Specpro Fullcases 2.0

List of Cases:
GUARDIANSHIP
1. Hernandez v. San Juan-Santos, G.R. No. 166470, August 7, 2009, 595 SCRA 464.
2. Francisco v. Court of Appeals, G.R. 57438, January 31, 1984, 127 SCRA 371.
3. People v. Watiwat, G.R. No. 139400, September 3, 2003, 410 SCRA 324.
4. Alamayri v. Pabare, G.R. No. 151243, April 30, 2008, 553 SCRA 147.
5. Gorostiaga v. Sarte, 68 Phil. 4 (1939).
6. Alamayri v. Pabale, G.R. No. 151243, April 30, 2008, 553 SCRA 146.
7. Rep. Act No. 7610, Sec. 3(a).
8. Uy v. Court of Appeals, G.R. No. 109557, November 29, 2000, 346 SCRA 247.
9. Catalan et. al., v. Basa, G.R. No. 159567, July 31, 2007, 528 SCRA 645.
10. People v. Watiwat, G.R. No. 139400, September 3, 2003, 410 SCRA 324.
11. Parco v. Court of Appeals, G.R. No. 33152, January 30, 1982, 111 SCRA 262.
12. Lopez v. Teodoro, 86 Phil 499 (1950).
13. Francisco v. Court of Appeals, G.R. No. 57438, January 3, 1984, 127 SCRA 371.
14. Vancil v. Belmes, G.R. No. 132233, June 19, 2001, 358 SCRA 707
15. A.M. No. 08-4-1-SC, Re: Inhibition and/or Disqualification of Clerks of Court in all levels under Sec. 1,
16. Canon III of the Code of Conduct of Court Personnel, June 3, 2008.; RULES OF COURT, Rule 137, Sec. 1.
17. 275 Id.
18. 276 Francisco v. Court of Appeals, G.R. No. 57438, January 31, 1984, 127 SCRA 371.
19. Gonzales v. Aguinaldo, G.R. No. 74769, September 28, 1990, 190 SCRA 112;
20. In the matter of the guardianship of Carmen Padilla Vda. De Bengson v. Philippine National Bank, G.R. No. 17066,
December 28, 1961, 3 SCRA 751.
ADOPTION
1. Office of the Court Administrator v. Gines, A.M. No. RTJ-92-802, July 5, 1993, 224 SCRA 261.
2. Republic of the Philippines v. Court of Appeals and Maximo Wong, G.R. No. 97906, May 21, 1992, 209 SCRA 189.
3. In the Matter of Adoption of Stephanie Nathy Astorga, G.R. No. 148311, March 31, 2005, 454 SCRA 541.
4. Lahom v. Sibulo, G.R. No.143989, July 14, 2003, 406 SCRA 135.
5. Landingin v. Republic, G.R. No. 164948, June 27, 2006, 493 SCRA 415
6. G.R. No. 97906 May 21, 1992, REPUBLIC OF THE PHILIPPINES, petitioner,  vs. COURT OF APPEALS and MAXIMO
WONG, respondents.
7. G.R. No. 79955 January 27, 1989, IN THE MATTER OF THE PETITION FOR A WRIT OF HABEAS CORPUS OF MINOR
ANGELIE ANNE C. CERVANTES, NELSON L. CERVANTES and ZENAIDA CARREON CERVANTES, petitioners, vs. GINA
CARREON FAJARDO and CONRADO FAJARDO, respondents.
8. G.R. No. 197099, September 28, 2015, EUGENIO SAN JUAN GERONIMO, PETITIONER, VS. KAREN SANTOS,
RESPONDENT.
9.
TRUSTEES
1. Separate concurring opinion of Mr. Justice Antonio T. Carpio in the case of Iglesia Evangelica Metodista en las Islas Filipinas
(IEMELIF) v. Bishop Lazaro, et. al., G.R. No. 184088, July 6, 2010.
2. Second Division, G.R. No. 179096, February 06, 2013, Joseph Goyanko, Jr., As Administrator Of The Estate Of Joseph
Goyanko, Sr., Petitioner, Vs. United Coconut Planters Bank, Mango Avenue Branch, Respondent.
3. Andrada v. Pilhino Sales Corporation, G.R. No. 156448, February 23, 2011, 644 SCRA 1, 8-9;
4. Philippine Commercial International Bank v. Balmaceda, G.R. No. 158143, September 21, 2011, 658 SCRA 33, 42-43;
5. Lorzano v. Tabayag, Jr., G.R. No. 189647, February 6, 2012, 665 SCRA 38, 46-47;
6. Republic v. De Guzman, G.R. No. 175021, June 15, 2011, 652 SCRA 101, 113.
7. Heirs of Pacencia Racaza, etc. v. Spouses Florencio Abay-abay, et al., G.R. No. 198402, June 13, 2012.
8. Morla v. Belmonte, G.R. No. 171146, December 7, 2011, 661 SCRA 717, 727.
9. Peña v. Tolentino, G.R. Nos. 155227-28, February 9, 2011, 642 SCRA 310, 323.
10. Estate of Margarita D. Cabacungan v. Laigo, G.R. No. 175073, August 15, 2011, 655 SCRA 366, 376.
11. Philippine National Bank v. Aznar, G.R. Nos. 171805 and 172021, May 30, 2011, 649 SCRA 214, 230;
12. Torbela v. Rosario, G.R. Nos. 140528 and 140553, December 7, 2011, 661 SCRA 633, 661.
13. Metropolitan Bank & Trust Company, Inc. v. Board of Trustees of Riverside Mills Corporation Provident and Retirement
Fund, G.R. No. 176959, September 8, 2010, 630 SCRA 350, 357.
14. G.R. No. 196023, April 21, 2014, JOSE JUAN TONG, ET AL., PETITIONERS, VS. GO TIAT KUN, ET AL.,
RESPONDENTS.
PROCEEDINGS FOR THE HOSPITALIZATION OF INSANE PERSONS
People of the Philippines v. Dungo, G.R. No. 89420, July 31, 1991, 199 SCRA 860
GUARDIANSHIP
1. G.R. No. 166470 CECILIO C. HERNANDEZ, MA. VICTORIA C. HERNANDEZ- SAGUN, TERESA C. HERNANDEZ-
VILLA ABRILLE[1] and NATIVIDAD CRUZ-HERNANDEZ, Petitioners, - v e r s u s - JOVITA SAN JUAN-SANTOS,
Respondent.
x---------------------x
G.R. No. 169217 CECILIO C. HERNANDEZ, MA. VICTORIA C. HERNANDEZ-SAGUN and TERESA C. HERNANDEZ-VILLA
ABRILLE, Petitioners,- v e r s u s - JOVITA SAN JUAN-SANTOS,[2] Respondent. Promulgated: August 7, 2009
x--------------------------------------------------x
DECISION
CORONA, J.:
Maria Lourdes San Juan Hernandez (or Lulu) was born on February 14, 1947 to the spouses Felix Hernandez and Maria San
Juan Hernandez. Unfortunately, the latter died due to complications during childbirth. After Maria's death, Felix left Lulu in
the care of her maternal uncle, Sotero C. San Juan.
Special Proceedings (2sem2017-18) mgb 1
On December 16, 1951, Felix married Natividad Cruz. The union produced three children, petitioners Cecilio C. Hernandez,
Ma. Victoria C. Hernandez-Sagun and Teresa C. Hernandez-Villa Abrille.
Meanwhile, as the only child of Maria and the sole testate heir of Sotero, Lulu inherited valuable real properties from the
San Juan family (conservatively estimated at P50 million in 1997).
Sometime in 1957, Lulu went to live with her father and his new family. She was then 10 years old and studying at
La Consolacion College. However, due to her violent personality, Lulu stopped schooling when she reached Grade 5.
In 1968, upon reaching the age of majority, Lulu was given full control of her estate. [3] Nevertheless, because Lulu
did not even finish her elementary education, Felix continued to exercise actual administration of Lulus properties. Upon
Felix's death in 1993, petitioners took over the task of administering Lulu's properties.
During the period of their informal administration (from 1968 until 1993), Felix and petitioners undertook various
projects involving Lulus real properties. In 1974, Felix allegedly purchased one of Lulus properties for an undisclosed
amount to develop the Marilou Subdivision.[4] In 1995, Ma. Victoria informed Lulu that her 11-hectare Montalban, Rizal
property[5] was under litigation. Thus, Lulu signed a special power of attorney[6] (SPA) believing that she was authorizing
Ma. Victoria to appear in court on her behalf when she was in fact unknowingly authorizing her half-sister to sell the said
property to the Manila Electric Company for P18,206,400.[7] Thereafter, Cecilio asked Lulu to authorize him to lease her 45-
hectare property in Montalban, Rizal to Oxford Concrete Aggregates for P58,500 per month so that she could have a car
and driver at her disposal.
In September 1998, Lulu sought the assistance of her maternal first cousin, respondent Jovita San Juan-Santos,
after learning that petitioners had been dissipating her estate. She confided to Jovita that she was made to live in the
basement of petitioners Montalban, Rizal home and was receiving a measly daily allowance of P400 for her food and
medication.
Respondent was appalled as Lulu was severely overweight, unkempt and smelled of urine. She later found out that
Lulu was occupying a cramped room lit by a single fluorescent lamp without running water. Since she had not been given
a proper toilet, Lulu urinated and defecated in the garden. Due to Lulu's poor hygiene, respondent brought her to several
physicians for medical examination. Lulu was found to be afflicted with tuberculosis, rheumatism and diabetes from which
she was suffering several complications.[8]
Thereafter, the San Juan family demanded an inventory and accounting of Lulus estate from
petitioners.[9]However, the demand was ignored.
On October 2, 1998, respondent filed a petition for guardianship[10] in the Regional Trial Court (RTC) of San Mateo,
Rizal, Branch 76. She alleged that Lulu was incapable of taking care of herself and managing her estate because she was of
weak mind.
Subsequently, petitioners moved to intervene in the proceedings to oppose the same.

Natividad denied that Marilou Subdivision belonged to Lulu. Since she and her late husband were the registered
owners of the said property, it was allegedly part of their conjugal partnership.
Cecilio, Teresa and Ma. Victoria, for their part, claimed that the issue of Lulus competency had been settled in
1968 (upon her emancipation) when the court ordered her legal guardian and maternal uncle, Ciriaco San Juan, to deliver
the properties for her to manage.
They likewise asserted that Lulu was literate and, for that reason, aware of the consequences of executing an SPA.
Furthermore, whether or not Cecilio and Ma. Victoria acted within the scope of their respective authorities could not be
determined in a guardianship proceeding, such matter being the proper subject of an ordinary civil action.
Petitioners also admitted that the property developed into the Marilou Subdivision was among those parcels of
land Lulu inherited from the San Juan family. However, because the sale between Felix and Lulu had taken place in 1974,
questions regarding its legality were already barred by the statute of limitations. Thus, its validity could no longer be
impugned, or so they claimed.
During the hearing, Lulu was presented and asked to testify on her genealogy and experiences with the San Juan
and Hernandez families. Lulu identified and described her parents, stepmother, half-siblings and maternal relatives. She
claimed inheriting tracts of land from the San Juan family. However, these properties were dissipated by the Hernandez
family as they lived a luxurious lifestyle. When asked to explain this allegation, Lulu said that her stepmother and half-
siblings rode in cars while she was made to ride a tricycle.
Medical specialists testified to explain the results of Lulus examinations which revealed the alarming state of her
health.[11] Not only was Lulu severely afflicted with diabetes mellitus and suffering from its complications, [12] she also had
an existing artheroselorotic cardiovascular disease (which was aggravated by her obesity). Furthermore, they unanimously
opined that in view of Lulus intelligence level (which was below average) and fragile mental state, she would not be able to
care for herself and self-administer her medications.
In a decision dated September 25, 2001,[13] the RTC concluded that, due to her weak physical and mental
condition, there was a need to appoint a legal guardian over the person and property of Lulu. Thus, it declared Lulu an
incompetent and appointed respondent as guardian over the person and property of Lulu on a P1 million bond.
Petitioners moved for reconsideration asserting that the P1 million bond was grossly insufficient to secure
Lulus P50-million estate against fraudulent loss or dissipation.[14] The motion, however, was denied.[15]
On July 2, 2002, petitioners appealed the September 25, 2001 decision of the RTC to the Court of Appeals
(CA).
[16]
The appeal was docketed as CA-G.R. CV No. 75760.
On December 29, 2004, the CA issued a decision affirming the September 25, 2001 decision of the RTC (in the
petition for guardianship) in toto.[17] It held that respondent presented sufficient evidence to prove that Lulu, because of
her illnesses and low educational attainment, needed assistance in taking care of herself and managing her affairs
considering the extent of her estate. With regard to the respondents appointment as the legal guardian, the CA found
that, since Lulu did not trust petitioners, none of them was qualified to be her legal guardian. Because guardianship was a
trust relationship, the RTC was bound to appoint someone Lulu clearly trusted.
Petitioners now assail the December 29, 2004 decision of the CA in this Court in a petition for review on certiorari
docketed as G.R. No. 166470.[18]
Meanwhile, Lulu moved into 8 R. Santos St., Marikina City (Marikina apartment) and was provided with two
housemaids tasked to care for her. Sometime in November 2003, Lulu was abducted from her Marikina apartment. Jovita
immediately sought the assistance of the Police Anti-Crime Emergency Response (PACER) division of the Philippine
National Police.
The PACER subsequently discovered that petitioners were keeping Lulu somewhere in Rodriguez, Rizal. Despite
their initial hostility to the investigation, Ma. Victoria and Cecilio subsequently contacted the PACER to inform them that
Lulu voluntarily left with Natividad because her guardian had allegedly been maltreating her. [19]
On December 15, 2003, respondent filed a petition for habeas corpus[20] in the CA alleging that petitioners
abducted Lulu and were holding her captive in an undisclosed location in Rodriguez, Rizal.
On April 26, 2005, the CA granted the petition for habeas corpus, ruling that Jovita, as her legal guardian, was
entitled to her custody. [21]
Petitioners moved for the reconsideration of the said decision but it was denied in a resolution dated July 12,
2005.[22] Aggrieved, they filed this petition for review on certiorari docketed as G.R. No. 169217. This was consolidated with
G.R. No. 166470.
The basic issue in petitions of this nature is whether the person is an incompetent who requires the appointment
of a judicial guardian over her person and property.
Petitioners claim that the opinions of Lulu's attending physicians[23] regarding her mental state were inadmissible
in evidence as they were not experts in psychiatry. Respondent therefore failed to prove that Lulu's illnesses rendered her
an incompetent. She should have been presumed to be of sound mind and/or in full possession of her mental capacity.
For this reason, Lulu should be allowed to live with them since under Articles 194 to 196 of the Family Code,[24] legitimate
brothers and sisters, whether half-blood or full-blood are required to support each other fully.
Respondent, on the other hand, reiterated her arguments before the courts a quo. She disclosed that Lulu had
been confined in Recovery.com, a psychosocial rehabilitation center and convalescent home care facility in Quezon City,
since 2004 due to violent and destructive behavior. She also had delusions of being physically and sexually abused by Boy
Negro and imaginary pets she called Michael and Madonna.[25] The November 21, 2005 medical report [26] stated Lulu had
unspecified mental retardation with psychosis but claimed significant improvements in her behavior.
We find the petition to be without merit.
Under Section 50, Rule 103 of the Rules of Court, an ordinary witness may give his opinion on the mental sanity of a
person with whom he is sufficiently acquainted. [27] Lulu's attending physicians spoke and interacted with her. Such
occasions allowed them to thoroughly observe her behavior and conclude that her intelligence level was below average
and her mental stage below normal. Their opinions were admissible in evidence.
Furthermore, where the sanity of a person is at issue, expert opinion is not necessary. [28] The observations of the trial judge
coupled with evidence[29] establishing the person's state of mental sanity will suffice.[30] Here, the trial judge was given
ample opportunity to observe Lulu personally when she testified before the RTC.
Under Section 2, Rule 92 of the Rules of Court,[31] persons who, though of sound mind but by reason of age, disease, weak
mind or other similar causes are incapable of taking care of themselves and their property without outside aid, are
considered as incompetents who may properly be placed under guardianship. The RTC and the CA both found that Lulu
was incapable of taking care of herself and her properties without outside aid due to her ailments and weak mind. Thus,

since determining whether or not Lulu is in fact an incompetent would require a reexamination of the evidence presented
in the courts a quo, it undoubtedly involves questions of fact.
As a general rule, this Court only resolves questions of law in a petition for review. We only take cognizance of questions
of fact in exceptional circumstances, none of which is present in this case. [32] We thus adopt the factual findings of the RTC
as affirmed by the CA.
Similarly, we see no compelling reason to reverse the trial and appellate courts finding as to the propriety of respondent's
appointment as the judicial guardian of Lulu.[33] We therefore affirm her appointment as such. Consequently, respondent is
tasked to care for and take full custody of Lulu, and manage her estate as well. [34]
Inasmuch as respondents appointment as the judicial guardian of Lulu was proper, the issuance of a writ of habeas
corpus in her favor was also in order.
A writ of habeas corpus extends to all cases of illegal confinement or detention or by which the rightful custody of person
is withheld from the one entitled thereto.[35] Respondent, as the judicial guardian of Lulu, was duty-bound to care for and
protect her ward. For her to perform her obligation, respondent must have custody of Lulu. Thus, she was entitled to a writ
of habeas corpus after she was unduly deprived of the custody of her ward.[36]
WHEREFORE, the petitions are hereby DENIED.
Petitioners are furthermore ordered to render to respondent, Lulus legal guardian, an accurate and faithful accounting of
all the properties and funds they unlawfully appropriated for themselves from the estate of Maria Lourdes San Juan
Hernandez, within thirty (30) days from receipt of this decision. If warranted, the proper complaints should also be filed
against them for any criminal liability in connection with the dissipation of Maria Lourdes San Juan Hernandezs estate and
her unlawful abduction from the custody of her legal guardian.
Treble costs against petitioners.
SO ORDERED.
2. G.R. No. L-57438 January 3, 1984 FELICIANO FRANCISCO, petitioner,

vs. HON. COURT OF APPEALS and PELAGIO FRANCISCO, respondents.
GUERRERO, J.:
This petition for review on certiorari seeks the annulment of the decision and resolution of the defunct Court of Appeals,
now Intermediate Appellate Court, dated April 27, 1981. and June 26, 1981. respectively, dismissing the petition for
certiorari filed by petitioner Feliciano Francisco docketed as CA-G.R. No. 12172 entitled "Feliciano Francisco versus Judge
Jesus R. De Vega and Pelagio Francisco". In the said petition for certiorari, petitioner Feliciano Francisco challenged the
validity of the Order of the Court of First Instance of Bulacan, Fifth Judicial District, Branch II, now Regional Trial Court,
granting execution pending appeal of its decision by relieving petitioner Feliciano Francisco as guardian of incompetent
Estefania San Pedro and appointing respondent herein, Pelagio Francisco, in his instead.
The antecedent facts as recited in the appealed decision of the Court of Appeals showed that:
Petitioner is the duly appointed guardian of the incompetent Estefania San Pedro in Special Proceedings
No. 532 of the Court of First Instance of Bulacan presided over by respondent Judge. On August 30, 1974
respondent Pelagio Francisco, claiming to be a first cousin of Estefania San Pedro, together with two
others, said to be nieces of the incompetent, petitioned the court for the removal of petitioner and for the
appointment in his stead of respondent Pelagio Francisco. Among other grounds, the petition was based
on the failure of the guardian to submit an inventory of the estate of his ward and to render an
accounting.
It would seem that petitioner subsequently rendered an accounting but failed to submit an inventory, for
which reason the court on March 20, 1975 gave petitioner ten (10) days within which to do so, otherwise
he would be removed from guardianship Petitioner thereafter submitted an inventory to which
respondent Pelagio Francisco filed an objection on the ground that petitioner actually received P14,000.00
for the sale of a residential land and not P12,000.00 only as stated in the deed of sale and reported by him
in his inventory. The respondent Judge found the claim to be true, and, in his order of April 17, 1980
relieved the petitioner as guardian.
On motion of petitioner, however, the respondent Judge reconsidered his finding, relying on the deed of
sale as the best evidence of the price paid for the sale of the land. in his order dated September 12, 1980,
respondent judge acknowledged that his finding was "rather harsh and somewhat unfair to the said
guardian." Nevertheless, respondent Judge ordered the retirement of petitioner on the ground of old age.
The order states in part as follows:

"... considering the rather advanced age of the present guardian, this Court is inclined and
so decrees, that he should nevertheless be, as he is hereby, retired to take effect upon the
appointment by this court and the assumption of office of his replacement, who shall be
taken from the recommendees of the parties herein. For this purpose, the present
guardian is hereby given twenty (20) days from receipt of a copy of this order within
which to submit his proposal for a replacement for himself and to comment on
petitioner's recommendee and the latter a like period within which to comment on the
present guardian's proposed substitute, after which the matter will be deemed submitted
for resolution and final action by the court.
SO ORDERED."
Petitioner filed a motion for reconsideration, contending that he was only 72 years of age and still fit to
continue with the management of the estate of his ward as he had done with zeal for the past twelve
years. In an order dated November 13, 1980 the court denied his motion. Accordingly, on December 17,
1980, petiti/ner filed a notice of appeal 'from the order issued by the court on November 13, 1980' and
paid the appeal bond. On February 2, 1981 he filed the record on appeal. 1
Meanwhile, on January 27, 1981, the court, on motion of private respondent, required petitioner to submit
within three days his nomination for guardian of Estefania San Pedro as required in its order of September
12, 1980. In issuing the order, the court stated that 'an indefinite discontinuance in office would defeat the
intent and purpose of the said order of September 12, 1980 relieving the present guardian.
Petitioner's motion for reconsideration was denied. Hence, this petition. (referring to CA-G.R. No. SP-
1217)"
On December 5, 1980, before the appeal was perfected, Pelagio Francisco filed an "Omnibus Motion" with the court a quo
with the prayer (1) to restrain guardian from exercising office; (2) order guardian to surrender to court all properties of the
ward; and (3) appoint new guardian . 2
Petitioner, on December 9, 1980 filed his opposition to the omnibus motion claiming that the same was premature. 3The
trial court, however, disregarded the opposition and required petitioner on January 27, 1981 to submit within three (3)
days his nomination for guardian of Estefania San Pedro as required in its order of September 12, 1980, the court holding
that "an indefinite continuance in office would defeat the intent and purpose of the said order of September 12, 1980,
relieving the present guardian." 4
Petitioner moved for reconsideration of the said order, 5 but the trial court overruled the same on March 4, 1981.
Subsequently, on March 11, 1981, 6 the court a quo appointed respondent Pelagio Francisco as the new guardian of the
person and property of the incompetent Estefania San Pedro. 7
On March 13, 1981, petitioner filed with the defunct Court of Appeals a petition for certiorari challenging the validity of
the order of the trial court granting the execution pending appeal of its decision and appointing respondent Pelagio
Francisco as the new guardian despite the fact that respondent is five (5) years older than petitioner, docketed as CA-G.R.
No. 12172.
The Court of Appeals dismissed the petition on April 23, 1981, the pertinent portion of its decision reading as follows:
The Rules of Court authorizes executions pending appeal "upon good reasons to be stated in a special
order." (Rule 39, Sec. 2). In the case at bar, the retirement of petitioner was ordered on the ground of old
age. When this ground is considered in relation to the delay of the petitioner in the making of an
accounting and the submission of an inventory, the order amounts to a finding that petitioner,
considering his "rather advanced age," was no longer capable of managing the estate of his ward. Rule 97,
Sec. 2). Given this finding, it is clear that petitioner's continuance in office would not be in the best interest
of the ward.
It is of course true that the order of removal is not yet final. Considering the time -it normally takes for
appeals to be finally determined as well as the purpose of the order under appeal, which would be
frustrated if it is not immediately executed, we cannot say that respondent acted with grave and
irreparable damage and that the order of September 12, 1980 is not yet final, petitioner has not
demonstrated that in ordering execution pending appeal, the respondent Judge committed a grave abuse
of discretion.
Indeed, the granting of execution pending appeal ties within the sound discretion of a court. Appellate
courts win not interfere to discretion, unless it modify control or inquire into the exercise of this be shown
that there has been an abuse of that discretion. (2 Moran, Comments on the Rules of Court, 260 [1979].
WHEREFORE, the petition for certiorari is DISMISSED, without pronouncement as to costs.

SO ORDERED. 8
Petitioner subsequently filed another motion for reconsideration advancing the following arguments: that to grant
execution pending appeal would render petitioner's appeal moot and academic that "advanced age" was not one of the,
grounds raised by private respondent in the court below; that the court a quo abuse its discretion in appointing
respondent as guardian despite the fact that private respondent is five (5) years older than petitioner. 9
The respondent appellate court, in its resolution dated June 26, 1981, denied petitioner's motion for reconsideration, the
court finding it unnecessary to repeat the discussion of the arguments which it had already considered and only
entertained the argument regarding the competency of the respondent as the new guardian. On this point, respondent
Court ruled:
The order of March 11, 1981 appointing respondent Francisco as guardian was never assailed in the
petition in this case. As already stated, this case concerns the validity only of the orders of January 27,
1981 and March 4, 1981 which required petitioner to recommend his own replacement, otherwise the
court would appoint a new guardian. It does not appear that petitioner objected to the appointment of
respondent Francisco on the ground now invoked, namely, that Francisco is in fact older than petitioner.
Nor does it appear that petitioner filed a motion for reconsideration of the order of March 11, 1981,
calling attention to the fact that respondent Francisco is older than petitioner, In short, the point now
raised does not appear to have been urged in the lower court so that the latter could have rectified the
error, if it was error at all, For this reason, it is not proper ground for certiorari before this Court, much less
for a motion for reconsideration.
WHEREFORE, the motion for reconsideration is DENIED for lack of merit.
SO ORDERED. 10
In the petition at bar, petitioner contends that (a) The Honorable Court of Appeals has committed grave abuse of
discretion in holding that the removal of petitioner as guardian of the ward Estefania San Pedro on the ground of old age
is a good ground for the execution of the decision pending appeal; and (b) The Honorable Court of Appeals committed
grave misapprehension and misinterpretation of facts when it declared that petitioner did not question the appointment
of private respondent as guardian in his stead on the ground that the latter is older than the former by five (5) years.
A guardianship is a trust relation of the most sacred character, in which one person, called a "guardian" acts for another
called the "ward" whom the law regards as incapable of managing his own affairs.11 A guardianship is designed to further
the ward's well-being, not that of the guardian, It is intended to preserve the ward's property, as wen as to render any
assistance that the ward may personally require. It has been stated that while custody involves immediate care and
control, guardianship indicates not only those responsibilities, but those of one in loco parentis as well. 12
Having in mind that guardianship proceeding is instituted for the benefit and welfare of the ward, the selection of a
guardian must, therefore, suit this very purpose. Thus, in determining the selection of a guardian, the court may consider
the financial situation, the physical condition, the sound judgment, prudence and trustworthiness, the morals, character
and conduct, and the present and past history of a prospective appointee, as wen as the probability of his, being able to
exercise the powers and duties of guardian for the full period during which guardianship will be necessary. 13
A guardian is or becomes incompetent to serve the trust if he is so disqualified by mental incapacity, conviction of crime,
moral delinquency or physical disability as to be prevented from properly discharging the duties of his office. 14 A
guardian, once appointed may be removed in case he becomes insane or otherwise incapable of discharging his trust or
unsuitable therefor, or has wasted or mismanaged the estate, or failed for thirty (30) days after it is due to render an
account or make a return.15
We agree with the trial court and the appellate court that there is need for petitioner Feliciano Francisco to be retired from
the guardianship over the person and property of incompetent Estefania San Pedro. The conclusion reached by the trial
court about the "rather advanced age" of petitioner at 72 years old (petitioner is now 76 years old) finding him unfit to
continue the trust cannot be disturbed. As correctly pointed out by the appellate court, this finds direct support in the
delay of the accounting and inventory made by petitioner. To sustain petitioner as guardian would, therefore, be
detrimental to the ward. While age alone is not a control criterion in determining a person's fitness or qualification to be
appointed or be retained as guardian, it may be a factor for consideration. 16
Considering the difficult and complicated responsibilities and duties of a guardian, We sustain the immediate retirement
of petitioner Feliciano Francisco as guardian, affirming thereby the rulings of both the trial court and the appellate court.
With respect to the issue of execution pending appeal in appointing respondent Pelagio Francisco as guardian to succeed
petitioner while the latter's appeal was still pending, We hold and rule that respondent appellate court correctly sustained
the propriety of said execution pending appeal. Upon urgent and compelling reasons, execution pending appeal is a
matter of sound discretion on the part of the trial court, 17 and the appellate court will not interfere, control or inquire
into the exercise of this discretion, unless there has been an abuse thereof, 18 which We find none herein.

Inasmuch as the primary objective for the institution of guardianship is for the protection of the ward, there is more than
sufficient reason for the immediate execution of the lower court's judgment for the replacement of the first guardian. We
agree with the reason given by the appellate court in sustaining execution pending appeal that "an indefinite continuance
in office would defeat the intent and purpose of the order of September 12, 1980, relieving the present guardian (Feliciano
Francisco)."
As to the issue concerning the appointment of respondent Pelagio Francisco as the new guardian, We likewise agree with
the respondent appellate court in denying in its resolution of June 26, 1981 for lack of merit the motion for
reconsideration filed by petitioner questioning the appointment of private respondent Pelagio Francisco. We also find no
abuse of discretion committed by the appellate court.
The rule is well-established that appellate courts may not entertain issues brought before it for the first time on appeal.
(Jose Matienzo vs. Martin Servidad, 107 SCRA 276; Garcian vs. Court of Appeals, 102 SCRA 597; Director of Lands vs. Dano
96 SCRA 160).
WHEREFORE, IN VIEW OF THE FOREGOING, the assailed decision and resolution of the respondent court dated April 27,
1981 and June 26, 1981, respectively, are hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
3. [G.R. No. 139400. September 3, 2003] PEOPLE OF THE PHILIPPINES, appellee, vs. MAURICIO
WATIWAT, appellant.
SANDOVAL-GUTIERREZ, J.:
Rape is a repulsive crime done only by the most morally depraved individuals. When committed against a child of
tender years, especially against an orphan born with nothing but hope and yearning for affection, the despicable lechery
swells into manifest heartlessness that must be condemned.
For automatic review is the Decision[1] dated April 22, 1999 of the Regional Trial Court of Pinamalayan, Oriental
Mindoro in Criminal Case No. P-5690, Branch 42, the dispositive portion of which states:
ACCORDINGLY, accused MAURICIO WATIWAT is hereby found GUILTY beyond reasonable doubt, as principal, of the
heinous crime of RAPE, defined and penalized under Art. 335 of the Revised Penal Code, as amended by R.A. 7659, and
hereby sentences him to suffer the supreme penalty of DEATH.
Additionally, accused is ordered to indemnify the victim MARITES WATIWAT, the amount of P50,000.00.
Let the complete record of this case together wit the transcript of stenographic notes be forwarded to the Honorable
Supreme Court, for automatic review pursuant to Sec. 10, Rule 122 of the Revised Rules of Court.
SO ORDERED.[2]
The accusatory portion of the Amended Information against appellant Mauricio Watiwat reads:
That on or about the month of March, 1996 and subsequent thereto in barangay Bato, municipality of Bansud, province of
Oriental Mindoro, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, with lewd
and unchaste design, by means of force, threat and intimidation, did then and there willfully, unlawfully and feloniously lay
with and have carnal knowledge of one MARITES WATIWAT, his 10-year-old niece living in his own house and therefore a
guardian and relative within the third civil degree, against her will and without her consent, to the damage and prejudice
of the Offended Party.
CONTRARY TO ART. 335 OF THE RPC, AS AMENDED BY R.A. 7659.[3]
Upon being arraigned, with the assistance of his counsel, appellant pleaded not guilty to the charge. Thereafter, trial
ensued.
Evidence for the prosecution shows that Marites Watiwat, complaining witness, was born on April 7, 1986, as shown
by her Certificate of Live Birth,[4] to her mentally deranged mother, Adoracion Areglado. Since her father was already dead,
appellant caused its registration and had Watiwat recorded as her surname. [5] Marites grew with the belief that he was her
uncle, being the husband of her mothers sister, Ineseria.
When Marites was one month old, she lived with appellant and his family in Bato, Bansud, Oriental Mindoro. When
she reached the age of three, her grandfather Cipriano Areglado took her under his custody in Batangas where she
studied. She returned to appellants house when she was already in Grade III.
In March 1996, while Marites was sleeping in the house of appellant, he brought her to another room and undressed
her.He then took off his clothes, placed himself on top of her and forcibly inserted his penis into her genitals. She felt
pain. She could only beg and mutter huwag. Her plea, however, was unheeded. Appellant succumbed to his lustful desires
and completely penetrated her private part, making a pumping motion. The incident was repeated several times. He

stopped molesting her only in November 1996 when her grandfather Cipriano brought her to Hilaria Amparos house at
Villapag-asa, Bansud.[6] Hilaria is Marites grandaunt, being Ciprianos sister.
Hilaria observed that Marites seemed to be always lost in her thoughts and would constantly complain of pains in her
stomach and head. On July 7, 1997, or after more than one (1) year from the incident, she finally revealed her harrowing
experience to Hilaria who immediately brought her to Dr. Preciosa Soller for examination. [7] She issued a Medico-Legal
Report[8]with the following findings:
1. Breasts not developed.

2. Perineum No pubic hair Labia majora not developed skin in labial area congested.
3. Hymen complete old healed lacerations at 6 oclock, 9 oclock, 11 oclock and 12 oclock.
Incomplete old healed laceration at 5 oclock and 3 oclock
REMARKS: Physical virginity lost
Thereafter, Hilaria reported the matter to the police.
Eventually, an Information for rape was filed against appellant.
Appellant vehemently denied the charge. He testified that prior to the incident, he and his children transferred their
residence from Bato, Bansud to Salcedo, also of the same town, after he separated from his live-in partner Ineseria
Areglado in 1992. As proof that he was then residing in Salcedo, he presented a bible, Transfer Form of Application of
Voters, and a Certification by the Commission on Elections attesting that he is a voter of Salcedo. While there, he
cultivated the farm of Alberto Evangelista.
Alberto corroborated appellants testimony.
Simeon Mores, the Barangay Captain of Barangay Batu, controverted appellants claim that he resided in Barangay
Salcedo from 1992-1998. Simeon presented the 1995 Census Files of Barangay Batu wherein appellant was enlisted as one
if its residents[9] and a yellow pad paper containing a mortgage agreement[10] between him and one Salustiano Gupit
prepared by Alfredo Gonzales, councilor of Barangay Batu.
In convicting appellant, the trial court held:
While there is delay in reporting the incident in question, the story Marites presented is credible and consistent. Her
testimony withstood the test of cross-examination and there is no cogent reason why she should not be believed as the
defense had not even shown any reason at all why a ten (10) year old Marites would fabricate a story of rape upon
herself and impute it to a person whom she looks up to as her very own father if her story were not true.
When there is no evidence to show any improper motive on the part of the prosecution witness to testify falsely against an
accused or to falsely implicate him in the commission of a crime, the logical conclusion is that no such improper motive
exists and that the testimony is worthy of full faith and credit ( People vs. Tabao, G.R. No. 111290, Jan. 30, 1995, 240 SCRA
758).
There is an explanation why there was such a delay. There is no one close to her and no shoulder to lean on so to speak,
except the accused himself. Marites had no family to cling to. Besides, accused and Marites are not strangers to each
other, the former being the guardian, while the latter the ward, living under he same roof. Had it not been for a mere
coincidence that she was taken by her Nanay Laling to live with her in her house, there could have no chance for Marites
to divulge her painful and horrifying ordeal. She could have kept for herself forever the humiliating secret. Thus, it would
not be proper to apply the norms of behavior expected under the circumstances from mature women.
A ten-year old girl, like Marites, unlike a mature woman, cannot be expected to have the courage and intelligence to
immediately report a sexual assault committed against her especially when the offender is one she looks up to as her very
own father.
Marites should be looked upon despite her minority considering her courage and determination to seek justice and plea
for redress for a crime of such a nature that is otherwise better left forgotten. She could have chosen to keep numb and
silent and forget the whole incident, but she did not. It is a clear manifestation of her intent to pursue her morbid cry for
the injustice committed against her, at the opportune time ( People vs. Guererro, 242 SCRA 606).
Where accused was positively identified by the victim of the rape herself who harbored no ill motive against the accused,
the defense of alibi must fail. (People vs. Canada, 253 SCRA 256)
Bare alibi and denial cannot prevail over the positive identification of the accused as the perpetrator of the crime. ( People
vs. Alimon, 257 SCRA 658) (People vs. Nazareno, 260 SCRA 256) (Emphasis supplied)
In his brief, appellant ascribes to the trial court the following errors:
THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY BEYOND REASONABLE DOUBT OF
THE CRIME, AS DEFINED AND PUNISHED UNDER ARTICLE 335 OF THE REVISED PENAL CODE, AS AMENDED BY R.A. 7659.

II
ASSUMING FOR THE SAKE OF ARGUMENT ONLY THAT THE ACCUSED-APPELLANT IS GUILTY AS CHARGED, THE TRIAL
COURT STILL ERRED IN IMPOSING THE SUPREME PENALTY OF DEATH. [11]
Appellant contends that Marites failure to report the matter immediately to the authorities casts doubt on her
credibility.Moreover, when the incident took place in March 1996, she was no longer living with his family in Bato,
Bansud. As early as 1992, her grandfather brought her to Batangas. He, on the other hand, transferred residence to
Barangay Salcedo. And even assuming that he is guilty of rape, the imposition of the death penalty upon him is erroneous
since the qualifying circumstance of relationship was not proved. Neither can he be considered her guardian. Thus, he
should not be convicted of qualified rape and that the penalty that should have been imposed against him should
be reclusion perpetua.
The law governing the instant case is Article 335 of the Revised Penal Code, as amended by Section 11 of Republic
Act No. 7659,[12] the pertinent portions of which provide:
SEC. 11. Article 335 of the same [Revised Penal] Code is hereby amended to read as follows:
Article 335. When and how rape is committed. Rape is committed by having carnal knowledge of a woman under any
of the following circumstances:
1. By using force or intimidation;
2. When the woman is deprived of reason or otherwise unconscious; and
3. When the woman is under twelve years of age or is demented.
The crime of rape shall be punished by reclusion perpetua.
xxx
The death penalty shall also be imposed if the crime of rape is committed with any of the following attendant
circumstances:
1. when the victim is under eighteen (18) years of age and the offender is a parent, ascendant, step-parent, guardian,
relative by consanguinity or affinity within the third civil degree, or the common-law-spouse of the parent of the
victim.
X x x (Emphasis supplied)
The trial court held that Marites was telling the truth when she testified that she was sexually abused by
appellant. We see no reason to differ from such finding.
For one, it is well entwined into the bedrock of our jurisprudence that the trial judges evaluation of the testimony of a
witness and its factual findings are accorded not only the highest respect, but also finality, unless some weighty
circumstance has been ignored or misunderstood which could alter the result of the judgment rendered. Given the direct
opportunity to observe the witness on the stand, the trial judge was in a vantage position to assess his demeanor and
determine if he was telling the truth or not.[13] Thus:
In the resolution of the factual issues, the Court relies heavily on the trial court for its evaluation of the witnesses and their
credibility. Having the opportunity to observe them on the stand, the trial judge is able to detect that sometimes thin line
between fact and prevarication that will determine the guilt or innocence of the accused. That line may not be discernible
from a mere reading of the impersonal record by the reviewing court. The record will not reveal those tell-tale signs that
will affirm the truth or expose the contrivance, like the angry flush of an insisted assertion or the sudden pallor of a
discovered lie or the tremulous mutter of a reluctant answer or the forthright tone of a ready reply. The record will not
show if the eyes have darted in evasion or looked down in confession or gazed steadily with a serenity that has nothing to
distort or conceal. The record will not show if tears were shed in anger, or in shame, or in remembered pain, or in feigned
innocence. Only the judge trying the case can see all these and on the basis of his observations arrive at an
informed and reasoned verdict.[14]
For another, complainant never wavered in her assertion that appellant raped her. Her testimony is clear, positive, and
convincing. Indeed, the fact of rape and the identity of appellant as the malefactor were sufficiently and convincingly
established by the prosecution through her straightforward narration, thus:
Q. Why did you file the case against your Kakang Muling or Mauricio Watiwat?
A. Because I was raped, sir.
Q. Do you still remember the date and month when you were raped by this Kakang Muling or Mauricio Watiwat?
A. It was in March, 1996, sir.

Q. In that particular month of March, 1996, how old were you if you still remember?
A. I was less than 10 years old, sir.
Q. Tell us how you were raped by your Kakang Muling or Mauricio Watiwat?
A. I was then living in his house and while I was sleeping beside with other children, I was carried by the accused
to the other room, sir.
Q. After you were lifted and carried to the other room, what else was done by your Ka Muling?
A. He took off my shorts and panty, sir.
Q. After your shorts and panty were removed by the accused, what else did he do if any?
A. He undressed himself and put himself on top of me, sir. (Naghubo po siya at pagkatapos ay pumatong sa
akin.)
FISCAL (Continuing):
Q. After he placed himself on top of you, what else did he do?
A. He insisted in inserting his penis inside me. (Pilit po niyang ipinasok ang kanyang ari sa akin.)
Q. When he forcibly tried to insert his penis to your body, what did you feel?
A. I was hurt, sir.
Q. And because you were hurt, what, if any, did you plea or say to your uncle?
A. I told him, huwag, but he continued to insert his penis in my private part, sir.
Q. Will you please tell the Court if your uncle Muling was successful in completely inserting his penis towards
your sexual organ?
A. Yes, sir.
Q. What else did your uncle Muling do after he was able to insert his penis to your sexual organ?
A. (No answer)
Note: After a few seconds she answered: Siya po ay nagkakayod. (He made a pumping motion.)[15]
Indeed, complainants testimony, stamped with consistency and accuracy, must be given full faith and credit.[16] When
a woman testifies that she has been raped, she says in effect, all that is necessary to show that rape has been committed,
for as long as her testimony meets the test of credibility.[17]
Also, Marites does not appear to have any strong reason or fiendish motive to fabricate such a grave charge against
appellant and thus expose herself and her family to shame and scandal. A victim of sexual assault would certainly not be
willing to undergo the humiliation of a public trial, let alone testify on the details of her torment, if she had reasons other
than her natural passion to avenge her honor and to decry a grave injustice done to her. [18] To be sure, complainants
testimony, which is untainted with any proof of ill motive, bears the hallmarks of truth.
For his part, appellant assails Marites inaction in reporting the crime for more than one year. It is not uncommon for
young girls to conceal for some time the assault against their virtue.[19] Barely out of childhood, Marites could be easily
intimidated and cowed into silence.[20] While it is true that it took her a long time to report her defloration, it must be
stressed that she was merely 10 years old when she was subjected to bestial abuse. Afraid and with no family to assist her,
she could not report the incident to the authorities. It was only when her grandaunt took care of her that she had the
courage to do so. Under the circumstances, it is unreasonable to judge her action by the norms of behavior expected of
mature individuals.[21] The delay in reporting the incident of rape ought not to be taken against her and cannot be used to
weaken her credibility.
Appellants defense merely consists of alibi and bare denial. His claim that he was residing in another place during the
incident does not persuade us. We have held that an accused who raises the defense of alibi must not only prove his
presence at another place at the time of commission of the crime, he must also establish that it would be physically
impossible for him to be at the scene of the crime during the incident. It must be observed that Barangay Salcedo and
Barangay Bato are both within the municipality of Bansud. Clearly, it is safe to conclude that it was not physically
impossible for him to be at the scene of the crime at that time.
Moreover, firmly established is the rule that alibi and denial are inherently weak and have always been viewed with
disfavor by the courts due to the facility with which they can be concocted.[22] Such defense warrants the least credibility or
none at all[23]and cannot prevail over the positive identification of the accused by the prosecution witness. [24] Denial is a
self-serving negative evidence that cannot be given greater weight than the declaration of a credible witness who testified
on affirmative matters.[25]
The prosecution has not only established beyond reasonable doubt that appellant had carnal knowledge of Marites,
it has likewise proved that, at the time the offense was committed, she was only 10 years old as shown by her Certificate of
Live Birth.Thus, appellant must be held guilty of statutory rape under paragraph 1, No. 3, Article 335 of the Revised Penal
Code, as amended by R.A. 7659, quoted earlier, the victim being under twelve years of age. It bears stressing that the

Information specifically alleges that Marites was 10 years old when appellant sexually abused her in March
1996. Consequently, he must be sentenced to reclusion perpetua.
The trial court imposed upon appellant the death penalty on the basis of its conclusion that he is her guardian. We
hold that the lower court erred in this point.
In People vs. Garcia,[26] we held:
In the law on rape, the role of a guardian is provided for in Article 344 of the Revised Penal Code, specifically as one who,
aside from the offended party, her parents or grandparents, is authorized to file the sworn written complaint to commence
the prosecution for that crime. In People vs. De la Cruz (59 Phil. 531 [1934]), it was held that the guardian referred to
in the law is either a legal or judicial guardian as understood in the rules on civil procedure.
xxx
It would not be logical to say that the word guardian in the third paragraph of Article 344 which is mentioned together
with parents and grandparents of the offended party would have a concept different from the guardian in the recent
amendments of Article 335 where he is also mentioned in the company of parents and ascendants of the victim. In Article
344, the inclusion of the guardian is only to invest him with the power to sign a sworn written complaint to initiate the
prosecution of four crimes against chastity, while his inclusion in the enumeration of the offenders in Article 335 is to
authorize the imposition of the death penalty on him. With much more reason, therefore, should the restrictive
concept announced in De la Cruz, that is, that he be a legal or judicial guardian, be required in the latter article.
The Court notes from the transcripts of the proceedings in Congress on this particular point that the formulators were not
definitive on the concept of guardian as it now appears in the attendant circumstances added to the original provisions of
Article 335 of the Code. They took note of the status of a guardian as contemplated in the law on rape but, apparently on
pragmatic considerations to be determined by the courts on an ad hoc basis, they agreed to just state guardian without
the qualification that he should be a legal or judicial guardian. It was assumed, however, that he should at the very least be
a de facto guardian.Indeed, they must have been aware of jurisprudence that the guardian envisaged in Article 335
of the Code, even after its amendment by Republic Act No. 4111, would either be a natural guardian, sometimes
referred to as a legal or statutory guardian, or a judicial guardian appointed by the court over the person of the
ward.
xxx
The law requires a legal or judicial guardian since it is the consanguineous relation or the solemnity of judicial
appointment which impresses upon the guardian the lofty purpose of his office and normally deters him from
violating its objectives. Such considerations do not obtain in appellants case or, for that matter, any person similarly
circumstanced as a mere custodian of a ward or anothers property. The fiduciary powers granted to a real guardian
warrant the exacting sanctions should he betray the trust. (Emphasis supplied)
A guardian is a person lawfully invested with the power and charged with the duty of taking care of the person and
managing the property and rights of another person who, for defect of age, understanding, or self-control, is considered
incapable of administering his own affairs.[27]
There are three kinds of guardians under the law: (a) the legal guardian, who is such by provision of law without the
need of judicial appointment, as in the case of the parents over the persons of their minor children, or the father, or in his
absence the mother, with respect to the property of the minor children not exceeding P50,000.00 in value;[28] (b) the
guardian ad litem, a competent person appointed by the court for purposes of a particular action or proceeding involving
a minor; and (c) the judicial guardian, one appointed by the court over the person and/or property of the ward to
represent the latter in all his civil acts and transaction.[29]
As shown by the facts in this case, appellant is not Marites guardian, whether natural, legal or judicial. That he allowed
his surname to be used as her surname in her Certificate of Live Birth is inconsequential. It appears that such arrangement
was merely upon Ciprianos request.
At most, appellant was only an uncommitted caretaker of Marites over a limited period of time. Clearly, he cannot be
considered a guardian falling within the ambit of the amendatory provision of Section 11, Republic Act No. 7659.
Neither is Marites the niece of appellant and hence, a relative within the third civil degree, as alleged in the
Information. The prosecution utterly failed to prove that appellant is legally married to Marites aunt. In fact, it did not
present the marriage contract between them to establish that Marites is appellants niece, a relative within the third civil
degree by affinity.Relationship, as a qualifying circumstance in rape, must not only be alleged clearly; it must also be
proved beyond reasonable doubt, just as the crime itself.[30]
In view of the failure of the prosecution to prove the qualifying circumstance of guardianship or relationship, it is
error for the trial court to convict appellant for qualified rape and impose upon him the supreme penalty of death.
Anent the award of damages, we observed that the trial court failed to award moral damages to Marites.
Moral damages are additionally awarded without need of pleading or proof of the basis thereof. [31] This is because it
is recognized that the victim's injury necessarily results from an abysmal crime to warrant by itself the award of moral

damages.The anguish and the pain she has to endure are evident. Indeed, the offended party in a rape case is a victim
many times over.In our culture, which puts a premium on the virtue of purity or virginity, rape stigmatizes the victim more
than the perpetrator.[32]
WHEREFORE, the appealed Decision dated April 22, 1999 of the Regional Trial Court, Branch 42, Pinamalayan,
Oriental Mindoro in Criminal Case No. P-5690, is MODIFIED in the sense that appellant MAURICIO WATIWAT is found
GUILTY beyond reasonable doubt of the crime of statutory rape and is hereby sentenced to suffer the penalty
of RECLUSION PERPETUA and to pay the victim Marites Watiwat P50,000.00 as moral damages, in addition to the civil
indemnity of P50,000.00 awarded by the trial court. Costs against appellant.
4. G.R. No. 151243 April 30, 2008 LOLITA R. ALAMAYRI, petitioner, vs. ROMMEL, ELMER, ERWIN, ROILER
and AMANDA, all surnamed PABALE, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court filed by petitioner Lolita R.
Alamayri (Alamayri) seeking the reversal and setting aside of the Decision,2 dated 10 April 2001, of the Court of Appeals in
CA-G.R. CV No. 58133; as well as the Resolution, 3 dated 19 December 2001 of the same court denying reconsideration of
its aforementioned Decision. The Court of Appeals, in its assailed Decision, upheld the validity of the Deed of Absolute
Sale, dated 20 February 1984, executed by Nelly S. Nave (Nave) in favor of siblings Rommel, Elmer, Erwin, Roiler and
Amanda, all surnamed Pabale (the Pabale siblings) over a piece of land (subject property) in Calamba, Laguna, covered by
Transfer Certificate of Title (TCT) No. T-3317 (27604); and, thus, reversed and set aside the Decision, 4 dated 2 December
1997, of the Regional Trial Court (RTC) of Pasay City, Branch 119 in Civil Case No. 675-84-C.5 The 2 December 1997
Decision of the RTC declared null and void the two sales agreements involving the subject property entered into by Nave
with different parties, namely, Sesinando M. Fernando (Fernando) and the Pabale siblings; and ordered the reconveyance
of the subject property to Alamayri, as Nave’s successor-in-interest.
There is no controversy as to the facts that gave rise to the present Petition, determined by the Court of Appeals to be as
follows:
This is a Complaint for Specific Performance with Damages filed by Sesinando M. Fernando, representing S.M.
Fernando Realty Corporation [Fernando] on February 6, 1984 before the Regional Trial Court of Calamba, Laguna
presided over by Judge Salvador P. de Guzman, Jr., docketed as Civil Case No. 675-84-C against Nelly S. Nave
[Nave], owner of a parcel of land located in Calamba, Laguna covered by TCT No. T-3317 (27604). [Fernando]
alleged that on January 3, 1984, a handwritten "Kasunduan Sa Pagbibilihan" (Contract to Sell) was entered into by
and between him and [Nave] involving said parcel of land. However, [Nave] reneged on their agreement when the
latter refused to accept the partial down payment he tendered to her as previously agreed because she did not
want to sell her property to him anymore. [Fernando] prayed that after trial on the merits, [Nave] be ordered to
execute the corresponding Deed of Sale in his favor, and to pay attorney’s fees, litigation expenses and damages.
[Nave] filed a Motion to Dismiss averring that she could not be ordered to execute the corresponding Deed of
Sale in favor of [Fernando] based on the following grounds: (1) she was not fully apprised of the nature of the
piece of paper [Fernando] handed to her for her signature on January 3, 1984. When she was informed that it was
for the sale of her property in Calamba, Laguna covered by TCT No. T-3317 (27604), she immediately returned to
[Fernando] the said piece of paper and at the same time repudiating the same. Her repudiation was further
bolstered by the fact that when [Fernando] tendered the partial down payment to her, she refused to receive the
same; and (2) she already sold the property in good faith to Rommel, Elmer, Erwin, Roller and Amanda, all
surnamed Pabale [the Pabale siblings] on February 20, 1984 after the complaint was filed against her but before
she received a copy thereof. Moreover, she alleged that [Fernando] has no cause of action against her as he is
suing for and in behalf of S.M. Fernando Realty Corporation who is not a party to the alleged Contract to Sell.
Even assuming that said entity is the real party in interest, still, [Fernando] cannot sue in representation of the
corporation there being no evidence to show that he was duly authorized to do so.
Subsequently, [the Pabale siblings] filed a Motion to Intervene alleging that they are now the land owners of the
subject property. Thus, the complaint was amended to include [the Pabale siblings] as party defendants. In an
Order dated April 24, 1984, the trial court denied [Nave’s] Motion to Dismiss prompting her to file a Manifestation
and Motion stating that she was adopting the allegations in her Motion to Dismiss in answer to [Fernando’s]
amended complaint.
Thereafter, [Nave] filed a Motion to Admit her Amended Answer with Counterclaim and Cross-claim praying that
her husband, Atty. Vedasto Gesmundo be impleaded as her co-defendant, and including as her defense undue
influence and fraud by reason of the fact that she was made to appear as widow when in fact she was very much
married at the time of the transaction in issue. Despite the opposition of [Fernando] and [the Pabale siblings], the
trial court admitted the aforesaid Amended Answer with Counterclaim and Cross-claim.

Still unsatisfied with her defense, [Nave] and Atty. Vedasto Gesmundo filed a Motion to Admit Second Amended
Answer and Amended Reply and Cross-claim against [the Pabale siblings], this time including the fact of her
incapacity to contract for being mentally deficient based on the psychological evaluation report conducted on
December 2, 1985 by Dra. Virginia P. Panlasigui, M. A., a clinical psychologist. Finding the motion unmeritorious,
the same was denied by the court a quo.
[Nave] filed a motion for reconsideration thereof asseverating that in Criminal Case No. 1308-85-C entitled
"People vs. Nelly S. Nave" she raised therein as a defense her mental deficiency. This being a decisive factor to
determine once and for all whether the contract entered into by [Nave] with respect to the subject property is null
and void, the Second Amended Answer and Amended Reply and Cross-claim against [the Pabale siblings] should
be admitted.
Before the motion for reconsideration could be acted upon, the proceedings in this case was suspended
sometime in 1987 in view of the filing of a Petition for Guardianship of [Nave] with the Regional Trial Court,
Branch 36 of Calamba, Laguna, docketed as SP No. 146-86-C with Atty. Vedasto Gesmundo as the petitioner. On
June 22, 1988, a Decision was rendered in the said guardianship proceedings, the dispositive portion of which
reads:
"Under the circumstances, specially since Nelly S. Nave who now resides with the Brosas spouses has
categorically refused to be examined again at the National Mental Hospital, the Court is constrained to
accept the Neuro-Psychiatric Evaluation report dated April 14, 1986 submitted by Dra. Nona Jean Alviso-
Ramos and the supporting report dated April 20, 1987 submitted by Dr. Eduardo T. Maaba, both of the
National Mental Hospital and hereby finds Nelly S. Nave an incompetent within the purview of Rule 92 of
the Revised Rules of Court, a person who, by reason of age, disease, weak mind and deteriorating mental
processes cannot without outside aid take care of herself and manage her properties, becoming thereby
an easy prey for deceit and exploitation, said condition having become severe since the year 1980. She
and her estate are hereby placed under guardianship. Atty. Leonardo C. Paner is hereby appointed as her
regular guardian without need of bond, until further orders from this Court. Upon his taking his oath of
office as regular guardian, Atty. Paner is ordered to participate actively in the pending cases of Nelly S.
Nave with the end in view of protecting her interests from the prejudicial sales of her real properties, from
the overpayment in the foreclosure made by Ms. Gilda Mendoza-Ong, and in recovering her lost jewelries
and monies and other personal effects.
SO ORDERED."
Both [Fernando] and [the Pabale siblings] did not appeal therefrom, while the appeal interposed by spouses
Juliano and Evangelina Brosas was dismissed by this Court for failure to pay the required docketing fees within the
reglementary period.
In the meantime, [Nave] died on December 9, 1992. On September 20, 1993, Atty. Vedasto Gesmundo, [Nave’s]
sole heir, she being an orphan and childless, executed an Affidavit of Self-Adjudication pertaining to his inherited
properties from [Nave].
On account of such development, a motion for the dismissal of the instant case and for the issuance of a writ of
execution of the Decision dated June 22, 1988 in SP No. 146-86-C (petition for guardianship) was filed by Atty.
Vedasto Gesmundo on February 14, 1996 with the court a quo. [The Pabale siblings] filed their Opposition to the
motion on grounds that (1) they were not made a party to the guardianship proceedings and thus cannot be
bound by the Decision therein; and (2) that the validity of the Deed of Absolute Sale executed by the late [Nave] in
their favor was never raised in the guardianship case.
The case was then set for an annual conference. On January 9, 1997, Atty. Vedasto Gesmundo filed a motion
seeking the court’s permission for his substitution for the late defendant Nelly in the instant case. Not long after
the parties submitted their respective pre-trial briefs, a motion for substitution was filed by Lolita R. Alamayre ( sic)
[Alamayri] alleging that since the subject property was sold to her by Atty. Vedasto Gesmundo as evidenced by a
Deed of Absolute Sale, she should be substituted in his stead. In refutation, Atty. Vedasto Gesmundo filed a
Manifestation stating that what he executed is a Deed of Donation and not a Deed of Absolute Sale in favor of
[Alamayri] and that the same was already revoked by him on March 5, 1997. Thus, the motion for substitution
should be denied.
On July 29, 1997, the court a quo issued an Order declaring that it cannot make a ruling as to the conflicting
claims of [Alamayri] and Atty. Vedasto Gesmundo. After the case was heard on the merits, the trial court rendered
its Decision on December 2, 1997, the dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered as follows:
1. Declaring the handwritten Contract to Sell dated January 3, 1984 executed by Nelly S. Nave and
Sesinando Fernando null and void and of no force and effect;

2. Declaring the Deed of Absolute Sale dated February 20, 1984 executed by Nelly S. Nave in favor of the
[Pabale siblings] similarly null and void and of no force and effect;
3. Recognizing Ms. Lolita P. [Alamayri] as the owner of the property covered by TCT No. 111249 of the
land records of Calamba, Laguna;
4. Ordering the [Pabale siblings] to execute a transfer of title over the property in favor of Ms. Lolita P.
[Alamayri] in the concept of reconveyance because the sale in their favor has been declared null and void;
5. Ordering the [Pabale siblings] to surrender possession over the property to Ms. [Alamayri] and to
account for its income from the time they took over possession to the time the same is turned over to Ms.
Lolita [Alamayri], and thereafter pay the said income to the latter;
6. Ordering [Fernando] and the [Pabale siblings], jointly and severally, to pay Ms. [Alamayri]:
a. attorney’s fees in the sum of P30,000.00; and
b. the costs.6
S.M. Fernando Realty Corporation, still represented by Fernando, filed an appeal with the Court of Appeals, docketed as
CA-G.R. CV No. 58133, solely to question the portion of the 2 December 1997 Decision of the RTC ordering him and the
Pabale siblings to jointly and severally pay Alamayri the amount of P30,000.00 as attorney’s fees.
The Pabale siblings intervened as appellants in CA-G.R. CV No. 58133 averring that the RTC erred in declaring in its 2
December 1997 Decision that the Deed of Absolute Sale dated 20 February 1984 executed by Nave in their favor was null
and void on the ground that Nave was found incompetent since the year 1980.
The Court of Appeals, in its Decision, dated 10 April 2001, granted the appeals of S.M. Fernando Realty Corporation and
the Pabale siblings. It ruled thus:
WHEREFORE, premises considered, the appeal filed by S. M. Fernando Realty Corporation, represented by its
President, Sesinando M. Fernando as well as the appeal interposed by Rommel, Elmer, Erwin, Roller and Amanda,
all surnamed Pabale, are hereby GRANTED. The Decision of the Regional Trial Court of Pasay City, Branch 119 in
Civil Case No. 675-84-C is hereby REVERSED and SET ASIDE and a new one rendered upholding the VALIDITY of
the Deed of Absolute Sale dated February 20, 1984.
No pronouncements as to costs.7
Alamayri sought reconsideration of the afore-quoted Decision of the appellate court, invoking the Decision,8 dated 22
June 1988, of the RTC in the guardianship proceedings, docketed as SP. PROC. No. 146-86-C, which found Nave
incompetent, her condition becoming severe since 1980; and thus appointed Atty. Leonardo C. Paner as her guardian. Said
Decision already became final and executory when no one appealed therefrom. Alamayri argued that since Nave was
already judicially determined to be an incompetent since 1980, then all contracts she subsequently entered into should be
declared null and void, including the Deed of Sale, dated 20 February 1984, which she executed over the subject property
in favor of the Pabale siblings.
According to Alamayri, the Pabale siblings should be bound by the findings of the RTC in its 22 June 1988 Decision in SP.
PROC. No. 146-86-C, having participated in the said guardianship proceedings through their father Jose Pabale. She
pointed out that the RTC explicitly named in its orders Jose Pabale as among those present during the hearings held on 30
October 1987 and 19 November 1987 in SP. PROC. No. 146-86-C. Alamayri thus filed on 21 November 2001 a Motion to
Schedule Hearing to Mark Exhibits in Evidence so she could mark and submit as evidence certain documents to establish
that the Pabale siblings are indeed the children of Jose Pabale.
Atty. Gesmundo, Nave’s surviving spouse, likewise filed his own Motion for Reconsideration of the 10 April 2001 Decision
of the Court of Appeals in CA-G.R. CV No. 58133, asserting Nave’s incompetence since 1980 as found by the RTC in SP.
PROC. No. 146-86-C, and his right to the subject property as owner upon Nave’s death in accordance with the laws of
succession. It must be remembered that Atty. Gesmundo disputed before the RTC the supposed transfer of his rights to
the subject property to Alamayri, but the court a quo refrained from ruling thereon.
In a Resolution, dated 19 December 2001, the Court of Appeals denied for lack of merit the Motions for Reconsideration
of Alamayri and Atty. Gesmundo.
Hence, Alamayri comes before this Court via the present Petition for Review on Certiorari under Rule 45 of the Rules of
Court, with the following assignment of errors:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE FINDING THAT NELLY S. NAVE WAS INCOMPETENT IN
SPECIAL PROCEEDING NO. 146-86-C ON JUNE 22, 1988 CANNOT RETROACT TO AFFECT THE VALIDITY OF THE
DEED OF SALE SHE EXECUTED ON FEBRUARY 20, 1984 IN FAVOR OF RESPONDENTS PABALES.
II
THE COURT OF APPEALS ERRED IN HOLDING THAT THE DECISION IN SPECIAL PROCEEDING NO. 146-86-C
DATED JUNE 22, 1988 IS NOT BINDING ON RESPONDENTS PABALES.
III
THE COURT OF APPEALS ERRED IN DENYING PETITIONER’S MOTION TO SCHEDULE HEARING TO MARK
DOCUMENTARY EXHIBITS IN EVIDENCE TO ESTABLISH THE IDENTITY OF JOSE PABALE AS THE FATHER OF
RESPONDENTS PABALES.9
It is Alamayri’s position that given the final and executory Decision, dated 22 June 1988, of the RTC in SP. PROC. No. 146-
86-C finding Nave incompetent since 1980, then the same fact may no longer be re-litigated in Civil Case No. 675-84-C,
based on the doctrine of res judicata, more particularly, the rule on conclusiveness of judgment.
This Court is not persuaded.
Res judicata literally means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment." Res judicata lays the rule that an existing final judgment or decree rendered on the merits, and without fraud
or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the
parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on
the points and matters in issue in the first suit.10
It is espoused in the Rules of Court, under paragraphs (b) and (c) of Section 47, Rule 39, which read:
SEC. 47. Effect of judgments or final orders. – The effect of a judgment or final order rendered by a court of the
Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
xxxx
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other
matter that could have been raised in relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special proceeding, litigating the same thing
and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have
been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or
which was actually and necessarily included therein or necessary thereto.
The doctrine of res judicata thus lays down two main rules which may be stated as follows: (1) The judgment or decree of
a court of competent jurisdiction on the merits concludes the parties and their privies to the litigation and constitutes a
bar to a new action or suit involving the same cause of action either before the same or any other tribunal; and (2) Any
right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a
competent court in which a judgment or decree is rendered on the merits is conclusively settled by the judgment therein
and cannot again be litigated between the parties and their privies whether or not the claims or demands, purposes, or
subject matters of the two suits are the same. These two main rules mark the distinction between the principles governing
the two typical cases in which a judgment may operate as evidence. 11 In speaking of these cases, the first general rule
above stated, and which corresponds to the afore-quoted paragraph (b) of Section 47, Rule 39 of the Rules of Court, is
referred to as "bar by former judgment"; while the second general rule, which is embodied in paragraph (c) of the same
section and rule, is known as "conclusiveness of judgment."
The Resolution of this Court in Calalang v. Register of Deeds provides the following enlightening discourse on
conclusiveness of judgment:
The doctrine res judicata actually embraces two different concepts: (1) bar by former judgment and (b)
conclusiveness of judgment.
The second concept — conclusiveness of judgment — states that a fact or question which was in issue in a former
suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively
settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned
and cannot be again litigated in any future action between such parties or their privies, in the same court or any
other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains
unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as

to a particular matter in another action between the same parties or their privies, it is essential that the issue be
identical. If a particular point or question is in issue in the second action, and the judgment will depend on the
determination of that particular point or question, a former judgment between the same parties or their privies
will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first
suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not required but merely
identity of issues.
Justice Feliciano, in Smith Bell & Company (Phils.), Inc. vs. Court of Appeals (197 SCRA 201, 210 [1991]),
reiterated Lopez vs. Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar by former judgment
which bars the prosecution of a second action upon the same claim, demand, or cause of action, and
conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between
the same parties on a different claim or cause of action.
The general rule precluding the relitigation of material facts or questions which were in issue and
adjudicated in former action are commonly applied to all matters essentially connected with the subject
matter of the litigation. Thus, it extends to questions necessarily implied in the final judgment, although
no specific finding may have been made in reference thereto and although such matters were directly
referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of
the former trial shows that the judgment could not have been rendered without deciding the particular
matter, it will be considered as having settled that matter as to all future actions between the parties and
if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself. 12
Another case, Oropeza Marketing Corporation v. Allied Banking Corporation , further differentiated between the two rules
of res judicata, as follows:
There is "bar by prior judgment" when, as between the first case where the judgment was rendered and the
second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In
this instance, the judgment in the first case constitutes an absolute bar to the second action. Otherwise put, the
judgment or decree of the court of competent jurisdiction on the merits concludes the litigation between the
parties, as well as their privies, and constitutes a bar to a new action or suit involving the same cause of action
before the same or other tribunal.
But where there is identity of parties in the first and second cases, but no identity of causes of action, the first
judgment is conclusive only as to those matters actually and directly controverted and determined and not as to
matters merely involved therein. This is the concept of res judicata known as "conclusiveness of
judgment." Stated differently, any right, fact, or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which judgment is rendered on the merits is conclusively
settled by the judgment therein and cannot again be litigated between the parties and their privies whether or not
the claim, demand, purpose, or subject matter of the two actions is the same. 13
In sum, conclusiveness of judgment bars the re-litigation in a second case of a fact or question already settled in a
previous case. The second case, however, may still proceed provided that it will no longer touch on the same fact or
question adjudged in the first case. Conclusiveness of judgment requires only the identity of issues and parties, but not of
causes of action.
Contrary to Alamayri’s assertion, conclusiveness of judgment has no application to the instant Petition since there is no
identity of parties and issues between SP. PROC. No. 146-86-C and Civil Case No. 675-84-C.
No identity of parties
SP. PROC. No. 146-86-C was a petition filed with the RTC by Atty. Gesmundo for the appointment of a guardian over the
person and estate of his late wife Nave alleging her incompetence.
A guardian may be appointed by the RTC over the person and estate of a minor or an incompetent, the latter being
described as a person "suffering the penalty of civil interdiction or who are hospitalized lepers, prodigals, deaf and dumb
who are unable to read and write, those who are of unsound mind, even though they have lucid intervals, and persons not
being of unsound mind, but by reason of age, disease, weak mind, and other similar causes, cannot, without outside aid,
take care of themselves and manage their property, becoming thereby an easy prey for deceit and exploitation." 14
Rule 93 of the Rules of Court governs the proceedings for the appointment of a guardian, to wit:
Rule 93
APPOINTMENT OF GUARDIANS
SECTION 1. Who may petition for appointment of guardian for resident. – Any relative, friend, or other person on
behalf of a resident minor or incompetent who has no parent or lawful guardian, or the minor himself if fourteen

years of age or over, may petition the court having jurisdiction for the appointment of a general guardian for the
person or estate, or both, of such minor or incompetent. An officer of the Federal Administration of the United
States in the Philippines may also file a petition in favor of a ward thereof, and the Director of Health, in favor of
an insane person who should be hospitalized, or in favor of an isolated leper.
SEC. 2. Contents of petition. – A petition for the appointment of a general guardian must show, so far as known to
the petitioner:
(a) The jurisdictional facts;
(b) The minority or incompetency rendering the appointment necessary or convenient;
(c) The names, ages, and residences of the relatives of the minor or incompetent, and of the persons
having him in their care;
(d) The probable value and character of his estate;
(e) The name of the person for whom letters of guardianship are prayed.
The petition shall be verified; but no defect in the petition or verification shall render void the issuance of letters of
guardianship.
SEC. 3. Court to set time for hearing. Notice thereof. – When a petition for the appointment of a general guardian
is filed, the court shall fix a time and place for hearing the same, and shall cause reasonable notice thereof to be
given to the persons mentioned in the petition residing in the province, including the minor if above 14 years of
age or the incompetent himself, and may direct other general or special notice thereof to be given.
SEC. 4. Opposition to petition. – Any interested person may, by filing a written opposition, contest the petition on
the ground of majority of the alleged minor, competency of the alleged incompetent, or the unsuitability of the
person for whom letters are prayed, and may pray that the petition be dismissed, or that letters of guardianship
issue to himself, or to any suitable person named in the opposition.
SEC. 5. Hearing and order for letters to issue. – At the hearing of the petition the alleged incompetent must be
present if able to attend, and it must be shown that the required notice has been given. Thereupon the court shall
hear the evidence of the parties in support of their respective allegations, and, if the person in question is a minor
or incompetent it shall appoint a suitable guardian of his person or estate, or both, with the powers and duties
hereinafter specified.
xxxx
SEC. 8. Service of judgment. – Final orders or judgments under this rule shall be served upon the civil registrar of
the municipality or city where the minor or incompetent person resides or where his property or part thereof is
situated.
A petition for appointment of a guardian is a special proceeding, without the usual parties, i.e., petitioner versus
respondent, in an ordinary civil case. Accordingly, SP. PROC. No. 146-86-C bears the title: In re: Guardianship of Nelly S.
Nave for Incompetency, Verdasto Gesmundo y Banayo, petitioner , with no named respondent/s.
Sections 2 and 3 of Rule 93 of the Rules of Court, though, require that the petition contain the names, ages, and
residences of relatives of the supposed minor or incompetent and those having him in their care, so that those residing
within the same province as the minor or incompetent can be notified of the time and place of the hearing on the petition.
The objectives of an RTC hearing a petition for appointment of a guardian under Rule 93 of the Rules of Court is to
determine, first, whether a person is indeed a minor or an incompetent who has no capacity to care for himself and/or his
properties; and, second, who is most qualified to be appointed as his guardian. The rules reasonably assume that the
people who best could help the trial court settle such issues would be those who are closest to and most familiar with the
supposed minor or incompetent, namely, his relatives living within the same province and/or the persons caring for him.
It is significant to note that the rules do not necessitate that creditors of the minor or incompetent be likewise identified
and notified. The reason is simple: because their presence is not essential to the proceedings for appointment of a
guardian. It is almost a given, and understandably so, that they will only insist that the supposed minor or incompetent is
actually capacitated to enter into contracts, so as to preserve the validity of said contracts and keep the supposed minor
or incompetent obligated to comply therewith.
Hence, it cannot be presumed that the Pabale siblings were given notice and actually took part in SP. PROC. No. 146-86-C.
They are not Nave’s relatives, nor are they the ones caring for her. Although the rules allow the RTC to direct the giving of

other general or special notices of the hearings on the petition for appointment of a guardian, it was not established that
the RTC actually did so in SP. PROC. No. 146-86-C.
Alamayri’s allegation that the Pabale siblings participated in SP. PROC. No. 146-86-C rests on two Orders, dated 30
October 198715 and 19 November 1987,16 issued by the RTC in SP. PROC. No. 146-86-C, expressly mentioning the
presence of a Jose Pabale, who was supposedly the father of the Pabale siblings, during the hearings held on the same
dates. However, the said Orders by themselves cannot confirm that Jose Pabale was indeed the father of the Pabale
siblings and that he was authorized by his children to appear in the said hearings on their behalf.
Alamayri decries that she was not allowed by the Court of Appeals to submit and mark additional evidence to prove that
Jose Pabale was the father of the Pabale siblings.
It is true that the Court of Appeals has the power to try cases and conduct hearings, receive evidence and perform any and
all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings. In general, however, the Court of Appeals conducts
hearings and receives evidence prior to the submission of the case for judgment.17 It must be pointed out that, in this
case, Alamayri filed her Motion to Schedule Hearing to Mark Exhibits in Evidence on 21 November 2001. She thus sought
to submit additional evidence as to the identity of Jose Pabale, not only after CA-G.R. CV No. 58133 had been submitted
for judgment, but after the Court of Appeals had already promulgated its Decision in said case on 10 April 2001.
The parties must diligently and conscientiously present all arguments and available evidences in support of their
respective positions to the court before the case is deemed submitted for judgment. Only under exceptional
circumstances may the court receive new evidence after having rendered judgment; 18 otherwise, its judgment may never
attain finality since the parties may continually refute the findings therein with further evidence. Alamayri failed to provide
any explanation why she did not present her evidence earlier. Merely invoking that the ends of justice would have been
best served if she was allowed to present additional evidence is not sufficient to justify deviation from the general rules of
procedure. Obedience to the requirements of procedural rules is needed if the parties are to expect fair results therefrom,
and utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction. 19 Procedural
rules are tools designed to facilitate the adjudication of cases. Courts and litigants alike are thus enjoined to abide strictly
by the rules. And while the Court, in some instances, allows a relaxation in the application of the rules, this, we stress, was
never intended to forge a bastion for erring litigants to violate the rules with impunity. The liberality in the interpretation
and application of the rules applies only to proper cases and under justifiable causes and circumstances. While it is true
that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the
prescribed procedure to insure an orderly and speedy administration of justice.20
Moreover, contrary to Alamayri’s assertion, the Court of Appeals did not deny her Motion to Schedule Hearing to Mark
Exhibits in Evidence merely for being late. In its Resolution, dated 19 December 2001, the Court of Appeals also denied the
said motion on the following grounds:
While it is now alleged, for the first time, that the [herein respondents Pabale siblings] participated in the
guardianship proceedings considering that the Jose Pabale mentioned therein is their late father, [herein
petitioner Alamayri] submitting herein documentary evidence to prove their filiation, even though admitted in
evidence at this late stage, cannot bind [the Pabale siblings] as verily, notice to their father is not notice to them
there being no allegation to the effect that he represented them before the Calamba Court. 21
As the appellate court reasoned, even if the evidence Alamayri wanted to submit do prove that the Jose Pabale who
attended the RTC hearings on 30 October 1987 and 19 November 1987 in SP. PROC. No. 146-86-C was the father of the
Pabale siblings, they would still not confirm his authority to represent his children in the said proceedings. Worth stressing
is the fact that Jose Pabale was not at all a party to the Deed of Sale dated 20 February 1984 over the subject property,
which was executed by Nave in favor of the Pabale siblings. Without proper authority, Jose Pabale’s presence at the
hearings in SP. PROC. No. 146-86-C should not bind his children to the outcome of said proceedings or affect their right
to the subject property.
Since it was not established that the Pabale siblings participated in SP. PROC. No. 146-86-C, then any finding therein
should not bind them in Civil Case No. 675-84-C.
No identity of issues
Neither is there identity of issues between SP. PROC. No. 146-86-C and Civil Case No. 675-84-C that may bar the latter, by
conclusiveness of judgment, from ruling on Nave’s competency in 1984, when she executed the Deed of Sale over the
subject property in favor the Pabale siblings.
In SP. PROC. No. 146-86-C, the main issue was whether Nave was incompetent at the time of filing of the petition with the
RTC in 1986, thus, requiring the appointment of a guardian over her person and estate.

In the cross-claim of Nave and Atty. Gesmundo against the Pabale siblings in Civil Case No. 675-84-C, the issue was
whether Nave was an incompetent when she executed a Deed of Sale of the subject property in favor of the Pabale
siblings on 20 February 1984, hence, rendering the said sale void.
While both cases involve a determination of Nave’s incompetency, it must be established at two separate times, one in
1984 and the other in 1986. A finding that she was incompetent in 1986 does not automatically mean that she was so in
1984. In Carillo v. Jaojoco,22 the Court ruled that despite the fact that the seller was declared mentally incapacitated by the
trial court only nine days after the execution of the contract of sale, it does not prove that she was so when she executed
the contract. Hence, the significance of the two-year gap herein cannot be gainsaid since Nave’s mental condition in 1986
may vastly differ from that of 1984 given the intervening period.
Capacity to act is supposed to attach to a person who has not previously been declared incapable, and such capacity is
presumed to continue so long as the contrary be not proved; that is, that at the moment of his acting he was incapable,
crazy, insane, or out of his mind.23 The burden of proving incapacity to enter into contractual relations rests upon the
person who alleges it; if no sufficient proof to this effect is presented, capacity will be presumed. 24
Nave was examined and diagnosed by doctors to be mentally incapacitated only in 1986, when the RTC started hearing
SP. PROC. No. 146-86-C; and she was not judicially declared an incompetent until 22 June 1988 when a Decision in said
case was rendered by the RTC, resulting in the appointment of Atty. Leonardo C. Paner as her guardian. Thus, prior to
1986, Nave is still presumed to be capacitated and competent to enter into contracts such as the Deed of Sale over the
subject property, which she executed in favor of the Pabale siblings on 20 February 1984. The burden of proving otherwise
falls upon Alamayri, which she dismally failed to do, having relied entirely on the 22 June 1988 Decision of the RTC in SP.
PROC. No. 146-86-C.
Alamayri capitalizes on the declaration of the RTC in its Decision dated 22 June 1988 in SP. PROC. No. 146-86-C on Nave’s
condition "having become severe since the year 1980." 25 But there is no basis for such a declaration.The medical reports
extensively quoted in said Decision, prepared by: (1) Dr. Nona Jean Alviso-Ramos, dated 14 April 1986,26 and (2) by Dr.
Eduardo T. Maaba, dated 20 April 1987,27 both stated that upon their examination, Nave was suffering from "organic brain
syndrome secondary to cerebral arteriosclerosis with psychotic episodes," which impaired her judgment. There was
nothing in the said medical reports, however, which may shed light on when Nave began to suffer from said mental
condition. All they said was that it existed at the time Nave was examined in 1986, and again in 1987. Even the RTC judge
was only able to observe Nave, which made him realize that her mind was very impressionable and capable of being
manipulated, on the occasions when Nave visited the court from 1987 to 1988. Hence, for this Court, the RTC Decision
dated 22 June 1988 in SP. PROC. No. 146-86-C may be conclusive as to Nave’s incompetency from 1986 onwards, but not
as to her incompetency in 1984. And other than invoking the 22 June 1988 Decision of the RTC in SP. PROC. No. 146-86-C,
Alamayri did not bother to establish with her own evidence that Nave was mentally incapacitated when she executed the
20 February 1984 Deed of Sale over the subject property in favor of the Pabale siblings, so as to render the said deed void.
All told, there being no identity of parties and issues between SP. PROC. No. 146-86-C and Civil Case No. 675-84-C, the 22
June 1988 Decision in the former on Nave’s incompetency by the year 1986 should not bar, by conclusiveness of
judgment, a finding in the latter case that Nave still had capacity and was competent when she executed on 20 February
1984 the Deed of Sale over the subject property in favor of the Pabale siblings. Therefore, the Court of Appeals did not
commit any error when it upheld the validity of the 20 February 1984 Deed of Sale.
WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The Decision, dated 10 April 2001,
of the Court of Appeals in CA-G.R. CV No. 58133, is hereby AFFIRMED in toto. Costs against the petitioner Lolita R.
Alamayri.
SO ORDERED.
5. G.R. No. L-45622 May 5, 1939 JUAN GOROSTIAGA, plaintiff-appellee, vs. MANUELA SARTE, defendant-
appellant.
MORAN, J.:
On May 27, 1936, Juan Gorostiaga, plaintiff-appellee, institutes an action against Manuela Sarte to recover the sum of
P2,285.51. An answer was filed by Attorney Gregorio A. Sabater in the name of the defendant, wherein a general denial
was made, and several defenses interposed, among them, that the defendant was physically and mentally incompetent to
manage her estate. At the trial, the defendant did not appear in court and her non-appearance had no been accounted
for. On September 21, 1996, judgment was rendered sentencing the defendant to pay the amount claimed. On December
23, 1936, a motion under section 113 of Act No. 190 was filed by the general guardian of the defendant, praying that all
the proceedings had against the defendant be declared null and void for lack of jurisdiction over her person. The motion
was denied; hence, this appeal.
There is no question about the facts. On May 18, 1936, that is, nine days prior to the institution of the action against the
defendant, a petition for guardianship was filed with the lower court in favor of the defendant, on the ground that she was
incompetent to manage her estate by reason of her physical and mental incapacity. After hearing the petition, wherein the

depositions of alienists were presented, the court issued an order declaring that the defendant Manuela Sarte "se halla
ficica y mentalmente incacitada para administrar sus bienes poe razon de debelidad senil, cuya inteligencia si bien le
permite sostener una conversacion por algunos minutos de una manera satisfactoria, no tiene la consistencia necesaria
para atender a sus necesidas y administrar sus propios bienes."
Although this order was issued on December 3, 1936, it relates to the incapacity alleged in the petition of May 18, 1936.
Consequently, the incapacity thus declared existed at least at the date of the filing of the petition, that is, on May 18, 1936,
nine days prior to the institution of the action in the present case. In fact, according to the evidence relied upon by the
lower court, the defendant was incompetent to manage her affairs for about two or three years prior to her examination
by the alienists. It appears thus clear that during all the proceedings in the case at bar, from the time of the filing of the
complaint to the rendition of the judgment, the defendant was physically and mentally unfit to manage her affairs, and
there having been no summons and notices of the proceedings served her and her guardian, because no guardian was
then appointed for her, the court trying the action acquired no jurisdiction over her person (sec. 396, No. 4, of Act No.
190).
It is argued that Attorney Gregorio A. Sabater appeared for the defendant in the case and filed an answer in her behalf
and that the attorney's authority is presumed as well as the capacity of the defendant giving the authority. But this
presumption is disputable and it is here entirely rebutted by no less than an order of the same court declaring the
defendant physically and mentally unfit to manage her estate since at least May 18, 1936. If the defendant was thus
incompetent, she could not have validly authorized the attorney to represent her. And if the authority was given by her
relatives, it was not sufficient except to show the attorney's good faith in appearing in the case.
It is contended that the issue as to the incapacity of the defendant was pleaded in defendant's answer and was squarely
decided and that therefore it cannot be reopened unless on the ground of newly discovered evidence. That answer was,
however, filed by an attorney not validly authorized to appear for the defendant who had never been in court except when
her guardian filed a motion to quash all the proceedings for lack of jurisdiction. In matters of this kind, affecting the
jurisdiction of the court and the validity of all proceedings, the court, instead of observing a passive attitude, should take
the initiative of, and exercise utmost care in, ascertaining the facts. And although the evidence gathered at the trial is
insufficient, if, after judgment, the lack of jurisdiction is clearly shown, and there has been no waiver thereof, as in this case
where a waiver could not have been possible, it is the duty of the court to set aside all the proceedings, take the necessary
steps to acquire jurisdiction, and grant a new trial. The position taken by the lower court in this case can hardly be
reconciled with its position in the guardianship proceedings.
Appellee contends that in the motion filed by the guardian under section 113 there is no showing of mistake,
inadvertence, surprise or excusable negligence as grounds for relief provided therein. It is, however, more than a surprise
to the defendant that she be tried and sentenced without valid summons or notice. And as to the affidavits of merit
required to be attached to a motion under section 113, they are not necessary, as we have already held, where the court
acted without jurisdiction over the defendant's person. (Coombs vs. Santos, 24 Phil., 446.)
Judgment is reversed, all the proceedings had in the lower court are hereby declared null and void, and the case is
remanded to the court below for new trial after the guardian making him a party defendant. With costs against appellee.
6. see #4
7. Republic Act No. 7610 June 17, 1992
AN ACT PROVIDING FOR STRONGER DETERRENCE AND SPECIAL PROTECTION AGAINST CHILD ABUSE,
EXPLOITATION AND DISCRIMINATION, AND FOR OTHER PURPOSES
Section 3. Definition of Terms. –
(a) "Children" refers to person below eighteen (18) years of age or those over but are unable to fully take care of
themselves or protect themselves from abuse, neglect, cruelty, exploitation or discrimination because of a physical
or mental disability or condition;
(b) "Child abuse" refers to the maltreatment, whether habitual or not, of the child which includes any of the
following:
(1) Psychological and physical abuse, neglect, cruelty, sexual abuse and emotional maltreatment;
(2) Any act by deeds or words which debases, degrades or demeans the intrinsic worth and dignity of a
child as a human being;
(3) Unreasonable deprivation of his basic needs for survival, such as food and shelter; or
(4) Failure to immediately give medical treatment to an injured child resulting in serious impairment of his
growth and development or in his permanent incapacity or death.

(c) "Circumstances which gravely threaten or endanger the survival and normal development of children" include,
but are not limited to, the following;
(1) Being in a community where there is armed conflict or being affected by armed conflict-related
activities;
(2) Working under conditions hazardous to life, safety and normal which unduly interfere with their
normal development;
(3) Living in or fending for themselves in the streets of urban or rural areas without the care of parents or
a guardian or basic services needed for a good quality of life;
(4) Being a member of a indigenous cultural community and/or living under conditions of extreme
poverty or in an area which is underdeveloped and/or lacks or has inadequate access to basic services
needed for a good quality of life;
(5) Being a victim of a man-made or natural disaster or calamity; or
(6) Circumstances analogous to those abovestated which endanger the life, safety or normal development
of children.
(d) "Comprehensive program against child abuse, exploitation and discrimination" refers to the coordinated
program of services and facilities to protected children against:
(1) Child Prostitution and other sexual abuse;
(2) Child trafficking;
(3) Obscene publications and indecent shows;
(4) Other acts of abuses; and
(5) Circumstances which threaten or endanger the survival and normal development of children. 1awphi1Ÿ
8. [G.R. No. 109557. November 29, 2000] JOSE UY and his Spouse GLENDA J. UY and GILDA L.
JARDELEZA, petitioners, vs. COURT OF APPEALS and TEODORO L. JARDELEZA, respondents.
PARDO, J.:
The case is an appeal via certiorari from the decision[1] of the Court of Appeals and its resolution denying
reconsideration[2]reversing that of the Regional Trial Court, Iloilo, Branch 32[3] and declaring void the special
proceedings instituted therein by petitioners to authorize petitioner Gilda L. Jardeleza, in view of the comatose condition
of her husband, Ernesto Jardeleza, Sr., with the approval of the court, to dispose of their conjugal property in favor of co-
petitioners, their daughter and son in law, for the ostensible purpose of financial need in the personal, business and
medical expenses of her incapacitated husband.
The facts, as found by the Court of Appeals, are as follows:
This case is a dispute between Teodoro L. Jardeleza (herein respondent) on the one hand, against his mother Gilda L.
Jardeleza, and sister and brother-in-law, the spouses Jose Uy and Glenda Jardeleza (herein petitioners) on the other
hand. The controversy came about as a result of Dr. Ernesto Jardeleza, Sr.s suffering of a stroke on March 25, 1991, which
left him comatose and bereft of any motor or mental faculties. Said Ernesto Jardeleza, Sr. is the father of herein
respondent Teodoro Jardeleza and husband of herein private respondent Gilda Jardeleza.
Upon learning that one piece of real property belonging to the senior Jardeleza spouses was about to be sold, petitioner
Teodoro Jardeleza, on June 6, 1991, filed a petition (Annex A) before the R.T.C. of Iloilo City, Branch 25, where it was
docketed as Special Proceeding No. 4689, in the matter of the guardianship of Dr. Ernesto Jardeleza, Sr. The petitioner
averred therein that the present physical and mental incapacity of Dr. Ernesto Jardeleza, Sr. prevent him from competently
administering his properties, and in order to prevent the loss and dissipation of the Jardelezas real and personal assets,
there was a need for a court-appointed guardian to administer said properties. It was prayed therein that Letters of
Guardianship be issued in favor of herein private respondent Gilda Ledesma Jardeleza, wife of Dr. Ernesto Jardeleza, Sr. It
was further prayed that in the meantime, no property of Dr. Ernesto Jardeleza, Sr. be negotiated, mortgaged or otherwise
alienated to third persons, particularly Lot No. 4291 and all the improvements thereon, located along Bonifacio Drive, Iloilo
City, and covered by T.C.T. No. 47337.

A few days later, or on June 13, 1991, respondent Gilda L. Jardeleza herself filed a petition docketed as Special Proceeding
NO. 4691, before Branch 32 of the R.T.C. of Iloilo City, regarding the declaration of incapacity of Ernesto Jardeleza, Sr.,
assumption of sole powers of administration of conjugal properties, and authorization to sell the same (Annex B). Therein,
the petitioner Gilda L. Jardeleza averred the physical and mental incapacity of her husband, who was then confined for
intensive medical care and treatment at the Iloilo Doctors Hospital. She signified to the court her desire to assume sole
powers of administration of their conjugal properties. She also alleged that her husbands medical treatment and
hospitalization expenses were piling up, accumulating to several hundred thousands of pesos already. For this, she
urgently needed to sell one piece of real property, specifically Lot No. 4291 and its improvements. Thus, she prayed for
authorization from the court to sell said property.
The following day, June 14, 1991, Branch 32 of the R.T.C. of Iloilo City issued an Order (Annex C) finding the petition in
Spec. Proc. No. 4691 to be sufficient in form and substance, and setting the hearing thereof for June 20, 1991. The
scheduled hearing of the petition proceeded, attended by therein petitioner Gilda Jardeleza, her counsel, her two children,
namely Ernesto Jardeleza, Jr., and Glenda Jardeleza Uy, and Dr. Rolando Padilla, one of Ernesto Jardeleza, Sr.s attending
physicians.
On that same day, June 20, 1991, Branch 32 of the RTC of Iloilo City rendered its Decision (Annex D), finding that it was
convinced that Ernesto Jardeleza, Sr. was truly incapacitated to participate in the administration of the conjugal properties,
and that the sale of Lot No. 4291 and the improvements thereon was necessary to defray the mounting expenses for
treatment and Hospitalization. The said court also made the pronouncement that the petition filed by Gilda L. Jardeleza
was pursuant to Article 124 of the Family Code, and that the proceedings thereon are governed by the rules on summary
proceedings sanctioned under Article 253 of the same Code x x x.
The said court then disposed as follows:
WHEREFORE, there being factual and legal bases to the petition dated June 13, 1991, the Court hereby renders judgment
as follows:
1) declaring Ernesto Jardeleza, Sr., petitioners husband, to be incapacitated and unable to participate in the administration
of conjugal properties;
2) authorizing petitioner Gilda L. Jardeleza to assume sole powers of administration of their conjugal properties; and
3) authorizing aforesaid petitioner to sell Lot No. 4291 of the Cadastral Survey of Iloilo, situated in Iloilo City and covered
by TCT No. 47337 issued in the names of Ernesto Jardeleza, Sr. and Gilda L. Jardeleza and the buildings standing thereof.
SO ORDERED.
On June 24, 1991, herein petitioner Teodoro Jardeleza filed his Opposition to the proceedings before Branch 32 in Spec.
Proc. Case No. 4691, said petitioner being unaware and not knowing that a decision has already been rendered on the
case by public respondent.
On July 3, 1991, herein petitioner Teodoro Jardeleza filed a motion for reconsideration of the judgment in Spec. Proc. No.
4691 and a motion for consolidation of the two cases (Annex F). He propounded the argument that the petition for
declaration of incapacity, assumption of sole powers of administration, and authority to sell the conjugal properties was
essentially a petition for guardianship of the person and properties of Ernesto Jardeleza, Sr. As such, it cannot be
prosecuted in accordance with the provisions on summary proceedings set out in Article 253 of the Family Code. It should
follow the rules governing special proceedings in the Revised Rules of Court which require procedural due process,
particularly the need for notice and a hearing on the merits. On the other hand, even if Gilda Jardelezas petition can be
prosecuted by summary proceedings, there was still a failure to comply with the basic requirements thereof, making the
decision in Spec. Proc. No. 4691 a defective one. He further alleged that under the New Civil Code, Ernesto Jardeleza, Sr.
had acquired vested rights as a conjugal partner, and that these rights cannot be impaired or prejudiced without his
consent. Neither can he be deprived of his share in the conjugal properties through mere summary proceedings. He then
restated his position that Spec. Proc. No. 4691 should be consolidated with Spec. Proc. No. 4689 which was filed earlier
and pending before Branch 25.
Teodoro Jardeleza also questioned the propriety of the sale of Lot No. 4291 and the improvements thereon supposedly to
pay the accumulated financial obligations arising from Ernesto Jardeleza, Sr.s hospitalization. He alleged that the market
value of the property would be around Twelve to Fifteen Million Pesos, but that he had been informed that it would be
sold for much less. He also pointed out that the building thereon which houses the Jardeleza Clinic is a monument to
Ernesto Jardeleza Sr.s industry, labor and service to his fellowmen. Hence, the said property has a lot of sentimental value
to his family. Besides, argued Teodoro Jardeleza, then conjugal partnership had other liquid assets to pay off all financial
obligations. He mentioned that apart from sufficient cash, Jardeleza, Sr. owned stocks of Iloilo Doctors Hospital which can
be off-set against the cost of medical and hospital bills. Furthermore, Ernesto Jardeleza, Sr. enjoys certain privileges at the
said hospital which allows him to pay on installment basis. Moreover, two of Ernesto Jardeleza Sr.s attending physicians
are his own sons who do not charge anything for their professional services.

On July 4, 1991, Teodoro Jardeleza filed in Spec. Proc. No. 4691 a supplement to his motion for reconsideration (Annex
G). He reiterated his contention that summary proceedings was irregularly applied. He also noted that the provisions on
summary proceedings found in Chapter 2 of the Family Code comes under the heading on Separation in Fact Between
Husband and Wife which contemplates of a situation where both spouses are of disposing mind. Thus, he argued that
were one spouse is comatose without motor and mental faculties, the said provisions cannot be made to apply.
While the motion for reconsideration was pending, Gilda Jardeleza disposed by absolute sale Lot No. 4291 and all its
improvements to her daughter, Ma. Glenda Jardeleza Uy, for Eight Million Pesos (P8,000,000.00), as evidenced by a Deed
Absolute Sale dated July 8, 1991 executed between them (p. 111, Rollo). Under date of July 23, 1991, Gilda Jardeleza filed
an urgent ex-parte motion for approval of the deed of absolute sale.
On August 12, 1991 Teodoro Jardeleza filed his Opposition to the motion for approval of the deed of sale on the grounds
that: (1) the motion was prematurely filed and should be held in abeyance until the final resolution of the petition; (2) the
motion does not allege nor prove the justifications for the sale; and (3) the motion does not allege that had Ernesto
Jardeleza, Sr. been competent, he would have given his consent to the sale.
Judge Amelita K. del Rosario-Benedicto of Branch 32 of the respondent Court, who had penned the decision in Spec. Proc.
No. 4691 had in the meantime formally inhibited herself from further acting in this case (Annex I). The case was then
reraffled to Branch 28 of the said court.
On December 19, 1991, the said court issued an Order (Annex M) denying herein petitioners motion for reconsideration
and approving respondent Jardelezas motion for approval of the deed of absolute sale. The said court ruled that:
After a careful and thorough perusal of the decision, dated June 20, 1991, the Motion for Reconsideration, as well as its
supplements filed by oppositor, Teodoro L. Jardeleza, through counsel, and the opposition to the Motion for
Reconsideration, including its supplements, filed by petitioner, through counsel, this Court is of the opinion and so holds,
that her Honor, Amelita K. del Rosario-Benedicto, Presiding Judge of Branch 32, of this Court, has properly observed the
procedure embodied under Article 253, in relation to Article 124, of the Family Code, in rendering her decision dated June
20, 1991.
Also, as correctly stated by petitioner, through counsel, that oppositor Teodor L. Jardeleza does not have the personality
to oppose the instant petition considering that the property or properties, subject of the petition, belongs to the conjugal
partnership of the spouses Ernesto and Gilda Jardeleza, who are both still alive.
In view thereof, the Motion for Reconsideration of oppositor Teodoro L. Jardeleza, is hereby denied for lack of merit.
Considering the validity of the decision dated June 20, 1991, which among others, authorized Gilda L. Jardeleza to sell Lot
No. 4291 of the Cadastral Survey of Iloilo, covered by Transfer Certificate of Title No. 47337 issued in the names of Ernesto
Jardeleza, Sr., and Gilda L. Jardeleza and the building standing thereon, the Urgent Ex-Parte Motion for Approval of Deed
of Absolute Sale dated July 23, 1991, filed by petitioner, through counsel, is hereby granted and the deed of absolute sale,
executed and notarized on July 8, 1991, by and between Gilda L. Jardeleza, as vendor, and Ma. Glenda Jardeleza, as
vendee, is hereby approved, and the Register of Deeds of Iloilo City, is directed to register the sale and issue the
corresponding transfer certificate of title to the vendee.
SO ORDERED.[4]
On December 9, 1992, the Court of Appeals promulgated its decision reversing the appealed decision and ordering
the trial court to dismiss the special proceedings to approve the deed of sale, which was also declared void. [5]
On December 29, 1992, petitioners filed a motion for reconsideration,[6] however, on March 29, 1993, the Court of
Appeals denied the motion, finding no cogent and compelling reason to disturb the decision. [7]
Hence, this appeal.[8]
The issue raised is whether petitioner Gilda L. Jardeleza as the wife of Ernesto Jardeleza, Sr. who suffered a stroke, a
cerebrovascular accident, rendering him comatose, without motor and mental faculties, and could not manage their
conjugal partnership property may assume sole powers of administration of the conjugal property under Article 124 of the
Family Code and dispose of a parcel of land with its improvements, worth more than twelve million pesos, with the
approval of the court in a summary proceedings, to her co-petitioners, her own daughter and son-in-law, for the amount
of eight million pesos.
The Court of Appeals ruled that in the condition of Dr. Ernesto Jardeleza, Sr., the procedural rules on summary
proceedings in relation to Article 124 of the Family Code are not applicable. Because Dr. Jardeleza, Sr. was unable to take
care of himself and manage the conjugal property due to illness that had rendered him comatose, the proper remedy was
the appointment of a judicial guardian of the person or estate or both of such incompetent, under Rule 93, Section 1, 1964
Revised Rules of Court.Indeed, petitioner earlier had filed such a petition for judicial guardianship.
Article 124 of the Family Code provides as follows:

ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In
case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for a proper remedy
which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by
either or both offerors. (165a).
In regular manner, the rules on summary judicial proceedings under the Family Code govern the proceedings under
Article 124 of the Family Code. The situation contemplated is one where the spouse is absent, or separated in fact or has
abandoned the other or consent is withheld or cannot be obtained. Such rules do not apply to cases where the non-
consenting spouse is incapacitated or incompetent to give consent. In this case, the trial court found that the subject
spouse "is an incompetent" who was in comatose or semi-comatose condition, a victim of stroke, cerebrovascular
accident, without motor and mental faculties, and with a diagnosis of brain stem infarct. [9] In such case, the proper remedy
is a judicial guardianship proceedings under Rule 93 of the 1964 Revised Rules of Court.
Even assuming that the rules of summary judicial proceedings under the Family Code may apply to the wife's
administration of the conjugal property, the law provides that the wife who assumes sole powers of administration has the
same powers and duties as a guardian under the Rules of Court.[10]
Consequently, a spouse who desires to sell real property as such administrator of the conjugal property must observe
the procedure for the sale of the wards estate required of judicial guardians under Rule 95, 1964 Revised Rules of Court,
not the summary judicial proceedings under the Family Code.
In the case at bar, the trial court did not comply with the procedure under the Revised Rules of Court. Indeed, the trial
court did not even observe the requirements of the summary judicial proceedings under the Family Code. Thus, the trial
court did not serve notice of the petition to the incapacitated spouse; it did not require him to show cause why the
petition should not be granted.
Hence, we agree with the Court of Appeals that absent an opportunity to be heard, the decision rendered by the trial
court is void for lack of due process. The doctrine consistently adhered to by this Court is that a denial of due process
suffices to cast on the official act taken by whatever branch of the government the impress of nullity.[11] A decision
rendered without due process is void ab initio and may be attacked directly or collaterally.[12] A decision is void for lack of
due process if, as a result, a party is deprived of the opportunity of being heard. [13] A void decision may be assailed or
impugned at any time either directly or collaterally, by means of a separate action, or by resisting such decision in any
action or proceeding where it is invoked.[14]
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals in CA-G. R. SP No. 26936, in toto.
Costs against petitioners.
SO ORDERED.
9. FIRST DIVISION G.R. No. 159567 July 31, 2007 CORAZON CATALAN, LIBRADA CATALAN-LIM, EULOGIO
CATALAN, MILA CATALAN-MILAN, ZENAIDA CATALAN, ALEX CATALAN, DAISY CATALAN, FLORIDA CATALAN and
GEMMA CATALAN, Heirs of the late FELICIANO CATALAN, Petitioners,
vs. JOSE BASA, MANUEL BASA, LAURETA BASA, DELIA BASA, JESUS BASA and ROSALINDA BASA, Heirs of the late
MERCEDES CATALAN, Respondents.
DECISION
PUNO, C.J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of the Court of Appeals decision in
CA-G.R. CV No. 66073, which affirmed the judgment of the Regional Trial Court, Branch 69, Lingayen, Pangasinan, in Civil
Case No. 17666, dismissing the Complaint for Declaration of Nullity of Documents, Recovery of Possession and Ownership,
and damages.
The facts, which are undisputed by the parties, follow:
On October 20, 1948, FELICIANO CATALAN (Feliciano) was discharged from active military service. The Board of Medical
Officers of the Department of Veteran Affairs found that he was unfit to render military service due to his "schizophrenic
reaction, catatonic type, which incapacitates him because of flattening of mood and affect, preoccupation with worries,
withdrawal, and sparce (sic) and pointless speech."1
On September 28, 1949, Feliciano married Corazon Cerezo. 2

On June 16, 1951, a document was executed, titled "Absolute Deed of Donation,"3 wherein Feliciano allegedly donated to
his sister MERCEDES CATALAN(Mercedes) one-half of the real property described, viz:
A parcel of land located at Barangay Basing, Binmaley, Pangasinan. Bounded on the North by heirs of Felipe Basa; on the
South by Barrio Road; On the East by heirs of Segundo Catalan; and on the West by Roman Basa. Containing an area of
Eight Hundred One (801) square meters, more or less.
The donation was registered with the Register of Deeds. The Bureau of Internal Revenue then cancelled Tax Declaration
No. 2876, and, in lieu thereof, issued Tax Declaration No. 18080 4 to Mercedes for the 400.50 square meters donated to
her. The remaining half of the property remained in Feliciano’s name under Tax Declaration No. 18081. 5
On December 11, 1953, People’s Bank and Trust Company filed Special Proceedings No. 4563 6 before the Court of First
Instance of Pangasinan to declare Feliciano incompetent. On December 22, 1953, the trial court issued its Order for
Adjudication of Incompetency for Appointing Guardian for the Estate and Fixing Allowance 7 of Feliciano. The following
day, the trial court appointed People’s Bank and Trust Company as Feliciano’s guardian. 8 People’s Bank and Trust
Company has been subsequently renamed, and is presently known as the Bank of the Philippine Islands (BPI).
On November 22, 1978, Feliciano and Corazon Cerezo donated Lots 1 and 3 of their property, registered under Original
Certificate of Title (OCT) No. 18920, to their son Eulogio Catalan. 9
On March 26, 1979, Mercedes sold the property in issue in favor of her children Delia and Jesus Basa. 10 The Deed of
Absolute Sale was registered with the Register of Deeds of Pangasinan on February 20, 1992, and Tax Declaration No.
12911 was issued in the name of respondents. 11
On June 24, 1983, Feliciano and Corazon Cerezo donated Lot 2 of the aforementioned property registered under OCT No.
18920 to their children Alex Catalan, Librada Catalan and Zenaida Catalan. On February 14, 1983, Feliciano and Corazon
Cerezo donated Lot 4 (Plan Psu-215956) of the same OCT No. 18920 to Eulogio and Florida Catalan. 12
On April 1, 1997, BPI, acting as Feliciano’s guardian, filed a case for Declaration of Nullity of Documents, Recovery of
Possession and Ownership,13 as well as damages against the herein respondents. BPI alleged that the Deed of Absolute
Donation to Mercedes was void ab initio, as Feliciano never donated the property to Mercedes. In addition, BPI averred
that even if Feliciano had truly intended to give the property to her, the donation would still be void, as he was not of
sound mind and was therefore incapable of giving valid consent. Thus, it claimed that if the Deed of Absolute Donation
was void ab initio, the subsequent Deed of Absolute Sale to Delia and Jesus Basa should likewise be nullified, for Mercedes
Catalan had no right to sell the property to anyone. BPI raised doubts about the authenticity of the deed of sale, saying
that its registration long after the death of Mercedes Catalan indicated fraud. Thus, BPI sought remuneration for incurred
damages and litigation expenses.
On August 14, 1997, Feliciano passed away. The original complaint was amended to substitute his heirs in lieu of BPI as
complainants in Civil Case No. 17666.
On December 7, 1999, the trial court found that the evidence presented by the complainants was insufficient to overcome
the presumption that Feliciano was sane and competent at the time he executed the deed of donation in favor of
Mercedes Catalan. Thus, the court declared, the presumption of sanity or competency not having been duly impugned,
the presumption of due execution of the donation in question must be upheld. 14 It rendered judgment, viz:
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered:
1. Dismissing plaintiff’s complaint;
2. Declaring the defendants Jesus Basa and Delia Basa the lawful owners of the land in question which is now
declared in their names under Tax Declaration No. 12911 (Exhibit 4);
3. Ordering the plaintiff to pay the defendants Attorney’s fees of ₱10,000.00, and to pay the Costs.(sic)
SO ORDERED.15
Petitioners challenged the trial court’s decision before the Court of Appeals via a Notice of Appeal pursuant to Rule 41 of
the Revised Rules of Court.16 The appellate court affirmed the decision of the trial court and held, viz:
In sum, the Regional Trial Court did not commit a reversible error in disposing that plaintiff-appellants failed to prove the
insanity or mental incapacity of late (sic) Feliciano Catalan at the precise moment when the property in dispute was
donated.
Thus, all the elements for validity of contracts having been present in the 1951 donation coupled with compliance with
certain solemnities required by the Civil Code in donation inter vivos of real property under Article 749, which provides:

xxx
Mercedes Catalan acquired valid title of ownership over the property in dispute. By virtue of her ownership, the property is
completely subjected to her will in everything not prohibited by law of the concurrence with the rights of others (Art. 428,
NCC).
The validity of the subsequent sale dated 26 March 1979 (Exhibit 3, appellees’ Folder of Exhibits) of the property by
Mercedes Catalan to defendant-appellees Jesus Basa and Delia Basa must be upheld. Nothing of the infirmities which
allegedly flawed its authenticity is evident much less apparent in the deed itself or from the evidence adduced. As
correctly stated by the RTC, the fact that the Deed of Absolute Sale was registered only in 1992, after the death of
Mercedes Catalan does not make the sale void ab initio. Moreover, as a notarized document, the deed of absolute sale
carries the evidentiary weight conferred upon such public document with respect to its due execution (Garrido vs. CA 236
SCRA 450). In a similar vein, jurisprudence has it that documents acknowledged before a notary public have in their favor
the presumption of regularity, and to contradict the same, there must be evidence that is clear, convincing and more than
preponderant (Salame vs. CA, 239 SCRA 256).
WHEREFORE, foregoing premises considered, the Decision dated December 7, 1999 of the Regional Trial Court, Branch 69,
is hereby affirmed.
SO ORDERED.17
Thus, petitioners filed the present appeal and raised the following issues:
1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS HAS DECIDED CA-G.R. CV NO. 66073 IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE HONORABLE COURT IN
HOLDING THAT "THE REGIONAL TRIAL COURT DID NOT COMMIT A REVERSIBLE ERROR IN DISPOSING THAT
PLAINTIFF-APPELLANTS (PETITIONERS) FAILED TO PROVE THE INSANITY OR MENTAL INCAPACITY OF THE LATE
FELICIANO CATALAN AT THE PRECISE MOMENT WHEN THE PROPERTY IN DISPUTE WAS DONATED";
2. WHETHER OR NOT THE CERTIFICATE OF DISABILITY FOR DISCHARGE (EXHIBIT "S") AND THE REPORT OF A
BOARD OF OFFICERS CONVENED UNDER THE PROVISIONS OF ARMY REGULATIONS (EXHIBITS "S-1" AND "S-2")
ARE ADMISSIBLE IN EVIDENCE;
3. WHETHER OR NOT THE HONORABLE COURT OF APPEALS HAS DECIDED CA-G.R. CV NO. 66073 IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE HONORABLE COURT IN
UPHOLDING THE SUBSEQUENT SALE OF THE PROPERTY IN DISPUTE BY THE DONEE MERCEDES CATALAN TO HER
CHILDREN RESPONDENTS JESUS AND DELIA BASA; AND-
4. WHETHER OR NOT CIVIL CASE NO. 17666 IS BARRED BY PRESCRIPTION AND LACHES. 18
Petitioners aver that the presumption of Feliciano’s competence to donate property to Mercedes had been rebutted
because they presented more than the requisite preponderance of evidence. First, they presented the Certificate of
Disability for the Discharge of Feliciano Catalan issued on October 20, 1948 by the Board of Medical Officers of the
Department of Veteran Affairs. Second, they proved that on December 22, 1953, Feliciano was judged an incompetent by
the Court of First Instance of Pangasinan, and put under the guardianship of BPI. Based on these two pieces of evidence,
petitioners conclude that Feliciano had been suffering from a mental condition since 1948 which incapacitated him from
entering into any contract thereafter, until his death on August 14, 1997. Petitioners contend that Feliciano’s marriage to
Corazon Cerezo on September 28, 1948 does not prove that he was not insane at the time he made the questioned
donation. They further argue that the donations Feliciano executed in favor of his successors (Decision, CA-G.R. CV No.
66073) also cannot prove his competency because these donations were approved and confirmed in the guardianship
proceedings.19 In addition, petitioners claim that the Deed of Absolute Sale executed on March 26, 1979 by Mercedes
Catalan and her children Jesus and Delia Basa is simulated and fictitious. This is allegedly borne out by the fact that the
document was registered only on February 20, 1992, more that 10 years after Mercedes Catalan had already died. Since
Delia Basa and Jesus Basa both knew that Feliciano was incompetent to enter into any contract, they cannot claim to be
innocent purchasers of the property in question. 20 Lastly, petitioners assert that their case is not barred by prescription or
laches under Article 1391 of the New Civil Code because they had filed their case on April 1, 1997, even before the four
year period after Feliciano’s death on August 14, 1997 had begun. 21
The petition is bereft of merit, and we affirm the findings of the Court of Appeals and the trial court.
A donation is an act of liberality whereby a person disposes gratuitously a thing or right in favor of another, who accepts
it.22 Like any other contract, an agreement of the parties is essential. Consent in contracts presupposes the following
requisites: (1) it should be intelligent or with an exact notion of the matter to which it refers; (2) it should be free; and (3) it
should be spontaneous.23 The parties' intention must be clear and the attendance of a vice of consent, like any contract,
renders the donation voidable.24

In order for donation of property to be valid, what is crucial is the donor’s capacity to give consent at the time of the
donation. Certainly, there lies no doubt in the fact that insanity impinges on consent freely given. 25 However, the burden
of proving such incapacity rests upon the person who alleges it; if no sufficient proof to this effect is presented, capacity
will be presumed.26
A thorough perusal of the records of the case at bar indubitably shows that the evidence presented by the petitioners was
insufficient to overcome the presumption that Feliciano was competent when he donated the property in question to
Mercedes. Petitioners make much ado of the fact that, as early as 1948, Feliciano had been found to be suffering from
schizophrenia by the Board of Medical Officers of the Department of Veteran Affairs. By itself, however, the allegation
cannot prove the incompetence of Feliciano.
A study of the nature of schizophrenia will show that Feliciano could still be presumed capable of attending to his
property rights. Schizophrenia was brought to the attention of the public when, in the late 1800s, Emil Kraepelin, a German
psychiatrist, combined "hebrephrenia" and "catatonia" with certain paranoid states and called the condition "dementia
praecox." Eugene Bleuler, a Swiss psychiatrist, modified Kraepelin’s conception in the early 1900s to include cases with a
better outlook and in 1911 renamed the condition "schizophrenia." According to medical references, in persons with
schizophrenia, there is a gradual onset of symptoms, with symptoms becoming increasingly bizarre as the disease
progresses.1avvphi1 The condition improves (remission or residual stage) and worsens (relapses) in cycles. Sometimes,
sufferers may appear relatively normal, while other patients in remission may appear strange because they speak in a
monotone, have odd speech habits, appear to have no emotional feelings and are prone to have "ideas of reference." The
latter refers to the idea that random social behaviors are directed against the sufferers. 27 It has been proven that the
administration of the correct medicine helps the patient. Antipsychotic medications help bring biochemical imbalances
closer to normal in a schizophrenic. Medications reduce delusions, hallucinations and incoherent thoughts and reduce or
eliminate chances of relapse.28Schizophrenia can result in a dementing illness similar in many aspects to Alzheimer’s
disease. However, the illness will wax and wane over many years, with only very slow deterioration of intellect. 29
From these scientific studies it can be deduced that a person suffering from schizophrenia does not necessarily lose his
competence to intelligently dispose his property. By merely alleging the existence of schizophrenia, petitioners failed to
show substantial proof that at the date of the donation, June 16, 1951, Feliciano Catalan had lost total control of his
mental faculties. Thus, the lower courts correctly held that Feliciano was of sound mind at that time and that this condition
continued to exist until proof to the contrary was adduced. 30 Sufficient proof of his infirmity to give consent to contracts
was only established when the Court of First Instance of Pangasinan declared him an incompetent on December 22,
1953.31
It is interesting to note that the petitioners questioned Feliciano’s capacity at the time he donated the property, yet did
not see fit to question his mental competence when he entered into a contract of marriage with Corazon Cerezo or when
he executed deeds of donation of his other properties in their favor. The presumption that Feliciano remained competent
to execute contracts, despite his illness, is bolstered by the existence of these other contracts. Competency and freedom
from undue influence, shown to have existed in the other acts done or contracts executed, are presumed to continue until
the contrary is shown.32
Needless to state, since the donation was valid, Mercedes had the right to sell the property to whomever she chose. 33 Not
a shred of evidence has been presented to prove the claim that Mercedes’ sale of the property to her children was tainted
with fraud or falsehood. It is of little bearing that the Deed of Sale was registered only after the death of Mercedes. What
is material is that the sale of the property to Delia and Jesus Basa was legal and binding at the time of its execution. Thus,
the property in question belongs to Delia and Jesus Basa.
Finally, we note that the petitioners raised the issue of prescription and laches for the first time on appeal before this
Court. It is sufficient for this Court to note that even if the present appeal had prospered, the Deed of Donation was still a
voidable, not a void, contract. As such, it remained binding as it was not annulled in a proper action in court within four
years.34
IN VIEW WHEREOF, there being no merit in the arguments of the petitioners, the petition is DENIED. The decision of the
Court of Appeals in CA-G.R. CV No. 66073 is affirmed in toto.
SO ORDERED.
10. see #4
11. G.R. No. L-33152 January 30, 1982 LUIS PARCO and VIRGINIA BAUTISTA, petitioners,
vs. HONORABLE COURT OF APPEALS, HON. UNION C. KAYANAN, Judge, COURT OF FIRST INSTANCE OF QUEZON
(BRANCH IV), CALAUAG, and FRANCISCO RODRIGUEZ, JR., Legal Guardian of the Incompetent SOLEDAD
RODRIGUEZ, respondents.
DE CASTRO, J.:

By this petition for review on certiorari, petitioners seek to set aside the Resolution of the Court of Appeals dated January
20, 1971 1 which revived and declared in full force and effect its decision on August 20, 1970 2 dismissing the petition for
certiorari with preliminary injunction in CA-G.R. No. 43732, entitled "Luis Parco, et al. vs. Hon. Judge of the Court of First
Instance of Quezon, Branch IV, Calauag, et al., " and pray that the decision dated April 15, 1969 3 and all subsequent
orders 4 issued by respondent Judge of Branch IV-Calauag, Court of First Instance of Quezon in Special Proceedings No.
2641 be declared as null and void.
This case, G. R. No. L-33152, started from Special Proceedings No. 2641. a guardianship proceedings for the incompetent
Soledad Rodriguez of Sriaya, Quezon, which originally pertained to Branch 1, Court of First Instance of Quezon, then
presided by the late Hon. Judge Vicente Arguelles, 5 later on succeded by Hon. Judge Ameurfina Melencio-Herrera (now
Associate Justice of the Supreme Court). In 1966, respondent Judge of Branch IV-Calauag of the Court of First Instance of
Quezon, Hon. Union C. Kayanan, took cognizance of Special Proceedings No. 2641 when the Secretary of Justice
authorized respondent Judge to help unclog the docket of Branch I at Lucena City, Quezon.
For clarity, We have hereunder summarized the sequence of events and material dates as it appears in the records from
the time respondent Judge of Branch IV of the Court of First Instance of Quezon took cognizance of Special Proceedings
No. 2641.
On December 20, 1966, respondent Judge authorized and approved, upon motion of Fransisco Rodriguez, Jr. (guardian of
Soledad Rodriguez), hereinafter referred to as private respondent, the sale to Luis Parco and Virginia Bautista, hereinafter
referred to as the petitioners, of Lot Nos. 3437 (613 sq. meters) and 4389 (4,068 sq. meters) covered by TCT Nos. 16939
and 18035, respectively, for the sum of P4,400.00 for the support, maintenance and medical treatment of the ward
Soledad Rodriguez.
On January 6, 1967, respondent Judge again approved and authorized, upon motion of private respondent, the sale to
petitioners of Lot No. 1207 covered by TCT No. 16944 containing an area of 63,598 sq. meters, more or less, for the same
reason. All the sales of the three (3) lots being absolute, new transfer certificates of title were issued in the name of
petitioners.
On May 13, 1968, or almost one year and five months from the approval of the sale of Lot Nos. 3437, 4389, and 1207,
private respondent filed an urgent petition in the Court of First Instance of Quezon, Ninth Judicial District, invoking Section
6 Rule 96 of the Revised Rules of Court, praying that an order be immediately issued requiring petitioners to appear
before the court so that they can be examined as regards the three (3) lots in question which are allegedly in danger of
being lost, squandered, concealed and embezzled and upon failure to do so or to comply with any order that may be
issued in relation therewith to hold them in contempt of court. The pertinent allegations read as follows:
xxx xxx xxx
1. That as legal guardian (private respondent) of the abovenamed incompetent and upon authorization by
this Hon. Court he has transferred in good faith to the spouses LUIS PARCO and VIRGINIA (UY) BAUTISTA,
both of Atimonan, Quezon, the titles over the following realties belonging to his ward, namely:
a. A parcel of land (Lot No. 3437 of the Cadastral Survey of Sariaya) with the
improvements thereon situated in the Municipality of Sariaya ... containing an area of Six
Hundred Thirteen (613) sq. meters, more or less;
b. A parcel of land (Lot No. 4389 of the Cadastral Survey of Sariaya) situated in the
Municipality of Sariaya ... containing an area of Four Thousand And Sixty-Eight (4,068) sq.
meters, more or less;
c. A parcel of land (Lot No. 1207 of the Cadastral Survey of Sariaya) situated in the
Municipality of Sariaya ... containing an area of Sixty-three Thousand Five Hundred and
Ninety-eight (63,598) sq. meters, more or less.
2. That anent the first TWO (2) PARCELS above-described he transferred the titles thereto in favor of the
recited spouses under a loan agreement (not an absolute sale thereto and with the express commitment
in writing that he can recover the same within three (3) months from December 19, 1966, ...
That prior to the expiration of the cited period of three months, he tried to recover the stated two parcels
of land from them, however, the same was not carried out because he was then transacting with them the
sale of PARCEL THREE and under the Agreement that they will not sell cede, or convey the mentioned two
(2) lots to anyone (except to petitioner now private respondent herein) and once the stated PARCEL
THREE has been sold at the price of P48,000.00 the borrowed amount of P4,400.00 shall be deducted
therefrom and said two parcels shall be returned to him;
3. That recently, he discovered that the cited couple, in bad faith and in violation of their agreement and
of the trust and confidence which he had reposed upon them, have fraudulently ceded and transferred

the titles over the stated two parcels of land to another person, allegedly for a price of (over P30,000.00)
and in spite of his repeated request upon them to reconvey to him the titles thereto or to turn over to him
the total proceeds they have received (minus the sum of P4,400.00), they have maliciously and unjustly
refused to do so, and are intending to keep and retain said amount for their own personal use and
benefit;
4. That as already adverted to in the previous paragraph hereof, the mentioned couple induced him to
transfer to them the title of parcel three, so that they can sell the same for the agreed price of P48,000.00
and believing in good faith that the cited spouses are honest and trustworthy, he agreed and executed
the requisite document transferring the title to them subject to the following conditions:
a. They shall pay to him the amount of Twelve Thousand (Pl2,000.00) Pesos after they
have secured a buyer of the property, ...
b. They shall pay to NIEVES ALCALA and PURA AGCAOILE (who are private respondent's
agents and representatives in negotiating the sale of parcel three) the sum of Fifteen
Thousand (P15,000.00) Pesos after they have sold the realty, ...
5. That recently, he discovered that the cited couple have already sold and ceded the mentioned parcel
three to another person, and despite his repeated request upon them to pay and deliver to him or to
Nieves Alcala the sum of money specified in the foregoing paragraph, they have maliciously and unjustly
failed and refused to do so, and have fraudulently retained the said amount of money for thier own
personal use and benefit;
6. That the enumerated parcels of land together with all the proceeds derived therefrom, undeniably
belonged to his ward as trust properties, which are subject to the disposition of this Hon. Court, and due
to the mentioned fraudulent, malicious and dishonest acts of the above- named couple, are in danger of
being lost, squandered, concealed and embezzled;
xxx xxx xxx
In an answer dated June 5, 1968, petitioners contended mainly, among others, that the three lots have been conveyed to
them by deeds of absolute sale which were duly approved by the guardianship court.
Pre-trial hearings were set for possible amicable settlement beginning on September 6, 1968 but was postponed and reset
to October 9, 1968 on petitioners' counsel motion. On October 9, 1968, both parties and their counsels appeared but
failed to reach any amicable settlement. Again, the pre-trial hearing was reset to November 28 and 29, 1968 but was
likewise postponed to January 8, 1969 at petitioners' counsel motion.
On January 8, 1969, for failure to petitioners and their counsel to appear although there was a telegram requesting for
postponement, respondent Judge issued an order, 6 authorizing private respondent to present evidence before the Clerk
of Court who was instructed to make the corresponding report which shall be made as the basis of this decision.
In a petition dated January 30, 1969, petitioners prayed for the reconsideration of the order of January 8, 1969 pointing
out, among others, that there was a First Order dated July 29, 1968, 7 issued by then Judge Ameurfina M. Herrera,
Presiding Judge of Branch I, Court of First Instance of Quezon that said branch "will henceforth take cognizance of this
case" and thus, asked for the transfer of the incident sought before Branch IV to Branch I for proper action.
On February 20, 1969, respondent Judge, finding the petition for reconsideration well-grounded, issued an order directing
the Clerk of Court to transmit the records of the case to the Court of First Instance, Branch I, Lucena City, quoted below:
ORDER
Acting on the Petition for Reconsideration filed by counsel for the respondent on February 4, 1969,
considering that Hon. A. Melencio-Herrera, Presiding Judge of Branch 1, CFI, Lucena City, issued an order
on July 29, 1968, the dispositive portion of which is quoted as follows. 'WHEREFORE, it is hereby
confirmed that this court will henceforth take cognizance of this case,' and considering that this special
proceedings actually belongs to Branch I, although incidents therein were taken cognizance of by the
Presiding Judge of CFI, Branch IV when he was holding court session in Lucena City and notwithstanding
Administrative Order No. 261 dated October 7, 1968 which states that 'This administrative order shall not
apply to cases pending in the different salas which have been partially tried and shall remain therein for
final disposition', because to case was originally filed during the incumbency of the late Judge Vicente
Arguelles, finding therefore the said petition to be well-grounded, the Clerk of Court is hereby authorized
to transmit these records to the Deputy Clerk of Court, CFI, Branch I, of Lucena City.
SO ORDERED.

Given at Calauag, Quezon this 20th day of February, 1969.
(SGD.) UNION C. KAYANAN Judge
On March 24, 1969, Private respondent, without the assistance of a counsel, filed before Branch IV, Court of First Instance
of Quezon an amended petition praying that the three (3) lots subject matter of the original urgent petition be ordered
reconveyed to the ward in said Special Proceedings No. 2641 for he was informed that petitioners win transfer and
properties to third person.
On March 26, 1969, the Clerk of Court of Branch IV, Court of First Instance of Quezon, issued the notice of hearing of the
amended petition filed by private respondent dated March 24, 1969 notifying counsel for both parties that the case will be
heard before Branch IV on April 10, 1969 at 2:30 p.m. at Calauag, Quezon. On the date set for hearing, counsels for both
parties appeared but for failure of the petitioners to appear respondent Judge issued an order 8reiterating its previous
order dated January 8, 1969 allowing private respondent to present his evidence ex-parte and considered the case
submitted for resolution.
On April 15, 1969, respondent Judge rendered a decision 9 on the basis of the report of the Clerk of Court dated February
19, 1969 ordering petitioners to reconvey the three (3) parcels of land to private respondent.
On June 14, 1969, petitioners moved to reconsider the decision stating, among others, that respondent Judge has no
authority to take cognizance of the case which, according to petitioners, is an issue raised in the petition for
reconsideration of the court order of January 8, 1969, and that the decision was without legal basis. Petitioners prayed that
the case or incident be transferred to the proper court which had taken cognizance of this case.
On June 23, 1969, respondent Judge denied the petition for reconsideration for lack of merit. Petitioners' counsel received
the said order of denial on June 26, 1969.
Meanwhile, on June 21, 1969, private respondent filed an urgent motion in Branch IV praying that petitioners be required
to appear before the court to be examined as regards the properties of the ward and to explain why they should not be
cited for contempt for not complying with a final order of the court directing the reconveyance of the three (3) parcels of
land to private respondent.
On June 23, 1969, respondent Judge, acting on the urgent motion, issued an order 10 directing petitioners to explain why
they should not be cited for contempt of court pursuant to par. (b) Section 3 Rule 71 of the Revised Rules of Court.
On June 27, 1969, petitioners filed an urgent motion claiming that the urgent motion for contempt of court was premature
considering that the decision ordering the reconveyance of the properties in question has not yet become final and
executory and is still subject to appeal. In their prayer for the setting aside of the order of June 23, 1969, petitioners
informed the court that they win appeal the decision to the Court of Appeals and that the corresponding notice of appeal,
appeal bond and the record on appeal will be filed in due time.
The following day, June 28, 1969, petitioners filed the notice of appeal and appeal bond with a manifestation that the
record on appeal will be filed in due time.
On July 3, 1963, respondent Judge issued an order 11 denying for lack of merit petitioners' urgent motion of June 27, 1969,
thus declaring that the order dated June 23, 1969 stands considering that petitioners' right to appeal has already lapsed.
In the same order, petitioners were given ten (10) days upon receipt to explain why they should not be cited for contempt
pursuant to Section 4, Rule 71 in relation to Section 6, Rule 96 of the Revised Rules of Court.
On July 7, 1969, petitioners filed a petition for extension of ten (10) days to expire on July 20, 1969 within which to file the
record on appeal. In an order 12 dated July 9, 1969, respondent Judge denied the said petition for having been filed
beyond the reglementary period.
On July 10, 1969, petitioners filed an unverified second petition for reconsideration of the decision dated April 15, 1969
and the order of July 3, 1969 contending that Branch IV lost its jurisdiction over the raise from the time the order dated
February 20, 1969 was issued by Judge A. Melencio- Herrera; that the proceedings under Section 6 Rule 96 do not
authorize the Hon. Court (Branch IV) to determine the question of right over the property or to order delivery thereof; that
the purpose is merely to elicit information or secure evidence from the person suspected of having embezzled, concealed
or conveyed away any personal property of the ward; that if the court finds sufficient evidence showing ownership on the
part of the ward, it is the duty of the guardian to bring the proper action.
On the other hand, on July 17, 1969, a motion for reconsideration of the order dated July 9, 1969 was filed by petitioners
claiming that all the pleadings related to the intended appeal were filed within the period allowed by the Revised Rules of
Court. After an opposition was filed, respondent Judge issued an order on 13 July 18, 1969 denying the second petition for
reconsideration for lack of basis and on the ground that the period to appeal either the decision or any of the previous
orders had already expired.

On August 20, 1969, petitioners went to the Court of Appeals on a petition for certiorari with preliminary injunction
pleading nullity of the decision of the Court of First Instance, Branch IV,
Quezon dated April 15, 1969 on grounds of lack of jurisdiction and grave abuse of discretion in denying their right of
appeal.
On September 27, 1969, the Court of Appeals dismissal the petition for lack of merit. 14 On motion by petitioners, the
dismissal was reconsidered in a split resolution dated December 15, 1969 thereby giving due course to the petition, and
private respondent was required to answer.
After private respondent filed their answer and the parties submitted their respective memoranda, the Court of Appeals, in
a three-to-two vote decision 15 dated August 21, 1970 dismissed the petition.
On motion for reconsideration filed by petitioners, the Court of Appeals, in a split resolution 16
dated October 10, 1970
granted the motion for reconsideration and set aside the decision dated August 20,1970.
However, upon motion for reconsideration filed by private respondent, the Court of Appeals, in a three-to-two vote
resolution 17 dated January 20, 1971, reverted to its decision of August 21, 1970 dismissing the petition.
Hence, the instant petition for review on the following assignment of errors, to wit:
THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS ERRED IN SUSTAINING
THE RETENTION BY THE RESPONDENT JUDGE OF BRANCH IV-CALAUAG OF THE CASE OF BRANCH I-
LUCENA CITY AFTER HE ORDERED THE RETURN OF THE CASE TO BRANCH I,LUCENA CITY TO WHICH THE
CASE BELONGS AND AFTER THE PRESIDING JUDGE OF BRANCH I LUCENA CITY HAD RESUMED AND
EXERCISED HER JURISDICTION OVER SAID CASE.
II
ASSUMING THAT THE RESPONDENT JUDGE COULD LEGALLY AND VALIDLY RETAIN JURISDICTION OVER
THE CASE OF BRANCH I LUCENA CITY DESPITE THE CIRCUMSTANCES ADVERTED TO IN THE FIRST
ASSIGNED ERROR, THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS
ERRED IN SANCTIONING THE RESPONDENT JUDGE'S ASSUMPTION OF JURISDICTION TO ADJUDICATE
THE ISSUE OF OWNERSHIP AND/OR ORDER RECONVEYANCE OF PETITIONERS' PROPERTY SOLD TO
THEM AND TITLED IN THEIR NAMES, NOTWITHSTANDING THE LIMITED JURISDICTION OF A
GUARDIANSHIP COURT.
III
THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS ERRED IN NOT HOLDING
THAT THE JUDICIAL AUTHORITY AND APPROVAL OF THE SALES ARE CONCLUSIVE UPON THE VALIDITY
AND REGULARITY OF SAID SALES BETWEEN THE PARTIES AND THEIR SUCCESSORS IN INTEREST.
IV
THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS ERRED IN SANCTIONING
BY SILENCE THE QUESTIONED ORDER OF THE RESPONDENT JUDGE ENFORCING HIS DECISION BY
CONTEMPT PROCEEDINGS.
DENIAL OF PETITIONERS' RIGHT TO APPEAL.
This petition was given due course in view of the peculiar incidents during its trial stage where, as borne out by the
records, two (2) branches of the Court of First Instance of Quezon Province, 9th Judicial District assert jurisdiction over
Special Proceedings No. 2641, which, when the decision rendered by one branch was brought in the Court of Appeals on
certiorari with preliminary injunction, the Special Division of Five Justices, in a three-to-two vote resolution in four (4)
occasions after its dismissal for lack of merit on September 27, 1968, reconsidered the same and was given due course on
December 15, 1968, again dismissed on August 21, 1970, but again reconsidered on October 10, 1970, until finally
dismissed on January 20, 1971 when the Special Division of Five reverted to its August 21, 1970 resolution. The Special
Division was equally split on the issue whether or not the Court of First Instance, Branch IV, Calauag, Quezon, acting with
limited jurisdiction as a guardianship court under Section 6 Rule 96 of the Rules of Court, has the authority to adjudicate
the question of ownership and order the reconveyance of the three (3) parcels of land in question to private respondent,
guardian of the ward Soledad Rodriguez. On these two (2) principal issues, We are called upon to finally resolve the legal
controversy peculiar on this case.

After the parties submitted their respective briefs, the case was deemed submitted for decision on October 28, 1971.
In a Resolution 18 of this Court dated November 29, 1978, the urgent manifestation and motion of Leonisa S. Rodriguez,
the surviving spouse of Mario Rodriguez (brother of the ward) that the ward Soledad Rodriguez died on September 15,
1970 and private respondent Francisco Rodriguez, Jr. died on October 24, 1973; and that the heirs of the ward be
substituted as the private respondents in this case was noted. To begin with, the principal issue al hand is whether or not
respondent Judge of the Court of First Instance of Quezon, Branch IV-Calauag has the authority or power to take further
action in Special Proceedings No. 2641 after the Presiding Judge of the Court of First Instance of Quezon, Branch I-Lucena
City asserted its jurisdiction by issuing two (2) orders dated July 29, 1968 and respondent Judge correspondingly ordered
the return of the case to Branch I in an order dated February 20,1969.
Petitioners maintain that respondent Judge of Branch IV, Court of First Instance of Quezon has no power or authority to
retain jurisdiction over Special Proceedings No. 2641 which, at its inception, originally pertained to Branch I-Lucena City,
Court of First Instance of Quezon. To support such chum, petitioners contend that the Second Order dated July 29, 1968
requiring private respondent for an inventory and accounting of the ward's property confirms that the Presiding Judge of
Branch I has resumed its jurisdiction over said case, more so, when respondent Judge ordered on February 20, 1969 the
transmittal of the records of the case to the Deputy Clerk of Court, Court of First Instance, Branch I-Lucena City.
Private respondent, on the other hand, justifies the retention of jurisdiction by respondent Judge over Special Proceedings
No. 2641 contending, among others, that the two (2) orders dated July 29, 1968 issued by then Judge A. Melencio-Herrera
are not sufficient bases for claiming that Branch IV has been deprived of its, jurisdiction because jurisdiction is vested upon
the court not upon any particular branch or judge thereof and the issuance of such orders constitute undue interference
with the processes and proceedings already undertaken by respondent Judge; that petitioners are guilty of estoppel when
they failed to raise the issue of jurisdiction from the very beginning and when they voluntarily appeared before
respondent Judge, filed their answer and other pleadings, and moved for postponements of the scheduled dates of
hearing.
We sustain petitioners' stand. Of course, jurisdiction is vested in the court not in any particular branch or judge, and as a
corollary rule, the various branches of the Court of First Instance of a judicial district are a coordinate and co-equal
courts 19 one branch stands on the same level as the other. Undue interference by one on the proceedings and processes
of another is prohibited by law. In the language of this Court, the various branches of the Court of First Instance of a
province or city, having as they have the same or equal authority and exercising as they do concurrent and coordinate
jurisdiction should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders
or judgments. 20 A contrary rule would obviously lead to confusion and might seriously hinder the administration of
justice. A judge is competent to act so long as the case remains before him, but after it passed from his branch to the
other, the case could be acted upon by the judge of the latter branch. 21 Otherwise, an anomalous situation would occur at
the detriment of the party litigants who are likewise confused where to appear and plead their cause.
In the case before Us, there is no dispute that both Branch I and Branch IV of the Court of First Instance of Quezon, have
jurisdiction over the subject matter, a guardianship proceedings under Section 1, Rule 92 of the Rules of Court and Section
44(a) of the Judiciary Act of 1948. While it is recognized that when a case is filed in one branch, jurisdiction over the case
does not attach to the branch or judge alone, to the exclusion of the other branches, 22 We are of the view however,
considering the unusual circumstances and incidents attendant in this case the situation in the case at bar is different.
Here, it must be noted that the Presiding Judge of Branch I asserted and resumed its prior jurisdiction by issuing two (2)
orders, one of which requires private respondent to render an inventory and accounting of the property of the ward. On
the other hand, respondent Judge of Branch IV, in confirmation of such resumption of jurisdiction, ordered the return of
the records of Special Proceedings No. 2641 to Branch I-Lucena City, Court of First Instance of Quezon, but, instead of
regularly relinquishing jurisdiction over the case, respondent Judge continued to take further action on the case in total
disregard of the two (2) orders of the Presiding Judge of Branch I. Should one branch be permitted to equally assert,
assume or retain jurisdiction over a case or controversy over which another coordinate or co-equal branch has already
resumed its jurisdiction, We would then sanction undue interference by one branch over another. With that, the judicial
stability of the decrees or orders of the courts would be a meaningless precept in a well-ordered administration of justice.
There is no question that the prior proceedings had in Branch IV by respondent Judge were valid and regular as they were
admittedly authorized by the Secretary of Justice. It must be emphasized however, that Branch IV lost its jurisdiction over
Special Proceedings No. 2641 when respondent Judge ordered the return of the records to Branch I after having been
informed in a motion for reconsideration filed on January 30, 1969 of the existence of the two (2) orders issued by the
Presiding Judge of Branch 1. From that point of time, all subsequent proceedings and processes in connection with or
related to Special Proceedings No. 2641 undertaken by the respondent Judge became irregular. It amounted to an undue
interference with the processes and proceedings of Branch I.
Nevertheless, from the standpoint of the pertinent law on the matter, it may be observed that the detail of respondent
Judge of Branch IV stationed permanently in Calauag, Quezon to Branch I in Lucena City, Quezon authoritatively rests on
the provision of Section 51 of the Judiciary Act of 1948 which reads:
Section 51. Detail of judge to another district or province.-Whenever a judge stationed in. any province or
branch of a court in a province shag certify to the Secretary of Justice that the condition of the docket in
his court is such as to require the assistance of an additional judge, or when there is any vacancy in any
court or branch of a court in a province, the Secretary of Justice may, in the interest of justice, with the
approval of the Supreme Court and for a period of not more than three months for each time, assign any
judge of any court or province, whose docket permits his temporary absence from said court, to hold
sessions in the court needing such assistance or whether such vacancy exists . No judge so detailed shall
take cognizance of any case when any of the parties thereto objects and the objection is sustained by the
Supreme Court. (emphasis supplied)
xxx xxx xxx
Apparently, when the circumstances contemplated under Section 51 of the Judiciary Act of 1948 occur, the detailed Judge
holds sessions in the court needing such assistance or where such vacancy exists as if he is the presiding judge of that
particular branch where the clogged docket or vacancy exists. The detailed Judge does not hold sessions therein as if he is
the Presiding Judge of the branch where he is originally or permanently designated. In the case before Us, respondent
Judge Kayanan was duly authorized to help unclog the docket of Branch I stationed in Lucena City, Quezon which at that
time was rendered vacant due to the death of Judge Vicente Arguelles. When respondent Judge Kayanan took cognizance
of the cases left by Judge Arguelles, pending the designation of a replacement, he merely sits as a judge of Branch I, Court
of First Instance of Quezon Province. In the event of designation of a new Presiding Judge of Branch 1, accepted practice
and procedure of speedy administration of justice requires that the detailed judge turns over the cases he took
cognizance of to the new Presiding Judge. Justification for the continued retention of jurisdiction over those cases in the
case at bar appears to be not convincing.
We find no plausible indication how estoppel could operate against petitioners. It is true that petitioners filed their answer
to the urgent petition of private respondent and appeared before respondent Judge of Branch IV without questioning the
latter's authority to hear the case. The answer to the urgent petition of private respondent dated May 13, 1968 was filed
by petitioners on June 5, 1968 or almost two (2) months before Judge Melencio-Herrera of Branch I issued the two (2)
orders dated July 29, 1968 asserting jurisdiction over the case. The appearances of petitioners and counsel in the sala of
respondent Judge during the intervening period from July 29, 1968 were apparently due to the fact that petitioners came
to know only of the two orders of Branch I when they examined the records of the case prompted by the manifestation of
the counsel of private respondent, in the course of the proceedings in Branch IV, to submit for an accounting in
connection with the administration of the properties of the ward Soledad Rodriguez. Petitioners manifested such
information to respondent Judge in a petition for reconsideration of the order of January 8, 1968 authorizing the
presentation of evidence ex parte. The silence or inaction of petitioners was therefore due to their lack of knowledge of
respondent Judge's lack of authority to retain or take further action on the case. Such lack of authority was confirmed
when respondent Judge, acting on the petition for reconsideration dated January 30, 1969, issued on February 20, 1969 an
order authorizing the return of the records of the case to Branch I. In claiming that the records referred to by the order
concern the first portion of the records of Special Proceedings No. 2641 and not the second portion containing the urgent
petition filed by private respondent on May 13, 1968, private respondent would then encourage split jurisdiction of courts
which is abhorred by the law.
Assuming that Branch IV-Calauag, Court of First Instance of Quezon has jurisdiction over Special Proceedings No. 2641
notwithstanding the attendant circumstances adverted to earlier, We now dwell on another issue, which standing alone
would decisively resolve the assigned errors raised in this petition, that is, whether or not Branch IV exercising limited and
special, jurisdiction as a guardianship court under Section 6 Rule 96 of the Rules of Court has jurisdiction to order the
delivery or reconveyance of the three parcels of land in question to the ward, represented herein by private respondent.
In two leading cases, Castillo vs. Bustamante, 64 Phil. 839 and Cui vs. Piccio et al, 91 Phil. 712, this Court laid the rule on
the issue raised before Us as interpreted in the light of Section 6 Rule 96 of the Rules of Court which reads:
Section 6. Proceedings when person suspected of embezzling or concealing property of the ward.— Upon
complaint of the guardian or ward, or of any person having actual or prospective interest in the estate of
the ward as creditor, heir, or otherwise, that anyone is suspected of having embezzled, concealed, or
conveyed away any money, goods, or interest, or a written instrument, belonging to the ward or his
estate, the court may cite the suspected person to appear for examination touching such money, goods,
interests, or instrument, and make such orders as will secure the estate against such embezzlement,
concealment or conveyance.
In Cui vs. Piccio et al., supra, this Court held that the jurisdiction of the court in guardianship proceedings, ordinarily, is to
cite persons suspected of having embezzled, concealed or conveyed the property belonging to the ward for the purpose
of obtaining information which may be used in an action later to be instituted by the guardian to protect the right of the
ward. Generally, the guardianship court exercising special and limited jurisdiction cannot actually order the delivery of the
property of the ward found to be embezzled, concealed or conveyed. In a categorical language of this Court, only in
extreme cases, where property clearly belongs to the ward or where his title thereto has been already judicially decided,
may the court direct its delivery to the guardian. 23 In effect, there can only be delivery or return of the embezzled,
concealed or conveyed property of the ward, where the right or title of said ward is clear and undisputable. However,
where title to any property said to be embezzled, concealed or conveyed is in dispute, under the Cuicase, the
determination of said title or right whether in favor of the person said to have embezzled, concealed or conveyed the
property must be determined in a separate ordinary action and not in guardianship proceedings.

In the case at bar, We are not prepared to say, at this premature stage, whether or not, on the basis alone of the pleadings
of the parties in the trial court, the title or right of the ward Soledad Rodriguez over the three (3) parcels of land in
question is clear and undisputable. What is certain here is the fact that the sale of the properties in question were duly
approved by the respondent Judge in accordance with the provisions on selling and encumbering of the property of the
ward under Rule 97 of the Rules of Court. It must be noted that while the original urgent petition dated May 13, 1968
prayed for the examination of petitioners herein regarding the alleged concealing, conveyancing and embezzling of the
questioned properties, the amended petition dated March 24, 1969 asked for reconveyance.
Moreover, it may be observed that private respondent contended that the sale of the first two lots was actually a loan
agreement with right of recovery while that of the third lot was subject to condition, hence, a fictitious or simulated sale.
On the other hand, according to petitioners, the sales were all absolute and protected by the Torrens System since new
transfer certificate of titles were issued in their name. Apparently, there is a cloud of doubt as to who has a better right or
title to the disputed properties. This, We believe, requires the determination of title or ownership of the three parcels of
land in dispute which is beyond the jurisdiction of the guardianship court and should be threshed out in a separate
ordinary action not a guardianship proceedings as held in Cui vs. Piccio supra.
The ruling in Castillo vs. Bustamante, 64 Phil. 839, relied upon by private respondent finds no application in the instant
case. As differentiated from the case at bar, in Castillo case, the right or title of the ward to the property in dispute was
clear and undisputable as the same was donated to her through compromise agreement approved by the court which title
had the authority of res judicata. As enunciated above, the right or title of the ward to the properties in question is in
dispute and as such should be determined in a separate ordinary action.
Furthermore, private respondent's claim that petitioners are barred by laches to raise the issue of jurisdiction is without
merit. In support of such claim, private respondent invoked the exception laid down in Tijam vs. Sibonghanoy, 23 SCRA 29,
to the rule that the lack of jurisdiction over the subject matter is fatal and may be raised at any stage of the proceedings;
that it is conferred only by law, and in the manner prescribed by law and an objection on the lack of jurisdiction cannot be
waived by the parties; and the infirmity cannot be cured by silence, acquiescence, or even by express consent, or win of
the parties. 24
The doctrine laid down in Tijam vs. Sibonghanoy, supra, and in the latter case of Rodriguez vs. Court of Appeals, 29 SCRA
419 is not applicable in the case at bar. In Tijam case, the appellant had all the opportunity to challenged the court's
jurisdiction in the court a quo as well as in the Court of Appeals but instead invoked its jurisdiction to obtain affirmative
relief and submitted its case for final adjudication on the merits. It was only after an adverse decision was rendered by the
Court of Appeals and fifteen (15) years later from the inception of the case that it finally chose to raise the question of j
jurisdiction. I t is clear that t the circumstances present in Tijam case are not present here. The petitioners in the instant
case challenged the authority of the trial court to take further cognizance of the case the moment they become aware of
Branch I assuming jurisdiction. The lack of jurisdiction was raised in a petition for reconsideration of the order dated
January 8, 1969, in a petition for reconsideration of the decision dated April 15, 1969, in a second petition for
reconsideration of the said decision, and alleged as an additional ground in the petition for certiorari in the Court of
Appeals. In any case, the operation of the principle of estoppel on the question of jurisdiction seemingly depends upon
whether the lower court actually had jurisdiction. If it had no jurisdiction, but the case was tried and decided upon the
theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same must
exist as a matter of law, and may not be conferred by consent of the parties or by estoppel. 25
As respondent trial court has no jurisdiction, We deem it unnecessary to pass upon the assigned errors raised in the
petition.
WHEREFORE, the Resolution of the Court of Appeals dated January 20, 1971 is hereby reversed and set aside, and the
decision rendered by respondent Judge of Branch IV-Calauag, Court of First Instance of Quezon dated April 15, 1969 and
the orders issued thereafter are declared null and void, and the case is hereby remanded to Branch I-Lucena City, Court of
First Instance of Quezon for further proceedings.
SO ORDERED.
Barredo (Chairman), Concepcion, Jr., Abad Santos, Ericta and Escolin, JJ., concur.
Separate Opinions
AQUINO, J.:, dissenting:
I dissent. I vote for the affirmance of the decision of Judge Union C. Kayanan, Calauag Branch IV of the Court of First
Instance of Quezon Province dated April 15, 1969 in Special Proceeding No. 2641, entitled "Guardianship of the
Incompetent Soledad Rodriguez, Francisco Rodriguez, Jr., Guardian".
In that decision, Judge Kayanan ordered the spouses Luis Parco and Virginia Bautista to reconvey Lot No. 3437 (613
square meters), Lot No. 4389 (4,069 square meters) and Lot No. 1207 (63,598 square meters), all of the Sariaya, Tayabas

cadastre, to the guardian Francisco Rodriguez, Jr. upon the latter's payment to the said spouses of the sum of twelve
thousand pesos which he had borrowed from them (p. 65, Rollo).
Since the ward died intestate on September 15, 1970 and the guardian died on October 24, 1973, the reconveyance
should be made to the ward's heirs, namely, her sisters, Concepcion Rodriguez- Sapalo and Milagros Rodriguez-Sanchez,
and the children of the ward's deceased brother Mario Rodriguez (who died on March 8, 1972), namely, Mario, Jr.,
Ramoncito, Liza and Rodulfo, all surnamed Rodriguez, represented by their guardian, their mother, Leonisa S. Rodriguez
(pp. 232-236, Rollo). Said heirs should pay the Parco spouses the sum of twelve thousand pesos as a condition for the
reconveyance.
It should be noted that the said guardianship proceedings was assigned originally to Branch I presided over by Judge
Ameurfina Melencio-Herrera. It was transferred to Branch IV presided over by Judge Kayanan who was detailed at Lucena
City to assist in decongesting the dockets of Branches I and II.
Judge Kayanan had authorized the sale of the three lots to the Parco spouses so that the proceeds of the sale could be
used for the maintenance of the ward. it turned out that the sales or transfers were made under certain conditions which
were violated by the Parco spouses.
A copy of Judge Kayanan's decision was received by petitioners' counsel on May 29, 1969. Sixteen days later or on June
14, they filed a motion for reconsideration. The order denying that motion was received by the petitioners on June 26.
They filed their notice of appeal and appeal bond on June 28 (pp- 86 and 92, CA Rollo).
The last day for submitting the record on appeal was July 10. The petitioners asked for a ten-day extension within which to
file their record on appeal Instead of submitting it, they filed on July 10 a second motion for reconsideration on the
ground of lack of jurisdiction.
The lower court denied the motion for extension of time within which to file the record on appeal It also denied the
second motion for reconsideration in its order of July 18, 1969.
The petitioners did not file any record on appeal They filed on August 20, 1969 a petition for certiorari in the Court of
Appeals to set aside the said decision of April 15. The Court of Appeals in its extended resolution of September 27, 1969
dismissed the petition on the ground that the petitioners' remedy was an appeal which they had abandoned.
That resolution was reconsidered. The petition was given due course. The Court of Appeals in its decision of August 21,
1970 dismissed the petition. (Per Justice Eulogio Serrano with Alvendia and Nolasco JJ., concurring. Justice Enriquez and
Yatco dissented.)
Petitioners' motion for the reconsideration of that decision was denied in the resolution of January 20, 197 1. (Per Justice
Eulogio Serrano with Justices Nolasco and Soriano concurring. Justices Enriquez and Alvendia dissented.)
The petitioners appealed to this Court. The decision of the Court of Appeals should be affirmed because (1) the petitioners
inexcusably did not file a record on appeal (2) the question as to whether the guardianship court should set aside the
conveyances to the petitioners is not a jurisdictional question but merely a procedural matter which could be waived
(Lachenal vs. Salas, L-42257 June 14, 1976, 71 SCRA 262) and (3) the petitioners and the guardian hoodwinked the
guardianship court to the ward's prejudice.
It is the duty of the courts, in the exercise of the State's prerogative to protect persons under disability (parents patriae) to
set aside the transfers to the petitioners and thus avoid unjust enrichment at the expense of the ward and do justice in this
case. Technicalities should be eschewed.
As to the power of a branch of the Court of First Instance to act in a case transferred to it from another sala of the same
court, see Eleazar vs. Zandueta, 48 Phil. 193; Hizon Mercado vs. Ocampo, 72 Phil. 318; San Miguel Brewery, Inc. vs. Court of
Industrial Relations, 91 Phil. 178.
11. G.R. No. L-33152 January 30, 1982 LUIS PARCO and VIRGINIA BAUTISTA, petitioners,
vs. HONORABLE COURT OF APPEALS, HON. UNION C. KAYANAN, Judge, COURT OF FIRST INSTANCE OF QUEZON
(BRANCH IV), CALAUAG, and FRANCISCO RODRIGUEZ, JR., Legal Guardian of the Incompetent SOLEDAD
RODRIGUEZ, respondents.
DE CASTRO, J.:
By this petition for review on certiorari, petitioners seek to set aside the Resolution of the Court of Appeals dated January
20, 1971 1 which revived and declared in full force and effect its decision on August 20, 1970 2 dismissing the petition for
certiorari with preliminary injunction in CA-G.R. No. 43732, entitled "Luis Parco, et al. vs. Hon. Judge of the Court of First
Instance of Quezon, Branch IV, Calauag, et al., " and pray that the decision dated April 15, 1969 3 and all subsequent

orders 4 issued by respondent Judge of Branch IV-Calauag, Court of First Instance of Quezon in Special Proceedings No.
2641 be declared as null and void.
This case, G. R. No. L-33152, started from Special Proceedings No. 2641. a guardianship proceedings for the incompetent
Soledad Rodriguez of Sriaya, Quezon, which originally pertained to Branch 1, Court of First Instance of Quezon, then
presided by the late Hon. Judge Vicente Arguelles, 5 later on succeded by Hon. Judge Ameurfina Melencio-Herrera (now
Associate Justice of the Supreme Court). In 1966, respondent Judge of Branch IV-Calauag of the Court of First Instance of
Quezon, Hon. Union C. Kayanan, took cognizance of Special Proceedings No. 2641 when the Secretary of Justice
authorized respondent Judge to help unclog the docket of Branch I at Lucena City, Quezon.
For clarity, We have hereunder summarized the sequence of events and material dates as it appears in the records from
the time respondent Judge of Branch IV of the Court of First Instance of Quezon took cognizance of Special Proceedings
No. 2641.
On December 20, 1966, respondent Judge authorized and approved, upon motion of Fransisco Rodriguez, Jr. (guardian of
Soledad Rodriguez), hereinafter referred to as private respondent, the sale to Luis Parco and Virginia Bautista, hereinafter
referred to as the petitioners, of Lot Nos. 3437 (613 sq. meters) and 4389 (4,068 sq. meters) covered by TCT Nos. 16939
and 18035, respectively, for the sum of P4,400.00 for the support, maintenance and medical treatment of the ward
Soledad Rodriguez.
On January 6, 1967, respondent Judge again approved and authorized, upon motion of private respondent, the sale to
petitioners of Lot No. 1207 covered by TCT No. 16944 containing an area of 63,598 sq. meters, more or less, for the same
reason. All the sales of the three (3) lots being absolute, new transfer certificates of title were issued in the name of
petitioners.
On May 13, 1968, or almost one year and five months from the approval of the sale of Lot Nos. 3437, 4389, and 1207,
private respondent filed an urgent petition in the Court of First Instance of Quezon, Ninth Judicial District, invoking Section
6 Rule 96 of the Revised Rules of Court, praying that an order be immediately issued requiring petitioners to appear
before the court so that they can be examined as regards the three (3) lots in question which are allegedly in danger of
being lost, squandered, concealed and embezzled and upon failure to do so or to comply with any order that may be
issued in relation therewith to hold them in contempt of court. The pertinent allegations read as follows:
xxx xxx xxx
1. That as legal guardian (private respondent) of the abovenamed incompetent and upon authorization by
this Hon. Court he has transferred in good faith to the spouses LUIS PARCO and VIRGINIA (UY) BAUTISTA,
both of Atimonan, Quezon, the titles over the following realties belonging to his ward, namely:
a. A parcel of land (Lot No. 3437 of the Cadastral Survey of Sariaya) with the
improvements thereon situated in the Municipality of Sariaya ... containing an area of Six
Hundred Thirteen (613) sq. meters, more or less;
b. A parcel of land (Lot No. 4389 of the Cadastral Survey of Sariaya) situated in the
Municipality of Sariaya ... containing an area of Four Thousand And Sixty-Eight (4,068) sq.
meters, more or less;
c. A parcel of land (Lot No. 1207 of the Cadastral Survey of Sariaya) situated in the
Municipality of Sariaya ... containing an area of Sixty-three Thousand Five Hundred and
Ninety-eight (63,598) sq. meters, more or less.
2. That anent the first TWO (2) PARCELS above-described he transferred the titles thereto in favor of the
recited spouses under a loan agreement (not an absolute sale thereto and with the express commitment
in writing that he can recover the same within three (3) months from December 19, 1966, ...
That prior to the expiration of the cited period of three months, he tried to recover the stated two parcels
of land from them, however, the same was not carried out because he was then transacting with them the
sale of PARCEL THREE and under the Agreement that they will not sell cede, or convey the mentioned two
(2) lots to anyone (except to petitioner now private respondent herein) and once the stated PARCEL
THREE has been sold at the price of P48,000.00 the borrowed amount of P4,400.00 shall be deducted
therefrom and said two parcels shall be returned to him;
3. That recently, he discovered that the cited couple, in bad faith and in violation of their agreement and
of the trust and confidence which he had reposed upon them, have fraudulently ceded and transferred
the titles over the stated two parcels of land to another person, allegedly for a price of (over P30,000.00)
and in spite of his repeated request upon them to reconvey to him the titles thereto or to turn over to him
the total proceeds they have received (minus the sum of P4,400.00), they have maliciously and unjustly

refused to do so, and are intending to keep and retain said amount for their own personal use and
benefit;
4. That as already adverted to in the previous paragraph hereof, the mentioned couple induced him to
transfer to them the title of parcel three, so that they can sell the same for the agreed price of P48,000.00
and believing in good faith that the cited spouses are honest and trustworthy, he agreed and executed
the requisite document transferring the title to them subject to the following conditions:
a. They shall pay to him the amount of Twelve Thousand (Pl2,000.00) Pesos after they
have secured a buyer of the property, ...
b. They shall pay to NIEVES ALCALA and PURA AGCAOILE (who are private respondent's
agents and representatives in negotiating the sale of parcel three) the sum of Fifteen
Thousand (P15,000.00) Pesos after they have sold the realty, ...
5. That recently, he discovered that the cited couple have already sold and ceded the mentioned parcel
three to another person, and despite his repeated request upon them to pay and deliver to him or to
Nieves Alcala the sum of money specified in the foregoing paragraph, they have maliciously and unjustly
failed and refused to do so, and have fraudulently retained the said amount of money for thier own
personal use and benefit;
6. That the enumerated parcels of land together with all the proceeds derived therefrom, undeniably
belonged to his ward as trust properties, which are subject to the disposition of this Hon. Court, and due
to the mentioned fraudulent, malicious and dishonest acts of the above- named couple, are in danger of
being lost, squandered, concealed and embezzled;
xxx xxx xxx
In an answer dated June 5, 1968, petitioners contended mainly, among others, that the three lots have been conveyed to
them by deeds of absolute sale which were duly approved by the guardianship court.
Pre-trial hearings were set for possible amicable settlement beginning on September 6, 1968 but was postponed and reset
to October 9, 1968 on petitioners' counsel motion. On October 9, 1968, both parties and their counsels appeared but
failed to reach any amicable settlement. Again, the pre-trial hearing was reset to November 28 and 29, 1968 but was
likewise postponed to January 8, 1969 at petitioners' counsel motion.
On January 8, 1969, for failure to petitioners and their counsel to appear although there was a telegram requesting for
postponement, respondent Judge issued an order, 6 authorizing private respondent to present evidence before the Clerk
of Court who was instructed to make the corresponding report which shall be made as the basis of this decision.
In a petition dated January 30, 1969, petitioners prayed for the reconsideration of the order of January 8, 1969 pointing
out, among others, that there was a First Order dated July 29, 1968, 7 issued by then Judge Ameurfina M. Herrera,
Presiding Judge of Branch I, Court of First Instance of Quezon that said branch "will henceforth take cognizance of this
case" and thus, asked for the transfer of the incident sought before Branch IV to Branch I for proper action.
On February 20, 1969, respondent Judge, finding the petition for reconsideration well-grounded, issued an order directing
the Clerk of Court to transmit the records of the case to the Court of First Instance, Branch I, Lucena City, quoted below:
ORDER
Acting on the Petition for Reconsideration filed by counsel for the respondent on February 4, 1969,
considering that Hon. A. Melencio-Herrera, Presiding Judge of Branch 1, CFI, Lucena City, issued an order
on July 29, 1968, the dispositive portion of which is quoted as follows. 'WHEREFORE, it is hereby
confirmed that this court will henceforth take cognizance of this case,' and considering that this special
proceedings actually belongs to Branch I, although incidents therein were taken cognizance of by the
Presiding Judge of CFI, Branch IV when he was holding court session in Lucena City and notwithstanding
Administrative Order No. 261 dated October 7, 1968 which states that 'This administrative order shall not
apply to cases pending in the different salas which have been partially tried and shall remain therein for
final disposition', because to case was originally filed during the incumbency of the late Judge Vicente
Arguelles, finding therefore the said petition to be well-grounded, the Clerk of Court is hereby authorized
to transmit these records to the Deputy Clerk of Court, CFI, Branch I, of Lucena City.
SO ORDERED.
Given at Calauag, Quezon this 20th day of February, 1969.
(SGD.) UNION C. KAYANAN Judge

On March 24, 1969, Private respondent, without the assistance of a counsel, filed before Branch IV, Court of First Instance
of Quezon an amended petition praying that the three (3) lots subject matter of the original urgent petition be ordered
reconveyed to the ward in said Special Proceedings No. 2641 for he was informed that petitioners win transfer and
properties to third person.
On March 26, 1969, the Clerk of Court of Branch IV, Court of First Instance of Quezon, issued the notice of hearing of the
amended petition filed by private respondent dated March 24, 1969 notifying counsel for both parties that the case will be
heard before Branch IV on April 10, 1969 at 2:30 p.m. at Calauag, Quezon. On the date set for hearing, counsels for both
parties appeared but for failure of the petitioners to appear respondent Judge issued an order 8reiterating its previous
order dated January 8, 1969 allowing private respondent to present his evidence ex-parte and considered the case
submitted for resolution.
On April 15, 1969, respondent Judge rendered a decision 9 on the basis of the report of the Clerk of Court dated February
19, 1969 ordering petitioners to reconvey the three (3) parcels of land to private respondent.
On June 14, 1969, petitioners moved to reconsider the decision stating, among others, that respondent Judge has no
authority to take cognizance of the case which, according to petitioners, is an issue raised in the petition for
reconsideration of the court order of January 8, 1969, and that the decision was without legal basis. Petitioners prayed that
the case or incident be transferred to the proper court which had taken cognizance of this case.
On June 23, 1969, respondent Judge denied the petition for reconsideration for lack of merit. Petitioners' counsel received
the said order of denial on June 26, 1969.
Meanwhile, on June 21, 1969, private respondent filed an urgent motion in Branch IV praying that petitioners be required
to appear before the court to be examined as regards the properties of the ward and to explain why they should not be
cited for contempt for not complying with a final order of the court directing the reconveyance of the three (3) parcels of
land to private respondent.
On June 23, 1969, respondent Judge, acting on the urgent motion, issued an order 10 directing petitioners to explain why
they should not be cited for contempt of court pursuant to par. (b) Section 3 Rule 71 of the Revised Rules of Court.
On June 27, 1969, petitioners filed an urgent motion claiming that the urgent motion for contempt of court was premature
considering that the decision ordering the reconveyance of the properties in question has not yet become final and
executory and is still subject to appeal. In their prayer for the setting aside of the order of June 23, 1969, petitioners
informed the court that they win appeal the decision to the Court of Appeals and that the corresponding notice of appeal,
appeal bond and the record on appeal will be filed in due time.
The following day, June 28, 1969, petitioners filed the notice of appeal and appeal bond with a manifestation that the
record on appeal will be filed in due time.
On July 3, 1963, respondent Judge issued an order 11 denying for lack of merit petitioners' urgent motion of June 27, 1969,
thus declaring that the order dated June 23, 1969 stands considering that petitioners' right to appeal has already lapsed.
In the same order, petitioners were given ten (10) days upon receipt to explain why they should not be cited for contempt
pursuant to Section 4, Rule 71 in relation to Section 6, Rule 96 of the Revised Rules of Court.
On July 7, 1969, petitioners filed a petition for extension of ten (10) days to expire on July 20, 1969 within which to file the
record on appeal. In an order 12 dated July 9, 1969, respondent Judge denied the said petition for having been filed
beyond the reglementary period.
On July 10, 1969, petitioners filed an unverified second petition for reconsideration of the decision dated April 15, 1969
and the order of July 3, 1969 contending that Branch IV lost its jurisdiction over the raise from the time the order dated
February 20, 1969 was issued by Judge A. Melencio- Herrera; that the proceedings under Section 6 Rule 96 do not
authorize the Hon. Court (Branch IV) to determine the question of right over the property or to order delivery thereof; that
the purpose is merely to elicit information or secure evidence from the person suspected of having embezzled, concealed
or conveyed away any personal property of the ward; that if the court finds sufficient evidence showing ownership on the
part of the ward, it is the duty of the guardian to bring the proper action.
On the other hand, on July 17, 1969, a motion for reconsideration of the order dated July 9, 1969 was filed by petitioners
claiming that all the pleadings related to the intended appeal were filed within the period allowed by the Revised Rules of
Court. After an opposition was filed, respondent Judge issued an order on 13 July 18, 1969 denying the second petition for
reconsideration for lack of basis and on the ground that the period to appeal either the decision or any of the previous
orders had already expired.
On August 20, 1969, petitioners went to the Court of Appeals on a petition for certiorari with preliminary injunction
pleading nullity of the decision of the Court of First Instance, Branch IV,

Quezon dated April 15, 1969 on grounds of lack of jurisdiction and grave abuse of discretion in denying their right of
appeal.
On September 27, 1969, the Court of Appeals dismissal the petition for lack of merit. 14 On motion by petitioners, the
dismissal was reconsidered in a split resolution dated December 15, 1969 thereby giving due course to the petition, and
private respondent was required to answer.
After private respondent filed their answer and the parties submitted their respective memoranda, the Court of Appeals, in
a three-to-two vote decision 15 dated August 21, 1970 dismissed the petition.
On motion for reconsideration filed by petitioners, the Court of Appeals, in a split resolution 16
dated October 10, 1970
granted the motion for reconsideration and set aside the decision dated August 20,1970.
However, upon motion for reconsideration filed by private respondent, the Court of Appeals, in a three-to-two vote
resolution 17 dated January 20, 1971, reverted to its decision of August 21, 1970 dismissing the petition.
Hence, the instant petition for review on the following assignment of errors, to wit:
THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS ERRED IN SUSTAINING
THE RETENTION BY THE RESPONDENT JUDGE OF BRANCH IV-CALAUAG OF THE CASE OF BRANCH I-
LUCENA CITY AFTER HE ORDERED THE RETURN OF THE CASE TO BRANCH I,LUCENA CITY TO WHICH THE
CASE BELONGS AND AFTER THE PRESIDING JUDGE OF BRANCH I LUCENA CITY HAD RESUMED AND
EXERCISED HER JURISDICTION OVER SAID CASE.
II
ASSUMING THAT THE RESPONDENT JUDGE COULD LEGALLY AND VALIDLY RETAIN JURISDICTION OVER
THE CASE OF BRANCH I LUCENA CITY DESPITE THE CIRCUMSTANCES ADVERTED TO IN THE FIRST
ASSIGNED ERROR, THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS
ERRED IN SANCTIONING THE RESPONDENT JUDGE'S ASSUMPTION OF JURISDICTION TO ADJUDICATE
THE ISSUE OF OWNERSHIP AND/OR ORDER RECONVEYANCE OF PETITIONERS' PROPERTY SOLD TO
THEM AND TITLED IN THEIR NAMES, NOTWITHSTANDING THE LIMITED JURISDICTION OF A
GUARDIANSHIP COURT.
III
THE MAJORITY OF THE DIVISION OF FIVE JUSTICES OF THE COURT OF APPEALS ERRED IN NOT HOLDING
THAT THE JUDICIAL AUTHORITY AND APPROVAL OF THE SALES ARE CONCLUSIVE UPON THE VALIDITY
AND REGULARITY OF SAID SALES BETWEEN THE PARTIES AND THEIR SUCCESSORS IN INTEREST.
IV
BY SILENCE THE QUESTIONED ORDER OF THE RESPONDENT JUDGE ENFORCING HIS DECISION BY
CONTEMPT PROCEEDINGS.
DENIAL OF PETITIONERS' RIGHT TO APPEAL.
This petition was given due course in view of the peculiar incidents during its trial stage where, as borne out by the
records, two (2) branches of the Court of First Instance of Quezon Province, 9th Judicial District assert jurisdiction over
Special Proceedings No. 2641, which, when the decision rendered by one branch was brought in the Court of Appeals on
certiorari with preliminary injunction, the Special Division of Five Justices, in a three-to-two vote resolution in four (4)
occasions after its dismissal for lack of merit on September 27, 1968, reconsidered the same and was given due course on
December 15, 1968, again dismissed on August 21, 1970, but again reconsidered on October 10, 1970, until finally
dismissed on January 20, 1971 when the Special Division of Five reverted to its August 21, 1970 resolution. The Special
Division was equally split on the issue whether or not the Court of First Instance, Branch IV, Calauag, Quezon, acting with
limited jurisdiction as a guardianship court under Section 6 Rule 96 of the Rules of Court, has the authority to adjudicate
the question of ownership and order the reconveyance of the three (3) parcels of land in question to private respondent,
guardian of the ward Soledad Rodriguez. On these two (2) principal issues, We are called upon to finally resolve the legal
controversy peculiar on this case.
After the parties submitted their respective briefs, the case was deemed submitted for decision on October 28, 1971.

In a Resolution 18 of this Court dated November 29, 1978, the urgent manifestation and motion of Leonisa S. Rodriguez,
the surviving spouse of Mario Rodriguez (brother of the ward) that the ward Soledad Rodriguez died on September 15,
1970 and private respondent Francisco Rodriguez, Jr. died on October 24, 1973; and that the heirs of the ward be
substituted as the private respondents in this case was noted. To begin with, the principal issue al hand is whether or not
respondent Judge of the Court of First Instance of Quezon, Branch IV-Calauag has the authority or power to take further
action in Special Proceedings No. 2641 after the Presiding Judge of the Court of First Instance of Quezon, Branch I-Lucena
City asserted its jurisdiction by issuing two (2) orders dated July 29, 1968 and respondent Judge correspondingly ordered
the return of the case to Branch I in an order dated February 20,1969.
Petitioners maintain that respondent Judge of Branch IV, Court of First Instance of Quezon has no power or authority to
retain jurisdiction over Special Proceedings No. 2641 which, at its inception, originally pertained to Branch I-Lucena City,
Court of First Instance of Quezon. To support such chum, petitioners contend that the Second Order dated July 29, 1968
requiring private respondent for an inventory and accounting of the ward's property confirms that the Presiding Judge of
Branch I has resumed its jurisdiction over said case, more so, when respondent Judge ordered on February 20, 1969 the
transmittal of the records of the case to the Deputy Clerk of Court, Court of First Instance, Branch I-Lucena City.
Private respondent, on the other hand, justifies the retention of jurisdiction by respondent Judge over Special Proceedings
No. 2641 contending, among others, that the two (2) orders dated July 29, 1968 issued by then Judge A. Melencio-Herrera
are not sufficient bases for claiming that Branch IV has been deprived of its, jurisdiction because jurisdiction is vested upon
the court not upon any particular branch or judge thereof and the issuance of such orders constitute undue interference
with the processes and proceedings already undertaken by respondent Judge; that petitioners are guilty of estoppel when
they failed to raise the issue of jurisdiction from the very beginning and when they voluntarily appeared before
respondent Judge, filed their answer and other pleadings, and moved for postponements of the scheduled dates of
hearing.
We sustain petitioners' stand. Of course, jurisdiction is vested in the court not in any particular branch or judge, and as a
corollary rule, the various branches of the Court of First Instance of a judicial district are a coordinate and co-equal
courts 19 one branch stands on the same level as the other. Undue interference by one on the proceedings and processes
of another is prohibited by law. In the language of this Court, the various branches of the Court of First Instance of a
province or city, having as they have the same or equal authority and exercising as they do concurrent and coordinate
jurisdiction should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders
or judgments. 20 A contrary rule would obviously lead to confusion and might seriously hinder the administration of
justice. A judge is competent to act so long as the case remains before him, but after it passed from his branch to the
other, the case could be acted upon by the judge of the latter branch. 21 Otherwise, an anomalous situation would occur at
the detriment of the party litigants who are likewise confused where to appear and plead their cause.
In the case before Us, there is no dispute that both Branch I and Branch IV of the Court of First Instance of Quezon, have
jurisdiction over the subject matter, a guardianship proceedings under Section 1, Rule 92 of the Rules of Court and Section
44(a) of the Judiciary Act of 1948. While it is recognized that when a case is filed in one branch, jurisdiction over the case
does not attach to the branch or judge alone, to the exclusion of the other branches, 22 We are of the view however,
considering the unusual circumstances and incidents attendant in this case the situation in the case at bar is different.
Here, it must be noted that the Presiding Judge of Branch I asserted and resumed its prior jurisdiction by issuing two (2)
orders, one of which requires private respondent to render an inventory and accounting of the property of the ward. On
the other hand, respondent Judge of Branch IV, in confirmation of such resumption of jurisdiction, ordered the return of
the records of Special Proceedings No. 2641 to Branch I-Lucena City, Court of First Instance of Quezon, but, instead of
regularly relinquishing jurisdiction over the case, respondent Judge continued to take further action on the case in total
disregard of the two (2) orders of the Presiding Judge of Branch I. Should one branch be permitted to equally assert,
assume or retain jurisdiction over a case or controversy over which another coordinate or co-equal branch has already
resumed its jurisdiction, We would then sanction undue interference by one branch over another. With that, the judicial
stability of the decrees or orders of the courts would be a meaningless precept in a well-ordered administration of justice.
There is no question that the prior proceedings had in Branch IV by respondent Judge were valid and regular as they were
admittedly authorized by the Secretary of Justice. It must be emphasized however, that Branch IV lost its jurisdiction over
Special Proceedings No. 2641 when respondent Judge ordered the return of the records to Branch I after having been
informed in a motion for reconsideration filed on January 30, 1969 of the existence of the two (2) orders issued by the
Presiding Judge of Branch 1. From that point of time, all subsequent proceedings and processes in connection with or
related to Special Proceedings No. 2641 undertaken by the respondent Judge became irregular. It amounted to an undue
interference with the processes and proceedings of Branch I.
Nevertheless, from the standpoint of the pertinent law on the matter, it may be observed that the detail of respondent
Judge of Branch IV stationed permanently in Calauag, Quezon to Branch I in Lucena City, Quezon authoritatively rests on
the provision of Section 51 of the Judiciary Act of 1948 which reads:
Section 51. Detail of judge to another district or province.-Whenever a judge stationed in. any province or
branch of a court in a province shag certify to the Secretary of Justice that the condition of the docket in
his court is such as to require the assistance of an additional judge, or when there is any vacancy in any
court or branch of a court in a province, the Secretary of Justice may, in the interest of justice, with the
approval of the Supreme Court and for a period of not more than three months for each time, assign any
judge of any court or province, whose docket permits his temporary absence from said court, to hold
sessions in the court needing such assistance or whether such vacancy exists. No judge so detailed shall
take cognizance of any case when any of the parties thereto objects and the objection is sustained by the
Supreme Court. (emphasis supplied)
xxx xxx xxx
Apparently, when the circumstances contemplated under Section 51 of the Judiciary Act of 1948 occur, the detailed Judge
holds sessions in the court needing such assistance or where such vacancy exists as if he is the presiding judge of that
particular branch where the clogged docket or vacancy exists. The detailed Judge does not hold sessions therein as if he is
the Presiding Judge of the branch where he is originally or permanently designated. In the case before Us, respondent
Judge Kayanan was duly authorized to help unclog the docket of Branch I stationed in Lucena City, Quezon which at that
time was rendered vacant due to the death of Judge Vicente Arguelles. When respondent Judge Kayanan took cognizance
of the cases left by Judge Arguelles, pending the designation of a replacement, he merely sits as a judge of Branch I, Court
of First Instance of Quezon Province. In the event of designation of a new Presiding Judge of Branch 1, accepted practice
and procedure of speedy administration of justice requires that the detailed judge turns over the cases he took
cognizance of to the new Presiding Judge. Justification for the continued retention of jurisdiction over those cases in the
case at bar appears to be not convincing.
We find no plausible indication how estoppel could operate against petitioners. It is true that petitioners filed their answer
to the urgent petition of private respondent and appeared before respondent Judge of Branch IV without questioning the
latter's authority to hear the case. The answer to the urgent petition of private respondent dated May 13, 1968 was filed
by petitioners on June 5, 1968 or almost two (2) months before Judge Melencio-Herrera of Branch I issued the two (2)
orders dated July 29, 1968 asserting jurisdiction over the case. The appearances of petitioners and counsel in the sala of
respondent Judge during the intervening period from July 29, 1968 were apparently due to the fact that petitioners came
to know only of the two orders of Branch I when they examined the records of the case prompted by the manifestation of
the counsel of private respondent, in the course of the proceedings in Branch IV, to submit for an accounting in
connection with the administration of the properties of the ward Soledad Rodriguez. Petitioners manifested such
information to respondent Judge in a petition for reconsideration of the order of January 8, 1968 authorizing the
presentation of evidence ex parte. The silence or inaction of petitioners was therefore due to their lack of knowledge of
respondent Judge's lack of authority to retain or take further action on the case. Such lack of authority was confirmed
when respondent Judge, acting on the petition for reconsideration dated January 30, 1969, issued on February 20, 1969 an
order authorizing the return of the records of the case to Branch I. In claiming that the records referred to by the order
concern the first portion of the records of Special Proceedings No. 2641 and not the second portion containing the urgent
petition filed by private respondent on May 13, 1968, private respondent would then encourage split jurisdiction of courts
which is abhorred by the law.
Assuming that Branch IV-Calauag, Court of First Instance of Quezon has jurisdiction over Special Proceedings No. 2641
notwithstanding the attendant circumstances adverted to earlier, We now dwell on another issue, which standing alone
would decisively resolve the assigned errors raised in this petition, that is, whether or not Branch IV exercising limited and
special, jurisdiction as a guardianship court under Section 6 Rule 96 of the Rules of Court has jurisdiction to order the
delivery or reconveyance of the three parcels of land in question to the ward, represented herein by private respondent.
In two leading cases, Castillo vs. Bustamante, 64 Phil. 839 and Cui vs. Piccio et al, 91 Phil. 712, this Court laid the rule on
the issue raised before Us as interpreted in the light of Section 6 Rule 96 of the Rules of Court which reads:
Section 6. Proceedings when person suspected of embezzling or concealing property of the ward.— Upon
complaint of the guardian or ward, or of any person having actual or prospective interest in the estate of
the ward as creditor, heir, or otherwise, that anyone is suspected of having embezzled, concealed, or
conveyed away any money, goods, or interest, or a written instrument, belonging to the ward or his
estate, the court may cite the suspected person to appear for examination touching such money, goods,
interests, or instrument, and make such orders as will secure the estate against such embezzlement,
concealment or conveyance.
In Cui vs. Piccio et al., supra, this Court held that the jurisdiction of the court in guardianship proceedings, ordinarily, is to
cite persons suspected of having embezzled, concealed or conveyed the property belonging to the ward for the purpose
of obtaining information which may be used in an action later to be instituted by the guardian to protect the right of the
ward. Generally, the guardianship court exercising special and limited jurisdiction cannot actually order the delivery of the
property of the ward found to be embezzled, concealed or conveyed. In a categorical language of this Court, only in
extreme cases, where property clearly belongs to the ward or where his title thereto has been already judicially decided,
may the court direct its delivery to the guardian. 23 In effect, there can only be delivery or return of the embezzled,
concealed or conveyed property of the ward, where the right or title of said ward is clear and undisputable. However,
where title to any property said to be embezzled, concealed or conveyed is in dispute, under the Cuicase, the
determination of said title or right whether in favor of the person said to have embezzled, concealed or conveyed the
property must be determined in a separate ordinary action and not in guardianship proceedings.
In the case at bar, We are not prepared to say, at this premature stage, whether or not, on the basis alone of the pleadings
of the parties in the trial court, the title or right of the ward Soledad Rodriguez over the three (3) parcels of land in
question is clear and undisputable. What is certain here is the fact that the sale of the properties in question were duly
approved by the respondent Judge in accordance with the provisions on selling and encumbering of the property of the
ward under Rule 97 of the Rules of Court. It must be noted that while the original urgent petition dated May 13, 1968
prayed for the examination of petitioners herein regarding the alleged concealing, conveyancing and embezzling of the
questioned properties, the amended petition dated March 24, 1969 asked for reconveyance.
Moreover, it may be observed that private respondent contended that the sale of the first two lots was actually a loan
agreement with right of recovery while that of the third lot was subject to condition, hence, a fictitious or simulated sale.
On the other hand, according to petitioners, the sales were all absolute and protected by the Torrens System since new
transfer certificate of titles were issued in their name. Apparently, there is a cloud of doubt as to who has a better right or
title to the disputed properties. This, We believe, requires the determination of title or ownership of the three parcels of
land in dispute which is beyond the jurisdiction of the guardianship court and should be threshed out in a separate
ordinary action not a guardianship proceedings as held in Cui vs. Piccio supra.
The ruling in Castillo vs. Bustamante, 64 Phil. 839, relied upon by private respondent finds no application in the instant
case. As differentiated from the case at bar, in Castillo case, the right or title of the ward to the property in dispute was
clear and undisputable as the same was donated to her through compromise agreement approved by the court which title
had the authority of res judicata. As enunciated above, the right or title of the ward to the properties in question is in
dispute and as such should be determined in a separate ordinary action.
Furthermore, private respondent's claim that petitioners are barred by laches to raise the issue of jurisdiction is without
merit. In support of such claim, private respondent invoked the exception laid down in Tijam vs. Sibonghanoy, 23 SCRA 29,
to the rule that the lack of jurisdiction over the subject matter is fatal and may be raised at any stage of the proceedings;
that it is conferred only by law, and in the manner prescribed by law and an objection on the lack of jurisdiction cannot be
waived by the parties; and the infirmity cannot be cured by silence, acquiescence, or even by express consent, or win of
the parties. 24
The doctrine laid down in Tijam vs. Sibonghanoy, supra, and in the latter case of Rodriguez vs. Court of Appeals, 29 SCRA
419 is not applicable in the case at bar. In Tijam case, the appellant had all the opportunity to challenged the court's
jurisdiction in the court a quo as well as in the Court of Appeals but instead invoked its jurisdiction to obtain affirmative
relief and submitted its case for final adjudication on the merits. It was only after an adverse decision was rendered by the
Court of Appeals and fifteen (15) years later from the inception of the case that it finally chose to raise the question of j
jurisdiction. I t is clear that t the circumstances present in Tijam case are not present here. The petitioners in the instant
case challenged the authority of the trial court to take further cognizance of the case the moment they become aware of
Branch I assuming jurisdiction. The lack of jurisdiction was raised in a petition for reconsideration of the order dated
January 8, 1969, in a petition for reconsideration of the decision dated April 15, 1969, in a second petition for
reconsideration of the said decision, and alleged as an additional ground in the petition for certiorari in the Court of
Appeals. In any case, the operation of the principle of estoppel on the question of jurisdiction seemingly depends upon
whether the lower court actually had jurisdiction. If it had no jurisdiction, but the case was tried and decided upon the
theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same must
exist as a matter of law, and may not be conferred by consent of the parties or by estoppel. 25
As respondent trial court has no jurisdiction, We deem it unnecessary to pass upon the assigned errors raised in the
petition.
WHEREFORE, the Resolution of the Court of Appeals dated January 20, 1971 is hereby reversed and set aside, and the
decision rendered by respondent Judge of Branch IV-Calauag, Court of First Instance of Quezon dated April 15, 1969 and
the orders issued thereafter are declared null and void, and the case is hereby remanded to Branch I-Lucena City, Court of
First Instance of Quezon for further proceedings.
SO ORDERED.
Separate Opinions
AQUINO, J.:, dissenting:
I dissent. I vote for the affirmance of the decision of Judge Union C. Kayanan, Calauag Branch IV of the Court of First
Instance of Quezon Province dated April 15, 1969 in Special Proceeding No. 2641, entitled "Guardianship of the
Incompetent Soledad Rodriguez, Francisco Rodriguez, Jr., Guardian".
In that decision, Judge Kayanan ordered the spouses Luis Parco and Virginia Bautista to reconvey Lot No. 3437 (613
square meters), Lot No. 4389 (4,069 square meters) and Lot No. 1207 (63,598 square meters), all of the Sariaya, Tayabas
cadastre, to the guardian Francisco Rodriguez, Jr. upon the latter's payment to the said spouses of the sum of twelve
thousand pesos which he had borrowed from them (p. 65, Rollo).
Since the ward died intestate on September 15, 1970 and the guardian died on October 24, 1973, the reconveyance
should be made to the ward's heirs, namely, her sisters, Concepcion Rodriguez- Sapalo and Milagros Rodriguez-Sanchez,

and the children of the ward's deceased brother Mario Rodriguez (who died on March 8, 1972), namely, Mario, Jr.,
Ramoncito, Liza and Rodulfo, all surnamed Rodriguez, represented by their guardian, their mother, Leonisa S. Rodriguez
(pp. 232-236, Rollo). Said heirs should pay the Parco spouses the sum of twelve thousand pesos as a condition for the
reconveyance.
It should be noted that the said guardianship proceedings was assigned originally to Branch I presided over by Judge
Ameurfina Melencio-Herrera. It was transferred to Branch IV presided over by Judge Kayanan who was detailed at Lucena
City to assist in decongesting the dockets of Branches I and II.
Judge Kayanan had authorized the sale of the three lots to the Parco spouses so that the proceeds of the sale could be
used for the maintenance of the ward. it turned out that the sales or transfers were made under certain conditions which
were violated by the Parco spouses.
A copy of Judge Kayanan's decision was received by petitioners' counsel on May 29, 1969. Sixteen days later or on June
14, they filed a motion for reconsideration. The order denying that motion was received by the petitioners on June 26.
They filed their notice of appeal and appeal bond on June 28 (pp- 86 and 92, CA Rollo).
The last day for submitting the record on appeal was July 10. The petitioners asked for a ten-day extension within which to
file their record on appeal Instead of submitting it, they filed on July 10 a second motion for reconsideration on the
ground of lack of jurisdiction.
The lower court denied the motion for extension of time within which to file the record on appeal It also denied the
second motion for reconsideration in its order of July 18, 1969.
The petitioners did not file any record on appeal They filed on August 20, 1969 a petition for certiorari in the Court of
Appeals to set aside the said decision of April 15. The Court of Appeals in its extended resolution of September 27, 1969
dismissed the petition on the ground that the petitioners' remedy was an appeal which they had abandoned.
That resolution was reconsidered. The petition was given due course. The Court of Appeals in its decision of August 21,
1970 dismissed the petition. (Per Justice Eulogio Serrano with Alvendia and Nolasco JJ., concurring. Justice Enriquez and
Yatco dissented.)
Petitioners' motion for the reconsideration of that decision was denied in the resolution of January 20, 197 1. (Per Justice
Eulogio Serrano with Justices Nolasco and Soriano concurring. Justices Enriquez and Alvendia dissented.)
The petitioners appealed to this Court. The decision of the Court of Appeals should be affirmed because (1) the petitioners
inexcusably did not file a record on appeal (2) the question as to whether the guardianship court should set aside the
conveyances to the petitioners is not a jurisdictional question but merely a procedural matter which could be waived
(Lachenal vs. Salas, L-42257 June 14, 1976, 71 SCRA 262) and (3) the petitioners and the guardian hoodwinked the
guardianship court to the ward's prejudice.
It is the duty of the courts, in the exercise of the State's prerogative to protect persons under disability (parents patriae) to
set aside the transfers to the petitioners and thus avoid unjust enrichment at the expense of the ward and do justice in this
case. Technicalities should be eschewed.
As to the power of a branch of the Court of First Instance to act in a case transferred to it from another sala of the same
court, see Eleazar vs. Zandueta, 48 Phil. 193; Hizon Mercado vs. Ocampo, 72 Phil. 318; San Miguel Brewery, Inc. vs. Court of
Industrial Relations, 91 Phil. 178.
12. G.R. No. L-3071 May 29, 1950 SALVACION LOPEZ, petitioner, vs. JOSE TEODORO, Sr., Judge of the Court
of First Instance of Occidental Negros, EULALIO LOPEZ, Jr., and JESUS JALBUENA, respondents.
TUASON, J.:
Eulalio Lopez, Sr., an incapacitated under the judicial guardianship of Eulalio Lopez, Jr., was the exclusive and absolute
owner of an hacienda in Silay, Negros Occidental, having a total area of over 100 hectares. On September 3, 1948, the
Court of First Instance, acting upon a motion of Senen L. Gamboa and Adelaida Gamboa filed in the proceedings for
guardianship, ordered the guardian to pay the movants P7,312 plus 12 per cent interest from August, 1944, amount which
represented loans properly authorized by court. The order provided that if the guardian did not have funds to pay those
debts, he should take the necessary steps for the sale of some of the property of the guardianship.
In pursuance of this authority, the guardian sold the above tract of land, the only property of which the incapacitated was
possessed, on January 11, 1949, to Jesus bound himself to pay the mortgage debt and other obligations aggregating
P22,346.30, and to satisfy the balance in two installments.
It is admitted that in authorizing the sale of some of the property of the incapacitated, the court did not follow the
requirement of section 2 of Rule 96 to the effect that the court shall direct the next of kin of the ward, and all persons

interested in the estate, to appear at a reasonable time and place to be specified in the order, to show cause why the
prayer for the sale should not be granted. Nor did the court specify, as provided by section 4 of the same Rule, whether
the sale should be effected publicly or privately.
Although Eulalio Lopez, Jr. was the judicial guardian, the incapacitated was and is under the actual care and custody of his
sister, Salvacion Lopez. Believing that the sale was prejudicial to her brother's interest, Salvacion Lopez filed a motion for
reconsideration of the court's order authorizing said sale, and upon the motion being denied, she brought this petition
for certiorari and mandamus, contending that the sale was null and void by reason of the court's failure to adhere to Rule
96, and praying that the orders of the respondent court be corrected and the said court directed to revoke the sale.
The judicial guardian, Eulalio Lopez, Jr., and the vendee, Jesus Jalbuena, have filed separate answer and raised several
defenses. These are, first, that the petitioner's remedy, if she has any, is by appeal and not certiorari and/or mandamus;
second, that the petitioner has no interest whatsoever in the subject matter of her petition; third, that whether the sale is
prejudicial or not is a proper ground for a separate action and not certiorari or mandamus; fourth, that the sale was not
made in contravention of existing laws; and fifth, that the court, as probate court, has lost jurisdiction over the property
sold because the land is now registered in the name of the purchaser to whom a new transfer certificate of title has been
duly issued.
Without deciding the legality or illegality of the sale, or whether this matter should be ventillated in an ordinary action
instead of in a proceeding for certiorari, it is evident that appeal and not certiorari or mandamus is the proper remedy.
Unquestionably, the court of first instance in which the guardianship proceedings were pending had jurisdiction to order
the questioned sale. The court's jurisdiction is not disputed. Nor was there an abuse of discretion, judging from the
averments in the answers. It appears that the outstanding indebtedness of the guardianship properly and legally incurred
amounted to P36,833.66, part of which was due the petitioner for the support and maintenance of the incapacitated.
The other defense that does not leave much room for discussion is that the petitioner has no legal interest in her
complaint. The incapacitated has children, all of age, one of whom is the judicial guardian, while the petitioner is only the
ward's sister. Not being Eulalio Lopez's forced heir, she was not prejudiced by the sale she seeks to impugn. It is true that
she was a creditor but she does not claim any right to be notified of the sale as such creditor, and her credit was not
impaired. On the contrary, she was benefited by the sale in that she was paid what was due her from its proceeds. As to
the other creditors, they did not appear to have any objection to the action taken by the judicial guardian and authorized
by the court.
The petitioner insist that she is next of kin. She is in error. "Next of kin" within the meaning of Rule 96 are relatives whose
relationship is such that they are entitled to share in the estate as distributees. (33 C.J., 930-931.) "Next of kin" is also
defined in Black's Law Dictionary, 3rd ed., as to mean not the next of kindred but those relatives who share in the estate
according to the statute of distribution including those claiming per stripes or by representation.
None of the children of the incapacitated is or was opposed to the sale sought to be set aside. Only these had an interest
in the land of their father, besides the creditors, and only they or the creditors who may have been prejudiced by the sale
have a right to object thereto.
Having reached these conclusions, it is unnecessary for us to discuss the other questions raised.
The petition is denied, without costs.
13. see #2
14. [G.R. No. 132223. June 19, 2001] BONIFACIA P. VANCIL, petitioner, vs. HELEN G. BELMES, respondent.
Petition for review on certiorari of the Decision of the Court of Appeals in CA-G.R. CV No. 45650, In the Matter of
Guardianship of Minors Valerie Vancil and Vincent Vancil Bonifacia P. Vancil, Petitioner-Appellee, vs. Helen G. Belmes,
Oppositor-Appellant, promulgated on July 29, 1997, and its Resolution dated December 18, 1997 denying the motion for
reconsideration of the said Decision.
The facts of the case as summarized by the Court of Appeals in its Decision are:
Petitioner, Bonifacia Vancil, is the mother of Reeder C. Vancil, a Navy serviceman of the United States of America who died
in the said country on December 22, 1986. During his lifetime, Reeder had two (2) children named Valerie and Vincent by
his common-law wife, Helen G. Belmes.
Sometime in May of 1987, Bonifacia Vancil commenced before the Regional Trial Court of Cebu City a guardianship
proceedings over the persons and properties of minors Valerie and Vincent docketed as Special Proceedings No. 1618-
CEB. At the time, Valerie was only 6 years old while Vincent was a 2-year old child. It is claimed in the petition that the
minors are residents of Cebu City, Philippines and have an estate consisting of proceeds from their fathers death pension
benefits with a probable value of P100,000.00.
Finding sufficiency in form and in substance, the case was set for hearing after a 3-consecutive-weekly publications with
the Sunstar Daily.
On July 15, 1987, petitioner, Bonifacia Vancil was appointed legal and judicial guardian over the persons and estate of
Valerie Vancil and Vincent Vancil Jr.
On August 13, 1987, the natural mother of the minors, Helen Belmes, submitted an opposition to the subject guardianship
proceedings asseverating that she had already filed a similar petition for guardianship under Special Proceedings No. 2819
before the Regional Trial Court of Pagadian City.
Thereafter, on June 27, 1988, Helen Belmes followed her opposition with a motion for the Removal of Guardian and
Appointment of a New One, asserting that she is the natural mother in actual custody of and exercising parental authority
over the subject minors at Maralag, Dumingag, Zamboanga del Sur where they are permanently residing; that the petition
was filed under an improper venue; and that at the time the petition was filed Bonifacia Vancil was a resident of 140
Hurliman Court, Canon City, Colorado, U.S.A. being a naturalized American citizen.
On October 12, 1988, after due proceedings, the trial court rejected and denied Belmes motion to remove and/or to
disqualify Bonifacia as guardian of Valerie and Vincent Jr. and instead ordered petitioner Bonifacia Vancil to enter the
office and perform her duties as such guardian upon the posting of a bond of P50,000.00. The subsequent attempt for a
reconsideration was likewise dismissed in an Order dated November 24, 1988.[1]
On appeal, the Court of Appeals rendered its assailed Decision reversing the RTC order of October 12, 1988 and
dismissing Special Proceedings No. 1618-CEB.
The Court of Appeals held:
Stress should likewise be made that our Civil Code considers parents, the father, or in the absence, the mother, as natural
guardian of her minor children. The law on parental authority under the Civil Code or P.D. 603 and now the New Family
Code, (Article 225 of the Family Code) ascribe to the same legal pronouncements. Section 7 of Rule 93 of the Revised
Rules of Court confirms the designation of the parents as ipso facto guardian of their minor children without need of a
court appointment and only for good reason may another person be named.Ironically, for the petitioner, there is nothing
on record of any reason at all why Helen Belmes, the biological mother, should be deprived of her legal rights as natural
guardian of her minor children. To give away such privilege from Helen would be an abdication and grave violation of the
very basic fundamental tenets in civil law and the constitution on family solidarity. [2]
On March 10, 1998, Bonifacia Vancil filed with this Court the present petition, raising the following legal points:
1. The Court of Appeals gravely erred in ruling that the preferential right of a parent to be appointed guardian over
the persons and estate of the minors is absolute, contrary to existing jurisprudence.
2. The Court of Appeals gravely erred in ruling that Oppositor Helen G. Belmes, the biological mother, should be
appointed the guardian of the minors despite the undisputed proof that under her custody, her daughter minor
Valerie Vancil was raped seven times by Oppositors live-in partner.
3. The respondent (sic) Court of Appeals gravely erred when it disqualified petitioner Bonifacia P. Vancil to be
appointed as judicial guardian over the persons and estate of subject minors despite the fact that she has all the
qualifications and none of the disqualifications as judicial guardian, merely on the basis of her U.S. citizenship which
is clearly not a statutory requirement to become guardian.
At the outset, let it be stressed that in her Manifestation/Motion, dated September 15, 1998, respondent Helen
Belmes stated that her daughter Valerie turned eighteen on September 2, 1998 as shown by her Birth
Certificate.[3] Respondent thus prayed that this case be dismissed with respect to Valerie, she being no longer a proper
subject of guardianship proceedings. The said Manifestation/Motion was noted by this Court in its Resolution dated
November 11, 1998.
Considering that Valerie is already of major age, this petition has become moot with respect to her. Thus, only the
first and third legal points raised by petitioner should be resolved.
The basic issue for our resolution is who between the mother and grandmother of minor Vincent should be his
guardian.
We agree with the ruling of the Court of Appeals that respondent, being the natural mother of the minor, has the
preferential right over that of petitioner to be his guardian. This ruling finds support in Article 211 of the Family Code
which provides:
Art. 211. The father and the mother shall jointly exercise parental authority over the persons of their common children. In
case of disagreement, the fathers decision shall prevail, unless there is a judicial order to the contrary. xxx.
Indeed, being the natural mother of minor Vincent, respondent has the corresponding natural and legal right to his
custody. In Sagala-Eslao vs. Court of Appeals,[4] this Court held:
Of considerable importance is the rule long accepted by the courts that the right of parents to the custody of their minor
children is one of the natural rights incident to parenthood, a right supported by law and sound public policy. The right is

an inherent one, which is not created by the state or decisions of the courts, but derives from the nature of the parental
relationship.
Petitioner contends that she is more qualified as guardian of Vincent.
Petitioners claim to be the guardian of said minor can only be realized by way of substitute parental
authority pursuant to Article 214 of the Family Code, thus:
Art. 214. In case of death, absence or unsuitability of the parents, substitute parental authority shall be exercised by the
surviving grandparent. xxx.
In Santos, Sr. vs. Court of Appeals,[5] this Court ruled:
The law vests on the father and mother joint parental authority over the persons of their common children. In case of
absence or death of either parent, the parent present shall continue exercising parental authority. Only in case of the
parents death, absence or unsuitability may substitute parental authority be exercised by the surviving grandparent.
Petitioner, as the surviving grandparent, can exercise substitute parental authority only in case of death, absence or
unsuitability of respondent. Considering that respondent is very much alive and has exercised continuously parental
authority over Vincent, petitioner has to prove, in asserting her right to be the minors guardian, respondents
unsuitability. Petitioner, however, has not proffered convincing evidence showing that respondent is not suited to be the
guardian of Vincent. Petitioner merely insists that respondent is morally unfit as guardian of Valerie considering that her
(respondents) live-in partner raped Valerie several times. But Valerie, being now of major age, is no longer a subject of this
guardianship proceeding.
Even assuming that respondent is unfit as guardian of minor Vincent, still petitioner cannot qualify as a substitute
guardian. It bears stressing that she is an American citizen and a resident of Colorado. Obviously, she will not be able to
perform the responsibilities and obligations required of a guardian. In fact, in her petition, she admitted the difficulty of
discharging the duties of a guardian by an expatriate, like her. To be sure, she will merely delegate those duties to
someone else who may not also qualify as a guardian.
Moreover, we observe that respondents allegation that petitioner has not set foot in the Philippines since 1987 has
not been controverted by her. Besides, petitioners old age and her conviction of libel by the Regional Trial Court, Branch 6,
Cebu City in Criminal Case No. CBU-16884[6] filed by one Danilo R. Deen, will give her a second thought of staying
here. Indeed, her coming back to this country just to fulfill the duties of a guardian to Vincent for only two years is not
certain.
Significantly, this Court has held that courts should not appoint persons as guardians who are not within the
jurisdiction of our courts for they will find it difficult to protect the wards. In Guerrero vs. Teran,[7] this Court held:
Doa Maria Muoz y Gomez was, as above indicated, removed upon the theory that her appointment was void because she
did not reside in the Philippine Islands. There is nothing in the law which requires the courts to appoint residents only as
administrators or guardians. However, notwithstanding the fact that there are no statutory requirements upon this
question, the courts, charged with the responsibilities of protecting the estates of deceased persons, wards of the estate,
etc., will find much difficulty in complying with this duty by appointing administrators and guardians who are not
personally subject to their jurisdiction. Notwithstanding that there is no statutory requirement, the courts should not
consent to the appointment of persons as administrators and guardians who are not personally subject to the jurisdiction
of our courts here.
WHEREFORE, the appealed Decision is hereby AFFIRMED, with modification in the sense that Valerie, who has
attained the age of majority, will no longer be under the guardianship of respondent Helen Belmes.
Costs against petitioner.
SO ORDERED.
15. A.M. No. 08-4-1-SC, Re: Inhibition and/or Disqualification of Clerks of Court in all levels
The Court provided for guidelines in the detail of locally-funded employees to the lower courts. The guidelines issued a
disqualification against all clerks of courts in all cases in which they or their immediate families are involved. These
employees shall not be given duties involving custody of court records, implementation of judicial processes, and other
duties involving court proceedings.
16. Canon III of the Code of Conduct of Court Personnel, June 3, 2008.;
CODE OF CONDUCT FOR COURT PERSONNEL SCOPE SECTION 1. This Code of Conduct for Court Personnel shall apply to
all personnel in the judiciary who are not justices or judges. Court personnel who are no longer employed in the Judiciary
but who acquired, while still so employed, confidential information as defined in the second paragraph of Section 1 of
Canon II on Confidentiality are subject to Section 4 thereof.
CANON I

FIDELITY TO DUTY SECTION 1. Court personnel shall not use their official position to secure unwarranted benefits,
privileges or exemptions for themselves or for others.
SECTION 2. Court personnel shall not solicit or accept any gift, favor or benefit based on any or explicit understanding that
such gift, favor or benefit shall influence their official actions.
SECTION 3. Court personnel shall not discriminate by dispensing special favors to anyone. They shall not allow kinship,
rank, position or favors from any party to influence their official acts or duties.
SECTION 4. Court personnel shall not accept any fee or remuneration beyond what they receive or are entitled to in their
official capacity.
SECTION 5. Court personnel shall use the resources, property and funds under their official custody in a judicious manner
and solely in accordance with the prescribed statutory and regulatory guidelines or procedures.
CANON II CONFIDENTIALITY
SECTION 1. Court personnel shall not disclose to any unauthorized person any confidential information acquired by them
while employed in the judiciary, whether such information came from authorized or unauthorized sources. Confidential
information means information not yet made a matter of public record relating to pending cases, as well as information
not yet made public concerning the work of any justice or judge relating to pending cases, including notes, drafts,
research papers, internal discussions, internal memoranda, records of internal deliberations and similar papers. The notes,
drafts, research papers, internal discussions, internal memoranda, records of internal deliberations and similar papers that
a justice or judge uses in preparing a decision, resolution or order shall remain confidential even after the decision,
resolution or order is made public.
SECTION 2. Confidential information available to specific individuals by reason of statute, court rule or administrative
policy shall be disclosed only by persons authorized to do so.
SECTION 3. Unless expressly authorized by the designated authority, court personnel shall not disclosed confidential
information given by litigants, witnesses or attorneys to justices, judges or any other person.
SECTION 4. Former court personnel shall not disclose confidential information acquired by them during their employment
in the Judiciary when disclosed by current court personnel of the same information would constitute a breach of
confidentiality. Any disclosure in violation of this provisions shall constitute indirect contempt of court.
CANON III CONFLICT OF INTEREST
SECTION 1. Court personnel shall avoid conflicts of interest in performing official duties. Every court personnel is required
to exercise utmost diligence in being aware of conflicts of interest, disclosing conflicts of interest to the designated
authority, and terminating them as they arise. (a) A conflict of interest exist when: (i) the court personnel’s objective ability
or independence of judgment in performing official duties is impaired or may reasonably appear to be impaired; or (ii) the
court personnel, the personnel’s immediate family, or the personnel’s business or other financial interest would derive
financial gain because of the personnel’s official act. (b) No conflict of interest exists if any benefit accrues to the court
personnel as a member of a profession, business, or group to the same extent as any other member of such profession,
business, or group who does not hold a position in the Judiciary. (c) The term “immediate family” shall include the
following whether related by blood, marriage or adoption: (a) spouse, (b) children, (c) brother, (d) sister, (e) parent, (f)
grandparent, (g) grandchildren, (h) father-in-law, (i) mother-in-law, (j) sister-in-law, (k) brother-in-law, (l) son-in-law, (m)
daughter-inlaw, (n) stepfather, (o) stepmother, (p) stepson, (q) stepdaughter, (r) stepbrother, (s) stepsister, (f) half-brother,
(u) half-sister.
SECTION 2. Court personnel shall not: (a) Enter into any contract with the Judiciary for services, lease or sale of property
apart from the employment contract relating to the personnel’s position; nor use that position to assist any member of the
personnel’s immediate family in securing a contract with the Judiciary in a manner not available to any other interested
party. (b) Receive tips or other remunerations for assisting or attending to parties engaged in transactions or involved in
actions or proceedings with the Judiciary. (c) Participate in any official action involving a party with whom either the court
personnel or any member of the personnel’s immediate family is negotiating for future employment. (d) Knowingly
employ or recommend for employment any member of the court personnel’s immediate family. (e) Solicit or accept any
gift, loan, gratuity, discount, favor, hospitality or service under circumstances from which it could reasonably be inferred
that a major purpose of the donor is to influence the court personnel in performing official duties.
SECTION 3. Nothing in Section 2 above shall prohibit court personnel from (a) accepting a public award presented in
recognition of public services; (b) receiving a commercially reasonable loan made as part of the ordinary transaction of the
lender’s business; (c)donating to the Judiciary for the benefit of a group of court personnel (e.g. all the personnel of an
office or unit of the Judiciary): Provided, that the value and circumstances of the donation are such that it could not be
reasonably inferred that the donation would influence the recipient in performing official duties in favor of the donor or
some other party or that such influence was the purpose of the donor. Finally, nothing in Section 2 above shall prohibit

any person, group or entity from donating cash or property of significant or historical value for the benefit of the Judiciary:
Provided, that, such donation is received on behalf of the Judiciary by the designated authority.
SECTION 4. To insure compliance with the provisions of this canon on Conflict of Interest, court personnel who have
authority to enter into or approve contacts for the Judiciary shall file a financial disclosure statement with the designated
authority at the beginning and upon termination of employment in such position, and annually while so employed. The
disclosure shall follow the guidelines established by the designated authority, and shall include all sources of personal and
business income, including investments in personal or real property, as well as all income received by their spouses or
dependent children.
SECTION 5. The full-time position in the Judiciary of every court personnel shall be the personnel’s primary employment.
For purposes of this code, “primary employment” means the position that consumes the entire normal working hours of
the court personnel and requires the personnel’s exclusive attention in performing official duties. Outside employment
may be allowed by the head of office provided it complies with all of the following requirements: (a) The outside
employment is not with a person or entity that practices law before the courts or conducts business with the Judiciary; (b)
The outside employment can be performed outside of normal working hours and is not incompatible with the
performance of the court personnel’s duties and responsibilities; (c) The outside employment does not require the practice
of law; Provided, however, that court personnel may render services as professor, lecturer, or resource person in law
schools, review or continuing education centers or similar institutions; (d) The outside employment does not require or
induce the court personnel to disclose confidential information acquired while performing official duties; and (e) The
outside employment shall not be with the legislative or executive branch of government, unless specifically authorized by
the Supreme Court. Where a conflict of interest exists, may reasonably appear to exist, or where the outside employment
reflects adversely on the integrity of the Judiciary, the court personnel shall not accept the outside employment.
CANON IV PERFORMANCE OF DUTIES
SECTION 1. Court personnel shall at all times perform official duties properly and with diligence. They shall commit
themselves exclusively to the business and responsibilities of their office during working hours.
SECTION 2. Court personnel shall carry out their responsibilities as public servants in as courteous a manner as possible.
SECTION 3. Court personnel shall not alter, falsify, destroy or mutilate any record within their control. This provision does
not prohibit amendment, correction or expungement of records or documents pursuant to a court order.
SECTION 4. In performing official duties, court personnel shall not discriminate nor, manifest, by word or conduct, bias or
prejudice based on race, religion, national or ethnic origin, gender or political affiliation.
SECTION 5. Court personnel shall not recommend private attorneys to litigants, prospective litigants, or anyone dealing
with the Judiciary.
SECTION 6. Court personnel shall expeditiously enforce rules and implement orders of the court within the limits of their
authority.
SECTION 7. Court personnel shall not be required to perform any work or duty outside the scope of their assigned job
description.
INCORPORATION OF OTHER RULES SECTION 1. All provisions of law, Civil Service rules, and issuances of the Supreme
Court governing or regulating the conduct of public officers and employees applicable to the Judiciary are deemed
incorporated into this Code.
RULES OF COURT, Rule 137, Sec. 1.
RULE 137
Disqualification of Judicial Officers
Section 1. Disqualification of judges. — No judge or judicial officer shall sit in any case in which he, or his wife or child, is
pecuniarily interested as heir, legatee, creditor or otherwise, or in which he is related to either party within the sixth degree
of consanguinity or affinity, or to counsel within the fourth degree, computed according to the rules of the civil law, or in
which he has been executor, administrator, guardian, trustee or counsel, or in which he has been presided in any inferior
court when his ruling or decision is the subject of review, without the written consent of all parties in interest, signed by
them and entered upon the record.
A judge may, in the exercise of his sound discretion, disqualify himself from sitting in a case, for just or valid reasons other
than those mentioned above.

17. (no case)
18. see # 2
19. G.R. No. 74769 September 28, 1990 BEATRIZ F. GONZALES, petitioner,
vs. HON. ZOILO AGUINALDO, Judge of Regional Trial Court, Branch 143, Makati, Metro Manila and TERESA F.
OLBES, respondents.
PADILLA, J.:
This is a petition for certiorari which seeks to annul, on the ground of grave abuse of discretion, the Order of the
respondent Judge, dated 15 January 1985, cancelling the appointment of the petitioner Beatriz F. Gonzales as a co-
administratrix in Special Proceedings No. 021 entitled "In the Matter of the Intestate Estate of Ramona Gonzales Vda. de
Favis," Branch 143, RTC, Makati, Metro Manila; and the Order of 15 May 1985 denying reconsideration of the same.
The facts are:
Special Proceedings No. 021, pending before the court a quo, is an intestate proceeding involving the estate of the
deceased Doña Ramona Gonzales Vda. de Favis. Doña Ramona is survived by her four (4) children who are her only heirs,
namely, Asterio Favis, Beatriz F. Gonzales, Teresa F. Olbes, and Cecilia Favis-Gomez.
On 25 October 1983, the court a quo appointed petitioner Beatriz F. Gonzales and private respondent Teresa Olbes as co-
administratices of the estate.
On 11 November 1984, while petitioner Beatriz F. Gonzales was in the United States accompanying her ailing husband
who was receiving medical treatment in that country, private respondent Teresa Olbes filed a motion, dated 26 November
1984, to remove Beatriz F. Gonzales as co-administratrix, on the ground that she is incapable or unsuitable to discharge
the trust and had committed acts and omissions detrimental to the interest of the estate and the heirs. Copy of said
motion was served upon petitioner's then counsel of record, Atty. Manuel Castro who, since 2 June 1984, had been
suspended by the Supreme Court from the practice of law throughout the Philippines. 1
After the filing of private respondent's aforesaid motion, respondent Judge Zoilo Aguinaldo issued an Order dated 4
December 1984 which required Beatriz F. Gonzales and the other parties to file their opposition, if any, thereto. Only
Asterio Favis opposed the removal of Beatriz F. Gonzales as co-administratrix, as the latter was still in the United States
attending to her ailing husband.
In an Order dated 15 January 1985, respondent Judge cancelled the letters of administration granted to Beatriz F.
Gonzales and retained Teresa Olbes as the administratrix of the estate of the late Ramona Gonzales. The Court, in
explaining its action, stated:
. . . In appointing them, the court was of the opinion that it would be to the best interest of the estate if
two administrators who are the children of the deceased would jointly administer the same. Unfortunately,
as events have shown, the two administrators have not seen eye to eye with each other and most of the
time they have been at loggerheads with each other to the prejudice of the estate. Beatriz F. Gonzales has
been absent from the country since October, 1984 as she is in the United States as stated in the motion
and opposition of Asterio Favis dated December 11, 1984, and she has not returned even up to this date
so that Teresa F. Olbes has been left alone to administer the estate. Under these circumstances, and in
order that the estate will be administered in an orderly and efficient manner, the court believes that there
should be now only one administrator of the estate. 2
Petitioner moved to reconsider the Order of 15 January 1985. Her motion was opposed separately by private respondent
Teresa Olbes and another co-heir Cecilia Gomez. In her manifestation and opposition to petitioner's motion for
reconsideration, Cecilia Gomez stated that it would be pointless to re-appoint Beatriz F. Gonzales as co-administratrix of
Teresa Olbes, as the former would be leaving soon for the United States to attend to unfinished business. Moreover, she
expressed satisfaction with the manner respondent Teresa Olbes had been managing and administering the estate.
In his Order dated 7 May 1986, a part of which is hereunder quoted, respondent Judge denied petitioner's motion for
reconsideration for lack of merit. He said:
xxx xxx xxx
After a consideration of the motion for reconsideration and the oppositions thereto, the court believes
and so holds that it should be denied. The court in its discretion has issued its order dated January 15,
1985 cancelling the appointment and the letters of administration issued to Beatriz F. Gonzales and it
reiterates the same for the best interest of the estate of the deceased. It is noteworthy that of the four
heirs of the deceased, one of them being the movant Beatriz F. Gonzales, two of them, namely, Cecilia F.
Gomez and Teresa F. Olbes, opposed the motion. The other heir Asterio Favis, did not file or make any

comment to the motion. As can be gathered from the oppositions of Cecilia F. Gomez and Teresa F.
Olbes, the reappointment of Beatriz F. Gonzales as a co-administratrix would not be conducive to the
efficient and orderly administration of the estate of the deceased Ramona Gonzales vda. de Favis. 3
Petitioner contends before this Court that respondent Judge's Order dated 15 January 1985 should be nullified on the
ground of grave abuse of discretion, as her removal was not shown by respondents to be anchored on any of the grounds
provided under Section 2, Rule 82, Rules of Court, which states:
Sec. 2. Court may remove or accept resignation of executor or administrator. Proceedings upon death,
resignation or removal — If an executor or administrator neglects to render his account and settle the
estate according to law, or to perform an order or judgment of the court, or a duty expressly provided by
these rules, or absconds, or becomes insane, or otherwise incapable or unsuitable to discharge the trust,
the court may remove him, or in its discretion, may permit him to resign. . . .
While appellate courts are generally disinclined to interfere with the action taken by the probate court in the matter of
removal of an administrator, 4 we find, in the case at bar, sufficient cause to reverse the order of the probate court
removing petitioner as co-administratrix of the estate.
The rule is that if no executor is named in the will, or the named executor or executors are incompetent, refuse the trust, or
fail to give bond, or a person dies intestate, the court must appoint an administrator of the estate of the deceased 5 who
shall act as representative not only of the court appointing him but also of the heirs and the creditors of the estate. 6 In the
exercise of its discretion, the probate court may appoint one, two or more co-administrators to have the benefit of their
judgment and perhaps at all times to have different interests represented. 7
In the appointment of the administrator of the estate of a deceased person, the principal consideration reckoned with is
the interest in said estate of the one to be appointed as administrator. 8 This is the same consideration which Section 6 of
Rule 78 takes into account in establishing the order of preference in the appointment of administrators for the estate. The
underlying assumption behind this rule is that those who will reap the benefit of a wise, speedy, economical
administration of the estate, or, on the other hand, suffer the consequences of waste, improvidence or mismanagement,
have the highest interest and most influential motive to administer the estate correctly. 9
Administrators have such an interest in the execution of their trust as entitle them to protection from removal without just
cause. 10 Hence, Section 2 of Rule 82 of the Rules of Court provides the legal and specific causes authorizing the court to
remove an administrator. 11
While it is conceded that the court is invested with ample discretion in the removal of an administrator, it however must
have some fact legally before it in order to justify a removal . There must be evidence of an act or omission on the part of
the administrator not conformable to or in disregard of the rules or the orders of the court, which it deems sufficient or
substantial to warrant the removal of the administrator. In making such a determination, the court must exercise good
judgment, guided by law and precedents.
In the present case, the court a quo did not base the removal of the petitioner as co-administratrix on any of the causes
specified in respondent's motion for relief of the petitioner. Neither did it dwell on, nor determine the validity of the
charges brought against petitioner by respondent Olbes. The court based the removal of the petitioner on the fact that in
the administration of the estate, conflicts and misunderstandings have existed between petitioner and respondent Teresa
Olbes which allegedly have prejudiced the estate, and the added circumstance that petitioner had been absent from the
country since October 1984, and up to 15 January 1985, the date of the questioned order.
Certainly, it is desirable that the administration of the deceased's estate be marked with harmonious relations between co-
administrators. But for mere disagreements between such joint fiduciaries, without misconduct, one's removal is not
favored. 12 Conflicts of opinion and judgment naturally, and, perhaps inevitably, occur between persons with different
interests in the same estate. Such conflicts, if unresolved by the co-administrators, can be resolved by the probate court to
the best interest of the estate and its heirs.
We, like petitioner, find of material importance the fact that the court a quo failed to find hard facts showing that the
conflict and disharmony between the two (2) co-administratrices were unjustly caused by petitioner, or that petitioner was
guilty of incompetence in the fulfillment of her duties, or prevented the management of the estate according to the
dictates of prudence, or any other act or omission showing that her continuance as co-administratrix of the estate
materially endangers the interests of the estate. Petitioner Beatriz F. Gonzales is as interested as respondent Olbes and the
other heirs in that the properties of the estate be duly administered and conserved for the benefit of the heirs; and there is
as yet no ground to believe that she has prejudiced or is out to prejudice said estate to warrant the probate court into
removing petitioner as co-administratrix.
Respondent Judge removed petitioner Beatriz F. Gonzales as co-administratrix of the estate also on the ground that she
had been absent from the country since October 1984 and had not returned as of 15 January 1985, the date of the
questioned order, leaving respondent Olbes alone to administer the estate.

In her motion for reconsideration of the Order dated 15 January 1985, petitioner explained to the court a quo that her
absence from the country was due to the fact that she had to accompany her ailing husband to the United States for
medical treatment. 13 It appears too that petitioner's absence from the country was known to respondent Olbes, and that
the latter and petitioner Gonzales had continually maintained correspondence with each other with respect to the
administration of the estate during the petitioner's absence from the country. 14 As a matter of fact, petitioner, while in the
United States, sent respondent Olbes a letter addressed to the Land Bank of the Philippines dated 14 November 1984, and
duly authenticated by the Philippine Consulate in San Francisco, authorizing her (Olbes) to receive, and collect the
interests accruing from the Land Bank bonds belonging to the estate, and to use them for the payment of accounts
necessary for the operation of the administration. 15
The above facts, we note, show that petitioner had never abandoned her role as co-administratrix of the estate nor had
she been remiss in the fullfilment of her duties. Suffice it to state, temporary absence in the state does not disqualify one
to be an administrator of the estate. Thus, as held in re Mc Knight's Will, a temporary residence outside of the state,
maintained for the benefit of the health of the executors' family, is not such a removal from the state as to necessitate his
removal as executor.
. . . It seems quite clear that a temporary absence from the state on account of ill health, or on account of
business or for purposes of travel or pleasure, would not necessarily establish the fact that an executor
"has removed" from the estate, within the intent of the statute. The learned surrogate was evidently
satisfied that the sojourn of these executors in New Jersey was nothing more than a departure from the
state for the benefit of relatives, not designed to constitute a permanent change of abode, and
contemplating a return to New York as soon as the purpose of their absence should be accomplished. In
this view, I am inclined to think that he was right in refusing to hold that he was constrained to revoke the
letters by the provisions of the Code to which I have referred. I therefore advise an affirmance of the
order. 16
Finally, it seems that the court a quo seeks refuge in the fact that two (2) of the other three (3) heirs of the estate of the
deceased (Teresa Olbes and Cecilia Favis Gomez) have opposed the retention or re-appointment of petitioner as co-
administratrix of the estate. Suffice it to state that the removal of an administrator does not lie on the whims, caprices and
dictates of the heirs or beneficiaries of the estate, nor on the belief of the court that it would result in orderly and efficient
administration. In re William's Adm'r., the court held:
A county court having appointed a stranger administrator as expressly authorized by Ky. St. 3897, after
the relatives of decedent had lost their right of precedence, could not remove the appointee merely
because of the request of relatives and the belief upon the part of the court that the best interest of
deceased would be thereby subserved, since the administrator had such an interest as entitled him to
protection from removal without cause. 17
As the appointment of petitioner Beatriz F. Gonzales was valid, and no satisfactory cause for her removal was shown, the
court a quo gravely abused its discretion in removing her. Stated differently, petitioner Beatriz F. Gonzales was removed
without just cause. Her removal was therefore improper.
WHEREFORE, the petition is GRANTED. The Order of the court a quo dated 15 January 1985 removing petitioner Beatriz F.
Gonzales as co-administratrix in Special Proceedings No. 021, entitled "In the Matter of the Intestate Estate of Ramona
Gonzales Vda. de Favis" and the Order of the same Court dated 15 May 1985 denying reconsideration of said Order, are
hereby REVERSED and SET ASIDE. Petitioner is ordered reinstated as co-administratrix of said estate.
SO ORDERED.
20. G.R. No. L-17066 December 28, 1961 IN THE MATTER OF THE GUARDIANSHIP OF CARMEN PADILLA
VDA. DE BENGSON, Incompetent. CARMEN PADILLA VDA. DE BENGSON, petitioner-appellee,
vs. PHILIPPINE NATIONAL BANK, guardian-appellant, ADMINISTRATION OF VETERANS AFFAIRS, oppositor-
appellant.
REYES, J.B.L., J.:
As the mother of a veteran who died in World War II, Carmen Padilla Vda. de Bengson became entitled to certain accrued
insurance benefits which amounted to P10,738 as of July 1, 1957, and to a monthly death compensation for the rest of her
life, all extended by the United States Veterans Administration. Upon inquiry which showed that the beneficiary was
incompetent, the Veterans Administration filed Special Proceeding No. 586 in the Court of First Instance of La Union,
where in due course, an order was entered on August 8, 1957, adjudging Carmen Vda. de Bengzon to be an incompetent
and appointing the Philippine National Bank (PNB) as guardian of her estate comprising the monies due from the said
Veterans Administration. Letters of guardianship were issued in favor of the Philippine National Bank.
On March 5, 1960, alleging that she had regained her competence, her ward, by counsel, filed a petition asking for an
order terminating the guardianship, and for delivery to her of the residuary estate. Attached to this petition was a medical
certificate attesting that she was mentally competent and possessed full knowledge of her environmental surroundings.

This was opposed by the Veterans Administration on the ground that by reason of her advanced age (78), physical and
mental debility, she was still an incompetent within the meaning of Section 2, Rule 93 of the Rules of Court. On March 30,
1960, the son of the ward, Francisco Bengson, filed a "Manifestation" to the effect that he was the personal guardian of
the incompetent; that if appointed guardian of her estate as well, he will comply with all the provisions of the Rules of
Court, will not ask any remuneration for his services, and will file a nominal bond. He prayed to be appointed guardian of
the ward's estate in place of the Philippine National Bank, and for the balance of her estate to be withdrawn or transferred
from the Philippine National Bank's main office to its branch at San Fernando, La Union, in his account as guardian. On the
same date, the lower court ordered Francisco Bengson to be appointed guardian of the ward's estate to substitute the
Philippine National Bank, upon filing a P1,000 bond with proper sureties; the Philippine National Bank to transfer to its
branch office at San Fernando, La Union, whatever funds it has belonging to the ward, upon Francisco Bengson's filing the
required bond and taking his oath. As reasons for the removal of the Philippine National Bank and the appointment of
Bengson, the lower court observed that the ward was living with Francisco Bengson in the latter's capacity as personal
guardian; that the appointment of Bengson in place of the Philippine National Bank would save the compensation being
paid that Bank; and that the transfer to the Philippine National Bank branch at San Fernando, La Union would be more
convenient to all concerned for the proper administration of the estate. The required bond was thereafter filed and letters
of guardianship issued to Francisco Bengson. A motion to reconsider was denied by the order of May 11, 1960, which,
however, raised of the amount of the bond to P13,000, based on a finding that the cash balance of the estate then
amounted to P11,464.34 plus the monthly income estimated at P134, or P1,608 per annum. Hence, this joint appeal by the
Philippine National Bank and the Veterans Administration..
We find this appeal meritorious. The grounds for which a guardian may be removed are found in Section 2, Rule 98 of the
Rules.
When a guardian becomes insane or otherwise incapable of discharging his trust or unsuitable therefor, or has
wasted or mismanaged the estate, or failed for thirty days after it is due to render an account or make a return ,
the court may, upon reasonable notice to the guardian, remove him, and compel him to surrender the estate of
the ward to the person found to be lawfully entitled thereto.... (emphasis supplied).
Since the Rules enumerate the grounds for removal of a guardian, a guardian cannot be legally removed from office
except for the causes therein mentioned (Alemany vs. Moreno, 5 Phil. 172; Moran, Comments on the Rules of Court, Vol. II,
1957 Ed. p. 515). This is also the American law (39 C.J.S., p. 657). Accordingly, conflict of interest (Ribaya vs. Ribaya, 74 Phil.
254; Gabriel vs. Sotelo, 74 Phil. 25) has been held sufficient ground for removal, premised on the logic that antagonistic
interests would render a guardian unsuitable for the trust. To the extent that a court uses its discretion in appraising
whether a person is insuitable or incapable of discharging his trust, that much it can be said that removal is discretionary.
But the discretion must be exercised within the law, and when the latter has laid down the grounds for removal of a
guardian, discretion is limited to inquiring as to the existence of any of those grounds. lawphil.net
No pretense is made in this case, and nothing in the record would indicate, that there was any legal ground upon which
the removal of the Philippine National Bank as guardian was founded. Neither in Francisco Bengzon's manifestation nor in
the orders of the lower court is it made to appear that the Philippine National Bank had become incapable of discharging
its trust or was unsuitable therefor, or that it had committed anything which the Rules includes as grounds for removal. On
the contrary, it appears incontestable that all throughout, the Philippine National Bank has discharged its trust
satisfactorily. The it has received commissions allowed by law for its services is no ground to remove it, especially since the
Bank's commission averages no more than P100.00 a year and is offset by interest on the ward's deposit and the sum that
the son would probably have to disburse in bond premiums. Neither is it sufficient to base removal on the
unsubstantiated opinion that it would be more beneficial to the interests of the ward and more convenient for the
administration of the estate. A guardian should not be removed except for the most cogent reasons (39 C.J.S. 65);
otherwise, the removal is unwarranted and illegal.
As to the alleged inconvenience of the guardian of the incompetent's person having to come to Manila to obtain money
for the ward's sustenance, the same can be obviated by merely requiring the appellant Bank to keep part of the moneys in
the San Fernando (La Union) branch, without altering the guardianship.
WHEREFORE, the orders appealed from dated March 30, 1960 and May 11, 1960 are reversed, costs against the appellee
Francisco Bengson.
ADOPTION
1. A.M. No. RTJ-92-802 July 5, 1993 OFFICE OF THE COURT ADMINISTRATOR, complainant, vs. HON. GENARO C.
GINES, as Presiding Judge, Branch 26; MA. GORGONIA L. FLORES, Court Interpreter and Officer-in-Charge, Branch
26; ROSIE M. MUNAR, Stenographic Reporter, Branch 26, PACITA B. DIAZ, Staff Assistant IV, Office of the Clerk of
Court; MA. CONCEPCION B. DIAZ, Staff Assistant I, Branch 26, and ALFREDO V. LACSAMANA, JR., Staff Assistant II,
Branch 26, all of the RTC, San Fernando, La Union, respondents.
PER CURIAM:
This case was initiated by the Office of the Court Administrator with the filing of an administrative complaint which reads:

Pursuant to the Resolution of the Court En Banc, dated July 30, 1991, the undersigned hereby institutes
this administrative complaint against Judge Genaro C. Gines, Presiding Judge, Branch 26; Ma. Gorgonia L.
Flores, Court Interpreter and Officer-in- Charge, Branch 26; Rosie M. Munar, Stenographic Reporter,
Branch 26; Pacita B. Diaz, Staff Assistant IV, Office of the Clerk of Court; Ma. Concepcion B. Diaz, Staff
Assistant I, Branch 26; and Mr. Alfredo V. Lacsamana, Jr., Staff II, Branch 26, all of the RTC, San Fernando,
La Union, for Dishonesty; Violation of par. (e), Sec. 3 of R.A. 3019 (Anti-Graft and Corrupt Practices Act) as
amended; and Violation of Administrative Order No. 6, dated June 30, 1975, Circular No. 7, dated
September 23, 1974, and Administrative Order No. 1, dated January 28, 1988, by virtue of their collective
illegal acts involving deliberate and surreptitious assignment of cases at the Docketing and Receiving
Section, Office of the Clerk of Court, RTC, San Fernando, La Union.
1. This complaint is substantially anchored on the Report submitted by Atty. Aurora P. Sanglay, Clerk of
Court, RTC, San Fernando, La Union, relative to her investigation of the alleged anomaly in the non-
raffling of cases in the said Court, and the Affidavit-complaint of Ma. Concepcion B. Diaz dated September
19, 1991, implicating other court personnel involved in the aforestated irregularity;
2. Atty. Sanglay, in her Report, averred that:
2.1. From April 3, 1989 to April, 1991, there were forty-four (44) Special Proceedings
cases, twenty-seven (27) Land Registration cases, six (6) Civil Cases, and three (3) Criminal
Cases which were directly assigned to the RTC, Branch 26, San Fernando, La Union,
without passing through the mandatory, raffling procedure, of cases except for three (3)
special proceedings cases which were assigned to Branch 27, which anomaly had been
going on since 1986;
2.2. Pacita Diaz, Ma. Concepcion Diaz and Alfredo Lacsamana, Jr. were the court
employees in-charge in (sic) the receiving and docketing of the Land Registration Cases,
Special Proceedings cases and Civil Cases, respectively; and
2.3. There is a probability that the aforesaid clerks, who were in-charge of receiving the
cases, did not submit deliberately to the Officer-in-Charge, some of the cases received
from mandatory raffling in compliance with the Administrative Orders/Circulars of the
Supreme Court.
3. In the Affidavit-Complaint dated September 19, 1991, of Ma. Concepcion B. Diaz, which was received by
the Office of the Court Administrator on September 20,1991, she asserted, inter alia, that:
3.1. She blamed Judge Genaro C. Gines, Presiding Judge, RTC, Branch 26, San Fernando,
La Union, Ma. Gorgonia Flores, Court Interpreter and Officer-In-Charge, same Court, and
Rosie Munar, Stenographic Reporter, same Court, for applying pressures and
intimidations to her in order that the cases of their choice may no longer be forwarded to
the proper Officer-in-Charge;
3.2. Several petitions have been prepared by the ( sic) Judge Gines himself in coordination
with his Stenographer Rosie Munar and Court Interpreter Ma. Gorgonia Flores, some of
which are as follows:
3.2.1. Special Proceeding No. 1965 where the petitioner, who alleged
himself to be a resident of San Fernando, La Union, is actually a resident
of Sta. Cruz, Ilocos Sur and the Aunt of Judge Gines. The required bond
of P500.00 therein has not yet been posted: and
3.2.2. Special Proceeding No. 1967 where the Office of the Solicitor
General and other parties were not furnished with copies of the petition
upon the instruction of Judge Gines.
The respondents were then required to answer the complaint.
Separate motions for an extension of time to file their answers were made by the respondents, but only respondents
Pacita Diaz and Ma. Concepcion Diaz filed their Answer within the extended period. The Resolution which granted the
others the extension warned them that no further postponements would be granted. Notwithstanding such caveat,
however, they again asked for another extension. In the Resolution of 28 May 1992, this Court ruled, inter alia, that:
It appearing that said respondents have not taken this case seriously, and considering the prior warning in
the Resolution of 7 May 1992, the above motions for another extension of time to file the Answers are
hereby DENIED. The respondent Judge and respondents Flores, Munar and Lacsamana are deemed to
have waived the filing of their Answer.

As it turned out, respondents Flores, Munar and Lacsamana were able to post their joint Answers on 15 May 1992 the last
day of the additional period they had prayed for in their second motion which was eventually denied in the
aforementioned Resolution.
Respondents then filed a motion to reconsider the Resolution of 28 May 1992; the same was denied in the Resolution of
14 July 1992. This latter resolution likewise denied the respondent Judge's motion to reconsider the 7 May 1992
Resolution wherein he prayed that his answer (actually a Comment), dated 14 May 1992, be admitted. However, this Court
resolved that the said comment be attached to the record of the instant case.
In the same 14 July 1992 Resolution, the instant case was referred to Mr. Justice Nathanael P. De Pano, Jr. of the Court of
Appeals for investigation, report, and recommendation.
On 31 March 1993, Justice De Pano, Jr. submitted his 26-page REPORT. It appears therefrom that on 2 September 1992, he
issued an order (a) requiring the parties to file respective affidavits which shall serve as their direct testimonies in this case
subject, however, to cross-examination by the adverse parties and (b) setting the initial hearing of the case for 28
September 1992. Respondents Pacita Diaz and Ma. Concepcion Diaz submitted their joint affidavit, dated 9 September
1992, as well as the affidavits of Fortunata Gualberto, retired branch clerk of court of Branch 27 of the Regional Trial Court
(RTC) in San Fernando, La Union, and Consolacion M. Dulay, Clerk III of the same Branch 27. Respondents Gorgonia Flores,
Rosie Munar and Alfredo Lacsamana likewise submitted their individual affidavits which are all dated 14 September 1992.
Respondent Judge Gines, for his part, filed a manifestation dated 17 September 1992, adopting his 14 May 1992 Comment
as his direct testimony as well as the aforesaid affidavits of respondents Flores, Munar and Lacsamana.
At the hearing on 28 September 1992, the parties entered into a stipulation of facts. They agreed on the status and
personal circumstances of the parties as stated in the affidavits, as well as the descriptions of their respective positions in
the RTC in San Fernando, La Union; the assumption into office of the respondent Judge in January of 1987; the non-
membership of the respondent Judge and the other respondents in the raffle committee; and the procedure prescribed
for the raffling of cases filed with the RTC in San Fernando, La Union. The respondents then marked as exhibits their
affidavits and other documents.
It further appears from the REPORT that no testimonial evidence was offered by the parties. While the complainant wanted
to present Atty. Sanglay, the respondents admitted her report and agreed to dispense with her testimony. The
complainant then marked in evidence the following documents: (1) the undated Report of Atty. Aurora Sanglay to the
Executive Judge, as Exhibit "A"; (2) the 17 June 1991 Letter of Atty. Aurora Sanglay addressed to the Executive Judge, with
annexes, as Exhibit "B"; (3) the Joint Affidavit of Pacita and Ma. Concepcion Diaz dated 11 September 1992, as Exhibit "C";
(4) the Compliance of respondents Flores, Munar and Lacsamana, Jr., as Exhibit "D"; (5) the Affidavit of respondent Flores
dated 14 September 1992, as Exhibit "E"; (6) the Affidavit of Romeo Hermosura dated 14 September 1992, as Exhibit "F";
(7) the Affidavit of Teodorico Basilio dated 14 September 1992, as Exhibit "G"; (8) the Affidavit of respondent Munar, dated
14 September 1992, as Exhibit "H"; (9) the Affidavit of respondent Lacsamana, Jr. dated 14 September 1992, as Exhibit "I";
and (10) the Manifestation of respondent Judge Gines dated 17 September 1992, as Exhibit "J". It appears that counsel for
the complainant expressed a desire to cross-examine respondents Flores, Munar and Lacsamana but that the latter's
counsel objected on the ground of possible self-incrimination. These three respondents further manifested that they were
not presenting any evidence against the other respondents. Respondents Pacita Diaz and Concepcion Diaz likewise
manifested, through counsel, that they will not present evidence on account of the possibility of self-incrimination.
Respondent Judge Gines did not present his evidence.
Justice De Pano, Jr. then made the following observations, findings and conclusions in his REPORT:
Executive Judge Braulio Yaranon of the San Fernando, La Union Regional Trial Court, in a letter dated June
20, 1991, transmitted to the Court, the report dated June 17, 1991, of Attorney Aurora Sanglay, the said
Court's Clerk of Court, on the subject of cases that had not been raffled by the appropriate committee on
raffle but which nevertheless, found their way mostly, to Branch 26 of the said Court (presided over by
respondent Genaro Gines from January 1987) and Branch 27 (the letter and its annexes were later marked
Exhibit B). In 1986, the report states, 6 criminal cases, 9 civil cases, 51 special proceeding cases and 9 land
registration cases, (a total of 75 cases) did not pass through the raffle committee but went directly to the
branch which apparently acted on the cases without question. In 1987, 8 criminal cases, 9 civil cases, 13
special proceedings cases, 2 land registration cases (a total of 32 cases) did not pass through the raffle
committee. In 1988, 9 civil cases, 18 special proceedings cases and 2 land registration cases (a total of 29
cases) went directly to the branches mentioned. A total of 136 cases from 1986 to 1988, Attorney Sanglay
reports, went from filing/docketing direct to two branches without undergoing the mandated raffle by the
raffle committee.
The more germane report, one which demonstrates the continuing perpetuation of the above obviously
illegal and nefarious system of directing cases filed with the Regional Trial Court of San Fernando, La
Union to Branches 26 and 27 of that court, is the undated report of Clerk of Court Aurora P. Sanglay to
Executive Judge Braulio Yaranon, and received by his office on June 6, 1991. The letter, uncontroverted, is
marked Exhibit A, Court Administrator, and it reads thus:

In compliance to (sic) your memorandum dated May 23, 1991, directing the undersigned
to make an investigation re the matter of cases filed before my office (Office of the Clerk
of Court), which did not undergo the mandatory raffle procedure, herewith are my
findings:
The period covered by my investigation is from April 3, 1989 to April 1991. In summary,
during this period, there were FORTY-FOUR (44) Special Cases, TWENTY-SEVEN (27) Land
Registration Cases, SIX (6) Civil Cases, and THREE (3) Criminal Cases which did not pass
through raffle, but which were instead directed to specific RTC Branches, particularly
Branch 26 and Branch 27. A great majority of these cases however were assigned to
Branch 26.
Attached is the list of these cases mentioned for your reference. This data obtained ( sic)
by counterchecking the Minutes of previous raffles covering the period of my
investigation vis-a-vis the corresponding docket books.
Until your memorandum dated May 24, 1991, the following persons were in-charge of
receiving and docketing the following kinds of cases:
Mrs. Pacita Diaz — Land Registration Cases
Miss Ma. Concepcion Diaz — Special Proceedings Cases
Mr. Alfredo Lacsamana — Civil Cases
Criminal Cases were docketed by Mr. Vicente Tatunay of the Prosecutor's Office and
received by either Mr. Alfredo Lacsamana, Jr., the person handling all cases filed for raffle,
or Mr. Oscarlito Fantastico or any of the clerks in the OCC, in his absence.
Supposed to be, all these filed cases are to be turned over to Mr. Alfredo Lacsamana, Jr.
for raffle, but as per my findings, some of these cases were not at all included in the
mandatory raffle, but were instead directed to specific RTC Branches. The possibility is not
remote that these clerks in-charge of receiving their respective cases deliberately did not
submit some of their received cases for raffle.
A lapse in the system and poor monitoring also provided for this thing to happen.
Instances are common where a client/lawyer is allowed possession of the papers to be
filed at certain critical stages of the receiving process, specifically after the docketing and
payment of filing fees, and after said stages, the possibility is not likewise remote that
these papers are not submitted to the person in-charge of the raffle.
The undersigned had already instituted procedures, i.e. centralized receiving, payment of
filing fees, docketing, and has strengthen (sic) monitoring of the cases and the number of
cases filed to prevent occurrence (sic) of similar nature. (Exhibit A, Court Administrator,
pp. 76-77, rec., 3rd Folder.)
Clerk of Court Sanglay's report includes 44 special proceedings cases, 27 land registration cases, 6 civil
cases and 3 criminal cases or a total of 80 cases that did not pass through raffle from April, 1989 to April,
1991 but found their way directly to Branches 26 and 27 of the Regional Trial Court of San Fernando, La
union. Of these 80 cases, all, except 3, found their way to Branch 26, occupied by respondent Judge
Genaro Gines who, as he admits, was assigned in (sic) that branch since January, 1987.
The respondents here are Judge Genaro Gines, the incumbent presiding judge of Branch 26 of the RTC in
Judicial Region No. 1 based in San Fernando, La Union; Pacita Diaz, a staff member in that court now
retired in the period covered by the Sanglay report, in charge of filing and docketing of land registration
cases; Pacita Diaz's daughter, Ma. Concepcion Diaz, another staff member in Branch 26, during the period
covered by the Sanglay report, the clerk in charge of the filing and docketing of special proceedings
cases; Alfredo Lacsamana, Jr., in the period covered by the Sanglay report the clerk in-charge of the filing
and docketing of civil cases; Rosie Munar, court stenographic reporter; and Ma. Gorgonia Flores, court
interpreter and the Officer-in-Charge of Branch 26. Francisco Lacsamana, Jr., additionally, was assigned to
gather all cases filed and docketed in the week — civil, criminal, special proceedings, land — one day
before the weekly raffle, and to transmit these newly filed cases to the Committee on Raffle. Ma. Gorgonia
Flores, Officer-in-Charge of Branch 26, oversees the administrative machinery of Branch 26 (pp. 8-9, t.s.n.,
September 28, 1992).
The respondents felt that since the Court Administrator limited himself to the sworn statement and report
of Clerk of Court Attorney Aurora Sanglay, they were not called upon to present evidence in their behalf

as it would amount to self-incrimination. They refused to testify; they refused to be cross-examined. Your
investigator informs the Court that the Sanglay affidavit and report are uncontroverted. Admissions in the
sworn statements forming part of the record are utilized in this report in addition to the stipulated facts.
The respondents are charged in the administrative complaint:
(1) for dishonesty, in violation of paragraph (e), section 3 of Republic Act No. 3019, the
Anti-Graft and Corrupt Practices Act, as amended;
(2) for violation of Administrative Order No. 6, dated June 30, 1975;
(3) for violation of Circular No. 7, dated September 23, 1974; and
(4) for violation of Administrative Order No. 1, dated January 28, 1988.
The last three, Supreme Court issues, have to do with the creation of a raffle committee in multi-branch
Regional Trial Courts, with supervision of the raffle of newly-filled cases; with the manner of raffling cases,
and establish the policy that no case, in multi-branch trial courts, may be assigned to any branch
or sala unless it had undergone the raffle process.
Supreme Court Circular No. 7, September 23, 1974 mandates that in courts with several branches, cases
shall be assigned to the different branches only by raffle. "No case may be assigned to any branch without
being raffled." (Part I) And immediately after raffle, the Executive Judge is mandated by the said Circular to
indicate the particular branch to which the case is raffled, "the same to be written in words and in figures
on the cover of the Rollo and on the first page of the original complaint or information and initialled by
the Executive Judge and the two other officers who attended said raffle." (Part III). The same circular
created a raffle committee of three, composed of the Executive Judge and two other judges of the court.
The Executive Judge, supervises the Raffle. Administrative Circular No. 1, (January 28, 1988) reiterates strict
compliance with Administrative Order No. 6 (June 30, 1975) and Circular No. 7 (September 23, 1974 Raffle
of cases, this later Circular required, must be "in open session in the presence of lawyers and spectators . .
. . ." (Section 8.1). The Court in this later Circular restated the res ipso loquitor (sic) rule regarding the
conduct and removal of judges (Section 5.2).
It is therefore, beyond cavil, that under the rules governing the administration of courts, all cases filed in
court must go through the raffle committee for assignment. No case must be assigned, in multi-branch
courts, unless it is raffled by the Raffle Committee. The 80 cases involved in this case, filed from April 1989
to April 1991, were not raffled, but were directly assigned to, or taken by, Branch 26 (except 3) under
respondent Judge Gines. Respondent Judge Gines must know, under the above Supreme Court acts, at a
simple glance on the cover of the rollo and the first page of every such record, whether a case was
assigned to him after going through raffle or not. Cases assigned to his branch, after going through the
required raffle, show on the face of the rollo, in words and in figures, the branch to which the case is
assigned, authenticated by the initials of the Executive Judge and the two other members of the
Committee. From January 1987, when respondent Judge Gines was appointed to Branch 26, the
respondent judge had received unraffled cases, considered them and decided them. He had done so,
apparently, not because he was a maniac of a worker, nor because he loved his work but for reasons
unspoken in this case. Why should a sane judge accept additional cases for study and decision, in addition
to his regular load, without any benefit or consideration? Here obviously, the res ipso loquitor(sic)
doctrine applies.
Among the administrative officers charged here, Alfredo Lacsamana, Jr., as stipulated, gathers all the cases
filed and docketed in any particular week, for transmittal to the Committee on Raffle. He prepared the
cases for raffle, including the preparation of the pieces of paper properly written on, to be picked in the
raffle. It was his job to do so. He was assigned to do so; he admitted so. That he did not do so is obvious
from the Sanglay Report — from 1989 to 1991, he failed to transmit 80 cases — and these cases found
their way (except for 3) to respondent Judge Gines. The Sanglay report is not controverted. It was
Lacsamana's job to collect all cases docketed, and to transmit them to the Raffle Committee. 80 such
cases he did collect and failed to report to the Raffle Committee from April, 1989 to April, 1991.
The Diazes, in the period covered by the Sanglay report had apparently fallen out with respondent Judge
Gines and respondents Flores, Munar and Lacsamana. In an affidavit dated September 18, 1991 executed
by respondent Ma. Concepcion Diaz, the following passages appear, to wit:
xxx xxx xxx
The conflict between the Diazes and the other respondents deem ( sic) to have arisen from the suspicion
the respondent Judge entertained that the Diazes had 'squealed' on him to the Executive Judge, the

Honorable Braulio Yaranon. This is contained in the Diazes Joint Affidavit dated September 9, 1992
(Marked C-Diaz), in the following passage:
xxx xxx xxx
As to the two other respondents, respondents Ma. Gorgonia Flores, who is officer-in-charge of Branch 26
and Rosie Munar, court interpreter, there appears to be no evidence. The record shows that when the
Court Administrator's lawyers rested their case with the presentation of the Sanglay report, the
respondents refused to be cross-examined on their sworn statements. Consequently, each sworn
statement lost value as evidence against the other respondents. However, it may be easily inferred that as
court officer-in-charge, respondent Flores was in (sic)-duty bound to supervise the work of her subalterns.
The non-raffling of 80 cases during the period covered from April, 1989 to April 1991 reflects her failure to
do her job.
xxx xxx xxx
The Supreme Court orders and circulars complained of as having been violated, are directed to district
judges, while Section 3, paragraph (e) of RA 3019 is inclusive in scope, penalizing public officers for
causing undue injury to any party . . . . or giving any private party any unwarranted benefits, advantage or
preference in the discharge of his official, administrative a (sic) judicial functions through manifest
partiality, evident bad faith or gross inexcusable negligence. . . .
The prosecution had limited itself to presenting the Sanglay report. It is apparent that we must take the
Diazes' statement that they were pressured to do that which they had to do, and whatever it was, was
done without consent, and against their will. However, under the facts here, all the cases filed docketed in
Branch 26 were collected by respondent Lacsamana, Jr., who was in (sic) duty bound to forward the cases
to the Raffle Committee. That 80 such cases did not find their way to the Committee, but ended up as 80
extra cases (except 3) in the docket load of the respondent judge, means at the very least that Lacsamana,
Jr., failed to perform his job. The respondent judge in accepting or securing, such 80 cases, (minus 3) that
did not pass through raffle, for his action and resolution, and which he eventually resolved violated all the
Supreme Court circulars on the matter with the help and cooperation of respondent Lacsamana, Jr.
Evidently, respondent judge must have received undue benefits and advantages (which have not been
demonstrated in this case) in securing this extra load of cases, benefits and advantages coming from the
party benefited (sic) by his action, and at the same time, granted the parties involved in the some ( sic) 80
cases that did not undergo raffle, undue and unwarranted benefits resulting from the bias and partiality in
their favor coming from the respondent judge. As earlier observed, a single glance at the cover and first
page of each of the 80 or so rollos would show that they were unraffled, and yet, the respondent judge
knowing that such cases were unraffled, secured the said cases, considered them and decided or resolved
them, in violation of law.
It would appear, therefore, that the respondent judge is guilty of the charges in the administrative
complaint. Along with him as guilty, is respondent Alfredo Lacsamana, Jr. This conclusion is bolstered by,
among other things, the Diazes' statement that cases were indeed directly secured by the respondent
judge without their undergoing raffle.
With respect to the other respondents, it could be deduced that the respondent Ma. Gorgonia Flores, as
officer-in-charge of Branch 26, would have known that Alfredo Lacsamana, Jr. was not doing his job of
forwarding all docketed cases to the Raffle Committee faithfully.
He then recommends:
WHEREFORE, it is respectfully recommended:
1. That respondent Judge Genaro C. Gines be appropriately penalized for violation of all
the Supreme Court orders and circulars mentioned in the Administrative Complaint for
the period covered from April 1989 to April 1991, plus apparent violation of Section 3,
paragraph (e) of R.A. 3019;
2. That respondent Alfredo Lacsamana, Jr. for his apparent failure to do his job, be,
likewise appropriately penalized, at least with a 6-month suspension without pay; and
3. That respondent Ma. Gorgonia Flores be likewise penalized with a 3-month suspension
without pay; and
4. That the other respondents be warned against committing any such violations.

The continuing deliberate violations of Administrative Order No. 6 (dated 30 June 1975), Circular No. 7 (dated 23
September 1974) and Administrative Order No. 1 (dated 28 January 1988) for the years reported in Atty. Sanglay's report,
and their belated discovery boggle our minds. The irregularities should have been easily discovered by the respondent
Judge either because the fact that a case has not been properly raffled off is at once discernible on the cover of the
records and on the first page of the original of the initial pleading (complaint, information, etc.), or because plain common
sense would have told him that something was wrong somewhere as an unusual number of cases of the same class had
been "assigned" to his sala. That he had failed to appreciate the physical evidence or, at the very least, exhibit surprise at
the unusual number of cases is quite amazing. Thus, we are loathe to grant him the benefit of the doubt and conclude
that he had no interest whatsoever in having those cases raffled off to him and that he only loved to work more than the
others. Given the circumstances of this case, we cannot merely cut him some slack and assume good faith on his part; he
deserves no such treatment. As the investigating Justice himself assessed the situation:
. . . . The 80 cases involved in this case, filed from April 1989 to April 1991, were not raffled, but were
directly assigned to, or taken by, Branch 26 (except 3) under respondent Judge Gines. Respondent Judge
Gines, must know, under the above Supreme Court acts, at a simple glance on the cover of the rollo and
the first page of every such record, whether a case was assigned to him after going through raffle or not. .
. . From January 1987, when respondent Judge Gines was appointed to Branch 26, the respondent judge
had received unraffled cases, considered them and decided them. He had done so, apparently, not
because he was a maniac of a worker, nor because he loved his work but for reasons unspoken in this
case. Why should a sane judge accept additional cases for study and decision, in addition to his regular
load, without any benefit or consideration? Here, obviously, the res ipso loquitor(sic) doctrine applies.
The irregularity and violations of the aforementioned administrative orders and circular could not have been committed so
blatantly, brazenly and openly for an unusually long period of time if the respondent Judge did not have the cooperation
of some of the court employees. We therefore agree with the investigating Justice that such support and cooperation
were extended by subordinates who likewise had something to do with the raffle of cases. Hence, the findings on the
degree of participation, either by commission or omission, of respondents Flores and Lacsamana are sustained.
In his report, the investigating Justice absolves the Diazes and Munar from responsibility in the aforesaid irregularities.
With respect to respondent Pacita Diaz, the case has become moot as she died on 10 February 1993. 1 Thus, the case is
dismissed insofar as she is concerned.
On the other hand, while we find no evidence to link respondent Munar to the aforementioned irregularities, we hold that
respondent Ma. Concepcion Diaz is not entirely blameless. In her affidavit of 18 September 1991, the relevant portions of
which are quoted in the REPORT of Justice de Pano, she explicitly admitted:
11. In my explanation dated May 27, 1991 to the Memorandum of Judge Yaranon, while I might have
made an admission that I was the clerk receiving cases that later turned out to be unraffled, I placed the
direct blame on Judge Gines and my two officemates, namely, Mrs. Ma. Gorgonia L. Flores and Mrs. Rosie
Munar who had applied all sorts of pressures upon me, including series ( sic) of intimidation and,
insinuations in order that cases of their choice receive (sic) by me may no longer be forwarded to the
proper officer-in-charge of the raffle, but to them directly in Branch 26. 2
It is to be noted that Ma. Concepcion did not elaborate on the nature of such intimidation and insinuations. In view of the
fact, however, that she was in charge of receiving and docketing special proceedings cases, and that out of the
controversial 80 unraffled cases, 44 were special proceedings cases, her participation could, by no means, be considered as
insignificant. And even if the alleged "intimidation" and "insinuations" were true, they still would not exculpate her in view
of the length of time involved, the number of cases questioned and the absence of proof that such intimidation and
insinuations were persistent, continuous and irresistible. It is thus clear that she had, by neglecting her duty, allowed
herself to be used by the other respondents.
A far more serious matter which has escaped the attention of the investigating Justice involves the charges set forth under
paragraph 3 of the Administrative Complaint, particularly on the preparation by the respondent Judge, allegedly in
coordination with respondents Munar and Flores, of petitions in certain cases, some of which are (a) Special Proceeding
No. 1965 wherein it is made to appear that the petitioner therein an aunt of the respondent Judge and a resident of Sta.
Cruz, Ilocos Sur — resides in San Fernando, La Union, and (b) Special Proceeding No. 1967 wherein the Office of the
Solicitor General and the other parties were not furnished with copies of the petition upon order of the respondent Judge.
Not having undergone the prescribed raffle procedure, these two cases were directly assigned to the respondent Judge
who then acted thereon. The said petitions, the pertinent orders issued in the course of the proceedings therein and the
minutes thereof were attached by the respondent Judge to his 14 May 1993 Comment, which he had adopted as his direct
testimony pursuant to his 17 September 1992 Manifestation (Exhibit "J"). These documents provide conclusive proof of
more serious irregularities amounting to either gross ignorance or malicious disregard of applicable procedural laws,
grave misconduct, grave abuse of authority and conduct prejudicial to the best interest of the service. The respondent
Judge made a mockery of the judicial process as it is obvious that he had displayed a special interest in these cases; in fact,
he even caused the cases to be excluded from the raffle. A careful review of the abovementioned petitions will reveal that
the designation "Branch 26," indicating the branch presided over by the respondent Judge, has been originally typewritten
as part of the caption, and not merely entered in the blank space reserved for the branch to which the case may
subsequently be raffled off. It is to be further observed that the petition in Special Proceeding No. 1965 was subscribed
and sworn to before respondent Flores in her capacity as the Officer-in-Charge of the Office of the Clerk of Court, Branch
26.
Special Proceeding No. 1965 involves a petition for guardianship over the person and property of a certain Juan R.
Lagmay. The said petition was filed by Regina Lagmay Valdez — who claims to be a resident of Poblacion, San Fernando,
La Union3 — on 24 September 1990, and alleges that Juan R. Lagmay is " presently residing at No. 2579 Pamintuan Village,
Mabalacat, Pampanga." Upon its filing, the respondent Judge immediately issued an order (a) giving due course to the
petition, (b) directing that notices be served to Juan Lagmay's nearest of kin, namely Bonifacia Lagmay, Lilia Gumangan
and Mariano Lagmay, all residents of Las-ud, Sta. Cruz, Ilocos Sur and (c) directing the latter to submit their opposition to
the petition, if any, on or before 8 October 1990 at 8:30 a.m. 4 No order setting the case for hearing at that particular date,
time and place was issued. It would appear, however, that this 24 September 1990 order was considered by the
respondent Judge as the order setting the case for hearing on 8 October 1990 because respondent Flores prepared the
Minutes of the alleged proceedings conducted on 8 October
1990. 5 The said Minutes show that the following exhibits were offered for jurisdictional purposes,: (1) Notice of hearing, as
Exhibit "A" and (b) the dorsal side of Exhibit "A," purportedly to show that Juan Lagmay's nearest of kin were furnished
with the notice of hearing, as Exhibit "A-1. " Said Minutes further disclose that the petitioner therein was not assisted by
counsel; that respondent Flores acted as Interpreter while respondent Munar acted as Stenographer; and that since no
opposition was filed therein, the testimony of the petitioner was received. The latter then allegedly declared that she is a
resident of Poblacion, San Fernando, La Union; she is Juan Lagmay's niece as he is her father's brother; and Juan Lagmay is
an American citizen, single, childless, a resident of 2579 Pamintuan Village, Mabalacat, Pampanga and a retired seaman
receiving pension from the Social Security Administration of the United States of America in the amount of $550.00 a
month. Thereafter, the respondent Judge issued an order appointing petitioner Regina Valdez as the guardian of the
person and property of Juan R. Lagmay, and directing her to take her oath as such upon the filing of a bond of P500.00,
after which she would be issued letters of guardianship. Without the bond having first been filed, however, respondent
Flores administered the oath to Regina Valdez. 6 Thereafter, or on 18 October 1990, respondent Flores issued to the latter
her letters of guardianship. 7
A closer examination of the so-called proofs of notice of hearing to the nearest of kin, consisting supposedly of "registry
return receipts," reveals that there are no entries in the blanks reserved for information on the name of sender, name of
post office, municipality or province where the same post office is located, registry number and case number. It is not
likewise indicated therein when the addressees received the "registered" letter. In view thereof, the conclusion that the so-
called notices were not sent at all is inevitable.
Respondent Judge knew or ought to have known that his court was not the proper venue for the case because the person
sought to be placed under guardianship was alleged to be a resident of Mabalacat, Pampanga. Section 1, Rule 92 of the
Revised Rules of Court provides that:
Guardianship of the person or estate of a minor or incompetent may be instituted in the Court of First
Instance of the province, or in the justice of the peace court of the municipality, or in the municipal court
of the chartered city where the minor or incompetent resides,. . . . (emphasis supplied).
Worse, the aforesaid Order of 24 September 1990 did not even direct that notice be served on Juan Lagmay, the very
party sought to be placed under guardianship. Such an omission, therefore, clearly violated Section 3, Rule 93 of the
Revised Rules of Court which directs the court to fix the time and place for hearing and cause reasonable notice to be
given to the person named in the petition, including the minor if above 14 years of age or the incompetent himself. We
have ruled that service of notice to the minor above 14 years of age or the incompetent is jurisdictional. 8 Failing to have
notice sent to Juan Lagmay, respondent Judge had no jurisdiction to proceed with the hearing on 8 October 1990, receive
the petitioner's testimony, if he did at all, and thereafter appoint her as Juan Lagmay's guardian. Nor was the respondent
Judge justified in issuing on 22 January 1990 — pursuant to the petitioner's 17 January 1990 motion 9 — an order
appointing deputy sheriffs Oscar Fantastico and Romualdo Baladad as special sheriffs to take custody over the person of
Juan Lagmay from one Florencio "Boy" Cortes of Bolinao, Pangasinan. In the said order, respondent Judge further directed
Boy Cortes "to release from his custody and deliver the person of said Juan R. Lagmay, a.k.a. John R. Lagmay to the
aforementioned special sheriffs immediately upon receipt of this Order, under pain of contempt." 10 Based on the special
sheriffs' report, 11 however, Boy Cortes did not release Juan Lagmay because the latter was too weak and sickly to travel.
This refusal prompted the respondent Judge to order Boy Cortes' arrest (for contempt) and confinement until he shall
have complied with the said order. 12 It was respondent Flores who forwarded the warrant of arrest to the PNP Regional
Command at San Fernando, La Union for its service. 13
Having acquired no jurisdiction to hear the case and appoint Regina Valdez as Juan Lagmay's guardian, respondent Judge
acted clearly beyond his authority when he designated special sheriffs to take custody of Juan Lagmay, directed the
person who had custody over the latter to deliver him to the said special sheriffs and ordered the arrest of the said person
who refused to surrender custody. And even if we are to assume, for the sake of argument, that the respondent Judge had
validly acquired jurisdiction over the case and appointed Regina Lagmay as guardian, and that Boy Cortes did in fact
refuse to deliver Juan Lagmay to the special sheriffs, he (respondent Judge) would still be guilty of gross ignorance of the
law for ordering Cortes' arrest and confinement. In such a situation, the petitioner's remedy would be to file a petition
for habeas corpus, and not to have Boy Cortes cited for contempt, much less arrested.

We shall now focus our attention to Special Proceeding No. 1967. It is very strange proceeding. The case involves a
petition for the "judicial confirmation of the de facto adoption" of Cecilia Averion filed on 11 October 1990. The petitioner
therein alleges that she and her late husband, Fernando Averion — who died in 1987 — "adopted" Cecilia Averion in 1967;
only 1 year and 3 months old at the time, Cecilia was supposedly given up by her natural parents, the whereabouts of
whom remain unknown. Petitioner further avers that she and her husband, during his lifetime, reared the child and gave
her all their love, attention, care and understanding. They also provided her with an education and considered her as their
own child. Hence, the petition was filed "for the purpose of judicially confirming the de facto adoption of Cecilia Averion
by herein petitioner and her late husband."14 The said petition was not accompanied by the written consent of Cecilia
Averion who, at the time of filing, was already of legal age. On the very day the petition was filed, respondent Judge
forthwith issued a Notice of Hearing which provided that the petition would be heard on 31 October 1990; it was likewise
ordered therein that "a copy of this notice be published once a week for three consecutive weeks at the expense of the
petitioner in a newspaper of general circulation in La Union and in the Philippines." 15
From the so-called Minutes of the proceedings of 31 October 1990, 16 as prepared by respondent, Flores, it appears that
the following exhibits were offered to establish the jurisdiction of the court: (1) the affidavit of the Editor of the North
Tribune, "a newspaper of general circulation in La Union and Northern Luzon provinces," published in San Fernando, La
Union, as Exhibit "A"; (2) clippings of the published order in the 10, 17 and 24 October 1990 issues of the North Tribune, as
Exhibits "A-l," "A-2" and "A-3," respectively; and (3) the entire issues of the North Tribune for 10, 17 and 24 October 1990,
as Exhibits "B," "B-1" and "B-2," respectively. It may further be gleaned from the said Minutes that since no opposition was
registered by any other party, the petitioner's testimony was received by the court. On 6 November 1990, the respondent
Judge handed down a decision 17 granting the petition and decreeing as follows:
WHEREFORE, this Court hereby approves the petition and hereby confirms the de facto adoption of
Cecilia Averion by herein petitioner and her late spouse Fernando Averion retroactive to the year 1967.
The remedy pursued in Special Proceeding No. 1967 is certainly unusual as we are not aware of any prescribed action that
may be instituted for the judicial confirmation of a de facto adoption. Nor do our adjective and substantive laws on
adoption provide for such a proceeding. In fact, the only proper and authorized procedure relative to adoption is outlined
in the rule on adoption itself. 18 That Cecilia Averion had been treated by the petitioner and her husband as their own child
during the former's minority may only provide compelling reasons to grant the decree of adoption notwithstanding her
(Cecilia's) having attained the age of majority. This is one of the exceptions provided by the Family Code to the rule that a
person of legal age cannot be adopted. 19
In "confirming" the so-called de facto adoption and decreeing the same to be "retroactive to the year 1967," respondent
Judge has carved a name for himself in history for, as already pointed out, no action or proceeding for judicial
confirmation of a de facto adoption is authorized in this jurisdiction. Furthermore, by its very nature and purpose, a decree
of adoption can never be made to retroact. Lastly, considering that the petitioner's husband had died in 1987, or three
years before the petition was filed, he could not now be resurrected for purposes of the adoption, be in fact declared an
adopter and be subsequently bound by the decree to the prejudice of his heirs.
Then too, respondent Judge completely disregarded the fact that Cecilia Averion had submitted no written consent to the
adoption at the time of the filing of the petition or at any subsequent date — a manifest infirmity. Nor was Cecilia called
to testify in the case. Moreover there seems to be an irregularity in the publication of the notice of hearing. It is to be
observed that as indicated in the upper right hand corner of the first page of the petition, the proceeding was instituted
on 11 October 1990. If this were so, the notice of hearing which was issued by the respondent Judge on that same
date 20 could not have been published in the North Tribune in its 10 October 1990 issue. In his affidavit, the Editor of the
said newspaper disclosed that the notice was indeed published on 10 October 1990.
All told, respondent Judge completely ignored the procedural rules on adoption and promulgated guidelines for himself
to suit his own purpose and design.
Hence, it is evident that Special Proceeding No. 1965 and Special Proceeding No. 1967 were not only directly filed with the
court of the respondent Judge without passing through the raffle procedure, the two cases were also resolved by the latter
in a manner that may be characterized by gross ignorance or the brazen and blatant disregard of the applicable
procedural laws, grave misconduct, palpable abuse of authority and conduct prejudicial to the best interest of the service.
He is therefore unfit to continue in the service a day longer. He has evidently forgotten that the administration of justice is
a sacred task. Upon assumption to office, a judge ceases to be an ordinary mortal. He becomes "the visible representation
of the law and, more importantly, of justice." 21 A judge must be the embodiment of competence, integrity and
independence, 22 and should be studiously careful to avoid even the slightest infraction of the law, lest it be a
demoralizing example to others. 23
As shown in the above disquisitions, respondent Flores was a willing participant in the commission of the irregularities in
both proceedings. On the other hand, however, respondent Munar's participation has not been substantiated.
Before closing, we would like to point out that per our Resolution of 2 March 1993, we referred to Justice De Pano for
inclusion in his investigation the 29 January 1993 letter of Executive Judge Braulio Yaranon which was addressed to
Deputy Court Administrator Juanito Bernard. 24 In his letter, Judge Yaranon informs the latter about matters discovered in

the course of the audit which are more serious than the "illegal raffling" of cases. He then exposes alleged case fixing and
illegal office practices committed on a large scale by a syndicate composed principally of court officers and personnel, and
describes the modus operandi of those involved as follows:
The operation in a particular case, starts with "AMBULANCE CHASING"; after arrangements are made with
a prospective applicant/petitioner, a petition is prepared by the syndicate; the same is then signed
personally by the petitioner/applicant; and the oath for purposes of verification, is administered also by
the syndicate.
The petition/application is then filed with the Office of the Clerk of Court, where syndicate members
receive and docket the case in the docket book of Branch 26; the case is deliberately separated from the
cases that are turned over to the Raffle Committee, and is directly turned over to Branch 26. Care is taken
that the date of filing is made to coincide with the scheduled day for raffling of cases (Tuesdays).
On the same date of filing, the ORDER setting the case for initial hearing, is issued by Branch 26. On the
date of initial hearing, a lawyer-contact of the syndicate enters an appearance for the petitioner/applicant,
and he then presents jurisdictional facts.
On the very same day of initial hearing (in special proceedings) and without any ACTUAL HEARING (in
special proceedings and land registration cases), for the reception of evidence on the material allegations
of facts in the application/petition, a DECISION is forthwith issued.
Judge Yaranon then partly concludes:
Just one aspect of the matter is herein submitted for consideration. The issuance of a DECISION without
any previous hearing being held for the reception of evidence by the applicant/petitioner, constitutes
FALSIFICATION OF A PUBLIC DOCUMENT by a public officer, under Article 171, Revised Penal Code
committed by:
2. Causing it to appear that persons have participated in an act or proceeding when they did not in fact so
participate; . . . (par. 2, Art. 171, Revised Penal Code).
According to Justice De Pano, he received the 2 March 1993 Resolution just as he was about to write his report in this
case. He then suggests that the matter subject thereof be treated separately and that "appropriate, charges be leveled
against the respondent Judge principally, and his cohorts with the Tanod Bayan, for criminal prosecution." 25Indeed, the
referral of Judge Yaranon's letter to Justice De Pano may have been too late. In any event, the charges proffered therein
may be separately dealt with.
IN THE LIGHT OF ALL THE FOREGOING, judgment is hereby rendered:
(1) DISMISSING from the service respondent Judge GENARO C. GINES with prejudice to re-employment,
in the government, including government-owned or controlled corporations, and with forfeiture of all
benefits except earned leave credits. This dismissal shall be immediately executory and said respondent
Judge is hereby ordered to forthwith vacate his position and desist from performing any further official
function;
(2) SUSPENDING from office respondents MA. GORGONIA L. FLORES and ALFREDO V. LACSAMANA, JR.
for a period of six (6) months each, without pay;
(3) SUSPENDING from office respondent MA. CONCEPCION B. DIAZ, for a period of three (3) months,
without, pay.
The foregoing suspensions shall take effect immediately upon the service of a copy of this Decision on the
aforenamed respondents MA. GORGONIA L. FLORES, ALFREDO V. LACSAMANA, JR. and MA.
CONCEPCION B. DIAZ. The periods of their respective suspensions shall not be charged against their leave
credits, if any;
(4) DISMISSING this case as against respondent PACITA B. DIAZ in view of her demise; and
(5) DISMISSING this case as against respondent ROSIE M. MUNAR for lack of substantial evidence.
The Office of the Court Administrator is hereby directed to evaluate the 29 January 1993 letter of Executive Judge Braulio
Yaranon — subject of the 2 March 1993 Resolution of this Court in this case and to submit to this Court appropriate
recommendations thereon within fifteen (15) days from receipt of a copy of this Decision.
SO ORDERED.

2. G.R. No. 97906 May 21, 1992 REPUBLIC OF THE PHILIPPINES, petitioner,
vs. COURT OF APPEALS and MAXIMO WONG, respondents.
REGALADO, J.:
Petitioner seeks to set aside the judgment of respondent Court of

Appeals in affirmance of the decision of the court a quo granting the petition filed by herein private respondent
1 2
Maximo Wong for the change of his name to Maximo Alcala, Jr. which was his name prior to his adoption by Hoong Wong
and Concepcion Ty Wong.
The facts are undisputed. Private respondent Maximo Wong is the legitimate son of Maximo Alcala, Sr. and Segundina Y.
Alcala. When he was but two and a half years old and then known as Maximo Alcala, Jr., and his sister Margaret Alcala, was
then nine years old, they were, with the consent of their natural parents 3 and by order of the court in Special Case No.
593 4 issued on September 9, 1967, adopted by spouses Hoong Wong and Concepcion Ty Wong, both naturalized
Filipinos. Hoong Wong, now deceased, was an insurance agent while Concepcion Ty Wong was a high school teacher.
They decided to adopt the children as they remained childless after fifteen years of marriage. The couples showered their
adopted children with parental love and reared them as their own children.
Upon reaching the age of twenty-two, herein private respondent, by then married and a junior Engineering student at
Notre Dame University, Cotabato City, filed a petition to change his name to Maximo Alcala, Jr. It was averred that his use
of the surname Wong embarrassed and isolated him from his relatives and friends, as the same suggests a Chinese
ancestry when in truth and in fact he is a Muslim Filipino residing in a Muslim community, and he wants to erase any
implication whatsoever of alien nationality; that he is being ridiculed for carrying a Chinese surname, thus hampering his
business and social life; and that his adoptive mother does not oppose his desire to revert to his former surname.
As earlier stated, on July 2, 1986, the matter was resolved in favor of private respondent, the trial court decreeing that, the
jurisdictional requirements having been fully complied with, petitioner's prayer to change his name from Maximo Wong to
Maximo Alcala, Jr. was granted. 5 On appeal to respondent court, and over the opposition of petitioner Republic through
the Solicitor General, the decision of the court below was affirmed in full, hence, this petition for review on certiorari.
The lone issue to be settled is whether or not the reasons given by private respondent in his petition for change of name
are valid, sufficient and proper to warrant the granting of said petition.
The Solicitor General contends that private respondent's allegations of ridicule and/or isolation from family and friends
were unsubstantiated and cannot justify the petition for change of name. He claims that for private respondent to cast
aside the name of his adoptive father is crass ingratitude to the memory of the latter and to his adoptive mother who is
still alive, despite her consent to the petition for change of name. Further, the Solicitor General posits that the reversion of
Maximo Wong to his old name violates Articles 341 and 365 of the Civil Code, which requires an adopted child to use the
surname of the adopter, and would identify him with his parents by nature, thus giving the impression that he has severed
his relationship with his adoptive parents. 6
In refutation, private respondent argues that he did as the law required, that is, upon adoption he used the surname of the
adopter. However, being already emancipated, he can now decide what is best for and by himself. It is at this time that he
realized that the Chinese name he carries causes him undue ridicule and embarrassment and affects his business and
social life. In fact, his adoptive mother, being aware of his predicament, gave her consent to the petition for change of
name, albeit making it clear that the same shall in no way affect the legal adoption, and even underwent the rigors of trial
to substantiate her sworn statement. If his adoptive mother does not take offense nor feel any resentment, abhorrence or
insecurity about his desire to change his name, private respondent avers that there can be no possible prejudice on her,
much less the State. 7
We feel that we should preface our review of this case with a clear comprehension of the legal significance of a person's
name. For all practical and legal purposes, a man's name is the designation by which he is known and called in the
community in which be lives and is best known. It is defined as the word or combination of words by which a person is
distinguished from other individuals and, also, as the label or appellation which he bears for the convenience of the world
at large addressing him, of in speaking of or dealing with him. 8 Names are used merely as one method of indicating the
identity of persons; they are descriptive of persons for identification, since, the identity is the essential thing and it has
frequently been held that, when identity is certain, a variance in, or misspelling of, the name is immaterial. 9
The names of individuals usually have two parts: the given name or proper name, and the surname or family name. The
given or proper name is that which is given to the individual at birth or baptism, to distinguish him from other individuals.
The name or family name is that which identifies the family to which he belongs and is continued from parent to child. The
given name may be freely selected by the parents for the child; but the surname to which the child is entitled is fixed by
law. 10
A name is said to have the following characteristics: (1) It is absolute, intended to protect the individual from being
confused with others. (2) It is obligatory in certain respects, for nobody can be without a name. (3) It is fixed,
unchangeable, or immutable, at least at the start, and may be changed only for good cause and by judicial proceedings.

(4) It is outside the commerce of man, and, therefore, inalienable and intransmissible by act inter vivos or mortis causa. (5)
It is imprescriptible. 11
Title XIII, Book I of the Civil Code, in Articles 364 to 380, provides the substantive rules which regulate the use of surnames.
Considering the subject and personalities involved in this present review, particular attention must be called to Article 365
which mandates that "(a)n adopted child shall bear the surname of the adopter," in correlation with Article 341 on the
effects of adoption, among which is to"(e)ntitle the adopted person to use the adopter's surname." This same entitlement
of an adopted child is maintained in Article 39(3), Title II of Presidential Decree No. 603, otherwise known as the Child and
Youth Welfare Code. More recently, Executive Order No. 209, as amended by Executive Order No. 227, or the Family Code,
echoes the same statutory right of an adopted child to use the surname of the adopter. 12 Clearly, from the very wordings
of the law, it may be inferred that this use of the surname of the adopter by the adopted child is both an obligation and a
right.
Under Article 376 by the Civil Code, "(n)o person can change his name or surname without judicial authority." The
application for change of name thereunder involves a special proceeding governed by and conducted under the strictures
of Rule 103 of the Rules of Court and one which involves substantial changes, with the declared objective of such judicial
proceedings being the prevention of fraud. The purpose of the statutory procedure authorizing a change of personal
name is simply to have, wherever possible, a record of the change, and in keeping with the object of the statute, court to
which application is made should normally make its decree recording such change of name. 13
A change of name is a special proceeding to establish the status of a person involving his relation with others, that is, his
legal position in, or with regard to, the rest of the community. It is a proceeding in rem 14 and, as such, strict compliance
with all jurisdictional requirements, particularly on publication, is essential in order to vest the court with jurisdiction
thereover. 15 For this purpose, the only name that may be changed is the true or official name recorded in the civil
register. 16
To digress a little for purposes of clarification, the change of name contemplated under Article 376 and reglementarily
implemented by Rule 103 must not be confused with and cannot be effected through the summary proceeding proposed
in Article 412 of the some Code, as procedurally regulated by Rule 108 of the Rules, which refers only to correction of
clerical errors, such as those which are visible to the eye or obvious to the understanding, or an error made by a clerk or
transcriber, or a mistake in copying or writing, or some harmless or innocuous change, 17 and not those which will involve
substantial changes. 18
Turning now to the case at bar, we are guided by the jurisprudential dictum that the State has an interest in the names
borne by individuals and entities for the purpose of identification, and a change of name is not a matter of right but of
sound judicial discretion, to be exercised in the light of reasons adduced and the consequences that will likely follow; 19 it
is a privilege which may be granted only upon a showing of a proper or reasonable cause or compelling reason therefor. 20
We find unacceptable the assertion of the Solicitor General that private respondent's allegation of ridicule and
embarrassment due to the use of his present surname is unsubstantiated.
The testimony of private respondent in the lower court bears out the existence of valid cause in his bid for change of
name:
ATTY. DUMAMBA:
Q Now, after adoption, when you went to school, what did you use as your surname?
A "Wong," sir.
Q Now, after you adopted the surname "Wong?" in your studies, what did you observe?
A I observed that "Wong" as a surname embarrassed me to my friends and when I go

with Chinese friends I cannot talk Chinese. I am living in Campo Muslim, a Muslim
community but no one can believe that I am Muslim. I have a little business of Furniture
but I have little (sic) customer because no one believes me that I am Muslim.
Q You want to inform this Honorable Court that this family name you are using which is
"Wong" embarrassed you from (sic) your friends and relatives and also cause(d) damage
to your business?
A Yes sir.
xxx xxx xxx
ATTY. DUMAMBA:

Q Now, considering that according to you, you are embarrassed because of the family
name you are using, your friends shy away from you and it is a handicap in your business,
what is your desire for the Court to do in order to help you?
A Change my family name.
Q From "Wong" to what do you want your surname changed?
A "Alcala, Jr.", sir.
xxx xxx xxx
COURT:
Q What is your purpose in changing your family name from Maximo Wong to Maximo
Alcala, Jr.?
A I feel embarrassed to my friends and also to my relatives and as I said I have a little
business of furniture and only a few customers buying for the fact that they don't believe
I am Muslim.
Cross.
ATTY. SERO:
With the permission of the Honorable Court.
Q Your father's name is Maximo Alcala, Sr., is he still alive?
A Yes, sir.
Q And what does your father say to this proposed changed (sic) of your name, your
family name to your real family name given to you?
A Yes, sir.
Q They have no objection to it?
A No, sir.
Q Stated before this Honorable Court, the purpose why you wanted to change your name
from "Wong" to "Alcala" is so that to avoid embarrassment because you are a Muslim and
your Muslim relatives think that you are Chinese.
A Yes, sir.
Q Not for the purpose to hide anything or what not?
A No, sir. 21
The foregoing testimony of private respondent is materially corroborated by the testimony of private respondent's
adoptive mother:
Q Now, what did you observe to (sic) your son Maximo Wong after you and your
husband adopted him?
A When I adopted him and he used the surname "Wong" I observed that some of his
relatives, cousins and friends seem to shy away from him and despise him in school that
is why I agreed to change his name. 22
We uphold these observations in the decision of respondent appellate court:
The purpose of the law an allowing of change of name as contemplated by the provisions of Rule 103 of
the Rules of Court is to give a person an opportunity to improve his personality and to provide his best
interest. (Calderon vs. Republic, 19 SCRA 721). In granting or denying the petition for change of name, the
question of proper and reasonable cause is left to the discretion of the court. The evidence presented
need only be satisfactory to the court and not all the best evidence available is required. (Uy vs. Republic,
L-22712, Nov. 25, 1965; Nacionales vs. Republic,
L-18067, April 29, 1966; both cases cited in 1 SCRA 843). In the present case, We believe that the court a
quo had exercised its discretion judiciously when it granted the petition.
From the testimony of petitioner-appellee and of his adopter mother Concepcion Ty-Wong, We discern
that said appellee was prompted to file the petition for change of name because of the embarrassment
and ridicule his family name "Wong" brings in his dealings with his relatives and friends, he being a
Muslim Filipino and living in a Muslim community. Another cause is his desire to improve his social and
business life. It has been held that in the absence of prejudice to the state or any individual, a sincere
desire to adopt a Filipino name to erase signs of a former alien nationality which only hamper(s) social
and business life, is a proper and reasonable cause for change of name (Uy vs. Republic, L-22712, Nov. 25,
1965, Que Liong Sian vs. Republic, L-23167, Aug. 17, 1967, 20 SCRA 1074). Justice dictates that a person
should be allowed to improve his social standing as long as in doing so, he does not cause prejudice or
injury to the interest of the State or other persons (Calderon vs. Republic, supra). Nothing whatsoever is
shown in the record of this case that such prejudice or injury to the interest of the state or of other
persons would result in the change of petitioner's name. 23
It bears stressing at this point that to justify a request for change of name, petitioner must show not only some proper or
compelling reason therefor but also that he will be prejudiced by the use of his true and official name. 24Among the
grounds for change of name which have been held valid are: (a) When the name is ridiculous, dishonorable or extremely
difficult to write or pronounce; (b) When the change results as a legal consequence, as in legitimation; (c) When the
change will avoid confusion; 25 (d) Having continuously used and been known since childhood by a Filipino name, unaware
of her alien parentage; 26 (e) A sincere desire to adopt a Filipino name to erase signs of former alienage, all in good faith
and without prejudicing anybody; 27 and (f) When the surname causes embarrassment and there is no showing that the
desired change of name was for a fraudulent purpose or that the change of name would prejudice public interest. 28
In granting or denying petitions for change of name, the question of proper and reasonable cause is left to the sound
discretion of the court. The evidence presented need only be satisfactory to the court and not all the best evidence
available. 29 Summarizing, in special proceedings for change of name, what is involved is not a mere matter of allowance
or disallowance of the request, but a judicious evaluation of the sufficiency and propriety of the justifications advanced in
support thereof, mindful of the consequent results in the event of its grant and with the sole prerogative for making such
determination being lodged in the courts.
While it is true that the statutory fiat under Article 365 of the Civil Code is to the effect that an adopted child shall bear the
surname of the adopter, it must nevertheless be borne in mind that the change of the surname of the adopted child is
more an incident rather than the object of adoption proceedings. 30 The act of adoption fixes a status, viz., that of parent
and child. More technically, it is an act by which relations of paternity and affiliation are recognized as legally existing
between persons not so related by nature. It has been defined as the taking into one's family of the child of another as son
or daughter and heir and conferring on it a title to the rights and privileges of such. The purpose of an adoption
proceeding is to effect this new status of relationship between the child and its adoptive parents, the change of name
which frequently accompanies adoption being more an incident than the object of the proceeding. 31 The welfare of the
child is the primary consideration in the determination of an application for adoption. On this point, there is unanimous
agreement. 32
It is the usual effect of a decree of adoption to transfer from the natural parents to the adoptive parents the custody of the
child's person, the duty of obedience owing by the child, and all other legal consequences and incidents of the natural
relation, in the same manner as if the child had been born of such adoptive parents in lawful wedlock, subject, however, to
such limitations and restrictions as may be by statute imposed. 33 More specifically under the present state of our law, the
Family Code, superseding the pertinent provisions of the Civil Code and of the Child and Youth Welfare Code on the
matter, 34 relevantly provides in this wise with regard to the issue involved in this case:
Art. 189. Adoption shall have the following effects:
(1) For civil purposes, the adopted shall be deemed to be the legitimate child of the adopters and both
shall acquire the reciprocal rights and obligations arising from the relationship of parent and child,
including the right of the adopted to use the surname of the adopters; (Emphasis supplied.)
xxx xxx xxx
The Solicitor General maintains the position that to sustain the change of name would run counter to the behest of Article
365 of the Civil Code and the ruling in Manuel vs. Republic 35 that "one should not be allowed to use a surname which
otherwise he is not permitted to employ under the law," and would set a bad example to other persons who might also
seek a change of their surnames on lame excuses. 36
While we appreciate the Solicitor General's apprehensions and concern, we find the same to be unfounded. We do not
believe that by reverting to his old name, private respondent would then be using a name which he is prohibited by law
from using. True, the law prescribes the surname that a person may employ; but the law does not go so far as to

unqualifiedly prohibit the use of any other surname, and only subjects such recourse to the obtention of the requisite
judicial sanction. What the law does not prohibit, it permits.
If we were to follow the argument of the Solicitor General to its conclusion, then there will never be any possibility or
occasion for any person, regardless of status, to change his name, in view of the supposed subsequent violation of the
legal imperative on the use of surnames in the event that the petition is granted. Rule 103 of the Rules of Court would
then be rendered inutile. This could hardly have been the intendment of the law.
A petition for change of name is a remedy allowed under our law only by way of exception to the mandatory provisions of
the Civil Code on the use of surnames. The law fixes the surname that may be used by a person, at least inceptively, and it
may be changed only upon judicial permission granted in the exercise of sound discretion. Section 1 of Rule 103, in
specifying the parties who may avail of said remedy, uses the generic term "persons" to signify all natural persons
regardless of status. If a legitimate person may, under certain judicially accepted exceptional circumstances, petition the
court for a change of name, we do not see any legal basis or logic in discriminating against the availment of such a
remedy by an adopted child. In other words, Article 365 is not an exception, much less can it bar resort, to Rule 103.
We are of the view that the circumstances herein obtaining are within the ambit of the established exceptions and find
merit in private respondent's submission:
Rule 103 of the Rules of Court has its primordial purpose which (State) is to give a person in opportunity
to improve his personality and provide his best interest (Calderon vs. Republic, 19 SCRA 721). In the
instant case, the court a quo found the petition of Maximo Wong for change of name justifiable after due
hearing, thus its factual findings and appreciation of testimonies count heavily and need not be disturbed
unless for strong and cogent reasons because the trial court is in a better position to examine real
evidence as well as to observe the demeanor of the witnesses while testifying in the case (Baliwag Transit,
Inc. vs. CA, 147 SCRA 82). Moreover, the trial court could take judicial notice of other existing factors in
the community where herein respondent lives which it considers material in its judicious determination of
the case. . . .
Additionally, herein respondent is already of age and as such he can decide what is best for him. His
experience with regards (sic) his social and business dealings is personal and it is only him (sic) who can
attest to the same. Finding his predicament's proper remedy is solely through legal process, herein
respondent accordingly filed a petition pursuant to Rule 103 of the Rules of Court which was granted by
the Court a quo. 37
Besides, we have faith in the circumspection of our lower courts and that, in the exercise of their discretion, said courts
shall consider petitions for change of name only on cogent and meritorious grounds as would justify the granting of such
applications. We do not expect our trial courts to cater or give in to the whim or caprice of an applicant, aside from the
fact that there is always the safeguard and corrective interdiction of appellate review.
It is not fair to construe the desired reversion of private respondent to the use of the name of his parents by nature as
cross ingratitude. To go by the Solicitor General's suggestion that private respondent should have his adoption revoked if
he wants to use the surname of his natural father would be to exact too clear a toll for making use of an appropriate and
valid remedy available under the law.
Herein private respondent, before he filed the petition for change of name, asked for his adoptive mother's permission to
do so:
Q Now, in filing this petition for change of surname, you had talked with your adopted
mother?
A Yes, sir.
Q Did you ask permission from her whether she wants you to change the surname?
A Yes, sir. 38
True enough, the above testimony of private respondent was confirmed by his adoptive mother in this manner:
Q How are you related to Maximo Wong?
A My adopted son.
Q He is your adopted son, did your son talk to you when he filed this petition for change
of his surname?
A Yes, he even tried to ask me and I said, alright if you want to change.

xxx xxx xxx
Q Now, when you agreed to the filing of this petition for change of name, did you reduce
your consent in writing?
A Yes, sir, I agreed also so that his business will prosper because
he is already Alcila and not Wong because Wong they said is Chinese. 39
As proof of her assent to the filing of said petition (her husband having already passed away), Concepcion Ty Vda. de
Wong executed an affidavit in Cotabato City on May 27, 1985, with these textual declarations:
That I am the same and identical person, who is the surviving adapted ( sic) parent of Maximo Wong.
That I personally discovered it myself from the time my adapted ( sic) son Maximo used the surname of my
late husband Wong, his relatives and childhood friends shy away from him because he is branded as a son
of a chinese which is different from them whose parents are muslim Filipinos;
That I pity my son who is often rediculed (sic) by his friends and relatives because of his family name
Wong, hence, in order not to humper (sic) his social and business life in the future, I am voluntarily and of
my own free will without being forced, coerced, or intimidated give ( sic) my consent to his desire to
change his desire to change his surname without affecting however the legal adoption granted by the
Court on September 9, 1967, making him as one of my legal and compulsory heir ( sic).
That I am executing this affidavit to attest to the truth of all the above mentioned facts and for all legal
intent (sic) and purposes. 40
There could be no other plausible reason for private respondent to first secure has adoptive mother's consent before
resorting to the questioned legal recourse other than the parental respect and reverence which is owed by and to be
expected of a dutiful child. If private respondent was such an ingrate, as the Solicitor General would have us believe, he
would not have bothered to seek his adoptive mother's counsel. In the same breath, had his adoptive mother regarded
him as an ungrateful adoptee, she would not have executed the affidavit above quoted, much less testify in his behalf at
the hearing of his petition.
Moreover, worthy of note is the fact that private respondent's adoptive mother emphasized that she executed the above
affidavit "without affecting the legal adoption granted by the Court on September 9, 1967, making him as one of my legal
and compulsory heir(s)." This is incontrovertible proof that she never entertained any misgivings or reservations with
respect to her consent to his petition. This likewise dispels any possible confusion as to private respondent's legal status or
adoptive paternity and his successional rights. Concordantly, we have heretofore held that a change of name does not
define or effect a change in one's existing family relations or in the rights and duties flowing therefrom. It does not alter
one's legal capacity, civil status or citizenship; what is altered is only the name. 41
WHEREFORE, the petition is DENIED and the decision of respondent Court of Appeals is hereby AFFIRMED in toto.
SO ORDERED.
3. [G.R. No. 148311. March 31, 2005] IN THE MATTER OF THE ADOPTION OF STEPHANIE NATHY ASTORGA
GARCIA HONORATO B. CATINDIG, petitioner.
May an illegitimate child, upon adoption by her natural father, use the surname of her natural mother as her
middle name? This is the issue raised in the instant case.
The facts are undisputed.
On August 31, 2000, Honorato B. Catindig, herein petitioner, filed a petition[1] to adopt his minor illegitimate
child Stephanie Nathy Astorga Garcia. He alleged therein, among others, that Stephanie was born on June 26,
1994;[2] that her mother is Gemma Astorga Garcia; that Stephanie has been using her mothers middle name and
surname; and that he is now a widower and qualified to be her adopting parent. He prayed that Stephanies middle name
Astorga be changed to Garcia, her mothers surname, and that her surname Garcia be changed to Catindig, his surname.
On March 23, 2001,[3] the trial court rendered the assailed Decision granting the adoption, thus:
After a careful consideration of the evidence presented by the petitioner, and in the absence of any opposition to the
petition, this Court finds that the petitioner possesses all the qualifications and none of the disqualification provided for by
law as an adoptive parent, and that as such he is qualified to maintain, care for and educate the child to be adopted; that
the grant of this petition would redound to the best interest and welfare of the minor Stephanie Nathy Astorga Garcia. The
Court further holds that the petitioners care and custody of the child since her birth up to the present constitute more
than enough compliance with the requirement of Article 35 of Presidential Decree No. 603.

WHEREFORE, finding the petition to be meritorious, the same is GRANTED. Henceforth, Stephanie Nathy Astorga Garcia
is hereby freed from all obligations of obedience and maintenance with respect to her natural mother, and for civil
purposes, shall henceforth be the petitioners legitimate child and legal heir. Pursuant to Article 189 of the Family Code of
the Philippines, the minor shall be known as STEPHANIE NATHY CATINDIG.
Upon finality of this Decision, let the same be entered in the Local Civil Registrar concerned pursuant to Rule 99 of the
Rules of Court.
Let copy of this Decision be furnished the National Statistics Office for record purposes.
SO ORDERED.[4]
On April 20, 2001, petitioner filed a motion for clarification and/or reconsideration[5] praying that Stephanie should be
allowed to use the surname of her natural mother (GARCIA) as her middle name.
On May 28, 2001,[6] the trial court denied petitioners motion for reconsideration holding that there is no law or
jurisprudence allowing an adopted child to use the surname of his biological mother as his middle name.
Hence, the present petition raising the issue of whether an illegitimate child may use the surname of her mother as
her middle name when she is subsequently adopted by her natural father.
Petitioner submits that the trial court erred in depriving Stephanie of a middle name as a consequence of adoption
because: (1) there is no law prohibiting an adopted child from having a middle name in case there is only one adopting
parent; (2) it is customary for every Filipino to have as middle name the surname of the mother; (3) the middle name or
initial is a part of the name of a person; (4) adoption is for the benefit and best interest of the adopted child, hence, her
right to bear a proper name should not be violated; (5) permitting Stephanie to use the middle name Garcia (her mothers
surname) avoids the stigma of her illegitimacy; and; (6) her continued use of Garcia as her middle name is not opposed by
either the Catindig or Garcia families.
The Republic, through the Office of the Solicitor General (OSG), agrees with petitioner that Stephanie should be
permitted to use, as her middle name, the surname of her natural mother for the following reasons:
First, it is necessary to preserve and maintain Stephanies filiation with her natural mother because under Article 189
of the Family Code, she remains to be an intestate heir of the latter. Thus, to prevent any confusion and needless hardship
in the future, her relationship or proof of that relationship with her natural mother should be maintained.
Second, there is no law expressly prohibiting Stephanie to use the surname of her natural mother as her middle
name. What the law does not prohibit, it allows.
Last, it is customary for every Filipino to have a middle name, which is ordinarily the surname of the mother. This
custom has been recognized by the Civil Code and Family Code. In fact, the Family Law Committees agreed that the initial
or surname of the mother should immediately precede the surname of the father so that the second name, if any, will be
before the surname of the mother.[7]
We find merit in the petition.
Use Of Surname Is Fixed By Law
For all practical and legal purposes, a man's name is the designation by which he is known and called in the
community in which he lives and is best known. It is defined as the word or combination of words by which a person is
distinguished from other individuals and, also, as the label or appellation which he bears for the convenience of the world
at large addressing him, or in speaking of or dealing with him. [8] It is both of personal as well as public interest that every
person must have a name.
The name of an individual has two parts: (1) the given or proper name and (2) the surname or family name. The
given or proper name is that which is given to the individual at birth or at baptism, to distinguish him from other
individuals. The surname or family name is that which identifies the family to which he belongs and is continued from
parent to child. The given name may be freely selected by the parents for the child, but the surname to which the child is
entitled is fixed by law.[9]
Thus, Articles 364 to 380 of the Civil Code provides the substantive rules which regulate the use of surname [10] of an
individual whatever may be his status in life, i.e., whether he may be legitimate or illegitimate, an adopted child, a married
woman or a previously married woman, or a widow, thus:
Art. 364. Legitimate and legitimated children shall principally use the surname of the father.
Art. 365. An adopted child shall bear the surname of the adopter.
xxx
Art. 369. Children conceived before the decree annulling a voidable marriage shall principally use the surname of the
father.

Art. 370. A married woman may use:
(1) Her maiden first name and surname and add her husband's surname, or
(2) Her maiden first name and her husband's surname or
(3) Her husband's full name, but prefixing a word indicating that she is his wife, such as Mrs.
Art. 371. In case of annulment of marriage, and the wife is the guilty party, she shall resume her maiden name
and surname. If she is the innocent spouse, she may resume her maiden name and surname. However, she may choose to
continue employing her former husband's surname, unless:
(1) The court decrees otherwise, or
(2) She or the former husband is married again to another person.
Art. 372. When legal separation has been granted, the wife shall continue using her name and surname employed before
the legal separation.
Art. 373. A widow may use the deceased husband's surname as though he were still living, in accordance with Article 370.
Art. 374. In case of identity of names and surnames, the younger person shall be obliged to use such additional name or
surname as will avoid confusion.
Art. 375. In case of identity of names and surnames between ascendants and descendants, the word Junior can be used
only by a son. Grandsons and other direct male descendants shall either:
(1) Add a middle name or the mother's surname,
(2) Add the Roman numerals II, III, and so on.
xxx
Law Is Silent As To The Use Of

Middle Name
As correctly submitted by both parties, there is no law regulating the use of a middle name. Even Article 176 [11] of the
Family Code, as amended by Republic Act No. 9255, otherwise known as An Act Allowing Illegitimate Children To Use The
Surname Of Their Father, is silent as to what middle name a child may use.
The middle name or the mothers surname is only considered in Article 375(1), quoted above, in case there is identity
of names and surnames between ascendants and descendants, in which case, the middle name or the mothers surname
shall be added.
Notably, the law is likewise silent as to what middle name an adoptee may use. Article 365 of the Civil Code
merely provides that an adopted child shall bear the surname of the adopter . Also, Article 189 of the Family Code,
enumerating the legal effects of adoption, is likewise silent on the matter, thus:
"(1) For civil purposes, the adopted shall be deemed to be a legitimate child of the adopters and both shall acquire the
reciprocal rights and obligations arising from the relationship of parent and child, including the right of the adopted to
use the surname of the adopters;
xxx
However, as correctly pointed out by the OSG, the members of the Civil Code and Family Law Committees that
drafted the Family Code recognized the Filipino custom of adding the surname of the childs mother as his middle
name. In the Minutes of the Joint Meeting of the Civil Code and Family Law Committees, the members approved the
suggestion that the initial or surname of the mother should immediately precede the surname of the father, thus
Justice Caguioa commented that there is a difference between the use by the wife of the surname and that of the child
because the fathers surname indicates the family to which he belongs, for which reason he would insist on the use
of the fathers surname by the child but that, if he wants to, the child may also use the surname of the mother.
Justice Puno posed the question: If the child chooses to use the surname of the mother, how will his name be written?
Justice Caguioa replied that it is up to him but that his point is that it should be mandatory that the child uses the
surname of the father and permissive in the case of the surname of the mother.
Prof. Baviera remarked that Justice Caguioas point is covered by the present Article 364, which reads:
Legitimate and legitimated children shall principally use the surname of the father.
Justice Puno pointed out that many names change through no choice of the person himself precisely because of this
misunderstanding. He then cited the following example: Alfonso Ponce Enriles correct surname is Ponce since the mothers
surname is Enrile but everybody calls him Atty. Enrile. Justice Jose Gutierrez Davids family name is Gutierrez and his
mothers surname is David but they all call him Justice David.
Justice Caguioa suggested that the proposed Article (12) be modified to the effect that it shall be mandatory on
the child to use the surname of the father but he may use the surname of the mother by way of an initial or a
middle name. Prof. Balane stated that they take note of this for inclusion in the Chapter on Use of Surnames since in the
proposed Article (10) they are just enumerating the rights of legitimate children so that the details can be covered in the
appropriate chapter.
xxx
Justice Puno remarked that there is logic in the simplification suggested by Justice Caguioa that the surname of the father
should always be last because there are so many traditions like the American tradition where they like to use their second
given name and the Latin tradition, which is also followed by the Chinese wherein they even include the Clan name.
xxx
Justice Puno suggested that they agree in principle that in the Chapter on the Use of Surnames, they should say
that initial or surname of the mother should immediately precede the surname of the father so that the second
name, if any, will be before the surname of the mother. Prof. Balane added that this is really the Filipino way. The
Committee approved the suggestion.[12](Emphasis supplied)
In the case of an adopted child, the law provides that the adopted shall bear the surname of the adopters. [13] Again, it
is silent whether he can use a middle name. What it only expressly allows, as a matter of right and obligation, is for the
adoptee to bear the surname of the adopter, upon issuance of the decree of adoption. [14]
The Underlying Intent of

Adoption Is In Favor of the
Adopted Child
Adoption is defined as the process of making a child, whether related or not to the adopter, possess in general, the
rights accorded to a legitimate child.[15] It is a juridical act, a proceeding in rem which creates between two persons a
relationship similar to that which results from legitimate paternity and filiation. [16] The modern trend is to consider
adoption not merely as an act to establish a relationship of paternity and filiation , but also as an act which endows the
child with a legitimate status.[17]This was, indeed, confirmed in 1989, when the Philippines, as a State Party to the
Convention of the Rights of the Child initiated by the United Nations, accepted the principle that adoption is
impressed with social and moral responsibility, and that its underlying intent is geared to favor the adopted
child.[18] Republic Act No. 8552, otherwise known as the Domestic Adoption Act of 1998,[19] secures these rights and
privileges for the adopted.[20]
One of the effects of adoption is that the adopted is deemed to be a legitimate child of the adopter for all intents
and purposes pursuant to Article 189[21] of the Family Code and Section 17[22] Article V of RA 8552.[23]
Being a legitimate child by virtue of her adoption, it follows that Stephanie is entitled to all the rights
provided by law to a legitimate child without discrimination of any kind, including the right to bear the surname
of her father and her mother, as discussed above. This is consistent with the intention of the members of the Civil Code
and Family Law Committees as earlier discussed. In fact, it is a Filipino custom that the initial or surname of the mother
should immediately precede the surname of the father.
Additionally, as aptly stated by both parties, Stephanies continued use of her mothers surname (Garcia) as her middle
name will maintain her maternal lineage. It is to be noted that Article 189(3) of the Family Code and Section 18 [24], Article V
of RA 8552 (law on adoption) provide that the adoptee remains an intestate heir of his/her biological parent. Hence,
Stephanie can well assert or claim her hereditary rights from her natural mother in the future.
Moreover, records show that Stephanie and her mother are living together in the house built by petitioner for them
at 390 Tumana, San Jose, Baliuag, Bulacan. Petitioner provides for all their needs. Stephanie is closely attached to both her
mother and father. She calls them Mama and Papa. Indeed, they are one normal happy family. Hence, to allow Stephanie
to use her mothers surname as her middle name will not only sustain her continued loving relationship with her mother
but will also eliminate the stigma of her illegitimacy.
Liberal Construction of
Adoption Statutes In Favor Of
Adoption
It is a settled rule that adoption statutes, being humane and salutary, should be liberally construed to carry out the
beneficent purposes of adoption.[25] The interests and welfare of the adopted child are of primary and paramount
consideration,[26] hence, every reasonable intendment should be sustained to promote and fulfill these noble and
compassionate objectives of the law.[27]
Lastly, Art. 10 of the New Civil Code provides that:

In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and
justice to prevail.
This provision, according to the Code Commission, is necessary so that it may tip the scales in favor of right and
justice when the law is doubtful or obscure. It will strengthen the determination of the courts to avoid an injustice which
may apparently be authorized by some way of interpreting the law. [28]
Hence, since there is no law prohibiting an illegitimate child adopted by her natural father, like Stephanie, to use, as
middle name her mothers surname, we find no reason why she should not be allowed to do so.
WHEREFORE, the petition is GRANTED. The assailed Decision is partly MODIFIED in the sense that Stephanie should
be allowed to use her mothers surname GARCIA as her middle name.
Let the corresponding entry of her correct and complete name be entered in the decree of adoption.
SO ORDERED.
4. [G.R. No. 143989. July 14, 2003] ISABELITA S. LAHOM, petitioner, vs. JOSE MELVIN SIBULO (previously referred
to as DR. MELVIN S. LAHOM), respondent.
DECISION
VITUG, J.:
The bliss of marriage and family would be to most less than complete without children. The realization could have
likely prodded the spouses Dr. Diosdado Lahom and Isabelita Lahom to take into their care Isabelitas nephew Jose Melvin
Sibulo and to bring him up as their own. At the tender age of two, Jose Melvin enjoyed the warmth, love and support of
the couple who treated the child like their own. Indeed, for years, Dr. and Mrs. Lahom fancied on legally adopting Jose
Melvin. Finally, in 1971, the couple decided to file a petition for adoption. On 05 May 1972, an order granting the petition
was issued that made all the more intense than before the feeling of affection of the spouses for Melvin. In keeping with
the court order, the Civil Registrar of Naga City changed the name Jose Melvin Sibulo to Jose Melvin Lahom.
A sad turn of events came many years later. Eventually, in December of 1999, Mrs. Lahom commenced a petition to
rescind the decree of adoption before the Regional Trial Court (RTC), Branch 22, of Naga City. In her petition, she averred -
7. That x x x despite the proddings and pleadings of said spouses, respondent refused to change his surname from Sibulo
to Lahom, to the frustrations of petitioner particularly her husband until the latter died, and even before his death he had
made known his desire to revoke respondents adoption, but was prevented by petitioners supplication, however with his
further request upon petitioner to give to charity whatever properties or interest may pertain to respondent in the future.
xxxxxxxxx
10. That respondent continued using his surname Sibulo to the utter disregard of the feelings of herein petitioner, and his
records with the Professional Regulation Commission showed his name as Jose Melvin M. Sibulo originally issued in 1978
until the present, and in all his dealings and activities in connection with his practice of his profession, he is Jose Melvin M.
Sibulo.
xxxxxxxxx
13. That herein petitioner being a widow, and living alone in this city with only her household helps to attend to her, has
yearned for the care and show of concern from a son, but respondent remained indifferent and would only come to Naga
to see her once a year.
14. That for the last three or four years, the medical check-up of petitioner in Manila became more frequent in view of a
leg ailment, and those were the times when petitioner would need most the care and support from a love one, but
respondent all the more remained callous and utterly indifferent towards petitioner which is not expected of a son.
15. That herein respondent has recently been jealous of petitioners nephews and nieces whenever they would find time to
visit her, respondent alleging that they were only motivated by their desire for some material benefits from petitioner.
16. That in view of respondents insensible attitude resulting in a strained and uncomfortable relationship between him and
petitioner, the latter has suffered wounded feelings, knowing that after all respondents only motive to his adoption is his
expectancy of his alleged rights over the properties of herein petitioner and her late husband, clearly shown by his recent
filing of Civil Case No. 99-4463 for partition against petitioner, thereby totally eroding her love and affection towards
respondent, rendering the decree of adoption, considering respondent to be the child of petitioner, for all legal purposes,
has been negated for which reason there is no more basis for its existence, hence this petition for revocation. [1]
Prior to the institution of the case, specifically on 22 March 1998, Republic Act (R.A.) No. 8552, also known as the
Domestic Adoption Act, went into effect. The new statute deleted from the law the right of adopters to rescind a decree of
adoption.
Section 19 of Article VI of R.A. No. 8552 now reads:
SEC. 19. Grounds for Rescission of Adoption. Upon petition of the adoptee, with the assistance of the Department if a
minor or if over eighteen (18) years of age but is incapacitated, as guardian/counsel, the adoption may be rescinded on
any of the following grounds committed by the adopter(s): (a) repeated physical and verbal maltreatment by the
adopter(s) despite having undergone counseling; (b) attempt on the life of the adoptee; (c) sexual assault or violence; or
(d) abandonment and failure to comply with parental obligations.
Adoption, being in the best interest of the child, shall not be subject to rescission by the adopter(s). However, the
adopter(s) may disinherit the adoptee for causes provided in Article 919 of the Civil Code. (emphasis supplied)
Jose Melvin moved for the dismissal of the petition, contending principally (a) that the trial court had no jurisdiction
over the case and (b) that the petitioner had no cause of action in view of the aforequoted provisions of R.A. No.
8552. Petitioner asseverated, by way of opposition, that the proscription in R.A. No. 8552 should not retroactively
apply, i.e., to cases where the ground for rescission of the adoption vested under the regime of then Article 348[2] of the
Civil Code and Article 192[3] of the Family Code.
In an order, dated 28 April 2000, the trial court held thusly:
On the issue of jurisdiction over the subject matter of the suit, Section 5(c) of R.A. No. 8369 confers jurisdiction to this
Court, having been designated Family Court in A.M. No. 99-11-07 SC.
On the matter of no cause of action, the test on the sufficiency of the facts alleged in the complaint, is whether or not,
admitting the facts alleged, the Court could render a valid judgment in accordance with the prayer of said complaint (De
Jesus, et al. vs. Belarmino, et al., 95 Phil. 365).
Admittedly, Section 19, Article VI of R.A. No. 8552 deleted the right of an adopter to rescind an adoption earlier granted
under the Family Code. Conformably, on the face of the petition, indeed there is lack of cause of action.
Petitioner however, insists that her right to rescind long acquired under the provisions of the Family Code should be
respected. Assuming for the sake of argument, that petitioner is entitled to rescind the adoption of respondent granted on
May 5, 1972, said right should have been exercised within the period allowed by the Rules. From the averments in the
petition, it appears clear that the legal grounds for the petition have been discovered and known to petitioner for more
than five (5) years, prior to the filing of the instant petition on December 1, 1999, hence, the action if any, had already
prescribed. (Sec. 5, Rule 100 Revised Rules of Court)
WHEREFORE, in view of the foregoing consideration, the petition is ordered dismissed.[4]
Via a petition for review on certiorari under Rule 45 of the 1997 Rules of Court, petitioner raises the following
questions; viz:
1. May the subject adoption, decreed on 05 May 1972, still be revoked or rescinded by an adopter after the
effectivity of R.A. No. 8552?
2. In the affirmative, has the adopters action prescribed?
A brief background on the law and its origins could provide some insights on the subject. In ancient times, the
Romans undertook adoption to assure male heirs in the family.[5] The continuity of the adopters family was the primary
purpose of adoption and all matters relating to it basically focused on the rights of the adopter. There was hardly any
mention about the rights of the adopted.[6] Countries, like Greece, France, Spain and England, in an effort to preserve
inheritance within the family, neither allowed nor recognized adoption. [7] It was only much later when adoption was given
an impetus in law and still later when the welfare of the child became a paramount concern. [8] Spain itself which previously
disfavored adoption ultimately relented and accepted the Roman law concept of adoption which, subsequently, was to
find its way to the archipelago. The Americans came and introduced their own ideas on adoption which, unlike most
countries in Europe, made the interests of the child an overriding consideration.[9] In the early part of the century just
passed, the rights of children invited universal attention; the Geneva Declaration of Rights of the Child of 1924 and the
Universal Declaration of Human Rights of 1948,[10] followed by the United Nations Declarations of the Rights of the
Child,[11] were written instruments that would also protect and safeguard the rights of adopted children. The Civil Code of
the Philippines[12] of 1950 on adoption, later modified by the Child and Youth Welfare Code [13] and then by the Family
Code of the Philippines,[14] gave immediate statutory acknowledgment to the rights of the adopted. In 1989, the United
Nations initiated the Convention of the Rights of the Child. The Philippines, a State Party to the Convention, accepted the
principle that adoption was impressed with social and moral responsibility, and that its underlying intent was geared to
favor the adopted child. R.A. No. 8552 secured these rights and privileges for the adopted. Most importantly, it affirmed
the legitimate status of the adopted child, not only in his new family but also in the society as well. The new law withdrew
the right of an adopter to rescind the adoption decree and gave to the adopted child the sole right to sever the legal ties
created by adoption.
Petitioner, however, would insist that R.A. No. 8552 should not adversely affect her right to annul the adoption
decree, nor deprive the trial court of its jurisdiction to hear the case, both being vested under the Civil Code and the
Family Code, the laws then in force.
The concept of vested right is a consequence of the constitutional guaranty of due process [15] that expresses
a present fixed interest which in right reason and natural justice is protected against arbitrary state action; [16] it includes
not only legal or equitable title to the enforcement of a demand but also exemptions from new obligations created after

the right has become vested.[17] Rights are considered vested when the right to enjoyment is a present
interest,[18] absolute, unconditional, and perfect[19] or fixed and irrefutable.
In Republic vs. Court of Appeals,[20] a petition to adopt Jason Condat was filed by Zenaida C. Bobiles on 02 February
1988 when the Child and Youth Welfare Code (Presidential Decree No. 603) allowed an adoption to be sought
by either spouse or both of them. After the trial court had rendered its decision and while the case was still pending on
appeal, the Family Code of the Philippines (Executive Order No. 209), mandating joint adoption by the husband and
wife, took effect. Petitioner Republic argued that the case should be dismissed for having been filed by Mrs. Bobiles alone
and without being joined by the husband. The Court concluded that the jurisdiction of the court is determined by the
statute in force at the time of the commencement of the action. The petition to adopt Jason, having been filed
with the court at the time when P.D. No. 603 was still in effect, the right of Mrs. Bobiles to file the petition, without
being joined by her husband, according to the Court had become vested. In Republic vs. Miller,[21] spouses Claude and
Jumrus Miller, both aliens, sought to adopt Michael Madayag. On 29 July 1988, the couple filed a petition to formalize
Michaels adoption having theretofore been taken into their care. At the time the action was commenced, P.D. No. 603
allowed aliens to adopt. After the decree of adoption and while on appeal before the Court of Appeals, the Family Code
was enacted into law on 08 August 1988 disqualifying aliens from adopting Filipino children. The Republic then prayed for
the withdrawal of the adoption decree. In discarding the argument posed by the Republic, the Supreme Court ruled
that the controversy should be resolved in the light of the law governing at the time the petition was filed.
It was months after the effectivity of R.A. No. 8552 that herein petitioner filed an action to revoke the decree of
adoption granted in 1975. By then, the new law,[22] had already abrogated and repealed the right of an adopter under the
Civil Code and the Family Code to rescind a decree of adoption. Consistently with its earlier pronouncements, the Court
should now hold that the action for rescission of the adoption decree, having been initiated by petitioner after R.A. No.
8552 had come into force, no longer could be pursued.
Interestingly, even before the passage of the statute, an action to set aside the adoption is subject to the fiveyear bar
rule under Rule 100[23] of the Rules of Court and that the adopter would lose the right to revoke the adoption decree after
the lapse of that period. The exercise of the right within a prescriptive period is a condition that could not fulfill the
requirements of a vested right entitled to protection. It must also be acknowledged that a person has no vested right in
statutory privileges.[24]While adoption has often been referred to in the context of a right, the privilege to adopt is itself
not naturally innate or fundamental but rather a right merely created by statute.[25] It is a privilege that is governed by the
states determination on what it may deem to be for the best interest and welfare of the child.[26] Matters relating to
adoption, including the withdrawal of the right of an adopter to nullify the adoption decree, are subject to regulation by
the State.[27] Concomitantly, a right of actiongiven by statute may be taken away at anytime before it has been
exercised.[28]
While R.A. No. 8552 has unqualifiedly withdrawn from an adopter a consequential right to rescind the adoption
decree even in cases where the adoption might clearly turn out to be undesirable, it remains, nevertheless, the bounden
duty of the Court to apply the law. Dura lex sed lex would be the hackneyed truism that those caught in the law have to
live with. It is still noteworthy, however, that an adopter, while barred from severing the legal ties of adoption, can always
for valid reasons cause the forfeiture of certain benefits otherwise accruing to an undeserving child. For instance, upon the
grounds recognized by law, an adopter may deny to an adopted child his legitime and, by a will and testament, may freely
exclude him from having a share in the disposable portion of his estate.
WHEREFORE, the assailed judgment of the court a quo is AFFIRMED. No costs.
SO ORDERED.
5. G.R. No. 164948 June 27, 2006 DIWATA RAMOS LANDINGIN Petitioner,
vs. REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
CALLEJO, SR., J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court is the Decision 1 of the Court of Appeals
in CA-G.R. CV No. 77826 which reversed the Decision2 of the Regional Trial Court (RTC) of Tarlac City, Branch 63 in Civil
Case No. 2733 granting the Petition for Adoption of the petitioner herein.
The Antecedents
On February 4, 2002, Diwata Ramos Landingin, a citizen of the United States of America (USA), of Filipino parentage and a
resident of Guam, USA, filed a petition3 for the adoption of minors Elaine Dizon Ramos who was born on August 31,
1986;4 Elma Dizon Ramos, who was born on September 7, 1987; 5 and Eugene Dizon Ramos who was born on August 5,
1989.6 The minors are the natural children of Manuel Ramos, petitioner’s brother, and Amelia Ramos.
Landingin, as petitioner, alleged in her petition that when Manuel died on May 19, 1990, 7 the children were left to their
paternal grandmother, Maria Taruc Ramos; their biological mother, Amelia, went to Italy, re-married there and now has
two children by her second marriage and no longer communicated with her children by Manuel Ramos nor with her in-
laws from the time she left up to the institution of the adoption; the minors are being financially supported by the
petitioner and her children, and relatives abroad; as Maria passed away on November 23, 2000, petitioner desires to adopt
the children; the minors have given their written consent8 to the adoption; she is qualified to adopt as shown by the fact
that she is a 57-year-old widow, has children of her own who are already married, gainfully employed and have their
respective families; she lives alone in her own home in Guam, USA, where she acquired citizenship, and works as a
restaurant server. She came back to the Philippines to spend time with the minors; her children gave their written
consent9 to the adoption of the minors. Petitioner’s brother, Mariano Ramos, who earns substantial income, signified his
willingness and commitment to support the minors while in petitioner’s custody.
Petitioner prayed that, after due hearing, judgment be rendered in her favor, as follows:
WHEREFORE, it is most respectfully prayed to this Honorable Court that after publication and hearing, judgment be
rendered allowing the adoption of the minor children Elaine Dizon Ramos, Elma Dizon Ramos, and Eugene Dizon Ramos
by the petitioner, and ordering that the minor children’s name follow the family name of petitioner.
Petitioner prays for such other reliefs, just and equitable under the premises. 10
On March 5, 2002, the court ordered the Department of Social Welfare and Development (DSWD) to conduct a case study
as mandated by Article 34 of Presidential Decree No. 603, as amended, and to submit a report thereon not later than April
4, 2002, the date set for the initial hearing of the petition.11 The Office of the Solicitor General (OSG) entered its
appearance12 but deputized the City Prosecutor of Tarlac to appear in its behalf. 13 Since her petition was unopposed,
petitioner was allowed to present her evidence ex parte.14
The petitioner testified in her behalf. She also presented Elaine Ramos, the eldest of the adoptees, to testify on the written
consent executed by her and her siblings.15 The petitioner marked in evidence the Affidavit of Consent purportedly
executed by her children Ann, Errol, Dennis and Ricfel Branitley, all surnamed Landingin, and notarized by a notary public
in Guam, USA, as proof of said consent. 16
On May 24, 2002, Elizabeth Pagbilao, Social Welfare Officer II of the DSWD, Field Office III, Tarlac, submitted a Child Study
Report, with the following recommendation:
In view of the foregoing, undersigned finds minors Elaine, Elma & Eugene all surnamed Ramos, eligible for adoption
because of the following reasons:
1. Minors’ surviving parent, the mother has voluntarily consented to their adoption by the paternal aunt, Diwata
Landingin this is in view of her inability to provide the parental care, guidance and support they need. An Affidavit
of Consent was executed by the mother which is hereto attached.
2. The three minors subject for adoption have also expressed their willingness to be adopted and joins the
petitioners in Guam, USA in the future. A joint Affidavit of consent is hereto attached. The minors developed close
attachment to the petitioners and they regarded her as second parent.
3. The minors are present under the care of a temporary guardian who has also family to look after. As young
adolescents they really need parental love, care, guidance and support to ensure their protection and well being.
In view of the foregoing, it is hereby respectfully recommended that minors Elaine D. Ramos, Elma D. Ramos and Eugene
D. Ramos be adopted by their maternal aunt Diwata Landingin. Trial custody is hereby further recommended to be
dispensed with considering that they are close relatives and that close attachments was already developed between the
petitioner and the 3 minors.17
Pagbilao narrated what transpired during her interview, as follows:
The mother of minors came home together with her son John Mario, this May 2002 for 3 weeks vacation. This is to enable
her appear for the personal interview concerning the adoption of her children.
The plan for the adoption of minors by their paternal aunt Diwata Landingin was conceived after the death of their
paternal grandmother and guardian. The paternal relatives including the petitioner who attended the wake of their mother
were very much concerned about the well-being of the three minors. While preparing for their adoption, they have asked
a cousin who has a family to stay with minors and act as their temporary guardian.
The mother of minors was consulted about the adoption plan and after weighing the benefits of adoption to her children,
she voluntarily consented. She realized that her children need parental love, guidance and support which she could not
provide as she already has a second family & residing in Italy. Knowing also that the petitioners & her children have been
supporting her children up to the present and truly care for them, she believes her children will be in good hands. She also
finds petitioners in a better position to provide a secured and bright future to her children. 18
However, petitioner failed to present Pagbilao as witness and offer in evidence the voluntary consent of Amelia Ramos to
the adoption; petitioner, likewise, failed to present any documentary evidence to prove that Amelia assents to the
adoption.

On November 23, 2002, the court, finding merit in the petition for adoption, rendered a decision granting said petition.
The dispositive portion reads:
WHEREFORE, it is hereby ordered that henceforth, minors Elaine Dizon Ramos, Elma Dizon Ramos, Eugene Dizon Ramos
be freed from all legal obligations obedience and maintenance from their natural parents and that they be declared for all
legal intents and purposes the children of Diwata Ramos Landingin. Trial custody is dispensed with considering that
parent-children relationship has long been established between the children and the adoptive parents. Let the surnames
of the children be changed from "Dizon-Ramos" to "Ramos-Landingin."
Let a copy of this decision be furnished the Local Civil Registrar of Tarlac, Tarlac for him to effect the corresponding
changes/amendment in the birth certificates of the above-mentioned minors.
SO ORDERED.19
The OSG appealed20 the decision to the Court of Appeals on December 2, 2002. In its brief 21 for the oppositor-appellant,
the OSG raised the following arguments:
THE TRIAL COURT ERRED IN GRANTING THE PETITION FOR ADOPTION DESPITE THE LACK OF CONSENT OF THE
PROPOSED ADOPTEES’ BIOLOGICAL MOTHER.
II
THE TRIAL COURT ERRED IN GRANTING THE PETITION FOR ADOPTION DESPITE THE LACK OF THE WRITTEN CONSENT OF
THE PETITIONER’S CHILDREN AS REQUIRED BY LAW.
III
THE TRIAL COURT ERRED IN GRANTING THE PETITION FOR ADOPTION DESPITE PETITIONER’S FAILURE TO ESTABLISH
THAT SHE IS IN A POSITION TO SUPPORT THE PROPOSED ADOPTEES.
On April 29, 2004, the CA rendered a decision22 reversing the ruling of the RTC. It held that petitioner failed to adduce in
evidence the voluntary consent of Amelia Ramos, the children’s natural mother. Moreover, the affidavit of consent of the
petitioner’s children could not also be admitted in evidence as the same was executed in Guam, USA and was not
authenticated or acknowledged before a Philippine consular office, and although petitioner has a job, she was not stable
enough to support the children. The dispositive portion of the CA decision reads:
WHEREFORE, premises considered, the appealed decision dated November 25, 2002 of the Regional Trial Court, Branch
63, Tarlac City in Spec. Proc. No. 2733 is hereby REVERSED and SET ASIDE.
SO ORDERED.23
Petitioner filed a Motion for Reconsideration24 on May 21, 2004, which the CA denied in its Resolution dated August 12,
2004.25
Petitioner, thus, filed the instant petition for review on certiorari 26 on September 7, 2004, assigning the following errors:
1. THAT THE HONORABLE LOWER COURT HAS OVERLOOKED AND MISAPPLIED SOME FACTS AND
CIRCUMSTANCES WHICH ARE OF WEIGHT AND IMPORTANCE AND WHICH IF CONSIDERED WOULD HAVE
AFFECTED THE RESULT OF THE CASE.
2. THAT THE HONORABLE LOWER COURT ERRED IN CONCLUDING THAT THE PETITIONER-APPELLEE IS NOT
FINANCIALLY CAPABLE TO SUPPORT THE THREE CHILDREN.27
The issues raised by the parties in their pleadings are the following: (a) whether the petitioner is entitled to adopt the
minors without the written consent of their biological mother, Amelia Ramos; (b) whether or not the affidavit of consent
purportedly executed by the petitioner-adopter’s children sufficiently complies with the law; and (c) whether or not
petitioner is financially capable of supporting the adoptees.
The Court’s Ruling
The petition is denied for lack of merit.
It has been the policy of the Court to adhere to the liberal concept, as stated in Malkinson v. Agrava, 28 that adoption
statutes, being humane and salutary, hold the interest and welfare of the child to be of paramount consideration and are
designed to provide homes, parental care and education for unfortunate, needy or orphaned children and give them the
protection of society and family in the person of the adopter as well as to allow childless couples or persons to experience
the joys of parenthood and give them legally a child in the person of the adopted for the manifestation of their natural
parental instincts. Every reasonable intendment should thus be sustained to promote and fulfill these noble and
compassionate objectives of the law.29
However, in Cang v. Court of Appeals,30 the Court also ruled that the liberality with which this Court treats matters leading
to adoption insofar as it carries out the beneficent purposes of the law to ensure the rights and privileges of the adopted
child arising therefrom, ever mindful that the paramount consideration is the overall benefit and interest of the adopted
child, should be understood in its proper context and perspective. The Court’s position should not be misconstrued or
misinterpreted as to extend to inferences beyond the contemplation of law and jurisprudence. Thus, the discretion to
approve adoption proceedings is not to be anchored solely on best interests of the child but likewise, with due regard to
the natural rights of the parents over the child. 31
Section 9 of Republic Act No. 8552, otherwise known as the Domestic Adoption Act of 1998, provides:
Sec. 9. Whose Consent is Necessary to the Adoption. - After being properly counseled and informed of his/her right to
give or withhold his/her approval of the adoption, the written consent of the following to the adoption is hereby required:
(a) The adoptee, if ten (10) years of age or over;
(b) The biological parent(s) of the child, if known, or the legal guardian, or the proper government instrumentality
which has legal custody of the child;
(c) The legitimate and adopted sons/daughters, ten (10) years of age or over, of the adopter(s) and adoptee, if
any;
(d) The illegitimate sons/daughters, ten (10) years of age or over, of the adopter, if living with said adopter and the
latter’s souse, if any;
(e) The spouse, if any, of the person adopting or to be adopted.
The general requirement of consent and notice to the natural parents is intended to protect the natural parental
relationship from unwarranted interference by interlopers, and to insure the opportunity to safeguard the best interests of
the child in the manner of the proposed adoption.32
Clearly, the written consent of the biological parents is indispensable for the validity of a decree of adoption. Indeed, the
natural right of a parent to his child requires that his consent must be obtained before his parental rights and duties may
be terminated and re-established in adoptive parents. In this case, petitioner failed to submit the written consent of
Amelia Ramos to the adoption.
We note that in her Report, Pagbilao declared that she was able to interview Amelia Ramos who arrived in the Philippines
with her son, John Mario in May 2002. If said Amelia Ramos was in the Philippines and Pagbilao was able to interview her,
it is incredible that the latter would not require Amelia Ramos to execute a Written Consent to the adoption of her minor
children. Neither did the petitioner bother to present Amelia Ramos as witness in support of the petition.
Petitioner, nonetheless, argues that the written consent of the biological mother is no longer necessary because when
Amelia’s husband died in 1990, she left for Italy and never came back. The children were then left to the guidance and care
of their paternal grandmother. It is the paternal relatives, including petitioner, who provided for the children’s financial
needs. Hence, Amelia, the biological mother, had effectively abandoned the children. Petitioner further contends that it
was by twist of fate that after 12 years, when the petition for adoption was pending with the RTC that Amelia and her child
by her second marriage were on vacation in the Philippines. Pagbilao, the DSWD social worker, was able to meet her, and
during the meeting, Amelia intimated to the social worker that she conformed to the adoption of her three children by the
petitioner.
Petitioner’s contention must be rejected. When she filed her petition with the trial court, Rep. Act No. 8552 was already in
effect. Section 9 thereof provides that if the written consent of the biological parents cannot be obtained, the written
consent of the legal guardian of the minors will suffice. If, as claimed by petitioner, that the biological mother of the
minors had indeed abandoned them, she should, thus have adduced the written consent of their legal guardian.
Ordinarily, abandonment by a parent to justify the adoption of his child without his consent, is a conduct which evinces a
settled purpose to forego all parental duties.33 The term means neglect and refusal to perform the filial and legal
obligations of love and support. If a parent withholds presence, love, care, the opportunity to display filial affection, and
neglects to lend support and maintenance, the parent, in effect, abandons the child. 34
Merely permitting the child to remain for a time undisturbed in the care of others is not such an abandonment. 35 To
dispense with the requirement of consent, the abandonment must be shown to have existed at the time of adoption. 36

In this case, petitioner relied solely on her testimony and that of Elaine Ramos to prove her claim that Amelia Ramos had
abandoned her children. Petitioner’s testimony on that matter follows:
Q Where is the mother of these three children now?

A She left for Italy on November 20, 1990, sir.
Q At the time when Amelia Ramos left for Italy, was there an instance where she communicated with the family?
A None, sir.
Q How about with her children?
A None, sir.
Q Do you know what place in Italy did she reside?
A I do not know, sir.
Q Did you receive any news about Amelia Ramos?
A What I know, sir, was that she was already married with another man.
Q From whom did you learn that?
A From others who came from Italy, sir.
Q Did you come to know whether she has children by her second marriage?
A Yes, sir, she got two kids.37
Elaine, the eldest of the minors, testified, thus:
Q Where is your mother now?
A In Italy, sir.
Q When did your mother left for Italy?
A After my father died, sir.
Q How old were you when your mother left for Italy in 1990?
A Two years old, sir.
Q At the time when your mother left for Italy, did your mother communicate with you?
A No, sir.38
However, the Home Study Report of the DSWD Social Worker also stated the following:
IV. Background of the Case:
xxxx
Since the mother left for Italy, minors siblings had been under the care and custody of their maternal grandmother.
However, she died in Nov. 2001 and an uncle, cousin of their deceased father now serves as their guardian. The petitioner,
together with her children and other relatives abroad have been supporting the minor children financially, even during the
time that they were still living with their natural parents. Their mother also sends financial support but very minimal. 39
xxxx
V. Background Information about the Minors Being Sought for Adoption:
xxxx
As the eldest she tries her best to be a role model to her younger siblings. She helps them in their lessons, works and has
fun with them. She also encourages openness on their problems and concerns and provides petty counseling. In serious
problems she already consult (sic) her mother and petitioner-aunt.40
xxxx
In their 5 years of married life, they begot 3 children, herein minors, Amelia recalled that they had a happy and
comfortable life. After the death of her husband, her in-laws which include the petitioner had continued providing support
for them. However being ashamed of just depending on the support of her husband’s relatives, she decided to work
abroad. Her parents are also in need of financial help as they are undergoing maintenance medication. Her parents
mortgaged their farm land which she used in going to Italy and worked as domestic helper.
When she left for Italy in November 1990, she entrusted her 3 children to the care & custody of her mother-in-law who
returned home for good, however she died on November 2000.
While working in Italy, she met Jun Tayag, a married man from Tarlac. They became live-in partners since 1995 and have a
son John Mario who is now 2 years old. The three of them are considered Italian residents. Amelia claimed that Mr. Tayag
is planning to file an annulment of his marriage and his wife is amenable to it. He is providing his legitimate family regular
support.
Amelia also sends financial support ranging from P10,000-P15,000 a month through her parents who share minimal
amount of P3,000-P5,000 a month to his (sic) children. The petitioner and other paternal relatives are continuously
providing support for most of the needs & education of minors up to present. 41

Thus, when Amelia left for Italy, she had not intended to abandon her children, or to permanently sever their mother-child
relationship. She was merely impelled to leave the country by financial constraints. Yet, even while abroad, she did not
surrender or relinquish entirely her motherly obligations of rearing the children to her now deceased mother-in-law, for, as
claimed by Elaine herself, she consulted her mother, Amelia, for serious personal problems. Likewise, Amelia continues to
send financial support to the children, though in minimal amounts as compared to what her affluent in-laws provide.
Let it be emphasized, nevertheless, that the adoption of the minors herein will have the effect of severing all legal ties
between the biological mother, Amelia, and the adoptees, and that the same shall then be vested on the adopter. 42 It
would thus be against the spirit of the law if financial consideration were to be the paramount consideration in deciding
whether to deprive a person of parental authority over his/her children. More proof has to be adduced that Amelia has
emotionally abandoned the children, and that the latter will not miss her guidance and counsel if they are given to an
adopting parent.43 Again, it is the best interest of the child that takes precedence in adoption.
Section 34, Rule 132 of the Rules of Court provides that the Court shall consider no evidence which has not been formally
offered. The purpose for which the evidence is offered must be specified. The offer of evidence is necessary because it is
the duty of the Court to rest its findings of fact and its judgment only and strictly upon the evidence offered by the parties.
Unless and until admitted by the court in evidence for the purpose or purposes for which such document is offered, the
same is merely a scrap of paper barren of probative weight. Mere identification of documents and the markings thereof as
exhibits do not confer any evidentiary weight on documents unless formally offered.44
Petitioner failed to offer in evidence Pagbilao’s Report and of the Joint Affidavit of Consent purportedly executed by her
children; the authenticity of which she, likewise, failed to prove. The joint written consent of petitioner’s children 45 was
notarized on January 16, 2002 in Guam, USA; for it to be treated by the Rules of Court in the same way as a document
notarized in this country it needs to comply with Section 2 of Act No. 2103, 46 which states:
Section 2. An instrument or document acknowledged and authenticated in a foreign country shall be considered authentic
if the acknowledgment and authentication are made in accordance with the following requirements:
(a) The acknowledgment shall be made before (1) an ambassador, minister, secretary of legation, chargé d affaires,
consul, vice-consul, or consular agent of the Republic of the Philippines, acting within the country or place to
which he is accredited, or (2) a notary public or officer duly authorized by law of the country to take
acknowledgments of instruments or documents in the place where the act is done.
(b) The person taking the acknowledgment shall certify that the person acknowledging the instrument or
document is known to him, and that he is the same person who executed it, and acknowledged that the same is
his free act and deed. The certificate shall be under his official seal, if he is by law required to keep a seal, and if
not, his certificate shall so state. In case the acknowledgment is made before a notary public or an officer
mentioned in subdivision (2) of the preceding paragraph, the certificate of the notary public or the officer taking
the acknowledgment shall be authenticated by an ambassador, minister, secretary of legation, chargé de affaires,
consul, vice-consul, or consular agent of the Republic of the Philippines, acting within the country or place to
which he is accredited. The officer making the authentication shall certify under his official seal that the person
who took the acknowledgment was at the time duly authorized to act as notary public or that he was duly
exercising the functions of the office by virtue of which he assumed to act, and that as such he had authority
under the law to take acknowledgment of instruments or documents in the place where the acknowledgment was
taken, and that his signature and seal, if any, are genuine.
As the alleged written consent of petitioner’s legitimate children did not comply with the afore-cited law, the same can at
best be treated by the Rules as a private document whose authenticity must be proved either by anyone who saw the
document executed or written; or by evidence of the genuineness of the signature or handwriting of the makers.47
Since, in the instant case, no further proof was introduced by petitioner to authenticate the written consent of her
legitimate children, the same is inadmissible in evidence.
In reversing the ruling of the RTC, the CA ruled that petitioner was not stable enough to support the children and is only
relying on the financial backing, support and commitment of her children and her siblings. 48 Petitioner contradicts this by
claiming that she is financially capable as she has worked in Guam for 14 years, has savings, a house, and currently earns
$5.15 an hour with tips of not less than $1,000.00 a month. Her children and siblings have likewise committed themselves
to provide financial backing should the need arise. The OSG, again in its comment, banks on the statement in the Home
Study Report that "petitioner has limited income." Accordingly, it appears that she will rely on the financial backing of her
children and siblings in order to support the minor adoptees. The law, however, states that it is the adopter who should be
in a position to provide support in keeping with the means of the family.
Since the primary consideration in adoption is the best interest of the child, it follows that the financial capacity of
prospective parents should also
be carefully evaluated and considered. Certainly, the adopter should be in a position to support the would-be adopted
child or children, in keeping with the means of the family.

According to the Adoption Home Study Report49 forwarded by the Department of Public Health & Social Services of the
Government of Guam to the DSWD, petitioner is no longer supporting her legitimate children, as the latter are already
adults, have individual lives and families. At the time of the filing of the petition, petitioner was 57 years old, employed on
a part-time basis as a waitress, earning $5.15 an hour and tips of around $1,000 a month. Petitioner’s main intention in
adopting the children is to bring the latter to Guam, USA. She has a house at Quitugua Subdivision in Yigo, Guam, but the
same is still being amortized. Petitioner likewise knows that the limited income might be a hindrance to the adoption
proceedings.
Given these limited facts, it is indeed doubtful whether petitioner will be able to sufficiently handle the financial aspect of
rearing the three children in the US. She only has a part-time job, and she is rather of age. While petitioner claims that she
has the financial support and backing of her children and siblings, the OSG is correct in stating that the ability to support
the adoptees is personal to the adopter, as adoption only creates a legal relation between the former and the latter.
Moreover, the records do not prove nor support petitioner’s allegation that her siblings and her children are financially
able and that they are willing to support the minors herein. The Court, therefore, again sustains the ruling of the CA on
this issue.
While the Court recognizes that petitioner has only the best of intentions for her nieces and nephew, there are legal
infirmities that militate against reversing the ruling of the CA. In any case, petitioner is not prevented from filing a new
petition for adoption of the herein minors.
WHEREFORE, premises considered, the petition is hereby DENIED.
SO ORDERED.
6. SEE #2
7. G.R. No. 79955 January 27, 1989 IN THE MATTER OF THE PETITION FOR A WRIT OF HABEAS CORPUS OF MINOR
ANGELIE ANNE C. CERVANTES, NELSON L. CERVANTES and ZENAIDA CARREON CERVANTES, petitioners, vs. GINA
CARREON FAJARDO and CONRADO FAJARDO, respondents.
RESOLUTION
PADILLA, J.:
This is a petition for a writ of Habeas Corpus filed with this Court over the person of the minor Angelie Anne Cervantes. In
a resolution, dated 5 October 1987, the Court resolved to issue the writ returnable to the Executive Judge, Regional Trial
Court of Pasig at the hearing of 12 October 1987 at 8:30 a.m. Said Judge was directed to hear the case and submit his
report and recommendation to the Court.
On 3 December 1987, said Executive Judge, Regional Trial Court of Pasig submitted to the Court his report and
recommendation, also dated 3 December 1987.
It appears that the minor was born on 14 February 1987 to respondents Conrado Fajardo and Gina Carreon, who are
common-law husband and wife. Respondents offered the child for adoption to Gina Carreon's sister and brother-in-law,
the herein petitioners Zenaida Carreon-Cervantes and Nelson Cervantes, spouses, who took care and custody of the child
when she was barely two (2) weeks old. An Affidavit of Consent to the adoption of the child by herein petitioners, was also
executed by respondent Gina Carreon on 29 April 1987. 1
The appropriate petition for adoption (Sp. Proc. No. 057-B) was filed by herein petitioners over the child before the
Regional Trial Court of Rizal, Fourth Judicial District, Branch 67 which, on 20 August 1987, rendered a decision 2granting
the petition. The child was then known as Angelie Anne Fajardo. The court ordered that the child be "freed from parental
authority of her natural parents as well as from legal obligation and maintenance to them and that from now on shall be,
for all legal intents and purposes, known as Angelie Anne Cervantes, a child of herein petitioners and capable of inheriting
their estate ." 3
Sometime in March or April 1987, the adoptive parents, herein petitioners Nelson and Zenaida Cervantes, received a letter
from the respondents demanding to be paid the amount of P150,000.00, otherwise, they would get back their child.
Petitioners refused to accede to the demand.
As a result, on 11 September 1987, while petitioners were out at work, the respondent Gina Carreon took the child from
her "yaya" at the petitioners' residence in Angono, Rizal, on the pretext that she was instructed to do so by her mother.
Respondent Gina Carreon brought the child to her house in Parañaque. Petitioners thereupon demanded the return of the
child, but Gina Carreon refused, saying that she had no desire to give up her child for adoption and that the affidavit of
consent to the adoption she had executed was not fully explained to her. She sent word to the petitioners that she will,
however, return the child to the petitioners if she were paid the amount of P150,000.00.
Felisa Tansingco, the social worker who had conducted the case study on the adoption and submitted a report thereon to
the Regional Trial Court of Rizal in the adoption case, testified on 27 October 1987 before the Executive Judge, Regional
Trial Court of Pasig in connection with the present petition. She declared that she had interviewed respondent Gina

Carreon on 24 June 1987 in connection with the contemplated adoption of the child. During the interview, said
respondent manifested to the social worker her desire to have the child adopted by the petitioners. 4
In all cases involving the custody, care, education and property of children, the latter's welfare is paramount. The provision
that no mother shall be separated from a child under five (5) years of age, will not apply where the Court finds compelling
reasons to rule otherwise. 5 In all controversies regarding the custody of minors, the foremost consideration is the moral,
physical and social welfare of the child concerned, taking into account the resources and moral as well as social standing
of the contending parents. Never has this Court deviated from this criterion. 6
It is undisputed that respondent Conrado Fajardo is legally married to a woman other than respondent Gina Carreon, and
his relationship with the latter is a common-law husband and wife relationship. His open cohabitation with co-respondent
Gina Carreon will not accord the minor that desirable atmosphere where she can grow and develop into an upright and
moral-minded person. Besides, respondent Gina Carreon had previously given birth to another child by another married
man with whom she lived for almost three (3) years but who eventually left her and vanished. For a minor (like Angelie
Anne C. Cervantes) to grow up with a sister whose "father" is not her true father, could also affect the moral outlook and
values of said minor. Upon the other hand, petitioners who are legally married appear to be morally, physically, financially,
and socially capable of supporting the minor and giving her a future better than what the natural mother (herein
respondent Gina Carreon), who is not only jobless but also maintains an illicit relation with a married man, can most likely
give her.
Besides, the minor has been legally adopted by petitioners with the full knowledge and consent of respondents. A decree
of adoption has the effect, among others, of dissolving the authority vested in natural parents over the adopted child,
except where the adopting parent is the spouse of the natural parent of the adopted, in which case, parental authority
over the adopted shall be exercised jointly by both spouses. 7 The adopting parents have the right to the care and custody
of the adopted child 8 and exercise parental authority and responsibility over him. 9
ACCORDINGLY, and as recommended by the Executive Judge, Regional Trial Court of Pasig, Hon. Eutropio Migrino, the
Petition is GRANTED. The custody and care of the minor Angelie Anne Cervantes are hereby granted to petitioners to
whom they properly belong, and respondents are ordered (if they still have not) to deliver said minor to the petitioners
immediately upon notice hereof This resolution is immediately executory.
SO ORDERED.
8. September 28, 2015 G.R. No. 197099 EUGENIO SAN JUAN GERONIMO, Petitioner,
vs. KAREN SANTOS, Respondent.
DECISION
VILLARAMA, JR., J.:
At bar is a petition for review on certiorari of the Decision 1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No.
88650 promulgated on January 17, 2011 and May 24, 2011, respectively, which affirmed the Decision 3 of the Regional Trial
Court (RTC) of Malolos City, Bulacan, Branch 8. Both courts a quo ruled that the subject document titled Pagmamana sa
Labas ng Hukuman is null and void, and ordered herein petitioner Eugenio San Juan Geronimo (Eugenio), who was
previously joined by his brother Emiliano San Juan Geronimo (Emiliano) as codefendant, to vacate the one-half portion of
the subject 6,542-square meter property and surrender its possession to respondent Karen Santos. In a Resolution4 dated
November 28, 2011, this Court ordered the deletion of the name of Emiliano from the title of the instant petition_ as co-
petitioner, viz.:
x x x The Court resolves:
xxxx
(2) to AMEND the title of this petition to read "Eugenio San Juan Geronimo, petitioner vs. Karen Santos, respondent,"
considering the sworn statement of Eugenio San Juan Geronimo that he does not know whether his brother is still alive
and that his brother did not verify the instant petition; x x x5
The following facts were found by the trial court and adopted by the appellate court in its assailed Decision, viz.:
On April 17, 2001, plaintiff Karen Santos, claiming to be the only child of deceased Rufino and Caridad Geronimo filed a
complaint for annulment of document and recovery of possession against the defendants Eugenio and Emiliano Geronimo
who are the brothers of her father. She alleged that with the death of her parents, the property consisting of one half of
the parcel of land located at San Jose, Paombong, Bulacan with Tax Declaration No. 99-02017-00219 and belonging to her
parents was passed on to her by the law on intestacy; that lately, she discovered that defendants executed a document
entitled Pagmamana sa Labas ng Hukuman declaring themselves as the only heirs of spouses Rufino and Caridad and
adjudicating to themselves the property in question; and that consequently[,] they took possession and were able to

transfer the tax declaration of the subject property to their names. She prayed that the document Exhibit C be annulled
and the tax declaration of the land transferred to her, and that the defendants vacate the property and pay her damages.
In an amended answer, the defendants denied the allegation that plaintiff was the only child and sole heir of their brother.
They disclosed that the deceased Rufino and Caridad Geronimo were childless and took in as their ward the plaintiff who
was in truth, the child of Caridad’s sister. They claimed that the birth certificate of the plaintiff was a simulated document.
It was allegedly impossible for Rufino and Caridad to have registered the plaintiff in Sta. Maria, Ilocos Sur because they
had never lived or sojourned in the place and Caridad, who was an elementary teacher in Bulacan never filed any
maternity leave during the period of her service from August 1963 until October 1984.
The plaintiff took the stand and testified that her parents were Rufino and Caridad Geronimo. The defendants Eugenio and
Emiliano were the half-brothers of her father Rufino, being the children of Rufino’s father Marciano Geronimo with
another woman Carmen San Juan. Rufino co-owned Lot 1716 with the defendants’ mother Carmen, and upon his death in
1980, when the plaintiff was only 8 years old, his share in the property devolved on his heirs. In 1998, some 18 years later,
Caridad and she executed an extra-judicial settlement of Rufino’s estate entitled Pagmamanahan Sa Labas ng Hukuman
Na May Pagtalikod Sa Karapatan, whereby the plaintiff’s mother Caridad waived all her rights to Rufino’s share and in the
land in question to her daughter the plaintiff. Be that as it may, in 1985, guardianship proceedings appeared to have been
instituted with the Regional Trial Court of Malolos by Caridad in which it was established that the plaintiff was the minor
child of Caridad with her late husband Rufino. Caridad was thus appointed guardian of the person and estate of the
plaintiff.
The plaintiff further declared that she and her mother had been paying the real estate taxes on the property, but in 2000,
the defendants took possession of the land and had the tax declaration transferred to them. This compelled her to file the
present case.
Eugenio Geronimo, the defendant, disputes the allegation that the plaintiff is the only child and legal heir of his brother
Rufino. He disclosed that when Rufino’s wife could not bear a child, the couple decided to adopt the plaintiff who was
Caridad’s niece from Sta. Maria, Ilocos Sur. It was in 1972, 13 years after the marriage, when Karen joined her adoptive
parents’ household. Believing that in the absence of a direct heir, his brother Emiliano and he should succeed to the estate
of their brother, they executed in 2000 an extra-judicial settlement called
Pagmamana sa Labas ng Hukuman.
Eugenio was able to obtain a copy of the plaintiff’s alleged birth certificate. It had irregular features, such as that it was
written in pentel pen, the entry in the box date of birth was erased and the word and figure April 6, 1972 written and the
name Emma Daño was superimposed on the entry in the box intended for the informant’s signature.
Two more witnesses were adduced. Atty. Elmer Lopez, a legal consultant of the DECS in Bulacan brought the plaintiff's
service record as an elementary school teacher at Paombong[,] Bulacan to show that she did not have any maternity leave
during the period of her service from March 11, 1963 to October 24, 1984, and a certification from the Schools Division
Superintendent that the plaintiff did not file any maternity leave during her service. He declared that as far as the service
record is concerned, it reflects the entry and exit from the service as well as the leaves that she availed of. Upon inquiry by
the court, he clarified that the leaves were reflected but the absences were not. Testifying on the plaintiff’s birth certificate,
Exhibit 14, Arturo Reyes, a representative of the NSO, confirmed that there was an alteration in the date of birth and
signature of the informant. In view of the alterations, he considered the document questionable. 6
On October 27, 2006, the trial court ruled in favor of respondent, viz.:
WHEREFORE, judgment is hereby rendered as follows:
1. Declaring the document Pagmamana sa Labas ng Hukuman dated March 9, 2000 executed in favor of Eugenio
San Juan-Geronimo and Emilio San Juan-Geronimo as null and void;
2. Annulling Tax Declaration No. 99-02017-01453 of the subject property in the names of Eugenio San Juan-
Geronimo and Emiliano San Juan-Geronimo;
3. Ordering defendants Eugenio San Juan-Geronimo and Emiliano San Juan-Geronimo to vacate the ½ portion of
the subject property and to surrender the possession to the plaintiff;
4. Ordering the defendants to pay the plaintiff the amount of [P]30,000.00 as attorney’s fees;
5. To pay the costs of the suit.
SO ORDERED.7
The trial court ruled that respondent is the legal heir – being the legitimate child – of the deceased spouses Rufino and
Caridad Geronimo (spouses Rufino and Caridad). It found that respondent’s filiation was duly established by the certificate

of live birth which was presented in evidence. The RTC dismissed the claim of petitioner that the birth certificate appeared
to have been tampered, specifically on the entries pertaining to the date of birth of respondent and the name of the
informant. The trial court held that petitioner failed to adduce evidence to explain how the erasures were done. Petitioner
also failed to prove that the alterations were due to the fault of respondent or another person who was responsible for the
act. In the absence of such contrary evidence, the RTC relied on the prima faciepresumption of the veracity and regularity
of the birth certificate as a public document.
The trial court further stated that even granting arguendo that the birth certificate is questionable, the filiation of
respondent has already been sufficiently proven by evidence of her open and continuous possession of the status of a
legitimate child under Article 172 of the Family Code of the Philippines. The RTC considered the following overt acts of the
deceased spouses as acts of recognition that respondent is their legitimate child: they sent her to school and paid for her
tuition fees; Caridad made respondent a beneficiary of her burial benefits from the Government Service Insurance System;
and, Caridad filed a petition for guardianship of respondent after the death of her husband Rufino. Lastly, the trial court
held that to be allowed to impugn the filiation and status of respondent, petitioner should have brought an action for the
purpose under Articles 170 and 171 of the Family Code. Since petitioner failed to file such action, the trial court ruled that
respondent alone is entitled to the ownership and possession of the subject land owned by Rufino. The extrajudicial
settlement executed by petitioner and his brother was therefore declared not valid and binding as respondent is Rufino’s
only compulsory heir.
On appeal, petitioner raised the issue on the alterations in the birth certificate of respondent and the offered evidence of a
mere certification from the Office of the Civil Registry instead of the birth certificate itself.
According to petitioner, respondent’s open and continuous possession of the status of a legitimate child is only secondary
evidence to the birth certificate itself. Respondent questioned if it was legally permissible for petitioner to question her
filiation as a legitimate child of the spouses Rufino and Caridad in the same action for annulment of document and
recovery of possession that she herself filed against petitioner and his then co-defendant.
Respondent argued that the conditions enumerated under Articles 170 and 171 of the Family Code, giving the putative
father and his heirs the right to bring an action to impugn the legitimacy of the child, are not present in the instant case.
She further asserted that the Family Code contemplates a direct action, thus her civil status may not be assailed indirectly
or collaterally in this suit.
In the assailed Decision dated January 17, 2011, the appellate court held that under Article 170, the action to impugn the
legitimacy of the child must be reckoned from either of these two dates: the date the child was born to the mother during
the marriage, or the date when the birth of such child was recorded in the civil registry. The CA found no evidence or
admission that Caridad indeed gave birth to respondent on a specific date. It further resolved that the birth certificate
presented in this case, Exhibit 14, does not qualify as the valid registration of birth in the civil register as envisioned by the
law, viz.:
x x x The reason is that under the statute establishing the civil register, Act No. 3753, the declaration of the physician or
midwife in attendance at the birth or in default thereof, that declaration of either parent of the newborn child, shall be
sufficient for the registration of birth in the civil register. The document in question was signed by one Emma Daño who
was not identified as either the parent of the plaintiff or the physician or midwife who attended to her birth. Exhibit 14,
legally, cannot be the birth certificate envisioned by the law; otherwise, with an informant as shadowy as Emma Daño, the
floodgates to spurious filiations will be opened. Neither may the order of the court Exhibit E be treated as the final
judgment mentioned in Article 172 as another proof of filiation.
The final judgment mentioned refers to a decision of a competent court finding the child legitimate. Exhibit G is merely an
order granting letters of guardianship to the parent Caridad based on her representations that she is the mother of the
plaintiff.8
Noting the absence of such record of birth, final judgment or admission in a public or private document that respondent is
the legitimate child of the spouses Rufino and Caridad, the appellate court – similar to the trial court – relied on Article
172 of the Family Code which allows the introduction and admission of secondary evidence to prove one’s legitimate
filiation via open and continuous possession of the status of a legitimate child. The CA agreed with the trial court that
respondent has proven her legitimate filiation, viz.:
We agree with the lower court that the plaintiff has proven her filiation by open and continuous possession of the status
of a legitimate child. The evidence consists of the following: (1) the plaintiff was allowed by her putative parents to bear
their family name Geronimo; (2) they supported her and sent her to school paying for her tuition fees and other school
expenses; (3) she was the beneficiary of the burial benefits of Caridad before the GSIS; (4) after the death of Rufino,
Caridad applied for and was appointed legal guardian of the person and property of the plaintiff from the estate left by
Rufino; and (5) both Caridad and the plaintiff executed an extrajudicial settlement of the estate of Rufino on the basis of
the fact that they are both the legal heirs of the deceased.

It is clear that the status enjoyed by the plaintiff as the legitimate child of Rufino and Caridad has
been open and continuous. x x x The conclusion follows that the plaintiff is entitled to the property left by Rufino to the
exclusion of his brothers, the defendants, which consists of a one-half share in Lot 1716.9
Petitioners moved for reconsideration10 but the motion was denied in the assailed Resolution dated May 24, 2011. Hence,
this petition raising the following assignment of errors:
I. THAT THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION, AMOUNTING TO LACK OF
JURISDICTION, WHEN IT ALLOWED THE INTRODUCTION OF SECONDARY EVIDENCE AND RENDERED JUDGMENT
BASED THEREON NOTWITHSTANDING THE EXISTENCE OF PRIMARY EVIDENCE OF BIRTH CERTIFICATE [EXHIBIT
14].
II. THAT THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION, AMOUNTING TO LACK OF
JURISDICTION WHEN IT RULED THAT PETITIONERS HAVE NO PERSONALITY TO IMPUGN RESPONDENT’S
LEGITIMATE FILIATION.11
On the first issue, petitioner argues that secondary evidence to prove one’s filiation is admissible only if there is no primary
evidence, i.e, a record of birth or an authentic admission in writing.12 Petitioner asserts that herein respondent’s birth
certificate, Exhibit 14, constitutes the primary evidence enumerated under Article 172 of the Family Code and the ruling of
both courts a quo that the document is not the one "envisioned by law" should have barred the introduction of secondary
evidence. Petitioner expounds this proposition, viz.:
The findings of the courts a quo that the birth certificate [Exhibit 14] is not [the] one envisioned by law finds support in
numerous cases decided by the Honorable Supreme Court. Thus, a certificate of live birth purportedly identifying the
putative father is not competent evidence as to the issue of paternity, when there is no showing that the putative father
had a hand in the preparation of said certificates, and the Local Civil Registrar is devoid of authority to record the paternity
of an illegitimate child upon the information of a third person. Where the birth certificate and the baptismal certificate
are per se inadmissible in evidence as proof of filiation, they cannot be admitted indirectly as circumstantial evidence to
prove the same. x x x
x x x The birth certificate Exhibit 14 contains erasures. The date of birth originally written in ball pen was erased and the
date April 6, 1972 was superimposed using a pentel pen; the entry on the informant also originally written in ball pen was
erased and the name E. Dano was superimposed using also a pentel pen; there is no signature as to who received it from
the office of the registry. Worst, respondent Karen confirms the existence of her birth certificate when she introduced in
evidence [Exhibit A] a mere Certification from the Office of the Local Civil Registrar of Sta. Maria, Ilocos Sur, which
highlighted more suspicions of its existence, thus leading to conclusion and presumption that if such evidence is
presented, it would be adverse to her claim. True to the suspicion, when Exhibit 14 was introduced by the petitioner and
testified on by no less than the NSO representative, Mr. Arturo Reyes, and confirmed that there were alterations which
renders the birth certificate questionable.
Argued differently, with the declaration that the birth certificate is a nullity or falsity, the courts a quo should have stopped
there, ruled that respondent Karen is not the child of Rufino, and therefore not entitled to inherit from the estate. 13
On the second issue, petitioner alleges that the CA gravely erred and abused its discretion amounting to lack of
jurisdiction when it ruled that he does not have personality to impugn respondent’s legitimate filiation. 14
While petitioner admits that the CA "did not directly rule on this particular issue," 15 he nonetheless raises the said issue as
an error since the appellate court affirmed the decision of the trial court. Petitioner argues that in so affirming, the CA also
adopted the ruling of the trial court that the filiation of respondent is strictly personal to respondent’s alleged father and
his heirs under Articles 170 and 171 of the Family Code, 16 thereby denying petitioner the "right to impugn or question the
filiation and status of the plaintiff."17 Petitioner argues, viz.:
x x x [T]he lower court’s reliance on Articles 170 and 171 of the Family Code is totally misplaced, with due respect. It
should be read in conjunction with the other articles in the same chapter on paternity and filiation of the Family Code. A
careful reading of said chapter would reveal that it contemplates situations where a doubt exists that a child is indeed a
man’s child, and the father [or, in proper cases, his heirs] denies the child’s filiation. It does not refer to situations where a
child is alleged not to be the child at all of a particular couple. Petitioners are asserting not merely that respondent Karen
is not a legitimate child of, but that she is not a child of Rufino Geronimo at all. x x x 18
We grant the petition.
Despite its finding that the birth certificate which respondent offered in evidence is questionable, the trial court ruled that
respondent is a legitimate child and the sole heir of deceased spouses Rufino and Caridad. The RTC based this conclusion
on secondary evidence that is similar to proof admissible under the second paragraph of Article 172 of the Family Code to
prove the filiation of legitimate children, viz.:
ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by
the parent concerned.
In the absence of the following evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.
Petitioner argues that such secondary evidence may be admitted only in a direct action under Article 172 because the said
provision of law is meant to be instituted as a separate action, and proof of filiation cannot be raised as a collateral issue
as in the instant case which is an action for annulment of document and recovery of possession.
Petitioner is correct that proof of legitimacy under Article 172, or illegitimacy under Article 175, should only be raised in a
direct and separate action instituted to prove the filiation of a child. The rationale behind this procedural prescription is
stated in the case of Tison v. Court of Appeals,19 viz.:
x x x [W]ell settled is the rule that the issue of legitimacy cannot be attacked collaterally.
The rationale for these rules has been explained in this wise:
"The presumption of legitimacy in the Family Code x x x actually fixes a civil status for the child born in wedlock, and that
civil status cannot be attacked collaterally. The legitimacy of the child can be impugned only in a direct action brought for
that purpose, by the proper parties, and within the period limited by law.
The legitimacy of the child cannot be contested by way of defense or as a collateral issue in another action for a
different purpose. The necessity of an independent action directly impugning the legitimacy is more clearly expressed in
the Mexican Code (Article 335) which provides: ‘The contest of the legitimacy of a child by the husband or his heirs must
be made by proper complaint before the competent court; any contest made in any other way is void.’ This principle
applies under our Family Code. Articles 170 and 171 of the code confirm this view, because they refer to "the action to
impugn the legitimacy."
This action can be brought only by the husband or his heirs and within the periods fixed in the present articles.
Upon the expiration of the periods provided in Article 170, the action to impugn the legitimacy of a child can no longer be
brought. The status conferred by the presumption, therefore, becomes fixed, and can no longer be
questioned.1âwphi1 The obvious intention of the law is to prevent the status of a child born in wedlock from being in a
state of uncertainty for a long time. It also aims to force early action to settle any doubt as to the paternity of such child,
so that the evidence material to the matter, which must necessarily be facts occurring during the period of the conception
of the child, may still be easily available.
xxxx
Only the husband can contest the legitimacy of a child born to his wife. He is the one directly confronted with the scandal
and ridicule which the infidelity of his wife produces; and he should decide whether to conceal that infidelity or expose it,
in view of the moral and economic interest involved. It is only in exceptional cases that his heirs are allowed to contest
such legitimacy. Outside of these cases, none – even his heirs – can impugn legitimacy; that would amount to an insult to
his memory."20
What petitioner failed to recognize, however, is that this procedural rule is applicable only to actions where the legitimacy
– or illegitimacy – of a child is at issue. This situation does not obtain in the case at bar.
In the instant case, the filiation of a child – herein respondent – is not at issue. Petitioner does not claim that respondent is
not the legitimate child of his deceased brother Rufino and his wife Caridad. What petitioner alleges is that respondent is
not the child of the deceased spouses Rufino and Caridad at all. He proffers this allegation in his Amended Answer before
the trial court by way of defense that respondent is not an heir to his brother Rufino. When petitioner alleged that
respondent is not a child of the deceased spouses Rufino and Caridad in the proceedings below, jurisprudence shows that
the trial court was correct in admitting and ruling on the secondary evidence of respondent – even if such proof is similar
to the evidence admissible under the second paragraph of Article 172 and despite the instant case not being a direct
action to prove one’s filiation. In the following cases, the courts a quo and this Court did not bar the introduction of
secondary evidence in actions which involve allegations that the opposing party is not the child of a particular couple –
even if such evidence is similar to the kind of proof admissible under the second paragraph of Article 172.
In the 1994 case of Benitez-Badua v. Court of Appeals,21 therein deceased spouses Vicente Benitez (Vicente) and Isabel
Chipongian (Isabel) owned various properties while they were still living. Isabel departed in 1982, while Vicente died

intestate in 1989. In 1990, Vicente’s sister (Victoria Benitez-Lirio) and nephew (Feodor Benitez Aguilar) instituted an action
before the trial court for the issuance of letters of administration of his estate in favor of Feodor. In the said proceedings,
they alleged that Vicente was "survived by no other heirs or relatives be they ascendants or descendants, whether
legitimate, illegitimate or legally adopted x x x." 22 They further argued that one "Marissa Benitez[-]Badua who was raised
and cared for by them since childhood is, in fact, not related to them by blood, nor legally adopted, and is therefore not a
legal heir [of Vicente]."23 Marissa opposed the petition and proffered evidence to prove that she is an heir of Vicente.
Marissa submitted the following evidence, viz.:
1. her Certificate of Live Birth (Exh. 3);

2. Baptismal Certificate (Exh. 4);
3. Income Tax Returns and Information Sheet for Membership with the GSIS of the late Vicente naming her as his
daughter (Exhs. 10 to 21); and
4. School Records (Exhs. 5 & 6).
She also testified that the said spouses reared and continuously treated her as their legitimate daughter. 24
Feodor and his mother Victoria offered mostly testimonial evidence to show that the spouses Vicente and Isabel failed to
beget a child during their marriage. They testified that the late Isabel, when she was 36 years old, was even referred to an
obstetrician-gynecologist for treatment. Victoria, who was 77 years old at the time of her testimony, also categorically
stated that Marissa was not the biological child of the said spouses who were unable to physically procreate. 25
The trial court, relying on Articles 166 and 170 of the Family Code, declared Marissa as the legitimate daughter and sole
heir of the spouses Vicente and Isabel. The appellate court reversed the RTC’s ruling holding that the trial court erred in
applying Articles 166 and 170 of the Family Code. On appeal to this Court, we affirmed the reversal made by the appellate
court, viz.:
A careful reading of the above articles will show that they do not contemplate a situation, like in the instant case, where
a child is alleged not to be the child of nature or biological child of a certain couple.
Rather, these articles govern a situation where a husband (or his heirs) denies as his own a child of his wife. Thus, under
Article 166, it is the husband who can impugn the legitimacy of said child by proving: (1) it was physically impossible for
him to have sexual intercourse, with his wife within the first 120 days of the 300 days which immediately preceded the
birth of the child; (2) that for biological or other scientific reasons, the child could not have been his child; (3) that in case
of children conceived through artificial insemination, the written authorization or ratification by either parent was obtained
through mistake, fraud, violence, intimidation or undue influence. Articles 170 and 171 reinforce this reading as they speak
of the prescriptive period within which the husband or any of hisheirs should file the action impugning the legitimacy of
said child. Doubtless then, the appellate court did not err when it refused to apply these articles to the case at
bench. For the case at bench is not one where the heirs of the late Vicente are contending that petitioner is not his
child by Isabel. Rather, their clear submission is that petitioner was not born to Vicente and Isabel. Our ruling in
Cabatbat- Lim vs. Intermediate Appellate Court, 166 SCRA 451, 457 cited in the impugned decision is apropos, viz:
"Petitioners’ recourse to Article 263 of the New Civil Code [now Art. 170 of the Family Code] is not welltaken.
This legal provision refers to an action to impugn legitimacy. It is inapplicable to this case because this is not an action to
impugn the legitimacy of a child, but an action of the private respondents to claim their inheritance as legal heirs of their
childless deceased aunt. They do not claim that petitioner Violeta Cabatbat Lim is an illegitimatechild of the
deceased, but that she is not the decedent's child at all. Being neither legally adopted child, nor an acknowledged
natural child, nor a child by legal fiction of Esperanza Cabatbat, Violeta is not a legal heir of the deceased." 26
Similarly, the 2001 case of Labagala v. Santiago27 originated from a complaint for recovery of title, ownership and
possession before the trial court. Respondents therein contended that petitioner is not the daughter of the decedent Jose
and sought to recover from her the 1/3 portion of the subject property pertaining to Jose but which came into petitioner’s
sole possession upon Jose’s death. Respondents sought to prove that petitioner is not the daughter of the decedent as
evidenced by her birth certificate which did not itself indicate the name of Jose as her father. Citing the case of Sayson v.
Court of Appeals and Article 263 of the Civil Code (now Article 170 of the Family Code), 28petitioner argued that
respondents cannot impugn her filiation collaterally since the case was not an action impugning a child’s legitimacy but
one for recovery of title, ownership and possession of property. We ruled in this case that petitioner’s reliance on Article
263 of the Civil Code is misplaced and respondents may impugn the petitioner’s filiation in an action for recovery of title
and possession. Thus, we affirmed the ruling of the appellate court that the birth certificate of petitioner Labagala proved
that she "was born of different parents, not Jose and his wife." 29 Citing the aforecited cases of Benitez-Badua and Lim v.
Intermediate Appellate Court,30 we stated, viz.:
This article should be read in conjunction with the other articles in the same chapter on paternity and filiation in the Civil
Code. A careful reading of said chapter would reveal that it contemplates situations where a doubt exists that a child is
indeed a man’s child by his wife, and the husband (or, in proper cases, his heirs) denies the child’s filiation. It does not
refer to situations where a child is alleged not to be the child at all of a particular couple. 31

Article 263 refers to an action to impugn the legitimacy of a child, to assert and prove that a person is not a man’s child by
his wife. However, the present case is not one impugning petitioner’s legitimacy. Respondents are asserting not
merely that petitioner is not a legitimate child of Jose, but that she is not a child of Jose at all.
x x x32
Be that as it may, even if both courts a quo were correct in admitting secondary evidence similar to the proof admissible
under Article 172 of the Family Code in this action for annulment of document and recovery of possession, we are
constrained to rule after a meticulous examination of the evidence on record that all proof points to the conclusion that
herein respondent is not a child of the deceased spouses Rufino and Caridad.
While we ascribe to the general principle that this Court is not a trier of facts, 33 this rule admits of the following exceptions
where findings of fact may be passed upon and reviewed by this Court, viz.:
(1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures (Joaquin v. Navarro, 93 Phil.
257 [1953]); (2) When the inference made is manifestly mistaken, absurd or impossible ( Luna v. Linatok, 74 Phil. 15 [1942]);
(3) Where there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4)
When the judgment is based on a misapprehension of facts (Cruz v. Sosing, L-4875, Nov. 27, 1953); (5) When the findings
of fact areconflicting (Casica v. Villaseca, L-9590 Ap. 30, 1957; unrep.); (6) Whenthe Court of Appeals, in making its
findings, went beyond the issues of thecase and the same is contrary to the admissions of both appellant andappellee
(Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401[1958]); (7) The findings of the Court of Appeals are contrary to
those ofthe trial court (Garcia v. Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]); (8)
When the findings of fact are conclusions without citation of specific evidence on which they are based ( Ibid.,); (9) When
the facts set forth in the petition as well as in the petitioners’ main and reply briefs are not disputed by the respondents
(Ibid.,); and (10) The finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is
contradicted by the evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).34
It is clear in the case at bar that the ruling of both courts a quo declaring respondent as a legitimate child and sole heir of
the deceasedspouses Rufino and Caridad is one based on a misapprehension of facts.
A mere cursory reading of the birth certificate of respondent would show that it was tampered specifically on the entries
pertaining to the date of birth of respondent and the name of the informant. Using pentel ink, the date of birth of
respondent – April 6, 1972 – and the name of the informant – Emma Daño – were both superimposed on the document.
Despite these glaring erasures, the trial court still relied on the prima facie presumption of the veracity and regularity of
the birth certificate for failure of petitioner to explain how the erasures were done and if the alterations were due to the
fault of respondent. It thus ruled that respondent’s filiation was duly established by the birth certificate. The appellate
court did not agree with this finding and instead ruled that the birth certificate presented does not qualify as the valid
registration of birth in the civil register as envisioned by the law. We reiterate the relevant pronouncement of the CA, viz.:
x x x The document in question was signed by one Emma Daño who was not identified as either the parent of the plaintiff
or the physician or midwife who attended to her birth. Exhibit 14, legally, cannot be the birth certificate envisioned by the
law; otherwise, with an informant as shadowy as Emma Daño, the floodgates to spurious filiations will be opened. Neither
may the order of the court Exhibit E be treated as the final judgment mentioned in Article 172 as another proof of filiation.
The final judgment mentioned refers to a decision of a competent court finding the child legitimate. Exhibit G is merely an
order granting letters of guardianship to the parent Caridad based on her representations that she is the mother of the
plaintiff.35
Nonetheless, the appellate court agreed with the trial court that respondent has proven her filiation by showing that she
has enjoyed that open and continuous possession of the status of a legitimate child of the deceased spouses Rufino and
Caridad, viz.:
x x x The evidence consists of the following: (1) the plaintiff was allowed by her putative parents to bear their family
name Geronimo; (2) they supported her and sent her to school paying for her tuition fees and other school expenses; (3)
she was the beneficiary of the burial benefits of Caridad before the GSIS; (4) after the death of Rufino, Caridad applied for
and was appointed legal guardian of the person and property of the plaintiff from the estate left by Rufino; and (5) both
Caridad and the plaintiff executed an extrajudicial settlement of the estate of Rufino on the basis of the fact that they are
both the legal heirs of the deceased.36
We do not agree with the conclusion of both courts a quo. The appellate court itself ruled that the irregularities consisting
of the superimposed entries on the date of birth and the name of the informant made the document questionable. The
corroborating testimony of Arturo Reyes, a representative of the NSO, further confirmed that the entries on the date of
birth and the signature of the informant are alterations on the birth certificate which rendered the document questionable.
To be sure, even the respondent herself did not offer any evidence to explain such irregularities on her own birth
certificate. These irregularities and the totality of the following circumstances surrounding the alleged birth of respondent
are sufficient to overthrow the presumption of regularity attached to respondent’s birth certificate, viz.:

1. The identity of one Emma Daño, whose name was superimposed as the informant regarding the birth of
respondent, remains unknown.
2. The testimony of Atty. Elmer De Dios Lopez, a legal consultant of the Department of Education in Bulacan,
proved that the deceased Caridad did not have any maternity leave during the period of her service from March
11, 1963 to October 24, 1984 as shown by her Service Record as an elementary school teacher at Paombong,
Bulacan. This was corroborated by a certification from Dr. Teofila R. Villanueva, Schools Division Superintendent,
that she did not file any maternity leave during her service. No testimonial or documentary evidence was also
offered to prove that the deceased Caridad ever had a pregnancy.
3. Based on the birth certificate, respondent was born in 1972 or 13 years into the marriage of the deceased
spouses Rufino and Caridad. When respondent was born, Caridad was already 40 years old. There are no hospital
records of Caridad’s delivery, and while it may have been possible for her to have given birth at her own home,
this could have been proven by medical or non-medical records or testimony if they do, in fact, exist.
4. It is worthy to note that respondent was the sole witness for herself in the instant case.
Finally, we also find that the concurrence of the secondary evidence relied upon by both courts a quo does not sufficiently
establish the one crucial fact in this case: that respondent is indeed a child of the deceased spouses. Both the RTC and the
CA ruled that respondent is a legitimate child of her putative parents because she was allowed to bear their family name
"Geronimo", they supported her and her education, she was the beneficiary of the burial benefits of Caridad in her GSIS
policy, Caridad applied for and was appointed as her legal guardian in relation to the estate left by Rufino, and she and
Caridad executed an extrajudicial settlement of the estate of Rufino as his legal heirs.
In the case of Rivera v. Heirs of Romualdo Villanueva37 which incisively discussed its parallelisms and contrasts with the
case of Benitez- Badua v. Court of Appeals,38 we ruled that the presence of a similar set of circumstances – which were
relied upon as secondary proof by both courts a quo in the case at bar – does not establish that one is a child of the
putativeparents. Our discussion in the Rivera case is instructive, viz.:
In Benitez-Badua v. Court of Appeals, Marissa Benitez-Badua, in attempting to prove that she was the sole heir of the late
Vicente Benitez, submitted a certificate of live birth, a baptismal certificate, income tax returns and an information sheet
for membership in the Government Service Insurance System of the decedent naming her as his daughter, and her school
records. She also testified that she had been reared and continuously treated as Vicente’s daughter.
By testimonial evidence alone, to the effect that Benitez-Badua’s alleged parents had been unable to beget children, the
siblings of Benitez- Badua’s supposed father were able to rebut all of the documentary evidence indicating her filiation.
One fact that was counted against Benitez-Badua was that her supposed mother Isabel Chipongian, unable to bear any
children even after ten years of marriage, all of a sudden conceived and gave birth to her at the age of 36.
Of great significance to this controversy was the following pronouncement:
But definitely, the mere registration of a child in his or her birth certificate as the child of the supposed parents is
not a valid adoption, does not confer upon the child the status of an adopted child and the legal rights of such
child, and even amounts to simulation of the child's birth or falsification of his or her birth certificate, which is a public
document.(emphasis ours)
Furthermore, it is well-settled that a record of birth is merely a prima facie evidence of the facts contained therein. It is not
conclusive evidence of the truthfulness of the statements made there by the interestedparties. Following the logic of
Benitez, respondent Angelina and her codefendants in SD-857 should have adduced evidence of her adoption, in view of
the contents of her birth certificate. The records, however, are bereft of any such evidence.
There are several parallels between this case and Benitez- Badua that are simply too compelling to ignore. First, both
Benitez-Baduaand respondent Angelina submitted birth certificates as evidence offiliation. Second, both claimed to be
children of parents relativelyadvanced in age. Third, both claimed to have been born after their allegedparents had lived
together childless for several years.
There are, however, also crucial differences between BenitezBadua and this case which ineluctably support the conclusion
thatrespondent Angelina was not Gonzales' daughter, whether illegitimate oradopted. Gonzales, unlike Benitez-Badua's
alleged mother Chipongian,was not only 36 years old but 44 years old, and on the verge of menopauseat the time of the
alleged birth. Unlike Chipongian who had been marriedto Vicente Benitez for only 10 years, Gonzales had been living
childlesswith Villanueva for 20 years. Under the circumstances, we hold that it was not sufficiently established that
respondent Angelina was Gonzales' biological daughter, nor even her adopted daughter. Thus, she cannot inherit from
Gonzales. Since she could not have validly participated in Gonzales' estate, the extrajudicial partition which she executed
with Villanueva on August 8, 1980 was invalid.39

In view of these premises, we are constrained to disagree with both courts a quo and rule that the confluence of the
circumstances and the proof presented in this case do not lead to the conclusion that respondent is a child of the
deceased spouses.
WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
CV No. 88650 dated January 17, 2011 and May 24, 2011, respectively, are REVERSED and SET ASIDE. The Complaint in
Civil Case No. 268-M-2001 for Annulment of Document and Recovery of Possession is hereby ordered DISMISSED.
With costs against the respondent.
SO ORDERED.
TRUSTEES
1. G.R. No. 184088 IGLESIA EVANGELICA METODISTA EN LAS ISLAS FILIPINAS (IEMELIF), Inc., Petitioner, v.
BISHOP NATHANAEL LAZARO, ET AL., Respondents .
x-----------------------------------------------------------------------------------------x
SEPARATE CONCURRING OPINION
CARPIO, J.:
I concur in the result of the majority opinion that IEMELIF, a corporation sole, may be converted into a corporation
aggregate by a mere amendment of its articles of incorporation. However, I maintain that the amendment can be effected
by the corporation sole without the concurrence of two-thirds of the members of the religious denomination, sect or
church that the corporation sole represents.
Section 110 of the Corporation Code[1] defines a corporation sole as one formed by the chief archbishop, bishop, priest,
minister, rabbi or other presiding elder of a religious denomination, sect or church for the purpose of administering and
managing, as trustee, the affairs, property and temporalities of such religious denomination, sect or church. It is a special
form of corporation designed to facilitate the exercise of the functions of ownership carried on by the clerics for and on
behalf of the church which is regarded as the property owner.[2]
As its designation implies, a corporation sole consists of a single member.[3] It consists of one person only, and his
successors (who will always be one at a time) in some particular station, incorporated by law to be given some legal
capacities and advantages, particularly that of perpetuity, so that the successor becomes the corporation on the persons
death or resignation.[4]
A corporation aggregate, on the other hand, is a religious corporation composed of two or more persons. [5] The creation
of a corporation aggregate or religious society is sanctioned by Section 116 of the Corporation Code.
To convert a corporation sole to a corporation aggregate is to increase corporate membership from one to two or more,
and to transfer the duties of administering and managing the affairs, properties and temporalities of the religious entity,
from one to several trustees. I agree with the majority opinion that the conversion can be done through a mere
amendment of the articles of incorporation of the corporation sole. No dissolution of the corporation is necessary. The
resulting changes from such a conversion, carried out in accordance with law, will not affect the corporations
responsibilities to third parties.
The majority opinion, however, holds that the amendment of the articles of incorporation can be executed by the
corporation sole, albeit with the concurrence of at least two thirds of the members of the religious entity.
I do not subscribe to this view.
First, Section 110 of the Corporation Code provides that a corporation sole administers and manages, as trustee, the
affairs, properties and temporalities of the religious denomination, sect or church. As a trustee, a corporation sole can
exercise such corporate powers as maybe necessary to carry out its duties of administering and managing the affairs,
properties and temporalities of the religious organization, provided that such powers are not inconsistent with the law and
the Constitution. One of the powers authorized under Section 36 of the Corporation Code is the power to amend the
articles of incorporation.[6]
Second, as pointed out in the majority opinion, Section 109 of the Code allows the application to religious corporations of
the general provisions governing non-stock corporations, insofar as they may be applicable. The lack of specific provision
on amendments of articles of incorporation of a corporation sole calls for the suppletory application of relevant provisions
on non-stock corporations. Thus, Section 16 of the Code applies, to wit:
Sec. 16. Amendment of Articles of Incorporation. Unless otherwise prescribed by this Code or by
special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation
may be amended by a majority vote of the board of directors or trustees and the vote or written assent of
the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice

to the appraisal right of dissenting stockholders in accordance with the provisions of this Code, or the
vote or written assent of at least two-thirds (2/3) of the members if it be a non-stock corporation.
x x x (Italics supplied)
The majority opinion holds that applying the above provision, amendment can be made by the corporation sole with the
concurrence of at least two-thirds of the members of the religious organization it represents.
I do not agree. Section 16 requires the majority vote of the board of trustees and the vote or written assent of at least
two-thirds of the members of a non-stock corporation. Applying this, a corporation sole, as the lone trustee and
member of the corporation, can amend its articles of incorporation.
Section 16 refers to the members of the corporation. Again, in the case of a corporation sole, there is only one memberthe
chief archbishop, bishop, priest, minister, rabbi or presiding elderwho is also the trustee of the corporation.
The religious denomination, sect or church represented by the corporation sole has members who are distinct and
different from the member of the corporation sole. The members of the religious organization should not be considered
for purposes of Section 16. Thus, the votes of those members are not necessary in amending the articles of incorporation
of the corporation sole, the vote of the latter being sufficient in effecting the amendment.
It bears emphasizing that once the conversion from corporation sole to corporation aggregate is perfected, the provisions
of the Corporation Code specifically designed for a corporation sole cease to apply to the corporation aggregate, and the
latter shall be governed by the relevant provisions on non-stock or even stock corporations.[7]
For instance, the rules on the sale of properties of a corporation sole are governed by Section 113 of the Code. [8] The
corporation sole may sell or mortgage real properties held by it in accordance with the rules, regulations and discipline of
the religious denomination, sect or church concerned. It is only in the absence of such rules that court intervention
becomes necessary, and real properties are sold or mortgaged by obtaining an order from the Regional Trial Court of the
province where the property is situated. On the other hand, the sale or other disposition of all or substantially all of the
properties and assets of a corporation aggregate shall be governed by Section 40 of the Code which applies to stock and
non-stock corporations. Under this section, the sale, lease, exchange, mortgage, pledge or disposition of all or
substantially all of the properties and assets of the corporation may generally be done through a majority vote of its board
of trustees, and the vote of at least two-thirds of its members in a members meeting duly called for that purpose. Hence,
unlike in the case of a corporation sole, a corporation aggregate may not apply its own rules, regulations and discipline in
selling all or substantially all of its properties, as this process shall be governed by secular principles and rules of law.
Accordingly, I vote to DENY the petition.
2. G.R. No. 179096 February 06, 2013 JOSEPH GOYANKO, JR., as administrator of the Estate of Joseph
Goyanko, Sr., Petitioner, vs. UNITED COCONUT PLANTERS BANK, MANGO AVENUE BRANCH, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by petitioner Joseph Goyanko, Jr., administrator of the Estate of
Joseph Goyanko, Sr., to nullify the decision2 dated February 20, 2007 and the resolution3 dated July 31, 2007 of the Court
of Appeals (CA) in CA-G.R. CV. No. 00257 affirming the decision4 of the Regional Trial Court of Cebu City, Branch 16(RTC)
in Civil Case No. CEB-22277. The RTC dismissed the petitioner’s complaint for recovery of sum money against United
Coconut Planters Bank, Mango Avenue Branch (UCPB).
The Factual Antecedents
In 1995, the late Joseph Goyanko, Sr. (Goyanko) invested Two Million Pesos (P2,000,000.00) with Philippine Asia Lending
Investors, Inc. family, represented by the petitioner, and his illegitimate family presented conflicting claims to PALII for the
release of the investment. Pending the investigation of the conflicting claims, PALII deposited the proceeds of the
investment with UCPB on October 29, 19965 under the name "Phil Asia: ITF (In Trust For) The Heirs of Joseph Goyanko,
Sr." (ACCOUNT). On September 27, 1997, the deposit under the ACCOUNT was P1,509,318.76.
On December 11, 1997, UCPB allowed PALII to withdraw One Million Five Hundred Thousand Pesos (P1,500,000.00) from
the Account, leaving a balance of only P9,318.76. When UCPB refused the demand to restore the amount withdrawn plus
legal interest from December 11, 1997, the petitioner filed a complaint before the RTC. In its answer to the complaint,
UCPB admitted, among others, the opening of the ACCOUNT under the name "ITF (In Trust For) The Heirs of Joseph
Goyanko, Sr.," (ITF HEIRS) and the withdrawal on December 11, 1997.
The RTC Ruling

In its August 27, 2003 decision, the RTC dismissed the petitioner’s complaint and awarded UCPB attorney’s fees, litigation
expenses and the costs of the suit.6 The RTC did not consider the words "ITF HEIRS" sufficient to charge UCPB with
knowledge of any trust relation between PALII and Goyanko’s heirs (HEIRS). It concluded that UCPB merely performed its
duty as a depository bank in allowing PALII to withdraw from the ACCOUNT, as the contract of deposit was officially only
between PALII, in its own capacity, and UCPB. The petitioner appealed his case to the CA.
The CA’s Ruling
Before the CA, the petitioner maintained that by opening the ACCOUNT, PALII established a trust by which it was the
"trustee" and the HEIRS are the "trustors-beneficiaries;" thus, UCPB should be liable for allowing the withdrawal.
The CA partially granted the petitioner’s appeal. It affirmed the August 27, 2003 decision of the RTC, but deleted the
award of attorney’s fees and litigation expenses. The CA held that no express trust was created between the HEIRS and
PALII. For a trust to be established, the law requires, among others, a competent trustor and trustee and a clear intention
to create a trust, which were absent in this case. Quoting the RTC with approval, the CA noted that the contract of deposit
was only between PALII in its own capacity and UCPB, and the words "ITF HEIRS" were insufficient to establish the
existence of a trust. The CA concluded that as no trust existed, expressly or impliedly, UCPB is not liable for the amount
withdrawn.7
In its July 31, 2007 resolution,8 the CA denied the petitioner’s motion for reconsideration. Hence, the petitioner’s present
recourse.
The Petition
The petitioner argues in his petition that: first, an express trust was created, as clearly shown by PALII’s March 28, 1996 and
November 15, 1996 letters.9 Citing jurisprudence, the petitioner emphasizes that from the established definition of a
trust,10 PALII is clearly the trustor as it created the trust; UCPB is the trustee as it is the party in whom confidence is
reposed as regards the property for the benefit of another; and the HEIRS are the beneficiaries as they are the persons for
whose benefit the trust is created. 11 Also, quoting Development Bank of the Philippines v. Commission on Audit,12 the
petitioner argues that the naming of the cestui que trust is not necessary as it suffices that they are adequately certain or
identifiable.13
Second, UCPB was negligent and in bad faith in allowing the withdrawal and in failing to inquire into the nature of the
ACCOUNT.14 The petitioner maintains that the surrounding facts, the testimony of UCPB’s witness, and UCPB’s own
records showed that: (1) UCPB was aware of the trust relation between PALII and the HEIRS; and (2) PALII held the
ACCOUNT in a trust capacity. Finally, the CA erred in affirming the RTC’s dismissal of his case for lack of cause of action.
The petitioner insists that since an express trust clearly exists, UCPB, the trustee, should not have allowed the withdrawal.
The Case for UCPB
UCPB posits, in defense, that the ACCOUNT involves an ordinary deposit contract between PALII and UCPB only, which
created a debtor-creditor relationship obligating UCPB to return the proceeds to the account holder-PALII. Thus, it was not
negligent in handling the ACCOUNT when it allowed the withdrawal. The mere designation of the ACCOUNT as "ITF" is
insufficient to establish the existence of an express trust or charge it with knowledge of the relation between PALII and the
HEIRS.
UCPB also argues that the petitioner changed the theory of his case. Before the CA, the petitioner argued that the HEIRS
are the trustors-beneficiaries, and PALII is the trustee. Here, the petitioner maintains that PALII is the trustor, UCPB is the
trustee, and the HEIRS are the beneficiaries. Contrary to the petitioner’s assertion, the records failed to show that PALII and
UCPB executed a trust agreement, and PALII’s letters made it clear that PALII, on its own, intended to turn-over the
proceeds of the ACCOUNT to its rightful owners.
The issue before us is whether UCPB should be held liable for the amount withdrawn because a trust agreement existed
between PALII and UCPB, in favor of the HEIRS, when PALII opened the ACCOUNT with UCPB.
We rule in the negative.
We first address the procedural issues. We stress the settled rule that a petition for review on certiorari under Rule 45 of
the Rules of Court resolves only questions of law, not questions of fact. 15 A question, to be one of law, must not examine
the probative value of the evidence presented by the parties;16 otherwise, the question is one of fact.17Whether an express
trust exists in this case is a question of fact whose resolution is not proper in a petition under Rule 45. Reinforcing this is
the equally settled rule that factual findings of the lower tribunals are conclusive on the parties and are not generally
reviewable by this Court,18 especially when, as here, the CA affirmed these findings. The plain reason is that this Court is
not a trier of facts.19 While this Court has, at times, permitted exceptions from the restriction, 20 we find that none of these
exceptions obtain in the present case.

Second, we find that the petitioner changed the theory of his case. The petitioner argued before the lower courts that an
express trust exists between PALII as the trustee and the HEIRS as the trustor-beneficiary.21 The petitioner now asserts that
the express trust exists between PALII as the trustor and UCPB as the trustee, with the HEIRS as the beneficiaries. 22 At this
stage of the case, such change of theory is simply not allowed as it violates basic rules of fair play, justice and due process.
Our rulings are clear - "a party who deliberately adopts a certain theory upon which the case was decided by the lower
court will not be permitted to change [it] on appeal";23 otherwise, the lower courts will effectively be deprived of the
opportunity to decide the merits of the case fairly.24 Besides, courts of justice are devoid of jurisdiction to resolve a
question not in issue.25 For these reasons, the petition must fail. Independently of these, the petition must still be denied.
No express trust exists; UCPB exercised the required diligence in handling the ACCOUNT; petitioner has no cause
of action against UCPB
A trust, either express or implied,26 is the fiduciary relationship "x x x between one person having an equitable ownership
of property and another person owning the legal title to such property, the equitable ownership of the former entitling
him to the performance of certain duties and the exercise of certain powers by the latter."27 Express or direct trusts are
created by the direct and positive acts of the trustor or of the parties. 28 No written words are required to create an express
trust. This is clear from Article 1444 of the Civil Code, 29 but, the creation of an express trust must be firmly shown; it cannot
be assumed from loose and vague declarations or circumstances capable of other interpretations. 30
In Rizal Surety & Insurance Co. v. CA,31 we laid down the requirements before an express trust will be recognized:
Basically, these elements include a competent trustor and trustee, an ascertainable trust res, and sufficiently certain
beneficiaries. xxx each of the above elements is required to be established, and, if any one of them is missing, it is
fatal to the trusts (sic). Furthermore, there must be a present and complete disposition of the trust property,
notwithstanding that the enjoyment in the beneficiary will take place in the future. It is essential, too, that the
purpose be an active one to prevent trust from being executed into a legal estate or interest, and one that is not in
contravention of some prohibition of statute or rule of public policy. There must also be some power of administration
other than a mere duty to perform a contract although the contract is for a thirdparty beneficiary. A declaration of
terms is essential, and these must be stated with reasonable certainty in order that the trustee may administer, and
that the court, if called upon so to do, may enforce, the trust. [emphasis ours]
Under these standards, we hold that no express trust was created. First, while an ascertainable trust res and sufficiently
certain beneficiaries may exist, a competent trustor and trustee do not. Second, UCPB, as trustee of the ACCOUNT, was
never under any equitable duty to deal with or given any power of administration over it. On the contrary, it was PALII that
undertook the duty to hold the title to the ACCOUNT for the benefit of the HEIRS. Third, PALII, as the trustor, did not have
the right to the beneficial enjoyment of the ACCOUNT. Finally, the terms by which UCPB is to administer the ACCOUNT
was not shown with reasonable certainty. While we agree with the petitioner that a trust’s beneficiaries need not be
particularly identified for a trust to exist, the intention to create an express trust must first be firmly established,
along with the other elements laid above; absent these, no express trust exists.
Contrary to the petitioner’s contention, PALII’s letters and UCPB’s records established UCPB’s participation as a mere
depositary of the proceeds of the investment. In the March 28, 1996 letter, PALII manifested its intention to pursue an
active role in and up to the turnover of those proceeds to their rightful owners, 32 while in the November 15, 1996 letter,
PALII begged the petitioner to trust it with the safekeeping of the investment proceeds and documents. 33 Had it been
PALII’s intention to create a trust in favor of the HEIRS, it would have relinquished any right or claim over the proceeds in
UCPB’s favor as the trustee. As matters stand, PALII never did.
UCPB’s records and the testimony of UCPB’s witness34 likewise lead us to the same conclusion. While the words "ITF
HEIRS" may have created the impression that a trust account was created, a closer scrutiny reveals that it is an ordinary
savings account.35 We give credence to UCPB’s explanation that the word "ITF" was merely used to distinguish the
ACCOUNT from PALII’s other accounts with UCPB. A trust can be created without using the word "trust" or "trustee," but
the mere use of these words does not automatically reveal an intention to create a trust. 36 If at all, these words showed a
trustee-beneficiary relationship between PALII and the HEIRS.
Contrary to the petitioner’s position, UCPB did not become a trustee by the mere opening of the
ACCOUNT.1âwphi1 While this may seem to be the case, by reason of the fiduciary nature of the bank’s relationship with
its depositors,37 this fiduciary relationship does not "convert the contract between the bank and its depositors from a
simple loan to a trust agreement, whether express or implied." 38 It simply means that the bank is obliged to observe "high
standards of integrity and performance" in complying with its obligations under the contract of simple loan. 39 Per Article
1980 of the Civil Code,40 a creditor-debtor relationship exists between the bank and its depositor.41 The savings deposit
agreement is between the bank and the depositor;42 by receiving the deposit, the bank impliedly agrees to pay upon
demand and only upon the depositor’s order.43
Since the records and the petitioner’s own admission showed that the ACCOUNT was opened by PALII, UCPB’s receipt of
the deposit signified that it agreed to pay PALII upon its demand and only upon its order. Thus, when UCPB allowed PALII
to withdraw from the ACCOUNT, it was merely performing its contractual obligation under their savings deposit
agreement. No negligence or bad faith44 can be imputed to UCPB for this action. As far as UCPB was concerned, PALII is

the account holder and not the HEIRS. As we held in Falton Iron Works Co. v. China Banking Corporation. 45 the bank’s duty
is to its creditor-depositor and not to third persons. Third persons, like the HEIRS here, who may have a right to the money
deposited, cannot hold the bank responsible unless there is a court order or garnishment. 46 The petitioner’s recourse is to
go before a court of competent jurisdiction to prove his valid right over the money deposited.
In these lights, we find the third assignment of error mooted. A cause of action requires that there be a right existing in
favor of the plaintiff, the defendant’s obligation to respect that right, and an act or omission of the defendant in breach of
that right.47 We reiterate that UCPB’s obligation was towards PALII as its creditor-depositor. While the HEIRS may have a
valid claim over the proceeds of the investment, the obligation to turn-over those proceeds lies with PALII. Since no trust
exists the petitioner’s complaint was correctly dismissed and the CA did not commit any reversible error in affirming the
RTC decision. One final note, the burden to prove the existence of an express trust lies with the petitioner. 48 For his failure
to discharge this burden, the petition must fail.
WHEREFORE, in view of these considerations, we hereby DENY the petition and AFFIRM the decision dated February 20,
2007 and the resolution dated July 31, 2007 of the Court of Appeals in CA-G.R. CV. No. 00257. Costs against the petitioner.
SO ORDERED:
3.
SPS. MOISES and CLEMENCIA ANDRADA, G.R. No. 156448 Promulgated: February 23,
Petitioners,- versus - PILHINO SALES 2011
CORPORATION, represented by its Branch
Manager, JOJO S. SAET,
Respondent.
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:
An appeal by petition for review on certiorari under Rule 45 shall raise only questions of law. Thus, the herein
petition for review must fail for raising a question essentially of fact.
Antecedents
On December 28, 1990, respondent Pilhino Sales Corporation (Pilhino) sued Jose Andrada, Jr. and his wife, Maxima, in the
Regional Trial Court in Davao City (RTC) to recover the principal sum of P240,863.00, plus interest and incidental charges
(Civil Case No. 20,489-90). Upon Pilhinos application, the RTC issued a writ of preliminary attachment, which came to be
implemented against a Hino truck and a Fuso truck both owned by Jose Andrada, Jr. However, the levies on attachment
were lifted after Jose filed a counter-attachment bond.
In due course, the RTC rendered a decision against Jose Andrada, Jr. and his wife. Pilhino opted to enforce the writ
of execution against the properties of the Andradas instead of claiming against the counter-attachment bond considering
that the premium on the bond had not been paid. As a result, the sheriff seized the Hino truck and sold it at the ensuing
public auction, with Pilhino as the highest bidder. However, the Hino truck could not be transferred to Pilhinos name due
to its having been already registered in the name of petitioner Moises Andrada. It appears that the Hino truck had been
meanwhile sold by Jose Andrada, Jr. to Moises Andrada, which sale was unknown to Pilhino, and that Moises had
mortgaged the truck to BA Finance Corporation (BA Finance) to secure his own obligation.
BA Finance sued Moises Andrada for his failure to pay the loan (Civil Case No. 5117). After a decision was rendered in the
action in favor of BA Finance, a writ of execution issued, by which the sheriff levied upon and seized the Hino truck while it
was in the possession of Pilhino and sold it at public auction, with BA Finance as the highest bidder.
Consequently, Pilhino instituted this action in the RTC in Davao City against Spouses Jose Andrada, Jr. and Maxima
Andrada, Spouses Moises Andrada and Clemencia Andrada, Jose Andrada, Sr., BA Finance, Land Transportation Office (in
Surallah, South Cotabato), and the Registrar of Deeds of General Santos City to annul the following: ( a) the deed of sale
between Jose Andrada, Jr. and Moises Andrada; (b) the chattel mortgage involving the Hino truck between Moises
Andrada and BA Finance; (c) the deed of conveyance executed by Jose Andrada, Jr. in favor of his father, Jose Andrada, Sr.,
involving a hard-top jeep; and (d) the certificate of registration of the Hino truck in the name of Moises Andrada as well as
the registration of the chattel mortgage with the Registry of Deeds of General Santos City. The action was docketed as
Civil Case No. 21,898-93.
Of the Andradas who were defendants in Civil Case No. 21,898-93, only Moises Andrada and his wife filed their responsive
pleading. Later on, Jose Andrada, Jr. and his wife and Pilhino submitted a compromise agreement dated August 20, 1993.
They submitted a second compromise agreement dated March 4, 1994 because the first was found to be defective and
incomplete. The RTC thereafter rendered a partial judgment on March 21, 1994 based on the second compromise
agreement. After that, further proceedings were taken in Civil Case No. 21,898-93 only with respect to Moises Andrada
and his wife, and BA Finance.
Moises Andrada and his wife averred as defenses that they had already acquired the Hino truck from Jose Andrada, Jr. free
from any lien or encumbrance prior to its seizure by the sheriff pursuant to the writ of execution issued in Civil Case No.
20,489-90; that their acquisition had been made in good faith, considering that at the time of the sale the preliminary
attachment had already been lifted; and that Pilhinos recourse was to proceed against the counter-attachment bond.
For its part, BA Finance claimed lack of knowledge of the truth of the material allegations of the complaint of Pilhino; and
insisted that the Hino truck had been validly mortgaged to it by Moises Andrada, the lawful owner, to secure his own valid
obligation.
On March 25, 1998, the RTC, citing the compromise agreement between Pilhino and Jose Andrada, Jr. that had settled all
the claims of Pilhino against Jose Andrada, Jr., and the good faith of Pilhino and BA Finance in filing their respective
actions, rendered its decision in Civil Case No. 21,898-93,[1] disposing:
WHEREFORE, judgment is rendered dismissing this case insofar as the spouses Moises Andrada and
Clemencia Andrada, Jose Andrada, Sr. and BA Finance Corporation, now accordingly BA Savings Bank,
including the counterclaims.
SO ORDERED.
Spouses Moises and Clemencia Andrada appealed the decision rendered on March 25, 1998 to the extent that the RTC
thereby: (a) dismissed their counterclaim; (b) declared that the deed of sale of the Hino truck between Jose Andrada, Jr.
and Moises Andrada had been simulated; and (c) approved the compromise agreement between Pilhino and Spouses Jose
Andrada, Jr. and Maxima Andrada.
On December 13, 2001, the Court of Appeals (CA) promulgated its decision, as follows: [2]
WHEREFORE, the judgment appealed from is AFFIRMED with the modification that the sale of the
Hino truck by defendant Jose Andrada, Jr. in favor of defendant-appellant Moises Andrada is declared
valid, subject to the rights of BA Finance as mortgagee and highest bidder.
SO ORDERED.
Spouses Moises and Clemencia Andrada are now before the Court via petition for review on certiorari to pose the
following issues: [3]
1. Whether or not Pilhino should be held liable for the damages the petitioners sustained from Pilhinos
levy on execution upon the Hino truck under Civil Case No. 20,489-90; and
2. Whether or not Pilhino was guilty of bad faith when it proceeded with the levy on execution upon
the Hino truck owned by Moises Andrada.
Ruling
We find no merit in the petition for review.
The petitioners assail the decision promulgated by the CA to the extent that it denied their claim for the damages they
had sought by way of counterclaim. They anchored their claim on Article 21 of the Civil Code, which provides that 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 damage.
Article 21 of the Civil Code, in conjunction with Article 19 of the Civil Code, is part of the cause of action known in
this jurisdiction as abuse of rights. The elements of abuse of rights are: ( a) there is a legal right or duty; (b) exercised in bad
faith; and (c) for the sole intent of prejudicing or injuring another.[4]
In its assailed decision, the CA found that Pilhino had acted in good faith in bringing Civil Case No. 21,898-93 to
annul the deed of sale involving the Hino truck executed by Jose Andrada, Jr. in favor of Moises Andrada, considering that
Pilhino had believed that the sale in favor of defendants-appellants [had been] resorted to so that Jose Andrada [might]
evade his obligations.[5] The CA concluded that no remedy was available for any damages that the petitioners sustained
from the filing of Civil Case No. 21,898-93 against them because the law affords no remedy for such damages resulting
from an act which does not amount to a legal injury or wrong.[6]
Worthy to note is that the CAs finding and conclusion rested on the RTCs own persuasion that the sale of the
Hino truck to Moises Andrada had been simulated.[7]
Yet, the petitioners still insist in this appeal that both lower courts erred in their conclusion on the absence of bad
faith on the part of Pilhino.
We cannot side with the petitioners. Their insistence, which represents their disagreement with the CAs
declaration that the second and third elements of abuse of rights, supra, were not established, requires the consideration
and review of factual issues. Hence, this appeal cannot succeed, for an appeal by petition for review on certiorari cannot
determine factual issues. In the exercise of its power of review, the Court is not a trier of facts and does not normally
undertake the re-examination of the evidence presented by the contending parties during the trial. Perforce, the findings
of fact by the CA are conclusive and binding on the Court. This restriction of the review to questions of law has been
institutionalized in Section 1, Rule 45 of the Rules of Court, viz:
Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court
or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review
on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (1a,
2a)[8]
It is true that the Court has, at times, allowed exceptions from the restriction. Among the recognized exceptions
are the following, to wit:[9]
(a) When the findings are grounded entirely on speculation, surmises, or conjectures;
(b) When the inference made is manifestly mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to
the admissions of both the appellant and the appellee;
(g) When the CAs findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific evidence on which they are based;
(i) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not
disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record; or
(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion.
However, the circumstances of this case do not warrant reversing or modifying the findings of the CA, which are
consistent with the established facts. Verily, the petitioners did not prove the concurrence of the elements of abuse of
rights.
The petitioners further seek attorneys fees based on Article 2208 (4) of the Civil Code, which provides that in the
absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs, cannot be recovered, except xxx
(4) in cases of clearly unfounded civil action or proceeding against the plaintiff xxx.
The petitioners are not entitled to attorneys fees.
It is well accepted in this jurisdiction that no premium should be placed on the right to litigate and that not every
winning party is entitled to an automatic grant of attorneys fees.[10] Indeed, before the effectivity of the new Civil Code,
such fees could not be recovered in the absence of a stipulation.[11] It was only with the advent of the new Civil Codethat
the right to collect attorneys fees in the instances mentioned in Article 2208 was recognized, [12] and such fees are now
included in the concept of actual damages.[13] One such instance is where the defendant is guilty of gross and evident bad
faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim. [14] This is a corollary of the general
principle expressed in Article 19 of the Civil Code that everyone must, in the performance of his duties, observe honesty
and good faith and the rule embodied in Article 1170 that anyone guilty of fraud (bad faith) in the performance of his
obligation shall be liable for damages.

But, as noted by the Court in Morales v. Court of Appeals,[15] the award of attorneys fees is the exception rather
than the rule. The power of a court to award attorneys fees under Article 2208 of the Civil Code demands factual, legal,
and equitable justification; its basis cannot be left to speculation and conjecture. [16] The general rule is that attorneys fees
cannot be recovered as part of damages because of the policy that no premium should be placed on the right to
litigate.[17]
Herein, the element of bad faith on the part of Pilhino in commencing and prosecuting Civil Case No. 21,898-93,
which was necessary to predicate the lawful grant of attorneys fees based on Article 2208 (4) of the Civil Code, was not
established. Accordingly, the petitioners demand for attorneys fees must fail.
WHEREFORE, we deny the petition for review on certiorari for its lack of merit, and affirm the decision of the
Court of Appeals.
SO ORDERED.
4. G.R. No. 158143 September 21, 2011 PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Petitioner,
vs. ANTONIO B. BALMACEDA and ROLANDO N. RAMOS, Respondents.
DECISION
BRION, J.:
Before us is a petition for review on certiorari,1 filed by the Philippine Commercial International Bank2 (Bank or PCIB), to
reverse and set aside the decision3 dated April 29, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 69955. The CA
overturned the September 22, 2000 decision of the Regional Trial Court (RTC) of Makati City, Branch 148, in Civil Case No.
93-3181, which held respondent Rolando Ramos liable to PCIB for the amount of ₱895,000.00.
FACTUAL ANTECEDENTS
On September 10, 1993, PCIB filed an action for recovery of sum of money with damages before the RTC against Antonio
Balmaceda, the Branch Manager of its Sta. Cruz, Manila branch. In its complaint, PCIB alleged that between 1991 and 1993,
Balmaceda, by taking advantage of his position as branch manager, fraudulently obtained and encashed 31 Manager’s
checks in the total amount of Ten Million Seven Hundred Eighty Two Thousand One Hundred Fifty Pesos (₱10,782,150.00).
On February 28, 1994, PCIB moved to be allowed to file an amended complaint to implead Rolando Ramos as one of the
recipients of a portion of the proceeds from Balmaceda’s alleged fraud. PCIB also increased the number of fraudulently
obtained and encashed Manager’s checks to 34, in the total amount of Eleven Million Nine Hundred Thirty Seven
Thousand One Hundred Fifty Pesos (₱11,937,150.00). The RTC granted this motion.
Since Balmaceda did not file an Answer, he was declared in default. On the other hand, Ramos filed an Answer denying
any knowledge of Balmaceda’s scheme. According to Ramos, he is a reputable businessman engaged in the business of
buying and selling fighting cocks, and Balmaceda was one of his clients. Ramos admitted receiving money from
Balmaceda as payment for the fighting cocks that he sold to Balmaceda, but maintained that he had no knowledge of the
source of Balmaceda’s money.
THE RTC DECISION
On September 22, 2000, the RTC issued a decision in favor of PCIB, with the following dispositive portion:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants as
follows:
1. Ordering defendant Antonio Balmaceda to pay the amount of ₱11,042,150.00 with interest thereon at the legal
rate from [the] date of his misappropriation of the said amount until full restitution shall have been made[.]
2. Ordering defendant Rolando Ramos to pay the amount of ₱895,000.00 with interest at the legal rate from the
date of misappropriation of the said amount until full restitution shall have been made[.]
3. Ordering the defendants to pay plaintiff moral damages in the sum of ₱500,000.00 and attorney’s fees in the
amount of ten (10%) percent of the total misappropriated amounts sought to be recovered.
4. Plus costs of suit.
SO ORDERED.4
From the evidence presented, the RTC found that Balmaceda, by taking undue advantage of his position and authority as
branch manager of the Sta. Cruz, Manila branch of PCIB, successfully obtained and misappropriated the bank’s funds by
falsifying several commercial documents. He accomplished this by claiming that he had been instructed by one of the
Bank’s corporate clients to purchase Manager’s checks on its behalf, with the value of the checks to be debited from the
client’s corporate bank account. First, he would instruct the Bank staff to prepare the application forms for the purchase of
Manager’s checks, payable to several persons. Then, he would forge the signature of the client’s authorized representative
on these forms and sign the forms as PCIB’s approving officer. Finally, he would have an authorized officer of PCIB issue
the Manager’s checks. Balmaceda would subsequently ask his subordinates to release the Manager’s checks to him,
claiming that the client had requested that he deliver the checks.5 After receiving the Manager’s checks, he encashed them
by forging the signatures of the payees on the checks.
In ruling that Ramos acted in collusion with Balmaceda, the RTC noted that although the Manager’s checks payable to
Ramos were crossed checks, Balmaceda was still able to encash the checks. 6 After Balmaceda encashed three of these
Manager’s checks, he deposited most of the money into Ramos’ account. 7 The RTC concluded that from the
₱11,937,150.00 that Balmaceda misappropriated from PCIB, ₱895,000.00 actually went to Ramos. Since the RTC disbelieved
Ramos’ allegation that the sum of money deposited into his Savings Account (PCIB, Pasig branch) were proceeds from the
sale of fighting cocks, it held Ramos liable to pay PCIB the amount of ₱895,000.00.
THE COURT OF APPEALS DECISION
On appeal, the CA dismissed the complaint against Ramos, holding that no sufficient evidence existed to prove that
Ramos colluded with Balmaceda in the latter’s fraudulent manipulations.8
According to the CA, the mere fact that Balmaceda made Ramos the payee in some of the Manager’s checks does not
suffice to prove that Ramos was complicit in Balmaceda’s fraudulent scheme. It observed that other persons were also
named as payees in the checks that Balmaceda acquired and encashed, and PCIB only chose to go after Ramos. With
PCIB’s failure to prove Ramos’ actual participation in Balmaceda’s fraud, no legal and factual basis exists to hold him liable.
The CA also found that PCIB acted illegally in freezing and debiting ₱251,910.96 from Ramos’ bank account. The CA thus
decreed:
WHEREFORE, the appeal is granted. The Decision of the trial court rendered on September 22, 2000[,] insofar as appellant
Ramos is concerned, is SET ASIDE, and the complaint below against him is DISMISSED.
Appellee is hereby ordered to release the amount of ₱251,910.96 to appellant Ramos plus interest at [the] legal rate
computed from September 30, 1993 until appellee shall have fully complied therewith.
Appellee is likewise ordered to pay appellant Ramos the following:
a) ₱50,000.00 as moral damages
b) ₱50,000.00 as exemplary damages, and
c) ₱20,000.00 as attorney’s fees.
No costs.
SO ORDERED.9
THE PETITION
In the present petition, PCIB avers that:
THE APPELLATE COURT ERRED IN HOLDING THAT THERE IS NO EVIDENCE TO HOLD THAT RESPONDENT RAMOS
ACTED IN COMPLICITY WITH RESPONDENT BALMACEDA
II
THE APPELLATE COURT ERRED IN ORDERING THE PETITIONER TO RELEASE THE AMOUNT OF ₱251,910.96 TO
RESPONDENT RAMOS AND TO PAY THE LATTER MORAL AND EXEMPLARY DAMAGES AND ATTORNEY’S FEES10
PCIB contends that the circumstantial evidence shows that Ramos had knowledge of, and acted in complicity with
Balmaceda in, the perpetuation of the fraud. Ramos’ explanation that he is a businessman and that he received the
Manager’s checks as payment for the fighting cocks he sold to Balmaceda is unconvincing, given the large sum of money
involved. While Ramos presented evidence that he is a reputable businessman, this evidence does not explain why the
Manager’s checks were made payable to him in the first place.

PCIB maintains that it had the right to freeze and debit the amount of ₱251,910.96 from Ramos’ bank account, even
without his consent, since legal compensation had taken place between them by operation of law. PCIB debited Ramos’
bank account, believing in good faith that Ramos was not entitled to the proceeds of the Manager’s checks and was
actually privy to the fraud perpetrated by Balmaceda. PCIB cannot thus be held liable for moral and exemplary damages.
OUR RULING
We partly grant the petition.
At the outset, we observe that the petition raises mainly questions of fact whose resolution requires the re-examination of
the evidence on record. As a general rule, petitions for review on certiorari only involve questions of law. 11 By way of
exception, however, we can delve into evidence and the factual circumstance of the case when the findings of fact in the
tribunals below (in this case between those of the CA and of the RTC) are conflicting. When the exception applies, we are
given latitude to review the evidence on record to decide the case with finality.12
Ramos’ participation in Balmaceda’s scheme not proven
From the testimonial and documentary evidence presented, we find it beyond question that Balmaceda, by taking
advantage of his position as branch manager of PCIB’s Sta. Cruz, Manila branch, was able to apply for and obtain
Manager’s checks drawn against the bank account of one of PCIB’s clients. The unsettled question is whether Ramos, who
received a portion of the money that Balmaceda took from PCIB, should also be held liable for the return of this money to
the Bank.
PCIB insists that it presented sufficient evidence to establish that Ramos colluded with Balmaceda in the scheme to
fraudulently secure Manager’s checks and to misappropriate their proceeds. Since Ramos’ defense – anchored on mere
denial of any participation in Balmaceda’s wrongdoing – is an intrinsically weak defense, it was error for the CA to
exonerate Ramos from any liability.
In civil cases, the party carrying the burden of proof must establish his case by a preponderance of evidence, or evidence
which, to the court, is more worthy of belief than the evidence offered in opposition. 13 This Court, in Encinas v. National
Bookstore, Inc.,14 defined "preponderance of evidence" in the following manner:
"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either side and is usually
considered to be synonymous with the term "greater weight of the evidence" or "greater weight of the credible evidence."
Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth. It is evidence which is
more convincing to the court as worthy of belief than that which is offered in opposition thereto.
The party, whether the plaintiff or the defendant, who asserts the affirmative of an issue has the onus to prove his
assertion in order to obtain a favorable judgment, subject to the overriding rule that the burden to prove his cause of
action never leaves the plaintiff. For the defendant, an affirmative defense is one that is not merely a denial of an essential
ingredient in the plaintiff's cause of action, but one which, if established, will constitute an "avoidance" of the claim. 15
Thus, PCIB, as plaintiff, had to prove, by preponderance of evidence, its positive assertion that Ramos conspired with
Balmaceda in perpetrating the latter’s scheme to defraud the Bank. In PCIB’s estimation, it successfully accomplished this
through the submission of the following evidence:
[1] Exhibits "A," "D," "PPPP," "QQQQ," and "RRRR" and their submarkings, the application forms for MCs, show
that [these MCs were applied for in favor of Ramos;]
[2] Exhibits "K," "N," "SSSS," "TTTT," and "UUUU" and their submarkings prove that the MCs were issued in favor of
x x x Ramos[; and]
[3] [T]estimonies of the witness for [PCIB].16
We cannot accept these submitted pieces of evidence as sufficient to satisfy the burden of proof that PCIB carries as
plaintiff.
On its face, all that PCIB’s evidence proves is that Balmaceda used Ramos’ name as a payee when he filled up the
application forms for the Manager’s checks. But, as the CA correctly observed, the mere fact that Balmaceda made Ramos
the payee on some of the Manager’s checks is not enough basis to conclude that Ramos was complicit in Balmaceda’s
fraud; a number of other people were made payees on the other Manager’s checks yet PCIB never alleged them to be
liable, nor did the Bank adduce any other evidence pointing to Ramos’ participation that would justify his separate
treatment from the others. Also, while Ramos is Balmaceda’s brother-in-law, their relationship is not sufficient, by itself, to
render Ramos liable, absent concrete proof of his actual participation in the fraudulent scheme.

Moreover, the evidence on record clearly shows that Balmaceda acted on his own when he applied for the Manager’s
checks against the bank account of one of PCIB’s clients, as well as when he encashed the fraudulently acquired Manager’s
checks.
Mrs. Elizabeth Costes, the Area Manager of PCIB at the time of the relevant events, testified that Balmaceda committed all
the acts necessary to obtain the unauthorized Manager’s checks – from filling up the application form by forging the
signature of the client’s representative, to forging the signatures of the payees in order to encash the checks. As Mrs.
Costes stated in her testimony:
Q: I am going into [these] particular instances where you said that Mr. Balmaceda [has] been making unauthorized
withdrawals from particular account of a client or a client of yours at Sta. Cruz branch. Would you tell us how he effected
his unauthorized withdrawals?
A: He prevailed upon the domestic remittance clerk to prepare the application of a Manager’s check which [has] been
debited to a client’s account. This particular Manager’s check will be payable to a certain individual thru his account as the
instruction of the client.
Q: What was your findings in so far as the particular alleged instruction of a client is concerned?
A: We found out that he forged the signature of the client.
Q: On that particular application?
A: Yes sir.
Q: Showing to you several applications for Manager’s Check previously attached as Annexes "A, B, C, D and E["] of the
complaint. Could you please tell us where is that particular alleged signature of a client applying for the Manager’s check
which you claimed to have been forged by Mr. Balmaceda?
A: Here sir.
xxxx
Q: After the accomplishment of this application form as you stated Mrs. witness, do you know what happened to the
application form?
A: Before that application form is processed it goes to several stages. Here for example this was signed supposed to be by
the client and his signature representing that, he certified the signature based on their records to be authentic.
Q: When you said he to whom are you referring to?
A: Mr. Balmaceda. And at the same time he approved the transaction.
xxxx
Q: Do you know if the corresponding checks applied for in the application forms were issued?
A: Yes sir.
Q: Could you please show us where these checks are now, the one applied for in Exhibit "A" which is in the amount of
₱150,000.00, where is the corresponding check?
A: Rolando Ramos dated December 26, 1991 and one of the signatories with higher authority, this is Mr. Balmaceda’s
signature.
Q: In other words he is likewise approving signatory to the Manager’s check?
A: Yes sir. This is an authority that the check [has] been encashed.
Q: In other words this check issued to Rolando Ramos dated December 26, 1991 is a cross check but nonetheless he
allowed to encash by granting it.
Could you please show us?
ATTY. PACES: Witness pointing to an initial of the defendant Antonio Balmaceda, the notation cross check.
A: And this is his signature.
xxxx
Q: How about the check corresponding to Exhibit E-2 which is an application for ₱125,000.00 for a certain Rolando Ramos.
Do you have the check?
A: Yes sir.
ATTY. PACES: Witness producing a check dated December 19, 1991 the amount of ₱125,000.00 payable to certain Rolando
Ramos.
Q: Can you tell us whether the same modus operandi was ad[o]pted by Mr. Balmaceda in so far as he is concerned?
A: Yes sir he is also the right signer and he authorized the cancellation of the cross check. 17 (emphasis ours)
xxxx
Q: These particular checks [Mrs.] witness in your findings, do you know if Mr. Balmaceda [has] again any participation in
these checks?
A: He is also the right signer and approved officer and he was authorized to debit on file.
xxxx
Q: And do you know if these particular checks marked as Exhibit G-2 to triple FFF were subsequently encashed?
A: Yes sir.
Q: Were you able to find out who encashed?
A: Mr. Balmaceda himself and besides he approved the encashment because of the signature that he allowed the
encashment of the check.
xxxx
Q: Do you know if this particular person having in fact withdraw of received the proceeds of [these] particular checks, the
payee?
A: No sir.
Q: It was all Mr. Balmaceda dealing with you?
A: Yes sir.
Q: In other words it would be possible that Mr. Balmaceda himself gotten the proceeds of the checks by forging the
payees signature?
A: Yes sir.18 (emphases ours)
Mrs. Nilda Laforteza, the Commercial Account Officer of PCIB’s Sta. Cruz, Manila branch at the time the events of this case
occurred, confirmed Mrs. Costes’ testimony by stating that it was Balmaceda who forged Ramos’ signature on the
Manager’s checks where Ramos was the payee, so as to encash the amounts indicated on the checks.19Mrs. Laforteza also
testified that Ramos never went to the PCIB, Sta. Cruz, Manila branch to encash the checks since Balmaceda was the one
who deposited the checks into Ramos’ bank account. As revealed during Mrs. Laforteza’s cross-examination:
Q: Mrs. Laforteza, these checks that were applied for by Mr. Balmaceda, did you ever see my client go to the bank to
encash these checks?
A: No it is Balmaceda who is depositing in his behalf.
Q: Did my client ever call up the bank concerning this amount?
A: Yes he is not going to call PCIBank Sta. Cruz branch because his account is maintained at Pasig.
Q: So Mr. Balmaceda was the one who just remitted or transmitted the amount that you claimed [was sent] to the account
of my client?
A: Yes.20 (emphases ours)
Even Mrs. Rodelia Nario, presented by PCIB as its rebuttal witness to prove that Ramos encashed a Manager’s check for
₱480,000.00, could only testify that the money was deposited into Ramos’ PCIB bank account. She could not attest that
Ramos himself presented the Manager’s check for deposit in his bank account. 21 These testimonies clearly dispute PCIB’s
theory that Ramos was instrumental in the encashment of the Manager’s checks.
We also find no reason to doubt Ramos’ claim that Balmaceda deposited these large sums of money into his bank account
as payment for the fighting cocks that Balmaceda purchased from him. Ramos presented two witnesses – Vicente
Cosculluela and Crispin Gadapan – who testified that Ramos previously engaged in the business of buying and selling
fighting cocks, and that Balmaceda was one of Ramos’ biggest clients.
Quoting from the RTC decision, PCIB stresses that Ramos’ own witness and business partner, Cosculluela, testified that the
biggest net profit he and Ramos earned from a single transaction with Balmaceda amounted to no more than
₱100,000.00, for the sale of approximately 45 fighting cocks.22 In PCIB’s view, this testimony directly contradicts Ramos’
assertion that he received approximately ₱400,000.00 from his biggest transaction with Balmaceda. To PCIB, the testimony
also renders questionable Ramos’ assertion that Balmaceda deposited large amounts of money into his bank account as
payment for the fighting cocks.
On this point, we find that PCIB misunderstood Cosculluela’s testimony. A review of the testimony shows that Cosculluela
specifically referred to the net profit that they earned from the sale of the fighting cocks; 23 PCIB apparently did not take
into account the capital, transportation and other expenses that are components of these transactions. Obviously, in sales
transactions, the buyer has to pay not only for the value of the thing sold, but also for the shipping costs and other
incidental costs that accompany the acquisition of the thing sold. Thus, while the biggest net profit that Ramos and
Cosculluela earned in a single transaction amounted to no more than ₱100,000.00,24 the inclusion of the actual acquisition
costs of the fighting cocks, the transportation expenses (i.e., airplane tickets from Bacolod or Zamboanga to Manila) and
other attendant expenses could account for the ₱400,000.00 that Balmaceda deposited into Ramos’ bank account.
Given that PCIB failed to establish Ramos’ participation in Balmaceda’s scheme, it was not even necessary for Ramos to
provide an explanation for the money he received from Balmaceda. Even if the evidence adduced by the plaintiff appears
stronger than that presented by the defendant, a judgment cannot be entered in the plaintiff’s favor if his evidence still
does not suffice to sustain his cause of action;25 to reiterate, a preponderance of evidence as defined must be established
to achieve this result.
PCIB itself at fault as employer
In considering this case, one point that cannot be disregarded is the significant role that PCIB played which contributed to
the perpetration of the fraud. We cannot ignore that Balmaceda managed to carry out his fraudulent scheme primarily
because other PCIB employees failed to carry out their assigned tasks – flaws imputable to PCIB itself as the employer.
Ms. Analiza Vega, an accounting clerk, teller and domestic remittance clerk working at the PCIB, Sta. Cruz, Manila branch
at the time of the incident, testified that Balmaceda broke the Bank’s protocol when he ordered the Bank’s employees to
fill up the application forms for the Manager’s checks, to be debited from the bank account of one of the bank’s clients,
without providing the necessary Authority to Debit from the client. 26 PCIB also admitted that these Manager’s checks were
subsequently released to Balmaceda, and not to the client’s representative, based solely on Balmaceda’s word that the
client had tasked him to deliver these checks.27
Despite Balmaceda’s gross violations of bank procedures – mainly in the processing of the applications for Manager’s
checks and in the releasing of the Manager’s checks – Balmaceda’s co-employees not only turned a blind eye to his
actions, but actually complied with his instructions. In this way, PCIB’s own employees were unwitting accomplices in
Balmaceda’s fraud.

Another telling indicator of PCIB’s negligence is the fact that it allowed Balmaceda to encash the Manager’s checks that
were plainly crossed checks. A crossed check is one where two parallel lines are drawn across its face or across its
corner.28 Based on jurisprudence, the crossing of a check has the following effects: (a) the check may not be encashed but
only deposited in the bank; (b) the check may be negotiated only once — to the one who has an account with the bank;
and (c) the act of crossing the check serves as a warning to the holder that the check has been issued for a definite
purpose and he must inquire if he received the check pursuant to this purpose; otherwise, he is not a holder in due
course.29 In other words, the crossing of a check is a warning that the check should be deposited only in the account of
the payee. When a check is crossed, it is the duty of the collecting bank to ascertain that the check is only deposited to the
payee’s account.30 In complete disregard of this duty, PCIB’s systems allowed Balmaceda to encash 26 Manager’s checks
which were all crossed checks, or checks payable to the "payee’s account only."
The General Banking Law of 200031 requires of banks the highest standards of integrity and performance. The banking
business is impressed with public interest. Of paramount importance is the trust and confidence of the public in general in
the banking industry. Consequently, the diligence required of banks is more than that of a Roman pater familias or a good
father of a family.32 The highest degree of diligence is expected.33
While we appreciate that Balmaceda took advantage of his authority and position as the branch manager to commit these
acts, this circumstance cannot be used to excuse the manner the Bank – through its employees –handled its clients’ bank
accounts and thereby ignored established bank procedures at the branch manager’s mere order. This lapse is made all the
more glaring by Balmaceda’s repetition of his modus operandi 33 more times in a period of over one year by the Bank’s
own estimation. With this kind of record, blame must be imputed on the Bank itself and its systems, not solely on the
weakness or lapses of individual employees.
Principle of unjust enrichment not applicable
PCIB maintains that even if Ramos did not collude with Balmaceda, it still has the right to recover the amounts unjustly
received by Ramos pursuant to the principle of unjust enrichment. This principle is embodied in Article 22 of the Civil Code
which provides:
Article 22. Every person who through an act of performance by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just or legal ground, shall return the same to him.
To have a cause of action based on unjust enrichment, we explained in University of the Philippines v. Philab Industries,
Inc.34 that:
Unjust enrichment claims do not lie simply because one party benefits from the efforts or obligations of others, but
instead it must be shown that a party was unjustly enriched in the sense that the term unjustly could mean illegally or
unlawfully.
Moreover, to substantiate a claim for unjust enrichment, the claimant must unequivocally prove that another party
knowingly received something of value to which he was not entitled and that the state of affairs are such that it
would be unjust for the person to keep the benefit. Unjust enrichment is a term used to depict result or effect of failure
to make remuneration of or for property or benefits received under circumstances that give rise to legal or equitable
obligation to account for them; to be entitled to remuneration, one must confer benefit by mistake, fraud, coercion, or
request. Unjust enrichment is not itself a theory of reconvey. Rather, it is a prerequisite for the enforcement of the doctrine
of restitution.35 (emphasis ours)
Ramos cannot be held liable to PCIB on account of unjust enrichment simply because he received payments out of money
secured by fraud from PCIB. To hold Ramos accountable, it is necessary to prove that he received the money from
Balmaceda, knowing that he (Ramos) was not entitled to it. PCIB must also prove that Ramos, at the time that he received
the money from Balmaceda, knew that the money was acquired through fraud. Knowledge of the fraud is the link between
Ramos and PCIB that would obligate Ramos to return the money based on the principle of unjust enrichment.
However, as the evidence on record indicates, Ramos accepted the deposits that Balmaceda made directly into his bank
account, believing that these deposits were payments for the fighting cocks that Balmaceda had purchased. Significantly,
PCIB has not presented any evidence proving that Ramos participated in, or that he even knew of, the fraudulent sources
of Balmaceda’s funds.
PCIB illegally froze and debited Ramos’ assets
We also find that PCIB acted illegally in freezing and debiting Ramos’ bank account. In BPI Family Bank v. Franco, 36 we
cautioned against the unilateral freezing of bank accounts by banks, noting that:
More importantly, [BPI Family Bank] does not have a unilateral right to freeze the accounts of Franco based on its mere
suspicion that the funds therein were proceeds of the multi-million peso scam Franco was allegedly involved in. To grant
[BPI Family Bank], or any bank for that matter, the right to take whatever action it pleases on deposits which it supposes
are derived from shady transactions, would open the floodgates of public distrust in the banking industry. 37

We see no legal merit in PCIB’s claim that legal compensation took place between it and Ramos, thereby warranting the
automatic deduction from Ramos’ bank account. For legal compensation to take place, two persons, in their own right,
must first be creditors and debtors of each other.38 While PCIB, as the depositary bank, is Ramos’ debtor in the amount of
his deposits, Ramos is not PCIB’s debtor under the evidence the PCIB adduced. PCIB thus had no basis, in fact or in law, to
automatically debit from Ramos’ bank account.
On the award of damages
Although PCIB’s act of freezing and debiting Ramos’ account is unlawful, we cannot hold PCIB liable for moral and
exemplary damages. Since a contractual relationship existed between Ramos and PCIB as the depositor and the depositary
bank, respectively, the award of moral damages depends on the applicability of Article 2220 of the Civil Code, which
provides:
Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant
acted fraudulently or in bad faith. [emphasis ours]
Bad faith does not simply connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity
and conscious commission of a wrong; it partakes of the nature of fraud.39
As the facts of this case bear out, PCIB did not act out of malice or bad faith when it froze Ramos’ bank account and
subsequently debited the amount of ₱251,910.96 therefrom. While PCIB may have acted hastily and without regard to its
primary duty to treat the accounts of its depositors with meticulous care and utmost fidelity, 40 we find that its actions were
propelled more by the need to protect itself, and not out of malevolence or ill will. One may err, but error alone is not a
ground for granting moral damages.41
We also disallow the award of exemplary damages. Article 2234 of the Civil Code requires a party to first prove that he is
entitled to moral, temperate or compensatory damages before he can be awarded exemplary damages.1âwphi1 Since no
reason exists to award moral damages, so too can there be no reason to award exemplary damages.
We deem it just and equitable, however, to uphold the award of attorney’s fees in Ramos’ favor. Taking into consideration
the time and efforts involved that went into this case, we increase the award of attorney’s fees from ₱20,000.00 to
₱75,000.00.
WHEREFORE, the petition is PARTIALLY GRANTED. We AFFIRM the decision of the Court of Appeals dated April 29,
2003 in CA-G.R. CV No. 69955 with the MODIFICATION that the award of moral and exemplary damages in favor of
Rolando N. Ramos is DELETED, while the award of attorney’s fees is INCREASED to ₱75,000.00. Costs against the
Philippine Commercial International Bank.
SO ORDERED.
5.
NANCY T. LORZANO, G.R. No. 189647
Petitioner,- versus -JUAN TABAYAG, JR., Promulgated: February 6, 2012
Respondent.
x------------------------------------------------------------------------------------x
DECISION
REYES, J.:
Nature of the Petition
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Nancy T. Lorzano (petitioner) assailing
the Court of Appeals (CA) Decision[1] dated March 18, 2009 and Resolution[2] dated September 16, 2009 in CA-G.R. CV No.
87762 entitled Juan Tabayag, Jr. v. Nancy T. Lorzano.
The Antecedent Facts
The instant case stemmed from an amended complaint[3] for annulment of document and reconveyance filed by
Juan Tabayag, Jr. (respondent) against the petitioner, docketed as Civil Case No. Ir-3286, with the Regional Trial Court
(RTC) of Iriga City.
The petitioner and the respondent are two of the children of the late Juan Tabayag (Tabayag) who died on June 2,
1992. Tabayag owned a parcel of land situated in Sto. Domingo, Iriga City (subject property). Right after the burial of their
father, the petitioner allegedly requested from her siblings that she be allowed to take possession of and receive the

income generated by the subject property until after her eldest son could graduate from college. The petitioners siblings
acceded to the said request.
After the petitioners eldest son finished college, her siblings asked her to return to them the possession of the
subject property so that they could partition it among themselves. However, the petitioner refused to relinquish her
possession of the subject property claiming that she purchased the subject property from their father as evidenced by a
Deed of Absolute Sale of Real Property[4] executed by the latter on May 25, 1992.
The respondent claimed that their father did not execute the said deed of sale. He pointed out that the signature
of their father appearing in the said deed of sale was a forgery as the same is markedly different from the real signature of
Tabayag.
Further, the respondent asserted that the said deed of sale was acknowledged before a person who was not a
duly commissioned Notary Public. The deed of sale was acknowledged by the petitioner before a certain Julian P. Cabaes
(Cabaes) on May 25, 1992 at Iriga City. However, as per the Certification[5] issued by the Office of the Clerk of Court of the
RTC on May 16, 2002, Cabaes has never been commissioned as a Notary Public for and in the Province of Camarines
Sur and in the Cities of Iriga and Naga.
The respondent alleged that the petitioner purposely forged the signature of Tabayag in the said deed of sale to deprive
him and their other siblings of their share in the subject property. He then averred that the subject property was already
covered by Original Certificate of Title (OCT) No. 1786[6] issued by the Register of Deeds of Iriga City on January 9, 2001
registered under the name of the petitioner. OCT No. 1786 was issued pursuant to Free Patent No. 051716 which was
procured by the petitioner on June 24, 1996.
For her part, the petitioner maintained she is the owner of the subject parcel of land having purchased the same from
Tabayag as evidenced by the May 25, 1992 deed of sale. Further, the petitioner asserted that the respondent failed to
establish that the signature of Tabayag appearing on the said deed of sale was a forgery considering that it was not
submitted for examination by a handwriting expert.
The RTC Decision
On April 28, 2006, the RTC rendered an Amended Decision[7] the decretal portion of which reads:
WHEREFORE, Judgment is hereby rendered[:]
a. Declaring the supposed Deed of Sale null and void and of no legal effect;
b. Ordering the [petitioner] to reconvey to the heirs of the late Juan Tabayag, Sr. the land
subject matter of this case[;]
c. Declaring the property described in the complaint and in the spurious deed of sale to be
owned in common by the heirs of Juan Tabayag, Sr. as part of their inheritance from said Juan
Tabayag, Sr[.];
d. Ordering [petitioner] to pay plaintiff the sum of One Hundred Thousand Pesos
(P100,000.00)by way of moral damages;
e. Ordering defendant to pay plaintiff the attorneys fees in the sum of Fifteen Thousand Pesos
(P15,000.00), based on quantum meruit;
f. Dismissing the counterclaim for lack of merit[;]
g. Costs against the defendant.
SO ORDERED.[8]
The RTC opined that a cursory comparison between the signature of Tabayag appearing on the said deed of sale
and his signatures appearing on other documents would clearly yield a conclusion that the former was indeed a forgery.
Moreover, the RTC asserted that the nullity of the said May 25, 1992 deed of sale all the more becomes glaring
considering that the same was purportedly acknowledged before a person who is not a duly commissioned Notary Public.
The CA Decision
Thereafter, the petitioner appealed the decision with the CA. On March 18, 2009, the CA rendered the assailed
decision affirming in toto the RTC decision.[9] The CA held that the testimony of a handwriting expert in this case is not
indispensable as the similarity and dissimilarity between the questioned signature of Tabayag as compared to other
signatures of the latter in other documents could be determined by a visual comparison.
Further, the CA upheld the award of moral damages and attorneys fees in favor of the respondent as the
petitioners conduct caused great concern and anxiety to the respondent and that the latter had to go to court and retain
the services of counsel to pursue his rights and protect his interests.
Undaunted, the petitioner instituted the instant petition for review on certiorari before this Court asserting the
following: (1) the questioned signature of Tabayag in the May 25, 1992 deed of sale could not be declared spurious unless
first examined and declared to be so by a handwriting expert; (2) considering that the subject property was registered
under the petitioners name pursuant to a free patent, reconveyance of the same in favor of the respondent is improper
since only the Government, through the Office of the Solicitor General (OSG), could assail her title thereto in an action for
reversion; and (3) the respondent is not entitled to an award for moral damages and attorneys fees.
In his Comment,[10] the respondent claimed that the issues raised in the instant petition are factual in nature and,
hence, could not be passed upon by this Court in a petition for review on certiorari under Rule 45. Likewise, the
respondent asserted that the petitioners free patent, having been issued on the basis of a falsified document, does not
create a right over the subject property in her favor.
Issues
In sum, the threshold issues for resolution are the following: (a) whether the lower courts erred in declaring the
May 25, 1992 deed of sale a nullity; (b) whether an action for reconveyance is proper in the instant case; and (c) whether
the respondent is entitled to an award of moral damages and attorneys fees.
The Courts Ruling
First and Third Issues: Nullity of the Deed of Sale and Award of Moral Damages and Attorneys Fees
This Court shall jointly discuss the first and third issues as the resolution of the same are interrelated.
Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall raise only
questions of law, which must be distinctly set forth. A question of law arises when there is doubt as to what the law is on a
certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts.
For a question to be one of law, the same must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is
one of fact.[11]
That the signature of Tabayag in the May 25, 1992 deed of sale was a forgery is a conclusion derived by the RTC
and the CA on a question of fact. The same is conclusive upon this Court as it involves the truth or falsehood of an
alleged fact, which is a matter not for this Court to resolve. [12] Where a petitioner casts doubt on the findings of the
lower court as affirmed by the CA regarding the existence of forgery is a question of fact. [13]
In any case, the CA aptly ruled that a handwriting expert is not indispensable to prove that the signature of
Tabayag in the questioned deed of sale was indeed a forgery. It is true that the opinion of handwriting experts are not
necessarily binding upon the court, the experts function being to place before the court data upon which the court can
form its own opinion. Handwriting experts are usually helpful in the examination of forged documents because of the
technical procedure involved in analyzing them. But resort to these experts is not mandatory or indispensable to the
examination or the comparison of handwriting. A finding of forgery does not depend entirely on the testimonies of
handwriting experts, because the judge must conduct an independent examination of the questioned signature in order to
arrive at a reasonable conclusion as to its authenticity.[14]
For the same reason, we would ordinarily disregard the petitioners allegation as to the propriety of the award of
moral damages and attorneys fees in favor of the respondent as it is a question of fact. Thus, questions on whether or not
there was a preponderance of evidence to justify the award of damages or whether or not there was a causal connection
between the given set of facts and the damage suffered by the private complainant or whether or not the act from which
civil liability might arise exists are questions of fact.[15]
Essentially, the petitioner is questioning the award of moral damages and attorneys fees in favor of the
respondent as the same is supposedly not fully supported by evidence. However, in the final analysis, the question of
whether the said award is fully supported by evidence is a factual question as it would necessitate whether the evidence
adduced in support of the same has any probative value. For a question to be one of law, it must involve no examination
of the probative value of the evidence presented by the litigants or any of them. [16]
Nevertheless, a review of the amount of moral damages actually awarded by the lower courts in favor of the respondent is
necessary.
Here, the lower courts ordered the petitioner to pay the respondent moral damages in the amount of P100,000.00.
We find the said amount to be excessive.
Moral damages are not intended to enrich the complainant at the expense of the defendant. Rather, these are awarded
only to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering
that resulted by reason of the defendants culpable action. The purpose of such damages is essentially indemnity or
reparation, not punishment or correction. In other words, the award thereof is aimed at a restoration within the limits of
the possible, of the spiritual status quo ante; therefore, it must always reasonably approximate the extent of injury and be
proportional to the wrong committed.[17]
Accordingly, the amount of moral damages must be reduced to P30,000.00, an amount reasonably commensurate to the
injury sustained by the respondent.
Second Issue: Propriety of the Reconveyance of the Subject Property to the Heirs of the late Juan Tabayag
The petitioner asserted that the CA erred in not finding that her ownership over the subject property was by virtue of a
free patent issued by the government and, thus, even assuming that the subject deed of sale is invalid, her title and
ownership of the subject property cannot be divested or much less ordered reconveyed to the heirs of Tabayag.
Simply put, the petitioner points out that the subject property, being acquired by her through a grant of free patent from
the government, originally belonged to the public domain. As such, the lower courts could not order the reconveyance of
the subject property to the heirs of Tabayag as the latter are not the original owners thereof. If at all, the subject property
could only be ordered reverted to the public domain.
An issue cannot be raised for the first time on appeal as it is already

barred by estoppel.
This Court notes that the foregoing argument is being raised by the petitioner for the first time in the instant
petition. It is well-settled that no question will be entertained on appeal unless it has been raised in the proceedings
below. Points of law, theories, issues and arguments not brought to the attention of the lower court, administrative
agency or quasi-judicial body, need not be considered by a reviewing court, as they cannot be raised for the first time at
that late stage. Basic considerations of fairness and due process impel this rule. Any issue raised for the first time on
appeal is barred by estoppel.[18]
Accordingly, the petitioners attack on the propriety of the action for reconveyance in this case ought to be
disregarded. However, in order to obviate any lingering doubt on the resolution of the issues involved in the instant case,
this Court would proceed to discuss the cogency of the petitioners foregoing argument.
Title emanating from a free patent fraudulently secured does not

become indefeasible.
The petitioner asserts that the amended complaint for annulment of document, reconveyance and damages that was filed
by the respondent with the RTC is a collateral attack on her title over the subject property. She avers that, when the said
amended compliant was filed, more than a year had already lapsed since OCT No. 1786 over the subject property was
issued under her name. Thus, the petitioner maintains that her title over the subject property is already indefeasible and,
hence, could not be attacked collaterally.
We do not agree.
A Free Patent may be issued where the applicant is a natural-born citizen of the Philippines; is not the owner of
more than twelve (12) hectares of land; has continuously occupied and cultivated, either by himself or through his
predecessors-in-interest, a tract or tracts of agricultural public land subject to disposition, for at least 30 years prior to the
effectivity of Republic Act No. 6940; and has paid the real taxes thereon while the same has not been occupied by any
person.[19]
Once a patent is registered and the corresponding certificate of title is issued, the land covered thereby ceases to
be part of public domain and becomes private property, and the Torrens Title issued pursuant to the patent becomes
indefeasible upon the expiration of one year from the date of such issuance. [20] However, a title emanating from a free
patent which was secured through fraud does not become indefeasible, precisely because the patent from whence the
title sprung is itself void and of no effect whatsoever.[21]
On this point, our ruling in Republic v. Heirs of Felipe Alejaga, Sr.[22] is instructive:
True, once a patent is registered and the corresponding certificate of title [is] issued, the land covered by
them ceases to be part of the public domain and becomes private property. Further, the Torrens Title
issued pursuant to the patent becomes indefeasible a year after the issuance of the latter. However, this
indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. Well-settled is
the doctrine that the registration of a patent under the Torrens System does not by itself vest title; it
merely confirms the registrants already existing one. Verily, registration under the Torrens System is not a
mode of acquiring ownership.[23] (citations omitted)
A fraudulently acquired free patent may only be assailed by the

government in an action for reversion.

Nonetheless, a free patent that was fraudulently acquired, and the certificate of title issued pursuant to the same,
may only be assailed by the government in an action for reversion pursuant to Section 101 of the Public Land
Act.[24]In Sherwill Development Corporation v. Sitio Sto. Nio Residents Association, Inc. ,[25] this Court pointed out that:
It is also to the public interest that one who succeeds in fraudulently acquiring title to a public land should
not be allowed to benefit therefrom, and the State should, therefore, have an even existing authority, thru
its duly-authorized officers, to inquire into the circumstances surrounding the issuance of any such title, to
the end that the Republic, thru the Solicitor General or any other officer who may be authorized by law,
may file the corresponding action for the reversion of the land involved to the public domain, subject
thereafter to disposal to other qualified persons in accordance with law. In other words, the indefeasibility
of a title over land previously public is not a bar to an investigation by the Director of Lands as to how
such title has been acquired, if the purpose of such investigation is to determine whether or not fraud had
been committed in securing such title in order that the appropriate action for reversion may be filed by
the Government.[26]
In Kayaban, et al. v. Republic, et al.,[27] this Court explained the reason for the rule that only the government,
through the OSG, upon the recommendation of the Director of Lands, may bring an action assailing a certificate of title
issued pursuant to a fraudulently acquired free patent:
Since it was the Director of Lands who processed and approved the applications of the appellants
and who ordered the issuance of the corresponding free patents in their favor in his capacity as
administrator of the disposable lands of the public domain, the action for annulment should have been
initiated by him, or at least with his prior authority and consent.[28]
An action for reconveyance is proper in this case.
However, the foregoing rule is not without an exception. A recognized exception is that situation where plaintiff-
claimant seeks direct reconveyance from defendant public land unlawfully and in breach of trust titled by him, on the
principle of enforcement of a constructive trust.[29]
A private individual may bring an action for reconveyance of a parcel of land even if the title thereof was issued
through a free patent since such action does not aim or purport to re-open the registration proceeding and set aside the
decree of registration, but only to show that the person who secured the registration of the questioned property is not the
real owner thereof.[30]
In Roco, et al. v. Gimeda,[31] we stated that if a patent had already been issued through fraud or mistake and has
been registered, the remedy of a party who has been injured by the fraudulent registration is an action for reconveyance,
thus:
It is to be noted that the petition does not seek for a reconsideration of the granting of the patent
or of the decree issued in the registration proceeding. The purpose is not to annul the title but to have it
conveyed to plaintiffs. Fraudulent statements were made in the application for the patent and no notice
thereof was given to plaintiffs, nor knowledge of the petition known to the actual possessors and
occupants of the property. The action is one based on fraud and under the law, it can be instituted within
four years from the discovery of the fraud. (Art. 1146, Civil Code, as based on Section 3, paragraph 43 of
Act No. 190.) It is to be noted that as the patent here has already been issued, the land has the character
of registered property in accordance with the provisions of Section 122 of Act No. 496, as amended by Act
No. 2332, and the remedy of the party who has been injured by the fraudulent registration is an action for
reconveyance. (Director of Lands vs. Registered of Deeds, 92 Phil., 826; 49 Off. Gaz. [3] 935; Section 55 of
Act No. 496.)[32]
In the same vein, in Quiiano, et al. v. Court of Appeals, et al.,[33] we stressed that:
The controlling legal norm was set forth in succinct language by Justice Tuason in a 1953
decision, Director of Lands v. Register of Deeds of Rizal. Thus: The sole remedy of the land owner whose
property has been wrongfully or erroneously registered in another's name is, after one year from the date
of the decree, not to set aside the decree, as was done in the instant case, but, respecting the decree as
incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice
for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for
damages." Such a doctrine goes back to the 1919 landmark decision of Cabanos v. Register of Deeds of
Laguna. If it were otherwise the institution of registration would, to quote from Justice Torres, serve "as a
protecting mantle to cover and shelter bad faith ...." In the language of the then Justice, later Chief Justice,
Bengzon: "A different view would encourage fraud and permit one person unjustly to enrich himself at the
expense of another." It would indeed be a signal failing of any legal system if under the circumstances
disclosed, the aggrieved party is considered as having lost his right to a property to which he is entitled. It
is one thing to protect an innocent third party; it is entirely a different matter, and one devoid of
justification, if [deceit] would be rewarded by allowing the perpetrator to enjoy the fruits of his nefarious
deed. As clearly revealed by the undeviating line of decisions coming from this Court, such an undesirable
eventuality is precisely sought to be guarded against. So it has been before; so it should continue to
be.[34] (citations omitted)
Here, the respondent, in filing the amended complaint for annulment of documents, reconveyance and damages,
was not seeking a reconsideration of the granting of the patent or the decree issued in the registration proceedings. What
the respondent sought was the reconveyance of the subject property to the heirs of the late Tabayag on account of the
fraud committed by the petitioner. Thus, the lower courts did not err in upholding the respondents right to ask for the
reconveyance of the subject property. To hold otherwise would be to make the Torrens system a shield for the
commission of fraud.
That the subject property was not registered under the name of the heirs of Tabayag prior to the issuance of OCT
No. 1786 in the name of the petitioner would not effectively deny the remedy of reconveyance to the former. An action for
reconveyance is a legal and equitable remedy granted to the rightful landowner, whose land was wrongfully or
erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him. [35]
It cannot be gainsaid that the heirs of Tabayag, by themselves and through their predecessors-in-interest, had already
acquired a vested right over the subject property. An open, continuous, adverse and public possession of a land of the
public domain from time immemorial by a private individual personally and through his predecessors confers an effective
title on said possessors whereby the land ceases to be public, to become private property, at least by
presumption.[36] Hence, the right of the heirs of Tabayag to ask for the reconveyance of the subject property is irrefutable.
At this juncture, we deem it necessary to reiterate our disquisition in Naval v. Court of Appeals,[37] thus:
The fact that petitioner was able to secure a title in her name did not operate to vest ownership upon her
of the subject land. Registration of a piece of land under the Torrens System does not create or vest title,
because it is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership
or title over the particular property described therein. It cannot be used to protect a usurper from the true
owner; nor can it be used as a shield for the commission of fraud; neither does it permit one to enrich
himself at the expense of others. Its issuance in favor of a particular person does not foreclose the
possibility that the real property may be co-owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered owner.[38] (citations omitted)
WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The Decision dated March
18, 2009 and Resolution dated September 16, 2009 issued by the Court of Appeals in CA-G.R. CV No. 87762 are
hereby AFFIRMED with MODIFICATION. The petitioner is ordered to pay the respondent moral damages in the amount
of Thirty Thousand Pesos (P30,000.00). SO ORDERED.
6. G.R. No. 175021 June 15, 2011 REPUBLIC OF THE PHILIPPINES, represented by the Chief of the
Philippine National Police, Petitioner, vs. THI THU THUY T. DE GUZMAN, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari1 filed by Republic of the Philippines, as represented by the Chief of the Philippine
National Police (PNP), of the September 27, 2006 Decision 2 of the Court of Appeals in CA-G.R. CV No. 80623, which
affirmed with modification the September 8, 2003 Decision 3 of the Regional Trial Court (RTC), Branch 222, of Quezon City
in Civil Case No. Q99-37717.
Respondent is the proprietress of Montaguz General Merchandise (MGM),4 a contractor accredited by the PNP for the
supply of office and construction materials and equipment, and for the delivery of various services such as printing and
rental, repair of various equipment, and renovation of buildings, facilities, vehicles, tires, and spare parts. 5
On December 8, 1995, the PNP Engineering Services (PNPES), released a Requisition and Issue Voucher 6 for the acquisition
of various building materials amounting to Two Million Two Hundred Eighty-Eight Thousand Five Hundred Sixty-Two
Pesos and Sixty Centavos (₱2,288,562.60) for the construction of a four-storey condominium building with roof deck at
Camp Crame, Quezon City.7
Respondent averred that on December 11, 1995, MGM and petitioner, represented by the PNP, through its chief, executed
a Contract of Agreement8 (the Contract) wherein MGM, for the price of ₱2,288,562.60, undertook to procure and deliver to
the PNP the construction materials itemized in the purchase order 9 attached to the Contract. Respondent claimed that
after the PNP Chief approved the Contract and purchase order,10 MGM, on March 1, 1996, proceeded with the delivery of
the construction materials, as evidenced by Delivery Receipt Nos. 151-153,11Sales Invoice Nos. 038 and 041,12 and the
"Report of Public Property Purchase"13 issued by the PNP’s Receiving and Accounting Officers to their Internal Auditor
Chief. Respondent asseverated that following the PNP’s inspection of the delivered materials on March 4, 1996, 14 the PNP
issued two Disbursement Vouchers; one in the amount of ₱2,226,147.26 in favor of MGM,15 and the other, 16 in the amount
of ₱62,415.34, representing the three percent (3%) withholding tax, in favor of the Bureau of Internal Revenue (BIR). 17
On November 5, 1997, the respondent, through counsel, sent a letter dated October 20, 1997 18 to the PNP, demanding
the payment of ₱2,288,562.60 for the construction materials MGM procured for the PNP under their December 1995
Contract.
On November 17, 1997, the PNP, through its Officer-in-Charge, replied19 to respondent’s counsel, informing her of the
payment made to MGM via Land Bank of the Philippines (LBP) Check No. 0000530631, 20 as evidenced by Receipt No.
001, 21 issued by the respondent to the PNP on April 23, 1996.22
On November 26, 1997, respondent, through counsel, responded by reiterating her demand 23 and denying having ever
received the LBP check, personally or through an authorized person. She also claimed that Receipt No. 001, a copy of
which was attached to the PNP’s November 17, 1997 letter, could not support the PNP’s claim of payment as the aforesaid
receipt belonged to Montaguz Builders, her other company, which was also doing business with the PNP, and not to
MGM, with which the contract was made.
On May 5, 1999, respondent filed a Complaint for Sum of Money against the petitioner, represented by the Chief of the
PNP, before the RTC, Branch 222 of Quezon City. 24 This was docketed as Civil Case No. Q99-37717.
The petitioner filed a Motion to Dismiss25 on July 5, 1999, on the ground that the claim or demand set forth in
respondent’s complaint had already been paid or extinguished,26 as evidenced by LBP Check No. 0000530631 dated April
18, 1996, issued by the PNP to MGM, and Receipt No. 001, which the respondent correspondingly issued to the PNP. The
petitioner also argued that aside from the fact that the respondent, in her October 20, 1997 letter, demanded the incorrect
amount since it included the withholding tax paid to the BIR, her delay in making such demand "[did] not speak well of the
worthiness of the cause she espouse[d]."27
Respondent opposed petitioner’s motion to dismiss in her July 12, 1999 Opposition 28and September 10, 1999
Supplemental Opposition to Motion to Dismiss.29 Respondent posited that Receipt No. 001, which the petitioner claimed
was issued by MGM upon respondent’s receipt of the LBP check, was, first, under the business name "Montaguz Builders,"
an entity separate from MGM. Next, petitioner’s allegation that she received the LBP check on April 19, 1996 was belied by
the fact that Receipt No. 001, which was supposedly issued for the check, was dated four days later, or April 23, 1996.
Moreover, respondent averred, the PNP’s own Checking Account Section Logbook or the Warrant Register, showed that it
was one Edgardo Cruz (Cruz) who signed for the check due to MGM, 30contrary to her usual practice of personally
receiving and signing for checks payable to her companies.
After conducting hearings on the Motion to Dismiss, the RTC issued an Order 31 on May 4, 2001, denying the petitioner’s
motion for lack of merit. The petitioner thereafter filed its Answer,32 wherein it restated the same allegations in its Motion
to Dismiss.
Trial on the merits followed the pre-trial conference, which was terminated on June 25, 2002 when the parties failed to
arrive at an amicable settlement.33
On September 3, 2002, shortly after respondent was sworn in as a witness, and after her counsel formally offered her
testimony in evidence, Atty. Norman Bueno, petitioner’s counsel at that time, made the following stipulations in open
court:
Atty. Bueno (To Court)
Your Honor, in order to expedite the trial, we will admit that this witness was contracted to deliver the construction
supplies or materials. We will admit that she complied, that she actually delivered the materials. We will admit that Land
Bank Corporation check was issued although we will not admit that the check was not released to her, as [a] matter of fact,
we have the copy of the check. We will admit that Warrant Register indicated that the check was released although we will
not admit that the check was not received by the [respondent].
Court (To Atty. Albano)
So, the issues here are whether or not the [respondent] received the check for the payment of the construction materials
or supplies and who received the same. That is all.
Atty. Albano (To Court)

Yes, your Honor.

Court (To Atty. Albano)
I think we have an abbreviated testimony here. Proceed.34 (Emphasis ours.)
The stipulations made by the petitioner through Atty. Bueno were in consonance with the admissions it had previously
made, also through Atty. Bueno, in its Answer, 35 and pre-trial brief36:
Answer:
IX
It ADMITS the allegation in paragraph 9 of the Complaint that [respondent] delivered to the PNP Engineering Service the
construction materials. It also ADMITS the existence of Receipt Nos. 151, 152 and 153 alleged in the same paragraph,
copies of which are attached to the Complaint as Annexes "G," "G-1" and "G-2."37 (Emphasis ours.)
Pre-trial Brief:
III
ADMISSIONS
3.1. Facts and/or documents admitted
For brevity, [petitioner] admit[s] only the allegations in [respondent’s] Complaint and the annexes thereto that were
admitted in the Answer.38 (Emphases ours.)
With the issue then confined to whether respondent was paid or not, the RTC proceeded with the trial.
Respondent, in her testimony, narrated that on April 18, 1996, she went to the PNP Finance Center to claim a check due to
one of her companies, Montaguz Builders. As the PNP required the issuance of an official receipt upon claiming its checks,
respondent, in preparation for the PNP check she expected, already signed Montaguz Builders Official Receipt No. 001,
albeit the details were still blank. However, upon arriving at the PNP Finance Center, respondent was told that the check
was still with the LBP, which could not yet release it. Respondent then left for the Engineering Services Office to see
Captain Rama, along with Receipt No. 001, which she had not yet issued.39Respondent claimed that after some time, she
left her belongings, including her receipt booklet, at a bench in Captain Rama’s office when she went around the
Engineering Office to talk to some other people.40 She reasoned that since she was already familiar and comfortable with
the people in the PNPES Office, she felt no need to ask anyone to look after her belongings, as it was her "normal
practice"41 to leave her belongings in one of the offices there. The next day, respondent alleged that when she returned
for the check due to Montaguz Builders that she was not able to claim the day before, she discovered for the first time
that Receipt No. 001, which was meant for that check, was missing. Since she would not be able to claim her check without
issuing a receipt, she just informed the releaser of the missing receipt and issued Receipt No. 002 in its place. 42 After a few
months, respondent inquired with the PNP Finance Center about the payment due to MGM under the Contract of
December 1995 and was surprised to find out that the check payable to MGM had already been released. Upon making
some inquiries, respondent learned that the check, payable to MGM, in the amount of ₱2,226,147.26, was received by
Cruz, who signed the PNP’s Warrant Register. Respondent admitted to knowing Cruz, as he was connected with Highland
Enterprises, a fellow PNP-accredited contractor. However, she denied ever having authorized Cruz or Highland Enterprises
to receive or claim any of the checks due to MGM or Montaguz Builders. 43 When asked why she had not filed a case
against Cruz or Herminio Reyes, the owner of Highland Enterprises, considering the admitted fact that Cruz claimed the
check due to her, respondent declared that there was no reason for her to confront them as it was the PNP’s fault that the
check was released to the wrong person. Thus, it was the PNP’s problem to find out where the money had gone, while her
course of action was to go after the PNP, as the party involved in the Contract. 44
On April 29, 2003, petitioner presented Ms. Jesusa Magtira, who was then the "check releaser" 45 of the PNP, to prove that
the respondent received the LBP check due to MGM, and that respondent herself gave the check to Cruz. 46 Ms. Magtira
testified that on April 23, 1996, she released the LBP check payable to the order of MGM, in the amount of ₱2,226,147.26,
to the respondent herein, whom she identified in open court. She claimed that when she released the check to
respondent, she also handed her a voucher, and a logbook also known as the Warrant Register, for signing. 47 When asked
why Cruz was allowed to sign for the check, Ms. Magtira explained that this was allowed since the respondent already
gave her the official receipt for the check, and it was respondent herself who gave the logbook to Cruz for signing. 48
The petitioner next presented Edgardo Cruz for the purpose of proving that the payment respondent was claiming
rightfully belonged to Highland Enterprises. Cruz testified that Highland Enterprises had been an accredited contractor of
the PNP since 1975. In 1995, Cruz claimed that the PNPES was tasked to construct "by administration" a condominium
building. This meant that the PNPES had to do all the work, from the canvassing of the materials to the construction of the
building. The PNPES allegedly lacked the funds to do this and so asked for Highland Enterprises’s help. 49 In a meeting with
its accredited contractors, the PNPES asked if the other contractors would agree to the use of their business name50 for a
two percent (2%) commission of the purchase order price to avoid the impression that Highland Enterprises was
monopolizing the supply of labor and materials to the PNP.51Cruz alleged that on April 23, 1996, he and the respondent
went to the PNP Finance Center to claim the LBP check due to MGM. Cruz said that the respondent handed him the
already signed Receipt No. 001, which he filled up. He claimed that the respondent knew that the LBP check was really
meant for Highland Enterprises as she had already been paid her 2% commission for the use of her business name in the
concerned transaction.52
On September 8, 2003, the RTC rendered its Decision, the dispositive of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of [respondent] and against [petitioner] ordering
the latter to pay [respondent] the following sums:
(1) ₱2,226,147.26 representing the principal sum plus interest at 14% per annum from April 18, 1996 until the
same shall have been fully paid;
(2) 20% of the sum to be collected as attorney’s fees; and,
(3) Costs of suit.53
The RTC declared that while Cruz’s testimony seemed to offer a plausible explanation on how and why the LBP check
ended up with him, the petitioner, already admitted in its Answer, and Pre-trial Brief, that MGM, did in fact deliver the
construction materials worth ₱2,288,562.60 to the PNP. The RTC also pointed out the fact that the petitioner made the
same admissions in open court to expedite the trial, leaving only one issue to be resolved: whether the respondent had
been paid or not. Since this was the only issue, the RTC said that it had no choice but to go back to the documents and
the "documentary evidence clearly indicates that the check subject of this case was never received by [respondent]." 54 In
addition, the PNP’s own Warrant Register showed that it was Edgardo Cruz who received the LBP check, and Receipt No.
001 submitted by the petitioner to support its claim was not issued by MGM, but by Montaguz Builders, a different entity.
Finally, the RTC held that Cruz’s testimony, which appeared to be an afterthought to cover up the PNP’s blunder, were
irreconcilable with the petitioner’s earlier declarations and admissions, hence, not credit-worthy.
The petitioner appealed this decision to the Court of Appeals, which affirmed with modification the RTC’s ruling on
September 27, 2006:
WHEREFORE, the decision appealed from is AFFIRMED with the MODIFICATION that the 14% interest per annum imposed
on the principal amount is ordered reduced to 12%, computed from November 16, 1997 until fully paid. The order for the
payment of attorney’s fees and costs of the suit is DELETED. 55
The Court of Appeals, in deciding against the petitioner, held that the petitioner’s admissions and declarations, made in
various stages of the proceedings are express admissions, which cannot be overcome by allegations of respondent’s
implied admissions. Moreover, petitioner cannot controvert its own admissions and it is estopped from denying that it had
a contract with MGM, which MGM duly complied with. The Court of Appeals agreed with the RTC that the real issue for
determination was whether the petitioner was able to discharge its contractual obligation with the respondent. The Court
of Appeals held that while the PNP’s own Warrant Register disclosed that the payment due to MGM was received by Cruz,
on behalf of Highland Enterprises, the PNP’s contract was clearly with MGM, and not with Highland Enterprises. Thus, in
order to extinguish its obligation, the petitioner should have directed its payment to MGM unless MGM authorized a third
person to accept payment on its behalf.
The petitioner is now before this Court, praying for the reversal of the lower courts’ decisions on the ground that "the
Court of Appeals committed a serious error in law by affirming the decision of the trial court." 56
THE COURT’S RULING:
This case stemmed from a contract executed between the respondent and the petitioner. While the petitioner, in
proclaiming that the respondent’s claim had already been extinguished, initially insisted on having fulfilled its contractual
obligation, it now contends that the contract it executed with the respondent is actually a fictitious contract to conceal the
fact that only one contractor will be supplying all the materials and labor for the PNP condominium project.
Both the RTC and the Court of Appeals upheld the validity of the contract between the petitioner and the respondent on
the strength of the documentary evidence presented and offered in Court and on petitioner’s own stipulations and
admissions during various stages of the proceedings.
It is worthy to note that while this petition was filed under Rule 45 of the Rules of Court, the assertions and arguments
advanced herein are those that will necessarily require this Court to re-evaluate the evidence on record.
It is a well-settled rule that in a petition for review under Rule 45, only questions of law may be raised by the parties and
passed upon by this Court.57
This Court has, on many occasions, distinguished between a question of law and a question of fact. We held that when
there is doubt as to what the law is on a certain state of facts, then it is a question of law; but when the doubt arises as to
the truth or falsity of the alleged facts, then it is a question of fact.58 "Simply put, when there is no dispute as to fact, the
question of whether or not the conclusion drawn therefrom is correct, is a question of law." 59To elucidate further, this
Court, in Hko Ah Pao v. Ting60 said:
One test to determine if there exists a question of fact or law in a given case is whether the Court can resolve the issue
that was raised without having to review or evaluate the evidence, in which case, it is a question of law; otherwise, it will be
a question of fact. Thus, the petition must not involve the calibration of the probative value of the evidence presented. In
addition, the facts of the case must be undisputed, and the only issue that should be left for the Court to decide is
whether or not the conclusion drawn by the CA from a certain set of facts was appropriate. 61(Emphases ours.)
In this case, the circumstances surrounding the controversial LBP check are central to the issue before us, the resolution of
which, will require a perusal of the entire records of the case including the transcribed testimonies of the witnesses. Since
this is an appeal via certiorari, questions of fact are not reviewable. As a rule, the findings of fact of the Court of Appeals

are final and conclusive62 and this Court will only review them under the following recognized exceptions: (1) when the
inference made is manifestly mistaken, absurd or impossible; (2) when there is a grave abuse of discretion; (3) when the
finding is grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is
based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making
its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;
(7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are
conclusions without citation of specific evidence on which they are based; (9) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different
conclusion; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are
contradicted by the evidence on record.63
Although petitioner’s sole ground to support this petition was stated in such a manner as to impress upon this Court that
the Court of Appeals committed an error in law, what the petitioner actually wants us to do is to review and re-examine
the factual findings of both the RTC and the Court of Appeals.
Since the petitioner has not shown this Court that this case falls under any of the enumerated exceptions to the rule, we
are constrained to uphold the facts as established by both the RTC and the Court of Appeals, and, consequently, the
conclusions reached in the appealed decision.
Nonetheless, even if we were to exercise utmost liberality and veer away from the rule, the records will show that the
petitioner had failed to establish its case by a preponderance of evidence. 64 Section 1, Rule 133 of the Revised Rules of
Court provides the guidelines in determining preponderance of evidence:
SECTION 1. Preponderance of evidence, how determined.— In civil cases, the party having the burden of proof must
establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of
evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’
manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the
nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of
interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also
consider the number of witnesses, though the preponderance is not necessarily with the greater number.
Expounding on the concept of preponderance of evidence, this Court in Encinas v. National Bookstore, Inc., 65 held:
"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either side and is usually
considered to be synonymous with the term "greater weight of the evidence" or "greater weight of the credible evidence."
Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth. It is evidence which is
more convincing to the court as worthy of belief than that which is offered in opposition thereto. 66
The petitioner avers that the Court of Appeals should not have relied "heavily, if not solely"67 on the admissions made by
petitioner’s former counsel, thereby losing sight of the "secret agreement" between the respondent and Highland
Enterprises, which explains why all the documentary evidence were in respondent’s name. 68
The petitioner relies mainly on Cruz’s testimony to support its allegations. Not only did it not present any other witness to
corroborate Cruz, but it also failed to present any documentation to confirm its story. It is doubtful that the petitioner or
the contractors would enter into any "secret agreement" involving millions of pesos based purely on verbal affirmations.
Meanwhile, the respondent not only presented all the documentary evidence to prove her claims, even the petitioner
repeatedly admitted that respondent had fully complied with her contractual obligations.
The petitioner argued that the Court of Appeals should have appreciated the clear and adequate testimony of Cruz, and
should have given it utmost weight and credit especially since his testimony was a "judicial admission against interest – a
primary evidence which should have been accorded full evidentiary value." 69
The trial court’s appreciation of the witnesses’ testimonies is entitled to the highest respect since it was in a better position
to assess their credibility.70 The RTC held Cruz’s testimony to be "not credit worthy"71 for being irreconcilable with
petitioner’s earlier admissions. Contrary to petitioner’s contentions, Cruz’s testimony cannot be considered as a judicial
admission against his interest as he is neither a party to the case nor was his admission against his own interest, but
actually against either the petitioner’s or the respondent’s interest. Petitioner’s statements on the other hand, were
deliberate, clear, and unequivocal and were made in the course of judicial proceedings; thus, they qualify as judicial
admissions.72 In Alfelor v. Halasan,73 this Court held that:
A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof; production
of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of controversy.
Consequently, an admission made in the pleadings cannot be controverted by the party making such admission and are
conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored, whether objection
is interposed by the party or not. The allegations, statements or admissions contained in a pleading are conclusive as
against the pleader. A party cannot subsequently take a position contrary of or inconsistent with what was pleaded.74

The petitioner admitted to the existence and validity of the Contract of Agreement executed between the PNP and MGM,
as represented by the respondent, on December 11, 1995. It likewise admitted that respondent delivered the construction
materials subject of the Contract, not once, but several times during the course of the proceedings. The only matter
petitioner assailed was respondent’s allegation that she had not yet been paid. If Cruz’s testimony were true, the petitioner
should have put respondent in her place the moment she sent a letter to the PNP, demanding payment for the
construction materials she had allegedly delivered. Instead, the petitioner replied that it had already paid respondent as
evidenced by the LBP check and the receipt she supposedly issued. This line of defense continued on, with the petitioner
assailing only the respondent’s claim of nonpayment, and not the rest of respondent’s claims, in its motion to dismiss, its
answer, its pre-trial brief, and even in open court during the respondent’s testimony. Section 4, Rule 129 of the Rules of
Court states:
SECTION 4. Judicial Admissions.–An admission, verbal or written, made by a party in the course of the proceedings in the
same case, does not require proof. The admission may be contradicted only by showing that it was made through
palpable mistake or that no such admission was made.
Petitioner’s admissions were proven to have been made in various stages of the proceedings, and since the petitioner has
not shown us that they were made through palpable mistake, they are conclusive as to the petitioner. Hence, the only
question to be resolved is whether the respondent was paid under the December 1995 Contract of Agreement.
The RTC and the Court of Appeals correctly ruled that the petitioner’s obligation has not been extinguished. The
petitioner’s obligation consists of payment of a sum of money. In order for petitioner’s payment to be effective in
extinguishing its obligation, it must be made to the proper person. Article 1240 of the Civil Code states:
Art. 1240. Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in
interest, or any person authorized to receive it.
In Cembrano v. City of Butuan,75 this Court elucidated on how payment will effectively extinguish an obligation, to wit:
Payment made by the debtor to the person of the creditor or to one authorized by him or by the law to receive it
extinguishes the obligation. When payment is made to the wrong party, however, the obligation is not extinguished as to
the creditor who is without fault or negligence even if the debtor acted in utmost good faith and by mistake as to the
person of the creditor or through error induced by fraud of a third person.
In general, a payment in order to be effective to discharge an obligation, must be made to the proper person. Thus,
payment must be made to the obligee himself or to an agent having authority, express or implied, to receive the particular
payment. Payment made to one having apparent authority to receive the money will, as a rule, be treated as though actual
authority had been given for its receipt. Likewise, if payment is made to one who by law is authorized to act for the
creditor, it will work a discharge. The receipt of money due on a judgment by an officer authorized by law to accept it will,
therefore, satisfy the debt.76
The respondent was able to establish that the LBP check was not received by her or by her authorized personnel. The
PNP’s own records show that it was claimed and signed for by Cruz, who is openly known as being connected to Highland
Enterprises, another contractor. Hence, absent any showing that the respondent agreed to the payment of the contract
price to another person, or that she authorized Cruz to claim the check on her behalf, the payment, to be effective must be
made to her.77
The petitioner also challenged the RTC’s findings, on the ground that it "overlooked material fact and circumstance of
significant weight and substance."78 Invoking the doctrine of adoptive admission, the petitioner pointed out that the
respondent’s inaction towards Cruz, whom she has known to have claimed her check as early as 1996, should be taken
against her. Finally, the petitioner contends that Cruz’s testimony should be taken against respondent as well, under Rule
130, Sec. 32 of the Revised Rules on Evidence, since she has not presented any "controverting evidence x x x
notwithstanding that she personally heard it."79
The respondent has explained her inaction towards Cruz and Highland Enterprises. Both the RTC and the Court of Appeals
have found her explanation sufficient and this Court finds no cogent reason to overturn the assessment by the trial court
and the Court of Appeals of the respondent’s testimony. It may be recalled that the respondent argued that since it was
the PNP who owed her money, her actions should be directed towards the PNP and not Cruz or Highland Enterprises,
against whom she has no adequate proof.80 Respondent has also adequately explained her delay in filing an action against
the petitioner, particularly that she did not want to prejudice her other pending transactions with the PNP.81
The petitioner claims that the RTC "overlooked material fact and circumstance of significant weight and substance,"82 but
it ignores all the documentary evidence, and even its own admissions, which are evidence of the greater weight and
substance, that support the conclusions reached by both the RTC and the Court of Appeals.
We agree with the Court of Appeals that the RTC erred in the interest rate and other monetary sums awarded to
respondent as baseless. However, we must further modify the interest rate imposed by the Court of Appeals pursuant to
the rule laid down in Eastern Shipping Lines, Inc. v. Court of Appeals83:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest,
as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance
of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest
due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of
interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest,
however, shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but
when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin
to run only from the date the judgment of the court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of
credit.84
Since the obligation herein is for the payment of a sum of money, the legal interest rate to be imposed, under Article 2209
of the Civil Code is six percent (6%) per annum:
Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence
of stipulation, the legal interest, which is six per cent per annum.
Following the guidelines above, the legal interest of 6% per annum is to be imposed from November 16, 1997, the date of
the last demand, and 12% in lieu of 6% from the date this decision becomes final until fully paid. lawphi1
Petitioner’s allegations of sham dealings involving our own government agencies are potentially disturbing and alarming.
If Cruz’s testimony were true, this should be a lesson to the PNP not to dabble in spurious transactions. Obviously, if it can
afford to give a 2% commission to other contractors for the mere use of their business names, then the petitioner is
disbursing more money than it normally would in a legitimate transaction. It is recommended that the proper agency
investigate this matter and hold the involved personnel accountable to avoid any similar occurrence in the future.
WHEREFORE, the Petition is hereby DENIED and the Decision of the Court of Appeals in C.A. G.R. CV No. 80623 dated
September 27, 2006 is AFFIRMED with the MODIFICATION that the legal interest to be paid is SIX PERCENT (6%) per
annum on the amount of ₱2,226,147.26, computed from the date of the last demand or on November 16, 1997. A TWELVE
PERCENT (12%) per annum interest in lieu of SIX PERCENT (6%) shall be imposed on such amount upon finality of this
decision until the payment thereof.
SO ORDERED.
7. SECOND DIVISION
HEIRS OF PACENCIA RACAZA, G.R. No. 198402

namely, VIRGINIA RACAZA COSCOS, ANGELES
RACAZA MIEL, RODRIGO RACAZA, QUIRINO RACAZA, Promulgated:
ROGELIO RACAZA, ERNESTA RACAZA and ROLAND
RACAZA, Petitioners,- versus - SPOUSES FLORENCIO June 13, 2012
ABAY-ABAY, and ELEUTERIA ABAY-ABAY,[1]
Respondents.
x----------------------------------------------------------------------------------------x
RESOLUTION
REYES, J.:

This resolves the Petition for Review on Certiorari with Prayer to Admit Newly Discovered Evidence, filed by the
Heirs of Pacencia Racaza,[2] herein petitioners under Rule 45 of the Rules of Court to assail the Decision[3] dated September
8, 2010 and Resolution[4] dated August 8, 2011 of the Court of Appeals (CA) in CA-G.R. CEB-CV No. 01095.
The Facts
As a background, herein respondents Spouses Florencio and Eleuteria Abay-abay[5] filed in July 1985 with the Regional
Trial Court (RTC) of Tagbilaran City, Bohol a complaint for quieting of title, recovery of possession and damages against
several defendants that included Alexander Miel (Alexander), the husband of herein petitioner Angeles Racaza Miel
(collectively, the Miels). Subject of the complaint, which was docketed as Civil Case No. 3920, was the property covered by
Tax Declaration No. 4501-663 and situated in Poblacion Ubay, Bohol, more particularly described as follows:
A residential lot bounded on the North by Emelia Garces (part); East by Emelia Garces; South by Rosario
Garces, Esperanza Rosello, Matea de Japson; West by Toribio Reyes St., with an area of 600 square meters,
more or less.[6]
Spouses Abay-abay alleged that they acquired the property from the estate of one Emilia Garces by virtue of a Deed of
Absolute Sale dated August 12, 1979, which was registered with the Register of Deeds on October 10, 1984. In mid-1984,
however, therein defendants began erecting residential houses on the subject property without the knowledge and
consent of Spouses Abay-abay. The refusal of defendants therein to vacate the subject land despite herein respondents
demand prompted the latter to file the complaint with the RTC. Alexander failed to file his answer to the complaint, and
was then declared in default by the trial court.
On May 30, 1988, the RTC rendered its judgment in favor of Spouses Abay-abay, and then ordered the defendants
therein to vacate the disputed property. A writ of execution was later issued by the trial court to effect the removal of the
structures, including the house of the Miels, built on the property. When the Miels failed to vacate the property despite
their repeated promise to do so not later than January 11, 1991, the RTC issued on January 14, 1991 an Order directing the
sheriff to immediately destroy and demolish the house of the Miels.
On January 23, 1991, the petitioners then filed before the RTC their own complaint, docketed as Civil Case No.
4856, for quieting of title, recovery of possession and damages against Spouses Abay-abay. As the surviving heirs of
Pacencia Racaza (Pacencia), petitioners claimed to be the co-owners of the property covered by Tax Declaration No. 45C1-
313 under the name of Pacencia and more particularly described as:
A parcel of land... bounded [on] the North by Seashore and Josefina Ruiz; on the South by Burgos
St. and M. Garces; on the East by Public Land and on the West by Marciano Garces now Public Market...
containing an area of ONE HUNDRED FIFTY square meters... [7]
Petitioners claimed to have had actual, peaceful, continuous and public possession of the land, disturbed only in 1985
when Spouses Abay-abay instituted Civil Case No. 3920. They also questioned the unjustified demolition of their ancestral
house, arguing that only Alexander, who had no interest in the property, was impleaded in the case.
In their answer to the complaint, Spouses Abay-abay invoked the valid judgment and writ of execution already issued in
Civil Case No. 3920. They also raised the issues of estoppel and laches in view of the petitioners failure to intervene in Civil
Case No. 3920.
The Ruling of the RTC
After due proceedings, the RTC rendered its Decision [8] dated April 4, 2005, which dismissed the complaint for lack of
preponderance of evidence, and affirmed Spouses Abay-abay's ownership and possession over the subject property. The
rulings of the trial court were based on the following findings:
1 Defendants [herein respondents] evidence to the effect that defendants and [their] predecessors-in-
interest have been in possession and ownership of the land under litigation since 1917 until the present
has more evidentiary weight than that of plaintiffs [herein petitioners] whose tax declaration over a
portion of the land claimed by defendants was issued in 1949;
2 The following undisputed facts negate plaintiffs claim over a portion of the land claimed by defendants
as follows:
a) Plaintiff Angeles Racaza Miel, who received the complaint and summons in Civil Case
No. 3920 involving the land in question before RTC, Branch 2, never informed her
husband Alexander Miel, who was one of the defendants in that case, about such
summons and complaint.

It is quite intriguing that, if indeed plaintiff Angeles Racaza Miel is one of the heirs of
Paciencia Racaza[,] the alleged owner of a portion of the land in question, why did she
not inform her co-heirs and intervene in that Civil Case No. 3920 when it was heard
before RTC, Br. 2?
Such inaction of Angeles Racaza Miel infers the inanity of plaintiffs claim over a portion of
the land in question.
xxx
c) Angeles or her husband[,] Alexander Miel never appealed the decision rendered by RTC,
Branch 2 awarding the land under litigation in favor of defendant-spouses Florencio and
Eleuteria Abay-abay.
3 Another undisputed fact that would reveal that in connection with the decision rendered by RTC, Branch
2 in favor of defendant[s]-spouses Florencio and Eleuteria, plaintiff Angeles Racaza Miel and her original
counsel in this case, Atty. Roberto Cajes promised before the said Court to vacate the subject land. Such
act of plaintiff Angeles Racaza Miel is indicative of her agreement to the decision rendered by RTC, Branch
2 awarding the subject land to Florencio Abay-abay, Sr. and, thus, demolishes whatever claim she and her
co-plaintiffs in the case at bench may have over the land in question, which is the subject matter of the
above-entitled case.
Simply stated, the evidence as a whole adduced by the defendants is superior to that of the plaintiffs[]. [9]
The Ruling of the CA
On appeal, the CA affirmed the rulings of the RTC via the assailed Decision[10] dated September 8, 2010 and
Resolution[11] dated August 8, 2011. Hence, this petition for review on certiorari.
The Present Petition
To support their petition, the petitioners argue that: (1) the disputed property is a foreshore land and thus, owned by the
State; (2) the respondents were buyers in bad faith when they purchased the unregistered land; and (3) the order to
demolish their property was inhuman and thus, unconstitutional.
As part of their petition, the petitioners also ask this Court to admit as newly discovered evidence a Certification of the
Community Environment and Natural Resources Office (CENRO) of Bohol, and a cadastral map of Poblacion, Ubay, Bohol,
purportedly to support their claim that the subject property is a foreshore land which cannot be owned by herein
respondents.
This Court's Ruling
We deny the petition.
First, the petition raises questions of fact which are beyond the coverage of a petition for review on certiorari. The settled
rule is that only questions of law may be raised in a petition under Rule 45 of the Rules of Court. It is not this Courts
function to analyze or weigh all over again evidence already considered in the proceedings below, our jurisdiction being
limited to reviewing only errors of law that may have been committed by the lower court. The resolution of factual issues
is the function of the lower courts, whose findings on these matters are received with respect.A question of law which we
may pass upon must not involve an examination of the probative value of the evidence presented by the litigants. [12] This
is in accordance with Section 1, Rule 45 of the Rules of Court, as amended, which reads:
Section 1. Filing of petition with Supreme Court . A party desiring to appeal by certiorari from a
judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals,
the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition may include an application for a writ of preliminary
injunction or other provisional remedies and shall raise only questions of law, which must be distinctly
set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same
action or proceeding at any time during its pendency. (Emphasis supplied)
Significantly, Section 5, Rule 45 provides that the failure of the petitioner to comply with the requirements on the contents
of the petition shall be sufficient ground for the dismissal thereof. While jurisprudence provides settled exceptions to
these rules, the instant petition does not fall under any of these exceptions.
On the same ground that petitions under Rule 45 must not involve questions of fact, the petitioners prayer for this Court
to admit what they claimed to be newly discovered evidence is hereby denied. The Supreme Court is not a trier of facts,
and is not the proper forum for the ventilation and substantiation of factual issues. [13] While the Rules of Court allows the
introduction by parties of newly-discovered evidence, as in motions for new trial under Rule 37, these are not to be
presented for the first time during an appeal. In addition, the term newly-discovered evidence has a specific definition
under the law. Under the Rules of Court, the requisites for newly discovered evidence are: (a) the evidence was discovered
after trial; (b) such evidence could not have been discovered and produced at the trial with reasonable diligence; and (c) it
is material, not merely cumulative, corroborative or impeaching, and is of such weight that, if admitted, will probably
change the judgment.[14]
The two documents which the petitioners seek to now present are not of this nature. Undeniably, the CENRO Certification
and cadastral map annexed to the petition could have been produced and presented by the petitioners during the
proceedings before the court a quo. Further to this, the petitioners purpose for submitting the said documents is only to
prove that the disputed property is a foreshore land that should have been declared owned by the State. Thus, even
granting that the documents may be admitted at this stage, the certification and cadastral map fail to support the
petitioners claim of ownership over the disputed property. On the contrary, these documents only negate their claim of
ownership and better right to possess the land because foreshore land is not subject to private ownership, but is part of
the public domain. In Republic of the Philippines v. CA,[15] we thus held:
When the sea moved towards the estate and tide invaded it, the invaded property became foreshore land
and passed to the realm of the public domain. In fact, the Court in Government vs. Cabangis annulled the
registration of land subject of cadastral proceedings when the parcel subsequently became foreshore
land. In another case, the Court voided the registration decree of a trial court and held that said court had
no jurisdiction to award foreshore land to any private person or entity. The subject land in this case, being
foreshore land, should therefore be returned to the public domain.[16] (Citations omitted)
We note that not even herein petitioners, but the Republic of the Philippines, is the real party in interest that is allowed to
pursue such claims against lands of the public domain.[17]
All told, this Court finds no justification to depart from the factual findings of the trial and appellate courts. The petitioners
failed to present any cogent reason that would warrant a reversal of the decision and resolution assailed in this petition.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision dated September 8, 2010 and
Resolution dated August 8, 2011 of the Court of Appeals in CA-G.R. CEB-CV No. 01095 are hereby AFFIRMED. SO
ORDERED.
8. FIRST DIVISION G.R. No. 171146 December 7, 2011 RODOLFO MORLA, Petitioner,
vs. CORAZON NISPEROS BELMONTE, ABRAHAM U. NISPEROS, PERLITA NISPEROS OCAMPO, ARMANDO U.
NISPEROS, ALBERTO U. NISPEROS, HILARIO U. NISPEROS, ARCHIMEDES U. NISPEROS, BUENAFE NISPEROS PEREZ,
ARTHUR U. NISPEROS, AND ESPERANZA URBANO NISPEROS, Respondents.
DECISION
This petition for review on certiorari1 seeks to annul and set aside the March 9, 2005 Decision2 and December 29, 2005
Resolution3 of the Court of Appeals in CA-G.R. CV No. 53527, which affirmed with modification the February 19, 1996
Judgment4 of the Regional Trial Court (RTC) of Ilagan, Isabela, Branch 17 in Civil Case No. 810.
Spouses Alfredo Nisperos and Esperanza Urbano (the Nisperos spouses) were the original homesteaders of an 80,873-
square meter tract of public land known and identified as Lot No. 4353 of Pls. 62, situated in Caliguian, Burgos, Isabela, 5 by
virtue of Original Certificate of Title (OCT) No. P-1542, issued on May 4, 1951.6
On June 8, 1988, the Nisperos spouses executed a Partial Deed of Absolute Sale,7 wherein they sold a portion of Lot No.
4353 with an area of 50,000 square meters (subject land) to the brothers Ramon and Rodolfo Morla (the Morla brothers)
for the sum of Two Hundred Fifty Thousand Pesos (₱ 250,000.00).
On August 2, 1988, the Morla brothers acknowledged and confirmed in writing (the "1988 contract") that they had bought
from the Nisperos spouses the subject land, and that they had agreed to give the Nisperos spouses a period of ten (10)
years within which to repurchase the subject land for the price of Two Hundred Seventy-Five Thousand Pesos (₱
275,000.00). The 1988 contract was written in Ilocano and executed at the Office of the Barangay Captain in the
Municipality of Burgos, Province of Isabela.8
On June 27, 1994, the Nisperos spouses filed a Complaint9 for Repurchase and/or Recovery of Ownership Plus Damages
against the Morla brothers. They alleged that the deed of sale was registered by the Morla brothers only when they had
signified their intention to repurchase their property.10 Thus, Transfer Certificate of Title (TCT) No. 225544 for the subject

land was issued in favor of the Morla brothers, and TCT No. 225545, 11 for the remaining 30,870 square meters of Lot No.
4353, to the Nisperos spouses.
In response,12 the Morla brothers claimed that the Nisperos spouses had no cause of action, as the repurchase of the
subject land was improper for being outside the five-year period provided under Section 119 of Commonwealth Act No.
141.13
At the pre-trial conference held on June 19, 1995, the parties settled that the only issue to be resolved by the RTC was
whether the 1988 contract executed by the parties, wherein it was stipulated that the Nisperos spouses may repurchase
the land sold to the Morla brothers within a period of ten (10) years, was valid or not. 14
On July 28, 1995, the RTC issued an Order15 requiring the parties to submit their position papers or memoranda in light of
their agreement to submit the case for Summary Judgment on the issue of the validity of the 1988 contract.
The Nisperos spouses then filed a Motion for Summary Judgment16 on the ground that there was no genuine issue of
material facts in the case except for damages and attorney’s fees, which may be heard separately and independently.
On September 15, 1995, the Nisperos spouses deposited the amount of ₱ 275,000.00, with the clerk of court of the RTC for
the repurchase of the subject land.17
The RTC rendered its Judgment dated February 19, 1996, the dispositive portion of which reads:
WHEREFORE, for and in consideration of the foregoing, judgment is hereby rendered in favor of the plaintiffs and against
the defendants ordering the defendants to reconvey the portion of five (5) hectares of plaintiff’s land covered by their
original title, Original Certificate of Title No. P-1542 unto the plaintiffs and to receive and accept the ₱ 275,000.00 from the
plaintiffs as repurchase; to pay attorney’s fees in the amount of ₱ 5,000.00 and to pay the costs of this suit.18
The RTC said that the only issue to be resolved was the validity of the 1988 contract, which the Morla brothers neither
attacked nor denied. The RTC held that it was clear from the 1988 contract, which the Morla brothers executed, that they
had bound themselves to its terms and conditions. The RTC further proclaimed that what was prohibited was the
shortening of the five-year redemption period under Section 119 of Commonwealth Act No. 141, and not its
prolongation.19
On March 14, 1996, the Morla brothers moved for the reconsideration 20 of the RTC’s judgment on the ground that it could
not affect them since they were no longer the real parties-in-interest as they had already sold the subject land to Rosie
Ocampo, married to Delfin Gragasin, and Hilario Bernardino, married to Manolita Morla, on May 2, 1994. 21
The Nisperos spouses, in their Opposition to the Motion for Reconsideration,22 attacked the validity of the purported sale
and alleged that such sale in favor of the Morla brothers’ close relatives was a last ditch attempt to win the case. The
Nisperos spouses pointed out that the Morla brothers never mentioned such sale considering that it supposedly
happened in May 1994, before the case was instituted in June 1994. 23
The RTC denied the Morla brothers’ motion for reconsideration in an Order 24 dated July 19, 1996. The RTC noted how such
purported sale was not mentioned by the Morla brothers in their confrontations with the Nisperos spouses prior to the
filing of the case, or in any of their pleadings filed before the RTC. The RTC agreed with the Nisperos spouses’ contention
that if the sale really did happen, then the Morla brothers should have brought it up at the earliest opportune time. Finally,
the RTC said that the belated issue would not in any way affect the standing of the parties.
The Morla brothers timely25 appealed this decision to the Court of Appeals and assigned the following errors in support
thereof:
The TRIAL COURT GRAVELY ERRED IN HOLDING THAT APPELLANTS’ AUGUST 2, 1988 private writing, Exh. "A"
WAS AN AGREEMENT BY PARTIES FOR APPELLEES TO REPURCHASE WITHIN TEN (10) YEARS THEREFROM THE
FIVE (5) HECTARES PORTION OF THEIR HOMESTEAD THEY SOLD TO THE FORMER AS PER JUNE 28, 1988 PARTIAL
DEED OF ABSOLUTE SALE, EXH. "1" NOTWITHSTANDING THE MANDATORY FIVE (5) YEARS REPURCHASE PERIOD
FROM THE DATE OF SALE PROVIDED BY SECTION 119 OF THE PUBLIC LAND LAW (COMMONWEALTH ACT NO.
141).
II
THE TRIAL COURT GRAVELY ERRED IN RELYING ON THE PRECEDENT LAID IN THE CASES OF MENJE, ET AL., VS.
ANGELES, 101 PHIL. 563 AND MANUEL VS. PHILIPPINE NATIONAL BANK, 101 PHIL. 568, WHICH TREAT OF
REDEMPTION OF FORECLOSED HOMESTEAD AFTER FORECLOSURE SALES NOTWITHSTANDING THE CLEAR ISSUE
IN THE CASE AT BAR WHICH IS FOR REPURCHASE OF A PORTION OF A HOMESTEAD. 26

On March 9, 2005, the Court of Appeals affirmed the RTC’s decision, with the deletion of the award of attorney’s fees for
lack of basis in the decision, as the only modification. While the Court of Appeals agreed with the Morla brothers’
assertion that the cases cited by the RTC were not applicable to their case, it declared that the RTC did not err in allowing
the Nisperos spouses to repurchase the subject land. The Court of Appeals immediately noted that there clearly was no
genuine issue as to any material fact, except for the claim of attorney’s fees. It upheld the validity of the 1988 contract and
concurred with the RTC’s rationale that the arrangement to prolong the period for redemption of the subject land was not
prohibited by law as it was in line with the intent of Section 119 "to give the homesteader or patentee every chance to
preserve for himself and his family the land that the State had gratuitously given to him as a reward for his labor in
cleaning and cultivating it." The Court of Appeals further held that the 1988 contract, contrary to the Morla brothers’
contention, was not unenforceable as the necessity to embody certain contracts in a public instrument was only for
convenience and not for its validity or enforceability.27
The Morla brothers sought to have this decision reconsidered on the strength of a "newly discovered" Contract of Sale of
farm land dated June 28, 1978 (1978 contract). The Morla brothers alleged that this contract, which covered the subject
land, was found only upon the prodding of their new lawyer; thus, even the ten-year period to repurchase the subject land
under Article 1606 of the Civil Code had already expired.28
The Court of Appeals issued a Resolution29 on December 29, 2005, denying the Morla brothers’ motion for reconsideration
in this wise:
[The Morla brothers] assert a new theory on the basis of a handwritten "contract" dated June 28, 1978 – a private
document – allegedly executed by [the Nisperos spouses]. Said document is being introduced for the first time on appeal.
And it is settled that issues not raised in the court a quo cannot be raised for the first time on appeal – in the case at
bench, in a motion for reconsideration – for being offensive to the basic rules of fair play, justice and due process x x x. 30
As Ramon Morla died on March 5, 2001, single and without any descendants or ascendants, Rodolfo Morla (petitioner), by
himself, elevated the instant case before this Court with the Nisperos spouses as respondents. Alfredo Nisperos, however,
also died on September 19, 2010.31 Consequently, Alfredo Nisperos’ legal heirs filed a motion32 to be substituted as
respondents, in lieu of their deceased father. This motion was granted on October 3, 2011 33 thus, Corazon Nisperos
Belmonte, Abraham U. Nisperos, Perlita Nisperos Ocampo, Armando U. Nisperos, Alberto U. Nisperos, Hilario U. Nisperos,
Archimedes U. Nisperos, Buenafe Nisperos Perez, and Arthur U. Nisperos, now join their mother Esperanza Urbano
Nisperos as respondents in this case.
Issue
Petitioner, claiming that his petition is of transcendental importance as it poses a novel question of law, is asking us to
resolve the following question:
[M]ay parties to a deed of sale of a land covered by a homestead patent extend or prolong the 5-year period of
repurchase under Section 119 of Act 141, under a private writing subsequently executed by them? 34
This Court would like to address the admissibility of the 1978 contract at the outset as petitioner posits that by virtue of
this contract, the respondents’ claim had already prescribed, even if the redemption period under Section 119 of
Commonwealth Act No. 141 were extended to ten years. Petitioner claims that the June 8, 1988 Partial Deed of Sale was
actually the formal culmination of an earlier transaction between the Morla brothers and the Nisperos spouses, as shown
by the 1978 contract. Hence, more than ten years have already lapsed from the time such contract was executed to the
time the right to repurchase was sought to be exercised.35
Contrary to petitioner’s allegation in its Motion for Reconsideration before the Court of Appeals, the 1978 contract did not
surface only after the appeal; it was actually attached to the Morla brothers’ Answer 36 filed with the RTC on July 12, 1994.
Referencing this 1978 contract, the Morla brothers stated the following in their Answer:
8. Since June 28, 1978 and continuously up to the present, the defendants are in the open, continuous, exclusive, and
notorious actual physical possession, occupation, and cultivation of the (50,000 SQUARE METERS) portion of Lot No. 4353,
Pls-62, as evidenced by a private document, a xerox copy of which document is hereto attached as Annex "2" to this
answer.37
During the pre-trial, the Morla brothers and the Nisperos spouses also agreed on only the following stipulation of facts, as
stated in the RTC’s June 19, 1995 Order:
1. That the land is a Homestead originally applied for by the plaintiffs and a Homestead Patent and Original
Certificate of Title were issued to the plaintiffs;

2. That on August 2, 1988, at Caliguian, Burgos, Isabela, in the presence of the Barangay Captain, an Ilocano
writing or contract was acknowledged and confirmed by the defendants and the defendants admitted as to its
authenticity;
3. That the Transfer Certificate of Title No. T-225545 is the remaining portion of Three (3) hectares or 30, 873
square meters, which was only issued by the Register of Deeds of Isabela on March 11, 1994, and this remaining
portion was derived from the Original Certificate of Title of Alfredo Nisperos, which is OCT No. P-1542 issued in
1951;
4. That on June 8, 1988, a Partial Deed of Absolute Sale was prepared, as per Doc. No. 419; Page 84; Book 17;
Series of 1988, entered into the Notarial Book of Notary Public Severo Ladera;
5. That Transfer Certificate of Title No. T-225544 was registered in the name of the defendants, Rodolfo Morla and
Ramon Morla at the Office of the Registry of Deeds of Isabela on March 11, 1994. 38
The Morla brothers’ Position Paper/Memorandum39 likewise reiterated that the sale of the subject land happened on June
8, 1988, and referred to the 1978 contract only to prove their long possession of the subject land, just as they did in their
Answer.
If it were true that the subject land’s ownership was ceded to the Morla brothers as early as 1978, then it is inconceivable
that they would forget to bring up this important fact and use it as their key defense when they filed their Answer to the
Complaint on July 12, 1994. Even then, the Morla brothers had every opportunity to correct this lapse as they had always
been aware and in possession of the 1978 contract. They could have stipulated it during the pre-trial conference, or at
least stated it in their Position Paper. The theory advanced by the Morla brothers from the very beginning is that they are
entitled to the possession of the subject land as the owner thereof because the property was sold to them by virtue of the
Partial Deed of Sale executed on June 8, 1988. They presented the 1978 contract only to prove that they had been in
continuous and open possession since 1978. The first time the Morla brothers claimed ownership, and not mere
possession, of the subject land by virtue of the 1978 contract, was in their motion for reconsideration, after they had lost
their appeal before the Court of Appeals. The Court of Appeals was correct in not considering this argument for not
having been raised at the earliest opportunity. It is a well-settled rule that "a party who deliberately adopts a certain
theory upon which the case was decided by the lower court will not be permitted to change [it] on appeal."40 "Petitioner is
bound by the statements and stipulations he made while the case was being heard in the lower courts." 41 In Manila Electric
Company v. Benamira,42 we said:
[I]t is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the
pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or
on appeal. The individual respondents are bound by their submissions that AFSISI is their employer and they should not
be permitted to change their theory. Such a change of theory cannot be tolerated on appeal, not due to the strict
application of procedural rules but as a matter of fairness. A change of theory on appeal is objectionable because it is
contrary to the rules of fair play, justice and due process.43
Having settled the inadmissibility of the 1978 contract, we now go to the legality of the 1988 contract.
Since the subject land was acquired by the Nisperos spouses pursuant to a homestead patent, the applicable law is
Commonwealth Act No. 141, or the Public Land Act.44 Section 119 thereof specifically speaks about repurchases of
a homestead or free patent land:
Sec. 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject
to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of the conveyance.
The petitioner does not dispute the existence or validity of the 1988 contract. He simply argues that the 10-year
repurchase period he and his brother Ramon Morla had agreed to grant the Nisperos spouses, as evidenced by the 1988
contract, was contrary to law and jurisprudence, viz:
In no uncertain terms can the statutory period of five (5) years, which is fixed and non-extendible, be prolonged or
extended by agreement of the parties since it runs athwart with the express limitation of the right to repurchase provided
for in Section 119, Act 141. Spouses Nisperos cannot, therefore, use the August 2, 1988 private writing to extend the
already expired period granted under the law. To do so is to violate the law. The law must control over the revised
intention of the parties.45 (Emphasis supplied.)
Elucidating on the purpose of the homestead laws, this Court held in Republic of the Philippines v. Court of Appeals 46 :
It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-
destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State prohibits the sale or
encumbrance of the homestead (Section 116) within five years after the grant of the patent. After that five-year period the
law impliedly permits alienation of the homestead; but in line with the primordial purpose to favor the homesteader and
his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase

by the homesteader, his widow or heirs within five years. This section 117 is undoubtedly a complement of section 116. It
aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously
given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to repurchase
exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs. This
construction is clearly deducible from the terms of the statute. 47
In Fontanilla, Sr. v. Court of Appeals,48 we said:
The applicant for a homestead is to be given all the inducement that the law offers and is entitled to its full protection. Its
blessings, however, do not stop with him. This is particularly so in this case as the appellee is the son of the deceased.
There is no question then as to his status of being a legal heir. The policy of the law is not difficult to understand. The
incentive for a pioneer to venture into developing virgin land becomes more attractive if he is assured that his effort will
not go for naught should perchance his life be cut short. This is merely a recognition of how closely bound parents and
children are in Filipino family. Logic, the sense of fitness and of right, as well as pragmatic considerations thus call for
continued adherence to the policy that not the individual applicant alone but those so closely related to him as are
entitled to legal succession may take full advantage of the benefits the law confers.49
We are in full accord with the clear findings and apt ruling of the lower courts. Nowhere in Commonwealth Act No. 141
does it say that the right to repurchase under Section 119 thereof could not be extended by mutual agreement of the
parties involved. Neither would extending the period in Section 119 be against public policy as "the evident purpose of
the Public Land Act, especially the provisions thereof in relation to homesteads, is to conserve ownership of lands acquired
as homesteads in the homesteader or his heirs."50 "What cannot be bartered away is the homesteader’s right to
repurchase the homestead within five years from its conveyance, as this is what public policy by law seeks to
preserve."51 "This, in our opinion, is the only logical meaning to be given to the law, which must be liberally construed in
order to carry out its purpose."52
Petitioner does not dispute that the 1988 contract was executed freely and willingly between him and his late brother, and
the Nisperos spouses. "The freedom of contract is both a constitutional and statutory right," 53 and "the contracting parties
may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy."54 The 1988 contract neither shortens the period
provided under Section 119 nor does away with it. Instead, it gives the Nisperos spouses more time to reacquire the land
that the State gratuitously gave them. The 1988 contract therefore is not contrary to law; instead it is merely in keeping
with the purpose of the homestead law. Since the 1988 contract is valid, it should be given full force and effect. In Roxas v.
De Zuzuarregui, Jr.,55 we held:
It is basic that a contract is the law between the parties. Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law,
morals, good customs, public order or public policy, the same are binding as between the parties.56
Petitioner, who freely signed the 1988 contract, cannot now be allowed to renege on his obligation under it, simply
because he changed his mind. Article 1308 of the Civil Code provides:
The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of
them.1avvphi1
Petitioner is thus bound by the terms of the 1988 Contract, and must comply with it in good faith. Since the right to
repurchase was exercised by the Nisperos spouses before the expiration of the time given to them by the Morla brothers,
the lower courts correctly ruled in their favor.
WHEREFORE, the Petition is hereby DENIED and the March 9, 2005 Decision and December 29, 2005 Resolution of the
Court of Appeals in CA-G.R. CV No. 53527, are AFFIRMED.
SO ORDERED.
9. THIRD DIVISION
EMILIANA G. PEŇA, AMELIA C. MAR, and G.R. No. 155227-28

CARMEN REYES, Petitioners, -versus -
SPOUSES ARMANDO TOLENTINO AND Promulgated:
LETICIA TOLENTINO,
Respondents. February 9, 2011
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:

By petition for review on certiorari, the petitioners appeal the adverse decision promulgated by the Court of Appeals (CA)
on March 31, 2000, [1] and the resolution issued on August 28, 2002 (denying their motion for reconsideration).[2]
Antecedents
The petitioners are lessees of three distinct and separate parcels of land owned by the respondents, located in the
following addresses, to wit: Carmen Reyes, 1460 Velasquez, Tondo, Manila; for Amelia Mar, 479 Perla, Tondo, Manila; and
for Emiliana Pea, 1461 Sta. Maria, Tondo, Manila.
Based on the parties oral lease agreements, the petitioners agreed to pay monthly rents, pegged as of October 9,
1995 at the following rates, namely: for Carmen Reyes, P570.00; for Amelia Mar, P840.00; and for Emiliana Pea,P480.00.
On August 15, 1995, the respondents wrote a demand letter to each of the petitioners, informing that they were
terminating the respective month-to-month lease contracts effective September 15, 1995; and demanding that the
petitioners vacate and remove their houses from their respective premises, with warning that should they not heed the
demand, the respondents would charge them P3,000.00/month each as reasonable compensation for the use and
occupancy of the premises from October 1, 1995 until they would actually vacate.
After the petitioners refused to vacate within the period allowed, the respondents filed on October 9, 1995 three distinct
complaints for ejectment against the petitioners in the Metropolitan Trial Court (MeTC) of Manila. The three cases were
consolidated upon the respondents motion.
In their respective answers, the petitioners uniformly contended that the respondents could not summarily eject them
from their leased premises without circumventing Presidential Decree (P.D.) No. 20 and related laws.
During the preliminary conference, the parties agreed on the following issues: [3]
1. Whether or not each of the petitioners could be ejected on the ground that the verbal contract of
lease had expired; and
2. Whether or not the reasonable compensation demanded by the respondents was exorbitant or
unconscionable.
Ruling of the MeTC
On May 17, 1996, the MeTC ruled in favor of the respondents,[4] viz:
WHEREFORE, judgment is rendered in favor of the plaintiff spouses:
1. Ordering defendant Emiliana Pea in Civil Case No. 149598-CV to immediately vacate the lot
located at 1461 Sta. Maria, Tondo, Manila, and surrender the possession thereof to the plaintiff spouses;
to pay the latter the amount of P2,000.00 a month as reasonable compensation for the use and
occupancy of the premises from 1 October 1995 until the same is finally vacated; to pay the plaintiff
spouses the amount of P5,000.00 as attorneys fees; and to pay the costs of suit;
2. Ordering the defendant Amelia Mar in Civil Case No. 149599-CV to immediately vacate the lot
situated at 479 Perla St., Tondo, Manila, and surrender possession thereof to the plaintiff spouses; to pay
the latter the amount of P2,500.00 per month as reasonable compensation for the use and occupancy of
the premises from 1 October 1995 until the same is finally vacated; to pay the plaintiff spouses the
amount of P5,000.00 as attorneys fees; and to pay the costs of suit; and
3. Ordering the defendant Carmen Reyes in Civil Case No. 149601-CV to immediately vacate the
lot with address at 1460 Velasquez Street, Tondo, Manila, and surrender possession thereof to the plaintiff
spouses; to pay the latter the amount of P2,0500.00 a month as reasonable compensation for the use and
occupancy of the leased premises from 1 October 1995 until the same is finally vacated; to pay the
plaintiff-spouses the amount of P5,000.00 as attorneys fees; and to pay the costs of suit; and
SO ORDERED.
The MeTC explained in its decision:
Defendants themselves categorically state that the rentals on the respective lots leased to them
were paid every month. xxx Pertinent to the cases, thus, is the Supreme Court ruling in the case of Acab,
et. al. vs Court of Appeals (G.R. No. 112285, 21 February 1995) that lease agreements with no specified
period, but in which rentals are paid monthly, are considered to be on a month-to-month basis. They are
for a definite period and expire after the last day of any given thirty day period of lease, upon proper

demand and notice of lessor to vacate, and in which case, there is sufficient cause for ejectment under
Sec. 5(f) of Batas Pambansa 877, that is, the expiration of the period of the lease contract.
Ruling of the RTC
On appeal, the Regional Trial Court (RTC) modified the MeTCs decision, [5] viz:
WHEREFORE, premises considered, judgment is hereby rendered modifying the decision appealed
from as follows:
a. Defendants having stayed in the leased premises for not less than thirty (30) years, instead of
being on a month-to-month basis, the lease is fixed for a term of two (2) years reckoned from the date of
this decision.
b. Upon expiration of the term of the lease, defendants shall demolish their respective houses at
their own expense and vacate the leased premises;
c. The lease being covered by the Rent Control Law, defendants shall continue to pay the old
monthly rental to be gradually increased in accordance with said law;
d. Both parties shall pay their respective counsels the required attorney's fees; and
e. To pay the costs of the suit.
SO ORDERED.
The RTC affirmed the MeTCs holding that the leases expired at the end of every month, upon demand to vacate
by the respondents; but decreed based on the authority of the court under Article 1687 of the Civil Code to fix a longer
term that the leases were for two years reckoned from the date of its decision, unless extended by the parties pursuant to
the law and in keeping with equity and justice, considering that the respondents had allowed the petitioners to construct
their own houses of good materials on the premises, and that the petitioners had been occupants for over 30 years.
Ruling of the CA
Both parties appealed by petition for review.[6]
The petitioners petition for review was docketed as C.A.-G.R. SP NO. 44172; that of the respondents was docketed
as C.A.-G.R. SP No. 44192. Nonetheless, the separate appeals were consolidated on November 20, 1997.[7]
On March 31, 2000, the CA promulgated its decision,[8] thus:
WHEREFORE, judgment is rendered SETTING ASIDE the decision of the RTC, Branch 26, Manila and
REINSTATING the decision of the MTC, Branch 3, Manila with the
modification that the defendants shall pay theirrespective agreed rentals which may be gradually increase
d in accordance with the Rent Control Law for the use andoccupancy of the premises from 1 October
1995 until the same is finally vacated.
SO ORDERED.
The petitioners sought reconsideration, but the CA denied their motion for reconsideration on August 28, 2002,
and granted the respondents motion for execution pending appeal and ordered the MeTC to issue a writ of execution to
enforce the judgment pending appeal.
Issues
Hence, this appeal to the Court, whereby the petitioners urge the following grounds,[9] to wit:
I. THE EJECTMENT OF HEREIN PETITIONERS FROM THE SAID LEASED PREMISES IS VIOLATIVE OF P.D.
NO. 20
II. HEREIN PETITIONER CANNOT BE EJECTED FROM THE SUBJECT LEASED PROPERTY WITHOUT
CLEARLY VIOLATING THE URBAN LAND REFORM CODE (P.D. 1517) AND R.A. 3516.
Ruling of the Court
The petition lacks merit.
1.
Were the contracts of lease
for an indefinite period?

The petitioners contend that their lease contracts were covered by P.D. No. 20, [10] which suspended paragraph 1 of Article
1673,[11] Civil Code; that as a result, the expiration of the period of their leases was no longer a valid ground to eject them;
and that their leases should be deemed to be for an indefinite period.
In refutation, the respondents argue that P.D. 20 suspended only Article 1673, not Article 1687, [12] Civil Code; that under
Article 1687, a lease on a month-to-month basis was a lease with a definite period; and that the petitioners could be
ejected from the leased premises upon the expiration of the definite period, particularly as a demand to that effect was
made.
The petitioners contention is erroneous.
First of all, the petitioners reliance on P.D. 20 is futile and misplaced because that law had no application to their cause.
They ignored that Batas Pambansa Blg. 25,[13] approved on April 10, 1979 and effective immediately, had expressly
repealed P.D. 20 pursuant to its Section 10.[14]
For the enlightenment of the petitioners in order to dispel their confusion, the following brief review of the rental laws that
came after P.D. 20 and B.P. Blg. 25 is helpful.
B.P. Blg. 25 remained in force for five years, after which P.D. 1912[15] and B.P. Blg. 867 were enacted to extend the
effectivity of B.P. Blg. 25 for eight months and six months, respectively. When the extension of B.P. Blg. 25 ended on June
30, 1985, a new rental law, B.P. Blg. 877,[16] was enacted on July 1, 1985. B.P. Blg. 877, although initially effective only
until December 31, 1987, came to be extended up to December 31, 1989 by Republic Act No. 6643.[17]Subsequently,
Congress passed R.A. No. 7644[18] to further extend the effectivity of B.P. Blg. 877 by three years. Finally, R.A.
No. 8437[19] extended the rent control period provided in B.P. Blg. 877 from January 1, 1998 up to December 31, 2001.
It is clear, therefore, that B.P. Blg. 877 was the controlling rental law when the complaints against the
petitionerswere filed on October 9, 1995.
We note that on January 1, 2002, R.A. No. 9161[20] took effect. Its Section 7(e) provided that the expiration of the period of
the lease contract was still one of the grounds for judicial ejectment. Also, its Section 10 provided for the suspension of
paragraph 1 of Article 1673 of the Civil Code, which was similar to Section 6 of B.P. Blg. 877, quoted hereunder:
Sec. 6 Application of the Civil Code and Rules of Court of the Philippines Except when the lease is for a
definite period, the provisions of paragraph (1) of Article 1673 of the Civil Code of the Philippines, insofar
as they refer to residential units covered by this Act shall be suspended during the effectivity of this Act,
but other provisions of the Civil Code and the Rules of Court on lease contracts, insofar as they are not in
conflict with the provisions of the Act shall apply.
In several rulings,[21] the Court held that Section 6 of B.P. Blg. 877 did not suspend the effects of Article 1687 of the Civil
Code; and that the only effect of the suspension of paragraph 1, Article 1673 of the Civil Code was that, independently of
the grounds for ejectment enumerated in B.P. Blg. 877, the owner/lessor could not eject the tenant by reason of the
expiration of the period of lease as fixed or determined under Article 1687 of the Civil Code. Consequently, the
determination of the period of the lease could still be made in accordance with Article 1687.
Under Section 5 (f) of B.P. Blg. 877,[22] the expiration of the period of the lease is among the grounds for judicial ejectment
of a lessee. In this case, because no definite period was agreed upon by the parties, their contracts of lease being oral, the
leases were deemed to be for a definite period, considering that the rents agreed upon were being paid monthly, and
terminated at the end of every month, pursuant to Article 1687. [23] In addition, the fact that the petitioners were notified of
the expiration of the leases effective September 15, 1995 brought their right to stay in their premises to a definite end as
of that date.[24]
2
May petitioners validly raise their
alleged rights under P.D. 1517, R.A. 3516
and P.D. 2016 for the first time on appeal?
The petitioners contend that the decisions of the MeTC, RTC, and CA were contrary to law; that they held the right
of first refusal to purchase their leased premises pursuant to Sections 6 of P.D. 1517, [25] because they had resided on the
leased lots for almost 40 years, even before the respondents purchased the properties from the former owners, and
because they had erected their own apartments on the leased lots; that under Section 5 of R.A. No. 3516, [26] a lessor was
prohibited from selling the leased premises to any person other than his lessee, without securing the latters written
renunciation of his right of first refusal to purchase the leased property; and that Section 2 of P.D. 2016 [27] likewise
protected them.
The respondents counter that the petitioners could not validly raise the applicability of the cited laws for the first time in
this Court, without violating their right to due process.
In reply, the petitioners posit that the provisions of P.D. 1517 and R.A. No. 3516, although cited for the first time only on
appeal, were always presumed to be part of their affirmative or special defenses; that the lower courts were bound to take
judicial notice of and should render decisions consistent with said provisions of law; that the Court was also clothed with
ample authority to review matters even if not assigned as errors on appeal if it found that their consideration was
necessary to arrive at a just determination of a case; and that Section 8 of Rule 51 of the Rules of Court authorizes the
Court to consider and resolve a plain error, although not specifically assigned, for, otherwise, substance may be sacrificed
for technicalities.
We cannot side with the petitioners.
Firstly, the petitioners appear to have known of their supposed right of first refusal even before the respondents came to
acquire the leased premises by purchase. They implied so in their petition for review filed on May 30, 1997 in the CA:[28]
xxx It must also be borne in mind herein that the said petitioners had started occupying the said property
even before the same was purchased by the herein private respondents. In fact, the said sale should even
be considered as illegal if not null and void from the very beginning because the herein petitioners were
not even properly informed of the said sale considering that under the Urban Land Reform Code they
even have the right of first refusal over the said property. The public respondent should also consider the
said fact in resolving to give a longer period of lease to the herein petitioners and certainly not for two (2)
years only. Of course it would be a different matter if the public respondent himself (RTC) had at least
convinced if not goaded the herein private respondents to compensate the petitioners for the value of the
improvements introduced on the said leased premises in the interest of equity, fairness and justice. We
submit to this Honorable Court that the herein petitioners should be allowed to enjoy their said
improvements for a period of at least five (5) years before they can be ejected from the said leased
premises.
Yet, the petitioners did not invoke their supposed right of first refusal from the time when the respondents filed
their complaints for ejectment against them on October 9, 1995 until they brought the present recourse to this Court.
Neither did they offer any explanation for their failure to do so. It is notable that the only defense they raised is that their
eviction from the premises on the sole ground of expiration of the lease contract violated R.A. No. 9161.
Moreover, the petitioners did not also assert their supposed right of first refusal despite the respondents
informing them (through their position paper filed in the MeTC on March 21, 1996)[29] that they had terminated the
petitioners leases because they were intending to sell the premises to a third person. In fact, as the records bear out, the
only reliefs the petitioners prayed for in the MTC, RTC, and CA were the extension of their leases, and the reimbursement
by the respondents of the values of their improvements.[30] It is inferable from the petitioners silence, therefore, that they
had neither the interest nor the enthusiasm to assert the right of first refusal.
Secondly, the petitioners are precluded from invoking their supposed right of first refusal at this very late stage
after failing to assert it within a reasonable time from the respondents purchase of the respective properties where their
premises were respectively located. The presumption that they had either abandoned or declined to assert their rights
becomes fully warranted.[31]
Thirdly, it is clear that the petitioners are changing their theory of the case on appeal. That change is
impermissible on grounds of its elemental unfairness to the adverse parties, who would now be forced to adapt to the
change and to incur additional expense in doing so. Besides, such a change would effectively deprive the lower courts of
the opportunity to decide the merits of the case fairly. It is certainly a basic rule in appellate procedure that the trial court
should be allowed the meaningful opportunity not only to consider and pass upon all the issues but also to avoid or
correct any alleged errors before those issues or errors become the basis for an appeal. [32] In that regard, the Court has
observed in Carantes v. Court of Appeals:[33]
The settled rule is that defenses not pleaded in the answer may not be raised for the first time on appeal. A
party cannot, on appeal, change fundamentally the nature of the issue in the case. When a party deliberately
adopts a certain theory and the case is decided upon that theory in the court below, he will not be
permitted to change the same on appeal, because to permit him to do so would be unfair to the adverse
party.
Indeed, the settled rule in this jurisdiction, according to Mon v. Court of Appeals,[34] is that a party cannot change
his theory of the case or his cause of action on appeal. This rule affirms that courts of justice have no jurisdiction or power
to decide a question not in issue. Thus, a judgment that goes beyond the issues and purports to adjudicate something on
which the court did not hear the parties is not only irregular but also extrajudicial and invalid. [35] The legal theory under
which the controversy was heard and decided in the trial court should be the same theory under which the review on
appeal is conducted. Otherwise, prejudice will result to the adverse party. We stress that points of law, theories, issues, and
arguments not adequately brought to the attention of the lower court will not be ordinarily considered by a reviewing
court, inasmuch as they cannot be raised for the first time on appeal. [36] This would be offensive to the basic rules of fair
play, justice, and due process.[37]
Lastly, the issue of whether the leased premises were covered by P. D. 1517 or not is truly a factual question that is
properly determined by the trial court, not by this Court due to its not being a trier of facts.

3
CAs reinstatement of MeTCs decision
on the ejectment of petitioners is sustained,
subject to modification on rentals
Although the CA correctly reinstated the MeTCs decision as far as it ordered the petitioners ejectment from the leased
premises, we cannot uphold its modification by requiring the petitioners instead to pay their respective agreed rentals
which shall be gradually increased in accordance with the Rent Control Law for the use and occupancy of the premises
from 1 October 1995 until the same is finally vacated without any elucidation of the reasons for ordering the payment
of agreed rentals for the use and occupancy of the premises in lieu of the MeTCs requiring the petitioners to
pay reasonable compensation.
It is true that the MeTC had not also given any justification for fixing reasonable compensation in the respective
amounts found in the dispositive portion of its decision, instead of rentals. However, we discern that the MeTC had taken
off from the demand letters of the respondents to each of the petitioners, which included the warning to them that should
they refuse to vacate as demanded they would each be charged P3,000.00/month as reasonable compensation for the use
and occupancy of the premises from October 1, 1995 until they would actually vacate. We opt not to disturb the MeTCs
holding on reasonable compensation, in lieu of agreed rentals, considering that the petitioners did not raise any issue
against it, and considering further that the CA did not find any error committed by the MeTC as to that. At any rate, it is
worthy to note that the award of reasonable compensation, not rentals, is more consistent with the conclusion of the
MeTC that the leases of the petitioners had expired. Indeed, to peg the respondents monetary recovery to the unadjusted
rentals, instead of reasonable compensation, is not fair.
Accordingly, we modify the CAs decision by reinstating the MeTCs decision without qualification.
WHEREFORE, we modify the decision promulgated on March 31, 2000 by the Court of Appeals by reinstating the decision
dated May 17, 1996 by the Metropolitan Trial Court in Manila without qualification.
Costs of suit to be paid by the petitioners.
SO ORDERED.
10.
ESTATE OF MARGARITA D. CABACUNGAN, G.R. No. 175073

represented by LUZ LAIGO-ALI, Petitioner, - versus -
MARILOU LAIGO, PEDRO ROY LAIGO, STELLA Promulgated:
BALAGOT and SPOUSES MARIO B. CAMPOS AND
JULIA S. CAMPOS, August 15, 2011
Respondents.
x--------------------------------------------------x
DECISION
PERALTA, J.:
This Petition for Review under Rule 45 of the Rules of Court assails the October 13, 2006 Decision[1] of the Court of
Appeals in CA-G.R. CV No. 72371. The assailed decision affirmed the July 2, 2001 judgment[2] rendered by the Regional
Trial Court of La Union, Branch 33 in Civil Case No. 1031-BG a complaint for annulment of sale of real property, recovery of
ownership and possession, cancellation of tax declarations and damages filed by Margarita Cabacungan, [3] represented by
her daughter, Luz Laigo-Ali against Marilou Laigo and Pedro Roy Laigo, respondents herein, and against Estella
Balagot,[4] and the spouses Mario and Julia Campos.
The facts follow.
Margarita Cabacungan (Margarita) owned three parcels of unregistered land in Paringao and in Baccuit, Bauang,
La Union, each measuring 4,512 square meters, 1,986 square meters and 3,454 square meters. The properties were
individually covered by tax declaration all in her name.[5] Sometime in 1968, Margaritas son, Roberto Laigo, Jr. (Roberto),
applied for a non-immigrant visa to the United States, and to support his application, he allegedly asked Margarita to
transfer the tax declarations of the properties in his name. [6] For said purpose, Margarita, unknown to her other children,
executed an Affidavit of Transfer of Real Property whereby the subject properties were transferred by donation to
Roberto.[7] Not long after, Robertos visa was issued and he was able to travel to the U.S. as a tourist and returned in due
time. In 1979, he adopted respondents Pedro Laigo (Pedro) and Marilou Laigo (Marilou), [8] and then he married
respondent Estella Balagot.

In July 1990, Roberto sold the 4,512 sq m property in Baccuit to the spouses Mario and Julia Campos
for P23,000.00.[9] Then in August 1992, he sold the 1,986 sq m and 3,454 sq m lots in Paringao, respectively, to Marilou
for P100,000.00 and to Pedro for P40,000.00.[10] Allegedly, these sales were not known to Margarita and her other
children.[11]
It was only in August 1995, at Robertos wake, that Margarita came to know of the sales as told by Pedro
himself.[12] In February 1996, Margarita, represented by her daughter, Luz, instituted the instant complaint for the
annulment of said sales and for the recovery of ownership and possession of the subject properties as well as for the
cancellation of Ricardos tax declarations. Margarita admitted having accommodated Robertos request for the transfer of
the properties to his name, but pointed out that the arrangement was only for the specific purpose of supporting
his U.S. visa application. She emphasized that she never intended to divest herself of ownership over the subject lands
and, hence, Roberto had no right to sell them to respondents and the Spouses Campos. She likewise alleged that the
sales, which were fictitious and simulated considering the gross inadequacy of the stipulated price, were fraudulently
entered into by Roberto. She imputed bad faith to Pedro, Marilou and the Spouses Campos as buyers of the lots, as they
supposedly knew all along that Roberto was not the rightful owner of the properties. [13] Hence, she principally prayed that
the sales be annulled; that Robertos tax declarations be cancelled; and that the subject properties be reconveyed to her. [14]
The Spouses Campos advanced that they were innocent purchasers for value and in good faith, and had merely
relied on Robertos representation that he had the right to sell the property; and that, hence, they were not bound by
whatever agreement entered by Margarita with her son. They posited that the alleged gross inadequacy of the price would
not invalidate the sale absent a vitiation of consent or proof of any other agreement. Further, they noted that Margaritas
claim was already barred by prescription and laches owing to her long inaction in recovering the subject properties.
Finally, they believed that inasmuch as Roberto had already passed away, Margarita must have, instead, directed her claim
against his estate.[15]
In much the same way, Marilou and Pedro, [16] who likewise professed themselves to be buyers in good faith and
for value, believed that Margaritas cause of action had already been barred by laches, and that even assuming the
contrary, the cause of action was nevertheless barred by prescription as the same had accrued way back in 1968 upon the
execution of the affidavit of transfer by virtue of which an implied trust had been created. In this regard, they emphasized
that the law allowed only a period of ten (10) years within which an action to recover ownership of real property or to
enforce an implied trust thereon may be brought, but Margarita merely let it pass. [17]
On February 3, 1999, prior to pre-trial, Margarita and the Spouses Campos amicably entered into a settlement
whereby they waived their respective claims against each other. [18] Margarita died two days later and was forthwith
substituted by her estate.[19] On February 8, 1999, the trial court rendered a Partial Decision [20] approving the compromise
agreement and dismissing the complaint against the Spouses Campos. Forthwith, trial on the merits ensued with respect
to Pedro and Marilou.
On July 2, 2001, the trial court rendered judgment dismissing the complaint as follows:
WHEREFORE, in view of the foregoing considerations, the complaint is DISMISSED. [21]
The trial court ruled that the 1968 Affidavit of Transfer operated as a simple transfer of the subject properties from
Margarita to Roberto. It found no express trust created between Roberto and Margarita by virtue merely of the said
document as there was no evidence of another document showing Robertos undertaking to return the subject
properties.Interestingly, it concluded that, instead, an implied or constructive trust was created between the parties, as if
affirming that there was indeed an agreement albeit unwritten to have the properties returned to Margarita in due
time. [22]
Moreover, the trial court surmised how Margarita could have failed to recover the subject properties from Roberto
at any time between 1968, following the execution of the Affidavit of Transfer, and Robertos return from the United
States shortly thereafter. Finding Margarita guilty of laches by such inaction, the trial court barred recovery from
respondents who were found to have acquired the properties supposedly in good faith and for value.[23] It also pointed
out that recovery could no longer be pursued in this case because Margarita had likewise exhausted the ten-year
prescriptive period for reconveyance based on an implied trust which had commenced to run in 1968 upon the execution
of the Affidavit of Transfer.[24] Finally, it emphasized that mere inadequacy of the price as alleged would not be a sufficient
ground to annul the sales in favor of Pedro and Marilou absent any defect in consent. [25]
Aggrieved, petitioner appealed to the Court of Appeals which, on October 13, 2006, affirmed the trial courts
disposition. The appellate court dismissed petitioners claim that Roberto was merely a trustee of the subject properties as
there was no evidence on record supportive of the allegation that Roberto merely borrowed the properties from Margarita
upon his promise to return the same on his arrival from the United States. Further, it hypothesized that granting the
existence of an implied trust, still Margaritas action thereunder had already been circumscribed by laches. [26]
Curiously, while the appellate court had found no implied trust relation in the transaction between Margarita and
Roberto, nevertheless, it held that the ten-year prescriptive period under Article 1144 of the Civil Code, in relation to an
implied trust created under Article 1456, had already been exhausted by Margarita because her cause of action had
accrued way back in 1968; and that while laches and prescription as defenses could have availed against Roberto, the
same would be unavailing against Pedro and Marilou because the latter were supposedly buyers in good faith and for
value.[27] It disposed of the appeal, thus:
WHEREFORE, the Appeal is hereby DENIED. The assailed Decision dated 2 July 2001 of the
Regional Trial Court of Bauang, La Union, Branch 33 is AFFIRMED.
SO ORDERED.[28]
Hence, the instant recourse imputing error to the Court of Appeals in holding: (a) that the complaint is barred by
laches and prescription; (b) that the rule on innocent purchaser for value applies in this case of sale of unregistered land;
and (c) that there is no evidence to support the finding that there is an implied trust created between Margarita and her
son Roberto.[29]
Petitioner posits that the Court of Appeals should not have haphazardly applied the doctrine of laches and failed
to see that the parties in this case are bound by familial ties. They assert that laches must not be applied when an injustice
would result from it. Petitioner believes that the existence of such confidential relationship precludes a finding of
unreasonable delay on Margaritas part in enforcing her claim, especially in the face of Luzs testimony that she and
Margarita had placed trust and confidence in Roberto. Petitioner also refutes the Court of Appeals finding that there was a
donation of the properties to Roberto when the truth is that the subject properties were all that Margarita possessed and
that she could not have failed to provide for her other children nor for means by which to support herself. It reiterates that
the transfer to Roberto was only an accommodation so that he could submit proof to support his U.S. visa application.
On the issue of prescription, petitioner advances that it runs from the time Roberto, as trustee, has repudiated the
trust by selling the properties to respondents in August 15, 1992; that hence, the filing of the instant complaint in 1996
was well within the prescriptive period. Finally, petitioner states that whether a buyer is in good or bad faith is a matter
that attains relevance in sales of registered land, as corollary to the rule that a purchaser of unregistered land uninformed
of the sellers defective title acquires no better right than such seller.
Respondents stand by the ruling of the Court of Appeals. In their Comment, they theorize that if indeed Margarita
and Roberto had agreed to have the subject properties returned following the execution of the Affidavit of Transfer, then
there should have been a written agreement evincing such intention of the parties. They note that petitioners reliance on
the Affidavit of Transfer as well as on the alleged unwritten agreement for the return of the properties must fail, simply
because they are not even parties to it. Be that as it may, the said document had effectively transferred the properties to
Roberto who, in turn, had acquired the full capacity to sell them, especially since these properties could well be considered
as Robertos inheritance from Margarita who, on the contrary, did have other existing properties in her name.Moreover,
they believe that the liberal application of the rule on laches between family members does not apply in the instant case
because there is no fiduciary relationship and privity between them and Margarita.
There is merit in the petition.
To begin with, the rule is that the latitude of judicial review under Rule 45 generally excludes factual and
evidentiary reevaluation, and the Court ordinarily abides by the uniform conclusions of the trial court and the appellate
court. Yet, in the case at bar, while the courts below have both arrived at the dismissal of petitioners complaint, there still
remains unsettled the ostensible incongruence in their respective factual findings. It thus behooves us to be thorough
both in reviewing the records and in appraising the evidence, especially since an opposite conclusion is warranted and, as
will be shown, justified.
A trust is the legal relationship between one person having an equitable ownership of property and another
person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of
certain duties and the exercise of certain powers by the latter. [30] Trusts are either express or implied.[31] Express or direct
trusts are created by the direct and positive acts of the parties, by some writing or deed, or will, or by oral declaration in
words evincing an intention to create a trust.[32] Implied trusts also called trusts by operation of law, indirect trusts and
involuntary trusts arise by legal implication based on the presumed intention of the parties or on equitable principles
independent of the particular intention of the parties. [33] They are those which, without being expressed, are deducible
from the nature of the transaction as matters of intent or, independently of the particular intention of the parties, as being
inferred from the transaction by operation of law basically by reason of equity. [34]
Implied trusts are further classified into constructive trusts and resulting trusts. Constructive trusts, on the one hand, come
about in the main by operation of law and not by agreement or intention. They arise not by any word or phrase, either
expressly or impliedly, evincing a direct intention to create a trust, but one which arises in order to satisfy the demands of
justice.[35] Also known as trusts ex maleficio, trusts ex delicto and trusts de son tort, they are construed against one who by
actual or constructive fraud, duress, abuse of confidence, commission of a wrong or any form of unconscionable conduct,
artifice, concealment of questionable means, or who in any way against equity and good conscience has obtained or holds
the legal right to property which he ought not, in equity and good conscience, hold and enjoy. [36] They are aptly
characterized as fraud-rectifying trust,[37] imposed by equity to satisfy the demands of justice[38] and to defeat or prevent
the wrongful act of one of the parties.[39] Constructive trusts are illustrated in Articles 1450, 1454, 1455 and 1456. [40]

On the other hand, resulting trusts arise from the nature or circumstances of the consideration involved in a
transaction whereby one person becomes invested with legal title but is obligated in equity to hold his title for the benefit
of another. This is based on the equitable doctrine that valuable consideration and not legal title is determinative of
equitable title or interest and is always presumed to have been contemplated by the parties. [41] Such intent is presumed as
it is not expressed in the instrument or deed of conveyance and is to be found in the nature of their transaction. [42] Implied
trusts of this nature are hence describable as intention-enforcing trusts.[43] Specific examples of resulting trusts may be
found in the Civil Code, particularly Articles 1448, 1449, 1451, 1452 and 1453. [44]
Articles 1448 to 1456 of the Civil Code enumerate cases of implied trust, but the list according to Article 1447 is
not exclusive of others which may be established by the general law on trusts so long as the limitations laid down in
Article 1442 are observed,[45] that is, that they be not in conflict with the New Civil Code, the Code of Commerce, the Rules
of Court and special laws.[46]
While resulting trusts generally arise on failure of an express trust or of the purpose thereof, or on a conveyance
to one person upon a consideration from another (sometimes referred to as a purchase-money resulting trust), they may
also be imposed in other circumstances such that the court, shaping judgment in its most efficient form and preventing a
failure of justice, must decree the existence of such a trust.[47] A resulting trust, for instance, arises where, there being no
fraud or violation of the trust, the circumstances indicate intent of the parties that legal title in one be held for the benefit
of another.[48] It also arises in some instances where the underlying transaction is without consideration, such as that
contemplated in Article 1449[49] of the Civil Code. Where property, for example, is gratuitously conveyed for a particular
purpose and that purpose is either fulfilled or frustrated, the court may affirm the resulting trust in favor of the grantor or
transferor,[50] where the beneficial interest in property was not intended to vest in the grantee. [51]
Intention although only presumed, implied or supposed by law from the nature of the transaction or from the
facts and circumstances accompanying the transaction, particularly the source of the consideration is always an element of
a resulting trust[52] and may be inferred from the acts or conduct of the parties rather than from direct expression of
conduct.[53] Certainly, intent as an indispensable element, is a matter that necessarily lies in the evidence, that is, by
evidence, even circumstantial, of statements made by the parties at or before the time title passes. [54] Because an implied
trust is neither dependent upon an express agreement nor required to be evidenced by writing, [55] Article 1457[56] of our
Civil Code authorizes the admission of parole evidence to prove their existence. Parole evidence that is required to
establish the existence of an implied trust necessarily has to be trustworthy and it cannot rest on loose, equivocal or
indefinite declarations.[57]
Thus, contrary to the Court of Appeals finding that there was no evidence on record showing that an implied trust
relation arose between Margarita and Roberto, we find that petitioner before the trial court, had actually adduced
evidence to prove the intention of Margarita to transfer to Roberto only the legal title to the properties in question, with
attendant expectation that Roberto would return the same to her on accomplishment of that specific purpose for which
the transaction was entered into. The evidence of course is not documentary, but rather testimonial.
We recall that the complaint before the trial court alleged that the 1968 Affidavit of Transfer was executed merely
to accommodate Robertos request to have the properties in his name and thereby produce proof of ownership of certain
real properties in the Philippines to support his U.S. visa application. The agreement, the complaint further stated, was for
Margarita to transfer the tax declarations of the subject properties to Roberto for the said purpose and without the
intention to divest her of the rights of ownership and dominion. [58] Margarita, however, died before trial on the merits
ensued;[59] yet the allegation was substantiated by the open-court statements of her daughter, Luz, and of her niece,
Hilaria Costales (Hilaria), a disinterested witness.
In her testimony, Luz, who affirmed under oath her own presence at the execution of the Affidavit of Transfer,
described the circumstances under which Margarita and Roberto entered into the agreement. She narrated that Roberto
had wanted to travel to the U.S and to show the embassy proof of his financial capacity, he asked to borrow from
Margarita the properties involved but upon the condition that he would give them back to her upon his arrival from
the United States. She admitted that Robertos commitment to return the properties was not put in writing because they
placed trust and confidence in him, and that while she had spent most of her time in Mindanao since she married in 1956,
she would sometimes come to La Union to see her mother but she never really knew whether at one point or another her
mother had demanded the return of the properties from Roberto.[60] She further asserted that even after Robertos arrival
from the United States, it was Margarita who paid off the taxes on the subject properties and that it was only when her
health started to deteriorate that Roberto had taken up those obligations. [61] Hilarias testimony ran along the same
line. Like Luz, she was admittedly present at the execution of the Affidavit of Transfer which took place at the house she
shared with Jacinto Costales, the notarizing officer who was her own brother. She told that Roberto at the time had
wanted to travel to the U.S. but did not have properties in the Philippines which he could use to back up his visa
application; as accommodation, Margarita lent him the tax declarations covering the properties but with the
understanding that upon his return he would give them back to Margarita. She professed familiarity with the properties
involved because one of them was actually sitting close to her own property. [62]
While indeed at one point at the stand both of Luzs and Hilarias presence at the execution of the affidavit had
been put to test in subtle interjections by respondents counsel to the effect that their names and signatures did not
appear in the Affidavit of Transfer as witnesses, this, to our mind, is of no moment inasmuch as they had not been called
to testify on the fact of, or on the contents of, the Affidavit of Transfer or its due execution. Rather, their testimony was
offered to prove the circumstances surrounding its execution the circumstances from which could be derived the
unwritten understanding between Roberto and Margarita that by their act, no absolute transfer of ownership would be
effected. Besides, it would be highly unlikely for Margarita to institute the instant complaint if it were indeed her intention
to vest in Roberto, by virtue of the Affidavit of Transfer, absolute ownership over the covered properties.
It is deducible from the foregoing that the inscription of Robertos name in the Affidavit of Transfer as Margaritas
transferee is not for the purpose of transferring ownership to him but only to enable him to hold the property in trust for
Margarita. Indeed, in the face of the credible and straightforward testimony of the two witnesses, Luz and Hilaria, the
probative value of the ownership record forms in the names of respondents, together with the testimony of their witness
from the municipal assessors office who authenticated said forms, are utterly minimal to show Robertos ownership. It
suffices to say that respondents did not bother to offer evidence that would directly refute the statements made by Luz
and Hilaria in open court on the circumstances underlying the 1968 Affidavit of Transfer.
As a trustee of a resulting trust, therefore, Roberto, like the trustee of an express passive trust, is merely a
depositary of legal title having no duties as to the management, control or disposition of the property except to make a
conveyance when called upon by the cestui que trust.[63] Hence, the sales he entered into with respondents are a wrongful
conversion of the trust property and a breach of the trust. The question is: May respondents now be compelled to
reconvey the subject properties to petitioner? We rule in the affirmative.
Respondents posit that petitioners claim may never be enforced against them as they had purchased the
properties from Roberto for value and in good faith. They also claim that, at any rate, petitioners cause of action has
accrued way back in 1968 upon the execution of the Affidavit of Transfer and, hence, with the 28 long years that since
passed, petitioners claim had long become stale not only on account of laches, but also under the rules on extinctive
prescription governing a resulting trust. We do not agree.
First, fundamental is the rule in land registration law that the issue of whether the buyer of realty is in good or bad
faith is relevant only where the subject of the sale is registered land and the purchase was made from the registered
owner whose title to the land is clean, in which case the purchaser who relies on the clean title of the registered owner is
protected if he is a purchaser in good faith and for value.[64] Since the properties in question are unregistered lands,
respondents purchased the same at their own peril. Their claim of having bought the properties in good faith, i.e., without
notice that there is some other person with a right to or interest therein, would not protect them should it turn out, as it in
fact did in this case, that their seller, Roberto, had no right to sell them.
Second, the invocation of the rules on limitation of actions relative to a resulting trust is not on point because the
resulting trust relation between Margarita and Roberto had been extinguished by the latters death. A trust, it is said,
terminates upon the death of the trustee, particularly where the trust is personal to him.[65] Besides, prescription and
laches, in respect of this resulting trust relation, hardly can impair petitioners cause of action. On the one hand, in
accordance with Article 1144[66] of the Civil Code, an action for reconveyance to enforce an implied trust in ones favor
prescribes in ten (10) years from the time the right of action accrues, as it is based upon an obligation created by law. [67] It
sets in from the time the trustee performs unequivocal acts of repudiation amounting to an ouster of the cestui que
trust which are made known to the latter.[68] In this case, it was the 1992 sale of the properties to respondents that
comprised the act of repudiation which, however, was made known to Margarita only in 1995 but nevertheless impelled
her to institute the action in 1996 still well within the prescriptive period. Hardly can be considered as act of repudiation
Robertos open court declaration which he made in the 1979 adoption proceedings involving respondents to the effect
that he owned the subject properties,[69] nor even the fact that he in 1977 had entered into a lease contract on one of the
disputed properties which contract had been subject of a 1996 decision of the Court of Appeals.[70] These do not suffice to
constitute unequivocal acts in repudiation of the trust.
On the other hand, laches, being rooted in equity, is not always to be applied strictly in a way that would
obliterate an otherwise valid claim especially between blood relatives. The existence of a confidential relationship based
upon consanguinity is an important circumstance for consideration; hence, the doctrine is not to be applied mechanically
as between near relatives.[71] Adaza v. Court of Appeals[72] held that the relationship between the parties therein, who were
siblings, was sufficient to explain and excuse what would otherwise have been a long delay in enforcing the claim and the
delay in such situation should not be as strictly construed as where the parties are complete strangers vis-a-viseach other;
thus, reliance by one party upon his blood relationship with the other and the trust and confidence normally connoted in
our culture by that relationship should not be taken against him. Too, Sotto v. Teves[73] ruled that the doctrine of laches is
not strictly applied between near relatives, and the fact that the parties are connected by ties of blood or marriage tends
to excuse an otherwise unreasonable delay.
Third, there is a fundamental principle in agency that where certain property entrusted to an agent and impressed
by law with a trust in favor of the principal is wrongfully diverted, such trust follows the property in the hands of a third
person and the principal is ordinarily entitled to pursue and recover it so long as the property can be traced and identified,
and no superior equities have intervened. This principle is actually one of trusts, since the wrongful conversion gives rise to
a constructive trust which pursues the property, its product or proceeds, and permits the beneficiary to recover the
property or obtain damages for the wrongful conversion of the property. Aptly called the trust pursuit rule, it applies when
a constructive or resulting trust has once affixed itself to property in a certain state or form. [74]
Hence, a trust will follow the property through all changes in its state and form as long as such property, its
products or its proceeds, are capable of identification, even into the hands of a transferee other than a bona fidepurchaser
for value, or restitution will be enforced at the election of the beneficiary through recourse against the trustee or the
transferee personally. This is grounded on the principle in property law that ownership continues and can be asserted by
the true owner against any withholding of the object to which the ownership pertains, whether such object of the
ownership is found in the hands of an original owner or a transferee, or in a different form, as long as it can be
identified.[75] Accordingly, the person to whom is made a transfer of trust property constituting a wrongful conversion of
the trust property and a breach of the trust, when not protected as a bona fide purchaser for value, is himself liable and
accountable as a constructive trustee. The liability attaches at the moment of the transfer of trust property and continues
until there is full restoration to the beneficiary. Thus, the transferee is charged with, and can be held to the performance of
the trust, equally with the original trustee, and he can be compelled to execute a reconveyance. [76]
This scenario is characteristic of a constructive trust imposed by Article 1456 [77] of the Civil Code, which impresses
upon a person obtaining property through mistake or fraud the status of an implied trustee for the benefit of the person
from whom the property comes. Petitioner, in laying claim against respondents who are concededly transferees who
professed having validly derived their ownership from Roberto, is in effect enforcing against respondents a constructive
trust relation that arose by virtue of the wrongful and fraudulent transfer to them of the subject properties by Roberto.
Aznar Brother Realty Co. v. Aying,[78] citing Buan Vda. de Esconde v. Court of Appeals,[79] explained this form of implied
trust as follows:
A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical
trust, confidence is reposed in one person who is named a trustee for the benefit of another who is called
the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que trust.
A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. While
in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary relations, in a
constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called
trustee neither accepts any trust nor intends holding the property for the beneficiary.
xxxx
x x x [C]onstructive trusts are created by the construction of equity in order to satisfy the demands of
justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or
abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good
conscience, to hold.[80]
It is settled that an action for reconveyance based on a constructive implied trust prescribes in 10 years likewise in
accordance with Article 1144 of the Civil Code. Yet not like in the case of a resulting implied trust and an express trust,
prescription supervenes in a constructive implied trust even if the trustee does not repudiate the relationship. In other
words, repudiation of said trust is not a condition precedent to the running of the prescriptive period. [81]
As to when the prescriptive period commences to run, Crisostomo v. Garcia[82] elucidated as follows:
When property is registered in another's name, an implied or constructive trust is created by law
in favor of the true owner. The action for reconveyance of the title to the rightful owner prescribes in 10
years from the issuance of the title. An action for reconveyance based on implied or constructive
trust prescribes in ten years from the alleged fraudulent registration or date of issuance of the certificate
of title over the property.
It is now well settled that the prescriptive period to recover property obtained by fraud or
mistake, giving rise to an implied trust under Art. 1456 of the Civil Code, is 10 years pursuant to Art.
1144. This ten-year prescriptive period begins to run from the date the adverse party repudiates the
implied trust, which repudiation takes place when the adverse party registers the land.[83]
From the foregoing, it is clear that an action for reconveyance under a constructive implied trust in accordance
with Article 1456 does not prescribe unless and until the land is registered or the instrument affecting the same is
inscribed in accordance with law, inasmuch as it is what binds the land and operates constructive notice to the world.[84] In
the present case, however, the lands involved are concededly unregistered lands; hence, there is no way by which
Margarita, during her lifetime, could be notified of the furtive and fraudulent sales made in 1992 by Roberto in favor of
respondents, except by actual notice from Pedro himself in August 1995. Hence, it is from that date that prescription
began to toll. The filing of the complaint in February 1996 is well within the prescriptive period. Finally, such delay of only
six (6) months in instituting the present action hardly suffices to justify a finding of inexcusable delay or to create an
inference that Margarita has allowed her claim to stale by laches.
WHEREFORE, the Petition is GRANTED. The October 13, 2006 Decision of the Court of Appeals in CA-G.R. CV No.
72371, affirming the July 2, 2001 judgment of the Regional Trial Court of La Union, Branch 33 in Civil Case No. 1031-BG,
is REVERSED and SET ASIDE, and a new one is entered (a) directing the cancellation of the tax declarations covering the
subject properties in the name of Roberto D. Laigo and his transferees; (b) nullifying the deeds of sale executed by
Roberto D. Laigo in favor of respondents Pedro Roy Laigo and Marilou Laigo; and (c) directing said respondents to
execute reconveyance in favor of petitioner.
SO ORDERED.
11. FIRST DIVISION G.R. No. 171805 May 30, 2011 PHILIPPINE NATIONAL BANK, Petitioner,
vs. MERELO B. AZNAR; MATIAS B. AZNAR III; JOSE L. AZNAR (deceased), represented by his heirs; RAMON A.
BARCENILLA; ROSARIO T. BARCENILLA; JOSE B. ENAD (deceased), represented by his heirs; and RICARDO GABUYA
(deceased), represented by his heirs, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 172021 MERELO B. AZNAR and MATIAS B. AZNAR III, Petitioners,
vs. PHILIPPINE NATIONAL BANK, Respondent.
DECISION
Before the Court are two petitions for review on certiorari under Rule 45 of the Rules of Court both seeking to annul and
set aside the Decision1 dated September 29, 2005 as well as the Resolution2 dated March 6, 2006 of the Court of Appeals
in CA-G.R. CV No. 75744, entitled "Merelo B. Aznar, Matias B. Aznar III, Jose L. Aznar (deceased) represented by his heirs,
Ramon A. Barcenilla (deceased) represented by his heirs, Rosario T. Barcenilla, Jose B. Enad (deceased) represented by his
heirs, and Ricardo Gabuya (deceased) represented by his heirs v. Philippine National Bank, Jose Garrido and Register of
Deeds of Cebu City." The September 29, 2005 Decision of the Court of Appeals set aside the Decision 3 dated November
18, 1998 of the Regional Trial Court (RTC) of Cebu City, Branch 17, in Civil Case No. CEB-21511. Furthermore, it ordered the
Philippine National Bank (PNB) to pay Merelo B. Aznar; Matias B. Aznar III; Jose L. Aznar (deceased), represented by his
heirs; Ramon A. Barcenilla (deceased), represented by his heirs; Rosario T. Barcenilla; Jose B. Enad (deceased), represented
by his heirs; and Ricardo Gabuya (deceased), represented by his heirs (Aznar, et al.), the amount of their lien based on the
Minutes of the Special Meeting of the Board of Directors4 (Minutes) of the defunct Rural Insurance and Surety Company,
Inc. (RISCO) duly annotated on the titles of three parcels of land, plus legal interests from the time of PNB’s acquisition of
the subject properties until the finality of the judgment but dismissing all other claims of Aznar, et al. On the other hand,
the March 6, 2006 Resolution of the Court of Appeals denied the Motion for Reconsideration subsequently filed by each
party.
The facts of this case, as stated in the Decision dated September 29, 2005 of the Court of Appeals, are as follows:
In 1958, RISCO ceased operation due to business reverses. In plaintiffs’ desire to rehabilitate RISCO, they contributed a
total amount of ₱212,720.00 which was used in the purchase of the three (3) parcels of land described as follows:
"A parcel of land (Lot No. 3597 of the Talisay-Minglanilla Estate, G.L.R.O. Record No. 3732) situated in the Municipality of
Talisay, Province of Cebu, Island of Cebu. xxx containing an area of SEVENTY[-]EIGHT THOUSAND ONE HUNDRED
EIGHTY[-]FIVE SQUARE METERS (78,185) more or less. x x x" covered by Transfer Certificate of Title No. 8921 in the name
of Rural Insurance & Surety Co., Inc.";
"A parcel of land (Lot 7380 of the Talisay Minglanilla Estate, G.L.R.O. Record No. 3732), situated in the Municipality of
Talisay, Province of Cebu, Island of Cebu. xxx containing an area of THREE HUNDRED TWENTY[-]NINE THOUSAND FIVE
HUNDRED FORTY[-]SEVEN SQUARE METERS (329,547), more or less. xxx" covered by Transfer Certificate of Title No. 8922
in the name of Rural Insurance & Surety Co., Inc." and
"A parcel of land (Lot 1323 of the subdivision plan Psd-No. 5988), situated in the District of Lahug, City of Cebu, Island of
Cebu. xxx containing an area of FIFTY[-]FIVE THOUSAND SIX HUNDRED FIFTY[-]THREE (55,653) SQUARE METERS, more or
less." covered by Transfer Certificate of Title No. 24576 in the name of Rural Insurance & Surety Co., Inc."
After the purchase of the above lots, titles were issued in the name of RISCO. The amount contributed by plaintiffs
constituted as liens and encumbrances on the aforementioned properties as annotated in the titles of said lots. Such
annotation was made pursuant to the Minutes of the Special Meeting of the Board of Directors of RISCO (hereinafter
referred to as the "Minutes") on March 14, 1961, pertinent portion of which states:
xxxx
3. The President then explained that in a special meeting of the stockholders previously called for the purpose of putting
up certain amount of ₱212,720.00 for the rehabilitation of the Company, the following stockholders contributed the
amounts indicated opposite their names:
CONTRIBUTED SURPLUS
MERELO B. AZNAR ₱50,000.00
MATIAS B. AZNAR 50,000.00

JOSE L. AZNAR 27,720.00
RAMON A. BARCENILLA 25,000.00
ROSARIO T. BARCENILLA 25,000.00
JOSE B. ENAD 17,500.00
RICARDO GABUYA 17,500.00
212,720.00
xxxx
And that the respective contributions above-mentioned shall constitute as their lien or interest on the property described
above, if and when said property are titled in the name of RURAL INSURANCE & SURETY CO., INC., subject to registration
as their adverse claim in pursuance of the Provisions of Land Registration Act, (Act No. 496, as amended) until such time
their respective contributions are refunded to them completely.
x x x x"
Thereafter, various subsequent annotations were made on the same titles, including the Notice of Attachment and Writ of
Execution both dated August 3, 1962 in favor of herein defendant PNB, to wit:
On TCT No. 8921 for Lot 3597:
Entry No. 7416-V-4-D.B. – Notice of Attachment – By the Provincial Sheriff of Cebu, Civil Case No. 47725, Court of First
Instance of Manila, entitled "Philippine National Bank, Plaintiff, versus Iluminada Gonzales, et al., Defendants", attaching all
rights, interest and participation of the defendant Iluminada Gonzales and Rural Insurance & Surety Co., Inc. of the two
parcels of land covered by T.C.T. Nos. 8921, Attachment No. 330 and 185.
Date of Instrument – August 3, 1962.
Date of Inscription – August 3, 1962, 3:00 P.M.
Entry No. 7417-V-4-D.B. – Writ of Execution – By the Court of First Instance of Manila, commanding the Provincial Sheriff
of Cebu, of the lands and buildings of the defendants, to make the sum of Seventy[-]One Thousand Three Hundred Pesos
(₱71,300.00) plus interest etc., in connection with Civil Case No. 47725, File No. T-8021.
Date of Instrument – July 21, 1962.
Entry No. 7512-V-4-D.B. – Notice of Attachment – By the Provincial Sheriff of Cebu, Civil Case Nos. IV-74065, 73929,
74129, 72818, in the Municipal Court of the City of Manila, entitled "Jose Garrido, Plaintiff, versus Rural Insurance & Surety
Co., Inc., et als., Defendants", attaching all rights, interests and participation of the defendants, to the parcels of land
covered by T.C.T. Nos. 8921 & 8922 Attachment No. 186, File No. T-8921.
Date of the Instrument – August 16, 1962.
Entry No. 7513-V-4-D.B. – Writ of Execution – By the Municipal Court of the City of Manila, commanding the Provincial
Sheriff of Cebu, of the lands and buildings of the defendants, to make the sum of Three Thousand Pesos (₱3,000.00), with
interest at 12% per annum from July 20, 1959, in connection with Civil Case Nos. IV-74065, 73929, 74613 annotated above.
File No. T-8921
Date of the Inscription – August 16, 1962, 2:50 P.M.
On TCT No. 8922 for Lot 7380:
(Same as the annotations on TCT 8921)
On TCT No. 24576 for Lot 1328 (Corrected to Lot 1323-c per court order):

Entry No. 1660-V-7-D.B. – Notice of Attachment – by the Provincial Sheriff of Cebu, Civil Case No. 47725, Court of First
Instance of Manila, entitled "Philippine National Bank, Plaintiff, versus, Iluminada Gonzales, et al., Defendants", attaching all
rights, interest, and participation of the defendants Iluminada Gonzales and Rural Insurance & Surety Co., Inc. of the parcel
of land herein described.
Attachment No. 330 & 185.
Date of Instrument – August 3, 1962.
Entry No. 1661-V-7-D.B. – Writ of Execution by the Court of First Instance of Manila commanding the Provincial Sheriff of
Cebu, of the lands and buildings of the defendants to make the sum of Seventy[-]One Thousand Three Hundred Pesos
(₱71,300.00), plus interest, etc., in connection with Civil Case No. 47725.
File No. T-8921.
Date of the Instrument – July 21, 1962.
Date of the Inscription – August 3, 1962 3:00 P.M.
Entry No. 1861-V-7-D.B. - Notice of Attachment – By the Provincial Sheriff of Cebu, Civil Case Nos. IV-74065, 73929, 74129,
72613 & 72871, in the Municipal Court of the City of Manila, entitled "Jose Garrido, Plaintiff, versus Rural Insurance &
Surety Co., Inc., et als., Defendants", attaching all rights, interest and participation of the defendants, to the parcel of land
herein described.
Attachment No. 186.
File No. T-8921.
Date of the Instription – August 16, 1962 2:50 P.M.
Entry No. 1862-V-7-D.B. – Writ of Execution – by the Municipal Court of Manila, commanding the Provincial Sheriff of
Cebu, of the lands and buildings of the Defendants, to make the sum of Three Thousand Pesos (P3,000.00), with interest at
12% per annum from July 20, 1959, in connection with Civil Case Nos. IV-74065, 73929, 74129, 72613 & 72871 annotated
above.
File No. T-8921.
Date of the Inscription – August 16, 1962 at 2:50 P.M.
As a result, a Certificate of Sale was issued in favor of Philippine National Bank, being the lone and highest bidder of the
three (3) parcels of land known as Lot Nos. 3597 and 7380, covered by T.C.T. Nos. 8921 and 8922, respectively, both
situated at Talisay, Cebu, and Lot No. 1328-C covered by T.C.T. No. 24576 situated at Cebu City, for the amount of Thirty-
One Thousand Four Hundred Thirty Pesos (P31,430.00). Thereafter, a Final Deed of Sale dated May 27, 1991 in favor of the
Philippine National Bank was also issued and Transfer Certificate of Title No. 24576 for Lot 1328-C (corrected to 1323-C)
was cancelled and a new certificate of title, TCT 119848 was issued in the name of PNB on August 26, 1991.
This prompted plaintiffs-appellees to file the instant complaint seeking the quieting of their supposed title to the subject
properties, declaratory relief, cancellation of TCT and reconveyance with temporary restraining order and preliminary
injunction. Plaintiffs alleged that the subsequent annotations on the titles are subject to the prior annotation of their liens
and encumbrances. Plaintiffs further contended that the subsequent writs and processes annotated on the titles are all null
and void for want of valid service upon RISCO and on them, as stockholders. They argued that the Final Deed of Sale and
TCT No. 119848 are null and void as these were issued only after 28 years and that any right which PNB may have over the
properties had long become stale.
Defendant PNB on the other hand countered that plaintiffs have no right of action for quieting of title since the order of
the court directing the issuance of titles to PNB had already become final and executory and their validity cannot be
attacked except in a direct proceeding for their annulment. Defendant further asserted that plaintiffs, as mere stockholders
of RISCO do not have any legal or equitable right over the properties of the corporation. PNB posited that even if
plaintiff’s monetary lien had not expired, their only recourse was to require the reimbursement or refund of their
contribution.51awphi1

Aznar, et al., filed a Manifestation and Motion for Judgment on the Pleadings6 on October 5, 1998. Thus, the trial court
rendered the November 18, 1998 Decision, which ruled against PNB on the basis that there was an express trust created
over the subject properties whereby RISCO was the trustee and the stockholders, Aznar, et al., were the beneficiaries or the
cestui que trust. The dispositive portion of the said ruling reads:
WHEREFORE, judgment is hereby rendered as follows:
a) Declaring the Minutes of the Special Meeting of the Board of Directors of RISCO approved on March 14, 1961
(Annex "E," Complaint) annotated on the titles to subject properties on May 15, 1962 as an express trust whereby
RISCO was a mere trustee and the above-mentioned stockholders as beneficiaries being the true and lawful
owners of Lots 3597, 7380 and 1323;
b) Declaring all the subsequent annotations of court writs and processes, to wit: Entry No. 7416-V-4-D.B., 7417-V-
4-D.B., 7512-V-4-D.B., and 7513-V-4-D.B. in TCT No. 8921 for Lot 3597 and TCT No. 8922 for Lot 7380; Entry No.
1660-V-7-D.B., Entry No. 1661-V-7-D.B., Entry No. 1861-V-7-D.B., Entry No. 1862-V-7-D.B., Entry No. 4329-V-7-
D.B., Entry No. 3761-V-7-D.B. and Entry No. 26522 v. 34, D.B. on TCT No. 24576 for Lot 1323-C, and all other
subsequent annotations thereon in favor of third persons, as null and void;
c) Directing the Register of Deeds of the Province of Cebu and/or the Register of Deeds of Cebu City, as the case
may be, to cancel all these annotations mentioned in paragraph b) above the titles;
d) Directing the Register of Deeds of the Province of Cebu to cancel and/or annul TCTs Nos. 8921 and 8922 in the
name of RISCO, and to issue another titles in the names of the plaintiffs; and
e) Directing Philippine National Bank to reconvey TCT No. 119848 in favor of the plaintiffs.7
PNB appealed the adverse ruling to the Court of Appeals which, in its September 29, 2005 Decision, set aside the
judgment of the trial court. Although the Court of Appeals agreed with the trial court that a judgment on the pleadings
was proper, the appellate court opined that the monetary contributions made by Aznar, et al., to RISCO can only be
characterized as a loan secured by a lien on the subject lots, rather than an express trust. Thus, it directed PNB to pay
Aznar, et al., the amount of their contributions plus legal interest from the time of acquisition of the property until finality
of judgment.lawphil The dispositive portion of the decision reads:
WHEREFORE, premises considered, the assailed Judgment is hereby SET ASIDE.
A new judgment is rendered ordering Philippine National Bank to pay plaintiffs-appellees the amount of their lien based
on the Minutes of the Special Meeting of the Board of Directors duly annotated on the titles, plus legal interests from the
time of appellants’ acquisition of the subject properties until the finality of this judgment.
All other claims of the plaintiffs-appellees are hereby DISMISSED.8
Both parties moved for reconsideration but these were denied by the Court of Appeals. Hence, each party filed with this
Court their respective petitions for review on certiorari under Rule 45 of the Rules of Court, which were consolidated in a
Resolution9 dated October 2, 2006.
In PNB’s petition, docketed as G.R. No. 171805, the following assignment of errors were raised:
THE COURT OF APPEALS ERRED IN AFFIRMING THE FINDINGS OF THE TRIAL COURT THAT A JUDGMENT ON THE
PLEADINGS WAS WARRANTED DESPITE THE EXISTENCE OF GENUINE ISSUES OF FACTS ALLEGED IN PETITIONER
PNB’S ANSWER.
II
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RIGHT OF RESPONDENTS TO REFUND OR
REPAYMENT OF THEIR CONTRIBUTIONS HAD NOT PRESCRIBED AND/OR THAT THE MINUTES OF THE SPECIAL
MEETING OF THE BOARD OF DIRECTORS OF RISCO CONSTITUTED AS AN EFFECTIVE ADVERSE CLAIM.
III
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE DISMISSAL OF THE COMPLAINT ON GROUNDS OF
RES JUDICATA AND LACK OF CAUSE OF ACTION ALLEGED BY PETITIONER IN ITS ANSWER. 10
On the other hand, Aznar, et al.’s petition, docketed as G.R. No. 172021, raised the following issue:

THE COURT OF APPEALS ERRED IN CONCLUDING THAT THE CONTRIBUTIONS MADE BY THE STOCKHOLDERS OF RISCO
WERE MERELY A LOAN SECURED BY THEIR LIEN OVER THE PROPERTIES, SUBJECT TO REIMBURSEMENT OR REFUND,
RATHER THAN AN EXPRESS TRUST.11
Anent the first issue raised in G.R. No. 171805, PNB argues that a judgment on the pleadings was not proper because its
Answer,12 which it filed during the trial court proceedings of this case, tendered genuine issues of fact since it did not only
deny material allegations in Aznar, et al.’s Complaint13 but also set up special and affirmative defenses. Furthermore, PNB
maintains that, by virtue of the trial court’s judgment on the pleadings, it was denied its right to present evidence and,
therefore, it was denied due process.
The contention is meritorious.
The legal basis for rendering a judgment on the pleadings can be found in Section 1, Rule 34 of the Rules of Court which
states that "[w]here an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s
pleading, the court may, on motion of that party, direct judgment on such pleading. x x x."
Judgment on the pleadings is, therefore, based exclusively upon the allegations appearing in the pleadings of the parties
and the annexes, if any, without consideration of any evidence aliunde.14 However, when it appears that not all the
material allegations of the complaint were admitted in the answer for some of them were either denied or disputed, and
the defendant has set up certain special defenses which, if proven, would have the effect of nullifying plaintiff’s main cause
of action, judgment on the pleadings cannot be rendered.15
In the case at bar, the Court of Appeals justified the trial court’s resort to a judgment on the pleadings in the following
manner:
Perusal of the complaint, particularly, Paragraph 7 thereof reveals:
"7. That in their desire to rehabilitate RISCO, the above-named stockholders contributed a total amount of Ph₱212,720.00
which was used in the purchase of the above-described parcels of land, which amount constituted liens and
encumbrances on subject properties in favor of the above-named stockholders as annotated in the titles adverted to
above, pursuant to the Minutes of the Special Meeting of the Board of Directors of RISCO approved on March 14, 1961, a
copy of which is hereto attached as Annex "E".
On the other hand, defendant in its Answer, admitted the aforequoted allegation with the qualification that the amount
put up by the stockholders was "used as part payment" for the properties. Defendant further averred that plaintiff’s liens
and encumbrances annotated on the titles issued to RISCO constituted as "loan from the stockholders to pay part of the
purchase price of the properties" and "was a personal obligation of RISCO and was thus not a claim adverse to the
ownership rights of the corporation." With these averments, We do not find error on the part of the trial court in rendering
a judgment on the pleadings. For one, the qualification made by defendant in its answer is not sufficient to controvert the
allegations raised in the complaint. As to defendants’ contention that the money contributed by plaintiffs was in fact a
"loan" from the stockholders, reference can be made to the Minutes of the Special Meeting of the Board of Directors, from
which plaintiffs-appellees anchored their complaint, in order to ascertain the true nature of their claim over the properties.
Thus, the issues raised by the parties can be resolved on the basis of their respective pleadings and the annexes attached
thereto and do not require further presentation of evidence aliunde. 16
However, a careful reading of Aznar, et al.’s Complaint and of PNB’s Answer would reveal that both parties raised several
claims and defenses, respectively, other than what was cited by the Court of Appeals, which requires the presentation of
evidence for resolution, to wit:
Complaint (Aznar, et al.) Answer (PNB)
11. That these subsequent annotations on the titles of 10) Par. 11 is denied as the loan from
the properties in question are subject to the prior the stockholders to pay part of the
annotation of liens and encumbrances of the above- purchase price of the properties was a
named stockholders per Entry No. 458-V-7-D.B. personal obligation of RISCO and was
inscribed on TCT No. 24576 on May 15, 1962 and per thus not a claim adverse to the
Entry No. 6966-V-4-D.B. on TCT No. 8921 and TCT No. ownership rights of the corporation;
8922 on May 15, 1962;
12. That these writs and processes annotated on the 11) Par. 12 is denied as in fact notice to
titles are all null and void for total want of valid service RISCO had been sent to its last known
upon RISCO and the above-named stockholders address at Plaza Goite, Manila;
considering that as early as sometime in 1958, RISCO
ceased operations as earlier stated, and as early as May
15, 1962, the liens and encumbrances of the above-
named stockholders were annotated in the titles of
subject properties;

13. That more particularly, the Final Deed of Sale (Annex 12) Par. 13 is denied for no law requires
"G") and TCT No. 119848 are null and void as these were the final deed of sale to be executed
issued only after 28 years and 5 months (in the case of immediately after the end of the
the Final Deed of Sale) and 28 years, 6 months and 29 redemption period. Moreover, another
days (in the case of TCT 119848) from the invalid auction court of competent jurisdiction has
sale on December 27, 1962, hence, any right, if any, already ruled that PNB was entitled to a
which PNB had over subject properties had long final deed of sale;
become stale;
14. That plaintiffs continue to have possession of subject 13) Par. 14 is denied as plaintiffs are not
properties and of their corresponding titles, but they in actual possession of the land and if
never received any process concerning the petition filed they were, their possession was as
by PNB to have TCT 24576 over Lot 1323-C surrendered trustee for the creditors of RISCO like
and/or cancelled; PNB;
15. That there is a cloud created on the aforementioned 14) Par. 15 is denied as the court orders
titles of RISCO by reason of the annotate writs, directing the issuance of titles to PNB in
processes and proceedings caused by Jose Garrido and lieu of TCT 24576 and TCT 8922 are
PNB which were apparently valid or effective, but which valid judgments which cannot be set
are in truth and in fact invalid and ineffective, and aside in a collateral proceeding like the
prejudicial to said titles and to the rights of the plaintiffs, instant case.18
which should be removed and the titles quieted.17
Furthermore, apart from refuting the aforecited material allegations made by Aznar, et al., PNB also indicated in its Answer
the special and affirmative defenses of (a) prescription; (b) res judicata; (c) Aznar, et al., having no right of action for
quieting of title; (d) Aznar, et al.’s lien being ineffective and not binding to PNB; and (e) Aznar, et al.’s having no
personality to file the suit.19
From the foregoing, it is indubitably clear that it was error for the trial court to render a judgment on the pleadings and, in
effect, resulted in a denial of due process on the part of PNB because it was denied its right to present evidence. A remand
of this case would ordinarily be the appropriate course of action. However, in the interest of justice and in order to
expedite the resolution of this case which was filed with the trial court way back in 1998, the Court finds it proper to
already resolve the present controversy in light of the existence of legal grounds that would dispose of the case at bar
without necessity of presentation of further evidence on the other disputed factual claims and defenses of the parties.
A thorough and comprehensive scrutiny of the records would reveal that this case should be dismissed because Aznar, et
al., have no title to quiet over the subject properties and their true cause of action is already barred by prescription.
At the outset, the Court agrees with the Court of Appeals that the agreement contained in the Minutes of the Special
Meeting of the RISCO Board of Directors held on March 14, 1961 was a loan by the therein named stockholders to RISCO.
We quote with approval the following discussion from the Court of Appeals Decision dated September 29, 2005:
Careful perusal of the Minutes relied upon by plaintiffs-appellees in their claim, showed that their contributions shall
constitute as "lien or interest on the property" if and when said properties are titled in the name of RISCO, subject to
registration of their adverse claim under the Land Registration Act, until such time their respective contributions are
refunded to them completely.
It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation shall control. When the language of the contract
is explicit leaving no doubt as to the intention of the drafters thereof, the courts may not read into it any other intention
that would contradict its plain import.
The term lien as used in the Minutes is defined as "a discharge on property usually for the payment of some debt or
obligation. A lien is a qualified right or a proprietary interest which may be exercised over the property of another. It is a
right which the law gives to have a debt satisfied out of a particular thing. It signifies a legal claim or charge on property;
whether real or personal, as a collateral or security for the payment of some debt or obligation." Hence, from the use of
the word "lien" in the Minutes, We find that the money contributed by plaintiffs-appellees was in the nature of a loan,
secured by their liens and interests duly annotated on the titles. The annotation of their lien serves only as collateral and
does not in any way vest ownership of property to plaintiffs.20 (Emphases supplied.)
We are not persuaded by the contention of Aznar, et al., that the language of the subject Minutes created an express trust.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in another. It is a fiduciary
relationship that obliges the trustee to deal with the property for the benefit of the beneficiary. Trust relations between
parties may either be express or implied. An express trust is created by the intention of the trustor or of the parties. An
implied trust comes into being by operation of law.21
Express trusts, sometimes referred to as direct trusts, are intentionally created by the direct and positive acts of the settlor
or the trustor - by some writing, deed, or will or oral declaration. It is created not necessarily by some written words, but
by the direct and positive acts of the parties.22 This is in consonance with Article 1444 of the Civil Code, which states that
"[n]o particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended."
In other words, the creation of an express trust must be manifested with reasonable certainty and cannot be inferred from
loose and vague declarations or from ambiguous circumstances susceptible of other interpretations. 23
No such reasonable certitude in the creation of an express trust obtains in the case at bar. In fact, a careful scrutiny of the
plain and ordinary meaning of the terms used in the Minutes does not offer any indication that the parties thereto
intended that Aznar, et al., become beneficiaries under an express trust and that RISCO serve as trustor.
Indeed, we find that Aznar, et al., have no right to ask for the quieting of title of the properties at issue because they have
no legal and/or equitable rights over the properties that are derived from the previous registered owner which is RISCO,
the pertinent provision of the law is Section 2 of the Corporation Code (Batas Pambansa Blg. 68), which states that "[a]
corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its existence."
As a consequence thereof, a corporation has a personality separate and distinct from those of its stockholders and other
corporations to which it may be connected. 24 Thus, we had previously ruled in Magsaysay-Labrador v. Court of
Appeals25 that the interest of the stockholders over the properties of the corporation is merely inchoate and therefore
does not entitle them to intervene in litigation involving corporate property, to wit:
Here, the interest, if it exists at all, of petitioners-movants is indirect, contingent, remote, conjectural, consequential and
collateral. At the very least, their interest is purely inchoate, or in sheer expectancy of a right in the management of the
corporation and to share in the profits thereof and in the properties and assets thereof on dissolution, after payment of
the corporate debts and obligations.
While a share of stock represents a proportionate or aliquot interest in the property of the corporation, it does not vest
the owner thereof with any legal right or title to any of the property, his interest in the corporate property being equitable
or beneficial in nature. Shareholders are in no legal sense the owners of corporate property, which is owned by the
corporation as a distinct legal person. 26
In the case at bar, there is no allegation, much less any proof, that the corporate existence of RISCO has ceased and the
corporate property has been liquidated and distributed to the stockholders. The records only indicate that, as per
Securities and Exchange Commission (SEC) Certification27 dated June 18, 1997, the SEC merely suspended RISCO’s
Certificate of Registration beginning on September 5, 1988 due to its non-submission of SEC required reports and its
failure to operate for a continuous period of at least five years.
Verily, Aznar, et al., who are stockholders of RISCO, cannot claim ownership over the properties at issue in this case on the
strength of the Minutes which, at most, is merely evidence of a loan agreement between them and the company. There is
no indication or even a suggestion that the ownership of said properties were transferred to them which would require no
less that the said properties be registered under their names. For this reason, the complaint should be dismissed since
Aznar, et al., have no cause to seek a quieting of title over the subject properties.
At most, what Aznar, et al., had was merely a right to be repaid the amount loaned to RISCO. Unfortunately, the right to
seek repayment or reimbursement of their contributions used to purchase the subject properties is already barred by
prescription.
Section 1, Rule 9 of the Rules of Court provides that when it appears from the pleadings or the evidence on record that
the action is already barred by the statute of limitations, the court shall dismiss the claim, to wit:
Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it
appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there
is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment
or by statute of limitations, the court shall dismiss the claim. (Emphasis supplied.)
In Feliciano v. Canoza,28 we held:
We have ruled that trial courts have authority and discretion to dismiss an action on the ground of prescription when the
parties’ pleadings or other facts on record show it to be indeed time-barred x x x; and it may do so on the basis of a
motion to dismiss, or an answer which sets up such ground as an affirmative defense; or even if the ground is alleged after
judgment on the merits, as in a motion for reconsideration; or even if the defense has not been asserted at all, as where
no statement thereof is found in the pleadings, or where a defendant has been declared in default. What is essential
only, to repeat, is that the facts demonstrating the lapse of the prescriptive period, be otherwise sufficiently and
satisfactorily apparent on the record; either in the averments of the plaintiffs complaint, or otherwise established
by the evidence.29 (Emphasis supplied.)
The pertinent Civil Code provision on prescription which is applicable to the issue at hand is Article 1144(1), to wit:

The following actions must be brought within ten years from the time the right of action accrues:
1. Upon a written contract;
2. Upon an obligation created by law;
3. Upon a judgment. (Emphasis supplied.)
Moreover, in Nielson & Co., Inc. v. Lepanto Consolidated Mining Co., 30 we held that the term "written contract" includes
the minutes of the meeting of the board of directors of a corporation, which minutes were adopted by the parties
although not signed by them, to wit:
Coming now to the question of prescription raised by defendant Lepanto, it is contended by the latter that the period to
be considered for the prescription of the claim regarding participation in the profits is only four years, because the
modification of the sharing embodied in the management contract is merely verbal, no written document to that effect
having been presented. This contention is untenable. The modification appears in the minutes of the special meeting of
the Board of Directors of Lepanto held on August 21, 1940, it having been made upon the authority of its President, and in
said minutes the terms of modification had been specified. This is sufficient to have the agreement considered, for the
purpose of applying the statute of limitations, as a written contract even if the minutes were not signed by the parties (3
A.L.R., 2d, p. 831). It has been held that a writing containing the terms of a contract if adopted by two persons may
constitute a contract in writing even if the same is not signed by either of the parties (3 A.L.R., 2d, pp. 812-813). Another
authority says that an unsigned agreement the terms of which are embodied in a document unconditionally accepted by
both parties is a written contract (Corbin on Contracts, Vol. I, p. 85). 31
Applied to the case at bar, the Minutes which was approved on March 14, 1961 is considered as a written contract
between Aznar, et al., and RISCO for the reimbursement of the contributions of the former. As such, the former had a
period of ten (10) years from 1961 within which to enforce the said written contract. However, it does not appear that
Aznar, et al., filed any action for reimbursement or refund of their contributions against RISCO or even against PNB.
Instead the suit that Aznar, et al., brought before the trial court only on January 28, 1998 was one to quiet title over the
properties purchased by RISCO with their contributions. It is unmistakable that their right of action to claim for refund or
payment of their contributions had long prescribed. Thus, it was reversible error for the Court of Appeals to order PNB to
pay Aznar, et al., the amount of their liens based on the Minutes with legal interests from the time of PNB’s acquisition of
the subject properties.
In view of the foregoing, it is unnecessary for the Court to pass upon the other issues raised by the parties.
WHEREFORE, the petition of Aznar, et al., in G.R. No. 172021 is DENIED for lack of merit. The petition of PNB in G.R. No.
171805 is GRANTED. The Complaint, docketed as Civil Case No. CEB-21511, filed by Aznar, et al., is hereby DISMISSED. No
costs.
SO ORDERED.
12. G.R. No. 140528 December 7, 2011
MARIA TORBELA, represented by her heirs, namely: EULOGIO TOSINO, husband and children: CLARO, MAXIMINO,
CORNELIO, OLIVIA and CALIXTA, all surnamed TOSINO, APOLONIA TOSINO VDA. DE RAMIREZ and JULITA
TOSINO DEAN; PEDRO TORBELA, represented by his heirs, namely: JOSE and DIONISIO, both surnamed TORBELA;
EUFROSINA TORBELA ROSARIO, represented by her heirs, namely: ESTEBAN T. ROSARIO, MANUEL T. ROSARIO,
ROMULO T. ROSARIO and ANDREA ROSARIO-HADUCA; LEONILA TORBELA TAMIN; FERNANDO TORBELA,
represented by his heirs, namely: SERGIO T. TORBELA, EUTROPIA T. VELASCO, PILAR T. ZULUETA, CANDIDO T.
TORBELA, FLORENTINA T. TORBELA and PANTALEON T. TORBELA; DOLORES TORBELA TABLADA; LEONORA
TORBELA AGUSTIN, represented by her heirs, namely: PATRICIO, SEGUNDO, CONSUELO and FELIX, all surnamed
AGUSTIN; and SEVERINA TORBELA ILDEFONSO, Petitioners,
vs.
SPOUSES ANDRES T. ROSARIO and LENA DUQUE-ROSARIO and BANCO FILIPINO SAVINGS AND MORTGAGE
BANK, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 140553 LENA DUQUE-ROSARIO, Petitioner, vs. BANCO FILIPINO SAVINGS AND MORTGAGE
BANK, Respondent.
DECISION

Presently before the Court are two consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court,
both assailing the Decision1 dated June 29, 1999 and Resolution 2 dated October 22, 1999 of the Court of Appeals in CA-
G.R. CV No. 39770.
The petitioners in G.R. No. 140528 are siblings Maria Torbela, 3 Pedro Torbela,4 Eufrosina Torbela Rosario,5 Leonila Torbela
Tamin, Fernando Torbela,6 Dolores Torbela Tablada, Leonora Torbela Agustin,7 and Severina Torbela Ildefonso (Torbela
siblings).
The petitioner in G.R. No. 140553 is Lena Duque-Rosario (Duque-Rosario), who was married to, but now legally separated
from, Dr. Andres T. Rosario (Dr. Rosario). Dr. Rosario is the son of Eufrosina Torbela Rosario and the nephew of the other
Torbela siblings.
The controversy began with a parcel of land, with an area of 374 square meters, located in Urdaneta City, Pangasinan (Lot
No. 356-A). It was originally part of a larger parcel of land, known as Lot No. 356 of the Cadastral Survey of Urdaneta,
measuring 749 square meters, and covered by Original Certificate of Title (OCT) No. 16676, 8 in the name of Valeriano
Semilla (Valeriano), married to Potenciana Acosta. Under unexplained circumstances, Valeriano gave Lot No. 356-A to his
sister Marta Semilla, married to Eugenio Torbela (spouses Torbela). Upon the deaths of the spouses Torbela, Lot No. 356-A
was adjudicated in equal shares among their children, the Torbela siblings, by virtue of a Deed of Extrajudicial
Partition9 dated December 3, 1962.
On December 12, 1964, the Torbela siblings executed a Deed of Absolute Quitclaim10 over Lot No. 356-A in favor of Dr.
Rosario. According to the said Deed, the Torbela siblings "for and in consideration of the sum of NINE PESOS (₱9.00) x x x
transfer[red] and convey[ed] x x x unto the said Andres T. Rosario, that undivided portion of THREE HUNDRED SEVENTY-
FOUR square meters of that parcel of land embraced in Original Certificate of Title No. 16676 of the land records of
Pangasinan x x x."11 Four days later, on December 16, 1964, OCT No. 16676 in Valeriano’s name was partially cancelled as
to Lot No. 356-A and TCT No. 5275112 was issued in Dr. Rosario’s name covering the said property.
Another Deed of Absolute Quitclaim13 was subsequently executed on December 28, 1964, this time by Dr. Rosario,
acknowledging that he only borrowed Lot No. 356-A from the Torbela siblings and was already returning the same to the
latter for ₱1.00. The Deed stated:
That for and in consideration of the sum of one peso (₱1.00), Philippine Currency and the fact that I only borrowed the
above described parcel of land from MARIA TORBELA, married to Eulogio Tosino, EUFROSINA TORBELA, married to Pedro
Rosario, PEDRO TORBELA, married to Petra Pagador, LEONILA TORBELA, married to Fortunato Tamen, FERNANDO
TORBELA, married to Victoriana Tablada, DOLORES TORBELA, widow, LEONORA TORBELA, married to Matias Agustin and
SEVERINA TORBELA, married to Jorge Ildefonso, x x x by these presents do hereby cede, transfer and convey by way of this
ABSOLUTE QUITCLAIM unto the said Maria, Eufrosina, Pedro, Leonila, Fernando, Dolores, Leonora and Severina, all
surnamed Torbela the parcel of land described above.14 (Emphasis ours.)
The aforequoted Deed was notarized, but was not immediately annotated on TCT No. 52751.
Following the issuance of TCT No. 52751, Dr. Rosario obtained a loan from the Development Bank of the Philippines (DBP)
on February 21, 1965 in the sum of ₱70,200.00, secured by a mortgage constituted on Lot No. 356-A. The mortgage was
annotated on TCT No. 52751 on September 21, 1965 as Entry No. 243537. 15 Dr. Rosario used the proceeds of the loan for
the construction of improvements on Lot No. 356-A.
On May 16, 1967, Cornelio T. Tosino (Cornelio) executed an Affidavit of Adverse Claim, 16 on behalf of the Torbela siblings.
Cornelio deposed in said Affidavit:
3. That ANDRES T. ROSARIO later quitclaimed his rights in favor of the former owners by virtue of a Deed of
Absolute Quitclaim which he executed before Notary Public Banaga, and entered in his Notarial Registry as Dec.
No. 43; Page No. 9; Book No. I; Series of 1964;
4. That it is the desire of the parties, my aforestated kins, to register ownership over the above-described property
or to perfect their title over the same but their Deed could not be registered because the registered owner now,
ANDRES T. ROSARIO mortgaged the property with the DEVELOPMENT BANK OF THE PHILIPPINES, on September
21, 1965, and for which reason, the Title is still impounded and held by the said bank;
5. That pending payment of the obligation with the DEVELOPMENT BANK OF THE PHILIPPINES or redemption of
the Title from said bank, I, CORNELIO T. TOSINO, in behalf of my mother MARIA TORBELA-TOSINO, and my Aunts
EUFROSINA TORBELA, LEONILA TORBELA-TAMEN, DOLORES TORBELA, LEONORA TORBELA-AGUSTIN, SEVERINA
TORBELA-ILDEFONSO, and my Uncles PEDRO TORBELA and FERNANDO, also surnamed TORBELA, I request the
Register of Deeds of Pangasinan to annotate their adverse claim at the back of Transfer Certificate of Title No.
52751, based on the annexed document, Deed of Absolute Quitclaim by ANDRES T. ROSARIO, dated December
28, 1964, marked as Annex "A" and made a part of this Affidavit, and it is also requested that the DEVELOPMENT
BANK OF THE PHILIPPINES be informed accordingly.17

The very next day, on May 17, 1967, the Torbela siblings had Cornelio’s Affidavit of Adverse Claim dated May 16, 1967 and
Dr. Rosario’s Deed of Absolute Quitclaim dated December 28, 1964 annotated on TCT No. 52751 as Entry Nos.
27447118 and 274472,19 respectively.
The construction of a four-storey building on Lot No. 356-A was eventually completed. The building was initially used as a
hospital, but was later converted to a commercial building. Part of the building was leased to PT&T; and the rest to Mrs.
Andrea Rosario-Haduca, Dr. Rosario’s sister, who operated the Rose Inn Hotel and Restaurant.
Dr. Rosario was able to fully pay his loan from DBP. Under Entry No. 520197 on TCT No. 52751 20 dated March 6, 1981, the
mortgage appearing under Entry No. 243537 was cancelled per the Cancellation and Discharge of Mortgage executed by
DBP in favor of Dr. Rosario and ratified before a notary public on July 11, 1980.
In the meantime, Dr. Rosario acquired another loan from the Philippine National Bank (PNB) sometime in 1979-1981.
Records do not reveal though the original amount of the loan from PNB, but the loan agreement was amended on March
5, 1981 and the loan amount was increased to ₱450,000.00. The loan was secured by mortgages constituted on the
following properties: (1) Lot No. 356-A, covered by TCT No. 52751 in Dr. Rosario’s name; (2) Lot No. 4489, with an area of
1,862 square meters, located in Dagupan City, Pangasinan, covered by TCT No. 24832; and (3) Lot No. 5-F-8-C-2-B-2-A,
with an area of 1,001 square meters, located in Nancayasan, Urdaneta, Pangasinan, covered by TCT No. 104189.21 The
amended loan agreement and mortgage on Lot No. 356-A was annotated on TCT No. 52751 on March 6, 1981 as Entry
No. 520099.22
Five days later, on March 11, 1981, another annotation, Entry No. 520469, 23 was made on TCT No. 52751, canceling the
adverse claim on Lot No. 356-A under Entry Nos. 274471-274472, on the basis of the Cancellation and Discharge of
Mortgage executed by Dr. Rosario on March 5, 1981. Entry No. 520469 consisted of both stamped and handwritten
portions, and exactly reads:
Entry No. 520469. Cancellation of Adverse Claim executed by Andres Rosario in favor of same. The incumbrance/mortgage
appearing under Entry No. 274471-72 is now cancelled as per Cancellation and Discharge of Mortgage Ratified before
Notary Public Mauro G. Meris on March 5, 1981: Doc. No. 215; Page No. 44; Book No. 1; Series Of 1981.
Lingayen, Pangasinan, 3-11, 19981
[Signed: Pedro dela Cruz]

Register of Deeds 24
On December 8, 1981, Dr. Rosario and his wife, Duque-Rosario (spouses Rosario), acquired a third loan in the amount of
₱1,200,000.00 from Banco Filipino Savings and Mortgage Bank (Banco Filipino). To secure said loan, the spouses Rosario
again constituted mortgages on Lot No. 356-A, Lot No. 4489, and Lot No. 5-F-8-C-2-B-2-A. The mortgage on Lot No. 356-
A was annotated on TCT No. 52751 as Entry No. 533283 25 on December 18, 1981. Since the construction of a two-storey
commercial building on Lot No. 5-F-8-C-2-B-2-A was still incomplete, the loan value thereof as collateral was deducted
from the approved loan amount. Thus, the spouses Rosario could only avail of the maximum loan amount of ₱830,064.00
from Banco Filipino.
Because Banco Filipino paid the balance of Dr. Rosario’s loan from PNB, the mortgage on Lot No. 356-A in favor of PNB
was cancelled per Entry No. 53347826 on TCT No. 52751 dated December 23, 1981.
On February 13, 1986, the Torbela siblings filed before the Regional Trial Court (RTC) of Urdaneta, Pangasinan, a
Complaint for recovery of ownership and possession of Lot No. 356-A, plus damages, against the spouses Rosario, which
was docketed as Civil Case No. U-4359. On the same day, Entry Nos. 593493 and 593494 were made on TCT No. 52751
that read as follows:
Entry No. 593494 – Complaint – Civil Case No. U-4359 (For: Recovery of Ownership and Possession and Damages. (Sup.
Paper).
Entry No. 593493 – Notice of Lis Pendens – The parcel of land described in this title is subject to Lis Pendens executed by
Liliosa B. Rosario, CLAO, Trial Attorney dated February 13, 1986. Filed to TCT No. 52751
February 13, 1986-1986 February 13 – 3:30 p.m.
(SGD.) PACIFICO M. BRAGANZA

Register of Deeds27
The spouses Rosario afterwards failed to pay their loan from Banco Filipino. As of April 2, 1987, the spouses Rosario’s
outstanding principal obligation and penalty charges amounted to ₱743,296.82 and ₱151,524.00, respectively.28
Banco Filipino extrajudicially foreclosed the mortgages on Lot No. 356-A, Lot No. 4489, and Lot No. 5-F-8-C-2-B-2-A.
During the public auction on April 2, 1987, Banco Filipino was the lone bidder for the three foreclosed properties for the

price of ₱1,372,387.04. The Certificate of Sale29 dated April 2, 1987, in favor of Banco Filipino, was annotated on TCT No.
52751 on April 14, 1987 as Entry No. 610623. 30
On December 9, 1987, the Torbela siblings filed before the RTC their Amended Complaint,31 impleading Banco Filipino as
additional defendant in Civil Case No. U-4359 and praying that the spouses Rosario be ordered to redeem Lot No. 356-A
from Banco Filipino.
The spouses Rosario instituted before the RTC on March 4, 1988 a case for annulment of extrajudicial foreclosure and
damages, with prayer for a writ of preliminary injunction and temporary restraining order, against Banco Filipino, the
Provincial Ex Officio Sheriff and his Deputy, and the Register of Deeds of Pangasinan. The case was docketed as Civil Case
No. U-4667. Another notice of lis pendens was annotated on TCT No. 52751 on March 10, 1988 as Entry No. 627059, viz:
Entry No. 627059 – Lis Pendens – Dr. Andres T. Rosario and Lena Duque Rosario, Plaintiff versus Banco Filipino, et. al. Civil
Case No. U-4667 or Annulment of ExtraJudicial Foreclosure of Real Estate Mortgage – The parcel of land described in this
title is subject to Notice of Lis Pendens subscribed and sworn to before Notary Public Mauro G. Meris, as Doc. No. 21;
Page No. 5; Book 111; S-1988. March 7, 1988-1988 March 10, 1:00 p.m.
(SGD.) RUFINO M. MORENO, SR.

Register of Deeds32
The Torbela siblings intervened in Civil Case No. U-4667. Eventually, on October 17, 1990, the RTC issued an
Order33 dismissing without prejudice Civil Case No. U-4667 due to the spouses Rosario’s failure to prosecute.
Meanwhile, the Torbela siblings tried to redeem Lot No. 356-A from Banco Filipino, but their efforts were unsuccessful.
Upon the expiration of the one-year redemption period in April 1988, the Certificate of Final Sale 34and Affidavit of
Consolidation35 covering all three foreclosed properties were executed on May 24, 1988 and May 25, 1988, respectively.
On June 7, 1988, new certificates of title were issued in the name of Banco Filipino, particularly, TCT No. 165812 for Lot No.
5-F-8-C-2-B-2-A and TCT No. 165813 for Lot No. 356-A .36
The Torbela siblings thereafter filed before the RTC on August 29, 1988 a Complaint37 for annulment of the Certificate of
Final Sale dated May 24, 1988, judicial cancelation of TCT No. 165813, and damages, against Banco Filipino, the Ex Officio
Provincial Sheriff, and the Register of Deeds of Pangasinan, which was docketed as Civil Case No. U-4733.
On June 19, 1991, Banco Filipino filed before the RTC of Urdaneta City a Petition for the issuance of a writ of possession. In
said Petition, docketed as Pet. Case No. U-822, Banco Filipino prayed that a writ of possession be issued in its favor over
Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A, plus the improvements thereon, and the spouses Rosario and other persons
presently in possession of said properties be directed to abide by said writ.
The RTC jointly heard Civil Case Nos. U-4359 and U-4733 and Pet. Case No. U-822. The Decision38 on these three cases
was promulgated on January 15, 1992, the dispositive portion of which reads:
WHEREFORE, judgment is rendered:
1. Declaring the real estate mortgage over Lot 356-A covered by TCT 52751 executed by Spouses Andres Rosario
in favor of Banco Filipino, legal and valid;
2. Declaring the sheriff’s sale dated April 2, 1987 over Lot 356-A covered by TCT 52751 and subsequent final Deed
of Sale dated May 14, 1988 over Lot 356-A covered by TCT No. 52751 legal and valid;
3. Declaring Banco Filipino the owner of Lot 356-A covered by TCT No. 52751 (now TCT 165813);
4. Banco Filipino is entitled to a Writ of Possession over Lot 356-A together with the improvements thereon (Rose
Inn Building). The Branch Clerk of Court is hereby ordered to issue a writ of possession in favor of Banco Filipino;
5. [The Torbela siblings] are hereby ordered to render accounting to Banco Filipino the rental they received from
tenants of Rose Inn Building from May 14, 1988;
6. [The Torbela siblings] are hereby ordered to pay Banco Filipino the sum of ₱20,000.00 as attorney’s fees;
7. Banco Filipino is hereby ordered to give [the Torbela siblings] the right of first refusal over Lot 356-A. The
Register of Deeds is hereby ordered to annotate the right of [the Torbela siblings] at the back of TCT No. 165813
after payment of the required fees;
8. Dr. Rosario and Lena Rosario are hereby ordered to reimburse [the Torbela siblings] the market value of Lot
356-A as of December, 1964 minus payments made by the former;

9. Dismissing the complaint of [the Torbela siblings] against Banco Filipino, Pedro Habon and Rufino Moreno in
Civil Case No. U-4733; and against Banco Filipino in Civil Case No. U-4359.39
The RTC released an Amended Decision40 dated January 29, 1992, adding the following paragraph to the dispositive:
Banco Filipino is entitled to a Writ of Possession over Lot-5-F-8-C-2-[B]-2-A of the subdivision plan (LRC) Psd-122471,
covered by Transfer Certificate of Title 104189 of the Registry of Deeds of Pangasinan[.] 41
The Torbela siblings and Dr. Rosario appealed the foregoing RTC judgment before the Court of Appeals. Their appeal was
docketed as CA-G.R. CV No. 39770.
In its Decision42 dated June 29, 1999, the Court of Appeals decreed:
WHEREFORE, foregoing considered, the appealed decision is hereby AFFIRMED with modification. Items No. 6 and 7 of the
appealed decision are DELETED. Item No. 8 is modified requiring [Dr. Rosario] to pay [the Torbela siblings] actual
damages, in the amount of ₱1,200,000.00 with 6% per annum interest from finality of this decision until fully paid. [Dr.
Rosario] is further ORDERED to pay [the Torbela siblings] the amount of ₱300,000.00 as moral damages; ₱200,000.00 as
exemplary damages and ₱100,000.00 as attorney’s fees.
Costs against [Dr. Rosario].43
The Court of Appeals, in a Resolution 44 dated October 22, 1999, denied the separate Motions for Reconsideration of the
Torbela siblings and Dr. Rosario.
The Torbela siblings come before this Court via the Petition for Review in G.R. No. 140528, with the following assignment
of errors:
First Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE REGISTRATION OF THE DEED
OF ABSOLUTE QUITCLAIM EXECUTED BY [DR. ANDRES T. ROSARIO] IN FAVOR OF THE [TORBELA SIBLINGS]
DATED DECEMBER 28, 1964 AND THE REGISTRATION OF THE NOTICE OF ADVERSE CLAIM EXECUTED BY THE
[TORBELA SIBLINGS], SERVE AS THE OPERATIVE ACT TO CONVEY OR AFFECT THE LAND AND IMPROVEMENTS
THEREOF IN SO FAR AS THIRD PERSONS ARE CONCERNED.
Second Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE SUBJECT PROPERTY COVERED BY
T.C.T. NO. 52751 IS CLEAN AND FREE, DESPITE OF THE ANNOTATION OF ENCUMBRANCES OF THE NOTICE OF
ADVERSE CLAIM AND THE DEED OF ABSOLUTE QUITCLAIM APPEARING AT THE BACK THEREOF AS ENTRY NOS.
274471 AND 274472, RESPECTIVELY.
Third Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE NOTICE OF ADVERSE CLAIM OF
THE [TORBELA SIBLINGS] UNDER ENTRY NO. 274471 WAS VALIDLY CANCELLED BY THE REGISTER OF DEEDS, IN
THE ABSENCE OF A PETITION DULY FILED IN COURT FOR ITS CANCELLATION.
Fourth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RESPONDENT BANCO FILIPINO
SAVINGS AND MORTGAGE BANK IS A MORTGAGEE IN GOOD FAITH.
Fifth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE FILING OF A CIVIL CASE NO.
U-4359 ON DECEMBER 9, 1987, IMPLEADING RESPONDENT BANCO FILIPINO AS ADDITIONAL PARTY
DEFENDANT, TOLL OR SUSPEND THE RUNNING OF THE ONE YEAR PERIOD OF REDEMPTION.
Sixth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE OWNERSHIP OVER THE
SUBJECT PROPERTY WAS PREMATURELY CONSOLIDATED IN FAVOR OF RESPONDENT BANCO FILIPINO SAVINGS
AND MORTGAGE BANK.
Seventh Issue and Assignment of Error:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE SUBJECT PROPERTY IS AT LEAST
WORTH ₱1,200,000.00.45
The Torbela siblings ask of this Court:
WHEREFORE, in the light of the foregoing considerations, the [Torbela siblings] most respectfully pray that the questioned
DECISION promulgated on June 29, 1999 (Annex "A", Petition) and the RESOLUTION dated October 22, 1999 (Annex "B",
Petition) be REVERSED and SET ASIDE, and/or further MODIFIED in favor of the [Torbela siblings], and another DECISION
issue ordering, among other reliefs, the respondent Banco Filipino to reconvey back Lot No. 356-A, covered by T.C.T. No.
52751, in favor of the [Torbela siblings] who are the actual owners of the same.
The [Torbela siblings] likewise pray for such other reliefs and further remedies as may be deemed just and equitable under
the premises.46
Duque-Rosario, now legally separated from Dr. Rosario, avers in her Petition for Review in G.R. No. 140553 that Lot No.
4489 and Lot No. 5-F-8-C-2-B-2-A were registered in her name, and she was unlawfully deprived of ownership of said
properties because of the following errors of the Court of Appeals:
THE HON. COURT OF APPEALS PATENTLY ERRED IN NOT FINDING THAT THE PERIOD TO REDEEM THE PROPERTY
HAS NOT COMMENCED, HENCE, THE CERTIFICATE OF SALE, THE CONSOLIDATION OF OWNERSHIP BY [BANCO
FILIPINO], ARE NULL AND VOID.
THE COURT OF APPEALS PATENTLY ERRED IN REFUSING TO RULE THAT THE FILING OF THE COMPLAINT BEFORE
THE COURT A QUO BY THE [TORBELA SIBLINGS] HAD ALREADY BEEN PRESCRIBED. 47
Duque-Rosario prays that the appealed decision of the Court of Appeals be reversed and set aside, and that Lot No. 4489
and Lot No. 5-F-8-C-2-B-2-A be freed from all obligations and encumbrances and returned to her.
Review of findings of fact by the RTC and the Court of Appeals warranted.
A disquisition of the issues raised and/or errors assigned in the Petitions at bar unavoidably requires a re-evaluation of the
facts and evidence presented by the parties in the court a quo.
In Republic v. Heirs of Julia Ramos,48 the Court summed up the rules governing the power of review of the Court:
Ordinarily, this Court will not review, much less reverse, the factual findings of the Court of Appeals, especially where such
findings coincide with those of the trial court.http://sc.judiciary.gov.ph/jurisprudence/2010/february2010/169481.htm -
_ftn The findings of facts of the Court of Appeals are, as a general rule, conclusive and binding upon this Court, since this
Court is not a trier of facts and does not routinely undertake the re-examination of the evidence presented by the
contending parties during the trial of the case.
The above rule, however, is subject to a number of exceptions, such as (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is grave abuse of discretion; (3) when the finding is grounded entirely on
speculations, surmises, or conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both parties; (7) when the findings of the Court of Appeals
are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence
on which they are based; (9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties and which, if properly considered, would justify a different conclusion; and (10) when the findings of fact of the
Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record. 49
As the succeeding discussion will bear out, the first, fourth, and ninth exceptions are extant in these case.
Barangay conciliation was not a pre-requisite to the institution of Civil Case No. U-4359.
Dr. Rosario contends that Civil Case No. U-4359, the Complaint of the Torbela siblings for recovery of ownership and
possession of Lot No. 356-A, plus damages, should have been dismissed by the RTC because of the failure of the Torbela
siblings to comply with the prior requirement of submitting the dispute to barangay conciliation.
The Torbela siblings instituted Civil Case No. U-4359 on February 13, 1986, when Presidential Decree No. 1508,
Establishing a System of Amicably Settling Disputes at the Barangay Level, was still in effect. 50 Pertinent provisions of said
issuance read:

Section 2. Subject matters for amicable settlement. The Lupon of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable settlement of all disputes except:
1. Where one party is the government, or any subdivision or instrumentality thereof;
2. Where one party is a public officer or employee, and the dispute relates to the performance of his official
functions;
3. Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding ₱200.00;
4. Offenses where there is no private offended party;
5. Such other classes of disputes which the Prime Minister may in the interest of justice determine upon
recommendation of the Minister of Justice and the Minister of Local Government.
Section 3. Venue. Disputes between or among persons actually residing in the same barangay shall be brought for
amicable settlement before the Lupon of said barangay. Those involving actual residents of different barangays within the
same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually
resides, at the election of the complainant. However, all disputes which involved real property or any interest therein shall
be brought in the barangay where the real property or any part thereof is situated.
The Lupon shall have no authority over disputes:
1. involving parties who actually reside in barangays of different cities or municipalities, except where such
barangays adjoin each other; and
2. involving real property located in different municipalities.
xxxx
Section 6. Conciliation, pre-condition to filing of complaint. – No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the
Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary,
attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. x x x. (Emphases supplied.)
The Court gave the following elucidation on the jurisdiction of the Lupong Tagapayapa in Tavora v. Hon. Veloso 51 :
The foregoing provisions are quite clear. Section 2 specifies the conditions under which the Lupon of a barangay "shall
have authority" to bring together the disputants for amicable settlement of their dispute: The parties must be "actually
residing in the same city or municipality." At the same time, Section 3 — while reiterating that the disputants must be
"actually residing in the same barangay" or in "different barangays" within the same city or municipality — unequivocably
declares that the Lupon shall have "no authority" over disputes "involving parties who actually reside in barangays of
different cities or municipalities," except where such barangays adjoin each other.
Thus, by express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over disputes where the parties are
not actual residents of the same city or municipality, except where the barangays in which they actually reside adjoin each
other.
It is true that immediately after specifying the barangay whose Lupon shall take cognizance of a given dispute, Sec. 3 of
PD 1508 adds:
"However, all disputes which involve real property or any interest therein shall be brought in the barangay where the real
property or any part thereof is situated."
Actually, however, this added sentence is just an ordinary proviso and should operate as such.
The operation of a proviso, as a rule, should be limited to its normal function, which is to restrict or vary the operation of
the principal clause, rather than expand its scope, in the absence of a clear indication to the contrary.
"The natural and appropriate office of a proviso is . . . to except something from the enacting clause; to limit, restrict, or
qualify the statute in whole or in part; or to exclude from the scope of the statute that which otherwise would be within its
terms." (73 Am Jur 2d 467.)
Therefore, the quoted proviso should simply be deemed to restrict or vary the rule on venue prescribed in the principal
clauses of the first paragraph of Section 3, thus: Although venue is generally determined by the residence of the parties,

disputes involving real property shall be brought in the barangay where the real property or any part thereof is situated,
notwithstanding that the parties reside elsewhere within the same city/municipality. 52 (Emphases supplied.)
The original parties in Civil Case No. U-4359 (the Torbela siblings and the spouses Rosario) do not reside in the same
barangay, or in different barangays within the same city or municipality, or in different barangays of different cities or
municipalities but are adjoining each other. Some of them reside outside Pangasinan and even outside of the country
altogether. The Torbela siblings reside separately in Barangay Macalong, Urdaneta, Pangasinan; Barangay Consolacion,
Urdaneta, Pangasinan; Pangil, Laguna; Chicago, United States of America; and Canada. The spouses Rosario are residents
of Calle Garcia, Poblacion, Urdaneta, Pangasinan. Resultantly, the Lupon had no jurisdiction over the dispute and barangay
conciliation was not a pre-condition for the filing of Civil Case No. U-4359.
The Court now looks into the merits of Civil Case No. U-4359.
There was an express trust between the Torbela siblings and Dr. Rosario.
There is no dispute that the Torbela sibling inherited the title to Lot No. 356-A from their parents, the Torbela spouses,
who, in turn, acquired the same from the first registered owner of Lot No. 356-A, Valeriano.
Indeed, the Torbela siblings executed a Deed of Absolute Quitclaim on December 12, 1964 in which they transferred and
conveyed Lot No. 356-A to Dr. Rosario for the consideration of ₱9.00. However, the Torbela siblings explained that they
only executed the Deed as an accommodation so that Dr. Rosario could have Lot No. 356-A registered in his name and
use said property to secure a loan from DBP, the proceeds of which would be used for building a hospital on Lot No. 356-
A – a claim supported by testimonial and documentary evidence, and borne out by the sequence of events immediately
following the execution by the Torbela siblings of said Deed. On December 16, 1964, TCT No. 52751, covering Lot No.
356-A, was already issued in Dr. Rosario’s name. On December 28, 1964, Dr. Rosario executed his own Deed of Absolute
Quitclaim, in which he expressly acknowledged that he "only borrowed" Lot No. 356-A and was transferring and conveying
the same back to the Torbela siblings for the consideration of ₱1.00. On February 21, 1965, Dr. Rosario’s loan in the
amount of ₱70,200.00, secured by a mortgage on Lot No. 356-A, was approved by DBP. Soon thereafter, construction of a
hospital building started on Lot No. 356-A.
Among the notable evidence presented by the Torbela siblings is the testimony of Atty. Lorenza Alcantara (Atty.
Alcantara), who had no apparent personal interest in the present case. Atty. Alcantara, when she was still a boarder at the
house of Eufrosina Torbela Rosario (Dr. Rosario’s mother), was consulted by the Torbela siblings as regards the
extrajudicial partition of Lot No. 356-A. She also witnessed the execution of the two Deeds of Absolute Quitclaim by the
Torbela siblings and Dr. Rosario.
In contrast, Dr. Rosario presented TCT No. 52751, issued in his name, to prove his purported title to Lot No. 356-A. In Lee
Tek Sheng v. Court of Appeals,53 the Court made a clear distinction between title and the certificate of title:
The certificate referred to is that document issued by the Register of Deeds known as the Transfer Certificate of Title (TCT).
By title, the law refers to ownership which is represented by that document. Petitioner apparently confuses certificate with
title. Placing a parcel of land under the mantle of the Torrens system does not mean that ownership thereof can no longer
be disputed. Ownership is different from a certificate of title. The TCT is only the best proof of ownership of a piece of
land. Besides, the certificate cannot always be considered as conclusive evidence of ownership. Mere issuance of the
certificate of title in the name of any person does not foreclose the possibility that the real property may be under co-
ownership with persons not named in the certificate or that the registrant may only be a trustee or that other parties may
have acquired interest subsequent to the issuance of the certificate of title. To repeat, registration is not the equivalent of
title, but is only the best evidence thereof. Title as a concept of ownership should not be confused with the certificate of
title as evidence of such ownership although both are interchangeably used. x x x. 54 (Emphases supplied.)
Registration does not vest title; it is merely the evidence of such title. Land registration laws do not give the holder any
better title than what he actually has.55 Consequently, Dr. Rosario must still prove herein his acquisition of title to Lot No.
356-A, apart from his submission of TCT No. 52751 in his name.
Dr. Rosario testified that he obtained Lot No. 356-A after paying the Torbela siblings ₱25,000.00, pursuant to a verbal
agreement with the latter. The Court though observes that Dr. Rosario’s testimony on the execution and existence of the
verbal agreement with the Torbela siblings lacks significant details (such as the names of the parties present, dates, places,
etc.) and is not corroborated by independent evidence.
In addition, Dr. Rosario acknowledged the execution of the two Deeds of Absolute Quitclaim dated December 12, 1964
and December 28, 1964, even affirming his own signature on the latter Deed. The Parol Evidence Rule provides that when
the terms of the agreement have been reduced into writing, it is considered as containing all the terms agreed upon and
there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of
the written agreement.56 Dr. Rosario may not modify, explain, or add to the terms in the two written Deeds of Absolute
Quitclaim since he did not put in issue in his pleadings (1) an intrinsic ambiguity, mistake, or imperfection in the Deeds; (2)
failure of the Deeds to express the true intent and the agreement of the parties thereto; (3) the validity of the Deeds; or (4)
the existence of other terms agreed to by the Torbela siblings and Dr. Rosario after the execution of the Deeds.57

Even if the Court considers Dr. Rosario’s testimony on his alleged verbal agreement with the Torbela siblings, the Court
finds the same unsatisfactory. Dr. Rosario averred that the two Deeds were executed only because he was "planning to
secure loan from the Development Bank of the Philippines and Philippine National Bank and the bank needed absolute
quitclaim[.]"58 While Dr. Rosario’s explanation makes sense for the first Deed of Absolute Quitclaim dated December 12,
1964 executed by the Torbela siblings (which transferred Lot No. 356-A to Dr. Rosario for ₱9.00.00), the same could not be
said for the second Deed of Absolute Quitclaim dated December 28, 1964 executed by Dr. Rosario. In fact, Dr. Rosario’s
Deed of Absolute Quitclaim (in which he admitted that he only borrowed Lot No. 356-A and was transferring the same to
the Torbela siblings for ₱1.00.00) would actually work against the approval of Dr. Rosario’s loan by the banks. Since Dr.
Rosario’s Deed of Absolute Quitclaim dated December 28, 1964 is a declaration against his self-interest, it must be taken
as favoring the truthfulness of the contents of said Deed. 59
It can also be said that Dr. Rosario is estopped from claiming or asserting ownership over Lot No. 356-A based on his
Deed of Absolute Quitclaim dated December 28, 1964. Dr. Rosario's admission in the said Deed that he merely borrowed
Lot No. 356-A is deemed conclusive upon him. Under Article 1431 of the Civil Code, "[t]hrough estoppel an admission or
representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the
person relying thereon."60 That admission cannot now be denied by Dr. Rosario as against the Torbela siblings, the latter
having relied upon his representation.
Considering the foregoing, the Court agrees with the RTC and the Court of Appeals that Dr. Rosario only holds Lot No.
356-A in trust for the Torbela siblings.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in another. It is a fiduciary
relationship that obliges the trustee to deal with the property for the benefit of the beneficiary. Trust relations between
parties may either be express or implied. An express trust is created by the intention of the trustor or of the parties, while
an implied trust comes into being by operation of law. 61
Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either
expressly or impliedly evincing an intention to create a trust. Under Article 1444 of the Civil Code, "[n]o particular words
are required for the creation of an express trust, it being sufficient that a trust is clearly intended." 62It is possible to create a
trust without using the word "trust" or "trustee." Conversely, the mere fact that these words are used does not necessarily
indicate an intention to create a trust. The question in each case is whether the trustor manifested an intention to create
the kind of relationship which to lawyers is known as trust. It is immaterial whether or not he knows that the relationship
which he intends to create is called a trust, and whether or not he knows the precise characteristics of the relationship
which is called a trust.63
In Tamayo v. Callejo,64 the Court recognized that a trust may have a constructive or implied nature in the beginning, but
the registered owner’s subsequent express acknowledgement in a public document of a previous sale of the property to
another party, had the effect of imparting to the aforementioned trust the nature of an express trust. The same situation
exists in this case. When Dr. Rosario was able to register Lot No. 356-A in his name under TCT No. 52751 on December 16,
1964, an implied trust was initially established between him and the Torbela siblings under Article 1451 of the Civil Code,
which provides:
ART. 1451. When land passes by succession to any person and he causes the legal title to be put in the name of another, a
trust is established by implication of law for the benefit of the true owner.
Dr. Rosario’s execution of the Deed of Absolute Quitclaim on December 28, 1964, containing his express admission that he
only borrowed Lot No. 356-A from the Torbela siblings, eventually transformed the nature of the trust to an express one.
The express trust continued despite Dr. Rosario stating in his Deed of Absolute Quitclaim that he was already returning Lot
No. 356-A to the Torbela siblings as Lot No. 356-A remained registered in Dr. Rosario’s name under TCT No. 52751 and
Dr. Rosario kept possession of said property, together with the improvements thereon.
The right of the Torbela siblings to recover Lot No. 356-A has not yet prescribed.
The Court extensively discussed the prescriptive period for express trusts in the Heirs of Maximo Labanon v. Heirs of
Constancio Labanon,65 to wit:
On the issue of prescription, we had the opportunity to rule in Bueno v. Reyes that unrepudiated written express trusts are
imprescriptible:
"While there are some decisions which hold that an action upon a trust is imprescriptible, without distinguishing between
express and implied trusts, the better rule, as laid down by this Court in other decisions, is that prescription does
supervene where the trust is merely an implied one. The reason has been expressed by Justice J.B.L. Reyes in J.M. Tuason
and Co., Inc. vs. Magdangal, 4 SCRA 84, 88, as follows:
Under Section 40 of the old Code of Civil Procedure, all actions for recovery of real property prescribed in 10 years,
excepting only actions based on continuing or subsisting trusts that were considered by section 38 as imprescriptible. As
held in the case of Diaz v. Gorricho, L-11229, March 29, 1958, however, the continuing or subsisting trusts contemplated in

section 38 of the Code of Civil Procedure referred only to express unrepudiated trusts, and did not include constructive
trusts (that are imposed by law) where no fiduciary relation exists and the trustee does not recognize the trust at all."
This principle was amplified in Escay v. Court of Appeals this way: "Express trusts prescribe 10 years from the repudiation
of the trust (Manuel Diaz, et al. vs. Carmen Gorricho et al., 54 O.G. p. 8429, Sec. 40, Code of Civil Procedure)."
In the more recent case of Secuya v. De Selma, we again ruled that the prescriptive period for the enforcement of an
express trust of ten (10) years starts upon the repudiation of the trust by the trustee. 66
To apply the 10-year prescriptive period, which would bar a beneficiary’s action to recover in an express trust, the
repudiation of the trust must be proven by clear and convincing evidence and made known to the beneficiary. 67 The
express trust disables the trustee from acquiring for his own benefit the property committed to his management or
custody, at least while he does not openly repudiate the trust, and makes such repudiation known to the beneficiary
or cestui que trust. For this reason, the old Code of Civil Procedure (Act 190) declared that the rules on adverse possession
do not apply to "continuing and subsisting" (i.e., unrepudiated) trusts. In an express trust, the delay of the beneficiary is
directly attributable to the trustee who undertakes to hold the property for the former, or who is linked to the beneficiary
by confidential or fiduciary relations. The trustee's possession is, therefore, not adverse to the beneficiary, until and unless
the latter is made aware that the trust has been repudiated.68
Dr. Rosario argues that he is deemed to have repudiated the trust on December 16, 1964, when he registered Lot No. 356-
A in his name under TCT No. 52751, so when on February 13, 1986, the Torbela siblings instituted before the RTC Civil
Case No. U-4359, for the recovery of ownership and possession of Lot No. 356-A from the spouses Rosario, over 21 years
had passed. Civil Case No. U-4359 was already barred by prescription, as well as laches.
The Court already rejected a similar argument in Ringor v. Ringor69 for the following reasons:
A trustee who obtains a Torrens title over a property held in trust for him by another cannot repudiate the trust by relying
on the registration. A Torrens Certificate of Title in Jose’s name did not vest ownership of the land upon him. The Torrens
system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a
usurper from the true owner. The Torrens system was not intended to foment betrayal in the performance of a trust. It
does not permit one to enrich himself at the expense of another. Where one does not have a rightful claim to the
property, the Torrens system of registration can confirm or record nothing. Petitioners cannot rely on the registration of
the lands in Jose’s name nor in the name of the Heirs of Jose M. Ringor, Inc., for the wrong result they seek. For Jose could
not repudiate a trust by relying on a Torrens title he held in trust for his co-heirs. The beneficiaries are entitled to enforce
the trust, notwithstanding the irrevocability of the Torrens title. The intended trust must be sustained. 70 (Emphasis
supplied.)
In the more recent case of Heirs of Tranquilino Labiste v. Heirs of Jose Labiste, 71 the Court refused to apply prescription
and laches and reiterated that:
[P]rescription and laches will run only from the time the express trust is repudiated. The Court has held that for acquisitive
prescription to bar the action of the beneficiary against the trustee in an express trust for the recovery of the property held
in trust it must be shown that: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of
the cestui que trust; (b) such positive acts of repudiation have been made known to the cestui que trust, and (c) the
evidence thereon is clear and conclusive. Respondents cannot rely on the fact that the Torrens title was issued in the name
of Epifanio and the other heirs of Jose. It has been held that a trustee who obtains a Torrens title over property held in
trust by him for another cannot repudiate the trust by relying on the registration. The rule requires a clear repudiation of
the trust duly communicated to the beneficiary. The only act that can be construed as repudiation was when respondents
filed the petition for reconstitution in October 1993. And since petitioners filed their complaint in January 1995, their cause
of action has not yet prescribed, laches cannot be attributed to them.72 (Emphasis supplied.)
It is clear that under the foregoing jurisprudence, the registration of Lot No. 356-A by Dr. Rosario in his name under TCT
No. 52751 on December 16, 1964 is not the repudiation that would have caused the 10-year prescriptive period for the
enforcement of an express trust to run.
The Court of Appeals held that Dr. Rosario repudiated the express trust when he acquired another loan from PNB and
constituted a second mortgage on Lot No. 356-A sometime in 1979, which, unlike the first mortgage to DBP in 1965, was
without the knowledge and/or consent of the Torbela siblings.
The Court only concurs in part with the Court of Appeals on this matter.
For repudiation of an express trust to be effective, the unequivocal act of repudiation had to be made known to the
Torbela siblings as the cestuis que trust and must be proven by clear and conclusive evidence. A scrutiny of TCT No. 52751
reveals the following inscription:
Entry No. 520099

Amendment of the mortgage in favor of PNB inscribed under Entry No. 490658 in the sense that the consideration thereof
has been increased to PHILIPPINE PESOS Four Hundred Fifty Thousand Pesos only (₱450,000.00) and to secure any and all
negotiations with PNB, whether contracted before, during or after the date of this instrument, acknowledged before
Notary Public of Pangasinan Alejo M. Dato as Doc. No. 198, Page No. 41, Book No. 11, Series of 1985.
Date of Instrument March 5, 1981
Date of Inscription March 6, 198173
Although according to Entry No. 520099, the original loan and mortgage agreement of Lot No. 356-A between Dr. Rosario
and PNB was previously inscribed as Entry No. 490658, Entry No. 490658 does not actually appear on TCT No. 52751 and,
thus, it cannot be used as the reckoning date for the start of the prescriptive period.
The Torbela siblings can only be charged with knowledge of the mortgage of Lot No. 356-A to PNB on March 6, 1981
when the amended loan and mortgage agreement was registered on TCT No. 52751 as Entry No. 520099. Entry No.
520099 is constructive notice to the whole world74 that Lot No. 356-A was mortgaged by Dr. Rosario to PNB as security for
a loan, the amount of which was increased to ₱450,000.00. Hence, Dr. Rosario is deemed to have effectively repudiated the
express trust between him and the Torbela siblings on March 6, 1981, on which day, the prescriptive period for the
enforcement of the express trust by the Torbela siblings began to run.
From March 6, 1981, when the amended loan and mortgage agreement was registered on TCT No. 52751, to February 13,
1986, when the Torbela siblings instituted before the RTC Civil Case No. U-4359 against the spouses Rosario, only about
five years had passed. The Torbela siblings were able to institute Civil Case No. U-4359 well before the lapse of the 10-year
prescriptive period for the enforcement of their express trust with Dr. Rosario.
Civil Case No. U-4359 is likewise not barred by laches. Laches means the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it. As the Court explained in the preceding paragraphs, the Torbela
siblings instituted Civil Case No. U-4359 five years after Dr. Rosario’s repudiation of the express trust, still within the 10-
year prescriptive period for enforcement of such trusts. This does not constitute an unreasonable delay in asserting one's
right. A delay within the prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief.
Laches apply only in the absence of a statutory prescriptive period. 75
Banco Filipino is not a mortgagee and buyer in good faith.
Having determined that the Torbela siblings are the true owners and Dr. Rosario merely the trustee of Lot No. 356-A, the
Court is next faced with the issue of whether or not the Torbela siblings may still recover Lot No. 356-A considering that
Dr. Rosario had already mortgaged Lot No. 356-A to Banco Filipino, and upon Dr. Rosario’s default on his loan obligations,
Banco Filipino foreclosed the mortgage, acquired Lot No. 356-A as the highest bidder at the foreclosure sale, and
consolidated title in its name under TCT No. 165813. The resolution of this issue depends on the answer to the question of
whether or not Banco Filipino was a mortgagee in good faith.
Under Article 2085 of the Civil Code, one of the essential requisites of the contract of mortgage is that the mortgagor
should be the absolute owner of the property to be mortgaged; otherwise, the mortgage is considered null and void.
However, an exception to this rule is the doctrine of "mortgagee in good faith." Under this doctrine, even if the mortgagor
is not the owner of the mortgaged property, the mortgage contract and any foreclosure sale arising therefrom are given
effect by reason of public policy. This principle is based on the rule that all persons dealing with property covered by a
Torrens Certificate of Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title.
This is the same rule that underlies the principle of "innocent purchasers for value." The prevailing jurisprudence is that a
mortgagee has a right to rely in good faith on the certificate of title of the mortgagor to the property given as security and
in the absence of any sign that might arouse suspicion, has no obligation to undertake further investigation. Hence, even if
the mortgagor is not the rightful owner of, or does not have a valid title to, the mortgaged property, the mortgagee in
good faith is, nonetheless, entitled to protection.76
On one hand, the Torbela siblings aver that Banco Filipino is not a mortgagee in good faith because as early as May 17,
1967, they had already annotated Cornelio’s Adverse Claim dated May 16, 1967 and Dr. Rosario’s Deed of Absolute
Quitclaim dated December 28, 1964 on TCT No. 52751 as Entry Nos. 274471-274472, respectively.
On the other hand, Banco Filipino asseverates that it is a mortgagee in good faith because per Section 70 of Presidential
Decree No. 1529, otherwise known as the Property Registration Decree, the notice of adverse claim, registered on May 17,
1967 by the Torbela siblings under Entry Nos. 274471-274472 on TCT No. 52751, already lapsed after 30 days or on June
16, 1967. Additionally, there was an express cancellation of Entry Nos. 274471-274472 by Entry No. 520469 dated March
11, 1981. So when Banco Filipino approved Dr. Rosario’s loan for ₱1,200,000.00 and constituted a mortgage on Lot No.
356-A (together with two other properties) on December 8, 1981, the only other encumbrance on TCT No. 52751 was
Entry No. 520099 dated March 6, 1981, i.e., the amended loan and mortgage agreement between Dr. Rosario and PNB

(which was eventually cancelled after it was paid off with part of the proceeds from Dr. Rosario’s loan from Banco Filipino).
Hence, Banco Filipino was not aware that the Torbela siblings’ adverse claim on Lot No. 356-A still subsisted.
The Court finds that Banco Filipino is not a mortgagee in good faith. Entry Nos. 274471-274472 were not validly cancelled,
and the improper cancellation should have been apparent to Banco Filipino and aroused suspicion in said bank of some
defect in Dr. Rosario’s title.
The purpose of annotating the adverse claim on the title of the disputed land is to apprise third persons that there is a
controversy over the ownership of the land and to preserve and protect the right of the adverse claimant during the
pendency of the controversy. It is a notice to third persons that any transaction regarding the disputed land is subject to
the outcome of the dispute.77
Adverse claims were previously governed by Section 110 of Act No. 496, otherwise known as the Land Registration Act,
quoted in full below:
ADVERSE CLAIM
SEC. 110. Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the
date of the original registration, may, if no other provision is made in this Act for registering the same, make a statement
in writing setting forth fully his alleged right or interest, and how or under whom acquired, and a reference to the volume
and page of the certificate of title of the registered owner, and a description of the land in which the right or interest is
claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant’s residence, and designate a place at
which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim, and the
court, upon a petition of any party in interest, shall grant a speedy hearing upon the question of the validity of such
adverse claim and shall enter such decree therein as justice and equity may require. If the claim is adjudged to be invalid,
the registration shall be cancelled. If in any case the court after notice and hearing shall find that a claim thus registered
was frivolous or vexatious, it may tax the adverse claimant double or treble costs in its discretion.
Construing the aforequoted provision, the Court stressed in Ty Sin Tei v. Lee Dy Piao 78 that "[t]he validity or efficaciousness
of the [adverse] claim x x x may only be determined by the Court upon petition by an interested party, in which event, the
Court shall order the immediate hearing thereof and make the proper adjudication as justice and equity may warrant. And
it is ONLY when such claim is found unmeritorious that the registration thereof may be cancelled." The Court likewise
pointed out in the same case that while a notice of lis pendens may be cancelled in a number of ways, "the same is not
true in a registered adverse claim, for it may be cancelled only in one instance, i.e., after the claim is adjudged invalid or
unmeritorious by the Court x x x;" and "if any of the registrations should be considered unnecessary or superfluous, it
would be the notice of lis pendens and not the annotation of the adverse claim which is more permanent and cannot be
cancelled without adequate hearing and proper disposition of the claim."
With the enactment of the Property Registration Decree on June 11, 1978, Section 70 thereof now applies to adverse
claims:
SEC. 70. Adverse claim. – Whoever claims any part or interest in registered land adverse to the registered owner, arising
subsequent to the date of the original registrations, may, if no other provision is made in this Decree for registering the
same, make a statement in writing setting forth fully his alleged right, or interest, and how or under whom acquired, a
reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a
description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant’s residence, and a place at which all
notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of
title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said
period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest:
Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered by the
same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the
land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of
the validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is
adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and
hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than
one thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may
withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect. (Emphases supplied.)
In Sajonas v. Court of Appeals,79 the Court squarely interpreted Section 70 of the Property Registration Decree, particularly,
the new 30-day period not previously found in Section 110 of the Land Registration Act, thus:

In construing the law aforesaid, care should be taken that every part thereof be given effect and a construction that could
render a provision inoperative should be avoided, and inconsistent provisions should be reconciled whenever possible as
parts of a harmonious whole. For taken in solitude, a word or phrase might easily convey a meaning quite different from
the one actually intended and evident when a word or phrase is considered with those with which it is associated. In
ascertaining the period of effectivity of an inscription of adverse claim, we must read the law in its entirety. Sentence three,
paragraph two of Section 70 of P.D. 1529 provides:
"The adverse claim shall be effective for a period of thirty days from the date of registration."
At first blush, the provision in question would seem to restrict the effectivity of the adverse claim to thirty days. But the
above provision cannot and should not be treated separately, but should be read in relation to the sentence following,
which reads:
"After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor
by the party in interest."
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the lapse of thirty days, then it
would not have been necessary to include the foregoing caveat to clarify and complete the rule. For then, no adverse
claim need be cancelled. If it has been automatically terminated by mere lapse of time, the law would not have required
the party in interest to do a useless act.
A statute's clauses and phrases must not be taken separately, but in its relation to the statute's totality. Each statute must,
in fact, be construed as to harmonize it with the pre-existing body of laws. Unless clearly repugnant, provisions of statutes
must be reconciled. The printed pages of the published Act, its history, origin, and its purposes may be examined by the
courts in their construction. x x x.
xxxx
Construing the provision as a whole would reconcile the apparent inconsistency between the portions of the law such that
the provision on cancellation of adverse claim by verified petition would serve to qualify the provision on the effectivity
period. The law, taken together, simply means that the cancellation of the adverse claim is still necessary to render it
ineffective, otherwise, the inscription will remain annotated and shall continue as a lien upon the property. For if the
adverse claim has already ceased to be effective upon the lapse of said period, its cancellation is no longer necessary and
the process of cancellation would be a useless ceremony.
It should be noted that the law employs the phrase "may be cancelled," which obviously indicates, as inherent in its
decision making power, that the court may or may not order the cancellation of an adverse claim, notwithstanding such
provision limiting the effectivity of an adverse claim for thirty days from the date of registration. The court cannot be
bound by such period as it would be inconsistent with the very authority vested in it. A fortiori, the limitation on the
period of effectivity is immaterial in determining the validity or invalidity of an adverse claim which is the principal issue to
be decided in the court hearing. It will therefore depend upon the evidence at a proper hearing for the court to determine
whether it will order the cancellation of the adverse claim or not.
To interpret the effectivity period of the adverse claim as absolute and without qualification limited to thirty days defeats
the very purpose for which the statute provides for the remedy of an inscription of adverse claim, as the annotation of an
adverse claim is a measure designed to protect the interest of a person over a piece of real property where the registration
of such interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the
Property Registration Decree), and serves as a warning to third parties dealing with said property that someone is claiming
an interest or the same or a better right than the registered owner thereof.
The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the
adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be
established or revoked, all for the purpose of determining at last the existence of any encumbrance on the title arising
from such adverse claim. This is in line with the provision immediately following:
"Provided, however, that after cancellation, no second adverse claim shall be registered by the same claimant."
Should the adverse claimant fail to sustain his interest in the property, the adverse claimant will be precluded from
registering a second adverse claim based on the same ground.
It was held that "validity or efficaciousness of the claim may only be determined by the Court upon petition by an
interested party, in which event, the Court shall order the immediate hearing thereof and make the proper adjudication as
justice and equity may warrant. And it is only when such claim is found unmeritorious that the registration of the adverse
claim may be cancelled, thereby protecting the interest of the adverse claimant and giving notice and warning to third
parties."80 (Emphases supplied.)

Whether under Section 110 of the Land Registration Act or Section 70 of the Property Registration Decree, notice of
adverse claim can only be cancelled after a party in interest files a petition for cancellation before the RTC wherein the
property is located, and the RTC conducts a hearing and determines the said claim to be invalid or unmeritorious.
No petition for cancellation has been filed and no hearing has been conducted herein to determine the validity or merit of
the adverse claim of the Torbela siblings. Entry No. 520469 cancelled the adverse claim of the Torbela siblings, annotated
as Entry Nos. 274471-774472, upon the presentation by Dr. Rosario of a mere Cancellation and Discharge of Mortgage.
Regardless of whether or not the Register of Deeds should have inscribed Entry No. 520469 on TCT No. 52751, Banco
Filipino could not invoke said inscription in support of its claim of good faith. There were several things amiss in Entry No.
520469 which should have already aroused suspicions in Banco Filipino, and compelled the bank to look beyond TCT No.
52751 and inquire into Dr. Rosario’s title. First, Entry No. 520469 does not mention any court order as basis for the
cancellation of the adverse claim. Second, the adverse claim was not a mortgage which could be cancelled with Dr.
Rosario’s Cancellation and Discharge of Mortgage. And third, the adverse claim was against Dr. Rosario, yet it was
cancelled based on a document also executed by Dr. Rosario.
It is a well-settled rule that a purchaser or mortgagee cannot close his eyes to facts which should put a reasonable man
upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the
vendor or mortgagor. His mere refusal to believe that such defect exists, or his willful closing of his eyes to the possibility
of the existence of a defect in the vendor's or mortgagor's title, will not make him an innocent purchaser or mortgagee for
value, if it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defects as
would have led to its discovery had he acted with the measure of precaution which may be required of a prudent man in a
like situation.81
While the defective cancellation of Entry Nos. 274471-274472 by Entry No. 520469 might not be evident to a private
individual, the same should have been apparent to Banco Filipino. Banco Filipino is not an ordinary mortgagee, but is a
mortgagee-bank, whose business is impressed with public interest. In fact, in one case, 82 the Court explicitly declared that
the rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks. In
another case,83 the Court adjudged that unlike private individuals, a bank is expected to exercise greater care and
prudence in its dealings, including those involving registered lands. A banking institution is expected to exercise due
diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it
as security for a loan must be a standard and indispensable part of its operations.
Banco Filipino cannot be deemed a mortgagee in good faith, much less a purchaser in good faith at the foreclosure sale of
Lot No. 356-A. Hence, the right of the Torbela siblings over Lot No. 356-A is superior over that of Banco Filipino; and as
the true owners of Lot No. 356-A, the Torbela siblings are entitled to a reconveyance of said property even from Banco
Filipino.
Nonetheless, the failure of Banco Filipino to comply with the due diligence requirement was not the result of a dishonest
purpose, some moral obliquity, or breach of a known duty for some interest or ill will that partakes of fraud that would
justify damages.84
Given the reconveyance of Lot No. 356-A to the Torbela siblings, there is no more need to address issues concerning
redemption, annulment of the foreclosure sale and certificate of sale (subject matter of Civil Case No. U-4733), or issuance
of a writ of possession in favor of Banco Filipino (subject matter of Pet. Case No. U-822) insofar as Lot No. 356-A is
concerned. Such would only be superfluous. Banco Filipino, however, is not left without any recourse should the
foreclosure and sale of the two other mortgaged properties be insufficient to cover Dr. Rosario’s loan, for the bank may
still bring a proper suit against Dr. Rosario to collect the unpaid balance.
The rules on accession shall govern the improvements on Lot No. 356-A and the rents thereof.
The accessory follows the principal. The right of accession is recognized under Article 440 of the Civil Code which states
that "[t]he ownership of property gives the right by accession to everything which is produced thereby, or which is
incorporated or attached thereto, either naturally or artificially."
There is no question that Dr. Rosario is the builder of the improvements on Lot No. 356-A. The Torbela siblings themselves
alleged that they allowed Dr. Rosario to register Lot No. 356-A in his name so he could obtain a loan from DBP, using said
parcel of land as security; and with the proceeds of the loan, Dr. Rosario had a building constructed on Lot No. 356-A,
initially used as a hospital, and then later for other commercial purposes. Dr. Rosario supervised the construction of the
building, which began in 1965; fully liquidated the loan from DBP; and maintained and administered the building, as well
as collected the rental income therefrom, until the Torbela siblings instituted Civil Case No. U-4359 before the RTC on
February 13, 1986.
When it comes to the improvements on Lot No. 356-A, both the Torbela siblings (as landowners) and Dr. Rosario (as
builder) are deemed in bad faith. The Torbela siblings were aware of the construction of a building by Dr. Rosario on Lot
No. 356-A, while Dr. Rosario proceeded with the said construction despite his knowledge that Lot No. 356-A belonged to
the Torbela siblings. This is the case contemplated under Article 453 of the Civil Code, which reads:

ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but
also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in
good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and
without opposition on his part. (Emphasis supplied.)
When both the landowner and the builder are in good faith, the following rules govern:
ART. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548,
or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees.
In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees
after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix
the terms thereof.
ART. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who
has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase
in value which the thing may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good faith; but he may
remove the ornaments with which he has embellished the principal thing if it suffers no injury thereby, and if his successor
in the possession does not prefer to refund the amount expended.
Whatever is built, planted, or sown on the land of another, and the improvements or repairs made thereon, belong to the
owner of the land. Where, however, the planter, builder, or sower has acted in good faith, a conflict of rights arises
between the owners and it becomes necessary to protect the owner of the improvements without causing injustice to the
owner of the land. In view of the impracticability of creating what Manresa calls a state of "forced co-ownership," the law
has provided a just and equitable solution by giving the owner of the land the option to acquire the improvements after
payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper
rent. It is the owner of the land who is allowed to exercise the option because his right is older and because, by the
principle of accession, he is entitled to the ownership of the accessory thing. 85
The landowner has to make a choice between appropriating the building by paying the proper indemnity or obliging the
builder to pay the price of the land. But even as the option lies with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one. He cannot, for instance, compel the owner of the building to remove the building from
the land without first exercising either option. It is only if the owner chooses to sell his land, and the builder or planter fails
to purchase it where its value is not more than the value of the improvements, that the owner may remove the
improvements from the land. The owner is entitled to such remotion only when, after having chosen to sell his land, the
other party fails to pay for the same.86
This case then must be remanded to the RTC for the determination of matters necessary for the proper application of
Article 448, in relation to Article 546, of the Civil Code. Such matters include the option that the Torbela siblings will
choose; the amount of indemnity that they will pay if they decide to appropriate the improvements on Lot No. 356-A; the
value of Lot No. 356-A if they prefer to sell it to Dr. Rosario; or the reasonable rent if they opt to sell Lot No. 356-A to Dr.
Rosario but the value of the land is considerably more than the improvements. The determination made by the Court of
Appeals in its Decision dated June 29, 1999 that the current value of Lot No. 356-A is ₱1,200,000.00 is not supported by
any evidence on record.
Should the Torbela siblings choose to appropriate the improvements on Lot No. 356-A, the following ruling of the Court in
Pecson v. Court of Appeals87 is relevant in the determination of the amount of indemnity under Article 546 of the Civil
Code:
Article 546 does not specifically state how the value of the useful improvements should be determined. The respondent
court and the private respondents espouse the belief that the cost of construction of the apartment building in 1965, and
not its current market value, is sufficient reimbursement for necessary and useful improvements made by the petitioner.
This position is, however, not in consonance with previous rulings of this Court in similar cases. In Javier vs. Concepcion, Jr.,
this Court pegged the value of the useful improvements consisting of various fruits, bamboos, a house and camarin made
of strong material based on the market value of the said improvements. In Sarmiento vs. Agana, despite the finding that
the useful improvement, a residential house, was built in 1967 at a cost of between eight thousand pesos (₱8,000.00) to
ten thousand pesos (₱10,000.00), the landowner was ordered to reimburse the builder in the amount of forty thousand
pesos (₱40,000.00), the value of the house at the time of the trial. In the same way, the landowner was required to pay the
"present value" of the house, a useful improvement, in the case of De Guzman vs. De la Fuente, cited by the petitioner.

The objective of Article 546 of the Civil Code is to administer justice between the parties involved. In this regard, this Court
had long ago stated in Rivera vs. Roman Catholic Archbishop of Manila that the said provision was formulated in trying to
adjust the rights of the owner and possessor in good faith of a piece of land, to administer complete justice to both of
them in such a way as neither one nor the other may enrich himself of that which does not belong to him. Guided by this
precept, it is therefore the current market value of the improvements which should be made the basis of reimbursement. A
contrary ruling would unjustly enrich the private respondents who would otherwise be allowed to acquire a highly valued
income-yielding four-unit apartment building for a measly amount. Consequently, the parties should therefore be allowed
to adduce evidence on the present market value of the apartment building upon which the trial court should base its
finding as to the amount of reimbursement to be paid by the landowner. 88(Emphases supplied.)
Still following the rules of accession, civil fruits, such as rents, belong to the owner of the building. 89 Thus, Dr. Rosario has a
right to the rents of the improvements on Lot No. 356-A and is under no obligation to render an accounting of the same
to anyone. In fact, it is the Torbela siblings who are required to account for the rents they had collected from the lessees of
the commercial building and turn over any balance to Dr. Rosario. Dr. Rosario’s right to the rents of the improvements on
Lot No. 356-A shall continue until the Torbela siblings have chosen their option under Article 448 of the Civil Code. And in
case the Torbela siblings decide to appropriate the improvements, Dr. Rosario shall have the right to retain said
improvements, as well as the rents thereof, until the indemnity for the same has been paid. 90
Dr. Rosario is liable for damages to the Torbela siblings.
The Court of Appeals ordered Dr. Rosario to pay the Torbela siblings ₱300,000.00 as moral damages; ₱200,000.00 as
exemplary damages; and ₱100,000.00 as attorney’s fees.
Indeed, Dr. Rosario’s deceit and bad faith is evident when, being fully aware that he only held Lot No. 356-A in trust for
the Torbela siblings, he mortgaged said property to PNB and Banco Filipino absent the consent of the Torbela siblings,
and caused the irregular cancellation of the Torbela siblings’ adverse claim on TCT No. 52751. Irrefragably, Dr. Rosario’s
betrayal had caused the Torbela siblings (which included Dr. Rosario’s own mother, Eufrosina Torbela Rosario) mental
anguish, serious anxiety, and wounded feelings. Resultantly, the award of moral damages is justified, but the amount
thereof is reduced to ₱200,000.00.
In addition to the moral damages, exemplary damages may also be imposed given that Dr. Rosario’s wrongful acts were
accompanied by bad faith. However, judicial discretion granted to the courts in the assessment of damages must always
be exercised with balanced restraint and measured objectivity. The circumstances of the case call for a reduction of the
award of exemplary damages to ₱100,000.00.
As regards attorney's fees, they may be awarded when the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest. Because of Dr. Rosario’s acts, the Torbela siblings
were constrained to institute several cases against Dr. Rosario and his spouse, Duque-Rosario, as well as Banco Filipino,
which had lasted for more than 25 years. Consequently, the Torbela siblings are entitled to an award of attorney's fees and
the amount of ₱100,000.00 may be considered rational, fair, and reasonable.
Banco Filipino is entitled to a writ of possession for Lot No. 5-F-8-C-2-B-2-A.
The Court emphasizes that Pet. Case No. U-822, instituted by Banco Filipino for the issuance of a writ of possession before
the RTC of Urdaneta, included only Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A (Lot No. 4489, the third property
mortgaged to secure Dr. Rosario’s loan from Banco Filipino, is located in Dagupan City, Pangasinan, and the petition for
issuance of a writ of possession for the same should be separately filed with the RTC of Dagupan City). Since the Court has
already granted herein the reconveyance of Lot No. 356-A from Banco Filipino to the Torbela siblings, the writ of
possession now pertains only to Lot No. 5-F-8-C-2-B-2-A.
To recall, the Court of Appeals affirmed the issuance by the RTC of a writ of possession in favor of Banco Filipino. Dr.
Rosario no longer appealed from said judgment of the appellate court. Already legally separated from Dr. Rosario, Duque-
Rosario alone challenges the writ of possession before this Court through her Petition in G.R. No. 140553.
Duque-Rosario alleges in her Petition that Lot No. 5-F-8-C-2-B-2-A had been registered in her name under TCT No.
104189. Yet, without a copy of TCT No. 104189 on record, the Court cannot give much credence to Duque-Rosario’s claim
of sole ownership of Lot No. 5-F-8-C-2-B-2-A. Also, the question of whether Lot No. 5-F-8-C-2-B-2-A was the paraphernal
property of Duque-Rosario or the conjugal property of the spouses Rosario would not alter the outcome of Duque-
Rosario’s Petition.
The following facts are undisputed: Banco Filipino extrajudicially foreclosed the mortgage constituted on Lot No. 5-F-8-C-
2-B-2-A and the two other properties after Dr. Rosario defaulted on the payment of his loan; Banco Filipino was the
highest bidder for all three properties at the foreclosure sale on April 2, 1987; the Certificate of Sale dated April 2, 1987
was registered in April 1987; and based on the Certificate of Final Sale dated May 24, 1988 and Affidavit of Consolidation
dated May 25, 1988, the Register of Deeds cancelled TCT No. 104189 and issued TCT No. 165812 in the name of Banco
Filipino for Lot No. 5-F-8-C-2-B-2-A on June 7, 1988.

The Court has consistently ruled that the one-year redemption period should be counted not from the date of foreclosure
sale, but from the time the certificate of sale is registered with the Registry of Deeds.91 No copy of TCT No. 104189 can be
found in the records of this case, but the fact of annotation of the Certificate of Sale thereon was admitted by the parties,
only differing on the date it was made: April 14, 1987 according to Banco Filipino and April 15, 1987 as maintained by
Duque-Rosario. Even if the Court concedes that the Certificate of Sale was annotated on TCT No. 104189 on the later date,
April 15, 1987, the one-year redemption period already expired on April 14, 1988. 92 The Certificate of Final Sale and
Affidavit of Consolidation were executed more than a month thereafter, on May 24, 1988 and May 25, 1988, respectively,
and were clearly not premature.
It is true that the rule on redemption is liberally construed in favor of the original owner of the property. The policy of the
law is to aid rather than to defeat him in the exercise of his right of redemption. 93 However, the liberal interpretation of the
rule on redemption is inapplicable herein as neither Duque-Rosario nor Dr. Rosario had made any attempt to redeem Lot
No. 5-F-8-C-2-B-2-A. Duque-Rosario could only rely on the efforts of the Torbela siblings at redemption, which were
unsuccessful. While the Torbela siblings made several offers to redeem Lot No. 356-A, as well as the two other properties
mortgaged by Dr. Rosario, they did not make any valid tender of the redemption price to effect a valid redemption. The
general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so. The
statement of intention must be accompanied by an actual and simultaneous tender of payment. The redemption price
should either be fully offered in legal tender or else validly consigned in court. Only by such means can the auction winner
be assured that the offer to redeem is being made in good faith. 94 In case of disagreement over the redemption price, the
redemptioner may preserve his right of redemption through judicial action, which in every case, must be filed within the
one-year period of redemption. The filing of the court action to enforce redemption, being equivalent to a formal offer to
redeem, would have the effect of preserving his redemptive rights and "freezing" the expiration of the one-year
period.95 But no such action was instituted by the Torbela siblings or either of the spouses Rosario.
Duque-Rosario also cannot bar the issuance of the writ of possession over Lot No. 5-F-8-C-2-B-2-A in favor of Banco
Filipino by invoking the pendency of Civil Case No. U-4359, the Torbela siblings’ action for recovery of ownership and
possession and damages, which supposedly tolled the period for redemption of the foreclosed properties. Without
belaboring the issue of Civil Case No. U-4359 suspending the redemption period, the Court simply points out to Duque-
Rosario that Civil Case No. U-4359 involved Lot No. 356-A only, and the legal consequences of the institution, pendency,
and resolution of Civil Case No. U-4359 apply to Lot No. 356-A alone.
Equally unpersuasive is Duque-Rosario’s argument that the writ of possession over Lot No. 5-F-8-C-2-B-2-A should not be
issued given the defects in the conduct of the foreclosure sale (i.e., lack of personal notice to Duque-Rosario) and
consolidation of title (i.e., failure to provide Duque-Rosario with copies of the Certificate of Final Sale).
The right of the purchaser to the possession of the foreclosed property becomes absolute upon the expiration of the
redemption period. The basis of this right to possession is the purchaser's ownership of the property. After the
consolidation of title in the buyer's name for failure of the mortgagor to redeem, the writ of possession becomes a matter
of right and its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function. 961avvphi1
The judge with whom an application for a writ of possession is filed need not look into the validity of the mortgage or the
manner of its foreclosure. Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground
for the refusal to issue a writ of possession. Regardless of whether or not there is a pending suit for the annulment of the
mortgage or the foreclosure itself, the purchaser is entitled to a writ of possession, without prejudice, of course, to the
eventual outcome of the pending annulment case. The issuance of a writ of possession in favor of the purchaser in a
foreclosure sale is a ministerial act and does not entail the exercise of discretion.97
WHEREFORE, in view of the foregoing, the Petition of the Torbela siblings in G.R. No. 140528 is GRANTED, while the
Petition of Lena Duque-Rosario in G.R. No. 140553 is DENIED for lack of merit. The Decision dated June 29, 1999 of the
Court of Appeals in CA-G.R. CV No. 39770, which affirmed with modification the Amended Decision dated January 29,
1992 of the RTC in Civil Case Nos. U-4359 and U-4733 and Pet. Case No. U-822, is AFFIRMED WITH MODIFICATIONS, to
now read as follows:
(1) Banco Filipino is ORDERED to reconvey Lot No. 356-A to the Torbela siblings;
(2) The Register of Deeds of Pangasinan is ORDERED to cancel TCT No. 165813 in the name of Banco Filipino and
to issue a new certificate of title in the name of the Torbela siblings for Lot No. 356-A;
(3) The case is REMANDED to the RTC for further proceedings to determine the facts essential to the proper
application of Articles 448 and 546 of the Civil Code, particularly: (a) the present fair market value of Lot No. 356-
A; (b) the present fair market value of the improvements thereon; (c) the option of the Torbela siblings to
appropriate the improvements on Lot No. 356-A or require Dr. Rosario to purchase Lot No. 356-A; and (d) in the
event that the Torbela siblings choose to require Dr. Rosario to purchase Lot No. 356-A but the value thereof is
considerably more than the improvements, then the reasonable rent of Lot No. 356-A to be paid by Dr. Rosario to
the Torbela siblings;

(4) The Torbela siblings are DIRECTED to submit an accounting of the rents of the improvements on Lot No. 356-A
which they had received and to turn over any balance thereof to Dr. Rosario;
(5) Dr. Rosario is ORDERED to pay the Torbela siblings ₱200,000.00 as moral damages, ₱100,000.00 as exemplary
damages, and ₱100,000.00 as attorney’s fees; and
(6) Banco Filipino is entitled to a writ of possession over Lot-5-F-8-C-2-B-2-A, covered by TCT No. 165812. The
RTC Branch Clerk of Court is ORDERED to issue a writ of possession for the said property in favor of Banco Filipino.
SO ORDERED.
13.
METROPOLITAN BANK & TRUST COMPANY, INC. (as successor-in-interest of G.R. No.
the banking operations of Global Business Bank, Inc. formerly known as 176959
PHILIPPINE BANKING CORPORATION),Petitioner,- versus - THE BOARD OF Promulgated:
TRUSTEES OF RIVERSIDE MILLS CORPORATION PROVIDENT AND RETIREMENT September
FUND, represented by ERNESTO TANCHI, JR., CESAR SALIGUMBA, AMELITA SIMON, 8, 2010
EVELINA OCAMPO and CARLITOS Y. LIM, RMC UNPAID EMPLOYEES ASSOCIATION,
INC., and THE INDIVIDUAL BENEFICIARIES OF THE PROVIDENT AND RETIREMENT
FUND OF RMC,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, prays for the reversal
of the Decision[1] dated November 7, 2006 and Resolution[2] dated March 5, 2007 of the Court of Appeals (CA) in CA-G.R.
CV No. 76642. The CA had affirmed the Decision[3] dated June 27, 2002 of the Regional Trial Court (RTC), Branch
137, Makati City in Civil Case No. 97-997 which declared invalid the reversion or application of the Riverside Mills
Corporation Provident and Retirement Fund (RMCPRF) to the outstanding obligation of Riverside Mills Corporation (RMC)
with Philippine Banking Corporation (Philbank).
The facts are as follows:
On November 1, 1973, RMC established a Provident and Retirement Plan [4] (Plan) for its regular employees.Under
the Plan, RMC and its employees shall each contribute 2% of the employees current basic monthly salary, with RMCs
contribution to increase by 1% every five (5) years up to a maximum of 5%. The contributions shall form part of the
provident fund (the Fund) which shall be held, invested and distributed by the Commercial Bank and Trust
Company. Paragraph 13 of the Plan likewise provided that the Plan may be amended or terminated by the Company at
any time on account of business conditions, but no such action shall operate to permit any part of the assets of the Fund
to be used for, or diverted to purposes other than for the exclusive benefit of the members of the Plan and their
beneficiaries. In no event shall any part of the assets of the Fund revert to [RMC] before all liabilities of the Plan have been
satisfied.[5]
On October 15, 1979, the Board of Trustees of RMCPRF (the Board) entered into an Investment Management
Agreement[6] (Agreement) with Philbank (now, petitioner Metropolitan Bank and Trust Company). Pursuant to the
Agreement, petitioner shall act as an agent of the Board and shall hold, manage, invest and reinvest the Fund in Trust
Account No. 1797 in its behalf. The Agreement shall be in force for one (1) year and shall be deemed automatically
renewed unless sooner terminated either by petitioner bank or by the Board.
In 1984, RMC ceased business operations. Nonetheless, petitioner continued to render investment services to respondent
Board. In a letter[7] dated September 27, 1995, petitioner informed respondent Board that Philbanks Board of Directors
had decided to apply the remaining trust assets held by it in the name of RMCPRF against part of the outstanding
obligations of RMC.
Subsequently, respondent RMC Unpaid Employees Association, Inc. (Association), representing the terminated employees
of RMC, learned of Trust Account No. 1797. Through counsel, they demanded payment of their share in a
letter[8] dated February 4, 1997. When such demand went unheeded, the Association, along with the individual members
of RMCPRF, filed a complaint for accounting against the Board and its officers, namely, Ernesto Tanchi, Jr., Carlitos Y. Lim,
Amelita G. Simon, Evelina S. Ocampo and Cesar Saligumba, as well as petitioner bank. The case was docketed as Civil Case
No. 97-997 in the RTC of Makati City, Branch 137.
On June 2, 1998, during the trial, the Board passed a Resolution [9] in court declaring that the Fund belongs exclusively to
the employees of RMC. It authorized petitioner to release the proceeds of Trust Account No. 1797 through the Board, as
the court may direct. Consequently, plaintiffs amended their complaint to include the Board as co-plaintiffs.
On June 27, 2002, the RTC rendered a decision in favor of respondents. The trial court declared invalid the reversion and
application of the proceeds of the Fund to the outstanding obligation of RMC to petitioner bank. The fallo of the decision
reads:
WHEREFORE, judgment is hereby rendered:
1. Declaring INVALID the reversion or application of the Riverside Mills Corporation Provident and
Retirement Fund as payment for the outstanding obligation of Riverside Mills Corporation
with defendant Philippine Banking Corporation.
2. Defendant Philippine Banking Corporation (now [Global Bank]) is hereby ordered to:

a. Reverse the application of the Riverside Mills Corporation Provident and Retirement Fund as
payment for the outstanding obligation of Riverside Mills Corporation with defendant
Philippine Banking Corporation;
b. Render a complete accounting of the Riverside Mills Corporation Provident and Retirement
Fund; the Fund will then be subject to disposition by plaintiff Board of Trustees in accordance
with law and the Provident Retirement Plan;
c. Pay attorneys fees equivalent to 10% of the total amounts due to plaintiffs Riverside Mills
Unpaid Employees Association and the individual beneficiaries of the Riverside Mills
Corporation Provident and Retirement Fund; and costs of suit.
3. The Riverside Mills Corporation Provident and Retirement Fund is ordered to determine the beneficiaries of the
FUND entitled to benefits, the amount of benefits per beneficiary, and pay such benefits to the
individual beneficiaries.
SO ORDERED.[10]
On appeal, the CA affirmed the trial court. It held that the Fund is distinct from RMCs account in petitioner bank and may
not be used except for the benefit of the members of RMCPRF. Citing Paragraph 13 of the Plan, the appellate court
stressed that the assets of the Fund shall not revert to the Company until after the liabilities of the Plan had been
satisfied. Further, the Agreement was specific that upon the termination of the Agreement, petitioner shall deliver the
Fund to the Board or its successor, and not to RMC as trustor. The CA likewise sustained the award of attorneys fees to
respondents.[11]
Hence, this petition.
Before us, petitioner makes the following assignment of errors:

I.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE REVERSION AND APPLICATION BY
PHILBANK OF THE FUND IN PAYMENT OF THE LOAN OBLIGATIONS OF RIVERSIDE MILLS CORPORATION
WERE INVALID.[12]
II.
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN DECLARING THAT BY HAVING
ENTERED INTO AN AGREEMENT WITH THE BOARD, (PHILBANK) IS NOW ESTOPPED TO QUESTION THE
LATTERS AUTHORITY AS WELL AS THE TERMS AND CONDITIONS THEREOF.[13]
III.
THE HONORABLE COURT COMMITTED REVERSIBLE ERROR IN AWARDING ATTORNEYS FEES TO
PLAINTIFFS-APPELLEES ON THE BASIS THAT [PHILBANK] WAS REMISS IN ITS DUTY TO TREAT RMCPRFS
ACCOUNT WITH THE HIGHEST DEGREE OF CARE CONSIDERING THE FIDUCIARY NATURE OF THEIR
RELATIONSHIP, PERFORCE, THE PLAINTIFFS-APPELLEES WERE COMPELLED TO LITIGATE TO PROTECT
THEIR RIGHT.[14]
The fundamental issue for our determination is whether the proceeds of the RMCPRF may be applied to satisfy RMCs debt
to Philbank.
Petitioner contends that RMCs closure in 1984 rendered the RMCPRF Board of Trustees functus officio and devoid of
authority to act on behalf of RMCPRF. It thus belittles the RMCPRF Board Resolution dated June 2, 1998, authorizing the
release of the Fund to several of its supposed beneficiaries. Without known claimants of the Fund for eleven (11) years
since RMC closed shop, it was justifiable for petitioner to consider the Fund to have technically reverted to, and formed
part of RMCs assets. Hence, it could be applied to satisfy RMCs debts to Philbank. Petitioner also disputes the award of
attorneys fees in light of the efforts taken by Philbank to ascertain claims before effecting the reversion.
Respondents for their part, belie the claim that petitioner exerted earnest efforts to ascertain claims. Respondents
cite petitioners omission to publish a notice in newspapers of general circulation to locate claims against the Fund. To
them, petitioners act of addressing the letter dated September 27, 1995 to the Board is a recognition of its authority to act
for the beneficiaries. For these reasons, respondents believe that the reversion of the Fund to RMC is not only
unwarranted but unconscionable. For being compelled to litigate to protect their rights, respondents also defend the
award of attorneys fees to be proper.
The petition has no merit.
A trust is a fiduciary relationship with respect to property which involves the existence of equitable duties imposed
upon the holder of the title to the property to deal with it for the benefit of another. A trust is either express or
implied. Express trusts are those which the direct and positive acts of the parties create, by some writing or deed, or will,
or by words evincing an intention to create a trust.[15]
Here, the RMC Provident and Retirement Plan created an express trust to provide retirement benefits to the
regular employees of RMC. RMC retained legal title to the Fund but held the same in trust for the employees-
beneficiaries. Thus, the allocation under the Plan is directly credited to each members account:
6. Allocation:
a. Monthly Contributions:
1. Employee to be credited to his account.
2. Employer to be credited to the respective members account as stated under the contribution
provision.
b. Investment Earnings semestral valuation of the fund shall be made and any earnings or losses
shall be credited ordebited, as the case may be, to each members account in proportion to
his account balances based on the lastproceeding (sic) [preceding] accounting period.
c. Forfeitures shall be retained in the fund.[16] (Emphasis supplied.)
The trust was likewise a revocable trust as RMC reserved the power to terminate the Plan after all the liabilities of
the Fund to the employees under the trust had been paid. Paragraph 13 of the Plan provided that [i]n no event shall any
part of the assets of the Fund revert to the Company before all liabilities of the Plan have been satisfied.
Relying on this clause, petitioner, as the Fund trustee, considered the Fund to have technically reverted to RMC,
allegedly after no further claims were made thereon since November 1984. Thereafter, it applied the proceeds of the Fund
to RMCs debt with the bank pursuant to Paragraph 9 of Promissory Note No. 1618-80[17] which RMC executed on May 12,
1981. The pertinent provision of the promissory note reads:
IN THE EVENT THAT THIS NOTE IS NOT PAID AT MATURITY OR WHEN THE SAME BECOMES DUE
UNDER ANY OF THE PROVISIONS HEREOF, I/WE HEREBY AUTHORIZE THE BANK AT ITS OPTION AND
WITHOUT NOTICE, TO APPLY TO THE PAYMENT OF THIS NOTE, ANY AND ALL MONEYS, SECURITIES AND
THINGS OF VALUE WHICH MAY BE IN ITS HAND OR ON DEPOSIT OR OTHERWISE BELONGING TO
ME/USAND, FOR THIS PURPOSE, I/WE HEREBY, JOINTLY AND SEVERALLY, IRREVOCABLY CONSTITUTE
AND APPOINT THE SAID BANK TO BE MY/OUR TRUE ATTORNEY-IN-FACT WITH FULL POWER AND
AUTHORITY FOR ME/US AND IN MY/OUR NAME AND BEHALF, AND WITHOUT PRIOR NOTICE, TO
NEGOTIATE, SELL AND TRANSFER ANY MONEYS, SECURITIES AND THINGS OF VALUE WHICH IT MAY
HOLD, BY PUBLIC OR PRIVATE SALE, AND APPLY THE PROCEEDS THEREOF TO THE PAYMENT OF THIS
NOTE. (Emphasis supplied.)
Petitioner contends that it was justified in supposing that reversion had occurred because its efforts to locate
claims against the Fund from the National Labor Relations Commission (NLRC), the lower courts, the CA and the Supreme
Court proved futile.
We are not convinced.

Employees trusts or benefit plans are intended to provide economic assistance to employees upon the occurrence
of certain contingencies, particularly, old age retirement, death, sickness, or disability. They give security against certain
hazards to which members of the Plan may be exposed. They are independent and additional sources of protection for the
working group and established for their exclusive benefit and for no other purpose.[18] Here, while the Plan provides for a
reversion of the Fund to RMC, this cannot be done until all the liabilities of the Plan have been paid. And when RMC
ceased operations in 1984, the Fund became liable for the payment not only of the benefits of qualified retirees at the
time of RMCs closure but also of those who were separated from work as a consequence of the closure. Paragraph 7 of
the Retirement Plan states:
Separation from Service:
A member who is separated from the service of the Company before satisfying the conditions for
retirement due to resignation or any reason other than dismissal for cause shall be paid the balance
of his account as of the last day of the month prior to separation. The amount representing the
Companys contribution and income thereon standing to the credit of the separating member shall be
paid to him as follows:
Completed Years % of Companys Contribution

of Membership and Earnings Thereon Payable
0 5 NIL
6 10 20%
11 15 40%
16 20 60%
21 25 80%
25 over 100%
A member who is separated for cause shall not be entitled to withdraw the total amount representing his
contribution and that of the Company including the earned interest thereon, and the employers
contribution shall be retained in the fund.[19](Emphasis supplied.)
The provision makes reference to a member-employee who is dismissed for cause. Under the Labor Code, as amended, an
employee may be dismissed for just or authorized causes. A dismissal for just cause under Article 282[20] of the Labor
Code, as amended, implies that the employee is guilty of some misfeasance towards his employer, i.e. the employee has
committed serious misconduct in relation to his work, is guilty of fraud, has perpetrated an offense against the employer
or any immediate member of his family, or has grossly and habitually neglected his duties. Essentially, it is an act of the
employee that sets off the dismissal process in motion.

On the other hand, a dismissal for an authorized cause under Article 283 [21] and 284[22] of the Labor Code, as
amended, does not entail any wrongdoing on the part of the employee. Rather, the termination of employment is
occasioned by the employers exercise of management prerogative or by the illness of the employee matters beyond the
workers control.
The distinction between just and authorized causes for dismissal lies in the fact that payment of separation pay is
required in dismissals for an authorized cause but not so in dismissals for just cause. The rationale behind this rule was
explained in the case of Phil. Long Distance Telephone Co. v. NLRC[23] and reiterated in San Miguel Corporation v.
Lao,[24] thus:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in
those instances where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow
worker, the employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice.
xxxxxxxxx
The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best[,] it may mitigate the penalty but it certainly will not condone
the offense.
In San Miguel Corporation v. Lao, we reversed the CA ruling which granted retirement benefits to an employee who was
found by the Labor Arbiter and the NLRC to have been properly dismissed for willful breach of trust and confidence.
Applied to this case, the penal nature of the provision in Paragraph 7 of the Plan, whereby a member separated
for cause shall not be entitled to withdraw the contributions made by him and his employer, indicates that the separation
for cause being referred to therein is any of the just causes under Article 282 of the Labor Code, as amended.
To be sure, the cessation of business by RMC is an authorized cause for the termination of its employees. Hence,
not only those qualified for retirement should receive their total benefits under the Fund, but those laid off should also be
entitled to collect the balance of their account as of the last day of the month prior to RMCs closure. In addition, the Plan
provides that the separating member shall be paid a maximum of 40% of the amount representing the Companys
contribution and its income standing to his credit. Until these liabilities shall have been settled, there can be no reversion
of the Fund to RMC.
Under Paragraph 6[25] of the Agreement, petitioners function shall be limited to the liquidation and return of the
Fund to the Board upon the termination of the Agreement. Paragraph 14 of said Agreement further states that it shall
be the duty of the Investment Manager to assign, transfer, and pay over to its successor or successor s all cash,
securities, and other properties held by it constituting the fund less any amounts constituting the charges and expenses
which are authorized [under the Agreement] to be payable from the Fund.[26] Clearly, petitioner had no power to effect
reversion of the Fund to RMC.
The reversion petitioner effected also could hardly be said to have been done in good faith and with due regard
to the rights of the employee-beneficiaries. The restriction imposed under Paragraph 13 of the Plan stating that in no
event shall any part of the assets of the Fund revert to the Company before all liabilities of the Plan have been satisfied,
demands more than a passive stance as that adopted by petitioner in locating claims against the Fund. Besides, the
beneficiaries of the Fund are readily identifiable the regular or permanent employees of RMC who were qualified retirees
and those who were terminated as a result of its closure. Petitioner needed only to secure a list of the employees
concerned from the Board of Trustees which was its principal under the Agreement and the trustee of the Plan or from
RMC which was the trustor of the Fund under the Retirement Plan. Yet, petitioner notified respondent Board of Trustees
only after Philbanks Board of Directors had decided to apply the remaining trust assets of RMCPRF to the liabilities of the
company.
Petitioner nonetheless assails the authority of the Board of Trustees to issue the Resolution of June 2,
1998recognizing the exclusive ownership of the Fund by the employees of RMC and authorizing its release to the
beneficiaries as may be ordered by the trial court. Petitioner contends that the cessation of RMCs operations ended not
only the Board members employment in RMC, but also their tenure as members of the RMCPRF Board of Trustees.
Again, we are not convinced. Paragraph 13 of the Plan states that [a]lthough it is expected that the Plan will
continue indefinitely, it may be amended or terminated by the Company at any time on account of business
conditions.There is no dispute as to the management prerogative on this matter, considering that the Fund consists
primarily of contributions from the salaries of members-employees and the Company. However, it must be stressed that
the RMC Provident and Retirement Plan was primarily established for the benefit of regular and permanent employees of
RMC. As such, the Board may not unilaterally terminate the Plan without due regard to any accrued benefits and rightful
claims of members-employees. Besides, the Board is bound by Paragraph 13 prohibiting the reversion of the Fund to RMC
before all the liabilities of the Plan have been satisfied.
As to the contention that the functions of the Board of Trustees ceased upon with RMCs closure, the same is
likewise untenable.
Under Section 122[27] of the Corporation Code, a dissolved corporation shall nevertheless continue as a body
corporate for three (3) years for the purpose of prosecuting and defending suits by or against it and enabling it to settle
and close its affairs, to dispose and convey its property and to distribute its assets, but not for the purpose of continuing
the business for which it was established. Within those three (3) years, the corporation may appoint a trustee or receiver
who shall carry out the said purposes beyond the three (3)-year winding-up period. Thus, a trustee of a dissolved
corporation may commence a suit which can proceed to final judgment even beyond the three (3)-year period of
liquidation.[28]
In the same manner, during and beyond the three (3)-year winding-up period of RMC, the Board of Trustees of
RMCPRF may do no more than settle and close the affairs of the Fund. The Board retains its authority to act on behalf of
its members, albeit, in a limited capacity. It may commence suits on behalf of its members but not continue managing the
Fund for purposes of maximizing profits. Here, the Boards act of issuing the Resolution authorizing petitioner to release
the Fund to its beneficiaries is still part of the liquidation process, that is, satisfaction of the liabilities of the Plan, and does
not amount to doing business. Hence, it was properly within the Boards power to promulgate.
Anent the award of attorneys fees to respondents, we find the same to be in order. Article 2208(2) of the Civil
Code allows the award of attorneys fees in cases where the defendants act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest. Attorneys fees may be awarded by a court to one (1)
who was compelled to litigate with third persons or to incur expenses to protect his or her interest by reason of an
unjustified act or omission of the party from whom it is sought.[29]
Here, petitioner applied the Fund in satisfaction of the obligation of RMC without authority and without bothering
to inquire regarding unpaid claims from the Board of Trustees of RMCPRF. It wrote the members of the Board only after it
had decided to revert the Fund to RMC. Upon being met with objections, petitioner insisted on the reversion of the Fund
to RMC, despite the clause in the Plan that prohibits such reversion before all liabilities shall have been satisfied, thereby
leaving respondents with no choice but to seek judicial relief.
WHEREFORE, the petition for review on certiorari is hereby DENIED. The Decision dated November 7, 2006and
the Resolution dated March 5, 2007 of the Court of Appeals in CA-G.R. CV No. 76642 are AFFIRMED.
With costs against the petitioner.
SO ORDERED.
14. G.R. No. 196023 April 21, 2014 JOSE JUAN TONG, ET AL., Petitioners,
vs. GO TIAT KUN, ET AL., Respondents.
DECISION
REYES, J.:
This appeal by petition for review seeks to annul and set aside the Decision 1 dated October 28, 2010 and the
Resolution2 dated March 3, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 03078, which reversed the
Decision3 dated May 21, 2009 of the Regional Trial Court of Iloilo City, Branch 37, in Civil Case No. 05-28626.
The Facts
The instant petition stemmed from an action for Nullification of Titles and Deeds of Extra-Judicial Settlement and Sale and
Damages instituted by the petitioners against the respondents over a parcel of land known as Lot 998-A of the Cadastral
Survey of Iloilo, having an area of 2,525 square meters and now covered by Transfer Certificate of Title (TCT) No. 134082.
The petitioners are nine of the ten children of Spouses Juan Tong (Juan Tong) and Sy Un (Spouses Juan Tong), namely:
Jose Juan Tong, Lucio Juan Tong, Simeon Juan Tong, Felisa Juan Tong Cheng, Luisa Juan Tong Tan, Julia Juan Tong
Dihiansan, Ana Juan Tong Dy, Elena Juan Tong Yng Choan, and Vicente Juan Tong, who being already deceased, is
survived by his widow, Rosita So and their children, Chanto Juan Tong and Alfonso So-Chanto Juan Tong.
Completing the ten children of Spouses Juan Tong is the deceased Luis Juan Tong, Sr. (Luis, Sr.) whose surviving heirs are:
his spouse Go Tiat Kun, and their children, Leon, Mary, Lilia, Tomas, Luis, Jr., and Jaime, who being already dead, is survived
by his wife, Roma Cokee Juan Tong (respondents).
Sometime in 1957, Juan Tong had a meeting with all his children to inform them of his intention to purchase Lot 998 to be
used for the family’s lumber business called "Juan Tong Lumber". However, since he was a Chinese citizen and was
disqualified from acquiring the said lot, the title to the property will be registered in the name of his eldest son, Luis, Sr.,
who at that time was already of age and was the only Filipino citizen among his children. On May 11, 1957, Juan Tong
bought Lot 998 from the heirs of Jose Ascencio. Accordingly, on May 16, 1957, TCT No. 10346 was issued by the Register
of Deeds in the name of Luis, Sr.
On December 8, 1978, the single proprietorship of Juan Tong Lumber was incorporated into a corporation known as the
Juan Tong Lumber, Inc.4 However, Sy Un and Juan Tong both died intestate on October 31, 1984, and November 13, 1990,
respectively.
Meanwhile, on May 30, 1981, Luis, Sr. died and the respondents, being his surviving heirs, claimed ownership over Lot 998
by succession, alleging that no trust agreement exists and it was Luis, Sr. who bought Lot 998. On July 2, 1982, the
respondents executed a Deed of Extra-Judicial Settlement of Estate of Luis, Sr., adjudicating unto themselves Lot 998 and
claiming that the said lot is the conjugal property of Luis, Sr., and his wife, which the Juvenile and Domestic Relations
Court of Iloilo City approved on June 28, 1982. On July 19, 1982, the said deed was registered causing the cancellation of
TCT No. 10346 and the issuance of TCT No. T-60231 in the name of the respondents.

Subsequently, the respondents agreed to subdivide Lot 998, thus, on October 12, 1992, two new titles were issued: (1) TCT
No. 97068 over Lot 998-A in the name of Go Tiat Kun and her children; and (2) TCT No. T-96216 over Lot 998-B in the
name of Luis, Jr.
After Lot 998 was subdivided, Luis, Jr. sold Lot 998-B to Fine Rock Development Corporation (FRDC), which in turn sold the
same to Visayas Goodwill Credit Corporation (VGCC). It was only after the petitioners received a letter from VGCC, on
August 31, 1995, that they discovered about the breach of the trust agreement committed by the respondents.
To protect their rights, the petitioners filed an action for Annulment of Sales, Titles, Reconveyance and Damages of Lot
998-B docketed as Civil Case No. 22730 against Luis, Jr., FRDC and VGCC. On March 6, 1997, the trial court ruled 5 in favor
of the petitioners which were later affirmed by the CA6 and this Court7 on appeal. Consequently, Lot 998-B was
reconveyed to the petitioners and TCT No. T-14839 was issued under their names including the late Luis, Sr.
Then, on February 24, 2001, Go Tiat Kun executed a Deed of Sale of Undivided Interest over Lot 998-A in favor of her
children, Leon, Mary, Lilia, Tomas, and the late Jaime, resulting in the issuance of TCT No. T-134082 over Lot 998-A.
Hence, on August 2, 2005, the petitioners filed the instant case for Nullification of Titles, and Deeds of Extra-judicial
Settlement and Sale and Damages claiming as owners of Lot 998-A.8
After trial, the court a quo rendered its judgment in favor of the petitioners, ruling that there was an implied resulting trust
between Juan Tong, Luis, Sr., the petitioners and the respondents, over Lot 998. The trial court found that Luis Sr. was a
mere trustee, and not the owner of Lot 998, and the beneficial interest over said property remained in Juan Tong and
subsequently in the Juan Tong Lumber, Inc. The trust is further established by the fact that Luis Sr., during his lifetime: (1)
did not build a house or any structure thereon or make use of the property in any manner; (2) resided with his family
together with his parents, brothers and sisters in Juan Tong building in front of the said lot; (3) have acquired a residential
property at Ledesco Village, La Paz, Iloilo City and other places, where his heirs now reside; and (4) did not exercised any
other act of ownership over the said lot.
The trial court further claimed that any right that the respondents may have over Lot 998-A would have been merely
derived from that of their predecessor-in-interest, Luis Sr. Since the respondents were not the owners of Lot 998-A, they
could not appropriate the property unto themselves, much less convey the same unto third persons. Thus, any document
executed by them adjudicating unto themselves or conveying in favor of each other Lot 998-A, as well as the titles issued
in their favor as a consequence of those documents, are invalid. Since the petitioners were deprived of Lot 998-A through
the surreptitious and fraudulent acts of the respondents, the petitioners are entitled to the reconveyance of the properties,
and the validity of TCT No. T-134082 which covers Lot 998-A as well as the previous titles and documents of conveyance
covering the said lot were null and void. Thus:
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and against
the defendants:
1. Declaring null and void the following:
a. Deed of Extrajudicial Settlement of Estate of Deceased Person executed by the Defendants on July 2,
1982 executed by defendants Go Tiat Kun, Leon Juan Tong, Mary Juan Tong, Lilia Juan Tong, and Tomas
Juan Tong, and the late Jaime Juan Tong;
b. Transfer Certificate of Title No. T-60231 in the name of defendants Go Tiat Kun, Leon Juan Tong, Mary
Juan Tong, Lilia Juan Tong, and Tomas Juan Tong and the late Jaime Juan Tong;
c. Transfer Certificate of Title No. T-97068 in the name of defendants Go Tiat Kun, Leon Juan Tong, Mary
Juan Tong, Lilia Juan Tong, and Tomas Juan Tong and the late Jaime Juan Tong;
d. Deed of Sale of Undivided Interest over Real Property executed by defendant Go Tiat Kun on February
24, 2001 in favor of defendants Leon Juan Tong, Mary Juan Tong, Lilia Juan Tong, and Tomas Juan Tong
and the late Jaime Juan Tong; [and]
e. Transfer Certificate of Title No. T-134082, and all titles issued subsequent thereto, covering Lot 998-A, in
the names of defendants Leon Juan Tong, Mary Juan Tong, Lilia Juan Tong, and Tomas Juan Tong and the
late Jaime Juan Tong[.]
2. Ordering defendants to jointly and severally pay Jose Juan Tong Moral Damages of Php200,000.00, and the
plaintiffs Litigation Expenses of Php100,000.00 and Attorney’s Fees of Php200,000.00.
3. Ordering the Register of Deeds of the City of Iloilo to issue a new transfer certificate of title covering Lot 998-A
in the name of the plaintiffs and Luis Juan Tong, in equal shares.
4. The Counterclaim is hereby ordered dismissed for lack of merit.

SO ORDERED.9
On appeal, the CA rendered the herein assailed decision, which reversed and set aside the trial court’s decision, and
dismissed the complaint for lack of merit.
The appellate court, more particularly ruled that an express trust was created because there was a direct and positive act
from Juan Tong to create a trust. And when an express trust concerns an immovable property or any interest therein, it
may not be proved by parol or oral evidence, but must be proven by some writing or deed. 10 The CA also ruled that even
granting that an implied resulting trust was created; the petitioners are still barred by prescription because the said
resulting trust was terminated upon the death of Luis, Sr. and was then converted into a constructive trust. 11 Since in an
action for reconveyance based on a constructive trust prescribes in ten years from the issuance of the Torrens title over
the property, counting from the death of Luis, Sr. in 1981, the action has already prescribed.
The CA went on to rule that there is a presumption of donation in this case pursuant to Article 1448 of the Civil Code that
if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no
trust is implied by law, it being disputably presumed that there is a gift in favor of the child. Thus, even though the
respondents did not present evidence to prove a donation, the petitioners likewise did not also try to dispute it. The CA
also held that the petitioners were already barred by estoppel and laches.
Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration but it was denied by the appellate
court,12 hence, they filed this petition for review.
The Issue
Briefly stated, the issues to be resolved in this petition are: (1) Was there an implied resulting trust constituted over Lot
998 when Juan Tong purchased the property and registered it in the name of Luis, Sr.? (2) May parol evidence be used as
proof of the establishment of the trust? (3) Were the petitioners’ action barred by prescription, estoppel and laches?
The petition is impressed with merit.
As a general rule, in petitions for review under Rule 45 of the Rules of Court, the jurisdiction of this Court in cases brought
before it from the CA is limited to the review and revision of errors of law allegedly committed by the appellate court. The
question of the existence of an implied trust is factual, hence, ordinarily outside the purview of Rule 45. Nevertheless, the
Court’s review is justified by the need to make a definitive finding on this factual issue in light of the conflicting rulings
rendered by the courts below.13
At the outset, it is worthy to note that the issues posited in this case are not novel because in Civil Case No. 22730
involving Lot 998-B which forms part of Lot 998, the trial court already found that said lot was held in trust by Luis Sr. in
favor of his siblings by virtue of an implied resulting trust. The trial court’s decision was then affirmed by the CA in CA-G.R.
CV No. 56602, and this Court in G.R. No. 156068. Thus, Lot 998-A, the subject of this instant case, and Lot 998-B, are
similarly situated as they comprise the subdivided Lot 998, the property which in its entirety was held in trust by Luis Sr. in
favor of his siblings.
A review of the records shows an intention to create a trust between the parties. Although Lot 998 was titled in the name
of Luis, Sr., the circumstances surrounding the acquisition of the subject property eloquently speak of the intent that the
equitable or beneficial ownership of the property should belong to the Juan Tong family.
First, Juan Tong had the financial means to purchase the property for ₱55,000.00. On the other hand, respondents failed to
present a single witness to corroborate their claim that Luis, Sr. bought the property with his own money since at that
time, Luis Sr., was merely working for his father where he received a monthly salary of ₱200.00 with free board and
lodging.
Second, the possession of Lot 998 had always been with the petitioners. The property was physically possessed by Juan
Tong and was used as stockyard for their lumber business before it was acquired, and even after it was acquired. In fact,
the lot remains to be the stockyard of the family lumber business until this very day.
Third, from the time it was registered in the name of Luis, Sr. in 1957, Lot 998 remained undivided and untouched by the
respondents. It was only after the death of Luis, Sr. that the respondents claimed ownership over Lot 998 and subdivided it
into two lots, Lot 998-A and Lot 998-B.
Fourth, respondent Leon admitted that up to the time of his father’s death, (1) Lot 998 is in the possession of the
petitioners, (2) they resided in the tenement in the front part of Juan Tong’s compound, (3) Luis Sr. never sent any letter or
communication to the petitioners claiming ownership of Lot 998, and (4) he and his mother have a residence at Ledesco
Village, La Paz, Iloilo City while his brother and sisters also have their own residences.

Fifth, the real property taxes on Lot 998 were paid not by Luis Sr. but by his father Juan Tong and the Juan Tong Lumber,
Inc., from 1966 up to early 2008 as evidenced by the following: a) the letter of assessment sent by the City Treasurer of
Iloilo, naming Juan Tong as the owner of Lot 998; and b) the receipts of real property taxes paid by Juan Tong Lumber,
and later by Juan Tong Lumber, Inc., from 1997 to 2008. While some of the tax receipts were in the name of Luis Sr., the
fact that the petitioners were in possession of the originals thereof established that the petitioners, the Juan Tong Lumber,
Inc., or the late Juan Tong paid for the taxes. The respondents did not try to explain the petitioners’ possession of the
realty property tax receipts in the name of Luis Sr.
The appellate court’s conclusion that an express trust was created because there was a direct and positive act by Juan
Tong to create a trust must inevitably yield to the clear and positive evidence on record which showed that what was truly
created was an implied resulting trust. As what has been fully established, in view of the mutual trust and confidence
existing between said parties who are family members, the only reason why Lot 998 was registered in the name of Luis, Sr.
was to facilitate the purchase of the said property to be used in the family’s lumber business since Luis, Sr. is the only
Filipino Citizen in the Juan Tong family at that time. As the registered owner of Lot 998, it is only natural that tax
declarations and the corresponding tax payment receipts be in the name of Luis, Sr. so as to effect payment thereof.
The principle of a resulting trust is based on the equitable doctrine that valuable consideration and not legal title
determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise
from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes
invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, a
constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. Constructive trusts are
created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise
contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property
which he ought not, in equity and good conscience, to hold.14
Guided by the foregoing definitions, the Court is in conformity with the finding of the trial court that an implied resulting
trust was created as provided under the first sentence of Article 1448 15 which is sometimes referred to as a purchase
money resulting trust, the elements of which are: (a) an actual payment of money, property or services, or an equivalent,
constituting valuable consideration; and (b) such consideration must be furnished by the alleged beneficiary of a resulting
trust.16 Here, the petitioners have shown that the two elements are present in the instant case. Luis, Sr. was merely a
trustee of Juan Tong and the petitioners in relation to the subject property, and it was Juan Tong who provided the money
for the purchase of Lot 998 but the corresponding transfer certificate of title was placed in the name of Luis, Sr.
The principle that a trustee who puts a certificate of registration in his name cannot repudiate the trust by relying on the
registration is one of the well-known limitations upon a title. A trust, which derives its strength from the confidence one
reposes on another especially between families, does not lose that character simply because of what appears in a legal
document.17
Contrary to the claim of the respondents, it is not error for the trial court to rely on parol evidence, i.e., the oral testimonies
of witnesses Simeon Juan Tong and Jose Juan Tong, to arrive at the conclusion that an implied resulting trust exists. What
is crucial is the intention to create a trust.
"Intention—although only presumed, implied or supposed by law from the nature of the transaction or from the facts and
circumstances accompanying the transaction, particularly the source of the consideration—is always an element of a
resulting trust and may be inferred from the acts or conduct of the parties rather than from direct expression of conduct.
Certainly, intent as an indispensable element is a matter that necessarily lies in the evidence, that is, by evidence, even
circumstantial, of statements made by the parties at or before the time title passes. Because an implied trust is neither
dependent upon an express agreement nor required to be evidenced by writing, Article 1457 of our Civil Code authorizes
the admission of parol evidence to prove their existence. Parol evidence that is required to establish the existence of an
implied trust necessarily has to be trustworthy and it cannot rest on loose, equivocal or indefinite declarations."18
Lastly, the respondents’ assertion that the petitioners’ action is barred by prescription, laches and estoppel is erroneous.
As a rule, implied resulting trusts do not prescribe except when the trustee repudiates the trust. 1âwphi1 Further, the action
to reconvey does not prescribe so long as the property stands in the name of the trustee. 19 To allow prescription would be
tantamount to allowing a trustee to acquire title against his principal and true owner. It should be noted that the title of
Lot 998 was still registered in the name of Luis Sr. even when he predeceased Juan Tong. Considering that the implied
trust has been repudiated through such death, Lot 998 cannot be included in his estate except only insofar as his
undivided share thereof is concerned. It is well-settled that title to property does not vest ownership but it is a mere proof
that such property has been registered. And, the fact that the petitioners are in possession of all the tax receipts and tax
declarations of Lot 998 all the more amplify their claim of ownership over Lot 998-A. Although these tax declarations or
realty tax payments of property are not conclusive evidence of ownership, nevertheless, they are good indicia of
possession in the concept of owner, for no one in his right mind would be paying taxes for a property that is not in his
actual or at least constructive possession. Such realty tax payments constitute proof that the holder has a claim of title
over the property.20 Therefore, the action for reconveyance of Lot 998-A, which forms part of Lot 998, is imprescriptible
and the petitioners are not estopped from claiming ownership thereof.

Moreso, when the petitioners received a letter from VGCC, and discovered about the breach of the trust agreement
committed by the heirs of Luis, Sr., they immediately instituted an action to protect their rights, as well as upon learning
that respondent Go Tiat Kun executed a Deed of Sale of Undivided Interest over Lot 998-A in favor of her children. Clearly,
no delay may be attributed to them. The doctrine of laches is not strictly applied between near relatives, and the fact that
the parties are connected by ties of blood or marriage tends to excuse an otherwise unreasonable delay.
On the question of whether or not Juan Tong intended a donation to Luis, Sr., this is merely a disputable presumption
which in this case was clearly disputed by the petitioners and supported by the pieces of evidence on record.
Thus, contrary to the CA' s finding that there was no evidence on record showing that an implied resulting trust relation
arose between Juan Tong and Luis, Sr., the Court finds that the petitioners before the trial court, had actually adduced
sufficient evidence to prove the intention of Juan Tong to transfer to Luis, Sr. only the legal title of Lot 998, with attendant
expectation that Luis, Sr. would hold the property in trust for the family. The evidence of course is not documentary, but
rather testimonial. Furthermore, the respondents never proffered any proof that could tend to establish that they were the
ones who have been paying taxes from the time of its purchase up to the present, that they have been in possession of
the subject property or that they had it surveyed and subdivided openly with notice to all concerned.
WHEREFORE, in consideration of the foregoing premises, the instant petition is hereby GRANTED. The Decision dated
October 28, 2010 and Resolution dated March 3, 2011 of the Court of Appeals in CA-G.R. CV No. 03078 are REVERSED and
SET ASIDE. The Decision dated May 21, 2009 of the Regional Trial Court of Iloilo City, Branch 37 in Civil Case No. 05-28626
is REINSTATED.
SO ORDERED.
PROCEEDINGS FOR THE HOSPITALIZATION OF INSANE PERSONS
G.R. No. 89420 July 31, 1991 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROSALINO
DUNGO, accused-appellant.
PARAS, J.:
This is an automatic review of the Decision* of the Regional Trial Court of the Third Judicial Region, Branch 54, Macabebe,
Pampanga, convicting the accused of the crime of murder.
The pertinent facts of the case are:
On March 24, 1987, the prosecuting attorney of the Province of Pampanga filed an information charging Rosalino Dungo,
the defendant-appellant herein, with the felony of murder, committed as follows:
That on or about the 16th day of March, 1987 in the Municipality of Apalit, Province of Pampanga, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused ROSALINO DUNGO, armed with a knife,
with deliberate intent to kill, by means of treachery and with evident premeditation, did then and there willfully,
unlawfully and feloniously attack, assault and stab Mrs. Belen Macalino Sigua with a knife hitting her in the chest,
stomach, throat and other parts of the body thereby inflicting upon her fatal wounds which directly caused the
death of said Belen Macalino Sigua.
All contrary to law, and with the qualifying circumstance of alevosia, evident premeditation and the generic
aggravating circumstance of disrespect towards her sex, the crime was committed inside the field office of the
Department of Agrarian Reform where public authorities are engaged in the discharge of their duties, taking
advantage of superior strength and cruelty. (Record, p. 2)
On arraignment, accused-appellant Rosalino Dungo pleaded not guilty to the crime charged. Trial on the merits thereafter
ensued.
The prosecution, through several witnesses, has established that on March 16, 1987 between the hours of 2:00 and 3:00
o'clock in the afternoon, a male person, identified as the accused, went to the place where Mrs. Sigua was holding office at
the Department of Agrarian Reform, Apalit, Pampanga. After a brief talk, the accused drew a knife from the envelope he
was carrying and stabbed Mrs. Sigua several times. Accomplishing the morbid act, he went down the staircase and out of
the DAR's office with blood stained clothes, carrying along a bloodied bladed weapon. (TSN, pp. 4-19, 33-46, April 13,
1987; TSN, pp. 5-21, 28-38, April 20, 1987).
The autopsy report (Exh. "A") submitted by Dra. Melinda dela Cruz Cabugawan reveals that the victim sustained fourteen
(14) wounds, five (5) of which were fatal.
Rodolfo Sigua, the husband of the deceased, testified that, sometime in the latter part of February, 1987, the accused
Rosalino Dungo inquired from him concerning the actuations of his wife (the victim) in requiring so many documents from
the accused. Rodolfo Sigua explained to the accused the procedure in the Department of Agrarian Reform but the latter

just said "never mind, I could do it my own way." Rodolfo Sigua further testified that his wife's annual salary is P17,000.00,
and he spent the amount of P75,000.00 for the funeral and related expenses due to the untimely death of his wife. (TSN,
pp. 4-21, April 22, 1987).
The accused, in defense of himself, tried to show that he was insane at the time of the commission of the offense.
The defense first presented the testimony of Andrea Dungo, the wife of the accused. According to her, her husband had
been engaged in farming up to 1982 when he went to Lebanon for six (6) months. Later, in December 1983, her husband
again left for Saudi Arabia and worked as welder. Her husband did not finish his two-year contract because he got sick.
Upon his arrival, he underwent medical treatment. He was confined for one week at the Macabali Clinic. Thereafter he had
his monthly check-up. Because of his sickness, he was not able to resume his farming. The couple, instead, operated a
small store which her husband used to tend. Two weeks prior to March 16, 1987, she noticed her husband to be in deep
thought always; maltreating their children when he was not used to it before; demanding another payment from his
customers even if the latter had paid; chasing any child when their children quarrelled with other children. There were also
times when her husband would inform her that his feet and head were on fire when in truth they were not. On the fateful
day of March 16, 1987, at around noon time, her husband complained to her of stomach ache; however, they did not
bother to buy medicine as he was immediately relieved of the pain therein. Thereafter, he went back to the store. When
Andrea followed him to the store, he was no longer there. She got worried as he was not in his proper mind. She looked
for him. She returned home only when she was informed that her husband had arrived. While on her way home, she heard
from people the words "mesaksak" and "menaksak" (translated as "stabbing" and "has stabbed"). She saw her husband in
her parents-in-law's house with people milling around, including the barangay officials. She instinctively asked her
husband why he did such act, but he replied, "that is the only cure for my ailment. I have a cancer in my heart." Her
husband further said that if he would not be able to kill the victim in a number of days, he would die, and that he chose to
live longer even in jail. The testimony on the statements of her husband was corroborated by their neighbor Thelma
Santos who heard their conversation. (See TSN, pp. 12-16, July 10, 1987). Turning to the barangay official, her husband
exclaimed, "here is my wallet, you surrender me." However, the barangay official did not bother to get the wallet from him.
That same day the accused went to Manila. (TSN, pp. 6-39, June 10, 1981)
Dra. Sylvia Santiago and Dr. Nicanor Echavez of the National Center for Mental Health testified that the accused was
confined in the mental hospital, as per order of the trial court dated August 17, 1987, on August 25, 1987. Based on the
reports of their staff, they concluded that Rosalino Dungo was psychotic or insane long before, during and after the
commission of the alleged crime and that his insanity was classified under organic mental disorder secondary to cerebro-
vascular accident or stroke. (TSN, pp. 4-33, June 17, 1988; TSN, pp. 5-27, August 2, 1988).
Rosalino Dungo testified that he once worked in Saudi Arabia as welder. However, he was not able to finish his two-year
contract when he got sick. He had undergone medical treatment at Macabali Clinic. However, he claimed that he was not
aware of the stabbing incident nor of the death of Mrs. Belen Sigua. He only came to know that he was accused of the
death of Mrs. Sigua when he was already in jail. (TSN, pp. 5-14, July 15, 1988)
Rebuttal witnesses were presented by the prosecution. Dr. Vicente Balatbat testified that the accused was his patient. He
treated the accused for ailments secondary to a stroke. While Dr. Ricardo Lim testified that the accused suffered from
oclusive disease of the brain resulting in the left side weakness. Both attending physicians concluded that Rosalino Dungo
was somehow rehabilitated after a series of medical treatment in their clinic. Dr. Leonardo Bascara further testified that the
accused is functioning at a low level of intelligence. (TSN, pp. 620, September 1, 1988; TSN, pp. 4-29, November 7, 1988).
On January 20, 1989, the trial court rendered judgment the dispositive portion of which reads:
WHEREFORE, finding the accused guilty beyond reasonable doubt as principal for the crime of murder, the Court
hereby renders judgment sentencing the accused as follows:
1. To suffer the penalty of reclusion perpetua and the accessories of the law;
2. To indemnify the family of the victim in the amount of P75,000.00 as actual damage, P20,000.00 as exemplary
damages and P30,000.00 as moral damages.
SO ORDERED. (p. 30, Rollo)
The trial court was convinced that the accused was sane during the perpetration of the criminal act. The act of concealing
a fatal weapon indicates a conscious adoption of a pattern to kill the victim. He was apprehended and arrested in Metro
Manila which indicates that he embarked on a flight in order to evade arrest. This to the mind of the trial court is another
indication that the accused was sane when he committed the crime.
It is an exercise in futility to inquire into the killing itself as this is already admitted by the defendant-appellant. The only
pivotal issue before us is whether or not the accused was insane during the commission of the crime changed.
One who suffers from insanity at the time of the commission of the offense charged cannot in a legal sense entertain a
criminal intent and cannot be held criminally responsible for his acts. His unlawful act is the product of a mental disease or

a mental defect. In order that insanity may relieve a person from criminal responsibility, it is necessary that there be a
complete deprivation of intelligence in committing the act, that is, that the accused be deprived of cognition; that he acts
without the least discernment; that there be complete absence or deprivation of the freedom of the will. (People v. Puno,
105 SCRA 151)
It is difficult to distinguish sanity from insanity. There is no definite defined border between sanity and insanity. Under
foreign jurisdiction, there are three major criteria in determining the existence of insanity, namely: delusion test, irresistible
impulse test, and the right and wrong test. Insane delusion is manifested by a false belief for which there is no reasonable
basis and which would be incredible under the given circumstances to the same person if he is of compos mentis. Under
the delusion test, an insane person believes in a state of things, the existence of which no rational person would believe. A
person acts under an irresistible impulse when, by reason of duress or mental disease, he has lost the power to choose
between right and wrong, to avoid the act in question, his free agency being at the time destroyed. Under the right and
wrong test, a person is insane when he suffers from such perverted condition of the mental and moral faculties as to
render him incapable of distinguishing between right and wrong. (See 44 C.J.S. 2)
So far, under our jurisdiction, there has been no case that lays down a definite test or criterion for insanity. However, We
can apply as test or criterion the definition of insanity under Section 1039 of the Revised Administrative Code, which states
that insanity is "a manifestation in language or conduct, of disease or defect of the brain, or a more or less permanently
diseased or disordered condition of the mentality, functional or organic, and characterized by perversion, inhibition, or by
disordered function of the sensory or of the intellective faculties, or by impaired or disordered volition." Insanity as defined
above is evinced by a deranged and perverted condition of the mental faculties which is manifested in language or
conduct. An insane person has no full and clear understanding of the nature and consequence of his act.
Thus, insanity may be shown by surrounding circumstances fairly throwing light on the subject, such as evidence of the
alleged deranged person's general conduct and appearance, his acts and conduct inconsistent with his previous character
and habits, his irrational acts and beliefs, and his improvident bargains.
Evidence of insanity must have reference to the mental condition of the person whose sanity is in issue, at the very time of
doing the act which is the subject of inquiry. However, it is permissible to receive evidence of his mental condition for a
reasonable period both before and after the time of the act in question. Direct testimony is not required nor the specific
acts of derangement essential to establish insanity as a defense. The vagaries of the mind can only be known by outward
acts: thereby we read the thoughts, motives and emotions of a person; and through which we determine whether his acts
conform to the practice of people of sound mind. (People v. Bonoan, 64 Phil. 87)
In the case at bar, defense's expert witnesses, who are doctors of the National Center for Mental Health, concluded that
the accused was suffering from psychosis or insanity classified under organic mental disorder secondary to cerebro-
vascular accident or stroke before, during and after the commission of the crime charged. (Exhibit L, p. 4). Accordingly, the
mental illness of the accused was characterized by perceptual disturbances manifested through impairment of judgment
and impulse control, impairment of memory and disorientation, and hearing of strange voices. The accused allegedly
suffered from psychosis which was organic. The defect of the brain, therefore, is permanent.
Dr. Echavez, defense's expert witness, admitted that the insanity of the accused was permanent and did not have a period
for normal thinking. To quote
Q Is there such a lucid intervals?
A In this case, considering the nature of the organic mental disorder, the lucid intervals unfortunately are not
present, sir.
(TSN, p. 36, August 2, 1988)
However, Dr. Echavez disclosed that the manifestation or the symptoms of psychosis may be treated with medication.
(TSN, p. 26, August 2, 1988). Thus, although the defect of the brain is permanent, the manifestation of insanity is curable.
Dr. Echavez further testified that the accused was suffering from psychosis since January of 1987, thus:
Q In your assessment of the patient, did you determine the length of time the patient has been mentally ill?
A From his history, the patient started (sic) or had a stroke abroad. If I may be allowed to scan my record, the
record reveals that the patient had a stroke in Riyadh about seven (7) months before his contract expired and he
was brought home. Sometime in January of 1987, the first manifestation is noted on the behavioral changes. He
was noted to be in deep thought, pre-occupied self, complaining of severe headache, deferment of sleep and loss
of appetite; and that was about January of 1987, Sir. (TSN, pp. 21-22, August 2, 1988)
The defense reposed their arguments on the findings of the doctors of the National Center for Mental Health, specifically
on Dr. Echavez's assessment that the accused has been insane since January of 1987 or three (3) months before the
commission of the crime charged. The doctors arrived at this conclusion based on the testimonies of the accused's wife

and relatives, and after a series of medical and psychological examinations on the accused when he was confined therein.
However, We are still in quandary as to whether the accused was really insane or not during the commission of the
offense.
The prosecution aptly rebutted the defense proposition, that the accused, though he may be insane, has no lucid intervals.
It is an undisputed fact that a month or few weeks prior to the commission of the crime charged the accused confronted
the husband of the victim concerning the actuations of the latter. He complained against the various requirements being
asked by the DAR office, particularly against the victim. We quote hereunder the testimony of Atty. Rodolfo C. Sigua:
Q In the latter part of February 1987 do you remember having met the accused Rosalino Dungo?
A Yes, sir.
Q Where?
A At our residence, sir, at San Vicente, Apalit, Pampanga.
Q Could you tell us what transpired in the latter part of February 1987, when you met the accused at your
residence?
A Accused went to our residence. When I asked him what he wanted, accused told me that he wanted to know
from my wife why she was asking so many documents: why she was requiring him to be interviewed and file the
necessary documents at the Office of the DAR. Furthermore, he wanted to know why my wife did not want to
transfer the Certificate of Land Transfer of the landholding of his deceased father in his name.
xxx xxx xxx
Q When the accused informed you in the latter part of February 1987 that your wife the late Belen Macalino Sigua
was making hard for him the transfer of the right of his father, what did you tell him?
A I asked the accused, "Have you talked or met my wife? Why are you asking this question of me?"
Q What was his answer?
A Accused told me that he never talked nor met my wife but sent somebody to her office to make a request for
the transfer of the landholding in the name of his deceased father in his name.
Q When you informed him about the procedure of the DAR, what was the comment of the accused?
A The accused then said, "I now ascertained that she is making things difficult for the transfer of the landholding
in the name of my father and my name."
(TSN, pp. 5-7, April 22, 1987)
If We are to believe the contention of the defense, the accused was supposed to be mentally ill during this confrontation.
However, it is not usual for an insane person to confront a specified person who may have wronged him. Be it noted that
the accused was supposed to be suffering from impairment of the memory, We infer from this confrontation that the
accused was aware of his acts. This event proves that the accused was not insane or if insane, his insanity admitted of lucid
intervals.
The testimony of defense witness Dr. Nicanor Echavez is to the effect that the appellant could have been aware of the
nature of his act at the time he committed it. To quote:
Q Could you consider a person who is undergoing trial, not necessarily the accused, when asked by the Court the
whereabouts of his lawyer he answered that his lawyer is not yet in Court and that he is waiting for his counsel to
appear and because his counsel did not appear, he asked for the postponement of the hearing of the case and to
reset the same to another date. With those facts, do you consider him insane?
A I cannot always say that he is sane or insane, sir.
Q In other words, he may be sane and he may be insane?
A Yes, sir.
COURT
Q How about if you applied this to the accused, what will be your conclusion?
A Having examined a particular patient, in this particular case, I made a laboratory examination, in short all the
assessment necessary to test the behavior of the patient, like for example praying for postponement and fleeing
from the scene of the crime is one situation to consider if the patient is really insane or not. If I may elaborate to
explain the situation of the accused, the nature of the illness, the violent behavior, then he appears normal he can
reason out and at the next moment he burst out into violence regardless motivated or unmotivated. This is one of
the difficulties we have encountered in this case. When we deliberated because when we prepared this case we
have really deliberation with all the members of the medical staff so those are the things we considered. Like for
example he shouted out "Napatay ko si Mrs. Sigua!" at that particular moment he was aware of what he did, he
knows the criminal case.
COURT
Q With that statement of yours that he was aware when he shouted that he killed the victim in this case, Mrs.
Sigua, do we get it that he shouted those words because he was aware when he did the act?
A The fact that he shouted, Your Honor, awareness is there. (TSN, pp. 37-41, August 2, 1983; emphasis supplied)
Insanity in law exists when there is a complete deprivation of intelligence. The statement of one of the expert witnesses
presented by the defense, Dr. Echavez, that the accused knew the nature of what he had done makes it highly doubtful
that accused was insane when he committed the act charged. As stated by the trial court:
The Court is convinced that the accused at the time that he perpetrated the act was sane. The evidence shows that
the accused, at the time he perpetrated the act was carrying an envelope where the fatal weapon was hidden. This
is an evidence that the accused consciously adopted a pattern to kill the victim. The suddenness of the attack
classified the killing as treacherous and therefore murder. After the accused ran away from the scene of the
incident after he stabbed the victim several times, he was apprehended and arrested in Metro Manila, an
indication that he took flight in order to evade arrest. This to the mind of the Court is another indicia that he was
conscious and knew the consequences of his acts in stabbing the victim (Rollo, p. 63)
There is no ground to alter the trial court's findings and appreciation of the evidence presented. (People v. Claudio, 160
SCRA 646). The trial court had the privilege of examining the deportment and demeanor of the witnesses and therefore, it
can discern if such witnesses were telling the truth or not.
Generally, in criminal cases, every doubt is resolved in favor of the accused. 1âwphi1 However, in the defense of insanity,
doubt as to the fact of insanity should be resolved in fervor of sanity. The burden of proving the affirmative allegation of
insanity rests on the defense. Thus:
In considering the plea of insanity as a defense in a prosecution for crime, the starting premise is that the law
presumes all persons to be of sound mind. (Art. 800, Civil Code: U.S. v. Martinez, 34 Phil. 305) Otherwise stated,
the law presumes all acts to be voluntary, and that it is improper to presume that acts were done unconsciously
(People v. Cruz, 109 Phil. 288). . . . Whoever, therefore, invokes insanity as a defense has the burden of proving its
existence. (U.S. v. Zamora, 52 Phil. 218) (People v. Aldemita, 145 SCRA 451)
The quantum of evidence required to overthrow the presumption of sanity is proof beyond reasonable doubt. Insanity is a
defense in a confession and avoidance and as such must be proved beyond reasonable doubt. Insanity must be clearly
and satisfactorily proved in order to acquit an accused on the ground of insanity. Appellant has not successfully
discharged the burden of overcoming the presumption that he committed the crime as charged freely, knowingly, and
intelligently.
Lastly, the State should guard against sane murderer escaping punishment through a general plea of insanity. (People v.
Bonoan, supra) PREMISES CONSIDERED, the questioned decision is hereby
AFFIRMED without costs.
SO ORDERED.

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Subsequently, petitioners moved to intervene in the proceedings to oppose the same.

We find the petition to be without merit.

Special Proceedings (2sem2017-18) mgb 3

WHEREFORE, the petitions are hereby DENIED.

2. G.R. No. L-57438 January 3, 1984 FELICIANO FRANCISCO, petitioner,

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WHEREFORE, the petition for certiorari is DISMISSED, without pronouncement as to costs.

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WHEREFORE, the motion for reconsideration is DENIED for lack of merit.

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CONTRARY TO ART. 335 OF THE RPC, AS AMENDED BY R.A. 7659.[3]

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1. Breasts not developed.

Thereafter, Hilaria reported the matter to the police.

Eventually, an Information for rape was filed against appellant.

Alberto corroborated appellants testimony.

In convicting appellant, the trial court held:

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1. By using force or intimidation;

2. When the woman is deprived of reason or otherwise unconscious; and

3. When the woman is under twelve years of age or is demented.

The crime of rape shall be punished by reclusion perpetua.

A. Because I was raped, sir.

A. It was in March, 1996, sir.

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A. I was less than 10 years old, sir.

A. He took off my shorts and panty, sir.

Q. After he placed himself on top of you, what else did he do?

A. I was hurt, sir.

Special Proceedings (2sem2017-18) mgb 10

In People vs. Garcia,[26] we held:

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"WHEREFORE, judgment is hereby rendered as follows:

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a. attorney’s fees in the sum of P30,000.00; and

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This Court is not persuaded.

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(a) The jurisdictional facts;

(b) The minority or incompetency rendering the appointment necessary or convenient;

(d) The probable value and character of his estate;

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7. Republic Act No. 7610 June 17, 1992

Section 3. Definition of Terms. –

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(5) Being a victim of a man-made or natural disaster or calamity; or

(1) Child Prostitution and other sexual abuse;

(2) Child trafficking;

(3) Obscene publications and indecent shows;

(4) Other acts of abuses; and

The facts, as found by the Court of Appeals, are as follows:

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The said court then disposed as follows:

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Hence, this appeal.[8]

Article 124 of the Family Code provides as follows:

Special Proceedings (2sem2017-18) mgb 23

Costs against petitioners.

The facts, which are undisputed by the parties, follow: