A.C.

1928 December 19, 1980

In the Matter of the IBP Membership Dues Delinquency of Atty. MARCIAL A.
EDILLION (IBP Administrative Case No. MDD-1), petitioner,

FERNANDO, C.J.:
The full and plenary discretion in the exercise of its competence to reinstate a disbarred
member of the bar admits of no doubt. All the relevant factors bearing on the specific
case, public interest, the integrity of the profession and the welfare of the recreant who
had purged himself of his guilt are given their due weight. Respondent Marcial A. Edillon
was disbarred on August 3, 1978, 1 the vote being unanimous with the late.
Chief Justice Castro ponente. From June 5, 1979, he had repeatedly pleaded that he be
reinstated. The minute resolution dated October 23, 1980, granted such prayer. It was
there made clear that it "is without prejudice to issuing an extended opinion." 2
Before doing so, a recital of the background facts that led to the disbarment of
respondent may not be amiss. As set forth in the resolution penned by the late Chief
Justice Castro: "On November 29. 1975, the Integrated Bar of the Philippines (IBP for
short) Board of Governors, unanimously adopted Resolution No. 75-65 in Administrative
case No. MDD-1 (In the Matter of the Membership Dues Delinquency of Atty. Marcial A.
Edillon) recommending to the Court the removal of the name of the respondent from its
Roll of Attorneys for 'stubborn refusal to pay his membership dues' to the IBP since the
latter's constitution notwithstanding due notice. On January 21, 1976, the IBP, through
its then President Liliano B. Neri, submitted the said resolution to the Court for
consideration and approval,. Pursuant to paragraph 2, Section 24, Article III of the By-
Laws of the IBP, which. reads: ... Should the delinquency further continue until the
following June 29, the Board shall promptly inquire into the cause or causes of the
continued delinquency and take whatever action it shall deem appropriate, including a
recommendation to the Supreme Court for the removal of the delinquent member's
name from the Roll of Attorneys. Notice of the action taken should be submit by
registered mail to the member and to the Secretary of the Chapter concerned.' On
January 27, 1976, the Court required the respondent to comment on the resolution and
letter adverted to above he submitted his comment on February 23, 1976, reiterating his
refusal to pay the membership fees due from him. On March 2, 1976, the Court required
the IBP President and the IBP Board of Governors to reply to Edillon's comment: On
March 24, 1976, they submitted a joint reply. Thereafter, the case was set for hearing
on June 3, 1976. After the hearing, the parties were required to submit memoranda in
amplification of their oral arguments. The matter was thenceforth submitted for
resolution." 3
Reference was then made to the authority of the IBP Board of Governors to recommend
to the Supreme Court the removal of a delinquent member's name from the Roll of
Attorneys as found in Rules of Court: 'Effect of non-payment of dues. — Subject to the
provisions of Section 12 of this Rule, default in the payment of annual dues for six
months shall warrant suspension of membership in the Integrated Bar, and default in
such payment for one year shall be a ground for the removal of the name of the
delinquent member from the Roll of Attorneys. 4
The submission of respondent Edillion as summarized in the aforesaid resolution "is that
the above provisions constitute an invasion of his constitutional rights in the sense that
he is being compelled, as a pre-condition to maintaining his status as a lawyer in good
standing, to be a member of the IBP and to pay the corresponding dues, and that as a
consequence of this compelled financial support of the said organization to which he is
admittedly personally antagonistic, he is being deprived of the rights to liberty and
property guaranteed to him by the Constitution. Hence, the respondent concludes, the
above provisions of the Court Rule and of the IBP By-Laws are void and of no legal
force and effect. 5 It was pointed out in the resolution that such issues was raised on a
previous case before the Court, entitled 'Administrative Case No. 526, In the Matter of
the Petition for the Integration of the Bar of the Philippines, Roman Ozaeta, et al.,
Petitioners.' The Court exhaustively considered all these matters in that case in its
Resolution ordaining the integration of the Bar of the Philippines, promulgated on
January 9, 1973. 6 The unanimous conclusion reached by the Court was that the
integration of the Philippine Bar raises no constitutional question and is therefore legally
unobjectionable, "and, within the context of contemporary conditions in the Philippine,
has become an imperative means to raise the standards of the legal profession,
improve the administration of justice, and enable the Bar to discharge its public
responsibility fully and effectively." 7
As mentioned at the outset, the vote was unanimous. From the time the decision was
rendered, there were various pleadings filed by respondent for reinstatement starting
with a motion for reconsideration dated August 19, 1978. Characterized as it was by
persistence in his adamantine refusal to admit the full competence of the Court on the
matter, it was not unexpected that it would be denied. So it turned out. 8 It was the
consensus that he continued to be oblivious to certain balic juridical concepts, the
appreciation of which does not even require great depth of intellect. Since respondent
could not be said to be that deficient in legal knowledge and since his pleadings in other
cases coming before this Tribunal were quite literate, even if rather generously sprinkled
with invective for which he had been duly taken to task, there was the impression that
his recalcitrance arose from and sheer obstinacy. Necessary, the extreme penalty of
disbarment visited on him was more than justified.
Since then, however, there were other communications to this Court where a different
attitude on his part was discernible. 9 The tone of defiance was gone and circumstances
of a mitigating character invoked — the state of his health and his advanced age. He
likewise spoke of the welfare of former clients who still rely on him for counsel, their
confidence apparently undiminished. For he had in his career been a valiant, if at times
unreasonable, defender of the causes entrusted to him.
This Court, in the light of the above, felt that reinstatement could be ordered and so it
did in the resolution of October 23, 1980. It made certain that there was full acceptance
on his part of the competence of this Tribunal in the exercise of its plenary power to
regulate the legal profession and can integrate the bar and that the dues were duly paid.
Moreover, the fact that more than two years had elapsed during which he war. barred
from exercising his profession was likewise taken into account. It may likewise be said
that as in the case of the inherent power to punish for contempt and paraphrasing the
dictum of Justice Malcolm in Villavicencio v. Lukban, 10 the power to discipline,
especially if amounting to disbarment, should be exercised on the preservative and not
on the vindictive principle. 11
One last word. It has been pertinently observed that there is no irretrievable finality as
far as admission to the bar is concerned. So it is likewise as to loss of membership.
What must ever be borne in mind is that membership in the bar, to follow Cardozo, is a
privilege burdened with conditions. Failure to abide by any of them entails the loss of
such privilege if the gravity thereof warrant such drastic move. Thereafter a sufficient
time having elapsed and after actuations evidencing that there was due contrition on the
part of the transgressor, he may once again be considered for the restoration of such a
privilege. Hence, our resolution of October 23, 1980.
The Court restores to membership to the bar Marcial A. Edillon.
Teehankee, Barredo, Makasiar, Concepcion, Jr., Fernandez, Guerrero, Abad Santos,
De Castro and Melencio-Herrera, JJ., concur.
Aquino, J., concurs in the result.
A.M. No. RTJ-06-2005 July 14, 2006
[OCA-IPI No. 04-2122-RTJ]
JOSEFINA CRUZ-AREVALO, complainant,
vs.
JUDGE LYDIA QUERUBIN-LAYOSA, Regional Trial Court, Branch 217, Quezon City,
respondent.
DECISION
YNARES-SANTIAGO, J.:
This administrative Complaint1 filed by Josefina Cruz-Arevalo charges Judge Lydia Querubin-
Layosa2 with manifest bias and partiality and ignorance of the law relative to Civil Case No. Q-
03-50379, entitled Josefina Cruz-Arevalo and Conrado R. Cruz v. Home Development Mutual
Fund and Federico S. Quimbo.
Complainant narrates that Conrado R. Cruz executed an authorization letter3 and a special power
of attorney (SPA)4 in her favor to represent him in Civil Case No. Q-03-50379 while he
undergoes medical treatment in the United States of America (USA). Notwithstanding the
presentation of the authorization letter and SPA during the pre-trial, respondent judge declared
Cruz non-suited due to his absence. She also refused to issue an order to that effect thus
depriving Cruz the right to challenge her order by way of petition for certiorari. Complainant
also assails the order of respondent judge to exclude several paragraphs in the Affidavit which
was adopted as the direct testimony of her witness without giving her counsel a chance to
comment on the objections raised by the defendants. Moreover, she refused to issue a written
order excluding certain paragraphs thus depriving complainant the opportunity to file certiorari
proceedings.
Complainant likewise accuses respondent judge of inaction, indifference or collusion by silence5
with the defendants for not acting on her Motions for Writs of Subpoena Duces Tecum and Ad
Testificandum6 thus providing opportunity for defendant Quimbo to avoid compliance therewith.
Complainant prays for the re-raffling of the case to ensure impartiality and proper dispensation
of justice.7
On November 14, 2004, respondent judge made the following ruling in Civil Case No. Q-03-
50379:
Considering that plaintiff Josefina Cruz-Arevalo had filed a Complaint against
undersigned Presiding Judge with the Office of the Court Administrator and considering
 further that she had also filed with said Office a motion for re-raffle of this case, on
grounds of partiality and bias on the part of said Judge, while such grounds for re-raffle
are unfounded and while there is no legal basis for inhibition, if only to assuage her fears
of not obtaining a fair and impartial trial, and having already entertained serious doubt on
her objectivity in trying and eventually deciding the case, the undersigned Presiding
Judge deems it wise to voluntarily inhibit herself from trying the case.
Accordingly, undersigned Presiding Judge hereby inhibits herself from trying this case.
Let the entire record be forwarded to the Office of the Executive Judge through the Clerk
of Court of this Court for re-raffle.8
In her Comment9 dated January 12, 2005, respondent judge explains that the letter presented by
complainant allegedly authorizing her to represent Cruz in the pre-trial of Civil Case No. Q-03-
50379 is defective because it was not duly notarized and authenticated. She likewise found the
SPA defective as it pertains to complainant's authority to receive Cruz's contribution to the PAG-
IBIG Provident Fund and not to represent him in the pre-trial of the civil case. Thus, finding the
absence of Cruz during the pre-trial inexcusable and without any proper representation in his
behalf, respondent judge dismissed the complaint insofar as he is concerned.
As regards the exclusion of several paragraphs in the Affidavit constituting as the direct
testimony of Atty. Cecilio Y. Arevalo, Jr., respondent judge points out that she gave the other
party the chance to go over the affidavit and make objections thereto like any direct testimonial
evidence. She claims that no written order is necessary as demanded by complainant's counsel
because her rulings were made in open court during the course of trial and are already reflected
in the transcript of the stenographic notes. With regard to complainant's Motions for Writs of
Subpoena Duces Tecum and Ad Testificandum, respondent judge avers that they were not given
due course because the legal fees for said motions were unpaid and the person alleged to have
possession or control of the documents sought to be produced is not named or specified
therein.10
In its Report11 dated October 18, 2005, the Office of the Court Administrator (OCA) found
complainant's accusations unmeritorious and recommended the dismissal of the administrative
case for lack of merit.12
We agree with the findings and recommendation of the OCA.
The records clearly show that Conrado R. Cruz was absent during the pre-trial of Civil Case No.
Q-03-50379, despite the specific mandate of the Rules of Court for parties and their counsel to
personally appear therein.13 While non-appearance of a party may be excused if a duly
authorized representative shall appear in his behalf,14 however Cruz failed to validly constitute
complainant because his authorization letter and SPA were not respectively authenticated and
specific as to its purpose. Without any authorized representative, the failure of Cruz to appear at
the pre-trial made him non-suited. Respondent judge thus correctly dismissed the complaint in so
far as he is concerned. 15
As regards the exclusion of certain paragraphs in the affidavit of complainant's witness, the rule
is that evidence formally offered by a party may be admitted or excluded by the court. If a party's
offered documentary or object evidence is excluded, he may move or request that it be attached
to form part of the record of the case. If the excluded evidence is oral, he may state for the record
the name and other personal circumstances of the witness and the substance of the proposed
testimony. These procedures are known as offer of proof or tender of excluded evidence and are
made for purposes of appeal. If an adverse judgment is eventually rendered against the offeror,
he may in his appeal assign as error the rejection of the excluded evidence. The appellate court
will better understand and appreciate the assignment of error if the evidence involved is included
in the record of the case.16
On the other hand, the ruling on an objection must be given immediately after an objection is
made, as what respondent judge did, unless the court desires to take a reasonable time to inform
itself on the question presented; but the ruling shall always be made during the trial and at such
time as will give the party against whom it is made an opportunity to meet the situations
presented by the ruling.17 Respondent judge correctly ordered the striking out of portions in
Atty. Arevalo's affidavit which are incompetent, irrelevant, or otherwise improper.18 Objections
based on irrelevancy and immateriality need no specification or explanation. Relevancy or
materiality of evidence is a matter of logic, since it is determined simply by ascertaining its
logical connection to a fact in issue in the case. We agree with OCA's observation that:
There is also nothing irregular when respondent [judge] did not issue an order to reflect
the objections of the defense counsel to each of the allegations in the sworn affidavit
which was adopted as the direct testimony of complainant's counsel as the court's rulings
thereto were made during the trial. As pointed out by respondent [judge], these matters
are already reflected in the transcript of stenographic notes and are not subject to written
order. Orders resolving motions for continuance made in the presence of the adverse
party, or those made in the course of a hearing or trial, may properly be made orally.
(Echaus vs. CA, GR No. 57343, July 23, 1990, [187 SCRA 672]). Moreover, the acts of a
judge in his/her judicial capacity are not subject to disciplinary action even though
erroneous in the absence of fraud, dishonesty or corruption which complainant failed to
prove in the instant case.
Further, while records show that the person alleged to have possession or control of the
documents sought to be produced is actually named or specified in the Motions for Writs of
Subpoena Duces Tecum and Ad Testificandum filed by complainant in Civil Case No. Q-03-
50379, respondent judge was correct not to have entertained the same as the legal fees
corresponding thereto were not paid. Respondent judge is not obliged to remind complainant or
her counsel regarding said fees as the rules of procedure and practice already mandate that fees
prescribed in filing of pleadings or other application which initiates an action or proceeding shall
be paid in full.19 However, this issue has become moot as respondent judge subsequently issued
the subpoena prayed for after the complainant paid the required fees.
Finally, complainant failed to present evidence to show the alleged bias of respondent judge;
mere suspicion that a judge was partial is not enough.20 Bare allegations of partiality will not
suffice in an absence of a clear showing that will overcome the presumption that the judge
dispensed justice without fear or favor. It bears to stress again that a judge's appreciation or
misappreciation of the sufficiency of evidence adduced by the parties, or the correctness of a
judge's orders or rulings on the objections of counsels during the hearing, without proof of
malice on the part of respondent judge, is not sufficient to show bias or partiality.21 The Court
will not shirk from its responsibility of imposing discipline upon erring members of the bench.
At the same time, however, the Court should not hesitate to shield them from unfounded suits
that only serve to disrupt rather than promote the orderly administration of justice.
WHEREFORE, the instant administrative complaint against Judge Lydia Querubin-Layosa,
Presiding Judge, Regional Trial Court of Quezon City, Branch 217, is DISMISSED for lack of
merit.
SO ORDERED.
Panganiban, C.J., Austria-Martinez, Callejo, Sr., Chico-Nazario, J.J., concur.
A.C. No. 4807 March 22, 2000
MANUEL N. CAMACHO, complainant,
vs.
ATTYS. LUIS MEINRADO C. PANGULAYAN, REGINA D. BALMORES, CATHERINE
V. LAUREL and HUBERT JOAQUIN P. BUSTOS of PANGULAYAN AND
ASSOCIATES LAW OFFICES, respondents.

VITUG, J.:
Respondent lawyers stand indicted for a violation of the Code of Professional Ethics,
specifically Canon 9 thereof, viz:
A lawyer should not in any way communicate upon the subject of controversy with a party
represented by counsel, much less should he undertake to negotiate or compromise the
matter with him, but should only deal with his counsel. It is incumbent upon the lawyer
most particularly to avoid everything that may tend to mislead a party not represented by
counsel and he should not undertake to advise him as to law.
Atty. Manuel N. Camacho filed a complaint against the lawyers comprising the
Pangulayan and Associates Law Offices, namely, Attorneys Luis Meinrado C.
Pangulayan, Regina D. Balmores, Catherine V. Laurel, and Herbert Joaquin P. Bustos.
Complainant, the hired counsel of some expelled students from the AMA Computer
College ("AMACC"), in an action for the Issuance of a Writ of Preliminary Mandatory
Injunction and for Damages, docketed Civil Case No. Q-97-30549 of the Regional Trial
Court, Branch 78, of Quezon City, charged that respondents, then counsel for the
defendants, procured and effected on separate occasions, without his knowledge,
compromise agreements ("Re-Admission Agreements") with four of his clients in the
aforementioned civil case which, in effect, required them to waive all kinds of claims
they might have had against AMACC, the principal defendant, and to terminate all civil,
criminal and administrative proceedings filed against it. Complainant averred that such
an act of respondents was unbecoming of any member of the legal profession
warranting either disbarment or suspension from the practice of law.
In his comment, Attorney Pangulayan acknowledged that not one of his co-respondents
had taken part in the negotiation, discussion, formulation, or execution of the various
Re-Admission Agreements complained of and were, in fact, no longer connected at the
time with the Pangulayan and Associates Law Offices. The Re-Admission Agreements,
he claimed, had nothing to do with the dismissal of Civil Case Q-97-30549 and were
executed for the sole purpose of effecting the settlement of an administrative case
involving nine students of AMACC who were expelled therefrom upon the
recommendation of the Student Disciplinary Tribunal. The students, namely, Ian Dexter
Marquez, Almira O. Basalo, Neil Jason R. Salcedo, Melissa F. Domondon, Melyda B.
De Leon, Leila D. Joven, Signorelli A. Santiago, Michael Ejercito, and Cleo B. Villareiz,
were all members of the Editorial Board of DATALINE, who apparently had caused to
be published some objectionable features or articles in the paper. The 3-member
Student Disciplinary Tribunal was immediately convened, and after a series of hearings,
it found the students guilty of the use of indecent language and unauthorized use of the
student publication funds. The body recommended the penalty of expulsion against the
erring students.
The denial of the appeal made by the students to Dr. Amable R. Aguiluz V, AMACC
President, gave rise to the commencement of Civil Case No. Q-97-30549 on 14th
March 1997 before the Regional Trial Court, Branch 78, of Quezon City. While the civil
case was still pending, letters of apology and Re-Admission Agreements were
separately executed by and/or in behalf of some of the expelled students, to wit: Letter
of Apology, dated 27 May 1997, of Neil Jason Salcedo, assisted by his mother, and Re-
Admission Agreement of 22 June 1997 with the AMACC President; letter of apology,
dated 31 March 1997, of Mrs. Veronica B. De Leon for her daughter Melyda B. De Leon
and Re-Admission Agreement of 09 May 1997 with the AMACC President; letter of
apology, dated 22 May 1997, of Leila Joven, assisted by her mother, and Re-Admission
Agreement of 22 May 1997 with the AMACC President; letter or apology, dated 22
September 1997, of Cleo Villareiz and Re-Admission Agreement of 10 October 1997
with the AMACC President; and letter of apology, dated 20 January 1997, of Michael
Ejercito, assisted by his parents, and Re-Admission Agreement of 23 January 1997 with
the AMACC President.
Following the execution of the letters of apology and Re-Admission Agreements, a
Manifestation, dated 06 June 1997, was filed with the trial court where the civil case was
pending by Attorney Regina D. Balmores of the Pangulayan and Associates Law
Offices for defendant AMACC. A copy of the manifestation was furnished complainant.
In his Resolution, dated 14 June 1997, Judge Lopez of the Quezon City Regional Trial
Court thereupon dismissed Civil Case No. Q-97-30549.
On 19 June 1999, the Board of Governors of the Integrated Bar of the Philippines
("IBP") passed Resolution No. XIII-99-163, thus:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the
Report and Recommendation of the Investigating Commissioner in the above-entitled
case, herein made part of this Resolution/Decision as Annex "A", and, finding the
recommendation fully supported by the evidence on record and the applicable laws and
rules, with an amendment Atty. Meinrado Pangulayan is suspended from the practice of
law for SIX (6) MONTHS for being remiss in his duty and DISMISSAL of the case against
the other Respondents for they did not take part in the negotiation of the case.
It would appear that when the individual letters of apology and Re-Admission
Agreements were formalized, complainant was by then already the retained counsel for
plaintiff students in the civil case. Respondent Pangulayan had full knowledge of this
fact. Although aware that the students were represented by counsel, respondent
attorney proceeded, nonetheless, to negotiate with them and their parents without at the
very least communicating the matter to their lawyer, herein complainant, who was
counsel of record in Civil Case No. Q-97-30549. This failure of respondent, whether by
design or because of oversight, is an inexcusable violation of the canons of professional
ethics and in utter disregard of a duty owing to a colleague. Respondent fell short of the
demands required of him as a lawyer and as a member of the Bar.
The allegation that the context of the Re-Admission Agreements centers only on the
administrative aspect of the controversy is belied by the
Manifestation 1 which, among other things, explicitly contained the following stipulation;
viz:
1. Among the nine (9) signatories to the complaint, four (4) of whom assisted by their
parents/guardian already executed a Re-Admission Agreement with AMACC President,
AMABLE R. AGUILUZ V acknowledging guilt for violating the AMA COMPUTER
 COLLEGE MANUAL FOR DISCIPLINARY ACTIONS and agreed among others to
terminate all civil, criminal and administrative proceedings which they may have against
the AMACC arising from their previous dismissal.
xxx xxx xxx
3. Consequently, as soon as possible, an Urgent Motion to Withdraw from Civil Case No.
Q-97-30549 will by filed them.
The Court can only thus concur with the IBP Investigating Commission and the IBP
Board of Governors in their findings; nevertheless, the recommended six-month
suspension would appear to be somewhat too harsh a penalty given the circumstances
and the explanation of respondent.
WHEREFORE, respondent Atty. Luis Meinrado C. Pangulayan is ordered SUSPENDED
from the practice of law for a period of THREE (3) MONTHS effective immediately upon
his receipt of this decision. The case against the other respondents is DISMISSED for
insufficiency of evidence.
Let a copy of this decision be entered in the personal record of respondent as an
attorney and as a member of the Bar, and furnished the Bar Confidant, the Integrated
Bar of the Philippines and the Court Administrator for circulation to all courts in the
country.1âwphi1.nêt
SO ORDERED.
Melo, Panganiban, Purisima and Gonzaga-Reyes, JJ., concur.
A.C. No. 3149 August 17, 1994
CERINA B. LIKONG, petitioner,
vs.
ATTY. ALEXANDER H. LIM, respondent.
Florentino G. Temporal for complainant.
Trabajo Lim Law Office for respondent.

PADILLA, J.:
Cerina B. Likong filed this administrative case against Atty. Alexander H. Lim, seeking
the latter's disbarment for alleged malpractice and grave misconduct.
The circumstances which led to the filing of this complaint are as follows:
Sometime in September 1984, complainant obtained a loan of P92,100.00 from a
certain Geesnell L. Yap. Complainant executed a promissory note in favor of Yap and a
deed of assignment, assigning to Yap pension checks which she regularly receives from
the United States government as a widow of a US pensioner. The aforementioned deed
of assignment states that the same shall be irrevocable until the loan is fully paid.
Complainant likewise executed a special power of attorney authorizing Yap to get,
demand, collect and receive her pension checks from the post office at Tagbilaran City.
The above documents were apparently prepared and notarized by respondent
Alexander H. Lim, Yap's counsel.
On 11 December 1984, about three (3) months after the execution of the
aforementioned special power of attorney, complainant informed the Tagbilaran City
post office that she was revoking the special power of attorney. As a consequence,
Geesnell Yap filed a complaint for injunction with damages against complainant.
Respondent Alexander H. Lim appeared as counsel for Yap while Attys. Roland B.
Inting and Erico B. Aumentado appeared for complainant (as defendant).
A writ of preliminary injunction was issued by the trial court on
23 January 1985, preventing complainant from getting her pension checks from the
Tagbilaran City post office. Yap later filed an urgent omnibus motion to cite complainant
in contempt of court for attempting to circumvent the preliminary injunction by changing
her address to Mandaue City. Upon motion by Yap, the court also issued an order dated
21 May 1985 expanding the scope of the preliminary injunction to prevent all post
offices in the Philippines from releasing pension checks to complainant.
On 26 July 1985, complainant and Yap filed a joint motion to allow the latter to withdraw
the pension checks. This motion does not bear the signatures of complainant's counsel
of record but only the signatures of both parties, "assisted by" respondent Attorney
Alexander H. Lim.
On 2 August 1985, complainant and Yap entered into a compromise agreement again
without the participation of the former's counsel. In the compromise agreement, it was
stated that complainant Cerina B. Likong admitted an obligation to Yap of P150,000.00.
It was likewise stated therein that complainant and Yap agreed that the amount would
be paid in monthly installments over a period of 54 months at an interest of 40% per
annum discounted every six (6) months. The compromise agreement was approved by
the trial court on 15 August 1985.
On 24 November 1987, Cerina B. Likong filed the present complaint for disbarment,
based on the following allegations:
7. In all these motions, complainant was prevented from seeking assistance, advise and
signature of any of her two (2) lawyers; no copy thereof was furnished to either of them or
at least to complainant herself despite the latter's pleas to be furnished copies of the
same;
8. Complainant was even advised by respondent that it was not necessary for her to
consult her lawyers under the pretense that: (a) this could only jeopardize the settlement;
(b) she would only be incurring enormous expense if she consulted a new lawyer; (c)
respondent was assisting her anyway; (d) she had nothing to worry about the documents
foisted upon her to sign; (e) complainant need not come to court afterwards to save her
time; and in any event respondent already took care of everything;
9. Complainant had been prevented from exhibiting fully her case by means of fraud,
deception and some other form of mendacity practiced on her by respondent;
10. Finally, respondent fraudulently or without authority assumed to represent
complainant and connived in her defeat; . . . 1
Respondent filed his Answer stating that counsel for complainant,
Atty. Roland B. Inting had abandoned his client. Atty. Lim further stated that the other
counsel, Atty. Enrico Aumentado, did not actively participate in the case and it was upon
the request of complainant and another debtor of Yap, Crispina Acuna, that he
(respondent) made the compromise agreement.
Respondent states that he first instructed complainant to notify her lawyers but was
informed that her lawyer had abandoned her since she could not pay his attorney's fees.
Complainant filed a reply denying that she had been abandoned by her lawyers.
Complainant stated that respondent never furnished her lawyers with copies of the
compromise agreement and a motion to withdraw the injunction cash bond deposited by
Yap.
At the outset, it is worth noting that the terms of the compromise agreement are indeed
grossly loaded in favor of Geesnell L. Yap, respondent's client.
Complainant's original obligation was to pay P92,100.00 within one (1) year from 4
October 1984. There is no provision in the promissory note signed by her with respect
to any interest to be paid. The only additional amount which Yap could collect based on
the promissory note was 25% of the principal as attorney's fees in case a lawyer was
hired by him to collect the loan.
In the compromise agreement prepared by respondent, dated 2 August 1985,
complainant's debt to Yap was increased to P150,000.00 (from 92,100.00) after the
lapse of only ten (10) months. This translates to an interest in excess of seventy-five
percent (75%) per annum. In addition, the compromise agreement provides that the
P150,000.00 debt would be payable in fifty-four (54) monthly installments at an interest
of forty percent (40%) per annum. No great amount of mathematical prowess is required
to see that the terms of the compromise agreement are grossly prejudicial to
complainant.
With respect to respondent's failure to notify complainant's counsel of the compromise
agreement, it is of record that complainant was represented by two (2) lawyers, Attys.
Inting and Aumentado. Complainant states that respondent prevented her from
informing her lawyers by giving her the reasons enumerated in the complaint and earlier
quoted in this decision.
There is no showing that respondent even tried to inform opposing counsel of the
compromise agreement. Neither is there any showing that respondent informed the trial
court of the alleged abandonment of the complainant by her counsel.
Instead, even assuming that complainant was really abandoned by her counsel,
respondent saw an opportunity to take advantage of the situation, and the result was
the execution of the compromise agreement which, as previously discussed, is grossly
and patently disadvantageous and prejudicial to complainant.
Undoubtedly, respondent's conduct is unbecoming a member of the legal profession.
Canon 9 of the Code of Professional Ethics states:
9. Negotiations with opposite party.
A lawyer should not in any way communicate upon the subject of
controversy with a party represented by counsel; much less should he
undertake to negotiate or compromise the matter with him, but should
deal only with his counsel. It is incumbent upon the lawyer most
particularly to avoid everything that may tend to mislead a party not
represented by counsel and he should not undertake to advise him as to
the law.
The Code of Professional Responsibility states:
Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral, or deceitful
conduct.
Rule 8.02 — A lawyer shall not, directly or indirectly, encroach upon the professional
employment of another lawyer; however, it is the right of any lawyer, without fear or favor,
 to give proper advice and assistance to those seeking relief against unfaithful or
neglectful counsel.
Rule 15.03 — A lawyer shall not represent conflicting interests except by written consent
of all concerned given after a full disclosure of the facts.
The violation of the aforementioned rules of professional conduct by respondent Atty.
Alexander H. Lim, warrants the imposition upon him of the proper sanction from this
Court. Such acts constituting malpractice and grave misconduct cannot be left
unpunished for not only do they erode confidence and trust in the legal profession, they
likewise prevent justice from being attained.
ACCORDINGLY, respondent Atty. Alexander H. Lim is hereby imposed the penalty of
SUSPENSION from the practice of law for a period of ONE (1) YEAR, effective
immediately upon his receipt of this decision.
Let a copy of this decision be entered in respondent's personal record as attorney and
member of the Bar, and furnished the Bar Confidant, the Integrated Bar of the
Philippines and the Court Administrator for circulation to all courts in the country.
SO ORDERED.
Narvasa, C.J., Regalado, Puno and Mendoza, JJ., concur.
G.R. No. 154207 April 27, 2007
FERDINAND A. CRUZ, Petitioner,
vs.
ALBERTO MINA, HON. ELEUTERIO F. GUERRERO and HON. ZENAIDA
LAGUILLES, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Certiorari under Rule 65 of the Rules of Court, grounded on
pure questions of law, with Prayer for Preliminary Injunction assailing the Resolution dated May
3, 2002 promulgated by the Regional Trial Court (RTC), Branch 116, Pasay City, in Civil Case
No. 02-0137, which denied the issuance of a writ of preliminary injunction against the
Metropolitan Trial Court (MeTC), Branch 45, Pasay City, in Criminal Case No. 00-1705;1 and
the RTC’s Order dated June 5, 2002 denying the Motion for Reconsideration. No writ of
preliminary injunction was issued by this Court.
The antecedents:
On September 25, 2000, Ferdinand A. Cruz (petitioner) filed before the MeTC a formal Entry of
Appearance, as private prosecutor, in Criminal Case No. 00-1705 for Grave Threats, where his
father, Mariano Cruz, is the complaining witness.
The petitioner, describing himself as a third year law student, justifies his appearance as private
prosecutor on the bases of Section 34 of Rule 138 of the Rules of Court and the ruling of the
Court En Banc in Cantimbuhan v. Judge Cruz, Jr.2 that a non-lawyer may appear before the
inferior courts as an agent or friend of a party litigant. The petitioner furthermore avers that his
appearance was with the prior conformity of the public prosecutor and a written authority of
Mariano Cruz appointing him to be his agent in the prosecution of the said criminal case.
However, in an Order dated February 1, 2002, the MeTC denied permission for petitioner to
appear as private prosecutor on the ground that Circular No. 19 governing limited law student
practice in conjunction with Rule 138-A of the Rules of Court (Law Student Practice Rule)
should take precedence over the ruling of the Court laid down in Cantimbuhan; and set the case
for continuation of trial.3
On February 13, 2002, petitioner filed before the MeTC a Motion for Reconsideration seeking to
reverse the February 1, 2002 Order alleging that Rule 138-A, or the Law Student Practice Rule,
does not have the effect of superseding Section 34 of Rule 138, for the authority to interpret the
rule is the source itself of the rule, which is the Supreme Court alone.
In an Order dated March 4, 2002, the MeTC denied the Motion for Reconsideration.
On April 2, 2002, the petitioner filed before the RTC a Petition for Certiorari and Mandamus
with Prayer for Preliminary Injunction and Temporary Restraining Order against the private
respondent and the public respondent MeTC.
After hearing the prayer for preliminary injunction to restrain public respondent MeTC Judge
from proceeding with Criminal Case No. 00-1705 pending the Certiorari proceedings, the RTC,
in a Resolution dated May 3, 2002, resolved to deny the issuance of an injunctive writ on the
ground that the crime of Grave Threats, the subject of Criminal Case No. 00-1705, is one that
can be prosecuted de oficio, there being no claim for civil indemnity, and that therefore, the
intervention of a private prosecutor is not legally tenable.
On May 9, 2002, the petitioner filed before the RTC a Motion for Reconsideration. The
petitioner argues that nowhere does the law provide that the crime of Grave Threats has no civil
aspect. And last, petitioner cites Bar Matter No. 730 dated June 10, 1997 which expressly
provides for the appearance of a non-lawyer before the inferior courts, as an agent or friend of a
party litigant, even without the supervision of a member of the bar.
Pending the resolution of the foregoing Motion for Reconsideration before the RTC, the
petitioner filed a Second Motion for Reconsideration dated June 7, 2002 with the MeTC seeking
the reversal of the March 4, 2002 Denial Order of the said court, on the strength of Bar Matter
No. 730, and a Motion to Hold In Abeyance the Trial dated June 10, 2002 of Criminal Case No.
00-1705 pending the outcome of the certiorari proceedings before the RTC.
On June 5, 2002, the RTC issued its Order denying the petitioner’s Motion for Reconsideration.
Likewise, in an Order dated June 13, 2002, the MeTC denied the petitioner’s Second Motion for
Reconsideration and his Motion to Hold in Abeyance the Trial on the ground that the RTC had
already denied the Entry of Appearance of petitioner before the MeTC.
On July 30, 2002, the petitioner directly filed with this Court, the instant Petition and assigns the
following errors:
I.
the respondent regional trial court abused its discretion when it resolved to deny the prayer for
the writ of injunction of the herein petitioner despite petitioner having established the necessity
of granting the writ;
II.
THE RESPONDENT TRIAL COURT ABUSED ITS DISCRETION, TANTAMOUNT TO
IGNORANCE OF THE LAW, WHEN IT RESOLVED TO DENY THE PRAYER FOR THE
WRIT OF PRELIMINARY INJUNCTION AND THE SUBSEQUENT MOTION FOR
RECONSIDERATION OF THE HEREIN PETITIONER ON THE BASIS THAT [GRAVE]
THREATS HAS NO CIVIL ASPECT, FOR THE SAID BASIS OF DENIAL IS NOT IN
ACCORD WITH THE LAW;
III.
THE RESPONDENT METROPOLITAN TRIAL COURT ABUSED ITS DISCRETION
WHEN IT DENIED THE MOTION TO HOLD IN ABEYANCE TRIAL, WHEN WHAT WAS
DENIED BY THE RESPONDENT REGIONAL TRIAL COURT IS THE ISSUANCE OF THE
WRIT OF PRELIMINARY INJUNCTION and WHEN THE RESPONDENT REGIONAL
TRIAL COURT IS YET TO DECIDE ON THE MERITS OF THE PETITION FOR
CERTIORARI;
IV.
THE RESPONDENT COURT[s] ARE CLEARLY IGNORING THE LAW WHEN THEY
PATENTLY REFUSED TO HEED TO [sic] THE CLEAR MANDATE OF THE LAPUT,
CANTIMBUHAN AND BULACAN CASES, AS WELL AS BAR MATTER NO. 730,
PROVIDING FOR THE APPEARANCE OF NON-LAWYERS BEFORE THE LOWER
COURTS (MTC’S).4
This Court, in exceptional cases, and for compelling reasons, or if warranted by the nature of the
issues reviewed, may take cognizance of petitions filed directly before it.5
Considering that this case involves the interpretation, clarification, and implementation of
Section 34, Rule 138 of the Rules of Court, Bar Matter No. 730, Circular No. 19 governing law
student practice and Rule 138-A of the Rules of Court, and the ruling of the Court in
Cantimbuhan, the Court takes cognizance of herein petition.
The basic question is whether the petitioner, a law student, may appear before an inferior court as
an agent or friend of a party litigant.
The courts a quo held that the Law Student Practice Rule as encapsulated in Rule 138-A of the
Rules of Court, prohibits the petitioner, as a law student, from entering his appearance in behalf
of his father, the private complainant in the criminal case without the supervision of an attorney
duly accredited by the law school.
Rule 138-A or the Law Student Practice Rule, provides:
RULE 138-A
LAW STUDENT PRACTICE RULE
Section 1. Conditions for Student Practice. – A law student who has successfully completed his
3rd year of the regular four-year prescribed law curriculum and is enrolled in a recognized law
school's clinical legal education program approved by the Supreme Court, may appear without
compensation in any civil, criminal or administrative case before any trial court, tribunal, board
or officer, to represent indigent clients accepted by the legal clinic of the law school.
Sec. 2. Appearance. – The appearance of the law student authorized by this rule, shall be under
the direct supervision and control of a member of the Integrated Bar of the Philippines duly
accredited by the law school. Any and all pleadings, motions, briefs, memoranda or other papers
to be filed, must be signed by the supervising attorney for and in behalf of the legal clinic.
However, in Resolution6 dated June 10, 1997 in Bar Matter No. 730, the Court En Banc clarified:
The rule, however, is different if the law student appears before an inferior court, where the
issues and procedure are relatively simple. In inferior courts, a law student may appear in his
personal capacity without the supervision of a lawyer. Section 34, Rule 138 provides:
Sec. 34. By whom litigation is conducted. - In the court of a justice of the peace, a party may
conduct his litigation in person, with the aid of an agent or friend appointed by him for that
purpose, or with the aid of an attorney. In any other court, a party may conduct his litigation
personally or by aid of an attorney, and his appearance must be either personal or by a duly
authorized member of the bar.
Thus, a law student may appear before an inferior court as an agent or friend of a party without
the supervision of a member of the bar.7 (Emphasis supplied)
The phrase "In the court of a justice of the peace" in Bar Matter No. 730 is subsequently changed
to "In the court of a municipality" as it now appears in Section 34 of Rule 138, thus:8
SEC. 34. By whom litigation is conducted. — In the Court of a municipality a party may conduct
his litigation in person, with the aid of an agent or friend appointed by him for that purpose, or
with the aid of an attorney. In any other court, a party may conduct his litigation personally or by
aid of an attorney and his appearance must be either personal or by a duly authorized member of
the bar. (Emphasis supplied)
which is the prevailing rule at the time the petitioner filed his Entry of Appearance with the
MeTC on September 25, 2000. No real distinction exists for under Section 6, Rule 5 of the Rules
of Court, the term "Municipal Trial Courts" as used in these Rules shall include Metropolitan
Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit
Trial Courts.
There is really no problem as to the application of Section 34 of Rule 138 and Rule 138-A. In the
former, the appearance of a non-lawyer, as an agent or friend of a party litigant, is expressly
allowed, while the latter rule provides for conditions when a law student, not as an agent or a
friend of a party litigant, may appear before the courts.
Petitioner expressly anchored his appearance on Section 34 of Rule 138. The court a quo must
have been confused by the fact that petitioner referred to himself as a law student in his entry of
appearance. Rule 138-A should not have been used by the courts a quo in denying permission to
act as private prosecutor against petitioner for the simple reason that Rule 138-A is not the basis
for the petitioner’s appearance.
Section 34, Rule 138 is clear that appearance before the inferior courts by a non-lawyer is
allowed, irrespective of whether or not he is a law student. As succinctly clarified in Bar Matter
No. 730, by virtue of Section 34, Rule 138, a law student may appear, as an agent or a friend of a
party litigant, without the supervision of a lawyer before inferior courts.
Petitioner further argues that the RTC erroneously held that, by its very nature, no civil liability
may flow from the crime of Grave Threats, and, for this reason, the intervention of a private
prosecutor is not possible.
It is clear from the RTC Decision that no such conclusion had been intended by the RTC. In
denying the issuance of the injunctive court, the RTC stated in its Decision that there was no
claim for civil liability by the private complainant for damages, and that the records of the case
do not provide for a claim for indemnity; and that therefore, petitioner’s appearance as private
prosecutor appears to be legally untenable.
Under Article 100 of the Revised Penal Code, every person criminally liable for a felony is also
civilly liable except in instances when no actual damage results from an offense, such as
espionage, violation of neutrality, flight to an enemy country, and crime against popular
representation.9 The basic rule applies in the instant case, such that when a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense charged shall
be deemed instituted with criminal action, unless the offended party waives the civil action,
reserves the right to institute it separately or institutes the civil action prior to the criminal
action.10
The petitioner is correct in stating that there being no reservation, waiver, nor prior institution of
the civil aspect in Criminal Case No. 00-1705, it follows that the civil aspect arising from Grave
Threats is deemed instituted with the criminal action, and, hence, the private prosecutor may
rightfully intervene to prosecute the civil aspect.
WHEREFORE, the Petition is GRANTED. The assailed Resolution and Order of the Regional
Trial Court, Branch 116, Pasay City are REVERSED and SET ASIDE. The Metropolitan Trial
Court, Branch 45, Pasay City is DIRECTED to ADMIT the Entry of Appearance of petitioner in
Criminal Case No. 00-1705 as a private prosecutor under the direct control and supervision of
the public prosecutor.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 109149 December 21, 1999
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
LEONCIO SANTOCILDES, JR. y SIGA-AN, accused-appellant.

QUISUMBING, J.:
Where an accused was not duly represented by a member of the Philippine Bar during
trial, the judgment should be set aside and the case remanded to the trial court for a
new trial. A person who misrepresents himself as a lawyer shall be held liable for
indirect contempt of court.
Subject of the present appeal is the decision dated October 29, 1992, of the Regional
Trial Court of Iloilo City, Branch 33, convicting accused-appellant of the crime of rape,
sentencing him to suffer the penalty of reclusion perpetua, and ordering him to pay the
offended party the amount of P50,000.00 and to pay the costs.
The antecedent facts of the case are as follows:
On February 17, 1992, appellant was charged with the crime of rape 1 of a girl less than
nine (9) years old, committed on December 28, 1991, in the town of Barangay San Luis,
San Joaquin, Iloilo.
Upon arraignment, appellant entered a plea of not guilty. Trial ensued and the
prosecution presented as its witnesses the victim, her mother, her six (6) year-old
playmate, and the medico-legal officer who examined the victim.
For the defense, appellant presented one German Toriales and himself. Appellant
denied committing the rape and claimed that he merely tried to stop the two girls, the
victim and her playmate, from quarreling.
On October 29, 1992, the trial court rendered a decision 2 finding appellant guilty as
charged. The dispositive portion of the decision states:
 WHEREFORE, the Court finds the accused guilty beyond reasonable doubt of the crime
of rape and sentences him to suffer the penalty of reclusion perpetua together its
accessory penalty. The accused is ordered to pay the amount of P50,000.00 to the
complainant and another amount for costs, without subsidiary penalty in case of failure to
pay the civil liability and the cost.
If qualified under Art. 29 of the Revised Penal Code, as amended by R.A. 6127, as
amended, and he has agreed in writing to abide by the same rules imposed upon
convicted prisoners, he shall be credited with the full duration of his preventive
imprisonment; otherwise, he shall only be credited with 4/5 of the same.
SO ORDERED.
Hence, appellant duly filed a Notice of Appeal. 3 In his brief, 4 appellant made the
following assignment of errors:
I. THE HONORABLE TRIAL COURT COMMITTED REVERSIBLE ERROR IN FINDING
THAT THE ACCUSED IS GUILTY OF RAPE INSPITE OF CONFLICTING
TESTIMONIES OF THE PRIVATE COMPLAINANT AND HER WITNESSES ON
MATERIAL POINTS.
II. THAT THE ACCUSED-APPELLANT WAS DEPRIVED THOUGH NO FAULT OF HIS
OWN TO BE DEFENDED BY A PERSON AUTHORIZED TO PRACTICE LAW
AMOUNTING TO DENIAL OF DUE PROCESS.
Considering the importance of the constitutional right to counsel, we shall now first
resolve the issue of proper representation by a member of the bar raised by appellant.
Appellant contends that he was represented during trial by a person named Gualberto
C. Ompong, who for all intents and purposes acted as his counsel and even conducted
the direct examination and cross-examinations of the witnesses. On appeal, however,
appellant secured the services of a new lawyer, Atty. Igmedio S. Prado, Jr., who
discovered that Gualberto C. Ompong is actually not a member of the bar. Further
verification with the Office of the Bar Confidant confirmed this fact. 5 Appellant therefore
argues that his deprivation of the right to counsel should necessarily result in his
acquittal of the crime charged.
The Office of the Solicitor General, on the other hand, maintains that notwithstanding
the fact that appellant's counsel during trial was not a member of the bar, appellant was
afforded due process since he has been given an opportunity to be heard and the
records reveal that said person "presented the evidence for the defense with the ability
of a seasoned lawyer and in general handled the case of appellant in a professional and
skillful manner." However, the right of the accused to be heard by himself and his
counsel, in our view, goes much deeper than the question of ability or skill. It lies at the
heart of our adversarial system of justice. Where the interplay of basic rights of the
individual may collide with the awesome forces of the state, we need a professional
learned in the law as well as ethically committed to defend the accused by all means fair
and reasonable.
On the matter of proper representation by a member of the bar, we had occasion to
resolve a similar issue in the case of Delgado v. Court of Appeals. 6 In Delgado,
petitioner and two others were convicted by the trial court of the crime of estafa thru
falsification of public and/or official documents. One accused did not appeal. Petitioner
Delgado and her remaining co-accused appealed to the Court of Appeals, which
affirmed petitioner's conviction but acquitted her co-accused. After entry of judgment,
petitioner discovered that her lawyer was not a member of the bar and moved to set
aside the entry of judgment. The Court of Appeals denied petitioner's motion, hence,
she filed a petition for certiorari with this Court. The Court set aside the assailed
judgment and remanded the case to the trial court for a new trial, explaining that —
This is so because an accused person is entitled to be represented by a member of the
bar in a criminal case filed against her before the Regional Trial Court. Unless she is
represented by a lawyer, there is great danger that any defense presented in her behalf
will be inadequate considering the legal perquisites and skills needed in the court
proceedings. This would certainly be a denial of due process. 7
Indeed, the right to counsel is of such primordial importance that even if an accused
was represented by three successive counsels from the Public Attorney's Office, the
Court has ordered the remand of a rape case when it found that accused was given
mere perfunctory representation by aforesaid counsels such that appellant was not
properly and effectively accorded the right to counsel. In the recent en banc case of
People v. Bermas, G.R. No. 120420, April 21, 1999, the Court, speaking through Justice
Vitug, admonished three (3) PAO lawyers for failing to genuinely protect the interests of
the accused and for having fallen much too short of their responsibility as officers of the
court and as members of the Bar. Verily, we can do no less where the accused was not
even duly represented by a certified member of the Philippine Bar, no matter how
zealous his representation might have been.
The presence and participation of counsel in criminal proceedings should never be
taken lightly. 8 Even the most intelligent or educated man may have no skill in the
science of the law, particularly in the rules of procedure, and, without counsel, he may
be convicted not because he is guilty but because he does not know how to establish
his innocence. 9 The right of an accused to counsel is guaranteed to minimize the
imbalance in the adversarial system where the accused is pitted against the awesome
prosecutory machinery of the State. 10 Such a right proceeds from the fundamental
principle of due process which basically means that a person must be heard before
being condemned. The due process requirement is a part of a person's basic rights; it is
not a mere formality that may be dispensed with or performed perfunctorily. 11
The right to counsel of an accused is enshrined in no less than Article III, Sections 12
and 14 (2) of the 1987 Constitution. This constitutional mandate is reflected in Section 1
of Rule 115 of the 1985 Rules of Criminal Procedure which declares the right of the
accused at the trial to be present in person and by counsel at every stage of the
proceedings from the arraignment to the promulgation of judgment. In turn, Section 5 of
Article VIII of the 1987 Constitution vests the power to promulgate rules concerning the
admission to the practice of law to the Supreme Court. Section 1 of Rule 138 of the
Rules of Court explicitly states who are entitled to practice law in the Philippines, and
Section 2 thereof clearly provides for the requirements for all applicants for admission to
the bar. Jurisprudence has also held that "the right to practice law is not a natural or
constitutional right but is in the nature of a privilege or franchise. It is limited to persons
of good moral character with special qualifications duly ascertained and certified. The
right does not only presuppose in its possessor integrity, legal standing and attainment,
but also the exercise of a special privilege, highly personal and partaking of the nature
of a public
trust." 12 Indeed, so strict is the regulation of the practice of law that in Beltran, Jr. v.
Abad, 13 a Bar candidate who has already successfully hurdled the Bar examinations but
has not yet taken his oath and signed the roll of attorneys, and who was caught in the
unauthorized practice of law was held in contempt of court. Under Section 3 (e) of Rule
71 of the Rules of Court, a person who undertakes the unauthorized practice of law is
liable for indirect contempt of court for assuming to be an attorney and acting as such
without authority.
WHEREFORE, the assailed judgment is SET ASIDE, and the case is hereby
REMANDED to the trial court for new trial.
With respect to the unauthorized practice of law by the person named Gualberto C.
Ompong in connection with this case, the local Chapter of the Integrated Bar of the
Philippines of Iloilo City is DIRECTED to conduct a prompt and thorough investigation
regarding this matter and to report its recommendations to the Court within ninety (90)
days from notice of this, order. Let all concerned parties, including the Office of the Bar
Confidant, be each furnished a copy of this Decision for their appropriate action.
No pronouncement as to costs.
SO ORDERED.
Bar Matter No. 139 October 11, 1984
RE: ELMO S. ABAD, 1978 Successful Bar Examinee, ATTY. PROCOPIO S.
BELTRAN, JR., President of the Philippine Trial Lawyers Association. Inc.,
complainant,
vs.
ELMO S. ABAD, respondent.

ABAD SANTOS, J.:

On March 28, 1983, this Court held respondent ELMO S. ABAD in contempt of court for
unauthorized practice of law and he was fined P500.00 with subsidiary imprisonment in
case he failed to pay the fine. (121 SCRA 217.) He paid the fine.
On May 5, 1983, Atty. Procopio S. Beltran, Jr., the complainant, filed a MOTION TO
CIRCULARIZE TO ALL METRO MANILA COURTS THE FACT THAT ELMO S. ABAD
IS NOT AUTHORIZED TO PRACTICE LAW.
Asked to comment on the Motion, Mr. Abad opposed it. He denied the allegations in the
Motion that he had been practicing law even after our Decision of March 28, 1983.
Because the Motion and the Opposition raised a question of fact, in Our resolution of
April 10, 1984, We directed "the Clerk of Court to conduct an investigation in the
premises and submit a report thereon with appropriate recommendation."
In a comprehensive and well-documented Report which is hereby made a part of this
Resolution, the Clerk of Court concluded:
The aforesaid documentary and testimonial evidence, as well as the
above report of the NBI, have clearly proved that respondent Abad is still
practicing law despite the decision of this Court of March 28, 1983.
The Clerk of Court makes the following recommendations:
a. imposed a fine of P2,000.00 payable within ten (10) days
from receipt of this resolution or an imprisonment of twenty
(20) days in case of non-payment thereof, with warning of
 drastic disciplinary action of imprisonment in case of any
further practice of law after receipt of this resolution; and
b. debarred from admission to the Philippine Bar until such
time that the Court finds him fit to become such a member.
It is further recommended that a circular be issued to all courts in the
Philippines through the Office of the Court Administrator that respondent
Elmo S. Abad has not been admitted to the Philippine Bar and is therefore
not authorized to practice law.
We find the Report to be in order and its recommendations to be well-taken. However,
the latter are not sufficiently adequate in dealing with the improper activities of the
respondent.
The Report has found as a fact, over the denials of the respondent under oath, that he
signed Exhibits B, C, and D, and that he made appearances in Metro Manila courts.
This aspect opens the respondent to a charge for perjury.
The Report also reveals that Atty. Ruben A. Jacobe collaborated with the respondent as
counsels for Antonio S. Maravilla one of the accused in Criminal Case Nos. 26084,
26085 and 26086 of the Regional Trial Court of Quezon City. (Exhibit D.) Atty. Jacobe
should be called to account for his association with the respondent.
WHEREFORE, Elmo S. Abad is hereby ordered to pay a fine of P12,000.00 within ten
(10) days from notice, failing which he shall be imprisoned for twenty (20) days. He is
also warned that if he persists in the unauthorized practice of law he shall be dealt with
more severely.
The Court Administrator is directed to circularize all courts in the country that the
respondent has not been authorized to practice law. A copy of the circular should be
sent to the Integrated Bar of the Philippines.
The Clerk of Court is directed to file with the City Fiscal of Manila an appropriate
complaint for false testimony against the respondent.
Finally, Atty. Ruben A. Jacobe is required to explain within ten (10) days from notice
why he should not be disciplined for collaborating and associating in the practice of the
law with the respondent who is not a member of the bar.
SO ORDERED.
Teehankee, Actg. C.J., Makasiar, Aquino, Melencio-Herrera, Plana, Escolin, Relova,
Gutierrez, Jr., De la Fuente and Cuevas, JJ., concur.
Guerrero, J., took no part.
Fernando, C.J. and Concepcion, Jr., JJ., are on leave.
Concepcion, Jr., J., on leave.
REPORT AND RECOMMENDATION
RE: Bar Matter No. 139 —
Elmo S. Abad, 1978 Successful
Bar Examinees
This report is submitted in compliance with the resolution of April 10, 1984.
In the En Banc decision of March 28, 1983 in the above-entitled case, the Court found
respondent Elmo S. Abad, who passed the 1978 Bar examinations but has not been
admitted to the Philippine Bar, in contempt of Court for illegal practice of law, and
imposed upon him a fine of P500.00. Respondent paid the fine on May 2, 1983.
On May 5, 1983 complainant filed a motion to circularize to all Metro Manila courts the
fact that respondent is not authorized to practice law. The Court in its resolution of May
26, 1983 required respondent to comment on the said motion. Respondent filed
"Opposition to Motion and Manifestation" which was noted in the resolution of June 30,
1983.
The complainant on March 14, 1984 reiterated his motion to circularize to all Metro
Manila courts that respondent is not authorized to practice law, with prayer that the
latter be punished with greater severity. He stated that "Mr. Abad is still practicing law
as evidenced by the fact that last December 8, 1983 at about 2:00 o'clock in the
afternoon, Mr. Abad appeared before the Regional Trial Court, National Capital Judicial
Region, Branch 100 located at the 11th Floor, City Hall, Quezon City presided by the
Honorable Judge Jorge C. Macli-ing that Mr. Abad appeared as counsel for a certain
Caroline T. Velez in Criminal Case Nos. 26084, 26085 and 26086 entitled People of the
Philippines vs. Maravilla, et al. Mr. Abad even cited in the pleading his Professional Tax
Receipt to prove that he is a licensed legal practitioner which is utterly false. Mr. Abad
gave his address as Ruben A. Jacobe & Associates, Ground Floor, ADC Building, Ayala
Avenue, Makati, Metro Manila."
Respondent filed an "Opposition to Motion" denying the complainant's allegation, to wit:
4. ... respondent is not presenting himself to the general public as a
Practicing Lawyer like what Atty. Procopio S. Beltran insists to the
Honorable Court;
5. That this motion is motivated by Atty. Beltran's personal desire to inflict
malice and oppression upon the respondent who even until now does not
accede to the terms and conditions of the former in connection with
several cases filed against him by the said Atty. Beltran;
6. Respondent respectfully submits that Atty. Beltran is trying his very best
to harass the respondent under the guise of conducting a Crusade
personally with the end in view that respondent submit to his ill-desires
and veiled threats and finally come into terms with him.
In the hearings conducted by the undersigned, to prove the allegations in his motion,
complainant presented the records in Criminal Cases Nos. 26084, 26085 and 26086,
entitled "People of the Philippines vs. Antonio S. Maravilla, Jr., et al." of Branch 100,
Regional Trial Court, Quezon City, which were brought to this Court and Identified by
Atty. Candido A. Domingo, Clerk of Court of said trial court, and marked by the
undersigned as the following exhibits:
1. Transcript of stenographic notes taken down during the initial trial of the aforesaid
criminal cases on December 8, 1983, at 1:30 in the afternoon (Exhibit "A") where it is
stated that Atty. Elmo Abad was counsel for Juan del Gallego III (Exhibit "A-1");
2. Urgent motion for withdrawal from custody of motor vehicle filed for Caroline T. Velez
by Elmo Abad (Exhibit "B") with his name and signature appearing therein as counsel
for the said movant (E exhibit "B-1");
3. Page 4 of aforesaid motion (Exhibit "C") with the name and signature of Elmo Abad
appearing therein as submitting the aforesaid motion for consideration of the trial court
(Exhibit "C-1");
4. Urgent motion for deferment of arraignment and trial filed for accused Antonio S.
Maravilla, assisted by counsel Ruben A. Jacobe with Elmo Abad (Exhibit "D"), with the
names and signatures of Elmo Abad and Ruben A. Jacobe appearing as counsel for the
accused movant Antonio S. Maravilla (Exhibit "D-1");
5. Also page 3 of the aforesaid motion for deferment of arraignment and trial where the
name and signature of Elmo Abad, together with those of Ruben A. Jacobe, appear as
submitting the aforesaid motion for the consideration and approval of the trial court
(Exhibit "D-2"); and
6. Order of Judge Jorge C. Macli-ing dated July 26, 1983 Exhibit "E") wherein on page 1
thereof appears the statement that the urgent motion for deferment of arraignment and
trial and the urgent motion for withdrawal from court of motor vehicle were filed by "Atty.
Elmo Abad (Exhibit "E-1").
Complainant also presented Exhibit "F", his letter to the branch Clerk of Court, Branch
100, Regional Trial Court, Quezon City requesting for certification that Mr. Abad had
appeared as counsel for a certain Ma. Caroline T. Velez in the case entitled People vs.
Maravilla, et al., with Exhibit "F-1" to indicate that said Clerk of Court was the addressee
of the said letter.
After the original of the above records were presented to and marked as exhibits by the
Investigator, the same were xeroxed and the xerox copies were certified by Atty.
Candido Domingo, Clerk of Court of Branch 100, Regional Trial Court, Quezon City.
Complainant also testified that on December 8, 1983 he was at the 11th floor of the
Quezon City Regional Trial Court NCJR, Branch 100, Quezon City and saw respondent
Abad pass by in coat and tie and because he knew that Mr. Abad is a respondent in a
case before the Supreme Court and had been declared as a non-lawyer in its decision
of March 28, 1983, he (complainant) got curious and followed respondent and saw the
latter enter the sala of Branch 100 of the Regional Trial Court of Quezon City; that he
saw him there and after about twenty minutes when he went back to the same sala, he
saw respondent in the place of the said court where the lawyers were supposed to be
seated; that some days after, he went back to the said sala and inspected the records of
the criminal cases numbered 26084, 26085 and 26086,* which are the subject matters
of the certification of the Clerk of Court, Atty. Domingo, before the Investigator (TSN,
May 26, 1984, pp. 24-26).
Mrs. Eufrocina B. Ison the Court Reporter who took down and transcribed the
stenographic notes of the proceedings in the afternoon of December 8, 1983 in the said
criminal cases in the aforesaid trial court, appeared before the undersigned Investigator
and positively Identified respondent Elmo Abad as the Atty. Elmo Abad who appeared
as counsel for Juan del Gallego III in the aforesaid proceedings that afternoon of
December 8, 1983 (pp. 1 & 2, TSN, May 11, 1984). She furthermore testified that she
has no reason to be interested in this case in Identifying respondent Abad as the one
who appeared in said court on said afternoon of December 8, 1983 (pp. 19-20, TSN,
May 11, 1984).
Respondent, when asked about the aforesaid motions, Exhibits "B" and "D", and the
signatures therein, denied that he filed the same and that the signatures therein are his.
He also denied that he appeared in the hearing in the afternoon of December 8, 1983 in
the said trial court. According to him, he was in Batangas at the time. He also testified
that the only explanation he could give regarding the signatures in the aforesaid exhibits
is that the same could have been effected by Atty. Beltran to show the Supreme Court
that he (respondent) was still illegally practicing law.
In connection with his defense, he filed —
(1) a motion to present the video tape to show his whereabouts at the time of the said
hearing in the afternoon of December 8, 1983 in Branch 100, Regional Trial Court,
Quezon City; and
(2) a motion that his signature in the aforesaid motions filed in the said trial court in said
criminal cases be compared with his genuine signature.
The Investigator orally denied respondent's motion to present the video tape for the
reason that the matter intended to be proved thereby, that is the time of day, cannot be
accurately determined from the film as the same could be doctored by lighting effects
(p. 16, TSN, May 11, 1984).
As to the motion for examination and analysis of respondent's signature, the
Investigator, to afford respondent full opportunity to prove his defense, sought the
assistance of the National Bureau of Investigation to compare respondent's signature in
the aforesaid exhibits with the signatures appearing in the pleadings that he filed in the
Supreme Court, which latter signature he admits as genuine and as his own.
On August 7, 1984, the National Bureau of Investigation submitted its report regarding
the questioned signatures of respondent. Quoted hereunder are its findings and
conclusion:
Findings: Comparative examination of the specimens, under magnification
and stereoscopic microscope, with the aid of photographic enlargements,
reveals that there exist fundamental, significant similarities in writing
characteristics and Identifying details between the questioned and the
standard signatures ELMO S. ABAD, such as in:
1. Structural formation of the elements of the signatures
2. Proportion characteristics
3. Movement impulses
4. Direction of strokes
5. Manner of execution which is free, spontaneous and coordinated.
CONCLUSION: The questioned and the standard signatures ELMO S.
ABAD were written by one and the same person.
The aforesaid documentary and testimonial evidence, as well as the above report of the
NBI, have clearly proved that respondent Abad is still practicing law despite the decision
of this Court of March 28, 1983.
Moreover, the Investigator, thru the Office of the Court Administrator, requested the
Metro Manila courts to inform said Office if a certain Atty. Elmo Abad is appearing or
has appeared in their courts. In response to said query, the Branch Clerk of Court,
Branch XCIV, Quezon City sent to the undersigned certified xerox copies of the
following that showed that Elmo Abad is appearing in Civil Case No. 36501: **

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There was likewise received a certification dated May 9, 1984 from the Branch Clerk of
Court of the Regional Trial Court, National Capital Judicial Region, Pasig, Branch CLIII,
stating that Elmo Abad y Sanchez is appearing before said court as accused in Criminal
Case No. 50651, *** entitled "People of the Philippines vs. Atty. Elmo Abad y Sanchez"
for Qualified Theft (Carnapping).
The actuations of respondent as shown from the foregoing constitute contempt of court
that should be punished more severely considering his temerity in still continuing the
practice of law despite the decision of March 28, 1983.
It is thus respectfully recommended that respondent be:
a. imposed a fine of P2,000.00 payable within ten (10) days from receipt of
this resolution or an imprisonment of twenty (20) days in case of non-
payment thereof, with warning of drastic disciplinary action of
imprisonment in case of any further practice of law after receipt of this
resolution; and
b. debarred from admission to the Philippine Bar until such time that the
Court finds him fit to become such a member.
It is further recommended that a circular be issued to all courts in the Philippines
through the Office of the Court Administrator that respondent Elmo S. Abad has not
been admitted to the Philippine Bar, and is therefore not authorized to practice law.
Respectfully
submitted:
(SGD.) GLORIA C.
PARAS
Clerk of Court
Respondent fined P2,000.00.
G.R. No. 123698 August 5, 1998
ETERNAL GARDENS MEMORIAL PARK CORPORATION, petitioner,
vs.
COURT OF APPEALS and SPS. LILIA SEVILLA and JOSE SEELIN, respondents.

MARTINEZ, A.M., J.:

This is the second time petitioner Eternal Gardens Memorial Park Corporation has come to this Court
assailing the execution of the judgment dated August 24, 1989, rendered by the Regional Trial Court of
Caloocan City in Civil Case No. C-9297. Apparently, hope springs eternal for petitioner, considering that
the issues raised in this second petition for review are but mere reiterations of previously settled issues
which have already attained finality. We now write finis to this controversy which has dragged on for
seventeen (17) years, for as we ruled in Gomez vs. Presiding Judge, RTC, Br. 15, Ozamis City: 1
. . . litigations must end and terminate sometime and somewhere, it being essential to the effective administration of
justice that once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the
fruits of the verdict. Hence, courts must guard themselves against any scheme to bring about that result, for constituted
as they are to put an end to controversies, they should frown upon any attempt to prolong it. Public policy and sound
practice demand that at the risk of occasional errors, judgments of courts should become final and irrevocable at some
definite date fixed by law. Interes rei publicae ut finis sit litium.

The facts:
The case started on May 18, 1981 when private respondent-spouses Jose Seelin and Lilia Sevilla Seelin
filed a complaint against Central Dyeing & Finishing Corporation (Central Dyeing for brevity) for quieting
of title and for declaration of nullity of Transfer Certificate of Title (TCT No. 205942) issued in the name of
said corporation, docketed as Civil Case No. C-9297, before the Regional Trial Court of Caloocan City.
On August 24, 1989, the trial court rendered judgment, 2 the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered:
 Declaring the defendant's Certificate of Title No. 205942 null and void.
Dismissing counterclaim of defendant without pronouncement as to costs.

The aforesaid decision was affirmed 3 by respondent Court of Appeals in CA-G.R. CV No. 25989 on June
25, 1991 and eventually upheld by this Court in G.R. No. L-101819 on November 25, 1991. Said
dismissal became final on March 5, 1992. 4
The RTC decision, having become final and executory, private respondents moved for execution which
was granted by the lower court. Accordingly, a writ of execution of the decision was issued.
Subsequently, private respondents filed an Urgent Manifestation and Motion for an Immediate Writ of
Possession/Break Open Order. The motion was opposed by herein petitioner Eternal Gardens Memorial
Park Corporation contending that it is not submitting to the jurisdiction of the trial court; that it is
completely unaware of the suit between private respondents and Central Dyeing; that it is the true and
registered owner of the lot having bought the same from Central Dyeing; and that it was a buyer in good
faith.
On July 1, 1992, the trial court granted private respondents' motion. Another Order was issued on August
18, 1992 by the trial court holding that the judgment was binding on petitioner, being the successor-in-
interest of defendant Central Dyeing pursuant to Rule 39, Section 48 (b) of the Revised Rules of Court.
Petitioner went to the Court of Appeals in a petition for certiorari. On September 30, 1992 the Court of
Appeals rendered judgment dismissing the petition, excerpts of which read:
We reviewed carefully the assailed orders and find no compelling reason to disturb the same.
Indeed, since petitioner admits that it bought the property from Central Dyeing and Finishing Corporation, defendant in
Civil Case No. C-9297, petitioner is bound by the decision rendered therein by respondent Judge.
Under Section 20, Rule 3, Revised Rules of Court, a transferee pendente lite does not have to be included or
impleaded by name in order to be bound by the judgment because the action or suit may be continued for or against
5
the original party or the transferor and still be binding on the transferee

The motion for reconsideration was also denied by the Court of Appeals on February 18, 1993. 6
On further appeal to this Court, petitioner's petition for review on certiorari, docketed as G.R. No. 109076,
was denied in a resolution dated August 2, 1993. 7 Upon finality of said resolution, this Court issued Entry
of Judgment dated October 21, 1993. 8
Thereafter, private respondents filed another motion for the issuance of a second writ of execution before
the trial court which was granted in the Order of July 20, 1994.
Not willing to give up, petitioner sought a reconsideration. Petitioner's motion was initially granted 9 on
August 29, 1994 by the trial court thru Judge Arturo Romero. However, upon motion of private
respondents, the said order was reconsidered on December 19, 1994 10 by Judge Emilio L. Leachon, Jr.,
who succeeded Judge Romero. Forthwith, alias writs of execution were issued.
Desperately needing a favorable judgment, petitioner, for the second time, filed a petition for certiorari 11
with respondent Court of Appeals (docketed as CA-G.R. SP No. 36591), arguing inter alia: that the
judgment cannot be executed against it because it was not a party to Civil Case No. C-9297; that the
decision of the trial court in said case never mandated Central Dyeing to deliver possession of the
property to the private respondents; that certain facts and circumstances which occurred after the finality
of the judgment will render the execution highly unjust, illegal and inequitable; that the issuance of the
assailed writ of execution violates the lot buyers' freedom of religion and worship; and that private
respondents' title is being questioned in another case.
On September 29, 1995, the respondent court rendered judgment 12 dismissing the petition for certiorari
on the ground that the lower court's decision in Civil Case No. 9297 had long become final and executory.
It ruled, thus:
This Court needs (sic) not belabor the fact that the respondent Court's decision in Civil Case No. 9297 had long
become final and executory. The respondent court's writs of execution and possession could have been implemented a
long time ago if not for the series of legal maneuvers of petitioner Eternal Gardens. . . . Petitioner Eternal Gardens
cannot anymore stop the execution of a final judgment by raising issues which actually have been ruled upon by this
Court in its earlier case with Us in CA-G.R. SP No. 28797. To Our mind, the instant petition is a mere continuation of
petitioner's dilatory tactics so that plaintiffs, although prevailing party, will not benefit at all from a final judgment in their
favor. Thus, the instant petition is obviously, frivolous and dilatory warranting the assessment of double costs of this
suit against petitioner Sec. 3, Rule 142 of the Revised Rules of Court).
 Moreover, as manifested by the plaintiffs, herein private respondents, the instant petition has already become moot
and academic as the property in question was already turned over by the Deputy Sheriff to the plaintiffs, and the writs
of execution and possession fully satisfied. Thus, hopefully, putting the legal battle of this case to rest. (Emphasis
ours.)

The motion for reconsideration was likewise denied on January 30, 1996. 13
Petitioner once again seeks this Court's intervention reiterating in essence the same line of arguments
espoused in their petition before the respondent Court of Appeals.
The petition must fail.
It is a settled rule that once a court renders a final judgment, all the issues between or among the parties
before it are deemed resolved and its judicial functions with respect to any matter related to the
controversy litigated come to an end.
Petitioner's argument that the trial court cannot order it and the one hundred (100) memorial lot owners to
surrender and/or deliver possession of the property in dispute on the ground that they were never parties
to the case between private respondents and Central Dyeing, has long been resolved by respondent
Court of Appeals in CA-G.R. SP No. 28797 when it ruled.
Indeed, since petitioner admits that it bought the property from Central Dyeing and Finishing Corporation, defendant in
Civil Case No. C-9297, petitioner is bound by the decision rendered therein by respondent Judge.
Under Section 20, Rule 3, Revised Rules of Court, a transferee pendente lite does not have to be included or
impleaded by name in order to be bound by the judgment because the action or suit may be continued for or against
14
the original party or the transferor and still be binding on the transferee.

The aforesaid decision was affirmed by this Court in G.R. No. 109076 and attained finality on October 21,
1993. There is, therefore, no need for us to belabor the same issue here.
Further, petitioner's contention that a determination of the issue of possession should first be resolved
before the issuance of a writ of possession is untenable.
Placing private respondents in possession of the land in question is the necessary and logical effect or
consequence of the decision in Civil Case No. C-9297 declaring them as the rightful owners of the
property. As correctly argued by the private respondents, they do not have to institute another action for
the purpose of taking possession of the subject realty.
Petitioner likewise asserts that certain facts and circumstances transpired after the finality of judgment in
Civil Case No. C-9297 which will reader the execution of the said judgment unjust and illegal. It points to
the pendency of Civil Case No. C-11337 before the Regional Trial Court of Caloocan City filed by the
Republic of the Philippines against private respondents for nullification of 22 titles which include the title to
the subject property. Petitioner argues that the pendency of the said case provides a reasonable
justification why execution of the aforesaid judgment and delivery of possession of the subject property
should be permanently stayed or at least held in abeyance until after the final resolution of the case.
We do not agree.
The pendency of Civil Case No. C-11337 for annulment of titles filed by the Republic against private
respondents will not justify the suspension of the execution of the judgment in Civil Case No. C-9297.
This is so because the petitioner's title which originated from Central Dyeing (TCT No. 205942) was
already annulled in the judgment sought to be executed, and which judgment had long been affirmed by
the Court of Appeals and by this Court. Thus, even if, in the remote possibility, the trial court will nullify the
said private respondents' title in Civil Case No. C-11337, as argued by petitioner, the supposed adverse
decision cannot validate TCT No. 205942 and make petitioner the rightful owner of the subject land.
Clearly, the present petition was instituted merely to delay the execution of the judgment.
Finally, petitioner's fear that the grave lots will be disturbed, desecrated and destroyed once the execution
of the judgment proceeds is more imagined than real. A perusal of the Orders of the trial court with regard
to the execution of the judgment reveals that the interests of said burial lot owners have been taken into
account by the trial court when it took steps and made suggestions as to how their rights could be amply
protected. In its Order dated February 13, 1995, the trial court, through Judge Emilio L. Leachon, Jr.,
stated:
The defendant-petitioner are (sic) however not completely without recourse or remedy because they can still go after
the original party-defendant or transferor of the property in question which is Central Dyeing and Finishing Corporation
pursuant to Section 20, Rule 3 of the Rules of Court. And should it be difficult or nay impossible for plaintiff-
respondents to be placed in possession of the subject property, due to defendant-petitioners' arguments that the same
 have already been sold to burial lot buyers, then it should be incumbent for the defendant-petitioners to negotiate with
the plaintiff-respondents for payment in cash of the property subject of their complaint to avoid demolition or
15
desecration since they benefited from the sale of the burial lots.

In another order dated May 4, 1995, the following directive was given, to wit:
The court directs and orders the defendant to give access to the plaintiffs and as proposed by the plaintiffs, they are
given authority to destroy a small portion of the fence so that they can have access to the property. But as to the
demolition of the burial lots, negotiation could be made by the defendant with the former owner so that cash payment or
16
cash settlement be made.

Even the former Presiding Judge Arturo A. Romero, in his Order dated July 20, 1994, imposed the
following limitation on the writ of execution, as follows:
Moreover, considering the manifestation that large areas within the Eternal Gardens have been sold to so many
persons who now have buried their beloved ones in the grave lots adjoining the lot in question, it is therefore, in the
interest of justice and equity, that the enforcement of the writ of possession and break open order should be applied
only to the gate of Eternal Gardens Memorial Park at the eastern side nearest to the parcel of land in question where
the factory of the defendant is located, in order to avoid disturbing the peace of the resting souls over the graves the
17
parcels of land within the said memorial park.

From the above-mentioned orders, it can be seen that the issue as to the status of the burial lot owners
has been properly addressed.
Be that as it may, the petition has been rendered moot and academic in view of the fact that the
questioned Alias Writ of Possession dated December 27, 1994 and the Alias Writ of Execution dated
December 27, 1994 have already been implemented by the Sheriff as shown by the "Sheriffs Return," 18
dated March 31, 1995, with the attached "Turn Over Premises" 19 indicating therein that private
respondents took possession of the subject property.
A note of caution. This case has again delayed the execution of a final judgment for seventeen (17) years
to the prejudice of the private respondents. In the meantime that petitioner has thwarted execution,
interment on the disputed lot has long been going on, so that by the time this case is finally terminated,
the whole lot shall have already been filled with tombstones, leaving nothing for private respondents, the
real owners of the property. This is a mockery of justice.
We note that while lawyers owe entire devotion to the interest of their clients and zeal in the defense of
their client's right, they should not forget that they are officers of the court, bound to exert every effort to
assist in the speedy and efficient administration of justice. They should not, therefore, misuse the rules of
procedure to defeat the ends of justice or unduly delay a case, impede the execution of a judgment or
misuse court processes. 20 In Banogan et. al. vs. Cerna, et. al., 21 we ruled:
As officers of the court, lawyers have a responsibility to assist in the proper administration of justice. They do not
discharge this duty by filing pointless petitions that only add to the workload of the judiciary, especially this Court, which
is burdened enough as it is. A judicious study of the facts and the law should advise them when a case such as this,
should not be permitted to be filed to merely clutter the already congested judicial dockets. They do not advance the
cause of law or their clients by commencing litigations that for sheer lack of merit do not deserve the attention of the
courts.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.
G.R. No. 56279 February 9, 1993
ALLIED BANKING CORPORATION, petitioner,
vs.
THE COURT OF APPEALS, HON. REGINO T. VERIDIANO II, Presiding Judge of the
CFI of Zambales and Olongapo City, Branch I and LORETO AZORES, respondents.
Isagani M. Jungco for petitioner.
Cornelio C. Cardenas & Valeriano S. Peralta for private respondent.

CAMPOS, JR., J.:

This is a petition for review on certiorari of the decision * of the Court of Appeals in C.A.
G.R. No. 09892-SP dated September 30, 1980, dismissing the petition for certiorari and
prohibition filed with the same court and lifting the restraining order issued by it on
October 15, 1979. This petition seeks to set aside the above-mentioned decision, as
well as the orders of the Honorable Regino T. Veridiano II, Presiding Judge of CFI
Branch I, Olongapo City, dated June 28, 1979, August 21, 1979 and October 3, 1979, in
Civil Cases Nos. 95-0 and 2314-0.
The facts, as borne out by the records, are as follows:
Petitioner, through its predecessor-in-interest, the General Bank and Trust Company,
was the mortgagee-purchaser at the foreclosure sale of a 5,011 square-meter lot,
including improvements thereon, owned by Harvey's Trading and Supply Corporation,
situated at National Highway, Old Cabalan, Olongapo City. Private respondent was then
an officer of Harvey's Trading and Supply Corporation prior to and after the foreclosure
sale. On February 20, 1976, petitioner filed a petition for a writ of possession over the
foreclosure property. The same was granted and the Provincial Sheriff of Zambales was
directed to place the petitioner in possession of the subject property and to eject
therefrom all adverse occupants including herein private respondent. Despite such writ,
private respondent refused to vacate the portion occupied by him, hence, on August 10,
1977, petitioner secured an alias writ of possession for the delivery of said portion. On
August 13, 1977, private respondent filed a motion for reconsideration with respect to
the issuance of the alias writ of possession alleging that the 1,365 square-meter lot
which he had been occupying in the concept of an owner is separate and distinct from
the 5,011 square-meter lot mortgaged by Harvey's Trading and Supply Corporation,
which was the subject of the foreclosure sale. This motion was denied and petitioner
was placed in possession of the 5,011 square-meter lot. On August 24, 1977, petitioner
executed a Deed of Sale over the said lot in favor of one Ephraim Gochangco. On
August 25, 1977, private respondent filed a third party claim with the Office of the
Provincial Sheriff protesting the inclusion of his lot in the writ of possession. He likewise
filed a motion to hold the sheriff in contempt of court on the ground that the latter had
illegally dispossessed him of the 1,365 square-meter lot. Both the third party claim and
the motion were denied by the court. Consequently, private respondent instituted Civil
Case No. 2314-0 which is for (1) annulment of the writ of possession, (2) recovery of
possession of the 1,365 square-meter lot and (3) damages. This case was dismissed on
the ground of res judicata in the Order 1 dated March 15, 1978. By way of a petition for
certiorari (CA-G.R. Nos. 08050-51-SP) filed before respondent Court of Appeals, private
respondent sought for the annulment of (1) the Order dated August 10, 1977, issued in
Case No. 95-0, denying the motion of private respondent to exclude the 1,365 square-
meter lot from the writ of possession prayed for by herein petitioner, and (2) the Order,
dated March 15, 1978, dismissing private respondent's complaint in Civil Case No.
2314-0, on the ground of res judicata. On December 11, 1978, respondent Court of
Appeals rendered judgment 2 in said petition, granting the writ prayed for.
Shortly thereafter, private respondent filed a motion for the delivery to him of the 1,365
square-meter lot based upon a claim that the same is in accordance with the aforesaid
decision of the respondent Court of Appeals. This motion was strongly opposed by
petitioner. Acting thereon, respondent judge issued the Order 3 of June 28, 1979, the
dispositive portion of which reads as follows:
 WHEREFORE, the above motion of movant Loreto Azores is granted and the Allied
Banking Corporation is hereby directed to re-deliver to the movant Loreto Azores the
1,365 square meter land which is contiguous to the 5,011 square meters sold in the
foreclosure sale.
The Provincial Sheriff of Zambales or any of his deputies, is hereby directed to place
Loreto Azores in possession of the 1,365 square meter lot which is the subject of this
litigation in possession thereof within fifteen (15) days from receipt of this Order.
Petitioner herein filed a motion for reconsideration thereto alleging among other things
that it cannot comply with the aforesaid Order since the land purchased in the
foreclosure sale had already been sold on August 24, 1977 to Ephraim Gochangco.
Resolving the motion, respondent Judge issued the Order 4 of August 21, 1979, the
dispositive portion of which reads as follows:
WHEREFORE, the parties are directed to make immediate representations with buyer
Ephraim G. Gochangco for the re-delivery and/or sale of the property corresponding to
the adverse claim of plaintiff Loreto Azores and to submit said report with this Court
within a period of ten (10) days from receipt of this Order, otherwise, the order of this
Court dated June 28, 1979 will be given full force and legal effect as against both the
Allied Banking Corporation and Ephraim G. Gochangco.
A second motion for reconsideration was filed by petitioner but the same was likewise
denied by respondent Judge in his Order of October 3, 1979.
On October 13, 1979, petitioner filed a petition for certiorari and prohibition with
respondent Court of Appeals alleging, inter alia, that respondent Judge had acted
without or in excess of its jurisdiction or with grave abuse of discretion in ordering the
re-delivery to Loreto Azores of the 1,365 square-meter lot subject matter of the litigation.
The same was dismissed in a decision 5 promulgated on September 30, 1980. Hence,
this recourse.
The issue in this case is whether or not the court lawfully ordered the re-delivery of the
lot in controversy to Loreto Azores, which land was already sold to one Ephraim G.
Gochangco on August 24, 1977, a day previous to the filing by Loreto Azores of his
Affidavit of Third Party Claim on August 25, 1977.
We rule in the affirmative.
The copies of what appear to be official documents in the records presented before
respondent Court of Appeals show the two lots — the 5,011 square-meter lot pertaining
to petitioner bank, which it eventually sold to Ephraim G. Gochangco, and the 1,365
square-meter lot being claimed by Loreto Azores — to be different and distinct from
each other. Hence, respondent Court of Appeals correctly upheld the nullification of the
Order of August 10, 1977 of respondent Judge ordering the inclusion of private
respondent's lot in the alias writ of possession issued in favor of petitioner bank
"because it included or covered the portion, consisting of 1,365 square-meters,
occupied by herein private respondent who was not a party to Case No. 95-0 and who
was not afforded his day in court". 6 The dispossession of private respondent from the lot
occupied by him without giving him any opportunity to be heard on the matter was
tantamount to a deprivation of property without due process of law. This We cannot
countenance. We have ruled time and again that no man shall be affected by a
proceeding to which he is a stranger. 7 It is a fundamental doctrine of the law that a
party, to be affected by a personal judgment, must have a day in court and an
opportunity to be heard. 8 To rule otherwise would be to render nugatory the due
process clause of the Constitution.
Furthermore, petitioner bank is estopped from putting up the defense that it cannot now
re-deliver the 1,365 square-meter lot that belongs to Loreto Azores as said lot had
already been sold to Ephraim G. Gochangco. In the Deed of Sale 9 executed between
petitioner bank and Ephraim G. Gochangco, both parties admitted the adverse claim of
Loreto Azores over the land subject of the sale. In fact, the purchase price to be paid by
the buyer, Ephraim G. Gochangco, was conditioned on the said adverse claim. Thus,
Should the BUYER fail to perfect title over the subject parcel of unregistered land on
account of an adverse claim to the same parcel of land by a certain Loreto Azores, the
SELLER hereby agrees to an adjustment in the purchase price. 10 (Emphasis supplied)
Hence, Ephraim G. Gochangco's claim that he cannot be bound by the judgment
of respondent Court of Appeals ordering the re-delivery to Loreto Azores of the
1,365 square-meter lot included in the Deed of Sale on the ground that he was
not a party to the case is utterly devoid of merit. Not only that, Rule 39, Section
49(b) of the Revised Rules of Court is explicit on the matter:
Sec. 49. Effect of judgments. — The effect of a judgment or final order rendered by a
court or judge of the Philippines, having jurisdiction to pronounce judgment or order, may
be as follows:
xxx xxx xxx
(b) In other cases the judgment or order is with respect to the matter directly
adjudged . . ., conclusive between the parties and their successors in interest by title
subsequent to the commencement of the
action . . . .
In this case, Ephraim G. Gochangco is a successor-in-interest of petitioner as he
acquired title to the property while the same was under litigation. He is, therefore,
conclusively bound by the judgment of respondent Court of Appeals ordering the
re-delivery of the 1,365 square-meter lot of Loreto Azores.
Further still, Ephraim G. Gochangco is not a buyer in good faith. In Casipit vs. Court of
Appeals, 11 We had the occasion to define what a purchaser in good faith is, thus:
A purchaser in good faith is one who buys the property of another without notice that
some other person has a right to, or interest in, such property and pays a full and fair
price for the same, at the time of such purchase, or before he has notice of the claim or
interest of some other person in the property . . . .
Ephraim G. Gochangco, in this case, bought the property with the full awareness
that Loreto Azores has an adverse claim over the same. He agreed to buy the
property on the condition that the purchase price shall be subject to adjustment
on account of Loreto Azores' adverse claim. Hence, being a buyer in bad faith,
he cannot now hide himself under the mantle of the law and hold on to the
property that was wrongfully sold to him. He must re-deliver the 1,365 square-
meter lot that was found to belong to Loreto Azores. His remedy is to ask for
reduction of the price of the land that he paid to petitioner as stipulated in the
Deed of Sale entered into between him and the latter.
WHEREFORE, premises considered, We hereby DENY the petition for lack of merit and
consequently DISMISS the same. No costs.
SO ORDERED.
Narvasa, C.J., Feliciano and Regalado, JJ., concur.
Nocon, J., took no part.
ADM. CASE No. 7006 October 9, 2007
RE : SUSPENSION OF ATTY. ROGELIO Z. BAGABUYO, FORMER SENIOR STATE
PROSECUTOR.
DECISION
AZCUNA, J.:
This administrative case stemmed from the events of the proceedings in Crim. Case No. 5144,
entitled People v. Luis Bucalon Plaza, heard before the sala of Presiding Judge Jose Manuel P.
Tan, Regional Trial Court (RTC) of Surigao City, Branch 29.
Crim. Case No. 5144 was originally raffled to the sala of Judge Floripinas C. Buyser, RTC of
Surigao City, Branch 30. In an Order dated March 14, 2002, Judge Buyser denied the Demurrer
to the Evidence of the accused, declaring that the evidence thus presented by the prosecution was
sufficient to prove the crime of homicide and not the charge of murder. Consequently, the
counsel for the defense filed a Motion to Fix the Amount of Bail Bond. Respondent Atty.
Rogelio Z. Bagabuyo, then Senior State Prosecutor and the deputized prosecutor of the case,
objected thereto mainly on the ground that the original charge of murder, punishable with
reclusion perpetua, was not subject to bail under Sec. 4, Rule 114 of the Rules of Court.1
In an Order dated August 30, 2002,2 Judge Buyser inhibited himself from further trying the case
because of the "harsh insinuation" of Senior Prosecutor Rogelio Z. Bagabuyo that he "lacks the
cold neutrality of an impartial magistrate," by allegedly suggesting the filing of the motion to fix
the amount of bail bond by counsel for the accused.
The case was transferred to Branch 29 of the RTC of Surigao City, presided by Judge Jose
Manuel P. Tan. In an Order dated November 12, 2002, Judge Tan favorably resolved the Motion
to Fix the Amount of Bail Bond, and fixed the amount of the bond at P40,000.
Respondent filed a motion for reconsideration of the Order dated November 12, 2002, which
motion was denied for lack of merit in an Order dated February 10, 2003. In October, 2003,
respondent appealed from the Orders dated November 12, 2002 and February 10, 2003, to the
Court of Appeals (CA).
Instead of availing himself only of judicial remedies, respondent caused the publication of an
article regarding the Order granting bail to the accused in the August 18, 2003 issue of the
Mindanao Gold Star Daily. The article, entitled "Senior prosecutor lambasts Surigao judge for
allowing murder suspect to bail out," reads:
SENIOR state prosecutor has lashed at a judge in Surigao City for allowing a murder
suspect to go out on bail.
Senior state prosecutor Rogelio Bagabuyo lambasted Judge Manuel Tan of the Regional
Trial Court (RTC) Branch 29 based in Surigao City for ruling on a motion that sought a
bailbond for Luis Plaza who stands charged with murdering a policeman . . . .
Plaza reportedly posted a P40-thousand bail bond.
Bagabuyo argued that the crime of murder is a non-bailable offense. But Bagabuyo
admitted that a judge could still opt to allow a murder suspect to bail out in cases when
the evidence of the prosecution is weak.
 But in this murder case, Bagabuyo said the judge who previously handled it, Judge
F[lori]pinas B[uy]ser, described the evidence to be strong. B[uy]ser inhibited from the
case for an unclear reason.
xxx
Bagabuyo said he would contest Tan's decision before the Court of Appeals and would
file criminal and administrative charges of certiorari against the judge.
Bagabuyuo said he was not afraid of being cited in contempt by Judge Tan.
"This is the only way that the public would know that there are judges there who are
displaying judicial arrogance." he said.3
In an Order dated August 21, 2003, the RTC of Surigao City, Branch 29, directed respondent and
the writer of the article, Mark Francisco of the Mindanao Gold Star Daily, to appear in court on
September 20, 2003 to explain why they should not be cited for indirect contempt of court for the
publication of the article which degraded the court and its presiding judge with its lies and
misrepresentation.
The said Order stated that contrary to the statements in the article, Judge Buyser described the
evidence for the prosecution as not strong, but sufficient to prove the guilt of the accused only
for homicide. Moreover, it was not true that Judge Buyser inhibited himself from the case for an
unclear reason. Judge Buyser, in an Order dated August 30, 2002, declared in open court in the
presence of respondent that he was inhibiting himself from the case due to the harsh insinuation
of respondent that he lacked the cold neutrality of an impartial judge.
On the scheduled hearing of the contempt charge, Mark Francisco admitted that the Mindanao
Gold Star Daily caused the publication of the article. He disclosed that respondent, in a press
conference, stated that the crime of murder is non-bailable. When asked by the trial court why he
printed such lies, Mr. Francisco answered that his only source was respondent.4 Mr. Francisco
clarified that in the statement alleging that Judge Buyser inhibited himself from the case for an
unclear reason, the phrase "for an unclear reason," was added by the newspaper's Executive
Editor Herby S. Gomez.5
Respondent admitted that he caused the holding of the press conference, but refused to answer
whether he made the statements in the article until after he shall have filed a motion to dismiss.
For his refusal to answer, the trial court declared him in contempt of court pursuant to Sec. 3,
Rule 71 of the Rules of Court.6 The Court's Order dated September 30, 2003 reads:
ORDER
Mr. Mark Francisco for publishing this article which is a lie clothed in half truth to give it
a semblance of truth is hereby ordered to pay a fine of P10,000. Prosecutor Bagabuyo, for
obstinately refusing to explain why he should not be cited for contempt and admitting
that the article published in the Mindanao Gold Star Daily on August 18, 2003 and
quoted in the Order of this Court dated August 21, 2003 which is contemptuous was
caused by him to be published, is hereby adjudged to have committed indirect contempt
of Court pursuant to Section 3 of Rule 71 of the Rules of Court and he is hereby ordered
to suffer the penalty of 30 days in jail. The BJMP is hereby ordered to arrest Prosecutor
Rogelio Z. Bagabuyo if he does not put up a bond of P100,000.00.
SO ORDERD.7
Respondent posted the required bond and was released from the custody of the law. He appealed
the indirect contempt order to the CA.
Despite the citation of indirect contempt, respondent presented himself to the media for
interviews in Radio Station DXKS, and again attacked the integrity of Judge Tan and the trial
court's disposition in the proceedings of Crim. Case No. 5144.
In an Order dated October 20, 2003, the RTC of Surigao City, Branch 29, required respondent to
explain and to show cause within five days from receipt thereof why he should not be held in
contempt for his media interviews that degraded the court and the presiding judge, and why he
should not be suspended from the practice of law for violating the Code of Professional
Responsibility, specifically Rule 11.05 of Canon 118 and Rule 13.02 of Canon 13.9
In the Order, the trial court stated that respondent was interviewed by Jun Clergio, and that the
interview was repeatedly aired on September 30, 2003 and in his news program between 6:00
and 8:00 a.m. on October 1, 2003. He was also interviewed by Tony Consing on October 1 and
2, 2003, between 8:00 and 9:00 a.m. in his radio program. In those radio interviews, respondent
allegedly called Judge Tan a judge who does not know the law, a liar, and a dictator who does
not accord due process to the people.
The hearing for the second contempt charge was set on December 4, 2003.
On November, 20, 2003, respondent filed an Urgent Motion for Extension of Time to File
Answer to Contempt alleging that he was saddled with work of equal importance and needed
ample time to answer the same. He also prayed for a bill of particulars in order to properly
prepare for his defense.
In an Order dated November 20, 2003, the trial court denied the motion. It stated that a bill of
particulars is not applicable in contempt proceedings, and that respondent's actions and
statements are detailed in the Order of October 20, 2003.
On the scheduled hearing of December 4, 2003 respondent neither appeared in court nor
informed the court of his absence. The trial court issued an Order dated December 4, 2003
cancelling the hearing "to give Prosecutor Bagabuyo all the chances he asks for," and ordered
him to appear on January 12, 2004 to explain in writing or orally why he should not be cited in
contempt of court pursuant to the facts stated in the Order dated October 20, 2003. However,
respondent did not appear in the scheduled hearing of January 12, 2004.
On January 15, 2004, the trial court received respondent's Answer dated January 8, 2004.
Respondent denied the charge that he sought to be interviewed by radio station DXKS. He,
however, stated that right after the hearing of September 30, 2003, he was approached by
someone who asked him to comment on the Order issued in open court, and that his comment
does not fall within the concept of indirect contempt of court. He also admitted that he was
interviewed by his friend, Tony Consing, at the latter's instance. He justified his response during
the interview as a simple exercise of his constitutional right of freedom of speech and that it was
not meant to offend or malign, and was without malice.
On February 8, 2004, the trial court issued an Order, the dispositive portion of which reads:
WHEREFORE, finding preponderant evidence that Prosecutor Bagabuyo has grossly
violated the Canons of the legal profession and [is] guilty of grave professional
misconduct, rendering him unfit to continue to be entrusted with the duties and
responsibilities belonging to the office of an attorney, he is hereby SUSPENDED from
the practice of law.
Likewise, he is also found guilty of indirect contempt of court, for which he is hereby
ordered to suffer the penalty of IMPRISONMENT for ninety (90) days to be served at the
 Surigao City Jail and to pay the maximum fine of THIRTY THOUSAND PESOS
(P30,000.00). Future acts of contempt will be dealt with more severely.
Let copies of the relevant records be immediately forwarded to the Supreme Court for
automatic review and for further determination of grounds for [the] disbarment of
Prosecutor Rogelio Z. Bagabuyo.10
The trial court found respondent's denials to be lame as the tape of his interview on October 2,
2003, duly transcribed, showed disrespect of the court and its officers, thus:
TONY CONSING: Fiscal, nanglabay ang mga oras, nanglabay ang gamay'ng panahon
ang samad sa imong kasingkasing nagpabilin pa ba ni. O ingnon nato duna na bay
pagbag-o sa imong huna-huna karon?
(Fiscal, after the lapse of time, are you still hurt? Or have you not changed your mind
yet?)
BAGABUYO : Ang akong huna-huna kon aduna man ugaling pagbag-o ang pagsiguro,
ang mga Huwes nga dili mahibalo sa balaod tangtangon pagka abogado, mao kana.
(If my mind has changed at all, it is that I ensure that all judges who are ignorant of the
law should be disbarred. That's it.)
xxx
BAGABUYO : Mao kana ang tinuod, Ton, ug kining akong guibatonan karon nga
hunahuna mahitungod nianang mga Huwes nga dili kahibalo sa balaod, magkadugay
magkalami. Kada adlao nagatoon ako. Nagabasa ako sa mga bag-ong jurisprudence ug
sa atong balaod aron sa pagsiguro gayod nga inigsang-at unya nako sa kaso nga
disbarment niining di mahibalo nga Huwes, sigurado gayod ako nga katangtangan siya
sa lisensiya . . . . Ang kini nga Huwes nga dili mahibalo sa balaod, pagatangtangon na,
dili lamang sa pagka-Huwes kon dili sa pagka-abogado. Tan-awa ra gyod kining iyang
gibuhat nga Order, Ton, ang iyang pagkabakakon . . . .
(That's true, Ton, and this conviction I have now about judges who are ignorant of the
law is made firmer by time. I study everyday. I read new jurisprudence and the law to
insure that when I file the disbarment case against this Judge who does not know his law,
I am certain that he loses his license. . . . This judge who is ignorant of the law should not
only be removed as a judge but should also be disbarred. Just take a look at his Order,
Ton, and see what a liar he is . . . .)
xxx
BAGABUYO : Yes, nag-ingon ang iyang Order. . . . Ngano nga nakaingon ako nga
bakakon kini, nag-ingon nga kini konong order given in open court, ang kalooy sa dios,
ang iyang order sa Korte wala siya mag-ingon ug kantidad nga P100,000.00 nga bail
bond. . . .
(Yes, his Order said that . . . . Why did I say that he is a liar? It states that this Order was
"given in open court," and in God's mercy, he did not state the amount of P100,000.00 as
bail bond. . . .)
BAGABUYO : Kay dili man lagi mahibalo sa balaod, ako
siyang gui-ingnan, Your Honor, I have the right to appeal. Mibalik dayon, ug miingon
siya, BJMP arrest Bagabuyo.
(Because he does not know the law, I said, "Your Honor, I have the right to appeal." Then
he came back and said, "BJMP, arrest Bagabuyo.")
xxx
BAGABUYO : . . . P100,000.00 ang iyang guipapiyansa.
Naunsa na? Dinhi makita nimo ang iyang pagka gross ignorance of the law. . . .
(He imposed a bail of P100,000.00. How come? This is where you will see his gross
ignorance of the law. . . . )
xxx
TONY CONSING : So karon, unsay plano nimo karon?
(So what is your plan now?)
BAGABUYO : Sumala sa akong gui-ingon moundang lang ako kon matangtang na siya
sa pagka abogado. . . .
(As I have said, I will only stop if he is already disbarred. . . .)
xxx
BAGABUYO : Nasuko siya niini kay hambugero kuno, pero angayan niyang hibaw-an
nga ang trabajo sa Huwes dili ang pagtan-aw kon ang tawo hambugero . . . . Ug ang
akong gisulti mao lamang ang balaod nga siya in fact at that time I said he is not
conversant of the law, with regards to the case of murder. . . .
(He got angry because I was allegedly bragging but he should know that it is not for a
judge to determine if a person is a braggart. . . .And what I said was based on the law. In
fact, at that time, I said he is not conversant of the law, with regards to the case of murder
. . . .)
xxx
BAGABUYO : Ah, mi sit down sab ako, contempt ra ba kadto . . . . Mao kana, pero unsa
may iyang katuyoan – ang iyang katuyoan nga ipa-adto ako didto kay didto, iya akong
pakauwawan kay iya kong sikopon, iya kong ipa-priso, pero kay di man lagi mahibalo sa
balaod, ang iyang gui orderan BJMP, intawon por dios por Santo, Mr. Tan, pagbasa
intawon ug balaod, naunsa ka ba Mr. Tan? Unsa may imong hunahuna nga kon ikaw
Huwes, ikaw na ang diktador, no way, no sir, ours is a democratic country where all and
everyone is entitled to due process of law – you did not accord me due process of
law . . . .
(I sat down. . . . That's it. But what was his purpose? He made me come in order to
humiliate me because he wanted me arrested, he wanted me imprisoned, but because he is
ignorant of the law, he ordered the BMJP. For God's sake, Mr. Tan, what's wrong with
you, Mr. Tan? Please read the law. What is your thinking? That when you are a judge,
you are also a dictator? No way, no sir, ours is a democratic country where all and
everyone is entitled to due process of law – you did not accord me due process of
law. . . .)
TONY CONSING: So mopasaka kang disbarment, malaumon kita nga maaksiyonan
kini, with all this problem sa Korte Suprema.
(So you are filing a disbarment case? We hope that this be given action with all the
problems in the Supreme Court.)
 BAGABUYO : Dili ako mabalaka niana kay usa ka truck ang akong jurisprudence, nga
ang mga Huwes nga di mahibalo sa balaod pagatangtangon gayod sa ilang pagka
Huwes. . . . Apan unsa man intawon ang balaod ang iyang gibasa niini nadunggan ko
nga kini kuno siya madjongero, mao bitaw na, madjong ang iyang guitunan?
(I am not worried because I have a truckload of jurisprudence that judges who are
ignorant of the law must be removed from the Bench. But what law has he been reading?
I heard that he is a mahjong aficionado (mahjongero) and that is why he is studying
mahjong.11
The trial court concluded that respondent, as a member of the bar and an officer of the court, is
duty bound to uphold the dignity and authority of the court, and should not promote distrust in
the administration of justice.
The trial court stated that it is empowered to suspend respondent from the practice of law under
Sec. 28, Rule 138 of the Rules of Court12 for any of the causes mentioned in Sec. 2713 of the
same Rule. Respondent was given the opportunity to be heard, but he opted to be silent. Thus, it
held that the requirement of due process has been duly satisfied.
In accordance with the provisions of Sec. 29,14 Rule 138 and Sec. 9,15 Rule 139 of the Rules of
Court, the RTC of Surigao City, Branch 29, transmitted to the Office of the Bar Confidant the
Statement of Facts of respondent's suspension from the practice of law, dated July 14, 2005,
together with the order of suspension and other relevant documents.
In its Report dated January 4, 2006, the Office of the Bar Confidant found that the article in the
August 18, 2003 issue of the Mindanao Gold Star Daily, which maligned the integrity and
independence of the court and its officers, and respondent's criticism of the trial court's Order
dated November 12, 2002, which was aired in radio station DXKS, both in connection with
Crim. Case No. 5144, constitute grave violation of oath of office by respondent. It stated that the
requirement of due process was complied with when respondent was given an opportunity to be
heard, but respondent chose to remain silent.
The Office of the Bar Confidant recommended the implementation of the trial court's order of
suspension dated February 8, 2004, and that respondent be suspended from the practice of law
for one year, with a stern warning that the repetition of a similar offense will be dealt with more
severely.
The Court approves the recommendation of the Office of the Bar Confidant. It has been
reiterated in Gonzaga v. Villanueva, Jr.16 that:
A lawyer may be disbarred or suspended for any violation of his oath, a patent disregard
of his duties, or an odious deportment unbecoming an attorney. Among the grounds
enumerated in Section 27, Rule 138 of the Rules of Court are deceit; malpractice; gross
misconduct in office; grossly immoral conduct; conviction of a crime involving moral
turpitude; any violation of the oath which he is required to take before admission to the
practice of law; willful disobedience of any lawful order of a superior court; corrupt or
willful appearance as an attorney for a party to a case without authority to do so. The
grounds are not preclusive in nature even as they are broad enough as to cover practically
any kind of impropriety that a lawyer does or commits in his professional career or in his
private life. A lawyer must at no time be wanting in probity and moral fiber which are not
only conditions precedent to his entrance to the Bar, but are likewise essential demands
for his continued membership therein.
Lawyers are licensed officers of the courts who are empowered to appear, prosecute and defend;
and upon whom peculiar duties, responsibilities and liabilities are devolved by law as a
consequence.17 Membership in the bar imposes upon them certain obligations.18 Canon 11 of the
Code of Professional Responsibility mandates a lawyer to "observe and maintain the respect due
to the courts and to judicial officers and [he] should insist on similar conduct by others." Rule
11.05 of Canon 11 states that a lawyer "shall submit grievances against a judge to the proper
authorities only."
Respondent violated Rule 11.05 of Canon 11 when he admittedly caused the holding of a press
conference where he made statements against the Order dated November 12, 2002 allowing the
accused in Crim. Case No. 5144 to be released on bail.
Respondent also violated Canon 11 when he indirectly stated that Judge Tan was displaying
judicial arrogance in the article entitled, Senior prosecutor lambasts Surigao judge for allowing
murder suspect to bail out, which appeared in the August 18, 2003 issue of the Mindanao Gold
Star Daily. Respondent's statements in the article, which were made while Crim. Case No. 5144
was still pending in court, also violated Rule 13.02 of Canon 13, which states that "a lawyer shall
not make public statements in the media regarding a pending case tending to arouse public
opinion for or against a party."
In regard to the radio interview given to Tony Consing, respondent violated Rule 11.05 of Canon
11 of the Code of Professional Responsibility for not resorting to the proper authorities only for
redress of his grievances against Judge Tan. Respondent also violated Canon 11 for his
disrespect of the court and its officer when he stated that Judge Tan was ignorant of the law, that
as a mahjong aficionado, he was studying mahjong instead of studying the law, and that he was a
liar.
Respondent also violated the Lawyer's Oath, as he has sworn to "conduct [himself] as a lawyer
according to the best of [his] knowledge and discretion with all good fidelity as well to the courts
as to [his] clients."
As a senior state prosecutor and officer of the court, respondent should have set the example of
observing and maintaining the respect due to the courts and to judicial officers. Montecillo v.
Gica19 held:
It is the duty of the lawyer to maintain towards the courts a respectful attitude. As an
officer of the court, it is his duty to uphold the dignity and authority of the court to which
he owes fidelity, according to the oath he has taken. Respect for the courts guarantees the
stability of our democratic institutions which, without such respect, would be resting on a
very shaky foundation.
The Court is not against lawyers raising grievances against erring judges but the rules clearly
provide for the proper venue and procedure for doing so, precisely because respect for the
institution must always be maintained.
WHEREFORE, in view of the foregoing, Atty. Rogelio Z. Bagabuyo is found guilty of
violating Rule 11.05, Canon 11 and Rule 13.02, Canon 13 of the Code of Professional
Responsibility, and of violating the Lawyer's Oath, for which he is SUSPENDED from the
practice of law for one (1) year effective upon finality of this Decision, with a STERN
WARNING that the repetition of a similar offense shall be dealt with more severely.
Let copies of this Decision be furnished the Office of the Bar Confidant to be appended to
respondent's personal record as an attorney, the Integrated Bar of the Philippines, the Department
of Justice, and all courts in the country for their information and guidance.
No costs.
SO ORDERED.
Puno, Chief Justice Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-
Martinez, Corona, Carpio-Morales, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura,
Reyes, JJ., concur.
G.R. No. 79690-707 February 1, 1989
ENRIQUE A. ZALDIVAR, petitioner,
vs.
THE HONORABLE SANDIGANBAYAN and HONORABLE RAUL M. GONZALEZ,
claiming to be and acting as Tanodbayan-Ombudsman under the 1987
Constitution, respondents.
G.R. No. 80578 February 1, 1989
ENRIQUE A. ZALDIVAR, petitioner,
vs.
HON. RAUL M. GONZALES, claiming to be and acting as Tanodbayan-
Ombudsman under the 1987 Constitution, respondent.
RESOLUTION
PER CURIAM:
We have examined carefully the lengthy and vigorously written Motion for
Reconsideration dated October 18, 1988 filed by counsel for respondent Raul M.
Gonzalez, relating to the per curiam Resolution of the Court dated October 7, 1988. We
have reviewed once more the Court's extended per curiam Resolution, in the light of the
argument adduced in the Motion for Reconsideration, but must conclude that we find no
sufficient basis for modifying the conclusions and rulings embodied in that Resolution.
The Motion for Reconsideration sets forth copious quotations and references to foreign
texts which, however, whatever else they may depict, do not reflect the law in this
jurisdiction.
Nonetheless, it might be useful to develop further, in some measure, some of the
conclusions reached in the per curiam Resolution, addressing in the process some of
the "Ten (10) Legal Points for Reconsideration," made in the Motion for
Reconsideration.
1. In respondent's point A, it is claimed that it was error for this Court "to
charge respondent [with] indirect contempt and convict him of direct
contempt."
In the per curiam Resolution (page 50), the Court concluded that "respondent Gonzalez
is guilty both of contempt of court in facie curiae and of gross misconduct as an officer
of the court and member of the bar." The Court did not use the phrase "in facie curiae"
as a technical equivalent of "direct contempt," though we are aware that courts in the
United States have sometimes used that phrase in speaking of "direct contempts' as
"contempts in the face of the courts." Rather, the court sought to convey that it regarded
the contumacious acts or statements (which were made both in a pleading filed before
the Court and in statements given to the media) and the misconduct of respondent
Gonzalez as serious acts flaunted in the face of the Court and constituting a frontal
assault upon the integrity of the Court and, through the Court, the entire judicial system.
What the Court would stress is that it required respondent, in its Resolution dated 2 May
1988, to explain "why he should not be punished for contempt of court and/or subjected
to administrative sanctions" and in respect of which, respondent was heard and given
the most ample opportunity to present all defenses, arguments and evidence that he
wanted to present for the consideration of this Court. The Court did not summarily
impose punishment upon the respondent which it could have done under Section 1 of
Rule 71 of the Revised Rules of Court had it chosen to consider respondent's acts as
constituting "direct contempt."
2. In his point C, respondent's counsel argues that it was "error for this
Court to charge respondent under Rule 139 (b) and not 139 of the
Revised Rules of Court."
In its per curiam Resolution, the Court referred to Rule 139 (b) of the Revised Rules of
Court pointing out that:
[R]eference of complaints against attorneys either to the Integrated Bar of the Philippines
or to the Solicitor General is not mandatory upon the Supreme Court such reference to
the Integrated Bar of the Philippines or to the Solicitor General is certainly not an
exclusive procedure under the terms of Rule 139 (b) of the Revised Rules of Court,
especially where the charge consists of acts done before the Supreme Court.
The above statement was made by the Court in response to respondent's motion for
referral of this case either to the Solicitor General or to the Integrated Bar of the
Philippines under Rule 139 (b). Otherwise, there would have been no need to refer to
Rule 139 (b). It is thus only necessary to point out that under the old rule, Rule 139,
referral to the Solicitor General was similarly not an exclusive procedure and was not
the only course of action open to the Supreme Court. It is well to recall that under
Section 1 (entitled "Motion or complaint") of Rule 139, "Proceedings for the removal or
suspension of attorneys may be taken by the Supreme Court, (1) on its own motion, or
(2) upon the complaint under oath of another in writing" (Parentheses supplied). The
procedure described in Sections 2 et seq. of Rule 139 is the procedure provided for
suspension or disbarment proceedings initiated upon sworn complaint of another
person, rather than a procedure required for proceedings initiated by the Supreme Court
on its own motion. It is inconceivable that the Supreme Court would initiate motu proprio
proceedings for which it did not find probable cause to proceed against an attorney.
Thus, there is no need to refer a case to the Solicitor General, which referral is made
"for investigation to determine if there is sufficient ground to proceed with the
prosecution of the respondent" (Section 3, Rule 139), where the Court itself has initiated
against the respondent. The Court may, of course, refer a case to the Solicitor General
if it feels that, in a particular case, further factual investigation is needed. In the present
case, as pointed out in the per curiam Resolution of the Court (page 18), there was "no
need for further investigation of facts in the present case for it [was] not substantially
disputed by respondent Gonzalez that he uttered or wrote certain statements attributed
to him" and that "in any case, respondent has had the amplest opportunity to present
his defense: his defense is not that he did not make the statements ascribed to him but
that those statements give rise to no liability on his part, having been made in the
exercise of his freedom of speech. The issues which thus need to be resolved here are
issues of law and of basic policy and the Court, not any other agency, is compelled to
resolve such issues."
In this connection, we note that the quotation in page 7 of the Motion for
Reconsideration is from a dissenting opinion of Mr. Justice Black in Green v. United
State. 1 It may be pointed out that the majority in Green v. United States, through Mr.
Justice Harlan, held, among other things, that: Federal courts do not lack power to
impose sentences in excess of one year for criminal contempt; that criminal contempts
are not subject to jury trial as a matter of constitutional right; nor does the (US)
Constitution require that contempt subject to prison terms of more than one year be
based on grand jury indictments.
In his concurring opinion in the same case, Mr. Justice Frankfurter said:
Whatever the conflicting views of scholars in construing more or less dubious
manuscripts of the Fourteenth Century, what is indisputable is that from the foundation of
the United States the constitutionality of the power to punish for contempt without the
intervention of a jury has not been doubted. The First Judiciary Act conferred such a
power on the federal courts in the very act of their establishment, 1 State 73, 83, and of
the Judiciary Committee of eight that reported the bill to the Senate, five member
including the chairman, Senator, later to be Chief Justice, Ellsworth, had been delegates
to the Constitutional Convention (Oliver Ellsworth, Chairman, William Paterson, Caleb
Strong, Ricard Basett, William Few. 1 Annals of Cong 17). In the First Congress itself no
less than nineteen member including Madison who contemporaneously introduced the
Bill of Rights, had been delegates to the Convention. And when an abuse under this
power manifested itself, and led Congress to define more explicitly the summary power
vested in the courts, it did not remotely deny the existence of the power but merely
defined the conditions for its exercise more clearly, in an Act "declaratory of the law
concerning contempts of court." Act of Mar. 2, 1831, 4 Stat 487.
xxxxxxxxx
Nor has the constitutionality of the power been doubted by this Court throughout its
existence . In at least two score cases in this Court, not to mention the vast mass of
decisions in the lower federal courts, the power to punish summarily has been accepted
without question. ... 2
To say that a judge who punishes a contemnor judges his own cause, is simplistic at
best. The judge who finds himself compelled to exercise the power to punish for
contempt does so not really to avenge a wrong inflicted upon his own person; rather he
upholds and vindicates the authority, dignity and integrity of the judicial institution and its
claim to respectful behaviour on the part of all persons who appears before it, and most
especially from those who are officers of the court.
3. In his point D, respondent counsel urges that it is error "for this Court to
apply the "visible tendency" rule rather than the "clear and present
danger" rule in disciplinary and contempt charges."
The Court did not purport to announce a new doctrine of "visible tendency," it was, more
modestly, simply paraphrasing Section 3 (d) of Rule 71 of the Revised Rules of Court
which penalizes a variety of contumacious conduct including: "any improper conduct
tending, directly or indirectly, to impede, obstruct or degrade the administration of
justice."
The "clear and present danger" doctrine invoked by respondent's counsel is not a magic
incantation which dissolves all problems and dispenses with analysis and judgment in
the testing of the legitimacy of claims to free speech, and which compels a court to
exonerate a defendant the moment the doctrine is invoked, absent proof of impending
apocalypse. The clear and present danger" doctrine has been an accepted method for
marking out the appropriate limits of freedom of speech and of assembly in certain
contexts. It is not, however, the only test which has been recognized and applied by
courts. In Logunzad v. Vda. de Gonzales, 3 this Court, speaking through Mme. Justice
Melencio-Herrera said:
...The right of freedom of expression indeed, occupies a preferred position in the
"hierarchy of civil liberties" (Philippine Blooming Mills Employees Organization v.
Philippine Blooming Mills Co., Inc., 51 SCRA 191 [1963]. It is not, however, without
limitations. As held in Gonzales v. Commission on Elections, 27 SCRA 835, 858 [1960]:
"From the language of the specific constitutional provision, it would appear that the right
is not susceptible of any limitation. No law may be passed abridging the freedom of
speech and of the press. The realities of life in a complex society preclude however, a
literal interpretation. Freedom of expression is not an absolute. It would be too much to
insist that all times and under all circumstances it should remain unfettered and
unrestrained. There are other societal values that press for recognition."
The prevailing doctrine is that the clear and present danger rule is such a limitation.
Another criterion for permissible limitation on freedom of speech and of the press, which
includes such vehicles of the mass media as radio, television and the movies, is the
"balancing-of-interests test" (Chief Justice Enrique M. Fernando on the Bill of Rights,
1970 ed., p. 79). The principle "requires a court to take conscious and detailed
consideration of the interplay of interests observable in a given situation or type of
situation (Separate Opinion of the late Chief Justice Castro in Gonzales v. Commission
on Elections, supra, p. 899). (Emphasis Supplied) 4
Under either the "clear and present danger" test or the "balancing-of-interest test," we
believe that the statements here made by respondent Gonzalez are of such a nature
and were made in such a manner and under such circumstances, as to transcend the
permissible limits of free speech. This conclusion was implicit in the per curiam
Resolution of October 7, 1988. It is important to point out that the "substantive evil"
which the Supreme Court has a right and a duty to prevent does not, in the instant case,
relate to threats of physical disorder or overt violence or similar disruptions of public
order. 5 What is here at stake is the authority of the Supreme Court to confront and
prevent a "substantive evil" consisting not only of the obstruction of a free and fair
hearing of a particular case but also the avoidance of the broader evil of the degradation
of the judicial system of a country and the destruction of the standards of professional
conduct required from members of the bar and officers of the courts. The "substantive
evil" here involved, in other words, is not as palpable as a threat of public disorder or
rioting but is certainly no less deleterious and more far reaching in its implications for
society.
4. In his point H, respondent's counsel argues that it is error "for this Court
to hold that intent is irrelevant in charges of misconduct." What the Court
actually said on this point was:
Respondent Gonzalez disclaims an intent to attack and denigrate the Court. The
subjectivities of the respondent are irrelevant so far as characterization of his conduct or
misconduct is concerned. He will not, however, be allowed to disclaim the natural and
plain import of his words and acts. It is, upon the other hand, not irrelevant to point out
that the respondent offered no apology in his two (2) explanations and exhibited no
repentance (Resolution, p. 7; footnotes omitted).
The actual subjectivities of the respondent are irrelevant because such subjectivities
(understood as pyschological phenomena) cannot be ascertained and reached by the
processes of this Court. Human intent can only be shown derivatively and implied from
an examination of acts and statements. Thus, what the Court was saying was that
respondent's disclaimer of an intent to attack and denigrate the Court, cannot prevail
over the plain import of what he did say and do. Respondent cannot negate the clear
import of his acts and statements by simply pleading a secret intent or state of mind
incompatible with those acts or statements. It is scarcely open to dispute that, e.g., one
accused of homicide cannot successfully deny his criminal intent by simply asserting
that while he may have inserted a knife between the victim's ribs, he actually acted from
high motives and kind feelings for the latter.
5 In his point 1, respondent's counsel argues that it is error "for this Court
to punish respondent for contempt of court for out of court publications."
Respondent's counsel asks this Court to follow what he presents as alleged modern
trends in the United Kingdom and in the United States concerning the law of contempt.
We are, however, unable to regard the texts that he cites as binding or persuasive in
our jurisdiction. The Court went to some length to document the state of our case law on
this matter in its per curiam Resolution. There is nothing in the circumstances of this
case that would suggest to this Court that that case law, which has been followed for at
least half a century or so, ought to be reversed.
6. In his point J, respondent's counsel pleads that the imposition of
indefinite suspension from the practice of law constitutes "cruel, degrading
or inhuman punishment". The Court finds it difficult to consider this a
substantial constitutional argument. The indefiniteness of the respondent's
suspension, far from being "cruel" or "degrading" or "inhuman," has the
effect of placing, as it were, the key to the restoration of his rights and
privileges as a lawyer in his own hands. That sanction has the effect of
giving respondent the chance to purge himself in his own good time of his
contempt and misconduct by acknowledging such misconduct, exhibiting
appropriate repentance and demonstrating his willingness and capacity to
live up to the exacting standards of conduct rightly demanded from every
member of the bar and officer of the courts.
ACCORDINGLY, the Court Resolved to DENY the Motion for Reconsideration for lack
of merit. The denial is FINAL.
The Court also NOTED the Ex-Parte Manifestation and Motion, dated October 25, 1988
and the Supplemental Manifestation, dated October 27, 1988, filed by respondent
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado,
JJ., concur.
G.R. No. 102781. April 22, 1993.
BONIFACIO SANZ MACEDA, Presiding Judge, Branch 12, Regional Trial Court, Antique,
petitioner,
vs.
HON. OMBUDSMAN CONRADO M. VASQUEZ AND ATTY. NAPOLEON A. ABIERA,
respondents.
Bonifacio Sanz Maceda for and in his own behalf.
Public Attorney's Office for private respondent.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; OFFICE OF THE OMBUDSMAN HAS
JURISDICTION TO INVESTIGATE OFFENSE COMMITTED BY JUDGE WHETHER OR
NOT OFFENSE RELATES TO OFFICIAL DUTIES; REASON. — Petitioner also contends
that the Ombudsman has no jurisdiction over said cases despite this Court's ruling in Orap vs.
Sandiganbayan, since the offense charged arose from the judge's performance of his official
duties, which is under the control and supervision of the Supreme Court . . . The Court disagrees
with the first part of petitioner's basic argument. There is nothing in the decision in Orap that
would restrict it only to offenses committed by a judge unrelated to his official duties. A judge
who falsifies his certificate of service is administratively liable to the Supreme Court for serious
misconduct and inefficiency under Section 1, Rule 140 of the Rules of Court, and criminally
liable to the State under the Revised Penal Code for his felonious act.
2. ID.; ID.; ID.; JURISDICTION TO INVESTIGATE OFFENSE RELATED TO OFFICIAL
DUTIES SUBJECT TO PRIOR ADMINISTRATIVE ACTION TAKEN AGAINST JUDGE BY
SUPREME COURT; REASON. — However, We agree with petitioner that in the absence of
any administrative action taken against him by this Court with regard to his certificates of
service, the investigation being conducted by the Ombudsman encroaches into the Court's power
of administrative supervision over all courts and its personnel, in violation of the doctrine of
separation of powers.
3. ID.; ID.; ID.; ID.; PROCEDURE TO BE OBSERVED BY OMBUDSMAN REGARDING
COMPLAINT AGAINST JUDGE OR OTHER COURT EMPLOYEE; PURPOSE. — Thus, the
Ombudsman should first refer the matter of petitioner's certificates of service to this Court for
determination of whether said certificates reflected the true status of his pending case load, as the
Court has the necessary records to make such a determination . . . In fine, where a criminal
complaint against a judge or other court employee arises from their administrative duties, the
Ombudsman must defer action on said complaint and refer the same to this Court for
determination whether said judge or court employee had acted within the scope of their
administrative duties.
4. ID.; ID.; ID.; ID.; OMBUDSMAN CANNOT SUBPOENA SUPREME COURT AND ITS
PERSONNEL; REASON. — The Ombudsman cannot compel this Court, as one of the three
branches of government, to submit its records, or to allow its personnel to testify on this matter,
as suggested by public respondent Abiera in his affidavit-complaint. The rationale for the
foregoing pronouncement is evident in this case. Administratively, the question before Us is this:
should a judge, having been granted by this Court an extension of time to decide cases before
him, report these cases in his certificate of service? As this question had not yet been raised with,
much less resolved by, this Court, how could the Ombudsman resolve the present criminal
complaint that requires the resolution of said question?
DECISION
NOCON, J p:
The issue in this petition for certiorari with prayer for preliminary mandatory injunction and/or
restraining order is whether the Office of the Ombudsman could entertain a criminal complaint
for the alleged falsification of a judge's certification submitted to the Supreme Court, and
assuming that it can, whether a referral should be made first to the Supreme Court.
Petitioner Bonifacio Sanz Maceda, Presiding Judge of Branch 12 of the Regional Trial Court of
Antique, seeks the review of the following orders of the Office of the Ombudsman: (1) the Order
dated September 18, 1991 denying the ex-parte motion to refer to the Supreme Court filed by
petitioner; and (2) the Order dated November 22, 1951 denying petitioner's motion for
reconsideration and directing petitioner to file his counter-affidavit and other controverting
evidences.
In his affidavit-complaint dated April 18, 1991 filed before the Office of the Ombudsman,
respondent Napoleon A. Abiera of the Public Attorney's Office alleged that petitioner had
falsified his Certificate of Service 1 dated February 6, 1989, by certifying "that all civil and
criminal cases which have been submitted for decision or determination for a period of 90 days
have been determined and decided on or before January 31, 1998," when in truth and in fact,
petitioner knew that no decision had been rendered in five (5) civil and ten (10) criminal cases
that have been submitted for decision. Respondent Abiera further alleged that petitioner similarly
falsified his certificates of service for the months of February, April, May, June, July and
August, all in 1989; and the months beginning January up to September 1990, or for a total of
seventeen (17) months.
On the other hand, petitioner contends that he had been granted by this Court an extension of
ninety (90) days to decide the aforementioned cases.
Petitioner also contends that the Ombudsman has no jurisdiction over said case despite this
Court's ruling in Orap vs. Sandiganbayan, 2 since the offense charged arose from the judge's
performance of his official duties, which is under the control and supervision of the Supreme
Court. Furthermore, the investigation of the Ombudsman constitutes an encroachment into the
Supreme Court's constitutional duty of supervision over all inferior courts.
The Court disagrees with the first Part of petitioner's basic argument. There is nothing in the
decision in Orap that would restrict it only to offenses committed by a judge unrelated to his
official duties. A judge who falsifies his certificate of service is administratively liable to the
Supreme Court for serious misconduct and inefficiency under Section 1, Rule 140 of the Rules of
Court, and criminally liable to the State under the Revised Penal Code for his felonious act.
However, We agree with petitioner that in the absence of any administrative action taken against
him by this Court with regard to his certificates of service, the investigation being conducted by
the Ombudsman encroaches into the Court's power of administrative supervision over all courts
and its personnel, in violation of the doctrine of separation of powers.
Article VIII, section 6 of the 1987 Constitution exclusively vests in the Supreme Court
administrative supervision over all courts and court personnel, from the Presiding Justice of the
Court of Appeals down to the lowest municipal trial court clerk. By virtue of this power, it is
only the Supreme Court that can oversee the judges' and court personnel's compliance with all
laws, and take the proper administrative action against them if they commit any violation thereof.
No other branch of government may intrude into this power, without running afoul of the
doctrine of separation of powers.
The Ombudsman cannot justify its investigation of petitioner on the powers granted to it by the
Constitution, 3 for such a justification not only runs counter to the specific mandate of the
Constitution granting supervisory powers to the Supreme Court over all courts and their
personnel, but likewise undermines the independence of the judiciary.
Thus, the Ombudsman should first refer the matter of petitioner's certificates of service to this
Court for determination of whether said certificates reflected the true status of his pending case
load, as the Court has the necessary records to make such a determination. The Ombudsman
cannot compel this Court, as one of the three branches of government, to submit its records, or to
allow its personnel to testify on this matter, as suggested by public respondent Abiera in his
affidavit-complaint. 4
The rationale for the foregoing pronouncement is evident in this case. Administratively. the
question before Us is this: should a judge, having been granted by this Court an extension of time
to decide cases before him, report these cases in his certificate of service? As this question had
not yet been raised with, much less resolved by, this Court. how could the Ombudsman resolve
the present criminal complaint that requires the resolution of said question?
In fine, where a criminal complaint against a Judge or other court employee arises from their
administrative duties, the Ombudsman must defer action on said complaint and refer the same to
this Court for determination whether said Judge or court employee had acted within the scope of
their administrative duties.
WHEREFORE, the instant petition is hereby GRANTED. The Ombudsman is hereby directed to
dismiss the complaint filed by public respondent Atty. Napoleon A. Abiera and to refer the same
to this Court for appropriate action.
SO ORDERED.
G.R. No. 78569 February 11, 1991
EARTH MINERALS EXPLORATION, INC., petitioner,
vs.
DEPUTY EXECUTIVE SECRETARY CATALINO MACARAIG, JR., OFFICE OF THE
PRESIDENT, MALACAÑANG, MANILA, BUREAU OF MINES DIRECTOR BENJAMIN
A. GONZALES, AND PHILZEA MINING AND DEV. CORP., respondents.
Domingo G. Foronda and Tañada, Vivo & Tan for petitioner.
Fortunato F. L. Viray, Jr. for private respondent Philzea Mining & Development
Corporation.

PARAS, J.:p
This is a petition for Certiorari and Prohibition with Preliminary Injunction seeking the
reversal of the decision 1 dated June 27, 1986 and resolution 2 dated May 5, 1987 of the
Deputy Executive Secretary in O.P. Case No. 3023. The decision and resolution set
aside the orders of the Minister of Natural Resources and Director of Mines and Geo-
Sciences dated November 7, 1985 rendered in MNR Case No. 6353 and July 23, 1985
rendered in Mines Sp. Case No. V-183, respectively, that upheld petitioner's action to
cancel/rescind the mining contract dated September 11, 1980 between Zambales
Chromite Mining Co., Inc. and private respondent Philzea Mining and Development
Corporation.
The antecedent facts and the proceedings that spawned the instant case, are as
follows:
Zambales Chromite Mining Co., Inc. (Zambales Chromite, for short) is the exclusive
owner of ten (10) patentable chromite mining claims located in the Municipality of Sta.
Cruz, Zambales. On September 11, 1980, Zambales Chromite, as claim-owner, on one
hand, and Philzea Mining and Development Corporation (Philzea Mining, for short,
herein private respondent) as operator, on the other, entered into a "Contract of
Development, Exploitation and Productive Operation" on the ten (10) patentable mining
claims (Annex "C", Rollo, p. 120). During the lifetime of such contract, Earth Minerals
Exploration, Inc. (Earth Minerals, for short, herein petitioner) submitted a Letter of Intent
on June 30, 1984 to Zambales Chromite whereby the former proposed and the latter
agreed to operate the same mining area subject of the earlier agreement between
Zambales Chromite and Philzea Mining (Annex "D", Rollo, p. 111). On August 10, 1984,
Zambales Chromite and Earth Minerals concretized their aforementioned Letter of Intent
when they entered into an "Operating Agreement" (Annex "E", Rollo, p. 112) for the
latter to operate the same mining area. Consequently, the same mining property of
Zambales Chromite became the subject of different agreements with two separate and
distinct operators. On November 29, 1984, petitioner Earth Minerals filed with the
Bureau of Mines and Geo-Sciences (BMGS, for short) a petition for cancellation of the
contract between Zambales Chromite and Philzea Mining, pursuant t Section 7, P.D.
1281 which provides, inter alia:
Section 7. In addition to its regulatory and adjudicative functions over companies,
partnerships or persons engaged in mining exploration, development and exploitation,
the Bureau of Mines shall have original and exclusive jurisdiction to hear and decide
cases involving:
(a) a mining property subject of different agreements entered into by the claim holder
thereof with several mining operators;
(b) . . . .
(c) cancellation and/or enforcement of mining contracts due to the refusal of the
claimowner/operator to abide by the terms and conditions thereof.
In its petition, Earth Minerals alleged, among others, that Philzea Mining committed
grave and serious violations of the latter's contract with Zambales Chromite among
which are: failure to produce the agreed volume of chromite ores; failure to pay ad
valorem taxes; failure to put up assay buildings and offices, all resulting in the non-
productivity and non-development of the mining area.
On December 10, 1984, Philzea Mining filed a motion to dismiss on the grounds that
Earth Minerals is not the proper party in interest and that the petition lacks cause of
action. The motion to dismiss was, however, denied by the BMGS in an order dated
January 24, 1985 holding that "there appears some color of right" on Earth Minerals to
initiate the petition for cancellation (Annex "G", Rollo, p. 120). A motion for
reconsideration was filed but the same was denied by the BMGS in an order dated
March 4, 1985. Thereafter, Philzea Mining elevated the case to then Ministry (now
Department) of Natural Resources (MNR, for short) which in its order of April 23, 1985
dismissed the appeal for the reason that the order of the BMGS was an interlocutory
order that could not be the proper subject of an appeal.
On May 2, 1985, Philzea Mining appealed to the Office of the President the order of
MNR dated April 23, 1985. During the pendency thereof, Earth Minerals filed with the
MNR a motion for execution of the MNR order of April 23, 1985.
On May 30, 1985, the MNR issued an order directing the BMGS to conduct the
necessary investigation in order to hasten the development of the mining claims in
question (Rollo, p. 93). In compliance therewith, the BMGS on June 7, 1985, ordered
the private respondent Philzea Mining to file its answer to Earth Mineral's petition for
rescission. Philzea Mining moved to reconsider but the motion was denied.
Philzea Mining did not submit its answer. Accordingly, the BMGS resolved the petition
for rescission on the basis of documents submitted ex parte by herein petitioner. Finding
that Philzea Mining grossly violated the terms and conditions of the mining contract
between Philzea Mining and Zambales Chromite, the BMGS rendered a decision on
July 23,1985, cancelling said mining contract, the dispositive portion of which reads:
In view of all the foregoing, this Office finds and so holds that the Operating Agreement
dated September 11, 1980 executed by and between Zambales Chromite and Philzea
Mining should be, as is hereby cancelled. Accordingly, respondent is hereby ordered to
immediately vacate the mining area subject of the instant case and turn over the
possession thereof to the claimowner and/or herein petitioner. (Annex "K", Rollo, p. 130).
Aggrieved by the decision of the BMGS, Philzea Mining, aside from filing a notice of
appeal to the MNR on July 29, 1985, also filed a petition for certiorari with the then
Intermediate Appellate Court (now Court of Appeals) on July 30,1985, docketed as AC-
G.R. Sp. No. 06715, to annul or set aside the decision of the BMGS.
On November 4, 1985, the Office of the President promulgated a decision dismissing
the appeal of Philzea Mining from the decision of the MNR dated April 23, 1985, on the
ground that an order denying a motion for reconsideration is interlocutory in nature and
cannot be the subject of an appeal (Annex "L", Rollo, p. 137).
On November 7, 1985, the MNR on the other hand, issued another order this time
dismissing the appeal of Philzea Mining from the decision of the BMGS dated July 23,
1985.
On November 18, 1985 Philzea Mining appealed the aforementioned November 7, 1985
decision of the MNR to the Office of the President.
Meanwhile, on December 26,1985, the then Intermediate Appellate Court dismissed the
petition filed by Philzea Mining in AC-G.R. Sp. No. 06715.
Back to the appeal of Philzea Mining to the Office of the President, the disputed
decision dated June 27, 1986 was issued by the then Deputy Executive Secretary
Fulgencio Factoran, Jr., the dispositive portion of which reads:
Wherefore, the orders of the Minister of Natural Resources and the Director of Mines and
Geo-Sciences, dated November 7 and July 23, 1985, respectively, are hereby set aside.
(Annex "A", Rollo, p. 92).
A motion for reconsideration dated July 12,1986 (Annex "U", Rollo, p. 190) was filed by
petitioner Earth Minerals which, however, was denied by the then Deputy Executive
Secretary Catalino Macaraig in his resolution dated May 5, 1987, which reads in part:
Wherefore, the instant motion for reconsideration by appellee Earth Minerals is hereby
denied for lack of merit and the Decision of this Office dated June 27, 1986 is hereby
reiterated. (Annex "B", Rollo, p. 98).
Hence, this petition.
In the resolution of the Court dated July 1989, the Court resolved: (a) to give due course
to the petition and (b) to require the parties to submit simultaneously their respective
memoranda (Rollo, p. 382).
The principal issues in the case at hand are as follows: (a) whether or not the appeal of
the private respondent Philzea Mining from the decision of the MNR dated November
7,1985 to the Office of the President was made out of time and (b) whether or not the
petitioner Earth Minerals is the proper party to seek cancellation of the operating
agreement between Philzea Mining and Zambales Chromite.
The petitioner contends that the last day to appeal the decision of the MNR dated
November 7, 1985 fell on November 16, 1985, that is five (5) days from the date of its
receipt by the private respondent on November 11, 1985 and since the notice of appeal
dated November 15,1985 was filed on November 18, 1985, the appeal was taken
beyond the five-day reglementary period.
Public respondent counters that the ground invoked by the petitioner is too technical in
view of the fact that November 16, 1985 was a Saturday and the following day
(November 17, 1985) was a Sunday.
The Court, in the case of Atlas Consolidated Mining and Development Corporation v.
Factoran, Jr. (154 SCRA 49 [1987]) resolved the same issue in this wise:
Saturday was observed as a legal holiday in the Office of the President pursuant to Sec.
29 of the Revised Administrative Code as amended.
The same law provides:
Sec. 31. Pretermission of holiday — Where the day or the last day, for doing any act
required or permitted by law falls on a holiday, the act may be done on the next
succeeding business day.
Apart from the fact that the law is clear and needs no interpretation, this Court in
accordance therewith has invariably held that in case the last day for doing an act is a
legal holiday, the last day for doing the same, the act may be done on the next
succeeding business day (Gonzaga v. De David, 110 Phil. 463 [1960]; Calano v. Cruz, 91
Phil. 247 [1957]; Austria et al. v. Solicitor General, 71 Phil. 288 [1941]).
In the case under consideration, as the next working day after November 16, 1985 was
November 18, 1985 — a Monday, it is evident that the private respondent's appeal was
filed on time.
Be that as it may, the private respondent's appeal within the reglementary period to the
Office of the President does not help them much in the instant case.
The public respondent argues that the petitioner Earth Minerals is not the proper party
to file the petition for cancellation of the contract between Zambales Chromite and
Philzea Mining citing Article 1311 of the Civil Code which provides that a contract takes
effect only between the parties, their assigns and heirs.
The contention is untenable.
Indeed, a contract takes effect only between the parties who made it, and also their
assigns and heirs, except in cases where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision of law
(Article 1311, New Civil Code). Since a contract may be violated only by the parties
thereto as against each other, in an action upon that contract, the real parties in interest,
either as plaintiff or as defendant must be parties to said contract. In relation thereto,
Article 1397 of the Civil Code lays the general rule that an action for the annulment of
contracts can only be maintained by those who are bound either principally or
subsidiarily by virtue thereof. The rule, however, admits of an exception. The Court, in
Teves v. People's Homesite and Housing Corporation (23 SCRA 1141 [1968]) held that
a person who is not obliged principally or subsidiarily in a contract may exercise an
action for nullity of the contract if he is prejudiced in his rights with respect to one of the
contracting parties, and can show the detriment which could positively result to him from
the contract in which he had no intervention. This exception to the rule has been applied
in Banez v. CA (59 SCRA 15 [1974]; Development Bank of the Philippines v. CA, 96
SCRA 342 [1980]; Dilson Enterprises Inc. v. IAC, 170 SCRA 676 [1989]).
Petitioner Earth Minerals seeks the cancellation of the contract between Zambales
Chromite and Philzea Mining, not as a party to the contract but because his rights are
prejudiced by the said contract. The prejudice and detriment to the rights and interest of
petitioner stems from the continued existence of the contract between Zambales
Chromite and private respondent Philzea Mining. Unless and until the contract between
Zambales Chromite and Philzea Mining is cancelled, petitioner's contract with the
former involving the same mining area cannot be in effect and it cannot perform its own
obligations and derive benefits under its contract. The Director of Mines and Geo-
Sciences in his order denying Philzea Mining's motion to dismiss the petition for
cancellation of the operating agreement between Philzea Mining and Zambales
Chromite stated:
From the documentary evidence submitted by the petitioner, i.e., the Letter of Intent and
Operating Agreement between Zambales Chromite and Earth Minerals, it may be
gleaned that, at least, there appears some color of right on the part of petitioner to
request for cancellation/rescission of the contract dated September 11, 1980 between
Zambales Chromite and Philzea Mining.
Moreover, the record amply shows that the decision of the Director of Mines as affirmed
by the Minister of Natural Resources was supported by substantial evidence. As found
by the Bureau of Mines in its decision dated July 23, 1985, the violations committed by
Philzea Mining were not only violations of its operating agreement with Zambales
Chromite but of mining laws as well.
In affirming the abovementioned decision, the Minister of Natural Resources made the
following statements:
Moreover, the appellant by filing a Manifestation on October 1, 1985 wherein it prayed
that the decision appealed from be reviewed motu propio by this Office, is an implied
admission that it has no justification whether in fact or in law, for its appeal; otherwise, it
could have specified them in the appeal memorandum that it is bound by law to file. (p.
142, Rollo)
In such cases, the Court has uniformly held that, it is sufficient that administrative
findings of fact are supported by evidence (Ang Tibay v. CIR, 69 Phil. 635 [1940]). Still
in later cases, the Court continued that such finding will not be disturbed so long as they
are supported by substantial evidence, even if not overwhelming or preponderant
(Police Commission v. Lood, 162 SCRA 762 [1984]; Atlas Consolidated v. Factoran, Jr.,
supra).
The decision, therefore, of the Deputy Executive Secretary reversing the decisions of
the Minister of Natural Resources and Director of Mines cannot be sustained. This is in
line with the pronouncement of the Court that the factual findings of the Secretary
should be respected in the absence of any illegality, error of law, fraud or imposition,
none of which was proved by the public and private respondents (Heirs of Santiago
Pastoral v. Secretary of Public Works and Highways, 162 SCRA 619 [1988]).
Regarding the issue of forum shopping, the records show that on July 29, 1985, after
Philzea Mining had filed its notice of appeal to MNR from the July 23, 1985 decision of
the BMGS, it also filed a petition for certiorari with the Intermediate Appellate Court on
July 30, 1985, docketed as AC-G.R. Sp. No. 06715 praying for the annulment of the
same July 23, 1985 decision of the BMGS. When the MNR rendered its November 7,
1985 decision affirming the July 23, 1985 decision of the BMGS, private respondent
Philzea Mining, notwithstanding the pendency of its petition for certiorari with the
Intermediate Appellate Court, filed its notice of appeal to the Office of the President from
the said decision of the MNR stating therein that its appeal was "without prejudice to the
pending petition with the Intermediate Appellate Court docketed as AC-G.R. Sp. No.
06715" (Rollo, p. 80).
The foregoing facts show a case of forum shopping.
There is forum-shopping whenever, as a result of an adverse opinion in one forum, a
party seeks a favorable opinion (other than by appeal or certiorari) in another. The
principle applies not only with respect to suits filed in the courts but also in connection
with litigations commenced in the courts while an administrative proceeding is pending,
as in this case, in order to defeat administrative processes and in anticipation of an
unfavorable court ruling (Crisostomo v. Securities and Exchange Commission, G.R. Nos.
89095 and 89555, November 6, 1989).
One last point, the motion to dismiss filed by Philzea before this Court on September 5,
1989, on the ground that the petition has become moot and academic in view of the
expiration on August 10, 1989 of the five (5) year term contract between Zambales
Chromite and Earth Minerals executed by August 10, 1984 should be denied.
The contract between Zambales Chromite and Earth Minerals provides, inter alia:
5. Others.
A. During the existence of this agreement, Earth Minerals is free to look for, and
negotiate with, an interested party who is financially capable of operating the CLAIMS on
a much bigger scale . . . and in connection therewith, may assign this agreement in favor
of said party; . . . .
In view of such provision, Earth Minerals and Zambales Chromite jointly entered into a
"Mining Agreement", dated June 16, 1988, with Acoje Mining Co., Inc., the salient
provisions of which reads:
ZCMC and EMEI jointly desire to protect Acoje from any and all claims (present or future)
against it (Acoje) with respect the title and/or possession of the PROPERTIES and this
protection against all claims of third parties or entities during the life of this Mining
Agreement is one of the main considerations why Acoje agreed to enter into this
Agreement.
Sec. 1. . . . provided, however, that EMEI obligates itself to continue representing its
interest as party in the aforesaid cases pending with the Supreme Court. (Annex "1",
Rollo, p. 397).
The mining agreement between Zambales Chromite and Earth Minerals, on one hand,
and Acoje Mining, on the other, expressly recognizes the pendency of the case at bar,
so that herein petitioner Earth Minerals has the right to pursue the case to its logical
conclusion, and during the effectivity of such Mining Agreement, both Earth Minerals
and Zambales Chromite are under obligation to assure peaceful possession of the
mining properties from the claims of third parties.
PREMISES CONSIDERED, (a) the instant petition for Certiorari and Prohibition is
hereby GRANTED; (b) the decision dated June 27, 1986 and resolution dated May 5,
1987 of the Deputy Executive Secretary are hereby REVERSED AND SET ASIDE; and
(c) the orders of the Bureau of Mines and Geo-Sciences dated July 23, 1985 and
Minister of Natural Resources dated November 7, 1985 are hereby REINSTATED.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.
G.R. No. 121413 January 29, 2001
PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly INSULAR BANK
OF ASIA AND AMERICA), petitioner,
vs.
COURT OF APPEALS and FORD PHILIPPINES, INC. and CITIBANK, N.A.,
respondents.

G.R. No. 121479 January 29, 2001

FORD PHILIPPINES, INC., petitioner-plaintiff,
vs.
COURT OF APPEALS and CITIBANK, N.A. and PHILIPPINE COMMERCIAL
INTERNATIONAL BANK, respondents.

G.R. No. 128604 January 29, 2001

FORD PHILIPPINES, INC., petitioner,
vs.
CITIBANK, N.A., PHILIPPINE COMMERCIAL INTERNATIONAL BANK and
COURT OF APPEALS, respondents.
QUISUMBING, J.:
These consolidated petitions involve several fraudulently negotiated checks.
The original actions a quo were instituted by Ford Philippines to recover from the drawee bank,
CITIBANK, N.A. (Citibank) and collecting bank, Philippine Commercial International Bank
(PCIBank) [formerly Insular Bank of Asia and America], the value of several checks payable to
the Commissioner of Internal Revenue, which were embezzled allegedly by an organized
syndicate.1âwphi1.nêt
G.R. Nos. 121413 and 121479 are twin petitions for review of the March 27, 1995 Decision1 of
the Court of Appeals in CA-G.R. CV No. 25017, entitled "Ford Philippines, Inc. vs. Citibank,
N.A. and Insular Bank of Asia and America (now Philipppine Commercial International Bank),
and the August 8, 1995 Resolution,2 ordering the collecting bank, Philippine Commercial
International Bank, to pay the amount of Citibank Check No. SN-04867.
In G.R. No. 128604, petitioner Ford Philippines assails the October 15, 1996 Decision3 of the
Court of Appeals and its March 5, 1997 Resolution4 in CA-G.R. No. 28430 entitled "Ford
Philippines, Inc. vs. Citibank, N.A. and Philippine Commercial International Bank," affirming in
toto the judgment of the trial court holding the defendant drawee bank, Citibank, N.A., solely
liable to pay the amount of P12,163,298.10 as damages for the misapplied proceeds of the
plaintiff's Citibanl Check Numbers SN-10597 and 16508.
I. G.R. Nos. 121413 and 121479
The stipulated facts submitted by the parties as accepted by the Court of Appeals are as follows:
"On October 19, 1977, the plaintiff Ford drew and issued its Citibank Check No. SN-
04867 in the amount of P4,746,114.41, in favor of the Commissioner of Internal Revenue
as payment of plaintiff;s percentage or manufacturer's sales taxes for the third quarter of
1977.
The aforesaid check was deposited with the degendant IBAA (now PCIBank) and was
subsequently cleared at the Central Bank. Upon presentment with the defendant Citibank,
the proceeds of the check was paid to IBAA as collecting or depository bank.
The proceeds of the same Citibank check of the plaintiff was never paid to or received by
the payee thereof, the Commissioner of Internal Revenue.
As a consequence, upon demand of the Bureau and/or Commissioner of Internal
Revenue, the plaintiff was compelled to make a second payment to the Bureau of Internal
Revenue of its percentage/manufacturers' sales taxes for the third quarter of 1977 and that
said second payment of plaintiff in the amount of P4,746,114.41 was duly received by the
Bureau of Internal Revenue.
It is further admitted by defendant Citibank that during the time of the transactions in
question, plaintiff had been maintaining a checking account with defendant Citibank; that
Citibank Check No. SN-04867 which was drawn and issued by the plaintiff in favor of
the Commissioner of Internal Revenue was a crossed check in that, on its face were two
parallel lines and written in between said lines was the phrase "Payee's Account Only";
and that defendant Citibank paid the full face value of the check in the amount of
P4,746,114.41 to the defendant IBAA.
It has been duly established that for the payment of plaintiff's percentage tax for the last
quarter of 1977, the Bureau of Internal Revenue issued Revenue Tax Receipt No.
18747002, dated October 20, 1977, designating therein in Muntinlupa, Metro Manila, as
the authorized agent bank of Metrobanl, Alabang branch to receive the tax payment of
the plaintiff.
On December 19, 1977, plaintiff's Citibank Check No. SN-04867, together with the
Revenue Tax Receipt No. 18747002, was deposited with defendant IBAA, through its
Ermita Branch. The latter accepted the check and sent it to the Central Clearing House for
clearing on the samd day, with the indorsement at the back "all prior indorsements and/or
lack of indorsements guaranteed." Thereafter, defendant IBAA presented the check for
payment to defendant Citibank on same date, December 19, 1977, and the latter paid the
face value of the check in the amount of P4,746,114.41. Consequently, the amount of
P4,746,114.41 was debited in plaintiff's account with the defendant Citibank and the
check was returned to the plaintiff.
Upon verification, plaintiff discovered that its Citibank Check No. SN-04867 in the
amount of P4,746,114.41 was not paid to the Commissioner of Internal Revenue. Hence,
in separate letters dated October 26, 1979, addressed to the defendants, the plaintiff
notified the latter that in case it will be re-assessed by the BIR for the payment of the
taxes covered by the said checks, then plaintiff shall hold the defendants liable for
reimbursement of the face value of the same. Both defendants denied liability and refused
to pay.
In a letter dated February 28, 1980 by the Acting Commissioner of Internal Revenue
addressed to the plaintiff - supposed to be Exhibit "D", the latter was officially informed,
among others, that its check in the amount of P4, 746,114.41 was not paid to the
 government or its authorized agent and instead encashed by unauthorized persons, hence,
plaintiff has to pay the said amount within fifteen days from receipt of the letter. Upon
advice of the plaintiff's lawyers, plaintiff on March 11, 1982, paid to the Bureau of
Internal Revenue, the amount of P4,746,114.41, representing payment of plaintiff's
percentage tax for the third quarter of 1977.
As a consequence of defendant's refusal to reimburse plaintiff of the payment it had made
for the second time to the BIR of its percentage taxes, plaintiff filed on January 20, 1983
its original complaint before this Court.
On December 24, 1985, defendant IBAA was merged with the Philippine Commercial
International Bank (PCI Bank) with the latter as the surviving entity.
Defendant Citibank maintains that; the payment it made of plaintiff's Citibank Check No.
SN-04867 in the amount of P4,746,114.41 "was in due course"; it merely relied on the
clearing stamp of the depository/collecting bank, the defendant IBAA that "all prior
indorsements and/or lack of indorsements guaranteed"; and the proximate cause of
plaintiff's injury is the gross negligence of defendant IBAA in indorsing the plaintiff's
Citibank check in question.
It is admitted that on December 19, 1977 when the proceeds of plaintiff's Citibank Check
No. SN-048867 was paid to defendant IBAA as collecting bank, plaintiff was
maintaining a checking account with defendant Citibank."5
Although it was not among the stipulated facts, an investigation by the National Bureau of
Investigation (NBI) revealed that Citibank Check No. SN-04867 was recalled by Godofredo
Rivera, the General Ledger Accountant of Ford. He purportedly needed to hold back the check
because there was an error in the computation of the tax due to the Bureau of Internal Revenue
(BIR). With Rivera's instruction, PCIBank replaced the check with two of its own Manager's
Checks (MCs). Alleged members of a syndicate later deposited the two MCs with the Pacific
Banking Corporation.
Ford, with leave of court, filed a third-party complaint before the trial court impleading Pacific
Banking Corporation (PBC) and Godofredo Rivera, as third party defendants. But the court
dismissed the complaint against PBC for lack of cause of action. The course likewise dismissed
the third-party complaint against Godofredo Rivera because he could not be served with
summons as the NBI declared him as a "fugitive from justice".
On June 15, 1989, the trial court rendered its decision, as follows:
"Premises considered, judgment is hereby rendered as follows:
"1. Ordering the defendants Citibank and IBAA (now PCI Bank), jointly and
severally, to pay the plaintiff the amount of P4,746,114.41 representing the face
value of plaintiff's Citibank Check No. SN-04867, with interest thereon at the
legal rate starting January 20, 1983, the date when the original complaint was
filed until the amount is fully paid, plus costs;
"2. On defendant Citibank's cross-claim: ordering the cross-defendant IBAA (now
PCI Bank) to reimburse defendant Citibank for whatever amount the latter has
paid or may pay to the plaintiff in accordance with next preceding paragraph;
"3. The counterclaims asserted by the defendants against the plaintiff, as well as
that asserted by the cross-defendant against the cross-claimant are dismissed, for
lack of merits; and
 "4. With costs against the defendants.
SO ORDERED."6
Not satisfied with the said decision, both defendants, Citibank and PCIBank, elevated their
respective petitions for review on certiorari to the Courts of Appeals. On March 27, 1995, the
appellate court issued its judgment as follows:
"WHEREFORE, in view of the foregoing, the court AFFIRMS the appealed decision
with modifications.
The court hereby renderes judgment:
1. Dismissing the complaint in Civil Case No. 49287 insofar as defendant
Citibank N.A. is concerned;
2. Ordering the defendant IBAA now PCI Bank to pay the plaintiff the amount of
P4,746,114.41 representing the face value of plaintiff's Citibank Check No. SN-
04867, with interest thereon at the legal rate starting January 20, 1983, the date
when the original complaint was filed until the amount is fully paid;
3. Dismissing the counterclaims asserted by the defendants against the plaintiff as
well as that asserted by the cross-defendant against the cross-claimant, for lack of
merits.
Costs against the defendant IBAA (now PCI Bank).
IT IS SO ORDERED."7
PCI Bank moved to reconsider the above-quoted decision of the Court of Appeals, while Ford
filed a "Motion for Partial Reconsideration." Both motions were denied for lack of merit.
Separately, PCIBank and Ford filed before this Court, petitions for review by certiorari under
Rule 45.
In G.R. No. 121413, PCIBank seeks the reversal of the decision and resolution of the Twelfth
Division of the Court of Appeals contending that it merely acted on the instruction of Ford and
such casue of action had already prescribed.
PCIBank sets forth the following issues for consideration:
I. Did the respondent court err when, after finding that the petitioner acted on the check
drawn by respondent Ford on the said respondent's instructions, it nevertheless found the
petitioner liable to the said respondent for the full amount of the said check.
II. Did the respondent court err when it did not find prescription in favor of the
petitioner.8
In a counter move, Ford filed its petition docketed as G.R. No. 121479, questioning the same
decision and resolution of the Court of Appeals, and praying for the reinstatement in toto of the
decision of the trial court which found both PCIBank and Citibank jointly and severally liable for
the loss.
In G.R. No. 121479, appellant Ford presents the following propositions for consideration:
I. Respondent Citibank is liable to petitioner Ford considering that:
1. As drawee bank, respondent Citibank owes to petitioner Ford, as the drawer of
the subject check and a depositor of respondent Citibank, an absolute and
 contractual duty to pay the proceeds of the subject check only to the payee
thereof, the Commissioner of Internal Revenue.
2. Respondent Citibank failed to observe its duty as banker with respect to the
subject check, which was crossed and payable to "Payee's Account Only."
3. Respondent Citibank raises an issue for the first time on appeal; thus the same
should not be considered by the Honorable Court.
4. As correctly held by the trial court, there is no evidence of gross negligence on
the part of petitioner Ford.9
II. PCI Bank is liable to petitioner Ford considering that:
1. There were no instructions from petitioner Ford to deliver the proceeds of the
subject check to a person other than the payee named therein, the Commissioner
of the Bureau of Internal Revenue; thus, PCIBank's only obligation is to deliver
the proceeds to the Commissioner of the Bureau of Internal Revenue.10
2. PCIBank which affixed its indorsement on the subject check ("All prior
indorsement and/or lack of indorsement guaranteed"), is liable as collecting
bank.11
3. PCIBank is barred from raising issues of fact in the instant proceedings.12
4. Petitioner Ford's cause of action had not prescribed.13
II. G.R. No. 128604
The same sysndicate apparently embezzled the proceeds of checks intended, this time, to settle
Ford's percentage taxes appertaining to the second quarter of 1978 and the first quarter of 1979.
The facts as narrated by the Court of Appeals are as follows:
Ford drew Citibank Check No. SN-10597 on July 19, 1978 in the amount of P5,851,706.37
representing the percentage tax due for the second quarter of 1978 payable to the Commissioner
of Internal Revenue. A BIR Revenue Tax Receipt No. 28645385 was issued for the said purpose.
On April 20, 1979, Ford drew another Citibank Check No. SN-16508 in the amount of
P6,311,591.73, representing the payment of percentage tax for the first quarter of 1979 and
payable to the Commissioner of Internal Revenue. Again a BIR Revenue Tax Receipt No. A-
1697160 was issued for the said purpose.
Both checks were "crossed checks" and contain two diagonal lines on its upper corner between,
which were written the words "payable to the payee's account only."
The checks never reached the payee, CIR. Thus, in a letter dated February 28, 1980, the BIR,
Region 4-B, demanded for the said tax payments the corresponding periods above-mentioned.
As far as the BIR is concernced, the said two BIR Revenue Tax Receipts were considered "fake
and spurious". This anomaly was confirmed by the NBI upon the initiative of the BIR. The
findings forced Ford to pay the BIR a new, while an action was filed against Citibank and
PCIBank for the recovery of the amount of Citibank Check Numbers SN-10597 and 16508.
The Regional Trial Court of Makati, Branch 57, which tried the case, made its findings on the
modus operandi of the syndicate, as follows:
"A certain Mr. Godofredo Rivera was employed by the plaintiff FORD as its General
Ledger Accountant. As such, he prepared the plaintiff's check marked Ex. 'A' [Citibank
 Check No. Sn-10597] for payment to the BIR. Instead, however, fo delivering the same
of the payee, he passed on the check to a co-conspirator named Remberto Castro who
was a pro-manager of the San Andres Branch of PCIB.* In connivance with one Winston
Dulay, Castro himself subsequently opened a Checking Account in the name of a
fictitious person denominated as 'Reynaldo reyes' in the Meralco Branch of PCIBank
where Dulay works as Assistant Manager.
After an initial deposit of P100.00 to validate the account, Castro deposited a worthless
Bank of America Check in exactly the same amount as the first FORD check (Exh. "A",
P5,851,706.37) while this worthless check was coursed through PCIB's main office
enroute to the Central Bank for clearing, replaced this worthless check with FORD's
Exhibit 'A' and accordingly tampered the accompanying documents to cover the
replacement. As a result, Exhibit 'A' was cleared by defendant CITIBANK, and the
fictitious deposit account of 'Reynaldo Reyes' was credited at the PCIB Meralco Branch
with the total amount of the FORD check Exhibit 'A'. The same method was again
utilized by the syndicate in profiting from Exh. 'B' [Citibank Check No. SN-16508]
which was subsequently pilfered by Alexis Marindo, Rivera's Assistant at FORD.
From this 'Reynaldo Reyes' account, Castro drew various checks distributing the sahres
of the other participating conspirators namely (1) CRISANTO BERNABE, the
mastermind who formulated the method for the embezzlement; (2) RODOLFO R. DE
LEON a customs broker who negotiated the initial contact between Bernabe, FORD's
Godofredo Rivera and PCIB's Remberto Castro; (3) JUAN VASTILLO who assisted de
Leon in the initial arrangements; (4) GODOFREDO RIVERA, FORD's accountant who
passed on the first check (Exhibit "A") to Castro; (5) REMERTO CASTRO, PCIB's pro-
manager at San Andres who performed the switching of checks in the clearing process
and opened the fictitious Reynaldo Reyes account at the PCIB Meralco Branch; (6)
WINSTON DULAY, PCIB's Assistant Manager at its Meralco Branch, who assisted
Castro in switching the checks in the clearing process and facilitated the opening of the
fictitious Reynaldo Reyes' bank account; (7) ALEXIS MARINDO, Rivera's Assistant at
FORD, who gave the second check (Exh. "B") to Castro; (8) ELEUTERIO JIMENEZ,
BIR Collection Agent who provided the fake and spurious revenue tax receipts to make it
appear that the BIR had received FORD's tax payments.
Several other persons and entities were utilized by the syndicate as conduits in the
disbursements of the proceeds of the two checks, but like the aforementioned participants
in the conspiracy, have not been impleaded in the present case. The manner by which the
said funds were distributed among them are traceable from the record of checks drawn
against the original "Reynaldo Reyes" account and indubitably identify the parties who
illegally benefited therefrom and readily indicate in what amounts they did so."14
On December 9, 1988, Regional Trial Court of Makati, Branch 57, held drawee-bank, Citibank,
liable for the value of the two checks while adsolving PCIBank from any liability, disposing as
follows:
"WHEREFORE, judgment is hereby rendered sentencing defendant CITIBANK to
reimburse plaintiff FORD the total amount of P12,163,298.10 prayed for in its complaint,
with 6% interest thereon from date of first written demand until full payment, plus
P300,000.00 attorney's fees and expenses litigation, and to pay the defendant, PCIB (on
its counterclaim to crossclaim) the sum of P300,000.00 as attorney's fees and costs of
litigation, and pay the costs.
 SO ORDERED."15
Both Ford and Citibank appealed to the Court of Appeals which affirmed, in toto, the decision of
the trial court. Hence, this petition.
Petitioner Ford prays that judgment be rendered setting aside the portion of the Court of Appeals
decision and its resolution dated March 5, 1997, with respect to the dismissal of the complaint
against PCIBank and holding Citibank solely responsible for the proceeds of Citibank Check
Numbers SN-10597 and 16508 for P5,851,706.73 and P6,311,591.73 respectively.
Ford avers that the Court of Appeals erred in dismissing the complaint against defendant
PCIBank considering that:
I. Defendant PCIBank was clearly negligent when it failed to exercise the diligence
required to be exercised by it as a banking insitution.
II. Defendant PCIBank clearly failed to observe the diligence required in the selection
and supervision of its officers and employees.
III. Defendant PCIBank was, due to its negligence, clearly liable for the loss or damage
resulting to the plaintiff Ford as a consequence of the substitution of the check consistent
with Section 5 of Central Bank Circular No. 580 series of 1977.
IV. Assuming arguedo that defedant PCIBank did not accept, endorse or negotiate in due
course the subject checks, it is liable, under Article 2154 of the Civil Code, to return the
money which it admits having received, and which was credited to it its Central bank
account.16
The main issue presented for our consideration by these petitions could be simplified as follows:
Has petitioner Ford the right to recover from the collecting bank (PCIBank) and the drawee bank
(Citibank) the value of the checks intended as payment to the Commissioner of Internal
Revenue? Or has Ford's cause of action already prescribed?
Note that in these cases, the checks were drawn against the drawee bank, but the title of the
person negotiating the same was allegedly defective because the instrument was obtained by
fraud and unlawful means, and the proceeds of the checks were not remitted to the payee. It was
established that instead of paying the checks to the CIR, for the settlement of the approprite
quarterly percentage taxes of Ford, the checks were diverted and encashed for the eventual
distribution among the mmbers of the syndicate. As to the unlawful negotiation of the check the
applicable law is Section 55 of the Negotiable Instruments Law (NIL), which provides:
"When title defective -- The title of a person who negotiates an instrument is defective
within the meaning of this Act when he obtained the instrument, or any signature thereto,
by fraud, duress, or fore and fear, or other unlawful means, or for an illegal consideration,
or when he negotiates it in breach of faith or under such circumstances as amount to a
fraud."
Pursuant to this provision, it is vital to show that the negotiation is made by the perpetator in
breach of faith amounting to fraud. The person negotiating the checks must have gone beyond
the authority given by his principal. If the principal could prove that there was no negligence in
the performance of his duties, he may set up the personal defense to escape liability and recover
from other parties who. Though their own negligence, alowed the commission of the crime.
In this case, we note that the direct perpetrators of the offense, namely the embezzlers belonging
to a syndicate, are now fugitives from justice. They have, even if temporarily, escaped liability
for the embezzlement of millions of pesos. We are thus left only with the task of determining
who of the present parties before us must bear the burden of loss of these millions. It all boils
down to thequestion of liability based on the degree of negligence among the parties concerned.
Foremost, we must resolve whether the injured party, Ford, is guilty of the "imputed contributory
negligence" that would defeat its claim for reimbursement, bearing ing mind that its employees,
Godofredo Rivera and Alexis Marindo, were among the members of the syndicate.
Citibank points out that Ford allowed its very own employee, Godofredo Rivera, to negotiate the
checks to his co-conspirators, instead of delivering them to the designated authorized collecting
bank (Metrobank-Alabang) of the payee, CIR. Citibank bewails the fact that Ford was remiss in
the supervision and control of its own employees, inasmuch as it only discovered the syndicate's
activities through the information given by the payee of the checks after an unreasonable period
of time.
PCIBank also blames Ford of negligence when it allegedly authorized Godofredo Rivera to
divert the proceeds of Citibank Check No. SN-04867, instead of using it to pay the BIR. As to
the subsequent run-around of unds of Citibank Check Nos. SN-10597 and 16508, PCIBank
claims that the proximate cause of the damge to Ford lies in its own officers and employees who
carried out the fradulent schemes and the transactions. These circumstances were not checked by
other officers of the company including its comptroller or internal auditor. PCIBank contends
that the inaction of Ford despite the enormity of the amount involved was a sheer negligence and
stated that, as between two innocent persons, one of whom must suffer the consequences of a
breach of trust, the one who made it possible, by his act of negligence, must bear the loss.
For its part, Ford denies any negligence in the performance of its duties. It avers that there was
no evidence presented before the trial court showing lack of diligence on the part of Ford. And,
citing the case of Gempesaw vs. Court of Appeals,17 Ford argues that even if there was a finding
therein that the drawer was negligent, the drawee bank was still ordered to pay damages.
Furthermore, Ford contends the Godofredo rivera was not authorized to make any representation
in its behalf, specifically, to divert the proceeds of the checks. It adds that Citibank raised the
issue of imputed negligence against Ford for the first time on appeal. Thus, it should not be
considered by this Court.
On this point, jurisprudence regarding the imputed negligence of employer in a master-servant
relationship is instructive. Since a master may be held for his servant's wrongful act, the law
imputes to the master the act of the servant, and if that act is negligent or wrongful and
proximately results in injury to a third person, the negligence or wrongful conduct is the
negligence or wrongful conduct of the master, for which he is liable.18 The general rule is that if
the master is injured by the negligence of a third person and by the concuring contributory
negligence of his own servant or agent, the latter's negligence is imputed to his superior and will
defeat the superior's action against the third person, asuming, of course that the contributory
negligence was the proximate cause of the injury of which complaint is made.19
Accordingly, we need to determine whether or not the action of Godofredo Rivera, Ford's
General Ledger Accountant, and/or Alexis Marindo, his assistant, was the proximate cause of the
loss or damage. AS defined, proximate cause is that which, in the natural and continuous
sequence, unbroken by any efficient, intervening cause produces the injury and without the result
would not have occurred.20
It appears that although the employees of Ford initiated the transactions attributable to an
organized syndicate, in our view, their actions were not the proximate cause of encashing the
checks payable to the CIR. The degree of Ford's negligence, if any, could not be characterized as
the proximate cause of the injury to the parties.
The Board of Directors of Ford, we note, did not confirm the request of Godofredo Rivera to
recall Citibank Check No. SN-04867. Rivera's instruction to replace the said check with
PCIBank's Manager's Check was not in theordinary course of business which could have
prompted PCIBank to validate the same.
As to the preparation of Citibank Checks Nos. SN-10597 and 16508, it was established that these
checks were made payable to the CIR. Both were crossed checks. These checks were apparently
turned around by Ford's emploees, who were acting on their own personal capacity.
Given these circumstances, the mere fact that the forgery was committed by a drawer-payor's
confidential employee or agent, who by virtue of his position had unusual facilities for
perpertrating the fraud and imposing the forged paper upon the bank, does notentitle the bank
toshift the loss to the drawer-payor, in the absence of some circumstance raising estoppel against
the drawer.21 This rule likewise applies to the checks fraudulently negotiated or diverted by the
confidential employees who hold them in their possession.
With respect to the negligence of PCIBank in the payment of the three checks involved,
separately, the trial courts found variations between the negotiation of Citibank Check No. SN-
04867 and the misapplication of total proceeds of Checks SN-10597 and 16508. Therefore, we
have to scrutinize, separately, PCIBank's share of negligence when the syndicate achieved its
ultimate agenda of stealing the proceeds of these checks.
G.R. Nos. 121413 and 121479
Citibank Check No. SN-04867 was deposited at PCIBank through its Ermita Branch. It was
coursed through the ordinary banking transaction, sent to Central Clearing with the indorsement
at the back "all prior indorsements and/or lack of indorsements guaranteed," and was presented
to Citibank for payment. Thereafter PCIBank, instead of remitting the proceeds to the CIR,
prepared two of its Manager's checks and enabled the syndicate to encash the same.
On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The
neglect of PCIBank employees to verify whether his letter requesting for the replacement of the
Citibank Check No. SN-04867 was duly authorized, showed lack of care and prudence required
in the circumstances.
Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in
behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding
the unwarranted instructions given by the payor or its agent. As aptly stated by the trial court, to
wit:
"xxx. Since the questioned crossed check was deposited with IBAA [now PCIBank],
which claimed to be a depository/collecting bank of BIR, it has the responsibility to make
sure that the check in question is deposited in Payee's account only.
xxx xxx xxx
As agent of the BIR (the payee of the check), defendant IBAA should receive instructions
only from its principal BIR and not from any other person especially so when that person
is not known to the defendant. It is very imprudent on the part of the defendant IBAA to
just rely on the alleged telephone call of the one Godofredo Rivera and in his signature
considering that the plaintiff is not a client of the defendant IBAA."
It is a well-settled rule that the relationship between the payee or holder of commercial paper and
the bank to which it is sent for collection is, in the absence of an argreement to the contrary, that
of principal and agent.22 A bank which receives such paper for collection is the agent of the
payee or holder.23
Even considering arguendo, that the diversion of the amount of a check payable to the collecting
bank in behalf of the designated payee may be allowed, still such diversion must be properly
authorized by the payor. Otherwise stated, the diversion can be justified only by proof of
authority from the drawer, or that the drawer has clothed his agent with apparent authority to
receive the proceeds of such check.
Citibank further argues that PCI Bank's clearing stamp appearing at the back of the questioned
checks stating that ALL PRIOR INDORSEMENTS AND/OR LACK OF INDORSEMENTS
GURANTEED should render PCIBank liable because it made it pass through the clearing house
and therefore Citibank had no other option but to pay it. Thus, Citibank had no other option but
to pay it. Thus, Citibank assets that the proximate cause of Ford's injury is the gross negligence
of PCIBank. Since the questione dcrossed check was deposited with PCIBank, which claimed to
be a depository/collecting bank of the BIR, it had the responsibility to make sure that the check
in questions is deposited in Payee's account only.
Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the
check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting
bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is
the collecting bank (PCIBank) which is bound to scruninize the check and to know its depositors
before it could make the clearing indorsement "all prior indorsements and/or lack of indorsement
guaranteed".
In Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corporation,24 we ruled:
"Anent petitioner's liability on said instruments, this court is in full accord with the ruling
of the PCHC's Board of Directors that:
'In presenting the checks for clearing and for payment, the defendant made an express
guarantee on the validity of "all prior endorsements." Thus, stamped at the back of the
checks are the defedant's clear warranty: ALL PRIOR ENDORSEMENTS AND/OR
LACK OF ENDORSEMENTS GUARANTEED. Without such warranty, plaintiff would
not have paid on the checks.'
No amount of legal jargon can reverse the clear meaning of defendant's warranty. As the
warranty has proven to be false and inaccurate, the defendant is liable for any damage
arising out of the falsity of its representation."25
Lastly, banking business requires that the one who first cashes and negotiates the check must
take some percautions to learn whether or not it is genuine. And if the one cashing the check
through indifference or othe circumstance assists the forger in committing the fraud, he should
not be permitted to retain the proceeds of the check from the drawee whose sole fault was that it
did not discover the forgery or the defect in the title of the person negotiating the instrument
before paying the check. For this reason, a bank which cashes a check drawn upon another bank,
without requiring proof as to the identity of persons presenting it, or making inquiries with
regard to them, cannot hold the proceeds against the drawee when the proceeds of the checks
were afterwards diverted to the hands of a third party. In such cases the drawee bank has a right
to believe that the cashing bank (or the collecting bank) had, by the usual proper investigation,
satisfied itself of the authenticity of the negotiation of the checks. Thus, one who encashed a
check which had been forged or diverted and in turn received payment thereon from the drawee,
is guilty of negligence which proximately contributed to the success of the fraud practiced on the
drawee bank. The latter may recover from the holder the money paid on the check.26
Having established that the collecting bank's negligence is the proximate cause of the loss, we
conclude that PCIBank is liable in the amount corresponding to the proceeds of Citibank Check
No. SN-04867.
G.R. No. 128604
The trial court and the Court of Appeals found that PCIBank had no official act in the ordinary
course of business that would attribute to it the case of the embezzlement of Citibank Check
Numbers SN-10597 and 16508, because PCIBank did not actually receive nor hold the two Ford
checks at all. The trial court held, thus:
"Neither is there any proof that defendant PCIBank contributed any official or conscious
participation in the process of the embezzlement. This Court is convinced that the
switching operation (involving the checks while in transit for "clearing") were the
clandestine or hidden actuations performed by the members of the syndicate in their own
personl, covert and private capacity and done without the knowledge of the defendant
PCIBank…"27
In this case, there was no evidence presented confirming the conscious particiapation of
PCIBank in the embezzlement. As a general rule, however, a banking corporation is liable for the
wrongful or tortuous acts and declarations of its officers or agents within the course and scope of
their employment.28 A bank will be held liable for the negligence of its officers or agents when
acting within the course and scope of their employment. It may be liable for the tortuous acts of
its officers even as regards that species of tort of which malice is an essential element. In this
case, we find a situation where the PCIBank appears also to be the victim of the scheme hatched
by a syndicate in which its own management employees had particiapted.
The pro-manager of San Andres Branch of PCIBank, Remberto Castro, received Citibank Check
Numbers SN-10597 and 16508. He passed the checks to a co-conspirator, an Assistant Manager
of PCIBank's Meralco Branch, who helped Castro open a Checking account of a fictitious person
named "Reynaldo Reyes." Castro deposited a worthless Bank of America Check in exactly the
same amount of Ford checks. The syndicate tampered with the checks and succeeded in
replacing the worthless checks and the eventual encashment of Citibank Check Nos. SN 10597
and 16508. The PCIBank Ptro-manager, Castro, and his co-conspirator Assistant Manager
apparently performed their activities using facilities in their official capacity or authority but for
their personal and private gain or benefit.
A bank holding out its officers and agents as worthy of confidence will not be permitted to profit
by the frauds these officers or agents were enabled to perpetrate in the apparent course of their
employment; nor will t be permitted to shirk its responsibility for such frauds, even though no
benefit may accrue to the bank therefrom. For the general rule is that a bank is liable for the
fraudulent acts or representations of an officer or agent acting within the course and apparent
scope of his employment or authority.29 And if an officer or employee of a bank, in his official
capacity, receives money to satisfy an evidence of indebetedness lodged with his bank for
collection, the bank is liable for his misappropriation of such sum.30
Moreover, as correctly pointed out by Ford, Section 531 of Central Bank Circular No. 580, Series
of 1977 provides that any theft affecting items in transit for clearing, shall be for the account of
sending bank, which in this case is PCIBank.
But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone.
The evidence on record shows that Citibank as drawee bank was likewise negligent in the
performance of its duties. Citibank failed to establish that its payment of Ford's checjs were
made in due course and legally in order. In its defense, Citibank claims the genuineness and due
execution of said checks, considering that Citibank (1) has no knowledge of any informity in the
issuance of the checks in question (2) coupled by the fact that said checks were sufficiently
funded and (3) the endorsement of the Payee or lack thereof was guaranteed by PCI Bank
(formerly IBAA), thus, it has the obligation to honor and pay the same.
For its part, Ford contends that Citibank as the drawee bank owes to Ford an absolute and
contractual duty to pay the proceeds of the subject check only to the payee thereof, the CIR.
Citing Section 6232 of the Negotiable Instruments Law, Ford argues that by accepting the
instrument, the acceptro which is Citibank engages that it will pay according to the tenor of its
acceptance, and that it will pay only to the payee, (the CIR), considering the fact that here the
check was crossed with annotation "Payees Account Only."
As ruled by the Court of Appeals, Citibank must likewise answer for the damages incurred by
Ford on Citibank Checks Numbers SN 10597 and 16508, because of the contractual relationship
existing between the two. Citibank, as the drawee bank breached its contractual obligation with
Ford and such degree of culpability contributed to the damage caused to the latter. On this score,
we agree with the respondent court's ruling.
Citibank should have scrutinized Citibank Check Numbers SN 10597 and 16508 before paying
the amount of the proceeds thereof to the collecting bank of the BIR. One thing is clear from the
record: the clearing stamps at the back of Citibank Check Nos. SN 10597 and 16508 do not bear
any initials. Citibank failed to notice and verify the absence of the clearing stamps. Had this been
duly examined, the switching of the worthless checks to Citibank Check Nos. 10597 and 16508
would have been discovered in time. For this reason, Citibank had indeed failed to perform what
was incumbent upon it, which is to ensure that the amount of the checks should be paid only to
its designated payee. The fact that the drawee bank did not discover the irregularity seasonably,
in our view, consitutes negligence in carrying out the bank's duty to its depositors. The point is
that as a business affected with public interest and because of the nature of its functions, the bank
is under obligation to treat the accounts of its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship.33
Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank
and Citibank failed in their respective obligations and both were negligent in the selection and
supervision of their employees resulting in the encashment of Citibank Check Nos. SN 10597
AND 16508. Thus, we are constrained to hold them equally liable for the loss of the proceeds of
said checks issued by Ford in favor of the CIR.
Time and again, we have stressed that banking business is so impressed with public interest
where the trust and confidence of the public in general is of paramount umportance such that the
appropriate standard of diligence must be very high, if not the highest, degree of diligence.34 A
bank's liability as obligor is not merely vicarious but primary, wherein the defense of exercise of
due diligence in the selection and supervision of its employees is of no moment.35
Banks handle daily transactions involving millions of pesos.36 By the very nature of their work
the degree of responsibility, care and trustworthiness expected of their employees and officials is
far greater than those of ordinary clerks and employees.37 Banks are expected to exercise the
highest degree of diligence in the selection and supervision of their employees.38
On the issue of prescription, PCIBank claims that the action of Ford had prescribed because of
its inability to seek judicial relief seasonably, considering that the alleged negligent act took
place prior to December 19, 1977 but the relief was sought only in 1983, or seven years
thereafter.
The statute of limitations begins to run when the bank gives the depositor notice of the payment,
which is ordinarily when the check is returned to the alleged drawer as a voucher with a
statement of his account,39 and an action upon a check is ordinarily governed by the statutory
period applicable to instruments in writing.40
Our laws on the matter provide that the action upon a written contract must be brought within ten
year from the time the right of action accrues.41 hence, the reckoning time for the prescriptive
period begins when the instrument was issued and the corresponding check was returned by the
bank to its depositor (normally a month thereafter). Applying the same rule, the cause of action
for the recovery of the proceeds of Citibank Check No. SN 04867 would normally be a month
after December 19, 1977, when Citibank paid the face value of the check in the amount of
P4,746,114.41. Since the original complaint for the cause of action was filed on January 20,
1984, barely six years had lapsed. Thus, we conclude that Ford's cause of action to recover the
amount of Citibank Check No. SN 04867 was seasonably filed within the period provided by
law.
Finally, we also find thet Ford is not completely blameless in its failure to detect the fraud.
Failure on the part of the depositor to examine its passbook, statements of account, and cancelled
checks and to give notice within a reasonable time (or as required by statute) of any discrepancy
which it may in the exercise of due care and diligence find therein, serves to mitigate the banks'
liability by reducing the award of interest from twelve percent (12%) to six percent (6%) per
annum. As provided in Article 1172 of the Civil Code of the Philippines, respondibility arising
from negligence in the performance of every kind of obligation is also demandable, but such
liability may be regulated by the courts, according to the circumstances. In quasi-delicts, the
contributory negligence of the plaintiff shall reduce the damages that he may recover.42
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV
No. 25017 are AFFIRMED. PCIBank, know formerly as Insular Bank of Asia and America, id
declared solely responsible for the loss of the proceeds of Citibank Check No SN 04867 in the
amount P4,746,114.41, which shall be paid together with six percent (6%) interest thereon to
Ford Philippines Inc. from the date when the original complaint was filed until said amount is
fully paid.
However, the Decision and Resolution of the Court of Appeals in CA-G.R. No. 28430 are
MODIFIED as follows: PCIBank and Citibank are adjudged liable for and must share the loss,
(concerning the proceeds of Citibank Check Numbers SN 10597 and 16508 totalling
P12,163,298.10) on a fifty-fifty ratio, and each bank is ORDERED to pay Ford Philippines Inc.
P6,081,649.05, with six percent (6%) interest thereon, from the date the complaint was filed until
full payment of said amount.1âwphi1.nêt
Costs against Philippine Commercial International Bank and Citibank N.A.
SO ORDERED.
G.R. No. 115849 January 24, 1996
FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers Bank of the
Philippines) and MERCURIO RIVERA, petitioners,
vs.
COURT OF APPEALS, CARLOS EJERCITO, in substitution of DEMETRIO
DEMETRIA, and JOSE JANOLO, respondents.
DECISION
PANGANIBAN, J.:
In the absence of a formal deed of sale, may commitments given by bank officers in an exchange
of letters and/or in a meeting with the buyers constitute a perfected and enforceable contract of
sale over 101 hectares of land in Sta. Rosa, Laguna? Does the doctrine of "apparent authority"
apply in this case? If so, may the Central Bank-appointed conservator of Producers Bank (now
First Philippine International Bank) repudiate such "apparent authority" after said contract has
been deemed perfected? During the pendency of a suit for specific performance, does the filing
of a "derivative suit" by the majority shareholders and directors of the distressed bank to prevent
the enforcement or implementation of the sale violate the ban against forum-shopping?
Simply stated, these are the major questions brought before this Court in the instant Petition for
review on certiorari under Rule 45 of the Rules of Court, to set aside the Decision promulgated
January 14, 1994 of the respondent Court of Appeals1 in CA-G.R CV No. 35756 and the
Resolution promulgated June 14, 1994 denying the motion for reconsideration. The dispositive
portion of the said Decision reads:
WHEREFORE, the decision of the lower court is MODIFIED by the elimination of the
damages awarded under paragraphs 3, 4 and 6 of its dispositive portion and the reduction
of the award in paragraph 5 thereof to P75,000.00, to be assessed against defendant bank.
In all other aspects, said decision is hereby AFFIRMED.
All references to the original plaintiffs in the decision and its dispositive portion are
deemed, herein and hereafter, to legally refer to the plaintiff-appellee Carlos C. Ejercito.
Costs against appellant bank.
The dispositive portion of the trial court's2 decision dated July 10, 1991, on the other hand, is as
follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiffs and against the defendants as follows:
1. Declaring the existence of a perfected contract to buy and sell over the six (6) parcels
of land situated at Don Jose, Sta. Rosa, Laguna with an area of 101 hectares, more or less,
covered by and embraced in Transfer Certificates of Title Nos. T-106932 to T-106937,
inclusive, of the Land Records of Laguna, between the plaintiffs as buyers and the
defendant Producers Bank for an agreed price of Five and One Half Million
(P5,500,000.00) Pesos;
2. Ordering defendant Producers Bank of the Philippines, upon finality of this decision
and receipt from the plaintiffs the amount of P5.5 Million, to execute in favor of said
plaintiffs a deed of absolute sale over the aforementioned six (6) parcels of land, and to
immediately deliver to the plaintiffs the owner's copies of T.C.T. Nos. T-106932 to T-
106937, inclusive, for purposes of registration of the same deed and transfer of the six (6)
titles in the names of the plaintiffs;
3. Ordering the defendants, jointly and severally, to pay plaintiffs Jose A. Janolo and
Demetrio Demetria the sums of P200,000.00 each in moral damages;
 4. Ordering the defendants, jointly and severally, to pay plaintiffs the sum of P100,000.00
as exemplary damages ;
5. Ordering the defendants, jointly and severally, to pay the plaintiffs the amount of
P400,000.00 for and by way of attorney's fees;
6. Ordering the defendants to pay the plaintiffs, jointly and severally, actual and moderate
damages in the amount of P20,000.00;
With costs against the defendants.
After the parties filed their comment, reply, rejoinder, sur-rejoinder and reply to sur-rejoinder,
the petition was given due course in a Resolution dated January 18, 1995. Thence, the parties
filed their respective memoranda and reply memoranda. The First Division transferred this case
to the Third Division per resolution dated October 23, 1995. After carefully deliberating on the
aforesaid submissions, the Court assigned the case to the undersigned ponente for the writing of
this Decision.
The Parties
Petitioner First Philippine International Bank (formerly Producers Bank of the Philippines;
petitioner Bank, for brevity) is a banking institution organized and existing under the laws of the
Republic of the Philippines. Petitioner Mercurio Rivera (petitioner Rivera, for brevity) is of legal
age and was, at all times material to this case, Head-Manager of the Property Management
Department of the petitioner Bank.
Respondent Carlos Ejercito (respondent Ejercito, for brevity) is of legal age and is the assignee
of original plaintiffs-appellees Demetrio Demetria and Jose Janolo.
Respondent Court of Appeals is the court which issued the Decision and Resolution sought to be
set aside through this petition.
The Facts
The facts of this case are summarized in the respondent Court's Decision3 as follows:
(1) In the course of its banking operations, the defendant Producer Bank of the
Philippines acquired six parcels of land with a total area of 101 hectares located at Don
Jose, Sta. Rose, Laguna, and covered by Transfer Certificates of Title Nos. T-106932 to
T-106937. The property used to be owned by BYME Investment and Development
Corporation which had them mortgaged with the bank as collateral for a loan. The
original plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to purchase the
property and thus initiated negotiations for that purpose.
(2) In the early part of August 1987 said plaintiffs, upon the suggestion of BYME
investment's legal counsel, Jose Fajardo, met with defendant Mercurio Rivera, Manager
of the Property Management Department of the defendant bank. The meeting was held
pursuant to plaintiffs' plan to buy the property (TSN of Jan. 16, 1990, pp. 7-10). After the
meeting, plaintiff Janolo, following the advice of defendant Rivera, made a formal
purchase offer to the bank through a letter dated August 30, 1987 (Exh. "B"), as follows:

August 30, 1987

The Producers Bank of the Philippines

Makati, Metro Manila
Attn. Mr. Mercurio Q. Rivera
Manager, Property Management Dept.
Gentleman:
I have the honor to submit my formal offer to purchase your properties covered by titles
listed hereunder located at Sta. Rosa, Laguna, with a total area of 101 hectares, more or
less.

TCT NO. AREA

T-106932 113,580 sq. m.

T-106933 70,899 sq. m.

T-106934 52,246 sq. m.

T-106935 96,768 sq. m.

T-106936 187,114 sq. m.

T-106937 481,481 sq. m.

My offer is for PESOS: THREE MILLION FIVE HUNDRED THOUSAND

(P3,500,000.00) PESOS, in cash.
Kindly contact me at Telephone Number 921-1344.
(3) On September 1, 1987, defendant Rivera made on behalf of the bank a formal reply
by letter which is hereunder quoted (Exh. "C"):

September 1, 1987

JP M-P GUTIERREZ ENTERPRISES

142 Charisma St., Doña Andres II
Rosario, Pasig, Metro Manila
Attention: JOSE O. JANOLO
Dear Sir:
Thank you for your letter-offer to buy our six (6) parcels of acquired lots at Sta. Rosa,
Laguna (formerly owned by Byme Industrial Corp.). Please be informed however that the
bank's counter-offer is at P5.5 million for more than 101 hectares on lot basis.
We shall be very glad to hear your position on the on the matter.
Best regards.
(4) On September 17, 1987, plaintiff Janolo, responding to Rivera's aforequoted reply,
wrote (Exh. "D"):

September 17, 1987

Producers Bank
Paseo de Roxas
Makati, Metro Manila
Attention: Mr. Mercurio Rivera
Gentlemen:
In reply to your letter regarding my proposal to purchase your 101-hectare lot located at
Sta. Rosa, Laguna, I would like to amend my previous offer and I now propose to buy the
said lot at P4.250 million in CASH..
Hoping that this proposal meets your satisfaction.
(5) There was no reply to Janolo's foregoing letter of September 17, 1987. What took
place was a meeting on September 28, 1987 between the plaintiffs and Luis Co, the
Senior Vice-President of defendant bank. Rivera as well as Fajardo, the BYME lawyer,
attended the meeting. Two days later, or on September 30, 1987, plaintiff Janolo sent to
the bank, through Rivera, the following letter (Exh. "E"):
The Producers Bank of the Philippines
Paseo de Roxas, Makati
Metro Manila
Attention: Mr. Mercurio Rivera
Re: 101 Hectares of Land
in Sta. Rosa, Laguna
Gentlemen:
Pursuant to our discussion last 28 September 1987, we are pleased to inform you that we
are accepting your offer for us to purchase the property at Sta. Rosa, Laguna, formerly
owned by Byme Investment, for a total price of PESOS: FIVE MILLION FIVE
HUNDRED THOUSAND (P5,500,000.00).
Thank you.
(6) On October 12, 1987, the conservator of the bank (which has been placed under
conservatorship by the Central Bank since 1984) was replaced by an Acting Conservator
in the person of defendant Leonida T. Encarnacion. On November 4, 1987, defendant
Rivera wrote plaintiff Demetria the following letter (Exh. "F"):
Attention: Atty. Demetrio Demetria
Dear Sir:
Your proposal to buy the properties the bank foreclosed from Byme investment Corp.
located at Sta. Rosa, Laguna is under study yet as of this time by the newly created
committee for submission to the newly designated Acting Conservator of the bank.
For your information.
(7) What thereafter transpired was a series of demands by the plaintiffs for compliance by
the bank with what plaintiff considered as a perfected contract of sale, which demands
were in one form or another refused by the bank. As detailed by the trial court in its
decision, on November 17, 1987, plaintiffs through a letter to defendant Rivera (Exhibit
"G") tendered payment of the amount of P5.5 million "pursuant to (our) perfected sale
agreement." Defendants refused to receive both the payment and the letter. Instead, the
parcels of land involved in the transaction were advertised by the bank for sale to any
interested buyer (Exh, "H" and "H-1"). Plaintiffs demanded the execution by the bank of
the documents on what was considered as a "perfected agreement." Thus:
Mr. Mercurio Rivera
Manager, Producers Bank
Paseo de Roxas, Makati
Metro Manila
Dear Mr. Rivera:
This is in connection with the offer of our client, Mr. Jose O. Janolo, to purchase your
101-hectare lot located in Sta. Rosa, Laguna, and which are covered by TCT No. T-
106932 to 106937.
From the documents at hand, it appears that your counter-offer dated September 1, 1987
of this same lot in the amount of P5.5 million was accepted by our client thru a letter
dated September 30, 1987 and was received by you on October 5, 1987.
In view of the above circumstances, we believe that an agreement has been perfected. We
were also informed that despite repeated follow-up to consummate the purchase, you now
refuse to honor your commitment. Instead, you have advertised for sale the same lot to
others.
In behalf of our client, therefore, we are making this formal demand upon you to
consummate and execute the necessary actions/documentation within three (3) days from
your receipt hereof. We are ready to remit the agreed amount of P5.5 million at your
advice. Otherwise, we shall be constrained to file the necessary court action to protect the
interest of our client.
We trust that you will be guided accordingly.
(8) Defendant bank, through defendant Rivera, acknowledged receipt of the foregoing
letter and stated, in its communication of December 2, 1987 (Exh. "I"), that said letter has
been "referred . . . to the office of our Conservator for proper disposition" However, no
response came from the Acting Conservator. On December 14, 1987, the plaintiffs made
a second tender of payment (Exh. "L" and "L-1"), this time through the Acting
Conservator, defendant Encarnacion. Plaintiffs' letter reads:
PRODUCERS BANK OF
THE PHILIPPINES
Paseo de Roxas,
Makati, Metro Manila
Attn.: Atty. NIDA ENCARNACION
Central Bank Conservator
We are sending you herewith, in - behalf of our client, Mr. JOSE O. JANOLO, MBTC
Check No. 258387 in the amount of P5.5 million as our agreed purchase price of the 101-
hectare lot covered by TCT Nos. 106932, 106933, 106934, 106935, 106936 and 106937
and registered under Producers Bank.
This is in connection with the perfected agreement consequent from your offer of P5.5
Million as the purchase price of the said lots. Please inform us of the date of
documentation of the sale immediately.
 Kindly acknowledge receipt of our payment.
(9) The foregoing letter drew no response for more than four months. Then, on May 3,
1988, plaintiff, through counsel, made a final demand for compliance by the bank with its
obligations under the considered perfected contract of sale (Exhibit "N"). As recounted
by the trial court (Original Record, p. 656), in a reply letter dated May 12, 1988 (Annex
"4" of defendant's answer to amended complaint), the defendants through Acting
Conservator Encarnacion repudiated the authority of defendant Rivera and claimed that
his dealings with the plaintiffs, particularly his counter-offer of P5.5 Million are
unauthorized or illegal. On that basis, the defendants justified the refusal of the tenders of
payment and the non-compliance with the obligations under what the plaintiffs
considered to be a perfected contract of sale.
(10) On May 16, 1988, plaintiffs filed a suit for specific performance with damages
against the bank, its Manager Rivers and Acting Conservator Encarnacion. The basis of
the suit was that the transaction had with the bank resulted in a perfected contract of sale,
The defendants took the position that there was no such perfected sale because the
defendant Rivera is not authorized to sell the property, and that there was no meeting of
the minds as to the price.
On March 14, 1991, Henry L. Co (the brother of Luis Co), through counsel Sycip Salazar
Hernandez and Gatmaitan, filed a motion to intervene in the trial court, alleging that as
owner of 80% of the Bank's outstanding shares of stock, he had a substantial interest in
resisting the complaint. On July 8, 1991, the trial court issued an order denying the
motion to intervene on the ground that it was filed after trial had already been concluded.
It also denied a motion for reconsideration filed thereafter. From the trial court's decision,
the Bank, petitioner Rivera and conservator Encarnacion appealed to the Court of
Appeals which subsequently affirmed with modification the said judgment. Henry Co did
not appeal the denial of his motion for intervention.
In the course of the proceedings in the respondent Court, Carlos Ejercito was substituted in place
of Demetria and Janolo, in view of the assignment of the latters' rights in the matter in litigation
to said private respondent.
On July 11, 1992, during the pendency of the proceedings in the Court of Appeals, Henry Co and
several other stockholders of the Bank, through counsel Angara Abello Concepcion Regala and
Cruz, filed an action (hereafter, the "Second Case") — purportedly a "derivative suit" — with the
Regional Trial Court of Makati, Branch 134, docketed as Civil Case No. 92-1606, against
Encarnacion, Demetria and Janolo "to declare any perfected sale of the property as
unenforceable and to stop Ejercito from enforcing or implementing the sale"4 In his answer,
Janolo argued that the Second Case was barred by litis pendentia by virtue of the case then
pending in the Court of Appeals. During the pre-trial conference in the Second Case, plaintiffs
filed a Motion for Leave of Court to Dismiss the Case Without Prejudice. "Private respondent
opposed this motion on the ground, among others, that plaintiff's act of forum shopping justifies
the dismissal of both cases, with prejudice."5 Private respondent, in his memorandum, averred
that this motion is still pending in the Makati RTC.
In their Petition6 and Memorandum7, petitioners summarized their position as follows:
I.
The Court of Appeals erred in declaring that a contract of sale was perfected between
Ejercito (in substitution of Demetria and Janolo) and the bank.
 II.
The Court of Appeals erred in declaring the existence of an enforceable contract of sale
between the parties.
III.
The Court of Appeals erred in declaring that the conservator does not have the power to
overrule or revoke acts of previous management.
IV.
The findings and conclusions of the Court of Appeals do not conform to the evidence on
record.
On the other hand, petitioners prayed for dismissal of the instant suit on the ground8 that:
I.
Petitioners have engaged in forum shopping.
II.
The factual findings and conclusions of the Court of Appeals are supported by the
evidence on record and may no longer be questioned in this case.
III.
The Court of Appeals correctly held that there was a perfected contract between Demetria
and Janolo (substituted by; respondent Ejercito) and the bank.
IV.
The Court of Appeals has correctly held that the conservator, apart from being estopped
from repudiating the agency and the contract, has no authority to revoke the contract of
sale.
The Issues
From the foregoing positions of the parties, the issues in this case may be summed up as follows:
1) Was there forum-shopping on the part of petitioner Bank?
2) Was there a perfected contract of sale between the parties?
3) Assuming there was, was the said contract enforceable under the statute of frauds?
4) Did the bank conservator have the unilateral power to repudiate the authority of the
bank officers and/or to revoke the said contract?
5) Did the respondent Court commit any reversible error in its findings of facts?
The First Issue: Was There Forum-Shopping?
In order to prevent the vexations of multiple petitions and actions, the Supreme Court
promulgated Revised Circular No. 28-91 requiring that a party "must certify under oath . . . [that]
(a) he has not (t)heretofore commenced any other action or proceeding involving the same issues
in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his
knowledge, no such action or proceeding is pending" in said courts or agencies. A violation of
the said circular entails sanctions that include the summary dismissal of the multiple petitions or
complaints. To be sure, petitioners have included a VERIFICATION/CERTIFICATION in their
Petition stating "for the record(,) the pendency of Civil Case No. 92-1606 before the Regional
Trial Court of Makati, Branch 134, involving a derivative suit filed by stockholders of petitioner
Bank against the conservator and other defendants but which is the subject of a pending Motion
to Dismiss Without Prejudice.9
Private respondent Ejercito vigorously argues that in spite of this verification, petitioners are
guilty of actual forum shopping because the instant petition pending before this Court involves
"identical parties or interests represented, rights asserted and reliefs sought (as that) currently
pending before the Regional Trial Court, Makati Branch 134 in the Second Case. In fact, the
issues in the two cases are so interwined that a judgement or resolution in either case will
constitute res judicata in the other." 10
On the other hand, petitioners explain 11 that there is no forum-shopping because:
1) In the earlier or "First Case" from which this proceeding arose, the Bank was
impleaded as a defendant, whereas in the "Second Case" (assuming the Bank is the real
party in interest in a derivative suit), it was plaintiff;
2) "The derivative suit is not properly a suit for and in behalf of the corporation under the
circumstances";
3) Although the CERTIFICATION/VERIFICATION (supra) signed by the Bank
president and attached to the Petition identifies the action as a "derivative suit," it "does
not mean that it is one" and "(t)hat is a legal question for the courts to decide";
4) Petitioners did not hide the Second Case at they mentioned it in the said
VERIFICATION/CERTIFICATION.
We rule for private respondent.
To begin with, forum-shopping originated as a concept in private international law.12, where non-
resident litigants are given the option to choose the forum or place wherein to bring their suit for
various reasons or excuses, including to secure procedural advantages, to annoy and harass the
defendant, to avoid overcrowded dockets, or to select a more friendly venue. To combat these
less than honorable excuses, the principle of forum non conveniens was developed whereby a
court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most
"convenient" or available forum and the parties are not precluded from seeking remedies
elsewhere.
In this light, Black's Law Dictionary 13 says that forum shopping "occurs when a party attempts
to have his action tried in a particular court or jurisdiction where he feels he will receive the most
favorable judgment or verdict." Hence, according to Words and Phrases14, "a litigant is open to
the charge of "forum shopping" whenever he chooses a forum with slight connection to factual
circumstances surrounding his suit, and litigants should be encouraged to attempt to settle their
differences without imposing undue expenses and vexatious situations on the courts".
In the Philippines, forum shopping has acquired a connotation encompassing not only a choice of
venues, as it was originally understood in conflicts of laws, but also to a choice of remedies. As
to the first (choice of venues), the Rules of Court, for example, allow a plaintiff to commence
personal actions "where the defendant or any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff" (Rule 4, Sec, 2
[b]). As to remedies, aggrieved parties, for example, are given a choice of pursuing civil
liabilities independently of the criminal, arising from the same set of facts. A passenger of a
public utility vehicle involved in a vehicular accident may sue on culpa contractual, culpa
aquiliana or culpa criminal — each remedy being available independently of the others —
although he cannot recover more than once.
 In either of these situations (choice of venue or choice of remedy), the litigant actually
shops for a forum of his action, This was the original concept of the term forum
shopping.
Eventually, however, instead of actually making a choice of the forum of their actions,
litigants, through the encouragement of their lawyers, file their actions in all available
courts, or invoke all relevant remedies simultaneously. This practice had not only resulted
to (sic) conflicting adjudications among different courts and consequent confusion
enimical (sic) to an orderly administration of justice. It had created extreme
inconvenience to some of the parties to the action.
Thus, "forum shopping" had acquired a different concept — which is unethical
professional legal practice. And this necessitated or had given rise to the formulation of
rules and canons discouraging or altogether prohibiting the practice. 15
What therefore originally started both in conflicts of laws and in our domestic law as a legitimate
device for solving problems has been abused and mis-used to assure scheming litigants of
dubious reliefs.
To avoid or minimize this unethical practice of subverting justice, the Supreme Court, as already
mentioned, promulgated Circular 28-91. And even before that, the Court had prescribed it in the
Interim Rules and Guidelines issued on January 11, 1983 and had struck down in several cases 16
the inveterate use of this insidious malpractice. Forum shopping as "the filing of repetitious suits
in different courts" has been condemned by Justice Andres R. Narvasa (now Chief Justice) in
Minister of Natural Resources, et al., vs. Heirs of Orval Hughes, et al., "as a reprehensible
manipulation of court processes and proceedings . . ." 17 when does forum shopping take place?
There is forum-shopping whenever, as a result of an adverse opinion in one forum, a
party seeks a favorable opinion (other than by appeal or certiorari) in another. The
principle applies not only with respect to suits filed in the courts but also in connection
with litigations commenced in the courts while an administrative proceeding is pending,
as in this case, in order to defeat administrative processes and in anticipation of an
unfavorable administrative ruling and a favorable court ruling. This is specially so, as in
this case, where the court in which the second suit was brought, has no jurisdiction.18
The test for determining whether a party violated the rule against forum shopping has been laid
dawn in the 1986 case of Buan vs. Lopez 19, also by Chief Justice Narvasa, and that is, forum
shopping exists where the elements of litis pendentia are present or where a final judgment in
one case will amount to res judicata in the other, as follows:
There thus exists between the action before this Court and RTC Case No. 86-36563
identity of parties, or at least such parties as represent the same interests in both actions,
as well as identity of rights asserted and relief prayed for, the relief being founded on the
same facts, and the identity on the two preceding particulars is such that any judgment
rendered in the other action, will, regardless of which party is successful, amount to res
adjudicata in the action under consideration: all the requisites, in fine, of auter action
pendant.
xxx xxx xxx
As already observed, there is between the action at bar and RTC Case No. 86-36563, an
identity as regards parties, or interests represented, rights asserted and relief sought, as
well as basis thereof, to a degree sufficient to give rise to the ground for dismissal known
as auter action pendant or lis pendens. That same identity puts into operation the sanction
 of twin dismissals just mentioned. The application of this sanction will prevent any
further delay in the settlement of the controversy which might ensue from attempts to
seek reconsideration of or to appeal from the Order of the Regional Trial Court in Civil
Case No. 86-36563 promulgated on July 15, 1986, which dismissed the petition upon
grounds which appear persuasive.
Consequently, where a litigant (or one representing the same interest or person) sues the same
party against whom another action or actions for the alleged violation of the same right and the
enforcement of the same relief is/are still pending, the defense of litis pendencia in one case is
bar to the others; and, a final judgment in one would constitute res judicata and thus would cause
the dismissal of the rest. In either case, forum shopping could be cited by the other party as a
ground to ask for summary dismissal of the two 20 (or more) complaints or petitions, and for
imposition of the other sanctions, which are direct contempt of court, criminal prosecution, and
disciplinary action against the erring lawyer.
Applying the foregoing principles in the case before us and comparing it with the Second Case, it
is obvious that there exist identity of parties or interests represented, identity of rights or causes
and identity of reliefs sought.
Very simply stated, the original complaint in the court a quo which gave rise to the instant
petition was filed by the buyer (herein private respondent and his predecessors-in-interest)
against the seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the
other hand, the complaint 21 in the Second Case seeks to declare such purported sale involving
the same real property "as unenforceable as against the Bank", which is the petitioner herein. In
other words, in the Second Case, the majority stockholders, in representation of the Bank, are
seeking to accomplish what the Bank itself failed to do in the original case in the trial court. In
brief, the objective or the relief being sought, though worded differently, is the same, namely, to
enable the petitioner Bank to escape from the obligation to sell the property to respondent. In
Danville Maritime, Inc. vs. Commission on Audit. 22, this Court ruled that the filing by a party
of two apparently different actions, but with the same objective, constituted forum shopping:
In the attempt to make the two actions appear to be different, petitioner impleaded
different respondents therein — PNOC in the case before the lower court and the COA in
the case before this Court and sought what seems to be different reliefs. Petitioner asks
this Court to set aside the questioned letter-directive of the COA dated October 10, 1988
and to direct said body to approve the Memorandum of Agreement entered into by and
between the PNOC and petitioner, while in the complaint before the lower court
petitioner seeks to enjoin the PNOC from conducting a rebidding and from selling to
other parties the vessel "T/T Andres Bonifacio", and for an extension of time for it to
comply with the paragraph 1 of the memorandum of agreement and damages. One can
see that although the relief prayed for in the two (2) actions are ostensibly different, the
ultimate objective in both actions is the same, that is, approval of the sale of vessel in
favor of petitioner and to overturn the letter-directive of the COA of October 10, 1988
disapproving the sale. (emphasis supplied).
In an earlier case 23 but with the same logic and vigor, we held:
In other words, the filing by the petitioners of the instant special civil action for
certiorari and prohibition in this Court despite the pendency of their action in the Makati
Regional Trial Court, is a species of forum-shopping. Both actions unquestionably
involve the same transactions, the same essential facts and circumstances. The petitioners'
claim of absence of identity simply because the PCGG had not been impleaded in the
 RTC suit, and the suit did not involve certain acts which transpired after its
commencement, is specious. In the RTC action, as in the action before this Court, the
validity of the contract to purchase and sell of September 1, 1986, i.e., whether or not it
had been efficaciously rescinded, and the propriety of implementing the same (by paying
the pledgee banks the amount of their loans, obtaining the release of the pledged shares,
etc.) were the basic issues. So, too, the relief was the same: the prevention of such
implementation and/or the restoration of the status quo ante. When the acts sought to be
restrained took place anyway despite the issuance by the Trial Court of a temporary
restraining order, the RTC suit did not become functus oficio. It remained an effective
vehicle for obtention of relief; and petitioners' remedy in the premises was plain and
patent: the filing of an amended and supplemental pleading in the RTC suit, so as to
include the PCGG as defendant and seek nullification of the acts sought to be enjoined
but nonetheless done. The remedy was certainly not the institution of another action in
another forum based on essentially the same facts, The adoption of this latter recourse
renders the petitioners amenable to disciplinary action and both their actions, in this
Court as well as in the Court a quo, dismissible.
In the instant case before us, there is also identity of parties, or at least, of interests represented.
Although the plaintiffs in the Second Case (Henry L. Co. et al.) are not name parties in the First
Case, they represent the same interest and entity, namely, petitioner Bank, because:
Firstly, they are not suing in their personal capacities, for they have no direct personal interest in
the matter in controversy. They are not principally or even subsidiarily liable; much less are they
direct parties in the assailed contract of sale; and
Secondly, the allegations of the complaint in the Second Case show that the stockholders are
bringing a "derivative suit". In the caption itself, petitioners claim to have brought suit "for and
in behalf of the Producers Bank of the Philippines" 24. Indeed, this is the very essence of a
derivative suit:
An individual stockholder is permitted to institute a derivative suit on behalf of the
corporation wherein he holdsstock in order to protect or vindicate corporate rights,
whenever the officials of the corporation refuse to sue, or are the ones to be sued or hold
the control of the corporation. In such actions, the suing stockholder is regarded as a
nominal party, with the corporation as the real party in interest. (Gamboa v. Victoriano,
90 SCRA 40, 47 [1979]; emphasis supplied).
In the face of the damaging admissions taken from the complaint in the Second Case, petitioners,
quite strangely, sought to deny that the Second Case was a derivative suit, reasoning that it was
brought, not by the minority shareholders, but by Henry Co et al., who not only own, hold or
control over 80% of the outstanding capital stock, but also constitute the majority in the Board of
Directors of petitioner Bank. That being so, then they really represent the Bank. So, whether they
sued "derivatively" or directly, there is undeniably an identity of interests/entity represented.
Petitioner also tried to seek refuge in the corporate fiction that the personality Of the Bank is
separate and distinct from its shareholders. But the rulings of this Court are consistent: "When
the fiction is urged as a means of perpetrating a fraud or an illegal act or as a vehicle for the
evasion of an existing obligation, the circumvention of statutes, the achievement or perfection of
a monopoly or generally the perpetration of knavery or crime, the veil with which the law covers
and isolates the corporation from the members or stockholders who compose it will be lifted to
allow for its consideration merely as an aggregation of individuals." 25
In addition to the many cases 26 where the corporate fiction has been disregarded, we now add
the instant case, and declare herewith that the corporate veil cannot be used to shield an
otherwise blatant violation of the prohibition against forum-shopping. Shareholders, whether
suing as the majority in direct actions or as the minority in a derivative suit, cannot be allowed to
trifle with court processes, particularly where, as in this case, the corporation itself has not been
remiss in vigorously prosecuting or defending corporate causes and in using and applying
remedies available to it. To rule otherwise would be to encourage corporate litigants to use their
shareholders as fronts to circumvent the stringent rules against forum shopping.
Finally, petitioner Bank argued that there cannot be any forum shopping, even assuming
arguendo that there is identity of parties, causes of action and reliefs sought, "because it (the
Bank) was the defendant in the (first) case while it was the plaintiff in the other (Second
Case)",citing as authority Victronics Computers, Inc., vs. Regional Trial Court, Branch 63,
Makati, etc. et al., 27 where Court held:
The rule has not been extended to a defendant who, for reasons known only to him,
commences a new action against the plaintiff — instead of filing a responsive pleading in
the other case — setting forth therein, as causes of action, specific denials, special and
affirmative defenses or even counterclaims, Thus, Velhagen's and King's motion to
dismiss Civil Case No. 91-2069 by no means negates the charge of forum-shopping as
such did not exist in the first place. (emphasis supplied)
Petitioner pointed out that since it was merely the defendant in the original case, it could not
have chosen the forum in said case.
Respondent, on the other hand, replied that there is a difference in factual setting between
Victronics and the present suit. In the former, as underscored in the above-quoted Court ruling,
the defendants did not file any responsive pleading in the first case. In other words, they did not
make any denial or raise any defense or counter-claim therein In the case before us however,
petitioners filed a responsive pleading to the complaint — as a result of which, the issues were
joined.
Indeed, by praying for affirmative reliefs and interposing counter–claims in their responsive
pleadings, the petitioners became plaintiffs themselves in the original case, giving unto
themselves the very remedies they repeated in the Second Case.
Ultimately, what is truly important to consider in determining whether forum-shopping exists or
not is the vexation caused the courts and parties-litigant by a party who asks different courts
and/or administrative agencies to rule on the same or related causes and/or to grant the same or
substantially the same reliefs, in the process creating the possibility of conflicting decisions
being rendered by the different fora upon the same issue. In this case, this is exactly the problem:
a decision recognizing the perfection and directing the enforcement of the contract of sale will
directly conflict with a possible decision in the Second Case barring the parties front enforcing or
implementing the said sale. Indeed, a final decision in one would constitute res judicata in the
other 28.
The foregoing conclusion finding the existence of forum-shopping notwithstanding, the only
sanction possible now is the dismissal of both cases with prejudice, as the other sanctions cannot
be imposed because petitioners' present counsel entered their appearance only during the
proceedings in this Court, and the Petition's VERIFICATION/CERTIFICATION contained
sufficient allegations as to the pendency of the Second Case to show good faith in observing
Circular 28-91. The Lawyers who filed the Second Case are not before us; thus the rudiments of
due process prevent us from motu propio imposing disciplinary measures against them in this
Decision. However, petitioners themselves (and particularly Henry Co, et al.) as litigants are
admonished to strictly follow the rules against forum-shopping and not to trifle with court
proceedings and processes They are warned that a repetition of the same will be dealt with more
severely.
Having said that, let it be emphasized that this petition should be dismissed not merely because
of forum-shopping but also because of the substantive issues raised, as will be discussed shortly.
The Second Issue: Was The Contract Perfected?
The respondent Court correctly treated the question of whether or not there was, on the basis of
the facts established, a perfected contract of sale as the ultimate issue. Holding that a valid
contract has been established, respondent Court stated:
There is no dispute that the object of the transaction is that property owned by the
defendant bank as acquired assets consisting of six (6) parcels of land specifically
identified under Transfer Certificates of Title Nos. T-106932 to T-106937. It is likewise
beyond cavil that the bank intended to sell the property. As testified to by the Bank's
Deputy Conservator, Jose Entereso, the bank was looking for buyers of the property. It is
definite that the plaintiffs wanted to purchase the property and it was precisely for this
purpose that they met with defendant Rivera, Manager of the Property Management
Department of the defendant bank, in early August 1987. The procedure in the sale of
acquired assets as well as the nature and scope of the authority of Rivera on the matter is
clearly delineated in the testimony of Rivera himself, which testimony was relied upon by
both the bank and by Rivera in their appeal briefs. Thus (TSN of July 30, 1990. pp. 19-
20):
A: The procedure runs this way: Acquired assets was turned over to me and then I
published it in the form of an inter-office memorandum distributed to all branches
that these are acquired assets for sale. I was instructed to advertise acquired assets
for sale so on that basis, I have to entertain offer; to accept offer, formal offer and
upon having been offered, I present it to the Committee. I provide the Committee
with necessary information about the property such as original loan of the
borrower, bid price during the foreclosure, total claim of the bank, the appraised
value at the time the property is being offered for sale and then the information
which are relative to the evaluation of the bank to buy which the Committee
considers and it is the Committee that evaluate as against the exposure of the bank
and it is also the Committee that submit to the Conservator for final approval and
once approved, we have to execute the deed of sale and it is the Conservator that
sign the deed of sale, sir.
The plaintiffs, therefore, at that meeting of August 1987 regarding their purpose of
buying the property, dealt with and talked to the right person. Necessarily, the agenda
was the price of the property, and plaintiffs were dealing with the bank official authorized
to entertain offers, to accept offers and to present the offer to the Committee before which
the said official is authorized to discuss information relative to price determination.
Necessarily, too, it being inherent in his authority, Rivera is the officer from whom
official information regarding the price, as determined by the Committee and approved
by the Conservator, can be had. And Rivera confirmed his authority when he talked with
the plaintiff in August 1987. The testimony of plaintiff Demetria is clear on this point
(TSN of May 31,1990, pp. 27-28):
 Q: When you went to the Producers Bank and talked with Mr. Mercurio Rivera,
did you ask him point-blank his authority to sell any property?
A: No, sir. Not point blank although it came from him, (W)hen I asked him how
long it would take because he was saying that the matter of pricing will be passed
upon by the committee. And when I asked him how long it will take for the
committee to decide and he said the committee meets every week. If I am not
mistaken Wednesday and in about two week's (sic) time, in effect what he was
saying he was not the one who was to decide. But he would refer it to the
committee and he would relay the decision of the committee to me.
Q — Please answer the question.
A — He did not say that he had the authority (.) But he said he would refer the
matter to the committee and he would relay the decision to me and he did just like
that.
"Parenthetically, the Committee referred to was the Past Due Committee of which Luis
Co was the Head, with Jose Entereso as one of the members.
What transpired after the meeting of early August 1987 are consistent with the authority
and the duties of Rivera and the bank's internal procedure in the matter of the sale of
bank's assets. As advised by Rivera, the plaintiffs made a formal offer by a letter dated
August 20, 1987 stating that they would buy at the price of P3.5 Million in cash. The
letter was for the attention of Mercurio Rivera who was tasked to convey and accept such
offers. Considering an aspect of the official duty of Rivera as some sort of intermediary
between the plaintiffs-buyers with their proposed buying price on one hand, and the bank
Committee, the Conservator and ultimately the bank itself with the set price on the other,
and considering further the discussion of price at the meeting of August resulting in a
formal offer of P3.5 Million in cash, there can be no other logical conclusion than that
when, on September 1, 1987, Rivera informed plaintiffs by letter that "the bank's counter-
offer is at P5.5 Million for more than 101 hectares on lot basis," such counter-offer price
had been determined by the Past Due Committee and approved by the Conservator after
Rivera had duly presented plaintiffs' offer for discussion by the Committee of such
matters as original loan of borrower, bid price during foreclosure, total claim of the bank,
and market value. Tersely put, under the established facts, the price of P5.5 Million was,
as clearly worded in Rivera's letter (Exh. "E"), the official and definitive price at which
the bank was selling the property.
There were averments by defendants below, as well as before this Court, that the P5.5
Million price was not discussed by the Committee and that price. As correctly
characterized by the trial court, this is not credible. The testimonies of Luis Co and Jose
Entereso on this point are at best equivocal and considering the gratuitous and self-
serving character of these declarations, the bank's submission on this point does not
inspire belief. Both Co ad Entereso, as members of the Past Due Committee of the bank,
claim that the offer of the plaintiff was never discussed by the Committee. In the same
vein, both Co and Entereso openly admit that they seldom attend the meetings of the
Committee. It is important to note that negotiations on the price had started in early
August and the plaintiffs had already offered an amount as purchase price, having been
made to understand by Rivera, the official in charge of the negotiation, that the price will
be submitted for approval by the bank and that the bank's decision will be relayed to
plaintiffs. From the facts, the official bank price. At any rate, the bank placed its official,
 Rivera, in a position of authority to accept offers to buy and negotiate the sale by having
the offer officially acted upon by the bank. The bank cannot turn around and later say, as
it now does, that what Rivera states as the bank's action on the matter is not in fact so. It
is a familiar doctrine, the doctrine of ostensible authority, that if a corporation knowingly
permits one of its officers, or any other agent, to do acts within the scope of an apparent
authority, and thus holds him out to the public as possessing power to do those acts, the
corporation will, as against any one who has in good faith dealt with the corporation
through such agent, he estopped from denying his authority (Francisco v. GSIS, 7 SCRA
577, 583-584; PNB v. Court of Appeals, 94 SCRA 357, 369-370; Prudential Bank v.
Court of Appeals, G.R. No. 103957, June 14, 1993). 29
Article 1318 of the Civil Code enumerates the requisites of a valid and perfected contract as
follows: "(1) Consent of the contracting parties; (2) Object certain which is the subject matter of
the contract; (3) Cause of the obligation which is established."
There is no dispute on requisite no. 2. The object of the questioned contract consists of the six (6)
parcels of land in Sta. Rosa, Laguna with an aggregate area of about 101 hectares, more or less,
and covered by Transfer Certificates of Title Nos. T-106932 to T-106937. There is, however, a
dispute on the first and third requisites.
Petitioners allege that "there is no counter-offer made by the Bank, and any supposed counter-
offer which Rivera (or Co) may have made is unauthorized. Since there was no counter-offer by
the Bank, there was nothing for Ejercito (in substitution of Demetria and Janolo) to accept." 30
They disputed the factual basis of the respondent Court's findings that there was an offer made
by Janolo for P3.5 million, to which the Bank counter-offered P5.5 million. We have perused the
evidence but cannot find fault with the said Court's findings of fact. Verily, in a petition under
Rule 45 such as this, errors of fact — if there be any - are, as a rule, not reviewable. The mere
fact that respondent Court (and the trial court as well) chose to believe the evidence presented by
respondent more than that presented by petitioners is not by itself a reversible error. In fact, such
findings merit serious consideration by this Court, particularly where, as in this case, said courts
carefully and meticulously discussed their findings. This is basic.
Be that as it may, and in addition to the foregoing disquisitions by the Court of Appeals, let us
review the question of Rivera's authority to act and petitioner's allegations that the P5.5 million
counter-offer was extinguished by the P4.25 million revised offer of Janolo. Here, there are
questions of law which could be drawn from the factual findings of the respondent Court. They
also delve into the contractual elements of consent and cause.
The authority of a corporate officer in dealing with third persons may be actual or apparent. The
doctrine of "apparent authority", with special reference to banks, was laid out in Prudential Bank
vs. Court of Appeals31, where it was held that:
Conformably, we have declared in countless decisions that the principal is liable for
obligations contracted by the agent. The agent's apparent representation yields to the
principal's true representation and the contract is considered as entered into between the
principal and the third person (citing National Food Authority vs. Intermediate Appellate
Court, 184 SCRA 166).
A bank is liable for wrongful acts of its officers done in the interests of the bank
or in the course of dealings of the officers in their representative capacity but not
for acts outside the scape of their authority (9 C.J.S., p. 417). A bank holding out
its officers and agents as worthy of confidence will not be permitted to profit by
the frauds they may thus be enabled to perpetrate in the apparent scope of their
 employment; nor will it be permitted to shirk its responsibility for such frauds
even though no benefit may accrue to the bank therefrom (10 Am Jur 2d, p. 114).
Accordingly, a banking corporation is liable to innocent third persons where the
representation is made in the course of its business by an agent acting within the
general scope of his authority even though, in the particular case, the agent is
secretly abusing his authority and attempting to perpetrate a fraud upon his
principal or some other person, for his own ultimate benefit (McIntosh v. Dakota
Trust Co., 52 ND 752, 204 NW 818, 40 ALR 1021).
Application of these principles is especially necessary because banks have a fiduciary
relationship with the public and their stability depends on the confidence of the people in
their honesty and efficiency. Such faith will be eroded where banks do not exercise strict
care in the selection and supervision of its employees, resulting in prejudice to their
depositors.
From the evidence found by respondent Court, it is obvious that petitioner Rivera has apparent or
implied authority to act for the Bank in the matter of selling its acquired assets. This evidence
includes the following:
(a) The petition itself in par. II-i (p. 3) states that Rivera was "at all times material to this
case, Manager of the Property Management Department of the Bank". By his own
admission, Rivera was already the person in charge of the Bank's acquired assets (TSN,
August 6, 1990, pp. 8-9);
(b) As observed by respondent Court, the land was definitely being sold by the Bank.
And during the initial meeting between the buyers and Rivera, the latter suggested that
the buyers' offer should be no less than P3.3 million (TSN, April 26, 1990, pp. 16-17);
(c) Rivera received the buyers' letter dated August 30, 1987 offering P3.5 million (TSN,
30 July 1990, p.11);
(d) Rivera signed the letter dated September 1, 1987 offering to sell the property for P5.5
million (TSN, July 30, p. 11);
(e) Rivera received the letter dated September 17, 1987 containing the buyers' proposal to
buy the property for P4.25 million (TSN, July 30, 1990, p. 12);
(f) Rivera, in a telephone conversation, confirmed that the P5.5 million was the final
price of the Bank (TSN, January 16, 1990, p. 18);
(g) Rivera arranged the meeting between the buyers and Luis Co on September 28, 1994,
during which the Bank's offer of P5.5 million was confirmed by Rivera (TSN, April 26,
1990, pp. 34-35). At said meeting, Co, a major shareholder and officer of the Bank,
confirmed Rivera's statement as to the finality of the Bank's counter-offer of P5.5 million
(TSN, January 16, 1990, p. 21; TSN, April 26, 1990, p. 35);
(h) In its newspaper advertisements and announcements, the Bank referred to Rivera as
the officer acting for the Bank in relation to parties interested in buying assets
owned/acquired by the Bank. In fact, Rivera was the officer mentioned in the Bank's
advertisements offering for sale the property in question (cf. Exhs. "S" and "S-1").
In the very recent case of Limketkai Sons Milling, Inc. vs. Court of Appeals, et. al.32, the Court,
through Justice Jose A. R. Melo, affirmed the doctrine of apparent authority as it held that the
apparent authority of the officer of the Bank of P.I. in charge of acquired assets is borne out by
similar circumstances surrounding his dealings with buyers.
To be sure, petitioners attempted to repudiate Rivera's apparent authority through documents and
testimony which seek to establish Rivera's actual authority. These pieces of evidence, however,
are inherently weak as they consist of Rivera's self-serving testimony and various inter-office
memoranda that purport to show his limited actual authority, of which private respondent cannot
be charged with knowledge. In any event, since the issue is apparent authority, the existence of
which is borne out by the respondent Court's findings, the evidence of actual authority is
immaterial insofar as the liability of a corporation is concerned 33.
Petitioners also argued that since Demetria and Janolo were experienced lawyers and their "law
firm" had once acted for the Bank in three criminal cases, they should be charged with actual
knowledge of Rivera's limited authority. But the Court of Appeals in its Decision (p. 12) had
already made a factual finding that the buyers had no notice of Rivera's actual authority prior to
the sale. In fact, the Bank has not shown that they acted as its counsel in respect to any acquired
assets; on the other hand, respondent has proven that Demetria and Janolo merely associated
with a loose aggrupation of lawyers (not a professional partnership), one of whose members
(Atty. Susana Parker) acted in said criminal cases.
Petitioners also alleged that Demetria's and Janolo's P4.25 million counter-offer in the letter
dated September 17, 1987 extinguished the Bank's offer of P5.5 million 34 .They disputed the
respondent Court's finding that "there was a meeting of minds when on 30 September 1987
Demetria and Janolo through Annex "L" (letter dated September 30, 1987) "accepted" Rivera's
counter offer of P5.5 million under Annex "J" (letter dated September 17, 1987)", citing the late
Justice Paras35, Art. 1319 of the Civil Code 36 and related Supreme Court rulings starting with
Beaumont vs. Prieto 37.
However, the above-cited authorities and precedents cannot apply in the instant case because, as
found by the respondent Court which reviewed the testimonies on this point, what was
"accepted" by Janolo in his letter dated September 30, 1987 was the Bank's offer of P5.5 million
as confirmed and reiterated to Demetria and Atty. Jose Fajardo by Rivera and Co during their
meeting on September 28, 1987. Note that the said letter of September 30, 1987 begins
with"(p)ursuant to our discussion last 28 September 1987 . . .
Petitioners insist that the respondent Court should have believed the testimonies of Rivera and
Co that the September 28, 1987 meeting "was meant to have the offerors improve on their
position of P5.5. million."38 However, both the trial court and the Court of Appeals found
petitioners' testimonial evidence "not credible", and we find no basis for changing this finding of
fact.
Indeed, we see no reason to disturb the lower courts' (both the RTC and the CA) common
finding that private respondents' evidence is more in keeping with truth and logic — that during
the meeting on September 28, 1987, Luis Co and Rivera "confirmed that the P5.5 million price
has been passed upon by the Committee and could no longer be lowered (TSN of April 27, 1990,
pp. 34-35)"39. Hence, assuming arguendo that the counter-offer of P4.25 million extinguished
the offer of P5.5 million, Luis Co's reiteration of the said P5.5 million price during the
September 28, 1987 meeting revived the said offer. And by virtue of the September 30, 1987
letter accepting this revived offer, there was a meeting of the minds, as the acceptance in said
letter was absolute and unqualified.
We note that the Bank's repudiation, through Conservator Encarnacion, of Rivera's authority and
action, particularly the latter's counter-offer of P5.5 million, as being "unauthorized and illegal"
came only on May 12, 1988 or more than seven (7) months after Janolo' acceptance. Such delay,
and the absence of any circumstance which might have justifiably prevented the Bank from
acting earlier, clearly characterizes the repudiation as nothing more than a last-minute attempt on
the Bank's part to get out of a binding contractual obligation.
Taken together, the factual findings of the respondent Court point to an implied admission on the
part of the petitioners that the written offer made on September 1, 1987 was carried through
during the meeting of September 28, 1987. This is the conclusion consistent with human
experience, truth and good faith.
It also bears noting that this issue of extinguishment of the Bank's offer of P5.5 million was
raised for the first time on appeal and should thus be disregarded.
This Court in several decisions has repeatedly adhered to the principle that points of law,
theories, issues of fact and arguments not adequately brought to the attention of the trial
court need not be, and ordinarily will not be, considered by a reviewing court, as they
cannot be raised for the first time on appeal (Santos vs. IAC, No. 74243, November 14,
1986, 145 SCRA 592).40
. . . It is settled jurisprudence that an issue which was neither averred in the complaint nor
raised during the trial in the court below cannot be raised for the first time on appeal as it
would be offensive to the basic rules of fair play, justice and due process (Dihiansan vs.
CA, 153 SCRA 713 [1987]; Anchuelo vs. IAC, 147 SCRA 434 [1987]; Dulos Realty &
Development Corp. vs. CA, 157 SCRA 425 [1988]; Ramos vs. IAC, 175 SCRA 70
[1989]; Gevero vs. IAC, G.R. 77029, August 30, 1990).41
Since the issue was not raised in the pleadings as an affirmative defense, private respondent was
not given an opportunity in the trial court to controvert the same through opposing evidence.
Indeed, this is a matter of due process. But we passed upon the issue anyway, if only to avoid
deciding the case on purely procedural grounds, and we repeat that, on the basis of the evidence
already in the record and as appreciated by the lower courts, the inevitable conclusion is simply
that there was a perfected contract of sale.
The Third Issue: Is the Contract Enforceable?
The petition alleged42:
Even assuming that Luis Co or Rivera did relay a verbal offer to sell at P5.5 million
during the meeting of 28 September 1987, and it was this verbal offer that Demetria and
Janolo accepted with their letter of 30 September 1987, the contract produced thereby
would be unenforceable by action — there being no note, memorandum or writing
subscribed by the Bank to evidence such contract. (Please see article 1403[2], Civil
Code.)
Upon the other hand, the respondent Court in its Decision (p, 14) stated:
. . . Of course, the bank's letter of September 1, 1987 on the official price and the
plaintiffs' acceptance of the price on September 30, 1987, are not, in themselves, formal
contracts of sale. They are however clear embodiments of the fact that a contract of sale
was perfected between the parties, such contract being binding in whatever form it may
have been entered into (case citations omitted). Stated simply, the banks' letter of
September 1, 1987, taken together with plaintiffs' letter dated September 30, 1987,
constitute in law a sufficient memorandum of a perfected contract of sale.
The respondent Court could have added that the written communications commenced not only
from September 1, 1987 but from Janolo's August 20, 1987 letter. We agree that, taken together,
these letters constitute sufficient memoranda — since they include the names of the parties, the
terms and conditions of the contract, the price and a description of the property as the object of
the contract.
But let it be assumed arguendo that the counter-offer during the meeting on September 28, 1987
did constitute a "new" offer which was accepted by Janolo on September 30, 1987. Still, the
statute of frauds will not apply by reason of the failure of petitioners to object to oral testimony
proving petitioner Bank's counter-offer of P5.5 million. Hence, petitioners — by such utter
failure to object — are deemed to have waived any defects of the contract under the statute of
frauds, pursuant to Article 1405 of the Civil Code:
Art. 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of article 1403,
are ratified by the failure to object to the presentation of oral evidence to prove the same,
or by the acceptance of benefits under them.
As private respondent pointed out in his Memorandum, oral testimony on the reaffirmation of the
counter-offer of P5.5 million is a plenty — and the silence of petitioners all throughout the
presentation makes the evidence binding on them thus;
A Yes, sir, I think it was September 28, 1987 and I was again present because Atty.
Demetria told me to accompany him we were able to meet Luis Co at the Bank.
xxx xxx xxx
Q Now, what transpired during this meeting with Luis Co of the Producers Bank?
A Atty. Demetria asked Mr. Luis Co whether the price could be reduced, sir.
Q What price?
A The 5.5 million pesos and Mr. Luis Co said that the amount cited by Mr. Mercurio
Rivera is the final price and that is the price they intends (sic) to have, sir.
Q What do you mean?.
A That is the amount they want, sir.
Q What is the reaction of the plaintiff Demetria to Luis Co's statement (sic) that the
defendant Rivera's counter-offer of 5.5 million was the defendant's bank (sic) final offer?
A He said in a day or two, he will make final acceptance, sir.
Q What is the response of Mr. Luis Co?.
A He said he will wait for the position of Atty. Demetria, sir.
[Direct testimony of Atty. Jose Fajardo, TSN, January 16, 1990, at pp. 18-21.]
Q What transpired during that meeting between you and Mr. Luis Co of the defendant
Bank?
A We went straight to the point because he being a busy person, I told him if the amount
of P5.5 million could still be reduced and he said that was already passed upon by the
committee. What the bank expects which was contrary to what Mr. Rivera stated. And he
told me that is the final offer of the bank P5.5 million and we should indicate our position
as soon as possible.
Q What was your response to the answer of Mr. Luis Co?
A I said that we are going to give him our answer in a few days and he said that was it.
Atty. Fajardo and I and Mr. Mercurio [Rivera] was with us at the time at his office.
 Q For the record, your Honor please, will you tell this Court who was with Mr. Co in his
Office in Producers Bank Building during this meeting?
A Mr. Co himself, Mr. Rivera, Atty. Fajardo and I.
Q By Mr. Co you are referring to?
A Mr. Luis Co.
Q After this meeting with Mr. Luis Co, did you and your partner accede on (sic) the
counter offer by the bank?
A Yes, sir, we did.? Two days thereafter we sent our acceptance to the bank which offer
we accepted, the offer of the bank which is P5.5 million.
[Direct testimony of Atty. Demetria, TSN, 26 April 1990, at pp. 34-36.]
Q According to Atty. Demetrio Demetria, the amount of P5.5 million was reached by the
Committee and it is not within his power to reduce this amount. What can you say to that
statement that the amount of P5.5 million was reached by the Committee?
A It was not discussed by the Committee but it was discussed initially by Luis Co and the
group of Atty. Demetrio Demetria and Atty. Pajardo (sic) in that September 28, 1987
meeting, sir.
[Direct testimony of Mercurio Rivera, TSN, 30 July 1990, pp. 14-15.]
The Fourth Issue: May the Conservator Revoke
the Perfected and Enforceable Contract.
It is not disputed that the petitioner Bank was under a conservator placed by the Central Bank of
the Philippines during the time that the negotiation and perfection of the contract of sale took
place. Petitioners energetically contended that the conservator has the power to revoke or
overrule actions of the management or the board of directors of a bank, under Section 28-A of
Republic Act No. 265 (otherwise known as the Central Bank Act) as follows:
Whenever, on the basis of a report submitted by the appropriate supervising or examining
department, the Monetary Board finds that a bank or a non-bank financial intermediary
performing quasi-banking functions is in a state of continuing inability or unwillingness
to maintain a state of liquidity deemed adequate to protect the interest of depositors and
creditors, the Monetary Board may appoint a conservator to take charge of the assets,
liabilities, and the management of that institution, collect all monies and debts due said
institution and exercise all powers necessary to preserve the assets of the institution,
reorganize the management thereof, and restore its viability. He shall have the power to
overrule or revoke the actions of the previous management and board of directors of the
bank or non-bank financial intermediary performing quasi-banking functions, any
provision of law to the contrary notwithstanding, and such other powers as the Monetary
Board shall deem necessary.
In the first place, this issue of the Conservator's alleged authority to revoke or repudiate the
perfected contract of sale was raised for the first time in this Petition — as this was not litigated
in the trial court or Court of Appeals. As already stated earlier, issues not raised and/or ventilated
in the trial court, let alone in the Court of Appeals, "cannot be raised for the first time on appeal
as it would be offensive to the basic rules of fair play, justice and due process."43
In the second place, there is absolutely no evidence that the Conservator, at the time the contract
was perfected, actually repudiated or overruled said contract of sale. The Bank's acting
conservator at the time, Rodolfo Romey, never objected to the sale of the property to Demetria
and Janolo. What petitioners are really referring to is the letter of Conservator Encarnacion, who
took over from Romey after the sale was perfected on September 30, 1987 (Annex V, petition)
which unilaterally repudiated — not the contract — but the authority of Rivera to make a binding
offer — and which unarguably came months after the perfection of the contract. Said letter dated
May 12, 1988 is reproduced hereunder:

May 12, 1988

Atty. Noe C. Zarate

Zarate Carandang Perlas & Ass.
Suite 323 Rufino Building
Ayala Avenue, Makati, Metro-Manila
Dear Atty. Zarate:
This pertains to your letter dated May 5, 1988 on behalf of Attys. Janolo and Demetria
regarding the six (6) parcels of land located at Sta. Rosa, Laguna.
We deny that Producers Bank has ever made a legal counter-offer to any of your clients
nor perfected a "contract to sell and buy" with any of them for the following reasons.
In the "Inter-Office Memorandum" dated April 25, 1986 addressed to and approved by
former Acting Conservator Mr. Andres I. Rustia, Producers Bank Senior Manager
Perfecto M. Pascua detailed the functions of Property Management Department (PMD)
staff and officers (Annex A.), you will immediately read that Manager Mr. Mercurio
Rivera or any of his subordinates has no authority, power or right to make any alleged
counter-offer. In short, your lawyer-clients did not deal with the authorized officers of the
bank.
Moreover, under Sec. 23 and 36 of the Corporation Code of the Philippines (Bates
Pambansa Blg. 68.) and Sec. 28-A of the Central Bank Act (Rep. Act No. 265, as
amended), only the Board of Directors/Conservator may authorize the sale of any
property of the corportion/bank..
Our records do not show that Mr. Rivera was authorized by the old board or by any of the
bank conservators (starting January, 1984) to sell the aforesaid property to any of your
clients. Apparently, what took place were just preliminary discussions/consultations
between him and your clients, which everyone knows cannot bind the Bank's Board or
Conservator.
We are, therefore, constrained to refuse any tender of payment by your clients, as the
same is patently violative of corporate and banking laws. We believe that this is more
than sufficient legal justification for refusing said alleged tender.
Rest assured that we have nothing personal against your clients. All our acts are official,
legal and in accordance with law. We also have no personal interest in any of the
properties of the Bank.
Please be advised accordingly.
Very truly yours,
 (Sgd.) Leonida T. Encarnacion
LEONIDA T. EDCARNACION
Acting Conservator
In the third place, while admittedly, the Central Bank law gives vast and far-reaching powers to
the conservator of a bank, it must be pointed out that such powers must be related to the
"(preservation of) the assets of the bank, (the reorganization of) the management thereof and (the
restoration of) its viability." Such powers, enormous and extensive as they are, cannot extend to
the post-facto repudiation of perfected transactions, otherwise they would infringe against the
non-impairment clause of the Constitution 44. If the legislature itself cannot revoke an existing
valid contract, how can it delegate such non-existent powers to the conservator under Section 28-
A of said law?
Obviously, therefore, Section 28-A merely gives the conservator power to revoke contracts that
are, under existing law, deemed to be defective — i.e., void, voidable, unenforceable or
rescissible. Hence, the conservator merely takes the place of a bank's board of directors. What
the said board cannot do — such as repudiating a contract validly entered into under the doctrine
of implied authority — the conservator cannot do either. Ineluctably, his power is not unilateral
and he cannot simply repudiate valid obligations of the Bank. His authority would be only to
bring court actions to assail such contracts — as he has already done so in the instant case. A
contrary understanding of the law would simply not be permitted by the Constitution. Neither by
common sense. To rule otherwise would be to enable a failing bank to become solvent, at the
expense of third parties, by simply getting the conservator to unilaterally revoke all previous
dealings which had one way or another or come to be considered unfavorable to the Bank,
yielding nothing to perfected contractual rights nor vested interests of the third parties who had
dealt with the Bank.
The Fifth Issue: Were There Reversible Errors of Facts?
Basic is the doctrine that in petitions for review under Rule 45 of the Rules of Court, findings of
fact by the Court of Appeals are not reviewable by the Supreme Court. In Andres vs.
Manufacturers Hanover & Trust Corporation, 45, we held:
. . . The rule regarding questions of fact being raised with this Court in a petition for
certiorari under Rule 45 of the Revised Rules of Court has been stated in Remalante vs.
Tibe, G.R. No. 59514, February 25, 1988, 158 SCRA 138, thus:
The rule in this jurisdiction is that only questions of law may be raised in a petition for
certiorari under Rule 45 of the Revised Rules of Court. "The jurisdiction of the Supreme
Court in cases brought to it from the Court of Appeals is limited to reviewing and
revising the errors of law imputed to it, its findings of the fact being conclusive " [Chan
vs. Court of Appeals, G.R. No. L-27488, June 30, 1970, 33 SCRA 737, reiterating a long
line of decisions]. This Court has emphatically declared that "it is not the function of the
Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being
limited to reviewing errors of law that might have been committed by the lower court"
(Tiongco v. De la Merced, G. R. No. L-24426, July 25, 1974, 58 SCRA 89; Corona vs.
Court of Appeals, G.R. No. L-62482, April 28, 1983, 121 SCRA 865; Baniqued vs. Court
of Appeals, G. R. No. L-47531, February 20, 1984, 127 SCRA 596). "Barring, therefore,
a showing that the findings complained of are totally devoid of support in the record, or
that they are so glaringly erroneous as to constitute serious abuse of discretion, such
findings must stand, for this Court is not expected or required to examine or contrast the
 oral and documentary evidence submitted by the parties" [Santa Ana, Jr. vs. Hernandez,
G. R. No. L-16394, December 17, 1966, 18 SCRA 973] [at pp. 144-145.]
Likewise, in Bernardo vs. Court of Appeals 46, we held:
The resolution of this petition invites us to closely scrutinize the facts of the case, relating
to the sufficiency of evidence and the credibility of witnesses presented. This Court so
held that it is not the function of the Supreme Court to analyze or weigh such evidence all
over again. The Supreme Court's jurisdiction is limited to reviewing errors of law that
may have been committed by the lower court. The Supreme Court is not a trier of facts. . .
.
As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goldrock Construction
and Development Corp. 47:
The Court has consistently held that the factual findings of the trial court, as well as the
Court of Appeals, are final and conclusive and may not be reviewed on appeal. Among
the exceptional circumstances where a reassessment of facts found by the lower courts is
allowed are when the conclusion is a finding grounded entirely on speculation, surmises
or conjectures; when the inference made is manifestly absurd, mistaken or impossible;
when there is grave abuse of discretion in the appreciation of facts; when the judgment is
premised on a misapprehension of facts; when the findings went beyond the issues of the
case and the same are contrary to the admissions of both appellant and appellee. After a
careful study of the case at bench, we find none of the above grounds present to justify
the re-evaluation of the findings of fact made by the courts below.
In the same vein, the ruling of this Court in the recent case of South Sea Surety and Insurance
Company Inc. vs. Hon. Court of Appeals, et al. 48 is equally applicable to the present case:
We see no valid reason to discard the factual conclusions of the appellate court, . . . (I)t is
not the function of this Court to assess and evaluate all over again the evidence,
testimonial and documentary, adduced by the parties, particularly where, such as here, the
findings of both the trial court and the appellate court on the matter coincide. (emphasis
supplied)
Petitioners, however, assailed the respondent Court's Decision as "fraught with findings and
conclusions which were not only contrary to the evidence on record but have no bases at all,"
specifically the findings that (1) the "Bank's counter-offer price of P5.5 million had been
determined by the past due committee and approved by conservator Romey, after Rivera
presented the same for discussion" and (2) "the meeting with Co was not to scale down the price
and start negotiations anew, but a meeting on the already determined price of P5.5 million"
Hence, citing Philippine National Bank vs. Court of Appeals 49, petitioners are asking us to
review and reverse such factual findings.
The first point was clearly passed upon by the Court of Appeals 50, thus:
There can be no other logical conclusion than that when, on September 1, 1987, Rivera
informed plaintiffs by letter that "the bank's counter-offer is at P5.5 Million for more than
101 hectares on lot basis, "such counter-offer price had been determined by the Past Due
Committee and approved by the Conservator after Rivera had duly presented plaintiffs'
offer for discussion by the Committee . . . Tersely put, under the established fact, the
price of P5.5 Million was, as clearly worded in Rivera's letter (Exh. "E"), the official and
definitive price at which the bank was selling the property. (p. 11, CA Decision)
 xxx xxx xxx
. . . The argument deserves scant consideration. As pointed out by plaintiff, during the
meeting of September 28, 1987 between the plaintiffs, Rivera and Luis Co, the senior
vice-president of the bank, where the topic was the possible lowering of the price, the
bank official refused it and confirmed that the P5.5 Million price had been passed upon
by the Committee and could no longer be lowered (TSN of April 27, 1990, pp. 34-35) (p.
15, CA Decision).
The respondent Court did not believe the evidence of the petitioners on this point, characterizing
it as "not credible" and "at best equivocal and considering the gratuitous and self-serving
character of these declarations, the bank's submissions on this point do not inspire belief."
To become credible and unequivocal, petitioners should have presented then Conservator
Rodolfo Romey to testify on their behalf, as he would have been in the best position to establish
their thesis. Under the rules on evidence 51, such suppression gives rise to the presumption that
his testimony would have been adverse, if produced.
The second point was squarely raised in the Court of Appeals, but petitioners' evidence was
deemed insufficient by both the trial court and the respondent Court, and instead, it was
respondent's submissions that were believed and became bases of the conclusions arrived at.
In fine, it is quite evident that the legal conclusions arrived at from the findings of fact by the
lower courts are valid and correct. But the petitioners are now asking this Court to disturb these
findings to fit the conclusion they are espousing, This we cannot do.
To be sure, there are settled exceptions where the Supreme Court may disregard findings of fact
by the Court of Appeals 52. We have studied both the records and the CA Decision and we find
no such exceptions in this case. On the contrary, the findings of the said Court are supported by a
preponderance of competent and credible evidence. The inferences and conclusions are
seasonably based on evidence duly identified in the Decision. Indeed, the appellate court
patiently traversed and dissected the issues presented before it, lending credibility and
dependability to its findings. The best that can be said in favor of petitioners on this point is that
the factual findings of respondent Court did not correspond to petitioners' claims, but were closer
to the evidence as presented in the trial court by private respondent. But this alone is no reason to
reverse or ignore such factual findings, particularly where, as in this case, the trial court and the
appellate court were in common agreement thereon. Indeed, conclusions of fact of a trial judge
— as affirmed by the Court of Appeals — are conclusive upon this Court, absent any serious
abuse or evident lack of basis or capriciousness of any kind, because the trial court is in a better
position to observe the demeanor of the witnesses and their courtroom manner as well as to
examine the real evidence presented.
Epilogue.
In summary, there are two procedural issues involved forum-shopping and the raising of issues
for the first time on appeal [viz., the extinguishment of the Bank's offer of P5.5 million and the
conservator's powers to repudiate contracts entered into by the Bank's officers] — which per se
could justify the dismissal of the present case. We did not limit ourselves thereto, but delved as
well into the substantive issues — the perfection of the contract of sale and its enforceability,
which required the determination of questions of fact. While the Supreme Court is not a trier of
facts and as a rule we are not required to look into the factual bases of respondent Court's
decisions and resolutions, we did so just the same, if only to find out whether there is reason to
disturb any of its factual findings, for we are only too aware of the depth, magnitude and vigor
by which the parties through their respective eloquent counsel, argued their positions before this
Court.
We are not unmindful of the tenacious plea that the petitioner Bank is operating abnormally
under a government-appointed conservator and "there is need to rehabilitate the Bank in order to
get it back on its feet . . . as many people depend on (it) for investments, deposits and well as
employment. As of June 1987, the Bank's overdraft with the Central Bank had already reached
P1.023 billion . . . and there were (other) offers to buy the subject properties for a substantial
amount of money." 53
While we do not deny our sympathy for this distressed bank, at the same time, the Court cannot
emotionally close its eyes to overriding considerations of substantive and procedural law, like
respect for perfected contracts, non-impairment of obligations and sanctions against forum-
shopping, which must be upheld under the rule of law and blind justice.
This Court cannot just gloss over private respondent's submission that, while the subject
properties may currently command a much higher price, it is equally true that at the time of the
transaction in 1987, the price agreed upon of P5.5 million was reasonable, considering that the
Bank acquired these properties at a foreclosure sale for no more than P3.5 million 54. That the
Bank procrastinated and refused to honor its commitment to sell cannot now be used by it to
promote its own advantage, to enable it to escape its binding obligation and to reap the benefits
of the increase in land values. To rule in favor of the Bank simply because the property in
question has algebraically accelerated in price during the long period of litigation is to reward
lawlessness and delays in the fulfillment of binding contracts. Certainly, the Court cannot stamp
its imprimatur on such outrageous proposition.
WHEREFORE, finding no reversible error in the questioned Decision and Resolution, the Court
hereby DENIES the petition. The assailed Decision is AFFIRMED. Moreover, petitioner Bank is
REPRIMANDED for engaging in forum-shopping and WARNED that a repetition of the same
or similar acts will be dealt with more severely. Costs against petitioners.
SO ORDERED.
G.R. No. 90083 October 4, 1990
KHALYXTO PEREZ MAGLASANG, accused-petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Presiding Judge ERNESTO B. TEMPLADO (San
Carlos City Court), Negros Occidental, respondents.
Marceliano L. Castellano for petitioner.
RESOLUTION
PER CURIAM:
On June 22, 1989, a petition for certiorari 1 entitled "Khalyxto Perez Maglasang vs.
People of the Philippines, Presiding Judge, Ernesto B. Templado (San Carlos City
Court) Negros Occidental," was filed by registered mail with the Court. Due to non-
compliance with the requirements of Circular No. 1-88 of the Court, specifically the non-
payment of P316.50 for the legal fees and the non-attachment of the duplicate originals
or duly certified true copies of the questioned decision and orders of the respondent
judge denying the motion for reconsideration, the Court dismissed the petition on July
26, 1989. 2
On September 9, 1989, Atty. Marceliano L. Castellano, as counsel of the petitioner,
moved for a reconsideration of the resolution dismissing the petition. 3 This time, the
amount of P316.50 was remitted and the Court was furnished with a duplicate copy of
the respondent judge's decision, and also the IBP O.R. No. and the date of the payment
of his membership dues. The motion for reconsideration did not contain the duplicate
original or certified true copies of the assailed orders. Thus, in a Resolution dated
October 18, 1989, the motion for reconsideration was denied "with FINALITY." 4
Three months later, or on January 22, 1990 to be exact, the Court received from Atty.
Castellano a copy of a complaint dated December 19, 1989, filed with the Office of the
President of the Philippines whereby Khalyxto Perez Maglasang, through his lawyer,
Atty. Castellano, as complainant, accused all the five Justices of the Court's Second
Division with "biases and/or ignorance of the law or knowingly rendering unjust
judgments or resolution." 5 The complaint was signed by Atty. Castellano "for the
complainant" with the conformity of one Calixto B. Maglasang, allegedly the father of
accused-complainant Khalyxto. 6 By reason of the strong and intemperate language of
the complaint and its improper filing with the Office of the President, which, as he should
know as a lawyer, has no jurisdiction to discipline, much more, remove, Justices of the
Supreme Court, on February 7, 1990, Atty. Castellano was required to show cause why
he should not be punished for contempt or administratively dealt with for improper
conduct. 7 On March 21, 1990, Atty. Castellano filed by registered mail his "Opposition
To Cite For Contempt Or Administratively Dealt With For An Improper Conduct (sic)." 8
In his "Opposition", Atty. Castellano claimed that the complaint "was a constructive
criticism intended to correct in good faith the erroneous and very strict practices of the
Justices concerned, as Respondents (sic). 9 Atty. Castellano further disputed the
authority and jurisdiction of the Court in issuing the Resolution requiring him to show
cause inasmuch as "they are Respondents in this particular case and no longer as
Justices and as such they have no more jurisdiction to give such order." 10 Thus,
according to him, "the most they (Justices) can do by the mandate of the law and
procedure (sic) is to answer the complaint satisfactorily so that they will not be punished
in accordance with the law just like a common tao." 11
Notwithstanding his claim that the complaint was a "constructive criticism," the Court
finds the various statements made by Atty. Castellano in the complaint he lodged with
the Office of the President of the Philippines and in his "Opposition" filed with the Court
portions of which read as follows:
VI
That with all these injustices of the 2nd Division, as assigned to that most Honorable
Supreme Court, the complainant was legally constrained to file this Administrative
Complaint to our Motherly President who is firm and determined to phase-out all the
scalawags (Marcos Appointees and Loyalists) still in your administration without
bloodshed but by honest and just investigations, which the accused-complainant concurs
to such procedure and principle, or otherwise, he could have by now a rebel with the
undersigned with a cause for being maliciously deprived or unjustly denied of Equal
Justice to be heard by our Justices designated to the Highest and most Honorable Court
of the Land (Supreme Court); 12 (Emphasis ours.)
VII
That the Honorable Supreme Court as a Court has no fault at all for being Constitutionally
created, but the Justices assigned therein are fallables (sic), being bias (sic), playing
ignorance of the law and knowingly rendering unjust Resolutions the reason observed by
 the undersigned and believed by him in good faith, is that they are may be Marcos-
appointees, whose common intention is to sabotage the Aquino Administration and to rob
from innocent Filipino people the genuine Justice and Democracy, so that they will be left
in confusion and turmoil to their advantage and to the prejudice of our beloved
President's honest, firm and determined Decision to bring back the real Justice in all our
Courts, for the happiness, contentment and progress of your people and the only country
which God has given us. — PHILIPPINES. 13 (Emphasis ours.)
VIII
That all respondents know the law and the pure and simple meaning of Justice, yet they
refused to grant to the poor and innocent accused-complainant, so to save their brethren
in rank and office (Judiciary) Judge Ernesto B. Templado, . . . 14
IX
. . . If such circulars were not known to the undersigned, it's the fault of the Justices of the
Honorable Supreme Court, the dismissal of the petition was based more of money
reasons. . . . This is so for said Equal Justice is our very Breath of Life to every Filipino,
who is brave to face the malicious acts of the Justices of the Second Division, Supreme
Court. By reason of fear for the truth Respondents ignore the equal right of the poor and
innocent-accused (complainant) to be heard against the rich and high-ranking person in
our Judiciary to be heard in equal justice in our Honorable Court, for the respondents is
too expensive and can't be reached by an ordinary man for the Justices therein are
inconsiderate, extremely strict and meticulous to the common tao and hereby grossly
violate their Oath of Office and our Constitution "to give all possible help and means to
give equal Justice to any man, regardless of ranks and status in life" 15 (Emphasis ours.)
xxx xxx xxx
5. That the undersigned had instantly without delay filed a Motion for Reconsideration to
the Resolution which carries with it a final denial of his appeal by complying (sic) all the
requirements needed for a valid appeal yet the respondents denied just the same which
legally hurt the undersigned in the name of Justice, for the Respondents-Justices, were
so strict or inhumane and so inconsiderate that there despensation (sic) of genuine
justice was too far and beyond the reach of the Accused-Appellant, as a common tao, as
proved by records of both cases mentioned above. 16
xxx xxx xxx
D. That by nature a contempt order is a one sided weapon commonly abused by Judges
and Justices, against practicing lawyers, party-litigants and all Filipino people in general
for no Judges or Justices since the beginning of our Court Records were cited for
contempt by any presiding Judge. That this weapon if maliciously applied is a cruel
means to silence a righteous and innocent complainant and to favor any person with
close relation. 17
scurrilous and contumacious. His allegations that the Court in dismissing his
petition did so "to save their brethren in rank and office (Judiciary) Judge Ernesto
B. Templado," and that the dismissal was "based more for (sic) money reasons;"
and his insinuation that the Court maintains a double standard in dispensing
justice — one set for the rich and another for the poor — went beyond the
bounds of "constructive criticism." They are not relevant to the cause of his client.
On the contrary, they cast aspersion on the Court's integrity as a neutral and final
arbiter of all justiciable controversies brought before it. Atty. Castellano should
know that the Court in resolving complaints yields only to the records before it
and not to any extraneous influence as he disparagingly intimates.
It bears stress that the petition was dismissed initially by the Court for the counsel's
failure to fully comply with the requirements laid down in Circular No. 1-88, a circular on
expeditious disposition of cases, adopted by the Court on November 8, 1988, but
effective January 1, 1989, after due publication. It is true that Atty. Castellano later filed
on behalf of his client a motion for reconsideration and remitted the necessary legal
fees, 18 furnished the Court with a duplicate original copy of the assailed trial court's
decision, 19 and indicated his IBP O.R. No. and the date he paid his dues. 20 But he still
fell short in complying fully with the requirements of Circular No. 1-88. He failed to
furnish the Court with duplicate original or duty certified true copies of the other
questioned orders issued by the respondent trial court judge. At any rate, the
explanation given by Atty. Castellano did not render his earlier negligence excusable.
Thus, as indicated in our Resolution dated October 18, 1989 which denied with finality
his motion for reconsideration, "no valid or compelling reason (having been) adduced to
warrant the reconsideration sought." Precisely, under paragraph 5 of Circular No. 1-88 it
is provided that "(S)ubsequent compliance with the above requirements will not warrant
reconsideration of the order of dismissal unless it be shown that such non-compliance
was due to compelling reasons."
It is clear that the case was lost not by the alleged injustices Atty. Castellano
irresponsibly ascribed to the members of the Court's Second Division, but simply
because of his inexcusable negligence and incompetence. Atty. Castellano, however,
seeks to pass on the blame for his deficiencies to the Court, in the hope of salvaging his
reputation before his client. Unfortunately, the means by which Atty. Castellano hoped
to pass the buck so to speak, are grossly improper. As an officer of the Court, he should
have known better than to smear the honor and integrity of the Court just to keep the
confidence of his client. Time and again we have emphasized that a "lawyer's duty is
not to his client but to the administration of justice; to that end, his client's success is
wholly subordinate; and his conduct ought to and must always be scrupulously
observant of law and ethics." 21 Thus, "while a lawyer must advocate his client's cause in
utmost earnest and with the maximum skill he can marshal, he is not at liberty to resort
to arrogance, intimidation, and innuendo." 22
To be sure, the Court does not pretend to be immune from criticisms. After all, it is
through the criticism of its actions that the Court, composed of fallible mortals, hopes to
correct whatever mistake it may have unwittingly committed. But then again, "[i]t is the
cardinal condition of all such criticism that it shall be bona fide and shall not spill over
the walls of decency and propriety. A wide chasm exists between fair criticism, on the
one hand, and abuse and slander of courts and the judges thereof, on the other.
Intemperate and unfair criticism is a gross violation of the duty of respect to courts." 23 In
this regard, it is precisely provided under Canon 11 of the Code of Professional
Responsibility that:
CANON 11-A LAWYER SHALL OBSERVE AND MAINTAIN THE RESPECT DUE TO
THE COURTS AND TO JUDICIAL OFFICERS AND SHOULD INSIST ON SIMILAR
CONDUCT BY OTHERS.
xxx xxx xxx
RULE 11.03 — A lawyer shall abstain from scandalous, offensive or menancing language
or behavior before the courts.
RULE 11.04 — A lawyer should not attribute to a judge motives not supported by the
record or have materiality to the case.
xxx xxx xxx
We further note that in filing the "complaint" against the justices of the Court's Second
Division, even the most basic tenet of our government system — the separation of
powers between the judiciary, the executive, and the legislative branches has — been
lost on Atty. Castellano. We therefore take this occasion to once again remind all and
sundry that "the Supreme Court is supreme — the third great department of government
entrusted exclusively with the judicial power to adjudicate with finality all justiciable
disputes, public and private. No other department or agency may pass upon its
judgments or declare them 'unjust.'" 24 Consequently, and owing to the foregoing, not
even the President of the Philippines as Chief Executive may pass judgment on any of
the Court's acts.
Finally, Atty. Castellano's assertion that the complaint "was a constructive criticism
intended to correct in good faith the erroneous and very strict practices of the Justices,
concerned as Respondents (sic)" is but a last minute effort to sanitize his clearly
unfounded and irresponsible accusation. The arrogance displayed by counsel in
insisting that the Court has no jurisdiction to question his act of having complained
before the Office of the President, and in claiming that a contempt order is used as a
weapon by judges and justices against practicing lawyers, however, reveals all too
plainly that he was not honestly motivated in his criticism. Rather, Atty. Castellano's
complaint is a vilification of the honor and integrity of the Justices of the Second Division
of the Court and an impeachment of their capacity to render justice according to law.
WHEREFORE, Atty. Marceliano L. Castellano is found guilty of CONTEMPT OF
COURT and IMPROPER CONDUCT as a member of the Bar and an officer of the
Court, and is hereby ordered to PAY within fifteen (15) days from and after the finality of
this Resolution a fine of One Thousand (P1,000.00) Pesos, or SUFFER ten (10) days
imprisonment in the municipal jail of Calatrava, Negros Occidental in case he fails to
pay the fine seasonably, and SUSPENDED from the practice of law throughout the
Philippines for six (6) months as soon as this Resolution becomes final, with a
WARNING that a repetition of any misconduct on his part will be dealt with more
severely. Let notice of this Resolution be entered in Atty. Castellano's record, and be
served on the Integrated Bar of the Philippines, the Court of Appeals, and the Executive
Judges of the Regional Trial Courts and other Courts of the country, for their information
and guidance.
SO ORDERED.
[G.R. No. 159486-88. November 25, 2003]
PRESIDENT JOSEPH EJERCITO ESTRADA, Petitioner, vs. THE HONORABLE
SANDIGANBAYAN [SPECIAL DIVISION], HON. MINITA CHICO-NAZARIO, HON.
EDILBERTO SANDOVAL, HON. TERESITA LEONARDO-DE CASTRO, and THE
PEOPLE OF THE PHILIPPINES, Respondents.
RESOLUTION
PER CURIAM:chanroblesvirtuallawlibrary
On 23 September 2003, this Court issued its resolution in the above-numbered case; it
read:chanroblesvirtuallawlibrary
The case for consideration has been brought to this Court via a Petition for Certiorari under Rule
65 of the Rules of Court filed by Joseph Ejercito Estrada, acting through his counsel Attorney
Alan F. Paguia, against the Sandiganbayan, et al. The Petition prays chanroblesvirtuallawlibrary
 1. That Chief Justice Davide and the rest of the members of the Honorable Court
disqualify themselves from hearing and deciding this petition;chanroblesvirtuallawlibrary
2. That the assailed resolutions of the Sandiganbayan be vacated and set aside;
andchanroblesvirtuallawlibrary
3. That Criminal Cases No. 26558, No. 26565 and No. 26905 pending before the
Sandiganbayan be dismissed for lack of jurisdiction.chanroblesvirtuallawlibrary
Attorney Alan F. Paguia, speaking for petitioner, asserts that the inhibition of the members of the
Supreme Court from hearing the petition is called for under Rule 5.10 of the Code of Judicial
Conduct prohibiting justices or judges from participating in any partisan political activity which
proscription, according to him, the justices have violated by attending the EDSA 2 Rally and by
authorizing the assumption of Vice-President Gloria Macapagal Arroyo to the Presidency in
violation of the 1987 Constitution. Petitioner contends that the justices have thereby prejudged a
case that would assail the legality of the act taken by President Arroyo. The subsequent decision
of the Court in Estrada v. Arroyo (353 SCRA 452 and 356 SCRA 108) is, petitioner states, a
patent mockery of justice and due process.chanroblesvirtuallawlibrary
Attorney Paguia first made his appearance for petitioner when he filed an Omnibus Motion on 19
May 2003, before the Sandiganbayan, asking that the appointment of counsels de officio (sic) be
declared functus officio and that, being the now counsel de parte, he be notified of all subsequent
proceedings in Criminal Cases No. 26558, No. 26565 and No. 26905 pending therein. Finally,
Attorney Paguia asked that all the foregoing criminal cases against his client be
dismissed.chanroblesvirtuallawlibrary
During the hearing of the Omnibus Motion on 30 May 2003, petitioner presented to the court
several portions of the book, entitled Reforming the Judiciary, written by Justice Artemio
Panganiban, to be part of the evidence for the defense. On 9 June 2003, petitioner filed a motion
pleading, among other things, that chanroblesvirtuallawlibrary
a) x x x President Estrada be granted the opportunity to prove the truth of the
statements contained in Justice Artemio Panganibans book, REFORMING
THE JUDICIARY, in relation to the prejudgment committed by the
Supreme Court justices against President Estrada in the subject case/s of
Estrada v. Arroyo, 353 SCRA 452 and 356 SCRA 108;
and,chanroblesvirtuallawlibrary
b) A subpoena ad testificandum and duces tecum be issued to Justice Artemio
Panganiban, Justice Antonio Carpio, Justice Renato Corona, Secretary
Angelo Reyes of the Department of National Defense, Vice President
Gloria Macapagal-Arroyo, Senator Aquilino Pimentel, Jr., and Chief
Justice Hilario Davide, Jr. for them to testify and bring whatever
supporting documents they may have in relation to their direct and indirect
participation in the proclamation of Vice President Gloria Macapagal
Arroyo on January 20, 2001, as cited in the book of Justice Panganiban,
including the material events that led to that proclamation and the ruling/s
in the Estrada vs. Arroyo, supra. (Rollo, pp. 6-7.)chanroblesvirtuallawlibrary
The truth referred to in paragraph a) of the relief sought in the motion of petitioner pertains to
what he claims should have been included in the resolution of the Sandiganbayan;
viz:chanroblesvirtuallawlibrary
The request of the movant is simply for the Court to include in its Joint Resolution the TRUTH
of the acts of Chief Justice Davide, et al., last January 20, 2001 in:
a) going to EDSA 2;
b) authorizing the proclamation of Vice-President Arroyo as President on the
ground of permanent disability even without proof of compliance with the
corresponding constitutional conditions, e.g., written declaration by either
the President or majority of his cabinet; and
c) actually proclaiming Vice-President Arroyo on that same ground of
permanent disability.chanroblesvirtuallawlibrary
It is patently unreasonable for the Court to refuse to include these material facts which are
obviously undeniable. Besides, it is the only defense of President Estrada. (Petition, Rollo, pp.
13-14.)chanroblesvirtuallawlibrary
On 2 July 2003, the Sandiganbayan issued an order denying the foregoing motion, as well as the
motion to dismiss, filed by petitioner. Forthwith, petitioner filed a Mosyong
Pangrekonsiderasyon of the foregoing order. According to Attorney Paguia, during the hearing
of his Mosyong Pangrekonsiderasyon on 11 June 2003, the three justices of the Special Division
of the Sandiganbayan made manifest their bias and partiality against his client. Thus, he averred,
Presiding Justice Minita V. Chico-Nazario supposedly employed foul and disrespectful language
when she blurted out, Magmumukha naman kaming gago, (Rollo, p. 13.) and Justice Teresita
Leonardo-De Castro characterized the motion as insignificant even before the prosecution could
file its comments or opposition thereto, (Rollo, p. 12.) remarking in open court that to grant
Estradas motion would result in chaos and disorder. (Ibid.) Prompted by the alleged bias and
partial attitude of the Sandiganbayan justices, Attorney Paguia filed, on 14 July 2003, a motion
for their disqualification. On 31 July 2003, petitioner received the two assailed resolutions, i.e.,
the resolution (Promulgated on 30 July 2003.) of 28 July 2003, denying petitioners motion for
reconsideration of 6 July 2003; viz:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, accused-movant Joseph Ejercito Estradas Mosyong
Pangrekonsiderasyon (Na tumutukoy sa Joint Resolution ng Hulyo 2, 2003) dated July 6, 2003 is
DENIED for lack of merit. (Rollo, p. 37.)chanroblesvirtuallawlibrary
and the resolution (Promulgated on 30 July 2003.) of 25 July 2003, denying petitioners motion
for disqualification of 14 July 2003; viz:chanroblesvirtuallawlibrary
WHEREFORE, prescinding from all the foregoing, the Court, for want of merit, hereby DENIES
the Motion for Disqualification. (Rollo, p. 48.)chanroblesvirtuallawlibrary
The instant petition assailing the foregoing orders must be DISMISSED for gross insufficiency
in substance and for utter lack of merit. The Sandiganbayan committed no grave abuse of
discretion, an indispensable requirement to warrant a recourse to the extraordinary relief of
petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure. On the one hand,
petitioner would disclaim the authority and jurisdiction of the members of this tribunal and, on
the other hand, he would elevate the petition now before it to challenge the two resolutions of the
Sandiganbayan. He denounces the decision as being a patent mockery of justice and due process.
Attorney Pagula went on to state that-chanroblesvirtuallawlibrary
The act of the public officer, if LAWFUL, is the act of the public office. But the act of the public
officer, if UNLAWFUL, is not the act of the public office. Consequently, the act of the justices,
if LAWFUL, is the act of the Supreme Court. But the act of the justices, if UNLAWFUL, is not
the act of the Supreme Court. It is submitted that the Decision in ESTRADA vs. ARROYO being
patently unlawful in view of Rule 5.10 of the CODE OF JUDICIAL CONDUCT, is not the act
of the Supreme Court but is merely the wrong or trespass of those individual Justices who falsely
spoke and acted in the name of the Supreme Court. (Urbano vs. Chavez, 183 SCRA [347]).
Furthermore, it would seem absurd to allow the Justices to use the name of the Supreme Court as
a shield for their UNLAWFUL act. (Petition, Rollo, p. 11.)chanroblesvirtuallawlibrary
Criticism or comment made in good faith on the correctness or wrongness, soundness or
unsoundness, of a decision of the Court would be welcome for, if well-founded, such reaction
can enlighten the court and contribute to the correction of an error if committed. (In Re Sotto, 82
Phil 595.)chanroblesvirtuallawlibrary
The ruling in Estrada v. Arroyo, being a final judgment, has long put to end any question
pertaining to the legality of the ascension of Arroyo into the presidency. By reviving the issue on
the validity of the assumption of Mme. Gloria Macapagal-Arroyo to the presidency, Attorney
Paguia is vainly seeking to breathe life into the carcass of a long dead issue.chanroblesvirtuallawlibrary
Attorney Paguia has not limited his discussions to the merits of his clients case within the
judicial forum; indeed, he has repeated his assault on the Court in both broadcast and print
media. Rule 13.02 of the Code of Professional Responsibility prohibits a member of the bar from
making such public statements on any pending case tending to arouse public opinion for or
against a party. By his acts, Attorney Paguia may have stoked the fires of public dissension and
posed a potentially dangerous threat to the administration of justice.chanroblesvirtuallawlibrary
It is not the first time that Attorney Paguia has exhibited similar conduct towards the Supreme
Court. In a letter, dated 30 June 2003, addressed to Chief Justice Hilario G. Davide, Jr., and
Associate Justice Artemio V. Panganiban, he has demanded, in a clearly disguised form of forum
shopping, for several advisory opinions on matters pending before the Sandiganbayan. In a
resolution, dated 08 July 2003, this Court has strongly warned Attorney Alan Paguia, on pain of
disciplinary sanction, to desist from further making, directly or indirectly, similar submissions to
this Court or to its Members. But, unmindful of the well-meant admonition to him by the Court,
Attorney Paguia appears to persist on end.chanroblesvirtuallawlibrary
WHEREFORE, the instant petition for certiorari is DISMISSED, and the Court hereby orders
Attorney Alan Paguia, counsel for petitioner Joseph Ejercito Estrada, to SHOW CAUSE, within
ten days from notice hereof, why he should not be sanctioned for conduct unbecoming a lawyer
and an officer of the Court.chanroblesvirtuallawlibrary
On 10 October 2003, Atty. Paguia submitted his compliance with the show-cause order. In a
three-page pleading, Atty. Paguia, in an obstinate display of defiance, repeated his earlier claim
of political partisanship against the members of the Court.chanroblesvirtuallawlibrary
Canon 5.10 of the Code of Judicial Conduct, which Atty. Paguia has tirelessly quoted to give
some semblance of validity for his groundless attack on the Court and its members, provides
-chanroblesvirtuallawlibrary
Rule 5.10. A judge is entitled to entertain personal views on political questions. But to avoid
suspicion of political partisanship, a judge shall not make political speeches, contribute to party
funds, publicly endorse candidates for political office or participate in other partisan political
activities.chanroblesvirtuallawlibrary
Section 79(b) of the Omnibus Election Code defines the term partisan political activities; the law
states:chanroblesvirtuallawlibrary
The term election campaign or partisan political activity refers to an act designed to promote
the election or defeat of a particular candidate or candidates to a public office which shall
include:chanroblesvirtuallawlibrary
(1) Forming organizations, associations, clubs, committees or other groups of persons for the
purpose of soliciting votes and/or undertaking any campaign for or against a
candidate;chanroblesvirtuallawlibrary
(2) Holding political caucuses, conferences, meetings, rallies, parades, or other similar
assemblies, for the purpose of soliciting votes and/or undertaking any campaign or propaganda
for or against a candidate.chanroblesvirtuallawlibrary
(3) Making speeches, announcements or commentaries, or holding interviews for or against the
election of any candidate for public office;chanroblesvirtuallawlibrary
(4) Publishing or distributing campaign literature or materials designed to support or oppose the
election of any candidate; orchanroblesvirtuallawlibrary
(5) Directly or indirectly soliciting votes, pledges or support for or against a
candidate.chanroblesvirtuallawlibrary
It should be clear that the phrase partisan political activities, in its statutory context, relates to
acts designed to cause the success or the defeat of a particular candidate or candidates who have
filed certificates of candidacy to a public office in an election. The taking of an oath of office by
any incoming President of the Republic before the Chief Justice of the Philippines is a traditional
official function of the Highest Magistrate. The assailed presence of other justices of the Court at
such an event could be no different from their appearance in such other official functions as
attending the Annual State of the Nation Address by the President of the Philippines before the
Legislative Department.chanroblesvirtuallawlibrary
The Supreme Court does not claim infallibility; it will not denounce criticism made by anyone
against the Court for, if well-founded, can truly have constructive effects in the task of the Court,
but it will not countenance any wrongdoing nor allow the erosion of our peoples faith in the
judicial system, let alone, by those who have been privileged by it to practice law in the
Philippines.chanroblesvirtuallawlibrary
Canon 11 of the Code of Professional Responsibility mandates that the lawyer should observe
and maintain the respect due to the courts and judicial officers and, indeed, should insist on
similar conduct by others. In liberally imputing sinister and devious motives and questioning the
impartiality, integrity, and authority of the members of the Court, Atty. Paguia has only
succeeded in seeking to impede, obstruct and pervert the dispensation of justice.chanroblesvirtuallawlibrary
The attention of Atty. Paguia has also been called to the mandate of Rule 13.02 of the Code
of Professional Responsibility prohibiting a member of the bar from making such public
statements on a case that may tend to arouse public opinion for or against a party.
Regrettably, Atty. Paguia has persisted in ignoring the Courts well-meant
admonition.chanroblesvirtuallawlibrary
On the 7th September 2003 issue of the Daily Tribune, Atty. Paguia wrote to say
-chanroblesvirtuallawlibrary
What is the legal effect of that violation of President Estradas right to due process of law?
It renders the decision in Estrada vs. Arroyo unconstitutional and void. The rudiments of
fair play were not observed. There was no fair play since it appears that when President
Estrada filed his petition, Chief Justice Davide and his fellow justices had already
 committed to the other party - GMA - with a judgment already made and waiting to be
formalized after the litigants shall have undergone the charade of a formal hearing. After
the justices had authorized the proclamation of GMA as president, can they be expected to
voluntarily admit the unconstitutionality of their own act?chanroblesvirtuallawlibrary
Unrelentingly, Atty. Paguia has continued to make public statements of like
nature.chanroblesvirtuallawlibrary
The Court has already warned Atty. Paguia, on pain of disciplinary sanction, to become mindful
of his grave responsibilities as a lawyer and as an officer of the Court. Apparently, he has chosen
not to at all take heed.chanroblesvirtuallawlibrary
WHEREFORE, Attorney Alan Paguia is hereby indefinitely suspended from the practice of
law, effective upon his receipt hereof, for conduct unbecoming a lawyer and an officer of the
Court.chanroblesvirtuallawlibrary
Let copies of this resolution be furnished the Office of the Bar Confidant, the Integrated Bar of
the Philippines and all courts of the land through the Office of the Court
Administrator.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
CBD Case No. 176 January 20, 1995
SALLY D. BONGALONTA, complainant,
vs.
ATTY. PABLITO M. CASTILLO and ALFONSO M. MARTIJA, respondents.
RESOLUTION

MELO, J.:
In a sworn letter-complaint dated February 15, 1995, addressed to the Commission on
Bar Discipline, National Grievance Investigation Office, Integrated Bar of the
Philippines, complainant Sally Bongalonta charged Pablito M. Castillo and Alfonso M.
Martija, members of the Philippine Bar, with unjust and unethical conduct, to wit:
representing conflicting interests and abetting a scheme to frustrate the execution or
satisfaction of a judgment which complainant might obtain.
The letter-complaint stated that complainant filed with the Regional Trial Court of Pasig,
Criminal Case No. 7635-55, for estafa, against the Sps. Luisa and Solomer Abuel. She
also filed, a separate civil action Civil Case No. 56934, where she was able to obtain a
writ of preliminary attachment and by virtue thereof, a piece of real property situated in
Pasig, Rizal and registered in the name of the Sps. Abuel under TCT No. 38374 was
attached. Atty. Pablito Castillo was the counsel of the Sps. Abuel in the aforesaid
criminal and civil cases.
During the pendency of these cases, one Gregorio Lantin filed civil Case No. 58650 for
collection of a sum of money based on a promissory note, also with the Pasig Regional
Trial Court, against the Sps. Abuel. In the said case Gregorio Lantin was represented by
Atty. Alfonso Martija. In this case, the Sps. Abuel were declared in default for their
failure to file the necessary responsive pleading and evidence ex-parte was received
against them followed by a judgment by default rendered in favor of Gregorio Lantin. A
writ of execution was, in due time, issued and the same property previously attached by
complainant was levied upon.
It is further alleged that in all the pleadings filed in these three (3) aforementioned
cases, Atty. Pablito Castillo and Atty. Alfonso Martija placed the same address, the
same PTR and the same IBP receipt number to wit" Permanent Light Center, No. 7,
21st Avenue, Cubao, Quezon City, PTR No. 629411 dated 11-5-89 IBP No. 246722
dated 1-12-88.
Thus, complainant concluded that civil Case No. 58650 filed by Gregorio Lantin was
merely a part of the scheme of the Sps. Abuel to frustrate the satisfaction of the money
judgment which complainant might obtain in Civil Case No. 56934.
After hearing, the IBP Board of Governors issued it Resolution with the following
findings and recommendations:
Among the several documentary exhibits submitted by Bongalonta and attached to the
records is a xerox copy of TCT No. 38374, which Bongalonta and the respondents
admitted to be a faithful reproduction of the original. And it clearly appears under the
Memorandum of Encumbrances on aid TCT that the Notice of Levy in favor of
Bongalonta and her husband was registered and annotated in said title of February 7,
1989, whereas, that in favor of Gregorio Lantin, on October 18, 1989. Needless to state,
the notice of levy in favor of Bongalonta and her husband is a superior lien on the said
registered property of the Abuel spouses over that of Gregorio Lantin.
Consequently, the charge against the two respondents (i.e. representing conflicting
interests and abetting a scheme to frustrate the execution or satisfaction of a judgment
which Bongalonta and her husband might obtain against the Abuel spouses) has no leg
to stand on.
However, as to the fact that indeed the two respondents placed in their appearances and
in their pleadings the same IBP No. "246722 dated
1-12-88", respondent Atty. Pablito M. Castillo deserves to be SUSPENDED for using,
apparently thru his negligence, the IBP official receipt number of respondent Atty. Alfonso
M. Martija. According to the records of the IBP National Office, Atty. Castillo paid
P1,040.00 as his delinquent and current membership dues, on February 20, 1990, under
IBP O.R. No. 2900538, after Bongalonta filed her complaint with the IBP Committee on
Bar Discipline.
The explanation of Atty. Castillo's Cashier-Secretary by the name of Ester Fraginal who
alleged in her affidavit dated March 4, 1993, that it was all her fault in placing the IBP
official receipt number pertaining to Atty. Alfonso M. Martija in the appearance and
pleadings Atty. Castillo and in failing to pay in due time the IBP membership dues of her
employer, deserves scant consideration, for it is the bounded duty and obligation of every
lawyer to see to it that he pays his IBP membership dues on time, especially when he
practices before the courts, as required by the Supreme Court.
WHEREFORE, it is respectfully recommended that Atty. Pablito M. Castillo be
SUSPENDED from the practice of law for a period of six (6) months for using the IBP
Official Receipt No. of his co-respondent Atty. Alfonso M. Martija.
The complaint against Atty. Martija is hereby DISMISSED for lack of evidence. (pp. 2-4,
Resolution)
The Court agrees with the foregoing findings and recommendations. It is well to stress
again that the practice of law is not a right but a privilege bestowed by the State on
those who show that they possess, and continue to possess, the qualifications required
by law for the conferment of such privilege. One of these requirements is the
observance of honesty and candor. Courts are entitled to expect only complete candor
and honesty from the lawyers appearing and pleading before them. A lawyer, on the
 other hand, has the fundamental duty to satisfy that expectation. for this reason, he is
required to swear to do no falsehood, nor consent to the doing of any in court.
WHEREFORE, finding respondent Atty. Pablito M. Castillo guilty committing a
falsehood in violation of his lawyer's oath and of the Code of Professional
Responsibility, the Court Resolved to SUSPEND him from the practice of law for a
period of six (6) months, with a warning that commission of the same or similar offense
in the future will result in the imposition of a more severe penalty. A copy of the
Resolution shall be spread on the personal record of respondent in the Office of the Bar
Confidant.
SO ORDERED.
G.R. No. 133090 January 19, 2001
REXIE EFREN A. BUGARING AND ROYAL BECHTEL BUILDERS, INC., petitioners,
vs.
HON. DOLORES S. ESPAÑOL, in her capacity as Presiding Judge of the Regional Trial
Court Branch 90, Imus, Cavite, respondent.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision dated March 6, 1998 of the Court
of Appeals1 affirming the decision of the Regional Trial Court of Cavite, Branch 90, Imus,
Cavite, declaring petitioner Rexie Efren A. Bugaring guilty in direct contempt of
court.1âwphi1.nêt
The incident subject of the petition occurred during a hearing held on December 5, 1996 of Civil
Case NO. 1266-96 entitled "Royal Becthel2 Builders, Inc. vs. Spouses Luis Alvaran and Beatriz
Alvaran, et al.", for Annulment of Sale and Certificates of Title, Specific Performance and
Damages with Prayer for Preliminary Injunction and/or Temporary Restraining Order in the sala
of respondent judge Dolores S. Español of the Regional Trial Court of Cavite, Branch 90, Imus,
Cavite.
Pursuant to a motion filed by the previous counsel of Royal Bechtel Builders, Inc., the trial court
issued an order on February 27, 1996 directing the Register of Deeds of the Province of Cavite to
annotate at the back of certain certificates of title a notice of lis pendens. Before the Register of
Deeds of the Province of Cavite could comply with said order, the defendant Spouses Alvaran on
April 15, 1996, filed a motion to cancel lis pendens. On July 19, 1996, petitioner, the newly
appointed counsel of Royal Bechtel Builders, Inc., filed an opposition to the motion to cancel lis
pendens. On August 16, 1996, the motion to cancel lis pendens was granted by the court.
Petitioner filed a motion for reconsideration, which was opposed by the defendants. On
November 5, 1996, petitioner filed an Urgent Motion to Resolve, and on November 6, 1996,
filed a Rejoinder to Opposition and Motion for Contempt of Court.3
During the hearing of the motion for contempt of court held on December 5, 1996, the following
incident transpired:
ATTY. For the plaintiff, your Honor, we are ready.
BUGARING:
ATTY. Same appearance for the defendant, your Honor.
CORDERO:
ATTY. Your Honor please, we are ready with respect to the prosecution of our motion
BUGARING: for contempt, your Honor. May we know from the record if the Register of
Deeds is properly notified for today's hearing.
COURT: Will you call on the Register of Deeds.
INTERPRETER: Atty. Diosdado Concepcion, He is here, your Honor.
ATTY. We are ready, your Honor.
BUGARING:
COURT: There is a motion for contempt in connection with the order of this Court which
directed your office to register lis pendens of the complaint in connection with
this case of Royal Becthel Builder, Inc. versus spouses Luis Alvaran and
Beatriz Alvaran, et al.
ATTY. Your Honor, I just received this morning at ten o'clock [in the morning] the
CONCEPCION: subpoena.
ATTY. May we put in on record that as early as November 6, 1996, the Office of the
BUGARING: Register of Deeds was furnished with a copy of our motion, your Honor please,
and the record will bear it out. Until now they did not file any answer,
opposition or pleadings or pleadings with respect to this motion.
ATTY. Well I was not informed because I am not the Register of Deeds. I am only the
CONCEPCION: Deputy Register of Deeds and I was not informed by the receiving clerk of our
office regarding this case. As a matter of fact I was surprised when I received
this morning the subpoena, your Honor.
ATTY. Your Honor please, may we put that on record that the manifestation of the
BUGARING: respondent that he was not informed.
COURT: That is recorded. This is a Court of record and everything that you say here is
recorded.
ATTY. Yes your Honor please, we know that but we want to be specific because we
BUGARING: will be [filing] a case against this receiving clerk who did not [inform] him your
Honor please, with this manifestation of the Deputy of the Register of Deeds
that is irregularity in the performance of the official duty of the clerk not to
inform the parties concerned.
COURT: Counsel, the Court would like to find out who this fellow who is taking the
video recording at this proceedings. There is no permission from this Court that
such proceedings should be taken.
ATTY. Your Honor, my Assistant. I did not advise him to take a video he just
BUGARING: accompanied me this morning.
COURT: Right, but the video recording is prepared process and you should secure the
permission of this Court.
ATTY. Actually, I did not instruct him to take some video tape.
BUGARING:
COURT: Why would he be bringing camera if you did not give him the go signal that
shots should be done.
ATTY. This Court should not presume that, your Honor please, we just came from an
BUGARING: occasion last night and I am not yet come home, your Honor please. I could
 prove your Honor please, that the contents of that tape is other matters your
Honor please. I was just surprised why he took video tape your Honor please,
that we ask the apology of this Court if that offend this Court your Honor
please.
COURT: It is not offending because this is a public proceedings but the necessary
authority or permission should be secured.
ATTY. In fact I instructed him to go out, your Honor.
BUGARING:
COURT: After the court have noticed that he is taking a video tape.
ATTY. Yes, your Honor, in fact that is not my personal problem your Honor please,
BUGARING: that is personal to that guy your Honor please if this representation is being ….
COURT: That is very shallow, don't give that alibi.
ATTY. At any rate, your Honor please, we are going to mark our documentary
BUGARING: evidence as part of our motion for contempt, your Honor please.
COURT: What has the Register of Deeds got to say with this matter?
ATTY. Well as I have said before, I have not received any motion regarding this
CONCEPCION: contempt you are talking. I am willing now to testify.
ATTY. Your Honor I am still of the prosecution stage, it is not yet the defense. This is a
BUGARING: criminal proceedings, contempt proceedings is a criminal.
ATTY. Your Honor please, may I ask for the assistance from the Fiscal.
CONCEPCION:
COURT: If this is going to proceed, we need the presence of a Fiscal or a counsel for the
Register of Deeds.
ATTY. Can I appoint an outside lawyer not a Fiscal but a private counsel, your Honor.
CONCEPCION:
COURT: That is at your pleasure. The Court will consider that you should be amply
represented.
ATTY. As a matter of fact I have a lawyer here, Atty. Barzaga if he is willing….
CONCEPCION:
ATTY. Yes, your Honor, I will just review the records.
BARZAGA4:
ATTY. Anyway your Honor please, I will not yet present my witness but I will just
BUGARING: mark our documentary exhibits which are part of the record of the case and
thereafter your Honor please….
COURT: You wait for a minute counsel because there is a preparation being done by
newly appointed counsel of the respondent, Atty. Barzaga is considered as the
privately hired counsel of the register of deeds and the respondent of this
contempt proceedings. How much time do you need to go over the record of
this case so that we can call the other case in the meanwhile.
ATTY. Second call, your Honor.
BARZAGA:
---------------------------------------------------------------------
----------------------
COURT: Are you ready Atty. Barzaga?
ATTY. Yes, your Honor. Well actually your Honor, after reviewing the record of the
BARZAGA: case your Honor, I noticed that the motion for contempt of Court was filed on
November 6, 1966 and in paragraph 6 thereof, your Honor it is stated that, 'the
record of the case shows up to the filing of this motion, the Register as well as
the Deputy Register Diosdado Concepcion of the Office of the Register of
Deeds of the Province of Cavite, did not comply with the Court Orders dated
February 27, 1996, March 29, 1996, respectively.' However, your Honor, Atty.
Diosdado Concepcion has shown to me a letter coming from Atty. Efren A.
Bugaring dated September 18, 1996 addressed to the Register regarding this
notice of Lis Pendens pertaining to TCT Nos. T-519248, 519249 and 519250
and this letter request, your Honor for the annotation of the lis pendens clearly
shows that it has been already entered in the book of primary entry. We would
like also to invite the attention of the Hon. Court that the Motion for Contempt
of Court was filed on November 6, 1996. The letter for the annotation of the lis
pendens was made by the counsel for the plaintiff only on September 18, 1996,
your Honor. However, your Honor, as early as August 16, 1996 an Order has
already been issued by the Hon. Court reading as follows, 'Wherefore in view
of the above, the motion of the defendant is GRANTED and the Register of
Deeds of the Province of Cavite, is hereby directed to CANCEL the notice of
lis pendens annotated at the back of Certificate of Title Nos. 519248, 51949
(sic) and 51950 (sic).'
ATTY. Your Honor please, may we proceed your Honor, will first mark our
BUGARING: documentary evidence.
COURT: You wait until the Court allows you to do what you want to do, okay. The
counsel has just made manifestation, he has not prayed for anything. So let us
wait until he is finished and then wait for the direction of this Court what to do
to have an orderly proceedings in this case.
ATTY. Considering your Honor, that the issues appear to be a little bit complicated
BUGARING: your Honor, considering that the order regarding the annotation of the lis
pendens has already been revoked by the Hon. Court your Honor, we just
request that we be given a period of ten days from today your Honor, within
which to submit our formal written opposition your Honor.
COURT: Counsel, will you direct your attention to the manifestation filed earlier by Atty.
Tutaan in connection with the refusal of the Register of Deeds to annotate the
lis pendens because of certain reasons. According to the manifestation of Atty.
Tutaan and it is appearing in the earlier part of the record of this case, the
reason for that is because there was a pending subdivision plan, it is so stated. I
think it was dated March, 1996. May 1 have the record please.
ATTY. Yes, your Honor.
BARZAGA:
COURT: This Court would like to be enlightened with respect to that matter.
ATTY. Well, according to Atty. Diosdado Concepcion he could already explain this,
BUGARING: your Honor.
COURT: Have it properly addressed as part of the manifestation so that this court can be
guided accordingly. Because this Court believes that the root of the matter
started from that. After the submission of the …. What are you suppose to
submit?
ATTY. Comment your Honor, on the motion to cite Atty. Diosdado Concepcion in
BUGARING: contempt of Court.
COURT: After the submission of the Comment and furnishing a copy of the comment to
the counsel for the plaintiff, this Court is going to give the counsel for the
plaintiff an equal time within which to submit his reply.
ATTY. Your Honor please, it is the position of this representation your Honor please,
BUGARING: that we will be marking first our documentary evidence because this is set for
hearing for today, your Honor please.
COURT: If you are going to mark your evidence and they do not have their comment yet
what are we going to receive as evidence.
ATTY. If your Honor please …
BUGARING:
COURT: Will you listen to the Court and just do whatever you have to do after the
submission of the comment.
ATTY. I am listening, your Honor please, but the record will show that the motion for
BUGARING: contempt was copy furnished with the Register of Deeds and Diosdado
Concepcion.
COURT: Precisely, if you are listening then you will get what the Court would want to
do. This should be an orderly proceedings and considering that this is a Court of
record the comment has to be in first then in your reply you can submit your
evidence to rebut the argument that is going to be put up by the respondent and
so we will be able to hear the case smoothly.

ATTY. My point here your Honor please, is that the respondent had been long time
BUGARING: furnished of this contempt proceedings. With a copy of the motion they should
have filed it in due time in accordance with the rules and because it is scheduled
for trial, we are ready to mark our evidence and present to this Court, your
Honor
COURT: (Banging the gavel) Will you listen.
ATTY. I am listening, your Honor.
BUGARING:
COURT: And this Court declares that you are out of order.
ATTY. Well, if that is the contention of the Court your Honor please, we are all officers
BUGARING: of the Court, your Honor, please, we have also ---- and we know also our
procedure, your Honor.
COURT: If you know your procedure then you follow the procedure of the Court first
and then do whatever you want.
ATTY. Yes, your Honor please, because we could feel the antagonistic approach of the
BUGARING: Court of this representation ever since I appeared your Honor please and I put
on record that I will be filing an inhibition to this Hon. Court.
COURT: Do that right away. (Banging the gavel)
ATTY. Because we could not find any sort of justice in town.
BUGARING:
COURT: Do that right away.
ATTY. We are ready to present our witness and we are deprive to present our witness.
BUGARING:
COURT: You have presented a witness and it was an adverse witness that was presented.
ATTY. I did not….
BUGARING:
COURT: With respect to this, the procedure of the Court is for the respondent to file his
comment.
ATTY. Well your Honor please, at this point in time I don't want to comment on
BUGARING: anything but I reserve my right to inhibit this Honorable Court before trying
this case.
COURT: You can do whatever you want.
ATTY. Yes, your Honor, that is our prerogative your Honor.
BUGARING:
COURT: As far as this Court is concerned it is going to follow the rules.
ATTY. Yes, your Honor, we know all the rules.
BUGARING:
COURT: Yes, you know your rules that's why you are putting the cart ahead of the horse.
ATTY. No your Honor, I've been challenged by this Court that I know better than this
BUGARING: Court. Modestly (sic) aside your Honor please, I've been winning in many
certiorari cases, your Honor.
COURT: Okay, okay, do that, do that. I am going to cite you for contempt of Court.
(Banging the gavel) You call the police and I am going to send this lawyer in
jail. (Turning to the Sheriff)
ATTY. I am just manifesting and arguing in favor of my client your Honor please.
BUGARING:
COURT: You have been given enough time and you have been abusing the discretion of
this Court.
ATTY. I am very sorry your Honor, if that is the appreciation of the Court but this is
BUGARING: one way I am protecting my client, your Honor.
COURT: That is not the way to protect your client that is an abuse of the discretion of
this Court. (Turning to the Sheriff) "Will you see to it that this guy is put in
jail." (pp. 29-42. Rollo)
Hence, in an Order dated December 5, 1996, Judge Español cited petitioner in direct contempt of
court, thus:
During the hearing of this case, plaintiffs and counsel were present together with one (1)
operating a video camera who was taking pictures of the proceedings of the case while
counsel, Atty. Rexie Efren Bugaring was making manifestation to the effect that he was
ready to mark his documentary evidence pursuant to his Motion to cite (in contempt of
court) the Deputy Register of Deeds of Cavite, Diosdado Concepcion.
The Court called the attention of said counsel who explained that he did not cause the
appearance of the cameraman to take pictures, however, he admitted that they came from
a function, and that was the reason why the said cameraman was in tow with him and the
plaintiffs. Notwithstanding the flimsy explanation given, the counsel sent out the
cameraman after the Court took exception to the fact that although the proceedings are
open to the public and that it being a court of record, and since its permission was not
sought, such situation was an abuse of discretion of the Court.
When the respondent, Deputy Register of Deeds Concepcion manifested that he needed
the services of counsel and right then and there appointed Atty. Elpidio Barzaga to
present him, the case was allowed to be called again. On the second call, Atty. Burgaring
started to insist that he be allowed to mark and present his documentary evidence in spite
of the fact that Atty. Barzaga was still manifesting that he be allowed to submit a written
pleading for his client, considering that the Motion has so many ramifications and the
issues are complicated.
At this point, Atty. Bugaring was insisting that he be allowed to mark his documentary
evidence and was raring to argue as in fact he was already perorating despite the fact that
Atty. Barzaga has not yet finished with his manifestation. As Atty. Bugaring appears to
disregard orderly procedure, the Court directed him to listen and wait for the ruling of the
Court for an orderly proceeding.
While claiming that he was listening, he would speak up anytime he felt like doing so.
Thus, the Court declared him out of order, at which point, Atty. Bugaring flared up the
uttered words insulting the Court; such as: 'that he knows better than the latter as he has
won all his cases of certiorari in the appellate Courts, that he knows better the Rules of
Court; that he was going to move for the inhibition of the Presiding Judge for allegedly
being antagonistic to his client,' and other invectives were hurled to the discredit of the
Court.
Thus, in open court, Atty. Bugaring was declared in direct contempt and order the Court's
sheriff to arrest and place him under detention.
WHEREFORE, in view of the foregoing and the fact that Atty. Rexie Efren Bugaring
committed an open defiance, even challenging the Court in a disrespectful, arrogant, and
contumacious manner, he is declared in direct contempt of Court and is sentenced to
three (3) days imprisonment and payment of a fine of P3,000.00. His detention shall
commence immediately at the Municipal Jail of Imus, Cavite.5
Pursuant to said Order, the petitioner served his three (3) day sentence at the Imus Municipal
Jail, and paid the fine of P3,000.00.6
While serving the first day of his sentence on December 5, 1996, petitioner filed a motion for
reconsideration of the Order citing him in direct contempt of court. The next day, December 6,
1996, petitioner filed another motion praying for the resolution of his motion for reconsideration.
Both motions were never resolved and petitioner was released on December 8, 1996.7
To clear his name in the legal circle and the general public, petitioner filed a petition before the
Court of Appeals praying for the annulment of the Order dated December 5, 1996 citing him in
direct contempt of court and the reimbursement of the fine of P3,000.00 on grounds that
respondent Judge Dolores S. Español had no factual and legal basis in citing him in direct
contempt of court, and that said Order was null and void for being in violation of the
Constitution and other pertinent laws and jurisprudence.8
The Court of Appeals found that from a thorough reading of the transcript of stenographic notes
of the hearing held on December 5, 1996, it was obvious that the petitioner was indeed arrogant,
at times impertinent, too argumentative, to the extent of being disrespectful, annoying and
sarcastic towards the court.9 It affirmed the order of the respondent judge, but found that the fine
of P3,000.00 exceeded the limit of P2,000.00 prescribed by the Rules of Court,10 and ordered the
excess of P1,000.00 returned to petitioner. On March 6, 1998, it rendered judgment, the
dispositive portion of which reads:
WHEREFORE, the petition is hereby DISMISSED for lack of merit and the assailed
order dated December 5, 1996 issued by the trial court is hereby AFFIRMED with the
modification that the excess fine of P1,000.00 is ORDERED RETURNED to the
petitioner.
Before us, petitioner ascribes to the Court of Appeals this lone error:
THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN AFFIRMING
THE ASSAILED ORDER OF THE TRIAL COURT WHICH TO PETITIONER'S
SUBMISSIONS SMACKS OF OPPRESSION AND ABUSE OF AUTHORITY,
HENCE IT COMMITTED A GRAVE ERROR OF LAW IN ITS QUESTIONED
DECISION.11
Petitioner insists that a careful examination of the transcript of stenographic notes of the subject
proceedings would reveal that the contempt order issued by respondent judge had no factual and
legal basis. It would also show that he was polite and respectful towards the court as he always
addressed the court with the phrase "your honor please."
We disagree.
Section 1, Rule 71 of the Rules of Court as amended by Administrative Circular No. 22-95
provides:
Direct contempt punished summarily. – A person guilty of misbehavior in the presence of
or so near a court or judge as to obstruct or interrupt the proceedings before the same,
including disrespect toward the court or judge, offensive personalities toward others, or
refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition
when lawfully required to do so, may be summarily adjudged in contempt by such court
or judge and punished by a fine not exceeding two thousand pesos or imprisonment not
exceeding ten (10) days, or both, if it be a superior court, or a judge thereof, or by a fine
not exceeding two hundred pesos or imprisonment not exceeding one (1) day, or both, if
it be an inferior court.
We agree with the statement of the Court of Appeals that petitioner's alleged deference to the
trial court in consistently addressing the respondent judge as "your Honor please" throughout the
proceedings is belied by his behavior therein:
 1. the veiled threat to file a petition for certiorari against the trial court (pp. 14-15, tsn,
December 5, 1996; pp. 41-42, Rollo) is contrary to Rule 11.03, Canon 11 of the Code of
Professional Responsibility which mandates that "a lawyer shall abstain from scandalous,
offensive or menacing language or behavior before the Courts".
2. the hurled uncalled for accusation that the respondent judge was partial in favor of the
other party (pp. 13-14, tsn, December 5, 1996; pp. 40-41, Rollo) is against Rule 11.04,
Canon 11 of the Code of Professional Responsibility which enjoins lawyers from
attributing to a judge "motives not supported by the record or have no materiality to the
case".
3. behaving without due regard to the trial court's order to maintain order in the
proceedings (pp. 9-13, tsn, December 5, 1996; pp. 36-40, Rollo) I in utter disregard to
Canon 1 of the Canons of Professional Ethics which makes it a lawyer's duty to "maintain
towards the courts (1) respectful attitude" in order to maintain its importance in the
administration of justice, and Canon 11 of the Code of Professional Responsibility which
mandates lawyers to "observe and maintain the respect due to the Courts and to judicial
officers and should insist on similar conduct by others".
4. behaving without due regard or deference to his fellow counsel who at the time he was
making representations in behalf of the other party, was rudely interrupted by the
petitioner and was not allowed to further put a word in edgewise (pp. 7-13, tsn, December
5, 1996; pp. 34-39, Rollo) is violative of Canon 8 of the Code of Professional Ethics
which obliges a lawyer to conduct himself with courtesy, fairness and candor toward his
professional colleagues, and
5. The refusal of the petitioner to allow the Registrar of Deeds of the Province of Cavite,
through counsel, to exercise his right to be heard (Ibid) is against Section 1 of Article III,
1997 Constitution on the right to due process of law, Canon 18 of the Canons of
Professional Ethics which mandates a lawyer to always treat an adverse witness "with
fairness and due consideration," and Canon 12 of Code of Professional Responsibility
which insists on a lawyer to "exert every effort and consider it his duty to assist in the
speedy and efficient administration of justice."
The Court cannot therefore help but notice the sarcasm in the petitioner's use of the phrase "your
honor please." For, after using said phrase he manifested utter disrespect to the court in his
subsequent utterances. Surely this behavior from an officer of the Court cannot and should not be
countenanced, if proper decorum is to be observed and maintained during court proceedings.12
Indeed, the conduct of petitioner in persisting to have his documentary evidence marked to the
extent of interrupting the opposing counsel and the court showed disrespect to said counsel and
the court, was defiant of the court's system for an orderly proceeding, and obstructed the
administration of justice. The power to punish for contempt is inherent in all courts and is
essential to the preservation of order in judicial proceedings and to the enforcement of
judgments, orders, and mandates of the court, and consequently, to the due administrative of
justice.13 Direct contempt is committed in the presence of or so near a court or judge, as in the
case at bar, and can be punished summarily without hearing.14 Hence, petitioner cannot claim
that there was irregularity in the actuation of respondent judge in issuing the contempt order
inside her chamber without giving the petitioner the opportunity to defend himself or make an
immediate reconsideration. The records show that petitioner was cited in contempt of court
during he hearing in the sala of respondent judge, and he even filed a motion for reconsideration
of the contempt order on the same day.15
Petitioner argued that while it might appear that he was carried by his emotions in espousing the
case of his client – by persisting to have his documentary evidence marked despite the
respondent judge's contrary order – he did so in the honest belief that he was bound to protect the
interest of his client to the best of his ability and with utmost diligence.
The Court of Appeals aptly stated:
But "a lawyer should not be carried away in espousing his client's cause" (Buenaseda v.
Flavier, 226 SCRA 645, 656). He should not forget that he is an officer of the court,
bound to exert every effort and placed under duty, to assist in the speedy and efficient
administration of justice Presiding Judge, RTC, Br. 15, Ozamis City, 249 SCRA 432,
439). He should not, therefore, misuse the rules of procedure to defeat the ends of justice
per Rule 10.03. Canon 10 of the Canons of Professional Responsibility, or unduly delay a
case, impede the execution of a judgment or misuse court processes, in accordance with
Rule 12.04, Canon 12 of the same Canons (Ibid).
"Lawyers should be reminded that their primary duty is to assist the courts in the
administration of justice. Any conduct which tends to delay, impede or obstruct the
administration of justice contravenes such lawyer's duty."16
Although respondent judge was justified in citing petitioner in direct contempt of court, she erred
in imposing a fine in the amount of P3,000.00 which exceeded the ceiling of P2,000.00 under
Supreme Court Administrative Circular No. 22-95 which took effect on November 16, 1995. It
was not established that the fine was imposed in bad faith. The Court of Appeals thus properly
ordered the return of the excess of P1,000.00. Aside from the fine, the three days imprisonment
meted out to petitioner was justified and within the 10-day limit prescribed in Section 1, Rule 71
of the Rules of Court, as amended.
It is our view and we hold, therefore, that the Court of Appeals did not commit any reversible
error in its assailed decision.
WHEREFORE, the assailed Decision dated March 6, 1998 of the Court of Appeals is hereby
AFFIRMED. The Regional Trial Court of Cavite, Branch 90, Imus, Cavite is ordered to return
to the petitioner, Rexie Efren A. Bugaring, the sum of P1,000.00 out of the original fine of
P3,000.00.1âwphi1.nêt
SO ORDERED.
Bellosillo, Mendoza, Quisumbing, and Buena, JJ., concur.