1

EN BANC As on the night of November 20, 1995 accused-appellant was out with
G.R. No. 131516 March 5, 2003
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
RONNIE RULLEPA Y GUINTO, accused-appellant.
CARPIO MORALES, J.:
On complaint of Cyra May Francisco Buenafe, accused-appellant Ronnie
Rullepa y Guinto was charged with Rape before the Regional Trial Court
(RTC) of Quezon City allegedly committed as follows:
That on or about the 17th day of November, 1995, in Quezon City,
Philippines, the said accused, by means of force and intimidation,
to wit: by then and there willfully, unlawfully and feloniously
removing her parity, kissing her lips and vagina and thereafter
rubbing his penis and inserting the same to the inner portion of the
vagina of the undersigned complainant, 3 years of age, a minor,
against her will and without her consent. 1
Gloria's husband Col. Buenafe,4 she waited until their arrival at past 11:00
p.m. Gloria then sent accused-appellant out on an errand and informed her
husband about their daughter's plaint. Buenafe thereupon talked to Cyra
May who repeated what she had earlier told her mother Gloria.
When accused-appellant returned, Buenafe and Gloria verified from him
whether what Cyra May had told them was true. Ronnie readily admitted
doing those things but only once, at 4:00 p.m. of November 17, 1995 or
three days earlier. Unable to contain her anger, Gloria slapped accused-
appellant several times.
Since it was already midnight, the spouses waited until the following
morning to bring accused-appellant to Camp Karingal where he admitted
the imputations against him, on account of which he was detained. Gloria's
sworn statement5 was then taken.6
Recalling what accused-appellant did to her, Cyra May declared at the
witness stand: "Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa
bunganga," thus causing her pain and drawing her to cry. She added that
accused-appellant did these to her twice in his bedroom.

Arraigned on January 15, 1996, accused-appellant pleaded not guilty. 2
From the testimonies of its witnesses, namely Cyra May, 3 her mother Gloria
Francisco Buenafe, Dr. Cristina V. Preyra, and SPO4 Catherine Borda, the
prosecution established the following facts:
On November 20, 1995, as Gloria was about to set the table for dinner at
her house in Quezon City, Cyra May, then only three and a half years old,
told her, "Mama, si kuya Ronnie lagay niya titi niya at sinaksak sa puwit at
sa bibig ko."
"Kuya Ronnie" is accused-appellant Ronnie Rullepa, the Buenafes' house
boy, who was sometimes left with Cyra May at home.
Dr. Ma. Cristina V. Preyra, the Medico-Legal Officer and Chief of the
Biological Science Branch of the Philippine National Police Crime
Laboratory who examined Cyra May, came up with her report dated
November 21, 1995,7 containing the following findings and conclusions:
FINDINGS:
GENERAL AND EXTRA GENITAL:
Fairly developed, fairly nourished and coherent female child
subject. Breasts are undeveloped. Abdomen is flat and soft.
GENITAL:

Gloria asked Cyra May how many times accused-appellant did those things
to her, to which she answered many times. Pursuing, Gloria asked Cyra
May what else he did to her, and Cyra May indicated the room where
accused-appellant slept and pointed at his pillow.
 2

There is absence of pubic hair. Labia majora are full, convex and
coaptated with congested and abraded labia minora
presenting in between. On separating the same is disclosed an
abraded posterior fourchette and an elastic, fleshy type intact
hymen. External vaginal orifice does not admit the tip of the
examining index finger.
CONCLUSION:
Subject is in virgin state physically.
There are no external signs of recent application of any form of trauma at
the time of examination. (Emphasis supplied.)
By Dr. Preyra's explanation, the abrasions on the labia minora could have
been caused by friction with an object, perhaps an erect penis. She
doubted if riding on a bicycle had caused the injuries. 8
The defense's sole witness was accused-appellant, who was 28 and single
at the time he took the witness stand on June 9, 1997. He denied having
anything to do with the abrasions found in Cyra May's genitalia, and
claimed that prior to the alleged incident, he used to be ordered to buy
medicine for Cyra May who had difficulty urinating. He further alleged that
after he refused to answer Gloria's queries if her husband Buenafe, whom
he usually accompanied whenever he went out of the house, was
womanizing, Gloria would always find fault in him. He suggested that
Gloria was behind the filing of the complaint. Thus:
q And how about the present complaint filed against you, the
complaint filed by the mother of the victim?
a I did not do it, sir.
q What is the truth, what can you say about this present complaint
filed against you?
a As I said Mrs. Buenafe got mad at me because after I explained to her
that I was going with her gusband (sic) to the children of the husband with
a former marriage.9
Finding for the prosecution, Branch 96 of the Quezon City RTC rendered
judgment, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered finding accused RONNIE
RULLEPA y GUINTO guilty beyond reasonable doubt of rape, and he
is accordingly sentenced to death.
The accused is ordered to pay CYRA MAE BUENAFE the amount of
P40,000.00 as civil indemnity.
Costs to be paid by the accused.10 (Italics in the original.)
Hence, this automatic review, accused-appellant assigning the following
errors to the trial court:

I
q According to them you caused the abrasions found in her genital?

THE COURT A QUO ERRED IN CONSIDERING AS ADMISSIBLE IN

a That is not true, sir,
EVIDENCE THE ACCUSED-APPELLANT'S ADMISSION.

q If that is not true, what is the truth?

II

a As I have mentioned earlier that before I started working with the family I
THE COURT A QUO ERRED ON (sic) RULING THAT THE ACCUSED-
was sent to Crame to buy medicine for the daughter because she had
APPELLANT'S SILENCE DURING TRIAL AMOUNTED TO AN IMPLIED
difficulty in urinating.
ADMISSION OF GUILT.

q Did you know why the child has difficulty in urinating?

III

a No, I do not know, sir.


THE COURT A QUO ERRED IN FINDING THAT THE GUILT OF THE
ACCUSED-APPELLANT FOR THE CRIME CHARGED HAS BEEN
PROVEN BEYOND REASONABLE DOUBT.
IV
THE COURT A QUO GRAVELY ERRED IN IMPOSING THE SUPREME
PENALTY OF DEATH UPON THE ACCUSED-APPELLANT. 11 (Emphasis
supplied.)
Accused-appellant assails the crediting by the trial court, as the following
portion of its decision shows, of his admission to Gloria of having sexually
assaulted Cyra May:
In addition, the mother asserted that Rullepa had admitted Cyra
Ma[y]'s complaint during the confrontation in the house. Indeed,
according to the mother, the admission was even expressly
qualified by Rullepa's insistence that he had committed the sexual
assault only once, specifying the time thereof as 4:00 pm of
November 17, 1995. That qualification proved that the admission
was voluntary and true. An uncoerced and truthful admission like
this should be absolutely admissible and competent.
Remarkably, the admission was not denied by the accused during
trial despite his freedom to deny it if untrue. Hence, the admission
became conclusive upon him.12 (Emphasis supplied.)
To accused-appellant, the statements attributed to him are inadmissible
since they were made out of fear, having been elicited only after Cyra
May's parents "bullied and questioned him." He thus submits that it was
error for the trial court to take his failure to deny the statements during the
trial as an admission of guilt.
Accused-appellant's submission does not persuade. The trial court
considered his admission merely as an additional ground to convince
itself of his culpability. Even if such admission, as well as the implication of
his failure to deny the same, were disregarded, the evidence suffices to
establish his guilt beyond reasonable doubt.
3
The plain, matter-of-fact manner by which Cyra May described her abuse in
the hands of her Kuya Ronnie is an eloquent testament to the truth of her
accusations. Thus she testified on direct examination:
q Do you recall if Ronnie Rullepa did anything to you?
a Yes, sir.
q What did he do to you?
a "Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga"
q How many times did he do that to you?
a Twice, sir.
q Do you remember when he did these things to you?
a Opo.
q When was that?
a When my mother was asleep, he put he removed my panty and
inserted his penis inside my vagina, my anus and my mouth, sir.
q After your Kuya Ronnie did those things to you what did you feel?
a "Sabi nya ganito (Witness putting her finger in her lips) Nasaktan po
ako at umiyak po ako".
q Did you cry because of hurt?
a Yes.
q What part of your body hurt?
a "Pepe ko po." When I went to the bathroom to urinate, I felt pain in
my organ, sir.13
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Cyra May reiterated her testimony during cross-examination, providing q And after he remove your panty, what did Kuya Ronnie do, what did
more revolting details of her ordeal: he do to you?

q So, you said that Kuya Ronnie did something to you what did he do a He inserted his penis to my organ, sir.
to you on November 17, 1995?
q Why did kuya Ronnie, was kuya Ronnie already naked or he was
a "Sinaksak nga yong titi nya". He inserted his penis to my organ and already wearing any clothing?
to my mouth, sir.
a Still had his clothing on, sir.
q When you said that your kuya Ronnie inserted his penis into your
organ, into your mouth, and into your anus, would you describe what his q So, where did his penis, saan lumabas ang penis ni Kuya Ronnie?
penis?
a Dito po, (Witness referring or pointing to her groin area)
a It is a round object, sir.
q So, that's the and at the time, you did not cry and you did not
Court: shout for help?

Is this titi of your kuya Ronnie a part of his body? a Sabi nya po, not to make any noise because my mother might be
roused from sleep.
a Opo.
q How long was kuya Ronnie did that to you?
q Was that in the head of kuya Ronnie?
a Matagal po.
a No, sir.
q After kuya Ronnie scrub his penis to your vagina, what other things
q Which part of his body that titi located? did he do?

(Witness pointing to her groin area) a After that he inserted his penis to my mouth, and to my anus, sir.

Court: q You did not complain and you did not shout?

Continue a I cried, sir.14

q Why were you in that room? Accused-appellant draws attention to the statement of Cyra May that he
was not in the house on November 17 (1995), as reflected in the following
a Gusto nya po matulog ako sa kuwarto niya. transcript of her testimony:

q When you were in that room, what did Kuya Ronnie do to you? q Is it not a fact that you said a while ago that when your father
leaves the house, he [was] usually accompanied by your kuya Ronnie?
a "Hinubo po niya ang panty ko."

a Opo.
q Why is it that Kuya Ronnie was in the house when your father left
the house at that time, on November 17?
a He was with Kuya Ronnie, sir.
q So, it is not correct that kuya Ronnie did something to you because
your kuya Ronnie [was] always with your Papa?
a Yes, sir.15
The above-quoted testimony of Cyra May does not indicate the time when
her father Col. Buenafe left their house on November 17, 1995 with
accused-appellant and, thus, does not preclude accused-appellant's
commission of rape on the same date. In any event, a young child is
vulnerable to suggestion, hence, her affirmative response to the defense
counsel's above-quoted leading questions.
As for the variance in the claim regarding when Gloria was informed of the
rape, Gloria having testified that she learned of it on November 20, 1995 16
while Cyra May said that immediately after the incident, she awakened her
mother who was in the adjacent room and reported it: 17 This is a minor
matter that does not detract from Cyra May's categorical, material
testimony that accused-appellant inserted his penis into her vagina.
Accused-appellant goes on to contend that Cyra May was coached, citing
the following portion of her testimony:
q "Yong sinabi mong sinira nya ang buhay mo," where did you get that
phrase?
a It was the word of my Mama, sir.18
On the contrary, the foregoing testimony indicates that Cyra May was
really narrating the truth, that of hearing her mother utter "sinira niya ang
buhay mo."
Accused-appellant's suggestion that Cyra May merely imagined the things
of which he is accused, perhaps getting the idea from television programs,
is preposterous. It is true that "the ordinary child is a `great weaver of
5
romances,"' and her "imagination may induce (her) to relate something
she has heard or read in a story as personal experience." 19 But Cyra May's
account is hardly the stuff of romance or fairy tales. Neither is it normal TV
fare, if at all.
This Court cannot believe that a victim of Cyra May's age could concoct a
tale of defloration, allow the examination of her private parts, and undergo
the expense, trouble, inconvenience, not to mention the trauma of public
trial."20
Besides, her testimony is corroborated by the findings of Dr. Preyra that
there were abrasions in her labia minora, which she opined, could have
been caused by friction with an erect penis.
This Court thus accords great weight to the following assessment of the
trial court regarding the competency and credibility of Cyra May as a
witness:
Her very tender age notwithstanding, Cyra Ma(y) nonetheless
appeared to possess the necessary intelligence and perceptiveness
sufficient to invest her with the competence to testify about her
experience. She might have been an impressionable child as all
others of her age are but her narration of Kuya Ronnie's placing
his "titi" in her "pepe" was certainly one which could not be
considered as a common child's tale. Her responses during the
examination of counsel and of the Court established her
consciousness of the distinction between good and bad, which
rendered inconceivable for her to describe a "bad" act of the
accused unless it really happened to her. Needless to state, she
described the act of the accused as bad. Her demeanor as a
witness manifested during trial by her unhesitant, spontaneous,
and plain responses to questions further enhanced her claim to
credit and trustworthiness.21 (Italics in the original.)
In a futile attempt at exculpation, accused-appellant claims that even
before the alleged incident Cyra May was already suffering from pain in
urinating. He surmises that she could have scratched herself which caused
the abrasions. Dr. Preyra, however, was quick to rule out this possibility.
She stated categorically that that part of the female organ is very sensitive
and rubbing or scratching it is painful.22 The abrasions could not, therefore,
have been self-inflicted.

That the Medical-Legal Officer found "no external signs of recent
application of any form of trauma at the time of the examination" does not
preclude accused-appellant's conviction since the infliction of force is
immaterial in statutory rape.23
More. That Cyra May suffered pain in her vagina but not in her anus
despite her testimony that accused-appellant inserted his penis in both
orifices does not diminish her credibility. It is possible that accused-
appellant's penis failed to penetrate her anus as deeply as it did her
vagina, the former being more resistant to extreme forces than the latter.
Accused-appellant's imputation of ill motive on the part of Gloria is puerile.
No mother in her right mind would subject her child to the humiliation,
disgrace and trauma attendant to a prosecution for rape if she were not
motivated solely by the desire to incarcerate the person responsible for the
child's defilement.24 Courts are seldom, if at all, convinced that a mother
would stoop so low as to subject her daughter to physical hardship and
shame concomitant to a rape prosecution just to assuage her own hurt
feelings.25
Alternatively, accused-appellant prays that he be held liable for acts of
lasciviousness instead of rape, apparently on the basis of the following
testimony of Cyra May, quoted verbatim, that he merely "scrubbed" his
penis against her vagina:
q Is it not a fact that kuya Ronnie just made some scrubbed his penis
into your vagina?
a Yes, Sir.
q And when he did not actually penetrated your vagina?
a Yes, sir.26
Dr. Preyra, however, found abrasions in the labia minora, which is "directly
beneath the labia majora,"27 proving that there was indeed penetration of
the vagina, not just a mere rubbing or "scrubbing" of the penis against its
surface.
In fine, the crime committed by accused-appellant is not merely acts of
lasciviousness but statutory rape.
6
The two elements of statutory rape are (1) that the accused had carnal
knowledge of a woman, and (2) that the woman is below twelve years of
age.28 As shown in the previous discussion, the first element, carnal
knowledge, had been established beyond reasonable doubt. The same is
true with respect to the second element.
The victim's age is relevant in rape cases since it may constitute an
element of the offense. Article 335 of the Revised Penal Code, as amended
by Republic Act No. 7659,29 provides:
Art. 335. When and how rape is committed. Rape is committed by
having carnal knowledge of a woman under any of the following
circumstances:
3. When the woman is under twelve years of age . . .
The crime of rape shall be punished by reclusion perpetua.
Furthermore, the victim's age may constitute a qualifying circumstance,
warranting the imposition of the death sentence. The same Article states:
The death penalty shall also be imposed if the crime of rape is
committed with any of the following attendant circumstances:
1. when the victim is under eighteen (18) years of age and the
offender is a parent, ascendant, step-parent, guardian, relative by
consanguinity or affinity with the third civil degree, or the common-
law spouse of the parent of the victim:
4. when the victim is . . . a child below seven (7) years old.
Because of the seemingly conflicting decisions regarding the sufficiency of
evidence of the victim's age in rape cases, this Court, in the recently
decided case of People v. Pruna,30 established a set of guidelines in
appreciating age as an element of the crime or as a qualifying
circumstance, to wit:
1. The best evidence to prove the age of the offended party is an
original or certified true copy of the certificate of live birth of such
party.

2. In the absence of a certificate of live birth, similar authentic
documents such as baptismal certificate and school records which
show the date of birth of the victim would suffice to prove age.
3. If the certificate of live birth or authentic document is shown to
have been lost or destroyed or otherwise unavailable, the
testimony, if clear and credible, of the victim's mother or a
member of the family either by affinity or consanguinity who is
qualified to testify on matters respecting pedigree such as the
exact age or date of birth of the offended party pursuant to Section
40, Rule 130 of the Rules on Evidence shall be sufficient under the
following circumstances:
a. If the victim is alleged to be below 3 years of age and
what is sought to be proved is that she is less than 7 years
old;
b. If the victim is alleged to be below 7 years of age and
what is sought to be proved is that she is less than 12
years old;
c. If the victim is alleged to be below 12 years of age and what is
sought to be proved is that she is less than 18 years old.
4. In the absence of a certificate of live birth, authentic document,
or the testimony of the victim's mother or relatives concerning the
victim's age, the complainant's testimony will suffice provided that
it is expressly and clearly admitted by the accused.
5. It is the prosecution that has the burden of proving the age of
the offended party. The failure of the accused to object to the
testimonial evidence regarding age shall not be taken against him.
6. The trial court should always make a categorical finding as to
the age of the victim.
Applying the foregoing guidelines, this Court in the Pruna case held that
the therein accused-appellant could only be sentenced to suffer the
penalty of reclusion perpetua since:
7
. . . no birth certificate or any similar authentic document, such as
a baptismal certificate of LIZETTE, was presented to prove her age.
....
However, the Medico-Legal Report relied upon by the trial court
does not in any way prove the age of LIZETTE, for there is nothing
therein which even mentions her age. Only testimonial evidence
was presented to establish LIZETTE's age. Her mother, Jacqueline,
testified (that the victim was three years old at the time of the
commission of the crime).
Likewise, LIZETTE testified on 20 November 1996, or almost two
years after the incident, that she was 5 years old. However, when
the defense counsel asked her how old she was on 3 January 1995,
or at the time of the rape, she replied that she was 5 years old.
Upon further question as to the date she was born, she could not
answer.
For PRUNA to be convicted of rape in its qualified form and meted
the supreme penalty of death, it must be established with certainty
that LIZETTE was below 7 years old at the time of the commission
of the crime. It must be stressed that the severity of the death
penalty, especially its irreversible and final nature once carried out,
makes the decision-making process in capital offenses aptly
subject to the most exacting rules of procedure and evidence.
In view of the uncertainty of LIZETTE's exact age, corroborative
evidence such as her birth certificate, baptismal certificate or any
other authentic document should be introduced in evidence in
order that the qualifying circumstance of "below seven (7) years
old" is appreciated against the appellant. The lack of objection on
the part of the defense as to her age did not excuse the
prosecution from discharging its burden. That the defense invoked
LIZETTE's tender age for purposes of questioning her competency
to testify is not necessarily an admission that she was below 7
years of age when PRUNA raped her on 3 January 1995. Such being
the case, PRUNA cannot be convicted of qualified rape, and hence
the death penalty cannot be imposed on him.
However, conformably with no. 3 (b) of the foregoing guidelines,
the testimony of LIZETTE's mother that she was 3 years old at the
time of the commission of the crime is sufficient for purposes of

holding PRUNA liable for statutory rape, or rape of a girl below 12
years of age. Under the second paragraph of Article 335, as
amended by R.A. No. 7659, in relation to no. 3 of the first
paragraph thereof, having carnal knowledge of a woman under 12
years of age is punishable by reclusion perpetua. Thus, the penalty
to be imposed on PRUNA should be reclusion perpetua, and not
death penalty. (Italics in the original.)
Several cases31 suggest that courts may take "judicial notice" of the
appearance of the victim in determining her age. For example, the Court,
in People v. Tipay,32 qualified the ruling in People v. Javier,33 which required
the presentation of the birth certificate to prove the rape victim's age, with
the following pronouncement:
This does not mean, however, that the presentation of the
certificate of birth is at all times necessary to prove minority. The
minority of a victim of tender age who may be below the age of ten
is quite manifest and the court can take judicial notice thereof. The
crucial years pertain to the ages of fifteen to seventeen where
minority may seem to be dubitable due to one's physical
appearance. In this situation, the prosecution has the burden of
proving with certainty the fact that the victim was under 18 years
of age when the rape was committed in order to justify the
imposition of the death penalty under the above-cited provision.
(Emphasis supplied.)
On the other hand, a handful of cases 34 holds that courts, without the
requisite hearing prescribed by Section 3, Rule 129 of the Rules of Court, 35
cannot take judicial notice of the victim's age.
Judicial notice signifies that there are certain "facta probanda," or
propositions in a party's case, as to which he will not be required to offer
evidence; these will be taken for true by the tribunal without the need of
evidence.36 Judicial notice, however, is a phrase sometimes used in a loose
way to cover some other judicial action. Certain rules of Evidence, usually
known under other names, are frequently referred to in terms of judicial
notice.37
The process by which the trier of facts judges a person's age from his or
her appearance cannot be categorized as judicial notice. Judicial notice is
based upon convenience and expediency for it would certainly be
superfluous, inconvenient, and expensive both to parties and the court to
8
require proof, in the ordinary way, of facts which are already known to
courts.38 As Tundag puts it, it "is the cognizance of certain facts which
judges may properly take and act on without proof because they already
know them." Rule 129 of the Rules of Court, where the provisions
governing judicial notice are found, is entitled "What Need Not Be Proved."
When the trier of facts observes the appearance of a person to ascertain
his or her age, he is not taking judicial notice of such fact; rather, he is
conducting an examination of the evidence, the evidence being the
appearance of the person. Such a process militates against the very
concept of judicial notice, the object of which is to do away with the
presentation of evidence.
This is not to say that the process is not sanctioned by the Rules of Court;
on the contrary, it does. A person's appearance, where relevant, is
admissible as object evidence, the same being addressed to the senses of
the court. Section 1, Rule 130 provides:
SECTION 1. Object as evidence. Objects as evidence are those
addressed to the senses of the court. When an object is relevant to
the fact in issue, it may be exhibited to, examined or viewed by the
court.
"To be sure," one author writes, "this practice of inspection by the court of
objects, things or persons relevant to the fact in dispute, has its roots in
ancient judicial procedure."39 The author proceeds to quote from another
authority:
"Nothing is older or commoner in the administration of law in all
countries than the submission to the senses of the tribunal itself,
whether judge or jury, of objects which furnish evidence. The view
of the land by the jury, in real actions, of a wound by the judge
where mayhem was alleged, and of the person of one alleged
to be an infant, in order to fix his age, the inspection and
comparison of seals, the examination of writings, to determine,
whether they are (`)blemished,(') the implements with which a
crime was committed or of a person alleged, in a bastardy
proceeding, to be the child of another, are few illustrations of what
may be found abundantly in our own legal records and textbooks
for seven centuries past."40 (Emphasis supplied.)
A person's appearance, as evidence of age (for example, of infancy, or of
being under the age of consent to intercourse), is usually regarded

as relevant; and, if so, the tribunal may properly observe the person
brought before it.41 Experience teaches that corporal appearances are
approximately an index of the age of their bearer, particularly for the
marked extremes of old age and youth. In every case such evidence should
be accepted and weighed for what it may be in each case worth. In
particular, the outward physical appearance of an alleged minor may be
considered in judging his age; a contrary rule would for such an inference
be pedantically over-cautious.42 Consequently, the jury or the court trying
an issue of fact may be allowed to judge the age of persons in court by
observation of such persons.43 The formal offer of the person as evidence is
not necessary. The examination and cross-examination of a party before
the jury are equivalent to exhibiting him before the jury and an offer of
such person as an exhibit is properly refused.44
This Court itself has sanctioned the determination of an alien's age from
his appearance. In Braca v. Collector of Customs,45 this Court ruled that:
The customs authorities may also determine from the personal appearance
of the immigrant what his age is. The person of a Chinese alien seeking
admission into the Philippine Islands is evidence in an investigation by the
board of special inquiry to determine his right to enter; and such body may
take into consideration his appearance to determine or assist in
determining his age and a finding that the applicant is not a minor based
upon such appearance is not without evidence to support it.
This Court has also implicitly recognized the same process in a criminal
case. Thus, in United States v. Agadas,46 this Court held:
Rosario Sabacahan testified that he was 17 years of age; that he
had never purchased a cedula; and that he was going to purchase
a cedula the following January. Thereupon the court asked this
defendant these questions: "You are a pretty big boy for
seventeen." Answer: "I cannot tell exactly because I do not
remember when I was born, but 17 years is my guess." Court: "If
you are going to take advantage of that excuse, you had better get
some positive evidence to that effect." Answer: "I do not
remember, as I already stated on what date and in what year I was
born." The court, in determining the question of the age of the
defendant, Rosario Sabacahan, said:
"The defendant, Rosario Sabacahan, testified that he
thought that he was about 17 years of age, but judging
9
by his appearance he is a youth 18 or 19 years old. He
has shown that he has no positive information on the
subject and no effort was made by the defense to prove
the fact that he is entitled to the mitigating circumstance
of article 9, paragraph 2, of the Penal code, which fact it is
held to be incumbent upon the defense to establish by
satisfactory evidence in order to enable the court to give
an accused person the benefit of the mitigating
circumstance."
In United States vs. Estavillo and Perez (10 Off. Gaz., 1984)
Estavillo testified, when the case was tried in the court below, that
he then was only 16 years of age. There was no other testimony in
the record with reference to his age. But the trial judge said: "The
accused Estavillo, notwithstanding his testimony giving his age as
16 years, is, as a matter of fact, not less than 20." This court, in
passing upon the age of Estavillo, held:
"We presume that the trial court reached this conclusion
with reference to the age of Estavillo from the latter's
personal appearance. There is no proof in the record, as we
have said, which even tends to establish the assertion that
this appellant understated his age. . . . It is true that the
trial court had an opportunity to note the personal
appearance of Estavillo for the purpose of determining his
age, and by so doing reached the conclusion that he was at
least 20, just two years over 18. This appellant testified
that he was only 16, and this testimony stands
uncontradicted. Taking into consideration the marked
difference in the penalties to be imposed upon that age,
we must, therefore, conclude (resolving all doubts in favor
of the appellants) that the appellants' ages were 16 and 14
respectively."
While it is true that in the instant case Rosario testified that he was
17 years of age, yet the trial court reached the conclusion, judging
from the personal appearance of Rosario, that "he is a youth 18 or
19 years old." Applying the rule enunciated in the case just cited,
we must conclude that there exists a reasonable doubt, at least,
with reference to the question whether Rosario was, in fact 18
years of age at the time the robbery was committed. This doubt
must be resolved in favor of the defendant, and he is, therefore,

sentenced to six months of arresto mayor in lieu of six years ten
months and one day of presidio mayor. . . . .
There can be no question, therefore, as to the admissibility of a person's
appearance in determining his or her age. As to the weight to accord such
appearance, especially in rape cases, Pruna laid down guideline no. 3,
which is again reproduced hereunder:
3. If the certificate of live birth or authentic document is shown to
have been lost or destroyed or otherwise unavailable, the
testimony, if clear and credible, of the victim's mother or a
member of the family either by affinity or consanguinity who is
qualified to testify on matters respecting pedigree such as the
exact age or date of birth of the offended party pursuant to Section
40, Rule 130 of the Rules on Evidence shall be sufficient under the
following circumstances:
a. If the victim is alleged to be below 3 years of age and
what is sought to be proved is that she is less than 7 years
old;
b. If the victim is alleged to be below 7 years of age and
what is sought to be proved is that she is less than 12
years old;
c. If the victim is alleged to be below 12 years of age and
what is sought to be proved is that she is less than 18
years old.
Under the above guideline, the testimony of a relative with respect to the
age of the victim is sufficient to constitute proof beyond reasonable doubt
in cases (a), (b) and (c) above. In such cases, the disparity between the
allegation and the proof of age is so great that the court can easily
determine from the appearance of the victim the veracity of the testimony.
The appearance corroborates the relative's testimony.
As the alleged age approaches the age sought to be proved, the person's
appearance, as object evidence of her age, loses probative value. Doubt as
to her true age becomes greater and, following Agadas, supra, such doubt
must be resolved in favor of the accused.
10
This is because in the era of modernism and rapid growth, the
victim's mere physical appearance is not enough to gauge her
exact age. For the extreme penalty of death to be upheld, nothing
but proof beyond reasonable doubt of every fact necessary to
constitute the crime must be substantiated. Verily, the minority of
the victim should be not only alleged but likewise proved with
equal certainty and clearness as the crime itself. Be it remembered
that the proof of the victim's age in the present case spells the
difference between life and death. 47
In the present case, the prosecution did not offer the victim's certificate of
live birth or similar authentic documents in evidence. The victim and her
mother, however, testified that she was only three years old at the time of
the rape. Cyra May's testimony goes:
q Your name is Cyra Mae is that correct?
a Yes, sir.
q And you are 3 years old?
a Yes, sir.48
That of her mother goes:
Q How old was your daughter when there things happened?
A 3 and years old.
Q When was she born?
A In Manila, May 10, 1992.49
Because of the vast disparity between the alleged age (three years old)
and the age sought to be proved (below twelve years), the trial court would
have had no difficulty ascertaining the victim's age from her appearance.
No reasonable doubt, therefore, exists that the second element of
statutory rape, i.e., that the victim was below twelve years of age at the
time of the commission of the offense, is present.
 11

Whether the victim was below seven years old, however, is another matter.
Here, reasonable doubt exists. A mature three and a half-year old can
easily be mistaken for an underdeveloped seven-year old. The appearance
of the victim, as object evidence, cannot be accorded much weight and,
following Pruna, the testimony of the mother is, by itself, insufficient.

As it has not been established with moral certainty that Cyra May was
below seven years old at the time of the commission of the offense,
accused-appellant cannot be sentenced to suffer the death penalty. Only
the penalty of reclusion perpetua can be imposed upon him.

In line with settled jurisprudence, the civil indemnity awarded by the trial
court is increased to P50,000.00. In addition, Cyra May is entitled to an
award of moral damages in the amount of P50,000.00.50

WHEREFORE, the Decision of the Regional Trial Court of Quezon City,

Branch 96, is AFFIRMED with MODIFICATION. Accused-appellant Ronnie
Rullepa y Guinto is found GUILTY of Statutory Rape, defined and punished
by Article 335 (3) of the Revised Penal Code, as amended, and is
sentenced to suffer the penalty of reclusion perpetua. He is ordered to pay
private complainant, Cyra May Buenafe y Francisco, the amount of
P50,000.00 as civil indemnity and P50,000.00 as moral damages.

SO ORDERED.
 12

SECOND DIVISION
[G.R. No. L-36638. June 28, 1974.]
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ALEXANDER
SACABIN @ "ROMEO", Defendant-Appellant.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General
Jaime M. Lantin and Solicitor Renato S. Puno for Plaintiff-Appellee.
Pio A. Sepulveda, for Defendant-Appellant.
Erlinda testified that around 8:00 oclock in the evening of November 23,
1968, she was enticed by one Teodelita Dagondon to go to the
supermarket. Teodelita said she was going to buy for her birthday the
following day all of Erlindas bread and cakes. They went upstairs to one of
the rooms of the Laya Building where they would agree on the price of the
bread and cakes. The appellant was then there inside. The door was closed
and appellant was able to have sexual intercourse with her two times.
This is the version of Erlinda on how the rape was consummated: 4
"A Sacabin went near me and wrestled me.

DECISION Q What did you do when Romeo Sacabin wrestled you?

A I wanted to get away from his hold.

FERNANDEZ, J.:
Q Did you shout for help?

A Yes, I shouted for help.

Convicted of rape and sentenced to suffer the penalty of reclusion
perpetua 1 and to pay the offended party, Erlinda Montibon, P3,000.00 for
Q Did you submit to the urgings of the accused in this case?
moral damages and P3,000.00 for exemplary damages, appellant
Alexander Sacabin has appealed to this Court and now pleads for acquittal
A No, sir.
on the ground, which the lower court overruled, that although he really had
sexual intercourse with the offended party, she voluntarily and willingly
Q What did you do?
acceded to it because they were sweethearts.
A We were wrestling for sometime. In fact he smell(ed) wine.
This is a classic case of rape where, on the issue of whether or not the
woman was raped, the only eye-witnesses testifying are the offended party
Q Could you inform this Court more how long did you wrestle with Sacabin?
for the prosecution and the accused in his defense. Thus, the judicial
observation has been made long ago, that rape is hard to be proved, but
A Quite a long time before he got me.
still harder to be defended. And in the case at bar, We cannot be aided by
the general rule that the findings of fact of the trial judge must be
Q During all the time that you were wrestling with him, did you not cry out
sustained on appeal because he has had the opportunity to hear and see
for help outside?
the witnesses when they testified before him, for all the witnesses for the
prosecution testified before one trial Judge 2 , while the appellant
A I shouted for help but nobody hear me because all the windows were
presented his evidence consisting of his lone testimony before another
closed.
Judge 3 , and the latter was the one that rendered the decision appealed
from. We, therefore, reviewed and evaluated all the evidence on record
Q What about the door?
with extra care.
A It was also closed.
On the date of the commission of the offense, November 23, 1968, Erlinda
Montibon was barely over 15 years old. She finished sixth grade. She was
Q Please inform this Honorable Court if after all the wrestling by Sacabin
then living in the house of the spouses Patrolman and Mrs. Constancio
and your feminine resistance if Sacabin was able to have a sexual
Villondo as a helper. She knew the appellant, then single and 22 years old.
intercourse with you.
He was a laborer in the Laya Building in Iligan City, then under
construction, and was a usual buyer of native bread and cakes which
A Yes, he trapped one of my legs and I fell on the ground and then he sat
Erlinda used to sell at the supermarket nearby.
 13

on me. A Nearing dawn.

Q What did you feel when Romeo Sacabin was able to introduce his sexual Q In the same place?
organ into your vagina?
A In the same place.
A Pain.
Q The second time when the accused tried to make sexual intercourse with
Q After he made the insertion, what did he do if any? you your already yielded your body to him.

A He also kissed me and squeezed my mammary gland. A No, sir.

COURT:chanrob1es virtual 1aw library Q What did you do?

Make it on record that the witness is crying. A I also wrestled with him because I felt the pain.

Q When he succeeded in introducing his penis into your vagina, what did Q When you wrestled with him, did you not occur to your mind to renew
he do if any? your call for help from outside?

A He also pushed and pull his organ. A I also shouted for help . . .

Q For how long was the push and pull motion made by this Romeo Q Was Sacabin able to introduce his sexual organ into your vagina for the
Sacabin? second time?

A Quite a few minutes . . .
Q Please inform this Honorable Court if after the introduction of the penis
and the push and pull motion if you felt some liquid getting inside your
vagina.
A Yes, because he rode on me for the second time and I was already weak
and I dont want it because it was painful.
Q Did it not occur to your mind to appeal to this Alexander Sacabin to
please pity you because you were feeling pain in your body?

A There was, sir. A I asked Romeo not to because it was painful and then Romeo said never
mind just allow me because anyway I will marry you.
Q After that, what happened? Please inform this Honorable Court.
Appellant Alexander Sacabin declared that he was 22 years old, single and
A After that Romeo Sacabin left the room but be was in the other room. a mason by occupation. He saw Erlinda in the evening of that date. The
two of them ate and drank at Elizas restaurant, which was at the Iligan
Q What did you do after he left? Supermarket, in front of which was the Laya Building. From the restaurant,
they went to her house owned by her master, Patrolman Villondo. While in
A I was still crying . . . the house, Erlinda told him that she wanted to go with him. He left and
Erlinda followed him to the Laya Building where he used to sleep. He was
Q Was that the only sexual intercourse that was done on you by the working there as a laborer and the building was still under construction.
accused Alexander Sacabin? When they arrived at the Laya Building, he told Erlinda that he would go to
Cagayan upon the termination of his work. Erlinda told him that she would
A Two times. go with him to Cagayan. 5

COURT:chanrob1es virtual 1aw library "q What was your answer, if any, when she told you that she is going to
Cagayan with you?
When was the second time?
a I answered, yes, really you love me?

q What was her answer, if any?
a Yes, I love you.
q By the way, you have stated before this Court that you are sweethearts
with Erlinda, when did you become sweethearts?
a While I was working at Laya building this Erlinda was selling
refreshments.
q Where was she selling refreshments?
a Sometime she bring refreshments at Laya building.
q More or less, can you tell the Court what time when was that when your
love was accepted by Erlinda?
a August 2, 1968.
q Did you consider that you were sweethearts, did you receive anything
from her, some sort of letters or tokens?
a I did not ask anything because we used to see each other and I did not
ask any remembrance from her because she is poor like myself."cralaw
virtua1aw library
Erlinda then told appellant that she loved him. They slept together in a
room upstairs in the Laya Building. In the room where they slept, there
were no tenants for that particular unit of the apartment. But there were
already electric lights inside that room. They slept on a bed made of
plywood. They had two sexual intercourse, the first time from 8:00 to 9:00
oclock p.m., and the second in the early morning. They had already one
sexual intercourse about one week prior to November 23, 1968, also at the
Laya Building. At that time, she was getting water. 6
After a very careful review of the evidence, We affirm the lower courts
finding that the version of the offended party is the one that should be
believed over that of the Appellant.
The offended party, Erlinda, was a young provinciana, barely over 15 years
of age, uncouth and almost unlettered, was a mere household helper but
at the same time engaged in the selling of native bread and cakes. She
belonged to the poor and was one of them, and was still possessed of the
traditional and proverbial modesty of the Filipina, especially the
provinciana. She would not have filed a complaint for rape and suffered the
torment if not the ignominy of having to testify in a court of justice about
the wrong done to her, if in truth she was not really raped.
14
Early in the morning of November 24, 1968, she was brought by the
appellant to his fathers house in Rosario Heights. She went with him
because she was threatened with death if she would not do so. Patrolman
Villondo was already there because he was previously informed that
Erlinda failed to return to their house and that appellant was the one that
brought her. And according to Erlinda, she did not tell Patrolman Villondo
that she was raped as she was "ashamed to tell him because he is a man."
And at that time, Villondos wife was in Cebu. But when she arrived about
six days later, she was at once informed by Erlinda that appellant raped
her.
And immediately thereafter, he was brought to the medico legal officer of
Iligan City, Dr. Manuel Simon, who testified that on December 2, 1968, he
examined the offended party, found lacerations in her hymen, in positions
10 and 8 oclock, which had just recently healed (a laceration heals in 7
days). The lacerations could not have been more than one month old
"because at the edge of the lacerations, the color was reddish and
therefore they have healed recently."cralaw virtua1aw library
Physical evidence is evidence of the highest order. It speaks more
eloquently than a hundred witnesses. And the physical evidence in this
case strongly corroborates the testimony of the offended party that she
was raped. They consist of the green color dress and the panty that Erlinda
was wearing at the time she was raped and which show a torn portion of
the left side of the dress and a torn portion of the panty. According to
Erlinda, they were torn when appellant forcibly pulled her dress up and
removed her panty shortly before she was raped. Surprisingly. appellant
did not at all rebut the testimony of Erlinda on this point.
Francisco Bagohin, who was then also residing in the house of Patrolman
and Mrs. Constancio Villondo, he being the drive of the rig owned by the
latter, corroborated the testimony of the offended party, Erlinda, that
Teodelita Dagondon was the one who fetched Erlinda "because the puto
and bread that she is selling will all be bought by Teodelita for the next day
would be her birthday."cralaw virtua1aw library
The testimony of the appellant that he and Erlinda were sweethearts is
unworthy of belief. Erlinda denied vehemently this testimony of the
appellant and even stated that he never courted her. And if they were
really sweethearts, Erlinda would not have filed this serious charge of rape
against him.
IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby
affirmed in its entirety with costs against Appellant.

THIRD DIVISION
G.R. No. 160855 April 16, 2008
CONCEPCION CHUA GAW, petitioner,
vs.
SUY BEN CHUA and FELISA CHUA, respondents.
DECISION
Remedial Law; Evidence; Adverse Witnesses; The rule is that the
plaintiff must rely on the strength of his own evidence and not upon the
weakness of the defendants evidence; Preponderance of evidence is
determined by considering all the facts and circumstances of the case,
culled from the evidence regardless of who actually presented it.
The delineation of a piece of evidence as part of the evidence of one
party or the other is only significant in determining whether the party on
whose shoulders lies the burden of proof was able to meet the quantum of
evidence needed to discharge the burden. In civil cases, that burden
devolves upon the plaintiff who must establish her case by preponderance
of evidence. The rule is that the plaintiff must rely on the strength of his
own evidence and not upon the weakness of the defendants evidence.
Thus, it barely matters who with a piece of evidence is credited. In the end,
the court will have to consider the entirety of the evidence presented by
both parties. Preponderance of evidence is then determined by considering
all the facts and circumstances of the case, culled from the evidence,
regardless of who actually presented it.
Same; Same; Same; Under a rule permitting the impeachment of an
adverse witness, although the calling party does not vouch for the witness
veracity, he is nonetheless bound by his testimony if it is not contradicted
or remains unrebutted.
That the witness is the adverse party does not necessarily mean that
the calling party will not be bound by the formers testimony. The fact
remains that it was at his instance that his adversary was put on the
witness stand. Unlike an ordinary witness, the calling party may impeach
an adverse witness in all respects as if he had been called by the adverse
party, except by evidence of his bad character. Under a rule permitting the
impeachment of an adverse witness, although the calling party does not
15
vouch for the witness veracity, he is nonetheless bound by his testimony if
it is not contradicted or remains unrebutted.
Same; Same; Same; A party who calls his adversary as a witness is not
bound by the latters testimony only in the sense that he may contradict
him by introducing other evidence to prove a state of facts contrary to
what the witness testifies on.
A party who calls his adversary as a witness is, therefore, not bound by
the latters testimony only in the sense that he may contradict him by
introducing other evidence to prove a state of facts contrary to what the
witness testifies on. A rule that provides that the party calling an adverse
witness shall not be bound by his testimony does not mean that such
testimony may not be given its proper weight, but merely that the calling
party shall not be precluded from rebutting his testimony or from
impeaching him. This, the petitioner failed to do.
Same; Same; Best Evidence Rule; A notarized document carries
evidentiary weight as to its due execution and documents acknowledged
before a notary public have in their favor the presumption of regularity.
It is also worthy to note that both the Deed of Partition and the Deed of
Sale were acknowledged before a Notary Public. The notarization of a
private document converts it into a public document, and makes it
admissible in court without further proof of its authenticity. It is entitled to
full faith and credit upon its face. A notarized document carries evidentiary
weight as to its due execution, and documents acknowledged before a
notary public have in their favor the presumption of regularity. Such a
document must be given full force and effect absent a strong, complete
and conclusive proof of its falsity or nullity on account of some flaws or
defects recognized by law. A public document executed and attested
through the intervention of a notary public is, generally, evidence of the
facts therein express in clear unequivocal manner.
Same; Same; Same; The best evidence rule as encapsulated in Rule 130,
Section 3 of the Revised Rules of Civil Procedure applies only when the
content of such document is the subject of the inquiry.
The best evidence rule as encapsulated in Rule 130, Section 3, of the
Revised Rules of Civil Procedure applies only when the content of such
document is the subject of the inquiry. Where the issue is only as to

whether such document was actually executed, or exists, or on the
circumstances relevant to or surrounding its execution, the best evidence
rule does not apply and testimonial evidence is admissible. Any other
substitutionary evidence is likewise admissible without need to account for
the original. Moreover, production
NACHURA, J.:
This is a Petition for Review on Certiorari from the Decision1 of the Court of
Appeals (CA) in CA-G.R. CV No. 66790 and Resolution 2 denying the motion
for reconsideration. The assailed decision affirmed the ruling of the
Regional Trial Court (RTC) in a Complaint for Sum of Money in favor of the
plaintiff.
The antecedents are as follows:
Spouses Chua Chin and Chan Chi were the founders of three business
enterprises3 namely: Hagonoy Lumber, Capitol Sawmill Corporation, and
Columbia Wood Industries. The couple had seven children, namely, Santos
Chua; Concepcion Chua; Suy Ben Chua; Chua Suy Phen; Chua Sioc Huan;
Chua Suy Lu; and Julita Chua. On June 19, 1986, Chua Chin died, leaving
his wife Chan Chi and his seven children as his only surviving heirs. At the
time of Chua Chins death, the net worth of Hagonoy Lumber was
P415,487.20.4
On December 8, 1986, his surviving heirs executed a Deed of Extra-Judicial
Partition and Renunciation of Hereditary Rights in Favor of a Co-Heir5 (Deed
of Partition, for brevity), wherein the heirs settled their interest in Hagonoy
Lumber as follows: one-half (1/2) thereof will pertain to the surviving
spouse, Chan Chi, as her share in the conjugal partnership; and the other
half, equivalent to P207,743.60, will be divided among Chan Chi and the
seven children in equal pro indiviso shares equivalent to P25,967.00 each.6
In said document, Chan Chi and the six children likewise agreed to
voluntarily renounce and waive their shares over Hagonoy Lumber in favor
of their co-heir, Chua Sioc Huan.
In May 1988, petitioner Concepcion Chua Gaw and her husband, Antonio
Gaw, asked respondent, Suy Ben Chua, to lend them P200,000.00 which
they will use for the construction of their house in Marilao, Bulacan. The
parties agreed that the loan will be payable within six (6) months without
interest.7 On June 7, 1988, respondent issued in their favor China Banking
16
Corporation Check No. 2408108 for P200,000.00 which he delivered to the
couples house in Marilao, Bulacan. Antonio later encashed the check.
On August 1, 1990, their sister, Chua Sioc Huan, executed a Deed of Sale
over all her rights and interests in Hagonoy Lumber for a consideration of
P255,000.00 in favor of respondent.9
Meantime, the spouses Gaw failed to pay the amount they borrowed from
respondent within the designated period. Respondent sent the couple a
demand letter,10 dated March 25, 1991, requesting them to settle their
obligation with the warning that he will be constrained to take the
appropriate legal action if they fail to do so.
Failing to heed his demand, respondent filed a Complaint for Sum of Money
against the spouses Gaw with the RTC. The complaint alleged that on June
7, 1988, he extended a loan to the spouses Gaw for P200,000.00, payable
within six months without interest, but despite several demands, the
couple failed to pay their obligation.11
In their Answer (with Compulsory Counterclaim), the spouses Gaw
contended that the P200,000.00 was not a loan but petitioners share in
the profits of Hagonoy Lumber, one of her familys businesses. According
to the spouses, when they transferred residence to Marilao, Bulacan,
petitioner asked respondent for an accounting, and payment of her share
in the profits, of Capital Sawmills Corporation, Columbia Wood Industries
Corporation, and Hagonoy Lumber. They claimed that respondent
persuaded petitioner to temporarily forego her demand as it would offend
their mother who still wanted to remain in control of the family businesses.
To insure that she will defer her demand, respondent allegedly gave her
P200,000.00 as her share in the profits of Hagonoy Lumber. 12
In his Reply, respondent averred that the spouses Gaw did not demand
from him an accounting of Capitol Sawmills Corporation, Columbia Wood
Industries, and Hagonoy Lumber. He asserted that the spouses Gaw, in
fact, have no right whatsoever in these businesses that would entitle them
to an accounting thereof. Respondent insisted that the P200,000.00 was
given to and accepted by them as a loan and not as their share in Hagonoy
Lumber.13
With leave of court, the spouses Gaw filed an Answer (with Amended
Compulsory Counterclaim) wherein they insisted that petitioner, as one of

the compulsory heirs, is entitled to one-sixth (1/6) of Hagonoy Lumber,
which the respondent has arrogated to himself. They claimed that, despite
repeated demands, respondent has failed and refused to account for the
operations of Hagonoy Lumber and to deliver her share therein. They then
prayed that respondent make an accounting of the operations of Hagonoy
Lumber and to deliver to petitioner her one-sixth (1/6) share thereof, which
was estimated to be worth not less than P500,000.00.14
In his Answer to Amended Counterclaim, respondent explained that his
sister, Chua Sioc Huan, became the sole owner of Hagonoy Lumber when
the heirs executed the Deed of Partition on December 8, 1986. In turn, he
became the sole owner of Hagonoy Lumber when he bought it from Chua
Sioc Huan, as evidenced by the Deed of Sale dated August 1, 1990. 15
Defendants, in their reply,16 countered that the documents on which
plaintiff anchors his claim of ownership over Hagonoy Lumber were not
true and valid agreements and do not express the real intention of the
parties. They claimed that these documents are mere paper arrangements
which were prepared only upon the advice of a counsel until all the heirs
could reach and sign a final and binding agreement, which, up to such
time, has not been executed by the heirs.17
During trial, the spouses Gaw called the respondent to testify as adverse
witness under Section 10, Rule 132. On direct examination, respondent
testified that Hagonoy Lumber was the conjugal property of his parents
Chua Chin and Chan Chi, who were both Chinese citizens. He narrated that,
initially, his father leased the lots where Hagonoy Lumber is presently
located from his godfather, Lu Pieng, and that his father constructed the
two-storey concrete building standing thereon. According to respondent,
when he was in high school, it was his father who managed the business
but he and his other siblings were helping him. Later, his sister, Chua Sioc
Huan, managed Hogonoy Lumber together with their other brothers and
sisters. He stated that he also managed Hagonoy Lumber when he was in
high school, but he stopped when he got married and found another job.
He said that he now owns the lots where Hagonoy Lumber is operating. 18
On cross-examination, respondent explained that he ceased to be a
stockholder of Capitol Sawmill when he sold his shares of stock to the other
stockholders on January 1, 1991. He further testified that Chua Sioc Huan
acquired Hagonoy Lumber by virtue of a Deed of Partition, executed by the
heirs of Chua Chin. He, in turn, became the owner of Hagonoy Lumber
17
when he bought the same from Chua Sioc Huan through a Deed of Sale
dated August 1, 1990. 19
On re-direct examination, respondent stated that he sold his shares of
stock in Capitol Sawmill for P254,000.00, which payment he received in
cash. He also paid the purchase price of P255,000.00 for Hagonoy Lumber
in cash, which payment was not covered by a separate receipt as he
merely delivered the same to Chua Sioc Huan at her house in Paso de Blas,
Valenzuela. Although he maintains several accounts at Planters Bank,
Paluwagan ng Bayan, and China Bank, the amount he paid to Chua Sioc
Huan was not taken from any of them. He kept the amount in the house
because he was engaged in rediscounting checks of people from the public
market. 20
On December 10, 1998, Antonio Gaw died due to cardio vascular and
respiratory failure.21
On February 11, 2000, the RTC rendered a Decision in favor of the
respondent, thus:
WHEREFORE, in the light of all the foregoing, the Court hereby
renders judgement ordering defendant Concepcion Chua Gaw to
pay the [respondent] the following:
1. P200,000.00 representing the principal obligation with legal
interest from judicial demand or the institution of the complaint on
November 19, 1991;
2. P50,000.00 as attorneys fees; and
3. Costs of suit.
The defendants counterclaim is hereby dismissed for being devoid
of merit.
SO ORDERED.22
The RTC held that respondent is entitled to the payment of the amount of
P200,000.00 with interest. It noted that respondent personally issued
Check No. 240810 to petitioner and her husband upon their request to lend
them the aforesaid amount. The trial court concluded that the P200,000.00

was a loan advanced by the respondent from his own funds and not
remunerations for services rendered to Hagonoy Lumber nor petitioners
advance share in the profits of their parents businesses.
The trial court further held that the validity and due execution of the Deed
of Partition and the Deed of Sale, evidencing transfer of ownership of
Hagonoy Lumber from Chua Sioc Huan to respondent, was never
impugned. Although respondent failed to produce the originals of the
documents, petitioner judicially admitted the due execution of the Deed of
Partition, and even acknowledged her signature thereon, thus constitutes
an exception to the best evidence rule. As for the Deed of Sale, since the
contents thereof have not been put in issue, the non-presentation of the
original document is not fatal so as to affect its authenticity as well as the
truth of its contents. Also, the parties to the documents themselves do not
contest their validity. Ultimately, petitioner failed to establish her right to
demand an accounting of the operations of Hagonoy Lumber nor the
delivery of her 1/6 share therein.
As for petitioners claim that an accounting be done on Capitol Sawmill
Corporation and Columbia Wood Industries, the trial court held that
respondent is under no obligation to make such an accounting since he is
not charged with operating these enterprises.23
Aggrieved, petitioner appealed to the CA, alleging that the trial court erred
(1) when it considered the amount of P200,000.00 as a loan obligation and
not Concepcions share in the profits of Hagonoy Lumber; (2) when it
considered as evidence for the defendant, plaintiffs testimony when he
was called to testify as an adverse party under Section 10 (e), Rule 132 of
the Rules of Court; and (3) when it considered admissible mere copies of
the Deed of Partition and Deed of Sale to prove that respondent is now the
owner of Hagonoy Lumber.24
On May 23, 2003, the CA affirmed the Decision of the RTC. 25 The appellate
court found baseless the petitioners argument that the RTC should not
have included respondents testimony as part of petitioners evidence. The
CA noted that the petitioner went on a fishing expedition, the taking of
respondents testimony having taken up a total of eleven hearings, and
upon failing to obtain favorable information from the respondent, she now
disclaims the same. Moreover, the CA held that the petitioner failed to
show that the inclusion of respondents testimony in the statement of facts
in the assailed decision unduly prejudiced her defense and counterclaims.
18
In fact, the CA noted that the facts testified to by respondent were
deducible from the totality of the evidence presented.
The CA likewise found untenable petitioners claim that Exhibits "H" (Deed
of Sale) and Exhibit "I" (Deed of Partition) were merely temporary paper
arrangements. The CA agreed with the RTC that the testimony of petitioner
regarding the matter was uncorroborated she should have presented the
other heirs to attest to the truth of her allegation. Instead, petitioner
admitted the due execution of the said documents. Since petitioner did not
dispute the due execution and existence of Exhibits "H" and "I", there was
no need to produce the originals of the documents in accordance with the
best evidence rule.26
On December 2, 2003, the CA denied the petitioners motion for
reconsideration for lack of merit.27
Petitioner is before this Court in this petition for review on certiorari, raising
the following errors:
I. THAT ON THE PRELIMINARY IMPORTANT RELATED ISSUE, CLEAR
AND PALPABLE LEGAL ERROR HAS BEEN COMMITTED IN THE
APPLICATION AND LEGAL SIGNIFICANCE OF THE RULE ON
EXAMINATION OF ADVERSE PARTY OR HOSTILE WITNESS UNDER
SECTION 10 (d) AND (e) OF RULE 132, CAUSING SERIOUS DOUBT
ON THE LOWER COURTS APPEALED DECISIONS OBJECTIVITY,
ANNEX "C".
II. THAT ON THE IMPORTANT LEGAL ISSUE RELATIVE TO THE
AFORESAID TWO OPPOSING CLAIMS OF RESPONDENT AND
PETITIONER, CLEAR AND PALPABLE LEGAL ERROR HAS BEEN
COMMITTED UNDER THE LOWER COURTS DECISION ANNEX "C"
AND THE QUESTIONED DECISION OF MAY 23, 2003 (ANNEX "A")
AND THE RESOLUTION OF DECEMBER 2, 2003, (ANNEX "B") IN
DEVIATING FROM AND DISREGARDING ESTABLISHED SUPREME
COURT DECISIONS ENJOINING COURTS NOT TO OVERLOOK OR
MISINTERPRET IMPORTANT FACTS AND CIRCUMSTANCES,
SUPPORTED BY CLEAR AND CONVINCING EVIDENCE ON RECORD,
AND WHICH ARE OF GREAT WEIGHT AND VALUE, WHICH WOULD
CHANGE THE RESULT OF THE CASE AND ARRIVE AT A JUST, FAIR
AND OBJECTIVE DECISION. (Citations omitted)

III. THAT FINALLY, AS TO THE OTHER LEGAL IMPORTANT ISSUE
RELATIVE TO CLAIM OR OWNERSHIP OF THE "Hagonoy Lumber"
FAMILY BUSINESS, CLEAR AND PALPABLE LEGAL ERROR HAS BEEN
COMMITTED ON THE REQUIREMENTS AND CORRECT APPLICATION
OF THE "BEST EVIDENCE RULE" UNDER SECTION 3, RULE 130 OF
THE REVISED RULES OF COURT.28
The petition is without merit.
Petitioner contends that her case was unduly prejudiced by the RTCs
treatment of the respondents testimony as adverse witness during cross-
examination by his own counsel as part of her evidence. Petitioner argues
that the adverse witness testimony elicited during cross-examination
should not be considered as evidence of the calling party. She contends
that the examination of respondent as adverse witness did not make him
her witness and she is not bound by his testimony, particularly during
cross-examination by his own counsel.29 In particular, the petitioner avers
that the following testimony of the respondent as adverse witness should
not be considered as her evidence:
(11.a) That RESPONDENT-Appellee became owner of the
"HAGONOY LUMBER" business when he bought the same from
Chua Sioc Huan through a Deed of Sale dated August 1, 1990
(EXH.H);
(11.b) That the "HAGONOY LUMBER," on the other hand, was
acquired by the sister Chua Sioc Huan, by virtue of Extrajudicial
Partition and Renunciation of Hereditary Rights in favor of a Co-Heir
(EXH. I);
(11.c) That the 3 lots on which the "HAGONOY LUMBER" business is
located were acquired by Lu Pieng from the Santos family under
the Deed of Absolute Sale (EXH. J); that Lu Pieng sold the Lots to
Chua Suy Lu in 1976 (EXHS. K, L, & M.); that Chua Siok Huan
eventually became owner of the 3 Lots; and in 1989 Chua Sioc
Huan sold them to RESPONDENT-Appellee (EXHS. Q and P); that
after he acquired the 3 Lots, he has not sold them to anyone and
he is the owner of the lots.30
19
We do not agree that petitioners case was prejudiced by the RTCs
treatment of the respondents testimony during cross-examination as her
evidence.
If there was an error committed by the RTC in ascribing to the petitioner
the respondents testimony as adverse witness during cross-examination
by his own counsel, it constitute a harmless error which would not, in any
way, change the result of the case.
In the first place, the delineation of a piece of evidence as part of the
evidence of one party or the other is only significant in determining
whether the party on whose shoulders lies the burden of proof was able to
meet the quantum of evidence needed to discharge the burden. In civil
cases, that burden devolves upon the plaintiff who must establish her case
by preponderance of evidence. The rule is that the plaintiff must rely on
the strength of his own evidence and not upon the weakness of the
defendants evidence. Thus, it barely matters who with a piece of evidence
is credited. In the end, the court will have to consider the entirety of the
evidence presented by both parties. Preponderance of evidence is then
determined by considering all the facts and circumstances of the case,
culled from the evidence, regardless of who actually presented it.31
That the witness is the adverse party does not necessarily mean that the
calling party will not be bound by the formers testimony. The fact remains
that it was at his instance that his adversary was put on the witness stand.
Unlike an ordinary witness, the calling party may impeach an adverse
witness in all respects as if he had been called by the adverse party, 32
except by evidence of his bad character.33 Under a rule permitting the
impeachment of an adverse witness, although the calling party does not
vouch for the witness veracity, he is nonetheless bound by his testimony if
it is not contradicted or remains unrebutted.34
A party who calls his adversary as a witness is, therefore, not bound by the
latters testimony only in the sense that he may contradict him by
introducing other evidence to prove a state of facts contrary to what the
witness testifies on.35 A rule that provides that the party calling an adverse
witness shall not be bound by his testimony does not mean that such
testimony may not be given its proper weight, but merely that the calling
party shall not be precluded from rebutting his testimony or from
impeaching him.36 This, the petitioner failed to do.

In the present case, the petitioner, by her own testimony, failed to discredit
the respondents testimony on how Hagonoy Lumber became his sole
property. The petitioner admitted having signed the Deed of Partition but
she insisted that the transfer of the property to Chua Siok Huan was only
temporary. On cross-examination, she confessed that no other document
was executed to indicate that the transfer of the business to Chua Siok
Huan was a temporary arrangement. She declared that, after their mother
died in 1993, she did not initiate any action concerning Hagonoy Lumber,
and it was only in her counterclaim in the instant that, for the first time,
she raised a claim over the business.
Due process requires that in reaching a decision, a tribunal must consider
the entire evidence presented.37 All the parties to the case, therefore, are
considered bound by the favorable or unfavorable effects resulting from
the evidence.38 As already mentioned, in arriving at a decision, the entirety
of the evidence presented will be considered, regardless of the party who
offered them in evidence. In this light, the more vital consideration is not
whether a piece of evidence was properly attributed to one party, but
whether it was accorded the apposite probative weight by the court. The
testimony of an adverse witness is evidence in the case and should be
given its proper weight, and such evidence becomes weightier if the other
party fails to impeach the witness or contradict his testimony.
Significantly, the RTCs finding that the P200,000.00 was given to the
petitioner and her husband as a loan is supported by the evidence on
record. Hence, we do not agree with the petitioners contention that the
RTC has overlooked certain facts of great weight and value in arriving at its
decision. The RTC merely took into consideration evidence which it found
to be more credible than the self-serving and uncorroborated testimony of
the petitioner.
At this juncture, we reiterate the well-entrenched doctrine that the findings
of fact of the CA affirming those of the trial court are accorded great
respect, even finality, by this Court. Only errors of law, not of fact, may be
reviewed by this Court in petitions for review on certiorari under Rule 45.39
A departure from the general rule may be warranted where the findings of
fact of the CA are contrary to the findings and conclusions of the trial court,
or when the same is unsupported by the evidence on record. 40 There is no
reason to apply the exception in the instant case because the findings and
conclusions of the CA are in full accord with those of the trial court. These
findings are buttressed by the evidence on record. Moreover, the issues
20
and errors alleged in this petition are substantially the very same questions
of fact raised by petitioner in the appellate court.
On the issue of whether the P200,000.00 was really a loan, it is well to
remember that a check may be evidence of indebtedness.41 A check, the
entries of which are in writing, could prove a loan transaction. 42 It is pure
naivet to insist that an entrepreneur who has several sources of income
and has access to considerable bank credit, no longer has any reason to
borrow any amount.
The petitioners allegation that the P200,000.00 was advance on her share
in the profits of Hagonoy Lumber is implausible. It is true that Hagonoy
Lumber was originally owned by the parents of petitioner and respondent.
However, on December 8, 1986, the heirs freely renounced and waived in
favor of their sister Chua Sioc Huan all their hereditary shares and interest
therein, as shown by the Deed of Partition which the petitioner herself
signed. By virtue of this deed, Chua Sioc Huan became the sole owner and
proprietor of Hagonoy Lumber. Thus, when the respondent delivered the
check for P200,000.00 to the petitioner on June 7, 1988, Chua Sioc Huan
was already the sole owner of Hagonoy Lumber. At that time, both
petitioner and respondent no longer had any interest in the business
enterprise; neither had a right to demand a share in the profits of the
business. Respondent became the sole owner of Hagonoy Lumber only
after Chua Sioc Huan sold it to him on August 1, 1990. So, when the
respondent delivered to the petitioner the P200,000.00 check on June 7,
1988, it could not have been given as an advance on petitioners share in
the business, because at that moment in time both of them had no
participation, interest or share in Hagonoy Lumber. Even assuming,
arguendo, that the check was an advance on the petitioners share in the
profits of the business, it was highly unlikely that the respondent would
deliver a check drawn against his personal, and not against the business
enterprises account.
It is also worthy to note that both the Deed of Partition and the Deed of
Sale were acknowledged before a Notary Public. The notarization of a
private document converts it into a public document, and makes it
admissible in court without further proof of its authenticity. 43 It is entitled to
full faith and credit upon its face.44 A notarized document carries
evidentiary weight as to its due execution, and documents acknowledged
before a notary public have in their favor the presumption of regularity.
Such a document must be given full force and effect absent a strong,
complete and conclusive proof of its falsity or nullity on account of some
 21

flaws or defects recognized by law.45 A public document executed and writing, it is deemed to contain all the terms agreed upon and there can
attested through the intervention of a notary public is, generally, evidence be, between the parties and their successors in interest, no evidence of
of the facts therein express in clear unequivocal manner. 46 such terms other than the contents of the written agreement. 55

Petitioner, however, maintains that the RTC erred in admitting in evidence
a mere copy of the Deed of Partition and the Deed of Sale in violation of
the best evidence rule. In addition, petitioner insists that the Deed of Sale
was not the result of bona fide negotiations between a true seller and
buyer.
WHEREFORE, premises considered, the petition is DENIED. The Decision
of the Court of Appeals in CA-G.R. CV No. 66790 dated May 23, 2003 and
Resolution dated December 2, 2003 are AFFIRMED.
SO ORDERED.

The "best evidence rule" as encapsulated in Rule 130, Section 3, 47 of the

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

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

An agreement or the contract between the parties is the formal expression

of the parties rights, duties and obligations. It is the best evidence of the
intention of the parties.53 The parties intention is to be deciphered from
the language used in the contract, not from the unilateral post facto
assertions of one of the parties, or of third parties who are strangers to the
contract.54 Thus, when the terms of an agreement have been reduced to
 22

THIRD DIVISION accounts to petitioner Citibank in Manila, and the application of the
same against respondents outstanding loans with the latter, is
G.R. No. 156132 February 6, 2007 DECLARED illegal, null and void. Petitioner Citibank is ORDERED
to refund to respondent the said amount, or its equivalent in
CITIBANK, N.A. (Formerly First National City Bank) and Philippine currency using the exchange rate at the time of
INVESTORS FINANCE CORPORATION, doing business under the payment, plus the stipulated interest for each of the fiduciary
name and style of FNCB Finance, Petitioners, placements and current accounts involved, beginning 26 October
vs. 1979;
MODESTA R. SABENIANO, Respondent.
3. Petitioner Citibank is ORDERED to pay respondent moral
RESOLUTION damages in the amount of Three Hundred Thousand Pesos
(P300,000.00); exemplary damages in the amount of Two Hundred
Fifty Thousand Pesos (P250,000.00); and attorneys fees in the
CHICO-NAZARIO, J.:
amount of Two Hundred Thousand Pesos (P200,000.00); and

On 16 October 2006, this Court promulgated its Decision 1 in the above-

4. Respondent is ORDERED to pay petitioner Citibank the balance
entitled case, the dispositive portion of which reads
of her outstanding loans, which, from the respective dates of their
maturity to 5 September 1979, was computed to be in the sum of
IN VIEW OF THE FOREGOING, the instant Petition is PARTLY GRANTED. One Million Sixty-Nine Thousand Eight Hundred Forty-Seven Pesos
The assailed Decision of the Court of Appeals in CA-G.R. No. 51930, dated and Forty Centavos (P1,069,847.40), inclusive of interest. These
26 March 2002, as already modified by its Resolution, dated 20 November outstanding loans shall continue to earn interest, at the rates
2002, is hereby AFFIRMED WITH MODIFICATION, as follows stipulated in the corresponding PNs, from 5 September 1979 until
payment thereof.
1. PNs No. 23356 and 23357 are DECLARED subsisting and outstanding.
Petitioner Citibank is ORDERED to return to respondent the principal Subsequent thereto,
amounts of the said PNs, amounting P respondent Modesta R.
to Three Hundred Eighteen Respondents outstanding obligation (principal and interest as of 26
2,156,940. Sabeniano filed an Urgent
Thousand Eight Hundred Ninety- October 1979)
58 Motion to Clarify and/or
Seven Pesos and Thirty-Four Confirm Decision with
Centavos (P318,897.34) and Two Notice of Judgment on 20
Hundred Three Thousand One Les Proceeds from respondents money market placements with
s: petitioner FNCB Finance (principal and interest as of 5 September (1,022,916. October 2006; while,
Hundred Fifty Pesos (P203,150.00), petitioners Citibank, N.A.
respectively, plus the stipulated 1979) 66)
and FNCB Finance2 filed
interest of Fourteen and a half their Motion for Partial
percent (14.5%) per annum, Deposits in respondents bank accounts with petitioner Citibank (31,079.14) Reconsideration of the
beginning 17 March 1977; foregoing Decision on 6
Proceeds of respondents money market placements and dollar November 2006.
2. The remittance of One Hundred accounts with Citibank-Geneva (peso equivalent as of 26 October (1,102,944.
Forty-Nine Thousand Six Hundred 1979) 78) The facts of the case, as
Thirty Two US Dollars and Ninety- determined by this Court in
Nine Cents (US$149,632.99) from its Decision, may be
Balance of respondents obligation P 0.00
respondents Citibank-Geneva summarized as follows.
 23

Respondent was a client of petitioners. She had several deposits and be no interest and penalty charges from the time the illegal setoff
market placements with petitioners, among which were her savings was effected on 31 October 1979;
account with the local branch of petitioner Citibank (Citibank-Manila 3 );
money market placements with petitioner FNCB Finance; and dollar (3) Dismissing all other claims and counterclaims interposed by the
accounts with the Geneva branch of petitioner Citibank (Citibank-Geneva). parties against each other.
At the same time, respondent had outstanding loans with petitioner
Citibank, incurred at Citibank-Manila, the principal amounts aggregating to Costs against the defendant Bank.
P1,920,000.00, all of which had become due and demandable by May
1979. Despite repeated demands by petitioner Citibank, respondent failed
All the parties appealed the afore-mentioned RTC Decision to the Court of
to pay her outstanding loans. Thus, petitioner Citibank used respondents
Appeals, docketed as CA-G.R. CV No. 51930. On 26 March 2002, the
deposits and money market placements to off-set and liquidate her
appellate court promulgated its Decision,5 ruling entirely in favor of
outstanding obligations, as follows
respondent, to wit

Respondent, however, denied having any outstanding loans with petitioner

Wherefore, premises considered, the assailed 24 August 1995 Decision of
Citibank. She likewise denied that she was duly informed of the off-setting
the court a quo is hereby AFFIRMED with MODIFICATION, as follows:
or compensation thereof made by petitioner Citibank using her deposits
and money market placements with petitioners. Hence, respondent sought
to recover her deposits and money market placements. 1. Declaring as illegal, null and void the set-off effected by the
defendant-appellant Bank of the plaintiff-appellants dollar deposit
with Citibank, Switzerland, in the amount of US$149,632.99, and
Respondent instituted a complaint for "Accounting, Sum of Money and
ordering defendant-appellant Citibank to refund the said amount to
Damages" against petitioners, docketed as Civil Case No. 11336, before
the plaintiff-appellant with legal interest at the rate of twelve
the Regional Trial Court (RTC) of Makati City. After trial proper, which lasted
percent (12%) per annum, compounded yearly, from 31 October
for a decade, the RTC rendered a Decision4 on 24 August 1995, the
1979 until fully paid, or its peso equivalent at the time of payment;
dispositive portion of which reads

2. As defendant-appellant Citibank failed to establish by competent

WHEREFORE, in view of all the foregoing, decision is hereby rendered as
evidence the alleged indebtedness of plaintiff-appellant, the set-off
follows:
of P1,069,847.40 in the account of Ms. Sabeniano is hereby
declared as without legal and factual basis;
(1) Declaring as illegal, null and void the setoff effected by the
defendant Bank [petitioner Citibank] of plaintiffs [respondent
3. As defendants-appellants failed to account the following plaintiff-
Sabeniano] dollar deposit with Citibank, Switzerland, in the amount
appellants money market placements, savings account and
of US$149,632.99, and ordering the said defendant [petitioner
current accounts, the former is hereby ordered to return the same,
Citibank] to refund the said amount to the plaintiff with legal
in accordance with the terms and conditions agreed upon by the
interest at the rate of twelve percent (12%) per annum,
contending parties as evidenced by the certificates of investments,
compounded yearly, from 31 October 1979 until fully paid, or its
to wit:
peso equivalent at the time of payment;

(i) Citibank NNPN Serial No. 023356 (Cancels and

(2) Declaring the plaintiff [respondent Sabeniano] indebted to the
Supersedes NNPN No. 22526) issued on 17 March 1977,
defendant Bank [petitioner Citibank] in the amount of
P318,897.34 with 14.50% interest p.a.;
P1,069,847.40 as of 5 September 1979 and ordering the plaintiff
[respondent Sabeniano] to pay said amount, however, there shall

(ii) Citibank NNPN Serial No. 23357 (Cancels and
Supersedes NNPN No. 22528) issued on 17 March 1977,
P203,150.00 with 14.50 interest p.a.;
(iii) FNCB NNPN Serial No. 05757 (Cancels and Supersedes
NNPN No. 04952), issued on 02 June 1977, P500,000.00
with 17% interest p.a.;
(iv) FNCB NNPN Serial No. 05758 (Cancels and Supersedes
NNPN No. 04962), issued on 02 June 1977, P500,000.00
with 17% interest per annum;
(v) The Two Million (P2,000,000.00) money market
placements of Ms. Sabeniano with the Ayala Investment &
Development Corporation (AIDC) with legal interest at the
rate of twelve percent (12%) per annum compounded
yearly, from 30 September 1976 until fully paid;
4. Ordering defendants-appellants to jointly and severally pay the
plaintiff-appellant the sum of FIVE HUNDRED THOUSAND PESOS
(P500,000.00) by way of moral damages, FIVE HUNDRED
THOUSAND PESOS (P500,000.00) as exemplary damages, and ONE
HUNDRED THOUSAND PESOS (P100,000.00) as attorneys fees.
Acting on petitioners Motion for Partial Reconsideration, the Court of
Appeals issued a Resolution,6 dated 20 November 2002, modifying its
earlier Decision, thus
WHEREFORE, premises considered, the instant Motion for
Reconsideration is PARTIALLY GRANTED as Sub-paragraph (V) paragraph
3 of the assailed Decisions dispositive portion is hereby ordered
DELETED.
The challenged 26 March 2002 Decision of the Court is AFFIRMED with
MODIFICATION.
Since the Court of Appeals Decision, dated 26 March 2002, as modified by
the Resolution of the same court, dated 20 November 2002, was still
principally in favor of respondent, petitioners filed the instant Petition for
Review on Certiorari under Rule 45 of the Revised Rules of Court. After
giving due course to the instant Petition, this Court promulgated on 16
24
October 2006 its Decision, now subject of petitioners Motion for Partial
Reconsideration.1awphi1.net
Among the numerous grounds raised by petitioners in their Motion for
Partial Reconsideration, this Court shall address and discuss herein only
particular points that had not been considered or discussed in its Decision.
Even in consideration of these points though, this Court remains
unconvinced that it should modify or reverse in any way its disposition of
the case in its earlier Decision.
As to the off-setting or compensation of respondents outstanding loan
balance with her dollar deposits in Citibank-Geneva
Petitioners take exception to the following findings made by this Court in
its Decision, dated 16 October 2006, disallowing the off-setting or
compensation of the balance of respondents outstanding loans using her
dollar deposits in Citibank-Geneva
Without the Declaration of Pledge, petitioner Citibank had no authority to
demand the remittance of respondents dollar accounts with Citibank-
Geneva and to apply them to her outstanding loans. It cannot effect legal
compensation under Article 1278 of the Civil Code since, petitioner
Citibank itself admitted that Citibank-Geneva is a distinct and separate
entity. As for the dollar accounts, respondent was the creditor and Citibank-
Geneva is the debtor; and as for the outstanding loans, petitioner Citibank
was the creditor and respondent was the debtor. The parties in these
transactions were evidently not the principal creditor of each other.
Petitioners maintain that respondents Declaration of Pledge, by virtue of
which she supposedly assigned her dollar accounts with Citibank-Geneva
as security for her loans with petitioner Citibank, is authentic and, thus,
valid and binding upon respondent. Alternatively, petitioners aver that
even without said Declaration of Pledge, the off-setting or compensation
made by petitioner Citibank using respondents dollar accounts with
Citibank-Geneva to liquidate the balance of her outstanding loans with
Citibank-Manila was expressly authorized by respondent herself in the
promissory notes (PNs) she signed for her loans, as well as sanctioned by
Articles 1278 to 1290 of the Civil Code. This alternative argument is
anchored on the premise that all branches of petitioner Citibank in the
Philippines and abroad are part of a single worldwide corporate entity and
share the same juridical personality. In connection therewith, petitioners

deny that they ever admitted that Citibank-Manila and Citibank-Geneva are
distinct and separate entities.
Petitioners call the attention of this Court to the following provision found
in all of the PNs7 executed by respondent for her loans
At or after the maturity of this note, or when same becomes due under any
of the provisions hereof, any money, stocks, bonds, or other property of
any kind whatsoever, on deposit or otherwise, to the credit of the
undersigned on the books of CITIBANK, N.A. in transit or in their
possession, may without notice be applied at the discretion of the said
bank to the full or partial payment of this note.
It is the petitioners contention that the term "Citibank, N.A." used therein
should be deemed to refer to all branches of petitioner Citibank in the
Philippines and abroad; thus, giving petitioner Citibank the authority to
apply as payment for the PNs even respondents dollar accounts with
Citibank-Geneva. Still proceeding from the premise that all branches of
petitioner Citibank should be considered as a single entity, then it should
not matter that the respondent obtained the loans from Citibank-Manila
and her deposits were with Citibank-Geneva. Respondent should be
considered the debtor (for the loans) and creditor (for her deposits) of the
same entity, petitioner Citibank. Since petitioner Citibank and respondent
were principal creditors of each other, in compliance with the requirements
under Article 1279 of the Civil Code,8 then the former could have very well
used off-setting or compensation to extinguish the parties obligations to
one another. And even without the PNs, off-setting or compensation was
still authorized because according to Article 1286 of the Civil Code,
"Compensation takes place by operation of law, even though the debts
may be payable at different places, but there shall be an indemnity for
expenses of exchange or transportation to the place of payment."
Pertinent provisions of Republic Act No. 8791, otherwise known as the
General Banking Law of 2000, governing bank branches are reproduced
below
SEC. 20. Bank Branches. Universal or commercial banks may open
branches or other offices within or outside the Philippines upon prior
approval of the Bangko Sentral.
Branching by all other banks shall be governed by pertinent laws.
25
A bank may, subject to prior approval of the Monetary Board, use any or all
of its branches as outlets for the presentation and/or sale of the financial
products of its allied undertaking or its investment house units.
A bank authorized to establish branches or other offices shall be
responsible for all business conducted in such branches and offices to the
same extent and in the same manner as though such business had all
been conducted in the head office. A bank and its branches and offices
shall be treated as one unit.
SEC. 72. Transacting Business in the Philippines. The entry of foreign
banks in the Philippines through the establishment of branches shall be
governed by the provisions of the Foreign Banks Liberalization Act.
The conduct of offshore banking business in the Philippines shall be
governed by the provisions of Presidential Decree No. 1034, otherwise
known as the "Offshore Banking System Decree."
SEC. 74. Local Branches of Foreign Banks. In case of a foreign bank which
has more than one (1) branch in the Philippines, all such branches shall be
treated as one (1) unit for the purpose of this Act, and all references to the
Philippine branches of foreign banks shall be held to refer to such units.
SEC. 75. Head Office Guarantee. In order to provide effective protection
of the interests of the depositors and other creditors of Philippine branches
of a foreign bank, the head office of such branches shall fully guarantee
the prompt payment of all liabilities of its Philippine branch.
Residents and citizens of the Philippines who are creditors of a branch in
the Philippines of a foreign bank shall have preferential rights to the assets
of such branch in accordance with existing laws.
Republic Act No. 7721, otherwise known as the Foreign Banks Liberalization
Law, lays down the policies and regulations specifically concerning the
establishment and operation of local branches of foreign banks. Relevant
provisions of the said statute read
Sec. 2. Modes of Entry. - The Monetary Board may authorize foreign banks
to operate in the Philippine banking system through any of the following
modes of entry: (i) by acquiring, purchasing or owning up to sixty percent
(60%) of the voting stock of an existing bank; (ii) by investing in up to sixty

percent (60%) of the voting stock of a new banking subsidiary incorporated
under the laws of the Philippines; or (iii) by establishing branches with full
banking authority: Provided, That a foreign bank may avail itself of only
one (1) mode of entry: Provided, further, That a foreign bank or a Philippine
corporation may own up to a sixty percent (60%) of the voting stock of
only one (1) domestic bank or new banking subsidiary.
Sec. 5. Head Office Guarantee. - The head office of foreign bank branches
shall guarantee prompt payment of all liabilities of its Philippine branches.
It is true that the afore-quoted Section 20 of the General Banking Law of
2000 expressly states that the bank and its branches shall be treated as
one unit. It should be pointed out, however, that the said provision applies
to a universal9 or commercial bank,10 duly established and organized as a
Philippine corporation in accordance with Section 8 of the same statute, 11
and authorized to establish branches within or outside the Philippines.
The General Banking Law of 2000, however, does not make the same
categorical statement as regards to foreign banks and their branches in
the Philippines. What Section 74 of the said law provides is that in case of a
foreign bank with several branches in the country, all such branches shall
be treated as one unit. As to the relations between the local branches of a
foreign bank and its head office, Section 75 of the General Banking Law of
2000 and Section 5 of the Foreign Banks Liberalization Law provide for a
"Home Office Guarantee," in which the head office of the foreign bank shall
guarantee prompt payment of all liabilities of its Philippine branches. While
the Home Office Guarantee is in accord with the principle that these local
branches, together with its head office, constitute but one legal entity, it
does not necessarily support the view that said principle is true and
applicable in all circumstances.
The Home Office Guarantee is included in Philippine statutes clearly for the
protection of the interests of the depositors and other creditors of the local
branches of a foreign bank.12 Since the head office of the bank is located in
another country or state, such a guarantee is necessary so as to bring the
head office within Philippine jurisdiction, and to hold the same answerable
for the liabilities of its Philippine branches. Hence, the principle of the
singular identity of that the local branches and the head office of a foreign
bank are more often invoked by the clients in order to establish the
accountability of the head office for the liabilities of its local branches. It is
under such attendant circumstances in which the American authorities and
26
jurisprudence presented by petitioners in their Motion for Partial
Reconsideration were rendered.
Now the question that remains to be answered is whether the foreign bank
can use the principle for a reverse purpose, in order to extend the liability
of a client to the foreign banks Philippine branch to its head office, as well
as to its branches in other countries. Thus, if a client obtains a loan from
the foreign banks Philippine branch, does it absolutely and automatically
make the client a debtor, not just of the Philippine branch, but also of the
head office and all other branches of the foreign bank around the world?
This Court rules in the negative.
There being a dearth of Philippine authorities and jurisprudence on the
matter, this Court, just as what petitioners have done, turns to American
authorities and jurisprudence. American authorities and jurisprudence are
significant herein considering that the head office of petitioner Citibank is
located in New York, United States of America (U.S.A.).
Unlike Philippine statutes, the American legislation explicitly defines the
relations among foreign branches of an American bank. Section 25 of the
United States Federal Reserve Act13 states that
Every national banking association operating foreign branches shall
conduct the accounts of each foreign branch independently of the
accounts of other foreign branches established by it and of its home office,
and shall at the end of each fiscal period transfer to its general ledger the
profit or loss accrued at each branch as a separate item.
Contrary to petitioners assertion that the accounts of Citibank-Manila and
Citibank-Geneva should be deemed as a single account under its head
office, the foregoing provision mandates that the accounts of foreign
branches of an American bank shall be conducted independently of each
other. Since the head office of petitioner Citibank is in the U.S.A., then it is
bound to treat its foreign branches in accordance with the said provision. It
is only at the end of its fiscal period that the bank is required to transfer to
its general ledger the profit or loss accrued at each branch, but still
reporting it as a separate item. It is by virtue of this provision that the
Circuit Court of Appeals of New York declared in Pan-American Bank and
Trust Co. v. National City Bank of New York14 that a branch is not merely a
tellers window; it is a separate business entity.

The circumstances in the case of McGrath v. Agency of Chartered Bank of
India, Australia & China15 are closest to the one at bar. In said case, the
Chartered Bank had branches in several countries, including one in
Hamburg, Germany and another in New York, U.S.A., and yet another in
London, United Kingdom. The New York branch entered in its books credit
in favor of four German firms. Said credit represents collections made from
bills of exchange delivered by the four German firms. The same four
German firms subsequently became indebted to the Hamburg branch. The
London branch then requested for the transfer of the credit in the name of
the German firms from the New York branch so as to be applied or setoff
against the indebtedness of the same firms to the Hamburg branch. One of
the question brought before the U.S. District Court of New York was
"whether or not the debts and the alleged setoffs thereto are mutual,"
which could be answered by determining first whether the New York and
Hamburg branches of Chartered Bank are individual business entities or
are one and the same entity. In denying the right of the Hamburg branch to
setoff, the U.S. District Court ratiocinated that
The structure of international banking houses such as Chartered bank
defies one rigorous description. Suffice it to say for present analysis,
branches or agencies of an international bank have been held to
be independent entities for a variety of purposes (a) deposits
payable only at branch where made; Mutaugh v. Yokohama Specie Bank,
Ltd., 1933, 149 Misc. 693, 269 N.Y.S. 65; Bluebird Undergarment Corp. v.
Gomez, 1931, 139 Misc. 742, 249 N.Y.S. 319; (b) checks need be honored
only when drawn on branch where deposited; Chrzanowska v. Corn
Exchange Bank, 1916, 173 App. Div. 285, 159 N.Y.S. 385, affirmed 1919,
225 N.Y. 728, 122 N.E. 877; subpoena duces tecum on foreign banks
record barred; In re Harris, D.C.S.D.N.Y. 1939, 27 F. Supp. 480; (d) a foreign
branch separate for collection of forwarded paper; Pan-American Bank and
Trust Company v. National City Bank of New York, 2 Cir., 1925, 6 F. 2d 762,
certiorari denied 1925, 269 U.S. 554, 46 S. Ct. 18, 70 L. Ed. 408. Thus in
law there is nothing innately unitary about the organization of
international banking institutions.
Defendant, upon its oral argument and in its brief, relies heavily on
Sokoloff v. National City Bank of New York, 1928, 250 N.Y. 69, 164 N.E. 745,
as authority for the proposition that Chartered Bank, not the Hamburg or
New York Agency, is ultimately responsible for the amounts owing its
German customers and, conversely, it is to Chartered Bank that the
German firms owe their obligations. The Sokoloff case, aside from its
violently different fact situation, is centered on the legal problem of default
27
of payment and consequent breach of contract by a branch bank. It does
not stand for the principle that in every instance an international
bank with branches is but one legal entity for all purposes. The
defendant concedes in its brief (p. 15) that there are purposes for which
the various agencies and branches of Chartered Bank may be treated in
law as separate entities. I fail to see the applicability of Sokoloff either as a
guide to or authority for the resolution of this problem. The facts before me
and the cases catalogued supra lend weight to the view that we are
dealing here with Agencies independent of one another.
I hold that for instant purposes the Hamburg Agency and defendant were
independent business entities, and the attempted setoff may not be
utilized by defendant against its debt to the German firms obligated to the
Hamburg Agency.
Going back to the instant Petition, although this Court concedes that all the
Philippine branches of petitioner Citibank should be treated as one unit
with its head office, it cannot be persuaded to declare that these Philippine
branches are likewise a single unit with the Geneva branch. It would be
stretching the principle way beyond its intended purpose.
Therefore, this Court maintains its original position in the Decision that the
off-setting or compensation of respondents loans with Citibank-Manila
using her dollar accounts with Citibank-Geneva cannot be effected. The
parties cannot be considered principal creditor of the other. As for the
dollar accounts, respondent was the creditor and Citibank-Geneva was the
debtor; and as for the outstanding loans, petitioner Citibank, particularly
Citibank-Manila, was the creditor and respondent was the debtor. Since
legal compensation was not possible, petitioner Citibank could only use
respondents dollar accounts with Citibank-Geneva to liquidate her loans if
she had expressly authorized it to do so by contract.
Respondent cannot be deemed to have authorized the use of her dollar
deposits with Citibank-Geneva to liquidate her loans with petitioner
Citibank when she signed the PNs16 for her loans which all contained the
provision that
At or after the maturity of this note, or when same becomes due under any
of the provisions hereof, any money, stocks, bonds, or other property of
any kind whatsoever, on deposit or otherwise, to the credit of the
undersigned on the books of CITIBANK, N.A. in transit or in their

possession, may without notice be applied at the discretion of the said
bank to the full or partial payment of this note.
As has been established in the preceding discussion, "Citibank, N.A." can
only refer to the local branches of petitioner Citibank together with its head
office. Unless there is any showing that respondent understood and
expressly agreed to a more far-reaching interpretation, the reference to
Citibank, N.A. cannot be extended to all other branches of petitioner
Citibank all over the world. Although theoretically, books of the branches
form part of the books of the head office, operationally and practically,
each branch maintains its own books which shall only be later integrated
and balanced with the books of the head office. Thus, it is very possible to
identify and segregate the books of the Philippine branches of petitioner
Citibank from those of Citibank-Geneva, and to limit the authority granted
for application as payment of the PNs to respondents deposits in the
books of the former.
Moreover, the PNs can be considered a contract of adhesion, the PNs being
in standard printed form prepared by petitioner Citibank. Generally,
stipulations in a contract come about after deliberate drafting by the
parties thereto, there are certain contracts almost all the provisions of
which have been drafted only by one party, usually a corporation. Such
contracts are called contracts of adhesion, because the only participation
of the party is the affixing of his signature or his "adhesion" thereto. This
being the case, the terms of such contract are to be construed strictly
against the party which prepared it.17
As for the supposed Declaration of Pledge of respondents dollar accounts
with Citibank-Geneva as security for the loans, this Court stands firm on its
ruling that the non-production thereof is fatal to petitioners cause in light
of respondents claim that her signature on such document was a forgery.
It bears to note that the original of the Declaration of Pledge is with
Citibank-Geneva, a branch of petitioner Citibank. As between respondent
and petitioner Citibank, the latter has better access to the document. The
constant excuse forwarded by petitioner Citibank that Citibank-Geneva
refused to return possession of the original Declaration of Pledge to
Citibank-Manila only supports this Courts finding in the preceding
paragraphs that the two branches are actually operating separately and
independently of each other.
Further, petitioners keep playing up the fact that respondent, at the
beginning of the trial, refused to give her specimen signatures to help
28
establish whether her signature on the Declaration of Pledge was indeed
forged. Petitioners seem to forget that subsequently, respondent, on
advice of her new counsel, already offered to cooperate in whatever
manner so as to bring the original Declaration of Pledge before the RTC for
inspection. The exchange of the counsels for the opposing sides during the
hearing on 24 July 1991 before the RTC reveals the apparent willingness of
respondents counsel to undertake whatever course of action necessary for
the production of the contested document, and the evasive, non-
committal, and uncooperative attitude of petitioners counsel. 18
Lastly, this Courts ruling striking down the Declaration of Pledge is not
entirely based on respondents allegation of forgery. In its Decision, this
Court already extensively discussed why it found the said Declaration of
Pledge highly suspicious and irregular, to wit
First of all, it escapes this Court why petitioner Citibank took care to have
the Deeds of Assignment of the PNs notarized, yet left the Declaration of
Pledge unnotarized. This Court would think that petitioner Citibank would
take greater cautionary measures with the preparation and execution of
the Declaration of Pledge because it involved respondents "all present and
future fiduciary placements" with a Citibank branch in another country,
specifically, in Geneva, Switzerland. While there is no express legal
requirement that the Declaration of Pledge had to be notarized to be
effective, even so, it could not enjoy the same prima facie presumption of
due execution that is extended to notarized documents, and petitioner
Citibank must discharge the burden of proving due execution and
authenticity of the Declaration of Pledge.
Second, petitioner Citibank was unable to establish the date when the
Declaration of Pledge was actually executed. The photocopy of the
Declaration of Pledge submitted by petitioner Citibank before the RTC was
undated. It presented only a photocopy of the pledge because it already
forwarded the original copy thereof to Citibank-Geneva when it requested
for the remittance of respondents dollar accounts pursuant thereto.
Respondent, on the other hand, was able to secure a copy of the
Declaration of Pledge, certified by an officer of Citibank-Geneva, which
bore the date 24 September 1979. Respondent, however, presented her
passport and plane tickets to prove that she was out of the country on the
said date and could not have signed the pledge. Petitioner Citibank insisted
that the pledge was signed before 24 September 1979, but could not
provide an explanation as to how and why the said date was written on the
pledge. Although Mr. Tan testified that the Declaration of Pledge was

signed by respondent personally before him, he could not give the exact
date when the said signing took place. It is important to note that the copy
of the Declaration of Pledge submitted by the respondent to the RTC was
certified by an officer of Citibank-Geneva, which had possession of the
original copy of the pledge. It is dated 24 September 1979, and this Court
shall abide by the presumption that the written document is truly dated.
Since it is undeniable that respondent was out of the country on 24
September 1979, then she could not have executed the pledge on the said
date.
Third, the Declaration of Pledge was irregularly filled-out. The pledge was
in a standard printed form. It was constituted in favor of Citibank, N.A.,
otherwise referred to therein as the Bank. It should be noted, however, that
in the space which should have named the pledgor, the name of petitioner
Citibank was typewritten, to wit
The pledge right herewith constituted shall secure all claims which the
Bank now has or in the future acquires against Citibank, N.A., Manila (full
name and address of the Debtor), regardless of the legal cause or the
transaction (for example current account, securities transactions,
collections, credits, payments, documentary credits and collections) which
gives rise thereto, and including principal, all contractual and penalty
interest, commissions, charges, and costs.
The pledge, therefore, made no sense, the pledgor and pledgee being the
same entity. Was a mistake made by whoever filled-out the form? Yes, it
could be a possibility. Nonetheless, considering the value of such a
document, the mistake as to a significant detail in the pledge could only be
committed with gross carelessness on the part of petitioner Citibank, and
raised serious doubts as to the authenticity and due execution of the same.
The Declaration of Pledge had passed through the hands of several bank
officers in the country and abroad, yet, surprisingly and implausibly, no
one noticed such a glaring mistake.
Lastly, respondent denied that it was her signature on the Declaration of
Pledge. She claimed that the signature was a forgery. When a document is
assailed on the basis of forgery, the best evidence rule applies
Basic is the rule of evidence that when the subject of inquiry is the
contents of a document, no evidence is admissible other than the original
document itself except in the instances mentioned in Section 3, Rule 130 of
the Revised Rules of Court. Mere photocopies of documents are
29
inadmissible pursuant to the best evidence rule. This is especially true
when the issue is that of forgery.
As a rule, forgery cannot be presumed and must be proved by clear,
positive and convincing evidence and the burden of proof lies on the party
alleging forgery. The best evidence of a forged signature in an instrument
is the instrument itself reflecting the alleged forged signature. The fact of
forgery can only be established by a comparison between the alleged
forged signature and the authentic and genuine signature of the person
whose signature is theorized upon to have been forged. Without the
original document containing the alleged forged signature, one cannot
make a definitive comparison which would establish forgery. A comparison
based on a mere xerox copy or reproduction of the document under
controversy cannot produce reliable results.
Respondent made several attempts to have the original copy of the pledge
produced before the RTC so as to have it examined by experts. Yet, despite
several Orders by the RTC, petitioner Citibank failed to comply with the
production of the original Declaration of Pledge. It is admitted that
Citibank-Geneva had possession of the original copy of the pledge. While
petitioner Citibank in Manila and its branch in Geneva may be separate
and distinct entities, they are still incontestably related, and between
petitioner Citibank and respondent, the former had more influence and
resources to convince Citibank-Geneva to return, albeit temporarily, the
original Declaration of Pledge. Petitioner Citibank did not present any
evidence to convince this Court that it had exerted diligent efforts to
secure the original copy of the pledge, nor did it proffer the reason why
Citibank-Geneva obstinately refused to give it back, when such document
would have been very vital to the case of petitioner Citibank. There is thus
no justification to allow the presentation of a mere photocopy of the
Declaration of Pledge in lieu of the original, and the photocopy of the
pledge presented by petitioner Citibank has nil probative value. In addition,
even if this Court cannot make a categorical finding that respondents
signature on the original copy of the pledge was forged, it is persuaded
that petitioner Citibank willfully suppressed the presentation of the original
document, and takes into consideration the presumption that the evidence
willfully suppressed would be adverse to petitioner Citibank if produced.
As far as the Declaration of Pledge is concerned, petitioners failed to
submit any new evidence or argument that was not already considered by
this Court when it rendered its Decision.

As to the value of the dollar deposits in Citibank-Geneva ordered refunded
to respondent
In case petitioners are still ordered to refund to respondent the amount of
her dollar accounts with Citibank-Geneva, petitioners beseech this Court to
adjust the nominal values of respondents dollar accounts and/or her
overdue peso loans by using the values of the currencies stipulated at the
time the obligations were established in 1979, to address the alleged
inequitable consequences resulting from the extreme and extraordinary
devaluation of the Philippine currency that occurred in the course of the
Asian crisis of 1997. Petitioners base their request on Article 1250 of the
Civil Code which reads, "In case an extraordinary inflation or deflation of
the currency stipulated should supervene, the value of the currency at the
time of the establishment of the obligation shall be the basis of payment,
unless there is an agreement to the contrary."
It is well-settled that Article 1250 of the Civil Code becomes applicable only
when there is extraordinary inflation or deflation of the currency. Inflation
has been defined as the sharp increase of money or credit or both without
a corresponding increase in business transaction. There is inflation when
there is an increase in the volume of money and credit relative to available
goods resulting in a substantial and continuing rise in the general price
level.19 In Singson v. Caltex (Philippines), Inc.,20 this Court already provided
a discourse as to what constitutes as extraordinary inflation or deflation of
currency, thus
We have held extraordinary inflation to exist when there is a decrease or
increase in the purchasing power of the Philippine currency which is
unusual or beyond the common fluctuation in the value of said currency,
and such increase or decrease could not have been reasonably foreseen or
was manifestly beyond the contemplation of the parties at the time of the
establishment of the obligation.
An example of extraordinary inflation, as cited by the Court in Filipino Pipe
and Foundry Corporation vs. NAWASA, supra, is that which happened to
the deutschmark in 1920. Thus:
"More recently, in the 1920s, Germany experienced a case of
hyperinflation. In early 1921, the value of the German mark was 4.2 to the
U.S. dollar. By May of the same year, it had stumbled to 62 to the U.S.
dollar. And as prices went up rapidly, so that by October 1923, it had
30
reached 4.2 trillion to the U.S. dollar!" (Bernardo M. Villegas & Victor R.
Abola, Economics, An Introduction [Third Edition]).
As reported, "prices were going up every week, then every day, then every
hour. Women were paid several times a day so that they could rush out
and exchange their money for something of value before what little
purchasing power was left dissolved in their hands. Some workers tried to
beat the constantly rising prices by throwing their money out of the
windows to their waiting wives, who would rush to unload the nearly
worthless paper. A postage stamp cost millions of marks and a loaf of
bread, billions." (Sidney Rutberg, "The Money Balloon", New York: Simon
and Schuster, 1975, p. 19, cited in "Economics, An Introduction" by Villegas
& Abola, 3rd ed.)
The supervening of extraordinary inflation is never assumed. The party
alleging it must lay down the factual basis for the application of Article
1250.
Thus, in the Filipino Pipe case, the Court acknowledged that the
voluminous records and statistics submitted by plaintiff-appellant proved
that there has been a decline in the purchasing power of the Philippine
peso, but this downward fall cannot be considered "extraordinary" but was
simply a universal trend that has not spared our country. Similarly, in
Huibonhoa vs. Court of Appeals, the Court dismissed plaintiff-appellant's
unsubstantiated allegation that the Aquino assassination in 1983 caused
building and construction costs to double during the period July 1983 to
February 1984. In Serra vs. Court of Appeals, the Court again did not
consider the decline in the peso's purchasing power from 1983 to 1985 to
be so great as to result in an extraordinary inflation.
Like the Serra and Huibonhoa cases, the instant case also raises as basis
for the application of Article 1250 the Philippine economic crisis in the
early 1980s --- when, based on petitioner's evidence, the inflation rate rose
to 50.34% in 1984. We hold that there is no legal or factual basis to
support petitioner's allegation of the existence of extraordinary inflation
during this period, or, for that matter, the entire time frame of 1968 to
1983, to merit the adjustment of the rentals in the lease contract dated
July 16, 1968. Although by petitioner's evidence there was a decided
decline in the purchasing power of the Philippine peso throughout this
period, we are hard put to treat this as an "extraordinary inflation" within
the meaning and intent of Article 1250.

Rather, we adopt with approval the following observations of the Court of
Appeals on petitioner's evidence, especially the NEDA certification of
inflation rates based on consumer price index:
xxx (a) from the period 1966 to 1986, the official inflation rate never
exceeded 100% in any single year; (b) the highest official inflation rate
recorded was in 1984 which reached only 50.34%; (c) over a twenty one
(21) year period, the Philippines experienced a single-digit inflation in ten
(10) years (i.e., 1966, 1967, 1968, 1969, 1975, 1976, 1977, 1978, 1983
and 1986); (d) in other years (i.e., 1970, 1971, 1972, 1973, 1974, 1979,
1980, 1981, 1982, 1984 and 1989) when the Philippines experienced
double-digit inflation rates, the average of those rates was only 20.88%;
(e) while there was a decline in the purchasing power of the Philippine
currency from the period 1966 to 1986, such cannot be considered as
extraordinary; rather, it is a normal erosion of the value of the Philippine
peso which is a characteristic of most currencies.
"Erosion" is indeed an accurate description of the trend of decline in the
value of the peso in the past three to four decades. Unfortunate as this
trend may be, it is certainly distinct from the phenomenon contemplated
by Article 1250.
Moreover, this Court has held that the effects of extraordinary inflation are
not to be applied without an official declaration thereof by competent
authorities.
The burden of proving that there had been extraordinary inflation or
deflation of the currency is upon the party that alleges it. Such
circumstance must be proven by competent evidence, and it cannot be
merely assumed. In this case, petitioners presented no proof as to how
much, for instance, the price index of goods and services had risen during
the intervening period.21 All the information petitioners provided was the
drop of the U.S. dollar-Philippine peso exchange rate by 17 points from
June 1997 to January 1998. While the said figure was based on the
statistics of the Bangko Sentral ng Pilipinas (BSP), it is also significant to
note that the BSP did not categorically declare that the same constitute as
an extraordinary inflation. The existence of extraordinary inflation must be
officially proclaimed by competent authorities, and the only competent
authority so far recognized by this Court to make such an official
proclamation is the BSP.22
31
Neither can this Court, by merely taking judicial notice of the Asian
currency crisis in 1997, already declare that there had been extraordinary
inflation. It should be recalled that the Philippines likewise experienced
economic crisis in the 1980s, yet this Court did not find that extraordinary
inflation took place during the said period so as to warrant the application
of Article 1250 of the Civil Code.
Furthermore, it is incontrovertible that Article 1250 of the Civil Code is
based on equitable considerations. Among the maxims of equity are (1) he
who seeks equity must do equity, and (2) he who comes into equity must
come with clean hands. The latter is a frequently stated maxim which is
also expressed in the principle that he who has done inequity shall not
have equity.23 Petitioner Citibank, hence, cannot invoke Article 1250 of the
Civil Code because it does not come to court with clean hands. The delay
in the recovery24 by respondent of her dollar accounts with Citibank-
Geneva was due to the unlawful act of petitioner Citibank in using the
same to liquidate respondents loans. Petitioner Citibank even attempted
to justify the off-setting or compensation of respondents loans using her
dollar accounts with Citibank-Geneva by the presentation of a highly
suspicious and irregular, and even possibly forged, Declaration of Pledge.
The damage caused to respondent of the deprivation of her dollar accounts
for more than two decades is unquestionably relatively more extensive and
devastating, as compared to whatever damage petitioner Citibank, an
international banking corporation with undoubtedly substantial capital,
may have suffered for respondents non-payment of her loans. It must also
be remembered that petitioner Citibank had already considered
respondents loans paid or liquidated by 26 October 1979 after it had fully
effected compensation thereof using respondents deposits and money
market placements. All this time, respondents dollar accounts are
unlawfully in the possession of and are being used by petitioner Citibank
for its business transactions. In the meantime, respondents businesses
failed and her properties were foreclosed because she was denied access
to her funds when she needed them most. Taking these into consideration,
respondents dollar accounts with Citibank-Geneva must be deemed to be
subsisting and continuously deposited with petitioner Citibank all this
while, and will only be presently withdrawn by respondent. Therefore,
petitioner Citibank should refund to respondent the U.S. $149,632.99 taken
from her Citibank-Geneva accounts, or its equivalent in Philippine currency
using the exchange rate at the time of payment, plus the stipulated
interest for each of the fiduciary placements and current accounts
involved, beginning 26 October 1979.
 32

As to respondents Motion to Clarify and/or Confirm Decision with Notice of

Judgment

Respondent, in her Motion, is of the mistaken notion that the Court of

Appeals Decision, dated 26 March 2002, as modified by the Resolution of
the same court, dated 20 November 2002, would be implemented or
executed together with this Courts Decision.

This Court clarifies that its affirmation of the Decision of the Court of
Appeals, as modified, is only to the extent that it recognizes that
petitioners had liabilities to the respondent. However, this Courts Decision
modified that of the appellate courts by making its own determination of
the specific liabilities of the petitioners to respondent and the amounts
thereof; as well as by recognizing that respondent also had liabilities to
petitioner Citibank and the amount thereof.

Thus, for purposes of execution, the parties need only refer to the
dispositive portion of this Courts Decision, dated 16 October 2006, should
it already become final and executory, without any further modifications.

As the last point, there is no merit in respondents Motion for this Court to
already declare its Decision, dated 16 October 2006, final and executory. A
judgment becomes final and executory by operation of law and,
accordingly, the finality of the judgment becomes a fact upon the lapse of
the reglementary period without an appeal or a motion for new trial or
reconsideration being filed.25 This Court cannot arbitrarily disregard the
reglementary period and declare a judgment final and executory upon the
mere motion of one party, for to do so will be a culpable violation of the
right of the other parties to due process.

IN VIEW OF THE FOREGOING, petitioners Motion for Partial Reconsideration

of this Courts Decision, dated 16 October 2006, and respondents Motion
for this Court to declare the same Decision already final and executory, are
both DENIED for lack of merit.

SO ORDERED.

FIRST DIVISION
[G.R. No. 80505 : December 4, 1990.]
192 SCRA 28
THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. MARIO
TANDOY y LIM, Defendant-Appellant.
DECISION
CRUZ, J.:
The decision of the Regional Trial Court of Makati, Branch 133 dated
October 13, 1987, convicting Mario Tandoy of the crime of violation of Art.
II, Sec. 4 of Rep. Act No. 6425 known as the Dangerous Drugs Act of 1972,
is before us on appeal.
The information against the accused-appellant read as follows:
That on or about the 27th day of May 1986, in the Municipality of Makati,
Metro Manila, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused without being authorized by law, did then
and there willfully, unlawfully and feloniously sell eight (8) pieces of dried
marijuana flowering tops, two (2) pieces of dried marijuana flowering tops
and crushed dried marijuana flowering tops, which are prohibited drug, for
and in consideration of P20.00.
Upon arraignment, Tandoy entered a plea of not guilty. After trial, Judge
Buenaventura J. Guerrero rendered a decision the dispositive portion of
which declared:
WHEREFORE, the Court finds Mario Tandoy y Lim guilty beyond
reasonable doubt of violation of Sec. 4, Art. II, Rep. Act No. 6425,
as amended, and is hereby sentenced to life imprisonment and to
pay a fine of P20,000.00 and cost.: nad
The marijuana confiscated in this case is declared confiscated and
forfeited and ordered turned over to the Dangerous Drugs Board
for proper disposal.
SO ORDERED.
The accused-appellant raises the following assignment of errors in this
appeal:
1. The Court a quo erred in finding accused guilty beyond
reasonable doubt of the crime charged despite lack of evidence to
prove that he sold marijuana to the poseur-buyer.
33
2. The Court a quo erred in admitting in evidence against the
accused Exh. "E-2-A" which is merely a xerox copy of the P10.00
bill allegedly used as buy-bust money.
The evidence of the prosecution may be summarized as follows:
On May 27, 1986, at about 3:30 p.m. Lt. Salido, Jr. of the Makati Police
Station dispatched Pfc. Herino de la Cruz, and Detectives Pablo R.
Singayan, Nicanor Candolesas, Luisito de la Cruz, Estanislao Dalumpines,
Antonio Manalastas and Virgilio Padua to conduct a buy-bust operation at
Solchuaga St., Barangay Singkamas, Makati.
The target area was a store along the said street, and Singayan was to
pose as the buyer. He stood alone near the store waiting for any pusher to
approach. The other members of the team strategically positioned
themselves. Soon, three men approached Singayan. One of them was the
accused-appellant, who said without preamble: "Pare, gusto mo bang
umiskor?" Singayan said yes. The exchange was made then and there
two rolls/pieces of marijuana for one P10.00 and two P5.00 bills marked
ANU (meaning Anti-Narcotics Unit).
The team then moved in and arrested Tandoy. Manalastas and Candolesas
made a body search of the accused-appellant and took from him the
marked money, as well as eight more rolls/foils of marijuana and crushed
leaves.: nad
The arresting officers brought Tandoy to the Office of the Anti-Narcotics
Unit, Makati Police Station, for investigation by Detective Marvin Pajilan.
The accused-appellant chose to remain silent after having been informed
of his constitutional rights.
These events were narrated under oath by De la Cruz, Singayan and
Pajilan. 1 Microscopic, chemical and chromotographic examination was
performed on the confiscated marijuana by Raquel P. Angeles, forensic
chemist of the National Bureau of Investigation, who later testified that the
findings were positive. The marijuana was offered as an exhibit. 2
As might be expected, the accused-appellant had a different story. His
testimony was that from 1:30 to 4:00 p.m. of the day in question, he was
playing "cara y cruz" with 15 other persons along Solchuaga St. when
somebody suddenly said that policemen were making arrests. The players
grabbed the bet money and scampered. However, he and a certain Danny
(another "cara y cruz" player) were caught and taken to the Narcotics
Command headquarters in Makati. There they were mauled and warned
that if they did not point to their fellow pushers, they would rot in jail. The
accused-appellant denied he had sold marijuana to Singayan and insisted
the bills taken from him were the bet money he had grabbed at the "cara y
cruz" game. 3
The trial court, which had the opportunity to observe the demeanor of the
witnesses and to listen to their respective testimonies, gave more

credence to the statements of the arresting officers. Applying the
presumption that they had performed their duties in a regular manner, it
rejected Tandoy's uncorroborated allegation that he had been manhandled
and framed. Tandoy had not submitted sufficient evidence of his charges,
let alone his admission that he had no quarrel with the peace officers
whom he had met only on the day of his arrest.
In People v. Patog, 4 this Court held:
When there is no evidence and nothing to indicate the principal witness for
the prosecution was actuated by improper motives, the presumption is that
he was not so actuated and his testimony is entitled to full faith and credit.
Tandoy submits that "one will not sell this prohibited drug to another who is
a total stranger until the seller is certain of the identity of the buyer."
The conjecture must be rejected.: nad
In People v. Paco, 5 this Court observed:
Drug-pushing when done on a small level as in this case belongs to that
class of crimes that may be committed at anytime and at any place. After
the offer to buy is accepted and the exchange is made, the illegal
transaction is completed in a few minutes. The fact that the parties are in a
public place and in the presence of other people may not always
discourage them from pursuing their illegal trade as these factors may
even serve to camouflage the same. Hence, the Court has sustained the
conviction of drug pushers caught selling illegal drugs in a billiard hall
(People v. Rubio, G.R. No. 66875, June 19, 1986, 142 SCRA 329; People v.
Sarmiento, G.R. No. 72141, January 12, 1987, 147 SCRA 252), in front of a
store (People vs. Khan, supra) along a street at 1:45 p.m. (People v.
Toledo, G.R. No. 67609, November 22, 1985, 140 SCRA 259), and in front of
a house (People v. Policarpio, G.R. No. 69844, February 23, 1988).
As the Court has also held, "What matters is not an existing familiarity
between the buyer and the seller but their agreement and the acts
constituting the sale and delivery of the marijuana leaves." 6
Under the second assigned error, the accused-appellant invokes the best
evidence rule and questions the admission by the trial court of the xerox
copy only of the marked P10.00 bill.
The Solicitor General, in his Comment, correctly refuted that contention
thus:
This assigned error centers on the trial court's admission of the P10.00 bill
marked money (Exh. E-2-A) which, according to the appellant, is excluded
under the best evidence rule for being a mere xerox copy. Apparently,
appellant erroneously thinks that said marked money is an ordinary
document falling under Sec. 2, Rule 130 of the Revised Rules of Court
which excludes the introduction of secondary evidence except in the five
(5) instances mentioned therein.:-cralaw
34
The best evidence rule applies only when the contents of the document are
the subject of inquiry. Where the issue is only as to whether or not such
document was actually executed, or exists, or in the circumstances
relevant to or surrounding its execution, the best evidence rule does not
apply and testimonial evidence is admissible. (Cf. Moran, op. cit., pp. 76-
77; 4 Martin, op. cit., p. 78.)
Since the aforesaid marked money was presented by the prosecution
solely for the purpose of establishing its existence and not its contents,
other substitutionary evidence, like a xerox copy thereof, is therefore
admissible without the need of accounting for the original.
Moreover, the presentation at the trial of the "buy-bust money" was not
indispensable to the conviction of the accused-appellant because the sale
of the marijuana had been adequately proved by the testimony of the
police officers. So long as the marijuana actually sold by the accused-
appellant had been submitted as an exhibit, the failure to produce the
marked money itself would not constitute a fatal omission.
We are convinced from the evidence on record that the prosecution has
overcome the constitutional presumption of innocence in favor of the
accused-appellant with proof beyond reasonable doubt of his guilt. He
must therefore suffer the penalty prescribed by law for those who would
visit the scourge of drug addiction upon our people.
WHEREFORE, the appeal is DISMISSED and the challenged decision
AFFIRMED in toto, with costs against
FACTS:
On May 27, 1986, at about 3:30 p.m. Lt. Salido, Jr. of the Makati Police
Station dispatched Pfc. Herino de la Cruz, and Detectives Pablo R.
Singayan, Nicanor Candolesas, Luisito de la Cruz, Estanislao Dalumpines,
Antonio Manalastas and Virgilio Padua to conduct a buy-bust operation at
Solchuaga St., Barangay Singkamas, Makati.
The target area was a store along the said street, and Singayan was to
pose as the buyer. He stood alone near the store waiting for any pusher to
approach. The other members of the team strategically positioned
themselves. Soon, three men approached Singayan. One of them was the
accused-appellant, who said without preamble: "Pare, gusto mo bang
umiskor?" Singayan said yes. The exchange was made then and there
two rolls/pieces of marijuana for one P10.00 and two P5.00 bills marked
ANU (meaning Anti-Narcotics Unit).
The team then moved in and arrested Tandoy. Manalastas and Candolesas
made a body search of the accused-appellant and took from him the
marked money, as well as eight more rolls/foils of marijuana and crushed
leaves.: nad
The arresting officers brought Tandoy to the Office of the Anti-Narcotics
Unit, Makati Police Station, for investigation by Detective Marvin Pajilan.
 35

The accused-appellant chose to remain silent after having been informed
of his constitutional rights.
These events were narrated under oath by De la Cruz, Singayan and
Pajilan. Microscopic, chemical and chromotographic examination was
performed on the confiscated marijuana by Raquel P. Angeles, forensic
chemist of the National Bureau of Investigation, who later testified that the
findings were positive. The marijuana was offered as an exhibit.
relevant to or surrounding its execution, the best evidence rule does not
apply and testimonial evidence is admissible.
Since the aforesaid marked money was presented by the prosecution
solely for the purpose of establishing its existence and not its contents,
other substitutionary evidence, like a xerox copy thereof, is therefore
admissible without the need of accounting for the original.

ISSUES:

1. The Court a quo erred in finding accused guilty beyond reasonable doubt
of the crime charged despite lack of evidence to prove that he sold
marijuana to the poseur-buyer.
2. The Court a quo erred in admitting in evidence against the accused Exh.
"E-2-A" which is merely a xerox copy of the P10.00 bill allegedly used as
buy-bust money.

RULING:

The trial court, which had the opportunity to observe the demeanor of the
witnesses and to listen to their respective testimonies, gave more
credence to the statements of the arresting officers. Applying the
presumption that they had performed their duties in a regular manner, it
rejected Tandoy's uncorroborated allegation that he had been manhandled
and framed. Tandoy had not submitted sufficient evidence of his charges,
let alone his admission that he had no quarrel with the peace officers
whom he had met only on the day of his arrest.
We are convinced from the evidence on record that the prosecution has
overcome the constitutional presumption of innocence in favor of the
accused-appellant with proof beyond reasonable doubt of his guilt. He
must therefore suffer the penalty prescribed by law for those who would
visit the scourge of drug addiction upon our people.

Under the second assigned error, the accused-appellant invokes the best
evidence rule and questions the admission by the trial court of the xerox
copy only of the marked P10.00 bill.:This assigned error centers on the trial
court's admission of the P10.00 bill marked money (Exh. E-2-A) which,
according to the appellant, is excluded under the best evidence rule for
being a mere xerox copy. Apparently, appellant erroneously thinks that said
marked money is an ordinary document falling under Sec. 2, Rule 130 of
the Revised Rules of Court which excludes the introduction of secondary
evidence except in the five (5) instances mentioned therein.:-cralaw

The best evidence rule applies only when the contents of the document are
the subject of inquiry. Where the issue is only as to whether or not such
document was actually executed, or exists, or in the circumstances

THIRD DIVISION
G.R. No. 191696 April 10, 2013
ROGELIO DANTIS, Petitioner,
vs.
JULIO MAGHINANG, JR., Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside
the January 25, 2010 Decision1 and the March 23, 2010 Resolution2 of the
Court of Appeals (CA). in CA-G.R. CV No. 85258, reversing the March 2,
2005 Decision3 of the Regional Trial Court, Branch 18, Malolos, Bulacan
(RTC), in an action for quieting of title and recovery of possession with
damages.
The Facts
The case draws its origin from a complaint 4 for quieting of title and
recovery of possession with damages filed by petitioner Rogelio Dantis
(Rogelio) against respondent Julio Maghinang, Jr. (Julio, Jr.) before the RTC,
docketed as Civil Case No. 280-M-2002. Rogelio alleged that he was the
registered owner of a parcel of land covered by Transfer Certificate of Title
(TCT) No. T-125918, with an area of 5,657 square meters, located in Sta.
Rita, San Miguel, Bulacan; that he acquired ownership of the property
through a deed of extrajudicial partition of the estate of his deceased
father, Emilio Dantis (Emilio), dated December 22, 1993; that he had been
paying the realty taxes on the said property; that Julio, Jr. occupied and
built a house on a portion of his property without any right at all; that
demands were made upon Julio, Jr. that he vacate the premises but the
same fell on deaf ears; and that the acts of Julio, Jr. had created a cloud of
doubt over his title and right of possession of his property. He, thus, prayed
that judgment be rendered declaring him to be the true and real owner of
the parcel of land covered by TCT No. T-125918; ordering Julio, Jr. to deliver
the possession of that portion of the land he was occupying; and directing
Julio, Jr. to pay rentals from October 2000 and attorneys fees of
P100,000.00.
36
He added that he was constrained to institute an ejectment suit against
Julio, Jr. before the Municipal Trial Court of San Miguel, Bulacan (MTC), but
the complaint was dismissed for lack of jurisdiction and lack of cause of
action.
In his Answer,5 Julio, Jr. denied the material allegations of the complaint. By
way of an affirmative defense, he claimed that he was the actual owner of
the 352 square meters (subject lot) of the land covered by TCT No. T-
125918 where he was living; that he had been in open and continuous
possession of the property for almost thirty (30) years; the subject lot was
once tenanted by his ancestral relatives until it was sold by Rogelios
father, Emilio, to his father, Julio Maghinang, Sr. (Julio, Sr.); that later, he
succeeded to the ownership of the subject lot after his father died on
March 10, 1968; and that he was entitled to a separate registration of the
subject lot on the basis of the documentary evidence of sale and his open
and uninterrupted possession of the property.
As synthesized by the RTC from the respective testimonies of the principal
witnesses, their diametrically opposed positions are as follows:
Plaintiff Rogelio Dantis testified that he inherited 5,657 square meters of
land, identified as Lot 6-D-1 of subdivision plan Psd-031421-054315,
located at Sta. Rita, San Miguel, Bulacan, through an Extrajudicial Partition
of Estate of Emilio Dantis, executed in December 1993 which land was
titled later on under his name, Rogelio Dantis, married to Victoria Payawal,
as shown by copy of Transfer Certificate of Title No. T-125918, issued by
the Register of Deeds of Bulacan on September 29, 1998, declared for
taxation purposes as Tax Declaration with ARP No. C20-22-043-07-046.
According to him, defendant and his predecessor-in-interest built the house
located on said lot. When he first saw it, it was only a small hut but when
he was about 60 years old, he told defendant not to build a bigger house
thereon because he would need the land and defendant would have to
vacate the land. Plaintiff, however, has not been in physical possession of
the premises.
Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness,
testified that he has no title over the property he is occupying. He has not
paid realty taxes thereon. He has not paid any rental to anybody. He is
occupying about 352 square meters of the lot. He presented an affidavit
executed on September 3, 1953 by Ignacio Dantis, grandfather of Rogelio
Dantis and the father of Emilio Dantis. The latter was, in turn, the father of
Rogelio Dantis.
 37

The affidavit, according to affiant Ignacio Dantis, alleged that Emilio Dantis 3. ordering defendant Julio Maghinang, Jr. and all persons claiming under
agreed to sell 352 square meters of the lot to Julio Maghinang on him to peacefully vacate the said real property and surrender the
installment. Defendant was then 11 years old in 1952. possession thereof to plaintiff or latters successors-in-interest.

Defendant Julio Maghinang, Jr. likewise testified for the defendants case as No pronouncement as to costs in this instance.
follows: He owns that house located at Sta. Rita, San Miguel, Bulacan, on a
352 square meter lot. He could not say that he is the owner because there SO ORDERED.9
is still question about the lot. He claimed that his father, Julio Maghinang
(Sr.), bought the said lot from the parents of Rogelio Dantis. He admitted Julio, Jr. moved for a reconsideration of the March 2, 2005 Decision, but the
that the affidavit was not signed by the alleged vendor, Emilio Dantis, the motion was denied by the RTC in its May 3, 2005 Order.10 Feeling
father of Rogelio Dantis. The receipt he presented was admittedly a mere aggrieved, Julio, Jr. appealed the decision to the CA.
photocopy. He spent P50,000.00 as attorneys fees. Since 1953, he has not
declared the property as his nor paid the taxes thereon because there is a
On January 25, 2010, the CA rendered the assailed decision in CA-G.R. CV
problem.6
NO. 85258, finding the appeal to be impressed with merit. It held that
Exhibit "4" was an indubitable proof of the sale of the 352-square meter lot
On March 2, 2005, the RTC rendered its decision declaring Rogelio as the between Emilio and Julio, Sr. It also ruled that the partial payment of the
true owner of the entire 5,657-square meter lot located in Sta. Rita, San purchase price, coupled with the delivery of the res, gave efficacy to the
Miguel, Bulacan, as evidenced by his TCT over the same. The RTC did not oral sale and brought it outside the operation of the statute of frauds.
lend any probative value on the documentary evidence of sale adduced by Finally, the court a quo declared that Julio, Jr. and his predecessors-in-
Julio, Jr. consisting of: 1) an affidavit allegedly executed by Ignacio Dantis interest had an equitable claim over the subject lot which imposed on
(Ignacio), Rogelios grandfather, whereby said affiant attested, among Rogelio and his predecessors-in-interest a personal duty to convey what
others, to the sale of the subject lot made by his son, Emilio, to Julio, Sr. had been sold after full payment of the selling price. The decretal portion
(Exhibit "3")7; and 2) an undated handwritten receipt of initial of the CA decision reads:
downpayment in the amount of 100.00 supposedly issued by Emilio to
Julio, Sr. in connection with the sale of the subject lot (Exhibit "4"). 8 The
IN VIEW OF THE FOREGOING, the decision appealed from is reversed. The
RTC ruled that even if these documents were adjudged as competent
heirs of Julio Maghinang Jr. are declared the owners of the 352-square
evidence, still, they would only serve as proofs that the purchase price for
meter portion of the lot covered by TCT No. T-125968 where the residence
the subject lot had not yet been completely paid and, hence, Rogelio was
of defendant Julio Maghinang is located, and the plaintiff is ordered to
not duty-bound to deliver the property to Julio, Jr. The RTC found Julio, Jr. to
reconvey the aforesaid portion to the aforesaid heirs, subject to partition
be a mere possessor by tolerance. The dispositive portion of the RTC
by agreement or action to determine the exact metes and bounds and
decision reads:
without prejudice to any legal remedy that the plaintiff may take with
respect to the unpaid balance of the price.
WHEREFORE, Judgment is hereby rendered as follows:
SO ORDERED.11
1. quieting the title and removing whatever cloud over the title on the
parcel of land, with area of 5,647 sq. meters, more or less, located at Sta.
The motion for reconsideration12 filed by Rogelio was denied by the CA in
Rita, San Miguel, Bulacan, covered by Transfer Certificate of Title No. T-
its March 23, 2010 Resolution. Unfazed, he filed this petition for review on
125918 issued by the Register of Deeds of Bulacan in the name of "Rogelio
certiorari before this Court.
Dantis, married to Victoria Payawal";

Issues:
2. declaring that Rogelio Dantis, married to Victoria Payawal, is the true
and lawful owner of the aforementioned real property; and

The fundamental question for resolution is whether there is a perfected
contract of sale between Emilio and Julio, Sr. The determination of this
issue will settle the rightful ownership of the subject lot.
Rogelio submits that Exhibit "3" and Exhibit "4" are devoid of evidentiary
value and, hence, deserve scant consideration. He stresses that Exhibit "4"
is inadmissible in evidence being a mere photocopy, and the existence and
due execution thereof had not been established. He argues that even if
Exhibit "4" would be considered as competent and admissible evidence,
still, it would not be an adequate proof of the existence of the alleged oral
contract of sale because it failed to provide a description of the subject lot,
including its metes and bounds, as well as its full price or consideration. 13
Rogelio argues that while reconveyance may be availed of by the owner of
a real property wrongfully included in the certificate of title of another, the
remedy is not obtainable herein since he is a transferee in good faith,
having acquired the land covered by TCT No. T-125918, through a Deed of
Extrajudicial Partition of Estate.14 He asserts that he could not be
considered a trustee as he was not privy to Exhibit "4." In any event, he
theorizes that the action for reconveyance on the ground of implied trust
had already prescribed since more than 10 years had lapsed since the
execution of Exhibit "4" in 1953. It is the petitioners stance that Julio, Jr.
did not acquire ownership over the subject lot by acquisitive prescription
contending that prescription does not lie against a real property covered by
a Torrens title. He opines that his certificate of title to the subject lot
cannot be collaterally attacked because a Torrens title is indefeasible and
must be respected unless challenged in a direct proceeding. 15
The Courts Ruling
In the case at bench, the CA and the RTC reached different conclusions on
the question of whether or not there was an oral contract of sale. The RTC
ruled that Rogelio Dantis was the sole and rightful owner of the parcel of
land covered by TCT No. T-125918 and that no oral contract of sale was
entered into between Emilio Dantis and Julio Maghinang, Sr. involving the
352-square meter portion of the said property. The CA was of the opposite
view. The determination of whether there existed an oral contract of sale is
essentially a question of fact.
In petitions for review under Rule 45, the Court, as a general rule, does not
venture to re-examine the evidence presented by the contending parties
during the trial of the case considering that it is not a trier of facts and the
38
findings of fact of the CA are conclusive and binding upon this Court. The
rule, however, admits of several exceptions. One of which is when the
findings of the CA are contrary to those of the trial court. 16 Considering the
incongruent factual conclusions of the CA and the RTC, this Court is
constrained to reassess the factual circumstances of the case and
reevaluate them in the interest of justice.
The petition is meritorious.
It is an age-old rule in civil cases that he who alleges a fact has the burden
of proving it and a mere allegation is not evidence.17 After carefully sifting
through the evidence on record, the Court finds that Rogelio was able to
establish a prima facie case in his favor tending to show his exclusive
ownership of the parcel of land under TCT No. T-125918 with an area of
5,657 square meters, which included the 352-square meter subject lot.
From the records, it appears that TCT No. T-125918 is a derivative of TCT
No. T-256228, which covered a bigger area of land measuring 30,000
square meters registered in the name of Emilio Dantis; that Emilio died
intestate on November 13, 1952; that Emilios five heirs, including Rogelio,
executed an extra-judicial partition of estate on December 22, 1993 and
divided among themselves specific portions of the property covered by TCT
No. T-256228, which were already set apart by metes and bounds; that the
land known as Lot 6-D-1 of the subdivision plan Psd-031421-054315 with
an area of 5,657 sq. m. went to Rogelio, the property now covered by TCT
No. T-125918; and that the property was declared for realty tax purpose in
the name of Rogelio for which a tax declaration was issued in his name;
and that the same had not been transferred to anyone else since its
issuance.
In light of Rogelios outright denial of the oral sale together with his
insistence of ownership over the subject lot, it behooved upon Julio, Jr. to
contravene the formers claim and convince the court that he had a valid
defense. The burden of evidence shifted to Julio, Jr. to prove that his father
bought the subject lot from Emilio Dantis. In Jison v. Court of Appeals, 18 the
Court held:
Simply put, he who alleges the affirmative of the issue has the burden of
proof, and upon the plaintiff in a civil case, the burden of proof never parts.
However, in the course of trial in a civil case, once plaintiff makes out a
prima facie case in his favor, the duty or the burden of evidence shifts to
defendant to controvert plaintiffs prima facie case, otherwise, a verdict
must be returned in favor of plaintiff. Moreover, in civil cases, the party

having the burden of proof must produce a preponderance of evidence
thereon, with plaintiff having to rely on the strength of his own evidence
and not upon the weakness of the defendants. The concept of
"preponderance of evidence" refers to evidence which is of greater weight,
or more convincing, that which is offered in opposition to it; at bottom, it
means probability of truth.19
Julio, Jr. failed to discharge this burden. His pieces of evidence, Exhibit "3"
and Exhibit "4," cannot prevail over the array of documentary and
testimonial evidence that were adduced by Rogelio. The totality of Julio,
Jr.s evidence leaves much to be desired.
To begin with, Exhibit "3," the affidavit of Ignacio, is hearsay evidence and,
thus, cannot be accorded any evidentiary weight. Evidence is hearsay
when its probative force depends on the competency and credibility of
some persons other than the witness by whom it is sought to be produced.
The exclusion of hearsay evidence is anchored on three reasons: 1)
absence of cross-examination; 2) absence of demeanor evidence; and 3)
absence of oath.20
Jurisprudence dictates that an affidavit is merely hearsay evidence where
its affiant/maker did not take the witness stand.21 The sworn statement of
Ignacio is of this kind. The affidavit was not identified and its averments
were not affirmed by affiant Ignacio. Accordingly, Exhibit "3" must be
excluded from the judicial proceedings being an inadmissible hearsay
evidence. It cannot be deemed a declaration against interest for the matter
to be considered as an exception to the hearsay rule because the declarant
was not the seller (Emilio), but his father (Ignacio). Exhibit "4," on the other
hand, is considered secondary evidence being a mere photocopy which, in
this case, cannot be admitted to prove the contents of the purported
undated handwritten receipt. The best evidence rule requires that the
highest available degree of proof must be produced. For documentary
evidence, the contents of a document are best proved by the production of
the document itself to the exclusion of secondary or substitutionary
evidence, pursuant to Rule 130, Section 322.
A secondary evidence is admissible only upon compliance with Rule 130,
Section 5, which states that: when the original has been lost or destroyed,
or cannot be produced in court, the offeror, upon proof of its execution or
existence and the cause of its unavailability without bad faith on his part,
may prove its contents by a copy, or by a recital of its contents in some
authentic document, or by the testimony of witnesses in the order stated.
39
Accordingly, the offeror of the secondary evidence is burdened to
satisfactorily prove the predicates thereof, namely: (1) the execution or
existence of the original; (2) the loss and destruction of the original or its
non-production in court; and (3) the unavailability of the original is not due
to bad faith on the part of the proponent/offeror. Proof of the due execution
of the document and its subsequent loss would constitute the basis for the
introduction of secondary evidence.23 In MCC Industrial Sales Corporation v.
Ssangyong Corporation,24 it was held that where the missing document is
the foundation of the action, more strictness in proof is required than
where the document is only collaterally involved.
Guided by these norms, the Court holds that Julio, Jr. failed to prove the
due execution of the original of Exhibit "4" as well as its subsequent loss. A
nexus of logically related circumstance rendered Julio, Jr.s evidence highly
suspect. Also, his testimony was riddled with improbabilities and
contradictions which tend to erode his credibility and raise doubt on the
veracity of his evidence.
First, the claim of Julio, Jr. that Emilio affixed his signature on the original of
Exhibit "4" in 1953 is highly improbable because record shows that Emilio
died even before that year, specifically, on November 13, 1952. Excerpts
from Julio, Jr.s testimony relative to this matter are as follows:
Atty. Vicente Millora
(On Cross-examination)
Q: You dont remember how old you were when this according to you you
witnessed Emilio Dantis signed this?
A: Eleven years old, Sir.
Q: So that was 1953?
A: Yes, Sir.
Q: And you were then?
A: I was born October 1942, Sir.
Q: You were eleven (11) years old?
 40

A: Yes, Sir. Q: x x x Where did you keep that document?

Q: And you mean to say that you witnessed the signing allegedly of the A: I was the one keeping that document because I live in different places,
original of Exhibit "4" when you were eleven (11) years old? [the said] it was lost or misplaced, Sir.

A: Yes, Sir. Q: In other words, it was lost while the same was in your possession??

Q: And you remember what was signed in this receipt. From your memory A: Yes, Sir.27 (Emphasis supplied)
can you tell the title of this Exhibit "4"?
Still, later, Julio, Jr. claimed that his sister was the one responsible for the
A: What I can say that it is a Sale, Sir. loss of the original of Exhibit "4" after borrowing the same from him. Atty.
Vicente Millora
Q: So, when you said that you witnessed an alleged sale you are referring
to Exhibit "4"? (On Cross-examination)

A: Yes, Sir.25 (Emphasis supplied) Q: So, who is your sister to whom you gave the original?

Second, Julio, Jr.s testimony pertinent to the alleged loss of the original of A: Benedicta Laya, Sir.
Exhibit "4" is laden with inconsistencies that detract from his credibility. His
testimony bears the earmarks of falsehood and, hence, not reliable. Julio, Q: In other words now, you did not lost the document or the original of
Jr. testified in this wise: Exhibit "4" but you gave it to your sister, am I correct?

Atty. Roldan Villacorta A: I just lent to her the original copy, Sir.

(On Direct examination) Q: So, you lent this original of Exhibit "4" to your sister and your sister
never returned the same to you?
Q: Mr. Witness, I noticed that this document marked as Exhibit "4" is only a
photocopy, where is the original of this document? A: Yes, Sir, because it was lost, that was the only one left in her custody.

A: The original was with the safekeeping of my parents because of the Interpreter:
lapse of time the original was misplaced, Sir. 26
Witness referring to the xerox copy.
The above testimony of Julio, Jr. tends to give the impression that the
original of the document was lost while it was in the possession of his Atty. Vicente Millora
parents. During cross-examination, however, he testified that it was lost
while it was in his possession.
Q: In other words, it was your sister who lost the original, is that correct?

Atty. Vicente Millora

A: Yes, Sir, when I lent the original.28 (Emphasis supplied)

(On Cross-examination)

The Court also notes the confused narration of Julio, Jr. regarding the last
time he saw the original of Exhibit "4."
Atty. Vicente Millora
(On Cross-examination)
Q: And when did you last see the original?
A: When my mother died in 1993 that was the last time I tried to see the
original of the document after her interment, Sir.
Q: Where did you see this document?
A: From the safekeeping of my mother, Sir.29
xxxx
Q: When did you get this Exhibit "4" now, the photocopy from your sister?
A: When the interment of my mother in September 1993, Sir.
Q: Now, let us reform. Which one did you get after the interment of your
mother, this Exhibit "4" or the original?
A: I asked that xerox copy because I have lost the original and I could not
find the same, Sir.
Q: So, from the safe of your mother after her interment, what used you
found and got this Exhibit "4"?
A: Yes, Sir, from my sister.
Q: So, not from your mother safe?
A: The original was taken from the safe of my mother, Sir.
Q: So after your mothers death you never saw the original?
41
A: I did not see it anymore because the original was lost before she died,
Sir.30 (Underscoring supplied)
Third, it is quite strange that two receipts were prepared for the initial
payment of 100.00 in connection with the sale of the subject lot. The
Court notes that the contents of Exhibit "4" were similar to those of Annex
"A"31 of Julio, Jr.s Answer, dated June 9, 2002. Annex "A," however, was
typewritten and the name of the recipient indicated therein was a certain
Cornelio A. Dantis, whose identity and participation in the alleged sale was
never explained.
Fourth, apart from the lone testimony of Julio, Jr., no other witness who
knew or read Exhibit "4," much less saw it executed, was presented. In the
absence of any shred of corroborative evidence, the Court cannot help but
entertain doubts on the truthfulness of Julio, Jr.s naked assertion.
Assuming, in gratia argumenti, that Exhibit "4" is admissible in evidence,
there will still be no valid and perfected oral contract for failure of Julio, Jr.
to prove the concurrence of the essential requisites of a contract of sale by
adequate and competent evidence.
By the contract of sale, one of the contracting parties obligates himself to
transfer the ownership of, and to deliver, a determinate thing, and the
other to pay therefor a price certain in money or its equivalent. 32 A contract
of sale is a consensual contract and, thus, is perfected by mere consent
which is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. 33 Until the
contract of sale is perfected, it cannot, as an independent source of
obligation, serve as a binding juridical relation between the parties. 34 The
essential elements of a contract of sale are: a) consent or meeting of the
minds, that is, consent to transfer ownership in exchange for the price; b)
determinate subject matter; and c) price certain in money or its
equivalent.35 The absence of any of the essential elements shall negate the
existence of a perfected contract of sale.36
Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be
the receipt that should further corroborate the existence of the sale. At
best, his testimony only alleges but does not prove the existence of the
verbal agreement. Julio, Jr. miserably failed to establish by preponderance
of evidence that there was a meeting of the minds of the parties as to the
subject matter and the purchase price.

The chief evidence of Julio, Jr. to substantiate the existence of the oral
contract of sale is Exhibit "4." For a better understanding and resolution of
the issue at hand, Exhibit "4" is being reproduced here:
Alamin ng sino mang
Makababasa
Akong si Emilio Dantis may sapat na Gulang may asawa naninirahan sa Sta
Rita San Miguel Bul. ay kusang nagsasasay ng sumosunod.
Na ako Tumanggap Kay Julio Maghinang ng P100.00 peso cuartang Pilipino,
bilang paunang bayad sa Lupa niyang nilote sa akin 400 apat na raan
mahigit na metro cudrado.
Testigo Tumangap,
Emilio a Dantis
A perusal of the above document would readily show that it does not
specify a determinate subject matter. Nowhere does it provide a
description of the property subject of the sale, including its metes and
bounds, as well as its total area. The Court notes that while Julio, Jr.
testified that the land subject of the sale consisted of 352 square meters,
Exhibit "4," however, states that its more than 400 square meters.
Moreover, Exhibit "4" does not categorically declare the price certain in
money. Neither does it state the mode of payment of the purchase price
and the period for its payment.
In Swedish Match, AB v. Court of Appeals,37 the Court ruled that the
manner of payment of the purchase price was an essential element before
a valid and binding contract of sale could exist. Albeit the Civil Code does
not explicitly provide that the minds of the contracting parties must also
meet on the terms or manner of payment of the price, the same is needed,
otherwise, there is no sale.38 An agreement anent the manner of payment
goes into the price so much so that a disagreement on the manner of
payment is tantamount to a failure to agree on the price. 39 Further, in
Velasco v. Court of Appeals,40 where the parties already agreed on the
object of sale and on the purchase price, but not on how and when the
downpayment and the installment payments were to be paid, this Court
ruled:
42
Such being the situation, it cannot, therefore, be said that a definite and
firm sales agreement between the parties had been perfected over the lot
in question. Indeed, this Court has already ruled before that a definite
agreement on the manner of payment of the purchase price is an essential
element in the formation of a binding and enforceable contract of sale. The
fact, therefore, that the petitioners delivered to the respondent the sum of
P10,000.00 as part of the down-payment that they had to pay cannot be
considered as sufficient proof of the perfection of any purchase and sale
agreement between the parties herein under Art. 1482 of the new Civil
Code, as the petitioners themselves admit that some essential matter - the
terms of payment - still had to be mutually covenanted. 41
The CA held that partial performance of the contract of sale- giving of a
downpayment coupled with the delivery of the res - took the oral contract
out of the scope of the Statute of Frauds. This conclusion arose from its
erroneous finding that there was a perfected contract of sale. The above
disquisition, however, shows that there was none. There is, therefore, no
basis for the application of the Statute of Frauds. The application of the
Statute of Frauds presupposes the existence of a perfected contract. 42 As
to the delivery of the res, it does not appear to be a voluntary one
pursuant to the purported sale. If Julio, Jr. happened to be there, it was
because his ancestors tenanted the land. It must be noted that when Julio,
Jr. built his house, Rogelio protested.
WHEREFORE, the petition is GRANTED. The assailed January 25, 2010
Decision and the March 23, 2010 Resolution of the Court Appeals, in CA-
G.R. CV No. 85258, are REVERSED and SET ASIDE. The March 2, 2005
Decision of the Regional Trial Court of Malolos, Bulacan, Branch 18, in Civil
Case No. 280-M-2002, is REINSTATED.
SO ORDERED.

FIRST DIVISION
G.R. No. 108453 July 11, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
DONALD DISMUKE Y PAMARITO, accused-appellant.
DAVIDE, JR., J.:
In an information 1 filed with the Regional Trial Court of Valenzuela, Metro
Manila, and docketed therein as Criminal Case No. 994-V-92, accused
Donald Dismuke y Pamarito was charged with the violation of Section 4,
Article II of R.A. No. 6425, as amended, committed in this wise:
That on or about the 8th day of February 1992 in
Valenzuela, MM. and within the jurisdiction of this
Honorable Court, the above-named accused, without
having been authorized by law, did then and there wilfully,
unlawfully and feloniously deliver, sell and give away to
one PO2 Nelson Labrador two tea bags of marijuana
flowering tops for one Twenty peso bill with SN QB65721,
knowing the same to be a prohibited drug under the
provision of the above-cited law.
CONTRARY TO LAW.
The accused pleaded not guilty at his arraignment on 24 February 1992.
After trial on the merits, the lower court promulgated on 28 August 1992
its decision 2 finding the accused guilty of the crime charged and
sentencing him to suffer the penalty of reclusion perpetua, to pay a fine of
P20,000.00, and to pay the costs.
In the main, the prosecution's case drew its support from the
uncorroborated testimony of PO3 Nelson Labrador of the Northern Police
District Anti-Narcotics Unit (NPD-ANU). He had joined the National Police
Service on 5 November 1991. 3 According to him, at about 3:00 p.m. of 8
February 1992 (barely three months after he had joined the service), he
was at the office of the NPD-ANU at Sangandaan, Caloocan City, when an
informer arrived and told him that a certain "Donald" was selling
43
marijuana. 4 He then decided to conduct a buy-bust operation, with himself
acting as the buyer, and with PO3 Eliseo Gargaritano and PO3 Wilfredo
Lumba as the other team members. Together with the informer, they
proceeded to Consuelo Street, Doa Ata Subdivision, Marulas, Valenzuela,
Metro Manila. They arrived at their destination at about 5:00 p.m. and
while cruising around, their informer pointed to a man near a sari-sari store
as Donald, the accused in this case. Labrador, who was in plainclothes,
approached Donald and told the latter of his "intention to buy P20.00 worth
of marijuana." Since Donald "trusted" him, he (Labrador) "gave him the
buy/bust money" and Donald in turn gave the former "two teabags of
marijuana." 5 Then, pursuant to the team's pre-arranged signal, Labrador
held Donald's right hand. Responding thereto, the other members of the
team came out from their strategic locations, identified themselves, and
assisted Labrador in arresting Donald. The team then brought Donald to
the NPD-ANU office in Sangandaan, Caloocan City, where he was turned
over to the unit's investigator, a certain Reynaldo Lichido, for proper
disposition and investigation. The latter prepared a referral-letter to the PC
Laboratory for examination of the tea bags.
Labrador, however, could only produce in court a photocopy of the alleged
marked money (Exhibit "E") because the bill itself was allegedly in the
custody of PO3 Gargaritano. The bill had supposedly been marked by
Gargaritano on the "Saligang Batas" portion thereof. 6 The latter, despite
subpoenas sent to him, failed to appear, thereby causing the
postponement of the hearing and prompting the trial court to issue orders
requiring him to show cause why he should not be held in contempt of
court. 7 Although he subsequently appeared, the prosecution did not
present him as a witness in the case.
Through Ms. Tita V. Advincula, a forensic chemist of the PNP Central
Laboratory Section, Central Police District, Manila, the prosecution also
proved that the contents of the two heat-sealed transparent plastic bags
(Exhibits "B-1" and "B-2"), which were transmitted to her office by PNP
Inspector Asuncion S. Santos of the District Dangerous Drug Enforcement
Division of the Northern Police District Command, were found positive "for
marijuana, a prohibited drug." 8
On the other hand, through the testimonies of the accused and Dennis
Pinpin, the defense presented a different version of the incident. According
to the accused, in the afternoon of 8 February 1992, he and his friends,
namely, Dennis Pinpin, Ricky Pinpin, and Erwin Soriano were at Consuelo
Street, Marulas, Valenzuela, helping their friend, Allan Olequino, transfer

residence. 9 Suddenly, a tricycle stopped, and PO3 Nelson Labrador and his
two companions, Erning and Vicente, alighted from the tricycle. Labrador
asked who among them had quarreled with his brother. Labrador's
companions pointed to the accused and so Nelson told him to board the
tricycle and picked up a piece of wood of which he brandished at him. The
three forced him to board the tricycle. The accused protested that he had
not done anything, but he was told to do his explaining at the police
headquarters. He was not, however, brought to the headquarters but to a
place near the barangay hall at F. Bautista Street in Marulas where he was
questioned about the identities of the pushers in the area. When he failed
to name or pinpoint any pusher, he was taken to the Sangandaan police
headquarters where PO3 Labrador took out two plastic teabags of
marijuana which Labrador threatened to use against him if he would still
refuse to name the pushers. Nonetheless, he insisted that he did not know
any pusher. He was detained at the said headquarters for about two days.
Thereafter, he was brought before a fiscal in Caloocan City after being
warned not to say anything against them. 10
The accused further testified that during his school days at the Valenzuela
Municipal High School in 1990, he intervened in a fight between his
neighbor and Noel Labrador, a brother of PO3 Labrador. When he failed to
pacify them, he boxed Noel, hitting him on the chin. This incident came to
the knowledge of the school principal who then called them to a
conference, which PO3 Labrador attended. He had personally known PO3
Labrador for a long time because the latter's residence is at F. Bautista
Street, Marulas, Valenzuela, which is merely within "walking distance" from
where he, the accused, lived. 11
Dennis Pinpin, a neighbor, friend, and former schoolmate of Donald,
corroborated the latter's testimony on the incident of 8 February 1992, 12
He also testified that he was the one who had a misunderstanding with
Noel Labrador in 1990. He reported the matter to Donald who tried to
settle their differences but Donald ended up fighting with Noel. He, Donald,
and Noel were called to the principal's office and were reprimanded by the
principal. At the said conference, Noel's parents and PO3 Labrador were
present. Thereafter, Noel threatened them by saying that the fight was not
yet over. 13
The lower court found the testimony of PO3 Labrador to be credible and
positive and dismissed the accused's claim that he was framed and that
the charge was ill-motivated. It said:
44
The alleged quarrel happened in 1990 almost two years
ago and was allegedly patched up and settled by the
school principal in the presence of PO2 Nelson Labrador. If
it is true that there was a fight/quarrel, the Labradors will
not wait that long a time to take the alleged vindictive
move. 14
In his Appellant's Brief, the accused asserts that the trial court erred:
I
. . . IN GIVING WEIGHT AND CREDENCE TO THE
IMPROBABLE AND INCREDIBLE TESTIMONY OF THE
PROSECUTION LONE EYEWITNESS.
II
. . . IN ADMITTING IN EVIDENCE THE TWO TEA BAGS OF
MARIJUANA WHICH WAS PLANTED BY POLICE OFFICER
NELSON LABRADOR IN BLATANT VIOLATION OF THE
ACCUSED ['S] CONSTITUTIONAL RIGHTS.
III
. . . IN NOT HOLDING THAT THE PROSECUTION MISERABLY
FAILED TO PROVE THE GUILT OF THE ACCUSED BEYOND
REASONABLE DOUBT. 15
At the heart of these assigned errors is the issue of credibility of witnesses.
It is well-settled that this Court will not interfere with the judgment of the
trial court in passing on the credibility of the witnesses, unless there
appears in the record some fact or circumstance of weight and influence
which has been overlooked or the significance of which has been
misapprehended or misinterpreted. 16 The reason for this is that the trial
court is in a better position to decide the question, having heard the
witnesses themselves and observed their deportment and manner of
testifying during the trial. 17
A careful review of the records of this case and a meticulous evaluation of
the evidence of the parties reveal vital facts and circumstances which the

trial court overlooked or misapprehended and which if taken into account
would alter the result of this case.
For one thing, the accused personally knew PO3 Labrador; they had met in
1990 in the principal's office of the Valenzuela Municipal High School
during a confrontation between PO3 Labrador's brother, Nelson, on the one
hand, and Dennis Pinpin and the accused on the other, after the accused
had intervened in the fight between Nelson and Dennis and boxed Nelson
on his chin. It is, therefore, most unlikely that the accused would sell a
prohibited drug to a brother of a former foe who, after the confrontation,
had warned that the fight was not yet over. 18 This incident could have
provided PO3 Labrador with a motive against the accused. The trial court is
of the view that it could not have, because the incident happened two
years earlier, the dispute was settled by the principal, and if Labrador
desired revenge, he would not have waited for two years. We do not agree.
While time may heal wounds of conflict, it does not necessarily extinguish
the desire for vengeance, which may just hibernate until the circumstances
become favorable.
In the instant case, the favorable circumstances could have arisen when
PO3 Labrador joined the PNP in November of 1991. Within three months
thereafter, he conducted the alleged buy-bust operation against the
accused solely on the basis of an alleged tip from an informer given two
hours before he conducted the operation. It may be noted that PO3
Labrador did not testify that he had obtained other derogatory information
against the accused or that he had known the accused to be a drug dealer,
pusher, or user. His conduct in this case tainted the presumption of
regularity in the performance of his duty.
For another, we have serious doubts on the existence of the alleged
marked money. There is no evidence as to who provided it and as to when
and where it was allegedly marked by PO3 Gargaritano. What Labrador
produced was a mere photocopy of the alleged marked money (Exhibit
"E"). He claimed that the marked money itself was in the possession of
Gargaritano. If it was in Gargaritano's possession, we cannot understand
why he was not called anymore to the witness stand to testify for the
prosecution when he finally appeared in court in compliance with its
orders.
While the presentation in evidence of the marked money in drugs cases
resulting from buy-bust operations may not be indispensable, 19 the
peculiar circumstances of this case, heightened by the attempt of the
45
alleged poseur-buyer to present a photocopy of what he claims to be the
buy-bust money and the unexplained failure of the prosecution to call to
the witness stand the claimed custodian of the marked money although
the latter had already appeared in court, only taint further the veracity of
PO3 Labrador's story.
Exhibit "E" is not admissible in evidence under the best evidence rule. 20 To
be admissible as secondary evidence, the prosecution should have shown
that the original marked money has been lost or destroyed or cannot be
produced in court or that it is in the custody of the adverse party. 21 The
prosecution did not.
Then too, the prosecution failed to prove that the specimens examined by
the forensic chemist were the ones purportedly sold by the accused to PO3
Labrador. According to the latter, when they arrived at their headquarters
after the buy-bust operation, he turned over the accused to their
investigator, a certain Reynaldo Lichido, for proper disposition and
investigation. Lichido also "immediately prepared the referral to the PC
Laboratory for examination in order to be sure if the specimen is positive."
22
What the forensic chemist examined were the contents of "two
transparent plastic bag [sic] containing flowering tops with rolling papers
suspected to be marijuana" transmitted by PNP Inspector Asuncion Santos,
Officer-in-Charge of the District Dangerous Drugs Enforcement Division of
the Northern Police District Command. 23 Both Lichido and Santos were not
presented by the prosecution to testify in this case. Thus, there is no
evidence to prove that what were allegedly sold by the accused to PO3
Labrador were actually the ones turned over to Lichido, that what the latter
received were turned over to Santos, and that what Santos transmitted to
the forensic chemist were those allegedly sold by the accused. The failure
to establish the evidence's chain of custody is damaging to the
prosecution's case.
On the whole then, the scanty evidence for the prosecution casts serious
doubts as to the guilt of the accused. It does not pass the test of moral
certainty and is insufficient to rebut the presumption of innocence which
the Bill of Rights guarantees the accused. It is apropos to repeat the
doctrine that an accusation is not, according to the fundamental law,
synonymous with guilt; the prosecution must overthrow the presumption of
innocence with proof of guilt beyond reasonable doubt. 24
In the light of the above disquisition, it is apparent that the law
enforcement agency charged with the enforcement of the Dangerous
 46

Drugs Act is partly to be blamed for the result of this case, assuming that it
does have a case against the accused. In People vs. Tantiado, 25 we
exhorted "the law enforcement agencies, especially those assigned to
enforce the Dangerous Drugs Act, to carefully prepare their plans for buy-
bust operations and to efficiently and effectively carry them out, ever
mindful of the possibility that their blunders may not only frustrate the
efforts to eradicate the drug menace but worse, embolden drug lords,
pushers or users into defying the authorities." Equally at fault is the
prosecuting arm of the Government, whose ineptitude in prosecuting the
case warrants that its attention be likewise directed, as in the Tantiado
case and the recent case of People vs. Camba, 26 to what was said in
People vs. Esquivel: 27

In this connection it may not be out of place to bring to the

attention of prosecuting attorneys the absolute necessity
of laying before the court the pertinent facts at their
disposal with methodical and meticulous attention,
clarifying contradictions and filling up gaps and loopholes
in their evidence, to the end that the court's mind may not
be tortured by doubts, that the innocent may not suffer
and the guilty not escape unpunished. Obvious to all, this
is the prosecution's prime duty to the court, to the
accused, and to the state.

Again, just like in People vs. Camba, 28 we cannot help but notice that the
trial court imposed the penalty of reclusion perpetua which was not the
penalty provided for by law at the time the offense charged was allegedly
committed. Although the penalty imposable is now immaterial, we call the
trial court's attention to the fact that the penalty then imposable was life
imprisonment, if only to underscore the need to impose only the penalty
which the law prescribes.

WHEREFORE, the appealed decision of Branch 171 of the Regional Trial

Court of Valenzuela, Metro Manila, in Criminal Case No. 994-V-92 is
REVERSED and, on the ground of reasonable doubt, accused-appellant
DONALD DISMUKE y PAMARITO is hereby ACQUITTED. His immediate
release from detention is hereby ordered, unless further detention for any
lawful cause is warranted.

Costs de oficio.

SO ORDERED.

FIRST DIVISION
G.R. No. 168387 August 25, 2010
SALUN-AT MARQUEZ and NESTOR DELA CRUZ, Petitioners,
vs.
ELOISA ESPEJO, ELENITA ESPEJO, EMERITA ESPEJO, OPHIRRO
ESPEJO, OTHNIEL ESPEJO, ORLANDO ESPEJO, OSMUNDO ESPEJO,
ODELEJO ESPEJO and NEMI FERNANDEZ, Respondents.
DECISION
DEL CASTILLO, J.
When the parties admit the contents of written documents but put in issue
whether these documents adequately and correctly express the true
intention of the parties, the deciding body is authorized to look beyond
these instruments and into the contemporaneous and subsequent actions
of the parties in order to determine such intent.
Well-settled is the rule that in case of doubt, it is the intention of the
contracting parties that prevails, for the intention is the soul of a contract,
not its wording which is prone to mistakes, inadequacies, or ambiguities. To
hold otherwise would give life, validity, and precedence to mere
typographical errors and defeat the very purpose of agreements.
This Petition for Review on Certiorari1 assails the October 7, 2003
Decision,2 as well as the May 11, 2005 Resolution3 of the Court of Appeals
(CA) in CA G.R. SP No. 69981. The dispositive portion of the appellate
courts Decision reads:
WHEREFORE, finding reversible error committed by the Department of
Agrarian Reform Adjudication Board, the instant petition for review is
GRANTED. The assailed Decision, dated 17 January 2001, rendered by the
Department of Agrarian Reform Adjudication Board is hereby ANNULLED
and SET ASIDE. The Decision of the Department of Agrarian Reform
Adjudication Board of Bayombong[,] Nueva Vizcaya, dated 17 March 1998,
is REINSTATED. Costs against respondents.
SO ORDERED.4
47
The reinstated Decision of the Department of Agrarian Reform Adjudication
Board (DARAB) of Bayombong, Nueva Vizcaya, in turn, contained the
following dispositive portion:
Accordingly, judgment is rendered:
1. Finding [respondents] to be the owner by re-purchase from RBBI
[of] the Murong property covered by TCT No. [T-]62096 (formerly
TCT No. 43258);
2. Ordering the cancellation of TCT with CLOA Nos. 395 and 396 in
the name[s] of Salun-at Marquez and Nestor de la Cruz
respectively, as they are disqualified to become tenants of the
Lantap property;
3. Directing RBBI to sell through VOS the Lantap property to its
rightful beneficiary, herein tenant-farmer Nemi Fernandez under
reasonable terms and conditions;
4. Ordering RBBI to return the amount paid to it by Nestor and
Salun-at; and ordering the latter to pay 20 cavans of palay per
hectare at 46 kilos per cavan unto [respondents] plus such accrued
and unpaid rentals for the past years as may be duly accounted for
with the assistance of the Municipal Agrarian Reform Officer of
Bagabag, Nueva Vizcaya who is also hereby instructed to assist the
parties execute their leasehold contracts and;
5. The order to supervise harvest dated March 11, 1998 shall be
observed until otherwise modified or dissolved by the appellate
body.
SO ORDERED.5
Factual Antecedents
Respondents Espejos were the original registered owners of two parcels of
agricultural land, with an area of two hectares each. One is located at
Barangay Lantap, Bagabag, Nueva Vizcaya (the Lantap property) while the
other is located in Barangay Murong, Bagabag, Nueva Vizcaya (the Murong
property). There is no dispute among the parties that the Lantap property
is tenanted by respondent Nemi Fernandez (Nemi) 6 (who is the husband7 of

respondent Elenita Espejo (Elenita), while the Murong property is tenanted
by petitioners Salun-at Marquez (Marquez) and Nestor Dela Cruz (Dela
Cruz).8
The respondents mortgaged both parcels of land to Rural Bank of
Bayombong, Inc. (RBBI) to secure certain loans. Upon their failure to pay
the loans, the mortgaged properties were foreclosed and sold to RBBI. RBBI
eventually consolidated title to the properties and transfer certificates of
title (TCTs) were issued in the name of RBBI. TCT No. T-62096 dated
January 14, 1985 was issued for the Murong property. It contained the
following description:
Beginning at a point marked I on plan H-176292, S. 44034 W. 1656.31 m.
more or less from B.L.L.M. No 1, Bagabag Townsite, K-27,
thence N. 28 deg. 20 E., 200.00 m. to point 2;
thence S. 61 deg. 40 E., 100.00 m. to point 3;
thence S. 28 deg. 20 W., 200.00 m. to point 4;
thence N. 61 deg. 40 W., 100.00 m. to point 1; point of beginning;
Containing an area of 2.000 hectares. Bounded on the northeast, by Road;
on the southeast, and southwest by public land; and on the northwest by
Public Land, properties claimed by Hilario Gaudia and Santos Navarrete.
Bearings true. Declination 0131 E. Points referred to are marked on plan H-
176292. Surveyed under authority of sections 12-22 Act No. 2874 and in
accordance with existing regulations of the Bureau of Lands by H.O.
Bauman Public Land Surveyor, [in] December 1912-March 1913. Note: All
corners are Conc. Mons. 15x15x60 cm. This is Lot No. 79-A=Lot No. 159 of
Bagabag Townsite, K-27.9
Subsequently, TCT No. T-62836 dated June 4, 1985 was issued for the
Lantap property and contained the following description:
Beginning at a point marked "1" on plan H-105520, N. 80 deg. 32 W.,
1150.21 m. from BLLM No. 122, Irrigation project,
thence N. 61 deg. 40E., 200.00 m. to point 2;
48
thence N. 28 deg. 20E, 100.00 m. to point 3;
thence S. 61 deg. 40E, 200.00 m. to point 4;
thence S. 28 deg. 20W, 100.00 m. to point 1; point of beginning;
containing an area of 2.0000 hectares. Bounded on the northeast,
southeast, and southwest by Public land; and on the northwest by
Road and public land. Bearings true. Declination 0 deg. 31E.,
points referred to are marked on plan H-105520. Surveyed under
authority of Section 12-22, Act No. 2874 and in accordance with
existing regulations of the Bureau of Lands, by H.O. Bauman Public
Land Surveyor, [in] Dec. 1912-Mar. 1913 and approved on January
6, 1932. Note: This is Lot No. 119-A Lot No. 225 of Bagabag
Townsite K-27. All corners are B.I. Conc. Mons. 15x60 cm. 10
Both TCTs describe their respective subjects as located in "Bagabag
Townsite, K-27," without any reference to either Barangay Lantap or
Barangay Murong.
On February 26, 1985, respondents Espejos bought back one of their lots
from RBBI. The Deed of Sale11 described the property sold as follows:
x x x do hereby SELL, TRANSFER, and CONVEY, absolutely and
unconditionally x x x that certain parcel of land, situated in the Municipality
of Bagabag, Province of Nueva Vizcaya, and more particularly bounded and
described as follows, to wit:
Beginning at a point marked "1" on plan x x x x Containing an area of
2.000 hectares. Bounded on the NE., by Road; on the SE., and SW by Public
Land; and on the NW., by Public Land, properties claimed by Hilario Gaudia
and Santos Navarrete. Bearing true. Declination 013 B. Points referred to
are marked on plan H-176292.
of which the Rural Bank of Bayombong (NV) Inc., is the registered owner in
fee simple in accordance with the Land Registration Act, its title thereto
being evidenced by Transfer Certificate of Title No. T-62096 issued by the
Registry of Deeds of Nueva Vizcaya.
As may be seen from the foregoing, the Deed of Sale did not mention the
barangay where the property was located but mentioned the title of the
property (TCT No. T-62096), which title corresponds to the Murong property.

There is no evidence, however, that respondents took possession of the
Murong property, or demanded lease rentals from the petitioners (who
continued to be the tenants of the Murong property), or otherwise
exercised acts of ownership over the Murong property. On the other hand,
respondent Nemi (husband of respondent Elenita and brother-in-law of the
other respondents), continued working on the other property -- the Lantap
property -- without any evidence that he ever paid rentals to RBBI or to any
landowner. The Deed of Sale was annotated on TCT No. T-62096 almost a
decade later, on July 1, 1994.12
Meanwhile, on June 20, 1990, RBBI, pursuant to Sections 2013 and 2114 of
Republic Act (RA) No. 6657,15 executed separate Deeds of Voluntary Land
Transfer (VLTs) in favor of petitioners Marquez and Dela Cruz, the tenants
of the Murong property. Both VLTs described the subject thereof as an
agricultural land located in Barangay Murong and covered by TCT No. T-
62836 (which, however, is the title corresponding to the Lantap property). 16
After the petitioners completed the payment of the purchase price of
P90,000.00 to RBBI, the DAR issued the corresponding Certificates of Land
Ownership Award (CLOAs) to petitioners Marquez 17 and Dela Cruz18 on
September 5, 1991. Both CLOAs stated that their subjects were parcels of
agricultural land situated in Barangay Murong.19 The CLOAs were registered
in the Registry of Deeds of Nueva Vizcaya on September 5, 1991.
On February 10, 1997 (more than 10 years after the Deed of Sale in favor
of the respondents and almost seven years after the execution of VLTs in
favor of the petitioners), respondents filed a Complaint20 before the
Regional Agrarian Reform Adjudicator (RARAD) of Bayombong, Nueva
Vizcaya for the cancellation of petitioners CLOAs, the deposit of leasehold
rentals by petitioners in favor of respondents, and the execution of a deed
of voluntary land transfer by RBBI in favor of respondent Nemi. The
complaint was based on respondents theory that the Murong property,
occupied by the petitioners, was owned by the respondents by virtue of the
1985 buy-back, as documented in the Deed of Sale. They based their claim
on the fact that their Deed of Sale refers to TCT No. 62096, which pertains
to the Murong property.
Petitioners filed their Answer21 and insisted that they bought the Murong
property as farmer-beneficiaries thereof. They maintained that they have
always displayed good faith, paid lease rentals to RBBI when it became the
owner of the Murong property, bought the same from RBBI upon the
honest belief that they were buying the Murong property, and occupied
49
and exercised acts of ownership over the Murong property. Petitioners also
argued that what respondents Espejos repurchased from RBBI in 1985 was
actually the Lantap property, as evidenced by their continued occupation
and possession of the Lantap property through respondent Nemi.
RBBI answered22 that it was the Lantap property which was the subject of
the buy-back transaction with respondents Espejos. It denied committing a
grave mistake in the transaction and maintained its good faith in the
disposition of its acquired assets in conformity with the rural banking rules
and regulations.
OIC-RARAD Decision23
The OIC-RARAD gave precedence to the TCT numbers appearing on the
Deed of Sale and the VLTs. Since TCT No. T-62096 appeared on
respondents Deed of Sale and the said title refers to the Murong property,
the OIC-RARAD concluded that the subject of sale was indeed the Murong
property. On the other hand, since the petitioners VLTs referred to TCT No.
T-62836, which corresponds to the Lantap property, the OIC-RARAD ruled
that petitioners CLOAs necessarily refer to the Lantap property. As for the
particular description contained in the VLTs that the subject thereof is the
Murong property, the OIC-RARAD ruled that it was a mere typographical
error.
Further, since the VLTs covered the Lantap property and petitioners are not
the actual tillers thereof, the OIC-RARAD declared that they were
disqualified to become tenants of the Lantap property and ordered the
cancellation of their CLOAs. It then ordered RBBI to execute a leasehold
contract with the real tenant of the Lantap property, Nemi.
The OIC-RARAD recognized that petitioners only right as the actual tillers
of the Murong property is to remain as the tenants thereof after the
execution of leasehold contracts with and payment of rentals in arrears to
respondents.
DARAB Decision24
Upon appeal filed by petitioners, the DARAB reversed the OIC-RARAD
Decision. It ruled that in assailing the validity of the CLOAs issued to
petitioners as bona fide tenant-farmers, the burden of proof rests on the
respondents. There being no evidence that the DAR field personnel were

remiss in the performance of their official duties when they issued the
corresponding CLOAs in favor of petitioners, the presumption of regular
performance of duty prevails. This conclusion is made more imperative by
the respondents admission that petitioners are the actual tillers of the
Murong property, hence qualified beneficiaries thereof.
As for respondents allegation that they bought back the Murong property
from RBBI, the DARAB ruled that they failed to support their allegation with
substantial evidence. It gave more credence to RBBIs claim that
respondents repurchased the Lantap property, not the Murong property.
Respondents, as owners of the Lantap property, were ordered to enter into
an agricultural leasehold contract with their brother-in-law Nemi, who is the
actual tenant of the Lantap property.
The DARAB ended its January 17, 2001 Decision in this wise:
We find no basis or justification to question the authenticity and validity of
the CLOAs issued to appellants as they are by operation of law qualified
beneficiaries over the landholdings; there is nothing to quiet as these titles
were awarded in conformity with the CARP program implementation; and
finally, the Board declares that all controverted claims to or against the
subject landholding must be completely and finally laid to rest.
WHEREFORE, premises considered and finding reversible errors[,] the
assailed decision is ANNULLED and a new judgment is hereby rendered,
declaring:
1. Appellants Salun-at Marquez and Nestor Dela Cruz as the bona
fide tenant-tillers over the Murong property and therefore they are
the qualified beneficiaries thereof;
2. Declaring Transfer Certificate of Title (TCT) Nos. 395 and 396
issued in the name of [farmer-beneficiaries] Salun-at Marquez and
Nestor Dela Cruz respectively, covered formerly by TCT No. 62096
(TCT No. 43258) of the Murong property as valid and legal;
3. Ordering the co-[respondents] to firm-up an agricultural
leasehold contract with bona fide tenant-tiller Nemi Fernandez over
the Lantap property, [the latter] being the subject matter of the
buy back arrangement entered into between [respondents] and
50
Rural Bank of Bayombong, Incorporated, and other incidental
matters are deemed resolved.
SO ORDERED.25
Ruling of the Court of Appeals
In appealing to the CA, the respondents insisted that the DARAB erred in
ruling that they repurchased the Lantap property, while the petitioners
were awarded the Murong property. They were adamant that the title
numbers indicated in their respective deeds of conveyance should control
in determining the subjects thereof. Since respondents Deed of Sale
expressed that its subject is the property with TCT No. T-62096, then what
was sold to them was the Murong property. On the other hand, petitioners
VLTs and CLOAs say that they cover the property with TCT No. T-62836;
thus it should be understood that they were awarded the Lantap property.
Respondents added that since petitioners are not the actual tillers of the
Lantap property, their CLOAs should be cancelled due to their lack of
qualification.
The CA agreed with the respondents. Using the Best Evidence Rule
embodied in Rule 130, Section 3, the CA held that the Deed of Sale is the
best evidence as to its contents, particularly the description of the land
which was the object of the sale. Since the Deed of Sale expressed that its
subject is the land covered by TCT No. T-62096 the Murong property
then that is the property that the respondents repurchased.
The CA further ruled that as for petitioners VLTs, the same refer to the
property with TCT No. T-62836; thus, the subject of their CLOAs is the
Lantap property. The additional description in the VLTs that the subject
thereof is located in Barangay Murong was considered to be a mere
typographical error. The CA ruled that the technical description contained
in the TCT is more accurate in identifying the subject property since the
same particularly describes the properties metes and bounds.
Both the RBBI26 and petitioners27 filed their respective motions for
reconsideration, which were separately denied.28
On June 22, 2004, RBBI filed a separate Petition for Review on Certiorari,
docketed as G.R. No. 163320, with this Court. 29 RBBI raised the issue that
the CA failed to appreciate that respondents did not come to court with

clean hands because they misled RBBI to believe at the time of the sale
that the two lots were not tenanted. RBBI also asked that they be declared
free from any liability to the parties as it did not enrich itself at anyones
expense. RBBIs petition was dismissed on July 26, 2004 for lack of merit.
The said Resolution reads:
Considering the allegations, issues[,] and arguments adduced in the
petition for review on certiorari, the Court Resolves to DENY the petition for
lack of sufficient showing that the Court of Appeals had committed any
reversible error in the questioned judgment to warrant the exercise by this
Court of its discretionary appellate jurisdiction in this case. 30
Their Motion for Reconsideration was likewise denied with finality. 31 Entry of
judgment was made in that case on December 15, 2004. 32
On July 27, 2005,33 petitioners filed the instant petition.
Issues
Rephrased and consolidated, the parties present the following issues for
the Courts determination:
I by the evidence on record."36
What is the effect of the final judgment dismissing RBBIs Petition for
Review on Certiorari, which assailed the same CA Decision
II
Whether the CA erred in utilizing the Best Evidence Rule to determine the
subject of the contracts
III
What are the subject properties of the parties respective contracts with
RBBI
Our Ruling
Propriety of the Petition
51
Respondents maintain that the instant petition for review raises factual
issues which are beyond the province of Rule 45.34
The issues involved herein are not entirely factual. Petitioners assail the
appellate courts rejection of their evidence (as to the contractual intent)
as inadmissible under the Best Evidence Rule. The question involving the
admissibility of evidence is a legal question that is within the Courts
authority to review.35
Besides, even if it were a factual question, the Court is not precluded to
review the same. The rule that a petition for review should raise only
questions of law admits of exceptions, among which are "(1) when the
findings are grounded entirely on speculations, 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 a misappreciation of facts; (5) when the findings of fact are
conflicting; (6) when, in making its findings, the same are contrary to the
admissions of both appellant and appellee; (7) when the findings are
contrary to those of 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 petitioner's main and reply
briefs are not disputed by the respondent; and (10) when the findings of
fact are premised on the supposed absence of evidence and contradicted
In the instant case, we find sufficient basis to apply the exceptions to the
general rule because the appellate court misappreciated the facts of the
case through its erroneous application of the Best Evidence Rule, as will be
discussed below. Moreover, the disparate rulings of the three reviewing
bodies below are sufficient for the Court to exercise its jurisdiction under
Rule 45.
First Issue
Dismissal of RBBIs appeal
Respondents maintain that the Courts earlier dismissal of RBBIs petition
for review of the same CA Decision is eloquent proof that there is no
reversible error in the appellate courts decision in favor of the
respondents.37

We are not persuaded. This Court dismissed RBBIs earlier petition in G.R.
No. 163320 because it failed to convincingly demonstrate the alleged
errors in the CA Decision. The bank did not point out the inadequacies and
errors in the appellate courts decision but simply placed the responsibility
for the confusion on the respondents for allegedly misleading the bank as
to the identity of the properties and for misrepresenting that the two lots
were not tenanted. Thus, RBBI argued that respondents did not come to
court with clean hands.
These arguments were ineffectual in convincing the Court to review the
appellate courts Decision. It is the appellants responsibility to point out
the perceived errors in the appealed decision. When a party merely raises
equitable considerations such as the "clean hands" doctrine without a
clear-cut legal basis and cogent arguments to support his claim, there
should be no surprise if the Court is not swayed to exercise its appellate
jurisdiction and the appeal is dismissed outright. The dismissal of an
appeal does not always and necessarily mean that the appealed decision is
correct, for it could simply be the result of the appellants inadequate
discussion, ineffectual arguments, or even procedural lapses.
RBBIs failure to convince the Court of the merits of its appeal should not
prejudice petitioners who were not parties to RBBIs appeal, especially
because petitioners duly filed a separate appeal and were able to
articulately and effectively present their arguments. A party cannot be
deprived of his right to appeal an adverse decision just because another
party had already appealed ahead of him,38 or just because the other
partys separate appeal had already been dismissed. 39
There is another reason not to bind the petitioners to the final judgment
against RBBI. RBBI executed the transfer (VLTs) in favor of petitioners prior
to the commencement of the action. Thus, when the action for cancellation
of CLOA was filed, RBBI had already divested itself of its title to the two
properties involved. Under the rule on res judicata, a judgment (in
personam) is conclusive only between the parties and their successors-in-
interest by title subsequent to the commencement of the action. 40 Thus,
when the vendor (in this case RBBI) has already transferred his title to third
persons (petitioners), the said transferees are not bound by any judgment
which may be rendered against the vendor. 41
52
Second Issue
Is it correct to apply the Best Evidence Rule?
Citing the Best Evidence Rule in Rule 130, Section 3, the CA held that the
Deed of Sale between respondents and RBBI is the best evidence as to the
property that was sold by RBBI to the respondents. Since the Deed of Sale
stated that its subject is the land covered by TCT No. T-62096 the title for
the Murong property then the property repurchased by the respondents
was the Murong property. Likewise, the CA held that since the VLTs
between petitioners and RBBI refer to TCT No. T-62836 the title for the
Lantap property then the property transferred to petitioners was the
Lantap property.
Petitioners argue that the appellate court erred in using the best evidence
rule to determine the subject of the Deed of Sale and the Deeds of
Voluntary Land Transfer. They maintain that the issue in the case is not the
contents of the contracts but the intention of the parties that was not
adequately expressed in their contracts. Petitioners then argue that it is
the Parol Evidence Rule that should be applied in order to adequately
resolve the dispute.
Indeed, the appellate court erred in its application of the Best Evidence
Rule. The Best Evidence Rule states that when the subject of inquiry is the
contents of a document, the best evidence is the original document itself
and no other evidence (such as a reproduction, photocopy or oral
evidence) is admissible as a general rule. The original is preferred because
it reduces the chance of undetected tampering with the document. 42
In the instant case, there is no room for the application of the Best
Evidence Rule because there is no dispute regarding the contents of the
documents. It is admitted by the parties that the respondents Deed of Sale
referred to TCT No. T-62096 as its subject; while the petitioners Deeds of
Voluntary Land Transfer referred to TCT No. T-62836 as its subject, which is
further described as located in Barangay Murong.
The real issue is whether the admitted contents of these documents
adequately and correctly express the true intention of the parties. As to the
Deed of Sale, petitioners (and RBBI) maintain that while it refers to TCT No.
T-62096, the parties actually intended the sale of the Lantap property
(covered by TCT No. T-62836).

As to the VLTs, respondents contend that the reference to TCT No. T-62836
(corresponding to the Lantap property) reflects the true intention of RBBI
and the petitioners, and the reference to "Barangay Murong" was a
typographical error. On the other hand, petitioners claim that the reference
to "Barangay Murong" reflects their true intention, while the reference to
TCT No. T-62836 was a mere error. This dispute reflects an intrinsic
ambiguity in the contracts, arising from an apparent failure of the
instruments to adequately express the true intention of the parties. To
resolve the ambiguity, resort must be had to evidence outside of the
instruments.
The CA, however, refused to look beyond the literal wording of the
documents and rejected any other evidence that could shed light on the
actual intention of the contracting parties. Though the CA cited the Best
Evidence Rule, it appears that what it actually applied was the Parol
Evidence Rule instead, which provides:
When the terms of an agreement have been reduced to writing, it is
considered as containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no evidence of such
terms other than the contents of the written agreement.43
The Parol Evidence Rule excludes parol or extrinsic evidence by which a
party seeks to contradict, vary, add to or subtract from the terms of a valid
agreement or instrument. Thus, it appears that what the CA actually
applied in its assailed Decision when it refused to look beyond the words of
the contracts was the Parol Evidence Rule, not the Best Evidence Rule. The
appellate court gave primacy to the literal terms of the two contracts and
refused to admit any other evidence that would contradict such terms.
However, even the application of the Parol Evidence Rule is improper in the
case at bar. In the first place, respondents are not parties to the VLTs
executed between RBBI and petitioners; they are strangers to the written
contracts. Rule 130, Section 9 specifically provides that parol evidence rule
is exclusive only as "between the parties and their successors-in-interest."
The parol evidence rule may not be invoked where at least one of the
parties to the suit is not a party or a privy of a party to the written
document in question, and does not base his claim on the instrument or
assert a right originating in the instrument.44
Moreover, the instant case falls under the exceptions to the Parol Evidence
Rule, as provided in the second paragraph of Rule 130, Section 9:
53
However, a party may present evidence to modify, explain or add to the
terms of the written agreement if he puts in issue in his pleading:
(1) An intrinsic ambiguity, mistake or imperfection in the written
agreement;
(2) The failure of the written agreement to express the true intent
and agreement of the parties thereto;
x x x x (Emphasis supplied)
Here, the petitioners VLTs suffer from intrinsic ambiguity. The VLTs
described the subject property as covered by TCT No. T-62836 (Lantap
property), but they also describe the subject property as being located in
"Barangay Murong." Even the respondents Deed of Sale falls under the
exception to the Parol Evidence Rule. It refers to "TCT No. T-62096"
(Murong property), but RBBI contended that the true intent was to sell the
Lantap property. In short, it was squarely put in issue that the written
agreement failed to express the true intent of the parties.
Based on the foregoing, the resolution of the instant case necessitates an
examination of the parties respective parol evidence, in order to
determine the true intent of the parties. Well-settled is the rule that in case
of doubt, it is the intention of the contracting parties that prevails, for the
intention is the soul of a contract,45 not its wording which is prone to
mistakes, inadequacies, or ambiguities. To hold otherwise would give life,
validity, and precedence to mere typographical errors and defeat the very
purpose of agreements.
In this regard, guidance is provided by the following articles of the Civil
Code involving the interpretation of contracts:
Article 1370. 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.
If the words appear to be contrary to the evident intention of the parties,
the latter shall prevail over the former.
Article 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.

Rule 130, Section 13 which provides for the rules on the interpretation of
documents is likewise enlightening:
Section 13. Interpretation according to circumstances. For the proper
construction of an instrument, the circumstances under which it was made,
including the situation of the subject thereof and of the parties to it, may
be shown, so that the judge may be placed in the position of those whose
language he is to interpret.1wphi1
Applying the foregoing guiding rules, it is clear that the Deed of Sale was
intended to transfer the Lantap property to the respondents, while the VLTs
were intended to convey the Murong property to the petitioners. This may
be seen from the contemporaneous and subsequent acts of the parties.
Third issue
Determining the intention of the parties
regarding the subjects of their contracts
We are convinced that the subject of the Deed of Sale between RBBI and
the respondents was the Lantap property, and not the Murong property.
After the execution in 1985 of the Deed of Sale, the respondents did not
exercise acts of ownership that could show that they indeed knew and
believed that they repurchased the Murong property. They did not take
possession of the Murong property. As admitted by the parties, the Murong
property was in the possession of the petitioners, who occupied and tilled
the same without any objection from the respondents. Moreover,
petitioners paid leasehold rentals for using the Murong property to RBBI,
not to the respondents.
54
Aside from respondents neglect of their alleged ownership rights over the
Murong property, there is one other circumstance that convinces us that
what respondents really repurchased was the Lantap property. Respondent
Nemi (husband of respondent Elenita) is the farmer actually tilling the
Lantap property, without turning over the supposed landowners share to
RBBI. This strongly indicates that the respondents considered themselves
(and not RBBI) as the owners of the Lantap property. For if respondents
(particularly spouses Elenita and Nemi) truly believed that RBBI retained
ownership of the Lantap property, how come they never complied with
their obligations as supposed tenants of RBBIs land? The factual
circumstances of the case simply do not support the theory propounded by
the respondents.
We are likewise convinced that the subject of the Deeds of Voluntary Land
Transfer (VLTs) in favor of petitioners was the Murong property, and not the
Lantap property. When the VLTs were executed in 1990, petitioners were
already the tenant-farmers of the Murong property, and had been paying
rentals to RBBI accordingly. It is therefore natural that the Murong property
and no other was the one that they had intended to acquire from RBBI with
the execution of the VLTs. Moreover, after the execution of the VLTs,
petitioners remained in possession of the Murong property, enjoying and
tilling it without any opposition from anybody. Subsequently, after the
petitioners completed their payment of the total purchase price of
P90,000.00 to RBBI, the Department of Agrarian Reform (DAR) officials
conducted their investigation of the Murong property which, with the
presumption of regularity in the performance of official duty, did not reveal
any anomaly. Petitioners were found to be in actual possession of the
Murong property and were the qualified beneficiaries thereof. Thus, the
DAR officials issued CLOAs in petitioners favor; and these CLOAs explicitly
refer to the land in Barangay Murong. All this time, petitioners were in
possession of the Murong property, undisturbed by anyone for several long
years, until respondents started the controversy in 1997.
All of these contemporaneous and subsequent actions of RBBI and
petitioners support their position that the subject of their contract (VLTs) is
the Murong property, not the Lantap property. Conversely, there has been
no contrary evidence of the parties actuations to indicate that they
intended the sale of the Lantap property. Thus, it appears that the
reference in their VLT to TCT No. T-62836 (Lantap property) was due to
their honest but mistaken belief that the said title covers the Murong
property. Such a mistake is not farfetched considering that TCT No. T-62836
only refers to the Municipality of Bayombong, Nueva Vizcaya, and does not
 55

indicate the particular barangay where the property is located. Moreover, SO ORDERED
both properties are bounded by a road and public land. Hence, were it not
for the detailed technical description, the titles for the two properties are
very similar.

The respondents attempt to discredit petitioners argument that their VLTs

were intrinsically ambiguous and failed to express their true intention by
asking why petitioners never filed an action for the reformation of their
contract.46 A cause of action for the reformation of a contract only arises
when one of the contracting parties manifests an intention, by overt acts,
not to abide by the true agreement of the parties.47 It seems fairly obvious
that petitioners had no cause to reform their VLTs because the parties
thereto (RBBI and petitioners) never had any dispute as to the
interpretation and application thereof. They both understood the VLTs to
cover the Murong property (and not the Lantap property). It was only much
later, when strangers to the contracts argued for a different interpretation,
that the issue became relevant for the first time.

All told, we rule that the Deed of Sale dated February 26, 1985 between
respondents and RBBI covers the Lantap property under TCT No. T-62836,
while the Deeds of Voluntary Land Transfer and TCT Nos. CLOA-395 and
CLOA-396 of the petitioners cover the Murong property under TCT No. T-
62096. In consequence, the CAs ruling against RBBI should not be
executed as such execution would be inconsistent with our ruling herein.
Although the CAs decision had already become final and executory as
against RBBI with the dismissal of RBBIs petition in G.R. No. 163320, our
ruling herein in favor of petitioners is a supervening cause which renders
the execution of the CA decision against RBBI unjust and inequitable.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The

assailed October 7, 2003 Decision, as well as the May 11, 2005 Resolution
of the Court of Appeals in CA-G.R. SP No. 69981 are REVERSED and SET
ASIDE. The January 17, 2001 Decision of the DARAB Central Office is
REINSTATED. The Deed of Sale dated February 26, 1985 between
respondents and Rural Bank of Bayombong, Inc. covers the Lantap
property under TCT No. T-62836, while the Deeds of Voluntary Land
Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the
Murong property under TCT No. T-62096. The Register of Deeds of Nueva
Vizcaya is directed to make the necessary corrections to the titles of the
said properties in accordance with this Decision. Costs against
respondents.

THIRD DIVISION
G.R. No. 172820 June 23, 2010
DULCE PAMINTUAN, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
BRION, J.:
We review in this Rule 45 petition the decision1 and the resolution2 of the
Court of Appeals (CA) that totally affirmed the decision3 of the Regional
Trial Court (RTC), Branch 2, Batangas City in Criminal Case No. 11002.
The RTC found Dulce Pamintuan (petitioner) guilty beyond reasonable
doubt of the crime of estafa, penalized under Article 315, paragraph 1(b) of
the Revised Penal Code, as amended, and sentenced her to imprisonment
of four (4) years and two (2) months of prision correccional, as minimum,
to twenty (20) years of reclusion temporal, as maximum.
The Information charging the petitioner with estafa, as defined and
penalized under Article 315, paragraph 1(b) of the Revised Penal Code, as
amended, reads:
That on or about February 16, 1996 at Batangas City, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused,
after having received in trust and on commission from one Jeremias
Victoria a diamond ring worth SEVEN HUNDRED SIXTY FIVE THOUSAND
(P765,000.00) PESOS, Philippine Currency, with the understanding and
agreement that the same shall be sold by her on cash basis at a price not
less than its value and that the overprice, if any, shall be her commission
and the proceeds of the sale shall be remitted to Jeremias Victoria
immediately upon sale thereof, and if unsold, said diamond ring will be
returned to Jeremias Victoria within a period of three (3) days from the date
of receipt, but said accused, far from complying with her obligation to
return the unsold diamond ring, with grave abuse of confidence, with intent
to defraud, did then and there willfully, unlawfully and feloniously convert
and misappropriate the same to her own personal use and benefit and
despite demands made upon her to return the said jewelry, she failed and
56
refused to do so, to the damage and prejudice of Jeremias Victoria in the
aforementioned amount of P765,000.00, Philippine Currency.
CONTRARY TO LAW.4
The petitioner pleaded not guilty to the charge; trial on the merits followed.
The Prosecution Evidence
The prosecution presented two witnesses Jeremias Victoria and Aurora C.
Realon to establish its case. Jeremias testified that on February 16, 1996,
the petitioner received from him a diamond ring worth P765,000.00 on the
condition that it would be sold on commission basis. At the time she
received the ring, the petitioner signed a document entitled Katibayan, 5
authorizing the sale of the ring under the following express conditions: the
petitioner was to sell the ring for cash and with an overprice as her profit,
and remit the full payment to Jeremias; she would not entrust the ring to
anybody; and if unsold within three days, she must return the ring, or pay
for it in cash.6
The petitioner failed to remit payment for the diamond ring despite the
lapse of the agreed period. Neither did she return the diamond ring.
Subsequently, Jeremias, through his lawyer, sent two (2) formal demand
letters7 for the petitioner to comply with her obligations under the
Katibayan. The demand letters went unheeded. Thus, the petitioner failed
to comply with her obligations to Jeremias.8
As rebuttal evidence, Jeremias claimed that the petitioner failed to return
the diamond ring because she pawned it. Jeremias also denied that he
received any jewelry from the petitioner in exchange for the diamond ring. 9
The Defense Evidence
The petitioner testified in her behalf and admitted that she received the
diamond ring from Jeremias in exchange for seven (7) pieces of jewelry
valued at P350,000.00 that she also then delivered to Jeremias for cleaning
and eventual sale. The petitioner likewise stated that the delivery of the
seven pieces of jewelry was evidenced by a receipt that Jeremias signed, 10
and that she subsequently tried to return the diamond ring but he refused
to accept it. Although the petitioner acknowledged signing the Katibayan,
she claimed that Jeremias entrusted the diamond ring to her before he left

for abroad, and that she only heard from him again after the criminal case
had been filed against her. The petitioner likewise claimed that she tried to
return the diamond ring during the preliminary investigation of the case,
but Jeremias refused to accept it.
As sur-rebuttal evidence, the petitioner presented a Deed of Real Estate
Mortgage dated August 25, 2003 (mortgage deed),11 executed by Danilo
Pamintuan, the petitioners husband. According to the terms of the
mortgage deed, Danilo admitted that Jeremias had entrusted the diamond
ring to him on February 16, 1996, not to the petitioner, and that the
mortgage deed was constituted in consideration of Danilos promise to
return the diamond ring to Jeremias.
The RTCs Ruling
The RTC found the petitioner guilty beyond reasonable doubt of estafa. 12 It
also found that the defense failed to refute the prosecution evidence
establishing all the elements of the crime charged. The RTC ruled, too, that
the mortgage deed only served as proof of the restitution of or reparation
for the value of the diamond ring and thus addressed only the petitioners
civil liability, not her criminal liability. The dispositive portion of the RTC
decision reads:
WHEREFORE, finding the accused DULCE PAMINTUAN guilty beyond
reasonable doubt for the crime of estafa, defined and penalized under
Article 315, par. 1 (b) of the Revised Penal Code, without modifying
circumstances, she is hereby sentenced to suffer the indeterminate penalty
of four (4) years and two (2) months of prision correccional as minimum to
twenty (20) years of reclusion temporal as maximum.
Considering that there is already a settlement as to the payment of the
civil liability, as embodied in the Real Estate Mortgage executed by the
parties, this Court hereby refrains to pronounce the corresponding civil
indemnity.
SO ORDERED.
57
The petitioner appealed to the CA.
The CA Ruling
The CA agreed with the RTC that the petitioner was guilty beyond
reasonable doubt of estafa and thus dismissed the petitioners appeal. 13
The CA ruled that the prosecution evidence showed that Jeremias
entrusted possession of the diamond ring to the petitioner, not to her
husband. The CA observed that the prosecution duly proved the
petitioners misappropriation by showing that she failed to return the
diamond ring upon demand. That misappropriation took place was
strengthened when the petitioner failed to refute Jeremias allegation that
she pawned the diamond ring an act that ran counter to the terms of her
agency under the Katibayan.
The petitioner moved to reconsider the CA decision, arguing that the CA
disregarded the legal significance of the mortgage deed, and filed the
present petition after the CA denied her motion.
The Issues
The petitioner raises the following issues:
1. whether the CA correctly disregarded the effect of the mortgage deed on
her criminal liability; and
2. whether the elements of the crime of estafa under Article 315,
paragraph 1(b) of the Revised Penal Code, as amended, were duly proven
beyond reasonable doubt.
The petitioner asserts that the terms of the mortgage deed negated the
element of misappropriation, and the RTC and the CA did not at all consider
these when they convicted her. At the same time, she disputes the terms
of the Katibayan, as its stipulations, written in fine print, did not truly
disclose the real nature of the transaction between her and Jeremias. She
also claims that she became the owner of the diamond ring after it was
turned over to her. The petitioner further insists that she signed the
Katibayan without taking heed of its terms because she trusted Jeremias.
The Courts Ruling

We find the petition unmeritorious.
The issues raised by the petitioner are essentially encapsulated by the
second issue outlined above i.e., whether the crime of estafa has been
sufficiently established; the first issue relating to the mortgage deed is a
matter of defense that should be considered in resolving the second issue.
Article 315, paragraph 1(b) of the Revised Penal Code, as amended, under
which the petitioner was charged and prosecuted, states:
Art. 315. Swindling (estafa). - Any person who shall defraud another by any
of the means mentioned hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision
mayor in its minimum period, if the amount of the fraud is over 12,000
pesos but does not exceed 22,000 pesos; and if such amount exceeds the
latter sum, the penalty provided in this paragraph shall be imposed in its
maximum period, adding one year for each additional 10,000 pesos; but
the total penalty which may be imposed shall not exceed twenty years. In
such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the
penalty shall be termed prision mayor or reclusion temporal, as the case
may be[.]
1. With unfaithfulness or abuse of confidence, namely:
(b) By misappropriating or converting, to the prejudice of another, money,
goods or any other personal property received by the offender in trust, or
on commission, or for administration, or under any other obligation
involving the duty to make delivery of, or to return the same, even though
such obligation be totally or partially guaranteed by a bond; or by denying
having received such money, goods, or other property[.]
The elements of estafa under this provision are: (1) the offenders receipt
of money, goods, or other personal property in trust, or on commission, or
for administration, or under any other obligation involving the duty to
deliver, or to return, the same; (2) misappropriation or conversion by the
offender of the money or property received, or denial of receipt of the
money or property; (3) the misappropriation, conversion or denial is to the
prejudice of another; and (4) demand by the offended party that the
offender return the money or property received.14
58
The essence of this kind of estafa is the appropriation or conversion of
money or property received to the prejudice of the entity to whom a return
should be made.15 The words "convert" and "misappropriate" connote the
act of using or disposing of anothers property as if it were ones own, or of
devoting it to a purpose or use different from that agreed upon. 16 To
misappropriate for ones own use includes not only conversion to ones
personal advantage, but also every attempt to dispose of the property of
another without right.17 In proving the element of conversion or
misappropriation, a legal presumption of misappropriation arises when the
accused fails to deliver the proceeds of the sale or to return the items to be
sold and fails to give an account of their whereabouts. 18
In this case, the petitioner asserts that the prosecution failed to sufficiently
prove the first and second elements of the crime. The petitioner also
asserts that these elements were negated by her testimony and by the
mortgage deed that showed she received the diamond ring as owner, and
not as an agent. The petitioner argues that she could not have
misappropriated or converted the diamond ring precisely because she was
its owner.
The First Element: Receipt of Goods in Trust
The prosecution proved the first element of the crime through the
testimony of Jeremias who related that he gave the petitioner the diamond
ring for sale on commission basis. The unequivocal terms of the Katibayan
corroborated Jeremias testimony and showed the fiduciary relationship
between the two parties as principal and agent, where the petitioner was
entrusted with the diamond ring under the specific authority to sell it
within three days from its receipt and to return it if it remains unsold within
that period.
Significantly, the petitioner admitted the fiduciary relationship between
herself and Jeremias an aspect of the case that the RTC and the CA duly
noted through the finding that the petitioner admitted receiving the
diamond ring from Jeremias to be sold on commission basis. 19
Against the prosecutions case, the defense submitted its own evidence
and varying theories that unfortunately suffered from serious
contradictions.

First, at the earliest stages of the trial proper, the petitioner categorically
admitted on the witness stand that she received the diamond ring in order
to sell it on commission basis. Immediately after, she testified that she
gave several pieces of jewelry (evidenced by a receipt) to Jeremias in
exchange for the diamond ring. As the RTC noted, however, the written
receipt of the pieces of jewelry did not support the theory that they had
been given by way of exchange for the diamond ring. The RTC observed:
[T]here is nothing in the document to show that it was received, nor it was
given to the private complainant in exchange of the latters ring. There is
not even, in the said list, any valuation or costing of each [jewelry] x x x
What is contained in the list are the words "for cleaning" which purports no
other meaning that would favor the cause of the accused. 20
Second, the defense next attacked the identity of the recipient of the
diamond ring. As sur-rebuttal, the petitioner presented the mortgage deed
to show that the diamond ring was entrusted to her husband, Danilo, and
not to her. This mortgage deed, however, was executed only on August 25,
2003, or long after the ring was delivered on February 16, 1996, together
with the Katibayan that the petitioner duly signed. It likewise contradicted
the petitioners earlier admission that she took delivery of the diamond
ring. Not surprisingly, the lower courts did not give the submitted deed any
evidentiary value.
Lastly, the defense propounded the theory that the petitioner and her
husband jointly owned the diamond ring, citing the mortgage deed as
proof and basis of this claim. Both the RTC and the CA recognized the
theory as unmeritorious given the clear terms of the mortgage deed. These
terms did not speak of the petitioner or Danilos ownership of the ring,
merely of Danilos intended return of the ring. The mortgage deed reads:
[T]he MORTGAGOR [DANILO PAMINTUAN], for and in consideration of my
promise to return within thirty (30) days from today to JERRY VICTORIA,
Filipino citizen, of legal age, married and a resident of San Isidro Village,
Batangas City, hereinafter referred to as the MORTGAGEE, the jewelry
subject matter of Criminal Case No. 11002, in the same order and
condition when it was entrusted to me by the MORTGAGEE on February 16,
1996, hereby convey by way of first mortgage unto the said MORTGAGEE x
x x [.]21
The Second Element: The Misappropriation
59
The second element the misappropriation of the diamond ring was
proven by Jeremias testimony that the petitioner failed to return the
diamond ring after the lapse of the agreed period or afterwards, despite
the clear terms of the Katibayan. He further testified that the petitioner
could not return the ring because she had pawned it. She strangely did not
respond to this allegation. This silence, coupled with her undeniable failure
to return the diamond ring, immeasurably strengthened the element of
misappropriation. Her silence assumes great significance since the
pawning of the diamond ring was a clear violation of the Katibayan which
only gave her the authority to sell on commission or to return the ring.
Acting beyond the mandate of this agency is the conversion or
misappropriation that the crime of estafa punishes.
Third and Fourth Elements: Prejudice and Demand
The prosecution proved the third and fourth elements through evidence of
demands and the continued failure to return the ring or its value for seven
years (1996 to 2003) despite demand. Based on the records, the return of
the value of the ring came only in 2003 after the execution of the
mortgage deed that, strangely, while marked as Exh. "4," was never
offered in evidence and is thus technically not an evidence we can
appreciate.22 The demand letters, on the other hand, were never disputed
and thus clearly showed the failure to return the ring or its value. In fact,
even if the mortgage deed were to be given evidentiary value, it can only
stand as evidence of the return of the value of the ring in 2003, not of
anything else.
The basis of the estafa charge is the failure to return the ring or to pay for
its value in cash within the period stipulated in the Katibayan. We do not
find it disputed that the ring was never returned despite demands. The
value of the ring was not also made available to Jeremias until seven years
after its delivery to the petitioner. When she failed at the first instance (and
in fact she continuously failed), despite demands, to return at least the
value of the ring, the crime of estafa was consummated. The return after
seven years of its value only addressed the civil liability that the
consummated crime of estafa carried with it, as the RTC and the CA
correctly stated in their decisions.1avvphi1
If only to address the petitioners issue regarding the legal significance of
the un-offered mortgage deed, we observe that it could not have raised
any reasonable doubt about the nature of the transaction between the
parties. Under the circumstances, the best evidence to ascertain the

nature of the parties diamond ring transaction is the Katibayan which is
the written evidence of their agreement that should be deemed to contain
all the terms they agreed upon.23 Under the parol evidence rule, no
additional or contradictory terms to this written agreement can be
admitted to show that, at or before the signing of the document, other or
different terms were orally agreed upon by the parties.24 Thus, the terms of
the Katibayan should be the prevailing terms of the transaction between
the parties, not any oral or side agreement the petitioner alleged. We
consider, too, in this regard that the post-Katibayan acts of the parties
strengthened, rather than negated, the Katibayan terms, particularly the
petitioners obligation to return the diamond ring; otherwise, she would not
have attempted to return the value of the ring when the criminal complaint
was filed against her, nor secured the execution of the mortgage deed, had
no such obligation existed.
Viewed in their totality, we hold that the prosecution presented proof
beyond reasonable doubt of the petitioners guilt, and both the RTC and the
CA did not err in their conclusions. The prosecution evidence was clear and
categorical, and systematically established every element of the crime; the
defense evidence, on the other hand, glaringly suffered from
contradictions, changes of theories, and deficiencies that placed its merit
in great doubt.
The Penalty
The decisive factor in determining the criminal and civil liability for the
crime of estafa depends on the value of the thing or the amount
defrauded. In this case, the established evidence showed that the value of
the diamond ring is P765,000.00. The first paragraph of Article 315
provides the appropriate penalty if the value of the thing or the amount
defrauded exceeds P22,000.00, as follows:
1st. The penalty of prision correccional in its maximum period to prision
mayor in its minimum period, if the amount of the fraud is over 12,000
pesos but does not exceed 22,000 pesos; and if such amount exceeds the
latter sum, the penalty provided in this paragraph shall be imposed in its
maximum period, adding one year for each additional 10,000 pesos; but
the total penalty which may be imposed shall not exceed twenty years.
With the given penalty range pegged at the maximum of prision mayor in
its minimum period and an additional one year for every P10,000.00 in
excess of P22,000.00, the maximum imposable penalty shall exceed
60
twenty years when computed, twenty years of imprisonment should be
imposed as maximum.
The minimum of the imposable penalty depends on the application of the
Indeterminate Sentence Law pursuant to which the maximum term is "that
which, in view of the attending circumstances, could be properly imposed"
under the Revised Penal Code, and the minimum shall be "within the range
of the penalty next lower to that prescribed" for the offense. The penalty
next lower should be based on the penalty prescribed by the Code for the
offense, without first considering any modifying circumstance attendant to
the commission of the crime. The determination of the minimum penalty is
left by law to the sound discretion of the court and it can be anywhere
within the range of the penalty next lower without any reference to the
periods into which it might be subdivided. The modifying circumstances are
considered only in the imposition of the maximum term of the
indeterminate sentence.
Since the penalty prescribed by law for the crime of estafa is prision
correccional maximum to prision mayor minimum, the penalty next lower
would then be prision correccional minimum to medium. Thus, the
minimum term of the indeterminate sentence should be anywhere within
six (6) months and one (1) day to four (4) years and two (2) months, while
the maximum term of the indeterminate sentence should at least be six (6)
years and one (1) day because the amounts involved exceeded
P22,000.00, plus an additional one (1) year for each additional
P10,000.00.25
Under these norms, the penalty of four (4) years and two (2) months of
prision correccional, as minimum term, to twenty (20) years of reclusion
temporal, as maximum term, is correct. The RTC and the CA were correct in
not awarding civil liability since the execution of the mortgage deed
satisfied the value of the unreturned diamond ring.
WHEREFORE, we hereby DENY the petition for lack of merit, and
consequently AFFIRM the decision dated January 12, 2006 and the
resolution dated May 19, 2006 of the Court of Appeals in CA-G.R. CR No.
28785, finding petitioner Dulce Pamintuan guilty beyond reasonable doubt
of the crime of estafa, defined and penalized under Article 315, paragraph
1(b) of the Revised Penal Code, as amended. No costs. SO ORDERED.

EN BANC
G.R. No. L-11310 January 31, 1918
CARLOS PALANCA, plaintiff-appellant,
vs.
FRED WILSON & CO., defendant-appellee.
Alfredo Chicote and Jose Arnaiz for appellant.
Gilbert, Cohn and Fisher for appellee.
MALCOLM, J.:
As the culmination of negotiations, on June 11, 1913, Song Fo and Co., of
Manila, through its manager Carlos Palanca, entered into a contract with
Fred Wilson and Co. for the purchase of a distilling apparatus for P10,000.
Wilson and Co. ordered the apparatus of Turner, Schon and Co., London,
installing it in January, 1914. On May 18, 1914, or about five months after
the machine was installed, Palanca wrote Wilson and Co. that the rectifying
machine had been examined by a number of competent persons who
stated that the machine was not capable of producing the amount of
alcohol stipulated in the contract. Getting no satisfaction from the reply of
Wilson and Co., action for damages for breach of contract was begun in the
Court of First Instance of the city of Manila, praying first that the defendant
be ordered to comply strictly with the terms of the contract and second
that the defendant be ordered to pay as damages the amount of
P16,713.80.
Defendant answered with a general denial and a cross-complaint asking
judgment against the plaintiff in the sum of P5,000, the final installment
claimed to be due as the purchase price of the machine. By the judgment
handed down by the Honorable James A. Ostrand, judge of first instance, it
was ordered that the plaintiff take nothing by his action, and that the
defendant have and recovered judgment against the plaintiff for the sum of
P5,000, with interest thereon at the rate of 12 per cent per annum from the
first day of September, 1914, without special findings as to costs.
It is around the first clause of the contract (Exhibit D) that all the argument
centers. This clause reads: "Un aparato; 'Guillaume' para la destilacion-
rectificacion directa y continua; tipo 'C,' Agricola, de una capacidad de
6,000 litros cada 24 horas de trabajo, de un grado de 96-97 Gay Lussac,
todo segun el grabado de la pagina 30 del catalogo Egrot, edicion de
61
1907." We believe in the first place, that it is undeniable from the
evidence, that the apparatus in question, while it could treat 6,000 liters of
raw material a day, did not produce 6,000 liters a day, but on the contrary
only something over 480 liters a day of rectified alcohol of the required
grade. This being true, appellant vigorously asserts that there has been a
breach of the contract in that instead of the machine having a capacity of
6,000 liters for every 24 hours of work, it only had (a producing) capacity
of 480 liters for this period of time. Appellant would require that all the
terms of the contract be given effect with special emphasis upon the
phrase "de un grado de 96-97 Gay Lussac." This last phrase in connection
with the previous one "de una capacidad de 6,000 litros cada 24 horas de
trabajo" according to appellant could not possibly mean that the machine
was only to take in 6,000 liters for this would be improbable in view of the
express mention of the grade of the product. Appellee on the other hand
relies on the ordinary meaning of the word "capacity" as indicating
receptivity and on the preliminary negotiations as explaining the intention
of the parties. The evidence is of little assistance in resolving the question.
Thus, Carlos Palanca, the manager of Song Fo and Co., and now the
successor of the company, testified that he told the agents of Wilson and
Co. that he need a machine that would produce at least 6,000 liters of
alcohol a day. The agent of Wilson and Co., James F. Loader, squarely
contradicted this on the stand and said that Palanca asked him to get on
an apparatus to treat 6,000 liters.
Beginning anew, in order to reach a proper conclusion as to the meaning of
clause one of the contract, we approach the subject from two directions.
Under the first view, we take up the meaning of the words themselves.
Under the second, believing that it is necessary to explain intrinsic
ambiguity in the contract, we can go, as we are permitted to do under
chapter IV title II, book IV of the Civil Code, and chapter X of the Code of
Civil Procedure, especially section 285, to evidence of the circumstances
under which the agreement was made.
The terms of the contract disclose the following essential constituents: (1)
A machine Guillaume, type "C" (Agricola) as described on page 30 of the
Catalogue Egrot, edition of 1907; (2) a machine of a capacity of 6,000 liters
for every 24 hours of work, and (3) a machine producing alcohol of a grade
96-97 Gay Lussac. Type C (Agricola) as described on pages 30 and 31 of
the catalogue mentions the grade of alcohol guaranteed of 96-97 Gay
Lussac, but contains no mention of a capacity of 6,000 liters a day. Passing
the second element for the moment, there is no dispute in the record, or
more properly speaking the plaintiff did not prove, that the machine did
 62

not turn out alcohol of the grade 96-97 Gay Lussac. Predicated therefore on furnish Song Fo and CO. a distilling apparatus, type C (Agricola), as
the description to be found in the catalogue, it is plain that the defendant described on page 30 of the maker's catalogue, capable of receiving or
sold to the plaintiff the machine there mentioned. This leaves for treating 6,000 liters every 24 hours of work and of producing alcohol of a
interpretation the one word "capacity." grade 96-97 Gay Lussac.

That in connection with the distilling of liquor, the word "capacity" may We conclude that the judgment of the trial court should be affirmed
have different meanings unless restricted in terminology, is disclosed by without special finding as to costs. So ordered.
the decision of the United States Supreme Court in Chicago Distilling Co.
vs. Stone ([1891] 140 U. S., 647), where the qualifying phrases "working
capacity" and "producing capacity" are specifically" mentioned. The
ordinary meaning of the word is defined in the English Dictionaries as
"ability to receive or contain; cubic extent; carrying power or space; said of
that within which any solid or fluid may be placed, and also used
figuratively; as the keg has a capacity of 10 gallons; the ship's capacity is
1,000 tons." The ordinary meaning of the Spanish equivalent "capacidad"
as disclosed by the Spanish Dictionaries is "ambito que tiene alguna cosa y
es suficiente para contener en si otra; como el de una vasijia, arca, etc. En
el vaso se debe atender la disposicion y capacidad." Both definitions
denote that which anything can receive or contain.

We think, however, that it can be laid down as a premise for further

discussion that there is intrinsic ambiguity in the contract which needs
explanation. Section 285 of the Code of Civil Procedure providing that a
written agreement shall be presumed to contain all the terms, nevertheless
"does not exclude other evidence of the circumstances under which the
agreement was made, or to which it relates, or to explain an intrinsic
ambiguity." Turning, therefore, to the surrounding circumstances, we find
the following: Wilson and Co. in their offer to Song Fo and Co. on June 9,
1913, while mentioning capacity, only did so in express connection with
the name and description of the machine as illustrated in the catalogue.
They furnished Song Fo and Co. with plans and specifications of the
distilling apparatus; and these describe a capacity of 6,000 liters of jus
(ferment). Wilson and Co.'s order to manufacturer, while mentioning a
capacity of 6,000 liters per day, does so again in connection with the
description in the maker's catalogue. And, finally, it was stated during the
trial, and it has not been denied, that a machine capable of producing
6,000 liters of rectified alcohol every 24 hours from nipa ferment would
cost between P35,000 and P40,000.

We are accordingly constrained to hold that the proper construction of

clause 1 of the contract, in question in connection with the conduct of the
parties and surrounding circumstances, is that Wilson and Co. were to

SECOND DIVISION
G.R. No. L-39972 & L-40300 August 6, 1986
VICTORIA LECHUGAS, petitioner,
vs.
HON. COURT OF APPEALS, MARINA LOZA, SALVADOR LOZA, ISIDRO
LOZA, CARMELITA LOZA, DAVID LOZA, AMPARO LOZA, ERLINDA
LOZA and ALEJANDRA LOZA, respondents.
GUTIERREZ, JR., J:
This petition for review invokes the parol evidence rule as it imputes grave
abuse of discretion on the part of the appellate court for admitting and
giving credence to the testimony of the vendor regarding the sale of the
disputed lot. The testimony is contrary to the contents of the deed of sale
executed by the vendor in favor of the petitioner.
The petitioner filed a complaint for forcible entry with damages against the
private respondents, alleging that the latter by means of force,
intimidation, strategy and stealth, unlawfully entered lots A and B,
corresponding to the middle and northern portion of the property owned by
the petitioner known as Lot No. 5456. She alleged that they appropriated
the produce thereof for themselves, and refused to surrender the
possession of the same despite demands made by the petitioner. The
complaint was dismissed. Petitioner appealed to the then Court of First
Instance (CFI) of Iloilo where the case was docketed as Civil Case No. 5055.
While the above appeal was pending, the petitioner instituted another
action before the CFI of Iloilo for recovery and possession of the same
property against the private respondents.
This case was docketed as Civil Case No. 5303. The two cases were tried
jointly. After trial, the court rendered judgment. The dispositive portion of
the decision states:
Wherefore, premises considered, judgment is rendered, to wit:
a. dismissing the complaints in two cases;
63
b. declaring defendants except Salvador Anona and Jose Lozada as owners
and lawful possessors of the land in question together with all the
improvements thereon;
c. dismissing the claim for damages of all defendants except that of Jose
Lozada;
d. ordering plaintiff to pay defendant Jose Lozada the sum of P500.00 as
attorney's fees and the amount of P300.00 as litigation expenses; and
e. ordering plaintiff to pay the costs of both proceedings.
The petitioner appealed to the Court of Appeals but the latter sustained the
dismissal of the cases. Hence, this petition with the petitioner making the
following assignments of errors:
I
THAT THE RESPONDENT COURT ERRED IN CONSIDERING PAROL EVIDENCE
OVER THE OBJECTION OF THE PETITIONER IN ORDER TO VARY THE SUBJECT
MATTER OF THE DEED OF DEFINITE SALE (EXHIBIT A) ALTHOUGH THE LAND
THEREIN IS DESCRIBED AND DELIMITED BY METES AND BOUNDS AND
IdENTIFIED AS LOT NO. 5456 OF LAMBUNAO CADASTRE.
II
THAT THE RESPONDENT COURT ERRED IN CONSIDERING THE THEORY OF
THE DEFENDANTS-APPELLEES FOR THE FIRST TIME ON APPEAL THAT THE
LAND DESCRIBED IN THE DEED OF SALE (EXHIBIT A) IS LOT NO. 5522
INSTEAD OF LOT NO. 5456 OF THE LAMBUNAO CADASTRE, THEIR ORIGINAL
THEORY BEING THAT THE DEED OF SALE (EXHIBIT A) IS NULL AND VOID AB
INITIO BECAUSE LEONCIA LASANGUE CAN NOT SELL THE LAND IN
QUESTION IN 1950 SINCE IT WAS ALLEGEDLY SOLD IN 1941 BY HER FATHER
EMETERIO LASANGUE.
III
THAT THE RESPONDENT COURT CANNOT REFORM THE DEED OF DEFINITE
SALE BY CHANGING ITS SUBJECT MATTER IN THE ABSENCE OF STRONG,
CLEAR AND CONVINCING EVIDENCE AND ON THE STRENGTH OF LONG

TESTIMONY OF THE VENDOR AND ALTHOUGH NO DIRECT ACTION FOR
REFORMATION WAS FILED IN THE COURT OF ORIGIN.
A summary of the facts which brought about the controversy is contained
in the findings of the appellate court:
Plaintiff (petitioner) Victoria Lechugas testified that she bought the
land now subject of this litigation from Leoncia Lasangue as
evidenced by a public "Deed of Absolute Sale" which plaintiff had
caused to be registered in the Office of the Register of Deeds;
preparatory to the execution of the deed Exhibit "A", plaintiff had
the land segregated from the bigger portion of 12 hectares owned
by Leoncia Lasangue by contracting a private land surveyor, the
Sirilan Surveying Office, to survey the land on December 3, 1950
and establish its boundaries, shape, form and area in accordance
with the said plan which was attached to exhibit A as Annex A
thereof. She also states that she caused the declaration of the said
portion of six hectares subject of Exhibit A in her name beginning
the year 1951 under tax declaration No. 7912, paid taxes on the
same land, and has taken possession of the land through her
tenants Jesus Leoncio, Roberta Losarita and Simeon Guinta, who
shared one-half of the produce of the riceland with her, while she
shouldered some of the expenses in cultivation and seeds, and
one-third share in other crops, like coffee beans, bamboos,
coconuts, corn and the like.
Plaintiff's declaration is corroborated by her tenant Simeon Guinta
who testifies that the land subject of the complaint was worked on
by him 1954 when its former tenant, Roberto Lazarita, now
deceased, left the land. As tenant thereof, he planted rice, corn
peanuts, coffee, and other minor products, sharing the same with
the owner, plaintiff Victoria Lechugas; that on June 14, 1958, while
witness was plowing Lot A preparatory to rice planting, defendants
entered the land and forced him to stop his work. Salvador Anona
and Carmelita Losa, particularly, told witness that if he (witness)
would sign an affidavit recognizing them as his landlords, they
would allow him to continue plowing the land. On that occasion,
Salvador Anona, David Loza and Jose Loza were carrying
unsheathed bolos, which made this witness very afraid, so much so
that he left the land and reported the matter to Victoria Lechugas
who reportedly went to the Chief of Police of Lambunao to ask the
latter to intervene. The advise however of the chief of police, who
64
responded to the call of plaintiff, was not heeded by the
defendants who stayed adamantly on Lot A and refused to
surrender the possession thereof to plaintiff appropriating the
harvest to themselves. This witness further declares that on June
24, 1958, defendants entered Lot B of the land in question,
situated on the northern portion, and cut the bamboo poles
growing thereof counted by plaintiff's brother and overseer in the
land, Bienvenido Laranja, to be 620 bamboo poles all in all. Despite
the warning of the overseer Laranja, defendants did not stop
cutting the bamboos, and they remained on the land, refusing to
leave the same. To top it all, in June of 1959, defendants, not
contended with just occupying the middle and northern portions of
the land (Lots A and B), grabbed the whole parcel containing six
hectares to the damage and prejudice of herein plaintiff, so that
plaintiff was left with no other recourse but to file Civil Case No.
5303 for ownership, recovery of possession and damages.
Defendants, on the other hand, maintain that the land which
plaintiff bought from Leoncia Lasangue in 1950 as evidenced by
the deed exhibit A, is different from the land now subject of this
action, and described in paragraph 2 of plaintiff's complaint. To
prove this point, defendants called as their first witness plaintiff
herself (pp. 6167, t.s.n., Tuble), to elicit from her the reason why it
was that although her vendor Leoncia Lasangue was also residing
at the municipality of Lambunao, Iloilo, plaintiff did not care to call
her to the witness stand to testify regarding the Identity of the land
which she (plaintiff) bought from said vendor Leoncia Lasangue; to
which query witness Lechugas countered that she had tried to call
her vendor, but the latter refused, saying that she (Lasangue) had
already testified in plaintiff's favor in the forcible entry case in the
Justice of the Peace Court. In connection with her testimony
regarding the true Identity of the land plaintiff, as witness of
defendants, stated that before the execution of Exhibit "A" on
December 8, 1950 the lot in question was surveyed (on December
3, 1950) by the Sirilan Surveyor Company after due notice to the
boundary owners including Leoncia Lasangue.
Defendant's evidence in chief, as testified to by Carmelita Lozada (pp. 100-
130, t.s.n., Trespeces; pp. 131-192, t.s.n., Tuble) shows that on April 6,
1931 Hugo Loza father of Carmelita Loza and predecessor-in-interest of the
rest of the heirs of herein defendants, (with the exception of Jose Loza and
Salvador Anona) purchased a parcel of land from one Victorina Limor as
 65

evidenced by the deed "Venta Definitiva" (exhibit 3, pp. 49-50, folder of Refuting plaintiff's contention that the land sold to her is the very land
exhibits). This land, containing 53,327 square meters is bounded on the under question, vendor Leoncia Lasangue testifies that:
north by Ramon Lasangue, on the south by Emeterio Lasangue and
covered by tax declaration No. 7346 (exhibit 3-9, p. 67, Id.) in vendor's Q. But Victoria Lechugas declared here that, by means of this document,
name; that immediately after the sale, Hugo Loza took possession of the exhibit 'A', you sold to her this very land in litigation; while you declared
said parcel of land and declared the same in his name (exhibit 3-10, p. 67, here now that this land in litigation was not included in the sale you made
folder of exhibits) starting the year 1935. On March 17, 1941, Hugo Loza of another parcel of land in her favor. What do you say about that?
bought from Emeterio Lasangue a parcel of land with an area of four
hectares more or less, adjoining the land he (Loza) had earlier bought from A. I only sold six (6) hectares to her.
Victoria Limor, and which sale was duly evidenced by a public instrument
(exhibit 2, pp. 35-36, folder of exhibits). This property had the following
Q. And that was included in this land in litigation?
boundaries, to wit: on the north by Eladio Luno, on the south, by Simeon
Lasangue, on the west, by Gregorio Militar and Emeterio Lasangue and on
the east, by Maximo Lasangue and Hipolito Lastica (exhibit 2, exhibit 2-B, A. No.
p. 37, Id). After the execution of the deed of sale, Exhibit 2, Hugo Loza
cause the transfer of the declaration in his own name (tax declaration No. Q. Did you tell her where that land you were selling to her was situated?
8832, exh. 2-C, p. 38, Id.) beginning 1945, and started paying the taxes on
the land (exhibits 2-d to 2-i, pp. 39-44, Id.). These two parcels of land (that A. On the South.
purchased by Hugo Loza in 1941 from Emeterio Lasangue, and a portion of
that bought by him from Victoria Limor sometime in 1931) were Q. South side of what land, of the land in litigation?
consolidated and designated, during the cadastral survey of Lambunao,
Iloilo in 1959 as Lot No. 5456; while the remaining portion of the lot bought A. The land I sold to her is south of the land in litigation.
from Victorina Limor, adjoining Lot 5456 on the east, was designated as Lot
No. 5515 in the name of the Heirs of Hugo Loza. Defendants claim that the
Q. What portion of these thirty-six (36) hectares of land did you sell
lot bought by plaintiff from Leoncia Lasangue as evidenced by exhibit A, is
actually, according to your agreement with Victoria Lechugas, and was it
situated south of the land now subject of this action and designated during
inside the thirty-six (36) hectares of land or a portion on one of the sides of
cadastral survey of Lambunao as Lot No. 5522, in the name of Victoria
thirty-six (36) hectares?
Lechugas.

A. It is on the edge of the whole land.

Leoncia Lasangue, plaintiff's vendor in exhibit A, testifying for defendants
(pp. 182-115, t.s.n., Tambagan; pp. 69-88, t.s.n., Tuble) declared that
Q. Where is that edge? on the north, east, west or south?
during his lifetime her father, Emeterio Lasangue, owned a parcel of land in
Lambunao, Iloilo, containing an area of 36 hectares; that said Emeterio
Lasangue sold a slice of 4 hectares of this property to Hugo Loza evidenced A . This edge. (witness indicating the lower edge of the piece of paper
by a deed of sale (Exh. 2) dated March 17, 1941; that other sales were shown into her)
made to other persons, leaving only some twelve hectares out of the
original 36; that these 12 hectares were transferred by her parents in her Q. Do you know what is east, that is, the direction where the sun rises?
(witness) name, being the only child and heir; that on December 8, 1950,
she (Leoncia Lasangue) sold six hectares of her inherited property to A. I know what is east.
Victoria Lechugas under a public instrument (exhibit A) which was
prepared at the instance of Victoria Lechugas and thumbmarked by herself Q. Do you know where the sun sets ?
(the vendor).

A. The sun sets on the west.
Q. If you are standing in the middle of your land containing thirty-six (36)
hectares and facing the east, that is, the direction where the sun rises,
where is that portion of land sold to Victoria Lechugas, on your left, on your
right, front of you or behind you?
A. On my right side. (Witness indicating south). (Testimony of Leoncia
Lasangue, pp. 209-211, rollo) (emphasis supplied).
On the basis of the above findings and the testimony of vendor Leoncia
Lasangue herself, who although illiterate was able to specifically point out
the land which she sold to the petitioner, the appellate court upheld the
trial court's decision except that the deed of sale (Exhibit A) was declared
as not null and void ab initio insofar as Leoncia Lasangue was concerned
because it could pass ownership of the lot in the south known as Lot No.
5522 of the Lambunao Cadastre which Leoncia Lasangue intended to sell
and actually sold to her vendee, petitioner Victoria Lechugas.
In her first assignment of error, the petitioner contends that the
respondent Court had no legal justification when it subjected the true
intent and agreement to parol evidence over the objection of petitioner
and that to impugn a written agreement, the evidence must be conclusive.
Petitioner maintains, moreover, that the respondent Court relied so much
on the testimony of the vendor who did not even file a case for the
reformation of Exhibit A.
The contentions are without merit.
The appellate court acted correctly in upholding the trial court's action in
admitting the testimony of Leoncia Lasangue. The petitioner claims that
Leoncia Lasangue was the vendor of the disputed land. The petitioner
denies that Leoncia Lasangue sold Lot No. 5522 to her. She alleges that
this lot was sold to her by one Leonora Lasangue, who, however, was never
presented as witness in any of the proceedings below by herein petitioner.
As explained by a leading commentator on our Rules of Court, the parol
evidence rule does not apply, and may not properly be invoked by either
party to the litigation against the other, where at least one of the parties to
the suit is not party or a privy of a party to the written instrument in
question and does not base a claim on the instrument or assert a right
66
originating in the instrument or the relation established thereby. (Francisco
on Evidence, Vol. VII, part I of the Rules of Court, p. 155 citing 32 C.J.S. 79.)
In Horn v. Hansen (57 N.W. 315), the court ruled:
...and the rule therefore applies, that as between parties to a
written agreement, or their privies, parol evidence cannot be
received to contradict or vary its terms. Strangers to a contract
are, of course, not bound by it, and the rule excluding extrinsic
evidence in the construction of writings is inapplicable in such
cases; and it is relaxed where either one of the parties between
whom the question arises is a stranger to the written agreement,
and does not claim under or through one who is party to it. In such
case the rule is binding upon neither. ...
In the case of Camacho v. Municipality of Baliuag, 28 Phil. 466, this Court
held that parol evidence which was introduced by the municipality was
competent to defeat the terms of the plaintiff's deed which the latter
executed with the Insular Government. In his concurring opinion, Justice
Moreland stated:
It should be noted in the first place, that there is no written
instrument between the plaintiff and the municipality, that is,
between the parties to the action; and there is, therefore, no
possibility of the question arising as to the admissibility of parol
evidence to vary or contradict the terms of an instrument. The
written instrument that is, the conveyance on which plaintiff bases
his action was between the Insular Government and the plaintiff,
and not between the municipality and the plaintiff; and therefore,
there can arise, as between the plaintiff and defendant no question
relative to the varying or contradicting the terms of a written
instrument between them ...
The petitioner's reliance on the parol evidence rule is misplaced. The rule is
not applicable where the controversy is between one of the parties to the
document and third persons. The deed of sale was executed by Leoncia
Lasangue in favor of Victoria Lechugas. The dispute over what was actually
sold is between petitioner and the private respondents. In the case at bar,
through the testimony of Leoncia Lasangue, it was shown that what she
really intended to sell and to be the subject of Exhibit A was Lot No. 5522
but not being able to read and write and fully relying on the good faith of
her first cousin, the petitioner, she just placed her thumbmark on a piece

of paper which petitioner told her was the document evidencing the sale of
land. The deed of sale described the disputed lot instead.
This fact was clearly shown in Lasangue's testimony:
Q. And how did you know that that was the description of the land that you
wanted to sell to Victoria Lechugas?
R. I know that because that land came from me.
S. But how were you able to read the description or do you know the
description?
A. Because, since I do not know how to read and write and after the
document was prepared, she made me sign it. So I just signed because I do
not know how to read.
Q. What explanation did she make to you?
A. She said to me, 'Manang, let us have a document prepared for you to
sign on the land you sold to me.' So, after the document was prepared, I
signed.
Q. Did you tell her where that land you were selling to her was situated?
A. On the South.
Q. South side of what land, of the land in litigation?
A. The land I sold to her is south of the land in litigation.
Q. Did you tell her that before preparing the document you signed?
A. Yes, I told her so because I had confidence in her because she is my first
cousin. (pp. 198-207, rollo)
67
From the foregoing, there can be no other conclusion but that Lasangue did
not intend to sell as she could not have sold, a piece of land already sold
by her father to the predecessor-in-interest of the respondents.
The fact that vendor Lasangue did not bring an action for the reformation
of Exhibit "A" is of no moment. The undisputed fact is that the respondents
have timely questioned the validity of the instrument and have proven
that, indeed Exhibit "A" does not reflect the true intention of the vendor.
There is likewise no merit in the contention of the petitioner that the
respondents changed their theory on appeal.
Respondents, from the very start, had questioned and denied Leoncia
Lasangue's capacity to sell the disputed lot to petitioner. It was their
contention that the lot was sold by Leoncia's father Emeterio Lasangue to
their father, Hugo Loza wayback in 1941 while the alleged sale by Leoncia
to the petitioner took place only in 1950. In essence, therefore, the
respondents were already attacking the validity of Exhibit "A". Moreover,
although the prior sale of the lot to their father may have been emphasized
in their defenses in the civil cases filed against them by the petitioner in
the lower court, nevertheless in their affirmative defense, the respondents
already raised doubt on the true intention of Leoncia Lasangue in signing
Exhibit "A" when they alleged that..." Leoncia Lasangue, publicly, and in
writing repudiated said allegation and pretension of the plaintiff, to the
effect that the parcel of land now in litigation in the present case "WAS
NOT INCLUDED in the sale she executed in favor of the plaintiff ... .
Consequently, petitioner cannot impute grave abuse on the part of the
appellate court and state that it allowed a change of theory by the
respondents for the first time on appeal for in reality, there was no such
change. The third issue raised by the petitioner has no merit. There is
strong, clear, and convincing evidence as to which lot was actually sold to
her. We see no reason to reverse the factual findings of both the Court of
First Instance and the Court of Appeals on this point. The "reformation"
which the petitioner questions was, in fact, intended to favor her. Instead
of declaring the deed of sale null and void for all purposes, the Court
upheld its having passed ownership of Lot No. 5522 to the petitioner.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby
DISMISSED for lack of merit with costs against the petitioner. SO ORDERED.