); and 289236, now S-35855 (109,452 square meters). On February 9, 1983, without
notifying the respondents, Victoria Homes, Inc. sold the said lots to Springsun Management Systems Corporation (SMSC) for
₱9,790,612. The three deeds of sale were duly registered with the Registry of Deeds of Rizal and new titles were issued in the name of
SMSC.

Subsequently, SMSC mortgaged to Banco Filipino (BF) the said lots as collaterals for its loans amounting to ₱11,545,000. As SMSC
failed to pay the loans due, BF extrajudicially foreclosed the mortgage and, later, was adjudged the highest bidder. On May 10, 2000,
SMSC redeemed the lots from BF. Earlier, on March 7, 1995, respondents filed a complaint against SMSC and BF for
"Prohibition/Certiorari, Reconveyance/Redemption, Damages, Injunction with Preliminary Injunction and Temporary Restraining Order,"
docketed as Civil Case No. 95-020, with the RTC of Muntinlupa City, Branch 256.

On January 25, 2002, the RTC of Muntinlupa City, Branch 256, found respondents to be tenants who have been tilling on the subject
land planted to rice and corn since 1967 and, thus, authorized them to redeem the subject lots. The dispositive portion of the decision
states:

WHEREFORE, judgment is hereby as follows:

1. Declaring that plaintiffs are entitled (sic) to redeem, and ordering the defendant Springsun Management Systems
Corporation (now petitioner) to allow plaintiffs to redeem the landholdings in question within 180 days from finality of
this decision at the total price of ₱9,790,612.00; upon full payment of the redemption price, the defendant Springsun
Management Systems Corporation is ordered to deliver plaintiffs the titles and the corresponding Deed of
Redemption so that the titles to the properties in litigation can be transferred in the name of the plaintiffs;

2. Declaring plaintiffs entitled to possession, and ordering the defendant Springsun Management Systems
Corporation and all persons claiming under it to vacate the lands in question and to surrender the same to the
plaintiffs;

135
 3. Dismissing the case against Banco Filipino Savings and Mortgage Bank;

4. Ordering the defendant Springsun Management Systems Corporation to pay plaintiffs the sum of ₱200,000.00 as
attorney’s fees, plus costs.

SO ORDERED.1

On September 23, 2003, the CA, in CA-G.R. SP No. 72475, affirmed with modification the RTC by declaring the respondents to be
tenants or agricultural lessees on the disputed lots and, thus, entitled to exercise their right of redemption, but deleted the award of
₱200,000 attorney’s fees for lack of legal basis.

On January 19, 2005, this Court, in G.R. No. 161029, affirmed the CA and reiterated that being agricultural tenants of Victoria Homes,
Inc. that had sold the lots to SMSC without notifying them, respondents had the right to redeem the subject properties from SMSC.

This Court denied SMSC’s motions for reconsideration and for leave to file a second motion for reconsideration and, on May 4, 2005,
an Entry of Judgment was made.

The present G.R. No. 182984:

On December 3, 2003, petitioner Mariano Nocom gave the respondents several Philtrust Bank Manager’s Checks amounting to
₱500,000 each, which the latter encashed, representing the price of their "inchoate and contingent rights" over the subject lots which
they sold to him.

On December 18, 2003, respondents, with the marital consent of their wives, executed an "Irrevocable Power of Attorney" which was
notarized by their counsel Atty. Arturo S. Santos. Thus,

IRREVOCABLE POWER OF ATTORNEY2

KNOW ALL MEN BY THESE PRESENTS:

WE, OSCAR CAMERINO, of legal age, Filipino, married to Teresita L. Magbanua: EFREN CAMERINO, of legal age, Filipino, married
to Susana Camerino, CORNELIO MANTILE, of legal age, Filipino, married to Maria Fe Alon, NOLASCO DEL ROSARIO, of legal age,
Filipino, married to Mildred Joplo, and DOMINGO ENRIQUEZ, of legal age, Filipino, married to Dionicia Enriquez whose residences are
stated under our respective names, hereby APPOINT, NAME, and CONSTITUTE MARIANO NOCOM, of legal age, Filipino, married to
Anacoreta Nocom and with office at No. 2315 Aurora Blvd, Pasay City, in an irrevocable manner, coupled with interest, for us and in our
stead, to do all or any of the following acts and deeds:

1. To sell, assign, transfer, dispose of, mortgage and alienate the properties described in TCT Nos. 120542, 120541
and 123872 of the Register of Deeds of Muntinlupa City, currently in the name of Springsun Management Systems
Corporation, consisting of 292,752 square meters subject matter of Civil Case No. 95-020 of the Regional Trial Court
of Muntinlupa City, Branch 256. The said court, in its decision dated January 25, 2002 which was affirmed with
modification of the Court of Appeals in its decision dated September 24, 2003 in CA-G.R. SP No. 72475, adjudged
that we are legally entitled to redeem the lands from Springsun Management Systems Corporation;

2. To comply with the said decision by paying the redemption price to Springsun Management Systems Corporation
and/or to the court, and upon such payment, to secure execution of the judgment so that the titles can be issued in
the name of our attorney-in-fact;

3. To accept and receive for his exclusive benefit all the proceeds which may be derived from the sale, mortgage,
transfer or deposition thereof;

4. To sign and execute all the necessary papers, deed and documents that may be necessary or the accomplishment
of purposes of the Deed of Assignment, and to issue receipts and proper discharges therefor;

5. To negotiate, deal and transact with all the persons and entities involved in Civil Case No. 95-020, RTC,
Muntinlupa City, Branch 256, with full power and authority to compromise with them;

6. To procure all documents and papers in government agencies relative to the said properties and case in court; and

7. To procure the necessary transfer certificate of titles in his name as the absolute owner of said properties.

136
GIVING AND GRANTING full power and authority to our said attorney-in-fact to do all things requisite and necessary with legal effects
as if done by us when present.

IN WITNESS WHEREOF, We have hereunto affixed [our] signatures this 18th day of December, 2003.

(Sgd.) OSCAR CAMERINO

(Sgd.) EFREN CAMERINO
Principal
Principal
Sparrow St., Diamond Park
San Antonio, San Pedro
Victoria Homes, Tunasan
Laguna
Muntinlupa City

(Sgd.) CORNELIO MANTILE (Sgd.) NOLASCO DEL ROSARIO

Principal Principal
Victoria Ave., Tunasan Esmido St., Diamond Park
Muntinlupa City Victoria Homes, Muntinlupa City

(Sgd.) DOMINGO ENRIQUEZ

Principal
Tunasan Proper, Arandia
Tunasan, Muntinlupa City

WITH OUR MARITAL CONSENT:

(Sgd.) TERESITA MAGBANUA (Sgd.) SUSANA CAMERINO

Wife of Oscar Camerino Wife of Efren Camerino

(Sgd.) MARIA FE ALON ALON (Sgd.) MILDRED JOPLO

Wife of Cornelio Mantile Wife of Nolasco del Rosario

(Sgd.) DIONICIA ENRIQUEZ

Wife of Domingo Enriquez

CONFORME:

(Sgd.) MARIANO NOCOM

Attorney-in-Fact

Meanwhile, on July 21, 2005, the respondents, in Civil Case No. 95-020 of the RTC of Muntinlupa City, Branch 256, filed a Motion for
Execution with Prayer to Order the Register of Deeds of Muntinlupa City to divest SMSC of title to the subject lots and have the same
vested on them. As SMSC refused to accept the redemption amount of ₱9,790,612 plus ₱147,059.18 as commission given by the
petitioner, the respondents deposited, on August 4, 2005, the amounts of ₱9,790,612, ₱73,529.59, and ₱73,529.59, duly evidenced by
official receipts, with the RTC of Muntinlupa City, Branch 256. The RTC of Muntinlupa City, Branch 256 granted respondents’ motion for
execution and, consequently, TCT Nos. 120542, 120541 and 123872 in the name of SMSC were cancelled and TCT Nos. 15895,
15896 and 15897 were issued in the names of the respondents. It also ordered that the "Irrevocable Power of Attorney," executed on
December 18, 2003 by respondents in favor of petitioner, be annotated in the memorandum of encumbrances of TCT Nos. 15895,
15896, and 15897.

On October 24, 2005, respondent Oscar Camerino filed a complaint against petitioner, captioned as "Petition to Revoke Power of
Attorney," docketed as Civil Case No. 05-172, in the RTC of Muntinlupa City, Branch 203, seeking to annul the "Irrevocable Power of
Attorney" dated December 18, 2003, the turnover of the titles to the properties in his favor, and the payment of attorney’s fees and other
legal fees.

Respondent Oscar Camerino’s complaint alleged that he and co-respondents were asked by their counsel, Atty. Arturo S. Santos, to
sign a document with the representation that it was urgently needed in the legal proceedings against SMSC; that the contents of the
said document were not explained to him; that in the first week of September 2005, he learned that TCT Nos. 15895, 15896 and 15897
were issued in their favor by the Register of Deeds; that he discovered that the annotation of the "Irrevocable Power of Attorney" on the
said titles was pursuant to the Order of the RTC of Muntinlupa City, Branch 256 dated August 31, 2005; that the "Irrevocable Power of
Attorney" turned out to be the same document which Atty. Santos required him and the other respondents to sign on December 18,
2003; that despite repeated demands, petitioner refused to surrender the owner’s duplicate copies of the said titles; that petitioner had
retained ownership over the subject lots; that he had no intention of naming, appointing, or constituting anyone, including petitioner, to
sell, assign, dispose, or encumber the subject parcels of land; and that he executed an Affidavit of Adverse Claim which was annotated
on the titles involving the subject lots.
137
In his Answer with Counterclaim, petitioner countered that on September 3, 2003, Atty. Santos informed him of the desire of his clients,
herein respondents, to sell and assign to him their "inchoate and contingent rights and interests" over the subject lots because they
were in dire need of money and could no longer wait until the termination of the proceedings as SMSC would probably appeal the CA’s
Decision to this Court; that they did not have the amount of ₱9,790,612 needed to redeem the subject lots; that on December 18, 2003,
he decided to buy the contingent rights of the respondents and paid each of them ₱500,000 or a total of ₱2,500,000 as evidenced by
Philtrust Bank Manager’s Check Nos. MV 0002060 (for respondent Oscar Camerino), MV 0002061 (for respondent Efren Camerino),
MV 0002062 (for respondent Cornelio Mantile), MV 0002063 (for Nolasco Del Rosario), and MV 0002064 (for Domingo Enriquez) which
they personally encashed on December 19, 2003; that on August 4, 2005, he also paid the amount of ₱147,059.18 as commission; that
simultaneous with the aforesaid payment, respondents and their spouses voluntarily signed the "Irrevocable Power of Attorney" dated
December 18, 2003; that being coupled with interest, the "Irrevocable Power of Attorney" cannot be revoked or cancelled at will by any
of the parties; and that having received just and reasonable compensation for their contingent rights, respondents had no cause of
action or legal right over the subject lots. Petitioner prayed for the dismissal of the complaint and the payment of ₱1,000,000 moral
damages, ₱500,000 exemplary damages, and ₱500,000 attorney’s fees plus costs.

On January 17, 2006, petitioner filed a Motion for Preliminary Hearing on his special and/or affirmative defense that respondent Oscar
Camerino had no cause of action or legal right over the subject lots because the latter and his wife received the proceeds of the
Philtrust Bank Manager’s check in the sum of ₱500,000 which they personally encashed on December 19, 2003 and that being coupled
with interest, the "Irrevocable Power of Attorney" cannot be revoked or cancelled at will by any of the parties.

On January 26, 2006, respondents Efren Camerino, Cornelio Mantile and Mildred Del Rosario, in her capacity as legal heir and
representative of Nolasco Del Rosario, filed a Motion for Leave of Court to Admit the Complaint-in-Intervention with the attached
Complaint-in-Intervention, dated January 26, 2006, seeking the nullification of the "Irrevocable Power of Attorney" for being contrary to
law and public policy and the annotation of the "Irrevocable Power of Attorney" on the titles of the subject lots with prayer that petitioner
be ordered to deliver to them the copies of the owner’s duplicate certificate of TCT Nos. 15895, 15896, and 15897. Their Complaint-in-
Intervention alleged that they had a legal interest in the subject matter of the controversy and would either be directly injured or
benefited by the judgment in Civil Case No. 05-172; that they were co-signatories or co-grantors of respondent Oscar Camerino in the
"Irrevocable Power of Attorney" they executed in favor of the petitioner; that their consent was vitiated by fraud, misrepresentation,
machination, mistake and undue influence perpetrated by their own counsel, Atty. Santos, and petitioner; that sometime in December
2003, Atty. Santos called for a meeting which was attended by petitioner and one Judge Alberto Lerma where petitioner gave them
checks in the amount of ₱500,000 each as "Christmas gifts"; and that the "Irrevocable Power of Attorney" was void ab initio as the
same was contrary to law and public policy and for being a champertous contract.

On January 30, 2006, respondent Oscar Camerino filed a Motion for Summary Judgment alleging that since the existence of the
"Irrevocable Power of Attorney" was admitted by petitioner, the only issue to be resolved was whether the said document was coupled
with interest and whether it was revocable in contemplation of law and jurisprudence; that Summary Judgment was proper because
petitioner did not raise any issue relevant to the contents of the "Irrevocable Power of Attorney"; and that in an Affidavit dated January
23, 2005, he admitted receipt of a check amounting to ₱500,000.00 which was given to him by petitioner as financial assistance.

On February 3, 2006, petitioner opposed respondent Oscar Camerino’s motion on the ground that there were factual issues that
required the presentation of evidence.

On February 14, 2006, petitioner filed a Motion to Dismiss the complaint on the ground that the petition for the cancellation of the
"Irrevocable Power of Attorney" was actually an action to recover the titles and ownership over the properties; that since respondent
Oscar Camerino alleged in paragraph 29 of his Motion for Summary Judgment that the assessed value of the subject lots amounted to
₱600,000,000, the case partook of the nature of a real action and, thus, the docket fees of ₱3,929 was insufficient; and that due to
insufficient docket fee, his complaint should be dismissed as the RTC was not vested with jurisdiction over the subject matter of the
complaint.

On February 22, 2006, respondent Oscar Camerino opposed petitioner’s motion for preliminary hearing of special and/or affirmative
defenses alleging that it was dilatory and that he had a cause of action.

On March 9, 2006, respondent Oscar Camerino filed his Reply to petitioner’s Opposition to the Motion for Summary Judgment claiming
that the determinative issue of whether or not the amount of ₱500,000 given to him by petitioner rendered the power of attorney
irrevocable can be determined from the allegations in the pleadings and affidavits on record without the need of introduction of
evidence.

On May 5, 2006, respondent Oscar Camerino filed an Opposition to petitioner’s Motion to Dismiss stating that the instant case was a
personal action for the revocation of the "Irrevocable Power of Attorney" and not for the recovery of real property and, thus, the correct
docket fees were paid.

On June 9, 2006, the RTC of Muntinlupa City, Branch 203 admitted the Complaint-in-Intervention because the movants-intervenors
([herein respondents] Efren Camerino, Cornelio Mantile, and Mildred Del Rosario as legal heir of Nolasco Del Rosario) "have legal
interest in the subject properties in litigation and in the success of the petitioner [herein respondent Oscar Camerino], who was
precisely their co-plaintiff in Civil Case No. 95-020, entitled ‘Oscar Camerino, et al. v. Springsun Management Systems Corporation et
al.,’ where they are the prevailing parties against the defendant therein [SMSC], with respect to the same properties, subject of this
138
case, in a decision rendered by Branch 256 of this Court." The RTC, Branch 203, also granted the Motion for Summary Judgment
because "a meticulous scrutiny of the material facts admitted in the pleadings of the parties reveals that there is really no genuine issue
of fact presented therein that needs to be tried to enable the court to arrive at a judicious resolution of a matter of law if the issues
presented by the pleadings are not genuine issues as to any material fact but are patently unsubstantial issues that do not require a
hearing on the merits." Thus,

The instant Motion to Dismiss by the respondent is therefore DENIED, PROVIDED, the petitioner should pay the balance of the docket
fees remaining unpaid, if any, pursuant to Rule 141, Section 7 of the Rules of Court, as amended by A.M. No. 04-2-04-SC within the
applicable prescriptive or reglementary period.

The "Motion for Intervention" timely filed by intervenors Efren Camerino, Cornelio Mantile and Mildred Del Rosario, in her capacity as
legal heir of Nolasco Del Rosario, as opposed by the respondent, is hereby GRANTED.

xxx

Petitioner’s Motion for Summary Judgment is therefore GRANTED.

Consequently, respondent’s Motion for Preliminary Hearing on his Special and Affirmative Defenses is deemed moot and academic.

SO ORDERED.3

On June 15, 2006, the RTC of Muntinlupa City, Branch 203 rendered a Summary Judgment annulling the "Irrevocable Power of
Attorney" for being contrary to law and public policy. The pertinent portions of the trial court’s decision state that:

Irrespective of whether the Power of Attorney in question is coupled with interest, or not, the same can be revoked or annulled, firstly,
because it is contrary to law and secondly it is against public policy.

As aptly pointed out by the intervenors, the assailed Special Power of Attorney which under its ultimate paragraph among others,
authorizes the respondent (Nocom) ‘to procure the necessary Transfer Certificate of Title in his name, as the absolute owner of the said
properties is a disguised conveyance or assignment of the signatories’ statutory rights of redemption and therefore prohibited under the
provisions of Republic Act No. 3844, Sec. 62 which provides:

Sec. 62. Limitation on Land Rights.

Except in case of heredity succession by one heir, landholdings acquired under this Code may not be resold, mortgaged, encumbered,
or transferred until after the lapse of ten years from the date of full payment and acquisition and after such ten year period, any transfer,
sale or disposition may be made only in favor of persons qualified to acquire economic family-size farm units in accordance with the
provisions of this Code xxx. (underlining supplied)

The assailed "power of attorney" which was executed on December 18, 2003 is void ab initio for being contrary to the express
prohibition or spirit of the aforesaid law or the declared state and public policy on the qualification of the beneficiaries of the agrarian
reform program. It bears stressing that the redemption price of the subject lots was paid only on August 4, 2005 or 1 year, 8 months
and 14 days after the execution of the assailed power of attorney.

If pursuant to the spirit of the Agrarian Reform Law, the tenant cannot even sell or dispose of his landholding within ten (10) years after
he already acquired the same or even thereafter to persons not qualified to acquire economic size farm units in accordance with the
provisions of the Agrarian Reform Code, with more reason should the tenant not be allowed to alienate or sell his landholding before he
actually acquires the same.

The right of redemption of the petitioner and his co-plaintiffs in Civil Case No. 95-020 as upheld by the Court of Appeals and the
Supreme Court is founded on a piece of social legislation known as Agrarian Reform Code.

Enunciated in the case of Association of Small Landowners in the Philippines, et al., vs. Hon. Secretary of Agrarian Reform (G.R. No.
78742, July 14, 1989) is the policy of the State on agrarian reform legislation. Said State policy emphasizes the "Land for the Landless"
slogan that underscores the acute imbalance in the distribution of land among the people.

Furthermore, the assailed Special Power of Attorney is a champertous contract and therefore void for being against public policy. The
pleadings of the parties show that the same special power of attorney was executed by the petitioner, et al. through the intercession of
Atty. Arturo Santos and at the behest of the respondent. In his own answer to the instant petition which he is estopped to deny, the
respondent alleges that the actual agreement was for the respondent to pay the expenses of the proceedings to enforce the rights of
the petitioner and his co-plaintiffs in Civil Case No. 95-020 without any provision for reimbursement. In other words, the respondents,
through the intercession of Atty. Santos, petitioner’s attorney, had agreed to carry on with the action for the petitioner et al. at his own

139
expense in consideration of procuring for himself the title to the lots in question as the absolute owner thereof, with the respondent
paying the redemption price of said lots, as well as separate amounts of Five Hundred Thousand (₱500,000.00) to each of the five (5)
co-plaintiffs in Civil Case No. 95-020, including herein petitioner, or a total sum of Two Million Five Hundred Thousand Pesos
(₱2,500,000.00).

Under the premises, the aforesaid contract brokered by Atty. Arturo Santos has all really the earmarks of a champertous contract which
is against public policy as it violates the fiduciary relations between the lawyer and his client, whose weakness or disadvantage is being
exploited by the former. In other words, the situation created under the given premises is a clear circumvention of the prohibition
against the execution of champertous contracts between a lawyer and a client.

A champertous contract is defined as a contract between a stranger and a party to a lawsuit, whereby the stranger pursues the party’s
claim in consideration of receiving part or any of the proceeds recovered under the judgment; a bargain by a stranger with a party to a
suit, by which such third person undertakes to carry on the litigation at his own cost and risk, in consideration of receiving, if successful,
a part of the proceeds or subject sought to be recovered. (Blacks Dictionary; Schnabel v. Taft Broadcasting Co., Inc. Mo. App. 525 S.W.
2d 819, 823). An Agreement whereby the attorney agrees to pay expenses of proceedings to enforce the client’s rights is champertous.
[JBP Holding Corporation v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public policy especially where as in this case,
the attorney has agreed to carry on the action at its own expense in consideration of some bargain to have part of the thing in dispute.
[See Sampliner v. Motion Pictures Patents Co., et al., 225 F. 242 (1918). The execution of these contracts violates the fiduciary
relationship between the lawyer and his client, for which the former must incur administrative sanction.

The intention of the law in prohibiting this kind of contract is to prevent a lawyer from acquiring an interest in the subject of the litigation
and to avoid a conflict of interest between him and his client.

In the instant case, it seems that Atty. Santos and the respondent colluded and conspired to circumvent these prohibitions. Considering
therefore that Atty. Santos, then petitioner’s counsel, brokered the alleged deal between petitioners et al. and the respondent with
respect to the lands subject of litigation in Civil Case No. 95-020, the deal contracted is illegal for being a champertous agreement and
therefore it cannot be enforced.

Be that as it may, granting the agency established in the assailed Power of Attorney is coupled with interest, the petitioner and his co-
plaintiffs in Civil Case No. 95-020, who are the present intervenors, are not revoking the Power of Attorney at will but have precisely
gone to court and filed the instant petition for its cancellation or revocation. What is prohibited by law and jurisprudence is the arbitrary
and whimsical revocation of a power of attorney or agency coupled with interest, at will by a party, without court declaration.

WHEREFORE, judgment is hereby rendered as follows:

(1) Nullifying the "Irrevocable Power of Attorney" in question dated December 18, 2003, signed by the petitioner [herein
respondent Oscar Camerino] and his co-plaintiffs [herein respondents who were the movant-intervenors] in Civil Case No. 95-
020 in favor of the respondent [herein petitioner];

(2) Ordering the respondent to turnover the Certificates of Title Nos. 15895, 15896 and 15897 covering the lots, the subject of
this case, to the petitioner and the intervenors;

(3) Ordering the respondent to pay the petitioner attorney’s fees and all other legal fees incurred by the latter in connection
with this case;

(4) Ordering the petitioner and the intervenors to return to the respondent the amount of ₱7,790,612 paid by the latter as
redemption price of the lots in question plus commission of ₱147,049.18; and

(5) Ordering the petitioner Oscar Camerino and the intervenors Efren Camerino, Cornelio Mantile, Nolasco Del Rosario or his
heirs and Domingo Enriquez, who are petitioner’s co-plaintiffs in Civil Case No. 95-020, to return to the respondent the total
amount of ₱2,500,000.00 or ₱500,000.00 from each of them paid by the respondent to them under Philtrust Bank Check Nos.
MV 0002060, MV 0002061, MV 0002062, MV 0002063, and MV 0002064 which checks were encashed by them with the
drawee bank.

SO ORDERED.4

On July 3, 2006 petitioner filed an Omnibus Motion for Reconsideration seeking to set aside the trial court’s Joint Order dated June 9,
2005 and Summary Judgment dated June 15, 2006 which was opposed by the respondents.

On July 4, 2006, respondents filed a Motion for Execution Pending Final Decision/Appeal which was opposed by petitioner.

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On August 14, 2006, the trial court issued an order denying petitioner’s Omnibus Motion for Reconsideration. Within the reglementary
period, petitioner filed a Notice of Appeal and paid the corresponding appeal docket fees.

On February 14, 2008, the CA affirmed the trial court’s Joint Order dated June 9, 2006 and Summary Judgment dated June 15, 2006
and dismissed the petitioner’s appeal for lack of jurisdiction. The CA ruled that as the RTC rendered the assailed Summary Judgment
based on the pleadings and documents on record, without any trial or reception of evidence, the same did not involve factual matters.
The CA found the issues raised by the petitioner in his appeal to be questions of law, to wit: (a) whether Summary Judgment was
proper under the admitted facts and circumstances obtaining in the present case; (b) whether undue haste attended the rendition of the
Summary Judgment; (c) whether the Summary Judgment was valid for failure of the RTC to implead an indispensable party; (d)
whether the RTC erred in allowing the intervention of respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario; and (e)
whether the RTC erred in taking cognizance of the case despite nonpayment of the required docket fees. The CA concluded that since
the issues involved questions of law, the proper mode of appeal should have been through a petition for review on certiorari under Rule
45 of the Rules of Court directly to this Court and not through an ordinary appeal under Rule 41 thereof and, thus, petitioner’s appeal to
the CA should be dismissed outright pursuant to this Court’s Circular No. 2-90, dated March 9, 1990, mandating the dismissal of
appeals involving pure questions of law erroneously brought to the CA.

In its Resolution of May 23, 2008, the CA denied petitioner’s Motion for Reconsideration dated February 26, 2008.

Hence, this present petition.

Petitioner raises the following issues:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN DISMISSING PETITIONER’S APPEAL.

II

WHETHER OR NOT THE COURT OF APPEALS ERRED IN UPHOLDING THE SUMMARY JUDGMENT OF THE TRIAL COURT
DESPITE THE GENUINE ISSUE OF FACT RAISED IN PETITIONER’S ANSWER.

III

WHETHER OR NOT THE COURT OF APPEALS IS CORRECT IN NOT VOIDING THE ASSAILED SUMMARY JUDGMENT FOR
FAILURE OF RESPONDENTS TO IMPLEAD AN INDISPENSABLE PARTY.

IV

WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING CIVIL CASE NO. 05-172 FOR NON-PAYMENT OF
THE CORRECT DOCKET FEES.

Petitioner contends that the CA erred in dismissing his appeal as the case involves questions of fact; that summary judgment was not
proper as there were genuine issues of fact raised in his Answer; that respondents failed to implead their lawyer, Atty. Arturo S. Santos,
as an indispensable party-defendant, who, according to them, allegedly connived with him in making them sign the "Irrevocable Power
of Attorney" in his favor; and that since the case partakes of the nature of an action to recover ownership and titles to the properties,
respondents’ complaint should be dismissed for failure to pay the correct docket fees.

Respondent Oscar Camerino argues that the sole issue to be resolved pertains to the legal issue of whether the Special Power of
Attorney (SPA) denominated as irrevocable may be revoked; that three material facts have been established, i.e., that the SPA was
executed, that Atty. Santos facilitated the signing and execution of the SPA, and that petitioner paid ₱500,000 to each of the
respondents in consideration for the signing of the SPA and, thus, summary judgment was proper; and that pure questions of law are
not proper in an ordinary appeal under Rule 41 of the Rules.

Respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario, in her capacity as legal heir of Nolasco Del Rosario, aver that
petitioner’s petition is insufficient in form, i.e., due to defective verification as the word "personal" was not stated when referring to
"personal knowledge," and in substance, i.e., there is no genuine issue to be resolved as the factual allegations of the petitioner are
unsubstantial and that Atty. Santos is not an indispensable party to the case.

The petition has merit.

In dismissing petitioner’s appeal, the CA erroneously relied on the rationale that the petitioner’s appeal raised questions of law and,
therefore, it had no recourse but to dismiss the same for lack of jurisdiction. The summary judgment rendered by the trial court has the
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effect of an adjudication on the merits and, thus, the petitioner, being the aggrieved party, correctly appealed the adverse decision of
the RTC to the CA by filing a notice of appeal coupled with the appellant’s brief under Rule 41 of the Rules.

Contrary to the findings of the RTC and the CA, the present case involves certain factual issues which remove it from the coverage of a
summary judgment.

Under Section 1, Rule 35 of the Rules of Court, a party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor upon all or any part thereof.

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays. When the
pleadings on file show that there are no genuine issues of fact to be tried, the Rules allow a party to obtain immediate relief by way of
summary judgment, that is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to
the material facts. Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A “genuine issue” is such
issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. Section 3 of
the said rule provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine issue as to any material fact,
except for the amount of damages; and (2) the party presenting the motion for summary judgment must be entitled to a judgment as a
matter of law.5 A summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is entitled
to a judgment as a matter of law. A summary judgment is proper if, while the pleadings on their face appear to raise issues, the
affidavits, depositions, and admissions presented by the moving party show that such issues are not genuine. 6

The present case should not be decided via a summary judgment. Summary judgment is not warranted when there are genuine issues
which call for a full blown trial. The party who moves for summary judgment has the burden of demonstrating clearly the absence of any
genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial.
Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any
material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the
place of trial.7

Summary judgment is generally based on the facts proven summarily by affidavits, depositions, pleadings, or admissions of the parties.
In this present case, while both parties acknowledge or admit the existence of the "Irrevocable Power of Attorney," the variance in the
allegations in the pleadings of the petitioner vis-à-vis that of the respondents require the presentation of evidence on the issue of the
validity of the "Irrevocable Power of Attorney" to determine whether its execution was attended by the vices of consent and whether the
respondents and their spouses did not freely and voluntarily execute the same. In his Answer with Counterclaim, petitioner denied the
material allegations of respondent Oscar Camerino’s complaint for being false and baseless as respondents were informed that the
document they signed was the "Irrevocable Power of Attorney" in his favor and that they had received the full consideration of the
transaction and, thus, had no legal right over the three parcels of land. Indeed, the presentation of evidence is necessary to determine
the validity and legality of the "Irrevocable Power of Attorney," dated December 18, 2003, executed by the respondents in favor of the
petitioner. From said main factual issue, other relevant issues spring therefrom, to wit: whether the said "Irrevocable Power of Attorney"
was coupled with interest; whether it had been obtained through fraud, deceit, and misrepresentation or other vices of consent; whether
the five (5) Philtrust Bank Manager’s checks given by petitioner to the respondents amounting to ₱500,000 each were in consideration
of the "inchoate and contingent rights" of the respondents in favor of the petitioner; whether Atty. Santos connived with petitioner in
causing the preparation of the said document and, therefore, should be impleaded as party-defendant together with the petitioner;
whether respondents deposited the amount of ₱9,790,612.00 plus ₱147,059.18 with the RTC of Muntinlupa City, Branch 256; and
whether the sale of respondents’ inchoate and contingent rights amounted to a champertous contract.

The incongruence and disparity in the material allegations of both parties have been evident. Respondent Oscar Camerino alleged in
his complaint that he and his co-respondents were required by their counsel, Atty. Santos, to sign a document on the representation
that it was urgently needed in the legal proceedings against SMSC which turned out to be the "Irrevocable Power of Attorney"; but
petitioner disproved the vitiated consent on the part of the respondents as they knew fully well that the document they signed,
voluntarily and intelligently, on December 18, 2003, was the said "Irrevocable Power of Attorney." Respondent Oscar Camerino alleged
in his complaint that he has no intention of naming, appointing or constituting anyone, including the petitioner, to sell, assign, dispose or
encumber the lots in question; but petitioner maintained that respondent Oscar Camerino agreed to sell and assign to him his "inchoate
and contingent rights and interests" over the subject lot for and in consideration of the sum of ₱500,000, plus the redemption price of
₱9,790,612. Respondents claimed that the amount they received was grossly disproportionate to the value of the subject land; but
petitioner countered that the respondents did not have the amount of ₱9,790,612 needed to redeem the subject lots, so he decided to
buy their contingent rights and paid each of them ₱500,000 or a total of ₱2,500,000 as evidenced by five (5) Philtrust Bank Manager’s
Check which they personally encashed on December 19, 2003, that he also paid the amount of ₱147,059.18 as commission on August
4, 2005, that simultaneous with the aforesaid payment, respondents and their spouses voluntarily signed the "Irrevocable Power of
Attorney" dated December 18, 2003, and that being coupled with interest, the "Irrevocable Power of Attorney" cannot be revoked at will
by any of the parties.

Respondents maintain that they were deceived into executing the "Irrevocable Power of Attorney" in favor of the petitioner which was
done through the maneuverings of their own lawyer, Atty. Santos, who, according to them, had connived with petitioner in order to
effect the fraudulent transaction. In this regard, respondents should have impleaded Atty. Santos as an indispensable party-defendant

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early on when the case was still with the RTC, but they failed to do so. However, their procedural lapse did not constitute a sufficient
ground for the dismissal of Civil Case No. 05-172.

In Domingo v. Scheer,8 the Court explained that the non-joinder of an indispensable party is not a ground for the dismissal of an action.
Section 7, Rule 3 of the Rules, as amended, requires indispensable parties to be joined as plaintiffs or defendants. The joinder of
indispensable parties is mandatory. Without the presence of indispensable parties to the suit, the judgment of the court cannot attain
real finality. Strangers to a case are not bound by the judgment rendered by the court. The absence of an indispensable party renders
all subsequent actions of the court null and void. There is lack of authority to act not only of the absent party but also as to those
present. The responsibility of impleading all the indispensable parties rests on the petitioner or plaintiff. However, the non-joinder of
indispensable parties is not a ground for the dismissal of an action. Parties may be added by order of the court on motion of the party or
on its own initiative at any stage of the action and/or such times as are just. If the petitioner or plaintiff refuses to implead an
indispensable party despite the order of the court, the latter may dismiss the complaint or petition for the petitioner or plaintiff’s failure to
comply therefor. The remedy is to implead the non-party claimed to be indispensable. In the present case, the RTC and the CA did not
require the respondents to implead Atty. Santos as party-defendant or respondent in the case. The operative act that would lead to the
dismissal of Civil Case No. 05-172 would be the refusal of respondents to comply with the directive of the court for the joinder of an
indispensable party to the case.

In his petition, petitioner prays for the reversal of the Decision dated February 14, 2008 of the CA which affirmed the Joint Order dated
June 9, 2005 and Summary Judgment dated June 15, 2006 of the RTC of Muntinlupa City, Branch 203 and dismissed petitioner’s
appeal under Rule 41 of the Rules for lack of jurisdiction and its Resolution dated May 23, 2008 which denied petitioner’s motion for
reconsideration; the annulment of the RTC’s Summary Judgment rendered on June 15, 2006; and the dismissal of Civil Case No. 05-
172 filed with the RTC on the ground that respondents failed to pay the correct docket fees as the action actually sought the recovery of
ownership over the subject properties.

The record shows that Civil Case No. 05-172 is a complaint filed by respondent Oscar Camerino against petitioner, denominated as
"Petition to Revoke Power of Attorney," that seeks to nullify the "Irrevocable Power of Attorney" coupled with interest dated December
18, 2003; that petitioner be ordered to turn over TCT No. 15898, 15896, and 15897 to him; and that petitioner be ordered to pay the
attorney’s fees and other legal fees as a consequence of the suit. This case is therefore not an action to recover the titles and
ownership over the subject properties. For now, the nature of the suit remains that of personal action and not a real action in
contemplation of Rule 4 of the Rules. Hence, the docket fees paid by the respondents were in order. Should the complaint be amended
to seek recovery of ownership of the land, then the proper docket fees should be paid and collected.

While the RTC erred in rendering the summary judgment, Civil Case No. 05-172 should not perforce be dismissed. Instead, this present
case should be remanded to the RTC for further proceedings and proper disposition according to the rudiments of a regular trial on the
merits and not through an abbreviated termination of the case by summary judgment.

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals dated February 14, 2008 which affirmed the
Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the Regional Trial Court of Muntinlupa City, Branch
203 and dismissed petitioner’s appeal under Rule 41 of the Rules of Court on the ground of lack of jurisdiction and the Resolution of the
Court of Appeals dated May 23, 2008 which denied petitioner’s motion for reconsideration in CA-G.R. CV No. 87656 are REVERSED
and SET ASIDE. The case is REMANDED to the Regional Trial Court of Muntinlupa City, Branch 203, for further proceedings in
accordance with this Decision.

No costs.

SO ORDERED.

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Adolfo v Adolfo, G.R No. 201427, March 18, 2015

G.R. No. 201427

TEOFILO B. ADOLFO, Petitioner,

vs.
FE T. ADOLFO, Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 seeks to set aside: 1) the October 6, 2009 Decision2 of the Court of Appeals (CA) in CA-G.R. CV
No. 01783 reversing the October 2, 2006 Order3 of the Regional Trial Court, 7th Judicial Region, Mandaue City (RTC Mandaue),
Branch 55 in Civil Case No. MAN-4821; as well as 2) the CA's March 2, 2012 Resolution 4 denying petitioner's Motion for
Reconsideration5 and Supplement6 thereto.

Civil Case No. MAN-4821

On April 14, 2004, petitioner Teofilo B. Adolfo filed with the RTC Mandaue a Petition 7 for judicial separation of property against his
estranged wife, respondent Fe Adolfo, nee Tudtud. Docketed as Civil Case No. MAN-4821 and assigned to Branch 55, the petition
alleged that the parties were married on November 26, 1966; that the union bore one child; that during the marriage, they acquired
through conjugal funds Lot 1087-A-2-E, a 3,652-square meter property in Brgy. Cabancalan, Mandaue City, Cebu (the subject property)
covered by Transfer Certificate of Title No. (TCT) 18368; that later on, the parties separated due to irreconcilable differences; that since
reunion was no longer feasible, petitioner suggested a separation of the conjugal property, but respondent adamantly refused; that
respondent denied petitioner’s co-ownership of the subject property, claiming the same as her paraphernal property; that several
earnest efforts to amicably settle the matter between them proved unavailing; and that a judicial separation of property is proper under
the circumstances and pursuant to Article 135(6) of the Family Code. 8 Petitioner thus prayed that judgment be rendered decreeing a
separation of the conjugal property and the subdivision or sale thereof, to the end of dividing the same or the proceeds thereof; and
ordering respondent to pay petitioner P50,000.00 as attorney’s fees, appearance fees (P2,000.00 per hearing), and P20,000.00
litigation costs.

In her Answer9 with counterclaim, respondent contended that while she remained married to petitioner, she is the sole owner of the
subject property, the same being her paraphernal property which she inherited from her mother; that petitioner is a lazy bum, gambler,
drunkard, wife abuser, and neglectful father; that respondent found all means to support the family even as petitioner neglected it; that
respondent bought on installment a tricycle for the petitioner’s use in business, but he kept the proceeds thereof to himself and used
the same in his gambling and drinking sprees; that respondent alone took the initiative to support the family and found ways to take
care of the daily needs of her child; that she caused to be built on a portion of her mother’s land a house even while petitioner was
bumming around; that one day, petitioner destroyed the roof of the house that was then being built; that petitioner subsequently
abandoned her and their child in 1968, and transferred to Davao City where he took a mistress and begot four children by her; that in
1986, petitioner returned to Cebu City seeking reconciliation with respondent; that respondent took petitioner back, but in 1987 they
once more separated; that thereafter, respondent never again saw or heard from petitioner.

Respondent claimed in her Answer that the subject property was a portion of a bigger lot (mother lot) owned by her mother Petronila
Tudtud which was covered by TCT T-15941. On October 11, 1967, her mother executed a quitclaim deed transferring a portion of the
mother lot – the subject property – to respondent. The mother title TCT T-15941 was then cancelled and a new one, TCT (17216)-
5415, was issued in respondent’s name. Respondent then sold the subject property to her brother on January 19, 1968, and a new
TCT (17833)-5515 was issued in her brother’s name. Her brother then mortgaged the property to Development Bank of the Philippines
(DBP), which foreclosed on the same. TCT 18231 was issued in DBP’s name. DBP then sold the property to the spouses Antonio and
Lucy Garcia (the Garcias), and TCT 18266 was in turn issued in their name. Finally, on May 25, 1983, the Garcias sold back the subject
property to respondent, and a new title – TCT 1836810 – was then issued in the name of respondent "FE M. TUDTUD, x x x married to
Teofilo Adolfo."

Respondent argued that she is the sole owner of the subject property, the same being her paraphernal property which she alone
redeemed from the Garcias; that the inclusion of petitioner’s name in TCT 18368 does not make him a co- owner of the property, but
was merely necessary to describe respondent’s civil status; and that under Article 135 11 of the Civil Code, all property brought by the
wife to the marriage as well as all property she acquires during the marriage in accordance with Article 148 12 of the same Code
constitutes paraphernal property.

Respondent thus prayed that the petition be dismissed. By way of counterclaim, she sought the payment of moral, exemplary, and
nominal damages, attorney’s fees, and litigation expenses.

Civil Case No. MAN-2683

144
In 1996, respondent’s sister Florencia Tudtud and her husband Juanito Gingoyon (the Gingoyons) filed a case for partition with
damages against respondent. The case was docketed as Civil Case No. MAN-2683 and raffled to Branch 55 of the RTC Mandaue. The
Complaint13 therein alleged that in 1988, respondent executed a deed of sale in favor of the Gingoyons over a 300-square meter portion
of the subject property, but that respondent refused to partition/subdivide the same even after the Gingoyons paid the taxes, fees and
expenses of the sale. For her defense, respondent claimed in her Answer 14 that when the sale to the Gingoyons was made, the subject
property constituted conjugal property of her marriage with petitioner; that as early as 1983, or when the Garcias executed the deed of
sale in her favor, the subject property became a conjugal asset; since petitioner did not sign the deed of sale in favor of the Gingoyons
as he was in Davao at the time and knew nothing about the sale, the sale was null and void.

On May 15, 2002, the trial court rendered its Decision15 in Civil Case No. MAN-2683, declaring that the subject property constituted
conjugal property of the marriage. It thus nullified the 1988 deed of sale executed by respondent in favor of the Gingoyons for lack of
consent on the part of petitioner, citing Article 124 of the Family Code. 16 The trial court likewise awarded moral and exemplary
damages, attorney's fees and litigation expenses in favor of the respondent in the total amount of P107,000.00.

The Gingoyons filed an appeal with the CA, which was docketed as CA- G.R. CV No. 78971.

Motion for Judgment Based on the Pleadings in Civil Case No. MAN-4821

Meanwhile, during the pre-trial conference in Civil Case No. MAN-4821, petitioner submitted as part of his evidence and for marking
certified true copies of the Gingoyons’ Complaint in Civil Case No. MAN-2683, respondent’s Answer thereto, and the trial court’s May
15, 2002 Decision in said case.

On August 1, 2005, petitioner filed a Request for Admission17 of 1) the genuineness of the duly marked certified true copies of the
Complaint, Answer, and Decision in Civil Case No. MAN-2683 (Exhibits "F," "G" and "H," respectively); 2) respondent’s declaration in
said Answer that the subject property constituted conjugal property of the marriage; and 3) the trial court’s pronouncement in said case
that the subject property forms part of the conjugal estate.

Respondent failed to file her answer or response to the request for admission.

On September 5, 2005, petitioner filed a Motion for Judgment Based on the Pleadings, 18 stating that since respondent failed to answer
his request for admission, the matters contained in the request are deemed admitted pursuant to Rule 26, Section 2 of the 1997 Rules
of Civil Procedure19 (1997 Rules); that as a consequence of the application of the rule, respondent is in effect considered to have
admitted that the subject property is a conjugal asset of their subsisting marriage which may thus be the subject of his petition for
judicial separation of property; and that on account of said admission, a hearing on the merits becomes unnecessary and, instead, Rule
3420 of the 1997 Rules on judgments on the pleadings should apply. Petitioner thus prayed that the trial court render judgment in his
favor based on the pleadings.

Respondent filed an Opposition.21 In her Opposition to Plaintiff’s Memorandum,22 respondent argued among others that the request for
admission was premature considering that the decision in Civil Case No. MAN-2683 was the subject of an appeal, and thus not yet
final.

In an October 11, 2005 Order,23 the trial court directed the transfer of Civil Case No. MAN-4821 to Branch 55 of the RTC Mandaue,
since it is said court which decided the closely related Civil Case No. MAN-2683.

On October 2, 2006, Branch 55 issued an Order24 granting petitioner’s motion for judgment on the pleadings. It held as follows:

This court has painstakingly exerted effort in going over the record and took serious note of all the pleadings, documents and others on
file. After serious consideration, the court believes and so holds that there is basis in rendering judgment. The Motion for Judgment
Based on the Pleadings though denominated as such but [sic] shall be treated as a move to seek summary judgment. x x x

xxxx

The court in arriving at this resolution was guided by the following pronouncements by the Supreme Court in the case of Diman vs.
Alumbres, G.R. No. 131466, November 27, 1998, 299 SCRA 459 x x x:

xxxx

In the same case, it was held –

"It is also the law which determines when a summary judgment is proper. It declares that although the pleadings on their face appear to
raise issues of fact – e.g., there are denials of, or a conflict in, factual allegations – if it is shown by admissions, depositions or affidavits,
that those issues are sham, fictitious, or not genuine, or, in the language of the Rules, that ‘except as to the amount of damages, there

145
is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law, the Court shall render
a summary judgment for the plaintiff or the defendant, as the case may be. (Italics and underscoring supplied)

On the other hand, in the case of a summary judgment[,] issues apparently exist – i.e.. facts are asserted in the complaint regarding
which there is as yet no admission, disavowal or qualification; or specific denials or affirmative defenses are in truth set out in the
answer – but the issues thus arising from the pleadings are sham, fictitious, not genuine, as shown by [affidavits], depositions or
admissions. In other words, as a noted authority remarks, a judgment on the pleadings is a judgment on the facts as pleaded, while a
summary judgment is a judgment on the facts as summarily proven by affidavits, depositions or admissions." (Italics and underscoring
supplied)

xxxx

Defendant25 did not file any verified answer or a pleading denying under oath the genuineness and authenticity of the documents
attached to the Request for Admission and of the other matters therein set forth. This failure has far reaching implications in that the
following are deemed admitted: a) the genuineness of Exhibits F, G and H, all attached to the Request for Admission; b) that she
admitted in paragraph 10 in her Answer to Civil Case No. MAN-2683 that Lot 1087-A-2-E was no longer paraphernal property but rather
a conjugal property of Spouses Teofilo and Fe Adolfo and; c) that RTC, Branch 55, Mandaue City, sustained and/or held the view of
defendant (Fe Tudtud) that Lot 1087-A-2-E is a conjugal property of Spouses Teofilo and Fe Adolfo, thus, dismissed Civil Case No.
MAN-2683 and awarded damages to the defendant.

Judicial admissions may be made in (a) the pleadings filed by the parties,

(b) in the course of the trial either by verbal or written manifestations or stipulations, or (c) in other stages of the judicial proceeding, as
in the pre-trial of the case. Admissions obtained through depositions, written interrogatories or requests for admission are also
considered judicial admissions." Page 686, Remedial Law Compendium, Vol. II, 9th Rev. Ed., Regalado

With the admission that Lot 1087-A-2-E is a conjugal property, it follows as its necessary and logical consequence, that plaintiff 26 is
entitled to the relief demanded.

xxxx

A DECISION in Civil Case No. MAN-2683 had already been rendered by RTC, Branch 55, on the 15th day of May 2002 with the court
finding that Lot 1087-A-2-E is a conjugal property x x x –

xxxx

For reason[s] of expediency and convenience, the court may even take judicial notice of its earlier decision finding Lot 1087-A-2-E as a
conjugal property.27

xxxx

Under the circumstances, judicial separation of property is proper. Aware that the separation has the effect of a dissolution of the
conjugal partnership property regime, the presumptive legitime of Nilo Adolfo (the only common child of the spouses) has to be
delivered in accordance with Article 51 in relation to paragraph (8) Article 127 and Article 137 of the Family Code of the Philippines.

WHEREFORE, premises considered, judgment is hereby rendered directing the partition of Lot 1087-A-2-E between the plaintiff and
the defendant in equal share of what remains after allocating to Nilo Adolfo a portion of Nine hundred thirteen (913) square meters
representing his presumptive legitime.

The plaintiff is directed to submit to this court the proposed subdivision plan for its consideration before submitting the same for
approval to the Bureau of Lands.

In case of disagreement as to their respective location, the same shall be done through raffle to be conducted by the sheriff who shall
see to it that judgment in this case shall be fully implemented.

SO ORDERED.28

Respondent instituted an appeal with the CA, which was docketed as CA- G.R. CV No. 01783.

Court of Appeals Decision in CA-G.R. CV No. 78971

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Meanwhile, on May 30, 2007, the CA rendered its Decision29 in CA-G.R. CV No. 78971. It reversed the May 15, 2002 Decision of the
trial court in Civil Case No. MAN-2683. It declared, among others, that the subject property was respondent’s paraphernal property.
Thus, it held:

Proceeding from the foregoing consideration, the finding that Lot No. 1087-A-2-E is a conjugal property does not have any basis,
hence, does not have any merit at all. On the contrary, plaintiffs-appellants 30 sufficiently proved that the aforesaid lot was defendant-
appellee’s31 paraphernal property as the latter even admitted that she inherited the same from her mother although she claimed it as a
conjugal property based on the TCT’s attached to her answer. Another strong indication that Lot No. 1087-A-2-E is solely owned by
defendant-appellee is the fact that in another case (Civil Case No. MAN-2008) involving the same property and the same parties but for
a different issue (road right of way), defendant-appellee alone signed the compromise agreement ceding a portion of the subject lot as
a right of way perpetually open and unobstructed for the benefit of plaintiffs-appellants, defendant-appellee, their respective heirs,
assigns and transferees and guests. The same compromise agreement which became the decision of the case attained finality without
defendant-appellee questioning the absence of her husband’s signature.

xxxx

WHEREFORE, prescinding from the foregoing premises, the appeal is hereby GRANTED and the Decision of the Regional Trial Court
of Mandaue City, Branch 55, dated 15 May 2002, in Civil Case No. MAN-2683 is REVERSED and SET ASIDE.

Let the partition of Lot No. 1087-A-2-E consisting of 300 square meters bought by plaintiffs-appellants from defendant-appellee be done
in accordance to [sic] the sketch plan executed for that purpose.

SO ORDERED.32

On June 23, 2007, the above CA decision became final and executory. 33

Ruling of the Court of Appeals in CA-G.R. CV No. 01783

In CA-G.R. CV No. 01783, respondent filed her Appellant’s Brief, 34 where she argued that the trial court erred in issuing its October 2,
2006 Order directing the partition or sale of the subject property; that it was error for the trial court to take judicial notice of its own
judgment in Civil Case No. MAN-2683 and thus declare that the subject property is conjugal, since the issue of whether it constitutes
conjugal or paraphernal property was still pending in the appeal in CA- G.R. CV No. 78971; that since the proceedings in Civil Case No.
MAN-2683 have not been terminated and the issue regarding the character of the subject property has not been resolved with finality,
then petitioner’s resort to a request for admission and motion for judgment on the pleadings was premature; and that with the May 30,
2007 Decision in CA-G.R. CV No. 78971, petitioner and the trial court should submit to the finding therein that the subject property is
her paraphernal property.

In his Appellee’s Brief,35 petitioner insisted that the trial court did not err in treating his motion for judgment on the pleadings as one for
summary judgment; that respondent’s Answer in Civil Case No. MAN-2683 constituted a judicial admission that the subject property
was a conjugal asset, which required no further proof; that respondent’s failure to reply to his written request for admission also resulted
in the acknowledgment that the subject property is a conjugal asset; that the trial court correctly took judicial notice of the proceedings
in Civil Case No. MAN-2683, as they were relevant and material to the resolution of Civil Case No. MAN-4821; that since it was not
respondent who appealed the May 15, 2002 decision in Civil Case No. MAN-2683, then the finding therein that the subject property is
conjugal should bind her; and that the CA’s eventual finding in CA- G.R. CV No. 78971 that the subject lot was respondent’s
paraphernal property cannot bind him because he was not a party to Civil Case No. MAN-2683.

On October 6, 2009, the CA issued the assailed Decision containing the following decretal portion:

WHEREFORE, based from the foregoing premises, the Order of the Regional Trial Court, Branch 55, Mandaue City, in Civil Case No.
MAN-4821, is hereby REVERSED and SET ASIDE and the records of this case are remanded to RTC (Branch 55), Mandaue City, for
further proceedings.

SO ORDERED.36

In arriving at the above conclusion, the CA held that the trial court cannot treat petitioner’s motion for judgment on the pleadings as one
for summary judgment. It stated that in a proper case for judgment on the pleadings, there are no ostensible issues at all on account of
the defending party’s failure to raise an issue in his answer, while in a proper case for summary judgment, such issues exist, although
they are sham, fictitious, or not genuine as shown by affidavits, depositions or admissions. In other words, a judgment on the pleadings
is a judgment on the facts as pleaded, while a summary judgment is a judgment on the facts as summarily proved by affidavits,
depositions, or admissions.37 It added that respondent’s Answer appeared on its face to tender an issue; it disputed petitioner’s claim
that the subject property is their conjugal property. The next thing to be determined is whether this issue is fictitious or sham as to justify
a summary judgment.

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The CA added that although respondent was bound by the resulting admission prompted by her failure to reply to petitioner’s request
for admission, her claims and documentary exhibits clearly contradict what petitioner sought to be admitted in his request; that the trial
court disregarded the fact that the issue of whether the subject property is conjugal was still unresolved as CA-G.R. CV No. 78971 was
still pending; and that finally, the trial court should have been guided by the principles that trial courts have but limited authority to
render summary judgments and that summary judgments should not be rendered hastily. 38

Petitioner moved to reconsider, but in a March 2, 2012 Resolution, he was rebuffed. Hence, the present Petition was filed on April 30,
2012.

In a March 20, 2013 Resolution,39 the Court resolved to give due course to the instant Petition.1âwphi1

Issue

Petitioner now claims that the Court of Appeals erred in deciding the case on a question of substance not in accord with law, Rule 26 of
the 1997 Rules, and applicable jurisprudence.40

Petitioner’s Arguments

In his Petition seeking to reverse and set aside the assailed CA dispositions and thus reinstate the October 2, 2006 Order of the trial
court, petitioner insists that respondent’s failure to reply to his written request for admission resulted in her admitting that the subject
property is a conjugal asset, applying Rule 26, Section 2 of the 1997 Rules; that the CA grossly erred in disregarding the rule; that with
the resulting admission, there remains no genuine issue to be resolved in Civil Case No. MAN-4821, such that judgment based on the
pleadings is proper. Finally, petitioner adds that respondent’s trifling with the law and rules of procedure – by conveniently claiming in
one case that the subject property is conjugal, and then in another that it is paraphernal – should not be countenanced; she should be
held to her original declaration that the subject property is conjugal.

Respondent’s Arguments

In her Comment,41 respondent counters that, as correctly ruled by the CA, petitioner elected the wrong remedy in filing a motion for
judgment on the pleadings when he should have moved for summary judgment; that in a motion for judgment on the pleadings, the
movant is deemed to admit the truth of all of the opposing party’s material and relevant allegations, and rest his motion on those
allegations taken together with that of his own as are admitted in the pleadings; 42 that the effect of this is that petitioner is deemed to
have admitted that the subject property is paraphernal, as claimed in her Answer; that with the final and executory May 30, 2007
Decision of the CA in CA-G.R. CV No. 78971, the subject property should now be considered as her paraphernal property, and
petitioner’s case for partition on the claim that the subject property is conjugal should be dismissed for being moot and academic.

Our Ruling

The Court denies the Petition.

Judgment on the pleadings is proper "where an answer fails to tender an issue, or otherwise admits the material allegations of the
adverse party’s pleading."43 Summary judgment, on the other hand, will be granted "if the pleadings, supporting affidavits, depositions,
and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law." 44

We have elaborated on the basic distinction between summary judgment and judgment on the pleadings, thus:

The existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham or fictitious character, on the other,
are what distinguish a proper case for summary judgment from one for a judgment on the pleadings. In a proper case for judgment on
the pleadings, there is no ostensible issue at all because of the failure of the defending party’s answer to raise an issue. On the other
hand, in the case of a summary judgment, issues apparently exist-i.e. facts are asserted in the complaint regarding which there is as
yet no admission, disavowal or qualification; or specific denials or affirmative defenses are in truth set out in the answer-but the issues
thus arising from the pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions. 45

An answer would "fail to tender an issue" if it "does not deny the material allegations in the complaint or admits said material allegations
of the adverse party’s pleadings by confessing the truthfulness thereof and/or omitting to deal with them at all. Now, if an answer does
in fact specifically deny the material averments of the complaint and/or asserts affirmative defenses (allegations of new matter which,
while admitting the material allegations of the complaint expressly or impliedly, would nevertheless prevent or bar recovery by the
plaintiff), a judgment on the pleadings would naturally be improper." 46

On the other hand, "whether x x x the issues raised by the Answer are genuine is not the crux of inquiry in a motion for judgment on the
pleadings. It is so only in a motion for summary judgment. In a case for judgment on the pleadings, the Answer is such that no issue is

148
raised at all. The essential question in such a case is whether there are issues generated by the pleadings." 47 "A ‘genuine issue’ is an
issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. When the
facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts, and summary
judgment is called for."48

In rendering summary judgment, the trial court relied on respondent’s failure to reply to petitioner’s request for admission, her admission
in Civil Case No. MAN-2683, as well as its May 15, 2002 Decision declaring that the subject property is a conjugal asset. It took judicial
notice of the proceedings in said case. While there is nothing irregular with this – as courts may "take judicial notice of a decision or the
facts prevailing in another case sitting in the same court if (1) the parties present them in evidence, absent any opposition from the
other party; or (2) the court, in its discretion, resolves to do so" 49 – the trial court however disregarded the fact that its decision was then
the subject of a pending appeal in CA-G.R. CV No. 78971. It should have known that until the appeal is resolved by the appellate court,
it would be premature to render judgment on petitioner’s motion for judgment on the pleadings; that it would be presumptuous to
assume that its own decision would be affirmed on appeal. One of the issues raised in the appeal is precisely whether the subject
property is conjugal, or a paraphernal asset of the respondent. Thus, instead of resolving petitioner’s motion for judgment on the
pleadings, the trial court should have denied it or held it in abeyance. It should have guided petitioner to this end, instead of aiding in
the hasty resolution of his case. In the first place, Civil Case No. MAN-4821 was transferred to it from Branch 56 precisely for the
reason that it was the court which tried the closely related Civil Case No. MAN-2683.

Even if respondent is deemed to have admitted the matters contained in petitioner’s request for admission by her failure to reply
thereto, the trial court should have considered the pending appeal in CA-G.R. CV No. 78971. It cannot take judicial notice solely of the
proceedings in Civil Case No. MAN-2683, and ignore the appeal in CA-G.R. CV No. 78971. After all, CA-G.R. CV No. 78971 is merely
a continuation of Civil Case No. MAN-2683; an appeal is deemed a continuation of the same case commenced in the lower court. 50

On the part of petitioner, it must be said that he could not have validly resorted to a motion for judgment on the pleadings or summary
judgment. While it may appear that under Rules 34 and 35 of the 1997 Rules, he may file a motion for judgment on the pleadings or
summary judgment as a result of the consequent admission by respondent that the subject property is conjugal, this is not actually the
case. Quite the contrary, by invoking the proceedings and decision in Civil Case No. MAN-2683, petitioner is precluded from obtaining
judgment while the appeal in said case is pending, because the result thereof determines whether the subject property is indeed
conjugal or paraphernal. He may not preempt the appeal in CA-G.R. CV No. 78971.

While it is true that a judgment cannot bind persons who are not parties to the action, 51 petitioner cannot, after invoking the proceedings
in Civil Case No. MAN-2683 to secure affirmative relief against respondent and thereafter failing to obtain such relief, be allowed to
repudiate or question the CA’s ruling in CA-G.R. CV No. 78971. The principle of estoppel bars him from denying the resultant
pronouncement by the appellate court, which became final and executory, that the subject property is respondent’s paraphernal
property. "In estoppel, a person, who by his deed or conduct has induced another to act in a particular manner, is barred from adopting
an inconsistent position, attitude or course of conduct that thereby causes loss or injury to another. It further bars him from denying the
truth of a fact which has, in the contemplation of law, become settled by the acts and proceeding of judicial or legislative officers or by
the act of the party himself, either by conventional writing or by representations, express or implied or in pais." 52

Finally, the Court notes that the appellate court overlooked the May 30, 2007 Decision in CA-G.R. CV No. 78971, which became final
and executory on June 23 , 2007. The respondent included this development in her appellee's brief, but the CA did not take it into
account. As an unfortunate consequence, the case was not appreciated and resolved completely.

Thus, with the development in Civil Case No. MAN-2683 brought upon by the final and executory decision in CA-G.R. CV No. 78971 ,
petitioner's case is left with no leg to stand on. There being no conjugal property to be divided between the parties, Civil Case No.
MAN-4821 must be dismissed.

WHEREFORE, the Petition is DENIED. The October 6, 2009 Decision and March 2, 2012 Resolution of the Court ofAppeals in CA-G.R.
CV No. 01783 are AFFIRMED WITH MODIFICATION in that Civil Case No. MAN-4821 is ordered DISMISSED.

SO ORDERED.

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Mandap v. Department of Agrarian Reform, G.R. No. 194348 (Notice), [June 30, 2021]
G.R. No. 194348. June 30, 2021.

REYNALDO C. MANDAP, ET AL., petitioners, vs. DEPARTMENT OF AGRARIAN REFORM, PROVINCIAL OFFICE OF CAGAYAN,
REPRESENTED BY VIRGILIO M. ACASILI, JR., ET AL., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated June 30, 2021 which reads as follows:

"G.R. No. 194348 (REYNALDO C. MANDAP, ET AL., petitioners v. DEPARTMENT OF AGRARIAN REFORM, PROVINCIAL OFFICE
OF CAGAYAN, represented by VIRGILIO M. ACASILI, JR., ET AL., respondents). This resolves the Petition for Review on Certiorari
under Rule 45 of the Rules of Court filed by petitioners Reynaldo C. Mandap, Faustino T. Salamanca, Jr., Heirs of Antonio Leo E.
Antonio, represented by Roberto Q. Antonio, and Heirs of Faustino E. Salamanca, Sr., represented by Faustino T. Salamanca, Jr., and
Nestor E. Duque (collectively, petitioners), praying for the reversal of the January 29, 2010 Decision and November 11, 2010 Resolution
of the Court of Appeals (CA) in CA-G.R. SP No. 108394. The CA affirmed the September 15, 2008 Resolution of the Regional Trial
Court (RTC), Second Judicial Region, Branch 11, Tuao, Cagayan, which dismissed the Motion for Summary Judgment filed by the
petitioners.

Antecedents

On February 25, 1955, the Director of Lands for and in behalf of the Republic of the Philippines filed a petition for the settlement and
adjudication of title over a tract of land containing 822.830 hectares denominated as Lot Nos. 91 and 106 of the Piat Public Land
Subdivision Pls-149. He prayed that said lots be declared in the name of the Republic. The case was raffled to the Court of First
Instance of Cagayan First Branch (CFI Cagayan Branch I) and was docketed as Cadastral Case No. N-5 LRC Cad. Rec. No. N-86.

On January 27, 1956, an order of general default was issued against the whole world, except for Esperanza Hawkins (Esperanza), who
claimed ownership in fee simple of a portion of Lot Nos. 91 and 106, and Francisco Lingan (Francisco) and Napoleon Lingan
(Napoleon), who respectively claimed ownership over portions of Lot No. 91.

On September 30, 1957, the CFI Cagayan Branch I rendered a Decision in favor of the Director of Lands, thereby declaring Lot Nos. 91
and 106 as part of the public domain.

Aggrieved, Esperanza filed an appeal. On May 20, 1964, the CA Second Division rendered a Decision in TA-R.G. Numeros 23792-R y
23793-R reversing the ruling of the CFI Cagayan Branch I. The CA Second Division declared Esperanza as the true and exclusive
owner of Lot Nos. 91 and 106 comprising a surface land area of 822.830 hectares. The Decision of the CA became final and executory.

Pursuant to the CA Second Division's ruling, the Land Registration Commission issued Decree No. N-111052 for the registration of Lot
Nos. 91 and 106 in favor of Esperanza. Accordingly, on June 17, 1977, Original Certificate of Title (OCT) No. O-867 was issued by the
Register of Deeds for Lot Nos. 91 and 106 in Esperanza's name.

Here lies the source of confusion.

While the appeal before the CA Second Division was pending, the Director of Lands commenced another case for the settlement and
adjudication of title over Lot Nos. 8319 and 8457 of the Cadastral Survey of Solana, Cagayan. He prayed that said lots be declared
public lands. The case was docketed as Cad. Case No. N-19 LRC Cad. Rec. No. N-248. Interestingly, Lot Nos. 8319 and 8457 were
the same parcels of land denominated as Lot Nos. 91 and 106 of the Piat Cadastre and subject of the appeal before the CA Second
Division.

On October 5, 1962, the Justice of the Peace of Solana, acting as a Cadastral Judge, adjudicated Lot Nos. 8319 and 8457 in favor of
Francisco and Napoleon. Then, on July 15, 1963, the Justice of the Peace of Solana ordered the issuance of a decree of registration
over Lot Nos. 8319 and 8457 in favor of Francisco and Napoleon. Hence, on November 21, 1963, the Register of Deeds issued OCT
No. O-465 in favor of Francisco and Napoleon.

After a series of voluntary transfers and conveyances from Francisco and Napoleon, Lot Nos. 8319 and 8457 were eventually acquired
through purchase by Gregoria Padilla (Gregoria). Hence, on January 24, 1968, Transfer Certificate of Title (TCT) No. T-11083, with an
area of 7,326,419 square meters, and TCT No. T-11082, measuring 726,477 square meters were issued in Gregoria's name.

150
Meanwhile, sometime after October 21, 1972, Lot No. 91 Pls-149 with an area of 732.6419 hectares located at Piat and registered in
Esperanza's name was placed under Operation Land Transfer pursuant to Presidential Decree No. 27. After which, in 1973, Certificates
of Land Transfer were issued in favor of the qualified tenant-farmer beneficiaries.

In view of the existence of two conflicting titles covering the same lands, on July 25, 1977, Henry Hawkins (Henry), Esperanza's
successor-in-interest instituted an action before the CFI of Tuao, Cagayan, for the cancellation of TCT Nos. T-11082 and T-11083 in
Gregoria's name. The suit was docketed as Civil Case No. 563-T.

During the pendency of Civil Case No. 563-T, Esperanza executed Deeds of Transfer over Lot No. 91 in favor of the qualified farmer
beneficiaries. Subsequently, Emancipation Patents were issued by the Department of Agriculture (DAR) in favor of said farmer-
beneficiaries.

On March 19, 1982, the CFI of Tuao rendered a Decision in Civil Case No. 563-T declaring TCT Nos. T-11082 and T-11083 void ab
initio and legally non-existent.

Gregoria appealed the CFI's judgment.

On July 14, 1989, the CA Thirteenth Division in CA-G.R. CV No. 01060 reversed the CFI's Decision and upheld the validity of TCT Nos.
T-11082 and T-11083.

Subsequently, in June 1994, Gregoria, claiming ownership of the subject properties on the basis of the CA Thirteenth Division's
Decision, sent a letter for Comprehensive Agrarian Reform Program (CARP) Coverage under the Voluntary Offer to Sell scheme. The
offer involved a 100-hectare portion of Lot No. 8319 covered by TCT No. T-11083.

In view thereof, the DAR conducted an actual site inspection and discovered that the tract of land offered by Gregoria for CARP
coverage is the same land registered in the name of Esperanza under OCT No. O-867.

Perplexed as to who is the true and lawful landowner, on September 7, 2009, the DAR instituted a Complaint for Interpleader before the
RTC of Tuao, Cagayan. The DAR prayed for an order to require the respondents Heirs of Esperanza on the one hand, and Gregoria on
the other, to interplead and resolve their conflicting claims, and to ultimately determine who is entitled to the payment of just
compensation. The case was docketed as Civil Case No. 465-06-T.

On October 23, 2006, respondents filed their Answer. They insisted on their title and right of ownership over the disputed properties as
evidenced by OCT No. O-867 in the name of their predecessor Esperanza. In support thereof, they relied on the final and executory
Decision dated May 20, 1964, by the CA Second Division in TA-R.G. Numeros 23792-R y 23793-R, which declared Esperanza as the
lawful owner of Lot Nos. 91 and 106.

Meanwhile, the petitioners respectively filed their Answers-in-Intervention. They claimed that they are the true and lawful owners of the
subject properties having acquired them from Gregoria through the following conveyances, namely, (i) a dation in payment of 2,000,000
square meters to Leo Antonio and Faustino Salamanca, Sr.; (ii) a Deed of Sale dated December 2, 2004 involving 5,126,400 square
meters to Reynaldo Mandap (Reynaldo) and Faustino Salamanca, Jr.; and (iii) a Deed of Sale on March 15, 2004 of 726,477 square
meters to Reynaldo.

Thereafter, on April 24, 2008, petitioners filed a Motion for Summary Judgment. They argued that a scrutiny of the material facts as
alleged and admitted in the DAR's Complaint for Interpleader, respondents' Answer, their (petitioners') Answer-in-Intervention, and the
comments and oppositions thereto, failed to raise a genuine issue of fact. They alleged that the pleadings centered on the principal
issues regarding the ownership of the subject lands and the validity of Gregoria's conveyances to them vis-a-vis the retention limits set
forth in Section 6 of Republic Act (R.A.) No. 6657. They claimed that said issues are sham and unsubstantial. They argued that the
issue of ownership had long been settled and resolved with finality in the CA Thirteenth Division's Decision in CA-G.R. CV No. 01060,
which upheld the validity of TCT Nos. T-11082 and T-11083 in Gregoria's name. Meanwhile, the issue regarding the retention limit is a
question of law which may be resolved through a summary judgment.

Respondents filed a Comment/Opposition thereto. Then, the parties respectively filed their Reply and Rejoinder.

Ruling of the RTC

On September 15, 2008, the RTC denied the Motion for Summary Judgment. The RTC ruled that the issue of ownership between the
parties must still be litigated and proven. It noted that the Decision of the CA Thirteenth Division which petitioners harp on, did not
actually resolve the issue of ownership with finality. Rather, the CA Thirteenth Division stated that the claims of the third-party plaintiffs
must be ventilated in proper proceedings since said matter was not part of the issues raised on appeal.

The decretal portion of the RTC's Order reads:

WHEREFORE, premises considered, the Motion for summary judgment interposed by the movants-intervenors is hereby DENIED for
lack of merit.

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Let the pre-trial proceed on October 22, 2008.

SO ORDERED.

Dissatisfied with the ruling, on October 3, 2008, petitioners filed a Motion for Reconsideration. However, the motion was denied by the
RTC in its Order dated March 27, 2009.

Thereafter, petitioners filed an appeal.

Ruling of the CA

On January 29, 2010, the CA rendered a Decision affirming the RTC's ruling. The CA ratiocinated that while its Thirteenth Division
affirmed the validity of TCT Nos. T-11082 and T-11083 in Gregoria's name, the latter's Decision was devoid of any categorical and
conclusive pronouncement regarding the invalidity of OCT No. O-867 in Esperanza's name. It noted that the validity of OCT No. O-867
was never specifically placed in issue nor directly traversed before the CA Thirteenth Division or the CFI of Tuao.

Likewise, the CA stressed that OCT No. O-867 was never subjected to any direct nullification suit or independent cancellation
proceeding, and is thus, still subsisting. On this score, the respondents' Answer where they based their title and ownership on OCT No.
O-867 may not be regarded as an unfounded, fictitious or unsubstantial defense. Rather, such argument was a legitimate and plausible
anchor of a valid claim or defense in the action for interpleader. The CA concluded that since the matter of ownership is a significant
issue and is disputed by the parties, a full-blown trial is necessary.

The dispositive portion of the CA Decision states:

WHEREFORE, premises considered, the instant Petition for Certiorari is DENIED, and accordingly, the assailed September 15, 2008
Resolution and March 27, 2009 Order of the court a quo are hereby AFFIRMED.

SO ORDERED.

Aggrieved, on February 16, 2010, petitioners filed a Motion for Reconsideration, which was denied in the CA's November 11, 2010
Resolution.

Undeterred, petitioners filed the instant Petition for Review on Certiorari.

Issues

The main issues in the instant case are (i) whether or not the motion for summary judgment should be granted; and (ii) whether or not
Gregoria's conveyances to petitioners violated the retention limit under Section 6 of R.A. No. 6657.

Petitioners lament that the RTC and the CA erred in denying their Motion for Summary Judgment. They insist that the defense raised by
the respondents regarding the validity of OCT No. O-867 does not tender a genuine issue. They harp on the ruling of the CA Thirteenth
Division that affirmed validity of TCT Nos. T-11082 and T-11083. They surmise that the affirmance of said titles implied that respondents'
OCT No. O-867 is void. They further argue that the validity of OCT No. O-867 was squarely raised before the CFI of Tuao. They point
out that in Gregoria's Answer in said civil case, she questioned the validity of OCT No. O-867, thereby subjecting said title to a direct
nullification suit or cancellation proceeding.

Moreover, petitioners urge that the second issue regarding the validity of Gregoria's conveyances to them involves a pure question of
law. They argue that inasmuch as there are no disputed facts, the existence of such question of law shall not bar their plea for a
summary judgment. They further aver that the conveyances made by Gregoria to them are valid since Section 6 of R.A. No. 6657 does
not per se prohibit the sale or disposition of agricultural lands. They also contend that Section 6 may not impair the obligation of
contracts.

Finally, petitioners claim that the CA violated the principles of res judicata and stare decisis when it resuscitated the issue ownership
over the subject lands by giving deference to the CA Second Division's Decision in TA-R.G. Numeros 23792-R y 23793R, despite the
fact that such matter was already resolved by the CA Thirteenth Division. They bewail that the CA Second Division's Decision finds no
application to the case at bar since the petitioners and Gregoria are not parties thereto, and that it involves a different subject matter
and cause of action.

On the other hand, respondents counter that they raised valid and genuine issues in their Answer. They retort that the Decision of the
CA Thirteenth Division flaunted by petitioners did not lay to rest the issue of ownership. They explain that there was no explicit
pronouncement in said Decision declaring OCT No. O-867 as null and void. In fact, the matter regarding the validity of OCT No. O-867
was never placed in issue either before the CFI of Tuao or the CA Thirteenth Division.

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Similarly, respondents aver that the CA Thirteenth Division may not reverse or modify the earlier Decision of the CA Second Division in
TA-R.G. Numeros 23792-R y 23793-R which declared Esperanza as the true and exclusive owner of Lot Nos. 91 and 106. The former
may not reverse the latter's ruling, they being co-equal courts.

Furthermore, respondents point out that Gregoria and the petitioners never filed an action to annul OCT No. O-867. Hence, said title is
valid and binding against the whole world. It remains irrevocable and indefeasible, and must be maintained and respected unless
challenged in direct proceedings.

Lastly, respondents posit that the conveyances of the subject lands from Gregoria to the petitioners transgressed Section 6 of R.A. No.
6657. Respondents state that since the conveyances are void, petitioners had no personality to intervene in the action for interpleader.

Ruling of the Court

The petition lacks merit.

A petition for review on certiorari

under Rule 45 is limited only to

reviewing errors of law.

It is noted at the outset that the petition raises mixed questions of law and fact, which is generally prohibited in a Rule 45 petition. On
the one hand, the rendition of a summary judgment is a question of law. A review by the appellate court of the propriety of a summary
judgment based on the pleadings would not involve an evaluation of the probative value of any evidence, but would only limit itself to an
inquiry regarding the proper application of the law on the given facts and supporting documents.

On the other hand, the matter regarding the validity of Gregoria's conveyances to the petitioners constitutes a question of fact that this
Court may not resolve, as it is not a trier of facts. Said issue entails sifting through the evidence submitted by the parties, such as the
deeds of conveyances, affidavits, and various documents from the parties and the government agencies, to ultimately determine
whether the conveyances transgressed the government's retention limits in the disposal of agricultural lands. Although the rule
forbidding a re-evaluation of the evidence is not iron-clad, none of the exceptions obtain to warrant a review of the facts.

In any event, the petition likewise fails on the merits.

Petitioners are not entitled to a

summary judgment.

Significantly, the disposition of a civil action through a summary judgment is sanctioned by Rule 35 of the Rules of Court, to wit:

Section 1. Summary judgment for claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or
admissions for a summary judgment in his or her favor upon all or any part thereof.

Section 2. Summary judgment for defending party. A party against whom a claim, counterclaim, or cross-claim is asserted or a
declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a summary judgment in his
or her favor as to all or any part thereof.

An examination of the Rules clearly reveals that a summary judgment is by no means a hasty one. The party who moves for a summary
judgment bears the burden of clearly proving the absence of a genuine issue of fact, or that the issue posed in the complaint is patently
unsubstantial and does not constitute a genuine issue for trial. In turn, the adverse party may file an opposition to the motion and
present affidavits, depositions, or other documents. Thereafter, the court must scrutinize the pleadings, supporting affidavits,
depositions, and admissions on file and determine whether, except as to the amount of damages, there is no genuine issue and the
moving party is entitled to a judgment as a matter of law. Courts are called to exercise caution in disposing of a civil case through a
summary judgment since this procedural device dispenses with a trial and deprives parties the opportunity to present their evidence in
court.

Relatedly, the propriety of rendering a summary judgment hinges on the existence of a "genuine issue of fact" or one that requires the
presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. Notably, a factual issue is regarded as sham
when by its nature, it cannot be proven or that the party tendering the same has no sincere intention or adequate evidence to prove it.
This usually happens in denials made by defendants solely for the sake of raising an issue and thereby causing delay.

In the case at bar, petitioners argue that the defense of ownership raised by the respondents in their Answer (in the interpleader), failed
to tender a genuine issue.

This Court disagrees.

A scrutiny of the respondents' Answer reveals that it raised a highly contentious argument which must be resolved through a full-blown
trial. Specifically, respondents averred that they own the subject properties as the holders of OCT No. O-867. They likewise harped on
153
the Decision of the CA Second Division in TA-R.G. Numeros 23792-R y 23793-R, which affirmed their predecessor Esperanza's
ownership over the subject properties.

It bears stressing that the CA Second Division's Decision is a final and executory ruling that awarded ownership over the disputed
property in favor of Esperanza. Said Decision led to the issuance of Decree No. N-111052 for the registration of Lot Nos. 91 and 106. In
turn, OCT No. O-867 was issued in favor of Esperanza. Based on the foregoing established facts, it is evident that the defense of
ownership posited by respondents in their Answer undoubtedly raised an important and genuine issue with respect to the material fact
of ownership, and correlatively, entitlement to just compensation.

This notwithstanding, petitioners staunchly insist that respondents' defense of ownership is sham and unsubstantial since said issue
had been laid to rest in the CA Thirteenth Division's Decision in CA-G.R. CV No. 01060 where the CA affirmed the validity of TCT Nos.
T-11082 and T-11083 in Gregoria's name and, thus, impliedly declared OCT No. O-867 null and void.

The petitioners' arguments are erroneous in numerous respects.

First, a perusal of the CA Thirteenth Division's Decision reveals that said court did not declare OCT No. O-867 null and void. The body
or dispositive portion does not contain a declaration regarding the invalidity of said title.

Second, the nullity of OCT No. O-867 was never raised as an issue either before the CFI of Tuao (which rendered the Decision
appealed before the CA Thirteenth Division) or on appeal before the CA Thirteenth Division. In fact, the CA Thirteenth Division stated
that the issues raised on appeal centered on the validity of TCT Nos. T-11082 and T-11083, and on the jurisdiction of the CFI of
Cagayan Branch I to act as a cadastral court.

In addition, poring over the Complaint for nullity of TCT Nos. T-11082 and T-11083 filed by Henry, and the Answer with Counterclaim
submitted by Gregoria, it becomes apparent that the parties never mentioned or prayed for a declaration of nullity of OCT No. O-867. It
is interesting to note that in Gregoria's Answer, she only alleged that her title and that of her predecessors are older than Henry's,
without arguing that said title is invalid for such reason. More telling, in her Counterclaim, she merely prayed for an award of damages
and the costs of suit, but never sought the cancellation of OCT No. O-867. This clearly debunks the petitioners' argument in their
petition where they falsely claimed that Gregoria sought the cancellation of OCT No. O-867. Likewise, neither was the annulment of
OCT No. O-867 sought in the Answer-in-Intervention or the Cross-Claim and Third Party Complaint filed in the same case.

Third, it is elementary that unless OCT No. O-867 is annulled in a direct proceeding, the same remains valid and effective. A Torrens
title is irrevocable and indefeasible and the courts must see to it that the title is maintained and respected unless challenged in a direct
proceeding. It cannot be changed, altered, modified or diminished collaterally. In fact, neither Gregoria nor any of her successors-in-
interest instituted an action to annul Esperanza's title. Hence, Esperanza's title is still a good title that is binding against the whole world.
Moreover, it may not be conveniently annulled by mere implication, as petitioners mistakenly urge.

Fourth, the CA Thirteenth Division has no power to directly or impliedly annul or reverse the ruling of the CA Second Division. These
two divisions belong to the same court. Thus, it was completely erroneous for petitioners to claim that the CA Thirteenth Division's
Decision in effect reversed the pronouncement of the CA Second Division.

Fifth, the CA Thirteenth Division's Decision does not constitute res judicata, bar by conclusiveness of judgment, or a binding precedent
in the action for interpleader. The petitioners are wrong in insisting on the application of the CA Thirteenth Division's Decision simply
because it involved the same parties and the same properties as those embroiled in the action for interpleader. Actually, even Cadastral
Case No. N-5 LRC Cad. Rec. No. N-86 from which the CA Second Division's Decision stemmed from, similarly involved the same
parties and the same properties. It must be noted that Francisco and Napoleon from whom Gregoria (and eventually petitioners)
obtained their title, were parties in the original civil case.

More importantly, although the CA Thirteenth Division upheld the validity of TCT Nos. T-11082 and T-11083, it did so only for the
purpose of declaring that the title is valid, and not for the purpose of ultimately resolving the issue of ownership between the contending
parties. Hence, petitioners cannot harp on said judgment as a basis for claiming a conclusive award of ownership in their favor.

In addition to the issue of ownership, the argument regarding the validity of Gregoria's conveyances to the petitioners, and
consequently, the petitioners' right to intervene in the proceedings, as raised in the DAR's Opposition to the Motion for Leave to
intervene, and the respondents' Comment/Opposition to the Motion for Intervention, respectively, further tender valid and genuine
issues. Said issues are not simply questions of law as the petitioners tenuously claimed. Rather, they are matters that are best resolved
by sifting through the evidence of the contending parties in a full-blown trial.

All told, the parties' pleadings, affidavits and documents are replete with diametrically opposed and conflicting claims. The matter of
ownership and the validity of the conveyances may not be brushed aside as frivolous and sham so as to dispense with the presentation
of evidence in a formal trial. Ultimately, a full-blown trial is still necessary to determine the lawful owner of the subject properties for the
proper payment of just compensation.

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The January 29, 2010 Decision and November 11,
2010 Resolution of the Court of Appeals in CA-G.R. SP No. 108394 are AFFIRMED.

SO ORDERED.
154
Solidbank Corp. v. Court of Appeals, G.R. No. 120010, [October 3, 2002], 439 PHIL 23-36

G.R. No. 120010 October 3, 2002

SOLIDBANK CORPORATION (a.k.a. The Consolidated Bank & Trust Corp.), petitioner,
vs.
HON. COURT OF APPEALS, CENTRAL BANK OF THE PHILIPPINES, and FAR EAST BANK & TRUST COMPANY, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Whether or not summary judgment is proper in the case at bar is the issue to be resolved in the petition for review on certiorari under
Rule 45 of the Rules of Court filed with this Court assailing the Decision 1 of the Court of Appeals dated January 31, 1995 and its
subsequent Resolution2 dated April 28, 1995 in CA-G.R. CV No. 23601.

The antecedent facts as found by the Court of Appeals are as follows:

"The Pacific Banking Corporation (hereafter, "PBC") was placed under receivership on 5 July 1985. A Liquidator was designated for the
liquidation process. The Central Bank invited several banks to buy the "assets and the franchise of the various offices of PBC and to
assume its liabilities. The Far East Bank and Trust Company (herafter, FEBTC) was one of the bidders, and its bid was found to be the
most advantageous. PBC and Central Bank on the one hand and FEBTC on the other, signed: (a) Purchase Agreement dated 28
October 1986 xxx; and (b) Memorandum of Agreement dated 16 April 1986 xxx.

"On 27 May 1987, the Solidbank Corporation (a.k.a. the Consolidated Bank and Trust Corporation, hereafter, Solidbank) through its
Senior Vice-President/Comptroller Ms. Corazon R. Dayao, filed its claims with the Liquidator of PBC, Mr. Renan V. Santos, namely: (1)
P8,024,007.27 (excluding interests and surcharges) covering eight (8) receivables (computer machines and other accessories
connected with their operations and the right to collect rentals therefrom) due from PBC and assigned to Solidbank by the United
Pacific Leasing and Finance Corporation, a subsidiary of PBC, which amount due as of October 1988 totalled P24,158,263.10; (2)
several deposits (proceeds of collection items evidenced by registers of collection items and balances of the current accounts in the
various branches of PBC).

"Upon verification of the records of the case in court, the court discovered the existence of the Purchase Agreement and Memorandum
Agreement aforementioned.

"On 09 November 1988, Solidbank filed with the trial court in Special Proceeding No. 86-35313 a Motion to Implead the FEBTC as co-
respondent, and that it be ordered to pay the former jointly and severally with the liquidator of petitioner; (a) the principal sum of
P8,024,007.27 plus 3% penalty and 20% of the total amount thereof as attorney’s fees which amounted to a total of P24,158,263.10 as
of October, 1988, and, (b) the sum of P127,834.73 as FEBTC’s deposit liability, plus 12% interest and 20% of the total amount of the
claim as attorney’s fees which amounted to P24,158,263.10 as of October 1988. The motion was granted in an order dated 17
November 1988, declaring also the motion as in the nature of a "third party complaint" against FEBTC.

"On 16 December 1988, FEBTC filed its Answer to Solidbank’s Motion to Implead, averring it had no knowledge or information
sufficient to form a belief as to the truth of the allegation in paragraph 2 of Solidbank’s motion. It also denied paragraphs 3, 4, 5 ,6, 7,
and 8 of the same. The following special and affirmative defenses were pleaded: the SGV Report was actually attached to the purchase
agreement; Solidbank has no cause of action; computer machines and items subject of Solidbank’s eight [8] receivables were not
included in the properties and equipment purchased by FEBTC from the Central Bank; the items stated in Annex B of Solidbank’s
motion were not included among the deposit liabilities assumed by FEBTC under Section 2 of the Purchase Agreement. The Answer
prayed that the motion to implead FEBTC as respondent in the case be denied.

"Earlier, on 5 December 1988, Solidbank filed a Motion to Order Immediate Payment and/or Partial Judgment, alleging that in the
conference between Solidbank’s representative and the Central Bank Deputy Receiver of PBC in March 1986 in connection with
assigned "receivables due from PBC, the unpaid balance due Solidbank from PBC at the date of its closure amounted to
P1,206,495.17 and this amount is not controverted.

"On 06 December 1988, the liquidation court issued an Order granting Solidbank’s motion. It ruled that contrary to the Liquidator’s
position that the claim for unpaid rentals is an ordinary credit, the said claims of Solidbank should be given preference as they are part
of administrative expenses pursuant to Sections 30 and 31 of the Central Bank Act. The trial court ordered the Liquidator of PBC to pay
Solidbank the amount of P1,206,495.17.

"On 07 March 1989, the Liquidator of PBC wrote Solidbank inquiring when the latter will take delivery of the computers in settlement of
its claim considering that an inventory of the computers was furnished Solidbank in September, 1988.

155
"On 16 March 1989, Solidbank wrote the Liquidator, stating that no agreement (whether verbal or written) had been reached that the
surrender and delivery of the aforesaid computers shall constitute full settlement of its (Solidbank’s) claim. Further, while Solidbank
mentioned that it was ready to receive the computer machines and equipment, it was still pursuing its claim for the overdue rental
proceeds pertaining thereto.

"On 04 May 1989, Solidbank filed with the liquidation court a Motion for Summary Judgment in connection with the claims
aforementioned, citing the following grounds: there is no genuine issue as to any material fact; there is no substantial controversy in the
case; and, it is entitled to summary judgment as a matter of law. Annexed to the motion was the "Affidavit of Merits" executed by one
Corazon Dayao, Senior Vice-President / Comptroller of Solidbank.

"On 29 May 1989, FEBTC filed its Comment alleging: FEBTC did not specifically deny the claims of Solidbank in the Motion to Implead;
the issues before the liquidation court are not purely legal, but factual, i.e., whether the subject receivables as well as deposit liabilities
were included in the Purchase Agreement as among those purchased by FEBTC.

"On 05 June 1989, the Liquidator of PBC filed an Opposition." 3

On 12 June 1989, the liquidation court promulgated its assailed decision, the pertinent portions of which read:

"In the light of the aforesaid documented facts and circumstances recited in the pleadings, this Court finds no triable factual issue at
least insofar as the fact and amounts of the indebtedness of FEBTC to claimant-movant are concerned. As indebtedness, movant is
entitled to a judgment for payment thereof. Considering that the total amount of indebtedness is quite big, which movant needs in its
operation as a bank, the Court is impressed not only on the propriety but also with the necessity of "summarily adjudicating the case.
Any delay of justice to movant in this case can mean denial thereof, especially in the light of PBC’s liquidation and claim by its creditors.

"WHEREFORE, the FEBTC and the (PBC) as duly represented by its Liquidator, are ordered to pay jointly and severally the claim of
movant Solidbank as prayed for in its Motion for Summary Judgment dated November 9, 1988, less the amount of P1,206,495.17
already paid to Solidbank on January 11, 1989.

"SO ORDERED."4

Not satisfied with the decision, FEBTC went to the Court of Appeals which reversed the trial court, explaining that:

"x x x xxx xxx

"From the categorical and positive asseverations of xxx documents, there was a need for a proceeding to examine and evaluate the
true intent of the Memorandum of Agreement and the correct coverage of Purchase Agreement, to settle the issue in dispute. Hence,
summary judgment to resolve the controversy was precipitate.

"x x x xxx xxx

"WHEREFORE, the decision appealed from is hereby SET ASIDE and the case remanded to the trial court for further proceedings.

"SO ORDERED."5

A motion for reconsideration filed by petitioner was denied by the appellate court on April 28, 1995. 6 Hence, the present petition raising
the following:

RESPONDENT APPELLATE COURT COMMITTED REVERSIBLE ERROR IN SETTING ASIDE THE DECISION OF THE TRIAL
COURT AND IN ORDERING THE REMAND OF THE RECORDS OF THE CASE FOR FURTHER PROCEEDINGS, AND IN HOLDING
THAT SUMMARY JUDGMENT IS NOT PROPER IN THE CASE AT BAR. 7

As earlier stated, the only question that needs to be answered is: whether or not summary judgment is proper in the case at bar.

Petitioner insists that summary judgment is proper in this case; that the grounds upon which the summary judgment was filed were not
successfully rebutted by FEBTC nor by the Liquidator of Pacific Bank; 8 that the pleadings and admissions on the record, together with
the affidavits show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of
law.9 Petitioner cites par. 1.0 of respondent-bank’s answer to its Motion to Implead FEBTC where it averred that "it has no knowledge or
information sufficient to form a belief as to the truth of the allegation xxx of Solidbank’s motion" as well as its denial of pars. 3, 4, 5, 7
and 8 of the motion. These denials according to petitioner are general or blanket denials which are disallowed under the rules.
Petitioner also points out that it is inconceivable that private respondent had no actual knowledge or was completely unaware of the
claims of petitioner bank considering the enormity of the said claims. 10 Also, the subject matter of the motion to implead is fully
documented and cannot be resisted by a mere general denial.11 Assuming arguendo, petitioner continues, that FEBTC’s denial of
156
Solidbank’s claims can be considered a denial allowable under the rules, summary judgment is still proper as the denial or averment of
lack of knowledge does not raise a genuine issue.12 Respondent’s allegation that the computer machines and items subject of the eight
(8) receivables were not included in the properties and equipment purchased by FEBTC from the Central Bank does not tender any
genuine issue as to any material fact.13 Also, the liquidation court was correct when it held that the FEBTC "is not at all contesting the
Motion for Summary Judgment," citing the statement of FEBTC counsel Antonio R. Bautista, thus:

"Presented before the Court is a Motion for Summary Judgment filed by Solidbank represented by C.M. de los Reyes and Associates
through Atty. Maximino Z. Bañaga. Atty. Bautista representing the Far East Bank and Trust Co. appeared before this Court and
manifested that although in principle he is not objecting the motion for summary judgment as this being a liquidation claim that does not
require full blown trial, he does not agree that there are no material issues raised in the pleadings because the same material
allegations in the complaint is contested by Far East Bank in their Answer filed before this Court. However, said counsel for the Far
East Bank and Trust Co. manifested that he will have no objection if the Court will just require the parties to submit affidavit and
counter-affidavits in support to their respective contentions."14

Finally, petitioner claims that since there is a variance in the findings of facts of the trial court and the appellate court, the doctrine in
Roman Catholic Bishops of Malolos Inc., vs. IAC,15 should be applied. In said case this Court held: "[w]hen findings of fact of the Court
of Appeals are at variance with those of the trial court, xxx the [Supreme] Court has to review the evidence in order to arrive at the
correct findings based on the records."16 Petitioner asserts that there is a need to require the appellate court to elevate the records of
this case, so that this Court can review the evidence to arrive at the correct findings. 17

For its part, respondent FEBTC is of the position that the case was not resolvable on summary judgment because there are genuine
factual issues that are highly litigious and which require evidentiary hearing. These are: whether Solidbank’s claim is included in the
purchase agreement as among the properties and items purchased and assumed by FEBTC from Pacific Bank/Central Bank and,
corollarily, whether the SGV report, with all its contents, was actually attached to the purchase agreement. These issues, FEBTC
argues, are not as simple and as uncomplicated as to be resolved on depositions and affidavits alone. These issues necessitate a
trial.18

Philippine Deposit Insurance Corporation (PDIC) meanwhile, as substitute 19 for the Central Bank, claims that petitioner misrepresented
material facts;20 that for petitioner’s total principal claim of P8,024,007.27, it already received the total amount of P20,359,592.83 and
was awarded by the liquidation court the sum of P7,983,771.60 representing the rentals for the computer machines due from November
1988 to June 1990 plus 3% due monthly as penalty and delayed payment. 21 PDIC clarified that petitioner bank’s claim consisted of
rental receivables of United Pacific Leasing Corporation (UNAM) due from PBC for the lease of its computer machines under a lease
contract. These rental receivables were assigned by UNAM to petitioner-bank as security for the payment of certain loans granted by
the latter to the former;22 that on September 27, 1989, the court a quo rendered a decision approving the Compromise Agreement
between the parties limiting PBC’s obligation to P10,722,704.83. 23 PDIC also calls the attention of this Court to Civil Case No. 87-39114
entitled "The Consolidated Bank and Trust Corporation (Solidbank) vs. United Pacific Leasing and Finance Corporation, Antonio M.
Andal and Spouse, et al.;" that while petitioner is pursuing what has been a settled claim against herein respondents, it was also
prosecuting a case against UNAM for the purpose of collecting the loan obligations of the latter secured by the Deeds of Assignment,
among which are the computer rental receivables of UNAM from closed PBC subject of the instant petition. 24

We affirm the Court of Appeals and find the herein petition devoid of merit.

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays. When the
pleadings on file show that there are no genuine issues of fact to be tried, the Rules of Court allows a party to obtain immediate relief by
way of summary judgment. That is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the
law to the material facts.25

Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. 26 A "genuine issue" is such issue of fact
which require the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. 27

Rule 34, Section 3 of the Rules of Court provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine
issue as to any material fact, except for the amount of damages; and (2) the party presenting the motion for summary judgment must be
entitled to a judgment as a matter of law.28

In the case at bar, it cannot be said that the foregoing requisites are present. There is a genuine issue, the resolution of which requires
the presentation of evidence, i.e., whether or not Solidbank’s claim is included in the purchase agreement as among the properties and
items purchased and assumed by FEBTC from Pacific Bank/Central Bank. While the counsel for FEBTC did say that in principle he is
not objecting to the motion for summary judgment and "that they will have no objection if the Court will just require the parties to submit
affidavit and counter-affidavits in support to their respective contentions," this should not be taken out of context for in the same
manifestation, said counsel clearly expressed that he does not agree that there are no material issues raised in the pleadings. The
appellate court is correct in holding that:

"[s]uch statement is not an admission that summary judgment was in order. xxx [Rather] the more logical reading of FEBTC’s position is
that it was willing to submit the issue for resolution on the basis of affidavits, depositions, and admissions, the manner of proof in

157
summary proceedings, consistent with the summary nature of liquidation proceedings. But given the extent and nature of the disputed
factual points, summary judgment would be, and it was, injudicious."29

Rule 34 does not vest in the trial court jurisdiction to summarily try the issues on depositions and affidavits when the requisites
abovementioned are not present. Upon a motion for summary judgment, the sole function of the court is to determine whether or not
there is an issue of fact to be tried. Any doubt as to the existence of an issue of fact must be resolved against the movant. Courts must
be critical of the papers presented by the moving party and not of the papers in opposition thereto. 30

The party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that
the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. 31 Petitioner Solidbank failed to
discharge this burden. A cursory reading of the pleadings submitted by the parties would show that a trial is necessary to ascertain
which of the conflicting allegations are true. And contrary to what herein petitioner wants to happen, it is not this Court’s duty to
ascertain such facts at the first instance. Roman Catholic Bishops of Malolos Inc., vs. IAC finds no application in the case at bar. In said
case, the trial court’s decision, which was reversed by the Court of Appeals, was arrived at after a full blown trial. The same cannot be
said here. What was rendered by the trial court was a summary judgment. No full trial was conducted that would have allowed the
parties to present their respective evidence in support of their contending claims. As previously held by this Court, when the facts as
pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial. 32

In ruling on a motion for summary judgment, the lower court should take that view of the evidence most favorable to the party against
whom it is directed, giving such party the benefit of all favorable inferences. 33

WHEREFORE, the petition is DENIED for lack of merit. The decision of the Court of Appeals is AFFIRMED. No pronouncement as to
costs.

SO ORDERED.

158
Wood Technology Corp. v. Equitable Banking Corp., G.R. No. 153867, [February 17, 2005], 492 PHIL 106-117

G.R. No. 153867 February 17, 2005

WOOD TECHNOLOGY CORPORATION, CHI TIM CORDOVA AND ROBERT TIONG KING

YOUNG, petitioners,
vs.
EQUITABLE BANKING CORPORATION, Respondent.

DECISION

QUISUMBING, J.:

This petition for review seeks to reverse and set aside the Decision1 dated April 11, 2001 of the Court of Appeals in CA-G.R. CV No.
57371 and its Resolution2 dated June 3, 2002 which denied the motion for reconsideration.

The case originated from a Complaint for Sum of Money filed on October 21, 1996, before the Regional Trial Court of Manila, Branch
29, by respondent Equitable Banking Corporation3 against the petitioners, Wood Technology Corporation (WTC), Chi Tim Cordova, and
Robert Tiong King Young.

The Complaint alleged that on December 9, 1994, WTC obtained from respondent a loan in the amount of US$75,000, with 8.75%
interest per annum, as evidenced by a Promissory Note, No. FXBD94-00881, signed by Cordova and Young as representatives of
WTC. Cordova and Young executed a Surety Agreement binding themselves as sureties of WTC for the loan. Respondent bank made
a final demand on April 19, 1996, for WTC to pay its obligation, but petitioners failed to pay. Respondent prayed that petitioners be
ordered to pay it $75,603.65 or P2,018,617.46 (computed as of October 10, 1995) plus interest, penalty, attorney’s fees and other
expenses of litigation; and the cost of suit.

In their Answer, petitioners stated that WTC obtained the $75,000 loan; that Cordova and Young bound themselves as its sureties.
They claimed that only one demand letter, dated April 19, 1996, was made by respondent. They added that the promissory note did not
provide the due date for payment. Petitioners also claimed that the loan had not yet matured as the maturity date was purposely left
blank, to be agreed upon by the parties at a later date. Since no maturity date had been fixed, the filing of the Complaint was
premature, and it failed to state a cause of action. They further claimed that the promissory note and surety agreement were contracts
of adhesion with terms on interest, penalty, charges and attorney’s fees that were excessive, unconscionable and not reflective of the
parties’ real intent. Petitioners prayed for the reformation of the promissory note and surety agreement to make their terms and
conditions fair, just and reasonable. They also asked payment of damages by respondent.

On May 5, 1997, respondent moved for a judgment on the pleadings. The RTC, Branch 29 rendered judgment 4 and disposed as
follows:

WHEREFORE, in view of the foregoing, and to abbreviate this case, judgment is hereby rendered based on the pleading[s] filed by the
opposing parties and the documents annexed thereto. The defendant[s] Wood Technology Corporation, Robert Tiong King Young and
Chi Tim Cordova are hereby ordered to pay solidarily to herein plaintiff the sum of $75,000.00 or its equivalent in Philippine Currency
and to pay the stipulated interest of 8.75% per annum to be reckoned from the date that the obligation was contracted until the filing of
this suit. Thereafter, the legal rate shall apply.

SO ORDERED.

Petitioners appealed, but the Court of Appeals affirmed the RTC’s judgment. The appellate court noted that petitioners admitted the
material allegations of the Complaint, with their admission of the due execution of the promissory note and surety agreement as well as
of the final demand made by the respondent. The appellate court ruled that there was no need to present evidence to prove the
maturity date of the promissory note, since it was payable on demand. In addition, the Court of Appeals held that petitioners failed to
show any ambiguity in the promissory note and surety agreement in support of their contention that these were contracts of adhesion.
Finally, it ruled that the interest rate on the loan was not exorbitant.

The appellate court also denied petitioners’ motion for reconsideration.

Before us, petitioners now raise the following issues:

159
 1. WHETHER OR NOT THE ANSWER OF PETITIONERS WITH SPECIAL AND AFFIRMATIVE DEFENSES FAILS TO
TENDER AN ISSUE OR ADMITS THE MATERIAL ALLEGATIONS IN THE COMPLAINT SO AS TO JUSTIFY THE
RENDITION OF JUDGMENT ON THE PLEADINGS BY TRIAL COURT;

2. WHETHER OR NOT PETITIONERS SHOULD HAVE BEEN GIVEN THE RIGHT TO PRESENT EVIDENCE ON THEIR
SPECIAL AND AFFIRMATIVE DEFENSES;

3. WHETHER OR NOT THE PROMISSORY NOTE IS A CONTRACT OF ADHESION CONTAINING UNREASONABLE

CONDITIONS WHICH PETITIONERS SIGNED WITHOUT REAL FREEDOM OF WILL TO CONTRACT THE OBLIGATIONS
THEREIN; AND

4. WHETHER OR NOT THE FILING OF THE COMPLAINT WAS PREMATURE AND/OR THE COMPLAINT FAIL[ED] TO
STATE A CAUSE OF ACTION.5

Simply put, the basic issue is whether the appellate court erred when it affirmed the RTC’s judgment on the pleadings.

Petitioners argue that a judgment on the pleadings cannot be rendered because their Answer tendered genuine issues and disputed
the material allegations in the Complaint. They claim that they did not totally or unqualifiedly admit all the material allegations in the
Complaint, and that they had alleged special and affirmative defenses. If they were given the chance, they could have presented
witnesses to prove their special and affirmative defenses.6

For its part, respondent Equitable Banking Corporation states that the Court of Appeals was correct in affirming the judgment on the
pleadings granted by the RTC. It adds that petitioners had admitted the material allegations of the Complaint and they did not raise
genuine issues of fact that necessitate submission of evidence. It also contends that the special and affirmative defenses raised by
petitioners concern the proper interpretation of the provisions of the promissory note and surety agreement. Respondent asserts that
these defenses may be resolved based on the pleadings and the applicable laws and jurisprudence, without the need to present
evidence.7 1awphi1.nét

At the outset, we must stress the Court’s policy that cases and controversies should be promptly and expeditiously resolved. The Rules
of Court seeks to shorten the procedure in order to allow the speedy disposition of a case. Specifically, we have rules on demurrer to
evidence, judgment on the pleadings, and summary judgments. In all these instances, a full blown trial is dispensed with and judgment
is rendered on the basis of the pleadings, supporting affidavits, depositions and admissions of the parties. 8

In this case, at issue is the propriety and validity of a judgment on the pleadings. A judgment on the pleadings is proper when an
answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading. 9

Both the RTC and Court of Appeals recognize that issues were raised by petitioners in their Answer before the trial court. This may be
gleaned from their decisions which we partly quote below:

RTC’s ORDER:

...

Defendants raised the following defenses:

a. That the contract is one of adhesion and they were "forced to sign the same";

b. That the interest [8.75% per annum], penalties and fees are unconscionable;

c. That plaintiff’s demand is premature.10

...

Court of Appeals’ DECISION:

. . . They neither raise genuine issues of fact needing submission of evidence. Rather, these issues hoist questions concerning the
proper interpretation of the provisions of the promissory note and the surety agreement… 11 (Emphasis supplied.)

Petitioners also contend that their Answer below raised issues that "are very material and genuine."12 Hence, according to petitioners,
judgment on the pleadings was not proper. Respondent, on the other hand, argues that the special and affirmative defenses raised by
Petitioners are not genuine issues that needed a hearing.13

160
We note now that (1) the RTC knew that the Answer asserted special and affirmative defenses; (2) the Court of Appeals recognized
that certain issues were raised, but they were not genuine issues of fact; (3) petitioners insisted that they raised genuine issues; and (4)
respondent argued that petitioners’ defenses did not tender genuine issues. However, whether or not the issues raised by the Answer
are genuine is not the crux of inquiry in a motion for judgment on the pleadings. It is so only in a motion for summary judgment. 14 In a
case for judgment on the pleadings, the Answer is such that no issue is raised at all. The essential question in such a case is whether
there are issues generated by the pleadings.15 This is the distinction between a proper case of summary judgment, compared to a
proper case for judgment on the pleadings. We have explained this vital distinction in Narra Integrated Corporation v. Court of
Appeals,16 thus,

The existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham or fictitious character, on the other,
are what distinguish a proper case for summary judgment from one for a judgment on the pleadings. In a proper case for judgment on
the pleadings, there is no ostensible issue at all because of the failure of the defending party’s answer to raise an issue. On the other
hand, in the case a of a summary judgment, issues apparently exist¾i.e. facts are asserted in the complaint regarding which there is as
yet no admission, disavowal or qualification; or specific denials or affirmative defenses are in truth set out in the answer¾but the
issues thus arising from the pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions. . . .
(Underscoring and emphasis supplied.)

Indeed, petitioners’ Answer apparently tendered issues. While it admitted that WTC obtained the loan, that Cordova and Young signed
the promissory note and that they bound themselves as sureties for the loan, it also alleged special and affirmative defenses that the
obligation had not matured and that the promissory note and surety agreement were contracts of adhesion.

Applying the requisites of a judgment on the pleadings vis-à-vis a summary judgment, the judgment rendered by the RTC was not a
judgment on the pleadings, but a summary judgment. Although the Answer apparently raised issues, both the RTC and the Court of
Appeals after considering the parties’ pleadings, petitioners’ admissions and the documents attached to the Complaint, found that the
issues are not factual ones requiring trial, nor were they genuine issues.1ªvvphi1.nét

Summary judgment17 is a procedure aimed at weeding out sham claims or defenses at an early stage of the litigation. The proper
inquiry in this regard would be whether the affirmative defenses offered by petitioners constitute genuine issues of fact requiring a full-
blown trial.18 In a summary judgment, the crucial question is: are the issues raised by petitioners not genuine so as to justify a summary
judgment?19 A "genuine issue" means an issue of fact which calls for the presentation of evidence, as distinguished from an issue which
is fictitious or contrived, an issue that does not constitute a genuine issue for trial. 20

We note that this is a case for a sum of money, and petitioners have admitted that they obtained the loan. They also admitted the due
execution of the loan documents and their receipt of the final demand letter made by the respondent. These documents were all
attached to the Complaint. Petitioners merely claimed that the obligation has not matured. Notably, based on the promissory note, the
RTC and the Court of Appeals found this defense not a factual issue for trial, the loan being payable on demand. We are bound by this
factual finding. This Court is not a trier of facts.

When respondent made its demand, in our view, the obligation matured. We agree with both the trial and the appellate courts that this
matter proferred as a defense could be resolved judiciously by plain resort to the stipulations in the promissory note which was already
before the trial court. A full-blown trial to determine the date of maturity of the loan is not necessary. Also, the act of leaving blank the
maturity date of the loan did not necessarily mean that the parties agreed to fix it later. If this was the intention of the parties, they
should have so indicated in the promissory note.l^vvphi1.net They did not show such intention.l^vvphi1.net

Petitioners likewise insist that their defense tendered a genuine issue when they claimed that the loan documents constituted a contract
of adhesion. Significantly, both the trial and appellate courts have already passed upon this contention and properly ruled that it was not
a factual issue for trial. We agree with their ruling that there is no need of trial to resolve this particular line of defense. All that is needed
is a careful perusal of the loan documents. As held by the Court of Appeals, petitioners failed to show any ambiguity in the loan
documents. The rule is that, should there be ambiguities in a contract of adhesion, such ambiguities are to be construed against the
party that prepared it. However, if the stipulations are clear and leave no doubt on the intention of the parties, the literal meaning of its
stipulations must be held controlling.21

In sum, we find no cause to disturb the findings of fact of the Court of Appeals, affirming those of the RTC as to the reasonableness of
the interest rate of 8.75% per annum on the loan. We also find no persuasive reason to contradict the ruling of both courts that the loan
secured by petitioner WTC, with co-petitioners as sureties, was payable on demand. Certainly, respondent’s complaint could not be
considered premature. Nor could it be said to be without sufficient cause of action therein set forth. The judgment rendered by the trial
court is valid as a summary judgment, and its affirmance by the Court of Appeals, as herein clarified, is in order.

WHEREFORE, the Petition is DENIED for lack of merit.

SO ORDERED.

161
Calubaquib v. Republic, G.R. No. 170658, [June 22, 2011],

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 170658 June 22, 2011

ANICETO CALUBAQUIB, WILMA CALUBAQUIB, EDWIN CALUBAQUIB, ALBERTO CALUBAQUIB, and ELEUTERIO FAUSTINO
CALUBAQUIB, Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.

DECISION

DEL CASTILLO, J.:

Due process rights are violated by a motu proprio rendition of a summary judgment.

Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the September 21, 2005
Decision,2 as well as the November 30, 2005 Resolution,3 of the Court of Appeals (CA) in CA-G.R. CV No. 83073. The two issuances of
the appellate court ruled against petitioners and ordered them to reconvey the subject properties to respondent Republic of the
Philippines (Republic). The CA upheld the April 26, 2004 Decision 4 of Branch 1 of the Regional Trial Court (RTC) of Tuguegarao City,
the dispositive portion of which decreed as follows:

WHEREFORE, in the light of the foregoing, the Court declares that the Republic of the Philippines is the owner of that certain property
denominated as Lot No. 2470 of the Cadastral Survey of Tuguegarao with an area of three hundred ninety two thousand nine hundred
ninety six (392,996) square meters which is registered in its name as evidenced by Original Certificate No. 13562, and as such, is
entitled to the possession of the same, and that the defendants illegally occupied a five (5) hectare portion thereof since 1992.

Defendants are then ordered to vacate the portion so occupied by them, and pay to the national government the amount of Five
Thousand Pesos (₱5,000.00) per year of occupancy, from 1992 up to the time the property is vacated by them.

Defendants’ counterclaim is dismissed.

No pronouncement as to cost.

IT IS SO ORDERED.5

Factual Antecedents

On August 17, 1936, President Manuel L. Quezon issued Proclamation No. 80, 6 which declared a 39.3996-hectare landholding located
at Barangay Caggay, Tuguegarao, Cagayan, a military reservation site. The proclamation expressly stated that it was being issued
"subject to private rights, if any there be." Accordingly, the respondent obtained an Original Certificate of Title No. 13562 7 over the
property, which is more particularly described as follows:

A parcel of land (Lot No. 2470 of the Cadastral Survey of Tuguegarao), situated in the barrio of Caggay, Municipality of Tuguegarao.
Bounded on the E. by Lot No. 2594: on the SE, by the Provincial Road: on the SW by Lot Nos. 2539, 2538, and 2535: and on NW, by
Lot Nos. 2534, 2533, 2532, 2478 and 2594.

On January 16, 1995, respondent8 filed before the RTC of Tuguegarao, Cagayan a complaint for recovery of possession 9 against
petitioners alleging that sometime in 1992, petitioners unlawfully entered the military reservation through strategy and stealth and took
possession of a five-hectare portion (subject property) thereof. Petitioners allegedly refused to vacate the subject property despite
repeated demands to do so.10 Thus, respondent prayed that the petitioners be ordered to vacate the subject property and to pay rentals
computed from the time that they unlawfully withheld the same from the respondent until the latter is restored to possession. 11

Petitioners filed an answer denying the allegation that they entered the subject property through stealth and strategy sometime in
1992.12 They maintained that they and their predecessor-in-interest, Antonio Calubaquib (Antonio), have been in open and continuous
possession of the subject property since the early 1900s.13 Their occupation of the subject property led the latter to be known in the

162
area as the Calubaquib Ranch. When Antonio died in 1918, his six children acknowledged inheriting the subject property from him in a
private document entitled Convenio. In 1926, Antonio’s children applied for a homestead patent but the same was not acted upon by
the Bureau of Lands.14 Nevertheless, these children continued cultivating the subject property.

Petitioners acknowledged the issuance of Proclamation No. 80 on August 17, 1936, but maintained that the subject property (the 5-
hectare portion allegedly occupied by them since 1900s) was excluded from its operation. Petitioners cite as their basis a proviso in
Proclamation No. 80, which exempts from the military reservation site "private rights, if any there be." 15 Petitioners prayed for the
dismissal of the complaint against them.

The pre-trial conference conducted on August 21, 1995 yielded the following admissions of fact:

1. Lot No. 2470 of the Tuguegarao Cadastre is a parcel of land situated in Alimanao, Tuguegarao, Cagayan with an area of
392,996 square meters. On August 17, 1936, the President of the Philippines issued Proclamation No. 80 reserving the lot for
military purposes. On the strength of this Proclamation, OCT No. 13562 covering said lot was issued in the name of the
Republic of the Philippines.

2. The defendants are in actual possession of a 5-hectare portion of said property.

3. The Administrator of the Camp Marcelo Adduru Military Reservation demanded the defendants to vacate but they refused.

4. The defendants sought presidential assistance regarding their status on the land covered by the title in the name of the
Republic of the Philippines. The Office of the President has referred the matter to the proper administrative agencies and up to
now there has been no definite action on said request for assistance. 16

Given the trial court’s opinion that the basic facts of the case were undisputed, it advised the parties to file a motion for summary
judgment.17 Neither party filed the motion. In fact, respondent expressed on two occasions 18 its objection to a summary judgment. It
explained that summary judgment is improper given the existence of a genuine and vital factual issue, which is the petitioners’ claim of
ownership over the subject property. It argued that the said issue can only be resolved by trying the case on the merits.

On January 31, 2001, the RTC issued an Order thus:

The Court noticed that the defendants in this case failed to raise any issue. For this reason, a summary judgment is in order.

Let this case be submitted for summary judgment.

SO ORDERED.19

Ruling of the Regional Trial Court20

Subsequently, without any trial, the trial court rendered its April 26, 2004 Decision 21 dismissing petitioners’ claim of possession of the
subject property in the concept of owner. The trial court held that while Proclamation No. 80 recognized and respected the existence of
private rights on the military reservation, petitioners’ position could "not be sustained, as there was no right of [petitioners] to speak of
that was recognized by the government."22

Ruling of the Court of Appeals23

Petitioners appealed24 to the CA, which affirmed the RTC Decision, in this wise:

WHEREFORE, premises considered, the present appeal is hereby DISMISSED for lack of merit. The appealed decision dated April 26,
2004 of the Regional Trial Court of Tuguegarao City, Cagayan Branch 1 in Civil Case No. 4846 is hereby AFFIRMED and
UPHELD.lawphi1

SO ORDERED.25

The CA explained that, in order to segregate the subject property from the mass of public land, it was imperative for petitioners to prove
their and their predecessors-in-interest’s occupation and cultivation of the subject property for more than 30 years prior to the issuance
of the proclamation.26 There must be clear, positive and absolute evidence that they had complied with all the requirements of the law
for confirmation of an imperfect title before the property became a military reservation site. 27 Based on these standards, petitioners
failed to establish any vested right pertaining to them with respect to the subject property. 28 The CA further held that petitioners did not
say what evidence they had of an imperfect title under the Public Land Act. 29

163
The CA denied reconsideration of its Decision, hence petitioners’ appeal to this Court.

Petitioners’ Arguments

Petitioners maintain that the subject property was alienable land when they, through their ancestors, began occupying the same in the
early 1900s. By operation of law, they became owners of the subject parcel of land by extraordinary acquisitive prescription. Thus,
when Proclamation No. 80 declared that "existing private rights, if there be any" are exempt from the military reservation site, the
subject property remained private property of the petitioners.

Petitioners then ask that the case be remanded to the trial court for the reception of evidence. They maintain that the case presents
several factual issues, such as the determination of the nature of the property (whether alienable or inalienable) prior to 1936 and of the
veracity of petitioners’ claim of prior and adverse occupation of the subject property. 30

Respondent’s Arguments

Respondent, through the Office of the Solicitor General, argues that petitioners were not able to prove that they had a vested right to
the subject property prior to the issuance of Proclamation No. 80. As petitioners themselves admit, their application for homestead
patent filed in 1926 was not acted upon, hence they did not acquire any vested right to the subject property. Likewise, petitioners did
not prove their occupation and cultivation of the subject property for more than 30 years prior to August 17, 1936, the date when
Proclamation No. 80 took effect.31

Issue32

The crux of the case is the propriety of rendering a summary judgment.

Our Ruling

The petition has merit.

Summary judgments are proper when, upon motion of the plaintiff or the defendant, the court finds that the answer filed by the
defendant does not tender a genuine issue as to any material fact and that one party is entitled to a judgment as a matter of law. 33 A
deeper understanding of summary judgments is found in Viajar v. Estenzo: 34

Relief by summary judgment is intended to expedite or promptly dispose of cases where the facts appear undisputed and certain from
the pleadings, depositions, admissions and affidavits. But if there be a doubt as to such facts and there be an issue or issues of fact
joined by the parties, neither one of them can pray for a summary judgment. Where the facts pleaded by the parties are disputed or
contested, proceedings for a summary judgment cannot take the place of a trial.

An examination of the Rules will readily show that a summary judgment is by no means a hasty one. It assumes a scrutiny of facts in a
summary hearing after the filing of a motion for summary judgment by one party supported by affidavits, depositions, admissions, or
other documents, with notice upon the adverse party who may file an opposition to the motion supported also by affidavits, depositions,
or other documents x x x. In spite of its expediting character, relief by summary judgment can only be allowed after compliance with the
minimum requirement of vigilance by the court in a summary hearing considering that this remedy is in derogation of a party's right to a
plenary trial of his case. At any rate, a party who moves for summary judgment has the burden of demonstrating clearly the absence of
any genuine issue of fact, or that the issue posed in the complaint is so patently unsubstantial as not to constitute a genuine issue for
trial, and any doubt as to the existence of such an issue is resolved against the movant. 35

"A summary judgment is permitted only if there is no genuine issue as to any material fact and [the] moving party is entitled to a
judgment as a matter of law."36 The test of the propriety of rendering summary judgments is the existence of a genuine issue of
fact,37 "as distinguished from a sham, fictitious, contrived or false claim."38 "[A] factual issue raised by a party is considered as sham
when by its nature it is evident that it cannot be proven or it is such that the party tendering the same has neither any sincere intention
nor adequate evidence to prove it. This usually happens in denials made by defendants merely for the sake of having an issue and
thereby gaining delay, taking advantage of the fact that their answers are not under oath anyway." 39

In determining the genuineness of the issues, and hence the propriety of rendering a summary judgment, the court is obliged to
carefully study and appraise, not the tenor or contents of the pleadings, but the facts alleged under oath by the parties and/or their
witnesses in the affidavits that they submitted with the motion and the corresponding opposition. Thus, it is held that, even if the
pleadings on their face appear to raise issues, a summary judgment is proper so long as "the affidavits, depositions, and admissions
presented by the moving party show that such issues are not genuine." 40

The filing of a motion and the conduct of a hearing on the motion are therefore important because these enable the court to determine if
the parties’ pleadings, affidavits and exhibits in support of, or against, the motion are sufficient to overcome the opposing papers and

164
adequately justify the finding that, as a matter of law, the claim is clearly meritorious or there is no defense to the action. 41 The non-
observance of the procedural requirements of filing a motion and conducting a hearing on the said motion warrants the setting aside of
the summary judgment.42

In the case at bar, the trial court proceeded to render summary judgment with neither of the parties filing a motion therefor. In fact, the
respondent itself filed an opposition when the trial court directed it to file the motion for summary judgment. Respondent insisted that
the case involved a genuine issue of fact. Under these circumstances, it was improper for the trial court to have persisted in rendering
summary judgment. Considering that the remedy of summary judgment is in derogation of a party's right to a plenary trial of his case,
the trial court cannot railroad the parties’ rights over their objections.

More importantly, by proceeding to rule against petitioners without any trial, the trial and appellate courts made a conclusion which was
based merely on an assumption that petitioners’ defense of acquisitive prescription was a sham, and that the ultimate facts pleaded in
their Answer (e.g., open and continuous possession of the property since the early 1900s) cannot be proven at all. This assumption is
as baseless as it is premature and unfair. No reason was given why the said defense and ultimate facts cannot be proven during trial.
The lower courts merely assumed that petitioners would not be able to prove their defense and factual allegations, without first giving
them an opportunity to do so.

It is clear that the guidelines and safeguards for the rendition of a summary judgment were all ignored by the trial court. The sad result
was a judgment based on nothing else but an unwarranted assumption and a violation of petitioners’ due process right to a trial where
they can present their evidence and prove their defense.

WHEREFORE, premises considered, the petition is GRANTED. The April 26, 2004 summary judgment rendered by the Regional Trial
Court of Tuguegarao City, Branch 1, and affirmed by the Court of Appeals, is SET ASIDE. The case is REMANDED to the Regional
Trial Court of Tuguegarao City, Branch 1, for trial. The Presiding Judge is directed to proceed with dispatch.

SO ORDERED.

165
Basbas v. Sayson, G.R. No. 172660, [August 24, 2011]

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 172660 August 24, 2011

EUGENIO BASBAS, TEOFILO ARAS, RUFINO ARAS, GERVACIO BASBAS, ISMAEL ARAS, EUGENIO ARAS, SIMFRONIO
ARAS, FELICIANO ARAS, ROSITA ARAS, EUGENIO BASBAS, JR. and SPOUSES PABLITO BASARTE and MARCELINA
BASBAS BASARTE,
vs.
BEATA SAYSON and ROBERTO SAYSON, JR., Respondents.

DECISION

DEL CASTILLO, J.:

Petitioners seek to prevent the revival of a judgment rendered in favor of the respondents more than two decades back.

This Petition for Review on Certiorari assails the February 17, 2004 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 72385
which denied the appeal filed before it and affirmed in toto the May 21, 2001 Order 2 of the Regional Trial Court of Ormoc City, Branch
35. Also assailed is the April 19, 2006 Resolution3 denying the Motion for Reconsideration thereto.

Factual Antecedents

On September 2, 1976, respondent Beata Sayson (Beata) and her husband Roberto Sayson, Sr. (Roberto Sr.) filed a Petition for
Registration of an agricultural land located in Cagbatang, Balagtas, Matag-ob, Leyte docketed as Land Registration Case No. 0-177.
The said application was opposed by the Republic of the Philippines and herein petitioners Eugenio Basbas (Eugenio Sr.), Teofilo Aras
(Teofilo) and Rufino Aras (Rufino). On March 22, 1979, the Court of First Instance (CFI) of Leyte, Branch V (Ormoc City) rendered a
Decision adjudicating to the spouses Sayson said agricultural land and approving its registration under their names. 4

The oppositors filed their appeal to the CA docketed as CA-G.R. No. 66541. In a Decision 5 dated July 24, 1985, the appellate court
affirmed in toto the Decision of the CFI. This CA Decision became final and executory on August 21, 1985 6 and, accordingly, a Writ of
Possession was issued on November 21, 1985, which was never implemented.

The following year or on September 17, 1986, Original Certificate of Title (OCT) No. 2496 7 was issued to the spouses Sayson pursuant
to the March 22, 1979 CFI Decision. An Alias Writ of Possession was issued on April 6, 1989 but this could also not be implemented in
view of the refusal of Eugenio Sr. and his son Eugenio Basbas, Jr. (Eugenio Jr.). Claiming that the land they occupied is not the same
land subject of the CFI Decision,8 they demanded that a relocation survey be conducted. Hence, a relocation survey was conducted by
order of the Regional Trial Court (RTC), Branch 12, Ormoc City.9

In an Order10 dated September 13, 1989, the RTC approved the Commissioner’s Report 11 on the relocation survey and ordered the
original oppositors, petitioners Eugenio Sr., Teofilo and Rufino, as well as their co-petitioners herein Gervacio Basbas (Gervacio),
Ismael Aras (Ismael), Eugenio Aras (Eugenio), Simfronio Aras (Simfronio), Feliciano Aras (Feliciano), Rosita Aras (Rosita) and Eugenio
Jr. to vacate the subject property, viz:

[R]espondents are directed to vacate the portion of Lot No. 1, Psu-08-000235 covered by OCT No. 2496 and subject of the final decree
of registration which, [up to the] present, said respondents are still possessing pursuant to the final and executory judgment of the Court
of Appeals and as particularly defined in the Commissioner’s report submitted on August 3, 1989 x x x.

Respondents are reminded that under Rule 71 of the New Rules of Court, failure on their part to so obey this order may make them
liable for contempt of this Court.

SO ORDERED.12

Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita and Eugenio Jr., although not oppositors in CA-G.R. No. 66541, were likewise
ordered to vacate the property in view of the following pronouncement in the RTC’s September 13, 1989 Order:

166
It appearing from the records that respondents Eugenio Basbas, Teofilo Aras, Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio
Aras, Simfronio Aras, Feliciano Aras, Rosita Aras and Eugenio Basbas[,] Jr. are parties to the present case, they having been
the principal oppositors to the petition filed by the applicants as shown in the records, pages 34, 35 and 36, Vol. 1 x x
x13 (Emphasis supplied.)

This September 13, 1989 Order was, however, not implemented within the five-year period from the time it became final. 14 Hence,
respondent Beata and her son Roberto Sayson, Jr. (Roberto Jr.), as successor-in-interest of the late Roberto Sr., filed on August 18,
1995 a Complaint for Revival of Judgment15 before the RTC of Ormoc City, Branch 12,16 docketed as Civil Case No. 3312-0. Impleaded
as defendants were Eugenio Sr., Teofilo, Rufino, Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita, and Eugenio Jr. Petitioner-
spouses Pablito Basarte and Marcelina Basbas-Sabarte17 (spouses Basarte), who, although not identified in the September 13, 1989
Order as principal oppositors in the land registration case, were likewise impleaded as defendants since they also allegedly harvested,
processed, and sold the coconuts found in the subject property.

Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita and Eugenio Jr. filed a Motion to Dismiss 18 on the
ground that the Complaint states no cause of action. This was, however, denied 19 so the same set of petitioners, except for Feliciano,
filed an Answer with Counterclaim.20

In their Answer with counterclaim, said petitioners admitted the allegations in paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 of respondents’
Complaint which state that:

xxxx

4. On March 22, 1979, the Honorable Judge Numeriano Estenzo rendered a decision in the above-mentioned Land
Registration [c]ase in favor of the petitioners x x x and against the oppositors, the dispositive portion of said decision reads:

‘WHEREFORE, decision is hereby rendered x x x [and] the land described under Plan PSU-08-000235 dated September 10,
1973 of Geodetic Engineer Nestorio Encenzo already APPROVED by the Acting Regional Director on June 27, 1974 is hereby
adjudicated and registered in the names of the Spouses ROBERTO SAYSON and BEATA O. SAYSON, of legal ages,
Filipinos, spouses and residents of Campokpok, Tabango, Leyte, Philippines and as soon as this decision becomes final, let a
decree of registration be issued by the Land Registration Commission.

SO ORDERED.’ (x x x)

5. From the above decision the oppositors (defendants herein) appealed;

6. On July 24, 1985, the Honorable Court of Appeals rendered its decision, the dispositive portion [of which] reads:

‘WHEREFORE, PREMISES CONSIDERED, finding no merit in this appeal the decision appealed from is hereby
AFFIRMED in toto.

SO ORDERED.’

and the said decision has become final and executory on August 21, 1985 per Entry of Judgment issued by the Court of
Appeals x x x.

7. That consequently, on September 17, 1986 an Original Certificate of Title No. N-2496 was issued in the names of Roberto
Sayson and Beata O. Sayson, pursuant to Decree No. N-191615, by the Register of Deeds for the Province of Leyte;

8. That on motion, the Honorable Court, on November 21, 1985, issued a Writ of Possession which for some reason or
[another] was not satisfied, so that the Honorable Court, on April 7, 1989 – acting on an ex-parte motion dated April 6, 1989 –
directed the issuance of an Alias Writ of Possession;

9. That the Deputy Sheriff of this Court, Mr. Placid[o] Cayco tendered the Alias Writ of Possession to the oppositors,
particularly to Mr. Eugenio Basbas, Sr. and Eugenio Basbas, Jr. who, as the Deputy Sheriff stated in his Progress Report
dated May 18, 1989 ‘did not believe and obey the CFI Decision and the decision of the Court of Appeals’ and ‘x x x [t]hey
demanded a relocation survey to determine the exact location of applicants’ (complainant[s] herein) property described in the
alias writ of possession.’ x x x;

10. That on June 16, 1989, the Honorable Court, acting on the Progress Report of Deputy Sheriff Placido Cayco, issued an
Order on even date appointing Geodetic Engineer Jose A. Tahil as Court Commissioner specifically ‘to relocate Lot No. 1,
Plan Psu-08-000235, LRC No. 0-177, Land Reg. Record No. N51830 x x x’ This Order was dictated in open court in the

167
 presence of Mr. Eugenio Basbas, Sr. and Eugenio Basbas, Jr. who had both objected to the Writ of Possession, and their
counsel Atty. Evargisto Escalon, and Attorney Demetrio D. Sarit, counsel for the applicants. x x x

11. That pursuant to the [O]rder dated June 16, 1989 x x x the Court assigned Commissioner, Engr. Jose A. Tahil, submitted
his report stating that ‘the job assigned to the commissioner was already fully and peacefully accomplished; that his ‘findings
[show] that all points are existing and intact on the field except x x x corner 3 of said lot x x x which at present [is] already
defined and indicated on the ground.’ The commissioner also attached a Sketch Plan of the land to his report. x x x

12. That, finally, the Honorable Court, on September 13, 1989 issued an Order approving the Commissioner’s Report and
further stated:

[R]espondents (defendants herein) are directed to vacate the portion of Lot No. 1, Psu-08-000235 covered by OCT No. 2496 and
subject of final decree of registration which, until [the] present, said respondents are still possessing, pursuant to the final and executory
judgment of the Court of Appeals and as particularly [defined] in the Commissioner’s Report submitted on August 3, 1989 x x x

Respondents are reminded that under Rule 71 of the New Rules of Court, failure on their part to so obey this Order may make them
liable for contempt of this Court.21

However, petitioners admitted but denied in part:

1) paragraphs 2 and 3, insofar as they alleged that they were all oppositors to the land registration case when only Eugenio
Sr., Teofilo and Rufino were the oppositors therein; and

2) paragraph 14, with respect to the allegation on the retirement of the Deputy Sheriff and the heart condition of the Clerk of
Court, for lack of sufficient knowledge and information sufficient to form a belief thereon.

On the other hand, they specifically denied:

1) paragraph 13, on the ground that they have the right of ownership and/or possession over the subject property; and

2) paragraph 15, on the ground that the property they are cultivating is owned by them, hence, respondents cannot suffer
losses and damages.

Paragraphs 2, 3, 13, 14 and 15 alluded to in the foregoing are as follows:

2. All the defendants named above are x x x of legal age and are residents of Balagtas, Matag-ob, Leyte where they may be
served summons and other court processes; while defendant-spouses Pablito Basarte and Marcelina Basbas Basarte were
not named as among the oppositors in the land registration case whose decision is herein sought to be revived, said spouses
are nonetheless participating in the harvest, processing and sale of the coconuts with the other defendants named above;

3. Plaintiffs Beata Sayson and her late husband, Roberto Sayson are petitioners in Land Registration Case No. 0-177 for the
registration of a parcel of agricultural land situated in Barrio Balagtas, Matag-ob, Leyte, filed on September 2, 1976 with the
then Court of First Instance of Leyte, Branch V, Ormoc City. The above-named defendants, namely: Eugenio Basbas, Teofilo
Aras, Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio Aras, Simfronio Aras, Feliciano Aras, Rosita Aras and Eugenio
Basbas, Jr. were oppositors to the application;22

xxxx

13. That despite this admonition in the [September 13, 1989] [O]rder that they could be cited for contempt of Court, the
respondents, defendants herein, had continuously defied the same and this notwithstanding the fact that it was upon their own
demands and insistence that a relocation survey be made on the premises subject of this case before they would obey the
alias writ of possession x x x and that the finding[s] of the Court[-]appointed Commissioner Engr. Jose A. Tahil show that the
oppositors-respondents did [encroach] on the land of plaintiffs herein;

14. That this [September 13, 1989] Order however was not implemented thru a Writ of Execution within the five-year period
from the time the Order became final because of the retirement of Deputy Sheriff Placido Cayco and by reason also of the fact
that the then Clerk of Court, Atty. Constantino A. Trias, Jr. who was also the ex-officio Provincial Sheriff was not physically fit
to hike thru the mountains and hills of Brgy. Balagtas where the property and the defendants therein reside due to his heart
condition;

15. That despite their knowledge of the Court[‘s] [September 13, 1989] Order, the same [having been] dictated in open court,
the respondents had continued to occupy the land of the plaintiffs and for more than five (5) years since this Order for them to
168
 vacate the land in question was issued, they had harvested the coconuts growing thereon and such other produce of the land
herein involved. And until the decision of the Court of Appeals is executed, plaintiff will continue to suffer losses and damages
by reason of defendants’ unlawful occupation and possession and their continued harvesting of the produce of this land of the
herein plaintiffs.23

By way of special and affirmative defenses, said petitioners contended that the Order sought to be revived is not the "judgment"
contemplated under Section 6, Rule 39 of the Rules of Court, hence the action for revival of judgment is improper. Also, except for
Rufino, petitioners averred that they cannot be made parties to the complaint for revival of judgment as they were not parties to the land
registration case. They thus believed that the September 13, 1989 Order sought to be revived is not binding upon them and hence, the
complaint states no cause of action with respect to them. As to the counterclaim, petitioners prayed that respondents pay them moral
and exemplary damages, attorney’s fees and litigation expenses.

Pre-trial conference was thereafter set24 but since not all petitioners were served with summons, this was reset and alias summons was
issued and served upon Simfronio and the spouses Basarte.25 Upon receipt of summons, Simfronio adopted the Answer with
Counterclaim of Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita and Eugenio Jr. 26 while the spouses Basarte filed a Motion to
Dismiss27 on the ground of lack of cause of action. As said motion was also denied, 28 the spouses Basarte later filed a
Manifestation29 that they were also adopting the Answer with Counterclaim filed by Gervacio and the others.

During the pre-trial conference on July 14, 1999, the RTC issued an Order 30 which provides in part, viz:

In today’s pre-trial conference, manifestations and counter-manifestations were exchanged. All the parties and their counsels are
present. x x x [P]laintiffs’ counsel presented a Special Power of Attorney by Beata Sayson but the Court observed that same was not
duly acknowledged before the Philippine Consulate or Embassy in Canada. However, this matter is not so important[.] [W]hen the Court
tried to dig and discuss with the parties on their real positions, it turned out that the plaintiffs are seeking revival of the previous final
judgment, the original parties of which were Eugenio Basbas, Teofilo Aras and Rufino Aras. Eugenio and Teofilo are all dead,
leaving Rufino Aras alive. It is quite complicated considering that in this action, the plaintiffs relied on the Order of this Court
penned by the previous judge dated September 13, 1989 which was made after or consequent to the final judgment
aforementioned, wherein the names of the other defendants were mentioned in the body thereof. After considering the merits
of the various contentions, the Court is of the view that the complaint had to limit itself to the names of the original parties
appearing in the original judgment now being sought for revival. The interest of the plaintiffs in seeking implementation or
execution of the judgment sought to be revived which would involve the other defendants can be taken when the judgment shall have
been revived.

In this connection therefore and as part of the matters to be made part in the pre-trial conference, in the exercise of the authority
granted to it by law, this Court directs the plaintiffs to make the necessary amendment and/or to submit a manifestation first to
this Court on the point above raised regarding amendment of the designation of the parties having in mind the objection of the
defendants who manifested that should there be an amendment, this counter-claim shall be disregarded since they were brought in
unnecessarily in this kind of action.

Plaintiffs therefore are given a period of ten (10) days from today within which to submit the requisite manifestation furnishing copy
thereof to the defendant who upon receipt shall also be given a period of ten (10) days within which this Court will make the necessary
resolution before allowing any amendment.

Hold the pre-trial conference in abeyance.

SO ORDERED. 31 (Emphasis supplied.)

In their Manifestation with Prayer,32 respondents informed the RTC about the death of Eugenio Sr. and Teofilo who were oppositors in
the land registration case and the substitution by their heirs, namely, Gervacio, Marcelina Basbas Basarte, 33 and Eugenio Jr. for
Eugenio Sr. and Ismael, Vicente, Ligaya Aras (Ligaya), Rosendo Aras (Rosendo) and Daina Aras (Daina) for Teofilo. Respondents
prayed that their manifestation be considered for the purpose of determining the proper parties to the case. Despite petitioners’
Counter-Manifestation,34 the RTC issued the following Order35 on May 15, 1999:

The Manifestation of plaintiffs and the Counter-Manifestation of defendants having already been submitted and duly noted, the Court
hereby directs that henceforth in the denomination of this case, the names of the original parties, Eugenio Basbas and Teofilo Aras (in
Land Registration Case No. 0-177) shall still remain to be so stated as defendants for purposes of the present case but with additional
names of their respective heirs to be included and stated immediately after each name as heirs in substitution, namely: for Eugenio
Basbas – 1) Gervacio Basbas, 2) Marcelina Basbas Basarte, and 3) Eugenio Basbas, Jr.; and for Teofilo Aras – 1) Ismael Aras, 2)
Vicente Aras, 3) Ligaya Aras, 4) Rosendo Aras, and 5) Daina Aras.

Since from the records, only Gervacio Basbas, Eugenio Basbas, Jr. and Ismael Aras were duly served with summons, the Branch Clerk
of Court is hereby directed to serve summons on the other heirs, namely: Marcelina Basbas Basarte, Vicente Aras, Ligaya Aras,
Rosendo Aras, and Daina Aras.

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x x x x36

After summons were served, Vicente, Rosendo, Ligaya and Daina were, however, declared in default for not filing any responsive
pleading.37 On February 2, 2001, the RTC issued a Pre-Trial Order38 where the controverted stipulations and issues to be tried, among
others, were enumerated as follows:

Controverted Stipulations:

1. That defendants are not enjoying the produce of the land because there are period[s] wherein the fruits were subject of theft
and the same is now pending at the Municipal Trial Court of Matag-ob;

2. That [even] before the start of the original case, the original defendants referring to the late Eugenio Basbas, Sr. and Teofilo
Aras, [and] Rufino Aras were occupying the property and they were succeeded by the respective heirs of the deceased
Eugenio Basbas, Sr. and Teofilo Aras [sic];

3. That plaintiff Teofilo Aras, Sr. has a daughter named Fedeliza Aras;

Issues

1. Whether x x x the plaintiffs are entitled to revival of judgment in the earlier [land registration] case;

2. Whether x x x the defendants except for defendant Rufino Aras are the proper parties in the present action;

3. Whether x x x the complaint states a cause of action;

4. Whether x x x defendants are entitled to their counterclaim, and;

5. Whether judgment on the pleadings is allowed or is tenable. 39

Respondents subsequently filed an Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment. 40 They contended that
since petitioners’ Answer failed to tender an issue, they having expressly admitted the material allegations in the complaint, particularly
paragraphs 4 to 12, a judgment on the pleadings or summary judgment is proper.

Petitioners filed an Opposition Re: Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment and Memorandum Re:
Failure of Plaintiff Beata Sayson to Appear in the Pre-trial Conference. 41 They argued that the case cannot be decided based on the
pleadings nor through summary judgment considering that the controverted stipulations and issues defined in the Pre-Trial Order must
be proven by evidence. In addition, they questioned the Special Power of Attorney (SPA) executed by Beata in Canada empowering
her son Roberto Jr. to appear on her behalf in the pre-trial conference. They argued that since said SPA has not been authenticated by
a Philippine Consulate official, it is not sufficient authorization and hence, Beata cannot be considered to have attended the pre-trial
conference. The case must, therefore, be dismissed insofar as she is concerned.

Ruling of the Regional Trial Court

In resolving respondents’ Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment, the RTC found that petitioners’
Answer does not essentially tender an issue since the material allegations of the Complaint were admitted. Hence, said court issued an
Order42 dated May 21, 2001, the dispositive portion of which reads:

Wherefore, finding merit in the motion, judgment is hereby rendered for and in favor of the plaintiffs and against the defendants ordering
the revival of the decision of the Court of Appeals promulgated on July 24, 1985 affirming the decree of registration of this Court in the
decision of the Land Registration Case No. 0-177 dated March 22, 1979, and of the final Order of this Court dated September 13, 1989
and upon finality of this Order, ordering the issuance of Writ of Possession for the lot made subject of the decision. Without
pronouncement as to costs.

SO ORDERED.43

Petitioners thus filed a Notice of Appeal44 which was approved in an Order dated June 06, 2001.45

Ruling of the Court of Appeals

Finding no merit in the appeal, the CA denied the same in a Decision 46 dated February 17, 2004. It noted that petitioners’ Answer
admitted almost all of the allegations in respondents’ complaint. Hence, the RTC committed no reversible error when it granted
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respondents’ Motion for Judgment on the Pleadings and/or Summary Judgment. The appellate court likewise found untenable the issue
as regards the failure of the complaint to state a cause of action. To the appellate court, petitioners’ refusal to vacate the subject
property despite the final and executory Decision of the CA in the land registration case and the September 13, 1989 Order of the RTC
for them to vacate the same, clearly support respondents’ cause of action against them. Also contrary to petitioners’ posture, the
September 13, 1989 Order is a final order as it finally disposed of the controversy between the parties in the land registration case. The
CA likewise found the SPA executed by Beata in favor of Roberto Jr. as valid, hence, she was duly represented during the pre-trial
conference. The dispositive portion of said CA Decision reads:

WHEREFORE, premises considered, the present appeal is DENIED. The May 21, 2001 Decision of the Regional Trial Court of Ormoc
City, Branch 35 is AFFIRMED.

SO ORDERED.47

Their Motion for Reconsideration48 having been denied in a Resolution49 dated April 19, 2006, petitioners are now before this Court
through the present Petition for Review on Certiorari.

Issues

Petitioners impute upon the CA the following errors:

1. The Honorable Court of Appeals clearly committed serious errors of law in its decision and Resolution dated February 17,
2004 and April 19, 2006 when it affirmed the Order of the Regional Trial Court dated May 21, 2001 and declared that no
reversible error was committed by the Regional Trial Court of Ormoc City in granting respondents’ motion for judgment on the
pleadings and/or summary judgment;

2. The Honorable Court of Appeals clearly committed serious errors of law in its Decision and Resolution dated February 17,
2004 and April 19, 2006 when it affirmed the Order of the Regional Trial Court of Ormoc City dated May 21, 2001 and declared
that petitioners’ argument that respondents’ complaint failed to state a cause of action has no merit.

3. The Honorable Court of Appeals clearly committed serious errors of law when it affirmed the Order of the Regional Trial
Court of Ormoc City which ordered the revival of the Judgment of this Court of Appeals in CA-G.R. No. 66541 entitled Beata
Sayson and Roberto Sayson vs. Eugenio Basbas, et al., despite the fact that this was not the judgment sought to be revived in
Civil Case No. 3312-0;

4. The Honorable Court of Appeals clearly committed serious errors of law in ruling that the duly notarized Special Power of
Attorney in favor of Roberto Sayson[,] Jr. is valid and the latter is authorized to represent his mother, Beata Sayson[,] which is
contrary to the ruling in the case of ANGELITA LOPEZ, represented by PRISCILLA L. TY vs. COURT OF APPEALS,
REGIONAL TRIAL COURT OF QUEZON CITY x x x (G.R. No. 77008, December 29, 1987). 50

The Parties’ Arguments

Petitioners insist that a judgment on the pleadings or a summary judgment

is not proper in this case since the controverted stipulations and the first three issues enumerated in the pre-trial order involve facts
which must be threshed out during trial. They also claim that the Complaint for Revival of Judgment states no cause of action because
the September 13, 1989 Order which it sought to revive is not the "judgment" contemplated under Section 6, Rule 39 of the Rules of
Court and, therefore, cannot be the subject of such an action. Moreover, they argue that the CA Decision in the land registration case
should not have been revived as same was not prayed for in the Complaint for Revival of Judgment. Lastly, petitioners assail the SPA
which authorized Roberto Jr. to represent his mother, Beata, during the pre-trial conference, it not having been authenticated by a
Philippine consulate officer in Canada where it was executed. Citing Lopez v. Court of Appeals,51 they contend that said document
cannot be admitted in evidence and hence, Beata was not duly represented during said pre-trial conference. The case, therefore,
should have been dismissed insofar as she is concerned.

For their part, respondents point out that the RTC’s basis in granting the Motion for Judgment on the Pleadings and/or Summary
Judgment was petitioners’ admission of practically all the material allegations in the complaint. They aver that Section 1, Rule 34 of the
Rules of Court clearly provides that where an answer fails to tender an issue or otherwise admits the material allegations of the adverse
party’s pleading, the court may, on motion of that party, direct judgment on the pleadings. Also, the test for a motion for summary
judgment is whether the pleadings, affidavits or exhibits in support of the motion are sufficient to overcome the opposing papers and to
justify a finding as a matter of law that there is no defense to the action or the claim is clearly meritorious. And since, as found by the
CA, petitioners’ Answer did not tender an issue and that there is no defense to the action, the grant of the Motion for Judgment on the
Pleadings and/or Summary Judgment was appropriate. Respondents likewise contend that if their prayer in the Complaint is taken in its
proper context, it can be deduced that what they were really seeking is the implementation of the CA Decision dated July 24, 1985 and
the orders ancillary thereto. With respect to the SPA, they submit that the law does not require that a power of attorney be notarized.

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Moreover, Section 4, Rule 18 of the Rules of Court simply requires that a representative appear fully authorized "in writing". It does not
specify a particular form of authority.

Our Ruling

There is no merit in the petition.

I. The instant case is proper for the rendition of a summary judgment.

Petitioners principally assail the CA’s affirmance of the RTC’s Order granting respondents’ Motion for Judgment on the Pleadings
and/or Summary Judgment.

In Tan v. De la Vega,52 citing Narra Integrated Corporation v. Court of Appeals,53 the court distinguished summary judgment from
judgment on the pleadings, viz:

The existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham or fictitious character, on the other,
are what distinguish a proper case for summary judgment from one for a judgment on the pleadings. In a proper case for judgment on
the pleadings, there is no ostensible issue at all because of the failure of the defending party’s answer to raise an issue. On the other
hand, in the case of a summary judgment, issues apparently exist – i.e. facts are asserted in the complaint regarding which there is as
yet no admission, disavowal or qualification; or specific denials or affirmative defenses are in truth set out in the answer – but the issues
thus arising from the pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions. x x x.

Simply stated, what distinguishes a judgment on the pleadings from a summary judgment is the presence of issues in the Answer to the
Complaint. When the Answer fails to tender any issue, that is, if it does not deny the material allegations in the complaint or admits said
material allegations of the adverse party’s pleadings by admitting the truthfulness thereof and/or omitting to deal with them at all, a
judgment on the pleadings is appropriate.54 On the other hand, when the Answer specifically denies the material averments of the
complaint or asserts affirmative defenses, or in other words raises an issue, a summary judgment is proper provided that the issue
raised is not genuine. "A ‘genuine issue’ means an issue of fact which calls for the presentation of evidence, as distinguished from an
issue which is fictitious or contrived or which does not constitute a genuine issue for trial." 55

a) Judgment on the pleadings is not proper because petitioners’ Answer tendered issues.

In this case, we note that while petitioners’ Answer to respondents’ Complaint practically admitted all the material allegations therein, it
nevertheless asserts the affirmative defenses that the action for revival of judgment is not the proper action and that petitioners are not
the proper parties. As issues obviously arise from these affirmative defenses, a judgment on the pleadings is clearly improper in this
case.

However, before we consider this case appropriate for the rendition of summary judgment, an examination of the issues raised, that is,
whether they are genuine issues or not, should first be made.

b) The issues raised are not genuine issues, hence rendition of summary judgment is proper.

To resolve the issues of whether a revival of judgment is the proper action and whether respondents are the proper parties thereto, the
RTC merely needed to examine the following: 1) the RTC Order dated September 13, 1989, to determine whether same is a judgment
or final order contemplated under Section 6, Rule 39 of the Rules of Court; and, 2) the pleadings of the parties and pertinent portions of
the records56 showing, among others, who among the respondents were oppositors to the land registration case, the heirs of such
oppositors and the present occupants of the property. Plainly, these issues could be readily resolved based on the facts established by
the pleadings. A full-blown trial on these issues will only entail waste of time and resources as they are clearly not genuine issues
requiring presentation of evidence.

Petitioners aver that the RTC should not have granted respondents’ Motion for Judgment on the Pleadings and/or Summary Judgment
because of the controverted stipulations and the first three issues enumerated in the Pre-trial Order, which, according to them, require
the presentation of evidence. These stipulations and issues, however, when examined, basically boil down to questions relating to the
propriety of the action resorted to by respondents, which is revival of judgment, and to the proper parties thereto – the same questions
which we have earlier declared as not constituting genuine issues.

In sum, this Court holds that the instant case is proper for the rendition of a summary judgment, hence, the CA committed no error in
affirming the May 21, 2001 Order of the RTC granting respondents’ Motion for Judgment on the Pleadings and/or Summary Judgment.

II. The Complaint states a cause of action.

Petitioners contend that the complaint states no cause of action since the

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September 13, 1989 Order sought to be revived is not the judgment contemplated under Section 6, Rule 39 of the Rules of Court. They
also aver that the RTC erred when it ordered the revival not only of the September 13, 1989 Order but also of the July 24, 1985 CA
Decision, when what was prayed for in the complaint was only the revival of the former.

This Court, however, agrees with respondents that these matters have already been sufficiently addressed by the RTC in its Order of
May 9, 199757 and we quote with approval, viz:

The body of the Complaint as well as the prayer mentioned about the executory decision of the Court of Appeals promulgated on July
24, 1985 that had to be finally implemented. So it appears to this Court that the Complaint does not alone invoke or use as subject
thereof the Order of this Court which would implement the decision or judgment regarding the land in question. The Rules of Court
referring to the execution of judgment, particularly Rule 39, Sec. 6, provides a mechanism by which the judgment that had not been
enforced within five (5) years from the date of its entry or from the date the said judgment has become final and executory could be
enforced. In fact, the rule states: "…judgment may be enforced by action."

So in this Complaint, what is sought is the enforcement of a judgment and the Order of this Court dated September 13, 1989 is part of
the process to enforce that judgment. To the mind of the Court, therefore, the Complaint sufficiently states a cause of action. 58 lawphi1

III. Any perceived defect in the SPA would not serve to bar the case from proceeding.

Anent the SPA, we find that given the particular circumstances in the case at bar, an SPA is not even necessary such that its efficacy or
the lack of it would not in any way preclude the case from proceeding. This is because upon Roberto Sr.’s death, Roberto Jr., in
succession of his father, became a co-owner of the subject property together with his mother, Beata. As a co-owner, he may, by himself
alone, bring an action for the recovery of the co-owned property pursuant to the well-settled principle that "in a co-ownership, co-owners
may bring actions for the recovery of co-owned property without the necessity of joining all the other co-owners as co-plaintiffs because
the suit is presumed to have been filed for the benefit of his co-owners." 59

While we note that the present action for revival of judgment is not an action for recovery, the September 13, 1989 Order sought to be
revived herein ordered the petitioners, among others, to vacate the subject property pursuant to the final and executory judgment of the
CA affirming the CFI’s adjudication of the same in favor of respondents. This Order was issued after the failure to enforce the writ of
execution and alias writ of execution due to petitioners’ refusal to vacate the property. To this Court’s mind, respondents’ purpose in
instituting the present action is not only to have the CA Decision in the land registration case finally implemented but ultimately, to
recover possession thereof from petitioners. This action is therefore one which Roberto Jr., as co-owner, can bring and prosecute
alone, on his own behalf and on behalf of his co-owner, Beata. Hence, a dismissal of the case with respect to Beata pursuant to Sec.
5,60 Rule 18 of the Rules of Court will be futile as the case could nevertheless be continued by Roberto Jr. in behalf of the two of them.

WHEREFORE, the Petition for Review on Certiorari is DENIED and the assailed Decision of the Court of Appeals dated February 17,
2004 and Resolution dated April 19, 2006 in CA-G.R. CV No. 72385 are AFFIRMED.

SO ORDERED.

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Pepsi-Cola Products Philippines, Inc. v. Isabela Leaf Tobacco Co., Inc., G.R. No. 237840, [June 10, 2019]

G.R. No. 237840. June 10, 2019

PEPSI-COLA PRODUCTS PHILIPPINES, INC., petitioner, vs. ISABELA LEAF TOBACCO CO., INC., respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated 10 June 2019 which reads as follows:

"G.R. No. 237840 PEPSI-COLA PRODUCTS PHILIPPINES, INC., petitioner, versus ISABELA LEAF TOBACCO CO.,
INC., respondent.

This is a petition for review on certiorari (Petition) under Rule 45 of the Rules of Court assailing the Decision dated September 29, 2017
and the Resolution dated February 19, 2018 of the Court of Appeals (CA) in CA-G.R. CV No. 106827. The CA Decision affirmed the
Order dated July 22, 2015 of the Regional Trial Court of Cauayan City, Isabela, Branch 19 (RTC), granting respondent's Motion for
Judgment on the Pleadings (Motion), declaring the pre-termination of the Warehouse Lease Agreement (Agreement) invalid, and
ordering Pepsi-Cola Products Philippines, Inc. (petitioner) to pay monthly rentals in the total amount of P1,765,500.00 and attorney's
fees and costs of suit in the amount of P30,000.00.

The Facts and Antecedent Proceedings

The facts, as discussed by the CA, are summarized as follows:

Lessor, Isabela Leaf Tobacco Co., Inc. (respondent), and lessee, petitioner, entered into an Agreement for the use of the 2,447-square
meter property in Cauayan, Isabela for a period of two years, from February 2013 to January 2015. The Agreement contained a pre-
termination clause, which stated:

11.wxwxShould the LESSEE be prevented from profitably pursuing its warehouse operations by reason of government restrictions,
sudden change in business trends, operational restraints and other similar causes, it may upon thirty (30) days prior written notice to
the LESSOR, terminate the Agreement.

On November 14, 2013, respondent received a Notice of Pre-Termination dated August 15, 2013, which stated that petitioner was pre-
terminating the Agreement due to "changes in doing business for which your current warehouse could not accommodate."

On November 18, 2013, respondent informed petitioner that its ground for pre-termination was not among those stipulated under the
Agreement and demanded that the latter comply with its contractual obligations.

In a letter dated February 5, 2014, petitioner responded that the Agreement gave it the right to pre-terminate the contract by reason of
"sudden change in business trends, operational restraints, and under similar causes."

Hence, respondent filed a Complaint for breach of contract and damages. In its Answer, petitioner alleged that "it urgently needed a
larger warehouse in light of business developments and fast growth x x x since respondent's warehouse could not accommodate the
additional space required, it was forced to pre-terminate the lease agreement pursuant to Section 11 thereof."

After pre-trial on May 15, 2015, respondent filed a Motion, alleging that "the only issue left for determination is whether or not petitioner
may validly pre-terminate the lease agreement." In its Opposition, petitioner argued that "a trial on the merits should be conducted to
prove that there will be no growth for petitioner should it continue to occupy and lease respondent's warehouse."

In an Order dated July 22, 2015, the RTC granted respondent's Motion, declared the pre-termination invalid, and ordered petitioner to
pay monthly rentals in the total amount of P1,765,500.00 and attorney's fees and costs of suit in the amount of P30,000.00.

On appeal, the CA sustained petitioner's position that a Judgment on the Pleadings under Rule 34 of the Rules of Court (Rules) was
improper as petitioner's Answer raised an affirmative defense. Nevertheless, the CA refused to remand the case for further proceedings
and held that the primary issue, i.e., whether or not petitioner's ground for pre-terminating the Agreement fell within the allowable
grounds under Section 11, was "purely legal in nature" and could be resolved "without the need for a full-blown trial." The CA thus
treated the RTC's Order as a Summary Judgment under Rule 35 of the Rules and held that "there was no genuine issue as to any
pertinent fact which would warrant the presentation of evidence."

In resolving the supposedly "purely legal" issue, the CA affirmed the RTC's ruling and held that petitioner could not validly pre-terminate
the Agreement under Section 11 on the ground that petitioner "needed a larger warehouse space in light of their recent business
developments and fast growing trend in their business" and that respondent's "warehouse x x x could not accommodate the required
additional space." The CA explained that petitioner's reasons did not fall within the context of "government restrictions, operational
restraints, or sudden changes in business trends, or for that matter, other similar causes." Further, the CA held that petitioner could not
have been prevented from profitably pursuing its warehouse business because its need for additional space presumably shows that its

174
business generated more revenues than projected. The CA held that if petitioner truly needed additional space, it could have leased
another warehouse in addition to the subject premises.

Petitioner thus filed the instant petition, alleging, among others, that the CA erred in: 1) applying the Rule on Summary Judgment,
considering that the issues were not purely legal in nature; and 2) ruling that the need for additional warehouse space did not fall within
the context of "government restrictions, sudden changes in business trends, operational restraints, and other similar causes."

Issue

The main issue in the case at bar is whether the CA erred in refusing to remand the case for trial on the merits and treating the RTC's
Judgment on the Pleadings under Rule 34 as a Summary Judgment under Rule 35 of the Rules of Court.

The Court's Ruling

The Petition has merit.

In Basbas v. Sayson, the Court explained the difference between a judgment on the pleadings and a summary judgment, viz.:

Simply stated, what distinguishes a judgment on the pleadings from a summary judgment is the presence of issues in the Answer to the
Complaint. When the Answer fails to tender any issue, that is, if it does not deny the material allegations in the complaint or admits said
material allegations of the adverse party's pleadings by admitting the truthfulness thereof and/or omitting to deal with them at all, a
judgment on the pleadings is appropriate. On the other hand, when the Answer specifically denies the material averments of the
complaint or asserts affirmative defenses, or in other words raises an issue, a summary judgment is proper provided that the issue
raised is not genuine. "A 'genuine issue' means an issue of fact which calls for the presentation of evidence, as distinguished from an
issue which is fictitious or contrived or which does not constitute a genuine issue for trial."

While the CA correctly held that a Judgment on the Pleadings was not proper given that petitioner's Answer raised an affirmative
defense, i.e., that its reason for pre-terminating the lease was allowed under Section 11 of the Agreement, the CA committed reversible
error when it nevertheless proceeded to decide the case under Rule 35 or the Rules on Summary Judgment. D.M. Consunji, Inc. v.
Duvaz Corp. explains the nature of Summary Judgments in this wise:

In Solidbank Corp. v. CA, the Court, explaining when summary judgment may be allowed, wrote:

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays. When the
pleadings on file show that there are no genuine issues of fact to be tried, the Rules of Court allows a party to obtain immediate relief by
way of summary judgment. That is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the
law to the material facts.

Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A "genuine issue" is such issue of fact which
requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim.

Rule 34, Section 3 of the Rules of Court provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine
issue as to any material fact, except for the amount of damages; and (2) the party presenting the motion for summary judgment must be
entitled to a judgment as a matter of law.

...

From the foregoing provisions and pronouncements, it is clear that summary or accelerated judgment is proper only when, based on
the pleadings, depositions, and admissions on file, and after hearing, it is shown that save as to the amount of damages, there is no
veritable issue regarding any material fact in the action and the movant is entitled to judgment as a matter of law. Conversely, where the
pleadings tender an issue, that is, an issue of fact the resolution of which calls for a presentation of evidence, as distinguished from an
issue which is sham or contrived, summary judgment is not proper.

Applying the foregoing principles to the instant case, there can be no doubt that summary judgment is not proper as the case involves
genuine issues of fact. To reiterate, Section 11 of the Agreement pertinently provides:

11. Should the LESSEE be prevented from profitably pursuing its warehouse operations by reason of government restrictions, sudden
change in business trends, operational restraints and other similar causes, it may upon thirty (30) days prior written notice to
the LESSOR, terminate the Agreement.

A plain reading of the foregoing stipulation shows that petitioner's need for additional space for the conduct of its operations certainly
falls within the ambit of "operational restraints" and/or "changes in business trends" and would be a valid ground for the pre-termination
of the lease if petitioner can prove that: 1) it was prevented from profitably pursuing its warehouse operations and 2) it gave the
respondent-lessor written notice thereof at least 30 days prior to termination. Said conditions are undoubtedly issues of fact that require
the presentation of evidence.

Also, a determination of the extent of breach, if any, whether substantial or casual, is a factual issue that needs to be addressed before
the court can award damages caused by petitioner's pre-termination, should the same be deemed unwarranted.

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Contrary to respondent's argument that the issue of whether the pre-termination was justified is purely legal, the Court finds that the
validity of the pre-termination raises genuine issues of fact which may only be resolved after trial on the merits. Respondent admitted as
much when it alleged in its Motion that "granting, without admitting, that petitioner needs a larger warehouse, defendant was not able
to show proof that it was PREVENTED from profitably pursuing its warehouse operation."

There is likewise no basis for the CA to assume that the need for additional space belied petitioner's claim that it was prevented from
profitably pursuing its operations (and that in fact, petitioner's business generated more revenues than projected). The applicable
ground for termination and its resulting effect on petitioner's profitability are factual defenses which may only be established with
evidence presented at trial. In the same manner, the Agreement could not be deemed a contract of adhesion, without the presentation
of evidence on the circumstances surrounding the execution of the contract or the relative position of the parties. Based on the
foregoing, the CA committed reversible error in treating the RTC's Judgment on the Pleadings as a Summary Judgment and in
proceeding to resolve the substantive issues without a trial.

In view of the foregoing, the instant case must be remanded to the RTC for the presentation of evidence on respondent's claims and
petitioner's defenses. The RTC would, after trial on the merits, be in a better position to resolve all other issues raised in the Petition,
such as whether the agreement was a contract of adhesion, whether petitioner breached the contract, and whether the petitioner is
liable for damages and the amount thereof.

WHEREFORE, the Petition is GRANTED. The Decision dated September 29, 2017 and the Resolution dated February 19, 2018 in CA-
G.R. CV No. 106827 of the Court of Appeals are hereby REVERSED and SET ASIDE. The case is accordingly remanded to the
Regional Trial Court for trial on the merits.

SO ORDERED. (J. REYES, JR., J., on leave)"

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