Castillo v Castillo G.R. No.

189607, April 18, 2016

By March 29, 2017No comments
Facts:

On 25 May 1972, respondent Lea P. De Leon Castillo (Lea) married Benjamin Bautista (Bautista). On 6 January 1979,
respondent married herein petitioner Renato A. Castillo (Renato).

On 28 May 2001, Renato filed before the RTC a Petition for Declaration of Nullity of Marriage, praying that his marriage
to Lea be declared void due to her subsisting marriage to Bautista. Respondent opposed the Petition, and contended that
her marriage to Bautista was null and void as they had not secured any license therefor, and neither of them was a
member of the denomination to which the solemnizing officer belonged.

RTC declared the marriage between petitioner and respondent null and void ab initio on the ground that it was a
bigamous marriage under Article 41 of the Family Code. The RTC said that the fact that Lea's marriage to Bautista was
subsisting when she married Renato on 6 January 1979, makes her marriage to Renato bigamous, thus rendering it void
ab initio. The lower court dismissed Lea's argument that she need not obtain a judicial decree of nullity and could
presume the nullity of a prior subsisting marriage. The RTC stressed that so long as no judicial declaration exists, the prior
marriage is valid and existing. Lastly, RTC also said that even if respondent eventually had her first marriage judicially
declared void, the fact remains that the first and second marriage were subsisting before the first marriage was annulled,
since Lea failed to obtain a judicial decree of nullity for her first marriage to Bautista before contracting her second
marriage with Renato.

CA reversed and set aside the RTC's Decision and Order and upheld the validity of the parties' marriage. In reversing the
RTC, the CA said that since Lea's marriages were solemnized in 1972 and in 1979, or prior to the effectivity of the Family
Code on 3 August 1988, the Civil Code is the applicable law since it is the law in effect at the time the marriages were
celebrated, and not the Family Code. Furthermore, the CA ruled that the Civil Code does not state that a judicial decree
is necessary in order to establish the nullity of a marriage.

Issue: W/N judicial declaration is necessary in order to establish the nullity of a marriage.

Ruling: NO, under the Civil Code. Petition is DENIED.

The Court held that the subsequent marriage of Lea to Renato is valid in view of the invalidity of her first marriage to
Bautista because of the absence of a marriage license. That there was no judicial declaration that the first marriage was
void ab initio before the second marriage was contracted is immaterial as this is not a requirement under the Civil Code.
Nonetheless, the subsequent Decision of the RTC declaring the nullity of Lea's first marriage only serves to strengthen
the conclusion that her subsequent marriage to Renato is valid.

Ratio:

The validity of a marriage and all its incidents must be determined in accordance with the law in effect at the time of its
celebration. In this case, the law in force at the time Lea contracted both marriages was the Civil Code. The children of
the parties were also born while the Civil Code was in effect i.e. in 1979, 1981, and 1985. Hence, the Court must resolve
this case using the provisions under the Civil Code on void marriages, in particular, Articles 80, 81, 82, and 83 (first
paragraph); and those on voidable marriages are Articles 83 (second paragraph), 85 and 86.

Under the Civil Code, a void marriage differs from a voidable marriage in the following ways:
1) a void marriage is nonexistent - i.e., there was no marriage from the beginning - while in a voidable marriage, the
marriage is valid until annulled by a competent court;
2) a void marriage cannot be ratified, while a voidable marriage can be ratified by cohabitation;
3) being nonexistent, a void marriage can be collaterally attacked, while a voidable marriage cannot be collaterally
attacked;
4) in a void marriage, there is no conjugal partnership and the offspring are natural children by legal fiction, while in
voidable marriage there is conjugal partnership and the children conceived before the decree of annulment are
considered legitimate; and
5) "in a void marriage no judicial decree to establish the invalidity is necessary," while in a voidable marriage there must
be a judicial decree.

Emphasizing the fifth difference, this Court has held in the cases of People v. Mendoza, People v. Aragon, and Odayat v.
Amante, that the Civil Code contains no express provision on the necessity of a judicial declaration of nullity of a void
marriage.

It must be emphasized that the enactment of the Family Code rendered the rulings in Odayat, Mendoza, and Aragon
inapplicable to marriages celebrated after 3 August 1988. A judicial declaration of absolute nullity of marriage is now
expressly required where the nullity of a previous marriage is invoked for purposes of contracting a second marriage. A
second marriage contracted prior to the issuance of this declaration of nullity is thus considered bigamous and void.

G.R. No. 173632 September 29, 2014

AMBROSIO ROTAIRO (substituted by his spouse MARIA RONSA YRO ROTAIRO, and his children FELINA ROTAIRO,
ERLINDA ROTAIRO CRUZ, EUDOSIA ROTAIRO CRIZALDO, NIEVES ROTAIRO TUBIG, REMEDIOS ROTAIRO MACAHILIG,
FELISA ROTAIRO LEGASPI, JOSEFINA ROTAIRO TORREVILLAS, and CRISENCIO R. ROTAIRO, MARCIANA TIBAY, EUGENIO
PUNZALAN, and VICENTE DEL ROSARIO, Petitioners,
vs.
ROVIRA ALCANTARA and VICTOR ALCANTARA, Respondents.

DECISION

REYES, J.:

For review is the Decision1 dated July 21, 2005 and Resolution2 dated July 7, 2006 of the Court of Appeals (CA) in CA-G.R.
CV No. 58455, which set aside the Decision 3 dated December 27, 1996 of the Regional Trial Court (RTC) of Antipolo, Rizal,
Branch 71 in Civil Case No. 672.

Civil Case No. 672 was filed by the respondent Rovira Alcantara (Rovira) for the recovery of possession of a parcel of land
in Barangay San Andres, Cainta, Rizal, measuring 2,777 square meters and originally titled under Transfer Certificate of
Title (TCT) No. 481018. Said property was formerly owned by Roviras father, Victor C. Alcantara (Alcantara), and Alfredo
C. Ignacio (Ignacio), who mortgaged the property to Pilipinas Bank and Trust Company (Pilipinas Bank) in 1968. Two years
after, the property was parcelled out by Alcantara and Ignacio, through their firm Wilfredo S. Ignacio & Company (Ignacio
& Co.), and separately sold to different buyers. One of the buyers was Ambrosio Rotairo (Rotairo) who bought a 200-
square meter portion on installment basis. Rotairo constructed his house on the property identified as Lot C-1, and after
completing payments, a Deed of Absolute Sale was executed on September 25, 1979 in his favor by Ignacio & Co. 4
In the meantime, Alcantara and Ignacio defaulted in their loan obligations causing Pilipinas Bank to foreclose the
mortgage on the entire property. Without redemption being made by Alcantara and Ignacio, title was consolidated in the
name of Pilipinas Bank, being the highest bidder during the auction sale. Pilipinas Bank then sold the property in a Deed
of Absolute Sale dated June 6, 1975 to Rovira, who happens to be Alcantaras daughter. 5

In 1988, Rovira filed her Amended Complaint in Civil Case No. 672 for recovery of possession and damages.After trial, the
RTC dismissed Civil Case No. 672. The Decision dated December 27, 1996 provides for the following dispositive portion:

WHEREFORE, judgment is hereby rendered dismissing the complaint and defendants counterclaim; and plaintiff, being
the successor-in-interest of the subdivision owner, Wilfredo S. Ignacio, is ordered to issue the corresponding transfer
certificate of title to defendant Ambrosio Rotairo pursuant to the provisions of PD [No.] 957.

SO ORDERED.6

The RTC ruled that the transaction between Ignacio & Co. and Rotairo was covered by Presidential Decree (P.D.) No.
957.7 Rovira, as "successor-in-interest of Wilfredo S.Ignacio [and Victor Alcantara] was well aware of the condition of the
property which she bought from the Pilipinas Bank, because she lives near the land, and at the time she purchased it she
was aware of the existing houses or structures on the land." 8 She was, therefore, not entitled to the relief prayed for in
her complaint.

On appeal, the CA set aside the RTC decision and ordered the turnover of possession of the property to Rovira. The
dispositive portion of the assailed CA Decision dated July 21, 2005 provides:

WHEREFORE, the decision appealed from is SET ASIDE. The Heirs of Ambrosio Rotairo and their assigns, are ORDERED to
turn over possession of Lot C-1 to Rovira Alcantara. Third party defendants, William [sic] Ignacio and Victor Alcantara, are
ORDERED to return the purchase price of 10,000.00 to the Heirs of Ambrosio Rotairo, with interest at the rate of 6% per
annum until finality of this decision, and at the rate of 12% per annum thereafter until fully paid.

SO ORDERED.9

Petitioners sought reconsideration, which was denied by the CA in the assailed Resolution 10 dated July 7, 2006.

In granting possession in favor of Rovira, the CA held that P.D. No. 957 is not applicable since the mortgagewas
constituted prior to the sale to Rotairo. According to the CA, Section 18 11 of P.D. No. 957 protects innocent lot buyers,
and where there is a prior registered mortgage, the buyer purchases it with knowledge of the mortgage. In the caseof
Rotairo, P.D. No. 957 does not confer "more" rights to an unregistered buyer like him, as against a registered prior
mortgagee like Pilipinas Bank and its buyer, Rovira. 12 Hence, the present petition.

Petitioners raise the following issues:

1. Whether or not, notwithstanding that the subject land is subdivision lot, Ambrosio Rotairo (father of the
Petitioners), [a] buyer and builder in good faith should suffer, while the seller in bad faith Victor Alcantara should
be benefited by his malicious acts.

2. Whether or not, Ambrosio Rotairo (father of the Petitioners), a buyer and builder in good faith should suffer
while the seller in bad faith Victor Alcantara should be benefited by his malicious acts. 13

Petitioners insist on the applicabilityof P.D. No. 957 in this case, and that the transaction between Rotairo and Ignacio &
Co. should fall within the protection of the law. On the other hand, Rovira principally relies on the prior registration of
the mortgage and the sale in her favor vis--visthe petitioners unregistered transactions.
The first issue then that must be resolved is whether P.D. No. 957 is applicable in this case. But the more crucial issue
before the Court is who, as between the petitioners and Rovira, has better right to the property in dispute?

Retroactive application of P.D. No. 957

The retroactive application of P.D. No. 957 to transactions entered into prior to its enactment in 1976 is already
settled.1wphi1 In Eugenio v. Exec. Sec. Drilon,14 which involved a land purchase agreement entered into in 1972, the
Court stated that the unmistakeable intent of the legislature is to have P.D. No. 957 operate retrospectively. Moreover,
the specific terms of P.D. No. 957 provide for its retroactive effect even to contracts and transactions entered into prior
to its enactment. In particular, Section 21 of P.D. No. 957 provides:

Sec. 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or disposed of prior to the
effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project
to complete compliance with his or its obligations as provided in the preceding section within two years from the date of
this Decree unless otherwise extended by the Authority or unless an adequate performance bond isfiled in accordance
with Section 6 hereof.

Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall constitute
a violation punishable under Section 38 and 39 ofthis Decree. (Emphasis ours)

In this case, the contract to sell between Rotairo and Ignacio & Co. was entered into in 1970, and the agreement was
fully consummated with Rotairos completion of payments and the execution of the Deed of Sale in his favor in 1979.
Clearly, P.D. No. 957 is applicable in this case.

It was error for the CA to rule thatthe retroactive application of P.D. No. 957 is "warranted only where the subdivision is
mortgaged after buyers have purchased individual lots." 15 According to the CA, the purpose of Section 18 requiring notice
of the mortgage to the buyers is to give the buyer the option to pay the instalments directly to the mortgagee; hence, if
the subdivision is mortgaged before the lots are sold, then there are no buyers to notify. 16 What the CA overlooked is
that Section 21 requires the owner or developer of the subdivision project to complete compliance with its obligations
within two years from 1976.The two-year compliance provides the developer the opportunity to comply with its
obligation to notify the buyers of the existence of the mortgage, and consequently, for the latter to exercise their option
to pay the instalments directly to the mortgagee.

Nevertheless, such concomitant obligation of the developer under Section 21 did not arise in this case. It must be noted
that at the time of the enactment of P.D. No. 957 in 1976 and asearly as 1974, Pilipinas Bank had already foreclosed the
mortgage and bought the properties in the foreclosure sale. There was, thus, no mortgage to speak of such that Rotairo
should be notified thereof so that he could properly exercise his option to pay the instalments directly to Pilipinas Bank.

Rovira is not a buyer in good faith

Notwithstanding the preceding discussion, the Court finds that Rovira cannot claim a better right to the property
because she is not a buyer in good faith. Initially, it must be stated that the determination of whether one is a buyer in
good faith is a factual issue, which generally cannotbe determined by the Court in a petition for review filed under Rule
45.17 The rule, nonetheless, admits of exceptions, someof which are when the judgment of the CA is based on a
misapprehension offacts or when the CA overlooked undisputed facts which, if properly considered, would justify a
different conclusion.18 A review of this case shows that the CA failed to appreciate the relevance of certain undisputed
facts, thus giving rise to its erroneous conclusion that Rovira has a better right to the property in dispute.

Rovira contended that the registered mortgage between Pilipinas Bank and Alcantara and Ignacio is superior to the
unregistered contract to sell between Ignacio & Co. and Rotairo, which was sustained by the CA. The CA applied Section
50 of Act No. 496 or the Land Registration Act and ruled that since the sale to Rotairo was unregistered and subsequent
to the registered mortgage, the latter was obligated to respect the foreclosure and eventual sale of the property in
dispute, among others.19
Indeed, the rule is that as "[b]etween two transactions concerning the same parcel of land, the registered transaction
prevails over the earlier unregistered right."20 This is in accord with Section 50 of the Land Registration Act, 21 which
provides:

Sec. 50. An owner of registered land may convey, mortgage, lease, charge, or otherwise deal with the same as fully as if it
had not been registered. He may use forms of deeds, mortgages[,] leases, or other voluntary instruments like those now
in use and sufficient in law for the purpose intended. But no deed, mortgage, lease, or other voluntary instrument,
except a will purporting to convey or affect registered land, shall take effect as a conveyance or bind the land, but shall
operate only as a contract between the parties and as evidence of authority to the clerk or register of deeds to make
registration. The act of registration shall be the operative act to convey and affect the land, and in all cases under this Act
the registration shall be made inthe office of register of deeds for the province or provinces or city where the land lies.
(Emphasis ours)

Section 51 of the Land Registration Act further states that "[e]very conveyance, mortgage, lease, lien, attachment, order,
decree, instrument, or entry affecting registered land x x x, if registered x x x be notice to all persons from the time of
such registeringx x x." "The principal purpose of registration is merely to notify other persons not parties to a contract
that a transaction involving the property has been entered into." 22 Thus, it has been held that "registration in a
publicregistry creates constructive notice to the whole world." 23 Moreover, "[a] person dealing with registered land may
safely rely on the correctness of the certificate of title issued therefor, and he is not required to go beyond the certificate
to determine the condition of the property." 24

The rule, however, is not without recognized exceptions. "The conveyance shall not be valid against any person unless
registered, except (1) the grantor, (2) his heirs and devisees, and (3) third persons having actual notice or knowledge
thereof."25 Moreover, "when the party has actual knowledge of facts and circumstances that would impel a reasonably
cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or
of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in
litigation,26 he cannot find solace in the protection afforded by a prior registration. Neither can such person be
considered an innocent purchaser for value nor a purchaser in good faith. 27

In this case, two factors work against Rovira as a buyer in good faith. One, she cannot be considered a third person for
purposes of applying the rule. Rovira does not deny that she is the daughter and an heir of Victor C. Alcantara, one of the
parties to the contract to sell (and the contract of sale) executed in favor of Rotairo. "The vendors heirs are his
privies."28 Based on such privity, Rovira is charged with constructive knowledge of prior dispositions or encumbrances
affecting the subject property made by her father. 29 The fact that the contract to sell was unregistered became
immaterial and she is, therefore, bound by the provisions of the contract to sell and eventually, the contract of sale,
executed by her father in favor of Rotairo.

Further, more than the chargeof constructive knowledge, the surrounding circumstances of this case show Roviras actual
knowledgeof the disposition of the subject property and Rotairos possession thereof. It is undisputed that after the
contract to sell was executed in April 1970, Rotairo immediately secured a mayors permit in September 28, 1970 for the
construction of his residential house on the property. 30 Rotairo, and subsequently, his heirs, has been residing on the
property since then. Rovira, who lives only fifty (50) meters away from the subject property, in fact, knew that there were
"structures built on the property."31 Rovira, however, claims that "she did not bother to inquire as to the legitimacy of the
rights of the occupants, because she was assured by the bank of its title to the property." 32 But Rovira cannot rely solely
on the title and assurances of Pilipinas Bank; it was incumbent upon her to look beyond the title and make necessary
inquiries because the bank was not in possession of the property. "Where the vendor is not in possession of the
property, the prospective vendees are obligated to investigate the rights of one in possession." 33 A purchaser cannot
simply close his eyes to facts which should put a reasonable man on guard, 34 and thereafter claim that he acted in good
faith under the belief that there was no defect in the title of the vendor. 35 Hence, Rovira cannot claim a right better than
that of Rotairo' s as she is not a buyer in good faith.

"[I]t is a settled rule that the Land Registration Act protects only holders of title in good faith, and does not permit its
provision to be used as a shield for the commission of fraud, or as a means to enrich oneself at the expense of others. " 36
Under different circumstances, the prior registration of the mortgage between Pilipinas Bank and Alcantara and Ignacio,
and Rovira's subsequent purchase of the subject property would have been valid and binding, and could have defeated
Rotairo's unregistered claim over it. But given Rovira's privity with her father Victor C. Alcantara and the fact that she had
actual knowledge of the disposition of the property and Rotairo's possession thereof, her acquisition of the property
cannot be upheld.

WHEREFORE, the petition is GRANTED. The Decision dated July 21, 2005 and Resolution dated July 7, 2006 of the Court
of Appeals in CA-G.R. CV No. 58455 are SET ASIDE. The Decision dated December 27, 1996 of the Regional Trial Court of
Antipolo, Rizal, Branch 71, dismissing Civil Case No. 672 is REINSTATED.

SO ORDERED.

GLORIA SANTOS DUEAS, petitioner, vs. SANTOS SUBDIVISION HOMEOWNERS ASSOCIATION, respondent.

DECISION
QUISUMBING, J.:

For review on certiorari is the Decision[1] dated December 29, 2000, of the Court of Appeals in CA-G.R. SP No. 51601,
setting aside the Decision[2] of the Housing and Land Use Regulatory Board (HLURB) in HLURB Case No. REM-A-980227-
0032 which earlier affirmed the Decision [3] of the HLURB-NCR Regional Field Office in HLURB Case No. REM-070297-
9821. Said Regional Field Office dismissed the petition of herein respondent Santos Subdivision Homeowners Association
(SSHA) seeking to require herein petitioner, Gloria Santos Dueas, to provide for an open space in the subdivision for
recreational and community activities. In its assailed decision, the CA remanded the case to the HLURB for determination
of a definitive land area for open space.[4] Petitioner assails also the Court of Appeals Resolution [5] dated July 31, 2001,
denying her motion for reconsideration.
The facts of this case are as follows:
Petitioner Gloria Santos Dueas is the daughter of the late Cecilio J. Santos who, during his lifetime, owned a parcel
of land with a total area of 2.2 hectares located at General T. De Leon, Valenzuela City, Metro Manila. In 1966, Cecilio had
the realty subdivided into smaller lots, the whole forming the Cecilio J. Santos Subdivision (for brevity, Santos
Subdivision). The then Land Registration Commission (LRC) approved the project and the National Housing Authority
(NHA) issued the required Certificate of Registration and License to Sell. At the time of Cecilios death in 1988, there were
already several residents and homeowners in Santos Subdivision.
Sometime in 1997, the members of the SSHA submitted to the petitioner a resolution asking her to provide within
the subdivision an open space for recreational and other community activities, in accordance with the provisions of P.D.
No. 957,[6] as amended by P.D. No. 1216. [7] Petitioner, however, rejected the request, thus, prompting the members of
SSHA to seek redress from the NHA.
On April 25, 1997, the NHA General Manager forwarded the SSHA resolution to Romulo Q. Fabul, Commissioner and
Chief Executive Officer of the HLURB in Quezon City.[8]
In a letter dated May 29, 1997, the Regional Director of the Expanded NCR Field Office, HLURB, opined that the
open space requirement of P.D. No. 957, as amended by P.D. No. 1216, was not applicable to Santos Subdivision. [9]
SSHA then filed a petition/motion for reconsideration, [10] docketed as HLURB Case No. REM-070297-9821, which
averred among others that: (1) P.D. No. 957 should apply retroactively to Santos Subdivision, notwithstanding that the
subdivision plans were approved in 1966 and (2) Gloria Santos Dueas should be bound by the verbal promise made by
her late father during his lifetime that an open space would be provided for in Phase III of Santos Subdivision, the lots of
which were at that time already for sale.
Petitioner denied any knowledge of the allegations of SSHA. She stressed that she was not a party to the alleged
transactions, and had neither participation nor involvement in the development of Santos Subdivision and the sale of the
subdivisions lots. As affirmative defenses, she raised the following: (a) It was her late father, Cecilio J. Santos, who owned
and developed the subdivision, and she was neither its owner nor developer; (b) that this suit was filed by an
unauthorized entity against a non-existent person, as SSHA and Santos Subdivision are not juridical entities, authorized
by law to institute or defend against actions; (c) that P.D. No. 957 cannot be given retroactive effect to make it applicable
to Santos Subdivision as the law does not expressly provide for its retroactive applicability; and (d) that the present
petition is barred by laches.
On January 14, 1998, HLURB-NCR disposed of HLURB Case No. REM-070297-9821 in this wise:

In view of the foregoing, the complaint is hereby dismissed.

It is So Ordered.[11]

In dismissing the case, the HLURB-NCR office ruled that while SSHA failed to present evidence showing that it is an
association duly organized under Philippine law with capacity to sue, nonetheless, the suit could still prosper if viewed as
a suit filed by all its members who signed and verified the petition. However, the petition failed to show any cause of
action against herein petitioner as (1) there is no evidence showing Santos-Dueas as the owner/developer or successor-
in-interest of Cecilio Santos, who was the owner/developer and sole proprietor of Santos Subdivision; (2) the LRC-
approved subdivision plan was bereft of any proviso indicating or identifying an open space, as required by P.D. No. 957,
as amended, hence there was no legal basis to compel either Cecilio or his daughter Santos-Dueas, as his purported
successor, to provide said space; and (3) the alleged verbal promise of the late Cecilio Santos was inadmissible as
evidence under the dead mans statute. [12]
SSHA then appealed the NCR offices ruling to the HLURB Board of Commissioners. The latter body, however,
affirmed the action taken by the HLURB-NCR office, concluding thus:

WHEREFORE, premises considered, the Petition for Review is hereby DISMISSED and the decision of the Office below is
hereby AFFIRMED IN TOTO.

SO ORDERED.[13]

The HLURB Board decreed that there was no basis to compel the petitioner to provide an open space within Santos
Subdivision, inasmuch as the subdivision plans approved on July 8, 1966, did not provide for said space and there was no
law requiring the same at that time. It further ruled that P.D. No. 957 could not be given retroactive effect in the absence
of an express provision in the law. Finally, it found the action time-barred since it was filed nine (9) years after the death
of Cecilio. The Board noted that SSHA sought to enforce an alleged oral promise of Cecilio, which should have been done
within the six-year prescriptive period provided for under Article 1145 [14] of the Civil Code.
Dissatisfied, respondent sought relief from the Court of Appeals via a petition for review under Rule 43 of the 1997
Rules of Civil Procedure. The petition, docketed as CA-G.R. SP No. 51601, was decided by the appellate court in this
manner:

WHEREFORE, the petition is GRANTED--and the decision, dated January 20, 1999, of the Housing and Land Use
Regulatory Board (HLURB) in HLURB Case No. REM-A-980227-0032 is hereby REVERSED and SET ASIDE. Accordingly, this
case is ordered REMANDED to the HLURB for the determination of the definitive land area that shall be used for open
space in accordance with law and the rules and standards prescribed by the HLURB. No pronouncement as to costs.

SO ORDERED.[15]

In finding for SSHA, the appellate court relied upon Eugenio v. Exec. Sec. Drilon,[16] which held that while P.D. No. 957
did not expressly provide for its retroactive application, nonetheless, it can be plainly inferred from its intent that it was
to be given retroactive effect so as to extend its coverage even to those contracts executed prior to its effectivity in
1976. The Court of Appeals also held that the action was neither barred by prescription nor laches as the obligation of a
subdivision developer to provide an open space is not predicated upon an oral contract, but mandated by law, hence, an
action may be brought within ten (10) years from the time the right of action accrues under Article 1144 [17] of the Civil
Code. Moreover, the equitable principle of laches will not apply when the claim was filed within the reglementary
period.
Petitioner duly moved for reconsideration, which the Court of Appeals denied on July 31, 2001.
Hence, this petition grounded on the following assignment of errors:
I. THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW BY TAKING COGNIZANCE OF RESPONDENTS
PETITION (WHICH ASSAILS THE DECISION OF THE BOARD OF COMMISSIONERS OF THE HLURB) WHEN
JURISDICTION THEREON IS WITH THE OFFICE OF THE PRESIDENT, AS CLEARLY MANDATED BY SEC. 2, RULE
XVIII OF THE 1996 RULES OF PROCEDURE OF THE HOUSING AND LAND USE REGULATORY BOARD.
II. IT WAS GRAVE ERROR FOR THE COURT OF APPEALS TO HAVE ASSUMED JURISDICTION OVER THE PETITION
BELOW WHEN RESPONDENTS CLEARLY FAILED TO EXHAUST THE ADMINISTRATIVE REMEDIES AVAILABLE
TO THEM UNDER THE LAW.
III. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT RESPONDENT SANTOS SUBDIVISION
HOMEOWNERS ASSOCIATION, A NON-REGISTERED ORGANIZATION, LACKED THE LEGAL PERSONALITY TO
SUE.
IV. THE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT RESPONDENT SANTOS SUBDIVISION
HOMEOWNERS ASSOCIATION HAS NO CAUSE OF ACTION AGAINST PETITIONER; NEITHER WAS SANTOS
SUBDIVISION, A NON-ENTITY, POSSESSED WITH CAPACITY TO BE SUED NOR IS PETITIONER GLORIA
SANTOS-DUEAS A PROPER PARTY TO THE CASE, THE LATTER NOT BEING THE OWNER OR DEVELOPER OF
SANTOS SUBDIVISION.
V. THE COURT OF APPEALS SERIOUSLY ERRED IN SUBSTITUTING ITS FINDINGS WITH THAT OF THE
ADJUDICATION BOARD AND BOARD OF COMMISSIONERS OF THE HLURB WHEN THEIR DECISION IS BASED
ON SUBSTANTIAL EVIDENCE AND NO GRAVE ABUSE OF DISCRETION CAN BE ATTRIBUTED TO THEM.
VI. THE COURT OF APPEALS DEVIATED FROM THE EXISTING LAW AND JURISPRUDENCE WHEN IT RULED THAT
P.D. 957 HAS RETROACTIVE APPLICATION -- WHEN THE LAW ITSELF DOES NOT PROVIDE FOR ITS
RETROACTIVITY AND THE EXISTING JURISPRUDENCE THEREON CLEARLY PRONOUNCED THAT IT HAS NO
RETROACTIVE APPLICATION. TO PROVIDE RETROACTIVITY TO P.D. 957 WOULD CAUSE IMPAIRMENT OF
VESTED RIGHTS.
VII. WHILE AS A GENERAL RULE, THE FACTUAL FINDINGS OF THE COURT OF APPEALS IS BINDING ON THE
SUPREME COURT, THE SAME IS NOT TRUE WHEN THE FORMERS CONCLUSION IS BASED ON SPECULATION,
SURMISES AND CONJECTURES, THE INFERENCE MADE IS MANIFESTLY MISTAKEN OR ABSURD, THERE IS
GRAVE ABUSE OF DISCRETION, JUDGMENT IS BASED ON MISAPPREHENSION OF FACTS CONTRARY TO
THOSE OF THE ADMINISTRATIVE AGENCY CONCERNED, AND IT WENT BEYOND THE ISSUES OF THE CASE
AND THE SAME IS CONTRARY TO THE ADMISSIONS OF BOTH PARTIES. [18]
To our mind, the foregoing may be reduced into the following issues: (1) the applicability of the doctrine of non-
exhaustion of administrative remedies; (2) the legal capacity of respondent to sue the petitioner herein; and (3) the
retroactivity of P.D. No. 957, as amended by P.D. No. 1216.
On the first issue, the petitioner contends that the filing of CA-G.R. SP No. 51601 was premature as SSHA failed to
exhaust all administrative remedies. Petitioner submits that since Section 1, [19] Rule 43 of the 1997 Rule of Civil
Procedure does not mention the HLURB, the respondent should have appealed the decision of the HLURB Board in
HLURB Case No. REM-A-980227-0032 to the Office of the President prior to seeking judicial relief. In other words, it is the
decision of the Office of the President, [20] and not that of the HLURB Board, which the Court of Appeals may review.
We find petitioners contentions bereft of merit. The principle of non-exhaustion of administrative remedies is,
under the factual circumstances of this case, inapplicable. While this Court has held that before a party is allowed to seek
intervention of the courts, it is a pre condition that he avail himself of all administrative processes afforded him,
[21]
nonetheless, said rule is not without exceptions. [22] The doctrine is a relative one and is flexible depending on the
peculiarity and uniqueness of the factual and circumstantial settings of each case. [23]
 In the instant case, the questions posed are purely legal, namely: (1) whether the respondent had any right to
demand an open space and the petitioner had any legal obligation to provide said open space within Santos Subdivision
under P.D. No. 957, as amended by P.D. No. 1216, and (2) whether the action had already prescribed under Article 1145
of the Civil Code. Moreover, the Court of Appeals found that SSHA had sought relief from the Office of the President, but
the latter forwarded the case to the HLURB. In view of the foregoing, we find that in this particular case, there was no
need for SSHA to exhaust all administrative remedies before seeking judicial relief.
On the second issue, the petitioner claims that respondent SSHA failed to present any evidence showing that it is a
legally organized juridical entity, authorized by law to sue or be sued in its own name. Thus, pursuant to Section 1, Rule
3[24] of the 1997 Rules of Civil Procedure, it has no legal capacity to file this suit before the HLURB and the Court of
Appeals.
SSHA counters that it has the capacity to sue as an association, since it is a member of the Federation of Valenzuela
Homeowners Association, Inc., which is registered with the Securities and Exchange Commission. In the alternative, the
individual members of SSHA who signed both the resolution and the complaint in this case may, as natural persons,
pursue the action.
There is merit in petitioners contention. Under Section 1, Rule 3 of the Revised Rules of Court, only natural or
juridical persons, or entities authorized by law may be parties in a civil action. Article 44[25] of the Civil Code enumerates
the various classes of juridical persons. Under said Article, an association is considered a juridical person if the law grants
it a personality separate and distinct from that of its members. [26] The records of the present case are bare of any
showing by SSHA that it is an association duly organized under Philippine law. It was thus an error for the HLURB-NCR
Office to give due course to the complaint in HLURB Case No. REM-070297-9821, given the SSHAs lack of capacity to sue
in its own name. Nor was it proper for said agency to treat the complaint as a suit by all the parties who signed and
verified the complaint. The members cannot represent their association in any suit without valid and legal
authority. Neither can their signatures confer on the association any legal capacity to sue. Nor will the fact that SSHA
belongs to the Federation of Valenzuela Homeowners Association, Inc., suffice to endow SSHA with the personality and
capacity to sue. Mere allegations of membership in a federation are insufficient and inconsequential. The federation
itself has a separate juridical personality and was not impleaded as a party in HLURB Case No. REM-070297-9821 nor in
this case. Neither was it shown that the federation was authorized to represent SSHA. Facts showing the capacity of a
party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of
an organized association of persons that is made a party, must be averred. [27] Hence, for failing to show that it is a
juridical entity, endowed by law with capacity to bring suits in its own name, SSHA is devoid of any legal capacity,
whatsoever, to institute any action.
Anent the third issue, the petitioner ascribes error to the appellate court for holding that P.D. No. 957 has
retroactive application. She points out that there is no retroactivity provision in the said decree. Hence, it cannot be
applied retroactively pursuant to Article 4 [28] of the Civil Code of the Philippines. The same holds true for P.D. No. 1216,
which amended Section 31 of P.D. No. 957 and imposed the open space requirement in subdivisions. Petitioner stresses
that P.D. No. 1216 only took effect on October 14, 1977 or more than ten (10) years after the approval of the subdivision
plans of Cecilio Santos.
Although it may seem that this particular issue, given our ruling on the first issue regarding the lack of capacity of
SSHA to bring any action in its name, is now moot and academic, we are constrained to still address it.
This petition was brought to us not by respondent SSHA but by Gloria Santos Dueas who assails the appellate courts
finding that our ruling in Eugenio v. Exec. Sec. Drilon[29] allows P.D. No. 957, as amended, to apply retroactively.
We find merit in petitioners contention.
Eugenio v. Exec. Sec. Drilon is inapplicable. It is not on all fours with the instant case. The issue in Eugenio was the
applicability of P.D. No. 957 to purchase agreements on lots entered into prior to its enactment where there was non-
payment of amortizations, and failure to develop the subdivision. We held therein that although P.D. No. 957 does not
provide for any retroactive application, nonetheless, the intent of the law of protecting the helpless citizens from the
manipulations and machinations of unscrupulous subdivision and condominium sellers justify its retroactive application
to contracts entered into prior to its enactment. Hence, we ruled that the non-payment of amortizations was justified
under Section 23 of the said decree in view of the failure of the subdivision owner to develop the subdivision project.
 Unlike Eugenio, non-development of the subdivision is not present in this case, nor any allegation of non-payment
of amortizations. Further, we have held in a subsequent case [30] that P.D. No. 957, as amended, cannot be applied
retroactively in view of the absence of any express provision on its retroactive application. Thus:

Article 4 of the Civil Code provides that laws shall have no retroactive effect, unless the contrary is provided. Thus, it is
necessary that an express provision for its retroactive application must be made in the law. There being no such
provision in both P.D. Nos. 957 and 1344, these decrees cannot be applied to a situation that occurred years before their
promulgation.

At any rate, our principal concern in this case is Section 31 of P.D. No. 957, an amendment introduced by P.D. No.
1216. Properly, the question should focus on the retroactivity of P.D. No. 1216 and not P.D. No. 957 per se.
We have examined the text of P.D. No. 1216 and nowhere do we find any clause or provision expressly providing for
its retroactive application. Basic is the rule that no statute, decree, ordinance, rule or regulation shall be given
retrospective effect unless explicitly stated. [31] Hence, there is no legal basis to hold that P.D. No. 1216 should apply
retroactively.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP
No. 51601 are REVERSED and SET ASIDE. The Decision of the HLURB dated January 20, 1999 sustaining that of its
Regional Office is AFFIRMED and REINSTATED. No pronouncement as to costs.
SO ORDERED.

TALA REALTY SERVICES CORP., INC., PEDRO B. AGUIRRE, REMEDIOS A. DUPASQUIER, DOLLY LIM, RUBENCITO M. DEL
MUNDO AND ELIZABETH H. PALMA, Petitioners,
vs.
BANCO FILIPINO SAVINGS & MORTGAGE BANK, Respondent.

DECISION

JARDELEZA, J.:

In G.R. No. 1883021 (2012) and the consolidated cases of G.R. Nos. 130088, 131469, 155171, 155201and166608 2 (2009),
we applied the rule of stare decisis to deny Banco Filipino's claims for reconveyance of various real properties based on a
trust agreement that we previously declared void in G.R. No. 137533 3(2002). This case raises the question of whether
Banco Filipino Savings & Mortgage Bank's (Banco Filipino) complaint for reconveyance in the proceedings below is
likewise precluded by stare decisis and conclusiveness of judgment.

On September 5, 1995, Banco Filipino filed a complaint 4 with the Regional Trial Court (RTC) of Manila against Tala Realty
Services Corporation, Inc. (Tala Realty) and the individual petitioners. This was one of the 17 reconveyance cases
instituted by Banco Filipino against Tala Realty covering properties located in different parts of the Philippines. 5

The complaint alleged that the properties were covered by a trust agreement between Banco Filipino, as trustor-
beneficiary, and Tala Realty, as trustee. The trust agreement was essentially a sale and lease-back arrangement wherein
Banco Filipino sold various properties to Tala Realty, including the one located in Sta. Cruz, Manila, while the latter
concurrently leased to Banco Filipino the same property for a period of 20 years, renewable for another 20 at the option
of Banco Filipino.6 Banco Filipino admitted that the purpose of the trust agreement was to "allow more flexibility in the
opening of branches and to enable the bank to acquire new branch [sites]," since at that time, Banco Filipino was
concerned about keeping within the 50% capital asset threshold for banks under the General Banking Act. 7 However,
sometime in August 1992, Tala Realty claimed the property for itself and threatened to eject Banco Filipino. 8
Petitioners moved to dismiss9 the complaint based on the following grounds: forum shopping, lack of cause of action,
and pari delicto. The RTC initially denied 10 the motion to dismiss but later reversed itself. 11 It ordered the dismissal of
the complaint against herein petitioners except Tala Realty and ordered the suspension of the proceedings in view of our
decision in G.R. No. 137533. 12 Banco Filipino moved for reconsideration which the RTC denied. 13 Consequently, Banco
Filipino elevated the case to the Court of Appeals (CA) via Rule 65. The CA granted the petition, 14 finding that the R TC
should have hypothetically admitted the truth of the factual allegations in the complaint-including the validity of the
trust agreement-when it ruled on the motion to dismiss. 15The CA also said that the proceedings should not have been
suspended because the matter resolved in G.R. No. 137533, which originated from an ejectment suit, is distinct and
separate from the subject matter of the case for reconveyance. 16 The CA subsequently denied petitioners' motion for
reconsideration. 17

Hence, this appeal under Rule 45 where petitioners principally claim that Banco Filipino's action for reconveyance is
already barred by stare decisis and conclusiveness of judgment considering the en banc decision in G.R. No. 137533, as
reiterated in the April 7, 2009 consolidated decision in G.R. Nos. 130088, 131469, 155171, 155201, and 166608 18 and the
June 27, 2012 decision in G.R No. 188302. 19 They also argue that Banco Filipino availed of the wrong remedy when they
filed a petition for certiorari with the CA instead of an ordinary appeal. In response, 20 Banco Filipino insists that it availed
of the correct mode of review and counters that G.R. No. 137533 cannot apply because it involved an ejectment suit,
which is distinct from its action for reconveyance. It cites the final rulings in G.R. Nos.
144700,21 130184,22 139166,23 16725524 and 14470525-which commonly held that the elements of forum shopping, litis
pendentia and res judicata were not present in Banco Filipino's various reconveyance cases-as the controlling
precedents.

II

In resolving this case, the sole determinative issue is whether Banco Filipino can recover the Sta. Cruz property based on
the same trust agreement which we declared void in G.R. No. 137533. 26 The issue, however, is not novel and has already
been conclusively resolved in both G.R. No. 188302 27 and the consolidated cases of G.R. Nos. 130088, 131469, 155171,
155201, and 166608.28 The facts of the present case, save for the specific parcel of land being disputed, are identical to
those obtaining in these two decisions. Therefore, the doctrines of stare decisis and conclusiveness of judgment warrant
the granting of the petition.

In G.R. No. 18830229 and G.R. Nos. 130088, 131469, 155171, 155201, and 166608, 30 we applied and extensively quoted
the ruling in G.R. No. 13753331 that the trust agreement between Banco Filipino and Tala Realty is void and cannot be
enforced, thus:

The Bank alleges that the sale and twenty-year lease of the disputed property were part of a larger implied trust
"warehousing agreement." Concomitant with this Court's factual finding that the 20-year contract governs the relations
between the parties, we find the Bank's allegation of circumstances surrounding its execution worthy of credence; the
Bank and Tala entered into contracts of sale and lease back of the disputed property and created an implied trust
"warehousing agreement" for the reconveyance of the property. In the eyes of the law, however, this implied trust is
inexistent and void for being contrary to law.

xxx

An implied trust could not have been formed between the Bank and Tala as this Court has held that "where the
purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor
of the party who is guilty of the fraud." x x x

x x x [T]he Bank cannot use the defense of nor seek enforcement of its alleged implied trust with Tala since its purpose
was contrary to law.1wphi1 As admitted by the Bank, it "warehoused" its branch site holdings to Tala to enable it to
pursue its expansion program and purchase new branch sites including its main branch in Makati, and at the same time
avoid the real prope1iy holdings limit under Sections 25(a) and 34 of the General Banking Act which it had already
reached. x x x

Clearly, the Bank was well aware of the limitations on its real estate holdings under the General Banking Act and that its
"warehousing agreement" with Tala was a scheme to circumvent the limitation. Thus, the Bank opted not to put the
agreement in writing and call a spade a spade, but instead phrased its right to reconveyance of the subject property at
any time as a "first preference to buy" at the "same transfer price." This arrangement which the Bank claims to be an
implied trust is contrary to law. Thus, while we find the sale and lease of the subject property genuine and binding
upon the parties, we cannot enforce the implied trust even assuming the parties intended to create it. In the words of
the Court in the Ramos case, "the courts will not assist the payor in achieving his improper purpose by enforcing a
resultant trust for him in accordance with the 'clean hands' doctrine." The Bank cannot thus demand reconveyance of
the property based on its alleged implied trust relationship with Tala.

xxx

The Bank and Tala are in pari delicto, thus, no affirmative relief should be given to one against the other. The Bank
should not be allowed to dispute the sale of its lands to Tala nor should Tala be allowed to further collect rent from the
Bank. The clean hands doctrine will not allow the creation or the use of a juridical relation such as a trust to subvert,
directly or indirectly, the law. Neither the Bank nor Tala came to court with clean hands; neither will obtain relief from
the court as one who seeks equity and justice must come to court with clean hands. 32 (Citations omitted; emphases
supplied.)

In both cases, we applied the time-honored principle of stare decisis et non quieta movere, which literally means "to
adhere to precedents, and not to unsettle things which are established," to settle the issue of whether Banco Filipino can
recover the properties subject of the void trust agreement. The rule of stare decisis is a bar to any attempt to re-litigate
the same issue where the same questions relating to the same event have been put forward by parties similarly situated
as in a previous case litigated and decided by a competent court. 33 Thus, the Court's ruling in G.R. No. 137533 34 regarding
the nullity of the trust agreement-the very same agreement which Banco Filipino seeks to enforce in the
proceedings a quo-applies with full force to the present case. Consequently, Banco Filipino's action for reconveyance of
the Sta. Cruz property based on the void trust agreement cannot prosper and must be dismissed for lack of cause of
action.

It is the Court's duty to follow the precedents laid down in G.R. No. 137533, 35 G.R. No. 18830236 and G.R. Nos. 130088,
131469, 155171, 155201 and 166608. 37 The doctrine of stare decisis is one of policy grounded on the necessity for
securing certainty and stability of judicial decisions. As well stated by Justice Cardozo in his book, The Nature of the
Judicial Process:

x x x It will not do to decide the same question one way between one set of litigants and the opposite way between
another.1wphi1 "If a group of cases involves the same point, the parties expect the same decision. It would be a gross
injustice to decide alternate cases on opposite principles. If a case was decided against me yesterday when I was
defendant, I shall look for the same judgment today if I am plaintiff. To decide differently would raise a feeling of
resentment and wrong in my breast; it would be an infringement, material and moral, of my rights." x x x Adherence to
precedent must then be the rule rather than the exception if litigants are to have faith in the evenhanded administration
of justice in the courts.38 (Emphasis supplied.)

In addition to the principle of stare decisis, the doctrine of conclusiveness of judgment, otherwise known as "preclusion
of issues" or "collateral estoppel,"39 bars the re-litigation of Banco Filipino's claim based on the void trust agreement. This
concept is embodied in the third paragraph of Rule 39, Section 47 of the Rules of Civil Procedure:

Section 47. Effect of judgments or final orders.-The effect of a judgment or final order rendered by a court of the
Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
xxx

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been
adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was
actually and necessarily included therein or necessary thereto. (Emphasis supplied.)

Conclusiveness of judgment is a species of res judicata and it applies where there is identity of parties in the first and
second cases, but there is no identity of causes of action. 40 Any right, fact, or matter in issue directly adjudicated or
necessarily involved in the determination of an action before a competent court in which judgment is rendered on the
merits is conclusively settled by the judgment therein, and cannot again be litigated between the parties and their privies
whether or not the claim, demand, purpose, or subject matter of the two actions is the same. 41 Thus, if a particular point
or question is in issue in the second action, and the judgment will depend on the determination of that particular point
or question, a former judgment between the same parties or their privies will be final and conclusive in the second if
that same point or question was in issue and adjudicated in the first suit. Identity of cause of action is not required but
mere1y identity of issue. 42

In this case, the rule on conclusiveness of judgment is squarely applicable because Banco Filipino's action for
reconveyance is solely based on a trust agreement which, it cannot be overemphasized, has long been declared void in a
previous action that involved both Tala Realty and Banco Filipino, i.e., G.R. No. 137533. In other words, the question on
the validity of the trust agreement has been finally and conclusively settled. Hence, this question cannot be raised again
even in a different proceeding involving the same parties. Although the action instituted in this case is one for
reconveyance, which is technically different from the ejectment suit originally instituted by Tala Realty in G.R. No.
137533, "the concept of conclusiveness of judgment still applies because under this principle, the identity of causes of
action is not required but merely identity of issues. Simply put, conclusiveness of judgment bars the relitigation of
particular facts or issues in another litigation between the same parties on a different claim or cause of action. " 43

Banco Filipino cannot rely on G.R. Nos. 144700,44 130184,45 139166,46 16725547 and 144705.48 In these cases, we ruled
that Banco Filipino did not violate the rule against forum shopping when it filed separate cases for reconveyance in
different trial courts. These rulings were based on the Court's finding that the elements of litis pendentia and res
judicata were not present. However, the concept of res judicata referred to in these cases is the one commonly
understood as "bar by prior judgment," which is enunciated in Rule 39, Section 47(b). 49 Bar by prior judgment is the
traditional formulation of res judicata, which requires the identity of parties, subject matter, and causes of action. 50 It is
this concept which is used in determining whether litis pendentia or forum shopping exists. In contrast, and as previously
discussed, res judicata as conclusiveness of judgment requires only identity of parties and of issues. These two kinds
of res judicata are legally distinct.

Accordingly, under the doctrine of res judicata as bar by prior judgment, Banco Filipino could not be prevented from
filing separate actions for reconveyance because each action involved a different subject matter, i.e., a different parcel of
land. Nonetheless, res judicata as conclusiveness of judgment would still apply to these different cases, as it does here,
insofar as they involve material facts or questions which were in issue and which have been adjudicated in a former
action.

WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
89155 are REVERSED and SET ASIDE. Civil Case No. 95-75214 before Branch 47 of the Regional Trial Court of Manila
is DISMISSED.

SO ORDERED.

Ting vs Ting
BENJAMIN G. TING,
Petitioner,
- versus -
CARMEN M. VELEZ-TING,
Respondent.

G.R. No. 166562

March 31, 2009

Facts:
Benjamin Ting and Carmen Velez-Ting first met in 1972 while they were classmates in medical school. They fell in love,
and they were wed on July 26, 1975 in Cebu City when respondent was already pregnant with their first child. On
October 21, 1993, after being married for more than 18 years to petitioner and while their youngest child was only two
years old, Carmen filed a verified petition before the RTC of Cebu City praying for the declaration of nullity of their
marriage based on Article 36 of the Family Code. She claimed that Benjamin suffered from psychological incapacity even
at the time of the celebration of their marriage, which, however, only became manifest thereafter.
Carmens allegations of Benjamins psychological incapacity consisted of the following manifestations:
1. Benjamins alcoholism, which adversely affected his family relationship and his profession;
2. Benjamins violent nature brought about by his excessive and regular drinking;
3. His compulsive gambling habit, as a result of which Benjamin found it necessary to sell the family car twice and the
property he inherited from his father in order to pay off his debts, because he no longer had money to pay the same; and
4. Benjamins irresponsibility and immaturity as shown by his failure and refusal to give regular financial support to his
family.

In his answer, Benjamin denied being psychologically incapacitated. He maintained that he is a respectable person, as his
peers would confirm. He also pointed out that it was he who often comforted and took care of their children, while
Carmen played mahjong with her friends twice a week. Both presented expert witnesses (psychiatrist) to refute each
others claim. RTC ruled in favor of the respondent declaring the marriage null and void.

Petitioner appealed to the CA. CA reversed RTCs decision. Respondent filed a motion for reconsideration, arguing that
the Molina guidelines should not be applied to this case

Issues:
1. Whether the CA violated the rule on stare decisis when it refused to follow the guidelines set forth under
the Santos and Molina cases,

2. Whether or not the CA correctly ruled that the requirement of proof of psychological incapacity for the declaration of
absolute nullity of marriage based on Article 36 of the Family Code has been liberalized,

3. Whether the CAs decision declaring the marriage between petitioner and respondent null and void is in accordance
with law and jurisprudence.

Held:
1. No. respondents argument that the doctrinal guidelines prescribed in Santos and Molina should not be applied
retroactively for being contrary to the principle of stare decisis is no longer new.

2. The Case involving the application of Article 36 must be treated distinctly and judged not on the basis of a priori
assumptions, predilections or generalizations but according to its own attendant facts. Courts should interpret the
provision on a case-to-case basis, guided by experience, the findings of experts and researchers in psychological
disciplines, and by decisions of church tribunals.

3. There is no evidence that adduced by respondent insufficient to prove that petitioner is psychologically unfit to
discharge the duties expected of him as a husband, and more particularly, that he suffered from such psychological
incapacity as of the date of the marriage eighteen (18) years ago.
G.R. NOS. 178382-83

CONTINENTAL MICRONESIA, INC., Petitioner,

vs.
JOSEPH BASSO, Respondent.

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules of Court assailing the Decision 2dated May
23, 2006 and Resolution3 dated June 19, 2007 of the Court of Appeals in the consolidated cases CA-G.R. SP No. 83938
and CA-G.R. SP No. 84281. These assailed Decision and Resolution set aside the Decision 4dated November 28, 2003 of
the National Labor Relations Commission (NLRC) declaring Joseph Basso's (Basso) dismissal illegal, and ordering the
payment of separation pay as alternative to reinstatement and full backwages until the date of the Decision.

The Facts

Petitioner Continental Micronesia, Inc. (CMI) is a foreign corporation organized and e:xisting under the laws of and
domiciled in the United States of America (US). It is licensed to do business in the Philippines. 5 Basso, a US citizen,
resided in the Philippines prior to his death. 6

During his visit to Manila in 1990, Mr. Keith R. Braden (Mr. Braden), Managing Director-Asia of Continental Airlines, Inc.
(Continental), offered Basso the position of General Manager of the Philippine Branch of Continental. Basso accepted the
offer.7

It was not until much later that Mr. Braden, who had since returned to the US, sent Basso the employment
contract8 dated February 1, 1991, which Mr. Braden had already signed. Basso then signed the employment contract and
returned it to Mr. Braden as instructed.

On November 7, 1992, CMI took over the Philippine operations of Continental, with Basso retaining his position as
General Manager.9

On December 20, 1995, Basso received a letter from Mr. Ralph Schulz (Mr. Schulz), who was then CMIs Vice President of
Marketing and Sales, informing Basso that he has agreed to work in CMI as a consultant on an "as needed basis" effective
February 1, 1996 to July 31, 1996. The letter also informed Basso that: (1) he will not receive any monetary
compensation but will continue being covered by the insurance provided by CMI; (2) he will enjoy travel privileges; and
(3) CMI will advance Php1,140,000.00 for the payment of housing lease for 12 months. 10

On January 11, 1996, Basso wrote a counter-proposal 11 to Mr. Schulz regarding his employment status in CMI. On March
14, 1996, Basso wrote another letter addressed to Ms. Marty Woodward (Ms. Woodward) of CMIs Human Resources
Department inquiring about the status of his employment. 12 On the same day, Ms. Woodward responded that pursuant
to the employment contract dated February 1, 1991, Basso could be terminated at will upon a thirty-day notice. This
notice was allegedly the letter Basso received from Mr. Schulz on December 20, 1995. Ms. Woodward also reminded
Basso of the telephone conversation between him, Mr. Schulz and Ms. Woodward on December 19, 1995, where they
informed him of the companys decision to relieve him as General Manager. Basso, instead, was offered the position of
consultant to CMI. Ms. Woodward also informed Basso that CMI rejected his counter-proposal and, thus, terminated his
employment effective January 31, 1996. CMI offered Basso a severance pay, in consideration of the Php1,140,000.00
housing advance that CMI promised him13Basso filed a Complaint for Illegal Dismissal with Moral and Exemplary
Damages against CMI on December 19, 1996. 14 Alleging the presence of foreign elements, CMI filed a Motion to
Dismiss15 dated February 10, 1997 on the ground of lack of jurisdiction over the person of CMI and the subject matter of
the controversy. In an Order16dated August 27, 1997, the Labor Arbiter granted the Motion to Dismiss. Applying the
doctrine of lex loci contractus, the Labor Arbiter held that the terms and provisions of the employment contract show
that the parties did not intend to apply our Labor Code (Presidential Decree No. 442). The Labor Arbiter also held that no
employer-employee relationship existed between Basso and the branch office of CMI in the Philippines, but between
Basso and the foreign corporation itself.

On appeal, the NLRC remanded the case to the Labor Arbiter for the determination of certain facts to settle the issue on
jurisdiction. NLRC ruled that the issue on whether the principle of lex loci contractus or lex loci celebrationis should apply
has to be further threshed out.17

Labor Arbiters Ruling

Labor Arbiter Madjayran H. Ajan in his Decision 18 dated September 24, 1999 dismissed the case for lack of merit and
jurisdiction.

The Labor Arbiter agreed with CMI that the employment contract was executed in the US "since the letter-offer was
under the Texas letterhead and the acceptance of Complainant was returned there." 19 Thus, applying the doctrine of lex
loci celebrationis, US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled that the parties did not intend
to apply Philippine laws, thus:

Although the contract does not state what law shall apply, it is obvious that Philippine laws were not written into it. More
specifically, the Philippine law on taxes and the Labor Code were not intended by the parties to apply, otherwise Par. 7 on
the payment by Complainant U.S. Federal and Home State income taxes, and Pars. 22/23 on termination by 30-day prior
notice, will not be there. The contract was prepared in contemplation of Texas or U.S. laws where Par. 7 is required and
Pars. 22/23 is allowed.20

The Labor Arbiter also ruled that Basso was terminated for a valid cause based on the allegations of CMI that Basso
committed a series of acts that constitute breach of trust and loss of confidence. 21

The Labor Arbiter, however, found CMI to have voluntarily submitted to his offices jurisdiction. CMI participated in the
proceedings, submitted evidence on the merits of the case, and sought affirmative relief through a motion to dismiss. 22

NLRCs Ruling

On appeal, the NLRC Third Division promulgated its Decision 23 dated November 28, 2003, the decretal portion of which
reads:

WHEREFORE, the decision dated 24 September 1999 is VACATED and SET ASIDE. Respondent CMI is ordered to pay
complainant the amount of US$5,416.00 for failure to comply with the due notice requirement. The other claims are
dismissed.

SO ORDERED.24

The NLRC did not agree with the pronouncement of the Labor Arbiter that his office has no jurisdiction over the
controversy. It ruled that the Labor Arbiter acquired jurisdiction over the case when CMI voluntarily submitted to his
offices jurisdiction by presenting evidence, advancing arguments in support of the legality of its acts, and praying for
reliefs on the merits of the case.25

On the merits, the NLRC agreed with the Labor Arbiter that Basso was dismissed for just and valid causes on the ground
of breach of trust and loss of confidence. The NLRC ruled that under the applicable rules on loss of trust and confidence
of a managerial employee, such as Basso, mere existence of a basis for believing that such employee has breached the
trust of his employer suffices. However, the NLRC found that CMI denied Basso the required due process notice in his
dismissal.26
Both CMI and Basso filed their respective Motions for Reconsideration dated January 15, 2004 27 and January 8,
2004.28 Both motions were dismissed in separate Resolutions dated March 15, 2004 29 and February 27,
2004,30respectively.

Basso filed a Petition for Certiorari dated April 16, 2004 with the Court of Appeals docketed as CA-G.R. SP No.
83938.31 Basso imputed grave abuse of discretion on the part of the NLRC in ruling that he was validly dismissed. CMI
filed its own Petition for Certiorari dated May 13, 2004 docketed as CA-G.R. SP No. 84281, 32 alleging that the NLRC
gravely abused its discretion when it assumed jurisdiction over the person of CMI and the subject matter of the case.

In its Resolution dated October 7, 2004, the Court of Appeals consolidated the two cases 33 and ordered the parties to file
their respective Memoranda.

The Court of Appeals Decision

The Court of Appeals promulgated the now assailed Decision 34 dated May 23, 2006, the relevant dispositive portion of
which reads:

WHEREFORE, the petition of Continental docketed as CA-G.R. SP No. 84281 is DENIED DUE COURSE and DISMISSED.

On the other hand the petition of Basso docketed as CA-G.R. SP No. 83938 is GIVEN DUE COURSE and GRANTED, and
accordingly, the assailed Decision dated November 28, 2003 and Resolution dated February 27, 2004 of the NLRC are SET
ASIDE and VACATED. Instead judgment is rendered hereby declaring the dismissal of Basso illegal and ordering
Continental to pay him separation pay equivalent to one (1) month pay for every year of service as an alternative to
reinstatement. Further, ordering Continental to pay Basso his full backwages from the date of his said illegal dismissal
until date of this decision. The claim for moral and exemplary damages as well as attorneys fees are dismissed. 35

The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over the subject matter of the case and
over the parties. The Court of Appeals explained that jurisdiction over the subject matter of the action is determined by
the allegations of the complaint and the law. Since the case filed by Basso is a termination dispute that is "undoubtedly
cognizable by the labor tribunals", the Labor Arbiter and the NLRC had jurisdiction to rule on the merits of the case. On
the issue of jurisdiction over the person of the parties, who are foreigners, the Court of Appeals ruled that jurisdiction
over the person of Basso was acquired when he filed the complaint for illegal dismissal, while jurisdiction over the
person of CMI was acquired through coercive process of service of summons to its agent in the Philippines. The Court of
Appeals also agreed that the active participation of CMI in the case rendered moot the issue on jurisdiction.

On the merits of the case, the Court of Appeals declared that CMI illegally dismissed Basso. The Court of Appeals found
that CMIs allegations of loss of trust and confidence were not established. CMI "failed to prove its claim of the incidents
which were its alleged bases for loss of trust or confidence." 36 While managerial employees can be dismissed for loss of
trust and confidence, there must be a basis for such loss, beyond mere whim or caprice.

After the parties filed their Motions for Reconsideration,37 the Court of Appeals promulgated Resolution 38 dated June 19,
2007 denying CMIs motion, while partially granting Bassos as to the computation of backwages.

Hence, this petition, which raises the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REVIEWING THE FACTUAL FINDINGS OF THE NLRC INSTEAD OF
LIMITING ITS INQUIRY INTO WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION.

II.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE LABOR ARBITER AND THE NLRC HAD
JURISDICTION TO HEAR AND TRY THE ILLEGAL DISMISSAL CASE.

III.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT BASSO WAS NOT VALIDLY DISMISSED ON THE
GROUND OF LOSS OF TRUST OR CONFIDENCE.

We begin with the second issue on the jurisdiction of the Labor Arbiter and the NLRC in the illegal dismissal case. The
first and third issues will be discussed jointly.

The labor tribunals had jurisdiction

over the parties and the subject
matter of the case.

CMI maintains that there is a conflict-of-laws issue that must be settled to determine proper jurisdiction over the parties
and the subject matter of the case. It also alleges that the existence of foreign elements calls for the application of US
laws and the doctrines of lex loci celebrationis (the law of the place of the ceremony), lex loci contractus (law of the
place where a contract is executed), and lex loci intentionis (the intention of the parties as to the law that should govern
their agreement). CMI also invokes the application of the rule of forum non conveniens to determine the propriety of the
assumption of jurisdiction by the labor tribunals.

We agree with CMI that there is a conflict-of-laws issue that needs to be resolved first. Where the facts establish the
existence of foreign elements, the case presents a conflict-of-laws issue. 39 The foreign element in a case may appear in
different forms, such as in this case, where one of the parties is an alien and the other is domiciled in another state.

In Hasegawa v. Kitamura,40 we stated that in the judicial resolution of conflict-of-laws problems, three consecutive phases
are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. In resolving the conflicts
problem, courts should ask the following questions:

1. "Under the law, do I have jurisdiction over the subject matter and the parties to this case?

2. "If the answer is yes, is this a convenient forum to the parties, in light of the facts?

3. "If the answer is yes, what is the conflicts rule for this particular problem?

4. "If the conflicts rule points to a foreign law, has said law been properly pleaded and proved by the one
invoking it?

5. "If so, is the application or enforcement of the foreign law in the forum one of the basic exceptions to the
application of foreign law? In short, is there any strong policy or vital interest of the forum that is at stake in this
case and which should preclude the application of foreign law? 41

Jurisdiction is defined as the power and authority of the courts to hear, try and decide cases. Jurisdiction over the subject
matter is conferred by the Constitution or by law and by the material allegations in the complaint, regardless of whether
or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein. 42It cannot be acquired through
a waiver or enlarged by the omission of the parties or conferred by the acquiescence of the court. 43 That the
employment contract of Basso was replete with references to US laws, and that it originated from and was returned to
the US, do not automatically preclude our labor tribunals from exercising jurisdiction to hear and try this case.

This case stemmed from an illegal dismissal complaint. The Labor Code, under Article 217, clearly vests original and
exclusive jurisdiction to hear and decide cases involving termination disputes to the Labor Arbiter.
Hence, the Labor Arbiter and the NLRC have jurisdiction over the subject matter of the case.

As regards jurisdiction over the parties, we agree with the Court of Appeals that the Labor Arbiter acquired jurisdiction
over the person of Basso, notwithstanding his citizenship, when he filed his complaint against CMI. On the other hand,
jurisdiction over the person of CMI was acquired through the coercive process of service of summons. We note that CMI
never denied that it was served with summons. CMI has, in fact, voluntarily appeared and participated in the
proceedings before the courts. Though a foreign corporation, CMI is licensed to do business in the Philippines and has a
local business address here. The purpose of the law in requiring that foreign corporations doing business in the country
be licensed to do so, is to subject the foreign corporations to the jurisdiction of our courts. 44

Considering that the Labor Arbiter and the NLRC have jurisdiction over the parties and the subject matter of this case,
these tribunals may proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to
a foreign forum, this being an exercise of sovereign prerogative of the country where the case is filed. 45

The next question is whether the local forum is the convenient forum in light of the facts of the case. CMI contends that
a Philippine court is an inconvenient forum.

We disagree.

Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws case may assume jurisdiction if it
chooses to do so, provided, that the following requisites are met: (1) that the Philippine Court is one to which the parties
may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and
the facts; and (3) that the Philippine Court has or is likely to have power to enforce its decision. 46All these requisites are
present here.

Basso may conveniently resort to our labor tribunals as he and CMI had physical presence in the Philippines during the
duration of the trial. CMI has a Philippine branch, while Basso, before his death, was residing here.

Thus, it could be reasonably expected that no extraordinary measures were needed for the parties to make
arrangements in advocating their respective cases.

The labor tribunals can make an intelligent decision as to the law and facts. The incident subject of this case (i.e.
dismissal of Basso) happened in the Philippines, the surrounding circumstances of which can be ascertained without
having to leave the Philippines. The acts that allegedly led to loss of trust and confidence and Bassos eventual dismissal
were committed in the Philippines. As to the law, we hold that Philippine law is the proper law of the forum, as we shall
discuss shortly. Also, the labor tribunals have the power to enforce their judgments because they acquired jurisdiction
over the persons of both parties.

Our labor tribunals being the convenient fora, the next question is what law should apply in resolving this case.

The choice-of-law issue in a conflict-of-laws case seeks to answer the following important questions: (1) What legal
system should control a given situation where some of the significant facts occurred in two or more states; and (2) to
what extent should the chosen legal system regulate the situation. 47 These questions are entirely different from the
question of jurisdiction that only seeks to answer whether the courts of a state where the case is initiated have
jurisdiction to enter a judgment.48 As such, the power to exercise jurisdiction does not automatically give a state
constitutional authority to apply forum law. 49

CMI insists that US law is the applicable choice-of-law under the principles of lex loci celebrationis and lex loci contractus.
It argues that the contract of employment originated from and was returned to the US after Basso signed it, and hence,
was perfected there. CMI further claims that the references to US law in the employment contract show the parties
intention to apply US law and not ours. These references are:
 a. Foreign station allowance of forty percent (40%) using the "U.S. State Department Index, the base being
Washington, D.C."

b. Tax equalization that made Basso responsible for "federal and any home state income taxes."

c. Hardship allowance of fifteen percent (15%) of base pay based upon the "U.S. Department of State Indexes of
living costs abroad."

d. The employment arrangement is "one at will, terminable by either party without any further liability on thirty
days prior written notice."50

CMI asserts that the US law on labor relations particularly, the US Railway Labor Act sanctions termination-at-will
provisions in an employment contract. Thus, CMI concludes that if such laws were applied, there would have been no
illegal dismissal to speak of because the termination-at-will provision in Bassos employment contract would have been
perfectly valid.

We disagree.

In Saudi Arabian Airlines v. Court of Appeals,51 we emphasized that an essential element of conflict rules is the indication
of a "test" or "connecting factor" or "point of contact". Choice-of-law rules invariably consist of a factual relationship
(such as property right, contract claim) and a connecting fact or point of contact, such as the situs of the res, the place of
celebration, the place of performance, or the place of wrongdoing. Pursuant to Saudi Arabian Airlines, we hold that the
"test factors," "points of contact" or "connecting factors" in this case are the following:

(1) The nationality, domicile or residence of Basso;

(2) The seat of CMI;

(3) The place where the employment contract has been made, the locus actus;

(4) The place where the act is intended to come into effect, e.g., the place of performance of contractual duties;

(5) The intention of the contracting parties as to the law that should govern their agreement, the lex loci
intentionis; and

(6) The place where judicial or administrative proceedings are instituted or done. 52

Applying the foregoing in this case, we conclude that Philippine law is the applicable law. Basso, though a US citizen, was
a resident here from the time he was hired by CMI until his death during the pendency of the case. CMI, while a foreign
corporation, has a license to do business in the Philippines and maintains a branch here, where Basso was hired to work.
The contract of employment was negotiated in the Philippines. A purely consensual contract, it was also perfected in the
Philippines when Basso accepted the terms and conditions of his employment as offered by CMI. The place of
performance relative to Bassos contractual duties was in the Philippines. The alleged prohibited acts of Basso that
warranted his dismissal were committed in the Philippines.

Clearly, the Philippines is the state with the most significant relationship to the problem. Thus, we hold that CMI and
Basso intended Philippine law to govern, notwithstanding some references made to US laws and the fact that this
intention was not expressly stated in the contract. We explained in Philippine Export and Foreign Loan Guarantee
Corporation v. V. P. Eusebio Construction, Inc.53 that the law selected may be implied from such factors as substantial
connection with the transaction, or the nationality or domicile of the parties. 54 We cautioned, however, that while
Philippine courts would do well to adopt the first and most basic rule in most legal systems, namely, to allow the parties
to select the law applicable to their contract, the selection is subject to the limitation that it is not against the law,
morals, or public policy of the forum.55

Similarly, in Bank of America, NT & SA v. American Realty Corporation, 56 we ruled that a foreign law, judgment or contract
contrary to a sound and established public policy of the forum shall not be applied. Thus:

Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or
residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of Conflict of Laws. 57

Termination-at-will is anathema to the public policies on labor protection espoused by our laws and Constitution, which
dictates that no worker shall be dismissed except for just and authorized causes provided by law and after due process
having been complied with.58 Hence, the US Railway Labor Act, which sanctions termination-at-will, should not be
applied in this case.

Additionally, the rule is that there is no judicial notice of any foreign law. As any other fact, it must be alleged and
proved.59 If the foreign law is not properly pleaded or proved, the presumption of identity or similarity of the foreign law
to our own laws, otherwise known as processual presumption, applies. Here, US law may have been properly pleaded
but it was not proved in the labor tribunals.

Having disposed of the issue on jurisdiction, we now rule on the first and third issues.

The Court of Appeals may review the

factual findings of the NLRC in a
Rule 65 petition.

CMI submits that the Court of Appeals overstepped the boundaries of the limited scope of its certiorari jurisdiction when
instead of ruling on the existence of grave abuse of discretion, it proceeded to pass upon the legality and propriety of
Bassos dismissal. Moreover, CMI asserts that it was error on the part of the Court of Appeals to re-evaluate the evidence
and circumstances surrounding the dismissal of Basso.

We disagree.

The power of the Court of Appeals to review NLRC decisions via a Petition for Certiorari under Rule 65 of the Revised
Rules of Court was settled in our decision in St. Martin Funeral Home v. NLRC. 60 The general rule is that certiorari does
not lie to review errors of judgment of the trial court, as well as that of a quasi-judicial tribunal. In certiorari proceedings,
judicial review does not go as far as to examine and assess the evidence of the parties and to weigh their probative
value.61 However, this rule admits of exceptions. In Globe Telecom, Inc. v. Florendo-Flores, 62 we stated:

In the review of an NLRC decision through a special civil action for certiorari, resolution is confined only to issues of
jurisdiction and grave abuse of discretion on the part of the labor tribunal. Hence, the Court refrains from reviewing
factual assessments of lower courts and agencies exercising adjudicative functions, such as the NLRC.

Occasionally, however, the Court is constrained to delve into factual matters where, as in the instant case, the findings of
the NLRC contradict those of the Labor Arbiter.

In this instance, the Court in the exercise of its equity jurisdiction may look into the records of the case and reexamine
the questioned findings. As a corollary, this Court is clothed with ample authority to review matters, even if they are not
assigned as errors in their appeal, if it finds that their consideration is necessary to arrive at a just decision of the case.
The same principles are now necessarily adhered to and are applied by the Court of Appeals in its expanded jurisdiction
over labor cases elevated through a petition for certiorari; thus, we see no error on its part when it made anew a factual
determination of the matters and on that basis reversed the ruling of the NLRC. 63 (Citations omitted.)
Thus, the Court of Appeals may grant the petition when the factual findings complained of are not supported by the
evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the findings of
the NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a just decision of the case. 64 To make
these findings, the Court of Appeals necessarily has to look at the evidence and make its own factual determination. 65

Since the findings of the Labor Arbiter differ with that of the NLRC, we find that the Court of Appeals correctly exercised
its power to review the evidence and the records of the illegal dismissal case.

Basso was illegally dismissed.

It is of no moment that Basso was a managerial employee of CMI. Managerial employees enjoy security of tenure and
the right of the management to dismiss must be balanced against the managerial employees right to security of tenure,
which is not one of the guaranties he gives up. 66

In Apo Cement Corporation v. Baptisma,67 we ruled that for an employer to validly dismiss an employee on the ground of
loss of trust and confidence under Article 282 (c) of the Labor Code, the employer must observe the following guidelines:
1) loss of confidence should not be simulated; 2) it should not be used as subterfuge for causes which are improper,
illegal or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it
must be genuine, not a mere afterthought to justify earlier action taken in bad faith. More importantly, it must be based
on a willful breach of trust and founded on clearly established facts.

We agree with the Court of Appeals that the dismissal of Basso was not founded on clearly established facts and
evidence sufficient to warrant dismissal from employment. While proof beyond reasonable doubt is not required to
establish loss of trust and confidence, substantial evidence is required and on the employer rests the burden to establish
it.68 There must be some basis for the loss of trust, or that the employer has reasonable ground to believe that the
employee is responsible for misconduct, which renders him unworthy of the trust and confidence demanded by his
position.69

CMI alleges that Basso committed the following:

(1) Basso delegated too much responsibility to the General Sales Agent and relied heavily on its judgments. 70

(2) Basso excessively issued promotional tickets to his friends who had no direct business with CMI. 71

(3) The advertising agency that CMI contracted had to deal directly with Guam because Basso was hardly
available.72 Mr. Schulz discovered that Basso exceeded the advertising budget by $76,000.00 in 1994 and by
$20,000.00 in 1995.73

(4) Basso spent more time and attention to his personal businesses and was reputed to own nightclubs in the
Philippines.74

(5) Basso used free tickets and advertising money to promote his personal business, 75 such as a brochure that
jointly advertised one of Bassos nightclubs with CMI.

We find that CMI failed to discharge its burden to prove the above acts. CMI merely submitted affidavits of its officers,
without any other corroborating evidence. Basso, on the other hand, had adequately explained his side. On the
advertising agency and budget issues raised by CMI, he explained that these were blatant lies as the advertising needs of
CMI were centralized in its Guam office and the Philippine office was not authorized to deal with CMIs advertising
agency, except on minor issues.76 Basso further stated that under CMIs existing policy, ninety percent (90%) of the
advertising decisions were delegated to the advertising firm of McCann- Ericsson in Japan and only ten percent (10%)
were left to the Philippine office.77 Basso also denied the allegations of owning nightclubs and promoting his personal
businesses and explained that it was illegal for foreigners in the Philippines to engage in retail trade in the first place.
Apart from these accusations, CMI likewise presented the findings of the audit team headed by Mr. Stephen D. Goepfert,
showing that "for the period of 1995 and 1996, personal passes for Continental and other airline employees were noted
(sic) to be issued for which no service charge was collected." 78 The audit cited the trip pass log of a total of 10 months.
The trip log does not show, however, that Basso caused all the ticket issuances.

More, half of the trips in the log occurred from March to July of 1996, 79 a period beyond the tenure of Basso. Basso was
terminated effectively on January 31, 1996 as indicated in the letter of Ms. Woodward. 80

CMI also accused Basso of making "questionable overseas phone calls". Basso, however, adequately explained in his
Reply81 that the phone calls to Italy and Portland, USA were made for the purpose of looking for a technical maintenance
personnel with US Federal Aviation Authority qualifications, which CMI needed at that time. The calls to the US were also
made in connection with his functions as General Manager, such as inquiries on his tax returns filed in Nevada. Basso
also explained that the phone lines82 were open direct lines that all personnel were free to use to make direct long
distance calls.83

Finally, CMI alleged that Basso approved the disbursement of Php80,000.00 to cover the transfer fee of the Manila Polo
Club share from Mr. Kenneth Glover, the previous General Manager, to him. CMI claimed that "nowhere in the said
contract was it likewise indicated that the Manila Polo Club share was part of the compensation package given by CMI to
Basso."84 CMIs claims are not credible. Basso explained that the Manila Polo Club share was offered to him as a bonus to
entice him to leave his then employer, United Airlines. A letter from Mr. Paul J. Casey, former president of Continental,
supports Basso.85 In the letter, Mr. Casey explained:

As a signing bonus, and a perk to attract Mr. Basso to join Continental Airlines, he was given the Manila Polo Club share
and authorized to have the share re-issued in his name. In addition to giving Mr. Basso the Manila Polo Club share,
Continental agreed to pay the dues for a period of three years and this was embodied in his contract with Continental.
This was all done with my knowledge and approval. 86

Clause 14 of the employment contract also states:

Club Memberships: The Company will locally pay annual dues for membership in a club in Manila that your immediate
supervisor and I agree is of at least that value to Continental through you in your role as our General Manager for the
Philippines.87

Taken together, the above pieces of evidence suggest that the Manila Polo Club share was part of Bassos compensation
package and thus he validly used company funds to pay for the transfer fees. If doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. 88

Finally, CMI violated procedural due process in terminating Basso. In King of Kings Transport, Inc. v. Mamac 89 we detailed
the procedural due process steps in termination of employment:

To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for
termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of
assistance that management must accord to the employees to enable them to prepare adequately for their
defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give
the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather
data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to
enable the employees to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A
general description of the charge will not suffice. Lastly, the notice should specifically mention which company
 rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the
employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein
the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them;
(2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the
management.

During the hearing or conference, the employees are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by
the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a
written notice of termination indicating that: (1) all circumstances involving the charge against the employees
have been considered; and (2) grounds have been established to justify the severance of their employment.
(Emphasis in original.)

Here, Mr. Schulzs and Ms. Woodwards letters dated December 19, 1995 and March 14, 1996, respectively, are not one
of the valid twin notices. Neither identified the alleged acts that CMI now claims as bases for Bassos termination. Ms.
Woodwards letter even stressed that the original plan was to remove Basso as General Manager but with an offer to
make him consultant. It was inconsistent of CMI to declare Basso as unworthy of its trust and confidence and, in the
same breath, offer him the position of consultant. As the Court of Appeals pointed out:

But mark well that Basso was clearly notified that the sole ground for his dismissal was the exercise of the termination at
will clause in the employment contract. The alleged loss of trust and confidence claimed by Continental appears to be a
mere afterthought belatedly trotted out to save the day. 90

Basso is entitled to separation pay and full backwages.

Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual
reinstatement.

Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of
service should be awarded as an alternative.1wphi1 The payment of separation pay is in addition to payment of
backwages.91 In the case of Basso, reinstatement is no longer possible since he has already passed away. Thus, Bassos
separation pay with full backwages shall be paid to his heirs.

As to the computation of backwages, we agree with CMI that Basso was entitled to backwages only up to the time he
reached 65 years old, the compulsory retirement age under the law. 92 This is our consistent ruling.93

When Basso was illegally dismissed on January 31, 1996, he was already 58 years old. 94 He turned 65 years old on
October 2, 2002. Since backwages are granted on grounds of equity for earnings lost by an employee due to his illegal
dismissal,95 Basso was entitled to backwages only for the period he could have worked had he not been illegally
dismissed, i.e. from January 31, 1996 to October 2, 2002.

WHEREFORE, premises considered, the Decision of the Court of Appeals dated May 23, 2006 and Resolution dated June
19, 2007 in the consolidated cases CA-G.R. SP No. 83938 and CA-G.R. SP No. 84281 are

AFFIRMED, with MODIFICATION as to the award of backwages. Petitioner Continental Micronesia, Inc. is hereby ordered
to pay Respondent Joseph Bassos heirs: 1) separation pay equivalent to one (1) month pay for every year of service, and
2) full backwages from January 31, 1996, the date of his illegal dismissal, to October 2, 2002, the date of his compulsory
retirement age.

SO ORDERED.

Del soccoro v. Van Wilsem

PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside
the Orders[1]dated February 19, 2010 and September 1, 2010, respectively, of the Regional Trial Court of Cebu City (RTC-
Cebu), which dismissed the criminal case entitled People of the Philippines v. Ernst Johan Brinkman Van
Wilsem, docketed as Criminal Case No. CBU-85503, for violation of Republic Act (R.A.) No. 9262, otherwise known as the
Anti-Violence Against Women and Their Children Act of 2004.

The following facts are culled from the records:

Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman Van Wilsem contracted marriage in Holland on
September 25, 1990.[2] On January 19, 1994, they were blessed with a son named Roderigo Norjo Van Wilsem, who at
the time of the filing of the instant petition was sixteen (16) years of age. [3]

Unfortunately, their marriage bond ended on July 19, 1995 by virtue of a Divorce Decree issued by the appropriate Court
of Holland.[4] At that time, their son was only eighteen (18) months old. [5] Thereafter, petitioner and her son came home
to the Philippines.[6]

According to petitioner, respondent made a promise to provide monthly support to their son in the amount of Two
Hundred Fifty (250) Guildene (which is equivalent to Php17,500.00 more or less). [7] However, since the arrival of
petitioner and her son in the Philippines, respondent never gave support to the son, Roderigo. [8]

Not long thereafter, respondent came to the Philippines and remarried in Pinamungahan, Cebu, and since then, have
been residing thereat.[9] Respondent and his new wife established a business known as Paree Catering, located at
Barangay Tajao, Municipality of Pinamungahan, Cebu City. [10] To date, all the parties, including their son, Roderigo, are
presently living in Cebu City. [11]

On August 28, 2009, petitioner, through her counsel, sent a letter demanding for support from respondent. However,
respondent refused to receive the letter. [12]

Because of the foregoing circumstances, petitioner filed a complaint-affidavit with the Provincial Prosecutor of Cebu City
against respondent for violation of Section 5, paragraph E(2) of R.A. No. 9262 for the latter's unjust refusal to support his
minor child with petitioner.[13] Respondent submitted his counter-affidavit thereto, to which petitioner also submitted her
reply-affidavit.[14] Thereafter, the Provincial Prosecutor of Cebu City issued a Resolution recommending the filing of an
information for the crime charged against herein respondent.

The information, which was filed with the RTC-Cebu and raffled to Branch 20 thereof, states that:

That sometime in the year 1995 and up to the present, more or less, in the Municipality of Minglanilla, Province of Cebu,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there wilfully,
unlawfully and deliberately deprive, refuse and still continue to deprive his son RODERIGO NORJO VAN WILSEM, a
fourteen (14) year old minor, of financial support legally due him, resulting in economic abuse to the victim.
CONTRARY TO LAW.[15]

Upon motion and after notice and hearing, the RTC-Cebu issued a Hold Departure Order against respondent. [16]
Consequently, respondent was arrested and, subsequently, posted bail. [17]

Petitioner also filed a Motion/Application of Permanent Protection Order to which respondent filed his Opposition.
[18]
Pending the resolution thereof, respondent was arraigned. [19]

Subsequently, without the RTC-Cebu having resolved the application of the protection order, respondent filed a Motion
to Dismiss on the ground of: (1) lack of jurisdiction over the offense charged; and (2) prescription of the crime charged. [20]

On February 19, 2010, the RTC-Cebu issued the herein assailed Order, [21] dismissing the instant criminal case against
respondent on the ground that the facts charged in the information do not constitute an offense with respect to the
respondent who is an alien, the dispositive part of which states:

WHEREFORE, the Court finds that the facts charged in the information do not constitute an offense with respect to the
accused, he being an alien, and accordingly, orders this case DISMISSED.

The bail bond posted by accused Ernst Johan Brinkman Van Wilsem for his provisional liberty is hereby cancelled (sic)
and ordered released.

SO ORDERED.

Cebu City, Philippines, February 19, 2010. [22]

Thereafter, petitioner filed her Motion for Reconsideration thereto reiterating respondent's obligation to support their
child under Article 195[23] of the Family Code, thus, failure to do so makes him liable under R.A. No. 9262 which "equally
applies to all persons in the Philippines who are obliged to support their minor children regardless of the obligor's
nationality."[24]

On September 1, 2010, the lower court issued an Order [25] denying petitioner's Motion for Reconsideration and
reiterating its previous ruling. Thus:

x x x The arguments therein presented are basically a rehash of those advanced earlier in the memorandum of the
prosecution. Thus, the court hereby reiterates its ruling that since the accused is a foreign national he is not subject to
our national law (The Family Code) in regard to a parent's duty and obligation to give support to his child. Consequently,
he cannot be charged of violating R.A. 9262 for his alleged failure to support his child. Unless it is conclusively
established that R.A. 9262 applies to a foreigner who fails to give support to his child, notwithstanding that he is not
bound by our domestic law which mandates a parent to give such support, it is the considered opinion of the court that
no prima facie case exists against the accused herein, hence, the case should be dismissed.

WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.

SO ORDERED.

Cebu City, Philippines, September 1, 2010. [26]

Hence, the present Petition for Review on Certiorari raising the following issues:
 1. Whether or not a foreign national has an obligation to support his minor child under Philippine law; and

2. Whether or not a foreign national can be held criminally liable under R.A. No. 9262 for his unjustified failure to
support his minor child.[27]

At the outset, let it be emphasized that We are taking cognizance of the instant petition despite the fact that the same
was directly lodged with the Supreme Court, consistent with the ruling in Republic v. Sunvar Realty Development
Corporation,[28] which lays down the instances when a ruling of the trial court may be brought on appeal directly to the
Supreme Court without violating the doctrine of hierarchy of courts, to wit:

x x x Nevertheless, the Rules do not prohibit any of the parties from filing a Rule 45 Petition with this Court, in case only
questions of law are raised or involved. This latter situation was one that petitioners found themselves in when they
filed the instant Petition to raise only questions of law.

In Republic v. Malabanan, the Court clarified the three modes of appeal from decisions of the RTC, to wit: (1) by ordinary
appeal or appeal by writ of error under Rule 41, whereby judgment was rendered in a civil or criminal action by the RTC
in the exercise of its original jurisdiction; (2) by a petition for review under Rule 42, whereby judgment was rendered by
the RTC in the exercise of its appellate jurisdiction; and (3) by a petition for review on certiorari before the Supreme
Court under Rule 45. "The first mode of appeal is taken to the [Court of Appeals] on questions of fact or mixed questions
of fact and law. The second mode of appeal is brought to the CA on questions of fact, of law, or mixed questions of fact
and law. The third mode of appeal is elevated to the Supreme Court only on questions of law." (Emphasis supplied)

There is a question of law when the issue does not call for an examination of the probative value of the evidence
presented or of the truth or falsehood of the facts being admitted, and the doubt concerns the correct application of law
and jurisprudence on the matter. The resolution of the issue must rest solely on what the law provides on the given set
of circumstances.[29]

Indeed, the issues submitted to us for resolution involve questions of law the response thereto concerns the correct
application of law and jurisprudence on a given set of facts, i.e., whether or not a foreign national has an obligation to
support his minor child under Philippine law; and whether or not he can be held criminally liable under R.A. No. 9262 for
his unjustified failure to do so.

It cannot be negated, moreover, that the instant petition highlights a novel question of law concerning the liability of a
foreign national who allegedly commits acts and omissions punishable under special criminal laws, specifically in relation
to family rights and duties. The inimitability of the factual milieu of the present case, therefore, deserves a definitive
ruling by this Court, which will eventually serve as a guidepost for future cases. Furthermore, dismissing the instant
petition and remanding the same to the CA would only waste the time, effort and resources of the courts. Thus, in the
present case, considerations of efficiency and economy in the administration of justice should prevail over the
observance of the hierarchy of courts.

Now, on the matter of the substantive issues, We find the petition meritorious. Nonetheless, we do not fully agree with
petitioner's contentions.

To determine whether or not a person is criminally liable under R.A. No. 9262, it is imperative that the legal obligation to
support exists.

Petitioner invokes Article 195[30] of the Family Code, which provides the parent's obligation to support his child. Petitioner
contends that notwithstanding the existence of a divorce decree issued in relation to Article 26 of the Family Code,
[31]
respondent is not excused from complying with his obligation to support his minor child with petitioner.
On the other hand, respondent contends that there is no sufficient and clear basis presented by petitioner that she, as
well as her minor son, are entitled to financial support. [32] Respondent also added that by reason of the Divorce Decree,
he is not obligated to petitioner for any financial support. [33]

On this point, we agree with respondent that petitioner cannot rely on Article 195 [34] of the New Civil Code in demanding
support from respondent, who is a foreign citizen, since Article 15 [35] of the New Civil Code stresses the principle of
nationality. In other words, insofar as Philippine laws are concerned, specifically the provisions of the Family Code on
support, the same only applies to Filipino citizens. By analogy, the same principle applies to foreigners such that they are
governed by their national law with respect to family rights and duties. [36]

The obligation to give support to a child is a matter that falls under family rights and duties. Since the respondent is a
citizen of Holland or the Netherlands, we agree with the RTC-Cebu that he is subject to the laws of his country, not to
Philippine law, as to whether he is obliged to give support to his child, as well as the consequences of his failure to do so.
[37]

In the case of Vivo v. Cloribel,[38] the Court held that

Furthermore, being still aliens, they are not in position to invoke the provisions of the Civil Code of the Philippines, for
that Code cleaves to the principle that family rights and duties are governed by their personal law, i.e., the laws of the
nation to which they belong even when staying in a foreign country (cf. Civil Code, Article 15). [39]

It cannot be gainsaid, therefore, that the respondent is not obliged to support petitioner's son under Article 195 of the
Family Code as a consequence of the Divorce Covenant obtained in Holland. This does not, however, mean that
respondent is not obliged to support petitioner's son altogether.

In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving the
foreign law.[40] In the present case, respondent hastily concludes that being a national of the Netherlands, he is governed
by such laws on the matter of provision of and capacity to support. [41] While respondent pleaded the laws of the
Netherlands in advancing his position that he is not obliged to support his son, he never proved the same.

It is incumbent upon respondent to plead and prove that the national law of the Netherlands does not impose upon the
parents the obligation to support their child (either before, during or after the issuance of a divorce decree),
because Llorente v. Court of Appeals,[42]has already enunciated that:

True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of
them. Like any other fact, they must be alleged and proved.[43]

In view of respondent's failure to prove the national law of the Netherlands in his favor, the doctrine of processual
presumption shall govern. Under this doctrine, if the foreign law involved is not properly pleaded and proved, our courts
will presume that the foreign law is the same as our local or domestic or internal law. [44] Thus, since the law of the
Netherlands as regards the obligation to support has not been properly pleaded and proved in the instant case, it is
presumed to be the same with Philippine law, which enforces the obligation of parents to support their children and
penalizing the non-compliance therewith.

Moreover, while in Pilapil v. Ibay-Somera',[45] the Court held that a divorce obtained in a foreign land as well as its legal
effects may be recognized in the Philippines in view of the nationality principle on the matter of status of persons, the
Divorce Covenant presented by respondent does not completely show that he is not liable to give support to his son after
the divorce decree was issued. Emphasis is placed on petitioner's allegation that under the second page of the aforesaid
covenant, respondent's obligation to support his child is specifically stated, [46] which was not disputed by respondent.

We likewise agree with petitioner that notwithstanding that the national law of respondent states that parents have no
obligation to support their children or that such obligation is not punishable by law, said law would still not find
applicability, in light of the ruling inBank of America, NT and SA v. American Realty Corporation, [47] to wit:

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved in
accordance with Section 24, Rule 132 of the Rules of Court and the jurisprudence laid down in Yao Kee, et al. vs. Sy-
Gonzales, said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the
said foreign law, judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public
order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign country.

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the
splitting up of a single cause of action.

Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent

If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the
merits in any one is available as a ground for the dismissal of the others.
Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or
residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of Conflict of Laws. [48]

Applying the foregoing, even if the laws of the Netherlands neither enforce a parent's obligation to support his child nor
penalize the non-compliance therewith, such obligation is still duly enforceable in the Philippines because it would be of
great injustice to the child to be denied of financial support when the latter is entitled thereto.

We emphasize, however, that as to petitioner herself, respondent is no longer liable to support his former wife, in
consonance with the ruling in San Luis v. San Luis,[49] to wit:

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be considered married to
the alien spouse. Further, she should not be required to perform her marital duties and obligations. It held:

To maintain, as private respondent does, that, under our laws, petitioner has to be considered still married to private
respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil Code cannot be just.
Petitioner should not be obliged to live together with, observe respect and fidelity, and render support to private
respondent. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should
not be discriminated against in her own country if the ends of justice are to be served. (Emphasis added)[50]

Based on the foregoing legal precepts, we find that respondent may be made liable under Section 5(e) and (i) of R.A. No.
9262 for unjustly refusing or failing to give support to petitioner's son, to wit:

SECTION 5. Acts of Violence Against Women and Their Children.- The crime of violence against women and their children
is committed through any of the following acts:

xxxx

(e) Attempting to compel or compelling the woman or her child to engage in conduct which the woman or her child has
the right to desist from or desist from conduct which the woman or her child has the right to engage in, or attempting to
restrict or restricting the woman's or her child's freedom of movement or conduct by force or threat of force, physical or
other harm or threat of physical or other harm, or intimidation directed against the woman or child. This shall include,
but not limited to, the following acts committed with the purpose or effect of controlling or restricting the woman's or
her child's movement or conduct:

xxxx
(2) Depriving or threatening to deprive the woman or her children of financial support legally due her or her family, or
deliberately providing the woman's children insufficient financial support;

xxxx

(i) Causing mental or emotional anguish, public ridicule or humiliation to the woman or her child, including, but not
limited to, repeated verbal and emotional abuse, and denial of financial support or custody of minor children of access
to the woman's child/children.[51]

Under the aforesaid special law, the deprivation or denial of financial support to the child is considered an act of violence
against women and children.

In addition, considering that respondent is currently living in the Philippines, we find strength in petitioner's claim that
the Territoriality Principle in criminal law, in relation to Article 14 of the New Civil Code, applies to the instant case, which
provides that:"[p]enal laws and those of public security and safety shall be obligatory upon all who live and sojourn in
Philippine territory, subject to the principle of public international law and to treaty stipulations." On this score, it is
indisputable that the alleged continuing acts of respondent in refusing to support his child with petitioner is committed
here in the Philippines as all of the parties herein are residents of the Province of Cebu City. As such, our courts have
territorial jurisdiction over the offense charged against respondent. It is likewise irrefutable that jurisdiction over the
respondent was acquired upon his arrest.

Finally, we do not agree with respondent's argument that granting, but not admitting, that there is a legal basis for
charging violation of R.A. No. 9262 in the instant case, the criminal liability has been extinguished on the ground of
prescription of crime[52] under Section 24 of R.A. No. 9262, which provides that:

SECTION 24. Prescriptive Period. Acts falling under Sections 5(a) to 5(f) shall prescribe in twenty (20) years. Acts falling
under Sections 5(g) to 5(I) shall prescribe in ten (10) years.

The act of denying support to a child under Section 5(e)(2) and (i) of R.A. No. 9262 is a continuing offense, [53] which
started in 1995 but is still ongoing at present. Accordingly, the crime charged in the instant case has clearly not
prescribed.

Given, however, that the issue on whether respondent has provided support to petitioner's child calls for an examination
of the probative value of the evidence presented, and the truth and falsehood of facts being admitted, we hereby
remand the determination of this issue to the RTC-Cebu which has jurisdiction over the case.

WHEREFORE, the petition is GRANTED. The Orders dated February 19, 2010 and September 1, 2010, respectively, of the
Regional Trial Court of the City of Cebu are hereby REVERSED and SET ASIDE. The case is REMANDED to the same court
to conduct further proceedings based on the merits of the case.

SO ORDERED.
 EDNA MABUGAY-OTAMIAS, JEFFREN M. OTAMIAS AND MINOR JEMWEL M. OTAMIAS, REPRESENTED BY THEIR
MOTHER EDNA MABUGAY-OTAMIAS, Petitioners, v. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY COL. VIRGILIO O.
DOMINGO, IN HIS CAPACITY AS THE COMMANDING OFFICER OF THE PENSION AND GRATUITY MANAGEMENT CENTER
(PGMC) OF THE ARMED FORCES OF THE PHILIPPINES, Respondent.

DECISION

LEONEN, J.:

A writ of execution lies against the pension benefits of a retired officer of the Armed Forces of the Philippines, which is
the subject of a deed of assignment drawn by him granting support to his wife and five (5) children. The benefit of
exemption from execution of pension benefits is a statutory right that may be waived, especially in order to comply with
a husband's duty to provide support under Article XV of the 1987 Constitution and the Family Code.

Petitioner Edna Mabugay-Otamias (Edna) and retired Colonel Francisco B. Otamias (Colonel Otamias) were married on
June 16, 1978 and had five (5) children. 1ChanRoblesVirtualawlibrary

On September 2000, Edna and Colonel Otamias separated due to his alleged infidelity. 2 Their children remained with
Edna.3ChanRoblesVirtualawlibrary

On August 2002, Edna filed a Complaint-Affidavit against Colonel Otamias before the Provost Marshall Division of the
Armed Forces of the Philippines.4 Edna demanded monthly support equivalent to 75% of Colonel Otamias' retirement
benefits.5 Colonel Otamias executed an Affidavit, stating:chanRoblesvirtualLawlibrary

That sometime in August or September 2002, I was summoned at the Office of the Provost Marshal, Philippine Army, in
connection with a complaint affidavit submitted to said Office by my wife Mrs. Edna M. Otamias signifying her intention
75% of my retirement benefits from the AFP;

That at this point, I can only commit 50% of my retirement benefits to be pro-rated among my wife and five (5) children;

That in order to implement this compromise, I am willing to enter into Agreement with my wife covering the same;

That I am executing this affidavit to attest to the truth of the foregoing facts and whatever legal purpose it may
serve.6cralawred
On February 26, 2003, Colonel Otamias executed a Deed of Assignment where he waived 50% of his salary and pension
benefits in favor of Edna and their children. 7 The Deed of Assignment was considered by the parties as a compromise
agreement.8 It stated:chanRoblesvirtualLawlibrary
This Assignment, made and executed unto this 26 th day of February 2003 at Fort Bonifacio, Makati City, by the
undersigned LTC Francisco B. Otamias, 0-0-111045 (INP) PA, of legal age, married and presently residing at Dama De
Noche St., Pembo, Makati City.

WITNESSETH

WHEREAS, the undersigned affiant is the legal husband of EDNA M. OTAMIAS and the father of Julie Ann, Jonathan,
Jennifer, Jeffren and Jemwel all residing at Patag, Cagayan de Oro City;

WHEREAS, the undersigned will be retiring from the military service and expects to receive retirement benefits from the
Armed Forces of the Philippines;

WHEREAS, the undersigned had expressed his willingness to give a share in his retirement benefits to my wife and five
(5) abovenamed children,

NOW, THEREFORE, for and in consideration of the foregoing premises, the undersigned hereby stipulated the following:
1. That the undersigned will give to my legal wife and five (5) children FIFTY PERCENT (50%) of my retirement benefits to
be pro rated among them.

2. That a separate check(s) be issued and to be drawn and encash [sic] in the name of the legal wife and five (5) children
pro-rating the fifty (50%) percent of my retirement benefits.

IN WITNESS WHEREOF, I have hereunto set my hand this 26 th day of February 2003 at Fort Bonifacio, Makati
City.9cralawred
Colonel Otamias retired on April 1, 2003.10ChanRoblesVirtualawlibrary

The agreement was honored until January 6, 2006. 11 Edna alleged that "the A[rmed] F[orces] [of the] Philippines]
suddenly decided not to honor the agreement" 12 between Colonel Otamias and his legitimate family.

In a letter13 dated April 3, 2006, the Armed Forces of the Philippines Pension and Gratuity Management Center (AFP
PGMC) informed Edna that a court order was required for the AFP PGMC to recognize the Deed of
Assignment.14ChanRoblesVirtualawlibrary

In another letter15 dated April 17, 2006, the AFP PGMC reiterated that it could not act on Edna's request to receive a
portion of Colonel Otamias' pension "unless ordered by [the] appropriate court." 16ChanRoblesVirtualawlibrary

Heeding the advice of the AFP PGMC, Edna, on behalf of herself and Jeffren M. Otamias and Jemwel M. Otamias (Edna,
et al.), filed before the Regional Trial Court of Cagayan de Oro, Misamis Oriental an action for support, docketed as F.C.
Civil Case No. 2006-039.17ChanRoblesVirtualawlibrary

The trial court's Sheriff tried to serve summons on Colonel Otamias several times, to no avail. 18Substituted service was
resorted to.19 Colonel Otamias was subsequently declared in default for failure to file a responsive pleading despite order
of the trial court.20ChanRoblesVirtualawlibrary

The trial court ruled in favor of Edna, et al. and ordered the automatic deduction of the amount of support from the
monthly pension of Colonel Otamias.21ChanRoblesVirtualawlibrary

The dispositive portion of the trial court's Decision stated:chanRoblesvirtualLawlibrary

ALL THE FOREGOING CONSIDERED, and in consonance with the legal obligation of the defendant to the plaintiffs, the
Armed Forces of the Philippines, through its Finance Center and/or appropriate Finance Officer thereof, is thereby
ordered to release to Edna Mabugay Otamias and minor Jemwel M. Otamias, herein represented by his mother Edna,
their fifty (50%) per cent share of each of the monthly pension due to Colonel Francisco B. Otamias, AFP PA (Retired).

Defendant Francisco Otamias is also ordered to pay plaintiff Edna M. Otamias, fifty (50%) per cent of whatever
retirement benefits he has already received from the Armed Forces of the Philippines AND the arrears in support,
effective January 2006 up to the time plaintiff receives her share direct from the Finance Center of the Armed Forces of
the Philippines.

IT IS SO ORDERED.22cralawred
The Armed Forces of the Philippines, through the Office of the Judge Advocate General, filed a
Manifestation/Opposition23 to the Decision of the trial court, but it was not given due course due to its late
filing.24ChanRoblesVirtualawlibrary

Edna, et al., through counsel, filed a Motion for Issuance of Writ of Execution 25 dated February 22, 2008. The trial court
granted the Motion, and a writ of execution was issued by the trial court on April 10, 2008. 26ChanRoblesVirtualawlibrary

The Armed Forces of the Philippines Finance Center (AFP Finance Center), tlirough the Office of the Judge Advocate
General, filed a Motion to Quash27 the writ of execution and argued that the AFP Finance Center's duty to disburse
benefits is ministerial. It releases benefits only upon the AFP PGMC's approval. 28ChanRoblesVirtualawlibrary

The trial court denied the Motion to Quash and held that:chanRoblesvirtualLawlibrary
Under the law and existing jurisprudence, the "right to support" is practically equivalent to the "right to life." The "right
to life" always takes precedence over "property rights." The "right to support/life" is also a substantive right which always
takes precedence over technicalities/procedural rules. It being so, technical rules must yield to substantive justice.
Besides, this Court's Decision dated February 27, 2007 has long acquired finality, and as such, is ripe for
enforcement/execution.

THE FOREGOING CONSIDERED, the instant Motion is hereby DENIED. 29cralawred

The AFP PGMC moved for reconsideration of the order denying the Motion to Quash, 30 but the Motion was also denied
by the trial court in the Order 31 dated August 6, 2008.

A Notice of Garnishment was issued by the trial court on July 15, 2008 and was received by the AFP PGMC on September
9, 2008.32ChanRoblesVirtualawlibrary

The AFP PGMC filed before the Court of Appeals a Petition for Certiorari and Prohibition. 33ChanRoblesVirtualawlibrary

The Court of Appeals granted34 the Petition for Certiorari and Prohibition and partially nullified the trial court's Decision
insofar as it directed the automatic deduction of support from the pension benefits of Colonel Otamias.

The Court of Appeals discussed that Section 31 35 of Presidential Decree No. 1638, otherwise known as the AFP Military
Personnel Retirement and Separation Decree of 1979, "provides for the exemption of the monthly pension of retired
military personnel from execution and attachment[,]" 36 while Rule 39, Section 13 of the Rules of Court
provides:chanRoblesvirtualLawlibrary
SEC. 13. Property exempt from execution. Except as otherwise expressly provided by law, the following property, and no
other, shall be exempt from execution:

....

(1) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from
the Government[.]cralawred
The Court of Appeals also cited Pacific Products, Inc. vs. Ong:37
[M]oneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the Government,
belong to the latter, although the defendant in garnishment may be entitled to a specific portion thereof. And still
another reason which covers both of the foregoing is that every consideration of public policy forbids it. 38cralawred
In addition, the AFP PGMC was not impleaded as a party in the action for support; thus, it is not bound by the
Decision.39ChanRoblesVirtualawlibrary

The dispositive portion of the Court of Appeals Decision reads:chanRoblesvirtualLawlibrary

WHEREFORE, the petition is GRANTED. The assailed Decision of the Regional Trial Court, Branch 19, Cagayan de Oro City
dated February 27, 2007 in Civil Case No. 2006-039 is PARTIALLY NULLIFIED in so far as it directs the Armed Forces of the
Philippines Finance Center to automatically deduct the financial support in favor of private respondents, Edna Otamias
and her children Jeffren and Jemwel Otamias, from the pension benefits of Francisco Otamias, a retired military officer.
The Order dated June 10, 2008, Order dated August 6, 2008 and Writ of Execution dated April 10, 2008, all issued by the
court a quo are likewise SET ASIDE. Perforce, let a writ of permanent injunction issue enjoining the implementation of
the assailed Writ of Execution dated April 10, 2008 and the corresponding Notice of Garnishment dated July 15, 2008. No
pronouncement as to costs.

SO ORDERED.40 (Emphasis in the original)cralawred

Edna, et al. moved for reconsideration, but the Motion was denied by the Court of Appeals. 41ChanRoblesVirtualawlibrary

Edna, et al. filed before this Court a Petition for Review on Certiorari 42 on November 11, 2009. In the Resolution43 dated
January 20, 2010, this Court required respondent to comment.

In the Resolution44 dated August 4, 2010, this Court noted the Comment filed by the Office of the Solicitor General and
required Edna, et al. to file a reply. 45ChanRoblesVirtualawlibrary

A Reply46 was filed on September 27, 2010.

Edna, et al. argue that the Deed of Assignment Colonel Otamias executed Is valid and legal. 47ChanRoblesVirtualawlibrary

They claim that Section 31 of Presidential Decree No. 1638 48 "does not include support";49 hence, the retirement benefits
of Colonel Otamias can be executed upon.

Edna, et al. also argue that the Court of Appeals erred in granting respondent's Petition because it effectively rendered
the Deed of Assignment of no force and effect. 50 On the other hand, the trial court's Decision implements the Deed of
Assignment and Edna, et al.'s right to support. 51ChanRoblesVirtualawlibrary

Further, the AFP PGMC had already recognized the validity of the agreement and had made payments to them until it
suddenly stopped payment.52 After Edna, et al. obtained a court order, the AFP PGMC still refused to honor the Deed of
Assignment.53ChanRoblesVirtualawlibrary

The Armed Forces of the Philippines, through the Office of the Solicitor General, argues that it was not a party to the
case filed by Edna, et al.54 Thus, "it cannot be compelled to release part of the monthly pension benefits of retired
Colonel Otamias in favor of [Edna, et al]."55ChanRoblesVirtualawlibrary

The Office of the Solicitor General avers that the AFP PGMC never submitted itself to the jurisdiction of the trial
court.56 It was not a party to the case as the trial court never acquired jurisdiction over the AFP
PGMC.57ChanRoblesVirtualawlibrary

The Office of the Solicitor General also argues that Section 31 of Presidential Decree No. 1638 and Rule 39, Section 13(1)
of the Rules of Court support the Court of Appeals Decision that Colonel Otamias' pension benefits are exempt from
execution.58ChanRoblesVirtualawlibrary

Section 31 of Presidential Decree No. 1638 "does not deprive the survivor/s of a retired or separated officer or enlisted
man of their right to support."59 Rather, "[w]hat is prohibited is for respondent [AFP PGMC] to segregate a portion of the
pension benefit in favor of the retiree's family while still in the hands of the A[rmed] F[orces] [of the]
Philippines]."60ChanRoblesVirtualawlibrary

Thus, the AFP PGMC "cannot be compelled to directly give or issue a check in favor of [Edna, et al.] out of the pension
gratuity of Col. Otamias."61ChanRoblesVirtualawlibrary

In their Reply,62 Edna, et al. argue that the Armed Forces of the Philippines should not be allowed to question the legal
recourse they took because it was an officer of the Armed Forces of the Philippines who had advised them to file an
action for support.63ChanRoblesVirtualawlibrary

They argue that the phrase "while in the active service" in Section 31 of Presidential Decree No. 1638 refers to the "time
when the retired officer incurred his accountabilities in favor of a private creditor[,]" 64 who is a third person. The phrase
also "serves as a timeline designed to separate the debts incurred by the retired officer after his retirement from those
which he incurred prior thereto."65ChanRoblesVirtualawlibrary

Further, the accountabilities referred to in Section 31 of Presidential Decree No. 1638 refer to debts or loans, not to
support.66ChanRoblesVirtualawlibrary

The issues for resolution are:

First, whether the Court of Appeals erred in ruling that the AFP Finance Center cannot be directed to automatically
deduct the amount of support needed by the legitimate family of Colonel Otamias; and

Second, whether Colonel Otamias' pension benefits can be executed upon for the financial support of his legitimate
family.

The Petition is granted.

Article 6 of the Civil Code provides:chanRoblesvirtualLawlibrary

Article 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals or good customs,
or prejudicial to a third person with a right recognized by law.cralawred
The concept of waiver has been defined by this Court as:chanRoblesvirtualLawlibrary
a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or
privilege, which except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a
capable person, of a right known by him to exist, with the intent that such right shall be surrendered and such person
forever deprived of its benefit; or such conduct as warrants an inference of the relinquishment of such right; or the
intentional doing of an act inconsistent with claiming it. 67cralawred
In determining whether a statutory right can be waived, this Court is guided by the following
pronouncement:chanRoblesvirtualLawlibrary
[T]he doctrine of waiver extends to rights and privileges of any character, and, since the word 'waiver' covers every
conceivable right, it is the general rule that a person may waive any matter which affects his property, and any alienable
right or privilege of which he is the owner or which belongs to him or to which he is legally entitled, whether secured by
contract, conferred with statute, or guaranteed by constitution, provided such rights and privileges rest in the
individual, are intended for his sole benefit, do not infringe on the rights of others, and further provided the waiver of
the right or privilege is not forbidden by law, and does not contravene public policy; and the principle is recognized
that everyone has a right to waive, and agree to waive, the advantage of a law or rule made solely for the benefit and
protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any
public right, and without detriment to the community at large[.] 68 (Emphasis in the original)cralawred
When Colonel Otamias executed the Deed of Assignment, he effectively waived his right to claim that his retirement
benefits are exempt from execution. The right to receive retirement benefits belongs to Colonel Otamias. His decision to
waive a portion of his retirement benefits does not infringe on the right of third persons, but even protects the right of
his family to receive support.

In addition, the Deed of Assignment should be considered as the law between the parties, and its provisions should be
respected in the absence of allegations that Colonel Otamias was coerced or defrauded in executing it. The general rule
is that a contract is the law between parties and parties are free to stipulate terms and conditions that are not contrary
to law, morals, good customs, public order, or public policy. 69ChanRoblesVirtualawlibrary

The Deed of Assignment executed by Colonel Otamias was not contrary to law; it was in accordance with the provisions
on support in the Family Code. Hence, there was no reason for the AFP PGMC not to recognize its validity.

Further, this Court notes that the AFP PGMC granted the request for support of the wives of other retired military
personnel in a similar situation as that of petitioner in this case. Attached to the Petition are the affidavits of the wives of
retired members of the military, who have received a portion of their husbands' pensions. 70ChanRoblesVirtualawlibrary

One affidavit stated:chanRoblesvirtualLawlibrary

4. That when I consulted and appeared before the Office of PGMC, I was instructed to submit a Special Power of
Authority from my husband so they can release part of his pension to me;
 5. That my husband signed the Special Power of Attorney at the PGMC ceding 50% of his pension to me; the SPA
form was given to us by the PGMC and the same was signed by my husband at the PGMC;. . .

....

7. That the amount was deposited directly to my account by the PGMC- Finance Center AFP out of the pension of
my husband;

8. That only the Special Power of Attorney was required by the PGMC in order for them to segregate my share of
my husband's pension and deposit the same to my account[.] 71

The other affidavit stated:chanRoblesvirtualLawlibrary

8. That my husband signed the Special Power of Attorney at the PGMC ceding 50% of his pension to me; the SPA
form was given to us by the PGMC and the same was signed by my husband at the PGMC[.] 72

In addition, the AFP PGMC's website informs the public of the following procedure:chanRoblesvirtualLawlibrary
Tanong: My husband-retiree cut-off my allotment. How can I have it restored?
Sagot: Pension benefits are separate properties of the retiree and can not [sic] be subject of a Ocurt [sic] Order for
execution nor can they be assigned to any third party (Sec 31, PD 1638, as amended). However, a valid Special Power of
Attorney (SPA) by the retiree himself empowering the AFP Finance Center to deduct certain amount from his lumpsum
[sic] or pension pay as the case maybe, as a rule, is a valid waiver of rights which can be effectively implemented by the
AFP F[inance] C[enter].73cralawred
Clearly, the AFP PGMC allows deductions from a retiree's pension for as long as the retiree executes a Special Power of
Attorney authorizing the AFP PGMC to deduct a certain amount for the benefit of the retiree's beneficiary.

It is curious why Colonel Otamias was allowed to execute a Deed of Assignment by the administering officer when, in the
first place, the AFP PGMC's recognized procedure was to execute a Special Power of Attorney, which would have been
the easier remedy for Colonel Otamias' family.

Instead, Colonel Otamias' family was forced to incur litigation expenses just to be able to receive the financial support
that Colonel Otamias was willing to give to Edna, et al.

II

Section 31 of Presidential Decree No. 1638 provides:chanRoblesvirtualLawlibrary

Section 31. The benefits authorized under this Decree, except as provided herein, shall not be subject to attachment,
garnishment, levy, execution or any tax whatsoever; neither shall they be assigned, ceded, or conveyed to any third
person: Provided, That if a retired or separated officer or enlisted man who is entitled to any benefit under this Decree
has unsettled money and/or property accountabilities incurred while in the active service, not more than fifty per
centum of the pension gratuity or other payment due such officer or enlisted man or his survivors under this Decree may
be withheld and be applied to settle such accountabilities.cralawred
Under Section 31, Colonel Otamias' retirement benefits are exempt from execution. Retirement benefits are exempt
from execution so as to ensure that the retiree has enough funds to support himself and his family.

On the other hand, the right to receive support is provided under the Family Code. Article 194 of the Family Code defines
support as follows:chanRoblesvirtualLawlibrary
Art. 194. Support comprises everything indispensable for sustenance, dwelling, clothing, medical attendance, education
and transportation, in keeping with the financial capacity of the family.

The education of the person entitled to be supported referred to in the preceding paragraph shall include his schooling
or training for some profession, trade or vocation, even beyond the age of majority. Transportation shall include
expenses in going to and from school, or to and from place of work.cralawred
The provisions of the Family Code also state who are obliged to give support, thus:chanRoblesvirtualLawlibrary
Art. 195. Subject to the provisions of the succeeding articles, the following are obliged to support each other to the
whole extent set forth in the preceding article:

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and their legitimate children and the legitimate and illegitimate children of the latter;

(4) Parents and their illegitimate children and the legitimate and illegitimate children of the latter; and

(5) Legitimate brothers and sisters, whether of the full or half- blood.

Art. 196. Brothers and sisters not legitimately related, whether of the full or half-blood, are likewise bound to support
each other to the full extent set forth in Article 194 except only when the need for support of the brother or sister, being
of age, is due to a cause imputable to the claimant's fault or negligence.

Art. 197. For the support of legitimate ascendants; descendants, whether legitimate or illegitimate; and brothers and
sisters, whether legitimately or illegitimately related, only the separate property of the person obliged to give support
shall be answerable provided that in case the obligor has no separate property, the absolute community or the conjugal
partnership, if financially capable, shall advance the support, which shall be deducted from the share of the spouses
obliged upon the liquidation of the absolute community or of the conjugal partnership[.]cralawred
The provisions of Rule 39 of the Rules of Court that are applicable to this case are in apparent conflict with each other.
Section 4 provides that judgments in actions for support are immediately executory. On the other hand, Section 13(1)
provides that the right to receive pension from government is exempt from execution, thus:chanRoblesvirtualLawlibrary
RULE 39

EXECUTION, SATISFACTION, AND EFFECT OF JUDGMENTS

....

SEC. 4. Judgments not stayed by appeal. Judgments in actions for injunction, receivership, accounting and support,
and such other judgments as are now or may hereafter be declared to be immediately executory, shall be enforceable
after their rendition and shall not, be stayed by an appeal taken therefrom, unless otherwise ordered by the trial court.
On appeal therefrom, the appellate court in its discretion may make an order suspending, modifying, restoring or
granting the injunction, receivership, accounting, or award of support.

The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for the security or
protection of the rights of the adverse party.

....

SEC. 13. Property exempt from execution. Except as otherwise expressly provided by law, the following property, and
no other, shall be exempt from execution:

....

(1) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from the
Government;

....
But no article or species of property mentioned in this section shall be exempt from execution issued upon a judgment
recovered for its price or upon a judgment of foreclosure of a mortgage thereon. (Emphasis supplied)cralawred
Based on the Family Code, Colonel Otamias is obliged to give support to his family, petitioners in this case. However, he
retired in 2003, and his sole source of income is his pension. Judgments in actions for support are immediately executory,
yet under Section 31 of Presidential Decree No. 1638, his pension cannot be executed upon.

However, considering that Colonel Otamias has waived a portion of his retirement benefits through his Deed of
Assignment, resolution on the conflict between the civil code provisions on support and Section 31 of Presidential
Decree No. 1638 should be resolved in a more appropriate case.

III

Republic v. Yahon74 is an analogous case because it involved the grant of support to the spouse of a retired member of
the Armed Forces of the Philippines.

In Republic v. Yahon, Daisy R. Yahon filed a Petition for the Issuance of Protection Order under Republic Act No.
9262.75 She alleged that she did not have any source of income because her husband made her resign from her job. 76 The
trial court issued a temporary restraining order, a portion of which stated:chanRoblesvirtualLawlibrary
To insure that petitioner [Daisy R. Yahon] can receive a fair share of respondent's retirement and other benefits, the
following agencies thru their heads are directed to WITHHOLD any retirement, pension [,] and other benefits of
respondent, S/SGT. CHARLES A. YAHON, a member of the Armed Forces of the Philippines assigned at 4ID, Camp
Evangelista, Patag, Cagayan de Oro City until further orders from the court:chanRoblesvirtualLawlibrary
1. Commanding General/Officer of the Finance Center of the Armed Forces of the Philippines, Camp Emilio Aguinaldo,
Quezon City;

2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;

3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City. 77(Emphasis in the original)cralawred
The trial court subsequently granted Daisy's Petition and issued a permanent protection order 78 and
held:chanRoblesvirtualLawlibrary
Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt. Charles A. Yahon is directed to give it to
petitioner 50% of whatever retirement benefits and other claims that may be due or released to him from the
government and the said share of petitioner shall be automatically deducted from respondent's benefits and claims and
be given directly to the petitioner, Daisy R. Yahon.

Let copy of this decision be sent to the Commanding General/Officer of Finance Center of the Armed Forces of the
Philippines, Camp Emilio Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio Aguinaldo, Quezon City and the
Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City for their guidance and strict compliance. 79cralawred
In that case, the AFP Finance Center filed before the trial court a Manifestation and Motion stating that "it was making a
limited and special appearance"80 and argued that the trial court did not acquire jurisdiction over the Armed Forces of
the Philippines. Hence, the Armed Forces of the Philippines is not bound by the trial court's
ruling.81ChanRoblesVirtualawlibrary

The Armed Forces of the Philippines also cited Pacific Products, where this Court ruled that:chanRoblesvirtualLawlibrary
A rule, which has never been seriously questioned, is that money in the hands of public officers, although it may be due
government employees, is not liable to the creditors of these employees in the process of garnishment. One reason is,
that the State, by virtue of its sovereignty may not be sued in its own courts except by express authorization by the
Legislature, and to subject its officers to garnishment would be to permit indirectly what is prohibited directly. Another
reason is that moneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the
Government, belong to the latter, although the defendant in garnishment may be entitled to a specific portion thereof.
And still another reason which covers both of the foregoing is that every consideration of public policy forbids
it.82 (Citations omitted)cralawred
This Court in Republic v. Yahon denied the Petition and discussed that because Republic Act No. 9262 is the later
enactment, its provisions should prevail, 83 thus:chanRoblesvirtualLawlibrary
We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be construed as laying down an exception to
the general rule above stated that retirement benefits are exempt from execution. The law itself declares that the court
shall order the withholding of a percentage of the income or salary of the respondent by the employer, which shall be
automatically remitted directly to the woman "[n]otwithstanding other laws to the contrary"84 (Emphasis in the
original)cralawred
IV

The 1987 Constitution gives much importance to the family as the basic unit of society, such that Article XV 85 is devoted
to it.

The passage of the Family Code further implemented Article XV of the Constitution. This Court has recognized the
importance of granting support to minor children, provided that the filiation of the child is proven. In this case, the
filiation of Jeffren M. Otamias and Jemwel M. Otamias was admitted by Colonel Otamias in the Deed of
Assignment.86ChanRoblesVirtualawlibrary

Even before the passage of the Family Code, this Court has given primary consideration to the right of a child to receive
support. In Samson v. Yatco,87 a petition for support was dismissed with prejudice by the trial court on the ground that
the minor asking for support was not present in court during trial. An appeal was filed, but it was dismissed for having
been filed out of time. This Court relaxed the rules of procedure and held that "[i]f the order of dismissal with prejudice
of the petition for support were to stand, the petitioners would be deprived of their right to present and nature
support."88ChanRoblesVirtualawlibrary

In Gan v. Reyes,89 Augustus Caezar R. Gan (Gan) questioned the trial court's decision requiring him to give support and
claimed that that he was not the father of the minor seeking support. He also argued that he was not given his day in
court. This Court held that Gan's arguments were meant to delay the execution of the judgment, and that in any case,
Gan himself filed a Motion for Leave to Deposit in Court Support Pendente Lite:chanRoblesvirtualLawlibrary
In all cases involving a child, his interest and welfare are always the paramount concerns. There may be instances where,
in view of the poverty of the child, it would be a travesty of justice to refuse him support until the decision of the trial
court attains finality while time continues to slip away. An excerpt from the early case of De Leon v. Soriano is relevant,
thus:chanRoblesvirtualLawlibrary
The money and property adjudged for support and education should and must be given presently and without delay
because if it had to wait the final judgment, the children may in the meantime have suffered because of lack of food or
have missed and lost years in school because of lack of funds. One cannot delay the payment of such funds for support
and education for the reason that if paid long afterwards, however much the accumulated amount, its payment cannot
cure the evil and repair the damage caused. The children with such belated payment for support and education cannot
act as gluttons and eat voraciously and unwisely, afterwards, to make up for the years of hunger and starvation. Neither
may they enrol in several classes and schools and take up numerous subjects all at once to make up for the years they
missed in school, due to non-payment of the funds when needed. 90cralawred
V

The non-inclusion of the AFP PGMC or the AFP Finance Center in the action for support was proper, considering that
both the AFP PGMC and the AFP Finance Center are not the persons obliged to give support to Edna, et al. Thus, it was
not a real party-in-interest.91 Nor was the AFP PGMC a necessary party because complete relief could be obtained even
without impleading the AFP PGMC.92ChanRoblesVirtualawlibrary

WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated May 22, 2009 and Resolution dated August
11, 2009 in CA-G.R. SP No. 02555-MIN are REVERSED and SET ASIDE. The Regional Trial Court Decision dated February
27, 2007 in F.C. Civil Case No. 2006-039 is REINSTATED.

SO ORDERED.chanroblesvirtuallawlibrary
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Court, as amended, which seeks to reverse
and set aside the April 28, 2005 Decision [1] and January 20, 2006 Resolution[2] of the Court of Appeals in CA-G.R. CV No.
55165,[3] which reversed the April 17, 1996 Decision [4] and September 17, 1996 Order[5] of the Regional Trial Court (RTC),
Branch 71, Pasig City, in Civil Case No. 58397.

The undisputed facts as narrated by the Court of Appeals are as follows:

Plaintiff-appellant [Elizabeth L. Diaz] has been in the service of [the University of the Philippines] U.P. since 1963. In 1987,
she was an associate professor in the College of Mass Communication (CMC). During the second semester for Academic
Year (AY) 1987-1988, she was a full time member of the faculty and taught 12 units on full load. After 2 to 3 weeks of
teaching, she applied for sick leave effective November 23, 1987 until March 1, 1988. She returned on March 2, 1988 and
submitted a Report for Duty Form.

On May 3, 1988, Diaz filed a letter-application directly with U.P.'s Office of the President (Abueva) for sabbatical leave
with pay for one (1) year effective June 1988 to May 1989, for "rest, renewal and study." Cecilia Lazaro, Chair of the
Broadcast Department, initially recommended to CMC Dean Encanto that Diaz's sabbatical application be granted. After
they discussed the options available to the CMC, Lazaro, on May 10, 1988, recommended instead that Diaz be granted
any leave of absence she may be qualified for. In her May 2, 1988 letter, Diaz indicated her unwillingness to teach.
Considering the CMC's experience with Diaz who dropped her courses in the previous semester, Lazaro deleted Diaz's
name in the final schedule of classes for the 1st semester of AY 1988-89 beginning June 6, 1988. Incidentally, Diaz
received her salary for June 1988, indicating that her sabbatical might be approved.

Thereafter, Encanto referred Diaz's sabbatical application to the Secretary of U.P., recommending its denial. When
requested by (Chancellor) Tabujara, Encanto transmitted to the former a Reference Slip together with her comments
thereon. Meanwhile, Encanto requested Ermelina Kalagayan to hold Diaz's salary effective July 1, 1988 until further
notice considering that her sabbatical application has not yet been approved and that she did not teach that semester.
Consequently, Diaz's name was deleted in the payroll from September 1988 to January 1989.

On July 4, 1988, Tabujara recommended instead that Diaz be granted a leave without pay in order to enable the CMC to
hire a substitute. The next day, the U.P.'s Secretary referred to Abad, Vice-President (VP) for Academic Affairs, the fact of
denial of such sabbatical request, for his own comment/recommendation to the U.P. President. Meantime, Diaz
confessed her problems to Abad. On July 8, 1988, Abad returned the Reference Slip indicating therein that Diaz had
promised him earlier "to put down in writing, from her point of view, the historical backdrop as it were to the latest
denial of her sabbatical leave." With comments, Abad then referred the matter to the U.P. President.

Pursuant to Administrative Order No. 42 issued by the U.P. President, the Academic Policy Coordinating Committee
(APCC), on July 21, 1988, reviewed the case of Diaz. When reminded by Abad, Diaz again promised to give the
background information.

On Diaz's request to teach for that semester, AY 1988-89, the Vice Chancellor for Academic Affairs, Edgardo Pacheco, and
the HRDO Director, Atty. Pio Frago, instructed Encanto that "Until Prof. Diaz officially reports for duty, accomplishes the
Certificate of Report for Duty, and the Dean of CMC confirms her date of actual report for duty, she is considered absent
without official leave (AWOL) for the University."

On November 8, 1988, Abad, then as OIC, issued a Memorandum to Diaz to confirm as valid Encanto's reason of shortage
of teaching staff in denying her sabbatical. Later, he also informed Diaz of her lack of service during the first semester of
AY 1988-89, hence, she is not entitled to be paid and asked her to clarify her status of being on leave without pay.

[While Diaz was able to teach during the second semester of AY 1988-89, she was not able to claim her salaries for her
refusal to submit the Report for Duty Form. [6] She received her salaries for June to July 15, 1989, but could no longer
claim her salary after July 15, 1989, when Encanto reminded the University Cashier, in a letter dated July 26, 1989, [7] that
Diaz had to "accomplish the Report for Duty Form to entitle her to salaries and make official her return to the service of
the University."[8] Diaz's name was subsequently included in the payroll starting July 1990, when she submitted a Report
for Duty after her return from compulsory summer leave. [9]

xxxx

In the meantime, on January 3, 1989, Diaz filed a complaint with the Office of the Ombudsman (OMB-00-89-0049),
against Gemino H. Abad, Ernesto G. Tabujara and Georgina R. Encanto, all officials of the University of the Philippines, for
the alleged violation of Section 3(e) of R.A. 3019, involving the legality of a Report for Duty Form as a prerequisite to the
payment of her salary.

On May 4, 1989, the Ombudsman dismissed the said complaint and ruled, inter alia:

Considering that Prof. Diaz was rightfully considered on leave without pay during the first semester of AY 1988-1989, to
make official her return to the service of the University, it is advised that she accomplish the Report for Duty Form which
will then be the basis to establish the date of her actual return to the service. However, if possible, the University
authorities can perhaps dispense with the requirement and pay her salaries for actual services rendered from November
3, 1988.

Diaz's initial Petition for Certiorari in the Supreme Court (G.R. No. 88834) assailing the above-quoted Ombudsman's
ruling was subsequently dismissed. She filed another Petition (G.R. No. 89207) raising exactly the same issued found in
G.R. No. 88834.

Meanwhile, on July 18, 1989, Diaz instituted a complaint against the U.P., Abueva, Encanto, Tabujara and Abad with the
Regional Trial Court, Pasig, Metro Manila praying that the latter be adjudged, jointly and severally to pay her damages.
She claimed, among others, that [respondents] conspired together as joint tortfeasors, in not paying her salaries from
July 1, 1988 in the first semester of academic year 1988-89, for the entire period when her sabbatical application was left
unresolved, as well as the salaries she earned from teaching in the second semester from November 1988 to May 1989.
She likewise claimed moral and exemplary damages and attorney's fees.

On August 31, 1989, the Supreme Court En Banc dismissed Diaz's Petition in G.R. No. 89207, viz.:

It is noted that the Ombudsman found no manifest partiality, evident bad faith, or gross inexcusable negligence on the
part of the private respondents in denying the application for sabbatical leave of petitioner (Diaz) and in requiring her to
fill up a Report for Duty Form as a requisite for her entitlement to salary.

To the petitioner's contentions, the Ombudsman observed, among others, the following: that, the denial of her
sabbatical leave application was due to the exigencies of the service; that petitioner was not given a teaching assignment
for the first semester of AY 1988-1989, because she did not want to teach then; that the delay in action on her leave
application was due to petitioner's own fault for not following the usual procedures in the processing of her application;
and that there is no malice on the part of the private respondents in requiring petitioner to accomplish the Report for
Duty Form which is the basis of the date of her actual return to the service. [10] (Citations omitted.)

In a Decision dated April 17, 1996, the RTC ruled in favor of petitioner Diaz, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants:

1. Ordering defendants, except Abueva, to pay plaintiff, jointly and severally, the amount of P133,665.50 representing the
total unpaid salaries from July 1, 1988 to May 31, 1989 and from July 16, 1989 to May 31, 1990 to be covered by
corresponding certificate of service, with legal rate of interest from the date of this Decision until its full payment.

2. Ordering defendants, except the University and Abueva, to pay plaintiff, jointly and severally, the amount of
P300,000.00 as moral damages.

3. Ordering defendants, except the University and Abueva, to pay plaintiff, jointly and severally, the amount of
P60,000.00 as exemplary damages.

4. Ordering defendants, except the University and Abueva, to pay plaintiff, jointly and severally, the reduced amount of
P50,000.00 as and by way of attorney's fees.

5. Costs of suit.

The counterclaims filed by defendant Tabujara are DISMISSED. [11]

The RTC, ruling that a sabbatical leave is not a right but a privilege, held that petitioner Diaz was entitled to such privilege
and found that the delay in the_resolution of her application was unreasonable and unconscionable.

However, on September 17, 1996, the RTC, in denying the Motions for Reconsideration of the respondents in said case,
also amended its earlier decision by absolving respondent Encanto from any liability, to wit:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants:

1. Ordering defendants, except Abueva and Encanto, to pay plaintiff, jointly and severally, the amount of P133,665.50
representing the total unpaid salaries from July 1, 1988 to May 31, 1989 and from July 16, 1989 to May 31, 1990 to be
covered by corresponding certificate of service, with legal rate of interest from the date of this Decision until its full
payment.

2. Ordering defendants, except the University, Abueva and Encanto, to pay plaintiff, jointly and severally, the amount of
P300,000.00 as moral damages.

3. Ordering defendants, except the University, Abueva and Encanto, to pay plaintiff, jointly and severally, the amount of
P60,000.00 as exemplary damages.

4. Ordering defendants, except University, Abueva and Encanto, to pay plaintiff, jointly and severally, the reduced amount
of P50,000.00 as and by way of attorney's fees.

5. Costs of suit.

The counterclaims filed by defendant Tabujara are DISMISSED. [12]

The RTC dismissed the claim of petitioner Diaz against respondent Encanto on the ground that her function was purely
recommendatory in nature. It held that she was not instrumental in the unreasonable and unconscionable delay in the
resolution of petitioner Diaz's sabbatical application as she transmitted her recommendation to Abueva within eighteen
days from her receipt of such application. [13]

Petitioner Diaz[14] and respondents Tabujara,[15] U.P., Abad[16] and even Encanto[17] appealed the RTC's ruling to the Court
of Appeals.
As respondent Encanto was absolved of liability by the RTC in its September 17, 1996 Order, the Court of Appeals
admitted her Brief,[18]as an incorporation to the other respondents' Brief, [19] and as a comment on petitioner Diaz's
appeal.[20]

The respondents mainly argued that the RTC erred in holding them liable for damages despite the absence of bad faith
on their part, as held by both the Ombudsman in OMB-00-89-0049 and the Supreme Court in G.R. No. 89207.

Petitioner Diaz, on the other hand, questioned the reversal of the RTC ruling only with respect to the liability of
respondent Encanto, in a lone assignment of error, viz.:

THE LOWER COURT GRAVELY ERRED IN REVERSING ITS ORIGINAL DECISION WITH REGARD TO PRINCIPAL DEFENDANT
GEORGINA R. ENCANTO BY ABSOLVING HER OF LIABILITY FOR DAMAGES TO PLAINTIFF-APPELLANT ELIZABETH L. DIAZ
WITHOUT ALTERING IN ANY MATERIAL RESPECT WHATSOEVER THE FINDINGS OF FACT IN THE ORIGINAL DECISION
SHOWING CLEARLY THE RESPONSIBILITY OF DEFENDANT ENCANTO FOR (I) THE WRONGFUL DISAPPROVAL OF
PLAINTIFF'S SABBATICAL APPLICATION; (II) THE UNJUST DEPRIVATION OF SALARIES DUE THE PLAINTIFF FOR ALMOST
ONE WHOLE SEMESTER DURING WHICH HER SABBATICAL APPLICATION REMAINED UNRESOLVED; AND (III) THE
WRONGFUL WITHHOLDING OF PLAINTIFF'S EARNED SALARIES IN THE THREE SUCCEEDING SEMESTERS DURING WHICH
THE PLAINTIFF TAUGHT WITHOUT BEING PAID.[21]

Ruling of the Court of Appeals

The Court of Appeals trimmed down the issue to whether or not respondents U.P., Tabujara and Abad were negligent or
acted in bad faith in denying petitioner Diaz's application for sabbatical leave and in withholding her salaries. In its
Decision promulgated on April 28, 2005, it effectively reversed the decision of the RTC, viz.:

WHEREFORE, the appealed Decision is REVERSED and SET ASIDE and a NEW JUDGMENT is RENDERED, as follows: (1)
defendant-appellant University of the Philippines, through its appropriate officials, is DIRECTED to pay plaintiff-appellant
Elizabeth Diaz the sum of Twenty-One Thousand, Eight Hundred Seventy-Nine and 64/100 (P21,879.64) as unpaid
salaries and allowances, and (2) the sums awarded as moral and exemplary damages and attorney's fees are
hereby DELETED. This is without prejudice to the enforcement of valid rules and regulations of the University of the
Philippines pertaining to Diaz's employment status. [22]

The Court of Appeals found neither negligence nor bad faith on the part of the respondents in their denial of petitioner
Diaz's sabbatical leave application and in withholding her salaries.

The Court of Appeals emphasized that a sabbatical leave is not a right which could be demanded at will, even by
petitioner Diaz who has been a veteran professor of 24 years at U.P. Moreover, the Court of Appeals said that the
eventual denial of her sabbatical leave application was not actionable in view of the fact that (i) it would be unfair to
impute negligence to respondents in the regular discharge of their functions; and (ii) assuming that there was delay in
the resolution of her application, she herself caused such delay. [23]

The Court of Appeals also held that petitioner Diaz's own recalcitrance and defiance to comply with certain documentary
requirements was the reason her salaries were withheld. [24]

Petitioner Diaz filed a Motion for Reconsideration to the aforementioned decision, which was subsequently denied for
lack of merit in a Resolution dated January 20, 2006.

Issues
Undaunted, petitioner Diaz is again before this Court, with the following Assignments of Error:

FIRST ASSIGNMENT OF ERROR

WITHOUT DISTURBING THE FINDINGS OF FACT OF THE TRIAL COURT BASED ON OVERWHELMING EVIDENCE REVEALING
THE COMMISSION BY RESPONDENTS OF THE TORTIOUS ACTS COMPLAINED OF BY PETITIONER IN DENYING HER
SABBATICAL LEAVE, THE COURT OF APPEALS GRIEVOUSLY ERRED IN IGNORING THOSE FINDINGS AND ADOPTING AND
TREATING AS VALID THE FLIMSY EXCUSES OF RESPONDENTS TO AVOID THE LEGAL CONSEQUENCES OF THEIR ACTS.

SECOND ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN HOLDING CONTRARY TO THE EVIDENCE ON RECORD, THAT "THERE WAS JUDICIOUS
EXERCISE" BY RESPONDENTS "OF THEIR DISCRETIONARY POWER WITH RESPECT TO THE DENIAL OF THE SUBJECT
SABBATICAL LEAVE."

THIRD ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN TREATING AS LAWFUL THE WITHHOLDING OF PETITIONER'S SALARIES, CONTRARY TO
THE EVIDENCE ON RECORD.

FOURTH ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN CONCLUDING, CONTRARY TO THE EVIDENCE ON RECORD, THAT PETITIONER "FAILED
TO SHOW BY A PREPONDERANCE OF EVIDENCE THE NEGLIGENCE OF RESPONDENTS SO AS TO BE ENTITLED TO THE
DAMAGES SOUGHT."

FIFTH ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN NOT CORRECTLY COMPUTING THE SUM OF PETITIONER'S UNPAID AND EARNED
SALARIES, IN UTTER DISREGARD OF THE EVIDENCE ON RECORD.

SIXTH ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN NOT FINDING, CONTRARY TO THE EVIDENCE ON RECORD, THAT RESPONDENTS
ENCANTO, TABUJARA AND ABAD ARE JOINTLY AND SEVERALLY LIABLE TO PETITIONER FOR ACTUAL, MORAL AND
EXEMPLARY DAMAGES AS JOINT TORTFEASORS UNDER THE LAW. [25]

The issue in this case boils down to whether or not the respondents acted in bad faith when they resolved petitioner
Diaz's application for sabbatical leave and withheld her salaries.

Ruling of the Court

The resolution of this case hinges on the question of bad faith on the part of the respondents in denying petitioner Diaz's
sabbatical leave application and withholding of her salaries. Bad faith, however, is a question of fact and is evidentiary.
[26]
Thus, contrary to petitioner Diaz's belief that "[w]hat is involved in this stage of the case is the legal interpretation or
the legal consequence of the material facts of this case," the resolution of the issue at hand involves a question of fact,
which the respondents rightly assert, is not within the province of a Rule 45 petition. [27] Nonetheless, the Court makes an
exception in this case especially so that both the RTC and the Court of Appeals have the same findings of fact, but they
arrived at different conclusions.[28]

Application for Sabbatical Leave

Petitioner Diaz's complaint[29] for recovery of damages before the RTC was based on the alleged bad faith of the
respondents in denying her application for sabbatical leave vis-a-vis Articles 19 and 20 of the Civil Code.[30]

Articles 19 and 20 read as follows:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter
for the same.

Article 19 of the Civil Code "prescribes a 'primordial limitation on all rights' by setting certain standards that must be
observed in the exercise thereof."[31] Abuse of right under Article 19 exists when the following elements are present: (1)
there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. [32]

This Court, expounding on the concept of bad faith under Article 19, held:

Malice or bad faith is at the core of Article 19 of the Civil Code. Good faith refers to the state of mind which is manifested
by the acts of the individual concerned. It consists of the intention to abstain from taking an unconscionable and
unscrupulous advantage of another. It is presumed. Thus, he who alleges bad faith has the duty to prove the same. Bad
faith does not simply connote bad judgment or simple negligence; it involves a dishonest purpose or some moral
obloquy and conscious doing of a wrong, a breach of known duty due to some motives or interest or ill will that partakes
of the nature of fraud. Malice connotes ill will or spite and speaks not in response to duty. It implies an intention to do
ulterior and unjustifiable harm. Malice is bad faith or bad motive. [33] (Citations omitted.)

Undoubtedly, the respondents had a duty to resolve petitioner Diaz's sabbatical leave application. The crucial question is
if they did so with the intention of prejudicing or injuring petitioner Diaz.

We hold in the negative.

There is no dispute, and both the RTC and the Court of Appeals agree, that the grant of a sabbatical leave is not a matter
of right, but a privilege. Moreover, the issue of whether or not the respondents acted in bad faith when they denied
petitioner Diaz's application for sabbatical leave has been answered several times, in separate jurisdictions.

On May 4, 1989, the Ombudsman issued a Resolution [34] in Case No. OMB-0-89-0049 on the complaint filed by petitioner
Diaz against respondents Encanto, Tabujara, and Abad for violation of Section 3(e) of Republic Act No. 3019,
recommending the dismissal of the complaint for lack of merit. It found no manifest partiality, evident bad faith, or gross
inexcusable negligence on the part of the respondents in their denial of petitioner Diaz's application for sabbatical leave
and in requiring her to accomplish a Report for Duty form as a prerequisite for her entitlement to salary.

Petitioner Diaz protested the outcome of this resolution by filing a special civil action for certiorari with this Court, on
two occasions. When G.R. No. 88834 was dismissed for non-compliance with Circular No. 1-88, [35] petitioner Diaz re-filed
her petition, raising exactly the same issues, and this was docketed as G.R. No. 89207. [36]
On August 31, 1989, this Court issued a Resolution, [37] dismissing petitioner Diaz's petition in G.R. No. 89207. This Court
noted the Ombudsman's findings and observations and found them to be supported by substantial evidence.

On April 28, 2005, the Court of Appeals had the same findings and held that the denial of petitioner Diaz's application for
sabbatical leave was "a collegial decision based on U.P. 's established rules, the grant of which is subject to the exigencies
of the service, like acute shortage in teaching staff." It added that "the U.P. officials' eventual denial of [Diaz's] application
is not actionable x x x it is unfair to impute negligence to [respondents] in the regular discharge of their official
functions."[38]

The Ombudsman and all three courts, starting from the RTC to this Court, have already established that a sabbatical
leave is not a right and therefore petitioner Diaz cannot demand its grant. It does not matter that there was only one
reason for the denial of her application, as the approving authorities found that such reason was enough. Moreover, not
only the Court of Appeals but also the Ombudsman, and this Court, have ruled that the respondents did not act in bad
faith when petitioner Diaz's sabbatical leave application was denied. Those three separate rulings verily must be given
great weight in the case at bar.

The Court does not find any reason to disregard those findings, especially when our own perusal of the evidence showed
no traces of bad faith or malice in the respondents' denial of petitioner Diaz's application for sabbatical leave. They
processed her application in accordance with their usual procedure - with more leeway, in fact, since petitioner Diaz was
given the chance to support her application when she was asked to submit a historical background; and the denial was
based on the recommendation of respondent Encanto, who was in the best position to know whether petitioner Diaz's
application should be granted or not.

While the RTC declared that petitioner Diaz should have been granted a sabbatical leave, it is important to note that the
RTC awarded damages to petitioner Diaz merely for the unreasonable and unconscionable delay in the resolution of
her sabbatical leave application,[39] and not its denial per se. Thus, petitioner Diaz's entitlement to a sabbatical leave
should no longer be an issue in this case. This is supported by petitioner Diaz's own action when she did not move for the
reconsideration of the April 17, 1996 Decision of the RTC for awarding her damages due only to the delay in the
resolution of her sabbatical leave application and not for its denial; and more so by the prayer in her petition to this
Court wherein she asked that the April 17, 1996 Decision of the RTC be "reinstated and affirmed in toto.[40]

Nevertheless, on the question of whether or not there was bad faith in the delay of the resolution of petitioner Diaz's
sabbatical leave application, the Court still rules in the negative. "It is an elementary rule in this jurisdiction that good
faith is presumed and that the burden of proving bad faith rests upon the party alleging the same." [41] Petitioner Diaz has
failed to prove bad faith on the part of the respondents. There is nothing in the records to show that the respondents
purposely delayed the resolution of her application to prejudice and injure her. She has not even shown that the delay of
six months in resolving a sabbatical leave application has never happened prior to her case. On the contrary, any delay
that occurred was due to the fact that petitioner Diaz's application for sabbatical leave did not follow the usual
procedure; hence, the processing of said application took time. [42]

In petitioner Diaz's petition, she criticized the Court of Appeals for imputing the cause of delay to her, arguing that as the
requirement that a sabbatical leave application be filed at least one semester before its intended date of effectivity was
only imposed in 1990, long after she had filed hers in 1988. [43] But, precisely, this rule may have been imposed by U.P. to
address any untoward delays and to likewise provide a time frame for the approving authorities in resolving sabbatical
leave applications.

This Court understands petitioner Diaz's frustration, but she cannot keep on arguing that the facts, as established, and
which she herself does not dispute, had been misappreciated.in different occasions.

Petitioner Diaz's Withheld Salaries

Petitioner Diaz is entitled to her withheld salaries from July 1, 1988 to October 31, 1988, and from November 1, 1988 to
May 31, 1989, and July 16, 1989 to May 31, 1990, upon submission of the required documents.
The denial of petitioner Diaz's salaries during the first semester of Academic Year (AY) 1988-1989 was due to the fact that
she did not teach that semester. But when respondent Lazaro removed petitioner Diaz's name from the final schedule of
teaching assignments in CMC for the first semester of AY 1988-89, it was without petitioner Diaz's prior knowledge, as
admitted by respondent Lazaro herself, to wit:

ATTY. DIAZ: Now, did Prof. Diaz ask you to remove her from [the] schedule of classes?
LAZARO: I did it.
Q: Because you said you did it on your own?
A: Yes.
xxxx
Q: She did not [ask] you?
A: No.[44]

The Court, however, observes that respondent Lazaro, in so doing, did not act in bad faith as she expected petitioner
Diaz's application for leave, of whatever nature, to be granted. As such, she did not want Diaz to have to drop the classes
she was already handling once her sabbatical leave was approved, as was the case the semester before, when petitioner
Diaz dropped her classes, three weeks into the start of the semester, when her application for sick leave was approved,
viz.:

You mentioned a while ago that you deleted the name of Professor Diaz from this final schedule of
ATTY. GUNO:
classes. Why did you delete it?
I presumed in good faith that based on the letter she sent which was routed to me where she stated she
could no longer be efficient and effective as a teacher and she was suffering from fatigue and that she
could no longer work under those circumstances, 1 felt, as a gesture of sympathy to her that this should
LAZARO:
be granted suggesting that she be given a leave of absence of whatever kind she was qualified for and
based on my previous experience on the second semester where two to three weeks into the course she
dropped her courses, I did not want that to happen again.[45]
You also testified that because of the application for sabbatical leave and the reasons she gave in that
ATTY. GUNO:
letter, you deleted her name in the final list of class schedule for school year 1988-89 first semester?
LAZARO: Yes.
Q: Why did you delete her name, will you tell the Court?
She had applied for sabbatical leave for the whole year of 1988-89 and based on the experience of her
sick leave during the previous semester which was the second semester of the previous school year
A:
where three (3) weeks into classes she filed for a sick leave and did not teach, based on that experience, I
did not include her name in the class list because the same thing could happen again. [46]

While petitioner Diaz was not consulted about the removal of her name from the class schedule, she did not contest
such upon the belief that her application for sabbatical leave would be approved, as in fact, she was given her salary in
June 1988. As such, this Court believes, in the interest of equity and fairness, that petitioner Diaz should be entitled to
her salary during the semester when her name was dropped from the final list of schedule of classes, without her
knowledge and consent, and while action on her application for sabbatical leave was still pending. [47]

On the matter of her salaries from the second semester of AY 1988-89 up until AY 1989-1990, the respondents legally
withheld such, as found by the Ombudsman and the Court of Appeals for petitioner Diaz's own refusal to comply with
the documentary requirements of U.P. Even the RTC, in its Omnibus Order of January 12, 1990, denied petitioner Diaz's
petition for mandatory injunction upon the finding that the Report for Duty Form required of her is a basic and standard
requirement that is asked from all employees of U.P. The RTC held:
It is therefore clear that the acts sought to be enjoined [by Diaz] are in fact pursuant to the proper observance of
administrative or internal rules of the University. This Court sympathizes with [Diaz] for not being able to receive her
salaries after July 15, 1989. However, such predicament cannot be outrightly attributable to the defendants, as their
withholding of her salaries appears to be in accordance with existing University regulations.

Apart from such reasons, this Court believes that petitioner Diaz failed to show why she should be spared from the
Report for Duty requirement, which remains a standard practice even in other offices or institutions. To be entitled to an
injunctive writ, one must show an unquestionable right and/or blatant violation of said right to be entitled to its
issuance.[48]

But it cannot be denied that during the periods of November 1, 1988 to May 31, 1988 and July 16, 1989 to May 31, 1990,
petitioner Diaz rendered service to U.P. for which she should be compensated.

Given the foregoing, petitioner Diaz should be paid, as the RTC had computed, her salaries from July 1, 1988 to October
1988, the semester when petitioner Diaz's name was dropped from the final list of schedule of classes, without her prior
knowledge and consent; and for the periods of November 1, 1988 to May 31, 1989 and July 16, 1989 to May 31,
1990, for the work she rendered during said periods, but upon petitioner Diaz's submission of the documents required
by U.P.

No Payment of Other Damages

Given that the respondents have not abused their rights, they should not be held liable for any damages sustained by
petitioner Diaz. "The law affords no remedy for damages resulting from an act which does not amount to a legal wrong.
Situations like this have been appropriately denominated damnum absque injuria."[49] Similarly, the Court cannot grant
petitioner Diaz's claim for attorney's fees as no premium should be placed on the right to litigate. "Even when a claimant
is compelled to litigate or to incur expenses to protect his rights, still attorney's fees may not be awarded where there is
no sufficient showing of bad faith in a party's persistence in a case other than an erroneous conviction of the
righteousness of his cause.[50]

Legal Interest Due on the Salaries Withheld

Pursuant to Nacar v. Gallery Frames,[51] the applicable rate of legal interest due on petitioner Diaz's withheld salaries - (/)
from July 1, 1988 to October 31, 1988, the period corresponding to the first semester of AY 1988-89, when her name was
removed from the final list of class schedule without her prior knowledge and consent, less the amount she had received
in June 1988 - will be from April 17, 1996, the date of the Decision of the RTC, up to the full satisfaction thereof, is 6% per
annum; and (ii) from November 1, 1988 to May 31, 1989, and July 16, 1989 to May 31, 1990, the periods when she was
refused payment of her salaries for not accomplishing a Report for Duty Form - will be from the time petitioner Diaz
submits the required Report for Duty Form up to the full satisfaction thereof, is 6% per annum.

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals in CA-G.R. CV No. 55165 is
hereby AFFIRMED with MODIFICATION in that the University of the Philippines, through its appropriate officials, is
directed to pay petitioner Elizabeth L. Diaz her withheld salaries 1) from July 1, 1988 to October 31, 1988, with legal
interest at the rate of six percent (6%) per annum, computed from the date of the Decision of the RTC on April 17, 1996
until fully paid; and 2) from November 1, 1988 to May 31, 1989 and July 16, 1989 to May 31, 1990, with legal interest at
the rate of six percent (6%) per annum computed from the date petitioner Elizabeth L. Diaz submits the documents
required by the University of the Philippines until fully paid.

SO ORDERED.

Willaware ProCorp. vs Jesichris ManuCorp. (28)

Caption:
G.R. No. 195549 September 3, 2014
WILLAWARE PRODUCTS CORPORATION, Petitioner,
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.

Facts:
Jesichris Manufacturing Company the respondent filed this present complaint for damages for unfair competition with
prayer for permanent injunction to enjoin Willaware Products Corporation the petitioner from manufacturing and
distributing plastic-made automotive parts similar to Jesichris Manufacturing Company. The respondent, alleged that it is
a duly registered partnership engaged in the manufacture and distribution of plastic and metal products, with principal
office at No. 100 Mithi Street, Sampalukan, Caloocan City. Since its registration in 1992, Jesichris Manufacturing
Company has been manufacturing in its Caloocan plant and distributing throughout the Philippines plastic-made
automotive parts. Willaware Products Corporation, on the other hand, which is engaged in the manufacture and
distribution of kitchenware items made of plastic and metal has its office near that of the Jesichris Manufacturing
Company. Respondent further alleged that in view of the physical proximity of petitioners office to respondents office,
and in view of the fact that some of the respondents employees had transferred to petitioner, petitioner had developed
familiarity with respondents products, especially its plastic-made automotive parts.
That sometime in November 2000, [respondent] discovered that [petitioner] had been manufacturing and distributing
the same automotive parts with exactly similar design, same material and colors but was selling these products at a
lower price as [respondents] plastic-made automotive parts and to the same customers.
Respondent alleged that it had originated the use of plastic in place of rubber in the manufacture of automotive under
chassis parts such as spring eye bushing, stabilizer bushing, shock absorber bushing, center bearing cushions, among
others. [Petitioners] manufacture of the same automotive parts with plastic material was taken from respondents idea
of using plastic for automotive parts. Also, [petitioner] deliberately copied [respondents] products all of which acts
constitute unfair competition, is and are contrary to law, morals, good customs and public policy and have caused
[respondent] damages in terms of lost and unrealized profits in the amount of 2,000,000 as of the date of respondents
complaint.

Issue:
1. Whether or not there is unfair competition under human relations when the parties are not competitors and there is
actually no damage on the part of Jesichris?
2. Consequently, if there is no unfair competition, should there be moral damages and attorneys fees?
3. Whether or not the addition of nominal damages is proper although no rights have been established?

Held:
Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or industrial enterprises or in
labor through the use of force, intimidation, deceit, machination or any other unjust, oppressive or high-handed method
shall give rise to a right of action by the person who thereby suffers damage."
From the foregoing, it is clear that what is being sought to be prevented is not competition per se but the use of unjust,
oppressive or high handed methods which may deprive others of a fair chance to engage in business or to earn a living.
Plainly,what the law prohibits is unfair competition and not competition where the means use dare fair and legitimate.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been deleted and in its place Two
Hundred Thousand Pesos (P200,000.00) in nominal damages is awarded, the attorney's fees should concomitantly be
modified and lowered to Fifty Thousand Pesos (P50,000.00).

EUGENIO SAN JUAN GERONIMO, PETITIONER, VS. KAREN SANTOS, RESPONDENT.

DECISION

VILLARAMA, JR., J.:

At bar is a petition for review on certiorari of the Decision [1] and Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV
No. 88650 promulgated on January 17, 2011 and May 24, 2011, respectively, which affirmed the Decision [3] of the
Regional Trial Court (RTC) of Malolos City, Bulacan, Branch 8. Both courts a quo ruled that the subject document
titled Pagmamana sa Labas ng Hukuman is null and void, and ordered herein petitioner Eugenio San Juan Geronimo
(Eugenio), who was previously joined by his brother Emiliano San Juan Geronimo (Emiliano) as co-defendant, to vacate
the one-half portion of the subject 6,542-square meter property and surrender its possession to respondent Karen
Santos. In a Resolution[4] dated November 28, 2011, this Court ordered the deletion of the name of Emiliano from the
title of the instant petition as co-petitioner, viz.:

x x x The Court resolves:

xxxx

to AMEND the title of this petition to read "Eugenio San Juan Geronimo, petitioner vs. Karen Santos, respondent,"
(2) considering the sworn statement of Eugenio San Juan Geronimo that he does not know whether his brother is still
alive and that his brother did not verify the instant petition; x x x [5]
The following facts were found by the trial court and adopted by the appellate court in its assailed Decision, viz.:

On April 17, 2001, plaintiff Karen Santos, claiming to be the only child of deceased Rufino and Caridad Geronimo filed a
complaint for annulment of document and recovery of possession against the defendants Eugenio and Emiliano
Geronimo who are the brothers of her father. She alleged that with the death of her parents, the property consisting of
one-half of the parcel of land located at San Jose, Paombong, Bulacan with Tax Declaration No. 99-02017-00219 and
belonging to her parents was passed on to her by the law on intestacy; that lately, she discovered that defendants
executed a document entitled Pagmamana sa Labas ng Hukuman declaring themselves as the only heirs of spouses
Rufino and Caridad and adjudicating to themselves the property in question; and that consequently they took possession
and were able to transfer the tax declaration of the subject property to their names. She prayed that the document
Exhibit C be annulled and the tax declaration of the land transferred to her, and that the defendants vacate the property
and pay her damages.

In an amended answer, the defendants denied the allegation that plaintiff was the only child and sole heir of their
brother. They disclosed that the deceased Rufino and Caridad Geronimo were childless and took in as their ward the
plaintiff who was in truth, the child of Caridad's sister. They claimed that the birth certificate of the plaintiff was a
simulated document. It was allegedly impossible for Rufino and Caridad to have registered the plaintiff in Sta. Maria,
Ilocos Sur because they had never lived or sojourned in the place and Caridad, who was an elementary teacher in
Bulacan never filed any maternity leave during the period of her service from August 1963 until October 1984.

The plaintiff took the stand and testified that her parents were Rufino and Caridad Geronimo. The defendants Eugenio
and Emiliano were the half-brothers of her father Rufino, being the children of Rufino's father Marciano Geronimo with
another woman Carmen San Juan. Rufino co-owned Lot 1716 with the defendants' mother Carmen, and upon his death
in 1980, when the plaintiff was only 8 years old, his share in the property devolved on his heirs. In 1998, some 18 years
later, Caridad and she executed an extra-judicial settlement of Rufino's estate entitled Pagmamanahan Sa Labas ng
Hukuman Na May Pagtalikod Sa Karapatan, whereby the plaintiffs mother Caridad waived all her rights to Rufino's share
and in the land in question to her daughter the plaintiff. Be that as it may, in 1985, guardianship proceedings appeared to
have been instituted with the Regional Trial Court of Malolos by Caridad in which it was established that the plaintiff was
the minor child of Caridad with her late husband Rufino. Caridad was thus appointed guardian of the person and estate
of the plaintiff.

The plaintiff further declared that she and her mother had been paying the real estate taxes on the property, but in 2000,
the defendants took possession of the land and had the tax declaration transferred to them. This compelled her to file
the present case.

Eugenio Geronimo, the defendant, disputes the allegation that the plaintiff is the only child and legal heir of his brother
Rufino. He disclosed that when Rufino's wife could not bear a child, the couple decided to adopt the plaintiff who was
Caridad's niece from Sta. Maria, Ilocos Sur. It was in 1972, 13 years after the marriage, when Karen joined her adoptive
parents' household. Believing that in the absence of a direct heir, his brother Emiliano and he should succeed to the
estate of their brother, they executed in 2000 an extra-judicial settlement called Pagmamana sa Labas ng Hukuman.

Eugenio was able to obtain a copy of the plaintiffs alleged birth certificate. It had irregular features, such as that it was
written in pentel pen, the entry in the box date of birth was erased and the word and figure April 6, 1972 written and the
name Emma Dao was superimposed on the entry in the box intended for the informant's signature.

Two more witnesses were adduced. Atty. Elmer Lopez, a legal consultant of the DECS in Bulacan brought the plaintiffs
service record as an elementary school teacher at Paombong[,] Bulacan to show that she did not have any maternity
leave during the period of her service from March 11, 1963 to October 24, 1984, and a certification from the Schools
Division Superintendent that the plaintiff did not file any maternity leave during her service. He declared that as far as
the service record is concerned, it reflects the entry and exit from the service as well as the leaves that she availed of.
Upon inquiry by the court, he clarified that the leaves were reflected but the absences were not. Testifying on the
plaintiffs birth certificate, Exhibit 14, Arturo Reyes, a representative of the NSO, confirmed that there was an alteration in
the date of birth and signature of the informant. In view of the alterations, he considered the document questionable. [6]
On October 27, 2006, the trial court ruled in favor of respondent, viz.:

WHEREFORE, judgment is hereby rendered as follows:

1. Declaring the document Pagmamana sa Labas ng Hukuman dated March 9, 2000 executed in favor of Eugenio San
Juan-Geronimo and Emilio San Juan-Geronimo as null and void;

2. Annulling Tax Declaration No. 99-02017-01453 of the subject property in the names of Eugenio San Juan-Geronimo
and Emiliano San Juan-Geronimo;

3. Ordering defendants Eugenio San Juan-Geronimo and Emiliano San Juan-Geronimo to vacate the 1/2 portion of the
subject property and to surrender the possession to the plaintiff;

4. Ordering the defendants to pay the plaintiff the amount of [P]30,000.00 as attorney's fees;

5. To pay the costs of the suit.

SO ORDERED.[7]
The trial court ruled that respondent is the legal heir - being the legitimate child - of the deceased spouses Rufino and
Caridad Geronimo (spouses Rufino and Caridad). It found that respondent's filiation was duly established by the
certificate of live birth which was presented in evidence. The RTC dismissed the claim of petitioner that the birth
certificate appeared to have been tampered, specifically on the entries pertaining to the date of birth of respondent and
the name of the informant. The trial court held that petitioner failed to adduce evidence to explain how the erasures
were done. Petitioner also failed to prove that the alterations were due to the fault of respondent or another person
who was responsible for the act. In the absence of such contrary evidence, the RTC relied on the prima
facie presumption of the veracity and regularity of the birth certificate as a public document.

The trial court further stated that even granting arguendo that the birth certificate is questionable, the filiation of
respondent has already been sufficiently proven by evidence of her open and continuous possession of the status of a
legitimate child under Article 172 of the Family Code of the Philippines. The RTC considered the following overt acts of
the deceased spouses as acts of recognition that respondent is their legitimate child: they sent her to school and paid for
her tuition fees; Caridad made respondent a beneficiary of her burial benefits from the Government Service Insurance
System; and, Caridad filed a petition for guardianship of respondent after the death of her husband Rufino. Lastly, the
trial court held that to be allowed to impugn the filiation and status of respondent, petitioner should have brought an
action for the purpose under Articles 170 and 171 of the Family Code. Since petitioner failed to file such action, the trial
court ruled that respondent alone is entitled to the ownership and possession of the subject land owned by Rufino. The
extrajudicial settlement executed by petitioner and his brother was therefore declared not valid and binding as
respondent is Rufino's only compulsory heir.

On appeal, petitioner raised the issue on the alterations in the birth certificate of respondent and the offered evidence of
a mere certification from the Office of the Civil Registry instead of the birth certificate itself. According to petitioner,
respondent's open and continuous possession of the status of a legitimate child is only secondary evidence to the birth
certificate itself. Respondent questioned if it was legally permissible for petitioner to question her filiation as a legitimate
child of the spouses Rufino and Caridad in the same action for annulment of document and recovery of possession that
she herself filed against petitioner and his then co-defendant. Respondent argued that the conditions enumerated under
Articles 170 and 171 of the Family Code, giving the putative father and his heirs the right to bring an action to impugn
the legitimacy of the child, are not present in the instant case. She further asserted that the Family Code contemplates a
direct action, thus her civil status may not be assailed indirectly or collaterally in this suit.

In the assailed Decision dated January 17, 2011, the appellate court held that under Article 170, the action to impugn the
legitimacy of the child must be reckoned from either of these two dates: the date the child was born to the mother
during the marriage, or the date when the birth of such child was recorded in the civil registry. The CA found no evidence
or admission that Caridad indeed gave birth to respondent on a specific date. It further resolved that the birth certificate
presented in this case, Exhibit 14, does not qualify as the valid registration of birth in the civil register as envisioned by
the law, viz.:
x x x The reason is that under the statute establishing the civil register, Act No. 3753, the declaration of the physician or
midwife in attendance at the birth or in default thereof, that declaration of either parent of the newborn child, shall be
sufficient for the registration of birth in the civil register. The document in question was signed by one Emma Dao who
was not identified as either the parent of the plaintiff or the physician or midwife who attended to her birth. Exhibit 14,
legally, cannot be the birth certificate envisioned by the law; otherwise, with an informant as shadowy as Emma Dao,
the floodgates to spurious filiations will be opened. Neither may the order of the court Exhibit E be treated as the final
judgment mentioned in Article 172 as another proof of filiation. The final judgment mentioned refers to a decision of a
competent court finding the child legitimate. Exhibit G is merely an order granting letters of guardianship to the parent
Caridad based on her representations that she is the mother of the plaintiff. [8]
Noting the absence of such record of birth, final judgment or admission in a public or private document that respondent
is the legitimate child of the spouses Rufino and Caridad, the appellate court similar to the trial court - relied on
Article 172 of the Family Code which allows the introduction and admission of secondary evidence to prove one's
legitimate filiation via open and continuous possession of the status of a legitimate child. The CA agreed with the trial
court that respondent has proven her legitimate filiation, viz.:

We agree with the lower court that the plaintiff has proven her filiation by open and continuous possession of the status
of a legitimate child. The evidence consists of the following: (1) the plaintiff was allowed by her putative parents to bear
their family nameGeronimo; (2) they supported her and sent her to school paying for lier tuition fees and other school
expenses; (3) she was the beneficiary of the burial benefits of Caridad before the GSIS; (4) after the death of Rufino,
Caridad applied for and was appointed legal guardian of the person and property of the plaintiff from the estate left by
Rufino; and (5) both Caridad and the plaintiff executed an extrajudicial settlement of the estate of Rufino on the basis of
the fact that they are both the legal heirs of the deceased.

It is clear that the status enjoyed by the plaintiff as the legitimate child of Rufino and Caridad has
been open and continuous, x x x The conclusion follows that the plaintiff is entitled to the property left by Rufino to the
exclusion of his brothers, the defendants, which consists of a one-half share in Lot 1716. [9]
Petitioners moved for reconsideration[10] but the motion was denied in the assailed Resolution dated May 24, 2011.
Hence, this petition raising the following assignment of errors:

I. THAT THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION, AMOUNTING TO LACK OF
JURISDICTION, WHEN IT ALLOWED THE INTRODUCTION OF SECONDARY EVIDENCE AND RENDERED JUDGMENT
BASED THEREON NOTWITHSTANDING THE EXISTENCE OF PRIMARY EVIDENCE OF BIRTH CERTIFICATE [EXHIBIT
14].
 II. THAT THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION, AMOUNTING TO LACK OF
JURISDICTION WHEN IT RULED THAT PETITIONERS HAVE NO PERSONALITY TO IMPUGN RESPONDENT'S
LEGITIMATE FILIATION.[11]

On the first issue, petitioner argues that secondary evidence to prove one's filiation is admissible only if there is no
primary evidence, i.e, a record of birth or an authentic admission in writing. [12] Petitioner asserts that herein respondent's
birth certificate, Exhibit 14, constitutes the primary evidence enumerated under Article 172 of the Family Code and the
ruling of both courts a quo that the document is not the one "envisioned by law" should have barred the introduction of
secondary evidence. Petitioner expounds this proposition, viz.:

The findings of the courts a quo that the birth certificate [Exhibit 14] is not [the] one envisioned by law finds support in
numerous cases decided by the Honorable Supreme Court. Thus, a certificate of live birth purportedly identifying the
putative father is not competent evidence as to the issue of paternity, when there is no showing that the putative father
had a hand in the preparation of said certificates, and the Local Civil Registrar is devoid of authority to record the
paternity of an illegitimate child upon the information of a third person. Where the birth certificate and the baptismal
certificate are per se inadmissible in evidence as proof of filiation, they cannot be admitted indirectly as circumstantial
evidence to prove the same. x x x

x x x The birth certificate Exhibit 14 contains erasures. The date of birth originally written in ball pen was erased and the
date April 6, 1972 was superimposed using a pentel pen; the entry on the informant also originally written in ball pen
was erased and the name E. Dao was superimposed using also a pentel pen; there is no signature as to who received it
from the office of the registry. Worst, respondent Karen confirms the existence of her birth certificate when she
introduced in evidence [Exhibit A] a mere Certification from the Office of the Local Civil Registrar of Sta. Maria, Ilocos Sur,
which highlighted more suspicions of its existence, thus leading to conclusion and presumption that if such evidence is
presented, it would be adverse to her claim. True to the suspicion, when Exhibit 14 was introduced by the petitioner and
testified on by no less than the NSO representative, Mr. Arturo Reyes, and confirmed that there were alterations which
renders the birth certificate questionable.

Argued differently, with the declaration that the birth certificate is a nullity or falsity, the courts a quo should have
stopped there, ruled that respondent Karen is not the child of Rufino, and therefore not entitled to inherit from the
estate.[13]
On the second issue, petitioner alleges that the CA gravely erred and abused its discretion amounting to lack of
jurisdiction when it ruled that he does not have personality to impugn respondent's legitimate filiation. [14] While
petitioner admits that the CA "did not directly rule on this particular issue," [15] he nonetheless raises the said issue as an
error since the appellate court affirmed the decision of the trial court. Petitioner argues that in so affirming, the CA also
adopted the ruling of the trial court that the filiation of respondent is strictly personal to respondent's alleged father and
his heirs under Articles 170 and 171 of the Family Code,[16] thereby denying petitioner the "right to impugn or question
the filiation and status of the plaintiff." [17] Petitioner argues, viz.:

x x x [T]he lower court's reliance on Articles 170 and 171 of the Family Code is totally misplaced, with due respect. It
should be read in conjunction with the other articles in the same chapter on paternity and filiation of the Family Code. A
careful reading of said chapter would reveal that it contemplates situations where a doubt exists that a child is indeed a
man's child, and the father [or, in proper cases, his heirs] denies the child's filiation. It does not refer to situations where
a child is alleged not to be the child at all of a particular couple. Petitioners are asserting not merely that respondent
Karen is not a legitimate child of, but that she is not a child of Rufino Geronimo at all. x x x [18]
We grant the petition.

Despite its finding that the birth certificate which respondent offered in evidence is questionable, the trial court ruled
that respondent is a legitimate child and the sole heir of deceased spouses Rufino and Caridad. The RTC based this
conclusion on secondary evidence that is similar to proof admissible under the second paragraph of Article 172 of
the Family Code to prove the filiation of legitimate children, viz.:
ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

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

In the absence of the following evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.
Petitioner argues that such secondary evidence may be admitted only in a direct action under Article 172 because the
said provision of law is meant to be instituted as a separate action, and proof of filiation cannot be raised as a collateral
issue as in the instant case which is an action for annulment of document and recovery of possession.

Petitioner is correct that proof of legitimacy under Article 172, or illegitimacy under Article 175, should only be raised in
a direct and separate action instituted to prove the filiation of a child. The rationale behind this procedural prescription is
stated in the case of Tison v. Court of Appeals,[19] viz.:

x x x [W]ell settled is the rule that the issue of legitimacy cannot be attacked collaterally.

The rationale for these rules has been explained in this wise:

"The presumption of legitimacy in the Family Code xxx actually fixes a civil status for the child born in wedlock, and that
civil status cannot be attacked collaterally. The legitimacy of the child can be impugned only in a direct action brought for
that purpose, by the proper parties, and within the period limited by law.

The legitimacy of the child cannot be contested by way of defense or as a collateral issue in another action for a
different purpose. The necessity of an independent action directly impugning the legitimacy is more clearly expressed in
the Mexican Code (Article 335) which provides: 'The contest of the legitimacy of a child by the husband or his heirs must
be made by proper complaint before the competent court; any contest made in any other way is void.' This principle
applies under our Family Code. Articles 170 and 171 of the code confirm this view, because they refer to "the action to
impugn the legitimacy."

This action can be brought only by the husband or his heirs and within the periods fixed in the present articles.

Upon the expiration of the periods provided in Article 170, the action to impugn the legitimacy of a child can no longer
be brought. The status conferred by the presumption, therefore, becomes fixed, and can no longer be questioned. The
obvious intention of the law is to prevent the status of a child born in wedlock from being in a state of uncertainty for a
long time. It also aims to force early action to settle any doubt as to the paternity of such child, so that the evidence
material to the matter, which must necessarily be facts occurring during the period of the conception of the child, may
still be easily available.

xxxx

Only the husband can contest the legitimacy of a child born to his wife. He is the one directly confronted with the
scandal and ridicule which the infidelity of his wife produces; and he should decide whether to conceal that infidelity or
expose it, in view of the moral and economic interest involved. It is only in exceptional cases that his heirs are allowed to
contest such legitimacy. Outside of these cases, none - even his heirs - can impugn legitimacy; that would amount to an
insult to his memory."[20]
What petitioner failed to recognize, however, is that this procedural rule is applicable only to actions where the
legitimacy - or illegitimacy - of a child is at issue. This situation does not obtain in the case at bar.
In the instant case, the filiation of a child - herein respondent - is not at issue. Petitioner does not claim that respondent
is not the legitimate child of his deceased brother Rufino and his wife Caridad. What petitioner alleges is that respondent
is not the child of the deceased spouses Rufino and Caridad at; all. He proffers this allegation in his Amended Answer
before the trial court by way of defense that respondent is not an heir to his brother Rufino. When petitioner alleged
that respondent is not a child of the deceased spouses Rufino and Caridad in the proceedings below, jurisprudence
shows that the trial court was correct in admitting and ruling on the secondary evidence of respondent - even if such
proof is similar to the evidence admissible under the second paragraph of Article 172 and despite the instant case not
being a direct action to prove one's filiation. In the following cases, the courts a quo and this Court did not bar the
introduction of secondary evidence in actions which involve allegations that the opposing party is not the child of a
particular couple even if such evidence is similar to the kind of proof admissible under the second paragraph of Article
172.

In the 1994 case of Benitez-Badua v. Court of Appeals,[21] therein deceased spouses Vicente Benitez (Vicente) and Isabel
Chipongian (Isabel) owned various properties while they were still living. Isabel departed in 1982, while Vicente died
intestate in 1989. In 1990, Vicente's sister (Victoria Benitez-Lirio) and nephew (Feodor Benitez Aguilar) instituted an
action before the trial court for the issuance of letters of administration of his estate in favor of Feodor. In the said
proceedings, they alleged that Vicente was "survived by no other heirs or relatives be they ascendants or descendants,
whether legitimate, illegitimate or legally adopted x x x." [22] They further argued that one "Marissa Benitez[-]Badua who
was raised and cared for by them since childhood is, in fact, not related to them by blood, nor legally adopted, and is
therefore not a legal heir [of Vicente]."[23] Marissa opposed the petition and proffered evidence to prove that she is an
heir of Vicente. Marissa submitted the following evidence, viz.:

1. her Certificate of Live Birth (Exh. 3);

2. Baptismal Certificate (Exh. 4);

3. Income Tax Returns and Information Sheet for Membership with the GSIS of the late Vicente naming her as his
daughter (Exhs. 10 to 21); and

4. School Records (Exhs. 5 & 6).

She also testified that the said spouses reared and continuously treated her as their legitimate daughter. [24]
Feodor and his mother Victoria offered mostly testimonial evidence to show that the spouses Vicente and Isabel failed to
beget a child during their marriage. They testified that the late Isabel, when she was 36 years old, was even referred to
an obstetrician-gynecologist for treatment. Victoria, who was 77 years old at the time of her testimony, also categorically
stated that Marissa was not the biological child of the said spouses who were unable to physically procreate. [25]

The trial court, relying on Articles 166 and 170 of the Family Code, declared Marissa as the legitimate daughter and sole
heir of the spouses Vicente and Isabel. The appellate court: reversed the RTC's ruling holding that the trial court erred in
applying Articles 166 and 170 of the Family Code. On appeal to this Court, we affirmed the reversal made by the
appellate court, viz.:

A careful reading of the above articles will show that they do not contemplate a situation, like in the instant case, where
a child is alleged not to be the child of nature or biological child of a certain couple. Rather, these articles govern a
situation where a husband (or his heirs) denies as his own a child of his wife. Thus, under Article 166, it is
the husband who can impugn the legitimacy of said child by proving: (1) it was physically impossible for him to have
sexual intercourse, with his wife within the first 120 days of the 300 days which immediately preceded the birth of the
child; (2) that for biological or other scientific reasons, the child could not have been his child; (3) that in case of children
conceived through artificial insemination, the written authorization or ratification by either parent was obtained through
mistake, fraud, violence, intimidation or undue influence. Articles 170 and 171 reinforce this reading as they speak of the
prescriptive period within which the husband or any of his heirs should file the action impugning the legitimacy of said
child. Doubtless then, the appellate court did not err when it refused to apply these articles to the case at bench. For
the case at bench is not one where the heirs of the late Vicente are contending that petitioner is not his child by
Isabel. Rather, their clear submission is that petitioner was not born to Vicente and Isabel. Our ruling in Cabatbat-Lim vs.
Intermediate Appellate Court, 166 SCRA 451, 457 cited in the impugned decision is apropos, viz:

"Petitioners' recourse to Article 263 of the New Civil Code [now Art. 170 of the Family Code] is not well-taken. This legal
provision refers to an action to impugn legitimacy. It is inapplicable to this case because this is not an action to impugn
the legitimacy of a child, but an action of the private respondents to claim their inheritance as legal heirs of their
childless deceased aunt. They do not claim that petitioner Violeta Cabatbat Lim is an illegitimate child of the deceased,
but that she is not the decedent's child at all. Being neither legally adopted child, nor an acknowledged natural child,
nor a child by legal fiction of Esperanza Cabatbat, Violeta is not a legal heir of the deceased." [26]
Similarly, the 2001 case of Labagala v. Santiago[27] originated from a complaint for recovery of title, ownership and
possession before the trial court. Respondents therein contended that petitioner is not the daughter of the decedent
Jose and sought to recover from her the 1/3 portion of the subject property pertaining to Jose but which came into
petitioner's sole possession upon Jose's death. Respondents sought to prove that petitioner is not the daughter of the
decedent as evidenced by her birth certificate which did not itself indicate the name of Jose as her father. Citing the case
of Sayson v. Court of Appeals and Article 263 of the Civil Code (now Article 170 of the Family Code), [28] petitioner argued
that respondents cannot impugn her filiation collaterally since the case was not an action impugning a child's legitimacy
but one for recovery of title, ownership and possession of property. We ruled in this case that petitioner's reliance on
Article 263 of the Civil Code is misplaced and respondents may impugn the petitioner's filiation in an action for recovery
of title and possession. Thus, we affirmed the ruling of the appellate court that the birth certificate of petitioner Labagala
proved that she "was born of different parents, not Jose and his wife." [29] Citing the aforecited cases of Benitez-Badua
and Lim v. Intermediate Appellate Court,[30] we stated, viz.:

This article should be read in conjunction with the other articles in the same chapter on paternity and filiation in the Civil
Code. A careful reading of said chapter would reveal that it contemplates situations where a doubt exists that a child is
indeed a man's child by his wife, and the husband (or, in proper cases, his heirs) denies the child's filiation. It does not
refer to situations where a child is alleged not to be the child at all of a particular couple. [31]

Article 263 refers to an action to impugn the legitimacy of a child, to assert and prove that a person is not a man's child
by his wife. However, the present case is not one impugning petitioner's legitimacy. Respondents are asserting not
merely that petitioner is not a legitimate child of Jose, but that she is not a child of Jose at all. x x x[32]
Be that as it may, even if both courts a quo were correct in admitting secondary evidence similar to the proof admissible
under Article 172 of the Family Code in this action for annulment of document and recovery of possession, we are
constrained to rule after a meticulous examination of the evidence on record that all proof points to the conclusion that
herein respondent is not a child of the deceased spouses Rufino and Caridad. While we ascribe to the general principle
that this Court is not a trier of facts,[33] this rule admits of the following exceptions where findings of fact may be passed
upon and reviewed by this Court, viz.:

(1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures (Joaquin v. Navarro, 93
Phil. 257 [1953]); (2) When the inference made is manifestly mistaken, absurd or impossible (Luna v. Linatok, 74 Phil. 15
[1942]); (3) Where there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4) When the judgment is
based on a misapprehension of facts (Cruz v. Sosing, L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting
(Casica v. Villaseca, L-9590 Ap. 30, 1957; unrep.); (6) When the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both appellant and appellee (Evangelista v. Alto Surety
and Insurance Co., 103 Phil. 401 [1958]); (7) The findings of the Court of Appeals are contrary to those of the trial court
(Garcia v. Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]); (8) When the findings of
fact are conclusions without citation of specific evidence on which they are based (Ibid.,); (9) When the facts set forth in
the petition as well as in the petitioners' main and reply briefs are not disputed by the respondents (Ibid.,); and (10) The
finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by the
evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).[34]
It is clear in the case at bar that the ruling of both courts a quo declaring respondent as a legitimate child and sole heir of
the deceased spouses Rufino and Caridad is one based on a misapprehension of facts.
A mere cursory reading of the birth certificate of respondent would show that it was tampered specifically on the entries
pertaining to the date of birth of respondent and the name of the informant. Using pentel ink, the date of birth of
respondent - April 6, 1972 - and the name of the informant -Emma Dao - were both superimposed on the document.
Despite these glaring erasures, the trial court still relied on the prima facie presumption of the veracity and regularity of
the birth certificate for failure of petitioner to explain how the erasures were done and if the alterations were due to the
fault of respondent. It thus ruled that respondent's filiation was duly established by the birth certificate. The appellate
court did not agree with this finding and instead ruled that the birth certificate presented does not qualify as the valid
registration of birth in the civil register as envisioned by the law. We reiterate the relevant pronouncement of the
CA, viz.:

x x x The document in question was signed by one Emma Dao who was not identified as either the parent of the
plaintiff or the physician or midwife who attended to her birth. Exhibit 14, legally, cannot be the birth certificate
envisioned by the law; otherwise, with an informant as shadowy as Emma Dao, the floodgates to spurious filiations will
be opened. Neither may the order of the court Exhibit E be treated as the final judgment mentioned in Article 172 as
another proof of filiation. The final judgment mentioned refers to a decision of a competent court finding the child
legitimate. Exhibit G is merely an order granting letters of guardianship to the parent Caridad based on her
representations that she is the mother of the plaintiff. [35]
Nonetheless, the appellate court agreed with the trial court that respondent has proven her filiation by showing that she
has enjoyed that open and continuous possession of the status of a legitimate child of the deceased spouses Rufino and
Caridad, viz.:

x x x The evidence consists of the following: (1) the plaintiff was allowed by her putative parents to bear their family
name Geronimo; (2) they supported her and sent her to school paying for her tuition fees and other school expenses; (3)
she was the beneficiary of the burial benefits of Caridad before the GS1S; (4) after the death of Rufino, Caridad applied
for and. was appointed legal guardian of the person and property of the plaintiff from the estate left by Rufino; and (5)
both Caridad and the plaintiff executed an extrajudicial settlement of the estate of Rufino on the basis of the fact that
they are both the legal heirs of the deceased. [36]
We do not agree with the conclusion of both courts a quo. The appellate court itself ruled that the irregularities
consisting of the superimposed entries on the date of birth and the name of the informant made the document
questionable. The corroborating testimony of Arturo Reyes, a representative of the NSO, further confirmed that the
entries on the date of birth and the signature of the informant are alterations on the birth certificate which rendered the
document questionable. To be sure, even the respondent herself did not offer any evidence to explain such irregularities
on her own birth certificate. These irregularities and the totality of the following circumstances surrounding the alleged
birth of respondent are sufficient to overthrow the presumption of regularity attached to respondent's birth
certificate, viz.:

1. The identity of one Emma Dao, whose name was superimposed as the informant regarding the birth of respondent,
remains unknown.

2. The testimony of Atty. Elmer De Dios Lopez, a legal consultant of the Department of Education in Bulacan, proved that
the deceased Caridad did not have any maternity leave during the period of her service from March 11, 1963 to October
24, 1984 as shown by her Service Record as an elementary school teacher at Paombong, Bulacan. This was corroborated
by a certification from Dr. Teofila R. Villanueva, Schools Division Superintendent, that she did not file any maternity leave
during her service. No testimonial or documentary evidence was also offered to prove that the deceased Caridad ever
had a pregnancy.

3. Based on the birth certificate, respondent was born in 1972 or 13 years into the marriage of the deceased spouses
Rufino and Caridad. When respondent was born, Caridad was already 40 years old. There are no hospital records of
Caridad's delivery, and while it may have been possible for her to have given birth at her own home, this could have been
proven by medical or non-medical records or testimony if they do, in fact, exist.

4. It is worthy to note that respondent was the sole witness for herself in the instant case.
Finally, we also find that the concurrence of the secondary evidence relied upon by both courts a quo does not
sufficiently establish the one crucial fact in this case: that respondent is indeed a child of the deceased spouses. Both the
RTC and the CA ruled that respondent is a legitimate child of her putative parents because she was allowed to bear their
family name "Geronimo", they supported her and her education, she was the beneficiary of the burial benefits of
Caridad in her GSIS policy, Caridad applied for and was appointed as her legal guardian in relation to the estate left by
Rufino, and she and Caridad executed an extrajudicial settlement of the estate of Rufino as his legal heirs.

In the case of Rivera v. Heirs of Romnaldo Villanueva[37] which incisively discussed its parallelisms and contrasts with the
case of Benitez-Badua v. Court of Appeals,[38] we ruled that the presence of a similar set of circumstances - which were
relied upon as secondary proof by both courts a quo in the case at bar - does not establish that one is,a child of the
putative parents. Our discussion in the Rivera case is instructive, viz.:

In Benitez-Badua v. Court of Appeals, Marissa Benitez-Badua, in attempting to prove that she was the sole heir of the late
Vicente Benitez, submitted a certificate of live birth, a baptismal certificate, income tax returns and an information sheet
for membership in the Government Service Insurance System of the decedent naming her as his daughter, and her
school records. She also testified that she had been reared and continuously treated as Vicente's daughter.

By testimonial evidence alone, to the effect that Benitez-Badua's alleged parents had been unable to beget children, the
siblings of Benitez-Badua's supposed father were able to rebut all of the documentary evidence indicating her filiation.
One fact that was counted against Benitez-Badua was that her supposed mother Isabel Chipongian, unable to bear any
children even after ten years of marriage, all of a sudden conceived and gave birth to her at the age of 36.

Of great significance to this controversy was the following pronouncement:

But definitely, the mere registration of a child in his or her birth certificate as the child of the supposed parents is not a
valid adoption, does not confer upon the child the status of an adopted child and the legal rights of such child, and
even amounts to simulation of the child's birth or falsification of his or her birth certificate, which is a public document,
(emphasis ours)
Furthermore, it is well-settled that a record of birth is merely a prima facie evidence of the facts contained therein. It is
not conclusive evidence of the truthfulness of the statements made there by the interested parties. Following the logic
of Benitez, respondent Angelina and her co-defendants in SD-857 should have adduced evidence of her adoption, in view
of the contents of her birth certificate. The records, however, are bereft of any such evidence.

There are several parallels between this case and Benitez-Badua that are simply too compelling to ignore. First, both
Benitez-Badua and respondent Angelina submitted birth certificates as evidence of filiation. Second, both claimed to be
children of parents relatively advanced in age. Third, both claimed to have been born after their alleged parents had lived
together childless for several years.

There are, however, also crucial differences between Benitez-Badua and this case which ineluctably support the
conclusion that respondent Angelina was not Gonzales' daughter, whether illegitimate or adopted. Gonzales, unlike
Benitez-Badua's alleged mother Chipongian, was not only 36 years old but 44 years old, and on the verge of menopause
at the time of the alleged birth. Unlike Chipongian who had been married to Vicente Benitez for only 10 years, Gonzales
had been living childless with Villanueva for 20 years. Under the circumstances, we hold that it was not sufficiently
established that respondent Angelina was Gonzales' biological daughter, nor even her adopted daughter. Thus, she
cannot inherit from Gonzales. Since she could not have validly participated in Gonzales' estate, the extrajudicial partition
which she executed with Villanueva on August 8, 1980 was invalid. [39]
In view of these premises, we are constrained to disagree with both courts a quo and rule that the confluence of the
circumstances and the proof presented in this case do not lead to the conclusion that respondent is a child of the
deceased spouses.

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
CV No. 88650 dated January 17, 2011 and May 24, 2011, respectively, are REVERSED and SET ASIDE. The Complaint in
Civil Case No. 268-M-2001 for Annulment of Document and Recovery of Possession is hereby ordered DISMISSED.
With costs against the respondent.

SO ORDERED.