EVIDENCE

A. Preliminary Consideration

Ong Chia vs Republic

SECOND DIVISION

G.R. No. 127240 March 27, 2000

ONG CHIA, petitioner,

vs.
REPUBLIC OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.

MENDOZA, J.:

This is a petition for review of the decision1 of the Court of Appeals reversing the decision of the
Regional Trial Court, Branch 24, Koronadal, South Cotabato2 admitting petitioner Ong Chia to
Philippine citizenship.

The facts are as follows:

Petitioner was born on January 1, 1923 in Amoy, China. In 1932, as a nine-year old boy, he
arrived at the port of Manila on board the vessel "Angking." Since then, he has stayed in the
Philippines where he found employment and eventually started his own business, married a
Filipina, with whom he had four children. On July 4, 1989, at the age of 66, he filed a verified
petition to be admitted as a Filipino citizen under C.A. No. 473, otherwise known as the Revised
Naturalization Law, as amended. Petitioner, after stating his qualifications as required in 2, and
lack of the disqualifications enumerated in 3 of the law, stated

17. That he has heretofore made (a) petition for citizenship under the provisions of Letter
of Instruction No. 270 with the Special Committee on Naturalization, Office of the
Solicitor General, Manila, docketed as SCN Case No. 031776, but the same was not acted
upon owing to the fact that the said Special Committee on Naturalization was not
reconstituted after the February, 1986 revolution such that processing of petitions for
naturalization by administrative process was suspended;

During the hearings, petitioner testified as to his qualifications and presented three witnesses to
corroborate his testimony. So impressed was Prosecutor Isaac Alvero V. Moran with the
testimony of petitioner that, upon being asked by the court whether the State intended to present
any witness present any witness against him, he remarked:

Actually, Your Honor, with the testimony of the petitioner himself which is rather
surprising, in the sense that he seems to be well-versed with the major portion of the
history of the Philippines, so, on our part, we are convinced, Your Honor Please, that
petitioner really deserves to be admitted as a citizen of the Philippines. And for this
 reason, we do not wish to present any evidence to counteract or refute the testimony of
the witnesses for the petitioner, as well as the petitioner himself.3

Accordingly, on August 25, 1999, the trial court granted the petition and admitted petitioner to
Philippine citizenship. The State, however, through the Office of the Solicitor General, appealed
all the names by which he is or had been known; (2) failed to state all his former placer of
residence in violation of C.A. No. 473, 7; (3) failed to conduct himself in a proper and
irreproachable manner during his entire stay in the Philippines, in violation of 2; (4) has no
known lucrative trade or occupation and his previous incomes have been insufficient or
misdeclared, also in contravention of 2; and (5) failed to support his petition with the
appropriate documentary evidence.4

Annexed to the State's appellant's brief was a copy of a 1977 petition for naturalization filed by
petitioner with the Special Committee on Naturalization in SCN Case No. 031767,5 in which
petitioner stated that in addition to his name of "Ong Chia," he had likewise been known since
childhood as "Loreto Chia Ong." As petitioner, however, failed to state this other name in his
1989 petition for naturalization, it was contended that his petition must fail.6 The state also
annexed income tax returns7 allegedly filed by petitioner from 1973 to 1977 to show that his net
income could hardly support himself and his family. To prove that petitioner failed to conduct
himself in a proper and irreproachable manner during his stay in the Philippines, the State
contended that, although petitioner claimed that he and Ramona Villaruel had been married
twice, once before a judge in 1953, and then again in church in 1977, petitioner actually lived
with his wife without the benefit of marriage from 1953 until they were married in 1977. It was
alleged that petitioner failed to present his 1953 marriage contract, if there be any. The State also
annexed a copy of petitioner's 1977 marriage contract8 and a Joint-Affidavit9 executed by
petitioner and his wife. These documents show that when petitioner married Ramona Villaruel
on February 23, 1977, no marriage license had been required in accordance with Art. 76 of the
Civil Code because petitioner and Ramona Villaruel had been living together as husband and
wife since 1953 without the benefit of marriage. This, according to the State, belies his claim that
when he started living with his wife in 1953, they had already been married.

The State also argued that, as shown by petitioner's Immigrant Certificate of Residence, 10
petitioner resided at "J.M. Basa Street, Iloilo," but he did not include said address in the petition.

On November 15, 1996, the Court of Appeals rendered its decision which, as already noted,
reversed the trial court and denied petitioner's application for naturalization. It ruled that due to
the importance naturalization cases, the State is not precluded from raising questions not
presented in the lower court and brought up for the first time on appeal. 11 The appellate court
held:

As correctly observed by the Office of the Solicitor General, petitioner Ong Chia failed to
state in this present petition for naturalization his other name, "LORETO CHIA ONG,"
which name appeared in his previous application under Letter of Instruction No. 270.
Names and pseudonyms must be stated in the petition for naturalization and failure to
include the same militates against a decision in his favor. . . This is a mandatory
requirement to allow those persons who know (petitioner) by those other names to come
 forward and inform the authorities of any legal objection which might adversely affect
his application for citizenship.

Furthermore, Ong Chia failed to disclose in his petition for naturalization that he formerly
resided in "J.M. Basa St., Iloilo" and "Alimodian, Iloilo." Section 7 of the Revised
Naturalization Law requires the applicant to state in his petition "his present and former
places of residence." This requirement is mandatory and failure of the petitioner to
comply with it is fatal to the petition. As explained by the Court, the reason for the
provision is to give the public, as well as the investigating agencies of the government,
upon the publication of the petition, an opportunity to be informed thereof and voice their
objections against the petitioner. By failing to comply with this provision, the petitioner
is depriving the public and said agencies of such opportunity, thus defeating the purpose
of the law. . .

Ong Chia had not also conducted himself in a proper and irreproachable manner when he
lived-in with his wife for several years, and sired four children out of wedlock. It has
been the consistent ruling that the "applicant's 8-year cohabitation with his wife without
the benefit of clergy and begetting by her three children out of wedlock is a conduct far
from being proper and irreproachable as required by the Revised Naturalization Law",
and therefore disqualifies him from becoming a citizen of the Philippines by
naturalization . . .

Lastly, petitioner Ong Chia's alleged annual income in 1961 of P5,000.00, exclusive of
bonuses, commissions and allowances, is not lucrative income. His failure to file an
income tax return "because he is not liable for income tax yet" confirms that his income
is low. . . "It is not only that the person having the employment gets enough for his
ordinary necessities in life. It must be shown that the employment gives one an income
such that there is an appreciable margin of his income over expenses as to be able to
provide for an adequate support in the event of unemployment, sickness, or disability to
work and thus avoid one's becoming the object of charity or public charge." . . . Now that
they are in their old age, petitioner Ong Chia and his wife are living on the allowance
given to them by their children. The monthly pension given by the elder children of the
applicant cannot be added to his income to make it lucrative because like bonuses,
commissions and allowances, said pensions are contingent, speculative and precarious. . .

Hence, this petition based on the following assignment of errors:

I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN RULING

THAT IN NATURALIZATION CASES, THE APPELLATE COURT CAN DENY AN
APPLICATION FOR PHILIPPINE CITIZENSHIP ON THE BASIS OF DOCUMENTS
NOT PRESENTED BEFORE THE TRIAL COURT AND NOT FORMING PART OF
THE RECORDS OF THE CASE.

II. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER HAS
BEEN KNOWN BY SOME OTHER NAME NOT STATED IN HIS PETITION IS NOT
SUPPORTED BY THE EVIDENCE ON RECORD.
 III. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE
PETITIONER STATED IN HIS PETITION AND ITS ANNEXES HIS PRESENT AND
FORMER PLACES OF RESIDENCE.

IV. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER

FAILED TO CONDUCT HIMSELF IN A PROPER AND IRREPROACHABLE
MANNER IS NOT SUPPORTED BY THE EVIDENCE ON RECORD.

Petitioner's principal contention is that the appellate court erred in considering the documents
which had merely been annexed by the State to its appellant's brief and, on the basis of which,
justified the reversal of the trial court's decision. Not having been presented and formally offered
as evidence, they are mere "scrap(s) of paper devoid of any evidentiary value," 12 so it was
argued, because under Rule 132, 34 of the Revised Rules on Evidence, the court shall consider
no evidence which has not been formally offered.

The contention has no merit. Petitioner failed to note Rule 143 13 of the Rules of Court which
provides that

These rules shall not apply to land registration, cadastral and election cases,
naturalization and insolvency proceedings, and other cases not herein provided for,
except by analogy or in a suppletory character and whenever practicable and convenient.
(Emphasis added).

Prescinding from the above, the rule on formal offer of evidence (Rule 132, 34) now being
invoked by petitioner is clearly not applicable to the present case involving a petition for
naturalization. The only instance when said rules may be applied by analogy or suppletorily in
such cases is when it is "practicable and convenient." That is not the case here, since reliance
upon the documents presented by the State for the first time on appeal, in fact, appears to be the
more practical and convenient course of action considering that decisions in naturalization
proceedings are not covered by the rule on res judicata. 14 Consequently, a final favorable
judgment does not preclude the State from later on moving for a revocation of the grant of
naturalization on the basis of the same documents.

Petitioner claims that as a result of the failure of the State to present and formally offer its
documentary evidence before the trial court, he was denied the right to object against their
authenticity, effectively depriving him of his fundamental right to procedural due process. 15 We
are not persuaded. Indeed, the reason for the rule prohibiting the admission of evidence which
has not been formally offered is to afford the opposite party the chance to object to their
admissibility. 16 Petitioner cannot claim that he was deprived of the right to object to the
authenticity of the documents submitted to the appellate court by the State. He could have
included his objections, as he, in fact, did, in the brief he filed with the Court of Appeals. thus:

The authenticity of the alleged petition for naturalization (SCN Case No. 031767) which
was supposedly filed by Ong Chia under LOI 270 has not been established. In fact, the
case number of the alleged petition for naturalization. . . is 031767 while the case number
of the petition actually filed by the appellee is 031776. Thus, said document is totally
 unreliable and should not be considered by the Honorable Court in resolving the instant
appeal. 17

Indeed, the objection is flimsy as the alleged discrepancy is trivial, and, at most, can be
accounted for as a typographical error on the part of petitioner himself. That "SCN Case No.
031767," a copy of which was annexed to the petition, is the correct case number is confirmed by
the Evaluation Sheet 18 of the Special Committee on Naturalization which was also docketed as
"SCN Case No. 031767." Other than this, petitioner offered no evidence to disprove the
authenticity of the documents presented by the State.

Furthermore, the Court notes that these documents namely, the petition in SCN Case No.
031767, petitioner's marriage contract, the joint affidavit executed by him and his wife, and
petitioner's income tax returns are all public documents. As such, they have been executed
under oath. They are thus reliable. Since petitioner failed to make a satisfactory showing of any
flaw or irregularity that may cast doubt on the authenticity of these documents, it is our
conclusion that the appellate court did not err in relying upon them.

One last point. The above discussion would have been enough to dispose of this case, but to
settle all the issues raised, we shall briefly discuss the effect of petitioner's failure to include the
address "J.M. Basa St., Iloilo" in his petition, in accordance with 7, C.A. No. 473. This address
appears on petitioner's Immigrant Certificate of Residence, a document which forms part of the
records as Annex A of his 1989 petition for naturalization. Petitioner admits that he failed to
mention said address in his petition, but argues that since the Immigrant Certificate of Residence
containing it had been fully published, 19 with the petition and the other annexes, such
publication constitutes substantial compliance with 7. 20 This is allegedly because the
publication effectively satisfied the objective sought to be achieved by such requirement, i.e., to
give investigating agencies of the government the opportunity to check on the background of the
applicant and prevent suppression of information regarding any possible misbehavior on his part
in any community where he may have lived at one time or another. 21 It is settled, however, that
naturalization laws should be rigidly enforced and strictly construed in favor of the government
and against the applicant. 22 As noted by the State, C.A. No. 473, 7 clearly provides that the
applicant for naturalization shall set forth in the petition his present and former places of
residence. 23 This provision and the rule of strict application of the law in naturalization cases
defeat petitioner's argument of "substantial compliance" with the requirement under the Revised
Naturalization Law. On this ground alone, the instant petition ought to be denied.1wphi1.nt

WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the instant petition is
hereby DENIED.

SO ORDERED.

Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur.

Zulueta vs Court of Appeals

SECOND DIVISION

G.R. No. 107383 February 20, 1996

CECILIA ZULUETA, petitioner,

vs.
COURT OF APPEALS and ALFREDO MARTIN, respondents.

DECISION

MENDOZA, J.:

This is a petition to review the decision of the Court of Appeals, affirming the decision of the
Regional Trial Court of Manila (Branch X) which ordered petitioner to return documents and
papers taken by her from private respondent's clinic without the latter's knowledge and consent.

The facts are as follows:

Petitioner Cecilia Zulueta is the wife of private respondent Alfredo Martin. On March 26, 1982,
petitioner entered the clinic of her husband, a doctor of medicine, and in the presence of her
mother, a driver and private respondent's secretary, forcibly opened the drawers and cabinet in
her husband's clinic and took 157 documents consisting of private correspondence between Dr.
Martin and his alleged paramours, greetings cards, cancelled checks, diaries, Dr. Martin's
passport, and photographs. The documents and papers were seized for use in evidence in a case
for legal separation and for disqualification from the practice of medicine which petitioner had
filed against her husband.

Dr. Martin brought this action below for recovery of the documents and papers and for damages
against petitioner. The case was filed with the Regional Trial Court of Manila, Branch X, which,
after trial, rendered judgment for private respondent, Dr. Alfredo Martin, declaring him "the
capital/exclusive owner of the properties described in paragraph 3 of plaintiff's Complaint or
those further described in the Motion to Return and Suppress" and ordering Cecilia Zulueta and
any person acting in her behalf to a immediately return the properties to Dr. Martin and to pay
him P5,000.00, as nominal damages; P5,000.00, as moral damages and attorney's fees; and to
pay the costs of the suit. The writ of preliminary injunction earlier issued was made final and
petitioner Cecilia Zulueta and her attorneys and representatives were enjoined from "using or
submitting/admitting as evidence" the documents and papers in question. On appeal, the Court of
Appeals affirmed the decision of the Regional Trial Court. Hence this petition.

There is no question that the documents and papers in question belong to private respondent, Dr.
Alfredo Martin, and that they were taken by his wife, the herein petitioner, without his
knowledge and consent. For that reason, the trial court declared the documents and papers to be
properties of private respondent, ordered petitioner to return them to private respondent and
enjoined her from using them in evidence. In appealing from the decision of the Court of
Appeals affirming the trial court's decision, petitioner's only ground is that in Alfredo Martin v.
Alfonso Felix, Jr.,1 this Court ruled that the documents and papers (marked as Annexes A-1 to J-
7 of respondent's comment in that case) were admissible in evidence and, therefore, their use by
petitioner's attorney, Alfonso Felix did not constitute malpractice or gross misconduct, For this
reason it is contended that the Court of Appeals erred in affirming the decision of the trial court
instead of dismissing private respondent's complaint.

Petitioner's contention has no merit. The case against Atty. Felix, Jr. was for disbarment. Among
other things, private respondent, Dr. Alfredo Martin, as complainant in that case, charged that in
using the documents in evidence, Atty. Felix, Jr. committed malpractice or gross misconduct
because of the injunctive order of the trial court. In dismissing the complaint against Atty. Felix,
Jr., this Court took note of the following defense of Atty. Felix; Jr. which it found to be
"impressed with merit:"2

On the alleged malpractice or gross misconduct of respondent [Alfonso Felix, Jr.], he

maintains that:

....

4. When respondent refiled Cecilia's case for legal separation before the Pasig Regional
Trial Court, there was admittedly an order of the Manila Regional Trial Court prohibiting
Cecilia from using the documents Annex "A-1 to J-7." On September 6, 1983, however
having appealed the said order to this Court on a petition for certiorari, this Court issued
a restraining order on aforesaid date which order temporarily set aside the order of the
trial court. Hence, during the enforceability of this Court's order, respondent's request for
petitioner to admit the genuineness and authenticity of the subject annexes cannot be
looked upon as malpractice. Notably, petitioner Dr. Martin finally admitted the truth and
authenticity of the questioned annexes, At that point in time, would it have been
malpractice for respondent to use petitioner's admission as evidence against him in the
legal separation case pending in the Regional Trial Court of Makati? Respondent submits
it is not malpractice.

Significantly, petitioner's admission was done not thru his counsel but by Dr. Martin
himself under oath, Such verified admission constitutes an affidavit, and, therefore,
receivable in evidence against him. Petitioner became bound by his admission. For
Cecilia to avail herself of her husband's admission and use the same in her action for
legal separation cannot be treated as malpractice.

Thus, the acquittal of Atty. Felix, Jr. in the administrative case amounts to no more than a
declaration that his use of the documents and papers for the purpose of securing Dr. Martin's
admission as to their genuiness and authenticity did not constitute a violation of the injunctive
order of the trial court. By no means does the decision in that case establish the admissibility of
the documents and papers in question.
It cannot be overemphasized that if Atty. Felix, Jr. was acquitted of the charge of violating the
writ of preliminary injunction issued by the trial court, it was only because, at the time he used
the documents and papers, enforcement of the order of the trial court was temporarily restrained
by this Court. The TRO issued by this Court was eventually lifted as the petition for certiorari
filed by petitioner against the trial court's order was dismissed and, therefore, the prohibition
against the further use of the documents and papers became effective again.

Indeed the documents and papers in question are inadmissible in evidence. The constitutional
injunction declaring "the privacy of communication and correspondence [to be] inviolable"3 is no
less applicable simply because it is the wife (who thinks herself aggrieved by her husband's
infidelity) who is the party against whom the constitutional provision is to be enforced. The only
exception to the prohibition in the Constitution is if there is a "lawful order [from a] court or
when public safety or order requires otherwise, as prescribed by law."4 Any violation of this
provision renders the evidence obtained inadmissible "for any purpose in any proceeding." 5

The intimacies between husband and wife do not justify any one of them in breaking the drawers
and cabinets of the other and in ransacking them for any telltale evidence of marital infidelity. A
person, by contracting marriage, does not shed his/her integrity or his right to privacy as an
individual and the constitutional protection is ever available to him or to her.

The law insures absolute freedom of communication between the spouses by making it
privileged. Neither husband nor wife may testify for or against the other without the consent of
the affected spouse while the marriage subsists.6 Neither may be examined without the consent
of the other as to any communication received in confidence by one from the other during the
marriage, save for specified exceptions.7 But one thing is freedom of communication; quite
another is a compulsion for each one to share what one knows with the other. And this has
nothing to do with the duty of fidelity that each owes to the other.

WHEREFORE, the petition for review is DENIED for lack of merit.

SO ORDERED.

Regalado, Romero and Puno, JJ., concur.

People of the Philippines vs Yatar

EN BANC

G.R. No. 150224 May 19, 2004

PEOPLE OF THE PHILIPPINES, appellee,
vs.
JOEL YATAR alias "KAWIT", appellant.

DECISION

PER CURIAM:

On automatic review is a Decision of the Regional Trial Court of Bulanao, Tabuk, Kalinga,
Branch 25, sentencing appellant Joel Yatar alias "Kawit" to Death for the special complex crime
of Rape with Homicide, and ordering him to pay the heirs of the victim, Kathylyn D. Uba, civil
indemnity in the amount of P75,000.00, moral damages in the amount of P200,000.00,
exemplary damages in the amount of P50,000.00, actual damages in the amount of P186,410.00,
or total damages amounting to P511,410.00, and costs of litigation.1

Appellant was charged with Rape with Homicide under the following Information:

That on or about the afternoon of June 30, 1998 at Liwan West, Rizal, Kalinga, and
within the jurisdiction of this Honorable Court, the accused, in order to have carnal
knowledge of a certain KATHYLYN D. UBA, did then and there wilfully, unlawfully,
and feloniously, and with use of a bladed weapon stab the latter inflicting upon her fatal
injuries resulting in the death of the victim, and on the occasion or by reason thereof,
accused, wilfully, unlawfully and feloniously, and by means of force and violence had
carnal knowledge of said Kathlyn D. Uba against her will.

CONTRARY TO LAW.2

The facts are:

On June 30, 1998, at 8:30 a.m., Judilyn Pas-a and her first cousin, seventeen year old
Kathylyn Uba, were on the ground floor of the house of their grandmother, Isabel
Dawang, in Liwan West, Rizal, Kalinga. They were talking about the letter sent by their
aunt, Luz Yatar, to her husband, appellant Joel Yatar, through Kathylyns friend, Cecil
Casingan. Kathylyn handed the letter to appellant earlier that morning.3

At 9:00 a.m. of the same day, Judilyn and her husband, together with Isabel Dawang, left for
their farm in Nagbitayan some two kilometers away. Before Judilyn and her husband departed,
Kathylyn told Judilyn that she intended to go to Tuguegarao, but in the event she would not be
able to leave, she would just stay home and wash her clothes or go to the house of their aunt,
Anita Wania. Kathylyn was left alone in the house.4

Later, at 10:00 a.m., Anita Wania and fifteen year old Beverly Deneng stopped by the house of
Isabel. They saw appellant at the back of the house. They went inside the house through the back
door of the kitchen to have a drink of water. Anita asked appellant what he was doing there, and
he replied that he was getting lumber to bring to the house of his mother.5
At 12:30 p.m., while Judilyn was on her way home from Nagbitayan, she saw appellant descend
the ladder from the second floor of the house of Isabel Dawang and run towards the back of the
house.6 She later noticed appellant, who was wearing a white shirt with collar and black pants,
pacing back and forth at the back of the house. She did not find this unusual as appellant and his
wife used to live in the house of Isabel Dawang.7

At 1:30 p.m., Judilyn again saw appellant when he called her near her house. This time, he was
wearing a black shirt without collar and blue pants. Appellant told her that he would not be
getting the lumber he had stacked, and that Isabel could use it. She noticed that appellants eyes
were "reddish and sharp." Appellant asked her where her husband was as he had something
important to tell him. Judilyns husband then arrived and appellant immediately left and went
towards the back of the house of Isabel.8

In the evening of the same day, Isabel Dawang arrived home and found that the lights in her
house were off. She called out for her granddaughter, Kathylyn Uba. The door to the ground
floor was open. She noticed that the water container she asked Kathylyn to fill up earlier that day
was still empty. She went up the ladder to the second floor of the house to see if Kathylyn was
upstairs. She found that the door was tied with a rope, so she went down to get a knife. While she
groped in the dark, she felt a lifeless body that was cold and rigid.9

Isabel moved her hand throughout the entire body. She found out that it was the naked body of
her granddaughter, Kathylyn. She called for help. Judilyn and her husband arrived. Isabel was
given a flashlight by Judilyn. She focused the beam and saw Kathylyn sprawled on the floor
naked, with her intestines protruding out of her stomach. Meanwhile, neighbors had arrived to
offer assistance. A daughter of Isabel, Cion, called the police.10

At 9:00 that evening, SP04 Melchor Faniswa received a report that a dead woman was found in
Isabel Dawangs house. Together with fellow police officers, Faniswa went to the house and
found the naked body of Kathylyn Uba with multiple stab wounds.

The people in the vicinity informed the police officers that appellant was seen going down the
ladder of the house of Isabel Dawang at approximately 12:30 p.m.

The police discovered the victims panties, brassiere, denim pants, bag and sandals beside her
naked cadaver at the scene of the crime, and they found a dirty white shirt splattered with blood
within 50 meters from the house of Isabel.

When questioned by the police authorities, appellant denied any knowledge of Kathylynss
death,11 however, he was placed under police custody.

On July 3, 1998, appellant asked the police officers if he could relieve himself. Police Officer
Cesar Abagan accompanied him to the toilet around seven to ten meters away from the police
station. They suddenly heard someone shout in the Ilocano dialect, "Nagtaray!" (Hes running
away!). Police Officer Orlando Manuel exited through the gate of the Police Station and saw
appellant running away. Appellant was approximately 70 meters away from the station when
Police Officer Abagan recaptured him.12 He was charged with Rape with Homicide. When he
was arraigned on July 21, 1998, appellant pleaded "not guilty."

After trial, appellant was convicted of the crime of Rape with Homicide, defined and penalized
under Article 266-A of the Revised Penal Code, as amended by R.A. 8353, otherwise known as
the Anti-Rape Law of 1997, and was accordingly, sentenced to Death.

Hence, this automatic review pursuant to Article 47 of the Revised Penal Code, as amended. In
his Brief, appellant assigns the following errors:

THE TRIAL COURT GRAVELY ERRED IN GIVING MUCH WEIGHT TO THE

EVIDENCE PRESENTED BY THE PROSECUTION NOTWITHSTANDING THEIR
DOUBTFULNESS.

II

THE TRIAL COURT SERIOUSLY ERRED IN NOT ACQUITTING THE ACCUSED-

APPELLANT OF THE SERIOUS CRIME CHARGED DUE TO REASONABLE
DOUBT.

Appellants contentions are unmeritorious.

The issue regarding the credibility of the prosecution witnesses should be resolved against
appellant. This Court will not interfere with the judgment of the trial court in determining the
credibility of witnesses unless there appears in the record some fact or circumstance of weight
and influence which has been overlooked or the significance of which has been misinterpreted.13
Well-entrenched is the rule that the findings of the trial court on credibility of witnesses are
entitled to great weight on appeal unless cogent reasons are presented necessitating a
reexamination if not the disturbance of the same; the reason being that the former is in a better
and unique position of hearing first hand the witnesses and observing their deportment, conduct
and attitude.14 Absent any showing that the trial judge overlooked, misunderstood, or misapplied
some facts or circumstances of weight which would affect the result of the case, the trial judges
assessment of credibility deserves the appellate courts highest respect.15 Where there is nothing
to show that the witnesses for the prosecution were actuated by improper motive, their
testimonies are entitled to full faith and credit.16

The weight of the prosecutions evidence must be appreciated in light of the well-settled rule
which provides that an accused can be convicted even if no eyewitness is available, as long as
sufficient circumstantial evidence is presented by the prosecution to prove beyond doubt that the
accused committed the crime.17

Reference to the records will show that a total of eleven (11) wounds, six (6) stab and five (5)
incised, were found on the victims abdomen and back, causing a portion of her small intestines
to spill out of her body.18 Rigor mortis of the vicitms body was complete when Dr. Bartolo
examined the victim at 9:00 a.m. on July 1, 1998. According to him, the time of death may be
approximated from between nine (9) to twelve (12) hours prior to the completion of rigor
mortis.19 In other words, the estimated time of death was sometime between 9:00 a.m. to 12:00
p.m. on June 30, 1998. This was within the timeframe within which the lone presence of
appellant lurking in the house of Isabel Dawang was testified to by witnesses.

It should also be noted that, although the Postmortem Report by the attending physician, Dr. Pej
Evan C. Bartolo, indicates that no hymenal lacerations, contusions or hematoma were noted on
the victim,20 Dr. Bartolo discovered the presence of semen in the vaginal canal of the victim.
During his testimony, Dr. Bartolo stated that the introduction of semen into the vaginal canal
could only be done through sexual intercourse with the victim.21 In addition, it is apparent from
the pictures submitted by the prosecution that the sexual violation of the victim was manifested
by a bruise and some swelling in her right forearm indicating resistance to the appellants assault
on her virtue.22

Significantly, subsequent testing showed that the Deoxyribonucleic acid (DNA) of the sperm
specimen from the vagina of the victim was identical the semen to be that of appellants gene
type.

DNA is a molecule that encodes the genetic information in all living organisms.23 A persons
DNA is the same in each cell and it does not change throughout a persons lifetime; the DNA in
a persons blood is the same as the DNA found in his saliva, sweat, bone, the root and shaft of
hair, earwax, mucus, urine, skin tissue, and vaginal and rectal cells.24 Most importantly, because
of polymorphisms in human genetic structure, no two individuals have the same DNA, with the
notable exception of identical twins.25

DNA print or identification technology has been advanced as a uniquely effective means to link
a suspect to a crime, or to exonerate a wrongly accused suspect, where biological evidence has
been left. For purposes of criminal investigation, DNA identification is a fertile source of both
inculpatory and exculpatory evidence. It can assist immensely in effecting a more accurate
account of the crime committed, efficiently facilitating the conviction of the guilty, securing the
acquittal of the innocent, and ensuring the proper administration of justice in every case.

DNA evidence collected from a crime scene can link a suspect to a crime or eliminate one from
suspicion in the same principle as fingerprints are used.26 Incidents involving sexual assault
would leave biological evidence such as hair, skin tissue, semen, blood, or saliva which can be
left on the victims body or at the crime scene. Hair and fiber from clothing, carpets, bedding, or
furniture could also be transferred to the victims body during the assault.27 Forensic DNA
evidence is helpful in proving that there was physical contact between an assailant and a victim.
If properly collected from the victim, crime scene or assailant, DNA can be compared with
known samples to place the suspect at the scene of the crime.28

The U.P. National Science Research Institute (NSRI), which conducted the DNA tests in this
case, used the Polymerase chain reaction (PCR) amplification method by Short Tandem Repeat
(STR) analysis. With PCR testing, tiny amounts of a specific DNA sequence can be copied
exponentially within hours. Thus, getting sufficient DNA for analysis has become much easier
since it became possible to reliably amplify small samples using the PCR method.

In assessing the probative value of DNA evidence, courts should consider, inter alia, the
following factors: how the samples were collected, how they were handled, the possibility of
contamination of the samples, the procedure followed in analyzing the samples, whether the
proper standards and procedures were followed in conducting the tests, and the qualification of
the analyst who conducted the tests.29

In the case at bar, Dr. Maria Corazon Abogado de Ungria was duly qualified by the prosecution
as an expert witness on DNA print or identification techniques.30 Based on Dr. de Ungrias
testimony, it was determined that the gene type and DNA profile of appellant are identical to that
of the extracts subject of examination.31 The blood sample taken from the appellant showed that
he was of the following gene types: vWA 15/19, TH01 7/8, DHFRP2 9/10 and CSF1PO 10/11,
which are identical with semen taken from the victims vaginal canal.32 Verily, a DNA match
exists between the semen found in the victim and the blood sample given by the appellant in
open court during the course of the trial.

Admittedly, we are just beginning to integrate these advances in science and technology in the
Philippine criminal justice system, so we must be cautious as we traverse these relatively
uncharted waters. Fortunately, we can benefit from the wealth of persuasive jurisprudence that
has developed in other jurisdictions. Specifically, the prevailing doctrine in the U.S. has proven
instructive.

In Daubert v. Merrell Dow,33 it was ruled that pertinent evidence based on scientifically valid
principles could be used as long as it was relevant and reliable. Judges, under Daubert, were
allowed greater discretion over which testimony they would allow at trial, including the
introduction of new kinds of scientific techniques. DNA typing is one such novel procedure.

Under Philippine law, evidence is relevant when it relates directly to a fact in issue as to induce
belief in its existence or non-existence.34 Applying the Daubert test to the case at bar, the DNA
evidence obtained through PCR testing and utilizing STR analysis, and which was appreciated
by the court a quo is relevant and reliable since it is reasonably based on scientifically valid
principles of human genetics and molecular biology.

Independently of the physical evidence of appellants semen found in the victims vaginal canal,
the trial court appreciated the following circumstantial evidence as being sufficient to sustain a
conviction beyond reasonable doubt: (1) Appellant and his wife were living in the house of
Isabel Dawang together with the victim, Kathylyn Uba; (2) In June 1998, appellants wife left
the house because of their frequent quarrels; (3) Appellant received from the victim, Kathylyn
Uba, a letter from his estranged wife in the early morning on June 30, 1998; (4) Appellant was
seen by Apolonia Wania and Beverly Denneng at 1:00 p.m. of June 30, 1998 near the kitchen of
the house of Isabel Dawang, acting strangely and wearing a dirty white shirt with collar; (5)
Judilyn Pas-a saw appellant going down the ladder of the house of Isabel at 12:30 p.m., wearing
a dirty white shirt, and again at 1:30 p.m., this time wearing a black shirt; (6) Appellant hurriedly
left when the husband of Judilyn Pas-a was approaching; (7) Salmalina Tandagan saw appellant
in a dirty white shirt coming down the ladder of the house of Isabel on the day Kathylyn Uba
was found dead; (8) The door leading to the second floor of the house of Isabel Dawang was tied
by a rope; (9) The victim, Kathylyn Uba, lay naked in a pool of blood with her intestines
protruding from her body on the second floor of the house of Isabel Dawang, with her stained
pants, bra, underwear and shoes scattered along the periphery; (10) Laboratory examination
revealed sperm in the victims vagina (Exhibit "H" and "J"); (11) The stained or dirty white shirt
found in the crime scene was found to be positive with blood; (12) DNA of slide, Exhibit "J" and
"H", compared with the DNA profile of the appellant are identical; and (13) Appellant escaped
two days after he was detained but was subsequently apprehended, such flight being indicative of
guilt.35

Circumstantial evidence, to be sufficient to warrant a conviction, must form an unbroken chain

which leads to a fair and reasonable conclusion that the accused, to the exclusion of others, is the
perpetrator of the crime. To determine whether there is sufficient circumstantial evidence, three
requisites must concur: (1) there is more than one circumstance; (2) facts on which the inferences
are derived are proven; and (3) the combination of all the circumstances is such as to produce a
conviction beyond reasonable doubt.36

In an attempt to exclude the DNA evidence, the appellant contends that the blood sample taken
from him as well as the DNA tests were conducted in violation of his right to remain silent as
well as his right against self-incrimination under Secs. 12 and 17 of Art. III of the Constitution.

This contention is untenable. The kernel of the right is not against all compulsion, but against
testimonial compulsion.37 The right against self- incrimination is simply against the legal process
of extracting from the lips of the accused an admission of guilt. It does not apply where the
evidence sought to be excluded is not an incrimination but as part of object evidence.

We ruled in People v. Rondero38 that although accused-appellant insisted that hair samples were
forcibly taken from him and submitted to the National Bureau of Investigation for forensic
examination, the hair samples may be admitted in evidence against him, for what is proscribed is
the use of testimonial compulsion or any evidence communicative in nature acquired from the
accused under duress.

Hence, a person may be compelled to submit to fingerprinting, photographing, paraffin, blood

and DNA, as there is no testimonial compulsion involved. Under People v. Gallarde,39 where
immediately after the incident, the police authorities took pictures of the accused without the
presence of counsel, we ruled that there was no violation of the right against self-incrimination.
The accused may be compelled to submit to a physical examination to determine his involvement
in an offense of which he is accused.

It must also be noted that appellant in this case submitted himself for blood sampling which was
conducted in open court on March 30, 2000, in the presence of counsel.

Appellant further argues that the DNA tests conducted by the prosecution against him are
unconstitutional on the ground that resort thereto is tantamount to the application of an ex-post
facto law.
This argument is specious. No ex-post facto law is involved in the case at bar. The science of
DNA typing involves the admissibility, relevance and reliability of the evidence obtained under
the Rules of Court. Whereas an ex-post facto law refers primarily to a question of law, DNA
profiling requires a factual determination of the probative weight of the evidence presented.

Appellants twin defense of denial and alibi cannot be sustained. The forensic DNA evidence
and bloodied shirt, notwithstanding the eyewitness accounts of his presence at Isabel Dawangs
house during the time when the crime was committed, undeniably link him to the June 30, 1998
incident. Appellant did not demonstrate with clear and convincing evidence an impossibility to
be in two places at the same time, especially in this case where the two places are located in the
same barangay.40 He lives within a one hundred (100) meter radius from the scene of the crime,
and requires a mere five minute walk to reach one house from the other. This fact severely
weakens his alibi.

As to the second assignment of error, appellant asserts that the court a quo committed reversible
error in convicting him of the crime charged. He alleges that he should be acquitted on
reasonable doubt.

Appellants assertion cannot be sustained.

Generally, courts should only consider and rely upon duly established evidence and never on
mere conjectures or suppositions. The legal relevancy of evidence denotes "something more than
a minimum of probative value," suggesting that such evidentiary relevance must contain a "plus
value."41 This may be necessary to preclude the trial court from being satisfied by matters of
slight value, capable of being exaggerated by prejudice and hasty conclusions. Evidence without
"plus value" may be logically relevant but not legally sufficient to convict. It is incumbent upon
the trial court to balance the probative value of such evidence against the likely harm that would
result from its admission.

The judgment in a criminal case can be upheld only when there is relevant evidence from which
the court can properly find or infer that the accused is guilty beyond reasonable doubt. Proof
beyond reasonable doubt requires moral certainty of guilt in order to sustain a conviction. Moral
certainty is that degree of certainty that convinces and directs the understanding and satisfies the
reason and judgment of those who are bound to act conscientiously upon it. It is certainty beyond
reasonable doubt.42 This requires that the circumstances, taken together, should be of a
conclusive nature and tendency; leading, on the whole, to a satisfactory conclusion that the
accused, and no one else, committed the offense charged.43 In view of the totality of evidence
appreciated thus far, we rule that the present case passes the test of moral certainty.

However, as a matter of procedure, and for the purpose of meeting the requirement of proof
beyond reasonable doubt, motive is essential for conviction when there is doubt as to the identity
of the culprit.44

Pertinently, it must be noted that Judilyn Pas-a, first cousin of the victim, testified that she last
saw the victim alive in the morning of June 30, 1998 at the house of Isabel Dawang.45 She
witnessed the appellant running down the stairs of Isabels house and proceeding to the back of
the same house.46 She also testified that a few days before the victim was raped and killed, the
latter revealed to her that "Joel Yatar attempted to rape her after she came from the school."47
The victim told Judilyn about the incident or attempt of the appellant to rape her five days before
her naked and violated body was found dead in her grandmothers house on June 25, 1998.48 In
addition, Judilyn also testified that when her auntie Luz Dawang Yatar, wife of appellant,
separated from her husband, "this Joel Yatar threatened to kill our family."49 According to
Judilyn, who was personally present during an argument between her aunt and the appellant, the
exact words uttered by appellant to his wife in the Ilocano dialect was, "If you leave me, I will
kill all your family and your relatives x x x."50 These statements were not contradicted by
appellant.

Thus, appellants motive to sexually assault and kill the victim was evident in the instant case. It
is a rule in criminal law that motive, being a state of mind, is established by the testimony of
witnesses on the acts or statements of the accused before or immediately after the commission of
the offense, deeds or words that may express it or from which his motive or reason for
committing it may be inferred.51

Accordingly, we are convinced that the appellant is guilty beyond reasonable doubt of the special
complex crime of rape with homicide. Appellant sexually assaulted Kathylyn Uba, and by reason
or on the occasion thereof, in order to conceal his lustful deed, permanently sealed the victims
lips by stabbing her repeatedly, thereby causing her untimely demise.

The following are the elements constitutive of rape with homicide: (1) the appellant had carnal
knowledge of a woman; (2) carnal knowledge of a woman was achieved by means of force,
threat or intimidation; and (3) by reason or on the occasion of such carnal knowledge by means
of force, threat or intimidation, appellant killed the woman.52 However, in rape committed by
close kin, such as the victims father, step-father, uncle, or the common-law spouse of her
mother, it is not necessary that actual force or intimidation be employed.53 Moral influence or
ascendancy takes the place of violence and intimidation.54 The fact that the victims hymen is
intact does not negate a finding that rape was committed as mere entry by the penis into the lips
of the female genital organ, even without rupture or laceration of the hymen, suffices for
conviction of rape.55 The strength and dilatability of the hymen are invariable; it may be so
elastic as to stretch without laceration during intercourse. Absence of hymenal lacerations does
not disprove sexual abuse especially when the victim is of tender age.56

In the case at bar, appellant is the husband of the victims aunt. He is seven years older than the
victim Kathylyn Uba. Before he and his wife separated, appellant lived in the house of his
mother-in-law, together with the victim and his wife. After the separation, appellant moved to
the house of his parents, approximately one hundred (100) meters from his mother-in-laws
house. Being a relative by affinity within the third civil degree, he is deemed in legal
contemplation to have moral ascendancy over the victim.

Under Article 266-B of the Revised Penal Code, the penalty of death is imposed when by reason
or on the occasion of the rape, homicide is committed. Although three (3) Justices of this Court
maintain their position that R.A. 7659 is unconstitutional insofar as it prescribes the death
penalty, they nevertheless submit to the ruling of the majority that the law is not unconstitutional,
and that the death penalty can be lawfully imposed in the case at bar.

As to damages, civil indemnity ex delicto of P100,000.00,57 actual damages incurred by the

family of the victim that have been proved at the trial amounting to P93,190.00,58 and moral
damages of P75,000.0059 should be awarded in the light of prevailing law and jurisprudence.
Exemplary damages cannot be awarded as part of the civil liability since the crime was not
committed with one or more aggravating circumstances.60

WHEREFORE, in view of the foregoing, the Decision of the RTC of Bulanao, Tabuk, Kalinga,
Branch 25 in Criminal Case No. 35-98, sentencing appellant Joel Yatar alias "Kawit" to Death
for the special complex crime of Rape with Homicide is AFFIRMED with the
MODIFICATION that he be ORDERED to pay the family of the victim Kathylyn Uba civil
indemnity ex delicto in the amount of P100,000.00, P93,190.00 in actual damages and
P75,000.00 in moral damages. The award of exemplary damages is DELETED.

Upon the finality of this Decision and in accordance with Art. 83 of the Revised Penal Code, as
amended by Sec. 25 of Rep. Act No. 7659, let the records of this case be forthwith forwarded to
the President of the Philippines for the possible exercise of the pardoning power.

Costs de oficio.

SO ORDERED.

Tating vs Marcella

THIRD DIVISION

G.R. No. 155208 March 27, 2007

NENA LAZALITA* TATING, Petitioner,

vs.
FELICIDAD TATING MARCELLA, represented by SALVADOR MARCELLA,
CARLOS TATING, and the COURT OF APPEALS, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Assailed in the Special Civil Action for Certiorari before the Court are the Decision1 dated
February 22, 2002 and the Resolution dated August 22, 2002 of the Court of Appeals (CA) in
CA-G.R. CV No. 64122, which affirmed the Decision2 of the Regional Trial Court (RTC) of
Cadiz City, Negros Occidental, Branch 60.
The present case arose from a controversy involving a parcel of land denominated as Lot 56 of
Subdivision plan Psd-31182, located at Abelarde St., Cadiz City, Negros Occidental. The subject
lot, containing an area of 200 square meters, was owned by Daniela Solano Vda. de Tating
(Daniela) as evidenced by Transfer Certificate of Title (TCT) No. T-4393 issued by the Registry
of Deeds of the City of Cadiz.3

On October 14, 1969, Daniela sold the subject property to her granddaughter, herein petitioner
Nena Lazalita Tating (Nena). The contract of sale was embodied in a duly notarized Deed of
Absolute Sale executed by Daniela in favor of Nena.4 Subsequently, title over the subject
property was transferred in the name of Nena.5 She declared the property in her name for tax
purposes and paid the real estate taxes due thereon for the years 1972, 1973, 1975 to 1986 and
1988.6 However, the land remained in possession of Daniela.

On December 28, 1977, Daniela executed a sworn statement claiming that she had actually no
intention of selling the property; the true agreement between her and Nena was simply to transfer
title over the subject property in favor of the latter to enable her to obtain a loan by mortgaging
the subject property for the purpose of helping her defray her business expenses; she later
discovered that Nena did not secure any loan nor mortgage the property; she wants the title in the
name of Nena cancelled and the subject property reconveyed to her.7

Daniela died on July 29, 19888 leaving her children as her heirs, namely: Ricardo, Felicidad,
Julio, Carlos and Cirilo who predeceased Daniela and was represented by herein petitioner.

In a letter dated March 1, 1989, Carlos informed Nena that when Daniela died they discovered
the sworn statement she executed on December 28, 1977 and, as a consequence, they are
demanding from Nena the return of their rightful shares over the subject property as heirs of
Daniela.9 Nena did not reply. Efforts to settle the case amicably proved futile.

Hence, on September 6, 1989, Carlos and Felicidad, represented by her son Salvador, filed a
complaint with the RTC of Cadiz City, Negros Occidental against Nena praying for the
nullification of the Deed of Absolute Sale executed by Daniela in her favor, cancellation of the
TCT issued in the name of Nena, and issuance of a new title and tax declaration in favor of the
heirs of Daniela.10 The complaint also prayed for the award of moral and exemplary damages as
well as attorneys fees and litigation expenses. On March 19, 1993, the plaintiffs filed an
amended complaint with leave of court for the purpose of excluding Ricardo as a party plaintiff,
he having died intestate and without issue in March 1991.11 He left Carlos, Felicidad, Julio, and
Nena as his sole heirs.

In her Answer, Nena denied that any fraud or misrepresentation attended the execution of the
subject Deed of Absolute Sale. She also denied having received the letter of her uncle, Carlos.
She prayed for the dismissal of the complaint, and in her counterclaim, she asked the trial court
for the award of actual, exemplary and moral damages as well as attorneys fees and litigation
expenses.12

Trial ensued. On November 4, 1998, the RTC rendered judgment with the following dispositive
portion:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the
plaintiffs and against the defendant, and hereby declaring the document of sale dated October 14,
1969 (Exh. "Q") executed between Daniela Solano Vda. de Tating and Nena Lazalita Tating as
NULL and VOID and further ordering:

1. The Register of Deeds of Cadiz City to cancel TCT No. 5975 and in lieu thereof to
issue a new title in the names of Carlos Tating, Pro-indiviso owner of one-fourth ()
portion of the property; Felicidad Tating Marcella, Pro-indiviso owner of one-fourth ()
portion; Julio Tating, Pro-indiviso owner of one-fourth () portion and Nena Lazalita
Tating, Pro-indiviso owner of one-fourth () portion, all of lot 56 after payment of the
prescribed fees;

2. The City Assessor of the City of Cadiz to cancel Tax Declaration No. 143-00672 and
in lieu thereof issue a new Tax Declaration in the names of Carlos Tating, Pro-indiviso
portion; Felicidad Tating Marcella, Pro-indiviso portion; Julio Tating, Pro-indiviso
portion; and Nena Lazalita Tating, Pro-indiviso portion, all of lot 56 as well as the
house standing thereon be likewise declared in the names of the persons mentioned in the
same proportions as above-stated after payment of the prescribed fees;

3. The defendant is furthermore ordered to pay plaintiffs the sum of P20,000.00 by way
of moral damages, P10,000.00 by way of exemplary damages, P5,000.00 by way of
attorneys fees and P3,000.00 by way of litigation expenses; and to

4. Pay the costs of suit.

SO ORDERED.13

Nena filed an appeal with the CA. On February 22, 2002, the CA rendered its Decision affirming
the judgment of the RTC.14

Nenas Motion for Reconsideration was denied by the CA in its Resolution dated August 22,
2002.15

Hence, herein petition for certiorari anchored on the ground that the CA "has decided the instant
case without due regard to and in violation of the applicable laws and Decisions of this
Honorable Court and also because the Decision of the Regional Trial Court, which it has
affirmed, is not supported by and is even against the evidence on record."16

At the outset, it must be stated that the filing of the instant petition for certiorari under Rule 65
of the Rules of Court is inappropriate. Considering that the assailed Decision and Resolution of
the CA finally disposed of the case, the proper remedy is a petition for review under Rule 45 of
the Rules of Court.

The Court notes that while the instant petition is denominated as a Petition for Certiorari under
Rule 65 of the Rules of Court, there is no allegation that the CA committed grave abuse of
discretion. On the other hand, the petition actually avers errors of judgment, rather than of
jurisdiction, which are the proper subjects of a petition for review on certiorari. Hence, in
accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, the
Court decided to treat the present petition for certiorari as having been filed under Rule 45,
especially considering that it was filed within the reglementary period for filing the same.17

As to the merits of the case, petitioner contends that the case for the private respondents rests on
the proposition that the Deed of Absolute Sale dated October 14, 1969 is simulated because
Danielas actual intention was not to dispose of her property but simply to help petitioner by
providing her with a collateral. Petitioner asserts that the sole evidence which persuaded both the
RTC and the CA in holding that the subject deed was simulated was the Sworn Statement of
Daniela dated December 28, 1977. However, petitioner argues that said Sworn Statement should
have been rejected outright by the lower courts considering that Daniela has long been dead
when the document was offered in evidence, thereby denying petitioner the right to cross-
examine her.

Petitioner also contends that while the subject deed was executed on October 14, 1969, the
Sworn Statement was purportedly executed only on December 28, 1977 and was discovered only
after the death of Daniela in 1994.18 Petitioner argues that if the deed of sale is indeed simulated,
Daniela would have taken action against the petitioner during her lifetime. However, the fact
remains that up to the time of her death or almost 20 years after the Deed of Absolute Sale was
executed, she never uttered a word of complaint against petitioner.

Petitioner further asserts that the RTC and the CA erred in departing from the doctrine held time
and again by the Supreme Court that clear, strong and convincing evidence beyond mere
preponderance is required to show the falsity or nullity of a notarial document. Petitioner also
argues that the RTC and the CA erred in its pronouncement that the transaction between Daniela
and petitioner created a trust relationship between them because of the settled rule that where the
terms of a contract are clear, it should be given full effect.

In their Comment and Memorandum, private respondents contend that petitioner failed to show
that the CA or the RTC committed grave abuse of discretion in arriving at their assailed
judgments; that Danielas Sworn Statement is sufficient evidence to prove that the contract of
sale by and between her and petitioner was merely simulated; and that, in effect, the agreement
between petitioner and Daniela created a trust relationship between them.

The Court finds for the petitioner.

The CA and the trial court ruled that the contract of sale between petitioner and Daniela is
simulated. A contract is simulated if the parties do not intend to be bound at all (absolutely
simulated) or if the parties conceal their true agreement (relatively simulated).19 The primary
consideration in determining the true nature of a contract is the intention of the parties.20 Such
intention is determined from the express terms of their agreement as well as from their
contemporaneous and subsequent acts.21

In the present case, the main evidence presented by private respondents in proving their
allegation that the subject deed of sale did not reflect the true intention of the parties thereto is
the sworn statement of Daniela dated December 28, 1977. The trial court admitted the said sworn
statement as part of private respondents evidence and gave credence to it. The CA also accorded
great probative weight to this document.

There is no issue in the admissibility of the subject sworn statement. However, the admissibility
of evidence should not be equated with weight of evidence.22 The admissibility of evidence
depends on its relevance and competence while the weight of evidence pertains to evidence
already admitted and its tendency to convince and persuade.23 Thus, a particular item of evidence
may be admissible, but its evidentiary weight depends on judicial evaluation within the
guidelines provided by the rules of evidence.24 It is settled that affidavits are classified as hearsay
evidence since they are not generally prepared by the affiant but by another who uses his own
language in writing the affiants statements, which may thus be either omitted or misunderstood
by the one writing them.25 Moreover, the adverse party is deprived of the opportunity to cross-
examine the affiant.26 For this reason, affidavits are generally rejected for being hearsay, unless
the affiants themselves are placed on the witness stand to testify thereon.27 The Court finds that
both the trial court and the CA committed error in giving the sworn statement probative weight.
Since Daniela is no longer available to take the witness stand as she is already dead, the RTC and
the CA should not have given probative value on Danielas sworn statement for purposes of
proving that the contract of sale between her and petitioner was simulated and that, as a
consequence, a trust relationship was created between them.

Private respondents should have presented other evidence to sufficiently prove their allegation
that Daniela, in fact, had no intention of disposing of her property when she executed the subject
deed of sale in favor of petitioner. As in all civil cases, the burden is on the plaintiff to prove the
material allegations of his complaint and he must rely on the strength of his evidence and not on
the weakness of the evidence of the defendant.28 Aside from Danielas sworn statement, private
respondents failed to present any other documentary evidence to prove their claim. Even the
testimonies of their witnesses failed to establish that Daniela had a different intention when she
entered into a contract of sale with petitioner.

In Suntay v. Court of Appeals,29 the Court ruled that the most protuberant index of simulation is
the complete absence, on the part of the vendee, of any attempt in any manner to assert his rights
of ownership over the disputed property.30 In the present case, however, the evidence clearly
shows that petitioner declared the property for taxation and paid realty taxes on it in her name.
Petitioner has shown that from 1972 to 1988 she religiously paid the real estate taxes due on the
said lot and that it was only in 1974 and 1987 that she failed to pay the taxes thereon. While tax
receipts and declarations and receipts and declarations of ownership for taxation purposes are
not, in themselves, incontrovertible evidence of ownership, they constitute at least proof that the
holder has a claim of title over the property.31 The voluntary declaration of a piece of property
for taxation purposes manifests not only ones sincere and honest desire to obtain title to the
property and announces his adverse claim against the State and all other interested parties, but
also the intention to contribute needed revenues to the Government.32 Such an act strengthens
ones bona fide claim of acquisition of ownership.33 On the other hand, private respondents
failed to present even a single tax receipt or declaration showing that Daniela paid taxes due on
the disputed lot as proof that she claims ownership thereof. The only Tax Declaration in the
name of Daniela, which private respondents presented in evidence, refers only to the house
standing on the lot in controversy.34 Even the said Tax Declaration contains a notation that herein
petitioner owns the lot (Lot 56) upon which said house was built.

Moreover, the Court agrees with petitioner that if the subject Deed of Absolute Sale did not
really reflect the real intention of Daniela, why is it that she remained silent until her death; she
never told any of her relatives regarding her actual purpose in executing the subject deed; she
simply chose to make known her true intentions through the sworn statement she executed on
December 28, 1977, the existence of which she kept secret from her relatives; and despite her
declaration therein that she is appealing for help in order to get back the subject lot, she never
took any concrete step to recover the subject property from petitioner until her death more than
ten years later.

It is true that Daniela retained physical possession of the property even after she executed the
subject Absolute Deed of Sale and even after title to the property was transferred in petitioners
favor. In fact, Daniela continued to occupy the property in dispute until her death in 1988 while,
in the meantime, petitioner continued to reside in Manila. However, it is well-established that
ownership and possession are two entirely different legal concepts.35 Just as possession is not a
definite proof of ownership, neither is non-possession inconsistent with ownership. The first
paragraph of Article 1498 of the Civil Code states that when the sale is made through a public
instrument, the execution thereof shall be equivalent to the delivery of the thing which is the
object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.
Possession, along with ownership, is transferred to the vendee by virtue of the notarized deed of
conveyance.36 Thus, in light of the circumstances of the present case, it is of no legal
consequence that petitioner did not take actual possession or occupation of the disputed property
after the execution of the deed of sale in her favor because she was already able to perfect and
complete her ownership of and title over the subject property.

As to Danielas affidavit dated June 9, 1983, submitted by petitioner, which confirmed the
validity of the sale of the disputed lot in her favor, the same has no probative value, as the sworn
statement earlier adverted to, for being hearsay. Naturally, private respondents were not able to
cross-examine the deceased-affiant on her declarations contained in the said affidavit.

However, even if Danielas affidavit of June 9, 1983 is disregarded, the fact remains that private
respondents failed to prove by clear, strong and convincing evidence beyond mere
preponderance of evidence37 that the contract of sale between Daniela and petitioner was
simulated. The legal presumption is in favor of the validity of contracts and the party who
impugns its regularity has the burden of proving its simulation.38 Since private respondents failed
to discharge the burden of proving their allegation that the contract of sale between petitioner
and Daniela was simulated, the presumption of regularity and validity of the October 14, 1969
Deed of Absolute Sale stands.

Considering that the Court finds the subject contract of sale between petitioner and Daniela to be
valid and not fictitious or simulated, there is no more necessity to discuss the issue as to whether
or not a trust relationship was created between them.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court
of Appeals in CA-G.R. CV No. 64122, affirming the Decision of the Regional Trial Court of
Cadiz City, Negros Occidental, Branch 60, in Civil Case No. 278-C, are REVERSED AND
SET ASIDE. The complaint of the private respondents is DISMISSED.

No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

People of the Philippines vs Salafranca

FIRST DIVISION

G.R. No. 173476 February 22, 2012

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
RODRIGO SALAFRANCA y BELLO, Accused-Appellant.

DECISION

BERSAMIN, J.:

An ante-mortem declaration of a victim of murder, homicide, or parricide that meets the

conditions of admissibility under the Rules of Court and pertinent jurisprudence is admissible
either as a dying declaration or as a part of the res gestae, or both.

Rodrigo Salafranca y Bello was charged with and tried for murder for the fatal stabbing of
Johnny Bolanon, and was ultimately found guilty of the felony by the Regional Trial Court,
Branch 18, in Manila on September 23, 2004. On appeal, his conviction was affirmed by the
Court of Appeals (CA) through its decision promulgated on November 24, 2005.1

Salafranca has come to the Court on a final appeal, continuing to challenge the credibility of the
witnesses who had incriminated him.

The established facts show that past midnight on July 31, 1993 Bolanon was stabbed near the
Del Pan Sports Complex in Binondo, Manila; that after stabbing Bolanon, his assailant ran away;
that Bolanon was still able to walk to the house of his uncle Rodolfo B. Estao in order to seek
help; that his uncle rushed him to the Philippine General Hospital by taxicab; that on their way to
the hospital Bolanon told Estao that it was Salafranca who had stabbed him; that Bolanon
eventually succumbed at the hospital at 2:30 am despite receiving medical attention; and that the
stabbing of Bolanon was personally witnessed by Augusto Mendoza, then still a minor of 13
years, who was in the complex at the time.2

As stated, Salafranca fled after stabbing Bolanon. He evaded arrest for a long period, despite the
warrant for his arrest being issued. He was finally arrested on April 23, 2003, and detained at the
Manila City Jail.

After trial, the RTC convicted Salafranca, stating:

The evidence is clear that it was Rodrigo Salafranca who delivered two (2) stabbing blows to the
victim while holding Johnny Bolanon with his left arm encircled around Bolanons neck
stabbing the latter with the use of his right hand at the right sub costal area which caused
Bolanons death. Not only because it was testified to by Augusto Mendoza but corroborated by
Rodolfo Estao, the victims uncle who brought Bolanon to the hospital and who relayed to the
court that when he aided Bolanon and even on their way to the hospital while the latter was
suffering from hard breathing, victim Bolanon was able to say that it was Rodrigo Salafranca
who stabbed him.3

The RTC appreciated treachery based on the testimony of Prosecution witness Mendoza on how
Salafranca had effected his attack

against Bolanon, observing that by "encircling his (accused) left arm, while behind the victim on
the latters neck and stabbing the victim with the use of his right hand," Salafranca did not give
Bolanon "any opportunity to defend himself."4 The RTC noted inconsistencies in Salafrancas
and his witness testimonies, as well as the fact that he had fled from his residence the day after
the incident and had stayed away in Bataan for eight years until his arrest. The RTC opined that
had he not been hiding, there would be no reason for him to immediately leave his residence,
especially because he was also working near the area.5

The RTC disposed thus:

With the above observations and findings, accused Rodrigo Salafranca is hereby found guilty of
the crime of Murder defined and punished under Article 248 as amended by Republic Act No.
7659 in relation to Article 63 of the Revised Penal Code with the presence of the qualifying
aggravating circumstance of treachery (248 par. 1 as amended) without any mitigating nor other
aggravating circumstance attendant to its commission, Rodrigo Salafranca is hereby sentenced to
suffer the penalty of reclusion perpetua.

He shall be credited with the full extent of his preventive imprisonment under Article 29 of the
Revised Penal Code.

His body is hereby committed to the custody of the Director of the Bureau of Correction,
National Penitentiary, Muntinlupa City thru the City Jail Warden of Manila.

He is hereby ordered to indemnify the heirs of the victim the sum of P50,000.00 representing
death indemnity.
There being no claim of other damages, no pronouncement is hereby made.

SO ORDERED.6

On appeal, the CA affirmed the findings and conclusions of the RTC,7 citing the dying
declaration made to his uncle pointing to Salafranca as his assailant,8 and Salafrancas positive
identification as the culprit by Mendoza.9 It stressed that Salafrancas denial and his alibi of
being in his home during the incident did not overcome the positive identification, especially as
his unexplained flight after the stabbing, leaving his home and employment, constituted a
circumstance highly indicative of his guilt.10

Presently, Salafranca reiterates his defenses, and insists that the State did not prove his guilt
beyond reasonable doubt.

The appeal lacks merit.

Discrediting Mendoza and Estao as witnesses against Salafranca would be unwarranted. The
RTC and the CA correctly concluded that Mendoza and Estao were credible and reliable. The
determination of the competence and credibility of witnesses at trial rested primarily with the
RTC as the trial court due to its unique and unequalled position of observing their deportment
during testimony, and of assessing their credibility and appreciating their truthfulness, honesty
and candor. Absent a substantial reason to justify the reversal of the assessment made and
conclusions reached by the RTC, the CA as the reviewing court was bound by such assessment
and conclusions,11 considering that the CA as the appellate court could neither substitute its
assessment nor draw different conclusions without a persuasive showing that the RTC
misappreciated the circumstances or omitted significant evidentiary matters that would alter the
result.12 Salafranca did not persuasively show a misappreciation or omission by the RTC. Hence,
the Court, in this appeal, is in no position to undo or to contradict the findings of the RTC and
the CA, which were entitled to great weight and respect.13

Salafrancas denial and alibi were worthless in the face of his positive identification by Mendoza
as the assailant of Bolanon. The lower courts properly accorded full faith to such incrimination
by Mendoza considering that Salafranca did not even project any ill motive that could have
impelled Mendoza to testify against him unless it was upon the truth.14

Based on Mendozas account, Salafranca had attacked Bolanon from behind and had "encircled
his left arm over the neck (of Bolanon) and delivered the stabbing blow using the right(hand) and
coming from wnnt (sic) up right sideways and another one encircling the blow towards below the
left nipple."15 Relying on Mendozas recollection of how Salafranca had attacked Bolanon, the
RTC found treachery to be attendant in the killing. This finding the CA concurred with. We join
the CAs concurrence because Mendozas eyewitness account of the manner of attack remained
uncontested by Salafranca who merely insisted on his alibi. The method and means Salafranca
employed constituted a surprise deadly attack against Bolanon from behind and included an
aggressive physical control of the latters movements that ensured the success of the attack
without any retaliation or defense on the part of Bolanon. According to the Revised Penal
Code,16 treachery is present when the offender commits any of the crimes against the person,
employing means, methods or forms in the execution thereof which tend directly and specially to
insure its execution, without risk to himself arising from the defense which the offended party
might make.

The Court further notes Estaos testimony on the utterance by Bolanon of statements
identifying Salafranca as his assailant right after the stabbing incident. The testimony follows:

Q Can you tell what happened on the said date?

A My nephew arrived in our house with a stab wound on his left chest.

Q What time was that?

A 12:50 a.m.

Q When you saw your nephew with a stab wound, what did he say?

A "Tito dalhin mo ako sa Hospital sinaksak ako."

Q What did you do?

A I immediately dressed up and brought him to PGH.

Q On the way to the PGH what transpired?

A While traveling toward PGH I asked my nephew who stabbed him?, and he answered, Rod
Salafranca.

Q Do you know this Rod Salafranca?

A Yes, Sir.

Q How long have you known him?

A "Matagal na ho kasi mag-neighbor kami."

Q If you see him inside the courtroom will you be able to identify him?

A Yes, Sir.

Q Will you look around and point him to us?

A (Witness pointing to a man who answered by the name of Rod Salafranca.)

COURT
When he told you the name of his assailant what was his condition?

A He was suffering from hard breathing so I told him not to talk anymore because he will just
suffer more.

Q What happened when you told him that?

A He kept silent.

Q What time did you arrive at the PGH?

A I cannot remember the time because I was already confused at that time.

Q When you arrived at the PGH what happened?

A He was brought to Emergency Room.

Q When he was brought to the emergency room what happened?

A He was pronounced dead.17

It appears from the foregoing testimony that Bolanon had gone to the residence of Estao, his
uncle, to seek help right after being stabbed by Salafranca; that Estao had hurriedly dressed up
to bring his nephew to the Philippine General Hospital by taxicab; that on the way to the
hospital, Estao had asked Bolanon who had stabbed him, and the latter had told Estao that his
assailant had been Salafranca; that at the time of the utterance Bolanon had seemed to be having
a hard time breathing, causing Estao to advise him not to talk anymore; and that about ten
minutes after his admission at the emergency ward of the hospital, Bolanon had expired and had
been pronounced dead. Such circumstances qualified the utterance of Bolanon as both a dying
declaration and as part of the res gestae, considering that the Court has recognized that the
statement of the victim an hour before his death and right after the hacking incident bore all the
earmarks either of a dying declaration or part of the res gestae either of which was an exception
to the hearsay rule.18

A dying declaration, although generally inadmissible as evidence due to its hearsay character,
may nonetheless be admitted when the following requisites concur, namely: (a) that the
declaration must concern the cause and surrounding circumstances of the declarants death; (b)
that at the time the declaration is made, the declarant is under a consciousness of an impending
death; (c) that the declarant is competent as a witness; and (d) that the declaration is offered in a
criminal case for homicide, murder, or parricide, in which the declarant is a victim.19

All the requisites were met herein. Bolanon communicated his ante-mortem statement to Estao,
identifying Salafranca as the person who had stabbed him. At the time of his statement, Bolanon
was conscious of his impending death, having sustained a stab wound in the chest and, according
to Estao, was then experiencing great difficulty in breathing. Bolanon succumbed in the
hospital emergency room a few minutes from admission, which occurred under three hours after
the stabbing. There is ample authority for the view that the declarants belief in the imminence of
his death can be shown by the declarants own statements or from circumstantial evidence, such
as the nature of his wounds, statements made in his presence, or by the opinion of his
physician.20 Bolanon would have been competent to testify on the subject of the declaration had
he survived. Lastly, the dying declaration was offered in this criminal prosecution for murder in
which Bolanon was the victim.

A declaration or an utterance is deemed as part of the res gestae and thus admissible in evidence
as an exception to the hearsay rule when the following requisites concur, to wit: (a) the principal
act, the res gestae, is a startling occurrence; (b) the statements are made before the declarant had
time to contrive or devise; and (c) the statements must concern the occurrence in question and its
immediately attending circumstances.21

The requisites for admissibility of a declaration as part of the res gestae concur herein. Surely,
when he gave the identity of the assailant to Estao, Bolanon was referring to a startling
occurrence, i.e., his stabbing by Salafranca. Bolanon was then on board the taxicab that would
bring him to the hospital, and thus had no time to contrive his identification of Salafranca as the
assailant. His utterance about Salafranca having stabbed him was made in spontaneity and only
in reaction to the startling occurrence. The statement was relevant because it identified
Salafranca as the perpetrator.

The term res gestae has been defined as "those circumstances which are the undesigned incidents
of a particular litigated act and which are admissible when illustrative of such act."22 In a general
way, res gestae refers to the circumstances, facts, and declarations that grow out of the main fact
and serve to illustrate its character and are so spontaneous and contemporaneous with the main
fact as to exclude the idea of deliberation and fabrication.23 The rule on res gestae encompasses
the exclamations and statements made by either the participants, victims, or spectators to a crime
immediately before, during, or immediately after the commission of the crime when the
circumstances are such that the statements were made as a spontaneous reaction or utterance
inspired by the excitement of the occasion and there was no opportunity for the declarant to
deliberate and to fabricate a false statement.24 The test of admissibility of evidence as a part of
the res gestae is, therefore, whether the act, declaration, or exclamation is so intimately
interwoven or connected with the principal fact or event that it characterizes as to be regarded as
a part of the transaction itself, and also whether it clearly negatives any premeditation or purpose
to manufacture testimony.25

We modify the limiting of civil damages by the CA and the RTC to only the death indemnity of
P50,000.00. We declare that the surviving heirs of Bolanon were entitled by law to more than
such indemnity, because the damages to be awarded when death occurs due to a crime may
include: (a) civil indemnity ex delicto for the death of the victim (which was granted herein); (b)
actual or compensatory damages; (c) moral damages; (d) exemplary damages; and (e) temperate
damages.26

We hold that the CA and the RTC should have further granted moral damages which were
different from the death indemnity.27 The death indemnity compensated the loss of life due to
crime, but appropriate and reasonable moral damages would justly assuage the mental anguish
and emotional sufferings of the surviving family of the victim.28 Although mental anguish and
emotional sufferings of the surviving heirs were not quantifiable with mathematical precision,
the Court must nonetheless strive to set an amount that would restore the heirs of Bolanon to
their moral status quo ante. Given the circumstances, the amount of P50,000.00 is reasonable as
moral damages, which, pursuant to prevailing jurisprudence,29 we are bound to award despite the
absence of any allegation and proof of the heirs mental anguish and emotional suffering. The
rationale for doing so rested on human nature and experience having shown that:

xxx a violent death invariably and necessarily brings about emotional pain and anguish on the
part of the victims family.1wphi1 It is inherently human to suffer sorrow, torment, pain and
anger when a loved one becomes the victim of a violent or brutal killing. Such violent death or
brutal killing not only steals from the family of the deceased his precious life, deprives them
forever of his love, affection and support, but often leaves them with the gnawing feeling that an
injustice has been done to them.30

The CA and the RTC committed another omission consisting in their non-recognition of the right
of the heirs of Bolanon to temperate damages. It is already settled that when actual damages for
burial and related expenses are not substantiated by receipts, temperate damages of at least
P25,000.00 are warranted, for it would certainly be unfair to the surviving heirs of the victim to
deny them compensation by way of actual damages.31

Moreover, the Civil Code provides that exemplary damages may be imposed in criminal cases as
part of the civil liability "when the crime was committed with one or more aggravating
circumstances."32 The Civil Code permits such damages to be awarded "by way of example or
correction for the public good, in addition to the moral, temperate, liquidated or compensatory
damages."33 Conformably with such legal provisions, the CA and the RTC should have
recognized the entitlement of the heirs of the victim to exemplary damages because of the
attendance of treachery. It was of no moment that treachery was an attendant circumstance in
murder, and, as such, inseparable and absorbed in murder. The Court explained so in People v.
Catubig:34

The term "aggravating circumstances" used by the Civil Code, the law not having specified
otherwise, is to be understood in its broad or generic sense. The commission of an offense has a
two-pronged effect, one on the public as it breaches the social order and the other upon the
private victim as it causes personal sufferings, each of which is addressed by, respectively, the
prescription of heavier punishment for the accused and by an award of additional damages to the
victim. The increase of the penalty or a shift to a graver felony underscores the exacerbation of
the offense by the attendance of aggravating circumstances, whether ordinary or qualifying, in its
commission. Unlike the criminal liability which is basically a State concern, the award of
damages, however, is likewise, if not primarily, intended for the offended party who suffers
thereby. It would make little sense for an award of exemplary damages to be due the private
offended party when the aggravating circumstance is ordinary but to be withheld when it is
qualifying. Withal, the ordinary or qualifying nature of an aggravating circumstance is a
distinction that should only be of consequence to the criminal, rather than to the civil, liability of
the offender. In fine, relative to the civil aspect of the case, an aggravating circumstance, whether
ordinary or qualifying, should entitle the offended party to an award of exemplary damages
within the unbridled meaning of Article 2230 of the Civil Code.

For the purpose of fixing the exemplary damages, the sum of P30,000.00 is deemed reasonable
and proper,35 because we think that a lesser amount could not result in genuine exemplarity.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on
November 24, 2005, but MODIFIES the awards of civil damages by adding to the amount of
P50,000.00 awarded as death indemnity the amounts of P50,000.00 as moral damages;
P25,000.00 as temperate damages; and P30,000.00 as exemplary damages, all of which awards
shall bear interest of 6% per annum from the finality of this decision.

The accused shall further pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

SCC Chemicals Corp vs Court of Appeals

SECOND DIVISION

G.R. No. 128538 February 28, 2001

SCC CHEMICALS CORPORATION, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, STATE INVESTMENT HOUSE, INC.,
DANILO ARRIETA and LEOPOLDO HALILI, respondent.

QUISUMBING, J.:

Before us is a petition for review, pursuant to Rule 45 of the Rules of Court, of the Decision of
the Court of Appeals dated in November 12, 1996 in CA-G.R. CV No. 45742 entitled "State
Investment House, Inc., v. Danilo Arrieta, et al., and SCC Chemical Corporation." The
questioned decision affirmed in toto the decision of the Regional Trial Court of Manila, Branch
33, dated March 22, 1993, in Civil Case NO. 84-25881, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the

plaintiff and against the defendants ordering the latter to pay jointly and severally the
plaintiff the following: a) To pay plaintiff State Investment House, Inc., the sum of
P150,483.16 with interest thereon at 30% per annum reckond (sic) from April, 1984 until
 the whole amount is fully paid; b) To pay plaintiff an amount equivalent to 25% of the
total amount due and demandable as attorney's fees and to pay the cost(s) of suit.

SO ORDERED.1

Equally challenged in this petition is the Resolution of the appellate court dated February 27,
1997, denying SCC Chemicals Corporation's motion for reconsideration.

The background of this case, as culled from the decision of the Court of Appeals, is as follows:

On December 13, 1983, SCC Chemicals Corporation (SCC for brevity) through its chairman,
private respondent Danilo Arrieta and vice president, Pablo (Pablito) Bermundo, obtained a loan
from State Investment House Inc., (hereinafter SIHI) in the amount of P129,824.48. The loan
carried an annual interest rate of 30% plus penalty charges of 2% per month on the remaining
balance of the principal upon non-payment on the due date-January 12, 1984. To secure the
payment of the loan, Danilo Arrieta and private respondent Leopoldo Halili executed a
Comprehensive Surety Agreement binding themselves jointly and severally to pay the obligation
on the maturity date. SCC failed to pay the loan when it matured. SIHI then sent demand letters
to SCC, Arrieta and Halili, but notwithstanding receipt thereof, no payment was made.

On August 2, 1984, SIHI filed Civil Case No. 84-25881 for a sum of money with a prayer for
preliminary attachment against SCC, Arrieta, and Halili with the Regional Trial Court of Manila.

In its answer, SCC asserted SIHI's lack of cause of action. Petitioner contended that the
promissory note upon which SIHI anchored its cause of action was null, void, and of no binding
effect for lack or failure of consideration.

The case was then set for pre-trial. The parties were allowed to meet out-of-court in an effort to
settle the dispute amicably. No settlement was reached, but the following stipulation of facts was
agreed upon:

1. Parties agree that this Court has jurisdiction over the plaintiff and the defendant and
that it has jurisdiction to try and decide this case on its merits and that plaintiff and the
defendant have each the capacity to sue and to be sued in this present action;

2. Parties agree that plaintiff sent a demand letter to the defendant SCC Chemical
Corporation dated April 4, 1984 together with a statement of account of even date which
were both received by the herein defendant; and

3. Parties finally agree that the plaintiff and the defendant SCC Chemical Corporation the
latter acting through defendants Danilo E. Arrieta and Pablito Bermundo executed a
promissory note last December 13, 1983 for the amount of P129,824.48 with maturity
date on January 12, 1984.2

The case then proceeded to trial on the sole issue of whether or not the defendants were liable to
the plaintiff and to what extent was the liability.
SIHI presented one witness to prove its claim. The cross-examination of said witness was
postponed several times due to one reason or another at the instance of either party. The case was
calendared several times for hearing but each time, SCC or its counsel failed to appear despite
notice. SCC was finally declared by the trial court to have waived its right to cross-examine the
witness of SIHI and the case was deemed submitted for decision.

On March 22, 1993, the lower court promulgated its decision in favor of SIHI.

Aggrieved by the verdict, SCC elevated the case to the Court of Appeals where it was docketed
as CA-G.R. CV No. 45742.

On appeal, SCC contended that SIHI had failed to show, by a preponderance of evidence, that
the latter had a case against it. SCC argued that the lone witness presented by SIHI to prove its
claim was insufficient as the competency of the witness was not established and there was no
showing that he had personal knowledge of the transaction. SCC further maintained that no proof
was shown of the genuineness of the signatures in the documentary exhibits presented as
evidence and that these signatures were neither marked nor offered in evidence by SIHI. Finally,
SCC pointed out that the original copies of the documents were not presented in court.

On November 12, 1996, the appellate court affirmed in toto the judgment appealed from.

On December 11, 1996 SCC filed its motion for reconsideration, which the Court of Appeals
denied in its resolution dated February 27, 1997.

Hence, petitioner's recourse to this Court relying on the following assignments of error:

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN FINDING THAT

PRIVATE RESPONDENT PROVED ITS CAUSE OF ACTION AND OVERCAME
IT'S BURDEN OF PROOF.

II

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN AWARDING

ATTORNEY'S FEES TO THE PRIVATE RESPONDENT.

We find the pertinent issues submitted for resolution to be:

(1) Whether or not the Court of Appeals made an error of law in holding that private
respondent SIHI had proved its cause of action by preponderant evidence; and

(2) Whether or not the Court of Appeals erred in upholding the award of attorney's fees to
SIHI.
Anent the first issue, petitioner contends that SIHI introduced documentary evidence through the
testimony of a witness whose competence was not established and whose personal knowledge of
the truthfulness of the facts testified to was not demonstrated. It argues that the same was in
violation of Sections 363 and 48,4 Rule 130 of the Rules of Court and it was manifest error for the
Court of Appeals to have ruled otherwise. In addition, SCC points out that the sole witness of
SIHI did not profess to have seen the document presented in evidence executed or written by
SCC. Thus, no proof of its genuineness was adduced. SIHI thus ran afoul of Section 2,5 Rule 132
of the Rules of Court, which requires proof of due execution and authenticity of private
documents before the same can be received as evidence. Petitioner likewise submits that none of
the signatures affixed in the documentary evidence presented by SIHI were offered in evidence.
It vehemently argues that such was in violation of the requirement of Section 34,6 Rule 132 of
the Rules of Court. It was thus an error of law on the part of the appellate court to consider the
same. Finally, petitioner posits that the non-production of the originals of the documents
presented in evidence allows the presumption of suppression of evidence provided for in Section
3 (e),7 Rule 131 of the Rules of Court, to come into play.

Petitioner's arguments lack merit; they fail to persuade us.

We note that the Court of Appeals found that SCC failed to appear several times on scheduled
hearing dates despite due notice to it and counsel. On all those scheduled hearing dates,
petitioner was supposed to cross-examine the lone witness offered by SIHI to prove its case.
Petitioner now charges the appellate court with committing an error of law when it failed to
disallow the admission in evidence of said testimony pursuant to the "hearsay rule" contained in
Section 36, Rule 130 of the Rules of Court.

Rule 130, Section 36 reads:

SEC. 36. Testimony generally confined to personal knowledge; hearsay excluded. A

witness can testify only to those facts which he knows of his personal knowledge; that is,
which are derived from his own perception, except as otherwise provided in these rules.

Petitioner's reliance on Section 36, Rule 130 of the Rules of Court is misplaced. As a rule,
hearsay evidence is excluded and carries no probative value.8 However, the rule does admit of an
exception. Where a party failed to object to hearsay evidence, then the same is admissible.9 The
rationale for this exception is to be found in the right of a litigant to cross-examine. It is settled
that it is the opportunity to cross-examine which negates the claim that the matters testified to by
a witness are hearsay.10 However, the right to cross-examine may be waived. The repeated
failure of a party to cross-examine the witness is an implied waiver of such right. Petitioner was
afforded several opportunities by the trial court to cross-examine the other party's witness.
Petitioner repeatedly failed to take advantage of these opportunities. No error was thus
committed by the respondent court when it sustained the trial court's finding that petitioner had
waived its right to cross-examine the opposing party's witness. It is now too late for petitioner to
be raising this matter of hearsay evidence.

Nor was the assailed testimony hearsay. The Court of Appeals correctly found that the witness of
SIHI was a competent witness as he testified to facts, which he knew of his personal knowledge.
Thus, the requirements of Section 36, Rule 130 of the Rules of Court as to the admissibility of
his testimony were satisfied.

Respecting petitioner's other submissions, the same are moot and academic. As correctly found
by the Court of Appeals, petitioner's admission as to the execution of the promissory note by it
through private respondent Arrieta and Bermundo at pre-trial sufficed to settle the question of the
genuineness of signatures. The admission having been made in a stipulation of facts at pre-trial
by the parties, it must be treated as a judicial admission. Under Section, 411 Rule 129 of the
Rules of Court, a judicial admission requires no proof.

Nor will petitioner's reliance on the "best evidence rule"12 advance its cause. Respondent SIHI
had no need to present the original of the documents as there was already a judicial admission by
petitioner at pre-trial of the execution of the promissory note and receipt of the demand letter. It
is now too late for petitioner to be questioning their authenticity. Its admission of the existence of
these documents was sufficient to establish its obligation. Petitioner failed to submit any
evidence to the contrary or proof of payment or other forms of extinguishment of said obligation.
No reversible error was thus committed by the appellate court when it held petitioner liable on its
obligation, pursuant to Article 1159 of the Civil Code which reads:

ART. 1159. Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.

On the second issue, petitioner charges the Court of Appeals with reversible error for having
sustained the trial court'' award of attorney'' fees. Petitioner relies on Radio Communications of
the Philippines v. Rodriguez, 182 SCRA 899, 909 (1990), where we held that when attorney's
fees are awarded, the reason for the award of attorney's fees must be stated in the text of the
court's decision. Petitioner submits that since the trial court did not state any reason for awarding
the same, the award of attorney's fees should have been disallowed by the appellate
court.1wphi1.nt

We find for petitioner in this regard.

It is settled that the award of attorney's fees is the exception rather than the rule, hence it is
necessary for the trial court to make findings of fact and law, which would bring the case within
the exception and justify the grant of the award.13 Otherwise stated, given the failure by the trial
court to explicitly state the rationale for the award of attorney's fees, the same shall be
disallowed. In the present case, a perusal of the records shows that the trial court failed to explain
the award of attorney's fees. We hold that the same should thereby be deleted.

WHEREFORE, the instant petition is PARTLY GRANTED. The decision dated November
12, 1996 of the Court of Appeals is AFFIRMED WITH MODIFICATION that the award of
attorney's fees to private respondent SIHI is hereby deleted. No pronouncement as to costs.

SO ORDERED.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.

B. What need not be proved

LBP vs Banal

THIRD DIVISION

G.R. No. 143276 July 20, 2004

LANDBANK OF THE PHILIPPINES, petitioner,

vs.
SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL, respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

Spouses Vicente and Leonidas Banal, respondents, are the registered owners of 19.3422 hectares
of agricultural land situated in San Felipe, Basud, Camarines Norte covered by Transfer
Certificate of Title No. T-6296. A portion of the land consisting of 6.2330 hectares (5.4730 of
which is planted to coconut and 0.7600 planted to palay) was compulsorily acquired by the
Department of Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No. 6657,1 as amended,
otherwise known as the Comprehensive Agrarian Reform Law of 1988.

In accordance with the formula prescribed in DAR Administrative Order No. 6, Series of 1992,2
as amended by DAR Administrative Order No. 11, Series of 1994,3 the Land Bank of the
Philippines4 (Landbank), petitioner, made the following valuation of the property:

Acquired Area in hectares Value

property

Coconut land 5.4730 P148,675.19

Riceland 0.7600 25,243.36

P173,918.55

Respondents rejected the above valuation. Thus, pursuant to Section 16(d) of R.A. 6657, as
amended, a summary administrative proceeding was conducted before the Provincial Agrarian
Reform Adjudicator (PARAD) to determine the valuation of the land. Eventually, the PARAD
rendered its Decision affirming the Landbank's valuation.

Dissatisfied with the Decision of the PARAD, respondents filed with the Regional Trial Court
(RTC), Branch 40, Daet, Camarines Norte, designated as a Special Agrarian Court, a petition for
determination of just compensation, docketed as Civil Case No. 6806. Impleaded as respondents
were the DAR and the Landbank. Petitioners therein prayed for a compensation of P100,000.00
per hectare for both coconut land and riceland, or an aggregate amount of P623,000.00.

During the pre-trial on September 23, 1998, the parties submitted to the RTC the following
admissions of facts: (1) the subject property is governed by the provisions of R.A. 6657, as
amended; (2) it was distributed to the farmers-beneficiaries; and (3) the Landbank deposited the
provisional compensation based on the valuation made by the DAR.5

On the same day after the pre-trial, the court issued an Order dispensing with the hearing and
directing the parties to submit their respective memoranda.6

In its Decision dated February 5, 1999, the trial court computed the just compensation for the
coconut land at P657,137.00 and for the riceland at P46,000.00, or a total of P703,137.00, which
is beyond respondents' valuation of P623,000.00. The court further awarded compounded
interest at P79,732.00 in cash. The dispositive portion of the Decision reads:

"WHEREFORE, judgment is hereby rendered as follows:

1. Ordering respondent Landbank to pay the petitioners, the spouses Dr. Vicente Banal
and Leonidas Arenas-Banal, for the 5.4730 hectares of coconut land the sum of SIX
HUNDRED FIFTY-SEVEN THOUSAND ONE HUNDRED THIRTY-SEVEN PESOS
(P657,137.00) in cash and in bonds in the proportion provided by law;

2. Ordering respondent Landbank to pay the petitioners for the .7600 hectares of riceland
the sum of FORTY-SIX THOUSAND PESOS (P46,000.00) in cash and in bonds in the
proportion provided by law; and

3. Ordering respondent Landbank to pay the petitioners the sum of SEVENTY-NINE

THOUSAND SEVEN HUNDRED THIRTY-TWO PESOS (P79,732.00) as the
compounded interest in cash.

IT IS SO ORDERED."7

In determining the valuation of the land, the trial court based the same on the facts established in
another case pending before it (Civil Case No. 6679, "Luz Rodriguez vs. DAR, et al."), using the
following formula:

For the coconut land

 1. Average Gross Production (AGP) x .70 x 9.70 (price per kilo of coconut) = Net
Income (NI)

2. NI / 6% = Price Per Hectare (PPH) (applying the capitalization formula under

Republic Act No. 38448)

For the riceland

1. 2.5 x AGP x Government Support Price (GSP) = Land Value (LV) or PPH
(using the formula under Executive Order No. 2289)

2. AGP x 6% compounded annually for 26 years x GSP = Interest (pursuant to

DAR AO No. 13, Series of 1994)

Forthwith, the Landbank filed with the Court of Appeals a petition for review, docketed as CA-
G.R. SP No. 52163.

On March 20, 2000, the Appellate Court rendered a Decision10 affirming in toto the judgment of
the trial court. The Landbank's motion for reconsideration was likewise denied.11

Hence, this petition for review on certiorari.

The fundamental issue for our resolution is whether the Court of Appeals erred in sustaining the
trial court's valuation of the land. As earlier mentioned, there was no trial on the merits.

To begin with, under Section 1 of Executive Order No. 405 (1990), the Landbank is charged
"primarily" with "the determination of the land valuation and compensation for all private lands
suitable for agriculture under the Voluntary Offer to Sell or Compulsory Acquisition
arrangement" For its part, the DAR relies on the determination of the land valuation and
compensation by the Landbank.12

Based on the Landbank's valuation of the land, the DAR makes an offer to the landowner.13 If
the landowner accepts the offer, the Landbank shall pay him the purchase price of the land after
he executes and delivers a deed of transfer and surrenders the certificate of title in favor of the
government.14 In case the landowner rejects the offer or fails to reply thereto, the DAR
adjudicator15 conducts summary administrative proceedings to determine the compensation for
the land by requiring the landowner, the Landbank and other interested parties to submit
evidence as to the just compensation for the land.16 These functions by the DAR are in
accordance with its quasi-judicial powers under Section 50 of R.A. 6657, as amended, which
provides:

"SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive
original jurisdiction over all matters involving the implementation of agrarian reform,
except those falling under the exclusive jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and Natural Resources (DENR).
 x x x."

A party who disagrees with the decision of the DAR adjudicator may bring the matter to the
RTC designated as a Special Agrarian Court17 "for final determination of just compensation."18

In the proceedings before the RTC, it is mandated to apply the Rules of Court19 and, on its own
initiative or at the instance of any of the parties, "appoint one or more commissioners to
examine, investigate and ascertain facts relevant to the dispute, including the valuation of
properties, and to file a written report thereof x x x."20 In determining just compensation, the
RTC is required to consider several factors enumerated in Section 17 of R.A. 6657, as amended,
thus:

"Sec. 17. Determination of Just Compensation. In determining just compensation, the

cost of acquisition of the land, the current value of like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax declarations, and the assessment
made by government assessors shall be considered. The social and economic benefits
contributed by the farmers and the farmworkers and by the Government to the property,
as well as the non-payment of taxes or loans secured from any government financing
institution on the said land, shall be considered as additional factors to determine its
valuation."

These factors have been translated into a basic formula in DAR Administrative Order No. 6,
Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, issued
pursuant to the DAR's rule-making power to carry out the object and purposes of R.A. 6657, as
amended.21

The formula stated in DAR Administrative Order No. 6, as amended, is as follows:

"LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

LV = Land Value

CNI = Capitalized Net Income

CS = Comparable Sales

MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant and applicable.

A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall
be:

LV = (CNI x 0.9) + (MV x 0.1)

 A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall
be:

LV = (CS x 0.9) + (MV x 0.1)

A.3 When both the CS and CNI are not present and only MV is applicable, the formula
shall be:

LV = MV x 2"

Here, the RTC failed to observe the basic rules of procedure and the fundamental requirements in
determining just compensation for the property. Firstly, it dispensed with the hearing and merely
ordered the parties to submit their respective memoranda. Such action is grossly erroneous since
the determination of just compensation involves the examination of the following factors
specified in Section 17 of R.A. 6657, as amended:

1. the cost of the acquisition of the land;

2. the current value of like properties;

3. its nature, actual use and income;

4. the sworn valuation by the owner; the tax declarations;

5. the assessment made by government assessors;

6. the social and economic benefits contributed by the farmers and the farmworkers and
by the government to the property; and

7. the non-payment of taxes or loans secured from any government financing institution
on the said land, if any.

Obviously, these factors involve factual matters which can be established only during a hearing
wherein the contending parties present their respective evidence. In fact, to underscore the
intricate nature of determining the valuation of the land, Section 58 of the same law even
authorizes the Special Agrarian Courts to appoint commissioners for such purpose.

Secondly, the RTC, in concluding that the valuation of respondents' property is P703,137.00,
merely took judicial notice of the average production figures in the Rodriguez case pending
before it and applied the same to this case without conducting a hearing and worse, without the
knowledge or consent of the parties, thus:

"x x x. In the case x x x of the coconut portion of the land 5.4730 hectares, defendants
determined the average gross production per year at 506.95 kilos only, but in the very
recent case of Luz Rodriguez vs. DAR, et al., filed and decided by this court in Civil
Case No. 6679 also for just compensation for coconut lands and Riceland situated at
 Basud, Camarines Norte wherein also the lands in the above-entitled case are situated,
the value fixed therein was 1,061.52 kilos per annum per hectare for coconut land
and the price per kilo is P8.82, but in the instant case the price per kilo is P9.70. In
the present case, we consider 506.95 kilos average gross production per year per hectare
to be very low considering that farm practice for coconut lands is harvest every forty-five
days. We cannot also comprehended why in the Rodriguez case and in this case there is
a great variance in average production per year when in the two cases the lands are both
coconut lands and in the same place of Basud, Camarines Norte. We believe that it is
more fair to adapt the 1,061.52 kilos per hectare per year as average gross production. In
the Rodriguez case, the defendants fixed the average gross production of palay at 3,000
kilos or 60 cavans per year. The court is also constrained to apply this yearly palay
production in the Rodriguez case to the case at bar.

xxx xxx xxx

"As shown in the Memorandum of Landbank in this case, the area of the coconut land
taken under CARP is 5.4730 hectares. But as already noted, the average gross
production a year of 506.96 kilos per hectare fixed by Landbank is too low as
compared to the Rodriguez case which was 1,061 kilos when the coconut land in
both cases are in the same town of Basud, Camarines Norte, compelling this court
then to adapt 1,061 kilos as the average gross production a year of the coconut land
in this case. We have to apply also the price of P9.70 per kilo as this is the value that
Landbank fixed for this case.

"The net income of the coconut land is equal to 70% of the gross income. So, the net
income of the coconut land is 1,061 x .70 x 9.70 equals P7,204.19 per hectare. Applying
the capitalization formula of R.A. 3844 to the net income of P7,204.19 divided by 6%,
the legal rate of interest, equals P120,069.00 per hectare. Therefore, the just
compensation for the 5.4730 hectares is P657,137.00.

"The Riceland taken under Presidential Decree No. 27 as of October 21, 1972 has an
area of .7600 hectare. If in the Rodriguez case the Landbank fixed the average gross
production of 3000 kilos or 60 cavans of palay per year, then the .7600 hectare in this
case would be 46 cavans. The value of the riceland therefore in this case is 46 cavans x
2.5 x P400.00 equals P46,000.00.22

"PARC Resolution 94-24-1 of 25 October 1994, implemented by DAR AO 13, granted

interest on the compensation at 6% compounded annually. The compounded interest on
the 46 cavans for 26 years is 199.33 cavans. At P400.00 per cavan, the value of the
compounded interest is P79,732.00."23 (emphasis added)

Well-settled is the rule that courts are not authorized to take judicial notice of the contents of the
records of other cases even when said cases have been tried or are pending in the same court or
before the same judge.24 They may only do so "in the absence of objection" and "with the
knowledge of the opposing party,"25 which are not obtaining here.
Furthermore, as earlier stated, the Rules of Court shall apply to all proceedings before the
Special Agrarian Courts. In this regard, Section 3, Rule 129 of the Revised Rules on Evidence is
explicit on the necessity of a hearing before a court takes judicial notice of a certain matter, thus:

"SEC. 3. Judicial notice, when hearing necessary. During the trial, the court, on its own
initiative, or on request of a party, may announce its intention to take judicial notice of
any matter and allow the parties to be heard thereon.

"After the trial, and before judgment or on appeal, the proper court, on its own initiative
or on request of a party, may take judicial notice of any matter and allow the parties to
be heard thereon if such matter is decisive of a material issue in the case." (emphasis
added)

The RTC failed to observe the above provisions.

Lastly, the RTC erred in applying the formula prescribed under Executive Order (EO) No. 22826
and R.A. No. 3844,27 as amended, in determining the valuation of the property; and in granting
compounded interest pursuant to DAR Administrative Order No. 13, Series of 1994.28 It must be
stressed that EO No. 228 covers private agricultural lands primarily devoted to rice and corn,
while R.A. 3844 governs agricultural leasehold relation between "the person who furnishes the
landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person
who personally cultivates the same."29 Here, the land is planted to coconut and rice and does not
involve agricultural leasehold relation. What the trial court should have applied is the formula in
DAR Administrative Order No. 6, as amended by DAR Administrative Order No. 11 discussed
earlier.

As regards the award of compounded interest, suffice it to state that DAR Administrative Order
No. 13, Series of 1994 does not apply to the subject land but to those lands taken under
Presidential Decree No. 2730 and Executive Order No. 228 whose owners have not been
compensated. In this case, the property is covered by R.A. 6657, as amended, and respondents
have been paid the provisional compensation thereof, as stipulated during the pre-trial.

While the determination of just compensation involves the exercise of judicial discretion,
however, such discretion must be discharged within the bounds of the law. Here, the RTC
wantonly disregarded R.A. 6657, as amended, and its implementing rules and regulations. (DAR
Administrative Order No. 6, as amended by DAR Administrative Order No.11).

In sum, we find that the Court of Appeals and the RTC erred in determining the valuation of the
subject land. Thus, we deem it proper to remand this case to the RTC for trial on the merits
wherein the parties may present their respective evidence. In determining the valuation of the
subject property, the trial court shall consider the factors provided under Section 17 of R.A.
6657, as amended, mentioned earlier. The formula prescribed by the DAR in Administrative
Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994,
shall be used in the valuation of the land. Furthermore, upon its own initiative, or at the instance
of any of the parties, the trial court may appoint one or more commissioners to examine,
investigate and ascertain facts relevant to the dispute.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated
March 20, 2000 in CA-G.R. SP No. 52163 is REVERSED. Civil Case No. 6806 is REMANDED
to the RTC, Branch 40, Daet, Camarines Norte, for trial on the merits with dispatch. The trial
judge is directed to observe strictly the procedures specified above in determining the proper
valuation of the subject property.

SO ORDERED.

Panganiban, (Chairman), and Carpio-Morales, JJ., concur.

Corona, J., on leave.

People of the Philippines vs Kulais

FIRST DIVISION

G.R. No. 100901 July 16, 1998

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

JAILON KULAIS, CARLOS FALCASANTOS @ "Commander Falcasantos," AWALON KAMLON HASSAN @ "Commander Kamlon,"
MAJID SAMSON @ "Commander Bungi," JUMATIYA AMLANI DE FALCASANTOS, NORMA SAHIDDAN DE KULAIS, SALVADOR
MAMARIL y MENDOZA, HADJIRUL PLASIN y ALIH, JAINUDDIN HASSAN y AHMAD, IMAM TARUK ALAH y SALIH, JALINA HASSAN
DE KAMMING, FREDDIE MANUEL @ "Ajid" and several JOHN and JANE DOES, accused, JAILON KULAIS, appellant.

PANGANIBAN, J.:

The trial court's erroneous taking of judicial notice of a witness' testimony in another case, also pending before it, does not affect the
conviction of the appellant, whose guilt is proven beyond reasonable doubt by other clear, convincing and overwhelming evidence, both
testimonial and documentary. The Court takes this occasion also to remind the bench and the bar that reclusion perpetua is not synonymous
with life imprisonment.

The Case

On August 22, 1990, five Informations for kidnapping for ransom (Crim. Case Nos. 10060, 10061, 10062, 10063 and 10064) and three
Informations for kidnapping (Crim Case Nos. 10065, 10066 and 10067), all dated August 14, 1990, were filed 1 before the Regional
Trial Court of Zamboanga City against Carlos Falcasantos, Jailon Kulais, Jumatiya Amlani, Norma
Sahiddan de Kulais, Jalina Hassan de Kamming, 2 Salvador Mamaril, Hadjirul Plasin, Jaimuddin Hassan,
Imam 3 Taruk Alah, Freddie Manuel alias "Ajid," and several John and Jane Does. The Informations for
kidnapping for ransom, which set forth identical allegations save for the names of the victims, read as
follows:

That on or about the 12th day of December, 1988, in the City of Zamboanga, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, being all
private individuals, conspiring and confederating together, mutually aiding and assisting
one another, with threats to kill the person of FELIX ROSARIO [in Criminal Case No.
10060] 4 and for the purpose of extorting ransom from the said Felix Rosario or his
families or employer, did then and there, wilfully, unlawfully and feloniously, KIDNAP the
 person of said Felix Rosario, 5 a male public officer of the City Government of
Zamboanga, who was then aboard a Cimarron vehicle with plate No. SBZ-976 which was
being ambushed by the herein accused at the highway of Sitio Tigbao Lisomo,
Zamboanga City, and brought said Felix Rosario 6 to different mountainous places of
Zamboanga City and Zamboanga del Sur, where he was detained, held hostage and
deprived of his liberty until February 2, 1989, the day when he was released only after
payment of the ransom was made to herein accused, to the damage and prejudice of
said victim; there being present an aggravating circumstance in that the aforecited
offense was committed with the aid of armed men or persons who insure or afford
impunity.

The three Informations for kidnapping, also under Article 267 of the Revised Penal Code, likewise alleged
identical facts and circumstances, except the names of the victims:

That on or about the 12th day of December, 1988, in the City of Zamboanga and within
the jurisdiction of this Honorable Court, the above-named accused, being all private
individuals, conspiring and confederating together, mutually aiding and assisting one
another, by means of threats and intimidation of person, did then and there, wilfully,
unlawfully and feloniously KIDNAP, take and drag away and detain the person of
MONICO SAAVEDRA Y LIMEN [Criminal Case No. 10065] 7 a male public officer of the
City Government of Zamboanga, against his will, there being present an aggravating
circumstance in that the aforecited offense was committed with the aid of armed men or
persons who insure or afford impunity.

Of the twelve accused, only nine were apprehended, namely, Jailon Julais, Jumatiya Amlani, Norma
Sahiddan de Kulais, Salvador Mamaril Hadjirul Plasin, Jainuddin Hassan, Imam Taruk Alah, Jalina
Hassan and Freddie Manuel. 8

On their arraignment on September 13, 1990, all the accused pleaded not guilty. Joint trial on the merits
ensued. On April 8, 1991, Judge Pelagio S. Mandi rendered the assailed 36-page Decision, the
dispositive portion of which reads:

WHEREFORE, above premises and discussion taken into consideration, this Court
renders its judgment, ordering and finding:

1. FREDDIE MANUEL, alias "AJID" and IMAM TARUK ALAH y SALIH [n]ot [g]uilty of the
eight charges of [k]idnapping for [r]ansom and for [k]idnapping, their guilt not having been
proved beyond reasonable doubt.

Their immediate release from the City Jail, Zamboanga City is ordered, unless detained
for some other offense besides these 8 cases (Crim. Cases Nos. 10060-10067).

2. JAINUDDIN HASSAN y AHMAD, JAILON KULAIS, SALVADOR MAMARIL y

MENDOZA and HADJIRUL PLASIN y ALIH [g]uilty as principals by conspiracy in all
these 8 cases for [k]idnapping for [r]ansom and for [k]idnapping (Crim. Cases Nos.
10060-10067).

Their guilt is aggravated in that they committed the 8 offenses with the aid of armed men
who insured impunity. Therefore, the penalties imposed on them shall be at their
maximum period.

WHEREFORE, for the five charges of [k]idnapping for [r]ansom, and pursuant to Art. 267
of the Revised Penal Code, five life imprisonments are imposed on Jainuddin Hassan y
Ahmad, Jailon Kulais, Salvador Mamaril y Mendoza and Kadjirul Plasin y Alih (Crim.
Cases Nos. 10060-10064).

For kidnapping Mrs. Virginia San Agustin-Gara, a female and public officer and pursuant
to Art. 267, Revised Penal Code (par. 4.), another life imprisonment is imposed on
Jainuddin Hassan y Ahmad, Jailon Kulais, Salvador Mamaril y Mendoza and Hadjirul
Plasin y Alih (Crim. Case No. 10066)

For kidnapping Monico Saavedra y Limen, and Calixto Francisco y Gaspar, and their
kidnapping not having lasted more than five days, pursuant to Art. 268, Revised Penal
Code, and the Indeterminate Sentence Law, the same four accused Jainuddin Hassan
y Ahmad, Jailon Kulais, Salvador Mamaril y Mendoza and Hadjirul Plasin y Alih are
sentenced to serve two (2) jail terms ranging from ten (10) years of prision mayor as
minimum, to eighteen (18) years of reclusion temporal as maximum (Crim. Cases Nos.
10065 and 10067).

3. JAMATIYA AMLANI DE FALCASANTOS [n]ot [g]uilty in the three charges of

[k]idnapping and she is acquitted of these charges. (Crim. Cases Nos. 10065, 10066 and
10067).

But Jumatiya Amlani de Falcasantos is [g]uilty as accomplice in the five charges of

[k]idnapping for [r]ansom.

WHEREFORE, Jumatiya Amlani de Falcasantos is sentenced to serve five (5)

imprisonments, ranging from TEN (10) YEARS of prision mayor as minimum to
EIGHTEEN (18) YEARS of reclusion temporal as maximum (Crim. Cases Nos. 10060-1
0064).

4. NORMA SAHIDDAN DE KULAIS, 18 years old, and JALIHA HUSSIN (charged as

Jalina Hassan de Kamming), 15 years old, [n]ot [g]uilty in the three charges for
[k]idnapping and are, therefore, ACQUITTED of these three charges. (Crim. Cases Nos.
10065, 10066 & 10067).

But Norma Sahiddan de Kulais and Jalina Hussin are found [g]uilty as accomplices in the
five charges for [k]idnapping for [r]ansom. Being miners, they are entitled to the privileged
mitigating circumstance of minority which lowers the penalty imposable on them by one
degree.

WHEREFORE, Norma Sahiddan de Kulais and Jalina Hussin are sentenced to serve five
imprisonments ranging from SIX (6) YEARS of prision correccional as minimum to TEN
YEARS AND ONE (1) DAY OF prision mayor as maximum (Crim. Cases Nos. 10060-
10064).

Due to the removal of the suspension of sentences of youthful offenders "convicted of an

offense punishable by death or life" by Presidential Decree No. 1179 and Presidential
Decree No. 1210 (of which [k]idnapping for [r]ansom is such an offense) the sentences
on Norma Sahiddan de Kulais and Jaliha Hussin de Kamming are NOT suspended but
must be served by them.

Januddin Hassan, Jailon Kulais, Salvador Mamaril and Hadjirul Plasin are sentenced
further to return the following personal effects taken on December 12, 1988, the day of
the kidnapping, or their value in money, their liability being solidary.
 To Jessica Calunod:

One (1) Seiko wrist watchP P 250.00

One Bracelet P 2,400.00

One Shoulder Bag P 200.00

Cash P 200.00

To Armado C. Bacarro:

One (1) wrist watch P 800.00

One Necklace P 300.00

One Calculator P 295.00

Eyeglasses P 500.00

One Steel Tape P 250.00

To Edilberto S. Perez:

One (1) Rayban P 1,000.00

One Wrist WatchP P 1,800.00

Cash P 300.00

To Virginia San Agustin-

Gara:

One (1)Wrist Watch P 850.00

The benefit of Art. 29, Revised Penal Code, on preventive suspension, shall be extended
to those sentenced.

The cases against Majid Samson, alias "Commander Bungi" Awalon Kamlon a.k.a.
"Commander Kamlon" Carlos Falcasantos and several "John Does" and Jane "Does" are
ARCHIVED until their arrest.

Costs against the accused convicted.

SO ORDERED. 9

On May 7, 1991, Jailon Kulais, Jumatiya Amlani de Falcasantos, Norma Sahiddan de Kulais and Jaliha
Hussin filed their joint Notice of Appeal. 10 In a letter dated February 6, 1997, the same appellants, except
Jailon Kulais, withdrew their appeal because of their application for "amnesty." In our March 19, 1997
Resolution, we granted their motion. Hence, only the appeal of Kulais remains for the consideration of this
Court. 11

The Facts

The Version of the Prosecution

The solicitor general summarized, in this wise, the facts as viewed by the People:

On December 12, 1988, a group of public officials from various government agencies,
organized themselves as a monitoring team to inspect government projects in
Zamboanga City. The group was composed of Virginia Gara, as the head of the team;
Armando Bacarro, representing the Commission on Audit; Felix del Rosario, representing
the non-government: Edilberto Perez, representing the City Assessor's Office; Jessica
Calunod and Allan Basa of the City Budget Office and Monico Saavedra, the driver from
the City Engineer's Office. (p. 3, TSN, October 22, 1990.)

On that particular day, the group headed to the Lincomo Elementary School to check on
two of its classrooms. After inspecting the same, they proceeded to the Talaga
Footbridge. The group was not able to reach the place because on their way, they were
stopped by nine (9) armed men who pointed their guns at them (p. 4, TSN, ibid.).

The group alighted from their Cimarron jeep where they were divested of their personal
belongings. They were then ordered to walk to the mountain by the leader of the armed
men who introduced himself as Commander Falcasantos (p. 5, TSN, ibid.).

While the group was walking in the mountain, they encountered government troops which
caused their group to be divided. Finally, they were able to regroup themselves.
Commander Kamlon with his men joined the others. (pp. 7-8, TSN, ibid.).

The kidnappers held their captives for fifty-four (54) days in the forest. During their
captivity, the victims were able to recognize their captors who were at all times armed
with guns. The wives of the kidnappers performed the basic chores like cooking. (pp. 9-
10. TSN, ibid.)

Commander Falcasantos also ordered their victims to sign the ransom notes which
demanded a ransom of P100,000.00 and P14,000.00 in exchange for twenty (20) sets of
uniform. (p. 15, TSN, ibid.)

On February 3, 1989, at around 12:00 o'clock noontime, the victims were informed that
they would be released. They started walking until around 7:00 o'clock in the evening of
that day. At around 12:00 o'clock midnight, the victims were released after Commander
Falcasantos and Kamlon received the ransom money. (p. 19, TSN, ibid.) The total
amount paid was P122,000.00. The same was reached after several negotiations
between Mayor Vitaliano Agan of Zamboanga City and the representatives of the
kidnappers. (pp. 2, 6, TSN, Nov. 11, 1990)

. . . 12

The prosecution presented fifteen witnesses, including some of the kidnap victims themselves: Jessica
Calunod, Armando Bacarro, Edilberto Perez, Virginia San Agustin-Gara, Calixto Francisco, and Monico
Saavedra.
 The Version of the Defense

13
The facts of the case, according to the defense, are as follows:

On May 28, 1990, at about 10:00 o'clock in the morning, while weeding their farm in
Sinaburan, Zamboanga del Sur, accused-appellant Jumatiya Amlani was picked up by
soldiers and brought to a place where one army battalion was stationed. Thereat, her five
(5) co-accused, namely Salvador Mamaril, Hadjirul Plasin, Jainuddin Hassin, Imam Taruk
Alah and Freddie Manuel were already detained. In the afternoon of the same day,
appellants spouses Jailon Kulais and Norma Sahiddan were brought to the battalion
station and likewise detained thereat. On May 30, 1990, the eight (8) accused were
transported to Metrodiscom, Zamboanga City. Here on the same date, they were joined
by accused-appellant Jaliha Hussin.

At the time Amlani was picked up by the military, she had just escaped from the captivity
of Carlos Falcasantos and company who in 1988 kidnapped and brought her to the
mountains. Against their will, she stayed with Falcasantos and his two wives for two
months, during which she slept with Falcasantos as aide of the wives and was made to
cook food, wash clothes, fetch water and run other errands for everybody. An armed
guard was assigned to watch her, so that, for sometime, she had to bear the ill-treatment
of Falcasantos' other wives one of whom was armed. After about two months, while she
was cooking and Falcasantos and his two wives were bathing in the river, and while her
guard was not looking, she took her chance and made a successful dash for freedom.
(TSN, January 29, 1992, pp. 2-15)

Likewise a kidnap victim herself is accused-appellant Jaliha Hussin, who was thirteen
years old at the time (she was fifteen years old when the trial of the instant cases
commenced). She was kidnapped by Daing Kamming and brought to the mountains
where he slept with her. She stayed with him for less than a month sleeping on forest
ground and otherwise performing housekeeping errands for Kamming and his men. She
made good her escape during an encounter between the group of Kamming and military
troops. She hid in the bushes and came out at Ligui-an where she took a "bachelor" bus
in going back to her mother's house at Pudos, Guiligan, Tungawan, Zamboanga del Sur.
One day, at around 2:00 o'clock in the afternoon, while she was harvesting palay at the
neighboring village of Tigbalangao, military men picked her up to Ticbanuang where
there was an army battalion detachment. From Ticbawuang, she was brought to Vitali,
then to Metrodiscom, Zamboanga City, where on her arrival, she met all the other
accused for the first time except Freddie Manuel. (Ibid., pp. 16-21)

Another female accused is appellant Norma Sahiddan, a native of Sinaburan, Tungawan,

Zamboanga del Sur. At about 3:00 o'clock in the afternoon of a day in May, while she and
her husband were in their farm, soldiers arrested them. The soldiers did not tell them why
they were being arrested, neither were they shown any papers. The two of them were
just made to board a six by six truck. There were no other civilians in the truck. The truck
brought the spouses to the army battalion and placed them inside the building where
there were civilians and soldiers. Among the civilians present were her six co-accused
Hadjirul Plasin, Salvador Mamaril, Jaimuddin Hassan, Ima[m] Taruk Alah, Freddie
Manuel and Jumatiya Amlani. That night, the eight of them were brought to Tictapul,
Zamboanga City; then to Vitali; and, finally, to the Metrodiscom, Zamboanga City where
they stayed for six days and six nights. On the seventh day, the accused were brought to
the City Jail, Zamboanga City. (TSN, January 30, 1991, pp. 6-11)

The husband of Norma Sahiddan is Jailon Kulais who, as heretofore narrated, was
arrested with his wife the day the soldiers came to their farm on May 28, 1990. He has
 shared with his wife the ordeals that followed in the wake of their arrest and in the
duration of their confinement up to the present. (TSN, January 22, 1991 pp. 2-4).

The Trial Court's Ruling

The trial court found Appellant Kulais guilty of five counts of kidnapping for ransom and one count of
kidnapping a woman and public officer, for which offenses it imposed upon him six terms of "life
imprisonment." It also found him guilty of two counts of slight illegal detention for the kidnapping of
Monico Saavedra and Calixto Francisco. The trial court ratiocinated as follows:

Principally, the issue here is one of credibility both of the witnesses and their version
of what had happened on December 12, 1988, to February 3, 1989. On this pivotal issue,
the Court gives credence to [p]rosecution witnesses and their testimonies. Prosecution
evidence is positive, clear and convincing. No taint of evil or dishonest motive was
imputed or imputable to [p]rosecution witnesses. To this Court, who saw all the witnesses
testify, [p]rosecution witnesses testified only because they were impelled by [a] sense of
justice, of duty and of truth.

Contrarily, [d]efense evidence is weak, uncorroborated and consisted only of alibis. The
individual testimonies of the nine accused dwel[t] principally on what happened to each of
them on May 27, 28 and 29, 1990. None of the accused explained where he or she was
on and from December 12, 1988, to February 3, 1989, when [p]rosecution evidence
show[ed] positively seven of the nine accused were keeping the five or six hostages
named by [p]rosecution evidence.

The seven accused positively identified to have been present during the course of the
captivity of the five kidnap-victims-complainants are: (1) Jumatiya Amlani; (2) Jaliha
Hussin; (3) Norma Sahiddan; (4) Jailon Kulais; (5) Hadjirul Plasin; (6) Salvador Mamaril
and (7) Jainuddin Hassan.

The two accused not positively identified are: Freddie Manuel alias "Ajid", and Imam
Taruk Alah. These two must, therefore, be declared acquitted based on reasonable
doubt.

The next important issue to be examined is: Are these seven accused guilty as
conspirators as charged in the eight Informations; or only as accomplices? Prosecution
evidence shows that the kidnapping group to which the seven accused belonged had
formed themselves into an armed band for the purpose of kidnapping for ransom. This
armed band had cut themselves off from established communities, lived in the mountains
and forests, moved from place to place in order to hide their hostages. The wives of
these armed band moved along with their husbands, attending to their needs, giving
them material and moral support. These wives also attended to the needs of the kidnap
victims, sleeping with them or comforting them.

xxx xxx xxx

II The guilt of Jainuddin Hassan, Jailon Kulais, Salvador Mamaril and Hadjirul Plasin. The
Court holds these four men guilty as conspirators in the 8 cases of kidnapping. Unlike the
three women-accused, these male accused were armed. They actively participated in
keeping their hostages by fighting off the military and CAFGUS, in transferring their
hostages from place to place, and in guarding the kidnap hostages. Salvador Mamaril
and Jailon Kulais were positively identified as among the nine armed men who had
kidnapped the eight kidnap victims on December 12, 1988.
 The higher degree of participation found by the Court of the four accused is supported by
the rulings of our Supreme Court quoted below.

(1) The time-honored jurisprudence is that direct proof is not essential to prove
conspiracy. It may be shown by a number of infinite acts, conditions and circumstances
which may vary according to the purposes to be accomplished and from which may
logically be inferred that there was a common design, understanding or agreement
among the conspirators to commit the offense charged. (People vs. Cabrera, 43 Phil 64;
People vs. Carbonel, 48 Phil. 868.)

(2) The crime must, therefore, in view of the solidarity of the act and intent which existed
between the sixteen accused, be regarded as the act of the band or party created by
them, and they are all equally responsible for the murder in question. (U.S. vs. Bundal, et.
al. 3 Phil 89, 98.)

(3) When two or more persons unite to accomplish a criminal object, whether through the
physical volition of one, or all, proceeding severally or collectively, each individual whose
evil will actively contribute to the wrongdoing is in law responsible for the whole, the same
as though performed by himself alone. (People vs. Peralta, et. al. 25 SCRA 759, 772
(1968).) 14

The Assigned Errors

The trial court is faulted with the following errors, viz:

The trial court erred in taking judicial notice of a material testimony given in another case
by Lt. Melquiades Feliciano, who allegedly was the team leader of the government troops
which allegedly captured the accused-appellants in an encounter; thereby, depriving the
accused-appellants their right to cross-examine him.

II

On the assumption that Lt. Feliciano's testimony could be validly taken judicial notice of,
the trial court, nevertheless, erred in not disregarding the same for being highly
improbable and contradictory.

III

The trial court erred in finding that accused-appellants Jumatiya Amlani, Jaliha Hussin
and Norma Sahiddan provided Carlos Falcasantos, et. al., with material and moral
comfort, hence, are guilty as accomplices in all the kidnapping for ransom cases.

IV

The trial court erred in denying to accused-appellant Jaliha Hussin and Norma Sahiddan
the benefits of suspension of sentence given to youth offenders considering that they
were minors at the time of the commission of the offense. 15

As earlier noted, Jumatiya Amlani, Jaliha Hussin and Norma Sahiddan had withdrawn their appeal, and
as such, the third and fourth assigned errors, which pertain to them only, will no longer be dealt with. Only
the following issues pertaining to Appellant Jailon Kulais will be discussed: (1) judicial notice of other
pending cases, (2) sufficiency of the prosecution evidence, and (3) denial as a defense. In addition, the
Court will pass upon the propriety of the penalty imposed by the trial court.

The Court's Ruling

The appeal is bereft of merit.

First Issue:

Judicial Notice and Denial of Due Process

Appellant Kulais argues that he was denied due process when the trial court took judicial notice of the
testimony given in another case by one Lt. Melquiades Feliciano, who was the team leader of the
government troops that captured him and his purported cohorts. 16 Because he was allegedly deprived of
his right to cross-examine a material witness in the person of Lieutenant Feliciano, he contends that the
latter's testimony should not be used against him. 17

True, as a general rule, courts should not take judicial notice of the evidence presented in other
proceedings, even if these have been tried or are pending in the same court, or have been heard and are
actually pending before the same judge. 18 This is especially true in criminal cases, where the accused
has the constitutional right to confront and cross-examine the witnesses against him.

Having said that, we note, however, that even if the court a quo did take judicial notice of the testimony of
Lieutenant Feliciano, it did not use such testimony in deciding the cases against the appellant. Hence,
Appellant Kulais was not denied due process. His conviction was based mainly on the positive
identification made by some of the kidnap victims, namely, Jessica Calunod, Armando Bacarro and
Edilberto Perez. These witnesses were subjected to meticulous cross-examinations conducted by
appellant's counsel. At best, then, the trial court's mention of Lieutenant Feliciano's testimony is a
decisional surplusage which neither affected the outcome of the case nor substantially prejudiced
Appellant Kulais.

Second Issue:

Sufficiency of Prosecution Evidence

Appellant was positively identified by Calunod, as shown by the latter's testimony:

CP CAJAYON D MS:

Q And how long were you in the custody of these persons?

A We stayed with them for fifty-four days.

Q And during those days did you come to know any of the persons who
were with the group?

A We came to know almost all of them considering we stayed there for

fifty-four days.

Q And can you please name to us some of them or how you know them?
A For example, aside from Commander Falcasantos and Commander
Kamlon we came to know first our foster parents, those who were
assigned to give us some food.

Q You mean to say that the captors assigned you some men who will
take care of you?

A Yes.

Q And to whom were you assigned?

A To Ila Abdurasa.

Q And other than your foster [parents] or the parents whom you are
assigned to, who else did you come to know?

A Pagal and his wife; Tangkong and his wife Nana; the two (2) wives of
Commander Falcasantos Mating and Janira another brother in-law
of Commander Kamlon, Usman, the wife of Kamlon, Tira.

xxx xxx xxx

Q Now, you said that you were with these men for fifty-four days and you
really came to know them. Will you still be able to recognize these
persons if you will see the[m] again?

A Yes, ma'am.

Q Now will you look around this Honorable Court and see if any of those
you mentioned are here?

A Yes, they are here.

Q Some of them are here?

A Some of them are here.

xxx xxx xxx

Q Where is Tangkong? What is he wearing?

A White t-shirt with orange collar. (witness pointing.) He was one of

those nine armed men who took us from the highway.

RTC INTERPRETER:

Witness pointed to a man sitting in court and when asked of his name,
he gave his name as JAILON KULAIS.

CP CAJAYON D MS:
 Q Aside from being with the armed men who stopped the vehicle and
made you alight, what else was he doing while you were in their
captivity?

A He was the foster parent of Armando Bacarro and the husband of

Nana.

COURT:

Q Who?

A Tangkong.

xxx xxx xxx 19

Likewise clear and straightforward was Bacarro's testimony pointing to appellant as one of the culprits:

FISCAL CAJAYON:

xxx xxx xxx

Q And what happened then?

A Some of the armed men assigned who will be the host or who will be
the one [to] g[i]ve food to us.

Q [To] whom were you assigned?

A I was assigned to a certain Tangkong and [his] wife Nana.

xxx xxx xxx

Q Now, you said you were assigned to Tangkong and his wife. [D]o you
remember how he looks like?

A Yes.

Q Now, will you please look around this Court and tell us if that said
Tangkong and his wife are here?

A Yes, ma'am.

Q Could you please point this Tangkong to us?

A Witness pointed to a person in Court. [W]hen asked his name he

identified [himself] as Jailon Kulais.

Q Why did you say his name is Tangkong? Where did you get that
name?

A Well, that is the name [by which he is] usually called in the camp.
 xxx xxx xxx

ATTY. FABIAN (counsel for accused Kulais)

Q When did you first meet Tangkong?

A That was on December 11, because I remember he was the one who
took us.

Q When you were questioned by the fiscal a while ago, you stated that
Mr. Mamaril was one of those who stopped the bus and took you to the
hill and you did not mention Tangkong?

A I did not mention but I can remember his face.

xxx xxx xxx

Q And because Tangkong was always with you as your host even if he
did not tell you that he [was] one of those who stopped you, you would
not recognize him?

A No, I can recognize him because he was the one who took my shoes.

COURT:

Q Who?

A Tangkong, your Honor.

xxx xxx xxx 20

Also straightforward was Ernesto Perez' candid narration:

FISCAL CAJAYON:

xxx xxx xxx

Q Who else?

A The last man.

Q Did you come to know his name?

A Only his nickname, Tangkong. (Witness pointed to a man in Court who

identified himself as Jailon Kulais.)

Q And what was Tangkong doing in the mountain?

A The same, guarding us.

CROSS-EXAMINATION BY ATTY. SAHAK.

 Q Engr. Perez, you stated that you were ambushed by nine armed men
on your way from [the] Licomo to [the] Talaga Foot Bridge. [W]hat do you
mean by ambushed?

A I mean that they blocked our way and stopped.

Q They did not fire any shots?

A But they were pointing their guns at us.

Q And among the 9 armed men who held you on your way to [the]
Talaga Footbridge, you stated [that] one of them [was] Commander
Falcasantos?

A Yes.

Q Could you also recognize anyone of the accused in that group?

A Yes.

Q Will you please identify?

A That one, Tangkong. (The witness pointed to a man sitting in court

who identified himself as Jailon Kulais.)

xxx xxx xxx

CROSS-EXAMINATION BY ATTY. FABIAN.

Q You said Jailon Kulais was among those who guarded the camp?

FISCAL CAJAYON:

Your Honor, please, he does not know the name of Julais, he used the
word Tangkong.

ATTY. FABIAN

Q You said Tangkong guarded you[. W]hat do you mean?

A He guarded us like prisoners[. A]fter guarding us they have their time

two hours another will be on duty guarding us.

Q Where did you meet Tangkong?

A He was one of the armed men who kidnapped us.

xxx xxx xxx 21

It is evident from the foregoing testimonies of Calunod, Bacarro and Perez that kidnapping or detention
did take place: the five victims were held, against their will, for fifty-three days from December 12, 1988 to
February 2, 1989. It is also evident that Appellant Kulais was a member of the group of armed men who
staged the kidnapping, and that he was one of those who guarded the victims during the entire period of
their captivity. His participation gives credence to the conclusion of the trial court that he was a
conspirator.

Kidnapping

for Ransom

That the kidnapping of the five was committed for the purpose of extorting ransom is also apparent from
the testimony of Calunod, who was quite emphatic in identifying the accused and narrating the
circumstances surrounding the writing of the ransom letters.

CP CAJAYON D MS:

Q Now, you were in their captivity for 54 days and you said there were
these meetings for possible negotiation with the City Government. What
do you mean by this? What were you supposed to negotiate?

A Because they told us that they will be releasing us only after the terms.
22

Q And what were the terms? Did you come to know the terms?

A I came to know the terms because I was the one ordered by

Commander Falcasantos to write the letter, the ransom letter.

Q At this point of time, you remember how many letters were you asked
to write for your ransom?

A I could not remember as to how many, but I can identify them.

Q Why will you able to identify the same?

A Because I was the one who wrote it.

Q And you are familiar, of course, with your penmanship?

A Yes.

Q Now we have here some letters which were turned over to us by the
Honorable City Mayor Vitaliano Agan. 1,2,3,4,5 there are five letters
all handwritten.

COURT:

Original?

CP CAJAYON D MS:

Original, your Honor.

Q And we would like you to go over these and say, tell us if any of these
were the ones you were asked to write.

A (Witness going over [letters])

This one 2 pages. This one 2 pages. No more.

Q Aside from the fact that you identified your penmanship in these
letters, what else will make you remember that these are really the ones
you wrote while there?

A The signature is there.

Q There is a printed name here[,] Jessica Calunod.

A And over it is a signature.

Q That is your signature?

A Yes, ma'am.

Q How about in the other letter, did you sign it also?

A Yes, there is the other signature.

Q There are names other names here Eddie Perez, Allan Basa,
Armando Bacarro, Felix Rosario, Jojie Ortuoste and there are signatures
above the same. Did you come up to know who signed this one?

A Those whose signatures there were signed by the persons. [sic].

Q And we have here at the bottom, Commander Kamlon Hassan, and

there is the signature above the same. Did you come to know who
signed it?

A [It was] Commander Kamlon Hassan who signed that.

xxx xxx xxx

Q Jessica, I am going over this letter . . . Could you please read to us the
portion here which says the terms? . . .

A (Witness reading) "Mao ilang gusto nga andamun na ninyo ang

kantidad nga P100,000 ug P14,000 baylo sa 20 sets nga uniforms sa
Biyernes (Pebrero 3, 1989). 23

xxx xxx xxx

INTERPRETER (Translation):
This is what they like you to prepare[:] the amount of P100,000.00 and
P14,000.00 in exchange [for] 20 sets of uniform on Friday, February 3,
1989.

xxx xxx xxx

Q Now you also earlier identified this other letter and this is dated
January 21, 1988. 24 Now, could you please explain to us why it is dated
January 21, 1988 and the other one Enero 31, 1989 or January 31,
1989?

A I did not realize that I placed 1989, 1988, but it was 1989.

Q January 21, 1989?

A Yes.

xxx xxx xxx

Q Now, in this letter, were the terms also mentioned?

Please go over this.

A (Going over the letter)

Yes, ma'am.

Q Could you please read it aloud to us?

A (Witness reading)

Gusto nila and P100,000.00 ng kapinan nu ug 20 sets nga completong

uniformer (7 colors marine type wala nay labot ang sapatos), tunga
medium ug tunga large size. 25

xxx xxx xxx

INTERPRETER:

They like the P100,000.00 and an addition of 20 sets of complete

uniform (7 colors, marine-type not including the shoes), one half medium,
one half large.

xxx xxx xxx

Q After having written these letters, did you come to know after [they
were] signed by your companions and all of you, do you know if these
letters were sent? If you know only.

A I would like to make it clear. The first letter was ordered to me by

Falcasantos to inform the City Mayor that initial as P500,000.00, and
 when we were already I was asked again to write, we were ordered to
affix our signature to serve as proof that all of us are alive. 26 [sic]

Calunod's testimony was substantially corroborated by both Armando Bacarro 27 and Edilberto Perez. 28
The receipt of the ransom letters, the efforts made to raise and deliver the ransom, and the release of the
hostages upon payment of the money were testified to by Zamboanga City Mayor Vitaliano Agan 29 and
Teddy Mejia. 30

The elements of kidnapping for ransom, as embodied in Article 267 of the Revised Penal Code, 31 having
been sufficiently proven, and the appellant, a private individual, having been clearly identified by the
kidnap victims, this Court thus affirms the trial court's finding of appellant's guilt on five counts of
kidnapping for ransom.

Kidnapping of

Public Officers

Victims Virginia San Agustin-Gara, Monico Saavedra and Calixto Francisco were members of the
government monitoring team abducted by appellant's group. The three testified to the fact of kidnapping;
however, they were not able to identify the appellant. Even so, appellant's identity as one of the
kidnappers was sufficiently established by Calunod, Bacarro and Perez, who were with Gara, Saavedra
and Francisco when the abduction occurred.

That Gara, Saavedra and Francisco were detained for only three hours 32 does nor matter. In People vs.
Domasian, 33 the victim was similarly held for three hours, and was released even before his parents
received the ransom note. The accused therein argued that they could not be held guilty of kidnapping as
no enclosure was involved, and that only grave coercion was committed, if at all. 34 Convicting appellants
of kidnapping or serious illegal detention under Art. 267 (4) of the Revised Penal Code, the Court found
that the victim, an eight-year-old boy, was deprived of his liberty when he was restrained from going
home. The Court justified the conviction by holding that the offense consisted not only in placing a person
in an enclosure, but also in detaining or depriving him, in any manner, of his liberty. 35 Likewise, in People
vs. Santos, 36 the Court held that since the appellant was charged and convicted under Article 267,
paragraph 4, it was not the duration of the deprivation of liberty which was important, but the fact that the
victim, a minor, was locked up.

Thus, in the present case, the detention of Gara, Saavedra and Francisco for only a few hours is
immaterial. The clear fact is that the victims were public officers 37 Gara was a fiscal analyst for the City
of Zamboanga, Saavedra worked at the City Engineer's Office, and Francisco was a barangay
councilman at the time the kidnapping occurred. Appellant Kulais should be punished, therefore, under
Article 267, paragraph 4 of the Revised Penal Code, and not Art, 268, as the trial court held.

The present case is different from People vs. Astorga, 38 which held that the crime committed was not
kidnapping under Article 267, paragraph 4, but only grave coercion. The appellant in that case had tricked
his seven-year-old victim into going with him to a place he alone knew. His plans, however, were foiled
when a group of people became suspicious and rescued the girl from him. The Court noted that the
victim's testimony and the other pieces of evidence did not indicate that the appellant wanted to detain
her, or that he actually detained her.

In the present case, the evidence presented by the prosecution indubitably established that the victims
were detained, albeit for a few hours. There is proof beyond reasonable doubt that kidnapping took place,
and that appellant was a member of the armed group which abducted the victims.

Third Issue:
 Denial and Alibi

The appellant's bare denial is a weak defense that becomes even weaker in the face of the prosecution
witnesses' positive identification of him. Jurisprudence gives greater weight to the positive narration of
prosecution witnesses than to the negative testimonies of the defense. 39 Between positive and
categorical testimony which has a ring of truth to it on the one hand, and a bare denial on the other, the
former generally prevails. 40 Jessica Calunod, Armando Bacarro and Edilberto Perez testified in a clear,
straightforward and frank manner; and their testimonies were compatible on material points. Moreover, no
ill motive was attributed to the kidnap victims and none was found by this Court.

We agree with the trial court's observation that the appellant did not meet the charges against him head
on. His testimony dwelt on what happened to him on the day he was arrested and on subsequent days
thereafter. Appellant did not explain where he was during the questioned dates (December 12, 1988 to
February 3, 1989); neither did he rebut Calunod, Bacarro and Perez, when they identified him as one of
their kidnappers.

Reclusion Perpetua, Not Life Imprisonment

The trial court erred when it sentenced the appellant to six terms of life imprisonment. The penalty for
kidnapping with ransom, under the Revised Penal Code, is reclusion perpetua to death. Since the crimes
happened in 1988, when the capital penalty was proscribed by the Constitution, the maximum penalty
that could have been imposed was reclusion perpetua. Life imprisonment is not synonymous with
reclusion perpetua. Unlike life imprisonment, reclusion perpetua carries with it accessory penalties
provided in the Revised Penal Code and has a definite extent or duration. Life imprisonment is invariably
imposed for serious offenses penalized by special laws, while reclusion perpetua is prescribed in
accordance with the Revised Penal Code. 41

WHEREFORE, the conviction of Appellant Jailon Kulais as principal in five counts of kidnapping for
ransom and in three counts of kidnapping is AFFIRMED, but the penalty imposed is hereby MODIFIED as
follows: Appellant is sentenced to five terms of reclusion perpetua, one for each of his five convictions for
kidnapping for ransom; and to three terms of reclusion perpetua, one each for the kidnapping of Public
Officers Virginia Gara, Monico Saavedra and Calixto Francisco. Like the other accused who withdrew
their appeals, he is REQUIRED to return the personal effects, or their monetary value, taken from the
kidnap victims. Additionally, he is ORDERED to pay the amount of P122,000 representing the ransom
money paid to the kidnappers. Costs against appellant.

SO ORDERED.

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.

Laureano vs Court of Appeals

SECOND DIVISION

G.R. No. 114776 February 2, 2000

MENANDRO B. LAUREANO, petitioner,
vs.
COURT OF APPEALS AND SINGAPORE AIRLINES LIMITED, respondents.

QUISUMBING, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court seeks to reverse the
Decision of the Court of Appeals, dated October 29, 1993, in C.A. G.R. No. CV 34476, as well
as its Resolution dated February 28, 1994, which denied the motion for reconsideration.

The facts of the case as summarized by the respondent appellate court are as follows:

Sometime in 1978, plaintiff [Menandro B. Laureano, herein petitioner], then Director of

Flight Operations and Chief Pilot of Air Manila, applied for employment with defendant
company [herein private respondent] through its Area Manager in Manila.

On September 30, 1978, after the usual personal interview, defendant wrote to plaintiff,
offering a contract of employment as an expatriate B-707 captain for an original period of
two (2) years commencing on January 21, 1978. Plaintiff accepted the offer and
commenced working on January 20, 1979. After passing the six-month probation period,
plaintiffs appointment was confirmed effective July 21, 1979. (Annex "B", p. 30, Rollo).

On July 21, 1979, defendant offered plaintiff an extension of his two-year contract to five
(5) years effective January 21, 1979 to January 20, 1984 subject to the terms and
conditions set forth in the contract of employment, which the latter accepted (Annex "C"
p. 31, Rec.).

During his service as B-707 captain, plaintiff on August 24, 1980, while in command of a
flight, committed a noise violation offense at the Zurich Airport, for which plaintiff
apologized.(Exh. "3", p. 307, Rec.).

Sometime in 1980, plaintiff featured in a tail scraping incident wherein the tail of the
aircraft scraped or touched the runway during landing. He was suspended for a few days
until he was investigated by board headed by Capt. Choy. He was reprimanded.

On September 25, 1981, plaintiff was invited to take a course of A-300 conversion
training at Aeroformacion, Toulouse, France at dependant's expense. Having successfully
completed and passed the training course, plaintiff was cleared on April 7, 1981, for solo
duty as captain of the Airbus A-300 and subsequently appointed as captain of the A-300
fleet commanding an Airbus A-300 in flights over Southeast Asia. (Annexes "D", "E"
and "F", pp. 34-38, Rec.).

Sometime in 1982, defendant, hit by a recession, initiated cost-cutting measures.

Seventeen (17) expatriate captains in the Airbus fleet were found in excess of the
defendant's requirement (t.s.n., July 6, 1988. p. 11). Consequently, defendant informed its
expatriate pilots including plaintiff of the situation and advised them to take advance
leaves. (Exh. "15", p. 466, Rec.)

Realizing that the recession would not be for a short time, defendant decided to terminate
its excess personnel (t.s.n., July 6, 1988, p. 17). It did not, however, immediately
terminate it's A-300 pilots. It reviewed their qualifications for possible promotion to the
B-747 fleet. Among the 17 excess Airbus pilots reviewed, twelve were found qualified.
Unfortunately, plaintiff was not one of the twelve.

On October 5, 1982, defendant informed plaintiff of his termination effective November

1, 1982 and that he will be paid three (3) months salary in lieu of three months notice
(Annex "I", pp. 41-42, Rec.). Because he could not uproot his family on such short
notice, plaintiff requested a three-month notice to afford him time to exhaust all possible
avenues for reconsideration and retention. Defendant gave only two (2) months notice
and one (1) month salary. (t.s.n., Nov. 12, 1987. p. 25).

Aggrieved, plaintiff on June 29, 1983, instituted a case for illegal dismissal before the
Labor Arbiter. Defendant moved to dismiss on jurisdiction grounds. Before said motion
was resolved, the complaint was withdrawn. Thereafter, plaintiff filed the instant case for
damages due to illegal termination of contract of services before the court a quo
(Complaint, pp. 1-10, Rec.).

Again, defendant on February 11, 1987 filed a motion to dismiss alleging inter alia: (1)
that the court has no jurisdiction over the subject matter of the case, and (2) that
Philippine courts have no jurisdiction over the instant case. Defendant contends that the
complaint is for illegal dismissal together with a money claim arising out of and in the
course of plaintiffs employment "thus it is the Labor Arbiter and the NLRC who have the
jurisdiction pursuant to Article 217 of the Labor Code" and that, since plaintiff was
employed in Singapore, all other aspects of his employment contract and/or documents
executed in Singapore. Thus, defendant postulates that Singapore laws should apply and
courts thereat shall have jurisdiction. (pp. 50-69, Rec.).

In traversing defendant's arguments, plaintiff claimed that: (1) where the items demanded
in a complaint are the natural consequences flowing from a breach of an obligation and
not labor benefits, the case is intrinsically a civil dispute; (2) the case involves a question
that is beyond the field of specialization of labor arbiters; and (3) if the complaint is
grounded not on the employee's dismissal per se but on the manner of said dismissal and
the consequence thereof, the case falls under the jurisdiction of the civil courts. (pp. 70-
73, Rec.)

On March 23, 1987, the court a quo denied defendant's motion to dismiss (pp. 82-84,
Ibid). The motion for reconsideration was likewise denied. (p. 95 ibid.)

On September 16, 1987, defendant filed its answer reiterating the grounds relied upon in
its motion to dismiss and further arguing that plaintiff is barred by laches, waiver, and
estoppel from instituting the complaint and that he has no cause of action . (pp. 102-115)1
On April 10, 1991, the trial court handed down its decision in favor of plaintiff. The dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff Menandro Laureano

and against defendant Singapore Airlines Limited, ordering defendant to pay plaintiff the
amounts of

SIN$396,104.00, or its equivalent in Philippine currency at the current rate of exchange

at the time of payment, as and for unearned compensation with legal interest from the
filing of the complaint until fully paid;

SIN$154,742.00, or its equivalent in Philippine currency at the current rate of exchange

at the time of payment; and the further amounts of P67,500.00 as consequential damages
with legal interest from the filing of the complaint until fully paid;

P1,000,000.00 as and for moral damages; P1,000,000.00 as and for exemplary damages;
and P100,000.00 as and for attorney's fees.

Costs against defendant.

SO ORDERED.2

Singapore Airlines timely appealed before the respondent court and raised the issues of
jurisdiction, validity of termination, estoppel, and damages.

On October 29, 1993, the appellate court set aside the decision of the trial court, thus,

. . . In the instant case, the action for damages due to illegal termination was filed by
plaintiff-appellee only on January 8, 1987 or more than four (4) years after the effectivity
date of his dismissal on November 1, 1982. Clearly, plaintiff-appellee's action has already
prescribed.

WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. The
complaint is hereby dismissed.

SO ORDERED.3

Petitioner's and Singapore Airlines' respective motions for reconsideration were denied.

Now, before the Court, petitioner poses the following queries:

1. IS THE PRESENT ACTION ONE BASED ON CONTRACT WHICH PRESCRIBES IN

TEN YEARS UNDER ARTICLE 1144 OF THE NEW CIVIL CODE OR ONE FOR
DAMAGES ARISING FROM AN INJURY TO THE RIGHTS OF THE PLAINTIFF WHICH
PRESCRIBES IN FOUR YEARS UNDER ARTICLE 1146 OF THE NEW CIVIL CODE?
2. CAN AN EMPLOYEE WITH A FIXED PERIOD OF EMPLOYMENT BE RETRENCHED
BY HIS EMPLOYER?

3. CAN THERE BE VALID RETRENCHMENT IF AN EMPLOYER MERELY FAILS TO

REALIZE THE EXPECTED PROFITS EVEN IF IT WERE NOT, IN FACT, INCURRING
LOSSES?

At the outset, we find it necessary to state our concurrence on the assumption of jurisdiction by
the Regional Trial Court of Manila, Branch 9. The trial court rightly ruled on the application of
Philippine law, thus:

Neither can the Court determine whether the termination of the plaintiff is legal under the
Singapore Laws because of the defendant's failure to show which specific laws of
Singapore Laws apply to this case. As substantially discussed in the preceding
paragraphs, the Philippine Courts do not take judicial notice of the laws of Singapore.
The defendant that claims the applicability of the Singapore Laws to this case has the
burden of proof. The defendant has failed to do so. Therefore, the Philippine law should
be applied.4

Respondent Court of Appeals acquired jurisdiction when defendant filed its appeal before said
court.5 On this matter, respondent court was correct when it barred defendant-appellant below
from raising further the issue of jurisdiction.6

Petitioner now raises the issue of whether his action is one based on Article 1144 or on Article
1146 of the Civil Code. According to him, his termination of employment effective November 1,
1982, was based on an employment contract which is under Article 1144, so his action should
prescribe in 10 years as provided for in said article. Thus he claims the ruling of the appellate
court based on Article 1146 where prescription is only four (4) years, is an error. The appellate
court concluded that the action for illegal dismissal originally filed before the Labor Arbiter on
June 29, 1983, but which was withdrawn, then filed again in 1987 before the Regional Trial
Court, had already prescribed.

In our view, neither Article 11447 nor Article 11468 of the Civil Code is here pertinent. What is
applicable is Article 291 of the Labor Code, viz:

Art. 291. Money claims. All money claims arising from employee-employer relations
accruing during the effectivity of this Code shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall be forever barred.

xxx xxx xxx

What rules on prescription should apply in cases like this one has long been decided by this
Court. In illegal dismissal, it is settled, that the ten-year prescriptive period fixed in Article 1144
of the Civil Code may not be invoked by petitioners, for the Civil Code is a law of general
application, while the prescriptive period fixed in Article 292 of the Labor Code [now Article
291] is a SPECIAL LAW applicable to claims arising from employee-employer relations.9
More recently in De Guzman vs. Court of Appeals,10 where the money claim was based on a
written contract, the Collective Bargaining Agreement, the Court held:

. . . The language of Art. 291 of the Labor Code does not limit its application only to
"money claims specifically recoverable under said Code" but covers all money claims
arising from an employee-employer relations" (Citing Cadalin v. POEA Administrator,
238 SCRA 721, 764 [1994]; and Uy v. National Labor Relations Commission, 261 SCRA
505, 515 [1996]). . . .

It should be noted further that Article 291 of the Labor Code is a special law applicable to
money claims arising from employer-employee relations; thus, it necessarily prevails
over Article 1144 of the Civil Code, a general law. Basic is the rule in statutory
construction that "where two statutes are of equal theoretical application to a particular
case, the one designed therefore should prevail." (Citing Leveriza v. Intermediate
Appellate Court, 157 SCRA 282, 294.) Generalia specialibus non derogant.11

In the light of Article 291, aforecited, we agree with the appellate court's conclusion that
petitioner's action for damages due to illegal termination filed again on January 8, 1987 or more
than four (4) years after the effective date of his dismissal on November 1, 1982 has already
prescribed.

In the instant case, the action for damages due to illegal termination was filed by
plaintiff-appelle only on January 8, 1987 or more than four (4) years after the effectivity
date of his dismissal on November 1, 1982. Clearly, plaintiff-appellee's action has already
prescribed.

We base our conclusion not on Article 1144 of the Civil Code but on which sets the prescription
period at three (3) years and which governs under this jurisdiction.

Petitioner claims that the running of the prescriptive period was tolled when he filed his
complaint for illegal dismissal before the Labor Arbiter of the National Labor Relations
Commission. However, this claim deserves scant consideration; it has no legal leg to stand on. In
Olympia International, Inc., vs., Court of Appeals, we held that "although the commencement of
a civil action stops the running of the statute of prescription or limitations, its dismissal or
voluntary abandonment by the plaintiff leaves in exactly the same position as though no action
had been commenced at all."12

Now, as to whether petitioner's separation from the company due to retrenchment was valid, the
appellate court found that the employment contract of petitioner allowed for pre-termination of
employment. We agree with the Court of Appeals when it said,

It is a settled rule that contracts have the force of law between the parties. From the
moment the same is perfected, the parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all consequences which, according to their
nature, may be in keeping with good faith, usage and law. Thus, when plaintiff-appellee
accepted the offer of employment, he was bound by the terms and conditions set forth in
 the contract, among others, the right of mutual termination by giving three months
written notice or by payment of three months salary. Such provision is clear and readily
understandable, hence, there is no room for interpretation.

xxx xxx xxx

Further, plaintiff-appellee's contention that he is not bound by the provisions of the

Agreement, as he is not a signatory thereto, deserves no merit. It must be noted that when
plaintiff-appellee's employment was confirmed, he applied for membership with the
Singapore Airlines Limited (Pilots) Association, the signatory to the aforementioned
Agreement. As such, plaintiff-appellee is estopped from questioning the legality of the
said agreement or any proviso contained therein.13

Moreover, the records of the present case clearly show that respondent court's decision is amply
supported by evidence and it did not err in its findings, including the reason for the retrenchment:

When defendant-appellant was faced with the world-wide recession of the airline
industry resulting in a slow down in the company's growth particularly in the regional
operation (Asian Area) where the Airbus 300 operates. It had no choice but to adopt cost
cutting measures, such as cutting down services, number of frequencies of flights, and
reduction of the number of flying points for the A-300 fleet (t.s.n., July 6, 1988, pp. 17-
18). As a result, defendant-appellant had to lay off A-300 pilots, including plaintiff-
appellee, which it found to be in excess of what is reasonably needed.14

All these considered, we find sufficient factual and legal basis to conclude that petitioner's
termination from employment was for an authorized cause, for which he was given ample notice
and opportunity to be heard, by respondent company. No error nor grave abuse of discretion,
therefore, could be attributed to respondent appellate court.1wphi1.nt

ACCORDINGLY, the instant petition is DISMISSED. The decision of the Court of Appeals in
C.A. CV No. 34476 is AFFIRMED.

SO ORDERED.

Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

Maquiling vs Comelec

EN BANC

G.R. No. 195649 July 2, 2013

CASAN MACODE MACQUILING, PETITIONER,

vs.
COMMISSION ON ELECTIONS, ROMMEL ARNADO Y CAGOCO, AND LINOG G.
BALUA. RESPONDENTS.

RESOLUTION

SERENO, J.:

This Resolution resolves the Motion for Reconsideration filed by respondent on May 10, 2013
and the Supplemental Motion for Reconsideration filed on May 20, 2013.

We are not unaware that the term of office of the local officials elected in the May 2010 elections
has already ended on June 30, 2010. Arnado, therefore, has successfully finished his term of
office. While the relief sought can no longer be granted, ruling on the motion for reconsideration
is important as it will either affirm the validity of Arnados election or affirm that Arnado never
qualified to run for public office.

Respondent failed to advance any argument to support his plea for the reversal of this Courts
Decision dated April 16, 2013. Instead, he presented his accomplishments as the Mayor of
Kauswagan, Lanao del Norte and reiterated that he has taken the Oath of Allegiance not only
twice but six times. It must be stressed, however, that the relevant question is the efficacy of his
renunciation of his foreign citizenship and not the taking of the Oath of Allegiance to the
Republic of the Philippines. Neither do his accomplishments as mayor affect the question before
this Court.

Respondent cites Section 349 of the Immigration and Naturalization Act of the United States as
having the effect of expatriation when he executed his Affidavit of Renunciation of American
Citizenship on April 3, 2009 and thus claims that he was divested of his American citizenship. If
indeed, respondent was divested of all the rights of an American citizen, the fact that he was still
able to use his US passport after executing his Affidavit of Renunciation repudiates this claim.

The Court cannot take judicial notice of foreign laws,1 which must be presented as public
documents2 of a foreign country and must be "evidenced by an official publication thereof."3
Mere reference to a foreign law in a pleading does not suffice for it to be considered in deciding
a case.

Respondent likewise contends that this Court failed to cite any law of the United States
"providing that a person who is divested of American citizenship thru an Affidavit of
Renunciation will re-acquire such American citizenship by using a US Passport issued prior to
expatriation."4

American law does not govern in this jurisdiction. Instead, Section 40(d) of the Local
Government Code calls for application in the case before us, given the fact that at the time
Arnado filed his certificate of candidacy, he was not only a Filipino citizen but, by his own
declaration, also an American citizen. It is the application of this law and not of any foreign law
that serves as the basis for Arnados disqualification to run for any local elective position.
With all due respect to the dissent, the declared policy of Republic Act No. (RA) 9225 is that "all
Philippine citizens who become citizens of another country shall be deemed not to have lost their
Philippine citizenship under the conditions of this Act."5 This policy pertains to the reacquisition
of Philippine citizenship. Section 5(2)6 requires those who have re-acquired Philippine
citizenship and who seek elective public office, to renounce any and all foreign citizenship.

This requirement of renunciation of any and all foreign citizenship, when read together with
Section 40(d) of the Local Government Code7 which disqualifies those with dual citizenship
from running for any elective local position, indicates a policy that anyone who seeks to run for
public office must be solely and exclusively a Filipino citizen. To allow a former Filipino who
reacquires Philippine citizenship to continue using a foreign passport which indicates the
recognition of a foreign state of the individual as its national even after the Filipino has
renounced his foreign citizenship, is to allow a complete disregard of this policy.

Further, we respectfully disagree that the majority decision rules on a situation of doubt.

Indeed, there is no doubt that Section 40(d) of the Local Government Code disqualifies those
with dual citizenship from running for local elective positions.

There is likewise no doubt that the use of a passport is a positive declaration that one is a citizen
of the country which issued the passport, or that a passport proves that the country which issued
it recognizes the person named therein as its national.

It is unquestioned that Arnado is a natural born Filipino citizen, or that he acquired American
citizenship by naturalization. There is no doubt that he reacquired his Filipino citizenship by
taking his Oath of Allegiance to the Philippines and that he renounced his American citizenship.
It is also indubitable that after renouncing his American citizenship, Arnado used his U.S.
passport at least six times.

If there is any remaining doubt, it is regarding the efficacy of Arnados renunciation of his
American citizenship when he subsequently used his U.S. passport. The renunciation of foreign
citizenship must be complete and unequivocal. The requirement that the renunciation must be
made through an oath emphasizes the solemn duty of the one making the oath of renunciation to
remain true to what he has sworn to. Allowing the subsequent use of a foreign passport because
it is convenient for the person to do so is rendering the oath a hollow act. It devalues the act of
taking of an oath, reducing it to a mere ceremonial formality.

The dissent states that the Court has effectively left Arnado "a man without a country".1wphi1
On the contrary, this Court has, in fact, found Arnado to have more than one. Nowhere in the
decision does it say that Arnado is not a Filipino citizen. What the decision merely points out is
that he also possessed another citizenship at the time he filed his certificate of candidacy.

Well-settled is the rule that findings of fact of administrative bodies will not be interfered with
by the courts in the absence of grave abuse of discretion on the part of said agencies, or unless
the aforementioned findings are not supported by substantial evidence.8 They are accorded not
only great respect but even finality, and are binding upon this Court, unless it is shown that the
administrative body had arbitrarily disregarded or misapprehended evidence before it to such an
extent as to compel a contrary conclusion had such evidence been properly appreciated.9

Nevertheless, it must be emphasized that COMELEC First Division found that Arnado used his
U.S. Passport at least six times after he renounced his American citizenship. This was debunked
by the COMELEC En Banc, which found that Arnado only used his U.S. passport four times,
and which agreed with Arnados claim that he only used his U.S. passport on those occasions
because his Philippine passport was not yet issued. The COMELEC En Banc argued that Arnado
was able to prove that he used his Philippine passport for his travels on the following dates: 12
January 2010, 31 January 2010, 31 March 2010, 16 April 2010, 20 May 2010, and 4 June 2010.

None of these dates coincide with the two other dates indicated in the certification issued by the
Bureau of Immigration showing that on 21 January 2010 and on 23 March 2010, Arnado arrived
in the Philippines using his U.S. Passport No. 057782700 which also indicated therein that his
nationality is USA-American. Adding these two travel dates to the travel record provided by the
Bureau of Immigration showing that Arnado also presented his U.S. passport four times (upon
departure on 14 April 2009, upon arrival on 25 June 2009, upon departure on 29 July 2009 and
upon arrival on 24 November 2009), these incidents sum up to six.

The COMELEC En Banc concluded that "the use of the US passport was because to his
knowledge, his Philippine passport was not yet issued to him for his use."10 This conclusion,
however, is not supported by the facts. Arnado claims that his Philippine passport was issued on
18 June 2009. The records show that he continued to use his U.S. passport even after he already
received his Philippine passport. Arnados travel records show that he presented his U.S.
passport on 24 November 2009, on 21 January 2010, and on 23 March 2010. These facts were
never refuted by Arnado.

Thus, the ruling of the COMELEC En Banc is based on a misapprehension of the facts that the
use of the U.S. passport was discontinued when Arnado obtained his Philippine passport.
Arnados continued use of his U.S. passport cannot be considered as isolated acts contrary to
what the dissent wants us to believe.

It must be stressed that what is at stake here is the principle that only those who are exclusively
Filipinos are qualified to run for public office. If we allow dual citizens who wish to run for
public office to renounce their foreign citizenship and afterwards continue using their foreign
passports, we are creating a special privilege for these dual citizens, thereby effectively junking
the prohibition in Section 40(d) of the Local Government Code.

WHEREFORE, the Motion for Reconsideration and the Supplemental Motion for
Reconsideration are hereby DENIED with finality.

SO ORDERED.

Carpio, Velasco, Jr., Peralta, Bersamin, Abad, Villarama, Jr., Perez, Reyes, and Perlas-
Bernabe, JJ., concur.
Leonardo-De Castro, Del Castillo, Mendoza, and Leonen, JJ., joins the dissent of J. Brion.
Brion, J., I dissent.

People of the Philippines vs Baharan

THIRD DIVISION

G.R. No. 188314 January 10, 2011

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
KHADDAFY JANJALANI, GAMAL B. BAHARAN a.k.a. Tapay, ANGELO TRINIDAD
a.k.a. Abu Khalil, GAPPAL BANNAH ASALI a.k.a. Maidan or Negro, JAINAL SALI
a.k.a. Abu Solaiman, ROHMAT ABDURROHIM a.k.a. Jackie or Zaky, and other JOHN
and JANE DOES, Accused,
GAMAL B. BAHARAN a.k.a. Tapay, ANGELO TRINIDAD a.k.a. Abu Khalil, and
ROHMAT ABDURROHIM a.k.a. Abu Jackie or Zaky, Accused-Appellants.

DECISION

SERENO, J.:

Before the Court is an appeal from the Decision of the Court of Appeals (CA) dated 30 June
2008, which affirmed the Decision of the Regional Trial Court of Makati City in Criminal Case
Nos. 05-476 and 05-4777 dated 18 October 2005. The latter Decision convicted the three
accused-appellants namely, Gamal B. Baharan a.k.a. Tapay, Angelo Trinidad a.k.a. Abu
Khalil, and Rohmat Abdurrohim a.k.a. Abu Jackie or Zaky of the complex crime of multiple
murder and multiple frustrated murder, and sentenced them to suffer the penalty of death by
lethal injection. The CA modified the sentence to reclusion perpetua as required by Republic Act
No. 9346 (Act Abolishing the Imposition of Death Penalty).

Statement of Facts

The pertinent facts, as determined by the trial court, are as follows:

On 14 February 2005, an RRCG bus was plying its usual southbound route, from its Navotas bus
terminal towards its Alabang bus terminal via Epifanio de los Santos Avenue (EDSA). Around
6:30 to 7:30 in the evening, while they were about to move out of the Guadalupe-EDSA
southbound bus stop, the bus conductor noticed two men running after the bus. The two insisted
on getting on the bus, so the conductor obliged and let them in.

According to Elmer Andales, the bus conductor, he immediately became wary of the two men,
because, even if they got on the bus together, the two sat away from each other one sat two
seats behind the driver, while the other sat at the back of the bus. At the time, there were only 15
passengers inside the bus. He also noticed that the eyes of one of the men were reddish. When he
approached the person near the driver and asked him whether he was paying for two passengers,
the latter looked dumb struck by the question. He then stuttered and said he was paying for two
and gave PhP20. Andales grew more concerned when the other man seated at the back also paid
for both passengers. At this point, Andales said he became more certain that the two were up to
no good, and that there might be a holdup.

Afterwards, Andales said he became more suspicious because both men kept on asking him if the
bus was going to stop at Ayala Avenue. The witness also noticed that the man at the back
appeared to be slouching, with his legs stretched out in front of him and his arms hanging out
and hidden from view as if he was tinkering with something. When Andales would get near the
man, the latter would glare at him. Andales admitted, however, that he did not report the
suspicious characters to the police.

As soon as the bus reached the stoplight at the corner of Ayala Avenue and EDSA, the two men
insisted on getting off the bus. According to Andales, the bus driver initially did not want to let
them off the bus, because a Makati ordinance prohibited unloading anywhere except at
designated bus stops. Eventually, the bus driver gave in and allowed the two passengers to alight.
The two immediately got off the bus and ran towards Ayala Avenue. Moments after, Andales felt
an explosion. He then saw fire quickly engulfing the bus. He ran out of the bus towards a nearby
mall. After a while, he went back to where the bus was. He saw their bus passengers either lying
on the ground or looking traumatized. A few hours after, he made a statement before the Makati
Police Station narrating the whole incident.

The prosecution presented documents furnished by the Department of Justice, confirming that
shortly before the explosion, the spokesperson of the Abu Sayyaf Group Abu Solaiman
announced over radio station DZBB that the group had a Valentines Day "gift" for former
President Gloria Macapagal-Arroyo. After the bombing, he again went on radio and warned of
more bomb attacks.

As stipulated during pretrial, accused Trinidad gave ABS-CBN News Network an exclusive
interview some time after the incident, confessing his participation in the Valentines Day
bombing incident. In another exclusive interview on the network, accused Baharan likewise
admitted his role in the bombing incident. Finally, accused Asali gave a television interview,
confessing that he had supplied the explosive devices for the 14 February 2005 bombing. The
bus conductor identified the accused Baharan and Trinidad, and confirmed that they were the
two men who had entered the RRCG bus on the evening of 14 February.

Members of the Abu Sayyaf Group namely Khaddafy Janjalani, Gamal B. Baharan, Angelo
Trinidad, Gappal Bannah Asali, Jainal Asali, Rohmat Abdurrohim a.k.a. Abu Jackie or Zaky, and
other "John" and "Jane Does" were then charged with multiple murder and multiple frustrated
murder. Only Baharan, Trinidad, Asali, and Rohmat were arrested, while the other accused
remain at-large.
On their arraignment for the multiple murder charge (Crim. Case No. 05-476), Baharan,
Trinidad, and Asali all entered a plea of guilty. On the other hand, upon arraignment for the
multiple frustrated murder charge (Crim. Case No. 05-477), accused Asali pled guilty. Accused
Trinidad and Baharan pled not guilty. Rohmat pled not guilty to both charges. During the pretrial
hearing, the parties stipulated the following:

1.) The jurisdiction of this court over the offenses charged.

2.) That all three accused namely alias Baharan, Trinidad, and Asali admitted knowing
one another before February 14, 2005.

3.) All the same three accused likewise admitted that a bomb exploded in the RRCG bus
while the bus was plying the EDSA route fronting the MRT terminal which is in front of
the Makati Commercial Center.

4.) Accused Asali admitted knowing the other accused alias Rohmat whom he claims
taught him how to make explosive devices.

5.) The accused Trinidad also admitted knowing Rohmat before the February 14 bombing
incident.

6.) The accused Baharan, Trinidad, and Asali all admitted to causing the bomb explosion
inside the RRCG bus which left four people dead and more or less forty persons injured.

7.) Both Baharan and Trinidad agreed to stipulate that within the period March 20-24
each gave separate interviews to the ABS-CBN news network admitting their
participation in the commission of the said crimes, subject of these cases.

8.) Accused Trinidad and Baharan also admitted to pleading guilty to these crimes,
because they were guilt-stricken after seeing a man carrying a child in the first bus that
they had entered.

9.) Accused Asali likewise admitted that in the middle of March 2005 he gave a
television news interview in which he admitted that he supplied the explosive devices
which resulted in this explosion inside the RRCG bus and which resulted in the filing of
these charges.

10.) Finally, accused Baharan, Trinidad, and Asali admitted that they are members of the
Abu Sayyaf.1

In the light of the pretrial stipulations, the trial court asked whether accused Baharan and
Trinidad were amenable to changing their "not guilty" pleas to the charge of multiple frustrated
murder, considering that they pled "guilty" to the heavier charge of multiple murder, creating an
apparent inconsistency in their pleas. Defense counsel conferred with accused Baharan and
Trinidad and explained to them the consequences of the pleas. The two accused acknowledged
the inconsistencies and manifested their readiness for re-arraignment. After the Information was
read to them, Baharan and Trinidad pled guilty to the charge of multiple frustrated murder.2

After being discharged as state witness, accused Asali testified that while under training with the
Abu Sayyaf in 2004, Rohmat, a.k.a Abu Jackie or Zaky, and two other persons taught him how
to make bombs and explosives. The trainees were told that they were to wage battles against the
government in the city, and that their first mission was to plant bombs in malls, the Light
Railway Transit (LRT), and other parts of Metro Manila.

As found by the trial court, Asali, after his training, was required by the Abu Sayyaf leadership,
specifically Abu Solaiman and Rohmat, to secure eight kilos of TNT, a soldering gun, aluminum
powder, a tester, and Christmas lights, all of which he knew would be used to make a bomb. He
then recalled that sometime in November to December 2004, Trinidad asked him for a total of 4
kilos of TNT that is, 2 kilos on two separate occasions. Rohmat allegedly called Asali to
confirm that Trinidad would get TNT from Asali and use it for their first mission. The TNT was
allegedly placed in two buses sometime in December 2004, but neither one of them exploded.

Asali then testified that the night before the Valentines Day bombing, Trinidad and Baharan got
another two kilos of TNT from him. Late in the evening of 14 February, he received a call from
Abu Solaiman. The latter told Asali not to leave home or go to crowded areas, since the TNT
taken by Baharan and Trinidad had already been exploded in Makati. Thirty minutes later,
Trinidad called Asali, repeating the warning of Abu Solaiman. The next day, Asali allegedly
received a call from accused Rohmat, congratulating the former on the success of the mission.3
According to Asali, Abu Zaky specifically said, "Sa wakas nag success din yung tinuro ko sayo."

Assignment of Errors

Accused-appellants raise the following assignment of errors:

I. The trial court gravely erred in accepting accused-appellants plea of guilt despite insufficiency
of searching inquiry into the voluntariness and full comprehension of the consequences of the
said plea.

II. The trial court gravely erred in finding that the guilt of accused-appellants for the crimes
charged had been proven beyond reasonable doubt.4

First Assignment of Error

Accused-appellants Baharan and Trinidad argue that the trial court did not conduct a searching
inquiry after they had changed their plea from "not guilty" to "guilty." The transcript of
stenographic notes during the 18 April 2005 re-arraignment before the Makati Regional Trial
Court is reproduced below:

Court : Anyway, I think what we should have to do, considering the stipulations that were agreed
upon during the last hearing, is to address this matter of pleas of not guilty entered for the
frustrated murder charges by the two accused, Mr. Trinidad and Mr. Baharan, because if you will
recall they entered pleas of guilty to the multiple murder charges, but then earlier pleas of not
guilty for the frustrated multiple murder charges remain [I]s that not inconsistent considering
the stipulations that were entered into during the initial pretrial of this case? [If] you will recall,
they admitted to have caused the bomb explosion that led to the death of at least four people and
injury of about forty other persons and so under the circumstances, Atty Pea, have you
discussed this matter with your clients?

Atty. Pea : Then we should be given enough time to talk with them. I havent conferred with
them about this with regard to the multiple murder case.

Court : Okay. So let us proceed now. Atty. Pea, can you assist the two accused because if they
are interested in withdrawing their [pleas], I want to hear it from your lips.

Atty. Pea : Yes, your Honor.

(At this juncture, Atty. Pea confers with the two accused, namely Trinidad and Baharan)

I have talked to them, your Honor, and I have explained to them the consequence of their pleas,
your Honor, and that the plea of guilt to the murder case and plea of not guilty to the frustrated
multiple murder actually are inconsistent with their pleas.

Court : With matters that they stipulated upon?

Atty. Pea : Yes, your Honor. So, they are now, since they already plead guilt to the murder case,
then they are now changing their pleas, your Honor, from not guilty to the one of guilt. They are
now ready, your Honor, for re-arraignment.

INTERPRETER: (Read again that portion [of the information] and translated it in Filipino in a
clearer way and asked both accused what their pleas are).

Your Honor, both accused are entering separate pleas of guilt to the crime charged.

COURT : All right. So after the information was re-read to the accused, they have withdrawn
their pleas of not guilty and changed it to the pleas of guilty to the charge of frustrated murder.
Thank you. Are there any matters you need to address at pretrial now? If there are none, then I
will terminate pretrial and accommodate5

As early as in People v. Apduhan, the Supreme Court has ruled that "all trial judges must
refrain from accepting with alacrity an accused's plea of guilty, for while justice demands a
speedy administration, judges are duty bound to be extra solicitous in seeing to it that when an
accused pleads guilty, he understands fully the meaning of his plea and the import of an
inevitable conviction."6 Thus, trial court judges are required to observe the following procedure
under Section 3, Rule 116 of the Rules of Court:

SEC. 3. Plea of guilty to capital offense; reception of evidence. When the accused pleads
guilty to a capital offense, the court shall conduct a searching inquiry into the voluntariness and
full comprehension of the consequences of his plea and shall require the prosecution to prove his
guilt and the precise degree of culpability. The accused may also present evidence in his behalf.
(Emphasis supplied)

The requirement to conduct a searching inquiry applies more so in cases of re-arraignment. In

People v. Galvez, the Court noted that since accused-appellant's original plea was "not guilty,"
the trial court should have exerted careful effort in inquiring into why he changed his plea to
"guilty."7 According to the Court:

The stringent procedure governing the reception of a plea of guilt, especially in a case involving
the death penalty, is imposed upon the trial judge in order to leave no room for doubt on the
possibility that the accused might have misunderstood the nature of the charge and the
consequences of the plea.8

Likewise, the requirement to conduct a searching inquiry should not be deemed satisfied in cases
in which it was the defense counsel who explained the consequences of a "guilty" plea to the
accused, as it appears in this case. In People v. Alborida, this Court found that there was still an
improvident plea of guilty, even if the accused had already signified in open court that his
counsel had explained the consequences of the guilty plea; that he understood the explanation of
his counsel; that the accused understood that the penalty of death would still be meted out to
him; and that he had not been intimidated, bribed, or threatened.9

We have reiterated in a long line of cases that the conduct of a searching inquiry remains the
duty of judges, as they are mandated by the rules to satisfy themselves that the accused had not
been under coercion or duress; mistaken impressions; or a misunderstanding of the significance,
effects, and consequences of their guilty plea.10 This requirement is stringent and mandatory.11

Nevertheless, we are not unmindful of the context under which the re-arraignment was
conducted or of the factual milieu surrounding the finding of guilt against the accused. The Court
observes that accused Baharan and Trinidad previously pled guilty to another charge multiple
murder based on the same act relied upon in the multiple frustrated murder charge. The Court
further notes that prior to the change of plea to one of guilt, accused Baharan and Trinidad made
two other confessions of guilt one through an extrajudicial confession (exclusive television
interviews, as stipulated by both accused during pretrial), and the other via judicial admission
(pretrial stipulation). Considering the foregoing circumstances, we deem it unnecessary to rule
on the sufficiency of the "searching inquiry" in this instance. Remanding the case for re-
arraignment is not warranted, as the accuseds plea of guilt was not the sole basis of the
condemnatory judgment under consideration.12

Second Assignment of Error

In People v. Oden, the Court declared that even if the requirement of conducting a searching
inquiry was not complied with, "[t]he manner by which the plea of guilt is made loses much
of great significance where the conviction can be based on independent evidence proving the
commission by the person accused of the offense charged."13 Thus, in People v. Nadera, the
Court stated:

Convictions based on an improvident plea of guilt are set aside only if such plea is the sole basis
of the judgment. If the trial court relied on sufficient and credible evidence to convict the
accused, the conviction must be sustained, because then it is predicated not merely on the guilty
plea of the accused but on evidence proving his commission of the offense charged.14 (Emphasis
supplied.)

In their second assignment of error, accused-appellants assert that guilt was not proven beyond
reasonable doubt. They pointed out that the testimony of the conductor was merely
circumstantial, while that of Asali as to the conspiracy was insufficient.

Insofar as accused-appellants Baharan and Trinidad are concerned, the evidence for the
prosecution, in addition to that which can be drawn from the stipulation of facts, primarily
consisted of the testimonies of the bus conductor, Elmer Andales, and of the accused-turned-
state-witness, Asali. Andales positively identified accused Baharan and Trinidad as the two men
who had acted suspiciously while inside the bus; who had insisted on getting off the bus in
violation of a Makati ordinance; and who had scampered away from the bus moments before the
bomb exploded. On the other hand, Asali testified that he had given accused Baharan and
Trinidad the TNT used in the bombing incident in Makati City. The guilt of the accused Baharan
and Trinidad was sufficiently established by these corroborating testimonies, coupled with their
respective judicial admissions (pretrial stipulations) and extrajudicial confessions (exclusive
television interviews, as they both stipulated during pretrial) that they were indeed the
perpetrators of the Valentines Day bombing.15 Accordingly, the Court upholds the findings of
guilt made by the trial court as affirmed by the Court of Appeals.

Anent accused Rohmat, the evidence for the prosecution consisted of the testimony of accused-
turned-state-witness Asali. Below is a reproduction of the transcript of stenographic notes on the
state prosecutors direct examination of state-witness Asali during the 26 May 2005 trial:

Q : You stated that Zaky trained you and Trinidad. Under what circumstances did he train
you, Mr. Witness, to assemble those explosives, you and Trinidad?

A : Abu Zaky, Abu Solaiman, Khadaffy Janjalani, the three of them, that Angelo
Trinidad and myself be the one to be trained to make an explosive, sir.

Q : Mr. witness, how long that training, or how long did it take that training?

A : If I am not mistaken, we were thought to make bomb about one month and two
weeks.

Q : Now, speaking of that mission, Mr. witness, while you were still in training at Mr.
Cararao, is there any mission that you undertook, if any, with respect to that mission?

A : Our first mission was to plant a bomb in the malls, LRT, and other parts of Metro
Manila, sir.16

The witness then testified that he kept eight kilos of TNT for accused Baharan and
Trinidad.

Q : Now, going back to the bomb. Mr. witness, did you know what happened to the 2
kilos of bomb that Trinidad and Tapay took from you sometime in November 2004?

A : That was the explosive that he planted in the G-liner, which did not explode.

Q : How did you know, Mr. witness?

A : He was the one who told me, Mr. Angelo Trinidad, sir.

Q : What happened next, Mr. witness, when the bomb did not explode, as told to you by
Trinidad?

A : On December 29, Angelo Trinidad got 2 more kilos of TNT bombs.

Q : Did Trinidad tell you why he needed another amount of explosive on that date,
December 29, 2004? Will you kindly tell us the reason why?

A : He told me that Abu Solaiman instructed me to get the TNT so that he could detonate
a bomb

Q : Were there any other person, besides Abu Solaiman, who called you up, with respect
to the taking of the explosives from you?

A : There is, sir Abu Zaky, sir, called up also.

Q : What did Abu Zaky tell you when he called you up?
A : He told me that "this is your first mission."

Q : Please enlighten the Honorable Court. What is that mission you are referring to?

A : That is the first mission where we can show our anger towards the Christians.

Q : The second time that he got a bomb from you, Mr. witness, do you know if the bomb
explode?

A : I did not know what happened to the next 2 kilos taken by Angelo Trinidad from me
until after I was caught, because I was told by the policeman that interviewed me after I
was arrested that the 2 kilos were planted in a bus, which also did not explode.

Q : So besides these two incidents, were there any other incidents that Angelo Trinidad
and Tapay get an explosive for you, Mr. witness?

A : If I am not mistaken, sir, on February 13, 2005 at 6:30 p.m.

Q : Who got from you the explosive Mr. witness?

A : Its Angelo Trinidad and Tapay, sir.

Q : How many explosives did they get from you, Mr. witness, at that time?

A : They got 2 kilos TNT bomb, sir.

Q : Did they tell you, Mr. witness, where are they going to use that explosive?

A : No, sir.

Q : Do you know, Mr. witness, what happened to the third batch of explosives, which
were taken from you by Trinidad and Tapay?

A : That is the bomb that exploded in Makati, sir.

Q : Why did you know, Mr. witness?

A : Because I was called in the evening of February 14 by Abu Solaiman. He told me not
to leave the house because the explosive that were taken by Tapay and Angelo Trinidad
exploded.

Q : Was there any other call during that time, Mr. Witness?

A : I was told by Angelo Trinidad not to leave the house because the explosive that he
took exploded already, sir.

Q : How sure were you, Mr. witness, at that time, that indeed, the bomb exploded at
Makati, beside the call of Abu Solaiman and Trinidad?

A : It was told by Abu Solaiman that the bombing in Makati should coincide with the
bombing in General Santos.

A : He told it to me, sir I cannot remember the date anymore, but I know it was
sometime in February 2005.

Q : Any other call, Mr. witness, from Abu Solaiman and Trinidad after the bombing
exploded in Makati, any other call?

A : There is, sir The call came from Abu Zaky.

Q : What did Abu Zaky tell you, Mr. witness?

A : He just greeted us congratulations, because we have a successful mission.

A : He told me that "sa wakas, nag success din yung tinuro ko sayo."

Q : By the way, Mr. witness, I would just like to clarify this. You stated that Abu Zaky
called you up the following day, that was February 15, and congratulating you for the
success of the mission. My question to you, Mr. witness, if you know what is the relation
of that mission, wherein you were congratulated by Abu Zaky, to the mission, which
have been indoctrinated to you, while you were in Mt. Cararao, Mr. witness?
 A : They are connected, sir.

Q : Connected in what sense, Mr. witness?

A : Because when we were undergoing training, we were told that the Abu Sayyaf should
not wage war to the forest, but also wage our battles in the city.

Q : Wage the battle against who, Mr. witness?

A : The government, sir.17

What can be culled from the testimony of Asali is that the Abu Sayyaf Group was determined to
sow terror in Metro Manila, so that they could show their "anger towards the Christians."18 It can
also be seen that Rohmat, together with Janjalani and Abu Solaiman, had carefully planned the
Valentines Day bombing incident, months before it happened. Rohmat had trained Asali and
Trinidad to make bombs and explosives. While in training, Asali and others were told that their
mission was to plant bombs in malls, the LRT, and other parts of Metro Manila. According to
Asali, Rohmat called him on 29 December 2004 to confirm that Trinidad would get two kilos of
TNT from Asali, as they were "about to commence" their "first mission."19 They made two
separate attempts to bomb a bus in Metro Manila, but to no avail. The day before the Valentines
Day bombing, Trinidad got another two kilos of TNT from Asali. On Valentines Day, the Abu
Sayyaf Group announced that they had a gift for the former President, Gloria Macapagal-Arroyo.
On their third try, their plan finally succeeded. Right after the bomb exploded, the Abu Sayyaf
Group declared that there would be more bombings in the future. Asali then received a call from
Rohmat, praising the former: "Sa wakas nag success din yung tinuro ko sayo."20

In the light of the foregoing evidence, the Court upholds the finding of guilt against Rohmat.
Article 17 of the Revised Penal Code reads:

Art. 17. Principals. The following are considered principals:

1. Those who take a direct part in the execution of the act

2. Those who directly force or induce others to commit it

3. Those who cooperate in the commission of the offense by another act without which it would
not have been accomplished

Accused Rohmat is criminally responsible under the second paragraph, or the provision on
"principal by inducement." The instructions and training he had given Asali on how to make
bombs coupled with their careful planning and persistent attempts to bomb different areas in
Metro Manila and Rohmats confirmation that Trinidad would be getting TNT from Asali as part
of their mission prove the finding that Rohmats co-inducement was the determining cause of
the commission of the crime.21 Such "command or advice [was] of such nature that, without it,
the crime would not have materialized."22lawphi1
Further, the inducement was "so influential in producing the criminal act that without it, the act
would not have been performed."23 In People v. Sanchez, et al., the Court ruled that,
notwithstanding the fact that Mayor Sanchez was not at the crime scene, evidence proved that he
was the mastermind of the criminal act or the principal by inducement. Thus, because Mayor
Sanchez was a co-principal and co-conspirator, and because the act of one conspirator is the act
of all, the mayor was rendered liable for all the resulting crimes.24 The same finding must be
applied to the case at bar.

The Court also affirms the finding of the existence of conspiracy involving accused Baharan,
Trinidad, and Rohmat. Conspiracy was clearly established from the "collective acts of the
accused-appellants before, during and after the commission of the crime." As correctly declared
by the trial court in its Omnibus Decision:

Asalis clear and categorical testimony, which remains unrebutted on its major points, coupled
with the judicial admissions freely and voluntarily given by the two other accused, are sufficient
to prove the existence of a conspiracy hatched between and among the four accused, all members
of the terrorist group Abu Sayyaf, to wreak chaos and mayhem in the metropolis by
indiscriminately killing and injuring civilian victims by utilizing bombs and other similar
destructive explosive devices.

While said conspiracy involving the four malefactors has not been expressly admitted by accused
Baharan, Angelo Trinidad, and Rohmat, more specifically with respect to the latters
participation in the commission of the crimes, nonetheless it has been established by virtue of the
aforementioned evidence, which established the existence of the conspiracy itself and the
indispensable participation of accused Rohmat in seeing to it that the conspirators criminal
design would be realized.

It is well-established that conspiracy may be inferred from the acts of the accused, which clearly
manifests a concurrence of wills, a common intent or design to commit a crime (People v.
Lenantud, 352 SCRA 544). Hence, where acts of the accused collectively and individually
demonstrate the existence of a common design towards the accomplishment of the same
unlawful purpose, conspiracy is evident and all the perpetrators will be held liable as principals
(People v. Ellado, 353 SCRA 643).25

In People v. Geronimo, the Court pronounced that it would be justified in concluding that the
defendants therein were engaged in a conspiracy "when the defendants by their acts aimed at the
same object, one performing one part and the other performing another part so as to complete it,
with a view to the attainment of the same object; and their acts, though apparently independent,
were in fact concerted and cooperative, indicating closeness of personal association, concerted
action and concurrence of sentiments."26

Accused contend that the testimony of Asali is inadmissible pursuant to Sec. 30, Rule 130 of the
Rules of Court. It is true that under the rule, statements made by a conspirator against a co-
conspirator are admissible only when made during the existence of the conspiracy. However, as
the Court ruled in People v. Buntag, if the declarant repeats the statement in court, his
extrajudicial confession becomes a judicial admission, making the testimony admissible as to
both conspirators.27 Thus, in People v. Palijon, the Court held the following:

[W]e must make a distinction between extrajudicial and judicial confessions. An extrajudicial
confession may be given in evidence against the confessant but not against his co-accused as
they are deprived of the opportunity to cross-examine him. A judicial confession is admissible
against the declarants co-accused since the latter are afforded opportunity to cross-examine the
former. Section 30, Rule 130 of the Rules of Court applies only to extrajudicial acts or
admissions and not to testimony at trial where the party adversely affected has the opportunity to
cross-examine the declarant. Mercenes admission implicating his co-accused was given on the
witness stand. It is admissible in evidence against appellant Palijon. Moreover, where several
accused are tried together for the same offense, the testimony of a co-accused implicating his co-
accused is competent evidence against the latter.28

WHEREFORE, the Petition is DENIED. The Decision of the Regional Trial Court of Makati, as
affirmed with modification by the Court of Appeals, is hereby AFFIRMED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

Republic of the Philippines vs Sandiganbayan

EN BANC

G.R. No. 152375 December 16, 2011

REPUBLIC OF THE PHILIPPINES, Petitioner,

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

DECISION

BRION, J.:

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

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

Civil Case No. 0009 is the main case subject of the present petition. Victor Africa (Africa), son
of the late Jose L. Africa, was not impleaded in and so is plainly not a party to Civil Case No.
0009.5

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

I. Civil Case No. 0130

In the August 7, 1991 PCGG-conducted ETPI stockholders meeting, a PCGG-controlled board

of directors was elected. Later, the registered ETPI stockholders convened a special stockholders
meeting wherein another set of board of directors was elected. As a result, two sets of ETPI
board and officers were elected.8

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

[T]o account for his sequestered shares in ETPI and to cease and desist from exercising voting
rights on the sequestered shares in the special stockholders meeting to be held on August 12,
1991, from representing himself as a director, officer, employee or agent of ETPI, and from
participating, directly or indirectly[,] in the management of ETPI.9

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

In its November 13, 1992 resolution, the Sandiganbayan favored Africas motion in this wise:
WHEREFORE, it is ordered that an annual stockholders meeting of the [ETPI], for 1992 be held
on Friday, November 27, 1992, at 2:00 oclock in the afternoon, at the ETPI Board Room,
Telecoms Plaza, 7th Floor, 316 Gil J. Puyat Avenue, Makati, Metro Manila. x x x The
stockholders meeting shall be conducted under the supervision and control of this Court, through
Mr. Justice Sabino R. de Leon, Jr. [O]nly the registered owners, their duly authorized
representatives or their proxies may vote their corresponding shares.

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

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

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

During the pendency of PCGGs petition (G.R. No. 107789), the PCGG filed with this Court a
"Very Urgent Petition for Authority to Hold Special Stockholders Meeting for [the] Sole
Purpose of Increasing [ETPIs] Authorized Capital Stock" (Urgent Petition). In our May 7, 1996
Resolution, we referred this Urgent Petition to the Sandiganbayan for reception of evidence and
immediate resolution.16 The Sandiganbayan included the Urgent Petition in Civil Case No.
0130.17

In the proceedings to resolve the Urgent Petition, the testimony of Mr. Maurice V. Bane (former
director and treasurer-in-trust of ETPI) was taken at the petitioners instance and after serving
notice of the deposition-taking on the respondents18 on October 23 and 24, 1996 by way of
deposition upon oral examination (Bane deposition) before Consul General Ernesto Castro of the
Philippine Embassy in London, England.

Invoking Section 1, Rule 24 (of the old Rules of Court), purportedly allowing the petitioner to
depose Bane without leave of court, i.e., as a matter of right after the defendants have filed their
answer, the notice stated that "[t]he purpose of the deposition is for [Bane] to identify and testify
on the facts set forth in his affidavit19 x x x so as to prove the ownership issue in favor of [the
petitioner] and/or establish the prima facie factual foundation for sequestration of [ETPIs] Class
A stock in support of the [Urgent Petition]."20 The notice also states that the petitioner shall use
the Bane deposition "in evidence in the main case of Civil Case No. 0009."21 On the scheduled
deposition date, only Africa was present and he cross-examined Bane.

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

We jointly resolved the PCGGs and Africas petitions, and ruled:

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

xxxx

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

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

II. Civil Case No. 0009

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

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

WITNESSES TO BE PRESENTED AND A BRIEF DESCRIPTION OF THEIR

TESTIMONIES

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

xxxx

(2) Mr. Manuel H. Nieto x x x

(3) Ms. Evelyn Singson x x x

 (4) Mr. Severino P. Buan, Jr. x x x

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

(6) Mr. Potenciano A. Roque x x x

(7) Caesar Parlade - x x x

IIa. Motion to Admit the Bane Deposition

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

1. In the hearings of the incidents of [Civil Case No. 0009], i.e., Civil Case Nos. 0048,
0050, 0130, 014628 the following witnesses were presented therein:

a. Cesar O.V. Parlade

b. Maurice Bane

c. Evelyn Singson

d. Leonorio Martinez

e. Ricardo Castro; and

f. Rolando Gapud

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

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

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

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

Wherefore, the [petitioners] Motion x x x is

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

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

1. xxx

2. xxx

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

IIb. Urgent Motion and/or Request for Judicial Notice

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

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

2. In the alternative, x x x the [Sandiganbayan] to take judicial notice of the facts

established by the [Bane deposition], together with the marked exhibits appended thereto.
[emphasis ours]

On August 21, 2000, the Sandiganbayan promulgated a resolution35 (2000 resolution) denying
the petitioners 2nd motion:

Judicial notice is found under Rule 129 which is titled "What Need Not Be Proved." Apparently,
this provision refers to the Courts duty to consider admissions made by the parties in the
pleadings, or in the course of the trial or other proceedings in resolving cases before it. The duty
of the Court is mandatory and in those cases where it is discretionary, the initiative is upon the
Court. Such being the case, the Court finds the Urgent Motion and/or Request for Judicial Notice
as something which need not be acted upon as the same is considered redundant.
On the matter of the [Bane deposition], [its] admission is done through the ordinary formal offer
of exhibits wherein the defendant is given ample opportunity to raise objection on grounds
provided by law. Definitely, it is not under Article (sic) 129 on judicial notice. [Emphasis ours]

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

IIc. Motion to Admit Supplemental Offer of

Evidence (Re: Deposition of Maurice Bane)

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

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

The resolution triggered the filing of the present petition.

THE PETITION

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

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

II.

x x x IN x x x REFUSING TO ADMIT THE BANE DEPOSITION WHICH WAS

ALREADY ADMITTED AS EVIDENCE IN AN INCIDENT CASE (CIVIL CASE
NO. 0130) AS PART OF PETITIONERS EVIDENCE IN THE MAIN x x x
CASE (CIVIL CASE NO. 0009).

III.

x x x IN REFUSING TO ADMIT A HIGHLY RELEVANT AND IMPORTANT

PIECE OF EVIDENCE FOR THE PETITIONER ON THE BASIS OF FLIMSY
AND TENUOUS TECHNICAL GROUNDS.

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

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

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

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

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

3. The non-inclusion of the Bane deposition in the petitioners formal offer of evidence
was obviously excusable considering the period that had lapsed from the time the case
was filed and the voluminous records that the present case has generated.43
 THE RESPONDENTS COMMENTS
and THE PETITIONERS REPLY

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

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

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

In its Reply,49 the petitioner defends the timeliness of the present petition by arguing that a party
may opt to wait out and collect a pattern of questionable acts before resorting to the
extraordinary remedy of certiorari. The petitioner stresses that it filed the 3rd motion precisely
because of the Sandiganbayans 2000 resolution, which held that the admission of the Bane
deposition should be done through the ordinary formal offer of evidence. Thus, the
Sandiganbayan seriously erred in considering the petitioners 3rd motion as a proscribed motion
for reconsideration. The petitioner generally submits that the dictates of substantial justice should
have guided the Sandiganbayan to rule otherwise.

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

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

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

THE ISSUES

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

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

2. Whether the Sandiganbayan committed grave abuse of discretion

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

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

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

iv. In refusing to admit the Bane deposition notwithstanding the prior

consolidation of Civil Case No. 0009 and Civil Case No. 0130.

3. Whether the Bane deposition is admissible under -

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

ii. The principle of judicial notice.

THE COURTS RULING

We deny the petition for lack of merit.

I. Preliminary Considerations

I (a). The interlocutory nature of the Sandiganbayans 1998 resolution.

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

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

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

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

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

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

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

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

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

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

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

We note that at the time of its 1st motion in Civil Case No. 0009, the petitioner had not yet
concluded the presentation of its evidence, much less made any formal offer of evidence. At this
stage of the case, the prematurity of using the extraordinary remedy of certiorari to question the
admission of the Bane deposition is obvious. After the denial of the 1st motion, the plain remedy
available to the petitioner was to move for a reconsideration to assert and even clarify its position
on the admission of the Bane deposition. The petitioner could introduce60 anew the Bane
deposition and include this as evidence in its formal offer61 as the petitioner presumably did in
Civil Case No. 0130.

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

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

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

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

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

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

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

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

Although the denial of the petitioners first motion did not necessitate an immediate recourse to
the corrective writ of certiorari, the denial of the 2nd motion dictated a different course of
action. The petitioners non-observance of the proper procedure for the admission of the Bane
deposition, while seemingly innocuous, carried fatal implications for its case. Having been
rebuffed on its first attempt to have the Bane deposition adopted in Civil Case No. 0009, and
without seeking reconsideration of the denial, the petitioner presented its other pieces of
evidence and eventually rested its case. This time, the petitioner forgot about the Bane deposition
and so failed to include that piece of evidence in its formal offer of evidence.
More than two years later, the petitioner again tried to squeeze in the Bane deposition into its
case. In resolving the petitioners motion for reconsideration of the Sandiganbayans 2000
resolution, the Sandiganbayan held that the Bane deposition has "become part and parcel" of
Civil Case No. 0009. This pronouncement has obscured the real status of the Bane deposition as
evidence (considering that, earlier, the Sandiganbayan already denied the petitioners attempt to
adopt the Bane deposition as evidence in Civil Case No. 0009 for the deponent cannot be cross-
examined in court). Nevertheless, the Sandiganbayan ultimately denied the petitioners motion to
reopen the case. Having judicially admitted the resting of its case, the petitioner should have
already questioned the denial of its 2nd motion by way of certiorari, since the denial of its
attempt to reopen the case effectively foreclosed all avenues available to it for the consideration
of the Bane deposition. Instead of doing so, however, the petitioner allowed the 60-day
reglementary period, under Section 4, Rule 65 of the Rules of Court, to lapse, and proceeded
to file its 3rd motion.

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

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

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

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

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

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

Under this rule, a party who has the burden of proof must introduce, at the first instance, all the
evidence he relies upon74 and such evidence cannot be given piecemeal.75 The obvious rationale
of the requirement is to avoid injurious surprises to the other party and the consequent delay in
the administration of justice.76

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

Largely, the exercise of the courts discretion80 under the exception of Section 5(f), Rule 30 of
the Rules of Court depends on the attendant facts i.e., on whether the evidence would qualify
as a "good reason" and be in furtherance of "the interest of justice." For a reviewing court to
properly interfere with the lower courts exercise of discretion, the petitioner must show that the
lower courts action was attended by grave abuse of discretion. Settled jurisprudence has defined
this term as the capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction;
or, the exercise of power in an arbitrary manner by reason of passion, prejudice, or personal
hostility, so patent or so gross as to amount to an evasion of a positive duty, to a virtual refusal to
perform the mandated duty, or to act at all in contemplation of the law.81 Grave abuse of
discretion goes beyond the bare and unsupported imputation of caprice, whimsicality or
arbitrariness, and beyond allegations that merely constitute errors of judgment82 or mere abuse of
discretion.83

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

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

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

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

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

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

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

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

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

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

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

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

IV. The admissibility of the Bane deposition

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

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

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

Rule 31
Consolidation or Severance

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

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

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

These observations are not without practical reason. Considering that consolidation is basically a
function given to the court, the latter is in the best position to determine for itself (given the
nature of the cases, the complexity of the issues involved, the parties affected, and the courts
capability and resources vis--vis all the official business pending before it, among other things)
what "consolidation" will bring, bearing in mind the rights of the parties appearing before it.
To disregard the kind of consolidation effected by the Sandiganbayan on the simple and
convenient premise that the deposition-taking took place after the Sandiganbayan ordered the
consolidation is to beg the question. It is precisely the silence of our Rules of Procedure and the
dearth of applicable case law on the effect of "consolidation" that strongly compel this Court to
determine the kind of "consolidation" effected to directly resolve the very issue of admissibility
in this case.

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

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

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

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

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

Significantly, even the petitioner itself viewed consolidation, at most, to be merely a

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

These considerations run counter to the conclusion that the Sandiganbayans order of
consolidation had actually resulted in the complete merger of the incident cases with the main
case, in the sense of actual consolidation, and that the parties in these consolidated cases had (at
least constructively) been aware of and had allowed actual consolidation without objection.104
Considering, too, that the consolidated actions were originally independent of one another and
the fact that in the present case the party respondents to Civil Case No. 0009 (an action for
reconveyance, accounting, restitution and damages) are not parties to Civil Case No. 0130 (a
special civil action filed by an ETPI stockholder involving a corporate squabble within ETPI),
the conclusion that the Sandiganbayan in fact intended an actual consolidation and, together with
the parties affected,105 acted towards that end - where the actions become fused and
unidentifiable from one another and where the evidence appreciated in one action is also
appreciated in another action must find support in the proceedings held below. This is
particularly true in a case with the magnitude and complexity of the present case. Otherwise, to
impose upon the respondents the effects of an actual consolidation (which find no clear support
in the provisions of the Rules of Court, jurisprudence,106 and even in the proceedings before the
Sandiganbayan itself and despite the aforementioned considerations) results in an outright
deprivation of the petitioners right to due process. We reach this conclusion especially where
the evidence sought to be admitted is not simply a testimony taken in one of the several cases,
but a deposition upon oral examination taken in another jurisdiction and whose admission is
governed by specific provisions on our rules on evidence.

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

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

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

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

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

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

xxxx

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

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

SEC. 47. Testimony or deposition at a former proceeding. The testimony or deposition of a

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

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

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

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

A deposition is chiefly a mode of discovery whose primary function is to supplement the

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

Examination to be done in open court. The examination of witnesses presented in a trial or

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

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

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

This opportunity to cross-examine though is not the ordinary cross-examination119 afforded an

adverse party in usual trials regarding "matters stated in the direct examination or connected
therewith." Section 47, Rule 130 of the Rules of Court contemplates a different kind of cross-
examination, whether actual or a mere opportunity, whose adequacy depends on the requisite
identity of issues in the former case or proceeding and in the present case where the former
testimony or deposition is sought to be introduced.

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

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

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

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

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

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

3. Involving the same parties;

4. Relating to the same matter;

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

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

IV (c). Unavailability of witness

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

(3) that the witness is unable to attend or testify because of age, sickness, infirmity, or
imprisonment[.] [emphases ours]126
The phrase "unable to testify" appearing in both Rule 23 and Rule 130 of the Rules of Court
refers to a physical inability to appear at the witness stand and to give a testimony.127 Hence
notwithstanding the deletion of the phrase "out of the Philippines," which previously appeared in
Section 47, Rule 130 of the Rules of Court, absence from jurisdiction128 - the petitioners excuse
for the non-presentation of Bane in open court - may still constitute inability to testify under the
same rule. This is not to say, however, that resort to deposition on this instance of unavailability
will always be upheld. Where the deposition is taken not for discovery purposes, but to
accommodate the deponent, then the deposition should be rejected in evidence.129

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

Indeed, the Sandiganbayans reliance on the Bane deposition in the other case (Civil Case No.
0130) is an argument in favor of the requisite unavailability of the witness. For purposes of the
present case (Civil Case No. 0009), however, the Sandiganbayan would have no basis to
presume, and neither can or should we, that the previous condition, which previously allowed the
use of the deposition, remains and would thereby justify the use of the same deposition in
another case or proceeding, even if the other case or proceeding is before the same court. Since
the basis for the admission of the Bane deposition, in principle, being necessity,131 the burden of
establishing its existence rests on the party who seeks the admission of the evidence. This burden
cannot be supplanted by assuming the continuity of the previous condition or conditions in light
of the general rule against the non-presentation of the deponent in court.132

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

parties; and identity of subject matter

The function of cross-examination is to test the truthfulness of the statements of a witness made
on direct examination.133 The opportunity of cross-examination has been regarded as an essential
safeguard of the accuracy and completeness of a testimony. In civil cases, the right of cross-
examination is absolute, and is not a mere privilege of the party against whom a witness may be
called.134 This right is available, of course, at the taking of depositions, as well as on the
examination of witnesses at the trial. The principal justification for the general exclusion of
hearsay statements and for the admission, as an exception to the hearsay rule, of reported
testimony taken at a former hearing where the present adversary was afforded the opportunity to
cross-examine, is based on the premise that the opportunity of cross-examination is an essential
safeguard135 against falsehoods and frauds.

In resolving the question of whether the requirement of opportunity to cross-examine has been
satisfied, we have to consider first the required identity of parties as the present opponent to the
admission of the Bane deposition to whom the opportunity to cross-examine the deponent is
imputed may not after all be the same "adverse party" who actually had such opportunity.
To render the testimony of a witness admissible at a later trial or action, the parties to the first
proceeding must be the same as the parties to the later proceeding. Physical identity, however, is
not required; substantial identity136 or identity of interests137 suffices, as where the subsequent
proceeding is between persons who represent the parties to the prior proceeding by privity in
law, in blood, or in estate. The term "privity" denotes mutual or successive relationships to the
same rights of property.138

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

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

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

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

The records show that Africa moved several times for protective orders against the intended
deposition of Maurice Bane.142 On the other hand, among the respondents, only respondent
Enrile appears to have filed an Opposition143 to the petitioners first notice, where he squarely
raised the issue of reasonability of the petitioners nineteen-day first notice. While the
Sandiganbayan denied Africas motion for protective orders,144 it strikes us that no ruling was
ever handed down on respondent Enriles Opposition.145

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

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

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

In the present case, not only did the Sandiganbayan fail to rule on respondent Enriles Opposition
(which is equally applicable to his co-respondents), it also failed to provide even the bare
minimum "safeguards for the protection of," (more so) non-parties,147 and to ensure that these
safeguards are firmly maintained. Instead, the Sandiganbayan simply bought the petitioners
assertion (that the taking of Bane deposition is a matter of right) and treated the lingering
concerns e.g., reasonability of the notice; and the non-party status of the respondents in Civil
Case No. 0130 - at whose incident (docketed as G.R. No. 107789) the Bane deposition was taken
- rather perfunctorily to the prejudice of the respondents.

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

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

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

In light of these considerations, we reject the petitioners claim that the respondents waived their
right to cross-examination when they failed to attend the taking of the Bane deposition.
Incidentally, the respondents vigorous insistence on their right to cross-examine the deponent
speaks loudly that they never intended any waiver of this right.
Interestingly, the petitioners notice of the deposition-taking relied on Rule 23 of the Rules of
Court. Section 15 of this rule reads:

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

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

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

After failing to take Banes deposition in 1991 and in view of the peculiar circumstances of this
case, the least that the petitioner could have done was to move for the taking of the Bane
deposition and proceed with the deposition immediately upon securing a favorable ruling
thereon. On that occasion, where the respondents would have a chance to be heard, the
respondents cannot avoid a resultant waiver of their right of cross-examination if they still fail to
appear at the deposition-taking. Fundamental fairness dictates this course of action. It must be
stressed that not only were the respondents non-parties to Civil Case No. 0130, they likewise
have no interest in Africas certiorari petition asserting his right as an ETPI stockholder.
Setting aside the petitioners flip-flopping on its own representations,151 this Court can only
express dismay on why the petitioner had to let Bane leave the Philippines before taking his
deposition despite having knowledge already of the substance of what he would testify on.
Considering that the testimony of Bane is allegedly a "vital cog" in the petitioners case against
the respondents, the Court is left to wonder why the petitioner had to take the deposition in an
incident case (instead of the main case) at a time when it became the technical right of the
petitioner to do so.

V. The petitioner cannot rely on principle of judicial notice

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

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

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

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

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

As a matter of convenience to all the parties, a court may properly treat all or any part of the
original record of a case filed in its archives as read into the record of a case pending before it,
when, with the knowledge of, and absent an objection from, the adverse party, reference is
made to it for that purpose, by name and number or in some other manner by which it is
sufficiently designated; or when the original record of the former case or any part of it, is
actually withdrawn from the archives at the court's direction, at the request or with the consent of
the parties, and admitted as a part of the record of the case then pending.159
Courts must also take judicial notice of the records of another case or cases, where sufficient
basis exists in the records of the case before it, warranting the dismissal of the latter case.160

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

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

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

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

VI. Summation

To recapitulate, we hold that: (1) the Sandiganbayans denial of the petitioners 3rd motion the
Motion to Admit Supplemental Offer of Evidence (Re: Deposition of Maurice Bane) was a legal
error that did not amount to grave abuse of discretion; (2) the Sandiganbayans refusal to reopen
the case at the petitioners instance was tainted with grave abuse of discretion; and (3)
notwithstanding the grave abuse of discretion, the petition must ultimately fail as the Bane
deposition is not admissible under the rules of evidence.165

VII. Refutation of Justice Carpios Last Minute Modified Dissent

At the last minute, Justice Carpio circulated a modified dissent, quoting the Bane deposition. His
covering note states:
I have revised my dissenting opinion to include the Bane deposition so that the Court and the
public will understand what the Bane deposition is all about. (underlining added)

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

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

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

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

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

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

The term consolidation is used in three different senses. First, where several actions are
combined into one and lose their separate identity and become a single action in which a single
judgment is rendered; second, where all except one of several actions are stayed until one is
tried, in which case the judgment in the one is conclusive as to the others; third, where several
actions are ordered to be tried together but each retains its separate character and requires the
entry of a separate judgment. The failure to distinguish between these methods of procedure,
which are entirely distinct, the two latter, strictly speaking, not being consolidation, a fact which
has not always been noted, has caused some confusion and conflict in the cases. (1 C.J.S., 107,
pp. 1341-1342) (Emphasis added).
In defining the term "consolidation of actions," Francisco provided a colatilla that the term
"consolidation" is used in three different senses, citing 1 C.J.S. 1341 and 1 Am. Jur. 477
(Francisco, Revised Rules of Court, p. 348).

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

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

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

Fourth: The Due Process Consideration. The dissent argues that even if the consolidation only
resulted in a joint hearing or trial, the "respondents are still bound by the Bane deposition
considering that they were given notice of the deposition-taking." The issue here boils down to
one of due process the fundamental reason why a hearsay statement (not subjected to the rigor
of cross-examination) is generally excluded in the realm of admissible evidence especially
when read in light of the general rule that depositions are not meant as substitute for the actual
testimony, in open court, of a party or witness.

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

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

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

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

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

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice
 JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Court.

RENATO C. CORONA
Chief Justice

Footnotes
1
Under Rule 65 of the Rules of Court.
2
Penned by Associate Justice Rodolfo G. Palattao, and concurred in by Associate
Justices Narciso S. Nario and Nicodemo T. Ferrer; rollo, pp. 60-67.
3
Fourth Division.
4
Petitioners Motion to Admit Supplemental Offer of Evidence and Comment/Opposition
Ad Cautelam; rollo, pp. 370-371.
5
See Republic v. Sandiganbayan, 334 Phil. 475 (1997).
6
Petitioners Reply; id. at 744-745.
7
Entitled Victor Africa v. Presidential Commission on Good Government.
8
See Republic of the Phils. v. Sandiganbayan, 450 Phil. 98, 104 (2003).
9
Id. at 103.
10
Id. at 104.
11
Id. at 103.
12
Id. at 104-105.
13
Resolved by this Court on April 30, 2003.
14
Republic of the Phils. v. Sandiganbayan, supra note 8.
15
Rollo, p. 304. The other incident cases which were consolidated with the main case are
as follows:

1. Civil Case No. 0043 (Polygon Investors and Managers, Inc. v. PCGG) a complaint
praying that judgment be rendered enjoining the PCGG, its commissioners, officers,
employees, agents and/or representatives from enforcing and/or implementing a writ of
sequestration.

2. Civil Case No. 0044 (Aerocom Investors and Managers, Inc. v. PCGG) a complaint
praying that the Writ of Sequestration dated June 15, 1988 and Mission Order No. MER-
88-20 dated August 1, 1988 be declared null and void ab initio.

3. Civil Case No. 0045 (Africa v. PCGG) an amended complaint praying that judgment
be rendered restraining (a) defendant Eduardo M. Villanueva from representing himself
and acting as Director, President and/or General Manager of ETPI and committing or
continuing to exercise the power, authority and functions appertaining to such office; and
(b) defendant PCGG from directly or indirectly interfering with the management of ETPI.

4. Civil Case No. 0047 (Africa v. Gutierrez, et al.) a complaint praying that defendants
be enjoined from acting as directors of ETPI.

5. Civil Case No. 0131 (Traders Royal Bank v. PCGG, Africa, et al.) complaint praying
that defendants be ordered to interplead and litigate their conflicting claims.

6. Civil Case No. 0139 (Far East Bank and Trust Company v. PCGG, Africa, et al.) a
complaint praying that defendants be directed to interplead and litigate their respective
claims on the proceeds of the deposit accounts maintained with plaintiff and that
judgment be accordingly rendered.

7. Civil Case No. 0143 (Standard Chartered Bank v. PCGG, Africa, Nieto, et al.) a
complaint praying that judgment be rendered requiring all the defendants to interplead
among themselves and litigate to determine who are the legitimate signatories of OWNI
in its accounts with the plaintiff.

8. Civil Case No. 0128 (Traders Royal Bank v. PCGG) a complaint praying that
defendants be directed to interplead and litigate their conflicting claims between them,
and that judgment be rendered accordingly.
9. Civil Case No. 0106 (Domestic Satellite Philippines, Inc. v. PCGG and Asset
Privatization Trust) a petition praying that PCGG be ordered to withdraw its objection
to the alleged settlement agreed upon between DOMSAT and APT.

10. Civil Case No. 0114 (PHILCOMSAT and POTC v. PCGG) a complaint seeking to
declare as null and void the writs of sequestration issued by PCGG over plaintiffs-
corporations and to enjoin PCGG and its officers, agents, and nominees from interfering
with the management and operations of the plaintiffs-corporations. (Records, Volume III,
pp. 451-452; 841-843.)
16
Resolution dated December 13, 1996; id. at 300.
17
Ibid.
18
Petitioner sent to the respondents a Notice to Take Oral Deposition of Mr. Maurice V.
Bane dated August 30, 1996, pursuant to Section 1, Rule 24 of the Revised Rules of
Court (Records, Volume XXXVI, pp. 11534-11535), which the Sandiganbayan "noted."
Considering Victor Africas manifestation, among others, that he was not available on the
previously scheduled dates, on September 25, 1996, the petitioner filed and sent a Second
Amended Notice to Take Deposition of Mr. Maurice V. Bane upon Oral Examination
(Rollo, pp. 68-71). The Second Amended Notice reads:

The right to take deposition de bene esse is a precautionary privilege to prevent

[the] loss of evidence in the event the attendance of the witness at the trial cannot
be procured. Hence, Section 1, Rule 24 of the Revised Rules of Court, specifically
grants the plaintiff the right to depose Mr. Maurice Bane without leave of court. x
x x.

It should moreover be noted that Mr. Maurice Bane, who resides in England, has
resigned from Cable and Wireless and is unable to travel to Manila to attend or
testify before this Honorable Court. Section 4, Rule 24, allows Plaintiff to use Mr.
Maurice V. Banes proposed deposition in evidence insofar as the same may be
admissible under the Rules of Evidence. (underscoring and boldfacing supplied)
19
Rollo, pp. 292-297.
20
Id. at 68-69. The records show that Maurice Bane executed the aforesaid affidavit
dated January 1991 in Makati, Metro Manila, Philippines. Records, Volume III, pp. 683-
688.
21
Id. at 69.
22
Id. at 299-321.
23
Republic of the Phils. v. Sandiganbayan, supra note 8, at 109.
24
Resolved by this Court on April 30, 2003.
25
Sandiganbayan Third Division Pre-Trial Order dated March 17, 1997, p. 1; rollo, p.
576. Penned by Associate Justice Sabino R. de Leon, Jr., and concurred in by Associate
Justices Cipriano A. del Rosario and Leonardo I. Cruz.
26
Records, Volume XXXVI, p. 11405.
27
Dated January 21, 1998; id. at 322-329. Originally, what the petitioner filed was a
Manifestation that it was adopting the testimonies of specified witnesses, among others.
However, on January 8, 1998, the Sandiganbayan required the petitioner "to file a
corrected pleading in the form of a motion in lieu of the Manifestation." (Records,
Volume XLIV, pp. 128-130, 175).
28
Civil Case Nos. 0048, 0050 and 0146 were ordered consolidated with Civil Case No.
0009 by the Court in Africa v. PCGG, G.R. Nos. 83831, 85594, 85597, and 85621,
January 9, 1992, 205 SCRA 38.
29
Records, Volume XLIV, pp. 278-282 and 497-500; Volume XLV, pp. 3-6 and 22-26.
30
Dated March 13, 1998; Rollo, pp. 593-597.
31
Fourth Division.
32
Penned by Associate Justice Sabino R. de Leon, Jr., and concurred in by Associate
Justices Narciso S. Nario and Teresita J. Leonardo-de Castro (now a Member of this
Court); rollo, pp. 331-338.
33
Id. at 18.
34
Id. at 339-346.
35
Penned by Associate Justice Rodolfo G. Palattao, and concurred in by Associate
Justices Narciso S. Nario and Nicodemo T. Ferrer; id. at 352-355.
36
Id. at 777-778.
37
Id. at 357-359.
38
Id. at 360-368.
39
The Sandiganbayan (Fourth Division) promulgated on April 1, 2003 a resolution
denying the demurrers to evidence filed by the respondents; id. at 777-790.
40
Supra note 2.
41
Represented by the Office of the Solicitor General. While this case was pending, then
Chief Presidential Legal Counsel Eduardo Antonio Nachura was appointed Solicitor
General, formerly a Member of this Court.
42
Rollo, p. 28, citing People v. MTC of Quezon City, 333 Phil. 500 (1996).
43
Id. at 35-50.
44
In his Manifestation, respondent Ferdinand R. Marcos, Jr. stated that he was adopting
the Comment of respondent Nieto; id. at 856-857. On the other hand, respondent Juan
Ponce Enrile and the substituted heirs of respondent Jose Africa merely reiterated the
arguments advanced by respondent Nieto.
45
Id. at 471.
46
Section 4, Rule 65 of the Rules of Court reads:

When and where petition filed. The petition shall be filed not later than sixty (60) days
from notice of the judgment, order or resolution. In case a motion for reconsideration or
new trial is timely filed, whether such motion is required or not, the sixty (60) day period
shall be counted from notice of the denial of said motion.
47
Respondent Nietos Comment, citing GSIS v. CA, 334 Phil. 163 (1997); rollo, p. 490.
48
Respondent Nietos Comment, citing Vicente J. Francisco, The Revised Rules of Court
in the Philippines, p. 338; id. at 489.
49
Id. at 521-528.
50
Petitioners Reply (to Nietos Comment), citing Regalado, Remedial Law Compendium,
p. 582, 2001 ed.; id. at 522.
51
Raymundo v. Isagon Vda. de Suarez, G.R. No. 149017, November 28, 2008, 572
SCRA 384.
52
Investments, Inc. v. Court of Appeals, 231 Phil. 302 (1987), cited in Denso (Phils.), Inc.
v. Intermediate Appellate Court, 232 Phil. 256 (1987).
53
Rudecon Management Corp. v. Singson, 494 Phil. 581 (2005).
54
Tomacruz-Lactao v. Espejo, 478 Phil. 755 (2004).
55
Jose Y. Feria and Maria Concepcion Noche, 2 Civil Procedure Annotated, 2001 ed.,
pp. 151-152, citing Manila Electric Co. v. Artiaga and Green, 50 Phil. 144, 147 (1927).
This proceeds from the court's inherent power to control its process and orders so as to
make them conformable to law and justice. The only limitation is that the judge cannot
act with grave abuse of discretion, or that no injustice results thereby (Bangko Silangan
Development Bank v. Court of Appeals, 412 Phil. 755 [2001]).
56
Rule 41, Section 1 of the Rules of Court reads:

Subject of appeal. An appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by
these Rules to be appealable. No appeal may be taken from:

xxxx

(c) An interlocutory order;

xxxx

In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.
57
Rollo, p. 31, citing Philgreen Trading Construction Corp. v. Court of Appeals, 338
Phil. 433 (1997).
58
Indiana Aerospace University v. Commission on Higher Education, 408 Phil. 483
(2001).
59
Africa v. Hon. Sandiganbayan, 350 Phil. 846 (1998).
60
When a deposition is presented at trial and admitted by the court, it is competent
evidence for the party in whose behalf it was taken, although it may not have been
actually read when introduced in evidence. (Vicente J. Francisco, 2 The Revised Rules of
Court in the Philippines, p. 127, 1966, citing Baron v. David, 51 Phil. 1 [1927].)
61
Section 34, Rule 132 of the Rules of Court reads:

Offer of evidence. The court shall consider no evidence which has not been formally
offered. The purpose for which the evidence is offered must be specified.
62
Leviste v. Court of Appeals, G.R. No. 189122, March 17, 2010, 615 SCRA 619, 633,
citing Dueas, Jr. v. House of Representatives Electoral Tribunal, G.R. No. 185401, July
21, 2009, 593 SCRA 316, 344.
63
Republic of the Philippines v. Sandiganbayan, 453 Phil. 1059 (2003).
64
Section 6, Rule 18 of the Rules of Court requires the parties to state in their respective
Pre-Trial Briefs the following:
 (a) A statement of their willingness to enter into amicable settlement or alternative
modes of dispute resolution, indicating the desired terms thereof;

(b) A summary of admitted facts and proposed stipulation of facts;

(c) The issues to be tried or resolved;

(d) The documents or exhibits to be presented, stating the purpose thereof;

(e) A manifestation of their having availed or their intention to avail themselves

of discovery procedures or referral to commissioners; and

(f) The number and names of the witnesses, and the substance of their
respective testimonies.

Failure to file the pre-trial brief shall have the same effect as failure to appear at
the pre-trial. (emphases added)
65
Section 1, Rule 131 of the Rules of Court reads:

Burden of proof. Burden of proof is the duty of a party to present evidence on

the facts in issue necessary to establish his claim or defense by the amount of
evidence required by law. (emphasis added)
66
See Manuel V. Moran, 2 Comments on the Rules of Court, 1996 ed., p. 140.
67
Section 1, Rule 33 of the Rules of Court reads:

Demurrer to evidence. After the plaintiff has completed the presentation of

his evidence, the defendant may move for dismissal on the ground that upon the
facts and the law the plaintiff has shown no right to relief. If his motion is denied,
he shall have the right to present evidence. If the motion is granted but on appeal
the order of dismissal is reversed he shall be deemed to have waived the right to
present evidence. (emphasis added)
68
Petitioners Urgent Motion and/or Request for Judicial Notice, p. 3; rollo, p. 341.
69
Petitioners Motion to Admit Supplemental Offer of Evidence, p. 6; id. at 365.
70
Section 4, Rule 129 of the Rules of Court reads:

Judicial admissions. An admission, verbal or written, made by the party in the

course of the proceedings in the same case, does not require proof. The admission
may be contradicted only by showing that it was made through palpable mistake
or that no such admission was made.
71
In page 6 of the petitioners Motion to Admit Supplemental Offer of Evidence, the
petitioner admitted the termination of the presentation of its evidence; yet, in page 4 of
the petitioners Reply (to respondent Nietos opposition to petitioners Motion to Admit
Supplemental Offer of Evidence), the petitioner stated that it has not yet rested its case.
72
Dated August 21, 2000 and April 3, 2001.
73
Rollo, pp. 31 and 34.
74
James M. Henderson, 6 Commentaries on the Law of Evidence in Civil Cases Based
Upon the Works of Burr W. Jones, 2502, pp. 4950-4951.
75
Director of Lands v. Roman Archbishop of Manila, 41 Phil. 121 (1920).
76
Ibid.
77
John Henry Wigmore, 6 A Treatise on the Anglo-American System of Evidence in
Trials at Common Law, 1940, p. 519.
78
Director of Lands v. Roman Archbishop of Manila, supra note 75.
79
Seares v. Hernando, etc., et al., 196 Phil. 487 (1981).
80
88 C.J.S. 104, p. 217; 5A C.J.S. 1606, p. 102; and Lopez v. Liboro, 81 Phil. 431
(1948).
81
Land Bank of the Philippines v. Court of Appeals, 456 Phil. 755 (2003).
82
San Fernando Rural Bank, Inc. v. Pampanga Omnibus Development Corporation,
G.R. No. 168088, April 4, 2007, 520 SCRA 564.
83
Leviste v. Court of Appeals, supra note 62.
84
Supra note 80, at 434.
85
Supra note 75, at 124.
86
Manuel V. Moran, supra note 66, at 141, citing 64 C.J. 160-163.
87
In Hampson v. Taylor (8 A. 331, 23 A. 732, 15 R.I. 83, January 11, 1887) the Rhode
Island Supreme Court ruled:

We are of the opinion that it was entirely within the discretion of the court to open
the case for further testimony. The counsel for the plaintiff says, in excuse for the
omission, that it was conceded at the former trial, without contest, that the place
of the accident was a part of the public highway, and he was thus put off his
 guard. It is quite common for the court to allow a party to submit further
testimony, after he has rested, when his opponent attempts to take advantage
of some formal point which has been inadvertently overlooked, since it is or
ought to be the aim of the court, in ordering the course of proof, to further,
not to defeat the ends of justice.
88
Rollo, p. 18.
89
Republic of the Philippines v. Sandiganbayan, 336 Phil. 304 (1997).
90
In W. W. Dearing v. Fred Wilson & Co., Inc., 187 Phil. 488, 493-494 (1980), we held:

Anent grave abuse of discretion, in Icutanim v. Hernandez, x x x it was held that

appeal and not certiorari, is the proper remedy for the correction of any error as
to the competency of a witness committed by an inferior court in the course of
trial, since such a situation involves an error of law constituting a violation of the
rules of evidence, apart from the fact that to allow any special civil action under
the circumstances would lead to multiplicity of suits and lead to protracted if not
endless trials. Similarly and for the same reasons, that rule would apply to the
admission or rejection of a deposition being offered as evidence. Thus, the
jurisprudential rule is that the admission or rejection of certain interrogatories in
the course of discovery procedure could be an error of law but not an abuse of
discretion, much less a grave one. Again, the reason for this rule [is that] the
procedure for the taking of depositions whether oral or thru written interrogatories
is outlined in the rules leaving no discretion to the Court to adopt any other not
substantially equivalent thereto. Should the judge substantially deviate from what
the rule prescribes, he commits a legal error, not an abuse of discretion. (citation
omitted; emphases and underscoring ours)
91
Petitioners Reply to the Opposition (filed by the substituted heirs of respondent Jose
Africa), p. 7; rollo, p. 462.
92
Section 9 of Presidential Decree 1606, in effect at the time of the consolidation,
provides:

Rule-making Power. The Sandiganbayan shall have the power to promulgate its
own rules of procedure and, pending such promulgation, the Rules of Court shall
govern its proceedings.
93
1964 Rules of Court. This provision was copied verbatim under the present rules.
94
This provision, in turn, is an exact reproduction of Rule 42(a) of the 1938 Federal
Rules of Civil Procedure of the United States.
95
Wright and Miller, Federal Practice and Procedure: Civil 2d 2381, p. 427.
96
See People v. Sandiganbayan, 456 Phil. 707 (2003); Cojuangco, Jr. v. Court of
Appeals, G.R. No. 37404, November 18, 1991, 203 SCRA 619; Caos v. Hon. Peralta,
etc., et al., 201 Phil. 422 (1982).
97
Wright and Miller, supra note 95, at 429.
98
1 C.J.S. 107, p. 1341; Wright and Miller, Federal Practice and Procedure: Civil 2d
2382.
99
1 C.J.S. 107, id.; Wright and Miller, id. at 429. See Yu, Sr. v. Basilio G. Magno
Construction and Development Enterprises, Inc., G.R. Nos. 138701-02, October 17,
2006, 504 SCRA 618.
100
1 C.J.S. 107, id.; 1 Am. Jur. 2d 131, p. 804; Wright and Miller, id.
101
The April 15, 1993 Resolution ordering consolidation reads:

Submitted for resolution is the Motion for Consolidation, dated June 22, 1992,
filed by the Republic of the Philippines (represented by the PCGG), counsel.

The record shows that there is no opposition in the above-entitled cases to the said
motion. It also appears that the subject matters of the above entitled cases are
and/or may be treated as mere incidents in Civil Case No. 0009.

WHEREFORE, the above-entitled cases are hereby ordered consolidated with

Civil Case No. 0009, and shall henceforth be consolidated and treated as mere
incidents of said Civil Case No. 0009. (Records, Volume III, pp. 843-844.)
102
See Victor Africas Motion (Records, Volume XVIII, pp. 6717-6722).
103
In its Motion for Consolidation, the petitioner argued:

4. On various dates, several actions were filed which are intimately related with
Civil Case No. 0009, involving as they are the same subject matter and
substantially the same parties x x x.

xxxx

10. Besides, the present Motion for Consolidation is not without a paradigm
which was recently sketched by [the Sandiganbayan]. During the hearing on April
6, 1992 of Africa vs. PCGG, docketed as Civil Case No. 0127, [the
Sandiganbayan] resolved to conduct a joint trial of the said case and of OWNI vs.
Africa, docketed as Civil Case No. 0126, inasmuch as both cases are intimately
related. The consolidation of the above-captioned cases would be merely a step in
the same direction already taken by [the Sandiganbayan] in Africa and OWNI.
(Records, Volume XV, pp. 5617-5622.)
104
In the 1966 edition of Vicente J. Franciscos Revised Rules of Court, Francisco wrote:

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

At the very beginning of the discussion on consolidation of actions in the Corpus

Juris Secundum, the following caveat appears:

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

In defining the term "consolidation of actions," Francisco provided a colatilla that

the term "consolidation" is used in three different senses, citing 1 C.J.S. 1341 and
1 Am. Jur. 477 (Francisco, Revised Rules of Court, p. 348).
105
The respondents vigorously opposed the petitioners motion to adopt the testimony of,
among others, Maurice Bane, and the Sandiganbayan ruled in favor of the respondents,
without the petitioner questioning this development until after two years later. This
circumstance cannot be taken lightly in view of the petitioners gross procedural
deficiency in the handling of this main case.
106
In those cases where the Court ordered or affirmed the order of consolidation, even
without expressly providing for the admissibility of evidence in all of the consolidated
cases, the parties are the same and/or the issues are relatively simple and/or the causes of
action could have actually been stated in one complaint (see Domdom v. Third and Fifth
Divisions of the Sandiganbayan, G.R. Nos. 182382-83, February 24, 2010, 613 SCRA
528; Active Wood Products Co., Inc. v. Court of Appeals, G.R. No. 86603, February 5,
1990, 181 SCRA 774; Delta Motor Sales Corporation v. Mangosing, No. L-41667, April
30, 1976, 70 SCRA 598; Sideco v. Paredes, et al., 74 Phil. 6 (1942).
107
Dated March 17, 1997; rollo, pp. 576-587.
108
Under Section 7, Rule 18 of the Rules of Court, a Pre-Trial Order controls the
subsequent course of the action, unless modified before trial to prevent manifest injustice.
109
Records, Volume XXXVI, p. 11405.
110
1964 Rules of Court, Rule 24, Depositions and Discovery.
111
Petitioners Reply with Manifestation to Respondent Enriles Comment, pp. 12-13;
rollo, pp. 679-680.
112
Records, Volume XLV, pp. 110-112. Petitioners Common Reply reads:

1. While it is true that Section 47, Rule 130 of the Rules of Court provides:

xxxx

[petitioner] wishes to inform this Honorable Court that in order to substantially

comply with the aforementioned requirements, it would be willing to present
subject witnesses, except for Maurice Bane and Rolando Gapud whose
availability are difficult to obtain being foreign residents, only to be cross-
examined by the defendants who had no opportunity to cross-examine them in
said previous proceeding.
113
Dasmarias Garments, Inc. v. Reyes, G.R. No. 108229, August 24, 1993, 225 SCRA
622.
114
Jonathan Landoil International Co., Inc. v. Mangudadatu, G.R. No. 155010, August
16, 2004, 436 SCRA 559, 573, citing Fortune Corporation v. CA, G.R. No. 108119,
January 19, 1994, 229 SCRA 355, 362.
115
Dasmarias Garments, Inc. v. Reyes, supra note 113.
116
Ibid.
117
Ibid.
118
Jovito R. Salonga, Philippine Law of Evidence, p. 540, 2nd ed., 1958. John Henry
Wigmore, supra note 77, at 51-53. But the generally accepted view, followed by our own
rules on evidence, is that prior testimony or deposition is an exception to hearsay
prohibition. (McCormick on Evidence by Edward Cleary, 254, p. 759, 3rd ed.,
Hornbook Series, Lawyers ed., 1984).
119
Section 6, Rule 132 of the Rules of Court reads:
 Cross-examination; its purpose and extent. Upon the termination of the direct
examination, the witness may be cross-examined by the adverse party as to any
matters stated in the direct examination, or connected therewith, with sufficient
fullness and freedom to test his accuracy and truthfulness and freedom from
interest or bias, or the reverse, and to elicit all important facts bearing upon the
issue.
120
John Henry Wigmore, supra note 77, at 83.
121
Oscar M. Herrera, 5 Remedial Law, 1999, pp. 773, 774-775.
122
Id. at 773, citing Gibson v. Gagnon, 82 Colo 108, 257, p. 348; 2 Jones, Sec. 9:25.
123
Manuel V. Moran, 5 Comments on the Rules of Court, 1980 ed., p. 409.
124
Vicente J. Francisco, Evidence, 1955, p. 646.
125
Ricardo J. Francisco, 7 The Revised Rules of Court in the Philippines, Evidence, Part
I, 1997 ed., pp. 628-629.
126
Prior to the revision of the rules on evidence, the phrase "out of the Philippines"
appeared in the context of the witness unavailability (Section 41, Rule 130 of the 1964
Rules of Court). After the revision (the latest amendments to the rules on evidence
became effective on July 1, 1989), this phrase was deleted from the present Section 47,
Rule 130 of the Rules of Court. In contrast, the same phrase, which appeared in Rule 24
of the old Rules (Rule 24, Deposition and Discovery, 1964 Rules of Court), was retained
in the present Rule 23 of the Rules of Court on depositions. The phrase "unable to
testify," however, survived the amendment of the rules and was retained in both Section
47, Rule 130 of the Rules of Court and Section 4(c), Rule 23 of the same Rules.
127
Vicente J. Francisco, Evidence, supra note 124, at 649.
128
John Henry Wigmore, 5 A Treatise on the Anglo-American System of Evidence in
Trials at Common Law, 1404, p. 149.
129
Northwest Airlines, Inc. v. Cruz, 376 Phil. 96 (1999).
130
Ricardo J. Francisco, supra note 125, at 627, cited in the Comment filed by the
substituted heirs of respondent Jose Africa, p. 3.
131
John Henry Wigmore, supra note 128, at 148.
132
To make matters worse, by not questioning the Sandiganbayans denial of its 1st
Motion (to Adopt), the petitioner has impliedly acceded to the Sandiganbayans ruling
that the non-presentation of the deponent in court for cross-examination is unjustified.
Unfortunately, the petitioner "realized" its mistake only two precious years later.
133
Ricardo J. Francisco, supra note 125, at 220.
134
Id. at 219.
135
Edward Cleary, supra note 118, at 48.
136
Manuel V. Moran, supra note 123, at 410.
137
Jovito R. Salonga, supra note 118, at 542.
138
Oscar M. Herrera, supra note 121, at 772. Privies are distributed into several classes,
according to the manner of the relationship. Thus, there are privies in estate, as donor and
donee, lessor and lessee, and joint tenants; privies in blood, as heir and ancestor; privies
in representation as executor and testator, administrator and intestate; privies in law for
the law without privity of blood and estate casts the land upon another as by escheat. (Id.
at 542.)
139
Notably, Africa was not impleaded in Civil Case No. 0009 (Republic v.
Sandiganbayan, G.R. No. 106244, January 22, 1997, 266 SCRA 515).
140
Petitioners Reply to Nietos Comment, p. 4; and petitioners Reply with Manifestation
to Respondent Enriles Comment, pp. 11-12. Rollo, pp. 678-679.
141
Records, Volume XXXVI, p. 11534.
142
Records, Volume XXXVI, pp. 11574-11578; Volume XXXVII, pp. 11649- 11654;
11704-11709.
143
Records, Volume XXXVI, pp. 11610-11612.
144
Records, Volume XXXVII, pp. 11719-11720.
145
While the Sandiganbayan recognized that the petitioner intends to use the Bane
deposition in Civil Case No. 0009 (as stated in the Second Amended Notice of the Taking
of the Bane Deposition), the Sandiganbayan denied Africas Motion as if Africa himself
was impleaded in and is a party who can be bound by the proceedings and the judgment
in Civil Case No. 0009 (except only as a substituted heir of the late respondent Jose
Africa). In denying Victor Africas motion (forgetting about the concern raised by
respondent Enrile which is equally applicable to the other respondents), the
Sandiganbayan seemed oblivious of the fact that the respondents who were non-parties to
Civil Case 0130 (where the deposition was taken) should be heard. Apparently, the
Sandiganbayan relied blindly on the petitioners assertion that the taking of deposition is
a matter of right and failed to address the consequences and/or issues that may arise from
the apparently innocuous statement that the petitioner intends to use the Bane deposition
in Civil Case No. 0009 (where only the respondents, and not Africa, are parties). The
Sandiganbayan ruled:
 "More importantly, under Section 1 of Rule 24 the taking of such deposition, after
the answer has been served, is a matter of right and can be resorted to without
leave of court." (Records, XXXVII, pp. 11719-11720)
146
376 Phil. 111-112 (1999).
147
In its Motion for Summary Judgment, dated January 28, 1997, the petitioner itself
conceded that respondents are not parties to Civil Case No. 0130, where the deposition
was taken:

7. In this connection, we are not unmindful of the observation of [the

Sandiganbayan] that:

The principal issue in the main case, Civil Case No. 0009 x x x which is an action
for reversion, forfeiture, accounting and damages, is whether or not there is
preponderance of evidence that the Class "A" shareholding in ETPI is ill-gotten
wealth x x x. That point should not be pre-empted in the resolution of the subject
incident in G.R. No. 107789 x x x

8. Nor are we unmindful that this Honorable Court made clear that the finding in
its December 13, 1996 resolution "does not render moot and academic the
principal issue in the main case, Civil Case No. 0009, which is: whether or not
there is preponderance of evidence of alleged ill-gotten wealth of the defendants
therein, especially Jose Africa, Roberto S. Benedicto and Manuel H. Nieto, Jr.,
none of whom is a party either in incident Civil Case No. 0130 or in the subject
G.R. No. 107789. (Italics supplied) (Records, XL, pp. 12568-12569.)
148
Mabayo Farms, Inc. v. Court of Appeals, G.R. No. 140058, August 1, 2002, 386
SCRA 110; and Development Bank of the Philippines v. Bautista, et al., 135 Phil. 201
(1968).
149
Section 6, Rule 23 of the Rules of Court reads:

Objections to admissibility. Subject to the provisions of section 29 of this

Rule, objection may be made at the trial or hearing to receiving in evidence any
deposition or part thereof for any reason which would require the exclusion of the
evidence if the witness were then present and testifying.

Section 17, Rule 23 of the Rules of Court reads:

Record of examination; oath; objections. The officer before whom the

deposition is to be taken shall put the witness on oath and shall personally, or by
someone acting under his direction and in his presence, record the testimony of
the witness. The testimony shall be taken stenographically unless the parties agree
otherwise. All objections made at the time of the examination to the qualifications
of the officer taking the deposition, or to the manner of taking it, or to the
 evidence presented, or to the conduct of any party, and any other objection to the
proceedings, shall be noted by the officer upon the deposition. Evidence objected
to shall be taken subject to the objections. In lieu of participating in the oral
examination, parties served with notice of taking a deposition may transmit
written interrogatories to the officers, who shall propound them to the witness and
record the answers verbatim.
150
Records, Volume XXXVII, pp. 11628-11623.
151
See the petitioners Pre-Trial Brief (Records, Volume XXXVI, p. 11405) where the
petitioner made a representation to present Mr. Maurice Bane. See the petitioners
Common Reply (Records, Volume XLV, pp. 110-112) where the petitioner conceded the
applicability of Section 47, Rule 130; see the petitioners Motion for Summary Judgment
(Records, Volume XL, pp. 12568-12569) where the petitioner admitted that the
respondents were not parties to Civil Case No. 0130 (where the deposition was taken)
and Victor Africa was neither a party to Civil Case No. 0009.
152
Ricardo J. Francisco, supra note 125, at 69.
153
Oscar M. Herrera, supra note 121, at 72.
154
Manifest things require no proof; what is known by the magistrate need not be proved;
Jovito R. Salonga, supra note 118, at 45; and Eduardo B. Peralta, Jr., Perspectives of
Evidence, 2005, p. 52, citing 1 Jones on Evidence, p. 209.
155
Section 1, Rule 129 of the Revised Rules on Evidence.
156
Id., Section 2.
157
Id., Section 3.
158
Manuel V. Moran, supra note 123, at 47-48, citing Municipal Council of San Pedro
Laguna v. Colegio de San Jose, 65 Phil. 318 (1938); and Prieto v. Arroyo, 121 Phil. 1335
(1965).
159
In Occidental Land Transportation Co., Inc. v. Court of Appeals, G.R. No. 96721,
March 19, 1993, 220 SCRA 167, 176, citing Tabuena v. Court of Appeals, 196 SCRA
656 (1991), we stated:

And unlike the factual situation in Tabuena v. CA, the decision in Civil Case No.
3156 formed part of the records of the instant case (Civil Case No. 2728) with the
knowledge of the parties and in the absence of their objection. This fact was
pointed out by the lower court, to wit:
 The x x x findings of the Oroquieta Court became as conclusive upon the
company and its driver by their acquiescence and silence x x x. (Decision of
lower court, p. 12; records, p. 239)

xxxx

Returning to Exhibit "O," supra (Decision, Civil Case No. 3156, CFI, Branch III,
Oroquieta City), the Court hastens to add: Said exhibit has not been objected to
nor commented upon by the defendants Company and Enerio, through their
counsel, x x x.

This being the case, petitioners were aware that Exhibit "O" (Decision in Civil
Case No. 3156) had formed part of the records of the case and would thereby be
considered by the trial court in its decision.
160
Section 1, Rule 9 of the Rules of Court reads:

Defenses and objections not pleaded. - Defenses and objections not pleaded either
in a motion to dismiss or in the answer are deemed waived. However, when it
appears from the pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall dismiss the claim.
(underscoring ours)

In Lewin v. Galang, etc., 109 Phil. 1041, 1045 (1960), cited by the petitioner, the
Court held:

In view of this special defense [res judicata], the court below should have taken
judicial notice of the habeas corpus proceedings instituted by petitioner before the
same Court of First Instance of Manila and before the same judge, Case No.
28409, Ted Lewin v. Commissioner of Immigration and Commissioner of
Customs, and we find that practically the same facts relied upon in petitioner's
present petition for declaratory judgment are the very facts upon which petitioner
based his request for the issuance of the writ of habeas corpus in the previous
case.

In Tiburcio, et al. v. Peoples Homesite and Housing Corporation, et al., 106 Phil.
477, 483-484 (1959), likewise cited by the petitioner, we held:

Appellants finally claim that the lower court erred in dismissing the complaint on
the ground of res judicata by taking judicial notice of its own records in Land
Registration Case No. L-3 invoking in support of their contention the principle
that a court cannot take judicial notice of the contents of the records of other cases
even when such cases had been tried by the same court and notwithstanding the
[fact] that both cases may have been tried before the same judge. While the
 principle invoked is considered to be the general rule, the same is not absolute.
There are exceptions to this rule. Thus, as noted by former Chief Justice Moran:

In some instance[s], courts have taken judicial notice of proceedings in other

causes, because of their close connection with the matter in controversy. x x x

Moreover, appellants' objection to the action of the trial court on this matter is
merely technical because they do not dispute the fact that appellant x x x, who
instituted the present case, is the same person who filed the application in Land
Registration Case No. L-3 for the registration of the same parcel of land which
application was denied by the court x x x. It may therefore be said that in the two
cases there is not only identity of subject matter but identity of parties and causes
of action. Indeed, the trial court did not err in dismissing the complaint on the
ground of res judicata.1avvphi1
161
Petitioners Reply with Manifestation (to respondent Enriles Comment) enumerates
the various "family member" cases which arose from the present and main case, Civil
Case No. 0009.
162
De los Angeles v. Hon. Cabahug, et al., 106 Phil. 839 (1959); Lewin v. Galang, etc.,
supra note 160; and Tiburcio, et al. v. Peoples Homesite and Housing Corporation, et
al., supra note 160.

Lewin v. Galang, etc., supra; and Tiburcio, et al. v. Peoples Homesite and Housing
163

Corporation, et al., supra.

164
319 Phil. 387, 389 (1995).
165
Rules of Court, Rule 130, Section 47.
166
Revised Rules on Evidence, Rule 128, Section 3.
167
The dissent then compares the proceedings in the Court when cases are consolidated
to support its position that consolidation results in the merger of the different causes of
action. However, it is not exactly appropriate to compare the consolidation of cases in the
Supreme Court with the consolidation ordered by the Sandiganbayan because the
Supreme Court is NOT a trier of facts. First, the scope of our review is limited generally
to "questions of law." Hence, no issue of prejudice to other parties can arise should
petitions in the Court be consolidated. Second, unlike consolidated cases in the Supreme
Court, the Sandiganbayan itself had, in fact, separately adjudged an incident of Civil Case
No. 0130 and the few other incident cases independent of Civil Case No. 0009.
168
Correctible under Rule 65 of the Rules of Court.
169
When it denied Africas separate opposition.
The Lawphil Project - Arellano Law Foundation

DISSENTING OPINION

CARPIO, J.:

This is a special civil action for certiorari1 filed by the Republic of the Philippines (petitioner),
through the Presidential Commission on Good Government (PCGG), seeking to set aside the
Resolution dated 7 February 2002 of the Sandiganbayan, which denied petitioners Motion to
Admit Supplemental Offer of Evidence (Re: Deposition of Maurice V. Bane).

The case pertains to the complaint filed before the Sandiganbayan by petitioner against private
respondents for reconveyance, reversion, accounting, restitution, and damages. The complaint,
which was filed on 22 July 1987, was docketed as Civil Case No. 0009. Civil Case No. 0009
involves, among others, the shares of private respondents in Eastern Telecommunications
Philippines, Inc. (ETPI), which were allegedly ill-gotten and were eventually sequestered by the
government.2

The issue in this certiorari proceeding concerns the admissibility of the deposition of Maurice V.
Bane, taken primarily for testimony regarding the interlocutory issue in Civil Case No. 0130,
which is one of the incident cases of Civil Case No. 0009.

Civil Case No. 0130 is a petition for certiorari filed with the Sandiganbayan by Victor Africa,
son of Jose L. Africa,3 who is one of the defendants in Civil Case No. 0009, against the PCGG.
Victor Africa filed the petition, seeking to nullify the PCGG orders directing him, among others,
to account for his sequestered shares in ETPI. In a Resolution dated 12 April 1993,4 the
Sandiganbayan ordered the consolidation of the main case, Civil Case No. 0009, with
several incident cases including Civil Case No. 0130.5

On 25 September 1996, in Civil Case No. 0009 in connection with Incident Case No. 0130 and
G.R. No. 107789, petitioner filed with the Sandiganbayan a Second Amended Notice to Take
Deposition of Mr. Maurice V. Bane Upon Oral Examination.6 On 23 and 24 October 1996, the
deposition upon oral examination of Maurice V. Bane, former director and treasurer-in trust of
ETPI, was taken before Consul General Ernesto Castro at the Philippine Embassy in London,
England. Among the defendants in the main Civil Case No. 0009, only Victor Africa appeared
during the taking of the deposition.

On 22 January 1998, petitioner filed a motion7 praying that it be allowed to adopt the testimonies
of several of its witnesses in incidental Civil Case Nos. 0048, 0050, 0130 and 0146, including the
deposition of Maurice V. Bane, as its evidence in the main case, Civil Case No. 0009. On 1 April
1998, the Sandiganbayan issued a Resolution, denying in part the motion as regards the adoption
of the testimony on oral deposition of Maurice V. Bane (and Rolando Gapud) as part of
petitioners evidence in Civil Case No. 0009, "for the reason that said deponents according to the
plaintiff, are not available for cross examination in this Court by the defendants."8

On 14 December 1999, petitioner made its Formal Offer of Evidence consisting of Exhibits "A"
to "XX-27." However, through oversight, petitioner failed to include among its exhibits the
deposition of Maurice V. Bane. Thus, in its Urgent Motion And/Or Request for Judicial Notice
dated 21 February 2000, petitioner prayed that it be allowed to introduce as additional evidence
the deposition of Maurice V. Bane, or in the alternative, for the Sandiganbayan to take judicial
notice of the facts established by the said deposition. On 21 August 2000, the Sandiganbayan
issued a Resolution denying petitioners motion. The Resolution stated:

Allegedly the deposition of Maurice V. Bane was introduced as PCGGs evidence in Civil Case
No. 0130 (in relation to G.R. No. 107789) which is an incident of and consolidated with the
above-entitled case in connection with PCGGs "Very Urgent Petition for Authority to Hold
Special Stockholders Meeting for the Purpose of Increasing ETPIs Authorized Capital Stock"
and the said deposition of Maurice V. Bane is now a part and parcel of the record of this main
case.

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

On the matter of the deposition of Maurice V. Bane, the admission of the same is done through
the ordinary formal offer of exhibits wherein the defendant is given ample opportunity to raise
objection on grounds provided by law. Definitely, it is not under Article 129 on judicial notice.9

Petitioner moved for reconsideration, which the Sandiganbayan denied in a Resolution issued on
3 April 2001. The Resolution stated:

In the subject Resolution [issued on 21 August 2000], this Court ruled that the Urgent Motion
and/or Request for Judicial Notice was something that need not be acted upon as the same was
already considered redundant, the deposition of Bane, having become part and parcel of the
record of this main case since Civil Case No. 0130 is an incident to the same.

This Court further held that the admission of same is done through ordinary formal offer of
exhibits wherein defendant is given ample opportunity to raise objection on grounds provided by
law, and not under Rule 129 on judicial notice.

WHEREFORE, there being no other issue which merit consideration of this Court, the Motion
for Reconsideration is hereby denied.10 (Emphasis supplied)

On 16 November 2001, petitioner filed a Motion to Admit Supplemental Offer of Evidence (Re:
Deposition of Maurice V. Bane), seeking once again the admission of the deposition. On 7
February 2002, the Sandiganbayan promulgated the assailed Resolution, denying petitioners
motion. The Sandiganbayan ruled:

The only issue that the court is actually called upon to address in the pending incident is whether
or not We should allow plaintiff-movants Supplemental Offer of Evidence consisting of the
deposition of Maurice V. Bane.

xxx

Defendants Opposition to the pending incident as well as plaintiffs Reply to the Opposition
gave various reasons why the motion should or should not be granted. But in the courts view, it
is not really a question of whether or not plaintiff has already rested its case as to obviate the
further presentation of evidence. It is not even a question of whether the non-appearing
defendants are deemed to have waived their right to cross-examine Bane as to qualify the
admission of the deposition sans such cross-examination. Indeed, We do not see any need to
dwell on these matters in view of this courts Resolution rendered in April 1, 1998 which already
denied the introduction in evidence of Banes deposition and which has become final in view of
plaintiffs failure to file any motion for reconsideration or appeal within the 15-day reglementary
period. Rightly or wrongly, the resolution stands and for this court to grant plaintiffs motion at
this point in time would in effect sanction plaintiffs disregard for the rules of procedure.
Plaintiff has slept on its rights for almost two years and it was only in February of 2000 that it
sought to rectify its ineptitude by filing a motion to reopen its case as to enable it to introduce
and offer Banes deposition as additional evidence, or in the alternative for the court to take
judicial notice of the allegations of the deposition. But how can such a motion be granted when it
has been resolved as early as 1998 that the deposition is inadmissible. Without plaintiff having
moved for reconsideration within the reglementary period, the resolution has attained finality and
its effect cannot be undone by the simple expedient of filing a motion, which though purporting
to be a novel motion, is in reality a motion for reconsideration of this courts 1998 ruling. Hence,
the subsequent motions, including the present incident are deemed moot and academic.11

Hence, this petition for certiorari.

I vote to grant the petition.

It is important to note that the Second Amended Notice to Take Deposition of Mr. Maurice V.
Bane Upon Oral Examination, filed on 25 September 1996, was after the consolidation of Civil
Case No. 0130 with the main case, Civil Case No. 0009, through the Sandiganbayan Resolution
dated 12 April 1993. This is evident in the caption of the notice, thus:

REPUBLIC OF THE PHILIPPINES

SANDIGANBAYAN
MANILA

Third Division
Republic of the Philippines,
Plaintiff,
CIVIL CASE NO. 0009
-versus- (Incident Case No. 0130
and G.R. No. 107789)
JOSE L. AFRICA, ET AL.,
Defendants.

It should be noted that the late Jose L. Africa, one of the defendants in Civil Case No. 0009, has
been substituted by his heirs, including his son Victor Africa. Thus, Justice Brion's statement that
Victor Africa is "plainly not a party to Civil Case No. 0009"12 is misleading. Although Victor
Africa was not originally impleaded in Civil Case No. 0009, Victor Africa became one of the
substitute defendants in Civil Case No. 0009 upon the demise of Jose L. Africa. In fact, Victor
Africa, as substitute defendant in Civil Case No. 0009, has filed with the Sandiganbayan several
pleadings13 and his Offer of Evidence.14

All the defendants of Civil Case No. 0009 were given notice of the scheduled testimony by oral
deposition of Maurice V. Bane. Furthermore, the notice stated that "[t]he deposition of said
witness shall be used in evidence in Incident Case No. 0130-G.R. No. 107789 as well as in the
main case of Civil Case No. 0009."15 Since notices have been duly served on all the defendants,
those who failed to show up at the deposition-taking are deemed to have waived their right to
appear and cross-examine the deponent. Indeed, under Section 4, Rule 23 of the Rules of Civil
Procedure, the deposition "may be used against any party who was present or represented at
the taking of the deposition or who had due notice thereof." Section 4, Rule 23 reads:

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

(a) Any deposition may be used by any party for the purpose of contradicting or
impeaching the testimony of deponent as witness;

(b) The deposition of a party or of any one who at the time of the taking of the deposition
was an officer, director, or managing agent of a public or private corporation, partnership,
or association which is a party may be used by an adverse party for any purpose;

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

(d) if only part of the deposition is offered in evidence by a party, the adverse party may
require him to introduce all of it which is relevant to the part introduced, and any party
may introduce any other parts. (Emphasis supplied)

Granting that among the defendants in the main Civil Case No. 0009, only Victor Africa is a
party to the incident Civil Case No. 0130, still all the other defendants in Civil Case No. 0009
were given notice of the scheduled deposition-taking. The reason why all the defendants were
given notice of the said deposition-taking was because at that time, Civil Case No. 0130 was
already consolidated with Civil Case No. 0009 and as emphasized in the second amended notice,
"[t]he deposition of said witness shall be used in evidence in Incident Case No. 0130-G.R.
No. 107789 as well as in the main case of Civil Case No. 0009."16

The Sandiganbayan Resolution dated 12 April 1993 which consolidated the main case, Civil
Case No. 0009, with several incident cases including Civil Case No. 0130, reads:

Republic of the Philippines

SANDIGANBAYAN
Manila

----

THIRD DIVISION

REPUBLIC OF THE PHILIPPINES,

Plaintiff,

-versus- CIVIL CASE NO. 0009

JOSE L. AFRICA, ET AL.,

Defendants.
X---------------------------x
VICTOR AFRICA, ET AL.,
Intervenors,
X---------------------------x
POLYGON INVESTORS AND MANAGERS,
INC.,
Plaintiff, CIVIL CASE NO. 0043

-versus-
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
AEROCOM INVESTORS AND MANAGERS,
INC.,
Plaintiff,

-versus- CIVIL CASE NO. 0044

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
JOSE L. AFRICA, ET AL.,
Plaintiffs,

-versus-
CIVIL CASE NO. 0045
EDUARDO M. VILLANUEVA and
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT,
Defendants.
X---------------------------x
JOSE L. AFRICA, ET AL.,
Plaintiffs,

-versus- CIVIL CASE NO. 0047

MELQUIADES GUTIERREZ, ET AL.,

Defendants.
X---------------------------x
VICTOR AFRICA, ET AL.,
Plaintiffs,

-versus- CIVIL CASE NO. 0130

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
TRADERS ROYAL BANK,
Plaintiff, CIVIL CASE NO. 0131
-versus-

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
FAR EAST BANK & TRUST CO.,
Plaintiff,

-versus- CIVIL CASE NO. 0139

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
STANDARD CHARTERED BANK,
Plaintiff,

-versus- CIVIL CASE NO. 0143

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
TRADERS ROYAL BANK,
Plaintiff,

-versus- CIVIL CASE NO. 0128

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, ET AL.,
Defendants.
X---------------------------x
DOMESTIC SATELLITE PHILIPPINES, INC.,
Petitioner,

-versus-
CIVIL CASE NO. 0106
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT AND THE ASSET
PRIVATIZATION TRUST,
Respondents.
X---------------------------x
PHILIPPINE COMMUNICATIONS SATELLITE
CORPORATION AND PHILIPPINE OVERSEAS
TELE-COMMUNICATIONS CORPORATION,
Plaintiffs,
CIVIL CASE NO. 0114
-versus-

PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, HERMOSISIMA,
Defendant.

J., Chairman,
DEL ROSARIO & DE LEON, JJ.

Promulgated: April 15, 1993

X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

DE LEON, J.

Submitted for resolution is the Motion for Consolidation, dated June 22, 1992, filed by the
Republic of the Philippines (represented by the PCGG), through counsel.

The record shows that there is no opposition in the above-entitled cases to the said motion.
It also appears that the subject matters of the above-entitled cases are and/or may be
treated as mere incidents in Civil Case No. 0009.

WHEREFORE, the above-entitled cases are hereby ordered consolidated with Civil Case
No. 0009, and shall henceforth be considered and treated as mere incidents of said Civil
Case No. 0009.

SO ORDERED.

Manila, Philippines, April 12, 1993.17

Section 1, Rule 31 of the Rules of Court provides:

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

The 12 April 1993 Resolution of the Sandiganbayan ordered a consolidation of all the cases,
not merely a joint hearing or trial.
Justice Brion maintains that to resolve the issue of the admissibility of the Bane deposition, the
effect of the consolidation of Civil Case No. 0130 with Civil Case No. 0009 should first be
determined. Justice Brion emphasizes that despite the consolidation, the two cases remain
distinct and separate from each other, such that a mere notice of deposition taking, even if under
the expressed intent of using the testimony in evidence in the main case, cannot automatically
bind the private respondents who were not previously heard thereon.

In his modified draft Decision, Justice Brion posits that the consolidation of Civil Case No. 0009
with several incident cases including Civil Case No. 0130 is merely a "consolidation for trial."
On page 31 of the modified Draft Decision, a "consolidation for trial," as defined in American
jurisprudence is:

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

In this kind of consolidation, the cases are merely tried together but a decision is rendered
separately in each case.

In Philippine jurisprudence, the consolidation of cases merges the different actions into one
and the rights of the parties are adjudicated in a single judgment, thus:

The effect of consolidation of actions is to unite and merge all of the different actions
consolidated into a single action, in the same manner as if the different causes of action
involved had originally been joined in a single action, and the order of consolidation, if made
by a court of competent jurisdiction, is binding upon all the parties to the different actions until it
is vacated or set aside. After the consolidation there can be no further proceedings in the
separate actions, which are by virtue of the consolidation discontinued and superseded by a
single action, which should be entitled in such manner as the court may direct, and all
subsequent proceedings therein be conducted and the rights of the parties adjudicated in a
single action.18 (Emphasis supplied)

Indeed, when consolidated cases are appealed to the Supreme Court or when the Court orders
consolidation of cases, the Justice to whom the consolidated cases are assigned renders a single
decision, adjudicating all the rights of the parties in the consolidated cases.19 The Chief Justice
assigns the consolidated cases to the Member-in-Charge to whom the case having the lower or
lowest docket number has been raffled.20

The 12 April 1993 Resolution of the Sandiganbayan ordered the consolidation of the incidental
cases, including Civil Case No. 0130, with the main case, Civil Case No. 0009. Unlike a mere
order of a joint hearing or trial of any or all the matters in issue in the actions, the
consolidation of actions merges the different actions into one single action. This means that
evidence, such as depositions, taken after the consolidation is admissible in all the actions
consolidated whenever relevant or material. In this case, since the notice and the deposition-
taking was after the consolidation of Civil Case No. 0130 with the main case, Civil Case No.
0009, the deposition could be admitted as evidence in the consolidated cases.21
The purpose of consolidation is to avoid multiplicity of suits, prevent delay, clear congested
dockets, simplify the work of the trial court, and save unnecessary costs and expenses.22 The
consolidation of actions involving a common question of law or fact seeks to prevent a repetition
of evidence, such that the testimony of witnesses may be used in all the consolidated cases
whenever it is relevant or material.

In Bank of Commerce v. Perlas-Bernabe,23 the Court ordered the consolidation of two cases
which involve the same focal issue and require substantially the same evidence on the matter.
Similarly, in Domdom v. Third and Fifth Division of the Sandiganbayan,24 the Court ordered the
consolidation of cases in the Sandiganbayan, where the core element of the cases is substantially
the same and the main witness is also the same. The Court held:

In Teston v. Development Bank of the Philippines, the Court laid down the requisites for the
consolidation of cases, viz:

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

The rule allowing consolidation is designed to avoid multiplicity of suits, to guard against
oppression or abuse, to prevent delays, to clear congested dockets, and to simplify the work of
the trial court in short, the attainment of justice with the least expense and vexation to the
parties-litigants.

xxx

In the present case, it would be more in keeping with law and equity if all the cases filed against
petitioner were consolidated with that having the lowest docket number pending with the Third
Division of the Sandiganbayan. The only notable differences in these cases lie in the date of the
transaction, the entity transacted with and the amount involved. The charge and core element are
the same estafa through falsification of documents based on alleged overstatements of claims
for miscellaneous and extraordinary expenses. Notably, the main witness is also the same
Hilconeda P. Abril.

It need not be underscored that consolidation of cases, when proper, results in the simplification
of proceedings which saves time, the resources of the parties and the courts and the abbreviation
of trial. It contributes to the swift dispensation of justice, and is in accord with the aim of
affording the parties a just, speedy and inexpensive determination of their cases before the
courts. Above all, consolidation avoids the possibility of rendering conflicting decisions in two
or more cases which would otherwise require a single judgment.25 (Emphasis and underscoring
in the original)

In this case, Maurice V. Bane is a vital witness in the main Civil Case No. 0009 and the
incidental Civil Case No. 0130. In fact, as pointed out by Justice Brion, in petitioner's Pre-Trial
Brief dated 30 August 1996, petitioner offered to present Maurice V. Bane as one of the
witnesses in the main Civil Case No. 0009. Thus, when petitioner filed on 25 September 1996 its
Second Amended Notice to Take Deposition of Mr. Maurice V. Bane Upon Oral Examination, in
Civil Case No. 0009 in connection with Incident Case No. 0130 and G.R. No. 107789, petitioner
emphasized that "[t]he deposition of said witness shall be used in evidence in Incident Case
No. 0130-G.R. No. 10779 as well as in the main case of Civil Case No. 0009." In fact, all the
respondents were given the chance to be heard considering that all the defendants of Civil Case
No. 0009 were given notice of the scheduled testimony by oral deposition of Maurice V. Bane,
which was taken on 23 and 24 October 1996. This is very clear from petitioners Second
Amended Notice to Take Deposition of Mr. Maurice V. Bane Upon Oral Examination, filed on
25 September 1996, in Civil Case No. 0009 in connection with Incident Case No. 0130 and G.R.
No. 107789, thus:

REPUBLIC OF THE PHILIPPINES

SANDIGANBAYAN
MANILA

Third Division

Republic of the Philippines,

Plaintiff,
CIVIL CASE NO. 0009
-versus- (Incident Case No. 0130
and G.R. No. 107789)
JOSE L. AFRICA, ET AL.,
Defendants.

x---------------------------------- x

SECOND AMENDED NOTICE TO TAKE DEPOSITION OF MR. MAURICE V. BANE

UPON ORAL EXAMINATION

---------------------------------------------------------------------------------------

Pursuant to Rule 2426 of the Revised Rules of Court, notice is hereby given to defendants Jose
L. Africa (deceased) thru his Estate represented by Victor Africa and Atty. Juan de
Ocampo and Atty. Yolanda Javellana, Manuel H. Nieto, Jr., Ferdinand E. Marcos
(deceased) thru his Estate represented by Special Administratrix BIR Commissioner
Liwayway Vinzons-Chato, Imelda R. Marcos, Ferdinand R. Marcos, Jr., Juan Ponce
Enrile, and Potenciano Ilusorio thru their counsels on records that Plaintiff thru the
undersigned counsel will take the testimony by oral deposition of Mr. Maurice V. Bane c/o
Cable & Wireless Plc., 124 Theobalds Road, London WC1X 8RX, England on October 23, 24
and 25, 1996 at 9:00 a.m. and 2:00 p.m., until finished before the Philippine Consul General in
London, England, in his office or in a suitable place in London or in Wales, England, as may be
advised to the parties.
The purpose of the deposition is for Mr. Maurice Bane to identify and testify on the facts
set forth in his Affidavit hereto attached as Annex "A" so as to prove the ownership issue
in favor of plaintiff and/or establish prima facie factual foundation for sequestration of
Easterns Class A stock in support of the "Very Urgent Petition For Authority To Hold
Special Stockholders Meeting For the Sole Purpose of Increasing Easterns Authorized
Capital Stock" (Incident Case No. 0130 G.R. No. 107789). The deposition of said witness
shall be used in evidence in Incident Case No. 0130-G.R. No. 107789 as well as in the main
case of Civil Case No. 0009. (Underscoring in the original; boldfacing supplied)

In his modified draft Decision, Justice Brion maintains that respondents' notice of the taking of
the Bane deposition is insufficient waiver of their right to appear and cross-examine the deponent
when they failed to show up at the deposition-taking. Justice Brion insists that respondents
"cannot be bound by the taking of the Bane deposition without the consequent impairment of
their right to cross-examine."27

I disagree. The 12 April 1993 Resolution of the Sandiganbayan, ordering the consolidation of the
incidental cases, including Civil Case No. 0130, with the main case, Civil Case No. 0009,
effectively merged the different actions into one single action. The consolidation of the cases
was meant to expeditiously settle the interwoven issues involved in the consolidated cases. The
simplification of the proceedings with the aim of affording the parties a just, speedy and
inexpensive determination of their cases before the courts can be achieved when repetition of the
same evidence or presentation of identical witnesses is dispensed with. This means that evidence,
such as depositions, taken after the consolidation is admissible in all the actions consolidated
whenever relevant or material. In this case, since the notice and the deposition-taking was after
the consolidation of Civil Case No. 0130 with the main case, Civil Case No. 0009, the deposition
could be admitted as evidence in the consolidated cases. This Court has even held in Yu, Sr. v.
Basilio G. Magno Construction and Development Enterprises, Inc.28 that in consolidated cases,
"[t]he evidence in each case effectively became the evidence of both, and there ceased to exist
any need for the deciding judge to take judicial notice of the evidence presented in each case."
Besides, even assuming that the 12 April 1993 Resolution of the Sandiganbayan merely ordered
a joint hearing or a "consolidation for trial," private respondents are still bound by the Bane
deposition considering that they were given notice of the deposition-taking. The evidence
adduced in a joint trial binds all the parties. Otherwise, what would be the point of holding a joint
trial if common witnesses have to be presented again in each of the cases and the same evidence
offered again and again? Precisely, a joint trial aims to prevent repetition of the same or common
evidence and to spare the common witnesses from the unnecessary inconvenience of testifying
on the same issues in separate proceedings if the cases were not jointly tried. To rule otherwise is
to frustrate the purpose of a joint trial which is to prevent delay and save unnecessary costs and
expense.29

In Tan v. Lim,30 the Court even allowed evidence that has not been formally offered in a case
which was jointly heard with another case because evidence offered during the joint hearing was
deemed evidence for both cases which were jointly heard. The Court ruled:

It may be true that Section 34, Rule 132 of the Rules directs the court to consider no evidence
which has not been formally offered and that under Section 35, documentary evidence is offered
after presentation of testimonial evidence. However, a liberal interpretation of these Rules would
have convinced the trial court that a separate formal offer of evidence in Civil Case No. 6518
was superfluous because not only was an offer of evidence made in Civil Case No. 6521 that was
being jointly heard by the trial court, counsel for Jose Renato Lim had already declared he was
adopting these evidences for Civil Case No. 6518. The trial court itself stated that it would freely
utilize in one case evidence adduced in the other only to later abandon this posture. Jose Renato
Lim testified in Civil Case No. 6518. The trial court should have at least considered his
testimony since at the time it was made, the Rules provided that testimonial evidence is deemed
offered at the time the witness is called to testify. Rules of procedure should not be applied in a
very rigid, technical case as they are devised chiefly to secure and not defeat substantial justice.31

Furthermore, Justice Brion posits that in determining the admissibility of the Bane deposition,
not only Section 4, Rule 23 must be considered but also Section 47, Rule 130. The said
provisions read:

Sec. 4. [Rule 23] Use of depositions. At the trial or upon the hearing of a motion or an
interlocutory proceeding, any part or all of a deposition, so far as admissible under the rules
of evidence, may be used against any party who was present or represented at the taking of
the deposition or who had due notice thereof, in accordance with any one of the following
provisions:

(a) Any deposition may be used by any party for the purpose of contradicting or
impeaching the testimony of deponent as witness;

(b) The deposition of a party or of any one who at the time of the taking of the deposition
was an officer, director, or managing agent of a public or private corporation, partnership,
or association which is a party may be used by an adverse party for any purpose;

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

(d) if only part of the deposition is offered in evidence by a party, the adverse party may
require him to introduce all of it which is relevant to the part introduced, and any party
may introduce any other parts.

Sec. 47. [Rule 130] Testimony or deposition at a former proceeding. The testimony or
deposition of a witness deceased or unable to testify, given in a former case or proceeding,
judicial or administrative, involving the same parties and subject matter, may be given in
evidence against the adverse party who had the opportunity to cross-examine him. (Emphasis
supplied)

In my opinion, Section 47, Rule 130 does not apply in this case since the Bane deposition was
not taken in a former case or proceeding. The records show that the Bane deposition was taken
when the cases were already consolidated. Clearly, there is no "former proceeding" to speak of
which would require the application of Section 47, Rule 130. The Bane deposition was taken in
CIVIL CASE NO. 0009 (Incident Case No. 0130 and G.R. No. 107789). In fact, in the Second
Amended Notice to Take Deposition of Mr. Maurice V. Bane Upon Oral Examination, filed on
25 September 1996, the title of the case was "REPUBLIC OF THE PHILIPPINES, Plaintiff,
versus JOSE L. AFRICA, ET AL., Defendants" with case number "CIVIL CASE NO. 0009
(Incident Case No. 0130 and G.R. No. 107789)." Thus, Justice Brions reliance on Section 47,
Rule 130 is misplaced. Besides, even if Section 47 is applicable, the Bane deposition may still be
given in evidence against the respondents since all of them were given notice of the deposition,
and thus had the opportunity to cross-examine the deponent had they participated in the
deposition-taking. Since notices have been duly served on all the respondents, those who failed
to show up at the deposition-taking are deemed to have waived their right to appear and cross-
examine the deponent.

In this case, the Sandiganbayan granted the request for the taking of the deposition of Maurice V.
Bane, who was Executive Vice-President and Treasurer of ETPI from 1974 until his retirement
in 1987.32 In October 1996, during the deposition-taking, Maurice V. Bane was already 72 years
old and residing at 1 Ecton Hall, Church Way, Ecton, Northants (England).33 Clearly, under
Section 4(c)(2) of Rule 23,34 the deposition of Maurice V. Bane can be used as direct evidence.
In fact, in its Resolutions issued on 21 August 2000 and 3 April 2001, the Sandiganbayan stated
that the deposition of Maurice V. Bane has "become part and parcel of the record of this main
case (Civil Case No. 0009) since Civil Case No. 0130 is an incident to the same."

A cursory reading of the Bane deposition, which took two days to complete and covers 211
pages of the transcript of record of the proceedings and the testimony, reveals that it is a critical
and vital evidence in the case of petitioner against private respondents with regard to its
allegation in Civil Case No. 0009 that private respondents shareholdings in ETPI were illegally
purchased and rightly belongs to the Government.

The testimony of the witness, Maurice V. Bane, was offered for the following purposes:

[I]n general the testimony is offered to prove that the Class A stockholdings in Eastern
Telecommunications Philippines Inc, or "Eastern" for short, otherwise referred to as the Filipino
60% equity, is ill gotten in nature; that the actual and/or beneficial owner of said shares was the
late President Ferdinand Marcos; and that accordingly, said shares are subject to reversion and/or
forfeiture in favor of the Plaintiff Republic of the Philippines in this case. Specifically, the
testimony is offered to establish the environmental facts and attendant circumstances
surrounding the formation and organization of Eastern in 1974; that there was duress and/or
compulsion exerted upon Cable & Wireless and its wholly owned subsidiary, the Eastern
Extension Australasia Telegraph Company, of which the witness was the then General Manager
in the Philippines, such that Cable & Wireless and Eastern Extension Australasia were forced or
compelled to give up their legitimate business activities in the Philippines which was 100%
British owned in favor of Eastern, which was to be newly organized as a 60/40 Filipino
company, with 40% being for the account of the company of the witness, Mr. Bane.

In short, the witness will establish in these proceedings that President Marcos and/or his
emissaries or parties acting on his behalf gave the witness only two possible options which was:
(1) a 40% equity in the company to be newly organized, which is Eastern in exchange for
surrendering all of the assets and franchise of Eastern Extension Australasia; or 100% of nothing,
meaning that if the witness and his company refused to give up their legitimate business in the
Philippines then Marcos made it clear that there will be no more Eastern Extension Australasia
that would be operating in the Philippines.

Lastly, the testimony is offered to prove the ownership issue that is involved in this case in favor
of the Plaintiff, and also support the pending petition of Eastern Telecoms to increase its
authorized capital stock from the present 250 million pesos to 4 billion pesos by allowing the
PCGG to vote the sequestered Class A stock in the company. Hence, the testimony will establish
the prima facie factual foundation for maintaining the sequestration of the Class A stock.35

In the deposition of Maurice V. Bane, he identified and affirmed his Affidavit36 dated 9 January
1999. Excerpts from Bane's testimony during the deposition-taking are as follow:

MR. LIM: Mr. Bane, paragraph 2 of your affidavit refers to a company ETPI, the acronym in
letter "ETPI." May I ask you, sir, what is ETPI?

A That's Eastern Telecommunications Philippines, Incorporated.

Q ETPI and Eastern refer to the same company, which is Eastern Telecoms or the full name
thereof, Eastern Telecommunications Philippines, Inc?

A That's correct, yes.

Q Again, your Honor, for consistency in the proceedings, instead of ETPI, the questions and the
answers will refer to "Eastern Telecommunications Philippines, Inc" as simply "Eastern."
Paragraph 2 also of your affidavit refers to "EEATC." Please, sir, tell us, Mr. Bane, what
position, what particular position you held in EEATC when it was operating in the Philippines?

A I was the general manager.

Q Was that the highest position in the Philippines? Was that the highest office in EEATC in the
Philippine operation?

A Yes, it was, yes, the British terminology for these things quite often is that we always used to
refer to "managers" but the American terminology, of course, is usually "president" it was the
equivalent of.
Q Thank you, sir. Now, just for clarity can you elaborate on what was EEATC in relation to
Cable and Wireless or C&W?

MR. AFRICA: He has already answered, your Honor.

A Yes, it was a wholly, 100% owned subsidiary of Cable and Wireless.37

xxx

Q x x x Mr. Bane, I would refer you back to paragraph 3 of your affidavit, sir. I noted from your
narration in paragraph 3 that the earth satellite stations contract which you had just explained
was awarded after bidding by President Marcos to a company you mentioned here which is
Philippines Overseas Telecommunications Corporation, or POTC. My question is: do you know
this POTC, what was it?

A Yes, it was the - - I think I'm correct in saying - - it was the management arm of Philcomsat.
Philcomsat, Philippines Telecommunications Satellite Corporation. POTC, well the managers of
Philcomsat, and I understand that the shareholders were the same in each case.

Q In this paragraph, sir, you stated in reference to Philippine Overseas Telecommunications

Corporation or POTC that it was "relatively unknown in the international telecommunications
industry." Could you explain that?38

xxx

A Well, there were some, I should imagine, some ten or twelve companies were bidding or
hoping to be awarded the earth station contract. Among those was my own company, Eastern - -
EEATC. We had not heard of, any of us: RCA, ITT, the large number of other domestic
companies such as Clavicili and others, were all bidding for this earth station and none of us had
heard of POTC until it suddenly emerged that it was a company that had been formed and that
very shortly after our bids all went in, we heard that it had been, that the contract had been
awarded to Philippines Overseas Telecommunications Corporation.

Q Thank you, sir. (Off the record) May I proceed, your Honor? Did you find out who were the
people behind POTC?

A Yes.

Q And who were they?

A To the best of my recollection the incorporators were Potenciano Ilusorio, Honorio Poblador,
Ambassador Nieto, Ambassador Benedicto, and I think there were two other gentlemen, one of
them I think was the brother in law of Mr. Nieto and the other one I cannot recall - - no, I can't
recall his name. He died fairly soon after, I think, that was formed.39

xxx
MR. LIM: Mr. Bane, you mentioned personalities like Potenciano Ilusorio, Honorio Poblador,
Manuel Nieto Jr., Roberto Benedicto. My question to you, sir, is: what was your personal
impression of these gentlemen vis-a-vis, for instance, the Marcos administration?

A Well, it was common knowledge among the expatriate, senior expatriate community that these
gentlemen were close associates of President Marcos.

MR. AFRICA: May I also object again, your Honor please, to the statement of the witness.
Again, it's not a statement of fact but only a matter of discussion among his co-workers, but facts
again are different from what his perception was.

MR. LIM: That is noted, your Honor.

CONSUL GENERAL: That is noted, Mr. Africa.

MR. LIM: Mr. Witness, was this group of people, these gentlemen or personalities that you have
mentioned, do you know if they were later on identified with any particular business or industry
sector in the Philippines?

A Yes, they were identified with telecommunication interests.

Q Was there an occasion when your own company, EEATC, forged a partnership or business
with POTC?

A Yes, there was.

Q What was the business that the two companies forged or engaged in?

A That business was to establish a tropospheric scatter system between the Philippines and
Taiwan. In actual fact, it was three companies involved: it was POTC and also Western Union
International in the United States, and Eastern Extension or EEATC.

xxx

Q So that tropospheric scatter system became operational?

A Oh yes, yes.

Q Do you know if the system was inaugurated?

A It was, yes.

Q Who were the principal guests during the inauguration?

A President and Mrs. Marcos.

Q Now what technical qualification did your company, EEATC, have to operate that
tropospheric scatter system?

A In addition to being a 20% stockholder, my company was appointed as managers. Eastern,

with the backing of Cable & Wireless, was able to provide all the necessary technical expertise
for the implementation and operation of the system. Cable & Wireless as such has done these
systems, a large number of these systems worldwide, so we had all the experience necessary.

Q At that time, meaning at the time this tropospheric scatter system was established, what was
your company then, what was your company at that time?

A Eastern Extension Australasia and China Telegraph.

Q EEATC?

A EEATC.

Q If you don't mind, sir, kindly refer to that as EEATC instead of Eastern. What technical
qualification did POTC have to be able to be EEATC's partner in this tropospheric system
business?

A To the best of my knowledge little or no technical qualification.40

xxx

Q Now Mr. Bane, let me now take you to paragraph 5 of your affidavit and if I may read to you,
sir. Paragraph 5: When President Marcos declared Martial Law in September 1972, it was clear
that his grip on the country was virtually complete. C&W was fully aware of its uneasy tenure in
the Philippines. In March 1973, then Secretary of National Defense Juan Ponce Enrile called us
to a conference at Camp Crame. I attended said meeting together with the representatives of
RCA and Globe Mackay. Secretary Enrile firmly told us that we had until July 1974 to organize
ourselves into 60/40 corporations with Filipino majority ownership and, if we did not comply,
the Government would take the necessary action. First of all, please explain and elucidate on
your statement "C&W was aware of its uneasy tenure in the Philippines."

A Well, prior to Martial Law we were operating quite comfortably as a company, but with the
implementation of Martial Law there was great deal of uncertainty as to what might happen in
the country under Martial Law. In other countries it had been known that things were, shall we
say, nationalized or taken over and, of course, there was a certain degree of unease among us
when we discussed in the Cable & Wireless that something similar might happen in the
Philippines.

Q Now you made mention in this paragraph that I read of other companies, namely RCA and
Globe Mackay. What were these companies?
A They were similar to EEATC, operating in exactly the same fashion, doing the same type of
business, all three of us were competing against each other for international business.

Q Do you know the nationality of RCA and Globe Mackay?

A They were both 100% American corporations.

Q Whereas EEATC was, according to you, 100% British?

A That is correct, yes.

Q Except for that difference in the nationality the three of you, meaning EEATC, RCA and
Globe Mackay, were engaged in the same kind of business which was telecommunications in the
Philippines?

A Correct.

xxx

Q Now, can you remember where in Camp Crame this meeting took place?

A Yes, it was in a fairly large boardroom. I would imagine the table was large enough to
accommodate about 16 people. I had the impression that it was the board room perhaps attached
to the Secretary of Defense's office in Camp Crame.

Q Now, was it actually Secretary of National Defense Juan Ponce Enrile who met with you?

A Yes, it was.

Q In person?

A In person.

Q Now, in paragraph 6 of your affidavit which is a reference to what transpired in that meeting,
you stated, and I would like to quote the short sentence in paragraph 6: "I pointed out that - - " I
withdraw the question. Mr. Witness, what transpired in this meeting with Secretary Enrile? In
other words, why did he call you together with RCA and Globe Mackay people to a meeting?

A Well, he said, as far as I can recall and after all it's a long time ago, he recalled that the
meeting was to in effect spell out the rules in terms of telecommunications. He pointed out to
RCA and ITT that under the Laurel-Langley Act, which was due I think in July 1974 to expire,
that they would have to go 60% Philippine ownership. I think that I'm pretty sure that Mr. Voss
or his lawyer did say that their franchise in actual fact was established in 1924 and therefore it
fell without, beyond the Laurel-Langley Act, but I seem to recall that Attorney Enrile said that
that's not germane, you will go 60/40. He also said to us, EEATC, that you will go 60/40.
xxx

MR. LIM: x x x My question, sir, is: what exactly did Secretary Enrile tell you, and I refer to
your person, and your lawyer who was with you, Attorney Luciano Salazar?

A After he dealt with RCA and Globe Mackay, I said to him: well, the Laurel-Langley Act does
not apply to EEATC; we are 100% British corporation, our franchise goes back to 1880 and we
were the first company, actually, to connect the Philippines to the outside world in
communications, granted by Queen Isabella of Spain, I think, and after the War, the Second
World War, the franchise was renewed by President Quirino in 1952, I think it was.

xxx

Q You mean to tell the court that Secretary Enrile also included your company EEATC to be
made 60/40?

A Oh yes.

Q Now, your companion, Attorney Luciano Salazar, did he say anything to Mr. Enrile?

A Yes, he did.

Q What was his remark or explanation if any?

A He said that the franchise was perfectly constitutional and that Mr. Bane was quite correct and
that legally there was no reason for Eastern to go 60/40.

Q When you say now, just now Eastern you are referring to EEATC?

A EEATC, yes.

xxx

MR. LIM: Did Secretary Enrile respond favorably to the explanations of Attorney Salazar?

A No, he did not. He said that if EEATC did not move to a 60/40 position then there would be no
EEATC.

xxx

Q What options did Secretary Enrile give you during this meeting?

MR. AFRICA: Same objection, your Honor please, which is that Secretary Enrile is the best
witness for this particular aspect.

MR. LIM: Same request for - - subject to a court ruling later.

A Two options really: to become 60/40 Filipino corporation or to, in effect, have 100% of
nothing, because there would not be any EEATC.41

xxx

MR. LIM: Thank you, your Honor. Mr. Bane, we ended your testimony with your confirmation
that the events narrated in paragraph 7 up to paragraph 14 of your affidavit all transpired after
that meeting in March 1973 with Secretary Enrile, so my question now is: in particular what
followed after that meeting with Secretary Enrile, was the formation and organization of Eastern
in 1974?

A Mmm.

Q Is that correct?

A Well, yes, the events really were I had to advise Cable & Wireless Hong Kong, who were very
closely connected with the Philippines, of the situation and I said we had no alternative but to go
to a 60/40 corporation. It was decided that I should come back to London and discuss it with the
directors of Cable & Wireless in London. Also, we were asked at the meeting, which perhaps I
forgot earlier on, by Secretary Enrile for progress reports of moving to 60/40 corporation. So I
wrote a letter to Secretary Enrile and said that we were now actively planning and that I had
already spoken to one or two other telecommunication corporations but that I had to return to
London to discuss it with my senior directors. It was difficult at that time because it was Martial
Law. No people were allowed to leave the Philippines so, through that letter, I made an
application to leave and I was granted leave to come back to the UK to discuss with Cable &
Wireless the formation of a 60/40 corporation.

Q Eventually, after clearing all those hurdles, after doing all the groundwork, I mean after
passing through all the groundwork and the details, eventually what transpired was the
organization of Eastern in 1974 as a 60/40 Filipino corporation?

A That is correct, yes.

Q And the 40% or minority equity was taken by your company, Cable & Wireless?

A Correct, yes.

Q Mr. Bane, would you, and I refer to your person, have agreed to divest of 100% British owned
EEATC if pressure was not exerted on you by Secretary Enrile?

MR. AFRICA: Objected to, your Honor please, no relevance.

MR. LIM: I am asking the witness for his answer to the basic facts that now present themselves
as a result of the previous testimony.

MR. AFRICA: The same objection, your Honor. It calls for a personal opinion.
MR. LIM: Subject to the court's ruling may I ask the witness to answer? May I repeat the
question, sir? Would you, and I refer to you person, have acceded or agreed to divesting yourself
of 100% British owned EEATC in favor of only 40% equity in a new corporation, if pressure
was not exerted on you by Secretary Enrile?

A No, I would not; I would have continued with EEATC as 100% British Corporation. You see,
you have to appreciate that I had all the resources and all the backing and all the financial
support of Cable & Wireless who were the largest telecommunications operator in the world. We
could have quite easily and I know that finance would have been available from them we
could have quite easily continued as 100% British corporation.

Q Would Cable & Wireless, your own company, have agreed to the divestment of 100% British
owned EEATC if pressure was not exerted by Secretary Enrile?

A No, I don't think they would.

xxx

MR. LIM: In other words, you are saying that had it not been for that fateful meeting with
Secretary Enrile and the pressure was brought to bear on your person and your company you
would not have agreed to organizing Eastern in 1974?

MR. AFRICA: Same objection, your Honor, please, calling for an opinion and a conclusion.

A No, I would not.

MR. LIM: And the same thing is true with your company, C&W, there would have been no
permission or approval from C&W?

MR. AFRICA: Same objection, your Honor, please.

A No, they would not.

MR. LIM: And when you say no, you would not, you are saying that your person and C&W
would not have agreed to divesting EEATC of 100% British control?

MR. AFRICA: Same objection, your Honor, please.

A Correct.

MR. LIM: He said "That's correct." Did you, and I refer to your person, or Attorney Salazar
check or try to find out if Secretary Enrile was acting for President Marcos in reference to this
March 1973 meeting?

A No, no we didn't. It was under Martial Law and I mean when you spoke of President Marcos
you spoke of Secretary Enrile, they were the two very close people. Martial Law, after all, was
declared as a result of an apparent attempted assassination on Secretary Enrile. There was no
point in us trying to appeal to President Marcos. We had to accept that what Secretary Enrile said
was in effect President Marcos.42

xxx

MR LIM.: Now, subject to the same request for a later ruling from the court, do I understand it,
Mr. Bane, that initially you were talking to Ilusorio and Poblador?

A That's correct.

Q But later in the negotiations the two were out and you were now just talking to Mr Nieto?

A Not just to Mr. Nieto; we were also talking to Attorney Jose Africa.

Q So let me clarify that. After the Enrile meeting and because of your decision to just go along
with what Enrile wanted, there was this process set into motion to organize a new outfit and at
the start you were talking to Ilusorio and Poblador, is that right?

A Correct.

Q Later on, and this was before Eastern was organized, you continued the negotiations, this time
with Ambassador Manuel Nieto junior and Attorney Jose L. Africa, is that correct?

A Correct.

Q Now, there is a statement in paragraph 9: "We learned much later that this was upon the
instructions of President Marcos." Who told you that President Marcos had issued the instruction
to be dealing with Nieto?

MR. AFRICA: Objected to, your Honor, asking for

MR. LIM: I am asking the source of the statement.

MR. AFRICA: My objections, I am just putting it on record: objected to for asking for hearsay
evidence.

MR. LIM: Subject to a later ruling, your Honor.

A It was either Ambassador Nieto or Attorney Africa.

Q Now, I show you paragraph 10 of your affidavit which is continued, I am sorry I show you
paragraph 10, I draw your attention to paragraph 10 of your affidavit which is found on page 4.
Do you confirm and ratify in particular what is stated in paragraph 10 of the affidavit?

MR. AFRICA: Subject to question and answer later on, your Honor, please.
A Yes.

MR. LIM: Thank you, sir. May I request, your Honor, that the entire paragraph 10 be sub marked
as Exhibit C-12-C-1 and that the last sentence therein reading: "Africa quickly spelt out the rules
that they were interested in the proposition and that we were to deal only with the BAN group
(composed of Roberto Benedicto, Jose Africa and Manuel Nieto, Jr.,). We were informed that
this was at the express wish of President Marcos who had appointed their group to control
telecommunications interests;" that that particular sentence be now underscored but same would
be part of C-12-C-1 which is the entire paragraph 10, but the last sentence I request that it be
underlined or underscored for emphasis. (Marked)

Q What participation did you have in the organization of Eastern?

A I was very deeply involved, together with our director from London, Wilfred H. Davies and
also our finance director, David West.

Q Were you one of the incorporators of Eastern?

A I was, yes.

Q Did you sign the Articles of Incorporation of Eastern?

A I did.

Q Would you have agreed to be one of the incorporators of Eastern and signed its Articles if no
pressure was exerted on you by Secretary Enrile?

MR. AFRICA: Objected to, your Honor, please.

MR. LIM: I request an answer for the same reason.

A No, I don't think I would.

Q What is that, Mr Bane?

A No, I would not, no.

Q You are telling the honorable court that your agreeing to incorporate Eastern and your having
signed the Articles of Eastern was the result of that pressure during the Enrile meeting in March
of 1973?

MR. AFRICA: Same objection, your Honor.

A Yes, that is correct, because we would have continued as 100% British corporation. So the
pressure was brought to bear upon us to go to a 60/40 corporation.
MR. LIM: I notice from the Articles of Incorporation of Eastern that you are the Treasurer in
Trust, that you were the Treasurer in Trust, meaning the Treasurer upon the incorporation of
Eastern?

A Yes, that's true.43

xxx

MR. LIM: That is the tenor of the affidavit. Just to satisfy that concern I will rephrase the
question. Do you know what happened to the assets of EEATC when Eastern was incorporated
on June 10, 1974?

A Yes, Eastern purchased all the assets of EEATC.

Q I would like to draw your attention to paragraph 12 of your affidavit which I read: "The figure
eventually negotiated for the assets (net book value only and no good will) was ten million pesos
(P10,000,000.00) on the basis of which the BAN group will put up six million pesos
(P6,000,000.00). Further meetings took place to finalize the details but Africa later informed us
that they could not raise the required amount. As a compromise, he suggested that the new
corporation raise a bank loan from which C&W could be paid. While we were not happy with
this arrangement, we resigned ourselves to the fact that we would have to accede. It was agreed
that stockholders' contribution would be five million pesos (P5,000,000.00) plus a bank loan of
seven million pesos (P7,000,000.00) to cover asset payment and working capital. Africa then
advised that they could only raise one million pesos (P1,000,000.00) and C&W could loan
them two million pesos (P2,000,000.00). Again, we were unhappy but again we complied." My
question is: do you confirm the correctness of this narration including the figures mentioned
here?

MR. AFRICA: Subject to question and answer, your Honor please, as there are statements which
are of conclusion and/or hearsay.

A Yes, I do confirm that that's precisely what happened.

MR. LIM: What this one million pesos which was the amount that the Africa group said they
could only raise, what was this one million?

A Well, it was their contribution to the capital of the company.

Q Aside from the one million pesos contribution to the capital of Eastern from the Filipino group
of Benedicto, Africa, and Nieto, do you know if additional contributions in terms of money were
made by them afterwards?

A Well, in as much as that they repaid the loans that C&W granted them out of the dividends
yes, there were in effect contributions, I suppose.

Q How much was the amount of the loan?

A Two million pesos.

Q That two million pesos loan was repaid by the Filipino group out of stock dividends?

A No, out of yes, stock dividends, yes, cash dividends.

Q Cash dividends?

A Cash dividends as I recall.

Q Now, aside from that were there any subsequent contributions to the capital of Eastern from
the Filipino group?

A Not as far as I can recall, no.

Q So in terms of cold cash or money, what they contributed initially was only one million pesos?

A Correct.

Q The loan that they got from C&W of two million was repaid to the company, or to C&W in
terms of the dividends?

MR. AFRICA: Already answered, your Honor.

A Yes, yes, correct.

MR. LIM: Who granted the loan to the Filipino group?

A The Hong Kong and Shanghai Bank. Well, they didn't grant it to the Filipino group; they
granted it to Eastern.

Q And was there a guarantee made for that loan?

MR. AFRICA: Leading, your Honor please.

A Yes, a guarantee was made by Cable & Wireless.

MR. LIM: I request, your Honor, for emphasis that paragraph 12 of the affidavit which has been
read into the record and which has been confirmed by the witness be bracketed and sub marked
as Exhibit C-12-d-1, paragraph 12. (Marked)

Mr Bane, would you or your company Cable & Wireless have agreed to that kind of payment
arrangement, which is to pay in dividends, if it were not for the pressure from Secretary Enrile?

MR. AFRICA: Same objection, your Honor please.

A No, we would not; it wasn't, it was not standard business practice in any way at all. We would
not normally have agreed to a condition such as that.

xxx

Q Mr Bane, what was the position of Manuel Nieto Jr. in Eastern after incorporation?

A He was the President.

xxx

Q Now, Mr Bane, paragraph 13 of your affidavit mentions that: "Attorney Luciano Salazar
drafted the Presidential Decree for the transfer of EEATC's franchise to Eastern, that said draft
decree was personally delivered to Manuel Nieto, Jr., who committed to secure President
Marcos' approval and signature." Do I take it that this was in 1974 contemporaneously with the
organization of Eastern?

A Yes, it was.

Q You said Manuel Nieto Jr., was the Eastern President?

A That's correct.

Q Was Mr. Nieto able to secure the approval of President Marcos to the transfer of EEATC's
franchise to Eastern?

A Yes, he was, it was issued under Presidential Decree.

Q If I show you a copy of that Presidential Decree would you be able to recognize it in the sense
that it refers to your company, the former EEATC, not former, the EEATC?

A Yes. (Handed)

Q At this point, your Honor, I make of record that this representation has handed to Mr. Maurice
Bane Exhibit C Motion Increase in Capital.

A Yes, that is indeed the Presidential Decree.

Q Your Honor, may I make a little correction in my manifestation. What I handed to the witness
is a photocopy of Presidential Decree 48944 with the Exhibit marking being reproduced as part of
the document, the document actually marked as Exhibit C is now part of the case records. Now,
Mr. Witness, please tell the court whether you had any personal participation in the preparation
of this particular decree PD 489?
A Yes, I did. I consulted with Attorney Salazar. We went through the Eastern franchise and so to
that extent, in putting this together, yes I did co-operate with Attorney Salazar, although of
course Attorney Salazar was the prime person behind drafting the document.

Q Your affidavit mentions that this was approved by President Marcos in the entirety of the draft
decree as prepared by Attorney Salazar and you, meaning no correction was made by
Malacaang. My question is: what did that convey to you, meaning the fact that Marcos
approved the Presidential Decree drafted by Attorney Salazar and yourself without revision or
amendment?

MR. AFRICA: Objected to, your Honor please, asking for an opinion and a conclusion.

MR. LIM: That is very relevant, your Honor, the witness having participated in preparing this.

MR. AFRICA: Anyway, my objection is on the record.

A Well, Mr. Nieto undertook and promised us that he would get the draft Presidential Decree
signed into law by President Marcos.

MR. LIM: And was he able to deliver on his promise?

A He certainly was. You can see the signature on the bottom.

Q Witness referring to

A I do recognize that signature, yes, as President Marcos' signature.

Q Your Honor, at this point may I request that this draft I'm sorry that this copy of PD 489 be
again marked in this deposition proceedings as Exhibit D Deposition Bane and the signature of
President Marcos at the bottom of page 2 pointed at by the witness be sub marked and bracketed
as D-1 Deposition Bane. (Marked)

Mr. Bane, did you also serve as director of Eastern, one of the directors, I mean, of Eastern?

A Yes, I was for a time, a short period of time.

Q Now, after Eastern's incorporation in 1974 did you carry on as an officer of Eastern?

A Yes, I did.

Q What positions?

A Executive Vice President and Treasurer.

Q And as you said this was up to 1987?

A Yes.

xxx

Q Would you have acceded to that kind of set up, meaning having Filipino partners in the
persons of Mr. Nieto and later Attorney Africa if it were not for the pressure from Secretary
Enrile during your March 1973 meeting?

MR. AFRICA: Already answered, your Honor please.

A I can only repeat what I said before, that no, of course I would not.

MR. LIM: Now, during your stint with Eastern in association with Mr. Nieto and later with
Attorney Jose Africa, do you know of instances when President Marcos intervened on behalf of
Eastern, or showed personal interest for Eastern?

MR. AFRICA: Question is vague and intervene is an all-encompassing word.

MR. LIM: I reform, your Honor. Mr Bane, you said that from 1974 continuously up to 1987 you
were associated with Eastern, you were one of its officers and you were working with Filipino
directors or officers. During this time the President of the Philippines of course was continuously
Mr. Marcos. My question, sir, is: during your incumbency in Eastern do you know of instances
when President Marcos helped your company obtain correspondenceships, or in its competition
with PLDT?

A Yes, I do, yes.

Q In what way did Marcos help Eastern?

A Well, once the company was formed and under the formation of the company Eastern or Cable
& Wireless had a management contract to manage the company, we could see that
telecommunications development was very badly needed in the Philippines. The satellite earth
station had been constructed and the Tropo had gone in, but there was still a very large demand
for circuits. We therefore devised a plan to put underseas cables, telephone cables, from the
Philippines to Japan, from the Philippines to Hong Kong, Philippines to Singapore and then
latterly Philippines to Taiwan. For that we obviously needed approvals right at the top, because
we were, in effect, in competition with PLDT. PLDT were really dragging their heels in
development, perhaps because of lack of financing or whatever. So we saw an opportunity to
perhaps establish Eastern as a major player in the Philippines telecommunications. I therefore
drafted a letter which was what is the word I'm looking for perhaps which was fine tuned
perhaps is the best word, by Attorney Jose Africa. And this set out Eastern's plans for
development of submarine cable systems and everything else, and we asked at the bottom of the
letter for Presidential approval. And this letter was signed by Ambassador Nieto; it was taken to
Malacaang and it was signed, written across the top of the page, I think the words were just
"Approved, President Marcos" so we received approval, direct approval from President Marcos
to proceed with the implementation of this very big cable project. It meant to say that we had
bypassed the national telecommunications commission under whose authority this would
normally have been submitted, but knowing as we did that with PLDT's opposition we probably
wouldn't have got it through the NTC.

Q So it was President Marcos himself who gave the approval for Eastern to undertake the
construction of these submarine cables that you mentioned?

A That's correct, yes.

Q And can you tell us the significance of that designation, what happened to Eastern because it
got this project?

A Well, by putting in the submarine cable systems, since we were financing them, we had to
have the approval of, of course, the distant administration in this case Hong Kong, Singapore
and Taiwan, so one of the benefits that accrued from this was that we became a telephone
correspondent to these countries. After all, these cables were very high capacity. I think to Hong
Kong they were 1380 telephone circuits, to Japan 960 telephone circuits, so that what it did it
was for the great benefit of the Philippines. We used the phrase in the letter "to make the
Philippines the hub of telecommunications in South East Asia," which we hoped we were going
to do and I think to a large extent we did do. The ultimate benefit to Eastern was quite
considerable, it enormously increased cash flow and of course from that we financed the
cables.45

xxx

Q Mr. Bane, you stated that you were with Eastern for 21 years?

A That's correct, yes.

Q 21 continuous years.

A With EEATC and with Eastern.

xxx

Q Mr. Bane, were there other stockholders of Class A during this 21 year period?

A The only changes that I was aware of that were made was that Attorney Jose Africa pointed
out to me, after the incorporation, that they wanted to put some of the stock, or they would put
some of the stock in the name of various companies. He also mentioned that of course they were
going to put some small, a very small minority of shares in the names of family members. That's
as far as I knew.

Q These companies, what companies were these? Or rather, excuse me sir, rather what would be
the nature of these companies?
A I don't know, I don't know what the companies were. I do know the names. I think
Ambassador Nieto's was Aerocom, was Ambassador Benedicto's Universal Molasses, I can't
remember? And then Attorney Jose Africa, I think,was Polygon.

Q Now having been associated with Manuel Nieto Jr. and Jose L. Africa and also Mr. Benedicto
for many years, did you come to know at any time during that period of association with them
whether President Marcos had any participation or control in their stockholdings in Eastern?

MR. AFRICA: Please, objected to, your Honor, witness isn't competent. The best witnesses
would be the persons themselves, not what this witness has been told.

MR. LIM: If the witness knows, your Honor.

MR. AFRICA: But what he was told, not what is true, or what is true and correct?

A No, I was not told that President Marcos had a stockholding in Eastern. There was, of course,
speculation among ourselves as to in a vague sort of way we often wondered. The only time
that I actually knew that President Marcos had a significant stockholding in Eastern was when,
after sequestration, Ambassador Nieto went on to television and stated on television that I think
first of all he stated something about Philcomsat POTC and he then stated on television that
President Marcos owned 40% of the stock of Eastern. That's the only time that I was, I had any
direct, shall we say, or had been directly informed by television of course that President
Marcos was a stockholder.46

In the 2006 case of Yuchengco v. Sandiganbayan,47 this Court overturned the ruling of the
Sandiganbayans Partial Decision and held that the testimonies through depositions of Campos,
Gapud and de Guzman established the Marcoses beneficial ownership of Prime Holding
Incorporated (PHI). The Court ruled that "the testimonies of Campos, Gapud, and de Guzman,
persons who actually participated in the formation and early years of operation of PHI, constitute
evidence that directly addresses the critical issue."48

In this case, the deponent Maurice V. Bane was the Executive Vice-President and Treasurer of
ETPI from 1974 until his retirement in 1987. Maurice V. Bane had personal knowledge of and
involvement in the circumstances leading to the formation of ETPI in 1974, which is crucial to
petitioners allegation that private respondents interest in ETPI rightfully belongs to the
Government. To dismiss the Bane deposition as inadmissible based on the tenuous ground that
there was no "actual consolidation" of cases is to disregard the obvious fact that the Bane
deposition was taken in CIVIL CASE NO. 0009 (Incident Case No. 0130 and G.R. No.
107789) and that all the defendants (now private respondents) in Civil Case No. 0009 were duly
notified of the scheduled deposition-taking.

Although petitioner, in its formal offer of evidence in Civil Case No. 0009, inadvertently omitted
the deposition of Maurice V. Bane, petitioner thereafter filed an urgent motion praying that it be
allowed to introduce as additional evidence the deposition of Maurice V. Bane. The
Sandiganbayan should have granted this motion or the succeeding Motion to Admit Supplemental
Offer of Evidence (Re: Deposition of Maurice V. Bane) filed on 16 November 2001. As held in
the 1997 case of Republic v. Sandiganbayan (Third Division):49

In all cases involving alleged ill-gotten wealth brought by or against the Presidential
Commission on Good Government, it is the policy of this Court to set aside technicalities and
formalities that serve merely to delay or impede their judicious resolution. This Court prefers to
have such cases resolved on the merits before the Sandiganbayan. Substantial justice to all
parties, not mere legalisms or perfection of form, should now be relentlessly pursued. Eleven
years have passed since the government started its search for and reversion of such alleged ill-
gotten wealth. The definitive resolution of such cases on the merits is thus long overdue. If there
is adequate proof of illegal acquisition, accumulation, misappropriation, fraud or illicit conduct,
let it be brought out now.50

Accordingly, the Sandiganbayan Resolution dated 7 February 2002 should be reversed and set
aside. The deposition of Maurice V. Bane taken on 23 to 24 October 1996, together with the
accompanying documentary exhibits, should be admitted as part of petitioners evidence. I vote
to GRANT the petition and REMAND this case to the Sandiganbayan for further proceedings.

ANTONIO T. CARPIO
Associate Justice

C. Rules of Admissibility

1. Object / Real Evidence

People of the Philippines vs Mallilin (meron lang Mallillin vs People)

SECOND DIVISION

G.R. No. 172953 April 30, 2008

JUNIE MALILLIN Y. LOPEZ, petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.

DECISION

TINGA, J.:

The presumption of regularity in the performance of official functions cannot by its lonesome
overcome the constitutional presumption of innocence. Evidence of guilt beyond reasonable
doubt and nothing else can eclipse the hypothesis of guiltlessness. And this burden is met not by
bestowing distrust on the innocence of the accused but by obliterating all doubts as to his
culpability.

In this Petition for Review1 under Rule 45 of the Rules of Court, Junie Malillin y Lopez
(petitioner) assails the Decision2 of the Court of Appeals dated 27 January 2006 as well as its
Resolution3 dated 30 May 2006 denying his motion for reconsideration. The challenged decision
has affirmed the Decision4 of the Regional Trial Court (RTC) of Sorsogon City, Branch 525
which found petitioner guilty beyond reasonable doubt of illegal possession of
methamphetamine hydrochloride, locally known as shabu, a prohibited drug.

The antecedent facts follow.

On the strength of a warrant6 of search and seizure issued by the RTC of Sorsogon City, Branch
52, a team of five police officers raided the residence of petitioner in Barangay Tugos, Sorsogon
City on 4 February 2003. The team was headed by P/Insp. Catalino Bolanos (Bolanos), with PO3
Roberto Esternon (Esternon), SPO1 Pedro Docot, SPO1 Danilo Lasala and SPO2 Romeo
Gallinera (Gallinera) as members. The searchconducted in the presence of barangay kagawad
Delfin Licup as well as petitioner himself, his wife Sheila and his mother, Normaallegedly
yielded two (2) plastic sachets of shabu and five (5) empty plastic sachets containing residual
morsels of the said substance.

Accordingly, petitioner was charged with violation of Section 11,7 Article II of Republic Act No.
9165, otherwise known as The Comprehensive Dangerous Drugs Act of 2002, in a criminal
information whose inculpatory portion reads:

That on or about the 4th day of February 2003, at about 8:45 in the morning in Barangay
Tugos, Sorsogon City, Philippines, the said accused did then and there willfully,
unlawfully and feloniously have in his possession, custody and control two (2) plastic
sachets of methamphetamine hydrochloride [or] "shabu" with an aggregate weight of
0.0743 gram, and four empty sachets containing "shabu" residue, without having been
previously authorized by law to possess the same.

CONTRARY TO LAW.8

Petitioner entered a negative plea.9 At the ensuing trial, the prosecution presented Bolanos,
Arroyo and Esternon as witnesses.

Taking the witness stand, Bolanos, the leader of the raiding team, testified on the circumstances
surrounding the search as follows: that he and his men were allowed entry into the house by
petitioner after the latter was shown the search warrant; that upon entering the premises, he
ordered Esternon and barangay kagawad Licup, whose assistance had previously been requested
in executing the warrant, to conduct the search; that the rest of the police team positioned
themselves outside the house to make sure that nobody flees; that he was observing the conduct
of the search from about a meter away; that the search conducted inside the bedroom of
petitioner yielded five empty plastic sachets with suspected shabu residue contained in a denim
bag and kept in one of the cabinets, and two plastic sachets containing shabu which fell off from
one of the pillows searched by Esternona discovery that was made in the presence of
petitioner.10 On cross examination, Bolanos admitted that during the search, he was explaining
its progress to petitioner's mother, Norma, but that at the same time his eyes were fixed on the
search being conducted by Esternon.11

Esternon testified that the denim bag containing the empty plastic sachets was found "behind"
the door of the bedroom and not inside the cabinet; that he then found the two filled sachets
under a pillow on the bed and forthwith called on Gallinera to have the items recorded and
marked.12 On cross, he admitted that it was he alone who conducted the search because Bolanos
was standing behind him in the living room portion of the house and that petitioner handed to
him the things to be searched, which included the pillow in which the two sachets of shabu were
kept;13 that he brought the seized items to the Balogo Police Station for a "true inventory," then
to the trial court14 and thereafter to the laboratory.15

Supt. Lorlie Arroyo (Arroyo), the forensic chemist who administered the examination on the
seized items, was presented as an expert witness to identify the items submitted to the laboratory.
She revealed that the two filled sachets were positive of shabu and that of the five empty sachets,
four were positive of containing residue of the same substance.16 She further admitted that all
seven sachets were delivered to the laboratory by Esternon in the afternoon of the same day that
the warrant was executed except that it was not she but rather a certain Mrs. Ofelia Garcia who
received the items from Esternon at the laboratory.17

The evidence for the defense focused on the irregularity of the search and seizure conducted by
the police operatives. Petitioner testified that Esternon began the search of the bedroom with
Licup and petitioner himself inside. However, it was momentarily interrupted when one of the
police officers declared to Bolanos that petitioner's wife, Sheila, was tucking something inside
her underwear. Forthwith, a lady officer arrived to conduct the search of Sheila's body inside the
same bedroom. At that point, everyone except Esternon was asked to step out of the room. So, it
was in his presence that Sheila was searched by the lady officer. Petitioner was then asked by a
police officer to buy cigarettes at a nearby store and when he returned from the errand, he was
told that nothing was found on Sheila's body.18 Sheila was ordered to transfer to the other
bedroom together with her children.19

Petitioner asserted that on his return from the errand, he was summoned by Esternon to the
bedroom and once inside, the officer closed the door and asked him to lift the mattress on the
bed. And as he was doing as told, Esternon stopped him and ordered him to lift the portion of the
headboard. In that instant, Esternon showed him "sachet of shabu" which according to him came
from a pillow on the bed.20 Petitioner's account in its entirety was corroborated in its material
respects by Norma, barangay kagawad Licup and Sheila in their testimonies. Norma and Sheila
positively declared that petitioner was not in the house for the entire duration of the search
because at one point he was sent by Esternon to the store to buy cigarettes while Sheila was
being searched by the lady officer.21 Licup for his part testified on the circumstances surrounding
the discovery of the plastic sachets. He recounted that after the five empty sachets were found, he
went out of the bedroom and into the living room and after about three minutes, Esternon, who
was left inside the bedroom, exclaimed that he had just found two filled sachets.22
On 20 June 2004 the trial court rendered its Decision declaring petitioner guilty beyond
reasonable doubt of the offense charged. Petitioner was condemned to prison for twelve years
(12) and one (1) day to twenty (20) years and to pay a fine of P300,000.00.23 The trial court
reasoned that the fact that shabu was found in the house of petitioner was prima facie evidence
of petitioner's animus possidendi sufficient to convict him of the charge inasmuch as things
which a person possesses or over which he exercises acts of ownership are presumptively owned
by him. It also noted petitioner's failure to ascribe ill motives to the police officers to fabricate
charges against him.24

Aggrieved, petitioner filed a Notice of Appeal.25 In his Appeal Brief26 filed with the Court of
Appeals, petitioner called the attention of the court to certain irregularities in the manner by
which the search of his house was conducted. For its part, the Office of the Solicitor General
(OSG) advanced that on the contrary, the prosecution evidence sufficed for petitioner's
conviction and that the defense never advanced any proof to show that the members of the
raiding team was improperly motivated to hurl false charges against him and hence the
presumption that they had regularly performed their duties should prevail.27

On 27 January 2006, the Court of Appeals rendered the assailed decision affirming the judgment
of the trial court but modifying the prison sentence to an indeterminate term of twelve (12) years
as minimum to seventeen (17) years as maximum.28 Petitioner moved for reconsideration but the
same was denied by the appellate court.29 Hence, the instant petition which raises substantially
the same issues.

In its Comment,30 the OSG bids to establish that the raiding team had regularly performed its
duties in the conduct of the search.31 It points to petitioner's incredulous claim that he was
framed up by Esternon on the ground that the discovery of the two filled sachets was made in his
and Licup's presence. It likewise notes that petitioner's bare denial cannot defeat the positive
assertions of the prosecution and that the same does not suffice to overcome the prima facie
existence of animus possidendi.

This argument, however, hardly holds up to what is revealed by the records.

Prefatorily, although the trial court's findings of fact are entitled to great weight and will not be
disturbed on appeal, this rule does not apply where facts of weight and substance have been
overlooked, misapprehended or misapplied in a case under appeal.32 In the case at bar, several
circumstances obtain which, if properly appreciated, would warrant a conclusion different from
that arrived at by the trial court and the Court of Appeals.

Prosecutions for illegal possession of prohibited drugs necessitates that the elemental act of
possession of a prohibited substance be established with moral certainty, together with the fact
that the same is not authorized by law. The dangerous drug itself constitutes the very corpus
delicti of the offense and the fact of its existence is vital to a judgment of conviction.33 Essential
therefore in these cases is that the identity of the prohibited drug be established beyond doubt.34
Be that as it may, the mere fact of unauthorized possession will not suffice to create in a
reasonable mind the moral certainty required to sustain a finding of guilt. More than just the fact
of possession, the fact that the substance illegally possessed in the first place is the same
substance offered in court as exhibit must also be established with the same unwavering
exactitude as that requisite to make a finding of guilt. The chain of custody requirement performs
this function in that it ensures that unnecessary doubts concerning the identity of the evidence are
removed.35

As a method of authenticating evidence, the chain of custody rule requires that the admission of
an exhibit be preceded by evidence sufficient to support a finding that the matter in question is
what the proponent claims it to be.36 It would include testimony about every link in the chain,
from the moment the item was picked up to the time it is offered into evidence, in such a way
that every person who touched the exhibit would describe how and from whom it was received,
where it was and what happened to it while in the witness' possession, the condition in which it
was received and the condition in which it was delivered to the next link in the chain. These
witnesses would then describe the precautions taken to ensure that there had been no change in
the condition of the item and no opportunity for someone not in the chain to have possession of
the same.37

While testimony about a perfect chain is not always the standard because it is almost always
impossible to obtain, an unbroken chain of custody becomes indispensable and essential when
the item of real evidence is not distinctive and is not readily identifiable, or when its condition at
the time of testing or trial is critical, or when a witness has failed to observe its uniqueness.38 The
same standard likewise obtains in case the evidence is susceptible to alteration, tampering,
contamination39 and even substitution and exchange.40 In other words, the exhibit's level of
susceptibility to fungibility, alteration or tamperingwithout regard to whether the same is
advertent or otherwise notdictates the level of strictness in the application of the chain of
custody rule.

Indeed, the likelihood of tampering, loss or mistake with respect to an exhibit is greatest when
the exhibit is small and is one that has physical characteristics fungible in nature and similar in
form to substances familiar to people in their daily lives.41 Graham vs. State42 positively
acknowledged this danger. In that case where a substance later analyzed as heroinwas handled
by two police officers prior to examination who however did not testify in court on the condition
and whereabouts of the exhibit at the time it was in their possessionwas excluded from the
prosecution evidence, the court pointing out that the white powder seized could have been indeed
heroin or it could have been sugar or baking powder. It ruled that unless the state can show by
records or testimony, the continuous whereabouts of the exhibit at least between the time it came
into the possession of police officers until it was tested in the laboratory to determine its
composition, testimony of the state as to the laboratory's findings is inadmissible.43

A unique characteristic of narcotic substances is that they are not readily identifiable as in fact
they are subject to scientific analysis to determine their composition and nature. The Court
cannot reluctantly close its eyes to the likelihood, or at least the possibility, that at any of the
links in the chain of custody over the same there could have been tampering, alteration or
substitution of substances from other casesby accident or otherwisein which similar
evidence was seized or in which similar evidence was submitted for laboratory testing. Hence, in
authenticating the same, a standard more stringent than that applied to cases involving objects
which are readily identifiable must be applied, a more exacting standard that entails a chain of
custody of the item with sufficient completeness if only to render it improbable that the original
item has either been exchanged with another or been contaminated or tampered with.

A mere fleeting glance at the records readily raises significant doubts as to the identity of the
sachets of shabu allegedly seized from petitioner. Of the people who came into direct contact
with the seized objects, only Esternon and Arroyo testified for the specific purpose of
establishing the identity of the evidence. Gallinera, to whom Esternon supposedly handed over
the confiscated sachets for recording and marking, as well as Garcia, the person to whom
Esternon directly handed over the seized items for chemical analysis at the crime laboratory,
were not presented in court to establish the circumstances under which they handled the subject
items. Any reasonable mind might then ask the question: Are the sachets of shabu allegedly
seized from petitioner the very same objects laboratory tested and offered in court as evidence?

The prosecution's evidence is incomplete to provide an affirmative answer. Considering that it

was Gallinera who recorded and marked the seized items, his testimony in court is crucial to
affirm whether the exhibits were the same items handed over to him by Esternon at the place of
seizure and acknowledge the initials marked thereon as his own. The same is true of Garcia who
could have, but nevertheless failed, to testify on the circumstances under which she received the
items from Esternon, what she did with them during the time they were in her possession until
before she delivered the same to Arroyo for analysis.

The prosecution was thus unsuccessful in discharging its burden of establishing the identity of
the seized items because it failed to offer not only the testimony of Gallinera and Garcia but also
any sufficient explanation for such failure. In effect, there is no reasonable guaranty as to the
integrity of the exhibits inasmuch as it failed to rule out the possibility of substitution of the
exhibits, which cannot but inure to its own detriment. This holds true not only with respect to the
two filled sachets but also to the five sachets allegedly containing morsels of shabu.

Also, contrary to what has been consistently claimed by the prosecution that the search and
seizure was conducted in a regular manner and must be presumed to be so, the records disclose a
series of irregularities committed by the police officers from the commencement of the search of
petitioner's house until the submission of the seized items to the laboratory for analysis. The
Court takes note of the unrebutted testimony of petitioner, corroborated by that of his wife, that
prior to the discovery of the two filled sachets petitioner was sent out of his house to buy
cigarettes at a nearby store. Equally telling is the testimony of Bolanos that he posted some of the
members of the raiding team at the door of petitioner's house in order to forestall the likelihood
of petitioner fleeing the scene. By no stretch of logic can it be conclusively explained why
petitioner was sent out of his house on an errand when in the first place the police officers were
in fact apprehensive that he would flee to evade arrest. This fact assumes prime importance
because the two filled sachets were allegedly discovered by Esternon immediately after
petitioner returned to his house from the errand, such that he was not able to witness the conduct
of the search during the brief but crucial interlude that he was away.

It is also strange that, as claimed by Esternon, it was petitioner himself who handed to him the
items to be searched including the pillow from which the two filled sachets allegedly fell.
Indeed, it is contrary to ordinary human behavior that petitioner would hand over the said pillow
to Esternon knowing fully well that illegal drugs are concealed therein. In the same breath, the
manner by which the search of Sheila's body was brought up by a member of the raiding team
also raises serious doubts as to the necessity thereof. The declaration of one of the police officers
that he saw Sheila tuck something in her underwear certainly diverted the attention of the
members of petitioner's household away from the search being conducted by Esternon prior to
the discovery of the two filled sachets. Lest it be omitted, the Court likewise takes note of
Esternon's suspicious presence in the bedroom while Sheila was being searched by a lady officer.
The confluence of these circumstances by any objective standard of behavior contradicts the
prosecution's claim of regularity in the exercise of duty.

Moreover, Section 2144 of the Implementing Rules and Regulations of R.A. No. 9165 clearly
outlines the post-seizure procedure in taking custody of seized drugs. In a language too plain to
require a different construction, it mandates that the officer acquiring initial custody of drugs
under a search warrant must conduct the photographing and the physical inventory of the item at
the place where the warrant has been served. Esternon deviated from this procedure. It was
elicited from him that at the close of the search of petitioner's house, he brought the seized items
immediately to the police station for the alleged purpose of making a "true inventory" thereof,
but there appears to be no reason why a true inventory could not be made in petitioner's house
when in fact the apprehending team was able to record and mark the seized items and there and
then prepare a seizure receipt therefor. Lest it be forgotten, the raiding team has had enough
opportunity to cause the issuance of the warrant which means that it has had as much time to
prepare for its implementation. While the final proviso in Section 21 of the rules would appear to
excuse non-compliance therewith, the same cannot benefit the prosecution as it failed to offer
any acceptable justification for Esternon's course of action.

Likewise, Esternon's failure to deliver the seized items to the court demonstrates a departure
from the directive in the search warrant that the items seized be immediately delivered to the trial
court with a true and verified inventory of the same,45 as required by Rule 126, Section 1246 of
the Rules of Court. People v. Go47 characterized this requirement as mandatory in order to
preclude the substitution of or tampering with said items by interested parties.48 Thus, as a
reasonable safeguard, People vs. Del Castillo49 declared that the approval by the court which
issued the search warrant is necessary before police officers can retain the property seized and
without it, they would have no authority to retain possession thereof and more so to deliver the
same to another agency.50 Mere tolerance by the trial court of a contrary practice does not make
the practice right because it is violative of the mandatory requirements of the law and it thereby
defeats the very purpose for the enactment.51

Given the foregoing deviations of police officer Esternon from the standard and normal
procedure in the implementation of the warrant and in taking post-seizure custody of the
evidence, the blind reliance by the trial court and the Court of Appeals on the presumption of
regularity in the conduct of police duty is manifestly misplaced. The presumption of regularity is
merely just thata mere presumption disputable by contrary proof and which when challenged
by the evidence cannot be regarded as binding truth.52 Suffice it to say that this presumption
cannot preponderate over the presumption of innocence that prevails if not overthrown by proof
beyond reasonable doubt.53 In the present case the lack of conclusive identification of the illegal
drugs allegedly seized from petitioner, coupled with the irregularity in the manner by which the
same were placed under police custody before offered in court, strongly militates a finding of
guilt.

In our constitutional system, basic and elementary is the presupposition that the burden of
proving the guilt of an accused lies on the prosecution which must rely on the strength of its own
evidence and not on the weakness of the defense. The rule is invariable whatever may be the
reputation of the accused, for the law presumes his innocence unless and until the contrary is
shown.54 In dubio pro reo. When moral certainty as to culpability hangs in the balance, acquittal
on reasonable doubt inevitably becomes a matter of right.

WHEREFORE, the assailed Decision of the Court of Appeals dated 27 January 2006 affirming
with modification the judgment of conviction of the Regional Trial Court of Sorsogon City,
Branch 52, and its Resolution dated 30 May 2006 denying reconsideration thereof, are
REVERSED and SET ASIDE. Petitioner Junie Malillin y Lopez is ACQUITTED on
reasonable doubt and is accordingly ordered immediately released from custody unless he is
being lawfully held for another offense.

The Director of the Bureau of Corrections is directed to implement this Decision and to report to
this Court the action taken hereon within five (5) days from receipt.

SO ORDERED.

Quisumbing,Chairperson Carpio-Morales, Velasco, Jr., Brion, JJ., concur

People of the Philippines vs Pagaduan

THIRD DIVISION

G.R. No. 179029 August 12, 2010

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
FELIMON PAGADUAN y TAMAYO, Appellant.

DECISION

BRION, J.:

We review the decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 01597 which
affirmed in toto the decision2 of the Regional Trial Court (RTC), Branch 27, Bayombong, Nueva
Vizcaya, in Criminal Case No. 4600, finding appellant Felimon Pagaduan y Tamayo (appellant)
guilty beyond reasonable doubt of illegal sale of shabu, under Section 5, Article II of Republic
Act (R.A.) No. 9165 or the Comprehensive Dangerous Drugs Act of 2002.
 BACKGROUND FACTS

The prosecution charged the appellant before the RTC with violation of Section 5, Article II of
R.A. No. 9165 under an Information that states:

That on or about December 27, 2003 at about 4:30 oclock (sic) in the afternoon, in the
Municipality of Solano, Province of Nueva Vizcaya, Philippines and within the jurisdiction of
this Honorable Court, the above-named accused did then and there willfully, unlawfully and
feloniously sell, trade, dispense, deliver and give away 0.01 gram, more or less, of
methamphetamine hydrochloride (shabu), a dangerous drug, as contained in a heat-sealed
transparent plastic sachet to PO3 Peter C. Almarez, a member of the Philippine Drug
Enforcement Agency (PDEA) who posed as a buyer of shabu in the amount of P200.00, to the
damage and prejudice of the Republic of the Philippines.

CONTRARY TO LAW.3

The appellant pleaded not guilty on arraignment. Trial on the merits, thereafter, followed.

The evidence for the prosecution reveals the following facts.

After having received information that the appellant was selling illegal drugs in Nueva Vizcaya,
Captain Jaime de Vera called, on his cellular phone, PO3 Peter Almarez and SPO1 Domingo
Balido who were both in Santiago City and informed them of a planned buy-bust operation.
They agreed to meet at the SSS Building near LMN Hotel in Bayombong, Nueva Vizcaya.4 On
their arrival there, Captain de Vera conducted a briefing and designated PO3 Almarez as the
poseur buyer. Thereafter, Captain de Vera introduced PO3 Almarez to the police informant
(tipster),5 and gave him (PO3 Almarez) two P100 bills (Exhibits "D" and "E") which the latter
marked with his initials.6

After this briefing, the buy-bust team went to Bintawan Road, Solano, Nueva Vizcaya to conduct
the entrapment operation.7 PO3 Almarez and the informant rode a tricycle, while Captain de
Vera and SPO1 Balido followed on board a tinted van.8 The buy-bust team arrived at the target
area at around 4:30 p.m., and saw the appellant already waiting for the informant. The informant
approached the appellant and introduced PO3 Almarez to him as a buyer. PO3 Almarez told the
appellant that he needed shabu worth P200, and inquired from him (appellant) if he had a
"stock." The appellant replied in the affirmative, and then handed one heat-sealed transparent
plastic sachet containing white crystalline substance to PO3 Almarez. PO3 Almarez, in turn,
gave the two pre-marked P100 bills to the appellant.9 Immediately after, PO3 Almarez made the
pre-arranged signal to his companions, who then approached the appellant. Captain de Vera took
the marked money from the appellants right pocket, and then arrested him.10 PO3 Almarez, for
his part, marked the sachet with his initials.11 Thereafter, the buy-bust team brought the appellant
to the Diadi Police Station for investigation.12

At the police station, Captain de Vera prepared a request for laboratory examination (Exh.
"C").13 The appellant was transferred to the Diadi Municipal Jail where he was detained.14 Two
days later, or on December 29, 2003, PO3 Almarez transmitted the letter-request, for laboratory
examination, and the seized plastic sachet to the PNP Crime Laboratory, where they were
received by PO2 Fernando Dulnuan.15 Police Senior Inspector (PSI) Alfredo Quintero, the
Forensic Chemist of the PNP Crime Laboratory, conducted an examination on the specimen
submitted, and found it to be positive for the presence of shabu (Exh. "B").16

On the hearing of August 13, 2004, the prosecution offered the following as exhibits:

Exhibit "A" the shabu confiscated from the appellant

Exhibit "B" the report by the PNP Crime Laboratory

Exhibit "C" the request for laboratory examination

Exhibits "D" and "E" the buy-bust money

Exhibit "F" - the request for laboratory examination received by Forensic Chemist Quintero

The defense presented a different version of the events, summarized as follows:

At around 4:30 p.m. of December 27, 2003, Jojo Jose came to the appellants house and
informed him that Captain de Vera was inviting him to be an "asset." The appellant and Jojo
boarded a tricycle and proceeded to the SSS Building where Captain de Vera was waiting for
them.17 As the tricycle approached the Methodist Church along Bintawan Road, Jojo dropped his
slippers and ordered the driver to stop. Immediately after, a van stopped in front of the tricycle;
Captain de Vera alighted from the van and handcuffed the appellant. Captain de Vera brought the
appellant inside the van, frisked him, and took P200 from his pocket.18 Afterwards, Captain de
Vera took the appellant to the SSS Building, where he (Captain de Vera) and the building
manager drank coffee. Captain de Vera then brought the appellant to the Diadi Municipal Jail
where he was detained for almost two days.19

On the morning of December 29, 2003, the appellant was transferred to the Provincial Jail. He
signed a document without the assistance of a lawyer after being told that it would result in his
immediate release.20

The RTC, in its decision21 of August 16, 2005, convicted the appellant of the crime charged, and
sentenced him to suffer the penalty of life imprisonment. The RTC likewise ordered the
appellant to pay a P500,000.00 fine.

The appellant appealed to the CA, docketed as CA-G.R. CR-H.C. No. 01597. The CA, in its
decision22 dated May 22, 2007, affirmed the RTC decision.

The CA found unmeritorious the appellants defense of instigation, and held that the appellant
was apprehended as a result of a legitimate entrapment operation. It explained that in inducement
or instigation, an innocent person is lured by a public officer or private detective to commit a
crime. In the case at bar, the buy-bust operation was planned only after the police had received
information that the appellant was selling shabu.
The CA also held that the failure of the police to conduct a prior surveillance on the appellant
was not fatal to the prosecutions case. It reasoned out that the police are given wide discretion to
select effective means to apprehend drug dealers. A prior surveillance is, therefore, not
necessary, especially when the police are already accompanied by their informant.

The CA further ruled that the prosecution was able to sufficiently prove an unbroken chain of
custody of the shabu. It explained that PO3 Almarez sealed the plastic sachet seized from the
appellant, marked it with his initials, and transmitted it to the PNP Crime Laboratory for
examination. PSI Quintero conducted a qualitative examination and found the specimen positive
for the presence of shabu. According to the CA, the prosecution was able to prove that the
substance seized was the same specimen submitted to the laboratory and presented in court,
notwithstanding that this specimen was turned over to the crime laboratory only after two days.

In his brief,23 the appellant claims that the lower courts erred in convicting him of the crime
charged despite the prosecutions failure to prove his guilt beyond reasonable doubt. He harps on
the fact that the police did not conduct a prior surveillance on him before conducting the buy-
bust operation.

The appellant further contends that the prosecution failed to show an unbroken chain of custody
in the handling of the seized drug. He claims that there was no evidence to show when the
markings were done. Moreover, a period of two days had elapsed from the time the shabu was
confiscated to the time it was forwarded to the crime laboratory for examination.

The Office of the Solicitor General (OSG) counters with the argument that the chain of custody
of the shabu was sufficiently established. It explained that the shabu was turned over by the
police officers to the PNP Crime Laboratory, where it was found by the forensic chemist to be
positive for the presence of shabu. The OSG likewise claimed that the appellant failed to rebut
the presumption of regularity in the performance of official duties by the police. The OSG
further added that a prior surveillance is not indispensable to a prosecution for illegal sale of
drugs.24

THE COURTS RULING

After due consideration, we resolve to acquit the appellant for the prosecutions failure to prove
his guilt beyond reasonable doubt. Specifically, the prosecution failed to show that the police
complied with paragraph 1, Section 21, Article II of R.A. No. 9165, and with the chain of
custody requirement of this Act.

The Comprehensive Dangerous Drugs

Act: A Brief Background

R.A. No. 9165 was enacted in 2002 to pursue the States policy to "safeguard the integrity of its
territory and the well-being of its citizenry particularly the youth, from the harmful effects of
dangerous drugs on their physical and mental well-being, and to defend the same against acts or
omissions detrimental to their development and preservation."
R.A. No. 9165 repealed and superseded R.A. No. 6425, known as the Dangerous Drugs Act of
1972. Realizing that dangerous drugs are one of the most serious social ills of the society at
present, Congress saw the need to further enhance the efficacy of the law against dangerous
drugs. The new law thus mandates the government to pursue an intensive and unrelenting
campaign against the trafficking and use of dangerous drugs and other similar substances
through an integrated system of planning, implementation and enforcement of anti-drug abuse
policies, programs and projects.25

Illegal Sale of Drugs under Section 5

vis--vis the Inventory and Photograph

Requirement under Section 21

In a prosecution for illegal sale of a prohibited drug under Section 5 of R.A. No. 9165, the
prosecution must prove the following elements: (1) the identity of the buyer and the seller, the
object, and the consideration; and (2) the delivery of the thing sold and the payment therefor. All
these require evidence that the sale transaction transpired, coupled with the presentation in court
of the corpus delicti, i.e., the body or substance of the crime that establishes that a crime has
actually been committed, as shown by presenting the object of the illegal transaction.26 To
remove any doubt or uncertainty on the identity and integrity of the seized drug, evidence must
definitely show that the illegal drug presented in court is the same illegal drug actually recovered
from the appellant; otherwise, the prosecution for possession or for drug pushing under R.A. No.
9165 fails.27

The required procedure on the seizure and custody of drugs is embodied in Section 21, paragraph
1, Article II of R.A. No. 9165, which states:

(1) The apprehending team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of
the accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ),
and any elected public official who shall be required to sign the copies of the inventory and be
given a copy thereof[.]

This is implemented by Section 21(a), Article II of the Implementing Rules and Regulations of
R.A. No. 9165, which reads:

(a) The apprehending officer/team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the same in the
presence of the accused or the person/s from whom such items were confiscated and/or seized, or
his/her representative or counsel, a representative from the media and the Department of Justice
(DOJ), and any elected public official who shall be required to sign the copies of the inventory
and be given a copy thereof: Provided, that the physical inventory and photograph shall be
conducted at the place where the search warrant is served; or at the nearest police station or at the
nearest office of the apprehending officer/team, whichever is practicable, in case of warrantless
seizures; Provided, further, that non-compliance with these requirements under justifiable
grounds, as long as the integrity and the evidentiary value of the seized items are properly
preserved by the apprehending officer/team, shall not render void and invalid such seizures of
and custody over said items[.]

Strict compliance with the prescribed procedure is required because of the illegal drug's unique
characteristic rendering it indistinct, not readily identifiable, and easily open to tampering,
alteration or substitution either by accident or otherwise.28 The records of the present case are
bereft of evidence showing that the buy-bust team followed the outlined procedure despite its
mandatory terms. The deficiency is patent from the following exchanges at the trial:

PROSECUTOR [EMERSON TURINGAN]:

Q: After you handed this buy-bust money to the accused, what happened next?

[PO3 ALMAREZ:]

A: When the shabu was already with me and I gave him the money[,] I signaled the two, Captain
Jaime de Vera and SPO1 Balido, sir.

xxxx

Q: After you gave that signal, what happened?

A: Then they approached us and helped me in arresting Felimon Pagaduan, sir.

Q: After Pagaduan was arrested, what happened next?

A: After arresting Pagaduan[,] we brought him directly in Diadi Police Station, sir.

Q: What happened when you brought the accused to the Police Station in Diadi?

A: When we were already in Diadi Police Station, we first put him in jail in the
Municipal Jail of Diadi, Nueva Vizcaya, sir.

Q: What did you do with the shabu?

A: The request for laboratory examination was prepared and was brought to the Crime
Lab. of Solano, Nueva Vizcaya, sir.

xxxx

Q: After making the request, what did you do next[,] if any[,] Mr. Witness?

A: After submission of the request to the Crime Lab.[,] we prepared our joint affidavit for
submission of the case to the Court, sir.29
From the foregoing exchanges during trial, it is evident that the apprehending team, upon
confiscation of the drug, immediately brought the appellant and the seized items to the police
station, and, once there, made the request for laboratory examination. No physical inventory and
photograph of the seized items were taken in the presence of the accused or his counsel, a
representative from the media and the Department of Justice, and an elective official. PO3
Almarez, on cross-examination, was unsure and could not give a categorical answer when asked
whether he issued a receipt for the shabu confiscated from the appellant.30 At any rate, no such
receipt or certificate of inventory appears in the records.

In several cases, we have emphasized the importance of compliance with the prescribed
procedure in the custody and disposition of the seized drugs. We have repeatedly declared that
the deviation from the standard procedure dismally compromises the integrity of the evidence. In
People v. Morales,31 we acquitted the accused for failure of the buy-bust team to photograph and
inventory the seized items, without giving any justifiable ground for the non-observance of the
required procedures. People v. Garcia32 likewise resulted in an acquittal because no physical
inventory was ever made, and no photograph of the seized items was taken under the
circumstances required by R.A. No. 9165 and its implementing rules. In Bondad, Jr. v. People,33
we also acquitted the accused for the failure of the police to conduct an inventory and to
photograph the seized items, without justifiable grounds.

We had the same rulings in People v. Gutierrez,34 People v. Denoman,35 People v. Partoza,36
People v. Robles,37 and People v. dela Cruz,38 where we emphasized the importance of
complying with the required mandatory procedures under Section 21 of R.A. No. 9165.

We recognize that the strict compliance with the requirements of Section 21 of R.A. No. 9165
may not always be possible under field conditions; the police operates under varied conditions,
and cannot at all times attend to all the niceties of the procedures in the handling of confiscated
evidence. For this reason, the last sentence of the implementing rules provides that "non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team,
shall not render void and invalid such seizures of and custody over said items[.]" Thus,
noncompliance with the strict directive of Section 21 of R.A. No. 9165 is not necessarily fatal to
the prosecutions case; police procedures in the handling of confiscated evidence may still have
some lapses, as in the present case. These lapses, however, must be recognized and explained in
terms of their justifiable grounds, and the integrity and evidentiary value of the evidence seized
must be shown to have been preserved.39

In the present case, the prosecution did not bother to offer any explanation to justify the failure of
the police to conduct the required physical inventory and photograph of the seized drugs. The
apprehending team failed to show why an inventory and photograph of the seized evidence had
not been made either in the place of seizure and arrest or at the nearest police station (as required
by the Implementing Rules in case of warrantless arrests). We emphasize that for the saving
clause to apply, it is important that the prosecution explain the reasons behind the procedural
lapses, and that the integrity and value of the seized evidence had been preserved.40 In other
words, the justifiable ground for noncompliance must be proven as a fact. The court cannot
presume what these grounds are or that they even exist.41
The "Chain of Custody" Requirement

Proof beyond reasonable doubt demands that unwavering exactitude be observed in establishing
the corpus delicti - the body of the crime whose core is the confiscated illicit drug. Thus, every
fact necessary to constitute the crime must be established. The chain of custody requirement
performs this function in buy-bust operations as it ensures that doubts concerning the identity of
the evidence are removed.42

Blacks Law Dictionary explains chain of custody in this wise:

In evidence, the one who offers real evidence, such as the narcotics in a trial of drug case, must
account for the custody of the evidence from the moment in which it reaches his custody until
the moment in which it is offered in evidence, and such evidence goes to weight not to
admissibility of evidence. Com. V. White, 353 Mass. 409, 232 N.E.2d 335.

Likewise, Section 1(b) of Dangerous Drugs Board Regulation No. 1, Series of 2002 which
implements R.A. No. 9165 defines "chain of custody" as follows:

"Chain of Custody" means the duly recorded authorized movements and custody of seized drugs
or controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each
stage, from the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to
presentation in court for destruction. Such record of movements and custody of seized item shall
include the identity and signature of the person who held temporary custody of the seized item,
the date and time when such transfer of custody were made in the course of safekeeping and use
in court as evidence, and the final disposition[.]

In Malillin v. People,43 the Court explained that the chain of custody rule requires that there be
testimony about every link in the chain, from the moment the object seized was picked up to the
time it is offered in evidence, in such a way that every person who touched it would describe
how and from whom it was received, where it was and what happened to it while in the witness
possession, the condition in which it was received and the condition in which it was delivered to
the next link in the chain.

In the present case, the prosecutions evidence failed to establish the chain that would have
shown that the shabu presented in court was the very same specimen seized from the appellant.

The first link in the chain of custody starts with the seizure of the heat-sealed plastic sachet from
the appellant. PO3 Almarez mentioned on cross-examination that he placed his initials on the
confiscated sachet "after apprehending" the appellant. Notably, this testimony constituted the
totality of the prosecutions evidence on the marking of the seized evidence. PO3 Almarezs
testimony, however, lacked specifics on how he marked the sachet and who witnessed the
marking. In People v. Sanchez, we ruled that the "marking" of the seized items to truly ensure
that they are the same items that enter the chain and are eventually the ones offered in evidence
should be done (1) in the presence of the apprehended violator (2) immediately upon
confiscation. In the present case, nothing in the records gives us an insight on the manner and
circumstances that attended the marking of the confiscated sachet. Whether the marking had
been done in the presence of the appellant is not at all clear from the evidence that merely
mentioned that the evidence had been marked after the appellants apprehension.

The second link in the chain of custody is its turnover from the apprehending team to the police
station. PO3 Almarez testified that the appellant was brought to the Diadi Police Station after his
arrest. However, he failed to identify the person who had control and possession of the seized
drug at the time of its transportation to the police station. In the absence of clear evidence, we
cannot presume that PO3 Almarez, as the poseur buyer, handled the seized sachet to the
exclusion of others - during its transfer from the place of arrest and confiscation to the police
station. The prosecution likewise failed to present evidence pertaining to the identity of the duty
desk officer who received the plastic sachet containing shabu from the buy-bust team. This is
particularly significant since the seized specimen was turned over to the PNP Crime Laboratory
only after two days. It was not, therefore, clear who had temporary custody of the seized items
during this significant intervening period of time. Although the records show that the request for
laboratory examination of the seized plastic sachet was prepared by Captain de Vera, the
evidence does not show that he was the official who received the marked plastic sachet from the
buy-bust team.

As for the subsequent links in the chain of custody, the records show that the seized specimen
was forwarded by PO3 Almarez to the PNP Crime Laboratory on December 29, 2003, where it
was received by PO2 Dulnuan, and later examined by PSI Quintero. However, the person from
whom PO3 Almarez received the seized illegal drug for transfer to the crime laboratory was not
identified. As earlier discussed, the identity of the duty desk officer who received the shabu, as
well as the person who had temporary custody of the seized items for two days, had not been
established.

The procedural lapses mentioned above show the glaring gaps in the chain of custody, creating a
reasonable doubt whether the drugs confiscated from the appellant were the same drugs that were
brought to the crime laboratory for chemical analysis, and eventually offered in court as
evidence. In the absence of concrete evidence on the illegal drugs bought and sold, the body of
the crime the corpus delicti has not been adequately proven.44 In effect, the prosecution failed
to fully prove the elements of the crime charged, creating reasonable doubt on the appellants
criminal liability.

Presumption of Regularity in the Performance of Official Duties

In sustaining the appellants conviction, the CA relied on the evidentiary presumption that
official duties have been regularly performed. This presumption, it must be emphasized, is not
conclusive.45 It cannot, by itself, overcome the constitutional presumption of innocence. Any
taint of irregularity affects the whole performance and should make the presumption unavailable.
In the present case, the failure of the apprehending team to comply with paragraph 1, Section 21,
Article II of R.A. No. 9165, and with the chain of custody requirement of this Act effectively
negates this presumption. As we explained in Malillin v. People:46

The presumption of regularity is merely just that - a mere presumption disputable by contrary
proof and which when challenged by the evidence cannot be regarded as binding truth. Suffice it
to say that this presumption cannot preponderate over the presumption of innocence that prevails
if not overthrown by proof beyond reasonable doubt. In the present case the lack of conclusive
identification of the illegal drugs allegedly seized from petitioner, coupled with the irregularity in
the manner by which the same were placed under police custody before offered in court, strongly
militates a finding of guilt.

We are not unmindful of the pernicious effects of drugs in our society; they are lingering
maladies that destroy families and relationships, and engender crimes. The Court is one with all
the agencies concerned in pursuing an intensive and unrelenting campaign against this social
dilemma. Regardless of how much we want to curb this menace, we cannot disregard the
protection provided by the Constitution, most particularly the presumption of innocence
bestowed on the appellant. Proof beyond reasonable doubt, or that quantum of proof sufficient to
produce moral certainty that would convince and satisfy the conscience of those who act in
judgment, is indispensable to overcome this constitutional presumption. If the prosecution has
not proved, in the first place, all the elements of the crime charged, which in this case is the
corpus delicti, then the appellant deserves no less than an acquittal.

WHEREFORE, premises considered, we hereby REVERSE and SET ASIDE the May 22, 2007
Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 01597. Appellant Felimon Pagaduan
y Tamayo is hereby ACQUITTED for failure of the prosecution to prove his guilt beyond
reasonable doubt. He is ordered immediately RELEASED from detention unless he is confined
for another lawful cause.

Let a copy of this Decision be furnished the Director, Bureau of Corrections, Muntinlupa City
for immediate implementation. The Director of the Bureau of Corrections is directed to report
the action he has taken to this Court within five days from receipt of this Decision.

SO ORDERED.

ARTURO D. BRION
Associate Justice

Salas vs Matusalem

FIRST DIVISION

G.R. No. 180284, September 11, 2013

NARCISO SALAS, Petitioners, v.ANNABELLE MATUSALEM, Respondent.

DECISION

VILLARAMA, JR., J.:

Before the Court is a petition for review on certiorari which seeks to reverse and set aside the
Decision1 dated July 18, 2006 and Resolution2 dated October 19, 2007 of the Court of Appeals
(CA) in CA-G.R. CV No. 64379.

The factual antecedents:

On May 26, 1995, Annabelle Matusalem (respondent) filed a complaint for Support/Damages
against Narciso Salas (petitioner) in the Regional Trial Court (RTC) ofCabanatuan City (Civil
Case No. 2124-AF).

Respondent claimed that petitioner is. the father of her son Christian Paulo Salas who was born
on December 28, 1994. Petitioner, already 56 years old at the time, enticed her as she was then
only 24 years old, making her believe that he is a widower. Petitioner rented an apartment where
respondent stayed and shouldered all expenses in the delivery of their child, including the cost of
caesarian operation and hospital confinement. However, when respondent refused the offer of
petitioners family to take the child from her, petitioner abandoned respondent and her child and
left them to the mercy of relatives and friends. Respondent further alleged that she attempted
suicide due to depression but still petitioner refused to support her and their child.

Respondent thus prayed for support pendente lite and monthly support in the amount of
P20,000.00, as well as actual, moral and exemplary damages, and attorneys fees.

Petitioner filed his answer4 with special and affirmative defenses and counterclaims. He
described respondent as a woman of loose morals, having borne her first child also out of
wedlock when she went to work in Italy. Jobless upon her return to the country, respondent spent
time riding on petitioners jeepney which was then being utilized by a female real estate agent
named Felicisima de Guzman. Respondent had seduced a senior police officer in San Isidro and
her charge of sexual abuse against said police officer was later withdrawn in exchange for the
quashing of drug charges against respondents brother-in-law who was then detained at the
municipal jail. It was at that time respondent introduced herself to petitioner whom she pleaded
for charity as she was pregnant with another child. Petitioner denied paternity of the child
Christian Paulo; he was motivated by no other reason except genuine altruism when he agreed to
shoulder the expenses for the delivery of said child, unaware of respondents chicanery and
deceit designed to scandalize him in exchange for financial favor.

At the trial, respondent and her witness Grace Murillo testified. Petitioner was declared to have
waived his right to present evidence and the case was considered submitted for decision based on
respondents evidence.

Respondent testified that she first met petitioner at the house of his kumadre Felicisima de
Guzman at Bgy. Malapit, San Isidro, Nueva Ecija. During their subsequent meeting, petitioner
told her he is already a widower and he has no more companion in life because his children are
all grown-up. She also learned that petitioner owns a rice mill, a construction business and a
housing subdivision (petitioner offered her a job at their family-owned Ma. Cristina Village).
Petitioner at the time already knows that she is a single mother as she had a child by her former
boyfriend in Italy. He then brought her to a motel, promising that he will take care of her and
marry her. She believed him and yielded to his advances, with the thought that she and her child
will have a better life. Thereafter, they saw each other weekly and petitioner gave her money for
her child. When she became pregnant with petitioners child, it was only then she learned that he
is in fact not a widower. She wanted to abort the baby but petitioner opposed it because he
wanted to have another child.5

On the fourth month of her pregnancy, petitioner rented an apartment where she stayed with a
housemaid; he also provided for all their expenses. She gave birth to their child on December 28,
1994 at the Good Samaritan Hospital in Cabanatuan City. Before delivery, petitioner even
walked her at the hospital room and massaged her stomach, saying he had not done this to his
wife. She filled out the form for the childs birth certificate and wrote all the information
supplied by petitioner himself. It was also petitioner who paid the hospital bills and drove her
baby home. He was excited and happy to have a son at his advanced age who is his look-alike,
and this was witnessed by other boarders, visitors and Grace Murillo, the owner of the apartment
unit petitioner rented. However, on the 18th day after the babys birth, petitioner went to Baguio
City for a medical check-up. He confessed to her daughter and eventually his wife was also
informed about his having sired an illegitimate child. His family then decided to adopt the baby
and just give respondent money so she can go abroad. When she refused this offer, petitioner
stopped seeing her and sending money to her. She and her baby survived through the help of
relatives and friends. Depressed, she tried to commit suicide by drug overdose and was brought
to the hospital by Murillo who paid the bill. Murillo sought the help of the Cabanatuan City
Police Station which set their meeting with petitioner. However, it was only petitioners wife
who showed up and she was very mad, uttering unsavory words against respondent.6

Murillo corroborated respondents testimony as to the payment by petitioner of apartment rental,

his weekly visits to respondent and financial support to her, his presence during and after
delivery of respondents baby, respondents attempted suicide through sleeping pills overdose
and hospitalization for which she paid the bill, her complaint before the police authorities and
meeting with petitioners wife at the headquarters.7

On April 5, 1999, the trial court rendered its decision8 in favor of respondent, the dispositive
portion of which reads: chanRoblesv irtualLawlibrary

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against the defendant as follows:

1. Ordering the defendant to give as monthly support of TWO THOUSAND

(P2,000.00) PESOS for the child Christian Paulo through the mother;

2. Directing the defendant to pay the plaintiff the sum of P20,000.00 by way
of litigation expenses; and

3. To pay the costs of suit.

SO ORDERED.9
Petitioner appealed to the CA arguing that: (1) the trial court decided the case without affording
him the right to introduce evidence on his defense; and (2) the trial court erred in finding that
petitioner is the putative father of Christian Paulo and ordering him to give monthly support.

By Decision dated July 18, 2006, the CA dismissed petitioners appeal. The appellate court
found no reason to disturb the trial courts exercise of discretion in denying petitioners motion
for postponement on April 17, 1998, the scheduled hearing for the initial presentation of
defendants evidence, and the motion for reconsideration of the said order denying the motion
for postponement and submitting the case for decision.

On the paternity issue, the CA affirmed the trial courts ruling that respondent satisfactorily
established the illegitimate filiation of her son Christian Paulo, and consequently no error was
committed by the trial court in granting respondents prayer for support. The appellate court thus
held:chanRoblesvirtualLawlibrary

Christian Paulo, in instant case, does not enjoy the benefit of a record of birth in the civil registry
which bears acknowledgment signed by Narciso Salas. He cannot claim open and continuous
possession of the status of an illegitimate child.

It had been established by plaintiffs evidence, however, that during her pregnancy, Annabelle
was provided by Narciso Salas with an apartment at a rental of P1,500.00 which he paid for
(TSN, October 6, 1995, p. 18). Narciso provided her with a household help with a salary of
P1,500.00 a month (TSN, October 6, 1995, ibid). He also provided her a monthly food allowance
of P1,500.00 (Ibid, p. 18). Narciso was with Annabelle at the hospital while the latter was in
labor, walking her around and massaging her belly (Ibid, p. 11). Narciso brought home
Christian Paulo to the rented apartment after Annabelles discharge from the hospital. People
living in the same apartment units were witnesses to Narcisos delight to father a son at his age
which was his look alike. It was only after the 18th day when Annabelle refused to give him
Christian Paulo that Narciso withdrew his support to him and his mother.

Said testimony of Annabelle aside from having been corroborated by Grace Murillo, the owner
of the apartment which Narciso rented, was never rebutted on record. Narciso did not present any
evidence, verbal or documentary, to repudiate plaintiffs evidence.

In the cases of Lim vs. CA (270 SCRA 1) and Rodriguez vs. CA (245 SCRA 150), the Supreme
Court made it clear that Article 172 of the Family Code is an adaptation of Article 283 of the
Civil Code. Said legal provision provides that the father is obliged to recognize the child as his
natural child x x 3) when the child has in his favor any evidence or proof that the defendant is
his father.

In fact, in Ilano vs. CA (230 SCRA 242, 258-259), it was held that
The last paragraph of Article 283 contains a blanket provision that practically covers all the
other cases in the preceding paragraphs. Any other evidence or proof that the defendant is the
father is broad enough to render unnecessary the other paragraphs of this article. When the
evidence submitted in the action for compulsory recognition is not sufficient to meet [the]
requirements of the first three paragraphs, it may still be enough under the last paragraph. This
paragraph permits hearsay and reputation evidence, as provided in the Rules of Court, with
respect to illegitimate filiation.
As a necessary consequence of the finding that Christian Paulo is the son of defendant Narciso
Salas, he is entitled to support from the latter (Ilano vs. CA, supra).

It shall be demandable from the time the person who has the right to recover the same needs it
for maintenance x x. (Art. 203, Family Code of the Philippines).10

Petitioner filed a motion for reconsideration but it was denied by the CA.

Hence, this petition submitting the following arguments: chanRoblesvirtualLawlibrary

1. THE VENUE OF THE CASE WAS IMPROPERLY LAID BEFORE THE REGIONAL
TRIAL COURT OF CABANATUAN CITY CONSIDERING THAT BOTH PETITIONER
AND RESPONDENT ARE ACTUAL RESIDENTS OF BRGY. MALAPIT, SAN ISIDRO,
NUEVA ECIJA.

2. THE HONORABLE COURT OF APPEALS ERRED IN PRONOUNCING THAT

PETITIONER WAS AFFORDED THE FULL MEASURE OF HIS RIGHT TO DUE PROCESS
OF LAW AND IN UPHOLDING THAT THE TRIAL COURT DID NOT GRAVELY ABUSE
ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
DECIDED THE INSTANT CASE WITHOUT AFFORDING PETITIONER THE RIGHT TO
INTRODUCE EVIDENCE IN HIS DEFENSE.

3. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE

FILIATION OF CHRISTIAN PAULO WAS DULY ESTABLISHED PURSUANT TO
ARTICLE 175 IN RELATION TO ARTICLE 172 OF THE FAMILY CODE AND EXISTING
JURISPRUDENCE AND THEREFORE ENTITLED TO SUPPORT FROM THE
PETITIONER.11

We grant the petition.

It is a legal truism that the rules on the venue of personal actions are fixed for the convenience of
the plaintiffs and their witnesses. Equally settled, however, is the principle that choosing the
venue of an action is not left to a plaintiffs caprice; the matter is regulated by the Rules of
Court.12

In personal actions such as the instant case, the Rules give the plaintiff the option of choosing
where to file his complaint. He can file it in the place (1) where he himself or any of them
resides, or (2) where the defendant or any of the defendants resides or may be found.13 The
plaintiff or the defendant must be residents of the place where the action has been instituted at
the time the action is commenced.14

However, petitioner raised the issue of improper venue for the first time in the Answer itself and
no prior motion to dismiss based on such ground was filed. Under the Rules of Court before the
1997 amendments, an objection to an improper venue must be made before a responsive
pleading is filed. Otherwise, it will be deemed waived.15 Not having been timely raised,
petitioners objection on venue is therefore deemed waived.

As to the denial of the motion for postponement filed by his counsel for the resetting of the initial
presentation of defense evidence on April 17, 1998, we find that it was not the first time
petitioners motion for postponement was denied by the trial court.

Records disclosed that after the termination of the testimony of respondents last witness on
November 29, 1996, the trial court as prayed for by the parties, set the continuation of hearing
for the reception of evidence for the defendant (petitioner) on January 27, February 3, and
February 10, 1997. In the Order dated December 17, 1996, petitioner was advised to be ready
with his evidence at those hearing dates earlier scheduled. At the hearing on January 27, 1997,
petitioners former counsel, Atty. Rolando S. Bala, requested for the cancellation of the February
3 and 10, 1997 hearings in order to give him time to prepare for his defense, which request was
granted by the trial court which thus reset the hearing dates to March 3, 14 and 17, 1997. On
March 3, 1997, upon oral manifestation by Atty. Bala and without objection from respondents
counsel, Atty. Feliciano Wycoco, the trial court again reset the hearing to March 14 and 17,
1997. With the non-appearance of both petitioner and Atty. Bala on March 14, 1997, the trial
court upon oral manifestation by Atty. Wycoco declared their absence as a waiver of their right
to present evidence and accordingly deemed the case submitted for decision.16

On July 4, 1997, Atty. Bala withdrew as counsel for petitioner and Atty. Rafael E. Villarosa filed
his appearance as his new counsel on July 21, 1997. On the same date he filed entry of
appearance, Atty. Villarosa filed a motion for reconsideration of the March 14, 1997 Order
pleading for liberality and magnanimity of the trial court, without offering any explanation for
Atty. Balas failure to appear for the initial presentation of their evidence. The trial court
thereupon reconsidered its March 14, 1997 Order, finding it better to give petitioner a chance to
present his evidence. On August 26, 1997, Atty. Villarosa received a notice of hearing for the
presentation of their evidence scheduled on September 22, 1997. On August 29, 1997, the trial
court received his motion requesting that the said hearing be re-set to October 10, 1997 for the
reason that he had requested the postponement of a hearing in another case which was
incidentally scheduled on September 22, 23 and 24, 1997. As prayed for, the trial court reset the
hearing to October 10, 1997. On said date, however, the hearing was again moved to December
15, 1997. On February 16, 1998, the trial court itself reset the hearing to April 17, 1998 since it
was unclear whether Atty. Wycoco received a copy of the motion.17

On April 17, 1998, petitioner and his counsel failed to appear but the trial court received on April
16, 1998 an urgent motion to cancel hearing filed by Atty. Villarosa. The reason given by the
latter was the scheduled hearing on the issuance of writ of preliminary injunction in another case
under the April 8, 1998 Order issued by the RTC of Gapan, Nueva Ecija, Branch 36 in Civil
Case No. 1946. But as clearly stated in the said order, it was the plaintiffs therein who requested
the postponement of the hearing and it behoved Atty. Villarosa to inform the RTC of Gapan that
he had a previous commitment considering that the April 17, 1998 hearing was scheduled as
early as February 16, 1998. Acting on the motion for postponement, the trial court denied for the
second time petitioners motion for postponement. Even at the hearing of their motion for
reconsideration of the April 17, 1998 Order on September 21, 1998, Atty. Villarosa failed to
appear and instead filed another motion for postponement. The trial court thus ordered that the
case be submitted for decision stressing that the case had long been pending and that petitioner
and his counsel have been given opportunities to present their evidence. It likewise denied a
second motion for reconsideration filed by Atty. Villarosa, who arrived late during the hearing
thereof on December 4, 1998.18

A motion for continuance or postponement is not a matter of right, but a request addressed to the
sound discretion of the court. Parties asking for postponement have absolutely no right to assume
that their motions would be granted. Thus, they must be prepared on the day of the hearing.19
Indeed, an order declaring a party to have waived the right to present evidence for performing
dilatory actions upholds the trial courts duty to ensure that trial proceeds despite the deliberate
delay and refusal to proceed on the part of one party.20

Atty. Villarosas plea for liberality was correctly rejected by the trial court in view of his own
negligence in failing to ensure there will be no conflict in his trial schedules. As we held in
Tiomico v. Court of Appeals21: chanRoblesvirtualLawlibrary

Motions for postponement are generally frowned upon by Courts if there is evidence of bad faith,
malice or inexcusable negligence on the part of the movant. The inadvertence of the defense
counsel in failing to take note of the trial dates and in belatedly informing the trial court of any
conflict in his schedules of trial or court appearances, constitutes inexcusable negligence. It
should be borne in mind that a client is bound by his counsels conduct, negligence and mistakes
in handling the case.22

With our finding that there was no abuse of discretion in the trial courts denial of the motion for
postponement filed by petitioners counsel, petitioners contention that he was deprived of his
day in court must likewise fail. The essence of due process is that a party is given a reasonable
opportunity to be heard and submit any evidence one may have in support of ones defense.
Where a party was afforded an opportunity to participate in the proceedings but failed to do so,
he cannot complain of deprivation of due process. If the opportunity is not availed of, it is
deemed waived or forfeited without violating the constitutional guarantee.23

We now proceed to the main issue of whether the trial and appellate courts erred in ruling that
respondents evidence sufficiently proved that her son Christian Paulo is the illegitimate child of
petitioner.

Under Article 175 of the Family Code of the Philippines, illegitimate filiation may be established
in the same way and on the same evidence as legitimate children.

Article 172 of the Family Code of the Philippines states: chanRoblesvirtualLawlibrary

The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten instrument

and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws. (Underscoring supplied.)

Respondent presented the Certificate of Live Birth24 (Exhibit A-1) of Christian Paulo Salas in
which the name of petitioner appears as his father but which is not signed by him. Admittedly, it
was only respondent who filled up the entries and signed the said document though she claims it
was petitioner who supplied the information she wrote therein.

We have held that a certificate of live birth purportedly identifying the putative father is not
competent evidence of paternity when there is no showing that the putative father had a hand in
the preparation of the certificate.25 Thus, if the father did not sign in the birth certificate, the
placing of his name by the mother, doctor, registrar, or other person is incompetent evidence of
paternity.26 Neither can such birth certificate be taken as a recognition in a public instrument27
and it has no probative value to establish filiation to the alleged father.28

As to the Baptismal Certificate29 (Exhibit B) of Christian Paulo Salas also indicating petitioner
as the father, we have ruled that while baptismal certificates may be considered public
documents, they can only serve as evidence of the administration of the sacraments on the dates
so specified. They are not necessarily competent evidence of the veracity of entries therein with
respect to the childs paternity.30

The rest of respondents documentary evidence consists of handwritten notes and letters, hospital
bill and photographs taken of petitioner and respondent inside their rented apartment unit.

Pictures taken of the mother and her child together with the alleged father are inconclusive
evidence to prove paternity.31 Exhibits E and F32 showing petitioner and respondent inside
the rented apartment unit thus have scant evidentiary value. The Statement of Account33 (Exhibit
C) from the Good Samaritan General Hospital where respondent herself was indicated as the
payee is likewise incompetent to prove that petitioner is the father of her child notwithstanding
petitioners admission in his answer that he shouldered the expenses in the delivery of
respondents child as an act of charity.

As to the handwritten notes34 (Exhibits D to D-13) of petitioner and respondent showing

their exchange of affectionate words and romantic trysts, these, too, are not sufficient to establish
Christian Paulos filiation to petitioner as they were not signed by petitioner and contained no
statement of admission by petitioner that he is the father of said child. Thus, even if these notes
were authentic, they do not qualify under Article 172 (2) vis-- vis Article 175 of the Family
Code which admits as competent evidence of illegitimate filiation an admission of filiation in a
private handwritten instrument signed by the parent concerned.35

Petitioners reliance on our ruling in Lim v. Court of Appeals36 is misplaced. In the said case, the
handwritten letters of petitioner contained a clear admission that he is the father of private
respondents daughter and were signed by him. The Court therein considered the totality of
evidence which established beyond reasonable doubt that petitioner was indeed the father of
private respondents daughter. On the other hand, in Ilano v. Court of Appeals,37 the Court
sustained the appellate courts finding that private respondents evidence to establish her filiation
with and paternity of petitioner was overwhelming, particularly the latters public
acknowledgment of his amorous relationship with private respondents mother, and private
respondent as his own child through acts and words, her testimonial evidence to that effect was
fully supported by documentary evidence. The Court thus ruled that respondent had adduced
sufficient proof of continuous possession of status of a spurious child.

Here, while the CA held that Christian Paulo Salas could not claim open and continuous
possession of status of an illegitimate child, it nevertheless considered the testimonial evidence
sufficient proof to establish his filiation to petitioner.

An illegitimate child is now also allowed to establish his claimed filiation by any other means
allowed by the Rules of Court and special laws, like his baptismal certificate, a judicial
admission, a family Bible in which his name has been entered, common reputation respecting his
pedigree, admission by silence, the testimonies of witnesses, and other kinds of proof admissible
under Rule 130 of the Rules of Court.38 Reviewing the records, we find the totality of
respondents evidence insufficient to establish that petitioner is the father of Christian Paulo.

The testimonies of respondent and Murillo as to the circumstances of the birth of Christian
Paulo, petitioners financial support while respondent lived in Murillos apartment and his
regular visits to her at the said apartment, though replete with details, do not approximate the
overwhelming evidence, documentary and testimonial presented in Ilano. In that case, we
sustained the appellate courts ruling anchored on the following factual findings by the appellate
court which was quoted at length in the ponencia: chanRoblesvir tualLawlibrary

It was Artemio who made arrangement for the delivery of Merceditas (sic) at the Manila
Sanitarium and Hospital. Prior to the delivery, Leoncia underwent prenatal examination
accompanied by Artemio (TSN, p. 33, 5/17/74). After delivery, they went home to their
residence at EDSA in a car owned and driven by Artemio himself (id. p. 36).

Merceditas (sic) bore the surname of Ilano since birth without any objection on the part of
Artemio, the fact that since Merceditas (sic) had her discernment she had always known and
called Artemio as her Daddy (TSN, pp. 28-29, 10/18/74); the fact that each time Artemio was
at home, he would play with Merceditas (sic), take her for a ride or restaurants to eat, and
sometimes sleeping with Merceditas (sic) (id. p. 34) and does all what a father should do for his
child bringing home goodies, candies, toys and whatever he can bring her which a child
enjoys which Artemio gives to Merceditas (sic) (TSN, pp. 38-39, 5/17/74) are positive evidence
that Merceditas (sic) is the child of Artemio and recognized by Artemio as such. Special
attention is called to Exh. E-7 where Artemio was telling Leoncia the need for a frog test to
know the status of Leoncia.

Plaintiff pointed out that the support by Artemio for Leoncia and Merceditas (sic) was sometimes
in the form of cash personally delivered to her by Artemio, thru Melencio, thru Elynia (Exhs. E-
2 and E-3, and D-6), or thru Merceditas (sic) herself (TSN, p. 40, 5/17/74) and sometimes
in the form of a check as the Manila Banking Corporation Check No. 81532 (Exh. G) and the
signature appearing therein which was identified by Leoncia as that of Artemio because Artemio
often gives her checks and Artemio would write the check at home and saw Artemio sign the
check (TSN, p. 49, 7/18/73). Both Artemio and Nilda admitted that the check and signature were
those of Artemio (TSN, p. 53, 10/17/77; TSN, p. 19, 10/9/78).

During the time that Artemio and Leoncia were living as husband and wife, Artemio has shown
concern as the father of Merceditas (sic). When Merceditas (sic) was in Grade 1 at the St. Joseph
Parochial School, Artemio signed the Report Card of Merceditas (sic) (Exh. H) for the fourth
and fifth grading period(s) (Exh. H-1 and H-2) as the parent of Merceditas (sic). Those
signatures of Artemio [were] both identified by Leoncia and Merceditas (sic) because Artemio
signed Exh. H-1 and H-2 at their residence in the presence of Leoncia, Merceditas (sic) and
of Elynia (TSN, p. 57, 7/18/73; TSN, p. 28, 10/1/73). x x x.

xxx xxx xxx

When Artemio run as a candidate in the Provincial Board of Cavite[,] Artemio gave Leoncia his
picture with the following dedication: To Nene, with best regards, Temiong. (Exh. I). (pp.
19-20, Appellants Brief)

The mere denial by defendant of his signature is not sufficient to offset the totality of the
evidence indubitably showing that the signature thereon belongs to him. The entry in the
Certificate of Live Birth that Leoncia and Artemio was falsely stated therein as married does not
mean that Leoncia is not appellees daughter. This particular entry was caused to be made by
Artemio himself in order to avoid embarrassment.39

In sum, we hold that the testimonies of respondent and Murillo, by themselves are not competent
proof of paternity and the totality of respondents evidence failed to establish Christian Paulos
filiation to petitioner.

Time and again, this Court has ruled that a high standard of proof is required to establish
paternity and filiation. An order for recognition and support may create an unwholesome
situation or may be an irritant to the family or the lives of the parties so that it must be issued
only if paternity or filiation is established by clear and convincing evidence.40

Finally, we note the Manifestation and Motion41 filed by petitioners counsel informing this
Court that petitioner had died on May 6, 2010.

The action for support having been filed in the trial court when petitioner was still alive, it is not
barred under Article 175 (2)42 of the Family Code. We have also held that the death of the
putative father is not a bar to the action commenced during his lifetime by one claiming to be his
illegitimate child.43 The rule on substitution of parties provided in Section 16, Rule 3 of the 1997
Rules of Civil Procedure, thus applies.
SEC. 16. Death of party; duty of counsel. Whenever a party to a pending action dies, and the
claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within
thirty (30) days after such death of the fact thereof, and to give the name and address of his legal
representative or representatives. Failure of counsel to comply with his duty shall be a ground for
disciplinary action.

The action must be brought within the same period specified in Article 173, except when the
action is based on the second paragraph of Article 172, in which case the action may be brought
during the lifetime of the alleged parent.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator and the court may appoint a guardian ad litem
for the minor heirs.

The court shall forthwith order said legal representative or representatives to appear and be
substituted within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or if the one so named
shall fail to appear within the specified period, the court may order the opposing party, within a
specified time to procure the appointment of an executor or administrator for the estate of the
deceased and the latter shall immediately appear for and on behalf of the deceased. The court
charges in procuring such appointment, if defrayed by the opposing party, may be recovered as
costs.

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated July
18, 2006 and Resolution dated October 19, 2007 of the Court of Appeals in CA-GR. CV No.
64379 are hereby REVERSED and SET ASIDE. Civil Case No. 2124-AF of the Regional Trial
Court of Cabanatuan City, Branch 26 is DISMISSED.

No pronouncement as to costs. chanRoblesvirtualLawlibrary

SO ORDERED.

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Reyes, JJ., concur.

People of the Philippines vs Eric Rosauro

FIRST DIVISION

G.R. No. 209588, February 18, 2015

 PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ERIC ROSAURO Y
BONGCAWIL, Accused-Appellant.

DECISION

PEREZ, J.:

For the consideration of the Court is an appeal of the Decision1 dated 19 June 2013 of the Court
of Appeals (CA) in CA-G.R. CR-H.C. No. 00552-MIN, which affirmed the Judgment2 dated 24
November 2006 of the Regional Trial Court (RTC), Cagayan de Oro City, Branch 25 in Criminal
Case No. 2004-856, finding accused-appellant Eric Rosauro y Bongcawil (accused-appellant)
guilty beyond reasonable doubt of illegal sale of shabu under Sec. 5, Article II of Republic Act
No. 9165 (R. A. No. 9165) or the Comprehensive Dangerous Drugs Act of 2002, sentencing him
to suffer the penalty of life imprisonment and ordering him to pay a fine of P500,000.00.

In an Amended Information dated 21 February 2005,3 accused-appellant was charged with

violation of Sec. 5, Art. II of R. A. No. 9165, to wit:
chanRoblesvirtualLawlibrary

That on the 3rd day of July, 2004 at about 5:30 oclock in the afternoon, more or less, at Purok 3,
Barangay Poblacion, Municipality of Villanueva, Province of Misamis Oriental, Republic of the
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, not
being authorized by law to possess and to sell any dangerous drugs, knowingly, willfully and
feloniously, did then and there, sell and convey to a third person, who acted as a decoy in a buy
bust operation, one (1) sachet of shabu, containing 0.04 grams (sic) of shabu, which when
examined gave POSITIVE result to test for the presence of Methamphetamine Hydrochloride
(Shabu), a dangerous drug.4
Upon re-arraignment, accused-appellant pleaded not guilty to the crime charged.5 Thereafter,
pre-trial and trial on the merits ensued.

Based on the records, the prosecutions version of the facts is as follows: chanRob lesvirtualLawlibrary

On October 13, 2002, on the basis of unconfirmed reports that accused-appellant Eric Rosauro
(Rosauro for brevity) was selling and distributing drugs, the Provincial Drug Enforcement Unit
of Misamis Oriental conducted a test-buy operation in the Municipality of Villanueva, Misamis
Oriental using a confidential agent. The confidential agent bought shabu from Rosauro at Purok
2, Barangay Katipunan, Villanueva, Misamis Oriental. The substance bought from Rosauro was
examined by the PNP crime laboratory and yielded a positive result for Methamphetamine
Hydrochloride (commonly known as shabu).

On July 3, 2004, the police authorities received information that again drugs were being
distributed at Purok 3, Barangay Poblacion, Villanueva, Misamis Oriental. Thus, at 5:30 oclock
in the afternoon, the Provincial Anti-Illegal Drugs Special Operation Task Unit (PAID-SOTU)
elements led by SPO4 Lorenzo Larot and PO3 Juancho Dizon positioned themselves in the house
of their confidential agent.

There, the PAID-SOTU elements saw Rosauro negotiate with the confidential agent. In exchange
for the one (1) sachet of shabu given by Rosauro to the confidential agent, the latter gave him a
marked 100-peso bill with serial number YZ7 12579.
After the transaction, Larot and Dizon came out of their hiding place and arrested Rosauro.
Thereafter, the confidential agent handed the sachet to Larot, who taped it, marked it with the
marking Exhibit A, and placed it inside his pocket. He also took pictures of Rosauro and the
drugs. In the police station, he prepared a Certificate of Inventory and a Request for Laboratory
Examination. Both the drugs and Rosauro were then turned over to the Crime laboratory.

On the basis of the request made by Larot, Police Chief Inspector Ma. Leocy Mag-abo, the
Forensic Chemical Officer of PNP Crime Laboratory conducted a laboratory examination on the
contents of the sachet, on accused-appellant, and the marked money. The examination of the
seized item yielded positive result for methamphetamine hydrochloride (shabu); while the
accused-appellant and the marked money tested positive for the presence of ultra-violet
fluorescent powder.6
For his part, accused-appellant claims that he was merely a victim of instigation: chanRoblesvirtualLaw library

Accused-appellant Rosauro, on the other hand, tells a different tale. He testified that on July 3,
2004, the police asset went to his house four (4) times and convinced him to do an errand for
him. Rosauro refused to buy shabu as he did not know where to buy one. It was the confidential
informant who told him to buy the prohibited drug from a certain Kael and to deliver it to the
formers house. It was also the informant who gave the money to Rosauro to buy the shabu. But
Rosauro was not able to meet or buy directly from Kael because it was a young man who got and
handed to him the shabu on the road. When Rosauro went to the house of the confidential
informant as instructed, he was arrested by SPO4 Larot and Dizon. The sachet of shabu was not
even recovered from him but from the confidential informant.7
Finding the evidence of the prosecution sufficient to establish the guilt of accused-appellant, the
RTC rendered a judgment of conviction, viz.: chanRoblesvir tualLawlibrary

IN THE LIGHT OF THE FOREGOING, this Court hereby renders Judgment finding accused
ERIC ROSAURO y BONGCAWIL, guilty beyond reasonable doubt of the crime charged in
the information for selling and delivering a sachet of shabu to the poseur buyer a Violation of
Section 5, Article II of R.A. 9165 and imposes a penalty of life imprisonment and a fine of Five
Hundred Thousand (PhP 500,000.00) Pesos and to pay the cost.

The accused ERIC B. ROSAURO who has undergone preventive imprisonment shall be credited
in the service of his sentence consisting of deprivation of liberty, with the full time during which
he has undergone preventive imprisonment if the detention prisoner agrees voluntarily in writing
to abide by the same disciplinary rule imposed upon convicted prisoners, except those
disqualified by law.

The sachet of shabu, Exh. A is confiscated and forfeited in favor of the government to be
destroyed in accordance with law.8
Accused-appellant appealed before the CA, assigning a lone error: chanRobles virtualLawlibrary

THE COURT A QUO GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT

WHEN HIS GUILT WAS NOT PROVEN BEYOND REASONABLE DOUBT.9
After a review of the records, the CA affirmed the RTC Judgment. The appellate court ruled that
what transpired in the case at bar was an entrapment and not an instigation;10 that all the
elements of illegal sale of regulated or prohibited drugs were duly proven;11 that the non-
presentation of the confidential agent in court is not fatal;12 that the inconsistencies in the
testimony of the lone witness of the prosecution do not affect the result of the case;13 and that the
apprehending team was able to preserve the integrity of the subject drug and that the prosecution
was able to present the required unbroken chain in the custody of the subject drug.14 Thus, the
CA held: chanRoblesvirtualLawlibrary

WHEREFORE, the Judgment dated November 24, 2006 of the Regional Trial Court, Branch
25, Cagayan de Oro City in Criminal Case No. 2004-856 is hereby AFFIRMED.15
Accused-appellant is now before the Court seeking a review of his conviction.

After a thorough review of the records, however, we dismiss the appeal.

It is apropos to reiterate here that where there is no showing that the trial court overlooked or
misinterpreted some material facts or that it gravely abused its discretion, the Court will not
disturb the trial courts assessment of the facts and the credibility of the witnesses since the RTC
was in a better position to assess and weigh the evidence presented during trial. Settled too is the
rule that the factual findings of the appellate court sustaining those of the trial court are binding
on this Court, unless there is a clear showing that such findings are tainted with arbitrariness,
capriciousness or palpable error.16 chanroblesvirtuallawlibrary

The RTC and the CA both found the arrest of accused-appellant to be the result of a legitimate
entrapment procedure, and we find nothing in the records as to warrant a contrary finding. In
People v. Bartolome,17 we had the occasion to discuss the legitimacy of a decoy solicitation, to
wit:chanRoblesvirtualLawlibrary

It is no defense to the perpetrator of a crime that facilities for its commission were purposely
placed in his way, or that the criminal act was done at the decoy solicitation of persons seeking
to expose the criminal, or that detectives feigning complicity in the act were present and
apparently assisting its commission. Especially is this true in that class of cases where the office
is one habitually committed, and the solicitation merely furnishes evidence of a course of
conduct.

As here, the solicitation of drugs from appellant by the informant utilized by the police merely
furnishes evidence of a course of conduct. The police received an intelligence report that
appellant has been habitually dealing in illegal drugs. They duly acted on it by utilizing an
informant to effect a drug transaction with appellant. There was no showing that the informant
induced the appellant to sell illegal drugs to him. cralawred

Similarly, the presentation of an informant as witness is not regarded as indispensable to the

success of a prosecution of a drug-dealing accused. As a rule, the informant is not presented in
court for security reasons, in view of the need to protect the informant from the retaliation of the
culprit arrested through his efforts. Thereby, the confidentiality of the informants identity is
protected in deference to his invaluable services to law enforcement. Only when the testimony of
the informant is considered absolutely essential in obtaining the conviction of the culprit should
the need to protect his security be disregarded.18 In the present case, as the buy-bust operation
was duly witnessed by the Provincial Anti-Illegal Drugs Special Operation Task Unit (PAID-
SOTU) elements led by SPO4 Lorenzo Larot (SPO4 Larot) and PO3 Juancho Dizon, their
testimonies can take the place of that of the confidential informant.

As to whether accused-appellants guilt was established beyond reasonable doubt, we rule in the
affirmative.

In a catena of cases, this Court laid down the essential elements to be duly established for a
successful prosecution of offenses involving the illegal sale of dangerous or prohibited drugs,
like shabu, under Section 5, Article II of R.A. No. 9165, to wit: (1) the identity of the buyer and
the seller, the object of the sale, and the consideration; and (2) the delivery of the thing sold and
payment therefor. Briefly, the delivery of the illicit drug to the poseur-buyer and the receipt of
the marked money by the seller successfully consummate the buy-bust transaction. What is
material, therefore, is the proof that the transaction or sale transpired, coupled with the
presentation in court of the corpus delicti.19
chanroblesvirtuallawlibrary

Verily, all the elements for a conviction of illegal sale of dangerous or prohibited drugs were
proven by the prosecution: the identity of accused-appellant as the seller, and that of the
confidential informant as poseur-buyer were established, as well as the exchange of the sachet of
shabu and the marked money. It was also ascertained that the seized item was positive for shabu,
a dangerous drug, and that the same item was properly identified in open court by SPO4 Larot.
Moreover, the P100.00 bill with serial number YZ712579, or the subject marked money, as well
as the living body of the accused-appellant revealed a positive result for ultraviolet fluorescent
powder.

Accused-appellant avers that the prosecution was not able to prove the corpus delicti, and that
the statutory safeguards provided for in Sec. 21 of R.A. No. 9165 were not followed.

Indeed, as we held in People v. Torres,20 equally important in every prosecution for illegal sale
of dangerous or prohibited drugs is the presentation of evidence of the seized drug as the corpus
delicti. The identity of the prohibited drug must be proved with moral certainty. It must also be
established with the same degree of certitude that the substance bought or seized during the buy-
bust operation is the same item offered in court as exhibit. In this regard, paragraph 1, Section
21, Article II of R. A. No. 9165 (the chain of custody rule) provides for safeguards for the
protection of the identity and integrity of dangerous drugs seized, to wit: chanRoblesv irtualLawlibrary

SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and
have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition in the following manner: chanRob lesvirtualLawlibrary

(1) The apprehending team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of
the accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ),
and any elected public official who shall be required to sign the copies of the inventory and be
given a copy thereof.
However, this Court has, in many cases, held that while the chain of custody should ideally be
perfect, in reality it is almost always impossible to obtain an unbroken chain. The most
important factor is the preservation of the integrity and the evidentiary value of the seized items
as they will be used to determine the guilt or innocence of the accused. Hence, the prosecutions
failure to submit in evidence the physical inventory and photograph of the seized drugs as
required under Article 21 of R. A. No. 9165, will not render the accuseds arrest illegal or the
items seized from him inadmissible.21 chanroblesvirtuallawlibrary

The chain of custody is not established solely by compliance with the prescribed physical
inventory and photographing of the seized drugs in the presence of the enumerated persons. The
Implementing Rules and Regulations of R. A. No. 9165 on the handling and disposition of seized
dangerous drugs states: chanRoblesv irtualLawlibr ary

x x x Provided, further, that non-compliance with these requirements under justifiable grounds,
as long as the integrity and evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over
said items.22 (Italics, emphasis, undescoring omitted)
In the case at bar, after the sale was consummated, the confidential informant gave the seized
item to SPO4 Larot who placed tape on the sachet and marked it Exhibit A. Upon reaching the
police station, SPO4 Larot executed the Certificate of Inventory, as well as the request for
laboratory examination. The request, the specimen, as well as the marked money and accused-
appellant were then brought to the PNP Crime Laboratory for examination. They were received
by SPO2 Ricardo Maisog, the Receiving Clerk of the PNP Crime Laboratory Office, who then
forwarded them to Police Inspector Ma. Leocy Jabonillo Mag-abo, the Forensic Chemical
Officer of the PNP Crime Laboratory.23 Moreover, the seized item was duly identified by SPO4
Larot in open court as the same item seized from accused-appellant.

Accused-appellants guilt having been established, we likewise affirm the penalty imposed by
the RTC and the CA. Under the law, the offense of illegal sale of shabu carries with it the
penalty of life imprisonment to death and a fine ranging from Five Hundred Thousand Pesos
(P500,000.00) to Ten Million Pesos (P10,000,000.00), regardless of the quantity and purity of
the substance.24 Thus, the RTC and CA were within bounds when they imposed the penalty of
life imprisonment and a fine of Five Hundred Thousand Pesos (P500,000.00).

WHEREFORE, premises considered, the present appeal is DISMISSED.

SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo-De Castro, Bersamin, and Perlas-Bernabe, JJ., concur.

People of the Philippines vs Calantiao

FIRST DIVISION
G.R. No. 203984 June 18, 2014

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
MEDARIO CALANTIAO y DIMALANTA, Accused-Appellant.

DECISION

LEONARDO-DE CASTRO, J.:

This is an appeal from the January 1 7, 2012 Decision1 of the Court of Appeals in CA-G.R. CR.-
H.C. No. 04069, affirming in toto the July 23, 2009 Decision2 of the Regional Trial Court (RTC)
of Caloocan City, Branch 127, finding accused-appellant Medario Calantiao y Dimalanta
(Calantiao) guilty beyond reasonable doubt of violating Section 11, Article II of Republic Act
No. 9165 or the Comprehensive Dangerous Drugs Act of 2002.

On November 13, 2003, Calantiao was charged before the RTC of violation of Section 11,
Article II of Republic Act No. 9165 in an Information,3 the pertinent portion of which reads:
That on or about the 11th day of November, 2003 in Caloocan City, Metro Manila, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, without any
authority of law, did then and there willfully, unlawfully and feloniously have in his possession,
custody and control two (2) bricks of dried marijuana fruiting tops with a total weight of 997 .9
grams, knowing the same to be a dangerous drug.

The facts, as synthesized by the RTC and adopted by the Court of Appeals, are as follows:

EVIDENCE OF THE PROSECUTION

On November 13, 2003[,] at around 5:30 x x x in the afternoon, while PO1 NELSON
MARIANO and PO3 EDUARDO RAMIREZ were on duty, a certain EDWIN LOJERA arrived
at their office and asked for police assistance regarding a shooting incident. Per report of the
latter, it appears that while driving a towing truck and traversing along EDSA, Balintawak,
Quezon City, he had a traffic dispute (gitgitan) with a white taxi cab prompting him to follow
said vehicle until they reached along 8th Avenue Street corner C-3 Road, Caloocan City.
Thereat, the passengers of said taxi cab, one of them was accused Calantiao, alighted and fired
their guns. Surprised, Lojera could not do anything but continued his driving until he reached a
police station nearby where he reported the incident.

The police officers on duty then were PO1 NELSON MARIANO and PO3 EDUARDO
RAMIREZ. PO1 Mariano testified that they immediately responded to said complaint by
proceeding to 5th Avenue corner 8th Street, Caloocan City where they found the white taxi.
While approaching said vehicle, two armed men alighted therefrom, fired their guns towards
them (police officers) and ran away. PO1 Mariano and PO3 Ramirez chased them but they were
subdued. PO1 Mariano recovered from Calantiao a black bag containing two (2) bricks of dried
marijuana fruiting tops and a magazine of super 38 stainless with ammos, while PO3 Ramirez
recovered from Calantiaos companion [a] .38 revolver.
The suspects and the confiscated items were then turned over to SPO3 PABLO TEMENA,
police investigator at Bagong Barrio Police Station for investigation. Thereat, PO1 Mariano
marked the bricks of marijuana contained in a black bag with his initials, "NM". Thereafter, said
specimen were forwarded to the PNP Crime Laboratory for chemical analysis. The result of the
examination conducted by P/SINSP. JESSSE DELA ROSA revealed that the same was positive
for marijuana, a dangerous drug.

The foregoing testimony of PO1 MARIANO was corroborated by PO3 RAMIREZ who testified
that he personally saw those bricks of marijuana confiscated from the accused. He confirmed that
he was with PO1 Mariano when they apprehended said accused and his companion and testified
that while PO1 Mariano recovered from the accused a black bag containing marijuana, on his
part, he confiscated from accuseds companion a .38 revolver.

MR. CRISENDO AMANSEC, the driver of the taxi where the suspects boarded was also
presented in open court and testified as to what he knows about the incident. He confirmed that
on that date, two (2) persons boarded on his taxi and upon reaching C-3 Road, they alighted and
fired three (3) shots and ran away.

Aside from the oral testimonies of the witnesses, the prosecution also offered the following
documentary evidence to boost their charge against the accused:

Exh. "A" Request for Laboratory Examination dated November 12, 2003

Exh. "B" Physical Sciences Report No. D-1423-03 dated November 12, 2003

Exh. "C-1" Picture of First brick of marijuana fruiting tops

Exh. "C-2" Picture of Second brick of marijuana fruiting tops

Exh. "D" Referral Slip dated November 12, 2003

Exh. "E" Pinagsamang Sinumpaang Salaysay dated November 12, 2003 of PO3
Eduardo Ramirez and PO1 Nelson Mariano

Exh. "E-1" Their respective signatures

Exh. "F" Sinumpaang Salaysay of Crisendo Amansec (Erroneously marked as Exh.

"E")

EVIDENCE OF THE DEFENSE

The accused offered a different version of the story. According to his testimony, this instant case
originated from a traffic mishap where the taxi he and his companion Rommel Reyes were riding
almost collided with another car. Reyes then opened the window and made a "fuck you" sign
against the persons on board of that car. That prompted the latter to chase them and when they
were caught in a traffic jam, PO1 Nelson Mariano, one of the persons on board of that other car
alighted and kicked their taxi. Calantiao and Reyes alighted and PO1 Mariano slapped the latter
and uttered, "Putang ina mo bakit mo ako pinakyu hindi mo ba ako kilala?" Said police officer
poked his gun again[st] Reyes and when Calantiao tried to grab it, the gun fired. Calantiao and
Reyes were then handcuffed and were brought to the police station. Thereat, they were subjected
to body frisking and their wallets and money were taken. PO1 Mariano then prepared some
documents and informed them that they will be charged for drugs. A newspaper containing
marijuana was shown to them and said police officer told them that it would be sufficient
evidence against them. They were detained and subjected to medical examination before they
were submitted for inquest at the prosecutors office.4

Ruling of the RTC

On July 23, 2009, the RTC rendered its Decision giving credence to the prosecutions case. The
dispositive portion of the Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring accused MEDARIO

CALANTIAO y DIMALANTA, GUILTY BEYOND REASONABLE DOUBT of the offense of
Violation of Section 11, Article II, R.A. 9165, for illegally possessing997.9 grams of marijuana
fruiting tops. Henceforth, this Court hereby sentences him to suffer the penalty of life
imprisonment and a fine of Five Hundred Thousand Pesos (Php500,000.00).5

In convicting Calantiao, the RTC held that the illegal drug seized was admissible in evidence as
it was discovered during a body search after Calantiao was caught in flagrante delicto of
possessing a gun and firing at the police officers. Moreover, the RTC found all the elements of
the offense to have been duly established by the prosecution.6

Aggrieved, Calantiao appealed7 his conviction to the Court of Appeals, assigning the following
errors:

THE COURT A QUOGRAVELY ERRED IN FINDING THE ACCUSED-

APPELLANT GUILTY BEYOND REASONABLE DOUBT FOR VIOLATION OF
SECTION 11, ARTICLE II, REPUBLIC ACT NO. 9165, NOTWITHSTANDING THE
FACT THAT THE ALLEGEDLY SEIZED ITEMS ARE INADMISSIBLE IN
EVIDENCE.

II

THE COURT A QUOGRAVELY ERRED IN CONVICTING THE ACCUSED-

APPELLANT DESPITE THE ARRESTING OFFICERS PATENT NON-
COMPLIANCE WITHTHE REQUIREMENTS FOR THE PROPER CUSTODY OF
SEIZED DANGEROUS DRUGS.

III
 THE COURT A QUOGRAVELY ERRED IN CONVICTING THE ACCUSED-
APPELLANT DESPITE THE PROSECUTIONS FAILURE TO PROVE THE
PROPER CHAIN OF CUSTODY OF THE SEIZED DANGEROUS DRUGS.8

Ruling of the Court of Appeals

The Court of Appeals found no reason to overturn Calantiaos conviction. It found that there was
sufficient reason to justify a warrantless arrest, as the police officers were acting on a legitimate
complaint and had a reasonable suspicion that the persons identified at the scene were the
perpetrators of the offense. Likewise, the Court of Appeals held that the search and subsequent
seizure of the marijuana in question was lawful and valid, being incidental to a lawful arrest.9
Finding that all the elements of the charge of illegal possession of dangerous drugs to be present
and duly proven,10 the Court of Appeals, on January 17, 2012, promulgated its Decision,
affirming in toto the RTCs ruling.

Undaunted, Calantiao is now before this Court praying for an acquittal, adding the following
arguments in support of his position:

First, the plain view doctrine is not an exception to a search incident to a valid warrantless arrest.

xxxx

Second, Calantiao did not waive the inadmissibility of the seized items.

xxxx

Finally, the seized items custodial chain is broken.11

In essence, Calantiao is questioning the admissibility of the marijuana found in his possession, as
evidence against him on the grounds of either it was discovered via an illegal search, or because
its custodial chain was broken.

Ruling of this Court

This Court finds no merit in Calantiaos arguments.

Search and Seizure of

Marijuana valid

This Court cannot subscribe to Calantiaos contention that the marijuana in his possession cannot
be admitted as evidence against him because it was illegally discovered and seized, not having
been within the apprehending officers "plain view."12

Searches and seizure incident to a lawful arrest are governed by Section 13, Rule 126 of the
Revised Rules of Criminal Procedure, to wit:
Section 13.Search incident to lawful arrest. A person lawfully arrested may be searched for
dangerous weapons or anything which may have been used or constitute proof in the commission
of an offense without a search warrant.

The purpose of allowing a warrantless search and seizure incident to a lawful arrest is "to protect
the arresting officer from being harmed by the person arrested, who might be armed with a
concealed weapon, and to prevent the latter from destroying evidence within reach."13 It is
therefore a reasonable exercise of the States police power to protect (1) law enforcers from the
injury that may be inflicted on them by a person they have lawfully arrested; and (2) evidence
from being destroyed by the arrestee. It seeks to ensure the safety of the arresting officers and the
integrity of the evidence under the control and within the reach of the arrestee.

In People v. Valeroso,14 this Court had the occasion to reiterate the permissible reach of a valid
warrantless search and seizure incident to a lawful arrest, viz:

When an arrest is made, it is reasonable for the arresting officer to search the person arrested in
order to remove any weapon that the latter might use in order to resist arrest or effect his escape.
Otherwise, the officers safety might well be endangered, and the arrest itself frustrated. In
addition, it is entirely reasonable for the arresting officer to search for and seize any evidence on
the arrestees person in order to prevent its concealment or destruction.

Moreover, in lawful arrests, it becomes both the duty and the right of the apprehending officers
to conduct a warrantless search not only on the person of the suspect, but also in the permissible
area within the latters reach. Otherwise stated, a valid arrest allows the seizure of evidence or
dangerous weapons either on the person of the one arrested or within the area of his immediate
control. The phrase "within the area of his immediate control" means the area from within which
he might gain possession of a weapon or destructible evidence. A gun on a table or in a drawer in
front of one who is arrested can be as dangerous to the arresting officer as one concealed in the
clothing of the person arrested. (Citations omitted.)

In Valeroso, however, the Court held that the evidence searched and seized from him could not
be used against him because they were discovered in a room, different from where he was being
detained, and was in a locked cabinet. Thus, the area searched could not be considered as one
within his immediate control that he could take any weapon or destroy any evidence against
him.15

In the case at bar, the marijuana was found in a black bag in Calantiaos possession and within
his immediate control. He could have easily taken any weapon from the bag or dumped it to
destroy the evidence inside it. As the black bag containing the marijuana was in Calantiaos
possession, it was within the permissible area that the apprehending officers could validly
conduct a warrantless search.

Calantiaos argument that the marijuana cannot be used as evidence against him because its
discovery was in violation of the Plain View Doctrine, is misplaced.
The Plain View Doctrine is actually the exception to the inadmissibility of evidence obtained in a
warrantless search incident to a lawful arrest outside the suspects person and premises under his
immediate control. This is so because "[o]bjects in the plain view of an officer who has the
right to be in the position to have that view are subject to seizure and may be presented as
evidence."16 "The doctrine is usually applied where a police officer is not searching for evidence
against the accused, but nonetheless inadvertently comes across an incriminating object x x x.
[It] serves to supplement the prior justification whether it be a warrant for another object, hot
pursuit, search incident to lawful arrest, or some other legitimate reason for being present
unconnected with a search directed against the accused and permits the warrantless seizure."17

The Plain View Doctrine thus finds no applicability in Calantiaos situation because the police
officers purposely searched him upon his arrest. The police officers did not inadvertently come
across the black bag, which was in Calantiaos possession; they deliberately opened it, as part of
the search incident to Calantiaos lawful arrest.

Inventory and Chain of

Custody of Evidence

Calantiao claims that even if the search and seizure were validly effected, the marijuana is still
inadmissible as evidence against him for failure of the apprehending officers to comply with the
rules on chain of custody, as the item was marked at the police station.18

The pertinent provisions of Republic Act No. 9165 provide as follows:

Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous
Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and
have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition in the following manner:

(1) The apprehending team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the same
in the presence of the accused or the person/s from whom such items were confiscated
and/or seized, or his/her representative or counsel, a representative from the media and
the Department of Justice (DOJ), and any elected public official who shall be required to
sign the copies of the inventory and be given a copy thereof[.]

Its Implementing Rules and Regulations state:

SECTION 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous
Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and
have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition in the following manner:
 (a) The apprehending officer/team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the same
in the presence of the accused or the person/s from whom such items were confiscated
and/or seized, or his/her representative or counsel, a representative from the media and
the Department of Justice (DOJ), and any elected public official who shall be required to
sign the copies of the inventory and be given a copy thereof; Provided, that the physical
inventory and photograph shall be conducted at the place where the search warrant is
served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further,
that non-compliance with these requirements under justifiable grounds, as long as the
integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody
over said items[.] (Emphasis supplied.)

This Court has held that the failure to strictly comply with Section 21, Article II of Republic Act
No. 9165, such as immediately marking seized drugs, will not automatically impair the integrity
of chain of custody because what is of utmost importance is the preservation of the integrity and
the evidentiary value of the seized items, as these would be utilized in the determination of the
guilt or innocence of the accused.19

Section 21 and its IRR do not even mention "marking." What they require are (1) physical
inventory, and (2) taking of photographs. As this Court held in People v. Ocfemia20:

What Section 21 of R.A. No. 9165 and its implementing rule do not expressly specify is the
matter of "marking" of the seized items in warrantless seizures to ensure that the evidence seized
upon apprehension is the same evidence subjected to inventory and photography when these
activities are undertaken at the police station rather than at the place of arrest. Consistency with
the "chain of custody" rule requires that the "marking" of the seized items to truly ensure that
they are the same items that enter the chain and are eventually the ones offered in evidence
should be done (1) in the presence of the apprehended violator (2) immediately upon
confiscation.

The prosecution was able to establish the chain of custody of the seized marijuana from the time
the police officers confiscated it, to the time it was turned over to the investigating officer, up to
the time it was brought to the forensic chemist for laboratory examination.21 This Court has no
reason to overrule the RTC and the Court of Appeals, which both found the chain of custody of
the seized drugs to have not been broken so as to render the marijuana seized from Calantiao
inadmissible in evidence.

Furthermore, unless it can be shown that there was bad faith, ill will, or tampering of the
evidence, the presumption that the integrity of the evidence has been preserved will remain. The
burden of showing the foregoing to overcome the presumption that the police officers handled
the seized drugs with regularity, and that they properly discharged their duties is on Calantiao.
Unfortunately, Calantiao failed to discharge such burden.22
It is worthy to note that these arguments were only raised by Calantiao on his appeal. He himself
admits this.23 His theory, from the very beginning, was that he did not do it, and that he was
being framed for having offended the police officers. Simply put, his defense tactic was one of
denial and frame-up. However, those defenses have always been frowned upon by the Court, to
wit:

The defenses of denial and frame-up have been invariably viewed by this Court with disfavor for
it can easily be concocted and is a common and standard defense ploy in prosecutions for
violation of Dangerous Drugs Act. In order to prosper, the defenses of denial and frame-up must
be proved with strong and convincing evidence. In the cases before us, appellant failed to present
sufficient evidence in support of his claims. Aside from his self-serving assertions, no plausible
proof was presented to bolster his allegations.24

Hence, as Calantiao failed to show clear and convincing evidence that the apprehending officers
were stirred by illicit motive or failed to properly perform their duties, their testimonies deserve
full faith and credit.25

WHEREFORE, premises considered, the Court hereby AFFIRMS the January 17, 2012 Decision
of the Court of Appeals in CA-G.R. CR.-H.C. No. 04069.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

2. Documentary Evidence

Sps. Silos vs Philippine National Bank

SECOND DIVISION

G.R. No. 181045 July 2, 2014

SPOUSES EDUARDO and LYDIA SILOS, Petitioners,

vs.
PHILIPPINE NATIONAL BANK, Respondent.

DECISION

DEL CASTILLO, J.:

In loan agreements, it cannot be denied that the rate of interest is a principal condition, if not the
most important component. Thus, any modification thereof must be mutually agreed upon;
otherwise, it has no binding effect. Moreover, the Court cannot consider a stipulation granting a
party the option to prepay the loan if said party is not agreeable to the arbitrary interest rates
imposed. Premium may not be placed upon a stipulation in a contract which grants one party the
right to choose whether to continue with or withdraw from the agreement if it discovers that what
the other party has been doing all along is improper or illegal.

This Petition for Review on Certiorari1 questions the May 8, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. CV No. 79650, which affirmed with modifications the February 28,
2003 Decision3 and the June 4, 2003 Order4 of the Regional Trial Court (RTC), Branch 6 of
Kalibo, Aklan in Civil Case No. 5975.

Factual Antecedents

Spouses Eduardo and Lydia Silos (petitioners) have been in business for about two decades of
operating a department store and buying and selling of ready-to-wear apparel. Respondent
Philippine National Bank (PNB) is a banking corporation organized and existing under
Philippine laws.

To secure a one-year revolving credit line of P150,000.00 obtained from PNB, petitioners
constituted in August 1987 a Real Estate Mortgage5 over a 370-square meter lot in Kalibo,
Aklan covered by Transfer Certificate of Title No. (TCT) T-14250. In July 1988,the credit line
was increased to P1.8 million and the mortgage was correspondingly increased to P1.8 million.6

And in July 1989, a Supplement to the Existing Real Estate Mortgage7 was executed to cover the
same credit line, which was increased to P2.5 million, and additional security was given in the
form of a 134-square meter lot covered by TCT T-16208. In addition, petitioners issued eight
Promissory Notes8 and signed a Credit Agreement.9 This July 1989 Credit Agreement contained
a stipulation on interest which provides as follows:

1.03. Interest. (a) The Loan shall be subject to interest at the rate of 19.5% per annum. Interest
shall be payable in advance every one hundred twenty days at the rate prevailing at the time of
the renewal.

(b) The Borrower agrees that the Bank may modify the interest rate in the Loan depending on
whatever policy the Bank may adopt in the future, including without limitation, the shifting from
the floating interest rate system to the fixed interest rate system, or vice versa. Where the Bank
has imposed on the Loan interest at a rate per annum, which is equal to the Banks spread over
the current floating interest rate, the Borrower hereby agrees that the Bank may, without need of
notice to the Borrower, increase or decrease its spread over the floating interest rate at any time
depending on whatever policy it may adopt in the future.10 (Emphases supplied)

The eight Promissory Notes, on the other hand, contained a stipulation granting PNB the right to
increase or reduce interest rates "within the limits allowed by law or by the Monetary Board."11

The Real Estate Mortgage agreement provided the same right to increase or reduce interest rates
"at any time depending on whatever policy PNB may adopt in the future."12

Petitioners religiously paid interest on the notes at the following rates:

 1. 1st Promissory Note dated July 24, 1989 19.5%;

2. 2nd Promissory Note dated November 22, 1989 23%;

3. 3rd Promissory Note dated March 21, 1990 22%;

4. 4th Promissory Note dated July 19, 1990 24%;

5. 5th Promissory Note dated December 17, 1990 28%;

6. 6th Promissory Note dated February 14, 1991 32%;

7. 7th Promissory Note dated March 1, 1991 30%; and

8. 8th Promissory Note dated July 11, 1991 24%.13

In August 1991, an Amendment to Credit Agreement14 was executed by the parties, with the
following stipulation regarding interest:

1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on each Availment
from date of each Availment up to but not including the date of full payment thereof at the rate
per annum which is determined by the Bank to be prime rate plus applicable spread in effect as
of the date of each Availment.15 (Emphases supplied)

Under this Amendment to Credit Agreement, petitioners issued in favor of PNB the following 18
Promissory Notes, which petitioners settled except the last (the note covering the principal) at
the following interest rates:

1. 9th Promissory Note dated November 8, 1991 26%;

2. 10th Promissory Note dated March 19, 1992 25%;

3. 11th Promissory Note dated July 11, 1992 23%;

4. 12th Promissory Note dated November 10, 1992 21%;

5. 13th Promissory Note dated March 15, 1993 21%;

6. 14th Promissory Note dated July 12, 1993 17.5%;

7. 15th Promissory Note dated November 17, 1993 21%;

8. 16th Promissory Note dated March 28, 1994 21%;

9. 17th Promissory Note dated July 13, 1994 21%;

 10. 18th Promissory Note dated November 16, 1994 16%;

11. 19th Promissory Note dated April 10, 1995 21%;

12. 20th Promissory Note dated July 19, 1995 18.5%;

13. 21st Promissory Note dated December 18, 1995 18.75%;

14. 22nd Promissory Note dated April 22, 1996 18.5%;

15. 23rd Promissory Note dated July 22, 1996 18.5%;

16. 24th Promissory Note dated November 25, 1996 18%;

17. 25th Promissory Note dated May 30, 1997 17.5%; and

18. 26th Promissory Note (PN 9707237) dated July 30, 1997 25%.16

The 9th up to the 17th promissory notes provide for the payment of interest at the "rate the Bank
may at any time without notice, raise within the limits allowed by law x x x."17

On the other hand, the 18th up to the 26th promissory notes including PN 9707237, which is
the 26th promissory note carried the following provision:

x x x For this purpose, I/We agree that the rate of interest herein stipulated may be increased or
decreased for the subsequent Interest Periods, with prior notice to the Borrower in the event of
changes in interest rate prescribed by law or the Monetary Board of the Central Bank of the
Philippines, or in the Banks overall cost of funds. I/We hereby agree that in the event I/we are
not agreeable to the interest rate fixed for any Interest Period, I/we shall have the option top
repay the loan or credit facility without penalty within ten (10) calendar days from the Interest
Setting Date.18 (Emphasis supplied)

Respondent regularly renewed the line from 1990 up to 1997, and petitioners made good on the
promissory notes, religiously paying the interests without objection or fail. But in 1997,
petitioners faltered when the interest rates soared due to the Asian financial crisis. Petitioners
sole outstanding promissory note for P2.5 million PN 9707237 executed in July 1997 and due
120 days later or on October 28, 1997 became past due, and despite repeated demands,
petitioners failed to make good on the note.

Incidentally, PN 9707237 provided for the penalty equivalent to 24% per annum in case of
default, as follows:

Without need for notice or demand, failure to pay this note or any installment thereon, when due,
shall constitute default and in such cases or in case of garnishment, receivership or bankruptcy or
suit of any kind filed against me/us by the Bank, the outstanding principal of this note, at the
option of the Bank and without prior notice of demand, shall immediately become due and
payable and shall be subject to a penalty charge of twenty four percent (24%) per annum based
on the defaulted principal amount. x x x19 (Emphasis supplied)

PNB prepared a Statement of Account20 as of October 12, 1998, detailing the amount due and
demandable from petitioners in the total amount of P3,620,541.60, broken down as follows:

Principal P 2,500,000.00

Interest 538,874.94

Penalties 581,666.66

Total P 3,620,541.60

Despite demand, petitioners failed to pay the foregoing amount. Thus, PNB foreclosed on the
mortgage, and on January 14, 1999, TCTs T-14250 and T-16208 were sold to it at auction for the
amount of P4,324,172.96.21 The sheriffs certificate of sale was registered on March 11, 1999.

More than a year later, or on March 24, 2000, petitioners filed Civil Case No. 5975, seeking
annulment of the foreclosure sale and an accounting of the PNB credit. Petitioners theorized that
after the first promissory note where they agreed to pay 19.5% interest, the succeeding
stipulations for the payment of interest in their loan agreements with PNB which allegedly left
to the latter the sole will to determine the interest rate became null and void. Petitioners added
that because the interest rates were fixed by respondent without their prior consent or agreement,
these rates are void, and as a result, petitioners should only be made liable for interest at the legal
rate of 12%. They claimed further that they overpaid interests on the credit, and concluded that
due to this overpayment of steep interest charges, their debt should now be deemed paid, and the
foreclosure and sale of TCTs T-14250 and T-16208 became unnecessary and wrongful. As for
the imposed penalty of P581,666.66, petitioners alleged that since the Real Estate Mortgage and
the Supplement thereto did not include penalties as part of the secured amount, the same should
be excluded from the foreclosure amount or bid price, even if such penalties are provided for in
the final Promissory Note, or PN 9707237.22

In addition, petitioners sought to be reimbursed an alleged overpayment of P848,285.00 made

during the period August 21, 1991 to March 5, 1998,resulting from respondents imposition of
the alleged illegal and steep interest rates. They also prayed to be awarded P200,000.00 by way
of attorneys fees.23

In its Answer,24 PNB denied that it unilaterally imposed or fixed interest rates; that petitioners
agreed that without prior notice, PNB may modify interest rates depending on future policy
adopted by it; and that the imposition of penalties was agreed upon in the Credit Agreement. It
added that the imposition of penalties is supported by the all-inclusive clause in the Real Estate
Mortgage agreement which provides that the mortgage shall stand as security for any and all
other obligations of whatever kind and nature owing to respondent, which thus includes penalties
imposed upon default or non-payment of the principal and interest on due date.

On pre-trial, the parties mutually agreed to the following material facts, among others:

a) That since 1991 up to 1998, petitioners had paid PNB the total amount of
P3,484,287.00;25 and

b) That PNB sent, and petitioners received, a March 10, 2000 demand letter.26

During trial, petitioner Lydia Silos (Lydia) testified that the Credit Agreement, the Amendment
to Credit Agreement, Real Estate Mortgage and the Supplement thereto were all prepared by
respondent PNB and were presented to her and her husband Eduardo only for signature; that she
was told by PNB that the latter alone would determine the interest rate; that as to the Amendment
to Credit Agreement, she was told that PNB would fill up the interest rate portion thereof; that at
the time the parties executed the said Credit Agreement, she was not informed about the
applicable spread that PNB would impose on her account; that the interest rate portion of all
Promissory Notes she and Eduardo issued were always left in blank when they executed them,
with respondents mere assurance that it would be the one to enter or indicate thereon the
prevailing interest rate at the time of availment; and that they agreed to such arrangement. She
further testified that the two Real Estate Mortgage agreements she signed did not stipulate the
payment of penalties; that she and Eduardo consulted with a lawyer, and were told that PNBs
actions were improper, and so on March 20, 2000, they wrote to the latter seeking a
recomputation of their outstanding obligation; and when PNB did not oblige, they instituted Civil
Case No. 5975.27

On cross-examination, Lydia testified that she has been in business for 20 years; that she also
borrowed from other individuals and another bank; that it was only with banks that she was
asked to sign loan documents with no indicated interest rate; that she did not bother to read the
terms of the loan documents which she signed; and that she received several PNB statements of
account detailing their outstanding obligations, but she did not complain; that she assumed
instead that what was written therein is correct.28

For his part, PNB Kalibo Branch Manager Diosdado Aspa, Jr. (Aspa), the sole witness for
respondent, stated on cross-examination that as a practice, the determination of the prime rates of
interest was the responsibility solely of PNBs Treasury Department which is based in Manila;
that these prime rates were simply communicated to all PNB branches for implementation; that
there are a multitude of considerations which determine the interest rate, such as the cost of
money, foreign currency values, PNBs spread, bank administrative costs, profitability, and the
practice in the banking industry; that in every repricing of each loan availment, the borrower has
the right to question the rates, but that this was not done by the petitioners; and that anything that
is not found in the Promissory Note may be supplemented by the Credit Agreement.29

Ruling of the Regional Trial Court

On February 28, 2003, the trial court rendered judgment dismissing Civil Case No. 5975.30
It ruled that:

1. While the Credit Agreement allows PNB to unilaterally increase its spread over the
floating interest rate at any time depending on whatever policy it may adopt in the future,
it likewise allows for the decrease at any time of the same. Thus, such stipulation
authorizing both the increase and decrease of interest rates as may be applicable is
valid,31 as was held in Consolidated Bank and Trust Corporation (SOLIDBANK) v.
Court of Appeals;32

2. Banks are allowed to stipulate that interest rates on loans need not be fixed and instead
be made dependent on prevailing rates upon which to peg such variable interest rates;33

3. The Promissory Note, as the principal contract evidencing petitioners loan, prevails
over the Credit Agreement and the Real Estate Mortgage.

As such, the rate of interest, penalties and attorneys fees stipulated in the Promissory
Note prevail over those mentioned in the Credit Agreement and the Real Estate Mortgage
agreements;34

4. Roughly, PNBs computation of the total amount of petitioners obligation is

correct;35

5. Because the loan was admittedly due and demandable, the foreclosure was regularly
made;36

6. By the admission of petitioners during pre-trial, all payments made to PNB were
properly applied to the principal, interest and penalties.37

The dispositive portion of the trial courts Decision reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the respondent and
against the petitioners by DISMISSING the latters petition.

Costs against the petitioners.

SO ORDERED.38

Petitioners moved for reconsideration. In an Order39 dated June 4, 2003, the trial court granted
only a modification in the award of attorneys fees, reducing the same from 10% to 1%. Thus,
PNB was ordered to refund to petitioner the excess in attorneys fees in the amount of
P356,589.90, viz:

WHEREFORE, judgment is hereby rendered upholding the validity of the interest rate charged
by the respondent as well as the extra-judicial foreclosure proceedings and the Certificate of
Sale. However, respondent is directed to refund to the petitioner the amount of P356,589.90
representing the excess interest charged against the latter.
No pronouncement as to costs.

SO ORDERED.40

Ruling of the Court of Appeals

Petitioners appealed to the CA, which issued the questioned Decision with the following decretal
portion:

WHEREFORE, in view of the foregoing, the instant appeal is PARTLY GRANTED. The
modified Decision of the Regional Trial Court per Order dated June 4, 2003 is hereby
AFFIRMED with MODIFICATIONS, to wit:

1. [T]hat the interest rate to be applied after the expiration of the first 30-day interest
period for PN. No. 9707237 should be 12% per annum;

2. [T]hat the attorneys fees of10% is valid and binding; and

3. [T]hat [PNB] is hereby ordered to reimburse [petitioners] the excess in the bid price of
P377,505.99 which is the difference between the total amount due [PNB] and the amount
of its bid price.

SO ORDERED.41

On the other hand, respondent did not appeal the June 4,2003 Order of the trial court which
reduced its award of attorneys fees. It simply raised the issue in its appellees brief in the CA,
and included a prayer for the reversal of said Order.

In effect, the CA limited petitioners appeal to the following issues:

1) Whether x x x the interest rates on petitioners outstanding obligation were unilaterally

and arbitrarily imposed by PNB;

2) Whether x x x the penalty charges were secured by the real estate mortgage; and

3) Whether x x x the extrajudicial foreclosure and sale are valid.42

The CA noted that, based on receipts presented by petitioners during trial, the latter dutifully
paid a total of P3,027,324.60 in interest for the period August 7, 1991 to August 6, 1997, over
and above the P2.5 million principal obligation. And this is exclusive of payments for insurance
premiums, documentary stamp taxes, and penalty. All the while, petitioners did not complain nor
object to the imposition of interest; they in fact paid the same religiously and without fail for
seven years. The appellate court ruled that petitioners are thus estopped from questioning the
same.
The CA nevertheless noted that for the period July 30, 1997 to August 14, 1997, PNB wrongly
applied an interest rate of 25.72% instead of the agreed 25%; thus it overcharged petitioners, and
the latter paid, an excess of P736.56 in interest.

On the issue of penalties, the CA ruled that the express tenor of the Real Estate Mortgage
agreements contemplated the inclusion of the PN 9707237-stipulated 24% penalty in the amount
to be secured by the mortgaged property, thus

For and in consideration of certain loans, overdrafts and other credit accommodations obtained
from the MORTGAGEE and to secure the payment of the same and those others that the
MORTGAGEE may extend to the MORTGAGOR, including interest and expenses, and other
obligations owing by the MORTGAGOR to the MORTGAGEE, whether direct or indirect,
principal or secondary, as appearing in the accounts, books and records of the MORTGAGEE,
the MORTGAGOR does hereby transfer and convey by way of mortgage unto the
MORTGAGEE x x x43 (Emphasis supplied)

The CA believes that the 24% penalty is covered by the phrase "and other obligations owing by
the mortgagor to the mortgagee" and should thus be added to the amount secured by the
mortgages.44

The CA then proceeded to declare valid the foreclosure and sale of properties covered by TCTs
T-14250 and T-16208, which came as a necessary result of petitioners failure to pay the
outstanding obligation upon demand.45 The CA saw fit to increase the trial courts award of 1%
to 10%, finding the latter rate to be reasonable and citing the Real Estate Mortgage agreement
which authorized the collection of the higher rate.46

Finally, the CA ruled that petitioners are entitled to P377,505.09 surplus, which is the difference
between PNBs bid price of P4,324,172.96 and petitioners total computed obligation as of
January 14, 1999, or the date of the auction sale, in the amount of P3,946,667.87.47

Hence, the present Petition.

Issues

The following issues are raised in this Petition:

A. THE COURT OF APPEALS AS WELL AS THE LOWER COURT ERRED IN NOT

NULLIFYING THE INTEREST RATE PROVISION IN THE CREDIT AGREEMENT
DATED JULY 24, 1989 X X X AND IN THE AMENDMENT TO CREDIT
AGREEMENT DATEDAUGUST 21, 1991 X X X WHICH LEFT TO THE SOLE
UNILATERAL DETERMINATION OF THE RESPONDENT PNB THE ORIGINAL
FIXING OF INTEREST RATE AND ITS INCREASE, WHICH AGREEMENT IS
CONTRARY TO LAW, ART. 1308 OF THE [NEW CIVIL CODE], AS ENUNCIATED
IN PONCIANO ALMEIDA V. COURT OF APPEALS,G.R. [NO.] 113412, APRIL 17,
 1996, AND CONTRARY TO PUBLIC POLICY AND PUBLIC INTEREST, AND IN
APPLYING THE PRINCIPLE OF ESTOPPEL ARISING FROM THE ALLEGED
DELAYED COMPLAINT OF PETITIONER[S], AND [THEIR] PAYMENT OF THE
INTEREST CHARGED.

B. CONSEQUENTLY, THE COURT OF APPEALS AND THE LOWER COURT

ERRED IN NOT DECLARING THAT PNB IS NOT AT ALL ENTITLED TO ANY
INTEREST EXCEPT THE LEGAL RATE FROM DATE OF DEMAND, AND IN NOT
APPLYING THE EXCESS OVER THE LEGAL RATE OF THE ADMITTED
PAYMENTS MADE BY PETITIONER[S] FROM 1991-1998 IN THE ADMITTED
TOTAL AMOUNT OF P3,484,287.00, TO PAYMENT OF THE PRINCIPAL OF
P2,500,000.[00] LEAVING AN OVERPAYMENT OFP984,287.00 REFUNDABLE BY
RESPONDENT TO PETITIONER[S] WITH INTEREST OF 12% PER ANNUM.

II

THE COURT OF APPEALS AND THE LOWER COURT ERRED IN HOLDING THAT
PENALTIES ARE INCLUDEDIN THE SECURED AMOUNT, SUBJECT TO
FORECLOSURE, WHEN NO PENALTIES ARE MENTIONED [NOR] PROVIDED FOR IN
THE REAL ESTATE MORTGAGE AS A SECURED AMOUNT AND THEREFORE THE
AMOUNT OF PENALTIES SHOULDHAVE BEEN EXCLUDED FROM [THE]
FORECLOSURE AMOUNT.

III

THE COURT OF APPEALS ERRED IN REVERSING THE RULING OF THE LOWER

COURT, WHICH REDUCED THE ATTORNEYS FEES OF 10% OF THE TOTAL
INDEBTEDNESS CHARGED IN THE X X X EXTRAJUDICIAL FORECLOSURE TOONLY
1%, AND [AWARDING] 10% ATTORNEYS FEES.48

Petitioners Arguments

Petitioners insist that the interest rate provision in the Credit Agreement and the Amendment to
Credit Agreement should be declared null and void, for they relegated to PNB the sole power to
fix interest rates based on arbitrary criteria or factors such as bank policy, profitability, cost of
money, foreign currency values, and bank administrative costs; spaces for interest rates in the
two Credit Agreements and the promissory notes were left blank for PNB to unilaterally fill, and
their consent or agreement to the interest rates imposed thereafter was not obtained; the interest
rate, which consists of the prime rate plus the bank spread, is determined not by agreement of the
parties but by PNBs Treasury Department in Manila. Petitioners conclude that by this method of
fixing the interest rates, the principle of mutuality of contracts is violated, and public policy as
well as Circular 90549 of the then Central Bank had been breached.

Petitioners question the CAs application of the principle of estoppel, saying that no estoppel can
proceed from an illegal act. Though they failed to timely question the imposition of the alleged
illegal interest rates and continued to pay the loan on the basis of these rates, they cannot be
deemed to have acquiesced, and hence could recover what they erroneously paid.50

Petitioners argue that if the interest rates were nullified, then their obligation to PNB is deemed
extinguished as of July 1997; moreover, it would appear that they even made an over payment to
the bank in the amount of P984,287.00.

Next, petitioners suggest that since the Real Estate Mortgage agreements did not include nor
specify, as part of the secured amount, the penalty of 24% authorized in PN 9707237, such
amount of P581,666.66 could not be made answerable by or collected from the mortgages
covering TCTs T-14250 and T-16208. Claiming support from Philippine Bank of
Communications [PBCom] v. Court of Appeals,51 petitioners insist that the phrase "and other
obligations owing by the mortgagor to the mortgagee"52 in the mortgage agreements cannot
embrace the P581,666.66 penalty, because, as held in the PBCom case, "[a] penalty charge does
not belong to the species of obligations enumerated in the mortgage, hence, the said contract
cannot be understood to secure the penalty";53 while the mortgages are the accessory contracts,
what items are secured may only be determined from the provisions of the mortgage contracts,
and not from the Credit Agreement or the promissory notes.

Finally, petitioners submit that the trial courts award of 1% attorneys fees should be
maintained, given that in foreclosures, a lawyers work consists merely in the preparation and
filing of the petition, and involves minimal study.54 To allow the imposition of a staggering
P396,211.00 for such work would be contrary to equity. Petitioners state that the purpose of
attorneys fees in cases of this nature "is not to give respondent a larger compensation for the
loan than the law already allows, but to protect it against any future loss or damage by being
compelled to retain counsel x x x to institute judicial proceedings for the collection of its
credit."55 And because the instant case involves a simple extrajudicial foreclosure, attorneys
fees may be equitably tempered.

Respondents Arguments

For its part, respondent disputes petitioners claim that interest rates were unilaterally fixed by it,
taking relief in the CA pronouncement that petitioners are deemed estopped by their failure to
question the imposed rates and their continued payment thereof without opposition. It adds that
because the Credit Agreement and promissory notes contained both an escalation clause and a
de-escalation clause, it may not be said that the bank violated the principle of mutuality. Besides,
the increase or decrease in interest rates have been mutually agreed upon by the parties, as shown
by petitioners continuous payment without protest. Respondent adds that the alleged unilateral
imposition of interest rates is not a proper subject for review by the Court because the issue was
never raised in the lower court.

As for petitioners claim that interest rates imposed by it are null and void for the reasons that 1)
the Credit Agreements and the promissory notes were signed in blank; 2) interest rates were at
short periods; 3) no interest rates could be charged where no agreement on interest rates was
made in writing; 4) PNB fixed interest rates on the basis of arbitrary policies and standards left to
its choosing; and 5) interest rates based on prime rate plus applicable spread are indeterminate
and arbitrary PNB counters:

a. That Credit Agreements and promissory notes were signed by petitioner[s] in blank
Respondent claims that this issue was never raised in the lower court. Besides,
documentary evidence prevails over testimonial evidence; Lydia Silos testimony in this
regard is self-serving, unsupported and uncorroborated, and for being the lone evidence
on this issue. The fact remains that these documents are in proper form, presumed
regular, and endure, against arbitrary claims by Silos who is an experienced business
person that she signed questionable loan documents whose provisions for interest rates
were left blank, and yet she continued to pay the interests without protest for a number of
years.56

b. That interest rates were at short periods Respondent argues that the law which
governs and prohibits changes in interest rates made more than once every twelve months
has been removed57 with the issuance of Presidential Decree No. 858.58

c. That no interest rates could be charged where no agreement on interest rates was made
in writing in violation of Article 1956 of the Civil Code, which provides that no interest
shall be due unless it has been expressly stipulated in writing Respondent insists that
the stipulated 25% per annum as embodied in PN 9707237 should be imposed during the
interim, or the period after the loan became due and while it remains unpaid, and not the
legal interest of 12% as claimed by petitioners.59

d. That PNB fixed interest rates on the basis of arbitrary policies and standards left to its
choosing According to respondent, interest rates were fixed taking into consideration
increases or decreases as provided by law or by the Monetary Board, the banks overall
costs of funds, and upon agreement of the parties.60

e. That interest rates based on prime rate plus applicable spread are indeterminate and
arbitrary On this score, respondent submits there are various factors that influence
interest rates, from political events to economic developments, etc.; the cost of money,
profitability and foreign currency transactions may not be discounted.61

On the issue of penalties, respondent reiterates the trial courts finding that during pre-trial,
petitioners admitted that the Statement of Account as of October 12, 1998 which detailed and
included penalty charges as part of the total outstanding obligation owing to the bank was
correct. Respondent justifies the imposition and collection of a penalty as a normal banking
practice, and the standard rate per annum for all commercial banks, at the time, was 24%.

Respondent adds that the purpose of the penalty or a penal clause for that matter is to ensure the
performance of the obligation and substitute for damages and the payment of interest in the event
of non-compliance.62 And the promissory note being the principal agreement as opposed to
the mortgage, which is a mere accessory should prevail. This being the case, its inclusion as
part of the secured amount in the mortgage agreements is valid and necessary.
Regarding the foreclosure of the mortgages, respondent accuses petitioners of pre-empting
consolidation of its ownership over TCTs T-14250 and T-16208; that petitioners filed Civil Case
No. 5975 ostensibly to question the foreclosure and sale of properties covered by TCTs T-14250
and T-16208 in a desperate move to retain ownership over these properties, because they failed
to timely redeem them.

Respondent directs the attention of the Court to its petition in G.R. No. 181046,63 where the
propriety of the CAs ruling on the following issues is squarely raised:

1. That the interest rate to be applied after the expiration of the first 30-day interest period
for PN 9707237 should be 12% per annum; and

2. That PNB should reimburse petitioners the excess in the bid price of P377,505.99
which is the difference between the total amount due to PNB and the amount of its bid
price.

Our Ruling

The Court grants the Petition.

Before anything else, it must be said that it is not the function of the Court to re-examine or re-
evaluate evidence adduced by the parties in the proceedings below. The rule admits of certain
well-recognized exceptions, though, as when the lower courts findings are not supported by the
evidence on record or are based on a misapprehension of facts, or when certain relevant and
undisputed facts were manifestly overlooked that, if properly considered, would justify a
different conclusion. This case falls within such exceptions.

The Court notes that on March 5, 2008, a Resolution was issued by the Courts First Division
denying respondents petition in G.R. No. 181046, due to late filing, failure to attach the required
affidavit of service of the petition on the trial court and the petitioners, and submission of a
defective verification and certification of non-forum shopping. On June 25, 2008, the Court
issued another Resolution denying with finality respondents motion for reconsideration of the
March 5, 2008 Resolution. And on August 15, 2008, entry of judgment was made. This thus
settles the issues, as above-stated, covering a) the interest rate or 12% per annum that applies
upon expiration of the first 30 days interest period provided under PN 9707237, and b)the CAs
decree that PNB should reimburse petitioner the excess in the bid price of P377,505.09.

It appears that respondents practice, more than once proscribed by the Court, has been carried
over once more to the petitioners. In a number of decided cases, the Court struck down
provisions in credit documents issued by PNB to, or required of, its borrowers which allow the
bank to increase or decrease interest rates "within the limits allowed by law at any time
depending on whatever policy it may adopt in the future." Thus, in Philippine National Bank v.
Court of Appeals,64 such stipulation and similar ones were declared in violation of Article
130865 of the Civil Code. In a second case, Philippine National Bank v. Court of Appeals,66 the
very same stipulations found in the credit agreement and the promissory notes prepared and
issued by the respondent were again invalidated. The Court therein said:
The Credit Agreement provided inter alia, that

(a) The BANK reserves the right to increase the interest rate within the limits allowed by law at
any time depending on whatever policy it may adopt in the future; Provided, that the interest rate
on this accommodation shall be correspondingly decreased in the event that the applicable
maximum interest is reduced by law or by the Monetary Board. In either case, the adjustment in
the interest rate agreed upon shall take effect on the effectivity date of the increase or decrease in
the maximum interest rate.

The Promissory Note, in turn, authorized the PNB to raise the rate of interest, at any time without
notice, beyond the stipulated rate of 12% but only "within the limits allowed by law."

The Real Estate Mortgage contract likewise provided that

(k) INCREASE OF INTEREST RATE: The rate of interest charged on the obligation secured by
this mortgage as well as the interest on the amount which may have been advanced by the
MORTGAGEE, in accordance with the provision hereof, shall be subject during the life of this
contract to such an increase within the rate allowed by law, as the Board of Directors of the
MORTGAGEE may prescribe for its debtors.

xxxx

In making the unilateral increases in interest rates, petitioner bank relied on the escalation clause
contained in their credit agreement which provides, as follows:

The Bank reserves the right to increase the interest rate within the limits allowed by law at any
time depending on whatever policy it may adopt in the future and provided, that, the interest rate
on this accommodation shall be correspondingly decreased in the event that the applicable
maximum interest rate is reduced by law or by the Monetary Board. In either case, the
adjustment in the interest rate agreed upon shall take effect on the effectivity date of the increase
or decrease in maximum interest rate.

This clause is authorized by Section 2 of Presidential Decree (P.D.) No. 1684 which further
amended Act No. 2655 ("The Usury Law"), as amended, thus:

Section 2. The same Act is hereby amended by adding a new section after Section 7, to read as
follows:

Sec. 7-a. Parties to an agreement pertaining to a loan or forbearance of money, goods or credits
may stipulate that the rate of interest agreed upon may be increased in the event that the
applicable maximum rate of interest is increased bylaw or by the Monetary Board; Provided,
That such stipulation shall be valid only if there is also a stipulation in the agreement that the rate
of interest agreed upon shall be reduced in the event that the applicable maximum rate of interest
is reduced by law or by the Monetary Board; Provided further, That the adjustment in the rate of
interest agreed upon shall take effect on or after the effectivity of the increase or decrease in the
maximum rate of interest.
Section 1 of P.D. No. 1684 also empowered the Central Banks Monetary Board to prescribe the
maximum rates of interest for loans and certain forbearances. Pursuant to such authority, the
Monetary Board issued Central Bank (C.B.) Circular No. 905, series of 1982, Section 5 of which
provides:

Sec. 5. Section 1303 of the Manual of Regulations (for Banks and Other Financial
Intermediaries) is hereby amended to read as follows:

Sec. 1303. Interest and Other Charges.

The rate of interest, including commissions, premiums, fees and other charges, on any loan, or
forbearance of any money, goods or credits, regardless of maturity and whether secured or
unsecured, shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as
amended.

P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to stipulate
freely regarding any subsequent adjustment in the interest rate that shall accrue on a loan or
forbearance of money, goods or credits. In fine, they can agree to adjust, upward or downward,
the interest previously stipulated. However, contrary to the stubborn insistence of petitioner
bank, the said law and circular did not authorize either party to unilaterally raise the interest rate
without the others consent.

It is basic that there can be no contract in the true sense in the absence of the element of
agreement, or of mutual assent of the parties. If this assent is wanting on the part of the one who
contracts, his act has no more efficacy than if it had been done under duress or by a person of
unsound mind.

Similarly, contract changes must be made with the consent of the contracting parties. The minds
of all the parties must meet as to the proposed modification, especially when it affects an
important aspect of the agreement. In the case of loan contracts, it cannot be gainsaid that the
rate of interest is always a vital component, for it can make or break a capital venture. Thus, any
change must be mutually agreed upon, otherwise, it is bereft of any binding effect.

We cannot countenance petitioner banks posturing that the escalation clause at bench gives it
unbridled right to unilaterally upwardly adjust the interest on private respondents loan. That
would completely take away from private respondents the right to assent to an important
modification in their agreement, and would negate the element of mutuality in contracts. In
Philippine National Bank v. Court of Appeals, et al., 196 SCRA 536, 544-545 (1991) we held

x x x The unilateral action of the PNB in increasing the interest rate on the private respondents
loan violated the mutuality of contracts ordained in Article 1308 of the Civil Code:

Art. 1308. The contract must bind both contracting parties; its validity or compliance cannot be
left to the will of one of them.
In order that obligations arising from contracts may have the force of law between the parties,
there must be mutuality between the parties based on their essential equality. A contract
containing a condition which makes its fulfillment dependent exclusively upon the uncontrolled
will of one of the contracting parties, is void . . . . Hence, even assuming that the . . . loan
agreement between the PNB and the private respondent gave the PNB a license (although in fact
there was none) to increase the interest rate at will during the term of the loan, that license would
have been null and void for being violative of the principle of mutuality essential in contracts. It
would have invested the loan agreement with the character of a contract of adhesion, where the
parties do not bargain on equal footing, the weaker partys (the debtor) participation being
reduced to the alternative "to take it or leave it" . . . . Such a contract is a veritable trap for the
weaker party whom the courts of justice must protect against abuse and imposition.67 (Emphases
supplied)

Then again, in a third case, Spouses Almeda v. Court of Appeals,68 the Court invalidated the
very same provisions in the respondents prepared Credit Agreement, declaring thus:

The binding effect of any agreement between parties to a contract is premised on two settled
principles: (1) that any obligation arising from contract has the force of law between the parties;
and (2) that there must be mutuality between the parties based on their essential equality. Any
contract which appears to be heavily weighed in favor of one of the parties so as to lead to an
unconscionable result is void. Any stipulation regarding the validity or compliance of the
contract which is left solely to the will of one of the parties, is likewise, invalid.

It is plainly obvious, therefore, from the undisputed facts of the case that respondent bank
unilaterally altered the terms of its contract with petitioners by increasing the interest rates on the
loan without the prior assent of the latter. In fact, the manner of agreement is itself explicitly
stipulated by the Civil Code when it provides, in Article 1956 that "No interest shall be due
unless it has been expressly stipulated in writing." What has been "stipulated in writing" from a
perusal of interest rate provision of the credit agreement signed between the parties is that
petitioners were bound merely to pay 21% interest, subject to a possible escalation or de-
escalation, when 1) the circumstances warrant such escalation or de-escalation; 2) within the
limits allowed by law; and 3) upon agreement.

Indeed, the interest rate which appears to have been agreed upon by the parties to the contract in
this case was the 21% rate stipulated in the interest provision. Any doubt about this is in fact
readily resolved by a careful reading of the credit agreement because the same plainly uses the
phrase "interest rate agreed upon," in reference to the original 21% interest rate. x x x

xxxx

Petitioners never agreed in writing to pay the increased interest rates demanded by respondent
bank in contravention to the tenor of their credit agreement. That an increase in interest rates
from 18% to as much as 68% is excessive and unconscionable is indisputable. Between 1981 and
1984, petitioners had paid an amount equivalent to virtually half of the entire principal
(P7,735,004.66) which was applied to interest alone. By the time the spouses tendered the
amount of P40,142,518.00 in settlement of their obligations; respondent bank was demanding
P58,377,487.00 over and above those amounts already previously paid by the spouses.

Escalation clauses are not basically wrong or legally objectionable so long as they are not solely
potestative but based on reasonable and valid grounds. Here, as clearly demonstrated above, not
only [are] the increases of the interest rates on the basis of the escalation clause patently
unreasonable and unconscionable, but also there are no valid and reasonable standards upon
which the increases are anchored.

xxxx

In the face of the unequivocal interest rate provisions in the credit agreement and in the law
requiring the parties to agree to changes in the interest rate in writing, we hold that the unilateral
and progressive increases imposed by respondent PNB were null and void. Their effect was to
increase the total obligation on an eighteen million peso loan to an amount way over three times
that which was originally granted to the borrowers. That these increases, occasioned by crafty
manipulations in the interest rates is unconscionable and neutralizes the salutary policies of
extending loans to spur business cannot be disputed.69 (Emphases supplied)

Still, in a fourth case, Philippine National Bank v. Court of Appeals,70 the above doctrine was
reiterated:

The promissory note contained the following stipulation:

For value received, I/we, [private respondents] jointly and severally promise to pay to the
ORDER of the PHILIPPINE NATIONAL BANK, at its office in San Jose City, Philippines, the
sum of FIFTEEN THOUSAND ONLY (P15,000.00), Philippine Currency, together with interest
thereon at the rate of 12% per annum until paid, which interest rate the Bank may at any time
without notice, raise within the limits allowed by law, and I/we also agree to pay jointly and
severally ____% per annum penalty charge, by way of liquidated damages should this note be
unpaid or is not renewed on due dated.

Payment of this note shall be as follows:

*THREE HUNDRED SIXTY FIVE DAYS* AFTER DATE

On the reverse side of the note the following condition was stamped:

All short-term loans to be granted starting January 1, 1978 shall be made subject to the condition
that any and/or all extensions hereof that will leave any portion of the amount still unpaid after
730 days shall automatically convert the outstanding balance into a medium or long-term
obligation as the case may be and give the Bank the right to charge the interest rates prescribed
under its policies from the date the account was originally granted.

To secure payment of the loan the parties executed a real estate mortgage contract which
provided:
(k) INCREASE OF INTEREST RATE:

The rate of interest charged on the obligation secured by this mortgage as well as the interest on
the amount which may have been advanced by the MORTGAGEE, in accordance with the
provision hereof, shall be subject during the life of this contract to such an increase within the
rate allowed by law, as the Board of Directors of the MORTGAGEE may prescribe for its
debtors.

xxxx

To begin with, PNBs argument rests on a misapprehension of the import of the appellate courts
ruling. The Court of Appeals nullified the interest rate increases not because the promissory note
did not comply with P.D. No. 1684 by providing for a de-escalation, but because the absence of
such provision made the clause so one-sided as to make it unreasonable.

That ruling is correct. It is in line with our decision in Banco Filipino Savings & Mortgage Bank
v. Navarro that although P.D. No. 1684 is not to be retroactively applied to loans granted before
its effectivity, there must nevertheless be a de-escalation clause to mitigate the one-sidedness of
the escalation clause. Indeed because of concern for the unequal status of borrowers vis--vis the
banks, our cases after Banco Filipino have fashioned the rule that any increase in the rate of
interest made pursuant to an escalation clause must be the result of agreement between the
parties.

Thus in Philippine National Bank v. Court of Appeals, two promissory notes authorized PNB to
increase the stipulated interest per annum" within the limits allowed by law at any time
depending on whatever policy [PNB] may adopt in the future; Provided, that the interest rate on
this note shall be correspondingly decreased in the event that the applicable maximum interest
rate is reduced by law or by the Monetary Board." The real estate mortgage likewise provided:

The rate of interest charged on the obligation secured by this mortgage as well as the interest on
the amount which may have been advanced by the MORTGAGEE, in accordance with the
provisions hereof, shall be subject during the life of this contract to such an increase within the
rate allowed by law, as the Board of Directors of the MORTGAGEE may prescribe for its
debtors.

Pursuant to these clauses, PNB successively increased the interest from 18% to 32%, then to
41% and then to 48%. This Court declared the increases unilaterally imposed by [PNB] to be in
violation of the principle of mutuality as embodied in Art.1308 of the Civil Code, which
provides that "[t]he contract must bind both contracting parties; its validity or compliance cannot
be left to the will of one of them." As the Court explained:

In order that obligations arising from contracts may have the force of law between the parties,
there must be mutuality between the parties based on their essential equality. A contract
containing a condition which makes its fulfillment dependent exclusively upon the uncontrolled
will of one of the contracting parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA 555).
Hence, even assuming that the P1.8 million loan agreement between the PNB and the private
respondent gave the PNB a license (although in fact there was none) to increase the interest rate
at will during the term of the loan, that license would have been null and void for being violative
of the principle of mutuality essential in contracts. It would have invested the loan agreement
with the character of a contract of adhesion, where the parties do not bargain on equal footing,
the weaker partys (the debtor) participation being reduced to the alternative "to take it or leave
it" (Qua vs. Law Union & Rock Insurance Co., 95 Phil. 85). Such a contract is a veritable trap
for the weaker party whom the courts of justice must protect against abuse and imposition.

A similar ruling was made in Philippine National Bank v. Court of Appeals. The credit
agreement in that case provided:

The BANK reserves the right to increase the interest rate within the limits allowed by law at any
time depending on whatever policy it may adopt in the future: Provided, that the interest rate on
this accommodation shall be correspondingly decreased in the event that the applicable
maximum interest is reduced by law or by the Monetary Board. . . .

As in the first case, PNB successively increased the stipulated interest so that what was originally
12% per annum became, after only two years, 42%. In declaring the increases invalid, we held:

We cannot countenance petitioner banks posturing that the escalation clause at bench gives it
unbridled right to unilaterally upwardly adjust the interest on private respondents loan. That
would completely take away from private respondents the right to assent to an important
modification in their agreement, and would negate the element of mutuality in contracts.

Only recently we invalidated another round of interest increases decreed by PNB pursuant to a
similar agreement it had with other borrowers:

[W]hile the Usury Law ceiling on interest rates was lifted by C.B. Circular 905, nothing in the
said circular could possibly be read as granting respondent bank carte blanche authority to raise
interest rates to levels which would either enslave its borrowers or lead to a hemorrhaging of
their assets.

In this case no attempt was made by PNB to secure the conformity of private respondents to the
successive increases in the interest rate. Private respondents assent to the increases can not be
implied from their lack of response to the letters sent by PNB, informing them of the increases.
For as stated in one case, no one receiving a proposal to change a contract is obliged to answer
the proposal.71 (Emphasis supplied)

We made the same pronouncement in a fifth case, New Sampaguita Builders Construction, Inc.
v. Philippine National Bank,72 thus

Courts have the authority to strike down or to modify provisions in promissory notes that grant
the lenders unrestrained power to increase interest rates, penalties and other charges at the
latters sole discretion and without giving prior notice to and securing the consent of the
borrowers. This unilateral authority is anathema to the mutuality of contracts and enable lenders
to take undue advantage of borrowers. Although the Usury Law has been effectively repealed,
courts may still reduce iniquitous or unconscionable rates charged for the use of money.
Furthermore, excessive interests, penalties and other charges not revealed in disclosure
statements issued by banks, even if stipulated in the promissory notes, cannot be given effect
under the Truth in Lending Act.73 (Emphasis supplied)

Yet again, in a sixth disposition, Philippine National Bank v. Spouses Rocamora,74 the above
pronouncements were reiterated to debunk PNBs repeated reliance on its invalidated contract
stipulations:

We repeated this rule in the 1994 case of PNB v. CA and Jayme Fernandez and the 1996 case of
PNB v. CA and Spouses Basco. Taking no heed of these rulings, the escalation clause PNB used
in the present case to justify the increased interest rates is no different from the escalation clause
assailed in the 1996 PNB case; in both, the interest rates were increased from the agreed 12% per
annum rate to 42%. x x x

xxxx

On the strength of this ruling, PNBs argument that the spouses Rocamoras failure to contest
the increased interest rates that were purportedly reflected in the statements of account and the
demand letters sent by the bank amounted to their implied acceptance of the increase should
likewise fail.

Evidently, PNBs failure to secure the spouses Rocamoras consent to the increased interest rates
prompted the lower courts to declare excessive and illegal the interest rates imposed. Togo
around this lower court finding, PNB alleges that the P206,297.47 deficiency claim was
computed using only the original 12% per annum interest rate. We find this unlikely. Our
examination of PNBs own ledgers, included in the records of the case, clearly indicates that
PNB imposed interest rates higher than the agreed 12% per annum rate. This confirmatory
finding, albeit based solely on ledgers found in the records, reinforces the application in this case
of the rule that findings of the RTC, when affirmed by the CA, are binding upon this Court.75
(Emphases supplied)

Verily, all these cases, including the present one, involve identical or similar provisions found in
respondents credit agreements and promissory notes. Thus, the July 1989 Credit Agreement
executed by petitioners and respondent contained the following stipulation on interest:

1.03. Interest. (a) The Loan shall be subject to interest at the rate of 19.5% [per annum]. Interest
shall be payable in advance every one hundred twenty days at the rate prevailing at the time of
the renewal.

(b) The Borrower agrees that the Bank may modify the interest rate in the Loan depending on
whatever policy the Bank may adopt in the future, including without limitation, the shifting from
the floating interest rate system to the fixed interest rate system, or vice versa. Where the Bank
has imposed on the Loan interest at a rate per annum which is equal to the Banks spread over
the current floating interest rate, the Borrower hereby agrees that the Bank may, without need of
notice to the Borrower, increase or decrease its spread over the floating interest rate at any time
depending on whatever policy it may adopt in the future.76 (Emphases supplied)

while the eight promissory notes issued pursuant thereto granted PNB the right to increase or
reduce interest rates "within the limits allowed by law or the Monetary Board"77 and the Real
Estate Mortgage agreement included the same right to increase or reduce interest rates "at any
time depending on whatever policy PNB may adopt in the future."78

On the basis of the Credit Agreement, petitioners issued promissory notes which they signed in
blank, and respondent later on entered their corresponding interest rates, as follows:

1st Promissory Note dated July 24, 1989 19.5%;

2nd Promissory Note dated November 22, 1989 23%;

3rd Promissory Note dated March 21, 1990 22%;

4th Promissory Note dated July 19, 1990 24%;

5th Promissory Note dated December 17, 1990 28%;

6th Promissory Note dated February 14, 1991 32%;

7th Promissory Note dated March 1, 1991 30%; and

8th Promissory Note dated July 11, 1991 24%.79

On the other hand, the August 1991 Amendment to Credit Agreement contains the following
stipulation regarding interest:

1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on each Availment
from date of each Availment up to but not including the date of full payment thereof at the rate
per annum which is determined by the Bank to be prime rate plus applicable spread in effect as
of the date of each Availment.80 (Emphases supplied)

and under this Amendment to Credit Agreement, petitioners again executed and signed the
following promissory notes in blank, for the respondent to later on enter the corresponding
interest rates, which it did, as follows:

9th Promissory Note dated November 8, 1991 26%;

10th Promissory Note dated March 19, 1992 25%;

11th Promissory Note dated July 11, 1992 23%;

12th Promissory Note dated November 10, 1992 21%;

 13th Promissory Note dated March 15, 1993 21%;

14th Promissory Note dated July 12, 1993 17.5%;

15th Promissory Note dated November 17, 1993 21%;

16th Promissory Note dated March 28, 1994 21%;

17th Promissory Note dated July 13, 1994 21%;

18th Promissory Note dated November 16, 1994 16%;

19th Promissory Note dated April 10, 1995 21%;

20th Promissory Note dated July 19, 1995 18.5%;

21st Promissory Note dated December 18, 1995 18.75%;

22nd Promissory Note dated April 22, 1996 18.5%;

23rd Promissory Note dated July 22, 1996 18.5%;

24th Promissory Note dated November 25, 1996 18%;

25th Promissory Note dated May 30, 1997 17.5%; and

26th Promissory Note (PN 9707237) dated July 30, 1997 25%.81

The 9th up to the 17th promissory notes provide for the payment of interest at the "rate the Bank
may at any time without notice, raise within the limits allowed by law x x x."82 On the other
hand, the 18th up to the 26th promissory notes which includes PN 9707237 carried the
following provision:

x x x For this purpose, I/We agree that the rate of interest herein stipulated may be increased or
decreased for the subsequent Interest Periods, with prior notice to the Borrower in the event of
changes in interest rate prescribed by law or the Monetary Board of the Central Bank of the
Philippines, or in the Banks overall cost of funds. I/We hereby agree that in the event I/we are
not agreeable to the interest rate fixed for any Interest Period, I/we shall have the option to
prepay the loan or credit facility without penalty within ten (10) calendar days from the Interest
Setting Date.83 (Emphasis supplied)

These stipulations must be once more invalidated, as was done in previous cases. The common
denominator in these cases is the lack of agreement of the parties to the imposed interest rates.
For this case, this lack of consent by the petitioners has been made obvious by the fact that they
signed the promissory notes in blank for the respondent to fill. We find credible the testimony of
Lydia in this respect. Respondent failed to discredit her; in fact, its witness PNB Kalibo Branch
Manager Aspa admitted that interest rates were fixed solely by its Treasury Department in
Manila, which were then simply communicated to all PNB branches for implementation. If this
were the case, then this would explain why petitioners had to sign the promissory notes in blank,
since the imposable interest rates have yet to be determined and fixed by respondents Treasury
Department in Manila.

Moreover, in Aspas enumeration of the factors that determine the interest rates PNB fixes
such as cost of money, foreign currency values, bank administrative costs, profitability, and
considerations which affect the banking industry it can be seen that considerations which affect
PNBs borrowers are ignored. A borrowers current financial state, his feedback or opinions, the
nature and purpose of his borrowings, the effect of foreign currency values or fluctuations on his
business or borrowing, etc. these are not factors which influence the fixing of interest rates to
be imposed on him. Clearly, respondents method of fixing interest rates based on one-sided,
indeterminate, and subjective criteria such as profitability, cost of money, bank costs, etc. is
arbitrary for there is no fixed standard or margin above or below these considerations.

The stipulation in the promissory notes subjecting the interest rate to review does not render the
imposition by UCPB of interest rates on the obligations of the spouses Beluso valid. According
to said stipulation:

The interest rate shall be subject to review and may be increased or decreased by the LENDER
considering among others the prevailing financial and monetary conditions; or the rate of interest
and charges which other banks or financial institutions charge or offer to charge for similar
accommodations; and/or the resulting profitability to the LENDER after due consideration of all
dealings with the BORROWER.

It should be pointed out that the authority to review the interest rate was given [to] UCPB alone
as the lender. Moreover, UCPB may apply the considerations enumerated in this provision as it
wishes. As worded in the above provision, UCPB may give as much weight as it desires to each
of the following considerations: (1) the prevailing financial and monetary condition;(2) the rate
of interest and charges which other banks or financial institutions charge or offer to charge for
similar accommodations; and/or(3) the resulting profitability to the LENDER (UCPB) after due
consideration of all dealings with the BORROWER (the spouses Beluso). Again, as in the case
of the interest rate provision, there is no fixed margin above or below these considerations.

In view of the foregoing, the Separability Clause cannot save either of the two options of UCPB
as to the interest to be imposed, as both options violate the principle of mutuality of contracts.84
(Emphases supplied)

To repeat what has been said in the above-cited cases, any modification in the contract, such as
the interest rates, must be made with the consent of the contracting parties.1wphi1 The minds of
all the parties must meet as to the proposed modification, especially when it affects an important
aspect of the agreement. In the case of loan agreements, the rate of interest is a principal
condition, if not the most important component. Thus, any modification thereof must be mutually
agreed upon; otherwise, it has no binding effect.
What is even more glaring in the present case is that, the stipulations in question no longer
provide that the parties shall agree upon the interest rate to be fixed; -instead, they are worded in
such a way that the borrower shall agree to whatever interest rate respondent fixes. In credit
agreements covered by the above-cited cases, it is provided that:

The Bank reserves the right to increase the interest rate within the limits allowed by law at any
time depending on whatever policy it may adopt in the future: Provided, that, the interest rate on
this accommodation shall be correspondingly decreased in the event that the applicable
maximum interest rate is reduced by law or by the Monetary Board. In either case, the
adjustment in the interest rate agreed upon shall take effect on the effectivity date of the increase
or decrease in maximum interest rate.85 (Emphasis supplied)

Whereas, in the present credit agreements under scrutiny, it is stated that:

IN THE JULY 1989 CREDIT AGREEMENT

(b) The Borrower agrees that the Bank may modify the interest rate on the Loan depending on
whatever policy the Bank may adopt in the future, including without limitation, the shifting from
the floating interest rate system to the fixed interest rate system, or vice versa. Where the Bank
has imposed on the Loan interest at a rate per annum, which is equal to the Banks spread over
the current floating interest rate, the Borrower hereby agrees that the Bank may, without need of
notice to the Borrower, increase or decrease its spread over the floating interest rate at any time
depending on whatever policy it may adopt in the future.86 (Emphases supplied)

IN THE AUGUST 1991 AMENDMENT TO CREDIT AGREEMENT

1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on each Availment
from date of each Availment up to but not including the date of full payment thereof at the rate
per annum which is determined by the Bank to be prime rate plus applicable spread in effect as
of the date of each Availment.87 (Emphasis supplied)

Plainly, with the present credit agreement, the element of consent or agreement by the borrower
is now completely lacking, which makes respondents unlawful act all the more reprehensible.

Accordingly, petitioners are correct in arguing that estoppel should not apply to them, for
"[e]stoppel cannot be predicated on an illegal act. As between the parties to a contract, validity
cannot be given to it by estoppel if it is prohibited by law or is against public policy."88

It appears that by its acts, respondent violated the Truth in Lending Act, or Republic Act No.
3765, which was enacted "to protect x x x citizens from a lack of awareness of the true cost of
credit to the user by using a full disclosure of such cost with a view of preventing the uninformed
use of credit to the detriment of the national economy."89 The law "gives a detailed enumeration
of the specific information required to be disclosed, among which are the interest and other
charges incident to the extension of credit."90 Section 4 thereof provides that a disclosure
statement must be furnished prior to the consummation of the transaction, thus:
SEC. 4. Any creditor shall furnish to each person to whom credit is extended, prior to the
consummation of the transaction, a clear statement in writing setting forth, to the extent
applicable and in accordance with rules and regulations prescribed by the Board, the following
information:

(1) the cash price or delivered price of the property or service to be acquired;

(2) the amounts, if any, to be credited as down payment and/or trade-in;

(3) the difference between the amounts set forth under clauses (1) and (2);

(4) the charges, individually itemized, which are paid or to be paid by such person in
connection with the transaction but which are not incident to the extension of credit;

(5) the total amount to be financed;

(6) the finance charge expressed in terms of pesos and centavos; and

(7) the percentage that the finance bears to the total amount to be financed expressed as a
simple annual rate on the outstanding unpaid balance of the obligation.

Under Section 4(6), "finance charge" represents the amount to be paid by the debtor incident to
the extension of credit such as interest or discounts, collection fees, credit investigation fees,
attorneys fees, and other service charges. The total finance charge represents the difference
between (1) the aggregate consideration (down payment plus installments) on the part of the
debtor, and (2) the sum of the cash price and non-finance charges.91

By requiring the petitioners to sign the credit documents and the promissory notes in blank, and
then unilaterally filling them up later on, respondent violated the Truth in Lending Act, and was
remiss in its disclosure obligations. In one case, which the Court finds applicable here, it was
held:

UCPB further argues that since the spouses Beluso were duly given copies of the subject
promissory notes after their execution, then they were duly notified of the terms thereof, in
substantial compliance with the Truth in Lending Act.

Once more, we disagree. Section 4 of the Truth in Lending Act clearly provides that the
disclosure statement must be furnished prior to the consummation of the transaction:

SEC. 4. Any creditor shall furnish to each person to whom credit is extended, prior to the
consummation of the transaction, a clear statement in writing setting forth, to the extent
applicable and in accordance with rules and regulations prescribed by the Board, the following
information:

(1) the cash price or delivered price of the property or service to be acquired;
 (2) the amounts, if any, to be credited as down payment and/or trade-in;

(3) the difference between the amounts set forth under clauses (1) and (2);

(4) the charges, individually itemized, which are paid or to be paid by such person in
connection with the transaction but which are not incident to the extension of credit;

(5) the total amount to be financed;

(6) the finance charge expressed in terms of pesos and centavos; and

(7) the percentage that the finance bears to the total amount to be financed expressed as a
simple annual rate on the outstanding unpaid balance of the obligation.

The rationale of this provision is to protect users of credit from a lack of awareness of the true
cost thereof, proceeding from the experience that banks are able to conceal such true cost by
hidden charges, uncertainty of interest rates, deduction of interests from the loaned amount, and
the like. The law thereby seeks to protect debtors by permitting them to fully appreciate the true
cost of their loan, to enable them to give full consent to the contract, and to properly evaluate
their options in arriving at business decisions. Upholding UCPBs claim of substantial
compliance would defeat these purposes of the Truth in Lending Act. The belated discovery of
the true cost of credit will too often not be able to reverse the ill effects of an already
consummated business decision.

In addition, the promissory notes, the copies of which were presented to the spouses Beluso after
execution, are not sufficient notification from UCPB. As earlier discussed, the interest rate
provision therein does not sufficiently indicate with particularity the interest rate to be applied to
the loan covered by said promissory notes.92 (Emphases supplied)

However, the one-year period within which an action for violation of the Truth in Lending Act
may be filed evidently prescribed long ago, or sometime in 2001, one year after petitioners
received the March 2000 demand letter which contained the illegal charges.

The fact that petitioners later received several statements of account detailing its outstanding
obligations does not cure respondents breach. To repeat, the belated discovery of the true cost of
credit does not reverse the ill effects of an already consummated business decision.93

Neither may the statements be considered proposals sent to secure the petitioners conformity;
they were sent after the imposition and application of the interest rate, and not before. And even
if it were to be presumed that these are proposals or offers, there was no acceptance by
petitioners. "No one receiving a proposal to modify a loan contract, especially regarding interest,
is obliged to answer the proposal."94

Loan and credit arrangements may be made enticing by, or "sweetened" with, offers of low
initial interest rates, but actually accompanied by provisions written in fine print that allow
lenders to later on increase or decrease interest rates unilaterally, without the consent of the
borrower, and depending on complex and subjective factors. Because they have been lured into
these contracts by initially low interest rates, borrowers get caught and stuck in the web of
subsequent steep rates and penalties, surcharges and the like. Being ordinary individuals or
entities, they naturally dread legal complications and cannot afford court litigation; they succumb
to whatever charges the lenders impose. At the very least, borrowers should be charged rightly;
but then again this is not possible in a one-sided credit system where the temptation to abuse is
strong and the willingness to rectify is made weak by the eternal desire for profit.

Given the above supposition, the Court cannot subscribe to respondents argument that in every
repricing of petitioners loan availment, they are given the right to question the interest rates
imposed. The import of respondents line of reasoning cannot be other than that if one out of
every hundred borrowers questions respondents practice of unilaterally fixing interest rates, then
only the loan arrangement with that lone complaining borrower will enjoy the benefit of review
or re-negotiation; as to the 99 others, the questionable practice will continue unchecked, and
respondent will continue to reap the profits from such unscrupulous practice. The Court can no
more condone a view so perverse. This is exactly what the Court meant in the immediately
preceding cited case when it said that "the belated discovery of the true cost of credit does not
reverse the ill effects of an already consummated business decision;"95 as to the 99 borrowers
who did not or could not complain, the illegal act shall have become a fait accompli to their
detriment, they have already suffered the oppressive rates.

Besides, that petitioners are given the right to question the interest rates imposed is, under the
circumstances, irrelevant; we have a situation where the petitioners do not stand on equal footing
with the respondent. It is doubtful that any borrower who finds himself in petitioners position
would dare question respondents power to arbitrarily modify interest rates at any time. In the
second place, on what basis could any borrower question such power, when the criteria or
standards which are really one-sided, arbitrary and subjective for the exercise of such power
are precisely lost on him?

For the same reasons, the Court cannot validly consider that, as stipulated in the 18th up to the
26th promissory notes, petitioners are granted the option to prepay the loan or credit facility
without penalty within 10 calendar days from the Interest Setting Date if they are not agreeable
to the interest rate fixed. It has been shown that the promissory notes are executed and signed in
blank, meaning that by the time petitioners learn of the interest rate, they are already bound to
pay it because they have already pre-signed the note where the rate is subsequently entered.

Besides, premium may not be placed upon a stipulation in a contract which grants one party the
right to choose whether to continue with or withdraw from the agreement if it discovers that what
the other party has been doing all along is improper or illegal.

Thus said, respondents arguments relative to the credit documents that documentary evidence
prevails over testimonial evidence; that the credit documents are in proper form, presumed
regular, and endure, against arbitrary claims by petitioners, experienced business persons that
they are, they signed questionable loan documents whose provisions for interest rates were left
blank, and yet they continued to pay the interests without protest for a number of years deserve
no consideration.
With regard to interest, the Court finds that since the escalation clause is annulled, the principal
amount of the loan is subject to the original or stipulated rate of interest, and upon maturity, the
amount due shall be subject to legal interest at the rate of 12% per annum. This is the uniform
ruling adopted in previous cases, including those cited here.96 The interests paid by petitioners
should be applied first to the payment of the stipulated or legal and unpaid interest, as the case
may be, and later, to the capital or principal.97 Respondent should then refund the excess amount
of interest that it has illegally imposed upon petitioners; "[t]he amount to be refunded refers to
that paid by petitioners when they had no obligation to do so."98 Thus, the parties original
agreement stipulated the payment of 19.5% interest; however, this rate was intended to apply
only to the first promissory note which expired on November 21, 1989 and was paid by
petitioners; it was not intended to apply to the whole duration of the loan. Subsequent higher
interest rates have been declared illegal; but because only the rates are found to be improper, the
obligation to pay interest subsists, the same to be fixed at the legal rate of 12% per annum.
However, the 12% interest shall apply only until June 30, 2013. Starting July1, 2013, the
prevailing rate of interest shall be 6% per annum pursuant to our ruling in Nacar v. Gallery
Frames99 and Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799.

Now to the issue of penalty. PN 9707237 provides that failure to pay it or any installment
thereon, when due, shall constitute default, and a penalty charge of 24% per annum based on the
defaulted principal amount shall be imposed. Petitioners claim that this penalty should be
excluded from the foreclosure amount or bid price because the Real Estate Mortgage and the
Supplement thereto did not specifically include it as part of the secured amount. Respondent
justifies its inclusion in the secured amount, saying that the purpose of the penalty or a penal
clause is to ensure the performance of the obligation and substitute for damages and the payment
of interest in the event of non-compliance.100 Respondent adds that the imposition and
collection of a penalty is a normal banking practice, and the standard rate per annum for all
commercial banks, at the time, was 24%. Its inclusion as part of the secured amount in the
mortgage agreements is thus valid and necessary.

The Court sustains petitioners view that the penalty may not be included as part of the secured
amount. Having found the credit agreements and promissory notes to be tainted, we must accord
the same treatment to the mortgages. After all, "[a] mortgage and a note secured by it are deemed
parts of one transaction and are construed together."101 Being so tainted and having the
attributes of a contract of adhesion as the principal credit documents, we must construe the
mortgage contracts strictly, and against the party who drafted it. An examination of the mortgage
agreements reveals that nowhere is it stated that penalties are to be included in the secured
amount. Construing this silence strictly against the respondent, the Court can only conclude that
the parties did not intend to include the penalty allowed under PN 9707237 as part of the secured
amount. Given its resources, respondent could have if it truly wanted to conveniently
prepared and executed an amended mortgage agreement with the petitioners, thereby including
penalties in the amount to be secured by the encumbered properties. Yet it did not.

With regard to attorneys fees, it was plain error for the CA to have passed upon the issue since it
was not raised by the petitioners in their appeal; it was the respondent that improperly brought it
up in its appellees brief, when it should have interposed an appeal, since the trial courts
Decision on this issue is adverse to it. It is an elementary principle in the subject of appeals that
an appellee who does not himself appeal cannot obtain from the appellate court any affirmative
relief other than those granted in the decision of the court below.

x x x [A]n appellee, who is at the same time not an appellant, may on appeal be permitted to
make counter assignments of error in ordinary actions, when the purpose is merely to defend
himself against an appeal in which errors are alleged to have been committed by the trial court
both in the appreciation of facts and in the interpretation of the law, in order to sustain the
judgment in his favor but not when his purpose is to seek modification or reversal of the
judgment, in which case it is necessary for him to have excepted to and appealed from the
judgment.102

Since petitioners did not raise the issue of reduction of attorneys fees, the CA possessed no
authority to pass upon it at the instance of respondent. The ruling of the trial court in this respect
should remain undisturbed.

For the fixing of the proper amounts due and owing to the parties to the respondent as creditor
and to the petitioners who are entitled to a refund as a consequence of overpayment considering
that they paid more by way of interest charges than the 12% per annum103 herein allowed the
case should be remanded to the lower court for proper accounting and computation, applying the
following procedure:

1. The 1st Promissory Note with the 19.5% interest rate is deemed proper and paid;

2. All subsequent promissory notes (from the 2nd to the 26th promissory notes) shall
carry an interest rate of only 12% per annum.104 Thus, interest payment made in excess
of 12% on the 2nd promissory note shall immediately be applied to the principal, and the
principal shall be accordingly reduced. The reduced principal shall then be subjected to
the 12%105 interest on the 3rd promissory note, and the excess over 12% interest
payment on the 3rd promissory note shall again be applied to the principal, which shall
again be reduced accordingly. The reduced principal shall then be subjected to the 12%
interest on the 4th promissory note, and the excess over12% interest payment on the 4th
promissory note shall again be applied to the principal, which shall again be reduced
accordingly. And so on and so forth;

3. After the above procedure is carried out, the trial court shall be able to conclude if
petitioners a) still have an OUTSTANDING BALANCE/OBLIGATION or b) MADE
PAYMENTS OVER AND ABOVE THEIR TOTAL OBLIGATION (principal and
interest);

4. Such outstanding balance/obligation, if there be any, shall then be subjected to a 12%

per annum interest from October 28, 1997 until January 14, 1999, which is the date of the
auction sale;

5. Such outstanding balance/obligation shall also be charged a 24% per annum penalty
from August 14, 1997 until January 14, 1999. But from this total penalty, the petitioners
previous payment of penalties in the amount of P202,000.00made on January 27,
1998106 shall be DEDUCTED;

6. To this outstanding balance (3.), the interest (4.), penalties (5.), and the final and
executory award of 1% attorneys fees shall be ADDED;

7. The sum total of the outstanding balance (3.), interest (4.) and 1% attorneys fees (6.)
shall be DEDUCTED from the bid price of P4,324,172.96. The penalties (5.) are not
included because they are not included in the secured amount;

8. The difference in (7.) [P4,324,172.96 LESS sum total of the outstanding balance (3.),
interest (4.), and 1% attorneys fees (6.)] shall be DELIVERED TO THE
PETITIONERS;

9. Respondent may then proceed to consolidate its title to TCTs T-14250 and T-16208;

10. ON THE OTHER HAND, if after performing the procedure in (2.), it turns out that
petitioners made an OVERPAYMENT, the interest (4.), penalties (5.), and the award of
1% attorneys fees (6.) shall be DEDUCTED from the overpayment. There is no
outstanding balance/obligation precisely because petitioners have paid beyond the
amount of the principal and interest;

11. If the overpayment exceeds the sum total of the interest (4.), penalties (5.), and award
of 1% attorneys fees (6.), the excess shall be RETURNED to the petitioners, with legal
interest, under the principle of solutio indebiti;107

12. Likewise, if the overpayment exceeds the total amount of interest (4.) and award of
1% attorneys fees (6.), the trial court shall INVALIDATE THE EXTRAJUDICIAL
FORECLOSURE AND SALE;

13. HOWEVER, if the total amount of interest (4.) and award of 1% attorneys fees (6.)
exceed petitioners overpayment, then the excess shall be DEDUCTED from the bid
price of P4,324,172.96;

14. The difference in (13.) [P4,324,172.96 LESS sum total of the interest (4.) and 1%
attorneys fees (6.)] shall be DELIVERED TO THE PETITIONERS;

15. Respondent may then proceed to consolidate its title to TCTs T-14250 and T-16208.
The outstanding penalties, if any, shall be collected by other means.

From the above, it will be seen that if, after proper accounting, it turns out that the
petitioners made payments exceeding what they actually owe by way of principal,
interest, and attorneys fees, then the mortgaged properties need not answer for any
outstanding secured amount, because there is not any; quite the contrary, respondent must
refund the excess to petitioners.1wphi1 In such case, the extrajudicial foreclosure and
sale of the properties shall be declared null and void for obvious lack of basis, the case
 being one of solutio indebiti instead. If, on the other hand, it turns out that petitioners
overpayments in interests do not exceed their total obligation, then the respondent may
consolidate its ownership over the properties, since the period for redemption has
expired. Its only obligation will be to return the difference between its bid price
(P4,324,172.96) and petitioners total obligation outstanding except penalties after
applying the latters overpayments.

WHEREFORE, premises considered, the Petition is GRANTED. The May 8, 2007 Decision of
the Court of Appeals in CA-G.R. CV No. 79650 is ANNULLED and SET ASIDE. Judgment is
hereby rendered as follows:

1. The interest rates imposed and indicated in the 2nd up to the 26th Promissory Notes
are DECLARED NULL AND VOID, and such notes shall instead be subject to interest at
the rate of twelve percent (12%) per annum up to June 30, 2013, and starting July 1,
2013, six percent (6%) per annum until full satisfaction;

2. The penalty charge imposed in Promissory Note No. 9707237 shall be EXCLUDED
from the amounts secured by the real estate mortgages;

3. The trial courts award of one per cent (1%) attorneys fees is REINSTATED;

4. The case is ordered REMANDED to the Regional Trial Court, Branch 6 of Kalibo,
Aklan for the computation of overpayments made by petitioners spouses Eduardo and
Lydia Silos to respondent Philippine National Bank, taking into consideration the
foregoing dispositions, and applying the procedure hereinabove set forth;

5. Thereafter, the trial court is ORDERED to make a determination as to the validity of

the extrajudicial foreclosure and sale, declaring the same null and void in case of
overpayment and ordering the release and return of Transfer Certificates of Title Nos. T-
14250 and TCT T-16208 to petitioners, or ordering the delivery to the petitioners of the
difference between the bid price and the total remaining obligation of petitioners, if any;

6. In the meantime, the respondent Philippine National Bank is ENJOINED from

consolidating title to Transfer Certificates of Title Nos. T-14250 and T-16208 until all the
steps in the procedure above set forth have been taken and applied;

7. The reimbursement of the excess in the bid price of P377,505.99, which respondent
Philippine National Bank is ordered to reimburse petitioners, should be HELD IN
ABEYANCE until the true amount owing to or owed by the parties as against each other
is determined;

8. Considering that this case has been pending for such a long time and that further
proceedings, albeit uncomplicated, are required, the trial court is ORDERED to proceed
with dispatch.

SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

a. Best Evidence Rule

MCMP Construction Corporation vs Monark

THIRD DIVISION

G.R. No. 201001 November 10, 2014

MCMP CONSTRUCTION CORP., Petitioner,

vs.
MONARK EQUIPMENT CORP., Respondent.

RESOLUTION

VELASCO, JR., J.:

For consideration of the Court is a Petition for Review on Certiorari dated April 20, 20li filed by
MCMP Construction Corp. under Rule 45 of the Rules of Court. The petition seeks the reversal
of the Decision dated October 14, 20112 and Resolution dated March 9, 20123 issued by the
Court of Appeals (CA) in CA G.R. CV No. 91860 entitled Monark Equipment Corporation v.
MCMP Construction Corporation. The CA Decision affirmed the Decision dated November 20,
20074 and Order dated April 28, 20085 issued by the Regional Trial Court, Branch 96 in Quezon
City (RTC) in Civil Case No. Q-02-4 7092 entitled Monark Equipment Corporation v. MCMP
Construction Corporation.

The facts of the case are as follows:

MCMP Construction Corporation (MCMP) leased heavy equipment from Monark Equipment
Corporation (Monark) for various periods in 2000, the lease covered by a Rental Equipment
Contract (Contract). Thus, Monark delivered five (5) pieces of heavy equipment to the project
site of MCMP in Tanay, Rizal and Llavac, Quezon, the delivery evidenced by invoices as well as
Documents Acknowledgment Receipt Nos. 04667 and 5706, received and signed by
representatives of MCMP, namely, Jorge Samonte on December 5, 2000 and Rose Takahashi on
January 29, 2001, respectively. Notably, the invoices state:

"Credit sales are payable within 30 days from the date of invoice. Customer agrees to pay
interest at 24% p.a. on all amounts. In addition, customer agrees to pay a collection fee of 1%
compounded monthly and 2% per month penalty charge for late payment on amounts overdue.
Customer agrees to pay a sum equal to 25% of any amount due as attorneys fees in case of suit,
and expressly submit to the jurisdiction of the courts of Quezon City, Makati, Pasig or Manila,
Metro Manila, for any legal action arising from, this transactions."

Despite the lapse of the thirty (30)-day period indicated in the invoices, MCMP failed to pay the
rental fees. Upon demands made upon MCMP to pay the amount due, partial payments were
made in the amount of PhP100,000.00 on April 15, 2001 and PhP100,000.00 on August 15,
2001. Further demands went unheeded. As of April 30, 2002, MCMP owed Monark the amount
of PhP1,282,481.83, broken down as follows:

Principal Accumulated PhP 765,380.33

Interest (2%) 253,226.17

2% Monthly Penalty Charge 253,226.17

Collection Fee (1%) 10,649.16

===============
PhP1,282,481.836

Thus, on June 18, 2002, Monark filed a suit for a Sum of Money with the RTC docketed as Civil
Case No. Q-02-47092.7 In its Answer filed on July 5, 2002,8 MCMP alleged in defense thatthe
complaint was premature as Monark has refused to give a detailed breakdown of its claims.
MCMP further averred that it had an agreement with Monark that it would not be charged for the
whole time that the leased equipment was in its possession but rather only for the actual time that
the equipment was used although still on the project site. MCMP, however, admitted that this
agreement was not contained in the Contract.

During trial, Monark presented asone of its witnesses, Reynaldo Peregrino (Peregrino), its Senior
Account Manager. Peregrino testified that there were two (2) original copies ofthe Contract, one
retained by Monark, while the other was given to MCMP. He further testified that Monarks
copy had been lost and that diligent efforts to recover the copy proved futile. Instead, Peregrino
presented a photocopy of the Contract which he personally had on file. MCMP objected to the
presentation of secondary evidence to prove the contents of the Contract arguing that there were
no diligent efforts to search for the original copy. Notably, MCMP did not present its copy of the
Contract notwithstanding the directive of the trial court to produce the same.9

On November 20, 2007, the RTC issued its Decision finding for Monark as plaintiff, the
dispositive portion of which reads:

"WHEREFORE, in view of the foregoing findings and legal premises, judgment is hereby
rendered in favor of the plaintiff, and ordering the defendant to pay the former:

1. PhP 1,282,481.83 as balance for the rental fees of the subject heavy equipments (sic)
as of April 30, 2002, inclusive of the interests thereof;
 2. Twenty-Five percent (25%) of the total amount to be recovered as payment for the
attorneys fees; and,

3. The costs of suit.

SO ORDERED."

From this Decision of the RTC, MCMP filed a Motion for Reconsideration dated January 31,
2008 while Monark interposed a Motion for Clarification and/or Partial Reconsideration.10 On
April 28, 2008, the RTC issued an Order, disposing as follows:

"WHEREFORE, in light of the foregoing, the Court finds no reversible error in the assailed
decision henceforth, the Motion for Reconsideration of defendant is hereby DENIED for lack of
merit. On the other hand, the plaintiffs Motion for Clarification and/or Partial Reconsideration is
hereby GRANTED for being meritorious. Therefore, in the dispositive portion of the assailed
decision dated 20 November 2007, the following should be included:

The payment of interests, charges and fees due after April 30, 2002 and up to the time when all
the obligations of the defendant to the plaintiff shall have been fully paid, computed in
accordance with the stipulations entered into between the parties under Exhibits "A" to "G", and
uniformly stated in the following wise:

Credit sales are payable within 30 days from the date of invoice. Customer agreesto pay interest
at 24% p.a. on all amounts. In addition, customer agrees to pay a collection fee of 1%
compounded monthly and 2% per month penalty charge for late payment on amounts overdue.
Customer agrees to pay a sum equal to 25% of any amount due as attorneys fees in case of suit,
and expressly submit to the jurisdiction of the courts of Quezon City, Makati, Pasig or Manila,
Metro Manila, for any legal action arising from, this transactions.

SO ORDERED."

Unsatisfied, MCMP appealed the RTCs Decision and Order to the Court of Appeals (CA).
Eventually, the appellate court, by a Decision dated October 14, 2011, affirmed in totothe
Decision and Order of the RTC. MCMPs motion for reconsideration of the CA Decision was
denied by the CA in its Resolution dated March 9, 2012.

Hence, the instant petition.

MCMP challenges the ruling of the CA arguing that the appellate court should have disallowed
the presentation of secondary evidence to prove the existence of the Contract, following the Best
Evidence Rule. MCMP specifically argues that based on the testimony of Peregrino, Monark did
not diligently search for the original copy of the Contract as evidenced by the fact that: 1) the
actual custodian of the document was not presented; 2) the alleged loss was not even reported to
management or the police; and 3) Monark only searched for the original copy of the document
for the purposes of the instant case.
Petitioners contention is erroneous.

The Best Evidence Rule, a basic postulate requiring the production of the original document
whenever its contents are the subject of inquiry, is contained in Section 3 of Rule 130 ofthe
Rules of Court which provides:

"Section 3. Original document must be produced; exceptions. When the subject of inquiry is
the contents of a document, no evidence shall be admissible other than the original document
itself, except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without
bad faith on the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the
evidence is offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be
examined in court without great loss of time and the fact sought to be established from
them is only the general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in
a public office. (Emphasis supplied)"

Relative thereto, Sections 5 and 6 of Rule 130 provide the relevant rules on the presentation of
secondary evidence to prove the contents of a lost document:

"Section 5. When original document is unavailable. When the original document has been lost
ordestroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence
and the cause of its unavailability without bad faith on his part, may prove its contents by a copy,
or by a recital of its contents in some authentic document, or by the testimony of witnesses in the
order stated. (4a)

Section 6. When original document is in adverse party's custody or control. If the document is
inthe custody or under the control of adverse party, he must have reasonable notice to produce it.
If after such notice and after satisfactory proof of its existence, he fails to produce the document,
secondary evidence may be presented as in the case of its loss."

In Country Bankers Insurance Corporation v. Lagman,11 the Court set down the requirements
before a party may present secondary evidence to prove the contents of the original document
whenever the original copy has been lost:

Before a party is allowed to adduce secondary evidence to prove the contents of the original, the
offeror must prove the following: (1) the existence or due execution of the original; (2) the loss
and destruction of the original or the reason for its non-production in court; and (3) on the part of
the offeror, the absence of bad faith to which the unavailability of the original can be attributed.
The correct order of proof is as follows: existence, execution, loss, and contents.
In the instant case, the CA correctlyruled that the above requisites are present. Both the CA and
the RTC gave credence to the testimony of Peregrino that the original Contract in the possession
of Monark has been lost and that diligent efforts were exerted to find the same but to no avail.
Such testimony has remained uncontroverted. As has been repeatedly held by this Court,
"findings offacts and assessment ofcredibility of witnesses are matters best left to the trial
court."12 Hence, the Court will respect the evaluation of the trial court on the credibility of
Peregrino.

MCMP, to note, contends that the Contract presented by Monark is not the contract that they
entered into. Yet, it has failed to present a copy of the Contract even despite the request ofthe
trial court for it to produce its copy of the Contract.13 Normal business practice dictates that
MCMP should have asked for and retained a copy of their agreement. Thus, MCMPs failure to
present the same and even explain its failure, not only justifies the presentation by Monark of
secondary evidence in accordance with Section 6 of Rule 130 of the Rules of Court, butit also
gives rise to the disputable presumption adverse to MCMP under Section 3 (e) of Rule 131 of the
Rules of Court that "evidence willfully suppressed would be adverse if produced."

Next, MCMP claims that the piecesof equipment were not actually delivered to it by Monark. It
bears pointing out, however, that the witnesses of MCMP itself, Jorge Samonte, a Budget
Supervisor of MCMP, and Engr. Horacio A. Martinez, Sr., General Manager of MCMP, both
acknowledged the delivery of the equipment to the project sites.14 Clearly, the contention of
MCMP is false.

Evidently, the instant petition must be dismissed.

Nevertheless, the Court takes notice that the trial court imposed upon MCMP a 24% per annum
interest on the rental fees as well as a collection fee of 1% per month compounded monthly and a
2% per month penalty charge. In all then, the effective interest rate foisted upon MCMP is 60%
per annum. On top of this, MCMP was assessedfor attorneys fees at the rate of 25% of the total
amount due. These are exorbitant and unconscionable rates and, following jurisprudence, must
be equitably reduced.

In Macalinao v. Bank of the Philippine Islands,15 the Court reduced the interest imposed by the
bank of 36% for being excessive and unconscionable:

"x x x Nevertheless, it should be noted that this is not the first time that this Court has considered
the interest rate of 36% per annum as excessive and unconscionable. We held in Chua vs. Timan:

The stipulated interest rates of 7% and 5% per month imposed on respondents loans mustbe
equitably reduced to 1% per month or 12% per annum. We need not unsettle the principle we
had affirmed in a plethora of cases that stipulated interest rates of 3% per month and higher are
excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being
contrary to morals, if not against the law. While C.B. Circular No. 905-82, which took effect on
January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured
loans, regardless of maturity, nothing in the said circular could possibly be read as granting carte
blanche authority to lenders to raise interest rates to levels which would either enslave their
borrowers or lead to a hemorrhaging of their assets. (Emphasis supplied.)

Since the stipulation on the interest rate is void, it is as if there was no express contract thereon.
Hence, courts may reduce the interest rate as reason and equity demand.

The same is true with respect tothe penalty charge. Notably, under the Terms and Conditions
Governing the Issuance and Use of the BPI Credit Card, it was also stated therein that respondent
BPI shall impose an additional penalty charge of 3% per month. Pertinently, Article 1229 of the
Civil Code states:

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been
partly or irregularly complied with by the debtor. Even if there has been no performance, the
penalty may also be reduced by the courts if it is iniquitous or unconscionable. In exercising this
power to determine what is iniquitous and unconscionable, courts must consider the
circumstances of each case since what may be iniquitous and unconscionable in one may be
totally just and equitable in another."

In the more recent case of Pentacapital Investment Corporation v. Mahinay,16 the Court reduced
the interest and penalties imposed in a contract as follows:

"Aside from the payment of the principal obligation of P1,936,800.00, the parties agreed that
respondent pay interest at the rate of 25% from February 17, 1997 until fully paid. Such rate,
however, is excessive and thus, void. Since the stipulation on the interest rate is void, it is as if
there was no express contract thereon. To be sure, courts may reduce the interest rate as reason
and equity demand. In this case, 12% interest is reasonable.

The promissory notes likewise required the payment of a penalty charge of 3% per month or
36% per annum. We find such rates unconscionable. This Court has recognized a penalty clause
as an accessory obligation which the parties attach to a principal obligation for the purpose of
ensuring the performance thereof by imposing on the debtor a special prestation
(generallyconsisting of the payment of a sum of money) in case the obligation is not fulfilled or
is irregularly or inadequately fulfilled. However, a penalty charge of 3% per month is
unconscionable; hence, we reduce it to1% per month or 12% per annum, pursuant to Article
1229 of the Civil Code which states:

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been
partly or irregularly complied with by the debtor. Even if there has been no performance, the
penalty may also be reduced by the courts if it is iniquitous or unconscionable.

Lastly, respondent promised to pay 25% of his outstanding obligations as attorneys fees in case
of non-payment thereof. Attorneys fees here are in the nature of liquidated damages. As long as
said stipulation does not contravene law, morals, or public order, it is strictly binding upon
respondent. Nonetheless, courts are empowered to reduce such rate if the same is iniquitous or
unconscionable pursuant to the above-quoted provision. This sentiment is echoed inArticle 2227
of the Civil Code, to wit:
Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.

Hence, we reduce the stipulated attorney's fees from 25% to 10%."

Following the above principles previously laid down by the Court, the interest and penalty
charges imposed upon MCMP must also be considered as iniquitous, unconscionable and,
therefore, void. As such, the rates may validly be reduced. Thus, the interest rate of 24% per
annum is hereby reduced to 12% per annum. Moreover, the interest shall start to accrue thirty
(30) days after receipt of the second set of invoices on January 21, 2001, or March 1, 2001 in
accordance with the provisions in the invoices themselves.

Additionally, the penalty and collection charge of 3% per month, or 36% per annum, is also
reduced to 6% per annum.1wphi1 And the amount of attorney's fees is reduced from 25% of the
total amount due to 5%.

WHEREFORE, premises considered, the instant petition is hereby DENIED for lack of merit
with the MODIFICATION that the dispositive portion of the RTC's Decision dated November
20, 2007, as amended in an Order dated April 28, 2008, should read:

WHEREFORE, in view of the foregoing findings and legal premises, judgment is hereby
rendered in favor of the plaintiff, and ordering the defendant to pay the former:

1. PhP 765,380.33 representing the unpaid rental fees;

2. Interest of 12% per annum on the unpaid rental fees to be computed from March 1,
200117 until payment;

3. Penalty and collection charge of 6% per annum on the unpaid rental fees to be
computed from March 1, 2001;

4. Attorney's Fees of five percent (5%) of the total amount to be recovered; and,

5. The costs of suit.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

Loon vs Power Master, Inc.

SECOND DIVISION
G.R. No. 189404 December 11, 2013

WILGEN LOON, JERRY ARCILLA, ALBERTPEREYE, ARNOLD PEREYE,

EDGARDO OBOSE, ARNEL MALARAS, PATROCINO TOETIN, EVELYN
LEONARDO, ELMER GLOCENDA, RUFO CUNAMAY, ROLANDOSAJOL,
ROLANDO ABUCAYON, JENNIFER NATIVIDAD, MARITESS TORION, ARMANDO
LONZAGA, RIZAL GELLIDO, EVIRDE HAQUE,1 MYRNA VINAS, RODELITO
AYALA, WINELITO OJEL, RENATO RODREGO, NENA ABINA, EMALYN
OLIVEROS, LOUIE ILAGAN, JOEL ENTIG, ARNEL ARANETA, BENJAMIN COSE,
WELITO LOON and WILLIAM ALIPAO, Petitioners,
vs.
POWER MASTER, INC., TRI-C GENERAL SERVICES, and SPOUSES HOMER and
CARINA ALUMISIN, Respondents.

DECISION

BRION, J.:

We resolve the petition for review on certiorari,2 filed by petitioners Wilgen Loon, Jerry Arcilla,
Albert Pereye, Arnold Pereye, Edgardo Obose, Arnel Malaras, Patrocino Toetin, Evelyn
Leonardo, Elmer Glocenda, Rufo Cunamay, Rolando Sajol, Rolando Abucayon, Jennifer
Natividad, Maritess Torion, Armando Lonzaga, Rizal Gellido, Evirde Haque, Myrna Vinas,
Rodelito Ayala, Winelito Ojel, Renato Rodrego, Nena Abina, Emalyn Oliveros, Louie Ilagan,
Joel Entig, Arnel Araneta, Benjamin Cose, Welito Loon, William Alipao (collectively, the
petitioners), to challenge the June 5, 2009 decision3 and the August 28, 2009 resolution4 of the
Court of Appeals (CA) in CA-G.R. SP No. 95182.

The Factual Antecedents

Respondents Power Master, Inc. and Tri-C General Services employed and assigned the
petitioners as janitors and leadsmen in various Philippine Long Distance Telephone Company
(PLDT) offices in Metro Manila area. Subsequently, the petitioners filed a complaint for money
claims against Power Master, Inc., Tri-C General Services and their officers, the spouses Homer
and Carina Alumisin (collectively, the respondents). The petitioners alleged in their complaint
that they were not paid minimum wages, overtime, holiday, premium, service incentive leave,
and thirteenth month pays. They further averred that the respondents made them sign blank
payroll sheets. On June 11, 2001, the petitioners amended their complaint and included illegal
dismissal as their cause of action. They claimed that the respondents relieved them from service
in retaliation for the filing of their original complaint.

Notably, the respondents did not participate in the proceedings before the Labor Arbiter except
on April 19, 2001 and May 21, 2001 when Mr. Romulo Pacia, Jr. appeared on the
respondents behalf.5 The respondents counsel also appeared in a preliminary mandatory
conference on July 5, 2001.6 However, the respondents neither filed any position paper nor
proffered pieces of evidence in their defense despite their knowledge of the pendency of the case.
 The Labor Arbiters Ruling

In a decision7 dated March 15, 2002, Labor Arbiter (LA) Elias H. Salinas partially ruled in favor
of the petitioners. The LA awarded the petitioners salary differential, service incentive leave,
and thirteenth month pays. In awarding these claims, the LA stated that the burden of proving
the payment of these money claims rests with the employer. The LA also awarded attorneys
fees in favor of the petitioners, pursuant to Article 111 of the Labor Code.8

However, the LA denied the petitioners claims for backwages, overtime, holiday, and
premium pays. The LA observed that the petitioners failed to show that they rendered overtime
work and worked on holidays and rest days without compensation. The LA further concluded
that the petitioners cannot be declared to have been dismissed from employment because they
did not show any notice of termination of employment. They were also not barred from entering
the respondents premises.

The Proceedings before the NLRC

Both parties appealed the LAs ruling with the National Labor Relations Commission. The
petitioners disputed the LAs denial of their claim for backwages, overtime, holiday and
premium pays. Meanwhile, the respondents questioned the LAs ruling on the ground that the
LA did not acquire jurisdiction over their persons.

The respondents insisted that they were not personally served with summons and other
processes. They also claimed that they paid the petitioners minimum wages, service incentive
leave and thirteenth month pays. As proofs, they attached photocopied and computerized
copies of payroll sheets to their memorandum on appeal.9 They further maintained that the
petitioners were validly dismissed. They argued that the petitioners repeated defiance to their
transfer to different workplaces and their violations of the company rules and regulations
constituted serious misconduct and willful disobedience.10

On January 3, 2003, the respondents filed an unverified supplemental appeal. They attached
photocopied and computerized copies of list of employees with automated teller machine
(ATM) cards to the supplemental appeal. This list also showed the amounts allegedly
deposited in the employees ATM cards.11 They also attached documentary evidence
showing that the petitioners were dismissed for cause and had been accorded due process.

On January 22, 2003, the petitioners filed an Urgent Manifestation and Motion12 where they
asked for the deletion of the supplemental appeal from the records because it allegedly suffered
from infirmities. First, the supplemental appeal was not verified. Second, it was belatedly filed
six months from the filing of the respondents notice of appeal with memorandum on appeal. The
petitioners pointed out that they only agreed to the respondents filing of a responsive pleading
until December 18, 2002.13 Third the attached documentary evidence on the supplemental
appeal bore the petitioners forged signatures.

They reiterated these allegations in an Urgent Motion to Resolve Manifestation and Motion
(To Expunge from the Records Respondents Supplemental Appeal, Reply and/or
Rejoinder) dated January 31, 2003.14 Subsequently, the petitioners filed an Urgent
Manifestation with Reiterating Motion to Strike-Off the Record Supplemental
Appeal/Reply, Quitclaims and Spurious Documents Attached to Respondents Appeal dated
August 7, 2003.15 The petitioners argued in this last motion that the payrolls should not be given
probative value because they were the respondents fabrications. They reiterated that the genuine
payrolls bore their signatures, unlike the respondents photocopies of the payrolls. They also
maintained that their signatures in the respondents documents (which showed their receipt of
thirteenth month pay) had been forged.

The NLRC Ruling

In a resolution dated November 27, 2003, the NLRC partially ruled in favor of the
respondents.16 The NLRC affirmed the LAs awards of holiday pay and attorneys fees. It also
maintained that the LA acquired jurisdiction over the persons of the respondents through their
voluntary appearance.

However, it allowed the respondents to submit pieces of evidence for the first time on
appeal on the ground that they had been deprived of due process. It found that the
respondents did not actually receive the LAs processes. It also admitted the respondents
unverified supplemental appeal on the ground that technicalities may be disregarded to serve the
greater interest of substantial due process. Furthermore, the Rules of Court do not require the
verification of a supplemental pleading.

The NLRC also vacated the LAs awards of salary differential, thirteenth month and service
incentive leave pays. In so ruling, it gave weight to the pieces of evidence attached to the
memorandum on appeal and the supplemental appeal. It maintained that the absence of the
petitioners signatures in the payrolls was not an indispensable factor for their authenticity. It
pointed out that the payment of money claims was further evidenced by the list of employees
with ATM cards. It also found that the petitioners signatures were not forged. It took judicial
notice that many people use at least two or more different signatures.

The NLRC further ruled that the petitioners were lawfully dismissed on grounds of serious
misconduct and willful disobedience. It found that the petitioners failed to comply with various
memoranda directing them to transfer to other workplaces and to attend training seminars for the
intended reorganization and reshuffling.

The NLRC denied the petitioners motion for reconsideration in a resolution dated April 28,
2006.17 Aggrieved, the petitioners filed a petition for certiorari under Rule 65 of the Rules of
Court before the CA.18

The CA Ruling

The CA affirmed the NLRCs ruling. The CA held that the petitioners were afforded substantive
and procedural due process. Accordingly, the petitioners deliberately did not explain their side.
Instead, they continuously resisted their transfer to other PLDT offices and violated company
rules and regulations. It also upheld the NLRCs findings on the petitioners monetary claims.
The CA denied the petitioners motion for reconsideration in a resolution dated August 28, 2009,
prompting the petitioners to file the present petition.19

The Petition

In the petition before this Court, the petitioners argue that the CA committed a reversible error
when it did not find that the NLRC committed grave abuse of discretion. They reiterate their
arguments before the lower tribunals and the CA in support of this conclusion. They also point
out that the respondents posted a bond from a surety that was not accredited by this Court and by
the NLRC. In effect, the respondents failed to perfect their appeal before the NLRC. They further
insist that the NLRC should not have admitted the respondents unverified supplemental
appeal.20

The Respondents Position

In their Comments, the respondents stress that the petitioners only raised the issue of the validity
of the appeal bond for the first time on appeal. They also reiterate their arguments before the
NLRC and the CA. They additionally submit that the petitioners arguments have been fully
passed upon and found unmeritorious by the NLRC and the CA.21

The Issues

This case presents to us the following issues:

1) Whether the CA erred when it did not find that the NLRC committed grave abuse of
discretion in giving due course to the respondents appeal;

a) Whether the respondents perfected their appeal before the NLRC; and

b) Whether the NLRC properly allowed the respondents supplemental appeal

2) Whether the respondents were estopped from submitting pieces of evidence for the
first time on appeal;

3) Whether the petitioners were illegally dismissed and are thus entitled to backwages;

4) Whether the petitioners are entitled to salary differential, overtime, holiday, premium,
service incentive leave, and thirteenth month pays; and

5) Whether the petitioners are entitled to attorneys fees.

The Courts Ruling

The respondents perfected their

appeal with the NLRC because the
revocation of the bonding company's
authority has a prospective
application

Paragraph 2, Article 223 of the Labor Code provides that "[i]n case of a judgment involving a
monetary award, an appeal by the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment appealed from."

Contrary to the respondents claim, the issue of the appeal bonds validity may be raised for the
first time on appeal since its proper filing is a jurisdictional requirement.22 The requirement that
the appeal bond should be issued by an accredited bonding company is mandatory and
jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from
using an appeal to delay or evade the employees' just and lawful claims. It is intended to assure
the workers that they will receive the money judgment in their favor upon the dismissal of the
employers appeal.23

In the present case, the respondents filed a surety bond issued by Security Pacific Assurance
Corporation (Security Pacific) on June 28, 2002. At that time, Security Pacific was still an
accredited bonding company. However, the NLRC revoked its accreditation on February 16,
2003.24 Nonetheless, this subsequent revocation should not prejudice the respondents who relied
on its then subsisting accreditation in good faith. In Del Rosario v. Philippine Journalists, Inc.,25
we ruled that a bonding companys revocation of authority is prospective in application.

However, the respondents should post a new bond issued by an accredited bonding company in
compliance with paragraph 4, Section 6, Rule 6 of the NLRC Rules of Procedure. This provision
states that "[a] cash or surety bond shall be valid and effective from the date of deposit or
posting, until the case is finally decided, resolved or terminated or the award satisfied."

The CA correctly ruled that the

NLRC properly gave due course to
the respondents supplemental
appeal

The CA also correctly ruled that the NLRC properly gave due course to the respondents
supplemental appeal. Neither the laws nor the rules require the verification of the supplemental
appeal.26 Furthermore, verification is a formal, not a jurisdictional, requirement. It is mainly
intended for the assurance that the matters alleged in the pleading are true and correct and not of
mere speculation.27 Also, a supplemental appeal is merely an addendum to the verified
memorandum on appeal that was earlier filed in the present case; hence, the requirement for
verification has substantially been complied with.

The respondents also timely filed their supplemental appeal on January 3, 2003. The records of
the case show that the petitioners themselves agreed that the pleading shall be filed until
December 18, 2002. The NLRC further extended the filing of the supplemental pleading until
January 3, 2003 upon the respondents motion for extension.
A party may only adduce evidence
for the first time on appeal if he
adequately explains his delay in the
submission of evidence and he
sufficiently proves the allegations
sought to be proven

In labor cases, strict adherence to the technical rules of procedure is not required. Time and
again, we have allowed evidence to be submitted for the first time on appeal with the NLRC in
the interest of substantial justice.28 Thus, we have consistently supported the rule that labor
officials should use all reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure, in the interest of due process.29

However, this liberal policy should still be subject to rules of reason and fairplay. The liberality
of procedural rules is qualified by two requirements: (1) a party should adequately explain
any delay in the submission of evidence; and (2) a party should sufficiently prove the
allegations sought to be proven.30 The reason for these requirements is that the liberal
application of the rules before quasi-judicial agencies cannot be used to perpetuate injustice and
hamper the just resolution of the case. Neither is the rule on liberal construction a license to
disregard the rules of procedure.31

Guided by these principles, the CA grossly erred in ruling that the NLRC did not commit grave
abuse of discretion in arbitrarily admitting and giving weight to the respondents pieces of
evidence for the first time on appeal.

A. The respondents failed to

adequately explain their delay
in the submission of evidence

We cannot accept the respondents cavalier attitude in blatantly disregarding the NLRC Rules of
Procedure. The CA gravely erred when it overlooked that the NLRC blindly admitted and
arbitrarily gave probative value to the respondents evidence despite their failure to adequately
explain their delay in the submission of evidence. Notably, the respondents delay was anchored
on their assertion that they were oblivious of the proceedings before the LA. However, the
respondents did not dispute the LAs finding that Mr. Romulo Pacia, Jr. appeared on their behalf
on April 19, 2001 and May 21, 2001.32 The respondents also failed to contest the petitioners
assertion that the respondents counsel appeared in a preliminary mandatory conference on July
5, 2001.33

Indeed, the NLRC capriciously and whimsically admitted and gave weight to the respondents
evidence despite its finding that they voluntarily appeared in the compulsory arbitration
proceedings. The NLRC blatantly disregarded the fact that the respondents voluntarily opted not
to participate, to adduce evidence in their defense and to file a position paper despite their
knowledge of the pendency of the proceedings before the LA. The respondents were also grossly
negligent in not informing the LA of the specific building unit where the respondents were
conducting their business and their counsels address despite their knowledge of their non-receipt
of the processes.34

B. The respondents failed to

sufficiently prove the
allegations sought to be
proven

Furthermore, the respondents failed to sufficiently prove the allegations sought to be proven.
Why the respondents photocopied and computerized copies of documentary evidence were not
presented at the earliest opportunity is a serious question that lends credence to the petitioners
claim that the respondents fabricated the evidence for purposes of appeal. While we generally
admit in evidence and give probative value to photocopied documents in administrative
proceedings, allegations of forgery and fabrication should prompt the adverse party to present
the original documents for inspection.35 It was incumbent upon the respondents to present the
originals, especially in this case where the petitioners had submitted their specimen signatures.
Instead, the respondents effectively deprived the petitioners of the opportunity to examine and
controvert the alleged spurious evidence by not adducing the originals. This Court is thus left
with no option but to rule that the respondents failure to present the originals raises the
presumption that evidence willfully suppressed would be adverse if produced.36

It was also gross error for the CA to affirm the NLRCs proposition that "[i]t is of common
knowledge that there are many people who use at least two or more different signatures."37 The
NLRC cannot take judicial notice that many people use at least two signatures, especially in this
case where the petitioners themselves disown the signatures in the respondents assailed
documentary evidence.38 The NLRCs position is unwarranted and is patently unsupported by
the law and jurisprudence.

Viewed in these lights, the scales of justice must tilt in favor of the employees. This conclusion
is consistent with the rule that the employers cause can only succeed on the strength of its own
evidence and not on the weakness of the employees evidence.39

The petitioners are entitled to

backwages

Based on the above considerations, we reverse the NLRC and the CAs finding that the
petitioners were terminated for just cause and were afforded procedural due process. In
termination cases, the burden of proving just and valid cause for dismissing an employee from
his employment rests upon the employer. The employers failure to discharge this burden results
in the finding that the dismissal is unjustified.40 This is exactly what happened in the present
case.

The petitioners are entitled to salary

differential, service incentive,
holiday, and thirteenth month pays
We also reverse the NLRC and the CAs finding that the petitioners are not entitled to salary
differential, service incentive, holiday, and thirteenth month pays. As in illegal dismissal cases,
the general rule is that the burden rests on the defendant to prove payment rather than on the
plaintiff to prove non-payment of these money claims.41 The rationale for this rule is that the
pertinent personnel files, payrolls, records, remittances and other similar documents which will
show that differentials, service incentive leave and other claims of workers have been paid are
not in the possession of the worker but are in the custody and control of the employer.42

The petitioners are not entitled to

overtime and premium pays

However, the CA was correct in its finding that the petitioners failed to provide sufficient factual
basis for the award of overtime, and premium pays for holidays and rest days. The burden of
proving entitlement to overtime pay and premium pay for holidays and rest days rests on the
employee because these are not incurred in the normal course of business.43 In the present case,
the petitioners failed to adduce any evidence that would show that they actually rendered service
in excess of the regular eight working hours a day, and that they in fact worked on holidays and
rest days.

The petitioners are entitled to

attorneys fees

The award of attorneys fees is also warranted under the circumstances of this case.1wphi1 An
employee is entitled to an award of attorneys fees equivalent to ten percent (10%) of the amount
of the wages in actions for unlawful withholding of wages.44

As a final note, we observe that Rodelito Ayala, Winelito Ojel, Renato Rodrego and Welito Loon
are also named as petitioners in this case. However, we deny their petition for the reason that
they were not part of the proceedings before the CA. Their failure to timely seek redress before
the CA precludes this Court from awarding them monetary claims.

All told, we find that the NLRC committed grave abuse of discretion in admitting and giving
probative value to the respondents' evidence on appeal, which errors the CA replicated when it
upheld the NLRC rulings.

WHEREFORE, based on these premises, we REVERSE and SET ASIDE the decision dated
June 5, 2009, and the resolution dated August 28, 2009 of the Court of Appeals in CA-G.R. SP
No. 95182. This case is REMANDED to the Labor Arbiter for the sole purpose of computing
petitioners' (Wilgen Loon, Jerry Arcilla, Albert Pereye, Arnold Pereye, Edgardo Obose, Arnel
Malaras, Patrocino Toetin, Evelyn Leonardo, Elmer Glocenda, Rufo Cunamay, Rolando Sajol,
Rolando Abucayon, Jennifer Natividad, Maritess Torion, Ammndo Lonzaga, Rizal Gellido,
Evirdly Haque, Myrna Vinas, Nena Abina, Emalyn Oliveros, Louie Ilagan, Joel Entig, Amel
Araneta, Benjamin Cose and William Alipao) full backwages (computed from the date of their
respective dismissals up to the finality of this decision) and their salary differential, service
incentive leave, holiday, thirteenth month pays, and attorney's fees equivalent to ten percent
(10%) of the withheld wages. The respondents are further directed to immediately post a
satisfactory bond conditioned on the satisfaction of the awards affirmed in this Decision.

SO ORDERED.

ARTURO D. BRION
Associate Justice

Dimaguila vs Monteiro

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 201011 January 27, 2014

THERESITA, JUAN, ASUNCION, PATROCINIA, RICARDO, and GLORIA, all

surnamed DIMAGUILA, Petitioners,
vs.
JOSE and SONIA A. MONTEIRO, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the
August 15, 2011Decision1 and the March 5, 2012 Resolution2 of the Court of Appeals (CA), in
CA-G.R. CV No. 92707, which affirmed the August 23, 2007 Decision3 of the Regional Trial
Court, Branch 27, Santa Cruz, Laguna (RTC), in Civil Case No. SC-3108.

The Facts

On July 5, 1993, the respondent spouses, Jose and Sonia Monteiro (Spouses Monteiro), along
with Jose, Gerasmo, Elisa, and Clarita Nobleza, filed their Complaint for Partition and Damages
before the RTC, against the pet1t10ners, Theresita, Juan, Asuncion, Patrocinia, Ricardo, and
Gloria Dimaguila (The Dimaguilas), together with Rosalina, Jonathan, Eve, Sol, Venus, Enrique,
Nina, Princess Arieta, and Evangelina Borlaza. The complaint alleged that all the pmiies were
co-owners and prayed for the pmiition of a residential house and lot located at Gat. Tayaw St.,
Liliw, Laguna, with an area of 489 square meters, and covered by Tax Declaration No. 1453.
Spouses Monteiro anchored their claim on a deed of sale executed in their favor by the heirs of
Pedro Dimaguila (Pedro).
In their Answer, the Dimaguilas and the other defendants countered that there was no co-
ownership to speak of in the first place. They alleged that the subject property, then owned by
Maria Ignacio Buenaseda, had long been partitioned equally between her two sons, Perfecto and
Vitaliano Dimaguila, through a Deed of Extrajudicial Partition, with its southern-half portion
assigned to Perfecto and the northern-half portion to Vitaliano. They claimed that they were the
heirs of Vitaliano and that Spouses Monteiro had nothing to do with the property as they were
not heirs of either Perfecto or Vitaliano.

During the course of the proceedings, several incidents were initiated, namely: (a) Motion to
Dismiss for lack of legal capacity to sue of Spouses Monteiro and for lack of cause of action; (b)
Motion for Reconsideration of the Order of denial thereof, which was denied; (c) Motion for
Production and Inspection of Documents; (d) Motion for Reconsideration of the Order granting
the same, which was denied; (e) Motion to Defer Pre-trial; (f) Notice of Consignation by the
petitioners in the exercise of their alleged right of redemption of the share being claimed by the
Spouses Monteiro in light of the deed of sale they produced and claimed to have been executed
by the heirs of Pedro in their favor; (g) Motion to Remove Sonia Monteiro (Sonia) as plaintiff,
which was denied; (h) Motion for Reconsideration thereof, which was also denied; (i) Motion for
Clarification and/or Extended Resolution; and (j) Motion to Suspend Proceedings due to a
pending Petition for Certiorari before the CA assailing several of the RTC orders. The
proceedings resumed after the promulgation by the CA of its April 5, 2000 Resolution in CA-
G.R. No. SP 52833, which upheld the assailed RTC orders.

On January 2, 2001, upon resumption of the proceedings, Spouses Monteiro filed their Motion
for Leave to Amend and/or Admit Amended Complaint.4 The RTC granted their motion. The
amended complaint abandoned the original claim for partition and instead sought the recovery of
possession of a portion of the subject property occupied by the Dimagui as and other defendants,
specifically, the potiion sold to the couple by the heirs of Pedro. Furthermore, only Spouses
Monteiro were retained as plaintiffs and the Dimaguilas as defendants.

In amending their complaint, Spouses Montiero adopted the Dimaguilas' admission in their
original answer that the subject propetiy had already been partitioned between Perfecto and
Vitaliano, through a Deed of Extrajudicial Partition, dated October 5, 1945, and that during their
lifetime, the brothers agreed that Perfecto would become the owner of the southern-hal f portion
and Vitaliano of the northern-half portion, which division was observed and respected by them
as well as their heirs and successors-in-interest.

Spouses Monteiro further averred that Perfecto was survived by Esperanza, Leandro and Pedro,
who had divided the southern-half portion equally amongst themselves, with their respective 1 /3
shares measuring 81.13 square meters each; that Pedro's share pertains to the 1 /3 of the
southern-half immediately adjacent to the northern-half adjudicated to the

Dimaguilas as heirs of Vitaliano; that on September 29, 1992, Pedro's share was sold by his heirs
to them through a Bilihan ng Lahat Naming Karapatan (Bilihan) with the acquiescence of the
heirs of Esperanza and Leandro appearing in an Affidavit of Conformity and Waiver; and that
when they attempted to take possession of the share of Pedro, they discovered that the subject
portion was being occupied by the Dimaguilas.
In their Answer5 to the amended complaint, the Dimaguilas admitted that the subject property
was inherited by, and divided equally between Perfecto and Vitaliano, but denied the admission
in their original answer that it had been actually divided into southern and nmihern portions.
Instead, they argued that the Extrajudicial Partition mentioned only the division of the subject
property "into two and share and share alike." In effect, they argued the existence of a co-
owenrship, contrary to their original position. The Dimaguilas further argued that the Bilihan did
not specify the metes and bounds of the property sold, in violation of Article 1458 of the Civil
Code. Even assuming that such had been specified, they averred that the sale of a definite portion
of a property owned in common was void since a co-owner could only sell his undivided share in
the property.

During the trial, Spouses Monteiro presented Pedrito Adrieta, brother of Sonia Monteiro (Sonia),
who testified that Perfecto was his grandfather and that at the time of Perfecto's death, he had
two properties, one of which was the subject property in Liliw, Laguna, which went to his
children, Esperanza, Leonardo and Pedro. Pedro was survived by his children Pedrito, Theresita,
Francisco, and Luis, who, in turn, sold their rights over the subject property to Sonia.

Sonia testified that she was approached by Pedro's son, Francisco, and was asked if she was
interested in purchasing Pedro's 1/3 share of the southern portion of the Bahay na Sato, and that
he showed her a deed of extrajudicial partition executed by and between Perfecto and Vitaliano,
as well as the tax declaration of the property to prove that the property had already been
partitioned between the two brothers.

Engineer Baltazar F. Mesina testified that he was the geodetic engineer hired by Spouses
Monteiro to survey the property in Liliw, and recounted that he checked the boundary of the
subject property, subdivided the lot into two and came up with a survey plan.

Crisostomo Arves, an employee from the Office of the Municipal Assessor, presented a certified
true copy of the cadastral map of Liliw and a list of claimants/owners.

Dominga Tolentino, a record officer of the Department of Environment and Natural Resources
(DENR), testified that as part of her duties, she certifies and safekeeps the records of surveyed
land, including cadastral maps from the region.

One of the Dimaguilas, Asuncion, was the sole witness for the defendants. She testified that their
first counsel made a mistake when he alleged in their original answer that the property had
already been partitioned into n01ihern and southern portions between the two brothers, as the
original answer had been rushed and they were never given a copy of it. She claimed that the
mistake was only pointed out to her by their new counsel after their former counsel withdrew due
to cancer. She further testified that there was no intention to partition the "bahay na bato" which
stood on the subject property, in order to preserve its historical and sentimental value.

Ruling of the RTC

In its August 23, 2007 Decision, the RTC ruled in favor of Spouses Monteiro and ordered the
Dimaguilas to turn over the possession of the subject 1 /3 portion of the southern-half of the
property, to wit:

WHEREOF, judgment is hereby rendered in favor of the plaintiffs and against the defendants:

a. Ordering the defendants and all persons claiming rights under them to peacefully
vacate and turn-over possession of 1/ 3 of the southern portion of the property covered by
Tax Declaration No. 1453, specifically described as "A" of Lot 877 in the sketch plan
marked as Exhibit "I", within 60 days from the finality of this Decision, failing which let
a writ of possession issue;

b. Ordering the defendants to pay the plaintiffs, jointly and solidarily, the amount of ?500
per month in the form of rent for the use of the property from July 1993 until the property
is vacated;

c. Ordering the defendants to pay the plaintiffs, jointly and solidarily, attorney's fees of
P30,000 and litigation expense of P20,000.

SO ORDERED.6

The RTC found that although the extrajudicial partition merely divided the property into two
share and share alike, evidence aliunde was appreciated to show that there was an actual division
of the property into south and north between Perfecto and Vitaliano, and that such partition was
observed and honored by their heirs. These pieces of evidence were the cadastral map of Liliw7
and a corresponding list of claimants, which showed that the subject property had long been
registered as Lot 876 (northern-half), claimed by Buenaventura Dimaguila (Buenaventura), an
heir of Vitaliano, and Lot 877 (southern-half), claimed by Perfecto.

The RTC held that the manner of partition was admitted by the Dimaguilas themselves in their
original answer. It gave no credence to the claim of Asuncion that such admission was an error
of their fonner counsel and that she was unaware of the contents of their original answer. It noted
that the Dimaguilas had strongly maintained their theory of partition from 1992 when the
complaint was first filed, and only changed their defense in 2001 when Spouses Monteiro filed
their amended complaint. It keenly observed that it was precisely their admission which
propelled Spouses Monteiro to amend their complaint from one of partition to recovery of
possession. Thus, the RTC concluded that there was indeed a partition of the subject property
into southern-half and northern-half portions between Perfecto and Vitaliano and that the
Dimaguilas were estopped from denying the same.

As to the authenticity of the Bilihan, where the 1 /3 share of Pedro was sold to Spouses
Monteiro, the RTC found the document to be regular and authentic absent any piece of evidence
to the contrary. It stated that the proper persons to contest the sale were not the Dimaguilas, who
were the heirs of Vitaliano, but the heirs of Perfecto. It noted that the records showed that the
heirs of Esperanza and Leandro (Pedro's siblings), had signified their conformity to the pa1iition
and to the sale of Pedro's 1 /3 portion.
 Ruling of the CA

In its assailed August 15, 2011 Decision, the CA affirmed the ruling of the RTC.

The CA found that Spouses Monteiro had established their case by a preponderance of evidence
thru their presentation of the Deed of Extrajudicial Partition,8 the cadastral map and the
municipal assessor's records.9 It noted, more importantly, that the Dimaguilas themselves
corroborated the claim of partition in their original answer. It likewise ruled that the petitioners
were estopped from denying their admission of partition after the respondent spouses had relied
on their judicial admission.

The Dimaguilas also insisted on their argument, which was raised before the RTC, but not
addressed, that the Bilihan should not have been admitted as evidence for lack of a documentary
stamp tax, in accordance with Section 201 of the National Internal Revenue Code (N!RC). Citing
Gabucan v. Manta10 and Del Rosario v. Hamoy,11 the CA, however, ruled that if a document
which did not bear the required documentary stamp was presented in evidence, the court should
require the proponent to affix the requisite stamp. The CA noted that the RTC had failed to direct
Spouses Monteiro to affix the stamp and merely reminded the presiding judge to be more
vigilant on similar situations in the future. Nonetheless, it held that the petitioners did not possess
the necessary personality to assail the sale between Spouses Monteiro and the heirs of Pedro
because it pe1iained to the southern-half of the property to which they had no claim.

The CA likewise found sufficient basis for the award of rentals as compensatory damages since
Spouses Monteiro were wrongfully deprived of possession of the 1/3 portion of the southern-half
of the subject property. It also upheld the award of attorney's fees and litigation expenses by the
RTC, considering that Spouses Monteiro were compelled to litigate and incur expenses to protect
their rights and interest.

In its assailed March 5, 2012 Resolution, the CA denied the petitioners' motion for
reconsideration for lack of merit.

Hence, this petition.

ASSIGNMENT OF ERRORS

THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THERE WAS AN

ACTUAL PARTITION OF THE PROPERTY COVERED BY TAX DECLARATION NO.
1453.

II

THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE 1/3 PORTION OF
THE SOUTHERN HALF OF THE PROPERTY WAS SOLD TO THE RESPONDENTS.
 III

THE COURT OF APPEALS GRAVELY ERRED IN ADMITTING IN EVIDENCE EXHIBIT

C, THE BIL/HAN NG LAHA T NAMING KARAPATAN.

IV

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE RESPONDENTS

ARE ENTITLED TO RECOVER POSSESSION OF THE 1/3 PORTION OF THE SOUTHERN
HALF OF THE PROPERTY.

THE COURT OF APPEALS GRAVELY ERRED IN FINDING THE PETITIONERS LIABLE

FOR RENTALS FOR THE USE OF THE PROPERTY FROM JULY 1993 UNTIL VACATED.

VI

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THE PETITIONERS LIABLE

FOR ATTORNEY'S FEES AND LITIGATION EXPENSES.

VII

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO CONSIDER THE

PETITIONERS' SUPPLEMENTAL ANSWER TO AMENDED COMPLAINT AND TO
GRANT THE COUNTERCLAIMS INTERPOSED THEREIN.12

The Dimaguilas argue that their original allegation regarding the partition of the subject property
into northern and southern portions was a mistake of their former counsel, and it was not their
intention to partition the property because to do so would damage the house thereon. Even
assuming an admission was made, the petitioners aver that such was made only by some, but not
all, of the co-owners; and that partition can only be made by all co-owners, and allowing the
admission is tantamount to effecting partition by only some co-owners. Spouses Monteiro
themselves, in their original complaint, made an admission that they were co-owners of the
property and asserted that there was no partition. The evidence aliunde considered by the RTC,
consisting of the cadastral map and the list of claimants, were timely objected to during the trial
as hearsay and a violation of the best evidence rule.

The petitioners reiterate that the Bilihan should not have been admitted into evidence because it
lacked the documentary stamp tax required by Section 201 of the NIRC, providing that no
document shall be admitted in evidence until the requisite stamps have been affixed thereto.
They argue that the ruling of petitioners' lack of personality to assail the deed of sale is different
from the issue of the deed of sale's admissibility as evidence. They conclude that considering that
no documentary stamp was ever affixed on the deed of sale, such should never have been
admitted into evidence and consequently, should not have been relied upon by the lower courts
to prove the sale of 1/3 of the southern portion; and that considering that the Bilihan is
inadmissible as evidence, the respondent spouses have no basis for their claim to the subject 1/3
portion of the southern-half of the property. Thus, they insist that the lower courts erred in
awarding to Spouses Monteiro the possession of the subject prope1iy, the rentals, attorney's fees
and litigation expenses, and in failing to rule on their counterclaim for demolition of
improvements and payment of damages.

The assignment of errors boils down to two main issues:

I. Whether there was a pa1iition of the subject property; and

2. Whether the 1/3 portion of the southern-half of the subject property was sold to the
respondent spouses.

Ruling of the Court

At the outset, it must be pointed out that the petitioners' assignment of errors calls for the Court
to again evaluate the evidence to determine whether there was a partition of the property and
whether the 1/3 portion of the southern half was sold to the respondent spouses. These clearly
entail questions of fact which are beyond the Court's ambit of review under Rule 45 of the Rules
of Court, especially considering that the findings of fact of the RTC were affirmed by the CA.13
On this ground alone, the present petition must be denied. Nonetheless, the Court shall delve into
these factual issues to finally put this case to rest.

Partition of the Subject Property

Spouses Monteiro, as plaintiffs in the original case, had the burden of proof to establish their
case by a preponderance of evidence, which is the weight, credit, and value of the aggregate
evidence on either side, synonymous with the term "greater weight of the evidence."
Preponderance of evidence is evidence which is more convincing to the court as worthy of belief
than that which is offered in opposition thereto.14

To prove their claim of partition, the respondent spouses presented the following: (1) the Deed of
Extrajudicial Partition, dated October 5, 1945, executed by and between the brothers Perfecto
and Vitaliano; (2) the cadastral map of Liliw Cadm-484,15 dated August 6, 1976, showing that
the subject property had been divided into southern and northern portions, registered as Lot Nos.
876 and 877; and (3) the Municipal Assessor's records16 showing that the said lots were
respectively claimed by Buenaventura and Perfecto.

It is undisputed that the Deed of Extrajudicial Partition stated that Perfecto and Vitaliano agreed
"to divide between them into two and share and share alike" the subject property, including the
house situated thereon. It appears, however, that the property was actually partitioned into
definite portions, namely, southern and northern halves, as reflected in the cadastral map of
Liliw, which were respectively claimed by an heir of Vitaliano and Perfecto himself. It, thus,
appears that the subject property had already been partitioned into definite portions more than 20
years prior to the original complaint for partition filed in 1993, and that such division had been
observed by the brothers' heirs. As earlier pointed out, the petitioners themselves admitted to this
very fact in their original answer, to wit:

(b) On September 5, 1945 the brothers PERFECTO and VITALIANO DIMAGUILA executed a
deed of EXTRA JUDICIAL PARTITION of the aforedescribed property dividing the same into
two (2) equal parts as indicated in the aforesaid deed as follows, to wit:

xxx

(c) As a result of the foregoing partition and as known by all the parties in this case from the
beginning or as soon as they reached the age of discernment PERFECTO DIMAGUILA became
the sole and exclusive owner of the southern half of the aforedescribed property and
VITALIANO DIMAGUILA became the sole owner of the northern half of the same property;
the house that was built thereon and still existing up to this time was likewise equally divided
between the two (2) DIMAGUILA brothers in accordance with the extrajudicial partition of half
equal shares;

xxx

2. In other words, the share of VITALIANO DIMAGUILA in the above described property has
already been long segregated and had passed on to his heirs as is very well known by all the
parties in this case;17

xxx

(Emphases in the Original)

Section 418 of Rule 129 of the Rules of Court provides that an admission made by a pa1iy in the
course of the proceedings in the same case does not require proof, and may be contradicted only
by showing that it was made through palpable mistake. The petitioners argue that such admission
was the palpable mistake of their former counsel in his rush to file the answer, a copy of which
was not provided to them. Petitioner Asuncion testified:

Q So, why was that allegations (sic) made in the Answer?

A May be, (sic) in his rush to file the Answer, Atty. Paredes filed the same without giving us a
copy ...19

This contention is unacceptable. It is a purely self-serving claim unsupported by any iota of

evidence. Bare allegations, unsubstantiated by evidence, are not equivalent to proof.20
Furthermore, the Court notes that this position was adopted by the petitioners only almost eight
(8) years after their original answer was filed, in response to the amended complaint of the
respondent spouses. In their original answer to the complaint for partition, their claim that there
was already a partition into northern-half and southern-half portions, was the very essence of
their defense. It was precisely this admission which moved the respondent spouses to amend
their complaint. The petitioners cannot now insist that the very foundation of their original
defense was a palpable mistake.

Article 143121 of the Civil Code provides that through estoppel, an admission is rendered
conclusive upon the person making it, and cannot be denied or disproved as against the person
relying thereon. The respondent spouses had clearly relied on the petitioners' admission and so
amended their original complaint for partition to one for recovery of possession of a portion of
the subject property. Thus, the petitioners are now estopped from denying or attempting to prove
that there was no partition of the property.

Considering that an admission does not require proof, the admission of the petitioners would
actually be sufficient to prove the partition even without the documents presented by the
respondent spouses. If anything, the additional evidence they presented only served to
corroborate the petitioners' admission.

The petitioners argue that they timely objected to the cadastral map and the list of claimants
presented by the respondent spouses, on the ground that they violated the rule on hearsay and the
best evidence rule.

Anent the best evidence rule, Section 3( d) of Rule 130 of the Rules of Court provides that when
the subject of inquiry is the contents of a document, no evidence shall be admissible other than
the original document itself, except when the original is a public record in the custody of a public
officer or is recorded in a public office.22 Section 7 of the same Rule provides that when the
original of a document is in the custody of a public officer or is recorded in a public office, its
contents may be proved by a certified copy issued by the public officer in custody thereof.23
Section 24 of Rule 132 provides that the record of public documents may be evidenced by a copy
attested by the officer having the legal custody or the record.24

Certified true copies of the cadastral map of Liliw and the corresponding list of claimants of the
area covered by the map were presented by two public officers. The first was Crisostomo Arves,
Clerk III of the Municipal Assessor's Office, a repository of such documents. The second was
Dominga Tolentino, a DENR employee, who, as a record officer, certifies and safekeeps records
of surveyed land involving cadastral maps. The cadastral maps and the list of claimants, as
ce1iified true copies of original public records, fall under the exception to the best evidence rule.

As to the hearsay rule, Section 44 of Rule 130 of the Rules of Court similarly provides that
entries in official records are an exception to the rule.25 The rule provides that entries in official
records made in the performance of the duty of a public officer of the Philippines, or by a person
in the performance of a duty specially enjoined by law, are prima facie evidence of the facts
therein stated. The necessity of this rule consists in the inconvenience and difficulty of requiring
the official's attendance as a witness to testify to the innumerable transactions in the course of his
duty. The document's trustworthiness consists in the presumption of regularity of performance of
official duty.26

Cadastral maps are the output of cadastral surveys. The DENR is the department tasked to
execute, supervise and manage the conduct of cadastral surveys.27 It is, therefore, clear that the
cadastral map and the corresponding list of claimants qualify as entries in official records as they
were prepared by the DENR, as mandated by law. As such, they are exceptions to the hearsay
rule and are primafacie evidence of the facts stated therein.

Even granting that the petitioners had not admitted the partition, they presented no evidence to
contradict the evidence of the respondent spouses. Thus, even without the admission of the
petitioners, the respondent spouses proved by a preponderance of evidence that there had indeed
been a partition of the subject property.

Sale of 1/3 Portion of the Southern-half

To prove that 1/3 of the southern-half portion of the subject property was sold to them, Spouses
Monteiro presented a deed of sale entitled Bilihan ng Lahat Naming Karapatan,28 dated
September 29, 1992, wherein Pedro's share was sold by his heirs to them, with the acquiescence
of the heirs of Esperanza and Leandro in an Affidavit of Conformity and Waiver.29 The
petitioners argue that the Bilihan should not have been admitted into evidence because it lacked
the documentary stamp tax required by Section 201 of the NIRC.

On August 29, 1994, the petitioners filed a motion for the production and/or inspection of
documents,30 praying that Spouses Monteiro be ordered to produce the deed of sale, which they
cited as the source of their rights as co-owners. On November 20, 1995, Spouses Monteiro
submitted their compliance,31 furnishing the RTC and the petitioners with a copy32 of the
Bilihan. On January 3, 1996, the petitioners filed a notice of consignation,33 manifesting that
they had attempted to exercise their right of redemption as co-owners of the 1/3 portion of the
southern half of the property under Article 162334 of the Civil Code by sending and tendering
payment of redemption to Spouses Monteiro, which was, however, returned.

By filing the notice of consignation and tendering their payment for the redemption of the 1/3
portion of the southern-half of the property, the petitioners, in effect, admitted the existence, due
execution and validity of the Bilihan. Consequently, they are now estopped from questioning its
admissiblity in evidence for relying on such for their right of redemption. Additionally, the Court
notes that the copy35 of the Bilihan which was originally submitted by Spouses Monteiro with
its compliance filed on November 20, 1995, does in fact bear a documentary stamp tax. It could
only mean that the documentary stamp tax on the sale was properly paid. The Bilihan was,
therefore, properly admitted into evidence and considered by the RTC.

In any case, as correctly held by the lower cou1is, the petitioners, as heirs of Vitaliano, who
inherited the northern-half po1iion of the subject property, do not possess the necessary
personality to assail the sale of the southern-half portion between Spouses Monteiro and the heirs
of Pedro.1wphi1 They are not real parties-in-interest who stand to be benefited or injured by the
sale of the 1/3 portion of the southern-half over which they have absolutely no right. As correctly
ruled by the courts below, only fellow co-owners have the personality to assail the sale, namely,
the heirs of Pedro's siblings, Esperanza and Leandro. They have, however, expressly aquiesced
to the sale and waived their right to the property in the affidavit presented by Spouses
Monteiro.36 As such, the petitioners have no right to their counterclaims of demolition of
improvements and payment of damages.
With Spouses Monteiro having sufficiently proved their claim over the subject I /3 portion of the
southern-half of the prope1iy through the Bilihan, the lower courts did not err in awarding
possession, rentals, attorney's fees, and litigation expenses to them.

The Court, however, finds that the award of rentals should be reckoned from January 2, 2001, the
date the Spouses Monteiro filed their Amended Complaint seeking recovery of the subject
portion. Interest at the rate of 6% per annum shall also be imposed on the total amount of rent
due from finality of this Decision until fully paid.37

WHEREFORE, the petition is DENIED. The August 15, 2011 Decision and the March 15, 2012
Resolution of the Court of Appeals, in CA-G .R. CV No. 92707 are AFFIRMED with
MODIFICATION, in that:

a. The award of rent at the rate of P500.00 per month shall be reckoned from January 2,
2001 until the property is vacated; and

b. Interest at the rate of 6% per annum shall be imposed on the total amount of rent due
from finality of this Decision until fully paid.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

b. Parole Evidence

Ortanez vs Court of Appeals

SECOND DIVISION

G.R. No. 110662 August 4, 1994

TERESITA SALCEDO-ORTANEZ, petitioner,

vs.
COURT OF APPEALS, HON. ROMEO F. ZAMORA, Presiding Judge, Br. 94, Regional Trial Court of Quezon City and RAFAEL S.
ORTANEZ, respondents.

Oscar A. Inocentes & Associates Law Office for petitioner.

Efren A. Santos for private respondent.

PADILLA, J.:
This is a petition for review under Rule 45 of the Rules of Court which seeks to reverse the decision * of respondent Court of Appeals in CA-
G. R. SP No. 28545 entitled "Teresita Salcedo-Ortanez versus Hon. Romeo F. Zamora, Presiding Judge, Br. 94, Regional Trial Court of
Quezon City and Rafael S. Ortanez".

The relevant facts of the case are as follows:

On 2 May 1990, private respondent Rafael S. Ortanez filed with the Regional Trial Court of Quezon City a complaint for annulment of
marriage with damages against petitioner Teresita Salcedo-Ortanez, on grounds of lack of marriage license and/or psychological incapacity
of the petitioner. The complaint was docketed as Civil Case No. Q-90-5360 and raffled to Branch 94, RTC of Quezon City presided over by
respondent Judge Romeo F. Zamora.

Private respondent, after presenting his evidence, orally formally offered in evidence Exhibits "A" to "M".

Among the exhibits offered by private respondent were three (3) cassette tapes of alleged telephone conversations between petitioner and
unidentified persons.

Petitioner submitted her Objection/Comment to private respondent's oral offer of evidence on 9 June 1992; on the same day, the trial court
admitted all of private respondent's offered evidence.

A motion for reconsideration from petitioner was denied on 23 June 1992.

A petition for certiorari was then filed by petitioner in the Court of Appeals assailing the admission in evidence of the aforementioned cassette
tapes.

On 10 June 1993, the Court of Appeals rendered judgment which is the subject of the present petition, which in part reads:

It is much too obvious that the petition will have to fail, for two basic reasons:

(1) Tape recordings are not inadmissible per se. They and any other variant thereof can be admitted in evidence for
certain purposes, depending on how they are presented and offered and on how the trial judge utilizes them in the
interest of truth and fairness and the even handed administration of justice.

(2) A petition for certiorari is notoriously inappropriate to rectify a supposed error in admitting evidence adduced during
trial. The ruling on admissibility is interlocutory; neither does it impinge on jurisdiction. If it is erroneous, the ruling
should be questioned in the appeal from the judgment on the merits and not through the special civil action of certiorari.
The error, assuming gratuitously that it exists, cannot be anymore than an error of law, properly correctible by appeal
and not by certiorari. Otherwise, we will have the sorry spectacle of a case being subject of a counterproductive "ping-
pong" to and from the appellate court as often as a trial court is perceived to have made an error in any of its rulings
with respect to evidentiary matters in the course of trial. This we cannot sanction.

WHEREFORE, the petition for certiorari being devoid of merit, is hereby DISMISSED. 1

From this adverse judgment, petitioner filed the present petition for review, stating:

Grounds for Allowance of the Petition

10. The decision of respondent [Court of Appeals] has no basis in law nor previous
decision of the Supreme Court.

10.1 In affirming the questioned order of respondent judge, the Court of

Appeals has decided a question of substance not theretofore determined
by the Supreme Court as the question of admissibility in evidence of tape
recordings has not, thus far, been addressed and decided squarely by
the Supreme Court.

11. In affirming the questioned order of respondent judge, the Court of Appeals has
likewise rendered a decision in a way not in accord with law and with applicable decisions
of the Supreme Court.
 11.1 Although the questioned order is interlocutory in nature, the same
can still be [the] subject of a petition for certiorari. 2

The main issue to be resolved is whether or not the remedy of certiorari under Rule 65 of the Rules of
Court was properly availed of by the petitioner in the Court of Appeals.

The extraordinary writ of certiorari is generally not available to challenge an interlocutory order of a trial
court. The proper remedy in such cases is an ordinary appeal from an adverse judgment, incorporating in
said appeal the grounds for assailing the interlocutory order.

However, where the assailed interlocutory order is patently erroneous and the remedy of appeal would
not afford adequate and expeditious relief, the Court may allow certiorari as a mode of redress. 3

In the present case, the trial court issued the assailed order admitting all of the evidence offered by
private respondent, including tape recordings of telephone conversations of petitioner with unidentified
persons. These tape recordings were made and obtained when private respondent allowed his friends
from the military to wire tap his home telephone. 4

Rep. Act No. 4200 entitled "An Act to Prohibit and Penalize Wire Tapping and Other Related Violations of
the Privacy of Communication, and for other purposes" expressly makes such tape recordings
inadmissible in evidence. The relevant provisions of Rep. Act No. 4200 are as follows:

Sec. 1. It shall be unlawful for any person, not being authorized by all the parties
to any private communication or spoken word, to tap any wire or cable, or by
using any other device or arrangement, to secretly overhear, intercept, or record
such communication or spoken word by using a device commonly known as a
dictaphone or dictagraph or detectaphone or walkie-talkie or tape-recorder, or
however otherwise described. . . .

Sec. 4. Any communication or spoken word, or the existence, contents,

substance, purport, or meaning of the same or any part thereof, or any
information therein contained, obtained or secured by any person in violation of
the preceding sections of this Act shall not be admissible in evidence in any
judicial, quasi-judicial, legislative or administrative hearing or investigation.

Clearly, respondents trial court and Court of Appeals failed to consider the afore-quoted provisions of the
law in admitting in evidence the cassette tapes in question. Absent a clear showing that both parties to
the telephone conversations allowed the recording of the same, the inadmissibility of the subject tapes is
mandatory under Rep. Act No. 4200.

Additionally, it should be mentioned that the above-mentioned Republic Act in Section 2 thereof imposes
a penalty of imprisonment of not less than six (6) months and up to six (6) years for violation of said Act. 5

We need not address the other arguments raised by the parties, involving the applicability of American
jurisprudence, having arrived at the conclusion that the subject cassette tapes are inadmissible in
evidence under Philippine law.

WHEREFORE, the decision of the Court of Appeals in CA-G. R. SP No. 28545 is hereby SET ASIDE.
The subject cassette tapes are declared inadmissible in evidence.

SO ORDERED.

Narvasa, C.J., Regalado, Puno and Mendoza, JJ., concur.

 Lapu lapu foundation vs Court of Appeals

SECOND DIVISION

G.R. No. 126006 January 29, 2004

LAPULAPU FOUNDATION, INC. and ELIAS Q. TAN, Petitioners,

vs.
COURT OF APPEALS (Seventeenth Division) and ALLIED BANKING CORP.,
Respondents.

DECISION

CALLEJO, SR., J.:

Before the Court is the petition for review on certiorari filed by the Lapulapu Foundation, Inc.
and Elias Q. Tan seeking to reverse and set aside the Decision1 dated June 26, 1996 of the Court
of Appeals (CA) in CA-G.R. CV No. 37162 ordering the petitioners, jointly and solidarily, to
pay the respondent Allied Banking Corporation the amount of P493,566.61 plus interests and
other charges. Likewise, sought to be reversed and set aside is the appellate courts Resolution
dated August 19, 1996 denying the petitioners motion for reconsideration.

The case stemmed from the following facts:

Sometime in 1977, petitioner Elias Q. Tan, then President of the co-petitioner Lapulapu
Foundation, Inc., obtained four loans from the respondent Allied Banking Corporation covered
by four promissory notes in the amounts of P100,000 each. The details of the promissory notes
are as follows:

P/N No. Date of P/N Maturity Date Amount as of 1/23/79

BD No. 504 Nov. 7, 1977 Feb. 5, 1978 P123,377.76

BD No. 621 Nov. 28, 1977 Mar. 28, 1978 P123,411.10

BD No. 716 Dec. 12, 1977 Apr. 11, 1978 P122,322.21

BD No. 839 Jan. 5, 1978 May 5, 1978 P120,455.542

As of January 23, 1979, the entire obligation amounted to P493,566.61 and despite demands
made on them by the respondent Bank, the petitioners failed to pay the same. The respondent
Bank was constrained to file with the Regional Trial Court of Cebu City, Branch 15, a complaint
seeking payment by the petitioners, jointly and solidarily, of the sum of P493,566.61
representing their loan obligation, exclusive of interests, penalty charges, attorneys fees and
costs.

In its answer to the complaint, the petitioner Foundation denied incurring indebtedness from the
respondent Bank alleging that the loans were obtained by petitioner Tan in his personal capacity,
for his own use and benefit and on the strength of the personal information he furnished the
respondent Bank. The petitioner Foundation maintained that it never authorized petitioner Tan to
co-sign in his capacity as its President any promissory note and that the respondent Bank fully
knew that the loans contracted were made in petitioner Tans personal capacity and for his own
use and that the petitioner Foundation never benefited, directly or indirectly, therefrom. The
petitioner Foundation then interposed a cross-claim against petitioner Tan alleging that he,
having exceeded his authority, should be solely liable for said loans, and a counterclaim against
the respondent Bank for damages and attorneys fees.

For his part, petitioner Tan admitted that he contracted the loans from the respondent Bank in his
personal capacity. The parties, however, agreed that the loans were to be paid from the proceeds
of petitioner Tans shares of common stocks in the Lapulapu Industries Corporation, a real estate
firm. The loans were covered by promissory notes which were automatically renewable ("rolled-
over") every year at an amount including unpaid interests, until such time as petitioner Tan was
able to pay the same from the proceeds of his aforesaid shares.

According to petitioner Tan, the respondent Banks employee required him to affix two
signatures on every promissory note, assuring him that the loan documents would be filled out in
accordance with their agreement. However, after he signed and delivered the loan documents to
the respondent Bank, these were filled out in a manner not in accord with their agreement, such
that the petitioner Foundation was included as party thereto. Further, prior to its filing of the
complaint, the respondent Bank made no demand on him.

After due trial, the court a quo rendered judgment the dispositive portion of which reads:

WHEREFORE, in view of the foregoing evidences [sic], arguments and considerations, this
court hereby finds the preponderance of evidence in favor of the plaintiff and hereby renders
judgment as follows:

"1. Requiring the defendants Elias Q. Tan and Lapulapu Foundation, Inc. [the petitioners
herein] to pay jointly and solidarily to the plaintiff Allied Banking Corporation [the
respondent herein] the amount of P493,566.61 as principal obligation for the four
promissory notes, including all other charges included in the same, with interest at 14%
per annum, computed from January 24, 1979, until the same are fully paid, plus 2%
service charges and 1% monthly penalty charges.

"2. Requiring the defendants Elias Q. Tan and Lapulapu Foundation, Inc., to pay jointly
and solidarily, attorneys fees in the equivalent amount of 25% of the total amount due
from the defendants on the promissory notes, including all charges;
 "3. Requiring the defendants Elias Q. Tan and Lapulapu Foundation, Inc., to pay jointly
and solidarily litigation expenses of P1,000.00 plus costs of the suit."3

On appeal, the CA affirmed with modification the judgment of the court a quo by deleting the
award of attorneys fees in favor of the respondent Bank for being without basis.

The appellate court disbelieved petitioner Tans claim that the loans were his personal loans as
the promissory notes evidencing them showed upon their faces that these were obligations of the
petitioner Foundation, as contracted by petitioner Tan himself in his "official and personal
character." Applying the parol evidence rule, the CA likewise rejected petitioner Tans assertion
that there was an unwritten agreement between him and the respondent Bank that he would pay
the loans from the proceeds of his shares of stocks in the Lapulapu Industries Corp.

Further, the CA found that demand had been made by the respondent Bank on the petitioners
prior to the filing of the complaint a quo. It noted that the two letters of demand dated January 3,
19794 and January 30, 19795 asking settlement of the obligation were sent by the respondent
Bank. These were received by the petitioners as shown by the registry return cards6 presented
during trial in the court a quo.

Finally, like the court a quo, the CA applied the doctrine of piercing the veil of corporate entity
in holding the petitioners jointly and solidarily liable. The evidence showed that petitioner Tan
had represented himself as the President of the petitioner Foundation, opened savings and current
accounts in its behalf, and signed the loan documents for and in behalf of the latter. The CA,
likewise, found that the petitioner Foundation had allowed petitioner Tan to act as though he had
the authority to contract the loans in its behalf. On the other hand, petitioner Tan could not
escape liability as he had used the petitioner Foundation for his benefit.

Aggrieved, the petitioners now come to the Court alleging that:

I. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE LOANS

SUBJECT MATTER OF THE INSTANT PETITION ARE ALREADY DUE AND
DEMANDABLE DESPITE ABSENCE OF PRIOR DEMAND.

II. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE PAROL

EVIDENCE RULE AND THE DOCTRINE OF PIERCING THE VEIL OF
CORPORATE ENTITY AS BASIS FOR ADJUDGING JOINT AND SOLIDARY
LIABILITY ON THE PART OF PETITIONERS ELIAS Q. TAN AND LAPULAPU
FOUNDATION, INC.7

The petitioners assail the appellate courts finding that the loans had become due and
demandable in view of the two demand letters sent to them by the respondent Bank. The
petitioners insist that there was no prior demand as they vigorously deny receiving those letters.
According to petitioner Tan, the signatures on the registry return cards were not his.

The petitioners denial of receipt of the demand letters was rightfully given scant consideration
by the CA as it held:
Exhibits "R" and "S" are two letters of demand, respectively dated January 3, 1979 and January
30, 1979, asking settlement of the obligations covered by the promissory notes. The first letter
was written by Ben Tio Peng Seng, Vice-President of the bank, and addressed to Lapulapu
Foundation, Inc., attention of Mr. Elias Q. Tan, President, while the second was a final demand
written by the appellees counsel, addressed to both defendants-appellants, and giving them five
(5) days from receipt within which to settle or judicial action would be instituted against them.
Both letters were duly received by the defendants, as shown by the registry return cards, marked
as Exhibits "R-2" and "S-1," respectively. The allegation of Tan that he does not know who
signed the said registry return receipts merits scant consideration, for there is no showing that the
addresses thereon were wrong. Hence, the disputable presumption "that a letter duly directed and
mailed was received in the regular course of mail" (per par. V, Section 3, Rule 131 of the
Revised Rules on Evidence) still holds.8

There is no dispute that the promissory notes had already matured. However, the petitioners
insist that the loans had not become due and demandable as they deny receipt of the respondent
Banks demand letters. When presented the registry return cards during the trial, petitioner Tan
claimed that he did not recognize the signatures thereon. The petitioners allegation and denial
are self-serving. They cannot prevail over the registry return cards which constitute documentary
evidence and which enjoy the presumption that, absent clear and convincing evidence to the
contrary, these were regularly issued by the postal officials in the performance of their official
duty and that they acted in good faith.9 Further, as the CA correctly opined, mails are presumed
to have been properly delivered and received by the addressee "in the regular course of the
mail."10 As the CA noted, there is no showing that the addresses on the registry return cards were
wrong. It is the petitioners burden to overcome the presumptions by sufficient evidence, and
other than their barefaced denial, the petitioners failed to support their claim that they did not
receive the demand letters; therefore, no prior demand was made on them by the respondent
Bank.

Having established that the loans had become due and demandable, the Court shall now resolve
the issue of whether the CA correctly held the petitioners jointly and solidarily liable therefor.

In disclaiming any liability for the loans, the petitioner Foundation maintains that these were
contracted by petitioner Tan in his personal capacity and that it did not benefit therefrom. On the
other hand, while admitting that the loans were his personal obligation, petitioner Tan avers that
he had an unwritten agreement with the respondent Bank that these loans would be renewed on a
year-to-year basis and paid from the proceeds of his shares of stock in the Lapulapu Industries
Corp.

These contentions are untenable.

The Court particularly finds as incredulous petitioner Tans allegation that he was made to sign
blank loan documents and that the phrase "IN MY OFFICIAL/PERSONAL CAPACITY" was
superimposed by the respondent Banks employee despite petitioner Tans protestation. The
Court is hard pressed to believe that a businessman of petitioner Tans stature could have been so
careless as to sign blank loan documents.
In contrast, as found by the CA, the promissory notes11 clearly showed upon their faces that they
are the obligation of the petitioner Foundation, as contracted by petitioner Tan "in his official
and personal capacity."12 Moreover, the application for credit accommodation,13 the signature
cards of the two accounts in the name of petitioner Foundation,14 as well as New Current
Account Record,15 all accompanying the promissory notes, were signed by petitioner Tan for and
in the name of the petitioner Foundation.16 These documentary evidence unequivocally and
categorically establish that the loans were solidarily contracted by the petitioner Foundation and
petitioner Tan.

As a corollary, the parol evidence rule likewise constrains this Court to reject petitioner Tans
claim regarding the purported unwritten agreement between him and the respondent Bank on the
payment of the obligation. Section 9, Rule 130 of the of the Revised Rules of Court provides that
"[w]hen the terms of an agreement have been reduced to writing, it is to be considered as
containing all the terms agreed upon and there can be, between the parties and their successors-
in-interest, no evidence of such terms other than the contents of the written agreement."17

In this case, the promissory notes are the law between the petitioners and the respondent Bank.
These promissory notes contained maturity dates as follows: February 5, 1978, March 28, 1978,
April 11, 1978 and May 5, 1978, respectively. That these notes were to be paid on these dates is
clear and explicit. Nowhere was it stated therein that they would be renewed on a year-to-year
basis or "rolled-over" annually until paid from the proceeds of petitioner Tans shares in the
Lapulapu Industries Corp. Accordingly, this purported unwritten agreement could not be made to
vary or contradict the terms and conditions in the promissory notes.

Evidence of a prior or contemporaneous verbal agreement is generally not admissible to vary,

contradict or defeat the operation of a valid contract.18 While parol evidence is admissible to
explain the meaning of written contracts, it cannot serve the purpose of incorporating into the
contract additional contemporaneous conditions which are not mentioned at all in writing, unless
there has been fraud or mistake.19 No such allegation had been made by the petitioners in this
case.

Finally, the appellate court did not err in holding the petitioners jointly and solidarily liable as it
applied the doctrine of piercing the veil of corporate entity. The petitioner Foundation asserts
that it has a personality separate and distinct from that of its President, petitioner Tan, and that it
cannot be held solidarily liable for the loans of the latter.1wphi1

The Court agrees with the CA that the petitioners cannot hide behind the corporate veil under the
following circumstances:

The evidence shows that Tan has been representing himself as the President of Lapulapu
Foundation, Inc. He opened a savings account and a current account in the names of the
corporation, and signed the application form as well as the necessary specimen signature cards
(Exhibits "A," "B" and "C") twice, for himself and for the foundation. He submitted a notarized
Secretarys Certificate (Exhibit "G") from the corporation, attesting that he has been authorized,
inter alia, to sign for and in behalf of the Lapulapu Foundation any and all checks, drafts or other
orders with respect to the bank; to transact business with the Bank, negotiate loans, agreements,
obligations, promissory notes and other commercial documents; and to initially obtain a loan for
P100,000.00 from any bank (Exhibits "G-1" and "G-2"). Under these circumstances, the
defendant corporation is liable for the transactions entered into by Tan on its behalf.20

Per its Secretarys Certificate, the petitioner Foundation had given its President, petitioner Tan,
ostensible and apparent authority to inter alia deal with the respondent Bank. Accordingly, the
petitioner Foundation is estopped from questioning petitioner Tans authority to obtain the
subject loans from the respondent Bank. It is a familiar doctrine that if a corporation knowingly
permits one of its officers, or any other agent, to act within the scope of an apparent authority, it
holds him out to the public as possessing the power to do those acts; and thus, the corporation
will, as against anyone who has in good faith dealt with it through such agent, be estopped from
denying the agents authority.21

In fine, there is no cogent reason to deviate from the CAs ruling that the petitioners are jointly
and solidarily liable for the loans contracted with the respondent Bank.

WHEREFORE, premises considered, the petition is DENIED and the Decision dated June 26,
1996 and Resolution dated August 19, 1996 of the Court of Appeals in CA-G.R. CV No. 37162
are AFFIRMED in toto.

SO ORDERED.

Puno, (Chairman) Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

Leoveras vs Valdez

THIRD DIVISION

G.R. No. 169985 June 15, 2011

MODESTO LEOVERAS, Petitioner,

vs.
CASIMERO VALDEZ, Respondent.

DECISION

BRION, J.:

Before the Court is a petition for review on certiorari1 assailing the March 31, 2005 decision2 and
the October 6, 2005 resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 68549. The
CA decision reversed the June 23, 2000 decision4 of the Regional Trial Court (RTC), Branch 46,
Urdaneta City, Pangasinan, dismissing respondent Casimero Valdezs complaint for annulment
of title, reconveyance and damages against petitioner Modesto Leoveras.
 FACTUAL ANTECEDENTS

Maria Sta. Maria and Dominga Manangan were the registered owners - three-fourths () and
one-fourth () pro-indiviso, respectively - of a parcel of land located in Poblacion, Manaoag,
Pangasinan, covered by Original Certificate of Title (OCT) No. 24695, with an area of 28,171
square meters.5

In September 1932, Sta. Maria sold her three-fourths () share to Benigna Llamas.6 The sale was
duly annotated at the back of OCT No. 24695. When Benigna died in 1944,7 she willed her
three-fourths () share equally to her sisters Alejandra Llamas and Josefa Llamas.8 Thus,
Alejandra and Josefa each owned one-half () of Benignas three-fourths () share.

On June 14, 1969, Alejandras heirs sold their predecessors one-half () share (roughly
equivalent to 10,564 square meters) to the respondent, as evidenced by a Deed of Absolute Sale.9

Also on June 14, 1969, Josefa sold her own one-half () share (subject property) to the
respondent and the petitioner, as evidenced by another Deed of Absolute Sale.10 On even date,
the respondent and the petitioner executed an Agreement,11 allotting their portions of the subject
property.

WITNESSETH

That we [petitioner and respondent] are the absolute owners of [the subject property] which is
particularly described as follows:

xxx

That our ownership over the said portion mentioned above is evidenced by a Deed of Absolute
Sale xxx

That in said deed of sale mentioned in the immediate preceding paragraph, our respective share
consist of 5, 282.13 [one-half of 10,564 square meters] square meter each.

That we hereby agreed and covenanted that our respective share shall be as follows:

Modesto Leoveras 3,020 square meters residential portion on the northern part near the
Municipal road of Poblacion Pugaro, Manaoag, Pangasinan;

Casimero Valdez 7,544.2712 square meters of the parcel of land described above.13

On June 8, 1977, the petitioner and the respondent executed an Affidavit of Adverse Claim over
the subject property.14 The parties took possession of their respective portions of the subject
property and declared it in their name for taxation purposes.15

In 1996, the respondent asked the Register of Deeds of Lingayen, Pangasinan on the
requirements for the transfer of title over the portion allotted to him on the subject property. To
his surprise, the respondent learned that the petitioner had already obtained in his name two
transfer certificates of title (TCTs): one, TCT No. 195812 - covering an area of 3,020 square
meters; and two, TCT No. 195813 - covering an area of 1,004 square meters (or a total of 4,024
square meters).

The Register of Deeds informed the respondent that they could not find the record of OCT No.
24695; instead, the Register of Deeds furnished the respondent with the following16 (collectively,
petitioners documents):

1. Two (2) deeds of absolute sale dated June 14, 1969, both executed by Sta. Maria,
purportedly conveying an unspecified portion of OCT No. 24695 as follows:

a. 11, 568 square meters to the respondent and petitioner17

b. 8, 689 square meters to one Virgilia Li Meneses18

2. Deed of Absolute Sale (Benigna Deed) also dated June 14, 1969 executed by
Benigna19 which reads:

I, Benigna Llamas, Fernandez xxx do sell xxx by way of ABSOLUTE SALE unto the
said Casimero Valdez, Modesto Leoveras and Virgilia Meneses their heirs and assigns,
7,544 sq.m.; 4,024 sq. m. and 8,689 sq. m. more or less respectively of a parcel of land
which is particularly described as follows:

"A parcel of land xxx covered by [OCT No.] 24695." (Emphases added)

3. Subdivision Plan of PSU 21864 of OCT No. 2469520

4. Affidavit of Confirmation of Subdivision21 dated May 3, 1994 (Affidavit), which

reads:

That we, Virgilia Li Meneses, xxx Dominga Manangan; Modesto Leoveras; and Casimero
Valdez xxx

xxx are co-owners of a certain parcel of land with an area of 28, 171 sq. m. more or less in
subdivision plan Psu 21864 xxx covered by [OCT No.] 24695 situated at Poblacion (now
Pugaro), Manaoag, Pangasinan;

xxx we agree xxx to subdivide and hereby confirmed the subdivision in the following manner
xxx:

Lot 2 with an area of 3, 020 sq. m. xxx to Modesto Leoveras xxx;

Lot 3 with an area of 1,004 sq. m. xxx to Modesto Leoveras xxx;

Lot 4 with an area of 7,544 sq. m. xxx to Casimero Valdez xxx;

Lot 5 with an area of 8, 689 sq. m. xxx to Virgilia Meneses;

Lot 6 with an area of 7,043 sq. m. xxx to Dominga Manangan (Emphasis supplied.)

On June 21, 1996, the respondent filed a complaint for Annulment of Title, Reconveyance and
Damages against the petitioner, seeking the reconveyance of the 1,004-square meter portion
(disputed property) covered by TCT No. 195813, on the ground that the petitioner is entitled
only to the 3,020 square meters identified in the parties Agreement.

The respondent sought the nullification of the petitioners titles by contesting the authenticity of
the petitioners documents. Particularly, the respondent assailed the Benigna Deed by presenting
Benignas death certificate. The respondent argued that Benigna could not have executed a deed,
which purports to convey 4,024 square meters to the petitioner, in 1969 because Benigna already
died in 1944. The respondent added that neither could Sta. Maria have sold to the parties her
three-fourths () share in 1969 because she had already sold her share to Benigna in 1932.22 The
respondent denied his purported signature appearing in the Affidavit,23 and prayed for:

a) xxx the cancellation of the [petitioners documents];

b) the cancellation of TCT No. 195813 in the name of Modesto Leoveras and that it be
reconveyed to the [respondent];

c) the cancellation and nullification of [TCT No. 195812] covering an area of 3,020
square meters xxx;

d) [the issuance of] title xxx in the name of [respondent] over an area of 17, 104 square
meters of OCT 24695; 24 (Underscoring supplied)

In his defense, the petitioner claimed that the parties already had (i) delineated their respective
portions of the subject property even before they acquired it in 1969 and (ii) agreed that upon
acquisition, each would own the portion as delineated; that the area he actually possessed and
subsequently acquired has a total area of 4,024 square meters, which he subdivided into two
portions and caused to be covered by the two TCTs in question. The petitioner claimed that in
signing the Agreement, he was led to believe, based on the parties rough estimation, that the
area he actually possessed is only 3,020 square meters contrary to the parties real intention - i.e.,
the extent of their ownership would be based on their actual possession.25

The petitioner further claimed that the respondent voluntarily participated in executing the
Affidavit, which corrected the mistake in the previously executed Agreement26 and confirmed
the petitioners ownership over the disputed property. The petitioner asked for the dismissal of
the complaint and for a declaration that he is the lawful owner of the parcels of land covered by
his titles.

RTC RULING
The RTC dismissed the complaint. The court ruled that the respondent failed to preponderantly
prove that the Benigna Deed and the Affidavit are fabricated and, consequently, no ground exists
to nullify the petitioners titles. The court observed that the respondent did not even compare his
genuine signature with the signatures appearing in these documents.

CA RULING

On appeal, the CA reversed the RTC by ruling against the authenticity of the Benigna Deed and
the Affidavit. The CA gave weight to Benignas death certificate which shows the impossibility
of Benignas execution of the deed in 1969. The CA also noted the discrepancy between the
respondents signatures as appearing in the Affidavit, on one hand, and the documents on record,
on the other.27 The CA added that the respondents failure to compare his genuine signature from
his purported signatures appearing in the petitioners documents is not fatal, since Section 22,
Rule 132 of the Rules of Court allows the court to make its own comparison. In light of its
observations, the CA ruled:

As the totality of the evidence presented sufficiently sustains [the respondents] claim that the
titles issued to [the petitioner] were based on forged and spurious documents, it behooves this
Court to annul these certificates of title.

WHEREFORE, the assailed Decision dated June 23, 2000 is SET ASIDE. Declaring TCT No.
195812 and TCT No. 195813 as NULL and VOID, [the petitioner] is hereby directed to
reconvey the subject parcels of land to [the respondent].28 (Emphasis added.)

Unwilling to accept the CAs reversal of the RTC ruling, the petitioner filed the present appeal
by certiorari, claiming that the CA committed "gross misappreciation of the facts"29 by going
beyond what the respondent sought in his complaint.

THE PETITION

The petitioner claims that the CA should not have ordered the reconveyance of both parcels of
land covered by the TCTs in question since the respondent only seeks the reconveyance of the
disputed property i.e., the parcel of land covered by TCT No. 195813.

The petitioner asserts that after the subject sale, the parties physically partitioned the subject
property and possessed their respective portions, thereby setting the limits of their ownership.

The petitioner admits that the Benigna Deed is "fabricated" but hastens to add that it was only
designed (i) to affirm the "true intent and agreement" of the parties on the extent of their
ownership, as shown by their actual physical possession, and (ii) as a "convenient tool" to
facilitate the transfer of title to his name.

THE RESPONDENTS COMMENT

The respondent claims that since the petitioner himself admitted using a spurious document in
obtaining his titles (as alleged in the complaint and as found by the CA), then the CA correctly
cancelled the latters titles.30

The petitioner forged the respondents signature in the Affidavit to make it appear that he agreed
to the division indicated in the document. The respondent defended the CAs reconveyance of
both parcels of land, covered by the petitioners titles, to the respondent by arguing that if the
distribution in the Affidavit is followed, the "original intendment" of the parties on their shares
of the subject property would be "grievously impaired"31

THE ISSUES

The two basic issues32 for our resolution are:

1. Whether the CA erred in nullifying the petitioners titles.

2. Whether the CA erred in ordering the reconveyance of the parcel of land covered by
the petitioners titles.

THE RULING

We partially grant the petition.

An action for reconveyance is a legal and equitable remedy granted to the rightful landowner,
whose land was wrongfully or erroneously registered in the name of another, to compel the
registered owner to transfer or reconvey the land to him.33 The plaintiff in this action must allege
and prove his ownership of the land in dispute and the defendants erroneous, fraudulent or
wrongful registration of the property.

We rule that the respondent adequately proved his ownership of the disputed property by virtue
of the (i) Deed of Absolute Sale executed by Josefa in favor of the parties; (ii) the parties
Affidavit of Adverse Claim; and (iii) the parties Agreement, which cover the subject property.

The petitioner does not dispute the due execution and the authenticity of these documents,34
particularly the Agreement. However, he claims that since the Agreement does not reflect the
true intention of the parties, the Affidavit was subsequently executed in order to reflect the
parties true intention.1avvphi1

The petitioners argument calls to fore the application of the parol evidence rule,35 i.e., when the
terms of an agreement are reduced to writing, the written agreement is deemed to contain all the
terms agreed upon and no evidence of these terms can be admitted other than what is contained
in the written agreement.36 Whatever is not found in the writing is understood to have been
waived and abandoned.37

To avoid the operation of the parol evidence rule, the Rules of Court allows a party to present
evidence modifying, explaining or adding to the terms of the written agreement if he puts in
issue in his pleading, as in this case, the failure of the written agreement to express the true intent
and agreement of the parties. The failure of the written agreement to express the true intention of
the parties is either by reason of mistake, fraud, inequitable conduct or accident, which
nevertheless did not prevent a meeting of the minds of the parties.38

At the trial, the petitioner attempted to prove, by parol evidence, the alleged true intention of the
parties by presenting the Affidavit, which allegedly corrected the mistake in the previously
executed Agreement and confirmed his ownership of the parcels of land covered by his titles. It
was the petitioners staunch assertion that the respondent co-executed this Affidavit supposedly
to reflect the parties true intention.

In the present petition, however, the petitioner made a damaging admission that the Benigna
Deed is fabricated, thereby completely bolstering the respondents cause of action for
reconveyance of the disputed property on the ground of fraudulent registration of title. Since the
Affidavit merely reflects what is embodied in the Benigna Deed, the petitioners admission,
coupled with the respondents denial of his purported signature in the Affidavit, placed in serious
doubt the reliability of this document, supposedly the bedrock of the petitioners defense.

Curiously, if the parties truly intended to include in the petitioners share the disputed property,
the petitioner obviously need not go at length of fabricating a deed of sale to support his
application for the transfer of title of his rightful portion of the subject property. Notably, there is
nothing in the Affidavit (that supposedly corrected the mistake in the earlier Agreement) that
supports the petitioners claim that the partition of the subject property is based on the parties
actual possession.

Note that the RTC dismissed the complaint based on the respondents alleged failure to prove the
spuriousness of the documents submitted by the petitioner to the Register of Deeds. However, by
admitting the presentation of a false deed in securing his title, the petitioner rendered moot the
issue of authenticity of the Benigna Deed and relieved the respondent of the burden of proving
its falsity as a ground to nullify the petitioners titles.

By fraudulently causing the transfer of the registration of title over the disputed property in his
name, the petitioner holds the title to this disputed property in trust for the benefit of the
respondent as the true owner;39 registration does not vest title but merely confirms or records title
already existing and vested. The Torrens system of registration cannot be used to protect a
usurper from the true owner, nor can it be used as a shield for the commission of fraud, or to
permit one to enrich oneself at the expense of others.40 Hence, the CA correctly ordered the
reconveyance of the disputed property, covered by TCT No. 195813, to the respondent.

The parties Agreement effectively partitioned the subject property

The petitioner also relies on his alleged actual possession of the disputed property to support his
claim of ownership. Notably, both parties make conflicting assertions of possession of the
disputed property.41 The petitioner testified on his possession as follows:
Q: How many square meters did you get from the land and how many square meters was the
share of [respondent]?

A: 4[0]20 square meters and my brother-in-law 6,000 plus square meters.

xxx

Q: Was there a boundary between the 4,020 square meters and the rest of the property which
(sic) designated by your brother-in-law?

A: There is sir, and the boundary is the fence.

Q: When did you put up that fence which is the boundary?

A: After the deed of sale was made.

Q: And that boundary fence which you put according to you since the execution of the Deed of
Absolute Sale in 1969 up to the present does it still exist?

A: Yes, sir.

Q: Since the time you purchased the property according to you you already divided the property,
is that correct?

A: Yes, sir.

Q: And that as of today who is in possession of that 4,020 square meters?

A: I, sir.42

The petitioner and the respondent were originally co-owners of the subject property when they
jointly bought it from the same vendor in 1969. However, the parties immediately terminated this
state of indivision by executing an Agreement, which is in the nature of a partition agreement.

The Civil Code of the Philippines defines partition as the separation, division and assignment of
a thing held in common among those to whom it may belong.43 Partition is the division between
two or more persons of real or personal property, owned in common, by setting apart their
respective interests so that they may enjoy and possess these in severalty,44 resulting in the
partial or total extinguishment of co-ownership.45

In the present case, the parties agreed to divide the subject property by giving the petitioner the
3,020 square meters "residential portion on the northern part near the Municipal road."46 There is
no dispute that this 3,020- square meter portion is the same parcel of land identified as Lot No. 2
(which is not the subject of the respondents action for reconveyance) in the Affidavit and the
Subdivision Plan presented by the petitioner before the Register of Deeds. The fact that the
Agreement lacks technical description of the parties respective portions or that the subject
property was then still embraced by a single certificate of title could not legally prevent a
partition, where the different portions allotted to each were determined and became separately
identifiable, as in this case.47

What is strikingly significant is that even the petitioners own testimony merely attempted to
confirm his actual possession of the disputed property, without, however, supporting his claim
contrary to the written Agreement that the parties ownership of the subject property would be
co-extensive with their possession. This is the core of the petitioners defense. At any rate, just as
non-possession does not negate ownership, neither does possession automatically prove
ownership,48 especially in the face of an unambiguous document executed by the parties
themselves.1avvphi1

Contrary to the petitioners claim that his actual possession determines the extent of his
ownership, it is the parties Agreement that defines the extent of their ownership in the subject
property. One of the legal effects of partition, whether by agreement among the co-owners or by
judicial proceeding, is to terminate the co-ownership and, consequently, to make the previous co-
owners the absolute and exclusive owner of the share allotted to him.49

Parenthetically, the respondent declared for taxation purposes the portion he claims in December
1987.50 The total area (7,544 square meters) of the properties declared is equivalent to the area
allotted to the respondent under the Agreement. On the other hand, the petitioner declared the
1,004-square meter portion only in September 1994, under Tax Declaration No. 9393,51 despite
his claim of exclusive and adverse possession since 1969.

Nullification of the petitioners title over the 3,020 square meter portion

While the petitioner admitted using a spurious document in securing his titles, nonetheless, he
questions the CAs nullification of TCT No. 195812 on the ground that, per the respondents
own admission and the parties Agreement, he is the rightful owner of the land covered by this
title.

We disagree.

The petitioners argument confuses registration of title with ownership.52 While the petitioners
ownership over the land covered by TCT No. 195812 is undisputed, his ownership only gave
him the right to apply for the proper transfer of title to the property in his name. Obviously, the
petitioner, even as a rightful owner, must comply with the statutory provisions on the transfer of
registered title to lands.53 Section 53 of Presidential Decree No. 1529 provides that the
subsequent registration of title procured by the presentation of a forged deed or other instrument
is null and void. Thus, the subsequent issuance of TCT No. 195812 gave the petitioner no better
right than the tainted registration which was the basis for the issuance of the same title. The
Court simply cannot allow the petitioners attempt to get around the proper procedure for
registering the transfer of title in his name by using spurious documents.

Reconveyance is the remedy of the rightful owner only

While the CA correctly nullified the petitioners certificates of title, the CA erred in ordering the
reconveyance of the entire subject property in the respondents favor. The respondent himself
admitted that the 3,020- square meter portion covered by TCT No. 195812 is the petitioners just
share in the subject property.54 Thus, although the petitioner obtained TCT No. 195812 using the
same spurious documents, the land covered by this title should not be reconveyed in favor of the
respondent since he is not the rightful owner of the property covered by this title.55

WHEREFORE, the petition is partially GRANTED. The assailed decision and resolution of the
Court of Appeals are MODIFIED. Accordingly, the petitioner is directed to RECONVEY to the
respondent the parcel of land covered by TCT No. 195813. Costs against petitioner.

SO ORDERED.

ARTURO D. BRION
Associate Justice

c. Electronic Evidence

Heir of Sabanpan vs Comorposa

THIRD DIVISION

[G.R. No. 152807. August 12, 2003]

HEIRS OF LOURDES SAEZ SABANPAN: BERNARDO S. SABANPAN, RENE S.

SABANPAN, DANILO S. SABANPAN and THELMA S. CHU; HEIRS OF ADOLFO SAEZ:
MA. LUISA SAEZ TAPIZ, MA. VICTORIA SAEZ LAPITAN, MA. BELEN SAEZ and
EMMANUEL SAEZ; and HEIRS OF CRISTINA SAEZ GUTIERREZ: ROY SAEZ
GUTIERREZ and LUIS SAEZ JR., petitioners, vs. ALBERTO C. COMORPOSA, HERDIN C.
COMORPOSA, OFELIA C. ARIEGO,1[1] REMEDIOS COMORPOSA, VIRGILIO A.
LARIEGO,1-a BELINDA M. COMORPOSA and ISABELITA H. COMORPOSA, respondents.

DECISION

PANGANIBAN, J.:
The admissibility of evidence should be distinguished from its probative value. Just because a
piece of evidence is admitted does not ipso facto mean that it conclusively proves the fact in
dispute.

The Case

Before us is a Petition for Review2[2] under Rule 45 of the Rules of Court, seeking to set aside the
August 7, 2001 Decision and the February 27, 2002 Resolution of the Court of Appeals3[3](CA)
in CA-GR SP No. 60645. The dispositive portion of the assailed Decision reads as follows:

WHEREFORE, in view of all the foregoing, the Court hereby AFFIRMS the Decision dated 22
June 2000 rendered by Branch 18 of the Regional Trial Court of Digos, Davao del Sur,
REVERSING and SETTING ASIDE the Decision of the Municipal Trial Court of Sta. Cruz,
Davao del Su[r].4[4]

The assailed Resolution5[5] denied petitioners Motion for Reconsideration.

The Facts

The CA summarized the factual antecedents of the case as follows:

A [C]omplaint for unlawful detainer with damages was filed by [petitioners] against
[respondents] before the Santa Cruz, Davao del Sur Municipal Trial Court.

The [C]omplaint alleged that Marcos Saez was the lawful and actual possessor of Lot No. 845,
Land 275 located at Darong, Sta. Cruz, Davao del Sur with an area of 1.2 hectares. In 1960, he
died leaving all his heirs, his children and grandchildren.

In 1965, Francisco Comorposa who was working in the land of Oboza was terminated from his
job. The termination of his employment caused a problem in relocating his house. Being a close
family friend of [Marcos] Saez, Francisco Comorposa approached the late Marcos Saezs son,
[Adolfo] Saez, the husband of Gloria Leano Saez, about his problem. Out of pity and for
humanitarian consideration, Adolfo allowed Francisco Comorposa to occupy the land of Marcos
Saez. Hence, his nipa hut was carried by his neighbors and transferred to a portion of the land
subject matter of this case. Such transfer was witnessed by several people, among them, Gloria
Leano and Noel Oboza. Francisco Comorposa occupied a portion of Marcos Saez property
without paying any rental.
Francisco Comorposa left for Hawaii, U.S.A. He was succeeded in his possession by the
respondents who likewise did not pay any rental and are occupying the premises through
petitioners tolerance.

On 7 May 1998, a formal demand was made upon the respondents to vacate the premises but the
latter refused to vacate the same and claimed that they [were] the legitimate claimants and the
actual and lawful possessor[s] of the premises. A [C]omplaint was filed with the barangay office
of Sta. Cruz[,] Davao del Sur, but the parties failed to arrive at an amicable settlement. Thus, the
corresponding Certificate to File Action was issued by the said barangay and an action for
unlawful detainer was filed by petitioners against respondents.

Respondents, in their Answer, denied the material allegations of the [C]omplaint and alleged that
they entered and occupied the premises in their own right as true, valid and lawful claimants,
possessors and owners of the said lot way back in 1960 and up to the present time; that they have
acquired just and valid ownership and possession of the premises by ordinary or extraordinary
prescription, and that the Regional Director of the DENR, Region XI has already upheld their
possession over the land in question when it ruled that they [were] the rightful claimants and
possessors and [were], therefore, entitled to the issuance of a title.

The Municipal Trial Court of Sta. Cruz, Davao del Sur rendered judgment in favor of petitioners
but the Regional Trial Court of Digos, Davao del Sur, on appeal, reversed and set aside the said
decision. x x x6[6]

Ruling of the Court of Appeals

Affirming the Regional Trial Court (RTC), the CA upheld the right of respondents as claimants
and possessors. The appellate court held that -- although not yet final -- the Order issued by the
regional executive director of the Department of Environment and Natural Resources (DENR)
remained in full force and effect, unless declared null and void. The CA added that the
Certification issued by the DENRs community environment and natural resources (CENR)
officer was proof that when the cadastral survey was conducted, the land was still alienable and
was not yet allocated to any person.

According to the CA, respondents had the better right to possess alienable and disposable land of
the public domain, because they have suffiently proven their actual, physical, open, notorious,
exclusive, continuous and uninterrupted possession thereof since 1960. The appellate court
deemed as self-serving, and therefore incredible, the Affidavits executed by Gloria Leano Saez,
Noel Oboza and Paulina Paran.

Hence, this Petition.7[7]

The Issue

In their Memorandum, petitioners raise the following issues for the Courts consideration:

Did the Court of Appeals gravely abuse its discretion and [err] in sustaining the ruling of the
Regional Trial Court giving credence to the Order dated 2 April 1998 issued by the regional
executive director?

II

Did the Court of Appeals gravely abuse its discretion and err in sustaining the Regional Trial
Courts ruling giving weight to the CENR Officers Certification, which only bears the facsimile
of the alleged signature of a certain Jose F. Tagorda and, [worse], it is a new matter raised for the
first time on appeal?

III

Did the Court of Appeals gravely abuse its discretion and err in holding that the land subject
matter of this case has been acquired by means of adverse possession and prescription?

IV

Did the Court of Appeals gravely abuse its discretion, and err in declaring that, neither is there
error on the part of the Regional Trial Court, when it did not give importance to the affidavits by
Gloria Leano Saez, Noel [Oboza], and Paulina Paran for allegedly being self serving?8[8]

To facilitate the discussion, the fourth and the third issues shall be discussed in reverse sequence.

The Courts Ruling

The Petition has no merit.

First Issue:
The DENR Order of April 2, 1998

Petitioners claim that the reliance of the CA upon the April 2, 1998 Order issued by the regional
director of the DENR was erroneous. The reason was that the Order, which had upheld the claim
of respondents, was supposedly not yet final and executory. Another Order dated August 23,
1999,9[9] issued later by the DENR regional director, allegedly held in abeyance the effectivity of
the earlier one.

Under the Public Land Act,10[10] the management and the disposition of public land is under the
primary control of the director of lands11[11] (now the director of the Lands Management Bureau
or LMB),12[12] subject to review by the DENR secretary.13[13] As a rule, then, courts have no
jurisdiction to intrude upon matters properly falling within the powers of the LMB.

The powers given to the LMB and the DENR to alienate and dispose of public land does not,
however, divest regular courts of jurisdiction over possessory actions instituted by occupants or
applicants to protect their respective possessions and occupations.14[14] The power to determine
who has actual physical possession or occupation of public land and who has the better right of
possession over it remains with the courts.15[15] But once the DENR has decided, particularly
through the grant of a homestead patent and the issuance of a certificate of title, its decision on
these points will normally prevail.16[16]

Therefore, while the issue as to who among the parties are entitled to a piece of public land
remains pending with the DENR, the question of recovery of possession of the disputed property
is a matter that may be addressed to the courts.

Second Issue:
CENR Officers Certification

Petitioners contend that the CENR Certification dated July 22, 1997 is a sham document,
because the signature of the CENR officer is a mere facsimile. In support of their argument, they
cite Garvida v. Sales Jr.17[17] and argue that the Certification is a new matter being raised by
respondents for the first time on appeal.

We are not persuaded.

In Garvida, the Court held:

A facsimile or fax transmission is a process involving the transmission and reproduction of

printed and graphic matter by scanning an original copy, one elemental area at a time, and
representing the shade or tone of each area by a specified amount of electric current. x x x18[18]

Pleadings filed via fax machines are not considered originals and are at best exact copies. As
such, they are not admissible in evidence, as there is no way of determining whether they are
genuine or authentic.19[19]

The Certification, on the other hand, is being contested for bearing a facsimile of the signature of
CENR Officer Jose F. Tagorda. The facsimile referred to is not the same as that which is alluded
to in Garvida. The one mentioned here refers to a facsimile signature, which is defined as a
signature produced by mechanical means but recognized as valid in banking, financial, and
business transactions.20[20]

Note that the CENR officer has not disclaimed the Certification. In fact, the DENR regional
director has acknowledged and used it as reference in his Order dated April 2, 1998:

x x x. CENR Officer Jose F. Tagorda, in a CERTIFICATION dated 22 July 1997, certified among
others, that: x x x per records available in his Office, x x x the controverted lot x x x was not
allocated to any person x x x.21[21]

If the Certification were a sham as petitioner claims, then the regional director would not have
used it as reference in his Order. Instead, he would have either verified it or directed the CENR
officer to take the appropriate action, as the latter was under the formers direct control and
supervision.

Petitioners claim that the Certification was raised for the first time on appeal is incorrect. As
early as the pretrial conference at the Municipal Trial Court (MTC), the CENR Certification had
already been marked as evidence for respondents as stated in the Pre-trial Order.22[22] The
Certification was not formally offered, however, because respondents had not been able to file
their position paper.
Neither the rules of procedure23[23] nor jurisprudence24[24] would sanction the admission of
evidence that has not been formally offered during the trial. But this evidentiary rule is
applicable only to ordinary trials, not to cases covered by the rule on summary procedure -- cases
in which no full-blown trial is held.25[25]

Third Issue:
Affidavit of Petitioners Witnesses

Petitioners assert that the CA erred in disregarding the Affidavits of their witnesses, insisting that
the Rule on Summary Procedure authorizes the use of affidavits. They also claim that the failure
of respondents to file their position paper and counter-affidavits before the MTC amounts to an
admission by silence.

The admissibility of evidence should not be confused with its probative value. Admissibility
refers to the question of whether certain pieces of evidence are to be considered at all, while
probative value refers to the question of whether the admitted evidence proves an issue.26[26]
Thus, a particular item of evidence may be admissible, but its evidentiary weight depends on
judicial evaluation within the guidelines provided by the rules of evidence.27[27]

While in summary proceedings affidavits are admissible as the witnesses respective testimonies,
the failure of the adverse party to reply does not ipso facto render the facts, set forth therein, duly
proven. Petitioners still bear the burden of proving their cause of action, because they are the
ones asserting an affirmative relief.28[28]

Fourth Issue:
Defense of Prescription

Petitioners claim that the court a quo erred in upholding the defense of prescription proffered by
respondents. It is the formers contention that since the latters possession of the land was merely
being tolerated, there was no basis for the claim of prescription. We disagree.

For the Court to uphold the contention of petitioners, they have first to prove that the possession
of respondents was by mere tolerance. The only pieces of evidence submitted by the former to
support their claim were a technical description and a vicinity map drawn in accordance with the
survey dated May 22, 1936.29[29] Both of these were discredited by the CENR Certification,
which indicated that the contested lot had not yet been allocated to any person when the survey
was conducted.30[30] The testimony of petitioners witnesses alone cannot prevail over respondents
continued and uninterrupted possession of the subject lot for a considerable length of time.

Furthermore, this is an issue of fact that cannot, as a rule, be raised in a petition for review under
Rule 45.31[31]

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioners.

SO ORDERED.

Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Torres vs PAGCOR

EN BANC

G.R. No. 193531 December 14, 2011

ELLERY MARCH G. TORRES, Petitioner,

vs.
PHILIPPINE AMUSEMENT and GAMING CORPORATION, represented by ATTY.
CARLOS R. BAUTISTA, JR., Respondent.

DECISION

PERALTA, J.:

Petitioner Ellery March G. Torres seeks to annul and set aside the Decision1 dated April 22, 2010
of the Court of Appeals (CA) in CA-G.R. SP No. 110302, which dismissed his petition seeking
reversal of the Resolutions dated June 23, 20082 and July 28, 20093 of the Civil Service
Commission (CSC). Also assailed is the CA Resolution4 dated July 30, 2010 denying petitioner's
motion for reconsideration.

Petitioner was a Slot Machine Operations Supervisor (SMOS) of respondent Philippine

Amusement and Gaming Corporation (PAGCOR). On the basis of an alleged intelligence report
of padding of the Credit Meter Readings (CMR) of the slot machines at PAGCOR-Hyatt Manila,
then Casino Filipino-Hyatt (CF Hyatt), which involved the slot machine and internal security
personnel of respondent PAGCOR, and in connivance with slot machine customers, respondent
PAGCOR's Corporate Investigation Unit (CIU) allegedly conducted an investigation to verify
the veracity of such report. The CIU discovered the scheme of CMR padding which was
committed by adding zero after the first digit of the actual CMR of a slot machine or adding a
digit before the first digit of the actual CMR, e.g., a slot machine with an actual CMR of
P5,000.00 will be issued a CMR receipt with the amount of either P50,000.00 or P35,000.00.5
Based on the CIU's investigation of all the CMR receipts and slot machine jackpot slips issued
by CF Hyatt for the months of February and March 2007, the CIU identified the members of the
syndicate who were responsible for such CMR padding, which included herein petitioner.6

On May 4, 2007, the CIU served petitioner with a Memorandum of Charges7 for dishonesty,
serious misconduct, fraud and violation of office rules and regulations which were considered
grave offenses where the penalty imposable is dismissal. The summary description of the charges
stated:

Sometime between November 2006 and March 2007, you facilitated and actively participated in
the fraudulent scheme with respect to irregular manipulation of Credit Meter Reading (CMR)
which, in turn, led to the misappropriation of money earmarked for the slot machine jackpot at
CF Hyatt Manila. These anomalous transactions were consummated through your direct
participation and active cooperation of your co-employees and customers. With malice
afterthought, you embezzled and stole monies from PAGCOR, thereby resulting in substantial
losses to the proprietary interest of PAGCOR.8

On the same day, another Memorandum of Charges9 signed by Rogelio Y. Bangsil, Jr., Senior
Branch Manager, CF Hyatt Manila, was issued to petitioner informing him of the charge of
dishonesty (padding of anomalous SM jackpot receipts). Petitioner was then required to explain
in writing within seventy-two (72) hours from receipt thereof why he should not be sanctioned or
dismissed. Petitioner was placed under preventive suspension effective immediately until further
orders.

On May 7, 2007, petitioner wrote Manager Bangsil a letter explanation/refutation10 of the

charges against him. He denied any involvement or participation in any fraudulent manipulation
of the CMR or padding of the slot machine receipts, and he asked for a formal investigation of
the accusations against him.

On August 4, 2007, petitioner received a letter11 dated August 2, 2007 from Atty. Lizette F.
Mortel, Managing Head of PAGCOR's Human Resource and Development Department,
dismissing him from the service. The letter reads in part, to wit:

Please be informed that the Board of Directors, in its meeting on July 31, 2007, approved the
recommendation of the Adjudication Committee to dismiss you from the service effective upon
approval due to the following offense:
Dishonesty, gross misconduct, serious violations of office rules and regulations, conduct
prejudicial to the best interests of the company and loss of trust and confidence, committed as
follows: For actively and directly participating in a scheme to defraud the company in conspiracy
with co-employees and SM customers by padding slot machine Credit Meter Reading (CMR)
receipts in favor of co-conspirator customers who had said (sic) CMR receipts paid at the teller's
booth on numerous occasions which caused substantial losses to the proprietary interests of
PAGCOR.12

On September 14, 2007, petitioner filed with the CSC a Complaint13 against PAGCOR and its
Chairman Efraim Genuino for illegal dismissal, non-payment of backwages and other benefits.
The complaint alleged among others: (1) that he denied all the charges against him; (2) that he
did ask for a formal investigation of the accusations against him and for PAGCOR to produce
evidence and proofs to substantiate the charges, but respondent PAGCOR did not call for any
formal administrative hearing; (3) that he tried to persuade respondent PAGCOR to review and
reverse its decision in a letter of reconsideration dated August 13, 2007 addressed to the
Chairman, the members of the Board of Directors and the Merit Systems Protection Board; and
(4) that no resolution was issued on his letter reconsideration, thus, the filing of the complaint.
Petitioner claimed that as a result of his unlawful, unjustified and illegal termination/dismissal,
he was compelled to hire the services of a counsel in order to protect his rights.

Respondent PAGCOR filed its Comment wherein it alleged, among others, that petitioner failed
to perfect an appeal within the period and manner provided by the Uniform Rules on
Administrative Cases in the Civil Service Law.

On June 23, 2008, the CSC, treating petitioner's complaint as an appeal from the PAGCOR's
decision dismissing petitioner from the service, issued Resolution No. 081204 denying
petitioner's appeal. The dispositive portion of which reads as follows:

WHEREFORE, the instant appeal of Ellery March G. Torres is hereby DENIED. Accordingly,
the decision contained in a letter dated August 2, 2007 of Lizette F. Mortel, Managing Head,
Human Resource and Development Department (HRDD), PAGCOR, finding him guilty of
Dishonesty, Gross Misconduct, Serious Violation of Office Rules and Regulations, Conduct
Prejudicial to the Best Interest of the Service and Loss of Trust and Confidence and imposing
upon him the penalty of dismissal from the service, is hereby AFFIRMED. The penalty of
dismissal carries with it the accessory penalties of forfeiture of retirement benefits, cancellation
of eligibility, perpetual disqualification from reemployment in the government service, and bar
from taking future Civil Service Examination.14

In so ruling, the CSC found that the issue for resolution was whether petitioner's appeal had
already prescribed which the former answered in the positive. The CSC did not give credit to
petitioner's claim that he sent a facsimile transmission of his letter reconsideration within the
period prescribed by the Uniform Rules on Administrative Cases in the Civil Service. It found
PAGCOR's denial of having received petitioner's letter more credible as it was supported by
certifications issued by its employees. It found that a verification of one of the telephone
numbers where petitioner allegedly sent his letter reconsideration disclosed that such number did
not belong to the PAGCOR's Office of the Board of Directors; and that petitioner should have
mentioned about the alleged facsimile transmission at the first instance when he filed his
complaint and not only when respondent PAGCOR raised the issue of prescription in its
Comment.

Petitioner's motion for a reconsideration was denied in CSC Resolution No. 09-1105 dated July
28, 2009.

Petitioner filed with the CA a petition for review under Rule 43 of the Rules of Court seeking to
set aside the twin resolutions issued by the CSC.

On April 22, 2010, the CA issued its assailed decision dismissing the petition for lack of merit.

In dismissing the petition, the CA found that petitioner failed to adduce clear and convincing
evidence that he had filed a motion for reconsideration. It found insufficient to merit
consideration petitioner's claim that he had sent through a facsimile transmission a
letter/reconsideration dated August 13, 2007 addressed to PAGCOR's Chairman, members of the
Board of Directors and the Merit Systems Protection Board; that assuming arguendo that a letter
reconsideration was indeed sent through a facsimile transmission, such facsimile transmission is
inadmissible as electronic evidence under the Electronic Commerce Act of 2000; and that a
review of the CSC assailed resolution revealed that the telephone numbers where petitioner
claimed to be the recipient of the faxed document sent was not that of PAGCOR's Office of
Board of Directors. The CA found baseless and conjectural petitioner's claim that PAGCOR can
easily deny having received the letter by giving orders to their employees to execute an affidavit
of denial under pain and threat of administrative sanction or termination from service.

The CA then concluded that PAGCOR's decision which was contained in a letter dated August 4,
2007 dismissing petitioner from the service had already attained finality since there was no
motion for reconsideration filed by petitioner in the manner and within the period provided for
under the Revised Uniform Rules on the Administrative Cases in the Civil Service.

Petitioner's motion for reconsideration was denied in a Resolution dated July 30, 2010.

Hence, this petition where petitioner states the errors committed by the CA in this wise:

The first issue that should be resolved is:

1. Whether or not the Court of Appeals erred when it affirmed the dismissal of petitioner based
merely on technicality without considering the allegations on summary and arbitrary dismissal
based on fabricated and unfounded accusations.

Next to be raised were the issues propounded in petitioner's Memorandum dated 29 January
2010 but were not tackled upon by the Court of Appeals, thus:

A. Whether or not the Civil Service Commission erred in ruling that there was no valid
letter/motion for reconsideration submitted to reconsider petitioner's dismissal from the
service;
 B. Whether or not the Civil Service Commission erred in giving more weight to
PAGCOR's denial of having received petitioner's letter of reconsideration;

C. Whether or not the Civil Service Commission erred in not acting/resolving the Ex-
Parte Motion to Issue Subpoena Duces Tecum;

D. Whether or not the Civil Service Commission erred in ruling that petitioner's failure to
send his letter reconsideration through mail or by personal service as set forth in the
Rules of Court, he forfeited his right to appeal; and

E. Whether or not the Civil Service Commission erred in favoring PAGCOR"s dismissal
of petitioner from employment based on hearsay, imaginary and non-existent evidence.15

The threshold issue for resolution is whether the CA erred when it affirmed the CSC's dismissal
of the appeal for being filed beyond the reglementary period.

Petitioner contends that he filed his letter reconsideration of his dismissal16 on August 13, 2007,
which was within the 15-day period for filing the same; and that he did so by means of a
facsimile transmission sent to the PAGCOR's Office of the Board of Directors. He claims that
the sending of documents thru electronic data message, which includes facsimile, is sanctioned
under Republic Act No. 8792, the Electronic Commerce Act of 2000. Petitioner further contends
that since his letter reconsideration was not acted upon by PAGCOR, he then filed his complaint
before the CSC.

We are not persuaded.

Sections 37, 38, 39, and 43 of the Revised Uniform Rules on Administrative Cases in the Civil
Service, which are applicable to this case, respectively provide, to wit:

Section 37. Finality of Decisions - A decision rendered by heads of agencies whereby a penalty
of suspension for not more than thirty days or a fine in an amount not exceeding thirty (30) days'
salary is imposed, shall be final and executory. However, if the penalty imposed is suspension
exceeding thirty days, or fine in an amount exceeding thirty days salary, the same shall be final
and executory after the lapse of the reglementary period for filing a motion for reconsideration or
an appeal and no such pleading has been filed.

Section 38. Filing of motion for reconsideration. - The party adversely affected by the decision
may file a motion for reconsideration with the disciplining authority who rendered the same
within fifteen days from receipt thereof.

Section 39. When deemed filed. - A motion for reconsideration sent by mail shall be deemed
filed on the date shown by the postmark on the envelope which shall be attached to the records of
the case and in case of personal delivery, the date stamped thereon by the proper office.

Section 43. Filing of Appeals. - Decisions of heads of departments, agencies, provinces, cities,
municipalities and other instrumentalities imposing a penalty exceeding thirty (30) days
suspension or fine in an amount exceeding thirty (30) days salary, maybe appealed to the
Commission Proper within a period of fifteen (15) days from receipt thereof.

Clearly, a motion for reconsideration may either be filed by mail or personal delivery. When a
motion for reconsideration was sent by mail, the same shall be deemed filed on the date shown
by the postmark on the envelope which shall be attached to the records of the case. On the other
hand, in case of personal delivery, the motion is deemed filed on the date stamped thereon by the
proper office. And the movant has 15 days from receipt of the decision within which to file a
motion for reconsideration or an appeal therefrom.

Petitioner received a copy of the letter/notice of dismissal on August 4, 2007; thus, the motion
for reconsideration should have been submitted either by mail or by personal delivery on or
before August 19, 2007. However, records do not show that petitioner had filed his motion for
reconsideration. In fact, the CSC found that the non-receipt of petitioner's letter reconsideration
was duly supported by certifications issued by PAGCOR employees.

Even assuming arguendo that petitioner indeed submitted a letter reconsideration which he
claims was sent through a facsimile transmission, such letter reconsideration did not toll the
period to appeal. The mode used by petitioner in filing his reconsideration is not sanctioned by
the Uniform Rules on Administrative Cases in the Civil Service. As we stated earlier, the motion
for reconsideration may be filed only in two ways, either by mail or personal delivery.

In Garvida v. Sales, Jr.,17 we found inadmissible in evidence the filing of pleadings through fax
machines and ruled that:

A facsimile or fax transmission is a process involving the transmission and reproduction of

printed and graphic matter by scanning an original copy, one elemental area at a time, and
representing the shade or tone of each area by a specified amount of electric current. The current
is transmitted as a signal over regular telephone lines or via microwave relay and is used by the
receiver to reproduce an image of the elemental area in the proper position and the correct shade.
The receiver is equipped with a stylus or other device that produces a printed record on paper
referred to as a facsimile.

x x x A facsimile is not a genuine and authentic pleading. It is, at best, an exact copy preserving
all the marks of an original. Without the original, there is no way of determining on its face
whether the facsimile pleading is genuine and authentic and was originally signed by the party
and his counsel. It may, in fact, be a sham pleading. x x x181avvphi1

Moreover, a facsimile transmission is not considered as an electronic evidence under the

Electronic Commerce Act. In MCC Industrial Sales Corporation v. Ssangyong Corporation,19
We determined the question of whether the original facsimile transmissions are "electronic data
messages" or "electronic documents" within the context of the Electronic Commerce Act, and
We said:

We, therefore, conclude that the terms "electronic data message" and "electronic document," as
defined under the Electronic Commerce Act of 2000, do not include a facsimile transmission.
Accordingly, a facsimile transmission cannot be considered as electronic evidence. It is not the
functional equivalent of an original under the Best Evidence Rule and is not admissible as
electronic evidence. (Italics ours.)20

We, therefore, found no reversible error committed by the CA when it affirmed the CSC in
dismissing petitioner's appeal. Petitioner filed with the CSC a complaint against PAGCOR and
its Chairman for illegal dismissal, non-payment of backwages and other benefits on September
14, 2007. The CSC treated the complaint as an appeal from the PAGCOR's dismissal of
petitioner. Under Section 43 which we earlier quoted, petitioner had 15 days from receipt of the
letter of dismissal to file his appeal. However, at the time petitioner filed his complaint with the
CSC, which was considered as petitioner's appeal, 41 days had already elapsed from the time he
received his letter of dismissal on August 4, 2007; hence, the CSC correctly found that it has no
jurisdiction to entertain the appeal since petitioner's dismissal had already attained finality.
Petitioner's dismissal from the service became final and executory after he failed to file his
motion for reconsideration or appeal in the manner and within the period provided for under the
Revised Uniform Rules on Administrative Cases in the Civil Service.

In Pea v. Government Service and Insurance System,21 We said:

Noteworthy is that the right to appeal is neither a natural right nor a part of due process, except
where it is granted by statute in which case it should be exercised in the manner and in
accordance with the provisions of law. In other words, appeal is a right of statutory and not of
constitutional origin. The perfection of an appeal in the manner and within the period prescribed
by law is not only mandatory but also jurisdictional and the failure of a party to conform to the
rules regarding appeal will render the judgment final and executory and, hence, unappealable, for
it is more important that a case be settled than it be settled right. Furthermore, it is axiomatic that
final and executory judgments can no longer be attacked by any of the parties or be modified,
directly or indirectly, even by the highest court of the land. Just as the losing party has the right
to file an appeal within the prescribed period, so also the winning party has the correlative right
to enjoy the finality of the resolution of the case.22

WHEREFORE, the petition is DENIED. The Decision dated April 22, 2010 and the Resolution
dated July 30, 2010 of the Court of Appeals are hereby AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

Ang vs Republic of the Philippines

SECOND DIVISION
G.R. No. 182835 April 20, 2010

RUSTAN ANG y PASCUA, Petitioner,

vs.
THE HONORABLE COURT OF APPEALS and IRISH SAGUD, Respondents.

DECISION

ABAD, J.:

This case concerns a claim of commission of the crime of violence against women when a
former boyfriend sent to the girl the picture of a naked woman, not her, but with her face on it.

The Indictment

The public prosecutor charged petitioner-accused Rustan Ang (Rustan) before the Regional Trial
Court (RTC) of Baler, Aurora, of violation of the Anti-Violence Against Women and Their
Children Act or Republic Act (R.A.) 9262 in an information that reads:

That on or about June 5, 2005, in the Municipality of Maria Aurora, Province of Aurora,
Philippines and within the jurisdiction of this Honorable Court, the said accused willfully,
unlawfully and feloniously, in a purposeful and reckless conduct, sent through the Short
Messaging Service (SMS) using his mobile phone, a pornographic picture to one Irish Sagud,
who was his former girlfriend, whereby the face of the latter was attached to a completely naked
body of another woman making it to appear that it was said Irish Sagud who is depicted in the
said obscene and pornographic picture thereby causing substantial emotional anguish,
psychological distress and humiliation to the said Irish Sagud.1

The Facts and the Case

The evidence for the prosecution shows that complainant Irish Sagud (Irish) and accused Rustan
were classmates at Wesleyan University in Aurora Province. Rustan courted Irish and they
became "on-and-off" sweethearts towards the end of 2004. When Irish learned afterwards that
Rustan had taken a live-in partner (now his wife), whom he had gotten pregnant, Irish broke up
with him.

Before Rustan got married, however, he got in touch with Irish and tried to convince her to elope
with him, saying that he did not love the woman he was about to marry. Irish rejected the
proposal and told Rustan to take on his responsibility to the other woman and their child. Irish
changed her cellphone number but Rustan somehow managed to get hold of it and sent her text
messages. Rustan used two cellphone numbers for sending his messages, namely, 0920-4769301
and 0921-8084768. Irish replied to his text messages but it was to ask him to leave her alone.

In the early morning of June 5, 2005, Irish received through multimedia message service (MMS)
a picture of a naked woman with spread legs and with Irishs face superimposed on the figure
(Exhibit A).2 The senders cellphone number, stated in the message, was 0921-8084768, one of
the numbers that Rustan used. Irish surmised that he copied the picture of her face from a shot he
took when they were in Baguio in 2003 (Exhibit B).3

After she got the obscene picture, Irish got other text messages from Rustan. He boasted that it
would be easy for him to create similarly scandalous pictures of her. And he threatened to spread
the picture he sent through the internet. One of the messages he sent to Irish, written in text
messaging shorthand, read: "Madali lang ikalat yun, my chatrum ang tarlac rayt pwede ring
send sa lahat ng chatter."4

Irish sought the help of the vice mayor of Maria Aurora who referred her to the police. Under
police supervision, Irish contacted Rustan through the cellphone numbers he used in sending the
picture and his text messages. Irish asked Rustan to meet her at the Lorentess Resort in Brgy.
Ramada, Maria Aurora, and he did. He came in a motorcycle. After parking it, he walked
towards Irish but the waiting police officers intercepted and arrested him. They searched him and
seized his Sony Ericsson P900 cellphone and several SIM cards. While Rustan was being
questioned at the police station, he shouted at Irish: "Malandi ka kasi!"

Joseph Gonzales, an instructor at the Aurora State College of Technology, testified as an expert
in information technology and computer graphics. He said that it was very much possible for one
to lift the face of a woman from a picture and superimpose it on the body of another woman in
another picture. Pictures can be manipulated and enhanced by computer to make it appear that
the face and the body belonged to just one person.

Gonzales testified that the picture in question (Exhibit A) had two distinct irregularities: the face
was not proportionate to the body and the face had a lighter color. In his opinion, the picture was
fake and the face on it had been copied from the picture of Irish in Exhibit B. Finally, Gonzales
explained how this could be done, transferring a picture from a computer to a cellphone like the
Sony Ericsson P900 seized from Rustan.

For his part, Rustan admitted having courted Irish. He began visiting her in Tarlac in October
2003 and their relation lasted until December of that year. He claimed that after their relation
ended, Irish wanted reconciliation. They met in December 2004 but, after he told her that his
girlfriend at that time (later his wife) was already pregnant, Irish walked out on him.

Sometime later, Rustan got a text message from Irish, asking him to meet her at Lorentess Resort
as she needed his help in selling her cellphone. When he arrived at the place, two police officers
approached him, seized his cellphone and the contents of his pockets, and brought him to the
police station.

Rustan further claims that he also went to Lorentess because Irish asked him to help her identify
a prankster who was sending her malicious text messages. Rustan got the senders number and,
pretending to be Irish, contacted the person. Rustan claims that he got back obscene messages
from the prankster, which he forwarded to Irish from his cellphone. This explained, he said, why
the obscene messages appeared to have originated from his cellphone number. Rustan claims that
it was Irish herself who sent the obscene picture (Exhibit A) to him. He presented six pictures of
a woman whom he identified as Irish (Exhibits 2 to 7).5
Michelle Ang (Michelle), Rustans wife, testified that she was sure Irish sent the six pictures.
Michelle claims that she received the pictures and hid the memory card (Exhibit 8) that
contained them because she was jealous and angry. She did not want to see anything of Irish.
But, while the woman in the pictures posed in sexy clothing, in none did she appear naked as in
Exhibit A. Further, the face of the woman in Exhibits 2, 4, 5 and 6 could not be seen. Irish
denied that she was the woman in those four pictures. As for Exhibits 3 and 7, the woman in the
picture was fully dressed.

After trial, the RTC found Irishs testimony completely credible, given in an honest and
spontaneous manner. The RTC observed that she wept while recounting her experience,
prompting the court to comment: "Her tears were tangible expression of pain and anguish for the
acts of violence she suffered in the hands of her former sweetheart. The crying of the victim
during her testimony is evidence of the credibility of her charges with the verity borne out of
human nature and experience."6 Thus, in its Decision dated August 1, 2001, the RTC found
Rustan guilty of the violation of Section 5(h) of R.A. 9262.

On Rustans appeal to the Court of Appeals (CA),7 the latter rendered a decision dated January
31, 2008,8 affirming the RTC decision. The CA denied Rustans motion for reconsideration in a
resolution dated April 25, 2008. Thus, Rustan filed the present for review on certiorari.

The Issues Presented

The principal issue in this case is whether or not accused Rustan sent Irish by cellphone message
the picture with her face pasted on the body of a nude woman, inflicting anguish, psychological
distress, and humiliation on her in violation of Section 5(h) of R.A. 9262.

The subordinate issues are:

1. Whether or not a "dating relationship" existed between Rustan and Irish as this term is
defined in R.A. 9262;

2. Whether or not a single act of harassment, like the sending of the nude picture in this
case, already constitutes a violation of Section 5(h) of R.A. 9262;

3. Whether or not the evidence used to convict Rustan was obtained from him in violation
of his constitutional rights; and

4. Whether or not the RTC properly admitted in evidence the obscene picture presented
in the case.

The Courts Rulings

Section 3(a) of R.A. 9262 provides that violence against women includes an act or acts of a
person against a woman with whom he has or had a sexual or dating relationship. Thus:

SEC. 3. Definition of Terms. As used in this Act,

 (a) "Violence against women and their children" refers to any act or a series of acts
committed by any person against a woman who is his wife, former wife, or against a
woman with whom the person has or had a sexual or dating relationship, or with whom
he has a common child, or against her child whether legitimate or illegitimate, within or
without the family abode, which result in or is likely to result in physical, sexual,
psychological harm or suffering, or economic abuse including threats of such acts,
battery, assault, coercion, harassment or arbitrary deprivation of liberty.

xxxx

Section 5 identifies the act or acts that constitute violence against women and these
include any form of harassment that causes substantial emotional or psychological
distress to a woman. Thus:

SEC. 5. Acts of Violence Against Women and Their Children. The crime of violence
against women and their children is committed through any of the following acts:

xxxx

h. Engaging in purposeful, knowing, or reckless conduct, personally or through another,

that alarms or causes substantial emotional or psychological distress to the woman or her
child. This shall include, but not be limited to, the following acts:

xxxx

5. Engaging in any form of harassment or violence;

The above provisions, taken together, indicate that the elements of the crime of violence against
women through harassment are:

1. The offender has or had a sexual or dating relationship with the offended woman;

2. The offender, by himself or through another, commits an act or series of acts of

harassment against the woman; and

3. The harassment alarms or causes substantial emotional or psychological distress to her.

One. The parties to this case agree that the prosecution needed to prove that accused Rustan had
a "dating relationship" with Irish. Section 3(e) provides that a "dating relationship" includes a
situation where the parties are romantically involved over time and on a continuing basis during
the course of the relationship. Thus:

(e) "Dating relationship" refers to a situation wherein the parties live as husband and wife
without the benefit of marriage or are romantically involved over time and on a continuing basis
during the course of the relationship. A casual acquaintance or ordinary socialization between
two individuals in a business or social context is not a dating relationship. (Underscoring
supplied.)

Here, Rustan claims that, being "romantically involved," implies that the offender and the
offended woman have or had sexual relations. According to him, "romance" implies a sexual act.
He cites Websters Comprehensive Dictionary Encyclopedia Edition which provides a colloquial
or informal meaning to the word "romance" used as a verb, i.e., "to make love; to make love to"
as in "He romanced her."

But it seems clear that the law did not use in its provisions the colloquial verb "romance" that
implies a sexual act. It did not say that the offender must have "romanced" the offended woman.
Rather, it used the noun "romance" to describe a couples relationship, i.e., "a love affair."9

R.A. 9262 provides in Section 3 that "violence against women x x x refers to any act or a series
of acts committed by any person against a woman x x x with whom the person has or had a
sexual or dating relationship." Clearly, the law itself distinguishes a sexual relationship from a
dating relationship. Indeed, Section 3(e) above defines "dating relationship" while Section 3(f)
defines "sexual relations." The latter "refers to a single sexual act which may or may not result in
the bearing of a common child." The dating relationship that the law contemplates can, therefore,
exist even without a sexual intercourse taking place between those involved.

Rustan also claims that since the relationship between Irish and him was of the "on-and-off"
variety (away-bati), their romance cannot be regarded as having developed "over time and on a
continuing basis." But the two of them were romantically involved, as Rustan himself admits,
from October to December of 2003. That would be time enough for nurturing a relationship of
mutual trust and love.

An "away-bati" or a fight-and-kiss thing between two lovers is a common occurrence. Their

taking place does not mean that the romantic relation between the two should be deemed broken
up during periods of misunderstanding. Explaining what "away-bati" meant, Irish explained that
at times, when she could not reply to Rustans messages, he would get angry at her. That was all.
Indeed, she characterized their three-month romantic relation as continuous.10

Two. Rustan argues that the one act of sending an offensive picture should not be considered a
form of harassment. He claims that such would unduly ruin him personally and set a very
dangerous precedent. But Section 3(a) of R.A. 9262 punishes "any act or series of acts" that
constitutes violence against women. This means that a single act of harassment, which translates
into violence, would be enough. The object of the law is to protect women and children.
Punishing only violence that is repeatedly committed would license isolated ones.

Rustan alleges that todays women, like Irish, are so used to obscene communications that her
getting one could not possibly have produced alarm in her or caused her substantial emotional or
psychological distress. He claims having previously exchanged obscene pictures with Irish such
that she was already desensitized by them.
But, firstly, the RTC which saw and heard Rustan and his wife give their testimonies was not
impressed with their claim that it was Irish who sent the obscene pictures of herself (Exhibits 2-
7). It is doubtful if the woman in the picture was Irish since her face did not clearly show on
them.

Michelle, Rustans wife, claimed that she deleted several other pictures that Irish sent, except
Exhibits 2 to 7. But her testimony did not make sense. She said that she did not know that
Exhibits 2 to 7 had remained saved after she deleted the pictures. Later, however, she said that
she did not have time to delete them.11 And, if she thought that she had deleted all the pictures
from the memory card, then she had no reason at all to keep and hide such memory card. There
would have been nothing to hide. Finally, if she knew that some pictures remained in the card,
there was no reason for her to keep it for several years, given that as she said she was too jealous
to want to see anything connected to Irish. Thus, the RTC was correct in not giving credence to
her testimony.1avvphi1

Secondly, the Court cannot measure the trauma that Irish experienced based on Rustans low
regard for the alleged moral sensibilities of todays youth. What is obscene and injurious to an
offended woman can of course only be determined based on the circumstances of each case.
Here, the naked woman on the picture, her legs spread open and bearing Irishs head and face,
was clearly an obscene picture and, to Irish a revolting and offensive one. Surely, any woman
like Irish, who is not in the pornography trade, would be scandalized and pained if she sees
herself in such a picture. What makes it further terrifying is that, as Irish testified, Rustan sent the
picture with a threat to post it in the internet for all to see. That must have given her a nightmare.

Three. Rustan argues that, since he was arrested and certain items were seized from him without
any warrant, the evidence presented against him should be deemed inadmissible. But the fact is
that the prosecution did not present in evidence either the cellphone or the SIM cards that the
police officers seized from him at the time of his arrest. The prosecution did not need such items
to prove its case. Exhibit C for the prosecution was but a photograph depicting the Sony Ericsson
P900 cellphone that was used, which cellphone Rustan admitted owning during the pre-trial
conference.

Actually, though, the bulk of the evidence against him consisted in Irishs testimony that she
received the obscene picture and malicious text messages that the senders cellphone numbers
belonged to Rustan with whom she had been previously in communication. Indeed, to prove that
the cellphone numbers belonged to Rustan, Irish and the police used such numbers to summon
him to come to Lorentess Resort and he did.12 Consequently, the prosecution did not have to
present the confiscated cellphone and SIM cards to prove that Rustan sent those messages.

Moreover, Rustan admitted having sent the malicious text messages to Irish.13 His defense was
that he himself received those messages from an unidentified person who was harassing Irish and
he merely forwarded the same to her, using his cellphone. But Rustan never presented the
cellphone number of the unidentified person who sent the messages to him to authenticate the
same. The RTC did not give credence to such version and neither will this Court. Besides, it was
most unlikely for Irish to pin the things on Rustan if he had merely tried to help her identify the
sender.
Four. Rustan claims that the obscene picture sent to Irish through a text message constitutes an
electronic document. Thus, it should be authenticated by means of an electronic signature, as
provided under Section 1, Rule 5 of the Rules on Electronic Evidence (A.M. 01-7-01-SC).

But, firstly, Rustan is raising this objection to the admissibility of the obscene picture, Exhibit A,
for the first time before this Court. The objection is too late since he should have objected to the
admission of the picture on such ground at the time it was offered in evidence. He should be
deemed to have already waived such ground for objection.14

Besides, the rules he cites do not apply to the present criminal action. The Rules on Electronic
Evidence applies only to civil actions, quasi-judicial proceedings, and administrative
proceedings.15

In conclusion, this Court finds that the prosecution has proved each and every element of the
crime charged beyond reasonable doubt.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Court of
Appeals in CA-G.R. CR 30567 dated January 31, 2008 and its resolution dated April 25, 2008.

SO ORDERED.

ROBERTO A. ABAD
Associate Justice

People of the Philippines vs Enojas

THIRD DIVISION

G.R. No. 204894, March 10, 2014

PEOPLE OF THE PHILIPPINES, Appellee, v. NOEL ENOJAS Y HINGPIT, ARNOLD

GOMEZ Y FABREGAS, FERNANDO SANTOS Y DELANTAR, AND ROGER
JALANDONI Y ARI, Appellants.

DECISION

ABAD, J.:

On September 4, 2006 the City Prosecutor of Las Pias charged appellants Noel Enojas y
Hingpit (Enojas), Arnold Gomez y Fabregas (Gomez), Fernando Santos y Delantar (Santos), and
Roger Jalandoni y Ari (Jalandoni) with murder before the Las Pias Regional Trial Court (RTC)
in Criminal Case 06-0854.1 crallawlibrary

PO2 Eduardo Gregorio, Jr. (PO2 Gregorio) testified that at around 10:30 in the evening of
August 29, 2006, he and PO2 Francisco Pangilinan (PO2 Pangilinan) were patrolling the vicinity
of Toyota Alabang and SM Southmall when they spotted a taxi that was suspiciously parked in
front of the Aguila Auto Glass shop near the intersection of BF Almanza and Alabang-Zapote
Roads. The officers approached the taxi and asked the driver, later identified as accused Enojas,
for his documents. The latter complied but, having entertained doubts regarding the veracity of
documents shown them, they asked him to come with them to the police station in their mobile
car for further questioning.2 crallawlibrary

Accused Enojas voluntarily went with the police officers and left his taxi behind. On reaching
the 7-11 convenience store on the Zapote-Alabang Road, however, they stopped and PO2
Pangilinan went down to relieve himself there. As he approached the stores door, however, he
came upon two suspected robbers and shot it out with them. PO2 Pangilinan shot one suspect
dead and hit the other who still managed to escape. But someone fired at PO2 Pangilinan causing
his death.

On hearing the shots, PO2 Gregorio came around and fired at an armed man whom he saw
running towards Pilar Village. He saw another man, who came from the Jollibbee outlet, run
towards Alabang-Zapote Road while firing his gun at PO2 Gregorio. The latter returned fire but
the men were able to take a taxi and escape. PO2 Gregorio radioed for help and for an
ambulance. On returning to his mobile car, he realized that accused Enojas, the taxi driver they
had with them had fled.

P/Insp. Ferjen Torred (Torred), the Chief of Investigation Division of the Las Pias Police,
testified that he and PO2 Teoson Rosarito (PO2 Rosarito) immediately responded to PO2
Gregorios urgent call. Suspecting that accused Enojas, the taxi driver who fled, was involved in
the attempted robbery, they searched the abandoned taxi and found a mobile phone that Enojas
apparently left behind. P/Ins. Torred instructed PO3 Joel Cambi (PO3 Cambi) to monitor its
incoming messages.3 crallawlibrary

The police later ascertained that the suspect whom PO2 Pangilinan had killed was someone
named Reynaldo Mendoza who was armed with a .38 caliber revolver. The police found spent 9
mm and M-16 rifle shells at the crime scene. Follow-up operations at nearby provinces resulted
in finding the dead body of one of the suspects, Alex Angeles, at the Metro South Medical
Center along Molino, Bacoor, Cavite.4 crallawlibrary

PO3 Cambi and PO2 Rosarito testified that they monitored the messages in accused Enojas
mobile phone and, posing as Enojas, communicated with the other accused. The police then
conducted an entrapment operation that resulted in the arrest of accused Santos and Jalandoni.
Subsequently, the police were also able to capture accused Enojas and Gomez. The prosecution
presented the transcripts of the mobile phone text messages between Enojas and some of his co-
accused.5crallawlibrary

The victims father, Ricardo Pangilinan, testified that his son was at the time of his death 28
years old, unmarried, and was receiving police pay of P8,000.00 to P10,000.00 per month.
Ricardo spent P99,999 for burial expense, P16,000.00 for the interment services, and P50,000.00
for purchase of the cemetery lot.6 crallawlibrary
Manifesting in open court that they did not want to adduce any evidence or testify in the case,7
the accused opted to instead file a trial memorandum on March 10, 2008 for their defense. They
pointed out that they were entitled to an acquittal since they were all illegally arrested and since
the evidence of the text messages were inadmissible, not having been properly identified.

On June 2, 2008 the RTC rendered judgment,8 finding all the accused guilty of murder qualified
by evident premeditation and use of armed men with the special aggravating circumstance of use
of unlicensed firearms. It thus sentenced them to suffer the penalty of reclusion perpetua,
without the possibility of parole and to indemnify the heirs of PO2 Pangilinan with P165,999.00
as actual damages, P50,000.00 as moral damages, P25,000.00 as exemplary damages, and
P2,080,000.00 as compensation for loss of earning capacity.

Upon review in CA-G.R. CR-H.C. 03377, on June 14, 2012 the Court of Appeals (CA)
dismissed the appeal and affirmed in toto the conviction of the accused.9 The CA, however,
found the absence of evident premeditation since the prosecution failed to prove that the several
accused planned the crime before committing it. The accused appealed from the CA to this
Court.10crallawlibrary

The defense points out that the prosecution failed to present direct evidence that the accused
Enojas, Gomez, Santos, or Jalandoni took part in shooting PO2 Pangilinan dead.11 This may be
true but the prosecution could prove their liability by circumstantial evidence that meets the
evidentiary standard of proof beyond reasonable doubt. It has been held that circumstantial
evidence is sufficient for conviction if: 1) there is more than one circumstance; 2) the facts from
which the inferences are derived are proven; and 3) the combination of all the circumstances is
such as to produce a conviction beyond reasonable doubt. 12 crallawlibrary

Here the totality of the circumstantial evidence the prosecution presented sufficiently provides
basis for the conviction of all the accused. Thus:chanRob lesVirtualawlibrary

1. PO2 Gregorio positively identified accused Enojas as the driver of the taxicab suspiciously
parked in front of the Aguila Auto Glass shop. The officers were bringing him with them to the
police station because of the questionable documents he showed upon query. Subsequent
inspection of the taxicab yielded Enojas mobile phone that contained messages which led to the
entrapment and capture of the other accused who were also taxicab drivers.

2. Enojas fled during the commotion rather than remain in the cab to go to the police station
where he was about to be taken for questioning, tending to show that he had something to hide.
He certainly did not go to the police afterwards to clear up the matter and claim his taxi.

3. PO2 Gregorio positively identified accused Gomez as one of the men he saw running away
from the scene of the shooting.

4. The text messages identified Kua Justin as one of those who engaged PO2 Pangilinan in the
shootout; the messages also referred to Kua Justin as the one who was hit in such shootout and
later died in a hospital in Bacoor, Cavite. These messages linked the other accused.
5. During the follow-up operations, the police investigators succeeded in entrapping accused
Santos, Jalandoni, Enojas, and Gomez, who were all named in the text messages.

6. The text messages sent to the phone recovered from the taxi driven by Enojas clearly made
references to the 7-11 shootout and to the wounding of Kua Justin, one of the gunmen, and his
subsequent death.

7. The context of the messages showed that the accused were members of an organized group of
taxicab drivers engaged in illegal activities.

8. Upon the arrest of the accused, they were found in possession of mobile phones with call
numbers that corresponded to the senders of the messages received on the mobile phone that
accused Enojas left in his taxicab.13

The Court must, however, disagree with the CAs ruling that the aggravating circumstances of a)
aid of armed men and b) use of unlicensed firearms qualified the killing of PO2 Pangilinan to
murder. In aid of armed men, the men act as accomplices only. They must not be acting in the
commission of the crime under the same purpose as the principal accused, otherwise they are to
be regarded as co-principals or co-conspirators. The use of unlicensed firearm, on the other hand,
is a special aggravating circumstance that is not among the circumstances mentioned in Article
248 of the Revised Penal Code as qualifying a homicide to murder.14 Consequently, the accused
in this case may be held liable only for homicide, aggravated by the use of unlicensed firearms, a
circumstance alleged in the information.

As to the admissibility of the text messages, the RTC admitted them in conformity with the
Courts earlier Resolution applying the Rules on Electronic Evidence to criminal actions.15 Text
messages are to be proved by the testimony of a person who was a party to the same or has
personal knowledge of them.16 Here, PO3 Cambi, posing as the accused Enojas, exchanged text
messages with the other accused in order to identify and entrap them. As the recipient of those
messages sent from and to the mobile phone in his possession, PO3 Cambi had personal
knowledge of such messages and was competent to testify on them.

The accused lament that they were arrested without a valid warrant of arrest. But, assuming that
this was so, it cannot be a ground for acquitting them of the crime charged but for rejecting any
evidence that may have been taken from them after an unauthorized search as an incident of an
unlawful arrest, a point that is not in issue here. At any rate, a crime had been committedthe
killing of PO2 Pangilinanand the investigating police officers had personal knowledge of facts
indicating that the persons they were to arrest had committed it.17 The text messages to and from
the mobile phone left at the scene by accused Enojas provided strong leads on the participation
and identities of the accused. Indeed, the police caught them in an entrapment using this
knowledge.

The award of damages by the courts below has to be modified to conform to current
jurisprudence.18crallawlibrary

WHEREFORE, the Court MODIFIES the Court of Appeals Decision of June 14, 2012 in CA-
G.R. CR-HC 03377. The Court instead FINDS accused-appellants Noel Enojas y Hingpit,
Arnold Gomez y Fabregas, Fernando Santos y Delantar, and Roger Jalandoni y Ari GUILTY of
the lesser crime of HOMICIDE with the special aggravating circumstance of use of unlicensed
firearms. Applying the Indeterminate Sentence Law, the Court SENTENCES each of them to 12
years of prision mayor, as minimum, to 20 years of reclusion temporal, as maximum. The Court
also MODIFIES the award of exemplary damages by increasing it to P30,000.00, with an
additional P50,000.00 for civil indemnity.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Mendoza, and Leonen, JJ., concur.

3. Testimonial Evidence

Disqualification

i. Mental incapacity or immaturity

People of the Philippines vs Golimlim

THIRD DIVISION

G.R. No. 145225 April 2, 2004

PEOPLE OF THE PHILIPPINES, appellee,

vs.
SALVADOR GOLIMLIM @ "BADONG", appellants.

DECISION

CARPIO MORALES, J.:

On appeal is the Decision1 of June 9, 2000 of the Regional Trial Court of Sorsogon, Sorsogon,
Branch 65 in Criminal Case No. 241, finding appellant Salvador Golimlim alias "Badong" guilty
beyond reasonable doubt of rape, imposing on him the penalty of reclusion perpetua, and
holding him civilly liable in the amount of P50,000.00 as indemnity, and P50,000.00 as moral
damages.

The Information dated April 16, 1997 filed against appellant reads as follows:

That sometime in the month of August, 1996, at Barangay Bical, Municipality of Bulan,
Province of Sorsogon, Philippines and within the jurisdiction of this Honorable Court the
above-named accused, armed with a bladed weapon, by means of violence and
 intimidation, did then and there, wilfully, unlawfully and feloniously, have carnal
knowledge of one Evelyn Canchela against her will and without her consent, to her
damage and prejudice.

Contrary to law.2

Upon arraignment on December 15, 1997,3 appellant, duly assisted by counsel, pleaded not
guilty to the offense charged.

The facts established by the prosecution are as follows:

Private complainant Evelyn G. Canchela (Evelyn), is a mental retardate. When her

mother, Amparo Hachero, left for Singapore on May 2, 1996 to work as a domestic
helper, she entrusted Evelyn to the care and custody of her (Amparos) sister Jovita
Guban and her husband Salvador Golimlim, herein appellant, at Barangay Bical, Bulan,
Sorsogon.4

Sometime in August 1996, Jovita left the conjugal residence to meet a certain Rosing,5 leaving
Evelyn with appellant. Taking advantage of the situation, appellant instructed private
complainant to sleep,6 and soon after she had laid down, he kissed her and took off her clothes.7
As he poked at her an object which to Evelyn felt like a knife,8 he proceeded to insert his penis
into her vagina.9 His lust satisfied, appellant fell asleep.

When Jovita arrived, Evelyn told her about what appellant did to her. Jovita, however, did not
believe her and in fact she scolded her.10

Sometime in December of the same year, Lorna Hachero, Evelyns half-sister, received a letter
from their mother Amparo instructing her to fetch Evelyn from Sorsogon and allow her to stay in
Novaliches, Quezon City where she (Lorna) resided. Dutifully, Lorna immediately repaired to
appellants home in Bical, and brought Evelyn with her to Manila.

A week after she brought Evelyn to stay with her, Lorna suspected that her sister was pregnant as
she noticed her growing belly. She thereupon brought her to a doctor at the Pascual General
Hospital at Baeza, Novaliches, Quezon City for check-up and ultrasound examination.

Lornas suspicions were confirmed as the examinations revealed that Evelyn was indeed
pregnant.11 She thus asked her sister how she became pregnant, to which Evelyn replied that
appellant had sexual intercourse with her while holding a knife.12

In February of 1997, the sisters left for Bulan, Sorsogon for the purpose of filing a criminal
complaint against appellant. The police in Bulan, however, advised them to first have Evelyn
examined. Obliging, the two repaired on February 24, 1997 to the Municipal Health Office of
Bulan, Sorsogon where Evelyn was examined by Dr. Estrella Payoyo.13 The Medico-legal
Report revealed the following findings, quoted verbatim:

FINDINGS: LMP [last menstrual period]: Aug. 96 ?

 Abd [abdomen]: 7 months AOG [age of gestation]

FHT [fetal heart tone]: 148/min

Presentation: Cephalic

Hymen: old laceration at 3, 5, 7, & 11 oclock position14

On the same day, the sisters went back to the Investigation Section of the Bulan Municipal
Police Station before which they executed their sworn statements.15

On February 27, 1997, Evelyn, assisted by Lorna, filed a criminal complaint for rape16 against
appellant before the Municipal Trial Court of Bulan, Sorsogon, docketed as Criminal Case No.
6272.

In the meantime or on May 7, 1997, Evelyn gave birth to a girl, Joana Canchela, at Guruyan,
Juban, Sorsogon.17

Appellant, on being confronted with the accusation, simply said that it is not true "[b]ecause her
mind is not normal,"18 she having "mentioned many other names of men who ha[d] sexual
intercourse with her."19

Finding for the prosecution, the trial court, by the present appealed Decision, convicted appellant
as charged. The dispositive portion of the decision reads:

WHEREFORE, premises considered, accused Salvador Golimlim having been found

guilty of the crime of RAPE (Art. 335 R.P.C. as amended by RA 7659) beyond
reasonable doubt is hereby sentenced to suffer the penalty of RECLUSION PERPETUA,
and to indemnify the offended party Evelyn Canchela in the amount of P50,000.00 as
indemnity and another P50,000.00 as moral damage[s], and to pay the costs.

SO ORDERED.20

Hence, the present appeal, appellant assigning to the trial court the following errors:

I. THE COURT A QUO GRAVELY ERRED IN GIVING WEIGHT AND CREDENCE

TO THE CONTRADICTORY AND IMPLAUSIBLE TESTIMONY OF EVELYN
CANCHELA, A MENTAL RETARDATE, [AND]

II. THE COURT A QUO GRAVELY ERRED IN FINDING THAT THE GUILT OF
THE ACCUSED-APPELLANT FOR THE CRIME CHARGED HAS BEEN PROVEN
BEYOND REASONABLE DOUBT.21

Appellant argues that Evelyns testimony is not categorical and is replete with contradictions,
thus engendering grave doubts as to his criminal culpability.
In giving credence to Evelyns testimony and finding against appellant, the trial court made the
following observations, quoted verbatim:

1) Despite her weak and dull mental state the victim was consistent in her claim that her
Papay Badong (accused Salvador Golimlim) had carnal knowledge of her and was the
author of her pregnancy, and nobody else (See: For comparison her Sworn Statement on
p. 3/Record; her narration in the Psychiatric Report on pp. 47 & 48/Record; the TSNs of
her testimony in open court);

2) She remains consistent that her Papay Badong raped her only once;

3) That the contradictory statements she made in open court relative to the details of how
she was raped, although would seem derogatory to her credibility and reliability as a
witness under normal conditions, were amply explained by the psychiatrist who
examined her and supported by her findings (See: Exhibits F to F-2);

4) Despite her claim that several persons laid on top of her (which is still subject to
question considering that the victim could not elaborate on its meaning), the lucid fact
remains that she never pointed to anybody else as the author of her pregnancy, but her
Papay Badong. Which only shows that the trauma that was created in her mind by the
incident has remained printed in her memory despite her weak mental state. Furthermore,
granting for the sake of argument that other men also laid on top of her, this does not
deviate from the fact that her Papay Badong (the accused) had sexual intercourse with
her.22

The trial judges assessment of the credibility of witnesses testimonies is, as has repeatedly been
held by this Court, accorded great respect on appeal in the absence of grave abuse of discretion
on its part, it having had the advantage of actually examining both real and testimonial evidence
including the demeanor of the witnesses.23

In the present case, no cogent reason can be appreciated to warrant a departure from the findings
of the trial court with respect to the assessment of Evelyns testimony.

That Evelyn is a mental retardate does not disqualify her as a witness nor render her testimony
bereft of truth.

Sections 20 and 21 of Rule 130 of the Revised Rules of Court provide:

SEC. 20. Witnesses; their qualifications. Except as provided in the next succeeding
section, all persons who can perceive, and perceiving, can make known their perception
to others, may be witnesses.

xxx

SEC. 21. Disqualification by reason of mental incapacity or immaturity. The following

persons cannot be witnesses:
 (a) Those whose mental condition, at the time of their production for examination, is such
that they are incapable of intelligently making known their perception to others;

(b) Children whose mental maturity is such as to render them incapable of perceiving the
facts respecting which they are examined and of relating them truthfully.

In People v. Trelles,24 where the trial court relied heavily on the therein mentally retarded private
complainants testimony irregardless of her "monosyllabic responses and vacillations between
lucidity and ambiguity," this Court held:

A mental retardate or a feebleminded person is not, per se, disqualified from being a
witness, her mental condition not being a vitiation of her credibility. It is now universally
accepted that intellectual weakness, no matter what form it assumes, is not a valid
objection to the competency of a witness so long as the latter can still give a fairly
intelligent and reasonable narrative of the matter testified to.25

It can not then be gainsaid that a mental retardate can be a witness, depending on his or her
ability to relate what he or she knows.26 If his or her testimony is coherent, the same is
admissible in court.27

To be sure, modern rules on evidence have downgraded mental incapacity as a ground to

disqualify a witness. As observed by McCormick, the remedy of excluding such a witness who
may be the only person available who knows the facts, seems inept and primitive. Our rules
follow the modern trend of evidence.28

Thus, in a long line of cases,29 this Court has upheld the conviction of the accused based mainly
on statements given in court by the victim who was a mental retardate.

From a meticulous scrutiny of the records of this case, there is no reason to doubt Evelyns
credibility. To be sure, her testimony is not without discrepancies, given of course her
feeblemindedness.

By the account of Dr. Chona Cuyos-Belmonte, Medical Specialist II at the Psychiatric

Department of the Bicol Medical Center, who examined Evelyn, although Evelyn was suffering
from moderate mental retardation with an IQ of 46,30 she is capable of perceiving and relating
events which happened to her. Thus the doctor testified:

Q: So do you try to impress that although she answers in general terms it does not
necessarily mean that she might be inventing answers only that she could not go to the
specific details because of dullness?

A: I dont think she was inventing her answer because I conducted mental status
examination for three (3) times and I tried to see the consistency in the narration but very
poor (sic) in giving details.

xxx
Q: May we know what she related to you?

A: She related to me that she was raped by her uncle Tatay Badong. What she
mentioned was that, and I quote: hinila ang panty ko, pinasok ang pisot at bayag niya sa
pipi ko. She would laugh inappropriately after telling me that particular incident. I also
tried to ask her regarding the dates, the time of the incident, but she could not really. I
tried to elicit those important things, but the patient had a hard time remembering those
dates.

Q: But considering that you have evaluated her mentally, gave her I.Q. test, in your
honest opinion, do you believe that this narration by the patient to you about the rape is
reliable?

A: Yes, sir.

Q: Why do you consider that reliable?

A: Being a (sic) moderately retarded, I have noticed the spontaneity of her answers
during the time of the testing. She was not even hesitating when she told me she was
raped once at home by her Tatay Badong; and she was laughing when she told me about
how it was done on (sic) her. So, although she may be inappropriate but (sic) she was
spontaneous, she was consistent.

Q: Now, I would like to relate to you an incident that happened in this Court for you to
give us your expert opinion. I tried to present the victim in this case to testify. While she
testified that she was raped by her uncle Badong, when asked about the details, thereof,
she would not make (sic) the detail. She only answered wala (no). I ask this question
because somehow this seems related to your previous evaluation that while she gave an
answer, she gave no detail. Now, I was thinking because I am a man and I was the one
asking and the Judge is a man also. And while the mother would say that she would relate
to her and she related to you, can you explain to us why when she was presented in court
that occurrence, that event happened?

A: There are a lot of possible answers to that question; one, is the courts atmosphere
itself. This may have brought a little anxiety on the part of the patient and this inhibits her
from relating some of the details relative to the incident-in-question. When I conducted
my interview with the patient, there were only two (2) of us in the room. I normally do
not ask this question during the first session with the patient because these are
emotionally leading questions, and I do not expect the patient to be very trusting. So, I
usually ask this type of questions during the later part of my examination to make her
relax during my evaluation. So in this way, she will be more cooperative with me. I dont
think that this kind of atmosphere within the courtroom with some people around, this
could have inhibited the patient from answering questions.

xxx
 Q: What if the victim is being coached or led by someone else, will she be able to answer
the questions?

A: Yes, she may be able to answer the questions, but you would notice the inconsistency
of the answers because what we normally do is that we present the questions in different
ways, and we expect the same answer. This is how we try to evaluate the patient. If the
person, especially a retarded, is being coached by somebody, the answers will no longer
be consistent.

Q: You also mentioned a while ago that the answers given by the patient, taken all in all,
were consistent?

A: Yes, sir.31 (Underscoring supplied)

As noted in the above-quoted testimony of Dr. Belmonte, Evelyn could give spontaneous and
consistent answers to the same but differently framed questions under conditions which do not
inhibit her from answering. It could have been in this light that Evelyn was able to relate in court,
upon examination by a female government prosecutor and the exclusion of the public from the
proceedings, on Dr. Belmontes suggestion,32 how, as quoted below, she was raped and that it
was appellant who did it:

Q: Lorna Hachero testified before this Court that you gave birth to a baby girl named
Johanna, is this true?

A: (The witness nods, yes.)

xxx

Q: Who is the father of Johanna?

A: Papay Badong

Q: Who is this Papay Badong that you are referring to?

A: The husband of Mamay Bita.

Q: Is he here in court?

A: He is here.

Q: Please look around and point him to us.

A: (The witness pointing to the lone man sitting in the first row of the gallery wearing a
regular prison orange t-shirt who gave his name as Salvador Golimlim when asked.)
Q: Why were you able to say that it is Papay Badong who is the father of your child
Johanna?

A: Because then I was left at Mamay Bitas house, although I am not there now.

Q: And that house where you were left is also the house of your Papay Badong?

A: Yes maam.

Q: What did Salvador Golimlim or your Papay Badong do to you thats why you were
able to say that he is the father of your child?

A: I was undressed by him.

xxx

Q: What did you do after you were undressed?

A: I was scolded by the wife, Mamay Bita.

Q: I am referring to that very moment when you were undressed. Immediately after your
Papay Badong undressed you, what did you do?

xxx

A: He laid on top of me.

Q: What was your position when he laid on top of you?

A: I was lying down.

Q: Then after he went on top of you, what did he do there?

A: He made (sic) sexual intercourse with me.

Q: When you said he had a (sic) sexual intercourse with you, what did he do exactly?

A: He kissed me.

Q: Where?

A: On the cheeks (witness motioning indicating her cheeks).

Q: What else did he do? Please describe before this Honorable Court the sexual
intercourse which you are referring to which the accused did to you.
A: Initoy and he slept after that.

(to Court)

Nevertheless, may we request that the local term for sexual intercourse, the word Initoy
which was used by the witness be put on the record, and we request judicial notice of the
fact that initoy is the local term for sexual intercourse.

xxx

Q: What did you feel when your Papay Badong had sexual intercourse with you?

A: I felt a knife; it was like a knife.

Q: Where did you feel that knife?

A: I forgot.

Q: Why did you allow your Papay Badong to have sexual intercourse with you?

A: I will not consent to it.

xxx

Q: Did you like what he did to you?

A: I do not want it.

Q: But why did it happen?

A: I was forced to.

xxx

Q: Did you feel anything when he inserted into your vagina when your Papay Badong
laid on top of you?

A: His sexual organ/penis.

Q: How did you know that it was the penis of your Papay Badong that was entered into
your vagina?

A: It was put on top of me.

Q: Did it enter your vagina?

 A: Yes, Your Honor.

xxx

Q: Madam Witness, is it true that your Papay Badong inserted his penis into your vagina
or sexual organ during that time that he was on top of you?

A: (The witness nods, yes.)33 (Underscoring supplied)

Appellants bare denial is not only an inherently weak defense. It is not supported by clear and
convincing evidence. It cannot thus prevail over the positive declaration of Evelyn who
convincingly identified him as her rapist.34

In convicting appellant under Article 335 of the Revised Penal Code, as amended by Republic
Act 7659 (the law in force when the crime was committed in 1996), the trial court did not specify
under which mode the crime was committed. Under the said article, rape is committed thus:

ART. 335. When and how rape is committed. Rape is committed by having carnal
knowledge of a woman under any of the following circumstances.

1. By using force or intimidation;

2. When the woman is deprived of reason or otherwise unconscious; and

3. When the woman is under twelve years of age or is demented.

The crime of rape shall be punished by reclusion perpetua.

Whenever the crime of rape is committed with the use of a deadly weapon or by two or
more persons, the penalty shall be reclusion perpetua or death.

xxx

It is settled that sexual intercourse with a woman who is a mental retardate constitutes statutory
rape which does not require proof that the accused used force or intimidation in having carnal
knowledge of the victim for conviction.35 The fact of Evelyns mental retardation was not,
however, alleged in the Information and, therefore, cannot be the basis for conviction. Such
notwithstanding, that force and intimidation attended the commission of the crime, the mode of
commission alleged in the Information, was adequately proven. It bears stating herein that the
mental faculties of a retardate being different from those of a normal person, the degree of force
needed to overwhelm him or her is less. Hence, a quantum of force which may not suffice when
the victim is a normal person, may be more than enough when employed against an imbecile.36

Still under the above-quoted provision of Art. 335 of the Rev ised Penal Code, when the crime of
rape is committed with the use of a deadly weapon, the penalty shall be reclusion perpetua to
death. In the case at bar, however, although there is adequate evidence showing that appellant
indeed used force and intimidation, that is not the case with respect to the use of a deadly
weapon.

WHEREFORE, the assailed Decision of the Regional Trial Court of Sorsogon, Sorsogon,
Branch 65 in Criminal Case No. 241 finding appellant, Salvador Golimlim alias "Badong,"
GUILTY beyond reasonable doubt of rape, which this Court finds to have been committed
under paragraph 1, Article 335 of the Revised Penal Code, and holding him civilly liable
therefor, is hereby AFFIRMED.

Costs against appellant.

SO ORDERED.

Vitug, Sandoval-Gutierrez, and Corona, JJ., concur.