POLO S.

PANTALEON,
Petitioner,

- versus -

AMERICAN EXPRESS INTERNATIONAL, INC.,

Respondent. G.R. No. 174269

x----------------------------------------------------------------------------------------x

RESOLUTION

BRION, J.:

We resolve the motion for reconsideration filed by respondent American Express International, Inc. (AMEX)
dated June 8, 2009, seeking to reverse our Decision dated May 8, 2009 where we ruled that AMEX was guilty of
culpable delay in fulfilling its obligation to its cardholder petitioner Polo Pantaleon. Based on this conclusion, we
held AMEX liable for moral and exemplary damages, as well as attorney’s fees and costs of litigation.

FACTUAL ANTECEDENTS

The established antecedents of the case are narrated below.

AMEX is a resident foreign corporation engaged in the business of providing credit services through the operation
of a charge card system. Pantaleon has been an AMEX cardholder since 1980.

In October 1991, Pantaleon, together with his wife (Julialinda), daughter (Regina), and son (Adrian
Roberto), went on a guided European tour. On October 25, 1991, the tour group arrived in Amsterdam. Due to
their late arrival, they postponed the tour of the city for the following day.

The next day, the group began their sightseeing at around 8:50 a.m. with a trip to the Coster Diamond
House (Coster). To have enough time for take a guided city tour of Amsterdam before their departure scheduled
on that day, the tour group planned to leave Coster by 9:30 a.m. at the latest.

While at Coster, Mrs. Pantaleon decided to purchase some diamond pieces worth a total of US$13,826.00.
Pantaleon presented his American Express credit card to the sales clerk to pay for this purchase. He did this at
around 9:15 a.m. The sales clerk swiped the credit card and asked Pantaleon to sign the charge slip, which was
then electronically referred to AMEXs Amsterdam office at 9:20 a.m.

At around 9:40 a.m., Coster had not received approval from AMEX for the purchase so Pantaleon asked the store
clerk to cancel the sale. The store manager, however, convinced Pantaleon to wait a few more minutes.
Subsequently, the store manager informed Pantaleon that AMEX was asking for bank references; Pantaleon
responded by giving the names of his Philippine depository banks.

At around 10 a.m., or 45 minutes after Pantaleon presented his credit card, AMEX still had not approved the
purchase. Since the city tour could not begin until the Pantaleons were onboard the tour bus, Coster decided to
release at around 10:05 a.m. the purchased items to Pantaleon even without AMEXs approval

When the Pantaleons finally returned to the tour bus, they found their travel companions visibly
irritated. This irritation intensified when the tour guide announced that they would have to cancel the tour because
of lack of time as they all had to be in Calais, Belgium by 3 p.m. to catch the ferry to London.

From the records, it appears that after Pantaleons purchase was transmitted for approval to
AMEXs Amsterdam office at 9:20 a.m.; was referred to AMEXs Manila office at 9:33 a.m.; and was approved by
the Manila office at 10:19 a.m. At 10:38 a.m., AMEXs Manila office finally transmitted the Approval Code to
AMEXs Amsterdam office. In all, it took AMEX a total of 78 minutes to approve Pantaleons purchase and
to transmit the approval to the jewelry store.
After the trip to Europe, the Pantaleon family proceeded to the United States. Again, Pantaleon experienced delay
in securing approval for purchases using his American Express credit card on two separate occasions. He
experienced the first delay when he wanted to purchase golf equipment in the amount of US$1,475.00 at the
Richard Metz Golf Studio in New York on October 30, 1991. Another delay occurred when he wanted to purchase
childrens shoes worth US$87.00 at the Quiency Market in Boston on November 3, 1991.

Upon return to Manila, Pantaleon sent AMEX a letter demanding an apology for the humiliation and inconvenience
he and his family experienced due to the delays in obtaining approval for his credit card purchases. AMEX
responded by explaining that the delay in Amsterdam was due to the amount involved the charged purchase of
US$13,826.00 deviated from Pantaleons established charge purchase pattern. Dissatisfied with this
explanation, Pantaleon filed an action for damages against the credit card company with the Makati City Regional
Trial Court (RTC).
 On August 5, 1996, the RTC found AMEX guilty of delay, and awarded Pantaleon P500,000.00 as moral
damages, P300,000.00 as exemplary damages, P100,000.00 as attorney’s fees, and P85,233.01 as litigation
expenses.

On appeal, the CA reversed the awards.[8] While the CA recognized that delay in the nature of mora
accipiendi or creditors default attended AMEXs approval of Pantaleons purchases, it disagreed with the RTCs
finding that AMEX had breached its contract, noting that the delay was not attended by bad faith, malice or gross
negligence.The appellate court found that AMEX exercised diligent efforts to effect the approval of Pantaleons
purchases; the purchase at Coster posed particularly a problem because it was at variance with Pantaleons
established charge pattern. As there was no proof that AMEX breached its contract, or that it acted in a wanton,
fraudulent or malevolent manner, the appellate court ruled that AMEX could not be held liable for any form of
damages.

Pantaleon questioned this decision via a petition for review on certiorari with this Court.

In our May 8, 2009 decision, we reversed the appellate court’s decision and held that AMEX was guilty
of mora solvendi, or debtors default. AMEX, as debtor, had an obligation as the credit provider to act on Pantaleons
purchase requests, whether to approve or disapprove them, with timely dispatch. Based on the evidence on
record, we found that AMEX failed to timely act on Pantaleons purchases.

Based on the testimony of AMEXs credit authorizer Edgardo Jaurique, the approval time for credit card
charges would be three to four seconds under regular circumstances. In Pantaleons case, it took AMEX 78 minutes
to approve the Amsterdam purchase. We attributed this delay to AMEXs Manila credit authorizer, Edgardo
Jaurique, who had to go over Pantaleons past credit history, his payment record and his credit and bank references
before he approved the purchase. Finding this delay unwarranted, we reinstated the RTC decision and awarded
Pantaleon moral and exemplary damages, as well as attorney’s fees and costs of litigation.

THE MOTION FOR RECONSIDERATION

In its motion for reconsideration, AMEX argues that this Court erred when it found AMEX guilty of culpable delay
in complying with its obligation to act with timely dispatch on Pantaleons purchases. While AMEX admits that it
normally takes seconds to approve charge purchases, it emphasizes that Pantaleon experienced delay
in Amsterdam because his transaction was not a normal one. To recall, Pantaleon sought to charge in a single
transaction jewelry items purchased from Coster in the total amount of US$13,826.00 or P383,746.16. While
the total amount of Pantaleons previous purchases using his AMEX credit card did exceed US$13,826.00, AMEX
points out that these purchases were made in a span of more than 10 years, not in a single transaction.

Because this was the biggest single transaction that Pantaleon ever made using his AMEX credit card,
AMEX argues that the transaction necessarily required the credit authorizer to carefully review Pantaleons credit
history and bank references. AMEX maintains that it did this not only to ensure Pantaleons protection (to minimize
the possibility that a third party was fraudulently using his credit card), but also to protect itself from the risk that
Pantaleon might not be able to pay for his purchases on credit. This careful review, according to AMEX, is also in
keeping with the extraordinary degree of diligence required of banks in handling its transactions. AMEX concluded
that in these lights, the thorough review of Pantaleons credit record was motivated by legitimate concerns and
could not be evidence of any ill will, fraud, or negligence by AMEX.

AMEX further points out that the proximate cause of Pantaleons humiliation and embarrassment was his
own decision to proceed with the purchase despite his awareness that the tour group was waiting for him and his
wife. Pantaleon could have prevented the humiliation had he cancelled the sale when he noticed that the credit
approval for the Coster purchase was unusually delayed.

In his Comment dated February 24, 2010, Pantaleon maintains that AMEX was guilty of mora solvendi, or
delay on the part of the debtor, in complying with its obligation to him. Based on jurisprudence, a just cause for
delay does not relieve the debtor in delay from the consequences of delay; thus, even if AMEX had a justifiable
reason for the delay, this reason would not relieve it from the liability arising from its failure to timely act on
Pantaleons purchase.

In response to AMEXs assertion that the delay was in keeping with its duty to perform its obligation with
extraordinary diligence, Pantaleon claims that this duty includes the timely or prompt performance of its
obligation.

As to AMEXs contention that moral or exemplary damages cannot be awarded absent a finding of malice,
Pantaleon argues that evil motive or design is not always necessary to support a finding of bad faith; gross
negligence or wanton disregard of contractual obligations is sufficient basis for the award of moral and exemplary
damages.
 OUR RULING

We GRANT the motion for reconsideration.

Brief historical background

A credit card is defined as any card, plate, coupon book, or other credit device existing for the purpose of
obtaining money, goods, property, labor or services or anything of value on credit. It traces its roots to the charge
card first introduced by the Diners Club in New York City in 1950. American Express followed suit by introducing
its own charge card to the American market in 1958.

In the Philippines, the now defunct Pacific Bank was responsible for bringing the first credit card into the
country in the 1970s. However, it was only in the early 2000s that credit card use gained wide acceptance in the
country, as evidenced by the surge in the number of credit card holders then.

Nature of Credit Card Transactions

To better understand the dynamics involved in credit card transactions, we turn to the United States case
of Harris Trust & Savings Bank v. McCray which explains:

The bank credit card system involves a tripartite relationship between the issuer bank, the
cardholder, and merchants participating in the system. The issuer bank establishes an account on
behalf of the person to whom the card is issued, and the two parties enter into an agreement which
governs their relationship. This agreement provides that the bank will pay for cardholders account
the amount of merchandise or services purchased through the use of the credit card and will also
make cash loans available to the cardholder. It also states that the cardholder shall be liable to
the bank for advances and payments made by the bank and that the cardholders obligation to pay
the bank shall not be affected or impaired by any dispute, claim, or demand by the cardholder with
respect to any merchandise or service purchased.

The merchants participating in the system agree to honor the banks credit cards. The bank
irrevocably agrees to honor and pay the sales slips presented by the merchant if the merchant
performs his undertakings such as checking the list of revoked cards before accepting the card.
x x x.

These slips are forwarded to the member bank which originally issued the card. The
cardholder receives a statement from the bank periodically and may then decide whether to make
payment to the bank in full within a specified period, free of interest, or to defer payment and
ultimately incur an interest charge.

We adopted a similar view in CIR v. American Express International, Inc. (Philippine branch), where we
also recognized that credit card issuers are not limited to banks. We said:

Under RA 8484, the credit card that is issued by banks in general, or by non-banks in
particular, refers to any card x x x or other credit device existing for the purpose of
obtaining x x x goods x x x or services x x x on credit; and is being used usually on a revolving
basis. This means that the consumer-credit arrangement that exists between the issuer and the
holder of the credit card enables the latter to procure goods or services on a continuing basis as
long as the outstanding balance does not exceed a specified limit. The card holder is, therefore,
given the power to obtain present control of goods or service on a promise to pay for them in the
future.

Business establishments may extend credit sales through the use of the credit card facilities of a
non-bank credit card company to avoid the risk of uncollectible accounts from their
customers. Under this system, the establishments do not deposit in their bank accounts the credit
card drafts that arise from the credit sales. Instead, they merely record their receivables from the
credit card company and periodically send the drafts evidencing those receivables to the latter.

The credit card company, in turn, sends checks as payment to these business
establishments, but it does not redeem the drafts at full price. The agreement between them
usually provides for discounts to be taken by the company upon its redemption of the drafts. At
the end of each month, it then bills its credit card holders for their respective drafts redeemed
during the previous month. If the holders fail to pay the amounts owed, the company sustains
the loss.

Simply put, every credit card transaction involves three contracts, namely: (a) the sales
contract between the credit card holder and the merchant or the business establishment which accepted the
credit card; (b) the loan agreement between the credit card issuer and the credit card holder; and lastly, (c)
the promise to pay between the credit card issuer and the merchant or business establishment.
Credit card issuer cardholder relationship
 When a credit card company gives the holder the privilege of charging items at establishments associated
with the issuer, a necessary question in a legal analysis is when does this relationship begin? There are two
diverging views on the matter. In City Stores Co. v. Henderson, another U.S. decision, held that:

The issuance of a credit card is but an offer to extend a line of open account credit. It is
unilateral and supported by no consideration. The offer may be withdrawn at any time, without
prior notice, for any reason or, indeed, for no reason at all, and its withdrawal breaches no duty
for there is no duty to continue it and violates no rights.

Thus, under this view, each credit card transaction is considered a separate offer and acceptance.

Novack v. Cities Service Oil Co. echoed this view, with the court ruling that the mere issuance of a credit
card did not create a contractual relationship with the cardholder.

On the other end of the spectrum is Gray v. American Express Company which recognized the card membership
agreement itself as a binding contract between the credit card issuer and the card holder. Unlike in the Novack and
the City Stores cases, however, the cardholder in Gray paid an annual fee for the privilege of being an American
Express cardholder.

In our jurisdiction, we generally adhere to the Gray ruling, recognizing the relationship between the credit card
issuer and the credit card holder as a contractual one that is governed by the terms and conditions found in the
card membership agreement. This contract provides the rights and liabilities of a credit card company to its
cardholders and vice versa.

We note that a card membership agreement is a contract of adhesion as its terms are prepared solely by
the credit card issuer, with the cardholder merely affixing his signature signifying his adhesion to these
terms.[22] This circumstance, however, does not render the agreement void; we have uniformly held that contracts
of adhesion are as binding as ordinary contracts, the reason being that the party who adheres to the contract is
free to reject it entirely. The only effect is that the terms of the contract are construed strictly against the party
who drafted it.

On AMEXs obligations to Pantaleon

We begin by identifying the two privileges that Pantaleon assumes he is entitled to with the issuance of his AMEX
credit card, and on which he anchors his claims. First, Pantaleon presumes that since his credit card has no pre-
set spending limit, AMEX has the obligation to approve all his charge requests. Conversely, even if AMEX has no
such obligation, at the very least it is obliged to act on his charge requests within a specific period of time.

i. Use of credit card a mere offer to enter into loan agreements

Although we recognize the existence of a relationship between the credit card issuer and the credit card
holder upon the acceptance by the cardholder of the terms of the card membership agreement (customarily
signified by the act of the cardholder in signing the back of the credit card), we have to distinguish this
contractual relationship from the creditor-debtor relationship which only arises after the credit card
issuer has approved the cardholders purchase request. The first relates merely to an agreement providing
for credit facility to the cardholder. The latter involves the actual credit on loan agreement involving three
contracts, namely: the sales contract between the credit card holder and the merchant or the business
establishment which accepted the credit card; the loan agreement between the credit card issuer and the credit
card holder; and the promise to pay between the credit card issuer and the merchant or business establishment.

From the loan agreement perspective, the contractual relationship begins to exist only upon the meeting
of the offer[25] and acceptance of the parties involved. In more concrete terms, when cardholders use their credit
cards to pay for their purchases, they merely offer to enter into loan agreements with the credit card company.
Only after the latter approves the purchase requests that the parties enter into binding loan contracts, in keeping
with Article 1319 of the Civil Code, which provides:

Article 1319. Consent is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer.

This view finds support in the reservation found in the card membership agreement itself, particularly paragraph
10, which clearly states that AMEX reserve[s] the right to deny authorization for any requested Charge. By
so providing, AMEX made its position clear that it has no obligation to approve any and all charge requests made
by its card holders.

ii. AMEX not guilty of culpable delay

Since AMEX has no obligation to approve the purchase requests of its credit cardholders, Pantaleon cannot
claim that AMEX defaulted in its obligation. Article 1169 of the Civil Code, which provides the requisites to hold a
debtor guilty of culpable delay, states:
 Article 1169. Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfillment of their obligation. x xx.

The three requisites for a finding of default are: (a) that the obligation is demandable and liquidated; (b)
the debtor delays performance; and (c) the creditor judicially or extrajudicially requires the debtors performance.

Based on the above, the first requisite is no longer met because AMEX, by the express terms of the credit
card agreement, is not obligated to approve Pantaleons purchase request. Without a demandable obligation, there
can be no finding of default.

Apart from the lack of any demandable obligation, we also find that Pantaleon failed to make the demand
required by Article 1169 of the Civil Code.

As previously established, the use of a credit card to pay for a purchase is only an offer to the credit card
company to enter a loan agreement with the credit card holder. Before the credit card issuer accepts this
offer, no obligation relating to the loan agreement exists between them. On the other hand, a demand is
defined as the assertion of a legal right; xxx an asking with authority, claiming or challenging as due. A demand
presupposes the existence of an obligation between the parties.

Thus, every time that Pantaleon used his AMEX credit card to pay for his purchases, what the stores
transmitted to AMEX were his offers to execute loan contracts. These obviously could not be classified as the
demand required by law to make the debtor in default, given that no obligation could arise on the part of AMEX
until after AMEX transmitted its acceptance of Pantaleons offers. Pantaleons act of insisting on and waiting for the
charge purchases to be approved by AMEX is not the demand contemplated by Article 1169 of the Civil Code.

For failing to comply with the requisites of Article 1169, Pantaleons charge that AMEX is guilty of culpable
delay in approving his purchase requests must fail.

iii. On AMEXs obligation to act on the offer within a specific period of time

Even assuming that AMEX had the right to review his credit card history before it approved his purchase
requests, Pantaleon insists that AMEX had an obligation to act on his purchase requests, either to approve or
deny, in a matter of seconds or in timely dispatch. Pantaleon impresses upon us the existence of this obligation
by emphasizing two points: (a) his card has no pre-set spending limit; and (b) in his twelve years of using his
AMEX card, AMEX had always approved his charges in a matter of seconds.

Pantaleons assertions fail to convince us.

We originally held that AMEX was in culpable delay when it acted on the Coster transaction, as well as the
two other transactions in the United States which took AMEX approximately 15 to 20 minutes to approve. This
conclusion appears valid and reasonable at first glance, comparing the time it took to finally get the Coster
purchase approved (a total of 78 minutes), to AMEXs normal approval time of three to four seconds (based on
the testimony of Edgardo Jaurigue, as well as Pantaleons previous experience). We come to a different result,
however, after a closer look at the factual and legal circumstances of the case.

AMEXs credit authorizer, Edgardo Jaurigue, explained that having no pre-set spending limit in a credit
card simply means that the charges made by the cardholder are approved based on his ability to pay, as
demonstrated by his past spending, payment patterns, and personal resources. Nevertheless, every time
Pantaleon charges a purchase on his credit card, the credit card company still has to determine
whether it will allow this charge, based on his past credit history. This right to review a card holders credit
history, although not specifically set out in the card membership agreement, is a necessary implication of AMEXs
right to deny authorization for any requested charge.

As for Pantaleons previous experiences with AMEX (i.e., that in the past 12 years, AMEX has always
approved his charge requests in three or four seconds), this record does not establish that Pantaleon had a legally
enforceable obligation to expect AMEX to act on his charge requests within a matter of seconds. For one, Pantaleon
failed to present any evidence to support his assertion that AMEX acted on purchase requests in a matter of three
or four seconds as an established practice. More importantly, even if Pantaleon did prove that AMEX, as a matter
of practice or custom, acted on its customers purchase requests in a matter of seconds, this would still not be
enough to establish a legally demandable right; as a general rule, a practice or custom is not a source of a legally
demandable or enforceable right.

We next examine the credit card membership agreement, the contract that primarily governs the
relationship between AMEX and Pantaleon. Significantly, there is no provision in this agreement that
obligates AMEX to act on all cardholder purchase requests within a specifically defined period of time.
Thus, regardless of whether the obligation is worded was to act in a matter of seconds or to act in timely dispatch,
the fact remains that no obligation exists on the part of AMEX to act within a specific period of time. Even Pantaleon
admits in his testimony that he could not recall any provision in the Agreement that guaranteed AMEXs approval
of his charge requests within a matter of minutes.

Nor can Pantaleon look to the law or government issuances as the source of AMEXs alleged obligation to
act upon his credit card purchases within a matter of seconds. As the following survey of Philippine law on credit
card transactions demonstrates, the State does not require credit card companies to act upon its cardholders’
purchase requests within a specific period of time.

Republic Act No. 8484 (RA 8484), or the Access Devices Regulation Act of 1998, approved on February
11, 1998, is the controlling legislation
that regulates the issuance and use of access devices, including credit cards. The more salient portions of this law
include the imposition of the obligation on a credit card company to disclose certain important financial
information to credit card applicants, as well as a definition of the acts that constitute access device fraud.

As financial institutions engaged in the business of providing credit, credit card companies fall under
the supervisory powers of the Bangko Sentral ng Pilipinas (BSP). BSP Circular No. 398 dated August 21,
2003 embodies the BSPs policy when it comes to credit cards
The Bangko Sentral ng Pilipinas (BSP) shall foster the development of consumer credit
through innovative products such as credit cards under conditions of fair and sound consumer
credit practices. The BSP likewise encourages competition and transparency to ensure more
efficient delivery of services and fair dealings with customers.

Based on this Circular, x x x [b]efore issuing credit cards, banks and/or their subsidiary credit card
companies must exercise proper diligence by ascertaining that applicants possess good credit standing and are
financially capable of fulfilling their credit commitments. As the above-quoted policy expressly states, the general
intent is to foster fair and sound consumer credit practices.

Other than BSP Circular No. 398, a related circular is BSP Circular No. 454, issued on September 24, 2004,
but this circular merely enumerates the unfair collection practices of credit card companies a matter not relevant
to the issue at hand.

In light of the foregoing, we find and so hold that AMEX is neither contractually bound nor legally obligated
to act on its cardholders purchase requests within any specific period of time, much less a period of a matter of
seconds that Pantaleon uses as his standard. The standard therefore is implicit and, as in all contracts, must be
based on fairness and reasonableness, read in relation to the Civil Code provisions on human relations, as will be
discussed below.

AMEX acted with good faith

Thus far, we have already established that: (a) AMEX had neither a contractual nor a legal obligation to
act upon Pantaleons purchases within a specific period of time; and (b) AMEX has a right to review a cardholders
credit card history. Our recognition of these entitlements, however, does not give AMEX an unlimited
right to put off action on cardholders purchase requests for indefinite periods of time. In acting on
cardholders purchase requests, AMEX must take care not to abuse its rights and cause injury to its clients and/or
third persons. We cite in this regard Article 19, in conjunction with Article 21, of the Civil Code, which provide:

Article 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due and observe honesty and good faith.

Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
Article 19 pervades the entire legal system and ensures that a person suffering damage in the course of
anothers exercise of right or performance of duty, should find himself without relief. [36] It sets the standard for
the conduct of all persons, whether artificial or natural, and requires that everyone, in the exercise of rights and
the performance of obligations, must: (a) act with justice, (b) give everyone his due, and (c) observe honesty
and good faith. It is not because a person invokes his rights that he can do anything, even to the prejudice and
disadvantage of another.

While Article 19 enumerates the standards of conduct, Article 21 provides the remedy for the person
injured by the willful act, an action for damages. We explained how these two provisions correlate with each other
in GF Equity, Inc. v. Valenzona:

[Article 19], known to contain what is commonly referred to as the principle of abuse of
rights, sets certain standards which must be observed not only in the exercise of one's rights but
also in the performance of one's duties. These standards are the following: to act with justice; to
give everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted
by law as such, may nevertheless become the source of some illegality. When a right is
exercised in a manner which does not conform with the norms enshrined in Article 19
and results in damage to another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order, it does not provide a
remedy for its violation. Generally, an action for damages under either Article 20 or Article 21
would be proper.

In the context of a credit card relationship, although there is neither a contractual stipulation nor a specific law
requiring the credit card issuer to act on the credit card holders offer within a definite period of time, these
principles provide the standard by which to judge AMEXs actions.
According to Pantaleon, even if AMEX did have a right to review his charge purchases, it abused this right when
it unreasonably delayed the processing of the Coster charge purchase, as well as his purchase requests at the
Richard Metz Golf Studio and Kids Unlimited Store; AMEX should have known that its failure to act immediately
on charge referrals would entail inconvenience and result in humiliation, embarrassment, anxiety and distress to
its cardholders who would be required to wait before closing their transactions.

It is an elementary rule in our jurisdiction that good faith is presumed and that the burden of proving bad
faith rests upon the party alleging it. Although it took AMEX some time before it approved Pantaleons three charge
requests, we find no evidence to suggest that it acted with deliberate intent to cause Pantaleon any loss or injury,
or acted in a manner that was contrary to morals, good customs or public policy. We give credence to AMEXs
claim that its review procedure was done to ensure Pantaleons own protection as a cardholder and to prevent the
possibility that the credit card was being fraudulently used by a third person.

Pantaleon countered that this review procedure is primarily intended to protect AMEXs interests, to make
sure that the cardholder making the purchase has enough means to pay for the credit extended. Even if this were
the case, however, we do not find any taint of bad faith in such motive. It is but natural for AMEX to want to
ensure that it will extend credit only to people who will have sufficient means to pay for their purchases. AMEX,
after all, is running a business, not a charity, and it would simply be ludicrous to suggest that it would not want
to earn profit for its services. Thus, so long as AMEX exercises its rights, performs its obligations, and generally
acts with good faith, with no intent to cause harm, even if it may occasionally inconvenience others, it cannot be
held liable for damages.

We also cannot turn a blind eye to the circumstances surrounding the Coster transaction which, in our
opinion, justified the wait. In Edgardo Jaurigues own words:

Q 21: With reference to the transaction at the Coster Diamond House covered by Exhibit H, also
Exhibit 4 for the defendant, the approval came at 2:19 a.m. after the request was relayed at 1:33
a.m., can you explain why the approval came after about 46 minutes, more or less?

A21: Because we have to make certain considerations and evaluations of [Pantaleons] past
spending pattern with [AMEX] at that time before approving plaintiffs request because [Pantaleon]
was at that time making his very first single charge purchase of US$13,826 [this is below
the US$16,112.58 actually billed and paid for by the plaintiff because the difference was already
automatically approved by [AMEX] office in Netherland[s] and the record of [Pantaleons] past
spending with [AMEX] at that time does not favorably support his ability to pay for such
purchase. In fact, if the foregoing internal policy of [AMEX] had been strictly followed, the
transaction would not have been approved at all considering that the past spending pattern of the
plaintiff with [AMEX] at that time does not support his ability to pay for such purchase.

xxxx

Q: Why did it take so long?

A: It took time to review the account on credit, so, if there is any delinquencies [sic] of the
cardmember. There are factors on deciding the charge itself which are standard measures in
approving the authorization. Now in the case of Mr. Pantaleon although his account is single charge
purchase of US$13,826. [sic] this is below the US$16,000. plus actually billed x x x we would have
already declined the charge outright and asked him his bank account to support his charge. But
due to the length of his membership as cardholder we had to make a decision on hand.

As Edgardo Jaurigue clarified, the reason why Pantaleon had to wait for AMEXs approval was because he
had to go over Pantaleons credit card history for the past twelve months.[43] It would certainly be unjust for us to
penalize AMEX for merely exercising its right to review Pantaleons credit history meticulously.

Finally, we said in Garciano v. Court of Appeals that the right to recover [moral damages] under Article
21 is based on equity, and he who comes to court to demand equity, must come with clean hands. Article 21
should be construed as granting the right to recover damages to injured persons who are not themselves at
fault. As will be discussed below, Pantaleon is not a blameless party in all this.

Pantaleons action was the proximate cause for his injury

Pantaleon mainly anchors his claim for moral and exemplary damages on the embarrassment and
humiliation that he felt when the European tour group had to wait for him and his wife for approximately 35
minutes, and eventually had to cancel the Amsterdam city tour. After thoroughly reviewing the records of this
case, we have come to the conclusion that Pantaleon is the proximate cause for this embarrassment and
humiliation.

As borne by the records, Pantaleon knew even before entering Coster that the tour group would have to
leave the store by 9:30 a.m. to have enough time to take the city tour of Amsterdam before they left the country.
After 9:30 a.m., Pantaleons son, who had boarded the bus ahead of his family, returned to the store to inform
his family that they were the only ones not on the bus and that the entire tour group was waiting for them.
Significantly, Pantaleon tried to cancel the sale at 9:40 a.m. because he did not want to cause any
inconvenience to the tour group. However, when Costers sale manager asked him to wait a few more minutes
for the credit card approval, he agreed, despite the knowledge that he had already caused a 10-minute delay and
that the city tour could not start without him.

In Nikko Hotel Manila Garden v. Reyes, we ruled that a person who knowingly and voluntarily exposes
himself to danger cannot claim damages for the resulting injury:

The doctrine of volenti non-fit injuria (to which a person assents is not esteemed in law as injury)
refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages
by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent
in doing so.

This doctrine, in our view, is wholly applicable to this case. Pantaleon himself testified that the most basic
rule when travelling in a tour group is that you must never be a cause of any delay because the schedule is very
strict. When Pantaleon made up his mind to push through with his purchase, he must have known that the group
would become annoyed and irritated with him. This was the natural, foreseeable consequence of his decision to
make them all wait.

We do not discount the fact that Pantaleon and his family did feel humiliated and embarrassed when they
had to wait for AMEX to approve the Coster purchase in Amsterdam. We have to acknowledge, however, that
Pantaleon was not a helpless victim in this scenario at any time, he could have cancelled the sale so that the
group could go on with the city tour. But he did not.

More importantly, AMEX did not violate any legal duty to Pantaleon under the circumstances under the
principle of damnum absque injuria, or damages without legal wrong, loss without injury. As we held in BPI
Express Card v. CA:
We do not dispute the findings of the lower court that private respondent suffered damages
as a result of the cancellation of his credit card. However, there is a material distinction between
damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm
which results from the injury; and damages are the recompense or compensation awarded for the
damage suffered. Thus, there can be damage without injury in those instances in which
the loss or harm was not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone, the law affords no remedy for
damages resulting from an act which does not amount to a legal injury or wrong. These situations
are often called damnum absque injuria.
In other words, in order that a plaintiff may maintain an action for the injuries of which he
complains, he must establish that such injuries resulted from a breach of duty which the defendant
owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person
causing it. The underlying basis for the award of tort damages is the premise that an
individual was injured in contemplation of law. Thus, there must first be a breach of some
duty and the imposition of liability for that breach before damages may be awarded; and the
breach of such duty should be the proximate cause of the injury.

Pantaleon is not entitled to damages

Because AMEX neither breached its contract with Pantaleon, nor acted with culpable delay or the willful
intent to cause harm, we find the award of moral damages to Pantaleon unwarranted.

Similarly, we find no basis to award exemplary damages. In contracts, exemplary damages can only be
awarded if a defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. The plaintiff
must also show that he is entitled to moral, temperate, or compensatory damages before the court may consider
the question of whether or not exemplary damages should be awarded.

As previously discussed, it took AMEX some time to approve Pantaleons purchase requests because it had
legitimate concerns on the amount being charged; no malicious intent was ever established here. In the absence
of any other damages, the award of exemplary damages clearly lacks legal basis.

Neither do we find any basis for the award of attorneys fees and costs of litigation. No premium should be
placed on the right to litigate and not every winning party is entitled to an automatic grant of attorney's fees. To
be entitled to attorneys fees and litigation costs, a party must show that he falls under one of the instances
enumerated in Article 2208 of the Civil Code. This, Pantaleon failed to do. Since we eliminated the award of moral
and exemplary damages, so must we delete the award for attorney's fees and litigation expenses.

Lastly, although we affirm the result of the CA decision, we do so for the reasons stated in this Resolution and
not for those found in the CA decision.

WHEREFORE, premises considered, we SET ASIDE our May 8, 2009 Decision and GRANT the present
motion for reconsideration. The Court of Appeals Decision dated August 18, 2006 is hereby AFFIRMED. No costs.
G.R. No. 184274 February 23, 2011

MARK SOLEDAD y CRISTOBAL, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

NACHURA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside
the Court of Appeals (CA) Decision1 dated June 18, 2008 and Resolution2 dated August 22, 2008 in CA-G.R. CR.
No. 30603. The assailed Decision affirmed with modification the September 27, 2006 decision 3 of the Regional
Trial Court (RTC), Branch 202, Las Piñas City, finding petitioner Mark C. Soledad guilty beyond reasonable doubt
of Violation of Section 9(e), Republic Act (R.A.) No. 8484, or the Access Devices Regulations Act of 1998; while
the assailed Resolution denied petitioner’s motion for reconsideration.

The facts of the case, as narrated by the CA, are as follows:

Sometime in June 2004, private complainant Henry C. Yu received a call on his mobile phone from a certain "Tess"
or "Juliet Villar" (later identified as Rochelle Bagaporo), a credit card agent, who offered a Citifinancing loan
assistance at a low interest rate. Enticed by the offer, private complainant invited Rochelle Bagaporo to go to his
office in Quezon City. While in his office, Rochelle Bagaporo indorsed private complainant to her immediate boss,
a certain "Arthur" [later identified as petitioner]. In their telephone conversation, [petitioner] told private
complainant to submit documents to a certain "Carlo" (later identified as Ronald Gobenchiong). Private
complainant submitted various documents, such as his Globe handyphone original platinum gold card,
identification cards and statements of accounts. Subsequently, private complainant followed up his loan status
but he failed to get in touch with either [petitioner] or Ronald Gobenchiong.

During the first week of August 2004, private complainant received his Globe handyphone statement of account
wherein he was charged for two (2) mobile phone numbers which were not his. Upon verification with the phone
company, private complainant learned that he had additional five (5) mobile numbers in his name, and the
application for said cellular phone lines bore the picture of [petitioner] and his forged signature. Private
complainant also checked with credit card companies and learned that his Citibank Credit Card database
information was altered and he had a credit card application with Metrobank Card Corporation (Metrobank).

Thereafter, private complainant and Metrobank’s junior assistant manager Jefferson Devilleres lodged a complaint
with the National Bureau of Investigation (NBI) which conducted an entrapment operation.

During the entrapment operation, NBI’s Special Investigator (SI) Salvador Arteche [Arteche], together with some
other NBI operatives, arrived in Las Piñas around 5:00 P.M. [Arteche] posed as the delivery boy of the Metrobank
credit card. Upon reaching the address written on the delivery receipt, [Arteche] asked for Henry Yu. [Petitioner]
responded that he was Henry Yu and presented to [Arteche] two (2) identification cards which bore the name and
signature of private complainant, while the picture showed the face of [petitioner]. [Petitioner] signed the delivery
receipt. Thereupon, [Arteche] introduced himself as an NBI operative and apprehended [petitioner]. [Arteche]
recovered from [petitioner] the two (2) identification cards he presented to [Arteche] earlier. 4

Petitioner was thus charged with Violation of Section 9(e), R.A. No. 8484 for "possessing a counterfeit access
device or access device fraudulently applied for." The accusatory portion of the Information reads:

That on or about the 13th day of August 2004, or prior thereto, in the City of Las Piñas, and within the jurisdiction
of this Honorable Court, the above-named accused, conspiring and confederating with certain Rochelle Bagaporo
a.k.a. Juliet Villar/Tess and a certain Ronald Gobenciong a.k.a. Carlo and all of them mutually helping and aiding
each other, did then and there willfully, unlawfully and feloniously defraud complainant HENRY YU by applying a
credit card, an access device defined under R.A. 8484, from METROBANK CARD CORPORATION, using the name
of complainant Henry C. Yu and his personal documents fraudulently obtained from him, and which credit card in
the name of Henry Yu was successfully issued and delivered to said accused using a fictitious identity and
addresses of Henry Yu, to the damage and prejudice of the real Henry Yu.

CONTRARY TO LAW.

Upon arraignment, petitioner pleaded "not guilty." Trial on the merits ensued. After the presentation of the
evidence for the prosecution, petitioner filed a Demurrer to Evidence, alleging that he was not in physical and
legal possession of the credit card presented and marked in evidence by the prosecution. In an Order dated May
2, 2006, the RTC denied the Demurrer to Evidence as it preferred to rule on the merits of the case.6

On September 27, 2006, the RTC rendered a decision finding petitioner guilty as charged, the dispositive portion
of which reads:

In the light of the foregoing, the Court finds accused Mark Soledad y Cristobal a.k.a. "Henry Yu,"
"Arthur" GUILTYbeyond reasonable doubt of violation of Section 9(e), Republic Act 8484 (Access Device
Regulation Act of 1998). Accordingly, pursuant to Section 10 of Republic Act 8484 and applying the Indeterminate
Sentence Law, said accused is hereby sentenced to suffer an imprisonment penalty of six (6) years of prision
correccional, as minimum, to not more than ten (10) years of prision mayor, as maximum. Further, accused is
also ordered to pay a fine of Ten Thousand Pesos (₱10,000.00) for the offense committed.

SO ORDERED.

On appeal, the CA affirmed petitioner’s conviction, but modified the penalty imposed by the RTC by deleting the
terms prision correccional and prision mayor.

Hence, this petition raising the following issues:

(1) Whether or not the Information is valid;

(2) Whether or not the Information charges an offense, or the offense petitioner was found guilty of;

(3) Whether or not petitioner was sufficiently informed of the nature of the accusations against him;

(4) Whether or not petitioner was legally in "possession" of the credit card subject of the case. 8

The petition is without merit.

Petitioner was charged with Violation of R.A. No. 8484, specifically Section 9(e), which reads as follows:

Section 9. Prohibited Acts. – The following acts shall constitute access device fraud and are hereby declared to be
unlawful:

xxxx

(e) possessing one or more counterfeit access devices or access devices fraudulently applied for.

Petitioner assails the validity of the Information and claims that he was not informed of the accusation against
him. He explains that though he was charged with "possession of an access device fraudulently applied for," the
act of "possession," which is the gravamen of the offense, was not alleged in the Information.

We do not agree.

Section 6, Rule 110 of the Rules of Criminal Procedure lays down the guidelines in determining the sufficiency of
a complaint or information. It states:

SEC. 6. Sufficiency of complaint or information. – A complaint or information is sufficient if it states the name of
the accused; the designation of the offense given by the statute; the acts or omissions complained of as
constituting the offense; the name of the offended party; the approximate date of the commission of the offense;
and the place where the offense was committed.

In the Information filed before the RTC, it was clearly stated that the accused is petitioner "Mark Soledad y
Cristobal a.k.a. Henry Yu/Arthur." It was also specified in the preamble of the Information that he was being
charged with Violation of R.A. No. 8484, Section 9(e) for possessing a counterfeit access device or access device
fraudulently applied for. In the accusatory portion thereof, the acts constituting the offense were clearly narrated
in that "[petitioner], together with other persons[,] willfully, unlawfully and feloniously defrauded private
complainant by applying [for] a credit card, an access device defined under R.A. [No.] 8484, from Metrobank
Card Corporation, using the name of complainant Henry C. Yu and his personal documents fraudulently obtained
from him, and which credit card in the name of Henry Yu was successfully issued, and delivered to said accused
using a fictitious identity and addresses of Henry Yu, to the damage and prejudice of the real Henry Yu." Moreover,
it was identified that the offended party was private complainant Henry Yu and the crime was committed on or
about the 13th day of August 2004 in the City of Las Piñas. Undoubtedly, the Information contained all the
necessary details of the offense committed, sufficient to apprise petitioner of the nature and cause of the
accusation against him. As aptly argued by respondent People of the Philippines, through the Office of the Solicitor
General, although the word "possession" was not used in the accusatory portion of the Information, the word
"possessing" appeared in its preamble or the first paragraph thereof. Thus, contrary to petitioner’s contention, he
was apprised that he was being charged with violation of R.A. No. 8484, specifically section 9(e) thereof, for
possession of the credit card fraudulently applied for.

The Court’s discussion in People v. Villanueva9 on the relationship between the preamble and the accusatory
portion of the Information is noteworthy, and we quote:

The preamble or opening paragraph should not be treated as a mere aggroupment of descriptive words and
phrases. It is as much an essential part [of] the Information as the accusatory paragraph itself. The preamble in
fact complements the accusatory paragraph which draws its strength from the preamble. It lays down the
predicate for the charge in general terms; while the accusatory portion only provides the necessary details. The
preamble and the accusatory paragraph, together, form a complete whole that gives sense and meaning to the
indictment. x x x.

xxxx

Moreover, the opening paragraph bears the operative word "accuses," which sets in motion the constitutional
process of notification, and formally makes the person being charged with the commission of the offense an
accused. Verily, without the opening paragraph, the accusatory portion would be nothing but a useless and
miserably incomplete narration of facts, and the entire Information would be a functionally sterile charge sheet;
thus making it impossible for the state to prove its case.

The Information sheet must be considered, not by sections or parts, but as one whole document serving one
purpose, i.e., to inform the accused why the full panoply of state authority is being marshaled against him. Our
task is not to determine whether allegations in an indictment could have been more artfully and exactly written,
but solely to ensure that the constitutional requirement of notice has been fulfilled x x x. 10lawph!l

Besides, even if the word "possession" was not repeated in the accusatory portion of the Information, the acts
constituting it were clearly described in the statement "[that the] credit card in the name of Henry Yu was
successfully issued, and delivered to said accused using a fictitious identity and addresses of Henry Yu, to the
damage and prejudice of the real Henry Yu." Without a doubt, petitioner was given the necessary data as to why
he was being prosecuted.

Now on the sufficiency of evidence leading to his conviction.

Petitioner avers that he was never in possession of the subject credit card because he was arrested immediately
after signing the acknowledgement receipt. Thus, he did not yet know the contents of the envelope delivered and
had no control over the subject credit card.11

Again, we find no value in petitioner’s argument.

The trial court convicted petitioner of possession of the credit card fraudulently applied for, penalized by R.A. No.
8484. The law, however, does not define the word "possession." Thus, we use the term as defined in Article 523
of the Civil Code, that is, "possession is the holding of a thing or the enjoyment of a right." The acquisition of
possession involves two elements: the corpus or the material holding of the thing, and the animus possidendi or
the intent to possess it.12 Animus possidendi is a state of mind, the presence or determination of which is largely
dependent on attendant events in each case. It may be inferred from the prior or contemporaneous acts of the
accused, as well as the surrounding circumstances.13

In this case, prior to the commission of the crime, petitioner fraudulently obtained from private complainant
various documents showing the latter’s identity. He, thereafter, obtained cellular phones using private
complainant’s identity. Undaunted, he fraudulently applied for a credit card under the name and personal
circumstances of private complainant. Upon the delivery of the credit card applied for, the "messenger" (an NBI
agent) required two valid identification cards. Petitioner thus showed two identification cards with his picture on
them, but bearing the name and forged signature of private complainant. As evidence of the receipt of the
envelope delivered, petitioner signed the acknowledgment receipt shown by the messenger, indicating therein
that the content of the envelope was the Metrobank credit card.

Petitioner materially held the envelope containing the credit card with the intent to possess. Contrary to
petitioner’s contention that the credit card never came into his possession because it was only delivered to him,
the above narration shows that he, in fact, did an active part in acquiring possession by presenting the
identification cards purportedly showing his identity as Henry Yu. Certainly, he had the intention to possess the
same. Had he not actively participated, the envelope would not have been given to him. Moreover, his signature
on the acknowledgment receipt indicates that there was delivery and that possession was transferred to him as
the recipient. Undoubtedly, petitioner knew that the envelope contained the Metrobank credit card, as clearly
indicated in the acknowledgment receipt, coupled with the fact that he applied for it using the identity of private
complainant.

Lastly, we find no reason to alter the penalty imposed by the RTC as modified by the CA. Section 10 of R.A. No.
8484 prescribes the penalty of imprisonment for not less than six (6) years and not more than ten (10) years,
and a fine of ₱10,000.00 or twice the value of the access device obtained, whichever is greater. Thus, the CA
aptly affirmed the imposition of the indeterminate penalty of six years to not more than ten years imprisonment,
and a fine of ₱10,000.00.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Decision dated
June 18, 2008 and Resolution dated August 22, 2008 in CA-G.R. CR. No. 30603 are AFFIRMED.
G.R. No. 210266

ANTHONY DE SILVA CRUZ, Petitioner

vs.
PEOPLE OF THE PHILIPPINES, Respondent

DECISION

LEONEN, J.:

The possession and use of a counterfeit credit card is considered access device fraud and is punishable by law.
To successfully sustain a conviction for possession and use of a counterfeit access device, the prosecution must
present not only the access device but also any evidence that proves that the access device is counterfeit.

This resolves a Petition 1 for Review on Certiorari assailing the Decision2 dated July 4, 2013 and Resolution3 dated
November 26, 2013 of the Court of Appeals, which affirmed the conviction of petitioner Anthony De Silva Cruz
(Cruz) by the Regional Trial Court4 for violation of Republic Act No. 8484, otherwise known as the Access Devices
Regulation Act of 1998.

Cruz was charged with violation of Section 9(a) and (e) of Republic Act No. 8484, which provide:

SECTION 9. Prohibited Acts. - The following acts shall constitute access device fraud and are hereby declared to
be unlawful:

(a) producing, using, trafficking in one or more counterfeit access devices;

(e) possessing one or more counterfeit access devices or access devices fraudulently applied
for[.]

The Informations against him read:

Under Criminal Case No. 06-0479

That on or about the l 8th day of April 2006, in the City of Parafiaque, Philippines and within the jurisdiction of
this Honorable Court, the above-named accused, did then and there willfully, unlawfully and feloniously have in
his possession and control a counterfeit access device (Citibank Visa Card with No. 4539 7207 8677 7008) in
violation of the aforecited law.

CONTRARY TO LAW.

Under Criminal Case No. 06-0480 That on or about the 18th day of April 2006, in the City of Parafiaque, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, did then and there willfully,
unlawfully and feloniously use a counterfeit Citibank Visa Card with No. 4539 7207 8677 7008 an access device,
in buying from complainant Duty Free Philippines herein represented by Redentor M. Quejada, one (1) pair of
Ferragamo shoes worth US$363.00, to the damage and prejudice of the complainant in the aforementioned
amount of US$363.00 or ₱18,876.00 more or less.

CONTRARY TO LAW.

Under Criminal Case No. 06-0481

That on or about the 18th day of April 2006, in the City of Parafiaque, Philippines and within the jurisdiction of
this Honorable Court, the above-named accused, did then and there willfully, unlawfully and feloniously use a
counterfeit Citibank Visa Card with No. 4539 7207 8677 7008 an access device, in buying from complainant Duty
Free Philippines herein represented by Redentor M. Quejada, two (2) bottles of perfume worth US$96.00, to the
damage and prejudice of the complainant in the aforementioned amount of US$96.00 or ₱4,992.00 more or less.

CONTRARY TO LAW.5

Cruz was arraigned on October 17, 2006, where he pleaded not guilty for each charge. Trial on the merits ensued.

According to the prosecution, on April 18, 2006, at around 7:30 p.m., Cruz allegedly tried to purchase two (2)
bottles of Calvin Klein perfume worth US$96.00 from Duty Free Philippines Fiesta Mall. Danilo Wong (Wong), the
cashier at the Perfume Section, testified that Cruz paid for the purchase using a Citibank Visa credit card. 8 The
transaction was approved, although Wong doubted the validity of the credit card since the number at the back
was not aligned.9

At around 8:00 p.m., Cruz allegedly tried to purchase a pair of Ferragamo shoes worth US$363.00. 10 Ana
Margarita Lim (Lim), the cashier on duty, facilitated the sales transaction. 11 Cruz paid for the purchase using a
Citibank Visa credit card bearing the name "Gerry Santos," with credit card number 4539 7207 8677
7008. 12 When Lim asked for Cruz's Duty Free shopping card, Cruz presented a shopping card with the name of
"Rodolfo Garcia."13 Lim asked for another identification card, and Cruz gave her a driver's license bearing the
name "Gerry Santos."14

Lim proceeded to the mall's Electronic Section to swipe the credit card for approval. 15 The card was approved,
but she noticed that the last four (4) digits of the card were not properly embossed and its validity date started
in November 2006.16 She called Citibank to verify the credit card. 17

Upon verification, Citibank informed Lim that the credit card was counterfeit and that the real Gerry Santos was
the Head of Citibank's Fraud Risk Management Division.18 Lim was advised to transfer the matter to the Security
Department. 19

Redentor Quejada, Security Supervisor of Duty Free Philippines, testified that he and two (2) other guards held
Cruz and his companion, Rodolfo De Silva Cruz, at the security office until the representative from Citibank arrived.
At around 9:00 p.m. to 10:00 p.m., Gerardo T. Santos, Head of Citibank's Fraud Risk Management Division,
arrived with members of the Philippine National Police - Criminal Investigation Detective Group, together with a
certain Atty. Abad Santos, who was allegedly Cruz's lawyer. 20 Before Redentor Quejada could turn Cruz over to
the police, Cruz tried to escape with the help of Atty. Abad Santos. The security officers, however, were able to
close the mall's main gate, which prevented their escape.21

Cruz and Rodolfo De Silva Cruz were turned over to the Criminal Investigation Detective Group and brought to
Camp Crame for questioning.22 Citibank Visa credit card number 4539 7207 8677 7008 was also turned over to
the Criminal Investigation Detective Group.23

Gerardo T. Santos (Santos) testified that he first heard of Cruz's name in May 2004. 24 Cruz and his wife Aileen
were then managing Antonely's Fabric Warehouse and were involved in incidents related to credit card fraud.
Santos did not file a case against them for lack of basis. He came across Cruz's name again in 2005, with regard
to a fraudulent transaction with a Thai restaurant in Shoemart Megamall. 25 He also testified that the credit card
number was validly issued to a certain Jessamine Bongat, and that the counterfeit credit card had been previously
used on several fraudulent occasions. 26

After the prosecution formally offered their evidence, Cruz filed a Demurrer to Evidence asserting that the credit
card was inadmissible since it was presented and offered by the prosecution in violation of A.M. No. 03-1- 09-
SC.27

On August 6, 2009, Branch 274 of the Regional Trial Court of Parañaque City denied the Demurrer to Evidence
and stated that the credit card receipts were properly identified by the witnesses.28 The trial court also stated that
the alleged counterfeit credit card was offered in evidence by the prosecution. 29

Despite notice, Cruz and his counsel did not appear during the scheduled hearings for the presentation of his
defense. Later, Cruz manifested to the trial court that he was waiving his right to present evidence. 30

On May 5, 2010, the trial court rendered its Judgment 31 finding Cruz guilty beyond reasonable doubt of violation
of Section 9(a) and (e) of Republic Act No. 8484 in Criminal Case Nos. 06-04 79 and 06-0480, when he used a
counterfeit access device to purchase a pair of shoes worth US$363.00. However, it acquitted Cruz in Criminal
Case No. 06-0481 upon finding that the prosecution failed to prove his guilt beyond reasonable doubt of using a
counterfeit access device to purchase two (2) bottles of perfume worth US$96.00.32 The dispositive portion of the
Judgment reads:

WHEREFORE, all the foregoing considered, the Court finds the accused ANTHONY DE SILVA CRUZ as follows:

(1) Under Criminal Case No. 06-0479, GUILTY beyond reasonable doubt of the offense of Violation
of Section 9, par. (a) of Republic Act No. 8484, as stated in the Information, and accordingly
hereby penalizes the said accused to suffer indeterminate sentence of fine of Ten Thousand Pesos
(Pl0,000.00) and imprisonment of six (6) years prision correccional as minimum, to ten (10) years
prision mayor as maximum.

(2) Under Criminal Case No. 06-0480, GUILTY beyond reasonable doubt of the offense of Violation
of Section 9, par. (a) of Republic Act No. 8484 as stated in the Information, and accordingly hereby
sentences the said accused to suffer indeterminate sentence of fine of Ten Thousand Pesos (Pl
0,000.00) and imprisonment of ten (10) years prision mayor as minimum to twelve (12) years
prision mayor as maximum.

(3) Under Criminal Case No. 06-0481, NOT GUILTY of the offense of Violation of Section 9, par.
(a) of Republic Act No. 8484 as charged in the Information, and accordingly hereby acquits the
said accused therefrom.

SO ORDERED.33

Aggrieved, Cruz appealed to the Court of Appeals. On July 4, 2013, the Court of Appeals rendered the Decision34
denying the appeal and upholding Cruz's conviction.
According to the Court of Appeals, the prosecution was able to establish that Cruz had in his possession a
counterfeit access device. 35 It also held that A.M. No. 03-1-09-SC does not absolutely preclude the admission of
evidence that has not been pre-marked during pre-trial since courts may, in its discretion and "for good cause
shown," still admit the evidence.36

However, the Court of Appeals modified the penalties to delete the words ''prision correccional" and ''prision
mayor" as the law itself 37 provides the penalties to be imposed.38 The dispositive portion of the Decision reads:

WHEREFORE, the appeal is DISMISSED. The Judgment of the Regional Trial Court of Parañaque City in Criminal
Case Nos. 06-0479 & 06-0480 are AFFIRMED with MODIFICATIONS.

In Criminal Case Nos. 06-0479, accused-appellant ANTHONY DE SILVA CRUZ is found guilty beyond reasonable
doubt of violation of Section 9(e) ofR.A. No. 8484 and is sentenced to a prison term of six (6) years, as minimum,
to ten (10) years, as maximum, and to pay a fine of Ten Thousand Pesos (Pl 0,000.00).

In Criminal Case No. 06-0480, accused-appellant ANTHONY DE SILVA CRUZ is found guilty beyond reasonable
doubt of violation of Section 9(a) of the R.A. No. 8484 and is sentenced to a prison term of ten (10) years, as
minimum, to twelve (12) years, as maximum, and to pay a fine ofUS$726.00 or ₱37,752.00.

SO ORDERED.39 (Emphasis in the original)

Cruz moved for reconsideration, but the Motion was denied in the Resolution40 dated November 26, 2013.

Hence, petitioner Anthony De Silva Cruz filed before this Court a Petition for Review on Certiorari.41

Petitioner argues that according to A.M. No. 03-1-09-SC, the corpus delicti or the alleged counterfeit credit card
is inadmissible since it was not marked and identified during pre-trial.42 He alleges that the testimonies of the
prosecution's witnesses were inconsistent as to.the identification of the credit card and its eventual turnover to
the police.43 Petitioner asserts that the trial court and the Court of Appeals disregarded the constitutional
presumption of innocence by making an inference of guilt based on his silence during trial. 44

The Office of the Solicitor General, on the other hand, maintains that the counterfeit credit card is admissible as
evidence since A.M. No. 03-1-09- SC allows the trial court to admit the evidence, if, in its discretion, there was
"good cause shown" for its admission. 45 It also notes that there was no inconsistency between Lim' s and Wong's
testimonies, since they were testifying on two different situations they witnessed.46

The Office of the Solicitor General further argues that "the unexplained failure of the accused to testify ... gives
rise to an inference that he did not want to testify because he did not want to betray himself."47 It points out that
petitioner's attempt to flee the ·premises is an implied admission of guilt. 48

While the case was pending before this Court, petitioner's counsel withdrew 49 and another counsel entered an
appearance on his behalf. A Motion for Leave of Court to File Supplemental Petition for Review was filed together
with the Entry of Appearance of his new counsel. 50

Aside from reiterating that the prosecution witnesses' testimonies were inconsistent with each other, 51 petitioner
insists that his former counsel negligently defended his cause by failing to present evidence on his behalf and
failing to cross-examine the prosecution's witnesses.52 Petitioner adds that Redentor Quejada was not duly
authorized by Duty Free Philippines to file the complaint on its behalf based on an invalid Special Power of
Attorney. 53 Thus, he prays that the July 4, 2013 Decision and November 26, 2013 Resolution be reversed, or in
the alternative, the case be remanded to the trial court for the presentation of his evidence. 54

The issues for resolution are:

First, whether the prosecution was able to prove beyond reasonable doubt that petitioner was guilty of violating
Section 9(a) and (e) of Republic Act No. 8484. Corollary to this is whether the counterfeit access device can still
be presented in trial despite not having been presented and marked during pre-trial; and

Second, whether the negligence of petitioner's former counsel binds petitioner.

Republic Act No. 8484, otherwise known as the Access Devices Regulation Act of 1998, defines an access device
as:

any card, plate, code, account number, electronic serial number, personal identification number, or other
telecommunications service, equipment, or instrumental identifier, or other means of account access that can be
used to obtain money, good, services, or any other thing of value or to initiate a transfer of funds (other than a
transfer originated solely by paper instrurnent).55
Since a credit card is "any card, plate, coupon book, or other credit device existing for the purpose of obtaining
money, goods, property, labor or services or anything of value on credit,"56 it is considered an access device.

Section 9(a) and (e) make the possession and use of a counterfeit access device as "access device fraud" that is
punishable by law:

SECTION 9. Prohibited Acts. - The following acts shall constitute access device fraud and are hereby declared to
be unlawful:

(a) producing, using, trafficking in one or more counterfeit access devices;

(e) possessing one or more counterfeit access devices or access devices fraudulently applied for[.]

A counterfeit access device is "any access device that is counterfeit, fictitious, altered, or forged, or an identifiable
component of an access device or counterfeit access device."57 Under Section 9(a) and (e) of Republic Act No.
8484, the possession and use of an access device is not illegal. Rather, what is prohibited is the possession and
use of a counterfeit access device. Therefore, the corpus delicti of the crime is not merely the access device,
but also any evidence that proves that it is counterfeit.

Petitioner was found in possession of Citibank Visa credit card number 4539 7207 8677 7008, which bore the
name "Gerry Santos."58 He used the same credit card to purchase Ferragamo shoes worth US$363.00 at Duty
Free Fiesta Mall. 59 Citibank Visa credit card number 4539 7207 8677 7008 was later proven to be a counterfeit
access device. 60

Possession of a counterfeit access device is punishable by imprisonment of not less than six (6) years and not
more than 10 years and a fine of ₱l0,000.00 or twice the value obtained by the offense, whichever is higher. On
the other hand, use of a counterfeit access device is punishable by imprisonment of not less 10 years but not
more than 12 years and a fine of ₱l0,000.00 or twice the value obtained by the offense, whichever is higher:

SECTION 10. Penalties. - Any person committing any of the acts constituting access device fraud enumerated in
the immediately preceding section shall be punished with:

(a) a fine of Ten thousand pesos (₱l0,000.00) or twice the value obtained by the offense, whichever is greater
and imprisonment for not less than six (6) years and not more than ten (10) years, in the case of an offense
under Section 9 (b )-(e), and (g)-(p) which does not occur after a conviction for another offense under Section
9;

(b) a fine of Ten thousand pesos (₱l0,000.00) or twice the value obtained by the offense, and imprisonment for
not less than ten (10) years and for not more than twelve (12) years, in the case of an offense under Section 9
(a), and (f) of the foregoing section, which does not occur after a conviction for another offense under Section
9[.]61

Petitioner, having been found guilty beyond reasonable doubt, was sentenced to suffer the penalty of
imprisonment of 10 years as minimum to 12 years as maximum and a fine of US$726.00 for violation of Section
9(a) of Republic Act No. 8484. He was also sentenced to suffer the penalty of imprisonment of six (6) years as
minimum to 10 years as maximum and a fine ofPl0,000.00 for violation of Section 9(e) of Republic Act No. 8484.62

II

Petitioner argues that according to A.M. No. 03-1-09-SC,63 the alleged counterfeit credit card should not have
been admitted as evidence because it was not pre-marked during pre-trial. 64

A.M. No. 03-1-09-SC, sec. I(A)(2) provides that:

2. The parties shall submit, at least three (3) days before the pre-trial, pre-trial briefs containing the following:

d. The documents or exhibits to be presented, stating the purpose thereof. (No evidence shall be allowed to be
presented and offered during the trial in support of a party's evidence-in-chief other than those that had been
earlier identified and pre-marked during the pre-trial, except if allowed by the court for good cause shown)[.]

The rule is that no evidence shall be allowed during trial if it was not identified and pre-marked during trial. This
provision, however, allows for an exception: when allowed by the court for good cause shown. There is no hard
and fast rule to determine what may constitute "good cause," though this Court has previously defined it as any
substantial reason "that affords a legal excuse."65

The trial court retains its discretion to allow any evidence to be presented at trial even if not previously marked
during pre-trial. Here, the trial court allowed the presentation of the counterfeit credit card at trial due to the
prosecution's explanation that during pre-trial, the counterfeit credit card was still in the Criminal Investigation
and Detective Group's custody:
 Court: Additional direct?

Pros. Rodriguez Yes. Additional direct. For identification only of the credit card. The
credit card is already here.

Atty. De Guia: Your Honor, we would like to put our continuing objection to the
presentation of the credit card because it was not presented during
pre-trial.

Pros. Rodriguez: This credit card, Your Honor, is part of Exhibit "F," Your Honor.

Atty. De Guia: In fact, Your Honor, if I am not mistaken, this is supposed to be the
cross-examination already of the . . .

Pros. Rodriguez: We made a reservation considering that this document was not
available during pre-trial, Your Honor.

Atty. De Guia: Precisely, Your Honor, that's our objection.

Pros. Rodriguez: But it forms part of Exhibit· F, Your Honor, the Certification that this
card is not a genuine card of the Citibank.

Atty. De Guia: But then precisely, Your Honor, the prosecutor is alleging that this
credit card is actually the document, their failure to present them
during pretrial and mark properly, this is the consequence of their
omission, Your Honor, with due respect.

Pros. Rodriguez: During the pre-trial, this card was not available at that time. At that
time this card was not yet available, it was in the custody of the
police. The police never turned over this card to us.

Atty. De Guia: That's precisely the reason, Your Honor, that the prosecution had
ample time to present their case, make their case before filing this
complaint, this information. And their failure should be taken against
them, Your Honor. The rule on pre-trial order is mandatory, Your
Honor. Any other evidence not presented in the pre-trial shall be
excluded.

Pros. Rodriguez: The defense is very desperate, Your Honor, on technicalities, but then
this card forms part of Exhibit F where it is specifically mentioned.

Court: It should form part of exhibit?

Pros. Rodriguez: Exhibit F, Your Honor, the Certification that this

card is not the ...

Court: The certification of Citibank?

Pros. Rodriguez: Yes, that this card is not a genuine card. So this is F-1.

Court: How come that it will be certification? That card?

Pros. Rodriguez: No, that this card is not the - because this is a ...

Court: What is the certification of the Citibank Exhibit F? Does it mention

that that card is part?

Pros. Rodriguez: Yes. Your Honor. At this point, exhibiting to this Honorable Court
Exhibit "F" reads that, "Citibank Visa Card with embossed account
number 4539- 7207-8677-7008," which is the physical evidence in
this case presented to this Court, is a counterfeit, Your Honor. So, this
is only part of Exhibit F

Court: Okay, the Court will allow that.

Atty. De Guia: We will just gut our continuing objection on record, Your Honor. 0
(Emphasis supplied)

The prosecution was able to present and mark during pre-trial Citibank's certification that the access device used
was counterfeit. It is this certification that makes the possession and use of the access device illegal. Therefore,
the trial court determined that the access device could still be presented at trial since it merely formed part of an·
exhibit that had already been presented and marked during pre-trial.
 III

Petitioner points out the alleged inconsistencies in the testimonies of Ana Margarita Lim and Danilo Wong.67 Wong
testified that the credit card presented in trial was not the same credit card that petitioner used in purchasing the
Calvin Klein perfumes worth US$96.00.68

The determination of the credibility of witnesses is a question of fact that should not be reviewed by this Court in
a petition for review on certiorari under Rule 45 of the Rules of Court. 69 There are exceptions to this
rule; 70 however, none of those exceptions are present here. Even if we were to review the witnesses' testimonies,
petitioner's argument would still be unmeritorious.

Two (2) transactions took place on the night of April 18, 2006: the purchase of perfumes at Counter 1571 and the
purchase of shoes at Counter 12.72 Lim, the cashier for Counter 12, and Wong, the cashier for Counter 15, were
called to testify on two (2) different transactions. There can be no inconsistency between two witnesses testifying
on two different occurrences.

Petitioner also points out other inconsistencies in the prosecution witnesses' testimonies, such as whom among
Lim and Redentor Quejada turned over the credit card to the police; 73 whether petitioner introduced
himself;74 and why Lim did not bother to make a copy of petitioner's driver's license.75

These alleged inconsistencies are minor and do not detract from the conclusion that petitioner used a counterfeit
access device in the purchase of goods.

In any case, the trial court found these witnesses credible. Its assessment on the credibility of the witnesses is
entitled to great weight and respect, especially if it is affirmed by the Court of Appeals. 76

"[T]he flight of an accused discloses a guilty conscience."77 Petitioner does not deny that he tried to escape from
Duty Free Fiesta Mall when the police arrived. Taken together with the prosecution's evidence, it is enough to
convince this Court that petitioner is guilty beyond reasonable doubt of possession and use of a counterfeit access
device.

IV

Petitioner, now grasping at straws, argues that his previous counsel, Atty. Edwin Michael P. Musico (Atty. Musico),
negligently defended his cause.78

The rule is that negligence of a counsel binds the client except: when counsel exhibits reckless or gross negligence
that deprives the client of due process; when the outright application of the rule results in the deprivation of
liberty and property through a technicality; or when it serves the interests of justice.79

Petitioner alleges that Atty. Musico negligently failed to attend scheduled hearings before the trial court, conduct
cross-examination of the witnesses, and present evidence on his behalf.80

Records, however, show that petitioner's counsel was not prevented from objecting to the presentation of the
counterfeit credit card during trial, which he repeatedly did and even offered continuing objection. 81 Atty. Musi
co was also able to cross-examine Lim and Redentor Quejada, 82 the two witnesses petitioner claimed had
inconsistent testimonies. Atty. Musico even filed a Demurrer to Evidence after the prosecution made its formal
offer.83

Although there were, indeed, instances where Atty. Musico failed to attend the scheduled hearings, 84 petitioner
was never deprived of due process. The Orders 85 dated February 8, 2010 of the trial court shows it was
petitioner's decision to forego the presentation of evidence on his behalf:

In today's hearing, the accused through counsel manifested that despite the resolution of the Demurrer to
Evidence, the defense will not be presenting evidence. In view whereof [sic], the defense having considered as
waiving the right to present evidence, this case is now submitted for decision.86

The burden of proof was on the prosecution. Petitioner did not even need to present evidence. To successfully
sustain a conviction, the prosecution must rely on the strength of its evidence, and not on the weakness of the
defense.87 The prosecution's evidence in this case was enough to overcome the presumption of innocence.1âwphi1

We will no longer discuss petitioner's allegation that Redentor Quejada was not authorized by Duty Free Philippines
to file the criminal complaint since petitioner failed to attach any proof to substantiate this allegation.

WHEREFORE, the Petition is DENIED for lack of merit. The Decision dated July 4, 2013 and Resolution dated
November 26, 2013 of the Court of Appeals in CA-G.R. CR. No. 33756 are AFFIRMED.

The Motion for Leave of Court to File Supplemental Petition for Review on Certiorari dated November 30, 2015
is DENIED in view of the denial of the Petition.
G.R. No. 170217

HPS SOFTWARE AND COMMUNICATION CORPORATION and HYMAN YAP, Petitioners,

vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT), JOSE JORGE E. CORPUZ, in his capacity as the Chief
of the PNP-Special Task Force Group-Visayas, PHILIP YAP, FATIMA CIMAFRANCA, and EASTERN
TELECOMMUNICATIONS PHILIPPINES, INC., Respondents.

X----------------X

G.R. No. 170694 December 10, 2012

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner,

vs.
HPS SOFTWARE AND COMMUNICATION CORPORATION, including its Incorporators, Directors, Officers: PHILIP
YAP, STANLEY T. YAP, ELAINE JOY T. YAP, JULIE Y. SY, HYMAN A. YAP and OTHER PERSONS UNDER THEIR
EMPLOY, JOHN DOE AND JANE DOE, IN THE PREMISES LOCATED AT HPS BUILDING, PLARIDEL ST., BRGY.
ALANG-ALANG, MANDAUE CITY, CEBU, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

Before the Court are two consolidated petitions for review on certiorari under Rule 45 of the Rules of Court each seeking to
annul and set aside a ruling of the Court of Appeals concerning the May 23, 2001 Joint Order1 issued by the Regional Trial Court
of Mandaue City, Branch 55. In G.R. No. 170217, petitioners HPS Software and Communication Corporation and Hyman Yap
(HPS Corporation, et al.) seek to nullify the March 26, 2004 Decision2as well as the September 27, 2005 Resolution3 of the
former Fourth (4th) Division of the Court of Appeals in CA-G.R. SP No. 65682, entitled "Philippine Long Distance Telephone
Company v. Hon. Judge Ulric Cañete, in his capacity as the Presiding Judge of the Regional Trial Court, Branch 55, Mandaue
City, HPS Software and Communications Corporation; its Officers and/or Directors: Philip Yap, Hyman Yap, Fatima Cimafranca;
Eastern Telecommunications Phils., Inc., and Jose Jorge E. Corpuz, in his capacity as the Chief of the PNP - Special Task Force
Group- Visayas." The March 26, 2004 Decision modified the May 23, 2001 Joint Order of the trial court by setting aside the
portion directing the immediate return of the seized items to HPS Corporation and, as a consequence, directing the Philippine
National Police (PNP) - Special Task Force Group –Visayas to retrieve possession and take custody of all the seized items
pending the final disposition of the appeal filed by Philippine Long Distance Telephone Company (PLDT) on the said May 23,
2001 Joint Order. The September 27, 2005 Resolution denied for lack of merit HPS Corporation, et al.’s subsequent Motion for
Reconsideration. On the other hand, in G.R. No. 170694, petitioner PLDT seeks to set aside the April 8, 2005 Decision4 as well
as the December 7, 2005 Resolution5 of the former Eighteenth Division of the Court of Appeals in CA-G.R. CV No. 75838,
entitled "People of the Philippines, Philippine Long Distance Telephone Company v. HPS Software and Communication
Corporation, its Incorporators, Directors, Officers: Philip Yap, Stanley T. Yap, Elaine Joy T. Yap, Julie Y. Sy, Hyman A. Yap and
Other Persons Under Their Employ, John Doe and Jane Doe, in the premises located at HPS Building, Plaridel St., Brgy. Alang-
Alang, Mandaue City, Cebu." The April 8, 2005 Decision affirmed the May 23, 2001 Joint Order of the trial court while the
December 7, 2005 Resolution denied for lack of merit PLDT’s subsequent Motion for Reconsideration.

The undisputed thread of facts binding these consolidated cases, as summarized in the assailed May 23, 2001 Joint Order,
follows:

[O]n October 20, 2000, the complainant PAOCTF filed with this Honorable Court two applications for the issuance of search
warrant for Violation of Article 308 of the Revised Penal Code for Theft of Telephone Services and for Violation of P.D. 401 for
unauthorized installation of telephone communication equipments following the complaint of the Philippine Long Distance
Telephone Company or PLDT that they were able to monitor the use of the respondents in their premises of Mabuhay card and
equipments capable of receiving and transmitting calls from the USA to the Philippines without these calls passing through the
facilities of PLDT.

Complainant’s witnesses Richard Dira and Reuben Hinagdanan testified under oath that Respondents are engaged in the
business of International [S]imple Resale or unauthorized sale of international long distance calls. They explained that
International Simple Resale (ISR) is an alternative call pattern employed by communication provider outside of the country.
This is a method of routing and completing international long distance call using pre-paid card which respondents are selling
in the States. These calls are made through access number and by passes the PLDT International Gate Way Facilities and by
passes the monitoring system, thus making the international long distance calls appear as local calls, to the damage and
prejudice of PLDT which is deprived of revenues as a result thereof.

Complainant’s witnesses Richard Dira and Reuben Hinagdanan testified that they found out that respondents are engaged in
the business of International Simple Resale on September 13, 2000 when they conducted a test call using Mabuhay Card. They
followed the dialing instructions found at the back of the card and dialed "00" and the access code number 18008595845 of
the said Mabuhay Card. They were then prompted by a voice to enter the PIN code to validate and after entering the PIN code
number 332 1479224, they were again prompted to dial the country code of the Philippines 011-6332 and then dialed telephone
number 2563066. Although the test calls were incoming international calls from the United States, they discovered in the
course of their test calls that PLDT telephone lines/numbers were identified as the calling party, specifically 032-3449294 and
032-3449280. They testified that the test calls passing through the Mabuhay Card were being reflected as local calls only and
not overseas calls. Upon verification, they discovered that the lines were subscribed by Philip Yap whose address is HPS
Software Communication Corporation at Plaridel St., Alang-alang, Mandaue City. They also testified that the lines subscribed
by Philip Yap were transferred to HPS Software and Communications Corporation of the same address. They further testified
that the respondents committed these crimes by installing telecommunication equipments like multiplexers, lines, cables,
computers and other switching equipments in the HPS Building and connected these equipments with PLDT telephone lines
which coursed the calls through international privatized lines where the call is unmonitored and coursed through the switch
equipments in Cebu particularly in Philip Yap’s line and distributed to the subscribers in Cebu.
Satisfied with the affidavits and sworn testimony of the complainant’s witnesses that they were able to trace the long distance
calls that they made on September 13, 2000 from the record of these calls in the PLDT telephone numbers 032 3449280 and
032 3449294 of Philip Yap and/or later on transferred to HPS Software and Communication Corporation using the said Mabuhay
Card in conducting said test calls, and that they saw the telephone equipments like lines, cables, antennas, computers,
modems, multiplexers and other switching equipments, Cisco 2600/3600, Nokia BB256K (with Bayantel marking) inside the
compound of the respondents being used for this purpose, this court issued the questioned search warrants to seize the
instruments of the crime.6

On October 20, 2000, the trial court issued two search warrants denominated as S.W. No. 2000-10-4677 for Violation of Article
308 of the Revised Penal Code (Theft of Telephone Services) and S.W. No. 2000-10-4688 for violation of Presidential Decree
No. 401 (Unauthorized Installation of Telephone Connections) which both contained identical orders directing that several items
are to be seized from the premises of HPS Corporation and from the persons of Hyman Yap, et al.

The search warrants were immediately implemented on the same day by a PAOCTF-Visayas team led by Police Inspector
(P/Insp.) Danilo Villanueva. The police team searched the premises of HPS Corporation located at HPS Building, Plaridel St.,
Brgy. Alang-Alang, Mandaue City, Cebu and seized the articles specified in the search warrants.9

Subsequently, a preliminary investigation was conducted by Assistant City Prosecutor Yope M. Cotecson (Pros. Cotecson) of
the Office of the City Prosecutor of Mandaue City who thereafter issued a Resolution dated April 2, 200110 which found probable
cause that all the crimes charged were committed and that Philip Yap, Hyman Yap, Stanley Yap, Elaine Joy Yap, Julie Y. Sy, as
well as Gene Frederick Boniel, Michael Vincent Pozon, John Doe and Jane Doe were probably guilty thereof. The dispositive
portion of the said April 2, 2001 Resolution reads as follows:

Wherefore, all the foregoing considered, the undersigned finds the existence of probable cause for the crimes of Theft and
Violation of PD 401 against all the respondents herein, excluding Fatima Cimafranca, hence, filing in court of corresponding
Informations is hereby duly recommended.11

On November 23, 2000, Philip Yap and Hyman Yap filed a Motion to Quash and/or Suppress Illegally Seized Evidence.12 Then
on December 11, 2000, HPS Corporation filed a Motion to Quash Search Warrant and Return of the Things Seized. 13 Both
pleadings sought to quash the search warrants at issue on the grounds that the same did not refer to a specific offense; that
there was no probable cause; and that the search warrants were general warrants and were wrongly implemented. In response,
PLDT formally opposed the aforementioned pleadings through the filing of a Consolidated Opposition.14

The trial court then conducted hearings on whether or not to quash the subject search warrants and, in the course thereof, the
parties produced their respective evidence. HPS Corporation, et al. presented, as testimonial evidence, the testimonies of Mr.
Jesus M. Laureano, the Chief Enforcement and Operation Officer of the National Telecommunications Commission (NTC)-Region
VII and Ms. Marie Audrey Balbuena Aller, HPS Corporation’s administrative officer, while PLDT presented Engr. Policarpio
Tolentino, who held the position of Engineer II, Common Carrier Authorization Division of the NTC.15

In the course of Engr. Tolentino’s testimony, he identified certain pieces of evidence which PLDT caused to be marked as its
own exhibits but was objected to by HPS Corporation, et al. on the grounds of immateriality. The trial court sustained the
objection and accordingly disallowed the production of said exhibits. Thus, PLDT filed a Manifestation with Tender of Excluded
Evidence16 on April 18, 2001 which tendered the excluded evidence of (a) Mabuhay card with Personal Identification Number
(PIN) code number 349 4374802 (Exhibit "E"), and (b) Investigation Report dated October 2, 2000 prepared by Engr. Tolentino
in connection with the validation he made on the complaints of PLDT against ISR activities in Cebu City and Davao City (Exhibit
"G").

Subsequently, on April 19, 2001, PLDT formally offered in evidence, as part of Engr. Tolentino’s testimony and in support of
PLDT’s opposition to HPS Corporation, et al.’s motion to quash, the following: (a) Subpoena Duces Tecum and Ad
Testificandum issued by the trial court to Engr. Tolentino, commanding him to appear and testify before it on March 26, 27
and 28, 2001 (Exhibit "A"); (b) Identification Card No. 180 of Engr. Tolentino (Exhibit "B"); (c) PLDT’s letter dated September
22, 2000, addressed to then NTC Commissioner Joseph A. Santiago (Exhibit "C"); (d) Travel Order No. 52-9-2000 issued to
Engr. Tolentino and signed by then NTC Commissioner Joseph Santiago (Exhibit "D"); and (e) Travel Order No. 07 03-2001
dated March 23, 2001 issued to Engr. Tolentino by then NTC Commissioner Eliseo M. Rio, Jr., authorizing Engr. Tolentino to
appear and testify before the trial court (Exhibit "F").17

PLDT then filed a Motion for Time to File Memorandum18 asking the trial court that it be allowed to submit a Memorandum in
support of its opposition to the motion to quash search warrants filed by HPS Corporation, et al. within a period of twenty (20)
days from receipt of the trial court’s ruling. Consequently, in an Order19 dated May 3, 2001, the trial court admitted Exhibits
"A," "B," "C," "D," and "F" as part of the testimony of Engr. Tolentino. The trial court also directed PLDT to file its Memorandum
within twenty (20) days from receipt of said Order. As PLDT’s counsel received said Order on May 16, 2001, it reckoned that
it had until June 5, 2001 to file the aforementioned Memorandum.

However, the trial court issued the assailed Joint Order on May 23, 2001, before the period for the filing of PLDT’s Memorandum
had lapsed. The dispositive portion of said Order states:

WHEREFORE, premises considered, the motion to quash the search warrants and return the things seized is hereby granted.
Search Warrant Nos. 2000-10-467 and 2000-10-468 are ordered quashed. The things seized under the said search warrants
are hereby ordered to be immediately returned to respondent HPS Software and Communication Corporation.20

When PLDT discovered this development, it filed a Notice of Appeal21 on June 7, 2001 which the trial court gave due course via
an Order22 dated June 13, 2001. This case would be later docketed as CA-G.R. CV No. 75838.

PLDT likewise asserted that, without its knowledge, the trial court caused the release to HPS Corporation, et al. of all the seized
items that were in custody and possession of the PNP Task Force Group-Visayas. According to PLDT, it would not have been
able to learn about the precipitate discharge of said items were it not for a Memorandum23dated June 13, 2001 issued by Police
Superintendent Jose Jorge E. Corpuz which PLDT claimed to have received only on June 27, 2001. Said document indicated
that the items seized under the search warrants at issue were released from the custody of the police and returned to HPS
Corporation, et al. through its counsel, Atty. Roque Paloma, Jr.
Thus, on July 18, 2001, PLDT filed a Petition for Certiorari under Rule 6524 with the Court of Appeals assailing the trial court’s
release of the seized equipment despite the fact that the Joint Order dated May 23, 2001 had not yet attained finality. This
petition became the subject matter of CA-G.R. SP No. 65682.

The former Fourth Division of the Court of Appeals issued a Decision dated March 26, 2004 in CA-G.R. SP No. 65682 which
granted PLDT’s petition for certiorari and set aside the trial court’s May 23, 2001 Joint Order insofar as it released the seized
equipment at issue. The dispositive portion of the March 26, 2004 Decision reads:

WHEREFORE, premises considered, the instant petition is hereby GRANTED. Accordingly, the respondent judge’s May 23,
2001 Joint Order is MODIFIED by SETTING ASIDE that portion directing the immediate return of the seized items to
respondent HPS. Consequently, the respondent PNP Special Task Force is directed to retrieve possession and take custody of
all the seized items, as enumerated in the inventory a quo, pending the final disposition of the appeal filed by the petitioner
on respondent judge’s May 23, 2001 Joint Order.25

HPS Corporation, et al. moved for reconsideration of said Court of Appeals ruling but this motion was denied for lack of merit
via a Resolution dated September 27, 2005. Subsequently, HPS Corporation, et al. filed a Petition for Review
on Certiorari under Rule 4526 with this Court on November 16, 2005. The petition was docketed as G.R. No. 170217.

On the other hand, PLDT’s appeal docketed as CA-G.R. CV No. 75838 was resolved by the former Eighteenth Division of the
Court of Appeals in a Decision dated April 8, 2005. The dispositive portion of the April 8, 2005 Decision states:

WHEREFORE, the Joint Order of the Regional Trial Court, Branch 55, Mandaue City, dated May 23, 2001, is
hereby AFFIRMED.27

PLDT moved for reconsideration but this was rebuffed by the Court of Appeals through a Resolution dated December 7, 2005.
Unperturbed, PLDT filed a Petition for Review on Certiorari under Rule 4528 with this Court on January 26, 2006. The petition
was, in turn, docketed as G.R. No. 170694.

In a Resolution29 dated August 28, 2006, the Court resolved to consolidate G.R. No. 170217 and G.R. No. 170694 in the interest
of speedy and orderly administration of justice.

HPS Corporation, et al.’s Joint Memorandum (for respondents HPS Software and Communication Corporation, Hyman Yap,
Stanley Yap, Elaine Joy Yap and Julie Sy)30 dated June 23, 2008 to the consolidated cases of G.R. No. 170217 and G.R. No.
170694 raised the following issues for consideration:

IV.1. Whether or not the above-entitled two (2) petitions are already moot and academic with this
Honorable Supreme Court’s promulgation of the doctrinal decision for the case of Luis Marcos P. Laurel vs.
Hon. Zeus C. Abrogar, People of the Philippines and Philippine Long Distance Telephone Company, G.R.
No. 155076, February 27, 2006, declaring that: "x x x the telecommunication services provided by PLDT
and its business of providing said services are not personal properties under Article 308 of the Revised
Penal Code.

x x x In the Philippines, Congress has not amended the Revised Penal Code to include theft of services or
theft of business as felonies. Instead, it approved a law, Republic Act No. 8484, otherwise known as the
Access Devices Regulation Act of 1998, on February 11, 1998. x x x."?

In the most unlikely event that the above-entitled two (2) petitions have not yet been rendered moot by the doctrinal
decision in the said Laurel case, HPS respectfully submit that the following are the other issues:

IV.2. Whether or not the Court of Appeals committed grave abuse of discretion when it declared that the
subject warrants are general warrants?

IV.3. Whether or not the factual findings of the trial court in its May 23, 2001 Order that there was no
probable cause in issuing the subject warrants is already conclusive, when the said factual findings are
duly supported with evidence; were confirmed by the Court of Appeals; and, PLDT did not refute the
damning evidence against it when it still had all the opportunity to do so?

IV.4. Whether or not the trial court committed grave abuse of discretion amounting to lack or in excess of
jurisdiction when it stated in its May 23, 2001 Joint Order that:

"WHEREFORE, premises considered, the motion to quash the search warrants and return the things seized
is hereby granted. Search Warrant Nos. 2000-10-467 and 2000-10-468 are ordered quashed. The things
seized under the said search warrants are hereby ordered to be immediately returned to respondent HPS
Software and Communications Corporation."

IV.5. Whether or not PLDT’s memorandum was necessary before a decision can be rendered by the trial
court?

IV.6. Whether or not there was a need for PLDT to first file a Motion for Reconsideration before filing its
petition for certiorari in the subject case?

IV.7. Whether or not a Petition for Certiorari was the appropriate remedy for PLDT when it had recourse
to other plain remedy other than the Petition for Certiorari?

IV.8. Whether or not PLDT has the legal interest and personality to file the present petition when the
complainant PAOCTF has already voluntarily complied with or satisfied the Joint Order.
 IV.9. Whether or not the Court of Appeals can, in a petition for certiorari, nullify a litigant’s or the Search
Warrants Applicant’s exercise of its prerogative of accepting and complying with the said May 23, 2001
Joint Order of the trial court?

IV.10. Whether or not there was forum shopping when PLDT filed an appeal and a petition for certiorari
on the same May 23, 2001 Joint Order issued by the trial court?

IV.11. Whether or not the Court of Appeals gravely abused its discretion when it upheld the trial court’s
decision to disallow the testimony of Engr. Policarpio Tolentino during the hearings of the motion to quash
the subject search warrants when the said Engr. Tolentino was not even presented as witness during the
hearing for the application of the subject search warrants; and, as the Court of Appeals had declared: ". .
. We cannot but entertain serious doubts as to the regularity of the performance of his official function"?

IV.12. Whether or not PLDT’s counsel can sue its own client, the applicant of the subject search warrant?31

On the other hand, PLDT raised the following arguments in its Memorandum32 dated June 16, 2008 to the consolidated cases
of G.R. No. 170217 and G.R. No. 170694:

THE COURT OF APPEALS GRAVELY MISAPPREHENDED THE FACTS WHEN IT SUSTAINED THE QUASHAL OF THE SEARCH
WARRANTS DESPITE THE CLEAR AND SUFFICIENT EVIDENCE ON RECORD ESTABLISHING PROBABLE CAUSE FOR THE
ISSUANCE THEREOF.

II

THE COURT OF APPEALS GRAVELY ERRED IN INDISCRIMINATELY RELYING UPON RULINGS OF THIS HONORABLE
COURT THAT ARE NOT APPLICABLE TO THIS CASE.

A. THE RULING IN LAGON V. HOOVEN COMALCO INDUSTRIES, INC. THAT LITIGATIONS SHOULD NOT BE
RESOLVED ON THE BASIS OF SUPPOSITIONS, DEDUCTIONS IS NOT PROPER IN THIS CASE CONSIDERING
THAT:

1. The Search Warrant Case is merely a step preparatory to the filing of criminal cases against the
Respondents. Thus, the applicant needed only to establish probable cause for the issuance of the
search warrants and not proof beyond reasonable doubt.

2. Even assuming arguendo that there is some controversy as to the value remaining in
the Mabuhay card, the totality of evidence submitted during the applications for the Search Warrant
is more than sufficient to establish probable cause.

B. THE RULING IN DAYONOT V. NATIONAL LABOR RELATIONS COMMISSION THAT AN ADVERSE INFERENCE
ARISES FROM A PARTY’S FAILURE TO REBUT AN ASSERTION THAT WOULD HAVE NATURALLY INVITED AN
IMMEDIATE AND PERVASIVE OPPOSITION IS INAPPLICABLE IN THIS CASE CONSIDERING THAT:

1. PLDT sufficiently rebutted Respondents’ claim that PLDT has no cause to complain because of its
prior knowledge of HPS’s internet services.

2. Assuming arguendo that PLDT had knowledge of HPS’s internet services, such fact is immaterial in
the determination of the propriety of the Search Warrants issued in this case. The Search Warrants
were issued because the evidence presented by PAOCTF overwhelmingly established the existence of
probable cause that Respondents were probably committing a crime and the objects used for the
crime are in the premises to be searched.

III

THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING THE DISALLOWANCE OF A PORTION OF ENGR.
TOLENTINO’S TESTIMONY AND OF THE INTRODUCTION OF THE MABUHAY CARD AND HIS INVESTIGATION REPORT
IN VIOLATION OF THE PRESUMPTION THAT OFFICIAL DUTY HAS BEEN REGULARLY PERFORMED.

IV

THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING THE TRIAL COURT’S JOINT ORDER WHICH WAS ISSUED
WITH UNDUE HASTE. THE COURT OF APPEALS OVERLOOKED FACTS WHICH CLEARLY DEMONSTRATED THE TRIAL
COURT’S PREJUDGMENT OF THE CASE IN FAVOR OF RESPONDENTS, IN VIOLATION OF PLDT’S RIGHT TO DUE
PROCESS.

THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE CONTESTED SEARCH WARRANTS ARE IN THE
NATURE OF GENERAL WARRANTS CONSIDERING THAT:

A. THE ISSUE OF WHETHER THE SEARCH WARRANTS ARE GENERAL WARRANTS WAS NEVER RAISED IN THE
APPEAL BEFORE IT.
 B. IN ANY CASE, THE SEARCH WARRANTS STATED WITH SUFFICIENT PARTICULARITY THE PLACE TO BE
SEARCHED AND THE OBJECTS TO BE SEIZED, IN CONFORMITY WITH THE CONSTITUTIONAL AND
JURISPRUDENTIAL REQUIREMENTS IN THE ISSUANCE OF SEARCH WARRANTS.

VI

RESPONDENTS’ ALLEGATION THAT PLDT FAILED TO COMPLY WITH THE REQUIREMENTS OF SECTION 3, RULE 45 AND
SECTION 4, RULE 7 OF THE RULES OF COURT IS COMPLETELY BASELESS CONSIDERING THAT:

A. PLDT COMPLIED WITH THE RULES ON PROOF OF SERVICE.

B. THE PETITION WAS PROPERLY VERIFIED. ASSUMING ARGUENDO THAT THE ORIGINAL VERIFICATION
SUBMITTED WAS DEFICIENT, THE SAME WAS PROMPTLY CORRECTED BY PLDT, IN FULL COMPLIANCE WITH
THE DIRECTIVE OF THIS HONORABLE COURT.

C. PLDT DID NOT ENGAGE IN FORUM-SHOPPING.

1. The issues, subject matter and reliefs prayed for in the Appeal Case and the Certiorari Case are
distinct and separate from one another.

2. Assuming arguendo that the Appeal Case involves the same parties, subject matter and reliefs in
the Certiorari Case, then Respondents are equally guilty of forum-shopping when they elevated the
Decision of the Court of Appeals in the Certiorari Case to this Honorable Court.

VII

RESPONDENTS’ RELIANCE ON THE CASE OF LAUREL V. ABROGAR IS ERRONEOUS AND MISLEADING. LAUREL V.
ABROGAR IS NOT YET FINAL AND EXECUTORY, HENCE, CANNOT BIND EVEN THE PARTIES THERETO, MUCH LESS
RESPONDENTS HEREIN.33 (Citations omitted.)

A year later, on June 1, 2009, PLDT submitted a Supplemental Memorandum34 to its June 16, 2008 Memorandum. In the said
pleading, PLDT pointed out the reversal by the Supreme Court En Banc of the February 27, 2006 Decision in Laurel v.
Abrogar35 and raised it as a crucial issue in the present consolidated case:

IN A RESOLUTION DATED 13 JANUARY 2009, THIS HONORABLE COURT EN BANC SET ASIDE THE 27 FEBRUARY 2006
DECISION IN LAUREL V. ABROGAR. THEREFORE, THE PREVAILING DOCTRINE WITH RESPECT TO THE ACT OF CONDUCTING
ISR OPERATIONS IS THAT IT IS AN ACT OF SUBTRACTION COVERED BY THE PROVISIONS ON THEFT, AND THAT THE BUSINESS
OF PROVIDING TELECOMMUNICATION OR TELEPHONE SERVICE IS CONSIDERED PERSONAL PROPERTY WHICH CAN BE THE
OBJECT OF THEFT UNDER ARTICLE 308 OF THE REVISED PENAL CODE. THUS, RESPONDENTS CAN NO LONGER RELY ON THE
27 FEBRUARY 2006 DECISION OF THIS HONORABLE COURT IN LAUREL V. ABROGAR.36

After evaluating the aforementioned submissions, the Court has identified the following questions as the only relevant issues
that need to be resolved in this consolidated case:

WHETHER OR NOT PLDT HAS LEGAL PERSONALITY TO FILE THE PETITION FOR SPECIAL CIVIL ACTION
OF CERTIORARI IN CA-G.R. SP No. 65682 AND, SUBSEQUENTLY, THE PETITION FOR REVIEW IN G.R. NO. 170694
WITHOUT THE CONSENT OR APPROVAL OF THE SOLICITOR GENERAL.

II

WHETHER OR NOT PLDT’S PETITION FOR CERTIORARI SHOULD HAVE BEEN DISMISSED OUTRIGHT BY THE COURT
OF APPEALS SINCE NO MOTION FOR RECONSIDERATION WAS FILED BY PLDT FROM THE ASSAILED MAY 23, 2001
JOINT ORDER OF THE TRIAL COURT.

III

WHETHER OR NOT PLDT COMMITTED FORUM-SHOPPING.

IV

WHETHER OR NOT THE TWO (2) SEARCH WARRANTS WERE IMPROPERLY QUASHED.

WHETHER OR NOT THE SUBJECT SEARCH WARRANTS ARE IN THE NATURE OF GENERAL WARRANTS.

VI

WHETHER OR NOT THE RELEASE OF THE ITEMS SEIZED BY VIRTUE OF THE SUBJECT SEARCH WARRANTS WAS
PROPER.
Before resolving the aforementioned issues, we will first discuss the state of jurisprudence on the issue of whether or not the
activity referred to as "international simple resale" (ISR) is considered a criminal act of Theft in this jurisdiction.

To recall, HPS Corporation, et al. contends that PLDT’s petition in G.R. No. 170694 has already become moot and academic
because the alleged criminal activity which PLDT asserts as having been committed by HPS Corporation, et al. has been
declared by this Court as not constituting the crime of Theft or any other crime for that matter. HPS Corporation, et al. draws
support for their claim from the February 27, 2006 Decision of this Court in Laurel v. Abrogar.37

In that case, PLDT sued Baynet Co., Ltd. (Baynet) and its corporate officers for the crime of Theft through stealing the
international long distance calls belonging to PLDT by conducting ISR which is a method of routing and completing international
long distance calls using lines, cables, antennae, and/or air wave frequency which connect directly to the local or domestic
exchange facilities of the country where the call is destined. One of those impleaded in the Amended Information, Luis Marcos
P. Laurel (Laurel), moved for the quashal of the Amended Information arguing that an ISR activity does not constitute the
felony of Theft under Article 308 of the Revised Penal Code (RPC). Both the trial court and the Court of Appeals did not find
merit in his motion. However, this Court speaking through its First Division upheld Laurel’s contention by ruling that the
Amended Information does not contain material allegations charging petitioner with theft of personal property since
international long distance calls and the business of providing telecommunication or telephone services are not personal
properties under Article 308 of the Revised Penal Code. The Court then explained the basis for this previous ruling in this wise:

In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal property without the consent of the
owner thereof, the Philippine Legislature could not have contemplated the human voice which is converted into electronic
impulses or electrical current which are transmitted to the party called through the PSTN of respondent PLDT and the ISR of
Baynet Card Ltd. within its coverage. When the Revised Penal Code was approved, on December 8, 1930, international
telephone calls and the transmission and routing of electronic voice signals or impulses emanating from said calls, through the
PSTN, IPL and ISR, were still nonexistent. Case law is that, where a legislative history fails to evidence congressional awareness
of the scope of the statute claimed by the respondents, a narrow interpretation of the law is more consistent with the usual
approach to the construction of the statute. Penal responsibility cannot be extended beyond the fair scope of the statutory
mandate.38

Undaunted, PLDT filed a Motion for Reconsideration with Motion to Refer the Case to the Supreme Court En Banc. This motion
was acted upon favorably by the Court En Banc in a Resolution39 dated January 13, 2009 thereby reconsidering and setting
aside the February 27, 2006 Decision. In resolving PLDT’s motion, the Court En Banc held that:

The acts of "subtraction" include: (a) tampering with any wire, meter, or other apparatus installed or used for generating,
containing, conducting, or measuring electricity, telegraph or telephone service; (b) tapping or otherwise wrongfully deflecting
or taking any electric current from such wire, meter, or other apparatus; and (c) using or enjoying the benefits of any device
by means of which one may fraudulently obtain any current of electricity or any telegraph or telephone service.

In the instant case, the act of conducting ISR operations by illegally connecting various equipment or apparatus to private
respondent PLDT’s telephone system, through which petitioner is able to resell or reroute international long distance calls using
respondent PLDT’s facilities constitutes all three acts of subtraction mentioned above.

The business of providing telecommunication or telephone service is likewise personal property which can be the object of theft
under Article 308 of the Revised Penal Code. Business may be appropriated under Section 2 of Act No. 3952 (Bulk Sales Law),
hence, could be the object of theft:

"Section 2. Any sale, transfer, mortgage, or assignment of a stock of goods, wares, merchandise, provisions, or materials
otherwise than in the ordinary course of trade and the regular prosecution of the business of the vendor, mortgagor, transferor,
or assignor, or any sale, transfer, mortgage, or assignment of all, or substantially all, of the business or trade theretofore
conducted by the vendor, mortgagor, transferor or assignor, or all, or substantially all, of the fixtures and equipment used in
and about the business of the vendor, mortgagor, transferor, or assignor, shall be deemed to be a sale and transfer in bulk, in
contemplation of the Act. x x x."

In Strocheker v. Ramirez, this Court stated:

"With regard to the nature of the property thus mortgaged, which is one-half interest in the business above described, such
interest is a personal property capable of appropriation and not included in the enumeration of real properties in Article 335 of
the Civil Code, and may be the subject of mortgage."

Interest in business was not specifically enumerated as personal property in the Civil Code in force at the time the above
decision was rendered. Yet, interest in business was declared to be personal property since it is capable of appropriation and
not included in the enumeration of real properties. Article 414 of the Civil Code provides that all things which are or may be
the object of appropriation are considered either real property or personal property. Business is likewise not enumerated as
personal property under the Civil Code. Just like interest in business, however, it may be appropriated. Following the ruling
in Strochecker v. Ramirez, business should also be classified as personal property. Since it is not included in the exclusive
enumeration of real properties under Article 415, it is therefore personal property.

As can be clearly gleaned from the above disquisitions, petitioner’s acts constitute theft of respondent PLDT’s business and
service, committed by means of the unlawful use of the latter’s facilities. x x x.40 (Citations omitted.)

Plainly, from the aforementioned doctrinal pronouncement, this Court had categorically stated and still maintains that an ISR
activity is an act of subtraction covered by the provisions on Theft, and that the business of providing telecommunication or
telephone service is personal property, which can be the object of Theft under Article 308 of the Revised Penal Code.

Having established that an ISR activity is considered as Theft according to the prevailing jurisprudence on the matter, this
Court will now proceed to discuss the central issues involved in this consolidated case.
Anent the first issue of whether PLDT possesses the legal personality to file the petition in G.R. No. 170694 in light of
respondents’ claim that, in criminal appeals, it is the Solicitor General which has the exclusive and sole power to file such
appeals in behalf of the People of the Philippines, this Court rules in the affirmative.

The petition filed by PLDT before this Court does not involve an ordinary which requires the participation and conformity of the
City Prosecutor or the Solicitor General when raised before appellate courts.

On the contrary, what is involved here is a search warrant proceeding which is not a criminal action, much less a civil action,
but a special criminal process. In the seminal case of Malaloan v. Court of Appeals,41 we expounded on this doctrine in this
wise:

The basic flaw in this reasoning is in erroneously equating the application for and the obtention of a search warrant with the
institution and prosecution of a criminal action in a trial court. It would thus categorize what is only a special criminal process,
the power to issue which is inherent in all courts, as equivalent to a criminal action, jurisdiction over which is reposed
in specific courts of indicated competence. It ignores the fact that the requisites, procedure and purpose for the issuance of a
search warrant are completely different from those for the institution of a criminal action.

For, indeed, a warrant, such as a warrant of arrest or a search warrant, merely constitutes process. A search warrant is defined
in our jurisdiction as an order in writing issued in the name of the People of the Philippines signed by a judge and directed to
a peace officer, commanding him to search for personal property and bring it before the court. A search warrant is in the nature
of a criminal process akin to a writ of discovery. It is a special and peculiar remedy, drastic in its nature, and made necessary
because of a public necessity.

In American jurisdictions, from which we have taken our jural concept and provisions on search warrants, such warrant is
definitively considered merely as a process, generally issued by a court in the exercise of its ancillary jurisdiction, and not a
criminal action to be entertained by a court pursuant to its original jurisdiction. We emphasize this fact for purposes of both
issues as formulated in this opinion, with the catalogue of authorities herein

Invariably, a judicial process is defined as a writ, warrant, subpoena, or other formal writing issued by authority of law; also
the means of accomplishing an end, including judicial proceedings, or all writs, warrants, summonses, and orders of courts of
justice or judicial officers. It is likewise held to include a writ, summons, or order issued in a judicial proceeding to acquire
jurisdiction of a person or his property, to expedite the cause or enforce the judgment, or a writ, warrant, mandate, or other
process issuing from a court of justice.42 (Citations omitted.)

Since a search warrant proceeding is not a criminal action, it necessarily follows that the requirement set forth in Section 5,
Rule 110 of the Rules on Criminal Procedure which states that "all criminal actions either commenced by complaint or by
information shall be prosecuted under the direction and control of a public prosecutor" does not apply.

In Columbia Pictures Entertainment, Inc. v. Court of Appeals,43 we sustained the legal personality of a private complainant to
file an action or an appeal without the imprimatur of government prosecutors on the basis of the foregoing ratiocination:

The threshold issue that must first be determined is whether or not petitioners have the legal personality and standing to file
the appeal.

Private respondent asserts that the proceedings for the issuance and/or quashal of a search warrant are criminal in nature.
Thus, the parties in such a case are the "People" as offended party and the accused. A private complainant is relegated to the
role of a witness who does not have the right to appeal except where the civil aspect is deemed instituted with the criminal
case.

Petitioners, on the other hand, argue that as the offended parties in the criminal case, they have the right to institute an appeal
from the questioned order.

From the records it is clear that, as complainants, petitioners were involved in the proceedings which led to the issuance of
Search Warrant No. 23. In People v. Nano, the Court declared that while the general rule is that it is only the Solicitor General
who is authorized to bring or defend actions on behalf of the People or the Republic of the Philippines once the case is brought
before this Court or the Court of Appeals, if there appears to be grave error committed by the judge or a lack of due process,
the petition will be deemed filed by the private complainants therein as if it were filed by the Solicitor General. In line with this
ruling, the Court gives this petition due course and will allow petitioners to argue their case against the questioned order in
lieu of the Solicitor General. (Citation omitted.)

Similarly, in the subsequent case of Sony Computer Entertainment, Inc. v. Bright Future Technologies, Inc.,44 we upheld the
right of a private complainant, at whose initiative a search warrant was issued, to participate in any incident arising from or in
connection with search warrant proceedings independently from the State. We quote the relevant discussion in that case here:

The issue of whether a private complainant, like SCEI, has the right to participate in search warrant proceedings was addressed
in the affirmative in United Laboratories, Inc. v. Isip:

. . . [A] private individual or a private corporation complaining to the NBI or to a government agency charged with the
enforcement of special penal laws, such as the BFAD, may appear, participate and file pleadings in the search warrant
proceedings to maintain, inter alia, the validity of the search warrant issued by the court and the admissibility of the
properties seized in anticipation of a criminal case to be filed; such private party may do so in collaboration with the NBI or
such government agency. The party may file an opposition to a motion to quash the search warrant issued by the court, or a
motion for the reconsideration of the court order granting such motion to quash.45

With regard to the second issue of whether or not PLDT’s petition for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure should have been dismissed outright by the Court of Appeals since no motion for reconsideration was filed by PLDT
from the assailed May 23, 2001 Joint Order of the trial court, this Court declares that, due to the peculiar circumstances
obtaining in this case, the petition for certiorari was properly given due course by the Court of Appeals despite the non-
fulfillment of the requirement of the filing of a motion for reconsideration.

The general rule is that a motion for reconsideration is a condition sine qua non before a petition for certiorari may lie, its
purpose being to grant an opportunity for the court a quo to correct any error attributed to it by a re-examination of the legal
and factual circumstances of the case.46

However, the rule is not absolute and jurisprudence has laid down the following exceptions when the filing of a petition
for certiorari is proper notwithstanding the failure to file a motion for reconsideration:

(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;

(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court,
or are the same as those raised and passed upon in the lower court;

(c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the
interests of the Government or of the petitioner or the subject matter of the petition is perishable;

(d) where, under the circumstances, a motion for reconsideration would be useless;

(e) where petitioner was deprived of due process and there is extreme urgency for relief;

(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is
improbable;

(g) where the proceedings in the lower court are a nullity for lack of due process;

(h) where the proceeding was ex parte or in which the petitioner had no opportunity to object; and,

(i) where the issue raised is one purely of law or public interest is involved.47

In the case at bar, it is apparent that PLDT was deprived of due process when the trial court expeditiously released the items
seized by virtue of the subject search warrants without waiting for PLDT to file its memorandum and despite the fact that no
motion for execution was filed by respondents which is required in this case because, as stated in the assailed March 26, 2004
Decision of the Court of Appeals in CA-G.R. SP No. 65682, the May 23, 2001 Joint Order of the trial court is a final order which
disposes of the action or proceeding and which may be the subject of an appeal. Thus, it is not immediately executory.
Moreover, the items seized by virtue of the subject search warrants had already been released by the trial court to the custody
of respondents thereby creating a situation wherein a motion for reconsideration would be useless. For these foregoing reasons,
the relaxation of the settled rule by the former Fourth Division of the Court of Appeals is justified.

Moving on to the third issue of whether PLDT was engaged in forum shopping when it filed a petition for certiorari under Rule
65 with the Court of Appeals despite the fact that it had previously filed an appeal from the assailed May 23, 2001 Joint Order,
this Court rules in the negative.

In Metropolitan Bank and Trust Company v. International Exchange Bank,48 we reiterated the jurisprudential definition of forum
shopping in this wise:

Forum shopping has been defined as an act of a party, against whom an adverse judgment has been rendered in one forum,
of seeking and possibly getting a favorable opinion in another forum, other than by appeal or a special civil action
for certiorari, or the institution of two or more actions or proceedings grounded on the same cause on the supposition that
one or the other court would make a favorable disposition. (Citation omitted.)

Thus, there is forum shopping when, between an action pending before this Court and another one, there exist: (1) identity of
parties, or at least such parties as represent the same interests in both actions; (2) identity of rights asserted and relief prayed
for, the relief being founded on the same facts; and (3) the identity of the two preceding particulars is such that any judgment
rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under
consideration; said requisites also constitutive of the requisites for auter action pendant or lis pendens.49

In the case at bar, forum shopping cannot be considered to be present because the appeal that PLDT elevated to the Court of
Appeals is an examination of the validity of the trial court’s action of quashing the search warrants that it initially issued while,
on the other hand, the petition for certiorari is an inquiry on whether or not the trial court judge committed grave abuse of
discretion when he ordered the release of the seized items subject of the search warrants despite the fact that its May 23,
2001 Joint Order had not yet become final and executory, nor had any motion for execution pending appeal been filed by the
HPS Corporation, et al. Therefore, it is readily apparent that both cases posed different causes of action.

As to the fourth issue of whether or not the two search warrants at issue were improperly quashed, PLDT argues that the Court
of Appeals erroneously appreciated the facts of the case and the significance of the evidence on record when it sustained the
quashal of the subject search warrants by the trial court mainly on the basis of test calls using a Mabuhay card with PIN code
number 332 147922450 which was the same Mabuhay card that was presented by PLDT to support its application for a search
warrant against HPS Corporation, et al. These test calls were conducted in NTC-Region VII Office on November 3, 2000 and in
open court on January 10, 2001. PLDT insists that these test calls, which were made after the issuance of the subject search
warrants, are immaterial to the issue of whether or not HPS Corporation, et al. were engaged in ISR activities using the
equipment seized at the time the subject search warrants were issued and implemented. PLDT further argues that a search
warrant is merely a preparatory step to the filing of a criminal case; thus, an applicant needs only to establish probable cause
for the issuance of a search warrant and not proof beyond reasonable doubt. In this case, PLDT believes that it had established
probable cause that is sufficient enough to defeat the motion to quash filed by HPS Corporation, et al.
We find that the contention is impressed with merit.

This Court has consistently held that the validity of the issuance of a search warrant rests upon the following factors: (1) it
must be issued upon probable cause; (2) the probable cause must be determined by the judge himself and not by the
applicant or any other person; (3) in the determination of probable cause, the judge must examine, under oath or affirmation,
the complainant and such witnesses as the latter may produce; and (4) the warrant issued must particularly describe the place
to be searched and persons and things to be seized.51

Probable cause, as a condition for the issuance of a search warrant, is such reasons supported by facts and circumstances as
will warrant a cautious man to believe that his action and the means taken in prosecuting it are legally just and proper. It
requires facts and circumstances that would lead a reasonably prudent man to believe that an offense has been committed
and that the objects sought in connection with that offense are in the place to be searched.52

In Microsoft Corporation v. Maxicorp, Inc.,[53] this Court held that the quantum of evidence required to prove probable cause
is not the same quantum of evidence needed to establish proof beyond reasonable doubt which is required in a criminal case
that may be subsequently filed. We ruled in this case that:

The determination of probable cause does not call for the application of rules and standards of proof that a judgment of
conviction requires after trial on the merits. As implied by the words themselves, "probable cause" is concerned with probability,
not absolute or even moral certainty. The prosecution need not present at this stage proof beyond reasonable doubt. The
standards of judgment are those of a reasonably prudent man, not the exacting calibrations of a judge after a full-blown
trial.54 (Citation omitted.)

In the case at bar, both the trial court and the former Eighteenth Division of the Court of Appeals agree that no probable cause
existed to justify the issuance of the subject search warrants. In sustaining the findings of the trial court, the Court of Appeals
in its assailed Decision dated April 8, 2005 in CA-G.R. CV No. 75838 ratiocinated in this manner:

As a giant in the telecommunications industry, PLDT’s declaration in page 21 of its appellant’s brief that it would "take
sometime, or after a certain number of minutes is consumed, before the true value of the card is correspondingly reflected",
by way of further explaining the nature of the subject Mabuhay Card as not being a "smart" card, is conceded with much
alacrity.

We are not, however, prepared to subscribe to the theory that the twenty (20) minutes deducted from the balance of the
subject Mabuhay Card after a couple of test calls were completed in open court on January 10, 2001 already included the time
earlier consumed by the PLDT personnel in conducting their test calls prior to the application for the questioned warrants but
belatedly deducted only during the test calls conducted by the court a quo. It is beyond cavil that litigations cannot be properly
resolved by suppositions, deductions, or even presumptions, with no basis in evidence, for the truth must have to be determined
by the hard rules of admissibility and proof. This Court cannot quite fathom why PLDT, with all the resources available to it,
failed to substantiate this particular supposition before the court a quo, when it could have helped their case immensely. We
note that at the hearing held on January 10, 2001, the trial judge allowed the conduct of test calls in open court in order to
determine if the subject Mabuhay Card had in fact been used, as alleged by PLDT. However, it was proven that the Card
retained its original value of $10 despite several test calls already conducted in the past using the same. PLDT should have
refuted this damning evidence while it still had all the opportunity to do so, but it did not.

Moreover, if we go by the gauge set by PLDT itself that it would take a certain number of minutes before the true value of the
card is reflected accordingly, then we fail to see how the test calls conducted by its personnel on September 13, 2000 could
only be deducted on January 10, 2001, after almost four (4) months.

PLDT cannot likewise capitalize on the fact that, despite the series of test calls made by Engr. Jesus Laureno at the NTC, Region
VII office on November 3, 2000, the subject Mabuhay Card still had $10 worth of calls. Had PLDT closely examined the testimony
of Engr. Laureno in open court, it would have realized that not one of said calls ever got connected to a destination number.
Thus:

"Q You said that after you heard that female voice which says that you still have ten (10) dollars and you entered your call at
the country of destination, you did not proceed that call. Will you please tell the Court of the six test calls that were conducted,
how many calls were up to that particular portion?

A Five (5).

Q Will you please tell the Court who… since that were five (5) test calls, how many calls did you personally make up to that
particular portion?

A Only one (1).

Q In whose presence?

A In the presence of Director Butaslac, Engr. Miguel, Engr. Yeban, Engr. Hinaut and three (3) PNP personnel, Atty. Muntuerto
and Atty. Paloma.

Q What about the other four (4)? You mentioned of five (5) test calls and you made only one, who did the other four (4) test
calls which give the said results?

A The third call was done by Engr. Yeban using the same procedure and then followed by the PNP personnel. Actually, the first
one who dial or demonstrate is Atty. Muntuerto, me is the second; third is Engr. Yeban; the fourth is the PNP personnel and
also the fifth; and the sixth test calls was Engr. Yeban and with that call, we already proceeded to the dialing the destination
number which we call one of the numbers of our office.
Q What number of the office was called following the instruction that you have ten (10) dollars and that you enter your
destination number now?

A 346-06-87.

Q What happened? You said that, that was done on the sixth test calls, what happened after that destination number was
entered?

A The call is not completed and the female voice said to retry again." (TSN, January 10, 2001, pp. 45-48)

In fine, PLDT cannot argue that the court a quo should not have relied heavily upon the result of the test calls made by the
NTC- Regional Office as well as those done in open court on January 10, 2001, as there are other convincing evidence such as
the testimonies of its personnel showing that, in fact, test calls and ocular inspections had been conducted yielding positive
results. Precisely, the trial court anchored its determination of probable cause for the issuance of the questioned warrants on
the sworn statements of the PLDT personnel that test calls had been made using the subject Mabuhay Card. However, said
statements were later proven to be wanting in factual basis.55

Essentially, the reasoning of the Court of Appeals relies solely on the fact that the Mabuhay card with PIN code number 332
1479224 with a card value of $10.00 did not lose any of its $10.00 value before it was used in the test calls conducted at the
NTC-Region VII office and in open court. Thus, the Court of Appeals concluded that, contrary to PLDT’s claims, no test calls
using the same Mabuhay card were actually made by PLDT’s witnesses when it applied for a search warrant against HPS
Corporation, et al.; otherwise, the Mabuhay card should have had less than $10.00 value left in it.

This Court cannot subscribe to such a hasty conclusion because the determination of whether or not test calls were indeed
made by PLDT on Mabuhay card with PIN code number 332 1479224 cannot be ascertained solely by checking the value
reflected on the aforementioned Mabuhay card. In fact, reliance on this method of verification is fraught with questions that
strike deep into the capability of the said Mabuhay card to automatically and accurately reflect the fact that it had indeed been
used by PLDT’s witnesses to make test calls.

We find that indeed PLDT never represented that the Mabuhay card had an accurate recording system that would automatically
deduct the value of a call from the value of the card at the time the call was made. Certainly, PLDT was not in a position to
make such an assertion as it did not have a hand in the production and programming of said Mabuhay card.

Furthermore, several plausible reasons could be entertained for the non-deduction of the value of the Mabuhay card other than
the trial court’s assertion that the said phone card could not have been utilized in test calls made by PLDT’s witnesses.

One explanation that PLDT offered is that the said Mabuhay card might not be a "smart" card which, in telecommunications
industry parlance, is a card that automatically debits the value of a call as it is made as opposed to a non-"smart" card which
takes a considerable amount of time before the true value of the card is correspondingly reflected in the balance.

Another explanation that PLDT suggests is that the test calls that were conducted in NTC-Region VII on November 3, 2000 and
in open court on January 10, 2001 were made long after the subject search warrants were issued which was on October 20,
2000. During the time in between said events, the identity of the Mabuhay card was already a matter of judicial record and,
thus, easily ascertainable by any interested party. PLDT asserts this circumstance could have provided HPS Corporation, et
al. the opportunity to examine the prosecution’s evidence, identify the specific Mabuhay card that PLDT’s witnesses used and
manipulate the remaining value reflected on the said phone card. This idea is not farfetched considering that if HPS
Corporation, et al. did indeed engage in illegal ISR activities using Mabuhay cards then it would not be impossible for HPS
Corporation, et al. to possess the technical knowledge to reconfigure the Mabuhay card that was used in evidence by PLDT. In
support of this tampering theory, PLDT points to HPS Corporation, et al.’s vehement opposition to the introduction of a
different Mabuhay card during the testimony of Engr. Tolentino, which PLDT attributes to HPS Corporation, et al.’s lack of
opportunity to identify and manipulate this particular phone card.

Since the value of the subject Mabuhay card may be susceptible to tampering, it would have been more prudent for the trial
court and the Court of Appeals to weigh the other evidence on record. As summarized in its memorandum, PLDT submitted
the following to the trial court, during the application for the subject search warrants and during the hearing on HPS
Corporation, et al.’s motion to suppress the evidence:

a. The affidavit56 and testimony57 of PLDT employee Engr. Reuben C. Hinagdanan (Engr. Hinagdanan) which was given
during the application for the issuance of the subject search warrants. In his affidavit and testimony, Engr. Hinagdanan
averred that PLDT conducted surveillance on the ISR activities of HPS Corporation, et al. and that the said surveillance
operation yielded positive results that PLDT telephone lines subscribed by Philip Yap and/or HPS Corporation were
being utilized for illegal ISR operations.

b. The call detail records58 which are attached as Annex "C" to Engr. Hinagdanan’s affidavit which indicated that test
calls were made by Engr. Hinagdanan using the Mabuhay card with PIN code number 332 1479224. The said document
also indicated that even if the calls originated from the United States of America, the calling party reflected therein
are local numbers of telephone lines which PLDT had verified as the same as those subscribed by Philip Yap and/or
HPS Corporation.

c. The affidavit59 and testimony60 of PLDT employee Engr. Richard L. Dira (Engr. Dira) which was given during the
application for the issuance of the subject search warrants. In his affidavit and testimony, Engr. Dira averred that he
personally conducted an ocular inspection in the premises of HPS Corporation and that the said inspection revealed
that all PLDT lines subscribed by Philip Yap and/or HPS Corporation were illegally connected to various
telecommunications and switching equipment which were used in illegal ISR activities conducted by HPS
Corporation, et al.

d. The testimony61 and investigation report62 of Engr. Tolentino which details the test calls he made using Mabuhay card
with PIN code number 349 4374802. This is a different Mabuhay card than what was used by PLDT in its application
 for the subject search warrants. According to his investigation report, the telephone lines subscribed by Philip Yap
and/or HPS Corporation were indeed utilized for illegal ISR operations.

e. The testimony63 of Police Officer Narciso Ouano, Jr. (Officer Ouano) of the Legal and Investigation Division of the
PAOCTF given during the hearing on the application for the issuance of the subject search warrants wherein Officer
Ouano averred that, upon complaint of PLDT, the PAOCTF conducted surveillance operations which yielded positive
results that HPS Corporation, et al. were engaged in illegal ISR activities.

f. The results of a traffic study64 conducted by PLDT on the twenty (20) direct telephone lines subscribed by Philip Yap
and/or HPS Corporation which detailed the extent of the losses suffered by PLDT as a result of the illegal ISR activities
conducted by HPS Corporation, et al.

Taken together, the aforementioned pieces of evidence are more than sufficient to support a finding that test calls were indeed
made by PLDT’s witnesses using Mabuhay card with PIN code number 332 1479224 and, more importantly, that probable cause
necessary to engender a belief that HPS Corporation, et al. had probably committed the crime of Theft through illegal ISR
activities exists. To reiterate, evidence to show probable cause to issue a search warrant must be distinguished from proof
beyond reasonable doubt which, at this juncture of the criminal case, is not required.

With regard to the issue of whether or not the subject search warrants are in the nature of general warrants, PLDT argues that,
contrary to the ruling of the former Eighteenth Division of the Court of Appeals in its assailed Decision dated April 8, 2005 in
CA-G.R. CV No. 75838, the subject search warrants cannot be considered as such because the contents of both stated, with
sufficient particularity, the place to be searched and the objects to be seized, in conformity with the constitutional and
jurisprudential requirements in the issuance of search warrants. On the other hand, HPS Corporation, et al. echoes the
declaration of the Court of Appeals that the language used in the subject search warrants are so all-embracing as to include
all conceivable records and equipment of HPS Corporation regardless of whether they are legal or illegal.

We rule that PLDT’s argument on this point is well taken.

A search warrant issued must particularly describe the place to be searched and persons or things to be seized in order for it
to be valid,65 otherwise, it is considered as a general warrant which is proscribed by both jurisprudence and the 1987
Constitution.

In Uy Kheytin v. Villareal,66 we explained the purpose of the aforementioned requirement for a valid search warrant, to wit:

[A] search warrant should particularly describe the place to be searched and the things to be seized. The evident purpose and
intent of this requirement is to limit the things to be seized to those, and only those, particularly described in the search
warrant – x x x what articles they shall seize, to the end that "unreasonable searches and seizures" may not be made, - that
abuses may not be committed. x x x

In Bache & Co. (Phil.), Inc. v. Ruiz,67 we held that, among other things, it is only required that a search warrant be specific as
far as the circumstances will ordinarily allow, such that:

A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as the
circumstances will ordinarily allow; or when the description expresses a conclusion of fact – not of law - by which the warrant
officer may be guided in making the search and seizure; or when the things described are limited to those which bear direct
relation to the offense for which the warrant is being issued. x x x. (Citations omitted.)

The disputed text of the subject search warrants reads as follows:

a. LINES, CABLES AND ANTENNAS or equipment or device capable of transmitting air waves or frequency, such as an
IPL and telephone lines and equipment;

b. COMPUTERS or any equipment or device capable of accepting information applying the described process of the
information and supplying the result of this processes;

c. MODEMS or any equipment or device that enables data terminal equipment such as computers to communicate with
each other data-terminal equipment via a telephone line;

d. MULTIPLEXERS or any equipment or device that enables two or more signals from different sources to pass through
a common cable or transmission line;

e. SWITCHING EQUIPMENT or equipment or device capable of connecting telephone lines;

f. SOFTWARE, DISKETTES, TAPES, OR EQUIPMENT, or device used for recording and storing information; and

g. Manuals, phone cards, access codes, billing statements, receipts, contracts, checks, orders, communications, and
documents, lease and/or subscription agreements or contracts, communications and documents pertaining to securing
and using telephone lines and or equipment in relation to Mr. Yap/HPS’ ISR Operations.

Utilizing the benchmark that was previously discussed, this Court finds that the subject search warrants are not general
warrants because the items to be seized were sufficiently identified physically and were also specifically identified by stating
their relation to the offenses charged which are Theft and Violation of Presidential Decree No. 401 through the conduct of illegal
ISR activities.

Lastly, on the issue of whether or not the release of the items seized by virtue of the subject search warrants was proper, this
Court rules in the negative.
We quote with approval the disquisition of the Court of Appeals on this particular issue in its assailed Decision dated March 26,
2004 in CA-G.R. SP No. 65682, to wit:

Although there was no separate order from the respondent judge directing the immediate release of the seized items, such
directive was already contained in the Joint Order dated May 23, 2001. The dispositive portion of the assailed Joint Order
reads:

"WHEREFORE, premises considered, the motion to quash the search warrants and return the things seized is hereby granted.
Search Warrant Nos. 2000-10-467 and 2000-10-468 are ordered quashed. The things seized under the said search warrants
are hereby ordered to be immediately returned to the respondent HPS Software and Communication Corporation.

SO ORDERED."

As properly pointed out by the petitioner PLDT, the May 23, 2001 Joint Order of the respondent judge is not "immediately
executory". It is a final order which disposes of the action or proceeding and which may be the subject of an appeal. Section
1, Rule 39 of the 1997 Rules of Civil Procedure provides:

"Section 1. Execution upon judgments or final orders – Execution shall issue as a matter of right, on motion, upon judgment
or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom, if no appeal has been
duly perfected.

xxxx

From the foregoing, it is clear that execution may issue only upon motion by a party and only upon the expiration of the period
to appeal, if no appeal has been perfected. Otherwise, if an appeal has been duly perfected, the parties would have to wait for
the final resolution of the appeal before it may execute the judgment or final order – except for instances where an execution
pending appeal is granted by the proper court of law.

It would appear that despite the absence of any motion for execution, the respondent judge enforced his Joint Order by
directing the release of the seized items from the physical custody of the PNP Special Task Force on June 5, 2001 – less than
the fifteen-day prescribed period within which an aggrieved party may file an appeal or for such Joint Order to become final
and executory in the absence of an appeal. Clearly the release of the seized items was enforced prematurely and without any
previous motion for execution on record.

We cannot give weight to the argument that the seized items were voluntarily released by the PNP Special Task Force, and
thus, with such voluntary implementation of the May 23, 2001 Joint Order, the latter is already final and executed.

We take note that the PNP Special Task Force only retained physical custody of the seized items.1âwphi1 However, it was
clearly the respondent judge who ordered and released said seized items with his directive in the May 23, 2001 Joint Order.
The PNP Special Task Force could not release the said items without the directive and authority of the court a quo. Hence, such
compliance cannot be deemed voluntary at all.

From the foregoing discussion, it is apparent that the respondent judge’s directive in the May 23, 2001 Joint Order for the
immediate return of the seized items to the respondent HPS was enforced prematurely and in grave abuse of discretion. Clearly,
the Joint Order dated May 23, 2001 was not yet final and executory when it was implemented on June 5, 2001. Moreover, a
motion for execution filed by the interested party is obviously lacking. Thus, this Court concludes that there is no legal basis
for the implementation of the May 23, 2001 Joint Order when the seized items were released on June 5, 2001.68

In all, we agree with the former Fourth Division of the Court of Appeals that there was indeed grave abuse of discretion on the
part of the trial court in the premature haste attending the release of the items seized.

WHEREFORE, premtses considered, the petition of HPS Corporation, et al. in G.R. No. 170217 is DENIED for lack of merit.
The petition ofPLDT in G.R. No. 170694 is GRANTED. The assailed Decision dated April 8, 2005 as well as the Resolution dated
December 7, 2005 of the Court of Appeals in CA-G.R. CV No. 75838 are hereby REVERSED and SET ASIDE. No costs.