G.R. No.

160689

March 26, 2014

RAUL H. SESBREO, Petitioner,

vs.
HONORABLE COURT OF APPEALS, JUAN I. COROMINA (SUBSTITUTED BY ANITA
COROMINA, ELIZABETH COROMINA and ROSIEMARIE COROMINA), VICENTE E. GARCIA
(SUBSTITUTED BY EDGAR JOHN GARCIA), FELIPE CONSTANTINO, RONALD ARCILLA,
NORBETO ABELLANA, DEMETRIO BALICHA, ANGELITA LHUILLIER, JOSE E. GARCIA, AND
VISA YAN ELECTRIC COMPANY (VECO), Respondents.
DECISION
BERSAMIN, J.:
This case concerns the claim for damages of petitioner Raul H. Sesbreo founded on abuse of
rights. Sesbreo accused the violation of contract (VOC) inspection team dispatched by the Visayan
Electric Company (VECO) to check his electric meter with conducting an unreasonable search in his
residential premises. But the Regional Trial Court (RTC), Branch 13, in Cebu City rendered judgment
on August 19, 1994 dismissing the claim; and the Court of Appeals (CA) affirmed the dismissal on
March 10, 2003.
1

Hence, this appeal by Sesbreo.

Antecedents
At the time material to the petition, VECO was a public utility corporation organized and existing
under the laws of the Philippines. VECO engaged in the sale and distribution of electricity within
Metropolitan Cebu. Sesbreo was one of VECOs customers under the metered service contract
they had entered into on March 2, 1982. Respondent Vicente E. Garcia was VECOs President,
General Manager and Chairman of its Board of Directors. Respondent Jose E. Garcia was VECOs
Vice-President, Treasurer and a Member of its Board of Directors. Respondent Angelita Lhuillier was
another Member of VECOs Board of Directors. Respondent Juan Coromina was VECOs Assistant
Treasurer, while respondent Norberto Abellana was the Head of VECOs Billing Section whose main
function was to compute back billings of customers found to have violated their contracts.
3

To ensure that its electric meters were properly functioning, and that none of it meters had been
tampered with, VECO employed respondents Engr. Felipe Constantino and Ronald Arcilla as
violation of contract (VOC) inspectors. Respondent Sgt. Demetrio Balicha, who belonged to the
341st Constabulary Company, Cebu Metropolitan Command, Camp Sotero Cabahug, Cebu City,
accompanied and escorted the VOC inspectors during their inspection of the households of its
customers on May 11, 1989 pursuant to a mission order issued to him.
4

The CA summarized the antecedent facts as follows:

x x x. Reduced to its essentials, however, the facts of this case are actually simple enough, although
the voluminous records might indicate otherwise. It all has to do with an incident that occurred at
around 4:00 oclock in the afternoon of May 11, 1989. On that day, the Violation of Contracts (VOC)
Team of defendants-appellees Constantino and Arcilla and their PC escort, Balicha, conducted a
routine inspection of the houses at La Paloma Village, Labangon, Cebu City, including that of

plaintiff-appellant Sesbreo, for illegal connections, meter tampering, seals, conduit pipes, jumpers,
wiring connections, and meter installations. After Bebe Baledio, plaintiff-appellant Sesbreos maid,
unlocked the gate, they inspected the electric meter and found that it had been turned upside down.
Defendant-appellant Arcilla took photographs of the upturned electric meter. With Chuchie Garcia,
Peter Sesbreo and one of the maids present, they removed said meter and replaced it with a new
one. At that time, plaintiff-appellant Sesbreo was in his office and no one called to inform him of the
inspection. The VOC Team then asked for and received Chuchie Garcias permission to enter the
house itself to examine the kind and number of appliances and light fixtures in the household and
determine its electrical load. Afterwards, Chuchie Garcia signed the Inspection Division Report,
which showed the condition of the electric meter on May 11, 1989 when the VOC Team inspected it,
with notice that it would be subjected to a laboratory test. She also signed a Load Survey Sheet that
showed the electrical load of plaintiff-appellant Sesbreo.
But according to plaintiff-appellant Sesbreo there was nothing routine or proper at all with what the
VOC Team did on May 11, 1989 in his house. Their entry to his house and the surrounding premises
was effected without his permission and over the objections of his maids. They threatened, forced or
coerced their way into his house. They unscrewed the electric meter, turned it upside down and took
photographs thereof. They then replaced it with a new electric meter. They searched the house and
its rooms without his permission or a search warrant. They forced a visitor to sign two documents,
making her appear to be his representative or agent. Afterwards, he found that some of his personal
effects were missing, apparently stolen by the VOC Team when they searched the house.
6

Judgment of the RTC

On August 19, 1994, the RTC rendered judgment dismissing the complaint. It did not accord
credence to the testimonies of Sesbreos witnesses, Bebe Baledio, his housemaid, and Roberto
Lopez, a part-time salesman, due to inconsistencies on material points in their respective
testimonies. It observed that Baledio could not make up her mind as to whether Sesbreos children
were in the house when the VOC inspection team detached and replaced the electric meter.
Likewise, it considered unbelievable that Lopez should hear the exchanges between Constantino,
Arcilla and Balicha, on one hand, and Baledio, on the other, considering that Lopez could not even
hear the conversation between two persons six feet away from where he was seated during the
simulation done in court, the same distance he supposedly had from the gate of Sesbreos house
during the incident. It pointed out that Lopezs presence at the gate during the incident was even
contradicted by his own testimony indicating that an elderly woman had opened the gate for the
VECO personnel, because it was Baledio, a lady in her 20s, who had repeatedly stated on her direct
and cross examinations that she had let the VECO personnel in. It concluded that for Lopez to do
nothing at all upon seeing a person being threatened by another in the manner he described was
simply contrary to human experience.
7

In contrast, the RTC believed the evidence of the respondents showing that the VOC inspection
team had found the electric meter in Sesbreos residence turned upside down to prevent the
accurate registering of the electricity consumption of the household, causing them to detach and
replace the meter. It held as unbelievable that the team forcibly entered the house through threats
and intimidation; that they themselves turned the electric meter upside down in order to incriminate
him for theft of electricity, because the fact that the team and Sesbreo had not known each other
before then rendered it unlikely for the team to fabricate charges against him; and that Sesbreos
non-presentation of Chuchie Garcia left her allegation of her being forced to sign the two documents
by the team unsubstantiated.

Decision of the CA
Sesbreo appealed, but the CA affirmed the RTC on March 10, 2003, holding thusly:
8

x x x. plaintiff-appellant Sesbreos account is simply too implausible or far-fetched to be believed.

For one thing, the inspection on his household was just one of many others that the VOC Team had
conducted in that subdivision. Yet, none but plaintiff-appellant Sesbreo complained of the alleged
acts of the VOC Team. Considering that there is no proof that they also perpetrated the same illegal
acts on other customers in the guise of conducting a Violation of Contracts inspection, plaintiffappellant Sesbreo likewise failed to show why he alone was singled out. It is also difficult to believe
that the VOC Team would be brazen enough to want to antagonize a person such as plaintiffappellant Sesbreo. There is no evidence that the VOC Team harbored any evil motive or grudge
against plaintiff-appellant Sesbreo, who is a total stranger to them. Until he came along, they did
not have any prior criminal records to speak of, or at least, no evidence thereof was presented. It is
equally difficult to believe that their superiors would authorize or condone their alleged illegal acts.
Especially so since there is no indication that prior to the incident on May 11, 1989, there was
already bad blood or animosity between plaintiff-appellant Sesbreo and defendant appellees to
warrant such a malevolent response. In fact, since availing of defendant-appellee VECOs power
services, the relationship between them appears to have been uneventful.
It becomes all the more apparent that the charges stemming from the May 11, 1989 incident were
fabricated when taken together with the lower courts evaluation of the alleged theft of plaintiffappellant Sesbreos personal effects. It stated that on August 8, 1989, plaintiff-appellant Sesbreo
wrote the barangay captain of Punta Princesa and accused Chuchie Garcia and Victoria Villarta alias
Victoria Rocamora of theft of some of his things that earlier he claimed had been stolen by members
of the VOC Team. When he was confronted with these facts, plaintiff-appellant Sesbreo further
claimed that the items allegedly stolen by Chuchie Garcia were part of the loot taken by defendantsappellees Constantino and Arcilla. Yet not once did plaintiff-appellant Sesbreo or any of his
witnesses mention that a conspiracy existed between these people. Clearly, much like his other
allegations, it is nothing more than an afterthought by plaintiff-appellant Sesbreo.
All in all, the allegations against defendants-appellees appear to be nothing more than a put-on to
save face. For the simple truth is that the inspection exposed plaintiff-appellant Sesbreo as a likely
cheat and thief.
xxxx
Neither is this Court swayed by the testimonies of Baledio and Lopez. The lower court rightly
described their testimonies as fraught by discrepancies and inconsistencies on material points and
even called Lopez a perjured witness. On the other hand, it is odd that plaintiff-appellant Sesbreo
chose not to present the witness whose testimony was very crucial. But even though Chuchie Garcia
never testified, her absence speaks volumes. Whereas plaintiff-appellant Sesbreo claimed that the
VOC Team forced her to sign two documents that made her appear to be his authorized agent or
representative, the latter claimed otherwise and that she also gave them permission to enter and
search the house. The person most qualified to refute the VOC Teams claim is Chuchie Garcia
herself. It is axiomatic that he who asserts a fact or claim must prove it. He cannot transfer that
burden to the person against whom he asserts such fact or claim. When certain evidence is
suppressed, the presumption is that it will adversely affect the cause of the party suppressing it,
should it come to light. x x x
1wphi1

Upon denial of his motion for reconsideration, Sesbreo appealed.

10

Issue
Was Sesbreo entitled to recover damages for abuse of rights?
Ruling
The appeal has no merit.
Sesbreos main contention is that the inspection of his residence by the VOC team was an
unreasonable search for being carried out without a warrant and for being allegedly done with malice
or bad faith.
Before dealing with the contention, we have to note that two distinct portions of Sesbreos
residence were inspected by the VOS team the garage where the electric meter was installed, and
the main premises where the four bedrooms, living rooms, dining room and kitchen were located.
Anent the inspection of the garage where the meter was installed, the respondents assert that the
VOC team had the continuing authority from Sesbreo as the consumer to enter his premises at all
reasonable hours to conduct an inspection of the meter without being liable for trespass to dwelling.
The authority emanated from paragraph 9 of the metered service contract entered into between
VECO and each of its consumers, which provided as follows:
9. The CONSUMER agrees to allow properly authorized employees or representatives of the
COMPANY to enter his premises at all reasonable hours without being liable to trespass to dwelling
for the purpose of inspecting, installing, reading, removing, testing, replacing or otherwise disposing
of its property, and/or removing the COMPANYS property in the event of the termination of the
contract for any cause.
11

Sesbreo contends, however, that paragraph 9 did not give Constantino, Arcilla and Balicha the
blanket authority to enter at will because the only property VECO owned in his premises was the
meter; hence, Constantino and Arcilla should enter only the garage. He denies that they had the
right to enter the main portion of the house and inspect the various rooms and the appliances therein
because those were not the properties of VECO. He posits that Balicha, who was not an employee
of VECO, had no authority whatsoever to enter his house and conduct a search. He concludes that
their search was unreasonable, and entitled him to damages in light of their admission that they had
entered and inspected his premises without a search warrant.
12

We do not accept Sesbreos conclusion. Paragraph 9 clothed the entire VOC team with
unquestioned authority to enter the garage to inspect the meter. The members of the team obviously
met the conditions imposed by paragraph 9 for an authorized entry. Firstly, their entry had the
objective of conducting the routine inspection of the meter. Secondly, the entry and inspection were
confined to the garage where the meter was installed. Thirdly, the entry was effected at around 4
oclock p.m., a reasonable hour. And, fourthly, the persons who inspected the meter were duly
authorized for the purpose by VECO.
1avvphi1

13

14

15

Although Balicha was not himself an employee of VECO, his participation was to render police
assistance to ensure the personal security of Constantino and Arcilla during the inspection,
rendering him a necessary part of the team as an authorized representative. Under the
circumstances, he was authorized to enter considering that paragraph 9 expressly extended such
authority to "properly authorized employees or representatives" of VECO.
16

It is true, as Sesbreo urges, that paragraph 9 did not cover the entry into the main premises of the
residence. Did this necessarily mean that any entry by the VOS team into the main premises
required a search warrant to be first secured?
Sesbreo insists so, citing Section 2, Article III of the 1987 Constitution, the clause guaranteeing the
right of every individual against unreasonable searches and seizures, viz:
Section 2. The right of the people to be secure in their persons, houses, papers and effects against
unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and
no search warrant or warrant of arrest shall issue except upon probable cause to be determined
personally by the judge after examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to be searched and the persons or
things to be seized.
He states that a violation of this constitutional guaranty rendered VECO and its VOS team liable to
him for damages by virtue of Article 32 (9) of the Civil Code, which pertinently provides:
Article 32. Any public officer or employee, or any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and
liberties of another person shall be liable to the latter for damages:
xxxx
(9) The right to be secured in ones person, house, papers, and effects against unreasonable
searches and seizures;
x x x x.
Sesbreos insistence has no legal and factual basis.
The constitutional guaranty against unlawful searches and seizures is intended as a restraint against
the Government and its agents tasked with law enforcement. It is to be invoked only to ensure
freedom from arbitrary and unreasonable exercise of State power. The Court has made this clear in
its pronouncements, including that made in People v. Marti, viz:
17

If the search is made upon the request of law enforcers, a warrant must generally be first secured if
it is to pass the test of constitutionality. However, if the search is made at the behest or initiative of
the proprietor of a private establishment for its own and private purposes, as in the case at bar, and
without the intervention of police authorities, the right against unreasonable search and seizure
cannot be invoked for only the act of private individual, not the law enforcers, is involved. In sum, the
protection against unreasonable searches and seizures cannot be extended to acts committed by
private individuals so as to bring it within the ambit of alleged unlawful intrusion by the government.
18

It is worth noting that the VOC inspectors decided to enter the main premises only after finding the
meter of Sesbreo turned upside down, hanging and its disc not rotating. Their doing so would
enable them to determine the unbilled electricity consumed by his household. The circumstances
justified their decision, and their inspection of the main premises was a continuation of the
authorized entry. There was no question then that their ability to determine the unbilled electricity
called for them to see for themselves the usage of electricity inside. Not being agents of the State,
they did not have to first obtain a search warrant to do so.
Balichas presence participation in the entry did not make the inspection a search by an agent of the
State within the ambit of the guaranty. As already mentioned, Balicha was part of the team by virtue
of his mission order authorizing him to assist and escort the team during its routine
inspection. Consequently, the entry into the main premises of the house by the VOC team did not
constitute a violation of the guaranty.
19

Our holding could be different had Sesbreo persuasively demonstrated the intervention of malice or
bad faith on the part of Constantino and Arcilla during their inspection of the main premises, or any
excessiveness committed by them in the course of the inspection. But Sesbreo did not. On the
other hand, the CA correctly observed that the inspection did not zero in on Sesbreos residence
because the other houses within the area were similarly subjected to the routine inspection. This,
we think, eliminated any notion of malice or bad faith.
20

Clearly, Sesbreo did not establish his claim for damages if the respondents were not guilty of abuse
of rights. To stress, the concept of abuse of rights prescribes that a person should not use his right
unjustly or in bad faith; otherwise, he may be liable to another who suffers injury. The rationale for
the concept is to present some basic principles to be followed for the rightful relationship between
human beings and the stability of social order. Moreover, according to a commentator, "the exercise
of right ends when the right disappears, and it disappears when it is abused, especially to the
prejudice of others[;] [i]t cannot be said that a person exercises a right when he unnecessarily
prejudices another." Article 19 of the Civil Code sets the standards to be observed in the exercise of
ones rights and in the performance of ones duties, namely: (a) to act with justice; (b) to give
everyone his due; and (c) to observe honesty and good faith. The law thereby recognizes the
primordial limitation on all rights that in the exercise of the rights, the standards under Article 19
must be observed.
21

22

23

24

Although the act is not illegal, liability for damages may arise should there be an abuse of rights, like
when the act is performed without prudence or in bad faith. In order that liability may attach under
the concept of abuse of rights, the following elements must be present, to wit: (a) the existence of a
legal right or duty, (b) which is exercised in bad faith, and (c) for the sole intent of prejudicing or
injuring another. There is no hard and fast rule that can be applied to ascertain whether or not the
principle of abuse of rights is to be invoked. The resolution of the issue depends on the
circumstances of each case.
25

Sesbreo asserts that he did not authorize Baledio or Chuchie Garcia to let anyone enter his
residence in his absence; and that Baledio herself confirmed that the members of the VOC team had
intimidated her into letting them in.
The assertion of Sesbreo is improper for consideration in this appeal. The RTC and the CA
unanimously found the testimonies of Sesbreos witnesses implausible because of inconsistencies
on material points; and even declared that the non-presentation of Garcia as a witness was odd if
1wphi1

not suspect. Considering that such findings related to the credibility of the witnesses and their
testimonies, the Court cannot review and undo them now because it is not a trier of facts, and is not
also tasked to analyze or weigh evidence all over again. Verily, a review that may tend to supplant
the findings of the trial court that had the first-hand opportunity to observe the demeanor of the
witnesses themselves should be undertaken by the Court with prudent hesitation. Only when
Sesbreo could make a clear showing of abuse in their appreciation of the evidence and records by
the trial and the appellate courts should the Court do the unusual review of the factual findings of the
trial and appellate courts. Alas, that showing was not made here.
26

27

Nor should the Court hold that Sesbreo was denied due process by the refusal of the trial judge to
inhibit from the case. Although the trial judge had issued an order for his voluntary inhibition, he still
rendered the judgment in the end in compliance with the instruction of the Executive Judge, whose
exercise of her administrative authority on the matter of the inhibition should be respected. In this
connection, we find to be apt the following observation of the CA, to wit:
28

x x x. Both Judge Paredes and Judge Priscila Agana serve the Regional Trial Court and are
therefore of co-equal rank. The latter has no authority to reverse or modify the orders of Judge
Paredes. But in ordering Judge Paredes to continue hearing the case, Judge Agana did not violate
their co-equal status or unilaterally increased her jurisdiction. It is merely part of her administrative
responsibilities as Executive Judge of the Regional Trial Court of Cebu City, of which Judge Paredes
is also a member.
29

Lastly, the Court finds nothing wrong if the writer of the decision in the CA refused to inhibit from
participating in the resolution of the motion for reconsideration filed by Sesbrefio. The motion for her
inhibition was grounded on suspicion of her bias and prejudice, but suspicion of bias and prejudice
were not enough grounds for inhibition.
30

31

Suffice it to say that the records are bereft of any indication that even suggested that the Associate
Justices of the CA who participated in the promulgation of the decision were tainted with bias against
him.
WHEREFORE, the Court DENIES the pet1t1on for review on certiorari; AFFIRMS the decision
promulgated on March 10, 2003; and DIRECTS the petitioner to pay the costs of suit.
SO ORDERED.
A.C. No. 4697

November 25, 2014

FLORENCIO A. SALADAGA, Complainant,

vs.
ATTY. ARTURO B. ASTORGA, Respondent.
x-----------------------x
A.C. No. 4728

FLORENCIO A. SALADAGA, Complainant,

vs.
ATTY. ARTURO B. ASTORGA, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Membership in the legal profession is a high personal privilege burdened with conditions, including
continuing fidelity to the law and constant possession of moral fitness. Lawyers, as guardians of the
law, play a vital role in the preservation of society, and a consequent obligation of lawyers is to
maintain the highest standards of ethical conduct. Failure to live by the standards of the legal
profession and to discharge the burden of the privilege conferred on one as a member of the bar
warrant the suspension or revocation of that privilege.
1

The Factual Antecedents

Complainant Florencio A. Saladaga and respondent Atty. Arturo B. Astorga entered into a "Deed of
Sale with Right to Repurchase" on December 2, 1981 where respondent sold (with rightof
repurchase) to complainant a parcel of coconut land located at Barangay Bunga, Baybay, Leyte
covered by Transfer Certificate of Title (TCT) No. T-662 for P15,000.00. Under the said deed,
respondent represented that he has "the perfect right to dispose as owner in fee simple" the subject
property and that the said property is "free from all liens and encumbrances." The deed also
provided that respondent, as vendor a retro, had two years within which to repurchase the property,
and if not repurchased within the said period, "the parties shall renew [the] instrument/agreement."
3

Respondent failed to exercise his right of repurchase within the period provided in the deed, and no
renewal of the contract was made even after complainant sent respondent a final demand dated
May 10, 1984 for the latter to repurchase the property. Complainant remained in peaceful
possession of the property until December 1989 when he received letters from the Rural Bank of
Albuera (Leyte), Inc. (RBAI) informing him that the property was mortgaged by respondent to RBAI,
that the bank had subsequently foreclosed on the property, and that complainant should therefore
vacate the property.
5

Complainant was alarmed and made aninvestigation. He learned the following:

(1) TCT No. T-662 was already cancelled by TCT No. T-3211 in the name of Philippine
National Bank (PNB) as early as November 17, 1972 after foreclosure proceedings;
(2) TCT No. T-3211 was cancelled by TCT No. T-7235 in the names of respondent and his
wife on January 4, 1982 pursuant to a deed of sale dated March 27,1979 between PNB and
respondent;
(3) Respondent mortgaged the subject property to RBAI on March 14, 1984, RBAI foreclosed
on the property, and subsequently obtained TCT No. TP-10635 on March 27,
1991. Complainant was subsequently dispossessed of the property by RBAI.
6

Aggrieved, complainant instituted a criminal complaint for estafa against respondent with the Office
of the Provincial Prosecutor of Leyte, docketed as I.S. No. 95-144. The Provincial Prosecutor of
Leyte approved the Resolution dated April 21, 1995 in I.S. No. 95-144 finding that "[t]he facts of [the]
case are sufficient to engender a well-founded belief that Estafa x x x has been committed and that
respondent herein is probably guilty thereof." Accordingly, an Information dated January 8,1996 was
filed before the Municipal Trial Court (MTC) of Baybay, Leyte, formally charging respondent with the
crime of estafa under Article 316, paragraphs 1 and 2 of the Revised Penal Code, committed as
follows:
8

10

11

On March 14, 1984, accused representing himself as the owner of a parcel of land known as Lot No.
7661 of the Baybay Cadastre, mortgaged the same to the Rural Bank of Albuera, Albuera, Leyte,
within the jurisdiction of this Honorable Court, knowing fully well that the possessor and owner at that
time was private complainant Florencio Saladaga by virtue of a Pacto de Retro Sale which accused
executed in favor of private complainant on 2nd December, 1981, without first
redeeming/repurchasing the same. [P]rivate complainant knowing of accused[s] unlawful act only on
or about the last week of February, 1991 when the rural bank dispossessed him of the property, the
mortgage having been foreclosed, private complainant thereby suffered damages and was
prejudiced by accused[s] unlawful transaction and misrepresentation.
The aforementioned estafa case against respondent was docketed as Criminal Case No. 3112-A.
Complainant likewise instituted the instant administrative cases against respondent by filing before
this Court an Affidavit-Complaint dated January 28, 1997 and Supplemental Complaint dated
February 27, 1997, which were docketed as A.C. No. 4697 and A.C. No. 4728, respectively. In both
complaints, complainant sought the disbarment of respondent.
12

13

The administrative cases were referred to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.
14

In his Consolidated Answer dated August 16, 2003 filed before the IBP, respondent denied that his
agreement with complainant was a pacto de retrosale. He claimed that it was an equitable mortgage
and that, if only complainant rendered an accounting of his benefits from the produce of the land, the
total amount would have exceeded P15,000.00.
15

Report and Recommendation of the Investigating Commissioner and Resolution of the IBP Board of
Governors
In a Report and Recommendation dated April 29, 2005, the Investigating Commissioner of the IBPs
Commission on Bar Discipline found that respondent was in bad faith when he dealt with
complainant and executed the "Deed of Sale with Right to Repurchase" but later on claimed that the
agreement was one of equitable mortgage. Respondent was also guilty of deceit or fraud when he
represented in the "Deed of Sale with Right to Repurchase" dated December 2, 1981 that the
property was covered by TCT No. T-662, even giving complainant the owners copy of the said
certificate of title, when the said TCT had already been cancelled on November 17, 1972 by TCT No.
T-3211 in the name of Philippine National Bank (PNB). Respondent made matters even worse, when
he had TCT No. T-3211 cancelled with the issuance of TCT No. T-7235 under his and his wifes
name on January 4,1982 without informing complainant. This was compounded by respondents
subsequent mortgage of the property to RBAI, which led to the acquisition of the property by RBAI
and the dispossession thereof of complainant. Thus, the Investigating Commissioner recommended
16

that respondent be (1) suspended from the practice of law for one year, with warning that a similar
misdeed in the future shall be dealt with more severity, and (2) ordered to return the sum
of P15,000.00, the amount he received as consideration for the pacto de retrosale, with interest at
the legal rate.
Considering respondents "commission of unlawful acts, especially crimes involving moral turpitude,
actsof dishonesty, grossly immoral conduct and deceit," the IBP Board of Governors adopted and
approved the Investigating Commissioners Report and Recommendation with modification as
follows: respondent is(1) suspended from the practice of law for two years, with warning that a
similar misdeed in the future shall be dealt with more severity, and (2) ordered to return the sum
of P15,000.00 received in consideration of the pacto de retrosale, with legal interest.
17

The Courts Ruling

The Court agrees with the recommendation of the IBP Board of Governors to suspend respondent
from the practice of law for two years, but it refrains from ordering respondent to return
the P15,000.00 consideration, plus interest.
Respondent does not deny executing the "Deed of Sale with Right to Repurchase" dated December
2, 1981 in favor of complainant. However, respondent insists that the deed is not one of sale with
pacto de retro, but one of equitable mortgage. Thus, respondent argues that he still had the legal
right to mortgage the subject property to other persons. Respondent additionally asserts that
complainant should render an accounting of the produce the latter had collected from the said
property, which would already exceed the P15,000.00 consideration stated in the deed.
There is no merit in respondents defense.
Regardless of whether the written contract between respondent and complainant is actually one of
sale with pacto de retroor of equitable mortgage, respondents actuations in his transaction with
complainant, as well as in the present administrative cases, clearly show a disregard for the highest
standards of legal proficiency, morality, honesty, integrity, and fair dealing required from lawyers, for
which respondent should be held administratively liable.
When respondent was admitted to the legal profession, he took an oath where he undertook to
"obey the laws," "do no falsehood," and "conduct [him]self as a lawyer according to the best of [his]
knowledge and discretion." He gravely violated his oath.
18

The Investigating Commissioner correctly found, and the IBP Board of Governors rightly agreed, that
respondent caused the ambiguity or vagueness in the "Deed of Sale with Right to Repurchase" as
he was the one who prepared or drafted the said instrument. Respondent could have simply
denominated the instrument as a deed of mortgage and referred to himself and complainant as
"mortgagor" and "mortgagee," respectively, rather than as "vendor a retro" and "vendee a retro." If
only respondent had been more circumspect and careful in the drafting and preparation of the deed,
then the controversy between him and complainant could havebeen avoided or, at the very least,
easily resolved. His imprecise and misleading wording of the said deed on its face betrayed lack
oflegal competence on his part. He thereby fell short of his oath to "conduct [him]self as a lawyer
according to the best of [his] knowledge and discretion."

More significantly, respondent transgressed the laws and the fundamental tenet of human relations
asembodied in Article 19 of the Civil Code:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.
Respondent, as owner of the property, had the right to mortgage it to complainant but, as a lawyer,
he should have seen to it that his agreement with complainant is embodied in an instrument that
clearly expresses the intent of the contracting parties. A lawyer who drafts a contract must see to it
that the agreement faithfully and clearly reflects the intention of the contracting parties. Otherwise,
the respective rights and obligations of the contracting parties will be uncertain, which opens the
door to legal disputes between the said parties. Indeed, the uncertainty caused by respondents poor
formulation of the "Deed of Sale with Right to Repurchase" was a significant factor in the legal
controversy between respondent and complainant. Such poor formulation reflects at the very least
negatively on the legal competence of respondent.
Under Section 63 of the Land Registration Act, the law in effect at the time the PNB acquired the
subject property and obtained TCT No. T-3211 in its name in 1972, where a decree in favor of a
purchaser who acquires mortgaged property in foreclosure proceedings becomes final, such
purchaser becomes entitled to the issuance of a new certificate of title in his name and a
memorandum thereof shall be "indorsed upon the mortgagors original certificate." TCT No. T-662,
which respondent gave complainant when they entered into the "Deed of Sale with Right to
Repurchase" dated December 2, 1981, does not bearsuch memorandum but only a memorandum
on the mortgage of the property to PNB in 1963 and the subsequent amendment of the mortgage.
19

20

Respondent dealt with complainant with bad faith, falsehood, and deceit when he entered into the
"Deed of Sale with Right to Repurchase" dated December 2, 1981 with the latter. He made it appear
that the property was covered by TCT No. T-662 under his name, even giving complainant the
owners copy of the said certificate oftitle, when the truth is that the said TCT had already been
cancelled some nine years earlier by TCT No. T-3211 in the name of PNB. He did not evencare to
correct the wrong statement in the deed when he was subsequently issued a new copy of TCT No.
T-7235 on January 4, 1982, or barely a month after the execution of the said deed. All told,
respondent clearly committed an act of gross dishonesty and deceit against complainant.
21

Canon 1 and Rule 1.01 of the Codeof Professional Responsibility provide:

CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for
law and legal processes.
Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. Under
Canon 1, a lawyer is not only mandated to personally obey the laws and the legal processes, he is
moreover expected to inspire respect and obedience thereto. On the other hand, Rule 1.01 states
the norm of conduct that is expected of all lawyers.
22

Any act or omission that is contrary to, prohibited or unauthorized by, in defiance of, disobedient to,
or disregards the law is "unlawful." "Unlawful" conduct does not necessarily imply the element of
criminality although the concept is broad enough to include such element.
23

To be "dishonest" means the disposition to lie, cheat, deceive, defraud or betray; be untrustworthy;
lacking inintegrity, honesty, probity, integrity in principle, fairness and straightforwardness. On the
other hand, conduct that is "deceitful" means as follows:
[Having] the proclivity for fraudulent and deceptive misrepresentation, artifice or device that is used
upon another who is ignorant of the true facts, to the prejudice and damage of the party imposed
upon. In order to be deceitful, the person must either have knowledge of the falsity or acted in
reckless and conscious ignorance thereof, especially if the parties are not on equal terms, and was
done with the intent that the aggrieved party act thereon, and the latter indeed acted in reliance of
the false statement or deed in the manner contemplated to his injury. The actions of respondent in
connection with the execution of the "Deed of Sale with Right to Repurchase" clearly fall within the
concept of unlawful, dishonest, and deceitful conduct. They violate Article 19 of the Civil Code. They
show a disregard for Section 63 of the Land Registration Act. They also reflect bad faith, dishonesty,
and deceit on respondents part. Thus, respondent deserves to be sanctioned.
24

Respondents breach of his oath, violation of the laws, lack of good faith, and dishonesty are
compounded by his gross disregard of this Courts directives, as well as the orders of the IBPs
Investigating Commissioner (who was acting as an agent of this Court pursuant to the Courts
referral of these cases to the IBP for investigation, report and recommendation), which caused delay
in the resolution of these administrative cases.
In particular, the Court required respondent to comment on complainants Affidavit-Complaint in A.C.
No. 4697 and Supplemental Complaint in A.C. No. 4728 on March 12, 1997 and June 25, 1997,
respectively. While he requested for several extensions of time within which to submit his comment,
no such comment was submitted prompting the Court to require him in a Resolution dated February
4,1998 to (1) show cause why he should not be disciplinarily dealt with or held in contempt for such
failure, and (2) submit the consolidated comment. Respondent neither showed cause why he should
not be disciplinarily dealt with or held in contempt for such failure, nor submitted the consolidated
comment.
25

26

When these cases were referred to the IBP and during the proceedings before the IBPs
Investigating Commissioner, respondent was again required several times to submit his consolidated
answer. He only complied on August 28, 2003, or more than six years after this Court originally
required him to do so. The Investigating Commissioner also directed the parties to submit their
respective position papers. Despite having been given several opportunities to submit the same,
respondent did not file any position paper.
27

Respondents disregard of the directives of this Court and of the Investigating Commissioner, which
caused undue delay in these administrative cases, contravenes the following provisions of the Code
of Professional Responsibility:
CANON 11 A lawyer shall observe and maintain the respect due to the courts and to judicial
officers and should insist on similar conduct by others.
xxxx
CANON 12 A lawyer shall exert every effort and consider it his duty to assist in the speedy and
efficient administration of justice.

xxxx
Rule 12.03 A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or
briefs, let the period lapse without submitting the same or offering an explanation for his failure to do
so.
Rule 12.04 A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse
court processes.
Respondents infractions are aggravated by the fact that he has already been imposed a disciplinary
sanction before. In Nuez v. Atty. Astorga, respondent was held liable for conduct unbecoming an
attorney for which he was fined P2,000.00.
28

1wphi1

Given the foregoing, the suspension of respondent from the practice of law for two years, as
recommended by the IBP Board of Governors, is proper.
The Court, however, will not adopt the recommendation of the IBP to order respondent to return the
sum ofP15,000.00 he received from complainant under the "Deed of Sale with Right to Repurchase."
This is a civil liability best determined and awarded in a civil case rather than the present
administrative cases.
In Roa v. Moreno, the Court pronounced that "[i]n disciplinary proceedings against lawyers, the only
issue is whether the officer of the court is still fit to be allowed to continue as a member of the Bar.
Our only concern is the determination of respondents administrative liability. Our findings have no
material bearing on other judicial action which the parties may choose to file against each
other."While the respondent lawyers wrongful actuations may give rise at the same time to criminal,
civil, and administrative liabilities, each must be determined in the appropriate case; and every case
must be resolved in accordance with the facts and the law applicable and the quantum of proof
required in each. Section 5, in relation to Sections 1 and 2, Rule 133 of the Rules of Court states
that in administrative cases, such as the ones atbar, only substantial evidence is required, not proof
beyond reasonable doubt as in criminal cases, or preponderance of evidence asin civil cases.
Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.
29

30

31

32

33

The Court notes that based on the same factual antecedents as the present administrative cases,
complainant instituted a criminal case for estafa against respondent, docketed as Criminal Case No.
3112-A, before the MTC. When a criminal action is instituted, the civil action for the recovery of civil
liability arising from the offense charged shall be deemed instituted with the criminal action unless
the offended party waives the civil action, reserves the right to institute it separately or institutes the
civil action prior to the criminal action. Unless the complainant waived the civil action, reserved the
right to institute it separately, or instituted the civil action prior to the criminal action, then his civil
action for the recovery of civil liability arising from the estafa committed by respondent is deemed
instituted with Criminal Case No. 3112-A. The civil liability that complainant may recover in Criminal
Case No. 3112-A includes restitution; reparation of the damage caused him; and/or indemnification
for consequential damages, which may already cover the P15,000.00 consideration complainant
had paid for the subject property.
34

35

WHEREFORE, respondent is hereby found GUILTY of the following: breach of the Lawyers Oath;
unlawful, dishonest, and deceitful conduct; and disrespect for the Court and causing undue delay of

these cases, for which he is SUSPENDED from the practice of law for a period of two (2) years,
reckoned from receipt of this Decision, with WARNING that a similar misconduct in the future shall
be dealt with more severely.
Let a copy of this Decision be furnished the Office of the Bar Confidant and the Integrated Bar of the
Philippines for their information and guidance. The Court Administrator is directed to circulate this
Decision to all courts in the country.
SO ORDERED.
TERESITA J. LEON
G.R. No. 127358

March 31, 2005

NOEL BUENAVENTURA, Petitioner,

vs.
COURT OF APPEALS and ISABEL LUCIA SINGH BUENAVENTURA, respondents.
x-------------------x
G.R. No. 127449

March 31, 2005

NOEL BUENAVENTURA, Petitioner,

vs.
COURT OF APPEALS and ISABEL LUCIA SINGH BUENAVENTURA, Respondents.
DECISION
AZCUNA, J.:
These cases involve a petition for the declaration of nullity of marriage, which was filed by petitioner
Noel Buenaventura on July 12, 1992, on the ground of the alleged psychological incapacity of his
wife, Isabel Singh Buenaventura, herein respondent. After respondent filed her answer, petitioner,
with leave of court, amended his petition by stating that both he and his wife were psychologically
incapacitated to comply with the essential obligations of marriage. In response, respondent filed an
amended answer denying the allegation that she was psychologically incapacitated. 1
On July 31, 1995, the Regional Trial Court promulgated a Decision, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into between plaintiff Noel A. Buenaventura
and defendant Isabel Lucia Singh Buenaventura on July 4, 1979, null and void ab initio;
2) Ordering the plaintiff to pay defendant moral damages in the amount of 2.5 million pesos
and exemplary damages of 1 million pesos with 6% interest from the date of this decision
plus attorneys fees ofP100,000.00;

3) Ordering the plaintiff to pay the defendant expenses of litigation of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal partnership property[,] particularly the
plaintiffs separation/retirement benefits received from the Far East Bank [and] Trust
Company[,] by ceding, giving and paying to her fifty percent (50%) of the net amount
of P3,675,335.79 or P1,837,667.89 together with 12% interest per annum from the date of
this decision and one-half (1/2) of his outstanding shares of stock with Manila Memorial Park
and Provident Group of Companies;
5) Ordering him to give a regular support in favor of his son Javy Singh Buenaventura in the
amount ofP15,000.00 monthly, subject to modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh Buenaventura to his mother, the
herein defendant; and
7) Hereby authorizing the defendant to revert back to the use of her maiden family name
Singh.
Let copies of this decision be furnished the appropriate civil registry and registries of
properties.
SO ORDERED.2
Petitioner appealed the above decision to the Court of Appeals. While the case was pending in the
appellate court, respondent filed a motion to increase the P15,000 monthly support pendente lite of
their son Javy Singh Buenaventura. Petitioner filed an opposition thereto, praying that it be denied or
that such incident be set for oral argument.3
On September 2, 1996, the Court of Appeals issued a Resolution increasing the support pendente
lite toP20,000.4 Petitioner filed a motion for reconsideration questioning the said Resolution. 5
On October 8, 1996, the appellate court promulgated a Decision dismissing petitioners appeal for
lack of merit and affirming in toto the trial courts decision. 6 Petitioner filed a motion for
reconsideration which was denied. From the abovementioned Decision, petitioner filed the instant
Petition for Review on Certiorari.
On November 13, 1996, through another Resolution, the Court of Appeals denied petitioners motion
for reconsideration of the September 2, 1996 Resolution, which increased the monthly support for
the son.7Petitioner filed a Petition for Certiorari to question these two Resolutions.
On July 9, 1997, the Petition for Review on Certiorari8 and the Petition for Certiorari9 were ordered
consolidated by this Court.10
In the Petition for Review on Certiorari petitioner claims that the Court of Appeals decided the case
not in accord with law and jurisprudence, thus:

1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL DAMAGES IN THE AMOUNT

OF P2.5 MILLION AND EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST
FROM THE DATE OF ITS DECISION, WITHOUT ANY LEGAL AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEYS FEES AND P50,000.00 EXPENSES OF
LITIGATION, PLUS COSTS, TO DEFENDANT-APPELLEE, WITHOUT FACTUAL AND
LEGAL BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY DEFENDANT-APPELLEE
ONE-HALF ORP1,837,667.89 OUT OF HIS RETIREMENT BENEFITS RECEIVED FROM
THE FAR EAST BANK AND TRUST CO., WITH 12% INTEREST THEREON FROM THE
DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID RETIREMENT BENEFITS ARE
GRATUITOUS AND EXCLUSIVE PROPERTY OF NOEL, AND ALSO TO DELIVER TO
DEFENDANT-APPELLEE ONE-HALF OF HIS SHARES OF STOCK WITH THE MANILA
MEMORIAL PARK AND THE PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID
SHARES OF STOCK WERE ACQUIRED BY NOEL BEFORE HIS MARRIAGE TO
RESPONDENT ISABEL AND ARE, THEREFORE, AGAIN HIS EXCLUSIVE PROPERTIES;
AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER THE PARTIES MINOR
CHILD TO DEFENDANT-APPELLEE WITHOUT ASKING THE CHILD (WHO WAS
ALREADY 13 YEARS OLD AT THAT TIME) HIS CHOICE AS TO WHOM, BETWEEN HIS
TWO PARENTS, HE WOULD LIKE TO HAVE CUSTODY OVER HIS PERSON.11
In the Petition for Certiorari, petitioner advances the following contentions:
THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT REFUSED TO
SET RESPONDENTS MOTION FOR INCREASED SUPPORT FOR THE PARTIES SON
FOR HEARING.12
THERE WAS NO NEED FOR THE COURT OF APPEALS TO INCREASE JAVYS
MONTHLY SUPPORT OF P15,000.00 BEING GIVEN BY PETITIONER EVEN AT PRESENT
PRICES.13
IN RESOLVING RESPONDENTS MOTION FOR THE INCREASE OF JAVYS SUPPORT,
THE COURT OF APPEALS SHOULD HAVE EXAMINED THE LIST OF EXPENSES
SUBMITTED BY RESPONDENT IN THE LIGHT OF PETITIONERS OBJECTIONS
THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS ENTITLED TO A P5,000
INCREASE IN SUPPORT AS SAID AMOUNT IS "TOO MINIMAL."14
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN PETITIONER AN
OPPORTUNITY TO PROVE HIS PRESENT INCOME TO SHOW THAT HE CANNOT
AFFORD TO INCREASE JAVYS SUPPORT.15
With regard to the first issue in the main case, the Court of Appeals articulated:
On Assignment of Error C, the trial court, after findings of fact ascertained from the
testimonies not only of the parties particularly the defendant-appellee but likewise, those of

the two psychologists, awarded damages on the basis of Articles 21, 2217 and 2229 of the
Civil Code of the Philippines.
Thus, the lower court found that plaintiff-appellant deceived the defendant-appellee into
marrying him by professing true love instead of revealing to her that he was under heavy
parental pressure to marry and that because of pride he married defendant-appellee; that he
was not ready to enter into marriage as in fact his career was and always would be his first
priority; that he was unable to relate not only to defendant-appellee as a husband but also to
his son, Javy, as a father; that he had no inclination to make the marriage work such that in
times of trouble, he chose the easiest way out, that of leaving defendantappellee and their
son; that he had no desire to keep defendant-appellee and their son as proved by his
reluctance and later, refusal to reconcile after their separation; that the aforementioned
caused defendant-appellee to suffer mental anguish, anxiety, besmirched reputation,
sleepless nights not only in those years the parties were together but also after and
throughout their separation.
Plaintiff-appellant assails the trial courts decision on the ground that unlike those arising
from a breach in ordinary contracts, damages arising as a consequence of marriage may not
be awarded. While it is correct that there is, as yet, no decided case by the Supreme Court
where damages by reason of the performance or non-performance of marital obligations
were awarded, it does not follow that no such award for damages may be made.
Defendant-appellee, in her amended answer, specifically prayed for moral and exemplary
damages in the total amount of 7 million pesos. The lower court, in the exercise of its
discretion, found full justification of awarding at least half of what was originally prayed for.
We find no reason to disturb the ruling of the trial court.16
The award by the trial court of moral damages is based on Articles 2217 and 21 of the Civil Code,
which read as follows:
ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendants wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
The trial court referred to Article 21 because Article 221917 of the Civil Code enumerates the cases in
which moral damages may be recovered and it mentions Article 21 as one of the instances. It must
be noted that Article 21 states that the individual must willfully cause loss or injury to another. There
is a need that the act is willful and hence done in complete freedom. In granting moral damages,
therefore, the trial court and the Court of Appeals could not but have assumed that the acts on which
the moral damages were based were done willfully and freely, otherwise the grant of moral damages
would have no leg to stand on.
On the other hand, the trial court declared the marriage of the parties null and void based on Article
36 of the Family Code, due to psychological incapacity of the petitioner, Noel Buenaventura. Article
36 of the Family Code states:

A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, shall likewise be
void even if such incapacity becomes manifest only after its solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that causes a party to be truly
incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so expressed by Article 68 of the
Family Code, include their mutual obligations to live together, observe love, respect and
fidelity and render help and support. There is hardly any doubt that the intendment of the law
has been to confine the meaning of "psychological incapacity" to the most serious cases of
personality disorders clearly demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage. . . .18
The Court of Appeals and the trial court considered the acts of the petitioner after the marriage as
proof of his psychological incapacity, and therefore a product of his incapacity or inability to comply
with the essential obligations of marriage. Nevertheless, said courts considered these acts as willful
and hence as grounds for granting moral damages. It is contradictory to characterize acts as a
product of psychological incapacity, and hence beyond the control of the party because of an innate
inability, while at the same time considering the same set of acts as willful. By declaring the petitioner
as psychologically incapacitated, the possibility of awarding moral damages on the same set of facts
was negated. The award of moral damages should be predicated, not on the mere act of entering
into the marriage, but on specific evidence that it was done deliberately and with malice by a party
who had knowledge of his or her disability and yet willfully concealed the same. No such evidence
appears to have been adduced in this case.
For the same reason, since psychological incapacity means that one is truly incognitive of the basic
marital covenants that one must assume and discharge as a consequence of marriage, it removes
the basis for the contention that the petitioner purposely deceived the private respondent. If the
private respondent was deceived, it was not due to a willful act on the part of the petitioner.
Therefore, the award of moral damages was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows that the grant of exemplary damages
cannot stand since the Civil Code provides that exemplary damages are imposed in addition to
moral, temperate, liquidated or compensatory damages.19
With respect to the grant of attorneys fees and expenses of litigation the trial court explained, thus:
Regarding Attorneys fees, Art. 2208 of the Civil Code authorizes an award of attorneys fees
and expenses of litigation, other than judicial costs, when as in this case the plaintiffs act or
omission has compelled the defendant to litigate and to incur expenses of litigation to protect
her interest (par. 2), and where the Court deems it just and equitable that attorneys fees and
expenses of litigation should be recovered. (par. 11) 20
The Court of Appeals reasoned as follows:
On Assignment of Error D, as the award of moral and exemplary damages is fully justified,
the award of attorneys fees and costs of litigation by the trial court is likewise fully justified. 21

The acts or omissions of petitioner which led the lower court to deduce his psychological incapacity,
and his act in filing the complaint for the annulment of his marriage cannot be considered as unduly
compelling the private respondent to litigate, since both are grounded on petitioners psychological
incapacity, which as explained above is a mental incapacity causing an utter inability to comply with
the obligations of marriage. Hence, neither can be a ground for attorneys fees and litigation
expenses. Furthermore, since the award of moral and exemplary damages is no longer justified, the
award of attorneys fees and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank and Trust Co. and the shares of stock
in the Manila Memorial Park and the Provident Group of Companies, the trial court said:
The third issue that must be resolved by the Court is what to do with the assets of the
conjugal partnership in the event of declaration of annulment of the marriage. The Honorable
Supreme Court has held that the declaration of nullity of marriage carries ipso facto a
judgment for the liquidation of property (Domingo v. Court of Appeals, et al., G.R. No.
104818, Sept. 17, 1993, 226 SCRA, pp. 572 573, 586). Thus, speaking through Justice
Flerida Ruth P. Romero, it was ruled in this case:
When a marriage is declared void ab initio, the law states that the final judgment
therein shall provide for the liquidation, partition and distribution of the properties of
the spouses, the custody and support of the common children and the delivery of
their presumptive legitimes, unless such matters had been adjudicated in the
previous proceedings.
The parties here were legally married on July 4, 1979, and therefore, all property acquired
during the marriage, whether the acquisition appears to have been made, contracted or
registered in the name of one or both spouses, is presumed to be conjugal unless the
contrary is proved (Art. 116, New Family Code; Art. 160, Civil Code). Art. 117 of the Family
Code enumerates what are conjugal partnership properties. Among others they are the
following:
1) Those acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one of the
spouses;
2) Those obtained from the labor, industry, work or profession of either or both of the
spouses;
3) The fruits, natural, industrial, or civil, due or received during the marriage from the
common property, as well as the net fruits from the exclusive property of each
spouse. . . .
Applying the foregoing legal provisions, and without prejudice to requiring an inventory of
what are the parties conjugal properties and what are the exclusive properties of each
spouse, it was disclosed during the proceedings in this case that the plaintiff who worked first
as Branch Manager and later as Vice-President of Far East Bank & Trust Co. received
separation/retirement package from the said bank in the amount of P3,701,500.00 which
after certain deductions amounting to P26,164.21 gave him a net amount of P3,675,335.79
and actually paid to him on January 9, 1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having shown

debts or obligations other than those deducted from the said retirement/separation pay,
under Art. 129 of the Family Code "The net remainder of the conjugal partnership properties
shall constitute the profits, which shall be divided equally between husband and wife, unless
a different proportion or division was agreed upon in the marriage settlement or unless there
has been a voluntary waiver or forfeiture of such share as provided in this Code." In this
particular case, however, there had been no marriage settlement between the parties, nor
had there been any voluntary waiver or valid forfeiture of the defendant wifes share in the
conjugal partnership properties. The previous cession and transfer by the plaintiff of his onehalf (1/2) share in their residential house and lot covered by T.C.T. No. S-35680 of the
Registry of Deeds of Paraaque, Metro Manila, in favor of the defendant as stipulated in their
Compromise Agreement dated July 12, 1993, and approved by the Court in its Partial
Decision dated August 6, 1993, was actually intended to be in full settlement of any and all
demands for past support. In reality, the defendant wife had allowed some concession in
favor of the plaintiff husband, for were the law strictly to be followed, in the process of
liquidation of the conjugal assets, the conjugal dwelling and the lot on which it is situated
shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom
their only child has chosen to remain (Art. 129, par. 9). Here, what was done was one-half
(1/2) portion of the house was ceded to defendant so that she will not claim anymore for past
unpaid support, while the other half was transferred to their only child as his presumptive
legitime.
Consequently, nothing yet has been given to the defendant wife by way of her share in the
conjugal properties, and it is but just, lawful and fair, that she be given one-half (1/2) share of
the separation/retirement benefits received by the plaintiff the same being part of their
conjugal partnership properties having been obtained or derived from the labor, industry,
work or profession of said defendant husband in accordance with Art. 117, par. 2 of the
Family Code. For the same reason, she is entitled to one-half (1/2) of the outstanding shares
of stock of the plaintiff husband with the Manila Memorial Park and the Provident Group of
Companies.22
The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the order of the trial court for him to give
one-half of his separation/retirement benefits from Far East Bank & Trust Company and half
of his outstanding shares in Manila Memorial Park and Provident Group of Companies to the
defendant-appellee as the latters share in the conjugal partnership.
On August 6, 1993, the trial court rendered a Partial Decision approving the Compromise
Agreement entered into by the parties. In the same Compromise Agreement, the parties had
agreed that henceforth, their conjugal partnership is dissolved. Thereafter, no steps were
taken for the liquidation of the conjugal partnership.
Finding that defendant-appellee is entitled to at least half of the separation/retirement
benefits which plaintiff-appellant received from Far East Bank & Trust Company upon his
retirement as Vice-President of said company for the reason that the benefits accrued from
plaintiffappellants service for the bank for a number of years, most of which while he was
married to defendant-appellee, the trial court adjudicated the same. The same is true with
the outstanding shares of plaintiff-appellant in Manila Memorial Park and Provident Group of
Companies. As these were acquired by the plaintiff-appellant at the time he was married to

defendant-appellee, the latter is entitled to one-half thereof as her share in the conjugal
partnership. We find no reason to disturb the ruling of the trial court. 23
Since the present case does not involve the annulment of a bigamous marriage, the provisions of
Article 50 in relation to Articles 41, 42 and 43 of the Family Code, providing for the dissolution of the
absolute community or conjugal partnership of gains, as the case may be, do not apply. Rather, the
general rule applies, which is that in case a marriage is declared void ab initio, the property regime
applicable and to be liquidated, partitioned and distributed is that of equal co-ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon City,24 this Court expounded on the
consequences of a void marriage on the property relations of the spouses and specified the
applicable provisions of law:
The trial court correctly applied the law. In a void marriage, regardless of the cause thereof,
the property relations of the parties during the period of cohabitation is governed by the
provisions of Article 147 or Article 148, such as the case may be, of the Family Code. Article
147 is a remake of Article 144 of the Civil Code as interpreted and so applied in previous
cases; it provides:
ART. 147. When a man and a woman who are capacitated to marry each other, live
exclusively with each other as husband and wife without the benefit of marriage or
under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry shall
be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together
shall be presumed to have been obtained by their joint efforts, work or industry, and
shall be owned by them in equal shares. For purposes of this Article, a party who did
not participate in the acquisition by the other party of any property shall be deemed
to have contributed jointly in the acquisition thereof if the former's efforts consisted in
the care and maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent of
the other, until after the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of the common children or their
descendants, each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place upon termination of the
cohabitation.
This peculiar kind of co-ownership applies when a man and a woman, suffering no legal
impediment to marry each other, so exclusively live together as husband and wife under a
void marriage or without the benefit of marriage. The term "capacitated" in the provision (in
the first paragraph of the law) refers to thelegal capacity of a party to contract marriage, i.e.,

any "male or female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38" of the Code.
Under this property regime, property acquired by both spouses through
their work and industry shall be governed by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed to have been obtained through their joint
efforts. A party who did not participate in the acquisition of the property shall still be
considered as having contributed thereto jointly if said party's "efforts consisted in the care
and maintenance of the family household." Unlike the conjugal partnership of gains, the fruits
of the couple's separate property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has clarified Article 144
of the Civil Code; in addition, the law now expressly provides that
(a) Neither party can dispose or encumber by act[s] inter vivos [of] his or her share in coownership property, without the consent of the other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her share in the
co-ownership in favor of their common children; in default thereof or waiver by any or all of
the common children, each vacant share shall belong to the respective surviving
descendants, or still in default thereof, to the innocent party. The forfeiture shall take place
upon the termination of the cohabitation or declaration of nullity of the marriage.

In deciding to take further cognizance of the issue on the settlement of the parties' common
property, the trial court acted neither imprudently nor precipitately; a court which had
jurisdiction to declare the marriage a nullity must be deemed likewise clothed with authority
to resolve incidental and consequential matters. Nor did it commit a reversible error in ruling
that petitioner and private respondent own the "family home" and all their common property
in equal shares, as well as in concluding that, in the liquidation and partition of the property
owned in common by them, the provisions on co-ownership under the Civil Code, not Articles
50, 51 and 52, in relation to Articles 102 and 129, of the Family Code, should aptly prevail.
The rules set up to govern the liquidation of either the absolute community or the conjugal
partnership of gains, the property regimes recognized for valid and voidable marriages (in
the latter case until the contract is annulled), are irrelevant to the liquidation of the coownership that exists between common-law spouses. The first paragraph of Article 50 of the
Family Code, applying paragraphs (2), (3), (4) and (5) of Article 43, relates only, by its explicit
terms, to voidable marriages and, exceptionally, to void marriages under Article 40 of the
Code, i.e., the declaration of nullity of a subsequent marriage contracted by a spouse of a
prior void marriage before the latter is judicially declared void. The latter is a special rule that
somehow recognizes the philosophy and an old doctrine that void marriages are inexistent
from the very beginning and no judicial decree is necessary to establish their nullity. In now
requiring for purposes of remarriage, the declaration of nullity by final judgment of the
previously contracted void marriage, the present law aims to do away with any continuing
uncertainty on the status of the second marriage. It is not then illogical for the provisions of
Article 43, in relation to Articles 41 and 42, of the Family Code, on the effects of the
termination of a subsequent marriage contracted during the subsistence of a previous
marriage to be made applicable pro hac vice. In all other cases, it is not to be assumed that

the law has also meant to have coincident property relations, on the one hand, between
spouses in valid and voidable marriages (before annulment) and, on the other, between
common-law spouses or spouses of void marriages, leaving to ordain, in the latter case, the
ordinary rules on co-ownership subject to the provision of Article 147 and Article 148 of the
Family Code. It must be stressed, nevertheless, even as it may merely state the obvious,
that the provisions of the Family Code on the "family home," i.e., the provisions found in Title
V, Chapter 2, of the Family Code, remain in force and effect regardless of the property
regime of the spouses.25
Since the properties ordered to be distributed by the court a quo were found, both by the trial court
and the Court of Appeals, to have been acquired during the union of the parties, the same would be
covered by the co-ownership. No fruits of a separate property of one of the parties appear to have
been included or involved in said distribution. The liquidation, partition and distribution of the
properties owned in common by the parties herein as ordered by the court a quo should, therefore,
be sustained, but on the basis of co-ownership and not of the regime of conjugal partnership of
gains.
As to the issue on custody of the parties over their only child, Javy Singh Buenaventura, it is now
moot since he is about to turn twenty-five years of age on May 27, 200526 and has, therefore,
attained the age of majority.
With regard to the issues on support raised in the Petition for Certiorari, these would also now be
moot, owing to the fact that the son, Javy Singh Buenaventura, as previously stated, has attained
the age of majority.
WHEREFORE, the Decision of the Court of Appeals dated October 8, 1996 and its Resolution dated
December 10, 1996 which are contested in the Petition for Review (G.R. No. 127449), are hereby
MODIFIED, in that the award of moral and exemplary damages, attorneys fees, expenses of
litigation and costs are deleted. The order giving respondent one-half of the retirement benefits of
petitioner from Far East Bank and Trust Co. and one-half of petitioners shares of stock in Manila
Memorial Park and in the Provident Group of Companies is sustained but on the basis of the
liquidation, partition and distribution of the co-ownership and not of the regime of conjugal
partnership of gains. The rest of said Decision and Resolution are AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358) contesting the Court of Appeals Resolutions
of September 2, 1996 and November 13, 1996 which increased the support pendente lite in favor of
the parties son, Javy Singh Buenaventura, is now MOOT and ACADEMIC and is, accordingly,
DISMISSED.
No costs.
SO ORDERED.
G.R. No. 174715

October 11, 2012

FILINVEST LAND, INC., EFREN C. GUTIERRE and LINA DE GUZMAN-FERRER, Petitioners,

vs.
ABDUL BACKY, ABEHERA, BAIYA, EDRIS, HADJI GULAM, JAMELLA, KIRAM, LUCAYA,

MONER, OMAR, RAMIR, ROBAYCA, SATAR, TAYBA ALL SURNAMED NGILAY, EDMER
ANDONG, UNOS BANTANGAN and NADJER ESQUIVEL, Respondents.
DECISION
PERALTA, J.:
For this Court's consideration is the Petition for Review on Certiorari under Rule 45, dated November
9, 2006, of petitioner Filinvest Land, Inc., which seeks to set aside the Decision 1 dated March 30,
2006 and Resolution2dated September 18, 2006 of the Court of Appeals (CA) partially reversing the
Decision3 dated October 1, 2003 of the Regional Trial Court, Las Pias, Branch 253 (RTC).
The factual antecedents, as found in the records follow.
Respondents were grantees of agricultural public lands located in Tambler, General Santos City
through Homestead and Fee patents sometime in 1986 and 1991 which are covered by and
specifically described in the following Original Certificates of Title issued by the Register of Deeds of
General Santos City:
OCT No.

Area (sq. m.)

Grantee

Date Granted

P-5204

38,328

Abdul Backy Ngilay

November 11, 1986

P-5205

49,996

Hadji Gulam Ngilay

November 11, 1986

P-5206

49,875

Edris A. Ngilay

November 11, 1986

P-5207

44,797

Robayca A. Ngilay

November 11, 1986

P-5209

20,000

Omar Ngilay

November 11, 1986

P-5211

29,990

Tayba Ngilay

November 11, 1986

P-5212

48,055

Kiram Ngilay

November 11, 1986

P-5578

20,408

Nadjer Esquevel

November 24, 1991

P-5579

35,093

Unos Bantangan

November 24, 1991

P-5580

39,507

Moner Ngilay

November 24, 1991

P-5582

44,809

Baiya Ngilay

November 24, 1991

P-5583

10,050

Jamela Ngilay

November 24, 1991

P-5584

49,993

Ramir Ngilay

November 24, 1991

P-5586

40,703

Satar Ngilay

November 24, 1991

P-5590

20,000

Abehara Ngilay

November 24, 1991

P-5592

41,645

Lucaya Ngilay

November 24, 1991

P-5595

13,168

Edmer Andong

November 24, 1991

Negotiations were made by petitioner, represented by Lina de Guzman-Ferrer with the patriarch of
the Ngilays, Hadji Gulam Ngilay sometime in 1995. Eventually, a Deed of Conditional Sale of the
above- enumerated properties in favor of petitioner Filinvest Land, Inc. was executed. Upon its

execution, respondents were asked to deliver to petitioner the original owner's duplicate copy of the
certificates of title of their respective properties. Respondents received the downpayment for the
properties on October 28, 1995.
A few days after the execution of the aforestated deeds and the delivery of the corresponding
documents to petitioner, respondents came to know that the sale of their properties was null and
void, because it was done within the period that they were not allowed to do so and that the sale did
not have the approval of the Secretary of the Department of Environment and Natural Resources
(DENR) prompting them to file a case for the declaration of nullity of the deeds of conditional and
absolute sale of the questioned properties and the grant of right of way with the RTC, Las Pias,
Branch 253.
On the other hand, petitioner claims that sometime in 1995, the representative of Hadji Ngilay
approached petitioner to propose the sale of a portion of his properties. Thereafter, representatives
of petitioner flew to General Santos City from Manila to conduct an ocular inspection of the subject
properties. Petitioner was willing to purchase the properties but seeing that some of the properties
were registered as land grants through homestead patents, representatives of petitioner informed
Ngilay that they would return to General Santos City in a few months to finalize the sale as ten (10)
certificates of title were issued on November 24, 1991.
According to petitioner, Ngilay and his children prevailed upon the representatives of petitioner to
make an advance payment. To accommodate the Ngilays, petitioner acceded to making an advance
with the understanding that petitioner could demand anytime the return of the advance payment
should Ngilay not be able to comply with the conditions of the sale. The Ngilays likewise undertook
to secure the necessary approvals of the DENR before the consummation of the sale.
The RTC ruled in favor of Filinvest Land, Inc. and upheld the sale of all the properties in litigation. It
found that the sale of those properties whose original certificates of title were issued by virtue of the
1986 Patents was valid, considering that the prohibitory period ended in 1991, or way before the
transaction took place. As to those patents awarded in 1991, the same court opined that since those
properties were the subject of a deed of conditional sale, compliance with those conditions is
necessary for there to be a perfected contract between the parties. The RTC also upheld the grant of
right of way as it adjudged that the right of way agreement showed that the right of way was granted
to provide access from the highway to the properties to be purchased. The dispositive portion of the
Decision dated October 1, 2003 reads:
WHEREFORE, premises considered, the Court upholds the sale of all the properties in litigation. It
likewise upholds the grant of right of way in favor of the respondent. Consequently, the petition is
DISMISSED.
No pronouncement as to damages for failure to prove the same.
Costs against the petitioners.
SO ORDERED.4
Respondents elevated the case to the CA in which the latter modified the judgment of the
RTC. While the CA upheld the validity of the sale of the properties the patents of which were
awarded in 1986, including the corresponding grant of right of way for the same lots, it nullified the
disposition of those properties granted through patents in 1991 and the right of way on the same
properties. As to the "1991 Patents," the CA ruled that the contract of sale between the parties was a
perfected contract, hence, the parties entered into a prohibited conveyance of a homestead within
1wphi1

the prohibitive period of five years from the issuance of the patent. The CA Decision dated March 30,
2006 disposed the case as follows:
WHEREFORE, the assailed Decision dated October 1, 2003 is MODIFIED:
a) The Deed of Conditional Sale and Deed of Absolute Sale for the properties covered by the
"1991 Patents", as well as the Right of Way Agreement thereto, are declared null and void.
The Register of Deeds of General Santos City is consequently directed to cancel the
certificates of title covered by the "1991 Patents" issued in favor of appellee Filinvest and to
issue new titles in favor of herein appellants.
b) The sale of the properties covered by the "1986 Patents", including the corresponding
grant of way for said lots, are declared valid.
SO ORDERED.5
Petitioners filed a Motion for Partial Reconsideration, but it was denied by the CA.
Hence, the present petition.
The grounds relied upon are:
1.
A CONDITIONAL SALE INVOLVING THE 1991 PATENTS DID NOT VIOLATE THE PROHIBITION
AGAINST ALIENATION OF HOMESTEADS UNDER THE PUBLIC LAND ACT SINCE NO ACTUAL
TRANSFER OR DISPOSITION WAS PERFECTED UNTIL ALL THE CONDITIONS OF THE DEED
ARE FULFILLED.
2.
REGISTRATION IS THE OPERATIVE ACT THAT CONVEYS OR DISPOSES RIGHTS IN REAL
PROPERTY. BEING UNREGISTERED, THE DEED OF CONDITIONAL SALE DID NOT CONVEY
OR DISPOSE OF THE 1991 HOMESTEADS OR ANY RIGHTS THEREIN IN VIOLATION OF THE
PUBLIC LAND ACT.
3.
ASSUMING THE NULLITY OF THE SALE OF THE 1991 PATENTS, THE HONORABLE COURT OF
APPEALS SHOULD HAVE ORDERED RESPONDENTS AS A MATTER OF LAW TO RETURN TO
PETITIONERS WHAT THEY HAVE RECEIVED.6
In their Comment7 dated March 5, 2007, respondents stated the following counter-arguments:
(1) The Honorable Court of Appeals did not err in holding that the Deed of Conditional Sale
and Deed of Absolute Sale for the properties covered by the 1991 Patents, as well as the
Right of Way Agreement thereto is null and void for the simplest reason that the said
transactions were volatile of the Public Land Act.
(2) The questions raised by the Petitioner, Filinvest Land Inc. (FLI) are unsubstantial to
require consideration.8

In its Reply9 dated July 30, 2007, petitioner insists that the prohibition against alienation and
disposition of land covered by Homestead Patents is a prohibition against the actual loss of the
homestead within the five-year prohibitory period, not against all contracts including those that do
not result in such an actual loss of ownership or possession. It also points out that respondents
themselves admit that the transfer certificates of title covering the ten parcels of land are all dated
1998, which confirms its declaration that the lands covered by 1991 Homestead Patents were not
conveyed to Filinvest until after the five-year prohibitory period.
The petition is unmeritorious.
The five-year prohibitory period following the issuance of the homestead patent is provided under
Section 118 of Commonwealth Act No. 141, as amended by Commonwealth Act No. 456, otherwise
known as the Public Land Act.10 It bears stressing that the law was enacted to give the homesteader
or patentee every chance to preserve for himself and his family the land that the State had
gratuitously given to him as a reward for his labour in cleaning and cultivating it. 11 Its basic objective,
as the Court had occasion to stress, is to promote public policy that is to provide home and decent
living for destitute, aimed at providing a class of independent small landholders which is the bulwark
of peace and order.12 Hence, any act which would have the effect of removing the property subject of
the patent from the hands of a grantee will be struck down for being violative of the law.13
In the present case, the negotiations for the purchase of the properties covered by the patents
issued in 1991 were made in 1995 and, eventually, an undated Deed of Conditional Sale was
executed. On October 28, 1995, respondents received the downpayment of P14,000.000.00 for the
properties covered by the patents issued in 1991. Applying the five-year prohibition, the properties
covered by the patent issued on November 24, 1991 could only be alienated after November 24,
1996. Therefore, the sale, having been consummated on October 28, 1995, or within the five-year
prohibition, is as ruled by the CA, void.
Petitioner argues that the correct formulation of the issue is not whether there was a perfected
contract between the parties during the period of prohibition, but whether by such deed of conditional
sale there was "alienation or encumbrance" within the contemplation of the law. This is wrong. The
prohibition does not distinguish between consummated and executory sale. The conditional sale
entered into by the parties is still a conveyance of the homestead patent. As correctly ruled by the
CA, citing Ortega v. Tan:14
And, even assuming that the disputed sale was not yet perfected or consummated, still, the
transaction cannot be validated. The prohibition of the law on the sale or encumbrance of the
homestead within five years after the grant is MANDATORY. The purpose of the law is to promote a
definite policy, i.e., "to preserve and keep in the family of the homesteader that portion of the public
land which the State has gratuitously given to him." Thus, the law does not distinguish between
executory and consummated sales. Where the sale of a homestead was perfected within the
prohibitory period of five years, the fact that the formal deed of sale was executed after the
expiration of the staid period DID NOT and COULD NOT legalize a contract that was void from its
inception. To hold valid such arrangement would be to throw the door open to all possible fraudulent
subterfuges and schemes which persons interested in the land given to a homesteader may devise
in circumventing and defeating the legal provisions prohibiting their alienation within five years from
the issuance of the patent.15
To repeat, the conveyance of a homestead before the expiration of the five-year prohibitory period
following the issuance of the homestead patent is null and void and cannot be enforced, for it is not
within the competence of any citizen to barter away what public policy by law seeks to preserve. 16

Nevertheless, petitioner does not err in seeking the return of the down payment as a consequence of
the sale having been declared void. The rule is settled that the declaration of nullity of a contract
which is void ab initio operates to restore things to the state and condition in which they were found
before the execution thereof.17Petitioner is correct in its argument that allowing respondents to keep
the amount received from petitioner is tantamount to judicial acquiescence to unjust enrichment.
Unjust enrichment exists "when a person unjustly retains a benefit to the loss of another, or when a
person retains money or property of another against the fundamental principles of justice, equity and
good conscience."18 There is unjust enrichment under Article 22 of the Civil Code when (1) a person
is unjustly benefited, and (2) such benefit is derived at the expense of or with damages to
another.19 Thus, the sale which created the obligation of petitioner to pay the agreed amount having
been declared void, respondents have the duty to return the down payment as they no longer have
the right to keep it. The principle of unjust enrichment essentially contemplates payment when there
is no duty to pay, and the person who receives the payment has no right to receive it. 20 As found by
the CA and undisputed by the parties, the amount or the down payment made is P14,000,000.00
which shall also be the amount to be returned by respondents.
WHEREFORE, the Petition for Review on Certiorari dated November 9, 2006 or petitioner Filinvest
Land, Inc. is hereby DENIED. Consequently, the Decision dated March 30, 2006 and Resolution
dated September 18, 2006 or the Court of Appeals are hereby AFFIRMED with the MODIFICATION
that respondents return the amount of P14,000,000.00 given by petitioner as down payment for the
sale which is ruled to be void ab initio.
SO ORDERED.
G.R. No. 160600

January 15, 2014

DOMINGO GONZALO, Petitioner,

vs.
JOHN TARNATE, JR., Respondent.
DECISION
BERSAMIN, J.:
The doctrine of in pari delicto which stipulates that the guilty parties to an illegal contract are not
entitled to any relief, cannot prevent a recovery if doing so violates the public policy against unjust
enrichment.
Antecedents
After the Department of Public Works and Highways (DPWH) had awarded on July 22, 1997 the
contract for the improvement of the Sadsadan-Maba-ay Section of the Mountain Province-Benguet
Road in the total amount of 7 014 963 33 to his company, Gonzalo Construction, petitioner Domingo
Gonzalo (Gonzalo) subcontracted to respondent John Tarnate, Jr. (Tarnate) on October 15, 1997,
the supply of materials and labor for the project under the latter s business known as JNT
Aggregates. Their agreement stipulated, among others, that Tarnate would pay to Gonzalo eight
percent and four percent of the contract price, respectively, upon Tarnate s first and second billing in
the project.
1

In furtherance of their agreement, Gonzalo executed on April 6, 1999 a deed of assignment whereby
he, as the contractor, was assigning to Tarnate an amount equivalent to 10% of the total collection
from the DPWH for the project. This 10% retention fee (equivalent to P233,526.13) was the rent for
Tarnates equipment that had been utilized in the project. In the deed of assignment, Gonzalo further
authorized Tarnate to use the official receipt of Gonzalo Construction in the processing of the
documents relative to the collection of the 10% retention fee and in encashing the check to be
issued by the DPWH for that purpose. The deed of assignment was submitted to the DPWH on April
15, 1999. During the processing of the documents for the retention fee, however, Tarnate learned
that Gonzalo had unilaterally rescinded the deed of assignment by means of an affidavit of
cancellation of deed of assignment dated April 19, 1999 filed in the DPWH on April 22, 1999; and
that the disbursement voucher for the 10% retention fee had then been issued in the name of
Gonzalo, and the retention fee released to him.
3

Tarnate demanded the payment of the retention fee from Gonzalo, but to no avail. Thus, he brought
this suit against Gonzalo on September 13, 1999 in the Regional Trial Court (RTC) in Mountain
Province to recover the retention fee of P233,526.13, moral and exemplary damages for breach of
contract, and attorneys fees.
6

In his answer, Gonzalo admitted the deed of assignment and the authority given therein to Tarnate,
but averred that the project had not been fully implemented because of its cancellation by the
DPWH, and that he had then revoked the deed of assignment. He insisted that the assignment could
not stand independently due to its being a mere product of the subcontract that had been based on
his contract with the DPWH; and that Tarnate, having been fully aware of the illegality and
ineffectuality of the deed of assignment from the time of its execution, could not go to court with
unclean hands to invoke any right based on the invalid deed of assignment or on the product of such
deed of assignment.
7

Ruling of the RTC

On January 26, 2001, the RTC, opining that the deed of assignment was a valid and binding
contract, and that Gonzalo must comply with his obligations under the deed of assignment, rendered
judgment in favor of Tarnate as follows:
WHEREFORE, premises considered and as prayed for by the plaintiff, John Tarnate, Jr. in his
Complaint for Sum of Money, Breach of Contract With Damages is hereby RENDERED in his favor
and against the above-named defendant Domingo Gonzalo, the Court now hereby orders as follows:
1. Defendant Domingo Gonzalo to pay the Plaintiff, John Tarnate, Jr., the amount of TWO
HUNDRED THIRTY THREE THOUSAND FIVE HUNDRED TWENTY SIX and 13/100
PESOS (P233,526.13) representing the rental of equipment;
2. Defendant to pay Plaintiff the sum of THIRTY THOUSAND (P30,000.00) PESOS by way
of reasonable Attorneys Fees for having forced/compelled the plaintiff to litigate and engage
the services of a lawyer in order to protect his interest and to enforce his right. The claim of
the plaintiff for attorneys fees in the amount of FIFTY THOUSAND PESOS (P50,000.00)
plus THREE THOUSAND PESOS (P3,000.00) clearly appears to be unconscionable and
therefore reduced to Thirty Thousand Pesos (P30,000.00) as aforestated making the same
to be reasonable;

3. Defendant to pay Plaintiff the sum of FIFTEEN THOUSAND PESOS (P15,000.00) by way
of litigation expenses;
4. Defendant to pay Plaintiff the sum of TWENTY THOUSAND PESOS (P20,000.00) for
moral damages and for the breach of contract; and
5. To pay the cost of this suit.
Award of exemplary damages in the instant case is not warranted for there is no showing that the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner analogous to
the case of Xentrex Automotive, Inc. vs. Court of Appeals, 291 SCRA 66.
8

Gonzalo appealed to the Court of Appeals (CA).

Decision of the CA
On February 18, 2003, the CA affirmed the RTC.

Although holding that the subcontract was an illegal agreement due to its object being specifically
prohibited by Section 6 of Presidential Decree No. 1594; that Gonzalo and Tarnate were guilty of
entering into the illegal contract in violation of Section 6 of Presidential Decree No. 1594; and that
the deed of assignment, being a product of and dependent on the subcontract, was also illegal and
unenforceable, the CA did not apply the doctrine of in pari delicto, explaining that the doctrine
applied only if the fault of one party was more or less equivalent to the fault of the other party. It
found Gonzalo to be more guilty than Tarnate, whose guilt had been limited to the execution of the
two illegal contracts while Gonzalo had gone to the extent of violating the deed of assignment. It
declared that the crediting of the 10% retention fee equivalent to P233,256.13 to his account had
unjustly enriched Gonzalo; and ruled, accordingly, that Gonzalo should reimburse Tarnate in that
amount because the latters equipment had been utilized in the project.
Upon denial of his motion for reconsideration, Gonzalo has now come to the Court to seek the
review and reversal of the decision of the CA.
10

Issues
Gonzalo contends that the CA erred in affirming the RTC because: (1) both parties were in pari
delicto; (2) the deed of assignment was void; and (3) there was no compliance with the arbitration
clause in the subcontract.
Gonzalo submits in support of his contentions that the subcontract and the deed of assignment,
being specifically prohibited by law, had no force and effect; that upon finding both him and Tarnate
guilty of violating the law for executing the subcontract, the RTC and the CA should have applied the
rule of in pari delicto, to the effect that the law should not aid either party to enforce the illegal
contract but should leave them where it found them; and that it was erroneous to accord to the
parties relief from their predicament.
11

Ruling

We deny the petition for review, but we delete the grant of moral damages, attorneys fees and
litigation expenses.
There is no question that every contractor is prohibited from subcontracting with or assigning to
another person any contract or project that he has with the DPWH unless the DPWH Secretary has
approved the subcontracting or assignment. This is pursuant to Section 6 of Presidential Decree No.
1594, which provides:
Section 6. Assignment and Subcontract. The contractor shall not assign, transfer, pledge,
subcontract or make any other disposition of the contract or any part or interest therein except with
the approval of the Minister of Public Works, Transportation and Communications, the Minister of
Public Highways, or the Minister of Energy, as the case may be. Approval of the subcontract shall
not relieve the main contractor from any liability or obligation under his contract with the Government
nor shall it create any contractual relation between the subcontractor and the Government.
Gonzalo, who was the sole contractor of the project in question, subcontracted the implementation of
the project to Tarnate in violation of the statutory prohibition. Their subcontract was illegal, therefore,
because it did not bear the approval of the DPWH Secretary. Necessarily, the deed of assignment
was also illegal, because it sprung from the subcontract. As aptly observed by the CA:
x x x. The intention of the parties in executing the Deed of Assignment was merely to cover up the
illegality of the sub-contract agreement. They knew for a fact that the DPWH will not allow plaintiffappellee to claim in his own name under the Sub-Contract Agreement.
Obviously, without the Sub-Contract Agreement there will be no Deed of Assignment to speak of.
The illegality of the Sub-Contract Agreement necessarily affects the Deed of Assignment because
the rule is that an illegal agreement cannot give birth to a valid contract. To rule otherwise is to
sanction the act of entering into transaction the object of which is expressly prohibited by law and
thereafter execute an apparently valid contract to subterfuge the illegality. The legal proscription in
such an instance will be easily rendered nugatory and meaningless to the prejudice of the general
public.
12

Under Article 1409 (1) of the Civil Code, a contract whose cause, object or purpose is contrary to law
is a void or inexistent contract. As such, a void contract cannot produce a valid one. To the same
effect is Article 1422 of the Civil Code, which declares that "a contract, which is the direct result of a
previous illegal contract, is also void and inexistent."
13

We do not concur with the CAs finding that the guilt of Tarnate for violation of Section 6 of
Presidential Decree No. 1594 was lesser than that of Gonzalo, for, as the CA itself observed, Tarnate
had voluntarily entered into the agreements with Gonzalo. Tarnate also admitted that he did not
participate in the bidding for the project because he knew that he was not authorized to contract with
the DPWH. Given that Tarnate was a businessman who had represented himself in the subcontract
as "being financially and organizationally sound and established, with the necessary personnel and
equipment for the performance of the project," he justifiably presumed to be aware of the illegality of
his agreements with Gonzalo. For these reasons, Tarnate was not less guilty than Gonzalo.
14

15

16

According to Article 1412 (1) of the Civil Code, the guilty parties to an illegal contract cannot recover
from one another and are not entitled to an affirmative relief because they are in pari delicto or in
equal fault. The doctrine of in pari delicto is a universal doctrine that holds that no action arises, in

equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to
recover the property agreed to be sold or delivered, or the money agreed to be paid, or damages for
its violation; and where the parties are in pari delicto, no affirmative relief of any kind will be given to
one against the other.
17

Nonetheless, the application of the doctrine of in pari delicto is not always rigid. An accepted
exception arises when its application contravenes well-established public policy. In this jurisdiction,
public policy has been defined as "that principle of the law which holds that no subject or citizen can
lawfully do that which has a tendency to be injurious to the public or against the public good."
1wphi1

18

19

Unjust enrichment exists, according to Hulst v. PR Builders, Inc., "when a person unjustly retains a
benefit at the loss of another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience." The prevention of unjust enrichment
is a recognized public policy of the State, for Article 22 of the Civil Code explicitly provides that
"[e]very person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall
return the same to him." It is well to note that Article 22 "is part of the chapter of the Civil Code on
Human Relations, the provisions of which were formulated as basic principles to be observed for the
rightful relationship between human beings and for the stability of the social order; designed to
indicate certain norms that spring from the fountain of good conscience; guides for human conduct
that should run as golden threads through society to the end that law may approach its supreme
ideal which is the sway and dominance of justice."
20

21

There is no question that Tarnate provided the equipment, labor and materials for the project in
compliance with his obligations under the subcontract and the deed of assignment; and that it was
Gonzalo as the contractor who received the payment for his contract with the DPWH as well as the
10% retention fee that should have been paid to Tarnate pursuant to the deed of
assignment. Considering that Gonzalo refused despite demands to deliver to Tarnate the stipulated
10% retention fee that would have compensated the latter for the use of his equipment in the project,
Gonzalo would be unjustly enriched at the expense of Tarnate if the latter was to be barred from
recovering because of the rigid application of the doctrine of in pari delicto. The prevention of unjust
enrichment called for the exception to apply in Tarnates favor. Consequently, the RTC and the CA
properly adjudged Gonzalo liable to pay Tarnate the equivalent amount of the 10% retention fee
(i.e., P233,526.13).
22

Gonzalo sought to justify his refusal to turn over the P233,526.13 to Tarnate by insisting that he
(Gonzalo) had a debt of P200,000.00 to Congressman Victor Dominguez; that his payment of the
10% retention fee to Tarnate was conditioned on Tarnate paying that debt to Congressman
Dominguez; and that he refused to give the 10% retention fee to Tarnate because Tarnate did not
pay to Congressman Dominguez. His justification was unpersuasive, however, because, firstly,
Gonzalo presented no proof of the debt to Congressman Dominguez; secondly, he did not
competently establish the agreement on the condition that supposedly bound Tarnate to pay to
Congressman Dominguez; and, thirdly, burdening Tarnate with Gonzalos personal debt to
Congressman Dominguez to be paid first by Tarnate would constitute another case of unjust
enrichment.
23

24

The Court regards the grant of moral damages, attorneys fees and litigation expenses to Tarnate to
be inappropriate. We have ruled that no damages may be recovered under a void contract, which,
being nonexistent, produces no juridical tie between the parties involved. It is notable, too, that the
25

RTC and the CA did not spell out the sufficient factual and legal justifications for such damages to be
granted.
Lastly, the letter and spirit of Article 22 of the Civil Code command Gonzalo to make a full reparation
or compensation to Tarnate. The illegality of their contract should not be allowed to deprive Tarnate
from being fully compensated through the imposition of legal interest. Towards that end, interest of
6% per annum reckoned from September 13, 1999, the time of the judicial demand by Tarnate, is
imposed on the amount of P233,526.13. Not to afford this relief will make a travesty of the justice to
which Tarnate was entitled for having suffered too long from Gonzalos unjust enrichment.
WHEREFORE, we AFFIRM the decision promulgated on February 18, 2003, but DELETE the
awards of moral damages, attorneys fees and litigation expenses; IMPOSE legal interest of 6% per
annum on the principal oLP233,526.13 reckoned from September 13, 1999; and DIRECT the
petitioner to pay the costs of suit.
SO ORDERED.
G.R. No. 180832

July 23, 2008

JEROME CASTRO, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.
RESOLUTION
CORONA, J.:
This petition for review on certiorari1 emanated from the complaint for grave oral defamation2 filed by
Albert P. Tan against petitioner Jerome Castro.
The facts follow.
On November 11, 2002, Reedley International School (RIS) dismissed Tans son, Justin Albert (then
a Grade 12 student), for violating the terms of his disciplinary probation. 3 Upon Tans request, RIS
reconsidered its decision but imposed "non-appealable" conditions such as excluding Justin Albert
from participating in the graduation ceremonies.
Aggrieved, Tan filed a complaint in the Department of Education (Dep-Ed) for violation of the Manual
of Regulation of Private Schools, Education Act of 1982 and Article 19 of the Civil Code 4 against RIS.
He alleged that the dismissal of his son was undertaken with malice, bad faith and evident
premeditation. After investigation, the Dep-Ed found that RIS code violation point system allowed
the summary imposition of unreasonable sanctions (which had no basis in fact and in law). The
system therefore violated due process. Hence, the Dep-Ed nullified it. 5
Meanwhile, on November 20, 2002, the Dep-Ed ordered RIS to readmit Justin Albert without any
condition.6Thus, he was able to graduate from RIS and participate in the commencement
ceremonies held on March 30, 2003.

After the graduation ceremonies, Tan met Bernice C. Ching, a fellow parent at RIS. In the course of
their conversation, Tan intimated that he was contemplating a suit against the officers of RIS in their
personal capacities, including petitioner who was the assistant headmaster.
Ching telephoned petitioner sometime the first week of April and told him that Tan was planning to
sue the officers of RIS in their personal capacities. Before they hung up, petitioner told Ching:
Okay, you too, take care and be careful talking to [Tan], thats dangerous.
Ching then called Tan and informed him that petitioner said "talking to him was dangerous."
Insulted, Tan filed a complaint for grave oral defamation in the Office of the City Prosecutor of
Mandaluyong City against petitioner on August 21, 2003.
On November 3, 2003, petitioner was charged with grave oral defamation in the Metropolitan Trial
Court (MeTC) of Mandaluyong City, Branch 607 under the following Information:
That on or about the 13th day of March, 2003 in the City of Mandaluyong, Philippines, a place within
the jurisdiction of this Honorable Court, the above-named [petitioner], with deliberate intent of
bringing ATTY. ALBERT P. TAN, into discredit, dishonor, disrepute and contempt, did then and there,
willfully, unlawfully and feloniously speak and utter the following words to Ms. Bernice C. Ching:
"OK, YOU TOO, YOU TAKE CARE AND BE CAREFUL TALKING TO [TAN], THATS DANGEROUS."
and other words of similar import of a serious and insulting nature.
CONTRARY TO LAW.
Petitioner pleaded not guilty during arraignment.
The prosecution essentially tried to establish that petitioner depicted Tan as a "dangerous person."
Ching testified that petitioner warned her that talking to Tan was dangerous. Tan, on the other hand,
testified that petitioners statement shocked him as it portrayed him as "someone capable of
committing undesirable acts." He added that petitioner probably took offense because of the
complaint he filed against RIS in the Dep-Ed.
For his defense, petitioner denied harboring ill-feelings against Tan despite the latters complaint
against RIS in the Dep-Ed. Although he admitted conversing with Ching (whom he considered as a
close acquaintance) on the telephone a few days after RIS 2003 commencement exercises,
petitioner asserted that he never said or insinuated that Tan or talking to Tan was dangerous. On
cross-examination, however, he did not categorically deny the veracity of Chings statement.
The MeTC found that Chings statements in her affidavit and in open court were consistent and that
she did not have any motive to fabricate a false statement. Petitioner, on the other hand, harbored
personal resentment, aversion and ill-will against Tan since the Dep-Ed compelled RIS to readmit his
son. Thus, the MeTC was convinced that petitioner told Ching talking to Tan was dangerous and that
he uttered the statement with the intention to insult Tan and tarnish his social and professional
reputation.

In a decision dated December 27, 2005, the MeTC found petitioner guilty beyond reasonable doubt
of grave oral defamation:8
WHEREFORE, judgment is hereby rendered finding accused, Jerome Castro GUILTY beyond
reasonable doubt of the crime of Grave Oral Defamation, sentencing him therefore, in accordance to
Article 358(1) of the Revised Penal Code and applying the Indeterminate Sentence Law to suffer the
penalty of imprisonment of 1 month and 1 day of arresto mayor as minimum to 4 months and 1 day
of arresto mayor as maximum.
On appeal, the Regional Trial Court (RTC) affirmed the factual findings of the MeTC. However, in
view of the animosity between the parties, it found petitioner guilty only of slight oral defamation. But
because Tan filed his complaint in the Office of the City Prosecutor of Mandaluyong City only on
August 21, 2003 (or almost five months from discovery), the RTC ruled that prescription had already
set in; it therefore acquitted petitioner on that ground. 9
On April 19, 2007, the Office of the Solicitor General (OSG) filed a petition for certiorari in the Court
of Appeals (CA) assailing the decision of the RTC.10 It contended that the RTC acted with grave
abuse of discretion when it downgraded petitioners offense to slight oral defamation. The RTC
allegedly misappreciated the antecedents which provoked petitioner to utter the allegedly
defamatory statement against Tan.
The CA found that the RTC committed grave abuse of discretion when it misapprehended the totality
of the circumstances and found petitioner guilty only of slight oral defamation. Thus, the CA
reinstated the MeTC decision.11
Petitioner moved for reconsideration but it was denied.12 Hence, this recourse.
Petitioner basically contends that the CA erred in taking cognizance of the petition for certiorari
inasmuch as the OSG raised errors of judgment (i.e., that the RTC misappreciated the evidence
presented by the parties) but failed to prove that the RTC committed grave abuse of discretion.
Thus, double jeopardy attached when the RTC acquitted him.
We grant the petition.
No person shall be twice put in jeopardy of punishment for the same offense. 13 This constitutional
mandate is echoed in Section 7 of Rule 117 of the Rules of Court which provides:
Section 7. Former conviction or acquittal; double jeopardy. When an accused has been convicted
or acquitted or the case against him dismissed or otherwise terminated without his express consent
by a court of competent jurisdiction, upon a valid complaint or in information or other formal charge
sufficient in form and substance to sustain a conviction and after the accused had pleaded to the
charge, the conviction or acquittal of the accused or the dismissal of the case shall be a bar to
another prosecution for the offense charged or for any attempt to commit the same or frustration
thereof, or for any offense which necessarily includes or is necessarily included in the offense
charged in the former complaint or information.
xxx

xxx

xxx

Under this provision, double jeopardy occurs upon (1) a valid indictment (2) before a competent
court (3) after arraignment (4) when a valid plea has been entered and (5) when the accused was
acquitted or convicted or the case was dismissed or otherwise terminated without the express
consent of the accused.14 Thus, an acquittal, whether ordered by the trial or appellate court, is final
and unappealable on the ground of double jeopardy.15
The only exception is when the trial court acted with grave abuse of discretion or, as we held
in Galman v. Sandiganbayan,16 when there was mistrial. In such instances, the OSG can assail the
said judgment in a petition for certiorari establishing that the State was deprived of a fair opportunity
to prosecute and prove its case.17
The rationale behind this exception is that a judgment rendered by the trial court with grave abuse of
discretion was issued without jurisdiction. It is, for this reason, void. Consequently, there is no double
jeopardy.
In this case, the OSG merely assailed the RTCs finding on the nature of petitioners statement, that
is, whether it constituted grave or slight oral defamation. The OSG premised its allegation of grave
abuse of discretion on the RTCs "erroneous" evaluation and assessment of the evidence presented
by the parties.
1awph!1

What the OSG therefore questioned were errors of judgment (or those involving misappreciation of
evidence or errors of law). However, a court, in a petition for certiorari, cannot review the public
respondents evaluation of the evidence and factual findings.18 Errors of judgment cannot be raised
in a Rule 65 petition as a writ of certiorari can only correct errors of jurisdiction (or those involving the
commission of grave abuse of discretion).19
Because the OSG did not raise errors of jurisdiction, the CA erred in taking cognizance of its petition
and, worse, in reviewing the factual findings of the RTC.20 We therefore reinstate the RTC decision
so as not to offend the constitutional prohibition against double jeopardy.
At most, petitioner could have been liable for damages under Article 26 of the Civil Code 21 :
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons. The following and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for damages, prevention and other relief:
xxx

xxx

xxx

(3) Intriguing to cause another to be alienated from his friends;

xxx

xxx

xxx

Petitioner is reminded that, as an educator, he is supposed to be a role model for the youth. As such,
he should always act with justice, give everyone his due and observe honesty and good faith. 22
WHEREFORE, the petition is hereby GRANTED. The August 29, 2007 decision and December 5,
2007 resolution of the Court of Appeals in CA-G.R. SP No. 98649 are REVERSED and SET ASIDE.
The November 20, 2006 decision of the Regional Trial Court of Mandaluyong City, Branch 212

is REINSTATED. Petitioner Jerome Castro is ACQUITTED of slight oral defamation as defined and
penalized in Article 358 of the Revised Penal Code.
No pronouncement as to costs.
SO ORDERED.
G.R. No. L-54598 April 15, 1988
JOSE B. LEDESMA, petitioner,
vs.
HON. COURT OF APPEALS, Spouses PACIFICO DELMO and SANCHA DELMO (as private
respondents),respondents.
The Solicitor General for petitioner.
Luzel D. Demasu-ay for respondent.

GUTIERREZ, JR., J.:

This petition seeks to reverse the decision of the respondent Court of Appeals which afirmed the
decision of the Court of First Instance of Iloilo, adjudging the petitioner, who was then the President
of the West Visayas College liable for damages under Article 27 of the Civil Code of the Philippines
for failure to graduate a student with honors.
The facts are not disputed.
An organization named Student Leadership Club was formed by some students of the West Visayas
College. They elected the late Violets Delmo as the treasurer. In that capacity, Delmo extended
loans from the funds of the club to some of the students of the school. "the petitioner claims that the
said act of extending loans was against school rules and regulations. Thus, the petitioner, as
President of the School, sent a letter to Delmo informing her that she was being dropped from the
membership of the club and that she would not be a candidate for any award or citation from the
school.
Delmo asked for a reconsideration of the decision but the petitioner denied it. Delmo, thus, appealed
to the Office of the Director of the Bureau of Public Schools.
The Director after due investigation, rendered a decison on April 13, 1966 which provided:
Records of the preliminary investigation conducted by one of the legal officers of this
Office disclosed the following: That Violeta Delmo was the treasurer of the Student
Leadership Club, an exclusive student organization; that pursuant to Article IX of the
of the Constitution and By-Laws of the club, it passed Resolution No. 2, authorizing
the treasurer to disburse funds of the Club to student for financial aid and other
humanitarian purposes; that in compliance with said resolution and as treasurer of

the Club, Violeta Delmo extended loans to some officers and members of the Club
upon proper application duly approved by the majority of the members of the
Executive Board; and that upon receiving the report from Mr. Jesse Dagoon, adviser
of the funds of the Club, that Office conducted an investigation on the matter and
having been convinced of the guilt of Violets Delmo and the other officers and
members of the Club, that Office rendered the order or decision in question. In
justifying that Office's order or decision, it is contended that approval by that Office of
the Constitution and By-Laws of the Club is necessary for its effectivity and validity
and since it was never submitted to that Office, the Club had no valid constitution and
By-Laws and that as a consequence, Resolution No. 2 which was passed based on
the Constitution and By-Laws- is without any force and effect and the treasurer,
Violeta Delmo, who extended loans to some officers and members of the Club
pursuant thereto are illegal (sic), hence, she and the other students involved are
deemed guilty of misappropriating the funds of the Club. On the other hand, Raclito
Castaneda, Nestor Golez and Violeta Delmo, President, Secretary and Treasurer of
the Club, respectively, testified that the Club had adopted its Constitution and ByLaws in a meeting held last October 3, 1965, and that pursuant to Article I of said
Constitution and By-Laws, the majority of the members of the Executive Board
passed Resolution No. 2, which resolution became the basis for the extension on of
loans to some officers and members of the Club, that the Club honestly believed that
its Constitution and By-Laws has been approved by the superintendent because the
adviser of the Club, Mr. Jesse Dagoon, assured the President of the Club that he will
cause the approval of the Constitution and By-Laws by the Superintendent; the
officers of the Club have been inducted to office on October 9,1965 by the
Superintendent and that the Club had been likewise allowed to cosponsor the
Education Week Celebration.
After a careful study of the records, this Office sustains the action taken by the
Superintendent in penalizing the adviser of the Club as well as the officers and
members thereof by dropping them from membership therein. However, this Office is
convinced that Violets M. Delmo had acted in good faith, in her capacity as Club
Treasurer, in extending loans to the officers and members of the Student partnership
Club. Resolution No. 2 authorizing the Club treasurer to discharge finds to students
in need of financial assistance and other humanitarian purposes had been approved
by the Club adviser, Mr. Jesse Dagoon, with the notation that approval was given in
his capacity as adviser of the Club and extension of the Superintendent's personality.
Aside from misleading the officers and members of the Club, Mr. Dagoon, had
unsatisfactorily explained why he failed to give the Constitution and By-Laws of the
Club to the Superintendent for approval despite his assurance to the Club president
that he would do so. With this finding of negligence on the part of the Club adviser,
not to mention laxity in the performance of his duties as such, this Office considers
as too severe and unwarranted that portion of the questioned order stating that
Violeta Delmo "shall not be a candidate for any award or citation from this school or
any organization in this school." Violeta Delmo, it is noted, has been a consistent full
scholar of the school and she alone has maintained her scholarship. The decision in
question would, therefore, set at naught all her sacrifice and frustrate her dreams of
graduating with honors in this year's commencement exercises.

In view of all the foregoing, this Office believes and so holds and hereby directs that
appellant Violeta. M. Delmo, and for that matter all other Club members or officers
involved in this case, be not deprived of any award, citation or honor from the school,
if they are otherwise entitled thereto. (Rollo, pp. 28-30)
On April 27, 1966, the petitioner received by mail the decision of the Director and all the records of
the case. On the same day, petitioner received a telegram stating the following:
"AIRMAIL RECORDS DELMO CASE MISSENT THAT OFFICE"
The Director asked for the return only of the records but the petitioner allegedly mistook the telegram
as ordering him to also send the decision back. On the same day, he returned by mail all the records
plus the decision of the Director to the Bureau of Public Schools.
The next day, the petitioner received another telegram from the Director order him to furnish Delmo
with a copy of the decision. The petitioner, in turn, sent a night letter to the Director informing the
latter that he had sent the decision back and that he had not retained a copy thereof..
On May 3, 1966, the day of the graduation, the petitioner received another telegram from the
Director ordering him not to deprive Delmo of any honors due her. As it was impossible by this time
to include Delmo's name in the program as one of the honor students, the petitioner let her graduate
as a plain student instead of being awarded the Latin honor of Magna Cum Laude.
To delay the matter further, the petitioner on May 5, 1966, wrote the Director for a reconsideration of
the latters" decision because he believed that Delmo should not be allowed to graduate with honors.
The Director denied the petitioner's request.
On July 12, 1966, the petitioner finally instructed the Registrar of the school to enter into the
scholastic records of Delmo the honor, "Magna Cum Laude."
On July 30, 1966, Delmo, then a minor, was joined by her parents in flag action for damages against
the petitioner. During the pendency of the action, however, Delmo passed away, and thus, an
Amended and Supplemental Complaint was filed by her parents as her sole and only heirs.
The trial court after hearing rendered judgment against the petitioner and in favor of the spouses
Delmo. The court said:
Let us go to specific badges of the defendants (now petitioners) bad faith. Per
investigation of Violeta Delmo's appeal to Director Vitaliano Bernardino of the Bureau
of Public Schools (Exhibit L it was the defendant who inducted the officers of the
Student Leadership Club on October 9, 1965. In fact the Club was allowed to
cosponsor the Education Week Celebration. (Exh. "L"). If the defendant he not
approve of the constitution and by-laws of the Club, why did he induct the officers
into office and allow the Club to sponsor the Education Week Celebration"? It was
through his own act that the students were misled to do as they did. Coupled with the
defendants tacit recognition of the Club was the assurance of Mr. Jemm Dagoon,
Club Adviser, who made the students believe that he was acting as an extension of
Mr. Ledesma's personality. (Exhibit "L").

Another badge of the defendan'ts want of good faith is the fact that, although, he
kaew as early as April 27,1966 that per on of r Bernardino, Exhibit "L," he was
directed to give honors to Miss Delmo, he kept Id information to . He told the Court
that he knew that the letter of Director Bernardino directed him not to deprive Miss
Delmo the honors due her, but she (sic) says that he has not finished reading the
letter-decision, Exhibit "L," of Director Bernardino 0, him to give honors to Miss
Delmo. (Tsn, Feb. 5, 1974, testimony of Mr. Ledesma, pp. .33-35). It could not be
true that he has not finished reading the letter-decision, Exh. "L," because said letter
consisted of only three pages, and the portion which directed that Miss Delmo "be
not deprived of any award, citation or honor from the school, if otherwise entitled
thereto is found at the last paragraph of the same. How did he know the last
paragraph if he did not read the letter.
Defendants actuations regarding Miss Delmo's cam had been one of bias and
prejudice. When his action would favor him, he was deliberate and aspect to the utter
prejudice and detriment of Miss Delmo. Thus, although, as early as April 27, 1966, he
knew of the exoneration of Miss Delino by Director Bernardino, he withheld the
information from Miss Delmo. This is eloquently dramatized by Exh. "11" and Exh.
"13" On April 29,1966, Director Bernardino cabled him to furnish Violeta Delmo copy
of the Decision, Exh. "L," but instead of informing Miss Delmo about the decision,
since he said he mailed back the decision on April 28,1966, he sent a night letter on
April 29,1966, to Director Bernardino, informing the latter that he had returned the
decision (Exh. "l3"), together with the record. Why a night letter when the matter was
of utmost urgency to the parties in the case, because graduation day was only four
days ahead? An examination of the telegrams sent by the defendant shows that he
had been sending ordinary telegram and not night letters. (Exh. "5", Exhibit "7"). At
least, if the defendant could not furnish a copy of the decision, (Exh. "L"), to Miss
Delmo, he should have told her about it or that Miss Delmo's honors and citation in
the commencement be announced or indicated. But Mr. Ledesma is one who cannot
admit a mistake. Very ungentlemanly this is home out by his own testimony despite
his knowledge that his decision to deprive Miss Delmo of honors due to her was
overturned by Director Bernardino, he on his wrong belief. To quote the defendant,1
believed that she did not deserve those honors(Tsn Feb. 5, 1974, p. 43,Empasized
supplied). Despite the telegram of Director Bernardino which the defendant received
hours before the commencement executory on May 3-4,1966, he did not obey
Director Bernardino because he said in his testimony that he would be
embarrassment . Tan Feb 5,1974, P. 46). Evidently, he knew only his embarrassment
and not that of r Bernardino whose order was being flagrantly and wantonly
disregarded by bim And certainly, not the least of Miss Delmo's embarrassment. His
acts speak eloquently of ho bad faith and unjust of mindwarped by his delicate
sensitivity for having been challenged by Miss Delmo, a mere student.
xxx xxx xxx
Finally the defendant's behaviour relative to Miss s case smacks of contemptuous
arrogance, oppression and abuse of power. Come to think of it. He refused to obey
the directive of Be o and instead, chose to feign ignorance of it." (Reward on Appeal,
p. 72-76).

The trial court awarded P20,000.00 to the estate of Violeta Delmo and P10,000.00 to her parents for
moral damages; P5,000.00 for nominal damages to Violeta's estate; exemplary damages of
P10,000.00 and P2,000.00 attorney's fees.
On appeal, the Court of Appeals affirmed the decision. Hence, this petition.
The issues raised in this petition can be reduced to the sole question of whether or not the
respondent Court of Appeals erred in affirming the trial court's finding that petitioner is liable for
damages under Article 27 of the New Civil Code.
We find no reason why the findings of the trial and appellate courts should be reversed. It cannot be
disputed that Violeta Delmo went through a painful ordeal which was brought about by the
petitioner's neglect of duty and callousness. Thus, moral damages are but proper. As we have
affirmed in the case of (Prudenciado v. Alliance Transport System, Inc., 148 SCRA 440, 448):
There is no argument that moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of defendant's wrongly
act or omission." (People v. Baylon, 129 SCRA 62 (1984).
The Solicitor-General tries to cover-up the petitioner's deliberate omission to inform Miss Delmo by
stating that it was not the duty of the petitioner to furnish her a copy of the Director's decision.
Granting this to be true, it was nevertheless the petitioner's duty to enforce the said decision. He
could have done so considering that he received the decision on April 27, 1966 and even though he
sent it back with the records of the case, he undoubtedly read the whole of it which consisted of only
three pages. Moreover, the petitioner should have had the decency to meet with Mr. Delmo, the girl's
father, and inform the latter, at the very least of the decision. This, the petitioner likewise failed to do,
and not without the attendant bad faith which the appellate court correctly pointed out in its decision,
to wit:
Third, assuming that defendant could not furnish Miss Delmo of a copy of the
decision, he could have used his discretion and plain common sense by informing
her about it or he could have directed the inclusion of Miss Delmo's honor in the
printed commencement program or announced it during the commencement
exercises.
Fourth, defendant despite receipt of the telegram of Director Benardino hours before
the commencement exercises on May 3-4, 1966, disobeyed his superior by refusing
to give the honors due Miss Delmo with a lame excuse that he would be
embarrassed if he did so, to the prejudice of and in complete disregard of Miss
Delmo's rights.
Fifth, defendant did not even extend the courtesy of meeting Mr. Pacifico Delmo,
father of Miss Delmo, who tried several times to see defendant in his office thus Mr.
Delmo suffered extreme disappointment and humiliation.
xxx xxx xxx

Defendant, being a public officer should have acted with circumspection and due
regard to the rights of Miss Delmo. Inasmuch as he exceeded the scope of his
authority by defiantly disobeying the lawful directive of his superior, Director
Bernardino, defendant is liable for damages in his personal capacity. . . . (Rollo, pp57-58)
Based on the undisputed facts, exemplary damages are also in order. In the same case
of Prudenciado v. Alliance Transport System, Inc., supra., at p. 450, we ruled:
The rationale behind exemplary or corrective damages is, as the name implies, to
provide an example or correction for the public good (Lopez, et al. v. Pan American
World Airways, 16 SCRA 431).
However, we do not deem it appropriate to award the spouses Delmo damages in
the amount of P10,000.00 in their individual capacity, separately from and in addition
to what they are already entitled to as sole heirs of the deceased Violeta Delmo.
Thus, the decision is modified insofar as moral damages are awarded to the spouses
in their own behalf.
WHEREFORE, the petition is DISMISSED for lack of merit. The decision of the Court of Appeals is
AFFIRMED with the slight modification as stated in the preceding paragraph. This decision is
immediately executory.
SO ORDERED.
A.C. No. 8261

March 11, 2015

JESSIE T. CAMPUGAN and ROBERT C. TORRES, Complainants,

vs.
ATTY. FEDERICO S. TOLENTINO, JR., ATTY. RENATO G. CUNANAN, ATTY. DANIEL F.
VICTORIO, JR., and ATTY. ELBERT T. QUILALA, Respondents.
x-----------------------x
A.C. No. 8725
JESSIE T. CAMPUGAN and ROBERT C. TORRES, Complainants,
vs.
ATTY. CONSTANTE P. CALUYA, JR. and ATTY. ELBERT T. QUILALA, Respondents.
DECISION
BERSAMIN, J.:
In this consolidated administrative case, complainants Jessie T. Campugan and Robert C. Torres
seek the disbarment of respondents Atty. Federico S. Tolentino, Jr., Atty. Daniel F. Victorio, Jr., Atty.
Renato G. Cunanan, Atty. Elbert T. Quilala and Atty. Constante P. Caluya, Jr. for allegedly falsifying a

court order that became the basis for the cancellation of their annotation of the notice ofadverse
claim and the notice of lis pendens in the Registry of Deeds in Quezon City.
Antecedents
Atty. Victorio, Jr. had replaced Atty. Edgardo Abad as counsel of the complainants in a civil action
they brought to seek the annulment of Transfer Certificate of Title (TCT) No. N-290546 of the
Registry of Deeds of Quezon City in the first week of January 2007 in the Regional Trial Court (RTC)
in Quezon City (Civil Case No. Q-07-59598). They impleaded as defendants Ramon and Josefina
Ricafort, Juliet Vargas and the Register of Deeds of Quezon City. They caused to be annotated on
TCT No. N-290546 their affidavit of adverse claim, as well as the notice of lis pendens. Atty.
Tolentino, Jr. was the counsel of defendant Ramon and Josefina Ricafort.
1

In their sworn complaint for disbarment dated April 23, 2009 (later docketed as A.C. No. 8261), the
complainants narrated that as the surviving children of the late Spouses Antonio and Nemesia
Torres, they inherited upon the deaths of their parents a residential lot located at No. 251 Boni
Serrano Street, Murphy, Cubao, Quezon City registered under Transfer Certificate of Title (TCT) No.
RT-64333(35652) of the Register of Deeds of Quezon City; that on August 24, 2006, they
discovered that TCT No. RT-64333(35652) had been unlawfully cancelled and replaced by TCT No.
N-290546 of the Register of Deeds of Quezon City under the names of Ramon and Josefina
Ricafort; and that, accordingly, they immediately caused the annotation of their affidavit of adverse
claim on TCT No. N-290546.
2

It appears that the parties entered into an amicable settlement during the pendency of Civil Case No.
Q-07-59598 in order to end their dispute, whereby the complainants agreed to sell the property and
the proceeds thereof would be equally divided between the parties, and the complaint and
counterclaim would be withdrawn respectively by the complainants (as the plaintiffs) and the
defendants. Pursuant to the terms of the amicable settlement, Atty. Victorio, Jr. filed a Motion to
Withdraw Complaint dated February 26, 2008, which the RTC granted in its order dated May 16,
2008 upon noting the defendants lack of objection thereto and the defendants willingness to
similarly withdraw their counterclaim.
5

The complainants alleged that from the time of the issuance by the RTC of the order dated May 16,
2008, they could no longer locate or contact Atty. Victorio, Jr. despite making several phone calls and
visits to his office; that they found out upon verification at the Register of Deeds of Quezon City that
new annotations were made on TCT No. N-290546, specifically: (1) the annotation of the letterrequest appearing to be filed by Atty. Tolentino, Jr. seeking the cancellation of the affidavit of adverse
claim and the notice of lis pendens annotated on TCT No. N-290546; and (2) the annotation of the
decision dated May 16, 2008 rendered in Civil Case No. Q-07-59598 by the RTC, Branch 95, in
Quezon City, granting the complainants Motion to Withdraw Complaint; and that a copy of the letter
request dated June 30, 2008 addressed to Atty. Quilala, Registrar of Deeds of Quezon City,
disclosed that it was defendant Ramon Ricafort who had signed the letter.
8

Feeling aggrieved by their discovery, the complainants filed an appeal en consulta with the Land
Registration Authority (LRA), docketed as Consulta No. 4707, assailing the unlawful cancellation of
their notice of adverse claim and their notice of lis pendens under primary entries PE-2742 and PE3828-9, respectively. The LRA set Consulta No. 4707 for hearing on March 30, 2009, and directed
the parties to submit their respective memoranda and/or supporting documents on or beforesuch

scheduled hearing. However, the records do not disclose whether Consulta No. 4707 was already
resolved, or remained pending at the LRA.
10

Unable to receive any response or assistance from Atty. Victorio, Jr. despite their having paid him for
his professional services, the complainants felt that said counsel had abandoned their case. They
submitted that the cancellation of their notice of adverse claim and their notice of lis pendens without
a court order specifically allowing such cancellation resulted from the connivance and conspiracy
between Atty. Victorio, Jr. and Atty. Tolentino, Jr., and from the taking advantage of their positions as
officials in the Registry of Deeds by respondents Atty. Quilala, the Chief Registrar, and Atty.
Cunanan, the acting Registrar and signatory of the new annotations. Thus, they claimed to be
thereby prejudiced.
On July 6, 2009, the Court required the respondents to comment on the verified complaint. Atty.
Victorio, Jr. asserted in his Comment dated August 17, 2009 that complainant Robert Torres had
been actively involved in the proceedings in Civil Case No. Q-07-59598, which included the
mediation process; that the complainants, after having aggressively participated in the drafting of the
amicable settlement, could not now claim that they had been deceived into entering the agreement
in the same way that they could not feign ignorance of the conditions contained therein; that he did
not commit any abandonment as alleged, but had performed in good faith his duties as the counsel
for the complainants in Civil Case No. Q-07-59598; that he should not be held responsible for their
representation in other proceedings, such as that before the LRA, which required a separate
engagement; and that the only payment he had received from the complainants were those for his
appearance fees of P1,000.00 for every hearing in the RTC.
11

12

In his Comment dated August 24, 2009, Atty. Tolentino, Jr. refuted the charge of conspiracy,
stressing that he was not acquainted with the other respondents, except Atty. Victorio, Jr. whom he
had met during the hearings in Civil Case No. Q-07-59598; that although he had notarized the letter
request dated June 30, 2008 of Ramon Ricafort to the Register of Deeds, he had no knowledge
about how said letter-request had been disposed of by the Register of Deeds; and that the present
complaint was the second disbarment case filed by the complainants against him with no other
motive except to harass and intimidate him.
13

Atty. Quilala stated in his Comment dated September 1, 2009 that it was Atty. Caluya, Jr., another
Deputy Register of Deeds, who was the actual signing authority of the annotations that resulted in
the cancellation of the affidavit of adverse claim and the notice of lis pendens on TCT No. N-290546;
that the cancellation of the annotations was undertaken in the regular course of official duty and in
the exercise of the ministerial duty of the Register of Deeds; that no irregularity occurred or was
performed in the cancellation of the annotations; and that the Register of Deeds was impleaded in
Civil Case No. Q-07-59598 only as a nominal party, thereby discounting any involvement in the
proceedings in the case.
14

Atty. Cunanan did not file any comment.

15

As the result of Atty. Quilalas allegation in his Comment in A.C. No. 8261 that it had been Atty.
Caluya, Jr.s signature that appeared below the cancelled entries, the complainants filed another
sworn disbarment complaint dated August 26, 2010 alleging that Atty. Caluya, Jr. had forged the
signature of Atty. Cunanan. This disbarment complaint was docketed as A.C. No. 8725, and was
later on consolidated with A.C. No. 8261 because the complaints involved the same parties and
rested on similar allegations against the respondents.
16

17

Atty. Quilala filed his Comment in A.C. No. 8725 to belie the allegation of forgery and to reiterate the
arguments he had made in A.C. No. 8261. On his part, Atty. Caluya, Jr. manifested that he adopted
Atty. Quilalas Comment.
18

19

Ruling
We dismiss the complaints for disbarment for being bereft of merit.
Well entrenched in this jurisdiction is the rule that a lawyer may be disciplined for misconduct
committed either in his professional or private capacity. The test is whether his conduct shows him to
be wanting in moral character, honesty, probity, and good demeanor, or whether his conduct renders
him unworthy to continue as an officer of the Court. Verily, Canon 7 of the Code of Professional
Responsibility mandates all lawyers to uphold at all times the dignity and integrity of the Legal
Profession. Lawyers are similarly required under Rule 1.01, Canon 1 of the same Code not to
engage in any unlawful, dishonest and immoral or deceitful conduct. Failure to observe these tenets
of the Code of Professional Responsibility exposes the lawyer to disciplinary sanctions as provided
in Section 27, Rule 138 of the Rules of Court, as amended, viz.:
20

Section 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. A

member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court
for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by
reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he
is required to take before the admission to practice, or for a wilful disobedience appearing as an
attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the
purpose of gain, either personally or through paid agents or brokers, constitutes malpractice.
The complainants allegations of the respondents acts and omissions are insufficient to establish
any censurable conduct against them.
Section 10 of Presidential Decree No. 1529 (Property Registration Decree) enumerates the general
duties of the Register of Deeds, as follows:
Section 10. General functions of Registers of Deeds. x x x
It shall be the duty of the Register of Deeds to immediately register an instrument presented for
registration dealing with real or personal property which complies with all the requisites for
registration. He shall see to it that said instrument bears the proper documentary science stamps
and that the same are properly canceled. If the instrument is not registrable, he shall forthwith deny
registration thereof and inform the present or of such denial in writing, stating the ground or reason
therefor, and advising him of his right to appeal by consulta in accordance with Section 117 of this
Decree. (Emphasis supplied)
The aforementioned duty of the Register of Deeds is ministerial in nature. A purely ministerial act or
duty is one that an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment
upon the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and
gives him the right to decide how or when the duty shall be performed, such duty is discretionary, not
ministerial. The duty is ministerial only when its discharge requires neither the exercise of official
discretion nor the exercise of judgment.
21

22

In Gabriel v. Register of Deeds of Rizal, the Court underscores that registration is a merely
ministerial act of the Register of Deeds, explaining:
23

x x x [W]hether the document is invalid, frivolous or intended to harass, is not the duty of a Register
of Deeds to decide, but a court of competent jurisdiction, and that it is his concern to see whether the
documents sought to be registered conform with the formal and legal requirements for such
documents.
In view of the foregoing, we find no abuse of authority or irregularity committed by Atty. Quilala, Atty.
Cunanan, and Atty. Caluya, Jr. with respect to the cancellation of the notice of adverse claim and the
notice of lis pendens annotated on TCT No. N-290546. Whether or not the RTC order dated May 16,
2008 or the letter-request dated June 30,2008 had been falsified, fraudulent or invalid was not for
them to determine inasmuch as their duty to examine documents presented for registration was
limited only to what appears on the face of the documents. If, upon their evaluation of the letterrequest and the RTC order, they found the same to be sufficient in law and to be in conformity with
existing requirements, it became obligatory for them to perform their ministerial duty without
unnecessary delay.
24

Should they be aggrieved by said respondents performance of duty, the complainants were not
bereft of any remedy because they could challenge the performance of duty by bringing the matter
by way of consulta with the LRA, as provided by Section 117 of Presidential Decree No. 1529. But,
as enunciated in Gabriel v. Register of Deeds of Rizal, it was ultimately within the province of a
court of competent jurisdiction to resolve issues concerning the validity or invalidity of a document
registered by the Register of Deeds.
25

26

The complainants charge Atty. Victorio, Jr. and Atty. Tolentino, Jr. with having conspired with each
other to guarantee that the parties in Civil Case No. Q-59598 would enter into the amicable
settlement, and then to cause the cancellation of the affidavit of adverse claim and notice of lis
pendens annotated on TCT No. N-290546. The complainants further fault Atty. Victorio, Jr. with
having abandoned their cause since the issuance of the RTC of its order dated May 16, 2008. The
complainants charges are devoid of substance.
Although it is not necessary to prove a formal agreement in order to establish conspiracy because
conspiracy may be inferred from the circumstances attending the commission of an act, it is
nonetheless essential that conspiracy be established by clear and convincing evidence. The
complainants failed in this regard. Outside of their bare assertions that Atty. Victorio, Jr. and Atty.
Tolentino, Jr. had conspired with each other in order to cause the dismissal of the complaint and then
discharge of the annotations, they presented no evidence to support their allegation of conspiracy.
On the contrary, the records indicated their own active participation in arriving at the amicable
settlement with the defendants in Civil Case No. Q-07-59598. Hence, they could not now turn their
backs on the amicable settlement that they had themselves entered into.
27

Even assuming that Atty. Victorio, Jr. and Atty. Tolentino, Jr. initiated and participated in the
settlement of the case, there was nothing wrong in their doing so. It was actually their obligation as
lawyers to do so, pursuant to Rule 1.04, Canon 1 of the Code of Professional Responsibility, viz.:
RULE 1.04 A lawyer shall encourage his clients to avoid, end or settle a controversy if it will admit
of a fair settlement.
1wphi1

In fine, the presumption of the validity of the amicable settlement of the complainants and the
defendants in Civil Case No. Q-07-59598 subsisted.
28

Anent the complainants charge of abandonment against Atty. Victorio, Jr., Rule 18.03 and Rule
18.04, Canon 18 of the Code of Professional Responsibility are applicable, to wit:
CANON 18 A lawyer shall serve his client with competence and diligence.
Rule 18.03 A lawyer shall not neglecta legal matter entrusted to him, and his negligence in
connection therewith shall render him liable.
Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond
within a reasonable time to the clients request for information.
There is no issue that the complainants engaged the services of Atty. Victorio, Jr. as their counsel in
Civil Case No. Q-07-59598. Atty. Victorio, Jr. served as such counsel. With Atty. Victorio, Jr.
assistance, the complainants obtained a fair settlement consisting in receiving half of the proceeds
of the sale of the property in litis, without any portion of the proceeds accruing to counsel as his legal
fees. The complainants did not competently and persuasively show any unfaithfulness on the part of
Atty. Victorio, Jr. as far as their interest in the litigation was concerned. Hence, Atty. Victorio, Jr. was
not liable for abandonment.
Atty. Victorio, Jr. could not be faulted for the perceived inattention to any other matters subsequent to
the termination of Civil Case No. Q-07-59598. Unless otherwise expressly stipulated between them
at any time during the engagement, the complainants had no right to assume that Atty. Victorio, Jr.s
legal representation was indefinite as to extend to his representation of them in the LRA. The Law
Profession did not burden its members with the responsibility of indefinite service to the clients;
hence, the rendition of professional services depends on the agreement between the attorney and
the client. Atty. Victorio, Jr.s alleged failure to respond to the complainants calls or visits, or to
provide them with his whereabouts to enable them to have access to him despite the termination of
his engagement in Civil Case No. Q-07-59598 did not equate to abandonment without the credible
showing that he continued to come under the professional obligation towards them after the
termination of Civil Case No. Q-07-59598.
WHEREFORE, the Court DISMISSES the baseless disbarment complaints against Atty. Federico S.
Tolentino, Jr., Atty. Renato G. Cunanan, Atty. Daniel F. Victoria, Jr., Atty. Elbert T. Quilala and Atty.
Constante P. Caluya, Jr.
SO ORDERED.
G.R. No. 102007 September 2, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ROGELIO BAYOTAS y CORDOVA, accused-appellant.
The Solicitor General for plaintiff-appellee.

Public Attorney's Office for accused-appellant.

ROMERO, J.:
In Criminal Case No. C-3217 filed before Branch 16, RTC Roxas City, Rogelio Bayotas y Cordova
was charged with Rape and eventually convicted thereof on June 19, 1991 in a decision penned by
Judge Manuel E. Autajay. Pending appeal of his conviction, Bayotas died on February 4, 1992 at
the National Bilibid Hospital due to cardio respiratory arrest secondary to hepatic encephalopathy
secondary to hipato carcinoma gastric malingering. Consequently, the Supreme Court in its
Resolution of May 20, 1992 dismissed the criminal aspect of the appeal. However, it required the
Solicitor General to file its comment with regard to Bayotas' civil liability arising from his commission
of the offense charged.
In his comment, the Solicitor General expressed his view that the death of accused-appellant did not
extinguish his civil liability as a result of his commission of the offense charged. The Solicitor
General, relying on the case ofPeople v. Sendaydiego 1 insists that the appeal should still be resolved
for the purpose of reviewing his conviction by the lower court on which the civil liability is based.
Counsel for the accused-appellant, on the other hand, opposed the view of the Solicitor General
arguing that the death of the accused while judgment of conviction is pending appeal extinguishes
both his criminal and civil penalties. In support of his position, said counsel invoked the ruling of the
Court of Appeals in People v. Castillo and Ocfemia 2 which held that the civil obligation in a criminal
case takes root in the criminal liability and, therefore, civil liability is extinguished if accused should die
before final judgment is rendered.
We are thus confronted with a single issue: Does death of the accused pending appeal of his
conviction extinguish his civil liability?
In the aforementioned case of People v. Castillo, this issue was settled in the affirmative. This same
issue posed therein was phrased thus: Does the death of Alfredo Castillo affect both his criminal
responsibility and his civil liability as a consequence of the alleged crime?
It resolved this issue thru the following disquisition:
Article 89 of the Revised Penal Code is the controlling statute. It reads, in part:
Art. 89. How criminal liability is totally extinguished. Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and as to
the pecuniary penalties liability therefor is extinguished only when the
death of the offender occurs before final judgment;
With reference to Castillo's criminal liability, there is no question. The law is plain.
Statutory construction is unnecessary. Said liability is extinguished.

The civil liability, however, poses a problem. Such liability is extinguished only when
the death of the offender occurs before final judgment. Saddled upon us is the task of
ascertaining the legal import of the term "final judgment." Is it final judgment as
contradistinguished from an interlocutory order? Or, is it a judgment which is final and
executory?
We go to the genesis of the law. The legal precept contained in Article 89 of the
Revised Penal Code heretofore transcribed is lifted from Article 132 of the Spanish El
Codigo Penal de 1870 which, in part, recites:
La responsabilidad penal se extingue.
1. Por la muerte del reo en cuanto a las penas personales siempre, y
respecto a las pecuniarias, solo cuando a su fallecimiento no hubiere
recaido sentencia firme.
xxx xxx xxx
The code of 1870 . . . it will be observed employs the term "sentencia firme." What is
"sentencia firme" under the old statute?
XXVIII Enciclopedia Juridica Espaola, p. 473, furnishes the ready answer: It says:
SENTENCIA FIRME. La sentencia que adquiere la fuerza de las
definitivas por no haberse utilizado por las partes litigantes recurso
alguno contra ella dentro de los terminos y plazos legales concedidos
al efecto.
"Sentencia firme" really should be understood as one which is definite. Because, it is
only when judgment is such that, as Medina y Maranon puts it, the crime is confirmed
"en condena determinada;" or, in the words of Groizard, the guilt of the accused
becomes "una verdad legal." Prior thereto, should the accused die, according to
Viada, "no hay legalmente, en tal caso, ni reo, ni delito, ni responsabilidad criminal
de ninguna clase." And, as Judge Kapunan well explained, when a defendant dies
before judgment becomes executory, "there cannot be any determination by final
judgment whether or not the felony upon which the civil action might arise exists," for
the simple reason that "there is no party defendant." (I Kapunan, Revised Penal
Code, Annotated, p. 421. Senator Francisco holds the same view. Francisco,
Revised Penal Code, Book One, 2nd ed., pp. 859-860)
The legal import of the term "final judgment" is similarly reflected in the Revised
Penal Code. Articles 72 and 78 of that legal body mention the term "final judgment" in
the sense that it is already enforceable. This also brings to mind Section 7, Rule 116
of the Rules of Court which states that a judgment in a criminal case becomes final
"after the lapse of the period for perfecting an appeal or when the sentence has been
partially or totally satisfied or served, or the defendant has expressly waived in
writing his right to appeal."

By fair intendment, the legal precepts and opinions here collected funnel down to one
positive conclusion: The term final judgment employed in the Revised Penal Code
means judgment beyond recall. Really, as long as a judgment has not become
executory, it cannot be truthfully said that defendant is definitely guilty of the felony
charged against him.
Not that the meaning thus given to final judgment is without reason. For where, as in
this case, the right to institute a separate civil action is not reserved, the decision to
be rendered must, of necessity, cover "both the criminal and the civil aspects of the
case." People vs. Yusico (November 9, 1942), 2 O.G., No. 100, p. 964. See
also: People vs. Moll, 68 Phil., 626, 634; Francisco, Criminal Procedure, 1958 ed.,
Vol. I, pp. 234, 236. Correctly, Judge Kapunan observed that as "the civil action is
based solely on the felony committed and of which the offender might be found guilty,
the death of the offender extinguishes the civil liability." I Kapunan, Revised Penal
Code, Annotated, supra.
Here is the situation obtaining in the present case: Castillo's criminal liability is out.
His civil liability is sought to be enforced by reason of that criminal liability. But then, if
we dismiss, as we must, the criminal action and let the civil aspect remain, we will be
faced with the anomalous situation whereby we will be called upon to clamp civil
liability in a case where the source thereof criminal liability does not exist. And,
as was well stated in Bautista, et al. vs. Estrella, et al., CA-G.R.
No. 19226-R, September 1, 1958, "no party can be found and held criminally liable in
a civil suit," which solely would remain if we are to divorce it from the criminal
proceeding."
This ruling of the Court of Appeals in the Castillo case 3 was adopted by the Supreme Court in the
cases of People of the Philippines v. Bonifacio Alison, et al., 4 People of the Philippines v. Jaime Jose, et
al. 5 and People of the Philippines v.Satorre 6 by dismissing the appeal in view of the death of the accused
pending appeal of said cases.
As held by then Supreme Court Justice Fernando in the Alison case:
The death of accused-appellant Bonifacio Alison having been established, and
considering that there is as yet no final judgment in view of the pendency of the
appeal, the criminal and civil liability of the said accused-appellant Alison was
extinguished by his death (Art. 89, Revised Penal Code; Reyes' Criminal Law, 1971
Rev. Ed., p. 717, citing People v. Castillo and Ofemia C.A., 56 O.G. 4045);
consequently, the case against him should be dismissed.
On the other hand, this Court in the subsequent cases of Buenaventura Belamala v. Marcelino
Polinar 7 andLamberto Torrijos v. The Honorable Court of Appeals 8 ruled differently. In the former, the
issue decided by this court was: Whether the civil liability of one accused of physical injuries who died
before final judgment is extinguished by his demise to the extent of barring any claim therefore against his
estate. It was the contention of the administrator-appellant therein that the death of the accused prior to
final judgment extinguished all criminal and civil liabilities resulting from the offense, in view of Article 89,
paragraph 1 of the Revised Penal Code. However, this court ruled therein:

We see no merit in the plea that the civil liability has been extinguished, in view of the
provisions of the Civil Code of the Philippines of 1950 (Rep. Act No. 386) that
became operative eighteen years after the revised Penal Code. As pointed out by the
Court below, Article 33 of the Civil Code establishes a civil action for damages on
account of physical injuries, entirely separate and distinct from the criminal action.
Art. 33. In cases of defamation, fraud, and physical injuries, a civil
action for damages, entirely separate and distinct from the criminal
action, may be brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution, and shall require
only a preponderance of evidence.
Assuming that for lack of express reservation, Belamala's civil action for damages
was to be considered instituted together with the criminal action still, since both
proceedings were terminated without final adjudication, the civil action of the
offended party under Article 33 may yet be enforced separately.
In Torrijos, the Supreme Court held that:
xxx xxx xxx
It should be stressed that the extinction of civil liability follows the extinction of the
criminal liability under Article 89, only when the civil liability arises from the criminal
act as its only basis. Stated differently, where the civil liability does not exist
independently of the criminal responsibility, the extinction of the latter by death, ipso
facto extinguishes the former, provided, of course, that death supervenes before final
judgment. The said principle does not apply in instant case wherein the civil liability
springs neither solely nor originally from the crime itself but from a civil contract of
purchase and sale. (Emphasis ours)
xxx xxx xxx
In the above case, the court was convinced that the civil liability of the accused who was
charged with estafa could likewise trace its genesis to Articles 19, 20 and 21 of the Civil
Code since said accused had swindled the first and second vendees of the property subject
matter of the contract of sale. It therefore concluded: "Consequently, while the death of the
accused herein extinguished his criminal liability including fine, his civil liability based on the
laws of human relations remains."
Thus it allowed the appeal to proceed with respect to the civil liability of the accused, notwithstanding
the extinction of his criminal liability due to his death pending appeal of his conviction.
To further justify its decision to allow the civil liability to survive, the court relied on the following
ratiocination: Since Section 21, Rule 3 of the Rules of Court 9 requires the dismissal of all money
claims against the defendant whose death occurred prior to the final judgment of the Court of First
Instance (CFI), then it can be inferred that actions for recovery of money may continue to be heard on
appeal, when the death of the defendant supervenes after the CFI had rendered its judgment. In such
case, explained this tribunal, "the name of the offended party shall be included in the title of the case as

plaintiff-appellee and the legal representative or the heirs of the deceased-accused should be substituted
as defendants-appellants."

It is, thus, evident that as jurisprudence evolved from Castillo to Torrijos, the rule established was
that the survival of the civil liability depends on whether the same can be predicated on sources of
obligations other than delict. Stated differently, the claim for civil liability is also extinguished together
with the criminal action if it were solely based thereon, i.e., civil liability ex delicto.
However, the Supreme Court in People v. Sendaydiego, et al. 10 departed from this long-established
principle of law. In this case, accused Sendaydiego was charged with and convicted by the lower court of
malversation thru falsification of public documents. Sendaydiego's death supervened during the pendency
of the appeal of his conviction.
This court in an unprecedented move resolved to dismiss Sendaydiego's appeal but only to the
extent of his criminal liability. His civil liability was allowed to survive although it was clear that such
claim thereon was exclusively dependent on the criminal action already extinguished. The legal
import of such decision was for the court to continue exercising appellate jurisdiction over the entire
appeal, passing upon the correctness of Sendaydiego's conviction despite dismissal of the criminal
action, for the purpose of determining if he is civilly liable. In doing so, this Court issued a Resolution
of July 8, 1977 stating thus:
The claim of complainant Province of Pangasinan for the civil liability survived
Sendaydiego because his death occurred after final judgment was rendered by the
Court of First Instance of Pangasinan, which convicted him of three complex crimes
of malversation through falsification and ordered him to indemnify the Province in the
total sum of P61,048.23 (should be P57,048.23).
The civil action for the civil liability is deemed impliedly instituted with the criminal
action in the absence of express waiver or its reservation in a separate action (Sec.
1, Rule 111 of the Rules of Court). The civil action for the civil liability is separate and
distinct from the criminal action (People and Manuel vs. Coloma, 105 Phil. 1287; Roa
vs. De la Cruz, 107 Phil. 8).
When the action is for the recovery of money and the defendant dies before final
judgment in the Court of First Instance, it shall be dismissed to be prosecuted in the
manner especially provided in Rule 87 of the Rules of Court (Sec. 21, Rule 3 of the
Rules of Court).
The implication is that, if the defendant dies after a money judgment had been
rendered against him by the Court of First Instance, the action survives him. It may
be continued on appeal (Torrijos vs. Court of Appeals, L-40336, October 24, 1975; 67
SCRA 394).
The accountable public officer may still be civilly liable for the funds improperly
disbursed although he has no criminal liability (U.S. vs. Elvina, 24 Phil. 230;
Philippine National Bank vs. Tugab, 66 Phil. 583).
In view of the foregoing, notwithstanding the dismissal of the appeal of the deceased
Sendaydiego insofar as his criminal liability is concerned, the Court Resolved to

continue exercising appellate jurisdiction over his possible civil liability for the money
claims of the Province of Pangasinan arising from the alleged criminal acts
complained of, as if no criminal case had been instituted against him, thus making
applicable, in determining his civil liability, Article 30 of the Civil Code . . . and, for that
purpose, his counsel is directed to inform this Court within ten (10) days of the
names and addresses of the decedent's heirs or whether or not his estate is under
administration and has a duly appointed judicial administrator. Said heirs or
administrator will be substituted for the deceased insofar as the civil action for the
civil liability is concerned (Secs. 16 and 17, Rule 3, Rules of Court).
Succeeding cases 11 raising the identical issue have maintained adherence to our ruling in Sendaydiego;
in other words, they were a reaffirmance of our abandonment of the settled rule that a civil liability solely
anchored on the criminal (civil liability ex delicto) is extinguished upon dismissal of the entire appeal due
to the demise of the accused.
But was it judicious to have abandoned this old ruling? A re-examination of our decision
in Sendaydiego impels us to revert to the old ruling.
To restate our resolution of July 8, 1977 in Sendaydiego: The resolution of the civil action impliedly
instituted in the criminal action can proceed irrespective of the latter's extinction due to death of the
accused pending appeal of his conviction, pursuant to Article 30 of the Civil Code and Section 21,
Rule 3 of the Revised Rules of Court.
Article 30 of the Civil Code provides:
When a separate civil action is brought to demand civil liability arising from a criminal
offense, and no criminal proceedings are instituted during the pendency of the civil
case, a preponderance of evidence shall likewise be sufficient to prove the act
complained of.
Clearly, the text of Article 30 could not possibly lend support to the ruling in Sendaydiego. Nowhere
in its text is there a grant of authority to continue exercising appellate jurisdiction over the accused's
civil liability ex delictowhen his death supervenes during appeal. What Article 30 recognizes is an
alternative and separate civil action which may be brought to demand civil liability arising from a
criminal offense independently of any criminal action. In the event that no criminal proceedings are
instituted during the pendency of said civil case, the quantum of evidence needed to prove the
criminal act will have to be that which is compatible with civil liability and that is, preponderance of
evidence and not proof of guilt beyond reasonable doubt. Citing or invoking Article 30 to justify the
survival of the civil action despite extinction of the criminal would in effect merely beg the question of
whether civil liability ex delicto survives upon extinction of the criminal action due to death of the
accused during appeal of his conviction. This is because whether asserted in
the criminal action or in a separate civil action, civil liability ex delicto is extinguished by the death of
the accused while his conviction is on appeal. Article 89 of the Revised Penal Code is clear on this
matter:
Art. 89. How criminal liability is totally extinguished. Criminal liability is totally
extinguished:

1. By the death of the convict, as to the personal penalties; and as to pecuniary

penalties, liability therefor is extinguished only when the death of the offender occurs
before final judgment;
xxx xxx xxx
However, the ruling in Sendaydiego deviated from the expressed intent of Article 89. It allowed
claims for civil liability ex delicto to survive by ipso facto treating the civil action impliedly instituted
with the criminal, as one filed under Article 30, as though no criminal proceedings had been filed but
merely a separate civil action. This had the effect of converting such claims from one which is
dependent on the outcome of the criminal action to an entirely new and separate one, the
prosecution of which does not even necessitate the filing of criminal proceedings. 12One would be
hard put to pinpoint the statutory authority for such a transformation. It is to be borne in mind that in
recovering civil liability ex delicto, the same has perforce to be determined in the criminal action, rooted as
it is in the court's pronouncement of the guilt or innocence of the accused. This is but to render fealty to
the intendment of Article 100 of the Revised Penal Code which provides that "every person criminally
liable for a felony is also civilly liable." In such cases, extinction of the criminal action due to death of the
accused pending appeal inevitably signifies the concomitant extinction of the civil liability. Mors Omnia
Solvi. Death dissolves all things.
In sum, in pursuing recovery of civil liability arising from crime, the final determination of the criminal
liability is a condition precedent to the prosecution of the civil action, such that when the criminal
action is extinguished by the demise of accused-appellant pending appeal thereof, said civil action
cannot survive. The claim for civil liability springs out of and is dependent upon facts which, if true,
would constitute a crime. Such civil liability is an inevitable consequence of the criminal liability and
is to be declared and enforced in the criminal proceeding. This is to be distinguished from that which
is contemplated under Article 30 of the Civil Code which refers to the institution of a separate civil
action that does not draw its life from a criminal proceeding. The Sendaydiego resolution of July 8,
1977, however, failed to take note of this fundamental distinction when it allowed the survival of the
civil action for the recovery of civil liability ex delicto by treating the same as a separate civil action
referred to under Article 30. Surely, it will take more than just a summary judicial pronouncement to
authorize the conversion of said civil action to an independent one such as that contemplated under
Article 30.
Ironically however, the main decision in Sendaydiego did not apply Article 30, the resolution of July
8, 1977 notwithstanding. Thus, it was held in the main decision:
Sendaydiego's appeal will be resolved only for the purpose of showing his criminal
liability which is the basis of the civil liability for which his estate would be liable. 13
In other words, the Court, in resolving the issue of his civil liability, concomitantly made a
determination on whether Sendaydiego, on the basis of evidenced adduced, was indeed guilty
beyond reasonable doubt of committing the offense charged. Thus, it upheld Sendaydiego's
conviction and pronounced the same as thesource of his civil liability. Consequently, although Article
30 was not applied in the final determination of Sendaydiego's civil liability, there was a reopening of
the criminal action already extinguished which served as basis for Sendaydiego's civil liability. We
reiterate: Upon death of the accused pending appeal of his conviction, the criminal action is
extinguished inasmuch as there is no longer a defendant to stand as the accused; the civil action

instituted therein for recovery of civil liability ex delicto is ipso facto extinguished, grounded as it is on
the criminal.
Section 21, Rule 3 of the Rules of Court was also invoked to serve as another basis for
the Sendaydiegoresolution of July 8, 1977. In citing Sec. 21, Rule 3 of the Rules of Court, the Court
made the inference that civil actions of the type involved in Sendaydiego consist of money claims,
the recovery of which may be continued on appeal if defendant dies pending appeal of his conviction
by holding his estate liable therefor. Hence, the Court's conclusion:
"When the action is for the recovery of money" "and the defendant dies before final
judgment in the court of First Instance, it shall be dismissed to be prosecuted in the
manner especially provided" in Rule 87 of the Rules of Court (Sec. 21, Rule 3 of the
Rules of Court).
The implication is that, if the defendant dies after a money judgment had been
rendered against him by the Court of First Instance, the action survives him. It may
be continued on appeal.
Sadly, reliance on this provision of law is misplaced. From the standpoint of procedural law, this
course taken inSendaydiego cannot be sanctioned. As correctly observed by Justice Regalado:
xxx xxx xxx
I do not, however, agree with the justification advanced in
both Torrijos and Sendaydiego which, relying on the provisions of Section 21, Rule 3
of the Rules of Court, drew the strained implication therefrom that where the civil
liability instituted together with the criminal liabilities had already passed beyond the
judgment of the then Court of First Instance (now the Regional Trial Court), the Court
of Appeals can continue to exercise appellate jurisdiction thereover despite the
extinguishment of the component criminal liability of the deceased. This
pronouncement, which has been followed in the Court's judgments subsequent and
consonant to Torrijos and Sendaydiego, should be set aside and abandoned as
being clearly erroneous and unjustifiable.
Said Section 21 of Rule 3 is a rule of civil procedure in ordinary civil actions. There is
neither authority nor justification for its application in criminal procedure to civil
actions instituted together with and as part of criminal actions. Nor is there any
authority in law for the summary conversion from the latter category of an ordinary
civil action upon the death of the offender. . . .
Moreover, the civil action impliedly instituted in a criminal proceeding for recovery of civil liability ex
delicto can hardly be categorized as an ordinary money claim such as that referred to in Sec. 21,
Rule 3 enforceable before the estate of the deceased accused.
Ordinary money claims referred to in Section 21, Rule 3 must be viewed in light of the provisions of
Section 5, Rule 86 involving claims against the estate, which in Sendaydiego was held liable for
Sendaydiego's civil liability. "What are contemplated in Section 21 of Rule 3, in relation to Section 5
of Rule 86, 14 are contractual money claims while the claims involved in civil liability ex delicto may
include even the restitution of personal or real property." 15 Section 5, Rule 86 provides an exclusive

enumeration of what claims may be filed against the estate. These are: funeral expenses, expenses for
the last illness, judgments for money and claim arising from contracts, expressed or implied. It is clear
that money claims arising from delict do not form part of this exclusive enumeration. Hence, there could
be no legal basis in (1) treating a civil action ex delicto as an ordinary contractual money claim referred to
in Section 21, Rule 3 of the Rules of Court and (2) allowing it to survive by filing a claim therefor before
the estate of the deceased accused. Rather, it should be extinguished upon extinction of the criminal
action engendered by the death of the accused pending finality of his conviction.

Accordingly, we rule: if the private offended party, upon extinction of the civil liability ex
delicto desires to recover damages from the same act or omission complained of, he must subject to
Section 1, Rule 111 16 (1985 Rules on Criminal Procedure as amended) file a separate civil action, this
time predicated not on the felony previously charged but on other sources of obligation. The source of
obligation upon which the separate civil action is premised determines against whom the same shall be
enforced.
If the same act or omission complained of also arises from quasi-delict or may, by provision of law,
result in an injury to person or property (real or personal), the separate civil action must be filed
against the executor or administrator 17 of the estate of the accused pursuant to Sec. 1, Rule 87 of the
Rules of Court:
Sec. 1. Actions which may and which may not be brought against executor or
administrator. No action upon a claim for the recovery of money or debt or interest
thereon shall be commenced against the executor or administrator; but actions to
recover real or personal property, or an interest therein, from the estate, or to enforce
a lien thereon, and actions to recover damages for an injury to person or property,
real or personal, may be commenced against him.
This is in consonance with our ruling in Belamala 18 where we held that, in recovering damages for
injury to persons thru an independent civil action based on Article 33 of the Civil Code, the same must be
filed against the executor or administrator of the estate of deceased accused and not against the estate
under Sec. 5, Rule 86 because this rule explicitly limits the claim to those for funeral expenses, expenses
for the last sickness of the decedent, judgment for money and claims arising from contract, express or
implied. Contractual money claims, we stressed, refers only to purely personal obligations other than
those which have their source in delict or tort.
Conversely, if the same act or omission complained of also arises from contract, the separate civil
action must be filed against the estate of the accused, pursuant to Sec. 5, Rule 86 of the Rules of
Court.
From this lengthy disquisition, we summarize our ruling herein:
1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as
the civil liability based solely thereon. As opined by Justice Regalado, in this regard, "the death of the
accused prior to final judgment terminates his criminal liability and only the civil
liability directly arising from and based solely on the offense committed, i.e., civil liability ex
delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives notwithstanding the death of accused, if the same
may also be predicated on a source of obligation other than delict. 19 Article 1157 of the Civil Code

enumerates these other sources of obligation from which the civil liability may arise as a result of the
same act or omission:

a) Law 20
b) Contracts
c) Quasi-contracts
d) . . .
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above, an action for recovery therefor
may be pursued but only by way of filing a separate civil action and subject to Section 1, Rule 111 of
the 1985 Rules on Criminal Procedure as amended. This separate civil action may be enforced
either against the executor/administrator or the estate of the accused, depending on the source of
obligation upon which the same is based as explained above.
4. Finally, the private offended party need not fear a forfeiture of his right to file this separate civil
action by prescription, in cases where during the prosecution of the criminal action and prior to its
extinction, the private-offended party instituted together therewith the civil action. In such case, the
statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal
case, conformably with provisions of Article 1155 21 of the Civil Code, that should thereby avoid any
apprehension on a possible privation of right by prescription. 22
Applying this set of rules to the case at bench, we hold that the death of appellant Bayotas
extinguished his criminal liability and the civil liability based solely on the act complained of, i.e.,
rape. Consequently, the appeal is hereby dismissed without qualification.
WHEREFORE, the appeal of the late Rogelio Bayotas is DISMISSED with costs de oficio.
SO ORDERED.
G.R. No. 155223

April 4, 2007

BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F. FUJITA, Petitioner,

vs.
FLORA SAN DIEGO-SISON, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Bobie Rose V. Frias represented by her
Attorney-in-fact, Marie Regine F. Fujita (petitioner) seeking to annul the Decision 1 dated June 18,
2002 and the Resolution2 dated September 11, 2002 of the Court of Appeals (CA) in CA-G.R. CV No.
52839.

Petitioner is the owner of a house and lot located at No. 589 Batangas East, Ayala Alabang,
Muntinlupa, Metro Manila, which she acquired from Island Masters Realty and Development
Corporation (IMRDC) by virtue of a Deed of Sale dated Nov. 16, 1990. 3 The property is covered by
TCT No. 168173 of the Register of Deeds of Makati in the name of IMRDC.4
On December 7, 1990, petitioner, as the FIRST PARTY, and Dra. Flora San Diego-Sison
(respondent), as the SECOND PARTY, entered into a Memorandum of Agreement5 over the property
with the following terms:
NOW, THEREFORE, for and in consideration of the sum of THREE MILLION PESOS
(P3,000,000.00) receipt of which is hereby acknowledged by the FIRST PARTY from the SECOND
PARTY, the parties have agreed as follows:
1. That the SECOND PARTY has a period of Six (6) months from the date of the execution of
this contract within which to notify the FIRST PARTY of her intention to purchase the
aforementioned parcel of land together within (sic) the improvements thereon at the price of
SIX MILLION FOUR HUNDRED THOUSAND PESOS (P6,400,000.00). Upon notice to the
FIRST PARTY of the SECOND PARTYs intention to purchase the same, the latter has a
period of another six months within which to pay the remaining balance of P3.4 million.
2. That prior to the six months period given to the SECOND PARTY within which to decide
whether or not to purchase the above-mentioned property, the FIRST PARTY may still offer
the said property to other persons who may be interested to buy the same provided that the
amount of P3,000,000.00 given to the FIRST PARTY BY THE SECOND PARTY shall be paid
to the latter including interest based on prevailing compounded bank interest plus the
amount of the sale in excess of P7,000,000.00 should the property be sold at a price more
than P7 million.
3. That in case the FIRST PARTY has no other buyer within the first six months from the
execution of this contract, no interest shall be charged by the SECOND PARTY on the P3
million however, in the event that on the sixth month the SECOND PARTY would decide not
to purchase the aforementioned property, the FIRST PARTY has a period of another six
months within which to pay the sum of P3 million pesos provided that the said amount shall
earn compounded bank interest for the last six months only. Under this circumstance, the
amount of P3 million given by the SECOND PARTY shall be treated as [a] loan and the
property shall be considered as the security for the mortgage which can be enforced in
accordance with law.
x x x x.6
Petitioner received from respondent two million pesos in cash and one million pesos in a post-dated
check dated February 28, 1990, instead of 1991, which rendered said check stale. 7 Petitioner then
gave respondent TCT No. 168173 in the name of IMRDC and the Deed of Absolute Sale over the
property between petitioner and IMRDC.
Respondent decided not to purchase the property and notified petitioner through a letter 8 dated
March 20, 1991, which petitioner received only on June 11, 1991, 9 reminding petitioner of their
agreement that the amount of two million pesos which petitioner received from respondent should be

considered as a loan payable within six months. Petitioner subsequently failed to pay respondent the
amount of two million pesos.
On April 1, 1993, respondent filed with the Regional Trial Court (RTC) of Manila, a complaint 10 for
sum of money with preliminary attachment against petitioner. The case was docketed as Civil Case
No. 93-65367 and raffled to Branch 30. Respondent alleged the foregoing facts and in addition
thereto averred that petitioner tried to deprive her of the security for the loan by making a false
report11 of the loss of her owners copy of TCT No. 168173 to the Tagig Police Station on June 3,
1991, executing an affidavit of loss and by filing a petition 12 for the issuance of a new owners
duplicate copy of said title with the RTC of Makati, Branch 142; that the petition was granted in an
Order13 dated August 31, 1991; that said Order was subsequently set aside in an Order dated April
10, 199214where the RTC Makati granted respondents petition for relief from judgment due to the
fact that respondent is in possession of the owners duplicate copy of TCT No. 168173, and ordered
the provincial public prosecutor to conduct an investigation of petitioner for perjury and false
testimony. Respondent prayed for the ex-parte issuance of a writ of preliminary attachment and
payment of two million pesos with interest at 36% per annum from December 7, 1991, P100,000.00
moral, corrective and exemplary damages and P200,000.00 for attorneys fees.
In an Order dated April 6, 1993, the Executive Judge of the RTC of Manila issued a writ of
preliminary attachment upon the filing of a bond in the amount of two million pesos. 15
Petitioner filed an Amended Answer16 alleging that the Memorandum of Agreement was conceived
and arranged by her lawyer, Atty. Carmelita Lozada, who is also respondents lawyer; that she was
asked to sign the agreement without being given the chance to read the same; that the title to the
property and the Deed of Sale between her and the IMRDC were entrusted to Atty. Lozada for
safekeeping and were never turned over to respondent as there was no consummated sale yet; that
out of the two million pesos cash paid, Atty. Lozada took the one million pesos which has not been
returned, thus petitioner had filed a civil case against her; that she was never informed of
respondents decision not to purchase the property within the six month period fixed in the
agreement; that when she demanded the return of TCT No. 168173 and the Deed of Sale between
her and the IMRDC from Atty. Lozada, the latter gave her these documents in a brown envelope on
May 5, 1991 which her secretary placed in her attache case; that the envelope together with her
other personal things were lost when her car was forcibly opened the following day; that she sought
the help of Atty. Lozada who advised her to secure a police report, to execute an affidavit of loss and
to get the services of another lawyer to file a petition for the issuance of an owners duplicate copy;
that the petition for the issuance of a new owners duplicate copy was filed on her behalf without her
knowledge and neither did she sign the petition nor testify in court as falsely claimed for she was
abroad; that she was a victim of the manipulations of Atty. Lozada and respondent as shown by the
filing of criminal charges for perjury and false testimony against her; that no interest could be due as
there was no valid mortgage over the property as the principal obligation is vitiated with fraud and
deception. She prayed for the dismissal of the complaint, counter-claim for damages and attorneys
fees.
Trial on the merits ensued. On January 31, 1996, the RTC issued a decision, 17 the dispositive portion
of which reads:
WHEREFORE, judgment is hereby RENDERED:

1) Ordering defendant to pay plaintiff the sum of P2 Million plus interest thereon at the rate of
thirty two (32%) per cent per annum beginning December 7, 1991 until fully paid.
2) Ordering defendant to pay plaintiff the sum of P70,000.00 representing premiums paid by
plaintiff on the attachment bond with legal interest thereon counted from the date of this
decision until fully paid.
3) Ordering defendant to pay plaintiff the sum of P100,000.00 by way of moral, corrective
and exemplary damages.
4) Ordering defendant to pay plaintiff attorneys fees of P100,000.00 plus cost of litigation.18
The RTC found that petitioner was under obligation to pay respondent the amount of two million
pesos with compounded interest pursuant to their Memorandum of Agreement; that the fraudulent
scheme employed by petitioner to deprive respondent of her only security to her loaned money when
petitioner executed an affidavit of loss and instituted a petition for the issuance of an owners
duplicate title knowing the same was in respondents possession, entitled respondent to moral
damages; and that petitioners bare denial cannot be accorded credence because her testimony and
that of her witness did not appear to be credible.
The RTC further found that petitioner admitted that she received from respondent the two million
pesos in cash but the fact that petitioner gave the one million pesos to Atty. Lozada was without
respondents knowledge thus it is not binding on respondent; that respondent had also proven that in
1993, she initially paid the sum ofP30,000.00 as premium for the issuance of the attachment
bond, P20,000.00 for its renewal in 1994, andP20,000.00 for the renewal in 1995, thus plaintiff
should be reimbursed considering that she was compelled to go to court and ask for a writ of
preliminary attachment to protect her rights under the agreement.
Petitioner filed her appeal with the CA. In a Decision dated June 18, 2002, the CA affirmed the RTC
decision with modification, the dispositive portion of which reads:
WHEREFORE, premises considered, the decision appealed from is MODIFIED in the sense that the
rate of interest is reduced from 32% to 25% per annum, effective June 7, 1991 until fully paid. 19
The CA found that: petitioner gave the one million pesos to Atty. Lozada partly as her commission
and partly as a loan; respondent did not replace the mistakenly dated check of one million pesos
because she had decided not to buy the property and petitioner knew of her decision as early as
April 1991; the award of moral damages was warranted since even granting petitioner had no hand
in the filing of the petition for the issuance of an owners copy, she executed an affidavit of loss of
TCT No. 168173 when she knew all along that said title was in respondents possession; petitioners
claim that she thought the title was lost when the brown envelope given to her by Atty. Lozada was
stolen from her car was hollow; that such deceitful conduct caused respondent serious anxiety and
emotional distress.
The CA concluded that there was no basis for petitioner to say that the interest should be charged
for six months only and no more; that a loan always bears interest otherwise it is not a loan; that
interest should commence on June 7, 199120 with compounded bank interest prevailing at the time
the two million was considered as a loan which was in June 1991; that the bank interest rate for

loans secured by a real estate mortgage in 1991 ranged from 25% to 32% per annum as certified to
by Prudential Bank,21 that in fairness to petitioner, the rate to be charged should be 25% only.
Petitioners motion for reconsideration was denied by the CA in a Resolution dated September 11,
2002.
Hence the instant Petition for Review on Certiorari filed by petitioner raising the following issues:
(A) WHETHER OR NOT THE COMPOUNDED BANK INTEREST SHOULD BE LIMITED TO
SIX (6) MONTHS AS CONTAINED IN THE MEMORANDUM OF AGREEMENT.
(B) WHETHER OR NOT THE RESPONDENT IS ENTITLED TO MORAL DAMAGES.
(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND EXEMPLARY DAMAGES
AND ATTORNEYS FEES IS PROPER EVEN IF NOT MENTIONED IN THE TEXT OF THE
DECISION.22
Petitioner contends that the interest, whether at 32% per annum awarded by the trial court or at 25%
per annum as modified by the CA which should run from June 7, 1991 until fully paid, is contrary to
the parties Memorandum of Agreement; that the agreement provides that if respondent would
decide not to purchase the property, petitioner has the period of another six months to pay the loan
with compounded bank interest for the last six months only; that the CAs ruling that a loan always
bears interest otherwise it is not a loan is contrary to Art. 1956 of the New Civil Code which provides
that no interest shall be due unless it has been expressly stipulated in writing.
We are not persuaded.
While the CAs conclusion, that a loan always bears interest otherwise it is not a loan, is flawed since
a simple loan may be gratuitous or with a stipulation to pay interest, 23 we find no error committed by
the CA in awarding a 25% interest per annum on the two-million peso loan even beyond the second
six months stipulated period.
The Memorandum of Agreement executed between the petitioner and respondent on December 7,
1990 is the law between the parties. In resolving an issue based upon a contract, we must first
examine the contract itself, especially the provisions thereof which are relevant to the
controversy.24 The general rule is that if the terms of an agreement are clear and leave no doubt as
to the intention of the contracting parties, the literal meaning of its stipulations shall prevail. 25 It is
further required that the various stipulations of a contract shall be interpreted together, attributing to
the doubtful ones that sense which may result from all of them taken jointly.26
In this case, the phrase "for the last six months only" should be taken in the context of the entire
agreement. We agree with and adopt the CAs interpretation of the phrase in this wise:
Their agreement speaks of two (2) periods of six months each. The first six-month period was given
to plaintiff-appellee (respondent) to make up her mind whether or not to purchase defendantappellants (petitioner's) property. The second six-month period was given to defendant-appellant to
pay the P2 million loan in the event that plaintiff-appellee decided not to buy the subject property in
which case interest will be charged "for the last six months only", referring to the second six-month

period. This means that no interest will be charged for the first six-month period while appellee was
making up her mind whether to buy the property, but only for the second period of six months after
appellee had decided not to buy the property. This is the meaning of the phrase "for the last six
months only". Certainly, there is nothing in their agreement that suggests that interest will be
charged for six months only even if it takes defendant-appellant an eternity to pay the loan. 27
The agreement that the amount given shall bear compounded bank interest for the last six months
only, i.e., referring to the second six-month period, does not mean that interest will no longer be
charged after the second six-month period since such stipulation was made on the logical and
reasonable expectation that such amount would be paid within the date stipulated. Considering that
petitioner failed to pay the amount given which under the Memorandum of Agreement shall be
considered as a loan, the monetary interest for the last six months continued to accrue until actual
payment of the loaned amount.
The payment of regular interest constitutes the price or cost of the use of money and thus, until the
principal sum due is returned to the creditor, regular interest continues to accrue since the debtor
continues to use such principal amount.28 It has been held that for a debtor to continue in possession
of the principal of the loan and to continue to use the same after maturity of the loan without
payment of the monetary interest, would constitute unjust enrichment on the part of the debtor at the
expense of the creditor.29
Petitioner and respondent stipulated that the loaned amount shall earn compounded bank interests,
and per the certification issued by Prudential Bank, the interest rate for loans in 1991 ranged from
25% to 32% per annum. The CA reduced the interest rate to 25% instead of the 32% awarded by the
trial court which petitioner no longer assailed.
1awphi1.nt

In Bautista v. Pilar Development Corp.,30 we upheld the validity of a 21% per annum interest on
a P142,326.43 loan. In Garcia v. Court of Appeals,31 we sustained the agreement of the parties to a
24% per annum interest on an P8,649,250.00 loan. Thus, the interest rate of 25% per annum
awarded by the CA to a P2 million loan is fair and reasonable.
Petitioner next claims that moral damages were awarded on the erroneous finding that she used a
fraudulent scheme to deprive respondent of her security for the loan; that such finding is baseless
since petitioner was acquitted in the case for perjury and false testimony filed by respondent against
her.
We are not persuaded.
Article 31 of the Civil Code provides that when the civil action is based on an obligation not arising
from the act or omission complained of as a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of the latter.32
While petitioner was acquitted in the false testimony and perjury cases filed by respondent against
her, those actions are entirely distinct from the collection of sum of money with damages filed by
respondent against petitioner.
We agree with the findings of the trial court and the CA that petitioners act of trying to deprive
respondent of the security of her loan by executing an affidavit of loss of the title and instituting a
petition for the issuance of a new owners duplicate copy of TCT No. 168173 entitles respondent to

moral damages. Moral damages may be awarded in culpa contractual or breach of contract cases
when the defendant acted fraudulently or in bad faith. Bad faith does not simply connote bad
judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing
of wrong. It partakes of the nature of fraud.33
1a\^/phi1.net

The Memorandum of Agreement provides that in the event that respondent opts not to buy the
property, the money given by respondent to petitioner shall be treated as a loan and the property
shall be considered as the security for the mortgage. It was testified to by respondent that after they
executed the agreement on December 7, 1990, petitioner gave her the owners copy of the title to
the property, the Deed of Sale between petitioner and IMRDC, the certificate of occupancy, and the
certificate of the Secretary of the IMRDC who signed the Deed of Sale. 34 However, notwithstanding
that all those documents were in respondents possession, petitioner executed an affidavit of loss
that the owners copy of the title and the Deed of Sale were lost.
Although petitioner testified that her execution of the affidavit of loss was due to the fact that she was
of the belief that since she had demanded from Atty. Lozada the return of the title, she thought that
the brown envelope with markings which Atty. Lozada gave her on May 5, 1991 already contained
the title and the Deed of Sale as those documents were in the same brown envelope which she gave
to Atty. Lozada prior to the transaction with respondent.35 Such statement remained a bare
statement. It was not proven at all since Atty. Lozada had not taken the stand to corroborate her
claim. In fact, even petitioners own witness, Benilda Ynfante (Ynfante), was not able to establish
petitioner's claim that the title was returned by Atty. Lozada in view of Ynfante's testimony that after
the brown envelope was given to petitioner, the latter passed it on to her and she placed it in
petitioners attach case36 and did not bother to look at the envelope.37
It is clear therefrom that petitioners execution of the affidavit of loss became the basis of the filing of
the petition with the RTC for the issuance of new owners duplicate copy of TCT No. 168173.
Petitioners actuation would have deprived respondent of the security for her loan were it not for
respondents timely filing of a petition for relief whereby the RTC set aside its previous order granting
the issuance of new title. Thus, the award of moral damages is in order.
The entitlement to moral damages having been established, the award of exemplary damages is
proper.38Exemplary damages may be imposed upon petitioner by way of example or correction for
the public good.39 The RTC awarded the amount of P100,000.00 as moral and exemplary damages.
While the award of moral and exemplary damages in an aggregate amount may not be the usual
way of awarding said damages,40 no error has been committed by CA. There is no question that
respondent is entitled to moral and exemplary damages.
Petitioner argues that the CA erred in awarding attorneys fees because the trial courts decision did
not explain the findings of facts and law to justify the award of attorneys fees as the same was
mentioned only in the dispositive portion of the RTC decision.
We agree.
Article 220841 of the New Civil Code enumerates the instances where such may be awarded and, in
all cases, it must be reasonable, just and equitable if the same were to be granted. 42 Attorney's fees
as part of damages are not meant to enrich the winning party at the expense of the losing litigant.
They are not awarded every time a party prevails in a suit because of the policy that no premium
should be placed on the right to litigate.43 The award of attorney's fees is the exception rather than

the general rule. As such, it is necessary for the trial court to make findings of facts and law that
would bring the case within the exception and justify the grant of such award. The matter of
attorney's fees cannot be mentioned only in the dispositive portion of the decision. 44 They must be
clearly explained and justified by the trial court in the body of its decision. On appeal, the CA is
precluded from supplementing the bases for awarding attorneys fees when the trial court failed to
discuss in its Decision the reasons for awarding the same. Consequently, the award of attorney's
fees should be deleted.
WHEREFORE, in view of all the foregoing, the Decision dated June 18, 2002 and the Resolution
dated September 11, 2002 of the Court of Appeals in CA-G.R. CV No. 52839 are AFFIRMED with
MODIFICATION that the award of attorneys fees is DELETED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 110544 October 17, 1995
REYNALDO V. TUANDA, Mayor of the Municipality of Jimalalud, Negros Oriental,
HERMINIGILDO FABURADA, (former Vice-Mayor), SANTOS A. VILLANUEVA, Incumbent
Member of the Sangguniang Bayan, MANUEL LIM, NICANOR R. AGOSTO, ERENIETA K.
MENDOZA MAXIMINO A. VIERNES, HACUBINA V. SERILLO, ILUMINADO D. ESTRELLANES,
and FORMER MEMBERS OF THE SANGGUNIANG BAYAN OF JIMALALUD, NEGROS
ORIENTAL, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, (THIRD DIVISION), BARTOLOME BINAOHAN and
DELIA ESTRELLANES, respondents.

KAPUNAN, J.:
Petitioners institute this special civil action for certiorari and prohibition under Rule 65 of the Revised
Rules of Court to set aside the resolution of the Sandiganbayan dated 17 February 1992 and its
orders dated 19 August 1992 and 13 May 1993 in Criminal Case No. 16936 entitled "People of the
Philippines versus Reynaldo Tuanda, et al." denying petitioners' motion for suspension of their
arraignment.
The present controversy arose from the following antecedents:
On 9 February 1989, private respondents Delia Estrellanes and Bartolome Binaohan were
designated as industrial labor sectoral representative and agricultural labor sectoral representative
respectively, for the Sangguniang Bayan of Jimalalud, Province of Negros Oriental by then Secretary
Luis T. Santos of the Department of Local Government. Private respondents Binaohan and
Estrellanes took their oath of office on 16 February 1989 and 17 February 1989, respectively.

Subsequently, petitioners filed an undated petition with the Office of the President for review and
recall of said designations. The latter, however, in a letter dated 20 March 1989, denied the petition
and enjoined Mayor Reynaldo Tuanda to recognize private respondents as sectoral representatives.
On 4 May 1990, private respondents filed a petition for mandamus with the Regional Trial Court of
Negros Oriental, Branch 35, docketed as Special Civil Action No. 9661, for recognition as members
of the Sangguniang Bayan. It was dismissed on 23 July 1991.
Thereafter, on 20 June 1991, petitioners filed an action with the Regional Trial Court of Dumaguete
City to declare null and void the designations of private respondents as sectoral representatives,
docketed as Civil Case No. 9955 entitled "Reynaldo Tuanda, et al. versus Secretary of the
Department of Local Government, et al."
On 21 July 1991, an information was filed before the Sandiganbayan, docketed as Criminal Case
No. 16936 entitled "People of the Philippines versus Reynaldo Tuanda, et al." charging petitioners
thus:
INFORMATION
The undersigned Special Prosecution Officer of the Special Prosecutor, hereby
accuses REYNALDO V. TUANDA, HERMENEGILDO G. FABURADA, MANUEL LIM,
NICANOR P. AGOSTO, ERENIETA K. MENDOZA, MAXIMO VIERNES, HACUBINA
V. SERILLO, and SANTOS A. VILLANUEVA of Violation of Section 3(e) of R.A. No.
3019, as amended, committed as follows:
That during the period from February 1989 to February 1991 and
subsequent thereto, in the Municipality of Jimalalud, Negros Oriental,
and within the jurisdiction of this Honorable Court, accused, all public
officers, Mayor REYNALDO V. TUANDA, Vice-Mayor
HERMENEGILDO G. FABURADA, Sangguniang Members MANUEL
LIM, NICANOR P. AGOSTO, ERENIETA K. MENDOZA, MAXIMO A.
VIERNES, HACUBINA V. SERILLO, ILUMINADO D. ESTRELLANES
and SANTOS A. VILLANUEVA while in the performance of their
official functions and taking advantage of their public positions, with
evident bad faith, manifest partiality, and conspiring and
confederating with each other did, then and there, wilfully and
unlawfully cause undue injury to Sectoral Members Bartolome M.
Binaohan and Delia T. Estrellanes by refusing to pay despite demand
the amount of NINETY FIVE THOUSAND THREE HUNDRED FIFTY
PESOS (P95,350.00) and ONE HUNDRED EIGHT THOUSAND
NINE HUNDRED PESOS (P108,900.00) representing respectively
their per diems, salaries and other privileges and benefits, and such
undue injury continuing to the present to the prejudice and damage of
Bartolome Binaohan and Delia Estrellanes.
CONTRARY TO LAW. 1

On 9 September 1991, petitioners filed a motion with the Sandiganbayan for suspension of the
proceedings in Criminal Case No. 16936 on the ground that a prejudicial question exists in Civil
Case No. 9955 pending before the Regional Trial Court of Dumaguete City. 2
On 16 January 1992, the Regional Trial Court rendered a decision declaring null and void ab
initio the designations issued by the Department of Local Government to the private respondents as
sectoral representatives for having been done in violation of Section 146 (2) of B.P. Blg. 337,
otherwise known as the Local Government Code. 3
The trial court expounded thus:
The Supreme Court in the case of Johnny D. Supangan Jr. v. Luis T. Santos, et al.,
G.R. No. 84663, along with 7 companion cases of similar import, (G.R. Nos. 05012,
87601, 87602, 87792, 87935, 88072, and 90205) all promulgated on August 24,
1990, ruled that:
B.P. Blg. 337 explicitly required that before the President (or the
Secretary of the Department of Local Government) may appoint
members of the local legislative bodies to represent the Industrial and
Agricultural Labor Sectors, there must be a determination to be made
by the Sanggunian itself that the said sectors are of sufficient number
in the city or municipality to warrant representation after consultation
with associations and persons belonging to the sector concerned.
The Supreme Court further ruled
For that matter, the Implementing Rules and Regulations of the Local
Government Code even prescribe the time and manner by which
such determination is to be conducted by the Sanggunian.
Consequently, in cases where the Sanggunian concerned has not yet
determined that the Industrial and Agricultural Labor Sectors in their
particular city or municipality are of sufficient number to warrant
representation, there will absolutely be no basis for the
designation/appointments.
In the process of such inquiry as to the sufficiency in number of the sector concerned
to warrant representation, the Sanggunian is enjoined by law (B.P. Blg. 337) to
consult with associations and persons belonging to the sector concerned.
Consultation with the sector concerned is made a pre-requisite. This is so
considering that those who belong to the said sector are the ones primarily interested
in being represented in the Sanggunian. In the same aforecited case, the Supreme
Court considers such prior determination by the Sanggunian itself (not by any other
person or body) as a condition sine qua non to a valid appointment or designation.
Since in the present case, there was total absence of the required prior determination
by the Sangguniang Bayan of Jimalalud, this Court cannot help but declare the
designations of private defendants as sectoral representatives null and void.

This verdict is not without precedence. In several similar cases, the Supreme Court
invariably nullified the designations where the requirements of Sec. 146 (2), B.P. Blg.
337 were not complied with. Just to cite one case, the Supreme Court ruled:
There is no certification from the Sangguniang Bayan of Valenzuela
that the sectors concerned are of sufficient number to warrant
representation and there was no consultation whatsoever with the
associations and persons belonging to the Industrial and Agricultural
Labor Sectors. Therefore, the appointment of private respondents
Romeo F. Bularan and Rafael Cortez are null and void (Romeo
Llanado, et al. v. Hon. Luis Santos, et al., G.R. No. 86394, August 24,
1990). 4
Private respondents appealed the aforestated decision to the Court of Appeals, docketed as CAG.R. CV No. 36769, where the same is currently pending resolution.
Meanwhile, on 17 February 1992, respondent Sandiganbayan issued a resolution denying the
motion for suspension of proceedings filed by petitioners. Said respondent Sandiganbayan:
Despite the pendency of Civil Case No. 9955 of the Regional Trial Court of Negros
Oriental, it appears, nevertheless, that the private complainants have been rendering
services on the basis of their respective appointments as sectoral members of the
Sangguniang Bayan of the Municipality of Jimalalud, Negros Oriental; and that their
said appointments enjoy the presumption of regularity. Having rendered such
services, the private complainants are entitled to the salaries attached to their office.
Even assuming arguendo that the said Regional Trial Court shall later decide that the
said appointments of the private complainants are null and void, still the private
complainants are entitled to their salaries and compensation for service they have
actually rendered, for the reason that before such judicial declaration of nullity, the
private complainants are considered at least de facto public officers acting as such
on the basis of apparently valid appointments issued by competent authorities. In
other words, regardless of the decision that may be rendered in Civil Case
No. 9955, the private complainants are entitled to their withheld salaries for the
services they have actually rendered as sectoral representatives of the said
Sangguniang Bayan. Hence, the decision that may be rendered by the Regional Trial
Court in Civil Case No. 9955 would not be determinative of the innocence or guilt of
the accused.
WHEREFORE, the subject Petition for the Suspension of Proceedings in Virtue of
Prejudicial Question filed by the accused through counsel, is hereby DENIED for lack
of merit.
SO ORDERED. 5
Petitioners filed a motion for reconsideration of the aforementioned resolution in view of the decision
promulgated by the trial court nullifying the appointments of private respondents but it was, likewise,
denied in an order issued by respondent Sandiganbayan on 19 August 1992 on the justification that
the grounds stated in the said motion were a mere rehash of petitioners' original motion to hold the
case in abeyance. 6 The dispositive portion of its order reads as follows:

WHEREFORE, in view of the foregoing, the arraignment of the accused which was
scheduled today is cancelled. Mayor Reynaldo Tuanda, Hermenegildo Faburada,
Nicanor P. Agosto, Erenieta K. Mendoza, Hacubina V. Serillo and Iluminado
Estrellanes are, however, hereby ordered to show cause in writing within ten (10)
days from service hereof why they should not be cited for contempt of court for their
failure to appear in court today for arraignment.
In case of an adverse resolution on the motion to quash which is to be filed by the
counsel for the defense, set this case for arraignment, pre-trial and trial on January 4
& 5, 1993, on all dates the trial to start at 8:30 o'clock in the morning.
SO ORDERED. 7
On 19 February 1993, respondent Sandiganbayan issued an order holding consideration of all
incidents pending the issuance of an extended resolution. 8
No such resolution, however, was issued and in its assailed order dated 13 May 1992, respondent
Sandiganbayan set the arraignment of petitioners on 30 June 1993. The dispositive portion of the
order reads:
WHEREFORE, considering the absence of the accused from the scheduled hearing
today which We deem to be excusable, reset this case for arraignment on June 30,
1993 and for trial on the merits on June 30 and July 1 and 2, 1993, on all dates the
trial to start at 8:30 o'clock in the morning.
Give proper notice to the accused and principal counsel, Atty. Alfonso Briones.
Considering that the accused come all the way from Himalalud, Negros Oriental, no
postponement will be allowed.
SO ORDERED. 9
Hence, this special civil action for certiorari and prohibition where petitioners attribute to respondent
Sandiganbayan the following errors:
A. The Respondent Court committed grave abuse of discretion in denying petitioners'
motions for the suspension of the proceedings in Criminal Case No. 16936 in spite of
the pendency of a prejudicial issue before the Court of Appeals in CA-G.R. CV No.
36769;
B. The Respondent Court acted without or in excess of jurisdiction in refusing to
suspend the proceedings that would entail a retrial and rehearing by it of the basic
issue involved, i.e., the validity of the appointments of private respondents and their
entitlement to compensation which is already pending resolution by the Court of
Appeals in C.A. G.R. CV No. 36769; and
C. The Respondent Court committed grave abuse of discretion and/or acted without
or in excess of jurisdiction in effectively allowing petitioners to be prosecuted under

two alternative theories that private respondents are de jure and/or de facto officers
in violation of petitioners' right to due process. 10
In sum, the only issue in the case at bench is whether or not the legality or validity of private
respondents' designation as sectoral representatives which is pending resolution in CA-G.R. No.
36769 is a prejudicial question justifying suspension of the proceedings in the criminal case against
petitioners.
A prejudicial question is one that must be decided before any criminal prosecution may be instituted
or before it may proceed (see Art. 36, Civil Code) because a decision on that point is vital to the
eventual judgment in the criminal case. Thus, the resolution of the prejudicial question is a logical
antecedent of the issues involved in said criminal case. 11
A prejudicial question is defined as that which arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal.
The prejudicial question must be determinative of the case before the court but the jurisdiction to try
and resolve the question must be lodged in another court or tribunal. 12 It is a question based on a fact
distinct and separate from "the crime but so intimately connected with it that it determines the guilt or
innocence of the accused, and for it to suspend the criminal action, it must appear not only that said case
involves facts intimately related to those upon which the criminal prosecution would be based but also
that in the resolution of the issue or issues raised in the civil case, the guilt or innocence of the accused
would necessarily be determined. It comes into play generally in a situation where a civil action and a
criminal action are both pending and there exists in the former an issue which must be preemptively
resolved before the criminal action may proceed, because howsoever the issue raised in the civil action is
resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal
case." 13
The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. 14 It has
two essential elements:
(a) the civil action involves an issue similar or intimately related to the issue raised in
the criminal action; and
(b) the resolution of such issue determines whether or not the criminal action may
proceed. 15
Applying the foregoing principles to the case at bench, we find that the issue in the civil case, CAG.R. CV No. 36769, constitutes a valid prejudicial question to warrant suspension of the arraignment
and further proceedings in the criminal case against petitioners.
All the elements of a prejudicial question are clearly and unmistakably present in this case. There is
no doubt that the facts and issues involved in the civil action (No. 36769) and the criminal case (No.
16936) are closely related. The filing of the criminal case was premised on petitioners' alleged
partiality and evident bad faith in not paying private respondents' salaries and per diems as sectoral
representatives, while the civil action was instituted precisely to resolve whether or not the
designations of private respondents as sectoral representatives were made in accordance with law.
More importantly, ,the resolution of the civil case will certainly determine if there will still be any
reason to proceed with the criminal action.

Petitioners were criminally charged under the Anti-Graft & Corrupt Practices Act (RA 3019, sec, 3[e])
due to their refusal, allegedly in bad faith and with manifest partiality, to pay private respondents'
salaries as sectoral representatives. This refusal, however, was anchored on petitioners' assertion
that said designations were made in violation of the Local Government Code (B.P. Blg. 337) and
thus, were null and void. Therefore, should the Court of Appeals uphold the trial court's decision
declaring null and void private respondents' designations as sectoral representatives for failure to
comply with the provisions of the Local Government Code (B.P. Blg. 337, sec. 146[2]), the charges
against petitioners would no longer, so to speak, have a leg to stand on. Petitioners cannot be
accused of bad faith and partiality there being in the first place no obligation on their part to pay
private respondents' claims. Private respondents do not have any legal right to demand salaries, per
diems and other benefits. In other words, the Court of Appeals' resolution of the issues raised in the
civil action will ultimately determine whether or not there is basis to proceed with the criminal case.
Private respondents insist that even if their designations are nullified, they are entitled to
compensation for actual services rendered. 16 We disagree. As found by the trial court and as borne out
by the records, from the start, private respondents' designations as sectoral representatives have been
challenged by petitioners. They began with a petition filed with the Office of the President copies of which
were received by private respondents on 26 February 1989, barely eight (8) days after they took their
oath of office. 17 Hence, private respondents' claim that they have actually rendered services as sectoral
representatives has not been established.
Finally, we find unmeritorious respondent Sandiganbayan's thesis that even in the event that private
respondents' designations are finally declared invalid, they may still be considered de facto public
officers entitled to compensation for services actually rendered.
The conditions and elements of de facto officership are the following:
1) There must be a de jure office;
2) There must be color of right or general acquiescence by the public; and
3) There must be actual physical possession of the office in good faith. 18
One can qualify as a de facto officer only if all the aforestated elements are present. There can be
no de factoofficer where there is no de jure office, although there may be a de facto officer in a de
jure office. 19
WHEREFORE, the resolution dated 17 February 1992 and orders dated 19 August 1992 and 13
May 1993 of respondent Sandiganbayan in Criminal Case No. 16936 are hereby SET ASIDE.
Respondent Sandiganbayan is enjoined from proceeding with the arraignment and trial of petitioners
in Criminal Case No. 16936 pending final resolution of CA-G.R. CV No. 36769.
SO ORDERED.
G.R. No. 137567

June 20, 2000

MEYNARDO L. BELTRAN, petitioner,

vs.

PEOPLE OF THE PHILIPPINES, and HON. JUDGE FLORENTINO TUAZON, JR., being the
Judge of the RTC, Brach 139, Makati City, respondents.
BUENA, J.:
This petition for review, filed under Rule 45 of the 1997 Rules of Civil Procedure, seeks to review
and set aside the Order dated January 28, 1999 issued by Judge Florentino A. Tuazon, Jr. of the
Regional Trial Court of Makati City, Branch 139 in Special Civil Case No. 98-3056, entitled
"Meynardo Beltran vs. People of the Philippines and Hon. Judge Alden Cervantes of the
Metropolitan Trial Court of Makati City, Branch 61." The said Order denied petitioner's prayer for the
issuance of a writ of preliminary injunction to enjoin Judge Cervantes from proceeding with the trial
of Criminal Case No. 236176, a concubinage case against petitioner on the ground that the pending
petition for declaration of nullity of marriage filed by petitioner against his wife constitutes a
prejudicial question.
The antecedent facts of the case are undisputed:
Petitioner Meynardo Beltran and wife Charmaine E. Felix were married on June 16, 1973 at the
Immaculate Concepcion Parish Church in Cubao, Quezon City.1
On February 7, 1997, after twenty-four years of marriage and four children, 2 petitioner filed a petition
for nullity of marriage on the ground of psychological incapacity under Article 36 of the Family Code
before Branch 87 of the Regional Trial Court of Quezon City. The case was docketed as Civil Case
No. Q-97-30192.3
In her Answer to the said petition, petitioner's wife Charmaine Felix alleged that it was petitioner who
abandoned the conjugal home and lived with a certain woman named Milagros Salting. 4 Charmaine
subsequently filed a criminal complaint for concubinage5 under Article 334 of the Revised Penal
Code against petitioner and his paramour before the City Prosecutor's Office of Makati who, in a
Resolution dated September 16, 1997, found probable cause and ordered the filing of an
Information6 against them. The case, docketed as Criminal Case No. 236176, was filed before the
Metropolitan Trial Court of Makati City, Branch 61.
1awphi1

On March 20, 1998, petitioner, in order to forestall the issuance of a warrant for his arrest, filed a
Motion to Defer Proceedings Including the Issuance of the Warrant of Arrest in the criminal case.
Petitioner argued that the pendency of the civil case for declaration of nullity of his marriage posed a
prejudicial question to the determination of the criminal case. Judge Alden Vasquez Cervantes
denied the foregoing motion in the Order7dated August 31, 1998. Petitioner's motion for
reconsideration of the said Order of denial was likewise denied in an Order dated December 9,
1998.
In view of the denial of his motion to defer the proceedings in the concubinage case, petitioner went
to the Regional Trial Court of Makati City, Branch 139 on certiorari, questioning the Orders dated
August 31, 1998 and December 9, 1998 issued by Judge Cervantes and praying for the issuance of
a writ of preliminary injunction.8 In an Order9 dated January 28, 1999, the Regional Trial Court of
Makati denied the petition for certiorari. Said Court subsequently issued another Order 10 dated
February 23, 1999, denying his motion for reconsideration of the dismissal of his petition.
Undaunted, petitioner filed the instant petition for review.

Petitioner contends that the pendency of the petition for declaration of nullity of his marriage based
on psychological incapacity under Article 36 of the Family Code is a prejudicial question that should
merit the suspension of the criminal case for concubinage filed against him by his wife.
Petitioner also contends that there is a possibility that two conflicting decisions might result from the
civil case for annulment of marriage and the criminal case for concubinage. In the civil case, the trial
court might declare the marriage as valid by dismissing petitioner's complaint but in the criminal
case, the trial court might acquit petitioner because the evidence shows that his marriage is void on
ground of psychological incapacity. Petitioner submits that the possible conflict of the courts' ruling
regarding petitioner's marriage can be avoided, if the criminal case will be suspended, until the court
rules on the validity of marriage; that if petitioner's marriage is declared void by reason of
psychological incapacity then by reason of the arguments submitted in the subject petition, his
marriage has never existed; and that, accordingly, petitioner could not be convicted in the criminal
case because he was never before a married man.
Petitioner's contentions are untenable.
The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has
two essential elements: (a) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and (b) the resolution of such issue determines whether or not the
criminal action may proceed. 11
The pendency of the case for declaration of nullity of petitioner's marriage is not a prejudicial
question to the concubinage case. For a civil case to be considered prejudicial to a criminal action as
to cause the suspension of the latter pending the final determination of the civil case, it must appear
not only that the said civil case involves the same facts upon which the criminal prosecution would
be based, but also that in the resolution of the issue or issues raised in the aforesaid civil action, the
guilt or innocence of the accused would necessarily be determined.
Art. 40 of the Family Code provides:
The absolute nullity of a previous marriage may be invoked for purposes of remarriage on
the basis solely of a final judgment declaring such previous marriage void.
In Domingo vs. Court of Appeals, 12 this Court ruled that the import of said provision is that for
purposes of remarriage, the only legally acceptable basis for declaring a previous marriage an
absolute nullity is a final judgment declaring such previous marriage void, whereas, for purposes of
other than remarriage, other evidence is acceptable. The pertinent portions of said Decision read:
. . . Undoubtedly, one can conceive of other instances where a party might well invoke the
absolute nullity of a previous marriage for purposes other than remarriage, such as in case
of an action for liquidation, partition, distribution and separation of property between the
erstwhile spouses, as well as an action for the custody and support of their common children
and the delivery of the latters' presumptive legitimes. In such cases, evidence needs must be
adduced, testimonial or documentary, to prove the existence of grounds rendering such a
previous marriage an absolute nullity. These needs not be limited solely to an earlier final
judgment of a court declaring such previous marriage void.

So that in a case for concubinage, the accused, like the herein petitioner need not present a final
judgment declaring his marriage void for he can adduce evidence in the criminal case of the nullity of
his marriage other than proof of a final judgment declaring his marriage void.
With regard to petitioner's argument that he could be acquitted of the charge of concubinage should
his marriage be declared null and void, suffice it to state that even a subsequent pronouncement that
his marriage is void from the beginning is not a defense.
Analogous to this case is that of Landicho vs. Relova 1 cited in Donato vs. Luna 14 where this Court
held that:
. . . Assuming that the first marriage was null and void on the ground alleged by petitioner,
that fact would not be material to the outcome of the criminal case. Parties to the marriage
should not be permitted to judge for themselves its nullity, for the same must be submitted to
the judgment of the competent courts and only when the nullity of the marriage is so
declared can it be held as void, and so long as there is no such declaration the presumption
is that the marriage exists. Therefore, he who contracts a second marriage before the judicial
declaration of nullity of the first marriage assumes the risk of being prosecuted for bigamy.
Thus, in the case at bar it must also be held that parties to the marriage should not be permitted to
judge for themselves its nullity, for the same must be submitted to the judgment of the competent
courts and only when the nullity of the marriage is so declared can it be held as void, and so long as
there is no such declaration the presumption is that the marriage exists for all intents and purposes.
Therefore, he who cohabits with a woman not his wife before the judicial declaration of nullity of the
marriage assumes the risk of being prosecuted for concubinage. The lower court therefore, has not
erred in affirming the Orders of the judge of the Metropolitan Trial Court ruling that pendency of a
civil action for nullity of marriage does not pose a prejudicial question in a criminal case for
concubinage.
WHEREFORE, for lack of merit, the instant petition is DISMISSED.
SO ORDERED
G.R. No. 142362

May 3, 2006

PHILIPPINE AGILA SATELLITE INC. and MICHAELC. U. DE GUZMAN, Complainants,

vs.
JOSEFINA TRINIDAD-LICHAUCO Undersecretary for Communications, Department of
Transportation and Communication (DOTC), Respondents.
DECISION
TINGA, J.:
This Petition for Review on Certiorari seeks the reversal of the Decision 1 dated 21 February 2000 of
the Court of Appeals in C.A. G.R. No. SP 49422. The assailed Decision authorized the dismissal of a
civil complaint against respondent Josefina Trinidad-Lichauco (Lichauco), former Undersecretary for

Communications of the Department of Transportation and Communication (DOTC), on the premise

that the complaint constituted a suit against the State.
A brief rundown of the relevant facts is in order.
Petitioner Philippine Agila Satellite Inc. (PASI) is a duly organized corporation, whose President and
Chief Executive Officer is co-petitioner Michael C.U. De Guzman. PASI was established by a
consortium of private telecommunications carriers2 which in 1994 had entered into a Memorandum
of Understanding (MOU) with the DOTC, through its then Secretary Jesus Garcia, concerning the
planned launch of a Philippine-owned satellite into outer space. Under the MOU, the launch of the
satellite was to be an endeavor of the private sector, and the satellite itself to be owned by the
Filipino-owned consortium (subsequently organized as PASI). 3 The consortium was to grant the
Philippine government one (1) transponder free of charge for the government's exclusive use for
non-commercial purpose, as well as the right of first refusal to another one (1) transponder in the
Philippine satellite, if available.4 The Philippine government, through the DOTC, was tasked under
the MOU to secure from the International Telecommunication Union the required orbital slot(s) and
frequency assignment(s) for the Philippine satellite.
PASI itself was organized by the consortium in 1996. The government, together with PASI,
coordinated through the International Telecommunication Union two (2) orbital slots, designated as
161 East Longitude and 153 East Longitude, for Philippine satellites. On 28 June 1996, PASI wrote
then DOTC Secretary Amado S. Lagdameo, Jr., seeking for official Philippine government
confirmation on the assignment of the two aforementioned Philippine orbital slots to PASI for its
satellites, which PASI had designated as the Agila satellites.5 Secretary Lagdameo, Jr. replied in a
letter dated 3 July 1996, confirming "the Philippine Government's assignment of Philippine orbital
slots 161E and 153E to [PASI] for its [Agila] satellites."6
PASI avers that after having secured the confirmation from the Philippine government, it proceeded
with preparations for the launching, operation and management of its satellites, including the
availment of loans, the increase in its capital, negotiation with business partners, and an initial
payment of US$3.5 Million to the French satellite manufacturer. However, respondent Lichauco, then
DOTC Undersecretary for Communications, allegedly "embarked on a crusade to malign the name
of [Michael de Guzman] and sabotage the business of PASI." Lichauco's purported efforts against
PASI culminated allegedly in her offering orbital slot 153 East Longitude
for bidding to other parties sometime in December 1997, despite the prior assignment to PASI of the
said slot.7 It was later claimed by PASI that Lichauco subsequently awarded the orbital slot to an
entity whose indentity was unknown to PASI.8
Aggrieved by Lichauco's actions, PASI and De Guzman instituted on 23 January 1998 a civil
complaint against Lichauco, by then the Acting Secretary of the DOTC, and the "Unknown Awardee"
who was to be the recipient of orbital slot 153 East Longitude. The complaint, alleging three (3)
causes of action, was for injunction, declaration of nullity of award, and damages. The first cause of
action, for injunction, sought to establish that the award of orbital slot 153 East Longitude should be
enjoined since the DOTC had previously assigned the same orbital slot to PASI. The second cause
of action, for declaration of nullity of award, averred that the award to the unknown bidder is null and
void, as it was rendered by Lichauco beyond her authority.9

The third cause of action, for damages, imputed several acts to Lichauco as part of her alleged
"crusade" to malign the name of plaintiff [D]e Guzman and sabotage the business of [PASI]:
12. xxx
(a) On 4 December 1996, in a meeting with the members of the Board of Directors of plaintiff
corporation, defendant Lichauco then uttered disparaging and defamatory comments against
plaintiff de Guzman. These defamatory remarks triggered efforts from within the plaintiff
corporation aimed at ousting plaintiff de Guzman from his position.
(b) Defendant Lichauco, then an undersecretary of DOTC, wrote Mr. Jesli Lapuz on 5
December 1996 (barely two days after plaintiff de Guzman wrote him) to deny that the DOTC
has assigned the two (2) Philippine orbital slots to plaintiff corporation. Defendant Lichauco
falsely asserted that only orbital slot 161 E was assigned to plaintiff, orbital slot 153 E was
not.
In the same letter, defendant Lichauco branded as FALSE plaintiff de Guzman's claim that
"Agila" is a registered corporate name of plaintiff corporation.
A copy of the letter is attached as Annex E.
(c) Not contented, defendant Lichauco, again for reasons known only to her, and with malice
aforethought, made defamatory remarks against plaintiffs during a telecommunications forum
held in Makati City sometime in October 1997 in the presence of public officials and business
executives.
(d) Defendant Lichauco did not spare plaintiff corporation from her unprovoked defamation.
Defendant Lichauco arrogantly said that she had asked President Fidel V. Ramos to sue
plaintiff Michael de Guzman. With the same degree of arrogance she threatened plaintiff
corporation not to use the name "Agila", otherwise she would fight plaintiff corporation and
would make sure that the name of Agila would never be given back to plaintiff corporation.
(e) To top it all, defendant Lichauco without basis and with evident bad faith, said that plaintiff
corporation will never pay its contractors.
(f) In December 1997, defendant Lichauco delivered the coup de' grace. Again, acting
unilaterally, without prior notice to plaintiff corporation and in gross violation of DOTC's earlier
assignment to plaintiff corporation of orbital slot 153 E, defendant Lichauco offered said slot
to interested applicants. A copy of the notice of offer is attached as Annex F.
13. Plaintiffs learned of defendant Lichauco's acts after orbital slot 153 E was offered for bidding. To
plaintiff coproration's knowledge, the orbital slot was eventually awarded to defendant Unknown
Awardee.
x x x x10
The complaint alleged that since Lichauco's act of offering and awarding orbital slot 153 East
Longitude was patently illegal and violative of DOTC's prior commitment to PASI, Lichauco should

be enjoined from performing any acts and entering into or executing any agreement or arrangement
of whatever nature in connection with the said orbital slot. The complaint also averred that the
purported award of the orbital slot to the "Unknown Awardee was illegal, and thus should be
declared null and void. Finally, the complaint alleged a cause of action for damages against
Lichauco, cast in the following manner:
xxxx
21. Defendant Lichauco attacked the good name and reputation of plaintiffs.
22. She willfully caused damage to plaintiffs by orchestrating the above-described acts which are
contrary to law; morals and basic norms of good faith.
23. She interefered with and violated plaintiff corporation's contract with DOTC by offering and
awarding orbital slot 153 E to defendant Unknown Awardee.
24. Because of defendant Lichauco's reprehensible acts, plaintiffs suffered actual damages of at
least P10 million each, for all of which defendant Lichauco should be held liable to pay.
25. By reason of defendant Lichauco's illegal and malicious acts, plaintiff corporation's business
name and goodwill was tarnished, for which plaintiff corporation should be indemnified by way of
moral damages in the amount of at least P10 million.
26. For the same reasons, plaintiff de Guzman suffered and continue to suffer extreme
mental anguish, serious anxiety, wounded feelings, moral shock and besmirched reputation,
for all of which plaintiff de Guzman should be indemnified in the amount of at least P10
million.
27. Defendant Lichauco should also be sanctioned, as a deterrent for public good, to pay each
plaintiff exemplary damages in the amount of at least P5 million.
28. In order to protect and enforce their rights, plaintiffs were compelled to institute this suit, engage
the services of counsel and incur litigation expenses, for all of which plaintiffs should be indemnified
in the amount of at least P500 Thousand each.11
xxxx
In sum, petitioners sought the following reliefs for the three (3) causes of action:
xxxx
3. After trial of the issues, render judgment as follows:
[a] On the first cause of action, making permanent the writ of preliminary injunction;
[b] On the second cause of action, declaring the offer and award of orbital slot 153 E to
defendant Unknown Awardee null and void.

[c] On the third cause of action, directing defendant Lichauco to pay the following sums:
i. P10 million each to plaintiffs as actual damages;
ii. P10 million to plaintiff corporation as moral damages;
iii. P10 million to plaintiff de Guzman as moral damages;
iv. P5 million each to plaintiffs as exemplary damages;
v. P500 Thousand each to plaintiffs as attorney's fees and litigation expenses.
x x x x12
The complaint was filed before the Regional Trial Court (RTC) of Mandaluyong City, and
subsequently raffled to Branch 214. On 2 February 1998, the RTC issued a temporary restraining
order against Lichauco, who received the summons together with the complaint on 28 January 1998.
Lichauco failed to file an answer within the reglementary period, but eight (8) days after the lapse
thereof, she filed a Manifestation and Motion asking for a new five (5)-day period, or until 25
February 1998, to file a responsive pleading to the complaint. However, she filed instead a Motion to
Admit with attached Motion to Dismiss on 27 February 1998. She rooted her prayer for the dismissal
of the complaint primarily on the grounds that the suit is a suit against the State which may not be
sued without its consent; that the complaint stated no cause of action; and that the petitioners had
failed to exhaust administrative remedies by failing to seek recourse with the Office of the President.
In an order13 dated 14 August 1998, the RTC denied the motion to dismiss. It characterized the
defense of state immunity as "at very least a contentious issue which can not be resolved by mere
allegations in the pleadings but which can be best threshed out in a litig[i]ous forum where parties
are accorded enormous (sic) opportunity to argue for the ascertainment of whether the act
complained of are indeed within the parameters and prerogatives of the authority exercising the
same."14 The RTC also noted that the allegations in the complaint regarding the ultimate facts
sufficiently presented an ultra vires act of Lichauco, and that she was being sued in her personal
capacity. As to the argument pertaining to the non-exhaustion of administrative remedies, the RTC
noted that the principle is not an inflexible rule, and may be dispensed with when its application
would cause great and irreparable damage or when it would not constitute a plain, speedy and
adequate remedy.15
Lichauco assailed the RTC order through a Petition for Certiorari under Rule 65 before the Court of
Appeals, which subsequently nullified the RTC order in the Decision now assailed before us. The
Court of Appeals sustained the contention that the complaint is a suit against the State with the
following ratiocination:
The suit is to the mind of this court a suit against the state.

1avvphil.net

The notice of offer signed by herein petitioner allegedly tainted with bad faith was done in the
exercise of and in pursuance of an official duty. Her duties are as follows:
SEC. 10. Powers and Duties of the Undersecretary. The Undersecretary shall:

(1) Advise and assist the Secretary in the formulation and implementation of department
objectives and policies;
(2) Oversee all the operational activities of the department for which he shall be responsible
to the Secretary;
(3) Coordinate the programs and projects of the department and be responsible for its
economical, efficient and effective administration:
xxxxxxxxx
It is apparent from the above enumeration that the petitioner is directly under and answerable to the
DOTC Secretary. We can therefore conclude that her official acts such as the said "notice of offer"
was with the blessing and prior approval of the DOTC Secretary himself.
Being an official act, it is also protected by the presumption that the same was performed in good
faith and in the regular performance of official duty.
"Acts in Line of Duty or under Color of Authority. - As a rule, a public officer, whether judicial,
quasi-judicial, or executive, is not personally liable to one injured in consequence of an act
performed within the scope of his official authority, and in the line of his official duty. In order that acts
may be done within the scope of official authority, it is not necessary that they be prescribed by
statute, or even that they be specifically directed or requested by a superior officer, but it is sufficient
if they are done by an officer in relation to matters committed by law to his control or supervision, or
that they have more or less connection with such matters, or that they are governed by a lawful
requirement of the department under whose authority the officer is acting. Under this principle, state
building commissioners who, in obedience to a stature, discharge one who has been employed to
construct a state building, take possession of the work, and place it in the hands of another
contractor, are not liable to the former contractor in damages, since in so doing they are merely
acting in the line of their duty. An officer is not personally responsible for the necessary and
unavoidable destruction of goods stored in buildings, when such buildings were destroyed by him in
the lawful performance of a public duty imposed on him by a valid and constitutional statute."
xxxxxxxxx
Error or Mistake in Exercise of Authority. - Where an officer is invested with discretion and is
empowered to exercise his judgment in matters brought before him he is sometimes called a quasijudicial officer, and when so acting he is usually given immunity from liability to persons who may be
injured as the result of an erroneous or mistaken decision, however, erroneous judgment may be,
provided the acts complained of are done within the scope of the officer's authority, and without
willfulness, malice, or corruption." (43 Am. Jur., pp. 85-86).
In Sanders vs. Veridiano[16], the Supreme Court held:
"Given the official character of the above-described letters, we have to conclude that the petitioners
were, legally speaking, being sued as officers of the United States government. As they have acted
on behalf of that government, and within the scope of their authority, it is that government and not
the petitioners personally, that is responsible for their acts. Assuming that the trial can proceed and it
is proved that the claimants have a right to the payment of damages, such award will have to be

satisfied not by the petitioners in their personal capacities but by the United States government as
their principal. This will require that government, viz.: the appropriation of the necessary amount to
cover the damages awarded, thus making the action a suit against that government without its
consent.
There should be no question by now that such complaint cannot prosper unless the government
sought to be held ultimately liable has given its consent to be sued. So we have ruled not only in
Baer but in many other decisions where we upheld the doctrine of state immunity as applicable not
only to our own government but also to foreign States sought to be subjected to the jurisdiction of
our courts.
xxxxxxxxx
The Court finds that, even under the law of public officers, the acts of the petitioners are protected by
the presumption of good faith, which has not been overturned by the private respondents. Even
mistakes concededly committed by such public officers are not actionable as long as it is not shown
that they were motivated by malice or gross negligence amounting to bad faith. This too is wellsettled."17
Preliminarily, we discuss the procedural grounds cited by petitioners which they assert are sufficient
to have caused the dismissal of Lichauco's petition before the Court of Appeals. Petitioners claim
that contrary to Section 1, Rule 65 of the 1997 Rules of Civil Procedure, Lichauco failed to attach all
pleadings and documents relevant to her petition, and that those that were attached were merely
"duplicate original copies." Lichauco counters that for the viability of her petition for certiorari, all that
she needed to attach were her motion to dismiss, the RTC orders acting on such motion, her motion
for reconsideration of the denial of her motion to dismiss, and petitioners' opposition to said motion
for reconsideration. She claims that only these motions and submission were relevant to the
resolution of her petition.18
In her comment, Lichaucho claims that she did not have to attach the complaint to the copy of the
petition she sent to the petitioners herein, since the latter obviously retained the original copy of the
complaint they filed.19However, her petition before the appellate court does not indicate that the
same complaint was included as an attachment, and indeed, there is a curious absence of any
averment on Lichuaco's part that she indeed attached the said complaint to her petition. 20 Certainly,
in a petition for certiorari assailing the denial of a motion to dismiss a complaint, the very complaint
itself is a document relevant and pertinent to the special civil action. It should be remembered that
unlike in an ordinary appeal that is given due course, 21 the case record is not automatically elevated
to the court exercising jurisdiction over a special civil action for certiorari; hence there is an even
more impelling need to attach all pleadings and documents to the special civil action, as mandated
under Section 1, Rule 65 of the 1997 Rules of Civil Procedure. After all, how could the court a
quo properly ascertain whether or not the motion to dismiss itself should have been granted if it did
not have a copy of the complaint sought to be dismissed itself.
Nonetheless, the requirement to attach such relevant pleadings under Section 1, Rule 65 is read in
relation to Section 3, Rule 46, which states that the failure of the petitioner to comply with any of the
documentary requirements, such as the attachment of such relevant pleadings, "shall be sufficient
ground for the dismissal of the petition." The procedural rule accords sufficient discretion to the court
hearing the special civil action whether or not to dismiss the petition outright for failure to comply with
said requirement. If the court does dismiss the petition on that ground, the dismissal would be

justifiable under Section 3, Rule 46, and generally such action of the court cannot be assailed as
constituting either grave abuse of discretion or reversible error of law. If the court, on the other hand,
takes cognizance of the petition despite such lapses, the phrasing of Section 3, Rule 46 sufficiently
justifies such adjudicative recourse. Indeed, the ultimate logic behind rules of procedure being the
promotion of the objective of securing a just, speedy and inexpensive disposition of every action and
proceeding,22 the higher interests of justice may at times sufficiently warrant the allowance of the
petition for certiorari despite such lapses, especially if they are nonetheless correctible through
subsequent submissions.
In any event, the Court is willing to overlook Lichauco's failure to attach the complaint in her petition
for certiorari before the Court of Appeals, an oversight sadly ignored by the appellate court. There
are weighty issues at hand relating to the doctrine of state immunity from suit and the requisites of a
motion to dismiss.
There is a connective issue between these two aspects in that if the State is sued without its
consent, the corresponding suit must be dismissed. At times, it would be teasingly obvious, even
from the moment of the filing of the complaint, that the suit is one against the State. A cursory
examination of the caption of the complaint can sometimes betray such proscribed intent, as when
the suit is directly initiated against the Republic of the Philippines, any foreign government, or an
unincorporated government agency as the named respondents. In such cases, obviously there is
need for immediate caution, although if it is somehow established that those respondents had given
their consent to be sued, the suit may nonetheless prosper.
The present action was denominated against Lichauco and the unknown awardee, Lichauco was
identified in the complaint as "acting Secretary of the [DOTC]."23 The hornbook rule is that a suit for
acts done in the performance of official functions against an officer of the government by a private
citizen which would result in a charge against or financial liability to the government must be
regarded as a suit against the State itself, although it has not been formally impleaded. 24 However,
government immunity from suit will not shield the public official being sued if the government no
longer has an interest to protect in the outcome of a suit; or if the liability of the officer is personal
because it arises from a tortious act in the performance of his/her duties.
Petitioner insists that Lichauco is being sued for her acts committed in excess of her authority, ultra
vires innature, and tortious in character. The Court of Appeals responded that such acts fell within
Lichauco's official duties as DOTC Undersecretary, thus enjoying the presumption that they were
performed in good faith and in the regular performance of official duty. This rationale is pure
sophistry and must be rejected outright.
We do not doubt the existence of the presumptions of "good faith" or "regular performance of official
duty", yet these presumptions are disputable25 and may be contradicted and overcome by other
evidence.26 Many civil actions are oriented towards overcoming any number of these presumptions,
and a cause of action can certainly be geared towards such effect. The very purpose of trial is to
allow a party to present evidence overcome the disputable presumptions involved. Otherwise, if trial
is deemed irrelevant or unnecessary, owing to the perceived indisputability of the presumptions, the
judicial exercise would be relegated to a mere ascertainment of what presumptions apply in a given
case, nothing more. Consequently, the entire Rules of Court is rendered as excess verbiage, save
perhaps for the provisions laying down the legal presumptions.

If this reasoning of the Court of Appeals were ever adopted as a jurisprudential rule, no public officer
could ever be sued for acts executed beyond their official functions or authority, or for tortious
conduct or behavior, since such acts would "enjoy the presumption of good faith and in the regular
performance of official duty". Indeed, few civil actions of any nature would ever reach the trial stage,
if a case can be adjudicated by a mere determination from the complaint or answer as to which legal
presumptions are applicable. For example, the presumption that a person is innocent of a wrong is a
disputable presumption on the same level as that of the regular performance of official duty.27 A civil
complaint for damages necessarily alleges that the defendant committed a wrongful act or omission
that would serve as basis for the award of damages. With the rationale of the Court of Appeals, such
complaint can be dismissed upon a motion to dismiss solely on the ground that the presumption is
that a person is innocent of a wrong.
So obviously, the Decision of the Court of Appeals cannot receive the imprimatur of this Court. Still,
the question of whether Lichauco may validly invoke state immunity from suit to secure the outright
dismissal of petitioners' complaint warrants closer examination.
As earlier noted, the complaint alleges three (3) causes of action against Lichauco: one for injunction
against her performing any act in relation to orbital slot 153 East Longitude; one for declaration of
nullity of award, seeking to nullify the alleged award of orbital slot 153 East Longitude; and one for
damages against Lichauco herself. Evidently, the first two causes of action stem from Lichauco's act
of offering orbital slot 153 East Longitude for bidding, through the Notice of Offer which was
attached to the complaint.
In her Motion to Dismiss, Lichauco asserts that she is being sued for issuing the aforementioned
Notice of Offer, which fell within her official functions as DOTC Undersecretary for Communications.
She claims that it was Secretary Lagdameo who authorized her to offer orbital slot 153 East
Longitude for bidding, and she thus acted well within the scope of her authority to advise and assist
the DOTC Secretary in the formulation and implementation of department objectives and policies.
The Notice of Offer cites Department Circular 97-01, signed by then DOTC Secretary Arturo Enrile,
as authority for it. The Court has examined the aforementioned Department Circular, issued on 17
October 1997, which establishes the "Guidelines on the Procurement of Orbital Slots and Frequency
Registration of Philippine Satellites". Therein, the DOTC is mandated "to conduct a bidding process
in case there are competing applications for any one of the assigned or applied-for-orbital slots" 28.
Further, the Department Circular states that "the DOTC shall publish in three newspapers of general
circulation a notice of offer for the government assigned, initiated and applied for orbital slots." 29
Thus, insofar as the first two causes of action are concerned, Lichauco may have a point when she
asserts that they were based on acts which she performed in her capacity as DOTC Undersecretary.
But does this necessarily mean that these two causes of action may thus be dismissed on the basis
of state immunity of suit?
As stated earlier, it is when the acts done in the performance of official functions by an officer of the
government will result in a charge against or financial liability to the government that the complaint
must be regarded as a suit against the State itself. However, the distinction must also be raised
between where the government official concerned performs an act in his/her official and jurisdictional
capacity and where he performs an act that constitutes grave abuse of discretion tantamount to lack
of jurisdiction. In the latter case, the Constitution itself assures the availability of judicial review, and it
is the official concerned who should be impleaded as the proper party- defendant or respondent.

On this point, our ruling in J.M. Tuazon & Co. v. Land Tenure Administration 30 is material. Petitioners
therein had filed a special civil action for prohibition to nullify Republic Act No. 2616, or law that
directed the expropriation of the Tatalon Estate in Quezon City. Impleaded as respondents were the
officials and government agency tasked to undertake such expropriation. The respondents alleged
that the petition for prohibition was actually a suit against the State without its consent. The Court,
through then Associate Justice (later Chief Justice) Enrique Fernando, debunked the argument,
ruling instead that the petition was within the ambit of judicial review:
[T]he power of judicial review is granted, if not expressly, at least by clear implication from the
relevant provisions of the Constitution. This power may be exercised when the party adversely
affected by either a legislative or executive act, or a municipal ordinance for that matter, files the
appropriate suit to test its validity. The special civil action of prohibition has been relied upon
precisely to restrain the enforcement of what is alleged to be an unconstitutional statute. As it is a
fundamental postulate that the Constitution as the supreme law is binding on all governmental
agencies, failure to observe the limitations found therein furnishes a sufficient ground for a
declaration of nullity of the government measure challenged. The argument then that the
government is the adverse party and that, therefore, must consent to its being sued certainly is far
from persuasive. x x x x31
The Court further noted that it was well-settled for the purpose of obtaining a judicial declaration of
nullity, "it is enough if the respondents or defendants named be the government officials who would
give operation and effect to official action allegedly tainted with unconstitutionality." 32
Unlike in J.M. Tuason, the case at bar does not seek to nullify an unconstitutional law or measure.
However, the first two causes of action do sufficiently impute grave abuse of discretion against
Lichauco in her official capacity. Since judicial review of acts alleged to have been tainted with grave
abuse of discretion is guaranteed by the Constitution, it necessarily follows in such instances that it
is the official concerned who should be impleaded as defendant or respondent in the appropriate
suit.
Moreover, if the suit had been directed against Lichauco alone, and in her personal capacity, yet it
sought, as it now does, the nullification of the Notice of Offer or the awards thereon, such remedy
could not avail even if granted. Lichauco, in her personal capacity, cannot be directed to set aside
the Notice of Offer, the award of the bid, or to issue a new award herself. It is only because Lichauco
was sued in her official capacity as the DOTC Undersecretary that she, or her successors in office,
could be judicially compelled to act in such fashion.
As to the first two (2) causes of action, the Court rules that the defense of state immunity from suit
do not apply since said causes of action cannot be properly considered as suits against the State in
constitutional contemplation. These causes of action do not seek to impose a charge or financial
liability against the State, but merely the nullification of state action. The prayers attached to these
two causes of action are for the revocation of the Notice of Bid and the nullification of the purported
award, nothing more. Had it been so that petitioner additionally sought damages in relation to said
causes of action, the suit would have been considered as one against the State. Had the petitioner
impleaded the DOTC itself, an unincorporated government agency, and not Lichauco herself, the
suit would have been considered as one against the State. But neither circumstance obtains in this
case.

Parenthetically, it may be noted that at the time of the filing of the complaint, Lichauco herself was
already the acting head of the DOTC, owing to the sudden death of then Secretary Enrile a few days
before. At that stage, any suit seeking to nullify the Notice of Bid and the alleged award to the
"Unknown Bidder" should have properly denominated Lichauco as the respondent, and not the
DOTC.
Nonetheless, as to the first two causes of action, there was a viable ground to dismiss the complaint:
the non-exhaustion of administrative remedies. Indeed, such ground was alleged by Lichauco in her
Motion to Dismiss. Yet the principle of non-exhaustion of administrative remedies admits to several
exceptions. In its Order denying the motion to dismiss the complaint, the RTC adequately dispensed
with the objection, applying the established exceptions to the rule of non-exhaustion of
administrative remedies. To wit:
Turning to the matter pertaining to non-exhaustion of administrative remedies, it is fundamental that
this principle is not an inflexible rule. It yields to many accepted exceptions. (Rocamora vs. RTC Cebu, G.R. No. 65307). As in this case, this principle can be dispensed with when its application
would cause great and irreparable damage and when it does not provide a plain, speedy and
adequate remedy.
When the subject orbital slot 153 E was bidded out to other applicants, the damage and injury
plaintiffs stand to suffer was clear, present, and substantiated that this Court was impelled to provide
urgent needed measure such as the issuance of writ of injunction against the public defendant.
Indeed, under the circumstances then obtaining it was impractical for the plaintiffs to first proceed to
the administrative official concerned before taking court action. 33
A different set of principles applies to the third cause of action, anchored as it is on alleged acts that
are tortious in character or otherwise beyond the scope of Lichauco's official duties. The complaint
alleges that Lichauco uttered several disparaging and defamatory remarks against petitioners and
made false assertions against them in her letter to the Land Bank President.
The veracity of those allegations is of course presented at the trial to be determined on the basis of
the evidence. However, if proven, they would establish liability on the part of Lichauco that is not
shielded by the doctrine of state immunity from suit. The doctrine, as summarized in Shauf v. Court
of Appeals :34
While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in the
discharge of their duties. The rule is that if the judgment against such officials will require the state
itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount
needed to pay the damages awarded against them, the suit must be regarded as against the state
itself although it has not been formally impleaded. It must be noted, however, that the rule is not so
all-encompassing as to be applicable under all circumstances.
It is a different matter where the public official is made to account in his capacity as such for
acts contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice
Zaldivar in Director of the Bureau of Telecommunications, et al. vs. Aligaen, etc., et al.
'Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of
government officials or officers are not acts of the State, and an action against the officials or
officers by one whose rights have been invaded or violated by such acts, for the protection of

his rights, is not a suit against the State within the rule of immunity of the State from suit. In
the same tenor, it has been said that an action at law or suit in equity against a State officer or the
director of a State department on the ground that, while claiming to act for the State, he violates or
invades the personal and property rights or the plaintiff, under an unconstitutional act or under an
assumption of authority which he does not have, is not a suit against the State within the
constitutional provision that the State may not be sued without its consent.' The rationale for this
ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an
injustice.35
The doctrine poses no controversy if after trial on the merits, it is established that the public official
concerned had committed illegal or tortious acts against the plaintiff. How does it apply in relation to
a motion to dismiss on the ground of state immunity from suit, necessarily lodged before trial on the
merits?
Our ruling in United States of America v. Reyes36 warrants due consideration. The Court therein,
through then Associate Justice (later Chief Justice) Hilario G. Davide, Jr., ruled that a motion to
dismiss averring immunity from suit of a State and its functionaries was actually grounded on the
specific ground for dismissal of the lack of cause of action, for even assuming that the defendants
had committed the injurious acts complained of, "no action may be maintained thereon, because of
the principle of state immunity."37 Pertinently, the Court noted that "a motion to dismiss on the ground
of failure to state a cause of action hypothetically admits the truth of the allegations in the complaint."
Thus, Lichauco, in alleging in her Motion to Dismiss that she is shielded by the State's immunity from
suit, to hypothetically admitted the truth of the allegations in the complaint. Such hypothetical
admission has to be deemed a concession on her part that she had performed the tortious or
damaging acts against the petitioners, which if true, would hold her liable for damages.
Of course, Lichauco could very well raise the defense of state immunity from suit in regard to the
third cause of action with the assertion that the acts complained of constituting said cause of action
fell within her official functions and were not tortuous in character. Still, to establish such assertions
of fact, a full-blown trial on the merits would be necessary, as would the case be if Lichauco raised
the defense that she did not commit these acts complained of. Certainly, these defenses cannot be
accorded merit before trial, factual as they are in character.
All told, contrary to the ruling of the Court of Appeals, we find no grave abuse of discretion on the
part of the RTC in denying Lichauco's Motion to Dismiss.
WHEREFORE, the PETITION is GRANTED. The Decision of the Court of Appeals dated 21
February 2000 is SET ASIDE and the Order dated 14 August 1998 of the Regional Trial Court of
Mandaluyong City is REINSTATED. The Regional Trial Court is ordered to try and decide the case
on the merits with deliberate dispatch. No costs.
SO ORDERED.
G.R. No. 159186

June 5, 2009

JESSE Y. YAP, Petitioner,

vs.
HON. MONICO G. CABALES, Presiding Judge, Regional Trial Court, Branch 35, General

Santos City; MUNICIPAL TRIAL COURT, Branch 1, General Santos City; COURT OF APPEALS,
PEOPLE OF THE PHILIPPINES, JOVITA DIMALANTA and MERGYL MIRABUENO, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court with prayer for the
issuance of a writ of preliminary injunction and/or issuance of status quo order seeking to annul and
set aside the Resolution1 of the Court of Appeals (CA) dated July 17, 2003 denying petitioner's
motion for reconsideration of the Decision2 dated April 30, 2003 in CA-G.R. SP No. 68250.
The facts of the case are as follows:
Petitioner Jesse Y. Yap and his spouse Bessie Yap are engaged in the real estate business through
their company Primetown Property Group.
Sometime in 1996, petitioner purchased several real properties from a certain Evelyn Te (Evelyn). In
consideration of said purchases, petitioner issued several Bank of the Philippine Islands (BPI)
postdated checks to Evelyn. Thereafter, spouses Orlando and Mergyl Mirabueno and spouses
Charlie and Jovita Dimalanta, rediscounted the checks from Evelyn.
In the beginning, the first few checks were honored by the bank, but in the early part of 1997, when
the remaining checks were deposited with the drawee bank, they were dishonored for the reason
that the "Account is Closed."Demands were made by Spouses Mirabueno and Spouses Dimalanta
to the petitioner to make good the checks. Despite this, however, the latter failed to pay the amounts
represented by the said checks.
On December 8, 1997, Spouses Mirabueno filed a civil action for collection of sum of money,
damages and attorney's fee with prayer for the issuance of a writ of preliminary attachment against
petitioner before the Regional Trial Court (RTC) of General Santos City, docketed as Civil Case No.
6231.3 On December 15, 1997, Spouses Dimalanta followed suit and instituted a similar action,
which was docketed as Civil Case No. 6238.4
Subsequently, on various dates, the Office of the City Prosecutor of General Santos City filed several
informations for violation of Batas Pambansa Bilang (B.P. Blg.) 22 against the petitioner with the
Municipal Trial Court in Cities (MTCC), General Santos City. The criminal complaints were docketed
as Criminal Case Nos. 34873, 34874, 34862 to 34869, and Criminal Case No. 35522-I. 5
In the criminal cases, petitioner filed separate motions to suspend proceedings on account of the
existence of a prejudicial question and motion to exclude the private prosecutor from participating in
the proceedings.6 Petitioner prayed that the proceedings in the criminal cases be suspended until the
civil cases pending before the RTC were finally resolved.
The MTCC, in its Orders7 dated June 21, 2000 and July 4, 2000, denied the motions for lack of merit.
Petitioner filed a Partial Motion for Reconsideration8 relative to Criminal Case Nos. 34873, 34874,
34862 to 34869 and a Motion for Reconsideration of the Part of the Order Denying the Motion to

Suspend Proceedings on Account of the Existence of a Prejudicial Question relative to Criminal

Case No. 35522-I.9 The subsequent motions were denied in the Order10 dated October 18, 2000.
Aggrieved, petitioner filed a Petition for Certiorari with a Prayer for the Issuance of a Writ of
Preliminary Injunction11 before the RTC, docketed as SPL. Civil Case No. 539, imputing grave abuse
of discretion on the part of the MTCC Judge. On July 2, 2001, the RTC issued an Order 12 denying
the petition.
Petitioner then filed a Motion for Reconsideration,13 which was denied in an Order dated October 18,
2001.14
Thereafter, petitioner filed with the CA a Petition for Certiorari Prohibition and Mandamus with Urgent
Prayer for the Issuance of Status Quo Order and Writ of Preliminary Injunction,15 docketed as CAG.R. SP No. 68250.
On April 30, 2003, the CA rendered a Decision16 dismissing the petition for lack of merit. The CA
opined that Civil Case Nos. 6231 and 6238 did not pose a prejudicial question to the prosecution of
the petitioner for violation of B.P. Blg. 22.
The CA ruled:
In the instant case, a careful perusal of Civil Cases Nos. 6231 and 6238 reveals that the issue
involved therein is not the validity of the sale as incorrectly pointed out by the petitioner, but it is,
whether or not the complainants therein are entitled to collect from the petitioner the sum or the
value of the checks which they have rediscounted from Evelyn Te. It behooves this Court to state
that the sale and the rediscounting of the checks are two transactions, separate and distinct from
each other. It so happened that in the subject civil cases it is not the sale that is in question, but
rather the rediscounting of the checks. Therefore, petitioner's contention that the main issue involved
in said civil cases is the validity of the sale stands on hollow ground. Furthermore, if it is indeed the
validity of the sale that is contested in the subject civil cases, then, We cannot fathom why the
petitioner never contested such sale by filing an action for the annulment thereof or at least invoked
or prayed in his answer that the sale be declared null and void. Accordingly, even if Civil Cases Nos.
6231 and 6238 are tried and the resolution of the issues therein is had, it cannot be deduced
therefrom that the petitioner cannot be held liable anymore for violation of B.P. Blg. 22. 17
Petitioner filed a Motion for Reconsideration,18 which was denied in the Order19 dated July 17, 2003.
Hence, the petition assigning the following errors:
1. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THERE IS NO
PREJUDICIAL QUESTION IN THE CIVIL CASES (FOR COLLECTION OF SUMS OF
MONEY INSTITUTED BY PRIVATE RESPONDENTS OVER CHECKS ISSUED BY THE
PETITIONER, CIVIL CASE NOS. 6238 AND 6231) THAT WOULD WARRANT
SUSPENSION OF THE CRIMINAL CASES (CASE NO. 35522-1, FOR VIOLATION OF B.P.
22, SUBJECT OF WHICH ARE THE VERY SAME CHECKS).
2. THE HONORABLE COURT OF APPEALS ERRED IN NOT GRANTING THE PRAYER
FOR THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION AND/OR STATUS QUO
ORDER.20

The main contention of the petitioner is that a prejudicial question, as defined by law and
jurisprudence, exists in the present case. It is the petitioner's assertion that Civil Case Nos. 6231 and
6238 for collection of sum of money and damages were filed ahead of the criminal cases for violation
of B.P. Blg. 22. He further alleged that, in the pending civil cases, the issue as to whether private
respondents are entitled to collect from the petitioner despite the lack of consideration, is an issue
that is a logical antecedent to the criminal cases for violation of B.P. Blg. 22. For if the court rules that
there is no valid consideration for the check's issuance, as petitioner contends, then it necessarily
follows that he could not also be held liable for violation of B.P. Blg. 22.
Petitioner further avers that B.P. Blg. 22 specifically requires, among other elements, that the check
should have been issued for account or for value. There must be a valid consideration; otherwise, no
violation of the said law could be rightfully pursued. Petitioner said that the reason for the dishonor of
the checks was his order to the drawee bank to stop payment and to close his account in order to
avoid necessary penalty from the bank. He made this order due to the failure of Evelyn to deliver to
him the titles to the purchased properties to him.
On the other hand, the Office of the Solicitor General (OSG) contends that there is no prejudicial
question in Civil Case Nos. 6231 and 6238 which would warrant the suspension of the proceedings
in the criminal cases for violation of B.P. Blg. 22 against the petitioner. The issue in the civil cases is
not the validity of the sale between the petitioner and Evelyn, but whether the complainants therein
are entitled to damages arising from the checks. These checks were issued by the petitioner in favor
of Evelyn, who, thereafter, negotiated the same checks to private complainants. The checks were
subsequently dishonored due to insufficiency of funds. The OSG maintains that the resolution of
such issue has absolutely no bearing on the issue of whether petitioner may be held liable for
violation of B.P. Blg. 22.21
The present case hinges on the determination of whether there exists a prejudicial question that
necessitates the suspension of the proceedings in the MTCC.
We find that there is none and, thus, we resolve to deny the petition.
A prejudicial question generally exists in a situation where a civil action and a criminal action are
both pending, and there exists in the former an issue that must be preemptively resolved before the
latter may proceed, because howsoever the issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of the accused in the criminal case. The
rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has two
essential elements: (i) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and (ii) the resolution of such issue determines whether or not the
criminal action may proceed.22
If both civil and criminal cases have similar issues, or the issue in one is intimately related to the
issues raised in the other, then a prejudicial question would likely exist, provided the other element
or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon
which the criminal prosecution would be based, but also that the resolution of the issues raised in
the civil action would be necessarily determinative of the guilt or innocence of the accused. If the
resolution of the issue in the civil action will not determine the criminal responsibility of the accused
in the criminal action based on the same facts, or if there is no necessity that the civil case be
determined first before taking up the criminal case, the civil case does not involve a prejudicial

question.23 Neither is there a prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other.24
The issue in the criminal cases is whether the petitioner is guilty of violating B.P. Blg. 22, while in the
civil case, it is whether the private respondents are entitled to collect from the petitioner the sum or
the value of the checks that they have rediscounted from Evelyn.
lavvphil

The resolution of the issue raised in the civil action is not determinative of the guilt or innocence of
the accused in the criminal cases against him, and there is no necessity that the civil case be
determined first before taking up the criminal cases.
In the aforementioned civil actions, even if petitioner is declared not liable for the payment of the
value of the checks and damages, he cannot be adjudged free from criminal liability for violation of
B.P. Blg. 22. The mere issuance of worthless checks with knowledge of the insufficiency of funds to
support the checks is in itself an offense.25
In Jose v. Suarez,26 the prejudicial question under determination was whether the daily interest rate
of 5% was void, such that the checks issued by respondents to cover said interest were likewise void
for being contra bonos mores, and thus the cases for B.P. Blg. 22 will no longer prosper. In resolving
the issue, We ruled that "whether or not the interest rate imposed by petitioners is eventually
declared void for being contra bonos mores will not affect the outcome of the BP Blg. 22 cases
because what will ultimately be penalized is the mere issuance of bouncing checks. In fact, the
primordial question posed before the court hearing the B.P. Blg. 22 cases is whether the law has
been breached; that is, if a bouncing check has been issued."
Further, We held in Ricaforte v. Jurado,27 that:
The gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a worthless
check; that is, a check that is dishonored upon its presentation for payment. In Lozano v. Martinez,
we have declared that it is not the non-payment of an obligation which the law punishes. The law is
not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under
pain of penal sanctions, the making and circulation of worthless checks. Because of its deleterious
effects on the public interest, the practice is proscribed by the law. The law punishes the act not as
an offense against property, but an offense against public order. In People v. Nitafan, we said that a
check issued as an evidence of debt - though not intended to be presented for payment - has the
same effect as an ordinary check and would fall within the ambit of B.P. Blg. 22.
xxxx
x x x The mere act of issuing a worthless check - whether as a deposit, as a guarantee or even as
evidence of pre-existing debt - is malum prohibitum.
To determine the reason for which checks are issued, or the terms and conditions for their issuance,
will greatly erode the faith the public reposes in the stability and commercial value of checks as
currency substitutes, and bring about havoc in trade and in banking communities. So what the law
punishes is the issuance of a bouncing check and not the purpose for which it was issued or the
terms and conditions relating to its issuance. The mere act of issuing a worthless check is malum
prohibitum.28

Moreover, petitioner's reliance on Ras v. Rasul29 is misplaced. The case of Ras involves a complaint
for nullification of a deed of sale on the ground of an alleged double sale. While the civil case was
pending, an information for estafa was filed against Ras (the defendant in the civil case) arising from
the same alleged double sale, subject matter of the civil complaint. The Court ruled that there was a
prejudicial question considering that the defense in the civil case was based on the very same facts
that would be determinative of the guilt or innocence of the accused in the estafa case.
The instant case is different from Ras, inasmuch as the determination of whether the petitioner is
liable to pay the private respondents the value of the checks and damages, will not affect the guilt or
innocence of the petitioner because the material question in the criminal cases is whether petitioner
had issued bad checks, regardless of the purpose or condition of its issuance.
Guided by the following legal precepts, it is clear that the determination of the issues involved in Civil
Case Nos. 6231 and 6238 for collection of sum of money and damages is irrelevant to the guilt or
innocence of the petitioner in the criminal cases for violation of B.P. Blg. 22.
In addition, petitioner's claim of lack of consideration may be raised as a defense during the trial of
the criminal cases against him. The validity and merits of a partys defense and accusation, as well
as the admissibility and weight of testimonies and evidence brought before the court, are better
ventilated during trial proper.
Precisely, the reason why a state has courts of law is to ascertain the respective rights of the parties,
to examine and to put to test all their respective allegations and evidence through a well designed
machinery termed "trial."Thus, all the defenses available to the accused should be invoked in the
trial of the criminal cases. This court is not the proper forum that should ascertain the facts and
decide the case for violation of B.P. Blg. 22 filed against the petitioner.
In fine, the CA committed no reversible error in affirming the decision of the RTC.
WHEREFORE, the petition is DENIED and the Decision dated April 30, 2003 and the Resolution
dated July 17, 2003 of the Court of Appeals in CA-G.R. SP No. 68250 are AFFIRMED.
SO ORDERED.
G.R. No. 184861

June 30, 2009

DREAMWORK CONSTRUCTION, INC., Petitioner,

vs.
CLEOFE S. JANIOLA and HON. ARTHUR A. FAMINI, Respondents.
DECISION
VELASCO, JR., J.:
The Case
Petitioner Dreamwork Construction, Inc. seeks the reversal of the August 26, 2008 Decision 1 in SCA
No. 08-0005 of the Regional Trial Court (RTC), Branch 253 in Las Pias City. The Decision affirmed

the Orders dated October 16, 20072 and March 12, 20083 in Criminal Case Nos. 55554-61 issued by
the Metropolitan Trial Court (MTC), Branch 79 in Las Pias City.
The Facts
On October 18, 2004, petitioner, through its President, Roberto S. Concepcion, and Vice-President
for Finance and Marketing, Normandy P. Amora, filed a Complaint Affidavit dated October 5,
20044 for violation of Batas Pambansa Bilang 22 (BP 22) against private respondent Cleofe S.
Janiola with the Office of the City Prosecutor of Las Pias City. The case was docketed as I.S. No.
04-2526-33. Correspondingly, petitioner filed a criminal information for violation of BP 22 against
private respondent with the MTC on February 2, 2005 docketed as Criminal Case Nos. 55554-61,
entitled People of the Philippines v. Cleofe S. Janiola.
On September 20, 2006, private respondent, joined by her husband, instituted a civil complaint
against petitioner by filing a Complaint dated August 20065 for the rescission of an alleged
construction agreement between the parties, as well as for damages. The case was filed with the
RTC, Branch 197 in Las Pias City and docketed as Civil Case No. LP-06-0197. Notably, the
checks, subject of the criminal cases before the MTC, were issued in consideration of the
construction agreement.
Thereafter, on July 25, 2007, private respondent filed a Motion to Suspend Proceedings dated July
24, 20076 in Criminal Case Nos. 55554-61, alleging that the civil and criminal cases involved facts
and issues similar or intimately related such that in the resolution of the issues in the civil case, the
guilt or innocence of the accused would necessarily be determined. In other words, private
respondent claimed that the civil case posed a prejudicial question as against the criminal cases.
Petitioner opposed the suspension of the proceedings in the criminal cases in an undated
Comment/Opposition to Accuseds Motion to Suspend Proceedings based on Prejudicial
Question7 on the grounds that: (1) there is no prejudicial question in this case as the rescission of the
contract upon which the bouncing checks were issued is a separate and distinct issue from the issue
of whether private respondent violated BP 22; and (2) Section 7, Rule 111 of the Rules of Court
states that one of the elements of a prejudicial question is that "the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the subsequent criminal action";
thus, this element is missing in this case, the criminal case having preceded the civil case.
Later, the MTC issued its Order dated October 16, 2007, granting the Motion to Suspend
Proceedings, and reasoned that:
Should the trial court declare the rescission of contract and the nullification of the checks issued as
the same are without consideration, then the instant criminal cases for alleged violation of BP 22
must be dismissed. The belated filing of the civil case by the herein accused did not detract from the
correctness of her cause, since a motion for suspension of a criminal action may be filed at any time
before the prosecution rests (Section 6, Rule 111, Revised Rules of Court). 8
In an Order dated March 12, 2008,9 the MTC denied petitioners Motion for Reconsideration dated
November 29, 2007.

Petitioner appealed the Orders to the RTC with a Petition dated May 13, 2008. Thereafter, the RTC
issued the assailed decision dated August 26, 2008, denying the petition. On the issue of the
existence of a prejudicial question, the RTC ruled:
Additionally, it must be stressed that the requirement of a "previously" filed civil case is intended
merely to obviate delays in the conduct of the criminal proceedings. Incidentally, no clear evidence of
any intent to delay by private respondent was shown. The criminal proceedings are still in their initial
stages when the civil action was instituted. And, the fact that the civil action was filed after the
criminal action was instituted does not render the issues in the civil action any less prejudicial in
character.10
Hence, we have this petition under Rule 45.
The Issue
WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN NOT PERCEIVING GRAVE
ABUSE OF DISCRETION ON THE PART OF THE INFERIOR COURT, WHEN THE LATTER
RULED TO SUSPEND PROCEEDINGS IN CRIM. CASE NOS. 55554-61 ON THE BASIS OF
"PREJUDICIAL QUESTION" IN CIVIL CASE NO. LP-06-0197. 11
The Courts Ruling
This petition must be granted.
The Civil Action Must Precede the Filing of the
Criminal Action for a Prejudicial Question to Exist
Under the 1985 Rules on Criminal Procedure, as amended by Supreme Court Resolutions dated
June 17, 1988 and July 7, 1988, the elements of a prejudicial question are contained in Rule 111,
Sec. 5, which states:
SEC. 5. Elements of prejudicial question. The two (2) essential elements of a prejudicial question
are: (a) the civil action involves an issue similar or intimately related to the issue raised in the
criminal action; and (b) the resolution of such issue determines whether or not the criminal action
may proceed.
Thus, the Court has held in numerous cases12 that the elements of a prejudicial question, as stated
in the above-quoted provision and in Beltran v. People,13 are:
The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has
two essential elements: (a) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and (b) the resolution of such issue determines whether or not the
criminal action may proceed.
On December 1, 2000, the 2000 Rules on Criminal Procedure, however, became effective and the
above provision was amended by Sec. 7 of Rule 111, which applies here and now provides:

SEC. 7. Elements of prejudicial question.The elements of a prejudicial question are: (a) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in
the subsequent criminal action, and (b) the resolution of such issue determines whether or not the
criminal action may proceed. (Emphasis supplied.)
Petitioner interprets Sec. 7(a) to mean that in order for a civil case to create a prejudicial question
and, thus, suspend a criminal case, it must first be established that the civil case was filed previous
to the filing of the criminal case. This, petitioner argues, is specifically to guard against the situation
wherein a party would belatedly file a civil action that is related to a pending criminal action in order
to delay the proceedings in the latter.
On the other hand, private respondent cites Article 36 of the Civil Code which provides:
Art. 36. Pre-judicial questions which must be decided before any criminal prosecution may be
instituted or may proceed, shall be governed by rules of court which the Supreme Court shall
promulgate and which shall not be in conflict with the provisions of this Code. (Emphasis supplied.)
Private respondent argues that the phrase "before any criminal prosecution may be instituted or may
proceed" must be interpreted to mean that a prejudicial question exists when the civil action is filed
either before the institution of the criminal action or during the pendency of the criminal action.
Private respondent concludes that there is an apparent conflict in the provisions of the Rules of
Court and the Civil Code in that the latter considers a civil case to have presented a prejudicial
question even if the criminal case preceded the filing of the civil case.
We cannot agree with private respondent.
First off, it is a basic precept in statutory construction that a "change in phraseology by amendment
of a provision of law indicates a legislative intent to change the meaning of the provision from that it
originally had."14 In the instant case, the phrase, "previously instituted," was inserted to qualify the
nature of the civil action involved in a prejudicial question in relation to the criminal action. This
interpretation is further buttressed by the insertion of "subsequent" directly before the term criminal
action. There is no other logical explanation for the amendments except to qualify the relationship of
the civil and criminal actions, that the civil action must precede the criminal action.
Thus, this Court ruled in Torres v. Garchitorena15 that:
Even if we ignored petitioners procedural lapse and resolved their petition on the merits, we hold
that Sandiganbayan did not abuse its discretion amounting to excess or lack of jurisdiction in
denying their omnibus motion for the suspension of the proceedings pending final judgment in Civil
Case No. 7160. Section 6, Rule lll of the Rules of Criminal Procedure, as amended, reads:
Sec. 6. Suspension by reason of prejudicial question. - A petition for suspension of the criminal
action based upon the pendency of a prejudicial question in a civil action may be filed in the office of
the prosecutor or the court conducting the preliminary investigation. When the criminal action has
been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any
time before the prosecution rests.
Sec. 7. Elements of prejudicial question. - The elements of a prejudicial question are: (a) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in

the subsequent criminal action, and (b) the resolution of such issue determines whether or not the
criminal action may proceed.
Under the amendment, a prejudicial question is understood in law as that which must precede the
criminal action and which requires a decision before a final judgment can be rendered in the criminal
action with which said question is closely connected. The civil action must be instituted prior to the
institution of the criminal action. In this case, the Information was filed with the Sandiganbayan
ahead of the complaint in Civil Case No. 7160 filed by the State with the RTC in Civil Case No. 7160.
Thus, no prejudicial question exists. (Emphasis supplied.)
Additionally, it is a principle in statutory construction that "a statute should be construed not only to
be consistent with itself but also to harmonize with other laws on the same subject matter, as to form
a complete, coherent and intelligible system."16 This principle is consistent with the maxim,
interpretare et concordare leges legibus est optimus interpretandi modus or every statute must be so
construed and harmonized with other statutes as to form a uniform system of jurisprudence. 17
1 a vv p h i l

In other words, every effort must be made to harmonize seemingly conflicting laws. It is only when
harmonization is impossible that resort must be made to choosing which law to apply.
In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule 111 of the Rules of Court are
susceptible of an interpretation that would harmonize both provisions of law. The phrase "previously
instituted civil action" in Sec. 7 of Rule 111 is plainly worded and is not susceptible of alternative
interpretations. The clause "before any criminal prosecution may be instituted or may proceed" in Art.
36 of the Civil Code may, however, be interpreted to mean that the motion to suspend the criminal
action may be filed during the preliminary investigation with the public prosecutor or court conducting
the investigation, or during the trial with the court hearing the case.
This interpretation would harmonize Art. 36 of the Civil Code with Sec. 7 of Rule 111 of the Rules of
Court but also with Sec. 6 of Rule 111 of the Civil Code, which provides for the situations when the
motion to suspend the criminal action during the preliminary investigation or during the trial may be
filed. Sec. 6 provides:
SEC. 6. Suspension by reason of prejudicial question.A petition for suspension of the criminal
action based upon the pendency of a prejudicial question in a civil action may be filed in the office of
the prosecutor or the court conducting the preliminary investigation. When the criminal action has
been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any
time before the prosecution rests.
Thus, under the principles of statutory construction, it is this interpretation of Art. 36 of the Civil Code
that should govern in order to give effect to all the relevant provisions of law.
It bears pointing out that the circumstances present in the instant case indicate that the filing of the
civil action and the subsequent move to suspend the criminal proceedings by reason of the presence
of a prejudicial question were a mere afterthought and instituted to delay the criminal proceedings.
In Sabandal v. Tongco,18 we found no prejudicial question existed involving a civil action for specific
performance, overpayment, and damages, and a criminal complaint for BP 22, as the resolution of
the civil action would not determine the guilt or innocence of the accused in the criminal case. In
resolving the case, we said:

Furthermore, the peculiar circumstances of the case clearly indicate that the filing of the civil case
was a ploy to delay the resolution of the criminal cases. Petitioner filed the civil case three years
after the institution of the criminal charges against him. Apparently, the civil action was instituted as
an afterthought to delay the proceedings in the criminal cases.19
Here, the civil case was filed two (2) years after the institution of the criminal complaint and from the
time that private respondent allegedly withdrew its equipment from the job site. Also, it is worth
noting that the civil case was instituted more than two and a half (2 ) years from the time that
private respondent allegedly stopped construction of the proposed building for no valid reason. More
importantly, the civil case praying for the rescission of the construction agreement for lack of
consideration was filed more than three (3) years from the execution of the construction agreement.
Evidently, as in Sabandal, the circumstances surrounding the filing of the cases involved here show
that the filing of the civil action was a mere afterthought on the part of private respondent and
interposed for delay. And as correctly argued by petitioner, it is this scenario that Sec. 7 of Rule 111
of the Rules of Court seeks to prevent. Thus, private respondents positions cannot be left to stand.
The Resolution of the Civil Case Is Not
Determinative of the Prosecution of the Criminal Action
In any event, even if the civil case here was instituted prior to the criminal action, there is, still, no
prejudicial question to speak of that would justify the suspension of the proceedings in the criminal
case.
To reiterate, the elements of a prejudicial question under Sec. 7 of Rule 111 of the Rules of Court
are: (1) the previously instituted civil action involves an issue similar or intimately related to the issue
raised in the subsequent criminal action; and (2) the resolution of such issue determines whether or
not the criminal action may proceed.
Petitioner argues that the second element of a prejudicial question, as provided in Sec. 7 of Rule 111
of the Rules, is absent in this case. Thus, such rule cannot apply to the present controversy.
Private respondent, on the other hand, claims that if the construction agreement between the parties
is declared null and void for want of consideration, the checks issued in consideration of such
contract would become mere scraps of paper and cannot be the basis of a criminal prosecution.
We find for petitioner.
It must be remembered that the elements of the crime punishable under BP 22 are as follows:
(1) the making, drawing, and issuance of any check to apply for account or for value;
(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no
sufficient funds in or credit with the drawee bank for the payment of such check in full upon
its presentment; and

(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or
credit, or dishonor for the same reason had not the drawer, without any valid cause, ordered
the bank to stop payment.20
Undeniably, the fact that there exists a valid contract or agreement to support the issuance of the
check/s or that the checks were issued for valuable consideration does not make up the elements of
the crime. Thus, this Court has held in a long line of cases21 that the agreement surrounding the
issuance of dishonored checks is irrelevant to the prosecution for violation of BP 22. In Mejia v.
People,22 we ruled:
It must be emphasized that the gravamen of the offense charge is the issuance of a bad check. The
purpose for which the check was issued, the terms and conditions relating to its issuance, or any
agreement surrounding such issuance are irrelevant to the prosecution and conviction of petitioner.
To determine the reason for which checks are issued, or the terms and conditions for their issuance,
will greatly erode the faith the public reposes in the stability and commercial value of checks as
currency substitutes, and bring havoc in trade and in banking communities. The clear intention of the
framers of B.P. 22 is to make the mere act of issuing a worthless check malum prohibitum.
Lee v. Court of Appeals23 is even more poignant. In that case, we ruled that the issue of lack of
valuable consideration for the issuance of checks which were later on dishonored for insufficient
funds is immaterial to the success of a prosecution for violation of BP 22, to wit:
Third issue. Whether or not the check was issued on account or for value.
Petitioners claim is not feasible. We have held that upon issuance of a check, in the absence of
evidence to the contrary, it is presumed that the same was issued for valuable consideration.
Valuable consideration, in turn, may consist either in some right, interest, profit or benefit accruing to
the party who makes the contract, or some forbearance, detriment, loss or some responsibility, to
act, or labor, or service given, suffered or undertaken by the other side. It is an obligation to do, or
not to do in favor of the party who makes the contract, such as the maker or indorser.
In this case, petitioner himself testified that he signed several checks in blank, the subject check
included, in exchange for 2.5% interest from the proceeds of loans that will be made from said
account. This is a valuable consideration for which the check was issued. That there was neither a
pre-existing obligation nor an obligation incurred on the part of petitioner when the subject check
was given by Bautista to private complainant on July 24, 1993 because petitioner was no longer
connected with Unlad or Bautista starting July 1989, cannot be given merit since, as earlier
discussed, petitioner failed to adequately prove that he has severed his relationship with Bautista or
Unlad.
At any rate, we have held that what the law punishes is the mere act of issuing a bouncing check,
not the purpose for which it was issued nor the terms and conditions relating to its issuance. This is
because the thrust of the law is to prohibit the making of worthless checks and putting them into
circulation.24 (Emphasis supplied.)
Verily, even if the trial court in the civil case declares that the construction agreement between the
parties is void for lack of consideration, this would not affect the prosecution of private respondent in
the criminal case. The fact of the matter is that private respondent indeed issued checks which were

subsequently dishonored for insufficient funds. It is this fact that is subject of prosecution under BP
22.
lawphil.net

Therefore, it is clear that the second element required for the existence of a prejudicial question, that
the resolution of the issue in the civil action would determine whether the criminal action may
proceed, is absent in the instant case. Thus, no prejudicial question exists and the rules on it are
inapplicable to the case before us.
WHEREFORE, we GRANT this petition. We hereby REVERSE and SET ASIDE the August 26, 2008
Decision in SCA No. 08-0005 of the RTC, Branch 253 in Las Pias City and the Orders dated
October 16, 2007 and March 12, 2008 in Criminal Case Nos. 55554-61 of the MTC, Branch 79 in
Las Pias City. We order the MTC to continue with the proceedings in Criminal Case Nos. 55554-61
with dispatch.
No costs.
SO ORDERED.
G.R. No. 172060

September 13, 2010

JOSELITO R. PIMENTEL, Petitioner,

vs.
MARIA CHRYSANTINE L. PIMENTEL and PEOPLE OF THE PHILIPPINES, Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the Decision2 of the Court of Appeals, promulgated
on 20 March 2006, in CA-G.R. SP No. 91867.
The Antecedent Facts
The facts are stated in the Court of Appeals decision:
On 25 October 2004, Maria Chrysantine Pimentel y Lacap (private respondent) filed an action for
frustrated parricide against Joselito R. Pimentel (petitioner), docketed as Criminal Case No. Q-04130415, before the Regional Trial Court of Quezon City, which was raffled to Branch 223 (RTC
Quezon City).
On 7 February 2005, petitioner received summons to appear before the Regional Trial Court of
Antipolo City, Branch 72 (RTC Antipolo) for the pre-trial and trial of Civil Case No. 04-7392 (Maria
Chrysantine Lorenza L. Pimentel v. Joselito Pimentel) for Declaration of Nullity of Marriage under
Section 36 of the Family Code on the ground of psychological incapacity.

On 11 February 2005, petitioner filed an urgent motion to suspend the proceedings before the RTC
Quezon City on the ground of the existence of a prejudicial question. Petitioner asserted that since
the relationship between the offender and the victim is a key element in parricide, the outcome of
Civil Case No. 04-7392 would have a bearing in the criminal case filed against him before the RTC
Quezon City.
The Decision of the Trial Court
The RTC Quezon City issued an Order dated 13 May 20053 holding that the pendency of the case
before the RTC Antipolo is not a prejudicial question that warrants the suspension of the criminal
case before it. The RTC Quezon City held that the issues in Criminal Case No. Q-04-130415 are the
injuries sustained by respondent and whether the case could be tried even if the validity of
petitioners marriage with respondent is in question. The RTC Quezon City ruled:
WHEREFORE, on the basis of the foregoing, the Motion to Suspend Proceedings On the [Ground]
of the Existence of a Prejudicial Question is, for lack of merit, DENIED.
SO ORDERED.4
Petitioner filed a motion for reconsideration. In its 22 August 2005 Order,5 the RTC Quezon City
denied the motion.
Petitioner filed a petition for certiorari with application for a writ of preliminary injunction and/or
temporary restraining order before the Court of Appeals, assailing the 13 May 2005 and 22 August
2005 Orders of the RTC Quezon City.
The Decision of the Court of Appeals
In its 20 March 2006 Decision, the Court of Appeals dismissed the petition. The Court of Appeals
ruled that in the criminal case for frustrated parricide, the issue is whether the offender commenced
the commission of the crime of parricide directly by overt acts and did not perform all the acts of
execution by reason of some cause or accident other than his own spontaneous desistance. On the
other hand, the issue in the civil action for annulment of marriage is whether petitioner is
psychologically incapacitated to comply with the essential marital obligations. The Court of Appeals
ruled that even if the marriage between petitioner and respondent would be declared void, it would
be immaterial to the criminal case because prior to the declaration of nullity, the alleged acts
constituting the crime of frustrated parricide had already been committed. The Court of Appeals ruled
that all that is required for the charge of frustrated parricide is that at the time of the commission of
the crime, the marriage is still subsisting.
Petitioner filed a petition for review before this Court assailing the Court of Appeals decision.
The Issue
The only issue in this case is whether the resolution of the action for annulment of marriage is a
prejudicial question that warrants the suspension of the criminal case for frustrated parricide against
petitioner.

The Ruling of this Court

The petition has no merit.
Civil Case Must be Instituted
Before the Criminal Case
Section 7, Rule 111 of the 2000 Rules on Criminal Procedure 6 provides:
Section 7. Elements of Prejudicial Question. - The elements of a prejudicial question are: (a) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in
the subsequent criminal action and (b) the resolution of such issue determines whether or not the
criminal action may proceed.
The rule is clear that the civil action must be instituted first before the filing of the criminal action. In
this case, the Information7 for Frustrated Parricide was dated 30 August 2004. It was raffled to RTC
Quezon City on 25 October 2004 as per the stamped date of receipt on the Information. The RTC
Quezon City set Criminal Case No. Q-04-130415 for pre-trial and trial on 14 February 2005.
Petitioner was served summons in Civil Case No. 04-7392 on 7 February 2005. 8 Respondents
petition9 in Civil Case No. 04-7392 was dated 4 November 2004 and was filed on 5 November 2004.
Clearly, the civil case for annulment was filed after the filing of the criminal case for frustrated
parricide. As such, the requirement of Section 7, Rule 111 of the 2000 Rules on Criminal Procedure
was not met since the civil action was filed subsequent to the filing of the criminal action.
Annulment of Marriage is not a Prejudicial Question
in Criminal Case for Parricide
Further, the resolution of the civil action is not a prejudicial question that would warrant the
suspension of the criminal action.
There is a prejudicial question when a civil action and a criminal action are both pending, and there
exists in the civil action an issue which must be preemptively resolved before the criminal action may
proceed because howsoever the issue raised in the civil action is resolved would be determinative of
the guilt or innocence of the accused in the criminal case.10 A prejudicial question is defined as:
x x x one that arises in a case the resolution of which is a logical antecedent of the issue involved
therein, and the cognizance of which pertains to another tribunal. It is a question based on a fact
distinct and separate from the crime but so intimately connected with it that it determines the guilt or
innocence of the accused, and for it to suspend the criminal action, it must appear not only that said
case involves facts intimately related to those upon which the criminal prosecution would be based
but also that in the resolution of the issue or issues raised in the civil case, the guilt or innocence of
the accused would necessarily be determined.11
The relationship between the offender and the victim is a key element in the crime of
parricide,12 which punishes any person "who shall kill his father, mother, or child, whether legitimate
or illegitimate, or any of his ascendants or descendants, or his spouse." 13 The relationship between
the offender and the victim distinguishes the crime of parricide from murder 14 or homicide.15 However,
the issue in the annulment of marriage is not similar or intimately related to the issue in the criminal

case for parricide. Further, the relationship between the offender and the victim is not determinative
of the guilt or innocence of the accused.
The issue in the civil case for annulment of marriage under Article 36 of the Family Code is whether
petitioner is psychologically incapacitated to comply with the essential marital obligations. The issue
in parricide is whether the accused killed the victim. In this case, since petitioner was charged with
frustrated parricide, the issue is whether he performed all the acts of execution which would have
killed respondent as a consequence but which, nevertheless, did not produce it by reason of causes
independent of petitioners will.16 At the time of the commission of the alleged crime, petitioner and
respondent were married. The subsequent dissolution of their marriage, in case the petition in Civil
Case No. 04-7392 is granted, will have no effect on the alleged crime that was committed at the time
of the subsistence of the marriage. In short, even if the marriage between petitioner and respondent
is annulled, petitioner could still be held criminally liable since at the time of the commission of the
alleged crime, he was still married to respondent.
1avvphi1

We cannot accept petitioners reliance on Tenebro v. Court of Appeals17 that "the judicial declaration
of the nullity of a marriage on the ground of psychological incapacity retroacts to the date of the
celebration of the marriage insofar as the vinculum between the spouses is concerned x x x." First,
the issue in Tenebro is the effect of the judicial declaration of nullity of a second or subsequent
marriage on the ground of psychological incapacity on a criminal liability for bigamy. There was no
issue of prejudicial question in that case. Second, the Court ruled inTenebro that "[t]here is x x x a
recognition written into the law itself that such a marriage, although void ab initio, may still produce
legal consequences."18 In fact, the Court declared in that case that "a declaration of the nullity of the
second marriage on the ground of psychological incapacity is of absolutely no moment insofar as the
States penal laws are concerned."19
In view of the foregoing, the Court upholds the decision of the Court of Appeals. The trial in Criminal
Case No. Q-04-130415 may proceed as the resolution of the issue in Civil Case No. 04-7392 is not
determinative of the guilt or innocence of petitioner in the criminal case.
WHEREFORE, we DENY the petition. We AFFIRM the 20 March 2006 Decision of the Court of
Appeals in CA-G.R. SP No. 91867.
SO ORDERED.
G.R. No. 161075

July 15, 2013

RAFAEL JOSE-CONSING, JR., Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
BERSAMIN, J.:
An independent civil action based on fraud initiated by the defrauded party does not raise a
prejudicial question to stop the proceedings in a pending criminal prosecution of the defendant for
estafa through falsification. This is because the result of the independent civil action is irrelevant to
the issue of guilt or innocence of the accused.

The Case
On appeal is the amended decision promulgated on August 18, 2003,1 whereby the Court of Appeals
(CA) granted the writ of certiorari upon petition by the State in C.A.-G.R. No. 71252 entitled People v.
Han. Winlove M Dumayas, Presiding Judge, Branch 59, Regional Trial Court, Makati City and Rafael
Consing, Jr., and set aside the assailed order issued on November 26, 2001 by the Regional Trial
Court (RTC), Branch 59, in Makati City deferring the arraignment of petitioner in Criminal Case No.
00-120 entitled People v. Rafael Consing, Jr. upon his motion on the ground of the existence of a
prejudicial question in the civil cases pending between him and the complainant in the trial courts in
Pasig City and Makati City.
Antecedents
Petitioner negotiated with and obtained for himself and his mother, Cecilia de la Cruz (de la Cruz)
various loans totaling P18,000,000.00 from Unicapital Inc. (Unicapital). The loans were secured by a
real estate mortgage constituted on a parcel of land (property) covered by Transfer Certificate of Title
(TCT) No. T-687599 of the Registry of Deeds for the Province of Cavite registered under the name of
de la Cruz.2 In accordance with its option to purchase the mortgaged property, Unicapital agreed to
purchase one-half of the property for a total consideration of P21,221,500.00. Payment was effected
by off-setting the amounts due to
Unicapital under the promissory notes of de la Cruz and Consing in the amount of P18,000,000.00
and paying an additional amount of P3,145,946.50. The other half of the property was purchased by
Plus Builders, Inc. (Plus Builders), a joint venture partner of Unicapital. 3
Before Unicapital and Plus Builders could develop the property, they learned that the title to the
property was really TCT No. 114708 in the names of Po Willie Yu and Juanito Tan Teng, the parties
from whom the property had been allegedly acquired by de la Cruz. TCT No. 687599 held by De la
Cruz appeared to be spurious.4
On its part, Unicapital demanded the return of the total amount of P41,377,851.48 as of April 19,
1999 that had been paid to and received by de la Cruz and Consing, but the latter ignored the
demands.5
On July 22, 1999, Consing filed Civil Case No. 1759 in the Pasig City Regional Trial Court (RTC)
(Pasig civil case) for injunctive relief, thereby seeking to enjoin Unicapital from proceeding against
him for the collection of theP41,377,851.48 on the ground that he had acted as a mere agent of his
mother.
On the same date, Unicapital initiated a criminal complaint for estafa through falsification of public
document against Consing and de la Cruz in the Makati City Prosecutors Office. 6
On August 6, 1999, Unicapital sued Consing in the RTC in Makati City (Civil Case No. 99-1418) for
the recovery of a sum of money and damages, with an application for a writ of preliminary
attachment (Makati civil case).7
On January 27, 2000, the Office of the City Prosecutor of Makati City filed against Consing and De la
Cruz an information for estafa through falsification of public document in the RTC in Makati City
(Criminal Case No. 00-120), which was assigned to Branch 60 (Makati criminal case). 8

On February 15, 2001, Consing moved to defer his arraignment in the Makati criminal case on the
ground of existence of a prejudicial question due to the pendency of the Pasig and Makati civil
cases. On September 25, 2001, Consing reiterated his motion for deferment of his arraignment,
citing the additional ground of pendency of CA-G.R. SP No. 63712 in the CA. On November 19,
2001, the Prosecution opposed the motion.9
On November 26, 2001, the RTC issued an order suspending the proceedings in the Makati criminal
case on the ground of the existence of a prejudicial question, and on March 18, 2001, the RTC
denied the Prosecutions motion for reconsideration.10
The State thus assailed in the CA the last two orders of the RTC in the Makati criminal case via
petition for certiorari (C.A.-G.R. SP No. 71252).
On May 20, 2003, the CA promulgated its decision in C.A.-G.R. SP No. 71252, 11 dismissing the
petition for certiorari and upholding the RTCs questioned orders, explaining:
Is the resolution of the Pasig civil case prejudicial to the Cavite and Makati criminal cases?
We hold that it is. The resolution of the issue in the Pasig case, i.e. whether or not private
respondent may be held liable in the questioned transaction, will determine the guilt or innocence of
private respondent Consing in both the Cavite and Makati criminal cases.
The analysis and comparison of the Pasig civil case, Makati criminal case, Makati civil case and
Cavite criminal case show that: (1) the parties are identical; (2) the transactions in controversy are
identical; (3) the Transfer Certificate of Titles (TCT) involved are identical; (4) the questioned Deeds
of Sale/Mortgage are identical; (5) the dates in question are identical; and (6) the issue of private
respondents culpability for the questioned transactions is identical in all the proceedings.
As discussed earlier, not only was the issue raised in the Pasig civil case identical to or intimately
related to the criminal cases in Cavite and Makati. The similarities also extend to the parties in the
cases and the TCT and Deed of Sale/ Mortgage involved in the questioned transactions.
The respondent Judge, in ordering the suspension of the arraignment of private respondent in the
Makati case, in view of CA-G.R. SP No. 63712, where Unicapital was not a party thereto, did so
pursuant to its mandatory power to take judicial notice of an official act of another judicial authority. It
was also a better legal tack to prevent multiplicity of action, to which our legal system abhors.
Applying the Tuanda ruling, the pendency of CA-G.R. SP No. 63712 may be validly invoked to
suspend private respondents arraignment in the Makati City criminal case, notwithstanding the fact
that CA-G.R. SP No. 63712 was an offshoot, merely, in the Cavite criminal case. 12
In the meanwhile, on October 13, 1999, Plus Builders commenced its own suit for damages against
Consing (Civil Case No. 99-95381) in the RTC in Manila (Manila civil case). 13
On January 21, 2000, an information for estafa through falsification of public document was filed
against Consing and De la Cruz in the RTC in Imus, Cavite, docketed as Criminal Case No. 7668-00
and assigned to Branch 21 (Cavite criminal case). Consing filed a motion to defer the arraignment
on the ground of the existence of a prejudicial question, i.e., the pendency of the Pasig and Manila

civil cases. On January 27, 2000, however, the RTC handling the Cavite criminal case denied
Consings motion. Later on, it also denied his motion for reconsideration. Thereafter, Consing
commenced in the CA a special civil action for certiorari with prayer for the issuance of a temporary
restraining order (TRO) and/or writ of preliminary injunction (C.A.-G.R. SP No. 63712), seeking to
enjoin his arraignment and trial in the Cavite criminal case. The CA granted the TRO on March 19,
2001, and later promulgated its decision on May 31, 2001, granting Consing petition for certiorari
and setting aside the January 27, 2000 order of the RTC, and permanently enjoining the RTC from
proceeding with the arraignment and trial until the Pasig and Manila civil cases had been finally
decided.
Not satisfied, the State assailed the decision of the CA in this Court (G.R. No. 148193), praying for
the reversal of the May 31, 2001 decision of the CA. On January 16, 2003, the Court granted the
petition for review in G.R. No. 148193, and reversed and set aside the May 31, 2001 decision of the
CA,14 viz:
In the case at bar, we find no prejudicial question that would justify the suspension of the
proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not respondent (Consing) merely acted as an
agent of his mother, Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila civil case), for
Damages and Attachment, the question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the disputed lot. Even if
respondent is declared merely an agent of his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal liability. An agent or any person may be
held liable for conspiring to falsify public documents. Hence, the determination of the issue involved
in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification of public document.
Likewise, the resolution of PBIs right to be paid damages and the purchase price of the lot in
question will not be determinative of the culpability of the respondent in the criminal case for even if
PBI is held entitled to the return of the purchase price plus damages, it does not ipso facto follow
that respondent should be held guilty of estafa through falsification of public document. Stated
differently, a ruling of the court in the civil case that PBI should not be paid the purchase price plus
damages will not necessarily absolve respondent of liability in the criminal case where his guilt may
still be established under penal laws as determined by other evidence.
Moreover, neither is there a prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the
independent civil action may be brought by the offended party. It shall proceed independently of the
criminal action and shall require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission charged in the criminal action.
Thus, in Rojas v. People, the petitioner was accused in a criminal case for violation of Article 319 of
the Revised Penal Code, for executing a new chattel mortgage on personal property in favor of
another party without consent of the previous mortgagee. Thereafter, the offended party filed a civil
case for termination of management contract, one of the causes of action of which consisted of
petitioner having executed a chattel mortgage while the previous chattel mortgage was still valid and
subsisting. Petitioner moved that the arraignment and trial of the criminal case be held in abeyance
on the ground that the civil case was a prejudicial question, the resolution of which was necessary

before the criminal proceedings could proceed. The trial court denied the suspension of the criminal
case on the ground that no prejudicial question exist. We affirmed the order of the trial court and
ruled that:
the resolution of the liability of the defendant in the civil case on the eleventh cause of action
based on the fraudulent misrepresentation that the chattel mortgage the defendant executed in favor
of the said CMS Estate, Inc. on February 20, 1957, that his D-6 "Caterpillar" Tractor with Serial No.
9-U-6565 was "free from all liens and encumbrances" will not determine the criminal liability of the
accused in the said Criminal Case No. 56042 for violation of paragraph 2 of Article 319 of the
Revised Penal Code. . . . (i) That, even granting for the sake of argument, a prejudicial question is
involved in this case, the fact remains that both the crime charged in the information in the criminal
case and the eleventh cause of action in the civil case are based upon fraud, hence both the civil
and criminal cases could proceed independently of the other pursuant to Article 33 of the new Civil
Code which provides: "In cases of defamation, fraud and physical injuries, a civil action for damages,
entirely separate and distinct from the criminal action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence." (j) That, therefore, the act of
respondent judge in issuing the orders referred to in the instant petition was not made with "grave
abuse of discretion."
In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account of the alleged
fraud committed by respondent and his mother in selling the disputed lot to PBI is an independent
civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that
will justify the suspension of the criminal case at bar.15
Turning back to the Makati criminal case, the State moved for the reconsideration of the adverse
decision of the CA, citing the ruling in G.R. No. 148193, supra, to the effect that the Pasig and
Manila civil cases did not present a prejudicial question that justified the suspension of the
proceedings in the Cavite criminal case, and claiming that under the ruling in G.R. No. 148193, the
Pasig and Makati civil cases did not raise a prejudicial question that would cause the suspension of
the Makati criminal case.
In his opposition to the States motion for reconsideration, Consing contended that the ruling in G.R.
No. 148193 was not binding because G.R. No. 148193 involved Plus Builders, which was different
from Unicapital, the complainant in the Makati criminal case. He added that the decision in G.R. No.
148193 did not yet become final and executory, and could still be reversed at any time, and thus
should not control as a precedent to be relied upon; and that he had acted as an innocent attorneyin-fact for his mother, and should not be held personally liable under a contract that had involved
property belonging to his mother as his principal.
On August 18, 2003, the CA amended its decision, reversing itself. It relied upon the ruling in G.R.
No. 148193, and held thusly:
CA-G.R. SP No. 63712 is similar with the case at bench. The transactions in controversy, the
documents involved; the issue of the respondents culpability for the questioned transactions are all
identical in all the proceedings; and it deals with the same parties with the exception of private
complainant Unicapital.
However, the Supreme Court, upon review of CA-G.R. SP No. 63712, People of the Philippines vs.
Rafael Jose Consing, Jr. (G.R. No. 148193, January 16, 2003) held that "Civil Case No. 99-95381,

for Damages and attachment on account of alleged fraud committed by respondent and his mother
in selling the disputed lot to Plus Builders, Inc. is an independent civil action under Article 33 of the
Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the
criminal case at bar." In view of the aforementioned decision of the Supreme Court, We are thus
amending Our May 20, 2003 decision.
WHEREFORE, the petitioners motion for reconsideration is GRANTED. The Orders dated
November 26, 2001 and March 18, 2002 issued by the respondent Judge are hereby REVERSED
and SET ASIDE. Respondent Judge is hereby ordered to proceed with the hearing of Criminal Case
No. 00-120 with dispatch.
SO ORDERED.16
Consing filed a motion for reconsideration,17 but the CA denied the motion through the second
assailed resolution of December 11, 2003.18
Hence, this appeal by petition for review on certiorari.
Issue
Petitioner reiterates his contention that the decision in G.R. No. 148193 was not controlling in
relation to C.A.-G.R. No. 71252, which involved Plus Builders, not Unicapital, the complainant in
Criminal Case No. 00-120. He posits that in arriving at its amended decision, the CA did not consider
the pendency of the Makati civil case (Civil Case No. 99-1418), which raised a prejudicial question,
considering that the resolution of such civil action would include the issue of whether he had falsified
a certificate of title or had willfully defrauded Unicapital, the resolution of either of which would
determine his guilt or innocence in Criminal Case No. 00-120.
In its comment,19 the Office of the Solicitor General (OSG) counters that Unicapital brought the
Makati civil case as an independent civil action intended to exact civil liability separately from
Criminal Case No. 00-120 in a manner fully authorized under Section 1(a) and Section 2, Rule 111 of
the Rules of Court.20 It argues that the CA correctly took cognizance of the ruling in G.R. No. 148193,
holding in its challenged amended decision that the Makati civil case, just like the Manila civil case,
was an independent civil action instituted by virtue of Article 33 of the Civil Code; that the Makati civil
case did not raise a prejudicial question that justified the suspension of Criminal Case No. 00-120;
and that as finally settled in G.R. No. 148193, the Pasig civil case did not also raise any prejudicial
question, because the sole issue thereat was whether Consing, as the mere agent of his mother,
had any obligation or liability toward Unicapital.
In his reply,21 Consing submits that the Pasig civil case that he filed and Unicapitals Makati civil case
were not intended to delay the resolution of Criminal Case No. 00-120, nor to pre-empt such
resolution; and that such civil cases could be validly considered determinative of whether a
prejudicial question existed to warrant the suspension of Criminal Case No. 00-120.
Did the CA err in reversing itself on the issue of the existence of a prejudicial question that warranted
the suspension of the proceedings in the Makati criminal case?
Ruling

The petition for review on certiorari is absolutely meritless.

Consing has hereby deliberately chosen to ignore the firm holding in the ruling in G.R. No. 148193 to
the effect that the proceedings in Criminal Case No. 00-120 could not be suspended because the
Makati civil case was an independent civil action, while the Pasig civil case raised no prejudicial
question. That was wrong for him to do considering that the ruling fully applied to him due to the
similarity between his case with Plus Builders and his case with Unicapital.
A perusal of Unicapitals complaint in the Makati civil case reveals that the action was predicated on
fraud. This was apparent from the allegations of Unicapital in its complaint to the effect that Consing
and de la Cruz had acted in a "wanton, fraudulent, oppressive, or malevolent manner in offering as
security and later object of sale, a property which they do not own, and foisting to the public a
spurious title."22 As such, the action was one that could proceed independently of Criminal Case No.
00-120 pursuant to Article 33 of the Civil Code, which states as follows:
Article 33. In cases of defamation, fraud, and physical injuries a civil action for damages, entirely
separate and distinct from the criminal action, may be brought by the injured party. Such civil action
shall proceed independently of the criminal prosecution, and shall require only a preponderance of
evidence.
It is well settled that a civil action based on defamation, fraud and physical injuries may be
independently instituted pursuant to Article 33 of the Civil Code, and does not operate as a
prejudicial question that will justify the suspension of a criminal case. 23 This was precisely the Courts
thrust in G.R. No. 148193, thus:
Moreover, neither is there a prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the
independent civil action may be brought by the offended party. It shall proceed independently of the
criminal action and shall require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission charged in the criminal action.
xxxx
In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account of the alleged
fraud committed by respondent and his mother in selling the disputed lot to PBI is an independent
civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that
will justify the suspension of the criminal case at bar.24
Contrary to Consings stance, it was not improper for the CA to apply the ruling in G.R. No. 148193
to his case with Unicapital, for, although the Manila and Makati civil cases involved different
complainants (i.e., Plus Builders and Unicapital), the civil actions Plus Builders and Unicapital had
separately instituted against him were undeniably of similar mold, i.e., they were both based on
fraud, and were thus covered by Article 33 of the Civil Code. Clearly, the Makati criminal case could
not be suspended pending the resolution of the Makati civil case that Unicapital had filed.
As far as the Pasig civil case is concerned, the issue of Consings being a mere agent of his mother
who should not be criminally liable for having so acted due to the property involved having belonged
to his mother as principal has also been settled in G.R. No. 148193, to wit:

In the case at bar, we find no prejudicial question that would justify the suspension of the
proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not respondent (Consing) merely acted as an
agent of his mother, Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila civil case), for
Damages and Attachment, the question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the disputed lot. Even if
respondent is declared merely an agent of his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal liability. An agent or any person may be
held liable for conspiring to falsify public documents. Hence, the determination of the issue involved
in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification of public document. 25 (Words in
parentheses supplied; bold underscoring supplied for emphasis)
WHEREFORE, the Court AFFIRMS the amended decision promulgated on August 18, 2003; and
ORDERS petitioner to pay the costs of suit.
SO ORDERED.
G.R. No. 26795 July 31, 1970
CARMEN QUIMIGUING, Suing through her parents, ANTONIO QUIMIGUING and JACOBA
CABILIN,plaintiffs-appellants,
vs.
FELIX ICAO, defendant-appellee.
Torcuato L. Galon for plaintiffs-appellants.
Godardo Jacinto for defendant-appellee.

REYES, J.B.L., J.:

Appeal on points of law from an order of the Court of First Instance of Zamboanga del Norte (Judge
Onofre Sison Abalos, presiding), in its Civil Case No. 1590, dismissing a complaint for support and
damages, and another order denying amendment of the same pleading.
The events in the court of origin can be summarized as follows:
Appellant, Carmen Quimiguing, assisted by her parents, sued Felix Icao in the court below. In her
complaint it was averred that the parties were neighbors in Dapitan City, and had close and
confidential relations; that defendant Icao, although married, succeeded in having carnal intercourse
with plaintiff several times by force and intimidation, and without her consent; that as a result she
became pregnant, despite efforts and drugs supplied by defendant, and plaintiff had to stop studying.
Hence, she claimed support at P120.00 per month, damages and attorney's fees.

Duly summoned, defendant Icao moved to dismiss for lack of cause of action since the complaint did
not allege that the child had been born; and after hearing arguments, the trial judge sustained
defendant's motion and dismissed the complaint.
Thereafter, plaintiff moved to amend the complaint to allege that as a result of the intercourse,
plaintiff had later given birth to a baby girl; but the court, sustaining defendant's objection, ruled that
no amendment was allowable, since the original complaint averred no cause of action. Wherefore,
the plaintiff appealed directly to this Court.
We find the appealed orders of the court below to be untenable. A conceived child, although as yet
unborn, is given by law a provisional personality of its own for all purposes favorable to it, as
explicitly provided in Article 40 of the Civil Code of the Philippines. The unborn child, therefore, has a
right to support from its progenitors, particularly of the defendant-appellee (whose paternity is
deemed admitted for the purpose of the motion to dismiss), even if the said child is only "en ventre
de sa mere;" just as a conceived child, even if as yet unborn, may receive donations as prescribed
by Article 742 of the same Code, and its being ignored by the parent in his testament may result in
preterition of a forced heir that annuls the institution of the testamentary heir, even if such child
should be born after the death of the testator Article 854, Civil Code).
ART. 742. Donations made to conceived and unborn children may be accepted by
those persons who would legally represent them if they were already born.
ART. 854. The preterition or omission of one, some, or all of the compulsory heirs in
the direct line, whether living at the time of the execution of the will or born after the
death of the testator, shall annul the institution of heir; but the devises and legacies
shall be valid insofar as they are not inofficious.
If the omitted compulsory heirs should die before the testator, the institution shall be
effectual, without prejudice to the right of 'representation.
It is thus clear that the lower court's theory that Article 291 of the Civil Code declaring that support is
an obligation of parents and illegitimate children "does not contemplate support to children as yet
unborn," violates Article 40 aforesaid, besides imposing a condition that nowhere appears in the text
of Article 291. It is true that Article 40 prescribing that "the conceived child shall be considered born
for all purposes that are favorable to it" adds further "provided it be born later with the conditions
specified in the following article" (i.e., that the foetus be alive at the time it is completely delivered
from the mother's womb). This proviso, however, is not a condition precedent to the right of the
conceived child; for if it were, the first part of Article 40 would become entirely useless and
ineffective. Manresa, in his Commentaries (5th Ed.) to the corresponding Article 29 of the Spanish
Civil Code, clearly points this out:
Los derechos atribuidos al nasciturus no son simples expectativas, ni aun en el
sentido tecnico que la moderna doctrina da a esta figura juridica sino que
constituyen un caso de los propiamente Ilamados 'derechos en estado de
pendenci'; el nacimiento del sujeto en las condiciones previstas por el art. 30, no
determina el nacimiento de aquellos derechos (que ya existian de antemano), sino
que se trata de un hecho que tiene efectos declarativos. (1 Manresa, Op. cit., page
271)

A second reason for reversing the orders appealed from is that for a married man to force a woman
not his wife to yield to his lust (as averred in the original complaint in this case) constitutes a clear
violation of the rights of his victim that entitles her to claim compensation for the damage caused.
Says Article 21 of the Civil Code of the Philippines:
ART. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.
The rule of Article 21 is supported by Article 2219 of the same Code:
ART 2219. Moral damages may be recovered in the following and analogous cases:
(3) Seduction, abduction, rape or other lascivious acts:
xxx xxx xxx
(10) Acts and actions referred to in Articles 21, 26, 27, 28 ....
Thus, independently of the right to Support of the child she was carrying, plaintiff herself had a cause
of action for damages under the terms of the complaint; and the order dismissing it for failure to state
a cause of action was doubly in error.
WHEREFORE, the orders under appeal are reversed and set aside. Let the case be remanded to
the court of origin for further proceedings conformable to this decision. Costs against appellee Felix
Icao. So ordered.
G.R. No. 182836

October 13, 2009

CONTINENTAL STEEL MANUFACTURING CORPORATION, Petitioner,

vs.
HON. ACCREDITED VOLUNTARY ARBITRATOR ALLAN S. MONTAO and NAGKAKAISANG
MANGGAGAWA NG CENTRO STEEL CORPORATION-SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS (NMCSC-SUPER), Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court, assailing the
Decision1 dated 27 February 2008 and the Resolution2 dated 9 May 2008 of the Court of Appeals in
CA-G.R. SP No. 101697, affirming the Resolution3 dated 20 November 2007 of respondent
Accredited Voluntary Arbitrator Atty. Allan S. Montao (Montao) granting bereavement leave and
other death benefits to Rolando P. Hortillano (Hortillano), grounded on the death of his unborn child.
The antecedent facts of the case are as follows:

Hortillano, an employee of petitioner Continental Steel Manufacturing Corporation (Continental

Steel) and a member of respondent Nagkakaisang Manggagawa ng Centro Steel CorporationSolidarity of Trade Unions in the Philippines for Empowerment and Reforms (Union) filed on 9
January 2006, a claim for Paternity Leave, Bereavement Leave and Death and Accident Insurance
for dependent, pursuant to the Collective Bargaining Agreement (CBA) concluded between
Continental and the Union, which reads:
ARTICLE X: LEAVE OF ABSENCE
xxxx
Section 2. BEREAVEMENT LEAVEThe Company agrees to grant a bereavement leave with pay
to any employee in case of death of the employees legitimate dependent (parents, spouse, children,
brothers and sisters) based on the following:
2.1 Within Metro Manila up to Marilao, Bulacan - 7 days
2.2 Provincial/Outside Metro Manila - 11 days
xxxx
ARTICLE XVIII: OTHER BENEFITS
xxxx
Section 4. DEATH AND ACCIDENT INSURANCEThe Company shall grant death and accidental
insurance to the employee or his family in the following manner:
xxxx
4.3 DEPENDENTSEleven Thousand Five Hundred Fifty Pesos (Php11,550.00) in case of death of
the employees legitimate dependents (parents, spouse, and children). In case the employee is
single, this benefit covers the legitimate parents, brothers and sisters only with proper legal
document to be presented (e.g. death certificate). 4
The claim was based on the death of Hortillanos unborn child. Hortillanos wife, Marife V. Hortillano,
had a premature delivery on 5 January 2006 while she was in the 38th week of
pregnancy.5 According to the Certificate of Fetal Death dated 7 January 2006, the female fetus died
during labor due to fetal Anoxia secondary to uteroplacental insufficiency.6
Continental Steel immediately granted Hortillanos claim for paternity leave but denied his claims for
bereavement leave and other death benefits, consisting of the death and accident insurance. 7
Seeking the reversal of the denial by Continental Steel of Hortillanos claims for bereavement and
other death benefits, the Union resorted to the grievance machinery provided in the CBA. Despite
the series of conferences held, the parties still failed to settle their dispute, 8 prompting the Union to
file a Notice to Arbitrate before the National Conciliation and Mediation Board (NCMB) of the
Department of Labor and Employment (DOLE), National Capital Region (NCR). 9 In a Submission

Agreement dated 9 October 2006, the Union and Continental Steel submitted for voluntary
arbitration the sole issue of whether Hortillano was entitled to bereavement leave and other death
benefits pursuant to Article X, Section 2
and Article XVIII, Section 4.3 of the CBA.10 The parties mutually chose Atty. Montao, an Accredited
Voluntary Arbitrator, to resolve said issue.11
When the preliminary conferences again proved futile in amicably settling the dispute, the parties
proceeded to submit their respective Position Papers, 12 Replies,13 and Rejoinders14 to Atty. Montao.
The Union argued that Hortillano was entitled to bereavement leave and other death benefits
pursuant to the CBA. The Union maintained that Article X, Section 2 and Article XVIII, Section 4.3 of
the CBA did not specifically state that the dependent should have first been born alive or must have
acquired juridical personality so that his/her subsequent death could be covered by the CBA death
benefits. The Union cited cases wherein employees of MKK Steel Corporation (MKK Steel) and
Mayer Steel Pipe Corporation (Mayer Steel), sister companies of Continental Steel, in similar
situations as Hortillano were able to receive death benefits under similar provisions of their CBAs.
The Union mentioned in particular the case of Steve L. Dugan (Dugan), an employee of Mayer Steel,
whose wife also prematurely delivered a fetus, which had already died prior to the delivery. Dugan
was able to receive paternity leave, bereavement leave, and voluntary contribution under the CBA
between his union and Mayer Steel.15 Dugans child was only 24 weeks in the womb and died before
labor, as opposed to Hortillanos child who was already 37-38 weeks in the womb and only died
during labor.
The Union called attention to the fact that MKK Steel and Mayer Steel are located in the same
compound as Continental Steel; and the representatives of MKK Steel and Mayer Steel who signed
the CBA with their respective employees unions were the same as the representatives of
Continental Steel who signed the existing CBA with the Union.
Finally, the Union invoked Article 1702 of the Civil Code, which provides that all doubts in labor
legislations and labor contracts shall be construed in favor of the safety of and decent living for the
laborer.
On the other hand, Continental Steel posited that the express provision of the CBA did not
contemplate the death of an unborn child, a fetus, without legal personality. It claimed that there are
two elements for the entitlement to the benefits, namely: (1) death and (2) status as legitimate
dependent, none of which existed in Hortillanos case. Continental Steel, relying on Articles 40, 41
and 4216 of the Civil Code, contended that only one with civil personality could die. Hence, the
unborn child never died because it never acquired juridical personality. Proceeding from the same
line of thought, Continental Steel reasoned that a fetus that was dead from the moment of delivery
was not a person at all. Hence, the term dependent could not be applied to a fetus that never
acquired juridical personality. A fetus that was delivered dead could not be considered a dependent,
since it never needed any support, nor did it ever acquire the right to be supported.
Continental Steel maintained that the wording of the CBA was clear and unambiguous. Since neither
of the parties qualified the terms used in the CBA, the legally accepted definitions thereof were
deemed automatically accepted by both parties. The failure of the Union to have unborn child
included in the definition of dependent, as used in the CBA the death of whom would have

qualified the parent-employee for bereavement leave and other death benefits bound the Union to
the legally accepted definition of the latter term.
Continental Steel, lastly, averred that similar cases involving the employees of its sister companies,
MKK Steel and Mayer Steel, referred to by the Union, were irrelevant and incompetent evidence,
given the separate and distinct personalities of the companies. Neither could the Union sustain its
claim that the grant of bereavement leave and other death benefits to the parent-employee for the
loss of an unborn child constituted "company practice."
On 20 November 2007, Atty. Montao, the appointed Accredited Voluntary Arbitrator, issued a
Resolution17 ruling that Hortillano was entitled to bereavement leave with pay and death benefits.
Atty. Montao identified the elements for entitlement to said benefits, thus:
This Office declares that for the entitlement of the benefit of bereavement leave with pay by the
covered employees as provided under Article X, Section 2 of the parties CBA, three (3)
indispensable elements must be present: (1) there is "death"; (2) such death must be of employees
"dependent"; and (3) such dependent must be "legitimate".
On the otherhand, for the entitlement to benefit for death and accident insurance as provided under
Article XVIII, Section 4, paragraph (4.3) of the parties CBA, four (4) indispensable elements must be
present: (a) there is "death"; (b) such death must be of employees "dependent"; (c) such dependent
must be "legitimate"; and (d) proper legal document to be presented. 18
Atty. Montao found that there was no dispute that the death of an employees legitimate dependent
occurred. The fetus had the right to be supported by the parents from the very moment he/she was
conceived. The fetus had to rely on another for support; he/she could not have existed or sustained
himself/herself without the power or aid of someone else, specifically, his/her mother. Therefore, the
fetus was already a dependent, although he/she died during the labor or delivery. There was also no
question that Hortillano and his wife were lawfully married, making their dependent, unborn child,
legitimate.
In the end, Atty. Montao decreed:
WHEREFORE, premises considered, a resolution is hereby rendered ORDERING [herein petitioner
Continental Steel] to pay Rolando P. Hortillano the amount of Four Thousand Nine Hundred ThirtyNine Pesos (P4,939.00), representing his bereavement leave pay and the amount of Eleven
Thousand Five Hundred Fifty Pesos (P11,550.00) representing death benefits, or a total amount
of P16,489.00
The complaint against Manuel Sy, however, is ORDERED DISMISSED for lack of merit.
All other claims are DISMISSED for lack of merit.
Further, parties are hereby ORDERED to faithfully abide with the herein dispositions.
Aggrieved, Continental Steel filed with the Court of Appeals a Petition for Review on
Certiorari,19 under Section 1, Rule 43 of the Rules of Court, docketed as CA-G.R. SP No. 101697.

Continental Steel claimed that Atty. Montao erred in granting Hortillanos claims for bereavement
leave with pay and other death benefits because no death of an employees dependent had
occurred. The death of a fetus, at whatever stage of pregnancy, was excluded from the coverage of
the CBA since what was contemplated by the CBA was the death of a legal person, and not that of a
fetus, which did not acquire any juridical personality. Continental Steel pointed out that its contention
was bolstered by the fact that the term death was qualified by the phrase legitimate dependent. It
asserted that the status of a child could only be determined upon said childs birth, otherwise, no
such appellation can be had. Hence, the conditions sine qua non for Hortillanos entitlement to
bereavement leave and other death benefits under the CBA were lacking.
The Court of Appeals, in its Decision dated 27 February 2008, affirmed Atty. Montaos Resolution
dated 20 November 2007. The appellate court interpreted death to mean as follows:
[Herein petitioner Continental Steels] exposition on the legal sense in which the term "death" is used
in the CBA fails to impress the Court, and the same is irrelevant for ascertaining the purpose, which
the grant of bereavement leave and death benefits thereunder, is intended to serve. While there is
no arguing with [Continental Steel] that the acquisition of civil personality of a child or fetus is
conditioned on being born alive upon delivery, it does not follow that such event of premature
delivery of a fetus could never be contemplated as a "death" as to be covered by the CBA provision,
undoubtedly an event causing loss and grief to the affected employee, with whom the dead fetus
stands in a legitimate relation. [Continental Steel] has proposed a narrow and technical significance
to the term "death of a legitimate dependent" as condition for granting bereavement leave and death
benefits under the CBA. Following [Continental Steels] theory, there can be no experience of "death"
to speak of. The Court, however, does not share this view. A dead fetus simply cannot be equated
with anything less than "loss of human life", especially for the expectant parents. In this light,
bereavement leave and death benefits are meant to assuage the employee and the latters
immediate family, extend to them solace and support, rather than an act conferring legal status or
personality upon the unborn child. [Continental Steels] insistence that the certificate of fetal death is
for statistical purposes only sadly misses this crucial point. 20
Accordingly, the fallo of the 27 February 2008 Decision of the Court of Appeals reads:
WHEREFORE, premises considered, the present petition is hereby DENIED for lack of merit. The
assailed Resolution dated November 20, 2007 of Accredited Voluntary Arbitrator Atty. Allan S.
Montao is hereby AFFIRMED and UPHELD.
With costs against [herein petitioner Continental Steel]. 21
In a Resolution22 dated 9 May 2008, the Court of Appeals denied the Motion for Reconsideration 23 of
Continental Steel.
Hence, this Petition, in which Continental Steel persistently argues that the CBA is clear and
unambiguous, so that the literal and legal meaning of death should be applied. Only one with
juridical personality can die and a dead fetus never acquired a juridical personality.
We are not persuaded.
As Atty. Montao identified, the elements for bereavement leave under Article X, Section 2 of the
CBA are: (1) death; (2) the death must be of a dependent, i.e., parent, spouse, child, brother, or

sister, of an employee; and (3) legitimate relations of the dependent to the employee. The requisites
for death and accident insurance under Article XVIII, Section 4(3) of the CBA are: (1) death; (2) the
death must be of a dependent, who could be a parent, spouse, or child of a married employee; or a
parent, brother, or sister of a single employee; and (4) presentation of the proper legal document to
prove such death, e.g., death certificate.
It is worthy to note that despite the repeated assertion of Continental Steel that the provisions of the
CBA are clear and unambiguous, its fundamental argument for denying Hortillanos claim for
bereavement leave and other death benefits rests on the purportedly proper interpretation of the
terms "death" and "dependent" as used in the CBA. If the provisions of the CBA are indeed clear and
unambiguous, then there is no need to resort to the interpretation or construction of the same.
Moreover, Continental Steel itself admitted that neither management nor the Union sought to define
the pertinent terms for bereavement leave and other death benefits during the negotiation of the
CBA.
The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code for the legal definition of
death is misplaced. Article 40 provides that a conceived child acquires personality only when it is
born, and Article 41 defines when a child is considered born. Article 42 plainly states that civil
personality is extinguished by death.
First, the issue of civil personality is not relevant herein. Articles 40, 41 and 42 of the Civil Code on
natural persons, must be applied in relation to Article 37 of the same Code, the very first of the
general provisions on civil personality, which reads:
Art. 37. Juridical capacity, which is the fitness to be the subject of legal relations, is inherent in every
natural person and is lost only through death. Capacity to act, which is the power to do acts with
legal effect, is acquired and may be lost.
We need not establish civil personality of the unborn child herein since his/her juridical capacity and
capacity to act as a person are not in issue. It is not a question before us whether the unborn child
acquired any rights or incurred any obligations prior to his/her death that were passed on to or
assumed by the childs parents. The rights to bereavement leave and other death benefits in the
instant case pertain directly to the parents of the unborn child upon the latters death.
Second, Sections 40, 41 and 42 of the Civil Code do not provide at all a definition of death.
Moreover, while the Civil Code expressly provides that civil personality may be extinguished by
death, it does not explicitly state that only those who have acquired juridical personality could die.
And third, death has been defined as the cessation of life.24 Life is not synonymous with civil
personality. One need not acquire civil personality first before he/she could die. Even a child inside
the womb already has life. No less than the Constitution recognizes the life of the unborn from
conception,25 that the State must protect equally with the life of the mother. If the unborn already has
life, then the cessation thereof even prior to the child being delivered, qualifies as death.
Likewise, the unborn child can be considered a dependent under the CBA. As Continental Steel itself
defines, a dependent is "one who relies on another for support; one not able to exist or sustain
oneself without the power or aid of someone else." Under said general definition, 26 even an unborn
child is a dependent of its parents. Hortillanos child could not have reached 38-39 weeks of its
gestational life without depending upon its mother, Hortillanos wife, for sustenance. Additionally, it is

explicit in the CBA provisions in question that the dependentmay be the parent, spouse, or child of a
married employee; or the parent, brother, or sister of a single employee. The CBA did not provide a
qualification for the child dependent, such that the child must have been born or must have acquired
civil personality, as Continental Steel avers. Without such qualification, then child shall be
understood in its more general sense, which includes the unborn fetus in the mothers womb.
The term legitimate merely addresses the dependent childs status in relation to his/her parents.
In Angeles v. Maglaya,27 we have expounded on who is a legitimate child, viz:
A legitimate child is a product of, and, therefore, implies a valid and lawful marriage. Remove the
element of lawful union and there is strictly no legitimate filiation between parents and child. Article
164 of the Family Code cannot be more emphatic on the matter: "Children conceived or born during
the marriage of the parents are legitimate." (Emphasis ours.)
Conversely, in Briones v. Miguel,28 we identified an illegitimate child to be as follows:
The fine distinctions among the various types of illegitimate children have been eliminated in the
Family Code. Now, there are only two classes of children -- legitimate (and those who, like the
legally adopted, have the rights of legitimate children) and illegitimate. All children conceived and
born outside a valid marriage are illegitimate, unless the law itself gives them legitimate status.
(Emphasis ours.)
It is apparent that according to the Family Code and the afore-cited jurisprudence, the legitimacy or
illegitimacy of a child attaches upon his/her conception. In the present case, it was not disputed that
Hortillano and his wife were validly married and that their child was conceived during said marriage,
hence, making said child legitimate upon her conception.
1avvphi1

Also incontestable is the fact that Hortillano was able to comply with the fourth element entitling him
to death and accident insurance under the CBA, i.e., presentation of the death certificate of his
unborn child.
Given the existence of all the requisites for bereavement leave and other death benefits under the
CBA, Hortillanos claims for the same should have been granted by Continental Steel.
We emphasize that bereavement leave and other death benefits are granted to an employee to give
aid to, and if possible, lessen the grief of, the said employee and his family who suffered the loss of
a loved one. It cannot be said that the parents grief and sense of loss arising from the death of their
unborn child, who, in this case, had a gestational life of 38-39 weeks but died during delivery, is any
less than that of parents whose child was born alive but died subsequently.
Being for the benefit of the employee, CBA provisions on bereavement leave and other death
benefits should be interpreted liberally to give life to the intentions thereof. Time and again, the Labor
Code is specific in enunciating that in case of doubt in the interpretation of any law or provision
affecting labor, such should be interpreted in favor of labor.29 In the same way, the CBA and CBA
provisions should be interpreted in favor of labor. InMarcopper Mining v. National Labor Relations
Commission,30 we pronounced:
Finally, petitioner misinterprets the declaration of the Labor Arbiter in the assailed decision that
"when the pendulum of judgment swings to and fro and the forces are equal on both sides, the same

must be stilled in favor of labor." While petitioner acknowledges that all doubts in the interpretation of
the Labor Code shall be resolved in favor of labor, it insists that what is involved-here is the
amended CBA which is essentially a contract between private persons. What petitioner has lost sight
of is the avowed policy of the State, enshrined in our Constitution, to accord utmost protection and
justice to labor, a policy, we are, likewise, sworn to uphold.
In Philippine Telegraph & Telephone Corporation v. NLRC [183 SCRA 451 (1990)], we categorically
stated that:
When conflicting interests of labor and capital are to be weighed on the scales of social justice, the
heavier influence of the latter should be counter-balanced by sympathy and compassion the law
must accord the underprivileged worker.
Likewise, in Terminal Facilities and Services Corporation v. NLRC [199 SCRA 265 (1991)], we
declared:
Any doubt concerning the rights of labor should be resolved in its favor pursuant to the social justice
policy.
IN VIEW WHEREOF, the Petition is DENIED. The Decision dated 27 February 2008 and Resolution
dated 9 May 2008 of the Court of Appeals in CA-G.R. SP No. 101697, affirming the Resolution dated
20 November 2007 of Accredited Voluntary Arbitrator Atty. Allan S. Montao, which granted to
Rolando P. Hortillano bereavement leave pay and other death benefits in the amounts of Four
Thousand Nine Hundred Thirty-Nine Pesos (P4,939.00) and Eleven Thousand Five Hundred Fifty
Pesos (P11,550.00), respectively, grounded on the death of his unborn child, are AFFIRMED. Costs
against Continental Steel Manufacturing Corporation.
SO ORDERED.