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EVIDENCE

ADMINISTRATIVE AND QUASI-JUDICIAL PROCEEDINGS

BANTOLINO VS COCA-COLA BOTTLERS, INC.

G.R. No. 153660 June 10, 2003

FACTS: In 1995 62 employees of Coca-Cola and its officers, Lipercon, People's Specialist Services, and Interim filed a complaint against respondents
for unfair labor practice through illegal dismissal, violation of their security of tenure and the perpetuation of the "Cabo System." They thus prayed
for reinstatement with full back wages, and the declaration of their regular employment status. They failed to either attend the scheduled mandatory
conferences or submit affidavits, the claims of 52 complainant were dismissed. LA De Vera conducted clarificatory hearings to elicit information from
the 10 remaining complainants as to their alleged employment with CC. As route helpers, bottle segregators, of CC. They were replaced and
prevented from entering the company premises. CC filed a motion to dismiss complaint for lack of jurisdiction and cause of action, there being no
employer-employee relationship, officers being bona fide independent contractors, were the real employers of the complainants. LA rendered a
decision to reinstate complainants to their former positions and to pay their full back wages which, with the exception of Prudencio Bantolino whose
back wages must be computed upon proof of his dismissal. Appellate court dismissed their complaints for lack of sufficient evidence. Petitioners
insist that, unlike regular courts, labor cases are decided based merely on the parties' position papers and affidavits in support of their allegations
and subsequent pleadings that may be filed thereto. As such, according to petitioners, the Rules of Court should not be strictly applied in this case
specifically by putting them on the witness stand to be cross-examined because the NLRC has its own rules of procedure which were applied by the
LA in coming up with a decision in their favor.

In Loquias v. Office of the Ombudsman, The crux of the controversy revolves around the propriety of giving evidentiary value to the affidavits despite
the failure of the affiants to affirm their contents and undergo the test of cross-examination.

ISSUE: WON the court should apply ROC in a labor case.

HELD: No. In Rabago v. NLRC9 SC held that "the argument that the affidavit is hearsay because the affiants were not presented for cross-examination
is not persuasive because the rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where decisions
may be reached on the basis of position papers only." Art. 221 of the Labor Code, the rules of evidence prevailing in courts of law do not control
proceedings before the Labor Arbiter and the NLRC. LA and the NLRC are authorized to adopt reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law and procedure, all in the interest of due process. To reiterate, administrative
bodies like the NLRC are not bound by the technical niceties of law and procedure and the rules obtaining in courts of law. Indeed, the Revised Rules
of Court and prevailing jurisprudence may be given only stringent application, i.e., by analogy or in a suppletory character and effect. Not all waivers
and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of mind.

JUDICIAL NOTICE
A.M. No. RTJ-92-876 September 19, 1994
STATE PROSECUTORS vs MURO

FACTS: In assaying the requisite norms for qualifications and eminence of a magistrate, legal authorities place a premium on how he has complied
with his continuing duty to know the law. A quality thus considered essential to the judicial character is that of "a man of learning who spends
tirelessly the weary hours after midnight acquainting himself with the great body of traditions and the learning of the law; is profoundly learned in all
the learning of the law; and knows how to use that learning." 1

Obviously, it is the primary duty of a judge, which he owes to the public and to the legal profession, to know the very law he is supposed to apply to a
given controversy. He is called upon to exhibit more than just a cursory acquaintance with the statutes and procedural rules. Party litigants will have
great faith in the administration of justice if judges cannot justly be accused of apparent deficiency in their grasp of the legal principles. For, service in
the judiciary means a continuous study and research on the law from beginning to end. 2

In 1992, respondent Judge Muro of RTC Manila was charged by State Prosecutors Mariano, Dee and Tac-an with ignorance of the law, grave
misconduct and violations of Rules 2.01, 3.01 and 3.02 of the Code of Judicial Conduct, respondent judge issued an Order dismissing 11 cases against
the accused Mrs. Imelda Romualdez Marcos, for Violation of Central Bank Foreign Exchange Restrictions, he issued his Order solely on the basis of
newspaper reports concerning the announcement by the President of the lifting by the government of all foreign exchange restrictions and the
arrival at such decision by the Monetary Board as per statement of Central Bank Governor Jose Cuisia; claiming that the reported announcement of
the Executive Department on the lifting of foreign exchange restrictions by two newspapers which are reputable and of national circulation had the
effect of repealing Central Bank Circular No. 960, as allegedly supported by SC decisions, the Court contended that it was deprived of jurisdiction,
and, motu, proprio had to dismiss "for not to do so opens this Court to charges of trying cases over which it has no more jurisdiction;" In dismissing
the cases on the basis of a Central Bank Circular or Monetary Board Resolution which as of date hereof, has not even been officially issued, and
basing his Order/decision on a mere newspaper account of the advance announcement made by the President of the said fact of lifting or liberalizing
foreign exchange controls, respondent judge acted prematurely and in indecent haste. Judge's arrogant and cavalier posture in taking judicial notice
purportedly as a matter of public knowledge a mere newspaper account that the President had announced the lifting of foreign exchange restrictions
as basis for his assailed order of dismissal is highly irregular, erroneous and misplaced. For the respondent judge to take judicial notice thereof even
before it is officially released by the Central Bank and its full text published as required by law to be effective shows his precipitate action in utter
disregard of the fundamental precept of due process which the People is also entitled to and exposes his gross ignorance of the law, thereby
tarnishing public confidence in the integrity of the judiciary.

Respondent judge filed his comment, that there was no need to await publication of the Central Bank (CB) circular repealing the existing law on
foreign exchange controls for the simple reason that the public announcement made by the President in several newspapers of general circulation
lifting foreign exchange controls was total, absolute, without qualification, and was immediately effective; the "saving clause" under CB Circular No.
1353 specifically refers only to pending actions or investigations involving violations of CB Circular No. 1318, whereas the eleven cases dismissed
involved charges for violations of CB Circular No. 960, hence the accused cannot be tried and convicted under a law different from that under which
she was charged; that assuming that respondent judge erred in issuing the order of dismissal, the proper remedy should have been an appeal
therefrom but definitely not an administrative complaint for his dismissal; that a mistake committed by a judge should not necessarily be imputed as
ignorance of the law; and that a "court can reverse or modify a doctrine but it does not show ignorance of the justices or judges whose decisions
were reversed or modified" because "even doctrines initiated by the Supreme Court are later reversed, so how much more for the lower courts?"
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Finally, respondent judge asseverates that complainants who are officers of the Department of Justice, violated Section 6, Rule 140 of the Rules of
Court which provides that "proceedings against judges of first instance shall be private and confidential" when they caused to be published in the
newspapers the filing of the present administrative case against him. Repeal of a penal law without re-enactment extinguishes the right to prosecute
or punish the offense committed under the old law and if the law repealing the prior penal law fails to penalize the acts which constituted the
offense defined and penalized in the repealed law, the repealed law carries with it the deprivation of the courts of jurisdiction to try, convict and
sentence persons charged with violations of the old law prior to its repeal. The doctrine of judicial notice rests on the wisdom and discretion of the
courts. The power to take judicial notice is to be exercised by courts with caution; care must be taken that the requisite notoriety exists; and every
reasonable doubt on the subject should be promptly resolved in the negative. Matters of judicial notice have three material requisites: (1) the matter
must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be
known to be within the limits of the jurisdiction of the court. 11 The provincial guide in determining what facts may be assumed to be judicially known
is that of notoriety. 12 Hence, it can be said that judicial notice is limited to facts evidenced by public records and facts of general notoriety. 13

To say that a court will take judicial notice of a fact is merely another way of saying that the usual form of evidence will be dispensed with if
knowledge of the fact can be otherwise acquired. 14 This is because the court assumes that the matter is so notorious that it will not be
disputed. 15 But judicial notice is not judicial knowledge. The mere personal knowledge of the judge is not the judicial knowledge of the court, and he
is not authorized to make his individual knowledge of a fact, not generally or professionally known, the basis of his action. Judicial cognizance is taken
only of those matters which are "commonly" known. 16

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the knowledge of men generally in the course of the
ordinary experiences of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. Respondent judge, in exercising discretion and on the basis of a mere newspaper account referred to as hearsay evidence twice
removed, took judicial notice of the supposed lifting of foreign exchange controls, a matter which was not and cannot be considered of common
knowledge or of general notoriety. Worse, he took cognizance of an administrative regulation which was not yet in force when the order of dismissal
was issued. Jurisprudence dictates that judicial notice cannot be taken of a statute before it becomes effective. 19 The reason is simple. A law which is
not yet in force and hence, still inexistent, cannot be of common knowledge capable of ready and unquestionable demonstration, which is one of the
requirements before a court can take judicial notice of a fact.

Secondly, had respondent judge only bothered to read a little more carefully the texts of the circulars involved, he would have readily perceived and
known that Circular No. 1318 also contains a substantially similar saving clause as that found in Circular No. 1353

It unequivocally appears from the section above quoted that although Circular No. 1318 repealed Circular No. 960, the former specifically excepted
from its purview all cases covered by the old regulations which were then pending at the time of the passage of the new regulations. Thus, any
reference made to Circular No. 1318 necessarily involves and affects Circular No. 960.

Court finds respondent Judge Manuel T. Muro guilty of gross ignorance of the law. He is hereby DISMISSED from the service, such dismissal to carry
with it cancellation of eligibility, forfeiture of leave credits and retirement benefits, and disqualification from reemployment in the government
service. Respondent is hereby ordered to CEASE and DESIST immediately from rendering any judgment or order, or effective upon receipt of this
decision.

G.R. No. 104235 November 18, 1993

ZALAMEA vs CA

FACTS: TransWorld Airlines, Inc.'s refused to accommodate them in TWA Flight from NY to LA in 1984 despite possession of confirmed tickets,
petitioners filed an action for damages before the RTC Makati. Appellate court found that while there was a breach of contract on respondent TWA's
part, there was neither fraud nor bad faith because under the Code of Federal Regulations by the Civil Aeronautics Board of the United States of
America it is allowed to overbook flights.

Zalamea’s purchased (3) airline tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a flight at a discount of 75% while that of
their daughter was a full fare ticket. All three tickets represented confirmed reservations. They received notice of the reconfirmation of their
reservations for said flight. On the appointed date, petitioners checked in at 10:00 a.m., an hour earlier than the scheduled flight at 11:00 a.m. but
were placed on the wait-list because the number of passengers who had checked in before them had already taken all the seats available on the
flight. Liana Zalamea appeared as the No. 13 on the wait-list while the two other Zalameas were listed as "No. 34, showing a party of two." Next TWA
flight to Los Angeles Mrs. Zalamea and her daughter, could not be accommodated because it was also fully booked. Thus, they were constrained to
book in another flight and purchased two tickets from American Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars. Upon their arrival in
the Philippines, petitioners filed an action for damages based on breach of contract of air carriage before RTC Makati. CA held that moral damages
are recoverable in a damage suit upon a breach of contract of carriage only where there is fraud or bad faith. Since it is a matter of record that
overbooking of flights is a common and accepted practice of airlines in the United States and is specifically allowed under the Code of Federal
Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be imputed on respondent TransWorld Airlines.

U.S. law or regulation allegedly authorizing overbooking has never been proved. Foreign laws do not prove themselves nor can the courts take
judicial notice of them. Like any other fact, they must be alleged and proved. TWA relied solely on the statement of Ms. Gwendolyn Lather, its
customer service agent, in her deposition dated January 27, 1986 that the Code of Federal Regulations of the Civil Aeronautics Board allows
overbooking. Aside from said statement, no official publication of said code was presented as evidence. Thus, respondent court's finding that
overbooking is specifically allowed by the US Code of Federal Regulations has no basis in fact.

Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to the case at bar in accordance with the principle of lex
loci contractus which require that the law of the place where the airline ticket was issued should be applied by the court where the passengers are
residents and nationals of the forum and the ticket is issued in such State by the defendant airline.8 Since the tickets were sold and issued in the
Philippines, the applicable law in this case would be Philippine law.

Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad faith in not informing its passengers beforehand that it
could breach the contract of carriage even if they have confirmed tickets if there was overbooking. Moreover, respondent TWA was also guilty of not
informing its passengers of its alleged policy of giving less priority to discounted tickets.
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The award to petitioners of attorney's fees is also justified under Article 2208(2) of the Civil Code which allows recovery when the defendant's act or
omission has compelled plaintiff to litigate or to incur expenses to protect his interest.

G.R. Nos. 172760-61 October 15, 2007

KAREN and KRISTY FISHING INDUSTRY vs CA

FACTS: Sps Tuvilla were the proprietors of Karen & Kristy Fishing Industry which operated the fishing vessels M/V Karen and M/V Kristy. In 1998,
several fishermen-crew members of said vessels filed a complaint for illegal dismissal, unfair labor practice and money claims against Spouses Tuvilla
and Karen & Kristy Fishing Industry. LA ordered petitioners to pay the money claims but dismissed the complaint for illegal dismissal and unfair labor
practice.

If counsel moves to another address without informing the court of that change, such omission or neglect is inexcusable and will not stay the finality
of the decision. The court cannot be expected to take judicial notice of the new address of a lawyer who has moved or to ascertain on its own
whether or not the counsel of record has been changed and who the new counsel could possibly be or where he probably resides or holds office. The
Court ruled that the counsel’s omission was an inexcusable neglect binding upon petitioner therein for the following reasons:

When a party is represented by counsel of record, service of orders and notices must be made upon said attorney and notice to the client and to any
other lawyer than the counsel of record is not notice in law.

G.R. No. 85423 May 6, 1991

JOSE TABUENA vs CA

FACTS: Disputed lot was sold by Juan Peralta, Jr. sometime in 1926 to Alfredo Tabernilla while the two were in US. Tabernilla returned to the
Philippines in 1934, and Timtiman, acting upon her son Juan's instruction, conveyed the subject land to Tabernilla. At the same time, she requested
that she be allowed to stay thereon as she had been living there all her life. Tabernilla agreed provided she paid the realty taxes on the property,
which she promised to do, and did. She remained on the said land until her death, following which the Tabuena, her son and half-brother of Juan
Peralta, Jr., took possession.

The respondent court held that the trial court committed no reversible error in taking judicial notice of Tabuena's testimony it had previously heard
which was closely connected with the case before it. It conceded that as a general rule "courts are not authorized to take judicial notice, in the
adjudication of cases pending before them, of the contents of the records of other cases, even when such cases have been tried or are pending in
the same court, and notwithstanding the fact that both cases may have been heard or are actually pending b before the same judge.7 Nevertheless,
it applied the exception that:

. . . in the absence of objection, and as a matter of convenience to all parties, a court may properly treat all or any part of the original
record of a case filed in its archives as read into the record of a case pending before it, when, with the knowledge of the opposing party,
reference is made to it for that purpose, by name and number or in some other manner by which it is sufficiently designated; or when the
original record of the former case or any part of it, is actually withdrawn from the archives by the court's direction, at the request or with
the consent of the parties, and admitted as a part of the record of the case then pending.8

It is clear, though, that this exception is applicable only when, "in the absence of objection," "with the knowledge of the opposing party," or "at the
request or with the consent of the parties," the case is clearly referred to or "the original or part of the records of the case are actually withdrawn
from the archives" and "admitted as part of the record of the case then pending." These conditions have not been established here. On the contrary,
the petitioner was completely unaware that his testimony in Civil Case was being considered by the trial court in the case then pending before it. As
the petitioner puts it, the matter was never taken up at the trial, leaving him no opportunity to counteract. It has failed to prove that the subject lot
was the same parcel of land sold by Juan Peralta, Jr. to Tabernilla and not another property, as the petitioner contends. Even assuming it was the
same lot, there is no explanation for the sale thereof by Juan Peralta, Jr., who was the son of Damasa Timtiman. According to the trial court, "no
question that before 1934 the land in question belonged to Timtiman." Juan Peralta, Jr. could not have validly conveyed title to property that did not
belong to him unless he had appropriate authorization from the owner. SC finding is that the private respondent, as plaintiff in the lower court, failed
to prove his claim of ownership over the disputed property with evidence properly cognizable under our adjudicative laws.

G.R. No. 173151 March 28, 2008

EDUARDO BUGHAW, JR. vs. TREASURE ISLAND INDUSTRIAL CORP

FACTS: In 1986, petitioner was employed as production worker by respondent. In 2001, one of its employees, Erlito Loberanes (Loberanes) was
caught in flagrante delicto by the police officers while in possession of shabu. Loberanes was arrested and sent to jail. In the course of police
investigation, Loberanes admitted the commission of the crime. He implicated petitioner in the crime by claiming that part of the money used for
buying the illegal drugs was given by the latter, and the illegal drugs purchased were for their consumption for the rest of the month.

In view of Loberanes’s statement, respondent served a Memo for Explanation to petitioner requiring him to explain within 120 hours why no
disciplinary action should be imposed against him for his alleged involvement in illegal drug activities. Petitioner was further directed to appear at the
office of respondent’s legal counsel on 16 June 2001 at 9:00 o’clock in the morning for the hearing on the matter. For the meantime, petitioner was
placed under preventive suspension for the period of 30 days effective upon receipt of the Notice. Petitioner failed to show up in administrative
mtgs. Respondent addressed to petitioner, terminated the latter’s employment for using illegal drugs within company premises during working
hours, and for refusal to attend the administrative hearing and submit written explanation on the charges hurled against him. Petitioner filed a
complaint for illegal dismissal against respondent and its President before LA. Petitioner alleged that he had been working for the respondent for 15
years and he was very conscientious with his job. He was suspended for 30 days based on the unfounded allegation of his co-worker that he used
illegal drugs within company premises. When petitioner reported back to work after the expiration of his suspension, he was no longer allowed by
respondent to enter the work premises.

LA in favor of petitioner since the respondent failed to present substantial evidence to establish the charge leveled against the petitioner. Apart from
Loberanes’s statements on petitioner’s alleged illegal drug use, no other corroborating proof was offered by respondent to justify petitioner’s
dismissal. Further, respondent failed to comply with due process when it immediately suspended petitioner and eventually dismissed him from
employment. NLRC decreed that respondent failed to accord due process to petitioner when it dismissed him from employment. The use of illegal
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drugs can be a valid ground for terminating employment only if it is proven true. An accusation of illegal drug use, standing alone, without any proof
or evidence presented in support thereof, would just remain an accusation.

The charge of drug abuse inside the company’s premises and during working hours against petitioner constitutes serious misconduct, which is one of
the just causes for termination. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not merely an error in judgment. This Court took judicial
notice of scientific findings that drug abuse can damage the mental faculties of the user. It is beyond question therefore that any employee under the
influence of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and property of his co-workers and even his
employer. while there was a valid ground for dismissal, the procedural requirements for termination as mandated by law and jurisprudence were not
observed. Respondent Treasure Island Corporation is ORDERED to pay the amount of ₱30,000.00 as nominal damages

G.R. No. 112573 February 9, 1995

NORTHWEST ORIENT AIRLINES, INC. vs CA

FACTS: NORTHWEST is a corporation from U.S.A., sought to enforce in Civil Case in RTC Manila, a judgment rendered in its favor by a Japanese court
against private respondent SHARP under Philippine laws. Both entered into an International Passenger Sales Agency Agreement, whereby the former
authorized the latter to sell its air transportation tickets. Unable to remit the proceeds of the ticket sales made by defendant on behalf of the plaintiff
under the said agreement, plaintiff sued defendant in Japan, for collection of the unremitted proceeds of the ticket sales, claim for damages. After
the two attempts of service were unsuccessful, the judge of the Tokyo District Court decided to have the complaint and the writs of summons served
at the head office of the defendant in Manila. Director of the Tokyo District Court requested SC Japan to serve the summons through diplomatic
channels upon the defendant's head office in Manila. Despite receipt of the same, defendant failed to appear at the scheduled hearing. Thus, the
Tokyo Court proceeded to hear the plaintiff's complaint and rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195
Yen and damages for delay at the rate of 6% per annum from August 28, 1980 up to and until payment is completed, a suit for enforcement of the
judgment was filed by plaintiff before RTC Manila.

This Court agrees that if the defendant in a foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the
person of the defendant but it must be served upon the defendant in the territorial jurisdiction of the foreign court. Such is not the case here
because the defendant was served with summons in the Philippines and not in Japan. In an action strictly in personam, such as the instant case,
personal service of summons within the forum is required for the court to acquire jurisdiction over the defendant.

Residence is said to be an attribute of a natural person, and can be predicated on an artificial being only by more or less imperfect analogy. Strictly
speaking, therefore, a corporation can have no local residence or habitation.

Unable to obtain a reconsideration of the decision, NORTHWEST elevated the case to this Court contending that the respondent court erred in
holding that SHARP was not a resident of Japan and that summons on SHARP could only be validly served within that country.

A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to presume
the regularity of the proceedings and the giving of due notice therein.6

It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex fori or
the internal law of the forum.8 In this case, it is the procedural law of Japan where the judgment was rendered that determines the validity of the
extraterritorial service of process on SHARP. As to what this law is is a question of fact, not of law. It may not be taken judicial notice of and must be
pleaded and proved like any other fact.9 Sections 24 and 25, Rule 132 of the Rules of Court provide that it may be evidenced by an official publication
or by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to present evidence as to what that Japanese procedural law
is and to show that under it, the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of validity and regularity of the
service of summons and the decision thereafter rendered by the Japanese court must stand.

Alternatively in the light of the absence of proof regarding Japanese

law, the presumption of identity or similarity or the so-called processual presumption 10 may be invoked. Applying it, the Japanese law on the matter
is presumed to be similar with the Philippine law on service of summons on a private foreign corporation doing business in the Philippines.

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption but also
because of the presumption of regularity of performance of official duty.

SHARP L COMPANY, INC. to pay to NORTHWEST the amounts adjudged in the foreign judgment subject of said case, with interest thereon at the legal
rate from the filing of the complaint therein until the said foreign judgment is fully satisfied.

G.R. No. 124642 February 23, 2004

ALFREDO CHING vs CA

FACTS: In 1978, the Philippine Blooming Mills Company obtained a loan of ₱9M from Allied Bank. PBMCI, through Exec Vice-Pres Ching, executed a
promissory note for the amount promising to pay in 1978 at interest of 14% per annum. As added security for loan, Ching, together with Tañedo and
Hua, executed a continuing guaranty with the ABC binding themselves to jointly and severally guarantee the payment of all the PBMCI obligations owing
the ABC to the extent of 38M. Loan was renewed on various dates, the last renewal having been made in 1980. December 1979, the ABC extended
another loan to PBMCI for ₱13M payable in eighteen months at 16% interest. PBMCI, through Ching, executed a promissory note to evidence the loan.
This was renewed once for a period of one month. PBMCI defaulted in the payment of all its loans. ABC filed a complaint for sum of money with prayer
for a writ of preliminary attachment against the PBMCI to collect ₱12.6M exclusive of interests, penalties and bank charges. Impleaded as co-defendants
were Ching, et al as sureties of the PBMCI in RTC Manila. ABC averred they falsely represented themselves to be in a financial position to pay their
obligation upon maturity thereof. RTC denied ABC’s application for writ of preliminary attachment. The trial court decreed that the grounds alleged in
the application and that of its supporting affidavit "are all conclusions of fact and of law", however, RTC reconsidered its previous order and granted the
ABC’s application for a writ of preliminary attachment on a bond of ₱12,700,000. PBMCI and Ching jointly filed a petition for suspension of payments
with SEC seeking PBMCI’s rehabilitation. SEC issued an Order placing the PBMCI’s business, including its assets and liabilities, under rehabilitation
receivership, and ordered that "all actions for claims pending before any court or tribunal are suspended in whatever stage the same may be until
further orders from the Commission." PBMCI and Alfredo Ching jointly filed a Motion to Dismiss/ motion to suspend Civil Case, PBMCI’s pending
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application for suspension of payments which the SEC had assumed jurisdiction. Trial court partially granted the motion by suspending the proceedings
with respect to the PBMCI. It denied Ching’s motion to dismiss the complaint/or suspend the proceedings and pointed out that P.D. No. 1758 concerns
the activities of corporations, partnerships and associations and was never intended to regulate and/or control activities of individuals. Thus, it directed
the individual defendants to file their answers.22
ISSUE/S: (a) whether the petitioner-wife has the right to file the motion to quash the levy on attachment on the 100,000 shares of stocks in the Citycorp
Investment Philippines; (b) whether or not the RTC committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the
assailed orders.
HELD: Yes. petitioner-wife had the right to file the said motion, although she was not a party in Civil Case. Upon application of the third person, the
court shall order a summary hearing for the purpose of determining whether the sheriff has acted rightly or wrongly in the performance of his duties
in the execution of the writ of attachment, if he has indeed levied on attachment and taken hold of property not belonging to the plaintiff. If so, the
court may then order the sheriff to release the property from the erroneous levy and to return the same to the third person. In resolving the motion
of the third party, the court does not and cannot pass upon the question of the title to the property with any character of finality. It can treat the matter
only insofar as may be necessary to decide if the sheriff has acted correctly or not. If the claimant’s proof does not persuade the court of the validity of
the title, or right of possession thereto, the claim will be denied by the court. The aggrieved third party may also avail himself of the remedy of "terceria"
by executing an affidavit of his title or right of possession over the property levied on attachment and serving the same to the office making the levy
and the adverse party. Such party may also file an action to nullify the levy with damages resulting from the unlawful levy and seizure, which should be
a totally separate and distinct action from the former case.
In this case, the petitioner-wife filed her motion to set aside the levy on attachment of the 100,000 shares of stocks in the name of petitioner-husband
claiming that the said shares of stocks were conjugal in nature; hence, not liable for the account of her husband under his continuing guaranty and
suretyship agreement with the PBMCI. The petitioner-wife had the right to file the motion for said relief.
CA erred in setting aside and reversing the orders of the RTC. The private respondent, The tribunal acts without jurisdiction if it does not have the legal
purpose to determine the case; there is excess of jurisdiction where the tribunal, being clothed with the power to determine the case, oversteps its
authority as determined by law. There is grave abuse of discretion where the tribunal acts in a capricious, whimsical, arbitrary or despotic manner in
the exercise of its judgment and is equivalent to lack of jurisdiction.
RTC did not commit any grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired during the marriage are presumed to belong to the conjugal partnership,
unless it be proved that it pertains exclusively to the husband, or to the wife.
In this case, the evidence adduced by the petitioners in the RTC is that the 100,000 shares of stocks in the Citycorp Investment Philippines were issued
to and registered in its corporate books in the name of the petitioner-husband when the said corporation was incorporated on May 14, 1979. This was
done during the subsistence of the marriage of the petitioner-spouses. The shares of stocks are, thus, presumed to be the conjugal partnership property
of the petitioners.
This is different from the situation where the husband borrows money or receives services to be used for his own business or profession. In the Ayala
case, we ruled that it is such a contract that is one within the term "obligation for the benefit of the conjugal partnership." Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be used in or for his own business
or his own profession, that contract falls within the term "… obligations for the benefit of the conjugal partnership." Here, no actual benefit may be
proved. It is immaterial, if in the end, his business or profession fails or does not succeed. Simply stated, where the husband contracts obligations on
behalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership.

OBJECT EVIDENCE

G.R. No. L-36638 June 28, 1974

PEOPLE vs SACABIN

FACTS: In 1968, Erlinda Montibon was 15 years old. She finished sixth grade. She was then living in the house of the spouses Patrolman and Mrs.
Constancio Villondo as a helper. She knew the appellant, then single and 22 years old, He was a laborer in Iligan City, then under construction, and
was a usual buyer of native bread and cakes which Erlinda used to sell at the supermarket nearby.

Erlinda testified that around 8pm, she was enticed by Dagondon to go to the supermarket. Teodelita said she was going to buy for her birthday the
following day all of Erlinda's bread and cakes. They went upstairs to one of the rooms of the Laya Building where they would agree on the price of the
bread and cakes. The appellant was then there inside. The door was closed and appellant was able to have sexual intercourse with her two times.
Erlinda was a mere household helper but at the same time engaged in the selling of native bread and cakes. She belonged to the poor and was one of
them, and was still possessed of the traditional and proverbial modesty of the Filipina, especially the provinciana. She would not have filed a
complaint for rape and suffered the torment if not the ignominy of having to testify in a court of justice about the wrong done to her, if in truth she
was not really raped. She was brought to the medico legal officer of Iligan City, Dr. Manuel Simon, who testified that on December 2, 1968, he
examined the offended party, found lacerations in her hymen, in positions 10 and 8 o'clock, which had just recently healed (a laceration heals in 7
days). The lacerations could not have been more than one month old "because at the edge of the lacerations, the color was reddish and therefore
they have healed recently."

Physical evidence is evidence of the highest order. They consist of the green color dress and the panty that Erlinda was wearing at the time she was
raped and which show a torn portion of the left side of the dress and a torn portion of the panty. According to Erlinda, they were torn when
appellant forcibly pulled her dress up and removed her panty shortly before she was raped. Driver Bagohin, corroborated the testimony of the
offended party, Erlinda, that Teodelita Dagondon was the one who fetched Erlinda "because the puto and bread that she is selling will all be bought
by Teodelita for the next day would be her birthday." The testimony of the appellant that he and Erlinda were sweethearts is unworthy of belief.
Erlinda denied vehemently this testimony of the appellant and even stated that he never courted her. And if they were really sweethearts, Erlinda
would not have filed this serious charge of rape against him.

G.R. No. 156132 October 12, 2006

CITIBANK vs SABENIANO
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FACTS: Petitioner Investor's Finance Corp, an affiliate company of petitioner Citibank, handles money market placements for its clients. Sabeniano
was a client of both petitioners Citibank and FNCB Finance. In 1985, respondent filed a Complaint in RTC Makati. Respondent claimed to have
substantial deposits and money market placements with the petitioners, as well as money market placements with the Ayala, the proceeds of which
were supposedly deposited automatically and directly to respondent's accounts with petitioner Citibank. Respondent alleged that petitioners refused
to return her deposits and the proceeds of her money market placements despite her repeated demands compelling respondent to file Civil Case
against petitioners for "Accounting, Sum of Money and Damages." Petitioners admitted that respondent had deposits and money market placements
with them, including dollar accounts in the Citibank branch in Geneva, Switzerland (Citibank-Geneva). Petitioners further alleged that the respondent
later obtained several loans from petitioner Citibank, for which she executed Promissory Notes (PNs), and secured by (a) a Declaration of Pledge of
her dollar accounts in Citibank-Geneva, and (b) Deeds of Assignment of her money market placements with petitioner FNCB Finance. When
respondent failed to pay her loans despite repeated demands by petitioner Citibank, the latter exercised its right to off-set or compensate
respondent's outstanding loans with her deposits and money market placements.

ISSUE: WON petitioners are indeed liable to return the foregoing amounts, together with the appropriate interests and penalties, to respondent.

HELD: History of respondent's money market placements with petitioner Citibank began in 1976, when she made a placement of ₱500,000.00 as
principal amount, which was supposed to earn an interest of 16% p.a. Citibank alleged that it had already paid to respondent the principal amounts
upon their maturity. SC finds that petitioner Citibank failed to satisfactorily prove that PNs had already been paid, and that the amount so paid was
actually used to open one of respondent's TD accounts with petitioner Citibank. Citibank presented the testimonies of two witnesses to support its
contention of payment: (1) That of Mr. Herminio Pujeda,35 the officer-in-charge of loans and placements; and (2) that of Mr. Francisco Tan,36 the
former Assistant Vice-President of Citibank, who directly dealt with respondent with regard to her deposits and loans. There is an evident absence of
any documentary evidence on the payment of these last two PNs and the use of the proceeds thereof by respondent for opening TD accounts. The
paper trail seems to have ended with the copies of PNs. Although both Mr. Pujeda and Mr. Tan said that they based their testimonies, not just on
their memories but also on the documents on file, the supposed documents on which they based those portions of their testimony on the payment
of PNs, were never presented before the courts nor made part of the records of the case. Respondent's money market placements were of substantial
amounts – consisting of the principal amount of ₱500,000.00, plus the interest it should have earned during the years of placement – and it is
difficult for this Court to believe that petitioner Citibank would not have had documented the payment thereof. PNs No. 23356 and 23357 are still
outstanding and petitioner Citibank is still liable to respondent for the amounts stated therein.

ent sent a reply letter63 dated 26 April 1979, printed on paper bearing the letterhead of respondent's company, MC Adore International Palace, the
body of which reads –

This is in reply to your letter dated April 5, 1979 inviting my attention to my loan which has become due. Pursuant to our representation
with you over the telephone through Mr. F. A. Tan, you allow us to pay the interests due for the meantime.

Please accept our Comtrust Check in the amount of ₱62,683.33.

Please bear with us for a little while, at most ninety days. As you know, we have a pending loan with the Development Bank of the
Philippines in the amount of ₱11-M. This loan has already been recommended for approval and would be submitted to the Board of
Governors. In fact, to further facilitate the early release of this loan, we have presented and furnished Gov. J. Tengco a xerox copy of your
letter.

You will be doing our corporation a very viable service, should you grant us our request for a little more time.

A week later or on 3 May 1979, a certain C. N. Pugeda, designated as "Executive Secretary," sent a letter64 to petitioner Citibank, on behalf of
respondent. The letter was again printed on paper bearing the letterhead of MC Adore International Palace. The pertinent paragraphs of the said
letter are reproduced below –

Per instructions of Mrs. Modesta R. Sabeniano, we would like to request for a re-computation of the interest and penalty charges on her
loan in the aggregate amount of ₱1,920,000.00 with maturity date of all promissory notes at June 30, 1979. As she has personally
discussed with you yesterday, this date will more or less assure you of early settlement.

In this regard, please entrust to bearer, our Comtrust check for ₱62,683.33 to be replaced by another check with amount resulting from
the new computation. Also, to facilitate the processing of the same, may we request for another set of promissory notes for the signature
of Mrs. Sabeniano and to cancel the previous ones she has signed and forwarded to you.

This was followed by a telegram,65 dated 5 June 1979, and received by petitioner Citibank the following day. The telegram was sent by a Dewey G.
Soriano, Legal Counsel. The telegram acknowledged receipt of the telegram sent by petitioner Citibank regarding the "re-past due obligation" of
McAdore International Palace. However, it reported that respondent, the President and Chairman of MC Adore International Palace, was presently
abroad negotiating for a big loan. Thus, he was requesting for an extension of the due date of the obligation until respondent's arrival on or before
31 July 1979.

The next letter,66 dated 21 June 1979, was signed by respondent herself and addressed to Mr. Bobby Mendoza, a Manager of petitioner FNCB
Finance. Respondent wrote therein –

Re: PN No. 20138 for ₱500,000.00 & PN No. 20139 for ₱500,000.00 totalling ₱1 Million, both PNs will mature on 9/3/1979.

This is to authorize you to release the accrued quarterly interests payment from my captioned placements and forward directly to Citibank,
Manila Attention: Mr. F. A. Tan, Manager, to apply to my interest payable on my outstanding loan with Citibank.

Please note that the captioned two placements are continuously pledged/hypothecated to Citibank, Manila to support my personal
outstanding loan. Therefore, please do not release the captioned placements upon maturity until you have received the instruction from
Citibank, Manila.

On even date, respondent sent another letter67 to Mr. Tan of petitioner Citibank, stating that –
 7

Re: S/A No. 25-225928

and C/A No. 484-946

This letter serves as an authority to debit whatever the outstanding balance from my captioned accounts and credit the amount to my loan
outstanding account with you.

Unlike respondent's earlier letters, both letters, dated 21 June 1979, are printed on plain paper, without the letterhead of her company, MC Adore
International Palace.

By 5 September 1979, respondent's outstanding and past due obligations to petitioner Citibank totaled ₱2,123,843.20, representing the principal
amounts plus interests. Relying on respondent's Deeds of Assignment, petitioner Citibank applied the proceeds of respondent's money market
placements with petitioner FNCB Finance, as well as her deposit account with petitioner Citibank, to partly Mr. Tan of petitioner Citibank
subsequently sent a letter,69 dated 28 September 1979, notifying respondent of the status of her loans and the foregoing compensation which
petitioner Citibank effected. In the letter, Mr. Tan informed respondent that she still had a remaining past-due obligation in the amount of
₱1,069,847.40, as of 5 September 1979, and should respondent fail to pay the amount by 15 October 1979, then petitioner Citibank shall proceed to
off-set the unpaid amount with respondent's other collateral, particularly, a money market placement in Citibank-Hongkong.

On 5 October 1979, respondent wrote Mr. Tan of petitioner Citibank, on paper bearing the letterhead of MC Adore International Palace, as regards
the ₱1,920,000.00 loan account supposedly of MC Adore Finance & Investment, Inc., and requested for a statement of account covering the principal
and interest of the loan as of 31 October 1979. She stated therein that the loan obligation shall be paid within 60 days from receipt of the statement
of account.

Almost three weeks later, or on 25 October 1979, a certain Atty. Moises Tolentino dropped by the office of petitioner Citibank, with a letter, dated 9
October 1979, and printed on paper with the letterhead of MC Adore International Palace, which authorized the bearer thereof to represent the
respondent in settling the overdue account, this time, purportedly, of MC Adore International Palace Hotel. The letter was signed by respondent as
the President and Chairman of the Board.

Eventually, Atty. Antonio Agcaoili of Agcaoili & Associates, as counsel of petitioner Citibank, sent a letter to respondent, dated 31 October 1979,
informing her that petitioner Citibank had effected an off-set using her account with Citibank-Geneva, in the amount of US$149,632.99, against her
"outstanding, overdue, demandable and unpaid obligation" to petitioner Citibank. Atty. Agcaoili claimed therein that the compensation or off-set was
made pursuant to and in accordance with the provisions of Articles 1278 through 1290 of the Civil Code. He further declared that respondent's
obligation to petitioner Citibank was now fully paid and liquidated.

Unfortunately, on 7 October 1987, a fire gutted the 7th floor of petitioner Citibank's building at Paseo de Roxas St., Makati, Metro Manila. Petitioners
submitted a Certification70 to this effect, dated 17 January 1991, issued by the Chief of the Arson Investigation Section, Fire District III, Makati Fire
Station, Metropolitan Police Force. The 7th floor of petitioner Citibank's building housed its Control Division, which was in charge of keeping the
necessary documents for cases in which it was involved. After compiling the documentary evidence for the present case, Atty. Renato J. Fernandez,
internal legal counsel of petitioner Citibank, forwarded them to the Control Division. The original copies of the MCs, which supposedly represent the
proceeds of the first set of PNs, as well as that of other documentary evidence related to the case, were among those burned in the said fire.71

Respondent's version of events

Respondent disputed petitioners' narration of the circumstances surrounding her loans with petitioner Citibank and the alleged authority she gave
for the off-set or compensation of her money market placements and deposit accounts with petitioners against her loan obligation.

Respondent denied outright executing the first set of PNs, except for one (PN No. 34534 in particular). Although she admitted that she obtained
several loans from petitioner Citibank, these only amounted to ₱1,150,000.00, and she had already paid them. She secured from petitioner Citibank
two loans of ₱500,000.00 each. She executed in favor of petitioner Citibank the corresponding PNs for the loans and the Deeds of Assignment of her
money market placements with petitioner FNCB Finance as security.72 To prove payment of these loans, respondent presented two provisional
receipts of petitioner Citibank – No. 19471,73 dated 11 August 1978, and No. 12723,74 dated 10 November 1978 – both signed by Mr. Tan, and
acknowledging receipt from respondent of several checks in the total amount of ₱500,744.00 and ₱500,000.00, respectively, for "liquidation of
loan."

She borrowed another ₱150,000.00 from petitioner Citibank for personal investment, and for which she executed PN No. 34534, on 9 January 1979.
Thus, she admitted to receiving the proceeds of this loan via MC No. 228270. She invested the loan amount in another money market placement
with petitioner FNCB Finance. In turn, she used the very same money market placement with petitioner FNCB Finance as security for her
₱150,000.00 loan from petitioner Citibank. When she failed to pay the loan when it became due, petitioner Citibank allegedly forfeited her money
market placement with petitioner FNCB Finance and, thus, the loan was already paid.75

Respondent likewise questioned the MCs presented by petitioners, except for one (MC No. 228270 in particular), as proof that she received the
proceeds of the loans covered by the first set of PNs. As recounted in the preceding paragraph, respondent admitted to obtaining a loan of
₱150,000.00, covered by PN No. 34534, and receiving MC No. 228270 representing the proceeds thereof, but claimed that she already paid the
same. She denied ever receiving MCs No. 220701 (for the loan of ₱400,000.00, covered by PN No. 33935) and No. 226467 (for the loan of
₱250,000.00, covered by PN No. 34079), and pointed out that the checks did not bear her indorsements. She did not deny receiving all other checks
but she interposed that she received these checks, not as proceeds of loans, but as payment of the principal amounts and/or interests from her
money market placements with petitioner Citibank. She also raised doubts as to the notation on each of the checks that reads "RE: Proceeds of
PN#[corresponding PN No.]," saying that such notation did not appear on the MCs when she originally received them and that the notation appears
to have been written by a typewriter different from that used in writing all other information on the checks (i.e., date, payee, and amount).76 She
even testified that MCs were not supposed to bear notations indicating the purpose for which they were issued.

As to the second set of PNs, respondent acknowledged having signed them all. However, she asserted that she only executed these PNs as part of
the simulated loans she and Mr. Tan of petitioner Citibank concocted. Respondent explained that she had a pending loan application for a big
amount with the Development Bank of the Philippines (DBP), and when Mr. Tan found out about this, he suggested that they could make it appear
that the respondent had outstanding loans with petitioner Citibank and the latter was already demanding payment thereof; this might persuade DBP
to approve respondent's loan application. Mr. Tan made the respondent sign the second set of PNs, so that he may have something to show the DBP
investigator who might inquire with petitioner Citibank as to respondent's loans with the latter. On her own copies of the said PNs, respondent wrote
 8

by hand the notation, "This isa (sic) simulated non-negotiable note, signed copy given to Mr. Tan., (sic) per agreement to be shown to DBP
representative. itwill (sic) be returned to me if the ₱11=M (sic) loan for MC Adore Palace Hotel is approved by DBP."77

Findings of this Court as to the existence of the loans

After going through the testimonial and documentary evidence presented by both sides to this case, it is this Court's assessment that respondent did
indeed have outstanding loans with petitioner Citibank at the time it effected the off-set or compensation on 25 July 1979 (using respondent's
savings deposit with petitioner Citibank), 5 September 1979 (using the proceeds of respondent's money market placements with petitioner FNCB
Finance) and 26 October 1979 (using respondent's dollar accounts remitted from Citibank-Geneva). The totality of petitioners' evidence as to the
existence of the said loans preponderates over respondent's. Preponderant evidence means that, as a whole, the evidence adduced by one side
outweighs that of the adverse party.78

Respondent's outstanding obligation for ₱1,920,000.00 had been sufficiently documented by petitioner Citibank.

The second set of PNs is a mere renewal of the prior loans originally covered by the first set of PNs, except for PN No. 34534. The first set of PNs is
supported, in turn, by the existence of the MCs that represent the proceeds thereof received by the respondent.

It bears to emphasize that the proceeds of the loans were paid to respondent in MCs, with the respondent specifically named as payee. MCs checks
are drawn by the bank's manager upon the bank itself and regarded to be as good as the money it represents.79 Moreover, the MCs were crossed
checks, with the words "Payee's Account Only."

In general, a crossed check cannot be presented to the drawee bank for payment in cash. Instead, the check can only be deposited with the payee's
bank which, in turn, must present it for payment against the drawee bank in the course of normal banking hours. The crossed check cannot be
presented for payment, but it can only be deposited and the drawee bank may only pay to another bank in the payee's or indorser's account.80 The
effect of crossing a check was described by this Court in Philippine Commercial International Bank v. Court of Appeals81 –

[T]he crossing of a check with the phrase "Payee's Account Only" is a warning that the check should be deposited in the account of the
payee. Thus, it is the duty of the collecting bank PCI Bank to ascertain that the check be deposited in payee's account only. It is bound to
scrutinize the check and to know its depositors before it can make the clearing indorsement "all prior indorsements and/or lack of
indorsement guaranteed."

The crossed MCs presented by petitioner Bank were indeed deposited in several different bank accounts and cleared by the Clearing Office of the
Central Bank of the Philippines, as evidenced by the stamp marks and notations on the said checks. The crossed MCs are already in the possession of
petitioner Citibank, the drawee bank, which was ultimately responsible for the payment of the amount stated in the checks. Given that a check is
more than just an instrument of credit used in commercial transactions for it also serves as a receipt or evidence for the drawee bank of the
cancellation of the said check due to payment,82 then, the possession by petitioner Citibank of the said MCs, duly stamped "Paid" gives rise to the
presumption that the said MCs were already paid out to the intended payee, who was in this case, the respondent.

This Court finds applicable herein the presumptions that private transactions have been fair and regular,83 and that the ordinary course of business
has been followed.84 There is no question that the loan transaction between petitioner Citibank and the respondent is a private transaction. The
transactions revolving around the crossed MCs – from their issuance by petitioner Citibank to respondent as payment of the proceeds of her loans;
to its deposit in respondent's accounts with several different banks; to the clearing of the MCs by an independent clearing house; and finally, to the
payment of the MCs by petitioner Citibank as the drawee bank of the said checks – are all private transactions which shall be presumed to have been
fair and regular to all the parties concerned. In addition, the banks involved in the foregoing transactions are also presumed to have followed the
ordinary course of business in the acceptance of the crossed MCs for deposit in respondent's accounts, submitting them for clearing, and their
eventual payment and cancellation.

The afore-stated presumptions are disputable, meaning, they are satisfactory if uncontradicted, but may be contradicted and overcome by other
evidence.85 Respondent, however, was unable to present sufficient and credible evidence to dispute these presumptions.

It should be recalled that out of the nine MCs presented by petitioner Citibank, respondent admitted to receiving one as proceeds of a loan (MC No.
228270), denied receiving two (MCs No. 220701 and 226467), and admitted to receiving all the rest, but not as proceeds of her loans, but as return
on the principal amounts and interests from her money market placements.

Respondent admitted receiving MC No. 228270 representing the proceeds of her loan covered by PN No. 34534. Although the principal amount of
the loan is ₱150,000.00, respondent only received ₱146,312.50, because the interest and handling fee on the loan transaction were already
deducted therefrom.86 Stamps and notations at the back of MC No. 228270 reveal that it was deposited at the Bank of the Philippine Islands (BPI),
Cubao Branch, in Account No. 0123-0572-28.87 The check also bore the signature of respondent at the back.88 And, although respondent would later
admit that she did sign PN No. 34534 and received MC No. 228270 as proceeds of the loan extended to her by petitioner Citibank, she contradicted
herself when, in an earlier testimony, she claimed that PN No. 34534 was among the PNs she executed as simulated loans with petitioner Citibank.89

Respondent denied ever receiving MCs No. 220701 and 226467. However, considering that the said checks were crossed for payee's account only,
and that they were actually deposited, cleared, and paid, then the presumption would be that the said checks were properly deposited to the
account of respondent, who was clearly named the payee in the checks. Respondent's bare allegations that she did not receive the two checks fail to
convince this Court, for to sustain her, would be for this Court to conclude that an irregularity had occurred somewhere from the time of the
issuance of the said checks, to their deposit, clearance, and payment, and which would have involved not only petitioner Citibank, but also BPI, which
accepted the checks for deposit, and the Central Bank of the Philippines, which cleared the checks. It falls upon the respondent to overcome or
dispute the presumption that the crossed checks were issued, accepted for deposit, cleared, and paid for by the banks involved following the
ordinary course of their business.

The mere fact that MCs No. 220701 and 226467 do not bear respondent's signature at the back does not negate deposit thereof in her account. The
liability for the lack of indorsement on the MCs no longer fall on petitioner Citibank, but on the bank who received the same for deposit, in this case,
BPI Cubao Branch. Once again, it must be noted that the MCs were crossed, for payee's account only, and the payee named in both checks was none
other than respondent. The crossing of the MCs was already a warning to BPI to receive said checks for deposit only in respondent's account. It was
 9

up to BPI to verify whether it was receiving the crossed MCs in accordance with the instructions on the face thereof. If, indeed, the MCs were
deposited in accounts other than respondent's, then the respondent would have a cause of action against BPI.90

BPI further stamped its guarantee on the back of the checks to the effect that, "All prior endorsement and/or Lack of endorsement guaranteed."
Thus, BPI became the indorser of the MCs, and assumed all the warranties of an indorser,91 specifically, that the checks were genuine and in all
respects what they purported to be; that it had a good title to the checks; that all prior parties had capacity to contract; and that the checks were, at
the time of their indorsement, valid and subsisting.92 So even if the MCs deposited by BPI's client, whether it be by respondent herself or some other
person, lacked the necessary indorsement, BPI, as the collecting bank, is bound by its warranties as an indorser and cannot set up the defense of lack
of indorsement as against petitioner Citibank, the drawee bank.93

Furthermore, respondent's bare and unsubstantiated denial of receipt of the MCs in question and their deposit in her account is rendered suspect
when MC No. 220701 was actually deposited in Account No. 0123-0572-28 of BPI Cubao Branch, the very same account in which MC No. 228270
(which respondent admitted to receiving as proceeds of her loan from petitioner Citibank), and MCs No. 228203, 228357, and 228400 (which
respondent admitted to receiving as proceeds from her money market placements) were deposited. Likewise, MC No. 226467 was deposited in
Account No. 0121-002-43 of BPI Cubao Branch, to which MCs No. 226285 and 226439 (which respondent admitted to receiving as proceeds from her
money market placements) were deposited. It is an apparent contradiction for respondent to claim having received the proceeds of checks
deposited in an account, and then deny receiving the proceeds of another check deposited in the very same account.

Another inconsistency in respondent's denial of receipt of MC No. 226467 and her deposit of the same in her account, is her presentation of Exhibit
"HHH," a provisional receipt which was supposed to prove that respondent turned over ₱500,000.00 to Mr. Tan of petitioner Citibank, that the said
amount was split into three money market placements, and that MC No. 226467 represented the return on her investment from one of these
placements.94Because of her Exhibit "HHH," respondent effectively admitted receipt of MC No. 226467, although for reasons other than as proceeds
of a loan.

Neither can this Court give credence to respondent's contention that the notations on the MCs, stating that they were the proceeds of particular
PNs, were not there when she received the checks and that the notations appeared to be written by a typewriter different from that used to write
the other information on the checks. Once more, respondent's allegations were uncorroborated by any other evidence. Her and her counsel's
observation that the notations on the MCs appear to be written by a typewriter different from that used to write the other information on the
checks hardly convinces this Court considering that it constitutes a mere opinion on the appearance of the notation by a witness who does not
possess the necessary expertise on the matter. In addition, the notations on the MCs were written using both capital and small letters, while the
other information on the checks were written using capital letters only, such difference could easily confuse an untrained eye and lead to a hasty
conclusion that they were written by different typewriters.

Respondent's testimony, that based on her experience transacting with banks, the MCs were not supposed to include notations on the purpose for
which the checks were issued, also deserves scant consideration. While respondent may have extensive experience dealing with banks, it still does
not qualify her as a competent witness on banking procedures and practices. Her testimony on this matter is even belied by the fact that the other
MCs issued by petitioner Citibank (when it was still named First National City Bank) and by petitioner FNCB Finance, the existence and validity of
which were not disputed by respondent, also bear similar notations that state the reason for which they were issued.

Respondent presented several more pieces of evidence to substantiate her claim that she received MCs No. 226285, 226439, 226467, 226057,
228357, and 228400, not as proceeds of her loans from petitioner Citibank, but as the return of the principal amounts and payment of interests from
her money market placements with petitioners. Part of respondent's exhibits were personal checks95 drawn by respondent on her account with Feati
Bank & Trust Co., which she allegedly invested in separate money market placements with both petitioners, the returns from which were paid to her
via MCs No. 226285 and 228400. Yet, to this Court, the personal checks only managed to establish respondent's issuance thereof, but there was
nothing on the face of the checks that would reveal the purpose for which they were issued and that they were actually invested in money market
placements as respondent claimed.

Respondent further submitted handwritten notes that purportedly computed and presented the returns on her money market placements,
corresponding to the amount stated in the MCs she received from petitioner Citibank. Exhibit "HHH-1"96 was a handwritten note, which respondent
attributed to Mr. Tan of petitioner Citibank, showing the breakdown of her BPI Check for ₱500,000.00 into three different money market placements
with petitioner Citibank. This Court, however, noticed several factors which render the note highly suspect. One, it was written on the reversed side
of Provisional Receipt No. 12724 of petitioner Citibank which bore the initials of Mr. Tan acknowledging receipt of respondent's BPI Check No.
120989 for ₱500,000.00; but the initials on the handwritten note appeared to be that of Mr. Bobby Mendoza of petitioner FNCB Finance.97 Second,
according to Provisional Receipt No. 12724, BPI Check No. 120989 for ₱500,000.00 was supposed to be invested in three money market placements
with petitioner Citibank for the period of 60 days. Since all these money market placements were made through one check deposited on the same
day, 10 November 1978, it made no sense that the handwritten note at the back of Provisional Receipt No. 12724 provided for different dates of
maturity for each of the money market placements (i.e., 16 November 1978, 17 January 1979, and 21 November 1978), and such dates did not
correspond to the 60 day placement period stated on the face of the provisional receipt. And third, the principal amounts of the money market
placements as stated in the handwritten note – ₱145,000.00, ₱145,000.00 and ₱242,000.00 – totaled ₱532,000.00, and was obviously in excess of
the ₱500,000.00 acknowledged on the face of Provisional Receipt No. 12724.

Exhibits "III" and "III-1," the front and bank pages of a handwritten note of Mr. Bobby Mendoza of petitioner FNCB Finance,98 also did not deserve
much evidentiary weight, and this Court cannot rely on the truth and accuracy of the computations presented therein. Mr. Mendoza was not
presented as a witness during the trial before the RTC, so that the document was not properly authenticated nor its contents sufficiently explained.
No one was able to competently identify whether the initials as appearing on the note were actually Mr. Mendoza's.

Also, going by the information on the front page of the note, this Court observes that payment of respondent's alleged money market placements
with petitioner FNCB Finance were made using Citytrust Checks; the MCs in question, including MC No. 228057, were issued by petitioner Citibank.
Although Citytrust (formerly Feati Bank & Trust Co.), petitioner FNCB Finance, and petitioner Citibank may be affiliates of one another, they each
remained separate and distinct corporations, each having its own financial system and records. Thus, this Court cannot simply assume that one
corporation, such as petitioner Citibank or Citytrust, can issue a check to discharge an obligation of petitioner FNCB Finance. It should be recalled
that when petitioner FNCB Finance paid for respondent's money market placements, covered by its PNs No. 8167 and 8169, as well as PNs No. 20138
and 20139, petitioner FNCB Finance issued its own checks.

As a last point on this matter, if respondent truly had money market placements with petitioners, then these would have been evidenced by PNs
issued by either petitioner Citibank or petitioner FNCB Finance, acknowledging the principal amounts of the investments, and stating the applicable
 10

interest rates, as well as the dates of their of issuance and maturity. After respondent had so meticulously reconstructed her other money market
placements with petitioners and consolidated the documentary evidence thereon, she came surprisingly short of offering similar details and
substantiation for these particular money market placements.

Since this Court is satisfied that respondent indeed received the proceeds of the first set of PNs, then it proceeds to analyze her evidence of payment
thereof.

In support of respondent's assertion that she had already paid whatever loans she may have had with petitioner Citibank, she presented as evidence
Provisional Receipts No. 19471, dated 11 August 1978, and No. 12723, dated 10 November 1978, both of petitioner Citibank and signed by Mr. Tan,
for the amounts of ₱500,744.00 and ₱500,000.00, respectively. While these provisional receipts did state that Mr. Tan, on behalf of petitioner
Citibank, received respondent's checks as payment for her loans, they failed to specifically identify which loans were actually paid. Petitioner Citibank
was able to present evidence that respondent had executed several PNs in the years 1978 and 1979 to cover the loans she secured from the said
bank. Petitioner Citibank did admit that respondent was able to pay for some of these PNs, and what it identified as the first and second sets of PNs
were only those which remained unpaid. It thus became incumbent upon respondent to prove that the checks received by Mr. Tan were actually
applied to the PNs in either the first or second set; a fact that, unfortunately, cannot be determined from the provisional receipts submitted by
respondent since they only generally stated that the checks received by Mr. Tan were payment for respondent's loans.

Mr. Tan, in his deposition, further explained that provisional receipts were issued when payment to the bank was made using checks, since the
checks would still be subject to clearing. The purpose for the provisional receipts was merely to acknowledge the delivery of the checks to the
possession of the bank, but not yet of payment.99 This bank practice finds legitimacy in the pronouncement of this Court that a check, whether an
MC or an ordinary check, is not legal tender and, therefore, cannot constitute valid tender of payment. In Philippine Airlines, Inc. v. Court of
Appeals, 100 this Court elucidated that:

Since a negotiable instrument is only a substitute for money and not money, the delivery of such an instrument does not, by itself, operate
as payment (Sec. 189, Act 2031 on Negs. Insts.; Art. 1249, Civil Code; Bryan Landon Co. v. American Bank, 7 Phil. 255; Tan Sunco, v. Santos,
9 Phil. 44; 21 R.C.L. 60, 61). A check, whether a manager's check or ordinary check, is not legal tender, and an offer of a check in payment
of a debt is not a valid tender of payment and may be refused receipt by the obligee or creditor. Mere delivery of checks does not
discharge the obligation under a judgment. The obligation is not extinguished and remains suspended until the payment by commercial
document is actually realized (Art. 1249, Civil Code, par. 3).

In the case at bar, the issuance of an official receipt by petitioner Citibank would have been dependent on whether the checks delivered by
respondent were actually cleared and paid for by the drawee banks.

As for PN No. 34534, respondent asserted payment thereof at two separate instances by two different means. In her formal offer of exhibits,
respondent submitted a deposit slip of petitioner Citibank, dated 11 August 1978, evidencing the deposit of BPI Check No. 5785 for
₱150,000.00.101 In her Formal Offer of Documentary Exhibits, dated 7 July 1989, respondent stated that the purpose for the presentation of the said
deposit slip was to prove that she already paid her loan covered by PN No. 34534.102 In her testimony before the RTC three years later, on 28
November 1991, she changed her story. This time she narrated that the loan covered by PN No. 34534 was secured by her money market placement
with petitioner FNCB Finance, and when she failed to pay the said PN when it became due, the security was applied to the loan, therefore, the loan
was considered paid.103 Given the foregoing, respondent's assertion of payment of PN No. 34534 is extremely dubious.

According to petitioner Citibank, the PNs in the second set, except for PN No. 34534, were mere renewals of the unpaid PNs in the first set, which
was why the PNs stated that they were for the purpose of liquidating existing obligations. PN No. 34534, however, which was part of the first set, was
still valid and subsisting and so it was included in the second set without need for its renewal, and it still being the original PN for that particular loan,
its stated purpose was for personal investment.104 Respondent essentially admitted executing the second set of PNs, but they were only meant to
cover simulated loans. Mr. Tan supposedly convinced her that her pending loan application with DBP would have a greater chance of being approved
if they made it appear that respondent urgently needed the money because petitioner Citibank was already demanding payment for her simulated
loans.

Respondent's defense of simulated loans to escape liability for the second set of PNs is truly a novel one.1âwphi1 It is regrettable, however, that she
was unable to substantiate the same. Yet again, respondent's version of events is totally based on her own uncorroborated testimony. The notations
on the second set of PNs, that they were non-negotiable simulated notes, were admittedly made by respondent herself and were, thus, self-serving.
Equally self-serving was respondent's letter, written on 7 October 1985, or more than six years after the execution of the second set of PNs, in which
she demanded return of the simulated or fictitious PNs, together with the letters relating thereto, which Mr. Tan purportedly asked her to execute.
Respondent further failed to present any proof of her alleged loan application with the DBP, and of any circumstance or correspondence wherein the
simulated or fictitious PNs were indeed used for their supposed purpose.

In contrast, petitioner Citibank, as supported by the testimonies of its officers and available documentation, consistently treated the said PNs as
regular loans – accepted, approved, and paid in the ordinary course of its business.

The PNs executed by the respondent in favor of petitioner Citibank to cover her loans were duly-filled out and signed, including the disclosure
statement found at the back of the said PNs, in adherence to the Central Bank requirement to disclose the full finance charges to a loan granted to
borrowers.

Mr. Tan, then an account officer with the Marketing Department of petitioner Citibank, testified that he dealt directly with respondent; he facilitated
the loans; and the PNs, at least in the second set, were signed by respondent in his presence.105

Mr. Pujeda, the officer who was previously in charge of loans and placements, confirmed that the signatures on the PNs were verified against
respondent's specimen signature with the bank.106

Ms. Cristina Dondoyano, who worked at petitioner Citibank as a loan processor, was responsible for booking respondent's loans. Booking the loans
means recording it in the General Ledger. She explained the procedure for booking loans, as follows: The account officer, in the Marketing
Department, deals directly with the clients who wish to borrow money from petitioner Citibank. The Marketing Department will forward a loan
booking checklist, together with the borrowing client's PNs and other supporting documents, to the loan pre-processor, who will check whether the
details in the loan booking checklist are the same as those in the PNs. The documents are then sent to Signature Control for verification of the client's
signature in the PNs, after which, they are returned to the loan pre-processor, to be forwarded finally to the loan processor. The loan processor shall
 11

book the loan in the General Ledger, indicating therein the client name, loan amount, interest rate, maturity date, and the corresponding PN
number. Since she booked respondent's loans personally, Ms. Dondoyano testified that she saw the original PNs. In 1986, Atty. Fernandez of
petitioner Citibank requested her to prepare an accounting of respondent's loans, which she did, and which was presented as Exhibit "120" for the
petitioners. The figures from the said exhibit were culled from the bookings in the General Ledger, a fact which respondent's counsel was even
willing to stipulate.107

Ms. Teresita Glorioso was an Investigation and Reconcilement Clerk at the Control Department of petitioner Citibank. She was presented by
petitioner Citibank to expound on the microfilming procedure at the bank, since most of the copies of the PNs were retrieved from microfilm.
Microfilming of the documents are actually done by people at the Operations Department. At the end of the day or during the day, the original
copies of all bank documents, not just those pertaining to loans, are microfilmed. She refuted the possibility that insertions could be made in the
microfilm because the microfilm is inserted in a cassette; the cassette is placed in the microfilm machine for use; at the end of the day, the cassette
is taken out of the microfilm machine and put in a safe vault; and the cassette is returned to the machine only the following day for use, until the
spool is full. This is the microfilming procedure followed everyday. When the microfilm spool is already full, the microfilm is developed, then sent to
the Control Department, which double checks the contents of the microfilms against the entries in the General Ledger. The Control Department also
conducts a random comparison of the contents of the microfilms with the original documents; a random review of the contents is done on every role
of microfilm.108

Ms. Renee Rubio worked for petitioner Citibank for 20 years. She rose from the ranks, initially working as a secretary in the Personnel Group; then as
a secretary to the Personnel Group Head; a Service Assistant with the Marketing Group, in 1972 to 1974, dealing directly with corporate and
individual clients who, among other things, secured loans from petitioner Citibank; the Head of the Collection Group of the Foreign Department in
1974 to 1976; the Head of the Money Transfer Unit in 1976 to 1978; the Head of the Loans and Placements Unit up to the early 1980s; and,
thereafter, she established operations training for petitioner Citibank in the Asia-Pacific Region responsible for the training of the officers of the
bank. She testified on the standard loan application process at petitioner Citibank. According to Ms. Rubio, the account officer or marketing person
submits a proposal to grant a loan to an individual or corporation. Petitioner Citibank has a worldwide policy that requires a credit committee,
composed of a minimum of three people, which would approve the loan and amount thereof. There can be no instance when only one officer has
the power to approve the loan application. When the loan is approved, the account officer in charge will obtain the corresponding PNs from the
client. The PNs are sent to the signature verifier who would validate the signatures therein against those appearing in the signature cards previously
submitted by the client to the bank. The Operations Unit will check and review the documents, including the PNs, if it is a clean loan, and securities
and deposits, if it is collateralized. The loan is then recorded in the General Ledger. The Loans and Placements Department will not book the loans
without the PNs. When the PNs are liquidated, whether they are paid or rolled-over, they are returned to the client.109 Ms. Rubio further explained
that she was familiar with respondent's accounts since, while she was still the Head of the Loan and Placements Unit, she was asked by Mr. Tan to
prepare a list of respondent's outstanding obligations.110 She thus calculated respondent's outstanding loans, which was sent as an attachment to
Mr. Tan's letter to respondent, dated 28 September 1979, and presented before the RTC as Exhibits "34-B" and "34-C."111

Lastly, the exchange of letters between petitioner Citibank and respondent, as well as the letters sent by other people working for respondent, had
consistently recognized that respondent owed petitioner Citibank money.

In consideration of the foregoing discussion, this Court finds that the preponderance of evidence supports the existence of the respondent's loans, in
the principal sum of ₱1,920,000.00, as of 5 September 1979. While it is well-settled that the term "preponderance of evidence" should not be wholly
dependent on the number of witnesses, there are certain instances when the number of witnesses become the determining factor –

The preponderance of evidence may be determined, under certain conditions, by the number of witnesses testifying to a particular fact or
state of facts. For instance, one or two witnesses may testify to a given state of facts, and six or seven witnesses of equal candor, fairness,
intelligence, and truthfulness, and equally well corroborated by all the remaining evidence, who have no greater interest in the result of
the suit, testify against such state of facts. Then the preponderance of evidence is determined by the number of witnesses. (Wilcox vs.
Hines, 100 Tenn. 524, 66 Am. St. Rep., 761.)112

Best evidence rule

This Court disagrees in the pronouncement made by the Court of Appeals summarily dismissing the documentary evidence submitted by petitioners
based on its broad and indiscriminate application of the best evidence rule.

In general, the best evidence rule requires that the highest available degree of proof must be produced. Accordingly, for documentary evidence, the
contents of a document are best proved by the production of the document itself,113to the exclusion of any secondary or substitutionary evidence.114

The best evidence rule has been made part of the revised Rules of Court, Rule 130, Section 3, which reads –

SEC. 3. Original document must be produced; exceptions. – When the subject of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself, except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails
to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss
of time and the fact sought to be established from them is only the general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public office.

As the afore-quoted provision states, the best evidence rule applies only when the subject of the inquiry is the contents of the document. The scope
of the rule is more extensively explained thus –

But even with respect to documentary evidence, the best evidence rule applies only when the content of such document is the subject of
the inquiry. Where the issue is only as to whether such document was actually executed, or exists, or on the circumstances relevant to or
 12

surrounding its execution, the best evidence rule does not apply and testimonial evidence is admissible (5 Moran, op. cit., pp. 76-66; 4
Martin, op. cit., p. 78). Any other substitutionary evidence is likewise admissible without need for accounting for the original.

Thus, when a document is presented to prove its existence or condition it is offered not as documentary, but as real, evidence. Parol
evidence of the fact of execution of the documents is allowed (Hernaez, et al. vs. McGrath, etc., et al., 91 Phil 565). x x x 115

In Estrada v. Desierto,116 this Court had occasion to rule that –

It is true that the Court relied not upon the original but only copy of the Angara Diary as published in the Philippine Daily Inquirer on
February 4-6, 2001. In doing so, the Court, did not, however, violate the best evidence rule. Wigmore, in his book on evidence, states that:

"Production of the original may be dispensed with, in the trial court's discretion, whenever in the case in hand the opponent does not bona
fide dispute the contents of the document and no other useful purpose will be served by requiring production.24

"x x x x

"In several Canadian provinces, the principle of unavailability has been abandoned, for certain documents in which ordinarily no real
dispute arised. This measure is a sensible and progressive one and deserves universal adoption (post, sec. 1233). Its essential feature is that
a copy may be used unconditionally, if the opponent has been given an opportunity to inspect it." (Emphasis supplied.)

This Court did not violate the best evidence rule when it considered and weighed in evidence the photocopies and microfilm copies of the PNs, MCs,
and letters submitted by the petitioners to establish the existence of respondent's loans. The terms or contents of these documents were never the
point of contention in the Petition at bar. It was respondent's position that the PNs in the first set (with the exception of PN No. 34534) never existed,
while the PNs in the second set (again, excluding PN No. 34534) were merely executed to cover simulated loan transactions. As for the MCs
representing the proceeds of the loans, the respondent either denied receipt of certain MCs or admitted receipt of the other MCs but for another
purpose. Respondent further admitted the letters she wrote personally or through her representatives to Mr. Tan of petitioner Citibank
acknowledging the loans, except that she claimed that these letters were just meant to keep up the ruse of the simulated loans. Thus, respondent
questioned the documents as to their existence or execution, or when the former is admitted, as to the purpose for which the documents were
executed, matters which are, undoubtedly, external to the documents, and which had nothing to do with the contents thereof.

Alternatively, even if it is granted that the best evidence rule should apply to the evidence presented by petitioners regarding the existence of
respondent's loans, it should be borne in mind that the rule admits of the following exceptions under Rule 130, Section 5 of the revised Rules of
Court –

SEC. 5. When the original document is unavailable. – When the original document has been lost or destroyed, or cannot be produced in
court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its
contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.

The execution or existence of the original copies of the documents was established through the testimonies of witnesses, such as Mr. Tan, before
whom most of the documents were personally executed by respondent. The original PNs also went through the whole loan booking system of
petitioner Citibank – from the account officer in its Marketing Department, to the pre-processor, to the signature verifier, back to the pre-processor,
then to the processor for booking.117 The original PNs were seen by Ms. Dondoyano, the processor, who recorded them in the General Ledger. Mr.
Pujeda personally saw the original MCs, proving respondent's receipt of the proceeds of her loans from petitioner Citibank, when he helped Attys.
Cleofe and Fernandez, the bank's legal counsels, to reconstruct the records of respondent's loans. The original MCs were presented to Atty. Cleofe
who used the same during the preliminary investigation of the case, sometime in years 1986-1987. The original MCs were subsequently turned over
to the Control and Investigation Division of petitioner Citibank.118

It was only petitioner FNCB Finance who claimed that they lost the original copies of the PNs when it moved to a new office. Citibank did not make a
similar contention; instead, it explained that the original copies of the PNs were returned to the borrower upon liquidation of the loan, either
through payment or roll-over. Petitioner Citibank proffered the excuse that they were still looking for the documents in their storage or warehouse
to explain the delay and difficulty in the retrieval thereof, but not their absence or loss. The original documents in this case, such as the MCs and
letters, were destroyed and, thus, unavailable for presentation before the RTC only on 7 October 1987, when a fire broke out on the 7th floor of the
office building of petitioner Citibank. There is no showing that the fire was intentionally set. The fire destroyed relevant documents, not just of the
present case, but also of other cases, since the 7th floor housed the Control and Investigation Division, in charge of keeping the necessary documents
for cases in which petitioner Citibank was involved.

The foregoing would have been sufficient to allow the presentation of photocopies or microfilm copies of the PNs, MCs, and letters by the petitioners
as secondary evidence to establish the existence of respondent's loans, as an exception to the best evidence rule.

The impact of the Decision of the Court of Appeals in the Dy case

In its assailed Decision, the Court of Appeals made the following pronouncement –

Besides, We find the declaration and conclusions of this Court in CA-G.R. CV No. 15934 entitled Sps. Dr. Ricardo L. Dy and Rosalind O. Dy vs.
City Bank, N.A., et al, promulgated on 15 January 1990, as disturbingtaking into consideration the similarities of the fraud, machinations,
and deceits employed by the defendant-appellant Citibank and its Account Manager Francisco Tan.

Worthy of note is the fact that Our declarations and conclusions against Citibank and the person of Francisco Tan in CA-G.R. CV No.
15934 were affirmed in toto by the Highest Magistrate in a Minute Resolution dated 22 August 1990 entitled Citibank, N.A., vs. Court of
Appeals, G.R. 93350.

As the factual milieu of the present appeal created reasonable doubts as to whether the nine (9) Promissory Notes were indeed executed
with considerations, the doubts, coupled by the findings and conclusions of this Court in CA-G.R. CV No. 15934 and the Supreme Court
in G.R. No. 93350. should be construed against herein defendants-appellants Citibank and FNCB Finance.
 13

What this Court truly finds disturbing is the significance given by the Court of Appeals in its assailed Decision to the Decision119 of its Third Division in
CA-G.R. CV No. 15934 (or the Dy case), when there is an absolute lack of legal basis for doing such.

Although petitioner Citibank and its officer, Mr. Tan, were also involved in the Dy case, that is about the only connection between the Dy case and
the one at bar. Not only did the Dy case tackle transactions between parties other than the parties presently before this Court, but the transactions
are absolutely independent and unrelated to those in the instant Petition.

In the Dy case, Severino Chua Caedo managed to obtain loans from herein petitioner Citibank amounting to ₱7,000,000.00, secured to the extent of
₱5,000,000.00 by a Third Party Real Estate Mortgage of the properties of Caedo's aunt, Rosalind Dy. It turned out that Rosalind Dy and her husband
were unaware of the said loans and the mortgage of their properties. The transactions were carried out exclusively between Caedo and Mr. Tan of
petitioner Citibank. The RTC found Mr. Tan guilty of fraud for his participation in the questionable transactions, essentially because he allowed Caedo
to take out the signature cards, when these should have been signed by the Dy spouses personally before him. Although the Dy spouses' signatures
in the PNs and Third Party Real Estate Mortgage were forged, they were approved by the signature verifier since the signature cards against which
they were compared to were also forged. Neither the RTC nor the Court of Appeals, however, categorically declared Mr. Tan personally responsible
for the forgeries, which, in the narration of the facts, were more likely committed by Caedo.

In the Petition at bar, respondent dealt with Mr. Tan directly, there was no third party involved who could have perpetrated any fraud or forgery in
her loan transactions. Although respondent attempted to raise suspicion as to the authenticity of her signatures on certain documents, these were
nothing more than naked allegations with no corroborating evidence; worse, even her own allegations were replete with inconsistencies. She could
not even establish in what manner or under what circumstances the fraud or forgery was committed, or how Mr. Tan could have been directly
responsible for the same.

While the Court of Appeals can take judicial notice of the Decision of its Third Division in the Dy case, it should not have given the said case much
weight when it rendered the assailed Decision, since the former does not constitute a precedent. The Court of Appeals, in the challenged Decision,
did not apply any legal argument or principle established in the Dy case but, rather, adopted the findings therein of wrongdoing or misconduct on the
part of herein petitioner Citibank and Mr. Tan. Any finding of wrongdoing or misconduct as against herein petitioners should be made based on the
factual background and pieces of evidence submitted in this case, not those in another case.

It is apparent that the Court of Appeals took judicial notice of the Dy case not as a legal precedent for the present case, but rather as evidence of
similar acts committed by petitioner Citibank and Mr. Tan. A basic rule of evidence,however, states that, "Evidence that one did or did not do a
certain thing at one time is not admissible to prove that he did or did not do the same or similar thing at another time; but it may be received to
prove a specific intent or knowledge, identity, plan, system, scheme, habit, custom or usage, and the like."120 The rationale for the rule is explained
thus –

The rule is founded upon reason, public policy, justice and judicial convenience. The fact that a person has committed the same or similar
acts at some prior time affords, as a general rule, no logical guaranty that he committed the act in question. This is so because,
subjectively, a man's mind and even his modes of life may change; and, objectively, the conditions under which he may find himself at a
given time may likewise change and thus induce him to act in a different way. Besides, if evidence of similar acts are to be invariably
admitted, they will give rise to a multiplicity of collateral issues and will subject the defendant to surprise as well as confuse the court and
prolong the trial.121

The factual backgrounds of the two cases are so different and unrelated that the Dy case cannot be used to prove specific intent, knowledge,
identity, plan, system, scheme, habit, custom or usage on the part of petitioner Citibank or its officer, Mr. Tan, to defraud respondent in the present
case.

IV

The liquidation of respondent's outstanding loans were valid in so far as petitioner Citibank used respondent's savings account with the bank and her
money market placements with petitioner FNCB Finance; but illegal and void in so far as petitioner Citibank used respondent's dollar accounts with
Citibank-Geneva.

Savings Account with petitioner Citibank

Compensation is a recognized mode of extinguishing obligations. Relevant provisions of the Civil Code provides –

Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other.

Art. 1279. In order that compensation may be proper, it is necessary;

(1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter
has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.

There is little controversy when it comes to the right of petitioner Citibank to compensate respondent's outstanding loans with her deposit account.
As already found by this Court, petitioner Citibank was the creditor of respondent for her outstanding loans. At the same time, respondent was the
creditor of petitioner Citibank, as far as her deposit account was concerned, since bank deposits, whether fixed, savings, or current, should be
considered as simple loan or mutuum by the depositor to the banking institution.122 Both debts consist in sums of money. By June 1979, all of
respondent's PNs in the second set had matured and became demandable, while respondent's savings account was demandable anytime. Neither
was there any retention or controversy over the PNs and the deposit account commenced by a third person and communicated in due time to the
debtor concerned. Compensation takes place by operation of law,123 therefore, even in the absence of an expressed authority from respondent,
petitioner Citibank had the right to effect, on 25 June 1979, the partial compensation or off-set of respondent's outstanding loans with her deposit
account, amounting to ₱31,079.14.
 14

Money market placements with FNCB Finance

Things though are not as simple and as straightforward as regards to the money market placements and bank account used by petitioner Citibank to
complete the compensation or off-set of respondent's outstanding loans, which came from persons other than petitioner Citibank.

Respondent's money market placements were with petitioner FNCB Finance, and after several roll-overs, they were ultimately covered by PNs No.
20138 and 20139, which, by 3 September 1979, the date the check for the proceeds of the said PNs were issued, amounted to ₱1,022,916.66,
inclusive of the principal amounts and interests. As to these money market placements, respondent was the creditor and petitioner FNCB Finance
the debtor; while, as to the outstanding loans, petitioner Citibank was the creditor and respondent the debtor. Consequently, legal compensation,
under Article 1278 of the Civil Code, would not apply since the first requirement for a valid compensation, that each one of the obligors be bound
principally, and that he be at the same time a principal creditor of the other, was not met.

What petitioner Citibank actually did was to exercise its rights to the proceeds of respondent's money market placements with petitioner FNCB
Finance by virtue of the Deeds of Assignment executed by respondent in its favor.

The Court of Appeals did not consider these Deeds of Assignment because of petitioners' failure to produce the original copies thereof in violation of
the best evidence rule. This Court again finds itself in disagreement in the application of the best evidence rule by the appellate court.

To recall, the best evidence rule, in so far as documentary evidence is concerned, requires the presentation of the original copy of the document only
when the context thereof is the subject of inquiry in the case. Respondent does not question the contents of the Deeds of Assignment. While she
admitted the existence and execution of the Deeds of Assignment, dated 2 March 1978 and 9 March 1978, covering PNs No. 8169 and 8167 issued
by petitioner FNCB Finance, she claimed, as defense, that the loans for which the said Deeds were executed as security, were already paid. She
denied ever executing both Deeds of Assignment, dated 25 August 1978, covering PNs No. 20138 and 20139. These are again issues collateral to the
contents of the documents involved, which could be proven by evidence other than the original copies of the said documents.

Moreover, the Deeds of Assignment of the money market placements with petitioner FNCB Finance were notarized documents, thus, admissible in
evidence. Rule 132, Section 30 of the Rules of Court provides that –

SEC. 30. Proof of notarial documents. – Every instrument duly acknowledged or proved and certified as provided by law, may be presented
in evidence without further proof, the certificate of acknowledgement being prima facie evidence of the execution of the instrument or
document involved.

Significant herein is this Court's elucidation in De Jesus v. Court of Appeals,124 which reads –

On the evidentiary value of these documents, it should be recalled that the notarization of a private document converts it into a public one
and renders it admissible in court without further proof of its authenticity (Joson vs. Baltazar, 194 SCRA 114 [1991]). This is so because a
public document duly executed and entered in the proper registry is presumed to be valid and genuine until the contrary is shown by clear
and convincing proof (Asido vs. Guzman, 57 Phil. 652 [1918]; U.S. vs. Enriquez, 1 Phil 241 [1902]; Favor vs. Court of Appeals, 194 SCRA 308
[1991]). As such, the party challenging the recital of the document must prove his claim with clear and convincing evidence (Diaz vs. Court
of Appeals, 145 SCRA 346 [1986]).

The rule on the evidentiary weight that must be accorded a notarized document is clear and unambiguous. The certificate of acknowledgement in
the notarized Deeds of Assignment constituted prima facie evidence of the execution thereof. Thus, the burden of refuting this presumption fell on
respondent. She could have presented evidence of any defect or irregularity in the execution of the said documents125 or raised questions as to the
verity of the notary public's acknowledgment and certificate in the Deeds.126 But again, respondent admitted executing the Deeds of Assignment,
dated 2 March 1978 and 9 March 1978, although claiming that the loans for which they were executed as security were already paid. And, she
assailed the Deeds of Assignment, dated 25 August 1978, with nothing more than her bare denial of execution thereof, hardly the clear and
convincing evidence required to trounce the presumption of due execution of a notarized document.

Petitioners not only presented the notarized Deeds of Assignment, but even secured certified literal copies thereof from the National Archives.127 Mr.
Renato Medua, an archivist, working at the Records Management and Archives Office of the National Library, testified that the copies of the Deeds
presented before the RTC were certified literal copies of those contained in the Notarial Registries of the notary publics concerned, which were
already in the possession of the National Archives. He also explained that he could not bring to the RTC the Notarial Registries containing the original
copies of the Deeds of Assignment, because the Department of Justice (DOJ) Circular No. 97, dated 8 November 1968, prohibits the bringing of
original documents to the courts to prevent the loss of irreplaceable and priceless documents.128

Accordingly, this Court gives the Deeds of Assignment grave importance in establishing the authority given by the respondent to petitioner Citibank
to use as security for her loans her money her market placements with petitioner FNCB Finance, represented by PNs No. 8167 and 8169, later to be
rolled-over as PNs No. 20138 and 20139. These Deeds of Assignment constitute the law between the parties, and the obligations arising therefrom
shall have the force of law between the parties and should be complied with in good faith.129 Standard clauses in all of the Deeds provide that –

The ASSIGNOR and the ASSIGNEE hereby further agree as follows:

xxxx

2. In the event the OBLIGATIONS are not paid at maturity or upon demand, as the case may be, the ASSIGNEE is fully authorized
and empowered to collect and receive the PLACEMENT (or so much thereof as may be necessary) and apply the same in payment
of the OBLIGATIONS. Furthermore, the ASSIGNOR agrees that at any time, and from time to time, upon request by the ASSIGNEE,
the ASSIGNOR will promptly execute and deliver any and all such further instruments and documents as may be necessary to
effectuate this Assignment.

xxxx
 15

5. This Assignment shall be considered as sufficient authority to FNCB Finance to pay and deliver the PLACEMENT or so much
thereof as may be necessary to liquidate the OBLIGATIONS, to the ASSIGNEE in accordance with terms and provisions hereof.130

Petitioner Citibank was only acting upon the authority granted to it under the foregoing Deeds when it finally used the proceeds of PNs No. 20138
and 20139, paid by petitioner FNCB Finance, to partly pay for respondent's outstanding loans. Strictly speaking, it did not effect a legal compensation
or off-set under Article 1278 of the Civil Code, but rather, it partly extinguished respondent's obligations through the application of the security given
by the respondent for her loans. Although the pertinent documents were entitled Deeds of Assignment, they were, in reality, more of a pledge by
respondent to petitioner Citibank of her credit due from petitioner FNCB Finance by virtue of her money market placements with the latter.
According to Article 2118 of the Civil Code –

ART. 2118. If a credit has been pledged becomes due before it is redeemed, the pledgee may collect and receive the amount due. He shall
apply the same to the payment of his claim, and deliver the surplus, should there be any, to the pledgor.

PNs No. 20138 and 20139 matured on 3 September 1979, without them being redeemed by respondent, so that petitioner Citibank collected from
petitioner FNCB Finance the proceeds thereof, which included the principal amounts and interests earned by the money market placements,
amounting to ₱1,022,916.66, and applied the same against respondent's outstanding loans, leaving no surplus to be delivered to respondent.

Dollar accounts with Citibank-Geneva

Despite the legal compensation of respondent's savings account and the total application of the proceeds of PNs No. 20138 and 20139 to
respondent's outstanding loans, there still remained a balance of ₱1,069,847.40. Petitioner Citibank then proceeded to applying respondent's dollar
accounts with Citibank-Geneva against her remaining loan balance, pursuant to a Declaration of Pledge supposedly executed by respondent in its
favor.

Certain principles of private international law should be considered herein because the property pledged was in the possession of an entity in a
foreign country, namely, Citibank-Geneva. In the absence of any allegation and evidence presented by petitioners of the specific rules and laws
governing the constitution of a pledge in Geneva, Switzerland, they will be presumed to be the same as Philippine local or domestic laws; this is
known as processual presumption.131

Upon closer scrutiny of the Declaration of Pledge, this Court finds the same exceedingly suspicious and irregular.

First of all, it escapes this Court why petitioner Citibank took care to have the Deeds of Assignment of the PNs notarized, yet left the Declaration of
Pledge unnotarized. This Court would think that petitioner Citibank would take greater cautionary measures with the preparation and execution of
the Declaration of Pledge because it involved respondent's "all present and future fiduciary placements" with a Citibank branch in another country,
specifically, in Geneva, Switzerland. While there is no express legal requirement that the Declaration of Pledge had to be notarized to be effective,
even so, it could not enjoy the same prima facie presumption of due execution that is extended to notarized documents, and petitioner Citibank
must discharge the burden of proving due execution and authenticity of the Declaration of Pledge.

Second, petitioner Citibank was unable to establish the date when the Declaration of Pledge was actually executed. The photocopy of the Declaration
of Pledge submitted by petitioner Citibank before the RTC was undated.132 It presented only a photocopy of the pledge because it already forwarded
the original copy thereof to Citibank-Geneva when it requested for the remittance of respondent's dollar accounts pursuant thereto. Respondent, on
the other hand, was able to secure a copy of the Declaration of Pledge, certified by an officer of Citibank-Geneva, which bore the date 24 September
1979.133 Respondent, however, presented her passport and plane tickets to prove that she was out of the country on the said date and could not
have signed the pledge. Petitioner Citibank insisted that the pledge was signed before 24 September 1979, but could not provide an explanation as
to how and why the said date was written on the pledge. Although Mr. Tan testified that the Declaration of Pledge was signed by respondent
personally before him, he could not give the exact date when the said signing took place. It is important to note that the copy of the Declaration of
Pledge submitted by the respondent to the RTC was certified by an officer of Citibank-Geneva, which had possession of the original copy of the
pledge. It is dated 24 September 1979, and this Court shall abide by the presumption that the written document is truly dated.134 Since it is
undeniable that respondent was out of the country on 24 September 1979, then she could not have executed the pledge on the said date.

Third, the Declaration of Pledge was irregularly filled-out. The pledge was in a standard printed form. It was constituted in favor of Citibank, N.A.,
otherwise referred to therein as the Bank. It should be noted, however, that in the space which should have named the pledgor, the name of
petitioner Citibank was typewritten, to wit –

The pledge right herewith constituted shall secure all claims which the Bank now has or in the future acquires against Citibank, N.A.,
Manila (full name and address of the Debtor), regardless of the legal cause or the transaction (for example current account, securities
transactions, collections, credits, payments, documentary credits and collections) which gives rise thereto, and including principal, all
contractual and penalty interest, commissions, charges, and costs.

The pledge, therefore, made no sense, the pledgor and pledgee being the same entity. Was a mistake made by whoever filled-out the form? Yes, it
could be a possibility. Nonetheless, considering the value of such a document, the mistake as to a significant detail in the pledge could only be
committed with gross carelessness on the part of petitioner Citibank, and raised serious doubts as to the authenticity and due execution of the same.
The Declaration of Pledge had passed through the hands of several bank officers in the country and abroad, yet, surprisingly and implausibly, no one
noticed such a glaring mistake.

Lastly, respondent denied that it was her signature on the Declaration of Pledge. She claimed that the signature was a forgery. When a document is
assailed on the basis of forgery, the best evidence rule applies –

Basic is the rule of evidence that when the subject of inquiry is the contents of a document, no evidence is admissible other than the
original document itself except in the instances mentioned in Section 3, Rule 130 of the Revised Rules of Court. Mere photocopies of
documents are inadmissible pursuant to the best evidence rule. This is especially true when the issue is that of forgery.

As a rule, forgery cannot be presumed and must be proved by clear, positive and convincing evidence and the burden of proof lies on the
party alleging forgery. The best evidence of a forged signature in an instrument is the instrument itself reflecting the alleged forged
signature. The fact of forgery can only be established by a comparison between the alleged forged signature and the authentic and genuine
 16

signature of the person whose signature is theorized upon to have been forged. Without the original document containing the alleged
forged signature, one cannot make a definitive comparison which would establish forgery. A comparison based on a mere xerox copy or
reproduction of the document under controversy cannot produce reliable results.135

Respondent made several attempts to have the original copy of the pledge produced before the RTC so as to have it examined by experts. Yet,
despite several Orders by the RTC,136 petitioner Citibank failed to comply with the production of the original Declaration of Pledge. It is admitted that
Citibank-Geneva had possession of the original copy of the pledge. While petitioner Citibank in Manila and its branch in Geneva may be separate and
distinct entities, they are still incontestably related, and between petitioner Citibank and respondent, the former had more influence and resources
to convince Citibank-Geneva to return, albeit temporarily, the original Declaration of Pledge. Petitioner Citibank did not present any evidence to
convince this Court that it had exerted diligent efforts to secure the original copy of the pledge, nor did it proffer the reason why Citibank-Geneva
obstinately refused to give it back, when such document would have been very vital to the case of petitioner Citibank. There is thus no justification to
allow the presentation of a mere photocopy of the Declaration of Pledge in lieu of the original, and the photocopy of the pledge presented by
petitioner Citibank has nil probative value.137 In addition, even if this Court cannot make a categorical finding that respondent's signature on the
original copy of the pledge was forged, it is persuaded that petitioner Citibank willfully suppressed the presentation of the original document, and
takes into consideration the presumption that the evidence willfully suppressed would be adverse to petitioner Citibank if produced.138

Without the Declaration of Pledge, petitioner Citibank had no authority to demand the remittance of respondent's dollar accounts with Citibank-
Geneva and to apply them to her outstanding loans. It cannot effect legal compensation under Article 1278 of the Civil Code since, petitioner
Citibank itself admitted that Citibank-Geneva is a distinct and separate entity. As for the dollar accounts, respondent was the creditor and Citibank-
Geneva is the debtor; and as for the outstanding loans, petitioner Citibank was the creditor and respondent was the debtor. The parties in these
transactions were evidently not the principal creditor of each other.

Therefore, this Court declares that the remittance of respondent's dollar accounts from Citibank-Geneva and the application thereof to her
outstanding loans with petitioner Citibank was illegal, and null and void. Resultantly, petitioner Citibank is obligated to return to respondent the
amount of US$149,632,99 from her Citibank-Geneva accounts, or its present equivalent value in Philippine currency; and, at the same time,
respondent continues to be obligated to petitioner Citibank for the balance of her outstanding loans which, as of 5 September 1979, amounted to
₱1,069,847.40.

The parties shall be liable for interests on their monetary obligations to each other, as determined herein.

In summary, petitioner Citibank is ordered by this Court to pay respondent the proceeds of her money market placements, represented by PNs No.
23356 and 23357, amounting to ₱318,897.34 and ₱203,150.00, respectively, earning an interest of 14.5% per annum as stipulated in the
PNs,139 beginning 17 March 1977, the date of the placements.

Petitioner Citibank is also ordered to refund to respondent the amount of US$149,632.99, or its equivalent in Philippine currency, which had been
remitted from her Citibank-Geneva accounts. These dollar accounts, consisting of two fiduciary placements and current accounts with Citibank-
Geneva shall continue earning their respective stipulated interests from 26 October 1979, the date of their remittance by Citibank-Geneva to
petitioner Citibank in Manila and applied against respondent's outstanding loans.

As for respondent, she is ordered to pay petitioner Citibank the balance of her outstanding loans, which amounted to ₱1,069,847.40 as of 5
September 1979. These loans continue to earn interest, as stipulated in the corresponding PNs, from the time of their respective maturity dates,
since the supposed payment thereof using respondent's dollar accounts from Citibank-Geneva is deemed illegal, null and void, and, thus, ineffective.

VI

Petitioner Citibank shall be liable for damages to respondent.

Petitioners protest the award by the Court of Appeals of moral damages, exemplary damages, and attorney's fees in favor of respondent. They
argued that the RTC did not award any damages, and respondent, in her appeal before the Court of Appeals, did not raise in issue the absence of
such.

While it is true that the general rule is that only errors which have been stated in the assignment of errors and properly argued in the brief shall be
considered, this Court has also recognized exceptions to the general rule, wherein it authorized the review of matters, even those not assigned as
errors in the appeal, if the consideration thereof is necessary in arriving at a just decision of the case, and there is a close inter-relation between the
omitted assignment of error and those actually assigned and discussed by the appellant.140 Thus, the Court of Appeals did not err in awarding the
damages when it already made findings that would justify and support the said award.

Although this Court appreciates the right of petitioner Citibank to effect legal compensation of respondent's local deposits, as well as its right to the
proceeds of PNs No. 20138 and 20139 by virtue of the notarized Deeds of Assignment, to partly extinguish respondent's outstanding loans, it finds
that petitioner Citibank did commit wrong when it failed to pay and properly account for the proceeds of respondent's money market placements,
evidenced by PNs No. 23356 and 23357, and when it sought the remittance of respondent's dollar accounts from Citibank-Geneva by virtue of a
highly-suspect Declaration of Pledge to be applied to the remaining balance of respondent's outstanding loans. It bears to emphasize that banking is
impressed with public interest and its fiduciary character requires high standards of integrity and performance.141 A bank is under the obligation to
treat the accounts of its depositors with meticulous care whether such accounts consist only of a few hundred pesos or of millions of pesos.142 The
bank must record every single transaction accurately, down to the last centavo, and as promptly as possible.143 Petitioner Citibank evidently failed to
exercise the required degree of care and transparency in its transactions with respondent, thus, resulting in the wrongful deprivation of her property.

Respondent had been deprived of substantial amounts of her investments and deposits for more than two decades. During this span of years,
respondent had found herself in desperate need of the amounts wrongfully withheld from her. In her testimony144 before the RTC, respondent
narrated –

Q By the way Mrs. Witness will you kindly tell us again, you said before that you are a businesswoman, will you tell us again what are the
businesses you are engaged into [sic]?
 17

A I am engaged in real estate. I am the owner of the Modesta Village 1 and 2 in San Mateo, Rizal. I am also the President and Chairman of
the Board of Macador [sic] Co. and Business Inc. which operates the Macador [sic] International Palace Hotel. I am also the President of the
Macador [sic] International Palace Hotel, and also the Treasures Home Industries, Inc. which I am the Chairman and president of the Board
and also operating affiliated company in the name of Treasures Motor Sales engaged in car dealers [sic] like Delta Motors, we are the
dealers of the whole Northern Luzon and I am the president of the Disto Company, Ltd., based in Hongkong licensed in Honkong [sic] and
now operating in Los Angeles, California.

Q What is the business of that Disto Company Ltd.?

A Disto Company, Ltd., is engaged in real estate and construction.
Q Aside from those businesses are you a member of any national or community organization for social and civil activities?
A Yes sir.
Q What are those?
A I am the Vice-President of thes [sic] Subdivision Association of the Philippines in 1976, I am also an officer of the … Chamber of Real Estate Business
Association; I am also an officer of the Chatholic [sic] Women's League and I am also a member of the CMLI, I forgot the definition.
Q How about any political affiliation or government position held if any?
A I was also a candidate for Mayo last January 30, 1980.
Q Where?
A In Dagupan City, Pangasinan.
Q What else?
A I also ran as an Assemblywoman last May, 1984, Independent party in Regional I, Pangasinan.
Q What happened to your businesses you mentioned as a result of your failure to recover you [sic] investments and bank deposits from the
defendants?
A They are not all operating, in short, I was hampered to push through the businesses that I have.
A [sic] Of all the businesses and enterprises that you mentioned what are those that are paralyzed and what remain inactive?
A Of all the company [sic] that I have, only the Disto Company that is now operating in California.
Q How about your candidacy as Mayor of Dagupan, [sic] City, and later as Assemblywoman of Region I, what happened to this?
A I won by voting but when election comes on [sic] the counting I lost and I protested this, it is still pending and because I don't have financial
resources I was not able to push through the case. I just have it pending in the Comelec.
Q Now, do these things also affect your social and civic activities?
A Yes sir, definitely.
Q How?
A I was embarrassed because being a businesswoman I would like to inform the Honorable Court that I was awarded as the most outstanding
businesswoman of the year in 1976 but when this money was not given back to me I was not able to comply with the commitments that I have
promised to these associations that I am engaged into [sic], sir.

For the mental anguish, serious anxiety, besmirched reputation, moral shock and social humiliation suffered by the respondent, the award of moral
damages is but proper. However, this Court reduces the amount thereof to ₱300,000.00, for the award of moral damages is meant to compensate
for the actual injury suffered by the respondent, not to enrich her.145

Having failed to exercise more care and prudence than a private individual in its dealings with respondent, petitioner Citibank should be liable for
exemplary damages, in the amount of ₱250,000.00, in accordance with Article 2229146and 2234147 of the Civil Code.

With the award of exemplary damages, then respondent shall also be entitled to an award of attorney's fees.148Additionally, attorney's fees may be
awarded when a party is compelled to litigate or to incur expenses to protect his interest by reason of an unjustified act of the other party.149 In this
case, an award of ₱200,000.00 attorney's fees shall be satisfactory.

In contrast, this Court finds no sufficient basis to award damages to petitioners.1âwphi1 Respondent was compelled to institute the present case in
the exercise of her rights and in the protection of her interests. In fact, although her Complaint before the RTC was not sustained in its entirety, it did
raise meritorious points and on which this Court rules in her favor. Any injury resulting from the exercise of one's rights is damnum absque injuria.150

IN VIEW OF THE FOREGOING, the instant Petition is PARTLY GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. No. 51930, dated 26
March 2002, as already modified by its Resolution, dated 20 November 2002, is hereby AFFIRMED WITH MODIFICATION, as follows –

1. PNs No. 23356 and 23357 are DECLARED subsisting and outstanding. Petitioner Citibank is ORDEREDto return to respondent the principal
amounts of the said PNs, amounting to Three Hundred Eighteen Thousand Eight Hundred Ninety-Seven Pesos and Thirty-Four Centavos
(₱318,897.34) and Two Hundred Three Thousand One Hundred Fifty Pesos (₱203,150.00), respectively, plus the stipulated interest of
Fourteen and a half percent (14.5%) per annum, beginning 17 March 1977;

2. The remittance of One Hundred Forty-Nine Thousand Six Hundred Thirty Two US Dollars and Ninety-Nine Cents (US$149,632.99) from
respondent's Citibank-Geneva accounts to petitioner Citibank in Manila, and the application of the same against respondent's outstanding
loans with the latter, is DECLARED illegal, null and void. Petitioner Citibank is ORDERED to refund to respondent the said amount, or its
equivalent in Philippine currency using the exchange rate at the time of payment, plus the stipulated interest for each of the fiduciary
placements and current accounts involved, beginning 26 October 1979;

3. Petitioner Citibank is ORDERED to pay respondent moral damages in the amount of Three Hundred Thousand Pesos (₱300,000.00);
exemplary damages in the amount of Two Hundred Fifty Thousand Pesos (₱250,000.00); and attorney's fees in the amount of Two
Hundred Thousand Pesos (₱200,000.00); and

4. Respondent is ORDERED to pay petitioner Citibank the balance of her outstanding loans, which, from the respective dates of their
maturity to 5 September 1979, was computed to be in the sum of One Million Sixty-Nine Thousand Eight Hundred Forty-Seven Pesos and
Forty Centavos (₱1,069,847.40), inclusive of interest. These outstanding loans shall continue to earn interest, at the rates stipulated in the
corresponding PNs, from 5 September 1979 until payment thereof.

SO ORDERED.

G.R. No. 109775 November 14, 1996

 18

PEOPLE OF THE PHILIPPINES vs MALIMIT

Appellant Jose Encarnacion Malimit, charged with 1 and convicted of the special complex crime of robbery with homicide, 2 was meted by the trial
court 3 the penalty of reclusion perpetua. He was also ordered to indemnify the heirs of Onofre Malaki the sum of Fifty Thousand Pesos (P50,000.00)
without subsidiary imprisonment in case of insolvency, and to pay the cost. 4

In this appeal, appellant asks for his acquittal alleging that the trial court committed the following errors, to wit:

THE TRIAL COURT ERRED IN GIVING CREDENCE TO THE UNRELIABLE TESTIMONIES OF THE PROSECUTION WITNESSES ON THEIR
ALLEGED IDENTIFICATION OF THE ACCUSED-APPELLANT AS THE PERPETRATOR OF THE CRIME DESPITE THE FACT (SIC) THEY
REVEALED THEIR ALLEGED "KNOWLEDGE" OF TH6E CRIME MORE THAN FIVE MONTHS AFTER THE INCIDENT.

II

THE TRIAL COURT ERRED IN ADMITTING AS EVIDENCE THE WALLET AND ITS CONTENTS ALTHOUGH THE CIRCUMSTANCES WHICH
LEAD TO ITS PRODUCTION WAS OBTAINED IN VIOLATION OF THE CONSTITUTIONAL RIGHTS OF THE ACCUSED.

III

THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED-APPELLANT DESPITE FAILURE OF THE PROSECUTION TO PROVE HIS
GUILT BEYOND REASONABLE DOUBT. 5

The following is the recital of facts as summarized by the appellee in its Brief, and duly supported by the evidence on record:

On April 15, 1991, around 8:00 o'clock in the evening, [Onofre] Malaki was attending to his store. Malaki's houseboy Edilberto
Batin, on the other hand, was busy cooking chicken for supper at the kitchen located at the back of the store (TSN, June 19, 199
(sic), p. 14).

Soon thereafter, Florencio Rondon, a farmer, arrived at the store of Malaki. Rondon was to purchase chemical for his rice farm
(TSN, May 22, 1992, p. 19). Rondon came from his house, approximately one hundred and fifty (150) meters distant from
Malaki's store (Ibid., p. 24).

Meanwhile, Batin had just finished cooking and from the kitchen, he proceeded directly to the store to ask his employer (Malaki)
if supper is to be prepared. As Batin stepped inside the store, he was taken aback when he saw appellant coming out of the store
with a bolo (TSN, June 9, 1992, p. 14), while his boss, bathed in his own blood, was sprawled on the floor "struggling for his life"
(hovering between life and death) (Ibid.).

Rondon, who was outside and barely five (5) meters away from the store, also saw appellant Jose Malimit (or "Manolo") rushing
out through the front door of Malaki's store with a blood-stained bolo (TSN, May 22, 1992, p. 29). Aided by the illumination
coming from a pressure lamp ("petromax") inside the store, Rondon clearly recognized Malimit (Ibid., p. 22).

Batin immediately went out of the store to seek help. Outside the store, he met Rondon (TSN, June 9, 1992, p. 15). After a brief
conversation, both Batin and Rondon rushed to the nearby house of Malaki's brother-in-law Eutiquio Beloy and informed Beloy
of the tragic incident which befell Malaki. Batin, along with Beloy, went back to the store. Inside, they saw the lifeless body of
Malaki in a pool of blood lying prostrate at the floor. Beloy readily noticed that the store's drawer was opened and ransacked and
the wallet of Malaki was missing from his pocket (Ibid., pp. 16-17). 6

In his first assignment of error, appellant questions the credibility of prosecution witnesses Florencio Rondon and Edilberto Batin by pointing out
their alleged delay in revealing what they knew about the incident. He posits that while the crime took place on April 15, 1991, it was only on
September 17, 1991 when these witnesses tagged him as the culprit.

We find these contentions bereft of merit. Appellant haphazardly concluded that Rondon and Batin implicated the appellant to this gruesome crime
only on September 17, 1991. The aforementioned date however, was merely the date 7 when Rondon and Batin executed their respective
affidavits, 8 narrating that they saw the appellant on the night of April 15, 1991 carrying a bolo stained with blood and rushing out of Malaki's store.
As to appellant's claim of delay, suffice it to state that extant from the records are ample testimonial evidence negating appellant's protestation, to
wit: (1) after having discovered the commission of the crime, Rondon and Batin immediately looked for Eutiquio Beloy, Malaki's brother-in-law, and
informed him that appellant was the only person they saw running away from the crime scene; 9 (2) Beloy and Batin reported the crime with the
CAFGU detachment in their barangay where Batin declared that it was appellant who robbed Malaki on that fateful night; 10 and (3) Batin again made
a similar statement later at the Silago Police Station.11

Next, appellant derided the non-presentation by the prosecution of the police blotter which could prove if appellant was indeed implicated right
away by Batin to the crime.12 We do not believe, however, that it was necessary for the prosecution to present as evidence a copy of the
aforementioned police blotter. Neither was its non-presentation in court fatal to the prosecution's case. Entries in the police blotter are merely
corroborative evidence of the uncontroverted testimony of Batin that he identified the appellant as the perpetrator of the crime before the Silago
police. As such, its presentation as evidence is not indispensable. 13 Besides, if appellant believed that he was not identified therein, then he should
have secured a copy thereof from the Silago Police Station and utilized the same as controverting evidence to impeach Batin's credibility as
witness. 14 Having failed to do so, appellant cannot now pass the blame on the prosecution for something which appellant himself should have done.

Even assuming arguendo that Rondon and Batin identified the appellant only on September 15, 1991, or after the lapse of five months from
commission of the crime, this fact alone does not render their testimony less credible. The non-disclosure by the witness to the police officers of
appellant's identity immediately after the occurrence of the crime is not entirely against human experience. 15 In fact the natural reticence of most
people to get involved in criminal prosecutions against immediate neighbors, as in this case, 16 is of judicial notice. 17 At any rate, the consistent
 19

teaching of our jurisprudence is that the findings of the trial court with regard to the credibility of witnesses are given weight and the highest degree
of respect by the appellate court. 18 This is the established rule of evidence, as the matter of assigning values to the testimony of witnesses is a
function best performed by the trial court which can weigh said testimony in the light of the witness" demeanor, conduct and attitude at the
trial. 19 And although the rule admits of certain exceptions, namely: (1) when patent inconsistencies in the statements of witnesses are ignored by
the trial court, or (2) when the conclusions arrived at are clearly unsupported by the evidence, 20 we found none in this case.

In his second assignment of error, appellant asseverates that the admission as evidence of Malaki's wallet 21together with its contents, viz., (1)
Malaki's residence certificate; 22 (2) his identification card;23 and (3) bunch of keys, 24 violates his right against self-incrimination. 25 Likewise,
appellant sought for their exclusion because during the custodial investigation, wherein he pointed to the investigating policemen the place where
he hid Malaki's wallet, he was not informed of his constitutional rights.

We are not persuaded. The right against self-incrimination guaranteed under our fundamental law finds no application in this case. This right, as put
by Mr. Justice Holmes in Holt vs. United States, 26 ". . . is a prohibition of the use of physical or moral compulsion, to extort communications from him
. . ." It is simply a prohibition against legal process to extract from the [accused]'s own lips, against his will, admission of his guilt. 27 It does not apply
to the instant case where the evidence sought to be excluded is not an incriminating statement but an object evidence. Wigmore, discussing the
question now before us in his treatise on evidence, thus, said:

If, in other words (the rule) created inviolability not only for his [physical control of his] own vocal utterances, but also for his
physical control in whatever form exercise, then, it would be possible for a guilty person to shut himself up in his house, with all
the tools and indicia of his crime, and defy the authority of the law to employ in evidence anything that might be obtained by
forcibly overthrowing his possession and compelling the surrender of the evidential articles — a clear reduction ad absurdum. In
other words, it is not merely compulsion that is the kernel of the privilege, . . . but testimonial compulsion 28

Neither are we prepared to order the exclusion of the questioned pieces of evidence pursuant to the provision of the Constitution under Article III,
Section 12, viz:

(1) Any person under investigation for the commission of an offense shall have the right to be informed of his right to remain
silent and to have competent and independent counsel preferably of his own choice. If the person cannot afford the services of
counsel, he must be provided with one. These rights cannot be waived except in writing and in the presence of counsel.

xxx xxx xxx

(3) Any confession or admission obtained in violation of this or Sec. 17 hereof, shall be inadmissible in evidence against him.
(Emphasis ours.)

xxx xxx xxx

These are the so-called "Miranda rights" so oftenly disregarded by our men in uniform. However, infractions thereof render inadmissible only the
extrajudicial confession or admission made during custodial investigation. The admissibility of other evidence, provided they are relevant to the issue
and is not otherwise excluded by law or rules, 29 is not affected even if obtained or taken in the course of custodial investigation. Concededly,
appellant was not informed of his right to remain silent and to have his own counsel by the investigating policemen during the custodial
investigation. Neither did he execute a written waiver of these rights in accordance with the constitutional prescriptions. Nevertheless, these
constitutional short-cuts do not affect the admissibility of Malaki's wallet, identification card, residence certificate and keys for the purpose of
establishing other facts relevant to the crime. Thus, the wallet is admissible to establish the fact that it was the very wallet taken from Malaki on the
night of the robbery. The identification card, residence certificate and keys found inside the wallet, on the other hand, are admissible to prove that
the wallet really belongs to Malaki. Furthermore, even assuming arguendo that these pieces of evidence are inadmissible, the same will not detract
from appellant's culpability considering the existence of other evidence and circumstances establishing appellant's identity and guilt as perpetrator of
the crime charged.

We, now come to appellant's third assignment of error where he demurs on the prosecution's evidence, contending that they are insufficient to
sustain his conviction.

Our close scrutiny of the record reveals otherwise. Time and again, we ruled that there can be a verdict of conviction based on circumstantial
evidence when the circumstances proved form an unbroken chain which leads to a fair and reasonable conclusion pinpointing the accused, to the
exclusion of all the others, as the perpetrator of the crime. 30In order that circumstantial evidence may be sufficient to convict, the same must
comply with these essential requisites, viz., (a) there is more than one circumstance; (b) the facts from which the inferences are derived are proven;
and (c) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. 31 In this case, there were at least five
(5) circumstances constituting an unbroken chain of events which by their "concordant combination and cumulative effect", satisfy the requirements
for the conviction of the appellant, 32specifically: (1) appellant was seen by Rondon and Batin, whose credibilities were untarnished, holding a bolo in
his right hand and rushing out of Malaki's store seconds prior to their discovery of the crime; 33 (2) Malaki sustained multiple stab wounds 34 and he
died of "cardiac arrest, secondary to severe external hemorrhage due to multiple stab wounds", 35 (3) witness Elmer Ladica saw the appellant on
August 6, 1991, accompanied by some policemen, retrieve Malaki's wallet underneath a stone at the seashore in Barangay Hingatungan; 36 (4)
appellant himself admitted in his testimony that on August 6, 1991, he accompanied several policemen to the seashore where he hid Malaki's
wallet; 37 and (5) appellant's flight and his subsequent disappearance from Hingatungan immediately after the incident. 38

On the other hand, appellant's version of the story does not inspire belief. He maintains that on that fateful night he was in his house together with
his wife. He claims that they had just arrived from a gambling spree allegedly in the house of a certain Maui Petalcorin. Surprisingly, however, the
defense did not bother to call appellant's wife to the witness stand to corroborate appellant's alibi. Neither did it present as witness Maui Petalcorin,
or any other person who may have seen the appellant in the said place, if only to provide a semblance of truth to this assertion. As the defense of
alibi is weak in view of the positive identification of the appellant by the prosecution witnesses, 39 it becomes weaker because of the unexplained
failure of the defense to present any corroboration. 40 Furthermore, proof that appellant was in his house when the crime was committed is not
enough. Appellant must likewise demonstrate that he could not have been physically present at the place of the crime or in its vicinity, at the time of
its commission. 41 In this case, appellant himself admitted that his house was just about eighty (80) meters away from the house of
Malaki. 42 It was, therefore, not impossible for him to have been physically present at the place of the commission of the crime, as in fact, no
evidence to negate this possibility was ever adduced by him at the trial.
 20

Appellant's insistence that he merely found Malaki's wallet by chance while gathering shells along the seashore, and that he feared being implicated
in the crime for which reason he hid the wallet underneath a stone, hardly inspires belief. We are at a loss, just as the trial court was, as to why
appellant should fear being implicated in the crime if indeed he merely found Malaki's wallet by chance. No inference can be drawn from appellant's
purported apprehension other than the logical conclusion that appellant had knowledge of the crime. Besides, proof that appellant is in possession
of a stolen property gives rise to a valid presumption that he stole the same. 43

In fine, as the killing of Malaki took place on the occasion of robbery, appellant was correctly convicted by the trial court of the special complex crime
of robbery with homicide, defined and penalized under Article 294, paragraph 1 of the Revised Penal Code.

WHEREFORE, the appealed judgment of conviction is hereby AFFIRMED in toto

G.R. No. L-43955-56 July 30, 1979

RENATO LAZATIN alias RENATO STA. CLARA vs CAMPOS
The Court dismisses the petition which seeks to overrule respondent judge's orders declaring that petitioner has failed to establish by competent
evidence his alleged status as an adopted child of the deceased Lazatin spouses and prays for judgment of this Court "declaring as established the fact
of (his) adoption as a son of the deceased spouses entitling him to succeed in their estates as such." Respondent judge correctly ruled that he could
not allow petitioner (who had filed a motion to intervene in the proceedings to probate the will of the late Margarita de Asis Vda. de Lazatin and to
settle her estate as her adopted son, after having earlier filed a motion to intervene in the intestate proceedings of her pre-deceased husband as his
admitted illegitimate [not natural] son), over the opposition of private respondents, to introduce evidence that he had "enjoyed ... the status of an
adopted child of the without his first producing competent and documentary that there had been judicial proceedings for his by the said spouses which
resulted in the final judgment of a competent court decreeing his adoption.
On January 13, 1974, Dr. Mariano M. Lazatin diamond intestate in Pasay City, survived by his wife, Margarita de Asis, and his adopted twin daughters,
respondent Nora L. de Leon, married to respondent Bernardo de Leon, and respondent Irma Lazatin, married to Francisco Veloso.
One month after Mariano's death, his widow, Margarita de Asis, commenced an intestate proceeding before the Court of First Instance of Pasay,
docketed as Sp. Proc. No. 2326-P. Mariano, Oscar, Virgilio and Yvonne, claiming to be admitted illegitimate (not natural) children of Dr. Lazatin with one
Helen Munoz, intervened. Subsequently, one Lily Lazatin also intervened, claiming to be another admitted illegitimate (not natural) child.
Two months after or on April 11, 1974, the widow, Margarita de Asis, also died, leaving a & holographic will executed on May 29, 1970, providing,
among others, for a legacy of cash, jewelry, and stocks to respondent Arlene de Leon, a granddaughter; a legacy of support to Rodolfo Gallardo, a son
of her late sister; and a legacy of education to Ramon Sta. Clara, son of petitioner Renato Lazatin alias Renato Sta. Clara.
During her lifetime, Margarita de Asis kept a safety deposit box at the People's Bank and Trust Company, Roxas Boulevard branch, which either she or
respondent Nora L. de Leon could open. Five days after Margarita's death, respondent Nora L. de Leon, accompanied by her husband, respondent
Bernardo de Leon, opened the safety deposit box and removed its contents: (a) shares of stock; (b) her adoption papers and those of her sister,
respondent Irma L. Veloso; and (c) jewelry belonging to her and to her mother. Respondent Nora L. de Leon claims that she opened the safety deposit
box in good faith, believing that it was held jointly by her and her deceased mother. Her sole reason for opening the box was to get her stock certificates
and other small items deposited therein. When she was to close the deposit box, the bank personnel informed her that she needed an authority from
the court to do so, in view of her mother's death and so, she removed everything from the box.
On June 3, 1974, private respondents filed a petition to probate the will of the late Margarita de Asis, before docketed as Sp. Proc. No. 2341-P of
respondent Court, Days after having learned that respondent Nora L. de Leon had opened this safety deposit box, petitioner's son, Ramon Sta. Clara,
filed a motion in the probate court, claiming that the deceased had executed a will subsequent to that submitted for probate and demanding its
production. He likewise prayed for the opening of the safety deposit box. Respondent Nora L. de Leon admitted that she opened the box but there was
no will or any document resembling a will therein.
Upon the order of the probate court, presided over by Judge Arsenio B. Alcantara, the safety deposit box was opened on November 6, 1974, at which
time it was found to be empty, because prior thereto respondent Nora L. de Leon had already removed its contents.
On November 22, 1974, or seven months after, the death of Margarita de Asis, petitioner intervened for the first time in the proceedings to settle the
estate of the late Dr. Mariano M. Lazatin (Sp. Proc. No. 2326- P), as an admitted illegitimate (not natural) child.
Under the same date of November 22, 1974, petitioner's son, Ramon, filed a petition in the estate proceedings of Margarita de Asis to examine private
respondents on the contents of the safety deposit box, Whereupon, on January 31, 1975, the probate court ordered respondent Nora L. de Leon to
deliver the properties taken from the safety deposit box to the Clerk of Court. Subsequently, however, the two cases (Sp. Proc. No. 2326-P, Mariano
Lazatin, and 2341-P, Margarita de Asis) were transferred to the sala of respondent Judge Jose C. Campos, Jr.
On May 29, 1975, Judge Campos issued an order requiring counsel for respondents Nora L. de Leon and Bernardo de Leon to produce all those papers
and items removed from the safety deposit box and to deliver the same to the custody of the court within one week. Within the period ordered,
respondent Nora L. de Leon deposited with the Clerk of Court, not the items themselves, but two keys to a new safety deposit box which could only be
opened upon order of the court.
On August 20, 1975, petitioner Renato to Lazatin alias Renato Sta. Clara filed a motion to intervene in the estate of Margarita de Asis, Sp. Proc. No.
2341-P, as an adopted child, on the basis of an affidavit executed by Benjamin Lazatin, brother of the deceased Dr. Mariano M. Lazatin, the petitioner
was an "illegitimate son" of Dr. Lazatin and was later adopted by him. This affidavit was later modified on August 19, 1975 to state that petitioner was
adopted by both Mariano M. Lazatin and his wife Margarita de Asis.
On September 29, 1975, Judge Campos found respondent' Nora L. de Leon guilty of contempt of court for not complying with the orders of January 31,
1975 and May 29, 1975, requiring her to produce and deliver to the court an the papers and items removed from the safety deposit box. Her former
counsel was also found guilty of contempt, sentenced to pay a fine of P00.00 and suspended from appearing in the two cases (Sp. Proc. No. 2326-P,
Mariano M. Lazatin, and Sp. Proc. No. 2341-P, Margarita de Asis), on her testimony that she, Nora L. de Leon, acted upon his advice.
Respondent court heard petitioner's motion to intervene as an adopted son in the estate of Margarita de Asis, Sp. Proc. No. 2341-P, at which hearings
petitioner presented no decree of adoption in his, favor. Instead, petitioner attempted to prove, over private respondents' objections, that he had
recognized the deceased spouses as his parents; he had been supported by them until their death; formerly he was known as "Renato Lazatin" but was
compelled to change his surname to "Sta. Clara" when the deceased spouses refused to give consent to his marriage to his present wife; that at first,
he and his wife stayed at the residence of Engracio de Asis, father of Margarita, but a few months later, they transferred to the Mercy Hospital at Taft
Avenue, Manila, owned by the deceased spouses, where they continuously resided up to the present. Photographs were also intended to be presented
by petitioner, e.g., photograph of Irma Veloso where she addressed herself as sister of petitioner; photograph of deceased Margarita de Asis and
petitioner when he was a boy; document showing that petitioners real name is "Renato Lazatin." 1
 21

Respondent court first reserved its ruling on private respondents' objections to the admission of petitioner's evidence, but on November 14, 1975,
when petitioner could not present evidence on the issue of his alleged legal adoption, respondent court discontinued the hearing and gave the parties
time to file memoranda on the question of the admissibility of the evidence sought to be introduced by petitioner.
On March 4, 1976, respondent court barred the introduction of petitioner's evidence because: têñ.£îhqwâ£
All the evidence submitted by Renato and Ramon Sta. Clara through their counsel do not prove or have no tendency to prove the existence of any judicial
proceeding where the adoption of the parties above named were taken up by any court. Neither do the evidence tend to establish the presence of any
record of a proceeding in court where the adoption of the above named persons was held. The evidence, however, tends to prove a status of a recognized
natural child which, however, is not the legal basis for which Renato and Ramon seek to intervene in this proceedings. In view thereof, and taking into
consideration the evidence heretofore presented by the petitioners, any further introduction of similar evidence, documentary or oral, would not prove
or tend to prove the fact of their adoption but rather of a recognized natural child.
Petitioner then filed on March 16, 1976, in both cases, a motion to declare as established the fact of adoption in view of respondent Nora L. de Leon's
refusal to comply with the orders of respondent court to deposit the items she had removed from the safety deposit box of Margarita de Asis. As
authority therefor, petitioner invokes the sanction of Rule 29, Section 3 of the Rules of Court, since according to him, the order of the court for the
production of the items in the safety deposit box can be considered as an order for production and inspection of documents under Rule 27.
Private respondents opposed the motion, and on March 26, 1976, respondent court denied petitioner's motion. On April 26, 1976, respondent Nora L.
de Leon deposited with respondent court the items she had removed from the safety deposit box. An inventory was conducted by respondent court,
with notice to the parties, and the items surrendered consisted only of pieces of jewelry and stock certificates.
On June 3,1976, respondent court, ruling on petitioners motion for definite resolution on his previous n declare as established the fact of adoption,
issued the f order: têñ.£îhqwâ£
As far as the case of Renato Sta. Clara is his Petition to establish his status as an adopted child, The Court has ruled that he has failed to establish such
status. The any motion for reconsideration unless based on some documentary proof.
Hence, the petition at bar.
We find the ruling of the respondent court to be in conformity with law and jurisprudence.
1. Adoption is a juridical act, a proceeding in rem 2 which creates between two persons a relationship similar to that which results from legitimate
paternity and filiation. 3 Only an adoption made through the court, or in pursuance with the procedure laid down under Rule 99 of the Rules of Court
is valid in this jurisdiction. 4 It is not of natural law at all, but is wholly and entirely artificial. 5 To establish the relation, the statutory requirements must
be strictly carried out, otherwise, the adoption is an absolute nullity. 6 The fact of adoption is never presumed, but must be affirmatively proved by the
person claiming its existence. The destruction by fire of a public building in which the adoption papers would have been filed if existent does not give
rise to a presumption of adoption nor is the destruction of the records of an adoption proceeding to be presumed. On the contrary, the absence of a
record of adoption has been said to evolve a presumption of its non-existence. 7 Where, under the provisions of the statute, an adoption is effected by
a court order, the records of such court constitute the evidence by which such adoption may be established. 8
2. Petitioner's flow of evidence in the case below does not lead us to any proof of judicial adoption. We can not pluck from his chain of evidence any
link to the real existence of a court decree of adoption in his favor. Petitioner's proofs do not show or tend to show that at one time or another a specific
court of competent jurisdiction rendered in an adoption proceeding initiated by the late spouses an order approving his adoption as a child of the latter.
No judicial records of such adoption or copies thereof are presented or attempted to be presented. Petitioner merely proceeds from a nebulous
assumption that he was judicially adopted between the years 1928 and 1932. By what particular court was the adoption decreed or by whom was the
petition heard, petitioner does not even manifest, much less show. There are no witnesses cited to that adoption proceeding or to the adoption decree.
Apparently on the assumption that the adoption was commenced in Manila, petitioner's counsel secured a certification from the Court of first Instance
of Manila which, however, negatively reported "(T)hat among the salvaged records now available in this Office, there has not been found, after a diligent
search, any record regarding the adoption of Mr. Renato Lazatin alias Renato Sta. Clara allegedly filed sometime in the years 1928 to 1931 by the spouses
Dr. Mariano M. Lazatin and Margarita de Asis Lazatin." The certification of the Local Civil Registrar of Manila "(T)hat our pre-war records relative to
decisions of the Court of First Instance were either destroyed or burned during the Liberation of the City of Manila," does not furnish any legal basis for
a presumption of adoption in favor of petitioner. This is because there was no proof that petitioner was really adopted in Manila or that an adoption
petition was filed in the Court of first Instance of Manila by the deceased spouses, where, after hearing, a judgment of approval was rendered by said
court. Moreover, if there was really such adoption, petitioner could have conveniently secured a copy of the newpaper publication of the adoption as
required under Section 4, Rule 99 of the Rules of Court (formerly Section 4, Rule 100) or a certification of the publishing house to that effect. Petitioner's
failure on this point is anotherer strong indication of the non-existence of the one who gave the written consent of the non-existence of the adoption
paper. We also observed to the adoption (Section 3, Rule 99, Rules of Court), whether the parents or orphanage, does not appear on this point is not
so difficult and such proof must be presented if only to prove the real existence of the adoption. And of course, if the war, the clear right and duty of
petitioner was to duly reconstitute the records as provided by law.
3. The absence of proof of such order of adoption by the court, as provided by the statute, cannot be substituted by parol evidence that a child has
lived with a person, not his parent, and has been treated as a child to establish such adoption. 9 Even evidence of declaration of the deceased, made
in his lifetime, that he intended to adopt a child as his heir, and that he had adopted him, and of the fact that the child resided with the deceased, as a
member of his family, from infancy until he attained his majority, is not sufficient to establish the fact of adoption.10 Nor does the fact that the deceased
spouses fed, clothed, educated, recognized and referred to one like petitioner as an adopted child, recognized and referred to one like petitioner as an
adopted child, necessarily establish adoption of the child. 11 Withal, the attempts of petitioner to prove his adoption by acts and declarations of the
deceased do not discharge the mandatory presentation of the judicial decree of adoption. The thrust of petitioner's evidence is rather to establish his
status as an admitted illegitimate child, not an adopted child which status of an admitted illegitimate child was — the very basis of his petitioner for
intervention in the estate proceedings of the late Dr. Lazatin, as above stated. (Supra, at page 3 hereof)
We do not discount though that declarations in regard to pedigree, although hearsay, are admitted on the principle that they are natural expressions
of persons who must know the truth. 12 Pedigree testimony is admitted because it is the best that the nature of the case admits and because greater
evil might arise from the rejection of such proof than from its admission. 13 But, in proving an adoption, there is a better proof available and it should
be produced. The whereabouts of the child's family and circulation of the jurisdiction in which they resided and investigation in those courts where
adoption are usually granted would surely produce an adoption order, if indeed there was an order. 14 Besides, since the point in favor of receiving
hearsay evidence upon matters of family history or pedigree is its reliability, it has been set forth as a condition upon which such evidence is received
that it emanate from a source within the family. Pursuant to this view, before a declaration of a deceased person can be admitted to prove pedigree, or
ancestry, the relationship of the declarant, by either of blood or affinity to the family in question, or a branch thereof, must ordinarily be established by
competent evidence. 15 Section 33 of Rule 130 states: "The act or declaration of a person deceased, or outside of the Philippines, or unable to testify,
in respect to the pedigree of another person related to him by birth or marriage, may be received in evidence where it occurred before the controversy,
and the relationship between the two persons is shown by evidence other than such actor declaration ..."
4. Secondary evidence is nonetheless admissible where the records of adoption proceedings were actually lost or destroyed. But, prior to the
introduction of such secondary evidence, the proponent must establish the former existence of the instrument. The correct order of proof is as follows:
 22

Existence; execution; loss; contents; although this order may be changed if necessary in the discretion of the court. 16 The sufficiency of the proof
offered as a predicate for the admission of an alleged lost deed lies within the judicial discretion of the trial court under all the circumstances of the
particular case.17 As earlier pointed out, petitioner failed to establish the former existence of the adoption paper and its subsequent loss or destruction.
Secondary proof may only be introduced if it has first beer. established that such adoption paper really existed and was lost. This is
indispensable. 18 Petitioner's supposed adoption was only testified to by him and is allegedly to be testified to a brother of the deceased Mariano M.
Lazatin or others who have witnessed that the deceased spouses treated petitioner as their child. If adoption was really made, the records thereof
should have existed and the same presented at the hearing or subsequent thereto or a reasonable explanation of loss or destruction thereof, if that be
the case, adduced. 19
Assuming the mere fact that the deceased spouses treated petitioner as their child does not justify the conclusion that petitioner had been in fact
judicially adopted by the spouses nor does it constitute admissible proof of adoption.
We cannot entertain the plea of petitioner that the sanction of Rule 29 should be applied to consider as established the fact of his adoption due to the
refusal of respondent Nora L. de Leon to produce the document of adoption, because first, the fact or real existence of petitioner's adoption had not
been established; second, there is no proof that such document of adoption is in the possession of respondent Nora L. de Leon; third, the motu
proprio order of the court for Nora de Leon to produce the items retrieved from the safety deposit box cannot be treated as a mode of discovery of
production and inspection of documents under Rule 27; and fourth, the items deposited in the safety deposit box have already been surrendered by
respondent Nora L. de Leon on April 26; 1976 and no document of adoption in favor of petitioner was listed as found in the safety deposit box.
5. As a necessary consequence, petitioner Renato Lazatin alias Renato Sta. Clara cannot properly intervene in the settlement of the estate of Margarita
de Asis, Sp. Proc. No. 2341-P as an adopted child because of lack of proof thereof. For one to intervene in an estate proceeding, it is a requisite that he
has an interest in the estate, either as one who would be benefited as an heir or one who has a claim against the estate like a creditor. 20 A child by
adoption cannot inherit from the parent creditor. by adoption unless the act of adoption has been done in strict accord with the statue. Until this is
done, no rights are acquired by the child and neither the supposed adopting parent or adopted child could be bound thereby. 21 The burden of proof
in establishing adoption is upon the person claiming such relationship. He must prove compliance with the statutes relating to adoption in the
jurisdiction where the adoption occurred. 22 A fortiori if no hereditary interest in the estate can be gained by a claimant who failed to submit proof
thereof, whether the will is probated or not, intervention should be denied as it would merely result in unnecessary complication. 23 To succeed, a
child must be ligitimate, legitimated, adopted, acknowledged illegitimate natural child or natural child by legal fiction or recognized spurious child. 24
In the face of the verified pleadings of record (constituting judicial admissions) which show that petitioner sought to intervene on November 22, 1974
in the estate proceedings of his alleged adoptive father Dr. Mariano M. Lazatin (Sp. Proc. No. 2326-P) as an admitted illegitimate (not natural)
child, 25 while his intervention on August 20, 1975 in the estate of Margarita de Asis, widow of the deceased Dr. Lazatin (Sp. Proc. No. 2341-P) was as
her adopted child on the basis of the affidavit of a brother of the deceased Dr. Lazatin, Benjamin Lazatin, executed August 19, 1975 (which affidavit
modified a first affidavit executed on May 31, 1975, which failed to estate by "oversight" petitioner, but stated that affiant knew petitioner to be "an
illegitimate son" of Dr. Lazatin who later "legally adopted (him) as a son before the Court of First Instance of Manila sometime between the years 1928
and 1921") and prescinding from the question of whether a natural or spurious child may be legally adopted by the putative father, we hold that no
grave abuse of discretion nor error of law as committed by respondent judge in issuing the questioned orders of March 4, 1976, March 26, 1976 and
June 3, 1976 denying petitioner's petition "to declare as established in this proceeding the fact of adoption" and denying "any motion for reconsideration
unless based on some documentary proof." The Court finds no basis to grant the affirmative relief sought in this proceeding by petitioner for a rendition
of judgment "declaring as established the fact of your petitioner's adoption as a son of the deceased spouses entitling him to succeed in their estates
as such in accordance with the applicable law on succession as to his inheritance."
Upon the filing of the petition, the Court issued on June 16, 1976 a temporary restraining order; which as amended on July 21, 1976, restrained
respondent judge "from proceeding with the hearing scheduled on June 17, 1976 at 8:30 a.m., requiring the submission of evidence to establish heirship
in Special Proceedings No. 2326-P entitled 'Intestate Estate of the Late Mariano M. Lazatin' and Special Proceedings No. 2341-P, entitled 'Testate Estate
of the late Margarita de Asis Vda. de Lazatin,' and from proceeding with the probate of the alleged holographic will of the deceased Doñ;a Margarita
de Asis Vda. de Lazatin scheduled on June 29, 1976, August 10 and 12, 1976 and on any other dates." With the Court's determination of the issues as
herein set forth, there is no longer any need for restraining the proceedings below and the said restraining order shall be immediately lifted.
On January 24, 1977, the Court upon petitioner's motion resolved to conditionally allow respondent judge "to take the deposition of petitioner's
witnesses to perpetuate their testimonies pursuant to Rule 134, Section 7 of the Rules of Court, subject to the Court's ruling in due course on the
admissibility of such testimonies." The Court thereby permitted in effect the advance testimonies of petitioner's witnesses, principally among them
Rafael Lazatin and Esteban L. Lazatin, both brothers of the deceased Dr. Mariano L. Lazatin and as stated in petitioner's motion of January 11,
1977: têñ.£îhqwâ£
Substantially, the testimony of the above-named witnesses will be on the fact that they had been informed by the deceased spouses, Mariano and
Margarita Lazatin that your petitioner was their [Mariano's and Margarita's] judicially adopted son and to elicit further from them the fact that your
petitioner enjoys the reputation of being their judicially adopted son in the Lazatin family.
The Court's resolution allowing the advance testimonies of petitioner's witnesses was but in application of the Court's long standing admonition to trial
courts is reaffirmed in Lamagan vs. De la Cruz, 26, "to be liberal in accepting proferred evidence since even if they were to refuse to accept the evidence,
the affected party will nevertheless be allowed to spread the excluded evidence on the record, for review on appeal." The Court therein once again
stressed the established rule that "it is beyond question that rulings of the trial court on procedural questions and on admissibility of evidence during
the course of the trial are interlocutory in nature and may not be the subject of separate appeal or review on certiorari, but are to be assigned as errors
and reviewed in the appeal properly taken from the decision rendered by the trial court on the merits of the case," 27 and that a party's recourse when
proferred evidence is rejected by the trial court is to make a offer stating on the record what a party or witness would have testified to were his
testimony not excluded, as well as to attach to the record any rejected exhibits.
At the continuation of the proceedings below for declaration of heirship and for probate of the alleged holographic the deceased Margarita de Asis Vda.
de Lazatin, pet who has failed to establish his status as an alleged ;m child of Margarita de Asis (unless, as reserved to him by the court below, he can
show some documentary proof),and whose intervention in the estate of the deceased Dr. Mariano Lazatin is as an admitted illegitimate child, win have
to decide whether he will pursue his first theory of having the of such admitted illegitimate child of said deceased. Whatever be his theory and his
course of action and whether or not he may be duly snowed to intervene in the proceedings below as such alleged admitted illegitimate child, his
recourse in the event of an adverse ruling against him is to make a formal offer of proof and of his excluded evidence, oral and documentary, and seek
a reversal on an appeal in due course.
ACCORDINGLY, the petition is dismissed and the questioned orders denying petitioner's petition below "to declare as established in this proceeding the
fact of [his] adoption" are hereby affirmed. The temporary restraining order issued on June 16, 1976 and amended on July 21, 1976 is ordered lifted,
effective immediately. Without costs.
G.R. No. 143736 August 11, 2004
OFELIA HERRERA-FELIX, vs CA
 23

FACTS: In 1993, respondent St. Joseph Resource Dev't filed a complaint for sum of money against Spouses Felix with prayer for writ of preliminary
attachment. It was alleged that, during the period from November 1992 to December 1992, the Felix Spouses purchased from the respondent tubs of
assorted fish. Spouses still had an outstanding obligation amounting to P1M after deducting their total payment of P438,615.50 from their aggregate
purchases.
The trial court granted respondent's prayer for a writ of preliminary attachment on a bond of P1.1M which was posted in 1993. The Sheriff
levied and took custody of some of the personal properties of the Spouses. A copy of the writ of preliminary attachment, summons and complaint were
served on them at their residence, through the sister of Herrera-Felix, Ma. Luisa Herrera. According to the Sheriff's Return, Ofelia Herrera-Felix was out
of the country, as per the information relayed to him by Ma. Luisa Herrera. Feliz spouses through counsel filed a motion praying for an extension of
time to file their answer to the complaint. The trial court issued an Order granting the motion. However, the Felix Spouses failed to file their answer to
the complaint. The respondent then filed a Motion to declare the said spouses in default, granted by the court in its Resolution. A copy of the said
resolution was sent to and received by the counsel of the Felix Spouses through registered mail.
The petitioner, through her sister, Jovita Herrera-Seña, now comes to this Court via a petition for review on certioraripraying for the reversal of the
decision of the Court of Appeals. She alleges that the trial court did not acquire jurisdiction over her person through the service of the complaint and
summons on her sister, Ma. Luisa Herrera. She maintains that the latter was a mere visitor in her house, not a resident therein; hence, the decision of
the trial court is null and void. She further alleges that even assuming the validity of the trial court's decision, such decision never became final and
executory since she was not served a copy of the same. As such, the writ of execution issued by the trial court, the sale of her personal properties at
public auction, as well as the issuance of the Certificate of Sale, are null and void. She asserts that the actuations of both the trial court and the Sheriff
deprived her of her right to due process.
The contentions of the petitioner have no merit.
The court acquires jurisdiction over the person of the defendant by service of the complaint and summons on him, either by personal service or by
substituted service or by extra-territorial service thereof or by his voluntary personal appearance before the court or through counsel. In this case, the
petitioner appeared before the court, through counsel, and filed a motion for extension of time to file her answer to the complaint which the trial court
granted. She even admitted in the said motion that she was served with a copy of the complaint as well as the summons. The admissions made in a
motion are judicial admissions which are binding on the party who made them. Such party is precluded from denying the same unless there is proof of
palpable mistake or that no such admission was made.

SECONDARY EVIDENCE

G.R. No. 191696 April 10, 2013

ROGELIO DANTIS vs MAGHINANG
FACTS: This is a complaint for quieting of title and recovery of possession with damages filed by petitioner Dantis against respondent Maghinang before
RTC. Rogelio alleged that he was the registered owner of a parcel of land covered by TCT, with an area of 5,657 sqm, located in Bulacan; that he acquired
ownership of the property through a deed of extrajudicial partition of the estate of his deceased father in 1993; that he had been paying the realty
taxes on the said property; that Julio, Jr. occupied and built a house on a portion of his property without any right at all; that demands were made upon
Julio, Jr. that he vacate the premises but the same fell on deaf ears; and that the acts of Julio, Jr. had created a cloud of doubt over his title and right of
possession of his property. He, thus, prayed that judgment be rendered declaring him to be the true and real owner of the parcel of land ordering Julio,
Jr. to deliver the possession of that portion of the land he was occupying; and directing Julio, Jr. to pay rentals from October 2000 and attorney’s fees.
Maghinang claimed that he was the actual owner of the 352 square meters (subject lot) of the land where he was living; that he had been in open and
continuous possession of the property for almost thirty (30) years; the subject lot was once tenanted by his ancestral relatives until it was sold by
Rogelio’s father, Emilio, to his father, Julio Maghinang; that later, he succeeded to the ownership of the subject lot after his father died in 1968; and
that he was entitled to a separate registration of the subject lot on the basis of the documentary evidence of sale and his open and uninterrupted
possession of the property.
RTC rendered its decision declaring Rogelio as the true owner of the entire 5,657-square meter lot located in Sta. Rita, San Miguel, Bulacan,
as evidenced by his TCT over the same. The RTC did not lend any probative value on the documentary evidence of sale adduced by Julio, Jr. consisting
of: 1) an affidavit allegedly executed by Ignacio Dantis (Ignacio), Rogelio’s grandfather, whereby said affiant attested, among others, to the sale of the
subject lot made by his son, Emilio, to Julio; and 2) an undated handwritten receipt of initial downpayment in the amount of ₱100.00 supposedly issued
by Emilio to Julio, Sr. in connection with the sale of the subject lot.8 The RTC ruled that even if these documents were adjudged as competent evidence,
still, they would only serve as proofs that the purchase price for the subject lot had not yet been completely paid, Rogelio was not duty-bound to deliver
the property to Julio, Jr. The RTC found Julio, Jr. to be a mere possessor by tolerance. CA found appeal to be impressed with merit. It held that Exhibit
"4" was an indubitable proof of the sale of the 352-square meter lot between Emilio and Julio, Sr. It also ruled that the partial payment of the purchase
price, coupled with the delivery of the res, gave efficacy to the oral sale and brought it outside the operation of the statute of frauds. Finally, the court
a quo declared that Julio, Jr. and his predecessors-in-interest had an equitable claim over the subject lot which imposed on Rogelio and his predecessors-
in-interest a personal duty to convey what had been sold after full payment of the selling price.
ISSUE: WON there is a perfected contract of sale between Emilio and Julio, Sr.
HELD: CA and the RTC reached different conclusions on the question of whether or not there was an oral contract of sale. The RTC ruled that Rogelio
Dantis was the sole and rightful owner of the parcel of land and that no oral contract of sale was entered into between Emilio Dantis and Julio
Maghinang, Sr. The CA was of the opposite view.
Evidence is hearsay when its probative force depends on the competency and credibility of some persons other than the witness by whom it is sought
to be produced. The exclusion of hearsay evidence is anchored on three reasons: 1) absence of cross-examination; 2) absence of demeanor evidence;
and 3) absence of oath.
Exhibit "4," on the other hand, is considered secondary evidence being a mere photocopy which, in this case, cannot be admitted to prove the contents
of the purported undated handwritten receipt. The best evidence rule requires that the highest available degree of proof must be produced. For
documentary evidence, the contents of a document are best proved by the production of the document itself to the exclusion of secondary or
substitutionary evidence.
A secondary evidence is admissible only upon compliance with Rule 130, Section 5, which states that: when the original has been lost or destroyed, or
cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may
prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated. Accordingly,
the offeror of the secondary evidence is burdened to satisfactorily prove the predicates thereof, namely: (1) the execution or existence of the original;
(2) the loss and destruction of the original or its non-production in court; and (3) the unavailability of the original is not due to bad faith on the part of
the proponent/offeror. Proof of the due execution of the document and its subsequent loss would constitute the basis for the introduction of secondary
 24

evidence.23 In MCC Industrial Sales Corporation v. Ssangyong Corporation,24 it was held that where the missing document is the foundation of the
action, more strictness in proof is required than where the document is only collaterally involved.
The chief evidence of Julio, Jr. to substantiate the existence of the oral contract of sale is Exhibit "4."

G.R. No. 160855 April 16, 2008

CONCEPCION CHUA GAW, petitioner,

vs.
SUY BEN CHUA and FELISA CHUA, respondents.

DECISION

NACHURA, J.:

This is a Petition for Review on Certiorari from the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 66790 and Resolution2 denying the
motion for reconsideration. The assailed decision affirmed the ruling of the Regional Trial Court (RTC) in a Complaint for Sum of Money in favor of the
plaintiff.

The antecedents are as follows:

Spouses Chua Chin and Chan Chi were the founders of three business enterprises3 namely: Hagonoy Lumber, Capitol Sawmill Corporation, and
Columbia Wood Industries. The couple had seven children, namely, Santos Chua; Concepcion Chua; Suy Ben Chua; Chua Suy Phen; Chua Sioc Huan;
Chua Suy Lu; and Julita Chua. On June 19, 1986, Chua Chin died, leaving his wife Chan Chi and his seven children as his only surviving heirs. At the
time of Chua Chin’s death, the net worth of Hagonoy Lumber was P415,487.20.4

On December 8, 1986, his surviving heirs executed a Deed of Extra-Judicial Partition and Renunciation of Hereditary Rights in Favor of a Co-
Heir5 (Deed of Partition, for brevity), wherein the heirs settled their interest in Hagonoy Lumber as follows: one-half (1/2) thereof will pertain to the
surviving spouse, Chan Chi, as her share in the conjugal partnership; and the other half, equivalent to P207,743.60, will be divided among Chan Chi
and the seven children in equal pro indiviso shares equivalent to P25,967.00 each.6 In said document, Chan Chi and the six children likewise agreed to
voluntarily renounce and waive their shares over Hagonoy Lumber in favor of their co-heir, Chua Sioc Huan.

In May 1988, petitioner Concepcion Chua Gaw and her husband, Antonio Gaw, asked respondent, Suy Ben Chua, to lend them P200,000.00 which
they will use for the construction of their house in Marilao, Bulacan. The parties agreed that the loan will be payable within six (6) months without
interest.7 On June 7, 1988, respondent issued in their favor China Banking Corporation Check No. 2408108 for P200,000.00 which he delivered to the
couple’s house in Marilao, Bulacan. Antonio later encashed the check.

On August 1, 1990, their sister, Chua Sioc Huan, executed a Deed of Sale over all her rights and interests in Hagonoy Lumber for a consideration
of P255,000.00 in favor of respondent.9

Meantime, the spouses Gaw failed to pay the amount they borrowed from respondent within the designated period. Respondent sent the couple a
demand letter,10 dated March 25, 1991, requesting them to settle their obligation with the warning that he will be constrained to take the
appropriate legal action if they fail to do so.

Failing to heed his demand, respondent filed a Complaint for Sum of Money against the spouses Gaw with the RTC. The complaint alleged that on
June 7, 1988, he extended a loan to the spouses Gaw for P200,000.00, payable within six months without interest, but despite several demands, the
couple failed to pay their obligation.11

In their Answer (with Compulsory Counterclaim), the spouses Gaw contended that the P200,000.00 was not a loan but petitioner’s share in the
profits of Hagonoy Lumber, one of her family’s businesses. According to the spouses, when they transferred residence to Marilao, Bulacan, petitioner
asked respondent for an accounting, and payment of her share in the profits, of Capital Sawmills Corporation, Columbia Wood Industries
Corporation, and Hagonoy Lumber. They claimed that respondent persuaded petitioner to temporarily forego her demand as it would offend their
mother who still wanted to remain in control of the family businesses. To insure that she will defer her demand, respondent allegedly gave
her P200,000.00 as her share in the profits of Hagonoy Lumber.12

In his Reply, respondent averred that the spouses Gaw did not demand from him an accounting of Capitol Sawmills Corporation, Columbia Wood
Industries, and Hagonoy Lumber. He asserted that the spouses Gaw, in fact, have no right whatsoever in these businesses that would entitle them to
an accounting thereof. Respondent insisted that the P200,000.00 was given to and accepted by them as a loan and not as their share in Hagonoy
Lumber.13

With leave of court, the spouses Gaw filed an Answer (with Amended Compulsory Counterclaim) wherein they insisted that petitioner, as one of the
compulsory heirs, is entitled to one-sixth (1/6) of Hagonoy Lumber, which the respondent has arrogated to himself. They claimed that, despite
repeated demands, respondent has failed and refused to account for the operations of Hagonoy Lumber and to deliver her share therein. They then
prayed that respondent make an accounting of the operations of Hagonoy Lumber and to deliver to petitioner her one-sixth (1/6) share thereof,
which was estimated to be worth not less than P500,000.00.14

In his Answer to Amended Counterclaim, respondent explained that his sister, Chua Sioc Huan, became the sole owner of Hagonoy Lumber when the
heirs executed the Deed of Partition on December 8, 1986. In turn, he became the sole owner of Hagonoy Lumber when he bought it from Chua Sioc
Huan, as evidenced by the Deed of Sale dated August 1, 1990.15

Defendants, in their reply,16 countered that the documents on which plaintiff anchors his claim of ownership over Hagonoy Lumber were not true
and valid agreements and do not express the real intention of the parties. They claimed that these documents are mere paper arrangements which
were prepared only upon the advice of a counsel until all the heirs could reach and sign a final and binding agreement, which, up to such time, has
not been executed by the heirs.17
 25

During trial, the spouses Gaw called the respondent to testify as adverse witness under Section 10, Rule 132. On direct examination, respondent
testified that Hagonoy Lumber was the conjugal property of his parents Chua Chin and Chan Chi, who were both Chinese citizens. He narrated that,
initially, his father leased the lots where Hagonoy Lumber is presently located from his godfather, Lu Pieng, and that his father constructed the two-
storey concrete building standing thereon. According to respondent, when he was in high school, it was his father who managed the business but he
and his other siblings were helping him. Later, his sister, Chua Sioc Huan, managed Hogonoy Lumber together with their other brothers and sisters.
He stated that he also managed Hagonoy Lumber when he was in high school, but he stopped when he got married and found another job. He said
that he now owns the lots where Hagonoy Lumber is operating.18

On cross-examination, respondent explained that he ceased to be a stockholder of Capitol Sawmill when he sold his shares of stock to the other
stockholders on January 1, 1991. He further testified that Chua Sioc Huan acquired Hagonoy Lumber by virtue of a Deed of Partition, executed by the
heirs of Chua Chin. He, in turn, became the owner of Hagonoy Lumber when he bought the same from Chua Sioc Huan through a Deed of Sale dated
August 1, 1990. 19

On re-direct examination, respondent stated that he sold his shares of stock in Capitol Sawmill for P254,000.00, which payment he received in cash.
He also paid the purchase price of P255,000.00 for Hagonoy Lumber in cash, which payment was not covered by a separate receipt as he merely
delivered the same to Chua Sioc Huan at her house in Paso de Blas, Valenzuela. Although he maintains several accounts at Planters Bank, Paluwagan
ng Bayan, and China Bank, the amount he paid to Chua Sioc Huan was not taken from any of them. He kept the amount in the house because he was
engaged in rediscounting checks of people from the public market. 20

On December 10, 1998, Antonio Gaw died due to cardio vascular and respiratory failure.21

The RTC held that respondent is entitled to the payment of the amount of P200,000.00 with interest. It noted that respondent personally issued
Check No. 240810 to petitioner and her husband upon their request to lend them the aforesaid amount. The trial court concluded that
the P200,000.00 was a loan advanced by the respondent from his own funds and not remunerations for services rendered to Hagonoy Lumber nor
petitioner’s advance share in the profits of their parents’ businesses.

The trial court further held that the validity and due execution of the Deed of Partition and the Deed of Sale, evidencing transfer of ownership of
Hagonoy Lumber from Chua Sioc Huan to respondent, was never impugned. Although respondent failed to produce the originals of the documents,
petitioner judicially admitted the due execution of the Deed of Partition, and even acknowledged her signature thereon, thus constitutes an
exception to the best evidence rule. As for the Deed of Sale, since the contents thereof have not been put in issue, the non-presentation of the
original document is not fatal so as to affect its authenticity as well as the truth of its contents. Also, the parties to the documents themselves do not
contest their validity. Ultimately, petitioner failed to establish her right to demand an accounting of the operations of Hagonoy Lumber nor the
delivery of her 1/6 share therein.

As for petitioner’s claim that an accounting be done on Capitol Sawmill Corporation and Columbia Wood Industries, the trial court held that
respondent is under no obligation to make such an accounting since he is not charged with operating these enterprises.23

Aggrieved, petitioner appealed to the CA, alleging that the trial court erred (1) when it considered the amount of P200,000.00 as a loan obligation
and not Concepcion’s share in the profits of Hagonoy Lumber; (2) when it considered as evidence for the defendant, plaintiff’s testimony when he
was called to testify as an adverse party under Section 10 (e), Rule 132 of the Rules of Court; and (3) when it considered admissible mere copies of
the Deed of Partition and Deed of Sale to prove that respondent is now the owner of Hagonoy Lumber.24

On May 23, 2003, the CA affirmed the Decision of the RTC. 25 The appellate court found baseless the petitioner’s argument that the RTC should not
have included respondent’s testimony as part of petitioner’s evidence. The CA noted that the petitioner went on a fishing expedition, the taking of
respondent’s testimony having taken up a total of eleven hearings, and upon failing to obtain favorable information from the respondent, she now
disclaims the same. Moreover, the CA held that the petitioner failed to show that the inclusion of respondent’s testimony in the statement of facts in
the assailed decision unduly prejudiced her defense and counterclaims. In fact, the CA noted that the facts testified to by respondent were deducible
from the totality of the evidence presented.

The CA likewise found untenable petitioner’s claim that Exhibits "H" (Deed of Sale) and Exhibit "I" (Deed of Partition) were merely temporary paper
arrangements. The CA agreed with the RTC that the testimony of petitioner regarding the matter was uncorroborated — she should have presented
the other heirs to attest to the truth of her allegation. Instead, petitioner admitted the due execution of the said documents. Since petitioner did not
dispute the due execution and existence of Exhibits "H" and "I", there was no need to produce the originals of the documents in accordance with the
best evidence rule.26

On December 2, 2003, the CA denied the petitioner’s motion for reconsideration for lack of merit.27

Petitioner is before this Court in this petition for review on certiorari, raising the following errors:

I. THAT ON THE PRELIMINARY IMPORTANT RELATED ISSUE, CLEAR AND PALPABLE LEGAL ERROR HAS BEEN COMMITTED IN THE
APPLICATION AND LEGAL SIGNIFICANCE OF THE RULE ON EXAMINATION OF ADVERSE PARTY OR HOSTILE WITNESS UNDER SECTION 10 (d)
AND (e) OF RULE 132, CAUSING SERIOUS DOUBT ON THE LOWER COURT’S APPEALED DECISION’S OBJECTIVITY, ANNEX "C".

II. THAT ON THE IMPORTANT LEGAL ISSUE RELATIVE TO THE AFORESAID TWO OPPOSING CLAIMS OF RESPONDENT AND PETITIONER, CLEAR
AND PALPABLE LEGAL ERROR HAS BEEN COMMITTED UNDER THE LOWER COURT’S DECISION ANNEX "C" AND THE QUESTIONED DECISION
OF MAY 23, 2003 (ANNEX "A") AND THE RESOLUTION OF DECEMBER 2, 2003, (ANNEX "B") IN DEVIATING FROM AND DISREGARDING
ESTABLISHED SUPREME COURT DECISIONS ENJOINING COURTS NOT TO OVERLOOK OR MISINTERPRET IMPORTANT FACTS AND
CIRCUMSTANCES, SUPPORTED BY CLEAR AND CONVINCING EVIDENCE ON RECORD, AND WHICH ARE OF GREAT WEIGHT AND VALUE,
WHICH WOULD CHANGE THE RESULT OF THE CASE AND ARRIVE AT A JUST, FAIR AND OBJECTIVE DECISION. (Citations omitted)

III. THAT FINALLY, AS TO THE OTHER LEGAL IMPORTANT ISSUE RELATIVE TO CLAIM OR OWNERSHIP OF THE "Hagonoy Lumber" FAMILY
BUSINESS, CLEAR AND PALPABLE LEGAL ERROR HAS BEEN COMMITTED ON THE REQUIREMENTS AND CORRECT APPLICATION OF THE "BEST
EVIDENCE RULE" UNDER SECTION 3, RULE 130 OF THE REVISED RULES OF COURT.28

The petition is without merit.

 26

Petitioner contends that her case was unduly prejudiced by the RTC’s treatment of the respondent’s testimony as adverse witness during cross-
examination by his own counsel as part of her evidence. Petitioner argues that the adverse witness’ testimony elicited during cross-examination
should not be considered as evidence of the calling party. She contends that the examination of respondent as adverse witness did not make him her
witness and she is not bound by his testimony, particularly during cross-examination by his own counsel.29 In particular, the petitioner avers that the
following testimony of the respondent as adverse witness should not be considered as her evidence:

(11.a) That RESPONDENT-Appellee became owner of the "HAGONOY LUMBER" business when he bought the same from Chua Sioc Huan
through a Deed of Sale dated August 1, 1990 (EXH.H);

(11.b) That the "HAGONOY LUMBER," on the other hand, was acquired by the sister Chua Sioc Huan, by virtue of Extrajudicial Partition and
Renunciation of Hereditary Rights in favor of a Co-Heir (EXH. I);

(11.c) That the 3 lots on which the "HAGONOY LUMBER" business is located were acquired by Lu Pieng from the Santos family under the
Deed of Absolute Sale (EXH. J); that Lu Pieng sold the Lots to Chua Suy Lu in 1976 (EXHS. K, L, & M.); that Chua Siok Huan eventually
became owner of the 3 Lots; and in 1989 Chua Sioc Huan sold them to RESPONDENT-Appellee (EXHS. Q and P); that after he acquired the 3
Lots, he has not sold them to anyone and he is the owner of the lots.30

We do not agree that petitioner’s case was prejudiced by the RTC’s treatment of the respondent’s testimony during cross-examination as her
evidence.

If there was an error committed by the RTC in ascribing to the petitioner the respondent’s testimony as adverse witness during cross-examination by
his own counsel, it constitute a harmless error which would not, in any way, change the result of the case.

In the first place, the delineation of a piece of evidence as part of the evidence of one party or the other is only significant in determining whether
the party on whose shoulders lies the burden of proof was able to meet the quantum of evidence needed to discharge the burden. In civil cases, that
burden devolves upon the plaintiff who must establish her case by preponderance of evidence. The rule is that the plaintiff must rely on the strength
of his own evidence and not upon the weakness of the defendant’s evidence. Thus, it barely matters who with a piece of evidence is credited. In the
end, the court will have to consider the entirety of the evidence presented by both parties. Preponderance of evidence is then determined by
considering all the facts and circumstances of the case, culled from the evidence, regardless of who actually presented it.31

That the witness is the adverse party does not necessarily mean that the calling party will not be bound by the former’s testimony. The fact remains
that it was at his instance that his adversary was put on the witness stand. Unlike an ordinary witness, the calling party may impeach an adverse
witness in all respects as if he had been called by the adverse party,32 except by evidence of his bad character.33 Under a rule permitting the
impeachment of an adverse witness, although the calling party does not vouch for the witness’ veracity, he is nonetheless bound by his testimony if
it is not contradicted or remains unrebutted.34

A party who calls his adversary as a witness is, therefore, not bound by the latter’s testimony only in the sense that he may contradict him by
introducing other evidence to prove a state of facts contrary to what the witness testifies on.35 A rule that provides that the party calling an adverse
witness shall not be bound by his testimony does not mean that such testimony may not be given its proper weight, but merely that the calling party
shall not be precluded from rebutting his testimony or from impeaching him.36 This, the petitioner failed to do.

In the present case, the petitioner, by her own testimony, failed to discredit the respondent’s testimony on how Hagonoy Lumber became his sole
property. The petitioner admitted having signed the Deed of Partition but she insisted that the transfer of the property to Chua Siok Huan was only
temporary. On cross-examination, she confessed that no other document was executed to indicate that the transfer of the business to Chua Siok
Huan was a temporary arrangement. She declared that, after their mother died in 1993, she did not initiate any action concerning Hagonoy Lumber,
and it was only in her counterclaim in the instant that, for the first time, she raised a claim over the business.

Due process requires that in reaching a decision, a tribunal must consider the entire evidence presented.37 All the parties to the case, therefore, are
considered bound by the favorable or unfavorable effects resulting from the evidence.38 As already mentioned, in arriving at a decision, the entirety
of the evidence presented will be considered, regardless of the party who offered them in evidence. In this light, the more vital consideration is not
whether a piece of evidence was properly attributed to one party, but whether it was accorded the apposite probative weight by the court. The
testimony of an adverse witness is evidence in the case and should be given its proper weight, and such evidence becomes weightier if the other
party fails to impeach the witness or contradict his testimony.

Significantly, the RTC’s finding that the P200,000.00 was given to the petitioner and her husband as a loan is supported by the evidence on record.
Hence, we do not agree with the petitioner’s contention that the RTC has overlooked certain facts of great weight and value in arriving at its decision.
The RTC merely took into consideration evidence which it found to be more credible than the self-serving and uncorroborated testimony of the
petitioner.

At this juncture, we reiterate the well-entrenched doctrine that the findings of fact of the CA affirming those of the trial court are accorded great
respect, even finality, by this Court. Only errors of law, not of fact, may be reviewed by this Court in petitions for review on certiorari under Rule
45.39 A departure from the general rule may be warranted where the findings of fact of the CA are contrary to the findings and conclusions of the
trial court, or when the same is unsupported by the evidence on record.40 There is no reason to apply the exception in the instant case because the
findings and conclusions of the CA are in full accord with those of the trial court. These findings are buttressed by the evidence on record. Moreover,
the issues and errors alleged in this petition are substantially the very same questions of fact raised by petitioner in the appellate court.

On the issue of whether the P200,000.00 was really a loan, it is well to remember that a check may be evidence of indebtedness.41 A check, the
entries of which are in writing, could prove a loan transaction.42 It is pure naiveté to insist that an entrepreneur who has several sources of income
and has access to considerable bank credit, no longer has any reason to borrow any amount.

The petitioner’s allegation that the P200,000.00 was advance on her share in the profits of Hagonoy Lumber is implausible. It is true that Hagonoy
Lumber was originally owned by the parents of petitioner and respondent. However, on December 8, 1986, the heirs freely renounced and waived in
favor of their sister Chua Sioc Huan all their hereditary shares and interest therein, as shown by the Deed of Partition which the petitioner herself
signed. By virtue of this deed, Chua Sioc Huan became the sole owner and proprietor of Hagonoy Lumber. Thus, when the respondent delivered the
check for P200,000.00 to the petitioner on June 7, 1988, Chua Sioc Huan was already the sole owner of Hagonoy Lumber. At that time, both
 27

petitioner and respondent no longer had any interest in the business enterprise; neither had a right to demand a share in the profits of the business.
Respondent became the sole owner of Hagonoy Lumber only after Chua Sioc Huan sold it to him on August 1, 1990. So, when the respondent
delivered to the petitioner the P200,000.00 check on June 7, 1988, it could not have been given as an advance on petitioner’s share in the business,
because at that moment in time both of them had no participation, interest or share in Hagonoy Lumber. Even assuming, arguendo, that the check
was an advance on the petitioner’s share in the profits of the business, it was highly unlikely that the respondent would deliver a check drawn against
his personal, and not against the business enterprise’s account.

It is also worthy to note that both the Deed of Partition and the Deed of Sale were acknowledged before a Notary Public. The notarization of a private
document converts it into a public document, and makes it admissible in court without further proof of its authenticity.43 It is entitled to full faith and
credit upon its face.44 A notarized document carries evidentiary weight as to its due execution, and documents acknowledged before a notary public
have in their favor the presumption of regularity. Such a document must be given full force and effect absent a strong, complete and conclusive
proof of its falsity or nullity on account of some flaws or defects recognized by law.45 A public document executed and attested through the
intervention of a notary public is, generally, evidence of the facts therein express in clear unequivocal manner.46

Petitioner, however, maintains that the RTC erred in admitting in evidence a mere copy of the Deed of Partition and the Deed of Sale in violation of
the best evidence rule. In addition, petitioner insists that the Deed of Sale was not the result of bona fide negotiations between a true seller and
buyer.

The "best evidence rule" as encapsulated in Rule 130, Section 3,47 of the Revised Rules of Civil Procedure applies only when the content of such
document is the subject of the inquiry. Where the issue is only as to whether such document was actually executed, or exists, or on the
circumstances relevant to or surrounding its execution, the best evidence rule does not apply and testimonial evidence is admissible. Any other
substitutionary evidence is likewise admissible without need to account for the original.48 Moreover, production of the original may be dispensed
with, in the trial court’s discretion, whenever the opponent does not bona fide dispute the contents of the document and no other useful purpose will
be served by requiring production.49

Accordingly, we find that the best evidence rule is not applicable to the instant case. Here, there was no dispute as to the terms of either deed;
hence, the RTC correctly admitted in evidence mere copies of the two deeds. The petitioner never even denied their due execution and admitted
that she signed the Deed of Partition.50 As for the Deed of Sale, petitioner had, in effect, admitted its genuineness and due execution when she failed
to specifically deny it in the manner required by the rules.51 The petitioner merely claimed that said documents do not express the true agreement
and intention of the parties since they were only provisional paper arrangements made upon the advice of counsel.52 Apparently, the petitioner does
not contest the contents of these deeds but alleges that there was a contemporaneous agreement that the transfer of Hagonoy Lumber to Chua Sioc
Huan was only temporary.

An agreement or the contract between the parties is the formal expression of the parties’ rights, duties and obligations. It is the best evidence of the
intention of the parties.53 The parties’ intention is to be deciphered from the language used in the contract, not from the unilateral post
facto assertions of one of the parties, or of third parties who are strangers to the contract.54 Thus, when the terms of an agreement have been
reduced to writing, it is deemed to contain 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.55

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 66790 dated May 23, 2003 and
Resolution dated December 2, 2003 are AFFIRMED.

G.R. No. 142641 July 17, 2006

PACIFICO B. ARCEO, JR., petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.

DECISION

CORONA, J.:

This petition for review on certiorari assails the April 28, 1999 decision1 and March 27, 2000 resolution2 of the Court of Appeals in CA-G.R. CR No.
19601 affirming the trial court’s judgment finding petitioner Pacifico B. Arceo, Jr. liable for violation of Batas Pambansa Blg. (BP) 22, otherwise known
as the "Bouncing Checks Law."

The facts of the case as found by the trial court and adopted by the Court of Appeals follow.

On March 14, 1991, [petitioner], obtained a loan from private complainant Josefino Cenizal [] in the amount of P100,000.00. Several weeks
thereafter, [petitioner] obtained an additional loan of P50,000.00 from [Cenizal]. [Petitioner] then issued in favor of Cenizal, Bank of the
Philippine Islands [(BPI)] Check No. 163255, postdated August 4, 1991, for P150,000.00, at Cenizal’s house located at 70 Panay Avenue,
Quezon City. When August 4, 1991 came, [Cenizal] did not deposit the check immediately because [petitioner] promised [] that he would
replace the check with cash. Such promise was made verbally seven (7) times. When his patience ran out, [Cenizal] brought the check to
the bank for encashment. The head office of the Bank of the Philippine Islands through a letter dated December 5, 1991, informed [Cenizal]
that the check bounced because of insufficient funds.

Thereafter, [Cenizal] went to the house of [petitioner] to inform him of the dishonor of the check but [Cenizal] found out that [petitioner]
had left the place. So, [Cenizal] referred the matter to a lawyer who wrote a letter giving [petitioner] three days from receipt thereof to pay
the amount of the check. [Petitioner] still failed to make good the amount of the check. As a consequence, [Cenizal] executed on January
20, 1992 before the office of the City Prosecutor of Quezon City his affidavit and submitted documents in support of his complaint for
[e]stafa and [v]iolation of [BP 22] against [petitioner]. After due investigation, this case for [v]iolation of [BP 22] was filed against
[petitioner] on March 27, 1992. The check in question and the return slip were however lost by [Cenizal] as a result of a fire that occurred
near his residence on September 16, 1992. [Cenizal] executed an Affidavit of Loss regarding the loss of the check in question and the return
slip.3
 28

After trial, petitioner was found guilty as charged. Aggrieved, he appealed to the Court of Appeals. However, on April 28, 1999, the appellate court
affirmed the trial court’s decision in toto. Petitioner sought reconsideration but it was denied. Hence, this petition.

Petitioner claims that the trial and appellate courts erred in convicting him despite the failure of the prosecution to present the dishonored check
during the trial. He also contends that he should not be held liable for the dishonor of the check because it was presented beyond the 90-day period
provided under the law. Petitioner further questions his conviction since the notice requirement was not complied with and he was given only three
days to pay, not five banking days as required by law. Finally, petitioner asserts that he had already paid his obligation to Cenizal.

Petitioner’s contentions have no merit.

Significance of the 90-day Period

For Presentment of the Check

Petitioner asserts that there was no violation of BP 22 because the check was presented to the drawee bank only on December 5, 1991 or 120 days
from the date thereof (August 4, 1991). He argues that this was beyond the 90-day period provided under the law in connection with the
presentment of the check. We disagree.

Section 1 of BP 22 provides:

SECTION 1. Checks without sufficient funds Any person who makes or draws and issues any check to apply on account or for value, knowing
at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its
presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been
dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by
imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount
of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the
court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or
draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within
a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such
drawer shall be liable under this Act.

In Wong v. Court of Appeals,4 the Court ruled that the 90-day period provided in the law is not an element of the offense. Neither does it discharge
petitioner from his duty to maintain sufficient funds in the account within a reasonable time from the date indicated in the check. According to
current banking practice, the reasonable period within which to present a check to the drawee bank is six months. Thereafter, the check becomes
stale and the drawer is discharged from liability thereon to the extent of the loss caused by the delay.

Thus, Cenizal’s presentment of the check to the drawee bank 120 days (four months) after its issue was still within the allowable period. Petitioner
was freed neither from the obligation to keep sufficient funds in his account nor from liability resulting from the dishonor of the check.

Applicability of the
Best Evidence Rule

Petitioner’s insistence on the presentation of the check in evidence as a condition sine qua non for conviction under BP 22 is wrong. Petitioner
anchors his argument on Rule 130, Section 3, of the Rules of Court, otherwise known as the best evidence rule. However, the rule applies only where
the content of the document is the subject of the inquiry. Where the issue is the execution or existence of the document or the circumstances
surrounding its execution, the best evidence rule does not apply and testimonial evidence is admissible.5

The gravamen of the offense is the act of drawing and issuing a worthless check.6 Hence, the subject of the inquiry is the fact of issuance or
execution of the check, not its content.

Here, the due execution and existence of the check were sufficiently established. Cenizal testified that he presented the originals of the check, the
return slip and other pertinent documents before the Office of the City Prosecutor of Quezon City when he executed his complaint-affidavit during
the preliminary investigation. The City Prosecutor found a prima facie case against petitioner for violation of BP 22 and filed the corresponding
information based on the documents. Although the check and the return slip were among the documents lost by Cenizal in a fire that occurred near
his residence on September 16, 1992, he was nevertheless able to adequately establish the due execution, existence and loss of the check and the
return slip in an affidavit of loss as well as in his testimony during the trial of the case.

Moreover, petitioner himself admited that he issued the check. He never denied that the check was presented for payment to the drawee bank and
was dishonored for having been drawn against insufficient funds.

Presence of the
Elements of the Offense

Based on the allegations in the information,7 petitioner was charged for violating the first paragraph of BP 22. The elements of the offense are:

1. the making, drawing and issuance of any check to apply to account or for value;

2. knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank
for the payment of the check in full upon its presentment; and
 29

3. subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or dishonor of the check for the same reason
had not the drawer, without any valid cause, ordered the bank to stop payment.8

All these elements are present in this case.

Both the trial and appellate courts found that petitioner issued BPI check no. 163255 postdated August 4, 1991 in the amount of P150,000 in
consideration of a loan which he obtained from Cenizal. When the check was deposited, it was dishonored by the drawee bank for having been
drawn against insufficient funds. There was sufficient evidence on record that petitioner knew of the insufficiency of his funds in the drawee bank at
the time of the issuance of the check. In fact, this was why, on maturity date, he requested the payee not to encash it with the promise that he
would replace it with cash. He made this request and assurance seven times but repeatedly failed to make good on his promises despite the
repeated accommodation granted him by the payee, Cenizal.

Notice of Dishonor to Petitioner

And Payment of the Obligation

The trial court found that, contrary to petitioner’s claim, Cenizal’s counsel had informed petitioner in writing of the check’s dishonor and demanded
payment of the value of the check. Despite receipt of the notice of dishonor and demand for payment, petitioner still failed to pay the amount of the
check.

Petitioner cannot claim that he was deprived of the period of five banking days from receipt of notice of dishonor within which to pay the amount of
the check.9 While petitioner may have been given only three days to pay the value of the check, the trial court found that the amount due thereon
remained unpaid even after five banking days from his receipt of the notice of dishonor. This negated his claim that he had already paid Cenizal and
should therefore be relieved of any liability.

Moreover, petitioner’s claim of payment was nothing more than a mere allegation. He presented no proof to support it. If indeed there was
payment, petitioner should have redeemed or taken the check back in the ordinary course of business.10 Instead, the check remained in the
possession of the payee who demanded the satisfaction of petitioner’s obligation when the check became due as well as when the check was
dishonored by the drawee bank.

These findings (due notice to petitioner and nonpayment of the obligation) were confirmed by the appellate court. This Court has no reason to rule
otherwise. Well-settled is the rule that the factual findings of the trial court, when affirmed by the appellate court, are not to be disturbed.11

WHEREFORE, the petition is hereby DENIED. The April 28, 1999 decision and March 27, 2000 resolution of the Court of Appeals in CA-G.R. CR No.
19601 are AFFIRMED.

G.R. No. 152807 August 12, 2003

HEIRS OF LOURDES SAEZ SABANPAN: BERNARDO S. SABANPAN, RENE S. SABANPAN, DANILO S. SABANPAN and THELMA S. CHU; HEIRS OF ADOLFO
SAEZ: MA. LUISA SAEZ TAPIZ, MA. VICTORIA SAEZ LAPITAN, MA. BELEN SAEZ and EMMANUEL SAEZ; and HEIRS OF CRISTINA SAEZ GUTIERREZ: ROY SAEZ
GUTIERREZ and LUIS SAEZ JR., petitioners,
vs.
ALBERTO C. COMORPOSA, HERDIN C. COMORPOSA, OFELIA C. ARIEGO,1 REMEDIOS COMORPOSA, VIRGILIO A. LARIEGO,1a BELINDA M. COMORPOSA and
ISABELITA H. COMORPOSA, respondents.

PANGANIBAN, J.:

The admissibility of evidence should be distinguished from its probative value. Just because a piece of evidence is admitted does not ipso facto mean
that it conclusively proves the fact in dispute.

The Case

Before us is a Petition for Review2 under Rule 45 of the Rules of Court, seeking to set aside the August 7, 2001 Decision and the February 27, 2002
Resolution of the Court of Appeals3 (CA) in CA-GR SP No. 60645. The dispositive portion of the assailed Decision reads as follows:

"WHEREFORE, in view of all the foregoing, the Court hereby AFFIRMS the Decision dated 22 June 2000 rendered by Branch 18 of the
Regional Trial Court of Digos, Davao del Sur, REVERSING and SETTING ASIDE the Decision of the Municipal Trial Court of Sta. Cruz, Davao
del Su[r]."4

The assailed Resolution5 denied petitioners' Motion for Reconsideration.

The Facts

The CA summarized the factual antecedents of the case as follows:

"A [C]omplaint for unlawful detainer with damages was filed by [petitioners] against [respondents] before the Santa Cruz, Davao del Sur
Municipal Trial Court.

"The [C]omplaint alleged that Marcos Saez was the lawful and actual possessor of Lot No. 845, Land 275 located at Darong, Sta. Cruz,
Davao del Sur with an area of 1.2 hectares. In 1960, he died leaving all his heirs, his children and grandchildren.

"In 1965, Francisco Comorposa who was working in the land of Oboza was terminated from his job. The termination of his employment
caused a problem in relocating his house. Being a close family friend of [Marcos] Saez, Francisco Comorposa approached the late Marcos
Saez's son, [Adolfo] Saez, the husband of Gloria Leano Saez, about his problem. Out of pity and for humanitarian consideration, Adolfo
 30

allowed Francisco Comorposa to occupy the land of Marcos Saez. Hence, his nipa hut was carried by his neighbors and transferred to a
portion of the land subject matter of this case. Such transfer was witnessed by several people, among them, Gloria Leano and Noel Oboza.
Francisco Comorposa occupied a portion of Marcos Saez' property without paying any rental.

"Francisco Comorposa left for Hawaii, U.S.A. He was succeeded in his possession by the respondents who likewise did not pay any rental
and are occupying the premises through petitioners' tolerance.

"On 7 May 1998, a formal demand was made upon the respondents to vacate the premises but the latter refused to vacate the same and
claimed that they [were] the legitimate claimants and the actual and lawful possessor[s] of the premises. A [C]omplaint was filed with the
barangay office of Sta. Cruz[,] Davao del Sur, but the parties failed to arrive at an amicable settlement. Thus, the corresponding Certificate
to File Action was issued by the said barangay and an action for unlawful detainer was filed by petitioners against respondents.

"Respondents, in their Answer, denied the material allegations of the [C]omplaint and alleged that they entered and occupied the premises
in their own right as true, valid and lawful claimants, possessors and owners of the said lot way back in 1960 and up to the present time;
that they have acquired just and valid ownership and possession of the premises by ordinary or extraordinary prescription, and that the
Regional Director of the DENR, Region XI has already upheld their possession over the land in question when it ruled that they [were] the
rightful claimants and possessors and [were], therefore, entitled to the issuance of a title.

"The Municipal Trial Court of Sta. Cruz, Davao del Sur rendered judgment in favor of petitioners but the Regional Trial Court of Digos, Davao
del Sur, on appeal, reversed and set aside the said decision. x x x"6

Ruling of the Court of Appeals

Affirming the Regional Trial Court (RTC), the CA upheld the right of respondents as claimants and possessors. The appellate court held that --
although not yet final -- the Order issued by the regional executive director of the Department of Environment and Natural Resources (DENR)
remained in full force and effect, unless declared null and void. The CA added that the Certification issued by the DENR's community environment
and natural resources (CENR) officer was proof that when the cadastral survey was conducted, the land was still alienable and was not yet allocated
to any person.

According to the CA, respondents had the better right to possess alienable and disposable land of the public domain, because they have sufficiently
proven their actual, physical, open, notorious, exclusive, continuous and uninterrupted possession thereof since 1960. The appellate court deemed
as self-serving, and therefore incredible, the Affidavits executed by Gloria Leano Saez, Noel Oboza and Paulina Paran.

Hence, this Petition.7

The Issue

In their Memorandum, petitioners raise the following issues for the Court's consideration:

"I

Did the Court of Appeals gravely abuse its discretion and [err] in sustaining the ruling of the Regional Trial Court giving credence to the
Order dated 2 April 1998 issued by the regional executive director?

"II

Did the Court of Appeals gravely abuse its discretion and err in sustaining the Regional Trial Court's ruling giving weight to the CENR
Officer's Certification, which only bears the facsimile of the alleged signature of a certain Jose F. Tagorda and, [worse], it is a new matter
raised for the first time on appeal?

"III

Did the Court of Appeals gravely abuse its discretion and err in holding that the land subject matter of this case has been acquired by
means of adverse possession and prescription?

"IV

Did the Court of Appeals gravely abuse its discretion, and err in declaring that, 'neither is there error on the part of the Regional Trial Court,
when it did not give importance to the affidavits by Gloria Leano Saez, Noel [Oboza], and Paulina Paran for allegedly being self serving?'"8

To facilitate the discussion, the fourth and the third issues shall be discussed in reverse sequence.

The Court's Ruling

The Petition has no merit.

First Issue:
The DENR Order of April 2, 1998

Petitioners claim that the reliance of the CA upon the April 2, 1998 Order issued by the regional director of the DENR was erroneous. The reason was
that the Order, which had upheld the claim of respondents, was supposedly not yet final and executory. Another Order dated August 23,
1999,9 issued later by the DENR regional director, allegedly held in abeyance the effectivity of the earlier one.
 31

Under the Public Land Act,10 the management and the disposition of public land is under the primary control of the director of lands11 (now the
director of the Lands Management Bureau or LMB),12 subject to review by the DENR secretary.13 As a rule, then, courts have no jurisdiction to
intrude upon matters properly falling within the powers of the LMB.

The powers given to the LMB and the DENR to alienate and dispose of public land does not, however, divest regular courts of jurisdiction over
possessory actions instituted by occupants or applicants to protect their respective possessions and occupations.14 The power to determine who has
actual physical possession or occupation of public land and who has the better right of possession over it remains with the courts.15 But once the
DENR has decided, particularly through the grant of a homestead patent and the issuance of a certificate of title, its decision on these points will
normally prevail.16

Therefore, while the issue as to who among the parties are entitled to a piece of public land remains pending with the DENR, the question of
recovery of possession of the disputed property is a matter that may be addressed to the courts.

Second Issue:
CENR Officer's Certification

Petitioners contend that the CENR Certification dated July 22, 1997 is a sham document, because the signature of the CENR officer is a mere
facsimile. In support of their argument, they cite Garvida v. Sales Jr.17 and argue that the Certification is a new matter being raised by respondents
for the first time on appeal.

We are not persuaded.

In Garvida, the Court held:

"A facsimile or fax transmission is a process involving the transmission and reproduction of printed and graphic matter by scanning an
original copy, one elemental area at a time, and representing the shade or tone of each area by a specified amount of electric current. x x
x"18

Pleadings filed via fax machines are not considered originals and are at best exact copies. As such, they are not admissible in evidence, as there is no
way of determining whether they are genuine or authentic.19

The Certification, on the other hand, is being contested for bearing a facsimile of the signature of CENR Officer Jose F. Tagorda. The facsimile referred
to is not the same as that which is alluded to in Garvida. The one mentioned here refers to a facsimile signature, which is defined as a signature
produced by mechanical means but recognized as valid in banking, financial, and business transactions.20

Note that the CENR officer has not disclaimed the Certification. In fact, the DENR regional director has acknowledged and used it as reference in his
Order dated April 2, 1998:

"x x x. CENR Officer Jose F. Tagorda, in a 'CERTIFICATION' dated 22 July 1997, certified among others, that: x x x per records available in his
Office, x x x the controverted lot x x x was not allocated to any person x x x."21

If the Certification were a sham as petitioner claims, then the regional director would not have used it as reference in his Order. Instead, he would
have either verified it or directed the CENR officer to take the appropriate action, as the latter was under the former's direct control and supervision.

Petitioners' claim that the Certification was raised for the first time on appeal is incorrect. As early as the pretrial conference at the Municipal Trial
Court (MTC), the CENR Certification had already been marked as evidence for respondents as stated in the Pre-trial Order.22 The Certification was not
formally offered, however, because respondents had not been able to file their position paper.

Neither the rules of procedure23 nor jurisprudence24 would sanction the admission of evidence that has not been formally offered during the trial.
But this evidentiary rule is applicable only to ordinary trials, not to cases covered by the rule on summary procedure -- cases in which no full-blown
trial is held.25

Third Issue:
Affidavit of Petitioners' Witnesses

Petitioners assert that the CA erred in disregarding the Affidavits of their witnesses, insisting that the Rule on Summary Procedure authorizes the use
of affidavits. They also claim that the failure of respondents to file their position paper and counter-affidavits before the MTC amounts to an
admission by silence.

The admissibility of evidence should not be confused with its probative value. Admissibility refers to the question of whether certain pieces of
evidence are to be considered at all, while probative value refers to the question of whether the admitted evidence proves an issue.26 Thus, a
particular item of evidence may be admissible, but its evidentiary weight depends on judicial evaluation within the guidelines provided by the rules of
evidence.27

While in summary proceedings affidavits are admissible as the witnesses' respective testimonies, the failure of the adverse party to reply does not
ipso facto render the facts, set forth therein, duly proven. Petitioners still bear the burden of proving their cause of action, because they are the ones
asserting an affirmative relief.28

Fourth Issue:
Defense of Prescription

Petitioners claim that the court a quo erred in upholding the defense of prescription proffered by respondents. It is the former's contention that
since the latter's possession of the land was merely being tolerated, there was no basis for the claim of prescription. We disagree.
 32

For the Court to uphold the contention of petitioners, they have first to prove that the possession of respondents was by mere tolerance. The only
pieces of evidence submitted by the former to support their claim were a technical description and a vicinity map drawn in accordance with the
survey dated May 22, 1936.29 Both of these were discredited by the CENR Certification, which indicated that the contested lot had not yet been
allocated to any person when the survey was conducted.30 The testimony of petitioners' witnesses alone cannot prevail over respondents' continued
and uninterrupted possession of the subject lot for a considerable length of time.

Furthermore, this is an issue of fact that cannot, as a rule, be raised in a petition for review under Rule 45.31

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioners.

G.R. No. 177505 November 27, 2008

HEIRS OF GORGONIO MEDINA, namely: LEONOR T. MEDINA, RAMON T. MEDINA, ABIEL T. MEDINA, ILUDIVINA M. ROSARI, CONCEPCION DE LA CRUZ,
LEONOR M. BAKKER, SAMUEL T. MEDINA, VICTOR T. MEDINA, TERESITA M. SABADO, JOSEFINA M. CANAS and VERONICA M. DE GUZMAN, petitioners,
vs.
BONIFACIO NATIVIDAD, represented by PHILIP M. NATIVIDAD, respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks to set aside the Decision1 of the Court
of Appeals dated 20 November 2006 in CA-G.R. CV No. 82160 affirming with modification the Decision2 of Branch 33 of the Regional Trial Court (RTC)
of Guimba, Nueva Ecija, in Civil Case No. 1165-G and its Resolution3 dated 16 April 2007 denying petitioners’ motion for reconsideration.

The factual antecedents are as follows:

On 16 May 1969, Tirso Medina, Pacifico M. Ruiz, Gorgonio D. Medina, Vivencio M. Ruiz, and Dominica Medina, co-owners of a parcel of land (Lot
1199, Cad-162, Guimba Cadastre, plan Ap-23418) situated in Poblacion, Municipality of Guimba, Province of Nueva Ecija, containing an area of two
thousand three hundred thirty nine (2,339) square meters, agreed to divide and allot for themselves the said land. A sketch 4 signed by the co-owners
showed the respective portions of land allotted to each. Gorgonio D. Medina received two portions of said land. One portion was allotted to him
alone, while the second portion was allotted to him together with Tirso Medina and Pacifico M. Ruiz. This second portion is labeled as "Gorgonio
Medina, Tirso Medina and Pacifico M. Ruiz" which is adjacent to the portion labeled as "Dominica Medina."

On 29 March 1972, Gorgonio D. Medina, predecessor-in-interest of petitioners, executed a Deed of Absolute Sale5 whereby he sold to respondent
Bonifacio Natividad for P2,000.00 his share (1/3) in the second portion of land including the improvements found therein.

Subsequently, a case for Partition with Damages, docketed as Civil Case No. 781-G, was filed before the RTC of Guimba, Nueva Ecija, Branch 33, by
Tirso Medina against the co-owners of Lot 1199, among whom are Gorgonio Medina and Bonifacio Natividad. Bonifacio Natividad had likewise
already bought the share of Dominica Medina in the land.

The parties entered into a compromise agreement which they submitted to the Court. On 20 November 1989, the RTC approved the agreement and
rendered its decision based on the same.6The Compromise Agreement as quoted by the Court reads:

COMPROMISE AGREEMENT

COME NOW the parties, assisted by their respective counsel(s), and unto this Honorable Court respectfully submit this Compromise
Agreement in full and final settlement of their differences, to wit:

1. The parties herein are the exclusive co-owners of that certain parcel of land located at the Poblacion, Guimba, Nueva Ecija, known as Lot
1199, Guimba Cadastre and more particularly described as follows:

A parcel of land (Lot 1199, of the Cadastral Survey of Guimba Cad. 162, plan Ap-23418, L.R. Case No. G-51, L.R.C. Record No. N-40711),
situated in the Poblacion, Municipality of Guimba, Province of Nueva Ecija. x x x containing an area of TWO THOUSAND THREE HUNDRED
AND THIRTY NINE (2,339) SQUARE METERS, more or less. x x x.

xxxx

2. The herein parties recognize and acknowledge that their respective shares in the property aforementioned as appearing in the aforesaid
Original Certificate of Title No. 130366 have been modified by agreement between them to allot a portion thereof to their co-owner,
Vivencio M. Ruiz, to compensate for valuable services rendered to the parties vis-à-vis the said property, separate and apart from his
rightful share therein as participating heir of Maria Medina;

3. The plaintiff Tirso Medina hereby withdraws any/all statements appearing on record which he may have made in said case in the course
of his testimony therein, and hereby asks the Honorable Court that said statements be expunged or withdrawn from the record;

4. The foregoing considered, the parties have determined that it is to their mutual convenience and advantage, and in accord with their
common desire to preserve and maintain the existing family harmony and solidarity to terminate their present community of ownership in
the property aforementioned by mutual agreement and adjudication, in the manner appearing in the Sketch Plan of Partition attached as
an integral part hereof as Annex "A" where the property is subdivided into Lot 1, 2, 3, 4, 5, and 6 and adjudicated, as follows:
 33

a. To Bonifacio Natividad, Lot No. 1, consisting of 480 square meters, more or less, representing the interests of Dominica
Medina which was sold to him per document of "Sale of Rights, Waiver and Renunciation" appearing as Doc. No. 367; Page No.
75; Book No. 10; Series of 1968 in the Notarial Register of Atty.

b. To VIVENCIO M. RUIZ, Lot No. 3 consisting of 370.21 square meters, more or less, as compensation for valuable services
rendered; free and clear from any/all liens or encumbrances whatsoever or from the claims of any person whomsoever, except
the present tenant/s thereon;

c. To the heirs of MARIA MEDINA, Lot No. 2 consisting of 370.21 square meters, more or less, without prejudice to sales and
dispositions already made by the respective heirs of their interests and participations therein;

d. To TIRSO MEDINA, Lot No. 4 consisting of 369.29 square meters, more or less;

e. To the heirs of PACIFICO M. RUIZ, Lot No. 5 consisting of 369.29 square meters, more or less, and

f. To GORGONIA MEDINA, Lot No. 6, consisting of 369.29 square meters, more or less.7

On 8 October 1991, the trial court issued an order supplementing its decision dated 20 November 1989 which reads in part:

[T]hat the parties thereafter, engaged the services of one common geodetic engineer in the person of Rolly Francisco to conduct the
survey and effect the subdivision of Lot 1199, which was subdivided into Lots A, B, C, D, E, and F, the area of which appears, thus:

Lot 1199-A with an area of 371 sq. ms., which lot now corresponds to Lot No. 4 adjudicated to Tirso Medina;

Lot 1199-B with an area of 371 sq. ms., which lot now corresponds to Lot No. 5 adjudicated to Pacifico Ruiz;

Lot 1199-C with an area of 371 sq. ms., which lot now corresponds to Lot No. 6 adjudicated to Gorgonio Medina;

Lot 1199-D with an area of 482 sq. ms., which lot now corresponds to Lot No. 1 adjudicated to Bonifacio Natividad;

Lot 1199-E with an area of 372 sq. ms., which lot now corresponds to Lot No. 2 adjudicated to Heirs of Maria Medina; and

Lot 1199-F with an area of 372 sq. ms., which lot now corresponds to Lot No. 3 adjudicated to Vivencio M. Ruiz; that in this
subdivision made by the geodetic engineer, there was no change in the designation of the particular places adjudicated to the
parties, except the change in areas allotted after the actual survey made.

WHEREFORE, finding the motion to be in order, the Court resolves to grant the same and hereby orders, that:

Lot 1199-A with an area of 371 sq. ms. is Lot 4, decision, adjudicated to Tirso Medina;

Lot 1199-B with an area of 371 sq. ms. is Lot 5, decision, adjudicated to Pacifico Ruiz;

Lot 1199-C with an area of 371 sq. ms. is Lot 6, decision, adjudicated to Gorgonio Medina;

Lot 1199-D with an area of 482 sq. ms. is Lot 1, decision, adjudicated to Bonifacio Natividad;

Lot 1199-E with an area of 372 sq. ms. is Lot 2, decision, adjudicated to Heirs of Maria Medina;

Lot 1199-F with an area of 372 sq. ms. is Lot 3, decision, adjudicated to Vivencio M. Ruiz.

This Order supplements the Decision dated November 20, 1989.8

Pursuant to the court-approved partition, Lot 1199-C, measuring 371 square meters, was registered in the name of Gorgonio Median for which
Transfer Certificate of Title (TCT) No. NT-230248 of the Registry of Deeds for the Province of Nueva Ecija was issued to him.9

On 11 June 2001, Bonifacio Natividad, thru his alleged Attorney-In-Fact, Philip M. Natividad, filed before the RTC of Guimba, Nueva Ecija, Branch 31, a
Complaint for Annulment of TCT No. NT-230248 and Damages.10 It impleaded as respondents Abiel Medina and Veronica de Guzman who are
occupying the said land. Bonifacio asks, among other things, that 1/3 of said land be surrendered to him because he had bought the same from
Gorgonio Medina. In the Answer11 filed by Abiel Medina and Veronica de Guzman, they argued, inter alia, that Philip Natividad had no legal capacity
to sue because the Special Power of Attorney annexed to the Complaint did not grant him such authority. They further added that the Complaint
failed to implead all the parties-in-interest considering that the ownership of the land covered by TCT No. NT-230248 had already passed to eleven
heirs of Gorgonio Medina.

Bonifacio, thru Philip, filed a Motion for Bill of Particulars12 praying that an order be issued by the court directing Abiel Medina and Veronica de
Guzman to give the names and present addresses of all the heirs of Gorgonio Medina. Said motion was opposed.13 In an order dated 15 October
2001, the trial court granted the motion.14 Defendants complied with the court’s order and submitted the names and addresses of all the heirs of
Gorgonio Medina.15

On 7 January 2002, Bonifacio filed a Motion for Leave to Admit Amended Complaint with prayer that summons upon eight heirs be made through
publication.16 The Amended Complaint impleaded all the heirs of Gorgonio Medina (petitioners herein). In said amended complaint, a special power
of attorney17 dated 21 September 2001 allegedly executed by Bonifacio Natividad in the State of Washington, United States of America, and
acknowledged before Phyllis Perry, a Notary Public of the State of Washington, USA, was attached authorizing Philip Natividad to:
 34

1. To file all appropriate cases in court against the heirs of Gorgonio Medina for the recovery of the lot that I purchased from said Gorgonio
Medina by virtue of Deed of Absolute Sale executed on March 29, 1972 and notarized by Atty. Inocencio B. Garampil under Doc. No. 435,
Page No. 87, Book No. 1, Series of 1972, which lot is now titled in the name of Gorgonio Medina under Transfer Certificate of Title No. NT-
230248;

2. To institute all legal actions/cases in court for the annulment of said Transfer Certificate of Title No. NT -230248 which now covers the lot
I bought from Gorgonio Medina;

3. To represent me in all proceedings/hearings of the above-mentioned case/s up to its termination;

4. To enter into a fair and reasonable compromise agreement and do all acts for the protection and preservation of my rights and interest
over the above-mentioned lot;

5. To negotiate/transact with all persons, secure and sign all necessary documents for the attainment of the above purposes.

In an Order dated18 30 January 2002, the trial court approved the motion and admitted the Amended Complaint. It directed the issuance of the
corresponding summons, the same to be published in a newspaper of general circulation for three consecutive weeks. As to plaintiff’s authority to
sue, the trial court ruled that said issue had been settled by the special power of attorney attached to the Amended Complaint.

On 17 May 2002, the heirs of Gorgonio Medina filed a Motion to Dismiss19 which the trial court denied on 20 August 2002.20 On 10 September 2002,
the heirs filed their Answer raising the following defenses: prescription, laches, lack of cause of action, lack of legal capacity to sue by Attorney-in-
Fact, indefeasibility of TCT No. NT-230248 and lack of jurisdiction over the case for failure of the plaintiff to comply with the mandatory requirement
of the Katarungang Pambarangay. Plaintiff filed his Reply dated 18 September 2002 specifically denying the allegations contained in the Answer with
Compulsory Counterclaim.21

During the Pre-Trial, the parties stipulated the following facts and issues:

a. TCT No. N-230248 in the name of Gorgonio Medina covers 371 square meters. This title was one of the titles issued as transfer from
Original Certificate of Title No. 130366.22

b. TCT No. 230248 came into being by virtue of the decision in Civil Case No. 781-G, a case of partition among Gorgonio Medina and his co-
heirs decided by RTC Branch 33.

c. The late Gorgonio Medina executed a Deed of Absolute Sale over 1/3 portion of his share in a parcel of land (Lot 1199, CAD-162 Guimba
Cadastre) owned in common by him and his co-heirs.

d. The land subject of the deed of sale is not the one covered by TCT No. 230248.

Issues:

1. Whether the deed of sale of sale may be given effect notwithstanding the fact that the subject thereof is different from the
portion covered by TCT No. 230248.

2. Whether Mr. Philip Natividad is duly authorized to represent his father, Bonifacio Natividad in this case.23

The parties manifested that after they shall have filed their respective memoranda, the case shall be submitted for decision.

In its decision dated 10 December 2003, the trial court ruled in favor of Bonifacio Natividad. The decretal portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff ordering the defendants to convey to the plaintiff 1/3 portion of the lot
covered by TCT No. 230248 together with the improvements thereon and to account for, and deliver to the plaintiff the income derived
therefrom from the institution of this case up to the execution of this decision.

No pronouncement as to damages there being no reservation made by the plaintiff to present evidence thereof.24

On the issue of Philip Natividad’s authority to represent his father, the court ruled that it was convinced that Philip was authorized to represent his
father by virtue of a notarized special power of attorney executed by Bonifacio attached to the amended complaint. It explained that the document
was a public document as defined under Section 20, paragraph (a) of Rule 132 of the Rules of Court, the same having been notarized by a notary
public for the State of Washington, USA. In the absence of any evidence to show that said special power of attorney was falsified, it was sufficient
authority for Mr. Natividad to represent his father.

The trial court likewise ruled that the deed of absolute sale executed by Gorgonio Medina in favor of Bonifacio Natividad may be given effect
notwithstanding the fact that the portion of Lot 1199 specified as its object was different from the portion adjudicated to Gorgonio Medina. It
declared that the 1/3 portion of the land covered by TCT No. NT-230248 shall be deemed the object of the deed of sale. It agreed with Bonifacio that
what was sold by Gorgonio Medina to him (Bonifacio) was his share, right and participation in the land known as Lot 1199. At the time of the sale, Lot
1199 was not yet divided. Gorgonio Medina specified a portion of Lot 1199, expecting that portion to be adjudicated to him, but his expectation did
not materialize because a different portion was adjudicated to him during the partition. It added that justice demanded that a portion of what was
adjudicated to him be considered as the object of the deed of sale.

The trial court further ruled that prescription and laches did not set in. Since there was an express trust created between Gorgonio Medina and
Bonifacio Natividad, the action to compel the defendants to convey the property to Bonifacio did not prescribe. It explained that it is only when the
trustee repudiates the trust that the prescriptive period of 10 years commences to run. In the instant case, Gorgonio Medina (trustee) repudiated
 35

the trust on 5 July 1993 when TCT No. NT-230248 was issued in his name. Thus, the filing of the complaint on 11 June 2001 was well within the ten-
year prescriptive period.

On 22 December 2003, the petitioner-heirs of Gorgonio Medina filed a Notice of Appeal informing the trail court that they were appealing the
decision to the Court of Appeals.25 A Notice of Appeal having been seasonably filed by the petitioners, the entire records of the case were forwarded
to the Court of Appeals.26

On 13 January 2004, Bonifacio Natividad filed a Motion for Execution Pending Appeal27 which the trial court denied, it having lost jurisdiction over
the case because the appeal was already perfected when the motion was filed.28

On 20 November 2006, the Court of Appeals rendered its decision affirming with modification the decision of the trial court. It disposed of the case
as follows:

WHEREFORE, the Decision of the RTC, Branch 33, Guimba, Nueva Ecija, dated December 10, 2003, is hereby AFFIRMED with the
MODIFICATION ordering the defendants-appellants to convey to plaintiff-appellee an area equivalent to 90 square meters of the land
covered by TCT No. NT-230248.29

The appellate court affirmed the findings of the trial court, but ruled that the trust established between the parties was an implied or constructive
trust, and not an express trust. It added that what should be conveyed to Bonifacio Natividad was only 1/3 of 270 square meters or 90 square
meters, and not 1/3 of 371 square meters since what was sold to him was only a part of one of the two portions owned by Gorgonio Medina in the
entire lot. Finally, it declared that the contention that the Complaint should have been dismissed for lack of cause of action, considering that the
Special Power of Attorney executed abroad by Bonifacio Natividad in favor of his son was not properly authenticated before a consular officer, put a
premium on technicalities at the expense of substantial justice. Litigation, it said, should, as much as possible, be decided on the merits and not on
technicalities.

Petitioners filed a Motion for Reconsideration30 which the Court of Appeals denied in a resolution dated 16 April 2007.31

Hence, the instant petition raising the following issues:

WHETHER OR NOT THE COMPROMISE AGREEMENT THAT THE TRIAL COURT APPROVED IN CIVIL CASE NO. 781-G NOVATED THE DEED OF ABSOLUTE
SALE DATED 29 MARCH 1972 BETWEEN GORGONIO MEDINA AND BONIFACIO NATIVIDAD.
WHETHER OR NOT BONIFACIO NATIVIDAD IS ESTOPPED BY LACHES.
WHETHER OR NOT THE REGISTRATION OF LOT NO. 1199-C IN THE NAME OF GORGONIO MEDINA WAS IN FRAUD OF BONIFACIO NATIVIDAD.
WHETHER OR NOT A CONSTRUCTIVE TRUST WAS CREATED BETWEEN GORGONIO MEDINA AND BONIFACIO NATIVIDAD.
WHETHER OR NOT BONIFACIO NATIVIDAD’S CAUSE OF ACTION HAS ALREADY PRESCRIBED.
WHETHER OR NOT THE COMPLAINT STATES A CAUSE OF ACTION.

Among the issues raised by petitioners the last is what we shall first tackle. Petitioners contend that the Court of Appeals committed a very grave
error in not finding that the respondent was without any cause of action. Petitioners argue:

The Complaint in this case was instituted by Philip M. Natividad in the name of Bonifacio Natividad upon the strength of a Special Power of
Attorney executed by the latter in Washington, U.S.A. While the document appears to have been acknowledged before Phyllis Perry, a
Notary Public for the jurisdiction of the State of Washington, U.S.A., it was not presented before a Philippine Consular Officer for the
requisite authentication.

The Revised Rules on Evidence require that a document acknowledged before a notary public being a public document, such record if kept
in a foreign country, should be accompanied with a certificate that such officer has the custody thereof made by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent or by an officer in the foreign service of the Philippines stationed
in the foreign country in which the record is kept, authenticated by the seal of his office. In the absence of the requisite certification and
authentication of the public document, the same cannot be proved and, therefore, inadmissible as evidence.

Bonifacio Natividad’s Special Power of Attorney not having been duly certified and authenticated, it cannot be duly proved. It is, therefore,
deemed as not having been executed for purposes of instituting an action on his behalf. Without any valid authority to institute the action
on behalf of his father, Philip Natividad is deemed to have instituted it on his own. Philip Natividad not being a party to the Deed of
Absolute Sale between Gorgonio Medina and Bonifacio Natividad, he is undoubtedly not the real party in interest because he does not
have any material interest in the contract which is the source of Bonifacio Natividad’s cause of action. He does not stand to be benefited or
injured by a judgment in the suit and neither is he entitled to the avails of the suit.

Not being the real party in interest, and being deemed to have brought the action on his own, Philip M. Natividad has no cause of action.32

The trial court was convinced that Philip Natividad was authorized by his father (Bonifacio) in this case by virtue of the special power of attorney that
the latter issued. The special power of attorney, it claims, is a public document, the same having been notarized by a notary public of the State of
Washington, USA. It said that there being no evidence showing that said document had been falsified, the same was sufficient authority for Philip to
represent his father. The Court of Appeals considered the fact that the special power of attorney was not properly authenticated before a consular
office to be a mere technicality and could not be the basis for the dismissal of the complaint for lack of cause of action.

On his part, respondent said the notarized special power of attorney which he appended to the complaint is a public document. It carries with it the
presumption of regularity and any suspicion on the authenticity and due execution thereof cannot stand against said presumption absent evidence
which is clear and convincing.

The question to be answered is: Is the Special Power of Attorney supposedly authorizing Philip Natividad to file the instant case in behalf of his father
admissible in evidence?
 36

In Lopez v. Court of Appeals,33 we have ruled that a special power of attorney executed in a foreign country is, generally, not admissible in evidence
as a public document in our courts. In said case, we said:

Is the special power of attorney relied upon by Mrs. Ty a public document? We find that it is. It has been notarized by a notary public or by
a competent public official with all the solemnities required by law of a public document. When executed and acknowledged in the
Philippines, such a public document or a certified true copy thereof is admissible in evidence. Its due execution and authentication need
not be proven unlike a private writing.

Section 25,34 Rule 132 of the Rules of Court provides –

Sec. 25. Proof of public or official record. – An official record or an entry therein, when admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if
the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a secretary of embassy or legation, consul general, consul, vice consul, or consular agent or
by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the
seal of his office.

From the foregoing provision, when the special power of attorney is executed and acknowledged before a notary public or other competent
official in a foreign country, it cannot be admitted in evidence unless it is certified as such in accordance with the foregoing provision of the
rules by a secretary of embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record is kept of said public document and authenticated by the seal of his office. A
city judge-notary who notarized the document, as in this case, cannot issue such certification.

Considering that the record of the case does not disclose any compliance with the provisions of Section 25, Rule 132 of the Rules of Court
on the part of the petitioner, the special power of attorney in question is not admissible in evidence. As such, Mrs. Priscilla L. Ty cannot
lawfully prosecute the case against the private respondents in the name of her principal as her authority through a special power of
attorney had not been duly established in evidence. The litigation was not commenced by the real party-in-interest or by one duly
authorized by the said party.

This being so, the Metropolitan Trial Court, the Regional Trial Court and the Court of Appeals never acquired jurisdiction over the person of
the real party-in-interest – Angelita Lopez. For lack of the requisite jurisdiction, all the proceedings in the said courts are null and void ab
initio. All proceedings therein should be and are hereby set aside.

Accordingly, it is Our considered opinion, and We so hold, that a special power of attorney executed before a city judge-public notary in a
foreign country, without the certification or authentication required under Section 25, Rule 132 of the Rules of Court, is not admissible in
evidence in Philippine courts. (Emphasis supplied.)

In the case under consideration, the supposed special power of attorney involved was executed and acknowledged before Phyllis Perry, a Notary
Public of the State of Washington, USA. This being the case, a certification or authentication, as required by Section 25 (now Section 24), Rules of
Court, by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any other officer in the foreign service of
the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office, is required. A notary public in a
foreign country is not one of those who can issue the required certificate.

The records are bereft of evidence showing that there was compliance with Section 25 (now Section 24). Non-compliance therewith will render the
special power of attorney not admissible in evidence. Not being duly established in evidence, the special power of attorney cannot be used by Philip
Natividad to represent his father, Bonifacio Natividad, in this legal action against the petitioners. It is thus clear that this case was not filed by the real
party-in-interest (Bonifacio) or by one duly authorized by said party. Not being a real party-in-interest and sans the authority to pursue the case,
Philip Natividad could not have validly commenced this case. The special power of attorney executed before a notary public in a foreign country
without the requirements mentioned in Section 25 (now Section 24) of the Rules of Court cannot be admitted in evidence before Philippine courts.

Both lower courts and respondent’s contention that the lack of consular authentication is a mere technicality that can be brushed aside in order to
uphold substantial justice, is untenable. The failure to have the special power of attorney authenticated is not merely a technicality -- it is a question
of jurisdiction. In Lopez, we pronounced that jurisdiction over the person of the real party-in-interest was never acquired by the courts. As a result, all
proceedings in the lower courts were declared null and void ab initio and thus set aside.

In the case before us, the Regional Trial Court and the Court of Appeals did not acquire jurisdiction over the person of Bonifacio Natividad. Following
our pronouncement in Lopez, all proceedings before these courts are voided and set aside. In light of this, we find no need to discuss the other issues
raised. WHEREFORE, premises considered, the instant petition is GRANTED. All the proceedings before the Regional Trial Court of Guimba, Nueva
Ecija, Branch 33 (Civil Case No. 1165-G) and the Court of Appeals (CA-G.R. CV No. 82160) are hereby declared void, and the case is hereby DISMISSED.
No costs.