EN BANC G.R. No.

180236 January 17, 2012

GEMMA P. CABALIT, Petitioner, vs. COMMISSION ON AUDIT-REGION VII, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 180341 FILADELFO S. APIT, Petitioner, vs. COMMISSION ON AUDIT (COA) Legal and Adjudication, Region VII, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 180342 LEONARDO G. OLAIVAR, in his capacity as Transportation Regulation Officer and OfficerIn-Charge of Land Transportation Office, Jagna, Province of Bohol, Petitioner, vs. HON. PRIMO C. MIRO, in his official capacity as Deputy Ombudsman for Visayas, EDGARDO G. CANTON, in his capacity as Graft Investigator Officer, ATTY. ROY L. URSAL, in his capacity as Regional Cluster Director, Commission on Audit, Cebu City, Respondents. DECISION VILLARAMA, JR., J.: Three employees from the Land Transportation Office (LTO) in Jagna, Bohol were found by the Ombudsman to have perpetrated a scheme to defraud the government of proper motor vehicle registration fees. They now seek in the present consolidated petitions a judgment from this Court annulling the January 18, 2006 Decision1 and September 21, 2007 Resolution2 of the Court of Appeals (CA) which affirmed with modification the Decision3 of the Office of the OmbudsmanVisayas dismissing them from government service. The facts follow: On September 4, 2001, the Philippine Star News, a local newspaper in Cebu City, reported that employees of the LTO in Jagna, Bohol, are shortchanging the government by tampering with their income reports.4 Accordingly, Regional Director Ildefonso T. Deloria of the Commission on Audit (COA) directed State Auditors Teodocio D. Cabalit and Emmanuel L. Coloma of the Provincial Revenue Audit Group to conduct a fact-finding investigation. A widespread tampering of official receipts of Motor Vehicle Registration during the years 1998, 1999, 2000 and 2001 was then discovered by the investigators.

According to the investigators, a total of 106 receipts were tampered. The scheme was done by detaching the Plate Release and Owners copy from the set of official receipts then typing thereon the correct details corresponding to the vehicle registered, the owners name and address, and the correct amount of registration fees. The other copies, consisting of the copies for the Collector, EDP, Record, Auditor, and Regional Office, meanwhile, were typed on to make it appear that the receipts were issued mostly for the registration of motorcycles with much lower registration charges. Incorrect names and/or addresses were also used on said file copies. The difference between the amounts paid by the vehicle owners and the amounts appearing on the file copies were then pocketed by the perpetrators, and only the lower amounts appearing on the retained duplicate file copies were reported in the Report of Collections. 5 According to State Auditors Cabalit and Coloma in their Joint-Affidavit, the scheme was perpetrated by LTO employees Leonardo G. Olaivar, Gemma P. Cabalit, Filadelfo S. Apit and Samuel T. Alabat, and resulted in an unreported income totaling P169,642.50.6 On August 8, 2002, COA Regional Cluster Director Atty. Roy L. Ursal reported the tampering of official receipts to Deputy Ombudsman Primo C. Miro.7 According to Atty. Ursal, the irregularity is penalized under Article 217, in relation to Article 171 of the Revised Penal Code;8 Section 3(e)9 of the Anti-Graft and Corrupt Practices Act, and likewise violates Republic Act (R.A.) No. 6713.10 In a Joint Evaluation Report, Graft Investigators Pio R. Dargantes and Virginia Palanca-Santiago found grounds to conduct a preliminary investigation.11 Hence, a formal charge for dishonesty was filed against Olaivar, Cabalit, Apit and Alabat before the Office of the Ombudsman-Visayas, and the parties were required to submit their counter-affidavits. In compliance, Olaivar, Cabalit, Apit and Alabat submitted separate counter-affidavits, all essentially denying knowledge and responsibility for the anomalies. As to Olaivar, he maintained that the receipts were typed outside his office by regular and casual employees. He claimed that the receipts were presented to him only for signature and he does not receive the payment when he signs the receipts.12 Cabalit, for her part, claimed that her duty as cashier was to receive collections turned over to her and to deposit them in the Land Bank of the Philippines in Tagbilaran City. She claimed that she was not even aware of any anomaly in the collection of fees prior to the investigation.13 As to Apit, he admitted that he countersigned the official receipts, but he too denied being aware of any illegal activity in their office. He claimed that upon being informed of the charge, he verified the photocopies of the tampered receipts and was surprised to find that the signatures above his name were falsified.14 Alabat, meanwhile, claimed he did not tamper, alter or falsify any public document in the performance of his duties. He insisted that the initial above his name on Official Receipt No. 64056082 was Apits, while the initial on Official Receipt No. 64056813 was that of Olaivar.15 During the hearing before Graft Investigator Pio R. Dargantes, State Auditor Cabalit testified on the investigation he conducted in the LTO in Jagna, Bohol. He testified that he was furnished with the owners and duplicate copies of the tampered receipts. Upon comparison of the Owners copy with the Collector or Records copy, he noticed that the amounts shown in the original copies were much bigger than those appearing in the file copies. State Auditor Cabalit also declared that the basis for implicating Olaivar is the fact that his signature appears in all the 106 tampered official receipts and he signed as verified correct the Report of Collections, which included the tampered receipts. As to Apit and Cabalit, they are the other signatories of the official receipts. 16 In some official receipts, the Owners copy is signed by F.S. Apit as Computer Evaluator, G.P. Cabalit as Cashier, and Leonardo Olaivar as District Head, but their signatures do not appear on the file copies.17

On February 12, 2004, the Office of the Ombudsman-Visayas directed18 the parties to submit their position papers pursuant to Administrative Order (A.O.) No. 17, dated September 7, 2003, amending the Rules of Procedure of the Office of the Ombudsman.19 No cross-examination of State Auditor Cabalit was therefore conducted. Complying with the above Order, the COA submitted its position paper on March 18, 2004. Olaivar, Cabalit and Apit, for their part, respectively submitted their position papers on April 29, 2004, March 18, 2004 and March 15, 2004. In its position paper,20 the COA pointed out that the signatures of Cabalit, Apit and Olaivar were indispensable to the issuance of the receipts. As to Olaivar, the original receipts bear his signature, thereby showing that he approved of the amounts collected for the registration charges. However, when the receipts were reported in the Report of Collections, the data therein were already tampered reflecting a much lesser amount. By affixing his signature on the Report of Collections and thereby attesting that the entries therein were verified by him as correct, he allowed the scheme to be perpetrated. As to Cabalit, the COA pointed out that as cashier, Cabalits signature on the receipts signified that she received the registration fees. The correct amounts should have therefore appeared in the Report of Collections, but as already stated, lesser amounts appeared on the Report of Collections, which she prepares. In the same manner, Apit, as computer evaluator, also signed the subject receipts allowing the irregularities to be perpetuated.1avvphi1 In his position paper,21 Olaivar meanwhile insisted that he had no participation in the anomalies. He stressed that his only role in the issuance of the official receipts was to review and approve the applications, and that he was the last one to sign the official receipts. He argued that based on the standard procedure for the processing of applications for registration of motor vehicles, it could be deduced that there was a concerted effort or conspiracy among the evaluator, typist and cashier, while he was kept blind of their modus operandi. Cabalit, for her part, questioned the findings of the investigators. She stressed in her position paper22 that had there been a thorough investigation of the questioned official receipts, the auditors would have discovered that the signatures appearing above her name were actually that of Olaivar. She outlined the standard paper flow of a regular transaction at the LTO. It begins when the registrant goes to the computer evaluator for the computation of applicable fees and proceeds to the cashier for payment. After paying, the typist will prepare the official receipts consisting of seven (7) copies, which will be routed to the computer evaluator, to the district head, and to the cashier for signature. The cashier retains the copies for the EDP, Regional Office, Collector and Auditor, while the remaining copies (Owner, Plate Release and Records copy) will be forwarded to the Releasing Section for distribution and release. Cabalit insisted that on several occasions Olaivar disregarded the standard procedure and directly accommodated some registrants who were either his friends or referred to him by friends. For such transactions, Olaivar assumes the functions of computer evaluator, typist and cashier, as he is the one who computes the fees, receives the payment and prepares the official receipts. Olaivar would then remit the payment to her. As the cashier, she has to accept the payment as a matter of ministerial duty. Apit, meanwhile, stressed in his position paper23 that the strokes of the signatures appearing above his typewritten name on the official receipts are different, indicating that the same are falsified. He also explained that considering that the LTO in Jagna issues around 20 to 25 receipts a day, he signed the receipts relying on the faith that his co-employees had properly accomplished

the forms. He also pointed out that Engr. Dano admitted signing accomplished official receipts when the regular computer encoder is out, which just shows that other personnel could have signed above the name of F.S. Apit.lawphil On May 3, 2004, the Office of the Ombudsman-Visayas rendered judgment finding petitioners liable for dishonesty for tampering the official receipts to make it appear that they collected lesser amounts than they actually collected. The OMB-Visayas ruled: WHEREFORE, premises considered, it is hereby resolved that the following respondents be found guilty of the administrative infraction of DISHONESTY and accordingly be meted out the penalty of DISMISSAL FROM THE SERVICE with the accessory penalties of cancellation of civil service eligibility, forfeiture of retirement benefits and disqualification from re-employment in the government service: 1. Leonardo G. Olaivar -Transportation Regulation Officer II/ Office[r]-In-Charge LTO Jagna District Office Jagna, Bohol; 2. Gemma P. Cabalit - Cashier II, LTO Jagna District Office Jagna, Bohol; 3. Filadelpo S. Apit - Clerk II, LTO Jagna District Office Jagna, Bohol; The complaint against respondent Samuel T. Alabat, presently the Head of Apprehension Unit of the Tagbilaran City LTO, is hereby DISMISSED for insufficiency of evidence. The complaint regarding the LTO official receipts/MVRRs issued by the LTO Jagna District Office, which are not covered by original copies are hereby DISMISSED without prejudice to the filing of the appropriate charges upon the recovery of the original copies thereof. SO DECIDED.24 Petitioners sought reconsideration of the decision, but their motions were denied by the Ombudsman.25 Thus, they separately sought recourse from the CA. On January 18, 2006, the CA promulgated the assailed Decision in CA-G.R. SP. Nos. 86256, 86394 and 00047. The dispositive portion of the CA decision reads, WHEREFORE, premises considered, judgment is hereby rendered by US DISMISSING the instant consolidated petitions. The assailed decision of the Office of the Ombudsman-Visayas dated May 3, 2004 in OMB-V-A-02-0415-H is hereby AFFIRMED with a modification that petitioner Olaivar be held administratively liable for gross neglect of duty which carries the same penalty as provided for dishonesty. No pronouncement as to costs. SO ORDERED.26

According to the CA, it was unbelievable that from 1998 to 2001, Cabalit and Apit performed vital functions by routinely signing LTO official receipts but did not have any knowledge of the irregularity in their office. With regard to Olaivar, the CA believed that the tampering of the receipts could have been avoided had he exercised the required diligence in the performance of his duties. Thus, the CA held him liable merely for gross neglect of duty. Petitioners sought reconsideration of the CA decision, but the CA denied their motions. they filed the instant petitions before the Court. In her petition, petitioner Cabalit argues that I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE OMBUDSMAN'S DECISION WHICH GAVE RETROACTIVE EFFECT TO THE NEW ADMINISTRATIVE ORDER NO. 17 IN THE PROCEEDINGS BELOW THAT WAS ALREADY ON TRIAL IN ACCORDANCE WITH ADMINISTRATIVE ORDER NO. 07. II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT ALTHOUGH THE TRIAL TYPE HEARING UNDER ADMINISTRATIVE ORDER NO. 07 DID NOT PUSH THRU, PETITIONER WAS STILL ACCORDED HER RIGHT TO DUE PROCESS UNDER THE SUMMARY PROCEEDINGS PURSUANT TO ADMINISTRATIVE ORDER NO. 17. III. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT AFFIRMED THE DECISION OF RESPONDENT OMBUDSMAN DESPITE HAVING FAILED TO MAKE A CATEGORICAL RULING ON THE ISSUE OF WHETHER THE QUESTIONED AND/OR FORGED SIGNATURES BELONG TO PETITIONER GEMMA CABALIT. IV. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT FAILED TO RULE ON THE DOCTRINAL VALUE AND/OR APPLICABILITY OF THE TAPIADOR VS. OFFICE OF THE OMBUDSMAN (G.R. [129124], MARCH 15, 2002) RULING HERE IN THE INSTANT CASE.28
27

I. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER LEONARDO G. OLAIVAR IS ADMINISTRATIVELY LIABLE FOR GROSS NEGLIGENCE. II. WHETHER THE HONORABLE COURT OF APPEALS ERRED WHEN IT HELD THAT PETITIONER LEONARDO G. OLAIVAR WAS NOT DENIED DUE PROCESS WHEN THE OFFICE OF THE OMBUDSMAN VISAYAS FOUND HIM GUILTY FOR DISHONESTY AND METED OUT THE PENALTY OF DISMISSAL FROM SERVICE.30 On January 15, 2008, said petitions were consolidated.31 Essentially, the issues for our resolution are: (1) whether there was a violation of the right to due process when the hearing officer at the Office of the Ombudsman-Visayas adopted the procedure under A.O. No. 17 notwithstanding the fact that the said amendatory order took effect after the hearings had started; and (2) whether Cabalit, Apit and Olaivar are administratively liable. As regards the first issue, petitioners claim that they were denied due process of law when the investigating lawyer proceeded to resolve the case based only on the affidavits and other evidence on record without conducting a formal hearing. They lament that the case was submitted for decision without giving them opportunity to present witnesses and cross-examine the witnesses against them. Petitioner Cabalit also argues that the Office of the Ombudsman erred in applying the amendments under A.O. No. 17 to the trial of the case, which was already in progress under the old procedures under A.O. No. 07. She stressed that under A.O. No. 07, she had the right to choose whether to avail of a formal investigation or to submit the case for resolution on the basis of the evidence on record. Here, she was not given such option and was merely required to submit her position paper. Petitioners arguments deserve scant consideration.

Hence,

Suffice to say, petitioners were not denied due process of law when the investigating lawyer proceeded to resolve the case based on the affidavits and other evidence on record. Section 5(b)(1)32 Rule 3, of the Rules of Procedure of the Office of the Ombudsman, as amended by A.O. No. 17, plainly provides that the hearing officer may issue an order directing the parties to file, within ten days from receipt of the order, their respective verified position papers on the basis of Meanwhile, Apit interposes the following arguments in his petition: which, along with the attachments thereto, the hearing officer may consider the case submitted for decision. It is only when the hearing officer determines that based on the evidence, there is a need I. THE COURT OF APPEALS ERRED IN LIMITING ADMINISTRATIVE DUE PROCESS to conduct clarificatory hearings or formal investigations under Section 5(b)(2) and Section 5(b)(3) that such further proceedings will be conducted. But the determination of the necessity for further AS AN OPPORTUNITY TO BE HEARD ONLY. proceedings rests on the sound discretion of the hearing officer. As the petitioners have utterly failed to show any cogent reason why the hearing officers determination should be overturned, the II. THE COURT OF APPEALS ERRED IN CONCLUDING THE DEFENSE OF determination will not be disturbed by this Court. We likewise find no merit in their contention PETITIONER APIT AS MERE DENIAL. that the new procedures under A.O. No. 17, which took effect while the case was already undergoing trial before the hearing officer, should not have been applied. III. THE COURT OF APPEALS ERRED IN ITS FAILURE TO RECONSIDER THE EVIDENCE THAT CLEARLY PROVED THAT THE SIGNATURES ABOVE THE NAME The rule in this jurisdiction is that one does not have a vested right in procedural rules. In Tan, Jr. OF PETITIONER APIT IN THE QUESTIONED RECEIPTS ARE ALL FORGED AND v. Court of Appeals,33 the Court elucidated: FALSIFIED.29 As for Olaivar, he assails the CA Decision raising the following issues: Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that extent. The fact that procedural statutes may somehow affect the litigants rights may not

preclude their retroactive application to pending actions. The retroactive application of procedural laws is not violative of any right of a person who may feel that he is adversely affected. Nor is the retroactive application of procedural statutes constitutionally objectionable. The reason is that as a general rule no vested right may attach to, nor arise from, procedural laws. It has been held that "a person has no vested right in any particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure. (Emphasis supplied.) While the rule admits of certain exceptions, such as when the statute itself expressly or by necessary implication provides that pending actions are excepted from its operation, or where to apply it would impair vested rights, petitioners failed to show that application of A.O. No. 17 to their case would cause injustice to them. Indeed, in this case, the Office of the Ombudsman afforded petitioners every opportunity to defend themselves by allowing them to submit counter-affidavits, position papers, memoranda and other evidence in their defense. Since petitioners have been afforded the right to be heard and to defend themselves, they cannot rightfully complain that they were denied due process of law. Well to remember, due process, as a constitutional precept, does not always and in all situations require a trial-type proceeding. It is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. More often, this opportunity is conferred through written pleadings that the parties submit to present their charges and defenses.34 But as long as a party is given the opportunity to defend his or her interests in due course, said party is not denied due process. 35 Neither is there merit to Cabalits assertion that she should have been investigated under the "old rules of procedure" of the Office of the Ombudsman, and not under the "new rules." In Marohomsalic v. Cole,36 we clarified that the Office of the Ombudsman has only one set of rules of procedure and that is A.O. No. 07, series of 1990, as amended. There have been various amendments made thereto but it has remained, to date, the only set of rules of procedure governing cases filed in the Office of the Ombudsman. Hence, the phrase "as amended" is correctly appended to A.O. No. 7 every time it is invoked. A.O. No. 17 is just one example of these amendments. But did the CA correctly rule that petitioners Cabalit and Apit are liable for dishonesty while petitioner Olaivar is liable for gross neglect of duty? Cabalit argues that the CA erred in affirming the decision of the Ombudsman finding her liable for dishonesty. She asserts that it was not established by substantial evidence that the forged signatures belong to her. Meanwhile, Apit contends that the CA erred in not considering evidence which proves that the signatures appearing above his name are falsified. However, we note that both Cabalit and Apit raise essentially factual issues which are not proper in petitions filed under Rule 45. Settled jurisprudence dictates that subject to a few exceptions, only questions of law may be brought before the Court via a petition for review on certiorari. In Diokno v. Cacdac,37 the Court held: x x x [T]he scope of this Courts judicial review of decisions of the Court of Appeals is generally confined only to errors of law, and questions of fact are not entertained. We elucidated on our fidelity to this rule, and we said: Thus, only questions of law may be brought by the parties and passed upon by this Court in the exercise of its power to review. Also, judicial review by this Court does not extend to a

reevaluation of the sufficiency of the evidence upon which the proper x x x tribunal has based its determination. (Emphasis supplied.) It is aphoristic that a re-examination of factual findings cannot be done through a petition for review on certiorari under Rule 45 of the Rules of Court because this Court is not a trier of facts; it reviews only questions of law. The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below.38 Here, the CA affirmed the findings of fact of the Office of the Ombudsman-Visayas which are supported by substantial evidence such as affidavits of witnesses and copies of the tampered official receipts.39 The CA found that a perusal of the questioned receipts would easily reveal the discrepancies between the date, name and vehicle in the Owner's or Plate Release copies and the File, Auditor, and Regional Office copies. It upheld the factual findings of the Ombudsman that petitioners Cabalit and Apit tampered with the duplicates of the official receipts to make it appear that they collected a lesser amount. Their participation was found to have been indispensable as the irregularities could not have been committed without their participation. They also concealed the misappropriation of public funds by falsifying the receipts. Now, superior courts are not triers of facts. When the findings of fact of the Ombudsman are supported by substantial evidence, it should be considered as conclusive. 40 This Court recognizes the expertise and independence of the Ombudsman and will avoid interfering with its findings absent a finding of grave abuse of discretion.41 Hence, being supported by substantial evidence, we find no reason to disturb the factual findings of the Ombudsman which are affirmed by the CA. As for Olaivar, he insists that the CA erred in holding him administratively liable for gross negligence when he relied to a reasonable extent and in good faith on the actions of his subordinates in the preparation of the applications for registration. He questions the appellate courts finding that he failed to exercise the required diligence in t he performance of his duties.1avvphi1 While as stated above, the general rule is that factual findings of the CA are not reviewable by this Court, we find that Olaivars case falls in one of the recognized exceptions laid down in jurisprudence since the CAs findings regarding his liability are premised on the supposed absence of evidence but contradicted by the evidence on record. 42 The Office of the Ombudsman-Visayas found Olaivar administratively liable for dishonesty while the CA ruled that he may not be held liable for dishonesty supposedly for lack of sufficient evidence. The CA ruled that there was no substantial evidence to show that Olaivar participated in the scheme, but the tampering of the official receipts could have been avoided had he exercised the required diligence in the performance of his duties as officer-in-charge of the Jagna District Office. Thus, the CA found him liable only for gross neglect of duty. This, however, is clear error on the part of the CA. For one, there is clear evidence that Olaivar was involved in the anomalies. Witness Joselito Taladua categorically declared in his affidavit43 that he personally paid Olaivar the sum of P2,675 for the renewal of registration of a jeep for which he was issued Official Receipt No. 47699853. Much to his dismay, Taladua later found out that his payment was not reflected correctly in the Report of Collections, and that the vehicle was deemed unregistered for the year 2000.

More, Cabalit pointed to Olaivar as the person behind the anomaly in the LTO-Jagna District Office. She narrated in her position paper that on several times, Olaivar directly accommodated some registrants and assumed the functions of computer evaluator, typist and cashier, and computed the fees, received payment and prepared the official receipts for those transactions. She also revealed that Olaivar would ask her for unused official receipts and would later return the duplicate copies to her with the cash collections. Later, he would verify the Report of Collections as correct.44 Likewise, Motor Vehicle Inspector Engr. Lowell A. Dano confirmed that in several instances, he witnessed Olaivar type the data himself in the official receipts even if they have a typist in the office to do the job. Engr. Dano added that after typing, Olaivar personally brought the accomplished official receipts for him (Engr. Dano) to sign.45 Moreover, Jacinto Jalop, the records officer of the LTO in Jagna, Bohol, illustrated how the official receipts were tampered. He disclosed that the correct charges were typed in the Owners copy and the Plate Release copy of the official receipts, but a much lower charge and an incorrect address were indicated in the other copies. He asserted that Olaivar was responsible for tampering the official receipts.46 Neglect of duty implies only the failure to give proper attention to a task expected of an employee arising from either carelessness or indifference.47 However, the facts of this case show more than a failure to mind ones task. Rather, they manifest that Olaivar committed acts of dishonesty, which is defined as the concealment or distortion of truth in a matter of fact relevant to ones office or connected with the performance of his duty. It implies a disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in principle.48 Hence, the CA should have found Olaivar liable for dishonesty. But be that as it may, still, the CA correctly imposed the proper penalty upon Olaivar. Under Section 52, Rule IV of the Uniform Rules on Administrative Cases in the Civil Service, dishonesty, like gross neglect of duty, is classified as a grave offense punishable by dismissal even if committed for the first time.49 Under Section 58,50 such penalty likewise carries with it the accessory penalties of cancellation of civil service eligibility, forfeiture of retirement benefits and disqualification from re-employment in the government service. One final note. Cabalit contends that pursuant to the obiter in Tapiador v. Office of the Ombudsman,51 the Office of the Ombudsman can only recommend administrative sanctions and not directly impose them. However, in Office of the Ombudsman v. Masing,52 this Court has already settled the issue when we ruled that the power of the Ombudsman to determine and impose administrative liability is not merely recommendatory but actually mandatory. We held, We reiterated this ruling in Office of the Ombudsman v. Laja, where we emphasized that "the Ombudsmans order to remove, suspend, demote, fine, censure, or prosecute an officer or employee is not merely advisory or recommendatory but is actually mandatory." Implementation of the order imposing the penalty is, however, to be coursed through the proper officer. Recently, in Office of the Ombudsman v. Court of Appeals, we also held While Section 15(3) of RA 6770 states that the Ombudsman has the power to "recommend x x x removal, suspension, demotion x x x" of government officials and employees, the same Section 15(3) also states that the Ombudsman in the alternative may "enforce its disciplinary authority as provided in Section 21" of RA 6770. (emphasis supplied.)53

Subsequently, in Ledesma v. Court of Appeals,54 and Office of the Ombudsman v. Court of Appeals,55 the Court upheld the Ombudsmans power to impose the penalty of removal, suspension, demotion, fine, censure, or prosecution of a public officer or employee found to be at fault in the exercise of its administrative disciplinary authority. In Office of the Ombudsman v. Court of Appeals, we held that the exercise of such power is well founded in the Constitution and R.A. No. 6770, otherwise known as The Ombudsman Act of 1989, thus: The Court further explained in Ledesma that the mandatory character of the Ombudsmans order imposing a sanction should not be interpreted as usurpation of the authority of the head of office or any officer concerned. This is because the power of the Ombudsman to investigate and prosecute any illegal act or omission of any public official is not an exclusive authority but a shared or concurrent authority in respect of the offense charged. By stating therefore that the Ombudsman "recommends" the action to be taken against an erring officer or employee, the provisions in the Constitution and in Republic Act No. 6770 intended that the implementation of the order be coursed through the proper officer. Consequently in Ledesma, the Court affirmed the appellate courts decision which had, in turn, affirmed an order of the Office of the Ombudsman imposing the penalty of suspension on the erring public official.56 The duty and privilege of the Ombudsman to act as protector of the people against the illegal and unjust acts of those who are in the public service emanate from no less than the 1987 Constitution. Section 12 of Article XI thereof states: Section 12. The Ombudsman and his Deputies, as protectors of the people, shall act promptly on complaints filed in any form or manner against public officials or employees of the Government, or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations, and shall, in appropriate cases, notify the complainants of the action taken and the result thereof. In addition, Section 15 (3) of R.A. No. 6770, provides: SEC. 15. Powers, Functions and Duties. The Office of the Ombudsman shall have the following powers, functions and duties: xxxx (3) Direct the officer concerned to take appropriate action against a public officer or employee at fault or who neglects to perform an act or discharge a duty required by law, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith; or enforce its disciplinary authority as provided in Section 21 of this Act: Provided, That the refusal by any officer without just cause to comply with an order of the Ombudsman to remove, suspend, demote, fine, censure or prosecute an officer or employee who is at fault or who neglects to perform an act or discharge a duty required by law shall be a ground for disciplinary action against said officer. xxxx

Section 19 of R.A. No. 6770 grants to the Ombudsman the authority to act on all administrative complaints: SEC. 19. Administrative Complaints. The Ombudsman shall act on all complaints relating, but not limited to acts or omissions which: (1) Are contrary to law or regulation; (2) Are unreasonable, unfair, oppressive or discriminatory; (3) Are inconsistent with the general course of an agencys functions, though in accordance with law; (4) Proceed from a mistake of law or an arbitrary ascertainment of facts; (5) Are in the exercise of discretionary powers but for an improper purpose; or (6) Are otherwise irregular, immoral or devoid of justification. In the exercise of his duties, the Ombudsman is given full administrative disciplinary authority. His power is not limited merely to receiving, processing complaints, or recommending penalties. He is to conduct investigations, hold hearings, summon witnesses and require production of evidence and place respondents under preventive suspension. This includes the power to impose the penalty of removal, suspension, demotion, fine, or censure of a public officer or employee.57 The provisions in R.A. No. 6770 taken together reveal the manifest intent of the lawmakers to bestow on the Office of the Ombudsman full administrative disciplinary authority. These provisions cover the entire gamut of administrative adjudication which entails the authority to, inter alia, receive complaints, conduct investigations, hold hearings in accordance with its rules of procedure, summon witnesses and require the production of documents, place under preventive suspension public officers and employees pending an investigation, determine the appropriate penalty imposable on erring public officers or employees as warranted by the evidence, and, necessarily, impose the said penalty.58 Thus, it is settled that the Office of the Ombudsman can directly imposeadministrative sanctions. We find it worthy to state at this point that public service requires integrity and discipline.1avvphi1 For this reason, public servants must exhibit at all times the highest sense of honesty and dedication to duty. By the very nature of their duties and responsibilities, public officers and employees must faithfully adhere to hold sacred and render inviolate the constitutional principle that a public office is a public trust; and must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency.59 WHEREFORE, the petitions for review on certiorari are DENIED. The assailed Decision dated January 18, 2006 and Resolution dated September 21, 2007 of the Court of Appeals in CA-G.R. SP. Nos. 86256, 86394 and 00047 are AFFIRMED with MODIFICATION. Petitioner Leonardo G. Olaivar is held administratively liable forDISHONESTY and meted the penalty of dismissal from the service as well as the accessory penalties inherent to said penalty.

With costs against petitioners. SO ORDERED FIRST DIVISION G.R. No. 166044 June 18, 2012

COUNTRY BANKERS INSURANCE CORPORATION, Petitioner, vs. KEPPEL CEBU SHIPYARD, UNIMARINE SHIPPING LINES, INC., PAUL RODRIGUEZ, PETER RODRIGUEZ, ALBERT HONTANOSAS, and BETHOVEN QUINAIN, Respondents. DECISION LEONARDO-DE CASTRO, J.: This is a petition for review on certiorari1 to reverse and set aside the January 29, 2004 Decision2 and October 28, 2004 Resolution3 of the Court of Appeals in CA-G.R. CV No. 58001, wherein the Court of Appeals affirmed with modification the February 10, 1997 Decision4 of the Regional Trial Court (RTC) of Cebu City, Branch 7, in Civil Case No. CBB-13447. Hereunder are the undisputed facts as culled from the records of the case. On January 27, 1992, Unimarine Shipping Lines, Inc. (Unimarine), a corporation engaged in the shipping industry, contracted the services of Keppel Cebu Shipyard, formerly known as Cebu Shipyard and Engineering Works, Inc. (Cebu Shipyard), for dry docking and ship repair works on its vessel, the M/V Pacific Fortune.5 On February 14, 1992, Cebu Shipyard issued Bill No. 26035 to Unimarine in consideration for its services, which amounted to P4,486,052.00.6 Negotiations between Cebu Shipyard and Unimarine led to the reduction of this amount to P3,850,000.00. The terms of this agreement were embodied in Cebu Shipyards February 18, 1992 letter to the President/General Manager of Unimarine, Paul Rodriguez, who signed his conformity to said letter, quoted in full below: 18 February 1992 Ref No.: LL92/0383 UNIMARINE SHIPPING LINES, INC. C/O Autographics, Inc. Gorordo Avenue, Lahug, Cebu City Attention: Mr. Paul Rodriguez President/General Manager This is to confirm our agreement on the shiprepair bills charged for the repair of MV Pacific Fortune, our invoice no. 26035.

The shiprepair bill (Bill No. 26035) is agreed at a negotiated amount of P3,850,000.00 excluding VAT. Unimarine Shipping Lines, Inc. ("Unimarine") will pay the above amount of [P3,850,000.00] in US Dollars to be fixed at the prevailing USDollar to Philippine Peso exchange rate at the time of payment. The payment terms to be extended to Unimarine is as follows: Installments 1st Installment 2nd Installment Amount P2,350,000.00 P1,500,000.00

payable in respect of certain works performed or to be performed by Cebu Shipyard and/or its subcontractors and/or material and equipment supplied or to be supplied by Cebu Shipyard and/or its subcontractors in connection with the vessel for the party specified in part C of the Schedule ("the Debtor"), we hereby unconditionally, irrevocably undertake to make punctual payment to Cebu Shipyard of the Moneys Payable on the terms and conditions as set out in part B of the Schedule. We likewise hereby expressly waive whatever right of excussion we may have under the law and equity.

Due Date This contract shall be binding upon Uni-Marine Shipping Lines, Inc., its heirs, executors, administrators, successors, and assigns and shall not be discharged until all obligation of this 30 May 1992 contract shall have been faithfully and fully performed by the Debtor.11 30 Jun 1992 Because Unimarine failed to remit the first installment when it became due on May 30, 1992, Cebu Shipyard was constrained to deposit the peso check corresponding to the initial installment of P2,350,000.00. The check, however, was dishonored by the bank due to insufficient funds.12 Cebu Shipyard faxed a message to Unimarine, informing it of the situation, and reminding it to settle its account immediately.13 On June 24, 1992, Cebu Shipyard again faxed a message14 to Unimarine, to confirm Paul Rodriguezs promise that Unimarine will pay in full the P3,850,000.00, in US Dollars on July 1, 1992. Since Unimarine failed to deliver on the above promise, Cebu Shipyard, on July 2, 1992, through a faxed letter, asked Unimarine if the payment could be picked up the next day. This was followed by another faxed message on July 6, 1992, wherein Cebu Shipyard reminded Unimarine of its promise to pay in full on July 28, 1992. On August 24, 1992, Cebu Shipyard again faxed15 Unimarine, to inform it that interest charges will have to be imposed on their outstanding debt, and if it still fails to pay before August 28, 1992, Cebu Shipyard will have to enforce payment against the sureties and take legal action. On November 18, 1992, Cebu Shipyard, through its counsel, sent Unimarine a letter, 16 demanding payment, within seven days from receipt of the letter, the amount of P4,859,458.00, broken down as follows:

Unimarine will deposit post-dated checks equivalent to the above amounts in Philippine Peso and an additional check amount of P385,000.00, representing 10% [Value Added Tax] VAT on the above bill of P3,850,000.00. In the event that Unimarine fails to make full payment on the above due dates in US Dollars, the post-dated checks will be deposited by CSEW in payment of the amounts owned by Unimarine and Unimarine agree that the 10% VAT (P385,000.00) shall also become payable to CSEW. Unimarine in consideration of the credit terms extended by CSEW and the release of the vessel before full payment of the above debt, agree to present CSEW surety bonds equal to 120% of the value of the credit extended. The total bond amount shall be P4,620,000.00. Yours faithfully, CEBU SHIPYARD & ENG'G WORKS, INC. (SGD) SEET KENG TAT Treasurer/VP-Admin. Conforme: (SGD) PAUL RODRIGUEZ Unimarine Shipping Lines, Inc.7

In compliance with the agreement, Unimarine, through Paul Rodriguez, secured from Country Bankers Insurance Corp. (CBIC), through the latters agent, Bethoven Quinain (Quinain), CBIC Surety Bond No. G (16) 294198 (the surety bond) on January 15, 1992 in the amount of P3,000,000.00. The expiration of this surety bond was extended to January 15, 1993, through Endorsement No. 331529 (the endorsement), which was later on attached to and formed part of the surety bond. In addition to this, Unimarine, on February 19, 1992, obtained another bond from Plaridel Surety and Insurance Co. (Plaridel), PSIC Bond No. G (16)-0036510 in the amount of P1,620,000.00. On February 17, 1992, Unimarine executed a Contract of Undertaking in favor of Cebu Shipyard. The pertinent portions of the contract read as follows: Messrs, Uni-Marine Shipping Lines, Inc. ("the Debtor") of Gorordo Avenue, Cebu City hereby acknowledges that in consideration of Cebu Shipyard & Engineering Works, Inc. ("Cebu Shipyard") at our request agreeing to release the vessel specified in part A of the Schedule ("name of vessel") prior to the receipt of the sum specified in part B of the Schedule ("Moneys Payable")

B#26035 MV PACIFIC FORTUNE LESS: ADJUSTMENT: CN#00515-03/19/92

4,486,052.00 (636,052.00) -------------------3,850,000.00

Add: VAT on repair bill no. 26035

385,000.00 -------------------4,235,000.00

Add: Interest/penalty charges: Debit Note No. 02381

189,888.00

Debit Note No. 02382

434,570.00 -------------------4,859,458.0017

Due to Unimarines failure to heed Cebu Shipyards repeated demands, Cebu Shipyard, through counsel, wrote the sureties CBIC18 on November 18, 1992, and Plaridel,19 on November 19, 1992, to inform them of Unimarines nonpayment, and to ask them to fulfill their obligations as sureties, and to respond within seven days from receipt of the demand. However, even the sureties failed to discharge their obligations, and so Cebu Shipyard filed a Complaint dated January 8, 1993, before the RTC, Branch 18 of Cebu City, against Unimarine, CBIC, and Plaridel. This was docketed as Civil Case No. CBB-13447. CBIC, in its Answer,20 said that Cebu Shipyards complaint states no cause of action. CBIC alleged that the surety bond was issued by its agent, Quinain, in excess of his authority. CBIC claimed that Cebu Shipyard should have doubted the authority of Quinain to issue the surety bond based on the following: 1. The nature of the bond undertaking (guarantee payment), and the amount involved. 2. The surety bond could only be issued in favor of the Department of Public Works and Highways, as stamped on the upper right portion of the face of the bond.21 This stamp was covered by documentary stamps. 3. The issuance of the surety bond was not reported, and the corresponding premiums were not remitted to CBIC.22 CBIC added that its liability was extinguished when, without its knowledge and consent, Cebu Shipyard and Unimarine novated their agreement several times. Furthermore, CBIC stated that Cebu Shipyards claim had already been paid or extinguished when Unimarine executed an Assignment of Claims23 of the proceeds of the sale of its vessel M/V Headline in favor of Cebu Shipyard. CBIC also averred that Cebu Shipyards claim had already prescribed as the endorsement that extended the surety bonds expiry date, was not reported to CBIC. Fina lly, CBIC asseverated that if it were held to be liable, its liability should be limited to the face value of the bond and not for exemplary damages, attorneys fees, and costs of litigation. 24

On August 23, 1993, third party defendant Hontanosas filed his Answer with Counterclaim, to the Cross and Third Party Complaint. Hontanosas claimed that he had no financial interest in Unimarine and was neither a stockholder, director nor an officer of Unimarine. He asseverated that his relationship to Unimarine was limited to his capacity as a lawyer, being its retained counsel. He further denied having any participation in the Indemnity Agreement executed in favor of CBIC, and alleged that his signature therein was forged, as he neither signed it nor appeared before the Notary Public who acknowledged such undertaking.29 Various witnesses were presented by the parties during the course of the trial of the case. Myrna Obrinaga testified for Cebu Shipyard. She was the Chief Accountant in charge of the custody of the documents of the company. She corroborated Cebu Shipyards allegations and produced in court the documents to support Cebu Shipyards claim. She also testified that while it was true that the proceeds of the sale of Unimarines vessel, M/V Headline, were assigned to Cebu Shipyard, nothing was turned over to them.30 Paul Rodriguez admitted that Unimarine failed to pay Cebu Shipyard for the repairs it did on M/V Pacific Fortune, despite the extensions granted to Unimarine. He claimed that he signed the Indemnity Agreement because he trusted Quinain that it was a mere pre-requisite for the issuance of the surety bond. He added that he did not bother to read the documents and he was not aware of the consequences of signing an Indemnity Agreement. Paul Rodriguez also alleged to not having noticed the limitation "Valid only in favor of DPWH" stamped on the surety bond.31 However, Paul Rodriguez did not contradict the fact that Unimarine failed to pay Cebu Shipyard its obligation.32 CBIC presented Dakila Rianzares, the Senior Manager of its Bonding Department. Her duties included the evaluation and approval of all applications for and reviews of bonds issued by their agents, as authorized under the Special Power of Attorney and General Agency Contract of CBIC. Rianzares testified that she only learned of the existence of CBIC Surety Bond No. G (16) 29419 when she received the summons for this case. Upon investigation, she found out that the surety bond was not reported to CBIC by Quinain, the issuing agent, in violation of their General Agency Contract, which provides that all bonds issued by the agent be reported to CBICs office within one week from the date of issuance. She further stated that the surety bond issued in favor of Unimarine was issued beyond Quinains authority. Rianzares added that she was not aware that an endorsement pertaining to the surety bond was also issued by Quinain. 33 After the trial, the RTC was faced with the lone issue of whether or not CBIC was liable to Cebu Shipyard based on Surety Bond No. G (16) 29419.34

On February 10, 1997, the RTC rendered its Decision, the fallo of which reads: Subsequently, CBIC filed a Motion to Admit Cross and Third Party Complaint 25 against Unimarine, as cross defendant; Paul Rodriguez, Albert Hontanosas, and Peter Rodriguez, as signatories to the Indemnity Agreement they executed in favor of CBIC; and Bethoven Quinain, as the agent who WHEREFORE, judgment is hereby rendered in favor of the plaintiff Cebu Shipyard & Engineering Works, Incorporated and against the defendants: issued the surety bond and endorsement in excess of his authority, as third party defendants. 26 CBIC claimed that Paul Rodriguez, Albert Hontanosas, and Peter Rodriguez executed an Indemnity Agreement, wherein they bound themselves, jointly and severally, to indemnify CBIC for any amount it may sustain or incur in connection with the issuance of the surety bond and the endorsement.27 As for Quinain, CBIC alleged that he exceeded his authority as stated in the Special Power of Attorney, wherein he was authorized to solicit business and issue surety bonds not exceeding P500,000.00 but only in favor of the Department of Public Works and Highways, National Power Corporation, and other government agencies.28 1. Ordering the defendants Unimarine Shipping Lines, Incorporated, Country Bankers Insurance Corporation and Plaridel Surety and Insurance Corporation to pay plaintiff jointly and severally the amount of P4,620,000.00 equivalent to the value of the surety bonds; 2. Ordering further defendant Unimarine to pay plaintiff the amount of P259,458.00 to complete its entire obligation of P4,859,458.00;

3. To pay plaintiff jointly and severally the amount of P100,000.00 in attorneys fees and litigation expenses; 4. For Cross defendant Unimarine Shipping Lines, Incorporated and Third party defendants Paul Rodriguez, Peter Rodriguez and Alber[t] Hontanosas: To indemnify jointly and severally, cross plaintiff and third party plaintiff Country Bankers Insurance Corporation whatever amount the latter is made to pay to plaintiff.35

WHEREFORE, in view of the foregoing, the respective appeal[s] filed by Defendants-Appellants Unimarine Shipping Lines, Inc. and Country Bankers Insurance Corporation; Cross-DefendantAppellant Unimarine Shipping Lines, Inc. and; Third-Party Defendants-Appellants Paul Rodriguez, Peter Rodriguez and Albert Hontanosas are hereby DENIED. The decision of the RTC in Civil Case No. CEB-13447 dated February 10, 1997 is AFFIRMED with modification that Mr. Bethoven Quinain, CBICs agent is hereby held jointly and severally liable with CBIC by virtue of Surety Bond No. 29419 executed in favor of plaintiff-appellee CSEW.41

In its decision, the Court of Appeals resolved the following issues, as it had summarized from the The RTC held that CBIC, "in its capacity as surety is bound with its principal jointly and severally to parties pleadings: the extent of the surety bond it issued in favor of [Cebu Shipyard]" because "although the contract of surety is in essence secondary only to a valid principal obligation, his liability to [the] creditor is said to be direct, primary[,] and absolute, in other words, he is bound by the principal." 36 The RTC I. Whether or not UNIMARINE is liable to [Cebu Shipyard] for a sum of money arising added: from the ship-repair contract; Solidary obligations on the part of Unimarine and CBIC having been established and expressly stated in the Surety Bond No. 29419 (Exh. "C"), [Cebu Shipyard], therefore, is entitled to collect and enforce said obligation against any and or both of them, and if and when CBIC pays, it can compel its co-defendant Unimarine to reimburse to it the amount it has paid.37 The RTC found CBICs contention that Quinain acted in excess of his authority in iss uing the surety bond untenable. The RTC held that CBIC is bound by the surety bond issued by its agent who acted within the apparent scope of his authority. The RTC said: [A]s far as third persons are concerned, an act is deemed to have been performed within the scope of the agents authority, if such act is within the terms of the powers of attorney as written, even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent.38 All the defendants appealed this Decision to the Court of Appeals. Unimarine, Paul Rodriguez, Peter Rodriguez, and Albert Hontanosas argued that Unimarines obligation under Bill No. 26035 had been extinguished by novation, as Cebu Shipyard had agreed to accept the proceeds of the sale of the M/V Headline as payment for the ship repair works it did on M/V Pacific Fortune. Paul Rodriguez and Peter Rodriguez added that such novation also freed them from their liability under the Indemnity Agreement they signed in favor of CBIC. Albert Hontanosas in turn reiterated that he did not sign the Indemnity Agreement. 39[SC1 CBIC, in its Appellants Brief,40 claimed that the RTC erred in enforcing its liability on the surety bond as it was issued in excess of Quinains authority. Moreover, CBIC averred, its liability under such surety had been extinguished by reasons of novation, payment, and prescription. CBIC also questioned the RTCs order, holding it jointly and severally liable with Unimarine and Plaridel for the amount of P4,620,000.00, a sum larger than the face value of CBIC Surety Bond No. G (16) 29419, and why the RTC did not hold Quinain liable to indemnify CBIC for whatever amount it was ordered to pay Cebu Shipyard. On January 29, 2004, the Court of Appeals promulgated its decision, with the following dispositive portion: II. Whether or not the obligation of UNIMARINE to [Cebu Shipyard] has been extinguished by novation; III. Whether or not Defendant-Appellant CBIC, allegedly being the Surety of UNIMARINE is liable under Surety Bond No. 29419[;] IV. Whether or not Cross Defendant-Appellant UNIMARINE and Third-Party Defendants-Appellants Paul Rodriguez, Peter Rodriguez, Albert Hontanosas and ThirdParty Defendant Bethoven Quinain are liable by virtue of the Indemnity Agreement executed between them and Cross and Third Party Plaintiff CBIC; V. Whether or not Plaintiff-Appellee [Cebu Shipyard] is entitled to the award of P100,000.00 in attorneys fees and litigation expenses.42 The Court of Appeals held that it was duly proven that Unimarine was liable to Cebu Shipyard for the ship repair works it did on the formers M/V Pacific Fortune. The Court of Appeals dismissed CBICs contention of novation for lack of merit.43 CBIC was held liable under the surety bond as there was no novation on the agreement between Unimarine and Cebu Shipyard that would discharge CBIC from its obligation. The Court of Appeals also did not allow CBIC to disclaim liability on the ground that Quinain exceeded his authority because third persons had relied upon Quinains representation, as CBICs agent.44 Quinain was, however, held solidarily liable with CBIC under Article 1911 of the Civil Code.45 Anent the liability of the signatories to the Indemnity Agreement, the Court of Appeals held Paul Rodriguez, Peter Rodriguez, and Albert Hontanosas jointly and severally liable thereunder. The Court of Appeals rejected Hontanosass claim that his signature in the Indemnity Agreement was forged, as he was not able to prove it.46 The Court of Appeals affirmed the award of attorneys fees and litigation expenses to Cebu Shipyard since it was able to clearly establish the defendants liability, which they tried to dodge by setting up defenses to release themselves from their obligation.47 CBIC48and Unimarine, together with third party defendants-appellants49 filed their respective Motions for Reconsideration. This was, however, denied by the Court of Appeals in its October 28, 2004 Resolution for lack of merit.

Unimarine elevated its case to this Court via a petition for review on certiorari, docketed as G.R. No. 166023, which was denied in a Resolution dated January 19, 2005. 50 The lone petitioner in this case, CBIC, is now before this Court, seeking the reversal of the Court of Appeals decision and resolution on the following grounds: A.

CBIC claims that the foregoing is true even if Quinain was granted the authority to transact in the business of insurance in general, as "the authority to bind the principal in a contract of suretyship could nonetheless never be presumed."53 Thus, CBIC claims, that: [T]hird persons seeking to hold the principal liable for transactions entered into by an agent should establish the following, in case the same is controverted: 6.6.1. The fact or existence of the agency.

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN APPLYING THE PROVISIONS OF ARTICLE 1911 OF THE CIVIL CODE TO HOLD PETITIONER LIABLE FOR THE ACTS DONE BY ITS AGENT IN EXCESS OF AUTHORITY. B. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT AN EXTENSION OF THE PERIOD FOR THE PERFORMANCE OF AN OBLIGATION GRANTED BY THE CREDITOR TO THE PRINCIPAL DEBTOR IS NOT SUFFICIENT TO RELEASE THE SURETY. C.

6.6.2. The nature and extent of authority.54 To go a little further, CBIC said that the correct Civil Code provision to apply in this case is Article 1898. CBIC asserts that "Cebu Shipyard was charged with knowledge of the extent of the authority conferred on Mr. Quinain by its failure to perform due diligence investigations."55 Cebu Shipyard, in its Comment56 first assailed the propriety of the petition for raising factual issues. In support, Cebu Shipyard claimed that the Court of Appeals application of Article 1911 of the Civil Code was founded on findings of facts that CBIC now disputes. Thus, the question is not purely of law. Discussion

ASSUMING THAT PETITIONER IS LIABLE UNDER THE BOND, THE HONORABLE COURT OF APPEALS NONETHELESS SERIOUSLY ERRED IN AFFIRMING THE SOLIDARY LIABILITY OF PETITIONER BEYOND THE VALUE OF THE BOND. D. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING PETITIONER JOINTLY AND SEVERALLY LIABLE FOR ATTORNEYS FEES IN THE AMOUNT OF P100,000.00.51 Issue

The fact that Quinain was an agent of CBIC was never put in issue. What has always been debated by the parties is the extent of authority or, at the very least, apparent authority, extended to Quinain by CBIC to transact insurance business for and in its behalf. In a contract of agency, a person, the agent, binds himself to represent another, the principal, with the latters consent or authority.57 Thus, agency is based on representation, where the agent acts for and in behalf of the principal on matters within the scope of the authority conferred upon him.58 Such "acts have the same legal effect as if they were personally done by the principal. By this legal fiction of representation, the actual or legal absence of the principal is converted into his legal or juridical presence."59

The RTC applied Articles 1900 and 1911 of the Civil Code in holding CBIC liable for the surety bond. It held that CBIC could not be allowed to disclaim liability because Quinains actions were within the terms of the special power of attorney given to him.60 The Court of Appeals agreed that CBIC could not be permitted to abandon its obligation especially since third persons had relied on Quinains representations. It based its decision on Article 1911 of the Civil Code and found CBIC CBIC avers that the Court of Appeals erred in interpreting and applying the rules governing the to have been negligent and less than prudent in conducting its insurance business for its failure to contract of agency. It argued that the Special Power of Attorney granted to Quinain clearly set forth supervise and monitor the acts of its agents, to regulate the distribution of its insurance forms, and the extent and limits of his authority with regard to businesses he can transact for and in behalf of to devise schemes to prevent fraudulent misrepresentations of its agents. 61 CBIC. CBIC added that it was incumbent upon Cebu Shipyard to inquire and look into the power of authority conferred to Quinain. CBIC said: This Court does not agree. Pertinent to this case are the following provisions of the Civil Code: The crux of the controversy lies in CBICs liability on the surety bond Quinain issued to Unimarine, in favor of Cebu Shipyard. The authority to bind a principal as a guarantor or surety is one of those powers which requires a Special Power of Attorney pursuant to Article 1878 of the Civil Code. Such power could not be simply assumed or inferred from the mere existence of an agency. A person who enters into a contract of suretyship with an agent without confirming the extent of the latters authority does so at his peril. x x x.52 Art. 1898. If the agent contracts in the name of the principal, exceeding the scope of his authority, and the principal does not ratify the contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable if he undertook to secure the principals ratification.

10

Art. 1900. So far as third persons are concerned, an act is deemed to have been performed within the scope of the agents authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent. Art. 1902. A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency. Private or secret orders and instructions of the principal do not prejudice third persons who have relied upon the power of attorney or instructions shown to them. Art. 1910. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority.

2. To accept, underwrite and subscribe policies of insurance for and in behalf of the Company under the terms and conditions specified in the General Agency Contract executed and entered into by and between it and its said Attorney-in-Fact subject to the following Schedule of Limits: - SCHEDULE OF LIMITS a. FIRE: xxxx b. PERSONAL ACCIDENT:

As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly. Art. 1911. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. Our law mandates an agent to act within the scope of his authority. 62 The scope of an agents authority is what appears in the written terms of the power of attorney granted upon him. 63 Under Article 1878(11) of the Civil Code, a special power of attorney is necessary to obligate the principal as a guarantor or surety. In the case at bar, CBIC could be held liable even if Quinain exceeded the scope of his authority only if Quinains act of issuing Surety Bond No. G (16) 29419 is deemed to have been performed within the written terms of the power of attorney he was granted. 64 c. MOTOR CAR:

xxxx

xxxx d. MARINE: xxxx e. BONDS:

xxxx However, contrary to what the RTC held, the Special Power of Attorney accorded to Quinain clearly states the limits of his authority and particularly provides that in case of surety bonds, it can Surety Bond (in favor of Dept. of Pub. Works and only be issued in favor of the Department of Public Works and Highways, the National Power Highways, Natl. Power Corp. & other. 500,000.00 Corporation, and other government agencies; furthermore, the amount of the surety bond is limited Government agencies)65 to P500,000.00, to wit: SPECIAL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That, COUNTRY BANKERS INSURANCE CORPORATION, a corporation duly organized and existing under and by virtue of the laws of the Philippines, with head offices at 8th Floor, G.F. Antonino Building, T.M. Kalaw Street, Ermita, Manila, now and hereinafter referred to as "the Company" hereby appoints BETHOVEN B. QUINAIN with address at x x x to be its General Agent and Attorney-in-Fact, for and in its place, name and stead, and for its own use and benefit, to do and perform the following acts and things: 1. To conduct, manage, carry on and transact insurance business as usually pertains to a General Agency of Fire, Personal Accident, Bond, Marine, Motor Car (Except Lancer). CBIC does not anchor its defense on a secret agreement, mutual understanding, or any verbal instruction to Quinain. CBICs stance is grounded on its contract with Quinain, and the clear, written terms therein. This Court finds that the terms of the foregoing contract specifically provided for the extent and scope of Quinains authority, and Quinain has indeed exceeded them. Under Articles 1898 and 1910, an agents act, even if done beyond the scope of his authority, may bind the principal if he ratifies them, whether expressly or tacitly. It must be stressed though that only the principal, and not the agent, can ratify the unauthorized acts, which the principal must have knowledge of.66 Expounding on the concept and doctrine of ratification in agency, this Court said: Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority. The substance of the doctrine is confirmation after conduct, amounting to a substitute for a prior authority. Ordinarily, the principal must have full knowledge at the time of ratification of all the material facts and circumstances relating to the unauthorized act of the person who assumed to act as agent. Thus, if material facts were suppressed or unknown,

11

there can be no valid ratification and this regardless of the purpose or lack thereof in concealing such facts and regardless of the parties between whom the question of ratification may arise. Nevertheless, this principle does not apply if the principals ignorance of the material facts and circumstances was willful, or that the principal chooses to act in ignorance of the facts. However, in the absence of circumstances putting a reasonably prudent man on inquiry, ratification cannot be implied as against the principal who is ignorant of the facts.67 (Emphases supplied.) Neither Unimarine nor Cebu Shipyard was able to repudiate CBICs testimony that it was unaware of the existence of Surety Bond No. G (16) 29419 and Endorsement No. 33152. There were no allegations either that CBIC should have been put on alert with regard to Quinains business transactions done on its behalf. It is clear, and undisputed therefore, that there can be no ratification in this case, whether express or implied. Article 1911, on the other hand, is based on the principle of estoppel, which is necessary for the protection of third persons. It states that the principal is solidarily liable with the agent even when the latter has exceeded his authority, if the principal allowed him to act as though he had full powers. However, for an agency by estoppel to exist, the following must be established: 1. The principal manifested a representation of the agents authority or knowingly allowed the agent to assume such authority; 2. The third person, in good faith, relied upon such representation; and 3. Relying upon such representation, such third person has changed his position to his detriment.68 In Litonjua, Jr. v. Eternit Corp.,69 this Court said that "[a]n agency by estoppel, which is similar to the doctrine of apparent authority, requires proof of reliance upon the representations, and that, in turn, needs proof that the representations predated the action taken in reliance." 70 This Court cannot agree with the Court of Appeals pronouncement of negligence on CBICs part. CBIC not only clearly stated the limits of its agents powers in their contracts, it even stamped its surety bonds with the restrictions, in order to alert the concerned parties. Moreover, its company procedures, such as reporting requirements, show that it has designed a system to monitor the insurance contracts issued by its agents. CBIC cannot be faulted for Quinains deliberate failure to notify it of his transactions with Unimarine. In fact, CBIC did not even receive the premiums paid by Unimarine to Quinain. Furthermore, nowhere in the decisions of the lower courts was it stated that CBIC let the public, or specifically Unimarine, believe that Quinain had the authority to issue a surety bond in favor of companies other than the Department of Public Works and Highways, the National Power Corporation, and other government agencies. Neither was it shown that CBIC knew of the existence of the surety bond before the endorsement extending the life of the bond, was issued to Unimarine. For one to successfully claim the benefit of estoppel on the ground that he has been misled by the representations of another, he must show that he was not misled through his own want of reasonable care and circumspection.71 It is apparent that Unimarine had been negligent or less than prudent in its dealings with Quinain. In Manila Memorial Park Cemetery, Inc. v. Linsangan,72 this Court held:

It is a settled rule that persons dealing with an agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. If he does not make such an inquiry, he is chargeable with knowledge of the agents authority and his ignorance of that authority will not be any excuse. In the same case, this Court added: [T]he ignorance of a person dealing with an agent as to the scope of the latters authority is no excuse to such person and the fault cannot be thrown upon the principal. A person dealing with an agent assumes the risk of lack of authority in the agent. He cannot charge the principal by relying upon the agents assumption of authority that proves to be unfounded. The principal, on the other hand, may act on the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority as well as the existence of his agency. 73 Unimarine undoubtedly failed to establish that it even bothered to inquire if Quinain was authorized to agree to terms beyond the limits indicated in his special power of attorney. While Paul Rodriguez stated that he has done business with Quinain more than once, he was not able to show that he was misled by CBIC as to the extent of authority it granted Quinain. Paul Rodriguez did not even allege that he asked for documents to prove Quinains authority to contract business for CBIC, such as their contract of agency and power of attorney. It is also worthy to note that even with the Indemnity Agreement, Paul Rodriguez signed it on Quinains mere assurance and without truly understanding the consequences of the terms of the said agreement. Moreover, both Unimarine and Paul Rodriguez could have inquired directly from CBIC to verify the validity and effectivity of the surety bond and endorsement; but, instead, they blindly relied on the representations of Quinain. As this Court held in Litonjua, Jr. v. Eternit Corp.74: A person dealing with a known agent is not authorized, under any circumstances, blindly to trust the agents; statements as to the extent of his powers; such person must not act negligently but must use reasonable diligence and prudence to ascertain whether the agent acts within the scope of his authority. The settled rule is that, persons dealing with an assumed agent are bound at their peril, and if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to prove it. In this case, the petitioners failed to discharge their burden; hence, petitioners are not entitled to damages from respondent EC.75 In light of the foregoing, this Court is constrained to release CBIC from its liability on Surety Bond No. G (16) 29419 and Endorsement No. 33152. This Court sees no need to dwell on the other grounds propounded by CBIC in support of its prayer. WHEREFORE, this petition is hereby GRANTED and the complaint against CBIC is DISMISSED for lack of merit. The January 29, 2004 Decision and October 28, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 58001 is MODIFIED insofar as it affirmed CBICs liability on Surety Bond No. G (16) 29419 and Endorsement No. 33152. SO ORDERED. SECOND DIVISION

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G.R. No. 151038

January 18, 2012

PETRON CORPORATION, Petitioner, vs. Spouses CESAR JOVERO and ERMA F. CUDILLA, Spouses LONITO TAN and LUZVILLA SAMSON, and Spouses ROGELIO LIMPOCO and LUCIA JOSUE, being represented by PIO JOSUE, Respondents. DECISION SERENO, J.: The present case is a Petition for Review1 under Rule 45 filed by petitioner Petron Corporation. Petitioner assails the Decision2 of the Court of Appeals (CA), which affirmed the Decision of the Regional Trial Court (RTC) of Iloilo City in consolidated Civil Case Nos. 19633, 19684, 20122, respectively filed by herein respondents. The facts of the case are as follows: On 25 April 1984, Rubin Uy entered into a Contract of Lease with Cesar J. Jovero over a property located at E. Reyes Ave., Estancia, Iloilo for the purpose of operating a gasoline station for a period of five (5) years. On 30 April 1984, petitioner, a domestic corporation engaged in the importation and distribution of gasoline and other petroleum products, entered into a Retail Dealer Contract 3 with Rubin Uy for the period 1 May 1984 to 30 April 1989. Under the dealership contract, petitioner sold its products in quantities as ordered by the dealer. It likewise obligated itself to deliver the products to the dealer at the places agreed upon by the parties. The dealer, meanwhile, obligated himself to exclusively maintain petitioners trademarks and brand names in his gasoline station. The parties also agreed that the dealer shall make good, settle and pay, and hold petitioner harmless against all losses and claims including those of the parties, their agents and employees for death, personal injury or property damage arising out of any use or condition of the dealers premises or the equipment and facilities thereon, regardless of any defects therein; the dealers nonperformance of the contract; or the storage and handling of products on the premises. In order to comply with its obligation to deliver the petroleum products to the dealer, petitioner contracted the hauling services of Jose Villaruz, who did business under the name Gale Freight Services. The hauling contract4was executed in March 1988 for a period of three years, renewable for another three upon agreement of the parties. Under the hauling contract, Villaruz specifically assigned three (3) units of tank trucks exclusively for the hauling requirements of petitioner for the delivery of the latters products, namely tank trucks with the plate numbers FVG 605, FVG 581 and FVG 583. Delivery "includes not only transportation but also proper loading and unloading and delivery."5 The parties also agreed that Villaruz shall save petitioner from any and all claims of third persons arising out of, but not necessarily limited to, his performance of the terms and conditions of the contract. Furthermore, Villaruz obligated himself to be answerable to petitioner for damage to its plant, equipment and facilities, including those of its employees, dealers and customers, resulting from his negligence and/or lack of diligence.

Meanwhile, on 27 October 1988, Rubin Uy executed a Special Power of Attorney (SPA) in favor of Chiong Uy authorizing the latter to manage and administer the gasoline station. Chiong Uy and his wife, Dortina M. Uy, operated the gasoline station as agents of Rubin Uy. However, on 27 November 1990, Chiong Uy left for Hong Kong, leaving Dortina Uy to manage the gasoline station. On 3 January 1991, around ten oclock in the morning, Ronnie Allanaraiz, an employee of the gasoline station, ordered from petitioner various petroleum products. Petitioner then requested the services of Villaruz for the delivery of the products to the gasoline station in Estancia, Iloilo. He, however, used a tank truck different from the trucks specifically enumerated in the hauling contract executed with petitioner. Petitioner nevertheless allowed the transport and delivery of its products to Estancia in the tank truck driven by Pepito Igdanis. During the unloading of the petroleum from the tank truck into the fill pipe that led to the gasoline stations underground tank, for reasons unknown, a fire started in the fill pipe and spread to the rubber hose connected to the tank truck. During this time, driver Pepito Igdanis was nowhere to be found. Bystanders then tried to put out the flames. It was then that Igdanis returned to the gasoline station with a bag of dried fish in hand. Seeing the fire, he got into the truck without detaching the rubber hose from the fill pipe and drove in reverse, dragging the burning fuel hose along the way. As a result, a conflagration started and consumed the nearby properties of herein defendants, spouses Cesar J. Jovero and Erma Cudilla-Jovero, amounting to P1,500,000; of spouses Leonito Tan and Luzvilla Samson, amounting to P800,000; and of spouses Rogelio Limpoco and Lucia Josue Limpoco, amounting to P4,112,000. Herein respondents thereafter filed separate actions for damages against petitioner, Villaruz, Rubin Uy, and Dortina Uy, docketed as Civil Case Nos. 19633, 19684 and 20122 at the Regional Trial Court (RTC) of Iloilo City. The cases, having arisen from the same set of facts, were subsequently consolidated. Respondents alleged that the negligence of petitioner and its codefendants in the conduct of their businesses caused the fire that destroyed the formers properties. In its separate Answer, petitioner Petron alleged that the petroleum products were already paid for and owned by Rubin Uy and Dortina Uy. Moreover, it alleged that Villaruz was responsible for the safe delivery of the products by virtue of the hauling contract. Thus, petitioner asserted, liability for the damages caused by the fire rested on Rubin Uy and Villaruz. Petitioner likewise filed a crossclaim against its co-defendants for contribution, indemnity, subrogation, or other reliefs for all expenses and damages that it may have suffered by virtue of the incident. It also filed a counterclaim against respondents herein. On 27 April 1998, after trial on the merits, the RTC rendered its Decision in favor of respondents and found petitioner and its co-defendants solidarily liable for damages. The dispositive portion of the Decision states: WHEREFORE, in view of the foregoing, DECISION is hereby rendered: 1. Declaring defendants Petron Corporation, Jose Villaruz, Pepito Igdanis, Rubin Uy and Dortina Uy as being negligent in the conduct of their business activities, which led to the conflagration of January 3, 1991 at E. Reyes Avenue, Estancia, Iloilo, which resulted to (sic) the damages suffered by all the plaintiffs; Ordering all the aforenamed defendants to pay solidarily all the plaintiffs as follows:

2.

13

1.

2.

3.

In Civil Case No. 19633, plaintiffs-spouses Cesar J. Jovero and Erma CudillaJovero the amount ofP1,500,00.00 as actual damages; P2,000.00 as litigation expenses; P4,000.00 as attorneys fees, and to pay the costs; In Civil Case No. 19684, to pay plaintiffs-spouses Leonito Tan and Luzvilla Samson the sum ofP800,000.00 as actual damages, P2,000.00 as litigation expenses; P4,000.00 as attorneys fees and to pay the costs; In Civil Case No. 20122, to pay the plaintiffs-spouses Rogelio C. Limpoco and Lucia Josue Limpoco the amount of P4,112,000.00 as actual damages; P2,000.00 as litigation expenses; P5,000.00 as attorneys fees, and to pay the costs.

Meanwhile, defendant Villaruz allegedly proved during trial that he had exercised diligence in the selection and supervision of his employees and, thus, he was not responsible for the damages caused by the fire. In addition, he alleged that Igdanis, whom respondents failed to implead as a defendant in the lower court, did not have a chance to defend himself. Since there was no showing that any act or omission of Igdanis was the proximate cause of the fire, Villaruz insisted that the latter himself could not be held liable for the acts of his employee, who was not even impleaded or proven to be negligent. Dortina Uy, in her appeal, alleged that she had no direct participation in the management or administration of the gasoline station. She also alleged that she was not the employer of Igdanis, the driver of the tank truck who had caused the fire to spread in the vicinity. Since defendant Rubin Uy failed to file his Appellants Brief within the reglementary period, the CA dismissed his appeal.7

The counter-claims of the defendants against all the plaintiffs are hereby dismissed. The cross-claims of the defendants against each other are likewise dismissed as they are all in "pari delicto". SO ORDERED.6

Respondents, meanwhile, maintained that petitioner Petron was negligent in selling and storing its products in a gasoline station without an existing dealers contract from May 1989 up to the time of the incident on 3 January 1991. They contended that petitioner, in effect, was itself operating the gasoline station, with the dealer as mere agent of the former. Respondents also insisted that The RTC held that Igdanis, as the driver of the tank truck, was negligent in the performance of his petitioner had the obligation to ensure that the gasoline station was safe and properly maintained, work when he left the tank truck while it was in the process of unloading the petroleum. He was considering the products stored and sold there. Likewise, they asserted that petitioner was also negligent when he drove the truck in reverse without detaching the burning fuel hose. The trial responsible for the safe delivery and proper storage of its goods in the gasoline station, and that court stated that defendant Villaruz failed to convince the court that he had exercised due diligence this responsibility would cease only when the goods had been sold to the end consumer. in the hiring and supervision of his employees. The RTC likewise held that petitioner was negligent in allowing Villaruz to use a tank truck that was not included among the trucks specifically enumerated under the hauling contract. Finally, the court ruled that the gasoline station was owned and operated by Rubin Uy and Dortina Uy at the time of the incident. Petitioner and co-defendants Dortina Uy and Rubin Uy thereafter filed their separate Notices of Appeal. Petitioner, in its appeal, insisted that it had already sold and transferred ownership of its petroleum products to the dealer, Rubin Uy, upon payment and receipt of these products at its depot. Thus, it asserted, it ceased to own the products even during transit and while being unloaded at the gasoline station. It also stated that the transportation, delivery, receipt and storage of the petroleum products were solely the responsibility of hauler Villaruz, who was neither an employee nor an agent of petitioner. It reiterated that liability rested on Rubin Uy and Villaruz pursuant to the respective contracts it had executed with them. Petitioner also alleged that the RTC erred in ruling that the former was negligent in allowing the use of a tank truck not specified in the hauling contract. Petitioner thus insisted that it had examined the tank truck and found it to be in good condition. It added that, since the fire did not originate from the tank truck, the proximate cause of the fire was not attributable to any defect in the truck. Finally, petitioner alleged that respondents failed to prove that the damages they suffered were the direct result of any culpable act or omission on its part. Additionally, respondents contended that petitioner Petron was also negligent when the latter allowed the use of an unaccredited truck in violation of its hauling contract with Villaruz. On 12 December 2001, the CA promulgated its Decision affirming that of the trial court, to wit: WHEREFORE, premises considered, the instant appeals are DISMISSED and the assailed consolidated Decision of the court a quo dated 27 April 1998 in Civil Case Nos. 19633, 19684 and 20122 is AFFIRMED in all respects. Costs against appellants. SO ORDERED.8 The appellate court upheld the findings of the RTC that petitioner Petron was negligent for having allowed the operation of the gasoline station absent a valid dealership contract. Thus, the CA considered the gasoline station as one run by petitioner itself, and the persons managing the gasoline station as petitioners mere agents. Even if a valid dealership contract existed, petitioner was still liable for damages, because there was as yet no complete delivery of its products. The fire had broken out while petroleum was being unloaded from the tank truck to the storage tank. The CA further held that petitioner was also negligent in allowing Villaruz to use an unaccredited tank truck for the transport and delivery of the petroleum at the time of the incident. With regard to the liability of Villaruz, the appellate court found him to be negligent in the conduct of his business. Thus, he was made liable for the damages caused by his employee in accordance with Article 2180 in relation to Article 2176 of the Civil Code.

14

Finally, with regard to Dortina Uy, the CA held that, as one of the operators of the gasoline station, she failed to submit evidence that she had exercised due diligence in the operation thereof. Dissatisfied with the CAs ruling, petitioner is now before us with the present Petition for Review. Petitioner presents the following issues for the resolution of this Court: 1. Whether or not Petron may be considered at fault for continuing to do business with Rubin Uy, an independent petroleum dealer, without renewing or extending their expired dealership agreement; Whether or not a causal connection exists between Petrons failure to renew or extend its dealership contract with Rubin Uy and the fire that inflicted damages on the buildings surrounding the latters gas station; Whether or not Petron is liable for the fire that occurred during the unloading by an independent hauler of the fuel it sold to an equally independent dealer at the latters gas station; and Whether or not a supplier of fuel can be held liable for the neglect of others in distributing and storing such fuel. 9

We first discuss the liability of petitioner in relation to the dealership contract. Petitioner, as an importer and a distributer of gasoline and other petroleum product, executed with a dealer of these products an exclusive dealership agreement for mutual benefit and gain. On one hand, petitioner benefits from the sale of its products, as well as the advertisement it gains when it broadens its geographical coverage in contracting with independent dealers in different areas. The products sold and the services rendered by the dealer also contribute to its goodwill. Thus, despite the transfer of ownership upon the sale and delivery of its products, petitioner still imposes the obligation on the dealer to exclusively carry its products. The dealer also benefits from the dealership agreement, not only from the resale of the products of petitioner, but also from the latters goodwill. However, with the use of its trade name and trademark, petitioner and the dealer inform and guarantee to the public that the products and services are of a particular standard or quality. More importantly, the public, which is not privy to the dealership contract, assumes that the gasoline station is owned or operated by petitioner. Thus, respondents, who suffered damages from the act or omission that occurred in the gasoline station and that caused the fire, may file an action against petitioner based on the representations it made to the public. As far as the public is concerned, it is enough that the establishment carries exclusively the name and products of petitioner to assume that the latter is liable for acts done within the premises. Second, respondents have a claim against petitioner based on the dealership agreement. The RTC and the CA ruled that, by virtue of the expiration of the dealership contract, the dealer was relegated to being petitioners agent. On this point, we agree with petitioner that the expiration or nonexistence of a dealership contract did not ipso facto transform the relationship of the dealer and petitioner into one of agency. As far as the parties to the dealership contract were concerned, the rights and obligations as to them still subsisted, since they continued to mutually benefit from the agreement. Thus, neither party can claim that it is no longer bound by the terms of the contract and the expiration thereof. We then judiciously reviewed the terms of the contract and found that petitioner is liable to respondents for the damages caused by the fire. As petitioner itself points out, it owns the equipment relevant to the handling and storage of gasoline, including the gasoline pumps and the underground tank. 10 It is also responsible for the delivery of the petroleum to the dealer. The incident occurred at the time the petroleum was being unloaded to the underground tank petitioner owned. Aside from failing to show the actual cause of the fire, it also failed to rebut the presumption that it was negligent in the maintenance of its properties and in the conduct of its business. Petitioner contends that under paragraph 8 of the dealership contract, the dealers liability is as follows: LOSSES AND CLAIMS. BUYER shall make good, settle and pay, and hold SELLER harmless against all losses and claims (including those of the parties, their agents and employees) for death, personal injury or property arising out of (1) any use or condition of BUYERs premises or the equipment and facilities thereon, regardless of any defects therein (2) BUYERs non performance of this contract, or (3) the storage and handling of products on the premises.

2.

3.

4.

In the present case, petitioner does not implead its co-defendants Villaruz, Rubin Uy and Dortina Uy. Neither does it assail the dismissal by the lower courts of the cross-claim or counterclaim it filed against its co-defendants and herein respondents, respectively. Nor is there any question on respondents right to claim damages. Petitioner merely prays for absolution from liability resulting from the fire by claiming that it had no direct participation in the incident. In support of the issues raised above, petitioner contends that, first, there was an implied renewal of the dealership contract Rubin Uy remained as the operator of the gasoline station. It further contends that there is no law supporting the conclusion of the CA that, upon expiration of the contract, the dealer automatically became the suppliers agent. Second, petitioner asserts that there was no rational link between its alleged neglect in renewing the dealership agreement and the act that caused the fire. Third, petitioner insists that ownership of the petroleum products was transferred when the dealers representative, Ronnie Allanaraiz, went to petitioners oil depot, bought and paid for the gasoline, and had Villaruzs tank truck receive the products for delivery. Moreover, petitioner points out, neither Igdanis nor Villaruz was its employee and, thus, it cannot be held vicariously liable for the damages to respondents caused by Igdanis. Furthermore, it asserted that the tank truck transporting the petroleum though not included in the enumeration in the hauling contract had complied with the standards required of Villaruz. Petitioner also alleges that there was no evidence that the fire was attributable to its distribution and storage safety measures. Finally, petitioner states that both hauler and dealer must bear the costs of their acts and those of their employees, considering that this was an explicit provision in their respective contracts with it. The Petition has some merit.

15

While both parties to the contract have the right to provide a clause for non-liability, petitioner admits that they both share the maintenance of its equipment. Petitioner states that its responsibility extended to "the operating condition of the gasoline station, e.g. whether the fuel pumps were functioning properly."11 Moreover, it cannot be denied that petitioner likewise obligated itself to deliver the products to the dealer. When the incident occurred, petitioner, through Gale Freight Services, was still in the process of fulfilling its obligation to the dealer. We disagree with its contention that delivery was perfected upon payment of the goods at its depot. There was yet no complete delivery of the goods as evidenced by the aforementioned hauling contract petitioner executed with Villaruz. That contract made it clear that delivery would only be perfected upon the complete unloading of the gasoline. Thus, with regard to the delivery of the petroleum, Villaruz was acting as the agent of petitioner Petron. For a fee, he delivered the petroleum products on its behalf. Notably, petitioner even imposed a penalty clause in instances when there was a violation of the hauling contract, wherein it may impose a penalty ranging from a written warning to the termination of the contract. Therefore, as far as the dealer was concerned with regard to the terms of the dealership contract, acts of Villaruz and his employees are also acts of petitioner. Both the RTC and the CA held that Villaruz failed to rebut the presumption that the employer was negligent in the supervision of an employee who caused damages to another; and, thus, petitioner should likewise be held accountable for the negligence of Villaruz and Igdanis.

2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Manhole covers Manhole cover gasket Product level markers Manhole cover pins NIST Calibration and scale Discharge valves (quick closing) Front Fenders Door glasses ________ (illegible) glasses Windshield Wipers Horn Floor matting Ceiling Seats (Illegible) Air hose connector

To reiterate, petitioner, the dealer Rubin Uy acting through his agent, Dortina Uy shared the responsibility for the maintenance of the equipment used in the gasoline station and for making sure that the unloading and the storage of highly flammable products were without incident. As both were equally negligent in those aspects, petitioner cannot pursue a claim against the dealer Petitioner maintains that by virtue of the hauling contract, Villaruz must be held responsible for the for the incident. Therefore, both are solidarily liable to respondents for damages caused by the fire. acts of Igdanis, the driver of the tank truck. In this aspect, petitioner is correct. While it may be vicariously liable to third persons for damages caused by Villaruz, the latter is nevertheless liable to petitioner by virtue of the non-liability clause in the hauling contract. Under this provision, he Petitioner was likewise negligent in allowing a tank truck different from that specifically provided under its hauling contract with Villaruz. The enumeration and specification of particular tank trucks saved petitioner from any and all claims of third persons arising out of, but not necessarily limited to, his performance of the terms and conditions of this agreement. Petitioner even obligated him to in the contract serve a purpose to ensure the safe transportation, storage and delivery of highly maintain an acceptable Merchandise Floater Policy to provide insurance coverage for the products flammable products. Under the hauling contract, these requirements are as follows: 12 entrusted to him; and a Comprehensive General Liability Insurance to cover any and all claims for damages for personal injury, including death or damages to property, which may arise from 1. Duly registered under the hired truck (TH) classification and subject to the rules and operations under the contract.15 regulations of Land Transportation Commission (LTC) and Board of Transportation (BOT). Thus, Villaruz is also liable to petitioner based on the hauling contract. Under Rule 6, Sec. 8 of the 2. Properly sealed and calibrated in accordance with the requirements of NSTA. Rules of Court, petitioner may enforce the terms of the hauling contract against him. However, 3. Equipped with safety and other auxiliary equipment as specified by PETROPHIL considering that it did not implead Villaruz in the present case, nor did it assail the Decision of the (Petron) as per attached Annex "8".13 CA in dismissing the cross-claim, petitioner can no longer go after him based on that cross-claim. 4. Provided with fire permits and other permits required by the government authorities. 5. In good working condition and in good appearance at all times, 6. Fully complying with the tank truck color scheme, standard truck number, bumper Nonetheless, this is not the same as saying that Villaruz is no longer solidarily liable to stripes, haulers name on cab door, and such other similar requirements for good respondents. appearance as may be required by PETROPHIL. Annex "B" attached to the contract, which refers to the tank truck safety and accessories equipment, likewise provides that the following are the specified safety equipment and other accessories for tank truck operations:14 1. Fire extinguisher, Type B & C As the employer of Igdanis, Villaruz was impleaded by herein respondents in the lower court and was found to be solidarily liable with his other co-defendants. Absent an appeal before this Court assailing the ruling of the lower court and the CA, Villaruz remains to be solidarily liable with petitioner and co-defendants Rubin Uy and Dortina Uy. Thus, petitioner may only claim contribution from him in accordance with Article 1217 of the Civil Code, and not by virtue of its

With respect to the claims of third persons, it is not enough for petitioner to allege that the tank truck met the same requirements provided under the contract; it must duly prove its allegations. This, petitioner failed to do. To reiterate, it was not able to prove the proximate cause of the fire, only the involvement of the tank truck and the underground storage tank. Notably, both pieces of equipment were under its responsibility. Absent any positive determination of the cause of the fire, a presumption exists that there was something wrong with the truck or the underground storage tank, or both. Petitioner, which had the obligation to ensure that the truck was safe, is likewise liable for the operation of that truck.

16

hauling contract, in the event that respondents decide to proceed against petitioner alone for the satisfaction of judgment. Art. 1217 states: Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept. He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. (Emphasis supplied) The share, meanwhile, of solidary debtors is contained in Art. 1208, to wit: If from the law, or the nature of the wording of the obligations to which the preceding article refers the contrary does not appear, the credit of debt shall be presumed to be divided into as many equal shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits. (Emphasis supplied) To put it simply, based on the ruling of the lower courts, there are four (4) persons who are liable to pay damages to respondents. The latter may proceed against any one of the solidary debtors or some or all of them simultaneously, pursuant to Article 1216 of the Civil Code. These solidary debtors are petitioner Petron, the hauler Villaruz, the operator Dortina Uy and the dealer Rubin Uy. To determine the liability of each defendant to one another, the amount of damages shall be divided by four, representing the share of each defendant. Supposedly, under the hauling contract, petitioner may require Villaruz to indemnify it for its share. However, because it was not able to maintain the cross-claim filed against him, it shall be liable for its own share under Article 1208 and can no longer seek indemnification or subrogation from him under its dismissed cross-claim. Petitioner may not pursue its cross-claim against Rubin Uy and Dortina Uy, because the crossclaims against them were also dismissed; moreover, they were all equally liable for the conflagration as discussed herein. Finally, the incident occurred in 1992. Almost 20 years have passed; yet, respondents, who were innocent bystanders, have not been compensated for the loss of their homes, properties and livelihood. Notably, neither the RTC nor the CA imposed legal interest on the actual damages that it awarded respondents. In Eastern Shipping Lines v. Court of Appeals,16 enunciated in PCI Leasing & Finance Inc. v. Trojan Metal Industries, Inc.,17 we laid down the rules for the imposition of legal interest as follows: I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages. II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that

which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. In the interest of substantial justice, we deem it necessary to impose legal interest on the awarded actual damages at the rate of 6% per annum from the time the cases were filed with the lower court; and 12% from the time the judgment herein becomes final and executory up to the satisfaction of such judgment. WHEREFORE, in view of the foregoing, we AFFIRM the Decision of the Court of Appeals in Civil Case No. 60845 insofar as herein petitioner has been held solidarily liable to pay damages to respondents. The CA Decision is, however, MODIFIED and the actual damages awarded to respondents shall be subject to the rate of legal interest of 6% per annum from the time of filing of Civil Case Nos. 19633, 19684 and 20122 with the Regional Trial Court of Iloilo City up to the time this judgment becomes final and executory. Henceforth, the rate of legal interest shall be 12% until the satisfaction of judgment. Costs against petitioner. SO ORDERED. FIRST DIVISION G.R. No. 189998 August 29, 2012

MAKATI SHANGRI-LA HOTEL AND RESORT, INC., Petitioner, vs.

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ELLEN JOHANNE HARPER, JONATHAN CHRISTOPHER HARPER, and RIGOBERTO GILLERA, Respondents. DECISION BERSAMIN, J.: The hotel owner is liable for civil damages to the surviving heirs of its hotel guest whom strangers murder inside his hotel room. The Case Petitioner, the owner and operator of the 5-star Shangri-La Hotel in Makati City (Shangri-La Hotel), appeals the decision promulgated on October 21, 2009,1 whereby the Court of Appeals (CA) affirmed with modification the judgment rendered on October 25, 2005 by the Regional Trial Court (RTC) in Quezon City holding petitioner liable for damages for the murder of Christian Fredrik Harper, a Norwegian national.2 Respondents Ellen Johanne Harper and Jonathan Christopher Harper are the widow and son of Christian Harper, while respondent Rigoberto Gillera is their authorized representative in the Philippines. Antecedents In the first week of November 1999, Christian Harper came to Manila on a business trip as the Business Development Manager for Asia of ALSTOM Power Norway AS, an engineering firm with worldwide operations. He checked in at the Shangri-La Hotel and was billeted at Room 1428. He was due to check out on November 6, 1999. In the early morning of that date, however, he was murdered inside his hotel room by still unidentified malefactors. He was then 30 years old. How the crime was discovered was a story in itself. A routine verification call from the American Express Card Company to cardholder Harpers residence in Oslo, Norway (i.e., Bygdoy Terasse 16, 0287 Oslo, Norway) led to the discovery. It appears that at around 11:00 am of November 6, 1999, a Caucasian male of about 3032 years in age, 54" in height, clad in maroon long sleeves, black denims and black shoes, entered the Alexis Jewelry Store in Glorietta, Ayala Center, Makati City and expressed interest in purchasing a Cartier ladys watch valued at P320,000.00 with the use of two Mastercard credit cards and an American Express credit card issued in the name of Harper. But the customers difficulty in answering the queries phoned in by a credit card representative sufficiently aroused the suspicion of saleslady Anna Liza Lumba (Lumba), who asked for the customers passport upon suggestion of the credit card representative to put the credit cards on hold. Probably sensing trouble for himself, the customer hurriedly left the store, and left the three credit cards and the passport behind. In the meanwhile, Harpers family in Norway must have called him at his hotel room to inform him about the attempt to use his American Express card. Not getting any response from the room, his family requested Raymond Alarcon, the Duty Manager of the Shangri-La Hotel, to check on Harpers room. Alarcon and a security personnel went to Room 1428 at 11:27 a.m ., and were shocked to discover Harpers lifeless body on the bed. Col. Rodrigo de Guzman (de Guzman), the hotels Security Manager, initially investigated the murder. In his incident report, he concluded from the several empty bottles of wine in the trash can

and the number of cigarette butts in the toilet bowl that Harper and his visitors had drunk that much and smoked that many cigarettes the night before.3 The police investigation actually commenced only upon the arrival in the hotel of the team of PO3 Carmelito Mendoza4 and SPO4 Roberto Hizon. Mendoza entered Harpers room in the company of De Guzman, Alarcon, Gami Holazo (the hotels Executive Assistant Manager), Norge Rosales (the hotels Executive Housekeeper), and Melvin Imperial (a security personnel of the hotel). They found Harpers body on the bed covered with a blanket, and only the back of the head could be seen. Lifting the blanket, Mendoza saw that the victims eyes and mouth had been bound with electrical and packaging tapes, and his hands and feet tied with a white rope. The body was identified to be that of hotel guest Christian Fredrik Harper. Mendoza subsequently viewed the closed circuit television (CCTV) tapes, from which he found that Harper had entered his room at 12:14 a.m. of November 6, 1999, and had been followed into the room at 12:17 a.m. by a woman; that another person, a Caucasian male, had entered Harpers room at 2:48 a.m.; that the woman had left the room at around 5:33 a.m.; and that the Caucasian male had come out at 5:46 a.m. On November 10, 1999, SPO1 Ramoncito Ocampo, Jr. interviewed Lumba about the incident in the Alexis Jewelry Shop. During the interview, Lumba confirmed that the person who had attempted to purchase the Cartier ladys watch on November 6, 1999 had been the person whose picture was on the passport issued under the name of Christian Fredrik Harper and the Caucasian male seen on the CCTV tapes entering Harpers hotel room. Sr. Insp. Danilo Javier of the Criminal Investigation Division of the Makati City Police reflected in his Progress Report No. 25 that the police investigation showed that Harpers passport, credit cards, laptop and an undetermined amount of cash had been missing from the crime scene; and that he had learned during the follow-up investigation about an unidentified Caucasian males attempt to purchase a Cartier ladys watch from the Alexis Jewelry Store in Glorietta, Ayala Center, Makati City with the use of one of Harpers credit cards. On August 30, 2002, respondents commenced this suit in the RTC to recover various damages from petitioner,6pertinently alleging: xxx 7. The deceased was to check out and leave the hotel on November 6, 1999, but in the early morning of said date, while he was in his hotel room, he was stabbed to death by an (sic) still unidentified male who had succeeded to intrude into his room. 8. The murderer succeeded to trespass into the area of the hotels private rooms area and into the room of the said deceased on account of the hotels gross negligence in providing the most basic security system of its guests, the lack of which owing to the acts or omissions of its employees was the immediate cause of the tragic death of said deceased. xxx

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10. Defendant has prided itself to be among the top hotel chains in the East claiming to provide excellent service, comfort and security for its guests for which reason ABB Alstom executives and their guests have invariably chosen this hotel to stay.7 xxx Ruling of the RTC On October 25, 2005, the RTC rendered judgment after trial,8 viz: WHEREFORE, finding the defendant hotel to be remiss in its duties and thus liable for the death of Christian Harper, this Court orders the defendant to pay plaintiffs the amount of: PhP 43,901,055.00 as and by way of actual and compensatory damages; PhP 739,075.00 representing the expenses of transporting the remains of Harper to Oslo, Norway; PhP 250,000.00 attorneys fees; and to pay the cost of suit. SO ORDERED. Ruling of the CA

MR. HARPER DURING HIS LIFETIME AND OF THE ALLEGATION THAT THE PLAINTIFFSAPPELLEES ARE MR. HARPERS HEIRS. IV THE TRIAL COURT ERRED IN AWARDING TO THE PLAINTIFFS-APPELLEES THE AMOUNT OF PHP739,075.00, REPRESENTING THE ALLEGED COST OF TRANSPORTING THE REMAINS OF MR. CHRISTIAN HARPER TO OSLO, NORWAY, THERE BEING NO PROOF ON RECORD THAT IT WAS PLAINTIFFS-APPELLEES WHO PAID FOR SAID COST. V THE TRIAL COURT ERRED IN AWARDING ATTORNEYS FEES AND COST OF SUIT TO THE PLAINTIFFS-APPELLEES, THERE BEING NO PROOF ON RECORD SUPPORTING SUCH AWARD. On October 21, 2009, the CA affirmed the judgment of the RTC with modification,9 as follows: WHEREFORE, the assailed Decision of the Regional Trial Court dated October 25, 2005 is herebyAFFIRMED with MODIFICATION. Accordingly, defendant-appellant is ordered to pay plaintiffs-appellees the amounts of P 52,078,702.50, as actual and compensatory damages; P 25,000.00, as temperate damages; P 250,000.00, as attorneys fees; and to pay the costs of the suit. SO ORDERED.10 Issues

Petitioner appealed, assigning to the RTC the following errors, to wit: I THE TRIAL COURT ERRED IN RULING THAT THE PLAINTIFFS-APPELLEES ARE THE HEIRS OF THE LATE CHRISTIAN HARPER, AS THERE IS NO COMPETENT EVIDENCE ON RECORD SUPPORTING SUCH RULING. II THE TRIAL COURT ERRED IN RULING THAT THE DEFENDANT-APPELLANTSNEGLIGENCE WAS THE PROXIMATE CAUSE OF THE DEATH OF MR. HARPER, OR IN NOT RULING THAT IT WAS MR. CHRISTIAN HARPERS OWN NEGLIGENCE WHICH WAS THE SOLE, PROXIMATE CAUSE OF HIS DEATH. III THE TRIAL COURT ERRED IN AWARDING TO THE PLAINTIFFS-APPELLEES THE AMOUNTOF PHP43,901,055.00, REPRESENTING THE ALLEGED LOST EARNING OF THE LATE CHRISTIAN HARPER, THERE BEING NO COMPETENT PROOF OF THE EARNING OF Petitioner still seeks the review of the judgment of the CA, submitting the following issues for consideration and determination, namely: I. WHETHER OR NOT THE PLAINTIFFS-APPELLEES WERE ABLE TO PROVE WITH COMPETENT EVIDENCE THE AFFIRMATIVE ALLEGATIONS IN THE COMPLAINT THAT THEY ARE THE WIDOW AND SON OF MR. CHRISTIAN HARPER. II. WHETHER OR NOT THE APPELLEES WERE ABLE TO PROVE WITH COMPETENT EVIDENCE THE AFFIRMATIVE ALLEGATIONS IN THE COMPLAINT THAT THERE WAS NEGLIGENCE ON THE PART OF THE APPELLANT AND ITS SAID NEGLIGENCE WAS THE PROXIMATE CAUSE OF THE DEATH OF MR. CHRISTIAN HARPER. III.

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WHETHER OR NOT THE PROXIMATE CAUSE OF THE DEATH OF MR. CHRISTIAN HARPER WAS HIS OWN NEGLIGENCE. Ruling The appeal lacks merit. I. Requirements for authentication of documents establishing respondents legal relationship with the victim as his heirs were complied with As to the first issue, the CA pertinently held as follows: The documentary evidence that plaintiffs-appellees offered relative to their heirship consisted of the following 1. Exhibit "Q" - Birth Certificate of Jonathan Christopher Harper, son of Christian Fredrik Harper and Ellen Johanne Harper; 2. Exhibit "Q-1" - Marriage Certificate of Ellen Johanne Clausen and Christian Fredrik Harper; 3. Exhibit "R" - Birth Certificate of Christian Fredrick Harper, son of Christopher Shaun Harper and Eva Harper; and 4. Exhibit "R-1" - Certificate from the Oslo Probate Court stating that Ellen Harper was married to the deceased, Christian Fredrick Harper and listed Ellen Harper and Jonathan Christopher Harper as the heirs of Christian Fredrik Harper. Defendant-appellant points out that plaintiffs-appellees committed several mistakes as regards the above documentary exhibits, resultantly making them incompetent evidence, to wit, (a) none of the plaintiffs-appellees or any of the witnesses who testified for the plaintiffs gave evidence that Ellen Johanne Harper and Jonathan Christopher Harper are the widow and son of the deceased Christian Fredrik Harper; (b) Exhibit "Q" was labeled as Certificate of Marriage in plaintiffsappellees Formal Offer of Evidence, when it appears to be the Birth Certificate of the late Christian Harper; (c) Exhibit "Q-1" is a translation of the Marriage Certificate of Ellen Johanne Harper and Christian Fredrik Harper, the original of which was not produced in court, much less, offered in evidence. Being a mere translation, it cannot be a competent evidence of the alleged fact that Ellen Johanne Harper is the widow of Christian Fredrik Harper, pursuant to the Best Evidence Rule. Even assuming that it is an original Marriage Certificate, it is not a public document that is admissible without the need of being identified or authenticated on the witness stand by a witness, as it appears to be a document issued by the Vicar of the Parish of Ullern and, hence, a private document; (d) Exhibit "R" was labeled as Probate Court Certificate in plaintiffs-appellees Formal Offer of Evidence, when it appears to be the Birth Certificate of the deceased, Christian Fredrik Harper; and (e) Exhibit "R-1" is a translation of the supposed Probate Court Certificate, the original of which was not produced in court, much less, offered in evidence. Being a mere translation, it is an incompetent evidence of the alleged fact that plaintiffs-appellees are the heirs of Christian Fredrik Harper, pursuant to the Best Evidence Rule.

Defendant-appellant further adds that Exhibits "Q-1" and "R-1" were not duly attested by the legal custodians (by the Vicar of the Parish of Ullern for Exhibit "Q-1" and by the Judge or Clerk of the Probate Court for Exhibit "R-1") as required under Sections 24 and 25, Rule 132 of the Revised Rules of Court. Likewise, the said documents are not accompanied by a certificate that such officer has the custody as also required under Section 24 of Rule 132. Consequently, defendantappellant asseverates that Exhibits "Q-1" and "R-1" as private documents, which were not duly authenticated on the witness stand by a competent witness, are essentially hearsay in nature that have no probative value. Therefore, it is obvious that plaintiffs-appellees failed to prove that they are the widow and son of the late Christian Harper. Plaintiffs-appellees make the following counter arguments, viz, (a) Exhibit "Q-1", the Marriage Certificate of Ellen Johanne Harper and Christian Fredrik Harper, was issued by the Office of the Vicar of Ullern with a statement that "this certificate is a transcript from the Register of Marriage of Ullern Church." The contents of Exhibit "Q-1" were translated by the Government of the Kingdom of Norway, through its authorized translator, into English and authenticated by the Royal Ministry of Foreign Affairs of Norway, which in turn, was also authenticated by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden; (b) Exhibit "Q", the Birth Certificate of Jonathan Christopher Harper, was issued and signed by the Registrar of the Kingdom of Norway, as authenticated by the Royal Ministry of Foreign Affairs of Norway, whose signature was also authenticated by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden; and (c) Exhibit "R-1", the Probate Court Certificate was also authenticated by the Royal Ministry of Foreign Affairs of Norway, whose signature was also authenticated by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden. They further argue that since Exhibit "Q-1", Marriage Certificate, was issued by the vicar or parish priest, the legal custodian of parish records, it is considered as an exception to the hearsay rule. As for Exhibit "R-1", the Probate Court Certificate, while the document is indeed a translation of the certificate, it is an official certification, duly confirmed by the Government of the Kingdom of Norway; its contents were lifted by the Government Authorized Translator from the official record and thus, a written official act of a foreign sovereign country. WE rule for plaintiffs-appellees. The Revised Rules of Court provides that public documents may be evidenced by a copy attested by the officer having the legal custody of the record. The attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court. If the record is not kept in the Philippines, the attested copy must be accompanied with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. The documents involved in this case are all kept in Norway. These documents have been authenticated by the Royal Norwegian Ministry of Foreign Affairs; they bear the official seal of the Ministry and signature of one, Tanja Sorlie. The documents are accompanied by an Authentication by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden to the effect that, Tanja Sorlie is duly authorized to legalize official documents for the Ministry.

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Exhibits "Q" and "R" are extracts of the register of births of both Jonathan Christopher Harper and the late Christian Fredrik Harper, respectively, wherein the former explicitly declares that Jonathan Christopher is the son of Christian Fredrik and Ellen Johanne Harper. Said documents bear the signature of the keeper, Y. Ayse B. Nordal with the official seal of the Office of the Registrar of Oslo, and the authentication of Tanja Sorlie of the Royal Ministry of Foreign Affairs, Oslo, which were further authenticated by Philippine Consul Marian Jocelyn R. Tirol. In addition, the latter states that said documents are the birth certificates of Jonathan Christopher Harper and Christian Fredrik Harper issued by the Registrar Office of Oslo, Norway on March 23, 2004. Exhibits "Q-1", on the other hand, is the Marriage Certificate of Christian Fredrik Harper and Ellen Johanne Harper issued by the vicar of the Parish of Ullern while Exhibit "R-1" is the Probate Court Certificate from the Oslo Probate Court, naming Ellen Johanne Harper and Jonathan Christopher Harper as the heirs of the deceased Christian Fredrik Harper. The documents are certified true translations into English of the transcript of the said marriage certificate and the probate court certificate. They were likewise signed by the authorized government translator of Oslo with the seal of his office; attested by Tanja Sorlie and further certified by our own Consul. In view of the foregoing, WE conclude that plaintiffs-appellees had substantially complied with the requirements set forth under the rules. WE would also like to stress that plaintiffs-appellees herein are residing overseas and are litigating locally through their representative. While they are not excused from complying with our rules, WE must take into account the attendant reality that these overseas litigants communicate with their representative and counsel via long distance communication. Add to this is the fact that compliance with the requirements on attestation and authentication or certification is no easy process and completion thereof may vary depending on different factors such as the location of the requesting party from the consulate and the office of the record custodian, the volume of transactions in said offices and even the mode of sending these documents to the Philippines. With these circumstances under consideration, to OUR minds, there is every reason for an equitable and relaxed application of the rules on the issuance of the required attestation from the custodian of the documents to plaintiffs-appellees situation. Besides, these questioned documents were duly signed by the officers having custody of the same.11 Petitioner assails the CAs ruling that respondents substantially complied with the rules on the authentication of the proofs of marriage and filiation set by Section 24 and Section 25 of Rule 132 of the Rules of Court when they presented Exhibit Q, Exhibit Q-1, Exhibit R and Exhibit R-1, because the legal custodian did not duly attest that Exhibit Q-1 and Exhibit R-1 were the correct copies of the originals on file, and because no certification accompanied the documents stating that "such officer has custody of the originals." It contends that respondents did not competently prove their being Harpers surviving heirs by reason of such documents being hearsay and incompetent. Petitioners challenge against respondents documentary evidence on marriage and heirship is not well-taken. Section 24 and Section 25 of Rule 132 provide: Section 24. Proof of official record. The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular

agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. Section 25. What attestation of copy must state. Whenever a copy of a document or record is attested for the purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court. Although Exhibit Q,12 Exhibit Q-1,13 Exhibit R14 and Exhibit R-115 were not attested by the officer having the legal custody of the record or by his deputy in the manner required in Section 25 of Rule 132, and said documents did not comply with the requirement under Section 24 of Rule 132 to the effect that if the record was not kept in the Philippines a certificate of the person having custody must accompany the copy of the document that was duly attested stating that such person had custody of the documents, the deviation was not enough reason to reject the utility of the documents for the purposes they were intended to serve. Exhibit Q and Exhibit R were extracts from the registry of births of Oslo, Norway issued on March 23, 2004 and signed by Y. Ayse B. Nordal, Registrar, and corresponded to respondent Jonathan Christopher Harper and victim Christian Fredrik Harper, respectively. 16 Exhibit Q explicitly stated that Jonathan was the son of Christian Fredrik Harper and Ellen Johanne Harper, while Exhibit R attested to the birth of Christian Fredrik Harper on December 4, 1968. Exhibit Q and Exhibit R were authenticated on March 29, 2004 by the signatures of Tanja Sorlie of the Royal Ministry of Foreign Affairs of Norway as well as by the official seal of that office. In turn, Consul Marian Jocelyn R. Tirol of the Philippine Consulate in Stockholm, Sweden authenticated the signatures of Tanja Sorlie and the official seal of the Royal Ministry of Foreign Affairs of Norway on Exhibit Q and Exhibit R, explicitly certifying to the authority of Tanja Sorlie "to legalize official documents for the Royal Ministry of Foreign Affairs of Norway."17 Exhibit Q-1,18 the Marriage Certificate of Ellen Johanne Clausen Harper and Christian Fredrik Harper, contained the following data, namely: (a) the parties were married on June 29, 1996 in Ullern Church; and (b) the certificate was issued by the Office of the Vicar of Ullern on June 29, 1996. Exhibit Q-1 was similarly authenticated by the signature of Tanja Sorlie of the Royal Ministry of Foreign Affairs of Norway, with the official seal of that office. Philippine Consul Tirol again expressly certified to the capacity of Sorlie "to legalize official documents for the Royal Ministry of Foreign Affairs of Norway,"19 and further certified that the document was a true translation into English of a transcript of a Marriage Certificate issued to Christian Frederik Harper and Ellen Johanne Clausen by the Vicar of the Parish of Ullern on June 29, 1996. Exhibit R-1,20 a Probate Court certificate issued by the Oslo Probate Court on February 18, 2000 through Morten Bolstad, its Senior Executive Officer, was also authenticated by the signature of Tanja Sorlie and with the official seal of the Royal Ministry of Foreign Affairs of Norway. As with the other documents, Philippine Consul Tirol explicitly certified to the capacity of Sorlie "to legalize official documents for the Royal Ministry of Foreign Affairs of Norway," and further certified that the document was a true translation into English of the Oslo Probate Court certificate issued on February 18, 2000 to the effect that Christian Fredrik Harper, born on December 4, 1968, had reportedly died on November 6, 1999.21

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The Oslo Probate Court certificate recited that both Ellen Johanne Harper and Christopher S. Harper were Harpers heirs, to wit: The above names surviving spouse has accepted responsibility for the commitments of the deceased in accordance with the provisions of Section 78 of the Probate Court Act (Norway), and the above substitute guardian has agreed to the private division of the estate. The following heir and substitute guardian will undertake the private division of the estate: Ellen Johanne Harper Christopher S. Harper This probate court certificate relates to the entire estate. Oslo Probate Court, 18 February 2000.22 The official participation in the authentication process of Tanja Sorlie of the Royal Ministry of Foreign Affairs of Norway and the attachment of the official seal of that office on each authentication indicated that Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 were documents of a public nature in Norway, not merely private documents. It cannot be denied that based on Philippine Consul Tirols official authentication, Tanja Sorlie was "on the date of signing, duly authorized to legalize official documents for the Royal Ministry of Foreign Affairs of Norway." Without a showing to the contrary by petitioner, Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 should be presumed to be themselves official documents under Norwegian law, and admissible as prima facie evidence of the truth of their contents under Philippine law. At the minimum, Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 substantially met the requirements of Section 24 and Section 25 of Rule 132 as a condition for their admission as evidence in default of a showing by petitioner that the authentication process was tainted with bad faith. Consequently, the objective of ensuring the authenticity of the documents prior to their admission as evidence was substantially achieved. In Constantino-David v. PangandamanGania,23 the Court has said that substantial compliance, by its very nature, is actually inadequate observance of the requirements of a rule or regulation that are waived under equitable circumstances in order to facilitate the administration of justice, there being no damage or injury caused by such flawed compliance. The Court has further said in Constantino-David v. Pangandaman-Gania that the focus in every inquiry on whether or not to accept substantial compliance is always on the presence of equitable conditions to administer justice effectively and efficiently without damage or injury to the spirit of the legal obligation.24 There are, indeed, such equitable conditions attendant here, the foremost of which is that respondents had gone to great lengths to submit the documents. As the CA observed, respondents compliance with the requirements on attestation and authentication of the documents had not been easy; they had to contend with many difficulties (such as the distance of Oslo, their place of residence, from Stockholm, Sweden, where the Philippine Consulate had its office; the volume of transactions in the offices concerned; and the safe transmission of the documents to the Philippines).25 Their submission of the documents should be presumed to be in good faith because they did so in due course. It would be inequitable if the sincerity of respondents in obtaining and submitting the documents despite the difficulties was ignored.

The principle of substantial compliance recognizes that exigencies and situations do occasionally demand some flexibility in the rigid application of the rules of procedure and the laws. 26 That rules of procedure may be mandatory in form and application does not forbid a showing of substantial compliance under justifiable circumstances,27 because substantial compliance does not equate to a disregard of basic rules. For sure, substantial compliance and strict adherence are not always incompatible and do not always clash in discord. The power of the Court to suspend its own rules or to except any particular case from the operation of the rules whenever the purposes of justice require the suspension cannot be challenged.28 In the interest of substantial justice, even procedural rules of the most mandatory character in terms of compliance are frequently relaxed. Similarly, the procedural rules should definitely be liberally construed if strict adherence to their letter will result in absurdity and in manifest injustice, or where the merits of a partys cause are apparent and outweigh considerations of non-compliance with certain formal requirements.29 It is more in accord with justice that a party-litigant is given the fullest opportunity to establish the merits of his claim or defense than for him to lose his life, liberty, honor or property on mere technicalities. Truly, the rules of procedure are intended to promote substantial justice, not to defeat it, and should not be applied in a very rigid and technical sense. 30 Petitioner urges the Court to resolve the apparent conflict between the rulings in Heirs of Pedro Cabais v. Court of Appeals31 (Cabais) and in Heirs of Ignacio Conti v. Court of Appeals32 (Conti) establishing filiation through a baptismal certificate.33 Petitioners urging is not warranted, both because there is no conflict between the rulings in Cabais and Conti, and because neither Cabais nor Conti is relevant herein. In Cabais, the main issue was whether or not the CA correctly affirmed the decision of the RTC that had relied mainly on the baptismal certificate of Felipa C. Buesa to establish the parentage and filiation of Pedro Cabais. The Court held that the petition was meritorious, stating: A birth certificate, being a public document, offers prima facie evidence of filiation and a high degree of proof is needed to overthrow the presumption of truth contained in such public document. This is pursuant to the rule that entries in official records made in the performance of his duty by a public officer are prima facie evidence of the facts therein stated. The evidentiary nature of such document must, therefore, be sustained in the absence of strong, complete and conclusive proof of its falsity or nullity. On the contrary, a baptismal certificate is a private document, which, being hearsay, is not a conclusive proof of filiation. It does not have the same probative value as a record of birth, an official or public document. In US v. Evangelista, this Court held that church registers of births, marriages, and deaths made subsequent to the promulgation of General Orders No. 68 and the passage of Act No. 190 are no longer public writings, nor are they kept by duly authorized public officials. Thus, in this jurisdiction, a certificate of baptism such as the one herein controversy is no longer regarded with the same evidentiary value as official records of birth. Moreover, on this score, jurisprudence is consistent and uniform in ruling that the canonical certificate of baptism is not sufficient to prove recognition.34 The Court sustained the Cabais petitioners stance that the RTC had apparently erred in relying on the baptismal certificate to establish filiation, stressing the baptismal certificates limited evidentiary value as proof of filiation inferior to that of a birth certificate; and declaring that the baptismal certificate did not attest to the veracity of the statements regarding the kinsfolk of the one baptized. Nevertheless, the Court ultimately ruled that it was respondents failure to present the bi rth certificate, more than anything else, that lost them their case, stating that: "The unjustified failure

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to present the birth certificate instead of the baptismal certificate now under consideration or to otherwise prove filiation by any other means recognized by law weigh heavily against respondents."35 In Conti, the Court affirmed the rulings of the trial court and the CA to the effect that the Conti respondents were able to prove by preponderance of evidence their being the collateral heirs of deceased Lourdes Sampayo. The Conti petitioners disagreed, arguing that baptismal certificates did not prove the filiation of collateral relatives of the deceased. Agreeing with the CA, the Court said: We are not persuaded. Altogether, the documentary and testimonial evidence submitted xxx are competent and adequate proofs that private respondents are collateral heirs of Lourdes Sampayo. xxx Under Art. 172 of the Family Code, the filiation of legitimate children shall be proved by any other means allowed by the Rules of Court and special laws, in the absence of a record of birth or a parents admission of such legitimate filiation in a public or private document duly sig ned by the parent. Such other proof of ones filiation may be a baptismal certificate, a judicial admission, a family Bible in which his name has been entered, common reputation respecting his pedigree, admission by silence, the testimonies of witnesses and other kinds of proof admissible under Rule 130 of the Rules of Court. By analogy, this method of proving filiation may also be utilized in the instant case. Public documents are the written official acts, or records of the official act of the sovereign authority, official bodies and tribunals, and public officers, whether of the Philippines, or a foreign country. The baptismal certificates presented in evidence by private respondents are public documents. Parish priests continue to be the legal custodians of the parish records and are authorized to issue true copies, in the form of certificates, of the entries contained therein. The admissibility of baptismal certificates offered by Lydia S. Reyes, absent the testimony of the officiating priest or the official recorder, was settled in People v. Ritter, citing U.S. v. de Vera (28 Phil. 105 1914, thus: .... The entries made in the Registry Book may be considered as entries made in the course of business under Section 43 of Rule 130, which is an exception to the hearsay rule. The baptisms administered by the church are one of its transactions in the exercise of ecclesiastical duties and recorded in the book of the church during this course of its business. It may be argued that baptismal certificates are evidence only of the administration of the sacrament, but in this case, there were four (4) baptismal certificates which, when taken together, uniformly show that Lourdes, Josefina, Remedios and Luis had the same set of parents, as indicated therein. Corroborated by the undisputed testimony of Adelaida Sampayo that with the demise of Lourdes and her brothers Manuel, Luis and sister Remedios, the only sibling left was Josefina Sampayo Reyes, such baptismal certificates have acquired evidentiary weight to prove filiation.36 Obviously, Conti did not treat a baptismal certificate, standing alone, as sufficient to prove filiation; on the contrary,Conti expressly held that a baptismal certificate had evidentiary value to prove

filiation if considered alongside other evidence of filiation. As such, a baptismal certificate alone is not sufficient to resolve a disputed filiation. Unlike Cabais and Conti, this case has respondents presenting several documents, like the birth certificates of Harper and respondent Jonathan Harper, the marriage certificate of Harper and Ellen Johanne Harper, and the probate court certificate, all of which were presumably regarded as public documents under the laws of Norway. Such documentary evidence sufficed to competently establish the relationship and filiation under the standards of our Rules of Court. II Petitioner was liable due to its own negligence Petitioner argues that respondents failed to prove its negligence; that Harpers own negligence in allowing the killers into his hotel room was the proximate cause of his own death; and that hotels were not insurers of the safety of their guests. The CA resolved petitioners arguments thuswise: Defendant-appellant contends that the pivotal issue is whether or not it had committed negligence and corollarily, whether its negligence was the immediate cause of the death of Christian Harper. In its defense, defendant-appellant mainly avers that it is equipped with adequate security system as follows: (1) keycards or vingcards for opening the guest rooms, (2) two CCTV monitoring cameras on each floor of the hotel and (3) roving guards with handheld radios, the number of which depends on the occupancy rate of the hotel. Likewise, it reiterates that the proximate cause of Christian Harpers death was his own negligence in inviting to his room the two (2) still unidentified suspects. Plaintiffs-appellees in their Brief refute, in that, the liability of defendant-appellant is based upon the fact that it was in a better situation than the injured person, Christian Harper, to foresee and prevent the happening of the injurious occurrence. They maintain that there is no dispute that even prior to the untimely demise of Christian Harper, defendant-appellant was duly forewarned of its security lapses as pointed out by its Chief Security Officer, Col. Rodrigo De Guzman, who recommended that one roving guard be assigned on each floor of the hotel considering the length and shape of the corridors. They posit that defendant-appellants inaction constitutes negligence. This Court finds for plaintiffs-appellees. As the action is predicated on negligence, the relevant law is Article 2176 of the Civil Code, which states that "Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there was no pre-existing contractual relation between the parties, is called quasi-delict and is governed by the provisions of this chapter." Negligence is defined as the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do. The Supreme Court likewise ruled that negligence is want of care required by the circumstances. It is a relative or comparative, not

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an absolute, term and its application depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably require. In determining whether or not there is negligence on the part of the parties in a given situation, jurisprudence has laid down the following test: Did defendant, in doing the alleged negligent act, use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, the person is guilty of negligence. The law, in effect, adopts the standard supposed to be supplied by the imaginary conduct of the discreet pater familias of the Roman law. The test of negligence is objective. WE measure the act or omission of the tortfeasor with a perspective as that of an ordinary reasonable person who is similarly situated. The test, as applied to the extant case, is whether or not defendant-appellant, under the attendant circumstances, used that reasonable care and caution which an ordinary reasonable person would have used in the same situation. WE rule in the negative. In finding defendant-appellant remiss in its duty of exercising the required reasonable care under the circumstances, the court a quo reasoned-out, to wit: "Of the witnesses presented by plaintiffs to prove its (sic) case, the only one with competence to testify on the issue of adequacy or inadequacy of security is Col. Rodrigo De Guzman who was then the Chief Security Officer of defendant hotel for the year 1999. He is a retired police officer and had vast experience in security jobs. He was likewise a member of the elite Presidential Security Group. He testified that upon taking over the job as the chief of the security force of the hotel, he made an assessment of the security situation. Col. De Guzman was not satisfied with the security set-up and told the hotel management of his desire to improve it. In his testimony, De Guzman testified that at the time he took over, he noticed that there were few guards in the elevated portion of the hotel where the rooms were located. The existing security scheme then was one guard for 3 or 4 floors. He likewise testified that he recommended to the hotel management that at least one guard must be assigned per floor especially considering that the hotel has a long "L-shaped" hallway, such that one cannot see both ends of the hallway. He further opined that "even one guard in that hallway is not enough because of the blind portion of the hallway."

Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called quasi-delict. Liability on the part of the defendant is based upon the fact that he was in a better situation than the injured person to foresee and prevent the happening of the injurious occurrence. There is no dispute that even prior to the untimely demise of Mr. Harper, defendant was duly forewarned of the security lapses in the hotel. Col. De Guzman was particularly concerned with the security of the private areas where the guest rooms are. He wanted not just one roving guard in every three or four floors. He insisted there must be at least one in each floor considering the length and the shape of the corridors. The trained eyes of a security officer was (sic) looking at that deadly scenario resulting from that wide security breach as that which befell Christian Harper. The theory of the defense that the malefactor/s was/were known to Harper or was/were visitors of Harper and that there was a shindig among [the] three deserves scant consideration. The NBI Biology Report (Exh. "C" & "D") and the Toxicology Report (Exh. "E") belie the defense theory of a joyous party between and among Harper and the unidentified malefactor/s. Based on the Biology Report, Harper was found negative of prohibited and regulated drugs. The Toxicology Report likewise revealed that the deceased was negative of the presence of alcohol in his blood. The defense even suggests that the malefactor/s gained entry into the private room of Harper either because Harper allowed them entry by giving them access to the vingcard or because Harper allowed them entry by opening the door for them, the usual gesture of a room occupant to his visitors. While defendants theory may be true, it is more likely, under the circumstances obtaining that the malefactor/s gained entry into his room by simply knocking at Harpers door and the latter opening it probably thinking it was hotel personnel, without an inkling that criminal/s could be in the premises.

The latter theory is more attuned to the dictates of reason. If indeed the female "visitor" is known to or a visitor of Harper, she should have entered the the room together with Harper. It is quite unlikely that a supposed "visitor" would wait three minutes to be with a guest when he/she could On cross-examination, Col. De Guzman testified that the security of the hotel was adequate at the go with the guest directly to the room. The interval of three minutes in Harpers entry and that of time the crime occurred because the hotel was not fully booked. He qualified his testimony on the alleged female visitor belies the "theory of acquaintanceship". It is most likely that the female direct in that his recommendation of one guard per floor is the "ideal" set-up when the hotel is fully"visitor" was the one who opened the door to the male "visitor", undoubtedly, a co-conspirator. booked. Be that as it may, it must be noted that Col. De Guzman also testified that the reason why the hotel management disapproved his recommendation was that the hotel was not doing well. It is for this reason that the hotel management did not heed the recommendation of Col. De Guzman, no matter how sound the recommendation was, and whether the hotel is fully-booked or not. It was a business judgment call on the part of the defendant. Plaintiffs anchor its (sic) case on our law on quasi-delicts. In any case, the ghastly incident could have been prevented had there been adequate security in each of the hotel floors. This, coupled with the earlier recommendation of Col. De Guzman to the hotel management to act on the security lapses of the hotel, raises the presumption that the crime was foreseeable. Clearly, defendants inaction constitutes negligence or want of the reasonable care demanded of it in that particular situation. In a case, the Supreme Court defined negligence as:

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The failure to observe for the protection of the interests of another person that degree of care, precaution and vigilance, which the circumstances justly demand, whereby such person suffers injury.

then made a recommendation that the ideal-set up for an effective security should be one guard for every floor, considering that the hotel is L-shaped and the ends of the hallways cannot be seen. At the time he made the recommendation, the same was denied, but it was later on considered and approved on December 1999 because of the Centennial Celebration.

Negligence is want of care required by the circumstances. It is a relative or comparative, not an absolute term, and its application depends upon the situation of the parties, and the degree of care On cross-examination, Col. De Guzman confirmed that after he took over as Chief Security and vigilance which the circumstances reasonably impose. Where the danger is great, a high Officer, the number of security guards was increased during the first part of December or about the degree of care is necessary. last week of November, and before the incident happened, the security was adequate. He also qualified that as to his direct testimony on "ideal-set up", he was referring to one guard for every floor if the hotel is fully booked. At the time he made his recommendation in the early part of 1999, Moreover, in applying the premises liability rule in the instant case as it is applied in some it was disapproved as the hotel was not doing well and it was not fully booked so the existing jurisdiction (sic) in the United States, it is enough that guests are injured while inside the hotel security was adequate enough. He further explained that his advice was observed only in the late premises to make the hotelkeeper liable. With great caution should the liability of the hotelkeeper November 1999 or the early part of December 1999. be enforced when a guest died inside the hotel premises. It also bears stressing that there were prior incidents that occurred in the hotel which should have forewarned the hotel management of the security lapses of the hotel. As testified to by Col. De Guzman, "there were minor incidents" (loss of items) before the happening of the instant case. These "minor" incidents may be of little significance to the hotel, yet relative to the instant case, it speaks volume. This should have served as a caveat that the hotel security has lapses. Makati Shangri-La Hotel, to stress, is a five-star hotel. The "reasonable care" that it must exercise for the safety and comfort of its guests should be commensurate with the grade and quality of the accommodation it offers. If there is such a thing as "five-star hotel security", the guests at Makati Shangri-La surely deserves just that! It could be inferred from the foregoing declarations of the former Chief Security Officer of defendant-appellant that the latter was negligent in providing adequate security due its guests. With confidence, it was repeatedly claimed by defendant-appellant that it is a five-star hotel. Unfortunately, the record failed to show that at the time of the death of Christian Harper, it was exercising reasonable care to protect its guests from harm and danger by providing sufficient security commensurate to it being one of the finest hotels in the country. In so concluding, WE are reminded of the Supreme Courts enunciation that the hotel business like the common carriers business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide not only lodging for hotel guests but also security to their persons and belongings. The twin duty constitutes the essence of the business.

It is clear from the testimony of Col. De Guzman that his recommendation was initially denied due to the fact that the business was then not doing well. The "one guard, one floor" recommended policy, although ideal when the hotel is fully-booked, was observed only later in November 1999 or When one registers (as) a guest of a hotel, he makes the establishment the guardian of his life and in the early part of December 1999, or needless to state, after the murder of Christian Harper. The his personal belongings during his stay. It is a standard procedure of the management of the hotel apparent security lapses of defendant-appellant were further shown when the male culprit who to screen visitors who call on their guests at their rooms. The murder of Harper could have been entered Christian Harpers room was never checked by any of the guards when he came inside avoided had the security guards of the Shangri-La Hotel in Makati dutifully observed this standard the hotel. As per interview conducted by the initial investigator, PO3 Cornelio Valiente to the procedure." guards, they admitted that nobody know that said man entered the hotel and it was only through the monitor that they became aware of his entry. It was even evidenced by the CCTV that before he walked to the room of the late Christian Harper, said male suspect even looked at the WE concur. monitoring camera. Such act of the man showing wariness, added to the fact that his entry to the hotel was unnoticed, at an unholy hour, should have aroused suspicion on the part of the roving Well settled is the doctrine that "the findings of fact by the trial court are accorded great respect by guard in the said floor, had there been any. Unluckily for Christian Harper, there was none at that appellate courts and should not be disturbed on appeal unless the trial court has overlooked, time. ignored, or disregarded some fact or circumstances of sufficient weight or significance which, if considered, would alter the situation." After a conscientious sifting of the records, defendantProximate cause is defined as that cause, which, in natural and continuous sequence, unbroken appellant fails to convince US to deviate from this doctrine. by any efficient intervening cause, produces, the injury, and without which the result would not have occurred. More comprehensively, proximate cause is that cause acting first and producing It could be gleaned from findings of the trial court that its conclusion of negligence on the part of the injury, either immediately or by setting other events in motion, all constituting a natural and defendant-appellant is grounded mainly on the latters inadequate hotel security, more particularly continuous chain of events, each having a close causal connection with its immediate on the failure to deploy sufficient security personnel or roving guards at the time the ghastly predecessor, the final event in the chain immediately effecting the injury as natural and probable incident happened. result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to A review of the testimony of Col. De Guzman reveals that on direct examination he testified that at expect at the moment of his act or default that an injury to some person might probably result the time he assumed his position as Chief Security Officer of defendant-appellant, during the early therefrom. part of 1999 to the early part of 2000, he noticed that some of the floors of the hotel were being guarded by a few guards, for instance, 3 or 4 floors by one guard only on a roving manner. He

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Defendant-appellants contention that it was Christian Harpers own negligence in allowing the malefactors to his room that was the proximate cause of his death, is untenable. To reiterate, defendant-appellant is engaged in a business imbued with public interest, ergo, it is bound to provide adequate security to its guests. As previously discussed, defendant-appellant failed to exercise such reasonable care expected of it under the circumstances. Such negligence is the proximate cause which set the chain of events that led to the eventual demise of its guest. Had there been reasonable security precautions, the same could have saved Christian Harper from a brutal death. The Court concurs entirely with the findings and conclusions of the CA, which the Court regards to be thorough and supported by the records of the trial. Moreover, the Court cannot now review and pass upon the uniform findings of negligence by the CA and the RTC because doing so would require the Court to delve into and revisit the factual bases for the finding of negligence, something fully contrary to its character as not a trier of facts. In that regard, the factual findings of the trial court that are supported by the evidence on record, especially when affirmed by the CA, are conclusive on the Court.37 Consequently, the Court will not review unless there are exceptional circumstances for doing so, such as the following: (a) When the findings are grounded entirely on speculation, surmises or conjectures; (b) When the inference made is manifestly mistaken, absurd or impossible; (c) When there is grave abuse of discretion; (d) When the judgment is based on a misapprehension of facts; (e) When the findings of facts are conflicting; (f) When in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (g) When the findings are contrary to the trial court; (h) When the findings are conclusions without citation of specific evidence on which they are based; (i) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (k) When the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. 38 None of the exceptional circumstances obtains herein. Accordingly, the Court cannot depart from or disturb the factual findings on negligence of petitioner made by both the RTC and the CA. 39

Even so, the Court agrees with the CA that petitioner failed to provide the basic and adequate security measures expected of a five-star hotel; and that its omission was the proximate cause of Harpers death. The testimony of Col. De Guzman revealed that the management practice prior to the murder of Harper had been to deploy only one security or roving guard for every three or four floors of the building; that such ratio had not been enough considering the L-shape configuration of the hotel that rendered the hallways not visible from one or the other end; and that he had recommended to management to post a guard for each floor, but his recommendation had been disapproved because the hotel "was not doing well" at that particular time. 40 Probably realizing that his testimony had weakened petitioners position in the case, Col. De Guzman soon clarified on cross-examination that petitioner had seen no need at the time of the incident to augment the number of guards due to the hotel being then only half-booked. Here is how his testimony went: ATTY MOLINA: I just forgot one more point, Your Honor please. Was there ever a time, Mr. Witness, that your recommendation to post a guard in every floor ever considered and approved by the hotel? A: Yes, Sir. Q: When was this? A: That was on December 1999 because of the Centennial Celebration when the hotel accepted so many guests wherein most of the rooms were fully booked and I recommended that all the hallways should be guarded by one guard.41 xxx ATTY COSICO: Q: So at that time that you made your recommendation, the hotel was half-filled. A: Maybe. Q: And even if the hotel is half-filled, your recommendation is that each floor shall be maintained by one security guard per floors? A: Yes sir. Q: Would you agree with me that even if the hotel is half-filled, there is no need to increase the guards because there were only few customers? A: I think so.

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Q: So you will agree with me that each floor should be maintained by one security guard if the rooms are filled up or occupied? A: Yes sir. Q: Now, you even testified that from January 1999 to November 1999 thereof, only minor incidents were involved? A: Yes sir. Q: So it would be correct to say that the security at that time in February was adequate? A: I believe so. Q: Even up to November when the incident happened for that same reason, security was adequate? A: Yes, before the incident. Q: Now, you testified on direct that the hotel posted one guard each floor? A: Yes sir. Q: And it was your own recommendation? A: Yes, because we are expecting that the hotel will be filled up. Q: In fact, the hotel was fully booked? A: Yes sir.42

visitors of the guests, without being held liable should anything untoward befall the unwary guests. That would be absurd, something that no good law would ever envision. In fine, the Court sees no reversible-error on the part of the CA. WHEREFORE, the Court AFFIRMS the judgment of the Court of Appeals; and ORDERS petitioner to pay the costs of suit. SO ORDERED. SECOND DIVISION G.R. No. 183053 June 16, 2010

IN THE MATTER OF THE INTESTATE ESTATE OF CRISTINA AGUINALDO-SUNTAY; EMILIO A.M. SUNTAY III,Petitioner, vs. ISABEL COJUANGCO-SUNTAY, Respondent. DECISION NACHURA, J.: Unlike Pope Alexander VI1 who, faced with the impasse between Spain and Portugal, deftly and literally divided the exploration, or more appropriately, the riches of the New World by issuing the Inter Caetera,2 we are confronted with the difficult, albeit, all too familiar tale of another family imbroglio over the estate of a decedent.3 This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 74949,4 reversing the decision of the Regional Trial Court (RTC), Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-M-95.5

Petitioner would thereby have the Court believe that Col. De Guzmans initial recommendation had Before anything else, we disentangle the facts. been rebuffed due to the hotel being only half-booked; that there had been no urgency to adopt a one-guard-per-floor policy because security had been adequate at that time; and that he actually On June 4, 1990, the decedent, Cristina Aguinaldo-Suntay (Cristina), married to Dr. Federico meant by his statement that "the hotel was not doing well" that the hotel was only half-booked. Suntay (Federico), died intestate. In 1979, their only son, Emilio Aguinaldo Suntay (Emilio I), predeceased both Cristina and Federico. At the time of her death, Cristina was survived by her husband, Federico, and several grandchildren, including herein petitioner Emilio A.M. Suntay III We are not convinced. (Emilio III) and respondent Isabel Cojuangco-Suntay. The hotel business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide not only lodging for their guests but also security to the persons and belongings of their guests. The twin duty constitutes the essence of the business. 43 Applying by analogy Article 2000,44 Article 200145 and Article 200246of the Civil Code (all of which concerned the hotelkeepers degree of care and responsibility as to the personal effects of their guests), we hold that there is much greater reason to apply the same if not greater degree of care and responsibility when the lives and personal safety of their guests are involved. Otherwise, the hotelkeepers would simply stand idly by as strangers have unrestricted access to all the hotel rooms on the pretense of being During his lifetime, Emilio I was married to Isabel Cojuangco, and they begot three children, namely: herein respondent, Isabel; Margarita; and Emilio II, all surnamed Cojuangco-Suntay. Emilio Is marriage to Isabel Cojuangco was subsequently annulled. Thereafter, Emilio I had two children out of wedlock, Emilio III and Nenita Suntay Taedo (Nenita), by two different women, Concepcion Mendoza and Isabel Santos, respectively.

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Despite the illegitimate status of Emilio III, he was reared ever since he was a mere baby, nine months old, by the spouses Federico and Cristina and was an acknowledged natural child of Emilio I. Nenita is an acknowledged natural child of Emilio I and was likewise brought up by the spouses Federico and Cristina. As previously adverted to, the marriage between Emilio I and Isabel was annulled. 6 Consequently, respondent and her siblings Margarita and Emilio II, lived with their mother on Balete Drive, Quezon City, separately from their father and paternal grandparents. Parenthetically, after the death of Emilio I, Federico filed a petition for visitation rights over his grandchildren: respondent Isabel, Margarita, and Emilio II. Although the Juvenile and Domestic Relations Court in Quezon City granted the petition and allowed Federico one hour of visitation monthly, initially reduced to thirty minutes, it was altogether stopped because of a manifestation filed by respondent Isabel, articulating her sentiments on the unwanted visits of her grandparents. Significantly, Federico, after the death of his spouse, Cristina, or on September 27, 1993, adopted their illegitimate grandchildren, Emilio III and Nenita.71avvphi1 On October 26, 1995, respondent filed a petition for the issuance of letters of administration in her favor, containing the following allegations: [A]t the time of [the decedents] death, [she] was a resident of the Municipality of Hagonoy, Province of Bulacan; that the [decedent] left an estate of real and personal properties, with a probable gross value of P29,000,000.00; that the names, ages and residences of the surviving heirs of the [decedent] are: (1) Federico C. Suntay, 89 years old, surviving spouse and a resident of x x x; (2) Isabel Cojuangco-Suntay, 36 years old, legitimate granddaughter and a resident of x x x; (3) Margarita Cojuangco-Suntay, 39 years old, legitimate granddaughter and a resident of x x x; and (4) Emilio Cojuangco-Suntay, 35 years old, legitimate grandson and a resident of x x x; and that as far as [respondent] knew, the decedent left no debts or obligation at the time of her death.8 Disavowing the allegations in the petition of his grandchild, respondent Isabel, Federico filed his opposition on December 21, 1995, alleging, among others, that: [B]eing the surviving spouse of Cristina, he is capable of administering her estate and he should be the one appointed as its administrator; that as part owner of the mass of conjugal properties left by Cristina, he must be accorded legal preference in the administration thereof; that Isabel and her family had been alienated from their grandparents for more than thirty (30) years; that the enumeration of heirs in the petition was incomplete as it did not mention the other children of his son[,] namely: Emilio III and Nenita S. Taedo; that he is better situated to protect the integrity of the estate of Cristina as even before the death of his wife[,] he was already the one who managed their conjugal properties; that the probable value of the estate as stated in the petition was grossly overstated (sic); and that Isabels allegation that some of the properties are in the hands of usurpers is untrue.9 Meanwhile, after a failed attempt by the parties to settle the proceedings amicably, Federico filed a Manifestation dated March 13, 1999, nominating his adopted son, Emilio III, as administrator of the decedents estate on his behalf, in the event he would be adjudged as the one with a better right to the letters of administration.

Subsequently, the trial court granted Emilio IIIs Motion for Leave to Intervene considering his interest in the outcome of the case. Emilio III filed his Opposition-In-Intervention, which essentially echoed the allegations in his grandfathers opposition, alleging that Federico, or in his stead, Emilio III, was better equipped than respondent to administer and manage the estate of the decedent, Cristina. Additionally, Emilio III averred his own qualifications that: "[he] is presently engaged in aquaculture and banking; he was trained by the decedent to work in his early age by involving him in the activities of the Emilio Aguinaldo Foundation which was established in 1979 in memory of her grandmothers father; the significant work experiences outside the family group are included in his curriculum vitae; he was employed by the oppositor [Federico] after his graduation in college with management degree at F.C.E. Corporations and Hagonoy Rural Bank; x x x."10 In the course of the proceedings, on November 13, 2000, Federico died. After the testimonies of both parties witnesses were heard and evidence on their respective allegations were adduced, the trial court rendered a decision on November 9, 2001, appointing herein petitioner, Emilio III, as administrator of decedent Cristinas intestate estate, to wit: WHEREFORE, the petition of Isabel Cojuangco[-]Suntay is DENIED and the Opposition[-]in[]Intervention is GRANTED. Accordingly, the Intervenor, Emilio A.M. Suntay, III is hereby appointed administrator of the estate of the decedent Cristina Aguinaldo Suntay, who shall enter upon the execution of his trust upon the filing of a bond in the amount of P200,000.00, conditioned as follows: (1) To make and return within three (3) months, a true and complete inventory; (2) To administer the estate and to pay and discharge all debts, legatees, and charge on the same, or dividends thereon; (3) To render a true and just account within one (1) year, and at any other time when required by the court, and (4) To perform all orders of the Court. Once the said bond is approved by the court, let Letters of Administration be issued in his favor. SO ORDERED.11 Aggrieved, respondent filed an appeal before the CA, which reversed and set aside the decision of the RTC, revoked the Letters of Administration issued to Emilio III, and appointed respondent as administratrix of the intestate estate of the decedent, Cristina, to wit: WHEREFORE, in view of all the foregoing, the assailed decision dated November 9, 2001 of Branch 78, Regional Trial Court of Malolos, Bulacan in SPC No. 117-M-95 is REVERSED and SET ASIDE and the letters of administration issued by the said court to Emilio A.M. Suntay III, if any, are consequently revoked. Petitioner Isabel Cojuangco[-]Suntay is hereby appointed administratrix of the intestate estate of Cristina Aguinaldo Suntay. Let letters of administration be

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issued in her favor upon her filing of a bond in the amount of Two Hundred Thousand (P200,000.00) Pesos. No pronouncement as to costs. SO ORDERED.12 The motion for reconsideration of Emilio III having been denied, he appeals by certiorari to this Court, raising the following issues: A. IN THE APPOINTMENT OF AN ADMINISTRATOR OF THE ESTATE UNDER SECTION 6 OF RULE 78 OF THE RULES OF COURT, WHETHER ARTICLE 992 OF THE CIVIL CODE APPLIES; and B. UNDER THE UNDISPUTED FACTS WHERE HEREIN PETITIONER WAS REARED BY THE DECEDENT AND HER SPOUSE SINCE INFANCY, WHETHER ARTICLE 992 OF THE NEW CIVIL CODE APPLIES SO AS TO BAR HIM FROM BEING APPOINTED ADMINISTRATOR OF THE DECEDENTS ESTATE.13 In ruling against the petition of herein respondent, the RTC ratiocinated, thus: Evidence objectively assessed and carefully evaluated, both testimonial and documentary, the court opines that it is to the best interest of the estate of the decedent and all claimants thereto, that the Intervenor, Emilio A.M. Suntay III, be appointed administrator of the estate in the aboveentitled special proceedings. Based on the evidence and demeanor of the parties in court, [respondents immediate] family and that of the decedent are apparently estranged. The root cause of which, is not for this court to ascertain nor is this the right time and the proper forum to dwell upon. What matters most at this time is the welfare of the estate of the decedent in the light of such unfortunate and bitter estrangement. The Court honestly believes that to appoint the petitioner would go against the wishes of the decedent who raised [Emilio III] from infancy in her home in Baguio City as her own child. Certainly, it would go against the wishes of the surviving spouse x x x who nominated [Emilio III] for appointment as administrator. As between [respondent] and the oppositor [Federico], the latter is accorded preference as the surviving spouse under Sec 6(a), Rule 78, Rules of Court. On the basis of such preference, he vigorously opposed the appointment of the petitioner and instead nominated [Emilio III], his grandchild and adopted child. Such nomination, absent any valid and justifiable reason, should not be imperiously set aside and insouciantly ignored, even after the oppositor [Federico] has passed away, in order to give effect to the order of preference mandated by law. Moreover, from the viewpoint of the estate, the nomination of [Emilio III] appear[s] intrinsically meritorious. For the benefit of the estate and its claimants, creditors, as well as heirs, the administrator should be one who is prepared, academically and by experience, for the demands and responsibilities of the position. While [respondent], a practicing physician, is not unqualified, it is clear to the court that when it comes to management of real estate and the processing and payment of debts, [Emilio III],

a businessman with an established track record as a manager has a decided edge and therefore, is in a position to better handle the preservation of the estate.14 In marked contrast, the CA zeroed in on Emilio IIIs status as an illegitimate child of Emilio I and, thus, barred from representing his deceased father in the estate of the latters legitimate mother, the decedent. On the whole, the CA pronounced that Emilio III, who was merely nominated by Federico, and which nomination hinged upon the latters appointment as administrator of the decedents estate, cannot be appointed as the administrator of the decedents estate for the following reasons:15 1. The appointment of Emilio III was subject to a suspensive condition, i.e., Federicos appointment as administrator of the estate, he being the surviving spouse of Cristina, the decedent. The death of Federico before his appointment as administrator of Cristinas estate rendered his nomination of Emilio III inoperative; 2. As between the legitimate offspring (respondent) and illegitimate offspring (Emilio III) of decedents son, Emilio I, respondent is preferred, being the "next of kin" referred to by Section 6, Rule 78 of the Rules of Court, and entitled to share in the distribution of Cristinas estate as an heir; 3. Jurisprudence has consistently held that Article 99216 of the Civil Code bars the illegitimate child from inheriting ab intestato from the legitimate children and relatives of his father or mother. Thus, Emilio III, who is barred from inheriting from his grandmother, cannot be preferred over respondent in the administration of the estate of their grandmother, the decedent; and 4. Contrary to the RTCs finding, respondent is as much competent as Emilio III to administer and manage the subject estate for she possesses none of the disqualifications specified in Section 1,17 Rule 78 of the Rules of Court. The pivotal issue in this case turns on who, as between Emilio III and respondent, is better qualified to act as administrator of the decedents estate. We cannot subscribe to the appellate courts ruling excluding Emilio III in the administration of the decedents undivided estate. Mistakenly, the CA glosses over several undisputed facts and circumstances: 1. The underlying philosophy of our law on intestate succession is to give preference to the wishes and presumed will of the decedent, absent a valid and effective will; 2. The basis for Article 992 of the Civil Code, referred to as the iron curtain bar rule, 18 is quite the opposite scenario in the facts obtaining herein for the actual relationship between Federico and Cristina, on one hand, and Emilio III, on the other, was akin to the normal relationship of legitimate relatives; 3. Emilio III was reared from infancy by the decedent, Cristina, and her husband, Federico, who both acknowledged him as their grandchild;

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4. Federico claimed half of the properties included in the estate of the decedent, Cristina, as forming part of their conjugal partnership of gains during the subsistence of their marriage; 5. Cristinas properties forming part of her estate are still commingled with that of her husband, Federico, because her share in the conjugal partnership, albeit terminated upon her death, remains undetermined and unliquidated; and 6. Emilio III is a legally adopted child of Federico, entitled to share in the distribution of the latters estate as a direct heir, one degree from Federico, not simply representing his deceased illegitimate father, Emilio I. From the foregoing, it is patently clear that the CA erred in excluding Emilio III from the administration of the decedents estate. As Federicos adopted son, Emilio IIIs interest in the estate of Cristina is as much apparent to this Court as the interest therein of respondent, considering that the CA even declared that "under the law, [Federico], being the surviving spouse, would have the right of succession over a portion of the exclusive property of the decedent, aside from his share in the conjugal partnership." Thus, we are puzzled why the CA resorted to a strained legal reasoning Emilio IIIs nomination was subject to a suspensive condition and rendered inoperative by reason of Federicos death wholly inapplicable to the case at bar. Section 6, Rule 78 of the Rules of Court lists the order of preference in the appointment of an administrator of an estate: SEC. 6. When and to whom letters of administration granted. If no executor is named in the will, or the executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate, administration shall be granted:

creditor of the decedents estate. In the same vein, we declared in Delgado Vda. de De la Rosa v. Heirs of Marciana Rustia Vda. de Damian22 that: [i]n the appointment of an administrator, the principal consideration is the interest in the estate of the one to be appointed. The order of preference does not rule out the appointment of coadministrators, specially in cases where justice and equity demand that opposing parties or factions be represented in the management of the estates, a situation which obtains here. Similarly, the subject estate in this case calls to the succession other putative heirs, including another illegitimate grandchild of Cristina and Federico, Nenita Taedo, but who was likewise adopted by Federico, and the two (2) siblings of respondent Isabel, Margarita and Emilio II. In all, considering the conflicting claims of the putative heirs, and the unliquidated conjugal partnership of Cristina and Federico which forms part of their respective estates, we are impelled to move in only one direction, i.e., joint administration of the subject estate. One final note. Counsel for petitioner meticulously argues that Article 992 of the Civil Code, the successional bar between the legitimate and illegitimate relatives of a decedent, does not apply in this instance where facts indubitably demonstrate the contrary Emilio III, an illegitimate grandchild of the decedent, was actually treated by the decedent and her husband as their own son, reared from infancy, educated and trained in their businesses, and eventually legally adopted by decedents husband, the original oppositor to respondents petition for letters of administration. We are not unmindful of the critiques of civilists of a conflict and a lacuna in the law concerning the bone of contention that is Article 992 of the Civil Code, beginning with the eminent Justice J.B.L. Reyes:

In the Spanish Civil Code of 1889 the right of representation was admitted only within the legitimate family; so much so that Article 943 of that Code prescribed that an illegitimate child can not inherit ab intestato from the legitimate children and relatives of his father and mother. The Civil (a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the Code of the Philippines apparently adhered to this principle since it reproduced Article 943 of the discretion of the court, or to such person as such surviving husband or wife, or next of Spanish Code in its own Art. 992, but with fine inconsistency, in subsequent articles (990, 995 and kin, requests to have appointed, if competent and willing to serve; 998) our Code allows the hereditary portion of the illegitimate child to pass to his own descendants, whether legitimate or illegitimate. So that while Art. 992 prevents the illegitimate issue of a legitimate child from representing him in the intestate succession of the grandparent, the (b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, be incompetent or unwilling, or if the husband or widow, or next of kin, illegitimates of an illegitimate child can now do so. This difference being indefensible and neglects for thirty (30) days after the death of the person to apply for administration or to unwarranted, in the future revision of the Civil Code we shall have to make a choice and decide request that administration be granted to some other person, it may be granted to one or either that the illegitimate issue enjoys in all cases the right of representation, in which case Art. 992 must be suppressed; or contrariwise maintain said article and modify Articles 995 and 998. more of the principal creditors, if competent and willing to serve; The first solution would be more in accord with an enlightened attitude vis--vis illegitimate children.23 (c) If there is no such creditor competent and willing to serve, it may be granted to such other person as the court may select. Manresa explains the basis for the rules on intestate succession: The law [of intestacy] is founded on the presumed will of the deceased Love, it is said, first descends, then ascends, and, finally, spreads sideways. Thus, the law first calls the descendants, then the ascendants, and finally the collaterals, always preferring those closer in degree to those of remoter degrees, on the assumption that the deceased would have done so had he manifested his last will Lastly, in default of anyone called to succession or bound to the decedent by ties of blood or affection, it is in accordance with his presumed will that his property be given to charitable or educational institutions, and thus contribute to the welfare of humanity. 24

However, the order of preference is not absolute for it depends on the attendant facts and circumstances of each case.19 Jurisprudence has long held that the selection of an administrator lies in the sound discretion of the trial court.20 In the main, the attendant facts and circumstances of this case necessitate, at the least, a joint administration by both respondent and Emilio III of their grandmothers, Cristinas, estate. In the case of Uy v. Court of Appeals,21 we upheld the appointment by the trial court of a coadministration between the decedents son and the decedents brother, who was likewise a

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Indeed, the factual antecedents of this case accurately reflect the basis of intestate succession, i.e., love first descends, for the decedent, Cristina, did not distinguish between her legitimate and illegitimate grandchildren. Neither did her husband, Federico, who, in fact, legally raised the status of Emilio III from an illegitimate grandchild to that of a legitimate child. The peculiar circumstances of this case, painstakingly pointed out by counsel for petitioner, overthrow the legal presumption in Article 992 of the Civil Code that there exist animosity and antagonism between legitimate and illegitimate descendants of a deceased. Nonetheless, it must be pointed out that judicial restraint impels us to refrain from making a final declaration of heirship and distributing the presumptive shares of the parties in the estates of Cristina and Federico, considering that the question on who will administer the properties of the long deceased couple has yet to be settled. Our holding in Capistrano v. Nadurata25 on the same issue remains good law:

ELEUTERIO RIVERA, as Administrator of the Intestate Estate of Rosita L. RiveraRamirez, Petitioner, vs. ROBERT RAMIREZ and RAYMOND RAMIREZ, Respondents. DECISION ABAD, J.: This case is about a courts adjudication of non-issues and the authority of the administrator to examine and secure evidence from persons having knowledge of properties allegedly belonging to the decedents estate. The Facts and the Case

[T]he declaration of heirs made by the lower court is premature, although the evidence sufficiently shows who are entitled to succeed the deceased. The estate had hardly been judicially opened, and the proceeding has not as yet reached the stage of distribution of the estate which must come after the inheritance is liquidated. Section 1, Rule 90 of the Rules of Court does not depart from the foregoing admonition: Sec. 1. When order for distribution of residue is made. x x x. If there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be heard and decided as in ordinary cases. No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs.

The spouses Adolfo Ramirez (Adolfo) and Rosita Rivera (Rosita) were married in 1942. Their only child died in infancy. They acquired during their lifetime the Sta. Teresita General Hospital and other properties. Rosita died in September 1990, followed by her husband Adolfo in December 1993. On February 7, 1995 petitioner Eleuterio P. Rivera (Eleuterio) filed a petition for issuance of letters of administration with the Regional Trial Court (RTC) of Quezon City covering the estate of Rosita, who allegedly died without a will and with no direct ascendants or descendants. 1 Eleuterio claimed2 that he was Rositas nephew, being the son of her brother Federico. Eleuterio submitted to the intestate court a list of the names of the decedents other nephews and nieces all of whom expressed conformity to Eleuterios appointment as administrator of her estate.

On March 28, 1995 the RTC issued letters of administration appointing Eleuterio as Rositas estate administrator.3On September 6, 1995 Eleuterio submitted an initial inventory of her properties. On April 18, 1996 he filed in his capacity as administrator a motion with the court to compel the examination and production of documents relating to properties believed to be a part of her estate, WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. foremost of which was the Sta. Teresita General Hospital that respondent Robert Ramirez 74949 is REVERSED and SET ASIDE. Letters of Administration over the estate of decedent (Robert) had been managing.4 Robert claims, together with Raymond Ramirez (Raymond) and Cristina Aguinaldo-Suntay shall issue to both petitioner Emilio A.M. Suntay III and respondent Lydia Ramirez (Lydia), that they were children of Adolfo by another woman. Robert opposed the Isabel Cojuangco-Suntay upon payment by each of a bond to be set by the Regional Trial Court, issuance of the subpoena. Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-M-95. The Regional Trial Court, Branch 78, Malolos, Bulacan is likewise directed to make a determination and to declare the On joint motion of the parties, however, the RTC issued an order on March 26, 1998, suspending heirs of decedent Cristina Aguinaldo-Suntay according to the actual factual milieu as proven by the the proceedings in the case pending the resolution of a separate case involving the properties of parties, and all other persons with legal interest in the subject estate. It is further directed to settle the estate.5 Four years later or on May 16, 2002 Eleuterio, as administrator of Rositas estate, the estate of decedent Cristina Aguinaldo-Suntay with dispatch. No costs. moved for the revival of the proceedings and requested anew the production and examination of documents in Roberts possession relating to Rositas estat e. The RTC apparently never got to act on the motion. SO ORDERED. THIRD DIVISION G.R. No. 189697 June 27, 2012 Meantime, on March 25, 2005 administrator Eleuterio moved for the joint settlement in the same case of the estates of Rosita and her husband, Adolfo6 considering that the spouses properties were conjugal. Eleuterio expressed willingness to co-administer the late spouses estate with Adolfos heirs, namely, Raymond, Robert, and Lydia Ramirez. Robert agreed to the joint settlement of the estate of the deceased spouses but insisted that the court also probate the deceased Adolfos will of October 10, 1990 which Robert presented.

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As a side issue, Robert initially retained the services of Atty. Antonio Pacheo to represent him in the estate case. The lawyer had previously counseled for the late Adolfo and the hospital. But Robert and Atty. Pacheo soon had a parting of ways, resulting in the dismissal of the lawyer. Raymond, who did not see eye to eye with his brother Robert, subsequently retained the services of Atty. Pacheo to represent him in the case. This created an issue because Robert wanted the lawyer inhibited from the case considering that the latter would be working against the interest of a former client. On July 17, 2006 Eleuterio, as administrator of Rositas estate, reiterated his motion to compel examination and production of the hospitals documents in Roberts possession. On February 12, 2007 the RTC granted the administrators motion and ordered Robert to bring to court the books of account, financial statements, and other documents relating to the operations of the Sta. Teresita General Hospital. The RTC also declined to inhibit Atty. Pacheo as Raymonds counsel. Robert moved to quash the subpoena on the grounds that the documents belonged to the hospital, which had a distinct personality; that the hospital did not form part of Rositas estate; and that Eleuterio, as administrator only of Rositas estate, had no right to inspect and have access to Adolfos estate. But the RTC denied Roberts motion on June 19, 2007. Robert filed a special civil action of certiorari before the Court of Appeals (CA), 7 imputing grave abuse of discretion by the RTC for allowing the production and examination of the subject documents and for not inhibiting Atty. Pacheo from the case. On February 17, 2009 the CA rendered judgment,8 annulling the RTCs orders insofar as they granted the production and examination of the hospitals documents. Essentially, the CA ruled that Eleuterio and Rositas other collateral relatives were not her heirs since she had an adopted child in Raymond and that, consequently, Eleuterio, et al. had no standing to request production of the hospitals documents or to institute the petition for the settlement of her estate. The CA affirmed, however, the noninhibition of Atty. Pacheo from the case. Eleuterios motion for reconsideration having been denied, he filed the present petition for review. Issues Presented The case presents two issues: 1. Whether or not the CA erred in ruling that Eleuterio and his relatives were not Rositas heirs and, therefore, had no right to institute the petition for the settlement of her estate or to seek the production and examination of the hospitals documents; and 2. Whether or not the CA erred in ruling that Eleuterio, et al. had no standing to subpoena the specified documents in Roberts possession. Ruling of the Court One. The CA held that based on the article Women Physicians of the World9 found in the record of the case before it, the late Rosita, a physician, had adopted Raymond as her child. An adopted child, said the CA, is deemed a legitimate child of the adopter. This being the case, Raymonds presence barred Eleuterio and Rositas other collateral relatives from inheriting intestate from her.10 A further consequence is that they also did not have the right to seek the production and examination of the documents allegedly in Roberts possession.

But, whether or not the late Rosita had judicially adopted Raymond as her child is a question of fact that had neither been considered nor passed upon by the RTC in a direct challenge to the claim of Eleuterio and Rositas other collateral relatives that they have the right to inherit from her. The relevant issue before the RTC was only whether or not the duly appointed administrator of Rositas estate had the right to the production and examination of the documents believed to be in Roberts possession. Indeed, one of the reasons Robert brought the special civil action of certiorari before the CA is that Eleuterio had no right to inspect the requested documents and have access to Adolfos estate when Eleuterios authority as administrator extended only to Rositas estate. The Court understands the CAs commendable desire to minimize multiple appeals. But the issues regarding the late Rositas supposed judicial adoption of Raymond as her child and the consequent absence of right on the part of Eleuterio, et al. to file a petition for the settlement of Rositas estate were never raised and properly tried before the RTC. Consequently, the CA gravely abused its discretion in adjudicating such issues and denying Eleuterio and his relatives their right to be heard on them. Two. As for the right of the administrator of Rositas estate to the production and examination of the specified documents believed to be in Roberts possession, Section 6, Rule 87 of the Rules of Court provides that these can be allowed based on the administrators belief that the person named in the request for subpoena has documents in his possession that tend to show the decedents right to real or personal property. Thus: Section 6. Proceedings when property concealed, embezzled, or fraudulently conveyed. If an executor or administrator, heir, legatee, creditor, or other individual interested in the estate of the deceased, complains to the court having jurisdiction of the estate that a person is suspected of having concealed, embezzled, or conveyed away any of the money, goods or chattels of the deceased, or that such person has in his possession or has knowledge of any deed, conveyance, bond, contract or other writing which contains evidence of or tends to disclose the right, title, interest, or claim of the deceased to real or personal estate, or the last will and testament of the deceased, the Court may cite such suspected person to appear before it and may examine him on oath on the matter of such complaint; and if the person so cited refuses to appear, or to answer on such examination or such interrogatories as are put to him, the court may punish him for contempt, and may commit him to prison until he submits to the order of the court. The interrogatories put to any such person, and his answers thereto, shall be in writing and shall be filed in the clerks office. (Emphasis supplied) The production and examination is nothing to be afraid of since the intestate court has no authority to decide who the decedents heirs are in connection with such incident which is confined to the examination of documents which may aid the administrator in determining properties believed to belong to the decedents estate. What is more, that court has no authority to decide the question of whether certain properties belong to the estate or to the person sought to be examined. 11 In fact, if after the examination the court has good reason to believe that the person examined is in possession of properties that belong to the deceased, the administrator cannot detain the property. He has to file an ordinary action for recovery of the properties.12 The purpose of the production and examination of documents is to elicit information or secure evidence from persons suspected of having possession of, or knowledge of properties suspected of belonging to the estate of the deceased. The procedure is inquisitorial in nature, designed as an economical and efficient mode of discovering properties of the estate.13

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WHEREFORE, the Court GRANTS the petition, REVERSES the decision of the Court of Appeals in CA-G.R. SP 100203 dated February 17, 2009, and REINSTATES the February 12, 2007 order of the Regional Trial Court of Quezon City in Special Proceedings Q-95-22919 granting petitioner Eleuterio P. Riveras motion to compel examination and production of document dated July 17, 2006. SO ORDERED. SECOND DIVISION G.R. No. 186722 June 18, 2012

On the other hand, respondents argued3 that petitioner was engaged in forum shopping, since the fact of marriage between Anastacia and Raymundo was an important issue to be resolved in another case. Docketed as SP. PROC. No. 16171-CEB, the case involved a petition for the judicial declaration of the heirs of decedent Anastacia (first petition). They next asserted that the United Abangan Clan was estopped from questioning the late registration of the marriage, which petitioner had failed to contest after the publication of the Notice of Delayed Registration. They then averred that it failed to exhaust administrative remedies, as it did not appeal the decision of the Civil Registrar to a higher office. Finally, they claimed that the marriage of Anastacia and Raymundo had been established by means of an ancient document found in the church records of the Santo Tomas de Villanueva Parish.

On 6 February 2009, the RTC issued a Resolution4 dismissing the Petition for cancellation of the entry in the Register of Marriages (second petition) on the ground of litis pendentia. According to the trial court, the first petition (SP. PROC. No. 16171-CEB) and the second petition (SP. PROC. The United Abangan Clan, Inc., Represented by Cristituto F. Abangan, Petitioner, No. 16180-CEB), which were both initiated by petitioner, involved the same parties and concerned vs. the same issues and reliefs prayed for. The trial court explained that any decision on the first Yolanda C. Sabellano-Sumagang, Ernesto Tiro, Basilisa Cabellon-Moreno, Martin C. Tabura, petition would necessarily constitute res judicata in the present case, since the ultimate purpose of Jr., Romualdo C. Tabura, Rolando Cabellon, represented by Rolando Cabellon, and the the second petition was to assert heirship and the right of succession over the inheritance left by honorable city civil registrar of Cebu City, Respondents. Anastacia. Finally, the RTC declared that the present petition was still premature, because petitioner should have first brought the issue to the attention of the Civil Registrar pursuant to the doctrine of primary administrative jurisdiction. RESOLUTION SERENO, J.: Before the Court is a Petition for Review on Certiorari filed under Rule 45 in relation to Rule 41, Section 2(c) of the Rules of Court pertaining to appeals involving pure questions of law. The petition assails the 6 February 2009 Resolution of the Regional Trial Court (RTC), 1 which dismissed the action of United Abangan Clan, Inc. (United Abangan Clan) for the cancellation of the entry in the Register of Marriages of the City Civil Registrar of Cebu City (Civil Registrar), involving the alleged marriage of Anastacia Abangan (Anastacia) to Raymundo Cabellon (Raymundo). Petitioner United Abangan Clan is an association comprised of members who are supposedly the collateral relatives and nearest intestate heirs of Anastacia. Respondents Yolanda C. Sabellano-Sumagang, Ernesto Tiro, Basilisa Cabellon-Moreno, Martin C. Tabura, Jr., Romualdo C. Tabura, and Rolando Cabellon (Cabellon Descendants) are the purported grandchildren and great-grandchildren of Anastacia and Raymundo. The present case stemmed from the registration of the purported marital union between the late Anastacia and Raymundo. They were allegedly married on 18 February 1873 at the Santo Tomas de Villanueva Parish in El Pardo, Cebu City. A delayed registration of the marriage was entered in the records of the Civil Registrar, and a Certificate of Marriage issued sometime in September 2007 or 134 years after their purported matrimonial bond. The petition for late registration was filed by Rolando Cabellon, Edith T. Casas, and Imelda T. Casugay, who were allegedly the true legal heirs and descendants of Anastacia and Raymundo. On 19 May 2008, the United Abangan Clan filed a Petition seeking the cancellation of the entry in the Register of Marriages. It averred2 that Anastacia died single and without issue. It then posited that the claimed marriage could not be registered under Act No. 3753, because it had ostensibly taken place before 27 February 1931, which was the date of effectivity of the law. Furthermore, petitioner contended that it was not Anastacia and Raymundo who had filed the application for the late registration of their marriage, and that there was failure to show cause for the delay in registration. Issue The sole issue before this Court is whether or not the instant petition was properly dismissed on the ground of litis pendentia. Discussion Litis pendentia, as a ground for the dismissal of an action, refers to a situation in which another action is pending between the same parties for the same cause of action, and the second action becomes unnecessary and vexatious.5 In order to successfully invoke the rule, the movant must prove the existence of the following requisites: (a) the identity of parties, or at least like those representing the same interest in both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two (2) cases, such that the judgment that may be rendered in the pending case would, regardless of which party is successful, amount to res judicata in the other.6 The crucial consideration in litis pendentia is the identity and similarity of the issues under litigation.7 As early as in J. Northcott & Co., Inc. v. Villa-Abrille, we ruled: "One of the recognized tests of such identity is to discover whether a judgment in the prior action would be conclusive as to the liability sought to be enforced in the second and would operate as a bar to the latter. In other words, if a final judgment in the prior action, be it of whatsoever character it may, would support the plea of res judicata in the second, the two suits may be considered identical; otherwise not." 8 There is no identity and similarity between the first and the second petitions with respect to the issues under litigation.1wphi1 The action in the prior Petition (SP. PROC. No. 16171-CEB) involves a judicial declaration of heirship, while the main issue in the present one (SP. PROC. No. 16180-CEB) pertains to a cancellation of entry in the civil register. An action for declaration of heirship (declaracion de herederos) refers to a special proceeding in which a person claiming the status of heir seeks prior judicial declaration of his or her right to inherit from a decedent. 9 On the

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other hand, an action for cancellation of entry in the civil register refers to a special proceeding whereby a substantial change affecting the civil status of a party is sought through the amendment of the entry in the civil register.10 In the former, what is established is a partys right of succession to the decedent; in the latter, among those settled are the issues of nationality, paternity, filiation, legitimacy of the marital status, and registrability of an event affecting the status or nationality of an individual. Because the respective subject matters in the two actions differ, any decision that may be rendered in one of them cannot constitute res judicata in the other. A judicial declaration of heirship is inconclusive on the fact of occurrence of an event registered or to be registered in the civil register, while changes in the entries in the civil register do not in themselves settle the issue of succession. WHEREFORE, the Petition is GRANTED. The 6 February 2009 Resolution of the Cebu City RTC in SP. PROC. No. 16180-CEB is REVERSED and SET ASIDE. We hereby order the REMAND of the case (SP. PROC. No. 16180-CEB) to the RTC for a trial on the merits. SO ORDERED. SECOND DIVISION G.R. No. 194366 October 10, 2012

embraced by Original Certificate of Title (OCT) Nos. (P-7998) P-21285, (P-14608) P-51536 and P20551 (P-8348)7issued on February 15, 1957, August 27, 1962 and July 7, 1967, respectively. On September 21, 1977, Anunciacion died intestate. Her husband, Enrique, in his personal capacity and as natural guardian of his minor children Rosa and Douglas, together with Napoleon, Alicia, and Vismindaexecuted an Extra-Judicial Settlement of the Estate with Absolute Deed of Sale8 on July 7, 1979, adjudicating among themselves the said homestead properties, and thereafter, conveying themto the late spouses Hadji Yusop Uy and Julpha Ibrahim Uy (spouses Uy)for a consideration of P 80,000.00. On June 11, 1996, the children of Enrique filed a complaint for annulment of saleof the said homestead properties against spouses Uy (later substituted by their heirs)before the RTC, docketed as Civil Case No.96-28, assailing the validity of the sale for having been sold within the prohibited period. Thecomplaint was later amended to include Eutropia and Victoriaas additional plaintiffs for having been excluded and deprived of their legitimes as childrenof Anunciacion from her first marriage. In their amended answer with counterclaim, the heirs of Uy countered that the sale took place beyond the 5-year prohibitory period from the issuance of the homestead patents. They also denied knowledge of Eutropia and Victorias exclusionfrom the extrajudicial settlement and sale of the subject properties, and interposed further the defenses of prescription and laches. The RTC Ruling On October 25, 2004, the RTC rendered a decision ordering, among others, the annulment of the Extra-Judicial Settlement of the Estate with Absolute Deed of Sale. It ruled that while the sale occurred beyond the 5-year prohibitory period, the sale is still void because Eutropia and Victoria were deprived of their hereditary rights and that Enrique had no judicial authority to sell the shares of his minor children, Rosa and Douglas. Consequently, it rejected the defenses of laches and prescription raised by spouses Uy, who claimed possession of the subject properties for 17 years, holding that co-ownership rights are imprescriptible. The CA Ruling On appeal, the CAreversed and set aside the ruling of the RTC in its April 27, 2010 Decision and dismissed the complaint of the petitioners. It held that, while Eutropia and Victoria had no knowledge of the extrajudicial settlement and sale of the subject properties and as such, were not bound by it, the CA found it unconscionable to permit the annulment of the sale considering spouses Uys possession thereof for 17 years, and thatEutropia and Victoriabelatedlyfiled their actionin 1997, ormore than two years fromknowledge of their exclusion as heirs in 1994 when their stepfather died. It, however, did not preclude the excluded heirs from recovering their legitimes from their co-heirs. Similarly, the CA declared the extrajudicial settlement and the subsequent saleas valid and binding with respect to Enrique and hischildren, holding that as co-owners, they have the right to dispose of their respective shares as they consider necessary or fit.While recognizing Rosa and Douglas to be minors at that time, they were deemed to have ratified the sale whenthey failed to question it

NAPOLEON D. NERI, ALICIA D. NERI-MONDEJAR, VISMINDA D. NERI-CHAMBERS, ROSA D. NERI-MILLAN, DOUGLAS D. NERI, EUTROPIA D. ILLUT-COCKINOS AND VICTORIA D. ILLUT-PIALA, Petitioners, vs. HEIRS OF HADJI YUSOP UY AND JULPHA* IBRAHIM UY, Respondents. DECISION PERLAS-BERNABE, J.: In this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, petitioners Napoleon D. Neri (Napoleon), Alicia D. Neri-Mondejar (Alicia), Visminda D. Neri-Chambers (Visminda), Rosa D. Neri-Millan (Rosa), Douglas D. Neri (Douglas), Eutropia D. Illut-Cockinos (Eutropia), and Victoria D. Illut-Piala (Victoria) seek to reverse and set aside the April 27, 2010 Decision2 and October 18, 2010 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 01031-MIN which annulled the October 25, 2004 Decision4 of the Regional Trial Court (RTC) of Panabo City, Davao del Norte and instead, entered a new one dismissing petitioners complaint for annulment of sale, damages and attorneys feesagainst herein respondents heirs of spouses Hadji Yusop Uy and Julpha Ibrahim Uy (heirs of Uy). The Facts During her lifetime, Anunciacion Neri (Anunciacion) had seven children, two (2) from her first marriage with Gonzalo Illut (Gonzalo), namely: Eutropia and Victoria, and five (5) from her second marriage with Enrique Neri (Enrique), namely: Napoleon, Alicia, Visminda, Douglas and Rosa. Throughout the marriage of spouses Enrique and Anunciacion, they acquired several homestead properties with a total area of 296,555 square meters located in Samal, Davao del Norte,

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upon reaching the age of majority.Italso found laches to have set in because of their inaction for a long period of time. The Issues In this petition, petitioners imputeto the CA the following errors: I. WHEN IT UPHELDTHE VALIDITY OF THE "EXTRA JUDICIAL SETTLEMENT OF THE ESTATE WITH ABSOLUTE DEED OF SALE" AS FAR AS THE SHARES OF EUTROPIA AND VICTORIA WERE CONCERNED, THEREBY DEPRIVING THEM OF THEIR INHERITANCE; II. WHEN IT DID NOT NULLIFY OR ANNUL THE "EXTRA JUDICIAL SETTLEMENT OF THE ESTATE WITH ABSOLUTE DEED OF SALE" WITH RESPECT TO THE SHARESOF ROSA AND DOUGLAS, THEREBY DEPRIVING THEM OF THEIR INHERITANCE; and III. WHEN IT FOUND THAT LACHES OR PRESCRIPTION HAS SET IN. The Ruling of the Court The petitionis meritorious. It bears to stress that all the petitioners herein are indisputably legitimate children of Anunciacion from her first and second marriages with Gonzalo and Enrique, respectively, and consequently, are entitled to inherit from her in equal shares, pursuant to Articles 979 and 980 of the Civil Code which read: ART. 979. Legitimate children and their descendants succeed the parents and other ascendants, without distinction as to sex or age, and even if they should come from different marriages. xxx ART. 980. The children of the deceased shall always inherit from him in their own right, dividing the inheritance in equal shares. As such, upon the death of Anunciacion on September 21, 1977, her children and Enrique acquired their respective inheritances,9 entitling them to their pro indiviso shares in her whole estate, as follows: Enrique Eutropia Victoria 9/16 (1/2 of the conjugal assets + 1/16) 1/16 1/16

Rosa Douglas

1/16 1/16

Hence, in the execution of the Extra-Judicial Settlement of the Estate with Absolute Deed of Sale in favor of spouses Uy, all the heirs of Anunciacionshould have participated. Considering that Eutropia and Victoria were admittedly excluded and that then minors Rosa and Douglas were not properly represented therein, the settlement was not valid and binding uponthem and consequently, a total nullity. Section 1, Rule 74 of the Rules of Court provides: SECTION 1. Extrajudicial settlement by agreement between heirs. x x x The fact of the extrajudicial settlement or administration shall be published in a newspaper of general circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof. (Underscoring added) The effect of excluding the heirs in the settlement of estate was further elucidated in Segura v. Segura,10 thus: It is clear that Section 1 of Rule 74 does not apply to the partition in question which was null and void as far as the plaintiffs were concerned. The rule covers only valid partitions. The partition in the present case was invalid because it excluded six of the nine heirs who were entitled to equal shares in the partitioned property. Under the rule "no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof." As the partition was a total nullity and did not affect the excluded heirs, it was not correct for the trial court to hold that their right to challenge the partition had prescribed after two years from its execution However, while the settlement of the estate is null and void, the subsequent sale of the subject propertiesmade by Enrique and his children, Napoleon, Alicia and Visminda, in favor of the respondents isvalid but only with respect to their proportionate shares therein.It cannot be denied that these heirs have acquired their respective shares in the properties of Anunciacion from the moment of her death11and that, as owners thereof, they can very well sell their undivided share in the estate.12 With respect to Rosa and Douglas who were minors at the time of the execution of the settlement and sale, their natural guardian and father, Enrique, represented them in the transaction. However, on the basis of the laws prevailing at that time, Enrique was merely clothed with powers of administration and bereft of any authority to dispose of their 2/16 shares in the estate of their mother, Anunciacion. Articles 320 and 326 of the Civil Code, the laws in force at the time of the execution of the settlement and sale, provide: ART. 320. The father, or in his absence the mother, is the legal administrator of the property pertaining to the child under parental authority. If the property is worth more than two thousand pesos, the father or mother shall give a bond subject to the approval of the Court of First Instance.

Napoleon 1/16 Alicia 1/16

Visminda 1/16

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ART. 326. When the property of the child is worth more than two thousand pesos, the father or mother shall be considered a guardian of the childs property, subject to the duties and obligations of guardians under the Rules of Court. Corollarily, Section 7, Rule 93 of the Rules of Court also provides: SEC. 7. Parents as Guardians. When the property of the child under parental authority is worth two thousand pesos or less, the father or the mother, without the necessity of court appointment, shall be his legal guardian. When the property of the child is worth more than two thousand pesos, the father or the mother shall be considered guardian of the childs property, with the duties and obligations of guardians under these Rules, and shall file the petition required by Section 2 hereof. For good reasons, the court may, however, appoint another suitable persons. Administration includes all acts for the preservation of the property and the receipt of fruits according to the natural purpose of the thing. Any act of disposition or alienation, or any reduction in the substance of the patrimony of child, exceeds the limits of administration. 13 Thus, a father or mother, as the natural guardian of the minor under parental authority, does not have the power to dispose or encumber the property of the latter. Such power is granted by law only to a judicial guardian of the wards property and even then only with courts prior approval secured in accordance with the proceedings set forth by the Rules of Court. 14 Consequently, the disputed sale entered into by Enrique in behalf of his minor children without the proper judicial authority, unless ratified by them upon reaching the age of majority, 15 is unenforceable in accordance with Articles 1317 and 1403(1) of the Civil Code which provide: ART. 1317. No one may contract in the name of another without being authorized by the latter or unless he has by law a right to represent him.

Records, however, show that Rosa had ratified the extrajudicial settlement of the estate with absolute deed of sale. In Napoleon and Rosas Manifestation18 before the RTC dated July 11, 1997,they stated: "Concerning the sale of our parcel of land executed by our father, Enrique Neri concurred in and conformed to by us and our other two sisters and brother (the other plaintiffs), in favor of Hadji Yusop Uy and his spouse Hadja Julpa Uy on July 7, 1979, we both confirmed that the same was voluntary and freely made by all of us and therefore the sale was absolutely valid and enforceable as far as we all plaintiffs in this case are concerned;" (Underscoring supplied) In their June 30, 1997 Joint-Affidavit,19 Napoleon and Rosa also alleged: "That we are surprised that our names are included in this case since we do not have any intention to file a case against Hadji Yusop Uy and Julpha Ibrahim Uy and their family and we respect and acknowledge the validity of the Extra-Judicial Settlement of the Estate with Absolute Deed of Sale dated July 7, 1979;" (Underscoring supplied) Clearly, the foregoing statements constitutedratification of the settlement of the estate and the subsequent sale, thus, purging all the defects existing at the time of its execution and legitimizing the conveyance of Rosas 1/16 share in the estate of Anunciacion to spouses Uy. The same, however, is not true with respect to Douglas for lack of evidence showing ratification. Considering, thus, that the extrajudicial settlement with sale is invalid and therefore, not binding on Eutropia, Victoria and Douglas, only the shares ofEnrique, Napoleon, Alicia, Visminda and Rosa in the homestead properties have effectivelybeen disposed in favor of spouses Uy. "A person can only sell what he owns, or is authorized to sell and the buyer can as a consequence acquire no more than what the sellercan legally transfer."20 On this score, Article 493 of the Civil Codeis relevant, which provides:

A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining impliedly, by the person on whose behalf it has been executed, before it is revoked by the other thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person contracting party. in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. ART. 1403. The following contracts are unenforceable, unless they are ratified: (1) Those entered into the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; xxx Ratification means that one under no disability voluntarily adopts and gives sanction to some unauthorized act or defective proceeding, which without his sanction would not be binding on him. It is this voluntary choice, knowingly made, which amounts to a ratification of what was theretofore unauthorized, and becomes the authorized act of the party so making the ratification. 16 Once ratified, expressly or impliedly such as when the person knowingly received benefits from it, the contract is cleansed from all its defects from the moment it was constituted, 17 as it has a retroactive effect. Consequently, spouses Uy or their substituted heirs became pro indiviso co-owners of the homestead properties with Eutropia, Victoria and Douglas, who retained title to their respective 1/16 shares. They were deemed to be holding the 3/16 shares of Eutropia, Victoria and Douglas under an implied constructive trust for the latters benefit, c onformably with Article 1456 of the Civil Code which states:"if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes." As such, it is only fair, just and equitable that the amount paid for their shares equivalent to P 5,000.0021 each or a total of P 15,000.00 be returned to spouses Uy with legal interest. On the issue of prescription, the Court agrees with petitioners that the present action has not prescribed in so far as it seeks to annul the extrajudicial settlement of the estate. Contrary to the ruling of the CA, the prescriptive period of 2 years provided in Section 1 Rule 74 of the Rules of

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Court reckoned from the execution of the extrajudicial settlement finds no application to petitioners Eutropia, Victoria and Douglas, who were deprived of their lawful participation in the subject estate. Besides, an "action or defense for the declaration of the inexistence of a contract does not prescribe" in accordance with Article 1410 of the Civil Code. However, the action to recover property held in trust prescribes after 10 years from the time the cause of action accrues,22 which is from the time of actual notice in case of unregistered deed. 23 In this case, Eutropia, Victoria and Douglas claimed to have knowledge of the extrajudicial settlement with sale after the death of their father, Enrique, in 1994 which spouses Uy failed to refute. Hence, the complaint filed in 1997 was well within the prescriptive period of 10 years. WHEREFORE, the instant petition is GRANTED. The April 27, 2010 Decision and October 18, 2010 Resolution of the Court of Appeals are REVERSED and SET ASIDE and a new judgment is entered: 1. Declaring the Extra-Judicial Settlement of the Estate of Anunciacion Neri NULL and VOID; 2. Declaring the Absolute Deed of Sale in favor of the late spouses Hadji Yusop Uy and Julpha Ibrahim Uy as regards the 13/16 total shares of the late Enrique Neri, Napoleon Neri, Alicia D. Neri-Mondejar, Visminda D. Neri-Chambers and Rosa D. NeriMillan VALID; 3. Declaring Eutropia D. Illut-Cockinos, Victoria D. Illut-Piala and Douglas D. Neri as the LAWFUL OWNERSof the 3/16 portions of the subject homestead properties, covered by Original Certificate of Title Nos. (P-7998) P-2128, (P-14608) P-5153 and P20551 (P-8348); and 4. Ordering the estate of the late Enrique Neri, as well as Napoleon Neri, Alicia D. NeriMondejar, Visminda D. Neri-Chambers and Rosa D. Neri-Millan to return to the respondents jointly and solidarily the amount paid corresponding to the 3/16 shares of Eutropia, Victoria and Douglas in the total amount of P 15,000.00, with legal interest at 6% per annum computed from the time of payment until finality of this decision and 12% per annum thereafter until fully paid. No pronouncement as to costs. SO ORDERED. THIRD DIVISION G.R. No. 180168 February 27, 2012

PERALTA, J. Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking the reversal and setting aside of the June 19, 2007 Decision1 and the October 11, 2007 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 79325. The assailed CA Decision affirmed with modification the Decision3 dated March 21, 2003 of the Regional Trial Court (RTC) of Quezon City, Branch 224, in Civil Case No. Q-98-34395, while the CA Resolution denied petitioner's Motion for Reconsideration. The factual and procedural antecedents are as follows: In September 1990, herein petitioner Manila International Airport Authority (MIAA) entered into a contract of lease with herein respondent Avia Filipinas International Corporation (AFIC), wherein MIAA allowed AFIC to use specific portions of land as well as facilities within the Ninoy Aquino International Airport exclusively for the latter's aircraft repair station and chartering operations. The contract was for one (1) year, beginning September 1, 1990 until August 31, 1991, with a monthly rental of P6,580.00. In December 1990, MIAA issued Administrative Order No. 1, Series of 1990, which revised the rates of dues, charges, fees or assessments for the use of its properties, facilities and services within the airport complex. The Administrative Order was made effective on December 1, 1990. As a consequence, the monthly rentals due from AFIC was increased to P15,996.50. Nonetheless, MIAA did not require AFIC to pay the new rental fee. Thus, it continued to pay the original fee of P6,580.00. After the expiration of the contract, AFIC continued to use and occupy the leased premises giving rise to an implied lease contract on a monthly basis. AFIC kept on paying the original rental fee without protest on the part of MIAA. Three years after the expiration of the original contract of lease, MIAA informed AFIC, through a billing statement dated October 6, 1994, that the monthly rental over the subject premises was increased to P15,966.50 beginning September 1, 1991, which is the date immediately following the expiration of the original contract of lease. MIAA sought recovery of the difference between the increased rental rate and the original rental fee amounting to a total of P347,300.50 covering thirtyseven (37) months between September 1, 1991 and September 31, 1994. Beginning October 1994, AFIC paid the increased rental fee. However, it refused to pay the lump sum ofP347,300.50 sought to be recovered by MIAA. For the continued refusal of AFIC to pay the said lump sum, its employees were denied access to the leased premises from July 1, 1997 until March 11, 1998. This, notwithstanding, AFIC continued paying its rentals. Subsequently, AFIC was granted temporary access to the leased premises. AFIC then filed with the RTC of Quezon City a Complaint for damages with injunction against MIAA and its General Manager seeking uninterrupted access to the leased premises, recovery of actual and exemplary damages, refund of its monthly rentals with interest at the time that it was denied access to the area being rented as well as attorney's fees. In its Answer with Counterclaim, MIAA contended that under its lease contract with AFIC, MIAA is allowed to either increase or decrease the monthly rental; AFIC has rental arrears in the amount of P347,300.50; AFIC was wrong in claiming that MIAA took the law into its own hands in denying AFIC and its employees access to the leased premises, because under the lease contract, in case

MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner, vs. AVIA FILIPINAS INTERNATIONAL, INC., Respondent. DECISION

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of failure on the part of AFIC to pay rentals for at least two (2) months, the contract shall become MIAA filed a Motion for Reconsideration, but the CA denied it via its Resolution dated October 11, automatically terminated and canceled without need of judicial action or process and it shall be 2007. lawful for MIAA or any person or persons duly authorized on its behalf to take possession of the property either by padlocking the premises or posting its guards to prevent the entry of any person. Hence, the present petition for review on certiorari raising the following issues: MIAA prayed for the award of exemplary damages as well as attorney's fees and litigation expenses. WHETHER THE HONORABLE COURT OF APPEALS CORRECTLY INTERPRETED THE PROVISIONS OF THE LEASE CONTRACT IN LINE WITH THE PROVISIONS OF On March 21, 2003, the RTC rendered its Decision, the dispositive portion of which reads as THE CIVIL CODE AND EXISTING JURISPRUDENCE ON CONTRACTS. follows: WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff [AFIC] and as against the defendants [MIAA] ordering the latter to pay plaintiff the following: a) the amount of P2,000,000.00 as actual damages; b) the amount of P200,000.00 as exemplary damages; c) to refund the monthly rental payments beginning July 1, 1997 up [to] March 11, 1998 with interest at twelve (12%) percent; d) the amount of P100,000.00 as attorney's fees; e) cost of suit. IT IS SO ORDERED.4 MIAA filed an appeal with the CA contending that the RTC erred in: (1) finding that MIAA is not entitled to apply the increase in rentals as against AFIC; (2) finding that MIAA is not entitled to padlock the leased premises or post guards to prevent entry of AFIC therein; and (3) awarding actual and exemplary damages and attorney's fees. On June 19, 2007, the CA rendered its assailed Decision, the dispositive portion of which reads, thus: WHEREFORE, premises considered, the decision of the Regional Trial Court of Quezon City in Civil Case No. Q-98-34395 is hereby AFFIRMED with MODIFICATION. The awards of actual/compensatory damages and exemplary damages are deleted. The refund of monthly rental payments from July 1, 1997 to March 11, 1998 shall earn interest of six percent (6%) per annum from the date of the filing of the complaint until the finality of this decision. An interest of twelve percent (12%) per annum shall be imposed upon any unpaid balance from such finality until the judgment amount is fully satisfied. The award of attorney's fees stands. SO ORDERED.5 WHETHER THE PRINCIPLE OF UNJUST ENRICHMENT IS APPLICABLE TO THE INSTANT CASE. WHETHER RESPONDENT IS ENTITLED TO ATTORNEY'S FEES.6 Petitioner MIAA contends that, as an administrative agency possessed of quasi-legislative and quasi-judicial powers as provided for in its charter, it is empowered to make rules and regulations and to levy fees and charges; that its issuance of Administrative Order No. 1, Series of 1990 is pursuant to the exercise of the abovementioned powers; that by signing the lease contract, respondent AFIC already agreed and gave its consent to any further increase in rental rates; as such, the provisions of the lease contract being cited by the CA which provides that "any amendment, alteration or modification [of the lease contract] shall not be valid and binding, unless and until made in writing and signed by the parties thereto" is deemed complied with because respondent already consented to having any subsequent amendments to Administrative Order No. 1 automatically incorporated in the lease contract; that the above-quoted provisions should not also be interpreted as having the effect of limiting the authority of MIAA to impose new rental rates in accordance with its authority under its charter. Petitioner also argues that it is not guilty of unjust enrichment when it denied respondent access to the leased premises, because there is nothing unlawful in its act of imposing sanctions against respondent for the latter's failure to pay the increased rental. Lastly, petitioner avers that respondent is not entitled to attorney's fees, considering that it was not compelled to litigate and incur expenses to protect its interest by reason of any unjustified act on the part of petitioner. Petitioner reiterates that it was merely exercising its right as the owner and administrator of the leased property and, as such, its acts may not be deemed unwarranted. The petition lacks merit. Article 1306 of the Civil Code provides that "[t]he contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy." Moreover, Article 1374 of the Civil Code clearly provides that "[t]he various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly." Indeed, in construing a contract, the provisions thereof should not be read in isolation, but in relation to each other and in their entirety so as to render them effective, having in mind the intention of the parties and the purpose to be achieved. 7 In other words, the stipulations in a contract and other contract documents should be interpreted together with the end in view of giving effect to all.8

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In the present case, the Court finds nothing repugnant to law with respect to the questioned provisions of the contract of lease between petitioner and respondent. It is true that Article II, Paragraph 2.04 of the Contract of Lease states that "[a]ny subsequent amendment to Administrative Order No. 4, Series of 1982, which will effect a decrease or escalation of the monthly rental or impose new and additional fees and charges, including but not limited to government/MIAA circulars, rules and regulation to this effect, shall be deemed incorporated herein and shall automatically amend this Contract insofar as the monthly rental is concerned."9 However, the Court agrees with the CA that the abovequoted provision of the lease contract should not be read in isolation. Rather, it should be read together with the provisions of Article VIII, Paragraph 8.13, which provide that "[a]ny amendment, alteration or modification of th[e] Contract shall not be valid and binding, unless and until made in writing and signed by the parties thereto."10 It is clear from the foregoing that the intention of the parties is to subject such amendment to the conformity of both petitioner and respondent. In the instant case, there is no showing that respondent gave his acquiescence to the said amendment or modification of the contract. The situation is different with respect to the payments of the increased rental fee made by respondent beginning October 1994 because by then the amendment to the contract was made in writing through a bill sent by petitioner to respondent.11 The fact that respondent subsequently settled the said bill proves that he acceded to the increase in rental fee. The same may not be said with respect to the questioned rental fees sought to be recovered by petitioner between September 1991 and September 1994 because no bill was made and forwarded to respondent on the basis of which it could have given or withheld its conformity thereto. It may not be amiss to point out that during the abovementioned period, respondent continued to pay and petitioner kept on receiving the original rental fee of P6,580.00 without any reservations or protests from the latter.12 Neither did petitioner indicate in the official receipts it issued that the payments made by respondent constitute only partial fulfillment of the latter's obligations. Article 1235 of the Civil Code clearly states that "[w]hen the obligee accepts the performance knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with." For failing to make any protest or objection, petitioner is already estopped from seeking recovery of the amount claimed.

Article 22 of the same Code also states that "[e]very person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him." In accordance with jurisprudence, there is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.13 The principle of unjust enrichment essentially contemplates payment when there is no duty to pay, and the person who receives the payment has no right to receive it.14 In the instant case, it is clear that petitioner failed to maintain respondent in the peaceful and adequate enjoyment of the leased premises by unjustifiably preventing the latter access thereto. Consequently, in accordance with Article 1658 of the Civil Code, respondent had no duty to make rent payments. Despite that, respondent still continued to pay the rental fees agreed upon in the original contract. Thus, it would be the height of inequity and injustice as well as unjust enrichment on the part of petitioner if the rental fees paid by respondent during the time that it was denied access to and prevented from using the leased premises be not returned to it. 1wphi1 With respect to attorney's fees, the Court finds no error on the part of the CA in sustaining such award on the ground that petitioner's act of denying respondent and its employees access to the leased premises has compelled respondent to litigate and incur expenses to protect its interest.15 The Court likewise agrees with the CA that, under the circumstances prevailing in the present case, attorney's fees may be granted on grounds of justice and equity. 16 Finally, the Court deems it proper to reiterate the provisions of Supreme Court Administrative Circular No. 10-2000 which enjoins all judges of lower courts to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units. WHEREFORE, the petition is DENIED. The June 19, 2007 Decision and October 11, 2007 Resolution of the Court of Appeals in CA-G.R. CV No. 79325 are AFFIRMED. The Regional Trial Court of Quezon City, Branch 224 isORDERED to comply with the directives of Supreme Court Administrative Circular No. 10-2000.

Anent the second issue, since it has been established that petitioner has no legal basis in requiring respondent to pay additional rental fees from September 1, 1991 to September 30, 1994, it, thus, SO ORDERED. follows that petitioner's act of denying respondent and its employees access to the leased premises from July 1, 1997 until March 11, 1998, by reason of respondent's non-payment of the said additional fees, is likewise unjustified. Under Paragraph 3, Article 1654 of the Civil Code, the lessor is obliged "[t]o maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract." Moreover, Article 1658 of the same Code provides that "[t]he lessee may suspend the payment of the rent in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased." Furthermore, as correctly cited by the RTC, Article 19 of the Civil Code provides that "[e]very person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." G.R. No. 173155

THIRD DIVISION March 21, 2012

R.S. TOMAS, INC., Petitioner, vs. RIZAL CEMENT COMPANY, INC., Respondent. DECISION PERALTA, J.:

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This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner R.S. Tomas, Inc. against respondent Rizal Cement Company, Inc. assailing the Court of Appeals (CA) Decision1 dated December 19, 2005 and Resolution2 dated June 6, 2006 in CA-G.R. CV No. 61049. The assailed decision reversed and set aside the Regional Trial Court3 (RTC) Decision4 dated June 5, 1998 in Civil Case No. 92-1562. The facts of the case, as culled from the records, are as follows: On December 28, 1990, respondent and petitioner entered into a Contract 5 for the supply of labor, materials, and technical supervision of the following projects: 1. J.O. #P-90-212 Wiring and installation of primary and secondary lines system. 2. J.O. #P-90-213 Supply and installation of primary protection and disconnecting switch. 3. J.O. #P-90-214 Rewinding and conversion of one (1) unit 3125 KVA, 34.5 KV/2.4 KV, 3 Transformer to 4000 KVA, 34.5 KV/480V, 3 Delta Primary, Wye with neutral secondary.6 Petitioner agreed to perform the above-mentioned job orders. Specifically, it undertook to supply the labor, equipment, supervision, and materials as specified in the detailed scope of work. 7 For its part, respondent agreed to pay the total sum of P2,944,000.00 in consideration of the performance of the job orders. Petitioner undertook to complete the projects within one hundred twenty (120) days from the effectivity of the contract.8 It was agreed upon that petitioner would be liable to respondent for liquidated damages in the amount of P29,440.00 per day of delay in the completion of the projects which shall be limited to 10% of the project cost.9 To secure the full and faithful performance of all its obligations and responsibilities under the contract, petitioner obtained from Times Surety & Insurance Co. Inc. (Times Insurance) a performance bond10 in an amount equivalent to fifty percent (50%) of the contract price or P1,458,618.18. Pursuant to the terms of the contract, respondent made an initial payment of P1,458,618.18 on January 8, 1991.11 In a letter12 dated March 9, 1991, petitioner requested for an extension of seventy-five (75) days within which to complete the projects because of the need to import some of the materials needed. In the same letter, it also asked for a price adjustment of P255,000.00 to cover the higher cost of materials.13 In another letter14 dated March 27, 1991, petitioner requested for another 75 days extension for the completion of the transformer portion of the projects for failure of its supplier to deliver the materials.

that the former was terminating the contract. It also demanded for the refund of the amount already paid to petitioner, otherwise, the necessary action would be instituted. Respondent sent another demand letter17 to Times Insurance for the payment of P1,472,000.00 pursuant to the performance bond it issued. On November 14, 1991,18 respondent entered into two contracts with Geostar Philippines, Inc. (Geostar) for the completion of the projects commenced but not completed by petitioner for a total consideration of P3,435,000.00. On December 14, 1991, petitioner reiterated its desire to complete J.O. #P-90-212 and J.O. #P90-213 and to exclude J.O. #P-90-214,19 but the same was denied by respondent in a letter20 dated January 14, 1992. In the same letter, respondent pointed out that amicable settlement is impossible. Hence, the Complaint for Sum of Money21 filed by respondent against petitioner and Times Surety & Insurance Co., Inc. praying for the payment of the following: P493,695.00 representing the amount which they owed respondent from the downpayment and advances made by the latter vis--vis the work accomplishment; P2,550,945.87 representing the amount incurred in excess of the cost of the projects as agreed upon; P294,000.00 as liquidated damages; plus interest and attorneys fees. 22 Times Insurance did not file any pleading nor appeared in court. For its part, petitioner denied23 liability and claimed instead that it failed to complete the projects due to respondents fault. It explained that it relied in good faith on respondents representation that the transformer subject of the contract could still be rewound and converted but upon dismantling the core-coil assembly, it discovered that the coils were already badly damaged and the primary bushing broken. This discovery allegedly entailed price adjustment. Petitioner thus requested respondent for additional time within which to complete the project and additional amount to finance the same. Petitioner also insisted that the proximate cause of the delay is the misrepresentation of the respondent on the extent of the defect of the transformer. After the presentation of the parties respective evidence, the RTC rendered a decision on June 5, 1998 in favor of petitioner, the dispositive portion of which reads: Wherefore, finding defendant-contractors evidence more preponderant than that of the plaintiff, judgment is hereby rendered in favor of the defendant-contractor against the plaintiff and hereby orders: (1) that the instant case be DISMISSED;

(2) that plaintiff pays defendant the amount of P4,000,000.00; for moral and exemplary & other damages; On June 14, 1991,15 petitioner manifested its desire to complete the project as soon as possible to prevent further losses and maintain goodwill between the companies. Petitioner requested for respondents assistance by facilitating the acquisition of materials and supplies needed to (3) P100,000.00 for attorneys fees and cost of suit. complete J.O. #P-90-212 and J.O. #P-90-213 by directly paying the suppliers. It further sought that it be allowed to back out from J.O. #P-90-214 covering the rewinding and conversion of the SO ORDERED.24 damaged transformer. The RTC held that the failure of petitioner to complete the projects was not solely due to its fault In response16 to petitioners requests, respondent, through counsel, manifested its observation that but more on respondents misrepresentation and bad faith.25 Therefore, the Court dismissed petitioners financial status showed that it could no longer complete the projects as agreed upon. respondents complaint. Since respondent was found to have committed deceit in its dealings with Respondent also informed petitioner that it was already in default having failed to complete the petitioner, the court awarded damages in favor of the latter.26 projects within 120 days from the effectivity of the contract. Respondent further notified petitioner

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Respondent, however, successfully obtained a favorable decision when its appeal was granted by the CA. The appellate court reversed and set aside the RTC decision and awarded respondent P493,695.34 for the excess payment made to petitioner, P508,510.00 for the amount spent in contracting Geostar and P294,400.00 as liquidated damages.27 Contrary to the conclusion of the RTC, the CA found that petitioner failed to prove that respondent made fraudulent misrepresentation to induce the former to enter into the contract. It further held that petitioner was given the opportunity to inspect the transformer before offering its bid. 28 This being so, the CA added that petitioners failure to avail of such opportunity is inexcusable, considering that it is a company engaged in the electrical business and the contract involved a sizable amount of money.29 As to the condition of the subject transformer unit, the appellate court found the testimony of petitioners president insufficient to prove that the same could no longer be rewound or converted.30 Considering that advance payments had been made to petitioner, the court deemed it necessary to require it to return to respondent the excess amounts, vis--vis its actual accomplishment.31 In addition to the refund of the excess payment, the CA also ordered the reimbursement of what respondent paid to Geostar for the unfinished projects of petitioner as well as the payment of liquidated damages as stipulated in the contract. 32 Aggrieved, petitioner comes before the Court in this petition for review on certiorari under Rule 45 of the Rules of Court raising the following issues: (1) whether or not respondent was guilty of fraud or misrepresentation as to the actual condition of the transformer subject of the contract;33 (2) whether or not the evidence presented by petitioner adequately established the true nature and condition of the subject transformer;34 (3) whether or not petitioner is guilty of inexcusable delay in the completion of the projects;35 (4) whether or not petitioner is liable for liquidated damages;36 and (5) whether or not petitioner is liable for the cost of the contract between respondent and Geostar.37 The petition is without merit. The case stemmed from an action for sum of money or damages arising from breach of contract. The contract involved in this case refers to the rewinding and conversion of one unit of transformer to be installed and energized to supply respondents power requirements. 38 This project was embodied in three (3) job orders, all of which were awarded to petitioner who represented itself to be capable, competent, and duly licensed to handle the projects. 39 Petitioner, however, failed to complete the projects within the agreed period allegedly because of misrepresentation and fraud committed by respondent as to the true nature of the subject transformer. The trial court found that respondent indeed failed to inform petitioner of the true condition of the transformer which amounted to fraud thereby justifying the latters failure to complete the projects. The CA, however, had a different conclusion and decided in favor of respondent. Ultimately, the issue before us is whether or not there was breach of contract which essentially is a factual matter not usually reviewable in a petition filed under Rule 45.40 In resolving the issues, the Court inquires into the probative value of the evidence presented before the trial court.41 Petitioner, indeed, endeavors to convince us to determine once again the weight, credence, and probative value of the evidence presented before the trial court. 42 While in general, the findings of fact of the CA are final and conclusive and cannot be reviewed on appeal to the Court because it is not a trier of facts,43 there are recognized exceptions44 as when the findings of fact are conflicting, which is obtaining in this case. The conflicting conclusions of the trial and appellate courts impel us to re-examine the evidence presented. After a thorough review of the records of the case, we find no reason to depart from the conclusions of the CA.

It is undisputed that petitioner and respondent entered into a contract for the supply of labor, materials, and technical supervision primarily for the rewinding and conversion of one (1) unit of transformer and related works aimed at providing the power needs of respondent. As agreed upon by the parties, the projects were to be completed within 120 days from the effectivity of the contract. Admittedly, however, respondent failed, not only to perform its part of the contract on time but, in fact, to complete the projects. Petitioner tried to exempt itself from the consequences of said breach by passing the fault to respondent. It explained that its failure to complete the project was due to the misrepresentation of the respondent. It claimed that more time and money were needed, because the condition of the subject transformer was worse than the representations of respondent. Is this defense tenable? We answer in the negative. Records show that petitioner indeed asked for price adjustment and extension of time within which to complete the projects. In its letter45 dated March 9, 1991, petitioner anchored its request for extension on the following grounds: 1. To maximize the existing 3125 KVA to 4000 KVA capacity using the same core, we will replace the secondary windings from rectangular type to copper sheet which is more accurate in winding to the required number of turns than using parallel rectangular or circular type of copper magnet wires. However, these copper sheets are not readily available locally in volume quantities, and therefore, we will be importing this material and it will take 60 days minimum time for its delivery. 2. We also find it difficult to source locally the replacement for the damaged high voltage bushing. 3. The delivery of power cable no. 2/0 will also be delayed. This will take 90 days to deliver from January 1991.46 Also in its letter47 dated March 27, 1991, petitioner informed respondent that the projects would be completed within the contract time table but explained that the delivery of the transformer would only be delayed. The reasons advanced by petitioner to justify the delay are as follows: 1. Our supplier for copper sheets cannot complete the delivery until April 30, 1991. 2. Importation of HV Bushing will take approximately 45 days delivery per advice of our supplier. x x x48 Clearly, in the above letters, petitioner justified its inability to complete the projects within the stipulated period on the alleged unavailability of the materials to be used to perform the projects as stated in the job orders. Nowhere in said letters did petitioner claim that it could not finish the projects, particularly the conversion of the transformer unit because the defects were worse than the representation of respondent. In other words, there was no allegation of fraud, bad faith, concealment or misrepresentation on the part of respondent as to the true condition of the subject transformer. Even in its letter49 dated May 25, 1991, petitioner only requested respondent that payment to the first progress billing be released as soon as possible and without deduction. It further proposed that respondent make a direct payment to petitioners suppliers.

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It was only in its June 14, 1991 letter50 when petitioner raised its observations that the subject transformer needed more repairs than what it knew during the bidding. 51 In the same letter, however, petitioner repeated its request that direct payment be made by respondent to petitioners suppliers.52 More importantly, petitioner admitted that it made a judgment error when it quoted for only P440,770.00 for the contract relating to J.O. #P-90-214 based on limited information. It can be inferred from the foregoing facts that there was not only a delay but a failure to complete the projects as stated in the contract; that petitioner could not complete the projects because it did not have the materials needed; and that it is in need of financial assistance. As the Court sees it, the bid submitted by petitioner may have been sufficient to be declared the winner but it failed to anticipate all expenses necessary to complete the projects. 53 When it incurred expenses it failed to foresee, it began requesting for price adjustment to cover the cost of high voltage bushing and difference in cost of copper sheet and rectangular wire.54 However, the scope of work presented by respondent specifically stated that the wires to be used shall be pure copper and that there was a need to supply new bushings for the complete rewinding and conversion of 3125 KVA to 4 MVA Transformer.55 In other words, petitioner was aware that there was a need for complete replacement of windings to copper and of secondary bushings. 56 It is, therefore, improper for petitioner to ask for additional amount to answer for the expenses that were already part and parcel of the undertaking it was bound to perform. For petitioner, the contract entered into may have turned out to be an unwise investment, but there is no one to blame but petitioner for plunging into an undertaking without fully studying it in its entirety.57 The Court likewise notes that petitioner repeatedly asked for extension allegedly because it needed to import the materials and that the same could not be delivered on time. Petitioner also repeatedly requested that respondent make a direct payment to the suppliers notwithstanding the fact that it contracted with respondent for the supply of labor, materials, and technical supervision. It is, therefore, expected that petitioner would be responsible in paying its suppliers because respondent is not privy to their (petitioner and its suppliers) contract. This is especially true in this case since respondent had already made advance payments to petitioner. It appears, therefore, that in offering its bid, the source and cost of materials were not seriously taken into consideration. It appears, further, that petitioner had a hard time in fulfilling its obligations under the contract that is why it asked for financial assistance from respondent. This is contrary to petitioners representation that it was capable, competent, and duly licensed to handle the projects. As to the alleged damaged condition of the subject transformer, we quote with approval the CA conclusion in this wise: In the same vein, We cannot readily accept the testimony of Tomas that the transformer unit was severely damaged and was beyond repair as it was not substantiated with any other evidence. R.S. Tomas could have presented an independent expert witness whose opinion may corroborate its stance that the transformer unit was indeed incapable of being restored. To our mind, the testimony of Tomas is self-serving as it is easy to concoct, yet difficult to verify.58 This lack of evidence, coupled with petitioners failure to raise the same at the earliest opportunity, belies petitioners claim that it could not com plete the projects because the subject transformer could no longer be repaired. Assuming for the sake of argument that the subject transformer was indeed in a damaged condition even before the bidding which makes it impossible for petitioner to perform its obligations

under the contract, we also agree with the CA that petitioner failed to prove that respondent was guilty of bad faith, fraud, deceit or misrepresentation. Bad faith does not simply connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a known duty through some motive or interest or ill will that partakes of the nature of fraud. 59 Fraud has been defined to include an inducement through insidious machination. Insidious machination refers to a deceitful scheme or plot with an evil or devious purpose. Deceit exists where the party, with intent to deceive, conceals or omits to state material facts and, by reason of such omission or concealment, the other party was induced to give consent that would not otherwise have been given. 60 These are allegations of fact that demand clear and convincing proof. They are serious accusations that can be so conveniently and casually invoked, and that is why they are never presumed. 61 In this case, the evidence presented is insufficient to prove that respondent acted in bad faith or fraudulently in dealing with petitioner.1wphi1 Petitioner in fact admitted that its representatives were given the opportunity to inspect the subject transformer before it offered its bid. If indeed the transformer was completely sealed, it should have demanded that the same be opened if it found it necessary before it offered its bid. As contractor, petitioner had been remiss in its obligation to obtain as much information as possible on the actual condition of the subject transformer or at least it should have provided a qualification in its bid so as to make clear its right to claim contract price and time adjustment. 62 As aptly held by the CA, considering that petitioner is a company engaged in the electrical business and the contract it had entered into involved a sizable amount of money, its failure to conduct an inspection of the subject transformer is inexcusable.63 In sum, the evidence presented by the parties lead to the following conclusions: (1) that the projects were not completed by petitioner; (2) that petitioner was given the opportunity to inspect the subject transformer; (3) that petitioner failed to thoroughly study the entirety of the projects before it offered its bid; (4) that petitioner failed to complete the projects because of the unavailability of the required materials and that petitioner needed financial assistance; (5) that the evidence presented by petitioner were inadequate to prove that the subject transformer could no longer be repaired; and (6) that there was no evidence to show that respondent was in bad faith, acted fraudulently, or guilty of deceit and misrepresentation in dealing with petitioner. In view of the foregoing disquisitions, we find that there was not only delay but non-completion of the projects undertaken by petitioner without justifiable ground. Undoubtedly, petitioner is guilty of breach of contract. Breach of contract is defined as the failure without legal reason to comply with the terms of a contract. It is also defined as the failure, without legal excuse, to perform any promise which forms the whole or part of the contract.64 In the present case, petitioner did not complete the projects. This gives respondent the right to terminate the contract by serving petitioner a written notice. The contract specifically stated that it may be terminated for any of the following causes: 1. Violation by Contractor of the terms and conditions of this Contract; 2. Non-completion of the Work within the time agreed upon, or upon the expiration of extension agreed upon; 3. Institution of insolvency or receivership proceedings involving Contractor; and

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4. Other causes provided by law applicable to this contract.65 Consequently, and pursuant to the agreement of the parties,66 petitioner is liable for liquidated damages in the amount of P29,440.00 per day of delay, which shall be limited to a maximum of 10% of the project cost orP294,400.00. In this case, petitioner bound itself to complete the projects within 120 days from December 29, 1990. However, petitioner failed to fulfill the same prompting respondent to engage the services of another contractor on November 14, 1991. Thus, despite the lapse of eleven months from the time of the effectivity of the contract entered into between respondent and petitioner, the latter had not completed the projects. Undoubtedly, petitioner may be held to answer for liquidated damages in its maximum amount which is 10% of the contract price. While we have reduced the amount of liquidated damages in some cases,67 because of partial fulfillment of the contract and/or the amount is unconscionable, we do not find the same to be applicable in this case. It must be recalled that the contract entered into by petitioner consists of three projects, all of which were not completed by petitioner. Moreover, the percentage of work accomplishment was not adequately shown by petitioner. Hence, we apply the general rule not to ignore the freedom of the parties to agree on such terms and conditions as they see fit as long as they are not contrary to law, morals, good customs, public order or public policy. 68 Thus, as agreed upon by the parties, we apply the 10% liquidated damages. Considering that petitioner was already in delay and in breach of contract, it is liable for damages that are the natural and probable consequences of its breach of obligation.69 Since advanced payments had been made by respondent, petitioner is bound to return the excess vis--vis its work accomplishments. In order to finish the projects, respondent had to contract the services of another contractor. We, therefore, find no reason to depart from the CA conclusion requiring the return of the excess payments as well as the payment of the cost of contracting Geostar, in addition to liquidated damages.70 WHEREFORE, premises considered, the petition is hereby DENIED. The Court of Appeals Decision dated December 19, 2005 and Resolution dated June 6, 2006 in CA-G.R. CV No. 61049 are AFFIRMED. SO ORDERED. EN BANC G.R. No. 191970 April 24, 2012

The Facts and the Case Petitioner Rommel Jalosjos was born in Quezon City on October 26, 1973. He migrated to Australia in 1981 when he was eight years old and there acquired Australian citizenship. On November 22, 2008, at age 35, he decided to return to the Philippines and lived with his brother, Romeo, Jr., in Barangay Veterans Village, Ipil, Zamboanga Sibugay. Four days upon his return, he took an oath of allegiance to the Republic of the Philippines, resulting in his being issued a Certificate of Reacquisition of Philippine Citizenship by the Bureau of Immigration. 1 On September 1, 2009 he renounced his Australian citizenship, executing a sworn renunciation of the same 2 in compliance with Republic Act (R.A.) 9225.3 From the time of his return, Jalosjos acquired a residential property in the same village where he lived and a fishpond in San Isidro, Naga, Zamboanga Sibugay. He applied for registration as a voter in the Municipality of Ipil but respondent Dan Erasmo, Sr., the Barangay Captain of Barangay Veterans Village, opposed the same. Acting on the application, the Election Registration Board approved it and included Jalosjos name in the Commission on Elections (COMELECs) voters list for Precinct 0051F of Barangay Veterans Village, Ipil, Zamboanga Sibugay. 4 Undaunted, Erasmo filed before the 1st Municipal Circuit Trial Court (MCTC) of Ipil-TungawanR.T. Lim in Ipil a petition for the exclusion of Jalosjos name from the official voters list. After hearing, the MCTC rendered a decision, denying the petition.5 On appeal,6 the Regional Trial Court (RTC) affirmed the MCTC decision. The RTC decision became final and executory. On November 28, 2009 Jalosjos filed his Certificate of Candidacy (COC) for Governor of Zamboanga Sibugay Province for the May 10, 2010 elections. Erasmo promptly filed a petition to deny due course or to cancel Jalosjos COC7 on the ground that the latter made material misrepresentation in the same since he failed to comply with (1) the requirements of R.A. 9225 and (2) the one-year residency requirement of the Local Government Code. After hearing, the Second Division of the COMELEC ruled that, while Jalosjos had regained Philippine citizenship by complying with the requirements of R.A. 9225, he failed to prove the residency requirement for a gubernatorial candidate. He failed to present ample proof of a bona fide intention to establish his domicile in Ipil, Zamboanga Sibugay. On motion for reconsideration, the COMELEC En Banc affirmed the Second Divisions decision, ruling that Jalosjos had been a mere guest or transient visitor in his brothers house and, for this reason, he cannot claim Ipil as his domicile. Acting on Jalosjos prayer for the issuance of a temporary restraining order, th e Court resolved on May 7, 2010 to issue a status quo ante order, enjoining the COMELEC from enforcing its February 11, 2010 decision pending further orders. Meanwhile, Jolosjos won the election and was proclaimed winner of the 2010 gubernatorial race in the Province of Zamboanga Sibugay.8 The Issue Presented The sole issue presented in this case is whether or not the COMELEC acted with grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that Jalosjos failed to present ample proof of a bona fide intention to establish his domicile in Ipil, Zamboanga Sibugay. The Courts Ruling

ROMMEL APOLINARIO JALOSJOS, Petitioner, vs. THE COMMISSION ON ELECTIONS and DAN ERASMO, SR., DECISION ABAD, J.: This case is about the proof required to establish the domicile of a reinstated Filipino citizen who seeks election as governor of a province.

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The Local Government Code requires a candidate seeking the position of provincial governor to be a resident of the province for at least one year before the election. 9 For purposes of the election laws, the requirement of residence is synonymous with domicile,10 meaning that a person must not only intend to reside in a particular place but must also have personal presence in such place coupled with conduct indicative of such intention.11 There is no hard and fast rule to determine a candidates compliance with residency requirement since the question of residence is a question of intention.12 Still, jurisprudence has laid down the following guidelines: (a) every person has a domicile or residence somewhere; (b) where once established, that domicile remains until he acquires a new one; and (c) a person can have but one domicile at a time.13 It is inevitable under these guidelines and the precedents applying them that Jalosjos has met the residency requirement for provincial governor of Zamboanga Sibugay.

presented, who just sporadically passed by the subject residence. Further, it is not disputed that Jalosjos bought a residential lot in the same village where he lived and a fish pond in San Isidro, Naga, Zamboanga Sibugay. He showed correspondences with political leaders, including local and national party-mates, from where he lived. Moreover, Jalosjos is a registered voter of Ipil by final judgment of the Regional Trial Court of Zamboanga Sibugay.1wphi1 Three. While the Court ordinarily respects the factual findings of administrative bodies like the COMELEC, this does not prevent it from exercising its review powers to correct palpable misappreciation of evidence or wrong or irrelevant considerations. 16 The evidence Jalosjos presented is sufficient to establish Ipil, Zamboanga Sibugay, as his domicile. The COMELEC gravely abused its discretion in holding otherwise. Four. Jalosjos won and was proclaimed winner in the 2010 gubernatorial race for Zamboanga Sibugay. The Court will respect the decision of the people of that province and resolve all doubts regarding his qualification in his favor to breathe life to their manifest will.

One. The COMELEC appears hasty in concluding that Jalosjos failed to prove that he successfully changed his domicile to Zamboanga Sibugay. The COMELEC points out that, since he was unable WHEREFORE, the Court GRANTS the petition and SETS ASIDE the Resolution of the COMELEC to discharge the burden of proving Zamboanga Sibugay to be his rightful domicile, it must be Second Division dated February 11, 2010 and the Resolution of the COMELEC En Banc dated assumed that his domicile is either Quezon City or Australia. May 4, 2010 that disqualified petitioner Rommel Jalosjos from seeking election as Governor of Zamboanga Sibugay. But it is clear from the facts that Quezon City was Jalosjos domicile of origin, the place of his birth. It may be taken for granted that he effectively changed his domicile from Quezon City to Australia when he migrated there at the age of eight, acquired Australian citizenship, and lived in that country for 26 years. Australia became his domicile by operation of law and by choice. 14 On the other hand, when he came to the Philippines in November 2008 to live with his brother in Zamboanga Sibugay, it is evident that Jalosjos did so with intent to change his domicile for good. He left Australia, gave up his Australian citizenship, and renounced his allegiance to that country. In addition, he reacquired his old citizenship by taking an oath of allegiance to the Republic of the Philippines, resulting in his being issued a Certificate of Reacquisition of Philippine Citizenship by the Bureau of Immigration. By his acts, Jalosjos forfeited his legal right to live in Australia, clearly proving that he gave up his domicile there. And he has since lived nowhere else except in Ipil, Zamboanga Sibugay. To hold that Jalosjos has not establish a new domicile in Zamboanga Sibugay despite the loss of his domicile of origin (Quezon City) and his domicile of choice and by operation of law (Australia) would violate the settled maxim that a man must have a domicile or residence somewhere. Two. The COMELEC concluded that Jalosjos has not come to settle his domicile in Ipil since he has merely been staying at his brothers house. But this circumstance alone cannot support such conclusion. Indeed, the Court has repeatedly held that a candidate is not required to have a house in a community to establish his residence or domicile in a particular place. It is sufficient that he should live there even if it be in a rented house or in the house of a friend or relative. 15 To insist that the candidate own the house where he lives would make property a qualification for public office. What matters is that Jalosjos has proved two things: actual physical presence in Ipil and an intention of making it his domicile. Jalosjos presented the affidavits of next-door neighbors, attesting to his physical presence at his residence in Ipil. These adjoining neighbors are no doubt more credible since they have a better chance of noting his presence or absence than his other neighbors, whose affidavits Erasmo SO ORDERED. FIRST DIVISION G.R. No. 174489 April 11, 2012

ANTONIO B. BALTAZAR, SEBASTIAN M. BALTAZAR, ANTONIO L. MANGALINDAN, ROSIE M. MATEO, NENITA A. PACHECO, VIRGILIO REGALA, JR., and RAFAEL TITCO, Petitioners, vs. LORENZO LAXA, Respondent. DECISION DEL CASTILLO, J.: It is incumbent upon those who oppose the probate of a will to clearly establish that the decedent was not of sound and disposing mind at the time of the execution of said will. Otherwise, the state is duty-bound to give full effect to the wishes of the testator to distribute his estate in the manner provided in his will so long as it is legally tenable.1 Before us is a Petition for Review on Certiorari2 of the June 15, 2006 Decision3 of the Court of Appeals (CA) in CA-G.R. CV No. 80979 which reversed the September 30, 2003 Decision4 of the Regional Trial Court (RTC), Branch 52, Guagua, Pampanga in Special Proceedings No. G-1186. The assailed CA Decision granted the petition for probate of the notarial will of Paciencia Regala (Paciencia), to wit:

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WHEREFORE, premises considered, finding the appeal to be impressed with merit, the decision in and with respect to the fishpond situated at San Antonio, I likewise command to fulfill the wishes of SP. PROC. NO. G-1186 dated 30 September 2003, is hereby SET ASIDE and a new one entered D[]a Nicomeda Regala in accordance with her testament as stated in my testament. x x x12 GRANTING the petition for the probate of the will of PACIENCIA REGALA. SO ORDERED.5 Also assailed herein is the August 31, 2006 CA Resolution6 which denied the Motion for Reconsideration thereto. Petitioners call us to reverse the CAs assailed Decision and instead affirm the Decision of the RTC which disallowed the notarial will of Paciencia. Factual Antecedents Paciencia was a 78 year old spinster when she made her last will and testament entitled "Tauli Nang Bilin o Testamento Miss Paciencia Regala"7 (Will) in the Pampango dialect on September 13, 1981. The Will, executed in the house of retired Judge Ernestino G. Limpin (Judge Limpin), was read to Paciencia twice. After which, Paciencia expressed in the presence of the instrumental witnesses that the document is her last will and testament. She thereafter affixed her signature at the end of the said document on page 38 and then on the left margin of pages 1, 2 and 4 thereof.9 The witnesses to the Will were Dra. Maria Lioba A. Limpin (Dra. Limpin), Francisco Garcia (Francisco) and Faustino R. Mercado (Faustino). The three attested to the Wills due execution by affixing their signatures below its attestation clause10 and on the left margin of pages 1, 2 and 4 thereof,11 in the presence of Paciencia and of one another and of Judge Limpin who acted as notary public. Childless and without any brothers or sisters, Paciencia bequeathed all her properties to respondent Lorenzo R. Laxa (Lorenzo) and his wife Corazon F. Laxa and their children Luna Lorella Laxa and Katherine Ross Laxa, thus: xxxx Fourth - In consideration of their valuable services to me since then up to the present by the spouses LORENZO LAXA and CORAZON F. LAXA, I hereby BEQUEATH, CONVEY and GIVE all my properties enumerated in parcels 1 to 5 unto the spouses LORENZO R. LAXA and CORAZON F. LAXA and their children, LUNA LORELLA LAXA and KATHERINE LAXA, and the spouses Lorenzo R. Laxa and Corazon F. Laxa both of legal age, Filipinos, presently residing at Barrio Sta. Monica, [Sasmuan], Pampanga and their children, LUNA LORELLA and KATHERINE ROSS LAXA, who are still not of legal age and living with their parents who would decide to bequeath since they are the children of the spouses; Barely a month after or on July 20, 2000, Antonio, now joined by petitioners Sebastian M. Baltazar, Virgilio Regala, Jr., Nenita A. Pacheco, Felix B. Flores, Rafael Titco, Rosie M. Mateo (Rosie) and Antonio L. Mangalindan filed a Supplemental Opposition24 contending that Paciencias Will was null and void because ownership of the properties had not been transferred and/or titled to Paciencia before her death pursuant to Article 1049, paragraph 3 of the Civil Code. 25 Petitioners also opposed the issuance of Letters of Administration in Lorenzos favor arguing that Lorenzo was disqualified to be appointed as such, he being a citizen and resident of the USA. 26Petitioners prayed that Letters of Administration be instead issued in favor of Antonio.27 The filial relationship of Lorenzo with Paciencia remains undisputed. Lorenzo is Paciencias nephew whom she treated as her own son. Conversely, Lorenzo came to know and treated Paciencia as his own mother.13 Paciencia lived with Lorenzos family in Sasmuan, Pampanga and it was she who raised and cared for Lorenzo since his birth. Six days after the execution of the Will or on September 19, 1981, Paciencia left for the United States of America (USA). There, she resided with Lorenzo and his family until her death on January 4, 1996. In the interim, the Will remained in the custody of Judge Limpin. More than four years after the death of Paciencia or on April 27, 2000, Lorenzo filed a petition14 with the RTC of Guagua, Pampanga for the probate of the Will of Paciencia and for the issuance of Letters of Administration in his favor, docketed as Special Proceedings No. G-1186. There being no opposition to the petition after its due publication, the RTC issued an Order on June 13, 200015allowing Lorenzo to present evidence on June 22, 2000. On said date, Dra. Limpin testified that she was one of the instrumental witnesses in the execution of the last will and testament of Paciencia on September 13, 1981.16The Will was executed in her fathers (Judge Limpin) home office, in her presence and of two other witnesses, Francisco and Faustino. 17 Dra. Limpin positively identified the Will and her signatures on all its four pages. 18 She likewise positively identified the signature of her father appearing thereon. 19 Questioned by the prosecutor regarding Judge Limpins present mental fitness, Dra. Limpin testified that her father had a stroke in 1991 and had to undergo brain surgery.20 The judge can walk but can no longer talk and remember her name. Because of this, Dra. Limpin stated that her father can no longer testify in court.21 The following day or on June 23, 2000, petitioner Antonio Baltazar (Antonio) filed an opposition22 to Lorenzos petition. Antonio averred that the properties subject of Paciencias Will belong to Nicomeda Regala Mangalindan, his predecessor-in-interest; hence, Paciencia had no right to bequeath them to Lorenzo.23

Later still on September 26, 2000, petitioners filed an Amended Opposition28 asking the RTC to deny the probate of Paciencias Will on the following grounds: the Will was not executed and xxxx attested to in accordance with the requirements of the law; that Paciencia was mentally incapable to make a Will at the time of its execution; that she was forced to execute the Will under duress or [Sixth] - Should other properties of mine may be discovered aside from the properties mentioned in influence of fear or threats; that the execution of the Will had been procured by undue and this last will and testament, I am also bequeathing and giving the same to the spouses Lorenzo R. improper pressure and influence by Lorenzo or by some other persons for his benefit; that the Laxa and Corazon F. Laxa and their two children and I also command them to offer masses yearly signature of Paciencia on the Will was forged; that assuming the signature to be genuine, it was obtained through fraud or trickery; and, that Paciencia did not intend the document to be her Will. for the repose of my soul and that of D[]a Nicomeda Regala, Epifania Regala and their spouses Simultaneously, petitioners filed an Opposition and Recommendation29 reiterating their opposition

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to the appointment of Lorenzo as administrator of the properties and requesting for the appointment of Antonio in his stead. On January 29, 2001, the RTC issued an Order30 denying the requests of both Lorenzo and Antonio to be appointed administrator since the former is a citizen and resident of the USA while the latters claim as a co-owner of the properties subject of the Will has not yet been established. Meanwhile, proceedings on the petition for the probate of the Will continued. Dra. Limpin was recalled for cross-examination by the petitioners. She testified as to the age of her father at the time the latter notarized the Will of Paciencia; the living arrangements of Paciencia at the time of the execution of the Will; and the lack of photographs when the event took place. 31 Aside from Dra. Limpin, Lorenzo and Monico Mercado (Monico) also took the witness stand. Monico, son of Faustino, testified on his fathers condition. According to him his father can no longer talk and express himself due to brain damage. A medical certificate was presented to the court to support this allegation. 32 For his part, Lorenzo testified that: from 1944 until his departure for the USA in April 1980, he lived in Sasmuan, Pampanga with his family and his aunt, Paciencia; in 1981 Paciencia went to the USA and lived with him and his family until her death in January 1996; the relationship between him and Paciencia was like that of a mother and child since Paciencia took care of him since birth and took him in as an adopted son; Paciencia was a spinster without children, and without brothers and sisters; at the time of Paciencias death, she did not suffer from any mental disorder and was of sound mind, was not blind, deaf or mute; the Will was in the custody of Judge Limpin and was only given to him after Paciencias death through Faustino; and he was already residing in the USA when the Will was executed.33 Lorenzo positively identified the signature of Paciencia in three different documents and in the Will itself and stated that he was familiar with Paciencias signature because he accompanied her in her transactions. 34 Further, Lorenzo belied and denied having used force, intimidation, violence, coercion or trickery upon Paciencia to execute the Will as he was not in the Philippines when the same was executed. 35 On cross-examination, Lorenzo clarified that Paciencia informed him about the Will shortly after her arrival in the USA but that he saw a copy of the Will only after her death.36 As to Francisco, he could no longer be presented in court as he already died on May 21, 2000.

conclusion that Paciencia was "magulyan" was based on her personal assessment, 46 and that it was Antonio who requested her to testify in court.47 In his direct examination, Antonio stated that Paciencia was his aunt. 48 He identified the Will and testified that he had seen the said document before because Paciencia brought the same to his mothers house and showed it to him along with another document on September 16, 1981.49 Antonio alleged that when the documents were shown to him, the same were still unsigned.50 According to him, Paciencia thought that the documents pertained to a lease of one of her rice lands,51 and it was he who explained that the documents were actually a special power of attorney to lease and sell her fishpond and other properties upon her departure for the USA, and a Will which would transfer her properties to Lorenzo and his family upon her death. 52 Upon hearing this, Paciencia allegedly uttered the following words: "Why will I never [return], why will I sell all my properties?" Who is Lorenzo? Is he the only [son] of God? I have other relatives [who should] benefit from my properties. Why should I die already?"53 Thereafter, Antonio advised Paciencia not to sign the documents if she does not want to, to which the latter purportedly replied, "I know nothing about those, throw them away or it is up to you. The more I will not sign them." 54 After which, Paciencia left the documents with Antonio. Antonio kept the unsigned documents and eventually turned them over to Faustino on September 18, 1981.55 Ruling of the Regional Trial Court On September 30, 2003, the RTC rendered its Decision56 denying the petition thus: WHEREFORE, this court hereby (a) denies the petition dated April 24, 2000; and (b) disallows the notarized will dated September 13, 1981 of Paciencia Regala. SO ORDERED.57 The trial court gave considerable weight to the testimony of Rosie and concluded that at the time Paciencia signed the Will, she was no longer possessed of sufficient reason or strength of mind to have testamentary capacity.58

Ruling of the Court of Appeals For petitioners, Rosie testified that her mother and Paciencia were first cousins.37 She claimed to have helped in the household chores in the house of Paciencia thereby allowing her to stay therein On appeal, the CA reversed the RTC Decision and granted the probate of the Will of Paciencia. from morning until evening and that during the period of her service in the said household, 38 The appellate court did not agree with the RTCs conclusion that Paciencia was of un sound mind Lorenzos wife and his children were staying in the same house. She served in the said when she executed the Will. It ratiocinated that "the state of being magulyan does not make a household from 1980 until Paciencias departure for the USA on September 19, 1981. 39 person mentally unsound so [as] to render [Paciencia] unfit for executing a Will." 59 Moreover, the oppositors in the probate proceedings were not able to overcome the presumption that every On September 13, 1981, Rosie claimed that she saw Faustino bring "something" for Paciencia to person is of sound mind. Further, no concrete circumstances or events were given to prove the 40 sign at the latters house. Rosie admitted, though, that she did not see what that "something" allegation that Paciencia was tricked or forced into signing the Will. 60 41 was as same was placed inside an envelope. However, she remembered Paciencia instructing Faustino to first look for money before she signs them.42 A few days after or on September 16, Petitioners moved for reconsideration61 but the motion was denied by the CA in its 1981, Paciencia went to the house of Antonios mother and brought with her the said 43 44 Resolution62 dated August 31, 2006. envelope. Upon going home, however, the envelope was no longer with Paciencia. Rosie further testified that Paciencia was referred to as "magulyan" or "forgetful" because she would sometimes leave her wallet in the kitchen then start looking for it moments later. 45 On cross Hence, this petition. examination, it was established that Rosie was neither a doctor nor a psychiatrist, that her

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Issues Petitioners come before this Court by way of Petition for Review on Certiorari ascribing upon the CA the following errors: I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT ALLOWED THE PROBATE OF PACIENCIAS WILL DESPITE RESPONDENTS UTTER FAILURE TO COMPLY WITH SECTION 11, RULE 76 OF THE RULES OF COURT; II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING CONCLUSIONS NOT IN ACCORDANCE WITH THE EVIDENCE ON RECORD; III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT PETITIONERS FAILED TO PROVE THAT PACIENCIA WAS NOT OF SOUND MIND AT THE TIME THE WILL WAS ALLEGEDLY EXECUTED63 The pivotal issue is whether the authenticity and due execution of the notarial Will was sufficiently established to warrant its allowance for probate. Our Ruling We deny the petition. Faithful compliance with the formalities laid down by law is apparent from the face of the Will. Courts are tasked to determine nothing more than the extrinsic validity of a Will in probate proceedings.64 This is expressly provided for in Rule 75, Section 1 of the Rules of Court, which states: Rule 75

Art. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator himself or by the testator's name written by some other person in his presence, and by his express direction, and attested and subscribed by three or more credible witnesses in the presence of the testator and of one another. The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the pages shall be numbered correlatively in letters placed on the upper part of each page. The attestation shall state the number of pages used upon which the will is written, and the fact that the testator signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses, and that the latter witnessed and signed the will and all the pages thereof in the presence of the testator and of one another. If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them. Art. 806. Every will must be acknowledged before a notary public by the testator and the witnesses. The notary public shall not be required to retain a copy of the will, or file another with the Office of the Clerk of Court. Here, a careful examination of the face of the Will shows faithful compliance with the formalities laid down by law. The signatures of the testatrix, Paciencia, her instrumental witnesses and the notary public, are all present and evident on the Will. Further, the attestation clause explicitly states the critical requirement that the testatrix and her instrumental witnesses signed the Will in the presence of one another and that the witnesses attested and subscribed to the Will in the presence of the testator and of one another. In fact, even the petitioners acceded that the signature of Paciencia in the Will may be authentic although they question her state of mind when she signed the same as well as the voluntary nature of said act. The burden to prove that Paciencia was of unsound mind at the time of the execution of the will lies on the shoulders of the petitioners. Petitioners, through their witness Rosie, claim that Paciencia was "magulyan" or forgetful so much so that it effectively stripped her of testamentary capacity. They likewise claimed in their Motion for Reconsideration66 filed with the CA that Paciencia was not only "magulyan" but was actually suffering from paranoia.67 We are not convinced.

Production of Will. Allowance of Will Necessary. Section 1. Allowance necessary. Conclusive as to execution. No will shall pass either real or personal estate unless it is proved and allowed in the proper court. Subject to the right of appeal, such allowance of the will shall be conclusive as to its due execution. Due execution of the will or its extrinsic validity pertains to whether the testator, being of sound mind, freely executed the will in accordance with the formalities prescribed by law.65 These formalities are enshrined in Articles 805 and 806 of the New Civil Code, to wit: We agree with the position of the CA that the state of being forgetful does not necessarily make a person mentally unsound so as to render him unfit to execute a Will. 68 Forgetfulness is not equivalent to being of unsound mind. Besides, Article 799 of the New Civil Code states: Art. 799. To be of sound mind, it is not necessary that the testator be in full possession of all his reasoning faculties, or that his mind be wholly unbroken, unimpaired, or unshattered by disease, injury or other cause.

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It shall be sufficient if the testator was able at the time of making the will to know the nature of the estate to be disposed of, the proper objects of his bounty, and the character of the testamentary act. In this case, apart from the testimony of Rosie pertaining to Paciencias forgetfulness, there is no substantial evidence, medical or otherwise, that would show that Paciencia was of unsound mind at the time of the execution of the Will. On the other hand, we find more worthy of credence Dra. Limpins testimony as to the soundness of mind of Paciencia when the latter went to Judge Limpins house and voluntarily executed the Will. "The testimony of subscribing witnesses to a Will concerning the testators mental condition is entitled to great weight where they are truthful and intelligent."69 More importantly, a testator is presumed to be of sound mind at the time of the execution of the Will and the burden to prove otherwise lies on the oppositor. Article 800 of the New Civil Code states: Art. 800. The law presumes that every person is of sound mind, in the absence of proof to the contrary. The burden of proof that the testator was not of sound mind at the time of making his dispositions is on the person who opposes the probate of the will; but if the testator, one month, or less, before making his will was publicly known to be insane, the person who maintains the validity of the will must prove that the testator made it during a lucid interval. Here, there was no showing that Paciencia was publicly known to be insane one month or less before the making of the Will. Clearly, thus, the burden to prove that Paciencia was of unsound mind lies upon the shoulders of petitioners. However and as earlier mentioned, no substantial evidence was presented by them to prove the same, thereby warranting the CAs finding that petitioners failed to discharge such burden. Furthermore, we are convinced that Paciencia was aware of the nature of her estate to be disposed of, the proper objects of her bounty and the character of the testamentary act. As aptly pointed out by the CA: A scrutiny of the Will discloses that [Paciencia] was aware of the nature of the document she executed. She specially requested that the customs of her faith be observed upon her death. She was well aware of how she acquired the properties from her parents and the properties she is bequeathing to LORENZO, to his wife CORAZON and to his two (2) children. A third child was born after the execution of the will and was not included therein as devisee. 70 Bare allegations of duress or influence of fear or threats, undue and improper influence and pressure, fraud and trickery cannot be used as basis to deny the probate of a will. An essential element of the validity of the Will is the willingness of the testator or testatrix to execute the document that will distribute his/her earthly possessions upon his/her death. Petitioners claim that Paciencia was forced to execute the Will under duress or influence of fear or threats; that the execution of the Will had been procured by undue and improper pressure and influence by Lorenzo or by some other persons for his benefit; and that assuming Paciencias signature to be genuine, it was obtained through fraud or trickery. These are grounded on the alleged conversation between Paciencia and Antonio on September 16, 1981 wherein the former purportedly repudiated the Will and left it unsigned.

We are not persuaded. We take into consideration the unrebutted fact that Paciencia loved and treated Lorenzo as her own son and that love even extended to Lorenzos wife and children. This kind of relationship is not unusual. It is in fact not unheard of in our culture for old maids or spinsters to care for and raise their nephews and nieces and treat them as their own children. Such is a prevalent and accepted cultural practice that has resulted in many family discords between those favored by the testamentary disposition of a testator and those who stand to benefit in case of intestacy. In this case, evidence shows the acknowledged fact that Paciencias relationship wi th Lorenzo and his family is different from her relationship with petitioners. The very fact that she cared for and raised Lorenzo and lived with him both here and abroad, even if the latter was already married and already has children, highlights the special bond between them. This unquestioned relationship between Paciencia and the devisees tends to support the authenticity of the said document as against petitioners allegations of duress, influence of fear or threats, undue and improper influence, pressure, fraud, and trickery which, aside from being factual in nature, are not supported by concrete, substantial and credible evidence on record. It is worth stressing that bare arguments, no matter how forceful, if not based on concrete and substantial evidence cannot suffice to move the Court to uphold said allegations.71 Furthermore, "a purported will is not [to be] denied legalization on dubious grounds. Otherwise, the very institution of testamentary succession will be shaken to its foundation, for even if a will has been duly executed in fact, whether x x x it will be probated would have to depend largely on the attitude of those interested in [the estate of the deceased]."72 Court should be convinced by the evidence presented before it that the Will was duly executed. Petitioners dispute the authenticity of Paciencias Will on the ground that Section 11 of Rule 76 of the Rules of Court was not complied with. It provides: RULE 76 Allowance or Disallowance of Will Section 11. Subscribing witnesses produced or accounted for where will contested. If the will is contested, all the subscribing witnesses, and the notary in the case of wills executed under the Civil Code of the Philippines, if present in the Philippines and not insane, must be produced and examined, and the death, absence, or insanity of any of them must be satisfactorily shown to the court. If all or some of such witnesses are present in the Philippines but outside the province where the will has been filed, their deposition must be taken. If any or all of them testify against the due execution of the will, or do not remember having attested to it, or are otherwise of doubtful credibility, the will may nevertheless, be allowed if the court is satisfied from the testimony of other witnesses and from all the evidence presented that the will was executed and attested in the manner required by law. If a holographic will is contested, the same shall be allowed if at least three (3) witnesses who know the handwriting of the testator explicitly declare that the will and the signature are in the handwriting of the testator; in the absence of any competent witnesses, and if the court deem it necessary, expert testimony may be resorted to. (Emphasis supplied.)

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They insist that all subscribing witnesses and the notary public should have been presented in court since all but one witness, Francisco, are still living. We cannot agree with petitioners. We note that the inability of Faustino and Judge Limpin to appear and testify before the court was satisfactorily explained during the probate proceedings. As testified to by his son, Faustino had a heart attack, was already bedridden and could no longer talk and express himself due to brain damage. To prove this, said witness presented the corresponding medical certificate. For her part, Dra. Limpin testified that her father, Judge Limpin, suffered a stroke in 1991 and had to undergo brain surgery. At that time, Judge Limpin could no longer talk and could not even remember his daughters name so that Dra. Limpin stated that given such condition, her father could no longe r testify. It is well to note that at that point, despite ample opportunity, petitioners neither interposed any objections to the testimonies of said witnesses nor challenged the same on cross examination. We thus hold that for all intents and purposes, Lorenzo was able to satisfactorily account for the incapacity and failure of the said subscribing witness and of the notary public to testify in court. Because of this the probate of Paciencias Will may be allowed on the basis of Dra. Limpins testimony proving her sanity and the due execution of the Will, as well as on the proof of her handwriting. It is an established rule that "[a] testament may not be disallowed just because the attesting witnesses declare against its due execution; neither does it have to be necessarily allowed just because all the attesting witnesses declare in favor of its legalization; what is decisive is that the court is convinced by evidence before it, not necessarily from the attesting witnesses, although they must testify, that the will was or was not duly executed in the manner required by law."731wphi1 Moreover, it bears stressing that "[i]rrespective x x x of the posture of any of the parties as regards the authenticity and due execution of the will x x x in question, it is the mandate of the law that it is the evidence before the court and/or [evidence that] ought to be before it that is controlling." 74 "The very existence of [the Will] is in itself prima facie proof that the supposed [testatrix] has willed that [her] estate be distributed in the manner therein provided, and it is incumbent upon the state that, if legally tenable, such desire be given full effect independent of the attitude of the parties affected thereby."75 This, coupled with Lorenzos established relationship with Paciencia, the evidence and the testimonies of disinterested witnesses, as opposed to the total lack of evidence presented by petitioners apart from their self-serving testimonies, constrain us to tilt the balance in favor of the authenticity of the Will and its allowance for probate. WHEREFORE, the petition is DENIED. The Decision dated June 15, 2006 and the Resolution dated August 31, 2006 of the Court of Appeals in CA-G.R. CV No. 80979 are AFFIRMED. SO ORDERED. SECOND DIVISION G.R. No. 173606 December 3, 2012

DEL CASTILLO, J.: "In giving recognition to the action of forcible entry and detainer, the purpose of the law is to protect the person who in fact has actual possession; and in case of controverted right, it requires the parties to preserve the status quo until one of the other of them sees fit to invoke the decision of a court of competent jurisdiction upon the question of ownership. It is obviously just the person who has first acquired possession who should remain in possession pending this decision x x x." 1 In a legal battle for forcible entry, two parties assert their alleged right to possess a 2.66-hectare government timberland in Udlom, Sinsin, Cebu City. One of the parties, Valeriana Villondo (Valeriana), prevailed in the Municipal Trial Court in Cities (MTCC) but later lost her case before the Regional Trial Court (RTC) after it rejected her standing as the real party-in-interest. And since the Court of Appeals (CA) affirmed the RTC's ruling, Valeriana now comes to this Court to assail the March 31, 2005 Decision2 and July 10, 2006 Resolution3 of the CA in CA-G.R. SP No. 70734. Factual Antecedents In her Complaint4 for forcible entry with preliminary mandatory injunction before the MTCC in Cebu City, Valeriana claimed that in the morning of August 14, 1999, respondent Carmen Quijano (Carmen) and her farm laborers, respondents Adriano Alcantara and Marcelino Ebena, intruded into her land with the help of three policemen and other barangay officials. They destroyed the plants therein, harvested the root crops, corn, and banana, built a hut, fenced off the area, and posted a "NO TRESPASSING" sign, thus preventing Valeriana and her family from entering the premises where they have always resided and depriving them of their harvest. Valeriana argued that Carmen can never assert ownership over the property because it is a government land. She claimed that Carmen's parents, Rufo and Constancia Bacalla, were themselves aware that an ownership claim is worthless. Thus, they ceded their plantations on the subject land to her husband Daniel Villondo (Daniel) for P2,000.00 as declared in a "Kasabutan". 5 Valeriana based her and her family's right of possession on Certificate of Stewardship No. 146099 in the name of 'Daniel T. Villondo',6 which she claimed to have been awarded to her nowdeceased husband whose actual name is 'Daniel P. Villondo.' Said Certificate was issued by the Department of Environment and Natural Resources on February 14, 1994. Valeriana averred that her family had prior possession of the land as her husband started tilling the same even before the war. When she married him in 1948, they continued to occupy and cultivate the land together with their five children. To further support her claim of prior possession and Carmen's alleged intrusion, she submitted, inter alia, Carmen's letters that sought police and barangay assistance in fencing the subject property,7 her (Carmen) counsel's demand letter for Valeriana's son Esteban Villondo (Esteban) to leave the property,8 pictures of a collapsed house on the subject land that Valeriana claims to belong to one of her sons,9 and an affidavit of Regino Habasa (Regino), a Bureau of Forestry employee and a Barangay Sinsin resident, who attested that the Villondo family had been tilling the land since 1951.10 On the other hand, Carmen interposed that the alleged "Kasabutan" was never brought to her attention by her parents. In any case, she asserted that such allegation of Valeriana even supports her claim of prior possession. Carmen tacked her possessory right to that of her parents Rufo and Constancia Bacalla who in 1948 purchased11from Liberato and Vicente Abellanosa a 4.51 hectare land in Taop, Pardo, Cebu

VALERIANA VILLONDO, Petitioner, vs. CARMEN QUIJANO, ARDIANO ALCANTARA, and MARCELINO EBENA, Respondents. DECISION

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City covered by Tax Declaration No. 92638. According to her, said 4.51 hectare land includes the disputed area which her parents also cultivated and developed. Carmen submitted to the court her tax declarations over the land.12 The respondents also questioned Valeriana's legal personality to sue, contending that "Daniel T. Villondo,"13 the named tiller in the Certificate of Stewardship No. 146099, is the real party-ininterest and thus should be the plaintiff in the suit and not Valeriana. They claimed that "Daniel T. Villondo" is actually Valeriana's son Romualdo Villondo (Romualdo), a construction worker who had never even cultivated the subject land. Respondents refuted Valeriana's claim that the named tiller in the Certificate refers to her husband "Daniel P. Villondo," 14 who was awarded by the government a Certificate of Stewardship over another parcel of land in 1983.15 Because of this, they asserted that Valeriana is misleading the court by making it appear that she has successional rights from her husband as steward. To support this, respondents submitted the respective stewardship applications16 as well as other documents17 indicating that Daniel P. Villondo and Daniel T. Villondo are different persons. Notably, Regino's Affidavit admits that Daniel T. Villondo refers to Romualdo.18 Incidentally, Carmen's attempt to have the land surveyed in June 1997 resulted in the filing before the MTCC of Cebu of criminal cases for grave threats and grave coercion docketed as Criminal Case Nos. R-55788-5578919against Valeriana, her two children Esteban and Trinidad, and a daughter-in-law. Carmen alleged that the four were armed with scythe, bolo, and pieces of wood when they prevented her from entering and surveying the property, and even threatened to kill her if she proceeds with the land survey.20 Ruling of the Municipal Trial Court in Cities After weighing the parties' respective evidence, the MTCC adjudged that the Daniel T. Villondo under whose name the Certificate of Stewardship was issued, is actually Valeriana's son, Romualdo. The MTCC pointed out that the boundaries of the lot as reflected in Romualdo's Certificate of Stewardship are way different from the boundaries mentioned in Tax Declaration No. 92638 that Carmen has been relying upon. In fact, the land covered by Romualdo's Certificate of Stewardship made no mention that it is bounded by Carmen's land or the land of her predecessors-in-interest.21 This thus disproved respondents' claim that Certificate of Stewardship No. 146099 was issued over a land that constitutes a portion of Carmen's property. Noting that the ejectment case delves on possession de facto, the MTCC also concluded that respondents indeed deprived Valeriana and her family of the possession of the land. It reasoned that Carmen herself alleged in the pending criminal cases for grave threats and grave coercion that she was prevented by the Villondos from entering the property and this presupposes that Valeriana and her family were in prior possession and occupation of the land in question. Thus, in its March 2, 2001 Decision,22 the MTCC ruled: WHEREFORE, judgment is hereby rendered in favor of Valeriana and against the respondents ordering the latter to vacate and move out from the premises of the subject land and to restore Valeriana to the peaceful possession and occupation thereof and condemning them to pay Valeriana, jointly and severally, the following: (a) Actual Damages in the amount of Twenty-Five Thousand (PhP25,000.00) Pesos; (b) Attorney's fees in the amount of Fifteen Thousand (PhP15,000.00) Pesos; and

(c) Litigation expenses in the amount of Ten Thousand (PhP10,000.00) Pesos. SO ORDERED.23 Ruling of the Regional Trial Court Dismayed with the judgment, respondents appealed to the RTC of Cebu City and reiterated their claim of prior possession of the property. They also put in issue therein lack of cause of action since Valeriana is not the real party-in-interest. A supersedeas bond was likewise posted. 24 In its February 11, 2001 Resolution,25 the RTC found Valeriana's Complaint dismissible for lack of cause of action, viz.: Based on the foregoing findings of the court a quo, the complaint should have been initiated by Romualdo Villondo, who is using the name of Daniel T. Villondo, because he is the real party-ininterest and not by his mother, the herein appellee Valeriana Villondo. There is also no showing that Romualdo Villondo is a minor or an incompetent who needs the assistance of his mother as guardian ad litem. Because of this fatal defect, this case is dismissible under Section 1, Rule 16 of the Rules of Court because the herein appellee Valeriana Villondo is not the real party-in-interest but Romualdo Villondo, and therefore the complaint does not state a cause of action. 26 In any event, the RTC gave more credence to Carmen's tax declarations over Valeriana's assertion of long-time possession which to it, was never established. The dispositive portion of the said Resolution reads: WHEREFORE, in view of the foregoing, the Decision appealed from is hereby reversed in favor of the respondents since the petitioner Valeriana Villondo is not a real party-in-interest or beneficiary of the Certificate of Stewardship x x x but her son Romualdo Villondo, who used the name of Daniel T. Villondo, Jr. Hence, the court a quo should have dismissed the complaint since it does not state a cause of action. Cost de officio. IT IS SO ORDERED.27 Valeriana filed a Motion for Reconsideration28 but the same was denied in an Order29 dated March 12, 2002. Ruling of the Court of Appeals When Valeriana elevated the case to the CA,30 she proffered that the only issue that the courts should consider in forcible entry cases is actual possession. She highlighted the fact that the RTC did not overturn the MTCC's factual finding of her actual possession of the disputed property. She therefore claimed that the RTC erred in dismissing her Complaint for the sole reason that she is not a real party-in-interest and likewise prayed for the issuance of a writ of execution/ possession.

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The CA however was not convinced. In its March 31, 2005 Decision, 31 it ruled: Valeriana's allegation that she and her family were deprived of their possession, cultivation and enjoyment of the subject land may be true; however, it is equally important, in order for her case to prosper, to show that she has the right or interest to protect. One who has no right or interest to protect cannot invoke the jurisdiction of the court as party-plaintiff in an action for it is jurisprudentially ordained that every action must be prosecuted or defended in the name of the real party in interest. A "real party in interest" is one who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. We agree with the RTC that petitioner is not the real party in interest in the case at bench. xxxx WHEREFORE, the petition is DENIED. The assailed February 11, 2002 Resolution and the March 12, 2002 Order of Branch 5, Regional Trial Court, Cebu City, are hereby AFFIRMED. 32 In her Motion for Reconsideration,33 Valeriana maintained that she is a real party-in-interest since she was one of those dispossessed of the property. However, the CA, in its July 10, 2006 Resolution,34 ignored her plea for a reconsideration. The Sole Issue Pleading before us for a review of the CA ruling, Valeriana underscores her rightful personality as plaintiff and stressed that the CA erred in affirming the RTC when it ruled that only Romualdo can be the plaintiff in the forcible entry case. Hence, the central issue to be resolved is: Whether Valeriana is a real party-in-interest in the forcible entry case she filed. Our Ruling Notably, even public lands can be the subject of forcible entry cases as it has already been held that ejectment proceedings may involve all kinds of land.35 Thus, in the case at bench, while the parties are fighting over the possession of a government land, the courts below are not deprived of jurisdiction to render judgment thereon.36 Courts must resolve the issue of possession even if the parties to the ejectment suit are mere informal settlers.37

Here, Valeriana is one of those in prior physical possession of the land who was eventually dispossessed. Carmen failed to present evidence that she was in actual physical possession of the land she claims. Her "tax declarations are not conclusive proofs of ownership, or even of possession."41 They only constitute proofs of a claim of title over the declared property.42 Her acts betray her claim of prior possession. Her counsel wrote Valeriana's son Esteban and demanded that the subject land be vacated. Carmen had to seek help from the authorities in order to fence the lot. Furthermore, by filing criminal cases for grave threats and grave coercion, she herself acknowledged that Valeriana, together with Esteban, another son and daughter-in-law, were the ones occupying the subject property and who allegedly prevented her from conducting a land survey.1wphi1 These circumstances are indicative of the Villondo family's possession of the premises. With this in mind, is Valeriana the appropriate party to file a forcible entry case against the respondents? We rule that the CA has no reason to withhold the relief she prays for on the ground of a lack of cause of action. "A real party-in-interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit."43 As we have explained: 'Interest' within the meaning of the rules means material interest, an interest in issue and to be affected by the decree as distinguished from mere interest in the question involved, or a mere incidental interest. A real party-in-interest is one who has a legal right. x x x The action must be brought by the person who, by substantive law, possesses the right sought to be enforced. x x x44 Section 1, Rule 70 of the Rules of Court specifies who may be the plaintiff in an action for forcible entry, viz: Section 1. Who may institute proceedings, and when. - x x x a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs. (Emphasis supplied.)

Sans the presence of the awardee of the Certificate of Stewardship, the provision clearly allows Valeriana to institute the action for the recovery of the physical possession of the property against For a court to restore possession, two things must be proven in a forcible entry case: prior physical the alleged usurper. She has a right or interest to protect as she was the one dispossessed and thus, she can file the action for forcible entry. Any judgment rendered by the courts below in the possession of the property and deprivation of the property by means of force, intimidation, threat, forcible entry action will bind and definitely affect her claim to possess the subject property. The strategy, or stealth.38"Possession de facto, i.e., the physical possession of a property, and not fact that Valeriana is not the holder of the Certificate of Stewardship is not in issue in a forcible possession de jure is the only issue in a forcible entry case. This rule holds true regardless of the character of a party's possession, provided that he has in his favor priority in time. x x x" 39 As used entry case. This matter already delves into the character of her possession. We emphasize that in 45 in forcible entry and unlawful detainer cases, 'possession' refers to "physical possession, not legal ejectment suits, it does not even matter if the party's title to the property is questionable. 40 possession in the sense contemplated in civil law." The MTCC correctly considered Valeriana as a real party-in-interest and correctly delved strictly with the issue of physical possession. Notably, the CA, other than dismissing the case for lack of

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cause of action, did not seem to dispute the MTCC's fascual finding of Valeriana's prior physical possession. Absent any evidence of respondents' prior physical possession. Valeriana, who has cogently convinced us that she was dispossessed of the land by force, is entitled to stay on the property until she is lawfully ejected by others who can prove in a separate proceeding that they have a better right. We then end by highlighting the principle behind ejectment proceedings: x x x Regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be thrown not by a strong hand, violence, or terror. Neither is the unlawful withholding of property allowed. Courts will always uphold respect for prior possession. 46 WHEREFORE, the instant petition is hereby GRANTED. The assailed March 31, 2005 Decision and July 10, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 70734 are hereby ANNULLED and SET ASIDE. The Decision of the Municipal Trial Court in Cities in Cebu, Branch 5, is REINSTATED and AFFIRMED. SO ORDERED.

Respondent alleged that her husband Jacinto entered into an overseas employment contract with Crewlink, Inc. for and in behalf of its foreign principal Gulf Marine Services, the details of which are as follows:

Duration of Contract Position Basic Monthly Salary Hours of Work Overtime Vacation Leave with pay Point of Hire

: : : : : : :

12 months Oiler US $385.00 48 hrs/wk US $115.50 1 mo. leave after 12 months Manila, Philippines

xxxx THIRD DIVISION G.R. No. 166803 October 11, 2012 Teringtering claimed that before her husband was employed, he was subjected to a preemployment medical examination wherein he was pronounced as "fit to work." Thus, her husband joined his vessel of assignment and performed his duties as Oiler. On or about April 18, 2001, a death certificate was issued by the Ministry of Health of the United Arab Emirates wherein it was stated that Jacinto died on April 9, 2001 due to asphyxia of drowning. Later on, an embalming and sealing certificate was issued after which the remains of Jacinto was brought back to the Philippines. After learning of the death of Jacinto, respondent claimed from petitioners the payment of death compensation in the amount of US$50,000.00 and burial expenses in the amount of US$1,000.00, as well as additional death compensation in the amount of US$7,000.00, for the minor Eimaereach Rose de Gracia Teringtering but was refused without any valid cause. Hence, a complaint was filed against the petitioners. Respondent claimed that in order for her husband's death to be compensable it is enough that he died during the term of his contract and while still on board. Respondent asserted that Jacinto was suffering from a psychotic disorder, or Mood Disorder Bipolar Type, which resulted to his jumping into the sea and his eventual death. Respondent further asserted that her husbands death was not deliberate and not of his own will, but was a result of a mental disorder, thus, compensable. For its part, petitioner Crewlink alleged that sometime on April 9, 2001, around 8:20 p.m. while at Nasr Oilfield, the late Jacinto Teringtering suddenly jumped into the sea, but the second engineer was able to recover him. Because of said incident, one personnel was directed to watch Jacinto. However, around 10:30 p.m., while the boat dropped anchor south of Nasr Oilfield and went on standby, Jacinto jumped off the boat again. Around 11:00 p.m., the A/B watchman reported that Jacinto was recovered but despite efforts to revive him, he was already dead from drowning.

CREWLINK, INC. and/or GULF MARINE SERVICES, Petitioners, vs. EDITHA TERINGTERING, for her behalf and in behalf of minor EIMAEREACH ROSE DE GARCIA TERINGTERING, Respondents. DECISION PERALTA, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision1 dated July H, 2004 and Resolution2 dated January 17, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 79966, setting aside the Resolutions dated February 20, 20033 and July 31, 20034 of the National Labor Relations Commission (NLRC), which affirmed in toto the Decision5 dated February 12, 2002 of the Labor Arbiter. The facts, as culled from the records, are as follows: Respondent Editha Teringtering (Teringtering), spouse of deceased Jacinto Teringtering (Jacinto), and in behalf of her minor child, filed a complaint against petitioner Crewlink, Inc. (Crewlink), and its foreign principal Gulf Marine Services for the payment of death benefits, benefit for minor child, burial assistance, damages and attorney's fees.

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Petitioner asserted that Teringtering was not entitled to the benefits being claimed, because Jacinto committed suicide. Despite the non-entitlement, however, Teringtering was even given burial assistance in the amount of P35,800.00 and P13,273.00 on May 21, 2001. She likewise received the amount of US$792.51 representing donations from the GMS staff and crew. Petitioner likewise argued that Teringtering is not entitled to moral and exemplary damages, because petitioner had nothing to do with her late husband's untimely demise as the same was due to his own doing. As part of the record, respondent submitted Ship Captain Oscar C. Morado's report on the incident, which we quote: At arround 2000 hrs. M/V Raja 3404 still underway to Nasr Complex w/ 1 passenger. 2018 hrs. A/side Nasr Complex boatlanding to drop 1 passenger At 2020 hrs. Mr. Jacinto Tering Tering suddenly jump to the sea, while the boat cast off from Nasr Complex boatlanding. And the second Engr. Mr. Sudarto jump and recover Mr. Jacinto Tering Tering the oiler. 2040 hrs. Dropped anchor south of Nasr oilfield and standby. And that time informed to GMS personnel about the accident, And we informed to A/B on duty to watch Mr. Jacinto Tering Tering. 2230 hrs. The A/B watch man informed that Mr. Jacinto Tering Tering jump again to the sea. And that time the wind NW 10-14 kts. and strong current. And the second Engr. jump to the sea with life ring to recover Mr. Jacinto Tering Tering. 2300 hrs. We recovered Mr. Jacinto Tering Tering onboard the vessel and apply Respiration Kiss of life Mouth to Mouth, And proceed to Nasr Complex to take doctor. 2320 hrs. A/side Nasr Complex boatlanding and the doctor on-board to check the patient. 2330 hrs. As per Nasr Complex Doctor the patient was already dead. Then informed to GMS personnel about the accident. I Captain Oscar C. Morado certify this report true and correct with the best of my knowledge and reserve the right, modify, ratify and/or enlarge this statement at any time and place, According to the law.6 In a Decision dated February 12, 2002, the Labor Arbiter, after hearing, dismissed the case for lack of merit. The Labor Arbiter held that, while it is true that Jacinto Teringtering died during the effectivity of his contract of employment and that he died of asphyxiation, nevertheless, his death was the result of his deliberate or intentional jumping into the sea. Thus, his death was directly attributable to him. Teringtering then appealed before the NLRC which affirmed in toto the ruling of the Labor Arbiter. Unsatisfied, Teringtering filed a petition for certiorari under Rule 65 before the Court of Appeals and sought the nullification of the NLRC Resolution, dated February 20, 2003, which affirmed the Labor Arbiters Decision dated February 12, 2002. On July 8, 2004, the CA reversed and set aside the assailed Resolution of the NLRC, the dispositive portion of which reads: WHEREFORE, premises considered, the Resolution dated February 20, 2003 is hereby REVERSED and SET ASIDE. Respondents Crewlink, Inc. and Gulf Marine Services are hereby

DECLARED jointly and severally liable and, accordingly, are directed to pay deceased Jacinto Teringtering's beneficiaries, namely respondent Editha Teringtering and her daughter Eimaereach Rose de Gracia, the Philippine Currency equivalent to US$50,000.00, and an additional amount of US$7,000, both at the exchange rate prevailing at the time of payment. SO ORDERED.7 Thus, before this Court, Crewlink, Inc. and/or Gulf Marine Services, as petitioner, raised the following issues: I WHETHER A SPECIAL CIVIL ACTION OF CERTIORARI INCLUDES CORRECTION OF THE NLRC'S EVALUATION OF THE EVIDENCE AND FACTUAL FINDINGS BASED THEREON OR CORRECTION OF ERRORS OF FACTS IN THE JUDGMENT OF THE NLRC; II WHETHER THE NEGLIGENT ACTS OF SUPPOSEDLY FAILING TO TAKE SUCH MEASURES FOR THE COMFORT AND SAFETY OF THE DECEASED SEAFARER, AMONG OTHERS, WHICH WERE ESPECIALLY EMPHASIZED IN THE ASSAILED CA DECISION AND WHICH ACTUALLY REFERRED TO ACTS COMMITTED BY THE SHIPMATES OF THE DECEASED, BUT POSITIVELY ATTRIBUTED TO PETITIONERS AND FOR WHICH THE LATTER ARE NOW BEING HELD LIABLE ARE IN THE NATURE OF AN ENTIRELY DIFFERENT SOURCE OF OBLIGATION THAT IS PREDICATED ON QUASI-DELICT OR TORT AS PROVIDED UNDER OUR CIVIL LAWS AND, THUS, HAS NO REFERENCE TO OUR LABOR CODE; III WHETHER THE DEATH OF SEAFARER IN THIS CASE WAS A RESULT OF A DELIBERATE/WILLFUL ACT ON HIS OWN LIFE, AN ACT DIRECTLY ATTRIBUTABLE TO THE DECEASED, AND NO OTHER, AS FOUND AND SO RULED BY THE LABOR ARBITER AND NLRC, AS TO RENDER HIS DEATH NOT COMPENSABLE. Petitioner claimed that Jacinto's death is not compensable, considering that the latter's death resulted from his willful act. It argued that the rule that the employer becomes liable once it is established that the seaman died during the effectivity of his employment contract is not absolute. The employer may be exempt from liability if he can successfully prove that the seaman's death was caused by an injury directly attributable to his deliberate or willful act, as in this case. We find merit in the petition. In a petition for review on certiorari, our jurisdiction is limited to reviewing errors of law in the absence of any showing that the factual findings complained of are devoid of support in the records or are glaringly erroneous. We are not a trier of facts, and this applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded

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not only great respect but even finality. They are binding upon this Court unless there is a showing of grave abuse of discretion or where it is clearly shown that they were arrived at arbitrarily or in utter disregard of the evidence on record. This case is no different. As found by the Labor Arbiter, Jacinto's jumping into the sea was not an accident but was deliberately done. Indeed, Jacinto jumped off twice into the sea and it was on his second attempt that caused his death. The accident report of Captain Oscar Morado narrated in detail the circumstances that led to Jacinto's death. The circumstances of Jacinto's actions before and at the time of his death were likewise entered in the Chief Officer's Log Book and were attested to by Captain Morado before the Philippine Embassy. Even the A/B personnel, Ronald Arroga, who was tasked to watch over Jacinto after his first attempt of committing suicide, testified that despite his efforts to prevent Jacinto from jumping again overboard, Jacinto was determined and even shoved him and jumped anew which eventually caused his death. Considering the foregoing, we do not find any reason to discredit the evidence presented as well as the findings of the Labor Arbiter. Settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. More so, when there is no showing that said findings were arrived at arbitrarily or in disregard of the evidence on record. Likewise, the provisions of the Code of Commerce are certainly inapplicable in this case. For precisely, the issue for resolution here is the obligation of the employer to its employee should the latter die during the term of his employment. The relationship between the petitioner and Jacinto is one based on contract of employment and not one of contract of carriage. Under No. 6, Section C, Part II of the POEA "Standard Employment Contract Governing the Employment of All Filipino Seamen On-Board Ocean-Going Vessels" (POEA-SEC), it is provided that: xxxx 6. No compensation shall be payable in respect of any injury, incapacity, disability or death resulting from a willful act on his own life by the seaman, provided, however, that the employer can prove that such injury, incapacity, disability or death is directly attributable to him. (Emphasis ours)

means of proof. As no man would know what goes on in the mind of another, the state or condition of a persons mind can only be measured and judged by his behavior. Establishing the insanity of an accused requires opinion testimony which may be given by a witness who is intimately acquainted with the person claimed to be insane, or who has rational basis to conclude that a person was insane based on the witness own perception of the person, or who is qualified as an expert, such as a psychiatrist.8 No such evidence was presented to support respondent's claim. The Court commiserates with the respondent, but absent substantial evidence from which reasonable basis for the grant of benefits prayed for can be drawn, the Court is left with no choice but to deny her petition, lest an injustice be caused to the employer. Otherwise slated, while it is true that labor contracts are impressed with public interest and the provisions of the POEA-SEC must be construed logically and liberally in favor of Filipino seamen in the pursuit of their employment on board ocean-going vessels, still the rule is that justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.9 WHEREFORE, the petition Is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 79966, dated July 8, 2004, and its January 17, 2005 Resolution denying the motion for reconsideration are REVERSED and SET ASIDE. The February 20, 2003 and July 31, 2003 Resolutions of the National Labor Relations Commission in NLRC NCR OFW Case No. (M) 01-061144-00, affirming the February 12, 2002 Decision of the Labor Arbiter, are hereby REINSTATED and AFFIRMED. SO ORDERED. FIRST DIVISION G.R. No. 184528 April 25, 2012

NILO OROPESA, Petitioner, vs. CIRILO OROPESA, Respondent. DECISION LEONARDO-DE CASTRO, J.:

Indeed, in order to avail of death benefits, the death of the employee should occur during the effectivity of the employment contract. The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. This rule, however, is not absolute. The employer may be exempt from liability if it can successfully prove that the seaman's death was caused by an injury directly attributable to his deliberate or willful act. In the instant case, petitioner was able to substantially prove that Jacinto's death was attributable to his deliberate act of killing himself by jumping into the sea. Meanwhile, respondent, other than her bare allegation that her husband was suffering from a mental disorder, no evidence, witness, or any medical report was given to support her claim of Jacinto's insanity. The record does not even show when the alleged insanity of Jacinto did start. Homesickness and/or family problems may result to depression, but the same does not necessarily equate to mental disorder. The issue of insanity is a question of fact; for insanity is a condition of the mind not susceptible of the usual

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the Decision1 dated February 29, 2008, as well as the Resolution2 dated September 16, 2008, both rendered by the Court of Appeals in CA-G.R. CV No. 88449, entitled "NILO OROPESA vs. CIRILO OROPESA." The Court of Appeals issuances affirmed the Order3 dated September 27, 2006 and the Order4 dated November 14, 2006 issued by the Regional Trial Court (RTC) of Paraaque City, Branch 260 in SP. Proc. Case No. 04-0016, which dismissed petitioner Nilo Oropesas petition for guardianship over the properties of his father, respondent Cirilo Oropesa (a widower), and denied petitioners motion for reconsideration thereof, respectively. The facts of this case, as summed in the assailed Decision, follow:

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On January 23, 2004, the (petitioner) filed with the Regional Trial Court of Paraaque City, a petition for him and a certain Ms. Louie Ginez to be appointed as guardians over the property of his father, the (respondent) Cirilo Oropesa. The case was docketed as SP Proc. No. 04-0016 and raffled off to Branch 260.

Petitioner moved for reconsideration but this was denied by the trial court in an Order dated November 14, 2006, the dispositive portion of which states: WHEREFORE, considering that the Court record shows that petitioner-movant has failed to provide sufficient documentary and testimonial evidence to establish that Gen. Cirilo Oropesa is incompetent to run his personal affairs and to administer his properties, the Court hereby affirms its earlier Order dated 27 September 2006.

In the said petition, it is alleged among others that the (respondent) has been afflicted with several maladies and has been sickly for over ten (10) years already having suffered a stroke on April 1, 2003 and June 1, 2003, that his judgment and memory [were] impaired and such has been evident after his hospitalization; that even before his stroke, the (respondent) was observed to have had Accordingly, petitioners Motion for Reconsideration is DENIED for lack of merit.7 lapses in memory and judgment, showing signs of failure to manage his property properly; that due to his age and medical condition, he cannot, without outside aid, manage his property wisely, and has become an easy prey for deceit and exploitation by people around him, particularly Ms. Unperturbed, petitioner elevated the case to the Court of Appeals but his appeal was dismissed Ma. Luisa Agamata, his girlfriend. through the now assailed Decision dated February 29, 2008, the dispositive portion of which reads: In an Order dated January 29, 2004, the presiding judge of the court a quo set the case for hearing, and directed the court social worker to conduct a social case study and submit a report thereon. Pursuant to the abovementioned order, the Court Social Worker conducted her social case study, interviewing the (petitioner) and his witnesses. The Court Social Worker subsequently submitted her report but without any finding on the (respondent) who refused to see and talk to the social worker. On July 6, 2004, the (respondent) filed his Opposition to the petition for guardianship. On August 3, 2004, the (respondent) filed his Supplemental Opposition. Thereafter, the (petitioner) presented his evidence which consists of his testimony, and that of his sister Gianina Oropesa Bennett, and the (respondents) former nurse, Ms. Alma Altaya. After presenting evidence, the (petitioner) filed a manifestation dated May 29, 2006 resting his case. The (petitioner) failed to file his written formal offer of evidence. Thus, the (respondent) filed his "Omnibus Motion (1) to Declare the petitioner to have waived the presentation of his Offer of Exhibits and the presentation of his Evidence Closed since they were not formally offered; (2) To Expunge the Documents of the Petitioner from the Record; and (3) To Grant leave to the Oppositor to File Demurrer to Evidence. In an Order dated July 14, 2006, the court a quo granted the (respondents) Omnibus Motion. Thereafter, the (respondent) then filed his Demurrer to Evidence dated July 23, 2006. 5 (Citations omitted.) The trial court granted respondents demurrer to evidence in an Order dated September 27, 2006. The dispositive portion of which reads: WHEREFORE, considering that the petitioner has failed to provide sufficient evidence to establish that Gen. Cirilo O. Oropesa is incompetent to run his personal affairs and to administer his properties, Oppositors Demurrer to Evidence is GRANTED, and the case is DISMISSED. 6

WHEREFORE, premises considered the instant appeal is DISMISSED. The assailed orders of the court a quo dated September 27, 2006 and November 14, 2006 are AFFIRMED. 8 A motion for reconsideration was filed by petitioner but this was denied by the Court of Appeals in the similarly assailed Resolution dated September 16, 2008. Hence, the instant petition was filed. Petitioner submits the following question for consideration by this Court: WHETHER RESPONDENT IS CONSIDERED AN "INCOMPETENT" PERSON AS DEFINED UNDER SECTION 2, RULE 92 OF THE RULES OF COURT WHO SHOULD BE PLACED UNDER GUARDIANSHIP9 After considering the evidence and pleadings on record, we find the petition to be without merit. Petitioner comes before the Court arguing that the assailed rulings of the Court of Appeals should be set aside as it allegedly committed grave and reversible error when it affirmed the erroneous decision of the trial court which purportedly disregarded the overwhelming evidence presented by him showing respondents incompetence. In Francisco v. Court of Appeals,10 we laid out the nature and purpose of guardianship in the following wise: A guardianship is a trust relation of the most sacred character, in which one person, called a "guardian" acts for another called the "ward" whom the law regards as incapable of managing his own affairs. A guardianship is designed to further the wards well -being, not that of the guardian. It is intended to preserve the wards property, as well as to render any assistance that the ward may personally require. It has been stated that while custody involves immediate care and control, guardianship indicates not only those responsibilities, but those of one in loco parentis as well.11 In a guardianship proceeding, a court may appoint a qualified guardian if the prospective ward is proven to be a minor or an incompetent. A reading of Section 2, Rule 92 of the Rules of Court tells us that persons who, though of sound mind but by reason of age, disease, weak mind or other similar causes, are incapable of taking

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Respondent denied the allegations made by petitioner and cited petitioners lack of material evidence to support his claims. According to respondent, petitioner did not present any relevant documentary or testimonial evidence that would attest to the veracity of his assertion that respondent is incompetent largely due to his alleged deteriorating medical and mental condition. In Sec. 2. Meaning of the word "incompetent." Under this rule, the word "incompetent" includes fact, respondent points out that the only medical document presented by petitioner proves that he persons suffering the penalty of civil interdiction or who are hospitalized lepers, prodigals, deaf and is indeed competent to run his personal affairs and administer his properties. Portions of the said dumb who are unable to read and write, those who are of unsound mind, even though they have document, entitled "Report of Neuropsychological Screening,"15 were quoted by respondent in his lucid intervals, and persons not being of unsound mind, but by reason of age, disease, weak mind, Memorandum16 to illustrate that said report in fact favored respondents claim of competence, to and other similar causes, cannot, without outside aid, take care of themselves and manage their wit: property, becoming thereby an easy prey for deceit and exploitation. care of themselves and their property without outside aid are considered as incompetents who may properly be placed under guardianship. The full text of the said provision reads: We have held in the past that a "finding that a person is incompetent should be anchored on clear, positive and definite evidence."12 We consider that evidentiary standard unchanged and, thus, must be applied in the case at bar. In support of his contention that respondent is incompetent and, therefore, should be placed in guardianship, petitioner raises in his Memorandum 13 the following factual matters: a. Respondent has been afflicted with several maladies and has been sickly for over ten (10) years already; b. During the time that respondent was hospitalized at the St. Lukes Medical Center after his stroke, he purportedly requested one of his former colleagues who was visiting him to file a loan application with the Armed Forces of the Philippines Savings and Loan Association, Inc. (AFPSLAI) for payment of his hospital bills, when, as far as his children knew, he had substantial amounts of money in various banks sufficient to cover his medical expenses; c. Respondents residence allegedly has been left dilapidated due to lack of care and management; d. The realty taxes for respondents various properties remain unpaid and therefore petitioner and his sister were supposedly compelled to pay the necessary taxes; e. Respondent allegedly instructed petitioner to sell his Nissan Exalta car for the reason that the former would be purchasing another vehicle, but when the car had been sold, respondent did not procure another vehicle and refused to account for the money earned from the sale of the old car; f. Respondent withdrew at least $75,000.00 from a joint account under his name and his daughters without the latters knowledge or consent; g. There was purportedly one occasion where respondent took a kitchen knife to stab himself upon the "orders" of his girlfriend during one of their fights; h. Respondent continuously allows his girlfriend to ransack his house of groceries and furniture, despite protests from his children.14 General Oropesa spoke fluently in English and Filipino, he enjoyed and participated meaningfully in conversations and could be quite elaborate in his responses on many of the test items. He spoke in a clear voice and his articulation was generally comprehensible. x x x. xxxx General Oropesa performed in the average range on most of the domains that were tested. He was able to correctly perform mental calculations and keep track of number sequences on a task of attention. He did BEST in visuo-constructional tasks where he had to copy geometrical designs using tiles. Likewise, he was able to render and read the correct time on the Clock Drawing Test. x x x. xxxx x x x Reasoning abilities were generally intact as he was able to suggest effective solutions to problem situations. x x x.17 With the failure of petitioner to formally offer his documentary evidence, his proof of his fathers incompetence consisted purely of testimonies given by himself and his sister (who were claiming interest in their fathers real and personal properties) and their fathers former caregiver (who admitted to be acting under their direction). These testimonies, which did not include any expert medical testimony, were insufficient to convince the trial court of petitioners cause of action and instead lead it to grant the demurrer to evidence that was filed by respondent. Even if we were to overlook petitioners procedural lapse in failing to make a formal offer of evidence, his documentary proof were comprised mainly of certificates of title over real properties registered in his, his fathers and his sisters names as co-owners, tax declarations, and receipts showing payment of real estate taxes on their co-owned properties, which do not in any way relate to his fathers alleged incapacity to make decisions for himself. The only medical document on record is the aforementioned "Report of Neuropsychological Screening" which was attached to the petition for guardianship but was never identified by any witness nor offered as evidence. In any event, the said report, as mentioned earlier, was ambivalent at best, for although the report had negative findings regarding memory lapses on the part of respondent, it also contained findings that supported the view that respondent on the average was indeed competent. In an analogous guardianship case wherein the soundness of mind of the proposed ward was at issue, we had the occasion to rule that "where the sanity of a person is at issue, expert opinion is not necessary [and that] the observations of the trial judge coupled with evidence establishing the persons state of mental sanity will suffice."18

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Thus, it is significant that in its Order dated November 14, 2006 which denied petitioners motion for reconsideration on the trial courts unfavorable September 27, 2006 ruling, the trial court highlighted the fatal role that petitioners own documentary evidence played in disproving its case and, likewise, the trial court made known its own observation of respondents physical and men tal state, to wit: The Court noted the absence of any testimony of a medical expert which states that Gen. Cirilo O. Oropesa does not have the mental, emotional, and physical capacity to manage his own affairs. On the contrary, Oppositors evidence includes a Neuropsychological Screening Report which states that Gen. Oropesa, (1) performs on the average range in most of the domains that were tested; (2) is capable of mental calculations; and (3) can provide solutions to problem situations. The Report concludes that Gen. Oropesa possesses intact cognitive functioning, except for mildly impaired abilities in memory, reasoning and orientation. It is the observation of the Court that oppositor is still sharp, alert and able.19 (Citation omitted; emphasis supplied.) It is axiomatic that, as a general rule, "only questions of law may be raised in a petition for review on certiorari because the Court is not a trier of facts."20 We only take cognizance of questions of fact in certain exceptional circumstances;21 however, we find them to be absent in the instant case. It is also long settled that "factual findings of the trial court, when affirmed by the Court of Appeals, will not be disturbed by this Court. As a rule, such findings by the lower courts are entitled to great weight and respect, and are deemed final and conclusive on this Court when supported by the evidence on record."22 We therefore adopt the factual findings of the lower court and the Court of Appeals and rule that the grant of respondents demurrer to evidence was proper under the circumstances obtaining in the case at bar. Section 1, Rule 33 of the Rules of Court provides: Section 1. Demurrer to evidence. After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence. A demurrer to evidence is defined as "an objection by one of the parties in an action, to the effect that the evidence which his adversary produced is insufficient in point of law, whether true or not, to make out a case or sustain the issue."23 We have also held that a demurrer to evidence "authorizes a judgment on the merits of the case without the defendant having to submit evidence on his part, as he would ordinarily have to do, if plaintiffs evidence shows that he is not entit led to the relief sought."241wphi1

SO ORDERED. FIRST DIVISION G.R. No. 167057 April 11, 2012

NERWIN INDUSTRIES CORPORATION, Petitioner, vs. PNOC-ENERGY DEVELOPMENT CORPORATION, and ESTER R. GUERZON, Chairman, Bids and Awards Committee, Respondents. DECISION BERSAMIN, J.: Republic Act No. 89751 expressly prohibits any court, except the Supreme Court, from issuing any temporary restraining order (TRO), preliminary injunction, or preliminary mandatory injunction to restrain, prohibit or compel the Government, or any of its subdivisions or officials, or any person or entity, whether public or private, acting under the Governments direction, from: (a) acquiring, clearing, and developing the right-of-way, site or location of any National Government project; (b) bidding or awarding of a contract or project of the National Government; (c) commencing, prosecuting, executing, implementing, or operating any such contract or project; (d) terminating or rescinding any such contract or project; and (e) undertaking or authorizing any other lawful activity necessary for such contract or project. Accordingly, a Regional Trial Court (RTC) that ignores the statutory prohibition and issues a TRO or a writ of preliminary injunction or preliminary mandatory injunction against a government contract or project acts contrary to law. Antecedents The following antecedents are culled from the assailed decision of the Court of Appeals (CA) promulgated on October 22, 2004,2 viz:

In 1999, the National Electrification Administration ("NEA") published an invitation to pre-qualify and to bid for a contract, otherwise known as IPB No. 80, for the supply and delivery of about sixty thousand (60,000) pieces of woodpoles and twenty thousand (20,000) pieces of crossarms needed in the countrys Rural Electrification Project. The said contract consisted of four (4) There was no error on the part of the trial court when it dismissed the petition for guardianship components, namely: PIA, PIB and PIC or woodpoles and P3 or crossarms, necessary for NEAs without first requiring respondent to present his evidence precisely because the effect of granting a projected allocation for Luzon, Visayas and Mindanao. In response to the said invitation, bidders, demurrer to evidence other than dismissing a cause of action is, evidently, to preclude a defendant such as private respondent [Nerwin], were required to submit their application for eligibility from presenting his evidence since, upon the facts and the law, the plaintiff has shown no right to together with their technical proposals. At the same time, they were informed that only those who relief. would pass the standard pre-qualification would be invited to submit their financial bids. WHEREFORE, premises considered, the petition is hereby DENIED. The assailed Decision dated February 29, 2008 as well as the Resolution dated September 16, 2008 of the Court of Appeals in CA-G.R. CV No. 88449 are AFFIRMED. Following a thorough review of the bidders qualifications and eligibility, only four (4) bidders, including private respondent [Nerwin], qualified to participate in the bidding for the IPB-80 contract. Thereafter, the qualified bidders submitted their financial bids where private respondent [Nerwin] emerged as the lowest bidder for all schedules/components of the contract. NEA then conducted a

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pre-award inspection of private respondents [Nerwins] manufacturing plants and facilities, including its identified supplier in Malaysia, to determine its capability to supply and deliver NEAs requirements. In the Recommendation of Award for Schedules PIA, PIB, PIC and P3 - IBP No. 80 [for the] Supply and Delivery of Woodpoles and Crossarms dated October 4, 2000, NEA administrator Conrado M. Estrella III recommended to NEAs Board of Directors the approval of award to private respondent [Nerwin] of all schedules for IBP No. 80 on account of the following: a. Nerwin is the lowest complying and responsive bidder;

Upon learning of the issuance of Requisition No. FGJ 30904R1 for the O-ILAW Project, Nerwin filed a civil action in the RTC in Manila, docketed as Civil Case No. 03106921 entitled Nerwin Industries Corporation v. PNOC-Energy Development Corporation and Ester R. Guerzon, as Chairman, Bids and Awards Committee, alleging that Requisition No. FGJ 30904R1 was an attempt to subject a portion of the items covered by IPB No. 80 to another bidding; and praying that a TRO issue to enjoin respondents proposed bidding for the wooden poles. Respondents sought the dismissal of Civil Case No. 03106921, stating that the complaint averred no cause of action, violated the rule that government infrastructure projects were not to be subjected to TROs, contravened the mandatory prohibition against non-forum shopping, and the corporate president had no authority to sign and file the complaint. 3

b. The price difference for the four (4) schedules between the bid of Nerwin Industries On June 27, 2003, after Nerwin had filed its rejoinder to respondents reply, the RTC granted a (lowest responsive and complying bidder) and the second lowest bidder in the amount of TRO in Civil Case No. 03106921.4 $1.47 million for the poles and $0.475 million for the crossarms, is deemed substantial and extremely advantageous to the government. The price difference is equivalent to 7,948 pcs. of poles and 20.967 pcs. of crossarms; On July 30, 2003, the RTC issued an order,5 as follows: c. The price difference for the three (3) schedules between the bids of Nerwin and the Tri-State Pole and Piling, Inc. approximately in the amount of $2.36 million for the poles and $0.475 million for the crossarms are equivalent to additional 12.872 pcs. of poles and 20.967 pcs. of crossarms; and d. The bidder and manufacturer are capable of supplying the woodpoles and specified in the bid documents and as based on the pre-award inspection conducted. However, on December 19, 2000, NEAs Board of Directors passed Resolution No. 32 reducing by 50% the material requirements for IBP No. 80 "given the time limitations for the delivery of the materials, xxx, and with the loan closing date of October 2001 fast approaching". In turn, it resolved to award the four (4) schedules of IBP No. 80 at a reduced number to private respondent [Nerwin]. Private respondent [Nerwin] protested the said 50% reduction, alleging that the same was a ploy to accommodate a losing bidder. On the other hand, the losing bidders Tri State and Pacific Synnergy appeared to have filed a complaint, citing alleged false or falsified documents submitted during the pre-qualification stage which led to the award of the IBP-80 project to private respondent [Nerwin]. Thus, finding a way to nullify the result of the previous bidding, NEA officials sought the opinion of the Government Corporate Counsel who, among others, upheld the eligibility and qualification of private respondent [Nerwin]. Dissatisfied, the said officials attempted to seek a revision of the earlier opinion but the Government Corporate Counsel declared anew that there was no legal impediment to prevent the award of IPB-80 contract to private respondent [Nerwin]. Notwithstanding, NEA allegedly held negotiations with other bidders relative to the IPB-80 contract, prompting private respondent [Nerwin] to file a complaint for specific performance with prayer for the issuance of an injunction, which injunctive application was granted by Branch 36 of RTC-Manila in Civil Case No. 01102000. In the interim, PNOC-Energy Development Corporation purporting to be under the Department of Energy, issued Requisition No. FGJ 30904R1 or an invitation to pre-qualify and to bid for wooden poles needed for its Samar Rural Electrification Project ("O-ILAW project"). WHEREFORE, for the foregoing considerations, an order is hereby issued by this Court: 1. DENYING the motion to consolidate; 2. DENYING the urgent motion for reconsideration; 3. DISQUALIFYING Attys. Michael A. Medado, Datu Omar S. Sinsuat and Mariano H. Paps from appearing as counsel for the defendants; 4. DECLARING defendants in default; 5. GRANTING the motion for issuance of writ of preliminary injunction. Accordingly, let a writ of preliminary injunction issue enjoining the defendant PNOC-EDC and its Chairman of Bids and Awards Committee Esther R. Guerzon from continuing the holding of the subject bidding upon the plaintiffs filing of a bond in the amount of P200,000.00 to answer for any damage or damages which the defendants may suffer should it be finally adjudged that petitioner is not entitled thereto, until final determination of the issue in this case by this Court. This order shall become effective only upon the posting of a bond by the plaintiffs in the amount of P200,000.00. Let a copy of this order be immediately served on the defendants and strict compliance herein is enjoined. Furnish the Office of the Government Corporate Counsel copy of this order. SO ORDERED. Respondents moved for the reconsideration of the order of July 30, 2003, and also to set aside the order of default and to admit their answer to the complaint.

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On January 13, 2004, the RTC denied respondents motions for reconsideration, to set aside order of default, and to admit answer.6 Thence, respondents commenced in the Court of Appeals (CA) a special civil action for certiorari (CA-GR SP No. 83144), alleging that the RTC had thereby committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that Nerwin had been entitled to the issuance of the writ of preliminary injunction despite the express prohibition from the law and from the Supreme Court; in issuing the TRO in blatant violation of the Rules of Court and established jurisprudence; in declaring respondents in default; and in disqualifying respondents counsel from representing them.7 On October 22, 2004, the CA promulgated its decision,8 to wit: WHEREFORE, the petition is GRANTED. The assailed Orders dated July 30 and December 29, 2003 are hereby ANNULED and SET ASIDE. Accordingly, Civil Case No. 03106921, private respondents complaint for issuance of temporary restraining order/writ of preliminary injunction before Branch 37 of the Regional Trial Court of Manila, is DISMISSED for lack of merit. SO ORDERED. Nerwin filed a motion for reconsideration, but the CA denied the motion on February 9, 2005. 9 Issues Hence, Nerwin appeals, raising the following issues: I. Whether or not the CA erred in dismissing the case on the basis of Rep. Act 8975 prohibiting the issuance of temporary restraining orders and preliminary injunctions, except if issued by the Supreme Court, on government projects. II. Whether or not the CA erred in ordering the dismissal of the entire case on the basis of Rep. Act 8975 which prohibits the issuance only of a preliminary injunction but not injunction as a final remedy. III. Whether or not the CA erred in dismissing the case considering that it is also one for damages. Ruling The petition fails. In its decision of October 22, 2004, the CA explained why it annulled and set aside the assailed orders of the RTC issued on July 20, 2003 and December 29, 2003, and why it altogether dismissed Civil Case No. 03106921, as follows: It is beyond dispute that the crux of the instant case is the propriety of respondent Judges issuance of a preliminary injunction, or the earlier TRO, for that matter.

Respondent Judge gravely abused his discretion in entertaining an application for TRO/preliminary injunction, and worse, in issuing a preliminary injunction through the assailed order enjoining petitioners sought bidding for its O-ILAW Project. The same is a palpable violation of RA 8975 which was approved on November 7, 2000, thus, already existing at the time respondent Judge issued the assailed Orders dated July 20 and December 29, 2003. Section 3 of RA 8975 states in no uncertain terms, thus: Prohibition on the Issuance of temporary Restraining Order, Preliminary Injunctions and Preliminary Mandatory Injunctions. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials, or any person or entity, whether public or private, acting under the governments direction, to restrain, prohibit or compel the following acts: xxx (b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof; xxx This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders or those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. xxx The said proscription is not entirely new. RA 8975 merely supersedes PD 1818 which earlier underscored the prohibition to courts from issuing restraining orders or preliminary injunctions in cases involving infrastructure or National Resources Development projects of, and public utilities operated by, the government. This law was, in fact, earlier upheld to have such a mandatory nature by the Supreme Court in an administrative case against a Judge. Moreover, to bolster the significance of the said prohibition, the Supreme Court had the same embodied in its Administrative Circular No. 11-2000 which reiterates the ban on issuance of TRO or writs of Preliminary Prohibitory or Mandatory Injunction in cases involving Government Infrastructure Projects. Pertinent is the ruling in National Housing Authority vs. Allarde "As regards the definition of infrastructure projects, the Court stressed in Republic of the Phil. vs. Salvador Silverio and Big Bertha Construction: The term infrastructure projects means construction, improvement and rehabilitation of roads, and bridges, railways, airports, seaports, communication facilities, irrigation, flood control and drainage, water supply and sewerage systems, shore protection, power facilities, national buildings, school buildings, hospital buildings and other related construction projects that form part of the government capital investment." Thus, there is nothing from the law or jurisprudence, or even from the facts of the case, that would justify respondent Judges blatant disregard of a "simple, comprehensible and unequivocal mandate (of PD 1818) prohibiting the issuance of injunctive writs relative to government infrastructure projects." Respondent Judge did not even endeavor, although expectedly, to show that the instant case falls under the single exception where the said proscription may not apply,

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i.e., when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. Respondent Judge could not have legally declared petitioner in default because, in the first place, he should not have given due course to private respondents complaint for injunction. Indubitably, the assailed orders were issued with grave abuse of discretion amounting to lack or excess of jurisdiction. Perforce, this Court no longer sees the need to resolve the other grounds proffered by petitioners.10 The CAs decision was absolutely correct. The RTC gravely abused its discretion, firstly, when it entertained the complaint of Nerwin against respondents notwithstanding that Nerwin was thereby contravening the express provisions of Section 3 and Section 4 of Republic Act No. 8975 for its seeking to enjoin the bidding out by respondents of the O-ILAW Project; and, secondly, when it issued the TRO and the writ of preliminary prohibitory injunction. Section 3 and Section 4 of Republic Act No. 8975 provide: Section 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the governments direction, to restrain, prohibit or compel the following acts: (a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project; (b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof; (c) Commencement, prosecution, execution, implementation, operation of any such contract or project; (d) Termination or rescission of any such contract/project; and (e) The undertaking or authorization of any other lawful activity necessary for such contract/project. This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders or those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court should finally decide that the applicant was not entitled to the relief sought.

If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate under the circumstances, award the contract to the qualified and winning bidder or order a rebidding of the same, without prejudice to any liability that the guilty party may incur under existing laws. Section 4. Nullity of Writs and Orders. - Any temporary restraining order, preliminary injunction or preliminary mandatory injunction issued in violation of Section 3 hereof is void and of no force and effect. The text and tenor of the provisions being clear and unambiguous, nothing was left for the RTC to do except to enforce them and to exact upon Nerwin obedience to them. The RTC could not have been unaware of the prohibition under Republic Act No. 8975 considering that the Court had itself instructed all judges and justices of the lower courts, through Administrative Circular No. 11-2000, to comply with and respect the prohibition against the issuance of TROs or writs of preliminary prohibitory or mandatory injunction involving contracts and projects of the Government. It is of great relevance to mention at this juncture that Judge Vicente A. Hidalgo, the Presiding Judge of Branch 37 of the RTC, the branch to which Civil Case No. 03106921 had been raffled, was in fact already found administratively liable for gross misconduct and gross ignorance of the law as the result of his issuance of the assailed TRO and writ of preliminary prohibitory injunction. The Court could only fine him in the amount ofP40,000.00 last August 6, 2008 in view of his intervening retirement from the service. That sanction was meted on him in A.M. No. RTJ-08-2133 entitled Sinsuat v. Hidalgo,11 where this Court stated: The Court finds that, indeed, respondent is liable for gross misconduct. As the CA explained in its above-stated Decision in the petition for certiorari, respondent failed to heed the mandatory ban imposed by P.D. No. 1818 and R.A. No. 8975 against a government infrastructure project, which the rural electrification project certainly was. He thereby likewise obstinately disregarded this Courts various circulars enjoining courts from issuing TROs and injunctions against government infrastructure projects in line with the proscription under R.A. No. 8975. Aproposare Gov. Garcia v. Hon. Burgos and National Housing Authority v. Hon. Allarde wherein this Court stressed that P.D. No. 1818 expressly deprives courts of jurisdiction to issue injunctive writs against the implementation or execution of a government infrastructure project. Reiterating the prohibitory mandate of P.D. No. 1818, the Court in Atty. Caguioa v. Judge Lavia faulted a judge for grave misconduct for issuing a TRO against a government infrastructure project thus: xxx It appears that respondent is either feigning a misunderstanding of the law or openly manifesting a contumacious indifference thereto. In any case, his disregard of the clear mandate of PD 1818, as well as of the Supreme Court Circulars enjoining strict compliance therewith, constitutes grave misconduct and conduct prejudicial to the proper administration of justice. His claim that the said statute is inapplicable to his January 21, 1997 Order extending the dubious TRO is but a contrived subterfuge to evade administrative liability. In resolving matters in litigation, judges should endeavor assiduously to ascertain the facts and the applicable laws. Moreover, they should exhibit more than just a cursory acquaintance with statutes and procedural rules. Also, they are expected to keep abreast of and be conversant with the rules and the circulars which the Supreme Court has adopted and which affect the disposition of cases before them.

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Although judges have in their favor the presumption of regularity and good faith in the performance of their judicial functions, a blatant disregard of the clear and unmistakable terms of the law obviates this presumption and renders them susceptible to administrative sanctions. (Emphasis and underscoring supplied) The pronouncements in Caguioa apply as well to respondent. The questioned acts of respondent also constitute gross ignorance of the law for being patently in disregard of simple, elementary and well-known rules which judges are expected to know and apply properly. IN FINE, respondent is guilty of gross misconduct and gross ignorance of the law, which are serious charges under Section 8 of Rule 140 of the Rules of Court. He having retired from the service, a fine in the amount ofP40,000 is imposed upon him, the maximum amount fixed under Section 11 of Rule 140 as an alternative sanction to dismissal or suspension. 12 Even as the foregoing outcome has rendered any further treatment and discussion of Nerwins other submissions superfluous and unnecessary, the Court notes that the RTC did not properly appreciate the real nature and true purpose of the injunctive remedy. This failing of the RTC presses the Court to use this decision to reiterate the norms and parameters long standing jurisprudence has set to control the issuance of TROs and writs of injunction, and to now insist on conformity to them by all litigants and lower courts. Only thereby may the grave misconduct committed in Civil Case No. 03106921 be avoided.1wphi1 A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or person, to refrain from a particular act or acts.13 It is an ancillary or preventive remedy resorted to by a litigant to protect or preserve his rights or interests during the pendency of the case. As such, it is issued only when it is established that: (a) The applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; or (b) The commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) A party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.14 The existence of a right to be protected by the injunctive relief is indispensable. In City Government of Butuan v. Consolidated Broadcasting System (CBS), Inc.,15 the Court elaborated on this requirement, viz: As with all equitable remedies, injunction must be issued only at the instance of a party who possesses sufficient interest in or title to the right or the property sought to be protected. It is

proper only when the applicant appears to be entitled to the relief demanded in the complaint, which must aver the existence of the right and the violation of the right, or whose averments must in the minimum constitute a prima facie showing of a right to the final relief sought. Accordingly, the conditions for the issuance of the injunctive writ are: (a) that the right to be protected exists prima facie; (b) that the act sought to be enjoined is violative of that right; and (c) that there is an urgent and paramount necessity for the writ to prevent serious damage. An injunction will not issue to protect a right not in esse, or a right which is merely contingent and may never arise; or to restrain an act which does not give rise to a cause of action; or to prevent the perpetration of an act prohibited by statute. Indeed, a right, to be protected by injunction, means a right clearly founded on or granted by law or is enforceable as a matter of law.16 Conclusive proof of the existence of the right to be protected is not demanded, however, for, as the Court has held in Saulog v. Court of Appeals,17 it is enough that: xxx for the court to act, there must be an existing basis of facts affording a present right which is directly threatened by an act sought to be enjoined. And while a clear showing of the right claimed is necessary, its existence need not be conclusively established. In fact, the evidence to be submitted to justify preliminary injunction at the hearing thereon need not be conclusive or complete but need only be a "sampling" intended merely to give the court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. This should really be so since our concern here involves only the propriety of the preliminary injunction and not the merits of the case still pending with the trial court. Thus, to be entitled to the writ of preliminary injunction, the private respondent needs only to show that it has theostensible right to the final relief prayed for in its complaint xxx.18 In this regard, the Rules of Court grants a broad latitude to the trial courts considering that conflicting claims in an application for a provisional writ more often than not involve and require a factual determination that is not the function of the appellate courts. 19 Nonetheless, the exercise of such discretion must be sound, that is, the issuance of the writ, though discretionary, should be upon the grounds and in the manner provided by law.20When that is done, the exercise of sound discretion by the issuing court in injunctive matters must not be interfered with except when there is manifest abuse.21 Moreover, judges dealing with applications for the injunctive relief ought to be wary of improvidently or unwarrantedly issuing TROs or writs of injunction that tend to dispose of the merits without or before trial. Granting an application for the relief in disregard of that tendency is judicially impermissible,22 for it is never the function of a TRO or preliminary injunction to determine the merits of a case,23 or to decide controverted facts.24 It is but a preventive remedy whose only mission is to prevent threatened wrong,25 further injury,26 and irreparable harm27or injustice28 until the rights of the parties can be settled. Judges should thus look at such relief only as a means to protect the ability of their courts to render a meaningful decision. 29 Foremost in their minds should be to guard against a change of circumstances that will hamper or prevent the granting of proper reliefs after a trial on the merits.30 It is well worth remembering that the writ of preliminary injunction should issue only to prevent the threatened continuous and irremediable injury to the applicant before the claim can be justly and thoroughly studied and adjudicated. 31 WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and ORDERS petitioner to pay the costs of suit. The Court Administrator shall disseminate this decision to the lower courts for their guidance.

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SO ORDERED. FIRST DIVISION G.R. No. 158891 June 27, 2012

Entry No. 821/T-RT-67970(253279) MORTGAGE In favor of Pablo Garcia m/to Isabela Garcia to guarantee a principal obligation in the sum of P1,800,000.00 mortgagees consent necessary in case of subsequent encumbrance or alienation of the property; Other conditions set forth in Doc. No. 08, Book No. VII, Page No. 03 of the Not. Pub. of Azucena Espejo Lozada Date of Instrument: 10/10/94 Date of Inscription: 10/11/94 LRC Consulta No. 1698 On November 21, 1996, Galas sold the subject property to Villar for One Million Five Hundred Thousand Pesos (P1,500,000.00), and declared in the Deed of Sale9 that such property was "free and clear of all liens and encumbrances of any kind whatsoever."10 On December 3, 1996, the Deed of Sale was registered and, consequently, TCT No. RT67970(253279) was cancelled and TCT No. N-16836111 was issued in the name of Villar. Both Villars and Garcias mortgages were carried over and annotated at the back of Villars new TCT. 12

PABLO P. GARCIA, Petitioner, vs. YOLANDA VALDEZ VILLAR, Respondent. DECISION LEONARDO-DE CASTRO, J.: This is a petition for review on certiorari1 of the February 27, 2003 Decision2 and July 2, 2003 Resolution3 of the Court of Appeals in CA-G.R. SP No. 72714, which reversed the May 27, 2002 Decision4 of the Regional Trial Court (RTC), Branch 92 of Quezon City in Civil Case No. Q-9939139. Lourdes V. Galas (Galas) was the original owner of a piece of property (subject property) located at Malindang St., Quezon City, covered by Transfer Certificate of Title (TCT) No. RT67970(253279).5

On October 27, 1999, Garcia filed a Petition for Mandamus with Damages 13 against Villar before the RTC, Branch 92 of Quezon City. Garcia subsequently amended his petition to a Complaint for Foreclosure of Real Estate Mortgage with Damages.14 Garcia alleged that when Villar purchased the subject property, she acted in bad faith and with malice as she knowingly and willfully disregarded the provisions on laws on judicial and extrajudicial foreclosure of mortgaged property. On July 6, 1993, Galas, with her daughter, Ophelia G. Pingol (Pingol), as co-maker, mortgaged the Garcia further claimed that when Villar purchased the subject property, Galas was relieved of her subject property to Yolanda Valdez Villar (Villar) as security for a loan in the amount of Two Million contractual obligation and the characters of creditor and debtor were merged in the person of Villar. Therefore, Garcia argued, he, as the second mortgagee, was subrogated t o Villars original Two Hundred Thousand Pesos (P2,200,000.00).6 status as first mortgagee, which is the creditor with the right to foreclose. Garcia further asserted that he had demanded payment from Villar,15 whose refusal compelled him to incur expenses in On October 10, 1994, Galas, again with Pingol as her co-maker, mortgaged the same subject filing an action in court.16 property to Pablo P. Garcia (Garcia) to secure her loan of One Million Eight Hundred Thousand Pesos (P1,800,000.00).7 Villar, in her Answer,17 claimed that the complaint stated no cause of action and that the second mortgage was done in bad faith as it was without her consent and knowledge. Villar alleged that Both mortgages were annotated at the back of TCT No. RT-67970 (253279), to wit: she only discovered the second mortgage when she had the Deed of Sale registered. Villar blamed Garcia for the controversy as he accepted the second mortgage without prior consent from her. She averred that there could be no subrogation as the assignment of credit was done with REAL ESTATE MORTGAGE neither her knowledge nor prior consent. Villar added that Garcia should seek recourse against Galas and Pingol, with whom he had privity insofar as the second mortgage of property is Entry No. 6537/T-RT-67970(253279) MORTGAGE In favor of Yolanda Valdez Villar m/to Jaime concerned. Villar to guarantee a principal obligation in the sum of P2,200,000- mortgagees consent necessary in case of subsequent encumbrance or alienation of the property; Other conditions set forth in Doc. On May 23, 2000, the RTC issued a Pre-Trial Order18 wherein the parties agreed on the following No. 97, Book No. VI, Page No. 20 of the Not. Pub. of Diana P. Magpantay facts and issue: Date of Instrument: 7-6-93 Date of Inscription: 7-7-93 SECOND REAL ESTATE MORTGAGE STIPULATIONS OF FACTS/ADMISSIONS The following are admitted:

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1. the defendant admits the second mortgage annotated at the back of TCT No. RT67970 of Lourdes V. Galas with the qualification that the existence of said mortgage was discovered only in 1996 after the sale; 2. the defendant admits the existence of the annotation of the second mortgage at the back of the title despite the transfer of the title in the name of the defendant; 3. the plaintiff admits that defendant Yolanda Valdez Villar is the first mortgagee; 4. the plaintiff admits that the first mortgage was annotated at the back of the title of the mortgagor Lourdes V. Galas; and 5. the plaintiff admits that by virtue of the deed of sale the title of the property was transferred from the previous owner in favor of defendant Yolanda Valdez Villar. xxxx ISSUE Whether or not the plaintiff, at this point in time, could judicially foreclose the property in question. On June 8, 2000, upon Garcias manifestation, in open court, of his intention to file a Motion for Summary Judgment,19 the RTC issued an Order20 directing the parties to simultaneously file their respective memoranda within 20 days. On June 26, 2000, Garcia filed a Motion for Summary Judgment with Affidavit of Merit21 on the grounds that there was no genuine issue as to any of the material facts of the case and that he was entitled to a judgment as a matter of law.

The RTC declared that the direct sale of the subject property to Villar, the first mortgagee, could not operate to deprive Garcia of his right as a second mortgagee. The RTC said that upon Galass failure to pay her obligation, Villar should have foreclosed the subject property pursuant to Act No. 3135 as amended, to provide junior mortgagees like Garcia, the opportunity to satisfy their claims from the residue, if any, of the foreclosure sale proceeds. This, the RTC added, would have resulted in the extinguishment of the mortgages.27 The RTC held that the second mortgage constituted in Garcias favor had not been discharged, and that Villar, as the new registered owner of the subject property with a subsisting mortgage, was liable for it.28 Villar appealed29 this Decision to the Court of Appeals based on the arguments that Garcia had no valid cause of action against her; that he was in bad faith when he entered into a contract of mortgage with Galas, in light of the restriction imposed by the first mortgage; and that Garcia, as the one who gave the occasion for the commission of fraud, should suffer. Villar further asseverated that the second mortgage is a void and inexistent contract considering that its cause or object is contrary to law, moral, good customs, and public order or public policy, insofar as she was concerned.30 Garcia, in his Memorandum,31 reiterated his position that his equity of redemption remained "unforeclosed" since Villar did not institute foreclosure proceedings. Garcia added that "the mortgage, until discharged, follows the property to whomever it may be transferred no matter how many times over it changes hands as long as the annotation is carried over."32 The Court of Appeals reversed the RTC in a Decision dated February 27, 2003, to wit: WHEREFORE, the decision appealed from is REVERSED and another one entered DISMISSING the complaint for judicial foreclosure of real estate mortgage with damages. 33

The Court of Appeals declared that Galas was free to mortgage the subject property even without Villars consent as the restriction that the mortgagees consent was necessary in case of a On June 28, 2000, Garcia filed his Memorandum 22 in support of his Motion for Summary Judgment subsequent encumbrance was absent in the Deed of Real Estate Mortgage. In the same vein, the and in compliance with the RTCs June 8, 2000 Order. Garcia alleged that his equity of redemption Court of Appeals said that the sale of the subject property to Villar was valid as it found nothing in had not yet been claimed since Villar did not foreclose the mortgaged property to satisfy her claim. the records that would show that Galas violated the Deed of Real Estate Mortgage prior to the sale.34 On August 13, 2000, Villar filed an Urgent Ex-Parte Motion for Extension of Time to File Her Memorandum.23 This, however, was denied24 by the RTC in view of Garcias Opposition.25 On May 27, 2002, the RTC rendered its Decision, the dispositive portion of which reads: WHEREFORE, the foregoing premises considered, judgment is hereby rendered in favor of the plaintiff Pablo P. Garcia and against the defendant Yolanda V. Villar, who is ordered to pay to the former within a period of not less than ninety (90) days nor more than one hundred twenty (120) days from entry of judgment, the sum ofP1,800,000.00 plus legal interest from October 27, 1999 and upon failure of the defendant to pay the said amount within the prescribed period, the property subject matter of the 2nd Real Estate Mortgage dated October 10, 1994 shall, upon motion of the plaintiff, be sold at public auction in the manner and under the provisions of Rules 39 and 68 of the 1997 Revised Rules of Civil Procedure and other regulations governing sale of real estate under execution in order to satisfy the judgment in this case. The defendant is further ordered to pay costs.26 In dismissing the complaint for judicial foreclosure of real estate mortgage with damages, the Court of Appeals held that Garcia had no cause of action against Villar "in the absence of evidence showing that the second mortgage executed in his favor by Lourdes V. Galas [had] been violated and that he [had] made a demand on the latter for the payment of the obligation secured by said mortgage prior to the institution of his complaint against Villar."35 On March 20, 2003, Garcia filed a Motion for Reconsideration36 on the ground that the Court of Appeals failed to resolve the main issue of the case, which was whether or not Garcia, as the second mortgagee, could still foreclose the mortgage after the subject property had been sold by Galas, the mortgage debtor, to Villar, the mortgage creditor. This motion was denied for lack of merit by the Court of Appeals in its July 2, 2003 Resolution.

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Garcia is now before this Court, with the same arguments he posited before the lower courts. In his Memorandum,37 he added that the Deed of Real Estate Mortgage contained a stipulation, which is violative of the prohibition on pactum commissorium. Issues

Garcia claims that the stipulation appointing Villar, the mortgagee, as the mortgagors attorney-infact, to sell the property in case of default in the payment of the loan, is in violation of the prohibition on pactum commissorium, as stated under Article 2088 of the Civil Code, viz: Art. 2088. The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void.

The crux of the controversy before us boils down to the propriety of Garcias demand upon Villar to either pay Galass debt of P1,800,000.00, or to judicially foreclose the subject property to satisfy The power of attorney provision in the Deed of Real Estate Mortgage reads: the aforesaid debt. This Court will, however, address the following issues in seriatim: 1. Whether or not the second mortgage to Garcia was valid; 2. Whether or not the sale of the subject property to Villar was valid; 3. Whether or not the sale of the subject property to Villar was in violation of the prohibition on pactum commissorium; 4. Whether or not Garcias action for foreclosure of mortgage on the subject property can prosper. Discussion Validity of second mortgage to Garcia and sale of subject property to Villar At the onset, this Court would like to address the validity of the second mortgage to Garcia and the sale of the subject property to Villar. We agree with the Court of Appeals that both are valid under the terms and conditions of the Deed of Real Estate Mortgage executed by Galas and Villar. While it is true that the annotation of the first mortgage to Villar on Galass TCT contained a restriction on further encumbrances without the mortgagees prior consent, this restriction was nowhere to be found in the Deed of Real Estate Mortgage. As this Deed became the basis for the annotation on Galass title, its terms and conditions take precedence over the standard, stamped annotation placed on her title. If it were the intention of the parties to impose such restriction, they would have and should have stipulated such in the Deed of Real Estate Mortgage itself. Neither did this Deed proscribe the sale or alienation of the subject property during the life of the mortgages. Garcias insistence that Villar should have judicially or extrajudicially foreclosed the mortgage to satisfy Galass debt is misplaced. The Deed of Real Estate Mortgage merely provided for the options Villar may undertake in case Galas or Pingol fail to pay their loan. Nowhere was it stated in the Deed that Galas could not opt to sell the subject property to Villar, or to any other person. Such stipulation would have been void anyway, as it is not allowed under Article 2130 of the Civil Code, to wit: Art. 2130. A stipulation forbidding the owner from alienating the immovable mortgaged shall be void. Prohibition on pactum commissorium 5. Power of Attorney of MORTGAGEE. Effective upon the breach of any condition of this Mortgage, and in addition to the remedies herein stipulated, the MORTGAGEE is likewise appointed attorney-in-fact of the MORTGAGOR with full power and authority to take actual possession of the mortgaged properties, to sell, lease any of the mortgaged properties, to collect rents, to execute deeds of sale, lease, or agreement that may be deemed convenient, to make repairs or improvements on the mortgaged properties and to pay the same, and perform any other act which the MORTGAGEE may deem convenient for the proper administration of the mortgaged properties. The payment of any expenses advanced by the MORTGAGEE in connection with the purpose indicated herein is also secured by this Mortgage. Any amount received from the sale, disposal or administration abovementioned maybe applied by assessments and other incidental expenses and obligations and to the payment of original indebtedness including interest and penalties thereon. The power herein granted shall not be revoked during the life of this Mortgage and all acts which may be executed by the MORTGAGEE by virtue of said power are hereby ratified.38 The following are the elements of pactum commissorium: (1) There should be a property mortgaged by way of security for the payment of the principal obligation; and (2) There should be a stipulation for automatic appropriation by the creditor of the thing mortgaged in case of non-payment of the principal obligation within the stipulated period.39 Villars purchase of the subject property did not violate the prohibition on pactum commissorium. The power of attorney provision above did not provide that the ownership over the subject property would automatically pass to Villar upon Galass failure to pay the loan on time. What it granted was the mere appointment of Villar as attorney-in-fact, with authority to sell or otherwise dispose of the subject property, and to apply the proceeds to the payment of the loan. 40 This provision is customary in mortgage contracts, and is in conformity with Article 2087 of the Civil Code, which reads: Art. 2087. It is also of the essence of these contracts that when the principal obligation becomes due, the things in which the pledge or mortgage consists may be alienated for the payment to the creditor. Galass decision to eventually sell the subject property to Villar for an additional P1,500,000.00 was well within the scope of her rights as the owner of the subject property. The subject property was transferred to Villar by virtue of another and separate contract, which is the Deed of Sale. Garcia never alleged that the transfer of the subject property to Villar was automatic upon Galass failure to discharge her debt, or that the sale was simulated to cover up such automatic transfer.

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Propriety of Garcias action for foreclosure of mortgage The real nature of a mortgage is described in Article 2126 of the Civil Code, to wit: Art. 2126. The mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted. Simply put, a mortgage is a real right, which follows the property, even after subsequent transfers by the mortgagor.1wphi1 "A registered mortgage lien is considered inseparable from the property inasmuch as it is a right in rem."41 The sale or transfer of the mortgaged property cannot affect or release the mortgage; thus the purchaser or transferee is necessarily bound to acknowledge and respect the encumbrance. 42 In fact, under Article 2129 of the Civil Code, the mortgage on the property may still be foreclosed despite the transfer, viz:

might abandon the property mortgaged, and in that case it is considered to be in the possession of the debtor. (Art. 136 of the same law.) This clearly shows that the spirit of the Civil Code is to let the obligation of the debtor to pay the debt stand although the property mortgaged to secure the payment of said debt may have been transferred to a third person. While the Mortgage Law of 1893 eliminated these provisions, it contained nothing indicating any change in the spirit of the law in this respect. Article 129 of this law, which provides the substitution of the debtor by the third person in possession of the property, for the purposes of the giving of notice, does not show this change and has reference to a case where the action is directed only against the property burdened with the mortgage. (Art. 168 of the Regulation.)47 This pronouncement was reiterated in Rodriguez v. Reyes48 wherein this Court, even before quoting the same above portion in E.C. McCullough & Co. v. Veloso and Serna, held:

We find the stand of petitioners-appellants to be unmeritorious and untenable. The maxim "caveat emptor" applies only to execution sales, and this was not one such. The mere fact that the purchaser of an immovable has notice that the acquired realty is encumbered with a mortgage does not render him liable for the payment of the debt guaranteed by the mortgage, in the absence of stipulation or condition that he is to assume payment of the mortgage debt. The reason is plain: the mortgage is merely an encumbrance on the property, entitling the mortgagee to have the property foreclosed, i.e., sold, in case the principal obligor does not pay the mortgage debt, and Art. 2129. The creditor may claim from a third person in possession of the mortgaged property, the apply the proceeds of the sale to the satisfaction of his credit. Mortgage is merely an accessory payment of the part of the credit secured by the property which said third person possesses, in undertaking for the convenience and security of the mortgage creditor, and exists independently of terms and with the formalities which the law establishes. the obligation to pay the debt secured by it. The mortgagee, if he is so minded, can waive the mortgage security and proceed to collect the principal debt by personal action against the original 49 While we agree with Garcia that since the second mortgage, of which he is the mortgagee, has not mortgagor. yet been discharged, we find that said mortgage subsists and is still enforceable. However, Villar, in buying the subject property with notice that it was mortgaged, only undertook to pay such In view of the foregoing, Garcia has no cause of action against Villar in the absence of evidence to mortgage or allow the subject property to be sold upon failure of the mortgage creditor to obtain show that the second mortgage executed in favor of Garcia has been violated by his debtors, payment from the principal debtor once the debt matures. Villar did not obligate herself to replace Galas and Pingol, i.e., specifically that Garcia has made a demand on said debtors for the the debtor in the principal obligation, and could not do so in law without the creditors payment of the obligation secured by the second mortgage and they have failed to pay. 43 consent. Article 1293 of the Civil Code provides: Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in articles 1236 and 1237. Therefore, the obligation to pay the mortgage indebtedness remains with the original debtors Galas and Pingol.44The case of E.C. McCullough & Co. v. Veloso and Serna45 is square on this point: The effects of a transfer of a mortgaged property to a third person are well determined by the Civil Code.1wphi1According to article 187946 of this Code, the creditor may demand of the third person in possession of the property mortgaged payment of such part of the debt, as is secured by the property in his possession, in the manner and form established by the law. The Mortgage Law in force at the promulgation of the Civil Code and referred to in the latter, provided, among other things, that the debtor should not pay the debt upon its maturity after judicial or notarial demand, for payment has been made by the creditor upon him. (Art. 135 of the Mortgage Law of the Philippines of 1889.) According to this, the obligation of the new possessor to pay the debt originated only from the right of the creditor to demand payment of him, it being necessary that a demand for payment should have previously been made upon the debtor and the latter should have failed to pay. And even if these requirements were complied with, still the third possessor WHEREFORE, this Court hereby AFFIRMS the February 27, 2003 Decision and March 8, 2003 Resolution of the Court of Appeals in CA-G.R. SP No. 72714. SO ORDERED. FIRST DIVISION G.R. No. 180614 August 29, 2012

LEONARDO NOTARTE, GUILLERMO NOTARTE, REGALADO NOTARTE AND HEIRS OF FELIPE NOTARTE,Petitioners, vs. GODOFREDO NOTARTE, Respondent. DECISION VILLARAMA, JR., J.:

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Before us is a petition for review on certiorari filed under Rule 45 which seeks to set aside the Decision1 dated August 10, 2007 and Resolution2 dated November 14, 2007 of the Court of Appeals (CA) in CA-G .R. SP No. 92591 and to reinstate the Decision3 dated September 1, 2004 of the Municipal Trial Court (MTC) of Bani, Pangasinan dismissing respondent's complaint for recovery of possession and damages. The CA affirmed the Decision4 dated March 21, 2005 of the Regional Trial Court (RTC) of Alaminos City, Pangasinan, Branch 54 reversing the MTC judgment. As culled from the records, the facts of this case follow: The properties subject of controversy form part of a 263,233-square meter land situated in Barrio Quinaoayanan, Municipality of Bani, Province of Pangasinan, and covered by Original Certificate of Title (OCT) No. 48098 issued on November 6, 1931. The original registered owners with 1/7 share each are Vicenta Notarte, the wife of Hilario Hortaleza; Paulino Notarte, married to Maria Camba; Juan Notarte, married to Gregoria Castillo; Bernardo Notarte, married to Dorotea Orasa; Cirila Notarte, the wife of Luis Castelo; Fausto Notarte, married to Martina Natino; and spouses Ricardo Namoca and Eusebia Ortaleza. Vicenta, Paulino, Juan, Bernardo, Cirila and Fausto, all surnamed Notarte, are brothers and sisters, while Ricardo Namoca is their cousin. 5 The parties in this case are close relatives. Petitioner Felipe Notarte is the uncle of respondent Godofredo Notarte whose father, Alejandro Notarte, is the brother of Felipe. Felipe and Alejandro are the sons of Juan Notarte. Petitioner Guillermo Notarte is the brother of Godofredo while petitioner Leonardo Notarte is their cousin, being the son of Felipe. Petitioner Regalado Notarte is the son of Leonardo.6 On October 15, 1984, Godofredo bought from Patrocenia Nebril-Gamboa a parcel of land, as evidenced by the Deed of Absolute Sale7 she executed in his favor and describing the property sold as follows: A parcel of land, situated in Quinaoayanan, Bani, Pangasinan, consisting of pasture and unirrigated riceland, containing an area of 29,482 sq.m., more or less. Bounded on the N. by Leonardo Notarte; on the NE. by Nenita Notarte; on the SE. by Jose Nano; on the S. by Guillermo Notarte; and on the W. by Leonardo Notarte, which limits are indicated by fences on all sides. Declared under Tax Declaration No. 255 and 256 still in the name of Emiliano Gamboa who donated it to Procopio Gamboa and Desiderio Gamboa and in turn Desiderio and Procopio sold it to Antonio Gamboa and Patrocenia Nebril who has adjudicated the entire parcel of land unto herself, the herein vendor; assessed in toto at P 1,120.00. This is part of the land covered by Original Certificate of Title No. 48098, Pangasinan. (Emphases supplied.)

In his Second Amended Complaint, Godofredo described the property he acquired from Patrocenia, as follows: A parcel of unirrigated riceland and pasture land situated in Quinaoayanan, Bani, Pangasinan, containing an area of 27,604.714 sq.m., more or less. Bounded on the North and West by Felipe Notarte; on the East by Jose Nano; and on the South by Guillermo Notarte and Leonardo Notarte. Assessed at P 6,900 under tax declaration No. 8341 in the name of the plaintiff. This was part of Bernardo Notartes 1/7 share of the land covered by Original Certificate of Title No. 48098.10(Emphases supplied.) Godofredo claimed that his land was acquired by Patrocenia from Procopio Gamboa and Desiderio Gamboa who acquired the same from Emiliano Gamboa who in turn acquired it from Bernardo Notartein separate transactions and conveyances in writing. He likewise averred that the heirs of Bernardo have executed pertinent documents renouncing their interest, action and participation over the subject land in favor of Godofredo and/or his predecessors-in-interest. Godofredo alleged that the above-described land used to be intact but the petitioners, taking advantage of his absence, took possession of portions of his land thereby reducing it to barely 13,000 sq.m., with Guillermo occupying 6,333 sq.m. more or less on the southern side, while Leonardo and Regalado jointly encroached over 8,272 sq.m. more or less on the western side. Godofredo claimed that all demands upon the petitioners to return the aforesaid portions and conciliations before the Barangay authorities failed. In their Answer with Counterclaim,11 petitioners denied having encroached on respondents land, contending that respondent instituted this complaint to increase the actual size of his land at the expense of the adjoining owners. Petitioners asserted that they have been in actual, notorious, public and exclusive possession of their respective parcels for a very long time even before respondent bought his property from Patrocenia Gamboa. They claimed that their common ascendant, Felipe, owned 10 hectares of the property covered by OCT No. 48098 which he acquired by purchase as early as 1951 and the latest in 1967. The 37,604-sq. m. portion of Felipes land being occupied by petitioners, which area adjoins respondents property on the west, was acquired by Felipe from James Turner by virtue of a Quitclaim Deed dated April 2, 1951. Petitioners also alleged that there are other co-owners of the whole undivided land covered by OCT No. 48098who are indispensable for the final and complete determination of this case.

In his Reply,12 respondent pointed out that he had purchased a portion with a definite area of 27,604.714 sq.m. which is within the 1/7 share of Bernardo Notarte. Petitioners knew about this because one of them (Leonardo) bought only one hectare of the said share. Being a registered land, their possession of the encroached portion they do not own is illegal, no matter how long. As On the same date, Godofredo filed his Affidavit of Adverse Claim in the Registry of Deeds to to the property of Felipe, respondent argued that its alleged area is immaterial even if it were true protect his rights on the land he acquired from Patrocenia "pending the completion of all proper that he acquired 10 hectares because the fact is that he had not acquired any portion of documents for the segregation of separate portions of the whole parcel of land under aforesaid title Bernardos 1/7 share; why then did Felipe take possession of a western portion of Bernardos 1/7 OCT No. 48098." Thereafter, Godofredo declared the land in his name under Tax Declaration No. share which belongs to respondent? Respondent also claimed that what Felipe acquired from 8 982 for the year 1985, indicating its area as 29,482 sq.m. Turner was the 1/7 share of Juan Notarte, which is situated north of Bernardos 1/7 share, one hectare of which was bought by Leonardo. Thus, petitioners are occupying not only the 37,604 sq.m. acquired from Turner but also the western portion of respondents land measuring almost Godofredo initially filed in the MTC a complaint for "Partition, Subdivision Survey and Recovery of one hectare north of and adjacent to Leonardos one hectare. Respondent further averred that the Possession With Damages" against Felipe and Guillermo (Civil Case No. 36). An Amended Complaint for "Recovery of Possession With Damages" was admitted by the said court on January land covered by OCT No. 48098 is no longer undivided as it had been physically segregated into the designated shares of the registered owners, and various transfer certificates of title have been 10, 1997, whereby the prayer for subdivision survey of the adjoining lots respectively occupied by issued. Since Bernardos 1/7 share was segregated in metes and bounds, the controversy lies in the parties was abandoned. The Second Amended Complaint which included as additional 9 the boundaries of said share minus the one hectare of Leonardo. Since petitioners are illegally defendants Leonardo and Regalado, was likewise admitted on September 16, 1997. possessing portions of that share which respondent as present owner wants to recover, there are

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no indispensable parties other than those who have taken possession of the encroached portion. Respondent added that a survey to determine the extent of his land based on the documents he would present will certainly solve the case with finality. Respondent filed a motion for the conduct of survey on the disputed lands "to correct and remove overlapping of boundaries of the parties adjacent lots" which was opposed by the petitioners. The MTC denied the motion stating that this would pre-empt the issues under contention because of the ongoing trial to determine the boundaries of the subject properties which are in dispute. 13 At the trial, respondent testified that he had known the land covered by OCT No. 48098 since 1951. The shares of Juan and Paulino Notarte were foreclosed by Turner, and were later redeemed by Felipe and Manuel Urbano, respectively. Manuel Urbano also bought the share of Fausto Notarte. The shares of Paulino and Fausto were already transferred in the name of Urbano (TCT Nos. 4927 and 4928). Cornelio Gamboa acquired a portion of the share of Ricardo Namoca while another portion thereof went to Godofredo Namoca. Vicenta Notartes share went to Juan, Felipe and Virgilio Tugas. The present owners of the portion representing Cirila Notartes share are petitioner Guillermo and Lopercio Orilla. As to Bernardo Notartes share, respondent testified that one hectare was sold to petitioner Leonardo while the remaining 27,604 sq.m. was bought by him. Respondent likewise presented a Deed of Extrajudicial Partition with Quitclaim and Confirmation of Sale dated April 28, 1995 executed in his favor by the heirs of Bernardo. Respondent presented other documents evidencing the transfer from the original registered owner Bernardo to him as the present owner, and thereafter proceeded to draw a sketch on yellow paper and described to the court the limits of his land, including the areas encroached by the respondents. On May 8, 1985, he had the land surveyed but Felipe and Guillermo did not agree. Respondent stated that Guillermo encroached 6,233 sq.m.on the southern portion of his land, a riceland which produces 15 sacks of palay a year valued at P5,000.00 while Leonardo and Regalado are occupying 8,272 sq. m. of forest land on the western side of his land which are planted with madre cacao and tamarind trees that yields P 3,000 harvest per year since 1985.14 On cross-examination, respondent admitted that the signatories to the Deed of Extrajudicial Partition With Quitclaim and Confirmation of Sale were some of the alleged heirs of Bernardo, and that OCT No. 48098 is still existing. He saw the land for the first time in 1951 when he was 15 years old. The whole land had been partitioned among the original owners even prior to 1951;their respective shares have been pointed to them by their father, Eriberto Notarte. The share of Vicenta on the west is presently owned by Felipe and Nely Mendoza; Paulinos share on the east was acquired by Manuel Urbano; however, as to the portion now owned by Jose Doctor, he does not know who was the original owner. It was in 1985 that he found out about the encroachment on his land by Guillermo and Leonardo. At the time he bought the land in October 1984, it was Patrocenia Gamboa who was in possession. When he occupied the land in 1985, there was no fence yet but upon returning from Pampanga, the encroached areas were already fenced. Respondent affirmed that he had resided in Pampanga for more than 20 years from 1961 to 1985. In 1984, his brother Guillermo convinced him to buy the land that adjoins the riceland occupied by him (Guillermo) as a tenant of Patrocenia. On the other hand, Leonardos house was built on his fathers land and it is Leonardos son Regalado who is residing on the encroached portion. Respondent admitted that when he bought the land from Patrocenia, she did not point to him the boundaries of his land and just handed him the document; he was the one who tried to locate the boundaries of the land.15 He knew that the whole property covered by OCT No. 48098 had already been partitioned because his grandparents have been in possession of their share and they sold it, and because there were dispositions already made. The land under his possession pertains to the share of Bernardo. He affirmed that the well is situated about 100 meters west from the house of Guillermo and that one hectare of Bernardos share is already owned by Leonardo. However, Leonardo encroached on his land, in excess of the said one hectare by removing the fence.

Leonardo through his son Regalado is also in possession of the land of Felipe on the western side.16 Respondent presented as witness Leila P. Pamo, an employee of the Municipal Assessors Office. She testified on the status of the property covered by OCT No. 48098, verified as Lot 1 PSU25967, Cad. Lot 6035. This property had already been subdivided as per the Certification issued by the Municipal Assessor listing several tax declarations obtained by the present owners. She identified the said certification as well as 15 tax declarations covering various parcels of the land under OCT No. 48098 in the names of various individuals. However, she admitted on crossexamination that she did not secure a subdivision plan of Lot No. 6035 as there was none on file with their office and neither did she verify if there was such document on file with the Registry of Deeds.17 Petitioners first witness was Patrocenia NebrilGamboa who testified that Guillermo is the son of her cousin, and has been working as her tenant since 1968. She claimed that she has already donated to Guillermo the land he had been farming and presented a Deed of Donation dated February 21, 1997. This 450-sq. m. land she donated to Guillermo lies on the western side near the property of Felipe. Previously, she donated two parcels to Guillermo in 1977 and 1983. She then clarified that the transaction in 1983 was a Deed of Absolute Sale. These two parcels (1 or 2 hectares) which she conveyed to Guillermo adjoin each other and are separated by a fence from that parcel she sold to Godofredo; the boundaries between these properties are also marked by coconuts (east) and bamboos (west). There is a well that was dug up by Guillermo who uses it as a source of water; Guillermos house was erected about five meters away from this well. She described the metes and bounds of her property as follows: North - Felipe, West - Felipe, East pathway, South - she forgot. The western and northern sides of her land that adjoins the property of Felipe are ricelands with bamboos as boundary on the west. She also stated that there are many who erected their houses on the property and their respective areas were just pointed to them. Her own parcel still has no separate title from the mother title (OCT No. 48098). However, she maintained that there is no clear partition. As to the precise area, it may be that she had occupied less than what is stated in her documents but she did not complain; they cannot resolve the matter because of several owners and she had no time.18 On cross-examination, Patrocenia confirmed that in 1984 she sold a parcel of land to Godofredo which is the same land she bought from Procopio and Desiderio Gamboa. She likewiseconfirmed her signature in the Deed of Absolute Sale in favor of Godofredo but not as to the area stated. She remembered having sold her land separately to Godofredo and Guillermo. The land she sold to Guillermo was acquired by her from Bienvenido Cortez who in turn bought the same from Cirila Notarte. As to the land she sold to Godofredo, it came from Bernardo Notarte. When Guillermo became her tenant on her land which she subsequently donated to him, he constructed his house thereon (1968), which house still remains in the same place.19 The second witness for petitioners was Epefanio C. Camba, Jr., Municipal Assessor of Bani, Pangasinan. When presented with the Certification dated October 1, 1999 regarding OCT No. 48098, he said he could not recall having issued the same although it may have indeed been issued by him. He does not know who are the present owners of the land covered by said title, nor if the same was already subdivided. The basis of the aforesaid certification are the tax declarations issued but he could not remember if there was proof of subdivision or partition on file with their office. He explained that when a property is subdivided, it means there is already a tax declaration on file but without reference to a subdivision plan or instrument of partition. 20 Petitioner Leonardo Notarte testified that he knows the boundaries of the land bought by Godofredo from Patrocenia which adjoins his own property. The boundaries of Godofredos land

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are: North - Leonardo, East - Jose Nano, South - Guillermo, and West - Leonardo. Leonardo claimed that the land west of Godofredos land was given to him by his parents as "sab -ong"; he also owns another lot southwest which he bought from Bernardo Notarte. He described the boundaries of the lot sold to him by Bernardo as follows: North Felipe, East Guillermo, South Godofredo Namoca, and West Narcisa Oblanca (now Mely Mendoza). Said land is covered by a tax declaration in his name. As to his property adjoining that of Godofredo Notarte, Leonardo said it is bounded on the west by "bayog," fence and bamboos. This property was acquired by his father from James Turner as evidenced by a Deed of Quitclaim executed by Turner dated April 2, 1951. His father acquired the southwestern portion of the 2/7 parcel from Turner while the northern portion went to Celestino Ortaleza. He maintained that the original land covered by OCT No. 48098 was never partitioned; their respective areas of possession were just pointed to them. There was no extrajudicial or judicial partitionexecuted. On the land of Guillermo, Leonardo testified that he knows it was bought by Guillermo from Patrocenia but he does not know how Guillermo was able to buy it. The boundary of the lands of Guillermo and Godofredo consists of bamboo, coconut and star apple trees. Leonardo further claimed that his son Regalado had a dispute with Godofredos wife a long time ago about the cutting of the fence. 21 On cross-examination, Leonardo said that after buying one hectare from Bernardo in 1964, he immediately took possession and declared it in his name. As to the other land he had acquired from his father which is north of Godofredos property, he admitted that they have not yet executed a document. Four years after acquiring the parcel of land from James Turner, his father Felipe and Celestino divided the same between themselves. His father declared it for tax purposes before but he cannot locate it. The portion that went to Celestino is now occupied by Manuel Urbano. Leonardo further claimed that Guillermo twice bought land from Patrocenia; the sale to Godofredo of his parcel came first. The land acquired from Cirila Notarte was exclusively possessed by Patrocenia. He admitted that Bernardo originally owned the parcel of land that was eventually bought by Godofredo, although such portion presently owned by Godofredo used to be occupied by Feliciano Gamboa to whom Bernardo mortgaged the same. However, Leonardo claimed he does not know who else acquired the remaining portion of Bernardos land aside from the 10,000 sq.m. he bought from Bernardo whose lots are not in one place. He insisted that the 1/7 share of Juan Notarte which was acquired by his father Felipe is not yet partitioned. While admitting that he was in possession thereof and already given to him by his father, Leonardo said he does not know the exact area occupied by him, only the specific location because his house was constructed on the western part. As to the boundaries of Godofredos property surrounded by a fence, Leonardo described it as follows: North - Felipe, East - Nano, South - Guillermo and West - Felipe.22 Petitioner Guillermo Notarte testified that her aunt Patrocenia was his former landlord. Patrocenia donated one hectare of her land to him as his homelot before he accepted the tenancy in 1968. He identified his signature in the Deed of Confirmation of Donation in his favor dated February 21, 1997. He also bought from Patrocenia more than one hectare of land in 1977, and another parcel in 1983. When Godofredo returned from Pampanga looking for land to buy, he told Godofredo to buy the remaining part of the land being tenanted by him (Guillemo), which is more than one and a half hectares 3 meters from his land on the north. He and Godofredo went around the land before the latter bought it. The boundaries of the land purchased by Godofredo are as follows: North Felipe, West - Felipe, South - Guillermo, and East - Nano. Their lands are separated by bamboo and "bayog" (west), fence (made by their "ancestors"), madre cacao (in-between), coconut (east), star apple tree and dike (north). He further claimed that he does not know the actual area of the property bought by Godofredo from Patrocenia; its western side adjoining Felipes property is a

riceland. He insisted that the whole 263,000 was never partitioned; his neighbors just told him about the boundaries of his land. He believes that Godofredo wanted to get their land.23 On cross-examination, Guillermo said that of the two parcels owned by Patrocenia, the one she bought from Emiliano Gamboa was acquired first. These two parcels are adjoined on the north and south. The parcel on the north was the one given to him in 1968 where he constructed his house, dug the well and planted coconut and star apple trees. Almost a year after, Patrocenia again instituted him as tenant on her second parcel of land. He does not know from whom Patrocenia acquired the first parcel, but he knows the second parcel to have been acquired by her from Cortez. The first lot he acquired from Patrocenia is covered by a tax declaration stating the area as 4,227 sq.m. while the second lot he bought has an area of 5,773 sq.m. However, he does not know the actual area of the land he is presently occupying, and its metes and bounds. 24 The last witness was petitioner Regalado Notarte who testified that the land he is occupying belongs to his grandfather Felipe which lies northwest of Godofredos land. Before Godofredo acquired the said land, it was Guillermo who was cultivating the same. He described the then visible boundary limits of the property as follows: North and South - dike, bamboo, "bayog," and madre cacao; West - fence made of bamboo, madre cacao and aludig; and East - pathway for carabao carts. He constructed his house in 1990 on this land owned by Felipe and nobody then prevented him from doing so.25 On cross-examination, Regalado admitted that it was his father Leonardo who told him to build his house on the land which he said is owned by Felipe.26 Respondent made the following formal offer of evidence: Exhibit "A" - TCT No. 4927 in the name of Manuel C. Urbano II covering a segregated portion of 33,737 sq.m. of the parcel of land under OCT No. 48098. Exhibit "B" - TCT No. 4928 in the name of Manuel C. UrbanoII covering a segregated portion of 30,650 sq.m. of the parcel of land under OCT No. 48098. Exhibit "C" - TCT No. 3517 in the name of Cornelio Gamboa covering a segregated portion of 15,684 sq.m. of the parcel of land under OCT No. 48098. Exhibit "D" - Escritura de Compra-venta, dated July 1, 1929 executed by Bernardo Notarte in favor of Emiliano Gamboa covering the land that was ultimately sold to Godofredo Notarte. Exhibit "E" - Escritura de Donacion Esponsalicia, dated January 21, 1948 executed by Emiliano Gamboa in favor of his son Procopio Gamboa covering 14,741 sq.m. of the land under Exhibit "D." Exhibit "F" - Deed of Donation Propter Nuptias dated April 17, 1957 executed by Emiliano Gamboa in favor of his son Desiderio Gamboa covering 13, 586 sq.m. of the land under Exhibit "D". Exhibit "G" - Deed of Sale of Realty dated April 2, 1963 executed by Desiderio Gamboa and Procopio Gamboa in favor of Antonio Gamboa, married to Patrocenia Nebril-Gamboa covering the lands under Exhibits "E" and "F." Exhibit "H" - Affidavit of Quitclaim dated April 30, 1973 executed by Primitivo Notarte, surviving child of Bernardo Notarte, in favor of Patrocenia Nebril, wife of Antonio Gamboa over the parcels of land covered by Exhibit "D".

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Exhibit "I" - Affidavit of Adjudication dated May 10, 1983 executed by Patrocenia N. Gamboa covering the land under Exhibit "G". Exhibit "J" - Affidavit of Adverse Claim dated March 10, 1983 executed by Patrocenia Nebril, then widow of Antonio Gamboa stating antecedent facts leading to their acquisition of Bernardo Notartes land under OCT No. 48098 of which she has an adverse claim, and registered it on March 23, 1983. Exhibit "K" - Deed of Absolute Sale dated October 15, 1984 executed by Patrocenia N. Gamboa in favor of the plaintiff Godofredo Notarte covering the land that is the subject of Exhibits "D" to "J." xxxx Exhibit "L" - Affidavit of Adverse Claim dated October 15, 1984 executed by Godofredo Notarte stating that he bought the portion of 29,483 sq.m. of the land under OCT No. 48098. The affidavit was registered on October 15, 1984. Exhibit "M" - Extrajudicial Settlement With Quitclaim and Confirmation of Sale dated April 28, 1995 executed by heirs of Bernardo Notarte whereby they confirmed the sale executed by Bernardo Notarte to Emiliano Gamboa, and so on and so forth up to the sale in favor of x x x Godofredo Notarte. Exhibit "N" - TD No. 18884, effective 2000 in the name of Godofredo Notarte covering the land he bought from Patrocenia Nebril. Exhibit "N-1" - TD No. 3449, effective 1952 in the name of Emiliano Gamboa covering the land he bought from Bernardo Notarte.(Exh. "D") Exhibit "N-2" - TD No. 98,effective 1985 in the name of Godofredo Notarte, x x x covering the same land under Exhibit "N". Exhibit "N-3" - TD No. 237, effective 1983 in the name of Emiliano Gamboa covering the land under Exh. N-1. Exhibit "N-4" - TD No. 255, effective 1980 in the name of Emiliano Gamboa covering the same land under Exh. N-3. Exhibit "N-5" - TD No. 2981, effective 1974 in the name of Emiliano Gamboa covering the same land under Exh. N-4. Exhibit "N-6" - TD No. 3953, effective 1966 in the name of Emiliano Gamboa covering the same land under Exh. N-5. Exhibit "O" - Co-owners Duplicate copy of OCT No. 48098 issued to Godofredo Notarte. Exhibit"P" - Sketch made by Godofredo Notarte on the witness stand showing his land.

Exhibit "P-1"to "P-6"- The visible limits of Godofredo Notartes land in all the cardinal directions. Exhibit "Q" - The Barangay Certification to file action. x x x Exhibit "R" - The encircled portion in Exhibit "1" for the defendants, the land claimed by Godofredo Notarte. Exhibit "R-1" - The blue shaded portion north of Leonardo Notarte which is the portion encroached by Felipe, Leonardo and Regalado. Exhibit "R-2" - The place marked "X" in Exh R-1 where the house of Regalado Notarte stands. Exhibit "R-3" - The blue shaded elongated portion which is encroached by Guillermo Notarte. Exhibit "R-4" - The dug well on the southern side of Godofredos land. It is within the portion encroached by Guillermo Notarte. Exhibit "R-5" - The stamps of dead madre cacao trees on the northern side of Godofredos land. Exhibit "R-6" - The live madre cacao trees also on the northern side of Godofredos land. Exhibit "R-7" - The trail on the western side of Godofredos land. Exhibits R and series are within Exhibit"1" of the defendants x x x. Exhibit "S" - The Certification issued by the Municipal Assessor of Bani, Pangasinan stating that Lot 1, Psu-25967 or Psd-4816 is identical to cadastral lot No. 6035 and the same had been subdivided into several lots for various lot owners. Exhibit "T" - TD No. 8181 in the name of Charles and Clark Mendoza covering a segregated portion of the land under OCT No. 48098. Exhibit "T-1" - TD No. 8347 in the name of Leonardo Notarte also covering a segregated portion. Exhibit "T-2" - Patrocenia G. Castillos TD No. 7928 likewise covering a segregated portion. Exhibit "T-3" - TD No. 8765 in the name of Manuel Urbano II covering another segregated portion. Exhibit "T-4" - TD No. 8764 in the name of Manuel Urbano covering another segregated portion. Exhibit "T-5" - TD No. 8354 in the name of Nenita Notarte covering another segregated portion. Exhibit "T-6" - TD No. 8254 in the name of Godofredo Namoca covering another segregated portion.

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Exhibit "T-7" - TD No. 8346in the name of Helardo Notarte covering another separate portion. Exhibit "T-8" - TD No. 8348 in the name of Leonardo Notarte covering another separate portion. Exhibit "T-9" - TD No. 8334 in the name of Fausto Notarte covering another separate portion. Exhibit "T-10" - TD No. 8335 in the name of Felipe Notarte covering a segregated portion. Exhibit "T-11" - Godofredo Notartes TD No. 8341 covering a segregated portion. Exhibit "T-12" - TD No. 8343 in the name of Guillermo Notarte covering another separate portion. Exhibit "T-13" - TD No. 8526 in the name of Lupercio Orilla covering another separated portion. Exhibit "T-14" - TD No. 8342 in the name of Guillermo Notarte covering another segregated portion.27 In its Order28 dated May 16, 2000, the MTC denied admission of the following documentary evidence and stating the reasons for its ruling: (1) Exhibits "A," "B," "C," "S," "T," "T-1" to "T-4," for lack of showing of any written formal partition entered into by the registered owners and because the memorandum of encumbrances of OCT No. 48098 does not show any previous partition to bind their transferees/assigns; (2) Exhibit "D" as there is no showing that the land subject matter thereof is the same land owned by Bernardo Notarte covered by OCT No. 48098; (3) Exhibit "E" being in Ilocano dialect and carries no translation; (4) Exhibit "F" for lack of showing that the land donated is part of the land bought from Bernardo Notarte; (5) Exhibit "G" in the absence of proof that the two lands were the same land earlier donated and subject matter of the case; (6) Exhibits "H," "I" and "J" for being hearsay, the affiants not having testified thereto; (7) Exhibit "K" there being no proof that the land conveyed to Godofredo emanated from Bernardo Notarte and then to Emiliano Gamboa; (8) Exhibit "M" for being hearsay, the extrajudicial settlement is more of a sworn statement; (9) Exhibits "N-1," "N-3" to "N-6," there being no clear showing that these were formally identified in court and covers the land in question; these are simply photocopies with no chance for comparison in the alleged original; (10) Exhibits "D" to "M" which were already denied admission. On September 1, 2004, the MTC rendered judgment dismissing the complaint. Citing its nonadmission of Exhibits "D," "E," "F," "G," "H," "I," "J," "K" and "M," the said court ruled that respondent has not proven his claim that he acquired 27,604.714 sq.m. from the 1/7 share of Bernardo Notarte. On the other hand, it found petitioners to have established their actual possession of their respective portions even long before respondent acquired his land. On appeal by respondent, the RTC reversed the MTC. The RTC found that from the evidence it is convincingly clear that respondent owns the 27,604 sq. m. described in his second amended complaint and identified his land with the statement of its metes and bounds and the visible limits thereof. Because there is overlapping of boundaries in this case, the RTC said that the area of the adjoining parcels gains significance. The fallo of the RTC Decision reads: WHEREFORE, the appealed decision of the court a quo is Set Aside, and this Honorable Court renders judgment, to wit:

1. ORDERING the defendant GUILLERMO NOTARTE to vacate and surrender the southern portion containing an area of 6,333 square meters of plaintiffs land and to pay actual damages of P 40,000.00; 2. ORDERING the defendants LEONARDO NOTARTE, REGALADO NOTARTE AND FELIPE NOTARTE to vacate and surrender EIGHT THOUSAND TWO HUNDRED SEVENTY TWO (8,272) square meters western portion of plaintiffs land and to pay jointly and severally actual damages of P 20,000.00; 3. ORDERING the defendants jointly and severally to pay the plaintiff attorneys fees and litigation expenses of P 10,000.00. IT IS SO ORDERED.29 Petitioners elevated the case to the CA which dismissed their appeal. The CA held that it was a palpable mistake on the part of the MTC to conclude that no partition had been made by the registered owners and their successors-in-interest, and on the basis of that conclusion denied admission of most of the material exhibits of respondent. The CA found that as early as 1951and even before the issuance of OCT No. 48098, the registered owners have effected an oral or informal partition of the big parcel of land, complete with the demarcation of its boundaries as pertaining to the respective owners thereof by visible boundary limits such as dike, "mojon," live trees and the like. Assessing the evidence on record, the CA made the following observations: The statement of facts as presented herein is mainly culled from the decision of the MTC. On the face of the said decision, respondent Godofredo testified clearly and graphically as to the location and physical description of the subject land, in relation to the big parcel of land covered by OCT No. 48098. The series of conveyances from the registered owner Bernardo Notarte up to Antonio and Patrocenia Gamboa were related by Godofredo in painstaking details, all supported by documentary evidence. The trial court however precipitately concluded that the land being described in the said series of conveyances is not clearly referred to as the subject land, despite the stipulation of the parties at the pre-trial that the lands being referred to by the parties in the present case all form part of the big parcel of land covered by OCT No. 48098. Certainly, by the said conclusion formed by the trial court, and thereby sweeping aside all the material exhibits of respondent, the latter stood no chance at all in proving his claim, notwithstanding the clarity of his testimony, as bolstered by his documentary evidence.30 Their motion for reconsideration having been denied by the CA, petitioners are now before us alleging grave error committed by said court in affirming the RTC which rendered judgment based on exhibits that were denied admission by the MTC. Petitioners reiterate that there was no legal formal partition of the whole parcel of land covered by OCT No. 48098. They cite several entries in the said title which will show that the transactions referred to therein pertain to undivided portions of the entire land. In particular, petitioners point out that Exhibit "M" (Deed of Extrajudicial Settlement With Quitclaim and Confirmation of Sale) cannot be used as basis for an adverse ruling against them as said document was correctly determined by the MTC as a mere sworn statement and hearsay evidence. Petitioners emphasize that the issue of whether the whole parcel of land covered by OCT No. 48098 has been legally partitioned is material to respondents claim that the portions of land allegedly encroached by petitioners belong to him. They argue that a partition must be a concerted

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act of all the heirs and not only individual acts of each of the co-heirs. Citing a portion of respondents appellants brief filed before the RTC, petitioners poi nt out that respondent stated the reason behind the execution of Exhibit "M" which is the fact that "the chain of documents covering the transactions beginning with Bernardo Notarte to Emiliano Gamboa, to Procopio Gamboa and Desiderio Gamboa, to Antonio Gamboa and to Godofredo Notarte do not clearly identify the land in question as part of the registered land under OCT No. 48098. x x x"31 The issues to be resolved are: (1) whether the MTC erred in not admitting most of the documentary exhibitsformally offered by the respondent as indicated in its May 16, 2000 Order; (2) whether the 263,000 sq. m. land covered by OCT No. 48098 had been partitioned by the registered owners; and (3) whether petitioners have encroached on respondents land. On the first issue,we agree with the CA that most of the documentary exhibits not admitted by the MTC are material to respondents claim. Evidence is admissible when it is relevant to the issue and is not excluded by the law or the rules32 or is competent.The exclusion of previous documents of transfer executed by Patrocenia Gamboas predecessors-in-interest, based merely on the MTCs impression that they do not clearly indicate it was the same parcel sold by her to respondent, was improper considering that the parties stipulated at the pre-trial that the lands involved in this controversy form part of the property covered by OCT No. 48098. It may be recalled that what respondent sought to establish is the previous ownership by Bernardo, one of the original registered owners, of the specific parcel (1/7 share in the property covered by OCT No. 48098) from which Patrocenia acquired a portion, as well as the actual area of such portion acquired by Patrocenia. The relevance of those documents evidencing this series of conveyances from Bernardo to Emiliano Gamboa, the latters donation to his sons Procopio and Desiderio Gamboa, the latters sale of the same lots to Antonio Gamboa, husband of Patrocenia who later adjudicated unto herself all properties left by her husband was thus plainly obvious. Besides, Patrocenia admitted while testifying on cross-examination, that the land she sold to respondent came from the share of Bernardo. Thus: Q - So there were series of transactions could you still remember, is that right? A - Yes, sir. Q - Now, but why you cannot remember anymore transactions regarding to the acquisition of a parcel of land by Godofredo Notarte? A - The land that was sold to Godofredo Notarte came from Bernardo Notarte, sir. Q - And you remember now, that Bernardo Notarte sold that land to Emeliano Gamboa? A - What I know is that, the land I sold to Godofredo came from Bernardo Notarte, sir.33 (Emphasis supplied.) The non-admission of copies of tax declarations in the name of Emiliano Gamboa was likewise erroneous because these were in factpresented and identified in court by respondent and his counsel during his direct testimony.34The MTC further said these tax declarations do not show that they cover the subject land, the same reason it cited for denying admission to the previous documents of transfer. The rest of the documentary exhibits of respondent were denied admission

on the ground of absence of a formal partition of the property covered by OCT No. 48098, which is again erroneous because what respondent sought to prove is an oral partition among the registered owners that may be inferred from various transactions on certain segregated portions as evidenced by those documents. As aptly observed by the CA, respondent stood no chance of being able to establish his claim after the MTC precipitately denied admission to almost all his documentary evidence which are actually relevant and competent to prove his ownership and identity of his land. The MTC thus erred in rejecting the formal offer of documentary evidence that is clearly relevant to respondents cause of action. Even assuming that the MTC had reservations about the relevancy of some exhibits offered by the respondent, still, it should have admitted the same subject to judicialevaluation as to their probative value. In connection with evidence which may appear to be of doubtful relevancy, incompetency, or admissibility, this Court has held that: It is the safest policy to be liberal, not rejecting them on doubtful or technical grounds, but admitting them unless plainly irrelevant, immaterial or incompetent, for the reason that their rejection places them beyond the consideration of the court, if they are thereafter found relevant or competent; on the other hand, their admission, if they turn out later to be irrelevant or incompetent, can easily be remedied by completely discarding them or ignoring them. 35 On the second issue, we sustain the RTC and CA in finding that the property covered by OCT No. 48098 had already been partitioned long before respondent purchased his lot. Under Article 1082 of the Civil Code, every act which is intended to put an end to indivision among co-heirs is deemed to be a partition even though it should purport to be a sale, an exchange, or any other transaction. Partition may thus be inferred from circumstances sufficiently strong to support the presumption.36 In this case, the original registered owners had either mortgaged or sold their respective 1/7 shares, in whole or in part. Although the deeds of conveyances and those early entries in OCT No. 48098 indicated the portions being mortgaged or sold as pertaining to proindiviso shares, the said owners successors-in-interest eventually took possession of the respective portions acquired by them beginning 1951 or thereabouts. These transferees who are mostly relatives likewise introduced improvements on their respective lots, and have also exercised acts of ownership thereon. That these respective shares of the original registered owners were merely designated orally their individual portions having been simply pointed to them, as testified to by respondent and Patrocenia is immaterial. The existence of early annotations (Spanish) on OCT No. 48098, cited by the MTC, indicating that the subject of foreclosure sale in favor of James Turner as 2/7 pro indiviso or undivided portion, do not support the petitioners contention that the property remains un-partitioned. This is because subsequent entries clearly show that theco-owners have either mortgaged or disposed specific portions of the land, as in fact three transfer certificates of title were issued separately to Manuel Urbano II and Cornelio Gamboa covering physically segregated areas with their respective technical descriptions.37 Patrocenia herself testified that she took possession of her lots acquired from the shares of Bernardo and Cirila, and that she had instituted Guillermo as tenant on her land in 1968. Petitioner Leonardo, on his part, testified that he has been residing on the land since he was a child, and that he bought a hectare of land from Bernardo in 1964. He likewise named the present owners of adjoining lots pertaining to the shares of the other original registered owners. Leonardo and Guillermo further testified on the visible boundaries of their respective lands which they have fenced, as well as that acquired by the respondent. Also, specific portions under

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possession and claim of ownership by various persons are already covered by individual tax declarations as evidenced by the Certification dated October 1, 1999 issued by the Office of the Municipal Assessor. Tax Declaration No. 8449 in the name of Emiliano Gamboa was issued in 1962. Clearly, petitioners insistence that the whole parcel under OCT No. 48098 remains undivided and un-partitioned is contradicted by the documentary evidence and their own declarations. The validity of an oral partition is already well-settled.38 It is not required, contrary to the MTCs stated reason for denying some documentary exhibits to prove partition, such as the individual TCTs obtained by Manuel Urbano II and Cornelio Gamboa over portions they have acquired, that the partition agreement be registered or annotated in OCT No. 48098 to be valid. 39 In another case, we have held that after exercising acts of ownership over their respective portions of the contested estate, petitioners are estopped from denying the existence of an oral partition. 40 Here, none of the original co-owners has disputed the fact of partition, as it is only petitioners, as present owners and successors-in-interest of Juan Notarte, who are insisting that no partition had yet taken place merely because OCT No. 48098 was only partially cancelled and many of the present owners have not yet secured their own separate transfer certificates of title. Petitioners stance is unreasonable and seems to be more of an afterthought aimed solely at defeating respondents claim. Notably, Leonardo categorically testified that his father Felipe Notarte acquired the 1/7 share of Juan Notarte which was redeemed from James Turner, and that he was occupying the said parcel, with his father even donatingto him a portion as a wedding gift ("sabong") and another one hectare was bought by him from Bernardo; these portions were already declared in his name for tax purposes indicating therein the areas under their possession. It is indeed unbelievable for the registered owners successors-in-interest, which include petitioners, to have taken possession of their respective portions for which they paid valuable consideration, introduced improvements and paid the realty taxes due thereon, if those lots have not been physically segregated. In any event, estoppel had set in as to bar petitioners as present owners from denying an oral partitionin view of acquiescence thereto by their predecessors-in-interest, as well as their own acts of ownership over those portions they have been occupying. On this point, this Court has ruled that: On general principle, independent and in spite of the statute of frauds, courts of equity have enforced oral partition when it has been completely or partly performed. Regardless of whether a parol partition or agreement to partition is valid and enforceable at law, equity will in proper cases, where the parol partition has actually been consummated by the taking of possession in severalty and the exercise of ownership by the parties of the respective portions set off to each, recognize and enforce such parol partition and the rights of the parties thereunder. Thus, it has been held or stated in a number of cases involving an oral partition under which the parties went into possession, exercised acts of ownership, or otherwise partly performed the partition agreement, that equity will confirm such partition and in a proper case decree title in accordance with the possession in severalty. In numerous cases it has been held or stated that parol partition may be sustained on the ground of estoppel of the parties to assert the rights of a tenant in common as to parts of land divided by parol partition as to which possession in severalty was taken and acts of individual ownership were exercised. And a court of equity will recognize the agreement and decree it to be valid and effectual for the purpose of concluding the right of the parties as between each other to hold their respective parts in severalty.

A parol partition may also be sustained on the ground that the parties thereto have acquiesced in and ratified the partition by taking possession in severalty, exercising acts of ownership with respect thereto, or otherwise recognizing the existence of the partition. A number of cases have specifically applied the doctrine of part performance, or have stated that a part performance is necessary, to take a parol partition out of the operation of the statute of frauds. It has been held that where there was a partition in fact between tenants in common, and a part performance, a court of equity would have regard to enforce such partition agreed to by the parties.41 (Emphasis supplied.) On the third issue, we hold that respondent has established by preponderance of evidence the identity and his ownership of the subject land. The governing law is Article 434 of the Civil Code which provides: Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendants claim. The first requisite: the identity of the land. In an accion reinvindicatoria, the person who claims that he has a better right to the property must first fix the identity of the land he is claiming by describing the location, area and boundaries thereof. Anent the second requisite, i.e., the claimants title over the disputed area, the rule is that a party can claim a right of ownership only over the parcel of land that was the object of the deed.42 To prove the identity of the land he bought from Patrocenia, respondent submitted in evidence deeds of conveyances from the original sale made by Bernardo in 1929 in favor of Emiliano Gamboa, up to the acquisition thereof by Patrocenia. As can be gleaned from the proceedings before the MTC, ownership by respondent was not disputed but only the exact area because the deeds presented by him showed only the area and location with respect to adjoining owners, but did not describe the boundaries of the land sold in metes and bounds. We note the discrepancies in the areas stated in the 1929 Escritura de Compra-Venta (27,172 sq.m.), deeds of donation executed by Emiliano Gamboa (total of 28,327 sq.m.), Deed of Absolute Sale executed by Desiderio and Procopio Gamboa (27,172 sq.m.), and the Deed of Absolute Sale executed by Patrocenia (29,482 sq.m.). However, since respondent traces ownership of his land to Bernardo, the area and boundaries stated in the 1929 Escritura de Compra-Venta should control. Respondent sought to recover 27,604 sq.m., a figure he arrived at by deducting the 10,000 sq.m. subsequently sold by Bernardo to Leonardo in 1964, from the 37,604.714 sq.m. which corresponds to the actual area of Bernardos 1/7 share under OCT No. 48098. However, any increase in the statement of the area in the subsequent deeds of conveyances executed by Bernardos successors-in-interest should not affect the area specified by Bernardo himself in the 1929 sale to Emiliano Gamboa, which was only 27,172 sq.m. Thus, respondent is entitled to27,172 sq.m. only, as this is the actual area acquired by Patrocenia from her predecessors-ininterest. As to the claims of Leonardo and Guillermo over certain portions in excess of the areas lawfully acquired by them from Bernardo and Patrocenia (pertaining to the portion she bought from the share of Cirila Notarte), the RTC correctly rejected the same. Leonardo failed to show any document evidencing the supposed donation of his father and admitted he does not even know its exact area. Guillermo, on the other hand, claimed to have received 450-sq.m. from Patrocenia by

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WHEREFORE, the Decision dated August 10, 2007 of the Court of Appeals in CA-G.R. SP No. virtue of an oral donation in 1968 when he was instituted as a tenant on her land. However, the 92591 isAFFIRMED in PART. The Decision dated March 21, 2005 of the Regional Trial Court of Deed of Confirmation of Donation dated February 21, 1997 mentioned a previous donation made in January 1983, and not 1968. In any case, the requirement as to form for contracts of donation to Alaminos City, Pangasinan, Branch 54 in Civil Case No. A-2964 is MODIFIED, as follows: be valid and enforceable, are absolute and indispensable.43 The alleged prior oral donation by Patrocenia was thus void and ineffective; it is not binding upon third parties like respondent who 1. Respondent Godofredo Notarte is hereby declared the lawful owner of 27,172 square purchased a definite portion of Patrocenias land in good faith, for value and evidenced by a duly meters of the lot which is a portion of the 1/7 share of Bernardo Notarte in the property notarized deed of sale.Guillermo also supposedly bought 4,227 sq.m. from Patrocenia but the covered by OCT No. 48098, the boundaries thereof as described in the Second latter testified that this parcel she sold to Guillermo actually came from the 1/7 share of Cirila and Amended Complaint are as follows: North - Felipe Notarte; West - Felipe Notarte; East different from the property she sold to respondent. Jose Nano; South - Leonardo Notarte and Guillermo Notarte. It is settled that what really defines a piece of land is not the area mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits.44 We have held, however, that in controversial cases where there appears to be an overlapping of boundaries, the actual size of the property gains importance.45 As already stated, the location of respondents land is not in dispute because the adjoining owners are clearly identified.1wphi1 Petitioners in their Answer with Counterclaim merely contended that respondent just wants to increase the actual area of his property. And while petitioners insisted on the visible physical boundaries to mark the limits of respondents land, petitioners Leonardo and Guillermo could not tell the exact areas under their possession. These portions, still unregistered land, were also not described in metes and bounds under their deeds of conveyances. The controversy then lies in the delineation of the physical boundaries of the subject properties by metes and bounds, notwithstanding that the documentary evidence adduced by respondent established his ownership over a portion of Bernardos share, in an areaenclosed by specified adjoining lots/owners, to the extent of 27,172 sq.m. The identity of the land sought to be recovered may be established through the survey plan of the property.46 In this case, a survey could have settled the issue of overlapping boundaries especially since the properties involved are all unregistered and, apparently unsurveyed. Even assuming that the portions occupied by petitioners have already been surveyed, the non-presentation of any approved survey plan would raise a presumption that if presented, such piece of evidence would be adverse to their claim. The MTC did not grant respondents motion for the conduct of a survey to correct the "overlapping boundaries" of the subject lots, stating that it would "pre-empt the issues under contention."However,the MTC in its decision ruled that respondent has not established his cause of actionfor the reason that most of his documentary evidence were denied admission, but upheld the claims of petitioners based on the latters long possession and occupation of their portions. Having ruled that respondent has established the identity and ownership of the land he acquired from Patrocenia with an area of 27,172 sq.m., this Court deems it just and proper to give himthe opportunity to prove the alleged encroachment by petitioners and the extent of such encroachment. For this purpose, a survey is necessary to ascertain the physical boundaries of the subject lands by metes and bounds. Hence, remand of this case to the MTC for the conduct of a survey by qualified geodetic engineers, is in order. As to the grant of actual damages in favor of respondent, we find no legal or factual basis for such award, being based merely on respondents bare testimony in court. In any case, it would be premature to affirm any pronouncement on damages resulting from encroachment being claimed by the respondent pending the resolution of the factual issue of overlapping boundaries. 2. The award of actual damages is DELETED. The order to vacate the alleged areas encroached by petitioners is likewise SET ASIDE, subject to the outcome of the survey and resolution on the issue of overlapping boundaries, consistent with our dispositions herein. 3. This case is hereby REMANDED to the Municipal Trial Court of Bani, Pangasinan for further proceedings. Said court is directed to order the conduct of a survey of the properties involved in this case. For this purpose, the said court shall appoint commissioners and proceed in accordance with Sections 2 to 13, Rule 32 of the 1997 Rules of Civil Procedure, as amended. No pronouncement as to costs. SO ORDERED. FIRST DIVISION G.R. No. 171209 June 27, 2012

SPS. AMBROSIO DECALENG (substituted by his heirs)1 and JULIA "WANAY" DECALENG, Petitioners, vs. BISHOP OF THE MISSIONARY DISTRICT OF THE PHILIPPINE ISLANDS OF PROTESTANT EPISCOPAL CHURCH IN THE UNITED STATES OF AMERICA, otherwise known as THE PHILIPPINE EPISCOPAL CHURCH, represented by RT. REV. ROBERT LEE O. LONGID, BISHOP OF THE EPISCOPAL DIOCESE OF NORTHERN PHILIPPINES, and REV. HENRY HAKCHOLNA, Respondents. x-----------------------x PATRICIO OBONAN BANIAGA, MARIA BAYANG, MAGDALENA RIMANDO, PRISCA BACAGAN, MALIDOM BAGNI, MONICO BACAGAN, PATRICK BAWING, JAMES OMAWENG, CADAWENG LOPEZ, JUDITH MILLER, AGNES BADONGEN, TOBYED SOLANG, ADELA ANGWAY, ROSE BAYAO, THOMAS KIWANG, JULIA DECALENG, LUIS GANGA, CHRISTINA GIAKAW, GUITELEN OLAT, DOMINGA MAGUEN, MARIANO GUITELEN, THERESA SALAO, FELIPE MANODON, JOHN BATNAG, BIAG TAMBIAC, SAGOLO PADANG, CADIOGAN TOLEYAN, BETTY BINAYONG, EDUARDO GUITELEN, PABLO AGPAD, ESTEBAN CAPUYAN, PURITA ANGWAY, POLAT BOSAING, EDUARDO LIZARDO, DILIGEN ALIBAN, MARY B. TUDLONG, PAIT CAPUYAN, HERMINIA BACAGAN, SEVERINO DAGACAN,

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MARTHA BACAGAN, MICHAEL SAUYEN, PASITENG GAYAGAY, HAZEL S. FAGYAN, ARCHIE S. SUMEDCA, ELIZA BAGINWET, AND BONIFACIO LOPEZ, Petitioners, vs. PHILIPPINE EPISCOPAL CHURCH, represented by RT. REV. ROBERT O. LONGID, Respondent. DECISION LEONARDO-DE CASTRO, J.: Pending action before the Court is G.R. No. 171209, a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision2 dated August 26, 2005 and Resolution3 dated January 18, 2006 of the Court of Appeals in CA-G.R. CV No. 49978. The Bishop of the Missionary District of the Philippine Islands of the Protestant Episcopal Church in the United States of America, otherwise known as the Philippine Episcopal Church (PEC), is a religious corporation duly organized and registered under the laws of the Republic of the Philippines, performing mission work in over 500 communities throughout the country. The PEC was previously comprised of five dioceses, namely: Episcopal Diocese of Northern Philippines (EDNP), Episcopal Diocese of Northern Luzon, Episcopal Diocese of North Central Philippines, Episcopal Diocese of Central Philippines, and Episcopal Diocese of Southern Philippines. PECEDNP, which has canonical jurisdiction over the provinces of Mountain Province, Ifugao, Isabela, Quirino, Aurora, and Quezon, exercises missionary, pastoral, and administrative oversight of St. Mary the Virgin Parish in the municipality of Sagada, Mountain Province.4 On February 18, 1992, PEC-EDNP filed before the Regional Trial Court (RTC) of Bontoc, Mountain Province, Branch 36, a Complaint for Accion Reinvindicatoria and Accion Publiciana against Ambrosio Decaleng and Fabian Lopez (Lopez), docketed as Civil Case No. 797. PEC-EDNP alleged that it is the owner of two parcels of land in the Municipality of Sagada, located in areas commonly known as Ken-geka and Ken-gedeng. According to PEC-EDNP, the Ken-geka property is covered by Certificate of Title No. 15 of the Register of Deeds of Mountain Province, issued on February 18, 1915, in the name of The Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States (U.S. Episcopal Church). According to Certificate of Title No. 1, the U.S. Episcopal Church acquired the Ken-geka property by virtue of a sales patent issued by the Governor-General of the Philippine Islands also on February 18, 1915, in accordance with Section 122 of Act No. 496,6 otherwise known as the Land Registration Act. The Ken-geka property has an area of 34 hectares, 24 ares, and 60 centares, with the following technical description: Beginning at point marked 1 on plan Pi-115, N. 68o 48W. 339.1 m. from Pulpit, a Mon. 7 cm. marked B. L. cross at top of limestone cliff, thence N. 79o O6E. 484.Om. to point 2; S. 6o 21E. 651.0m. to point 3; S. 72o 55W. 609.6m. to point 4; N. 15o 15E, 369.9m to point 5; N. 4o 59W. 153.1m. to point 6; N. 51o 11W. 87.9m to point 7; N. 6o37E. 171.0m. to point 1, point of beginning. Bounded on all sides by public lands. Bearings true. Variation 0o 25E. points referred to marked on plan Pi-115. Surveyed March 18-19, 1907. Approved November 27, 1907. Containing an area of thirty-four hectares, twenty-four ares, and sixty centares x x x. 7

PEC-EDNP asserted that the U.S. Episcopal Church donated the Ken-geka property, among other real properties, to the PEC by virtue of a Deed of Donation8 executed on April 24, 1974. Around the second quarter of 1989, Ambrosio Decaleng entered and cultivated a portion of about 1,635 square meters of the Ken-geka property despite the protestations of PEC-EDNP representatives.9 The Ken-gedeng property is described in the complaint as: A certain parcel of land situated at sitio Poblacion, Sagada, Mt. Province, bounded on the North by Tomas Muting & Kapiz Bacolong; South by Mission Compound, East by Bartolome Gambican; and on the West by Nicolas Imperial and Lizardo Adriano with an area of 20[,]692 sq. meters more or less and declared for taxation purposes under Tax Declaration No. 6306 in the name of the Domestic and Foreign Missionary Society of the Protestant Church of the United States of America.10 It is more particularly identified as Lot 3 in Survey Plan PSU-118424, to wit: Beginning at a point marked "1" on plan, being N. 18 deg. 19E., 11477.37 m. from B.L.L.M. 1, Mpal. Dist. of Bauko, Mt. Procvince; thence N. 65 deg. 01 E., 101.21 m. to point 2; thence N. 0 deg. 51 E., 39.07 m. to point 3; thence N. 50 deg. 39 E., 148.20 m. to point 4; thence S. 54 deg. 10 E., 86.03 m. to point 5; thence S. 18 deg. 07 E., 57.58 m. to point 6; thence S. 18 deg. 02 E., 13.82 m. to point 7; thence S. 79 deg. 06 W., 304.36 m. to the point of beginning, containing an area of TWENTY THOUSAND SIX HUNDRED NINETY-TWO SQUARE METERS (20,692 sq. m.) more or less. Bounded on the NE., by property of Bartolome Gambican; on the SE., by property of The Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States of America; on the S., by property of Nicolas Imperial & Adriano Lizardo (joint owners); and on the NW., by properties of Nicolas Imperial & Adriano Lizardo (joint owners) and Tomas Moting, Kapiz, Baculong, Bayang, Apaling & Benito Gawaeng (joint owners). All points referred to are indicated on the plan and marked on the ground as follows: points 1, 2, 3, 4, 5, and 7, by P.L.S. cyl. Conc. Mons; and point 6, by "X" on stone mon. 11 PEC-EDNP averred that it and its predecessors-in-interest occupied the Ken-gedeng property openly, adversely, continuously, and notoriously in en concepto de dueo since the American

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Missionaries arrived in the Mountain Province in 1901. PEC-EDNP and its predecessors-ininterest have introduced valuable improvements on the Ken-gedeng property through the years. The Ken-gedeng property was surveyed on August 22, 1947 and said survey was approved by the Director of Lands on June 15, 1948. During the first quarter of 1987, Ambrosio Decaleng illegally and forcibly entered two portions of the Ken-gedeng property, one measuring 1,650 square meters (Portion 1) and the other 419.50 square meters (Portion 2). Ambrosio Decaleng, despite the vehement objections and conciliatory attitude of PEC-EDNP, cut several matured pine trees within the aforementioned portions of the Ken-gedeng property, removed the fence and two monuments found therein, and cultivated and planted the same with plants of economic value. Ambrosio Decaleng made matters worse by selling Portion 2 of the Ken-gedeng property to Fabian Lopez. Lopez went ahead and purchased Portion 2 despite the warning of PEC-EDNP.12

(CENRO-DENR), Sabangan, Mountain Province, to provide said trial court with a Geodetic Engineer to help in the re-survey of the area subject of the case.

Ambrosio Decaleng and Lopez filed their Answer16 on April 27, 1992. They stated in their Answer that Certificate of Title No. 1 was inaccurate and depicted a parcel of land much bigger than that generally believed to be owned by PEC-EDNP; that the properties occupied by Ambrosio Decaleng were outside the properties of PEC-EDNP; that Ambrosio Decaleng received the property in Ken-geka, and his wife, Julia Wanay Decaleng, received the property in Ken-gedeng, from their parents as their inheritance on the occasion of their marriage in accordance with the local custom of ay-yeng or liw-liwa; that Ambrosio Decaleng and Julia Wanay Decaleng (spouses Decaleng) and their predecessors-in-interest had been in possession of the subject properties continuously, actually, notoriously, publicly, adversely, and in the concept of an owner, since time PEC-EDNP contended that Ambrosio Decaleng and Lopez refused to vacate the portions of Kenimmemorial, or at least, certainly for more than 50 years; that the spouses Decaleng had been in geka and Ken-gedeng properties that they are occupying. Ambrosio Decaleng and Lopez claimed peaceful and undisturbed possession of the subject properties until PEC-EDNP surreptitiously to be the owners of said portions, but PEC-EDNP maintained that such claim is illegal and moved the existing perimeter fence and encroached upon 240 square meters of their properties; baseless in fact and in law. PEC-EDNP likewise challenged the sale of Portion 2 of Ken-gedeng by and that Lopez was a mere tenant of the spouses Decaleng who worked on Portion 2 of the KenAmbrosio Decaleng to Lopez for being unlawful and void. gedeng property. Consequently, Ambrosio Decaleng and Lopez sought the dismissal of the complaint of PEC-EDNP and the payment by PEC-EDNP in their favor of P50,000.00 as reimbursement of litigation expenses and attorneys fees, P100,000.00 as moral damages, PEC-EDNP thus prayed of the RTC to render judgment: and P25,000.00 as exemplary damages. A) To declare the [PEC-EDNP] as the true and real owner of the aforesaid properties and for [Ambrosio Decaleng and Lopez] to perpetually desist from claiming ownership over the respective portion being occupied by them; B) To order [Ambrosio Decaleng and Lopez] to refrain from entering the property of [PEC-EDNP] subject of this case; C) To order [Ambrosio Decaleng and Lopez] to vacate the premises of the subject portions of the aforedescribed land being illegally occupied by them; D) To order [Ambrosio Decaleng and Lopez] to pay the [PEC-EDNP] the amount of P20,000.00 as actual damages, P15,000.00 as attorneys fee, plus P500.00 as appearance pay of counsel every time this case is called for hearing and P10,000.00 as necessary expenses of litigation; E) To issue a temporary restraining order directing [Ambrosio Decaleng and Lopez] to desist from continuing to expand their aforesaid illegal occupation and to unlawfully enter the property subject of this case and thereafter to make it permanent; and F) To sentence [Ambrosio Decaleng and Lopez] to pay the cost of the suit; G) Finally [PEC-EDNP] prays for such other measures of reliefs and remedies just and equitable in the premises.13 Before Ambrosio Decaleng and Lopez could file their answer to the complaint of PEC-EDNP, the RTC issued an Order14 dated March 20, 1992, suspending further proceedings in Civil Case No. 797 until the parties have conducted a relocation survey of the properties in question, as agreed upon in open court. The RTC issued another Order15 of even date requesting the Community Environment and Natural Resources Office-Department of Environment and Natural Resources The relocation survey ordered by the RTC was conducted on September 17, 1992. On February 12, 1993, PEC-EDNP filed a Motion to Admit Amended Complaint alleging: 1. That when defendant Ambrosio Decaleng filed his answer, he alleged that subject portions of the properties are owned by his wife, Julia "Wanay" Decaleng; 2. That after the verification survey was conducted on September 17, 1992, it came to the knowledge of [PEC-EDNP] that other parties are making adverse claim of ownership over subject properties; as in fact, some of them requested the surveyor hired by [Ambrosio Decaleng and Lopez] to survey portions of the properties owned by [PECEDNP] which they respectively claim to be owned by them.17 The RTC admitted the amended complaint of PEC-EDNP in the Order18 dated February 16, 1993. As a result, Julia Wanay Decaleng, Florentina Madadsec (Madadsec), Dominga D. Maguen (Maguen), and Patrick Bawing (Bawing) were impleaded as additional defendants and summoned to answer the amended complaint.19 The spouses Decaleng and Lopez jointly filed their Answer to Amended Complaint 20 on March 1, 1993, essentially reiterating the allegations in the earlier Answer filed by Ambrosio Decaleng and Lopez, but increasing their claim for reimbursement of litigation expenses to P85,000.00. Maguen filed her Answer to Summons/Complaint21 on March 2, 1993, in which she wrote that she was not interested to appear before the RTC for her deceased father, Kapis, from whom she inherited one of the lots that bound the PEC-EDNP property; and that PEC-EDNP should have pursued its complaint a long time ago when the concerned "boundary owners" were still alive. Madadsec and Bawing did not submit any answer but the RTC, in an Order22 dated April 27, 1993, denied the Motion to Declare Defendants in Default23 filed by PEC-EDNP and ruled that the Answer to Amended Complaint of spouses Decaleng and Lopez shall be deemed to also be the answer of Madadsec and Bawing.

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After trial, the RTC rendered its Decision24 on January 20, 1995 finding that: The documentary and testimonial evidence as a whole, adduced by the [PEC-EDNP] on whose side the onus probandi lies, do not adequately and reliably support by greater weight of credibility, the [proponents] causes of action, vis--vis, the counter-vailing proof proffered by the defensive party (Article 434, New Civil Code; Rule 131, Sec. 1 and Rule 133, Sec. 1, Revised Rules on Evidence). De consequente, the plaintiff Church is determined not the owner of those three (3) parcels of land situated at Sitio Ken-geka and Sitio Ken-gedeng, Sagada, Mt. Province identified as the bone of contention in this suit. And that said Church has no right of possession of the subject parcels better than that of the defendants who are the present de facto possessors (Art. 433 and Art. 541, NCC). Corollarily, the former can neither recover ownership, which said right it never had from the very beginning, of the lots in question from the latter; nor possessions thereof, by the same token, either as an element of, or independent of ownership (Art. 428, Par. 2, NCC; Tuazon v. Jaime, CAGR 26538-R, Feb.16, 1963; Lopez v. Franco, 26-786-R, May 27, 1961). Re that 1,635 square meters lot at Ken-geka (Exhs. "C-1" and "C-2"), the mere supposed xerox copy of a reputed OCT No. 1 purportedly including the portion within its borders, allegedly registered in the name of the plaintiff Church (Exh. "A"), does not reasonably confirm the fact of its absolute ownership of the said portion (Reyes vs Borbon, 50 Phil. 79). Neither does the purported xerox copy of a putative deed of donation (Exh. "B"), sans the original, substantially show that said plaintiff acquired dominion over that particular parcel in issue via gratuitous grant as a mode of acquiring ownership (Art. 712, Par. 2, NCC; Paras, Civil Code, Vol. II, 1981 Ed., (b) p. 92). By itself, the plaintiffs survey plans of the premises coupled with its unpaid tax declarations (Exhs. "BB", "CC", "E", "F" and "G") is insufficient and inc[onc]lusive to prove ownership ad/or possession of the proponent of the subject area (Acua vs City of Manila, [9] Phil. 225; Dadivas vs Bunayon, 54 Phil. 632). While it appears that the Church is the possessor for almost a century of the greater part of that tract of land embraced in its survey plan of P1-115 (Exh. "C"), it cannot be deemed to be in constructive possession of that portion now in question, considering that said plaintiff never materially occupied or exercised control over the same and that it has been in the adverse possession of the Decalengs for quite sometime (Art. 531, NCC; Rosales vs Director of Lands, 51 Phil 502). In effect, dominion over the portion have not passed to the plaintiff by operation of law by virtue of long and actual possession as a title or a mode of acquiring ownership (Art. 712, Par. 2, NCC; Nolan v. Jalandoni, 23 Phil. 299). Anent those two (2) separate parcels at Ken-gedeng (Exhs. "D-2", "D-3", "D-4", "D-5"), the survey plans and tax declarations in the name of the plaintiff and predecessors in interest (Exhs. "X", "DD", "G", "H", "I") do not by themselves confer dominion of the proponent over the aforementioned parcels, albeit the same are included within the coverage of the documents. To be sure, the Church is the exclusive and continuous possessor, probably since 1902, of the southeastern portion of the surveyed area where its building are erected and the surroundings thereof improved (Exhs. "X", "X-1" to "X-6"). This fact in conjunction with its said survey plans and tax declarations may prove ownership of the plaintiff of the premises mentioned (Alamo vs Ignacio, L16434, Feb. 28, 1962). It cannot however be presumed, much less adjudged that the Church has constructive possession of the subject two separate parcels absent any showing that it materially occupied, and exercised control over said parcels at any given time in the same manner as it developed the rest of the portions within the plans and tax declarations. Not to mention the fact that the former lots have been all along in the adverse possession of the defendants. Hence, by law, the plaintiff Church did not acquire ownership and/or possession of those disputed lots at Ken-gedeng.

Penultimately, the counterclaim for damages interposed by the defensive party is denied for lack of merit and on the principle that no penalty should be attached on the right to litigate (Art. 2217, NCC; Ramos vs. Ramos, 61 SCRA 284)25 The fallo of the RTC Decision reads: WHEREFORE, premises considered, judgment is hereby rendered in accordance with the prayer of the defendants, viz: I. Dismissing the instant suit; II. Ordering the plaintiff to pay attorneys fees and litigation expense in the reasonable sum of P120,000.00; and to pay the costs.26 The PEC-ENDP filed a Motion for Reconsideration of the aforementioned Decision on February 21, 1995 but the RTC denied said motion in an Order27 dated May 11, 1995. PEC-EDNP filed an appeal before the Court of Appeals which was docketed as CA-G.R. CV No. 49978. While the case was pending before the Court of Appeals, Atty. Paul P. Sagayo, Jr. (Sagayo) and Atty. Floyd P. Lalwet (Lalwet) entered their appearance as counsels for PEC-EDNP on March 28, 1996. In the Notice of Appearance28 and subsequent pleadings29 filed by Attys. Sagayo and Lalwet, they included the following names as defendants: Simeon Dapliyan (Dapliyan), Gayagay,30 Nicolas Imperial (Imperial), Juana Ullocan (Ullocan), and Mary Tudlong (Tudlong). The Court of Appeals rendered its Decision on August 26, 2005, overturning the appealed RTC Decision because it was based on misplaced premises and contrary to law and jurisprudence. The Court of Appeals declared PEC-EDNP the true and real owner of the Ken-geka and Ken-gedeng properties. The dispositive portion of the appellate courts Decision reads: WHEREFORE, the judgment dated January 20, 1995 of the Regional Trial Court, Branch 16, Mountain Province is REVERSED and another one is ENTERED, as follows: (1) Declaring the plaintiff as the true and real owner of the properties subject of this controversy, namely, the parcel of land covered by Original Certificate of Title No. 1 and Lot 3 covered by Survey Plan PSU-118424; and (2) Ordering the defendants and all persons claiming under them to vacate the premises and surrender the peaceful possession thereof to the plaintiff or its duly authorized representative; and to refrain from further encroaching upon the plaintiffs properties. Costs to be paid by the defendants.31

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Spouses Decaleng and Lopez timely filed a Motion for Reconsideration of the foregoing Decision but it was denied by the appellate court in a Resolution32 dated January 18, 2006. The spouses Decaleng (sans Lopez) then sought recourse before this Court via the instant Petition for Review on Certiorari, docketed as G.R. No. 171209. Meanwhile, in a letter33 dated February 12, 2006, addressed to then Supreme Court Justice Artemio V. Panganiban, through Assistant Court Administrator and Chief Public Information Officer Ismael G. Khan, Jr., Dapliyan, Gayagay, Imperial, Ullocan, and Tudlong questioned the Court of Appeals Decision dated August 26, 2005 in CA-G.R. CV No. 49978, specifically, their inclusion as party defendants in said case; and prayed that the same Decision be considered null and void. 34 In addition, a Petition (Re: Our lots in Sagada, Mountain Province, Philippines, subject matter of CAG.R. CV No. 49978, entitled Philippine Episcopal Church represented by Rt. Rev. Robert O. Longid vs. Spouses Ambrosio Decaleng and Julia Wanay Decaleng, et al.) dated February 24, 2006, signed by 40 residents of Sagada,35 Mountain Province, including Julia Wanay Decaleng, Maguen, Bawing, Gayagay, and Tudlong, likewise challenged the Decision dated August 26, 2005 of the Court of Appeals in CA-G.R. CV No. 49978 for awarding to PEC-EDNP their ancestral properties.36 The letter dated February 12, 2006 and Petition dated February 24, 2006 were jointly docketed as UDK-13672 as they lack (1) proof of service and affidavit of service; (2) verification and certification on non-forum shopping; and (3) payment of docket fees.

Prefatorily, it is already a well-established rule that the Court, in the exercise of its power of review under Rule 45 of the Rules of Court, is not a trier of facts and does not normally embark on a reexamination of the evidence presented by the contending parties during the trial of the case, considering that the findings of facts of the Court of Appeals are conclusive and binding on the Court.40 This rule, however, admits of exceptions as recognized by jurisprudence, to wit: (1) [W]hen the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.41

The case at bar falls under one of the exceptions, as the factual conclusions of the RTC and the In a Resolution37 dated July 17, 2006, the Court resolved to consolidate UDK-13672 with G.R. No. Court of Appeals are in conflict with each other. Thus, the Court must necessarily return to the 171209 considering that both cases assail the same Court of Appeals Decision; that Julia Wanay evidence on record and make its own evaluation thereof. Decaleng is one of the signatories in UDK-13672 and at the same time, one of the petitioners in G.R. No. 171209; and five of the signatories of the Petition dated February 24, 2006 in UDK-13672 An accion reinvindicatoria is an action to recover ownership over real property.42 Article 434 of the were defendants-appellees in the assailed Decision of the Court of Appeals. New Civil Code provides that to successfully maintain an action to recover the ownership of a real property, the person who claims a better right to it must prove two things: first, the identity of the However, in a Resolution38 dated September 11, 2006, the Court already resolved to note without land claimed by describing the location, area, and boundaries thereof; and second, his title action the letter dated February 12, 2006 and Petition dated February 24, 2006 in UDK-13672. thereto.43 Therefore, only the spouses Decalengs Petition in G.R. No. 171209 is still pending action by this Court. In their Petition, the spouses Decaleng made the following assignment of errors: 1. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE SUPPOSED ORIGINAL CERTIFICATE OF TITLE NO. 1, NOTWITHSTANDING THE FINDING OF THE TRIAL COURT THAT IT DOES NOT EXIST AND IS, AT BEST, FICTITIOUS; 2. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT RESPONDENT HAS ESTABLISHED ITS OWNERSHIP AND POSSESSION OVER THE LOTS IN DISPUTE, NOTWITHSTANDING THE FINDING OF THE TRIAL COURT THAT SAID LOTS WERE POSSESSED AND OCCUPIED BY THE PETITIONERS AND THEIR PREDECESSORS IN INTEREST; 3. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO APPLY THE DOCTRINE LAID DOWN IN CARINO VS. INSULAR GOVERNMENT, 41 PHIL 935, AND OTHER RELATED CASES IN FAVOR OF THE PETITIONERS.39 The Court finds that PEC-EDNP was able to successfully prove both requisites by preponderance of evidence, both documentary and testimonial. The identity of the properties over which PEC-EDNP asserts ownership is well-established. The Ken-geka property is covered by Certificate of Title No. 1, while the Ken-gedeng property is identified as Lot 3 of Survey Plan PSU-118424. The location, area, and boundaries of said properties were verified by relocation surveys conducted in 1947,44 1968,45 1987,46 199147 and 1993.48 PEC-EDNP likewise proved its title to the Ken-geka and Ken-gedeng properties. The Ken-geka property was registered in the name of the U.S. Episcopal Church under Certificate of Title No. 1 issued on February 18, 1915. It was conveyed by the U.S. Episcopal Church to PEC through a Deed of Donation dated April 24, 1974. It was declared by the U.S. Episcopal Church and PECEDNP for real property tax purposes under Tax Declaration Nos. 6307, 14326, and A11179.49 Although not yet covered by any certificate of title, the Ken-gedeng property had been occupied under claim of title (en concepto de dueo) by PEC-EDNP and its predecessor-ininterest, the U.S. Episcopal Church, since the latters arrival in 1901. It was declared by the U.S. Episcopal Church and PEC-EDNP for real property tax purposes under Tax Declaration Nos. 14325 and 6306.50 PEC-EDNPs officers, priests, and employees, as well as the Sagada residents testified as to actual possession by PEC-EDNP of the Ken-geka and Ken-gedeng properties by the introduction of improvements such as permanent buildings, pine trees, fruit trees, and vegetable gardens thereon.

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The Court quotes with approval the following observations of the Court of Appeals in its Decision dated August 26, 2005: The plaintiff established its ownership and possession of the contested lots through the various documents under and in the name of its predecessor-in-interest, the [U.S. Episcopal Church], specifically: deed of donation; approved plat of sales survey; and the approved survey plan and owners copies of Tax Declaration Nos. 6307, 14326, A-11179, 14325 and 6306. In contrast, the defendants mainly relied on the supposed non-existence of OCT No. 1 that rested solely on the certification of Atty. Dulay-Papa of the Registry of Deeds-Mountain Province. We consider the testimonial and documentary evidence of the plaintiff sufficient, clear and competent in establishing its absolute ownership and actual possession of the disputed areas which were within its properties. The survey plans, prepared upon the request of the plaintiff, were approved by the Director of Lands, which, standing alone, might not be conclusive proofs of ownership, but were already proof that the plaintiff had taken steps to assert and protect its ownership and possession of the premises. Being public documents, such survey plans were entitled to great weight and credence as "evidence of the facts which gave rise to their execution." Moreover, the plaintiffs tax declarations, although not proof of ownership, were strong evidence of ownership for being coupled with possession for a period sufficient for prescription. In sum, the plaintiffs documentary evidence was overwhelming. The plaintiffs testimonial evidence was equally formidable, because it was provided by witnesses who were very knowledgeable and reliable. Fr. Arthur Bosaing had resided in the property for almost 26 years, such that his testimony that the disputed parcels were inside the mission lot where a building and other improvements of the plaintiff were found might not be disputed. Retired Bishop Robert Lee O. Longid attested that he and his father had lived from 1928 to 1931 in a building called the Fox House, which was located near the portion being claimed by the Decalengs. Even defendant Julia Decaleng admitted on cross-examination that there was a building owned by the plaintiff in one of the disputed lots. She was referring to the plaintiffs building known as Doctors Quarters which was then occupied by Fr. Bosaing. It is apt to observe that actual possession of an owner did not need to be the actual and physical possession and occupation of every inch or portion of the property. That is an impossibility. Constructive possession is sufficient, for, according to Ramos v. Director of Lands: "The claimant has color of title; he acted in good faith; and he has had open, peaceable, and notorious possession of a portion of the property, sufficient to apprise the community and the world that the land was for his enjoyment. (See Arts. 446, 448, Civil Code.) Possession in the eyes of the law does not mean that a man has to have his feet on every square meter of ground before it can be said that he is in possession. x x x"51 The spouses Decaleng attempt to raise doubts as to the title of PEC-EDNP over the Ken-geka property by insisting that (1) PEC-EDNP failed to present the original copies of Certificate of Title No. 1 and the Deed of Donation dated April 24, 1974 during the trial before the RTC; and (2) Certificate of Title No. 1 does not exist based on the Certification dated July 20, 1992 of Register of Deeds Angela Dailay-Papa (Dailay-Papa) of the Mountain Province. It is worthy to point out that PEC-EDNP presented and marked the photocopies of Certificate of Title No. 1 and the Deed of Donation dated April 24, 1974 in the course of the testimony of Rev. Henry Hakcholna on June 10, 1993 before the RTC. Even though the defense counsel stated for the record the defenses position that Certificate of Title No. 1 is non-existent, he did not make any objection to the presentation and marking of the photocopies of Certificate of Title No. 1 and the

Deed of Donation dated April 24, 1974 by PEC-EDNP, and even admitted that said photocopies appear to be faithful reproductions of the "purported" original documents. 52 Relevant herein is the pronouncement of the Court in Caraan v. Court of Appeals, 53 wherein it accepted in evidence a mere photocopy of the document: Petitioners asseveration that TCT No. RT-71061 (214949) should not have been admitted into evidence because private respondents merely presented the photocopy thereof is also unmeritorious. Private respondents presented the original of TCT No. RT-71061 (214949) in open court during the hearing held on April 13, 1994. x x x. xxxx Furthermore, no objection was raised by counsel for petitioners in their written opposition/comment to private respondents' offer of evidence regarding the fact that what was marked and submitted to the court was the photocopy. In Blas vs. Angeles-Hutalla, the Court held thus: The established doctrine is that when a party failed to interpose a timely objection to evidence at the time they were offered in evidence, such objection shall be considered as waived. In Tison v. Court of Appeals, the Supreme Court set out the applicable principle in the following terms: [F]or while the documentary evidence submitted by petitioners do not strictly conform to the rules on their admissibility, we are, however, of the considered opinion that the same may be admitted by reason of private respondent's failure to interpose any timely objection thereto at the time they were being offered in evidence. It is elementary that an objection shall be made at the time when an alleged inadmissible document is offered in evidence, otherwise, the objection shall be treated as waived, since the right to object is merely a privilege which the party may waive. As explained in Abrenica vs. Gonda, et al., it has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of any evidence must be made at the proper time, otherwise, it will be deemed to have been waived. The proper time is when from the question addressed to the witness, or from the answer thereto, or from the presentation of the proof, the inadmissibility of the evidence is, or may be inferred. Thus, a failure to except to the evidence because it does not conform with the statute is a waiver of the provisions of the law. . . . Hence, considering the fact that counsel for petitioners admitted that the photocopy of TCT No. RT-71061 (214949) is a faithful reproduction of the original thereof, stipulated with private respondents' counsel that what will be marked and submitted to the trial court as Exhibit A is the photocopy, and the lack of objection on such ground which is then deemed a waiver thereof, the admission into evidence of the photocopy of TCT No. RT-71061 was absolutely correct.54 Also instructive on this point is Quebral v. Court of Appeals,55 where the Court ruled that: Even if it were true that Exhibit K consisted of a mere photocopy and not the original of the petitioners letter, petitioner nevertheless failed to make timely objection thereto. As to when an objection to a document must be made, the Court ruled in Interpacific Transit, Inc. v. Aviles [186 SCRA 385 (June 6, 1990)]:

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Objection to the documentary evidence must be made at the time it is formally offered, not earlier. The identification of the document before it is marked as an exhibit does not constitute the formal offer of the document as evidence for the party presenting it. Objection to the identification and marking of the document is not equivalent to objection to the document when it is formally offered in evidence. What really matters is the objection to the document at the time it is formally offered as an exhibit. In the case at bench, no such timely objection was ever made. Consequently, the evidence not objected to became property of the case, and all the parties to the case are considered amenable to any favorable or unfavorable effects resulting from the evidence. x x x." 56

plus the grant of their counterclaim for the payment of moral damages, exemplary damages, litigation expenses, and attorneys fees; and they conspicuously did not pray for the annulment or cancellation of Certificate of Title No. 1. Evidently, the spouses Decalengs attack on the validity, as well as the existence of Certificate of Title No. 1 is only incidental to their defense against the accion publiciana and accion reinvindicatoria instituted by PEC-EDNP, hence, merely collateral. The spouses Decaleng, in an effort to skirt the prohibition against collateral attack of certificates of title, argue that they are not attacking the validity of Certificate of Title No. 1, but, rather, the existence of such a certificate. The Court notes that the spouses Decaleng did not only put in issue the purported non-existence of Certificate of Title No. 1, but also questioned the validity of the certificate itself.

In any case, PEC-EDNP subsequently submitted to the RTC its original copies of Certificate of Title No. 1 and Deed of Donation dated April 24, 1974, together with its Motion for Reconsideration The Court stresses that PEC-EDNP submitted to the RTC the owners duplicate certificate of of the RTC Decision dated January 20, 1995. Certificate of Title No. 1, which can be used in evidence before Philippine courts in the same way as the original certificates in the registration book. Section 47 of Act No. 496 clearly states: As for the spouses Decalengs contention that Certificate of Title No. 1 does not exist, the Court fully agrees with the Court of Appeals that the same constitutes a collateral attack of Certificate of Title No. 1. It is a hornbook principle that "a certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein."57 In order to establish a system of registration by which recorded title becomes absolute, indefeasible, and imprescriptible, the legislature passed Act No. 496, which took effect on February 1, 1903. Act No. 496 placed all registered lands in the Philippines under the Torrens system. The Torrens system requires the government to issue a certificate of title stating that the person named in the title is the owner of the property described therein, subject to liens and encumbrances annotated on the title or reserved by law. The certificate of title is indefeasible and imprescriptible and all claims to the parcel of land are quieted upon issuance of the certificate. Presidential Decree No. 1529, known as the Property Registration Decree, enacted on June 11, 1978, amended and updated Act No. 496.58 Section 48 of Presidential Decree No. 1529 provides: Section 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. A Torrens title cannot be attacked collaterally, and the issue on its validity can be raised only in an action expressly instituted for that purpose.59 A collateral attack is made when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action.60 In this case, the original complaint filed by PEC-EDNP before the RTC is for accion publiciana and accion reinvindicatoria (for recovery of possession and ownership) of the Ken-geka and Kengedeng properties. In said complaint, PEC-EDNP alleged ownership of the Ken-geka property as evidenced by Certificate of Title No. 1. In their defense, the spouses Decaleng raised issues as to the validity of Certificate of Title No. 1 (by asserting in their Answer that Certificate of Title No. 1 covered an area much larger than that actually owned by PEC-EDNP), and as to the existence of Certificate of Title No. 1 (by presenting Mountain Province Register of Deeds Dailay-Papas certification that Certificate of Title No. 1 does not appear in the record of registered titles). Nevertheless, the spouses Decaleng only sought the dismissal of the complaint of PEC-EDNP, SEC. 47. The original certificate in the registration book, any copy thereof duly certified under the signature of the clerk, or of the register of deeds of the province or city where the land is situated, and the seal of the court, and also the owners duplicate certificate, shall be received as evidence in all the courts of the Philippine Islands and shall be conclusive as to all matters contained therein except as far as otherwise provided in this Act. Moreover, Mountain Province Register of Deeds Dailay-Papas certification to the effect that Certificate of Title No. 1 does not appear in the record of registered titles does not necessarily mean that such certificate has never been issued. As the Court held in Chan v. Court of Appeals61 : Petitioners submission that OCT 2553 is not in the records of the Registry of Deeds concerned and the xerox copy of subject title exhibited before the trial court was not a genuine and faithful reproduction of the original copy of said certificate of title does not merit serious consideration. The mere fact that the Registry of Deeds of the Province of Rizal does not have the original of a certificate of title does not necessarily mean that such title never existed because the same could have been lost, stolen, or removed from where said title was kept. To show that no record of the original certificate of title in question existed requires a preponderance of proof petitioners failed to adduce.62 (Emphasis supplied.) In fact, in the present case, the Records Management Division Chief Jose C. Mariano, for the Director of Lands, wrote a letter dated August 31, 1993 addressed to the counsel for PEC-EDNP, giving the reason for the lack of records on the sales patent for the Ken-geka property and Certificate of Title No. 1 issued to the U.S. Episcopal Church: In reply to your letter dated August 25, 1993, we regret to inform you that we have no reconstituted records of pre-war sales application of the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States of America, which the basis of the issuance of alleged Sales Patent No. 14 on February 18, 1915. It may be informed further that all our pre-war records were burned and/or destroyed when the Oriente Building where the Bureau of Lands was then housed was razed by fire during the liberation of Manila.63 (Emphasis supplied.) In contrast, the spouses Decaleng were unable to present convincing evidence to establish their rights of possession and ownership over the disputed properties superior to those of PEC-EDNP.

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The spouses Decaleng could not even establish the identity of the properties they claim to own. Although the spouses Decaleng were able to give the purported area measurements of said properties, they could not give the exact location and boundaries thereof. Assuming as true that the spouses Decaleng received properties from their parents as part of the ay-yeng or liw-liwa custom, there is no showing that such properties thus given to them are actually the same as the ones they are now occupying. The spouses Decaleng were similarly vague as to the basis of their title. The evidence for the spouses Decaleng do not establish how their predecessors-in-interest acquired the disputed properties and how long they and their predecessors-in-interest have been in possession of the same. While the spouses Decaleng testified that they inherited the properties in Ken-geka and Kengedeng from their parents who, in turn, inherited the same from their own parents, there still remains the question as to how the spouses Decalengs predecessors -in-interest originally came into possession of the subject properties. In their Answer before the RTC, the spouses Decaleng alleged possession of their properties from time immemorial or, at least, certainly for more than 50 years. These two allegations actually proffer two different bases for title: the first refers to a native title acquired through ancient possession of the land, which means that the land never became public land at all; while the second denotes an imperfect title acquired through the occupation of agricultural public land for the requisite period. The evidence submitted by the spouses Decaleng did not support either allegation. In Cario v. Insular Government,64 the United States Supreme Court granted an Igorots application for registration of a piece of land in Benguet based on the latters possession of the land from time immemorial, ratiocinating thus: It might, perhaps, be proper and sufficient to say that when, as far back as testimony or memory goes, the land has been held by individuals under a claim of private ownership, it will be presumed to have been held in the same way from before the Spanish conquest, and never to have been public land. Certainly in a case like this, if there is doubt or ambiguity in the Spanish law, we ought to give the applicant the benefit of the doubt. x x x. If the applicants case is to be tried by the law of Spain, we do not discover such clear proof that it was bad by that law as to satisfy us that he does not own the land. To begin with, the older decrees and laws cited by the counsel for the plaintiff in error seem to indicate pretty clearly that the natives were recognized as owning some lands, irrespective of any royal grant. In other words, Spain did not assume to convert all the native inhabitants of the Philippines into trespassers or even into tenants at will. For instance, Book 4, title 12, Law 14 of the Recopilacin de Leyes de las Indias, cited for a contrary conclusion in Valenton vs. Murciano, 3 Philippine, 537, while it commands viceroys and others, when it seems proper, to call for the exhibition of grants, directs them to confirm those who hold by good grants or justa prescripcin. It is true that it begins by the characteristic assertion of feudal overlordship and the origin of all titles in the King or his predecessors. That was theory and discourse. The fact was that titles were admitted to exist that owed nothing to the powers of Spain beyond this recognition in their books. Prescription is mentioned again in the royal cedula of October 15, 1754, cited in 3 Philippine, 546; "Where such possessors shall not be able to produce title deeds, it shall be sufficient if they shall show that ancient possession, as a valid title by prescription." It may be that this means

possession from before 1700; but at all events, the principle is admitted. As prescription, even against Crown lands, was recognized by the laws of Spain we see no sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to lands over which Spain had only a paper sovereignty.65 From the testimonies of the spouses Decaleng and their witnesses, the Court can glean actual possession of the properties in Ken-geka and Ken-gedeng by the spouses Decaleng and their predecessors-in-interest only as far back as the 1920s.66 This hardly constitutes possession since time immemorial judging by the standard set by the Court in Oh Cho v. Director of Lands67 : The applicant failed to show that he has title to the lot that may be confirmed under the Land Registration Act.1wphi1 He failed to show that he or any of his predecessors in interest had acquired the lot from the Government, either by purchase or by grant, under the laws, orders and decrees promulgated by the Spanish Government in the Philippines, or by possessory information under the Mortgage Law (section 19, Act 496). All lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. An exception to the rule would be any land that should have been in the possession of an occupant and of his predecessors in interest since time immemorial, for such possession would justify the presumption that the land had never been part of the public domain or that it had been a private property even before the Spanish conquest. (Carino vs. Insular Government, 212 U.S., 449; 53 Law. ed., 594.) The applicant does not come under the exception, for the earliest possession of the lot by his first predecessor in interest began in 1880.68 (Emphases supplied.) Neither can the spouses Decaleng claim imperfect title to the properties in Ken-geka and Kengedeng for such can only be acquired by possession of lands of the public domain for the period required by law.69 Because the spouses Decaleng failed to provide and prove the necessary details on how and when their predecessors-in-interest came to possess the disputed properties, there is no way for the Court to determine whether or not said properties were still part of the public domain when occupied by the spouses Decalengs predecessors -in-interest. As the Court previously found herein, the Ken-geka property was already covered by a Certificate of Title issued in the name of the U.S. Episcopal Church (the predecessor-in-interest of PEC-EDNP) on February 18, 1915 and the Ken-gedeng property had been in the possession under claim of title by the U.S. Episcopal Church ever since its arrival in the Mountain Province in 1901. WHEREFORE, the Petition of the spouses Decaleng in G.R. No. 171209 is hereby DENIED for lack of merit. The assailed Decision dated August 26, 2005 and Resolution dated January 18, 2006 of the Court of Appeals in CA-G.R. CV No. 49978 are AFFIRMED. SO ORDERED. EN BANC G.R. No. 196271 October 18, 2011

DATU MICHAEL ABAS KIDA, in his personal capacity, and in representation of MAGUINDANAO FEDERATION OF AUTONOMOUS IRRIGATORS ASSOCIATION, INC., HADJI MUHMINA J. USMAN, JOHN ANTHONY L. LIM, JAMILON T. ODIN, ASRIN TIMBOL JAIYARI, MUJIB M. KALANG, ALIH AL-SAIDI J. SAPI-E, KESSAR DAMSIE ABDIL, and BASSAM ALUH SAUPI, Petitioners, vs.

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SENATE OF THE PHILIPPINES, represented by its President JUAN PONCE ENRILE, HOUSE OF REPRESENTATIVES, thru SPEAKER FELICIANO BELMONTE, COMMISSION ON ELECTIONS, thru its Chairman, SIXTO BRILLANTES, JR., PAQUITO OCHOA, JR., Office of the President Executive Secretary, FLORENCIO ABAD, JR., Secretary of Budget, and ROBERTO TAN, Treasurer of the Philippines,Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 196305

x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 197392 LUIS "BAROK" BIRAOGO, Petitioner, vs. THE COMMISSION ON ELECTIONS and EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x

BASARI D. MAPUPUNO, Petitioner, vs. SIXTO BRILLANTES, in his capacity as Chairman of the Commission on Elections, FLORENCIO ABAD, JR. in his capacity as Secretary of the Department of Budget and Management, PACQUITO OCHOA, JR., in his capacity as Executive Secretary, JUAN PONCE ENRILE, in his capacity as Senate President, and FELICIANO BELMONTE, in his capacity as Speaker of the House of Representatives, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 197454 JACINTO V. PARAS, Petitioner, vs. EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., and the COMMISSION ON ELECTIONS, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 197221 MINORITY RIGHTS FORUM, PHILIPPINES, INC., Respondents-Intervenor. REP. EDCEL C. LAGMAN, Petitioner, vs. PAQUITO N. OCHOA, JR., in his capacity as the Executive Secretary, and the COMMISSION ON ELECTIONS, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 197280 ALMARIM CENTI TILLAH, DATU CASAN CONDING CANA, and PARTIDO DEMOKRATIKO PILIPINO LAKAS NG BAYAN (PDP-LABAN), Petitioners, vs. THE COMMISSION ON ELECTIONS, through its Chairman, SIXTO BRILLANTES, JR., HON. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary, HON. FLORENCIO B. ABAD, JR., in his capacity as Secretary of the Department of Budget and Management, and HON. ROBERTO B. TAN, in his capacity as Treasurer of the Philippines, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 197282 ATTY. ROMULO B. MACALINTAL, Petitioner, vs. COMMISSION ON ELECTIONS and THE OFFICE OF THE PRESIDENT, through EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., Respondents. DECISION BRION, J.: On June 30, 2011, Republic Act (RA) No. 10153, entitled "An Act Providing for the Synchronization of the Elections in the Autonomous Region in Muslim Mindanao (ARMM) with the National and Local Elections and for Other Purposes" was enacted. The law reset the ARMM elections from the 8th of August 2011, to the second Monday of May 2013 and every three (3) years thereafter, to coincide with the countrys regular national and local elections. The law as well granted the President the power to "appoint officers-in-charge (OICs) for the Office of the Regional Governor, the Regional Vice-Governor, and the Members of the Regional Legislative Assembly, who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office." Even before its formal passage, the bills that became RA No. 10153 already spawned petitions against their validity; House Bill No. 4146 and Senate Bill No. 2756 were challenged in petitions filed with this Court. These petitions multiplied after RA No. 10153 was passed. Factual Antecedents The State, through Sections 15 to 22, Article X of the 1987 Constitution, mandated the creation of autonomous regions in Muslim Mindanao and the Cordilleras. Section 15 states: Section 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and

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distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines. Section 18 of the Article, on the other hand, directed Congress to enact an organic act for these autonomous regions to concretely carry into effect the granted autonomy. Section 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multisectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family and property law jurisdiction consistent with the provisions of this Constitution and national laws. The creation of the autonomous region shall be effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region. On August 1, 1989 or two years after the effectivity of the 1987 Constitution, Congress acted through Republic Act (RA) No. 6734 entitled "An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao." A plebiscite was held on November 6, 1990 as required by Section 18(2), Article X of RA No. 6734, thus fully establishing the Autonomous Region of Muslim Mindanao (ARMM). The initially assenting provinces were Lanao del Sur, Maguindanao, Sulu and Tawi-tawi. RA No. 6734 scheduled the first regular elections for the regional officials of the ARMM on a date not earlier than 60 days nor later than 90 days after its ratification. RA No. 9054 (entitled "An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, entitled An Act Providing for the Autonomous Region in Muslim Mindanao, as Amended") was the next legislative act passed. This law provided further refinement in the basic ARMM structure first defined in the original organic act, and reset the regular elections for the ARMM regional officials to the second Monday of September 2001. Congress passed the next law affecting ARMM RA No. 91401 - on June 22, 2001. This law reset the first regular elections originally scheduled under RA No. 9054, to November 26, 2001. It likewise set the plebiscite to ratify RA No. 9054 to not later than August 15, 2001. RA No. 9054 was ratified in a plebiscite held on August 14, 2001. The province of Basilan and Marawi City voted to join ARMM on the same date. RA No. 93332 was subsequently passed by Congress to reset the ARMM regional elections to the 2nd Monday of August 2005, and on the same date every 3 years thereafter. Unlike RA No. 6734 and RA No. 9054, RA No. 9333 was not ratified in a plebiscite. Pursuant to RA No. 9333, the next ARMM regional elections should have been held on August 8, 2011. COMELEC had begun preparations for these elections and had accepted certificates of candidacies for the various regional offices to be elected. But on June 30, 2011, RA No. 10153

was enacted, resetting the ARMM elections to May 2013, to coincide with the regular national and local elections of the country. RA No. 10153 originated in the House of Representatives as House Bill (HB) No. 4146, seeking the postponement of the ARMM elections scheduled on August 8, 2011. On March 22, 2011, the House of Representatives passed HB No. 4146, with one hundred ninety one (191) Members voting in its favor. After the Senate received HB No. 4146, it adopted its own version, Senate Bill No. 2756 (SB No. 2756), on June 6, 2011. Thirteen (13) Senators voted favorably for its passage. On June 7, 2011, the House of Representative concurred with the Senate amendments, and on June 30, 2011, the President signed RA No. 10153 into law. As mentioned, the early challenge to RA No. 10153 came through a petition filed with this Court G.R. No. 1962713 - assailing the constitutionality of both HB No. 4146 and SB No. 2756, and challenging the validity of RA No. 9333 as well for non-compliance with the constitutional plebiscite requirement. Thereafter, petitioner Basari Mapupuno in G.R. No. 196305 filed another petition4 also assailing the validity of RA No. 9333. With the enactment into law of RA No. 10153, the COMELEC stopped its preparations for the ARMM elections. The law gave rise as well to the filing of the following petitions against its constitutionality: a) Petition for Certiorari and Prohibition5 filed by Rep. Edcel Lagman as a member of the House of Representatives against Paquito Ochoa, Jr. (in his capacity as the Executive Secretary) and the COMELEC, docketed as G.R. No. 197221; b) Petition for Mandamus and Prohibition6 filed by Atty. Romulo Macalintal as a taxpayer against the COMELEC, docketed as G.R. No. 197282; c) Petition for Certiorari and Mandamus, Injunction and Preliminary Injunction7 filed by Louis "Barok" Biraogo against the COMELEC and Executive Secretary Paquito N. Ochoa, Jr., docketed as G.R. No. 197392; and d) Petition for Certiorari and Mandamus8 filed by Jacinto Paras as a member of the House of Representatives against Executive Secretary Paquito Ochoa, Jr. and the COMELEC, docketed as G.R. No. 197454. Petitioners Alamarim Centi Tillah and Datu Casan Conding Cana as registered voters from the ARMM, with the Partido Demokratiko Pilipino Lakas ng Bayan (a political party with candidates in the ARMM regional elections scheduled for August 8, 2011), also filed a Petition for Prohibition and Mandamus9 against the COMELEC, docketed as G.R. No. 197280, to assail the constitutionality of RA No. 9140, RA No. 9333 and RA No. 10153. Subsequently, Anak Mindanao Party-List, Minority Rights Forum Philippines, Inc. and Bangsamoro Solidarity Movement filed their own Motion for Leave to Admit their Motion for Intervention and Comment-in-Intervention dated July 18, 2011. On July 26, 2011, the Court granted the motion. In the same Resolution, the Court ordered the consolidation of all the petitions relating to the constitutionality of HB No. 4146, SB No. 2756, RA No. 9333, and RA No. 10153.

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Oral arguments were held on August 9, 2011 and August 16, 2011. Thereafter, the parties were instructed to submit their respective memoranda within twenty (20) days. On September 13, 2011, the Court issued a temporary restraining order enjoining the implementation of RA No. 10153 and ordering the incumbent elective officials of ARMM to continue to perform their functions should these cases not be decided by the end of their term on September 30, 2011. The Arguments

IV. Whether RA No. 10153 violates the autonomy granted to the ARMM V. Whether the grant of the power to appoint OICs violates: A. Section 15, Article X of the 1987 Constitution B. Section 16, Article X of the 1987 Constitution C. Section 18, Article X of the 1987 Constitution

The petitioners assailing RA No. 9140, RA No. 9333 and RA No. 10153 assert that these laws amend RA No. 9054 and thus, have to comply with the supermajority vote and plebiscite requirements prescribed under Sections 1 and 3, Article XVII of RA No. 9094 in order to become effective. The petitions assailing RA No. 10153 further maintain that it is unconstitutional for its failure to comply with the three-reading requirement of Section 26(2), Article VI of the Constitution. Also cited as grounds are the alleged violations of the right of suffrage of the people of ARMM, as well as the failure to adhere to the "elective and representative" character of the executive and legislative departments of the ARMM. Lastly, the petitioners challenged the grant to the President of the power to appoint OICs to undertake the functions of the elective ARMM officials until the officials elected under the May 2013 regular elections shall have assumed office. Corrolarily, they also argue that the power of appointment also gave the President the power of control over the ARMM, in complete violation of Section 16, Article X of the Constitution. The Issues From the parties submissions, the following issues were recognized and argued by the parties in the oral arguments of August 9 and 16, 2011: I. Whether the 1987 Constitution mandates the synchronization of elections II. Whether the passage of RA No. 10153 violates Section 26(2), Article VI of the 1987 Constitution III. Whether the passage of RA No. 10153 requires a supermajority vote and plebiscite A. Does the postponement of the ARMM regular elections constitute an amendment to Section 7, Article XVIII of RA No. 9054? B. Does the requirement of a supermajority vote for amendments or revisions to RA No. 9054 violate Section 1 and Section 16(2), Article VI of the 1987 Constitution and the corollary doctrine on irrepealable laws? C. Does the requirement of a plebiscite apply only in the creation of autonomous regions under paragraph 2, Section 18, Article X of the 1987 Constitution?

VI. Whether the proposal to hold special elections is constitutional and legal. We shall discuss these issues in the order they are presented above. OUR RULING We resolve to DISMISS the petitions and thereby UPHOLD the constitutionality of RA No. 10153 in toto. I. Synchronization as a recognized constitutional mandate The respondent Office of the Solicitor General (OSG) argues that the Constitution mandates synchronization, and in support of this position, cites Sections 1, 2 and 5, Article XVIII (Transitory Provisions) of the 1987 Constitution, which provides: Section 1. The first elections of Members of the Congress under this Constitution shall be held on the second Monday of May, 1987. The first local elections shall be held on a date to be determined by the President, which may be simultaneous with the election of the Members of the Congress. It shall include the election of all Members of the city or municipal councils in the Metropolitan Manila area. Section 2. The Senators, Members of the House of Representatives and the local officials first elected under this Constitution shall serve until noon of June 30, 1992. Of the Senators elected in the election in 1992, the first twelve obtaining the highest number of votes shall serve for six year and the remaining twelve for three years. xxx Section 5. The six-year term of the incumbent President and Vice President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992. The first regular elections for President and Vice-President under this Constitution shall be held on the second Monday of May, 1992.

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We agree with this position. While the Constitution does not expressly state that Congress has to synchronize national and local elections, the clear intent towards this objective can be gleaned from the Transitory Provisions (Article XVIII) of the Constitution,10 which show the extent to which the Constitutional Commission, by deliberately making adjustments to the terms of the incumbent officials, sought to attain synchronization of elections.11 The objective behind setting a common termination date for all elective officials, done among others through the shortening the terms of the twelve winning senators with the least number of votes, is to synchronize the holding of all future elections whether national or local to once every three years.12 This intention finds full support in the discussions during the Constitutional Commission deliberations.13 These Constitutional Commission exchanges, read with the provisions of the Transitory Provisions of the Constitution, all serve as patent indicators of the constitutional mandate to hold synchronized national and local elections, starting the second Monday of May, 1992 and for all the following elections. This Court was not left behind in recognizing the synchronization of the national and local elections as a constitutional mandate. In Osmea v. Commission on Elections,14 we explained: It is clear from the aforequoted provisions of the 1987 Constitution that the terms of office of Senators, Members of the House of Representatives, the local officials, the President and the Vice-President have been synchronized to end on the same hour, date and year noon of June 30, 1992. It is likewise evident from the wording of the above-mentioned Sections that the term of synchronization is used synonymously as the phrase holding simultaneously since this is the precise intent in terminating their Office Tenure on the same day or occasion. This common termination date will synchronize future elections to once every three years (Bernas, the Constitution of the Republic of the Philippines, Vol. II, p. 605). That the election for Senators, Members of the House of Representatives and the local officials (under Sec. 2, Art. XVIII) will have to be synchronized with the election for President and Vice President (under Sec. 5, Art. XVIII) is likewise evident from the x x x records of the proceedings in the Constitutional Commission. [Emphasis supplied.] Although called regional elections, the ARMM elections should be included among the elections to be synchronized as it is a "local" election based on the wording and structure of the Constitution.1avvphil

Understood in its ordinary sense, the word "local" refers to something that primarily serves the needs of a particular limited district, often a community or minor political subdivision. 17 Regional elections in the ARMM for the positions of governor, vice-governor and regional assembly representatives obviously fall within this classification, since they pertain to the elected officials who will serve within the limited region of ARMM. From the perspective of the Constitution, autonomous regions are considered one of the forms of local governments, as evident from Article X of the Constitution entitled "Local Government." Autonomous regions are established and discussed under Sections 15 to 21 of this Article the article wholly devoted to Local Government. That an autonomous region is considered a form of local government is also reflected in Section 1, Article X of the Constitution, which provides: Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao, and the Cordilleras as hereinafter provided. Thus, we find the contention that the synchronization mandated by the Constitution does not include the regional elections of the ARMM unmeritorious. We shall refer to synchronization in the course of our discussions below, as this concept permeates the consideration of the various issues posed in this case and must be recalled time and again for its complete resolution. II. The Presidents Certification on the Urgency of RA No. 10153 The petitioners in G.R. No. 197280 also challenge the validity of RA No. 10153 for its alleged failure to comply with Section 26(2), Article VI of the Constitution18 which provides that before bills passed by either the House or the Senate can become laws, they must pass through three readings on separate days. The exception is when the President certifies to the necessity of the bills immediate enactment. The Court, in Tolentino v. Secretary of Finance,19 explained the effect of the Presidents certification of necessity in the following manner: The presidential certification dispensed with the requirement not only of printing but also that of reading the bill on separate days. The phrase "except when the President certifies to the necessity of its immediate enactment, etc." in Art. VI, Section 26[2] qualifies the two stated conditions before a bill can become a law: [i] the bill has passed three readings on separate days and [ii] it has been printed in its final form and distributed three days before it is finally approved. xxx

That upon the certification of a bill by the President, the requirement of three readings on separate days and of printing and distribution can be dispensed with is supported by the weight of legislative A basic rule in constitutional construction is that the words used should be understood in the sense practice. For example, the bill defining the certiorari jurisdiction of this Court which, in consolidation that they have in common use and given their ordinary meaning, except when technical terms are with the Senate version, became Republic Act No. 5440, was passed on second and third employed, in which case the significance thus attached to them prevails. 15 As this Court explained readings in the House of Representatives on the same day [May 14, 1968] after the bill had been in People v. Derilo,16 "[a]s the Constitution is not primarily a lawyers document, its language certified by the President as urgent. should be understood in the sense that it may have in common. Its words should be given their ordinary meaning except where technical terms are employed." In the present case, the records show that the President wrote to the Speaker of the House of Representatives to certify the necessity of the immediate enactment of a law synchronizing the

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ARMM elections with the national and local elections.20 Following our Tolentino ruling, the Presidents certification exempted both the House and the Senate from having to comply with the three separate readings requirement. On the follow-up contention that no necessity existed for the immediate enactment of these bills since there was no public calamity or emergency that had to be met, again we hark back to our ruling in Tolentino: The sufficiency of the factual basis of the suspension of the writ of habeas corpus or declaration of martial law Art. VII, Section 18, or the existence of a national emergency justifying the delegation of extraordinary powers to the President under Art. VI, Section 23(2) is subject to judicial review because basic rights of individuals may be of hazard. But the factual basis of presidential certification of bills, which involves doing away with procedural requirements designed to insure that bills are duly considered by members of Congress, certainly should elicit a different standard of review. [Emphasis supplied.]

Section 3. Any amendment to or revision of this Organic Act shall become effective only when approved by a majority of the vote cast in a plebiscite called for the purpose, which shall be held not earlier than sixty (60) days or later than ninety (90) days after the approval of such amendment or revision. We find no merit in this contention. In the first place, neither RA No. 9333 nor RA No. 10153 amends RA No. 9054. As an examination of these laws will show, RA No. 9054 only provides for the schedule of the first ARMM elections and does not fix the date of the regular elections. A need therefore existed for the Congress to fix the date of the subsequent ARMM regular elections, which it did by enacting RA No. 9333 and thereafter, RA No. 10153. Obviously, these subsequent laws RA No. 9333 and RA No. 10153 cannot be considered amendments to RA No. 9054 as they did not change or revise any provision in the latter law; they merely filled in a gap in RA No. 9054 or supplemented the law by providing the date of the subsequent regular elections.

The House of Representatives and the Senate in the exercise of their legislative discretion This view that Congress thought it best to leave the determination of the date of succeeding gave full recognition to the Presidents certification and promptly enacted RA No. 10153. Under the ARMM elections to legislative discretion finds support in ARMMs recent history. circumstances, nothing short of grave abuse of discretion on the part of the two houses of Congress can justify our intrusion under our power of judicial review. 21 To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM elections. The First Organic Act RA No. 6734 not only did not fix the date of the subsequent elections; it did not The petitioners, however, failed to provide us with any cause or justification for this course of even fix the specific date of the first ARMM elections,24 leaving the date to be fixed in another action. Hence, while the judicial department and this Court are not bound by the acceptance of the legislative enactment. Consequently, RA No. 7647,25 RA No. 8176,26 RA No. 8746,27 RA No. President's certification by both the House of Representatives and the Senate, prudent exercise of 8753,28 and RA No. 901229 were all enacted by Congress to fix the dates of the ARMM elections. our powers and respect due our co-equal branches of government in matters committed to them Since these laws did not change or modify any part or provision of RA No. 6734, they were not by the Constitution, caution a stay of the judicial hand.22 amendments to this latter law. Consequently, there was no need to submit them to any plebiscite for ratification. In any case, despite the Presidents certification, the two-fold purpose that underlies the requirement for three readings on separate days of every bill must always be observed to enable our legislators and other parties interested in pending bills to intelligently respond to them. Specifically, the purpose with respect to Members of Congress is: (1) to inform the legislators of the matters they shall vote on and (2) to give them notice that a measure is in progress through the enactment process.23 We find, based on the records of the deliberations on the law, that both advocates and the opponents of the proposed measure had sufficient opportunities to present their views. In this light, no reason exists to nullify RA No. 10153 on the cited ground. III. A. RA No. 9333 and RA No. 10153 are not amendments to RA No. 9054 The effectivity of RA No. 9333 and RA No. 10153 has also been challenged because they did not comply with Sections 1 and 3, Article XVII of RA No. 9054 in amending this law. These provisions require: Section 1. Consistent with the provisions of the Constitution, this Organic Act may be reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3) of the Members of the House of Representatives and of the Senate voting separately. The Second Organic Act RA No. 9054 which lapsed into law on March 31, 2001, provided that the first elections would be held on the second Monday of September 2001. Thereafter, Congress passed RA No. 914030to reset the date of the ARMM elections. Significantly, while RA No. 9140 also scheduled the plebiscite for the ratification of the Second Organic Act (RA No. 9054), the new date of the ARMM regional elections fixed in RA No. 9140 was not among the provisions ratified in the plebiscite held to approve RA No. 9054. Thereafter, Congress passed RA No. 9333, 31 which further reset the date of the ARMM regional elections. Again, this law was not ratified through a plebiscite. From these legislative actions, we see the clear intention of Congress to treat the laws which fix the date of the subsequent ARMM elections as separate and distinct from the Organic Acts. Congress only acted consistently with this intent when it passed RA No. 10153 without requiring compliance with the amendment prerequisites embodied in Section 1 and Section 3, Article XVII of RA No. 9054. III. B. Supermajority voting requirement unconstitutional for giving RA No. 9054 the character of an irrepealable law Even assuming that RA No. 9333 and RA No. 10153 did in fact amend RA No. 9054, the supermajority (2/3) voting requirement required under Section 1, Article XVII of RA No. 905432 has to be struck down for giving RA No. 9054 the character of an irrepealable law by requiring more than what the Constitution demands.

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Section 16(2), Article VI of the Constitution provides that a "majority of each House shall constitute a quorum to do business." In other words, as long as majority of the members of the House of Representatives or the Senate are present, these bodies have the quorum needed to conduct business and hold session. Within a quorum, a vote of majority is generally sufficient to enact laws or approve acts. In contrast, Section 1, Article XVII of RA No. 9054 requires a vote of no less than two-thirds (2/3) of the Members of the House of Representatives and of the Senate, voting separately, in order to effectively amend RA No. 9054. Clearly, this 2/3 voting requirement is higher than what the Constitution requires for the passage of bills, and served to restrain the plenary powers of Congress to amend, revise or repeal the laws it had passed. The Courts pronouncement in City of Davao v. GSIS33 on this subject best explains the basis and reason for the unconstitutionality: Moreover, it would be noxious anathema to democratic principles for a legislative body to have the ability to bind the actions of future legislative body, considering that both assemblies are regarded with equal footing, exercising as they do the same plenary powers. Perpetual infallibility is not one of the attributes desired in a legislative body, and a legislature which attempts to forestall future amendments or repeals of its enactments labors under delusions of omniscience. xxx

terms of the Constitution and the obvious absurdity that would result if a plebiscite were to be required for every statutory amendment. Section 18, Article X of the Constitution plainly states that "The creation of the autonomous region shall be effective when approved by the majority of the votes case by the constituent units in a plebiscite called for the purpose." With these wordings as standard, we interpret the requirement to mean that only amendments to, or revisions of, the Organic Act constitutionally-essential to the creation of autonomous regions i.e., those aspects specifically mentioned in the Constitution which Congress must provide for in the Organic Act require ratification through a plebiscite. These amendments to the Organic Act are those that relate to: (a) the basic structure of the regional government; (b) the regions judicial system, i.e., the special courts with personal, family, and property law jurisdiction; and, (c) the grant and extent of the legislative powers constitutionally conceded to the regional government under Section 20, Article X of the Constitution. 36 The date of the ARMM elections does not fall under any of the matters that the Constitution specifically mandated Congress to provide for in the Organic Act. Therefore, even assuming that the supermajority votes and the plebiscite requirements are valid, any change in the date of elections cannot be construed as a substantial amendment of the Organic Act that would require compliance with these requirements. IV. The synchronization issue

A state legislature has a plenary law-making power over all subjects, whether pertaining to persons or things, within its territorial jurisdiction, either to introduce new laws or repeal the old, unless prohibited expressly or by implication by the federal constitution or limited or restrained by its own. It cannot bind itself or its successors by enacting irrepealable laws except when so restrained. Every legislative body may modify or abolish the acts passed by itself or its predecessors. This power of repeal may be exercised at the same session at which the original act was passed; and even while a bill is in its progress and before it becomes a law. This legislature cannot bind a future legislature to a particular mode of repeal. It cannot declare in advance the intent of subsequent legislatures or the effect of subsequent legislation upon existing statutes.34 (Emphasis ours.) Thus, while a supermajority is not a total ban against a repeal, it is a limitation in excess of what the Constitution requires on the passage of bills and is constitutionally obnoxious because it significantly constricts the future legislators room for action and flexibility. III. C. Section 3, Article XVII of RA No. 9054 excessively enlarged the plebiscite requirement found in Section 18, Article X of the Constitution

As we discussed above, synchronization of national and local elections is a constitutional mandate that Congress must provide for and this synchronization must include the ARMM elections. On this point, an existing law in fact already exists RA No. 7166 as the forerunner of the current RA No. 10153. RA No. 7166 already provides for the synchronization of local elections with the national and congressional elections. Thus, what RA No. 10153 provides is an old matter for local governments (with the exception of barangay and Sanggunian Kabataan elections where the terms are not constitutionally provided) and is technically a reiteration of what is already reflected in the law, given that regional elections are in reality local elections by express constitutional recognition.37 To achieve synchronization, Congress necessarily has to reconcile the schedule of the ARMMs regular elections (which should have been held in August 2011 based on RA No. 9333) with the fixed schedule of the national and local elections (fixed by RA No. 7166 to be held in May 2013).

During the oral arguments, the Court identified the three options open to Congress in order to resolve this problem. These options are: (1) to allow the elective officials in the ARMM to remain in office in a hold over capacity, pursuant to Section 7(1), Article VII of RA No. 9054, until those elected in the synchronized elections assume office;38 (2) to hold special elections in the ARMM, The requirements of RA No. 9054 not only required an unwarranted supermajority, but enlarged as with the terms of those elected to expire when those elected in the synchronized elections assume well the plebiscite requirement, as embodied in its Section 3, Article XVII of that Act. As we did on office; or (3) to authorize the President to appoint OICs, pursuant to Section 3 of RA No. 10153, the supermajority requirement, we find the enlargement of the plebiscite requirement required also until those elected in the synchronized elections assume office. under Section 18, Article X of the Constitution to be excessive to point of absurdity and, hence, a violation of the Constitution. As will be abundantly clear in the discussion below, Congress, in choosing to grant the President the power to appoint OICs, chose the correct option and passed RA No. 10153 as a completely Section 18, Article X of the Constitution states that the plebiscite is required only for the creation of valid law. autonomous regions and for determining which provinces, cities and geographic areas will be included in the autonomous regions. While the settled rule is that amendments to the Organic Act have to comply with the plebiscite requirement in order to become effective, 35 questions on the V. The Constitutionality of RA No. 10153 extent of the matters requiring ratification may unavoidably arise because of the seemingly general

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A. Basic Underlying Premises To fully appreciate the available options, certain underlying material premises must be fully understood. The first is the extent of the powers of Congress to legislate; the second is the constitutional mandate for the synchronization of elections; and the third is on the concept of autonomy as recognized and established under the 1987 Constitution. The grant of legislative power to Congress is broad, general and comprehensive. 39 The legislative body possesses plenary power for all purposes of civil government. 40 Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere.41 Except as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects and extends to all matters of general concern or common interest.42 The constitutional limitations on legislative power are either express or implied. The express limitations are generally provided in some provisions of the Declaration of Principles and State Policies (Article 2) and in the provisions Bill of Rights (Article 3). Other constitutional provisions (such as the initiative and referendum clause of Article 6, Sections 1 and 32, and the autonomy provisions of Article X) provide their own express limitations. The implied limitations are found "in the evident purpose which was in view and the circumstances and historical events which led to the enactment of the particular provision as a part of organic law."43 The constitutional provisions on autonomy specifically, Sections 15 to 21 of Article X of the Constitution constitute express limitations on legislative power as they define autonomy, its requirements and its parameters, thus limiting what is otherwise the unlimited power of Congress to legislate on the governance of the autonomous region. Of particular relevance to the issues of the present case are the limitations posed by the prescribed basic structure of government i.e., that the government must have an executive department and a legislative assembly, both of which must be elective and representative of the constituent political units; national government, too, must not encroach on the legislative powers granted under Section 20, Article X. Conversely and as expressly reflected in Section 17, Article X, "all powers and functions not granted by this Constitution or by law to the autonomous regions shall be vested in the National Government." The totality of Sections 15 to 21 of Article X should likewise serve as a standard that Congress must observe in dealing with legislation touching on the affairs of the autonomous regions. The terms of these sections leave no doubt on what the Constitution intends the idea of self-rule or self-government, in particular, the power to legislate on a wide array of social, economic and administrative matters. But equally clear under these provisions are the permeating principles of national sovereignty and the territorial integrity of the Republic, as expressed in the above-quoted Section 17 and in Section 15.44 In other words, the Constitution and the supporting jurisprudence, as they now stand, reject the notion of imperium et imperio45 in the relationship between the national and the regional governments.

These underlying basic concepts characterize the powers and limitations of Congress when it acted on RA No. 10153. To succinctly describe the legal situation that faced Congress then, its decision to synchronize the regional elections with the national, congressional and all other local elections (save for barangay and sangguniang kabataan elections) left it with the problem of how to provide the ARMM with governance in the intervening period between the expiration of the term of those elected in August 2008 and the assumption to office twenty-one (21) months away of those who will win in the synchronized elections on May 13, 2013. The problem, in other words, was for interim measures for this period, consistent with the terms of the Constitution and its established supporting jurisprudence, and with the respect due to the concept of autonomy. Interim measures, to be sure, is not a strange phenomenon in the Philippine legal landscape. The Constitutions Transitory Provisions themselves collectively provide measures for transition from the old constitution to the new46and for the introduction of new concepts.47 As previously mentioned, the adjustment of elective terms and of elections towards the goal of synchronization first transpired under the Transitory Provisions. The adjustments, however, failed to look far enough or deeply enough, particularly into the problems that synchronizing regional autonomous elections would entail; thus, the present problem is with us today. The creation of local government units also represents instances when interim measures are required. In the creation of Quezon del Sur48 and Dinagat Islands,49 the creating statutes authorized the President to appoint an interim governor, vice-governor and members of the sangguniang panlalawigan although these positions are essentially elective in character; the appointive officials were to serve until a new set of provincial officials shall have been elected and qualified.50 A similar authority to appoint is provided in the transition of a local government from a sub-province to a province.51 In all these, the need for interim measures is dictated by necessity; out-of-the-way arrangements and approaches were adopted or used in order to adjust to the goal or objective in sight in a manner that does not do violence to the Constitution and to reasonably accepted norms. Under these limitations, the choice of measures was a question of wisdom left to congressional discretion. To return to the underlying basic concepts, these concepts shall serve as the guideposts and markers in our discussion of the options available to Congress to address the problems brought about by the synchronization of the ARMM elections, properly understood as interim measures that Congress had to provide. The proper understanding of the options as interim measures assume prime materiality as it is under these terms that the passage of RA No. 10153 should be measured, i.e., given the constitutional objective of synchronization that cannot legally be faulted, did Congress gravely abuse its discretion or violate the Constitution when it addressed through RA No. 10153 the concomitant problems that the adjustment of elections necessarily brought with it? B. Holdover Option is Unconstitutional We rule out the first option holdover for those who were elected in executive and legislative positions in the ARMM during the 2008-2011 term as an option that Congress could have chosen because a holdover violates Section 8, Article X of the Constitution. This provision states:

In relation with synchronization, both autonomy and the synchronization of national and local elections are recognized and established constitutional mandates, with one being as compelling as the other. If their compelling force differs at all, the difference is in their coverage; synchronization Section 8. The term of office of elective local officials, except barangay officials, which shall be operates on and affects the whole country, while regional autonomy as the term suggests determined by law, shall be three years and no such official shall serve for more than three directly carries a narrower regional effect although its national effect cannot be discounted. consecutive terms. [emphases ours]

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Since elective ARMM officials are local officials, they are covered and bound by the three-year term limit prescribed by the Constitution; they cannot extend their term through a holdover. As this Court put in Osmea v. COMELEC:52 It is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term and when the Constitution fixes the day on which the official term shall begin, there is no legislative authority to continue the office beyond that period, even though the successors fail to qualify within the time. In American Jurisprudence it has been stated as follows: "It has been broadly stated that the legislature cannot, by an act postponing the election to fill an office the term of which is limited by the Constitution, extend the term of the incumbent beyond the period as limited by the Constitution." [Emphasis ours.] Independently of the Osmea ruling, the primacy of the Constitution as the supreme law of the land dictates that where the Constitution has itself made a determination or given its mandate, then the matters so determined or mandated should be respected until the Constitution itself is changed by amendment or repeal through the applicable constitutional process. A necessary corollary is that none of the three branches of government can deviate from the constitutional mandate except only as the Constitution itself may allow.53 If at all, Congress may only pass legislation filing in details to fully operationalize the constitutional command or to implement it by legislation if it is non-self-executing; this Court, on the other hand, may only interpret the mandate if an interpretation is appropriate and called for.54 In the case of the terms of local officials, their term has been fixed clearly and unequivocally, allowing no room for any implementing legislation with respect to the fixed term itself and no vagueness that would allow an interpretation from this Court. Thus, the term of three years for local officials should stay at three (3) years as fixed by the Constitution and cannot be extended by holdover by Congress. If it will be claimed that the holdover period is effectively another term mandated by Congress, the net result is for Congress to create a new term and to appoint the occupant for the new term. This view like the extension of the elective term is constitutionally infirm because Congress cannot do indirectly what it cannot do directly, i.e., to act in a way that would effectively extend the term of the incumbents. Indeed, if acts that cannot be legally done directly can be done indirectly, then all laws would be illusory.55 Congress cannot also create a new term and effectively appoint the occupant of the position for the new term. This is effectively an act of appointment by Congress and an unconstitutional intrusion into the constitutional appointment power of the President.56 Hence, holdover whichever way it is viewed is a constitutionally infirm option that Congress could not have undertaken. Jurisprudence, of course, is not without examples of cases where the question of holdover was brought before, and given the imprimatur of approval by, this Court. The present case though differs significantly from past cases with contrary rulings, particularly from Sambarani v. COMELEC,57 Adap v. Comelec,58 and Montesclaros v. Comelec,59 where the Court ruled that the elective officials could hold on to their positions in a hold over capacity.

All these past cases refer to elective barangay or sangguniang kabataan officials whose terms of office are not explicitly provided for in the Constitution; the present case, on the other hand, refers to local elective officials the ARMM Governor, the ARMM Vice-Governor, and the members of the Regional Legislative Assembly whose terms fall within the three-year term limit set by Section 8, Article X of the Constitution. Because of their constitutionally limited term, Congress cannot legislate an extension beyond the term for which they were originally elected. Even assuming that holdover is constitutionally permissible, and there had been statutory basis for it (namely Section 7, Article VII of RA No. 9054) in the past,60 we have to remember that the rule of holdover can only apply as an available option where no express or implied legislative intent to the contrary exists; it cannot apply where such contrary intent is evident.61 Congress, in passing RA No. 10153, made it explicitly clear that it had the intention of suppressing the holdover rule that prevailed under RA No. 9054 by completely removing this provision. The deletion is a policy decision that is wholly within the discretion of Congress to make in the exercise of its plenary legislative powers; this Court cannot pass upon questions of wisdom, justice or expediency of legislation,62 except where an attendant unconstitutionality or grave abuse of discretion results. C. The COMELEC has no authority to order special elections Another option proposed by the petitioner in G.R. No. 197282 is for this Court to compel COMELEC to immediately conduct special elections pursuant to Section 5 and 6 of Batas Pambansa Bilang (BP) 881. The power to fix the date of elections is essentially legislative in nature, as evident from, and exemplified by, the following provisions of the Constitution: Section 8, Article VI, applicable to the legislature, provides: Section 8. Unless otherwise provided by law, the regular election of the Senators and the Members of the House of Representatives shall be held on the second Monday of May. [Emphasis ours] Section 4(3), Article VII, with the same tenor but applicable solely to the President and VicePresident, states: xxxx Section 4. xxx Unless otherwise provided by law, the regular election for President and VicePresident shall be held on the second Monday of May. [Emphasis ours] while Section 3, Article X, on local government, provides: Section 3. The Congress shall enact a local government code which shall provide for xxx the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials[.] [Emphases ours]

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These provisions support the conclusion that no elections may be held on any other date for the positions of President, Vice President, Members of Congress and local officials, except when so provided by another Act of Congress, or upon orders of a body or officer to whom Congress may have delegated either the power or the authority to ascertain or fill in the details in the execution of that power.63 Notably, Congress has acted on the ARMM elections by postponing the scheduled August 2011 elections and setting another date May 13, 2011 for regional elections synchronized with the presidential, congressional and other local elections. By so doing, Congress itself has made a policy decision in the exercise of its legislative wisdom that it shall not call special elections as an adjustment measure in synchronizing the ARMM elections with the other elections. After Congress has so acted, neither the Executive nor the Judiciary can act to the contrary by ordering special elections instead at the call of the COMELEC. This Court, particularly, cannot make this call without thereby supplanting the legislative decision and effectively legislating. To be sure, the Court is not without the power to declare an act of Congress null and void for being unconstitutional or for having been exercised in grave abuse of discretion. 64 But our power rests on very narrow ground and is merely to annul a contravening act of Congress; it is not to supplant the decision of Congress nor to mandate what Congress itself should have done in the exercise of its legislative powers. Thus, contrary to what the petition in G.R. No. 197282 urges, we cannot compel COMELEC to call for special elections. Furthermore, we have to bear in mind that the constitutional power of the COMELEC, in contrast with the power of Congress to call for, and to set the date of, elections, is limited to enforcing and administering all laws and regulations relative to the conduct of an election. 65 Statutorily, COMELEC has no power to call for the holding of special elections unless pursuant to a specific statutory grant. True, Congress did grant, via Sections 5 and 6 of BP 881, COMELEC with the power to postpone elections to another date. However, this power is limited to, and can only be exercised within, the specific terms and circumstances provided for in the law. We quote: Section 5. Postponement of election. - When for any serious cause such as violence, terrorism, loss or destruction of election paraphernalia or records, force majeure, and other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision, the Commission, motu proprio or upon a verified petition by any interested party, and after due notice and hearing, whereby all interested parties are afforded equal opportunity to be heard, shall postpone the election therein to a date which should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause for such postponement or suspension of the election or failure to elect. Section 6. Failure of election. - If, on account of force majeure, violence, terrorism, fraud, or other analogous causes the election in any polling place has not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect, and in any of such cases the failure or suspension of election would affect the result of the election, the Commission shall, on the basis of a verified petition by any interested party and after due notice and hearing, call for the holding or continuation of the election not held, suspended or which resulted in a failure to elect on a date reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause of such postponement or suspension of the election or failure to elect. [Emphasis ours]

A close reading of Section 5 of BP 881 reveals that it is meant to address instances where elections have already been scheduled to take place but have to be postponed because of (a) violence, (b) terrorism, (c) loss or destruction of election paraphernalia or records, (d) force majeure, and (e) other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision. Under the principle of ejusdem generis, the term "analogous causes" will be restricted to those unforeseen or unexpected events that prevent the holding of the scheduled elections. These "analogous causes" are further defined by the phrase "of such nature that the holding of a free, orderly and honest election should become impossible." Similarly, Section 6 of BP 881 applies only to those situations where elections have already been scheduled but do not take place because of (a) force majeure, (b) violence, (c) terrorism, (d) fraud, or (e) other analogous causes the election in any polling place has not been held on the date fixed, or had been suspendedbefore the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect. As in Section 5 of BP 881, Section 6 addresses instances where the elections do not occur or had to be suspended because of unexpected and unforeseen circumstances. In the present case, the postponement of the ARMM elections is by law i.e., by congressional policy and is pursuant to the constitutional mandate of synchronization of national and local elections. By no stretch of the imagination can these reasons be given the same character as the circumstances contemplated by Section 5 or Section 6 of BP 881, which all pertain to extralegal causes that obstruct the holding of elections. Courts, to be sure, cannot enlarge the scope of a statute under the guise of interpretation, nor include situations not provided nor intended by the lawmakers.66 Clearly, neither Section 5 nor Section 6 of BP 881 can apply to the present case and this Court has absolutely no legal basis to compel the COMELEC to hold special elections. D. The Court has no power to shorten the terms of elective officials Even assuming that it is legally permissible for the Court to compel the COMELEC to hold special elections, no legal basis likewise exists to rule that the newly elected ARMM officials shall hold office only until the ARMM officials elected in the synchronized elections shall have assumed office. In the first place, the Court is not empowered to adjust the terms of elective officials. Based on the Constitution, the power to fix the term of office of elective officials, which can be exercised only in the case of barangay officials,67 is specifically given to Congress. Even Congress itself may be denied such power, as shown when the Constitution shortened the terms of twelve Senators obtaining the least votes,68 and extended the terms of the President and the Vice-President69 in order to synchronize elections; Congress was not granted this same power. The settled rule is that terms fixed by the Constitution cannot be changed by mere statute.70 More particularly, not even Congress and certainly not this Court, has the authority to fix the terms of elective local officials in the ARMM for less, or more, than the constitutionally mandated three years71 as this tinkering would directly contravene Section 8, Article X of the Constitution as we ruled in Osmena. Thus, in the same way that the term of elective ARMM officials cannot be extended through a holdover, the term cannot be shortened by putting an expiration date earlier than the three (3) years that the Constitution itself commands. This is what will happen a term of less than two years if a call for special elections shall prevail. In sum, while synchronization is achieved, the result is at the cost of a violation of an express provision of the Constitution.

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Neither we nor Congress can opt to shorten the tenure of those officials to be elected in the ARMM elections instead of acting on their term (where the "term" means the time during which the officer may claim to hold office as of right and fixes the interval after which the several incumbents shall succeed one another, while the "tenure" represents the term during which the incumbent actually holds the office).72 As with the fixing of the elective term, neither Congress nor the Court has any legal basis to shorten the tenure of elective ARMM officials. They would commit an unconstitutional act and gravely abuse their discretion if they do so. E. The Presidents Power to Appoint OICs The above considerations leave only Congress chosen interim measure RA No. 10153 and the appointment by the President of OICs to govern the ARMM during the pre-synchronization period pursuant to Sections 3, 4 and 5 of this law as the only measure that Congress can make. This choice itself, however, should be examined for any attendant constitutional infirmity. At the outset, the power to appoint is essentially executive in nature, and the limitations on or qualifications to the exercise of this power should be strictly construed; these limitations or qualifications must be clearly stated in order to be recognized. 73 The appointing power is embodied in Section 16, Article VII of the Constitution, which states: Section 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the executive departments, ambassadors, other public ministers and consuls or officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in him in this Constitution. He shall also appoint all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint. The Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the heads of departments, agencies, commissions, or boards. [emphasis ours] This provision classifies into four groups the officers that the President can appoint. These are:

legislative officials to be "elective and representative of the constituent political units." This requirement indeed is an express limitation whose non-observance in the assailed law leaves the appointment of OICs constitutionally defective. After fully examining the issue, we hold that this alleged constitutional problem is more apparent than real and becomes very real only if RA No. 10153 were to be mistakenly read as a law that changes the elective and representative character of ARMM positions. RA No. 10153, however, does not in any way amend what the organic law of the ARMM (RA No. 9054) sets outs in terms of structure of governance. What RA No. 10153 in fact only does is to "appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office." This power is far different from appointing elective ARMM officials for the abbreviated term ending on the assumption to office of the officials elected in the May 2013 elections. As we have already established in our discussion of the supermajority and plebiscite requirements, the legal reality is that RA No. 10153 did not amend RA No. 9054. RA No. 10153, in fact, provides only for synchronization of elections and for the interim measures that must in the meanwhile prevail. And this is how RA No. 10153 should be read in the manner it was written and based on its unambiguous facial terms.75 Aside from its order for synchronization, it is purely and simply an interim measure responding to the adjustments that the synchronization requires. Thus, the appropriate question to ask is whether the interim measure is an unreasonable move for Congress to adopt, given the legal situation that the synchronization unavoidably brought with it. In more concrete terms and based on the above considerations, given the plain unconstitutionality of providing for a holdover and the unavailability of constitutional possibilities for lengthening or shortening the term of the elected ARMM officials, is the choice of the Presidents power to appoint for a fixed and specific period as an interim measure, and as allowed under Section 16, Article VII of the Constitution an unconstitutional or unreasonable choice for Congress to make?

Admittedly, the grant of the power to the President under other situations or where the power of appointment would extend beyond the adjustment period for synchronization would be to foster a government that is not "democratic and republican." For then, the peoples right to choose the First, the heads of the executive departments; ambassadors; other public ministers and consuls; officers of the Armed Forces of the Philippines, from the rank of colonel or naval captain; and other leaders to govern them may be said to be systemically withdrawn to the point of fostering an undemocratic regime. This is the grant that would frontally breach the "elective and representative" officers whose appointments are vested in the President in this Constitution; governance requirement of Section 18, Article X of the Constitution. Second, all other officers of the government whose appointments are not otherwise provided for by But this conclusion would not be true under the very limited circumstances contemplated in RA No. law; 10153 where the period is fixed and, more importantly, the terms of governance both under Section 18, Article X of the Constitution and RA No. 9054 will not systemically be touched nor Third, those whom the President may be authorized by law to appoint; and affected at all. To repeat what has previously been said, RA No. 9054 will govern unchanged and continuously, with full effect in accordance with the Constitution, save only for the interim and temporary measures that synchronization of elections requires. Fourth, officers lower in rank whose appointments the Congress may by law vest in the President alone.74 Viewed from another perspective, synchronization will temporarily disrupt the election process in a local community, the ARMM, as well as the communitys choice of leaders, but this will take place under a situation of necessity and as an interim measure in the manner that interim measures have been adopted and used in the creation of local government units 76 and the adjustments of sub-provinces to the status of provinces.77 These measures, too, are used in light of the wider national demand for the synchronization of elections (considered vis--vis the regional interests If at all, the gravest challenge posed by the petitions to the authority to appoint OICs under Section involved). The adoption of these measures, in other words, is no different from the exercise by 3 of RA No. 10153 is the assertion that the Constitution requires that the ARMM executive and Since the Presidents authority to appoint OICs emanates from RA No. 10153, it falls under the third group of officials that the President can appoint pursuant to Section 16, Article VII of the Constitution. Thus, the assailed law facially rests on clear constitutional basis.

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Congress of the inherent police power of the State, where one of the essential tests is the reasonableness of the interim measure taken in light of the given circumstances. Furthermore, the "representative" character of the chosen leaders need not necessarily be affected by the appointment of OICs as this requirement is really a function of the appointment process; only the "elective" aspect shall be supplanted by the appointment of OICs. In this regard, RA No. 10153 significantly seeks to address concerns arising from the appointments by providing, under Sections 3, 4 and 5 of the assailed law, concrete terms in the Appointment of OIC, the Manner and Procedure of Appointing OICs, and their Qualifications. Based on these considerations, we hold that RA No. 10153 viewed in its proper context is a law that is not violative of the Constitution (specifically, its autonomy provisions), and one that is reasonable as well under the circumstances. VI. Other Constitutional Concerns Outside of the above concerns, it has been argued during the oral arguments that upholding the constitutionality of RA No. 10153 would set a dangerous precedent of giving the President the power to cancel elections anywhere in the country, thus allowing him to replace elective officials with OICs. This claim apparently misunderstands that an across-the-board cancellation of elections is a matter for Congress, not for the President, to address. It is a power that falls within the powers of Congress in the exercise of its legislative powers. Even Congress, as discussed above, is limited in what it can legislatively undertake with respect to elections. If RA No. 10153 cancelled the regular August 2011 elections, it was for a very specific and limited purpose the synchronization of elections. It was a temporary means to a lasting end the synchronization of elections. Thus, RA No. 10153 and the support that the Court gives this legislation are likewise clear and specific, and cannot be transferred or applied to any other cause for the cancellation of elections. Any other localized cancellation of elections and call for special elections can occur only in accordance with the power already delegated by Congress to the COMELEC, as above discussed. Given that the incumbent ARMM elective officials cannot continue to act in a holdover capacity upon the expiration of their terms, and this Court cannot compel the COMELEC to conduct special elections, the Court now has to deal with the dilemma of a vacuum in governance in the ARMM. To emphasize the dire situation a vacuum brings, it should not be forgotten that a period of 21 months or close to 2 years intervenes from the time that the incumbent ARMM elective officials terms expired and the time the new ARMM elective officials begin their terms in 2013. As the lessons of our Mindanao history past and current teach us, many developments, some of them critical and adverse, can transpire in the countrys Muslim areas in this span of time in the way they transpired in the past.78 Thus, it would be reckless to assume that the presence of an acting ARMM Governor, an acting Vice-Governor and a fully functioning Regional Legislative Assembly can be done away with even temporarily. To our mind, the appointment of OICs under the present circumstances is an absolute necessity.

Significantly, the grant to the President of the power to appoint OICs to undertake the functions of the elective members of the Regional Legislative Assembly is neither novel nor innovative. We hark back to our earlier pronouncement in Menzon v. Petilla, etc., et al.: 79 It may be noted that under Commonwealth Act No. 588 and the Revised Administrative Code of 1987, the President is empowered to make temporary appointments in certain public offices, in case of any vacancy that may occur. Albeit both laws deal only with the filling of vacancies in appointive positions. However, in the absence of any contrary provision in the Local Government Code and in the best interest of public service, we see no cogent reason why the procedure thus outlined by the two laws may not be similarly applied in the present case. The respondents contend that the provincial board is the correct appointing power. This argument has no merit. As between the President who has supervision over local governments as provided by law and the members of the board who are junior to the vice-governor, we have no problem ruling in favor of the President, until the law provides otherwise. A vacancy creates an anomalous situation and finds no approbation under the law for it deprives the constituents of their right of representation and governance in their own local government. In a republican form of government, the majority rules through their chosen few, and if one of them is incapacitated or absent, etc., the management of governmental affairs is, to that extent, may be hampered. Necessarily, there will be a consequent delay in the delivery of basic services to the people of Leyte if the Governor or the Vice-Governor is missing.80 (Emphasis ours.) As in Menzon, leaving the positions of ARMM Governor, Vice Governor, and members of the Regional Legislative Assembly vacant for 21 months, or almost 2 years, would clearly cause disruptions and delays in the delivery of basic services to the people, in the proper management of the affairs of the regional government, and in responding to critical developments that may arise. When viewed in this context, allowing the President in the exercise of his constitutionallyrecognized appointment power to appoint OICs is, in our judgment, a reasonable measure to take. B. Autonomy in the ARMM It is further argued that while synchronization may be constitutionally mandated, it cannot be used to defeat or to impede the autonomy that the Constitution granted to the ARMM. Phrased in this manner, one would presume that there exists a conflict between two recognized Constitutional mandates synchronization and regional autonomy such that it is necessary to choose one over the other. We find this to be an erroneous approach that violates a basic principle in constitutional construction ut magis valeat quam pereat: that the Constitution is to be interpreted as a whole,81 and one mandate should not be given importance over the other except where the primacy of one over the other is clear.82 We refer to the Courts declaration in Ang-Angco v. Castillo, et al.,83 thus: A provision of the constitution should not be construed in isolation from the rest. Rather, the constitution must be interpreted as a whole, and apparently, conflicting provisions should be reconciled and harmonized in a manner that may give to all of them full force and effect. [Emphasis supplied.]

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Synchronization is an interest that is as constitutionally entrenched as regional autonomy. They are interests that this Court should reconcile and give effect to, in the way that Congress did in RA No. 10153 which provides the measure to transit to synchronized regional elections with the least disturbance on the interests that must be respected. Particularly, regional autonomy will be respected instead of being sidelined, as the law does not in any way alter, change or modify its governing features, except in a very temporary manner and only as necessitated by the attendant circumstances. Elsewhere, it has also been argued that the ARMM elections should not be synchronized with the national and local elections in order to maintain the autonomy of the ARMM and insulate its own electoral processes from the rough and tumble of nationwide and local elections. This argument leaves us far from convinced of its merits. As heretofore mentioned and discussed, while autonomous regions are granted political autonomy, the framers of the Constitution never equated autonomy with independence. The ARMM as a regional entity thus continues to operate within the larger framework of the State and is still subject to the national policies set by the national government, save only for those specific areas reserved by the Constitution for regional autonomous determination. As reflected during the constitutional deliberations of the provisions on autonomous regions: Mr. Bennagen. xxx We do not see here a complete separation from the central government, but rather an efficient working relationship between the autonomous region and the central government. We see this as an effective partnership, not a separation. Mr. Romulo. Therefore, complete autonomy is not really thought of as complete independence. Mr. Ople. We define it as a measure of self-government within the larger political framework of the nation.84[Emphasis supplied.] This exchange of course is fully and expressly reflected in the above-quoted Section 17, Article X of the Constitution, and by the express reservation under Section 1 of the same Article that autonomy shall be "within the framework of this Constitution and the national sovereignty as well as the territorial integrity of the Republic of the Philippines." Interestingly, the framers of the Constitution initially proposed to remove Section 17 of Article X, believing it to be unnecessary in light of the enumeration of powers granted to autonomous regions in Section 20, Article X of the Constitution. Upon further reflection, the framers decided to reinstate the provision in order to "make it clear, once and for all, that these are the limits of the powers of the autonomous government. Those not enumerated are actually to be exercised by the national government[.]"85 Of note is the Courts pronouncement in Pimentel, Jr. v. Hon. Aguirre86 which we quote: Under the Philippine concept of local autonomy, the national government has not completely relinquished all its powers over local governments, including autonomous regions. Only administrative powers over local affairs are delegated to political subdivisions. The purpose of the delegation is to make governance more directly responsive and effective at the local levels. In turn, economic, political and social development at the smaller political units are expected to propel social and economic growth and development. But to enable the country to develop as a whole, the programs and policies effected locally must be integrated and coordinated towards a common

national goal. Thus, policy-setting for the entire country still lies in the President and Congress. [Emphasis ours.] In other words, the autonomy granted to the ARMM cannot be invoked to defeat national policies and concerns. Since the synchronization of elections is not just a regional concern but a national one, the ARMM is subject to it; the regional autonomy granted to the ARMM cannot be used to exempt the region from having to act in accordance with a national policy mandated by no less than the Constitution. Conclusion Congress acted within its powers and pursuant to a constitutional mandate the synchronization of national and local elections when it enacted RA No. 10153. This Court cannot question the manner by which Congress undertook this task; the Judiciary does not and cannot pass upon questions of wisdom, justice or expediency of legislation.87 As judges, we can only interpret and apply the law and, despite our doubts about its wisdom, cannot repeal or amend it. 88 Nor can the Court presume to dictate the means by which Congress should address what is essentially a legislative problem. It is not within the Courts power to enlarge or abridge laws; otherwise, the Court will be guilty of usurping the exclusive prerogative of Congress. 89 The petitioners, in asking this Court to compel COMELEC to hold special elections despite its lack of authority to do so, are essentially asking us to venture into the realm of judicial legislation, which is abhorrent to one of the most basic principles of a republican and democratic government the separation of powers. The petitioners allege, too, that we should act because Congress acted with grave abuse of discretion in enacting RA No. 10153. Grave abuse of discretion is such capricious and whimsical exercise of judgment that is patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of the law as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.90 We find that Congress, in passing RA No. 10153, acted strictly within its constitutional mandate. Given an array of choices, it acted within due constitutional bounds and with marked reasonableness in light of the necessary adjustments that synchronization demands. Congress, therefore, cannot be accused of any evasion of a positive duty or of a refusal to perform its duty. We thus find no reason to accord merit to the petitioners claims of grave abuse of discretion. On the general claim that RA No. 10153 is unconstitutional, we can only reiterate the established rule that every statute is presumed valid.91 Congress, thus, has in its favor the presumption of constitutionality of its acts, and the party challenging the validity of a statute has the onerous task of rebutting this presumption.92 Any reasonable doubt about the validity of the law should be resolved in favor of its constitutionality.93 As this Court declared inGarcia v. Executive Secretary:94 The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the political departments are valid in the absence of a clear and unmistakable showing to the contrary. To doubt is to sustain. This presumption is based on the doctrine of separation of powers which enjoins upon each department a becoming respect for the acts of the other departments. The theory is that as the joint act of Congress and the President of the Philippines, a law has been

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carefully studied and determined to be in accordance with the fundamental law before it was finally enacted.95 [Emphasis ours.] Given the failure of the petitioners to rebut the presumption of constitutionality in favor of RA No. 10153, we must support and confirm its validity. WHEREFORE, premises considered, we DISMISS the consolidated petitions assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the constitutionality of this law. We likewise LIFT the temporary restraining order we issued in our Resolution of September 13, 2011. No costs. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: I join the dissent of J. Velasco with respect to the appointment of the OIC Governor and vote to hold the law as unconstitutional RENATO C. CORONA Chief Justice

ESTELA M. PERLAS-BERNABE Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. RENATO C. CORONA Chief Justice Footnotes
1

Entitled "An act fixing the date of the plebiscite for the approval of the amendments to Republic Act No. 6734 and setting the date of the regular elections for elective officials of the Autonomous Region in Muslim Mindanao on the last Monday of November 2001, amending for the purpose Republic Act No. 9054, entitled "An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, amending for the purpose Republic Act No. 6734, entitled An Act Providing for the Autonomous Region in Muslim Mindanao, as amended," and for other purposes.
2

See Dissenting Opinion ANTONIO T. CARPIO Associate Justice

I join the dissent of J. Carpio but disagree on the power of the Pres. to appoint OICGovernor of ARMM PRESBITERO J. VELASCO, JR. Associate Justice

Entitled "An Act amending fixing the Date or Regular elections for Elective Officials of the Autonomous Region in Muslim Mindanao pursuant to Republic Act No. 9054, entitled "An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, amending for the purpose Republic Act No. 6734, entitled An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao, as amended"
3

I join the dissent of Justice Velasco TERESITA J. LEONARDO-DE CASTRO Associate Justice LUCAS P. BERSAMIN Associate Justice I join the dissent of J. Velasco ROBERTO A. ABAD Associate Justice I join the dissent of J. Carpio JOSE PORTUGAL PEREZ Associate Justice MARIA LOURDES P. A. SERENO Associate Justice

DIOSDADO M. PERALTA Associate Justice

Filed by petitioners Datu Michael Abas Kida, in his personal capacity, and in representation of Maguindanao Federation of Autonomous Irrigators Association, Inc., Hadji Muhmina Usman, John Anthony L. Lim, Jamilon T. Odin, Asrin Timbol Jaiyari, Mujib M. Kalang, Alih Al-Saidi J. Sapi-e, Kessar Damsie Abdil, and Bassam Aluh Saupi.
4

MARIANO C. DEL CASTILLO Associate Justice

MARTIN S. VILLARAMA, JR. Associate Justice

Petition for Prohibition with Very Urgent Prayer for the Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order dated April 11, 2011 was filed against Sixto Brillantes, as Chairperson of COMELEC, to challenge the effectivity of RA No. 9333 for not having been submitted to a plebiscite. Since RA No. 9333 is inoperative, any other law seeking to amend it is also null and void.
5

With Prayer for the Issuance of a Temporary Restraining Order and/or Writs of Preliminary Prohibitive and Mandatory Injunction dated June 30, 2011. I join the dissent of J. Carpio JOSE CATRAL MENDOZA Associate Justice BIENVENIDO L. REYES Associate Justice
6

With Extremely Urgent Application for the Issuance of a Status Quo Order and Writ of Preliminary Mandatory Injunction dated July 1, 2011.
7

With Prayer for the issuance of a Temporary Restraining Order dated July 12, 2011.

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With Injunction and Preliminary Injunction with prayer for temporary restraining order dated July 11, 2011.
9

FIRST ELECTION SHALL SERVE FOR FIVE YEARS, TO EXPIRE AT NOON OF JUNE 1992." This was presented by Commissioner Davide, so may we ask that Commissioner Davide be recognized. THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner Davide is recognized. MR. DAVIDE. Before going to the proposed amendment, I would only state that in view of the action taken by the Commission on Section 2 earlier, I am formulating a new proposal. It will read as follows: "THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL OFFICIALS FIRST ELECTED UNDER THIS CONSTITUTION SHALL SERVE UNTIL NOON OF JUNE 30, 1992." I proposed this because of the proposed section of the Article on Transitory Provisions giving a term to the incumbent President and Vice-President until 1992. Necessarily then, since the term provided by the Commission for Members of the Lower House and for local officials is three years, if there will be an election in 1987, the next election for said officers will be in 1990, and it would be very close to 1992. We could never attain, subsequently, any synchronization of election which is once every three years. So under my proposal we will be able to begin actual synchronization in 1992, and consequently, we should not have a local election or an election for Members of the Lower House in 1990 for them to be able to complete their term of three years each. And if we also stagger the Senate, upon the first election it will result in an election in 1993 for the Senate alone, and there will be an election for 12 Senators in 1990. But for the remaining 12 who will be elected in 1987, if their term is for six years, their election will be in 1993. So, consequently we will have elections in 1990, in 1992 and in 1993. The later election will be limited to only 12 Senators and of course to local officials and the Members of the Lower House. But, definitely, thereafter we can never have an election once every three years, therefore defeating the very purpose of the Commission when we adopted the term of six years for the President and another six years for the Senators with the possibility of staggering with 12 to serve for six years and 12 for three years insofar as the first Senators are concerned. And so my proposal is the only way to effect the first synchronized election which would mean, necessarily, a bonus of two years to the Members of the Lower House and a bonus of two years to the local elective officials. THE PRESIDING OFFICER (Mr. Rodrigo). What does the committee say?

With Prayer for Temporary Restraining Order and the Issuance of Writs of Preliminary Injunction, Both Prohibitory and Mandatory dated July 1, 2011.
10

Section 1. The first elections of Members of the Congress under this Constitution shall be held on the second Monday of May, 1987. The first local elections shall be held on a date to be determined by the President, which may be simultaneous with the election of the Members of the Congress. It shall include the election of all Members of the city or municipal councils in the Metropolitan Manila area. Section 2. The Senators, Members of the House of Representatives, and the local officials first elected under this Constitution shall serve until noon of June 30, 1992. Of the Senators elected in the election in 1992, the first twelve obtaining the highest number of votes shall serve for six years and the remaining twelve for three years. xxx Section 5. The six-year term of the incumbent President and Vice President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992. The first regular elections for President and Vice-President under this Constitution shall be held on the second Monday of May, 1992. [emphasis ours]
11

To illustrate, while Section 8, Article X of the Constitution fixes the term of office of elective local officials at three years, under the above-quoted provisions, the terms of the incumbent local officials who were elected in January 1988, which should have expired on February 2, 1991, were fixed to expire at noon of June 30, 1992. In the same vein, the terms of the incumbent President and Vice President who were elected in February 1986 were extended to noon of June 30, 1992. On the other hand, in order to synchronize the elections of the Senators, who have six-year terms, the twelve Senators who obtained the lowest votes during the 1992 elections were made to serve only half the time of their terms.
12

Joaquin Bernas, S.J., The 1987 Constitution of the Republic of the Philippines: A Commentary (1996 ed.), p. 1199, citing Records of the Constitutional Commission, Vol. V, p. 429-4.
13

MR. DE CASTRO. Mr. Presiding Officer. THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner de Castro is recognized.

MR. MAAMBONG. For purposes of identification, I will now read a section which we will temporarily indicate as Section 14. It reads: "THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL OFFICIALS ELECTED IN THE

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MR. DE CASTRO. Thank you. During the discussion on the legislative and the synchronization of elections, I was the one who proposed that in order to synchronize the elections every three years, which the body approved the first national and local officials to be elected in 1987 shall continue in office for five years, the same thing the Honorable Davide is now proposing. That means they will all serve until 1992, assuming that the term of the President will be for six years and continue beginning in 1986. So from 1992, we will again have national, local and presidential elections. This time, in 1992, the President shall have a term until 1998 and the first twelve Senators will serve until 1998, while the next 12 shall serve until 1995, and then the local officials elected in 1992 will serve until 1995. From then on, we shall have an election every three years. So, I will say that the proposition of Commissioner Davide is in order, if we have to synchronize our elections every three years which was already approved by the body. Thank you, Mr. Presiding Officer. xxx xxx xxx

17

Websters Third New International Dictionary Unabridged, p.1327 (1993).

18

Section 26(2) No bill passed by either House shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final form have been distributed to its Members three days before its passage, except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal.
19

G. R. No. 115455, August 25, 1994, 235 SCRA 630.

20

A copy of the letter that the President wrote to Honorable Feliciano Belmonte, Jr. as Speaker of the House of Representatives dated March 4, 2011 is reproduced below: OFFICE OF THE PRESIDENT of the Philippines Malacaang 14 March 2011 HON. FELICIANO R. BELMONTE, JR. Speaker House of Representatives Quezon City Dear Speaker Belmonte:

MR. GUINGONA. What will be synchronized, therefore, is the election of the incumbent President and Vice-President in 1992. MR. DAVIDE. Yes. MR. GUINGONA. Not the reverse. Will the committee not synchronize the election of the Senators and local officials with the election of the President? MR. DAVIDE. It works both ways, Mr. Presiding Officer. The attempt here is on the assumption that the provision of the Transitory Provisions on the term of the incumbent President and Vice-President would really end in 1992. MR. GUINGONA. Yes. MR. DAVIDE. In other words, there will be a single election in 1992 for all, from the President up to the municipal officials. [emphasis ours] (V Record of the Constitutional Commission, pp. 429-431; October 3, 1986)
14

Pursuant to the provisions of Article VI, Section 26 (2) of the 1987 Constitution, I hereby certify to the necessity of the immediate enactment of House Bill No. 4146, entitled: "AN ACT PROVIDING FOR THE SYNCHRONIZATION OF THE ELECTIONS AND THE TERM OF OFFICE OF THE ELECTIVE OFFICIALS OF THE AUTONOMOUS REGION IN MUSLIM MINDANAO (ARMM) WITH THOSE OF THE NATIONAL AND OTHER LOCAL OFFICIALS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9333, ENTITLED AN ACT FIXING THE DATE FOR REGULAR ELECTIONS FOR ELECTIVE OFFICIALS OF THE AUTONOMOUS REGION IN MUSLIM MINDANAO, AND FOR OTHER PURPOSES" to address the urgent need to protect and strengthen ARMMs autonomy by synchronizing its elections with the regular elections of national and other local officials, to ensure that the on-going peace talks in the region will not be hindered, and to provide a mechanism to institutionalize electoral reforms in the interim, all for the development, peace and security of the region. Best wishes.

G.R. Nos. 100318, 100308, 100417 and 100420, July 30, 1991, 199 SCRA 750, 758.

15

J.M. Tuason & Co., Inc. v. Land Tenure Administration, G.R. No. 21064, February 18, 1970, 31 SCRA 413; Ordillo v. Commission on Elections, 192 SCRA 100 (1990).
16

271 SCRA 633, 668 (1997); Occena v. Commission on Elections, G.R. No. 52265, January 28, 1980, 95 SCRA 755.

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Very truly yours, (Sgd.) BENIGNO SIMEON C. AQUINO III cc: HON. JUAN PONCE ENRILE Senate President Philippine Senate Pasay City Taken from: http://www.congress.gov.ph/download/congrec/15th/1st/15C_1RS-64b031611.pdf. Last accessed on September 26, 2011.
21

Assembly for the Autonomous Region in Muslim Mindanao and for other purposes, As Amended, and for other purposes", which moved the regional elections to the second Monday of September and every three (3) years thereafter.
28

Entitled "An Act Resetting the Regular Elections for the Elective Officials of the Autonomous Region in Muslim Mindanao Provided for Under Republic Act No. 8746 and for other purposes", which reset the regional elections, scheduled on September 13, 1999, to the second Monday of September 2000.
29

Entitled "An Act Resetting the Regular Elections for Elective Officials of the Autonomous Region in Muslim Mindanao to the Second Monday of September 2001, Amending for the Purpose Republic Act No. 8953", which reset the May 2001 elections in ARMM to September 2001.
30

See Gutierrez v. House of Representatives, G.R. No. 193459, February 15, 2011. Tolentino v. Secretary of Finance, G.R. No. 115455, October 30, 1995.

22

Entitled "An Act Fixing the Date of the Plebiscite for the Approval of the Amendments to Republic Act No. 6734 and setting the date of the regular elections for elective officials of the Autonomous Region in Muslim Mindanao on the Last Monday of November 2001, Amending for the Purpose Republic Act No. 9054, Entitled "An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, Entitled An Act Providing for the Autonomous Region in Muslim Mindanao, as amended," and For Other Purposes."
31

23

Tolentino, id., citing 1 J. G. Sutherland, Statutes and Statutory Construction 10.04, p. 282 (1972).
24

Section 7, Article XIX of RA No. 6734 states: "The first regular elections of the Regional Governor, Vice-Governor and Members of the Regional Assembly under this Organic Act shall be held not earlier than sixty (60) days or later than ninety (90) days after the ratification of this Act. The Commission on Elections shall promulgate such rules and regulations as may be necessary for the conduct of said election."
25

Entitled "An Act Fixing the Date of Regular Elections for Elective Officials of the Autonomous Region in Muslim Mindanao Pursuant to Republic Act no. 9054, Entitled "An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, Entitled An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao, as Amended," which rescheduled the ARMM regional elections scheduled for the last Monday of November 2004 to "the second Monday of August 2005."
32

Entitled "An Act Providing for the Date of Regular Elections for Regional Governor, Regional Vice-Governor and Members of the Regional Legislative Assembly for the Autonomous Region in Muslim Mindanao and for other purposes," which fixed the date of the ARMM elections on the second Monday after the Muslim month of Ramadhan.
26

Section 1. Consistent with the provisions of the Constitution, this Organic Act may be reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3) of the Members of the House of Representatives and of the Senate voting separately.
33

G.R. No. 127383, August 18, 2005, 467 SCRA 280.

Entitled "An Act Changing the Date of Elections for the Elective Officials of the Autonomous Region for Muslim Mindanao, Amending for the Purpose Section One of Republic Act Numbered Seventy-Six Hundred and Forty-Seven Entitled An Act Providing for the Date of the Regular Elections for Regional Governor, Regional ViceGovernor and Members of the Regional Legislative Assembly for the Autonomous Region in Muslim Mindanao and for other purposes", which changed the date of the ARMM elections to the second Monday of March, 1993 and every three (3) years thereafter.
27

34

Id. at 295-297, citing Duarte v. Dade, 32 Phil. 36 (1915); Lewis Southerland on Statutory Construction, Vol. 1, Section 244, pp. 456-457.
35

This has been established by the following exchange during the Constitutional Commission debates: FR. BERNAS. So, the questions I have raised so far with respect to this organic act are: What segment of the population will participate in the plebiscite? In what capacity would the legislature be acting when it passes this? Will it be a constituent assembly or merely a legislative body? What is the nature, therefore, of this organic act in relation to ordinary statutes and the Constitution? Finally, if we are going to amend this organic act, what process will be followed?

Entitled "An Act Providing for the Date of the Regular Elections of Regional Governor, Regional Vice-Governor and Members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao (ARMM) Further Amending for the Purpose Republic Act No. 7647 entitled An Act Providing for the Date of Regular Elections for Regional Governor, Regional Vice-Governor and Members of the Regional Legislative

96

MR. NOLLEDO. May I answer that, please, in the light of what is now appearing in our report. First, only the people who are residing in the units composing the region should be allowed to participate in the plebiscite. Second, the organic act has the character of a charter passed by Congress, not as a constituent assembly, but as an ordinary legislature and, therefore, the organic act will still be subject to amendments in the ordinary legislative process as now constituted, unless the Gentleman has another purpose. FR. BERNAS. But with plebiscite again. [Emphasis ours.]; III Record of the Constitutional Commission, pp.182-183; August 11, 1986.
36

43

State ex rel. Green v. Collison, 39 Del 245, cited in Defensor-Santiago, Constitutional Law, Vol. 1 (2000 ed.)
44

Sec. 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities and municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as the territorial integrity of the Republic of the Philippines.
45

An empire within an empire.

46

Bernas, Joaquin, Constitutional Structure and Powers of Government Notes and Cases Part I, 2005 ed., p. 1249.
47

Section 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: (1) Administrative organization; (2) Creation of sources of revenues; (3) Ancestral domain and natural resources; (4) Personal, family, and property relations; (5) Regional urban and rural planning development; (6) Economic, social, and tourism development; (7) Educational policies; (8) Preservation and development of the cultural heritage; and (9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region.
37

Such as the addition of sectoral representatives in the House of Representatives (paragraph 2, Section 5, of Article VI of the Constitution), and the validation of the power of the Presidential Commission on Good Government to issue sequestration, freeze orders, and the provisional takeover orders of ill-gotten business enterprises, embodied in Section 26 of the Transitory Provisions.
48

RA No. 9495 which created the Province of Quezon del Sur Province was rejected by the voters of Quezon Province in the plebiscite of November 13, 2008.
49

RA No. 9355. Section 50, RA No. 9355 and Section 52 of RA No. 9495. Section 462, RA No. 7160. Supra note 14.

50

See discussions at pp. 14-15.

51

38

Section 7. Terms of Office of Elective Regional Officials. (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice Governor and members of the Regional Assembly shall be for a period of three (3) years, which shall begin at noon on the 30th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in effect until their successors are elected and qualified. [emphasis ours]
39

52

53

In Mutuc v. Commission on Elections [146 Phil. 798 (1970)] the Court held that, "The three departments of government in the discharge of the functions with which it is [sic] entrusted have no choice but to yield obedience to [the Constitutions] commands. Whatever limits it imposes must be observed." 146 Phil. 798 (1970).
54

Fernando, The Philippine Constitution, pp. 175-176 (1974).

40

Id. at 177; citing the concurring opinion of Justice Jose P. Laurel in Schneckenburger v. Moran, 63 Phil. 249, 266 (1936).
41

Vera v. Avelino, 77 Phil. 192, 212 (1946).

42

In J.M. Tuason & Co., Inc. v. Land Tenure Administration [No. L-21064, February 18, 1970, 31 SCRA 413, 423], the Court, speaking through former Chief Justice Enrique, stated: As the Constitution is not primarily a lawyers document, it being essential for the rule of law to obtain that it should ever be present in the peoples consciousness, its language as much as possible should be understood in the sense they have in common use. What it says according to the text of the provision to be construed compels acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the people mean what they say. Thus these are cases where the need for construction is reduced to a minimum.

Ople v. Torres, et al., 354 Phil. 948 (1998); see concurring opinion of Justice Jose P. Laurel inSchneckenburger v. Moran, supra note 40, at 266.

97

55

Tawang Multi-Purpose Cooperative v. La Trinidad Water District, G.R. No. 166471, March 22, 2011.
56

69

Article XVIII, Section 5. The six-year term of the incumbent President and VicePresident elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992. The first regular elections for the President and Vice-President under this Constitution shall be held on the second Monday of May, 1992.
70

Pimentel v. Ermita, G.R. No. 164978, October 13, 2005, citing Bernas, Joaquin, The 1987 Constitution of the Republic of the Philippines: A Commentary (1996 ed.) 768.
57

481 Phil. 661 (2004). G.R. No. 161984, February 21, 2007, 516 SCRA 403. G.R. No. 152295, July 9, 2011.

58

Cruz, Carlo. The Law of Public Officers, 2007 edition, p. 285, citing Mechem, Section 387.
71

59

Ponencia, p. 21.

72 60

Section 7. Terms of Office of Elective Regional Officials. (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice Governor, and members of the Regional Legislative Assembly shall be for a period of three (3) years, which shall begin at noon on the 30th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in effect until their successors are elected and qualified.
61

See Topacio Nueno v. Angeles, 76 Phil. 12, 21-22 (1946); Alba, etc. v. Evangelista, etc., et al., 100 Phil. 683, 694 (1957); Aparri v. Court of Appeals, No. L-30057, January 31, 1984, 127 SCRA 231.
73

Hon. Luis Mario M. General, Commissioner, National Police Commission v. Hon. Alejandro S. Urro, et al.,G.R. No. 191560, March 29, 2011, citing Sarmiento III v. Mison, No. L-79974, December 17, 1987,156 SCRA 549.
74

Guekeko v. Santos, 76 Phil. 237 (1946). Lozano v. Nograles, G.R. 187883, June 16, 2009, 589 SCRA 356.

Sarmiento III v. Mison, supra.

62

75

63

Ututalum v. Commission on Elections, No. L-25349, December 3, 1965, 15 SCRA 465.

64

If a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. De Jesus v. Commission on Audit, 451 Phil. 812 (2003).
76

Supra notes 47 and 48. Supra note 50.

See CONSTITUTION, Article VIII, Section 1. See CONSTITUTION, Article IX (C), Section 2(1).

77

65

78

66

Balagtas Multi-Purpose Cooperative, Inc. v. Court of Appeals, G.R. No. 159268, October 27, 2006, 505 SCRA 654, 663, citing Lapid v. CA, G.R. No. 142261, June 29, 2000, 334 SCRA 738, quoting Morales v. Subido, G.R. No. 29658, November 29, 1968, 26 SCRA 150.
67

The after-effects of the Maguindanao massacre where the Ampatuans stand charged, the insurrection by the MILF and its various factions, and the on-going peace negotiations, among others, are immediately past and present events that the nation has to vigilant about.
79

274 Phil. 523 (1991). Id. at 532.

CONSTITUTION, Article X, Section 8.

80

68

Article XVIII, Section 2. The Senators, Members of the House of Representatives, and the local officials first elected under this Constitution shall serve until noon of June 30, 1992. Of the Senators elected in the elections in 1992, the first twelve obtaining the highest number of votes shall serve for six years and the remaining twelve for three years.

81

Macalintal v. Presidential Electoral Tribunal, G.R. No. 191618, November 23, 2010, 635 SCRA 783.
82

As noted under footnote 37. 118 Phil. 1468 (1963).

83

98

84

Record of the Constitutional Commission, Vol. III, August 11, 1986, p. 179. Records of the Constitutional Commission, Vol. III, p. 560. 391 Phil. 84, 102 (2000). Angara v. Electoral Commission, 63 Phil. 139 (1936).

Background The ARMM Organic Act, Republic Act No. 6734 (RA 6734), as amended by Republic Act No. 9054 (RA 9054), mandated the holding of the "first regular elections for Governor, Vice-Governor and Members of the Regional Legislative Assembly x x x on the second Monday of September 2001."2 The elected officials would serve a three-year term beginning 30 September 2001.3 Before the September 2001 elections could take place, however, Congress moved the elections to 26 November 2001 by enacting Republic Act No. 9140 (RA 9140).4 Nearly four years later, Congress enacted Republic Act No. 9333 (RA 9333) fixing the date of the "regular elections" in the ARMM "on the second Monday of August 2005 [and] x x x every three years thereafter."5Elections in the ARMM took place on the second Mondays of August 2005 and August 2008 following RA 9333. A few months before the ARMM elections on the second Monday of August 2011, several members of the House of Representatives jointly filed House Bill No. 4146 (HB 4146), moving the date of the elections to "the second Monday of May 2013 and x x x every three years thereafter." As the term of office of the then incumbent elective officials in the ARMM would expire on 30 September 2011, HB 4146 authorized the President to appoint officers-in-charge who would hold office from 30 September 2011 until 30 June 2013 when the officials elected in the May 2013 elections would have assumed office. HB 4146 aimed to synchronize the ARMM elections with the local and national elections scheduled on the second Monday of May 2013. 6 The House of Representatives approved HB 4146 on 23 March 2011, voting 191- 47 with two abstentions. After receiving HB 4146, the Senate, where a counterpart measure (Senate Bill No. 2756 [SB 2756]) was pending, approved its own version on 6 June 2011 by a vote of 13-7, modifying some parts of HB 4146 but otherwise leaving its core provisions intact. The affirmative votes were two votes short of 2/3 of the Senate membership (23). The following day, the House of Representatives adopted the Senates version. On 30 June 2011, the President signed the measure into law as Republic Act No. 10153 (RA 10153). After the House of Representatives approved HB 4146, petitioners in G.R. No. 196271 filed their petition assailing the constitutionality of HB 4146, SB 2756 and RA 9333. Soon after, petitioner in G.R. No. 196305 filed suit assailing the constitutionality of RA 9333. After the President signed into law RA 10153, petitioners in G.R. Nos. 197221, 197280, 197282, 197392 and 197454 filed their petitions assailing the constitutionality of RA 10153. Petitioners in G.R. No. 197280 also assail the constitutionality of RA 9140 and RA 9333. In a supplemental petition, petitioners in G.R. No. 196271 joined these latter petitions in questioning the constitutionality of RA 10153. The petitions against RA 9140, RA 9333 and RA 101537 treat these laws as amending RA 9054 and charge Congress with failing to comply with the twin requirements prescribed in Sections 1 and 3, Article XVII of RA 90548for amending RA 9054. These twin requirements are: (1) approval by a 2/3 vote of the members of the House of Representatives and the Senate voting separately, and (2) submission of the amendments to ARMM voters in a plebiscite. RA 9140, RA 9333 and RA 10153 do not provide for their submission to ARMM voters in a plebiscite. On the other hand, although the 191 affirmative votes in the Lower House for HB 4146 satisfied the 2/3 vote threshold in RA 9054, the 13 affirmative votes in the Senate for SB 2756 fell two votes short of the 2/3 vote threshold. Petitioners unanimity ends here, however, for they differ on when the elections in the ARMM should take place. The petitions against RA 10153 favor the holding of elections on the second

85

86

87

88

Commissioner of Internal Revenue v. Santos, 343 Phil. 411, 427 (1997) citing Pangilinan v. Maglaya, 225 SCRA 511 (1993).
89

Manotok IV v. Heirs of Homer L. Barque, G.R. Nos. 162335 and 162605, December 18, 2008, 574 SCRA 468, 581.
90

Ligeralde v. Patalinghug, G.R. No. 168796, April 15, 2010, 618 SCRA 315.

91

Heirs of Juancho Ardona, etc., et al. v. Hon. Reyes, etc., et al., 210 Phil. 187, 207 (1983); Peralta v. Commission on Elections, Nos. L-47771, L-47803, L-47816, L-47767, L-47791 and L-47827, March 11, 1978, 82 SCRA 30; Ermita-Malate Hotel & Motel Operations Association, Inc. v. City Mayor of Manila, No. L-24693, July 31, 1967, 20 SCRA 849.
92

See Estrada v. Sandiganbayan, 421 Phil. 290 (2001); Heirs of Juancho Ardona, etc., et al. v. Hon. Reyes, etc., et al., supra; Peralta v. Commission on Elections, supra.
93

Heirs of Juancho Ardona, etc., et al. v. Hon. Reyes, etc., et al., supra; Peralta v. Commission on Elections, supra.
94

G.R. No. 100883, December 2, 1991, 204 SCRA 516. Id. at 523.

95

The Lawphil Project - Arellano Law Foundation

DISSENTING OPINION CARPIO, J.: The Cases These are original actions1 assailing the validity of statutes and bills on the holding of elections in the Autonomous Region in Muslim Mindanao (ARMM).

99

Monday of August 20119 while those attacking RA 9333 only,10 or together with RA 9140 and RA 10153,11 seek the holding of elections on the second Monday of September 2011, purportedly following RA 9054. Another petition, which finds RA 10153 unconstitutional, leave it to the Court to order special elections within a period "reasonably close" to the elections mandated in RA 9333. 12 The petitions against RA 10153 further raise the following issues: (1) postponing the ARMM elections to the second Monday of May 2013 undermines the republican and autonomous nature of the ARMM, in violation of the Constitution and RA 9054; (2) granting the President the power to appoint OICs unconstitutionally expands his power over the ARMM to encompass not only general supervision but also control; and, for the petition in G.R. No. 197280, (3) Congress, in enacting RA 10153, defectively waived the Constitutions requirement for the separate reading of bills and the advance distribution of their printed copies because the Presidents certification for the urgent passage of HB 4146 and SB 2756 was not grounded on public calamity or emergency.

On 9 August 2011, the Court heard the parties in oral argument. On 13 September 2011, the Court issued a temporary restraining order enjoining respondents from implementing RA 10153. Meanwhile, the Court authorized the then incumbent elective officials in the ARMM to continue in office in the event that the present petitions remain unresolved after the officials term of office expires on 30 September 2011. The Court granted intervention to four groups of parties who filed comments-in-intervention joining causes with respondents. The Issues

The following are the issues for resolution: The petition in G.R. No. 196271 extends the reach of its attack to HB 4146 and SB 2756, for failing to include a provision requiring the submission of the anticipated law to ARMM voters in a I. Did the passage of RA 10153 violate Section 26(2), Article VI of the Constitution? plebiscite. In their separate Comments to the petitions in G.R. No. 196271 and G.R. No. 196305, the Senate and the House of Representatives pray for the dismissal of the petitions. The Senate disagrees with the proposition that RA 9333 constitutes an amendment to RA 9054, treating RA 9333 as merely filling the void left by RA 9054 in failing to schedule the succeeding regular elections in the ARMM. Thus, the Senate finds irrelevant the twin requirements in RA 9054 in the enactment of the assailed laws. Alternatively, the Senate gives a narrow construction to the plebiscite requirement in RA 9054, limiting the plebiscite to cover amendatory laws affecting "substantive matters," as opposed to "administrative concerns" such as fixing election dates. 13 II. Do Section 2 of RA 10153, Section 1 of RA 9333 and Section 2 of RA 9140 constitute an amendment to Section 7, Article XVIII of RA 9054? If in the affirmative 1. Is Section 1, Article XVII of RA 9054 repugnant to Section 1 and Section 16(2), Article VI of the Constitution and violative of the rule against the passage of irrepealable laws?; and 2. Does Section 3, Article XVII of RA 9054 apply only in the creation of autonomous regions under paragraph 2, Section 18, Article X of the Constitution?

The House of Representatives accepts the amendatory nature of RA 9333 but attacks the constitutionality of the twin requirements in RA 9054 mandating a supermajority vote of each House of Congress and the approval by ARMM voters in a plebiscite for purposes of amending RA III. Do Sections 3, 4 and 5 of RA 10153 9054. The Lower House grounds its attack on two points: (1) save in exceptional cases not applicable to the present petitions, the Constitution only requires a simple majority of a quorum in each House of Congress to enact, amend or repeal laws; and (2) the rule against the passage of 1. Violate Sections 15, 16, and 18, Article X of the Constitution?; irrepealable laws. Alternatively, the House of Representatives, like the Senate, narrowly construes the plebiscite requirement in RA 9054 to cover only amendatory laws creating or expanding the 2. Fall under Section 16, Article VII of the Constitution?; and ARMMs territory. The Senate and the House of Representatives uniformly contend that the question on the constitutionality of HB 4146 and SB 2756 is non-justiciable. The Office of the Solicitor General (OSG), representing respondent Commission on Elections (COMELEC) and the other individual public respondents, joined causes with the House of Representatives on the issue of the validity of the twin requirements in RA 9054 for the passage of amendatory laws. In defending the Presidents authority under RA 10153 to appoint OICs, the OSG treats the authority as a species of legislation falling under Section 16, Article VII of the Constitution authorizing the President to appoint "those whom he may be authorized by law to appoint." The OSG rejects petitioners treatment of this authority as granting the President control over the ARMM, contending instead that it is analogous to Section 7, Article XVIII of the Constitution, authorizing the President for a limited period to appoint sectoral representatives in the House of Representatives.

3. Repeal the second sentence of Section 7(1), Article VII of RA 9054? IV. Does RA 10153 implement Sections 2 and 5, Article XVIII of the Constitution? I vote to declare RA 9333 constitutional, and RA 10153 partly unconstitutional. The synchronization of the ARMM elections with the national and local elections under RA 10153 is constitutional. However, Sections 3, 4 and 5 of RA 10153 authorizing the President to appoint OICs in place of elective ARMM officials are unconstitutional. Save in newly created local government units prior to special or regular elections, elective officials of local government units like the ARMM cannot be appointed by the President but must be elected in special or regular elections. Hence, respondent COMELEC should be ordered to hold special elections in the ARMM as soon as possible.

100

Pending the assumption to office of the elected ARMM Governor, the President, under his general supervision over local governments, may appoint an officer-in-charge in the office of the ARMM Governor. Such appointment is absolutely necessary and unavoidable to keep functioning essential government services in the ARMM. On the other hand, I vote to declare unconstitutional the second sentence of Section 7(1), Article VII of RA 9054 authorizing ARMM elective officials to hold over until the election and qualification of their successors. Such hold over violates the fixed term of office of elective local officials under the Constitution. The challenge against the constitutionality of HB 4146 and SB 2756 raises a non-justiciable question, hence immediately dismissible. Until legislative bills become laws, attacks against their constitutionality are premature, lying beyond the pale of judicial review. 14 The Presidents Certification on Urgency of Legislation Not Subject to Heightened Scrutiny Petitioners in G.R. No. 197280 claim that Congress defectively passed RA 10153 for failing to comply with the requirement in the Constitution for the reading of bills on three separate days and the advanced distribution of their printed copies in final form under the second paragraph of Section 26, Article VI, which provides: No bill passed by either House shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final form have been distributed to its Members three days before its passage, except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal. (Emphasis supplied) Although the President certified HB 4146 and SB 2756 as urgent measures, thus dispensing with the bills separate reading and advanced distribution, petitioners in G.R. No. 197280 find the basis of the Presidents certification, namely, the "need to protect x x x ARMMs autonomy x x x and provide mechanism to institutionalize electoral reforms," as "flimsy," falling short of the Constitutions requirement of public calamity or emergency.15 The Court has refused in the past to subject to heightened scrutiny presidential certifications on the urgency of the passage of legislative measures. In Tolentino v. Secretary of Finance,16 petitioners in that case questioned the sufficiency of the Presidents certification of a "growing budget deficit" as basis for the urgent passage of revenue measures, claiming that this does not amount to a public calamity or emergency. The Court declined to strike down the Presidents certification upon a showing that members of both Houses of Congress had the opportunity to study the bills and no fundamental constitutional rights were "at hazard": It is nonetheless urged that the certification of the bill in this case was invalid because there was no emergency, the condition stated in the certification of a "growing budget deficit" not being an unusual condition in this country. It is noteworthy that no member of the Senate saw fit to controvert the reality of the factual basis of the certification. To the contrary, by passing S. No. 1630 on second and third readings on March 24, 1994, the Senate accepted the Presidents certification. Should such cert ification be now reviewed by this Court, especially when no evidence has been shown that, because S. No. 1630

was taken up on second and third readings on the same day, the members of the Senate were deprived of the time needed for the study of a vital piece of legislation? The sufficiency of the factual basis of the suspension of the writ of habeas corpus or declaration of martial law under Art. VII, 18, or the existence of a national emergency justifying the delegation of extraordinary powers to the President under Art. VI, 23(2), is subject to judicial review because basic rights of individuals may be at hazard. But the factual basis of presidential certification of bills, which involves doing away with procedural requirements designed to insure that bills are duly considered by members of Congress, certainly should elicit a different standard of review. (Emphasis supplied) As in Tolentino, Congress, in passing RA 10153, found sufficient the factual bases for President Aquinos certification of HB 4146 and SB 2756 as emergency measures. Petitioners in G.R. No. 197280 do not allege, and there is nothing on record to show, that members of Congress were denied the opportunity to examine HB 4146 and SB 2756 because of the Presidents certification. There is thus no basis to depart from Tolentino.17 RA 9333 and RA 10153 Supplement and do not Amend RA 9054 The petitions assailing RA 9333 and RA 10153 are united in their contention that these amendatory laws to RA 9054 are invalid for failure to comply with the twin requirements in RA 9054, namely, that the amendments must be approved by a 2/3 vote of each House of Congress and submitted to ARMM voters in a plebiscite. The underlying assumption of petitioners theory that RA 9333 and RA 10153 amend RA 9054 is legally baseless. Section 7, Article XVIII of RA 9054 on the holding of ARMM elections provides in part: First Regular Elections. The first regular elections of the Regional Governor, Regional ViceGovernor and members of the regional legislative assembly under this Organic Act shall be held on the second Monday of September 2001. The Commission on Elections shall promulgate rules and regulations as may be necessary for the conduct of said election. (Emphasis supplied) xxxx The ambit of Section 7 is narrow, confined to the "first regular elections," scheduled "on the second Monday of September 2001." This left open the scheduling of elections succeeding the "first regular elections." In the exercise of its plenary legislative power, Congress filled this void by enacting RA 9333, Section 1 of which provides: Section 1. Date of Election. The regular election for regional Governor and Regional ViceGovernor and Members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao (ARMM) shall be held on the second Monday of August 2005. Succeeding regular elections shall be held on the same date every three years thereafter. (Emphasis supplied)

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In the discharge of the same power, Congress subsequently passed RA 10153, Section 2 of which states: SEC. 2. Regular Elections. - The regular elections for the Regional Governor, Regional ViceGovernor and Members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao (ARMM) shall be held on the second (2nd) Monday of May 2013. Succeeding regular elections shall be held on the same date every three (3) years thereafter. (Emphasis supplied) Had Congress intended RA 9054 to govern not only the "first regular elections" but also succeeding regular elections, it would have included in Section 7 of Article XVIII a provision stating to the effect that the succeeding regular elections shall be held on the same date every three years thereafter, consistent with the three-year term of office of elective officials in the ARMM.18 Instead, RA 9054 confines itself to the "first regular elections." Tellingly, it is only in Section 1 of RA 9333 and Section 2 of RA 10153 that Congress touched on the succeedingregular elections in the ARMM, by uniformly providing that "[s]ucceeding regular elections shall be held" on the date indicated "every three years thereafter." The legislative practice of limiting the reach of the ARMM Organic Act to the first regular elections, leaving the date of the succeeding regular elections for Congress to fix in a subsequent legislation, traces its roots in the ARMMs first Organic Act, RA 6734. Section 7, Article XIX of RA 6734 fixed the date of the "first regular elections," to take place "not earlier than sixty (60) days or later than ninety (90) days" after the ratification of RA 6743. Section 7 reads in full: The first regular elections of the Regional Governor, Vice-Governor and Members of the Regional Assembly under this Organic Act shall be held not earlier than sixty (60) days or later than ninety (90) days after the ratification of this Act. The Commission on Elections shall promulgate such rules and regulations as may be necessary for the conduct of said election. (Emphasis supplied) To fix the date of the succeeding regular elections, Congress passed several measures, moving the election day as it deemed proper.19 Like RA 9333 and RA 10153, these enactments merely filled a void created by the narrow wording of RA 6734. RA 9333 and RA 10153 are therefore separate, stand-alone statutes that do not amend any provision of RA 9054. RA 9140 Rendered Functus Officio after 26 November 2001 Elections Petitioners in G.R. No. 197280 attack Section 2 of RA 9140 also for its failure to comply with the twin requirements in amending RA 9054.20 To recall, under Section 2 of RA 9140, which immediately preceded RA 9333, the date of the first elections in the ARMM under RA 9054 was moved to 26 November 2001. There is no reason to traverse this issue for the simple reason that Congress passed RA 9140 solely for the narrow purpose of fixing the date of the plebiscite for RA 9054 (Section 1) and the date of the first regular elections in the ARMM under RA 9054 (Section 2). These electoral exercises took place on 14 August 2001 and 26 November 2001, respectively. Hence, RA 9140 became functus officio after 26 November 2001. It is futile, in this case, to review the validity of a functus officio law.

Granting that RA 9333 and RA 10153 Amend RA 9054, these Laws Remain Valid That RA 9333 and RA 10153 merely filled a void in RA 9054 would have sufficed to dispose of the argument that these laws are invalid for non-compliance with the twin requirements in RA 9054. These requirements would have been left unreviewed were it not for the fact that respondents and intervenors vigorously insist on their invalidity. The issue having been raised squarely, the Court should pass upon it. Section 1, Article XVII of RA 9054 Requiring 2/3 Vote to Amend RA 9054 Unconstitutional Section 1, Article XVII of RA 9054 requires a 2/3 supermajority vote of the members of each House of Congress to amend or repeal RA 9054. This provision states: Consistent with the provisions of the Constitution, this Organic Act may be reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3) of the Members of the House of Representatives and of the Senate voting separately. (Emphasis supplied) Respondents House of Representatives, COMELEC and individual officials assail this provisions constitutionality on two grounds. First, it is repugnant to Section 16 (2), Article VI of the Constitution requiring a mere majority of members of both Houses of Congress to constitute a quorum to do business.21 Second, it violates the doctrine barring the passage of irrepealable laws, a doctrine rooted on the plenary power of Congress to amend or repeal laws that it enacts. Section 16 (2), Article VI of the Constitution, which provides that " [a] majority of each House shall constitute a quorum to do business x x x," sets the vote threshold for Congress to conduct its legislative work in plenary session. Under this provision, a majority of each House suffices for Congress to hold sessions and pass, amend, or repeal bills and resolutions, upon a vote of a majority of the members present who constitute a quorum. In short, a majority of a quorum, or a majority of a majority, can enact, amend or repeal laws or approve acts requiring the affirmative action of Congress, unless the Constitution prescribes a qualified or supermajority in specific cases.22 By providing that RA 9054 "may be reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3) of the Members of the House of Representatives and of the Senate voting separately," Section 1, Article XVII of RA 9054 raised the vote threshold necessary to amend RA 9054 to a level higher than what Section 16 (2), Article VI of the Constitution requires. Thus, without Section 1, Article XVII of RA 9054, it takes only 72 23votes in the Lower House and 724 votes in the Senate to pass amendments or revisions to RA 9054, assuming a simple quorum in attendance in either House. With the same provision in the statute books, at least 189 votes in the House of Representatives and at least 15 in the Senate are needed to enact the same amendatory or repealing legislation, assuming the same simple quorum in either House. The repugnancy between the statutory provision and the Constitution is irreconcilable. Needless to say, the Constitution prevails. Section 1, Article XVII of RA 9054 also runs afoul of the inherent limitation on Congress power barring it from passing irrepealable laws.25 Section 1, Article XVII of RA 9054 erects a high vote

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threshold for each House of Congress to surmount, effectively and unconstitutionally, taking RA 9054 beyond the reach of Congress amendatory powers. One Congress cannot limit or reduce the plenary legislative power of succeeding Congresses by requiring a higher vote threshold than what the Constitution requires to enact, amend or repeal laws. No law can be passed fixing such a higher vote threshold because Congress has no power, by ordinary legislation, to amend the Constitution. The Constitutions rule allowing a simple majority of each House of Congress to do business evinces the framers familiarity with the perennial difficulty plaguing national legislative assemblies in constituting a quorum. Set the quorum requirement any higher and plenary legislative work will most likely slow down if not grind to a halt. The 2/3 vote threshold in Section 1, Article XVII of RA 9054 effectively ensures the near immutability of RA 9054, in derogation of Congress plenary power to amend or repeal laws. Unless the Constitution itself mandates a higher vote threshold to enact, amend or repeal laws,26 each House of Congress can do so by simple majority of the members present who constitute a quorum. There is no merit in the proposition that Section 1, Article XVII of RA 9054 is an "additional safeguard[] to protect and guarantee" the autonomy of the ARMM. 27 Autonomy, even of the expanded type prevailing in the ARMM, means vesting of more powers and resources to the local or regional government units. To say that autonomy means shackling the hands of Congress in improving laws or passing remedial legislations betrays a gross misconception of autonomy. Nor is the provision in Section 27(1), Article VI of the Constitution requiring a 2/3 vote for Congress to override a presidential veto an argument for the validity of Section 1, Article XVII of RA 9054. The veto-override provision neither negates the simple majority rule for Congress to legislate nor allows the passage of irrepealable laws. The Presidential veto is a power of the Executive to reject a law28 passed by Congress, with the associated power of Congress to override such veto by a 2/3 vote. This associated power of Congress is not an independent power to prescribe a higher vote threshold to enact, amend or repeal laws, an act which does not involve any Presidential veto but operates as an auto-limitation on the plenary power of Congress to legislate. The veto-override provision is a small but vital mechanism presidential systems adopt to calibrate the balance of power between the Executive and the Legislature. It ensures the Executive a substantial voice in legislation by requiring the Legislature to surmount a vote threshold higher than the simple majority required to pass the vetoed legislation. The veto-override provision cannot be used to immobilize future Congresses from amending or repealing laws by a simple majority vote as provided in Section 16(2), Article VI of the Constitution. Plebiscite Mandatory only in Approving Creation or Expansion of the ARMM The second paragraph of Section 18, Article X of the Constitution requires the holding of a plebiscite in the autonomous region for the approval of its creation, thus: The creation of the autonomous region shall be effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for the purpose. (Emphasis supplied) Section 18 of Article X is substantially similar to Section 10, Article X of the Constitution, mandating that no local government unit shall be "created, divided, merged, abolished, or its

boundaries substantially altered"29 unless, among others, voters of the affected units approve the proposed measure in a plebiscite. The narrow ambit of these constitutional provisions, limiting the plebiscite to changes in the size of the units territory, is commonsensical. The Constitution requires that territorial changes, affecting the jurisdiction, income, and population of a local government unit, should not be left solely for politicians to decide but must be submitted for approval or rejection by the people affected. 30 In sharp contrast to the narrow scope of Section 10 and Section 18 of Article X of the Constitution, Section 3, Article XVII of RA 9054 mandates the holding of a plebiscite in the ARMM to approve "[a]ny amendment to or revision of" RA 9054, thus: Any amendment to or revision of this Organic Act shall become effective only when approved by a majority of the vote cast in a plebiscite called for the purpose, which shall be held not earlier than sixty (60) days or later than ninety (90) days after the approval of such amendment or revision. (Emphasis supplied) Petitioners give a literal interpretation to this provision by applying it to all amendments to or revisions of RA 9054, including the fixing of the date of elections in the ARMM that RA 10153 mandates. By requiring the holding of a plebiscite to approve "any amendment to or revision" of RA 9054, Section 3, Article XVII of RA 9054, a supposed statutory implementation of the second paragraph of Section 18, Article X of the Constitution, impermissibly expands the scope of the subject matter that the Constitution requires to be submitted to a plebiscite. By barring any change to RA 9054 from taking effect unless approved by ARMM voters in a plebiscite, even if unrelated to the ARMMs creation, reduction or expansion, Section 3 of Article XVII directly contravenes Section 18, Article X of the Constitution.31 True, the Court held in Disomangcop v. Datumanong32 that Republic Act No. 8999 (RA 8999) creating an engineering office within the ARMM is an "amendatory law which should x x x first obtain the approval of the people of the ARMM before it can validly take effect."33 This statement, obviously an obiter dicta, furnishes no ground to support petitioners interpretation of Section 3, Article XVII of RA 9054. What the Court resolved in Disomangcopwas whether RA 8999, creating an office performing functions inconsistent with those created under the ARMM Organic Act, prevails over the latter. The Court anchored its negative answer, not on the ground that RA 8999 was invalid for not having been approved in a plebiscite, but on the fact that RA 8999, signed into law in January 2001, "was repealed and superseded by RA 9054," enacted in March 2001. Thus, in disposing of the case, we ruled: WHEREFORE, considering that Republic Act No. 9054 repealed Republic Act No. 8999 and rendered DPWH Department Order No. 119 functus officio, the petition insofar as it seeks the writs of certiorari and prohibition is GRANTED.34 x x x x (Emphasis supplied) The Court was not confronted in Disomangcop, as it is now, with the issue of whether a law changing the date of elections in the ARMM should be submitted to ARMM voters in a plebiscite. Congress Power to Synchronize National and Local Elections does not Encompass Appointment of OICs in Place of Elective Officials

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The Constitution impliedly requires the synchronization of elections for President, Vice-President, members of Congress and local officials after the end of their first term by simultaneously ending their tenure on 30 June 1992, extending in the process the initial tenure of the members of Congress and local officials.35 As the Court confirmed in Osmea v. Commission on Elections:36 "[t]he Constitution has mandated a synchronized national and local election prior to June 30, 1992 or more specifically as provided for in Article XVIII, Sec. 5 on the second Monday of May 1992."37 After the Court struck down Republic Act No. 7065 in Osmea for desynchronizing local and national elections, Congress subsequently passed Republic Act No. 7166 (RA 7166) synchronizing elections for presidential, vice-presidential, congressional, provincial, city and municipal officials. RA 10153 widens the ambit of the Constitutions policy of synchronizing elections by including the ARMM into the loop of synchronized elections. With the passage of RA 10153, only barangay and sangguniang kabataan elections are excluded from the synchronized national and local elections. 38 The contention of petitioners in G.R. No. 196271 that the elections in the ARMM cannot be synchronized with the existing synchronized national and local elections is untenable. Petitioners advance the theory that elections in the ARMM are not "local elections" because ARMM officials are not "local officials" within the meaning of Sections 2 and 5, Article XVIII of the Constitution. 39 Under Section 1, Article X of the Constitution, the ARMM is a local government unit just like provinces, cities, municipalities, and barangays. Section 1, Article X of the Constitution provides: The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. (Emphasis supplied) The entire Article X of the Constitution is entitled "Local Government" because Article X governs the creation of, and the grant of powers to, all local government units, including autonomous regions.40 Thus, elective officials of the ARMM are local officials because the ARMM is a local government unit, just like provinces, cities and municipalities. Section 8, Article X of the Constitution provides that "[t]he term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years x x x." In compliance with this provision, ARMM elective officials serve three-year terms under RA 9054.41 Congress cannot fix the term of elective local officials in the ARMM for less, or more, than three years. Clearly, elective officials in the ARMM are "local officials" and elections in the ARMM, a local government unit, are "local elections." Congress power to provide for the simultaneous holding of elections for nat ional and local officials, however, does not encompass the power to authorize the President to appoint officers-incharge in place of elective local officials, canceling in the process scheduled local elections. To hold otherwise is to sanction the perversion of the Philippine States democratic and republican nature.42 Offices declared by the Constitution as elective must be filled up by election and not by appointment. To appoint officials to offices mandated by the Constitution to be elective, absent an absolutely unavoidable necessity to keep functioning essential government services, is a blatant violation of an express command of the Constitution. Options to Fill Vacancies in the ARMM Elective Offices After 30 September 2011

In desiring to include elections in the ARMM in the existing synchronized national and local elections, Congress faced a dilemma arising from the different schedules of the election cycles under RA 7166 and RA 9333. Under RA 7166, national and local elections simultaneously take place every second Monday of May in a three-year cycle starting 1992. On the other hand, under RA 9333, elections in the ARMM take place every second Monday of August in a three-year cycle starting 2005. Thus, a 21-month gap separates the two electoral cycles. The horn of the dilemma lies in how to fill up elective offices in the ARMM during this gap. There are three apparent ways out of this dilemma, namely: (1) allow the elective officials in the ARMM to remain in office in a hold over capacity; (2) authorize the President to appoint OICs; or (3) hold special elections in the ARMM, with the terms of those elected to expire on 30 June 2013. Two petitions favor partial hold over pending the holding of special elections.43 On the other hand, the OSG defends Congress choice under RA 10153 authorizing the President to appoi nt OICs who will hold office until 30 June 2013. Sections 3, 4 and 5 of RA 10153 Authorizing the President to Appoint OICs in Elective Local Offices in the ARMM Unconstitutional Historically, the legislature has authorized the President to appoint OICs for elective local offices only as anincident to the creation of a new local government unit or to its transition from a subunit to a full-fledged political subdivision. Thus, statutes creating the provinces of Quezon del Sur44 and Dinagat Islands45 uniformly authorized the President to appoint "an interim governor, vice-governor and members of the sangguniang panlalawigan, who shall serve only until a new set of provincial officials have been elected and qualified."46 Similarly, the statute creating the municipality of Tboli in South Cotabato authorized the President to "appoint the elective officials of the new Municipality who shall hold office until their successors shall have been duly elected in the general elections next following the issuance of this Decree."47 The same authorization is found in the Local Government Code for sub-provinces, authorizing the President to appoint the interim governor, vice-governor and members of the sangguniang panlalawigan while the sub-provinces are transitioning to the status of a province.48 These legislative authorizations are rendered imperative by the fact that incipient or transitioning local government units are devoid of elective officials prior to special or regular local elections. Where the law provides for the creation of a local government unit prior to the election of its local officials, it becomes absolutely necessary and unavoidable for the legislature to authorize the President to appoint interim officials in elective local offices to insure that essential government services start to function. In authorizing the President to appoint OICs in the ARMM, Section 3 of RA 10153 provides: Appointment of Officers-in-Charge.The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice-Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office. Section 3 is supplemented by Section 4 which provides the manner and procedure of appointment49 while Section 5 states the qualifications for the OICs.50 It takes no extensive analysis to conclude that Section 3 is neither necessary nor unavoidable for the ARMM to function. The ARMM is an existing, as opposed to a newly

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created or transitioning, local government unit created more than two decades ago in 1989. At the time of the passage of RA 10153, elected officials occupied all the elective offices in the ARMM. No one claims that it is impossible to hold special local elections in the ARMM to determine its next set of elective officials. Section 3 of RA 10153 negates the representative and democratic nature of the Philippine State and its political subdivisions such as the ARMM.51 Section 18, Article X of the Constitution on the organic act of autonomous regions expressly requires the organic act to define the "[b]asic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units."52 The ARMMs Organic Act, RA 6734, as amended by RA 9054, implements Section 18, Article X of the Constitution by mandating the popular election of its executive and legislative officials.53 Section 3 of RA 10153, however, negates Congress implementation of the Constitution under RA 9054 by making the executive and legislative offices in the ARMM appointive. There is no merit in the OSGs argument that Section 3 of RA 10153 is similar to Section 7, Article XVIII of the 1987 Constitution, authorizing the President to appoint sectoral representatives in Congress pending the passage of legislation on party-list representation.54 The filling of seats in the House of Representatives under Section 7, Article XVIII of the Constitution is authorized by the Constitution itself and thus can never be questioned as unconstitutional. In ratifying the Constitution, the Filipino people authorized the President to appoint sectoral representatives for a limited period. However, the appointment by the President of OICs in the ARMM under Sections 3, 4 and 5 of RA 10153 is not authorized under the Constitution but is in fact in violation of the Constitution that the Filipino people ratified overwhelmingly. What Section 3 of RA 10153 approximates is the provision in the Freedom Constitution allowing "[a]ll elective x x x officials [to] continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986." 55 Wisely enough, none of the respondents saw fit to invoke this provision as precedent. The mass replacement of elective local officials following the EDSA uprising in 1986 was part of the then revolutionary governments purging of the local government ranks of officials linked to the excesses of the previous regime. In making her appointments, then President Corazon C. Aquino wielded executive and legislative powers unconstrained by any specific constitutional limitation. This is not the situation in the present case. Nor is Section 3 of RA 10153 a species of legislation falling under Section 16, Article VII of the Constitution authorizing the President to appoint "those whom he may be authorized by law to appoint." This provision does not empower Congress to authorize the President to fill up by appointment positions that, by express mandate of the Constitution, are " elective and representative" offices. Section 16, Article VII of the Constitution obviously refers only to appointive and not elective offices. Clearly, authorizing the President to appoint OICs in place of elective officials in the ARMM, an existing local government unit, contravenes Section 18, Article X of the Constitution, which mandates that the "executive department and legislative assembly" of the ARMM "shall be elective and representative." Elective local offices in the ARMM, after the ARMMs creation and holding of regular local elections, cannot be filled up through the appointment of OICs by the President without violating Section 18, Article X of the Constitution.

However, under Section 4, Article X of the Constitution, the President exercises "general supervision" over all local governments. In case it is absolutely necessary and unavoidable to keep functioning essential government services, the President may, under his power of general supervision over local governments, appoint OICs where vacancies occur in existing elective local offices and the law does not provide for succession, or where succession is inapplicable because the terms of elective officials have expired. Thus, the President may appoint an officer-in-charge in the office of the ARMM Governor pending the holding of special local elections in the ARMM. The appointment of such officer-in-charge is absolutely necessary and unavoidable because someone must insure that essential government services continue to function in the ARMM. The officer-in-charge shall exercise the powers and perform the functions of the ARMM Governor under RA 9054 and related laws until the assumption to office of the elected ARMM Governor. However, all appointments made by the officer-in-charge shall terminate upon the assumption to office of the elected Governor. It is, however, not absolutely necessary and unavoidable to appoint OICs in the ARMM Regional Legislative Assembly because Section 22, Article VII of RA 9054 provides for the automatic reenactment of the ARMM budget if the Regional Legislative Assembly fails to pass the appropriation bill for the ensuing fiscal year.56 Even without OIC regional assembly members, the ARMM will have an operational budget for the next fiscal year. However, following the Local Government Code, which applies suppletorily to the ARMM,57 "only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year" are deemed reenacted.58The officer-in-charge in the office of the ARMM Governor shall disburse funds from the reenacted budget in accordance with the applicable provisions of the Local Government Code and its implementing rules. Second Sentence of Section 7(1), Article VII of RA 9054 Authorizing the Hold Over of ARMM Officials Unconstitutional Petitioner in G.R. No. 197282 invokes the second sentence of Section 7(1), Article VII of RA 9054, which provides: Terms of Office of Elective Regional Officials. (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice-Governor and members of the Regional Assembly shall be for a period of three (3) years, which shall begin at noon on the 30th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in office until their successors are elected and qualified.59 (Emphasis supplied) as statutory authorization for ARMM elective officials at the time of the passage of RA 10153 to remain in office until their successors, elected in special elections, assume office. Petitioner in G.R. No. 197221 adopts the same view. On the other hand, respondents-intervenors60 consider the same provision unconstitutional for extending the term of office of ARMM officials beyond the three years mandated in Section 8, Article X of the Constitution. There is merit to this latter claim. Section 8, Article X of the Constitution limits the term of office of elective local officials, except barangay officials, to three years:

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The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. (Emphasis supplied) Elective ARMM officials are "local officials"61 within the meaning of Section 8, Article X of the Constitution. The ARMM Charter, RA 9054, complies with Section 8, Article X of the Constitution by providing that "[t]he terms of office of the Regional Governor, Regional Vice-Governor and members of the Regional Assembly shall be for a period of three (3) years."62 The question of whether a law may constitutionally mandate the "hold over" of local officials beyond the expiration of their term as fixed in the Constitution is not novel. The Court reviewed such a law in Osmea and struck down the law, holding that "it is not competent of the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the [C]onstitution has x x x prescribed the term": [S]ection 2, Article XVIII of the Constitution x x x provides that the local official first elected under the Constitution shall serve until noon of June 30, 1992. But under Sec. 3 of RA 7056, these incumbent local officials shall hold over beyond June 30, 1992 and shall serve until their successors shall have been duly elected and qualified. It has been held that: It is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term and when the Constitution fixes the day on which the official term shall begin, there is no legislative authority to continue the office beyond that period, even though the successors fail to qualify with the time. x x x x In American Jurisprudence it has been stated as follows: It has been broadly stated that the legislature cannot, by an act postponing the election to fill an office the term of which is limited by the Constitution, extend the term of the incumbent beyond the period as limited by the Constitution. Also, there is Section 8, Article X of the Constitution which provides that: The term of office of elective local officials, except barangay officials which shall be determined by law shall be three years and no such official shall serve for more than three consecutive terms. . . x x x .63 (Boldfacing supplied; italicization in the original) Osmea is grounded on reasons of power and public policy. First, the power of Congress to fix the terms of public offices stems from (1) its inherent power to create such public offices or (2) a constitutionally delegated power to that effect. Thus, if a public office is created by the Constitution with a fixed term, or if the term of a public office created by Congress is fixed by the Constitution, Congress is devoid of any power to change the term of that office. Thus, statutes which extend the term of an elective office as fixed in the Constitution either by postponing elections, changing the date of commencement of term of the successor, or authorizing the incumbent to remain in office until his successor is elected and qualified are unconstitutional as it amounts to an appointment

of an official by Congress to a constitutional office, a power vested either in the Executive or in the electorate,64 or a negation of the term of office fixed in the Constitution. Second, constitutional provisions fixing the terms of elective officials serve the ends of democratic republicanism by depriving elective officials of any legal basis to remain in office after the end of their terms, ensuring the holding of elections, and paving the way for the newly elected officials to assume office.65 Such provisions, which are found in the 1987 Constitution, are framed upon the belief that to ensure democratic values, there must be periodic electoral exercises. By refusing to include hold over provisions in fixing the terms of elective national and non-barangay local officials, the framers of the 1987 Constitution guaranteed not only the elective nature of these offices 66 but also secured our democratic values. The wisdom of Osmea is magnified when the evils it seeks to bar are applied to the elective officials whose terms of office the 1987 Constitution fixed, namely: 1. President, with a single term of six years, beginning at noon on the thirtieth day of June next following the day of the election;67 2. Vice-President, with a term of six years beginning at noon on the thirtieth day of June next following the day of the election, eligible for one reelection; 68 3. Senators, with a term of six years beginning at noon on the thirtieth day of June next following the day of the election, unless otherwise provided by law, eligible for two consecutive reelections;69 4. Members of the House of Representatives, with a term of three years beginning at noon on the thirtieth day of June next following the day of the election, unless otherwise provided by law, eligible for two consecutive reelections;70 and 5. Local officials, except barangay officials, with a term of three years, for a maximum of three consecutive terms.71 A ruling contrary to Osmea would allow Congress to pass a law, in the guise of ensuring the continuity of public service and preventing a hiatus in office, mandating the President, VicePresident, Senators, Congressmen and elective local officials other than barangay officials to remain in office "until their successors are elected and qualified." In doing so, Congress would have arrogated to itself the power to lengthen the terms of office of the President, Vice-President, Senators, Congressmen and non-barangay elective local officials in contravention of their terms as fixed in the Constitution. The absence in the Constitution of any provision allowing the hold over of national and non-barangay elective local officials or of any provision vesting on Congress the power to fix the terms of office of these officials means that any alteration in their terms of office can only be effected through a constitutional amendment. The Local Government Code does not authorize the hold over of elective local officials. 72 This is consistent with the constitutional provision fixing the term, without hold over, of all elective nonbarangay local officials. With the exception of the hold over provision in RA 9054, Congress refrained from passing laws allowing hold over of non-barangay elective local officials. Congress passed a law to that effect (Section 5 of Republic Act No. 9164 [RA 9164]) only for barangay and sangguniang kabataan officials which the Court reviewed and upheld in Sambarani v.

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COMELEC.73 The legislatures passage of RA 9164 is in accord with the Constitutions grant to Congress of the power to determine the term of barangay officials. In contrast, Section 7(1), Article VII of RA 9054, allowing for the hold over of elective local officials in the ARMM, finds no basis in the Constitution. Indeed, Section 7(1) contravenes the Constitution by extending the term of office of such elective local officials beyond the three year period fixed in Section 8, Article X of the Constitution. Beyond the question of power, Osmea protects democratic values and assures public order. The certainty of departure from office that term endings and term limits bring carries with it the certainty of the holding of regular and periodic elections, securing the voters ri ght to elect the officials for the new term. On the other hand, faced with no choice but to leave office on the day their terms end, elective officials stand to gain nothing in sabotaging electoral processes to extend their stay in office. It is immaterial that the laws Congress enacted in the past postponing elections in the ARMM all contained provisions for the hold over of the incumbents until the election of their successors.74 None of these laws were challenged before the Court, thus the Court had no occasion to pass upon their validity.75 Nor is the Courts Resolution of 13 September 2011 authorizing the then incumbent ARMM elective officials to continue in office under Section 7(1), Article VII of RA 9054 a prejudgment of the provisions validity. The Resolution of 13 September 2011 is a preliminary, ancilla ry remedy to ensure the continued functioning of essential government services in the ARMM. Implicit in the issuance of the Resolution of 13 September 2011 is the understanding that such was without prejudice to the resolution of the issues raised in these petitions, including the validity of Section 7(1), Article VII of RA 9054. Section 5, BP 881 Basis for Holding of Special Elections The unconstitutionality of Section 7(1), Article VII of RA 9054 and Sections 3, 4 and 5 of RA 10153 leaves the holding of special elections as the only constitutionally permissible option to fill up the offices of the ARMM Governor, Vice-Governor and members of the Regional Legislative Assembly after 30 September 2011. Section 5 of Batas Pambansa Bilang 881 (BP 881), as amended, authorizes respondent COMELEC to hold special elections "[w]hen for any serious cause such as x x x loss or destruction of election paraphernalia or records x x x the holding of a free, orderly and honest election should become impossible in any political subdivision x x x."76 The tight timeframe in the enactment and signing into law of RA 10153 on 30 June 2011, and the filing of the present petitions shortly before and after the signing, rendering impossible the holding of elections on 8 August 2011 as scheduled under RA 9333, is a cause analogous to the administrative mishaps covered in Section 5 of BP 881. The postponement of the ARMM elections was an unavoidable result of the time lag legislative and judicial processes normally entail. The ARMM officials to be elected in the special ARMM elections shall hold office until 30 June 2013, when the terms of office of elective national and local officials covered by the synchronized elections also expire. Electoral and Other Reforms Must be Consistent With Principles of Regional Autonomy and Representative Democracy

Beyond the expressly stated policy in RA 10153 of synchronizing national and local elections, the OSG calls the Courts attention to the governments other policy goals in enacting RA 10153. The OSG presents RA 10153 as the cure for the ills plaguing the ARMM, manifested in the symptoms of padded voters list, rampant criminality and highly dynastic politics, among others. "Genuine regional autonomy," in the OSGs view, starts upon the assumption to office of the newly elected officials on 30 June 2013, when the national government, through the OICs, is done cleaning the ARMM government.77 In the first place, these policy goals to reform the ARMM society are nowhere stated or even implied in RA 10153. Electoral reform is mentioned in the Presidents certificat ion on the urgency of HB 4146 and SB 2756 but RA 10153 itself is silent on such policy goal. The only apparent reason for the enactment of RA 10153 is to synchronize the ARMM elections with the national and local elections, a policy the legislature can pursue even in the absence of a constitutional directive to synchronize all elections. In any event, it is a terribly dangerous precedent for this Court to legitimize the cancelation of scheduled local elections in the ARMM and allow the appointment of OICs in place of elected local officials for the purpose of reforming the ARMM society and curing all social, political and economic ills plaguing it. If this can be done to the ARMM, it can also be done to other regions, provinces, cities and municipalities, and worse, it can even be done to the entire Philippines: cancel scheduled elections, appoint OICs in place of elective officials, all for the ostensible purpose of reforming society a purpose that is perpetually a work-in-progress. This Court cannot allow itself to be co-opted into such a social re-engineering in clear violation of the Constitution. One has to see the problem in the Muslim South in the larger canvass of the Filipino Muslims centuries-old struggle for self-determination. The Muslim problem in southern Mindanao is rooted on the Philippine States failure to craft solutions sensitive to the Filipino Muslims "common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics."78 The framers of the 1987 Constitution, for the first time, recognized these causes and devised a solution by mandating the creation of an autonomous region in Muslim Mindanao, a political accommodation radically vesting State powers to the region, save those withheld by the Constitution and national laws.79 Lying at the heart of this unprecedented empowerment is the Constitutions guarantee that the executive and legislative offices of the autonomous region shall be "be elective and representative of the constituent political units."80 The essence of an autonomous region is the untrammeled right of the people in the region to freely choose those who will govern them. A region is not autonomous if its leaders are not elected by the people of the region but appointed by the central government in Manila. It is the solemn duty of this Court to uphold the genuine autonomy of the ARMM as crafted by the framers and enshrined in the Constitution. Otherwise, our Muslim brothers in the South who justifiably seek genuine autonomy for their region would find no peaceful solution under the Constitution. By disenfranchising voters in the ARMM, even for a single electoral cycle, denying them their fundamental right of electing their leaders and representatives, RA 10153 strikes at the heart of the Constitutions project of creating autonomous regions. In the opinion of the biggest Islamic rebel group in the region, the cancelation of elections under RA 10153 "speaks loudly why this entity [ARMM] is not autonomous; it is controlled, nay dictated, by Manila."81 Contrary to the OSGs view, denial of the right of suffrage is always too high a price to pay in exchange for promised reforms to be undertaken by OICs with no mandate from the people. Incidentally, the OICs to be appointed under RA 10153 are not even barred from running in the next ARMM elections, immediately putting at risk the promised reforms due to obvious conflict of interest.

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The ARMM enjoys no monopoly of the evils the government now belatedly claims it wants to eradicate in passing RA 10153. Private armies and political dynasties litter the length and breadth of this archipelago and spurious voters registration has perennially polluted the national voters list. The solutions to these problems lie not in tinkering with democratic processes but in addressing their root causes. Notably, the government recently upgraded the countrys age -old manual elections into an automated system, ridding the elections of the fraud-prone manual system, without skipping a single electoral cycle. Similarly, the cleansing of the voters list is on track, with the incumbent head of respondent COMELEC himself admitting that the COMELEC is now 65%-70% done with biometrics registration.82 In reviewing legislative measures impinging on core constitutional principles such as democratic republicanism, the Court, as the last bulwark of democracy, must necessarily be deontological. The Court must determine the constitutionality of a law based on the laws adherence to the Constitution, not on the laws supposed beneficial consequences. The laudable ends of legislative measures cannot justify the denial, even if temporal, of the sovereign peoples constitutional right of suffrage to choose freely and periodically "those whom they please to govern them."83 The Court should strike a balance between upholding constitutional imperatives on regional autonomy and republican democratic principles, on the one hand, and the incumbent administrations legislative initiative to synchronize elections, on the other hand. Had it done so here, the Court would have faithfully performed its sworn duty to protect and uphold the Constitution without fear or favor. Accordingly, I vote to GRANT in part the petitions in G.R. Nos. 196271, 197221, 197280, 197282, 197392 and 197454 and declare UNCONSTITUTIONAL Sections 3, 4 and 5 of Republic Act No. 10153. Respondent Commission on Elections should be ordered to hold, as soon as possible, special elections in the Autonomous Region in Muslim Mindanao for the positions of Governor, Vice-Governor and members of the Regional Legislative Assembly. The officials elected in the special elections should hold office until 30 June 2013. Pending the holding of special elections and the assumption to office of the elected ARMM Governor, the President may appoint an officerin-charge in the office of the ARMM Governor. I further vote to declare UNCONSTITUTIONAL the second sentence of Section 7(1), Article VII and Sections 1 and 3, Article XVII of Republic Act No. 9054.

Section 2 of RA 9140 provides: "First Regular Election. - The first regular election for Regional Governor, Vice-Governor and Members of the Regional Legislative Assembly under Republic Act No. 9054 shall be held on November 26, 2001."
5

Section 1 of RA 9333 provides: "Date of Election. The regular election for regional Governor and Regional Vice-Governor and Members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao (ARMM) shall be held on the second Monday of August 2005. Succeeding regular elections shall be held on the same date every three years thereafter." RA 9333 took effect upon its publication on 29 September 2004.
6

Section 1 of HB 4146 provides: "Regular Elections. For purposes of synchronization of elections, which is envisioned by the 1987 Constitution, the regular elections for the Regional Governor, Regional Vice-Governor and Members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao (ARMM) shall be held on the second (2nd) Monday of May 2013. Succeeding regular elections shall be held on the same date every three (3) years thereafter."
7

G.R. Nos. 197221, 197280, 197282, 197392 and 196271 (in a supplemental petition). These provide: Section 1. Consistent with the provisions of the Constitution, this Organic Act may be reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3) of the Members of the House of Representatives and of the Senate voting separately. Section 3. Any amendment to or revision of this Organic Act shall become effective only when approved by a majority of the vote cast in a plebiscite called for the purpose, which shall be held not earlier than sixty (60) days or later than ninety (90) days after the approval of such amendment or revision.

ANTONIO T. CARPIO Associate Justice

G.R. Nos. 197221, 197392, and 197454. G.R. Nos. 196271 and 196305. G.R. No. 197280.

10

11

Footnotes
1

12

For the writs of certiorari, prohibition and mandamus. Section 7, Article XVIII of RA 9054. Section 4, Article VI and Section 7, Article VII of RA 9054.

Petition (G.R. No. 197282), p. 29. The petitioner proceeds from the theory that although unconstitutional, RA 9333 was validated by acquiescence. On the other hand, if the Court were to strike down RA 9333, it is impossible to comply with the election scheduled under RA 9054, the last cycle of which allegedly fell on the second Monday of September 2010. In their Memoranda, the petitioners in G.R. Nos. 196271, G.R. No. 196305, and 197280, conceding the impracticality of holding elections on the second Monday of September this year as they initially espoused, called for the holding of special elections nearest to that schedule or at least this year.

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(Memorandum [G.R. No. 196271], p. 47; Memorandum [G.R. No. 196305], p. 49; Memorandum [G.R. No. 197280], p. 25). Similarly, the petitioners G.R. No. 197221 and G.R. No. 197454, who initially favored holding the elections on the second Monday of August 2011, prayed in their Memoranda that the elections be held as soon as possible. (Memorandum [G.R. No. 197221], p. 76l; Memorandum [G.R. No. 197454, p. 22).
13

21

Section 16(2), Article VI of the Constitution.

22

Section 28(4), Article VI of the Constitution provides: "No law granting any tax exemption shall be passed without the concurrence of a majority of all the Members of Congress." Thus, the rule of a "majority of a majority" to enact, amend or repeal laws does not apply to the grant of tax exemptions. For other cases requiring a qualified or supermajority of Congress, see note 26.
23

Comment (Senate), pp. 5-7.

This is the majority of a quorum of 143. Although the House of Representatives has a total of 285 members, only 284 is considered for quorum purposes.
24

14

Macalawi v. Brillantes, G.R. No. 196270, 31 May 2011, Resolution dismissing for prematurity a petition questioning the validity of HB 4146 and SB 2756; Montesclaros v. COMELEC, 433 Phil. 620 (2002).
15

This is the majority of a quorum of 12. The Senate currently has 23 members.

25

Asociacion De Agricultores De Talisay-Silay, Inc. v. Talisay-Silay Milling Co., Inc., 177 Phil. 247 (1979).
26

Rollo (G.R. No. 197280), pp. 28-30. G.R. No. 115455, 25 August 1994, 235 SCRA 630, 666. The 1987 Constitution requires a qualified or supermajority vote in certain instances, none of which, however, relates to the amendment or repeal of the organic act of the autonomous regions [See Section 23(1), Article VI (to declare war); Section 28(4), Article VI (to grant tax exemption); Section 16(3), Article VI (to expel or suspend a member of either House of Congress); Section 11, Article VII (to break an impasse between the cabinet and the President on the latters capacity to discharge the powers and duties of his office); Section 21, Article VII (for the Senate to concur in treaty ratification); Section 3(6), Article XI (for the Senate to impeach the President); Section 3, Article XVII (to call a constitutional convention)].
27

16

17

Petitioners in G.R. No. 196271 belatedly joined the petitioners in G.R. No. 197280 on this issue, arguing for the first time in their Memorandum that heightened scrutiny of the Presidents certification is warranted because the right to suffrage is basic, thus falling under Tolentinos exemption (Memorandum [G.R. No. 196271], pp. 18-19). The question whether the right to suffrage is fundamental for purposes of using strict scrutiny to review the sufficiency of the factual bases of executive and legislative acts has never been raised before the Court. Our jurisprudence merely advert to the rule in the United States treating such right as fundamental (see e.g. White Light Corporation v. City of Manila, G.R. No. 122846, 20 January 2009, 576 SCRA 416 [reviewing an ordinance prohibiting the certain business practices of motels and similar establishments]; Serrano v. Gallant Maritime Services, Inc., G.R. No. 167614, 24 March 2009, 582 SCRA 254 [reviewing a statutory rule on the reimbursement of placement fees of overseas workers]) or state such rule as dicta (see e.g. ABS-CBN Broadcasting Corporation v. Commission on Elections, 380 Phil. 780 (2000) [reviewing the constitutionality of a regulation prohibiting the conduct of exit polls]). At any rate, Tolentinosexemption relates to "basic rights" put at hazard following the suspension of the writ of habeas corpus or declaration of martial law under Art. VII, 18, or during the existence of a national emergency under Art. VI, 23(2) such as the right against illegal arrests and detentions, right to free speech, assembly and of the press, and right against torture. The right to suffrage lies far afield from this core of fundamental rights the Constitution protects in times of national emergency, war or national security crisis by requiring heightened judicial scrutiny of the assailed measure.
18

Memorandum (G.R. No. 197221), p. 22. The petitioners in G.R. No. 197280 also adopt this view (Memorandum [G.R. No. 197280], p. 46).
28

Or an item or items in an appropriation, revenue or tariff bill. See Section 27(2), Article VI of the Constitution.
29

"Section 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected." In Miranda v. Aguirre, 373 Phil. 386 (1999), the Court extended the plebiscite requirement in the downgrading of a citys status from independent to component city.
30

In local governance, the plebiscite is seen as a check "against the pernicious practice of gerrymandering." Miranda v. Aguirre, supra at 405.
31

Under Section 7, Article VII of RA 9054. Taken to its logical extreme, petitioners interpretation leads to preposterous scenarios. The smallest change to RA 9054 such as mandating its official promulgation (not just translation) into all native dialects widely spoken in the region, amending Section 6, Article VI for the purpose, will be subjected to the rigors and expense of a plebiscite.
32

19

See Republic Act No. 7647, Republic Act No. 8176, Republic Act No. 8746, Republic Act No. 8753, Republic Act No. 8953, and Republic Act No. 9012.
20

Memorandum (G.R. No. 197280), pp. 17-28, 52.

G.R. No. 149848, 25 November 2004, 444 SCRA 203.

109

33

Id. at 225. Id. at 249.

34

governor of the newly-created province through appointment if none has yet been appointed to the same as hereinbefore provided, and shall also appoint a vice-governor and the other members of the sangguniang panlalawigan, all of whom shall likewise hold office until their successors shall have been elected in the next regular local elections and qualified." (Emphasis supplied)
49

35

Under Section 2 ("The Senators, Members of the House of Representatives, and the local officials first elected under this Constitution shall serve until noon of June 30, 1992.") and Section 5 ("The six-year term of the incumbent President and VicePresident elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992. The first regular elections for the President and Vice-President under this Constitution shall be held on the second Monday of May, 1992."), Article XVIII.
36

Section 4 provides: "Manner and Procedure of Appointing Officers-in-Charge.There shall be created a screening committee, whose members shall be appointed by the President, which shall screen and recommend, in consultation with the Speaker of the House of Representatives and the Senate President, the persons who will be appointed as Officers-in-Charge."
50

G.R. No. 100318, 30 July 1991, 199 SCRA 750. Id. at 762.

37

38

Under Section 8, Article X of the Constitution, "[t]he term of office of elective local officials x x x shall be three years," except for barangay officials whose term of office is fixed by law.
39

Section 5 reads: "Qualifications.No person shall be appointed officer-in-charge unless he or she complies with the qualifications for Regional Governor, Regional Vice Governor or Members of the Regional Legislative Assembly of the ARMM, as provided in Republic Act No. 6734, entitled: An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao, as amended by Republic Act No. 9054, entitled: An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No. 6734."
51

Rollo (G.R. No. 196271 Supplemental Petition), p. 20. See Sections 15, 16, 17, 18, 19, 20 and 21, Article X of the Constitution. Section 7, Article VII of RA 9054. Section 1, Article II of the Constitution. G.R. Nos. 197221 and 197282.

Expressed in Section 1, Article II of the Constitution: "The Philippines is a democratic and republican State. x x x"
52

40

41

42

43

Paragraph 1, Section 18, Article X of the Constitution provides: "The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multi-sectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family, and property law jurisdiction consistent with the provisions of this Constitution and national laws."
53

44

Republic Act No. 9495 (RA 9495). The creation of Quezon del Sur Province was rejected by the voters of Quezon Province in the plebiscite of 13 November 2008.
45

Section 2, Article VI and Sections 1 and 4, Article VII of RA 9054.

54

Republic Act No. 9355 (RA 9355). Section 50 of 9355 and Section 52 of RA 9495 (emphasis supplied). Presidential Decree No. 407, Section 3 (emphasis supplied).

46

OSG Memorandum, p. 46. The provision states: "Until a law is passed, the President may fill by appointment from a list of nominees by the respective sectors, the seats reserved for sectoral representation in paragraph (2), Section 5 of Article V1 of this Constitution."
55

47

48

Section 462, paragraph 3 of Republic Act No. 7160 (RA 7160) provides: "The incumbent elected officials of the said subprovinces converted into regular provinces shall continue to hold office until June 30, 1992.Any vacancy occurring in the offices occupied by said incumbent elected officials, or resulting from expiration of their terms of office in case of a negative vote in the plebiscite results, shall be filled by appointment by the President. The appointees shall hold office until their successors shall have been elected in the regular local elections following the plebiscite mentioned herein and qualified. After effectivity of such conversion, the President shall fill up the position of

Section 2, Article III of the Freedom Constitution provides: "All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986."
56

This provides: "Budget Approval; Automatic Reenactment. The Regional Governor shall approve the budget of the autonomous region within one (1) month from its passage by the Regional Assembly. If, by the end of a fiscal year, the Regional Assembly shall have failed to pass the regional appropriations bill for the ensuing fiscal

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year, the Regional Appropriations Act for the preceding fiscal year shall be deemed automatically reenacted and shall remain in force and effect until the regional appropriations bill is passed by the Regional Assembly."
57

68

Section 4, Article VII.

69

Section 4, Article VI. Under RA 7166, Senatorial term commences on 30 June following the elections.
70

Under Section 4 of RA 7160, which provides: "Scope of Application. - This Code shall apply to all provinces, cities, municipalities, barangays, and other political subdivisions as may be created by law, and, to the extent herein provided, to officials, offices, or agencies of the national government." (Emphasis supplied)
58

Section 7, Article VI. Under RA 7166, Congressional term commences on 30 June following the elections.
71

Under the first paragraph of Section 323 of RA 7160 which provides: " Failure to Enact the Annual Appropriations. - In case the sanggunian concerned fails to pass the ordinance authorizing the annual appropriations at the beginning of the ensuing fiscal year, it shall continue to hold sessions, without additional remuneration for its members, until such ordinance is approved, and no other business may be taken up during such sessions. If the sanggunian still fails to enact such ordinance after ninety (90) days from the beginning of the fiscal year, the ordinance authorizing the appropriations of the preceding year shall be deemed reenacted and shall remain in force and effect until the ordinance authorizing the proposed appropriations is passed by the sanggunian concerned. However, only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year shall be deemed reenacted and disbursement of funds shall be in accordance therewith." x x x x (Emphasis supplied)
59

Section 8, Article X.

72

The Codes implementing rules (Section 210(d)(3)) extended the term of the heads of the barangay leagues as ex officio members of sanggunians until 31 May 1994, when their term as punong barangays end under Republic Act No. 6679 (RA 6679). The extension of the ex officio term of these barangay officials, which the Court upheld in Galarosa v. Valencia, G.R. No. 109455, 11 November 1993, 227 SCRA 728, was rendered necessary by the different length of terms of elective barangay officials under RA 6679 (five years starting 1 May 1989) and other elective local officials under the Code (three years starting 30 June 1992). RA 9164 subsequently shortened the term of elective barangay officials to three years. The 1917 Revised Administrative Code authorized elective provincial and municipal officials to "hold over until a successor shall be duly qualified." (under Sections 2074 and 2177, respectively). These provisions were, however, repealed by Commonwealth Act No. 357 (under Section 184).
73

A substantially similar provision is found in Section 8, Article XVIII of RA 9054 which provides: "The incumbent Regional Governor, Regional Vice Governor, and members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao shall continue in office pursuant to existing laws and until their successors shall have been duly elected and qualified."
60

E.g. Bangsamoro Solidarity Movement, Inc. and Minority Rights Forum Philippines, Inc.
61

G.R. No. 160427, 15 September 2004, 438 SCRA 319, reiterated in Adap v. COMELEC, G.R. No. 161984, 21 February 2007, 516 SCRA 403. In Montesclaros v. COMELEC, 433 Phil. 620, 640 (2002), the Court dismissed a premature challenge against the legislative bills for RA 9164 as they relate tosangguniang kabataan members.
74

See Sema v. Commission on Elections, G.R. No. 177597, 16 July 2008, 558 SCRA 700; Paras v. Commission on Elections, 332 Phil. 56, 66 (1996), Davide, J., concurring.
62

Under Republic Act No. 7647, Republic Act No. 8746, Republic Act No. 8753, Republic Act No. 8953, and Republic Act No. 9140.
75

Section 7, Article VII of RA 9054. G.R. No. 100318, 30 July 1991, 199 SCRA 750, 763 (internal citations omitted).

63

The cases invoked by the petitioner in G.R. No. 197282, namely, Sambarani v. Commission on Elections, G.R. No. 160427, 15 September 2004, 438 SCRA 319 and Adap v. Commission on Elections, G.R. No. 161984, 21 February 2007, 516 SCRA 403, are not in point. They all involve barangay officials, whose term of office is fixed by law, not by the Constitution.
76

64

See Board of Elections for Franklin County v. State ex. rel. Schneider, 128 Ohio St. 273, 191 N.E. 115 (1934).
65

Id.

66

This contrasts with some state constitutions in the United States which allow the hold over of elective officials.
67

Section 4, Article VII.

The provision reads in full: "Sec. 5. Postponement of election. - When for any serious cause such as violence, terrorism, loss or destruction of election paraphernalia or records, force majeure, and other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision, the Commission, motu proprio or upon a verified petition by any interested party, and after due notice and hearing, whereby all interested parties are afforded equal opportunity to be heard, shall postpone the election therein to a date which should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause for such postponement or suspension of the election or failure to elect."

111

77

OSG Memorandum, pp. 5-6, 50-58. The Lawphil Project - Arellano Law Foundation Section 15, Article X of the Constitution. Section 20, Article X of the Constitution enumerates these powers, thus: Section 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: 1. Administrative organization; 2. Creation of sources of revenues; 3. Ancestral domain and natural resources; 4. Personal, family, and property relations; 5. Regional urban and rural planning development; 6. Economic, social, and tourism development; 7. Educational policies; 8. Preservation and development of the cultural heritage; and 9. Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region. Section 17, Article X provides: "All powers, functions, and responsibilities not granted by this Constitution or by law to the autonomous regions shall be vested in the National Government." At bar are original actions assailing the validity of statutes and bills on the holding of elections in the Autonomous Region in Muslim Mindanao (ARMM), the latest of which is Republic Act No. (RA) 10153 entitled An Act Providing for the Synchronization of the Elections in the Autonomous Region In Muslim Mindanao (ARMM) with the National and Local Elections and for Other Purposes. RA 10153 provides, in part: SECTION 1. Declaration of Policy.In accordance with the intent and mandate of the Constitution and Republic Act No. 7166, entitled: "An Act Providing for Synchronized National and Local Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and for Other Purposes", it is hereby declared the policy of the State to synchronize national and local elections. Pursuant thereto, the elections in the Autonomous Region in Muslim Mindanao (ARMM) is hereby synchronized with the national and local elections as hereinafter provided. SEC. 2. Regular Elections.The regular elections for the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly of the Autonomous Region in Muslim Mindanao (ARMM) shall be held on the second (2nd) Monday of May 2013. Succeeding regular elections shall be held on the same date every three (3) years thereafter. SEC. 3. Appointment of Officers-in-Charge.The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office. The petitions assailing the validity of RA 10153 argue that (1) the postponement of the ARMM elections to the second Monday of May 2013 undermines the republican and autonomous region of the ARMM, in violation of the Constitution and RA 9054,1 the expanded organic law of ARMM; and (2) granting the President the power to appoint OICs unconstitutionally expands his power over the ARMM to encompass not only general supervision but also control. The ponencia sustains the constitutionality of RA 10153 in toto, while Justice Carpios dissent declares unconstitutional Sections 3, 4, and 5 of RA 10153 authorizing the President to appoint OICs in place of elective ARMM officials, ordering instead the respondent COMELEC "to hold special elections in the ARMM as soon as possible." On this, I am in full agreement with Justice Carpios dissent. VELASCO, JR., J.: I join Justice Carpios dissent and agree that the "[C]ongress power to provide for the simultaneous holding of elections for national and local officials x x x does not encompass the power to authorize the President to appoint officers-in-charge in place of elective officials x x x. To hold otherwise is to sanction the perversion of the Philippine States democratic and republican nature," and so sustain the holdover of the incumbent ARMM officials pending the election and qualification of their successors. DISSENTING OPINION

78

79

80

Section 18, Article X of the Constitution.

81

"MILF To Fight For Self-Determination" reported in http://mindanaoexaminer.com/news.php? news _id=20110810014922 (last visited on 16 September 2011).
82

OSG Memorandum, p. 6.

83

Borja v. Commission on Elections, 356 Phil. 467, 475 (1998) citing U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779, 131 L.Ed.2d 881 (1995).

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But unlike Justice Carpios curious proposal that in the interregnum and pending the holding of special elections, the President has the power to appoint an OIC in the Office of the ARMM Governor, I differ and vote for the holding over of the incumbent pursuant to Sec. 7(1), Article VII of RA 9054, which states: Sec. 7. Terms of Office of Elective Regional Officials. (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice Governor and members of the Regional Assembly shall be for a period of three (3) years, which shall begin at noon on the 30th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in effect until their successors are elected and qualified. (Emphasis supplied.)

Nonetheless, even assuming that the pronouncement in Osmea v. COMELEC on the issue of holdover is not an obiter dictum, the facts of the present case do not justify a similar conclusion, since the rule of stare decisis et non quieta movere states that a principle of law laid down by the court as applicable to a certain state of facts will only be applied to cases involving the same facts.4

A comparison of the factual milieu in Osmea and the instant petition reveals an ocean of dissimilarities. InOsmea, RA 7065 provided for synchronization of the national and local elections in 1995 but it also prescribed that the national elections will be held in May, 1992 while the local elections will be held in November 1992. There is also no provision for the President to appoint OICs. Meanwhile, in RA 10153, the law provided for synchronization in May 2013 but suspended the elections scheduled in August, 2011 and authorized the President to appoint OICs. In view of the substantial and significant differences in the factual setting of the two cases, then it cannot be The ponencia holds that the foregoing provision is unconstitutional in accordance with our previous gainsaid that the Osmea ruling is not a precedent to the instant petitions. ruling in Osmea v. COMELEC.2 However, it must be noted that the issue in Osmea on the power of local elective officials to hold on to their respective positions pending the election of their successors was not the very lis mota of the case. The main issue in Osmea was the proposed Further, the Court in Osmea opined that the holdover of elective officials espoused by RA 7065 desynchronization of the elections. Hence, the statement on the issue of holdover can be violated Sec. 2, Art. XVIII and Sec. 8, Art. X of the Constitution by adopting and applying certain considered a mere obiter dictum that cannot be held a binding judicial precedent. selected American jurisprudence. The assailed obiter dictum reads: To recall, in Osmea, the Congress enacted RA 7056, entitled An Act Providing for the National and Local Elections in 1992, Paving the Way for Synchronized and Simultaneous Elections beginning 1995, and Authorizing Appropriations Therefor. Sec. 2 provided for two (2) separate elections in 1992 as follows: Section 2. Start of Synchronization. - To start the process of synchronization of elections in accordance with the policy herein before declared, there shall be held. (a) An election for President and Vice-President of the Philippines, twenty-four (24) Senators, and all elective Members of the House of Representatives on the second Monday of May 1992; and (b) An election of all provincial, city, and municipal elective officials on the second Monday of November 1992. (Emphasis supplied.) Hence, the Court struck down RA 7056 on the principal ground that it occasioned a desynchronized election, viz: With the clear mandate of the 1987 Constitution to hold synchronized (simultaneous) national and local elections in the second Monday of May, 1992, the inevitable conclusion would be that Republic Act 7056 is clearly violative of the Constitution because it provides for the holding of a desynchronized election. Stated differently, Republic Act 7056 particularly Sections 1 and 2 thereof contravenes Article XVIII, Sections 2 and 5 of the 1987 Constitution. (Emphasis supplied.) Clearly, the determination of the validity of RA 7056 in Osmea relied mainly on the resolution of the issue of the postponement of elections, and the judicial opinion on the issue of holdover was not necessary for the disposition of the case. Since an opinion expressed by the Court in the decision upon a cause "by the way"i.e., incidentally or collaterally, and not directly upon the question before itis not a binding precedent,3 the obiter dictum of the Court in Osmea on the issue of holdover is not a binding judicial doctrine material to the resolution of the issue on desynchronization. [T]here are other provisions of the Constitution violated by RA 7056. For one, there is Section 2, Article XVIII of the Constitution which provides that the local official first elected under the Constitution shall serve until noon of June 30, 1992. But under Sec. 3 of RA 7056, these incumbent local officials shall hold over beyond June 30, 1992 and shall serve until their successors shall have been duly elected and qualified. It has been held that: It is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term, (citing State v. Clark 89 A. 172, 87 Conn537) and when the Constitution fixes the day on which the official term shall begin, there is no legislative authority to continue the office beyond that period, even though the successors fail to qualify with the time. (See 67 CJS p.379, Citing Minn.- State v. McIntosh, 122 N.W. 462, Emphasis supplied) In American Jurisprudence it has been stated as follows: It has been broadly stated that the legislature cannot, by an act postponing the election to fill an office the term of which is limited by the Constitution, extend the term of the incumbent beyond the period as limited by the Constitution. (43 Am Jur., 152, page 13) citing Gemmer v. State, 71 NE 478 Also, there is Section 8, Article X of the Constitution which provides that: The term of office of elective local officials, except barangay officials which shall be determined by law shall be three years and no such official shall serve for more than three consecutive terms x x x. A closer look of the American cases on which the above quoted American Jurisprudence (Am Jur) and Corpus Juris Secundum (CJS) passages were ultimately based, however, reveals that they do not justify the conclusions reached in Osmea and so, with more reason, they are inapplicable to the present case.

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The passage quoted from CJS was based on State v. Clark5 and State v. McIntosh.6 The 1913 case of State v. Clark, however, does not have the same factual milieu as Osmea or this case: the office involved in State v. Clark was not elective but appointive and a successor has already been appointed.7 More importantly, the pivotal issue of the case was whether an appointment for a period beyond the term set by the constitution vests the appointed official with a de jure, as opposed to a de facto, title to occupy the office beyond the constitutionally prescribed period. 8 That is not the issue of the present case. Similarly, State v. McIntosh is not squarely in point with either Osmea or this case involving as it does the validity of an act performed by the outgoing members of the board of county commissioners less than two hours before their successors, who were already elected, were qualified to assume office.9 The principal doctrine laid down in State v. McIntosh was the limitation of the acts performed by outgoing officials to the closing up of pending matters and to matters of necessity, and not to matters naturally pertaining to the official year. The case did not preclude the possibility of a holdover when no successor has yet been elected. In fact, the case intimated that the rule is that in the absence of constitutional restrictions, outgoing officers are entitled to holdover until such time as their successors will qualify. 10 Thus, the cases of Clark and McIntosh cited in Osmea are likewise not precedent to the instant petitions. Indeed, numerous American cases laid down the rule allowing holdover of officials beyond the term set by the Constitution as long as there is no constitutional proscription against it. This is obvious in the CJS passages omitted in Osmea v. COMELEC. The annotation quoted from 67 CJS 379 in Osmea on holding over is incomplete and the full and complete text reads: It is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term and when the Constitution fixes the day on which the official term shall begin, there is no legislative authority to continue the office beyond that period, even though the successors fail to qualify with the time. (Quoted inOsmea) When the legislature has the power to fix the commencement of the term, a provision for holding over under such circumstances is not in violation of a constitutional provision that the term of no officer shall be extended to a longer period than that for which he is elected or appointed, and such a provision, contained in an act creating an office, is not violative of a constitutional provision that the legislature shall not create any office, the tenure of which shall be longer than a prescribed number of years, when a like provision is in the constitution.11(Emphasis supplied.) Furthermore, on the specific topic of "holding over," the CJS provides:

has the power to fix the commencement of the term applies squarely to RA 9054, particularly its assailed Sec. 7, Art. VII which, to reiterate, reads: SEC. 7. Terms of Office of Elective Regional Officials. (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice Governor and members of the Regional Assembly shall be for a period of three (3) years, which shall begin at noon on the 30th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in effect until their successors are elected and qualified. (Emphasis supplied.) It cannot be disputed that the Organic Act of Muslim Mindanao (RA 6734) did not provide for the commencement of the term of the Governor, Deputy Governor and the Members of the Regional Legislative Assembly of ARMM. As such, it falls on the shoulders of Congress to fix the date of elections which power is concededly legislative in nature. In the exercise of this power, Congress enacted RA 9054 which set the elections of the ARMM officials on the second Monday of September 2001. In addition, said law, in the aforequoted Sec. 7, Art. VII of said law provided for the holdover of said officials until their successors shall have been duly elected and qualified. Following the jurisprudence cited in CJS, then the provision of holdover in Sec. 7, Art. VII of RA 9054 is valid and does not offend the Constitution. To restate, "when the legislature has the power to fix the commencement of the term, a provision for holding over under such circumstances is not in violation of a constitutional provision that the term of no officer shall be extended to a longer period than that for which he is elected or appointed, and such a provision x x x is not violative of a constitutional provision that the legislature shall not create any office, the tenure of which shall be longer than a prescribed number of years x x x."14 Ergo, it is clear as day that the holdover provision in RA 9054 is valid and constitutional. More importantly, neither Sec. 2, Art. XVIII or Sec. 8, Art. X of the Constitution contain any provision against a holdover by an elective local official of his office pending the election and qualification of his successor. To recall, Sec. 2, Art. XVIII of the Constitution provides: Section 2. The Senators, Members of the House of Representatives, and the local officials first elected under this Constitution shall serve until noon of June 30, 1992. Of the Senators elected in the elections in 1992, the first twelve obtaining the highest number of votes shall serve for six years and the remaining twelve for three years. (Emphasis supplied.) Similarly, the absence of any prohibition in Sec. 8, Art. X of the Constitution is clear:

The term "holding over" when applied to an officer, implies that the office has a fixed term, and the incumbent is holding over into the succeeding term. Since the public interest ordinarily requires that public offices should be filled at all times without interruption, as a general rule, in the absence of an express or implied constitutional or statutory provision to the contrary, an officer is entitled to hold his office until his successor is appointed or chosen and has qualified. 12 (Emphasis supplied.) As previously explained, the annotation that "it is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term"13 has no application to the instant petitions, because the cases of Clark and McIntosh upon which it is anchored are factually dissimilar to the herein petitions. I point out, however, that the second sentence in the annotation that a provision for holdover is not unconstitutional when the legislature

Section 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. Thus, the Constitution does not bar a holdover situation. Accordingly, Congress may legislate what elective positions can be accorded holdover privilege of the incumbent officials. Also, besides the absence of a constitutional prohibition against a holdover, the legislature was conferred by the Constitution with (1) the power to create the executive and legislative offices in the ARMM, with the sole limitation that they be elective and representative, and therefore, (2) the

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authority to determine the commencement of the term of the ARMM local officials. Hence, in conformity with the foregoing American cases, the holdover clause in Sec. 7(1), Art. VII of RA 9054 is constitutional and must be respected as a valid legislative intent.

Even under the passage quoted by Osmea from Am Jur, the same conclusion can be reached considering that it is not disputed in this case that the possibility of holdover by the ARMM officials is but incidental to the synchronization of the ARMM elections with the national elections. Hence, the holdover of the incumbent ARMM officials can be sustained. Read in full, the passages from the Am Jur provide that a holdover occasioned by a legislation postponing an election, which is not The majority is of the view that if a public office is created by the Constitution with a fixed term or if passed for the sole purpose of extending official terms but which merely effects an extension as an the term of a public office created by Congress is fixed by the Constitution, Congress is devoid of incidental result,15 is valid: any power to change the term of that office. Hence, the holdover of the incumbent officials which amounts to an appointment by Congress is unconstitutional. I beg to disagree. RA 9054, by providing a holdover of the incumbent officials did NOT extend the term of said officials. RA 9054 It has been broadly stated that the legislature cannot, by an act postponing the election to fill an is clear and devoid of any equivocation. The law merely provided for a procedure in case the office the term of which is limited by the Constitution, extend the term of the incumbent beyond the scheduled elections for one reason or another do not push through and COMELEC resets the period as limited by the Constitution. (Quoted in Osmea). It has been declared, however, that elections pursuant to its power under Sec. 5 of the Omnibus Election Code (Batas Pambansa Blg. legislation postponing an election which is not passed for the sole purpose of extending official 881). The possibility of a vacuum in the performance of essential government services is terms, but which merely effects an extension as an incidental result, does not affect a legislative addressed by the holdover provision to avoid any uncertainty, as in this case, as to the procedure appointment of his successor. In this respect, however, a distinction is sometimes drawn between on how the gap is resolved in determining the interim official who will perform the functions of the constitutional and statutory offices. Postponement of an election by the legislature does not fly in incumbent. As aptly pointed out by Justice Carpio in his dissent, the necessity of providing for a the face of the Constitution so long as such postponement is reasonable and does not destroy the successor in the office contested in the last elections in case of failure of elections is "absolutely 16 elective character of the office affected. (Emphasis supplied.) necessary and unavoidable to keep functioning essential government services." The part quoted by Osmea v. COMELEC does not apply to the case at bar, since the facts of the cases from which the quoted sentence was culledGemmer v. State,17 State ex rel. Hensley v. Plasters,18 and Commonwealth v. Gamble19 are not the same as either the facts of Osmea v. COMELEC or the present case: in Gemmer v. State the holdover of the officials per se was not declared invalid, rather, since the date of election was specifically provided in the states constitution, the court found the postponement of the elections invalid and unconstitutional and so declared the holdover incidental to the postponement unnecessary and equally invalid; similarly, State ex rel. Hensley v. Plasters involved a nullification of the postponement of an election and, hence, the nullification of the incidental holdover; and Commonwealth v. Gamble principally involved the declaration of the abolition of a judicial office created by the constitution as an unwarranted intrusion by the legislature into judicial independence. Clearly, the passage from the Am Jur quoted by Osmea v. COMELEC and the cases of Gemmer, Hensley, and Gamble cited in Am Jur cannot be considered applicable to the present case. Furthermore, it should be considered that a holdover is not technically an extension of the term of the officer but a recognition of the incumbent as a de facto officer, which is made imperative by the necessity for a continuous performance of public functions. In State v. Clark, the Supreme Court of Errors of Connecticut held: The claim of the respondent that it was his right and his duty to hold over and exercise the duties and functions of the office after the expiration of his term until his successor should be appointed may be conceded. The public interest requires that such officers shall hold over when no successor is ready and qualified to fill the office x x x. The rule has grown out of the necessities of the case, so that there may be no time when such offices shall be without an incumbent. But such hold-over incumbent is not a de jure officer. He is in for no term, but holds the office only temporarily until the vacancy can be filled by competent authority x x x.20 (Emphasis supplied.) Thus, considering the weight of authority and the circumstances of the present case, the incumbent ARMM officials have the right, as well as the duty, to continue in office under the And to reiterate a previous point, a holdover is not technically an extension of the term of a sitting officer but a recognition of the incumbent as a de facto officer made necessary to obviate a detrimental hiatus in public service. A scenario where Congress passes a law that provides holdover for all the elective officials (except barangay officials) from President down to the local officials is flawed in the sense that if the President does not qualify, Sec. 7, Art. VII of the Constitution kicks in. However, we can concede that Congress may so provide if the President is not elected. In this factual setting, it is claimed that the Congress has arrogated to itself the power to lengthen the terms of office of said officials in contravention of the Constitution. Again, I submit that the power of holdover in the imagined statute does NOT lengthen the prescribed terms of offices of said officials under the Constitution, unless said law also postpones the elections as in RA 10153. In such a case, I agree that the postponement of the elections and the attendant holdover provision are clear contraventions of the basic law. In RA 9054, however, the elections are fixed but with the corollary holdover provision in case elections are not held. To me, this is perfectly valid and constitutional. To reiterate, the holdover provision has no relevance to the prescribed terms of offices in the Constitution and is simply a temporary measure to avoid a vacuum in the office. Further, while the Local Government Code does not authorize the holdover of elective officials, there is nothing to prevent Congress from subsequently enacting a law that effectively amends the general law for local governments and empowers, pursuant to its law making power under the Constitution, local officials to hold over in case of failure of elections or in case all the elective officials failed to qualify. RA 9054 did not trench on the Constitution, because there is no prohibition in the Constitution against the holdover of elective officials. Consequently, Congress by law may provide for holdover as it did in RA 9054 and other laws postponing elections in the ARMM, namely, RA 7647, RA 8746, RA 8753, RA 8953 and RA 9140. Over the passage of time, these laws were not assailed as unconstitutional. Even up to the present time, these laws have not been challenged as void. As a matter of fact, it appears that not one of the petitioners sought the nullification of RA 9054 as unconstitutional. The Court, without such an issue being presented in

principle of holdover pending the holding of the special elections and the election and qualification of their successors. This is to prevent a vacuum in the government services. It is imperative that there shall be continuity in the vital services so as not to prejudice the public in general. In Adap v. COMELEC,21 it was held that "the application of the holdover principle preserves continuity in the transaction of official business and prevents hiatus in government pending the assumption of a successor into office." In Topacio Nuevo v. Angeles,22 the Court explained that cases of extreme necessity justify the application of the holdover principle.

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any of these fused petitions, should not declare the assailed portion of RA 9054 unconstitutional. However, even if the Court feels it proper to take the bull by the horns on that issue, the outcome will be in favor of the validity and constitutionality of Sec. 7, Art. VII of RA 9054. The alternative choice to allow the President to appoint the ARMM Governor pending the holding of the special elections is not only intrinsically infirm but also constitutionally invalid for violating the only limitation provided by the Constitution when it conferred on Congress the power to create the local offices of the ARMM. Sec. 18(1), Art. X of the Constitution provides: The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multi-sectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family, and property law jurisdiction consistent with the provisions of this Constitution and national laws. (Emphasis supplied.) Considering the express requirement that the executive and legislative offices in the ARMM be both "elective and representative," it should not have even been contemplated to allow the President to substitute his discretion for the will of the electorate by allowing him to appoint, no matter how briefly, the ARMM Governor pending the holding of the special elections. As can be clearly gleaned from Sect. 16, Art. VII of the Constitution, the appointing power of the President is limited only to appointive offices. Consider: Section 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in him in this Constitution. He shall also appoint all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint. The Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the heads of departments, agencies, commissions, or boards. (Emphasis supplied.) Hence, this Court cannot expand the appointing power of the President to encompass offices expressly required by the Constitution to be "elective and representative." The republican form of government can only be preserved by ensuring that elective offices can only be filled by persons voted by the electors. Even the ponencia recognizes that the grant of the power to appoint the ARMM officials to the President would trample on the democratic and republican nature of our government as "the peoples right to choose the leaders to govern them may be said to be systematically withdrawn to the point of fostering an undemocratic regime x x x. [It] would likewise frontally breach the elective and representative governance requirement of Section 18 Article X of the Constitution." However, the ponencia evades the application of its own observation to the present case on the ground that "this conclusion would not be true under the very limited circumstances contemplated under RA

10153 where the period is fixed and, more importantly, the terms of governance x x x will not systematically be touched or affected at all." Clearly, the ponencia has discounted the consequences of this supposedly "limited" enroachment of the President into the very core of the "elective" and "representative" nature of the offices subject of the present petitions, which cannot be remedied by provisions setting the manner and procedure for the appointment of the OICs or their quaifications. The fact still remains that Secs. 3, 4, and 5 of RA 10153 deprive the ARMM electorate of their choice of governors and legislators. Meanwhile, the holdover provision will not affect the elective and representative nature of the contested offices. For one, the periodic elections are prescribed by law and must be implemented. Even if there is failure of elections on the scheduled dates, COMELEC can set another day when it will be held. With this power of the COMELEC, the elections will, as sure as day, be held. Thus, the assurance of having an election has no relevance or connection to the holdover provision. The mode of holdover is merely a stopgap solution whenever elections are not held and only for the period from the date of failed elections up to the eventual holding of the elections. If we are to ensure democratic values, then the holding over of a duly elected official is undeniably the proper remedial action than the appointment of OICs who were not elected by the people and were merely chosen by the President whose choices may be viewed, rightly or wrongly, as biased, he being the titular head of the administration political party. Indeed, the appointment of a person by the President thwarts the popular will by replacing the person who has been previously elected by the ARMM electorate to govern them. On the other hand, an approval of the holdover of the incumbents pending the election and qualification of their successsors is a ratification of the constitutional right of the people of the ARMM to select the their own officials. With more reason, the authority granted the President to appoint the ARMM Governor cannot be excused by an expanded interpretation of the Presidents power of "general supervision" over local governments in Sec. 4, Art. X of the Constitution, as it is basic that "general supervision" does NOT authorize the President or any of his alter egos to interfere with local affairs. In Pimentel v. Aguirre,23 We explained the scope of the power of the general supervision, thus: Section 4 of Article X of the Constitution confines the Presidents power over local governments to one of general supervision. It reads as follows: "Sec. 4. The President of the Philippines shall exercise general supervision over local governments. x x x" This provision has been interpreted to exclude the power of control. In Mondano v. Silvosa, the Court contrasted the Presidents power of supervision over local government officials with that of his power of control over executive officials of the national government. It was emphasized that the two terms -- supervision and control -- differed in meaning and extent. The Court distinguished them as follows: "x x x In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside

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what a subordinate officer ha[s] done in the performance of his duties and to substitute the judgment of the former for that of the latter." G.R. No. 197528 In Taule v. Santos, we further stated that the Chief Executive wielded no more authority than that of checking whether local governments or their officials were performing their duties as provided by the fundamental law and by statutes. He cannot interfere with local governments, so long as they act within the scope of their authority. "Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority over such body," we said. In a more recent case, Drilon v. Lim, the difference between control and supervision was further delineated. Officers in control lay down the rules in the performance or accomplishment of an act. If these rules are not followed, they may, in their discretion, order the act undone or redone by their subordinates or even decide to do it themselves. On the other hand, supervision does not cover such authority. Supervising officials merely see to it that the rules are followed, but they themselves do not lay down such rules, nor do they have the discretion to modify or replace them. If the rules are not observed, they may order the work done or redone, but only to conform to such rules. They may not prescribe their own manner of execution of the act. They have no discretion on this matter except to see to it that the rules are followed. Under our present system of government, executive power is vested in the President. The members of the Cabinet and other executive officials are merely alter egos. As such, they are subject to the power of control of the President, at whose will and behest they can be removed from office; or their actions and decisions changed, suspended or reversed. In contrast, the heads of political subdivisions are elected by the people. Their sovereign powers emanate from the electorate, to whom they are directly accountable. By constitutional fiat, they are subject to the Presidents supervision only, not control, so long as their acts are exercised within the sphere of their legitimate powers. By the same token, the President may not withhold or alter any authority or power given them by the Constitution and the law. (Emphasis supplied.) Clearly, the President cannot fill the executive and legislative ARMM Offices by appointment, even temporarily and pending the holding of the special elections. Such action will not only be outside the scope of his constitutional authority to do so, but also further violates the principle of local autonomy, nullifies the will of the electorate, and contravenes the only limitation set by the Constitutionthat the offices of the executive and legislative ARMM officials be "elective" and "representative." Thus, as between the holdover provision per Sec. 7(1), Art. VII of RA 9054 and the nebulous unconstitutional exercise of the general supervision of the President to appoint the officers of ARMM, I submit that the holdover provision is undeniably superior, valid, constitutional, and anchored on relevant constitutional provision, pertinent laws, and foreign and local jurisprudence. I, therefore, vote to allow the holdover of the ARMM officials pending the holding of the special elections and the election and qualification of their successors, and for the holding of the special elections within three (3) months from the finality of the decision. Consequently, Sec. 7(1), Art. VII of RA 9054 is valid and constitutional. In other respects, I join the dissent of Justice Carpio. PRESBITERO J. VELASCO, JR. Associate Justice

SECOND DIVISION September 5, 2012

PERT/CPM MANPOWER EXPONENT CO., INC., Petitioner, vs. ARMANDO A. VINUY A, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA,. JR., ROBELITO S. ANIPAN, VIRGILIO R. ALCANTARA, MARINO M. ERA, SANDY 0. ENJAMBRE and NOEL T. LADEA, Respondents. DECISION BRION, J.: We resolve the present petition for review on certiorari1 assailing the decision2 dated May 9, 2011 and the resolution3dated June 23, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 114353. The Antecedents On March 5, 2008, respondents Armando A. Vinuya, Louie M. Ordovez, Arsenio S. Lumanta, Jr., Robelito S. Anipan, Virgilio R. Alcantara, Marino M. Era, Sandy O. Enjambre and Noel T. Ladea (respondents) filed a complaint for illegal dismissal against the petitioner Pert/CPM Manpower Exponent Co., Inc. (agency), and its President Romeo P. Nacino. The respondents alleged that the agency deployed them between March 29, 2007 and May 12, 2007 to work as aluminum fabricator/installer for the agencys principal, Modern Metal Solution LLC/MMS Modern Metal Solution LLC (Modern Metal) in Dubai, United Arab Emirates. The respondents employment contracts,4 which were approved by the Philippine Overseas Employment Administration (POEA), provided for a two-year employment, nine hours a day, salary of 1,350 AED with overtime pay, food allowance, free and suitable housing (four to a room), free transportation, free laundry, and free medical and dental services. They each paid a P 15,000.00 processing fee.5 On April 2, 2007, Modern Metal gave the respondents, except Era, appointment letters 6 with terms different from those in the employment contracts which they signed at the agencys office in the Philippines. Under the letters of appointment, their employment was increased to three years at 1,000 to 1,200 AED and food allowance of 200 AED. The respondents claimed that they were shocked to find out what their working and living conditions were in Dubai. They were required to work from 6:30 a.m. to 6:30 p.m., with a break of only one hour to one and a half hours. When they rendered overtime work, they were most of the time either underpaid or not paid at all. Their housing accommodations were cramped and were shared with 27 other occupants. The lodging house was in Sharjah, which was far from their jobsite in Dubai, leaving them only three to four hours of sleep a day because of the long hours of travel to and from their place of work; there was no potable water and the air was polluted.

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When the respondents received their first salaries (at the rates provided in their appointment letters and with deductions for placement fees) and because of their difficult living and working conditions, they called up the agency and complained about their predicament. The agency assured them that their concerns would be promptly addressed, but nothing happened. On May 5, 2007, Modern Metal required the respondents to sign new employment contracts,7 except for Era who was made to sign later. The contracts reflected the terms of their appointment letters. Burdened by all the expenses and financial obligations they incurred for their deployment, they were left with no choice but to sign the contracts. They raised the matter with the agency, which again took no action. On August 5, 2007, despondent over their unbearable living and working conditions and by the agencys inaction, the respondents expressed to Modern Metal their desire to resign. Out of fear, as they put it, that Modern Metal would not give them their salaries and release papers, the respondents, except Era, cited personal/family problems for their resignation. 8 Era mentioned the real reason "because I dont (sic) want the company policy"9 for his resignation. It took the agency several weeks to repatriate the respondents to the Philippines. They all returned to Manila in September 2007. Except for Ordovez and Enjambre, all the respondents shouldered their own airfare. For its part, the agency countered that the respondents were not illegally dismissed; they voluntarily resigned from their employment to seek a better paying job. It claimed that the respondents, while still working for Modern Metal, applied with another company which offered them a higher pay. Unfortunately, their supposed employment failed to materialize and they had to go home because they had already resigned from Modern Metal. The agency further alleged that the respondents even voluntarily signed affidavits of quitclaim and release after they resigned. It thus argued that their claim for benefits, under Section 10 of Republic Act No. (R.A.) 8042, damages and attorneys fees is unfounded. The Compulsory Arbitration Rulings On April 30, 2008, Labor Arbiter Ligerio V. Ancheta rendered a Decision10 dismissing the complaint, finding that the respondents voluntarily resigned from their jobs. He also found that four of them Alcantara, Era, Anipan and Lumanta even executed a compromise agreement (with quitclaim and release) before the POEA. He considered the POEA recourse a case of forum shopping. The respondents appealed to the National Labor Relations Commission (NLRC). They argued that the labor arbiter committed serious errors in (1) admitting in evidence the quitclaims and releases they executed in Dubai, which were mere photocopies of the originals and which failed to explain the circumstances behind their execution; (2) failing to consider that the compromise agreements they signed before the POEA covered only the refund of their airfare and not all their money claims; and (3) ruling that they violated the rule on non-forum shopping. On May 12, 2009, the NLRC granted the appeal. It ruled that the respondents had been illegally dismissed. It anchored its ruling on the new employment contracts they were made to sign in Dubai. It stressed that it is illegal for an employer to require its employees to execute new
11

employment papers, especially those which provide benefits that are inferior to the POEAapproved contracts. The NLRC rejected the quitclaim and release executed by the respondents in Dubai. It believed that the respondents executed the quitclaim documents under duress as they were afraid that they would not be allowed to return to the Philippines if they did not sign the documents. Further, the labor tribunal disagreed with the labor arbiters opinion that the compromise agreement they executed before the POEA had effectively foreclosed the illegal dismissal complaint before the NLRC and that the respondents had been guilty of forum shopping. It pointed out that the POEA case involved pre-deployment issues; whereas, the complaint before the NLRC is one for illegal dismissal and money claims arising from employment. Consequently, the NLRC ordered the agency, Nacino and Modern Metal to pay, jointly and severally, the respondents, as follows: WHEREFORE, the Decision dated 30 April 2008 is hereby REVERSED and SET ASIDE, a new Decision is hereby issued ordering the respondents PERT/CPM MANPOWER EXPONENTS CO., INC., ROMEO NACINO, and MODERN METAL SOLUTIONS, INC. to jointly and severally, pay the complainants the following:

Employee

Underpaid Salary

Placement fee

Salary for the unexpired portion of the contract (1350 x 6 months) 8100 AED 8100 AED 8100 AED 8100 AED 8100 AED 8100 AED 8100 AED 8100 AED

Exemplary Damages

Vinuya, ARMANDO Alcantara VIRGILIO Era, MARINO Ladea, NOEL Ordovez, LOUIE Anipan, ROBELITO Enjambre, SANDY Lumanta, ARSENIO

150 x 6 = 900 AED 150 X 4 = 600 AED 350 x 4 = 1400 AED 150 x 5 = 750 AED 250 X 3 = 750 AED 150 x 4 = 600 AED 150 x 4 = 600 AED 250 x 5 = 1250 AED

USD 400 USD 400 USD 400 USD 400 USD 400 USD 400 USD 400 USD 400

P 20,000.00 P 20,000.00 P 20,000.00 P 20,000.00 P 20,000.00 P 20,000.00 P 20,000.00 P 20,000.00

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TOTAL:

6,850 AED

US$3,200

64,800 AED

P 400,000.00

Anipan, ROBELITO

2 years

3 April 2007

8 August 2007

20 months and 5 days

or their peso equivalent at the time of actual payment plus attorneys fees equivalent to 10% of the judgment award.12 The agency moved for reconsideration, contending that the appeal was never perfected and that the NLRC gravely abused its discretion in reversing the labor arbiters decision.The respondents, on the other hand, moved for partial reconsideration, maintaining that their salaries should have covered the unexpired portion of their employment contracts, pursuant to the Courts ruling in Serrano v. Gallant Maritime Services, Inc.13 The NLRC denied the agencys motion for reconsideration, but granted the respondents motion.14 It sustained the respondents argument that the award needed to be adjusted, particularly in relation to the payment of their salaries, consistent with the Courts ruling in Serrano. The ruling declared unconstitutional the clause, "or for three (3) months for every year of the unexpired term, whichever is less," in Section 10, paragraph 5, of R.A. 8042, limiting the entitlement of illegally dismissed overseas Filipino workers to their salaries for the unexpired term of their contract or three months, whichever is less. Accordingly, it modified its earlier decision and adjusted the respondents salary entitlement based on the following matrix:

Enjambre, SANDY

2 years

29 March 2007

26 July 2007

20 months and 3 days

Lumanta, ARSENIO

2 years

29 March 2007

8 August 2007

19 months and 21 days15

Again, the agency moved for reconsideration, reiterating its earlier arguments and, additionally, questioning the application of the Serrano ruling in the case because it was not yet final and executory. The NLRC denied the motion, prompting the agency to seek recourse from the CA through a petition for certiorari. The CA Decision The CA dismissed the petition for lack of merit.16 It upheld the NLRC ruling that the respondents were illegally dismissed. It found no grave abuse of discretion in the NLRCs rejection of the respondents resignation letters, and the accompanying quitclaim and release affidavits, as proof of their voluntary termination of employment. The CA stressed that the filing of a complaint for illegal dismissal is inconsistent with resignation. Moreover, it found nothing in the records to substantiate the agencys contention that the respondents resignation was of their own accord; on the contrary, it considered the resignation letters "dubious for having been lopsidedly-worded to ensure that the petitioners (employers) are free from any liability."17 The appellate court likewise refused to give credit to the compromise agreements that the respondents executed before the POEA. It agreed with the NLRCs conclusion that the agreements pertain to the respondents charge of recruitment violations against the agency distinct from their illegal dismissal complaint, thus negating forum shopping by the respondents. Lastly, the CA found nothing legally wrong in the NLRC correcting itself (upon being reminded by the respondents), by adjusting the respondents salary award on the basis of the unexpired portion of their contracts, as enunciated in the Serrano case. The agency moved for, but failed to secure, a reconsideration of the CA decision. 18 The Petition

Employee

Duration of Contract

Departure date

Date dismissed

Unexpired portion of contract

Vinuya, ARMANDO

2 years

29 March 2007

8 August 2007

19 months and 21 days

Alcantara, VIRGILIO

2 years

3 April 2007

8 August 2007

20 months and 5 days

Era, MARINO

2 years

12 May 2007

8 August 2007

21 months and 4 days

Ladea, NOEL

2 years

29 March 2007

8 August 2007

19 months and 21 days

Ordovez, LOUIE

2 years

3 April 2007

26 July 2007

21 months and 23 days

The agency is now before the Court seeking a reversal of the CA dispositions, contending that the CA erred in:

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1. affirming the NLRCs finding that the respondents were illegally dismissed; 2. holding that the compromise agreements before the POEA pertain only to the respondents charge of recruitment violations against the agency; and 3. affirming the NLRCs award to the respondents of their salaries for the unexpired portion of their employment contracts, pursuant to the Serrano ruling. The agency insists that it is not liable for illegal dismissal, actual or constructive. It submits that as correctly found by the labor arbiter, the respondents voluntarily resigned from their jobs, and even executed affidavits of quitclaim and release; the respondents stated family concerns for their resignation. The agency posits that the letters were duly proven as they were written unconditionally by the respondents. It, therefore, assails the conclusion that the respondents resigned under duress or that the resignation letters were dubious. The agency raises the same argument with respect to the compromise agreements, with quitclaim and release, it entered into with Vinuya, Era, Ladea, Enjambre, Ordovez, Alcantara, Anipan and Lumanta before the POEA, although it submitted evidence only for six of them. Anipan, Lumanta, Vinuya and Ladea signing one document;19Era20 and Alcantara21 signing a document each. It points out that the agreement was prepared with the assistance of POEA Conciliator Judy Santillan, and was duly and freely signed by the respondents; moreover, the agreement is not conditional as it pertains to all issues involved in the dispute between the parties. On the third issue, the agency posits that the Serrano ruling has no application in the present case for three reasons. First, the respondents were not illegally dismissed and, therefore, were not entitled to their money claims. Second, the respondents filed the complaint in 2007, while the Serrano ruling came out on March 24, 2009. The ruling cannot be given retroactive application. Third, R.A. 10022, which was enacted on March 8, 2010 and which amended R.A. 8042, restored the subject clause in Section 10 of R.A. 8042, declared unconstitutional by the Court. The Respondents Position In their Comment (to the Petition) dated September 28, 2011,22 the respondents ask the Court to deny the petition for lack of merit. They dispute the agencys insistence that they resigned voluntarily. They stand firm on their submission that because of their unbearable living and working conditions in Dubai, they were left with no choice but to resign. Also, the agency never refuted their detailed narration of the reasons for giving up their employment. The respondents maintain that the quitclaim and release affidavits, 23 which the agency presented, betray its desperate attempt to escape its liability to them. They point out that, as found by the NLRC, the affidavits are ready-made documents; for instance, in Lumantas24 and Eras25 affidavits, they mentioned a certain G & A International Manpower as the agency which recruited them a fact totally inapplicable to all the respondents. They contend that they had no choice but to sign the documents; otherwise, their release papers and remaining salaries would not be given to them, a submission which the agency never refuted. On the agencys second line of defense, the compromise agreement (with qui tclaim and release) between the respondents and the agency before the POEA, the respondents argue that the agreements pertain only to their charge of recruitment violations against the agency. They add that based on the agreements, read and considered entirely, the agency was discharged only with

respect to the recruitment and pre-deployment issues such as excessive placement fees, nonissuance of receipts and placement misrepresentation, but not with respect to post-deployment issues such as illegal dismissal, breach of contract, underpayment of salaries and underpayment and nonpayment of overtime pay. The respondents stress that the agency failed to controvert their contention that the agreements came about only to settle their claim for refund of their airfare which they paid for when they were repatriated. Lastly, the respondents maintain that since they were illegally dismissed, the CA was correct in upholding the NLRCs award of their salaries for the unexpired portion of their employment contracts, as enunciated in Serrano. They point out that the Serrano ruling is curative and remedial in nature and, as such, should be given retroactive application as the Court declared in Yap v. Thenamaris Ships Management.26 Further, the respondents take exception to the agencys contention that the Serrano ruling cannot, in any event, be applied in the present case in view of the enactment of R.A. 10022 on March 8, 2010, amending Section 10 of R.A. 8042. The amendment restored the subject clause in paragraph 5, Section 10 of R.A. 8042 which was struck down as unconstitutional in Serrano. The respondents maintain that the agency cannot raise the issue for the first time before this Court when it could have raised it before the CA with its petition for certiorari which it filed on June 8, 2010;27 otherwise, their right to due process will be violated. The agency, on the other hand, would later claim that it is not barred by estoppel with respect to its reliance on R.A. 10022 as it raised it before the CA in CA-G.R. SP No. 114353.28 They further argue that RA 10022 cannot be applied in their case, as the law is an amendatory statute which is, as a rule, prospective in application, unless the contrary is provided.29 To put the issue to rest, the respondents ask the Court to also declare unconstitutional Section 7 of R.A. 10022. Finally, the respondents submit that the petition should be dismissed outright for raising only questions of fact, rather than of law. The Courts Ruling The procedural question We deem it proper to examine the facts of the case on account of the divergence in the factual conclusions of the labor arbiter on the one hand, and, of the NLRC and the CA, on the other.30 The arbiter found no illegal dismissal in the respondents loss of employment in Dubai because they voluntarily resigned; whereas, the NLRC and the CA adjudged them to have been illegally dismissed because they were virtually forced to resign. The merits of the case We find no merit in the petition. The CA committed no reversible error and neither did it commit grave abuse of discretion in affirming the NLRCs illegal dismissal ruling. The agency and its principal, Modern Metal, committed flagrant violations of the law on overseas employment, as well as basic norms of decency and fair play in an employment relationship, pushing the respondents to look for a better employment and, ultimately, to resign from their jobs.

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First. The agency and Modern Metal are guilty of contract substitution. The respondents entered into a POEA-approved two-year employment contract,31 with Modern Metal providing among others, as earlier discussed, for a monthly salary of 1350 AED. On April 2, 2007, Modern Metal issued to them appointment letters32 whereby the respondents were hired for a longer three-year period and a reduced salary, from 1,100 AED to 1,200 AED, among other provisions. Then, on May 5, 2007, they were required to sign new employment contracts 33 reflecting the same terms contained in their appointment letters, except that this time, they were hired as "ordinary laborer," no longer aluminum fabricator/installer. The respondents complained with the agency about the contract substitution, but the agency refused or failed to act on the matter. The fact that the respondents contracts were altered or substituted at the workplace had never been denied by the agency.1wphi1 On the contrary, it admitted that the contract substitution did happen when it argued, "as to their claim for underpayment of salary, their original contract mentioned 1350 AED monthly salary, which includes allowance while in their Appointment Letters, they were supposed to receive 1,300 AED. While there was a difference of 50 AED monthly, the same could no longer be claimed by virtue of their Affidavits of Quitclaims and Desistance." 34 Clearly, the agency and Modern Metal committed a prohibited practice and engaged in illegal recruitment under the law. Article 34 of the Labor Code provides: Art. 34. Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of authority: xxxx (i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor. Further, Article 38 of the Labor Code, as amended by R.A. 8042, 35 defined "illegal recruitment" to include the following act: (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment. Second. The agency and Modern Metal committed breach of contract. Aggravating the contract substitution imposed upon them by their employer, the respondents were made to suffer substandard (shocking, as they put it) working and living arrangements. Both the original contracts the respondents signed in the Philippines and the appointment letters issued to them by Modern Metal in Dubai provided for free housing and transportation to and from the jobsite. The original contract mentioned free and suitable housing.36 Although no description of the housing was made in the letters of appointment except: "Accommodation: Provided by the company," it is but reasonable to think that the housing or accommodation would be "suitable." As earlier pointed out, the respondents were made to work from 6:30 a.m. to 6:30 p.m., with a meal break of one to one and a half hours, and their overtime work was mostly not paid or underpaid. Their living quarters were cramped as they shared them with 27 other workers. The lodging house was in Sharjah, far from the jobsite in Dubai, leaving them only three to four hours

of sleep every workday because of the long hours of travel to and from their place of work, not to mention that there was no potable water in the lodging house which was located in an area where the air was polluted. The respondents complained with the agency about the hardships that they were suffering, but the agency failed to act on their reports. Significantly, the agency failed to refute their claim, anchored on the ordeal that they went through while in Modern Metals employ. Third. With their original contracts substituted and their oppressive working and living conditions unmitigated or unresolved, the respondents decision to resign is not surprising. They were compelled by the dismal state of their employment to give up their jobs; effectively, they were constructively dismissed. A constructive dismissal or discharge is "a quitting because continued employment is rendered impossible, unreasonable or unlikely, as, an offer involving a demotion in rank and a diminution in pay."37 Without doubt, the respondents continued employment with Modern Metal had become unreasonable. A reasonable mind would not approve of a substituted contract that pays a diminished salary from 1350 AED a month in the original contract to 1,000 AED to 1,200 AED in the appointment letters, a difference of 150 AED to 250 AED (not just 50 AED as the agency claimed) or an extended employment (from 2 to 3 years) at such inferior terms, or a "free and suitable" housing which is hours away from the job site, cramped and crowded, without potable water and exposed to air pollution. We thus cannot accept the agencys insistence that the respondents voluntarily resigned since they personally prepared their resignation letters38 in their own handwriting, citing family problems as their common ground for resigning. As the CA did, we find the resignation letters "dubious,"39 not only for having been lopsidedly worded to ensure that the employer is rendered free from any liability, but also for the odd coincidence that all the respondents had, at the same time, been confronted with urgent family problems so that they had to give up their employment and go home. The truth, as the respondents maintain, is that they cited family problems as reason out of fear that Modern Metal would not give them their salaries and their release papers. Only Era was bold enough to say the real reason for his resignation to protest company policy. We likewise find the affidavits40of quitclaim and release which the respondents executed suspect. Obviously, the affidavits were prepared as a follow through of the respondents supposed voluntary resignation. Unlike the resignation letters, the respondents had no hand in the preparation of the affidavits. They must have been prepared by a representative of Modern Metal as they appear to come from a standard form and were apparently introduced for only one purpose to lend credence to the resignation letters. In Modern Metals haste, however, to secure the respondents affidavits, they did not check on the model they used. Thus, Lumantas affidavit41mentioned a G & A International Manpower as his recruiting agency, an entity totally unknown to the respondents; the same thing is true for Eras affidavit. 42 This confusion is an indication of the employers hurried attempt to avoid liability to the respondents. The respondents position is well-founded. The NLRC itself had the same impression, which we find in order and hereunder quote: The acts of respondents of requiring the signing of new contracts upon reaching the place of work and requiring employees to sign quitclaims before they are paid and repatriated to the Philippines are all too familiar stories of despicable labor practices which our employees are subjected to abroad. While it is true that quitclaims are generally given weight, however, given the facts of the case, We are of the opinion that the complainants-appellants executed the same under duress and fear that they will not be allowed to return to the Philippines.43

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Fourth. The compromise agreements (with quitclaim and release)44 between the respondents and the agency before the POEA did not foreclose their employer-employee relationship claims before the NLRC. The respondents, except Ordovez and Enjambre, aver in this respect that they all paid for their own airfare when they returned home45 and that the compromise agreements settled only their claim for refund of their airfare, but not their other claims.46 Again, this submission has not been refuted or denied by the agency. On the surface, the compromise agreements appear to confirm the agencys position, yet a closer examination of the documents would reveal their true nature. Copy of the compromise agreement is a standard POEA document, prepared in advance and readily made available to parties who are involved in disputes before the agency, such as what the respondents filed with the POEA ahead (filed in 2007) of the illegal dismissal complaint before the NLRC (filed on March 5, 2008).

paragraph, Section 10 of R.A. 8042. The amendment, contained in Section 7 of R.A. 10022, reads as follows: In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant workers salary, the worker shall be entitled to the full reimbursement "of" his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.52 (emphasis ours) This argument fails to persuade us. Laws shall have no retroactive effect, unless the contrary is provided.53 By its very nature, the amendment introduced by R.A. 10022 restoring a provision of R.A. 8042 declared unconstitutional cannot be given retroactive effect, not only because there is no express declaration of retroactivity in the law, but because retroactive application will result in an impairment of a right that had accrued to the respondents by virtue of the Serrano ruling entitlement to their salaries for the unexpired portion of their employment contracts.

Under the heading "Post-Deployment," the agency agreed to pay Era47 and Alcantara48 P 12,000.00 each, purportedly in satisfaction of the respondents claims arising from overseas employment, consisting of unpaid salaries, salary differentials and other benefits, including money claims with the NLRC. The last document was signed by (1) Anipan, (2) Lumanta, (3) Ladea, (4) Vinuya, (5) Jonathan Nangolinola, and (6) Zosimo Gatchalian (the last four signing All statutes are to be construed as having only a prospective application, unless the purpose and on the left hand side of the document; the last two were not among those who filed the illegal intention of the legislature to give them a retrospective effect are expressly declared or are dismissal complaint).49 necessarily implied from the language used.54 We thus see no reason to nullity the application of the Serrano ruling in the present case. Whether or not R.A. 1 0022 is constitutional is not for us to The agency agreed to pay them a total of P 72,000.00. Although there was no breakdown of the rule upon in the present case as this is an issue that is not squarely before us. In other words, this entitlement for each of the six, but guided by the compromise agreement signed by Era and is an issue that awaits its proper day in court; in the meanwhile, we make no pronouncement on it. Alcantara, we believe that the agency paid them P 12,000.00 each, just like Era and Alcantara. The uniform insubstantial amount for each of the signatories to the agreement lends credence to their contention that the settlement pertained only to their claim for refund of the airfare which they shouldered when they returned to the Philippines. The compromise agreement, apparently, was intended by the agency as a settlement with the respondents and others with similar claims, which explains the inclusion of the two (Nangolinola and Gatchalian) who were not involved in the case with the NLRC. Under the circumstances, we cannot see how the compromise agreements can be considered to have fully settled the respondents claims before the NLRC illegal dismissal and monetary benefits arising from employment. We thus find no reversible error nor grave abuse of discretion in the rejection by the NLRC and the CA of said agreements. Fifth. The agencys objection to the application of the Serrano ruling in the present case is of no moment. Its argument that the ruling cannot be given retroactive effect, because it is curative and remedial, is untenable. It points out, in this respect, that the respondents filed the complaint in 2007, while the Serrano ruling was handed down in March 2009. The issue, as the respondents correctly argue, has been resolved in Yap v. Thenamaris Ships Managem ent,50 where the Court sustained the retroactive application of the Serrano ruling which declared unconstitutional the subject clause in Section 10, paragraph 5 of R.A. 8042, limiting to three months the payment of salaries to illegally dismissed Overseas Filipino Workers. Undaunted, the agency posits that in any event, the Serrano ruling has been nullified by R.A. No. 10022, entitled "An Act Amending Republic Act No. 8042, Otherwise Known as the Migrant Workers and Overseas Filipinos Act of 1995, As Amended, Further Improving the Standard of Protection and Promotion of the Welfare of Migrant Workers, Their Families and Overseas Filipinos in Distress, and For Other Purposes."51 It argues that R.A. 10022, which lapsed into law (without the Signature of the President) on March 8, 2010, restored the subject clause in the 5th WHEREFORE, premises considered, the petition is DENIED. The assailed Decision dated May 9, 2011 and the Resolution dated June 23, 2011 of the Court of Appeals in CA-G.R. SP No. 114353 are AFFIRMED. Let this Decision be brought to the attention of the Honorable Secretary of Labor and Employment and the Administrator of the Philippine Overseas Employment Administration as a black mark in the deployment record of petitioner Pert/CPM Manpower Exponent Co., Inc., and as a record that should be considered in any similar future violations. Costs against the petitioner. SO ORDERED. FIRST DIVISION G.R. No. 171182 August 23, 2012

UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA, RAUL P. DE GUZMAN, RUBEN P. ASPIRAS, EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S. ABRIGO, and JOSEFINA R. LICUANAN, Petitioners, vs. HON. AGUSTIN S. DIZON, his capacity as Presiding Judge of the Regional Trial Court of Quezon City, Branch 80, STERN BUILDERS, INC., and SERVILLANO DELA CRUZ, Respondents. DECISION

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BERSAMIN, J.: Trial judges should not immediately issue writs of execution or garnishment against the Government or any of its subdivisions, agencies and instrumentalities to enforce money judgments.1 They should bear in mind that the primary jurisdiction to examine, audit and settle all claims of any sort due from the Government or any of its subdivisions, agencies and instrumentalities pertains to the Commission on Audit (COA) pursuant to Presidential Decree No. 1445 (Government Auditing Code of the Philippines). The Case On appeal by the University of the Philippines and its then incumbent officials (collectively, the UP) is the decision promulgated on September 16, 2005,2 whereby the Court of Appeals (CA) upheld the order of the Regional Trial Court (RTC), Branch 80, in Quezon City that directed the garnishment of public funds amounting to P16,370,191.74 belonging to the UP to satisfy the writ of execution issued to enforce the already final and executory judgment against the UP. Antecedents On August 30, 1990, the UP, through its then President Jose V. Abueva, entered into a General Construction Agreement with respondent Stern Builders Corporation (Stern Builders), represented by its President and General Manager Servillano dela Cruz, for the construction of the extension building and the renovation of the College of Arts and Sciences Building in the campus of the University of the Philippines in Los Baos (UPLB).3 In the course of the implementation of the contract, Stern Builders submitted three progress billings corresponding to the work accomplished, but the UP paid only two of the billings. The third billing worth P273,729.47 was not paid due to its disallowance by the Commission on Audit (COA). Despite the lifting of the disallowance, the UP failed to pay the billing, prompting Stern Builders and dela Cruz to sue the UP and its co-respondent officials to collect the unpaid billing and to recover various damages. The suit, entitled Stern Builders Corporation and Servillano R. Dela Cruz v. University of the Philippines Systems, Jose V. Abueva, Raul P. de Guzman, Ruben P. Aspiras, Emmanuel P. Bello, Wilfredo P. David, Casiano S. Abrigo, and Josefina R. Licuanan, was docketed as Civil Case No. Q-93-14971 of the Regional Trial Court in Quezon City (RTC).4 After trial, on November 28, 2001, the RTC rendered its decision in favor of the plaintiffs, 5 viz: Wherefore, in the light of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter to pay plaintiff, jointly and severally, the following, to wit: 1. P503,462.74 amount of the third billing, additional accomplished work and retention money 2. P5,716,729.00 in actual damages 3. P10,000,000.00 in moral damages 4. P150,000.00 and P1,500.00 per appearance as attorneys fees; and

5. Costs of suit. SO ORDERED. Following the RTCs denial of its motion for reconsideration on May 7, 2002, 6 the UP filed a notice of appeal on June 3, 2002.7 Stern Builders and dela Cruz opposed the notice of appeal on the ground of its filing being belated, and moved for the execution of the decision. The UP countered that the notice of appeal was filed within the reglementary period because the UPs Office of Legal Affairs (OLS) in Diliman, Quezon City received the order of denial only on May 31, 2002. On September 26, 2002, the RTC denied due course to the notice of appeal for having been filed out of time and granted the private respondents motion for execution. 8 The RTC issued the writ of execution on October 4, 2002,9 and the sheriff of the RTC served the writ of execution and notice of demand upon the UP, through its counsel, on October 9, 2002.10 The UP filed an urgent motion to reconsider the order dated September 26, 2002, to quash the writ of execution dated October 4, 2002, and to restrain the proceedings. 11 However, the RTC denied the urgent motion on April 1, 2003.12 On June 24, 2003, the UP assailed the denial of due course to its appeal through a petition for certiorari in the Court of Appeals (CA), docketed as CA-G.R. No. 77395.13 On February 24, 2004, the CA dismissed the petition for certiorari upon finding that the UPs notice of appeal had been filed late,14 stating: Records clearly show that petitioners received a copy of the Decision dated November 28, 2001 and January 7, 2002, thus, they had until January 22, 2002 within which to file their appeal. On January 16, 2002 or after the lapse of nine (9) days, petitioners through their counsel Atty. Nolasco filed a Motion for Reconsideration of the aforesaid decision, hence, pursuant to the rules, petitioners still had six (6) remaining days to file their appeal. As admitted by the petitioners in their petition (Rollo, p. 25), Atty. Nolasco received a copy of the Order denying their motion for reconsideration on May 17, 2002, thus, petitioners still has until May 23, 2002 (the remaining six (6) days) within which to file their appeal. Obviously, petitioners were not able to file their Notice of Appeal on May 23, 2002 as it was only filed on June 3, 2002. In view of the said circumstances, We are of the belief and so holds that the Notice of Appeal filed by the petitioners was really filed out of time, the same having been filed seventeen (17) days late of the reglementary period. By reason of which, the decision dated November 28, 2001 had already become final and executory. "Settled is the rule that the perfection of an appeal in the manner and within the period permitted by law is not only mandatory but jurisdictional, and failure to perfect that appeal renders the challenged judgment final and executory. This is not an empty procedural rule but is grounded on fundamental considerations of public policy and sound practice." (Rams Studio and Photographic Equipment, Inc. vs. Court of Appeals, 346 SCRA 691, 696). Indeed, Atty. Nolasco received the order of denial of the Motion for Reconsideration on May 17, 2002 but filed a Notice of Appeal only on June 3, 3003. As such, the decision of the lower court ipso facto became final when no appeal was perfected after the lapse of the reglementary period. This procedural caveat cannot be trifled with, not even by the High Court. 15 The UP sought a reconsideration, but the CA denied the UPs motion for reconsideration on April 19, 2004.16

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On May 11, 2004, the UP appealed to the Court by petition for review on certiorari (G.R. No. 163501). On June 23, 2004, the Court denied the petition for review.17 The UP moved for the reconsideration of the denial of its petition for review on August 29, 2004, 18 but the Court denied the motion on October 6, 2004.19 The denial became final and executory on November 12, 2004.20 In the meanwhile that the UP was exhausting the available remedies to overturn the denial of due course to the appeal and the issuance of the writ of execution, Stern Builders and dela Cruz filed in the RTC their motions for execution despite their previous motion having already been granted and despite the writ of execution having already issued. On June 11, 2003, the RTC granted another motion for execution filed on May 9, 2003 (although the RTC had already issued the writ of execution on October 4, 2002).21

On January 6, 2005, Stern Builders and dela Cruz moved to cite DBP in direct contempt of court for its non-compliance with the order of release.34 Thereupon, on January 10, 2005, the UP brought a petition for certiorari in the CA to challenge the jurisdiction of the RTC in issuing the order of December 21, 2004 (CA-G.R. CV No. 88125).35 Aside from raising the denial of due process, the UP averred that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that there was no longer any legal impediment to the release of the garnished funds. The UP argued that government funds and properties could not be seized by virtue of writs of execution or garnishment, as held in Department of Agriculture v. National Labor Relations Commission,36 and citing Section 84 of Presidential Decree No. 1445 to the effect that "revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority;" and that the order of garnishment clashed with the ruling in University of the Philippines Board of Regents v. Ligot-Telan37 to the effect that the funds belonging to the UP were public funds.

On June 23, 2003 and July 25, 2003, respectively, the sheriff served notices of garnishment on the UPs depository banks, namely: Land Bank of the Philippines (Buendia Branch) and the On January 19, 2005, the CA issued a temporary restraining order (TRO) upon application by the Development Bank of the Philippines (DBP), Commonwealth Branch.22 The UP assailed the UP.38 23 garnishment through an urgent motion to quash the notices of garnishment; and a motion to 24 quash the writ of execution dated May 9, 2003. On March 22, 2005, Stern Builders and dela Cruz filed in the RTC their amended motion for sheriffs assistance to implement the release order dated December 21, 2004, stating that the 60On their part, Stern Builders and dela Cruz filed their ex parte motion for issuance of a release day period of the TRO of the CA had already lapsed.39 The UP opposed the amended motion and order.25 countered that the implementation of the release order be suspended. 40 On October 14, 2003, the RTC denied the UPs urgent motion to quash, and granted Stern Builders and dela Cruzs ex parte motion for issuance of a release order.26 The UP moved for the reconsideration of the order of October 14, 2003, but the RTC denied the motion on November 7, 2003.27 On January 12, 2004, Stern Builders and dela Cruz again sought the release of the garnished funds.28 Despite the UPs opposition,29 the RTC granted the motion to release the garnished funds on March 16, 2004.30 On April 20, 2004, however, the RTC held in abeyance the enforcement of the writs of execution issued on October 4, 2002 and June 3, 2003 and all the ensuing notices of garnishment, citing Section 4, Rule 52, Rules of Court, which provided that the pendency of a timely motion for reconsideration stayed the execution of the judgment.31 On December 21, 2004, the RTC, through respondent Judge Agustin S. Dizon, authorized the release of the garnished funds of the UP,32 to wit: WHEREFORE, premises considered, there being no more legal impediment for the release of the garnished amount in satisfaction of the judgment award in the instant case, let the amount garnished be immediately released by the Development Bank of the Philippines, Commonwealth Branch, Quezon City in favor of the plaintiff. SO ORDERED. The UP was served on January 3, 2005 with the order of December 21, 2004 directing DBP to release the garnished funds.33 On May 3, 2005, the RTC granted the amended motion for sheriffs assistance and directed the sheriff to proceed to the DBP to receive the check in satisfaction of the judgment. 41 The UP sought the reconsideration of the order of May 3, 2005.42 On May 16, 2005, DBP filed a motion to consign the check representing the judgment award and to dismiss the motion to cite its officials in contempt of court. 43 On May 23, 2005, the UP presented a motion to withhold the release of the payment of the judgment award.44 On July 8, 2005, the RTC resolved all the pending matters,45 noting that the DBP had already delivered to the sheriff Managers Check No. 811941 for P16,370,191.74 representing the garnished funds payable to the order of Stern Builders and dela Cruz as its compliance with the RTCs order dated December 21, 2004.46 However, the RTC directed in the same order that Stern Builders and dela Cruz should not encash the check or withdraw its amount pending the final resolution of the UPs petition for certiorari, to wit:47 To enable the money represented in the check in question (No. 00008119411) to earn interest during the pendency of the defendant University of the Philippines application for a writ of injunction with the Court of Appeals the same may now be deposited by the plaintiff at the garnishee Bank (Development Bank of the Philippines), the disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines et al., vs. Hon. Agustin S. Dizon et al., (CA G.R. 88125) before the Court of Appeals.

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Let it be stated herein that the plaintiff is not authorized to encash and withdraw the amount represented in the check in question and enjoy the same in the fashion of an owner during the pendency of the case between the parties before the Court of Appeals which may or may not be resolved in plaintiffs favor. With the end in view of seeing to it that the check in question is deposited by the plaintiff at the Development Bank of the Philippines (garnishee bank), Branch Sheriff Herlan Velasco is directed to accompany and/or escort the plaintiff in making the deposit of the check in question. SO ORDERED. On September 16, 2005, the CA promulgated its assailed decision dismissing the UPs petition for certiorari, ruling that the UP had been given ample opportunity to contest the motion to direct the DBP to deposit the check in the name of Stern Builders and dela Cruz; and that the garnished funds could be the proper subject of garnishment because they had been already earmarked for the project, with the UP holding the funds only in a fiduciary capacity, 48 viz: Petitioners next argue that the UP funds may not be seized for execution or garnishment to satisfy the judgment award. Citing Department of Agriculture vs. NLRC, University of the Philippines Board of Regents vs. Hon. Ligot-Telan, petitioners contend that UP deposits at Land Bank and the Development Bank of the Philippines, being government funds, may not be released absent an appropriations bill from Congress. The argument is specious. UP entered into a contract with private respondents for the expansion and renovation of the Arts and Sciences Building of its campus in Los Baos, Laguna. Decidedly, there was already an appropriations earmarked for the said project. The said funds are retained by UP, in a fiduciary capacity, pending completion of the construction project. We agree with the trial Court [sic] observation on this score: "4. Executive Order No. 109 (Directing all National Government Agencies to Revert Certain Accounts Payable to the Cumulative Result of Operations of the National Government and for Other Purposes) Section 9. Reversion of Accounts Payable, provides that, all 1995 and prior years documented accounts payable and all undocumented accounts regardless of the year they were incurred shall be reverted to the Cumulative Result of Operations of the National Government (CROU). This shall apply to accounts payable of all funds, except fiduciary funds, as long as the purpose for which the funds were created have not been accomplished and accounts payable under foreign assisted projects for the duration of the said project. In this regard, the Department of Budget and Management issued Joint-Circular No. 99-6 4.0 (4.3) Procedural Guidelines which provides that all accounts payable that reverted to the CROU may be considered for payment upon determination thru administrative process, of the existence, validity and legality of the claim. Thus, the allegation of the defendants that considering no appropriation for the payment of any amount awarded to plaintiffs appellee the funds of defendant-appellants may not be seized pursuant to a writ of execution issued by the regular court is misplaced. Surely when the defendants and the plaintiff entered into the General Construction of Agreement there is an amount already allocated by the latter for the said project which is no longer subject of future appropriation."49 After the CA denied their motion for reconsideration on December 23, 2005, the petitioners appealed by petition for review.

Matters Arising During the Pendency of the Petition On January 30, 2006, Judge Dizon of the RTC (Branch 80) denied Stern Builders and dela Cruzs motion to withdraw the deposit, in consideration of the UPs intention to appeal to the CA,50 stating: Since it appears that the defendants are intending to file a petition for review of the Court of Appeals resolution in CA-G.R. No. 88125 within the reglementary period of fifteen (15) days from receipt of resolution, the Court agrees with the defendants stand that the granting of plaintiffs subject motion is premature. Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the "disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before the Court of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has rendered its own final judgment or resolution.51 However, on January 22, 2007, the UP filed an Urgent Application for A Temporary Restraining Order and/or A Writ of Preliminary Injunction,52 averring that on January 3, 2007, Judge Maria Theresa dela Torre-Yadao (who had meanwhile replaced Judge Dizon upon the latters appointment to the CA) had issued another order allowing Stern Builders and dela Cruz to withdraw the deposit,53 to wit: It bears stressing that defendants liability for the payment of the judgm ent obligation has become indubitable due to the final and executory nature of the Decision dated November 28, 2001. Insofar as the payment of the [sic] judgment obligation is concerned, the Court believes that there is nothing more the defendant can do to escape liability. It is observed that there is nothing more the defendant can do to escape liability. It is observed that defendant U.P. System had already exhausted all its legal remedies to overturn, set aside or modify the decision (dated November 28, 2001( rendered against it. The way the Court sees it, defendant U.P. Systems petition before the Supreme Court concerns only with the manner by which said judgment award should be satisfied. It has nothing to do with the legality or propriety thereof, although it prays for the deletion of [sic] reduction of the award of moral damages. It must be emphasized that this Courts finding, i.e., that there was sufficient appropriation earmarked for the project, was upheld by the Court of Appeals in its decision dated September 16, 2005. Being a finding of fact, the Supreme Court will, ordinarily, not disturb the same was said Court is not a trier of fact. Such being the case, defendants arguments that there was no sufficient appropriation for the payment of the judgment obligation must fail. While it is true that the former Presiding Judge of this Court in its Order dated January 30, 2006 had stated that: Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the "disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before the Court of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has rendered its own final judgment or resolution.

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it should be noted that neither the Court of Appeals nor the Supreme Court issued a preliminary injunction enjoining the release or withdrawal of the garnished amount. In fact, in its present petition for review before the Supreme Court, U.P. System has not prayed for the issuance of a writ of preliminary injunction. Thus, the Court doubts whether such writ is forthcoming. The Court honestly believes that if defendants petition assailing the Order of this Court dated December 31, 2004 granting the motion for the release of the garnished amount was meritorious, the Court of Appeals would have issued a writ of injunction enjoining the same. Instead, said appellate court not only refused to issue a wit of preliminary injunction prayed for by U.P. System but denied the petition, as well.54

b) the propriety of the dismissal of U.P. Systems appeal was upheld by the Supreme Court; c) a writ of execution had been issued; d) defendant U.P. Systems deposit with DBP was garnished pursuant to a lawful writ of execution issued by the Court; and e) the garnished amount had already been turned over to the plaintiffs and deposited in their account with DBP.

The UP contended that Judge Yadao thereby effectively reversed the January 30, 2006 order of Judge Dizon disallowing the withdrawal of the garnished amount until after the decision in the case The garnished amount, as discussed in the Order dated January 16, 2007, was already owned by would have become final and executory. the plaintiffs, having been delivered to them by the Deputy Sheriff of this Court pursuant to par. (c), Section 9, Rule 39 of the 1997 Rules of Civil Procedure. Moreover, the judgment obligation has already been fully satisfied as per Report of the Deputy Sheriff. Although the Court issued a TRO on January 24, 2007 to enjoin Judge Yadao and all persons 55 acting pursuant to her authority from enforcing her order of January 3, 2007, it appears that on January 16, 2007, or prior to the issuance of the TRO, she had already directed the DBP to Anent the Temporary Restraining Order issued by the Supreme Court, the same has forthwith release the garnished amount to Stern Builders and dela Cruz; 56 and that DBP had become functus oficio, having been issued after the garnished amount had been released to the forthwith complied with the order on January 17, 2007 upon the sheriffs service of the order of plaintiffs. The judgment debt was released to the plaintiffs on January 17, 2007, while the Judge Yadao.57 Temporary Restraining Order issued by the Supreme Court was received by this Court on February 2, 2007. At the time of the issuance of the Restraining Order, the act sought to be restrained had already been done, thereby rendering the said Order ineffectual. These intervening developments impelled the UP to file in this Court a supplemental petition on 58 January 26, 2007, alleging that the RTC (Judge Yadao) gravely erred in ordering the immediate release of the garnished amount despite the pendency of the petition for review in this Court. After a careful and thorough study of the arguments advanced by the parties, the Court is of the considered opinion that there is no legal basis to grant defendant U.P. Systems motion to redeposit the judgment amount. Granting said motion is not only contrary to law, but it will also The UP filed a second supplemental petition59 after the RTC (Judge Yadao) denied the UPs render this Courts final executory judgment nugatory. Litigation must end and terminate sometime motion for the redeposit of the withdrawn amount on April 10, 2007, 60 to wit: and somewhere, and it is essential to an effective administration of justice that once a judgment has become final the issue or cause involved therein should be laid to rest. This doctrine of finality This resolves defendant U.P. Systems Urgent Motion to Redeposit Judgment Award praying that of judgment is grounded on fundamental considerations of public policy and sound practice. In plaintiffs be directed to redeposit the judgment award to DBP pursuant to the Temporary fact, nothing is more settled in law than that once a judgment attains finality it thereby becomes Restraining Order issued by the Supreme Court. Plaintiffs opposed the motion and countered that immutable and unalterable. It may no longer be modified in any respect, even if the modification is the Temporary Restraining Order issued by the Supreme Court has become moot and academic meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of considering that the act sought to be restrained by it has already been performed. They also whether the modification is attempted to be made by the court rendering it or by the highest court alleged that the redeposit of the judgment award was no longer feasible as they have already of the land. spent the same. It bears stressing, if only to set the record straight, that this Court did not in its Order dated January 3, 2007 (the implementation of which was restrained by the Supreme Court in its Resolution dated January 24, 2002) direct that that garnished amount "be deposited with the garnishee bank (Development Bank of the Philippines)". In the first place, there was no need to order DBP to make such deposit, as the garnished amount was already deposited in the account of plaintiffs with the DBP as early as May 13, 2005. What the Court granted in its Order dated January 3, 2007 was plaintiffs motion to allow the release of said deposit. It must be recalled that the Court found plaintiffs motion meritorious and, at that time, there was no restraining order or preliminary injunction from either the Court of Appeals or the Supreme Court which could have enjoined the release of plaintiffs deposit. The Court also took into account the following factors: a) the Decision in this case had long been final and executory after it was rendered on November 28, 2001; WHEREFORE, premises considered, finding defendant U.P. Systems Urgent Motion to Redeposit Judgment Award devoid of merit, the same is hereby DENIED. SO ORDERED. Issues The UP now submits that: I

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THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISMISSING THE PETITION, ALLOWING IN EFFECT THE GARNISHMENT OF UP FUNDS, WHEN IT RULED THAT FUNDS HAVE ALREADY BEEN EARMARKED FOR THE CONSTRUCTION PROJECT; AND THUS, THERE IS NO NEED FOR FURTHER APPROPRIATIONS. II THE COURT OF APPEALS COMMITTED GRAVE ERROR IN ALLOWING GARNISHMENT OF A STATE UNIVERSITYS FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF THE CONSTITUTION. III IN THE ALTERNATIVE, THE UNIVERSITY INVOKES EQUITY AND THE REVIEW POWERS OF THIS HONORABLE COURT TO MODIFY, IF NOT TOTALLY DELETE THE AWARD OF P10 MILLION AS MORAL DAMAGES TO RESPONDENTS. IV THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT AWARD IN ITS ORDER DATED 3 JANUARY 2007 ON THE GROUND OF EQUITY AND JUDICIAL COURTESY. V THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT AWARD IN ITS ORDER DATED 16 JANUARY 2007 ON THE GROUND THAT PETITIONER UNIVERSITY STILL HAS A PENDING MOTION FOR RECONSIDERATION OF THE ORDER DATED 3 JANUARY 2007. VI THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN NOT ORDERING THE REDEPOSIT OF THE GARNISHED AMOUNT TO THE DBP IN VIOLATION OF THE CLEAR LANGUAGE OF THE SUPREME COURT RESOLUTION DATED 24 JANUARY 2007. The UP argues that the amount earmarked for the construction project had been purposely set aside only for the aborted project and did not include incidental matters like the awards of actual damages, moral damages and attorneys fees. In support of its argument, the UP cited Article 12.2 of the General Construction Agreement, which stipulated that no deductions would be allowed for the payment of claims, damages, losses and expenses, including attorneys fees, in case of any litigation arising out of the performance of the work. The UP insists that the CA decision was inconsistent with the rulings in Commissioner of Public Highways v. San Diego61 andDepartment of Agriculture v. NLRC62 to the effect that government funds and properties could not be seized under writs of execution or garnishment to satisfy judgment awards. Furthermore, the UP contends that the CA contravened Section 5, Article XIV of the Constitution by allowing the garnishment of UP funds, because the garnishment resulted in a substantial

reduction of the UPs limited budget allocated for the remuneration, job satisfaction and fulfillment of the best available teachers; that Judge Yadao should have exhibited judicial courtesy towards the Court due to the pendency of the UPs petition for review; and that she should have also desisted from declaring that the TRO issued by this Court had become functus officio. Lastly, the UP states that the awards of actual damages of P5,716,729.00 and moral damages of P10 million should be reduced, if not entirely deleted, due to its being unconscionable, inequitable and detrimental to public service. In contrast, Stern Builders and dela Cruz aver that the petition for review was fatally defective for its failure to mention the other cases upon the same issues pending between the parties (i.e., CAG.R. No. 77395 and G.R No. 163501); that the UP was evidently resorting to forum shopping, and to delaying the satisfaction of the final judgment by the filing of its petition for review; that the ruling in Commissioner of Public Works v. San Diego had no application because there was an appropriation for the project; that the UP retained the funds allotted for the project only in a fiduciary capacity; that the contract price had been meanwhile adjusted to P22,338,553.25, an amount already more than sufficient to cover the judgment award; that the UPs prayer to reduce or delete the award of damages had no factual basis, because they had been gravely wronged, had been deprived of their source of income, and had suffered untold miseries, discomfort, humiliation and sleepless years; that dela Cruz had even been constrained to sell his house, his equipment and the implements of his trade, and together with his family had been forced to live miserably because of the wrongful actuations of the UP; and that the RTC correctly declared the Courts TRO to be already functus officio by reason of the withdrawal of the garnished amount from the DBP. The decisive issues to be considered and passed upon are, therefore: (a) whether the funds of the UP were the proper subject of garnishment in order to satisfy the judgment award; and (b) whether the UPs prayer for the deletion of the awards of actual damages of P5,716,729.00, moral damages of P10,000,000.00 and attorneys fees of P150,000.00 plus P1,500.00 per appearance could be granted despite the finality of the judgment of the RTC. Ruling The petition for review is meritorious. I. UPs funds, being government funds, are not subject to garnishment The UP was founded on June 18, 1908 through Act 1870 to provide advanced instruction in literature, philosophy, the sciences, and arts, and to give professional and technical training to deserving students.63 Despite its establishment as a body corporate,64 the UP remains to be a "chartered institution"65 performing a legitimate government function. It is an institution of higher learning, not a corporation established for profit and declaring any dividends. 66 In enacting Republic Act No. 9500 (The University of the Philippines Charter of 2008), Congress has declared the UP as the national university67 "dedicated to the search for truth and knowledge as well as the development of future leaders."68

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Irrefragably, the UP is a government instrumentality,69 performing the States constitutional mandate of promoting quality and accessible education.70 As a government instrumentality, the UP administers special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of Executive Order No. 714,71 and from the yearly appropriations, to achieve the purposes laid down by Section 2 of Act 1870, as expanded in Republic Act No. 9500. 72 All the funds going into the possession of the UP, including any interest accruing from the deposit of such funds in any banking institution, constitute a "special trust fund," the disbursement of which should always be aligned with the UPs mission and purpose,73 and should always be subject to auditing by the COA.74

"there (were) already an appropriations (sic) earmarked for the said project." 82The CA and the RTC thereby unjustifiably ignored the legal restriction imposed on the trust funds of the Government and its agencies and instrumentalities to be used exclusively to fulfill the purposes for which the trusts were created or for which the funds were received except upon express authorization by Congress or by the head of a government agency in control of the funds, and subject to pertinent budgetary laws, rules and regulations.83

Indeed, an appropriation by Congress was required before the judgment that rendered the UP liable for moral and actual damages (including attorneys fees) would be satisfied considering that such monetary liabilities were not covered by the "appropriations earmarked for the said project." Presidential Decree No. 1445 defines a "trust fund" as a fund that officially comes in the The Constitution strictly mandated that "(n)o money shall be paid out of the Treasury except in possession of an agency of the government or of a public officer as trustee, agent or administrator, pursuance of an appropriation made by law."84 or that is received for the fulfillment of some obligation.75 A trust fund may be utilized only for the "specific purpose for which the trust was created or the funds received."76 II COA must adjudicate private respondents claim before execution should proceed The funds of the UP are government funds that are public in character. They include the income accruing from the use of real property ceded to the UP that may be spent only for the attainment of its institutional objectives.77Hence, the funds subject of this action could not be validly made the The execution of the monetary judgment against the UP was within the primary jurisdiction of the subject of the RTCs writ of execution or garnishment. The adverse judgment rendered against the COA. This was expressly provided in Section 26 of Presidential Decree No. 1445, to wit: UP in a suit to which it had impliedly consented was not immediately enforceable by execution 78 79 against the UP, because suability of the State did not necessarily mean its liability. Section 26. General jurisdiction. - The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the A marked distinction exists between suability of the State and its liability. As the Court succinctly general accounts of the Government, the preservation of vouchers pertaining thereto for a period 80 stated inMunicipality of San Fernando, La Union v. Firme: of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property A distinction should first be made between suability and liability. "Suability depends on the consent received or held by them in an accountable capacity, as well as the examination, audit, and of the state to be sued, liability on the applicable law and the established facts. The circumstance settlement of all debts and claims of any sort due from or owing to the Government or any of its that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be subdivisions, agencies and instrumentalities. The said jurisdiction extends to all governmentheld liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the owned or controlled corporations, including their subsidiaries, and other self-governing boards, state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only commissions, or agencies of the Government, and as herein prescribed, including non giving the plaintiff the chance to prove, if it can, that the defendant is liable. governmental entities subsidized by the government, those funded by donations through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government. 81 Also, in Republic v. Villasor, where the issuance of an alias writ of execution directed against the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment was nullified, the Court said: It was of no moment that a final and executory decision already validated the claim against the UP. The settlement of the monetary claim was still subject to the primary jurisdiction of the COA despite the final decision of the RTC having already validated the claim.85 As such, Stern Builders xxx The universal rule that where the State gives its consent to be sued by private parties either by and dela Cruz as the claimants had no alternative except to first seek the approval of the COA of general or special law, it may limit claimants action "only up to the completion of proceedings their monetary claim. anterior to the stage of execution" and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. On its part, the RTC should have exercised utmost caution, prudence and judiciousness in dealing Disbursements of public funds must be covered by the corresponding appropriation as required by with the motions for execution against the UP and the garnishment of the UPs funds. The RTC law. The functions and public services rendered by the State cannot be allowed to be paralyzed or had no authority to direct the immediate withdrawal of any portion of the garnished funds from the disrupted by the diversion of public funds from their legitimate and specific objects, as depository banks of the UP. By eschewing utmost caution, prudence and judiciousness in dealing appropriated by law. with the execution and garnishment, and by authorizing the withdrawal of the garnished funds of the UP, the RTC acted beyond its jurisdiction, and all its orders and issuances thereon were void and of no legal effect, specifically: (a) the order Judge Yadao issued on January 3, 2007 allowing The UP correctly submits here that the garnishment of its funds to satisfy the judgment awards of Stern Builders and dela Cruz to withdraw the deposited garnished amount; (b) the order Judge actual and moral damages (including attorneys fees) was not validly made if there was no special Yadao issued on January 16, 2007 directing DBP to forthwith release the garnish amount to Stern appropriation by Congress to cover the liability. It was, therefore, legally unwarranted for the CA to Builders and dela Cruz; (c) the sheriffs report of January 17, 2007 manifesting the full satisfaction agree with the RTCs holding in the order issued on April 1, 2003 that no appropriation by of the writ of execution; and (d) the order of April 10, 2007 deying the UPs motion for the redeposit Congress to allocate and set aside the payment of the judgment awards was necessary because

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of the withdrawn amount. Hence, such orders and issuances should be struck down without exception. Nothing extenuated Judge Yadaos successive violations of Presidential Decree No. 1445. Sh e was aware of Presidential Decree No. 1445, considering that the Court circulated to all judges its Administrative Circular No. 10-2000,86 issued on October 25, 2000, enjoining them "to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units" precisely in order to prevent the circumvention of Presidential Decree No. 1445, as well as of the rules and procedures of the COA, to wit: In order to prevent possible circumvention of the rules and procedures of the Commission on Audit, judges are hereby enjoined to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units.

1. Properties held for public uses and generally everything held for governmental purposes are not subject to levy and sale under execution against such corporation. The same rule applies to funds in the hands of a public officer and taxes due to a municipal corporation. 2. Where a municipal corporation owns in its proprietary capacity, as distinguished from its public or government capacity, property not used or used for a public purpose but for quasi-private purposes, it is the general rule that such property may be seized and sold under execution against the corporation. 3. Property held for public purposes is not subject to execution merely because it is temporarily used for private purposes. If the public use is wholly abandoned, such property becomes subject to execution. This Administrative Circular shall take effect immediately and the Court Administrator shall see to it that it is faithfully implemented.

Judges should bear in mind that in Commissioner of Public Highways v. San Diego (31 SCRA 617, Although Judge Yadao pointed out that neither the CA nor the Court had issued as of then any writ 625 1970), this Court explicitly stated: of preliminary injunction to enjoin the release or withdrawal of the garnished amount, she did not need any writ of injunction from a superior court to compel her obedience to the law. The Court is "The universal rule that where the State gives its consent to be sued by private parties either by disturbed that an experienced judge like her should look at public laws like Presidential Decree No. general or special law, it may limit claimants action only up to the completion of proceedings 1445 dismissively instead of loyally following and unquestioningly implementing them. That she did anterior to the stage of execution and that the power of the Court ends when the judgment is so turned her court into an oppressive bastion of mindless tyranny instead of having it as a true rendered, since government funds and properties may not be seized under writs of execution or haven for the seekers of justice like the UP. garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by III law. The functions and public services rendered by the State cannot be allowed to be paralyzed or Period of appeal did not start without effective disrupted by the diversion of public funds from their legitimate and specific objects, as service of decision upon counsel of record; appropriated by law. Fresh-period rule announced in Neypes v. Court of Appeals can be given retroactive application Moreover, it is settled jurisprudence that upon determination of State liability, the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in P.D. No. 1445, otherwise known as the Government Auditing Code of the The UP next pleads that the Court gives due course to its petition for review in the name of equity Philippines (Department of Agriculture v. NLRC, 227 SCRA 693, 701-02 1993 citing Republic vs. in order to reverse or modify the adverse judgment against it despite its finality. At stake in the Villasor, 54 SCRA 84 1973). All money claims against the Government must first be filed with the UPs plea for equity was the return of the amount of P16,370,191.74 illegally garnished from its Commission on Audit which must act upon it within sixty days. Rejection of the claim will authorize trust funds. Obstructing the plea is the finality of the judgment based on the supposed tardiness of the claimant to elevate the matter to the Supreme Court on certiorari and in effect, sue the State UPs appeal, which the RTC declared on September 26, 2002. The CA upheld the declaration of thereby (P.D. 1445, Sections 49-50). finality on February 24, 2004, and the Court itself denied the UPs petition for review on that issue on May 11, 2004 (G.R. No. 163501). The denial became final on November 12, 2004. However, notwithstanding the rule that government properties are not subject to levy and execution unless otherwise provided for by statute (Republic v. Palacio, 23 SCRA 899 1968; It is true that a decision that has attained finality becomes immutable and unalterable, and cannot Commissioner of Public Highways v. San Diego, supra) or municipal ordinance (Municipality of be modified in any respect,87 even if the modification is meant to correct erroneous conclusions of Makati v. Court of Appeals, 190 SCRA 206 1990), the Court has, in various instances, fact and law, and whether the modification is made by the court that rendered it or by this Court as distinguished between government funds and properties for public use and those not held for the highest court of the land.88 Public policy dictates that once a judgment becomes final, public use. Thus, in Viuda de Tan Toco v. Municipal Council of Iloilo (49 Phil 52 1926, the Court executory and unappealable, the prevailing party should not be deprived of the fruits of victory by ruled that "where property of a municipal or other public corporation is sought to be subjected to some subterfuge devised by the losing party. Unjustified delay in the enforcement of such execution to satisfy judgments recovered against such corporation, the question as to whether judgment sets at naught the role and purpose of the courts to resolve justiciable controversies with such property is leviable or not is to be determined by the usage and purposes for which it is held." finality.89 Indeed, all litigations must at some time end, even at the risk of occasional errors. The following can be culled from Viuda de Tan Toco v. Municipal Council of Iloilo: But the doctrine of immutability of a final judgment has not been absolute, and has admitted several exceptions, among them: (a) the correction of clerical errors; (b) the so-called nunc pro

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tunc entries that cause no prejudice to any party; (c) void judgments; and (d) whenever circumstances transpire after the finality of the decision that render its execution unjust and inequitable.90 Moreover, in Heirs of Maura So v. Obliosca,91 we stated that despite the absence of the preceding circumstances, the Court is not precluded from brushing aside procedural norms if only to serve the higher interests of justice and equity. Also, in Gumaru v. Quirino State College,92 the Court nullified the proceedings and the writ of execution issued by the RTC for the reason that respondent state college had not been represented in the litigation by the Office of the Solicitor General. We rule that the UPs plea for equity warrants the Courts exerc ise of the exceptional power to disregard the declaration of finality of the judgment of the RTC for being in clear violation of the UPs right to due process. Both the CA and the RTC found the filing on June 3, 2002 by the UP of the notice of appeal to be tardy. They based their finding on the fact that only six days remained of the UPs reglementary 15-day period within which to file the notice of appeal because the UP had filed a motion for reconsideration on January 16, 2002 vis--vis the RTCs decision the UP received on January 7, 2002; and that because the denial of the motion for reconsideration had been served upon Atty. Felimon D. Nolasco of the UPLB Legal Office on May 17, 2002, the UP had only until May 23, 2002 within which to file the notice of appeal.

Accordingly, the declaration of finality of the judgment of the RTC, being devoid of factual and legal bases, is set aside. Secondly, even assuming that the service upon Atty. Nolasco was valid and effective, such that the remaining period for the UP to take a timely appeal would end by May 23, 2002, it would still not be correct to find that the judgment of the RTC became final and immutable thereafter due to the notice of appeal being filed too late on June 3, 2002. In so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the rule contained in the second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that the filing of a motion for reconsideration interrupted the running of the period for filing the appeal; and that the period resumed upon notice of the denial of the motion for reconsideration. For that reason, the CA and the RTC might not be taken to task for strictly adhering to the rule then prevailing. However, equity calls for the retroactive application in the UPs favor of the fresh-period rule that the Court first announced in mid-September of 2005 through its ruling in Neypes v. Court of Appeals,98 viz:

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to The UP counters that the service of the denial of the motion for reconsideration upon Atty. Nolasco file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a was defective considering that its counsel of record was not Atty. Nolasco of the UPLB Legal motion for a new trial or motion for reconsideration. Office but the OLS in Diliman, Quezon City; and that the period of appeal should be reckoned from May 31, 2002, the date when the OLS received the order. The UP submits that the filing of the notice of appeal on June 3, 2002 was well within the reglementary period to appeal. The retroactive application of the fresh-period rule, a procedural law that aims "to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution,"99 is We agree with the submission of the UP. impervious to any serious challenge. This is because there are no vested rights in rules of procedure.100 A law or regulation is procedural when it prescribes rules and forms of procedure in Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB order that courts may be able to administer justice.101 It does not come within the legal conception Legal Office was invalid and ineffectual because he was admittedly not the counsel of record of of a retroactive law, or is not subject of the general rule prohibiting the retroactive operation of the UP. The rule is that it is on the counsel and not the client that the service should be made.93 statues, but is given retroactive effect in actions pending and undetermined at the time of its passage without violating any right of a person who may feel that he is adversely affected. That counsel was the OLS in Diliman, Quezon City, which was served with the denial only on May 31, 2002. As such, the running of the remaining period of six days resumed only on June 1, 2002,94 rendering the filing of the UPs notice of appeal on June 3, 2002 timely and wel l within the remaining days of the UPs period to appeal. Verily, the service of the denial of the motion for reconsideration could only be validly made upon the OLS in Diliman, and no other. The fact that Atty. Nolasco was in the employ of the UP at the UPLB Legal Office did not render the service upon him effective. It is settled that where a party has appeared by counsel, service must be made upon such counsel.95 Service on the party or the partys employee is not effective because such notice is not notice in law. 96 This is clear enough from Section 2, second paragraph, of Rule 13, Rules of Court, which explicitly states that: "If any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one copy of any paper served upon him by the opposite side." As such, the period to appeal resumed only on June 1, 2002, the date following the service on May 31, 2002 upon the OLS in Diliman of the copy of the decision of the RTC, not from the date when the UP was notified.97 We have further said that a procedural rule that is amended for the benefit of litigants in furtherance of the administration of justice shall be retroactively applied to likewise favor actions then pending, as equity delights in equality.102 We may even relax stringent procedural rules in order to serve substantial justice and in the exercise of this Courts equity jurisdiction. 103 Equity jurisdiction aims to do complete justice in cases where a court of law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of its statutory or legal jurisdiction.104 It is cogent to add in this regard that to deny the benefit of the fresh-period rule to the UP would amount to injustice and absurdity injustice, because the judgment in question was issued on November 28, 2001 as compared to the judgment in Neypes that was rendered in 1998; absurdity, because parties receiving notices of judgment and final orders issued in the year 1998 would enjoy the benefit of the fresh-period rule but the later rulings of the lower courts like that herein would not.105

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Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the denial, the UPs filing on June 3, 2002 of the notice of appeal was not tardy within the context of the fresh-period rule. For the UP, the fresh period of 15-days counted from service of the denial of the motion for reconsideration would end on June 1, 2002, which was a Saturday. Hence, the UP had until the next working day, or June 3, 2002, a Monday, within which to appeal, conformably with Section 1 of Rule 22, Rules of Court, which holds that: "If the last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day." IV Awards of monetary damages, being devoid of factual and legal bases, did not attain finality and should be deleted Section 14 of Article VIII of the Constitution prescribes that express findings of fact and of law should be made in the decision rendered by any court, to wit: Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based. No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefor. Implementing the constitutional provision in civil actions is Section 1 of Rule 36, Rules of Court, viz: Section 1. Rendition of judgments and final orders. A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the court. (1a) The Constitution and the Rules of Court apparently delineate two main essential parts of a judgment, namely: thebody and the decretal portion. Although the latter is the controlling part,106 the importance of the former is not to be lightly regarded because it is there where the court clearly and distinctly states its findings of fact and of law on which the decision is based. To state it differently, one without the other is ineffectual and useless. The omission of either inevitably results in a judgment that violates the letter and the spirit of the Constitution and the Rules of Court.

It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. Here, the decision of the RTC justified the grant of actual and moral damages, and attorneys fees in the following terse manner, viz: xxx The Court is not unmindful that due to defendants unjustified refusal to pay their outstanding obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to remortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in the form of interest and penalties incurred in the course of the construction of the subject project.109 The statement that "due to defendants unjustified refusal to pay their outstanding obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in the form of interest and penalties incurred in the course of the construction of the subject project" was only a conclusion of fact and law that did not comply with the constitutional and statutory prescription. The statement specified no detailed expenses or losses constituting the P5,716,729.00 actual damages sustained by Stern Builders in relation to the construction project or to other pecuniary hardships. The omission of such expenses or losses directly indicated that Stern Builders did not prove them at all, which then contravened Article 2199, Civil Code, the statutory basis for the award of actual damages, which entitled a person to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. As such, the actual damages allowed by the RTC, being bereft of factual support, were speculative and whimsical. Without the clear and distinct findings of fact and law, the award amounted only to anipse dixit on the part of the RTC,110 and did not attain finality.

There was also no clear and distinct statement of the factual and legal support for the award of moral damages in the substantial amount of P10,000,000.00. The award was thus also speculative and whimsical. Like the actual damages, the moral damages constituted another judicial ipse dixit, the inevitable consequence of which was to render the award of moral damages incapable of attaining finality. In addition, the grant of moral damages in that manner contravened the law that permitted the recovery of moral damages as the means to assuage "physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social 111 The term findings of fact that must be found in the body of the decision refers to statements of fact, humiliation, and similar injury." The contravention of the law was manifest considering that Stern 107 Builders, as an artificial person, was incapable of experiencing pain and moral not to conclusions of law. Unlike in pleadings where ultimate facts alone need to be stated, the sufferings.112 Assuming that in granting the substantial amount of P10,000,000.00 as moral Constitution and the Rules of Court require not only that a decision should state the ultimate facts damages, the RTC might have had in mind that dela Cruz had himself suffered mental anguish but also that it should specify the supporting evidentiary facts, for they are what are called the and anxiety. If that was the case, then the RTC obviously disregarded his separate and distinct findings of fact. personality from that of Stern Builders.113 Moreover, his moral and emotional sufferings as the President of Stern Builders were not the sufferings of Stern Builders. Lastly, the RTC violated the The importance of the findings of fact and of law cannot be overstated. The reason and purpose of basic principle that moral damages were not intended to enrich the plaintiff at the expense of the the Constitution and the Rules of Court in that regard are obviously to inform the parties why they defendant, but to restore the plaintiff to his status quo ante as much as possible. Taken together, win or lose, and what their rights and obligations are. Only thereby is the demand of due process therefore, all these considerations exposed the substantial amount of P10,000,000.00 allowed as met as to the parties. As Justice Isagani A. Cruz explained in Nicos Industrial Corporation v. Court 108 of Appeals:

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moral damages not only to be factually baseless and legally indefensible, but also to be unconscionable, inequitable and unreasonable. Like the actual and moral damages, the P150,000.00, plus P1,500.00 per appearance, granted as attorneys fees were factually unwarranted and devoid of legal basis. The general rule is that a successful litigant cannot recover attorneys fees as part of the damages to be assessed against the losing party because of the policy that no premium should be placed on the right to litigate.114 Prior to the effectivity of the present Civil Code, indeed, such fees could be recovered only when there was a stipulation to that effect. It was only under the present Civil Codethat the right to collect attorneys fees in the cases mentioned in Article 2208115 of the Civil Code came to be recognized.116 Nonetheless, with attorneys fees being allowed in the concept of actual damages,117 their amounts must be factually and legally justified in the body of the decision and not stated for the first time in the decretal portion.118 Stating the amounts only in the dispositive portion of the judgment is not enough;119 a rendition of the factual and legal justifications for them must also be laid out in the body of the decision.120 That the attorneys fees granted to the private respondents did not satisfy the foregoing requirement suffices for the Court to undo them.121 The grant was ineffectual for being contrary to law and public policy, it being clear that the express findings of fact and law were intended to bring the case within the exception and thereby justify the award of the attorneys fees. Devoid of such express findings, the award was a conclusion without a premise, its basis being improperly left to speculation and conjecture.122 Nonetheless, the absence of findings of fact and of any statement of the law and jurisprudence on which the awards of actual and moral damages, as well as of attorneys fees, were based was a fatal flaw that invalidated the decision of the RTC only as to such awards. As the Court declared in Velarde v. Social Justice Society,123 the failure to comply with the constitutional requirement for a clear and distinct statement of the supporting facts and law "is a grave abuse of discretion amounting to lack or excess of jurisdiction" and that "(d)ecisions or orders issued in careless disregard of the constitutional mandate are a patent nullity and must be struck down as void."124 The other item granted by the RTC (i.e., P503,462.74) shall stand, subject to the action of the COA as stated herein. WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the decision of the Court of Appeals under review; ANNULS the orders for the garnishment of the funds of the University of the Philippines and for the release of the garnished amount to Stern Builders Corporation and Servillano dela Cruz; and DELETES from the decision of the Regional Trial Court dated November 28, 2001 for being void only the awards of actual damages of P5,716,729.00, moral damages of P10,000,000.00, and attorney's fees ofP150,000.00, plus P1,500.00 per appearance, in favor of Stern Builders Corporation and Servillano dela Cruz. The Court ORDERS Stem Builders Corporation and Servillano dela Cruz to redeposit the amount ofP16,370,191.74 within 10 days from receipt of this decision. Costs of suit to be paid by the private respondents. SO ORDERED. SECOND DIVISION

G.R. No. 190102

July 11, 2012

ACCENTURE, INC., Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent. DECISION SERENO, J.: This is a Petition filed under Rule 45 of the 1997 Rules of Civil Procedure, praying for the reversal of the Decision of the Court of Tax Appeals En Banc (CTA En Banc ) dated 22 September 2009 and its subsequent Resolution dated 23 October 2009.1 Accenture, Inc. (Accenture) is a corporation engaged in the business of providing management consulting, business strategies development, and selling and/or licensing of software.2 It is duly registered with the Bureau of Internal Revenue (BIR) as a Value Added Tax (VAT) taxpayer or enterprise in accordance with Section 236 of the National Internal Revenue Code (Tax Code). 3 On 9 August 2002, Accenture filed its Monthly VAT Return for the period 1 July 2002 to 31 August 2002 (1st period). Its Quarterly VAT Return for the fourth quarter of 2002, which covers the 1st period, was filed on 17 September 2002; and an Amended Quarterly VAT Return, on 21 June 2004.4 The following are reflected in Accentures VAT Return for the fourth quarter of 2002: 5 1wphi1 Purchases Domestic Purchases- Capital Goods Domestic Purchases- Goods other than capital Goods Domestic Purchases- Services Total Input Tax Zero-rated Sales Total Sales Amount P12,312,722.00 P64,789,507.90 P16,455,868.10 Input VAT P1,231,272.20 P6,478,950.79 P1,645,586.81 P9,355,809.80 P316,113,513.34 P335,640,544.74

Accenture filed its Monthly VAT Return for the month of September 2002 on 24 October 2002; and that for October 2002, on 12 November 2002. These returns were amended on 9 January 2003. Accentures Quarterly VAT Return for the first quarter of 2003, which included the period 1 September 2002 to 30 November 2002 (2nd period), was filed on 17 December 2002; and the Amended Quarterly VAT Return, on 18 June 2004. The latter contains the following information:6

Purchases

Amount

Input VAT

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Domestic Purchases- Capital Goods Domestic Purchases- Goods other than capital Goods Domestic Purchases-Services Total Input Tax Zero-rated Sales Total Sales

P80,765,294.10 P132,820,541.70 P63,238,758.00

P8,076,529.41 P13,282,054.17 P6,323,875.80 P27,682,459.38

In resolving the sole issue of whether or not Accenture was entitled to a refund or an issuance of a TCC in the amount of P35,178,844.21,14 the Division ruled that Accenture had failed to present evidence to prove that the foreign clients to which the former rendered services did business outside the Philippines.15 Ruling that Accentures services would qualify for zero-rating under the 1997 National Internal Revenue Code of the Philippines (Tax Code) only if the recipient of the services was doing business outside of the Philippines,16 the Division cited Commissioner of Internal Revenue v. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. (Burmeister)17 as basis.

Accenture appealed the Divisions Decision through a Motion for Reconsideration (MR).18 In its P545,686,639.18 MR, it argued that the reliance of the Division on Burmeister was misplaced19 for the following reasons: P572,880,982.68 1. The issue involved in Burmeister was the entitlement of the applicant to a refund, given that the recipient of its service was doing business in the Philippines; it was not an issue of failure of the applicant to present evidence to prove the fact that the recipient of its services was a foreign corporation doing business outside the Philippines. 20 2. Burmeister emphasized that, to qualify for zero-rating, the recipient of the services should be doing business outside the Philippines, and Accenture had successfully established that.21 3. Having been promulgated on 22 January 2007 or after Accenture filed its Petition with the Division, Burmeister cannot be made to apply to this case. 22

The monthly and quarterly VAT returns of Accenture show that, notwithstanding its application of the input VAT credits earned from its zero-rated transactions against its output VAT liabilities, it still had excess or unutilized input VAT credits. These VAT credits are in the amounts of P9,355,809.80 for the 1st period and P27,682,459.38 for the 2nd period, or a total of P37,038,269.18.7 Out of the P37,038,269.18, only P35,178,844.21 pertained to the allocated input VAT on Accentures "domestic purchases of taxable goods which cannot be directly attributed to its zero rated sale of services."8 This allocated input VAT was broken down to P8,811,301.66 for the 1st period and P26,367,542.55 for the 2nd period.9

The excess input VAT was not applied to any output VAT that Accenture was liable for in the same Accenture also cited Commissioner of Internal Revenue v. American Express (Amex)23 in support quarter when the amount was earnedor to any of the succeeding quarters. Instead, it was of its position. The MR was denied by the Division in its 12 March 2009 Resolution. 24 carried forward to petitioners 2nd Quarterly VAT Return for 2003. 10 Thus, on 1 July 2004, Accenture filed with the Department of Finance (DoF) an administrative claim for the refund or the issuance of a Tax Credit Certificate (TCC). The DoF did not act on the claim of Accenture. Hence, on 31 August 2004, the latter filed a Petition for Review with the First Division of the Court of Tax Appeals (Division), praying for the issuance of a TCC in its favor in the amount of P35,178,844.21. The Commissioner of Internal Revenue (CIR), in its Answer,11 argued thus: 1. The sale by Accenture of goods and services to its clients are not zero-rated transactions. 2. Claims for refund are construed strictly against the claimant, and Accenture has failed to prove that it is entitled to a refund, because its claim has not been fully substantiated or documented. In a 13 November 2008 Decision,12 the Division denied the Petition of Accenture for failing to prove that the latters sale of services to the alleged foreign clients qualified for zero percent VAT.13 Accenture appealed to the CTA En Banc. There it argued that prior to the amendment introduced by Republic Act No. (R.A.) 9337, 25 there was no requirement that the services must be rendered to a person engaged in business conducted outside the Philippines to qualify for zero-rating. The CTA En Banc agreed that because the case pertained to the third and the fourth quarters of taxable year 2002, the applicable law was the 1997 Tax Code, and not R.A. 9337. 26 Still, it ruled that even though the provision used in Burmeister was Section 102(b)(2) of the earlier 1977 Tax Code, the pronouncement therein requiring recipients of services to be engaged in business outside the Philippines to qualify for zero-rating was applicable to the case at bar, because Section 108(B)(2) of the 1997 Tax Code was a mere reenactment of Section 102(b)(2) of the 1977 Tax Code. The CTA En Banc concluded that Accenture failed to discharge the burden of proving the latters allegation that its clients were foreign-based.27 Resolute, Accenture filed a Petition for Review with the CTA En Banc, but the latter affirmed the Divisions Decision and Resolution.28 A subsequent MR was also denied in a Resolution dated 23 October 2009. Hence, the present Petition for Review29 under Rule 45.

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In a Joint Stipulation of Facts and Issues, the parties and the Division have agreed to submit the following issues for resolution:

acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax 1. Whether or not Petitioners sales of goods and services are zero-rated for VAT due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be purposes under Section 108(B)(2)(3) of the 1997 Tax Code. allocated proportionately on the basis of the volume of sales. Section 108(B) referred to in the foregoing provision was first seen when Presidential Decree No. (P.D.) 199431 amended Title IV of 32 2. Whether or not petitioners claim for refund/tax credit in the amount of P35,178,884.21 P.D. 1158, which is also known as the National Internal Revenue Code of 1977. Several Decisions have referred to this as the 1986 Tax Code, even though it merely amended Title IV of represents unutilized input VAT paid on its domestic purchases of goods and services the 1977 Tax Code. for the period commencing from 1 July 2002 until 30 November 2002. 3. Whether or not Petitioner has carried over to the succeeding taxable quarter(s) or year(s) the alleged unutilized input VAT paid on its domestic purchases of goods and services for the period commencing from 1 July 2002 until 30 November 2002, and applied the same fully to its output VAT liability for the said period. 4. Whether or not Petitioner is entitled to the refund of the amount of P35,178,884.21, representing the unutilized input VAT on domestic purchases of goods and services for the period commencing from 1 July 2002 until 30 November 2002, from its sales of services to various foreign clients. 5. Whether or not Petitioners claim for refund/tax credit in the amount of P35,178,884.21, as alleged unutilized input VAT on domestic purchases of goods and services for the period covering 1 July 2002 until 30 November 2002 are duly substantiated by proper documents.30 Two years thereafter, or on 1 January 1988, Executive Order No. (E.O.) 27333 further amended provisions of Title IV. E.O. 273 by transferring the old Title IV provisions to Title VI and filling in the former title with new provisions that imposed a VAT. The VAT system introduced in E.O. 273 was restructured through Republic Act No. (R.A.) 7716.34 This law, which was approved on 5 May 1994, widened the tax base. Section 3 thereof reads: SECTION 3. Section 102 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 102. Value-added tax on sale of services and use or lease of properties. x x x xxx xxx xxx

For consideration in the present Petition are the following issues: 1. Should the recipient of the services be "doing business outside the Philippines" for the transaction to be zero-rated under Section 108(B)(2) of the 1997 Tax Code? 2. Has Accenture successfully proven that its clients are entities doing business outside the Philippines? Recipient of services must be doing business outside the Philippines for the transactions to qualify as zero-rated. Accenture anchors its refund claim on Section 112(A) of the 1997 Tax Code, which allows the refund of unutilized input VAT earned from zero-rated or effectively zero-rated sales. The provision reads: SEC. 112. Refunds or Tax Credits of Input Tax. The 1997 Tax Code reproduced Section 102(b) of the 1977 Tax Code in its Section 108(B), to wit: (A) Zero-Rated or Effectively Zero-Rated Sales. - Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zerorated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT- registered persons shall be subject to zero percent (0%) rate. "(b) Transactions subject to zero-rate. The following services performed in the Philippines by VAT-registered persons shall be subject to 0%: "(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP). "(2) Services other than those mentioned in the preceding sub-paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)." Essentially, Section 102(b) of the 1977 Tax Codeas amended by P.D. 1994, E.O. 273, and R.A. 7716provides that if the consideration for the services provided by a VAT-registered person is in a foreign currency, then this transaction shall be subjected to zero percent rate.

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(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

Accenture questions the Divisions application to this case of the pronouncements made in Burmeister. According to petitioner, the provision applied to the present case was Section 102(b) of the 1977 Tax Code, and not Section 108(B) of the 1997 Tax Code, which was the law effective when the subject transactions were entered into and a refund was applied for.

(2) Services other than those mentioned in the preceding paragraph, the consideration In refuting Accentures theory, the CTA En Banc ruled that since Section 108(B) of the 1997 Tax for which is paid for in acceptable foreign currency and accounted for in accordance with Code was a mere reproduction of Section 102(b) of the 1977 Tax Code, this Courts interpretation the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); x x x. of the latter may be used in interpreting the former, viz: On 1 November 2005, Section 6 of R.A. 9337, which amended the foregoing provision, became effective. It reads: SEC. 6. Section 108 of the same Code, as amended, is hereby further amended to read as follows: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); "(2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); x x x." (Emphasis supplied) In the Burmeister case, the Supreme Court harmonized both Sections 102(b)(1) and 102(b)(2) of the 1977 Tax Code, as amended, pertaining to zero-rated transactions. A parallel approach should be accorded to the renumbered provisions of Sections 108(B)(2) and 108(B)(1) of the 1997 NIRC. This means that Section 108(B)(2) must be read in conjunction with Section 108(B)(1). Section 108(B)(2) requires as follows: a) services other than processing, manufacturing or repacking rendered by VAT registered persons in the Philippines; and b) the transaction paid for in acceptable foreign currency duly accounted for in accordance with BSP rules and regulations. The same provision made reference to Section 108(B)(1) further imposing the requisite c) that the recipient of services must be performing business outside of Philippines. Otherwise, if both the provider and recipient of service are doing business in the Philippines, the sale transaction is subject to regular VAT as explained in the Burmeister case x x x. xxx xxx xxx

Clearly, the Supreme Courts pronouncements in the Burmeister case requiring that the recipient of the services must be doing business outside the Philippines as mandated by law govern the instant case.38 Assuming that the foregoing is true, Accenture still argues that the tax appeals courts cannot be allowed to apply to Burmeister this Courts interpretation of Section 102(b) of the 1977 Tax Code, because the Petition of Accenture had already been filed before the case was even promulgated on 22 January 2007,39 to wit: x x x. While the Burmeister case forms part of the legal system and assumes the same authority as the statute itself, however, the same cannot be applied retroactively against the Petitioner because to do so will be prejudicial to the latter.40

The meat of Accentures argument is that nowhere does Section 108(B) of the 1997 Tax Code The CTA en banc is of the opinion that Accenture cannot invoke the non-retroactivity of the rulings state that services, to be zero-rated, should be rendered to clients doing business outside the of the Supreme Court, whose interpretation of the law is part of that law as of the date of its Philippines, the requirement introduced by R.A. 9337.35 Required by Section 108(B), prior to the enactment.41 amendment, is that the consideration for the services rendered be in foreign currency and in accordance with the rules of the Bangko Sentral ng Pilipinas (BSP). Since Accenture has complied with all the conditions imposed in Section 108(B), it is entitled to the refund prayed for. We rule that the recipient of the service must be doing business outside the Philippines for the transaction to qualify for zero-rating under Section 108(B) of the Tax Code. In support of its claim, Accenture cites Amex, in which this Court supposedly ruled that Section 108(B) reveals a clear intent on the part of the legislators not to impose the condition of being This Court upholds the position of the CTA en banc that, because Section 108(B) of the 1997 Tax "consumed abroad" in order for the services performed in the Philippines to be zero-rated.36 Code is a verbatim copy of Section 102(b) of the 1977 Tax Code, any interpretation of the latter holds true for the former. The Division ruled that this Court, in Amex and Burmeister, did not declare that the requirement that the client must be doing business outside the Philippinescan be disregarded, because this Moreover, even though Accentures Petition was filed before Burmeister was promulgated, the requirement is expressly provided in Article 108(2) of the Tax Code.37 pronouncements made in that case may be applied to the present one without violating the rule

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against retroactive application. When this Court decides a case, it does not pass a new law, but merely interprets a preexisting one.42 When this Court interpreted Section 102(b) of the 1977 Tax Code in Burmeister, this interpretation became part of the law from the moment it became effective. It is elementary that the interpretation of a law by this Court constitutes part of that law from the date it was originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that the interpreted law carried into effect. 43 Accenture questions the CTAs application of Burmeister, because the provision interpreted therein was Section 102(b) of the 1977 Tax Code. In support of its position that Section 108 of the 1997 Tax Code does not require that the services be rendered to an entity doing business outside the Philippines, Accenture invokes this Courts pronouncements in Amex. However, a reading of that case will readily reveal that the provision applied was Section 102(b) of the 1977 Tax Code, and not Section 108 of the 1997 Tax Code. As previously mentioned, an interpretation of Section 102(b) of the 1977 Tax Code is an interpretation of Section 108 of the 1997 Tax Code, the latter being a mere reproduction of the former. This Court further finds that Accentures reliance on Amex is misplaced. We ruled in Amex that Section 102 of the 1977 Tax Code does not require that the services be consumed abroad to be zero-rated. However, nowhere in that case did this Court discuss the necessary qualification of the recipient of the service, as this matter was never put in question. In fact, the recipient of the service in Amex is a nonresident foreign client. The aforementioned case explains how the credit card system works. The issuance of a credit card allows the holder thereof to obtain, on credit, goods and services from certain establishments. As proof that this credit is extended by the establishment, a credit card draft is issued. Thereafter, the company issuing the credit card will pay for the purchases of the credit card holders by redeeming the drafts. The obligation to collect from the card holders and to bear the lossin case they do not payrests on the issuer of the credit card. The service provided by respondent in Amex consisted of gathering the bills and credit card drafts from establishments located in the Philippines and forwarding them to its parent company's regional operating centers outside the country. It facilitated in the Philippines the collection and payment of receivables belonging to its Hong Kong-based foreign client. The Court explained how the services rendered in Amex were considered to have been performed and consumed in the Philippines, to wit: Consumption is "the use of a thing in a way that thereby exhausts it." Applied to services, the term means the performance or "successful completion of a contractual duty, usually resulting in the performers release from any past or future liability x x x." The services rendered by respondent are performed or successfully completed upon its sending to its foreign client the drafts and bills it has gathered from service establishments here. Its services, having been performed in the Philippines, are therefore also consumed in the Philippines.44 The effect of the place of consumption on the zero-rating of the transaction was not the issue in Burmeister.1wphi1Instead, this Court addressed the squarely raised issue of whether the recipient of services should be doing business outside the Philippines for the transaction to qualify for zero-rating. We ruled that it should. Thus, another essential condition for qualification for zerorating under Section 102(b)(2) of the 1977 Tax Code is that the recipient of the business be doing

that business outside the Philippines. In clarifying that there is no conflict between this pronouncement and that laid down in Amex, we ruled thus: x x x. As the Court held in Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch), the place of payment is immaterial, much less is the place where the output of the service is ultimately used. An essential condition for entitlement to 0% VAT under Section 102 (b) (1) and (2) is that the recipient of the services is a person doing business outside the Philippines. In this case, the recipient of the services is the Consortium, which is doing business not outside, but within the Philippines because it has a 15-year contract to operate and maintain NAPOCORs two 100-megawatt power barges in Mindanao. (Emphasis in the original)45 In Amex we ruled that the place of performance and/or consumption of the service is immaterial. In Burmeister, the Court found that, although the place of the consumption of the service does not affect the entitlement of a transaction to zero-rating, the place where the recipient conducts its business does. Amex does not conflict with Burmeister. In fact, to fully understand how Section 102(b)(2) of the 1977 Tax Codeand consequently Section 108(B)(2) of the 1997 Tax Codewas intended to operate, the two aforementioned cases should be taken together. The zero-rating of the services performed by respondent in Amex was affirmed by the Court, because although the services rendered were both performed and consumed in the Philippines, the recipient of the service was still an entity doing business outside the Philippines as required in Burmeister. That the recipient of the service should be doing business outside the Philippines to qualify for zero-rating is the only logical interpretation of Section 102(b)(2) of the 1977 Tax Code, as we explained in Burmeister: This can only be the logical interpretation of Section 102 (b) (2). If the provider and recipient of the "other services" are both doing business in the Philippines, the payment of foreign currency is irrelevant. Otherwise, those subject to the regular VAT under Section 102 (a) can avoid paying the VAT by simply stipulating payment in foreign currency inwardly remitted by the recipient of services. To interpret Section 102 (b) (2) to apply to a payer-recipient of services doing business in the Philippines is to make the payment of the regular VAT under Section 102 (a) dependent on the generosity of the taxpayer. The provider of services can choose to pay the regular VAT or avoid it by stipulating payment in foreign currency inwardly remitted by the payer-recipient. Such interpretation removes Section 102 (a) as a tax measure in the Tax Code, an interpretation this Court cannot sanction. A tax is a mandatory exaction, not a voluntary contribution. xxx xxx xxx

Further, when the provider and recipient of services are both doing business in the Philippines, their transaction falls squarely under Section 102 (a) governing domestic sale or exchange of services. Indeed, this is a purely local sale or exchange of services subject to the regular VAT, unless of course the transaction falls under the other provisions of Section 102 (b). Thus, when Section 102 (b) (2) speaks of "services other than those mentioned in the preceding subparagraph," the legislative intent is that only the services are different between subparagraphs 1 and 2. The requirements for zero-rating, including the essential condition that the recipient of services is doing business outside the Philippines, remain the same under both subparagraphs. (Emphasis in the original)46

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Lastly, it is worth mentioning that prior to the promulgation of Burmeister, Congress had already clarified the intent behind Sections 102(b)(2) of the 1977 Tax Code and 108(B)(2) of the 1997 Tax Code amending the earlier provision. R.A. 9337 added the following phrase: "rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed." Accenture has failed to establish that the recipients of its services do business outside the Philippines. Accenture argues that based on the documentary evidence it presented, 47 it was able to establish the following circumstances: 1. The records of the Securities and Exchange Commission (SEC) show that Accentures clients have not established any branch office in which to do business in the Philippines. 2. For these services, Accenture bills another corporation, Accenture Participations B.V. (APB), which is likewise a foreign corporation with no "presence in the Philippines."

xxx

xxx

xxx

(H) The term "resident foreign corporation" applies to a foreign corporation engaged in trade or business within the Philippines. (I) The term nonresident foreign corporation applies to a foreign corporation not engaged in trade or business within the Philippines. (Emphasis in the original) Consequently, to come within the purview of Section 108(B)(2), it is not enough that the recipient of the service be proven to be a foreign corporation; rather, it must be specifically proven to be a nonresident foreign corporation. There is no specific criterion as to what constitutes "doing" or "engaging in" or "transacting" business. We ruled thus in Commissioner of Internal Revenue v. British Overseas Airways Corporation:52

x x x. There is no specific criterion as to what constitutes "doing" or "engaging in" or "transacting" business. Each case must be judged in the light of its peculiar environmental circumstances. The term implies a continuity of commercial dealings and arrangements, and contemplates, to that 3. Only those not doing business in the Philippines can be required under BSP rules to extent, the performance of acts or works or the exercise of some of the functions normally incident pay in acceptable currency for their purchase of goods and services from the to, and in progressive prosecution of commercial gain or for the purpose and object of the Philippines. Thus, in a domestic transaction, where the provider and recipient of services business organization. "In order that a foreign corporation may be regarded as doing business are both doing business in the Philippines, the BSP cannot require any party to make within a State, there must be continuity of conduct and intention to establish a continuous payment in foreign currency.48 business, such as the appointment of a local agent, and not one of a temporary character." 53 Accenture claims that these documentary pieces of evidence are supported by the Report of Emmanuel Mendoza, the Court-commissioned Independent Certified Public Accountant. He ascertained that Accentures gross billings pertaining to zero-rated sales were all supported by zero-rated Official Receipts and Billing Statements. These documents show that these zero-rated sales were paid in foreign exchange currency and duly accounted for in the rules and regulations of the BSP.49 In the CTAs opinion, however, the documents presented by Accenture merely substantiate the existence of the sales, receipt of foreign currency payments, and inward remittance of the proceeds of these sales duly accounted for in accordance with BSP rules. Petitioner presented no evidence whatsoever that these clients were doing business outside the Philippines. 50 Accenture insists, however, that it was able to establish that it had rendered services to foreign corporations doing business outside the Philippines, unlike in Burmeister, which allegedly involved a foreign corporation doing business in the Philippines.51 We deny Accentures Petition for a tax refund. The evidence presented by Accenture may have established that its clients are foreign.1wphi1 This fact does not automatically mean, however, that these clients were doing business outside the Philippines. After all, the Tax Code itself has provisions for a foreign corporation engaged in business within the Philippines and vice versa, to wit: SEC. 22. Definitions - When used in this Title: A taxpayer claiming a tax credit or refund has the burden of proof to establish the factual basis of that claim.1wphi1 Tax refunds, like tax exemptions, are construed strictly against the taxpayer. 54 Accenture failed to discharge this burden. It alleged and presented evidence to prove only that its clients were foreign entities. However, as found by both the CTA Division and the CTA En Banc, no evidence was presented by Accenture to prove the fact that the foreign clients to whom petitioner rendered its services were clients doing business outside the Philippines. As ruled by the CTA En Banc, the Official Receipts, Intercompany Payment Requests, Billing Statements, Memo Invoices-Receivable, Memo Invoices-Payable, and Bank Statements presented by Accenture merely substantiated the existence of sales, receipt of foreign currency payments, and inward remittance of the proceeds of such sales duly accounted for in accordance with BSP rules, all of these were devoid of any evidence that the clients were doing business outside of the Philippines.55 WHEREFORE, the instant Petition is DENIED. The 22 September 2009 Decision and the 23 October 2009 Resolution of the Court of Tax Appeals En Banc in C.T.A. EB No. 477, dismissing the Petition for the refund of the excess or unutilized input VAT credits of Accenture, Inc., are AFFIRMED. FIRST DIVISION G.R. No. 154213 August 23, 2012

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EASTERN MEDITERRANEAN MARITIME LTD. AND AGEMAR MANNING AGENCY, INC., Petitioners, vs. EST ANISLAO SURIO, FREDDIE PALGUIRAN, GRACIANO MORALES, HENRY CASTILLO, ARISTOTLE ARREOLA, ALEXANDER YGOT, ANRIQUE BA TTUNG, GREGORIO ALDOVINO, NARCISO FRIAS, VICTOR FLORES, SAMUEL MARCIAL, CARLITO PALGUIRAN, DUQUE VINLUAN, .JESUS MENDEGORIN, NEIL FLORES, ROMEO MANGALIAG, JOE GARFIN and SALESTINO SUSA, Respondents. DECISION

On May 23, 1996, the POEA dismissed the complaint for disciplinary action. Petitioners received the order of dismissal on July 24, 1996.2 Relying on Section 1, Rule V, Book VII of the 1991 POEA Rules, petitioners filed a partial appeal on August 2, 1996 in the NLRC, still maintaining that respondents should be administratively sanctioned for their conduct while they were on board MT Seadance. On March 21, 1997, the NLRC dismissed petitioners appeal for lack of jurisdiction, 3 thus: We dismiss the partial appeal.

BERSAMIN, J.: On appeal is the decision the Court of Appeals (CA) promulgated on December 21, 2001 affirming the resolution of the National Labor Relations Commission (NLRC) declaring itself to be without appellate jurisdiction to review the decision of the Philippine Overseas Employment Administration (POEA) involving petitioners complaint for disciplinary action against respondents. 1 Respondents were former crewmembers of MT Seadance, a vessel owned by petitioner Eastern Mediterranean Maritime Ltd. and manned and operated by petitioner Agemar Manning Agency, Inc. While respondents were still on board the vessel, they experienced delays in the payment of their wages and in the remittance of allotments, and were not paid for extra work and extra overtime work. They complained about the vessels inadequate equipment, and about the failure of the petitioners to heed their repeated requests for the improvement of their working conditions. On December 19, 1993, when MT Seadance docked at the port of Brofjorden, Sweden to discharge oil, representatives of the International Transport Federation (ITF) boarded the vessel and found the wages of the respondents to be below the prevailing rates. The ensuing negotiations between the ITF and the vessel owner on the increase in respondents wages resulted in the payment by the vessel owner of wage differentials and the immediate repatriation of respondents to the Philippines. Subsequently, on December 23, 1993, the petitioners filed against the newly-repatriated respondents a complaint for disciplinary action based on breach of discipline and for the reimbursement of the wage increases in the Workers Assistance and Adjudication Office of the POEA. During the pendency of the administrative complaint in the POEA, Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) took effect on July 15, 1995. Section 10 of Republic Act No. 8042 vested original and exclusive jurisdiction over all money claims arising out of employer-employee relationships involving overseas Filipino workers in the Labor Arbiters, to wit: Section 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. The jurisdiction over such claims was previously exercised by the POEA under the POEA Rules and Regulations of 1991 (1991 POEA Rules). The Commission has no jurisdiction to review cases decided by the POEA Administrator involving disciplinary actions. Under the Migrant Workers and Overseas Filipinos Act of 1995, the Labor Arbiter shall have jurisdiction over money claims involving employer-employee relationship (sec. 10, R.A. 8042). Said law does not provide that appeals from decisions arising from complaint for disciplinary action rest in the Commission. PREMISES CONSIDERED, instant appeal from the Order of May 23, 1996 is hereby DISMISSED for lack of jurisdiction. SO ORDERED. Not satisfied, petitioners moved for reconsideration, but the NLRC denied their motion. They received the denial on July 8, 1997.4 Petitioners then commenced in this Court a special civil action for certiorari and mandamus. Citing St. Martin Funeral Homes v. National Labor Relations Commission, 5 however, the Court referred the petition to the CA on November 25, 1998. Petitioners contended in their petition that: THE NLRC GRAVELY ABUSED ITS DISCRETION AND/OR GRAVELY ERRED IN DISMISSING PETITIONERS APPEAL AND MOTION FOR RECONSIDERATION WHEN IT REFUSED TO TAKE COGNIZANCE OF PETITIONERS APPEAL DESPITE BEING EMPOWERED TO DO SO UNDER THE LAW.6 On December 21, 2001, the CA dismissed the petition for certiorari and mandamus, holding that the inclusion and deletion of overseas contract workers from the POEA blacklist/watchlist were within the exclusive jurisdiction of the POEA to the exclusion of the NLRC, and that the NLRC had no appellate jurisdiction to review the matter, viz: Section 10 of RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, provides that: "Money Claims Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving

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Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. xxxx Likewise, the Rules and Regulations implementing RA 8042 reiterate the jurisdiction of POEA, thus: "Section 28. Jurisdiction of the POEA. The POEA shall exercise original and exclusive jurisdiction to hear and decide: a) All cases, which are administrative in character, involving or arising out of violations of rules and regulations relating to licensing and registration of recruitment and employment agencies or entities; and b) Disciplinary action cases and other special cases, which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers." The petition for review lacks merit. Further, Sections 6 and 7 Rule VII, Book VII of the POEA Rules & Regulations (1991) provide: "Sec. 6. Disqualification of Contract Workers. Contract workers, including seamen, against whom have been imposed or with pending obligations imposed upon them through an order, decision or resolution shall be included in the POEA Blacklist Workers shall be disqualified from overseas employment unless properly cleared by the Administration or until their suspension is served or lifted. Sec. 7. Delisting of the Contract Workers Name from the POEA Watchlist. The name of an overseas worker may be excluded, deleted and removed from the POEA Watchlist only after disposition of the case by the Administration."

Issue Petitioners still appeal, submitting to the Court the sole issue of: WHETHER OR NOT THE NLRC HAS JURISDICTION TO REVIEW ON APPEAL CASES DECIDED BY THE POEA ON MATTERS PERTAINING TO DISCIPLINARY ACTIONS AGAINST PRIVATE RESPONDENTS. They contend that both the CA and the NLRC had no basis to rule that the NLRC had no jurisdiction to entertain the appeal only because Republic Act No. 8042 had not provided for its retroactive application. Respondents counter that the appeal should have been filed with the Secretary of Labor who had exclusive jurisdiction to review cases involving administrative matters decided by the POEA. Ruling

Petitioners adamant insistence that the NLRC should have appellate authority over the POEAs decision in the disciplinary action because their complaint against respondents was filed in 1993 was unwarranted. Although Republic Act No. 8042, through its Section 10, transferred the original and exclusive jurisdiction to hear and decide money claims involving overseas Filipino workers from the POEA to the Labor Arbiters, the law did not remove from the POEA the original and exclusive jurisdiction to hear and decide all disciplinary action cases and other special cases administrative in character involving such workers. The obvious intent of Republic Act No. 8042 was to have the POEA focus its efforts in resolving all administrative matters affecting and involving such workers. This intent was even expressly recognized in the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 promulgated on February 29, 1996, viz:

Thus, it can be concluded from the afore-quoted law and rules that, public respondent has no Section 28. Jurisdiction of the POEA. The POEA shall exercise original and exclusive jurisdiction jurisdiction to review disciplinary cases decided by the POEA involving contract workers. Clearly, to hear and decide: the matter of inclusion and deletion of overseas contract workers in the POEA Blacklist/Watchlist is within the exclusive jurisdiction of the POEA to the exclusion of the public respondent. Nor has the latter appellate jurisdiction to review the findings of the POEA involving such cases. (a) all cases, which are administrative in character, involving or arising out of violations or rules and regulations relating to licensing and registration of recruitment and employment agencies or entities; and xxx In fine, we find and so hold, that, no grave abuse of discretion can be imputed to the public respondent when it issued the assailed Decision and Order, dated March 21, 1997 and June 13, 1997, respectively, dismissing petitioners appeal from the decision of the POEA. WHEREFORE, finding the instant petition not impressed with merit, the same is hereby DENIED DUE COURSE. Costs against petitioners. SO ORDERED.7 (b) disciplinary action cases and other special cases, which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers. Section 29. Venue The cases mentioned in Section 28(a) of this Rule, may be filed with the POEA Adjudication Office or the DOLE/POEA regional office of the place where the complainant applied or was recruited, at the option of the complainant. The office with which the complaint was first filed shall take cognizance of the case. Disciplinary action cases and other special cases, as mentioned in the preceding Section, shall be filed with the POEA Adjudication Office.

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It is clear to us, therefore, that the NLRC had no appellate jurisdiction to review the decision of the POEA in disciplinary cases involving overseas contract workers. Petitioners position that Republic Act No. 8042 should not be applied retroactively to the review of the POEAs decision dismissing their complaint against respondents has no support in jurisprudence. Although, as a rule, all laws are prospective in application unless the contrary is expressly provided,8 or unless the law is procedural or curative in nature,9 there is no serious question about the retroactive applicability of Republic Act No. 8042 to the appeal of the POEAs decision on petitioners disciplinary action against respondents. In a way, Republic Act No. 8042 was a procedural law due to its providing or omitting guidelines on appeal. A law is procedural, according to De Los Santos v. Vda. De Mangubat,10 when it Refers to the adjective law which prescribes rules and forms of procedure in order that courts may be able to administer justice. Procedural laws do not come within the legal conception of a retroactive law, or the general rule against the retroactive operation of statues they may be given retroactive effect on actions pending and undetermined at the time of their passage and this will not violate any right of a person who may feel that he is adversely affected, insomuch as there are no vested rights in rules of procedure. Republic Act No. 8042 applies to petitioners complaint by virtue of the case being then still pending or undetermined at the time of the laws passage, there being no vested rights in rules of procedure.11 They could not validly insist that the reckoning period to ascertain which law or rule should apply was the time when the disciplinary complaint was originally filed in the POEA in 1993. Moreover, Republic Act No. 8042 and its implementing rules and regulations were already in effect when petitioners took their appeal. A statute that eliminates the right to appeal and considers the judgment rendered final and unappealable only destroys the right to appeal, but not the right to prosecute an appeal that has been perfected prior to its passage, for, at that stage, the right to appeal has already vested and cannot be impaired.12 Conversely and by analogy, an appeal that is perfected when a new statute affecting appellate jurisdiction comes into effect should comply with the provisions of the new law, unless otherwise provided by the new law. Relevantly, petitioners need to be reminded that the right to appeal from a decision is a privilege established by positive laws, which, upon authorizing the taking of the appeal, point out the cases in which it is proper to present the appeal, the procedure to be observed, and the courts by which the appeal is to be proceeded with and resolved.13 This is why we consistently hold that the right to appeal is statutory in character, and is available only if granted by law or statute.141wphi1

agencies, the word "control" shall encompass supervision and control as defined in this paragraph. xxx. Thus, Section 1, Part VII, Rule V of the 2003 POEA Rules and Regulations specifically provides, as follows: Section 1. Jurisdiction. The Secretary shall have the exclusive and original jurisdiction to act on appeals or petition for review of disciplinary action cases decided by the Administration. In conclusion, we hold that petitioners should have appealed the adverse decision of the POEA to the Secretary of Labor instead of to the NLRC. Consequently, the CA, being correct on its conclusions, committed no error in upholding the NLRC. WHEREFORE, we AFFIRM the decision promulgated on December 21, 2001 by the Court of Appeals; andORDER the petitioners to pay the costs of suit. SO ORDERED. SECOND DIVISION G.R. No. 165166 August 15, 2012

CHARLES GOTARDO, Petitioner, vs. DIVINA BULING, Respondent. DECISION BRION, J.:

We resolve the petition for review on certiorari, 1 filed by petitioner Charles Gotardo, to challenge the March 5, 2004 decision2 and the July 27, 2004 resolution3 of the Court of Appeals (CA) in CA GR CV No. 76326. The CA decision ordered the petitioner to recognize and provide legal support When Republic Act No. 8042 withheld the appellate jurisdiction of the NLRC in respect of cases to his minor son, Gliffze 0. Buling. The CA resolution denied the petitioner's subsequent motion for decided by the POEA, the appellate jurisdiction was vested in the Secretary of Labor in accordance with his power of supervision and control under Section 38(1), Chapter 7, Title II, Book reconsideration. III of the Revised Administrative Code of 1987, to wit: FACTUAL BACKGROUND Section 38. Definition of Administrative Relationship. Unless otherwise expressly stated in the Code or in other laws defining the special relationships of particular agencies, administrative relationships shall be categorized and defined as follows: Supervision and Control. Supervision and control shall include authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate; direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify acts and decisions of subordinate officials or units; determine priorities in the execution of plans and programs. Unless a different meaning is explicitly provided in the specific law governing the relationship of particular On September 6, 1995, respondent Divina Buling filed a complaint with the Regional Trial Court (RTC) of Maasin, Southern Leyte, Branch 25, for compulsory recognition and support pendente lite, claiming that the petitioner is the father of her child Gliffze.4 In his answer, the petitioner denied the imputed paternity of Gliffze. 5 For the parties failure to amicably settle the dispute, the RTC terminated the pre-trial proceedings.6 Trial on the merits ensued.

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The respondent testified for herself and presented Rodulfo Lopez as witness. Evidence for the respondent showed that she met the petitioner on December 1, 1992 at the Philippine Commercial and Industrial Bank, Maasin, Southern Leyte branch where she had been hired as a casual employee, while the petitioner worked as accounting supervisor. 7 The petitioner started courting the respondent in the third week of December 1992 and they became sweethearts in the last week of January 1993.8 The petitioner gave the respondent greeting cards on special occasions, such as on Valentines Day and her birthday; she reciprocated his love and took care of him when he was ill.9 Sometime in September 1993, the petitioner started intimate sexual relations with the respondent in the formers rented room in the boarding house managed by Rodulfo, the respondents uncle, on Tomas Oppus St., Agbao, Maasin, Southern Leyte.10 The petitioner rented the room from March 1, 1993 to August 30, 1994.11 The sexual encounters occurred twice a month and became more frequent in June 1994; eventually, on August 8, 1994, the respondent found out that she was pregnant.12 When told of the pregnancy, the petitioner was happy and made plans to marry the respondent.13 They in fact applied for a marriage license.14 The petitioner even inquired about the costs of a wedding reception and the bridal gown.15 Subsequently, however, the petitioner backed out of the wedding plans.16 The respondent responded by filing a complaint with the Municipal Trial Court of Maasin, Southern Leyte for damages against the petitioner for breach of promise to marry. 17 Later, however, the petitioner and the respondent amicably settled the case. 18 The respondent gave birth to their son Gliffze on March 9, 1995. 19 When the petitioner did not show up and failed to provide support to Gliffze, the respondent sent him a letter on July 24, 1995 demanding recognition of and support for their child.20 When the petitioner did not answer the demand, the respondent filed her complaint for compulsory recognition and support pendente lite.21 The petitioner took the witness stand and testified for himself. He denied the imputed paternity,22 claiming that he first had sexual contact with the respondent in the first week of August 1994 and she could not have been pregnant for twelve (12) weeks (or three (3) months) when he was informed of the pregnancy on September 15, 1994.23 During the pendency of the case, the RTC, on the respondents motion, 24 granted a P2,000.00 monthly child support, retroactive from March 1995.25 THE RTC RULING In its June 25, 2002 decision, the RTC dismissed the complaint for insufficiency of evidence proving Gliffzes filiation. It found the respondents testimony inconsistent on the question of when she had her first sexual contact with the petitioner, i.e., "September 1993" in her direct testimony while "last week of January 1993" during her cross-testimony, and her reason for engaging in sexual contact even after she had refused the petitioners initial marriage proposal. It ordered the respondent to return the amount of support pendente lite erroneously awarded, and to pay P10,000.00 as attorneys fees.26 The respondent appealed the RTC ruling to the CA.27 THE CA RULING

In its March 5, 2004 decision, the CA departed from the RTC's appreciation of the respondents testimony, concluding that the latter merely made an honest mistake in her understanding of the questions of the petitioners counsel. It noted that the petit ioner and the respondent had sexual relationship even before August 1994; that the respondent had only one boyfriend, the petitioner, from January 1993 to August 1994; and that the petitioners allegation that the respondent had previous relationships with other men remained unsubstantiated. The CA consequently set aside the RTC decision and ordered the petitioner to recognize his minor son Gliffze. It also reinstated the RTC order granting a P2,000.00 monthly child support.28 When the CA denied29 the petitioners motion for reconsideration,30 the petitioner filed the present petition for review on certiorari. THE PETITION The petitioner argues that the CA committed a reversible error in rejecting the RTCs appreciation of the respondents testimony, and that the evidence on record is insufficient to prove paternity. THE CASE FOR THE RESPONDENT The respondent submits that the CA correctly explained that the inconsistency in the respondents testimony was due to an incorrect appreciation of the questions asked, and that the record is replete with evidence proving that the petitioner was her lover and that they had several intimate sexual encounters during their relationship, resulting in her pregnancy and Gliffzes birth on March 9, 1995. THE ISSUE The sole issue before us is whether the CA committed a reversible error when it set aside the RTCs findings and ordered the petitioner to recognize and provide legal support to his minor son Gliffze. OUR RULING We do not find any reversible error in the CAs ruling. We have recognized that "[f]iliation proceedings are usually filed not just to adjudicate paternity but also to secure a legal right associated with paternity, such as citizenship, support (as in this case) or inheritance. [In paternity cases, the burden of proof] is on the person who alleges that the putative father is the biological father of the child."31 One can prove filiation, either legitimate or illegitimate, through the record of birth appearing in the civil register or a final judgment, an admission of filiation in a public document or a private handwritten instrument and signed by the parent concerned, or the open and continuous possession of the status of a legitimate or illegitimate child, or any other means allowed by the Rules of Court and special laws.32 We have held that such other proof of one's filiation may be a "baptismal certificate, a judicial admission, a family bible in which [his] name has been entered, common reputation respecting [his] pedigree, admission by silence, the [testimonies] of witnesses, and other kinds of proof [admissible] under Rule 130 of the Rules of Court." 33

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In Herrera v. Alba,34 we stressed that there are four significant procedural aspects of a traditional paternity action that parties have to face: a prima facie case, affirmative defenses, presumption of legitimacy, and physical resemblance between the putative father and the child.35 We explained that a prima facie case exists if a woman declares supported by corroborative proof that she had sexual relations with the putative father; at this point, the burden of evidence shifts to the putative father.36 We explained further that the two affirmative defenses available to the putative father are: (1) incapability of sexual relations with the mother due to either physical absence or impotency, or (2) that the mother had sexual relations with other men at the time of conception. 37 In this case, the respondent established a prima facie case that the petitioner is the putative father of Gliffze through testimony that she had been sexually involved only with one man, the petitioner, at the time of her conception.38 Rodulfo corroborated her testimony that the petitioner and the respondent had intimate relationship.391wphi1 On the other hand, the petitioner did not deny that he had sexual encounters with the respondent, only that it occurred on a much later date than the respondent asserted, such that it was physically impossible for the respondent to have been three (3) months pregnant already in September 1994 when he was informed of the pregnancy.40 However, the petitioner failed to substantiate his allegations of infidelity and insinuations of promiscuity. His allegations, therefore, cannot be given credence for lack of evidentiary support.1wphi1 The petitioners denial cannot overcome the respondents clear and categorical assertions. The petitioner, as the RTC did, made much of the variance between the respondents direct testimony regarding their first sexual contact as "sometime in September 1993" and her crosstestimony when she stated that their first sexual contact was "last week of January 1993," as follows: ATTY. GO CINCO: When did the defendant, according to you, start courting you?

statements, the respondent explained that that portion of the transcript of stenographic notes was incorrect and she had brought it to the attention of Atty. Josefino Go Cinco (her former counsel) but the latter took no action on the matter.42 Jurisprudence teaches that in assessing the credibility of a witness, his testimony must be considered in its entirety instead of in truncated parts. The technique in deciphering a testimony is not to consider only its isolated parts and to anchor a conclusion based on these parts. "In ascertaining the facts established by a witness, everything stated by him on direct, cross and redirect examinations must be calibrated and considered."43 Evidently, the totality of the respondent's testimony positively and convincingly shows that no real inconsistency exists. The respondent has consistently asserted that she started intimate sexual relations with the petitioner sometime in September 1993.44 Since filiation is beyond question, support follows as a matter of obligation; a parent is obliged to support his child, whether legitimate or illegitimate.45 Support consists of everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family.46Thus, the amount of support is variable and, for this reason, no final judgment on the amount of support is made as the amount shall be in proportion to the resources or means of the giver and the necessities of the recipient. 47It may be reduced or increased proportionately according to the reduction or increase of the necessities of the recipient and the resources or means of the person obliged to support. 48 In this case, we sustain the award of P2,000.00 monthly child support, without prejudice to the filing of the proper motion in the RTC for the determination of any support in arrears, considering the needs of the child, Gliffze, during the pendency of this case. WHEREFORE, we hereby DENY the petition for lack of merit. The March 5, 2004 decision and the July 27, 2004 resolution of the Court of Appeals in CA GR CV No. 76326 are hereby AFFIRMED. Costs against the petitioner. SO ORDERED.

A Q A Q A

Third week of December 1992. FIRST DIVISION And you accepted him? G.R. No. 179059 Last week of January 1993. And by October you already had your sexual intercourse? Last week of January 1993. VICTOR RONDINA, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent. DECISION DEL CASTILLO, J.: Sadly, this is yet another case of a lass pitilessly stripped of her innocence. In this Petition for Review on Certiorari, petitioner Victor Rondina (Victor) assails the Decision1 dated July 24, 2007 of the Court of Appeals (CA) in CA-G.R. CR-HC No. 00185 which June 13, 2012

COURT: What do you mean by accepting? A I accepted his offer of love.

41

We find that the contradictions are for the most part more apparent than real, having resulted from the failure of the respondent to comprehend the question posed, but this misunderstanding was later corrected and satisfactorily explained. Indeed, when confronted for her contradictory

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affirmed with modification the Judgment2 of the Regional Trial Court (RTC), Ormoc City, Branch 35 in Criminal Case No. 5548-0 finding him guilty beyond reasonable doubt of the crime of rape. G1 P0 LMP July, 1998 (1st week) Factual Antecedents EDC April, 1999 (2nd week) On March 29, 1999, the City Prosecution Office of Ormoc City filed with the RTC an Information3 charging Victor as follows: That on or about the 15th day of July 1998, at around 4:00 oclock in the afternoon, at "DDD", [Ormoc City], and within the jurisdiction of this Honorable Court, the above-named accused: VICTOR RONDINA, being then armed with a knife and by means of force, threat and intimidation, did then and there wilfully, unlawfully and feloniously have carnal knowledge [of] the complainant herein, "AAA"4 - a sixteen (16) year old lass, against her will.5 On arraignment, Victor pleaded "not guilty" to the crime charged. 6 Pre-trial and trial thereafter ensued. Version of the Prosecution

OB-GYNE NOTES

Abdomen soft, uterus palpable with fundal height of 23 cms. Fetal heart tone not appreciated Quickening noted December, 1998 Visual Vulva Examination pubic hair - present no inflammations - noted. no fresh lacerations. hymen with healed lacerations at the 3 oclock,

In 1998, "AAA" was a young girl of 16 who was in second year high school. The youngest and the only girl among a brood of four, she lived with her parents and siblings in a rented house located in "DDD," Ormoc City. On July 15, 1998, "AAA," upon arriving home from school at around 4:00 p.m., immediately proceeded to the toilet to defecate. The said toilet, constructed of hollow blocks with G.I.-sheet roofing, had only a tie-wire as lock. It was located outside "AAAs" house and was being used as a communal toilet by the occupants of nearby houses. Once inside, "AAA" immediately took off her panty and relieved herself, forgetting to lock the door.7 After washing her anus, "AAA" was surprised when Victor, a neighbor, suddenly entered the toilet with only a towel covering himself from the waist down. Victor immediately removed the towel from his waist as well as his brief. He then poked a knife on "AAAs" neck, covered her mouth and threatened her by saying "[d]ont ever tell anybody otherwise I will kill your parents, your siblings including yourself."8 Because her mouth was covered, "AAA" was not able to shout. 9 Victor ordered "AAA" to stand against the wall with her hands on both sides 10 and forcefully inserted his penis into "AAAs" vagina.11 "AAA" felt pain.12 After a while, she felt a liquid-like substance discharged from Victors penis.13When Victor had already satisfied his bestial desire, he again wrapped the towel around his waist14 and before getting out of the toilet uttered "do not tell your mother or else I will kill you."15 "AAA" did not immediately tell anyone of her misfortune and just kept on crying. However, it came to the point where she could no longer keep silent so that a few months after the incident, "AAA" finally told her mother "BBB" that Victor raped her.16 When "BBB" had "AAA" examined by physicians, it was discovered that aside from having healed hymenal lacerations, "AAA" was more or less six months pregnant, viz:

5 oclock and 9 o clock positions Vaginal opening admits two examining fingers freely Pelvic Ultrasound Result: Single live intrauterine pregnancy with mean AOG of 24 weeks and 2 days by BPD and FL.17 Hence, Victor was charged with the crime of rape. During the pendency of the proceedings and after about nine months from the date of the alleged incident, "AAA" gave birth to a baby girl, "CCC," on May 1, 1999. Version of the Defense Victor interposed the defense of denial and alibi. He averred that he could not have raped "AAA" at 4:00 oclock in the afternoon of July 15, 1998 because during that time, he was in a cockpit in Brgy. Macabug, Ormoc City. He went there at 2:00 p.m. with Alex Oliveros (Alex) and Ruben Bertulfo.18 He could still very well remember the cockfight on that particular day as same was held because of the approaching fiesta of Macabug on July 25 and also because he won. He even gave part of his winnings to Alex for the latter to spend on his birthday. 19 It was already around 5:30 p.m. when Victor and his companions left Macabug. From Macabug, he and Alex headed to the public market of Ormoc City and bought viand.20 After that, the two of them went to their respective homes. Victor arrived home at around 6:00 p.m.

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Ruling of the Regional Trial Court With two conflicting versions before it, the RTC declared the issue to be one of credibility, that is, whether "AAAs" claim that she was raped by Victor vis--vis the latters denial and alibi, is credible, convincing and satisfactory as to hold the latter guilty beyond reasonable doubt of the crime of rape.21

WHEREFORE, premises considered, except for the MODIFICATION in the award of civil indemnity as aforementioned, the trial courts Decision dated June 7, 2000 is hereby AFFIRMED as to all other respects. SO ORDERED.32

Hence, Victor comes to this Court to seek a reversal of his conviction. In resolving the case, the court held that the prosecution was able to duly establish all the elements of rape. It gave much credence to "AAAs" testimony since it observed that the latter, Assignment of Errors despite some inconsistencies in her testimony during trial, narrated her travails at the hands of Victor in an earnest, spontaneous and straightforward manner. She was able to give all the core elements of rape in her narration. As to the inconsistencies, the RTC chose to brush them aside as Victor ascribes upon the lower courts the following errors: it found them to be minor inconsistencies which only tend to bolster rather than weaken the rape victims credibility as they show that her testimony was not contrived. 22 The RTC then declared 1. The Honorable Court of Appeals and the Honorable Regional Trial Court committed itself convinced that the prosecution, by its own evidence, was able to prove the guilt of the serious error of law and grave abuse of discretion when it did not apply the ruling of this accused beyond reasonable doubt. Hence, the dispositive portion of its Judgment 23 dated June 7, Honorable Supreme Court in PEOPLE OF THE PHILIPPINES vs. CRISPIN T. RUALES 2000: [G.R. No. 149810, August 28, 2003] to the effect that due to the nature of the crime of rape where only two persons are usually involved, the testimony of the complainant WHEREFORE, after considering all the foregoing, the Court finds the accused Victor Rondina must be scrutinized with extreme caution and that the evidence for the prosecution must GUILTY beyond reasonable doubt of the crime of Rape as charged in the information and, stand or fall on its own merits and cannot be allowed to draw strength from the accordingly, without any finding as to mitigating and aggravating circumstances, hereby sentences weakness of the evidence for the defense. him to suffer imprisonment of Forty (40) years reclusion perpetua, to pay the offended party the sum of P75,000.00 as indemnity, P50,000.00 as moral damages, and costs; also to acknowledge 2. The Honorable Court of Appeals and the Honorable Regional Trial Court committed the offspring [CCC] and to give her support. serious error of law and grave abuse of discretion when it did not apply the ruling of this Honorable Supreme Court in PEOPLE OF THE PHILIPPINES vs. APAT [114 SCRA xxxx 620] which ruling is squarely applicable to the facts in the present case; SO ORDERED.24 Victor filed a Notice of Appeal25 which was granted by the RTC in its Order26 of June 28, 2000. After the elevation of the records of the case, this Court accepted the appeal on February 21, 2001.27 Conformably, however, with the Courts ruling in People v. Mateo,28 the case was subsequently transferred to the CA for appropriate action and disposition. 29 Ruling of the Court of Appeals In his brief,30 Victor averred that the RTC should not have given full faith and credence to "AAAs" testimony for the following reasons: (1) "AAA" reported the crime only after five months from its alleged occurrence; (2) the rape could not have been committed in the said toilet because of the presence of the occupants of nearby houses; (3) it was unimaginable and improbable to commit the rape in the manner and position narrated by "AAA"; (4) "AAAs" testimony was full of inconsistencies; and (5) "AAA" was impelled by other motive in filing the charge against him. The CA, however, found no compelling reason to depart from the RTCs ruling. Aside from reducing the award of civil indemnity from P75,000.00 to P50,000.00, it affirmed the trial courts judgment in all other respects in a Decision31 dated July 24, 2007, thus: 3. The Honorable Court of Appeals and the Honorable Regional Trial Court committed serious error of law and grave abuse of discretion when it declared that the petitioner x x x failed to show any improper motive on the part of the private complainant, which would have prompted the latter to file false claims against the petitioner; 4. The Honorable Court of Appeals and the Honorable Regional Trial Court committed serious error of law and grave abuse of discretion when it merely brushed aside the alibi of the petitioner not taking into account that while alibi may be considered a weak defense, such alibi could work to exculpate the petitioner as such alibi is the truth and is sufficiently corroborated; 5. The Honorable Court of Appeals and the Honorable Regional Trial Court committed serious error of law and grave abuse of discretion when it rendered and affirmed a judgment of conviction despite the failure of the prosecution to prove his guilt beyond reasonable doubt.33 Our Ruling The petition is devoid of merit. The lower courts did not err in giving full faith and credence to "AAAs" testimony.

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Victor avers that the lower courts, in resolving the case, failed to apply the Courts pronouncement in People v. Ruales,34 viz; In deciding rape cases, we have been guided by the following well-established principles: (a) an accusation of rape can be made with facility; it is difficult to prove but more difficult for the person accused, though innocent, to disprove; (b) due to the nature of the crime of rape where only two persons are usually involved, the testimony of the complainant must be scrutinized with extreme caution; and (c) the evidence for the prosecution must stand or fall on its own merits and cannot be allowed to draw strength from the weakness of the evidence for the defense. 35

A: Yes, sir. Q: Are you telling us that he went inside the toilet? A: Yes, sir. xxxx

Q: Where [did] this incident [take] place[,] his insertion of his penis into your vagina? The Court had consistently acknowledged that "[a]t the core of almost all rape cases, the credibility of the victims testimony is crucial in view of the intrinsic nature of the crime where only the participants therein can testify to its occurrence."36 Hence, "the testimony of the complainant must A: Inside the toilet. be examined with extreme care for, whether the case results in conviction or in acquittal, the final outcome would almost invariably be dependent on what the victim declares and on how she has Q: What was your position when he inserted his penis [into] your female organ? stood and comported herself at the witness stand during questioning." 37 A: He made me lean against the wall. We have carefully examined the records of this case and hold that the lower courts did not commit reversible error in according superior weight to "AAAs" testimony. It is worthy to note that before "AAA" was put on the witness stand, the RTC directed the Department of Social Welfare and Development (DSWD) to cause her to be subjected to a psychological examination.38 This was due to the prosecutions claim that "AAA" was then emotionally unstable. In compliance therewith, the DSWD submitted to the court the result of the Psychiatric Evaluation and Mental Status Examination39 performed upon "AAA" indicating that she was suffering from organic brain disease which is mental retardation. She could, however, undergo trial albeit with assistance because of her sub-average general intellectual functioning.40 Notwithstanding "AAAs" mental condition, the Court notes that she was still able to recount the details of her traumatic experience in a credible, convincing and straightforward manner and therefore her testimony bears the ring of truth. She testified as follows: Q: You said that you were already inside the toilet, what did you do inside? A: I defecated. xxxx Q: In what part of your body was the knife being poked? Q: While you were inside what happened? A: In my neck. (And the witness pointed to [the] left side of her neck.) A: He inserted his penis [into] my vagina. Q: Did you see the weapon. Q: To whom are you referring the pronoun "he"? A: Yes, sir. A: Victor. Q: Will you please describe to us the length and the size of the weapon? Q: Are you referring to the accused in this case Victor Rondina? COURT INTERPRETER: Q: You mean to say that you were in the standing position? A: Yes, sir. Q: Did you not resist x x x the sexual advances of the accused. A: I resist[ed]. Q: In what manner? A: He told me, "do not kuan because [youre still young and Im old"]. Q: What do you mean by saying the word "dont"? A: What I mean is that, when I was in the toilet, I was poked with a knife and I was not able to shout because my mouth was covered.

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The witness estimated the length at about 5 inches. Q: That excludes the handle? A: It does not. Q: So that size consist[s] only of the blade? A: Yes, sir. Q: Did he say anything when he poked the knife in your neck? A: Yes, sir. Q: Would you recall what [were] the utterances made by the accused?

Q: Did you like it? A: No sir. Q: Did you feel pain? A: Yes, sir. Q: After youve noticed that he had already ejaculated, what else did he do? A: When he was about to get out, he said that "do not tell your mother or else I will kill you. 42 When asked by the trial court to demonstrate her position during the alleged sexual intercourse, "AAA" even readily made a physical illustration of the same: Q: You were in the straight standing position during the alleged sexual intercourse?

A: "Dont you ever tell anybody otherwise I will kill your parents, your siblings including yourself." xxxx Q: While his male organ was inside yours, what else did he do? A: That is what Ive told you sir, that he told me that [once] you tell anybody Ill kill your parents. xxxx Q: What did you notice from his penis if any?

41

A: Yes, your Honor. Q: [As a] preliminary to the ocular inspection, the Court would like you to make the physical illustration as to your position. This is now [the] wall of the courtroom, imagine that, that wall is the wall of the toilet. Illustrate how you were standing at the time that you were sexually molested. COURT INTERPRETER: The witness illustrate[s] to the Court by standing [with] her back leaning against the wall with hands on both sides. Q: Were you not in a squatting position? A: [Felt] different. xxxx Q: Was there anything that you [felt]? A: Yes, sir. Q: What? A: He inserted his penis [into] my vagina and there was some kind of "apple-apple" or a liquid like substance. Q: What did you do [in] that instance that his penis was inside your female organ? A: It [felt] so different for me. Victor avers that the manner in which the rape was committed, as narrated by "AAA," defies imagination, is incredible and contrary to human experience. He calls attention to "AAAs" testimony during cross examination that his left hand was covering her mouth while his right hand was poking the knife at her the entire duration of the alleged sexual intercourse. Given the circumstances, Victor implies that it was improbable for him to penetrate "AAAs" vagina in a standing position considering that his two hands, as testified to by "AAA," were not free and that "AAA" was moving to resist the penetration. Victor thus invokes the case of People v. Apat45 where the Court pronounced as follows: A: No your honor, I just position[ed] myself like this. (As the witness earlier demonstrated to the Court).43 With her intelligence level, it is hard to believe that her testimony had been rehearsed as Victor would want to put it. If such was the case, "AAAs" testimony would have eventually fallen apart. However, as shown above and except for a few minor inconsistencies and some difficulty in understanding the questions propounded to her,44"AAA" was still able to testify with definiteness on the material details of her harrowing experience at the hands of Victor.

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3. The manner by which the appellant allegedly raped Gregoria, as narrated by her, defies the imagination. It may hardly be envisioned how a man can successfully consummate the sexual act on an unwilling woman with his left hand placed over her mouth (supposedly to prevent her from shouting for help) and with his right hand x x x holding a hunting knife pointed at the womans forehead and, while so positioned, was able to manage to remove the pantie of the woman, spread her legs, unbutton his short pants, and perform the sexual intercourse. 46 Victor likewise cites the following inconsistencies in "AAAs" testimony: (1) "AAA" stated in her direct examination that on the day of the alleged rape, she came home from school at 4:00 p.m. On cross examination, however, she testified that she just stayed home the whole day; and (2) in "AAAs" Affidavit47 executed on January 29, 1999, she stated that Victor was wearing shorts when he entered the toilet and that it was the latter who took off her underwear. But later on direct examination, she claimed that she was the one who removed her underwear and that Victor was wearing a towel and a brief. Despite all these, the lower courts still chose to treat "AAAs" testimony as gospel truth instead of considering her irreconcilable contradictions as sufficient grounds to create doubt in Victors favor. We have gone over the records and observed that both on cross and re-cross examinations, "AAA" answered "yes" when asked by the defense counsel if at the time Victor inserted his penis into her vagina, he was also covering her mouth with one hand and poking a knife on her neck with the other.48 In re-direct examination, however, "AAA" testified as follows: Q: You told us earlier that you tried to keep on moving while the accused inserted his penis into your vagina if only to prevent [him] from penetrating you, is that correct? A: Yes, sir. Q: If you keep on moving, how is it that he was able to penetrate you? A: He really penetrate[d] it and he insert[ed] it. Q: Easily or forcefully? A: Forcefully.49 Upon inquiry by the Court, "AAA" answered: COURT to the witness Q: In what manner did he [insert] his penis? Did he [use] his hands or what? A: Yes, your Honor. Q: Which hand did he [use] if you can recall?

A: Left. Q: Does it mean that his left hand was holding his penis in guiding it towards the inside of your vagina? A: Yes, your Honor.50 From AAAs testimony, it can be inferred that the covering of the mouth, the poking of the knife and the insertion of Victors penis into her vagina were all happening at almost the same time. Hence, it is not difficult to understand why "AAA" answered "yes" when asked by the defense counsel if Victor was covering her mouth and poking a knife at her neck when he inserted his penis into her vagina. Moreover, "[r]ape is a painful experience which is oftentimes not remembered in detail. For such an offense is not analogous to a persons achievement or accomplishment as to be worth recalling or reliving; rather, it is something which causes deep psychological wounds and casts a stigma upon the victim, scarring her psyche for life and which her conscious and subconscious mind would opt to forget. Thus, a rape victim cannot be expected to mechanically keep and then give an accurate account of the traumatic and horrifying experience she had undergone."51 In this case, "AAA" was just 16 years old when she was cruelly abused by Victor. She was also later found possessed of low level intelligence. A fortiori, we must "accord to her greater understanding, consideration, and sensitivity as she relives, through her testimony, her harrowing [experience] at [Victors] hands."52 This also goes true with respect to the inconsistencies pointed out by Victor, which the Court finds too flimsy and trivial to merit serious consideration.53To reiterate, it is not unnatural to find minor discrepancies in the testimony of a rape victim as she cannot be expected to remember every minute detail of her ordeal. 54 Furthermore, "AAAs" testimony is corroborated by the doctors findings that she was pregnant and that her hymen has healed lacerations at 3 oclock, 5 oclock and 9 oclock positions. Dr. Ma. Esperanza S. Agudo testified that these lacerations could have been caused by sexual intercourse.55 "Where a rape victims testimony is corroborated by the physical findings of penetration, there is sufficient basis for concluding that sexual intercourse did take place." 56 Thus, there being no compelling reason to deviate from the lower courts appreciation of "AAAs" testimony, the Court gives deference to the well-settled rule "that the assessment of the credibility of witnesses and their testimonies is best undertaken by a trial court, whose findings are binding and conclusive on appellate courts. Matters affecting credibility are best left to the trial court because of its unique opportunity to observe the elusive and incommunicable evidence of that witness deportment on the stand while testifying, an opportunity denied to the appellate courts which usually rely on the cold pages of the silent records of the case." 57 Victors imputation of ill motive on the part of "AAA" and her family deserves scant consideration. Victor contends that "AAA" and her family harbored a grudge against him. He claims that "AAAs" family, who used to rent the house owned by the aunt of Victors wife, was made to vacate the same so that his family could occupy it instead. And as the pleas of "AAAs" family to continue occupying the house were ignored, charges were filed against him. The Court, however, is unconvinced.

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"Motives such as family feuds, resentment, hatred or revenge have never swayed this Court from giving full credence to the testimony of a rape victim. Also, ill motives become inconsequential if there is an affirmative and credible declaration from the rape victim, which clearly establishes the liability of the accused. In the present case, "AAA" categorically identified [Victor] as the one who defiled her. Her account of the incident, as found by the RTC, the Court of Appeals, and this Court, was sincere and truthful. Hence, petitioners x x x flimsy allegation of ill motive is immaterial." 58 Besides, it is difficult to believe that "AAAs" family would stoop so low as to subject her to physical hardship and disgrace that usually accompany the prosecution of rape just to relieve hurt feelings. Indeed, it is highly inconceivable that any family would willfully and deliberately corrupt the innocent mind of its minor member and put into her lips the lewd description of a carnal act just to satisfy a personal grudge or anger against the accused.59 Victors alibi cannot prevail over "AAAs" positive identification of him as her rapist. Victor contends that the lower courts erred in brushing aside his defense of alibi on the sole ground that it is inherently weak. He avers that proving that he was not at the place of the alleged incident when it happened is the most plausible defense against the charges hurled upon him. Besides, his alibi that he was in Brgy. Macabug, Ormoc City at the time of the alleged rape is corroborated by the testimony of Alex, who was with him during that time. "In order for the defense of alibi to prosper, two requisites must concur: first, the appellant was at a different place at the time the crime was committed, and second, it was physically impossible for him to be at the crime scene at the time of its commission."60 In this case, the second requisite is not met. Victor himself testified that the distance between Brgy. Macabug and the place where the rape occurred is just three to four kilometers and that the same can be traversed by land transportation in just a few minutes.61 Hence, it was not physically impossible for him to be at the crime scene at the time of the commission of the crime. Also, even if Victors alibi is corroborated by Alex, said defense is still unworthy of belief. Alex admitted that Victor was his employer62 and that he was testifying for Victor as he relied on him for livelihood. 63 "[I]t has been held that alibi becomes more unworthy of merit where it is established mainly by the accused himself and his or her relatives, friends, and comrades-in-arms and not by credible persons."64 Moreover and most importantly, "denial and alibi are practically worthless against the positive identification made by the prosecution witnesses, especially by the rape victim."65http://www.lawphil.net/judjuris/juri2010/jan2010/gr_188561_2010.html - fnt15 Victors weak alibi cannot thus overcome "AAAs" positive identification of him as her rapist. The lower courts did not err in convicting Victor of the crime of rape. All told, we hold that neither did the RTC err in finding Victor guilty beyond reasonable doubt of the crime of rape nor did the CA in affirming said conviction. As aptly declared by the appellate court, the prosecution has sufficiently established that Victor had carnal knowledge of "AAA" against her will and consent. We subscribe to the same. Damages awarded The CA was correct in reducing the award of civil indemnity from P75,000.00 to P50,000.00. "In cases of simple rape as in this case, civil indemnity of P50,000.00 is automatically awarded without need of pleading or proof."66

However, we note that the both the RTC and the CA failed to make an award for exemplary damages. Under Article 2229 of the Civil Code, exemplary damages are imposed by way of example or correction for the public good. "Exemplary damages are intended to serve as deterrent to serious wrongdoings, as a vindication of undue sufferings and wanton invasion of the rights of an injured, or as punishment for those guilty of outrageous conduct. Being corrective in nature, exemplary damages can be awarded, not only in the presence of an aggravating circumstance, but also where the circumstances of the case show the highly reprehensible or outrageous conduct of the offender."67 Here, Victor raped a minor, "AAA," with the use of a knife, threatened to kill her and her family if she tells them of her ordeal, and even got her pregnant. Victor should therefore pay AAA exemplary damages in the amount of P30,000.00 in line with existing jurisprudence.68 Also, interest at the rate of 6% per annum is imposed on all damages awarded from the date of finality of this judgment until fully paid.69 Support of the offspring "CCC" The RTC ordered Victor to acknowledge "AAAs" offspring "CCC" and give her support. "Article 345 of the Revised Penal Code provides for three different kinds of civil liability that may be imposed on the offender: a) indemnification, b) acknowledgement of the offspring, unless the law should prevent him from so doing, and c) in every case to support the offspring. With the passage of the Family Code, the classification of acknowledged natural children and natural children by legal fiction was eliminated and they now fall under the specie of illegitimate children. Since parental authority is vested by Article 176 of the Family Code upon the mother and considering that an offender sentenced to reclusion perpetua automatically loses the power to exercise parental authority over his children, no further positive act is required of the parent as the law itself provides for the childs status. Hence, [Victor] should only be ordered to indemnify and support the victims child."70 "The amount [and terms] of support shall be determined by the trial court after due notice and hearing in accordance with Article 20171 of the Family Code."72 WHEREFORE, the Decision dated July 24, 2007 of the Court of Appeals in CA-G.R. CR-HC No. 00185 is AFFIRMED with MODIFICATIONS as follows: 1) Petitioner Victor Rondina is ordered to pay "AAA" P30,000.00 as exemplary damages. 2) Interest at the rate of 6% per annum is imposed on all the damages awarded in this case from the date of the finality of this judgment until fully paid. 3) Petitioner Victor Rondina is further ordered to give support to "AAAs" offspring, "CCC," in such amount and under such terms to be determined by the Regional Trial Court of Ormoc City in a proper proceeding with support arrears to be reckoned from the finality of this Decision. SO ORDERED. SECOND DIVISION G.R. No. 172471 November 12, 2012

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ANTONIO PERLA, Petitioner, vs. MIRASOL BARING and RANDY PERLA, Respondents. DECISION DEL CASTILLO, J.: "An order for x x x support x x x must be issued only if paternity or filiation is established by clear and convincing evidence."1 Assailed in this Petition for Review on Certiorari2 is the March 31, 2005 Decision3 of the Court of Appeals (CA) in CA-G.R. CV No. 79312 which dismissed petitioner Antonio Perlas (Antonio) appeal from the February 26, 2003 Decision4 of the Regional Trial Court (RTC) of Antipolo City, Branch 71 in Civil Case No. 96-3952, ordering him to give monthly support to respondent Randy Perla (Randy). Likewise assailed is the CAs May 5, 2006 Resolution5denying the motion for reconsideration thereto. Factual Antecedents Respondent Mirasol Baring (Mirasol) and her then minor son, Randy (collectively respondents), filed before the RTC a Complaint6 for support against Antonio. They alleged in said Complaint that Mirasol and Antonio lived together as common-law spouses for two years. As a result of said cohabitation, Randy was born on November 11, 1983. However, when Antonio landed a job as seaman, he abandoned them and failed to give any support to his son. Respondents thus prayed that Antonio be ordered to support Randy. In his Answer with Counterclaim,7 Antonio, who is now married and has a family of his own, denied having fathered Randy. Although he admitted to having known Mirasol, he averred that she never became his common-law wife nor was she treated as such. And since Mirasol had been intimidating and pestering him as early as 1992 with various suits by insisting that Randy is his son, Antonio sought moral and exemplary damages by way of counterclaim from respondents. During trial, Mirasol testified that from 1981 to 1983, she lived in Upper Bicutan, Taguig where Antonio was a neighbor.8 In the first week of January 1981, Antonio courted her9 and eventually became her first boyfriend.10Antonio would then visit her everyday until 1982.11 Upon clarificatory question by the court whether she and Antonio eventually lived together as husband and wife, Mirasol answered that they were just sweethearts.12 When Mirasol became pregnant in 1983, Antonio assured her that he would support her.13 Eventually, however, Antonio started to evade her.14 Mirasol last saw Antonio in 1983 but could not remember the particular month.15 On November 11, 1983, Mirasol gave birth to Randy.16 She presented Randys Certificate of Live Birth17 and Baptismal Certificate18 indicating her and Antonio as parents of the child. Mirasol testified that she and Antonio supplied the information in the said certificates.19 Antonio supplied his name and birthplace after Erlinda Balmori (Erlinda), the "hilot" who assisted in Mirasols delivery of Randy, went to his house to solicit the said information. 20Mirasol also claimed that it

was Erlinda who supplied the date and place of marriage of the parents so that the latter can file the birth certificate.21 Mirasol likewise confirmed that she is the same "Mirasol Perla" who signed as the informant therein.22 Next to take the witness stand was Randy who at that time was just 15 years old. 23 Randy claimed that he knew Antonio to be the husband of her mother and as his father. 24 He recounted having met him for the first time in 1994 in the house of his Aunt Lelita, Antonios sister, where he was vacationing.25 During their encounter, Randy called Antonio "Papa" and kissed his hand while the latter hugged him.26 When Randy asked him for support, Antonio promised that he would support him.27 Randy further testified that during his one-week stay in his Aunt Lelitas place, the latter treated him as member of the family.28 For her part, Aurora Ducay testified that she knew both Mirasol and Antonio as they were neighbors in Upper Bicutan, Taguig. Presently, Antonio is still her neighbor in the said place.29 According to her, she knew of Mirasols and Antonios relationship because aside from seeing Antonio frequenting the house of Mirasol, she asked Antonio about it. 30 She further narrated that the two have a son named Randy31 and that Antonios mother even tried to get the child from Mirasol.32 Testifying as an adverse witness for the respondents, Antonio admitted having sexual intercourse with Mirasol in February and August33 of 1981.34 When shown with Randys Certificate of Live Birth and asked whether he had a hand in the preparation of the same, Antonio answered in the negative.35 Testifying for himself, Antonio denied having courted Mirasol on January 5, 1981 because during that time, he was studying in Iloilo City. He graduated from the Iloilo Maritime Academy in March of 198136 as shown by his diploma.37 It was only in May 1981 or after his graduation that he came to Manila. Further, he denied having any relationship with Mirasol.38 He claimed that he had sexual intercourse with Mirasol only once which happened in the month of September or October of 1981.39 Antonio came to know that he was being imputed as the father of Randy only when Mirasol charged him with abandonment of minor in 1994, which was also the first time he saw Randy.40 Prior to that, neither Mirasol nor her sister, Norma, whom he met a few times told him about the child.41 Anent Randys Certificate of Live Birth, Antonio testified as to several inaccuracies in the entries thereon. According to him, his middle initial is "E" and not "A" as appearing in the said certificate of live birth.42 Also, he is not a protestant and a laborer as indicated in said certificate. 43 Antonio likewise alleged that Mirasol only made up the entries with respect to their marriage on October 28, 1981.44 Daisy Balmori Rodriguez (Daisy), for her part, testified that she came to know Mirasol through her mother Erlinda who was the "hilot" when Mirasol gave birth to Randy. 45 She narrated that her mother asked Mirasol the details to be entered in the childs Certificate of Live Birth such as the names of the parents, date and place of marriage, and the intended name of the child. 46 Her mother also told her that Mirasols son has no acknowledged father. 47Daisy likewise claimed that Mirasol later left to her care the then infant Randy until Mirasol took him away without permission when the child was almost five years old.48

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Ruling of the Regional Trial Court After trial, the RTC rendered a Decision49 dated February 26, 2003 ordering Antonio to support Randy. The RTC ruled that Mirasol and Randy are entitled to the relief sought since Antonio himself admitted that he had sex with Mirasol. It also noted that when the 15-year old Randy testified, he categorically declared Antonio as his father. The RTC opined that Mirasol would not have gone through the trouble of exposing herself to humiliation, shame and ridicule of public trial if her allegations were untrue. Antonios counterclaim was denied due to the absence of bad faith or ill motive on the part of Mirasol and Randy. The dispositive portion of the RTC Decision reads: WHEREFORE, judgment is hereby rendered in favor of the plaintiff Randy Perla and against the defendant Antonio Perla, ordering the latter to give a reasonable monthly support of P5,000.00 to Randy Perla for his sustenance and support to be given to him from the time of the filing of this Complaint. Defendants counterclaim is DISMISSED. SO ORDERED.50 Antonio filed a Notice of Appeal51 which was given due course by the RTC.52 Ruling of the Court of Appeals In its Decision53 of March 31, 2005, the CA upheld Randys illegitimate filiation based on the certified true copies of his birth certificate and of his baptismal certificate identifying Antonio as his father. According to the appellate court, while these documents do not bear the signature of Antonio, they are proofs that Antonio is the known, imputed and identified father of Randy. The CA also affirmed the trial courts findings on the credibility of the witnesses and its appreciation of facts, as there was nothing to suggest that the RTC erred in such respects. It highlighted Antonios vacillation in his testimony regarding the number of times he had sex with Mirasol and concluded that the same is a clear badge of his lack of candor - a good reason to disregard his denials. Thus: WHEREFORE, the appeal is DISMISSED and the appealed Decision is AFFIRMED. SO ORDERED.
54

The pivotal issue to be resolved in this case is whether the lower courts correctly ordered Antonio to support Randy. Our Ruling There is merit in the petition. A re-examination of the factual findings of the RTC and the CA is proper in this case. "Generally, factual findings of trial courts, when affirmed by the CA, are binding on this Court."57 However, this rule admits of certain exceptions such as when the finding is grounded entirely on speculations, surmises or conjectures or when the judgment of the CA is based on misapprehension of facts.58 As this case falls under these exceptions, the Court is constrained to re-examine the factual findings of the lower courts. Since respondents complaint for support is anchored on Randys alleged illegitimate filiation to Antonio, the lower courts should have first made a determination of the same. Respondents Complaint for support is based on Randys alleged illegitimate filiation to Antonio. Hence, for Randy to be entitled for support, his filiation must be established with sufficient certainty. A review of the Decision of the RTC would show that it is bereft of any discussion regarding Randys filiation. Although the appellate court, for its part, cited the applicable provision on illegitimate filiation, it merely declared the certified true copies of Randys birth certificate and baptismal certificate both identifying Antonio as the father as good proofs of his filiation with Randy and nothing more. This is despite the fact that the said documents do not bear Antonios signature. "Time and again, this Court has ruled that a high standard of proof is required to establish paternity and filiation. An order for x x x support may create an unwholesome situation or may be an irritant to the family or the lives of the parties so that it must be issued only if paternity or filiation is established by clear and convincing evidence."59 Respondents failed to establish Randys illegitimate filiation to Antonio. The rules for establishing filiation are found in Articles 172 and 175 of the Family Code which provide as follows: Article 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register or a final judgment; or

Antonio filed a Motion for Reconsideration55 which was denied by the CA in its Resolution56 of May 5, 2006. Hence, this Petition for Review on Certiorari. Issue

(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned.

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In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (1) The open and continuous possession of the status of a legitimate child; or (2) Any other means allowed by the Rules of Court and special laws. xxxx Article 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as legitimate children. xxxx Respondents presented the Certificate of Live Birth of Randy identifying Antonio as the father. However, said certificate has no probative value to establish Randys filiation to Antonio since the latter had not signed the same.60 It is settled that "a certificate of live birth purportedly identifying the putative father is not competent evidence of paternity when there is no showing that the putative father had a hand in the preparation of said certificate." 61 We also cannot lend credence to Mirasols claim that Antonio supplied certain information through Erlinda. Aside from Antonios denial in having any participation in the preparation of the document as well as the absence of his signature thereon, respondents did not present Erlinda to confirm that Antonio indeed supplied certain entries in Randys birth certificate. Besides, the several unexplained discrepancies in Antonios personal circumstances as reflected in the subject birth certificate are manifestations of Antonios non-participation in its preparation. Most important, it was Mirasol who signed as informant thereon which she confirmed on the witness stand. Neither does the testimony of Randy establish his illegitimate filiation. That during their first encounter in 1994 Randy called Antonio "Papa" and kissed his hand while Antonio hugged him and promised to support him; or that his Aunt Lelita treated him as a relative and was good to him during his one-week stay in her place, cannot be considered as indications of Randys open and continuous possession of the status of an illegitimate child under the second paragraph of Article 172(1). "[T]o prove open and continuous possession of the status of an illegitimate child, there must be evidence of the manifestation of the permanent intention of the supposed father to consider the child as his, by continuous and clear manifestations of parental affection and care, which cannot be attributed to pure charity.1wphi1 Such acts must be of such a nature that they reveal not only the conviction of paternity, but also the apparent desire to have and treat the child as such in all relations in society and in life, not accidentally, but continuously." 62 Here, the single instance that Antonio allegedly hugged Randy and promised to support him cannot be considered as proof of continuous possession of the status of a child. To emphasize, "[t]he fathers conduct towards his son must be spontaneous and uninterrupted for this ground to exist." 63 Here, except for that singular occasion in which they met, there are no other acts of Antonio treating Randy as his son.64Neither can Antonios paternity be deduced from how his sister Lelita treated Randy. To this Court, Lelitas actuations could have been done due to charity or some other reasons. Anent Randys baptismal certificate, we cannot agree with the CA that the same is a good proof of Antonios paternity of Randy. Just like in a birth certificate, the lack of participation of the supposed father in the preparation of a baptismal certificate renders this document incompetent to prove paternity.65 And "while a baptismal certificate may be considered a public document, it can only serve as evidence of the administration of the sacrament on the date specified but not the veracity of the entries with respect to the childs paternity. Thus, x x x baptismal certificate s are per se

inadmissible in evidence as proof of filiation and they cannot be admitted indirectly as circumstantial evidence to prove the same."66 This Court cannot likewise agree with the RTCs conclusion that Antonio fathered Randy merely on the basis of his admission that he had sexual encounters with Mirasol. Neither does it agree with the CA that the inconsistencies in Antonios testimony with regard to the number of times he had sexual intercourse with Mirasol are good reasons to disregard his denials and uphold the respondents claims. It is well to stress that as plaintiff, Mirasol has the burden of proving her affirmative allegation that Antonio is the father of her son Randy.67 She must rely on the strength of her evidence and not on the weakness of the defense.68 As Randy was born on November 11, 1983, it was incumbent upon Mirasol to prove that she had sexual intercourse with Antonio prior to the usual period of pregnancy or nine months before the birth of Randy. This crucial period therefore is during the early part of the first quarter of 1983. However, nothing from Mirasols testimony indicates that she had sexual intercourse with Antonio during that time. She merely testified that she last met with Antonio in 1983 but could not remember the particular month.69 Plainly, this hardly means anything not only because it was not established that the said meeting took place during that crucial period but also because Mirasol never mentioned that they had sexual contact during their meeting. Antonios admission of sexual intercourse with Mirasol does not likewise by any means strengthen respondents theory that he fathered Randy. When Antonio testified as an adverse witness for the respondents, he stated that he had sexual intercourse with Mirasol in February and August of 1981. Later testifying as witness for his own behalf, he mentioned that he had a one night affair with Mirasol which happened in the month of September or October of 1981. Assuming that he indeed had sexual contact with Mirasol on the dates mentioned, still, none of these sexual congresses could have led to the conception of Randy who was born two years later in 1983. All told, it is clear that respondents failed to establish Randys illegitimate filiation to Antonio. Hence, the order for Antonio to support Randy has no basis. WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed Decision dated March 31, 2005 and Resolution dated May 5, 2006 of the Court of Appeals in CA-G.R. CV No. 79312 are REVERSED and SER ASIDE and the Decision dated February 26, 2003 of the Regional Trial Court of Antipolo City, Branch 71, in Civil Case No. 96-3952 is VACATED. A new one is entered DISMISSING the Complaint for Support filed by Mirasol Baring and Randy Perla against Antonio Perla. SO ORDERED. SECOND DIVISION G.R. No. 187521 March 14, 2012

F.F. CRUZ & CO., INC., Petitioner, vs. HR CONSTRUCTION CORP., Respondent. DECISION

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REYES, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner F.F. Cruz & Co., Inc. (FFCCI) assailing the Decision1 dated February 6, 2009 and Resolution2 dated April 13, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP No. 91860. The Antecedent Facts Sometime in 2004, FFCCI entered into a contract with the Department of Public Works and Highways (DPWH) for the construction of the Magsaysay Viaduct, known as the Lower Agusan Development Project. On August 9, 2004, FFCCI, in turn, entered into a Subcontract Agreement3 with HR Construction Corporation (HRCC) for the supply of materials, labor, equipment, tools and supervision for the construction of a portion of the said project called the East Bank Levee and Cut-Off Channel in accordance with the specifications of the main contract. The subcontract price agreed upon by the parties amounted to P31,293,532.72. Pursuant to the Subcontract Agreement, HRCC would submit to FFCCI a monthly progress billing which the latter would then pay, subject to stipulated deductions, within 30 days from receipt thereof. The parties agreed that the requests of HRCC for payment should include progress accomplishment of its completed works as approved by FFCCI. Additionally, they agreed to conduct a joint measurement of the completed works of HRCC together with the representative of DPWH and consultants to arrive at a common quantity. Thereafter, HRCC commenced the construction of the works pursuant to the Subcontract Agreement. On September 17, 2004, HRCC submitted to FFCCI its first progress billing in the amount of P2,029,081.59 covering the construction works it completed from August 16 to September 15, 2004.4 However, FFCCI asserted that the DPWH was then able to evaluate the completed works of HRCC only until July 25, 2004. Thus, FFCCI only approved the gross amount of P423,502.88 for payment. Pursuant to the Subcontract Agreement, FFCCI deducted from the said gross amount P42,350.29 for retention and P7,700.05 for expanded withholding tax leaving a net payment in the amount of P373,452.54. This amount was paid by FFCCI to HRCC on December 3, 2004.5 FFCCI and the DPWH then jointly evaluated the completed works of HRCC for the period of July 26 to September 25, 2004. FFCCI claimed that the gross amount due for the completed works during the said period wasP2,008,837.52. From the said gross amount due, FFCCI deducted therefrom P200,883.75 for retention andP36,524.07 for expanded withholding tax leaving amount of P1,771,429.45 as the approved net payment for the said period. FFCCI paid this amount on December 21, 2004.6 On October 29, 2004, HRCC submitted to FFCCI its second progress billing in the amount of P1,587,760.23 covering its completed works from September 18 to 25, 2004. 7 FFCCI did not pay the amount stated in the second progress billing, claiming that it had already paid HRCC for the completed works for the period stated therein.

On even date, HRCC submitted its third progress billing in the amount of P2,569,543.57 for its completed works from September 26 to October 25, 2004.8 FFCCI did not immediately pay the amount stated in the third progress billing, claiming that it still had to evaluate the works accomplished by HRCC. On November 25, 2004, HRCC submitted to FFCCI its fourth progress billing in the amount of P1,527,112.95 for the works it had completed from October 26 to November 25, 2004. Subsequently, FFCCI, after it had evaluated the completed works of HRCC from September 26 to November 25, 2004, approved the payment of the gross amount of P1,505,570.99 to HRCC. FFCCI deducted therefromP150,557.10 for retention and P27,374.02 for expanded withholding tax leaving a net payment of P1,327,639.87, which amount was paid to HRCC on March 11, 2005. 9 Meanwhile, HRCC sent FFCCI a letter10 dated December 13, 2004 demanding the payment of its progress billings in the total amount of P7,340,046.09, plus interests, within three days from receipt thereof. Subsequently, HRCC completely halted the construction of the subcontracted project after taking its Christmas break on December 18, 2004. On March 7, 2005, HRCC, pursuant to the arbitration clause in the Subcontract Agreement, filed with the Construction Industry Arbitration Commission (CIAC) a Complaint 11 against FFCCI praying for the payment of the following: (1) overdue obligation in the reduced amount of P4,096,656.53 as of December 15, 2004 plus legal interest; (2) P1,500,000.00 as attorneys fees; (3) P80,000.00 as acceptance fee and representation expenses; and (4) costs of litigation. In its Answer,12 FFCCI claimed that it no longer has any liability on the Subcontract Agreement as the three payments it made to HRCC, which amounted to P3,472,521.86, already represented the amount due to the latter in view of the works actually completed by HRCC as shown by the survey it conducted jointly with the DPWH. FFCCI further asserted that the delay in the payment processing was primarily attributable to HRCC inasmuch as it presented unverified work accomplishments contrary to the stipulation in the Subcontract Agreement regarding requests for payment. Likewise, FFCCI maintained that HRCC failed to comply with the condition stated under the Subcontract Agreement for the payment of the latters progress billings, i.e. joint measurement of the completed works, and, hence, it was justified in not paying the amount stated in HRCCs progress billings. On June 16, 2005, an Arbitral Tribunal was created composed of Engineer Ricardo B. San Juan, Joven B. Joaquin and Attorney Alfredo F. Tadiar, with the latter being appointed as the Chairman. In a Preliminary Conference held on July 5, 2005, the parties defined the issues to be resolved in the proceedings before the CIAC as follows: 1. What is the correct amount of [HRCCs] unpaid progress billing? 2. Did [HRCC] comply with the conditions set forth in subparagraph 4.3 of the Subcontract Agreement for the submission, evaluation/processing and release of payment of its progress billings?

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3. Did [HRCC] stop work on the project? 3.1 If so, is the work stoppage justified? 3.2 If so, what was the percentage and value of [HRCCs] work accomplishment at the time it stopped work on the project? 4. Who between the parties should bear the cost of arbitration or in what proportion should it be shared by the parties?13 Likewise, during the said Preliminary Conference, HRCC further reduced the amount of overdue obligation it claimed from FFCCI to P2,768,916.66. During the course of the proceedings before the CIAC, HRCC further reduced the said amount to P2,635,397.77 the exact difference between the total amount of HRCCs progress billings (P6,107,919.63) and FFCCIs total payments in favor of the latter (P3,472,521.86). The CIAC Decision On September 6, 2005, after due proceedings, the CIAC rendered a Decision14 in favor of HRCC, the decretal portion of which reads: WHEREFORE, judgment is hereby rendered in favor of the Claimant HR CONSTRUCTION CORPORATION and AWARD made on its monetary claim against Respondent F.F. CRUZ & CO., INC., as follows:

profit. He further admitted that it is only when DPWH approves its (Respondents) billings cover ing [HRCCs] scope of work and pays for them, that [FFCCI] will in turn pay [HRCC] for its billings on the sub-contracted works. On clarificatory questioning by the Tribunal, [FFCCI] admitted that there is no "back-to-back" provision in the sub-contract as basis for this sequential payment arrangement and, therefore, [FFCCIs] imposition thereof by withholding payment to [HRCC] until it is first paid by the project owner on the Main Contract, clearly violates said sub-contract. It [is] this unauthorized implementation of a back-to-back payment scheme that is seen to be the reason for [FFCCIs] non-payment of the third progress billings. It is accordingly the holding of this Arbitral Tribunal that [FFCCI] is not justified in withholding payment of [HRCCs] third progress billing for this scheme that [HRCC] has not agreed to in the sub-contract agreement x x x. xxx The total retention money deducted by [FFCCI] from [HRCCs] three progress billings, amounts to [P]395,945.14 x x x. The retention money is part of [HRCCs] progress billings and must, therefore, be credited to this account. The two amounts (deductions and net payments) total [P]3,868,467.00 x x x. This represents the total gross payments that should be credited and deducted from the total gross billings to arrive at what has not been paid to the [HRCC]. This results in the amount of [P]2,239,452.63 ([P]6,107,919.63 - [P]3,868,467.00) as the correct balance of [HRCCs] unpaid billings.16 Further, the CIAC ruled that FFCCI had already waived its right under the Subcontract Agreement to require a joint measurement of HRCCs completed works as a condition precedent to the payment of the latters progress billings. Hence: [FFCCI] admits that in all three instances where it paid [HRCC] for its progress billings, it never required compliance with the aforequoted contractual provision of a prior joint quantification. Such repeated omission may reasonably be construed as a waiver by [FFCCI] of its contractual right to require compliance of said condition and it is now too late in the day to so impose it. Article 6 of the Civil Code expressly provides that "rights may be waived unless the waiver is contrary to law, public order, public policy, morals or good customs". The tribunal cannot see any such violation in this case. xxx [FFCCIs] omission to enforce the contractually required condition of payment, has led [HRCC] to believe it to be true that indeed [FFCCI] has waived the condition of joint quantification and, therefore, [FFCCI] may not be permitted to falsify such resulting position. 17 Likewise, the CIAC held that FFCCIs non-payment of the progress billings submitted by HRCC gave the latter the right to rescind the Subcontract Agreement and, accordingly, HRCCs work stoppage was justified. It further opined that, in effect, FFCCI had ratified the right of HRCC to stop the construction works as it did not file any counterclaim against HRCC for liquidated damages arising therefrom.

[P]2,239,452.63 101,161.57 [P]2,340,614.20

as the balance of its unpaid billings and as reimbursement of the arbitration costs. Total due the Claimant

Interest on the foregoing amount [P]2,239,452.63 shall be paid at the rate of 6% per annum from the date of this Decision. After finality of this Decision, interest at the rate of 12% per annum shall be paid thereon until full payment of the awarded amount shall have been made x x x. SO ORDERED.15 The CIAC held that the payment method adopted by FFCCI is actually what is known as the "back-to-back payment scheme" which was not agreed upon under the Subcontract Agreement. As such, the CIAC ruled that FFCCI could not impose upon HRCC its valuation of the works completed by the latter. The CIAC gave credence to HRCCs valuation of its completed works as stated in its progress billings. Thus: During the trial, [FFCCIs] Aganon admitted that [HRCCs] accomplishments are included in its own billings to the DPWH together with a substantial mark-up to cover overhead costs and

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FFCCI then filed a petition for review with CA assailing the foregoing disposition by the CIAC. The CA Decision On February 6, 2009, the CA rendered the herein assailed Decision denying the petition for review filed by FFCCI. The CA agreed with the CIAC that FFCCI had waived its right under the Subcontract Agreement to require a joint quantification of HRCCs completed works. The CA further held that the amount due to HRCC as claimed by FFCCI could not be given credence since the same was based on a survey of the completed works conducted without the participation of HRCC. Likewise, being the main contractor, it ruled that it was the responsibility of FFCCI to include HRCC in the joint measurement of the completed works. Furthermore, the CA held that HRCC was justified in stopping its construction works on the project as the failure of FFCCI to pay its progress billings gave the former the right to rescind the Subcontract Agreement. FFCCI sought a reconsideration19 of the said February 6, 2009 Decision but it was denied by the CA in its Resolution20 dated April 13, 2009. Issues In the instant petition, FFCCI submits the following issues for this Courts resolution: [I.] x x x First, [d]oes the act of [FFCCI] in conducting a verification survey of [HRCCs] billings in the latters presence amount to a waiver of the right of [FFCCI] to verify and approve said billings? What, if any, is the legal significance of said act? [II.] x x x Second, [d]oes the payment of [FFCCI] to [HRCC] based on the results of the above mentioned verification survey result in the former being obliged to accept whatever accomplishment was reported by the latter? [III.] x x x Third, [d]oes the mere comparison of the payments made by [FFCCI] with the contested progress billings of [HRCC] amount to an adjudication of the controversy between the parties? [IV.]
18

x x x Fifth, [d]id the [CA] disregard or overlook significant and material facts which would affect the result of the litigation?21 In sum, the crucial issues for this Courts resolution are: first, what is the effect of FFCCIs non compliance with the stipulation in the Subcontract Agreement requiring a joint quantification of the works completed by HRCC on the payment of the progress billings submitted by the latter; and second, whether there was a valid rescission of the Subcontract Agreement by HRCC. The Courts Ruling The petition is not meritorious. Procedural Issue: Finality and Conclusiveness of the CIACs Factual Findings Before we delve into the substantial issues raised by FFCCI, we shall first address the procedural issue raised by HRCC. According to HRCC, the instant petition merely assails the factual findings of the CIAC as affirmed by the CA and, accordingly, not proper subjects of an appeal under Rule 45 of the Rules of Court. It likewise pointed out that factual findings of the CIAC, when affirmed by the CA, are final and conclusive upon this Court. Generally, the arbitral award of CIAC is final and may not be appealed except on questions of law. Executive Order (E.O.) No. 100822 vests upon the CIAC original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of CIAC "shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court." 23 In Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc.,24 we explained raison d etre for the rule on finality of the CIACs arbitral award in this wise: Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals.

x x x Fourth, [d]oes the failure of [FFCCI] to interpose a counterclaim against [HRCC] for liquidated Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in damages due to the latters work stoppage, amount to a ratification of such work stoppage? any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had [V.] "misapprehended the facts" and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal questions." The parties here had recourse to

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arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. x x x25 (Citation omitted) Thus, in cases assailing the arbitral award rendered by the CIAC, this Court may only pass upon questions of law. Factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal. This rule, however, admits of certain exceptions. In Spouses David v. Construction Industry and Arbitration Commission,26 we laid down the instances when this Court may pass upon the factual findings of the CIAC, thus: We reiterate the rule that factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal, except when the petitioner proves affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made. x x x27 (Citation omitted) Issues on the proper interpretation of the terms of the Subcontract Agreement involve questions of law. A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. 28 On the surface, the instant petition appears to merely raise factual questions as it mainly puts in issue the appropriate amount that is due to HRCC. However, a more thorough analysis of the issues raised by FFCCI would show that it actually asserts questions of law. FFCCI primarily seeks from this Court a determination of whether amount claimed by HRCC in its progress billing may be enforced against it in the absence of a joint measurement of the formers completed works. Otherwise stated, the main question advanced by FFCCI is this: in the absence of the joint measurement agreed upon in the Subcontract Agreement, how will the completed works of HRCC be verified and the amount due thereon be computed? The determination of the foregoing question entails an interpretation of the terms of the Subcontract Agreement vis--vis the respective rights of the parties herein. On this point, it should be stressed that where an interpretation of the true agreement between the parties is involved in an appeal, the appeal is in effect an inquiry of the law between the parties, its interpretation necessarily involves a question of law.29

Moreover, we are not called upon to examine the probative value of the evidence presented before the CIAC. Rather, what is actually sought from this Court is an interpretation of the terms of the Subcontract Agreement as it relates to the dispute between the parties. First Substantive Issue: Effect of Non-compliance with the Joint Quantification Requirement on the Progress Billings of HRCC Basically, the instant issue calls for a determination as to which of the parties respective valuation of accomplished works should be given credence. FFCCI claims that its valuation should be upheld since the same was the result of a measurement of the completed works conducted by it and the DPWH. On the other hand, HRCC maintains that its valuation should be upheld on account of FFCCIs failure to observe the joint measurement requirement in ascertaining the extent of its completed works. The terms of the Subcontract Agreement should prevail. In resolving the dispute as to the proper valuation of the works accomplished by HRCC, the primordial consideration should be the terms of the Subcontract Agreement. It is basic that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.30 In Abad v. Goldloop Properties, Inc.,31 we stressed that: A courts purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.32(Emphasis supplied and citation omitted) Article 4 of the Subcontract Agreement, in part, contained the following stipulations: ARTICLE 4 SUBCONTRACT PRICE 4.1 The total SUBCONTRACT Price shall be THIRTY ONE MILLION TWO HUNDRED NINETY THREE THOUSAND FIVE HUNDRED THIRTY TWO PESOS & 72/100 ONLY ([P]31,293,532.72) inclusive of Value Added Tax x x x. xxx 4.3 Terms of Payment FFCCI shall pay [HRCC] within thirty (30) days upon receipt of the [HRCCs] Monthly Progress Billings subject to deductions due to ten percent (10%) retention, and any other sums that may be

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due and recoverable by FFCCI from [HRCC] under this SUBCONTRACT. In all cases, however, two percent (2%) expanded withholding tax on the [HRCCs] income will be deducted from the monthly payments. Requests for the payment by the [HRCC] shall include progress accomplishment of completed works (unit of work accomplished x unit cost) as approved by [FFCCI]. Cut-off date of monthly billings shall be every 25th of the month and joint measurement shall be conducted with the DPWHs representative, Consultants, FFCCI and [HRCC] to arrive at a common/agreed quantity.33 (Emphasis supplied) Pursuant to the terms of payment agreed upon by the parties, FFCCI obliged itself to pay the monthly progress billings of HRCC within 30 days from receipt of the same. Additionally, the monthly progress billings of HRCC should indicate the extent of the works completed by it, the same being essential to the valuation of the amount that FFCCI would pay to HRCC. The parties further agreed that the extent of HRCCs completed works that would be indicated in the monthly progress billings should be determined through a joint measurement conducted by FFCCI and HRCC together with the representative of DPWH and the consultants. It is the responsibility of FFCCI to call for the joint measurement of HRCCs completed works. It bears stressing that the joint measurement contemplated under the Subcontract Agreement should be conducted by the parties herein together with the representative of the DPWH and the consultants. Indubitably, FFCCI, being the main contractor of DPWH, has the responsibility to request the representative of DPWH to conduct the said joint measurement. On this score, the testimony of Engineer Antonio M. Aganon, Jr., project manager of FFCCI, during the reception of evidence before the CIAC is telling, thus: MR. J. B. JOAQUIN: Engr. Aganon, earlier there was a stipulation that in all the four billings, there never was a joint quantification. PROF. A. F. TADIAR: He admitted that earlier. Pinabasa ko sa kanya. ENGR. R. B. SAN JUAN: The joint quantification was done only between them and DPWH. xxxx ENGR. AGANON:

Puwede ko po bang i-explain sandali lang po regarding lang po doon sa quantification na iyon? Basically po as main contractor of DPWH, we are the ones who [are] requesting for joint survey quantification with the owner, DPWH. Ngayon po, although wala sa papel na nag-witness and [HRCC] still the same po, nandoon din po sila during that time, kaya lang ho . . . MR. J. B. JOAQUIN: Hindi pumirma? ENGR. AGANON: Hindi sila puwede pumirma kasi ho kami po ang contractor ng DPWH hindi sila. 34 (Emphasis supplied) FFCCI had waived its right to demand for a joint measurement of HRCCs completed works under the Subcontract Agreement. The CIAC held that FFCCI, on account of its failure to demand the joint measurement of HRCCs completed works, had effectively waived its right to ask for the conduct of the same as a condition sine qua non to HRCCs submission of its monthly progress billings. We agree. In People of the Philippines v. Donato,35 this Court explained the doctrine of waiver in this wise: Waiver is defined as "a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming it." As to what rights and privileges may be waived, the authority is settled: x x x the doctrine of waiver extends to rights and privileges of any character, and, since the word waiver covers every conceivable right, it is the general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or which belongs to him or to which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any public right, and without detriment to the community at large. x x x36(Emphasis supplied and citations omitted) Here, it is undisputed that the joint measurement of HRCCs completed works contemplated by the parties in the Subcontract Agreement never materialized. Indeed, HRCC, on separate occasions,

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submitted its monthly progress billings indicating the extent of the works it had completed sans prior joint measurement. Thus:

ess Billing
37

Period Covered August 16 to September 15, 2004 September 18 to 25, 2004 September 26 to October 25, 2004 October 26 to November 25, 2004

The Court is aware that by ruling so, [FFCCI] would seem to be placed at a disadvantage because it would result in [FFCCI] having to pay exactly what [HRCC] was billing the former. If, on the other hand, the Court were to rule otherwise[,] then [HRCC] would be the one at a disadvantage because it would be made to accept payment that is less than what it was billing. Amount Circumstances considered, however, the Court deems it proper to rule in favor of [HRCC] because P2,029,081.59 of the explicit provision of the Subcontract Agreement that requires the participation of the latter in the joint measurement. If the Court were to rule otherwise, then the Court would, in effect, be P1,587,760.23 disregarding the explicit agreement of the parties in their contract. 43 P2,569,543.57 Essentially, the question that should be resolved is this: In view of FFCCIs waiver of its right to P1,527,112.95 demand a joint measurement of HRCCs completed works, is FFCCI now barred from disputing the claim of HRCC in its monthly progress billings? We rule in the affirmative. As intimated earlier, the joint measurement requirement is a mechanism essentially granting FFCCI the opportunity to verify and, if necessary, contest HRCCs valuation of its completed works prior to the submission of the latters monthly progress billings. In the final analysis, the joint measurement requirement seeks to limit the dispute between the parties with regard to the valuation of HRCCs completed works. Accordingly, any issue which FFCCI may have with regard to HRCCs valuation of the works it had completed should be raised and resolved during the said joint measurement instead of raising the same after HRCC had submitted its monthly progress billings. Thus, having relinquished its right to ask for a joint measurement of HRCCs completed works, FFCCI had necessarily waived its right to dispute HRCCs valuation of the works it had accomplished. Second Substantive Issue: Validity of HRCCs Rescission of the Subcontract Agreement Both the CA and the CIAC held that the work stoppage of HRCC was justified as the same is but an exercise of its right to rescind the Subcontract Agreement in view of FFCCIs failure to pay the formers monthly progress billings. Further, the CIAC stated that FFCCI could no longer assail the work stoppage of HRCC as it failed to file any counterclaim against HRCC pursuant to the terms of the Subcontract Agreement. For its part, FFCCI asserted that the work stoppage of HRCC was not justified and, in any case, its failure to raise a counterclaim against HRCC for liquidated damages before the CIAC does not amount to a ratification of the latters work stoppage. The determination of the validity of HRCCs work stoppage depends on a determination of the following: first, whether HRCC has the right to extrajudicially rescind the Subcontract Agreement; and second, whether FFCCI is already barred from disputing the work stoppage of HRCC. HRCC had waived its right to rescind the Subcontract Agreement.

rogress Billing dated September 17, 2004

Progress Billing dated October 29, 200438

39

rogress Billing dated October 29, 2004

rogress Billing dated November 25, 2004

FFCCI did not contest the said progress billings submitted by HRCC despite the lack of a joint measurement of the latters completed works as required under the Subcontract Agreement. Instead, FFCCI proceeded to conduct its own verification of the works actually completed by HRCC and, on separate dates, made the following payments to HRCC:

Date of Payment December 3, 2004

40

Period Covered April 2 to July 25, 2004 July 26 to September 25, 2004 September 26 to November 25, 2004

Amount P373,452.24 P1,771,429.45 P1,327,639.87

December 21, 200441 March 11, 200542

FFCCIs voluntary payment in favor of HRCC, albeit in amounts substantially different from those claimed by the latter, is a glaring indication that it had effectively waived its right to demand for the joint measurement of the completed works. FFCCIs failure to demand a joint measurement of HRCCs completed works reasonably justified the inference that it had already relinquished its right to do so. Indeed, not once did FFCCI insist on the conduct of a joint measurement to verify the extent of HRCCs completed works despite its receipt of the four monthly pr ogress billings submitted by the latter. FFCCI is already barred from contesting HRCCs valuation of the completed works having waived its right to demand the joint measurement requirement. In view of FFCCIs waiver of the joint measurement requirement, the CA, essentially echoing the CIACs disposition, found that FFCCI is obliged to pay the amount claimed by HRCC in its monthly progress billings. The CA reasoned thus: Verily, the joint measurement that [FFCCI] claims it conducted without the participation of [HRCC], to which [FFCCI] anchors its claim of full payment of its obligations to [HRCC], cannot be applied, nor imposed, on [HRCC]. In other words, [HRCC] cannot be made to accept a quantification of its works when the said quantification was made without its participation. As a consequence, [FFCCIs] claim of full payment cannot be upheld as this is a result of a quantification that was made contrary to the express provisions of the Subcontract Agreement.

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The right of rescission is statutorily recognized in reciprocal obligations. Article 1191 of the Civil Code pertinently reads: Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.

special reasons, to adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. (Emphasis supplied) Although, generally, costs are adjudged against the losing party, courts nevertheless have discretion, for special reasons, to decree otherwise.

Here, considering that the work stoppage of HRCC is not justified, it is only fitting that both parties should share in the burden of the cost of arbitration equally. HRCC had a valid reason to institute the complaint against FFCCI in view of the latters failure to pay the full amount of its monthly progress billings. However, we disagree with the CIAC and the CA that only FFCCI should The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a shoulder the arbitration costs. The arbitration costs should be shared equally by FFCCI and HRCC period. in view of the latters unjustified work stoppage. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. The rescission referred to in this article, more appropriately referred to as resolution is on the breach of faith by the defendant which is violative of the reciprocity between the parties. 44 The right to rescind, however, may be waived, expressly or impliedly.45 While the right to rescind reciprocal obligations is implied, that is, that such right need not be expressly provided in the contract, nevertheless the contracting parties may waive the same. 46 Contrary to the respective dispositions of the CIAC and the CA, we find that HRCC had no right to rescind the Subcontract Agreement in the guise of a work stoppage, the latter having waived such right. Apropos is Article 11.2 of the Subcontract Agreement, which reads: 11.2 Effects of Disputes and Continuing Obligations Notwithstanding any dispute, controversy, differences or arbitration proceedings relating directly or indirectly to this SUBCONTRACT Agreement and without prejudice to the eventual outcome thereof, [HRCC] shall at all times proceed with the prompt performance of the Works in accordance with the directives of FFCCI and this SUBCONTRACT Agreement. 47 (Emphasis supplied) Hence, in spite of the existence of dispute or controversy between the parties during the course of the Subcontract Agreement, HRCC had agreed to continue the performance of its obligations pursuant to the Subcontract Agreement. In view of the provision of the Subcontract Agreement quoted above, HRCC is deemed to have effectively waived its right to effect extrajudicial rescission of its contract with FFCCI.1wphi1 Accordingly, HRCC, in the guise of rescinding the Subcontract Agreement, was not justified in implementing a work stoppage. The costs of arbitration should be shared by the parties equally. x-----------------------x Section 1, Rule 142 of the Rules of Court provides: G.R. No. 155101 Section 1. Costs ordinarily follow results of suit. Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course, but the court shall have power, for G.R. No. 151258 WHEREFORE, in consideration of the foregoing disquisitions, the Decision dated February 6, 2009 and Resolution dated April 13, 2009 of the Court of Appeals in CA-G.R. SP No. 91860 are hereby AFFIRMED withMODIFICATION that the arbitration costs shall be shared equally by the parties herein. SO ORDERED. SECOND DIVISION February 1, 2012

ARTEMIO VILLAREAL, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent. x-----------------------x G.R. No. 154954 PEOPLE OF THE PHILIPPINES, Petitioner, vs. The HONORABLE COURT OF APPEALS, ANTONIO MARIANO ALMEDA, DALMACIO LIM, Jr., JUNEL ANTHONY AMA, ERNESTO JOSE MONTECILLO, VINCENT TECSON, ANTONIO GENERAL, SANTIAGO RANADA III, NELSON VICTORINO, JAIME MARIA FLORES II, ZOSIMO MENDOZA, MICHAEL MUSNGI, VICENTE VERDADERO, ETIENNE GUERRERO, JUDE FERNANDEZ, AMANTE PURISIMA II, EULOGIO SABBAN, PERCIVAL BRIGOLA, PAUL ANGELO SANTOS, JONAS KARL B. PEREZ, RENATO BANTUG, JR., ADEL ABAS, JOSEPH LLEDO, and RONAN DE GUZMAN, Respondents.

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FIDELITO DIZON, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent. x-----------------------x G.R. Nos. 178057 & 178080 GERARDA H. VILLA, Petitioner, vs. MANUEL LORENZO ESCALONA II, MARCUS JOEL CAPELLAN RAMOS, CRISANTO CRUZ SARUCA, Jr., and ANSELMO ADRIANO, Respondents. DECISION SERENO, J.:

The pertinent facts, as determined by the Court of Appeals (CA)8 and the trial court,9 are as follows: In February 1991, seven freshmen law students of the Ateneo de Manila University School of Law signified their intention to join the Aquila Legis Juris Fraternity (Aquila Fraternity). They were Caesar "Bogs" Asuncion, Samuel "Sam" Belleza, Bienvenido "Bien" Marquez III, Roberto Francis "Bert" Navera, Geronimo "Randy" Recinto, Felix Sy, Jr., and Leonardo "Lenny" Villa (neophytes). On the night of 8 February 1991, the neophytes were met by some members of the Aquila Fraternity (Aquilans) at the lobby of the Ateneo Law School. They all proceeded to Rufos Restaurant to have dinner. Afterwards, they went to the house of Michael Musngi, also an Aquilan, who briefed the neophytes on what to expect during the initiation rites. The latter were informed that there would be physical beatings, and that they could quit at any time. Their initiation rites were scheduled to last for three days. After their "briefing," they were brought to the Almeda Compound in Caloocan City for the commencement of their initiation.

Even before the neophytes got off the van, they had already received threats and insults from the Aquilans. As soon as the neophytes alighted from the van and walked towards the pelota court of the Almeda compound, some of the Aquilans delivered physical blows to them. The neophytes The public outrage over the death of Leonardo "Lenny" Villa the victim in this case on 10 were then subjected to traditional forms of Aquilan "initiation rites." These rites included the "Indian 1 February 1991 led to a very strong clamor to put an end to hazing. Due in large part to the brave Run," which required the neophytes to run a gauntlet of two parallel rows of Aquilans, each row efforts of his mother, petitioner Gerarda Villa, groups were organized, condemning his senseless delivering blows to the neophytes; the "Bicol Express," which obliged the neophytes to sit on the and tragic death. This widespread condemnation prompted Congress to enact a special law, which floor with their backs against the wall and their legs outstretched while the Aquilans walked, 2 became effective in 1995, that would criminalize hazing. The intent of the law was to discourage jumped, or ran over their legs; the "Rounds," in which the neophytes were held at the back of their members from making hazing a requirement for joining their sorority, fraternity, organization, or pants by the "auxiliaries" (the Aquilans charged with the duty of lending assistance to neophytes association.3 Moreover, the law was meant to counteract the exculpatory implications of "consent" during initiation rites), while the latter were being hit with fist blows on their arms or with knee and "initial innocent act" in the conduct of initiation rites by making the mere act of hazing blows on their thighs by two Aquilans; and the "Auxies Privilege Round," in which the au xiliaries 4 punishable or mala prohibita. were given the opportunity to inflict physical pain on the neophytes. During this time, the neophytes were also indoctrinated with the fraternity principles. They survived their first day of Sadly, the Lenny Villa tragedy did not discourage hazing activities in the country. 5 Within a year of initiation. his death, six more cases of hazing-related deaths emerged those of Frederick Cahiyang of the University of Visayas in Cebu; Raul Camaligan of San Beda College; Felipe Narne of Pamantasan On the morning of their second day 9 February 1991 the neophytes were made to present ng Araullo in Cabanatuan City; Dennis Cenedoza of the Cavite Naval Training Center; Joselito comic plays and to play rough basketball. They were also required to memorize and recite the Mangga of the Philippine Merchant Marine Institute; and Joselito Hernandez of the University of Aquila Fraternitys principles. Whenever they would give a wrong answer, they would be hit on the Philippines in Baguio City.6 their arms or legs. Late in the afternoon, the Aquilans revived the initiation rites proper and Although courts must not remain indifferent to public sentiments, in this case the general condemnation of a hazing-related death, they are still bound to observe a fundamental principle in our criminal justice system "[N]o act constitutes a crime unless it is made so by law."7 Nullum crimen, nulla poena sine lege. Even if an act is viewed by a large section of the populace as immoral or injurious, it cannot be considered a crime, absent any law prohibiting its commission. As interpreters of the law, judges are called upon to set aside emotion, to resist being swayed by strong public sentiments, and to rule strictly based on the elements of the offense and the facts allowed in evidence. Before the Court are the consolidated cases docketed as G.R. No. 151258 (Villareal v. People), G.R. No. 154954 (People v. Court of Appeals), G.R. No. 155101 (Dizon v. People), and G.R. Nos. 178057 and 178080 (Villa v. Escalona). Facts proceeded to torment them physically and psychologically. The neophytes were subjected to the same manner of hazing that they endured on the first day of initiation. After a few hours, the initiation for the day officially ended. After a while, accused non-resident or alumni fraternity members10 Fidelito Dizon (Dizon) and Artemio Villareal (Villareal) demanded that the rites be reopened. The head of initiation rites, Nelson Victorino (Victorino), initially refused. Upon the insistence of Dizon and Villareal, however, he reopened the initiation rites. The fraternity members, including Dizon and Villareal, then subjected the neophytes to "paddling" and to additional rounds of physical pain. Lenny received several paddle blows, one of which was so strong it sent him sprawling to the ground. The neophytes heard him complaining of intense pain and difficulty in breathing. After their last session of physical beatings, Lenny could no longer walk. He had to be carried by the auxiliaries to the carport. Again, the initiation for the day was officially ended, and the neophytes started eating dinner. They then slept at the carport.

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After an hour of sleep, the neophytes were suddenly roused by Lennys shivering and incoherent mumblings. Initially, Villareal and Dizon dismissed these rumblings, as they thought he was just overacting. When they realized, though, that Lenny was really feeling cold, some of the Aquilans started helping him. They removed his clothes and helped him through a sleeping bag to keep him warm. When his condition worsened, the Aquilans rushed him to the hospital. Lenny was pronounced dead on arrival. Consequently, a criminal case for homicide was filed against the following 35 Aquilans: In Criminal Case No. C-38340(91) 1. Fidelito Dizon (Dizon) 2. Artemio Villareal (Villareal) 3. Efren de Leon (De Leon) 4. Vincent Tecson (Tecson) 5. Junel Anthony Ama (Ama) 6. Antonio Mariano Almeda (Almeda) 7. Renato Bantug, Jr. (Bantug) 8. Nelson Victorino (Victorino) 9. Eulogio Sabban (Sabban) 10. Joseph Lledo (Lledo) 11. Etienne Guerrero (Guerrero) 12. Michael Musngi (Musngi) 13. Jonas Karl Perez (Perez) 14. Paul Angelo Santos (Santos) 15. Ronan de Guzman (De Guzman) 16. Antonio General (General) 17. Jaime Maria Flores II (Flores)

18. Dalmacio Lim, Jr. (Lim) 19. Ernesto Jose Montecillo (Montecillo) 20. Santiago Ranada III (Ranada) 21. Zosimo Mendoza (Mendoza) 22. Vicente Verdadero (Verdadero) 23. Amante Purisima II (Purisima) 24. Jude Fernandez (J. Fernandez) 25. Adel Abas (Abas) 26. Percival Brigola (Brigola) In Criminal Case No. C-38340 1. Manuel Escalona II (Escalona) 2. Crisanto Saruca, Jr. (Saruca) 3. Anselmo Adriano (Adriano) 4. Marcus Joel Ramos (Ramos) 5. Reynaldo Concepcion (Concepcion) 6. Florentino Ampil (Ampil) 7. Enrico de Vera III (De Vera) 8. Stanley Fernandez (S. Fernandez) 9. Noel Cabangon (Cabangon) Twenty-six of the accused Aquilans in Criminal Case No. C-38340(91) were jointly tried.11 On the other hand, the trial against the remaining nine accused in Criminal Case No. C-38340 was held in abeyance due to certain matters that had to be resolved first. 12 On 8 November 1993, the trial court rendered judgment in Criminal Case No. C-38340(91), holding the 26 accused guilty beyond reasonable doubt of the crime of homicide, penalized with

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reclusion temporal under Article 249 of the Revised Penal Code. 13 A few weeks after the trial court rendered its judgment, or on 29 November 1993, Criminal Case No. C-38340 against the remaining nine accused commenced anew.14 On 10 January 2002, the CA in (CA-G.R. No. 15520)15 set aside the finding of conspiracy by the trial court in Criminal Case No. C-38340(91) and modified the criminal liability of each of the accused according to individual participation. Accused De Leon had by then passed away, so the following Decision applied only to the remaining 25 accused, viz: 1. Nineteen of the accused-appellants Victorino, Sabban, Lledo, Guerrero, Musngi, Perez, De Guzman, Santos, General, Flores, Lim, Montecillo, Ranada, Mendoza, Verdadero, Purisima, Fernandez, Abas, and Brigola (Victorino et al.) were acquitted, as their individual guilt was not established by proof beyond reasonable doubt. 2. Four of the accused-appellants Vincent Tecson, Junel Anthony Ama, Antonio Mariano Almeda, and Renato Bantug, Jr. (Tecson et al.) were found guilty of the crime of slight physical injuries and sentenced to 20 days of arresto menor. They were also ordered to jointly pay the heirs of the victim the sum of P30,000 as indemnity. 3. Two of the accused-appellants Fidelito Dizon and Artemio Villareal were found guilty beyond reasonable doubt of the crime of homicide under Article 249 of the Revised Penal Code. Having found no mitigating or aggravating circumstance, the CA sentenced them to an indeterminate sentence of 10 years of prision mayor to 17 years of reclusion temporal. They were also ordered to indemnify, jointly and severally, the heirs of Lenny Villa in the sum of P 50,000 and to pay the additional amount of P 1,000,000 by way of moral damages. On 5 August 2002, the trial court in Criminal Case No. 38340 dismissed the charge against accused Concepcion on the ground of violation of his right to speedy trial. 16 Meanwhile, on different dates between the years 2003 and 2005, the trial court denied the respective Motions to Dismiss of accused Escalona, Ramos, Saruca, and Adriano.17 On 25 October 2006, the CA in CAG.R. SP Nos. 89060 & 9015318 reversed the trial courts Orders and dismissed the criminal case against Escalona, Ramos, Saruca, and Adriano on the basis of violation of their right to speedy trial.19 From the aforementioned Decisions, the five (5) consolidated Petitions were individually brought before this Court. G.R. No. 151258 Villareal v. People The instant case refers to accused Villareals Petition for Review on Certiorari under Rule 45. T he Petition raises two reversible errors allegedly committed by the CA in its Decision dated 10 January 2002 in CA-G.R. No. 15520 first, denial of due process; and, second, conviction absent proof beyond reasonable doubt.20 While the Petition was pending before this Court, counsel for petitioner Villareal filed a Notice of Death of Party on 10 August 2011. According to the Notice, petitioner Villareal died on 13 March 2011. Counsel thus asserts that the subject matter of the Petition previously filed by petitioner does not survive the death of the accused.

G.R. No. 155101 Dizon v. People Accused Dizon filed a Rule 45 Petition for Review on Certiorari, questioning the CAs Decision dated 10 January 2002 and Resolution dated 30 August 2002 in CA-G.R. No. 15520.21 Petitioner sets forth two main issues first, that he was denied due process when the CA sustained the trial courts forfeiture of his right to present evidence; and, second, that he was deprived of due process when the CA did not apply to him the same "ratio decidendi that served as basis of acquittal of the other accused."22 As regards the first issue, the trial court made a ruling, which forfeited Dizons right to present evidence during trial. The trial court expected Dizon to present evidence on an earlier date since a co-accused, Antonio General, no longer presented separate evidence during trial. According to Dizon, his right should not have been considered as waived because he was justified in asking for a postponement. He argues that he did not ask for a resetting of any of the hearing dates and in fact insisted that he was ready to present evidence on the original pre-assigned schedule, and not on an earlier hearing date. Regarding the second issue, petitioner contends that he should have likewise been acquitted, like the other accused, since his acts were also part of the traditional initiation rites and were not tainted by evil motives.23 He claims that the additional paddling session was part of the official activity of the fraternity. He also points out that one of the neophytes admitted that the chairperson of the initiation rites "decided that [Lenny] was fit enough to undergo the initiation so Mr. Villareal proceeded to do the paddling."24 Further, petitioner echoes the argument of the Solicitor General that "the individual blows inflicted by Dizon and Villareal could not have resulted in Lennys death."25 The Solicitor General purportedly averred that, "on the contrary, Dr. Arizala testified that the injuries suffered by Lenny could not be considered fatal if taken individually, but if taken collectively, the result is the violent death of the victim."26 Petitioner then counters the finding of the CA that he was motivated by ill will. He claims that Lennys father could not have stolen the parking space of Dizons father, since the latter did not have a car, and their fathers did not work in the same place or office. Revenge for the loss of the parking space was the alleged ill motive of Dizon. According to petitioner, his utterances regarding a stolen parking space were only part of the "psychological initiation." He then cites the testimony of Lennys co-neophyte witness Marquez who admitted knowing "it was not true and that he was just making it up."27 Further, petitioner argues that his alleged motivation of ill will was negated by his show of concern for Villa after the initiation rites. Dizon alludes to the testimony of one of the neophytes, who mentioned that the former had kicked the leg of the neophyte and told him to switch places with Lenny to prevent the latters chills. When the chills did not stop, Dizon, together with Victorino, helped Lenny through a sleeping bag and made him sit on a chair. According to petitioner, his alleged ill motivation is contradicted by his manifestation of compassion and concern for the victims well-being. G.R. No. 154954 People v. Court of Appeals This Petition for Certiorari under Rule 65 seeks the reversal of the CAs Decision dated 10 January 2002 and Resolution dated 30 August 2002 in CA-G.R. No. 15520, insofar as it acquitted 19 (Victorino et al.) and convicted 4 (Tecson et al.) of the accused Aquilans of the lesser crime of slight physical injuries.28 According to the Solicitor General, the CA erred in holding that there

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could have been no conspiracy to commit hazing, as hazing or fraternity initiation had not yet been criminalized at the time Lenny died. In the alternative, petitioner claims that the ruling of the trial court should have been upheld, inasmuch as it found that there was conspiracy to inflict physical injuries on Lenny. Since the injuries led to the victims death, petitioner posits that the accused Aquilans are criminally liable for the resulting crime of homicide, pursuant to Article 4 of the Revised Penal Code.29 The said article provides: "Criminal liability shall be incurred [b]y any person committing a felony (delit o) although the wrongful act done be different from that which he intended." Petitioner also argues that the rule on double jeopardy is inapplicable. According to the Solicitor General, the CA acted with grave abuse of discretion, amounting to lack or excess of jurisdiction, in setting aside the trial courts finding of conspiracy and in ruling that the criminal liability of all the accused must be based on their individual participation in the commission of the crime. G.R. Nos. 178057 and 178080 Villa v. Escalona Petitioner Villa filed the instant Petition for Review on Certiorari, praying for the reversal of the CAs Decision dated 25 October 2006 and Resolution dated 17 May 2007 in CA -G.R. S.P. Nos. 89060 and 90153.30 The Petition involves the dismissal of the criminal charge filed against Escalona, Ramos, Saruca, and Adriano.

3. Whether the CA committed grave abuse of discretion, amounting to lack or excess of jurisdiction, when it set aside the finding of conspiracy by the trial court and adjudicated the liability of each accused according to individual participation; 4. Whether accused Dizon is guilty of homicide; and 5. Whether the CA committed grave abuse of discretion when it pronounced Tecson, Ama, Almeda, and Bantug guilty only of slight physical injuries. Discussion Resolution on Preliminary Matters G.R. No. 151258 Villareal v. People In a Notice dated 26 September 2011 and while the Petition was pending resolution, this Court took note of counsel for petitioners Notice of Death of Party.

According to Article 89(1) of the Revised Penal Code, criminal liability for personal penalties is totally extinguished by the death of the convict. In contrast, criminal liability for pecuniary penalties is extinguished if the offender dies prior to final judgment. The term "personal penalties" refers to Due to "several pending incidents," the trial court ordered a separate trial for accused Escalona, the service of personal or imprisonment penalties,31 while the term "pecuniary penalties" (las Saruca, Adriano, Ramos, Ampil, Concepcion, De Vera, S. Fernandez, and Cabangon (Criminal pecuniarias) refers to fines and costs,32 including civil liability predicated on the criminal offense Case No. C-38340) to commence after proceedings against the 26 other accused in Criminal Case complained of (i.e., civil liability ex delicto).33 However, civil liability based on a source of obligation No. C-38340(91) shall have terminated. On 8 November 1993, the trial court found the 26 accused other than the delict survives the death of the accused and is recoverable through a separate civil guilty beyond reasonable doubt. As a result, the proceedings in Criminal Case No. C-38340 action.34 involving the nine other co-accused recommenced on 29 November 1993. For "various reasons," the initial trial of the case did not commence until 28 March 2005, or almost 12 years after the Thus, we hold that the death of petitioner Villareal extinguished his criminal liability for both arraignment of the nine accused. personal and pecuniary penalties, including his civil liability directly arising from the delict complained of. Consequently, his Petition is hereby dismissed, and the criminal case against him Petitioner Villa assails the CAs dismissal of the criminal case involving 4 of the 9 accused, deemed closed and terminated. namely, Escalona, Ramos, Saruca, and Adriano. She argues that the accused failed to assert their right to speedy trial within a reasonable period of time. She also points out that the prosecution G.R. No. 155101 (Dizon v. People) cannot be faulted for the delay, as the original records and the required evidence were not at its disposal, but were still in the appellate court. In an Order dated 28 July 1993, the trial court set the dates for the reception of evidence for accused-petitioner Dizon on the 8th, 15th, and 22nd of September; and the 5th and 12 of October We resolve herein the various issues that we group into five. 1993.35 The Order likewise stated that "it will not entertain any postponement and that all the accused who have not yet presented their respective evidence should be ready at all times down Issues the line, with their evidence on all said dates. Failure on their part to present evidence when required shall therefore be construed as waiver to present evidence."36 1. Whether the forfeiture of petitioner Dizons right to present evidence constitutes denial of due process; However, on 19 August 1993, counsel for another accused manifested in open court that his client Antonio General would no longer present separate evidence. Instead, the counsel would adopt the testimonial evidence of the other accused who had already testified. 37 Because of this 2. Whether the CA committed grave abuse of discretion, amounting to lack or excess of development and pursuant to the trial courts Order that the parties "should be ready at all times jurisdiction when it dismissed the case against Escalona, Ramos, Saruca, and Adriano down the line," the trial court expected Dizon to present evidence on the next trial date 25 for violation of the right of the accused to speedy trial; August 1993 instead of his originally assigned dates. The original dates were supposed to start two weeks later, or on 8 September 1993.38 Counsel for accused Dizon was not able to present evidence on the accelerated date. To address the situation, counsel filed a Constancia on 25

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August 1993, alleging that he had to appear in a previously scheduled case, and that he would be ready to present evidence on the dates originally assigned to his clients. 39 The trial court denied the Manifestation on the same date and treated the Constancia as a motion for postponement, in violation of the three-day-notice rule under the Rules of Court.40 Consequently, the trial court ruled that the failure of Dizon to present evidence amounted to a waiver of that right.41 Accused-petitioner Dizon thus argues that he was deprived of due process of law when the trial court forfeited his right to present evidence. According to him, the postponement of the 25 August 1993 hearing should have been considered justified, since his original pre-assigned trial dates were not supposed to start until 8 September 1993, when he was scheduled to present evidence. He posits that he was ready to present evidence on the dates assigned to him. He also points out that he did not ask for a resetting of any of the said hearing dates; that he in fact insisted on being allowed to present evidence on the dates fixed by the trial court. Thus, he contends that the trial court erred in accelerating the schedule of presentation of evidence, thereby invalidating the finding of his guilt. The right of the accused to present evidence is guaranteed by no less than the Constitution itself.42 Article III, Section 14(2) thereof, provides that "in all criminal prosecutions, the accused shall enjoy the right to be heard by himself and counsel" This constitutional right includes the right to present evidence in ones defense,43 as well as the right to be present and defend oneself in person at every stage of the proceedings.44 In Crisostomo v. Sandiganbayan,45 the Sandiganbayan set the hearing of the defenses presentation of evidence for 21, 22 and 23 June 1995. The 21 June 1995 hearing was cancelled due to "lack of quorum in the regular membership" of the Sandiganbayans Second Division and upon the agreement of the parties. The hearing was reset for the next day, 22 June 1995, but Crisostomo and his counsel failed to attend. The Sandiganbayan, on the very same day, issued an Order directing the issuance of a warrant for the arrest of Crisostomo and the confiscation of his surety bond. The Order further declared that he had waived his right to present evidence because of his nonappearance at "yesterdays and todays scheduled hearings." In ruling against the Order, we held thus: Under Section 2(c), Rule 114 and Section 1(c), Rule 115 of the Rules of Court, Crisostomos nonappearance during the 22 June 1995 trial was merely a waiver of his right to be present for trial on such date only and not for the succeeding trial dates xxx xxx xxx

Crisostomo of his right to present evidence without even allowing Crisostomo to explain his absence on the 22 June 1995 hearing. Clearly, the waiver of the right to present evidence in a criminal case involving a grave penalty is not assumed and taken lightly. The presence of the accused and his counsel is indispensable so that the court could personally conduct a searching inquiry into the waiver x x x. 46 (Emphasis supplied) The trial court should not have deemed the failure of petitioner to present evidence on 25 August 1993 as a waiver of his right to present evidence. On the contrary, it should have considered the excuse of counsel justified, especially since counsel for another accused General had made a last-minute adoption of testimonial evidence that freed up the succeeding trial dates; and since Dizon was not scheduled to testify until two weeks later. At any rate, the trial court pre-assigned five hearing dates for the reception of evidence. If it really wanted to impose its Order strictly, the most it could have done was to forfeit one out of the five days set for Dizons testimonial evidence. Stripping the accused of all his pre-assigned trial dates constitutes a patent denial of the constitutionally guaranteed right to due process. Nevertheless, as in the case of an improvident guilty plea, an invalid waiver of the right to present evidence and be heard does not per se work to vacate a finding of guilt in the criminal case or to enforce an automatic remand of the case to the trial court. 47 In People v. Bodoso, we ruled that where facts have adequately been represented in a criminal case, and no procedural unfairness or irregularity has prejudiced either the prosecution or the defense as a result of the invalid waiver, the rule is that a guilty verdict may nevertheless be upheld if the judgment is supported beyond reasonable doubt by the evidence on record.48 We do not see any material inadequacy in the relevant facts on record to resolve the case at bar. Neither can we see any "procedural unfairness or irregularity" that would substantially prejudice either the prosecution or the defense as a result of the invalid waiver. In fact, the arguments set forth by accused Dizon in his Petition corroborate the material facts relevant to decide the matter. Instead, what he is really contesting in his Petition is the application of the law to the facts by the trial court and the CA. Petitioner Dizon admits direct participation in the hazing of Lenny Villa by alleging in his Petition that "all actions of the petitioner were part of the traditional rites," and that "the alleged extension of the initiation rites was not outside the official activity of the fraternity." 49He even argues that "Dizon did not request for the extension and he participated only after the activity was sanctioned."50 For one reason or another, the case has been passed or turned over from one judge or justice to another at the trial court, at the CA, and even at the Supreme Court. Remanding the case for the reception of the evidence of petitioner Dizon would only inflict further injustice on the parties. This case has been going on for almost two decades. Its resolution is long overdue. Since the key facts necessary to decide the case have already been determined, we shall proceed to decide it. G.R. Nos. 178057 and 178080 (Villa v. Escalona) Petitioner Villa argues that the case against Escalona, Ramos, Saruca, and Adriano should not have been dismissed, since they failed to assert their right to speedy trial within a reasonable period of time. She points out that the accused failed to raise a protest during the dormancy of the criminal case against them, and that they asserted their right only after the trial court had dismissed the case against their co-accused Concepcion. Petitioner also emphasizes that the trial court denied the respective Motions to Dismiss filed by Saruca, Escalona, Ramos, and Adriano,

Moreover, Crisostomos absence on the 22 June 1995 hearing should not have been deemed as a waiver of his right to present evidence. While constitutional rights may be waived, such waiver must be clear and must be coupled with an actual intention to relinquish the right. Crisostomo did not voluntarily waive in person or even through his counsel the right to present evidence. The Sandiganbayan imposed the waiver due to the agreement of the prosecution, Calingayan, and Calingayan's counsel. In criminal cases where the imposable penalty may be death, as in the present case, the court is called upon to see to it that the accused is personally made aware of the consequences of a waiver of the right to present evidence. In fact, it is not enough that the accused is simply warned of the consequences of another failure to attend the succeeding hearings. The court must first explain to the accused personally in clear terms the exact nature and consequences of a waiver. Crisostomo was not even forewarned. The Sandiganbayan simply went ahead to deprive

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because it found that "the prosecution could not be faulted for the delay in the movement of this case when the original records and the evidence it may require were not at its disposal as these were in the Court of Appeals."51

The right of the accused to a speedy trial has been enshrined in Sections 14(2) and 16, Article III of the 1987 Constitution.52 This right requires that there be a trial free from vexatious, capricious or oppressive delays.53 The right is deemed violated when the proceeding is attended with unjustified postponements of trial, or when a long period of time is allowed to elapse without the case being xxx xxx xxx tried and for no cause or justifiable motive.54 In determining the right of the accused to speedy trial, courts should do more than a mathematical computation of the number of postponements of the It is likewise noticeable that from December 27, 1995, until August 5, 2002, or for a period of scheduled hearings of the case.55 The conduct of both the prosecution and the defense must be almost seven years, there was no action at all on the part of the court a quo. Except for the 56 weighed. Also to be considered are factors such as the length of delay, the assertion or nonpleadings filed by both the prosecution and the petitioners, the latest of which was on January 29, assertion of the right, and the prejudice wrought upon the defendant. 57 1996, followed by petitioner Sarucas motion to set case for trial on August 17, 1998 which the court did not act upon, the case remained dormant for a considerable length of time. This We have consistently ruled in a long line of cases that a dismissal of the case pursuant to the right prolonged inactivity whatsoever is precisely the kind of delay that the constitution frowns upon x x of the accused to speedy trial is tantamount to acquittal.58 As a consequence, an appeal or a x.63(Emphasis supplied) reconsideration of the dismissal would amount to a violation of the principle of double jeopardy.59 As we have previously discussed, however, where the dismissal of the case is This Court points out that on 10 January 1992, the final amended Information was filed against capricious, certiorari lies.60 The rule on double jeopardy is not triggered when a petition challenges Escalona, Ramos, Saruca, Ampil, S. Fernandez, Adriano, Cabangon, Concepcion, and De the validity of the order of dismissal instead of the correctness thereof. 61 Rather, grave abuse of Vera.64 On 29 November 1993, they were all arraigned.65 Unfortunately, the initial trial of the case discretion amounts to lack of jurisdiction, and lack of jurisdiction prevents double jeopardy from did not commence until 28 March 2005 or almost 12 years after arraignment. 66 attaching.62 We do not see grave abuse of discretion in the CAs dismissal of the case against accuse d Escalona, Ramos, Saruca, and Adriano on the basis of the violation of their right to speedy trial. The court held thus: An examination of the procedural history of this case would reveal that the following factors contributed to the slow progress of the proceedings in the case below: xxx xxx xxx

from the Court of Appeals. The prosecution did not comply with the said Order as in fact, the same directive was repeated by the court a quo in an Order dated December 27, 1995. Still, there was no compliance on the part of the prosecution. It is not stated when such order was complied with. It appears, however, that even until August 5, 2002, the said records were still not at the disposal of the trial court because the lack of it was made the basis of the said court in granting the motion to dismiss filed by co-accused Concepcion x x x.

As illustrated in our ruling in Abardo v. Sandiganbayan, the unexplained interval or inactivity of the Sandiganbayan for close to five years since the arraignment of the accused amounts to an unreasonable delay in the disposition of cases a clear violation of the right of the accused to a speedy disposition of cases.67 Thus, we held: The delay in this case measures up to the unreasonableness of the delay in the disposition of cases in Angchangco, Jr. vs. Ombudsman, where the Court found the delay of six years by the Ombudsman in resolving the criminal complaints to be violative of the constitutionally guaranteed right to a speedy disposition of cases; similarly, in Roque vs. Office of the Ombudsman, where the Court held that the delay of almost six years disregarded the Ombudsman's duty to act promptly on complaints before him; and in Cervantes vs. Sandiganbayan, where the Court held that the Sandiganbayan gravely abused its discretion in not quashing the information which was filed six years after the initiatory complaint was filed and thereby depriving petitioner of his right to a speedy disposition of the case. So it must be in the instant case, where the reinvestigation by the Ombudsman has dragged on for a decade already.68 (Emphasis supplied) From the foregoing principles, we affirm the ruling of the CA in CA-G.R. SP No. 89060 that accused Escalona et al.s right to speedy trial was violated. Since there is nothing in the records that would show that the subject of this Petition includes accused Ampil, S. Fernandez, Cabangon, and De Vera, the effects of this ruling shall be limited to accused Escalona, Ramos, Saruca, and Adriano. G.R. No. 154954 (People v. Court of Appeals)

5) The fact that the records of the case were elevated to the Court of Appeals and the prosecutions failure to comply with the order of the court a quo requiring them to secure certified true copies of the same. xxx xxx xxx

While we are prepared to concede that some of the foregoing factors that contributed to the delay of the trial of the petitioners are justifiable, We nonetheless hold that their right to speedy trial has been utterly violated in this case x x x. xxx xxx xxx

[T]he absence of the records in the trial court [was] due to the fact that the records of the case were elevated to the Court of Appeals, and the prosecutions failure to comply with the order of the court a quo requiring it to secure certified true copies of the same. What is glaring from the records is the fact that as early as September 21, 1995, the court a quo already issued an Order requiring the prosecution, through the Department of Justice, to secure the complete records of the case

The rule on double jeopardy is one of the pillars of our criminal justice system. It dictates that when a person is charged with an offense, and the case is terminated either by acquittal or conviction or in any other manner without the consent of the accused the accused cannot again be charged with the same or an identical offense.69 This principle is founded upon the law of reason, justice

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and conscience.70 It is embodied in the civil law maxim non bis in idem found in the common law of England and undoubtedly in every system of jurisprudence.71 It found expression in the Spanish Law, in the Constitution of the United States, and in our own Constitution as one of the fundamental rights of the citizen,72 viz: Article III Bill of Rights Section 21. No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act. Rule 117, Section 7 of the Rules of Court, which implements this particular constitutional right, provides as follows:73 SEC. 7. Former conviction or acquittal; double jeopardy. When an accused has been convicted or acquitted, or the case against him dismissed or otherwise terminated without his express consent by a court of competent jurisdiction, upon a valid complaint or information or other formal charge sufficient in form and substance to sustain a conviction and after the accused had pleaded to the charge, the conviction or acquittal of the accused or the dismissal of the case shall be a bar to another prosecution for the offense charged, or for any attempt to commit the same or frustration thereof, or for any offense which necessarily includes or is necessarily included in the offense charged in the former complaint or information. The rule on double jeopardy thus prohibits the state from appealing the judgment in order to reverse the acquittal or to increase the penalty imposed either through a regular appeal under Rule 41 of the Rules of Court or through an appeal by certiorari on pure questions of law under Rule 45 of the same Rules.74 The requisites for invoking double jeopardy are the following: (a) there is a valid complaint or information; (b) it is filed before a competent court; (c) the defendant pleaded to the charge; and (d) the defendant was acquitted or convicted, or the case against him or her was dismissed or otherwise terminated without the defendants express consent.75 As we have reiterated in People v. Court of Appeals and Galicia, "[a] verdict of acquittal is immediately final and a reexamination of the merits of such acquittal, even in the appellate courts, will put the accused in jeopardy for the same offense. The finality-of-acquittal doctrine has several avowed purposes. Primarily, it prevents the State from using its criminal processes as an instrument of harassment to wear out the accused by a multitude of cases with accumulated trials. It also serves the additional purpose of precluding the State, following an acquittal, from successively retrying the defendant in the hope of securing a conviction. And finally, it prevents the State, following conviction, from retrying the defendant again in the hope of securing a greater penalty."76 We further stressed that "an acquitted defendant is entitled to the right of repose as a direct consequence of the finality of his acquittal."77 This prohibition, however, is not absolute. The state may challenge the lower courts acquittal of the accused or the imposition of a lower penalty on the latter in the following recognized exceptions: (1) where the prosecution is deprived of a fair opportunity to prosecute and prove its case, tantamount to a deprivation of due process;78 (2) where there is a finding of mistrial;79 or (3) where there has been a grave abuse of discretion.80 The third instance refers to this Courts judicial power under Rule 65 to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part

of any branch or instrumentality of the government.81 Here, the party asking for the review must show the presence of a whimsical or capricious exercise of judgment equivalent to lack of jurisdiction; a patent and gross abuse of discretion amounting to an evasion of a positive duty or to a virtual refusal to perform a duty imposed by law or to act in contemplation of law; an exercise of power in an arbitrary and despotic manner by reason of passion and hostility; 82 or a blatant abuse of authority to a point so grave and so severe as to deprive the court of its very power to dispense justice.83 In such an event, the accused cannot be considered to be at risk of double jeopardy.84 The Solicitor General filed a Rule 65 Petition for Certiorari, which seeks the reversal of (1) the acquittal of Victorino et al. and (2) the conviction of Tecson et al. for the lesser crime of slight physical injuries, both on the basis of a misappreciation of facts and evidence. According to the Petition, "the decision of the Court of Appeals is not in accordance with law because private complainant and petitioner were denied due process of law when the public respondent completely ignored the a) Position Paper x x x b) the Motion for Partial Reconsideration x x x and c) the petitioners Comment x x x."85 Allegedly, the CA ignored evidence when it adopted the theory of individual responsibility; set aside the finding of conspiracy by the trial court; and failed to apply Article 4 of the Revised Penal Code.86 The Solicitor General also assails the finding that the physical blows were inflicted only by Dizon and Villareal, as well as the appreciation of Lenny Villas consent to hazing.87 In our view, what the Petition seeks is that we reexamine, reassess, and reweigh the probative value of the evidence presented by the parties.88 In People v. Maquiling, we held that grave abuse of discretion cannot be attributed to a court simply because it allegedly misappreciated the facts and the evidence.89 Mere errors of judgment are correctible by an appeal or a petition for review under Rule 45 of the Rules of Court, and not by an application for a writ of certiorari.90 Therefore, pursuant to the rule on double jeopardy, we are constrained to deny the Petition contra Victorino et al. the 19 acquitted fraternity members. We, however, modify the assailed judgment as regards Tecson, Ama, Almeda, and Bantug the four fraternity members convicted of slight physical injuries. Indeed, we have ruled in a line of cases that the rule on double jeopardy similarly applies when the state seeks the imposition of a higher penalty against the accused. 91 We have also recognized, however, that certiorari may be used to correct an abusive judgment upon a clear demonstration that the lower court blatantly abused its authority to a point so grave as to deprive it of its very power to dispense justice.92 The present case is one of those instances of grave abuse of discretion. In imposing the penalty of slight physical injuries on Tecson, Ama, Almeda, and Bantug, the CA reasoned thus: Based on the medical findings, it would appear that with the exclusion of the fatal wounds inflicted by the accused Dizon and Villareal, the injuries sustained by the victim as a result of the physical punishment heaped on him were serious in nature. However, by reason of the death of the victim, there can be no precise means to determine the duration of the incapacity or the medical attendance required. To do so, at this stage would be merely speculative. In a prosecution for this crime where the category of the offense and the severity of the penalty depend on the period of illness or incapacity for labor, the length of this period must likewise be proved beyond reasonable doubt in much the same manner as the same act charged [People v. Codilla, CA-G.R. No. 4079-R, June 26, 1950]. And when proof of the said period is absent, the crime committed should be deemed only as slight physical injuries [People v. De los Santos, CA, 59 O.G. 4393, citing People

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v. Penesa, 81 Phil. 398]. As such, this Court is constrained to rule that the injuries inflicted by the appellants, Tecson, Ama, Almeda and Bantug, Jr., are only slight and not serious, in nature.93 (Emphasis supplied and citations included) The appellate court relied on our ruling in People v. Penesa94 in finding that the four accused should be held guilty only of slight physical injuries. According to the CA, because of "the death of the victim, there can be no precise means to determine the duration of the incapacity or medical attendance required."95 The reliance on Penesa was utterly misplaced. A review of that case would reveal that the accused therein was guilty merely of slight physical injuries, because the victims injuries neither caused incapacity for labor nor required medical attendance. 96 Furthermore, he did not die.97 His injuries were not even serious.98 Since Penesa involved a case in which the victim allegedly suffered physical injuries and not death, the ruling cited by the CA was patently inapplicable. On the contrary, the CAs ultimate conclusion that Tecson, Ama, Almeda, and Bantug were liable merely for slight physical injuries grossly contradicts its own findings of fact. According to the court, the four accused "were found to have inflicted more than the usual punishment undertaken during such initiation rites on the person of Villa."99 It then adopted the NBI medico-legal officers findings that the antecedent cause of Lenny Villas death was the "multipl e traumatic injuries" he suffered from the initiation rites.100 Considering that the CA found that the "physical punishment heaped on [Lenny Villa was] serious in nature,"101 it was patently erroneous for the court to limit the criminal liability to slight physical injuries, which is a light felony. Article 4(1) of the Revised Penal Code dictates that the perpetrator shall be liable for the consequences of an act, even if its result is different from that intended. Thus, once a person is found to have committed an initial felonious act, such as the unlawful infliction of physical injuries that results in the death of the victim, courts are required to automatically apply the legal framework governing the destruction of life. This rule is mandatory, and not subject to discretion. The CAs application of the legal framework governing physical injuries punished under Articles 262 to 266 for intentional felonies and Article 365 for culpable felonies is therefore tantamount to a whimsical, capricious, and abusive exercise of judgment amounting to lack of jurisdiction. According to the Revised Penal Code, the mandatory and legally imposable penalty in case the victim dies should be based on the framework governing the destruction of the life of a person, punished under Articles 246 to 261 for intentional felonies and Article 365 for culpable felonies, and not under the aforementioned provisions. We emphasize that these two types of felonies are distinct from and legally inconsistent with each other, in that the accused cannot be held criminally liable for physical injuries when actual death occurs.102

According to the trial court, although hazing was not (at the time) punishable as a crime, the intentional infliction of physical injuries on Villa was nonetheless a felonious act under Articles 263 to 266 of the Revised Penal Code. Thus, in ruling against the accused, the court a quo found that pursuant to Article 4(1) of the Revised Penal Code, the accused fraternity members were guilty of homicide, as it was the direct, natural and logical consequence of the physical injuries they had intentionally inflicted.104 The CA modified the trial courts finding of criminal liability. It ruled that there could have been no conspiracy since the neophytes, including Lenny Villa, had knowingly consented to the conduct of hazing during their initiation rites. The accused fraternity members, therefore, were liable only for the consequences of their individual acts. Accordingly, 19 of the accused Victorino et al. were acquitted; 4 of them Tecson et al. were found guilty of slight physical injuries; and the remaining 2 Dizon and Villareal were found guilty of homicide. The issue at hand does not concern a typical criminal case wherein the perpetrator clearly commits a felony in order to take revenge upon, to gain advantage over, to harm maliciously, or to get even with, the victim. Rather, the case involves an ex ante situation in which a man driven by his own desire to join a society of men pledged to go through physically and psychologically strenuous admission rituals, just so he could enter the fraternity. Thus, in order to understand how our criminal laws apply to such situation absent the Anti-Hazing Law, we deem it necessary to make a brief exposition on the underlying concepts shaping intentional felonies, as well as on the nature of physical and psychological initiations widely known as hazing. Intentional Felony and Conspiracy Our Revised Penal Code belongs to the classical school of thought.105 The classical theory posits that a human person is essentially a moral creature with an absolute free will to choose between good and evil.106 It asserts that one should only be adjudged or held accountable for wrongful acts so long as free will appears unimpaired.107The basic postulate of the classical penal system is that humans are rational and calculating beings who guide their actions with reference to the principles of pleasure and pain.108 They refrain from criminal acts if threatened with punishment sufficient to cancel the hope of possible gain or advantage in committing the crime.109 Here, criminal liability is thus based on the free will and moral blame of the actor. 110 The identity of mens rea defined as a guilty mind, a guilty or wrongful purpose or criminal intent is the predominant consideration.111 Thus, it is not enough to do what the law prohibits.112 In order for an intentional felony to exist, it is necessary that the act be committed by means of dolo or "malice."113

The term "dolo" or "malice" is a complex idea involving the elements of freedom, intelligence, and intent.114 The first element, freedom, refers to an act done with deliberation and with power to Attributing criminal liability solely to Villareal and Dizon as if only their acts, in and of themselves, choose between two things.115The second element, intelligence, concerns the ability to determine caused the death of Lenny Villa is contrary to the CAs own findings. From proof that the death of the morality of human acts, as well as the capacity to distinguish between a licit and an illicit the victim was the cumulative effect of the multiple injuries he suffered, 103 the only logical act.116 The last element, intent, involves an aim or a determination to do a certain act. 117 conclusion is that criminal responsibility should redound to all those who have been proven to have directly participated in the infliction of physical injuries on Lenny. The accumulation of The element of intent on which this Court shall focus is described as the state of mind bruising on his body caused him to suffer cardiac arrest. Accordingly, we find that the CA accompanying an act, especially a forbidden act.118 It refers to the purpose of the mind and the committed grave abuse of discretion amounting to lack or excess of jurisdiction in finding Tecson, resolve with which a person proceeds.119 It does not refer to mere will, for the latter pertains to the Ama, Almeda, and Bantug criminally liable for slight physical injuries. As an allowable exception to act, while intent concerns the result of the act.120 While motive is the "moving power" that impels the rule on double jeopardy, we therefore give due course to the Petition in G.R. No. 154954. one to action for a definite result, intent is the "purpose" of using a particular means to produce the result.121 On the other hand, the term "felonious" means, inter alia, malicious, villainous, and/or Resolution on Ultimate Findings proceeding from an evil heart or purpose.122 With these elements taken together, the requirement of intent in intentional felony must refer to malicious intent, which is a vicious and malevolent state

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of mind accompanying a forbidden act. Stated otherwise, intentional felony requires the existence of dolus malus that the act or omission be done "willfully," "maliciously," "with deliberate evil intent," and "with malice aforethought."123 The maxim is actus non facit reum, nisi mens sit rea a crime is not committed if the mind of the person performing the act complained of is innocent.124 As is required of the other elements of a felony, the existence of malicious intent must be proven beyond reasonable doubt.125 In turn, the existence of malicious intent is necessary in order for conspiracy to attach. Article 8 of the Revised Penal Code which provides that "conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it" is to be interpreted to refer only to felonies committed by means of dolo or malice. The phrase "coming to an agreement" connotes the existence of a prefaced "intent" to cause injury to another, an element present only in intentional felonies. In culpable felonies or criminal negligence, the injury inflicted on another is unintentional, the wrong done being simply the result of an act performed without malice or criminal design.126 Here, a person performs an initial lawful deed; however, due to negligence, imprudence, lack of foresight, or lack of skill, the deed results in a wrongful act.127 Verily, a deliberate intent to do an unlawful act, which is a requisite in conspiracy, is inconsistent with the idea of a felony committed by means of culpa. 128 The presence of an initial malicious intent to commit a felony is thus a vital ingredient in establishing the commission of the intentional felony of homicide. 129 Being mala in se, the felony of homicide requires the existence of malice or dolo130 immediately before or simultaneously with the infliction of injuries.131 Intent to kill or animus interficendi cannot and should not be inferred, unless there is proof beyond reasonable doubt of such intent.132 Furthermore, the victims death must not have been the product of accident, natural cause, or suicide. 133 If death resulted from an act executed without malice or criminal intent but with lack of foresight, carelessness, or negligence the act must be qualified as reckless or simple negligence or imprudence resulting in homicide.134 Hazing and other forms of initiation rites The notion of hazing is not a recent development in our society. 135 It is said that, throughout history, hazing in some form or another has been associated with organizations ranging from military groups to indigenous tribes.136Some say that elements of hazing can be traced back to the Middle Ages, during which new students who enrolled in European universities worked as servants for upperclassmen.137 It is believed that the concept of hazing is rooted in ancient Greece,138 where young men recruited into the military were tested with pain or challenged to demonstrate the limits of their loyalty and to prepare the recruits for battle. 139 Modern fraternities and sororities espouse some connection to these values of ancient Greek civilization. 140 According to a scholar, this concept lends historical legitimacy to a "tradition" or "ritual" whereby prospective members are asked to prove their worthiness and loyalty to the organization in which they seek to attain membership through hazing.141 Thus, it is said that in the Greek fraternity system, custom requires a student wishing to join an organization to receive an invitation in order to be a neophyte for a particular chapter. 142 The neophyte period is usually one to two semesters long.143 During the "program," neophytes are required to interview and to get to know the active members of the chapter; to learn chapter history; to understand the principles of the organization; to maintain a specified grade point average; to participate in the organizations activities; and to show dignity and respect for their fellow neophytes, the organization, and its active and alumni members. 144 Some chapters require the initiation activities for a recruit to involve hazing acts during the entire neophyte stage.145

Hazing, as commonly understood, involves an initiation rite or ritual that serves as prerequisite for admission to an organization.146 In hazing, the "recruit," "pledge," "neophyte," "initiate," "applicant" or any other term by which the organization may refer to such a person is generally placed in embarrassing or humiliating situations, like being forced to do menial, silly, foolish, or other similar tasks or activities.147 It encompasses different forms of conduct that humiliate, degrade, abuse, or physically endanger those who desire membership in the organization. 148 These acts usually involve physical or psychological suffering or injury.149 The concept of initiation rites in the country is nothing new. In fact, more than a century ago, our national hero Andres Bonifacio organized a secret society named Kataastaasan Kagalanggalangang Katipunan ng mga Anak ng Bayan (The Highest and Most Venerable Association of the Sons and Daughters of the Nation).150 The Katipunan, or KKK, started as a small confraternity believed to be inspired by European Freemasonry, as well as by confraternities or sodalities approved by the Catholic Church.151 The Katipunans ideology was brought home to each member through the societys initiation ritual.152 It is said that initiates were brought to a dark room, lit by a single point of illumination, and were asked a series of questions to determine their fitness, loyalty, courage, and resolve.153 They were made to go through vigorous trials such as "pagsuot sa isang lungga" or "[pagtalon] sa balon."154 It would seem that they were also made to withstand the blow of "pangherong bakal sa pisngi" and to endure a "matalas na punyal."155 As a final step in the ritual, the neophyte Katipunero was made to sign membership papers with the his own blood.156 It is believed that the Greek fraternity system was transported by the Americans to the Philippines in the late 19th century. As can be seen in the following instances, the manner of hazing in the United States was jarringly similar to that inflicted by the Aquila Fraternity on Lenny Villa. Early in 1865, upperclassmen at West Point Academy forced the fourth classmen to do exhausting physical exercises that sometimes resulted in permanent physical damage; to eat or drink unpalatable foods; and in various ways to humiliate themselves. 157 In 1901, General Douglas MacArthur got involved in a congressional investigation of hazing at the academy during his second year at West Point.158 In Easler v. Hejaz Temple of Greenville, decided in 1985, the candidate-victim was injured during the shriners hazing event, which was part of the initiation ceremonies for Hejaz membership.159 The ritual involved what was known as the "mattress-rotating barrel trick."160 It required each candidate to slide down an eight to nine-foot-high metal board onto connected mattresses leading to a barrel, over which the candidate was required to climb. 161Members of Hejaz would stand on each side of the mattresses and barrel and fun-paddle candidates en route to the barrel.162 In a video footage taken in 1991, U.S. Marine paratroopers in Camp Lejeune, North Carolina, were seen performing a ceremony in which they pinned paratrooper jump wings directly onto the neophyte paratroopers chests.163 The victims were shown writhing and crying out in pain as others pounded the spiked medals through the shirts and into the chests of the victims. 164 In State v. Allen, decided in 1995, the Southeast Missouri State University chapter of Kappa Alpha Psi invited male students to enter into a pledgeship program.165 The fraternity members subjected the pledges to repeated physical abuse including repeated, open-hand strikes at the nape, the chest, and the back; caning of the bare soles of the feet and buttocks; blows to the back with the use of a heavy book and a cookie sheet while the pledges were on their hands and knees; various kicks and punches to the body; and "body slamming," an activity in which active members of the

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fraternity lifted pledges up in the air and dropped them to the ground.166 The fraternity members then put the pledges through a seven-station circle of physical abuse.167 In Ex Parte Barran, decided in 1998, the pledge-victim went through hazing by fraternity members of the Kappa Alpha Order at the Auburn University in Alabama.168 The hazing included the following: (1) having to dig a ditch and jump into it after it had been filled with water, urine, feces, dinner leftovers, and vomit; (2) receiving paddlings on the buttocks; (3) being pushed and kicked, often onto walls or into pits and trash cans; (4) eating foods like peppers, hot sauce, butter, and "yerks" (a mixture of hot sauce, mayonnaise, butter, beans, and other items); (5) doing chores for the fraternity and its members, such as cleaning the fraternity house and yard, being designated as driver, and running errands; (6) appearing regularly at 2 a.m. "meetings," during which the pledges would be hazed for a couple of hours; and (7) "running the gauntlet," during which the pledges were pushed, kicked, and hit as they ran down a hallway and descended down a flight of stairs.169 In Lloyd v. Alpha Phi Alpha Fraternity, decided in 1999, the victim Sylvester Lloyd was accepted to pledge at the Cornell University chapter of the Alpha Phi Alpha Fraternity. 170 He participated in initiation activities, which included various forms of physical beatings and torture, psychological coercion and embarrassment.171 In Kenner v. Kappa Alpha Psi Fraternity, decided in 2002, the initiate-victim suffered injuries from hazing activities during the fraternitys initiation rites.172 Kenner and the other initiates went through psychological and physical hazing, including being paddled on the buttocks for more than 200 times.173 In Morton v. State, Marcus Jones a university student in Florida sought initiation into the campus chapter of the Kappa Alpha Psi Fraternity during the 2005-06 academic year.174 The pledges efforts to join the fraternity culminated in a series of initiation rituals conducted in fo ur nights. Jones, together with other candidates, was blindfolded, verbally harassed, and caned on his face and buttocks.175 In these rituals described as "preliminaries," which lasted for two evenings, he received approximately 60 canings on his buttocks. 176 During the last two days of the hazing, the rituals intensified.177 The pledges sustained roughly 210 cane strikes during the fournight initiation.178 Jones and several other candidates passed out. 179 The purported raison dtre behind hazing practices is the proverbial "birth by fire," through which the pledge who has successfully withstood the hazing proves his or her worth. 180 Some organizations even believe that hazing is the path to enlightenment. It is said that this process enables the organization to establish unity among the pledges and, hence, reinforces and ensures the future of the organization.181 Alleged benefits of joining include leadership opportunities; improved academic performance; higher self-esteem; professional networking opportunities; and the esprit dcorp associated with close, almost filial, friendship and common cause. 182 Anti-Hazing laws in the U.S. The first hazing statute in the U.S. appeared in 1874 in response to hazing in the military. 183 The hazing of recruits and plebes in the armed services was so prevalent that Congress prohibited all forms of military hazing, harmful or not.184 It was not until 1901 that Illinois passed the first state anti-hazing law, criminalizing conduct "whereby any one sustains an injury to his [or her] person therefrom."185

However, it was not until the 1980s and 1990s, due in large part to the efforts of the Committee to Halt Useless College Killings and other similar organizations, that states increasingly began to enact legislation prohibiting and/or criminalizing hazing.186 As of 2008, all but six states had enacted criminal or civil statutes proscribing hazing.187 Most anti-hazing laws in the U.S. treat hazing as a misdemeanor and carry relatively light consequences for even the most severe situations.188 Only a few states with anti-hazing laws consider hazing as a felony in case death or great bodily harm occurs.189 Under the laws of Illinois, hazing is a Class A misdemeanor, except hazing that results in death or great bodily harm, which is a Class 4 felony.190 In a Class 4 felony, a sentence of imprisonment shall be for a term of not less than one year and not more than three years. 191 Indiana criminal law provides that a person who recklessly, knowingly, or intentionally performs hazing that results in serious bodily injury to a person commits criminal recklessness, a Class D felony. 192 The offense becomes a Class C felony if committed by means of a deadly weapon. 193 As an element of a Class C felony criminal recklessness resulting in serious bodily injury, death falls under the category of "serious bodily injury."194 A person who commits a Class C felony is imprisoned for a fixed term of between two (2) and eight (8) years, with the advisory sentence being four (4) years.195 Pursuant to Missouri law, hazing is a Class A misdemeanor, unless the act creates a substantial risk to the life of the student or prospective member, in which case it becomes a Class C felony.196 A Class C felony provides for an imprisonment term not to exceed seven years.197 In Texas, hazing that causes the death of another is a state jail felony. 198 An individual adjudged guilty of a state jail felony is punished by confinement in a state jail for any term of not more than two years or not less than 180 days.199 Under Utah law, if hazing results in serious bodily injury, the hazer is guilty of a third-degree felony.200 A person who has been convicted of a third-degree felony may be sentenced to imprisonment for a term not to exceed five years. 201 West Virginia law provides that if the act of hazing would otherwise be deemed a felony, the hazer may be found guilty thereof and subject to penalties provided therefor.202 In Wisconsin, a person is guilty of a Class G felony if hazing results in the death of another.203 A Class G felony carries a fine not to exceed $25,000 or imprisonment not to exceed 10 years, or both.204 In certain states in the U.S., victims of hazing were left with limited remedies, as there was no hazing statute.205This situation was exemplified in Ballou v. Sigma Nu General Fraternity, wherein Barry Ballous family resorted to a civil action for wrongful death, since there was no anti -hazing statute in South Carolina until 1994.206 The existence of animus interficendi or intent to kill not proven beyond reasonable doubt The presence of an ex ante situation in this case, fraternity initiation rites does not automatically amount to the absence of malicious intent or dolus malus. If it is proven beyond reasonable doubt that the perpetrators were equipped with a guilty mind whether or not there is a contextual background or factual premise they are still criminally liable for intentional felony. The trial court, the CA, and the Solicitor General are all in agreement that with the exception of Villareal and Dizon accused Tecson, Ama, Almeda, and Bantug did not have the animus interficendi or intent to kill Lenny Villa or the other neophytes. We shall no longer disturb this finding.

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As regards Villareal and Dizon, the CA modified the Decision of the trial court and found that the two accused had the animus interficendi or intent to kill Lenny Villa, not merely to inflict physical injuries on him. It justified its finding of homicide against Dizon by holding that he had apparently been motivated by ill will while beating up Villa. Dizon kept repeating that his fathers parking space had been stolen by the victims father.207 As to Villareal, the court said that the accused suspected the family of Bienvenido Marquez, one of the neophytes, to have had a hand in the death of Villareals brother.208 The CA then ruled as follows: The two had their own axes to grind against Villa and Marquez. It was very clear that they acted with evil and criminal intent. The evidence on this matter is unrebutted and so for the death of Villa, appellants Dizon andVillareal must and should face the consequence of their acts, that is, to be held liable for the crime of homicide.209(Emphasis supplied) We cannot subscribe to this conclusion. The appellate court relied mainly on the testimony of Bienvenido Marquez to determine the existence of animus interficendi. For a full appreciation of the context in which the supposed utterances were made, the Court deems it necessary to reproduce the relevant portions of witness Marquezs testimony: Witness We were brought up into [Michael Musngis] room and we were briefed as to what to expect during the next three days and we were told the members of the fraternity and their batch and we were also told about the fraternity song, sir. xxx xxx xxx

Atty. Tadiar During all these times that the van was being rocked through and through, what were the voices or utterances that you heard? Witness "Villa akin ka," "Asuncion patay ka," "Recinto patay ka sa amin," etc., sir. Atty. Tadiar And those utterances and threats, how long did they continue during the rocking of the van which lasted for 5 minutes? xxx xxx xxx

Witness Even after they rocked the van, we still kept on hearing voices, sir. xxx xxx xxx

Atty. Tadiar During the time that this rounds [of physical beating] were being inflicted, was there any utterances by anybody? Witness Yes sir. Some were piercing, some were discouraging, and some were encouraging others who were pounding and beating us, it was just like a fiesta atmosphere, actually some of them enjoyed looking us being pounded, sir. Atty. Tadiar Do you recall what were those voices that you heard? Witness One particular utterance always said was, they asked us whether "matigas pa yan, kayang-kaya pa niyan." Atty. Tadiar Do you know who in particular uttered those particular words that you quote? Witness I cannot particularly point to because there were utterances simultaneously, I could not really pin point who uttered those words, sir. xxx xxx xxx

Witness We were escorted out of [Michael Musngis] house and we were made to ride a van and we were brought to another place in Kalookan City which I later found to be the place of Mariano Almeda, sir. xxx xxx xxx

Witness Upon arrival, we were instructed to bow our head down and to link our arms and then the driver of the van and other members of the Aquilans who were inside left us inside the van, sir. xxx xxx xxx

Atty. Tadiar Were there any utterances that you heard during the conduct of this Bicol Express? Witness Yes, sir I heard utterances. Atty. Tadiar Will you please recall to this Honorable Court what were the utterances that you remember? Witness For example, one person particularly Boyet Dizon stepped on my thigh, he would say that and I quote "ito, yung pamilya nito ay pinapatay yung kapatid ko," so that would in turn sort of justifying him in inflicting more serious pain on me. So instead of just walking, he would jump on my thighs and then after on was Lenny Villa. He was saying to the effect that "this guy, his father stole the parking space of my father," sir. So, thats why he inflicted more pain on Villa and that went on, sir.

Witness We heard voices shouted outside the van to the effect, "Villa akin ka," "Asuncion Patay ka" and the people outside pound the van, rock the van, sir. Atty. Tadiar Will you please recall in what tone of voice and how strong a voice these remarks uttered upon your arrival? Witness Some were almost shouting, you could feel the sense of excitement in their voices, sir. xxx xxx xxx

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Atty. Tadiar And you were referring to which particular accused? Witness Boyet Dizon, sir. Atty. Tadiar When Boyet Dizon at that particular time was accusing you of having your family have his brother killed, what was your response? Witness Of course, I knew sir that it was not true and that he was just making it up sir. So he said that I knew nothing of that incident. However, he just in fact after the Bicol Express, he kept on uttering those words/statements so that it would in turn justify him and to give me harder blows, sir. xxx xxx xxx

Honorable Court what exactly were the accusations that were charged against you while inflicting blows upon you in particular? Witness While he was inflicting blows upon me, he told me in particular if I knew that his family who had his brother killed, and he said that his brother was an NPA, sir so I knew that it was just a story that he made up and I said that I knew nothing about it and he continued inflicting blows on me, sir. And another incident was when a talk was being given, Dizon was on another part of the pelota court and I was sort of looking and we saw that he was drinking beer, and he said and I quote: "Marquez, Marquez, ano ang tinitingin-tingin mo diyan, ikaw yung pamilya mo ang nagpapatay sa aking kapatid, yari ka sa akin," sir. Atty. Tadiar What else? Witness Thats all, sir.

Atty. Tadiar You mentioned about Dizon in particular mentioning that Lenny Villas father stole the parking space allotted for his father, do you recall who were within hearing distance when that utterance was made? Witness Yes, sir. All of the neophytes heard that utterance, sir. xxx xxx xxx

Atty. Tadiar And on that first night of February 8, 1991, did ever a doctor or a physician came around as promised to you earlier? Witness No, sir.210 (Emphasis supplied) On cross-examination, witness Bienvenido Marquez testified thus: Judge Purisima When you testified on direct examination Mr. Marquez, have you stated that there was a briefing that was conducted immediately before your initiation as regards to what to expect during the initiation, did I hear you right? Witness Yes, sir.

Witness There were different times made this accusation so there were different people who heard from time to time, sir. xxx xxx xxx

Atty. Tadiar Can you tell the Honorable Court when was the next accusation against Lenny Villas father was made? Witness When we were line up against the wall, Boyet Dizon came near to us and when Lenny Villas turn, I heard him uttered those statements, sir. Atty. Tadiar What happened after he made this accusation to Lenny Villas father? Witness He continued to inflict blows on Lenny Villa. Atty. Tadiar How were those blows inflicted?

Judge Purisima Who did the briefing? Witness Mr. Michael Musngi, sir and Nelson Victorino. Judge Purisima Will you kindly tell the Honorable Court what they told you to expect during the initiation? Witness They told us at the time we would be brought to a particular place, we would be mocked at, sir. Judge Purisima So, you expected to be mocked at, ridiculed, humiliated etc., and the likes?

Witness There were slaps and he knelt on Lenny Villas thighs and sometime he stand up and he kicked his thighs and sometimes jumped at it, sir. xxx xxx xxx

Witness Yes, sir. Judge Purisima You were also told beforehand that there would be physical contact? Witness Yes, sir at the briefing.

Atty. Tadiar We would go on to the second day but not right now. You mentioned also that accusations made byDizon "you or your family had his brother killed," can you inform this

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xxx

xxx

xxx

Witness Yes, sir, because they informed that we could immediately go back to school. All the bruises would be limited to our arms and legs, sir. So, if we wear the regular school uniforms like long sleeves, it would be covered actually so we have no thinking that our face would be slapped, sir. Judge Purisima So, you mean to say that beforehand that you would have bruises on your body but that will be covered? Witness Yes, sir. JudgePurisima So, what kind of physical contact or implements that you expect that would create bruises to your body? Witness At that point I am already sure that there would be hitting by a paddling or paddle, sir. xxx xxx xxx

Atty. Jimenez You said on direct that while Mr. Dizon was initiating you, he said or he was supposed to have said according to you that your family were responsible for the killing of his brother who was an NPA, do you remember saying that? Witness Yes, sir. Atty. Jimenez You also said in connection with that statement said to you by Dizon that you did not believe him because that is not true, correct? Witness Yes, sir. Atty. Jimenez In other words, he was only psychologizing you perhaps, the purpose as I have mentioned before, terrifying you, scaring you or frightening you into quitting the initiation, this is correct? Witness No, sir, perhaps it is one but the main reason, I think, why he was saying those things was because he wanted to inflict injury. Atty. Jimenez He did not tell that to you. That is your only perception, correct?

Judge Purisima Now, will you admit Mr. Marquez that much of the initiation procedures is psychological in nature? Witness Combination, sir.211 (Emphasis supplied) xxx xxx xxx

Witness No, sir, because at one point, while he was telling this to Villareal, he was hitting me. Atty. Jimenez But did you not say earlier that you [were] subjected to the same forms of initiation by all the initiating masters? You said that earlier, right? Witness Yes, sir.

Atty. Jimenez The initiation that was conducted did not consist only of physical initiation, meaning body contact, is that correct? Witness Yes, sir.

Atty. Jimenez Are you saying also that the others who jumped on you or kicked you said something similar as was told to you by Mr. Dizon? Witness No, sir.

Atty. Jimenez Part of the initiation was the so-called psychological initiation, correct? Witness Yes, sir. Atty. Jimenez And this consisted of making you believe of things calculated to terrify you, scare you, correct? Witness Yes, sir. Atty. Jimenez In other words, the initiating masters made belief situation intended to, I repeat, terrify you, frighten you, scare you into perhaps quitting the initiation, is this correct? Witness Sometimes sir, yes. Atty. Jimenez But the fact remains that in the Bicol Express for instance, the masters would run on your thighs, right? Witness Yes, sir. Atty. Jimenez This was the regular procedure that was followed by the initiating masters not only on you but also on the other neophytes? Witness Yes, sir. Atty. Jimenez In other words, it is fair to say that whatever forms of initiation was administered by one master, was also administered by one master on a neophyte, was also administered by another master on the other neophyte, this is correct?

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Witness Yes, sir.212 (Emphasis supplied) According to the Solicitor General himself, the ill motives attributed by the CA to Dizon and Villareal were "baseless,"213 since the statements of the accused were "just part of the psychological initiation calculated to instill fear on the part of the neophytes"; that "[t]here is no element of truth in it as testified by Bienvenido Marquez"; and that the "harsh words uttered by Petitioner and Villareal are part of tradition concurred and accepted by all the fraternity members during their initiation rites."214 We agree with the Solicitor General. The foregoing testimony of witness Marquez reveals a glaring mistake of substantial proportion on the part of the CA it mistook the utterances of Dizon for those of Villareal. Such inaccuracy cannot be tolerated, especially because it was the CAs primary basis for finding that Villarreal had the intent to kill Lenny Villa, thereby making Villareal guilty of the intentional felony of homicide. To repeat, according to Bienvenido Marquezs testimony, as reproduced above, it was Dizon who uttered both "accusations" against Villa and Marquez; Villareal had no participation whatsoever in the specific threats referred to by the CA. It was "Boyet Dizon [who] stepped on [Marquezs] thigh"; and who told witness Marquez, "[I]to, yung pamilya nito ay pinapatay yung kapatid ko." It was also Dizon who jumped on Villas thighs while saying, "[T]his guy, his father stole the parking space of my father." With the testimony clarified, we find that the CA had no basis for concluding the existence of intent to kill based solely thereon. As to the existence of animus interficendi on the part of Dizon, we refer to the entire factual milieu and contextual premise of the incident to fully appreciate and understand the testimony of witness Marquez. At the outset, the neophytes were briefed that they would be subjected to psychological pressure in order to scare them. They knew that they would be mocked, ridiculed, and intimidated. They heard fraternity members shout, "Patay ka, Recinto," "Yari ka, Recinto," "Villa, akin ka," "Asuncion, gulpi ka," "Putang ina mo, Asuncion," "Putang ina nyo, patay kayo sa amin," or some other words to that effect.215 While beating the neophytes, Dizon accused Marquez of the death of the formers purported NPA brother, and then blamed Lenny Villas father for stealing the parking space of Dizons father. According to the Solicitor General, these statements, including those of the accused Dizon, were all part of the psychological initiation employed by the Aquila Fraternity.216 Thus, to our understanding, accused Dizons way of inflicting psychol ogical pressure was through hurling make-believe accusations at the initiates. He concocted the fictitious stories, so that he could "justify" giving the neophytes harder blows, all in the context of fraternity initiation and role playing. Even one of the neophytes admitted that the accusations were untrue and made-up. The infliction of psychological pressure is not unusual in the conduct of hazing. In fact, during the Senate deliberations on the then proposed Anti-Hazing Law, former Senator Lina spoke as follows: Senator Lina. -- so as to capture the intent that we conveyed during the period of interpellations on why we included the phrase "or psychological pain and suffering." xxx xxx xxx

So that if no direct physical harm is inflicted upon the neophyte or the recruit but the recruit or neophyte is made to undergo certain acts which I already described yesterday, like playing the Russian roulette extensively to test the readiness and the willingness of the neophyte or recruit to continue his desire to be a member of the fraternity, sorority or similar organization or playing and putting a noose on the neck of the neophyte or recruit, making the recruit or neophyte stand on the ledge of the fourth floor of the building facing outside, asking him to jump outside after making him turn around several times but the reality is that he will be made to jump towards the inside portion of the building these are the mental or psychological tests that are resorted to by these organizations, sororities or fraternities. The doctors who appeared during the public hearing testified that such acts can result in some mental aberration, that they can even lead to psychosis, neurosis or insanity. This is what we want to prevent.217(Emphasis supplied) Thus, without proof beyond reasonable doubt, Dizons behavior must not be automatically viewed as evidence of a genuine, evil motivation to kill Lenny Villa. Rather, it must be taken within the context of the fraternitys psychological initiation. This Court points out that it was not even established whether the fathers of Dizon and Villa really had any familiarity with each other as would lend credence to the veracity of Dizons threats. The testimony of Lennys co-neophyte, Marquez, only confirmed this view. According to Marquez, he "knew it was not true and that [Dizon] was just making it up."218 Even the trial court did not give weight to the utterances of Dizon as constituting intent to kill: "[T]he cumulative acts of all the accused were not directed toward killing Villa, but merely to inflict physical harm as part of the fraternity initiation rites x x x."219 The Solicitor General shares the same view. Verily, we cannot sustain the CA in finding the accused Dizon guilty of homicide under Article 249 of the Revised Penal Code on the basis of the existence of intent to kill. Animus interficendi cannot and should not be inferred unless there is proof beyond reasonable doubt of such intent.220 Instead, we adopt and reinstate the finding of the trial court in part, insofar as it ruled that none of the fraternity members had the specific intent to kill Lenny Villa. 221 The existence of animus iniuriandi or malicious intent to injure not proven beyond reasonable doubt The Solicitor General argues, instead, that there was an intent to inflict physical injuries on Lenny Villa. Echoing the Decision of the trial court, the Solicitor General then posits that since all of the accused fraternity members conspired to inflict physical injuries on Lenny Villa and death ensued, all of them should be liable for the crime of homicide pursuant to Article 4(1) of the Revised Penal Code. In order to be found guilty of any of the felonious acts under Articles 262 to 266 of the Revised Penal Code,222the employment of physical injuries must be coupled with dolus malus. As an act that is mala in se, the existence of malicious intent is fundamental, since injury arises from the mental state of the wrongdoer iniuria ex affectu facientis consistat. If there is no criminal intent, the accused cannot be found guilty of an intentional felony. Thus, in case of physical injuries under the Revised Penal Code, there must be a specific animus iniuriandi or malicious intention to do wrong against the physical integrity or well-being of a person, so as to incapacitate and deprive the victim of certain bodily functions. Without proof beyond reasonable doubt of the required animus iniuriandi, the overt act of inflicting physical injuries per se merely satisfies the elements of freedom and intelligence in an intentional felony. The commission of the act does not, in itself, make a man guilty unless his intentions are.223

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Thus, we have ruled in a number of instances224 that the mere infliction of physical injuries, absent malicious intent, does not make a person automatically liable for an intentional felony. In Bagajo v. People,225 the accused teacher, using a bamboo stick, whipped one of her students behind her legs and thighs as a form of discipline. The student suffered lesions and bruises from the corporal punishment. In reversing the trial courts finding of criminal liability for slight physical injuries, this Court stated thus: "Independently of any civil or administrative responsibility [w]e are persuaded that she did not do what she had done with criminal intent the means she actually used was moderate and that she was not motivated by ill-will, hatred or any malevolent intent." Considering the applicable laws, we then ruled that "as a matter of law, petitioner did not incur any criminal liability for her act of whipping her pupil." In People v. Carmen,226 the accused members of the religious group known as the Missionaries of Our Lady of Fatima under the guise of a "ritual or treatment" plunged the head of the victim into a barrel of water, banged his head against a bench, pounded his chest with fists, and stabbed him on the side with a kitchen knife, in order to cure him of "nervous breakdown" by expelling through those means the bad spirits possessing him. The collective acts of the group caused the death of the victim. Since malicious intent was not proven, we reversed the trial courts finding of liability for murder under Article 4 of the Revised Penal Code and instead ruled that the accused should be held criminally liable for reckless imprudence resulting in homicide under Article 365 thereof. Indeed, the threshold question is whether the accuseds initial acts of inflicting physical pain on the neophytes were attended by animus iniuriandi amounting to a felonious act punishable under the Revised Penal Code, thereby making it subject to Article 4(1) thereof. In People v. Regato, we ruled that malicious intent must be judged by the action, conduct, and external acts of the accused.227 What persons do is the best index of their intention.228 We have also ruled that the method employed, the kind of weapon used, and the parts of the body on which the injury was inflicted may be determinative of the intent of the perpetrator.229 The Court shall thus examine the whole contextual background surrounding the death of Lenny Villa. Lenny died during Aquilas fraternity initiation rites. The night before the commencement of the rites, they were briefed on what to expect. They were told that there would be physical beatings, that the whole event would last for three days, and that they could quit anytime. On their first night, they were subjected to "traditional" initiation rites, including the "Indian Run," "Bicol Express," "Rounds," and the "Auxies Privilege Round." The beatings were predominantly directed at the neophytes arms and legs. In the morning of their second day of initiation, they were made to present comic plays and to play rough basketball. They were also required to memorize and recite the Aquila Fraternitys principles. Late in the afternoon, they were once again subjected to "traditional" initiation rituals. When the rituals were officially reopened on the insistence of Dizon and Villareal, the neophytes were subjected to another "traditional" ritual paddling by the fraternity. During the whole initiation rites, auxiliaries were assigned to the neophytes. The auxiliaries protected the neophytes by functioning as human barriers and shielding them from those who were designated to inflict physical and psychological pain on the initiates. 230 It was their regular duty to stop foul or excessive physical blows; to help the neophytes to "pump" their legs in order that their blood would circulate; to facilitate a rest interval after every physical activity or "round"; to serve food and water; to tell jokes; to coach the initiates; and to give them whatever they needed.
231

It is worth pointing out that the neophytes willingly and voluntarily consented to undergo physical initiation and hazing. As can be gleaned from the narration of facts, they voluntarily agreed to join the initiation rites to become members of the Aquila Legis Fraternity. Prior to the initiation, they were given briefings on what to expect. It is of common knowledge that before admission in a fraternity, the neophytes will undergo a rite of passage. Thus, they were made aware that traditional methods such as mocking, psychological tests and physical punishment would take place. They knew that the initiation would involve beatings and other forms of hazing. They were also told of their right and opportunity to quit at any time they wanted to. In fact, prosecution witness Navera testified that accused Tecson told him that "after a week, you can already play basketball." Prosecution witness Marquez for his part, admitted that he knew that the initiates would be hit "in the arms and legs," that a wooden paddle would be used to hit them and that he expected bruises on his arms and legs. Indeed, there c an be no fraternity initiation without consenting neophytes.234 (Emphasis supplied) Even after going through Aquilas grueling traditional rituals during the first day, Lenny continued his participation and finished the second day of initiation. Based on the foregoing contextual background, and absent further proof showing clear malicious intent, we are constrained to rule that the specific animus iniuriandi was not present in this case. Even if the specific acts of punching, kicking, paddling, and other modes of inflicting physical pain were done voluntarily, freely, and with intelligence, thereby satisfying the elements of freedom and intelligence in the felony of physical injuries, the fundamental ingredient of criminal intent was not proven beyond reasonable doubt. On the contrary, all that was proven was that the acts were done pursuant to tradition. Although the additional "rounds" on the second night were held upon the insistence of Villareal and Dizon, the initiations were officially reopened with the consent of the head of the initiation rites; and the accused fraternity members still participated in the rituals, including the paddling, which were performed pursuant to tradition. Other than the paddle, no other "weapon" was used to inflict injuries on Lenny. The targeted body parts were predominantly the legs and the arms. The designation of roles, including the role of auxiliaries, which were assigned for the specific purpose of lending assistance to and taking care of the neophytes during the initiation rites, further belied the presence of malicious intent. All those who wished to join the fraternity went through the same process of "traditional" initiation; there is no proof that Lenny Villa was specifically targeted or given a different treatment. We stress that Congress itself recognized that hazing is uniquely different from common crimes.235 The totality of the circumstances must therefore be taken into consideration. The underlying context and motive in which the infliction of physical injuries was rooted may also be determined by Lennys continued participation in the initiation and consent to the method used even after the first day. The following discussion of the framers of the 1995 Anti-Hazing Law is enlightening: Senator Guingona. Most of these acts, if not all, are already punished under the Revised Penal Code. Senator Lina. That is correct, Mr. President. Senator Guingona. If hazing is done at present and it results in death, the charge would be murder or homicide.

These rituals were performed with Lennys consent. A few days before the "rites," he asked both his parents for permission to join the Aquila Fraternity.232 His father knew that Lenny would go through an initiation process and would be gone for three days.233 The CA found as follows: Senator Lina. That is correct, Mr. President.

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Senator Guingona. If it does not result in death, it may be frustrated homicide or serious physical injuries. Senator Lina. That is correct, Mr. President. Senator Guingona. Or, if the person who commits sexual abuse does so it can be penalized under rape or acts of lasciviousness. Senator Lina. That is correct, Mr. President. Senator Guingona. So, what is the rationale for making a new offense under this definition of the crime of hazing? Senator Lina. To discourage persons or group of persons either composing a sorority, fraternity or any association from making this requirement of initiation that has already resulted in these specific acts or results, Mr. President. That is the main rationale. We want to send a strong signal across the land that no group or association can require the act of physical initiation before a person can become a member without being held criminally liable. xxx xxx xxx

So, what we want to discourage is the so-called initial innocent act. That is why there is need to institute this kind of hazing. Ganiyan po ang nangyari. Ang fraternity o ang sorority ay magrerecruit. Wala talaga silang intensiyong makamatay. Hindi ko na babanggitin at buhay pa iyong kaso. Pero dito sa anim o pito na namatay nitong nakaraang taon, walang intensiyong patayin talaga iyong neophyte. So, kung maghihintay pa tayo, na saka lamang natin isasakdal ng murder kung namatay na, ay after the fact ho iyon. Pero, kung sasabihin natin sa mga kabataan na: "Huwag ninyong gagawin iyong hazing. Iyan ay kasalanan at kung mamatay diyan, mataas ang penalty sa inyo." xxx xxx xxx

Senator Guingona. I join the lofty motives, Mr. President, of the distinguished Sponsor. But I am again disturbed by his statement that the prosecution does not have to prove the intent that resulted in the death, that resulted in the serious physical injuries, that resulted in the acts of lasciviousness or deranged mind. We do not have to prove the willful intent of the accused in proving or establishing the crime of hazing. This seems, to me, a novel situation where we create the special crime without having to go into the intent, which is one of the basic elements of any crime. If there is no intent, there is no crime. If the intent were merely to initiate, then there is no offense. And even the distinguished Sponsor admits that the organization, the intent to initiate, the intent to have a new society or a new club is, per se, not punishable at all. What are punishable are the acts that lead to the result. But if these results are not going to be proven by intent, but just because there was hazing, I am afraid that it will disturb the basic concepts of the Revised Penal Code, Mr. President. Senator Lina. Mr. President, the act of hazing, precisely, is being criminalized because in the context of what is happening in the sororities and fraternities, when they conduct hazing, no one will admit that their intention is to maim or to kill. So, we are already criminalizing the fact of inflicting physical pain. Mr. President, it is a criminal act and we want it stopped, deterred, discouraged. If that occurs, under this law, there is no necessity to prove that the masters intended to kill or the masters intended to maim. What is important is the result of the act of hazing. Otherwise, the masters or those who inflict the physical pain can easily escape responsibility and say, "We did not have the intention to kill. This is part of our initiation rites. This is normal. We do not have any intention to kill or maim."

Senator Guingona. Yes, but what would be the rationale for that imposition? Because the distinguished Sponsor has said that he is not punishing a mere organization, he is not seeking the punishment of an initiation into a club or organization, he is seeking the punishment of certain acts that resulted in death, et cetera as a result of hazing which are already covered crimes. The penalty is increased in one, because we would like to discourage hazing, abusive hazing, but it may be a legitimate defense for invoking two or more charges or offenses, because these very same acts are already punishable under the Revised Penal Code. That is my difficulty, Mr. President. Senator Lina. x x x

This is the lusot, Mr. President. They might as well have been charged therefore with the ordinary Another point, Mr. President, is this, and this is a very telling difference: When a person or group of crime of homicide, mutilation, et cetera, where the prosecution will have a difficulty proving the elements if they are separate offenses. persons resort to hazing as a requirement for gaining entry into an organization, the intent to commit a wrong is not visible or is not present, Mr. President. Whereas, in these specific crimes, Mr. President, let us say there is death or there is homicide, mutilation, if one files a case, then the xxx xxx xxx intention to commit a wrong has to be proven. But if the crime of hazing is the basis, what is important is the result from the act of hazing. Senator Guingona. Mr. President, assuming there was a group that initiated and a person died. The charge is murder. My question is: Under this bill if it becomes a law, would the prosecution To me, that is the basic difference and that is what will prevent or deter the sororities or have to prove conspiracy or not anymore? fraternities; that they should really shun this activity called "hazing." Because, initially, these fraternities or sororities do not even consider having a neophyte killed or maimed or that acts of Senator Lina. Mr. President, if the person is present during hazing x x x lasciviousness are even committed initially, Mr. President.

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Senator Guingona. The persons are present. First, would the prosecution have to prove conspiracy? Second, would the prosecution have to prove intent to kill or not? Senator Lina. No more. As to the second question, Mr. President, if that occurs, there is no need to prove intent to kill. Senator Guingona. But the charge is murder. Senator Lina. That is why I said that it should not be murder. It should be hazing, Mr. President. 236 (Emphasis supplied) During a discussion between Senator Biazon and Senator Lina on the issue of whether to include sodomy as a punishable act under the Anti-Hazing Law, Senator Lina further clarified thus: Senator Biazon. Mr. President, this Representation has no objection to the inclusion of sodomy as one of the conditions resulting from hazing as necessary to be punished. However, the act of sodomy can be committed by two persons with or without consent. To make it clearer, what is being punished here is the commission of sodomy forced into another individual by another individual. I move, Mr. President, that sodomy be modified by the phrase "without consent" for purposes of this section. Senator Lina. I am afraid, Mr. President, that if we qualify sodomy with the concept that it is only going to aggravate the crime of hazing if it is done without consent will change a lot of concepts here. Because the results from hazing aggravate the offense with or without consent. In fact, when a person joins a fraternity, sorority, or any association for that matter, it can be with or without the consent of the intended victim. The fact that a person joins a sorority or fraternity with his consent does not negate the crime of hazing. This is a proposed law intended to protect the citizens from the malpractices that attend initiation which may have been announced with or without physical infliction of pain or injury, Mr. President. Regardless of whether there is announcement that there will be physical hazing or whether there is none, and therefore, the neophyte is duped into joining a fraternity is of no moment. What is important is that there is an infliction of physical pain. The bottom line of this law is that a citizen even has to be protected from himself if he joins a fraternity, so that at a certain point in time, the State, the individual, or the parents of the victim can run after the perpetrators of the crime, regardless of whether or not there was consent on the part of the victim. xxx xxx xxx

their thing if they want to make love in ways that are not considered acceptable by the mainstream of society. That is not something that the State should prohibit. But sodomy in this case is connected with hazing, Mr. President. Such that the act may even be entered into with consent. It is not only sodomy. The infliction of pain may be done with the consent of the neophyte. If the law is passed, that does not make the act of hazing not punishable because the neophyte accepted the infliction of pain upon himself. If the victim suffers from serious physical injuries, but the initiator said, "Well, he allowed it upon himself. He consented to it." So, if we allow that reasoning that sodomy was done with the consent of the victim, then we would not have passed any law at all. There will be no significance if we pass this bill, because it will always be a defense that the victim allowed the infliction of pain or suffering. He accepted it as part of the initiation rites. But precisely, Mr. President that is one thing that we would want to prohibit. That the defense of consent will not apply because the very act of inflicting physical pain or psychological suffering is, by itself, a punishable act. The result of the act of hazing, like death or physical injuries merely aggravates the act with higher penalties. But the defense of consent is not going to nullify the criminal nature of the act. So, if we accept the amendment that sodomy can only aggravate the offense if it is committed without consent of the victim, then the whole foundation of this proposed law will collapse. Senator Biazon. Thank you, Mr. President. Senator Lina. Thank you very much. The President. Is there any objection to the committee amendment? (Silence.) The Chair hears none; the same is approved.237 (Emphasis supplied) Realizing the implication of removing the states burden to prove intent, Senator Lina, the principal author of the Senate Bill, said: I am very happy that the distinguished Minority Leader brought out the idea of intent or whether there it is mala inse or mala prohibita. There can be a radical amendment if that is the point that he wants to go to. If we agree on the concept, then, maybe, we can just make this a special law on hazing. We will not include this anymore under the Revised Penal Code. That is a possibility. I will not foreclose that suggestion, Mr. President.238(Emphasis supplied) Thus, having in mind the potential conflict between the proposed law and the core principle of mala in se adhered to under the Revised Penal Code, Congress did not simply enact an amendment thereto. Instead, it created a special law on hazing, founded upon the principle of mala prohibita. This dilemma faced by Congress is further proof of how the nature of hazing unique as against typical crimes cast a cloud of doubt on whether society considered the act as

Senator Lina. Mr. President, I understand the position taken by the distinguished Gentleman from Cavite and Metro Manila. It is correct that society sometimes adopts new mores, traditions, and practices. In this bill, we are not going to encroach into the private proclivities of some individuals when they do their acts in private as we do not take a peek into the private rooms of couples. They can do

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an inherently wrong conduct or mala in se at the time. It is safe to presume that Lennys parents would not have consented239 to his participation in Aquila Fraternitys initiation rites if the practice of hazing were considered by them as mala in se. Furthermore, in Vedaa v. Valencia (1998), we noted through Associate Justice (now retired Chief Justice) Hilario Davide that "in our nations very recent history, the people have spoken, through Congress, to deem conduct constitutive of hazing, [an] act[] previously considered harmless by custom, as criminal."240 Although it may be regarded as a simple obiter dictum, the statement nonetheless shows recognition that hazing or the conduct of initiation rites through physical and/or psychological suffering has not been traditionally criminalized. Prior to the 1995 AntiHazing Law, there was to some extent a lacuna in the law; hazing was not clearly considered an intentional felony. And when there is doubt on the interpretation of criminal laws, all must be resolved in favor of the accused. In dubio pro reo. For the foregoing reasons, and as a matter of law, the Court is constrained to rule against the trial courts finding of malicious intent to inflict physical injuries on Lenny Villa, there being no proof beyond reasonable doubt of the existence of malicious intent to inflict physical injuries or animus iniuriandi as required in mala in se cases, considering the contextual background of his death, the unique nature of hazing, and absent a law prohibiting hazing. The accused fraternity members guilty of reckless imprudence resulting in homicide The absence of malicious intent does not automatically mean, however, that the accused fraternity members are ultimately devoid of criminal liability. The Revised Penal Code also punishes felonies that are committed by means of fault (culpa). According to Article 3 thereof, there is fault when the wrongful act results from imprudence, negligence, lack of foresight, or lack of skill. Reckless imprudence or negligence consists of a voluntary act done without malice, from which an immediate personal harm, injury or material damage results by reason of an inexcusable lack of precaution or advertence on the part of the person committing it. 241 In this case, the danger is visible and consciously appreciated by the actor.242 In contrast, simple imprudence or negligence comprises an act done without grave fault, from which an injury or material damage ensues by reason of a mere lack of foresight or skill.243 Here, the threatened harm is not immediate, and the danger is not openly visible. 244

There was patent recklessness in the hazing of Lenny Villa. According to the NBI medico-legal officer, Lenny died of cardiac failure secondary to multiple traumatic injuries.252The officer explained that cardiac failure refers to the failure of the heart to work as a pump and as part of the circulatory system due to the lack of blood. 253 In the present case, the victims heart could no longer work as a pumping organ, because it was deprived of its requisite blood and oxygen.254 The deprivation was due to the "channeling" of the blood supply from the entire circulatory system including the heart, arteries, veins, venules, and capillaries to the thigh, leg, and arm areas of Lenny, thus causing the formation of multiple hematomas or blood clots.255 The multiple hematomas were wide, thick, and deep,256 indicating that these could have resulted mainly from injuries sustained by the victim from fist blows, knee blows, paddles, or the like.257 Repeated blows to those areas caused the blood to gradually ooze out of the capillaries until the circulating blood became so markedly diminished as to produce death. 258 The officer also found that the brain, liver, kidney, pancreas, intestines, and all other organs seen in the abdominals, as well as the thoracic organ in the lungs, were pale due to the lack of blood, which was redirected to the thighs and forearms.259 It was concluded that there was nothing in the heart that would indicate that the victim suffered from a previous cardiac arrest or disease. 260 The multiple hematomas or bruises found in Lenny Villas arms and thighs, resulting from repeated blows to those areas, caused the loss of blood from his vital organs and led to his eventual death. These hematomas must be taken in the light of the hazing activities performed on him by the Aquila Fraternity. According to the testimonies of the co-neophytes of Lenny, they were punched, kicked, elbowed, kneed, stamped on; and hit with different objects on their arms, legs, and thighs.261 They were also "paddled" at the back of their thighs or legs; 262 and slapped on their faces.263 They were made to play rough basketball.264 Witness Marquez testified on Lenny, saying: "[T]inamaan daw sya sa spine."265 The NBI medico-legal officer explained that the death of the victim was the cumulative effect of the multiple injuries suffered by the latter.266 The relevant portion of the testimony is as follows: Atty. Tadiar Doctor, there was, rather, it was your testimony on various cross examinations of defense counsels that the injuries that you have enumerated on the body of the deceased Lenny Villa previously marked as Exhibit "G-1" to "G-14" individually by themselves would not cause the death of the victim. The question I am going to propound to you is what is the cumulative effect of all of these injuries marked from Exhibit "G-1" to "G-14"?

Witness All together nothing in concert to cause to the demise of the victim. So, it is not fair for us The test245 for determining whether or not a person is negligent in doing an act is as follows: Would to isolate such injuries here because we are talking of the whole body. At the same manner that as a car would not run minus one (1) wheel. No, the more humane in human approach is to interpret a prudent man in the position of the person to whom negligence is attributed foresee harm to the all those injuries in whole and not in part.267 person injured as a reasonable consequence of the course about to be pursued? If so, the law imposes on the doer the duty to take precaution against the mischievous results of the act. Failure to do so constitutes negligence.246 There is also evidence to show that some of the accused fraternity members were drinking during the initiation rites.268 As we held in Gaid v. People, for a person to avoid being charged with recklessness, the degree of precaution and diligence required varies with the degree of the danger involved. 247 If, on account Consequently, the collective acts of the fraternity members were tantamount to recklessness, of a certain line of conduct, the danger of causing harm to another person is great, the individual which made the resulting death of Lenny a culpable felony. It must be remembered that who chooses to follow that particular course of conduct is bound to be very careful, in order to organizations owe to their initiates a duty of care not to cause them injury in the process.269 With prevent or avoid damage or injury.248 In contrast, if the danger is minor, not much care is the foregoing facts, we rule that the accused are guilty of reckless imprudence resulting in 249 required. It is thus possible that there are countless degrees of precaution or diligence that may homicide. Since the NBI medico-legal officer found that the victims death was the cumulative 250 be required of an individual, "from a transitory glance of care to the most vigilant effort." The effect of the injuries suffered, criminal responsibility redounds to all those who directly participated duty of the person to employ more or less degree of care will depend upon the circumstances of in and contributed to the infliction of physical injuries. each particular case.251

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It appears from the aforementioned facts that the incident may have been prevented, or at least mitigated, had the alumni of Aquila Fraternity accused Dizon and Villareal restrained themselves from insisting on reopening the initiation rites. Although this point did not matter in the end, as records would show that the other fraternity members participated in the reopened initiation rites having in mind the concept of "seniority" in fraternities the implication of the presence of alumni should be seen as a point of review in future legislation. We further note that some of the fraternity members were intoxicated during Lennys initiation rites. In this light, the Court submits to Congress, for legislative consideration, the amendment of the Anti-Hazing Law to include the fact of intoxication and the presence of non-resident or alumni fraternity members during hazing as aggravating circumstances that would increase the applicable penalties. It is truly astonishing how men would wittingly or unwittingly impose the misery of hazing and employ appalling rituals in the name of brotherhood. There must be a better way to establish "kinship." A neophyte admitted that he joined the fraternity to have more friends and to avail himself of the benefits it offered, such as tips during bar examinations.270 Another initiate did not give up, because he feared being looked down upon as a quitter, and because he felt he did not have a choice.271 Thus, for Lenny Villa and the other neophytes, joining the Aquila Fraternity entailed a leap in the dark. By giving consent under the circumstances, they left their fates in the hands of the fraternity members. Unfortunately, the hands to which lives were entrusted were barbaric as they were reckless. Our finding of criminal liability for the felony of reckless imprudence resulting in homicide shall cover only accused Tecson, Ama, Almeda, Bantug, and Dizon. Had the Anti-Hazing Law been in effect then, these five accused fraternity members would have all been convicted of the crime of hazing punishable by reclusion perpetua (life imprisonment).272 Since there was no law prohibiting the act of hazing when Lenny died, we are constrained to rule according to existing laws at the time of his death. The CA found that the prosecution failed to prove, beyond reasonable doubt, Victorino et al.s individual participation in the infliction of physical injuries upon Lenny Villa. 273As to accused Villareal, his criminal liability was totally extinguished by the fact of his death, pursuant to Article 89 of the Revised Penal Code. Furthermore, our ruling herein shall be interpreted without prejudice to the applicability of the AntiHazing Law to subsequent cases. Furthermore, the modification of criminal liability from slight physical injuries to reckless imprudence resulting in homicide shall apply only with respect to accused Almeda, Ama, Bantug, and Tecson. The accused liable to pay damages

incurred or proven during trial. Furthermore, in the appeal, the Solicitor General does not interpose any claim for actual damages.277 The heirs of the deceased may recover moral damages for the grief suffered on account of the victims death.278This penalty is pursuant to Article 2206(3) of the Civil Code, which provides that the "spouse, legitimate and illegitimate descendants and the ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased." 279 Thus, we hereby we affirm the CAs award of moral damages in the amount of P 1,000,000. WHEREFORE, the appealed Judgment in G.R. No. 155101 finding petitioner Fidelito Dizon guilty of homicide is hereby MODIFIED and set aside IN PART. The appealed Judgment in G.R. No. 154954 finding Antonio Mariano Almeda, Junel Anthony Ama, Renato Bantug, Jr., and Vincent Tecson guilty of the crime of slight physical injuries is also MODIFIED and set aside in part. Instead, Fidelito Dizon, Antonio Mariano Almeda, Junel Anthony Ama, Renato Bantug, Jr., and Vincent Tecson are found guilty beyond reasonable doubt of reckless imprudence resulting in homicide defined and penalized under Article 365 in relation to Article 249 of the Revised Penal Code. They are hereby sentenced to suffer an indeterminate prison term of four (4) months and one (1) day of arresto mayor, as minimum, to four (4) years and two (2) months of prision correccional, as maximum. In addition, accused are ORDERED jointly and severally to pay the heirs of Lenny Villa civil indemnity ex delicto in the amount of P50,000, and moral damages in the amount of P 1,000,000, plus legal interest on all damages awarded at the rate of 12% from the date of the finality of this Decision until satisfaction.280 Costs de oficio. The appealed Judgment in G.R. No. 154954, acquitting Victorino et al., is hereby affirmed. The appealed Judgments in G.R. Nos. 178057 & 178080, dismissing the criminal case filed against Escalona, Ramos, Saruca, and Adriano, are likewise affirmed. Finally, pursuant to Article 89(1) of the Revised Penal Code, the Petition in G.R. No. 151258 is hereby dismissed, and the criminal case against Artemio Villareal deemed closed and TERMINATED. Let copies of this Decision be furnished to the Senate President and the Speaker of the House of Representatives for possible consideration of the amendment of the Anti-Hazing Law to include the fact of intoxication and the presence of non-resident or alumni fraternity members during hazing as aggravating circumstances that would increase the applicable penalties. SO ORDERED.

SECOND DIVISION The CA awarded damages in favor of the heirs of Lenny Villa in the amounts of P 50,000 as civil indemnity ex delicto and P 1,000,000 as moral damages, to be jointly and severally paid by G.R. No. 171845 October 10, 2012 accused Dizon and Villareal. It also awarded the amount of P 30,000 as indemnity to be jointly and severally paid by accused Almeda, Ama, Bantug, and Tecson.1wphi1 SPOUSES GODFREY and GERARDINA SERFINO, Petitioners, vs. 274 Civil indemnity ex delicto is automatically awarded for the sole fact of death of the victim. In FAR EAST BANK AND TRUST COMPANY, INC., now BANK OF THE PHILIPPINE 275 accordance with prevailing jurisprudence, we sustain the CAs award of indemnity in the amount ISLANDS, Respondent. of P 50,000. The heirs of the victim are entitled to actual or compensatory damages, including expenses incurred in connection with the death of the victim, so long as the claim is supported by tangible documents.276 Though we are prepared to award actual damages, the Court is prevented from granting them, since the records are bereft of any evidence to show that actual expenses were DECISION BRION, J.:

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Before the Court is a petition for review on certiorari, 1 filed under Rule 45 of the Rules of Court, assailing the decision2 dated February 23, 2006 of the Regional Trial Court (RTC) of Bacolod City, Branch 41, in Civil Case No. 95-9344. FACTUAL ANTECEDENTS The present case traces its roots to the compromise judgment dated October 24, 19953 of the RTC of Bacolod City, Branch 47, in Civil Case No. 95-9880. Civil Case No. 95-9880 was an action for collection of sum of money instituted by the petitioner spouses Godfrey and Gerardina Serfino (collectively, spouses Serfino) against the spouses Domingo and Magdalena Cortez (collectively, spouses Cortez). By way of settlement, the spouses Serfino and the spouses Cortez executed a compromise agreement on October 20, 1995, in which the spouses Cortez acknowledged their indebtedness to the spouses Serfino in the amount of P 108,245.71. To satisfy the debt, Magdalena bound herself "to pay in full the judgment debt out of her retirement benefits[.]"4 Payment of the debt shall be made one (1) week after Magdalena has received her retirement benefits from the Government Service Insurance System (GSIS). In case of default, the debt may be executed against any of the properties of the spouses Cortez that is subject to execution, upon motion of the spouses Serfino.5 After finding that the compromise agreement was not contrary to law, morals, good custom, public order or public policy, the RTC approved the entirety of the parties agreement and issued a compromise judgment based thereon.6 The debt was later reduced to P 155,000.00 from P 197,000.00 (including interest), with the promise that the spouses Cortez would pay in full the judgment debt not later than April 23, 1996. 7 No payment was made as promised. Instead, Godfrey discovered that Magdalena deposited her retirement benefits in the savings account of her daughter-in-law, Grace Cortez, with the respondent, Far East Bank and Trust Company, Inc. (FEBTC). As of April 23, 1996, Graces savings account with FEBTC amounted to P245,830.37, the entire deposit coming from Magdalenas retirement benefits.8 That same day, the spouses Serfinos counsel sent two letters to FEBTC informing the bank that the deposit in Graces name was owned by the spouses Serfino by virtue of an assignment made in their favor by the spouses Cortez. The letter requested FEBTC to prevent the delivery of the deposit to either Grace or the spouses Cortez until its actual ownership has been resolved in court. On April 25, 1996, the spouses Serfino instituted Civil Case No. 95- 9344 against the spouses Cortez, Grace and her husband, Dante Cortez, and FEBTC for the recovery of money on deposit and the payment of damages, with a prayer for preliminary attachment. On April 26, 1996, Grace withdrew P 150,000.00 from her savings account with FEBTC. On the same day, the spouses Serfino sent another letter to FEBTC informing it of the pending action; attached to the letter was a copy of the complaint filed as Civil Case No. 95-9344. During the pendency of Civil Case No. 95-9344, the spouses Cortez manifested that they were turning over the balance of the deposit in FEBTC (amounting to P 54,534.00) to the spouses Serfino as partial payment of their obligation under the compromise judgment. The RTC issued an order dated July 30, 1997, authorizing FEBTC to turn over the balance of the deposit to the spouses Serfino. On February 23, 2006, the RTC issued the assailed decision (a) finding the spouses Cortez, Grace and Dante liable for fraudulently diverting the amount due the spouses Serfino, but (b) absolving FEBTC from any liability for allowing Grace to withdraw the deposit. The RTC declared that FEBTC was not a party to the compromise judgment; FEBTC was thus not

chargeable with notice of the parties agreement, as there was no valid court order or processes requiring it to withhold payment of the deposit. Given the nature of bank deposits, FEBTC was primarily bound by its contract of loan with Grace. There was, therefore, no legal justification for the bank to refuse payment of the account, notwithstanding the claim of the spouses Serfino as stated in their three letters. THE PARTIES ARGUMENTS The spouses Serfino appealed the RTCs ruling absolving FEBTC from liability for allowing the withdrawal of the deposit. They allege that the RTC cited no legal basis for declaring that only a court order or process can justify the withholding of the deposit in Graces name. Since FEBTC was informed of their adverse claim after they sent three letters, they claim that: Upon receipt of a notice of adverse claim in proper form, it becomes the duty of the bank to: 1. Withhold payment of the deposit until there is a reasonable opportunity to institute legal proceedings to contest ownership; and 2) give prompt notice of the adverse claim to the depositor. The bank may be held liable to the adverse claimant if it disregards the notice of adverse claim and pays the depositor. When the bank has reasonable notice of a bona fide claim that money deposited with it is the property of another than the depositor, it should withhold payment until there is reasonable opportunity to institute legal proceedings to contest the ownership. 9 (emphases and underscoring supplied) Aside from the three letters, FEBTC should be deemed bound by the compromise judgment, since Article 1625 of the Civil Code states that an assignment of credit binds third persons if it appears in a public instrument.10 They conclude that FEBTC, having been notified of their adverse claim, should not have allowed Grace to withdraw the deposit. While they acknowledged that bank deposits are governed by the Civil Code provisions on loan, the spouses Serfino allege that the provisions on voluntary deposits should apply by analogy in this case, particularly Article 1988 of the Civil Code, which states: Article 1988. The thing deposited must be returned to the depositor upon demand, even though a specified period or time for such return may have been fixed. This provision shall not apply when the thing is judicially attached while in the depositarys possession, or should he have been notified of the opposition of a third person to the return or the removal of the thing deposited. In these cases, the depositary must immediately inform the depositor of the attachment or opposition. Based on Article 1988 of the Civil Code, the depository is not obliged to return the thing to the depositor if notified of a third partys adverse claim. By allowing Grace to withdraw the deposit that is due them under the compromise judgment, the spouses Serfino claim that FEBTC committed an actionable wrong that entitles them to the payment of actual and moral damages.

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FEBTC, on the other hand, insists on the correctness of the RTC ruling. It claims that it is not bound by the compromise judgment, but only by its contract of loan with its depositor. As a loan, the bank deposit is owned by the bank; hence, the spouses Serfinos claim of ownership over it is erroneous. Based on these arguments, the case essentially involves a determination of the obligation of banks to a third party who claims rights over a bank deposit standing in the name of another. THE COURTS RULING We find the petition unmeritorious and see no reason to reverse the RTCs ruling. Claim for actual damages not meritorious because there could be no pecuniary loss that should be compensated if there was no assignment of credit The spouses Serfinos claim for damages against FEBTC is premised on their claim of ownership of the deposit with FEBTC. The deposit consists of Magdalenas retirement benefi ts, which the spouses Serfino claim to have been assigned to them under the compromise judgment. That the retirement benefits were deposited in Graces savings account with FEBTC supposedly did not divest them of ownership of the amount, as "the money already belongs to the [spouses Serfino] having been absolutely assigned to them and constructively delivered by virtue of the x x x public instrument[.]"11 By virtue of the assignment of credit, the spouses Serfino claim ownership of the deposit, and they posit that FEBTC was duty bound to protect their right by preventing the withdrawal of the deposit since the bank had been notified of the assignment and of their claim. We find no basis to support the spouses Serfinos claim of ownership of the deposit.

to pay in full the judgment debt out of her retirement benefits as Local [T]reasury Operation Officer in the City of Bacolod, Philippines, upon which full payment, the plaintiffs waive, abandon and relinquish absolutely any of their claims for attorneys fees stipulated in the Promissory Note (Annex "A" to the Complaint).15 [emphasis ours] Only when Magdalena has received and turned over to the spouses Serfino the portion of her retirement benefits corresponding to the debt due would the debt be deemed paid. In Aquitey v. Tibong,16 the issue raised was whether the obligation to pay the loan was extinguished by the execution of the deeds of assignment. The Court ruled in the affirmative, given that, in the deeds involved, the respondent (the debtor) assigned to the petitioner (the creditor) her credits "to make good" the balance of her obligation; the parties agreed to relieve the respondent of her obligation to pay the balance of her account, and for the petitioner to collect the same from the respondents debtors.17 The Court concluded that the respondents obligation to pay the balance of her accounts with the petitioner was extinguished, pro tanto, by the deeds of assignment of credit executed by the respondent in favor of the petitioner. 18 In the present case, the judgment debt was not extinguished by the mere designation in the compromise judgment of Magdalenas retirement benefits as the fund from which payment shall be sourced. That the compromise agreement authorizes recourse in case of default on other executable properties of the spouses Cortez, to satisfy the judgment debt, further supports our conclusion that there was no assignment of Magdalenas credit with the GSIS that would have extinguished the obligation. The compromise judgment in this case also did not give the supposed assignees, the spouses Serfino, the power to enforce Magdalenas credit against the GSIS. In fact, the spouses Serfino are prohibited from enforcing their claim until after the lapse of one (1) week from Magdalenas receipt of her retirement benefits:

(d) That the plaintiffs shall refrain from having the judgment based upon this Compromise Agreement executed until after one (1) week from receipt by the defendant, Magdalena Cortez of her retirement benefits from the [GSIS] but fails to pay within the said period the defendants judgment debt in this case, in which case [this] Compromise Agreement [may be] executed upon "An assignment of credit is an agreement by virtue of which the owner of a credit, known as the 19 assignor, by a legal cause, such as sale, dation in payment, exchange or donation, and without the any property of the defendants that are subject to execution upon motion by the plaintiffs. consent of the debtor, transfers his credit and accessory rights to another, known as the assignee, who acquires the power to enforce it to the same extent as the assignor could enforce it against An assignment of credit not only entitles the assignee to the credit itself, but also gives him the the debtor. It may be in the form of sale, but at times it may constitute a dation in payment, such power to enforce it as against the debtor of the assignor. as when a debtor, in order to obtain a release from his debt, assigns to his creditor a credit 12 he has against a third person." As a dation in payment, the assignment of credit operates as a mode of extinguishing the obligation;13 the delivery and transmission of ownership of a thing Since no valid assignment of credit took place, the spouses Serfino cannot validly claim ownership of the retirement benefits that were deposited with FEBTC. Without ownership rights over the (in this case, the credit due from a third person) by the debtor to the creditor is accepted as the amount, they suffered no pecuniary loss that has to be compensated by actual damages. equivalent of the performance of the obligation.14 The grant of actual damages presupposes that the claimant suffered a duly proven pecuniary loss.20 The terms of the compromise judgment, however, did not convey an intent to equate the assignment of Magdalenas retirement benefits (the credit) as the equival ent of the payment of the debt due the spouses Serfino (the obligation). There was actually no assignment of credit; if at Claim for moral damages not all, the compromise judgment merely identified the fund from which payment for the meritorious because no duty exists judgment debt would be sourced: on the part of the bank to protect interest of third person claiming deposit in the name of another (c) That before the plaintiffs file a motion for execution of the decision or order based [on this] Compromise Agreement, the defendant, Magdalena Cortez undertake[s] and bind[s] herself

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Under Article 2219 of the Civil Code, moral damages are recoverable for acts referred to in Article COMMISSION ON ELECTIONS, LUIS M. BAUTISTA, ROBELITO V. PICAR and WILMA P. PAGADUAN,Respondents. 21 of the Civil Code.21 Article 21 of the Civil Code, in conjunction with Article 19 of the Civil Code, is part of the cause of action known in this jurisdiction as "abuse of rights." The elements of abuse of rights are: (a) there is a legal right or duty; (b) exercised in bad faith; and (c) for the sole intent DECISION of prejudicing or injuring another.1wphi1 REYES, J.: The spouses Serfino invoke American common law that imposes a duty upon a bank receiving a notice of adverse claim to the fund in a depositors account to freeze the account for a reasonable length of time, sufficient to allow the adverse claimant to institute legal Failure to renounce foreign citizenship in accordance with the exact tenor of Section 5(2) of proceedings to enforce his right to the fund.22 In other words, the bank has a duty not to Republic Act (R.A.) No. 9225 renders a dual citizen ineligible to run for and thus hold any elective release the deposits unreasonably early after a third party makes known his adverse claim to the public office. bank deposit. Acknowledging that no such duty is imposed by law in this jurisdiction, the spouses Serfino ask the Court to adopt this foreign rule.23 The Case To adopt the foreign rule, however, goes beyond the power of this Court to promulgate rules governing pleading, practice and procedure in all courts.24 The rule reflects a matter of policy that is better addressed by the other branches of government, particularly, the Bangko Sentral ng Pilipinas, which is the agency that supervises the operations and activities of banks, and which has the power to issue "rules of conduct or the establishment of standards of operation for uniform application to all institutions or functions covered[.]" 25 To adopt this rule will have significant implications on the banking industry and practices, as the American experience has shown. Recognizing that the rule imposing duty on banks to freeze the deposit upon notice of adverse claim adopts a policy adverse to the bank and its functions, and opens it to liability to both the depositor and the adverse claimant,26 many American states have since adopted adverse claim statutes that shifted or, at least, equalized the burden. Essentially, these statutes do not impose a duty on banks to freeze the deposit upon a mere notice of adverse claim; they first require either a court order or an indemnity bond.27 In the absence of a law or a rule binding on the Court, it has no option but to uphold the existing policy that recognizes the fiduciary nature of banking. It likewise rejects the adoption of a judiciallyimposed rule giving third parties with unverified claims against the deposit of another a better right over the deposit. As current laws provide, the banks contractual relations are with its depositor, not with the third party;28 "a bank is under obligation to treat the accounts of its depositors with meticulous care and always to have in mind the fiduciary nature of its relationship with them." 29 In the absence of any positive duty of the bank to an adverse claimant, there could be no breach that entitles the latter to moral damages. WHEREFORE, in view of the foregoing, the petition for review on certiorari is DENIED, and the decision dated February 23, 2006 of the Regional Trial Court of Bacolod City, Branch 41, in Civil Case No. 95-9344 isAFFIRMED. Costs against the petitioners. SO ORDERED. EN BANC G.R. No. 198742 August 10, 2012 At bar is a special civil action for certiorari1 under Rule 64 of the Rules of Court seeking to nullify Resolution2dated September 6, 2011 of the Commission on Elections (COMELEC) en banc in EAC (AE) No. A-44-2010. The assailed resolution (a) reversed the Order3 dated November 30, 2010 of COMELEC Second Division dismissing petitioners appeal; and (b) affirmed the consolidated Decision4 dated October 22, 2010 of the Regional Trial Court (RTC), Bauang, La Union, Branch 33, declaring petitioner Teodora Sobejana-Condon (petitioner) disqualified and ineligible to her position as Vice-Mayor of Caba, La Union. The Undisputed Facts The petitioner is a natural-born Filipino citizen having been born of Filipino parents on August 8, 1944. On December 13, 1984, she became a naturalized Australian citizen owing to her marriage to a certain Kevin Thomas Condon. On December 2, 2005, she filed an application to re-acquire Philippine citizenship before the Philippine Embassy in Canberra, Australia pursuant to Section 3 of R.A. No. 9225 otherwise known as the "Citizenship Retention and Re-Acquisition Act of 2003."5 The application was approved and the petitioner took her oath of allegiance to the Republic of the Philippines on December 5, 2005. On September 18, 2006, the petitioner filed an unsworn Declaration of Renunciation of Australian Citizenshipbefore the Department of Immigration and Indigenous Affairs, Canberra, Australia, which in turn issued the Order dated September 27, 2006 certifying that she has ceased to be an Australian citizen.6 The petitioner ran for Mayor in her hometown of Caba, La Union in the 2007 elections. She lost in her bid. She again sought elective office during the May 10, 2010 elections this time for the position of Vice-Mayor. She obtained the highest numbers of votes and was proclaimed as the winning candidate. She took her oath of office on May 13, 2010. Soon thereafter, private respondents Robelito V. Picar, Wilma P. Pagaduan7 and Luis M. Bautista,8 (private respondents) all registered voters of Caba, La Union, filed separate petitions for quo warranto questioning the petitioners eligibility before the RTC. The petitions similarly sou ght the petitioners disqualification from holding her elective post on the ground that she is a dual citizen and that she failed to execute a "personal and sworn renunciation of any and all foreign

TEODORA SOBEJANA-CONDON, Petitioner, vs.

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citizenship before any public officer authorized to administer an oath" as imposed by Section 5(2) of R.A. No. 9225. The petitioner denied being a dual citizen and averred that since September 27, 2006, she ceased to be an Australian citizen. She claimed that the Declaration of Renunciation of Australian Citizenship she executed in Australia sufficiently complied with Section 5(2), R.A. No. 9225 and that her act of running for public office is a clear abandonment of her Australian citizenship. Ruling of the RTC In its consolidated Decision dated October 22, 2010, the trial court held that the petitioners failure to comply with Section 5(2) of R.A. No. 9225 rendered her ineligible to run and hold public office. As admitted by the petitioner herself during trial, the personal declaration of renunciation she filed in Australia was not under oath. The law clearly mandates that the document containing the renunciation of foreign citizenship must be sworn before any public officer authorized to administer oath. Consequently, the RTCs decision disposed as follows: WHEREFORE, premises considered, the Court renders judgment in FAVOR of [private respondents] and AGAINST (petitioner): 1) DECLARING [petitioner] TEODORA SOBEJANA-CONDON, disqualified and ineligible to hold the office of Vice-Mayor of Caba, La Union; 2) NULLIFYING her proclamation as the winning candidate for Vice-Mayor of said municipality; and 3) DECLARING the position of Vice-Mayor in said municipality vacant.

3. To GRANT the Motion for Execution filed on November 12, 2010. SO ORDERED.12 (Emphasis supplied) Hence, the present petition ascribing grave abuse of discretion to the COMELEC en banc. The Petitioners Arguments The petitioner contends that since she ceased to be an Australian citizen on September 27, 2006, she no longer held dual citizenship and was only a Filipino citizen when she filed her certificate of candidacy as early as the 2007 elections. Hence, the "personal and sworn renunciation of foreign citizenship" imposed by Section 5(2) of R.A. No. 9225 to dual citizens seeking elective office does not apply to her. She further argues that a sworn renunciation is a mere formal and not a mandatory requirement. In support thereof, she cites portions of the Journal of the House of Representatives dated June 2 to 5, 2003 containing the sponsorship speech for House Bill (H.B.) No. 4720, the precursor of R.A. No. 9225. She claims that the private respondents are estopped from questioning her eligibility since they failed to do so when she filed certificates of candidacy for the 2007 and 2010 elections. Lastly, she disputes the power of the COMELEC en banc to: (a) take cognizance of the substantive merits of her appeal instead of remanding the same to the COMELEC Second Division for the continuation of the appeal proceedings; and (b) allow the execution pending appeal of the RTCs judgment. The Issues

SO ORDERED.9 Ruling of the COMELEC The petitioner appealed to the COMELEC but the appeal was dismissed by the Second Division in its Order10dated November 30, 2010 for failure to pay the docket fees within the prescribed period. On motion for reconsideration, the appeal was reinstated by the COMELEC en banc in its Resolution11 dated September 6, 2011. In the same issuance, the substantive merits of the appeal were given due course. The COMELEC en bancconcurred with the findings and conclusions of the RTC; it also granted the Motion for Execution Pending Appealfiled by the private respondents. The decretal portion of the resolution reads: WHEREFORE, premises considered the Commission RESOLVED as it hereby RESOLVES as follows: 1. To DISMISS the instant appeal for lack of merit; 2. To AFFIRM the DECISION dated 22 October 2010 of the court a quo; and Posed for resolution are the following issues: I) Whether the COMELEC en banc may resolve the merits of an appeal after ruling on its reinstatement; II) Whether the COMELEC en banc may order the execution of a judgment rendered by a trial court in an election case; III) Whether the private respondents are barred from questioning the qualifications of the petitioner; and IV) For purposes of determining the petitioners eligibility to run for public office, whether the "sworn renunciation of foreign citizenship" in Section 5(2) of R.A. No. 9225 is a mere pro-forma requirement. The Courts Ruling I. An appeal may be simultaneously reinstated and definitively resolved by the COMELEC en banc in a resolution disposing of a motion for reconsideration. The power to decide motions for reconsideration in election cases is arrogated unto the COMELEC en banc by Section 3, Article IX-C of the Constitution, viz:

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Sec. 3. The Commission on Elections may sit en banc or in two divisions, and shall promulgate its rules of procedure in order to expedite disposition of election cases, including pre-proclamation controversies. All such election cases shall be heard and decided in division, provided that motions for reconsideration of decisions shall be decided by the Commission en banc. A complementary provision is present in Section 5(c), Rule 3 of the COMELEC Rules of Procedure, to wit: Any motion to reconsider a decision, resolution, order or ruling of a Division shall be resolved by the Commission en banc except motions on interlocutory orders of the division which shall be resolved by the division which issued the order. Considering that the above cited provisos do not set any limits to the COMELEC en bancs prerogative in resolving a motion for reconsideration, there is nothing to prevent the body from directly adjudicating the substantive merits of an appeal after ruling for its reinstatement instead of remanding the same to the division that initially dismissed it. We thus see no impropriety much more grave abuse of discretion on the part of the COMELEC en banc when it proceeded to decide the substantive merits of the petitioners appeal after ruling for its reinstatement. Further, records show that, in her motion for reconsideration before the COMELEC en banc, the petitioner not only proffered arguments on the issue on docket fees but also on the issue of her eligibility. She even filed a supplemental motion for reconsideration attaching therewith supporting documents13 to her contention that she is no longer an Australian citizen. The petitioner, after obtaining an unfavorable decision, cannot be permitted to disavow the en bancs exercise of discretion on the substantial merits of her appeal when she herself invoked the same in the first place. The fact that the COMELEC en banc had remanded similar appeals to the Division that initially dismissed them cannot serve as a precedent to the disposition of the petitioners appe al. A decision or resolution of any adjudicating body can be disposed in several ways. To sustain petitioners argument would be virtually putting a straightjacket on the COMELEC en bancs adjudicatory powers. More significantly, the remand of the appeal to the COMELEC Second Division would be unnecessarily circuitous and repugnant to the rule on preferential disposition of quo warranto cases espoused in Rule 36, Section 15 of the COMELEC Rules of Procedure. 14 II. The COMELEC en banc has the power to order discretionary execution of judgment. We cannot subscribe to petitioners submission that the COMELEC en banc has no power to order the issuance of a writ of execution and that such function belongs only to the court of origin. There is no reason to dispute the COMELECs authority to order discretionary execution of judgment in view of the fact that the suppletory application of the Rules of Court is expressly sanctioned by Section 1, Rule 41 of the COMELEC Rules of Procedure. 15

Under Section 2, Rule 39 of the Rules of Court, execution pending appeal may be issued by an appellate court after the trial court has lost jurisdiction. In Batul v. Bayron,16 we stressed the import of the provision vis--vis election cases when we held that judgments in election cases which may be executed pending appeal includes those decided by trial courts and those rendered by the COMELEC whether in the exercise of its original or appellate jurisdiction. III. Private respondents are not estopped from questioning petitioners eligibility to hold public office. The fact that the petitioners qualifications were not questioned when she filed certificates of candidacy for 2007 and 2010 elections cannot operate as an estoppel to the petition for quo warranto before the RTC. Under the Batas Pambansa Bilang 881 (Omnibus Election Code), there are two instances where a petition questioning the qualifications of a registered candidate to run for the office for which his certificate of candidacy was filed can be raised, to wit: (1) Before election, pursuant to Section 78 thereof which provides that: Sec. 78. Petition to deny due course or to cancel a certificate of candidacy. A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by any person exclusively on the ground that any material representation contained therein as required under Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days before the election; and (2) After election, pursuant to Section 253 thereof, viz: Sec. 253. Petition for quo warranto. Any voter contesting the election of any Member of the Batasang Pambansa, regional, provincial, or city officer on the ground of ineligibility or of disloyalty to the Republic of the Philippines shall file a sworn petition for quo warranto with the Commission within ten days after the proclamation of the results of the election. (Emphasis ours) Hence, if a person qualified to file a petition to disqualify a certain candidate fails to file the petition within the twenty-five (25)-day period prescribed by Section 78 of the Omnibus Election Code for whatever reasons, the elections laws do not leave him completely helpless as he has another chance to raise the disqualification of the candidate by filing a petition for quo warranto within ten (10) days from the proclamation of the results of the election, as provided under Section 253 of the Omnibus Election Code.17 The above remedies were both available to the private respondents and their failure to utilize Section 78 of the Omnibus Election Code cannot serve to bar them should they opt to file, as they did so file, a quo warranto petition under Section 253.

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IV. Petitioner is disqualified from running for elective office for failure to renounce her Australian citizenship in accordance with Section 5(2) of R.A. No. 9225. R.A. No. 9225 allows the retention and re-acquisition of Filipino citizenship for natural-born citizens who have lost their Philippine citizenship18 by taking an oath of allegiance to the Republic, thus: Section 3. Retention of Philippine Citizenship. Any provision of law to the contrary notwithstanding, natural-born citizens of the Philippines who have lost their Philippine citizenship by reason of their naturalization as citizens of a foreign country are hereby deemed to have reacquired Philippine citizenship upon taking the following oath of allegiance to the Republic: "I, _____________________, solemnly swear (or affirm) that I will support and defend the Constitution of the Republic of the Philippines and obey the laws and legal orders promulgated by the duly constituted authorities of the Philippines; and I hereby declare that I recognize and accept the supreme authority of the Philippines and will maintain true faith and allegiance thereto; and that I imposed this obligation upon myself voluntarily without mental reservation or purpose of evasion." Natural-born citizens of the Philippines who, after the effectivity of this Act, become citizens of a foreign country shall retain their Philippine citizenship upon taking the aforesaid oath. The oath is an abbreviated repatriation process that restores ones Filipino citizenship and all civil and political rights and obligations concomitant therewith, subject to certain conditions imposed in Section 5, viz: Sec. 5. Civil and Political Rights and Liabilities. Those who retain or re-acquire Philippine citizenship under this Act shall enjoy full civil and political rights and be subject to all attendant liabilities and responsibilities under existing laws of the Philippines and the following conditions: (1) Those intending to exercise their right of suffrage must meet the requirements under Section 1, Article V of the Constitution, Republic Act No. 9189, otherwise known as "The Overseas Absentee Voting Act of 2003" and other existing laws; (2) Those seeking elective public office in the Philippines shall meet the qualification for holding such public office as required by the Constitution and existing laws and, at the time of the filing of the certificate of candidacy, make a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath; (3) Those appointed to any public office shall subscribe and swear to an oath of allegiance to the Republic of the Philippines and its duly constituted authorities prior to their assumption of office: Provided, That they renounce their oath of allegiance to the country where they took that oath; (4) Those intending to practice their profession in the Philippines shall apply with the proper authority for a license or permit to engage in such practice; and

(5) That right to vote or be elected or appointed to any public office in the Philippines cannot be exercised by, or extended to, those who: (a) are candidates for or are occupying any public office in the country of which they are naturalized citizens; and/or (b) are in active service as commissioned or non-commissioned officers in the armed forces of the country which they are naturalized citizens. (Emphasis ours) Under the provisions of the aforementioned law, the petitioner has validly re-acquired her Filipino citizenship when she took an Oath of Allegiance to the Republic of the Philippines on December 5, 2005. At that point, she held dual citizenship, i.e., Australian and Philippine. On September 18, 2006, or a year before she initially sought elective public office, she filed a renunciation of Australian citizenship in Canberra, Australia. Admittedly, however, the same was not under oath contrary to the exact mandate of Section 5(2) that the renunciation of foreign citizenship must be sworn before an officer authorized to administer oath. To obviate the fatal consequence of her inutile renunciation, the petitioner pleads the Court to interpret the "sworn renunciation of any and all foreign citizenship" in Section 5(2) to be a mere pro forma requirement in conformity with the intent of the Legislature. She anchors her submission on the statement made by Representative Javier during the floor deliberations on H.B. No. 4720, the precursor of R.A. No. 9225. At the outset, it bears stressing that the Courts duty to interpret the law according to its true intent is exercised only when the law is ambiguous or of doubtful meaning. The first and fundamental duty of the Court is to apply the law. As such, when the law is clear and free from any doubt, there is no occasion for construction or interpretation; there is only room for application.19 Section 5(2) of R.A. No. 9225 is one such instance. Ambiguity is a condition of admitting two or more meanings, of being understood in more than one way, or of referring to two or more things at the same time. For a statute to be considered ambiguous, it must admit of two or more possible meanings.20 The language of Section 5(2) is free from any ambiguity. In Lopez v. COMELEC,21 we declared its categorical and single meaning: a Filipino American or any dual citizen cannot run for any elective public position in the Philippines unless he or she personally swears to a renunciation of all foreign citizenship at the time of filing the certificate of candidacy. We also expounded on the form of the renunciation and held that to be valid, the renunciation must be contained in an affidavit duly executed before an officer of the law who is authorized to administer an oath stating in clear and unequivocal terms that affiant is renouncing all foreign citizenship. The same meaning was emphasized in Jacot v. Dal,22 when we held that Filipinos re-acquiring or retaining their Philippine citizenship under R.A. No. 9225 must explicitly renounce their foreign citizenship if they wish to run for elective posts in the Philippines, thus: The law categorically requires persons seeking elective public office, who either retained their Philippine citizenship or those who reacquired it, to make a personal and sworn renunciation of

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any and all foreign citizenship before a public officer authorized to administer an oath simultaneous with or before the filing of the certificate of candidacy. Hence, Section 5(2) of Republic Act No. 9225 compels natural-born Filipinos, who have been naturalized as citizens of a foreign country, but who reacquired or retained their Philippine citizenship (1) to take the oath of allegiance under Section 3 of Republic Act No. 9225, and (2) for those seeking elective public offices in the Philippines, to additionally execute a personal and sworn renunciation of any and all foreign citizenship before an authorized public officer prior or simultaneous to the filing of their certificates of candidacy, to qualify as candidates in Philippine elections. Clearly Section 5(2) of Republic Act No. 9225 (on the making of a personal and sworn renunciation of any and all foreign citizenship) requires of the Filipinos availing themselves of the benefits under the said Act to accomplish an undertaking other than that which they have presumably complied with under Section 3 thereof (oath of allegiance to the Republic of the Philippines). This is made clear in the discussion of the Bicameral Conference Committee on Disagreeing Provisions of House Bill No. 4720 and Senate Bill No. 2130 held on 18 August 2003 (precursors of Republic Act No. 9225), where the Hon. Chairman Franklin Drilon and Hon. Representative Arthur Defensor explained to Hon. Representative Exequiel Javier that the oath of allegiance is different from the renunciation of foreign citizenship; xxxx The intent of the legislators was not only for Filipinos reacquiring or retaining their Philippine citizenship under Republic Act No. 9225 to take their oath of allegiance to the Republic of the Philippines, but also to explicitly renounce their foreign citizenship if they wish to run for elective posts in the Philippines. To qualify as a candidate in Philippine elections, Filipinos must only have one citizenship, namely, Philippine citizenship.23 (Citation omitted and italics and underlining ours) Hence, in De Guzman v. COMELEC,24 we declared petitioner therein to be disqualified from running for the position of vice-mayor for his failure to make a personal and sworn renunciation of his American citizenship. We find no reason to depart from the mandatory nature infused by the above rulings to the phrase "sworn renunciation". The language of the provision is plain and unambiguous. It expresses a single, definite, and sensible meaning and must thus be read literally.25 The foreign citizenship must be formally rejected through an affidavit duly sworn before an officer authorized to administer oath.

Rep. Javier subsequently adverted to Section 5 of the Bill which provides that natural-born Filipinos who have dual citizenship shall continue to enjoy full civil and political rights. This being the case, he sought clarification as to whether they can indeed run for public office provided that they renounce their foreign citizenship. Rep. Libanan replied in the affirmative, citing that these citizens will only have to make a personal and sworn renunciation of foreign citizenship before any authorized public officer. Rep. Javier sought further clarification on this matter, citing that while the Bill provides them with full civil and political rights as Filipino citizens, the measure also discriminates against them since they are required to make a sworn renunciation of their other foreign citizenship if and when they run for public office. He thereafter proposed to delete this particular provision. In his rejoinder, Rep. Libanan explained that this serves to erase all doubts regarding any issues that might be raised pertaining to the citizenship of any candidate. He subsequently cited the case of Afroyim vs. Rusk, wherein the United States considered a naturalized American still as an American citizen even when he cast his vote in Israel during one of its elections. Rep. Javier however pointed out that the matter of voting is different because in voting, one is not required to renounce his foreign citizenship. He pointed out that under the Bill, Filipinos who run for public office must renounce their foreign citizenship. He pointed out further that this is a contradiction in the Bill. Thereafter, Rep. Javier inquired whether Filipino citizens who had acquired foreign citizenship and are now entitled to reacquire their Filipino citizenship will be considered as natural-born citizens. As such, he likewise inquired whether they will also be considered qualified to run for the highest elective positions in the country. Rep. Libanan replied in the affirmative, citing that the only requirement is that they make a sworn renunciation of their foreign citizenship and that they comply with the residency and registration requirements as provided for in the Constitution. Whereupon, Rep. Javier noted that under the Constitution, natural-born citizens are those who are citizens at the time of birth without having to perform an act to complete or perfect his/her citizenship. Rep. Libanan agreed therewith, citing that this is the reason why the Bill seeks the repeal of CA No. 63. The repeal, he said, would help

It is conclusively presumed to be the meaning that the Legislature has intended to convey.26 Even a resort to the Journal of the House of Representatives invoked by the petitioner leads to the same Filipino citizens who acquired foreign citizenship to retain their citizenship. With regard then to inference, viz: Section 5 of the Bill, he explained that the Committee had decided to include this provision because Section 18, Article XI of the Constitution provides for the accountability of public officers. INTERPELLATION OF REP. JAVIER Rep. Javier initially inquired whether under the Bill, dual citizenship is only limited to natural-born Filipinos and not to naturalized Filipinos. Rep. Libanan replied in the affirmative. In his rejoinder, Rep. Javier maintained that in this case, the sworn renunciation of a foreign citizenship will only become a pro forma requirement. On further queries of Rep. Javier, Rep. Libanan affirmed that natural-born Filipino citizens who became foreign citizens and who have reacquired their Filipino citizenship under the Bill will be considered as natural-born citizens, and therefore qualified to run for the presidency, the vice-

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presidency or for a seat in Congress. He also agreed with the observation of Rep. Javier that a natural-born citizen is one who is a citizen of the country at the time of birth. He also explained that the Bill will, in effect, return to a Filipino citizen who has acquired foreign citizenship, the status of being a natural-born citizen effective at the time he lost his Filipino citizenship. As a rejoinder, Rep. Javier opined that doing so would be discriminating against naturalized Filipino citizens and Filipino citizens by election who are all disqualified to run for certain public offices. He then suggested that the Bill be amended by not considering as natural-born citizens those Filipinos who had renounced their Filipino citizenship and acquired foreign citizenship. He said that they should be considered as repatriated citizens. In reply, Rep. Libanan assured Rep. Javier that the Committee will take note of the latters comments on the matter. He however stressed that after a lengthy deliberation on the subject, the Committees on Justice, and Foreign Affairs had decided to revert back to the status of being natural-born citizens those natural-born Filipino citizens who had acquired foreign citizenship but now wished to reacquire their Filipino citizenship. Rep. Javier then explained that a Filipina who loses her Filipino citizenship by virtue of her marriage to a foreigner can regain her repatriated Filipino citizenship, upon the death of her husband, by simply taking her oath before the Department of Justice (DOJ). Rep. Javier said that he does not oppose the Bill but only wants to be fair to other Filipino citizens who are not considered natural-born. He reiterated that natural-born Filipino citizens who had renounced their citizenship by pledging allegiance to another sovereignty should not be allowed to revert back to their status of being natural-born citizens once they decide to regain their Filipino citizenship. He underscored that this will in a way allow such Filipinos to enjoy dual citizenship. On whether the Sponsors will agree to an amendment incorporating the position of Rep. Javier, Rep. Libanan stated that this will defeat the purpose of the Bill. Rep. Javier disagreed therewith, adding that natural-born Filipino citizens who acquired foreign citizenships and later decided to regain their Filipino citizenship, will be considered as repatriated citizens. Rep. Libanan cited the case of Bengzon vs. HRET wherein the Supreme Court had ruled that only naturalized Filipino citizens are not considered as natural-born citizens. In reaction, Rep. Javier clarified that only citizens by election or those whose mothers are Filipino citizens under the 1935 Constitution and who elected Filipino citizenship upon reaching the age of maturity, are not deemed as natural-born citizens. In response, Rep. Libanan maintained that in the Bengzon case, repatriation results in the recovery of ones original nationality and only naturalized citizens are not considered as natural born citizens. On whether the Sponsors would agree to not giving back the status of being natural-born citizens to natural-born Filipino citizens who acquired foreign citizenship, Rep. Libanan remarked that the Body in plenary session will decide on the matter.27

The petitioner obviously espouses an isolated reading of Representative Javiers statement; she conveniently disregards the preceding and succeeding discussions in the records. The above-quoted excerpts of the legislative record show that Representative Javiers statement ought to be understood within the context of the issue then being discussed, that is whether former natural-born citizens who re-acquire their Filipino citizenship under the proposed law will revert to their original status as natural-born citizens and thus be qualified to run for government positions reserved only to natural-born Filipinos, i.e. President, Vice-President and Members of the Congress. It was Representative Javiers position that they should be considered as repatriated Filipin os and not as natural-born citizens since they will have to execute a personal and sworn renunciation of foreign citizenship. Natural-born citizens are those who need not perform an act to perfect their citizenship. Representative Libanan, however, maintained that they will revert to their original status as natural-born citizens. To reconcile the renunciation imposed by Section 5(2) with the principle that natural-born citizens are those who need not perform any act to perfect their citizenship, Representative Javier suggested that the sworn renunciation of foreign citizenship be considered as a mere pro forma requirement. Petitioners argument, therefore, loses its point. The "sworn renunciation of foreign citizenship" must be deemed a formal requirement only with respect to the re-acquisition of ones status as a natural-born Filipino so as to override the effect of the principle that natural-born citizens need not perform any act to perfect their citizenship. Never was it mentioned or even alluded to that, as the petitioner wants this Court to believe, those who re-acquire their Filipino citizenship and thereafter run for public office has the option of executing an unsworn affidavit of renunciation. It is also palpable in the above records that Section 5 was intended to complement Section 18, Article XI of the Constitution on public officers primary accountability of allegiance and loyalty, which provides: Sec. 18. Public officers and employees owe the State and this Constitution allegiance at all times and any public officer or employee who seeks to change his citizenship or acquire the status of an immigrant of another country during his tenure shall be dealt with by law. An oath is a solemn declaration, accompanied by a swearing to God or a revered person or thing, that ones statement is true or that one will be bound to a promise. The person making the oath implicitly invites punishment if the statement is untrue or the promise is broken. The legal effect of an oath is to subject the person to penalties for perjury if the testimony is false.28 Indeed, the solemn promise, and the risk of punishment attached to an oath ensures truthfulness to the prospective public officers abandonment of his adopted state and promise of absolute allegiance and loyalty to the Republic of the Philippines. To hold the oath to be a mere pro forma requirement is to say that it is only for ceremonial purposes; it would also accommodate a mere qualified or temporary allegiance from government officers when the Constitution and the legislature clearly demand otherwise. Petitioner contends that the Australian Citizenship Act of 1948, under which she is already deemed to have lost her citizenship, is entitled to judicial notice. We disagree.

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Foreign laws are not a matter of judicial notice. Like any other fact, they must be alleged and proven.29 To prove a foreign law, the party invoking it must present a copy thereof and comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads: Sec. 24. Proof of official record. The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice- consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. (Emphasis ours) Sec. 25. What attestation of copy must state. Whenever a copy of a document or record is attested for the purpose of the evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court. The Court has admitted certain exceptions to the above rules and held that the existence of a foreign law may also be established through: (1) a testimony under oath of an expert witness such as an attorney-at-law in the country where the foreign law operates wherein he quotes verbatim a section of the law and states that the same was in force at the time material to the facts at hand; and (2) likewise, in several naturalization cases, it was held by the Court that evidence of the law of a foreign country on reciprocity regarding the acquisition of citizenship, although not meeting the prescribed rule of practice, may be allowed and used as basis for favorable action, if, in the light of all the circumstances, the Court is "satisfied of the authenticity of the written proof offered." Thus, in a number of decisions, mere authentication of the Chinese Naturalization Law by the Chinese Consulate General of Manila was held to be a competent proof of that law.30 The petitioner failed to prove the Australian Citizenship Act of 1948 through any of the above methods.1wphi1 As uniformly observed by the RTC and COMELEC, the petitioner failed to show proof of the existence of the law during trial. Also, the letter issued by the Australian government showing that petitioner already renounced her Australian citizenship was unauthenticated hence, the courts a quo acted judiciously in disregarding the same.

The petitioners act of running for public office does not suffice to serve as an effective renunciation of her Australian citizenship. While this Court has previously declared that the filing by a person with dual citizenship of a certificate of candidacy is already considered a renunciation of foreign citizenship,33 such ruling was already adjudged superseded by the enactment of R.A. No. 9225 on August 29, 2003 which provides for the additional condition of a personal and sworn renunciation of foreign citizenship.34 The fact that petitioner won the elections can not cure the defect of her candidacy. Garnering the most number of votes does not validate the election of a disqualified candidate because the application of the constitutional and statutory provisions on disqualification is not a matter of popularity.35 In fine, R.A. No. 9225 categorically demands natural-born Filipinos who re-acquire their citizenship and seek elective office, to execute a personal and sworn renunciation of any and all foreign citizenships before an authorized public officer prior to or simultaneous to the filing of their certificates of candidacy, to qualify as candidates in Philippine elections. 36 The rule applies to all those who have re-acquired their Filipino citizenship, like petitioner, without regard as to whether they are still dual citizens or not. It is a pre-requisite imposed for the exercise of the right to run for public office. Stated differently, it is an additional qualification for elective office specific only to Filipino citizens who re-acquire their citizenship under Section 3 of R.A. No. 9225. It is the operative act that restores their right to run for public office. The petitioner's failure to comply therewith in accordance with the exact tenor of the law, rendered ineffectual the Declaration of Renunciation of Australian Citizenship she executed on September 18, 2006. As such, she is yet to regain her political right to seek elective office. Unless she executes a sworn renunciation of her Australian citizenship, she is ineligible to run for and hold any elective office in the Philippines. WHEREFORE, in view of all the foregoing, the petition is hereby DISMISSED. The Resolution dated September 6, 2011 of the Commission on Elections en bane in EAC (AE) No. A-44-2010 is AFFIRMED in toto. SO ORDERED.

SECOND DIVISION We are bound to arrive at a similar conclusion even if we were to admit as competent evidence the said letter in view of the photocopy of a Certificate of Authentication issued by Consular Section of G.R. No. 185582 February 29, 2012 the Philippine Embassy in Canberra, Australia attached to the petitioners motion for reconsideration. TUNA PROCESSING, INC., Petitioner, vs. We have stressed in Advocates and Adherents of Social Justice for School Teachers and Allied PHILIPPINE KINGFORD, INC., Respondent. 31 Workers (AASJS) Member v. Datumanong that the framers of R.A. No. 9225 did not intend the law to concern itself with the actual status of the other citizenship. DECISION This Court as the government branch tasked to apply the enactments of the legislature must do so conformably with the wisdom of the latter sans the interference of any foreign law. If we were to read the Australian Citizen Act of 1948 into the application and operation of R.A. No. 9225, we would be applying not what our legislative department has deemed wise to require. To do so would be a brazen encroachment upon the sovereign will and power of the people of this Republic.32 PEREZ, J.: Can a foreign corporation not licensed to do business in the Philippines, but which collects royalties from entities in the Philippines, sue here to enforce a foreign arbitral award?

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In this Petition for Review on Certiorari under Rule 45,1 petitioner Tuna Processing, Inc. (TPI), a foreign corporation not licensed to do business in the Philippines, prays that the Resolution2 dated 21 November 2008 of the Regional Trial Court (RTC) of Makati City be declared void and the case be remanded to the RTC for further proceedings. In the assailed Resolution, the RTC dismissed petitioners Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award3 against respondent Philippine Kingford, Inc. (Kingford), a corporation duly organized and existing under the laws of the Philippines,4 on the ground that petitioner lacked legal capacity to sue.5 The Antecedents On 14 January 2003, Kanemitsu Yamaoka (hereinafter referred to as the "licensor"), co-patentee of U.S. Patent No. 5,484,619, Philippine Letters Patent No. 31138, and Indonesian Patent No. ID0003911 (collectively referred to as the "Yamaoka Patent"), 6 and five (5) Philippine tuna processors, namely, Angel Seafood Corporation, East Asia Fish Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc., and respondent Kingford (collectively referred to as the "sponsors"/"licensees")7 entered into a Memorandum of Agreement (MOA),8 pertinent provisions of which read: 1. Background and objectives. The Licensor, co-owner of U.S.Patent No. 5,484,619, Philippine Patent No. 31138, and Indonesian Patent No. ID0003911 xxx wishes to form an alliance with Sponsors for purposes of enforcing his three aforementioned patents, granting licenses under those patents, and collecting royalties. The Sponsors wish to be licensed under the aforementioned patents in order to practice the processes claimed in those patents in the United States, the Philippines, and Indonesia, enforce those patents and collect royalties in conjunction with Licensor. xxx 4. Establishment of Tuna Processors, Inc. The parties hereto agree to the establishment of Tuna Processors, Inc. ("TPI"), a corporation established in the State of California, in order to implement the objectives of this Agreement. 5. Bank account. TPI shall open and maintain bank accounts in the United States, which will be used exclusively to deposit funds that it will collect and to disburse cash it will be obligated to spend in connection with the implementation of this Agreement. 6. Ownership of TPI. TPI shall be owned by the Sponsors and Licensor. Licensor shall be assigned one share of TPI for the purpose of being elected as member of the board of directors. The remaining shares of TPI shall be held by the Sponsors according to their respective equity shares. 9 xxx

Due to a series of events not mentioned in the petition, the licensees, including respondent Kingford, withdrew from petitioner TPI and correspondingly reneged on their obligations.12 Petitioner submitted the dispute for arbitration before the International Centre for Dispute Resolution in the State of California, United States and won the case against respondent.13 Pertinent portions of the award read: 13.1 Within thirty (30) days from the date of transmittal of this Award to the Parties, pursuant to the terms of this award, the total sum to be paid by RESPONDENT KINGFORD to CLAIMANT TPI, is the sum of ONE MILLION SEVEN HUNDRED FIFTY THOUSAND EIGHT HUNDRED FORTY SIX DOLLARS AND TEN CENTS ($1,750,846.10). (A) For breach of the MOA by not paying past due assessments, RESPONDENT KINGFORD shall payCLAIMANT the total sum of TWO HUNDRED TWENTY NINE THOUSAND THREE HUNDRED AND FIFTY FIVE DOLLARS AND NINETY CENTS ($229,355.90) which is 20% of MOA assessments since September 1, 2005[;] (B) For breach of the MOA in failing to cooperate with CLAIMANT TPI in fulfilling the objectives of the MOA, RESPONDENT KINGFORD shall pay CLAIMANT the total sum of TWO HUNDRED SEVENTY ONE THOUSAND FOUR HUNDRED NINETY DOLLARS AND TWENTY CENTS ($271,490.20)[;]14 and (C) For violation of THE LANHAM ACT and infringement of the YAMAOKA 619 PATENT, RESPONDENT KINGFORD shall pay CLAIMANT the total sum of ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS ($1,250,000.00). xxx xxx15 To enforce the award, petitioner TPI filed on 10 October 2007 a Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award before the RTC of Makati City. The petition was raffled to Branch 150 presided by Judge Elmo M. Alameda. At Branch 150, respondent Kingford filed a Motion to Dismiss.16 After the court denied the motion for lack of merit,17 respondent sought for the inhibition of Judge Alameda and moved for the reconsideration of the order denying the motion.18 Judge Alameda inhibited himself notwithstanding "[t]he unfounded allegations and unsubstantiated assertions in the motion."19 Judge Cedrick O. Ruiz of Branch 61, to which the case was re-raffled, in turn, granted respondents Motion for Reconsideration and dismissed the petition on the ground that the petitioner lacked legal capacity to sue in the Philippines.20 Petitioner TPI now seeks to nullify, in this instant Petition for Review on Certiorari under Rule 45, the order of the trial court dismissing its Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award. Issue

The parties likewise executed a Supplemental Memorandum of Agreement dated 15 January 2003 and an Agreement to Amend Memorandum of Agreement11 dated 14 July 2003.

10

The core issue in this case is whether or not the court a quo was correct in so dismissing the petition on the ground of petitioners lack of legal capacity to sue.

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Our Ruling The petition is impressed with merit. The Corporation Code of the Philippines expressly provides: Sec. 133. Doing business without a license. - No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws. It is pursuant to the aforequoted provision that the court a quo dismissed the petition. Thus:

In several cases, this Court had the occasion to discuss the nature and applicability of the Corporation Code of the Philippines, a general law, viz-a-viz other special laws. Thus, in Koruga v. Arcenas, Jr.,25 this Court rejected the application of the Corporation Code and applied the New Central Bank Act. It ratiocinated: Korugas invocation of the provisions of the Corporation Code is misplaced. In an earlier case with similar antecedents, we ruled that: "The Corporation Code, however, is a general law applying to all types of corporations, while the New Central Bank Act regulates specifically banks and other financial institutions, including the dissolution and liquidation thereof. As between a general and special law, the latter shall prevail generalia specialibus non derogant." (Emphasis supplied)26 Further, in the recent case of Hacienda Luisita, Incorporated v. Presidential Agrarian Reform Council,27 this Court held:

Herein plaintiff TPIs "Petition, etc." acknowledges that it "is a foreign corporation established in the State of California" and "was given the exclusive right to license or sublicense the Yamaoka Without doubt, the Corporation Code is the general law providing for the formation, organization Patent" and "was assigned the exclusive right to enforce the said patent and collect corresponding and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian royalties" in the Philippines. TPI likewise admits that it does not have a license to do business in reform. As between a general and special law, the latter shall prevailgeneralia specialibus non the Philippines. derogant.28 There is no doubt, therefore, in the mind of this Court that TPI has been doing business in the Philippines, but sans a license to do so issued by the concerned government agency of the Republic of the Philippines, when it collected royalties from "five (5) Philippine tuna processors[,] namely[,] Angel Seafood Corporation, East Asia Fish Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc. and respondent Philippine Kingford, Inc." This being the real situation, TPI cannot be permitted to maintain or intervene in any action, suit or proceedings in any court or administrative agency of the Philippines." A priori, the "Petition, etc." extant of the plaintiff TPI should be dismissed for it does not have the legal personality to sue in the Philippines. 21 The petitioner counters, however, that it is entitled to seek for the recognition and enforcement of the subject foreign arbitral award in accordance with Republic Act No. 9285 ( Alternative Dispute Resolution Act of 2004),22 the Convention on the Recognition and Enforcement of Foreign Arbitral Awards drafted during the United Nations Conference on International Commercial Arbitration in 1958 (New York Convention), and the UNCITRAL Model Law on International Commercial Arbitration (Model Law),23 as none of these specifically requires that the party seeking for the enforcement should have legal capacity to sue. It anchors its argument on the following: Following the same principle, the Alternative Dispute Resolution Act of 2004 shall apply in this case as the Act, as its title - An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes - would suggest, is a law especially enacted "to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes."29 It specifically provides exclusive grounds available to the party opposing an application for recognition and enforcement of the arbitral award. 30 Inasmuch as the Alternative Dispute Resolution Act of 2004, a municipal law, applies in the instant petition, we do not see the need to discuss compliance with international obligations under the New York Convention and theModel Law. After all, both already form part of the law. In particular, the Alternative Dispute Resolution Act of 2004 incorporated the New York Convention in the Act by specifically providing:

SEC. 42. Application of the New York Convention. - The New York Convention shall govern the In the present case, enforcement has been effectively refused on a ground not found in the recognition and enforcement of arbitral awards covered by the said Convention. [Alternative Dispute Resolution Act of 2004], New York Convention, or Model Law. It is for this reason that TPI has brought this matter before this most Honorable Court, as it [i]s imperative to xxx clarify whether the Philippines international obligations and State policy to strengthen arbitration as a means of dispute resolution may be defeated by misplaced technical considerations not found in the relevant laws.24 SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated Simply put, how do we reconcile the provisions of the Corporation Code of the Philippines on one under Article V of the New York Convention. Any other ground raised shall be disregarded by the hand, and theAlternative Dispute Resolution Act of 2004, the New York Convention and the Model regional trial court. Law on the other? It also expressly adopted the Model Law, to wit:

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Sec. 19. Adoption of the Model Law on International Commercial Arbitration. International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade Law on June 21, 1985 xxx." Now, does a foreign corporation not licensed to do business in the Philippines have legal capacity to sue under the provisions of the Alternative Dispute Resolution Act of 2004? We answer in the affirmative.

(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or (b) The recognition or enforcement of the award would be contrary to the public policy of that country. Clearly, not one of these exclusive grounds touched on the capacity to sue of the party seeking the recognition and enforcement of the award.

Sec. 45 of the Alternative Dispute Resolution Act of 2004 provides that the opposing party in an Pertinent provisions of the Special Rules of Court on Alternative Dispute Resolution,31 which was application for recognition and enforcement of the arbitral award may raise only those grounds that promulgated by the Supreme Court, likewise support this position. were enumerated under Article V of the New York Convention, to wit: Rule 13.1 of the Special Rules provides that "[a]ny party to a foreign arbitration may petition the court to recognize and enforce a foreign arbitral award." The contents of such petition are enumerated in Rule 13.5.32 Capacity to sue is not included. Oppositely, in the Rule on local arbitral 1. Recognition and enforcement of the award may be refused, at the request of the party awards or arbitrations in instances where "the place of arbitration is in the Philippines," 33 it is against whom it is invoked, only if that party furnishes to the competent authority where specifically required that a petition "to determine any question concerning the existence, validity the recognition and enforcement is sought, proof that: and enforceability of such arbitration agreement"34 available to the parties before the commencement of arbitration and/or a petition for "judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction"35 after arbitration has (a) The parties to the agreement referred to in article II were, under the law already commenced should state "[t]he facts showing that the persons named as petitioner or applicable to them, under some incapacity, or the said agreement is not valid respondent have legal capacity to sue or be sued."36 under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or Indeed, it is in the best interest of justice that in the enforecement of a foreign arbitral award, we deny availment by the losing party of the rule that bars foreign corporations not licensed to do (b) The party against whom the award is invoked was not given proper notice business in the Philippines from maintaining a suit in our courts. When a party enters into a of the appointment of the arbitrator or of the arbitration proceedings or was contract containing a foreign arbitration clause and, as in this case, in fact submits itself to otherwise unable to present his case; or arbitration, it becomes bound by the contract, by the arbitration and by the result of arbitration, conceding thereby the capacity of the other party to enter into the contract, participate in the (c) The award deals with a difference not contemplated by or not falling within arbitration and cause the implementation of the result. Although not on all fours with the instant case, also worthy to consider is the the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not wisdom of then Associate Justice Flerida Ruth P. Romero in her Dissenting Opinion in Asset so submitted, that part of the award which contains decisions on matters Privatization Trust v. Court of Appeals,37 to wit: submitted to arbitration may be recognized and enforced; or Article V (d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. 2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: xxx Arbitration, as an alternative mode of settlement, is gaining adherents in legal and judicial circles here and abroad. If its tested mechanism can simply be ignored by an aggrieved party, one who, it must be stressed, voluntarily and actively participated in the arbitration proceedings from the very beginning, it will destroy the very essence of mutuality inherent in consensual contracts. 38 Clearly, on the matter of capacity to sue, a foreign arbitral award should be respected not because it is favored over domestic laws and procedures, but because Republic Act No. 9285 has certainly erased any conflict of law question. Finally, even assuming, only for the sake of argument, that the court a quo correctly observed that the Model Law, not the New York Convention, governs the subject arbitral award,39 petitioner may still seek recognition and enforcement of the award in Philippine court, since the Model Law prescribes substantially identical exclusive grounds for refusing recognition or enforcement. 40

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Premises considered, petitioner TPI, although not licensed to do business in the Philippines, may 26. Admittedly, reference to "Branch 67" in petitioner TPIs "Motion for Time to File a Petition for seek recognition and enforcement of the foreign arbitral award in accordance with the provisions of Review on Certiorari under Rule 45" is a typographical error. As correctly pointed out by the Alternative Dispute Resolution Act of 2004. respondent Kingford, the order sought to be assailed originated from Regional Trial Court, Makati City, Branch 61. II The remaining arguments of respondent Kingford are likewise unmeritorious. First. There is no need to consider respondents contention that petitioner TPI improperly raised a question of fact when it posited that its act of entering into a MOA should not be considered "doing business" in the Philippines for the purpose of determining capacity to sue. We reiterate that the foreign corporations capacity to sue in the Philippines is not material insofar as the recognition and enforcement of a foreign arbitral award is concerned. 27. xxx Upon confirmation with the Regional Trial Court, Makati City, Branch 61, a copy of petitioner TPIs motion was received by the Metropolitan Trial Court, Makati City, Branch 67. On 8 January 2009, the motion was forwarded to the Regional Trial Court, Makati City, Branch 61. 48 All considered, petitioner TPI, although a foreign corporation not licensed to do business in the Philippines, is not, for that reason alone, precluded from filing the Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award before a Philippine court.

WHEREFORE, the Resolution dated 21 November 2008 of the Regional Trial Court, Branch 61, Makati City in Special Proceedings No. M-6533 is hereby REVERSED and SET ASIDE. The case Second. Respondent cannot fault petitioner for not filing a motion for reconsideration of the is REMANDED to Branch 61 for further proceedings. assailed Resolution dated 21 November 2008 dismissing the case. We have, time and again, ruled 41 that the prior filing of a motion for reconsideration is not required in certiorari under Rule 45. SO ORDERED. Third. While we agree that petitioner failed to observe the principle of hierarchy of courts, which, under ordinary circumstances, warrants the outright dismissal of the case, 42 we opt to relax the rules following the pronouncement in Chua v. Ang,43 to wit: FIRST DIVISION

G.R. No. 155830 August 15, 2012 [I]t must be remembered that [the principle of hierarchy of courts] generally applies to cases involving conflicting factual allegations. Cases which depend on disputed facts for decision cannot be brought immediately before us as we are not triers of facts.44 A strict application of this rule may NUMERIANO P. ABOBON, Petitioner, vs. be excused when the reason behind the rule is not present in a case, as in the present case, FELICITAS ABATA ABOBON and GELIMA ABATA ABOBON, Respondents. where the issues are not factual but purely legal.1wphi1 In these types of questions, this Court has the ultimate say so that we merely abbreviate the review process if we, because of the unique circumstances of a case, choose to hear and decide the legal issues outright. 45 DECISION Moreover, the novelty and the paramount importance of the issue herein raised should be seriously considered.46Surely, there is a need to take cognizance of the case not only to guide the bench and the bar, but if only to strengthen arbitration as a means of dispute resolution, and uphold the policy of the State embodied in theAlternative Dispute Resolution Act of 2004, to wit: Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. xxx Fourth. As regards the issue on the validity and enforceability of the foreign arbitral award, we leave its determination to the court a quo where its recognition and enforcement is being sought. Fifth. Respondent claims that petitioner failed to furnish the court of origin a copy of the motion for time to file petition for review on certiorari before the petition was filed with this Court.47 We, however, find petitioners reply in order. Thus: BERSAMIN, J.: The controversy involves the rightful possession of a parcel of registered land. The respondents, who were the registered owners, sued the petitioner, their first cousin, to recover 1the possession of the land in question, stating that they had only allowed the petitioner to use the land out of pure benevolence, but the petitioner asserted that the land belonged to him as owner by right of succession from his parents. Antecedents Respondents Felicitas and Gelima Abobon were the plaintiffs in this action fer recovery of possession and damages brought against petitioner Numeriano Abobon (Numeriano) in the 2nd Municipal Circuit Trial Court of Labrador-Sual in Pangasinan (MCTC). They averred that they were the registered owners of that parcel of unirrigated riceland with an area of 4,668 square meters, more or less, and situated in Poblacion, Labrador, Pangasinan, and covered by Transfer Certificate of Title (TCT) No. 201367 of the Registry of Deeds of Pangasinan (Exhibit A); that they had allowed Numeriano, their first cousin, the free use of the land out of benevolence; and that they now immediately needed the parcel of land for their own use and had accordingly demanded that Numeriano should vacate and return it to them but he had refused.

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In his answer, Numeriano admitted being the first cousin of the respondents and the existence of TCT No. 201367 covering the land in question, and having received the demand for him to vacate. He alleged, however, that he did not vacate because he was the owner of the land in question. He asserted that if the land in question related to the unirrigated riceland with an area of 3,000 square meters that he was presently tilling and covered by tax declaration no. 2 in the name of his father, Rafael Abobon (Rafael), then the respondents did not have a valid cause of action against him because he had inherited that portion from his parents; that he and his predecessors-in-interest had also continuously, publicly and adversely and in the concept of owner possessed the parcel of land for more than 59 years; that in 1937, his grandfather Emilio Abobon (Emilio), the original owner, had granted that portion of 3,000 square meters to Rafael when he got married to his mother, Apolonia Pascua, by means of a donation propter nuptias; that since then his parents had possessed and tilled the land; that he himself had exclusively inherited the land from his parents in 1969 because his brother Jose had received his own inheritance from their parents; that the possession of his parents and his own had continued until the present; that assuming that the respondents were the true owners of the land, they were already estopped by laches from recovering the portion of 3,000 square meters from him.

land to Juan Mamaril and its repurchase by Leodogario; (b) the registration of title and ownership; (c) the extrajudicial partition of the property by the heirs of Leodegario; (d) Numerianos free use of the land from 1989 onwards upon being allowed to do so by the respondents; (e) the verbal demands from the respondents since 1993 for Numeriano to vacate the land; and (f) the commencement of the action to recover possession against Numeriano. It considered such acts and transactions as negating any notion of the respondents abandonment of their right to assert ownership.2 The MCTC disposed thus: WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the defendant as follows: 1. Declaring the plaintiffs as the true and lawful owner and possessor of the land in question;

On August 23, 2000, after due proceedings, the MCTC ruled in favor of the respondents, 1 finding 2. Ordering the defendant to vacate the premises in question and to surrender its that the respondents parents Leodegario Abobon (Leodegario) and Macaria Abata (Macaria) had possession to the plaintiffs; purchased the property on February 27, 1941 from Emilio with the conformity of Emilios other children, including Rafael; that on February 4, 1954, Leodegario and Macaria had registered their title and ownership under TCT No. 15524; that on February 16, 1954, Leodegario and Macaria had 3. Ordering the defendant to pay the plaintiffs the amount of P20,000.00 as moral sold the land to Juan Mamaril; that on February 25, 1954, Juan Mamaril had registered the land in damages and the amount of P5,000.00 as exemplary damages; his name under TCT No. 15678; that on November 13, 1970, Juan Mamaril had sold the land back to Leodegario, and TCT No. 87308 had been issued under the name of Leodegario; that on 4. Ordering the defendant to pay the amount of P10,000.00 as and for attorneys fees; January 16, 1979, Leodegario had submitted a sworn statement as required by Presidential Decree No. 27 to the effect that his tenant on the land had been one Cornelio Magno; that on April 15, 1993, the respondents had inherited the land upon the death of Leodegario; that on October 5. Dismissing the counterclaim; 22, 1994, the respondents had adjudicated the land unto themselves through a deed of extrajudicial settlement; that after due publication of the deed of extrajudicial settlement, the 6. Ordering the defendant to pay the costs of the suit. respondents had registered the land in their own names on December 20, 1994, resulting in the issuance of TCT No. 201367 to them; that after the 1989 palay harvest, the respondents had allowed the petitioner the free use of the land out of benevolence; that the respondents had started SO ORDERED.3 to verbally demand that the petitioner vacate the land on May 25, 1993; and that because the petitioner had refused to vacate, the respondents had then brought a complaint in the barangay on Numeriano appealed to the Regional Trial Court in Lingayen City, Pangasinan (RTC), which, on May 31, 1996, where mediation had failed to settle the dispute. April 16, 2001, upheld the MCTC,4 viz: The MCTC further found that the 3,000 square-meter land Numeriano referred to as donated to his parents was not the same as the land in question due to their boundaries being entirely different; that in the donation propter nuptias (Exhibit 11), Emilio had stated that the parcels of land thereby covered had not been registered under Act No. 496 or under the provisions of the Spanish Mortgage Law, whereas the land in question had already been registered; that even assuming that the 3,000 square-meter land was inside the land in question, his claim would still not prosper because the donation propter nuptias in his parents favor had been invalid for not having been signed and accepted in writing by Rafael, his father; that the donation propter nuptias had also been cancelled or dissolved when his mother had signed as an instrumental witness and his father had given his consent to the sale of the land in question then covered by Original Certificate No. 28727 by Emilio to Leodegario; and that his parents assent to the sale signifie d either that his parents had conformed to the dissolution of the donationpropter nuptias in their favor, or that the land sold to Leodegario had been different from the land donated to them. The MCTC held that the respondents were not guilty of laches because of their numerous acts and transactions from 1941 until 1996 involving the land in question, specifically: (a) the sale of the WHEREFORE, PREMISES well-considered, the appeal taken by defendant/appellant is hereby DISMISSED. SO ORDERED. Citing the variance between the description of the land in question and the description of the land covered by the donation propter nuptias, as well as the failure of Numeriano to explain his parents participation in the sale of the land in question in 1941 to Leodegario and Macaria, the RTC concluded that the land in question was really separate and distinct from the property donated to his parents in 1937;5 and lent credence to the respondents claim that they had allowed him to use the land only out of their benevolence.6

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Still dissatisfied, Numeriano appealed via petition for review to the Court of Appeals (CA), submitting that he was the lawful owner and possessor of the 3,000 square meter parcel of land that he occupied and cultivated; and that the respondents TCT was invalid. 7 On May 16, 2002, however, the CA rejected Numerianos submissions and affirmed the RTC,8 holding that the respondents were in possession of a certificate of title that enjoyed the conclusive presumption of validity, by virtue of which they were entitled to possess the land in question; that the parcel of land that he owned was different from the land in question; and that his impugning the validity of the respondents TCT partook of the nature of an impermissible collateral attack against the TCT, considering that the validity of a Torrens title could be challenged only directly through an action instituted for that purpose.9

AFFIRMING THE RTCS AND MCTCS DECISIONS ORDERING PETITIONER TO PAY DAMAGES, ATTORNEYS FEES AND COSTS OF SUIT AND DISMISSING HIS COUNTERCLAIM.11 Ruling The appeal lacks merit.

First of all, a fundamental principle in land registration under the Torrens system is that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.12 The certificate of title thus becomes the best proof of ownership of a parcel of land;13 hence, anyone who deals with property registered under The CA, pointing out that the MCTCs declaration that the respondents were the true owners of the the Torrens system may rely on the title and need not go beyond the title. 14 This reliance on the land in question went beyond the ambit of a possessory action that was limited to determining only certificate of title rests on the doctrine of indefeasibility of the land title, which has long been wellthe issue of physical possession,10 deleted the declaration, and disposed as follows: settled in this jurisdiction. It is only when the acquisition of the title is attended with fraud or bad faith that the doctrine of indefeasibility finds no application.15 WHEREFORE, the foregoing premises considered. The Decision under appeal is hereby AFFIRMED with the modification that the declaration by the Municipal Circuit Trial Court of Accordingly, we rule for the respondents on the issue of the preferential right to the possession of respondents as to the owners of the subject parcel of land is deleted. the land in question. Their having preferential right conformed to the age-old rule that whoever held a Torrens title in his name is entitled to the possession of the land covered by the SO ORDERED. title.16 Indeed, possession, which is the holding of a thing or the enjoyment of a right, 17 was but an attribute of their registered ownership. Hence, this appeal, with Numeriano positing as follows: I. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN AWARDING POSSESSION OF SUBJECT PREMISES TO RESPONDENTS WITHOUT CITING ANY REASONS THEREFOR AND DESPITE THE FACT THAT EVIDENCE ON HAND SHOWS PETITIONER BECAME THE LAWFUL OWNER THEREOF PRIOR TO TIME RESPONDENTS ACQUIRED THE SAME. II. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE LOT BEING CLAIMED BY RESPONDENTS IS DIFFERENT FROM THAT BEING CLAIMED BY PETITIONER. III. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER SHOULD FILE A SEPARATE ACTION FOR ANNULMENT OF TITLE AS THERE IS NO NEED THEREFOR. IV. ASSUMING SANS ADMITTING THAT PETITIONER IS NOT THE LAWFUL OWNER OF SUBJECT PREMISES, WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN Thirdly, the core issue in an action for the recovery of possession of realty like this one concerned only the priority right to the possession of the realty.21 As such, Numerianos assertion of ownership in his own right could not be finally and substantively determined herein, for it was It is beyond question under the law that the owner has not only the right to enjoy and dispose of a thing without other limitations than those established by law, but also the right of action against the holder and possessor of the thing in order to recover it.18 He may exclude any person from the enjoyment and disposal of the thing, and, for this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.19 Secondly, Numeriano denies to the respondents the right to rely on their TCT, insisting that he had become the legal owner of the land in question even before the respondents had acquired it by succession from their parents, and that he had acted in good faith in possessing the land in question since then. He argues that he did not need to file a separate direct action to annul the respondents title because "by proving that they are owners thereof, said title may be annulled as an incidental result."20 Numerianos argument lacks legal basis. In order for him to properly assail the validity of the respondents TCT, he must himself bring an action for that purpose. Instead of bringing that direct action, he mounted his attack as a merely defensive allegation herein. Such manner of attack against the TCT was a collateral one, which was disallowed by Section 48 of Presidential Decree No. 1529 (The Property Registration Decree), viz: Section 48. Certificate not Subject to Collateral attack. A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

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axiomatic that the adjudication of the question of ownership in an action for the recovery of possession of realty would only be provisional and would not even be a bar to an action between the same parties involving the ownership of the same property.22 Fourthly, Numeriano insists that the land he occupied had been donated to his parents and was different from the land in question. His insistence was bereft of factual support. All the lower courts uniformly found that his evidence related to a parcel of land entirely different from the land in question. According to the MCTC, "the land for which he has presented evidence to support his claim of ownership is entirely different from the land the plaintiffs are claiming."23 On its part, the RTC held that "the land, subject matter of this controversy is all of 4668 sq. meters and bearing different boundaries from that of the donated property and was already registered under OCT No. 28727 as early as 1926," such that "the subject property is separate and distinct from that property donated to the defendants parents in 1937."24 Agreeing with both lower courts, the CA declared: "(i)n fine, what these decisions are saying is that petitioner may have evidence that he owns a parcel of land but, based on the evidence he had presented, the said parcel of land is different from the one he is presently occupying."25 We sustain the lower courts. The findings of fact of lower courts, particularly when affirmed by the CA, are final and conclusive upon the Court. In this as well as in other appeals, the Court, not being a trier of facts, does not review their findings, especially when they are supported by the records or based on substantial evidence.26 It is not the function of the Court to analyze or weigh evidence all over again, unless there is a showing that the findings of the lower courts are absolutely devoid of support or are glaringly erroneous as to constitute palpable error or grave abuse of discretion.27 There has been no such showing made by Numeriano herein. Lastly, the Court must undo the awards of moral and exemplary damages and attorneys fees.

Even so, whenever attorneys fees are proper in a case, the decision rendered therein should still expressly state the factual basis and legal justification for granting them.35 Granting them in the dispositive portion of the judgment is not enough;36 a discussion of the .factual basis and legal justification for them must be laid out in the body of the decision. 37 Considering that the award of attorney's fees in favor of the respondents fell short of this requirement, the Court disallows the award for want of the factual and legal premises in the body of the decision.38 The requirement for express findings of fact and law has been set in order to bring the case within the exception and justify the award of the attorney's fees. Otherwise, the award is a conclusion without a premise, its basis being improperly left to speculation and conjecture. 39 WHEREFORE, the Court AFFIRMS the decision promulgated on May 16, 2002 by the Court of Appeals, with theMODIFICATION that the awards of moral damages, exemplary damages and attorney's fees are DELETED. The petitioner shall pay the costs of suit. SO ORDERED. FIRST DIVISION G.R. No. 178288 August 15, 2012

SPOUSES CHARLIE FORTALEZA and OFELIA FORTALEZA, Petitioners, vs. SPOUSES RAUL LAPITAN and RONA LAPITAN, Respondents. DECISION

To be recoverable, moral damages must be capable of proof and must be actually proved with a reasonable degree of certainty. Courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages.28 Yet, nothing was adduced here to justify the grant of moral damages. What we have was only the allegation on moral damages, with the complaint stating that the respondents had been forced to litigate, and that they had suffered mental anguish, serious anxiety and wounded feelings from the petitioners refusal to restore the possession of the land in question to them.29 The allegation did not suffice, for allegation was not proof of the facts alleged. The Court cannot also affirm the exemplary damages granted in favor of the respondents.1wphi1 Exemplary damages were proper only if the respondents, as the plaintiffs, showed their entitlement to moral, temperate or compensatory damages.30 Yet, they did not establish their entitlement to such other damages. As to attorneys fees, the general rule is that such fees cannot be recovered by a successful litigant as part of the damages to be assessed against the losing party because of the policy that no premium should be placed on the right to litigate.31 Indeed, prior to the effectivity of the present Civil Code, such fees could be recovered only when there was a stipulation to that effect. It was only under the present Civil Code that the right to collect attorneys fees in the cases mentioned in Article 220832 of the Civil Code came to be recognized.33 Such fees are now included in the concept of actual damages.34

DEL CASTILLO, J.: Unless a case falls under recognized exceptions provided by law and jurisprudence, courts should maintain the ex parte, non-adversarial, summary and ministerial nature of the issuance of a writ of possession. Assailed in this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court is the Decision2 of the Court of Appeals (CA) dated January 10, 2007 in CA-G.R. CV No. 86287 which affirmed the Order3 of the Regional Trial Court (RTC) of Calamba City Branch 35, dated September 16, 2005 in SLRC Case No. 2528-2004-C granting an ex parte petition for the issuance of writ of possession. Likewise assailed is the CA Resolution4 dated June 6, 2007 which denied the Motion for Reconsideration5 of the said assailed Decision. Factual Antecedents Spouses Charlie and Ofelia Fortaleza (spouses Fortaleza) obtained a loan from spouses Rolando and Amparo Lapitan (creditors) in the amount of P1.2 million subject to 34% interest per annum. As security, spouses Fortaleza executed on January 28, 1998 a Deed of Real Estate Mortgage6 over their residential house and lot situated in Barrio Anos, Municipality of Los Baos, Laguna (subject property) registered under Transfer Certificate of Title (TCT) No. T-412512.7

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When spouses Fortaleza failed to pay the indebtedness including the interests and penalties, the creditors applied for extrajudicial foreclosure of the Real Estate Mortgage before the Office of the Clerk of Court and Ex-Officio Sheriff of Calamba City. The public auction sale was set on May 9, 2001. At the sale, the creditors son Dr. Raul Lapitan and his wife Rona (spouses Lapitan) emerged as the highest bidders with the bid amount of P2.5 million. Then, they were issued a Certificate of Sale8 which was registered with the Registry of Deeds of Calamba City and annotated at the back of TCT No. T-412512 under Entry No. 615683 on November 15, 2002.9 The one-year redemption period expired without the spouses Fortaleza redeeming the mortgage. Thus, spouses Lapitan executed an affidavit of consolidation of ownership on November 20, 2003 and caused the cancellation of TCT No. T-412512 and the registration of the subject property in their names under TCT No. T-53594510 on February 4, 2004. Despite the foregoing, the spouses Fortaleza refused spouses Lapitans formal demand11 to vacate and surrender possession of the subject property. Proceedings before the Regional Trial Court On August 27, 2004, spouses Lapitan filed an ex parte petition for the issuance of writ of possession with Branch 35 of the RTC of Calamba City docketed as SLRC Case No. 2528-2004C.12 As new registered owners of the subject property, spouses Lapitan claimed that they were entitled to its possession pursuant to Section 7 of Act No. 3135,13 as amended by Act No. 4118. In their opposition,14 spouses Fortaleza questioned the validity of the real estate mortgage and the foreclosure sale. They argued that the mortgage was void because the creditors bloated the principal amount by the imposition of exorbitant interest. Spouses Fortaleza added that the foreclosure proceeding was invalid for non-compliance with the posting requirement. Later, for repeated failure of spouses Fortaleza to appear at the scheduled hearings, the RTC allowed spouses Lapitan to present evidence ex parte. Eventually, on September 16, 2005, the RTC ordered the issuance of a writ of possession explaining that it is a ministerial duty of the court especially since the redemption period had expired and a new title had already been issued in the name of the spouses Lapitan, thus: WHEREFORE, premises considered, the Opposition with counterclaim filed by the respondents is denied while this instant petition is hereby granted. Accordingly, the Branch Clerk of Court is hereby ordered to issue a Writ of Possession directing the provincial sheriff of Laguna to place the petitioner in possession of the above described property free from any adverse occupants thereof. SO ORDERED.15 Spouses Fortaleza moved for reconsideration,16 claiming that the subject property is their family home and is exempt from foreclosure sale. On October 11, 2005, however, the RTC issued an Order17 denying their motion. Accordingly, the branch clerk of court issued the Writ of

Possession18 and the sheriff served the corresponding Notice to Vacate19 against spouses Fortaleza. Proceedings before the Court of Appeals Dissatisfied, spouses Fortaleza elevated the case to the CA via Rule 41 of the Rules of Court docketed as CA-G.R. CV No. 86287. With the perfection of an appeal, the RTC held in abeyance the implementation of the writ.20After the parties submitted their respective briefs, the CA rendered the assailed Decision21 dated January 10, 2007 dismissing the appeal: WHEREFORE, the appeal is hereby DISMISSED. The Order dated September 16, 2005 of the Regional Trial Court, Branch 35, Calamba City in SLRC Case No. 2528-2004-SC, is AFFIRMED. The court a quo is DIRECTED to enforce the Writ of Possession it issued on October 24, 2005. SO ORDERED.22 In affirming the ruling of the RTC, the CA stressed that any question regarding the regularity and validity of the mortgage or its foreclosure cannot be raised as a justification for opposing the issuance of the writ of possession since the proceedings is ex parte and non-litigious. Moreover, until the foreclosure sale is annulled, the issuance of the writ of possession is ministerial. Issues Unsuccesful with their quest to have the CA reconsider its Decision,23 spouses Fortaleza filed this petition for review on certiorari24 raising the following errors: I WHETHER X X X THE HONORABLE COURT OF APPEALS VIOLATED THE TWO (2)-RAFFLE RULE PRESCRIBED BY AND LONG ESTABLISHED UNDER THE REVISED INTERNAL RULES OF THE COURT OF APPEALS WHEN IT IMMEDIATELY RENDERED THE ASSAILED DECISION BARELY AFTER THE SUBMISSION OF THE PARTIES BRIEFS. IN SO DOING, THE HONORABLE COURT OF APPEALS ENGAGED IN PROCEDURAL SHORTCUTS AND ACTED WITH UNDUE HASTE AND INDECENT SPEED, THUS RENDERING ITS DECISION AS NULL AND VOID AND CHARACTERIZED BY MANIFEST BIAS AND PARTIALITY TO THE RESPONDENTS. II WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR IN UPHOLDING THE TRIAL COURTS ISSUANCE OF A WRIT OF POSSESSION DESPITE THE FACT THAT THE RESPONDENTS FAILED TO ESTABLISH THEIR ENTITLEMENT TO THE ISSUANCE OF SAID WRIT, THE NON-COMPLIANCE BY THE ORIGINAL MORTGAGORS AND THE RESPONDENTS OF THE STATUTORY REQUIREMENTS OF EXTRAJUDICIAL FORECLOSURE OF MORTGAGE UNDER ACT NO. 3135, AND THE FATAL DEFECTS OF THE FORECLOSURE PROCEEDINGS. III

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THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE PETITIONERS WERE PREVENTED BY THE RESPONDENTS FROM EXERCISING THEIR RIGHT OF REDEMPTION OVER THE FORECLOSED PROPERTY BY DEMANDING A REDEMPTION PRICE OF A HIGHLY INEQUITABLE AND MORE THAN DOUBLE THE AMOUNT OF THE FORECLOSED PROPERTY, ESPECIALLY THAT THE FORECLOSED MORTGAGED PROPERTY IS THE FAMILY HOME OF PETITIONERS AND THEIR CHILDREN.25 First, spouses Fortaleza point out that the CA violated its own 2002 Internal Rules of Procedure when it decided the case without passing the two-raffle system. They claim that the justice assigned in the completion stage also decided the case on the merits. This procedural shortcut, according to spouses Fortaleza, evinces the appellate courts bias and prejudgment in favor of the spouses Lapitan. Second, citing Barican v. Intermediate Appellate Court26 and Cometa v. Intermediate Appellate Court,27 and reiterating the irregularities that allegedly attended the foreclosure sale, the spouses Fortaleza insist that the issuance of writ of possession is not always ministerial and the trial court should have accorded them opportunity to present contrary evidence. Last, spouses Fortaleza maintain that the subject property is a family home exempt from forced sale. Hence, in the spirit of equity and following the rulings in Tolentino v. Court of Appeals, 28 and De los Reyes v. Intermediate Appellate Court,29 the Court should allow them to exercise the right of redemption even after the expiration of the one-year period. Our Ruling On Matters of Procedure True, under the 2002 Internal Rules of the Court of Appeals (IRCA), appealed civil cases undergo two-raffle system. First, a preliminary raffle is held to determine the Justice to whom the case will be assigned for completion of records. After completion, a second raffle is conducted to determine the Justice to whom the case will be assigned for study and report. "Each stage is distinct and it may happen that the Justice to whom the case was initially raffled for completion may not be the same Justice who will write the decision thereon."30 Thus: Section 2. Raffle of Cases. (a) Assignment of cases to a Justice, whether for completion of records or for study and report, shall be by raffle, subject to the following rules: (1) Appealed cases for completion of records shall be raffled to individual Justices; (Sec. 5(a), Rule 3, RIRCA [a])

for raffle to a Justice for study and report; (Sec. 5(b), Rule 3, RIRCA [a]).31 (Emphasis supplied.) However, the two-raffle system is already abandoned under the 2009 IRCA. As the rule now stands, the Justice to whom a case is raffled shall act on it both at the completion stage and for the decision on the merits, thus: SEC. 2. Raffle of Cases. (a) Cases shall be assigned to a Justice by raffle for completion of records, study and report, subject to the following rules: (1) Cases, whether original or appealed, shall be raffled to individual justices; (1.1) Records are deemed completed upon filing of the required pleadings, briefs or memoranda or the expiration of the period for the filing thereof and resolution of all pending incidents. Upon such completion, the Division Clerk of Court shall report the case to the Justice concerned for the issuance of a resolution declaring the case submitted for decision. 32 (Emphasis supplied.) Corollarily, the alleged defect in the processing of this case before the CA has been effectively cured. We stress that rules of procedure may be modified at any time and become effective at once, so long as the change does not affect vested rights.33 Moreover, it is equally axiomatic that there are no vested rights to rules of procedure.34Thus, unless spouses Fortaleza can establish a right by virtue of some statute or law, the alleged violation is not an actionable wrong. 35 At any rate, the 2002 IRCA does not provide for the effect of non-compliance with the two-raffle system on the validity of the decision. Notably too, it does not prohibit the assignment by raffle of a case for study and report to a Justice who handled the same during its completion stage. We also find that personal bias and prejudgment cannot be inferred from the alleged breach of internal rules. It is settled that clear and convincing evidence is required to prove bias and prejudice.36 Bare allegations and mere suspicions of partiality are not enough in the absence of evidence to overcome the presumption that a member of the court will undertake his noble role to dispense justice according to law and evidence and without fear or favor. 37 Moreover, no acts or conduct of the division or the ponente was shown to indicate any arbitrariness against the spouses Fortaleza. What is extant is that the opinions formed in the course of judicial proceedings are all based on the evidence presented. On the Issuance of Writ of Possession Spouses Fortaleza claim that the RTC grievously erred in ignoring the apparent nullity of the mortgage and the subsequent foreclosure sale. For them, the RTC should have heard and considered these matters in deciding the case on its merits. They relied on the cases of Barican38 and Cometa39 in taking exception to the ministerial duty of the trial court to grant a writ of possession.

(1.1) Records are deemed completed upon filing of the required briefs or memoranda or the expiration of the period for the filing thereof and resolution But the cited authorities are not on all fours with this case. In Barican, we held that the obligation of of all pending incidents. Thereupon, the Division Clerk of Court shall report the a court to issue a writ of possession ceases to be ministerial if there is a third party holding the case to the Justice concerned for the issuance of a resolution declaring the property adversely to the judgment debtor. Where such third party exists, the trial court should case submitted for decision and referring the same to the Raffle Committee

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conduct a hearing to determine the nature of his adverse possession. And in Cometa, there was a pending action where the validity of the levy and sale of the properties in question were directly put in issue which this Court found pre-emptive of resolution. For if the applicant for a writ of possession acquired no interest in the property by virtue of the levy and sale, then, he is not entitled to its possession. Moreover, it is undisputed that the properties subject of said case were sold at an unusually lower price than their true value. Thus, equitable considerations motivated this Court to withhold the issuance of the writ of possession to prevent injustice on the other party. Here, there are no third parties holding the subject property adversely to the judgment debtor. It was spouses Fortaleza themselves as debtors-mortgagors who are occupying the subject property. They are not even strangers to the foreclosure proceedings in which the ex parte writ of possession was applied for. Significantly, spouses Fortaleza did not file any direct action for annulment of the foreclosure sale of the subject property. Also, the peculiar circumstance of gross inadequacy of the purchase price is absent. Accordingly, unless a case falls under recognized exceptions provided by law40 and jurisprudence,41 we maintain the ex parte, non-adversarial, summary and ministerial nature of the issuance of a writ of possession as outlined in Section 7 of Act No. 3135, as amended by Act No. 4118, which provides: SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion x x x and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately. (Emphasis supplied.) Under the provision cited above, the purchaser in a foreclosure sale may apply for a writ of possession during the redemption period. Notably, in this case, the one-year period for the spouses Fortaleza to redeem the mortgaged property had already lapsed. Furthermore, ownership of the subject property had already been consolidated and a new certificate of title had been issued under the name of the spouses Lapitan. Hence, as the new registered owners of the subject property, they are even more entitled to its possession and have the unmistakable right to file an ex parte motion for the issuance of a writ of possession. As aptly explained in Edralin v. Philippine Veterans Bank,42 the duty of the trial court to grant a writ of possession in such instances is ministerial, and the court may not exercise discretion or judgment, thus: Consequently, the purchaser, who has a right to possession after the expiration of the redemption period, becomes the absolute owner of the property when no redemption is made. x x x The purchaser can demand possession at any time following the consolidation of ownership in his name and the issuance to him of a new TCT. After consolidation of title in the purchasers name for failure of the mortgagor to redeem the property, the purchasers right to possession ripens into the absolute right of a confirmed owner. At that point, the issuance of a writ of possession, upon proper application and proof of title becomes merely a ministerial function. Effectively, the court cannot exercise its discretion. (Emphasis in the original.) In this case, spouses Lapitan sufficiently established their right to the writ of possession. More specifically, they presented the following documentary exhibits: (1) the Certificate of Sale and its

annotation at the back of spouses Fortalezas TCT No. T-412512; (2) the Affidavit of Consolidation proving that spouses Fortaleza failed to redeem the property within the one-year redemption period; (3) TCT No. T-535945 issued in their names; and, (4) the formal demand on spouses Fortaleza to vacate the subject property. Lastly, we agree with the CA that any question regarding the regularity and validity of the mortgage or its foreclosure cannot be raised as a justification for opposing the petition for the issuance of the writ of possession.43 The said issues may be raised and determined only after the issuance of the writ of possession.44Indeed, "[t]he judge with whom an application for writ of possession is filed need not look into the validity of the mortgage or the manner of its foreclosure."45 The writ issues as a matter of course. "The rationale for the rule is to allow the purchaser to have possession of the foreclosed property without delay, such possession being founded on the right of ownership."46 To underscore this mandate, Section 847 of Act No. 3135 gives the debtor-mortgagor the right to file a petition for the setting aside of the foreclosure sale and for the cancellation of a writ of possession in the same proceedings where the writ was issued within 30 days after the purchaser-mortgagee was given possession. The courts decision thereon may be appealed by either party, but the order of possession shall continue in effect during the pendency of the appeal. "Clearly then, until the foreclosure sale of the property in question is annulled by a court of competent jurisdiction, the issuance of a writ of possession remains the ministerial duty of the trial court. The same is true with its implementation; otherwise, the writ will be a useless paper judgment a result inimical to the mandate of Act No. 3135 to vest possession in the purchaser immediately."48 On exemption of the subject property and the exercise of right of redemption Spouses Fortalezas argument that the subject property is exempt from forced sale because it is a family home deserves scant consideration. As a rule, the family home is exempt from execution, forced sale or attachment.49However, Article 155(3) of the Family Code explicitly allows the forced sale of a family home "for debts secured by mortgages on the premises before or after such constitution." In this case, there is no doubt that spouses Fortaleza voluntarily executed on January 28, 1998 a deed of Real Estate Mortgage over the subject property which was even notarized by their original counsel of record. And assuming that the property is exempt from forced sale, spouses Fortaleza did not set up and prove to the Sheriff such exemption from forced sale before it was sold at the public auction. As elucidated in Honrado v. Court of Appeals:50 While it is true that the family home is constituted on a house and lot from the time it is occupied as a family residence and is exempt from execution or forced sale under Article 153 of the Family Code, such claim for exemption should be set up and proved to the Sheriff before the sale of the property at public auction. Failure to do so would estop the party from later claiming the exemption. As this Court ruled in Gomez v. Gealone: Although the Rules of Court does not prescribe the period within which to claim the exemption, the rule is, nevertheless, well-settled that the right of exemption is a personal privilege granted to the judgment debtor and as such, it must be claimed not by the sheriff, but by the debtor himself at the time of the levy or within a reasonable period thereafter.51 (Emphasis supplied.) Certainly, reasonable time for purposes of the law on exemption does not mean a time after the expiration of the one-year period for a judgment debtor to redeem the property.52

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Equally without merit is spouses Fortalezas reliance on the cases of Tolentino53 and De Los Reyes54 in praying for the exercise of the right of redemption even after the expiration of the oneyear period. In Tolentino, we held that an action to redeem filed within the period of redemption, with a simultaneous deposit of the redemption money tendered to the sheriff, is equivalent to an offer to redeem and has the effect of preserving the right to redemption for future enforcement even beyond the one-year period.55 And in De Los Reyes, we allowed the mortgagor to redeem the disputed property after finding that the tender of the redemption price to the sheriff was made within the one-year period and for a sufficient amount. The circumstances in the present case are far different. The spouses Fortaleza neither filed an action nor made a formal offer to redeem the subject property accompanied by an actual and simultaneous tender of payment. It is also undisputed that they allowed the one-year period to lapse from the registration of the certificate of sale without redeeming the mortgage. For all intents and purposes, spouses Fortaleza have waived or abandoned their right of redemption.1wphi1 Although the rule on redemption is liberally interpreted in favor of the original owner of the property, we cannot apply the privilege of liberality to accommodate the spouses Forteza due to their negligence or omission to exercise the right of redemption within the prescribed period without justifiable cause. WHEREFORE, premises considered, the petition is DENIED. The Decision dated January 10, 2007 and Resolution dated June 6, 2007 of the Court of Appeals in CA-G.R. CV No. 86287 are AFFIRMED. SO ORDERED. SECOND DIVISION G.R. No. 191336 January 25, 2012

until February 1, 2002, from the petitioner. The respondent gave as collateral therefor his house and lot located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong, Caloocan City. Due to the respondents failure to pay the loan, the petitioner filed a complaint against the respondent before the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties entered into a Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in installments in the amount of Two Thousand Pesos (P2,000.00) per month, and in the event the house and lot given as collateral is sold, the respondent would settle the balance of the loan in full. However, the respondent still failed to pay, and on December 13, 2004, the Lupong Tagapamayapa issued a certification to file action in court in favor of the petitioner. On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of Makati City, Branch 66, a complaint for Collection of Sum of Money. In his Answer with Counterclaim, 3 the respondent raised the defense of improper venue considering that the petitioner was a resident of Bagumbong, Caloocan City while he lived in San Mateo, Rizal. After trial, on August 16, 2006, the MeTC rendered a Decision,4 which disposes as follows: WHEREFORE, premises considered[,] judgment is hereby rendered ordering defendant Jerry D. Montanez to pay plaintiff the following: 1. The amount of [Php147,893.00] representing the obligation with legal rate of interest from February 1, 2002 which was the date of the loan maturity until the account is fully paid; 2. The amount of Php10,000.00 as and by way of attorneys fees; and t he costs. SO ORDERED. 5 On appeal to the Regional Trial Court (RTC) of Makati City, Branch 146, the respondent raised the same issues cited in his Answer. In its March 14, 2007 Decision,6 the RTC affirmed the MeTC Decision, disposing as follows: WHEREFORE, finding no cogent reason to disturb the findings of the court a quo, the appeal is hereby DISMISSED, and the DECISION appealed from is hereby AFFIRMED in its entirety for being in accordance with law and evidence. SO ORDERED.7

CRISANTA ALCARAZ MIGUEL, Petitioner, vs. JERRY D. MONTANEZ, Respondent. DECISION REYES, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioner Crisanta Alcaraz Miguel (Miguel) seeks the reversal and setting aside of the September 17, 2009 Decision1 and February 11, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 100544, entitled "Jerry D. Montanez v. Crisanta Alcaraz Miguel." Antecedent Facts On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One Hundred Forty-Three Thousand Eight Hundred Sixty-Four Pesos (P143,864.00), payable in one (1) year, or

Dissatisfied, the respondent appealed to the CA raising two issues, namely, (1) whether or not venue was improperly laid, and (2) whether or not the Kasunduang Pag-aayos effectively novated the loan agreement. On September 17, 2009, the CA rendered the assailed Decision, disposing as follows: WHEREFORE, premises considered, the petition is hereby GRANTED. The appealed Decision dated March 14, 2007 of the Regional Trial Court (RTC) of Makati City, Branch 146, is REVERSED and SET ASIDE. A new judgment is entered dismissing respondents complaint for

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collection of sum of money, without prejudice to her right to file the necessary action to enforce the Kasunduang Pag-aayos. SO ORDERED.8 Anent the issue of whether or not there is novation of the loan contract, the CA ruled in the negative. It ratiocinated as follows: Judging from the terms of the Kasunduang Pag-aayos, it is clear that no novation of the old obligation has taken place.1wphi1 Contrary to petitioners assertion, there was no reduction of the term or period originally stipulated. The original period in the first agreement is one (1) year to be counted from February 1, 2001, or until January 31, 2002. When the complaint was filed before the barangay on February 2003, the period of the original agreement had long expired without compliance on the part of petitioner. Hence, there was nothing to reduce or extend. There was only a change in the terms of payment which is not incompatible with the old agreement. In other words, the Kasunduang Pag-aayos merely supplemented the old agreement.9 The CA went on saying that since the parties entered into a Kasunduang Pag-aayos before the Lupon ng Barangay, such settlement has the force and effect of a court judgment, which may be enforced by execution within six (6) months from the date of settlement by the Lupon ng Barangay, or by court action after the lapse of such time.10 Considering that more than six (6) months had elapsed from the date of settlement, the CA ruled that the remedy of the petitioner was to file an action for the execution of the Kasunduang Pag-aayos in court and not for collection of sum of money.11 Consequently, the CA deemed it unnecessary to resolve the issue on venue. 12 The petitioner now comes to this Court. Issues (1) Whether or not a complaint for sum of money is the proper remedy for the petitioner, notwithstanding the Kasunduang Pag-aayos;13 and (2) Whether or not the CA should have decided the case on the merits rather than remand the case for the enforcement of the Kasunduang Pag-aayos.14 Our Ruling Because the respondent failed to comply with the terms of the Kasunduang Pag-aayos, said agreement is deemed rescinded pursuant to Article 2041 of the New Civil Code and the petitioner can insist on his original demand. Perforce, the complaint for collection of sum of money is the proper remedy. The petitioner contends that the CA erred in ruling that she should have followed the procedure for enforcement of the amicable settlement as provided in the Revised Katarungang Pambarangay Law, instead of filing a collection case. The petitioner points out that the cause of action did not arise from the Kasunduang Pag-aayos but on the respondents breach of the original loan agreement.15

This Court agrees with the petitioner. It is true that an amicable settlement reached at the barangay conciliation proceedings, like the Kasunduang Pag-aayos in this case, is binding between the contracting parties and, upon its perfection, is immediately executory insofar as it is not contrary to law, good morals, good customs, public order and public policy.16 This is in accord with the broad precept of Article 2037 of the Civil Code, viz: A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance with a judicial compromise. Being a by-product of mutual concessions and good faith of the parties, an amicable settlement has the force and effect of res judicata even if not judicially approved. 17 It transcends being a mere contract binding only upon the parties thereto, and is akin to a judgment that is subject to execution in accordance with the Rules.18 Thus, under Section 417 of the Local Government Code,19 such amicable settlement or arbitration award may be enforced by execution by the Barangay Lupon within six (6) months from the date of settlement, or by filing an action to enforce such settlement in the appropriate city or municipal court, if beyond the six-month period. Under the first remedy, the proceedings are covered by the Local Government Code and the Katarungang Pambarangay Implementing Rules and Regulations. The Punong Barangay is called upon during the hearing to determine solely the fact of non-compliance of the terms of the settlement and to give the defaulting party another chance at voluntarily complying with his obligation under the settlement. Under the second remedy, the proceedings are governed by the Rules of Court, as amended. The cause of action is the amicable settlement itself, which, by operation of law, has the force and effect of a final judgment.20 It must be emphasized, however, that enforcement by execution of the amicable settlement, either under the first or the second remedy, is only applicable if the contracting parties have not repudiated such settlement within ten (10) days from the date thereof in accordance with Section 416 of the Local Government Code. If the amicable settlement is repudiated by one party, either expressly or impliedly, the other party has two options, namely, to enforce the compromise in accordance with the Local Government Code or Rules of Court as the case may be, or to consider it rescinded and insist upon his original demand. This is in accord with Article 2041 of the Civil Code, which qualifies the broad application of Article 2037, viz: If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand. In the case of Leonor v. Sycip,21 the Supreme Court (SC) had the occasion to explain this provision of law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved party, by the breach of compromise agreement, may just consider it already rescinded, to wit: It is worthy of notice, in this connection, that, unlike Article 2039 of the same Code, which speaks of "a cause of annulment or rescission of the compromise" and provides that "the compromise may be annulled or rescinded" for the cause therein specified, thus suggesting an action for annulment or rescission, said Article 2041 confers upon the party concerned, not a "cause" for rescission, or the right to "demand" the rescission of a compromise, but the authority, not only to "regard it as rescinded", but, also, to "insist upon his original demand". The language of this Article 2041,

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particularly when contrasted with that of Article 2039, denotes that no action for rescission is required in said Article 2041, and that the party aggrieved by the breach of a compromise agreement may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial declaration of rescission, for he may "regard" the compromise agreement already "rescinded".22 (emphasis supplied) As so well stated in the case of Chavez v. Court of Appeals, 23 a party's non-compliance with the amicable settlement paved the way for the application of Article 2041 under which the other party may either enforce the compromise, following the procedure laid out in the Revised Katarungang Pambarangay Law, or consider it as rescinded and insist upon his original demand. To quote: In the case at bar, the Revised Katarungang Pambarangay Law provides for a two-tiered mode of enforcement of an amicable settlement, to wit: (a) by execution by the Punong Barangay which is quasi-judicial and summary in nature on mere motion of the party entitled thereto; and (b) an action in regular form, which remedy is judicial. However, the mode of enforcement does not rule out the right of rescission under Art. 2041 of the Civil Code. The availability of the right of rescission is apparent from the wording of Sec. 417 itself which provides that the amicable settlement "may" be enforced by execution by the lupon within six (6) months from its date or by action in the appropriate city or municipal court, if beyond that period. The use of the word "may" clearly makes the procedure provided in the Revised Katarungang Pambarangay Law directory or merely optional in nature. Thus, although the "Kasunduan" executed by petitioner and respondent before the Office of the Barangay Captain had the force and effect of a final judgment of a court, petitioner's noncompliance paved the way for the application of Art. 2041 under which respondent may either enforce the compromise, following the procedure laid out in the Revised Katarungang Pambarangay Law, or regard it as rescinded and insist upon his original demand. Respondent chose the latter option when he instituted Civil Case No. 5139-V-97 for recovery of unrealized profits and reimbursement of advance rentals, moral and exemplary damages, and attorney's fees. Respondent was not limited to claiming P150,000.00 because although he agreed to the amount in the "Kasunduan," it is axiomatic that a compromise settlement is not an admission of liability but merely a recognition that there is a dispute and an impending litigation which the parties hope to prevent by making reciprocal concessions, adjusting their respective positions in the hope of gaining balanced by the danger of losing. Under the "Kasunduan," respondent was only required to execute a waiver of all possible claims arising from the lease contract if petitioner fully complies with his obligations thereunder. It is undisputed that herein petitioner did not. 24 (emphasis supplied and citations omitted) In the instant case, the respondent did not comply with the terms and conditions of the Kasunduang Pag-aayos. Such non-compliance may be construed as repudiation because it denotes that the respondent did not intend to be bound by the terms thereof, thereby negating the very purpose for which it was executed. Perforce, the petitioner has the option either to enforce the Kasunduang Pag-aayos, or to regard it as rescinded and insist upon his original demand, in accordance with the provision of Article 2041 of the Civil Code. Having instituted an action for collection of sum of money, the petitioner obviously chose to rescind the Kasunduang Pag-aayos. As such, it is error on the part of the CA to rule that enforcement by execution of said agreement is the appropriate remedy under the circumstances. Considering that the Kasunduang Pag-aayos is deemed rescinded by the non-compliance of the respondent of the terms thereof, remanding the case to the trial court for the enforcement of said agreement is clearly unwarranted.

The petitioner avers that the CA erred in remanding the case to the trial court for the enforcement of the Kasunduang Pag-aayos as it prolonged the process, "thereby putting off the case in an indefinite pendency."25Thus, the petitioner insists that she should be allowed to ventilate her rights before this Court and not to repeat the same proceedings just to comply with the enforcement of the Kasunduang Pag-aayos, in order to finally enforce her right to payment.26 The CA took off on the wrong premise that enforcement of the Kasunduang Pag-aayos is the proper remedy, and therefore erred in its conclusion that the case should be remanded to the trial court. The fact that the petitioner opted to rescind the Kasunduang Pag-aayos means that she is insisting upon the undertaking of the respondent under the original loan contract. Thus, the CA should have decided the case on the merits, as an appeal before it, and not prolong the determination of the issues by remanding it to the trial court. Pertinently, evidence abounds that the respondent has failed to comply with his loan obligation. In fact, the Kasunduang Pag-aayos is the well nigh incontrovertible proof of the respondents indebtedness with the petitioner as it was executed precisely to give the respondent a second chance to make good on his undertaking. And since the respondent still reneged in paying his indebtedness, justice demands that he must be held answerable therefor. WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals is SET ASIDE and the Decision of the Regional Trial Court, Branch 146, Makati City, dated March 14, 2007 is REINSTATED. SO ORDERED. THIRD DIVISION G.R. No. 194320 February 1, 2012

MALAYAN INSURANCE CO., INC., Petitioner, vs. RODELIO ALBERTO and ENRICO ALBERTO REYES, Respondents. DECISION VELASCO, JR., J.: The Case Before Us is a Petition for Review on Certiorari under Rule 45, seeking to reverse and set aside the July 28, 2010 Decision1 of the Court of Appeals (CA) and its October 29, 2010 Resolution2 denying the motion for reconsideration filed by petitioner Malayan Insurance Co., Inc. (Malayan Insurance). The July 28, 2010 CA Decision reversed and set aside the Decision 3 dated February 2, 2009 of the Regional Trial Court, Branch 51 in Manila. The Facts At around 5 oclock in the morning of December 17, 1995, an accident occurred at the corner of EDSA and Ayala Avenue, Makati City, involving four (4) vehicles, to wit: (1) a Nissan Bus operated

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by Aladdin Transit with plate number NYS 381; (2) an Isuzu Tanker with plate number PLR 684; (3) a Fuzo Cargo Truck with plate number PDL 297; and (4) a Mitsubishi Galant with plate number TLM 732.4 Based on the Police Report issued by the on-the-spot investigator, Senior Police Officer 1 Alfredo M. Dungga (SPO1 Dungga), the Isuzu Tanker was in front of the Mitsubishi Galant with the Nissan Bus on their right side shortly before the vehicular incident. All three (3) vehicles were at a halt along EDSA facing the south direction when the Fuzo Cargo Truck simultaneously bumped the rear portion of the Mitsubishi Galant and the rear left portion of the Nissan Bus. Due to the strong impact, these two vehicles were shoved forward and the front left portion of the Mitsubishi Galant rammed into the rear right portion of the Isuzu Tanker.5 Previously, particularly on December 15, 1994, Malayan Insurance issued Car Insurance Policy No. PV-025-00220 in favor of First Malayan Leasing and Finance Corporation (the assured), insuring the aforementioned Mitsubishi Galant against third party liability, own damage and theft, among others. Having insured the vehicle against such risks, Malayan Insurance claimed in its Complaint dated October 18, 1999 that it paid the damages sustained by the assured amounting to PhP 700,000.6 Maintaining that it has been subrogated to the rights and interests of the assured by operation of law upon its payment to the latter, Malayan Insurance sent several demand letters to respondents Rodelio Alberto (Alberto) and Enrico Alberto Reyes (Reyes), the registered owner and the driver, respectively, of the Fuzo Cargo Truck, requiring them to pay the amount it had paid to the assured. When respondents refused to settle their liability, Malayan Insurance was constrained to file a complaint for damages for gross negligence against respondents. 7 In their Answer, respondents asserted that they cannot be held liable for the vehicular accident, since its proximate cause was the reckless driving of the Nissan Bus driver. They alleged that the speeding bus, coming from the service road of EDSA, maneuvered its way towards the middle lane without due regard to Reyes right of way. When the Nissan Bus abruptly stopped, Reyes stepped hard on the brakes but the braking action could not cope with the inertia and failed to gain sufficient traction. As a consequence, the Fuzo Cargo Truck hit the rear end of the Mitsubishi Galant, which, in turn, hit the rear end of the vehicle in front of it. The Nissan Bus, on the other hand, sideswiped the Fuzo Cargo Truck, causing damage to the latter in the amount of PhP 20,000. Respondents also controverted the results of the Police Report, asserting that it was based solely on the biased narration of the Nissan Bus driver. 8 After the termination of the pre-trial proceedings, trial ensued. Malayan Insurance presented the testimony of its lone witness, a motor car claim adjuster, who attested that he processed the insurance claim of the assured and verified the documents submitted to him. Respondents, on the other hand, failed to present any evidence. In its Decision dated February 2, 2009, the trial court, in Civil Case No. 99-95885, ruled in favor of Malayan Insurance and declared respondents liable for damages. The dispositive portion reads: WHEREFORE, judgment is hereby rendered in favor of the plaintiff against defendants jointly and severally to pay plaintiff the following: 1. The amount of P700,000.00 with legal interest from the time of the filing of the complaint;

2. Attorneys fees of P10,000.00 and; 3. Cost of suit. SO ORDERED.9 Dissatisfied, respondents filed an appeal with the CA, docketed as CA-G.R. CV No. 93112. In its Decision dated July 28, 2010, the CA reversed and set aside the Decision of the trial court and ruled in favor of respondents, disposing: WHEREFORE, the foregoing considered, the instant appeal is hereby GRANTED and the assailed Decision dated 2 February 2009 REVERSED and SET ASIDE. The Complaint dated 18 October 1999 is hereby DISMISSED for lack of merit. No costs. SO ORDERED.10 The CA held that the evidence on record has failed to establish not only negligence on the part of respondents, but also compliance with the other requisites and the consequent right of Malayan Insurance to subrogation.11 It noted that the police report, which has been made part of the records of the trial court, was not properly identified by the police officer who conducted the onthe-spot investigation of the subject collision. It, thus, held that an appellate court, as a reviewing body, cannot rightly appreciate firsthand the genuineness of an unverified and unidentified document, much less accord it evidentiary value.12 Subsequently, Malayan Insurance filed its Motion for Reconsideration, arguing that a police report is a prima facie evidence of the facts stated in it. And inasmuch as they never questioned the presentation of the report in evidence, respondents are deemed to have waived their right to question its authenticity and due execution.13 In its Resolution dated October 29, 2010, the CA denied the motion for reconsideration. Hence, Malayan Insurance filed the instant petition. The Issues In its Memorandum14 dated June 27, 2011, Malayan Insurance raises the following issues for Our consideration: I WHETHER THE CA ERRED IN REFUSING ADMISSIBILITY OF THE POLICE REPORT SINCE THE POLICE INVESTIGATOR WHO PREPARED THE SAME DID NOT ACTUALLY TESTIFY IN COURT THEREON. II WHETHER THE SUBROGATION OF MALAYAN INSURANCE IS IMPAIRED AND/OR DEFICIENT.

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On the other hand, respondents submit the following issues in its Memorandum 15 dated July 7, 2011: I WHETHER THE CA IS CORRECT IN DISMISSING THE COMPLAINT FOR FAILURE OF MALAYAN INSURANCE TO OVERCOME THE BURDEN OF PROOF REQUIRED TO ESTABLISH THE NEGLIGENCE OF RESPONDENTS. II WHETHER THE PIECES OF EVIDENCE PRESENTED BY MALAYAN INSURANCE ARE SUFFICIENT TO CLAIM FOR THE AMOUNT OF DAMAGES. III WHETHER THE SUBROGATION OF MALAYAN INSURANCE HAS PASSED COMPLIANCE AND REQUISITES AS PROVIDED UNDER PERTINENT LAWS. Essentially, the issues boil down to the following: (1) the admissibility of the police report; (2) the sufficiency of the evidence to support a claim for gross negligence; and (3) the validity of subrogation in the instant case. Our Ruling The petition has merit.

There are several exceptions to the hearsay rule under the Rules of Court, among which are entries in official records.22 Section 44, Rule 130 provides: Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law are prima facie evidence of the facts therein stated. In Alvarez v. PICOP Resources,23 this Court reiterated the requisites for the admissibility in evidence, as an exception to the hearsay rule of entries in official records, thus: (a) that the entry was made by a public officer or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of his or her duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him or her stated, which must have been acquired by the public officer or other person personally or through official information. Notably, the presentation of the police report itself is admissible as an exception to the hearsay rule even if the police investigator who prepared it was not presented in court, as long as the above requisites could be adequately proved.24 Here, there is no dispute that SPO1 Dungga, the on-the-spot investigator, prepared the report, and he did so in the performance of his duty. However, what is not clear is whether SPO1 Dungga had sufficient personal knowledge of the facts contained in his report. Thus, the third requisite is lacking. Respondents failed to make a timely objection to the police reports presentation in evidence; thus, they are deemed to have waived their right to do so.25 As a result, the police report is still admissible in evidence. Sufficiency of Evidence

Admissibility of the Police Report Malayan Insurance contends that, even without the presentation of the police investigator who prepared the police report, said report is still admissible in evidence, especially since respondents failed to make a timely objection to its presentation in evidence. 16 Respondents counter that since the police report was never confirmed by the investigating police officer, it cannot be considered as part of the evidence on record.17 Indeed, under the rules of evidence, a witness can testify only to those facts which the witness knows of his or her personal knowledge, that is, which are derived from the witness own perception.18 Concomitantly, a witness may not testify on matters which he or she merely learned from others either because said witness was told or read or heard those matters. 19 Such testimony is considered hearsay and may not be received as proof of the truth of what the witness has learned. This is known as the hearsay rule.20 As discussed in D.M. Consunji, Inc. v. CA,21 "Hearsay is not limited to oral testimony or statements; the general rule that excludes hearsay as evidence applies to written, as well as oral statements." Malayan Insurance contends that since Reyes, the driver of the Fuzo Cargo truck, bumped the rear of the Mitsubishi Galant, he is presumed to be negligent unless proved otherwise. It further contends that respondents failed to present any evidence to overturn the presumption of negligence.26 Contrarily, respondents claim that since Malayan Insurance did not present any witness who shall affirm any negligent act of Reyes in driving the Fuzo Cargo truck before and after the incident, there is no evidence which would show negligence on the part of respondents. 27 We agree with Malayan Insurance. Even if We consider the inadmissibility of the police report in evidence, still, respondents cannot evade liability by virtue of the res ipsa loquitur doctrine. The D.M. Consunji, Inc. case is quite elucidating: Petitioners contention, however, loses relevance in the face of the application of res ipsa loquitur by the CA. The effect of the doctrine is to warrant a presumption or inference that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. The concept of res ipsa loquitur has been explained in this wise:

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While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendants part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence.

charged with negligence; and (3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured. x x x. No worker is going to fall from the 14th floor of a building to the basement while performing work in a construction site unless someone is negligent[;] thus, the first requisite for the application of the rule of res ipsa loquitur is present. As explained earlier, the construction site with all its paraphernalia and human resources that likely caused the injury is under the exclusive control and management of appellant[;] thus[,] the second requisite is also present. No contributory negligence was attributed to the appellees deceased husband[;] thus[,] the last requisite is also present. All the requisites for the application of the rule of res ipsa loquitur are present, thus a reasonable presumption or inference of appellants negligence arises. x x x.

x x x where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur, by the defendants want of care. but argues that the presumption or inference that it was negligent did not arise since it "proved that it exercised due care to avoid the accident which befell respondents husband. " One of the theoretical bases for the doctrine is its necessity, i.e., that necessary evidence is absent or not available. Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the defendants negligence is presumed or inferred when the plaintiff establishes the requisites for the The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the elements, instrumentality which causes the injury either knows the cause of the accident or has the best the burden then shifts to defendant to explain. The presumption or inference may be rebutted or opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore is overcome by other evidence and, under appropriate circumstances a disputable presumption, compelled to allege negligence in general terms and to rely upon the proof of the happening of the such as that of due care or innocence, may outweigh the inference. It is not for the defendant to accident in order to establish negligence. The inference which the doctrine permits is grounded explain or prove its defense to prevent the presumption or inference from arising. Evidence by the upon the fact that the chief evidence of the true cause, whether culpable or innocent, is practically defendant of say, due care, comes into play only after the circumstances for the application of the accessible to the defendant but inaccessible to the injured person. doctrine has been established.28 It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a plaintiff, without knowledge of the cause, reaches over to defendant who knows or should know the cause, for any explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains. The res ipsa loquitur doctrine, another court has said, is a rule of necessity, in that it proceeds on the theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of the defendant to show that there was no negligence on his part, and direct proof of defendants negligence is beyond plaintiffs power. Accordingly, some courts add to the three prerequisites for the application of the res ipsa loquitur doctrine the further requirement that for the res ipsa loquitur doctrine to apply, it must appear that the injured party had no knowledge or means of knowledge as to the cause of the accident, or that the party to be charged with negligence has superior knowledge or opportunity for explanation of the accident. The CA held that all the requisites of res ipsa loquitur are present in the case at bar: There is no dispute that appellees husband fell down from the 14th floor of a building to the basement while he was working with appellants construction project, resulting to his death. The construction site is within the exclusive control and management of appellant. It has a safety engineer, a project superintendent, a carpenter leadman and others who are in complete control of the situation therein. The circumstances of any accident that would occur therein are peculiarly within the knowledge of the appellant or its employees. On the other hand, the appellee is not in a position to know what caused the accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent or not readily available, provided the following requisites are present: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of the person In the case at bar, aside from the statement in the police report, none of the parties disputes the fact that the Fuzo Cargo Truck hit the rear end of the Mitsubishi Galant, which, in turn, hit the rear end of the vehicle in front of it. Respondents, however, point to the reckless driving of the Nissan Bus driver as the proximate cause of the collision, which allegation is totally unsupported by any evidence on record. And assuming that this allegation is, indeed, true, it is astonishing that respondents never even bothered to file a cross-claim against the owner or driver of the Nissan Bus. What is at once evident from the instant case, however, is the presence of all the requisites for the application of the rule of res ipsa loquitur. To reiterate, res ipsa loquitur is a rule of necessity which applies where evidence is absent or not readily available. As explained in D.M. Consunji, Inc., it is partly based upon the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it and that the plaintiff has no such knowledge, and, therefore, is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence. As mentioned above, the requisites for the application of the res ipsa loquitur rule are the following: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence; and (3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured. 29 In the instant case, the Fuzo Cargo Truck would not have had hit the rear end of the Mitsubishi Galant unless someone is negligent. Also, the Fuzo Cargo Truck was under the exclusive control of its driver, Reyes. Even if respondents avert liability by putting the blame on the Nissan Bus

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driver, still, this allegation was self-serving and totally unfounded. Finally, no contributory negligence was attributed to the driver of the Mitsubishi Galant. Consequently, all the requisites for the application of the doctrine of res ipsa loquitur are present, thereby creating a reasonable presumption of negligence on the part of respondents. It is worth mentioning that just like any other disputable presumptions or inferences, the presumption of negligence may be rebutted or overcome by other evidence to the contrary. It is unfortunate, however, that respondents failed to present any evidence before the trial court. Thus, the presumption of negligence remains. Consequently, the CA erred in dismissing the complaint for Malayan Insurances adverted failure to prove negligence on the part of respondents. Validity of Subrogation Malayan Insurance contends that there was a valid subrogation in the instant case, as evidenced by the claim check voucher30 and the Release of Claim and Subrogation Receipt31 presented by it before the trial court. Respondents, however, claim that the documents presented by Malayan Insurance do not indicate certain important details that would show proper subrogation. As noted by Malayan Insurance, respondents had all the opportunity, but failed to object to the presentation of its evidence. Thus, and as We have mentioned earlier, respondents are deemed to have waived their right to make an objection. As this Court held in Asian Construction and Development Corporation v. COMFAC Corporation: The rule is that failure to object to the offered evidence renders it admissible, and the court cannot, on its own, disregard such evidence. We note that ASIAKONSTRUCTs counsel of record before the trial court, Atty. Bernard Dy, who actively participated in the initial stages of the case stopped attending the hearings when COMFAC was about to end its presentation. Thus, ASIAKONSTRUCT could not object to COMFACs offer of evidence nor present evidence in its defense; ASIAKONSTRUCT was deemed by the trial court to have waived its chance to do so. Note also that when a party desires the court to reject the evidence offered, it must so state in the form of a timely objection and it cannot raise the objection to the evidence for the first time on appeal. Because of a partys failure to timely object, the evidence becomes part of the evidence in the case. Thereafter, all the parties are considered bound by any outcome arising from the offer of evidence properly presented.32 (Emphasis supplied.) Bearing in mind that the claim check voucher and the Release of Claim and Subrogation Receipt presented by Malayan Insurance are already part of the evidence on record, and since it is not disputed that the insurance company, indeed, paid PhP 700,000 to the assured, then there is a valid subrogation in the case at bar. As explained in Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety Corporation: Subrogation is the substitution of one person by another with reference to a lawful claim or right, so that he who is substituted succeeds to the rights of the other in relation to a debt or claim, including its remedies or securities. The principle covers a situation wherein an insurer has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy. It contemplates full substitution such that it places the party subrogated in the shoes of the creditor, and he may use all means that the creditor could employ to enforce payment.1wphi1

We have held that payment by the insurer to the insured operates as an equitable assignment to the insurer of all the remedies that the insured may have against the third party whose negligence or wrongful act caused the loss. The right of subrogation is not dependent upon, nor does it grow out of, any privity of contract. It accrues simply upon payment by the insurance company of the insurance claim. The doctrine of subrogation has its roots in equity. It is designed to promote and to accomplish justice; and is the mode that equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and good conscience, ought to pay. 33 Considering the above ruling, it is only but proper that Malayan Insurance be subrogated to the rights of the assured. WHEREFORE, the petition is hereby GRANTED. The CAs July 28, 2010 Decision and October 29, 2010 Resolution in CA-G.R. CV No. 93112 are hereby REVERSED and SET ASIDE. The Decision dated February 2, 2009 issued by the trial court in Civil Case No. 99-95885 is hereby REINSTATED. No pronouncement as to cost. SO ORDERED.

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