I.

THE LAW

1.
G.R. No. L-63915 April 24, 1985
LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR
BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN
VENUS, in his capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA
CRUZ, in his capacity as Director, Malacaang Records Office, and FLORENDO S. PABLO, in his
capacity as Director, Bureau of Printing, respondents.

ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article
IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and enforceable must be
published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to
compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various
presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of
implementation and administrative orders.
Specifically, the publication of the following presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286,
298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445,
447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731,
733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165,
1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826,
1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161,
173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239,
241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303,
309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405,
438-440, 444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609,
610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940,
964,997,1149-1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535,
1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 16301649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754,
1762, 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826,
1829, 1831-1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866,
1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984,
1986-2028, 2030-2044, 2046-2145, 2147-2161, 2163-2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507, 509-510,
522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594,
598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95,
107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have this case dismissed outright on the ground that
petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the
absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged nonpublication of the presidential issuances in question 2 said petitioners are without the requisite legal personality
to institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning of Section 3,
Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.When any tribunal, corporation, board or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from an
office, trust, or station, or unlawfully excludes another from the use a rd enjoyment of a right or
office to which such other is entitled, and there is no other plain, speedy and adequate remedy in
the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper
court alleging the facts with certainty and praying that judgment be rendered commanding the
defendant, immediately or at some other specified time, to do the act required to be done to
Protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason
of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its
object is to compel the performance of a public duty, they need not show any specific interest for their petition
to be given due course.
The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor
General, 3 this Court held that while the general rule is that "a writ of mandamus would be granted to a private
individual only in those cases where he has some private or particular interest to be subserved, or some
particular right to be protected, independent of that which he holds with the public at large," and "it is for the
public officers exclusively to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen,
79 M.e., 469]," nevertheless, "when the question is one of public right and the object of the mandamus is to
procure the enforcement of a public duty, the people are regarded as the real party in interest and the relator at
whose instigation the proceedings are instituted need not show that he has any legal or special interest in the
result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws [High,
Extraordinary Legal Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the
mandamus proceedings brought to compel the Governor General to call a special election for the position of
municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent
said:
We are therefore of the opinion that the weight of authority supports the proposition that the
relator is a proper party to proceedings of this character when a public right is sought to be
enforced. If the general rule in America were otherwise, we think that it would not be applicable
to the case at bar for the reason 'that it is always dangerous to apply a general rule to a particular
case without keeping in mind the reason for the rule, because, if under the particular

circumstances the reason for the rule does not exist, the rule itself is not applicable and reliance
upon the rule may well lead to error'
No reason exists in the case at bar for applying the general rule insisted upon by counsel for the
respondent. The circumstances which surround this case are different from those in the United
States, inasmuch as if the relator is not a proper party to these proceedings no other person could
be, as we have seen that it is not the duty of the law officer of the Government to appear and
represent the people in cases of this character.
The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case
apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public
right recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute this
proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering that the
Solicitor General, the government officer generally empowered to represent the people, has entered his
appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the
effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that
since the presidential issuances in question contain special provisions as to the date they are to take effect,
publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on
Article 2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen days following the completion of their publication in
the Official Gazette, unless it is otherwise provided, ...
The interpretation given by respondent is in accord with this Court's construction of said article. In a long line
of decisions, 4 this Court has ruled that publication in the Official Gazette is necessary in those cases where the
legislation itself does not provide for its effectivity date-for then the date of publication is material for
determining its date of effectivity, which is the fifteenth day following its publication-but not when the law
itself provides for the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the
fact of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is
easily reached that said Article 2 does not preclude the requirement of publication in the Official Gazette, even
if the law itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as
follows:
Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and
resolutions of a public nature of the, Congress of the Philippines; [2] all executive and
administrative orders and proclamations, except such as have no general applicability; [3]
decisions or abstracts of decisions of the Supreme Court and the Court of Appeals as may be
deemed by said courts of sufficient importance to be so published; [4] such documents or classes
of documents as may be required so to be published by law; and [5] such documents or classes of
documents as the President of the Philippines shall determine from time to time to have general
applicability and legal effect, or which he may authorize so to be published. ...
The clear object of the above-quoted provision is to give the general public adequate notice of the various laws
which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be
no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to
punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not
even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital
significance that at this time when the people have bestowed upon the President a power heretofore enjoyed
solely by the legislature. While the people are kept abreast by the mass media of the debates and deliberations in
the Batasan Pambansaand for the diligent ones, ready access to the legislative recordsno such publicity
accompanies the law-making process of the President. Thus, without publication, the people have no means of
knowing what presidential decrees have actually been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la
denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones,
Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno en uso de su potestad. 5
The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official
Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty
must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be
given substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such
listing, to our mind, leaves respondents with no discretion whatsoever as to what must be included or excluded
from such publication.
The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by
law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or
otherwise impose a burden or. the people, such as tax and revenue measures, fall within this category. Other
presidential issuances which apply only to particular persons or class of persons such as administrative and
executive orders need not be published on the assumption that they have been circularized to all concerned. 6
It is needless to add that the publication of presidential issuances "of a public nature" or "of general
applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he
must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta
vs. COMELEC 7:
In a time of proliferating decrees, orders and letters of instructions which all form part of the law
of the land, the requirement of due process and the Rule of Law demand that the Official Gazette
as the official government repository promulgate and publish the texts of all such decrees, orders
and instructions so that the people may know where to obtain their official and specific contents.
The Court therefore declares that presidential issuances of general application, which have not been published,
shall have no force and effect. Some members of the Court, quite apprehensive about the possible unsettling
effect this decision might have on acts done in reliance of the validity of those presidential decrees which were
published only during the pendency of this petition, have put the question as to whether the Court's declaration
of invalidity apply to P.D.s which had been enforced or implemented prior to their publication. The answer is all
too familiar. In similar situations in the past this Court had taken the pragmatic and realistic course set forth
in Chicot County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that the Act of Congress, having been found to
be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no
duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118
U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however,
that such broad statements as to the effect of a determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute, prior to such a determination, is an
operative fact and may have consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects-with respect to particular conduct,
private and official. Questions of rights claimed to have become vested, of status, of prior
determinations deemed to have finality and acted upon accordingly, of public policy in the light

of the nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of courts, state
and federal and it is manifest from numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.
Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party under the
Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this
Court.
Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official
Gazette is "an operative fact which may have consequences which cannot be justly ignored. The past cannot
always be erased by a new judicial declaration ... that an all-inclusive statement of a principle of absolute
retroactive invalidity cannot be justified."
From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought
by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive,
1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the subject matters nor the texts of
these PDs can be ascertained since no copies thereof are available. But whatever their subject matter may be, it
is undisputed that none of these unpublished PDs has ever been implemented or enforced by the government.
In Pesigan vs. Angeles, 11 the Court, through Justice Ramon Aquino, ruled that "publication is necessary to
apprise the public of the contents of [penal] regulations and make the said penalties binding on the persons
affected thereby. " The cogency of this holding is apparently recognized by respondent officials considering the
manifestation in their comment that "the government, as a matter of policy, refrains from prosecuting violations
of criminal laws until the same shall have been published in the Official Gazette or in some other publication,
even though some criminal laws provide that they shall take effect immediately.
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished
presidential issuances which are of general application, and unless so published, they shall have no binding
force and effect.
SO ORDERED.
2.
[G.R. No. 149454. May 28, 2004]
BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. CASA MONTESSORI INTERNATIONALE and
LEONARDO T. YABUT, respondents.
[G.R. No. 149507. May 28, 2004]
CASA MONTESSORI INTERNATIONALE, petitioner, vs. BANK OF THE PHILIPPINE
ISLANDS, respondent.
DECISION
PANGANIBAN, J.:
By the nature of its functions, a bank is required to take meticulous care of the deposits of its clients, who
have the right to expect high standards of integrity and performance from it. Among its obligations in
furtherance thereof is knowing the signatures of its clients. Depositors are not estopped from questioning
wrongful withdrawals, even if they have failed to question those errors in the statements sent by the bank to
them for verification.

The Case
Before us are two Petitions for Review[1] under Rule 45 of the Rules of Court, assailing the March 23,
2001 Decision[2] and the August 17, 2001 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No.
63561. The decretal portion of the assailed Decision reads as follows:
WHEREFORE, upon the premises, the decision appealed from is AFFIRMED with the modification that
defendant bank [Bank of the Philippine Islands (BPI)] is held liable only for one-half of the value of the forged
checks in the amount of P547,115.00 after deductions subject to REIMBURSEMENT from third party
defendant Yabut who is likewise ORDERED to pay the other half to plaintiff corporation [Casa Montessori
Internationale (CASA)].[4]
The assailed Resolution denied all the parties Motions for Reconsideration.
The Facts
The facts of the case are narrated by the CA as follows:
On November 8, 1982, plaintiff CASA Montessori International[5] opened Current Account No. 0291-0081-01
with defendant BPI[,] with CASAs President Ms. Ma. Carina C. Lebron as one of its authorized signatories.
In 1991, after conducting an investigation, plaintiff discovered that nine (9) of its checks had been encashed by
a certain Sonny D. Santos since 1990 in the total amount of P782,000.00, on the following dates and amounts:
Check No.

Date

Amount

1.

839700

April 24, 1990

2.

839459

Nov. 2, 1990

110,500.00

3.

839609

Oct. 17, 1990

47,723.00

4.

839549

April 7, 1990

5.

839569

Sept. 23, 1990

52,277.00

6.

729149

Mar. 22, 1990

148,000.00

7.

729129

Mar. 16, 1990

51,015.00

8.

839684

Dec. 1, 1990

140,000.00

9.

729034

Mar. 2, 1990

98,985.00

Total --

43,400.00

90,700.00

782,600.00[6]

It turned out that Sonny D. Santos with account at BPIs Greenbelt Branch [was] a fictitious name used by
third party defendant Leonardo T. Yabut who worked as external auditor of CASA. Third party defendant
voluntarily admitted that he forged the signature of Ms. Lebron and encashed the checks.

The PNP Crime Laboratory conducted an examination of the nine (9) checks and concluded that the
handwritings thereon compared to the standard signature of Ms. Lebron were not written by the latter.
On March 4, 1991, plaintiff filed the herein Complaint for Collection with Damages against defendant
bank praying that the latter be ordered to reinstate the amount of P782,500.00[7] in the current and savings
accounts of the plaintiff with interest at 6% per annum.
On February 16, 1999, the RTC rendered the appealed decision in favor of the plaintiff.[8]
Ruling of the Court of Appeals
Modifying the Decision of the Regional Trial Court (RTC), the CA apportioned the loss between BPI and
CASA. The appellate court took into account CASAs contributory negligence that resulted in the undetected
forgery. It then ordered Leonardo T. Yabut to reimburse BPI half the total amount claimed; and CASA, the
other half. It also disallowed attorneys fees and moral and exemplary damages.
Hence, these Petitions.[9]
Issues
In GR No. 149454, Petitioner BPI submits the following issues for our consideration:
I. The Honorable Court of Appeals erred in deciding this case NOT in accord with the applicable decisions
of this Honorable Court to the effect that forgery cannot be presumed; that it must be proved by clear, positive
and convincing evidence; and that the burden of proof lies on the party alleging the forgery.
II. The Honorable Court of Appeals erred in deciding this case not in accord with applicable laws, in
particular the Negotiable Instruments Law (NIL) which precludes CASA, on account of its own negligence,
from asserting its forgery claim against BPI, specially taking into account the absence of any negligence on the
part of BPI.[10]
In GR No. 149507, Petitioner CASA submits the following issues:
1. The Honorable Court of Appeals erred when it ruled that there is no showing that [BPI], although negligent,
acted in bad faith x x x thus denying the prayer for the award of attorneys fees, moral damages and exemplary
damages to [CASA]. The Honorable Court also erred when it did not order [BPI] to pay interest on the amounts
due to [CASA].
2. The Honorable Court of Appeals erred when it declared that [CASA] was likewise negligent in the case at
bar, thus warranting its conclusion that the loss in the amount of P547,115.00 be apportioned between [CASA]
and [BPI] x x x.[11]
These issues can be narrowed down to three. First, was there forgery under the Negotiable Instruments
Law (NIL)? Second, were any of the parties negligent and therefore precluded from setting up forgery as a
defense? Third, should moral and exemplary damages, attorneys fees, and interest be awarded?
The Courts Ruling

The Petition in GR No. 149454 has no merit, while that in GR No. 149507 is partly meritorious.
First Issue:
Forged Signature Wholly Inoperative
Section 23 of the NIL provides:
Section 23. Forged signature; effect of. -- When a signature is forged or made without the authority of the
person whose signature it purports to be, it is wholly inoperative, and no right x x x to enforce payment thereof
against any party thereto, can be acquired through or under such signature, unless the party against whom it is
sought to enforce such right is precluded from setting up the forgery or want of authority. [12]
Under this provision, a forged signature is a real [13] or absolute defense,[14] and a person whose signature on
a negotiable instrument is forged is deemed to have never become a party thereto and to have never consented
to the contract that allegedly gave rise to it.[15]
The counterfeiting of any writing, consisting in the signing of anothers name with intent to defraud, is
forgery.[16]
In the present case, we hold that there was forgery of the drawers signature on the check.
First, both the CA[17] and the RTC[18] found that Respondent Yabut himself had voluntarily admitted,
through an Affidavit, that he had forged the drawers signature and encashed the checks. [19] He never refuted
these findings.[20] That he had been coerced into admission was not corroborated by any evidence on record.[21]
Second, the appellate and the trial courts also ruled that the PNP Crime Laboratory, after its examination of
the said checks,[22] had concluded that the handwritings thereon -- compared to the standard signature of the
drawer -- were not hers.[23] This conclusion was the same as that in the Report [24] that the PNP Crime Laboratory
had earlier issued to BPI -- the drawee bank -- upon the latters request.
Indeed, we respect and affirm the RTCs factual findings, especially when affirmed by the CA, since these
are supported by substantial evidence on record.[25]
Voluntary Admission Not
Violative of Constitutional Rights
The voluntary admission of Yabut did not violate his constitutional rights (1) on custodial investigation, and
(2) against self-incrimination.
In the first place, he was not under custodial investigation. [26] His Affidavit was executed in private and
before private individuals.[27] The mantle of protection under Section 12 of Article III of the 1987
Constitution[28] covers only the period from the time a person is taken into custody for investigation of his
possible participation in the commission of a crime or from the time he is singled out as a suspect in the
commission of a crime although not yet in custody.[29]
Therefore, to fall within the ambit of Section 12, quoted above, there must be an arrest or a deprivation of
freedom, with questions propounded on him by the police authorities for the purpose of eliciting admissions,
confessions, or any information.[30] The said constitutional provision does not apply to spontaneous statements
made in a voluntary manner[31] whereby an individual orally admits to authorship of a crime. [32] What the
Constitution proscribes is the compulsory or coercive disclosure of incriminating facts.[33]

Moreover, the right against self-incrimination[34] under Section 17 of Article III[35] of the Constitution,
which is ordinarily available only in criminal prosecutions, extends to all other government proceedings -including civil actions, legislative investigations,[36] and administrative proceedings that possess a criminal or
penal aspect[37] -- but not to private investigations done by private individuals. Even in such government
proceedings, this right may be waived,[38] provided the waiver is certain; unequivocal; and intelligently,
understandingly and willingly made.[39]
If in these government proceedings waiver is allowed, all the more is it so in private investigations. It is of
no moment that no criminal case has yet been filed against Yabut. The filing thereof is entirely up to the
appropriate authorities or to the private individuals upon whom damage has been caused. As we shall also
explain later, it is not mandatory for CASA -- the plaintiff below -- to implead Yabut in the civil case before the
lower court.
Under these two constitutional provisions, [t]he Bill of Rights [40] does not concern itself with the relation
between a private individual and another individual. It governs the relationship between the individual and the
State.[41] Moreover, the Bill of Rights is a charter of liberties for the individual and a limitation upon the
power of the [S]tate.[42] These rights[43] are guaranteed to preclude the slightest coercion by the State that may
lead the accused to admit something false, not prevent him from freely and voluntarily telling the truth.[44]
Yabut is not an accused here. Besides, his mere invocation of the aforesaid rights does not automatically
entitle him to the constitutional protection.[45] When he freely and voluntarily executed[46] his Affidavit, the
State was not even involved. Such Affidavit may therefore be admitted without violating his constitutional
rights while under custodial investigation and against self-incrimination.
Clear, Positive and Convincing
Examination and Evidence
The examination by the PNP, though inconclusive, was nevertheless clear, positive and convincing.
Forgery cannot be presumed.[47] It must be established by clear, positive and convincing evidence.
[48]
Under the best evidence rule as applied to documentary evidence like the checks in question, no secondary
or substitutionary evidence may inceptively be introduced, as the original writing itself must be produced in
court.[49] But when, without bad faith on the part of the offeror, the original checks have already been destroyed
or cannot be produced in court, secondary evidence may be produced. [50] Without bad faith on its part, CASA
proved the loss or destruction of the original checks through the Affidavit of the one person who knew of that
fact[51] -- Yabut. He clearly admitted to discarding the paid checks to cover up his misdeed. [52] In such a
situation, secondary evidence like microfilm copies may be introduced in court.
The drawers signatures on the microfilm copies were compared with the standard signature. PNP
Document Examiner II Josefina de la Cruz testified on cross-examination that two different persons had written
them.[53] Although no conclusive report could be issued in the absence of the original checks, [54] she affirmed
that her findings were 90 percent conclusive.[55] According to her, even if the microfilm copies were the only
basis of comparison, the differences were evident. [56] Besides, the RTC explained that although the Report was
inconclusive, no conclusive report could have been given by the PNP, anyway, in the absence of the original
checks.[57] This explanation is valid; otherwise, no such report can ever be relied upon in court.
Even with respect to documentary evidence, the best evidence rule applies only when the contents of a
document -- such as the drawers signature on a check -- is the subject of inquiry. [58] As to whether the document
has been actually executed, this rule does not apply; and testimonial as well as any other secondary evidence is
admissible.[59] Carina Lebron herself, the drawers authorized signatory, testified many times that she had never
signed those checks. Her testimonial evidence is admissible; the checks have not been actually executed. The
genuineness of her handwriting is proved, not only through the courts comparison of the questioned
handwritings and admittedly genuine specimens thereof,[60] but above all by her.

The failure of CASA to produce the original checks neither gives rise to the presumption of suppression of
evidence[61] nor creates an unfavorable inference against it. [62] Such failure merely authorizes the introduction of
secondary evidence[63] in the form of microfilm copies. Of no consequence is the fact that CASA did not
present the signature card containing the signatures with which those on the checks were compared.
[64]
Specimens of standard signatures are not limited to such a card. Considering that it was not produced in
evidence, other documents that bear the drawers authentic signature may be resorted to. [65] Besides, that card
was in the possession of BPI -- the adverse party.
We have held that without the original document containing the allegedly forged signature, one cannot
make a definitive comparison that would establish forgery; [66] and that a comparison based on a mere
reproduction of the document under controversy cannot produce reliable results. [67] We have also said, however,
that a judge cannot merely rely on a handwriting experts testimony, [68] but should also exercise independent
judgment in evaluating the authenticity of a signature under scrutiny. [69] In the present case, both the RTC and
the CA conducted independent examinations of the evidence presented and arrived at reasonable and similar
conclusions. Not only did they admit secondary evidence; they also appositely considered testimonial and other
documentary evidence in the form of the Affidavit.
The best evidence rule admits of exceptions and, as we have discussed earlier, the first of these has been
met.[70] The result of examining a questioned handwriting, even with the aid of experts and scientific
instruments, may be inconclusive;[71] but it is a non sequitur to say that such result is not clear, positive and
convincing. The preponderance of evidence required in this case has been satisfied.[72]
Second Issue:
Negligence Attributable to BPI Alone
Having established the forgery of the drawers signature, BPI -- the drawee -- erred in making payments by
virtue thereof. The forged signatures are wholly inoperative, and CASA -- the drawer whose authorized
signatures do not appear on the negotiable instruments -- cannot be held liable thereon. Neither is the latter
precluded from setting up forgery as a real defense.
Clear Negligence
in Allowing Payment
Under a Forged Signature
We have repeatedly emphasized that, since the banking business is impressed with public interest, of
paramount importance thereto is the trust and confidence of the public in general. Consequently, the highest
degree of diligence[73] is expected,[74] and high standards of integrity and performance are even required, of it.
[75]
By the nature of its functions, a bank is under obligation to treat the accounts of its depositors with
meticulous care,[76] always having in mind the fiduciary nature of their relationship.[77]
BPI contends that it has a signature verification procedure, in which checks are honored only when the
signatures therein are verified to be the same with or similar to the specimen signatures on the signature
cards. Nonetheless, it still failed to detect the eight instances of forgery. Its negligence consisted in the
omission of that degree of diligence required [78] of a bank. It cannot now feign ignorance, for very early on we
have already ruled that a bank is bound to know the signatures of its customers; and if it pays a forged check, it
must be considered as making the payment out of its own funds, and cannot ordinarily charge the amount so
paid to the account of the depositor whose name was forged.[79] In fact, BPI was the same bank involved when
we issued this ruling seventy years ago.

Neither Waiver nor Estoppel

Results from Failure to
Report Error in Bank Statement
The monthly statements issued by BPI to its clients contain a notice worded as follows: If no error is
reported in ten (10) days, account will be correct. [80] Such notice cannot be considered a waiver, even if CASA
failed to report the error. Neither is it estopped from questioning the mistake after the lapse of the ten-day
period.
This notice is a simple confirmation [81] or circularization -- in accounting parlance -- that requests clientdepositors to affirm the accuracy of items recorded by the banks.[82] Its purpose is to obtain from the depositors a
direct corroboration of the correctness of their account balances with their respective banks. [83] Internal or
external auditors of a bank use it as a basic audit procedure[84] -- the results of which its client-depositors are
neither interested in nor privy to -- to test the details of transactions and balances in the banks records.
[85]
Evidential matter obtained from independent sources outside a bank only serves to provide greater assurance
of reliability[86] than that obtained solely within it for purposes of an audit of its own financial statements, not
those of its client-depositors.
Furthermore, there is always the audit risk that errors would not be detected [87] for various reasons. One,
materiality is a consideration in audit planning;[88] and two, the information obtained from such a substantive test
is merely presumptive and cannot be the basis of a valid waiver. [89] BPI has no right to impose a condition
unilaterally and thereafter consider failure to meet such condition a waiver. Neither may CASA renounce a
right[90] it has never possessed.[91]
Every right has subjects -- active and passive. While the active subject is entitled to demand its
enforcement, the passive one is duty-bound to suffer such enforcement.[92]
On the one hand, BPI could not have been an active subject, because it could not have demanded from
CASA a response to its notice. Besides, the notice was a measly request worded as follows: Please examine x
x x and report x x x.[93] CASA, on the other hand, could not have been a passive subject, either, because it had
no obligation to respond. It could -- as it did -- choose not to respond.
Estoppel precludes individuals from denying or asserting, by their own deed or representation, anything
contrary to that established as the truth, in legal contemplation. [94] Our rules on evidence even make a juris et de
jure presumption[95] that whenever one has, by ones own act or omission, intentionally and deliberately led
another to believe a particular thing to be true and to act upon that belief, one cannot -- in any litigation arising
from such act or omission -- be permitted to falsify that supposed truth.[96]
In the instant case, CASA never made any deed or representation that misled BPI. The formers omission,
if any, may only be deemed an innocent mistake oblivious to the procedures and consequences of periodic
audits. Since its conduct was due to such ignorance founded upon an innocent mistake, estoppel will not arise.
[97]
A person who has no knowledge of or consent to a transaction may not be estopped by it. [98] Estoppel cannot
be sustained by mere argument or doubtful inference x x x.[99] CASA is not barred from questioning BPIs error
even after the lapse of the period given in the notice.
Loss Borne by
Proximate Source
of Negligence
For allowing payment[100] on the checks to a wrongful and fictitious payee, BPI -- the drawee bank -becomes liable to its depositor-drawer. Since the encashing bank is one of its branches,[101] BPI can easily go
after it and hold it liable for reimbursement. [102] It may not debit the drawers account [103] and is not entitled to

indemnification from the drawer.[104] In both law and equity, when one of two innocent persons must suffer by
the wrongful act of a third person, the loss must be borne by the one whose negligence was the proximate cause
of the loss or who put it into the power of the third person to perpetrate the wrong.[105]
Proximate cause is determined by the facts of the case. [106] It is that cause which, in natural and continuous
sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would
not have occurred.[107]
Pursuant to its prime duty to ascertain well the genuineness of the signatures of its client-depositors on
checks being encashed, BPI is expected to use reasonable business prudence. [108] In the performance of that
obligation, it is bound by its internal banking rules and regulations that form part of the contract it enters into
with its depositors.[109]
Unfortunately, it failed in that regard. First, Yabut was able to open a bank account in one of its branches
without privity;[110] that is, without the proper verification of his corresponding identification papers. Second,
BPI was unable to discover early on not only this irregularity, but also the marked differences in the signatures
on the checks and those on the signature card. Third, despite the examination procedures it conducted, the
Central Verification Unit[111] of the bank even passed off these evidently different signatures as
genuine. Without exercising the required prudence on its part, BPI accepted and encashed the eight checks
presented to it. As a result, it proximately contributed to the fraud and should be held primarily liable [112] for the
negligence of its officers or agents when acting within the course and scope of their employment. [113] It must
bear the loss.
CASA Not Negligent
in Its Financial Affairs
In this jurisdiction, the negligence of the party invoking forgery is recognized as an exception [114] to the
general rule that a forged signature is wholly inoperative. [115] Contrary to BPIs claim, however, we do not find
CASA negligent in handling its financial affairs. CASA, we stress, is not precluded from setting up forgery as a
real defense.
Role of Independent Auditor
The major purpose of an independent audit is to investigate and determine objectively if the financial
statements submitted for audit by a corporation have been prepared in accordance with the appropriate financial
reporting practices[116] of private entities. The relationship that arises therefrom is both legal and moral.[117] It
begins with the execution of the engagement letter [118] that embodies the terms and conditions of the audit and
ends with the fulfilled expectation of the auditors ethical [119] and competent performance in all aspects of the
audit.[120]
The financial statements are representations of the client; but it is the auditor who has the responsibility for
the accuracy in the recording of data that underlies their preparation, their form of presentation, and the
opinion[121] expressed therein.[122] The auditor does not assume the role of employee or of management in the
clients conduct of operations[123] and is never under the control or supervision[124] of the client.
Yabut was an independent auditor[125] hired by CASA. He handled its monthly bank reconciliations and had
access to all relevant documents and checkbooks.[126] In him was reposed the clients[127] trust and
confidence[128] that he would perform precisely those functions and apply the appropriate procedures in
accordance with generally accepted auditing standards.[129] Yet he did not meet these expectations. Nothing
could be more horrible to a client than to discover later on that the person tasked to detect fraud was the same
one who perpetrated it.

Cash Balances
Open to Manipulation
It is a non sequitur to say that the person who receives the monthly bank statements, together with the
cancelled checks and other debit/credit memoranda, shall examine the contents and give notice of any
discrepancies within a reasonable time. Awareness is not equipollent with discernment.
Besides, in the internal accounting control system prudently installed by CASA, [130] it was Yabut who
should examine those documents in order to prepare the bank reconciliations. [131] He owned his working papers,
[132]
and his output consisted of his opinion as well as the clients financial statements and accompanying notes
thereto. CASA had every right to rely solely upon his output -- based on the terms of the audit engagement -and could thus be unwittingly duped into believing that everything was in order. Besides, [g]ood faith is
always presumed and it is the burden of the party claiming otherwise to adduce clear and convincing evidence
to the contrary.[133]
Moreover, there was a time gap between the period covered by the bank statement and the date of its actual
receipt. Lebron personally received the December 1990 bank statement only in January 1991 [134] -- when she
was also informed of the forgery for the first time, after which she immediately requested a stop payment
order. She cannot be faulted for the late detection of the forged December check. After all, the bank account
with BPI was not personal but corporate, and she could not be expected to monitor closely all its finances. A
preschool teacher charged with molding the minds of the youth cannot be burdened with the intricacies or
complexities of corporate existence.
There is also a cutoff period such that checks issued during a given month, but not presented for payment
within that period, will not be reflected therein. [135] An experienced auditor with intent to defraud can easily
conceal any devious scheme from a client unwary of the accounting processes involved by manipulating the
cash balances on record -- especially when bank transactions are numerous, large and frequent. CASA could
only be blamed, if at all, for its unintelligent choice in the selection and appointment of an auditor -- a fault that
is not tantamount to negligence.
Negligence is not presumed, but proven by whoever alleges it. [136] Its mere existence is not sufficient
without proof that it, and no other cause,[137] has given rise to damages.[138] In addition, this fault is common to,
if not prevalent among, small and medium-sized business entities, thus leading the Professional Regulation
Commission (PRC), through the Board of Accountancy (BOA), to require today not only accreditation for the
practice of public accountancy,[139] but also the registration of firms in the practice thereof. In fact, among the
attachments now required upon registration are the code of good governance[140] and a sworn statement on
adequate and effective training.[141]
The missing checks were certainly reported by the bookkeeper[142] to the accountant[143] -- her immediate
supervisor -- and by the latter to the auditor. However, both the accountant and the auditor, for reasons known
only to them, assured the bookkeeper that there were no irregularities.
The bookkeeper[144] who had exclusive custody of the checkbooks [145] did not have to go directly to CASAs
president or to BPI. Although she rightfully reported the matter, neither an investigation was conducted nor a
resolution of it was arrived at, precisely because the person at the top of the helm was the culprit. The vouchers,
invoices and check stubs in support of all check disbursements could be concealed or fabricated -- even in
collusion -- and management would still have no way to verify its cash accountabilities.
Clearly then, Yabut was able to perpetrate the wrongful act through no fault of CASA. If auditors may be
held liable for breach of contract and negligence,[146] with all the more reason may they be charged with the
perpetration of fraud upon an unsuspecting client. CASA had the discretion to pursue BPI alone under the NIL,
by reason of expediency or munificence or both. Money paid under a mistake may rightfully be recovered,
[147]
and under such terms as the injured party may choose.

Third Issue:
Award of Monetary Claims
Moral Damages Denied
We deny CASAs claim for moral damages.
In the absence of a wrongful act or omission, [148] or of fraud or bad faith, [149] moral damages cannot be
awarded.[150] The adverse result of an action does not per se make the action wrongful, or the party liable for
it. One may err, but error alone is not a ground for granting such damages. [151] While no proof of pecuniary loss
is necessary therefor -- with the amount to be awarded left to the courts discretion [152] -- the claimant must
nonetheless satisfactorily prove the existence of its factual basis[153] and causal relation[154] to the claimants act
or omission.[155]
Regrettably, in this case CASA was unable to identify the particular instance -- enumerated in the Civil
Code -- upon which its claim for moral damages is predicated. [156] Neither bad faith nor negligence so gross that
it amounts to malice[157] can be imputed to BPI. Bad faith, under the law, does not simply connote bad
judgment or negligence;[158] it imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong, a breach of a known duty through some motive or interest or ill will that partakes of the nature of
fraud.[159]
As a general rule, a corporation -- being an artificial person without feelings, emotions and senses, and
having existence only in legal contemplation -- is not entitled to moral damages, [160]because it cannot experience
physical suffering and mental anguish.[161] However, for breach of the fiduciary duty required of a bank, a
corporate client may claim such damages when its good reputation is besmirched by such breach, and social
humiliation results therefrom.[162] CASA was unable to prove that BPI had debased the good reputation of,
[163]
and consequently caused incalculable embarrassment to, the former. CASAs mere allegation or supposition
thereof, without any sufficient evidence on record,[164] is not enough.
Exemplary Damages Also Denied
We also deny CASAs claim for exemplary damages.
Imposed by way of correction [165] for the public good,[166] exemplary damages cannot be recovered as a
matter of right.[167] As we have said earlier, there is no bad faith on the part of BPI for paying the checks of
CASA upon forged signatures. Therefore, the former cannot be said to have acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.[168] The latter, having no right to moral damages, cannot demand
exemplary damages.[169]
Attorneys Fees Granted
Although it is a sound policy not to set a premium on the right to litigate, [170] we find that CASA is entitled
to reasonable attorneys fees based on factual, legal, and equitable justification.[171]
When the act or omission of the defendant has compelled the plaintiff to incur expenses to protect the
latters interest,[172] or where the court deems it just and equitable,[173] attorneys fees may be recovered. In the
present case, BPI persistently denied the claim of CASA under the NIL to recredit the latters account for the
value of the forged checks. This denial constrained CASA to incur expenses and exert effort for more than ten
years in order to protect its corporate interest in its bank account. Besides, we have already cautioned BPI on a

similar act of negligence it had committed seventy years ago, but it has remained unrelenting. Therefore, the
Court deems it just and equitable to grant ten percent (10%) [174] of the total value adjudged to CASA as
attorneys fees.
Interest Allowed
For the failure of BPI to pay CASA upon demand and for compelling the latter to resort to the courts to
obtain payment, legal interest may be adjudicated at the discretion of the Court, the same to run from the
filing[175] of the Complaint.[176] Since a court judgment is not a loan or a forbearance of recovery, the legal
interest shall be at six percent (6%) per annum.[177] If the obligation consists in the payment of a sum of money,
and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the
payment of x x x legal interest, which is six percent per annum.[178] The actual base for its computation shall be
on the amount finally adjudged,[179] compounded[180] annually to make up for the cost of money[181] already lost
to CASA.
Moreover, the failure of the CA to award interest does not prevent us from granting it upon damages
awarded for breach of contract.[182] Because BPI evidently breached its contract of deposit with CASA, we
award interest in addition to the total amount adjudged. Under Section 196 of the NIL, any case not provided
for shall be governed by the provisions of existing legislation or, in default thereof, by the rules of the law
merchant.[183] Damages are not provided for in the NIL. Thus, we resort to the Code of Commerce and the
Civil Code. Under Article 2 of the Code of Commerce, acts of commerce shall be governed by its provisions
and, in their absence, by the usages of commerce generally observed in each place; and in the absence of both
rules, by those of the civil law.[184] This law being silent, we look at Article 18 of the Civil Code, which states:
In matters which are governed by the Code of Commerce and special laws, their deficiency shall be supplied
by its provisions. A perusal of these three statutes unmistakably shows that the award of interest under our civil
law is justified.
WHEREFORE, the Petition in GR No. 149454 is hereby DENIED, and that in GR No. 149507 PARTLY
GRANTED. The assailed Decision of the Court of Appeals is AFFIRMED with modification: BPI is held liable
for P547,115, the total value of the forged checks less the amount already recovered by CASA from Leonardo T.
Yabut, plus interest at the legal rate of six percent (6%) per annum -- compounded annually, from the filing of
the complaint until paid in full; and attorneys fees of ten percent (10%) thereof, subject to reimbursement from
Respondent Yabut for the entire amount, excepting attorneys fees. Let a copy of this Decision be furnished the
Board of Accountancy of the Professional Regulation Commission for such action as it may deem appropriate
against Respondent Yabut. No costs.
SO ORDERED.
3.
G.R. No. 137873
April 20, 2001
D. M. CONSUNJI, INC., petitioner,
vs.
COURT OF APPEALS and MARIA J. JUEGO, respondents.
KAPUNAN, J.:
At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D. M. Consunji, Inc., fell 14
floors from the Renaissance Tower, Pasig City to his death.

PO3 Rogelio Villanueva of the Eastern Police District investigated the tragedy and filed a report dated
November 25, 1990, stating that:
x x x. [The] [v]ictim was rushed to [the] Rizal Medical Center in Pasig, Metro Manila where he was
pronounced dead on arrival (DOA) by the attending physician, Dr. Errol de Yzo[,] at around 2:15 p.m.
of the same date.
Investigation disclosed that at the given time, date and place, while victim Jose A. Juego together with
Jessie Jaluag and Delso Destajo [were] performing their work as carpenter[s] at the elevator core of the
14th floor of the Tower D, Renaissance Tower Building on board a [p]latform made of channel beam
(steel) measuring 4.8 meters by 2 meters wide with pinulid plywood flooring and cable wires attached to
its four corners and hooked at the 5 ton chain block, when suddenly, the bolt or pin which was merely
inserted to connect the chain block with the [p]latform, got loose xxx causing the whole [p]latform
assembly and the victim to fall down to the basement of the elevator core, Tower D of the building under
construction thereby crushing the victim of death, save his two (2) companions who luckily jumped out
for safety.
It is thus manifest that Jose A. Juego was crushed to death when the [p]latform he was then on board and
performing work, fell. And the falling of the [p]latform was due to the removal or getting loose of the
pin which was merely inserted to the connecting points of the chain block and [p]latform but without a
safety lock.1
On May 9, 1991, Jose Juegos widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a complaint for
damages against the deceaseds employer, D.M. Consunji, Inc. The employer raised, among other defenses, the
widows prior availment of the benefits from the State Insurance Fund.
After trial, the RTC rendered a decision in favor of the widow Maria Juego. The dispositive portion of the RTC
decision reads:
WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff, as follows:
1. P50,000.00 for the death of Jose A. Juego.
2. P10,000.00 as actual and compensatory damages.
3. P464,000.00 for the loss of Jose A. Juegos earning capacity.
4. P100,000.00 as moral damages.
5. P20,000.00 as attorneys fees, plus the costs of suit.
SO ORDERED.2
On appeal by D. M. Consunji, the Court of Appeals (CA) affirmed the decision of the RTC in toto.
D. M. Consunji now seeks the reversal of the CA decision on the following grounds:

THE APPELLATE COURT ERRED IN HOLDING THAT THE POLICE REPORT WAS
ADMISSIBLE EVIDENCE OF THE ALLEGED NEGLIGENCE OF PETITIONER.

THE APPELLATE COURT ERRED IN HOLDING THAT THE DOCTRINE OF RES IPSA
LOQUITOR [sic] IS APPLICABLE TO PROVE NEGLIGENCE ON THE PART OF
PETITIONER.

THE APPELLATE COURT ERRED IN HOLDING THAT PETITIONER IS PRESUMED

NEGLIGENT UNDER ARTICLE 2180 OF THE CIVIL CODE, AND

THE APPELLATE COURT ERRED IN HOLDING THAT RESPONDENT IS NOT

PRECLUDED FROM RECOVERING DAMAGES UNDER THE CIVIL CODE.3

Petitioner maintains that the police report reproduced above is hearsay and, therefore, inadmissible. The CA
ruled otherwise. It held that said report, being an entry in official records, is an exception to the hearsay rule.
The Rules of Court provide that a witness can testify only to those facts which he knows of his personal
knowledge, that is, which are derived from his perception.4 A witness, therefore, may not testify as what he
merely learned from others either because he was told or read or heard the same. Such testimony is considered
hearsay and may not be received as proof of the truth of what he has learned.5 This is known as the hearsay rule.
Hearsay is not limited to oral testimony or statements; the general rule that excludes hearsay as evidence applies
to written, as well as oral statements.6
The theory of the hearsay rule is that the many possible deficiencies, suppressions, sources of error and
untrustworthiness, which lie underneath the bare untested assertion of a witness, may be best brought to light
and exposed by the test of cross-examiantion.7 The hearsay rule, therefore, excludes evidence that cannot be
tested by cross-examination.8
The Rules of Court allow several exceptions to the rule,9 among which are entries in official records. Section
44, Rule 130 provides:
Entries in official records made in the performance of his duty made in the performance of his duty by a
public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law
areprima facie evidence of the facts therein stated.
In Africa, et al. vs. Caltex (Phil.), Inc., et al.,10 this Court, citing the work of Chief Justice Moran, enumerated
the requisites for admissibility under the above rule:
(a) that the entry was made by a public officer or by another person specially enjoined by law to do so;
(b) that it was made by the public officer in the performance of his duties, or by such other person in the
performance of a duty specially enjoined by law; and
(c) that the public officer or other person had sufficient knowledge of the facts by him stated, which
must have been acquired by him personally or through official information.
The CA held that the police report meets all these requisites. Petitioner contends that the last requisite is not
present.
The Court notes that PO3 Villanueva, who signed the report in question, also testified before the trial court.
InRodriguez vs. Court of Appeals,11 which involved a Fire Investigation Report, the officer who signed the fire
report also testified before the trial court. This Court held that the report was inadmissible for the purpose of

proving the truth of the statements contained in the report but admissible insofar as it constitutes part of the
testimony of the officer who executed the report.
x x x. Since Major Enriquez himself took the witness stand and was available for cross-examination, the
portions of the report which were of his personal knowledge or which consisted of his perceptions and
conclusions were not hearsay. The rest of the report, such as the summary of the statements of the parties
based on their sworn statements (which were annexed to the Report) as well as the latter, having been
included in the first purpose of the offer [as part of the testimony of Major Enriquez], may then be
considered as independently relevant statements which were gathered in the course of the investigation
and may thus be admitted as such, but not necessarily to prove the truth thereof. It has been said that:
"Where regardless of the truth or falsity of a statement, the fact that it has been made is relevant,
the hearsay rule does not apply, but the statement may be shown. Evidence as to the making of
such statement is not secondary but primary, for the statement itself may constitute a fact in
issue, or be circumstantially relevant as to the existence of such a fact."
When Major Enriquez took the witness stand, testified for petitioners on his Report and made himself
available for cross-examination by the adverse party, the Report, insofar as it proved that certain
utterances were made (but not their truth), was effectively removed from the ambit of the
aforementioned Section 44 of Rule 130. Properly understood, this section does away with the testimony
in open court of the officer who made the official record, considers the matter as an exception to the
hearsay rule and makes the entries in said official record admissible in evidence as prima facie evidence
of the facts therein stated. The underlying reasons for this exceptionary rule are necessity and
trustworthiness, as explained in Antillon v. Barcelon.
The litigation is unlimited in which testimony by officials is daily needed; the occasions in which
the officials would be summoned from his ordinary duties to declare as a witness are numberless.
The public officers are few in whose daily work something is not done in which testimony is not
needed from official sources. Were there no exception for official statements, hosts of officials
would be found devoting the greater part of their time to attending as witnesses in court or
delivering deposition before an officer. The work of administration of government and the
interest of the public having business with officials would alike suffer in consequence. For these
reasons, and for many others, a certain verity is accorded such documents, which is not extended
to private documents. (3 Wigmore on Evidence, Sec. 1631).
The law reposes a particular confidence in public officers that it presumes they will discharge
their several trusts with accuracy and fidelity; and, therefore, whatever acts they do in discharge
of their duty may be given in evidence and shall be taken to be true under such a degree of
caution as to the nature and circumstances of each case may appear to require.
It would have been an entirely different matter if Major Enriquez was not presented to testify on his
report. In that case the applicability of Section 44 of Rule 143 would have been ripe for determination,
and this Court would have agreed with the Court of Appeals that said report was inadmissible since the
aforementioned third requisite was not satisfied. The statements given by the sources of information of
Major Enriquez failed to qualify as "official information," there being no showing that, at the very least,
they were under a duty to give the statements for record.
Similarly, the police report in this case is inadmissible for the purpose of proving the truth of the statements
contained therein but is admissible insofar as it constitutes part of the testimony of PO3 Villanueva.
In any case, the Court holds that portions of PO3 Villanuevas testimony which were of his personal knowledge
suffice to prove that Jose Juego indeed died as a result of the elevator crash. PO3 Villanueva had seen Juegos

remains at the morgue,12 making the latters death beyond dispute. PO3 Villanueva also conducted an ocular
inspection of the premises of the building the day after the incident13 and saw the platform for himself.14 He
observed that the platform was crushed15 and that it was totally damaged.16 PO3 Villanueva also required Garcia
and Fabro to bring the chain block to the police headquarters. Upon inspection, he noticed that the chain was
detached from the lifting machine, without any pin or bolt.17
What petitioner takes particular exception to is PO3 Villanuevas testimony that the cause of the fall of the
platform was the loosening of the bolt from the chain block. It is claimed that such portion of the testimony is
mere opinion. Subject to certain exceptions,18 the opinion of a witness is generally not admissible.19
Petitioners contention, however, loses relevance in the face of the application of res ipsa loquitur by the CA.
The effect of the doctrine is to warrant a presumption or inference that the mere fall of the elevator was a result
of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine of res ipsa
loquituris peculiar to the law of negligence which recognizes that prima facie negligence may be established
without direct proof and furnishes a substitute for specific proof of negligence.20
The concept of res ipsa loquitur has been explained in this wise:
While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or
injury will not generally give rise to an inference or presumption that it was due to negligence on
defendants part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction
speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or
circumstances accompanying an injury may be such as to raise a presumption, or at least permit an
inference of negligence on the part of the defendant, or some other person who is charged with
negligence.
x x x where it is shown that the thing or instrumentality which caused the injury complained of was
under the control or management of the defendant, and that the occurrence resulting in the injury was
such as in the ordinary course of things would not happen if those who had its control or management
used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the
absence of explanation by the defendant, that the injury arose from or was caused by the defendants
want of care.21
One of the theoretical based for the doctrine is its necessity, i.e., that necessary evidence is absent or not
available.22
The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the
instrumentality which causes the injury either knows the cause of the accident or has the best
opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore is compelled to
allege negligence in general terms and to rely upon the proof of the happening of the accident in order to
establish negligence. The inference which the doctrine permits is grounded upon the fact that the chief
evidence of the true cause, whether culpable or innocent, is practically accessible to the defendant but
inaccessible to the injured person.
It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a plaintiff, without
knowledge of the cause, reaches over to defendant who knows or should know the cause, for any
explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains.
The res ipsa loquitur doctrine, another court has said, is a rule of necessity, in that it proceeds on the
theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of
the defendant to show that there was no negligence on his part, and direct proof of defendants
negligence is beyond plaintiffs power. Accordingly, some court add to the three prerequisites for the
application of the res ipsa loquitur doctrine the further requirement that for the res ipsa loquitur doctrine

to apply, it must appear that the injured party had no knowledge or means of knowledge as to the cause
of the accident, or that the party to be charged with negligence has superior knowledge or opportunity
for explanation of the accident.23
The CA held that all the requisites of res ipsa loquitur are present in the case at bar:
There is no dispute that appellees husband fell down from the 14th floor of a building to the basement
while he was working with appellants construction project, resulting to his death. The construction site
is within the exclusive control and management of appellant. It has a safety engineer, a project
superintendent, a carpenter leadman and others who are in complete control of the situation therein. The
circumstances of any accident that would occur therein are peculiarly within the knowledge of the
appellant or its employees. On the other hand, the appellee is not in a position to know what caused the
accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent or not readily
available, provided the following requisites are present: (1) the accident was of a kind which does not
ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury
was under the exclusive control of the person charged with negligence; and (3) the injury suffered must
not have been due to any voluntary action or contribution on the part of the person injured. x x x.
No worker is going to fall from the 14th floor of a building to the basement while performing work in a
construction site unless someone is negligent[;] thus, the first requisite for the application of the rule
of res ipsa loquitur is present. As explained earlier, the construction site with all its paraphernalia and
human resources that likely caused the injury is under the exclusive control and management of
appellant[;] thus[,] the second requisite is also present. No contributory negligence was attributed to the
appellees deceased husband[;] thus[,] the last requisite is also present. All the requisites for the
application of the rule of res ipsa loquitur are present, thus a reasonable presumption or inference of
appellants negligence arises. x x x.24
Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur, but argues that
the presumption or inference that it was negligent did not arise since it "proved that it exercised due care to
avoid the accident which befell respondents husband."
Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the defendants
negligence is presumed or inferred25 when the plaintiff establishes the requisites for the application of res ipsa
loquitur. Once the plaintiff makes out a prima facie case of all the elements, the burden then shifts to defendant
to explain.26 The presumption or inference may be rebutted or overcome by other evidence and, under
appropriate circumstances disputable presumption, such as that of due care or innocence, may outweigh the
inference.27 It is not for the defendant to explain or prove its defense to prevent the presumption or inference
from arising. Evidence by the defendant of say, due care, comes into play only after the circumstances for the
application of the doctrine has been established.1wphi1.nt
In any case, petitioner cites the sworn statement of its leadman Ferdinand Fabro executed before the police
investigator as evidence of its due care. According to Fabros sworn statement, the company enacted rules and
regulations for the safety and security of its workers. Moreover, the leadman and the bodegero inspect the chain
block before allowing its use.
It is ironic that petitioner relies on Fabros sworn statement as proof of its due care but, in arguing that private
respondent failed to prove negligence on the part of petitioners employees, also assails the same statement for
being hearsay.
Petitioner is correct. Fabros sworn statement is hearsay and inadmissible. Affidavits are inadmissible as
evidence under the hearsay rule, unless the affiant is placed on the witness stand to testify thereon.28 The
inadmissibility of this sort of evidence is based not only on the lack of opportunity on the part of the adverse

party to cross-examine the affiant, but also on the commonly known fact that, generally, an affidavit is not
prepared by the affiant himself but by another who uses his own language in writing the affiants statements
which may either be omitted or misunderstood by the one writing them.29 Petitioner, therefore, cannot use said
statement as proof of its due care any more than private respondent can use it to prove the cause of her
husbands death. Regrettably, petitioner does not cite any other evidence to rebut the inference or presumption
of negligence arising from the application of res ipsa loquitur, or to establish any defense relating to the
incident.
Next, petitioner argues that private respondent had previously availed of the death benefits provided under the
Labor Code and is, therefore, precluded from claiming from the deceaseds employer damages under the Civil
Code.
Article 173 of the Labor Code states:
Article 173. Extent of liability. Unless otherwise provided, the liability of the State Insurance Fund
under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his
dependents or anyone otherwise entitled to receive damages on behalf of the employee or his
dependents. The payment of compensation under this Title shall not bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven
hundred sixty-one, as amended, Republic Act Numbered Six hundred ten, as amended, Republic Act
Numbered Forty-eight hundred sixty-four as amended, and other laws whose benefits are administered
by the System or by other agencies of the government.
The precursor of Article 173 of the Labor Code, Section 5 of the Workmens Compensation Act, provided that:
Section 5. Exclusive right to compensation. The rights and remedies granted by this Act to an
employee by reason of a personal injury entitling him to compensation shall exclude all other rights and
remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said injury x x x.
Whether Section 5 of the Workmens Compensation Act allowed recovery under said Act as well as under the
Civil Code used to be the subject of conflicting decisions. The Court finally settled the matter in Floresca
vs.Philex Mining Corporation,30 which involved a cave-in resulting in the death of the employees of the Philex
Mining Corporation. Alleging that the mining corporation, in violation of government rules and regulations,
failed to take the required precautions for the protection of the employees, the heirs of the deceased employees
filed a complaint against Philex Mining in the Court of First Instance (CFI). Upon motion of Philex Mining, the
CFI dismissed the complaint for lack of jurisdiction. The heirs sought relief from this Court.
Addressing the issue of whether the heirs had a choice of remedies, majority of the Court En Banc,31 following
the rule in Pacaa vs. Cebu Autobus Company, held in the affirmative.
WE now come to the query as to whether or not the injured employee or his heirs in case of death have a
right of selection or choice of action between availing themselves of the workers right under the
Workmens Compensation Act and suing in the regular courts under the Civil Code for higher damages
(actual, moral and exemplary) from the employers by virtue of the negligence or fault of the employers
or whether they may avail themselves cumulatively of both actions, i.e., collect the limited
compensation under the Workmens Compensation Act and sue in addition for damages in the regular
courts.
In disposing of a similar issue, this Court in Pacaa vs. Cebu Autobus Company, 32 SCRA 442, ruled
thatan injured worker has a choice of either to recover from the employer the fixed amounts set by the

Workmens Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher
damages but he cannot pursue both courses of action simultaneously. [Underscoring supplied.]
Nevertheless, the Court allowed some of the petitioners in said case to proceed with their suit under the Civil
Code despite having availed of the benefits provided under the Workmens Compensation Act. The Court
reasoned:
With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968
before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr.,
Aurelio Lanuza, Lorenzo Isla and Saturnino submitted notices and claims for compensation to the
Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of
August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments x x x.
Such allegation was admitted by herein petitioners in their opposition to the motion to dismiss dated
may 27, 1968 x x x in the lower court, but they set up the defense that the claims were filed under the
Workmens Compensation Act before they learned of the official report of the committee created to
investigate the accident which established the criminal negligence and violation of law by Philex, and
which report was forwarded by the Director of Mines to then Executive Secretary Rafael Salas in a letter
dated October 19, 1967 only x x x.
WE hold that although the other petitioners had received the benefits under the Workmens
Compensation Act, such my not preclude them from bringing an action before the regular court because
they became cognizant of the fact that Philex has been remiss in its contractual obligations with the
deceased miners only after receiving compensation under the Act. Had petitioners been aware of said
violation of government rules and regulations by Philex, and of its negligence, they would not have
sought redress under the Workmens Compensation Commission which awarded a lesser amount for
compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which
nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the
lower court for further proceedings. However, should the petitioners be successful in their bid before the
lower court, the payments made under the Workmens Compensation Act should be deducted from the
damages that may be decreed in their favor. [Underscoring supplied.]
The ruling in Floresca providing the claimant a choice of remedies was reiterated in Ysmael Maritime
Corporation vs. Avelino,32 Vda. De Severo vs. Feliciano-Go,33 and Marcopper Mining Corp. vs. Abeleda.34 In the
last case, the Court again recognized that a claimant who had been paid under the Act could still sue under the
Civil Code. The Court said:
In the Robles case, it was held that claims for damages sustained by workers in the course of their
employment could be filed only under the Workmens Compensation Law, to the exclusion of all further
claims under other laws. In Floresca, this doctrine was abrogated in favor of the new rule that the
claimants may invoke either the Workmens Compensation Act or the provisions of the Civil Code,
subject to the consequence that the choice of one remedy will exclude the other and that the acceptance
of compensation under the remedy chosen will preclude a claim for additional benefits under the other
remedy. The exception is where a claimant who has already been paid under the Workmens
Compensation Act may still sue for damages under the Civil Code on the basis of supervening facts or
developments occurring after he opted for the first remedy. (Underscoring supplied.)
Here, the CA held that private respondents case came under the exception because private respondent was
unaware of petitioners negligence when she filed her claim for death benefits from the State Insurance Fund.
Private respondent filed the civil complaint for damages after she received a copy of the police investigation
report and the Prosecutors Memorandum dismissing the criminal complaint against petitioners personnel.
While stating that there was no negligence attributable to the respondents in the complaint, the prosecutor

nevertheless noted in the Memorandum that, "if at all," the "case is civil in nature." The CA thus applied the
exception in Floresca:
x x x We do not agree that appellee has knowledge of the alleged negligence of appellant as early as
November 25, 1990, the date of the police investigators report. The appellee merely executed her sworn
statement before the police investigator concerning her personal circumstances, her relation to the
victim, and her knowledge of the accident. She did not file the complaint for "Simple Negligence
Resulting to Homicide" against appellants employees. It was the investigator who recommended the
filing of said case and his supervisor referred the same to the prosecutors office. This is a standard
operating procedure for police investigators which appellee may not have even known. This may explain
why no complainant is mentioned in the preliminary statement of the public prosecutor in her
memorandum dated February 6, 1991, to wit: "Respondent Ferdinand Fabro x x x are being charged by
complainant of "Simple Negligence Resulting to Homicide." It is also possible that the appellee did not
have a chance to appear before the public prosecutor as can be inferred from the following statement in
said memorandum: "Respondents who were notified pursuant to Law waived their rights to present
controverting evidence," thus there was no reason for the public prosecutor to summon the appellee.
Hence, notice of appellants negligence cannot be imputed on appellee before she applied for death
benefits under ECC or before she received the first payment therefrom. Her using the police
investigation report to support her complaint filed on May 9, 1991 may just be an afterthought after
receiving a copy of the February 6, 1991 Memorandum of the Prosecutors Office dismissing the
criminal complaint for insufficiency of evidence, stating therein that: "The death of the victim is not
attributable to any negligence on the part of the respondents. If at all and as shown by the records this
case is civil in nature." (Underscoring supplied.) Considering the foregoing, We are more inclined to
believe appellees allegation that she learned about appellants negligence only after she applied for and
received the benefits under ECC. This is a mistake of fact that will make this case fall under the
exception held in the Floresca ruling.35
The CA further held that not only was private respondent ignorant of the facts, but of her rights as well:
x x x. Appellee [Maria Juego] testified that she has reached only elementary school for her educational
attainment; that she did not know what damages could be recovered from the death of her husband; and
that she did not know that she may also recover more from the Civil Code than from the ECC. x x x.36
Petitioner impugns the foregoing rulings. It contends that private respondent "failed to allege in her complaint
that her application and receipt of benefits from the ECC were attended by ignorance or mistake of fact. Not
being an issue submitted during the trial, the trial court had no authority to hear or adjudicate that issue."
Petitioner also claims that private respondent could not have been ignorant of the facts because as early as
November 28, 1990, private respondent was the complainant in a criminal complaint for "Simple Negligence
Resulting to Homicide" against petitioners employees. On February 6, 1991, two months before the filing of
the action in the lower court, Prosecutor Lorna Lee issued a resolution finding that, although there was
insufficient evidence against petitioners employees, the case was "civil in nature." These purportedly show that
prior to her receipt of death benefits from the ECC on January 2, 1991 and every month thereafter, private
respondent also knew of the two choices of remedies available to her and yet she chose to claim and receive the
benefits from the ECC.
When a party having knowledge of the facts makes an election between inconsistent remedies, the election is
final and bars any action, suit, or proceeding inconsistent with the elected remedy, in the absence of fraud by the
other party. The first act of election acts as a bar.37 Equitable in nature, the doctrine of election of remedies is
designed to mitigate possible unfairness to both parties. It rests on the moral premise that it is fair to hold people
responsible for their choices. The purpose of the doctrine is not to prevent any recourse to any remedy, but to
prevent a double redress for a single wrong.38

The choice of a party between inconsistent remedies results in a waiver by election. Hence, the rule
in Florescathat a claimant cannot simultaneously pursue recovery under the Labor Code and prosecute an
ordinary course of action under the Civil Code. The claimant, by his choice of one remedy, is deemed to have
waived the other.
Waiver is the intentional relinquishment of a known right.39
[It] is an act of understanding that presupposes that a party has knowledge of its rights, but chooses not
to assert them. It must be generally shown by the party claiming a waiver that the person against whom
the waiver is asserted had at the time knowledge, actual or constructive, of the existence of the partys
rights or of all material facts upon which they depended. Where one lacks knowledge of a right, there is
no basis upon which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot
be established by a consent given under a mistake or misapprehension of fact.
A person makes a knowing and intelligent waiver when that person knows that a right exists and has
adequate knowledge upon which to make an intelligent decision.
Waiver requires a knowledge of the facts basic to the exercise of the right waived, with an awareness of
its consequences. That a waiver is made knowingly and intelligently must be illustrated on the record or
by the evidence.40
That lack of knowledge of a fact that nullifies the election of a remedy is the basis for the exception in Floresca.
It is in light of the foregoing principles that we address petitioners contentions.
Waiver is a defense, and it was not incumbent upon private respondent, as plaintiff, to allege in her complaint
that she had availed of benefits from the ECC. It is, thus, erroneous for petitioner to burden private respondent
with raising waiver as an issue. On the contrary, it is the defendant who ought to plead waiver, as petitioner did
in pages 2-3 of its Answer;41 otherwise, the defense is waived. It is, therefore, perplexing for petitioner to now
contend that the trial court had no jurisdiction over the issue when petitioner itself pleaded waiver in the
proceedings before the trial court.
Does the evidence show that private respondent knew of the facts that led to her husbands death and the rights
pertaining to a choice of remedies?
It bears stressing that what negates waiver is lack of knowledge or a mistake of fact. In this case, the "fact" that
served as a basis for nullifying the waiver is the negligence of petitioners employees, of which private
respondent purportedly learned only after the prosecutor issued a resolution stating that there may be civil
liability. InFloresca, it was the negligence of the mining corporation and its violation of government rules and
regulations. Negligence, or violation of government rules and regulations, for that matter, however, is not a fact,
but aconclusion of law, over which only the courts have the final say. Such a conclusion binds no one until the
courts have decreed so. It appears, therefore, that the principle that ignorance or mistake of fact nullifies a
waiver has been misapplied in Floresca and in the case at bar.
In any event, there is no proof that private respondent knew that her husband died in the elevator crash when on
November 15, 1990 she accomplished her application for benefits from the ECC. The police investigation report
is dated November 25, 1990, 10 days after the accomplishment of the form. Petitioner filed the application in
her behalf on November 27, 1990.
There is also no showing that private respondent knew of the remedies available to her when the claim before
the ECC was filed. On the contrary, private respondent testified that she was not aware of her rights.

Petitioner, though, argues that under Article 3 of the Civil Code, ignorance of the law excuses no one from
compliance therewith. As judicial decisions applying or interpreting the laws or the Constitution form part of
the Philippine legal system (Article 8, Civil Code), private respondent cannot claim ignorance of this Courts
ruling inFloresca allowing a choice of remedies.
The argument has no merit. The application of Article 3 is limited to mandatory and prohibitory laws.42 This
may be deduced from the language of the provision, which, notwithstanding a persons ignorance, does not
excuse his or her compliance with the laws. The rule in Floresca allowing private respondent a choice of
remedies is neither mandatory nor prohibitory. Accordingly, her ignorance thereof cannot be held against her.
Finally, the Court modifies the affirmance of the award of damages. The records do not indicate the total
amount private respondent ought to receive from the ECC, although it appears from Exhibit "K"43 that she
received P3,581.85 as initial payment representing the accrued pension from November 1990 to March 1991.
Her initial monthly pension, according to the same Exhibit "K," was P596.97 and present total monthly pension
was P716.40. Whether the total amount she will eventually receive from the ECC is less than the sum of
P644,000.00 in total damages awarded by the trial court is subject to speculation, and the case is remanded to
the trial court for such determination. Should the trial court find that its award is greater than that of the ECC,
payments already received by private respondent under the Labor Code shall be deducted from the trial court'
award of damages. Consistent with our ruling in Floresca, this adjudication aims to prevent double
compensation.
WHEREFORE, the case is REMANDED to the Regional Trial Court of Pasig City to determine whether the
award decreed in its decision is more than that of the ECC. Should the award decreed by the trial court be
greater than that awarded by the ECC, payments already made to private respondent pursuant to the Labor Code
shall be deducted therefrom. In all other respects, the Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
4.
[G.R. No. 149417. June 4, 2004]
GLORIA SANTOS DUEAS, petitioner, vs. SANTOS SUBDIVISION
HOMEOWNERS ASSOCIATION, respondent.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision[1] dated December 29, 2000, of the Court of Appeals in CA-G.R. SP
No. 51601, setting aside the Decision[2] of the Housing and Land Use Regulatory Board (HLURB) in HLURB
Case No. REM-A-980227-0032 which earlier affirmed the Decision [3] of the HLURB-NCR Regional Field
Office in HLURB Case No. REM-070297-9821. Said Regional Field Office dismissed the petition of herein
respondent Santos Subdivision Homeowners Association (SSHA) seeking to require herein petitioner, Gloria
Santos Dueas, to provide for an open space in the subdivision for recreational and community activities. In its
assailed decision, the CA remanded the case to the HLURB for determination of a definitive land area for open
space.[4] Petitioner assails also the Court of Appeals Resolution [5] dated July 31, 2001, denying her motion for
reconsideration.
The facts of this case are as follows:
Petitioner Gloria Santos Dueas is the daughter of the late Cecilio J. Santos who, during his lifetime,
owned a parcel of land with a total area of 2.2 hectares located at General T. De Leon,Valenzuela City, Metro

Manila. In 1966, Cecilio had the realty subdivided into smaller lots, the whole forming the Cecilio J. Santos
Subdivision (for brevity, Santos Subdivision). The then Land Registration Commission (LRC) approved the
project and the National Housing Authority (NHA) issued the required Certificate of Registration and License
to Sell. At the time of Cecilios death in 1988, there were already several residents and homeowners in Santos
Subdivision.
Sometime in 1997, the members of the SSHA submitted to the petitioner a resolution asking her to provide
within the subdivision an open space for recreational and other community activities, in accordance with the
provisions of P.D. No. 957,[6] as amended by P.D. No. 1216.[7] Petitioner, however, rejected the request, thus,
prompting the members of SSHA to seek redress from the NHA.
On April 25, 1997, the NHA General Manager forwarded the SSHA resolution to Romulo Q. Fabul,
Commissioner and Chief Executive Officer of the HLURB in Quezon City.[8]
In a letter dated May 29, 1997, the Regional Director of the Expanded NCR Field Office, HLURB, opined
that the open space requirement of P.D. No. 957, as amended by P.D. No. 1216, was not applicable to Santos
Subdivision.[9]
SSHA then filed a petition/motion for reconsideration, [10] docketed as HLURB Case No. REM-0702979821, which averred among others that: (1) P.D. No. 957 should apply retroactively to Santos Subdivision,
notwithstanding that the subdivision plans were approved in 1966 and (2) Gloria Santos Dueas should be
bound by the verbal promise made by her late father during his lifetime that an open space would be provided
for in Phase III of Santos Subdivision, the lots of which were at that time already for sale.
Petitioner denied any knowledge of the allegations of SSHA. She stressed that she was not a party to the
alleged transactions, and had neither participation nor involvement in the development of Santos Subdivision
and the sale of the subdivisions lots. As affirmative defenses, she raised the following: (a) It was her late
father, Cecilio J. Santos, who owned and developed the subdivision, and she was neither its owner nor
developer; (b) that this suit was filed by an unauthorized entity against a non-existent person, as SSHA and
Santos Subdivision are not juridical entities, authorized by law to institute or defend against actions; (c) that
P.D. No. 957 cannot be given retroactive effect to make it applicable to Santos Subdivision as the law does not
expressly provide for its retroactive applicability; and (d) that the present petition is barred by laches.
On January 14, 1998, HLURB-NCR disposed of HLURB Case No. REM-070297-9821 in this wise:
In view of the foregoing, the complaint is hereby dismissed.
It is So Ordered.[11]
In dismissing the case, the HLURB-NCR office ruled that while SSHA failed to present evidence showing
that it is an association duly organized under Philippine law with capacity to sue, nonetheless, the suit could still
prosper if viewed as a suit filed by all its members who signed and verified the petition. However, the petition
failed to show any cause of action against herein petitioner as (1) there is no evidence showing Santos-Dueas
as the owner/developer or successor-in-interest of Cecilio Santos, who was the owner/developer and sole
proprietor of Santos Subdivision; (2) the LRC-approved subdivision plan was bereft of any proviso indicating
or identifying an open space, as required by P.D. No. 957, as amended, hence there was no legal basis to compel
either Cecilio or his daughter Santos-Dueas, as his purported successor, to provide said space; and (3) the
alleged verbal promise of the late Cecilio Santos was inadmissible as evidence under the dead mans statute.[12]
SSHA then appealed the NCR offices ruling to the HLURB Board of Commissioners. The latter body,
however, affirmed the action taken by the HLURB-NCR office, concluding thus:
WHEREFORE, premises considered, the Petition for Review is hereby DISMISSED and the decision of the
Office below is hereby AFFIRMED IN TOTO.

SO ORDERED.[13]
The HLURB Board decreed that there was no basis to compel the petitioner to provide an open space
within Santos Subdivision, inasmuch as the subdivision plans approved on July 8, 1966, did not provide for said
space and there was no law requiring the same at that time. It further ruled that P.D. No. 957 could not be given
retroactive effect in the absence of an express provision in the law. Finally, it found the action time-barred since
it was filed nine (9) years after the death of Cecilio. The Board noted that SSHA sought to enforce an alleged
oral promise of Cecilio, which should have been done within the six-year prescriptive period provided for under
Article 1145[14] of the Civil Code.
Dissatisfied, respondent sought relief from the Court of Appeals via a petition for review under Rule 43 of
the 1997 Rules of Civil Procedure. The petition, docketed as CA-G.R. SP No. 51601, was decided by the
appellate court in this manner:
WHEREFORE, the petition is GRANTED--and the decision, dated January 20, 1999, of the Housing and Land
Use Regulatory Board (HLURB) in HLURB Case No. REM-A-980227-0032 is hereby REVERSED and SET
ASIDE. Accordingly, this case is ordered REMANDED to the HLURB for the determination of the definitive
land area that shall be used for open space in accordance with law and the rules and standards prescribed by the
HLURB. No pronouncement as to costs.
SO ORDERED.[15]
In finding for SSHA, the appellate court relied upon Eugenio v. Exec. Sec. Drilon,[16] which held that while
P.D. No. 957 did not expressly provide for its retroactive application, nonetheless, it can be plainly inferred
from its intent that it was to be given retroactive effect so as to extend its coverage even to those contracts
executed prior to its effectivity in 1976. The Court of Appeals also held that the action was neither barred by
prescription nor laches as the obligation of a subdivision developer to provide an open space is not predicated
upon an oral contract, but mandated by law, hence, an action may be brought within ten (10) years from the
time the right of action accrues under Article 1144[17] of the Civil Code. Moreover, the equitable principle of
laches will not apply when the claim was filed within the reglementary period.
Petitioner duly moved for reconsideration, which the Court of Appeals denied on July 31, 2001.
Hence, this petition grounded on the following assignment of errors:
I.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW BY TAKING

COGNIZANCE OF RESPONDENTS PETITION (WHICH ASSAILS THE DECISION OF THE
BOARD OF COMMISSIONERS OF THE HLURB) WHEN JURISDICTION THEREON IS
WITH THE OFFICE OF THE PRESIDENT, AS CLEARLY MANDATED BY SEC. 2, RULE
XVIII OF THE 1996 RULES OF PROCEDURE OF THE HOUSING AND LAND USE
REGULATORY BOARD.

II.

IT WAS GRAVE ERROR FOR THE COURT OF APPEALS TO HAVE ASSUMED

JURISDICTION OVER THE PETITION BELOW WHEN RESPONDENTS CLEARLY
FAILED TO EXHAUST THE ADMINISTRATIVE REMEDIES AVAILABLE TO THEM
UNDER THE LAW.

III.

THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING

RESPONDENT SANTOS SUBDIVISION HOMEOWNERS ASSOCIATION, A
REGISTERED ORGANIZATION, LACKED THE LEGAL PERSONALITY TO SUE.

THAT
NON-

IV. THE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT RESPONDENT
SANTOS SUBDIVISION HOMEOWNERS ASSOCIATION HAS NO CAUSE OF ACTION
AGAINST PETITIONER; NEITHER WAS SANTOS SUBDIVISION, A NON-ENTITY,
POSSESSED WITH CAPACITY TO BE SUED NOR IS PETITIONER GLORIA SANTOS-

DUEAS A PROPER PARTY TO THE CASE, THE LATTER NOT BEING THE OWNER OR
DEVELOPER OF SANTOS SUBDIVISION.
V.

THE COURT OF APPEALS SERIOUSLY ERRED IN SUBSTITUTING ITS FINDINGS WITH

THAT OF THE ADJUDICATION BOARD AND BOARD OF COMMISSIONERS OF THE
HLURB WHEN THEIR DECISION IS BASED ON SUBSTANTIAL EVIDENCE AND NO
GRAVE ABUSE OF DISCRETION CAN BE ATTRIBUTED TO THEM.

VI.

THE COURT OF APPEALS DEVIATED FROM THE EXISTING LAW AND

JURISPRUDENCE WHEN IT RULED THAT P.D. 957 HAS RETROACTIVE APPLICATION -WHEN THE LAW ITSELF DOES NOT PROVIDE FOR ITS RETROACTIVITY AND THE
EXISTING JURISPRUDENCE THEREON CLEARLY PRONOUNCED THAT IT HAS NO
RETROACTIVE APPLICATION. TO PROVIDE RETROACTIVITY TO P.D. 957 WOULD
CAUSE IMPAIRMENT OF VESTED RIGHTS.

VII. WHILE AS A GENERAL RULE, THE FACTUAL FINDINGS OF THE COURT OF APPEALS
IS BINDING ON THE SUPREME COURT, THE SAME IS NOT TRUE WHEN THE
FORMERS CONCLUSION IS BASED ON SPECULATION, SURMISES AND
CONJECTURES, THE INFERENCE MADE IS MANIFESTLY MISTAKEN OR ABSURD,
THERE IS GRAVE ABUSE OF DISCRETION, JUDGMENT IS BASED ON
MISAPPREHENSION OF FACTS CONTRARY TO THOSE OF THE ADMINISTRATIVE
AGENCY CONCERNED, AND IT WENT BEYOND THE ISSUES OF THE CASE AND THE
SAME IS CONTRARY TO THE ADMISSIONS OF BOTH PARTIES. [18]
To our mind, the foregoing may be reduced into the following issues: (1) the applicability of the doctrine of
non-exhaustion of administrative remedies; (2) the legal capacity of respondent to sue the petitioner herein; and
(3) the retroactivity of P.D. No. 957, as amended by P.D. No. 1216.
On the first issue, the petitioner contends that the filing of CA-G.R. SP No. 51601 was premature as SSHA
failed to exhaust all administrative remedies. Petitioner submits that since Section 1,[19] Rule 43 of the 1997
Rule of Civil Procedure does not mention the HLURB, the respondent should have appealed the decision of the
HLURB Board in HLURB Case No. REM-A-980227-0032 to the Office of the President prior to seeking
judicial relief. In other words, it is the decision of the Office of the President, [20] and not that of the HLURB
Board, which the Court of Appeals may review.
We find petitioners contentions bereft of merit. The principle of non-exhaustion of administrative
remedies is, under the factual circumstances of this case, inapplicable. While this Court has held that before a
party is allowed to seek intervention of the courts, it is a pre condition that he avail himself of all administrative
processes afforded him,[21] nonetheless, said rule is not without exceptions. [22] The doctrine is a relative one and
is flexible depending on the peculiarity and uniqueness of the factual and circumstantial settings of each case.[23]
In the instant case, the questions posed are purely legal, namely: (1) whether the respondent had any right
to demand an open space and the petitioner had any legal obligation to provide said open space within Santos
Subdivision under P.D. No. 957, as amended by P.D. No. 1216, and (2) whether the action had already
prescribed under Article 1145 of the Civil Code. Moreover, the Court of Appeals found that SSHA had sought
relief from the Office of the President, but the latter forwarded the case to the HLURB. In view of the
foregoing, we find that in this particular case, there was no need for SSHA to exhaust all administrative
remedies before seeking judicial relief.
On the second issue, the petitioner claims that respondent SSHA failed to present any evidence showing
that it is a legally organized juridical entity, authorized by law to sue or be sued in its own name. Thus,
pursuant to Section 1, Rule 3[24] of the 1997 Rules of Civil Procedure, it has no legal capacity to file this suit
before the HLURB and the Court of Appeals.
SSHA counters that it has the capacity to sue as an association, since it is a member of the Federation of
Valenzuela Homeowners Association, Inc., which is registered with the Securities and Exchange

Commission. In the alternative, the individual members of SSHA who signed both the resolution and the
complaint in this case may, as natural persons, pursue the action.
There is merit in petitioners contention. Under Section 1, Rule 3 of the Revised Rules of Court, only
natural or juridical persons, or entities authorized by law may be parties in a civil action. Article 44[25] of the
Civil Code enumerates the various classes of juridical persons. Under said Article, an association is considered
a juridical person if the law grants it a personality separate and distinct from that of its members. [26] The records
of the present case are bare of any showing by SSHA that it is an association duly organized under Philippine
law. It was thus an error for the HLURB-NCR Office to give due course to the complaint in HLURB Case No.
REM-070297-9821, given the SSHAs lack of capacity to sue in its own name. Nor was it proper for said
agency to treat the complaint as a suit by all the parties who signed and verified the complaint. The members
cannot represent their association in any suit without valid and legal authority. Neither can their signatures
confer on the association any legal capacity to sue. Nor will the fact that SSHA belongs to the Federation of
Valenzuela Homeowners Association, Inc., suffice to endow SSHA with the personality and capacity to
sue. Mere allegations of membership in a federation are insufficient and inconsequential. The federation itself
has a separate juridical personality and was not impleaded as a party in HLURB Case No. REM-070297-9821
nor in this case. Neither was it shown that the federation was authorized to represent SSHA. Facts showing the
capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or
the legal existence of an organized association of persons that is made a party, must be averred. [27] Hence, for
failing to show that it is a juridical entity, endowed by law with capacity to bring suits in its own name, SSHA is
devoid of any legal capacity, whatsoever, to institute any action.
Anent the third issue, the petitioner ascribes error to the appellate court for holding that P.D. No. 957 has
retroactive application. She points out that there is no retroactivity provision in the said decree. Hence, it
cannot be applied retroactively pursuant to Article 4 [28] of the Civil Code of the Philippines. The same holds
true for P.D. No. 1216, which amended Section 31 of P.D. No. 957 and imposed the open space requirement in
subdivisions. Petitioner stresses that P.D. No. 1216 only took effect on October 14, 1977 or more than ten (10)
years after the approval of the subdivision plans of Cecilio Santos.
Although it may seem that this particular issue, given our ruling on the first issue regarding the lack of
capacity of SSHA to bring any action in its name, is now moot and academic, we are constrained to still address
it.
This petition was brought to us not by respondent SSHA but by Gloria Santos Dueas who assails the
appellate courts finding that our ruling in Eugenio v. Exec. Sec. Drilon[29] allows P.D. No. 957, as amended, to
apply retroactively.
We find merit in petitioners contention.
Eugenio v. Exec. Sec. Drilon is inapplicable. It is not on all fours with the instant case. The issue
in Eugenio was the applicability of P.D. No. 957 to purchase agreements on lots entered into prior to its
enactment where there was non-payment of amortizations, and failure to develop the subdivision. We held
therein that although P.D. No. 957 does not provide for any retroactive application, nonetheless, the intent of the
law of protecting the helpless citizens from the manipulations and machinations of unscrupulous subdivision
and condominium sellers justify its retroactive application to contracts entered into prior to its
enactment. Hence, we ruled that the non-payment of amortizations was justified under Section 23 of the said
decree in view of the failure of the subdivision owner to develop the subdivision project.
Unlike Eugenio, non-development of the subdivision is not present in this case, nor any allegation of nonpayment of amortizations. Further, we have held in a subsequent case[30] that P.D. No. 957, as amended, cannot
be applied retroactively in view of the absence of any express provision on its retroactive application. Thus:
Article 4 of the Civil Code provides that laws shall have no retroactive effect, unless the contrary is
provided. Thus, it is necessary that an express provision for its retroactive application must be made in the

law. There being no such provision in both P.D. Nos. 957 and 1344, these decrees cannot be applied to a
situation that occurred years before their promulgation.
At any rate, our principal concern in this case is Section 31 of P.D. No. 957, an amendment introduced by
P.D. No. 1216. Properly, the question should focus on the retroactivity of P.D. No. 1216 and not P.D. No.
957 per se.
We have examined the text of P.D. No. 1216 and nowhere do we find any clause or provision expressly
providing for its retroactive application. Basic is the rule that no statute, decree, ordinance, rule or regulation
shall be given retrospective effect unless explicitly stated. [31] Hence, there is no legal basis to hold that P.D. No.
1216 should apply retroactively.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals
in CA-G.R. SP No. 51601 are REVERSED and SET ASIDE. The Decision of the HLURB dated January 20,
1999 sustaining that of its Regional Office is AFFIRMED and REINSTATED. No pronouncement as to costs.
SO ORDERED.
5.
[G.R. No. 139479. December 27, 2002]
PHILIPPINE NATIONAL BANK, petitioner, vs. NEPOMUCENO PRODUCTIONS, INC., FILM
ADVERTISING MEDIA EXHIBITIONS, INC. (FAME), LUIS NEPOMUCENO, AMPARO
NEPOMUCENO, and JESUS NEPOMUCENO, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari of the decision of the Court of Appeals in CA-G.R. CV No.
47500[1] affirming the decision of the Regional Trial Court of Pasig City (Branch 155) in Civil Case No. 28809
which set aside the foreclosure proceedings and auction sale of respondents properties and ordered petitioner to
pay attorneys fees.
The relevant facts of the case are undisputed.
On November 28, 1973, petitioner Philippine National Bank (PNB) granted respondents a 4 Million Pesos
(P4,000,000.00) credit line to finance the filming of the movie Pacific Connection. [2] The loan was secured by
mortgages on respondents real and personal properties, to wit: (1) a 7,623 square meters parcel of land located
in Malugay Street, Makati (referred to as the Malugay property); (2) a 3,000 square meters parcel of land
located in North Forbes Park, Makati (referred to as the Forbes property); [3] and (3) several motion picture
equipments.[4] The credit line was later increased to 6 Million Pesos (P6,000,000.00) on January 14, 1974, [5] and
finally to 7.5 Million Pesos (P7,500,000.00) on September 8, 1974.[6]
Respondents defaulted in their obligation. Petitioner sought foreclosure of the mortgaged properties with
the Sheriffs Office of Pasig, Rizal. Initially scheduled on August 12, 1976, the auction sale was re-scheduled
several times without need of republication of the notice of sale, as stipulated in the Agreement to Postpone
Sale,[7] until finally, the auction sale proceeded on December 20, 1976, with petitioner as the highest bidder in
the amount of P10,432,776.97.[8]
Aggrieved, respondents filed Civil Case No. 28809 with the Regional Trial Court of Pasig (Branch 155), an
action for annulment of foreclosure sale and damages with injunction. [9]Respondents contended that the
foreclosure sale is null and void because: (1) the obligation is yet to mature as there were negotiations for an

additional loan amount of P5,000,000.00; (2) lack of publication; (3) the purchase price was grossly inadequate
and unconscionable; and (4) the foreclosure proceedings were initiated by petitioner in bad faith.[10]
In its Decision dated September 16, 1992, the court a quo ordered the annulment and setting aside of the
foreclosure proceedings and auction sale held on December 20, 1976 on the ground that there was lack of
publication of the notice of sale.[11] The court a quo also ordered petitioner to pay P100,000.00 as attorneys
fees.[12]
Dissatisfied, petitioner elevated the case to the Court of Appeals.
During completion stage of the appeal, the appellate court issued a Resolution on January 31, 1996
dismissing petitioners appeal with regard to the Forbes Park property as the same was already the subject of a
Deed of Reconveyance executed by petitioner in favor of respondents on November 22, 1994, as well as a
Compromise Agreement dated September 13, 1994 between the same parties. [13] Said Resolution having become
final and executory on February 26, 1996, entry of judgment was made on March 27, 1996. [14] Hence, resolution
of the appeal in the Court of Appeals pertained only to the Malugay property.
On December 11, 1998, the appellate court rendered the assailed Decision, which affirmed in toto the
decision of the court a quo.[15]
Hence, herein petition for review under Rule 45 of the Rules of Court.
Petitioner maintains that:
I
THE COURT OF APPEALS ERRED IN DECLARING PNBS FORECLOSURE SALE OF
RESPONDENTS PROPERTIES NULL AND VOID FOR LACK OF REPUBLICATION DESPITE THE
PARTIES AGREEMENT TO WAIVE THE REPUBLICATION AND RESPOSTING OF SHERIFFS SALE
II
THE COURT OF APPEALS ERRED IN NOT DECLARING THE RESPONDENTS IN ESTOPPEL TO
ASSAIL THE VALIDITY OF THE FORECLOSURE SALE AFTER THEY INDUCED PNB TO EXECUTE
THE AGREEMENT TO POSTPONE SALE WAIVING THE REPUBLICATION AND REPOSTING OF THE
SHERIFFS NOTICE OF SALE
III
THE COURT OF APPEALS ERRED IN SUSTAINING THAT RESPONDENTS ARE NOT THIRD
PERSONS IN CONTEMPLATION OF THE LAW[16]
The focal issue in this case is whether the parties to the mortgage can validly waive the posting and
publication requirements mandated by Act No. 3135.
We answer in the negative.
Act. No. 3135, as amended, governing extrajudicial foreclosure of mortgages on real property is specific
with regard to the posting and publication requirements of the notice of sale, to wit:
Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public
places of the municipality or city where the property is situated, and if such property is worth more than four
hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a
newspaper of general circulation in the municipality or city.

On this score, it is well settled that what Act No. 3135 requires is: (1) the posting of notices of sale in three
public places; and, (2) the publication of the same in a newspaper of general circulation. [17] Failure to publish
the notice of sale constitutes a jurisdictional defect, which invalidates the sale.[18]
Petitioner, however, insists that the posting and publication requirements can be dispensed with since the
parties agreed in writing that the auction sale may proceed without need of re-publication and re-posting of the
notice of sale.[19]
We are not convinced. Petitioner and respondents have absolutely no right to waive the posting and
publication requirements of Act No. 3135.
In People v. Donato,[20] the Court expounded on what rights and privileges may be waived, viz.:
x x x the doctrine of waiver extends to rights and privileges of any character, and, since the word 'waiver'
covers every conceivable right, it is the general rule that a person may waive any matter which affects his
property, and any alienable right or privilege of which he is the owner or which belongs to him or to which he is
legally entitled, whether secured by contract, conferred with statute, or guaranteed by constitution, provided
such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of
others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene
public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the
advantage of a law or role made solely for the benefit and protection of the individual in his private capacity, if
it can be dispensed with and relinquished without infringing on any public right, and without detriment to the
community at large x x x.
Although the general rule is that any right or privilege conferred by statute or guaranteed by constitution may
be waived, a waiver in derogation of a statutory right is not favored, and a waiver will be inoperative and void if
it infringes on the rights of others, or would be against public policy or morals and the public interest may be
waived.
While it has been stated generally that all personal rights conferred by statute and guaranteed by constitution
may be waived, it has also been said that constitutional provisions intended to protect property may be waived,
and even some of the constitutional rights created to secure personal liberty are subjects of waiver.[21]
While it is established that rights may be waived, Article 6 of the Civil Code explicitly provides that such
waiver is subject to the condition that it is not contrary to law, public order, public policy, morals, or good
customs, or prejudicial to a third person with a right recognized by law.[22]
The principal object of a notice of sale in a foreclosure of mortgage is not so much to notify the mortgagor
as to inform the public generally of the nature and condition of the property to be sold, and of the time, place,
and terms of the sale. Notices are given to secure bidders and prevent a sacrifice of the property. [23] Clearly, the
statutory requirements of posting and publication are mandated, not for the mortgagors benefit, but for the
public or third persons. In fact, personal notice to the mortgagor in extrajudicial foreclosure proceedings is not
even necessary, unless stipulated.[24] As such, it is imbued with public policy considerations and any waiver
thereon would be inconsistent with the intent and letter of Act No. 3135.
Moreover, statutory provisions governing publication of notice of mortgage foreclosure sales must be
strictly complied with and slight deviations therefrom will invalidate the notice and render the sale at the very
least voidable.[25]
"Where required by the statute or by the terms of the foreclosure decree, public notice of the place and time of
the mortgage foreclosure sale must be given, a statute requiring it being held applicable to subsequent sales as
well as to the first advertised sale of the property. It has been held that failure to advertise a mortgage
foreclosure sale in compliance with statutory requirements constitutes a jurisdictional defect invalidating the

sale and that a substantial error or omission in a notice of sale will render the notice insufficient and vitiate the
sale."[26]
Thus, in the recent case of Development Bank of the Philippines v. Aguirre,[27] the foreclosure sale held
more than two (2) months after the published date of sale was considered void for lack of republication.
[28]
Similarly, in the instant case, the lack of republication of the notice of the December 20, 1976 foreclosure
sale renders it void.
The right of a bank to foreclose a mortgage upon the mortgagors failure to pay his obligation must be
exercised according to its clear mandate, and every requirement of the law must be complied with, lest the valid
exercise of the right would end.[29] The exercise of a right ends when the right disappears, and it disappears
when it is abused especially to the prejudice of others.[30]
We also cannot accept petitioners argument that respondents should be held in estoppel for inducing the
former to re-schedule the sale without need of republication and reposting of the notice of sale.
Records show that respondents, indeed, requested for the postponement of the foreclosure sale. [31] That,
however, is all that respondents sought. Nowhere in the records was it shown that respondents purposely sought
re-scheduling of the sale without need of republication and reposting of the notice of sale. To request
postponement of the sale is one thing; to request it without need of compliance with the statutory requirements
is another. Respondents, therefore, did not commit any act that would have estopped them from questioning the
validity of the foreclosure sale for non-compliance with Act No. 3135.
In addition, the Agreement to Postpone Sale signed by respondents was obviously prepared solely by
petitioner.[32] A scrutiny of the agreement discloses that it is in a ready-made form and the only participation of
respondents is to affix or adhere their signature thereto. It therefore partakes of the nature of a contract of
adhesion, i.e., one in which one of the contracting parties imposes a ready-made form of contract which the
other party may accept or reject, but cannot modify.[33] One party prepares the stipulation in the contract, while
the other party merely affixes his signature or his adhesion thereto, giving no room for negotiation, and
depriving the latter of the opportunity to bargain on equal footing. [34] As such, their terms are construed strictly
against the party who drafted it.[35]
Finally, while we rule that the appellate court did not commit any error in affirming the decision of the
court a quo, we find the award of P100,000.00 as attorney's fees to be excessive. Article 2208 of the Civil
Code allows the award of such fees when its claimant is compelled to litigate with third persons or to incur
expenses to protect its just and valid claim. In view of petitioner's foreclosure of the property without
complying with the statutory requirements, [36] the award of attorney's fees of P25,000.00 is just, fair, and
reasonable.
WHEREFORE, the Decision dated December 10, 1998 in CA-G.R. CV No. 47500 is hereby AFFIRMED
with modification that the award of attorneys fees is reduced to P25,000.00.
No pronouncement as to costs.
SO ORDERED.
6.
FILINVEST DEVELOPMENT
CORPORATION,
Petitioner,

- versus -

G.R. No. 146941

Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,

CHICO-NAZARIO, and
NACHURA, JJ.
COMMISSIONER OF INTERNAL REVENUE
and COURT OF TAX APPEALS,
Respondents.

Promulgated:
August 9, 2007

x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Civil Procedure
filed by Filinvest Development Corporation (Filinvest) assailing the Decision [1] of the Court of Appeals (CA),
dated August 18, 2000, and its Resolution[2] dated January 25, 2001 in CA-G.R. SP No. 56800.
The case stems from the claim for refund, or in the alternative, the issuance of a tax credit certificate
(TCC), filed by petitioner Filinvest with respondent Commissioner of Internal Revenue (CIR) in the amount
of P4,178,134.00 representing excess creditable withholding taxes for taxable years 1994, 1995, and 1996.[3]
When the CIR had not resolved petitioners claim for refund and the two-year prescriptive period was
about to lapse, the latter filed a Petition for Review [4] with the Court of Tax Appeals. In the petition before the
CTA, docketed as CTA Case No. 5603, petitioner prayed for refund, or in the alternative, the issuance of a TCC,
in the amount ofP3,173,868.00. The amount of P1,004,236.00 representing excess/unutilized creditable
withholding taxes for 1994 was no longer included as it was already barred by the two-year prescriptive period.
On August 13, 1999, the CTA rendered a Decision[5] dismissing the petition for review for insufficiency
of evidence because petitioner failed to present in evidence its 1997 income tax return. The CTA held that since
petitioner indicated in its 1996 Income Tax Return that it has opted to carry over any excess income tax paid to
the following year, there was no way for the court to determine with particular certainty if petitioner Filinvest
indeed applied or credited the refundable amount to its 1997 tax liability, if there were any.
Petitioner filed a motion for reconsideration, which was denied on December 23, 1999.[6]
Subsequently, petitioner filed a Petition for Review[7] before the CA on January 21, 2000. The CA
dismissed the petition on the ground of failure to attach the proof of authority of Efren M. Reyes, who executed
the certification of non-forum shopping, to sign for the corporation. [8] On motion for reconsideration, the CA set
aside the January 26, 2000 Resolution and reinstated the case.[9]

On August 18, 2000, the CA issued the assailed Decision[10] denying Filinvests petition for review, thus:
Petitioner fails to discharge the burden of being entitled to the tax refund sought for
considering that evidence on hand shows that although petitioner was able to comply with the
requirements which a taxpayer must have to comply before a claim for a refund would be
sustained, yet, it has failed to present vital documents (sic), its Income Tax Return for the year
1997, which would show whether or not petitioner has applied or credited the refundable amount
sought for in its 1997 liability, if there be any, since per its 1996 Income Tax Return, it readily
revealed that petitioner opted to carry over the excess income tax paid to the succeeding year and
it is only from petitioners Income Tax Return for the year 1997 that this fact can be determined
with certainty and the non-presentation of this vital document proved fatal to the petitioners
cause of action.
xxxx
WHEREFORE, FOREGOING PREMISES CONSIDERED, the petition is
hereby DENIED for lack of merit. The assailed Decision dated August 13, 1999 of the Court of
Tax Appeals isaffirmed. Costs against petitioner.
SO ORDERED.

Petitioner filed a motion

Resolution[11] dated January 25, 2001.

for

reconsideration,

which

the

CA denied

in

the

assailed

Petitioner filed a petition for review before this Court but the same was denied on April 18, 2001 for
failure to show that the appellate court committed reversible error, and for failure to comply with the
requirements of Section 4, Rule 7 of the 1997 Rules of Civil Procedure in the execution of the verification.
[12]
Petitioner filed a motion for reconsideration, which the Court granted on April 3, 2002.[13] Hence, this
petition for review.
In this petition for review, petitioner Filinvest alleges that the CA erred in (1) denying its claim for tax
refund on the sole ground that it failed to present in evidence its Annual Income Tax Return for Corporations for
1997 despite holding that it had complied with all the requirements to sustain a claim for tax refund; (2) relying
on CTA cases cited in its Decision as jurisprudential basis to support its ruling; (3) not ruling that Section 34,
Rule 132 of the Revised Rules of Court, being a procedural rule, should be liberally construed in order that
substantial justice due petitioner shall have been served; and (4) not ruling that, petitioner having proved that it
paid excess taxes for taxable years 1995 and 1996, has shifted the burden of evidence to respondent CIR to
show the factual basis to deny petitioners claim.[14]
On the other hand, respondent CIR argues that in claims for tax refund, the burden of proof of
refundability rests with claimant, and considering the rules on formal offer of evidence, the CA did not err in
ruling against petitioner due to its failure to present evidence vital to sustain its claim. Likewise, respondent

maintains that the CA did not err in relying on CTA cases because the latter is an authority on matters of
taxation and therefore its resolutions carry great weight.[15]
The main issue for our resolution is whether petitioner is entitled to the tax refund or tax credit it seeks.
We rule in the affirmative.
It is settled that the factual findings of the CTA, as affirmed by the Court of Appeals, are entitled to the
highest respect[16] and will not be disturbed on appeal unless it is shown that the lower courts committed gross
error in the appreciation of facts.[17]
In the case at bench, the CA erred in ruling that petitioner failed to discharge the burden of proving that
it is entitled to the refund because of the latters failure to attach its 1997 Income Tax Return.
The appellate court itself acknowledges that petitioner had complied with the requirements to sustain a
claim for tax refund or credit.[18] Yet it held that petitioner fail[ed] to discharge the burden of being entitled to
the tax refund sought for considering the evidence on hand shows that x x x it has failed to present [a] vital
document[], its Income Tax Return for the year 1997 x x x.[19]
Both the CTA and the CA, citing the case of F. Jacinto Group, Inc. v. CIR[20] and Citibank N.A. v. Court
of Appeals, et al.,[21] determined the requisites to sustain a claim for refund, thus:
(1)
That the claim for refund was filed within two years as prescribed under
Section 230 of the National Internal Revenue Code;
(2)
That the income upon which the taxes were withheld were included in the
return of the recipient; and
(3)
That the fact of withholding is established by a copy of a statement duly
issued by the payor (withholding agent) to the payee showing the amount paid and the amount of
tax withheld therefrom.[22]

In the proceedings before the CTA, petitioner presented in evidence its letter of claim for refund before
the BIR to show that it was made within the two-year reglementary period; [23] its Income Tax Returns for the
years 1995 and 1996 to prove its total creditable withholding tax and the fact that the amounts were declared as
part of its gross income;[24] and several certificates of income tax withheld at source corresponding to the period
of claim to prove the total amount of the taxes erroneously withheld. [25] More importantly, petitioner attached its
1997 Income Tax Return to its Motion for Reconsideration, making the same part of the records of the case. The
CTA cannot simply ignore this document.

Thus, we hold that petitioner has complied with all the requirements to prove its claim for tax refund.
The CA, therefore, erred in denying the petition for review of the CTAs denial of petitioners claim for tax
refund on the ground that it failed to present its 1997 Income Tax Return.
The CAs reliance on Rule 132, Section 34 [26] of the Rules on Evidence is misplaced. This provision
must be taken in the light of Republic Act No. 1125, as amended, the law creating the CTA, which provides that
proceedings therein shall not be governed strictly by technical rules of evidence. [27] Moreover, this Court has
held time and again that technicalities should not be used to defeat substantive rights, especially those that have
been established as a matter of fact.
The CA, likewise, erred in relying on CTA decisions as jurisprudential basis for its decision. As this
Court has held in the past:
[B]y tradition and in our system of judicial administration this Court has the last word on what
the law is, and that its decisions applying or interpreting the laws or the Constitution form part of
the legal system of the country, all other courts should take their bearings from the decisions of
this Court, ever mindful of what this Court said fifty-seven years ago in People vs. Vera that [a]
becoming modesty of inferior courts demands conscious realization of the position that they
occupy in the interrelation and operation of the integrated judicial system of the nation.[28]

The principle of stare decisis et non quieta movere, as embodied in Article 8 of the Civil Code of
the Philippines,[29] enjoins adherence to judicial precedents. It requires our courts to follow a rule already
established in a final decision of the Supreme Court. That decision becomes a judicial precedent to be followed
in subsequent cases by all courts in the land. [30]
This is not the first time this issue has come before this Court. The case of BPI-Family Savings Bank v.
Court of Appeals,[31] involves factual antecedents similar to the present case.
BPI Family Bank involves a claim for tax refund representing therein petitioner's taxes withheld for the
year 1989. In petitioners 1989 Income Tax Return, petitioner had a total refundable amount of P297,492.00
inclusive of the P112,491.00 being claimed as tax refund. However, petitioner declared in the same 1989
Income Tax Return that the said total refundable amount will be applied as tax credit to the succeeding taxable
year. On October 11, 1990, petitioner filed a written claim for refund in the amount of P112,491.00 before the
CIR alleging that it did not apply the 1989 refundable amount to its 1990 Annual Income Tax Return or other
tax liabilities due to alleged business losses it incurred for the same year. Without waiting for the CIR to act on
the claim for refund, petitioner filed a petition for review with the CTA, seeking the refund of P112,491.00.
The CTA dismissed the petition on the ground that petitioner failed to present as evidence its Corporate
Annual Income Tax Return for 1990 to establish the fact that petitioner had not yet credited the refundable
amount. Petitioner filed a motion for reconsideration. However, the same was denied on May 6, 1994. The CA

affirmed the CTA decision, ruling that it was incumbent upon petitioner to show proof that it had not credited
the amount of P297,492.00 to its 1990 Annual Income Tax Return as it had previously declared in its 1989
Income Tax Return that the amount would be applied as a tax credit in 1990. Petitioner having failed to submit
such requirement, the CA said there is no basis to grant the claim for refund, because tax refunds are in the
nature of tax exemptions and are regarded as in derogation of sovereign authority to be construed strictissimi
jurisagainst the person or entity claiming the exemption. In other words, the burden of proof rests upon the
taxpayer, according to the CA.
In reversing the CA and ruling that petitioner was entitled to the refund, this Court held:
More important, a copy of the Final Adjustment Return for 1990 was attached to
petitioner's Motion for Reconsideration filed before the CTA. A final adjustment return shows
whether a corporation incurred a loss or gained a profit during the taxable year. In this case, that
Return clearly showed that petitioner incurred P52,480,173 as net loss in 1990. Clearly, it could
not have applied the amount in dispute as a tax credit. Again, the BIR did not controvert the
veracity of the said return. It did not even file an opposition to petitioner's Motion and the 1990
Final Adjustment Return attached thereto. In denying the Motion for Reconsideration, however,
the CTA ignored the said Return. In the same vein, the CA did not pass upon that significant
document.
True, strict procedural rules generally frown upon the submission of the Return after the
trial. The law creating the Court of Tax Appeals, however, specifically provides that proceedings
before it shall not be governed strictly by the technical rules of evidence. The paramount
consideration remains the ascertainment of truth. Verily, the quest for orderly presentation of
issues is not an absolute. It should not bar courts from considering undisputed facts to arrive at a
just determination of a controversy.
In the present case, the Return attached to the Motion for Reconsideration clearly showed
that petitioner suffered a net loss in 1990. Contrary to the holding of the CA and the CTA,
petitioner could not have applied the amount as a tax credit. In failing to consider the said
Return, as well as the other documentary evidence presented during the trial, the appellate court
committed a reversible error.
It should be stressed that the rationale of the rules of procedure is to secure a just
determination of every action. They are tools designed to facilitate the attainment of justice. But
there can be no just determination of the present action if we ignore, on grounds of strict
technicality, the Return submitted before the CTA and even before this Court. To repeat, the
undisputed fact is that petitioner suffered a net loss in 1990; accordingly, it incurred no tax
liability to which the tax credit could be applied. Consequently, there is no reason for the BIR
and this Court to withhold the tax refund which rightfully belongs to the petitioner.[32]

We find the foregoing disquisition applicable to the present case.

As in the BPI Family Bank case, herein petitioners claim for refund is anchored on the following
provisions of the National Internal Revenue Code (NIRC) then in effect:

SEC. 69. Final Adjustment Return. Every corporation liable to tax under Section 24
shall file a final adjustment return covering the total taxable income for the preceding calendar or
fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not
equal to the total [tax] due on the entire taxable net income of that year the corporation shall
either:
(a)
(b)

Pay the excess tax still due; or

Be refunded the excess amount paid, as the case may be.

In case the corporation is entitled to a refund of the excess estimated quarterly income
taxes paid, the refundable amount shown on its final adjustment return may be credited against
the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable
year.
SEC. 230. Recovery of tax erroneously or illegally collected. No suit or proceeding
shall be maintained in any court for the recovery of any national internal revenue tax hereafter
alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to
have been collected without authority or of any sum alleged to have been excessive or in any
manner wrongfully collected, until a claim for refund or credit has been duly filed with the
Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty,
or sum has been paid under protest or duress.
In any case, no such suit or proceeding shall be begun after the expiration of two years
from the date of payment of the tax or penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may, even without a written
claim therefor, refund or credit any tax, where on the face of the return upon which
payment was made, such payment appears clearly to have been erroneously
paid. (Emphasis supplied)

On the other hand, Revenue Regulation No. 12-94, Section 10 provides for the requirements to claim for
tax credit or refund, to wit:
Section 10. Claim for Tax Credit or Refund.
(a)
Claims for Tax Credit or Refund of income tax deducted and withheld on income
payments shall be given due course only when it is shown on the return that the income payment
received has been declared as part of the gross income and the fact of withholding is established
by a copy of the Withholding Tax Statement duly issued by the payor to the payee showing the
amount paid and the amount of tax withheld therefrom.
(b)
Excess Credits. A taxpayer's excess expanded withholding tax credits for the
taxable quarter/taxable year shall automatically be allowed as a credit for purposes of filing his
income tax return for the taxable quarter/taxable year immediately succeeding the taxable
quarter/taxable year in which the aforesaid excess credit arose, provided, however, he submits
with his income tax return a copy of his income tax return for the aforesaid previous taxable
period showing the amount of his aforementioned excess withholding tax credits.
If the taxpayer, in lieu of the aforesaid automatic application of his excess credit, wants a
cash refund or a tax credit certificate for use in payment of his other national internal tax
liabilities, he shall make a written request therefor. Upon filing of his request, the taxpayer's

income tax return showing the excess expanded withholding tax credits shall be examined.
The excess expanded withholding tax, if any, shall be determined and refunded/credited to
the taxpayer-applicant. The refund/credit shall be made within a period of sixty (60) days from
date of the taxpayer's request provided, however, that the taxpayer-applicant submitted for audit
all his pertinent accounting records and that the aforesaid records established the veracity of his
claim for a refund/credit of his excess expanded withholding tax credits. (Emphasis supplied)

It is true that herein petitioner has the burden of proving that it is entitled to refund. However, we have
already held that once the claimant has submitted all the required documents, it is the function of the BIR to
assess these documents with purposeful dispatch.[33]
In proving the inclusion of the income payments which formed the basis of the withholding taxes and
the fact of withholding, this Court has held that:
[D]etailed proof of the truthfulness of each and every item in the income tax return is not
required. That function is lodged in the Commissioner of Internal Revenue by the NIRC which
requires the Commissioner to assess internal revenue taxes within three years after the last day
prescribed by law for the filing of the return. x x x The grant of a refund is founded on the
assumption that the tax return is valid; that is, the facts stated therein are true and correct. In
fact, even without petitioner's tax claim, the Commissioner can proceed to examine the books,
records of the petitioner-bank, or any data which may be relevant or material in accordance with
Section 16 of the present NIRC.[34]

It is worth noting that under Section 230 of the NIRC and Section 10 of Revenue Regulation No. 12-84,
the CIR is given the power to grant a tax credit or refund even without a written claim therefor, if the former
determines from the face of the return that payment had clearly been erroneously made. Evidently, the CIRs
function is not merely to receive the claims for refund but it is also given the positive duty to determine the
veracity of such claim.
In another case, the Court held that while a taxpayer is given the choice whether to claim for refund or
have its excess taxes applied as tax credit for the succeeding taxable year, such election is not final. Prior
verification and approval by the Commissioner of Internal Revenue is required. The availment of the remedy of
tax credit is not absolute and mandatory. It does not confer an absolute right on the taxpayer to avail of the tax
credit scheme if it so chooses. Neither does it impose a duty on the part of the government to sit back and allow
an important facet of tax collection to be at the sole control and discretion of the taxpayer.[35]
In the case of San Carlos Milling Co., Inc. v. CIR,[36] the Court struck down therein petitioners attempt
to unilaterally declare as tax credit its excess estimated quarterly income taxes from the previous year. The
Court explained, thus:
The respondent Court held that the choice of a corporate taxpayer for an automatic tax
credit does not ipso facto confer on it the right to immediately avail of the same. Respondent

court went on to emphasize the need for an investigation to ascertain the correctness of the
corporate returns and the amount sought to be credited. We agree.
It is difficult to see by what process of ratiocination petitioner insists on the literal
interpretation of the word automatic. Such literal interpretation has been discussed and
precluded by the respondent court in its decision of 23 December 1991 where, as aforestated, it
ruled that once a taxpayer opts for either a refund or the automatic tax credit scheme, and
signified his option in accordance with the regulation, this does not ipso facto confer on him the
right to avail of the same immediately. An investigation, as a matter of procedure, is necessary to
enable the Commissioner to determine the correctness of the petitioner's returns, and the tax
amount to be credited.
Prior approval by the Commissioner of Internal Revenue of the tax credit under then
section 86 (now section 69) of the Tax Code would appear to be the most reasonable
interpretation to be given to said section. An opportunity must be given the internal revenue
branch of the government to investigate and confirm the veracity of the claims of the taxpayer.
The absolute freedom that petitioner seeks to automatically credit tax payments against tax
liabilities for a succeeding taxable year, can easily give rise to confusion and abuse, depriving the
government of authority and control over the manner by which the taxpayers credit and offset
their tax liabilities, not to mention the resultant loss of revenue to the government under such a
scheme.

Hence we do not agree with respondents contention that the actual carry-over of the excess
withholding tax to the next quarter virtually negates a refund of the excess since it is considered to have been
automatically applied to any income of that period. However, even assuming that petitioner had the power to
automatically apply its excess withholding taxes to subsequent payments, the fact remains that, in this particular
case, it could not have done so given its business losses.
We must also point out that, simply by exercising the CIRs power to examine and verify petitioners
claim for tax exemption as granted by law, respondent CIR could have easily verified petitioners claim by
presenting the latters 1997 Income Tax Return, the original of which it has in its files. However, records show
that in the proceedings before the CTA, respondent CIR failed to comment on petitioners formal offer of
evidence,[37] waived its right to present its own evidence, [38] and failed to file its memorandum. [39]Neither did it
file an opposition to petitioners motion to reconsider the CTA decision to which the 1997 Income Tax Return
was appended.
That no one shall unjustly enrich oneself at the expense of another is a long-standing principle prevailing
in our legal system. This applies not only to individuals but to the State as well. In the field of taxation where
the State exacts strict compliance upon its citizens, the State must likewise deal with taxpayers with fairness and
honesty. The harsh power of taxation must be tempered with evenhandedness. Hence, under the principle
of solutio indebiti,[40] the Government has to restore to petitioner the sums representing erroneous payments of
taxes.

WHEREFORE, premises considered, the petition is GRANTED. The CA decision and the CTA
decision are REVERSED and SET ASIDE. Respondent Commissioner of Internal Revenue is ORDERED to
refund, or in the alternative, issue a Tax Credit Certificate to petitioner Filinvest Development Corporation in
the amount ofP3,173,868.00.
SO ORDERED.
7.
[G.R. No. 134241. August 11, 2003]
DAVID REYES (Substituted by Victoria R. Fabella), petitioner, vs. JOSE LIM, CHUY CHENG KENG
and HARRISON LUMBER, INC., respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari of the Decision[1] dated 12 May 1998 of the Court of Appeals in
CA-G.R. SP No. 46224. The Court of Appeals dismissed the petition for certiorari assailing the Orders dated 6
March 1997, 3 July 1997 and 3 October 1997 of the Regional Trial Court of Paranaque, Branch 260 [2] (trial
court) in Civil Case No. 95-032.
The Facts
On 23 March 1995, petitioner David Reyes (Reyes) filed before the trial court a complaint for annulment
of contract and damages against respondents Jose Lim (Lim), Chuy Cheng Keng (Keng) and Harrison
Lumber, Inc. (Harrison Lumber).
The complaint[3] alleged that on 7 November 1994, Reyes as seller and Lim as buyer entered into a contract
to sell (Contract to Sell) a parcel of land (Property) located along F.B. Harrison Street, Pasay City. Harrison
Lumber occupied the Property as lessee with a monthly rental of P35,000. The Contract to Sell provided for the
following terms and conditions:
1.
The total consideration for the purchase of the aforedescribed parcel of land together with the perimeter
walls found therein is TWENTY EIGHT MILLION (P28,000,000.00) PESOS payable as follows:
(a)

TEN MILLION (P10,000,000.00) PESOS upon signing of this Contract to Sell;

(b)
The balance of EIGHTEEN MILLION (P18,000,000.00) PESOS shall be paid on or before March 8,
1995 at 9:30 A.M. at a bank to be designated by the Buyer but upon the complete vacation of all the tenants or
occupants of the property and execution of the Deed of Absolute Sale. However, if the tenants or occupants
have vacated the premises earlier than March 8, 1995, the VENDOR shall give the VENDEE at least one week
advance notice for the payment of the balance and execution of the Deed of Absolute Sale.

2.
That in the event, the tenants or occupants of the premises subject of this sale shall not vacate the
premises on March 8, 1995 as stated above, the VENDEE shall withhold the payment of the balance of
P18,000,000.00 and the VENDOR agrees to pay a penalty of Four percent (4%) per month to the herein
VENDEE based on the amount of the downpayment of TEN MILLION (P10,000,000.00) PESOS until the
complete vacation of the premises by the tenants therein.[4]
The complaint claimed that Reyes had informed Harrison Lumber to vacate the Property before the end of
January 1995. Reyes also informed Keng [5] and Harrison Lumber that if they failed to vacate by 8 March
1995, he would hold them liable for the penalty of P400,000 a month as provided in the Contract to Sell. The
complaint further alleged that Lim connived with Harrison Lumber not to vacate the Property until the
P400,000 monthly penalty would have accumulated and equaled the unpaid purchase price of P18,000,000.
On 3 May 1995, Keng and Harrison Lumber filed their Answer [6] denying they connived with Lim to
defraud Reyes. Keng and Harrison Lumber alleged that Reyes approved their request for an extension of time to
vacate the Property due to their difficulty in finding a new location for their business. Harrison Lumber claimed
that as of March 1995, it had already started transferring some of its merchandise to its new business location in
Malabon.[7]
On 31 May 1995, Lim filed his Answer [8] stating that he was ready and willing to pay the balance of the
purchase price on or before 8 March 1995. Lim requested a meeting with Reyes through the latters daughter on
the signing of the Deed of Absolute Sale and the payment of the balance but Reyes kept postponing their
meeting. On 9 March 1995, Reyes offered to return the P10 million down payment to Lim because Reyes was
having problems in removing the lessee from the Property. Lim rejected Reyes offer and proceeded to verify
the status of Reyes title to the Property. Lim learned that Reyes had already sold the Property to Line One
Foods Corporation (Line One) on 1 March 1995 for P16,782,840. After the registration of the Deed of
Absolute Sale, the Register of Deeds issued to Line One TCT No. 134767 covering the Property. Lim denied
conniving with Keng and Harrison Lumber to defraud Reyes.
On 2 November 1995, Reyes filed a Motion for Leave to File Amended Complaint due to supervening
facts. These included the filing by Lim of a complaint for estafa against Reyes as well as an action for specific
performance and nullification of sale and title plus damages before another trial court. [9] The trial court granted
the motion in an Order dated 23 November 1995.
In his Amended Answer dated 18 January 1996,[10] Lim prayed for the cancellation of the Contract to Sell
and for the issuance of a writ of preliminary attachment against Reyes. The trial court denied the prayer for a
writ of preliminary attachment in an Order dated 7 October 1996.
On 6 March 1997, Lim requested in open court that Reyes be ordered to deposit the P10 million down
payment with the cashier of the Regional Trial Court of Paraaque. The trial court granted this motion.
On 25 March 1997, Reyes filed a Motion to Set Aside the Order dated 6 March 1997 on the ground the
Order practically granted the reliefs Lim prayed for in his Amended Answer. [11] The trial court denied Reyes
motion in an Order[12] dated 3 July 1997. Citing Article 1385 of the Civil Code, the trial court ruled that an
action for rescission could prosper only if the party demanding rescission can return whatever he may be
obliged to restore should the court grant the rescission.
The trial court denied Reyes Motion for Reconsideration in its Order [13] dated 3 October 1997. In the same
order, the trial court directed Reyes to deposit the P10 million down payment with the Clerk of Court on or
before 30 October 1997.
On 8 December 1997, Reyes [14] filed a Petition for Certiorari[15] with the Court of Appeals. Reyes prayed
that the Orders of the trial court dated 6 March 1997, 3 July 1997 and 3 October 1997 be set aside for having
been issued with grave abuse of discretion amounting to lack of jurisdiction. On 12 May 1998, the Court of
Appeals dismissed the petition for lack of merit.
Hence, this petition for review.

The Ruling of the Court of Appeals

The Court of Appeals ruled the trial court could validly issue the assailed orders in the exercise of its equity
jurisdiction. The court may grant equitable reliefs to breathe life and force to substantive law such as Article
1385[16] of the Civil Code since the provisional remedies under the Rules of Court do not apply to this case.
The Court of Appeals held the assailed orders merely directed Reyes to deposit the P10 million to the
custody of the trial court to protect the interest of Lim who paid the amount to Reyes as down payment. This did
not mean the money would be returned automatically to Lim.
The Issues
Reyes raises the following issues:
1.

Whether the Court of Appeals erred in holding the trial court could issue the questioned Orders
dated March 6, 1997, July 3, 1997 and October 3, 1997, requiring petitioner David Reyes to
deposit the amount of Ten Million Pesos (P10,000,000.00) during the pendency of the action,
when deposit is not among the provisional remedies enumerated in Rule 57 to 61 of the 1997
Rules on Civil Procedure.

2.

Whether the Court of Appeals erred in finding the trial court could issue the questioned Orders
on grounds of equity when there is an applicable law on the matter, that is, Rules 57 to 61 of the
1997 Rules on Civil Procedure.[17]
The Courts Ruling

Reyes contentions are without merit.

Reyes points out that deposit is not among the provisional remedies enumerated in the 1997 Rules of Civil
Procedure. Reyes stresses the enumeration in the Rules is exclusive. Not one of the provisional remedies in
Rules 57 to 61[18] applies to this case. Reyes argues that a court cannot apply equity and require deposit if the
law already prescribes the specific provisional remedies which do not include deposit. Reyes invokes the
principle that equity is applied only in the absence of, and never against, statutory law or x x x judicial rules of
procedure.[19] Reyes adds the fact that the provisional remedies do not include deposit is a matter of dura lex
sed lex.[20]
The instant case, however, is precisely one where there is a hiatus in the law and in the Rules of Court. If
left alone, the hiatus will result in unjust enrichment to Reyes at the expense of Lim. The hiatus may also
imperil restitution, which is a precondition to the rescission of the Contract to Sell that Reyes himself seeks.
This is not a case of equity overruling a positive provision of law or judicial rule for there is none that governs
this particular case. This is a case of silence or insufficiency of the law and the Rules of Court. In this case,
Article 9 of the Civil Code expressly mandates the courts to make a ruling despite the silence, obscurity or
insufficiency of the laws.[21] This calls for the application of equity,[22] which fills the open spaces in the
law.[23]
Thus, the trial court in the exercise of its equity jurisdiction may validly order the deposit of the P10
million down payment in court. The purpose of the exercise of equity jurisdiction in this case is to prevent
unjust enrichment and to ensure restitution. Equity jurisdiction aims to do complete justice in cases where a
court of law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of

its statutory or legal jurisdiction.[24] Equity is the principle by which substantial justice may be attained in cases
where the prescribed or customary forms of ordinary law are inadequate.[25]
Reyes is seeking rescission of the Contract to Sell. In his amended answer, Lim is also seeking cancellation
of the Contract to Sell. The trial court then ordered Reyes to deposit in court the P10 million down payment that
Lim made under the Contract to Sell. Reyes admits receipt of the P10 million down payment but opposes the
order to deposit the amount in court. Reyes contends that prior to a judgment annulling the Contract to Sell, he
has the right to use, possess and enjoy [26] the P10 million as its owner[27] unless the court orders its
preliminary attachment.[28]
To subscribe to Reyes contention will unjustly enrich Reyes at the expense of Lim. Reyes sold to Line One
the Property even before the balance of P18 million under the Contract to Sell with Lim became due on 8 March
1995. On 1 March 1995, Reyes signed a Deed of Absolute Sale [29] in favor of Line One. On 3 March 1995, the
Register of Deeds issued TCT No. 134767 [30] in the name of Line One.[31] Reyes cannot claim ownership of the
P10 million down payment because Reyes had already sold to another buyer the Property for which Lim made
the down payment. In fact, in his Comment [32] dated 20 March 1996, Reyes reiterated his offer to return to Lim
the P10 million down payment.
On balance, it is unreasonable and unjust for Reyes to object to the deposit of the P10 million down
payment. The application of equity always involves a balancing of the equities in a particular case, a matter
addressed to the sound discretion of the court. Here, we find the equities weigh heavily in favor of Lim, who
paid the P10 million down payment in good faith only to discover later that Reyes had subsequently sold the
Property to another buyer.
In Eternal Gardens Memorial Parks Corp. v. IAC,[33] this Court held the plaintiff could not continue to
benefit from the property or funds in litigation during the pendency of the suit at the expense of whomever the
court might ultimately adjudge as the lawful owner. The Court declared:
In the case at bar, a careful analysis of the records will show that petitioner admitted among others in its
complaint in Interpleader that it is still obligated to pay certain amounts to private respondent; that it claims no
interest in such amounts due and is willing to pay whoever is declared entitled to said amounts. x x x
Under the circumstances, there appears to be no plausible reason for petitioners objections to the deposit of the
amounts in litigation after having asked for the assistance of the lower court by filing a complaint for
interpleader where the deposit of aforesaid amounts is not only required by the nature of the action but is a
contractual obligation of the petitioner under the Land Development Program (Rollo, p. 252).
There is also no plausible or justifiable reason for Reyes to object to the deposit of the P10 million down
payment in court. The Contract to Sell can no longer be enforced because Reyes himself subsequently sold the
Property to Line One. Both Reyes and Lim are now seeking rescission of the Contract to Sell. Under Article
1385 of the Civil Code, rescission creates the obligation to return the things that are the object of the contract.
Rescission is possible only when the person demanding rescission can return whatever he may be obliged to
restore. A court of equity will not rescind a contract unless there is restitution, that is, the parties are restored to
the status quo ante.[34]
Thus, since Reyes is demanding to rescind the Contract to Sell, he cannot refuse to deposit the P10 million
down payment in court.[35] Such deposit will ensure restitution of the P10 million to its rightful owner. Lim, on
the other hand, has nothing to refund, as he has not received anything under the Contract to Sell.[36]
In Government of the Philippine Islands v. Wagner and Cleland Wagner,[37] the Court ruled the refund of
amounts received under a contract is a precondition to the rescission of the contract. The Court declared:
The Government, having asked for rescission, must restore to the defendants whatever it has received under the
contract. It will only be just if, as a condition to rescission, the Government be required to refund to the

defendants an amount equal to the purchase price, plus the sums expended by them in improving the land. (Civil
Code, art. 1295.)
The principle that no person may unjustly enrich himself at the expense of another is embodied in Article
22[38] of the Civil Code. This principle applies not only to substantive rights but also to procedural remedies.
One condition for invoking this principle is that the aggrieved party has no other action based on contract,
quasi-contract, crime, quasi-delict or any other provision of law.[39]Courts can extend this condition to the hiatus
in the Rules of Court where the aggrieved party, during the pendency of the case, has no other recourse based on
the provisional remedies of the Rules of Court.
Thus, a court may not permit a seller to retain, pendente lite, money paid by a buyer if the seller himself
seeks rescission of the sale because he has subsequently sold the same property to another buyer.[40] By seeking
rescission, a seller necessarily offers to return what he has received from the buyer. Such a seller may not take
back his offer if the court deems it equitable, to prevent unjust enrichment and ensure restitution, to put the
money in judicial deposit.
There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person
retains money or property of another against the fundamental principles of justice, equity and good conscience.
[41]
In this case, it was just, equitable and proper for the trial court to order the deposit of the P10 million down
payment to prevent unjust enrichment by Reyes at the expense of Lim.[42]
WHEREFORE, we AFFIRM the Decision of the Court of Appeals.
SO ORDERED.
8.
G.R. No. 174689
October 22, 2007
ROMMEL JACINTO DANTES SILVERIO, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, respondent.
DECISION
CORONA, J.:
When God created man, He made him in the likeness of God; He created them male and female.
(Genesis 5:1-2)
Amihan gazed upon the bamboo reed planted by Bathala and she heard voices coming from inside the
bamboo. "Oh North Wind! North Wind! Please let us out!," the voices said. She pecked the reed once,
then twice. All of a sudden, the bamboo cracked and slit open. Out came two human beings; one was a
male and the other was a female. Amihan named the man "Malakas" (Strong) and the woman
"Maganda" (Beautiful). (The Legend of Malakas and Maganda)
When is a man a man and when is a woman a woman? In particular, does the law recognize the changes made
by a physician using scalpel, drugs and counseling with regard to a persons sex? May a person successfully
petition for a change of name and sex appearing in the birth certificate to reflect the result of a sex reassignment
surgery?
On November 26, 2002, petitioner Rommel Jacinto Dantes Silverio filed a petition for the change of his first
name and sex in his birth certificate in the Regional Trial Court of Manila, Branch 8. The petition, docketed as
SP Case No. 02-105207, impleaded the civil registrar of Manila as respondent.

Petitioner alleged in his petition that he was born in the City of Manila to the spouses Melecio Petines Silverio
and Anita Aquino Dantes on April 4, 1962. His name was registered as "Rommel Jacinto Dantes Silverio" in his
certificate of live birth (birth certificate). His sex was registered as "male."
He further alleged that he is a male transsexual, that is, "anatomically male but feels, thinks and acts as a
female" and that he had always identified himself with girls since childhood.1 Feeling trapped in a mans body,
he consulted several doctors in the United States. He underwent psychological examination, hormone treatment
and breast augmentation. His attempts to transform himself to a "woman" culminated on January 27, 2001 when
he underwent sex reassignment surgery2 in Bangkok, Thailand. He was thereafter examined by Dr. Marcelino
Reysio-Cruz, Jr., a plastic and reconstruction surgeon in the Philippines, who issued a medical certificate
attesting that he (petitioner) had in fact undergone the procedure.
From then on, petitioner lived as a female and was in fact engaged to be married. He then sought to have his
name in his birth certificate changed from "Rommel Jacinto" to "Mely," and his sex from "male" to "female."
An order setting the case for initial hearing was published in the Peoples Journal Tonight, a newspaper of
general circulation in Metro Manila, for three consecutive weeks.3 Copies of the order were sent to the Office of
the Solicitor General (OSG) and the civil registrar of Manila.
On the scheduled initial hearing, jurisdictional requirements were established. No opposition to the petition was
made.
During trial, petitioner testified for himself. He also presented Dr. Reysio-Cruz, Jr. and his American fianc,
Richard P. Edel, as witnesses.
On June 4, 2003, the trial court rendered a decision4 in favor of petitioner. Its relevant portions read:
Petitioner filed the present petition not to evade any law or judgment or any infraction thereof or for any
unlawful motive but solely for the purpose of making his birth records compatible with his present sex.
The sole issue here is whether or not petitioner is entitled to the relief asked for.
The [c]ourt rules in the affirmative.
Firstly, the [c]ourt is of the opinion that granting the petition would be more in consonance with the
principles of justice and equity. With his sexual [re-assignment], petitioner, who has always felt, thought
and acted like a woman, now possesses the physique of a female. Petitioners misfortune to be trapped in
a mans body is not his own doing and should not be in any way taken against him.
Likewise, the [c]ourt believes that no harm, injury [or] prejudice will be caused to anybody or the
community in granting the petition. On the contrary, granting the petition would bring the much-awaited
happiness on the part of the petitioner and her [fianc] and the realization of their dreams.
Finally, no evidence was presented to show any cause or ground to deny the present petition despite due
notice and publication thereof. Even the State, through the [OSG] has not seen fit to interpose any
[o]pposition.
WHEREFORE, judgment is hereby rendered GRANTING the petition and ordering the Civil Registrar
of Manila to change the entries appearing in the Certificate of Birth of [p]etitioner, specifically for
petitioners first name from "Rommel Jacinto" to MELY and petitioners gender from "Male"
to FEMALE. 5

On August 18, 2003, the Republic of the Philippines (Republic), thru the OSG, filed a petition for certiorari in
the Court of Appeals.6 It alleged that there is no law allowing the change of entries in the birth certificate by
reason of sex alteration.
On February 23, 2006, the Court of Appeals7 rendered a decision8 in favor of the Republic. It ruled that the trial
courts decision lacked legal basis. There is no law allowing the change of either name or sex in the certificate
of birth on the ground of sex reassignment through surgery. Thus, the Court of Appeals granted the Republics
petition, set aside the decision of the trial court and ordered the dismissal of SP Case No. 02-105207. Petitioner
moved for reconsideration but it was denied.9 Hence, this petition.
Petitioner essentially claims that the change of his name and sex in his birth certificate is allowed under Articles
407 to 413 of the Civil Code, Rules 103 and 108 of the Rules of Court and RA 9048.10
The petition lacks merit.
A Persons First Name Cannot Be Changed On the Ground of Sex Reassignment
Petitioner invoked his sex reassignment as the ground for his petition for change of name and sex. As found by
the trial court:
Petitioner filed the present petition not to evade any law or judgment or any infraction thereof or for any
unlawful motive but solely for the purpose of making his birth records compatible with his present
sex. (emphasis supplied)
Petitioner believes that after having acquired the physical features of a female, he became entitled to the civil
registry changes sought. We disagree.
The State has an interest in the names borne by individuals and entities for purposes of identification.11 A
change of name is a privilege, not a right.12 Petitions for change of name are controlled by statutes.13 In this
connection, Article 376 of the Civil Code provides:
ART. 376. No person can change his name or surname without judicial authority.
This Civil Code provision was amended by RA 9048 (Clerical Error Law). In particular, Section 1 of RA 9048
provides:
SECTION 1. Authority to Correct Clerical or Typographical Error and Change of First Name or
Nickname. No entry in a civil register shall be changed or corrected without a judicial order, except for
clerical or typographical errors and change of first name or nickname which can be corrected or changed
by the concerned city or municipal civil registrar or consul general in accordance with the provisions of
this Act and its implementing rules and regulations.
RA 9048 now governs the change of first name.14 It vests the power and authority to entertain petitions for
change of first name to the city or municipal civil registrar or consul general concerned. Under the law,
therefore, jurisdiction over applications for change of first name is now primarily lodged with the
aforementioned administrative officers. The intent and effect of the law is to exclude the change of first name
from the coverage of Rules 103 (Change of Name) and 108 (Cancellation or Correction of Entries in the Civil
Registry) of the Rules of Court, until and unless an administrative petition for change of name is first filed and
subsequently denied.15 It likewise lays down the corresponding venue,16 form17 and procedure. In sum, the
remedy and the proceedings regulating change of first name are primarily administrative in nature, not judicial.

RA 9048 likewise provides the grounds for which change of first name may be allowed:
SECTION 4. Grounds for Change of First Name or Nickname. The petition for change of first name or
nickname may be allowed in any of the following cases:
(1) The petitioner finds the first name or nickname to be ridiculous, tainted with dishonor or extremely
difficult to write or pronounce;
(2) The new first name or nickname has been habitually and continuously used by the petitioner and he
has been publicly known by that first name or nickname in the community; or
(3) The change will avoid confusion.
Petitioners basis in praying for the change of his first name was his sex reassignment. He intended to make his
first name compatible with the sex he thought he transformed himself into through surgery. However, a change
of name does not alter ones legal capacity or civil status.18 RA 9048 does not sanction a change of first name on
the ground of sex reassignment. Rather than avoiding confusion, changing petitioners first name for his
declared purpose may only create grave complications in the civil registry and the public interest.
Before a person can legally change his given name, he must present proper or reasonable cause or any
compelling reason justifying such change.19 In addition, he must show that he will be prejudiced by the use of
his true and official name.20 In this case, he failed to show, or even allege, any prejudice that he might suffer as a
result of using his true and official name.
In sum, the petition in the trial court in so far as it prayed for the change of petitioners first name was not
within that courts primary jurisdiction as the petition should have been filed with the local civil registrar
concerned, assuming it could be legally done. It was an improper remedy because the proper remedy was
administrative, that is, that provided under RA 9048. It was also filed in the wrong venue as the proper venue
was in the Office of the Civil Registrar of Manila where his birth certificate is kept. More importantly, it had no
merit since the use of his true and official name does not prejudice him at all. For all these reasons, the Court of
Appeals correctly dismissed petitioners petition in so far as the change of his first name was concerned.
No Law Allows The Change of Entry In The Birth Certificate As To Sex On the Ground of Sex
Reassignment
The determination of a persons sex appearing in his birth certificate is a legal issue and the court must look to
the statutes.21 In this connection, Article 412 of the Civil Code provides:
ART. 412. No entry in the civil register shall be changed or corrected without a judicial order.
Together with Article 376 of the Civil Code, this provision was amended by RA 9048 in so far as clerical or
typographical errors are involved. The correction or change of such matters can now be made through
administrative proceedings and without the need for a judicial order. In effect, RA 9048 removed from the ambit
of Rule 108 of the Rules of Court the correction of such errors.22 Rule 108 now applies only to substantial
changes and corrections in entries in the civil register.23
Section 2(c) of RA 9048 defines what a "clerical or typographical error" is:
SECTION 2. Definition of Terms. As used in this Act, the following terms shall mean:
xxx

xxx

xxx

(3) "Clerical or typographical error" refers to a mistake committed in the performance of clerical
work in writing, copying, transcribing or typing an entry in the civil register that is harmless and
innocuous, such as misspelled name or misspelled place of birth or the like, which is visible to
the eyes or obvious to the understanding, and can be corrected or changed only by reference to
other existing record or records: Provided, however, That no correction must involve the
change of nationality, age, status or sex of the petitioner. (emphasis supplied)
Under RA 9048, a correction in the civil registry involving the change of sex is not a mere clerical or
typographical error. It is a substantial change for which the applicable procedure is Rule 108 of the Rules of
Court.
The entries envisaged in Article 412 of the Civil Code and correctable under Rule 108 of the Rules of Court are
those provided in Articles 407 and 408 of the Civil Code:24
ART. 407. Acts, events and judicial decrees concerning the civil status of persons shall be recorded in
the civil register.
ART. 408. The following shall be entered in the civil register:
(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5) annulments of marriage; (6) judgments
declaring marriages void from the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of
natural children; (10) naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction;
(14) judicial determination of filiation; (15) voluntary emancipation of a minor; and (16) changes of
name.
The acts, events or factual errors contemplated under Article 407 of the Civil Code include even those that
occur after birth.25 However, no reasonable interpretation of the provision can justify the conclusion that it
covers the correction on the ground of sex reassignment.
To correct simply means "to make or set aright; to remove the faults or error from" while to change means "to
replace something with something else of the same kind or with something that serves as a substitute."26 The
birth certificate of petitioner contained no error. All entries therein, including those corresponding to his first
name and sex, were all correct. No correction is necessary.
Article 407 of the Civil Code authorizes the entry in the civil registry of certain acts (such as legitimations,
acknowledgments of illegitimate children and naturalization), events (such as births, marriages, naturalization
and deaths) and judicial decrees (such as legal separations, annulments of marriage, declarations of nullity of
marriages, adoptions, naturalization, loss or recovery of citizenship, civil interdiction, judicial determination of
filiation and changes of name). These acts, events and judicial decrees produce legal consequences that touch
upon the legal capacity, status and nationality of a person. Their effects are expressly sanctioned by the laws. In
contrast, sex reassignment is not among those acts or events mentioned in Article 407. Neither is it recognized
nor even mentioned by any law, expressly or impliedly.
"Status" refers to the circumstances affecting the legal situation (that is, the sum total of capacities and
incapacities) of a person in view of his age, nationality and his family membership.27
The status of a person in law includes all his personal qualities and relations, more or less permanent
in nature, not ordinarily terminable at his own will, such as his being legitimate or illegitimate, or his
being married or not. The comprehensive term status include such matters as the beginning and end of
legal personality, capacity to have rights in general, family relations, and its various aspects, such as
birth, legitimation, adoption, emancipation, marriage, divorce, and sometimes even
succession.28 (emphasis supplied)

A persons sex is an essential factor in marriage and family relations. It is a part of a persons legal capacity and
civil status. In this connection, Article 413 of the Civil Code provides:
ART. 413. All other matters pertaining to the registration of civil status shall be governed by special
laws.
But there is no such special law in the Philippines governing sex reassignment and its effects. This is fatal to
petitioners cause.
Moreover, Section 5 of Act 3753 (the Civil Register Law) provides:
SEC. 5. Registration and certification of births. The declaration of the physician or midwife in
attendance at the birth or, in default thereof, the declaration of either parent of the newborn child, shall
be sufficient for the registration of a birth in the civil register. Such declaration shall be exempt from
documentary stamp tax and shall be sent to the local civil registrar not later than thirty days after the
birth, by the physician or midwife in attendance at the birth or by either parent of the newborn child.
In such declaration, the person above mentioned shall certify to the following facts: (a) date and hour of
birth; (b) sex and nationality of infant; (c) names, citizenship and religion of parents or, in case the
father is not known, of the mother alone; (d) civil status of parents; (e) place where the infant was born;
and (f) such other data as may be required in the regulations to be issued.
xxx

xxx

xxx (emphasis supplied)

Under the Civil Register Law, a birth certificate is a historical record of the facts as they existed at the time of
birth.29 Thus, the sex of a person is determined at birth, visually done by the birth attendant (the physician or
midwife) by examining the genitals of the infant. Considering that there is no law legally recognizing sex
reassignment, the determination of a persons sex made at the time of his or her birth, if not attended by
error,30 is immutable.31
When words are not defined in a statute they are to be given their common and ordinary meaning in the absence
of a contrary legislative intent. The words "sex," "male" and "female" as used in the Civil Register Law and
laws concerning the civil registry (and even all other laws) should therefore be understood in their common and
ordinary usage, there being no legislative intent to the contrary. In this connection, sex is defined as "the sum of
peculiarities of structure and function that distinguish a male from a female"32 or "the distinction between male
and female."33 Female is "the sex that produces ova or bears young"34 and male is "the sex that has organs to
produce spermatozoa for fertilizing ova."35 Thus, the words "male" and "female" in everyday understanding do
not include persons who have undergone sex reassignment. Furthermore, "words that are employed in a statute
which had at the time a well-known meaning are presumed to have been used in that sense unless the context
compels to the contrary."36 Since the statutory language of the Civil Register Law was enacted in the early
1900s and remains unchanged, it cannot be argued that the term "sex" as used then is something alterable
through surgery or something that allows a post-operative male-to-female transsexual to be included in the
category "female."
For these reasons, while petitioner may have succeeded in altering his body and appearance through the
intervention of modern surgery, no law authorizes the change of entry as to sex in the civil registry for that
reason. Thus, there is no legal basis for his petition for the correction or change of the entries in his birth
certificate.
Neither May Entries in the Birth Certificate As to First Name or Sex Be Changed on the Ground of
Equity

The trial court opined that its grant of the petition was in consonance with the principles of justice and equity. It
believed that allowing the petition would cause no harm, injury or prejudice to anyone. This is wrong.
The changes sought by petitioner will have serious and wide-ranging legal and public policy consequences.
First, even the trial court itself found that the petition was but petitioners first step towards his eventual
marriage to his male fianc. However, marriage, one of the most sacred social institutions, is a special contract
of permanent union between a man and a woman.37 One of its essential requisites is the legal capacity of the
contracting parties who must be a male and a female.38 To grant the changes sought by petitioner will
substantially reconfigure and greatly alter the laws on marriage and family relations. It will allow the union of a
man with another man who has undergone sex reassignment (a male-to-female post-operative transsexual).
Second, there are various laws which apply particularly to women such as the provisions of the Labor Code on
employment of women,39 certain felonies under the Revised Penal Code40 and the presumption of survivorship
in case of calamities under Rule 131 of the Rules of Court,41 among others. These laws underscore the public
policy in relation to women which could be substantially affected if petitioners petition were to be granted.
It is true that Article 9 of the Civil Code mandates that "[n]o judge or court shall decline to render judgment by
reason of the silence, obscurity or insufficiency of the law." However, it is not a license for courts to engage in
judicial legislation. The duty of the courts is to apply or interpret the law, not to make or amend it.
In our system of government, it is for the legislature, should it choose to do so, to determine what guidelines
should govern the recognition of the effects of sex reassignment. The need for legislative guidelines becomes
particularly important in this case where the claims asserted are statute-based.
To reiterate, the statutes define who may file petitions for change of first name and for correction or change of
entries in the civil registry, where they may be filed, what grounds may be invoked, what proof must be
presented and what procedures shall be observed. If the legislature intends to confer on a person who has
undergone sex reassignment the privilege to change his name and sex to conform with his reassigned sex, it has
to enact legislation laying down the guidelines in turn governing the conferment of that privilege.
It might be theoretically possible for this Court to write a protocol on when a person may be recognized as
having successfully changed his sex. However, this Court has no authority to fashion a law on that matter, or on
anything else. The Court cannot enact a law where no law exists. It can only apply or interpret the written word
of its co-equal branch of government, Congress.
Petitioner pleads that "[t]he unfortunates are also entitled to a life of happiness, contentment and [the]
realization of their dreams." No argument about that. The Court recognizes that there are people whose
preferences and orientation do not fit neatly into the commonly recognized parameters of social convention and
that, at least for them, life is indeed an ordeal. However, the remedies petitioner seeks involve questions of
public policy to be addressed solely by the legislature, not by the courts.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED.

9.
[G.R. No. 149859. June 9, 2004]
RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY
PHILIPPINES CORPORATION/FRANK THOMAS, XAVIER G. PEA and TRIFONA F.
MAMARADLO, respondents.
DECISION
CORONA, J.:
Before us on appeal is the decision [1] of the Court of Appeals [2] dated June 22, 2001 affirming the
decision[3] of the National Labor Relations Commission[4] dated March 23, 1999 which, in turn, affirmed the
decision[5] of labor arbiter Pedro Ramos dated May 19, 1998 dismissing petitioner Radin Alciras complaint for
illegal dismissal with prayer for reinstatement, backwages, moral damages, exemplary damages and attorneys
fees.
The facts follow.
Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services
supervisor on a probationary basis for six months. Apparently unhappy with petitioners performance,
respondent Middleby terminated petitioners services. The bone of contention centered on whether the
termination occurred before or after the six-month probationary period of employment.
The parties, presenting their respective copies of Alciras appointment paper, claimed conflicting starting
dates of employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both
documents indicated petitioners employment status as probationary (6 mos.) and a remark that after five
months (petitioners) performance shall be evaluated and any adjustment in salary shall depend on (his) work
performance.[6]
Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, a senior
officer of respondent Middleby in bad faith withheld his time card and did not allow him to work. Considering
this as a dismissal after the lapse of his probationary employment, petitioner filed on November 21, 1996 a
complaint in the National Labor Relations Commission (NLRC) against respondent Middleby contending that
he had already become a regular employee as of the date he was illegally dismissed. Included as respondents in
the complaint were the following officers of respondent Middleby: Frank Thomas (General Manager), Xavier
Pea (Human Resources Manager) and Trifona Mamaradlo (Engineering Manager).
In their defense, respondents claim that, during petitioners probationary employment, he showed poor
performance in his assigned tasks, incurred ten absences, was late several times and violated company rules on
the wearing of uniform. Since he failed to meet company standards, petitioners application to become a regular
employee was disapproved and his employment was terminated.
On May 19, 1998, the labor arbiter dismissed the complaint on the ground that: (1) respondents were able
to prove that petitioner was apprised of the standards for becoming a regular employee; (2) respondent
Mamaradlos affidavit showed that petitioner did not perform well in his assigned work and his attitude was
below par compared to the companys standard required of him and (3) petitioners dismissal on November 20,
1996 was before his regularization, considering that, counting from May 20, 1996, the six-month
probationary period ended on November 20, 1996. [7]
On March 23, 1999, the NLRC affirmed the decision of the labor arbiter.
On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC. According to the appellate
court:

Even assuming, arguendo, that petitioner was not informed of the reasonable standards required of him by
Middleby, the same is not crucial because there is no termination to speak of but rather expiration of contract.
Petitioner loses sight of the fact that his employment was probationary, contractual in nature, and one with a
definite period. At the expiration of the period stipulated in the contract, his appointment was deemed
terminated and a notice or termination letter informing him of the non-renewal of his contract was not
necessary.
While probationary employees enjoy security of tenure such that they cannot be removed except for just cause
as provided by law, such protection extends only during the period of probation. Once that period expired, the
constitutional protection could no longer be invoked. Legally speaking, petitioner was not illegally dismissed.
His contract merely expired.[8]
Hence, this petition for review based on the following assignment of errors:
I
THE COURT OF APPEALS GRAVELY ERRED, BLATANTLY DISREGARDED THE LAW AND
ESTABLISHED JURISPRUDENCE, IN UPHOLDING THE DECISION OF THE NATIONAL LABOR
RELATIONS COMMISSION.
II
THE COURT OF APPEALS GRAVELY ERRED AND BLATANTLY DISREGARDED THE LAW IN
HOLDING THAT PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD.
III
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT AN EMPLOYER CAN BE
PRESUMED TO HAVE COMPLIED WITH ITS DUTY TO INFORM THE PROBATIONARY EMPLOYEE
OF THE STANDARDS TO MAKE HIM A REGULAR EMPLOYEE.
IV
THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN
NOT APPLYING TO THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE
COURT IN SERRANO VS. NLRC, ET. AL., G.R. NO. 117040, JANUARY 27, 2000.[9]
Central to the matter at hand is Article 281 of the Labor Code which provides that:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not exceed six (6) months from
the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by
the employer to the employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period
and was therefore already a regular employee at the time of his alleged dismissal. We rule in the negative.
Petitioner claims that under the terms of his contract, his probationary employment was only for five
months as indicated by the remark Please be informed that after five months, your performance shall be
evaluated and any adjustment in salary shall depend on your work performance. The argument lacks merit. As

correctly held by the labor arbiter, the appointment contract also stated in another part thereof that petitioners
employment status was probationary (6 mos.). The five-month period referred to the evaluation of his work.
[10]

Petitioner insists that he already attained the status of a regular employee when he was dismissed on
November 20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on
November 16, 1996. According to petitioners computation, since Article 13 of the Civil Code provides that one
month is composed of thirty days, six months total one hundred eighty days. As the appointment provided that
petitioners status was probationary (6 mos.) without any specific date of termination, the 180 th day fell on
November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee.
Petitioners contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et. al.,[11] this
Court dealt with the same issue of whether an employment contract from May 16, 1995 to November 15, 1995
was within or outside the six-month probationary period. We ruled that November 15, 1995 was still within the
six-month probationary period. We reiterate our ruling inCALS Poultry Supply:
(O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same
calendar date of the 6th month following.(italics supplied)
In short, since the number of days in each particular month was irrelevant, petitioner was still a
probationary employee when respondent Middleby opted not to regularize him on November 20, 1996.
The second issue is whether respondent Middleby informed petitioner of the standards for regularization
at the start of his employment.
Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No.
10, Series of 1997) provides that:
xxx

xxx

xxx

(d) In all cases of probationary employment, the employer shall make known to the employee the standards
under which he will qualify as a regular employee at the time of his engagement. Where no standards are made
known to the employee at that time, he shall be deemed a regular employee.
xxx

xxx

xxx

We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular
employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after
five months. In Orient Express Placement Philippines vs. National Labor Relations Commission,[12] we ruled
that an employer failed to inform an employee of the reasonable standards for becoming a regular employee:
Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment
Contract with NADRICO ever mentioned that he must first take and pass a Crane Operator's License
Examination in Saudi Arabia before he would be allowed to even touch a crane. Neither did he know that he
would be assigned as floorman pending release of the results of the examination or in the event that he
failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month
after his hiring to determine whether the company was amenable to continuing with his employment. Hence,
respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane
operator for a definite period of one (1) year to commence upon his arrival at the work-site and to terminate at
the end of one (1) year. No other condition was laid out except that he was to be on probation for three (3)
months.(emphasis supplied)

Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he
apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring.
We agree with the labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the
standards that he must satisfy in order to be converted into regular status. This rans (sic) counter to the
agreement between the parties that after five months of service the petitioners performance would be evaluated.
It is only but natural that the evaluation should be made vis--vis the performance standards for the job. Private
respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did
not perform well in his assigned work and his attitude was below par compared to the companys standard
required of him.[13]
The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby
opted not to renew his contract on the last day of his probationary employment.
It is settled that even if probationary employees do not enjoy permanent status, they are accorded the
constitutional protection of security of tenure. This means they may only be terminated for just cause or when
they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to
them by the employer at the time of their engagement.[14]
But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission [15] that this
constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to
either renew or terminate their contract of employment. Manlimos concluded that (t)his development has
rendered moot the question of whether there was a just cause for the dismissal of the petitioners xxx. [16] In the
case at bar, respondent Middleby exercised its option not to renew the contract when it informed petitioner on
the last day of his probationary employment that it did not intend to grant him a regular status.
Although we can regard petitioners severance from work as dismissal, the same cannot be deemed illegal.
As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was
tardy several times (3) failed to wear the proper uniform many times and (4) showed inferior supervisory skills.
Petitioner failed to satisfactorily refute these substantiated allegations. Taking all this in its entirety, respondent
Middleby was clearly justified to end its employment relationship with petitioner.
WHEREFORE, the petition is hereby DENIED.
No costs.
SO ORDERED.
10.
G.R. No. 145226
February 06, 2004
LUCIO MORIGO y CACHO, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse the decision1 dated October 21, 1999 of the Court of
Appeals in CA-G.R. CR No. 20700, which affirmed the judgment2 dated August 5, 1996 of the Regional Trial
Court (RTC) of Bohol, Branch 4, in Criminal Case No. 8688. The trial court found herein petitioner Lucio
Morigo y Cacho guilty beyond reasonable doubt of bigamy and sentenced him to a prison term of seven (7)

months of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum.
Also assailed in this petition is the resolution3 of the appellate court, dated September 25, 2000, denying
Morigos motion for reconsideration.
The facts of this case, as found by the court a quo, are as follows:
Appellant Lucio Morigo and Lucia Barrete were boardmates at the house of Catalina Tortor at
Tagbilaran City, Province of Bohol, for a period of four (4) years (from 1974-1978).
After school year 1977-78, Lucio Morigo and Lucia Barrete lost contact with each other.
In 1984, Lucio Morigo was surprised to receive a card from Lucia Barrete from Singapore. The former
replied and after an exchange of letters, they became sweethearts.
In 1986, Lucia returned to the Philippines but left again for Canada to work there. While in Canada, they
maintained constant communication.
In 1990, Lucia came back to the Philippines and proposed to petition appellant to join her in Canada.
Both agreed to get married, thus they were married on August 30, 1990 at the Iglesia de Filipina
Nacional at Catagdaan, Pilar, Bohol.
On September 8, 1990, Lucia reported back to her work in Canada leaving appellant Lucio behind.
On August 19, 1991, Lucia filed with the Ontario Court (General Division) a petition for divorce against
appellant which was granted by the court on January 17, 1992 and to take effect on February 17, 1992.
On October 4, 1992, appellant Lucio Morigo married Maria Jececha Lumbago4 at the Virgen sa
Barangay Parish, Tagbilaran City, Bohol.
On September 21, 1993, accused filed a complaint for judicial declaration of nullity of marriage in the
Regional Trial Court of Bohol, docketed as Civil Case No. 6020. The complaint seek (sic) among others,
the declaration of nullity of accuseds marriage with Lucia, on the ground that no marriage ceremony
actually took place.
On October 19, 1993, appellant was charged with Bigamy in an Information5 filed by the City
Prosecutor of Tagbilaran [City], with the Regional Trial Court of Bohol.6
The petitioner moved for suspension of the arraignment on the ground that the civil case for judicial
nullification of his marriage with Lucia posed a prejudicial question in the bigamy case. His motion was
granted, but subsequently denied upon motion for reconsideration by the prosecution. When arraigned in the
bigamy case, which was docketed as Criminal Case No. 8688, herein petitioner pleaded not guilty to the charge.
Trial thereafter ensued.
On August 5, 1996, the RTC of Bohol handed down its judgment in Criminal Case No. 8688, as follows:
WHEREFORE, foregoing premises considered, the Court finds accused Lucio Morigo y Cacho guilty
beyond reasonable doubt of the crime of Bigamy and sentences him to suffer the penalty of
imprisonment ranging from Seven (7) Months of Prision Correccional as minimum to Six (6) Years and
One (1) Day of Prision Mayor as maximum.
SO ORDERED.7

In convicting herein petitioner, the trial court discounted petitioners claim that his first marriage to Lucia was
null and void ab initio. Following Domingo v. Court of Appeals,8 the trial court ruled that want of a valid
marriage ceremony is not a defense in a charge of bigamy. The parties to a marriage should not be allowed to
assume that their marriage is void even if such be the fact but must first secure a judicial declaration of the
nullity of their marriage before they can be allowed to marry again.
Anent the Canadian divorce obtained by Lucia, the trial court cited Ramirez v. Gmur,9 which held that the court
of a country in which neither of the spouses is domiciled and in which one or both spouses may resort merely
for the purpose of obtaining a divorce, has no jurisdiction to determine the matrimonial status of the parties. As
such, a divorce granted by said court is not entitled to recognition anywhere. Debunking Lucios defense of
good faith in contracting the second marriage, the trial court stressed that following People v. Bitdu,10 everyone
is presumed to know the law, and the fact that one does not know that his act constitutes a violation of the law
does not exempt him from the consequences thereof.
Seasonably, petitioner filed an appeal with the Court of Appeals, docketed as CA-G.R. CR No. 20700.
Meanwhile, on October 23, 1997, or while CA-G.R. CR No. 20700 was pending before the appellate court, the
trial court rendered a decision in Civil Case No. 6020 declaring the marriage between Lucio and Lucia void ab
initiosince no marriage ceremony actually took place. No appeal was taken from this decision, which then
became final and executory.
On October 21, 1999, the appellate court decided CA-G.R. CR No. 20700 as follows:
WHEREFORE, finding no error in the appealed decision, the same is hereby AFFIRMED in toto.
SO ORDERED.11
In affirming the assailed judgment of conviction, the appellate court stressed that the subsequent declaration of
nullity of Lucios marriage to Lucia in Civil Case No. 6020 could not acquit Lucio. The reason is that what is
sought to be punished by Article 34912 of the Revised Penal Code is the act of contracting a second marriage
before the first marriage had been dissolved. Hence, the CA held, the fact that the first marriage was void from
the beginning is not a valid defense in a bigamy case.
The Court of Appeals also pointed out that the divorce decree obtained by Lucia from the Canadian court could
not be accorded validity in the Philippines, pursuant to Article 1513 of the Civil Code and given the fact that it is
contrary to public policy in this jurisdiction. Under Article 1714 of the Civil Code, a declaration of public policy
cannot be rendered ineffectual by a judgment promulgated in a foreign jurisdiction.
Petitioner moved for reconsideration of the appellate courts decision, contending that the doctrine in Mendiola
v. People,15 allows mistake upon a difficult question of law (such as the effect of a foreign divorce decree) to be
a basis for good faith.
On September 25, 2000, the appellate court denied the motion for lack of merit.16 However, the denial was by a
split vote. The ponente of the appellate courts original decision in CA-G.R. CR No. 20700, Justice Eugenio S.
Labitoria, joined in the opinion prepared by Justice Bernardo P. Abesamis. The dissent observed that as the first
marriage was validly declared void ab initio, then there was no first marriage to speak of. Since the date of the
nullity retroacts to the date of the first marriage and since herein petitioner was, in the eyes of the law, never
married, he cannot be convicted beyond reasonable doubt of bigamy.
The present petition raises the following issues for our resolution:
A.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE
THAT IN CRIMES PENALIZED UNDER THE REVISED PENAL CODE, CRIMINAL INTENT IS
AN INDISPENSABLE REQUISITE. COROLLARILY, WHETHER OR NOT THE COURT OF
APPEALS ERRED IN FAILING TO APPRECIATE [THE] PETITIONERS LACK OF CRIMINAL
INTENT WHEN HE CONTRACTED THE SECOND MARRIAGE.
B.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE RULING IN
PEOPLE VS. BITDU (58 PHIL. 817) IS APPLICABLE TO THE CASE AT BAR.
C.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE
THAT EACH AND EVERY CIRCUMSTANCE FAVORING THE INNOCENCE OF THE ACCUSED
MUST BE TAKEN INTO ACCOUNT.17
To our mind, the primordial issue should be whether or not petitioner committed bigamy and if so, whether his
defense of good faith is valid.
The petitioner submits that he should not be faulted for relying in good faith upon the divorce decree of the
Ontario court. He highlights the fact that he contracted the second marriage openly and publicly, which a person
intent upon bigamy would not be doing. The petitioner further argues that his lack of criminal intent is material
to a conviction or acquittal in the instant case. The crime of bigamy, just like other felonies punished under the
Revised Penal Code, is mala in se, and hence, good faith and lack of criminal intent are allowed as a complete
defense. He stresses that there is a difference between the intent to commit the crime and the intent to perpetrate
the act. Hence, it does not necessarily follow that his intention to contract a second marriage is tantamount to an
intent to commit bigamy.
For the respondent, the Office of the Solicitor General (OSG) submits that good faith in the instant case is a
convenient but flimsy excuse. The Solicitor General relies upon our ruling in Marbella-Bobis v. Bobis,18 which
held that bigamy can be successfully prosecuted provided all the elements concur, stressing that under Article
4019 of the Family Code, a judicial declaration of nullity is a must before a party may re-marry. Whether or not
the petitioner was aware of said Article 40 is of no account as everyone is presumed to know the law. The OSG
counters that petitioners contention that he was in good faith because he relied on the divorce decree of the
Ontario court is negated by his act of filing Civil Case No. 6020, seeking a judicial declaration of nullity of his
marriage to Lucia.
Before we delve into petitioners defense of good faith and lack of criminal intent, we must first determine
whether all the elements of bigamy are present in this case. In Marbella-Bobis v. Bobis,20 we laid down the
elements of bigamy thus:
(1) the offender has been legally married;
(2) the first marriage has not been legally dissolved, or in case his or her spouse is absent, the absent
spouse has not been judicially declared presumptively dead;
(3) he contracts a subsequent marriage; and
(4) the subsequent marriage would have been valid had it not been for the existence of the first.

Applying the foregoing test to the instant case, we note that during the pendency of CA-G.R. CR No. 20700, the
RTC of Bohol Branch 1, handed down the following decision in Civil Case No. 6020, to wit:
WHEREFORE, premises considered, judgment is hereby rendered decreeing the annulment of the
marriage entered into by petitioner Lucio Morigo and Lucia Barrete on August 23, 1990 in Pilar, Bohol
and further directing the Local Civil Registrar of Pilar, Bohol to effect the cancellation of the marriage
contract.
SO ORDERED.21
The trial court found that there was no actual marriage ceremony performed between Lucio and Lucia by a
solemnizing officer. Instead, what transpired was a mere signing of the marriage contract by the two, without
the presence of a solemnizing officer. The trial court thus held that the marriage is void ab initio, in accordance
with Articles 322 and 423 of the Family Code. As the dissenting opinion in CA-G.R. CR No. 20700, correctly
puts it, "This simply means that there was no marriage to begin with; and that such declaration of nullity
retroacts to the date of the first marriage. In other words, for all intents and purposes, reckoned from the date of
the declaration of the first marriage as void ab initio to the date of the celebration of the first marriage, the
accused was, under the eyes of the law, never married."24 The records show that no appeal was taken from the
decision of the trial court in Civil Case No. 6020, hence, the decision had long become final and executory.
The first element of bigamy as a crime requires that the accused must have been legally married. But in this
case, legally speaking, the petitioner was never married to Lucia Barrete. Thus, there is no first marriage to
speak of. Under the principle of retroactivity of a marriage being declared void ab initio, the two were never
married "from the beginning." The contract of marriage is null; it bears no legal effect. Taking this argument to
its logical conclusion, for legal purposes, petitioner was not married to Lucia at the time he contracted the
marriage with Maria Jececha. The existence and the validity of the first marriage being an essential element of
the crime of bigamy, it is but logical that a conviction for said offense cannot be sustained where there is no first
marriage to speak of. The petitioner, must, perforce be acquitted of the instant charge.
The present case is analogous to, but must be distinguished from Mercado v. Tan.25 In the latter case, the judicial
declaration of nullity of the first marriage was likewise obtained after the second marriage was already
celebrated. We held therein that:
A judicial declaration of nullity of a previous marriage is necessary before a subsequent one can be
legally contracted. One who enters into a subsequent marriage without first obtaining such judicial
declaration is guilty of bigamy. This principle applies even if the earlier union is characterized by
statutes as "void."26
It bears stressing though that in Mercado, the first marriage was actually solemnized not just once, but twice:
first before a judge where a marriage certificate was duly issued and then again six months later before a priest
in religious rites. Ostensibly, at least, the first marriage appeared to have transpired, although later declared
void ab initio.
In the instant case, however, no marriage ceremony at all was performed by a duly authorized solemnizing
officer. Petitioner and Lucia Barrete merely signed a marriage contract on their own. The mere private act of
signing a marriage contract bears no semblance to a valid marriage and thus, needs no judicial declaration of
nullity. Such act alone, without more, cannot be deemed to constitute an ostensibly valid marriage for which
petitioner might be held liable for bigamy unless he first secures a judicial declaration of nullity before he
contracts a subsequent marriage.
The law abhors an injustice and the Court is mandated to liberally construe a penal statute in favor of an
accused and weigh every circumstance in favor of the presumption of innocence to ensure that justice is done.

Under the circumstances of the present case, we held that petitioner has not committed bigamy. Further, we also
find that we need not tarry on the issue of the validity of his defense of good faith or lack of criminal intent,
which is now moot and academic.
WHEREFORE, the instant petition is GRANTED. The assailed decision, dated October 21, 1999 of the Court
of Appeals in CA-G.R. CR No. 20700, as well as the resolution of the appellate court dated September 25,
2000, denying herein petitioners motion for reconsideration, is REVERSED and SET ASIDE. The petitioner
Lucio Morigo y Cacho is ACQUITTED from the charge of BIGAMY on the ground that his guilt has not been
proven with moral certainty.
SO ORDERED.
11.
[G.R. No. 124371. November 23, 2000]
PAULA T. LLORENTE, petitioner, vs. COURT OF APPEALS and ALICIA F. LLORENTE, respondents.
DECISION
PARDO, J.:
The Case
The case raises a conflict of laws issue.
What is before us is an appeal from the decision of the Court of Appeals [1] modifying that of the Regional
Trial Court, Camarines Sur, Branch 35, Iriga City[2] declaring respondent Alicia F. Llorente (herinafter referred
to as Alicia), as co-owners of whatever property she and the deceased Lorenzo N. Llorente (hereinafter
referred to as Lorenzo) may have acquired during the twenty-five (25) years that they lived together as
husband and wife.
The Facts
The deceased Lorenzo N. Llorente was an enlisted serviceman of the United States Navy from March 10,
1927 to September 30, 1957.[3]
On February 22, 1937, Lorenzo and petitioner Paula Llorente (hereinafter referred to as Paula) were
married before a parish priest, Roman Catholic Church, in Nabua, Camarines Sur.[4]
Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the
conjugal home in barrio Antipolo, Nabua, Camarines Sur.[5]
On November 30, 1943, Lorenzo was admitted to United States citizenship and Certificate of
Naturalization No. 5579816 was issued in his favor by the United States District Court, Southern District of
New York.[6]
Upon the liberation of the Philippines by the American Forces in 1945, Lorenzo was granted an accrued
leave by the U. S. Navy, to visit his wife and he visited the Philippines. [7] He discovered that his wife Paula was
pregnant and was living in and having an adulterous relationship with his brother, Ceferino Llorente.[8]

On December 4, 1945, Paula gave birth to a boy registered in the Office of the Registrar of Nabua as
Crisologo Llorente, with the certificate stating that the child was not legitimate and the line for the fathers
name was left blank.[9]
Lorenzo refused to forgive Paula and live with her. In fact, on February 2, 1946, the couple drew a written
agreement to the effect that (1) all the family allowances allotted by the United States Navy as part of Lorenzos
salary and all other obligations for Paulas daily maintenance and support would be suspended; (2) they would
dissolve their marital union in accordance with judicial proceedings; (3) they would make a separate agreement
regarding their conjugal property acquired during their marital life; and (4) Lorenzo would not prosecute Paula
for her adulterous act since she voluntarily admitted her fault and agreed to separate from Lorenzo
peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paulas father and
stepmother. The agreement was notarized by Notary Public Pedro Osabel.[10]
Lorenzo returned to the United States and on November 16, 1951 filed for divorce with the Superior
Court of the State of California in and for the County of San Diego. Paula was represented by counsel, John
Riley, and actively participated in the proceedings. On November 27, 1951, the Superior Court of the State of
California, for the County of San Diego found all factual allegations to be true and issued an interlocutory
judgment of divorce.[11]
On December 4, 1952, the divorce decree became final.[12]
In the meantime, Lorenzo returned to the Philippines.
On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila. [13] Apparently, Alicia had no
knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage
or cohabitation.[14]
From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife. [15] Their twenty-five (25) year
union produced three children, Raul, Luz and Beverly, all surnamed Llorente.[16]
On March 13, 1981, Lorenzo executed a Last Will and Testament. The will was notarized by Notary Public
Salvador M. Occiano, duly signed by Lorenzo with attesting witnesses Francisco Hugo, Francisco Neibres and
Tito Trajano. In the will, Lorenzo bequeathed all his property to Alicia and their three children, to wit:
(1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential house and lot, located at
San Francisco, Nabua, Camarines Sur, Philippines, including ALL the personal properties and other movables
or belongings that may be found or existing therein;
(2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children, Raul F. Llorente, Luz F.
Llorente and Beverly F. Llorente, in equal shares, all my real properties whatsoever and wheresoever located,
specifically my real properties located at Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay Paloyon,
Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay Paloyon, Sitio
Nalilidong, Nabua, Camarines Sur;
(3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto my children, Raul F.
Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, my real properties located in Quezon City
Philippines, and covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo, Rizal,
Philippines, covered by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of Deeds of
the province of Rizal, Philippines;
(4) That their respective shares in the above-mentioned properties, whether real or personal properties, shall
not be disposed of, ceded, sold and conveyed to any other persons, but could only be sold, ceded, conveyed and
disposed of by and among themselves;

(5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my Last Will and Testament, and
in her default or incapacity of the latter to act, any of my children in the order of age, if of age;
(6) I hereby direct that the executor named herein or her lawful substitute should served (sic) without bond;
(7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions heretofore executed,
signed, or published, by me;
(8) It is my final wish and desire that if I die, no relatives of mine in any degree in the Llorentes Side should
ever bother and disturb in any manner whatsoever my wife Alicia R. Fortunato and my children with respect to
any real or personal properties I gave and bequeathed respectively to each one of them by virtue of this Last
Will and Testament.[17]
On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga, Camarines Sur, a petition for the
probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special
Administratrix of his estate.[18]
On January 18, 1984, the trial court denied the motion for the reason that the testator Lorenzo was still
alive.[19]
On January 24, 1984, finding that the will was duly executed, the trial court admitted the will to probate.[20]
On June 11, 1985, before the proceedings could be terminated, Lorenzo died.[21]
On September 4, 1985, Paula filed with the same court a petition [22] for letters of administration over
Lorenzos estate in her favor. Paula contended (1) that she was Lorenzos surviving spouse, (2) that the various
property were acquired during their marriage, (3) that Lorenzos will disposed of all his property in favor of
Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal property.[23]
On December 13, 1985, Alicia filed in the testate proceeding (Sp. Proc. No. IR-755), a petition for the
issuance of letters testamentary.[24]
On October 14, 1985, without terminating the testate proceedings, the trial court gave due course to Paulas
petition in Sp. Proc. No. IR-888.[25]
On November 6, 13 and 20, 1985, the order was published in the newspaper Bicol Star.[26]
On May 18, 1987, the Regional Trial Court issued a joint decision, thus:
Wherefore, considering that this court has so found that the divorce decree granted to the late Lorenzo Llorente
is void and inapplicable in the Philippines, therefore the marriage he contracted with Alicia Fortunato on
January 16, 1958 at Manila is likewise void. This being so the petition of Alicia F. Llorente for the issuance of
letters testamentary is denied. Likewise, she is not entitled to receive any share from the estate even if the will
especially said so her relationship with Lorenzo having gained the status of paramour which is under Art. 739
(1).
On the other hand, the court finds the petition of Paula Titular Llorente, meritorious, and so declares the
intrinsic disposition of the will of Lorenzo Llorente dated March 13, 1981 as void and declares her entitled as
conjugal partner and entitled to one-half of their conjugal properties, and as primary compulsory heir, Paula T.
Llorente is also entitled to one-third of the estate and then one-third should go to the illegitimate children, Raul,
Luz and Beverly, all surname (sic) Llorente, for them to partition in equal shares and also entitled to the
remaining free portion in equal shares.
Petitioner, Paula Llorente is appointed legal administrator of the estate of the deceased, Lorenzo Llorente. As
such let the corresponding letters of administration issue in her favor upon her filing a bond in the amount (sic)

of P100,000.00 conditioned for her to make a return to the court within three (3) months a true and complete
inventory of all goods, chattels, rights, and credits, and estate which shall at any time come to her possession or
to the possession of any other person for her, and from the proceeds to pay and discharge all debts, legacies and
charges on the same, or such dividends thereon as shall be decreed or required by this court; to render a true and
just account of her administration to the court within one (1) year, and at any other time when required by the
court and to perform all orders of this court by her to be performed.
On the other matters prayed for in respective petitions for want of evidence could not be granted.
SO ORDERED.[27]
In time, Alicia filed with the trial court a motion for reconsideration of the aforequoted decision.[28]
On September 14, 1987, the trial court denied Alicias motion for reconsideration but modified its earlier
decision, stating that Raul and Luz Llorente are not children legitimate or otherwise of Lorenzo since they
were not legally adopted by him. [29] Amending its decision of May 18, 1987, the trial court declared Beverly
Llorente as the only illegitimate child of Lorenzo, entitling her to one-third (1/3) of the estate and one-third
(1/3) of the free portion of the estate.[30]
On September 28, 1987, respondent appealed to the Court of Appeals.[31]
On July 31, 1995, the Court of Appeals promulgated its decision, affirming with modification the decision
of the trial court in this wise:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the MODIFICATION that Alicia is
declared as co-owner of whatever properties she and the deceased may have acquired during the twenty-five
(25) years of cohabitation.
SO ORDERED.[32]
On August 25, 1995, petitioner filed with the Court of Appeals a motion for reconsideration of the decision.
[33]

On March 21, 1996, the Court of Appeals,[34] denied the motion for lack of merit.
Hence, this petition.[35]
The Issue
Stripping the petition of its legalese and sorting through the various arguments raised, [36] the issue is
simple. Who are entitled to inherit from the late Lorenzo N. Llorente?
We do not agree with the decision of the Court of Appeals. We remand the case to the trial court for ruling
on the intrinsic validity of the will of the deceased.
The Applicable Law
The fact that the late Lorenzo N. Llorente became an American citizen long before and at the time of: (1)
his divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, is duly established,
admitted and undisputed.
Thus, as a rule, issues arising from these incidents are necessarily governed by foreign law.

The Civil Code clearly provides:

Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons
are binding upon citizens of the Philippines, even though living abroad.
Art. 16. Real property as well as personal property is subject to the law of the country where it is situated.
However, intestate and testamentary succession, both with respect to the order of succession and to the amount
of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national
law of the person whose succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found. (emphasis ours)
True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take
judicial notice of them. Like any other fact, they must be alleged and proved.[37]
While the substance of the foreign law was pleaded, the Court of Appeals did not admit the foreign
law. The Court of Appeals and the trial court called to the fore the renvoi doctrine, where the case was referred
back to the law of the decedents domicile, in this case, Philippine law.
We note that while the trial court stated that the law of New York was not sufficiently proven, in the same
breath it made the categorical, albeit equally unproven statement that American law follows the domiciliary
theory hence, Philippine law applies when determining the validity of Lorenzos will.[38]
First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil
Code cannot possibly apply to general American law. There is no such law governing the validity of
testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens
and in force only within the State. It can therefore refer to no other than the law of the State of which the
decedent was a resident.[39] Second, there is no showing that the application of the renvoi doctrine is called for
or required by New York State law.
The trial court held that the will was intrinsically invalid since it contained dispositions in favor of Alice,
who in the trial courts opinion was a mere paramour. The trial court threw the will out, leaving Alice, and her
two children, Raul and Luz, with nothing.
The Court of Appeals also disregarded the will. It declared Alice entitled to one half (1/2) of whatever
property she and Lorenzo acquired during their cohabitation, applying Article 144 of the Civil Code of the
Philippines.
The hasty application of Philippine law and the complete disregard of the will, already probated as duly
executed in accordance with the formalities of Philippine law, is fatal, especially in light of the factual and
legal circumstances here obtaining.
Validity of the Foreign Divorce
In Van Dorn v. Romillo, Jr.[40] we held that owing to the nationality principle embodied in Article 15 of the
Civil Code, only Philippine nationals are covered by the policy against absolute divorces, the same being
considered contrary to our concept of public policy and morality. In the same case, the Court ruled
that aliens may obtain divorces abroad, provided they are valid according to their national law.
Citing this landmark case, the Court held in Quita v. Court of Appeals,[41] that once proven that respondent
was no longer a Filipino citizen when he obtained the divorce from petitioner, the ruling in Van Dorn would
become applicable and petitioner could very well lose her right to inherit from him.

In Pilapil v. Ibay-Somera,[42] we recognized the divorce obtained by the respondent in his country, the
Federal Republic of Germany. There, we stated that divorce and its legal effects may be recognized in the
Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status
of persons.
For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. [43] We hold that
the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid and recognized in this
jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the
decedent) are matters best left to the determination of the trial court.
Validity of the Will
The Civil Code provides:
Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the
laws of the country in which they are executed.
When the acts referred to are executed before the diplomatic or consular officials of the Republic of the
Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their
execution. (underscoring ours)
The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly
shown in the will he executed. We do not wish to frustrate his wishes, since he was a foreigner, not covered by
our laws on family rights and duties, status, condition and legal capacity. [44]
Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign
law which must be pleaded and proved. Whether the will was executed in accordance with the formalities
required is answered by referring to Philippine law. In fact, the will was duly probated.
As a guide however, the trial court should note that whatever public policy or good customs may be
involved in our system of legitimes, Congress did not intend to extend the same to the succession of foreign
nationals. Congress specifically left the amount of successional rights to the decedent's national law.[45]
Having thus ruled, we find it unnecessary to pass upon the other issues raised.
The Fallo
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G. R. SP No.
17446 promulgated on July 31, 1995 is SET ASIDE.
In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and RECOGNIZES as
VALID the decree of divorce granted in favor of the deceased Lorenzo N. Llorente by the Superior Court of the
State of California in and for the County of San Diego, made final on December 4, 1952.
Further, the Court REMANDS the cases to the court of origin for determination of the intrinsic validity of
Lorenzo N. Llorentes will and determination of the parties successional rights allowing proof of foreign law
with instructions that the trial court shall proceed with all deliberate dispatch to settle the estate of the deceased
within the framework of the Rules of Court.
No costs.
SO ORDERED.

II.

WHO IS A PERSON UNDER THE CIVIL CODE

1.
G.R. No. L-40432 July 19, 1982
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
FERNANDO FELIPE alias "Iying," defendant-appellant.
RELOVA, J.:
Fernando Felipe alias "Iying" appealed from the decision of the Court of First Instance of Bulacan convicting
him of rape, sentencing him to suffer the penalty of reclusion perpetua, and ordering him to pay the offended
woman, Ruth Pancho, the sum of P3,000.00 "for the social humiliation she has suffered, to provide maintenance
and support for the child, Marivic Pancho, and to pay the costs."
Prosecution evidence shows that at about 8:00 in the evening of July 9, 1971, Ruth Pancho was in a room in
their house in Sta. Barbara, Baliwag, Bulacan, when she heard some noise by the window. She did not pay
much attention to the noise but later saw the appellant, an uncle by affinity, who covered her mouth, poked a
gun on her chest and warned her not to shout, otherwise she would be killed. Notwithstanding the threat, Ruth
pushed and kicked the appellant who then boxed her on the thighs, poked his gun at her and removed her panty.
Appellant succeeded in having carnal knowledge of the complainant following which he poked his gun at her
again and told her that if she would report the matter to anyone he would kill her.
Afraid of the threat made upon her by the appellant, Ruth did not report the incident to anyone until December
5, 1971, when her sister-in-law, Angelita Sta. Maria-Pancho, noticed the enlargement of her abdomen. Mrs.
Pancho informed complainant's mother about her condition and the following day the matter was reported to the
police. Ruth was examined by Dr. Artemio Marcelo and was found six months pregnant.
Ruth was twenty-five (25) years old at the time of the trial and her educational attainment is only first year high
school because she had to stop schooling due to low intelligence.
After the prosecution had rested its case, the accused, through counsel, manifested that he was submitting his
case on the basis of the evidence presented by the People and that he would submit a memorandum for a
judgment of acquittal.
No direct evidence whatsoever was presented to belie the testimony of the complainant. Notwithstanding, we
have accorded unswerving fidelity to the constitutional canon that an accused is presumed innocent until the
contrary is proven and that, consequently, the burden of proof as to the offense charge lies on the prosecution.
Accordingly, an accused should be convicted on the strength of the evidence presented by the prosecution and
not on the weakness of the defense. Thus, we cannot sanction a verdict of conviction on the basis solely or
mainly of the failure or refusal of the accused to take the witness stand to deny the charges against him.
Such situation does not obtain, however, in the case at bar.
The trial court, analyzing the evidence of the prosecution and the memorandum of the defense, arrived at the
conclusion that the crime of rape was committed by the appellant Fernando Felipe upon the complainant Ruth
Pancho on the night of July 9, 1971.
We find the conclusion of the trial court which sustained the People's evidence to be correct and plausible.

In arriving at this determination, this Court has taken into consideration the demeanor of Ruth
Pancho during the Trial. She impressed the Court as shy, reticent and unsophisticated, reared as
she was in the provincial ways, unschooled in protecting her virtues against the proddings of the
male species. She admitted possessing a mental weakness, a low intelligence quotient, which
caused her being removed from first year high school by her parents, and made to attend to
household chores, caring for the baby and laundering clothes. She appeared very modest and
unassuming, her manners belied any wile or craft. Her testimony flowed out in simple terms,
firm and sincere. At times her answers could not match the professional bent of the questions of
the learned cross-examiner, counsel for the defense. Yet she replied with candor. In her statement
to the police in the preliminary investigation, there was no deviation from the main facts of her
accusation and she repeated her story before this Court practically four square on the material
points which prompted the Defense Counsel to state in his Memorandum, "All these
contradicting statements reveal the fact that the complainant has a propensity to compromise the
truth. If she could lie on the following statements,what could have prevented her from lying on
the material points of her testimony?" Here then is an admission on the part of the Defense that
the contradictions exhibited by the complainant were not on material points. Besides his
observations regarding her propensity to compromise with the truth would very well apply to a
sophisticated girl wily and crafty in mentality. The complainant, as already observed, is guileless
and simple in her demeanor. So the contradictions were more the product of mental weakness
rather than deliberate falsehood or concoctions which, this Court finds the complainant is, not
capable of perpetrating.
Ordinarily, the length of time that had expired before the complainant reported the incident to the
police authorities would be suspect, but in the case of Ruth Pancho, it would seem that her fear
and shame took hold and possessed her until such time that her shame could no longer be kept a
secret. This was in the early part of December, 1971. Innocent, indeed, she was, for the irregular
arrival of her menstruation, sometimes, none in two months, three months, but then her bulging
stomach could no longer hide her secret - pregnancy. Her fear was not only for herself but for her
parents as well. Her demeanor and behavior cannot be undermined. On the contrary, it ought to
be admired and respected. It is the dutiful daughter who would place the lives of her parents
above her own. Fear can take on different proportions which in this case of a girl like the
complainant, can be maintained through the interplay of the shame that possessed her hand in
hand.
The Defense is of the opinion that the force employed is of small proportion that the resistance
put up by the victim cannot support the conviction of rape. This proposition runs counter to the
decision of the Court of Appeals in People vs. Lim Chua Pun decided on December 13, 1962,
where the appellate court observed, "While we do not dispute the appellant's argument that mere
initial token resistance is insufficient to sustain a conviction for rape, it is an equally true and
accepted doctrine that force in rape is not strictly limited to physical force alone. It has been held
that fear is capable of producing and having the effect of physical force required to overcome the
resistance put up by a victim of rape. It is precisely the contention of the appellee that it was
this fear, instilled in the Complainant by the appellant's threat to kill her backed up by revolver
he was then wielding ..." This is an instance where force in rape includes intimidation and is
applicable to the present case.
FINALLY, the Defense has insinuated that there had been a relationship, beyond that of uncle-inlaw and niece between the accused and the complainant. Such allegation demands the
presentation of evidence on the part of the accused. This, he did not do. Again, there are many
more things that were insinuated and evidence ought to have been presented. Other allegations of
fact were made, such as the possession of the gun that ought to have been denied by the accused
if it were not true at all. The failure of the defense to put up any denial as to these allegations of

fact and as to the rape itself is an indication that the incident actually occurred. On this point, the
accused would rely on mere presumptions for his defense. Ironically, the presumption is against
the accused, for the Honorable the Supreme Court intoned in People vs. Francisquite, 56 SCRA
765, that "(It) is apparent that the accused is so situated that he could produce evidence of all the
facts and circumstances to overcome the evidence of the prosecution, but fails without justifiable
cause to offer such proof, the natural conclusion is that such proof, if produced, instead of
rebutting, would tend to sustain the charge. ..."
FURTHERMORE, there is no evidence to show that the complainant has harbored any grudge of
any sort whatsoever for her to concoct evidence or to tell a sordid story against the husband of a
close relative, the sister of her own mother. This is contrary to the natural course of human
behavior. It would take the sophistication of a Macchiavelli to invent such a distorted picture of a
close relative (even an in-law), or of any man for that matter, without rancor and without
motivation. The failure of the Defense to produce evidence in respect to any kind of hate existing
either on her part, or that of her kins, against the accused produces in the mind of the Court the
respect to which her candid testimony in open session merits. A true Filipina would not go
around in public declaring the facts of her defloration for no reason if such were not the true
facts.
Defendant-appellant alleges that the trial court erred
I
... in giving weight to the testimony of Ruth Pancho and making it the basis of its judgment of
conviction despite the fact that (a) said testimony is highly improbable, unnatural and borders on the absurd;
(b) it is fraught within consistencies and is self-contradictory;
(c) it proceeds from a necessarily biased and polluted source; and
(d) it lacks corroboration on material and significant points and is contradicted by the other
evidence on record.
II
... in not holding that the evidence for the prosecution is legally insufficient to establish the
commission of the crane of rape.
III
... in motu propio postponing the testimony of Ruth Pancho, thus providing the prosecution
ample opportunity to coach its principal witness.
IV
... in not acquitting appellant for lack of proof of his guilt beyond reasonable doubt.
The thrust of the errors assigned was that the act complained of was consummated with the consent of the
complainant or at least with some degree of acquiescence in her part. Such theory does not, however, find

support in the evidence on record. As aptly observed by the trial court, the undenied, rebutted and
uncontradicted testimony of Ruth Pancho as corroborated by the medicolegal findings of Dr. Artemio Marcelo
clearly shows that appellant Fernando Felipe had sexual intercourse with the complainant by means of force and
intimidation. The trial court even conducted an ocular inspection of the place in the presence of the fiscal, the
private prosecutor, the defense counsel and the accused, and found that "the window that complaining witness
was talking about is about 2 x 1-1/2 meters in width and 1-1/2 meter in height; the window sill has a height of
about 4 to 5 m. from the ground, and immediately in front of it is a guava tree which has a branch of about 1-1/2
meters away from the window sill, and it was there during the incident; demonstrating how she was lying down
that evening, witness demonstrated that her head was at the middle of the room, at a distance of her head to the
window is 3-1/2 feet and the distance of her head from the door leading to the sala is around 4 feet; she heard
the creeping sound on the window near her feet; witness also demonstrated that the three panes of the window
were closed with a small portion slightly opened; the electric bulb above her head was working at the time but it
was not lighted at the time of the incident; it was also dark outside and there was no moon; it was not raining."
Anent the contention that the trial court erred in holding that the prosecution has proven the guilt of the
appellant beyond reasonable doubt, suffice it to say that "absolute certainty of guilt is not demanded by the law
as basis for conviction of any criminal charge, but moral certainty is required as to every proposition of proof
requisite to constitute the offense. " (U.S. vs. Lasada, G. R. No. 5324, December 28, 1910, 18 Phil. 90; People
vs. Dramayo, G.R. No. L-21325, October 29, 1971, 42 SCRA 59). Such requirement has been complied with in
the case at bar. Besides, it has been the consistent ruling of this Court that appellate courts will generally not
disturb the findings of the trial court, considering that it is in a better position to decide the question, having
heard the witnesses themselves and observed their department and manner of testifying during the trial, unless it
has plainly overlooked certain facts of substance and value, that, if considered, might affect the result of the
case.
Further, the defense contends that the fact that a child was born of the complainant on March 13, 1972 shows
that the latter could not have been raped on July 9, 1971 because there are only 247 days between these dates;
that the normal period of gestation is 280 days and that the Civil Code considers 300 days as the length of
uterine development of a child.
The claim is without merit. As aptly contended by the Solicitor General in his brief, "a child born 8 months and
seven days after conception is considered normal. ...; that in certain instances the Civil Code considers 300 days
as the length of the uterine development of a child, but by providing that a premature child is one which has an
intra-uterine life of less than seven months (Art. 41, Civil Code) the Code impliedly recognizes that a child
which had an intra-uterine life of 8 months, as in the case at bar, is a normal child."
As aforestated, the essential elements of the crime of rape have been proven satisfactorily by the prosecution.
Not only is the testimony of the victim corroborated and unrebutted by a disinterested and expert witness, Dr.
Artemio Marcelo, but also this Court has time and again observed that it is hard to believe that an unmarried
woman like the victim would publicly disclose that she was raped by a relative by affinity and subject her
private parts to examination unless she is motivated by a strong desire to bring to justice the culprit who had
previously wronged her.
WHEREFORE, the decision appealed from is hereby AFFIRMED, with costs against defendant-appellant.
SO ORDERED.