G.R. No.

107062 February 21, 1994 PHILIPPINE PRYCE ASSURANCE CORPORATION, petitioner,

vs.THE COURT OF APPEALS, (Fourteenth Division) and GEGROCO, INC., respondents.

FACTS: Gegroco, Inc filed a collection suit against petitioner, Interworld Assurance Corporation (now
Philippine Pryce Assurance Corporation. The complaint alleged that Phil Pryce issued two surety bonds
in behalf of its principal Sagum General Merchandise for 500k and 1M, respectively.. Phil Pryce admitted
having executed the said bonds, but denied liability because allegedly 1) the checks which were to pay
for the premiums bounced and were dishonored hence there is no contract to speak of between
petitioner and its supposed principal; and 2) that the bonds were merely to guarantee payment of its
principal's obligation, thus, excussion is necessary. Phil Pryce filed a "Motion with Leave to Admit Third-
Party Complaint" with the Third-Party Complaint attached. When the case was called for pre-trial
conference on February 1, 1989, petitioner was again nor presented by its officer or its counsel, despite
being duly notified. Hence, upon motion of respondent, petitioner was considered as in default and
respondent was allowed to present evidence ex-parte

.RTC ruled in favor of Gegroco Inc and CA affirmed RTC Hence this appeal, ISSUE: W/N Phil Pryce. Should
be liable for the surety bond that it issued as payment for the premium HELD: Yes, Relying on Section 1,
Rule 20 of the Rules of court, petitioner argues that since the last pleading, which was supposed to be
the third-party defendant's answer has not been filed, the case is not yet ripe for pre-trial. This
argument must fail on three points.

First,

No answer to the third party complaint is forthcoming as petitioner never initiated the service of
summons on the third party defendant Moreover, we observed that all copies of notices and orders
issued by the court for petitioner's counsel were returned with the notation "Return to Sender,
Unclaimed." Yet when he chose to, he would appear in court despite supposed lack of notice.

Second,

In the regular course of events, the third-party defendant's answer would have been regarded as the
last pleading referred to in Sec. 1, Rule 20. However, petitioner cannot just disregard the court's order to
be present during the pre-trial and give a flimsy excuse, such as that the answer has yet to be filed.. We
have said that in those instances where a party may not himself be present at the pre-trial, and another
person substitutes for him, or his lawyer undertakes to appear not only as an attorney but in
substitution of the client's person, it is imperative for that representative or the lawyer to have "special
authority" to enter into agreements which otherwise only the client has the capacity to make.

Third,

The court of Appeals properly considered the third-party complaint as a mere scrap of paper due to
petitioner's failure to pay the requisite docket fees. It is really irrelevant in the instant case whether the
ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion or that in Manchester Development Corp. v. C.A.
was applied. Sun Insurance and Manchester are mere reiteration of old jurisprudential pronouncements
on the effect of non-payment of docket fees. In previous cases, we have consistently ruled that the court
cannot acquire jurisdiction over the subject matter of a case, unless the docket fees are paid. Moreover,
the principle laid down in Manchester could have very well been applied in Sun Insurance. We then said:
The principle in Manchester [Manchester Development Corp. v. C.A., 149 SCRA 562 (1987)] could very
well be applied in the present case. The pattern and the intent to defraud the government of the docket
fee due it is obvious not only in the filing of the original complaint but also in the filing of the second
amended complaint.

xxx xxx xxx In the present case, a more liberal interpretation of the rules is called for considering
that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules
by paying the additional docket fees as required. The promulgation of the decision in
Manchester must have had that sobering influence on private respondent who thus paid the
additional docket fee as ordered by the respondent court. It triggered his change of stance by
manifesting his willingness to pay such additional docket fees as may be ordered. It should be
remembered that both in Manchester and Sun Insurance plaintiffs therein paid docket fees
upon filing of their respective pleadings, although the amount tendered were found to be
insufficient considering the amounts of the reliefs sought in their complaints. In the present
case, petitioner did not and never attempted to pay the requisite docket fee. Neither is there
any showing that petitioner even manifested to be given time to pay the requisite docket fee, as
in fact it was not present during the scheduled pre-trials. Perforce, it is as if the third-party
complaint was never filed. Finally, there is reason to believe that partitioner does not really have
a good defense. Petitioner hinges its defense on two arguments, namely: a) that the checks
issued by its principal which were supposed to pay for the premiums, bounced, hence there is
no contract of surety to speak of; and 2) that as early as 1986 and covering the time of the
Surety Bond, Interworld Assurance Company (now Phil. Pryce) was not yet authorized by the
insurance Commission to issue such bonds.

The Insurance Code states that:

Sec. 177. The surety is entitled to payment of the premium as soon as the contract of suretyship or bond
is perfected and delivered to the obligor. No contract of suretyship or bonding shall be valid and binding
unless and until the premium therefor has been paid, except where the obligee has accepted the bond,
in which case the bond becomes valid and enforceable irrespective of whether or not the premium has
been paid by the obligor to the surety. . . . (Emphasis added)

The above provision outrightly negates petitioner's first defense. In a desperate attempt to escape
liability, petitioner further asserts that the above provision is not applicable because the respondent
allegedly had not accepted the surety bond, hence could not have delivered the goods to Sagum
Enterprises. This statement clearly intends to muddle the facts as found by the trial court and which are
on record. In the first place, petitioner, in its answer, admitted to have issued the bonds subject matter
of the original action. Secondly, the testimony of Mr. Leonardo T. Guzman, witness for the respondent,
reveals that 2 surety bonds where submitted by Sagum General Merchandise. Likewise attached to the
record are exhibits consisting of delivery invoices addressed to Sagum General Merchandise proving that
parts were purchased, delivered and received. On the other hand, petitioner's defense that it did not
have authority to issue a Surety Bond when it did is an admission of fraud committed against
respondent. No person can claim benefit from the wrong he himself committed. A representation made
is rendered conclusive upon the person making it and cannot be denied or disproved as against the
person relying thereon. WHEREFORE, in view of the foregoing, the decision of the Court of Appeals
dismissing the petition before them and affirming the decision of the trial court and its order denying
petitioner's Motion for Reconsideration are hereby AFFIRMED. The present petition is DISMISSED for
lack of merit.
 G.R. No. 208113, December 02, 2015

DOLORES DIAZ, Petitioner, v. PEOPLE OF THE PHILIPPINES AND LETICIA S. ARCILLA, Respondents.

Facts:

On March 11, 1999, an Information for estafa was filed against petitioner before the Regional Trial Court of
Manila, Branch 5 (RTC) for her alleged failure to return or remit the proceeds from various merchandise
valued at P32,000.00 received by her in trust - i.e., on consignment basis from respondent. During
arraignment, petitioner entered a negative plea. Thereafter, trial on the merits ensued.

The prosecution anchored its case on the testimony of respondent who claimed to be a businesswoman
engaged in the business of selling goods/merchandise through agents (one of whom is petitioner) under the
condition that the latter shall turn over the proceeds or return the unsold items to her a month after they
were entrusted. Respondent averred that on February 20, 1996, she entrusted merchandise consisting of
umbrellas and bath towels worth P35,300.00 to petitioner as evidenced by an acknowledgment receipt dated
February 20, 1996 duly signed by the latter. However, on March 20, 1996, petitioner was only able to remit
the amount of P3,300.00 and thereafter, failed to make further remittances and ignored respondent's
demands to remit the proceeds or return the goods.

In her defense, petitioner admitted having previous business dealings with respondent but not as an agent.
She clarified that she was a client who used to buy purchase order cards (POCs) and gift checks (GCs) from
respondent on installment basis and that, during each deal, she was made to sign a blank sheet of paper
prior to the issuance of POCs and GCs. She further claimed that their last transaction was conducted in
1995, which had long been settled. However, she denied having received P32,000.00 worth of merchandise
from respondent on February 20, 1996.

Issue:

Whether or not the CA committed reversible error in finding petitioner civilly liable to respondent.

Ruling:

The petition lacks merit.

At the outset, it is noteworthy to mention that the extinction of the penal action does not carry with it the
extinction of the civil liability where the acquittal is based on reasonable doubt as only preponderance of
evidence, or "greater weight of the credible evidence," is required. Thus, an accused acquitted of estafa may
still be held civilly liable where the facts established by the evidence so warrant, as in this case.

In upholding the civil liability of petitioner, the CA did not dwell into the purported admission of petitioner
anent her receipt of GCs in the amount of P32,000.00 as found by the RTC. Instead, the CA hinged its
ruling on the acknowledgment receipt dated February 20, 1996, the documentary evidence that respondent
had duly identified and formally offered in the course of these proceedings.

For her part, petitioner denied having entered into the subject transaction with respondent, claiming that
she: (a) had not transacted with respondent as to other goods, except GCs and POCs; (b) was made to sign
two (2) one-half sheets of paper and a trust receipt in blank prior to the issuance of the GCs and POCs, and
(c) was not able to retrieve the same after paying her obligation to respondent.

The Court agrees with the CA.

Petitioner's claim that she was required to sign two (2) one-half sheets of paper and a trust receipt in
blank during her transactions with respondent, which she allegedly failed to retrieve after paying her
obligations, is a bare allegation that cannot be given credence. It is well-settled that "[h]e who alleges a fact
has the burden of proving it and a mere allegation is not evidence."
On the contrary, the CA correctly found that respondent was able to prove by preponderance of evidence
the fact of the transaction, as well as petitioner's failure to remit the proceeds of the sale of the merchandise
worth P32,000.00, or to return the same to respondent in case such merchandise were not sold. This was
established through the presentation of the acknowledgment receipt dated February 20, 1996, which, as the
document's name connotes, shows that petitioner acknowledged receipt from respondent of the listed items
with their corresponding values, and assumed the obligation to return the same on March 20, 1996 if not
sold.

In this relation, it should be pointed out that under Section 3 (d), Rule 131 of the Rules of Court, the legal
presumption is that a person takes ordinary care of his concerns. To this, case law dictates that the natural
presumption is that one does not sign a document without first informing himself of its contents and
consequences. Further, under Section 3 (p) of the same Rule, it is equally presumed that private
transactions have been fair and regular. This behooves every contracting party to learn and know the
contents of a document before he signs and delivers it. The effect of a presumption upon the burden of proof
is to create the need of presenting evidence to overcome the prima facie case created, thereby which, if no
contrary proof is offered, will prevail. In this case, petitioner failed to present any evidence to controvert
these presumptions. Also, respondent's possession of the document pertaining to the obligation strongly
buttresses her claim that the same has not been extinguished. Preponderance of evidence only requires that
evidence be greater or more convincing than the opposing evidence. All things considered, the evidence in
this case clearly preponderates in respondent's favor.

In fine, the CA's ruling on petitioner's civil liability is hereby sustained. In line, however, with the
amendment introduced by the Bangko Sentral ng Pilipinas Monetary Board in BSP-MB Circular No.
799,series of 2013, there is a need to partially modify the same in that the interest accruing from the time
of the finality of this Decision should be imposed at the lower rate of six percent (6%) p.a., and not twelve
percent (12%) p.a. as imposed by the CA.

WHEREFORE, the petition is DENIED. The Decision dated January 30, 2013 and the Resolution dated July
10, 2013 of the Court of Appeals in CA-G.R. CV No. 97571 are hereby AFFIRMED with MODIFICATION,
directing petitioner Dolores Diaz to pay respondent Leticia S. Arcilla the amount of P32,000.00 with legal
interest at the rate of six percent (6%) per annum from July 28, 1998 until full payment.

SO ORDERED.
 MORTGAGE OF A CO-OWNED PROPERTYRURAL BANK OF CABADBARAN, INC., vs. JORGITA A.
MELECIO-YAP ET. AL G.R. No. 178451
FACT:

The Melecio Heirs filed a complaint for declaration of nullity of documents, recovery of possession and
ownership of the mortgaged properties, and damages. The Regional Trial Court declared the real estate
mortgage and the consequential foreclosure proceedings to be valid and binding notwithstanding the
allegation of forgery. The Court of Appeals reversed the RTC decision. The Melecio Heirs inherited a
residential lot, ancestral house and two other structures erected thereon, the administration and
management of which were left to the care of Erna who was then residing in their ancestral home. The
Melecio Heirs purportedly executed a notarized special power of Attorney (SPA) authorizing Erna to
apply for a loan with RBCI and mortgage the subject properties. Erna applied for and was granted a
commercial loan, secured by a Real Estate Mortgage over the subject properties, by RBCI amounting to
200,000.00 with 27% interest rate per annum.

Erna defaulted in the loan payment when it fell due, causing RBCI to extra judicially foreclose the
mortgaged properties. RBCI emerged as the highest bidder in the public auction sale. Erna failed to
redeem the subject properties within the redemption period despite notice. RBCI informed Erna of its
intent to take physical possession of the subject properties, while the actual occupant thereof was
directed to pay rentals to RBCI. The Melecio Heirs demanded RBCI to release the subject properties from
the coverage of Erna’s loan obligation to the extent of their shares and refused to vacate the premises.
R'C( applied for and was issued a writ of possession. The Melecio Heirs filed a complaint in court alleging
that the #$A submitted by Erna was spurious and their signatures appearing thereon were falsified. RBCI
invoked the defense of a mortgagee in good faith whose subsequent ownership and possession of the
subject properties must be respected. RCBI maintained the validity of the #$A and its right to rely on it
being a notarized document.

Issues:

1. Whether Erna validly mortgaged the entire property.

2. Whether RBCI is a mortgagee in good faith.

Ruling:

1. Erna did not validly mortgage the entire property. While Erna, as herself a co5owner, by virtue of Article
678 of the Civil Code, had the right to mortgage or even sell her undivided interest in the said
properties, she, could not, however, dispose of or mortgage the subject properties in their entirety
without the consent of the other co5owners. The settled rule is that persons constituting a mortgage
must be legally authorized for the purpose. In the present case, while Erna appears to be a co5owner of
the mortgaged properties, she made it appear that she was duly authorized to sell the entire properties
by virtue of the notarized SPA. The forged status of the subject SPA alone is already enough for the
Court to declare the real estate mortgage contract null and void but only with respect to the shares of
the other co-owners (i.e., the Melencio Heirs) whose consent thereto was not actually procured by Erna.
Accordingly, the validity of the subject real estate mortgage and the subsequent foreclosure
proceedings therefore conducted in favor of RBCI as the successor5in5interest of Erna, should be limited
 only to the portion which may be allotted to it in the event of partition. Hence, Erna did not validly
mortgage the entire property.

2. No. RBCI’s claim that it is a mortgagee in good faith is untenable. First, the doctrine of mortgagee in
good faith applies only to lands registered under the Torrens system and not to unregistered lands, as
the properties in suit. Second, the principle is inapplicable to banking institutions which are behooved to
exercise greater care and prudence before entering into a mortgage contract. The ascertainment of the
status or condition of properties offered as security for loans must be a standard and an indispensable
part of its operations.

Hence, RBCI is not a mortgagee in good faith.